RTI Act - Applicability to Cooperative Societies
Co-operative societies now come under RTI Act
Co-operatives make up for one-sixth of Maharashtra’s economy; they are also abodes of chronic corruption. No wonder, many are yet to digest the fact that co-operatives have now come under the RTI Act and so public disclosures of their functioning is mandatory
Vijay Kumbhar, a leading RTI (Right to Information) activist from Pune, has been researching on the aspect of co-operatives coming under the RTI Act after the enactment of the 97th amendment to the Constitution of India in March 2012. Now, “co-operative societies” have not only become a part of Article 19 of the Constitution of India making them one of the fundamental rights of a citizen, but have now also been given the status of local self-government in Part IX of the Constitution. This makes them accountable under the RTI Act. However, many a vested interest is trying to hoodwink this fact. A tete-a-tete with Kumbhar.
Why do you say that co-operative societies which were until recently out of the gambit of RTI Act, now come under it?
Vijay Kumbhar: With the enactment of the 97th amendment to the Constitution of India and its inclusion in Article 19 of the Constitution, formation of cooperative societies has become one of the fundamental rights of an Indian citizen. Besides, they have been given the status of local self-government like rural and urban municipal bodies in Part 9 of the Constitution. Cooperative societies have thus come under the ambit of the Right to Information Act.
So, under what section of the RTI Act do co-operative societies come under?
Kumbhar: As per Section 2 (h) of the RTI Act, “public authority” means any authority or body or institution of self-government established or constituted—
(a) by or under the Constitution;
(b) by any other law made by Parliament;
(c) by any other law made by the State Legislature;
(d) by notification issued or order made by the appropriate government, and now as per Section 2
(h) (a) of RTI Act, any cooperative society has become an ‘authority’ or ‘body’ or “institution of self-government” established or constituted by or under the Constitution and hence it comes under the ambit of the RTI Act.
Could you elaborate on how co-operative societies came to be included in Article 19 of the 97th Amendment of the Constitution of India?
Kumbhar: Article 19 of the Constitution of India protects certain fundamental rights of the citizens. All citizens have the right to freedom of speech and expression; to assemble peacefully and without arms; to form associations or unions; to move freely throughout the territory of India; to reside and settle in any part of the territory of India; and to practice any profession, or to carry on any occupation, trade or business. Now forming a cooperative society is also a fundamental right. (Moreover, as per Article 43B of Part IV it is now the duty of the states to promote voluntary formation, autonomous functioning, democratic control and professional management of cooperative societies to encourage economic activities of cooperatives which in turn would facilitate progress of rural India.)
Part IX of the Constitution comprise local self-governments; Part IX pertains to Panchayats; Part IX B is about municipalities and now with the insertion of Part IX C, co-operative societies have acquired the status of local self-governments. Correspondingly, cooperative societies have come under the RTI Act.
What are the institutions that come under the co-operative societies?
Kumbhar: Cooperative societies normally include co-operative banks, credit societies, sugar factories, handloom-power loom factories, distilleries, milk producing societies, water supply societies and so on. Henceforth, all such institutions will have to appoint Public Information Officers, Appellate Authorities and comply with all the provisions of the RTI Act. This is the most revolutionary event in the history of our country in the recent past.
So, weren’t co-operative societies accountable to the government and people before the 97th Amendment? What has changed?
Kumbhar: Normally there are three sectors of industries; public, private and cooperative. The first one is wholly owned by a state or the central government and the governments have complete control over its investments and management and it is accountable to the governments as well as to the public. Although the private sector abides by the laws, rules and regulations of the governments it is not answerable or accountable to the governments or the public for the losses/profits or management. It is accountable only to its owners or shareholders as per the law of the land. The cooperative sector was a blend of the public and private sectors. So far, it was enjoying the facilities available to the public sector such as loans, share capital from the state, etc but was not accountable to the state or the public. With the Part IX inclusion in the 97th amendment, the scenario has changed and the cooperative sector is now accountable to the state and the public.
Why is it that so far there was no clarity about the applicability of the RTI Act to cooperative societies?
Kumbhar: Several information commissions and courts had given contradictory verdicts on this matter. Cooperative societies were out of the ambit of the RTI Act because it was not an ‘authority’ or ‘body’ or an ‘institution’ of self-government established or constituted by or under the Constitution. Hence, attempts to bring a cooperative society under the RTI Act, claiming it to be an ‘institute’, a “body owned, controlled or substantially financed by notification issued or order made by the appropriate government” failed. In addition, authorities of these institutes always took the stand that they did not come under the RTI act. Now, they cannot escape as it has become the fundamental right of a citizen.
What about the fact that some experts say that the RTI Act for co-operative societies applies only to those that are established after the Constitutional amendment in Article 19 and Part 9?
Kumbhar: This is just an eye-wash because this is not a new Co-operative Act that has been implemented but an amendment to the Act as per the amendment to the Constitution of India which already exists. Hence, every co-operative society no matter how old or new comes under the RTI Act.
What about the fact that there are some Supreme Court and high court judgments which have ruled that co-operative societies do not come under the RTI Act?
Kumbhar: Constitution of India is over and above any high court or Supreme Court judgment so now with the constitutional amendments, these judgments are irrelevant.
What would be the impact of co-operative societies coming under the RTI Act, particularly in Maharashtra?
Kumbhar: In reality, considerable part of the country’s economy is occupied by the cooperative sector. It is said that about 1/6th of Maharashtra’s economy comprises co-operative societies. A major part of Maharashtra politics is also influenced by the cooperative sector. The scale of illegalities, scams and corruption in this sector is also high. The cooperative sector including co-operative banks and credit co-operative societies block substantial government funds running into hundreds of crores. As of 2012, the unaccounted for amount is close to Rs15,000 crore.
The statistics of the department of cooperative societies of Maharashtra in 2009-10 show that there were 2,18,320 cooperative societies in Maharashtra and the total membership of these societies was 5.52 crore. One estimate of the number of societies is at about 2,30,000 with a membership of about 6.5 crore. For the entire country, this number could go up to 6.5 lakh societies with 30 crore members.
A giant sector such as this was uncontrolled and unaccountable till now. One can hope that this sector will move in a positive direction after the 97th amendment to the constitution.
So, has this amendment already been enacted?
Kumbhar: After the amendment was enacted in 2012, a period of one year was given to the states to amend as well as repeal existing provisions of law to bring in line with the new provisions in the Constitution. Usually, state assemblies approve such amendment. However, as the assembly was not in session, the Government of Maharashtra introduced an ordinance on 15 February 2013 and thus these amendments have now become law.
What are the highlights of Maharashtra Co-operative Societies Act after the amendments?
Kumbhar: The highlights of the Maharashtra Cooperative Societies Act and Rules after amendments are:
(i) Incorporation of cooperative societies on the principles of voluntary formation, democratic member control, member economic participation and autonomous functions;
(ii) Conduct of election of a cooperative society by an independent electoral authority;
(iii) A fixed term of five years for the office bearers of the cooperative society;
(iv) Supersession of the board of a cooperative society for a period of not exceeding six months;
(v) Independent professional audit of the cooperative societies;
(vi) Convening of the general body meeting of every cooperative society within a period of six months of the close of the financial year;
(vii) Access to every member of the society to the books, information and the accounts of the cooperative society;
(viii) Filing of the returns by every cooperative society within six months of the close of every financial year;
(ix) Free, fair, impartial and timely elections of cooperative societies by independent body;
(x) Audit of the cooperative societies to be carried by the auditors from the government approved panel of auditors or firms;
(xi) Maximum number of 21 directors to be applicable to all cooperative societies irrespective of their size with two seats reserved for women; and
(xii) Co-opted members not to be eligible to be elected as office-bearers of the board.
Also there are provisions of penalty for consistent defaults, acting against the interest of the institution, deadlock in the board of directors, not ordering elections within specified time, corruption, irregularities in duty, deliberately giving false information, disobeying orders of authorities, etc.
Is Article 19 of the 97th Amendment to the Constitution similar to the 74th Amendment which gave status of local government to Panchayats/municipalities/municipal corporations?
Kumbhar: Before 1992, panchayats and municipalities were also not bodies established by or under the Constitution. However, that did not mean that there were no panchayats or municipalities. However, due to their autonomous status, their functioning was arbitrary. They did not acquire the status and dignity of viable and responsive people's bodies due to varied reasons including absence of regular elections, prolonged supersession, insufficient representation of the weaker sections, etc.
Hence, to give certainty, continuity, and strength to Panchayat Raj with 73rd amendment, Part IX was inserted in the Constitution. Later as Urban Local Bodies were not able to perform effectively as vibrant democratic units of self-government, with the 74thAmendment, Part IX B was inserted to give municipalities a status. Now with the 97th Amendment, Part IX B has been inserted to give cooperative societies a status of local self-government.
(Vinita Deshmukh is the consulting editor of Moneylife, an RTI activist and convener of the Pune Metro Jagruti Abhiyaan. She is the recipient of prestigious awards like the Statesman Award for Rural Reporting which she won twice in 1998 and 2005 and the Chameli Devi Jain award for outstanding media person for her investigation series on Dow Chemicals. She co-authored the book “To The Last Bullet - The Inspiring Story of A Braveheart - Ashok Kamte” with Vinita Kamte and is the author of “The Mighty Fall”.)
