Amendment of the Multi-state Co-operative Societies Act, 2002

Amendment of the Multi-state Co-operative Societies Act, 2002

The Union Cabinet today approved the introduction of the Multi-State Co¬operative Societies (Amendment) Bill, 2010 in the Parliament. These amendments are intended to enhance the public faith in the cooperatives and to ensure better accountability of the management towards its members and the law of the land. 

It is proposed to define active member to ensure the member's active participation in the affairs of the society. Time bound decision by the society for admitting members is proposed to prevent inordinate delay by the society in admitting members. A clause is proposed to be inserted for ensuring that the members make their payment due to the society to be eligible for exercising their rights as a member. It is proposed to allow the MSCS to refund full or part of the share capital subscribed by the Government to reduce/eliminate Government control of these cooperatives. 

To ensure presence of experts on the board, it is proposed to provide that the co-opted directors should have experience in the field of banking, management, finance or specialization in any field relating to the objects and activities undertaken by the MSCS. The Directors will also be required to disclose the interest of their relatives in the affairs of the society. 

It is proposed to give freedom to the Board to constitute an Executive Committee and other committees or sub-committees as specified in the bye -laws. However, it is proposed that every society shall be required to constitute an Audit and Ethics Committee of the Board. The existing restriction on borrowings by the society is proposed to be relaxed. 

The proposed amendments also include provisions for filing of applications, documents, inspections, payment of fees, charges and issuance of certificates of registration and maintenance of documents by Central Registrar in electronic forms. It also provides for cancellation of registration if obtained by mis-representations of facts, submission of false or misleading information, suppression of material facts or fraud etc. Reservation of seat for the SC/ST and women on the board, constitution of interim board of experts for rehabilitation of a sick society, election authority for conduct of election and Cooperative Rehabilitation and Reconstruction Fund for rehabilitation and development of cooperative societies have also been proposed. 

The proposed amendments also include provision for Cooperative Information Officer and Appellate Authority to provide information to the members about the affairs and management of the society; penal provisions for non filing of returns; non-admission of new members by the administrators when the board is under supersession; obligation on the part of a Multi-Stats Co-operative Society to make available its products and services to its members and their patronage by the members, etc. 

Background

The objective of Multi-State Co-operative Societies (MSCS) Act 2002 is to facilitate the organization and functioning of the cooperative societies having jurisdiction in more than one States. This Act which came in force with effect from 19.8.2002 was enacted to replace the Multi-State Cooperative Societies Act, 1984. The Act facilitates voluntary formation and democratic functioning of multi-state cooperative societies as member driven institutions based on self-help and mutual aid and to enable them to promote their economic and social betterment and provides for functional autonomy. 

Based on the experience of implementation of the MSCS Act, 2002, interaction and feedback received from various stakeholders including the multi- state co-operative societies and recommendations made by the High Powered Committee on Cooperatives constituted by the Government of India under the chairmanship of Shri S.O. Patil, a need was felt to further amend the Multi-State Co-operative Societies Act, 2002 to keep the legislation in tune with the changing economic policies and to facilitate the multi-state co-operative societies to take advantage of the new and emerging opportunities.