Can a co-op society co-opt more?

Romil Kulshreshtha , Pune

If the society can co-opt members in excess of 9 as laid down under the Bye Laws ? Say 17 voting members in MC?

I C Naik

“Part IXB: The Cooperative Societies” inserted in our Constitution vide The Constitution ( 97th Amendment ) Act 2011 (97CAA) has laid down a Constitutional Mandate for strength of the managing committee vide Article 243ZJ. 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:

(2) The term of office of elected members of the board and its office bearers shall be five years from the date of election and the term of office bearers shall be coterminous with the term of the board:

Provided that the board may fill a casual vacancy on the board by nomination out of the same class of members in respect of which the casual vacancy has arisen, if the term of office of the board is less than half of its original term.

(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:

Provided also that the functional directors of a co-operative society shall also be the members of the board and such members shall be excluded for the purpose of counting the total number of directors specified in the first proviso to clause (1).

Provided further that the Legislature of a State shall, by law, provide for the

reservation of one seat for the Scheduled Castes or the Scheduled Tribes and two seats for women on board of every co-operative society consisting of individuals as members and having members from such class or category of persons. UNQUOTE

The Cooperative Society Law of the State should have been re-aligned to this Constitutional Mandate, or else the law stands overruled to the extent it is inconsistent to this mandate.(per Article 243ZT)

The M C S Act 1960 in  newly introduced  Sec 73AAAvide the Maharashtra Cooperative Societies (Amendment) Act 2013  empoweres the cooperative societies to fix the strength vide its registered Bye Laws, in accordance with provisions of that section and also Section 73B and 73C. There are certain deviations in these provisions as comared to the Constitutional Mandate but we may ignore them except that Constitutional Mandate is for only one cast based seat’s reservation in every society,  but Section 73B requires three seats to be reserved in societies the State may decise and not every society.This is unconstitutional.

So what strength your society Bye Laws provide is a decisive numbers except if that is not in consonance with the Article 243ZJ. Your Society Bye Laws seem to provide 9 members and the Bye Laws of Happy go lucky also does the same. But two will not be same if your Society was registered after 2001.Happy go lucky was registered in 1997 and as such its strength was 10 (9+1 Woman additional under Section 73BBB prior to commencement of the Maharashtra Cooperative Societies (Amendment) Act 2013).

If your bye laws are as per 2001 Model Bye Laws your Committee strength stood revised automatically as under in terms of Article 243ZI read with Article 243ZT (w.e.f 13 2 2013):

General 6 + Cast based 1+ Women 2 + Experts 2 +functional 1 (12) Quorum of 5

[If your society does not have S C / STC  and woman members (or they are unwilling to join the committee ) General category goes up to 9 members.]

As Model Bye Laws aligned to 97CAA and amended the M C S Act 1960 are unlikely to be available soon (Cooperative Department staff is busy in Assembly Elections after their release from General Elections) it might be a good idea to amend your old bye laws taking guidance from the Draft Model of 2013, your society will have a proper strength.

There is no law which says that strength of the Committee should be as per Model Bye Laws but  Common People and the Cooperative Department  mistakenly believe it to be so:as such your Society can go for providing strength as per Article 243ZJ as quoted at the outset. You can have a strength of maximum of (25) i.e. 21 (including 3 Reserved Seats) +2 Experts+2 functional and there does not exist a law to day to stop your society doing that. You my keep less also. Cooperative Department will try to resist the number under an imaginary power which has not been vested in it under the M C S Act 1960. This is because amendment to Bye Laws   conforming to Scociety  law has to be registered by the Registering Authority and if not registered with in two months they are deemed to hve been registered. The happy Go Lucky Society is understood to be going head with amendment of their 1984 Model Bye Laws in line with 97CAA and the Maharashtra Cooperative Societies (Amendment) Act 2013 and the Maharashtra Co-operative Societies Election to Committee Rules, 2013. 97CAA is all about allowing a  cooperative society to run in an autonomous manner with member democratic control. And not with undue interference of the politicians or bureaucracy. The Hon. Supreme Court in a recent judgment in Thalappalam Ser.Coop.Bank Ltd.& … vs State Of Kerala & Ors. on 7 October, 2013 (Bench K.S. Radhakrishnan, A K Sikri JJ) observed in Para 19: “The Parliament, with a view to enhance public faith in the co-operative institutions and to insulate them to avoidable political or bureaucratic interference brought in Constitutional (97th Amendment) Act, 2011”

Co-option of member to fill casual vacancy is ultimately governed by Proviso to Article 243ZJ(2). Amendments to the M C S Act 1960 do not properly correspond to this Constitutional Mandate. New provisions in  Section 73AAA(4) do not deal with it in its entirety. Section 73CB(1) and Rule 74 of the Maharashtra Co-operative Societies Election to Committee Rules, 2013 shirk the onus on to each other as to how casual vacancies are to be dealt with. So cooperative societies should resort to Proviso to Article 243ZJ(2).