 bill no 48 of 2006 the constitution (one hundred and sixth amendment) bill, 2006further to amend the constitution of indiabe it enacted by parliament in the fifty-seventh year of the republic of india as follows:—2 after part ixa of the constitution, the following part shall be inserted, namely:—insertion of part ixb 'part ixb the co-operative societiesdefinitions243zh in this part, unless the context otherwise requires,—5(a) "authorised person" means a  person referred to as such  in  article243zq;(b) "board" means the board of directors or the governing body of a cooperative society, by whatever name called, to which the direction and control of the management of the affairs of a society is entrusted to;10(c) "co-operative society" means a society registered or deemed to beregistered under any law relating to co-operative societies for the time being in force in any state;15(d) "multi-state co-operative society" means a society with objects notconfined to one state and registered or deemed to be registered under any law for the time being in force relating to such co-operatives;(e) "office bearer" means a president, vice-president, chairperson, vice-chairperson, secretary or treasurer of a co-operative society and includes any other person to be elected by the board of any co-operative society;20(f) "registrar" means the central registrar appointed by the centralgovernment in relation to the multi-state co-operative societies and the registrar for co-operative societies appointed by the state government under the law made by the legislature of a state in relation to co-operative societies;(g) "state act" means any law made by the legislature of a state;25(h) "state level co-operative society" means a co-operative society havingits area of operation extending to the whole of a state and defined as such in any law made by the legislature of a stateincorporation of co-operative societies243zi subject to the provisions of this part, the legislature of a state may, bylaw, make provisions with respect to the incorporation, regulation and winding up ofco-operative societies based on the principles of voluntary, democratic member- control, member-economic participation and autonomous functioning30243zj (1) the board shall consist of such number of directors as may be provided by the legislature of a state, by law:number and term of members of board and its office bearersprovided that the maximum number of directors of a co-operative society shallnot exceed twenty-one, except in the case of a state level co-operative society35(2) the term of office of elected members of the board and its office bearers shallbe five years from the date of election and the term of office bearers shall be coterminus with the term of the board:40provided that the board may fill a casual vacancy on the board by nominationout of the same class of members in respect of which the casual vacancy has arisen, if the term of office of the board is less than half of its original term45(3) the legislature of a state shall, by law, make provisions for co-option ofpersons to be members of the board having experience in the field of banking, management, finance or specialisation in any other field relating to the objects and activities undertaken by the co-operative society as members of the board of such society:provided that the number of such co-opted members shall not exceed two in addition to twenty-one directors specified in the proviso to clause (1):5provided further that such co-opted members shall not have the right to vote in any election of the co-operative society in their capacity as such member or to be eligible to be elected as vice-chairman or vice-president, chairman or president of the boardelection of members of board10243zk (1) notwithstanding anything contained in any law made by the legislature of a state, the election of a board shall be conducted before the expiry of the term of the board so as to ensure that the newly elected board assumes office immediately on the expiry of the term of the outgoing board:provided that in case the co-operative society has failed to conduct such elections in time the registrar or an authority or officer authorised by the registrar shall cause the elections to be conducted within a period of sixty days after the expiry of the term of the outgoing board at the cost of the co-operative society15(2) the superintendence, direction and control of the preparation of electoralrolls for, and the conduct of, all elections to a co-operative society shall vest in the general body of the co-operative society:provided that the legislature of a state may, by law, provide for the procedure and guidelines for the conduct of such elections20243zl (1) notwithstanding anything contained in any law for the time being in force, no board shall be superseded or kept under suspension for a period exceeding six months:supersession of board and interim managementprovided that the board may be superseded in case –(i) of its persistent default; or25(ii) of negligence in the performance of  its duties; or (iii)  the board has committed any act prejudicial to the interests of  the cooperative society or its members; or(iv) there is a stalemate in the  constitution or functions of the board; or30(v) the general body has failed to conduct the elections as per the provisionsof  article 243zk:provided further that the board of any such co-operative society shall not be superseded where there is no government shareholding of loan or financial assistance or any guarantee by the government:10 of 194935provided also that in case of a co-operative society doing the business of banking, the provisions of the banking regulation act, 1949 shall also apply:provided also that in case of a co-operative society, other than a multi-state cooperative society, doing the business of banking, the provisions of this clause shall have the effect as if for the words "six months", the words "one year" had been substituted40(2) in case of supersession of a board, the administrator appointed to managethe affairs of such co-operative society shall arrange for conduct of elections within the period specified in clause (1) and hand over the management to the elected board(3) the legislature of a state may, by law, make provisions for the conditions of service of the administrator243zm (1) the legislature of a state may, by law, make provisions with respect to the maintenance of accounts by the co-operative societies and the auditing of such accounts at least once in each financial yearaudit of accounts of co-operative societies5(2) the legislature of a state shall, by law, lay down the minimum qualifications and experience of auditors and auditing firms that shall be eligible for auditing the cooperative societies(3) every co-operative society shall cause to be audited by an auditor referred to in clause (2) appointed by the general body of the co-operative society10(4) the accounts of every co-operative society shall be audited before the expiry of a period of six months of the financial year to which such accounts relateconvening ofthe generalbody meetings243zn the legislature of a state may, by law, make provisions that the annual general body meeting of every co-operative society shall be convened within a period of six months of close of the financial year to transact the business as may be provided in such law15right of a member to get information243zo (1) the legislature of a state may, by law, provide for access to every member of a co-operative society to the books, information and accounts of the cooperative society kept in regular transaction of its business with such member20(2) the legislature of a state may, by law, make provisions to ensure the participation of members in the management of the co-operative society providing minimum requirement of attending meetings by the members and utilising the minimum level of services as may be provided in such law(3) the legislature of a state may, by law, provide for co-operative education and training for its membersreturns25243zp every co-operative society shall file returns, within six months of theclose of every financial year, to the authority designated by the state government amongst others, the following, namely:–(a) annual report of its activities; (b) its audited statement of accounts;30(c) plan for surplus disposal as approved by the general body of the cooperative society;(d) list of amendments to the bye-laws of the co-operative society; if any; (e) declaration regarding date of holding of its general body meeting andconduct of elections when due; and35(f) any other information required by the registrar in pursuance of any ofthe provisions of the state actoffences and penalties243zq (1) the legislature of a state may, by law, make provisions for definingthe offences relating to co-operative societies and penalties for such offences(2) a law made by the legislature of a state under clause (1) shall include the commission of the following act or omission as offences, namely: –40(a) a co-operative society or an officer or member thereof wilfully makinga false return or furnishing false information, or wilfully not furnishing any information required from him by a person authorised in this behalf;45(b) any person wilfully or without any reasonable excuse disobeys anysummons, requisition or lawful written order issued under the provisions of the state act;(c) any employer who, without sufficient cause, fails to pay to a cooperative society amount deducted by him from its employee within a period of fourteen days from the date on which such deduction is made;5(d) any officer or custodian who wilfully fails to hand over custody ofbooks, accounts, documents, records, cash, security and other property belonging to a co-operative society of which he is an officer or custodian, to an authorised person; and(e) whoever, before, during or after the election of members of the board oroffice bearers, adopts any corrupt practice10application to multi-state co-operativesocieties243zr the provisions of this part shall apply to the multi-state co-operative societies subject to the modification that any reference to "legislature of a state",  "state act" or "state government" shall be construed as a reference to "parliament",  "central act" or "the central government" respectively15application to union territories243zs the provisions of this part shall apply to the union territories and shall, in their application to a union territory, having no legislative assembly as if the references to the legislature of a state were a reference to the administrator thereof appointed under article 239 and, in relation to a union territory having a legislative assembly, to that legislative assembly:20provided that the president may, by public notification, direct that the provisions of this part shall not apply to any union territory or part thereof as he may specify in the notificationcontinuance of existing laws25243zt notwithstanding anything in this part, any provision of any law relating to cooperative societies in force in a state immediately before the commencement of the constitution (one hundred and sixth amendment) act, 2006, which is inconsistent with the provisions of this part, shall continue to be in force until amended or repealed by a competent legislature or other competent authority or until the expiration of one year from such commencement, whichever is less' statement of objects and reasonsthe co-operative sector, in spite of its voluminous growth and its contribution to various sectors of national economy, have left much to be desired from the point of view of safeguarding the interests of the members and fulfilment of objects for which these institutions were organised  elections are often postponed indefinitely and nominated office bearers or administrators take over, thereby reducing the accountability of the management of cooperative societies to their members  unprofessional management has led to poor services and low productivity  therefore, there is a need to initiate fundamental reforms to revitalise these institutions in order to ensure their contribution in the economic development of the country and to serve the interests of members and public at large and also to ensure their autonomy, democratic functioning and professional management2 the "co-operative societies" is a subject enumerated in entry 32 of the state list of the seventh schedule of the constitution and the state legislatures have accordingly enacted legislations on co-operative societies   within the framework of state acts, growth of cooperatives on large-scale was envisaged as part of the efforts for securing social and economic justice and equitable distribution of the fruits of development  it has, however, been experienced that in spite of considerable expansion of co-operatives, their performance in qualitative terms has not been up to the desired level viewing the need for reforms in the cooperative societies acts of the states, consultations with the state governments have been held at several fora and in the conferences of state co-operative ministers   one view that has emerged is for amending the constitution so as to keep the co-operatives free from unnecessary outside interferences and also to ensure their autonomous organisational set up and their democratic functioning3 the central government is committed to ensure that the co-operative societies in the country are functioning in a democratic, professional, autonomous and economically sound manner  with a view to bring the necessary reforms, it is proposed to incorporate a new part in the constitution so as to provide for certain provisions covering the vital aspects of working of co-operative societies like democratic, autonomous and professional functioning  the proposed new part in the constitution, inter alia, seeks to empower the parliament in respect of multi-state co-operative societies and the state legislatures in case of other co-operative societies to make appropriate law laying down the following matters, namely:—(a) provisions for incorporation, regulation and winding up of co-operative societies based on the principles of  democratic member-control, member-economic participation and autonomous functioning;(b) specifying the maximum number of  directors of  a co-operative society to be not exceeding twenty-one members;(c) providing for a fixed term of  five years from the date of election in respect of the elected members of the board and its office bearers;(d) providing for a maximum time limit of six months   during which a board of directors of a co-operative society could be kept under suspension;(e) providing for independent professional audit; (f) providing for right of  information access to the members of the co-operative societies;(g) empowering  the state governments  to obtain periodic reports of activities and accounts of co-operative societies;(h) providing  for offences relating to co-operative societies and penalties in respect  of such offences 4 it is expected that these provisions will not only ensure the autonomous and democratic functioning of co-operatives, but also ensure the accountability of management to the members and other stakeholders and also to provide for deterrence for violation of the provisions of the law5 the bill seeks to achieve the above objectssharad pawarnew delhi;15th may, 2006 lok sabha——————————abillfurther to amend the constitution of india—————(shri sharad pawar, minister of agriculture and  consumer affairs, food and public distribution) corrigendum to the  constitution (one hundred and sixth amendment) bill, 2006[to be/as introduced in lok sabha]  1             page 1, after the title, -          insert           "a                              bill"           new delhi;  may 19, 2006_________ vaisakha 29, 1928 (saka) 