Unified Andhra Pradesh Co-operative Societies Act, 2010
Statement of objects and Reasons:
The Constitution Amendment Bill 111 of 2009 envisages that ‘the State shall endeavour
to promote voluntary formation, autonomous functioning, democratic control and
professional management of Co-operative Societies, based on cc-operative principles.’
Amendment proposed to Article 19(1) is that co-operatives are associations and any
restriction on them have to be within the framework of Article 19(4) and also to have a
definition of co-operatives in the Constitution that will indicate that they are promoted,
owned, controlled and managed by their member-users. The Bill also has suggested
certain amendments to be adopted by State Legislatures in respect of their
Co-operative Laws and has clarified that any provision in the State Co-operative Law in
force in a State immediately before the commencement of the Constitution (One
Hundred Eleventh amendment) Act, 2009 which is inconsistent with the provisions in
the Bill shall continue in force until amended or repealed by the Legislature or until the
expiration of one year from such commencement whichever is less.
The Andhra Pradesh Government enacted Andhra Pradesh State Co-operative Societies
Act in 1964 and Rules thereon, which contained restrictive provisions pursuant to State
partnership in Co-operative Societies with Rule making power to the State Government.
The A.P. Mutually Aided Co-operative Societies Act, 1995 which was enacted on the
lines of Model Act of Chowdary Brahm Perkash Committee enshrined co-operative
principles in it. Co-operative are perceived as member-centric and member-controlled
democratic organizations, the role of Registrar of Co-operative Societies being
restricted mostly to incorporation and liquidation. Rule making powers of the
Government were removed.
Following the accepted recommendations of Vydyanathan Committee set up by
Government of India and as agreed to in the Memorandum of Agreement that the State
Government entered into with NABARD, A.P. State Co-operative Societies Act was
amended to provide for restricted role of the State Government in the Co-operative
Credit Societies that include APCOB, DCCBs and PACSs and grant of autonomy to them
in internal matters and to function as economic entities.
In the liberalization era, the Co-operative Societies are expected to function on cooperative principles and co-operative identity and values within the framework of a
single Co-operative Societies Act reflecting the letter and spirit of the Model Act
enabling co-operatives to function as autonomous democratically governed and
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professionally managed institutions and facilitating enhancement of their
competitiveness, financial sustainability. The Government of India therefore desired
that a single enabling law which is based on co-operative principles be put in place.
In this context, the Government of Andhra Pradesh has set up a Committee under the
Chairmanship of Sri M. Vasantha Madhava Rao, Additional Registrar (Retd.) and Dr. B.
Yerram Raju and Additional Registrar (Legal) as members in G.O.Ms.No.251, dated
09-09-2010 for formulating a single Unified Progressive Legislation in the place of the
existing two parallel Acts i.e., A.P. Co-operative Societies Act, 1964 and A.P. Mutually
Aided Co-operative Societies Act, 1995 in the State.
The above Committee keeping in view the letter and spirit of the recommendation of
the High Power Committee headed by S.G. Patil and of those recommendations
accepted by the Government of India and communicated in their letter No.L-110011/4/
2004-L&M, dated 10th May, 2010 and also the draft amendments approved by the
Union cabinet to the Multi-State Co-operative Societies Act, 2002 which came in the
Press, drafted the Unified Andhra Pradesh Co-operative Societies Act, 2010
with the following important features:
1. Co-operative are envisaged to be apolitical, competitive business enterprises
following the co-operative principles adopted by the International
Co-operative Alliance and practicing, thrift, self-help and mutual aid and
managed and controlled by members of common economic need for their
economic and social betterment.
2. State Policy on co-operative has been outlined.
3. Protection to the legitimate actions of the existing Co-operative Societies
under two parallel laws in the State is incorporated.
4. “Active Member” has been defined to ensure the member’s active
participation in the affairs of the Co-operative Society. Time bound decision
by the Co-operative Society for admitting members is proposed to prevent
delay in the admission of members in co-operative societies. Admission of
members is to be done by the elected Board. In the case of superseded
societies administrator may admit new members.
5. A clause is proposed for ensuring that the members make their payment due
to the Co-operative Society to be eligible for exercising their rights as a
member.
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6. It is proposed to allow Co-operative Societies to refund full or part of the
share capital subscribed by the Government to reduce/eliminate Government
control of these Co-operative Societies.
7. Political personalities to the extent they are active members would be entitled
to be on the Board, if chosen.
8. To ensure presence of experts on the Board, it is proposed to provide that
co-opted Directors should have experience in the field of Banking,
Management, Finance or specialization in any field relating to the objects and
activities undertaken by the Co-operative Societies.
9. The Directors are required to disclose their’s as well as the interest of their
relatives in the affairs of the Co-operative Society.
10. Freedom is proposed to the Board to constitute an Executive Committee and
other sub-committees. Every Co-operative Society is required to constitute
an Audit and Ethics Committee.
11. Government is empowered to appoint an independent Election Authority.
12. It is proposed that the Registrar shall be empowered to remove a Chief
Executive or professional Director not fulfilling the fit and proper criteria.
13. Period of supersession of Banking institutions with prior permission of
Reserve Bank of India is kept for one year while that of others is set at six
months.
14. Provision for suo-motto inquiry recording reasons is incorporated.
15. The proposed legislation also includes provisions for filing of applications,
documents, inspections, payment of fees, charges and issuance of certificates
of registration and maintenance of documents by the Registrar in electronic
forms. It also provides for cancellation of registration if obtained by misrepresentations of facts, submission of false or misleading information,
suppression of material facts or fraud etc.
16. Constitution of Co-operative Tribunals to hear appeal is envisaged.
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17. Constitution of Co-operative Rehabilitation and Re-construction Fund for the
development of Co-operative Societies, by apex organization is proposed.
18. Board is empowered to designate a Co-operative Information Officer and
also an Appellate Authority from among its senior staff members to provide
information to the members about the affairs and management of the Cooperative Society.
19. Non-admission of new members by the administrators when the Board is
under supersession is made an offence.
20. Co-operative Societies are obliged to provide its products and services where
available, to eligible members.
21. Enabling provisions for Co-operative Banks, Co-operative Credit Societies
under the revival package, Co-operative Housing Societies, Agricultural Credit
Societies accepting public deposits are included in separate chapters.
All the chapters have been arranged as far as possible on the lines of the
Chowdary Brahm Perkash Committee’s Model Act.
There would be no rule making power to the Government as per this Unified
Andhra Pradesh State Co-operative Societies Act.
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