Constitutional Provisions

Constitutional provision for Co-operative Societies

The Cooperative Societies with objects not confined to one State are governed by Entry 44 of the List I - Union List of the Seventh Schedule to the Constitution and provisions of centrally administered Multi-State Co-operative Societies Act, 2002. The Cooperative Societies with objects confined to one State are governed by Entry 32 of the List II - State List of the Seventh Schedule to the Constitution and provisions of respective State Cooperative Societies Act.

The Multi-State Co-operative Societies Act, 2002 is administered by Central Registrar of Cooperative Societies (CRCS) who is appointed as per clause (f) of article 243ZH of the constitution read with sub section (1) of section 4 of the Act. The respective State Cooperative Societies Act are administered by the concerned State Registrar of Cooperative Societies.

The Constitution (Ninety-Seventh) (Amendment) Act, 2011

The above Amendment Act granted constitutional status to the Cooperative Societies and made the following provisions, namely:

  1. Right to form cooperative societies was included as a Fundamental Right by insertion of the words “cooperative societies” in Article 19(1)(c) in Part III of the Constitution.
  2. Article 43B was inserted in Part IV of the Constitution as Directive Principle of State Policy for promotion of cooperative societies.
  3. Part IX B ‘The Cooperative Societies’ was inserted with provisions for incorporation, regulation and winding up of co-operative societies.

The Constitution (Ninety-Seventh) (Amendment) Act, 2011 came into force wef 15.02.2012. However, Gujarat High Court, vide Judgment, dated 22.04.2013 declared that the Constitution (Ninety-Seventh Amendment) Act, 2011 inserting Part IXB containing Articles 243ZH to 243ZT is ultra vires the Constitution of India for not taking recourse to Article 368(2) of the Constitution providing for ratification by the majority of the State Legislatures. This order, however, will not affect other parts of the Constitution (Ninety-Seventh) (Amendment) Act, 2011. However, in Special Leave Petition, Supreme Court of India, vide its majority judgment, dated 20.07.2021 held that Part IXB of the Constitution of India is operative only insofar as it concerns Multi-State Co-operative Societies.

The Multi-State Cooperative Societies (Amendment) Bill 2023 also aims to incorporate the provisions of Ninety-seventh Constitutional Amendment and strengthen governance, enhance transparency, increase accountability and reform electoral process, etc. in the Multi State Cooperative Societies.