By I C Naik
Cooperative Principles as recommended by a world-wide body ICA (International Cooperative Alliance) got a statutory recognition in India only recently. The 97th Constitutional Amendment inserted a specific part “ IXB : Cooperative Societies” Article 243ZI thereof mandates to the States that “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” Some more principles are to be found in ICA statement but India decided to focus on the four basic traits of Cooperatives namely : i. Voluntary ii. Democratic iii. Economics and iv. Autonomy.
Recently the concerns of certain civic authority activists in Mumbai have reiterated their demand on BMC not to approve plans of builders who discriminates based on food or caste, religious faith etc. Read more on: http://www.mid-day.com/articles/mumbai-corporator-wants-bmc-to-penalise-builders-who-discriminate/16816165#sthash.SPrPWcm6.dpuf
It is high time that these activists are given lessons on true concept of cooperative societies. The builders have a statutory responsibility to incorporate a housing cooperative of those who have agreed to purchase flats being constructed by him. If a purchaser has been given to understand some idea of the project which induced him to agree to take a flat, the builder will have to safeguard his image by adhering to the same. They need to follow a credible policy to build an image. At this juncture I am tempted to pick up a paragraph from the judgment of the Supreme Court of India in Zoroastrian Co-Operative Housing Society’s case Rd-Sc 253 (15 April 2005).
19.It is true that it is very tempting to accept an argument that Articles 14 and 15 read in the light of the preamble to the Constitution of India reflect the thinking of our Constitution makers and prevents any discrimination based on religion or origin in the matter of equal treatment or employment and to apply the same even in respect of a co- operative society. But, while being thus tempted, the Court must also consider what lies behind the formation of co-operative societies and what their character is and how they are to be run as envisaged by the various Cooperative Societies Acts prevalent in the various States of this Country. Running through the Cooperative Societies Act, is the theory of area of operation. That means that membership could be denied to a citizen of this Country who is located outside the area of operation of a society. Does he not have a fundamental right to settle down in any part of the country or carry on a trade or business in any part of the country? Does not that right carry with it, the right to apply for membership in any cooperative society irrespective of the fact that he is a person hailing from an area outside the area of operation of the society? In the name of enforcing public policy, can a Registrar permit such a member to be enrolled? Will it not then go against the very concept of limiting the areas of operation of cooperative societies? It is, in this context that we are inclined to the view that public policy in terms of a particular entity must be as reflected by the statute that creates the entity or governs it and on the Rules for the creation of such an entity. Tested from that angle, so long as there is no amendment brought to the Cooperative Societies Acts in the various States, it would not be permissible to direct the societies to go against their bye-laws restricting membership based on its own criteria.”
At the cost of repetition lets not forget that Indian Parliament has mandated States to promote cooperative societies based on the principles of voluntary formation, democratic member-control, member-economic participation and autonomous functioning. The Builder sells the flats to citizens who as a customer he is a king. BMC does not guarantee sale of flats of the buildings, plans of which are approved by it. According to BMC “it looks into technical issues of construction and cannot direct builders on whom to sell flats to.
The S C has in Zoroastrian housing society order (supra) conceded at paragraph 26 that “It is true that in secular India it may be somewhat retrograde to conceive of co-operative societies confined to group of members or followers of a particular religion, a particular mode of life, a particular persuasion. But that is different from saying that you cannot have a co-operative society confined to persons of a particular persuasion, belief, trade, way of life or a religion. A co-operative society is not a state unless the tests indicated in Ajay Hasia are satisfied” [ Ref; Judgment of a Five Judge Constitutional Bench decided on 13 November, 1980 [1981 AIR 487, 1981 SCR (2) 79] “There is no case here that the appellant society satisfies the tests laid down by Ajay Hasia so as to be considered to be a state within the meaning of Article 12 of the Constitution. The fundamental rights in Part III of the Constitution are normally enforced against State action or action by other authorities who may come within the purview of Article 12 of the Constitution.”
In Ajay Hasia’s case Admissions to the Jammu & Kashmir Regional Engineering College, Srinagar, registered as society under the Jammu & Kashmir Registration of Societies Act, 1898 were under dispute, Regional Institution’s case was that it was not a “State” in terms of Article 12 of the Constitution and not bound by the fundamental rights to Indian citizens. The Apex Court declared that the J & K Regional Engineering College was covered by “other authorities “referred to in Article 12(1). The Order brings out at length as to how it’s operations were subject to the control of the State Government and Central Government and that it was an agency engaged in activities on behalf of the State Government and Central Government and thus it was a State itself. It was amenable to writ jurisdiction and bound by State’s obligation of guaranteeing fundamental rights.
Finally in Para 28 the Apex Court concludes “It will be easy for State Legislatures to provide in their respective Co-operative Societies Acts that no society could be formed or registered under the Act as confined to a group, a sex, a religion or members of a particular persuasion or way of life. ” It will be impermissible, so long as the law stands as it is, to thrust upon the society of those believing in say, vegetarianism, persons who are regular consumers of non-vegetarian food” The Court clarified in Paragraph 32.
97th Constitutional Amendment has added thrust on education about cooperatives amongst members and management of cooperative societies. It appears the States may well consider educating the social activists about the fundamental rights and the obligations of cooperative societies in connection therewith in the light of the Apex Court views as aforesaid.