MINISTRY OF LAW AND JUSTICE
New Delhi, 13th January,2012 / Pausa 23, 1933 (Saka)
The following Act of Parliament received the assent of the President on the 12th January, 2012, and is hereby published for general information:-
THE CONSTITUTION (NINETY SEVENTH AMENDMENT) ACT, 2011
[12 th January, 2012]
An Act further to amend the Constitution of India.
BE it enacted by Parliament in the Sixty-second Year of the Republic of India as follows:-
Short title and commencement
1. (1) This Act may be called the Constitution (Ninety-seventh Amendment) Act, 2011
(2) It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint.
Amendment of article 19.
2. In Part III of the Constitution, in article 19, in clause (I), in sub-clause (c), after the words "or unions", the words "or co-operative societies" shall be inserted.
Insertion of new article 438.
3. In Part IV of the Constitution, after article 43A, the following article shall be inserted, namely:-
Promotion of co- operative societies.
"438. The State shall endeavour to promote voluntary formation, autonomous functioning, democratic control and professional¬†management of co-operative societies." -
Insertion of new Part IXI:l.
4. After Part IXA of the Constitution,¬†the following Part shall be inserted. narnely:-
THE CO-OPERATIVE SOCIETIES
243ZH. In this Part, unless the context otherwise requires,-
Incorporation¬†of co-opcrati ve societies.
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.
Number and term of members of board and its office bearers.
243Z1. (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:
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.
(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 conterminous 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 fOTco-option of persons to be members of the board having experience in the field of banking, management, finance or specialisation 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 ofa co-operative society shall also be the memebrs of the board and such memebrs shall be excluded for the purpose of counting the total number of directors specified in the first proviso to clause (1).
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.
(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:
Provided that the Legislature of a State may, by law, provide for the procedure and guidelines for the conduct of such elections.
Supersession and suspension of board and interim management.
Provided that the board may be superseded or kept under suspension in case-
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:
Provided also that in case of a co-operative society carrying on the business of banking, the provisions of the Bankin-g Regulation Act, i949 shall also apply: 10 of 1949
Provided also that in case of a co-operative society, other than a multi- State co-operative society, carrying on the business of banking, the provisions of this clause shall have the effect as if for the words "six months", the words "one year" had been substituted.
(2) In case of supersession of a board, the administrator appointed to manage the affairs of such co-operative society shall arrange for conduct of elections within the period specified in clause (1) and handover the management to the elected board.
(3) The Legislature of a State may, by law, make provisions for the conditions of service of the administrator.
Audit of accounts of co-operative societies.
243ZM. (1) The Legislature of a State may, by law, make provisions with respect to the maintenance of accounts by the co-operative societies and the auditing of such accounts at least once in each financial year.
(2) The Legislature of a State shall, by law, lay down the minimum qualifications and experience of auditors and auditing firms that shall be eligible for auditing accounts of the co-operative societies.
(3) Every co-operative society shall cause to be audited by an auditor or auditing firms referred to in clause (2) appointed by the general body of the co- operative society:
Provided that such auditors or auditing firms shall be appointed from a panel approved by a State Government or an authority authorised by the State Government in this behalf.
(4) The accounts of every co-operative society shall be audited within six months of the close of the financial year to which such accounts relate.
(5) The audit report of the accounts of an apex co-operative society, as may be defined by the State Act, shall be laid before the State Legislature in the manner, as may be provided by the State Legislature, by law.
Convening of general body rneeungs.
243ZN. The Legislature of a State may, by law, make provisions that the annual general¬†body meeting of every co-operative society shall be convened within a period of¬†six months of close of the financial year to transact the business as may be provided in such law.
Right of a member¬†to get in formation.
243Z0. (1) The Legislature ofa State may, by law, provide for access to every member of a co-operative society to the books, information and accounts of the co-operative society kept in regular transaction of its business with such
(2) The Legislature of a State may, by law, make provisions to ensure the participation¬†of¬†members¬†in the management¬†of the co-operative¬†society providing minimum requirement¬†of attending meetings by the¬†members and utilising the minimum level of services as may be provided in such law.
(3)¬†The Legislature¬†of a State may, by law, provide for¬†co-operative education and training for its members.
243ZP. Every co-operative society shall file returns, within six months of the close of every financial year, to the authority designated by the State Government including the following matters, namely:-
243 .ZQ. (1) The Legislature of a State may, by law, make provisions for the offences relating to the co-operative societies and penalties for such offences.
(2)A law made by the Legislature ofa State under clause (1) shall include the commission of the following act or omission as offences, namely:-
Application¬†to multi-State¬†co- operative societies.
243ZR. The provisions of this Part shall apply to the multi-State co-operative societies subject to the modification¬†that any reference to "Legislature of¬†a State",¬†"State Act" or "State Government" shall be construed as a reference to "Parliament", "Central Act" or "the Central Government" respectively.
Application¬†to Union territories
243ZS. The provisions¬†of this Part shall apply to the Union territories and shall, in their application to a Union territory, having no Legislative Assembly as if the references¬†to the Legislature¬†of a State were a reference¬†to the administrator thereof appointed under article 239¬†and, in relation to a Union territory having a Legislative Assembly, to that Legislative Assembly:
Provided that the President may, by notification in the Official¬†Gazette, direct that the provisions of this Part shall pot apply to any Union territory or part thereof as he may specify¬†in the notification.
243ZT. Notwithstanding¬†anything in this Part, any provision of any law¬†relating to co-operative¬†societies in force in a State immediately before the¬†commencement¬†of the Constitution (Ninety-seventh¬†Amendment) Act, 2011, which is inconsistent with the provisions of this Part, shall continue to be in force until amended¬†or repealed by a competent Legislature or other competent authority or until the expiration of one year from such commencement, whichever is less.'.
(V K Bhasin)