Kerala High Court has upheld the amendments made by the state govt on the issue of denying voting rights to co-op societies in the central cooperative banks. It has, however, ruled that voting rights given to Primary Agricultural Co-op Societies and urban co-op banks are in line with the spirit of the law.
The Bench refuted each and every argument of the petitioners. It noted that while forming co-op is a fundamental right, becoming a member of a society cannot be called a fundamental right. Co-op societies are managed by their own bylaws and acts and can decide whether to take somebody as a member or not, was the purport of the court ruling.
The amendments pertained to Section 2(ia), the third proviso to Section 18(1) and Explanation I to Section 32(1) of the Kerala Co-operative Societies Act, 1969. It led to the enactment of the Kerala Co-operative Societies (Amendment) Act, 2017.
In a nutshell, the amendments meant that while PACCS and UCBs would have voting rights in the Central Co-op Banks, co-op societies would not have any and they can just exist as associate members. The govt’s rationale behind this amendment was that the focus of Central Co-op Banks shifts from agriculture lending to other aspects when its management is crowded with non-agri coop societies.
Petitioners from cooperative societies of the state demanded voting rights in the management and affairs of district central co-operative banks and cited many laws including the 97th Constitutional Amendment and Co-op Principles in its favor.
The Bench ruled that the govt is very much within its power to effect amendment especially with an aim to bring in the greater good. It also countered the arguments of the petitioners that the amendment infringes upon Article 19 and Article 43B.
As per the amended Act, the management boards of district cooperative banks were removed and administrators appointed. The amended Act also restrains members from holding the office of the president or vice-president of the banks for more than two consecutive terms.
The government said the representatives of primary agricultural credit cooperative societies and urban cooperative banks could alone provide better service in the field of agricultural credit activities and banking activities.
The govt further said the amended Act was aimed to curtail the illegal activities and corruption by cooperative institutions and safeguard public interest and ensure transparency in the administration of the societies. The amendments were made on the recommendations made by an expert committee which also had suggested forming an apex body for primary societies.
