Cooperative society, but not working? Maharashtra govt drive to soon weed them out

Action will be taken against cooperative credit societies or money lender societies, excluding housing societies, which have failed to adhere to the rules, as per the circular. Representation pic

A special scrutiny drive will soon start on all registered cooperative societies, with the exception of housing societies, to see if they are functioning properly, as per a circular issued by the commissioner of Cooperation on August 1. Experts have welcomed the month-long drive, which will start from August 15, saying that this will help weed out defunct cooperative societies and bring transparency and good governance in the sector.

A total of 1,98,786 cooperative societies, including housing societies, are registered in Maharashtra and these societies must function in accordance with the provisions of the Maharashtra Cooperative Societies Act, 1960 and the Maharashtra Cooperative Societies Rules, 1961.

"Cooperative societies must function for the fulfilment of the objectives for which it is registered. But in some cases, it is not seen that the work of the organisation is being done as per the purpose. Therefore, as some of the registered organisations have stopped their operations, the existence of such organisations is seen to be only on paper," read the circular signed by Cooperative Commissioner Anil Kawade.

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It further read, "It is also seen that such an organisation is not completing its statutory audit as per the provisions of the Cooperative Act and as the organisation is not at its address, it is seen that the audit office is not available." It went on to state, "In respect of cooperative societies that cannot be found at their registered address or which have no location, further appropriate legal action should be taken only by publishing information through necessary press notes (in the form of news) and confirming that those societies are closed."

"Deregistration of only existing/closed/suspended institutions by decommissioning and reducing their number will help to focus on qualitative growth of functioning institutions. It will also help the government in making decisions on strategic matters to provide updated and accurate information about the institutions," the circular stated.

As per Section 102 (C) of the Maharashtra Cooperative Societies Act, in the case of a society which (i) has not commenced working, or (ii) has ceased working, or (iii) possesses shares or members' deposits not exceeding Rs 500, or (iv) has ceased to comply with any conditions as to registration and management in this Act or the rules or the bye-laws, if the registrar is of the opinion that the society ought to be wound up, he may issue an interim order directing it to be wound up.

The circular further stated that consultation is required with the divisional joint registrar of the department concerned before taking action against institutions which have government financial assistance. If any society is found suspended, closed or unable to function, proceedings for its liquidation can start immediately after its survey and there is no need for the entire survey campaign to end.

Advocate Vinod Sampat, president of Cooperative Societies Resident Users Association, said, "It is a welcome move. It will eliminate defunct cooperative societies that exist on paper. The cooperative department should have a mechanism to periodically review the existing societies and remove the defunct ones by ordering liquidation. It is also suggested that a helpline be started by the department so that members of cooperative societies do not have to physically visit the department for their queries."