Kerala Cooperative Society Comprehensive Amendment Bill receives assembly approval

The Kerala Cooperative Society Comprehensive Amendment Bill has received unanimous approval from the Kerala Legislative Assembly, marking a new direction for the cooperative sector in Kerala through a comprehensive change aimed at eliminating irregularities. This significant amendment comes after 50 years, modifying the Kerala Co-operative Act of 1969. On 12.12.2022, Cooperative Minister. V.N Vasavan presented the Amendment Bill to the Assembly for the Select Committee’s recommendations. The Committee conducted sittings in all 14 districts of Kerala, collecting feedback from cooperators, the general public, cooperative employees, representatives of cooperative apex institutions, organisational representatives in the cooperative sector, legal experts, and others. It also reviewed cooperative laws of other states, and directly studied the cooperative law and operations in the Maharashtra state. The amendment laws incorporated the suggestions provided by the Select Committee and received approval from the Legislative Assembly. The Cooperative Minister, also serving as the chairman along with 5 MLAs from the opposition parties included in the 15-member Select Committee, conducted over 15 sittings, and discussed each provision in the amendment bill in detail to shape its final form. In the existing scenario, some individuals have continued as office bearers in cooperative societies for extended periods. While their services significantly contributed to many societies’ growth, recent discoveries of some irregularities, particularly in societies with long-term office bearers, necessitated a change.

Consequently, a differentiation provision was introduced stipulating that no individual can continue as a governing body member consecutively for more than two terms in any cooperative society. The need for a united stance amongst cooperatives and the general public in Kerala transcending caste and political differences, became crucial. In light of this, discussions among the Chief Minister, the Opposition Leader, and the Minister for Cooperation led to a decision to change the two-term system to a threeterm system for credit societies. The Kerala Legislative Assembly unanimously accepted this decision based on the foundational principle of cooperative differentiation rule. The Amendment Act incorporates 56 provisions to the existing Co-operative Act, encompassing amendments and additions. Notable provisions include three terms for governing body members in credit societies, updated definitions of primary credit societies, other credit societies, and primary societies, establishment of youth cooperatives, formation of social cooperatives for differently-abled individuals and transgender persons, administrative audit, common software for societies, computerisation of societies, accounting and audit, Team Audit, and more.

Transparency in cooperative societies’ appointments is enhanced, with organizations like Vanitafed, Labourfed, Tourfed, and Hospitalfed now under the PSC’s purview for appointments. Previously, recruitment for positions above Junior Clerk in Credit societies was handlead by the Cooperative Examination Board. Under the new provisions, this Board will oversee appointments for all societies above Junior Clerk. The amendment also increases the reservation for differently-abled persons in appointments from three to four percent. The existing general reservation for OBC categories through PSC recruitment to cooperative sector institutions remains, with the Co-operation Minister assuring the Assembly of a committee appointment to study the Act’s application to primary Societies. Democracy in the cooperative sector is further strengthened by ensuring that members of the Administrative Committee replacing the Governing Body should be members of the respective society. The registration process timeline for cooperative societies has been reduced from 90 to 60 days, offering clearer provisions for valuation of collateral for loans against property by cooperative societies, and for purchase and sale of property for cooperative societies’ purposes.

Youth representation is encouraged with reservations made for one woman and one other person below the age of 40 years in governing bodies. The Act incorporates strict provisions for detecting irregularities, reporting criminal offenses directly to the police, notifying the AntiCorruption Department of any such offense, reducing the time limit for disposal of investigations, and providing for liability. Provisions have been made for prompt resolution of cooperative arbitration proceedings, and appointment of Judicial Service officers as presiding officers in cooperative arbitration courts. Subsidiaries are not to be started under other legal regimes under societies; stringent conditions are set for providing financial aid to existing subsidiaries, presenting the accounts of subsidiaries in the general body meeting of the societies, and making cooperative audits mandatory for the subsidiaries. A provision has been included requiring that the liability of the members of the management committee of the society, employees, and their family members be presented in the society’s general body meeting. Amendment to Section 3 of the Kerala Cooperative Society Comprehensive Amendment Bill stipulates that instead of appointing any individual as the Registrar, an official from the Indian Administrative Service can only now be appointed, marking a noteworthy alteration. Furthermore, Amendment to Section 16 has established the age limit for obtaining membership with voting right in youth societies at 45 years, with a provision made for transitioning said members to nominal/associate membership status upon reaching this age threshold.

In a move towards enhancing the electoral process within the cooperative sector, Amendment to Section 28 (b) mandates that the election of the governing body for both the State Cooperative Union and the Circle Cooperative Union will now be conducted under the auspices of the State Cooperative Election Commission. Another significant change comes with the Amendment to Section 66, where a provision has been crafted for the establishment of a special inspection team to conduct inspections within Apex, Central, and Federal Societies. These some of the prominent amendments in the Comprehensive amendment Bill. These amendments signify a milestone in augmenting transparency, accountability, and inclusivity in Kerala’s cooperative sector, receiving unanimous approval from the Kerala Legislative Assembly. Through meticulously crafted amendments, the Bill not only addresses longstanding irregularities but also modernises the cooperative framework, showcasing a collaborative legislative endeavour to align the sector with contemporary needs and standards, thus reflecting a progressive stride in Kerala’s legislative narrative.