Amendments to the Act and the 97th Constitutional Amendment

The Act Is a Living Law

The Maharashtra Co-operative Societies Act, 1960 has been amended many times since it came into force, to meet changing conditions — for example, to strengthen audit, to control mismanagement, to bring urban and agricultural credit societies and co-operative banks under tighter discipline (also in line with the requirements of the Reserve Bank of India for banking societies), and to make elections and management more transparent. A law that governs such a large and changing sector must be updated regularly; this is why 'amendments' are studied as part of the chapter.

The 97th Constitutional Amendment Act, 2011 — the Turning Point

By far the most important change came from outside the State Act itself — from the Constitution of India. The 97th Constitutional Amendment Act, 2011 (which came into force in 2012) gave co-operative societies, for the first time, a special place in the Constitution. It made three main changes:

1. A Fundamental Right — it amended Article 19(1)(c) so that the right to form co-operative societies is now a fundamental right of citizens, along with the right to form associations and unions.
2. A Directive Principle — it inserted Article 43B, directing the State to promote the voluntary formation, autonomous functioning, democratic control and professional management of co-operative societies.
3. A new Part IX-B — it added a whole new Part IX-B ('The Co-operative Societies') to the Constitution, laying down a set of rules that the States were required to follow in their own co-operative laws.

What the Amendment Required States to Do

Part IX-B required every State to amend its co-operative law to provide, among other things, for:

• A fixed term of five years for the elected committee (board) of a society;
• A maximum number of directors on the board (not more than twenty-one);
• Reservation of seats on the board for women and for members from the Scheduled Castes / Scheduled Tribes / weaker sections;
• Independent, timely elections conducted by a State Co-operative Election Authority, held before the term of the existing board ends;
• A limit on the period of supersession of an elected board (generally not more than six months);
• Compulsory audit of accounts within six months of the close of the year, by auditors from an approved panel; and
• Filing of returns (accounts, audit report, list of members, etc.) with the Registrar within six months of the year-end, to ensure transparency.

Impact on the Maharashtra Act

To bring its law in line with Part IX-B, Maharashtra amended the 1960 Act (through amending legislation in 2013). As a result the modern Act now contains all the features listed above — the five-year board term, the cap on the number of directors, reservation of seats for women and weaker sections, elections through the State Co-operative Election Authority, limits on supersession, audit within a fixed time by panel auditors, and timely filing of returns. The overall aim of these changes is to make co-operative societies more democratic, more transparent, more professionally managed and more autonomous, with less scope for political or bureaucratic interference.

An Honest Note on the Later Position …