'Govt Not Expected To Intervene In Administration Of Co-op Societies': Plea In Kerala HC Challenges Provisions Of Kerala Co-operative Society Amendment Act 2023

The plea has been filed challenging sections 14AA, 28(2A), 32 (4), 33, 34A, 56, 57E and 64 alleging that the amendments would cause governmental interference in the day-to-day working of the co-operative societies. It is alleged that there is no rational nexus to be achieved through the amendments and is arbitrary and violative of Article 14 of the Constitution.

Justice Devan Ramachandran admitted the matter and posted it for hearing on June 25, 2024.

It is stated that governmental interference in day to day working of co-operative institutions would affect their autonomy and internal democracy. The plea stated that the Constitutional (Ninety-Seventh) Amendment Act, 2011 by inserting 'Part IX B- The Co-operative Societies' was introduced in the Constitution to strengthen their autonomy and contribution to the State. The plea provides that Article 43 B of the Constitution guarantees that the State shall promote the functioning and autonomy of cooperative societies.

“The principles of autonomy allows these societies to make decisions democratically and manage their affairs in a manner that reflects the independence enjoyed by co-operative societies. In the light of the above, a perusal of the KCS Amendment Act 2023 as explained earlier would show that there has been an attempt to convert cooperative societies into a government department, which is opposed to cooperative principles, as the government is not expected to intervene into the administration of a cooperative society”, stated the plea.

The plea alleges that as per Section 28 (2A) of the KCS Amendment Act, no member of the credit society shall be eligible for election to the committee for more than three consecutive terms which is a restriction placed on a member to be elected as a member of a committee of credit society. It is alleged that such unreasonable restrictions are against the right of the members to contest in elections which are integral for the functioning of a cooperative society.

Further, the plea alleges that Section 34A mandates for installation, maintenance and use of a common software for all cooperative societies. It is stated that this is a direct intervention into the working of cooperative societies since they have already spent huge amounts of money to develop their own software. It is alleged that common software is another source for the corruption of public money by looting the deposits made by ordinary persons.

It is further alleged that the amendments in Section 56 would result in misuse of funds of the societies by compelling the societies to invest in a Professional Education Fund over which the members of the society have no say. It is also alleged that the insertion of the Co-operative Revival Fund Scheme by Section 57E is also contrary to the scheme of the co-operative society since the Government is not entitled to interfere with the functioning of the society by the formulation of a scheme. The plea argued that the intervention of government in the functioning of Co-operative society would affect their independent functioning.

The plea alleges that amendment to Section 64 a direct intervention into the secrecy of funds maintained by the co-operative society in the name of auditing would result in leakage of information and affect the working of the co-operative society.

The plea alleges that the amendments are incompatible and inconsistent with the cooperative principles such as democratic member control, autonomy and independence in manner of functioning. Thus the plea seeks to strike down the amendments as unconstitutional.

The plea has been moved by Senior Advocate George Poonthottam, Advocates Nisha George, A.L.Navaneeth Krishnan, Kavya Varma M. M., Anshin K.K And Fathima Amreen Jamal

Case Title: Babu K Korah & Another v State of Kerala & Others

Case Number: WPC 21368/2024