Amendment Act 9 of 2024's Section 28(2A) restricting election terms in Co-operative Societies is unconstitutional, violating democratic principles and Article 14, while other amendments are upheld for regulatory purposes.

J U D G M E N T

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The State Legislature enacted the Kerala Co-operative Societies (Amendment) Act, 2023 (Act 9 of 2024) in order to amend the Kerala Co-operative Societies Act, 1969 . The amendments brought about by the Act 9 of 2024 touched various aspects of co-operative institutions including share capital contributions, financial status, partnership of Co-operative Societies, reservation of seats and eligibility for election to the Managing Committee, appointment of Administrative Committee, maintenance of accounts, adoption of common accounting software, constitution of a Co-operative Revival Fund Scheme, sanction of loans and advances, valuation of property, purchase of movable and immovable properties by the Societies, power of Government or Registrar to deal with irregularities and a number of other aspects which are important in the administration and governance of Co- operative Societies in Kerala. The petitioners are aggrieved by certain amendments thus effected as per the Act 9 of 2024.

2. The petitioners in these writ petitions are mostly office bearers of Managing Committees of various Co- operative Societies and members of such Societies.

3. The petitioners state that governmental interference in the day-to-day working of the Co-operative Societies is not desirable as Co-operative Societies are essentially associations of persons, though regulated by statutory provisions. The administration of a Co-operative Society is controlled by elected members of the Board of the Society. By 97th Amendment Act, 2011 Part IXB was inserted in the Constitution of India. The said amendment was intended to strengthen the co-operative sector across India. The Constitutional amendment was intended to ensure democratic functioning and autonomy of the Co-operative Societies.

4. The petitioners allege that by the Amendment Act 9 of 2024, the State is making an attempt to grab the control of the Co-operative Societies. The provisions contained in the Act 9 of 2024 demonstrate the savage thirst of the State for power, to control and dominate Co-operative Societies. Co-operative institutions are basic fundamental institutions where grassroot level democratic concepts are practised. By amending the Kerala Co-operative Societies Act, 1969 as per Act 9 of 2024, the State is undermining the co-operative principles and democratic governance of the Co-operative institutions in Kerala.

5. Referring to the newly enacted Section 14AA , which directs that the share capital contribution or financial assistance to a subsidiary institution shall be met only from the balance net profit of the Society, the petitioners point out that by Section 14AA , an endeavour is made by the Government to control the administration of the Society, which goes against the very concept of autonomy of Co-operative Societies.

6. The addition of sub-section (2A) to Section 28 mandates that no member of the Committee of a Society shall be eligible for election to the Committee for more than three consecutive terms, irrespective of whether the term is in full or in part. The petitioners would argue that such restraint is highly arbitrary and unconstitutional as election to the Managing Committee of a Society is an expression of the will of the Members. Restriction on a Member to be elected as a Member of the Managing Committee, is highly unreasonable and discriminatory.

7. The petitioners in all these writ petitions are in unison in challenging Section 28 (2A). The petitioners point out that in a democratic election, candidates are elected based on acceptance by voters. Preventing members from contesting elections for more than three consecutive terms would amount to intrusive interference in the democratic functioning of the Co-operatives.

8. The petitioners pointed out that the said restraint in contesting in elections are confined to the Credit Societies as defined in the Explanation provided under sub-section (2A). There is no such restraint as far as o