Article 243ZH – 243ZL

Article 243ZH – Definition

In this Part, unless the context otherwise requires, –

• “authorized person” means a person referred to as such in article 243ZQ;
• “board” means the board of directors or the governing body of a co-operative society, by whatever name called, to which the direction and control of the management of the affairs of a society is entrusted to;
• “co-operative society” means a society registered or deemed to be registered under any law relating to co-operative societies for the time being in force in any State;
• “multi-State co-operative society” means a society with objects not confined to one State and registered or deemed to be registered under any law for the time being in force relating to such cooperatives;
• “Office bearer” means a President, Vice-President, Chairperson, Vice-Chairperson, Secretary or Treasurer, of a co-operative society and includes any other person to be elected by the board of any cooperative society;
• “Registrar” means the Central Registrar appointed by the Central Government in relation to the multi-State co-operative societies and the Registrar for co-operative societies appointed by the State Government under the law made by the Legislature of a State in relation to co-operative societies;
• “State Act” means any law made by the Legislature of a State;
• “State level co-operative society” means a co-operative society having its area of operation extending to the whole of a State and defined as such in any law made by the Legislature of a State.

Article 243ZI – Incorporation in co-operative society

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 membercontrol, member-economic participation and autonomous functioning.

Article 243ZJ – Number and term of members of board and its office bearers

• 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 of category of persons.

• 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 coterminous 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.

• The Legislature of a State shall, by law, make provisions for co-option of persons to be members of the board having experience in the field of banking, management, finance or specialization 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.
  • Provided further that such co-opted members shall not have the right to vote in any election of the cooperative 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 of a co-operative society shall also be the members of the board and such members shall be excluded for the purpose of counting the total number of directors specified in the first proviso.

Article 243ZK – Election of members of 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 term 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.

Article 243ZL – Supersession and suspension of board and interim management

1. Notwithstanding anything contained in any law for the time being in force, no board shall be superseded or kept under supersession for a period exceeding six months:
   • Provided that the board may be superseded or kept under suspension in a case –
     • of its persistent default; or
     • of negligence in the performance of its duties; or
     • the board has committed any act prejudicial to the interests of the co-operative society or its members; or
     • 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 article 243ZK, 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:
   • Provided also that in case of a co-operative society carrying on the business of banking, the provisions of the Banking Regulation Act, 1949 shall also apply:
   • 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 cooperative society shall arrange for conduct of elections within the period specified in clause (1) and hand over 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.