“Sarkar mukta Sahakar”–Can we do it?

By I C Naik

Does the existence of the Registrar of cooperative societies (i.e. SARKAR) a must for “Checks and Balance” mechanism in co-operatives on the lines of the one embedded in to the governance of Indian democracy? Avoiding this core issue has been stopping it from letting it happen.

Checks and Balance mechanism in Cooperative Federal Republic of India is ingrained in to the interplay of the following three pillars of any democratic republic:

1.The Executive ( The President – CEO of Indian Bureaucracy and the Constitutional Head of the Nation acting on the advice of the Popular Government headed by the Prime Minister a full time confident representative of the majority of Parliamentarians).

2.The Two Houses of Parliament – having a law making privilege

3.The Judiciary with absolute power of judicial scrutiny of any Law whether conforming to the Constitution or ultra wires?

These three independent pillars of Indian democracy are glued to each other through oath of loyalty to the common document the Constitution of India. The Constitution can be said to be akin to the Bye Laws of a cooperative society. Articles of the Constitution are like a set of bye-laws to the Cooperative Federal Republic of India. It is the face (the Executive) the heart ( the Parliament) and the soul (Judiciary) of the sovereign power of the people of India. The Checks and Balances are built in to this Constitutional system like they are in every human body. There is no power outside the Constitution to exercise “checks and balances” comparable to an Indian faith that God resides as soul in every human being.

Having compared the Constitution of India with Bye-laws of a cooperative housing society how do we reassure ourselves, that it is really so. Bye laws are supposed to be framed by the members,(Bye laws are contracts inter se the members and they bind them togather– Supreme Court in Zoroastrian C H S Limited And Another V. District Registrar Co-Operative Societies (Urban) & Ors [2005- Rd-Sc 253 (15 April 2005) for the members themselves and precisely for regulating their own conduct severally and jointly.

This feature of Bye-laws dates back to 1844. About the Rochdale Pioneers forming the Equitable Society of Rochdale Pioneers in 1844 what George Jacob Holyoake, (1817 – 1906) a British secularist, co-operator, and newspaper editor [1864-67]  said is worth recalling.He recalled  “acting on Sir Robert Peel’s memorable advice, they (Rochdale Pioneers ) have taken the management of their own affairs into their own hands, and what is more to the purpose they have kept them in their own hands.” Sir Robert Peel, 2nd Baronet (1788 – 1850) was a British Conservative statesman, twice Prime Minister of the United Kingdom [10 December 1834 to 8 April 1835, and 30 August 1841 to 29 June 1846].

It’s obvious that as a corollary, the “Checks and Balances must exist and be perceived to exist inside the scheme of the bye laws like what it is in the Indian Constitution. Fundamental Right to form a Cooperative Society having been conferred now (The Constitution ( 97th Amendment ) Act 2011 (97CAA] a time has ripened that the Bye-Laws provide the mechanism of checks and balances by institutionalizing the internal processes rather than personalizing them in to the external agency the Registrar of cooperative societies [ the Sarkar].

India having recognized and accepted the responsibility to ensure growth of Cooperative Movement and having laid down a basic frame work for that purpose (97CAA) to be imbibed under the M C S Act 1960 (for that matter in every state law) the registered Bye-Laws  of every cooperative society should provide for constituting an internal body like Grievance Redress Committee (members own justice system) to provide remedy to aggrieved members on all matters  including breach of bye laws by the management adversely affecting their rights in any manner.

It has to be appreciated that every breach of bye law by the management adversely affects the contractual rights of members). One simple provision in the M C S Act 1960 should completely internalize the bye law compliance namely a statutory mandate to every cooperative society to constitute Arbitration Committee of three members in every cooperative society (one nominated by complainant another by any opposite member and the third by the Chairman / management as an appellate body to review any decision of the Grievance Redress Committee at the instance of any aggrieved party.

And it’s award is binding on all concerned subject to right to final appeal to the Cooperative Court to reconfirm the adherence to principles of natural justice and consequential remand back or uphold. Any violation of provisions of the M C S Act 1960 is to be adjudicated upon, by the Cooperative Courts which operating independently under the jurisdiction of the State Judicial system, completely insulating the cooperatives to politicians and bureaucratic system. [ Maharashtra Co-Operative Courts’ Bar Association And Ors vs   State Of Maharashtra And Ors [24/7/1990] M.L. Pendse Bombay High CourtJ already shifted the administrative control of the State Government over cooperative courts to the Judiciary.

By directing the States to establish an independent State Cooperative Election Authority a step has been already taken by the Republic, In this Scheme, the presence of the Registrar needed to be restricted to keeping records of cooperative societies like the Registrar of joint stock companies and referring the breaches of the provisions of M C S Act 1960 to the courts without himself sitting in the judgment. If we recall the crux of the recommendations of various Committees which reported on functioning of cooperative societies over half a century and which belatedly as also halfheartedly resulted in to the enactment of the Constitution (97th Amendment) Act 2011 their basic philosophy would profusely stand out on the lines discussed above. If we recall the report of the Chowdary Brahm Perkash Committee (1991) recommended “no power to the Registrar or the Government “ to issue orders inter alia for the following in a cooperative:

a)   Supersession of the Board of Director

b)   Compulsory amendment of bye-laws

c)    Veto/rescind/annul the resolution

d)   Issue directives

The Committee observed; “Over the years, the Registrar has acquired undue powers in respect of management decisions of the cooperatives, which should be curtailed.”

It is the political fall-out of the post independence politics spread over more than 65 years that has consciously held back liberating the Cooperative movement out of the clutches of politicians and bureaucracy.

Indian Cooperative has never found itself to be so near to one more big announcement in the form of the latest NAMO-MOTTO namely the SARKAR-MUKTA SAHKAR assuring far reaching consequences to poverty ridden Indian social spectrum.  There is no other day better suited to this announcement than the very first Republic Day after the May15 hurricane that completely overturned more than half a century old political scenario.