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Uttarakhand High Court · body

2016 DIGILAW 233 (UTT)

Pratap Singh v. State of Uttarakhand

2016-06-02

U.C.DHYANI

body2016
JUDGMENT : U.C. Dhyani, J. 1. By means of present writ petition, the petitioner seeks the following reliefs, among others:- “(i) Declare the inaction on the part of respondent no. 2 & 3 in holding election to reconstitute new Committee of Management before expiry of the term of the outgoing Committee of Management as violative of Article 243ZK (1) of the Constitution, Section 29 (3) of the Act read with Rule 431 and proviso to 436 (2) of the relevant rules. (ii) Issue a writ, order or direction in the nature of mandamus commanding the respondents no. 2 & 3 to reconstitute the new committee of management before expiry of term of the existing committee of management in accordance with Article 243ZK of the Constitution and Rule 431 and Proviso to 436 (2) of the Uttarakhand Cooperative Societies Rules, 2004. (iii) Issue a writ, order or direction in the nature of mandamus restraining the respondent no. 2 & 3 from appointing any Administrator/Committee of Administrator in place of duly elected Committee of Management of Almora Urban Cooperative Bank Ltd.” 2. At the very outset, this Court would like to mention some of the relevant provisions of the 97th Constitutional Amendment Act, 2011 as below: 3. In Part IV of the Constitution, after Article 43A, the following article shall be inserted, namely:- “43B. The State shall endeavour to promote voluntary formation, autonomous functioning, democratic control and professional management of co-operative societies.” [Emphasis supplied] 243ZI. Subject to the provisions of this Part, the Legislature of a State may, by law, make provisions with respect to the incorporation, regulation and winding up of co-operative societies based on the principles of voluntary formation, democratic member-control, member-economic participation and autonomous functioning. [Emphasis supplied] 243ZK. (1) Notwithstanding anything contained in any law made by the legislature of a State, the election of a Board shall be conducted before the expiry of the term of the board so as to ensure that the newly elected members of the board assume office immediately on the expiry of the office of members of the outgoing board. (1) Notwithstanding anything contained in any law made by the legislature of a State, the election of a Board shall be conducted before the expiry of the term of the board so as to ensure that the newly elected members of the board assume office immediately on the expiry of the office of members of the outgoing board. [Emphasis supplied] (2) The superintendence, direction and control of the preparation of electoral rolls for, and the conduct of, all elections to a co-operative society shall vest in such an authority or body, as may be provided by the Legislature of a State, by law: [Emphasis supplied] Provided that the Legislature of a State may, by law, provide for the procedure and guidelines for the conduct of such elections. 243ZL. (1) Notwithstanding anything contained in any law for the time being in force, no board shall be superseded or kept under suspension for a period exceeding six months. Providing that the board may be superseded or kept under suspension in case. (i) of its persistent default; or (ii) of negligence in the performance of its duties; or (iii) the board has committed any act prejudicial to the interests of the co-operative society or its members ; or (iv) there is stalemate in the constitution or functions of the board; or (v) the authority or body as provided by the Legislature of a State, by law, under clause (2) of article 243 ZK, has failed to conduct elections in accordance with the provisions of the State Act; Provided further that the board of any such co-operative society shall not be superseded or kept under suspension where there is no Government shareholding or loan or financial assistance or any guarantee by the Government.” 4. It will be most appropriate to reproduce the statement of Objects and Reasons herein below to understand the importance of the Constitutional provisions referred to above: “The co-operative sector, over the years, has made significant contribution to various sectors of national economy and has achieved voluminous growth. However, it has shown weaknesses in safeguarding the interests of the members and fulfillment of objects for which these institutions were organized. There have been instances where elections have been postponed indefinitely and nominated office bearers or administrators remaining in-charge of these institutions for a long time. This reduces the accountability of the management of co-operative societies to their members. However, it has shown weaknesses in safeguarding the interests of the members and fulfillment of objects for which these institutions were organized. There have been instances where elections have been postponed indefinitely and nominated office bearers or administrators remaining in-charge of these institutions for a long time. This reduces the accountability of the management of co-operative societies to their members. Inadequate professionalism in management in many of the co-operative institutions has led to poor services and low productivity. Co-operatives need to run on well established democratic principles and elections held on time and in a free and fair manner. Therefore, there is a need to initiate fundamental reforms to revitalize there institutions in order to ensure their contribution in the economic development of the country and to serve the interest of members and public at large and also to ensure their autonomy democratic functioning and professional management. 2. The “co-operative societies” is a subject enumerated in Entry 32 of the State list of the Seventh Schedule of the Constitution and the State Legislatures have accordingly enacted legislations on co-operative societies. Within the framework of State Acts, growth of legislations on co-operatives on large scale was envisaged as part of the efforts for securing social and economic justice and equitable distribution of the fruits of development. It has, however, been experienced that in spite of considerable expansion of co-operatives, their performance in qualitative terms has not been up to the desired level. Considering the need for reforms in the Co-operative Societies Acts of the States, consultation with the State Governments have been held at several occasions and in the conferences of State Co-operative Ministers. A strong need has been felt for amending the Constitution so as to keep the co-operatives free from unnecessary outside interferences and also to ensure their autonomous organizational set up and their democratic functioning. 3. The Central Government is committed to ensure that the co-operative societies in the country function in a democratic, professional, autonomous and economically sound manner. With a view to bring the necessary reforms, it is proposed to incorporate a new Part in the Constitution so as to provide for certain provisions covering the vital aspects of working of co-operative societies like democratic, autonomous and professional functioning. With a view to bring the necessary reforms, it is proposed to incorporate a new Part in the Constitution so as to provide for certain provisions covering the vital aspects of working of co-operative societies like democratic, autonomous and professional functioning. A new article is also proposed to be inserted in Para IV of the Constitution (Directive Principles of State Policy) for the States to endeavour to promote voluntary formation, autonomous functioning, democratic control and professional management of cooperative societies. The proposed new Part in the Constitution, inter-alia, seeks to empower the Parliament in respect of multi-State co-operative societies and the State Legislatures in case of other cooperative societies to make appropriate law, laying down the following matters, namely:- (a) provisions for incorporation, regulation and winding up of co-operative societies based on the principles of democratic member-control, member-economic participation and autonomous functioning; (b) specifying the maximum number of directors of a co-operative society to be not exceeding twenty-one members. (c) providing for a fixed term of five years from the date of election in respect of the elected members of the board and its office bearers; (d) Providing for a maximum time limit of six months during which a board of directors of –cooperative society could be kept under super-session and suspension; (e) providing for independent professional audit; (f) providing for right of information to the members of the co-operative societies; (g) empowering the State Governments to obtain periodic reports of activities and accounts of co-operative societies. (h) providing for the reservation of one seat for the Scheduled Castes or the Scheduled Tribes and two seats for women on the board of every co-operative society, which have individuals as members from such categories; (i) providing for offences relating to co-operative societies and penalties in respect of such offences. 4. It is expected that these provisions will not only ensure the autonomous and democratic functioning of co-operatives, but also ensure the accountability of management to the members and other stakeholders and shall provide for deterrence for violation of the provisions of the law. 5. The Bill seeks to achieve the above objectives.” [Emphasis supplied] 5. 4. It is expected that these provisions will not only ensure the autonomous and democratic functioning of co-operatives, but also ensure the accountability of management to the members and other stakeholders and shall provide for deterrence for violation of the provisions of the law. 5. The Bill seeks to achieve the above objectives.” [Emphasis supplied] 5. It is, therefore, imperative, as per the constitutional provisions that, come what may, the election of a Board (Read: Committee of Management) shall be conducted before the expiry of the term of the Board so as to ensure that the newly elected members of the Board assume office immediately on the expiry of the office of members of the outgoing Board. 6. It is the submission of learned counsel for the respondent no. 4 that the respondent no. 4 is not functional, inasmuch as, the Chairman and two members of the authority have been removed by the State Government. Only one member of the said authority is working with the interim intervention of this Court in Writ Petition (M/S) No. 1109 of 2016. 7. The constitutional provisions have to be followed in a democratic set up of the country. Therefore, the present writ petition is disposed of at the admission stage itself by directing the respondent no. 1 to constitute a Cooperative Election Authority, forthwith, as per law. Upon constitution of such authority, it is directed that the election of the cooperative society shall be conducted before expiry of the present term of the Committee of Management. 8. The Writ Petition stands disposed of with the direction, as above.