Co-Operative Society

Abstract

This paper seek to determine whether the co-operative society is whether a co-operative society registered will fall within the definition of “public authority” under Section 2(h) of the Right to Information Act, 2005 (for short “the RTI Act”) and be bound by the obligations to provide information sought for by a citizen under the RTI Act. In this regard case Thalappalam Coop. vs State of Kerala[1] and 97th Amendment shall be the focal point of the analysis to understand  post and pre amendment view  of “ Co-operative societies under  the ambit of RTI  act’’.


INTRODUCTION

The history of Co-operative movement in India has its roots in the agriculture and various allied sector. The cooperatives have been operating in various areas of the economy such as dairying credit, production, textiles etc. In the areas of dairying, sugar and handlooms, the cooperatives have achieved success to a very great extent. The failure of cooperatives in the country is mainly attributable to:

  • Dormant membership
  • Lack of active participation of members in the management of cooperatives.
  • Mounting overdue in cooperative credit institution,
  • Lack of mobilisation of internal resources and over-dependence on Government assistance,
  • Lack of professional management
  • Bureaucratic control  interference in the management,
  • Political interference
  • Over-politicisation

The main aim of Co-operative societies is to provide tangible benefit to all people who face similar problems. The Co-operative societies play an important role in the socio-economic development of the country. The Parliament in order to address the problem introduced 97th Amendment to the Constitution. The 97th Amendment to the Constitution enshrines within Article 19(1) (c) the right to form co-operative societies. However, the controversy arose whether the Co-operative societies is public authorities and hence come under the ambit of RTI act.               

COMPARATIVE ANALYSIS OF CASE AND AMENDMENT

  • Case

In the case Thalappalam Coop. vs State of Kerala  the issue  in question was  whether the Co-operative societies is public authorities to be covered under the ambit of RTI act.

In this case court examined whether Co-operative societies fall under the ambit of ‘state’ enshrined in article 12 of the constitution. The court on the basis of previous case Ajay Hasia v Khalid Mujib[2] concluded that the level of direct or indirect control is not deep and pervasive thus they cannot be considered as states, however still it can satisfy criteria of being a public authoritiy.

The hon’ble court scrutinize the Right to Information Act, which gives Right of access to information under the control of public authorities to citizens. The definition of “public authority” is provided under Section 2(h) of RTI Act.[3] The court found the outline of test required for the establishment of “control”. It found that “mere supervision or regulation as such by a statute or otherwise of a body would not make that body a public authority under the meaning of Section 2(h) (d) (i) of RTI Act.”Based on the following observation court engaged in defining the new word “substantially financed” and also established that financing can be direct or indirect. In addition to that court after referring to the case of Plaser v Grimling[4] Case court said that the term “substantially financed” should not be interpreted narrowly by adding that the financing must be “existing actual, positive and real” .The court also acknowledge that on many occasion the state may provide funds for various projects the provision could not be engaged if the body find it difficult to exist by help of that fund, therefore merely providing exemptions, grants and privileges doesn’t satisfy the requirement of the provision.

In case of NGO, although it is not covered under the ambit of statutory control then also it can be established that NGO is substantially financed directly or indirectly by the fund of Government. Thus, the NGO by virtue of being financed by the government would be brought under the definition of public authority. The court also declared that for getting the benefit of Right to access the information, the burden is on the applicant to prove that from the body he is seeking the information.

Lastly, the Cooperative Societies registered under Co-Operative Societies Act would not be considered as “public authority”, since it cannot be shown that they are “owned, controlled or substantially financed “by the government and also declared that the court keeping in mind the privacy rights concluded that if information is personal and does not relate to any public activity or interest, then the public authority or officer is not obliged to comply with request of applicant.

  • Amendment

Although the Supreme Court in the case Thalappalam Services Cooperative Bank Ltd. vs. State of Kerala stated that the RTI act was not applicable to cooperative societies. But the promulgation of 97th amendment reverted the conception of that time and led an institution of co-operative societies towards better future

The Constitution of India ‘s Article 19[5] has given right to freedom of speech and expression, to form associations or unions, to move freely throughout the territory of India ,to reside and settle in an part of the territory of India and to practice any profession or to carry on any occupation, trade and business and to assemble peacefully and without arms. As we are well aware of the fact that after 97th Amendment, forming a co-operative society has also been recognized as fundamental right and moreover forming the co-operative society is now also extended to fundamental duty under Article 43-B of Part IV which says that it is the duty of the states to promote autonomous functioning, democratic control, voluntary formation and professional management of the co-operatives to enhance the economic activities of India.

Also, Part IX given in Constitution of India has provision of self government which talk about panchayats. Now with the advent of Part IX C, the co-operative societies have got the status of local Self-Government. However, there is no clarity as such about the applicability of the RTI Act to the co-operative societies.

Several courts had given contradictory view on  on this matter but cooperative societies was earlier  considered out of the realm of the RTI Act because  it was not  recognised as  ‘authority’ or ‘body’ or an ‘institution’ of self-government established  under the Constitution. Therefore,  attempts of bringing the co-operative societies  under the RTI failed and also  authorities of these cooperative societies has  always took the stand of not coming under the realm of  RTI Act.

For example, In Maharashtra which is known for having for large number of cooperative societies where politics is also influenced by cooperative sector. There the scale of corruption, scam and illegalities in this sector is also very high. Irresponsibility in this sector is very high and also on the name of information that current statistics of cooperative societies are also not easily available.

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 five crores forty-two lakhs. Thus, one can imagine how this sector such as this was uncontrolled and unaccountable till the amendment came into existence..After the promulgation of 97th amendment one can hope that in future this sector will move in a positive direction. This is evident from the fact that large number of states is taking positive steps by amending their earlier provisions. Now there are various provisions came into effect imposing penalty imposing penalty for defaults, not ordering election within specified time, corruption, irregularity etc.[6]

It is pertinent to note that before 1992 panchayats and municipalities were not recognised bodies by the Constitution of India that did not mean that at that time  there were no panchayats or municipalities. These bodies were in existence. But due to the independent status their functioning was arbitrary. Thus  they did not acquire the reputation of being responsible entity because of absence of regular elections, prolonged suspension and insufficient representation of the weaker section etc. Therefore, to give  continuity certainty, and strength to panchayat raj Part IX was inserted in the Constitution. Also Urban Local Bodies were not able to perform effectively as vibrant democratic units of self-government but with the insertion of Part IX B municipality acquire new reputation of being a prominent democratic unit. Now with the 97th Amendment, Part IX B has been inserted to give cooperative societies a status of local self-government.[7]

As per RTI Act section 2 (h) “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 State Legislature;

(d) by notification issued or order made by the appropriate Government, and now as per section 2 (h) (a) of RTI act, Cooperative Societies have become an “authority” or “body” or “institution of self-government” established or constituted by or under the Constitution and hence are under the ambit of the RTI Act.

CONCLUSION

After the 97th amendment i.e. right to form co-operative societies and its including it in Article 19 of the Constitution, the practice of forming cooperative societies has become one of the fundamental rights of an Indian citizen. In addition to that they have also been  given the status of local self-government in the line of  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. But now also there is no surety that constitutional amendment will fully revive this institution. It as happened in the case of the 73rd amendment may be victim of the rival political faction. The dark shadow of state level politician will continue to remind us the memories of parochialism which was done in case of panchayat amendment. But the coming of Co-operative societies under RTI act in future will hopefully deter numerous loopholes and will push this institution in positive direction.


[1] Thalappalam Coop. vs State of Kerala

[2] Ajay Hasia v Khalid Mujib ,1981 AIR 487, 1981 SCR (2)      79

[3] Section 2(h) of 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 State Legislature;

(d) by notification issued or order made by the appropriate Government

[4] Palser v. Grimling. (1948) 1 All ER 1, 11 (HL)

[5] 19. Protection of certain rights regarding freedom of speech etc

(1) All citizens shall have the right

(a) to freedom of speech and expression;

(b) to assemble peaceably and without arms;

(c) to form associations or unions;

(d) to move freely throughout the territory of India;

(e) to reside and settle in any part of the territory of India; and

(f) omitted

(g) to practise any profession, or to carry on any occupation, trade or business

(2) Nothing in sub clause (a) of clause ( 1 ) shall affect the operation of any existing law, or prevent the State from making any law, in so far as such law imposes reasonable restrictions on the exercise of the right conferred by the said sub clause in the interests of the sovereignty and integrity of India, the security of the State, friendly relations with foreign States, public order, decency or morality or in relation to contempt of court, defamation or incitement to an offence

(3) Nothing in sub clause (b) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevent the State from making any law imposing, in the interests of the sovereignty and integrity of India or public order, reasonable restrictions on the exercise of the right conferred by the said sub clause

(4) Nothing in sub clause (c) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevent the State from making any law imposing, in the interests of the sovereignty and integrity of India or public order or morality, reasonable restrictions on the exercise of the right conferred by the said sub clause

(5) Nothing in sub clauses (d) and (e) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevent the State from making any law imposing, reasonable restrictions on the exercise of any of the rights conferred by the said sub clauses either in the interests of the general public or for the protection of the interests of any Scheduled Tribe

(6) Nothing in sub clause (g) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevent the State from making any law imposing, in the interests of the general public, reasonable restrictions on the exercise of the right conferred by the said sub clause, and, in particular, nothing in the said sub clause shall affect the operation of any existing law in so far as it relates to, or prevent the State from making any law relating to,

(i) the professional or technical qualifications necessary for practising any profession or carrying on any occupation, trade or business, or

(ii) the carrying on by the State, or by a corporation owned or controlled by the State, of any trade, business, industry or service, whether to the exclusion, complete or partial, of citizens or otherwise

[6] Co-operative societies under RTI,Money Life,available at http://www.moneylife.in/article/co-operative-societies-now-come-under-rti-act/32147.html,last seen on 27/02/17

[7] Supra 6

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