One of the weaknesses identified in cooperative sector was lack of functioning in professional manner. The Constitution (97th Amendment) Act 2011 (the 97CAA) has therefore focused on this with specific mandates to the States to bring the Cooperative Society Law in sharp focus.
Article 243ZJ in new Part of the Constitution namely the Part Part IXB: The Cooperative Societies reads QUOTE: (1) The board shall consist of such number of directors as may be provided by the Legislature of a State, by law:
Provided that the maximum number of directors of a co-operative society shall not exceed twenty-one:
(3) The Legislature of a State shall, by law, make provisions for co-option of persons to be members of the board having experience in the field of banking, management, finance or specialization in any other field relating to the objects and activities undertaken by the co-operative society, as members of the board of such society:
Provided that the number of such co-opted members shall not exceed two in addition to twenty-one directors specified in the first proviso to clause (1):
Provided further that such co-opted members shall not have the right to vote in any election of the co-operative society in their capacity as such member or to be eligible to be elected as office bearers of the board: UNQUOTE
By now most of the visitors to www.indiancooperative.com are all aware that the M C S Act 1960 has been substantially amended by the Maharashtra Cooperative Societies (Amendment) Act 2013 to give effect to the 97CAA. Vide Section 30 of the Amending Act following provisions are made in the newly inserted Section 73AAA.
QUOTE: (1) The Committee shall consist of such number of members as may be provided in the by-laws:
Provided that, the maximum number of members of the committee shall not exceed twenty-one:
(2) The Committee may co-opt “expert directors” relating to the objects and activities undertaken by the society:
Provided that, the number of expert directors shall not exceed two, which shall be in addition to the maximum number of members of the committee as specified in the first proviso of sub-section (1) :
The State has issued the Maharashtra Co-operative Societies Election to Committee Rules, 2013 on 20th August 2013 superseding all elections rules in cooperatives. No action has been taken under Consolidated Election Rules as the Chief Election Commissioner for whose office they are made is vacant since 14 2 2013.
The Maharashtra housing societies have the freedom to have Bye Laws as registered originally or to switch over to the latest Model approved and recommended by the Commissioner and Registrar of Cooperative Societies.
It must have been noted that the M C S Act 1960 does not fix the strength of the managing committee of a cooperative society. It’s strength / composition is to be provided in the Bye Laws.
The Commissioner and Registrar of Cooperative Societies has promptly posted Model 2013 recognizing the changes in Cooperative Society Law. These are proposed and yet not released to Mumbai District Housing Federation for printing and making it available to housing societies in Maharashtra.
http://sahakarayukta.maharashtra.gov.in/SITE/PDF/Rules_Acts_Bylaws/Model_ByeLaws_of_Housing_Cooperative_societies.pdf
The Loaksabha Elections have derailed the State Cooperation Administration from its track to monitor implementation of constitutional reforms the Parliament proudly set in motion early 2012.
The Bye Laws of the cooperative society need to re-set the strength of the managing committee so as align to the M C S Act 1960 and also to provisions of 97CAA which supersedes any contrary provision of the M C S Act 1960. This is provided in Article 243ZT says QUOTE: Notwithstanding anything in this Part, any provision of any law relating to co-operative societies in force in a State immediately before the commencement of the Constitution (Ninety-seventh Amendment) Act, 2011, which is inconsistent with the provisions of this Part, shall continue to be in force until amended or repealed by a competent Legislature or other competent authority or until the expiration of one year from such commencement, whichever is less.’.
Article 243ZJ(3) is a Constitutional Mandate that the State Law shall require every cooperative society to co-opt 1 or 2 Expert director(s) which is not provided as a mandatory condition under Sub-Section (2) of Section 73AAA as aforesaid QUOTE: The Committee may co-opt “expert directors” relating to the objects and activities undertaken by the society: UNQUOTE
Bye Law No 117(b) of the proposed Draft of the Model 2013 reads QUOTE: (b) The Committee of the society may co-opt Two “expert directors” relating to the objects and activities under taken by the society. The number of such co-opted members shall not exceed two in addition to the strength of the committee as provided in bye-laws No.115., such co-opted members shall not have the right to vote in any election of the society in their capacity as such member or to be eligible to be elected as office bearers of the committee. UNQUOTE
As stated above as per Article 243ZT Sub-Section 2 of Section 73AAA of the M C S Act 1960 and proposed Bye Law No 117(b) are partly superseded by Article 243ZJ(3) making it mandatory for every cooperative society including housing societies to appoint 2 expert directors as nominated by the managing committee. The valid part in the M C S Act 1960 and the Bye Laws as regards expert directors is they can neither vote in any election nor can be voted as officer bearers of the society.
The expert director is subject to the limitation as aforesaid is member of the managing committee and his responsibilities, duties, rights are all same as other members of the managing committee. It is very important for the nominated expert members to know that unless he gets his vote of dissent on any decision of the managing committee recorded in the minutes he will be deemed to have consented to the decision. This is as per Section 73(1AB) of the M C S Act 1960 and relevant part is quoted below. QUOTE: (1AB) The members of the committee shall be jointly and severally responsible for all the decisions taken by the committee during its term relating to the business of the society. The members of the committee shall be jointly and severally responsible for all the acts and omissions detrimental to the interest of the society.
Provided further that, any member of the committee, who does not agree with any of the resolution or decision of the committee, may express his dissenting opinion which shall be recorded in the proceedings of the meeting and such member shall not be held responsible for the decision embodied in the said resolution or such acts or omissions committed by the committee of that society as per the said resolution. Such dissenting member if he so desires, may also communicate in writing his dissenting note to the Registrar within fifteen days from the date of the said resolution or decision. Any member, who is not present for the meeting in which the business of the society is transacted, and who has not subsequently confirmed the proceedings of that meeting, such member shall also not be held responsible for any of the business transacted in that meeting of the society. UNQUOTE
This is the way erring cooperative society management can be kept under check.
–I C Naik
