Part IXB Of Constitution Not Applicable To Local Co-operative Societies, Applies Only To Multi-State Societies & Societies In UTs : Supreme Court

members join as human beings and not as capitalists

"The basic principles of co-operation are that the members join as human beings and not as capitalists. The Co-operative Society is a form of organization wherein persons associate together as human beings on the basis of equality for promotion of economic interest of its members. This movement is a method of doing the business or other activities with ethical base. "Each for all and all for each" is the motto of the co-operative movement. This movement not only develops latent business capacities of its members but produces leaders; encourages economic and social virtues, honesty and loyalty, becomes imperative, prospects of better life, obtainable by concerted effort is opened up; the individual realises that there is something more to be sought than mere material gains for himself. So, in fact, it being a business cum moral movement, and the success of the Co-operative Society depends upon the reality with which one of the members work for the achievement of its objects and purpose."

Co-operative Movement is both a theory of life and a system of business.

The entire legislative scheme goes to show that the Co-operative Society is to function democratically and the internal democracy of a society, including resolutions passed in accordance with the Act, the Rules, and the bye-laws have to be respected and implemented. The Co-operative Movement is both a theory of life and a system of business. It is a form of voluntary association where individuals unite for mutual aid in the production and distribution of wealth upon principles of equity, reason and common good. It stands for distributive justice and asserts the principle of equality and equity ensuring to all those engaged in the production of wealth a share proportionately commensurate with the degree of their contribution. It provides as a substitute for material assets, honesty and a sense of moral obligation and keeps in view the moral rather than the material sanction. The movement is thus a great Co-operative movement

Member has no independent rights except those given to him by the statute and bye-laws.

Once a person becomes a member of the Co-operative Society, he loses his individuality with the Society and he has no independent rights except those given to him by the statute and bye-laws. The member has to speak through the Society or rather the Society alone can act and speaks for him qua the rights and duties of the Society as a body.

Case details

Bengal Secretariat Cooperative Land Mortgage Bank and Housing Society Ltd. vs Aloke Kumar | 2022 LiveLaw (SC) 849 | S.L.P. (Civil) No. 506 of 2020 | 13 October 2022 | CJI UU Lalit, Justices S. Ravindra Bhat and JB Pardiwala

Counsel: Adv Joydeep Mazumdar for appellant, Adv Soumo Palit for respondent

Headnotes

Co-operative Societies - West Bengal Co-operative Societies Act, 1940 - It is not open to the Court to sit over the commercial wisdom of the General Body as an Appellate Authority. Merely because one single member in minority disapproves of the decision, that cannot be the basis to negate the decision of the General Body, unless it is shown that the decision was the product of fraud or misrepresentation or was opposed to some statutory prohibition -Co-operative Society is to function democratically and the internal democracy of a society, including resolutions passed in accordance with the Act, the Rules, and the bye-laws have to be respected and implemented. (Para 54)

Co-operative Societies - Once a person becomes a member of the Co-operative Society, he loses his individuality with the Society and he has no independent rights except those given to him by the statute and bye-laws. The member has to speak through the Society or rather the Society alone can act and speaks for him qua the rights and duties of the Society as a body. (Para 53)

Constitution of India, 1950 - Part IXB inserted by the Constitution (97th Amendment) Act, 2011 would not be applicable to the local co-operative societies, whereas the same would be applicable to the multi-State co-operative societies and the societies within the Union territories. (Para 45A-45C)