The Supreme Court struck down certain provisions of the Constitution (97th Amendment) Act, 2011 in so far as it introduced clauses dealing with the working of cooperative societies working within a state.
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Recognising that ‘cooperative societies’ came under Entry 32 of the State List in the Seventh Schedule, the Amendment proposed to create a framework for the functioning of cooperative societies.
It introduced Part IXB in the Constitution so that the concept of cooperative societies gains constitutional recognition.
The idea was to empower Parliament to frame laws for cooperative societies that function across States (multi-State cooperative societies) and State legislatures to make laws for all other cooperative societies falling under their jurisdiction.
The Amendment set out basic rules such as
- a maximum of 21 directors in a society,
- a fixed term of five years for elected members,
- a six-month cap on the time limit for which a society’s board of directors can be kept under supersession or suspension, and
- reservation of one seat for the Scheduled Castes or the Scheduled Tribes, and two seats for women on the board of every cooperative society, that is, every society that has members from these sections.
