Constitution Section 243ZL — Supersession and suspension of board and interim management
Part IXB — THE CO-OPERATIVE SOCIETIES
Constitutional
Summary
A board of a co-operative society cannot be removed or suspended for more than six months. However, it can be removed or suspended if it repeatedly fails in its duties, is negligent, acts against the interests of the society or its members, or if there is a deadlock in the board’s formation or work. It can also be removed or suspended if the state authority fails to hold elections as required by law. A board cannot be removed or suspended if the government has no shareholding, loan, financial help, or guarantee in the society. For banking co-operative societies, the Banking Regulation Act also applies, and for state-level banking co-operative societies, the maximum suspension period is one year instead of six months.
If a board is removed, the appointed administrator must arrange elections within the allowed time and hand over management to the elected board. State legislatures can make laws about the administrator’s service conditions.
Official Text
(1) Notwithstanding anything contained in any law for the time being in force, no board shall be superseded or kept under suspension for a period exceeding six months:
Provided that the board may be superseded or kept under suspension in a case—
(i) of its persistent default; or
(ii) of negligence in the performance of its duties; or
(iii) the board has committed any act prejudicial to the interests of the co-operative society or its members; or
(iv) there is stalemate in the constitution or functions of the board; or
(v) the authority or body as provided by the Legislature of a State, by law, under clause (2) of article 243ZK, has failed to conduct elections in accordance with the provisions of the State Act:Provided further that the board of any such co-operative society shall not be superseded or kept under suspension where there is no Government shareholding or loan or financial assistance or any guarantee by the Government:
Provided also that in case of a co-operative society carrying on the business of banking, the provisions of the Banking Regulation Act, 1949(10 of 1949) shall also apply:
Provided also that in case of a co-operative society, other than a multi-State co-operative society, carrying on 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 substituted.
(2) In case of supersession of a board, the administrator appointed to manage the affairs of such co-operative society shall arrange for conduct of elections within the period specified in clause (1) and handover the management to the elected board.
(3) The Legislature of a State may, by law, make provisions for the conditions of service of the administrator.