By I C Naik
The Cooperative Department of the State of Maharashtra has understood the 97th Constitutional mandate quite differently as reflected in the amended Maharashtra Cooperative Societies (Amendment) Act 2013 (the MCSA 2013).
The breach is more than obvious in laws governing the constitution of the governing Boards of cooperative societies.
Two new clauses in Section 2 of the M. C. S. Act 1960 as inserted vide the MCSA 2013 define the two new terms namely “expert director” and “functional director” as under.
“Sec. 2.Cl. (11A) “expert director” means a person having experience in the field of banking, management, co-operation and finance and includes a person having specialization in any other field relating to the objects and activities undertaken by the concerned society;”
“Sec. 2.Cl. (14 A) “functional director” means a Managing Director or a Chief Executive Officer by whatever designation called, and includes any Head of the Department, workman or representative of the recognized union of the concerned society, nominated by the Committee;”;
Sub-section (1) of the newly inserted Section 73 AAA shifts the onus of fixing number of directors to the bye laws with a cap of 21 on the total number.
Sub section (2) thereof empowers the Committee to co-opt “expert directors” relating to the objects and activities undertaken by the society as they may deem fit with a cap of two numbers over and above 21, a restriction of not voting in any election in the cooperative society and ban on becoming an officer of the cooperative society.
Second Proviso to Sub section (2) of Section 73AAA confers a discretionary power to the Committee to nominate one person as a functional director in case of the committee having not more than seventeen members and one more person if number of committee members exceeds 17 with the clarification that
i. The functional directors are in addition to the number fixed in the Bye Laws as per.
ii. They shall also be the members of the committee but
iii. such members shall be excluded for the purposes of counting the total numbers of members of the committee fixed as stated in the Para 3(b) hereof:
Vide Proviso 3 to sub-section (2) of Section 73AAA there is a mandate to the Committee of a society having contribution of the Government towards its share capital, that the members of the committee shall include two officers of the Government nominated by the State Government, which shall be in addition to the number of members fixed as stated in the Para 3(b) hereof:
Thus as against the 23 numbers of directors restricted under Constitution, the Supreme Legal document of the Country, there is a provision in the State Law to go up to maximum of 27 members on the board.
Interestingly a subtle breach of the mandate is that constitutionally, the Specialists directors are mandatory for every cooperative society in the whole of India but when it comes to State of Maharashtra the State takes a liberty to give total discretion to governing boards as to appoint such specialized directors or not.
What is not easily discernible is that the nominated functional directors can occupy positions of Chairman and Secretary also if the none of the elected members do not want such onerous responsibilities themselves. Is this what the Parliament voting on the 97th CAA contemplated? Committees having discretion here also should jump at it one can imagine.
Does this not offer itself as a suitable case for PIL in Bombay High Court?
