Cooperative Societies – Current Events

In News

Recently, the Supreme Court (SC) upheld the 2013 Gujarat High Court decision where it annihilated certain provisions of the 97th Constitutional Amendment Act, 2011.

97th Constitutional Amendment Act 2011 struck down

• The 97th Amendment Act 2011 reduced the exclusive jurisdiction of the states over their cooperative societies.
• As a result, the 97th Constitutional Amendment Act was challenged in the different High Courts of India.
• In Rajendra N. Shah vs Union of India 2021 case, the Gujarat High Court struck down the 97th Constitutional Amendment Act 2011.
• It argued that the 97th Constitutional Amendment was unconstitutional, because “cooperative societies” formed a part of the State List, and hence the legislation could only by the State.
• Further, the amendment’s provisions were enacted by the Parliament without taking half of the state legislatures in the country into the constitution, as required by the Constitution.

Issues

• The amendment went as far as determining the number of directors that a cooperative society could have, including the tenure and the skills required to be a member of the society.
• Under Article 368(2), any amendment of the stature of the 97th Constitutional Amendment Act 2011 required the approval of at least half of the state legislatures.
  • This is because it dealt with an entry that was an exclusive state issue (cooperative society).
• Since such an approval wasn’t taken, it was overturned.

What did the Supreme Court say?

• Using the Doctrine of Severability, the court held that the 97th Constitutional Amendment Act should be abolished.
• This was because as required by the Indian Constitution under Article 368(2), minimum approval of half of the states wasn’t taken.
• The Supreme Court held that since cooperative societies were a part of the State List under the Schedule 7 of the Constitution, Parliament couldn’t enact legislation on that matter.
• The provisions of Part IX-B is thus, solely applied on multi-state cooperatives, operating in several states and Union territories.

Conclusion

• To secure autonomy, independence and progress of the cooperatives, following steps need to be taken:
  • A minimum level of member participation in the cooperative annually could infuse commitment.
  • Democratic participation of members and growth within the cooperative society on account of good performance could incentivize better outputs.
  • Developing effective leadership to influence decision making by the government at policy making level.
  • Better resources to the societies in terms of human resource, training, recruitments, social security.

To complete UPSC Polity Notes, Click Here

Join our Official Telegram Channel HERE
Subscribe to our YouTube Channel HERE
Follow our Instagram ID HERE