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Cooperative Societies – Current Events

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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.


  • 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.


  • 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.

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