1. Background:
The Constitution (106th Amendment) Bill proposed to to insert anew part IX
B in the Constitution and adding Articles 243ZH through 243ZT providing for
incorporation, regulation and winding up of co-operative societies.
1. The bill specified maximum number of Board members and the tenure of the
members.
2. The bill also specified for elections to be held before the expiry of the term of
the Board.
3. The bill specified that the Board of a co-operative society that has
government shareholding or loans can be superseded for the maximum period of six
months.
4. State governments can co-opt upto two nominees on the Board of a co-
operative society.
5. The Bill specified certain offences related to co-operative societies. State
legislatures can define the penalties related to co-operative societies.
Note: Government of India had constituted a high powered committee in 2005
in the chairmanship of Shri Shivajirao G. Patil to review the achievements of
the cooperatives during the last one hundred years, identify the challenges faced
by the sector and suggest measures to address them to enable the movement to
keep pace with the changing socio-economic environment. The committee was
also asked to recommend appropriate lagislation for the Co-operatives.
The committee reviewed the Constitution Amendment Bill (106th Amendment
Bill 2006) and recommended some more changes including that introducing new
part IXB after part IXA along with the Panchayati Raj Institutions (PRI) and
Municipalities would imply that cooperatives are a part of governance. The
committee recommended at any other place in the constitution. Committee also
suggested that no supersession of the Board of Directors should be allowed in
any case where government share holding is less than 51%..
In August 2008 Union Cabinet gave approval for moving certain official
amendments in the Constitution (One Hundred and Sixth Amendment) Bill,
2006. This decision included benefits like empowerment of cooperatives
by inserting article 43B in Part-IV of the Constitution providing for
1. Voluntary formation, autonomous functioning, democratic control and
professional management.

2. 2. Audit by independent auditors or Auditing firms out of the panel approved by
State Government or an authority authorized by the Government in this behalf.
3. Free and fair elections to be conducted by an independent body.
4. Directors in the Cooperative Societies will also include two women and one
Scheduled Caste representatives.