Venigalla Sambasiva Rao
I am a Director of the APIIC EMP House Buildng Mutually Aided Co-opertive Society Ltd which was estabilished during the year 2006 and got registered under AP MACS Act 1995.
We have 12 Directors on the Board. Every year 4 directors will retire and new directors will be inducted in their place by conducting elections as per the procedure laid down in the Bye-laws of the society. As such 4 directors will retire by 20th August 2013 as per bye laws.
However, the Dy Reigistrar was addressed to conduct the Elections keeping the Constitutional amendment for induction of Directors in place.
The Society has also approached the Registrar for clarification the items to be amended duly furnishing the information in a tabular form showing the existing bye-laws and proposed bye law to be incorporated as per the provisions of the 97th Constitutional amendment Act.
The Registrar is now saying that the AP Govt. is so far not passed amended bill nor given any instructions to conduct the elections as per the new 97th amended Act. AS per the 97th amendment act, the State shall appoint Chief Election officer to ensure elections under their supervision to the Election officer who will be appointed by the Chief Election Commission/officer.
The deparment is now saying that in the absence of the clear – cut – guidelines/rules or amendments to the act, they will appoint Person in charge (PIC) to manage the affairs of the Society.
The proposed move of the Registrar is totally unwarranted/unexpected and not proper in the sense the society has been developing dwelling plots for its employees at different places and progress of many works are at different stages and the Directors have put their maximum efforts to brought up the society this level since 2006.
At this juncture appointing a PIC will jeoparide the interest of the Society and members of the Socety.
In the above circumstances, please be clarified on the following points:
1. Can the Registrar appoint PIC in place of Directors Board ?
2. Can we co-opt 4 four directors till the amendments take place ?
3. Can the Registrar remove all the existing Directors whose term is still to be completed?
(4 directors terms will end by 20-8-2014 & another 4 directors terms end by 20-8-2015)
4. Can the term of the existing directors will be automatically be extended for a period of five years?
Kindly suggest the future course of the actions to be followed by us?
I C Naik
1. Prologue
a. Despite a decisive ban on State Governments taking over management of cooperative societies, not receiving any State financial aid, the temptation does not seem to be dying down and on a flimsy pretext also attempts are still made in sheer contempt of constitutional mandate.
b. www.indiancooperative.com has received information from a cooperator in the State of Andhra Pradesh of such an attempt in progress.
c. Directors of a House Building Mutually Aided Co-operative Society Ltd registered under AP MACS Act 1995 in the year 2006.(the AP MACS Act)
2. Some facts about the Society :
a. Venigalla Sambasiva Rao (Rao for brevity) is a Director of the House Building Mutually Aided Co-opertive Society Ltd (referred to as the Society) registered under AP MACS Act 1995 in the year 2006.(the AP MACS Act)
b. It has a 12 member on board with the scheme of rotational retirement of 1/3
every year after three year term ends.
c. New directors are elected as per the procedure laid down in the Bye-laws of the society.
d. 4 directors’ retirement fell on 20th August 2013. There are 9 directors on board.
3. Attempts made to remedy the situation
a. The Dy Reigistrar was requested to order the Elections to fill up the imminent vacancy.
b. The Society simultaneously approached the Registrar for clarification on the clauses of the Bye Laws to be amended, duly furnishing the information in a tabular form showing the existing bye-laws and proposed bye law to be incorporated as per the provisions of the 97th Constitutional amendment Act.
c. The Registrar has brought in a new dimension that the AP Govt. has neither passed the amendment bill nor given any instructions to conduct the elections as per the new 97th amendment Act. His story was that as per the 97th amendment act, the State shall appoint Chief Election officer to ensure elections under their supervision of the Election officer who will be appointed by the Chief Election Commission’s office.
d. Down the line the department saw an opportunity saying that in the absence of the clear – cut – guidelines/rules or amendments to the act, they will appoint Person in charge (PIC) to manage the affairs of the Society.
4. Society’s Stand
a. The proposed move of the Registrar is totally unwarranted/unexpected and not proper in the sense the society has been developing dwelling plots for its employees at different places and progress of many works are at different stages and the Directors have put their maximum efforts to bring up the society to this level since 2006.
b. At this juncture appointing a PIC will jeoparide the interest of the Society and members of the Socety.
5. Society’s dilemma:
a. Can the Registrar appoint PIC in place of Directors Board ?
b. Can we co-opt 4 four directors though the amendments have taken place ?
c. Can the Registrar remove all the existing Directors whose term is still to be completed ?
d. Can the term of the existing directors will be automatically be extended for a period of five years ?
As most of cooperators are aware THE 97TH CONSTITUTIONAL (AMENDMENT) ACT 2011 became effective on and from 14 2 2012. AA 243ZJ/243ZK applies to all cooperative societies across India. Relevant portion is reproduced below.
“Article 243ZJ (2) :Mandates that the tenure of the Board 5 years”
Article 243ZJ(3) Society’s be permitted under the Legislature of a State to co-opt 2 additional professionals. as members of the board without a right to vote in any elections or be an office bearer. of the co-operative society in their capacity as such member or to be eligible to be elected as office bearers of the board:
Article 243ZK. strictly provides that, the election of a board shall be conducted before the expiry of the term of the board including filling up a casual vacancy during the tenure by the State Election Commission.
Article 243ZL says that the board of a co-operative society shall not be superseded or kept under suspension if there was no Government shareholding or loan or financial assistance or any guarantee by the Government:
Answers to Society’s dilemma
a. The Registrar is prohibited from appointing PIC in place of elected Board.
b. No need to co-opt 4 four directors since their tenure got extended to 20-8-2016 as now 5 year is uniform in all societies all over India.
c. The Registrar is prohibited from appointing PIC in place of elected Board and he cannot remove any Directors.
d. The term of the existing directors has automatically extended to 5 years.
Advice:
a. The Dy Registrar’s moves are not supported by law.
b. Directors under cloud should not relinquish their seats without a written order of the Registrar.
c. If an order is issued appointing a PIC, do not give charge and go in appeal and for a stay.