This article is written by Jessica Kaur, a first-year student currently pursuing B.A. LL.B. (Hons.) at Rajiv Gandhi National University of Law, Punjab. Here, she discusses the Constitutional provisions dealing with the creation, operation, and functions of Panchayats, Municipalities and Co-operative societies.

Introduction 

What did Abramah Lincoln say about democracy? That, it is a government “of the people, by the people, and for the people”. Each citizen in a democracy, from the educated professionals living in the urban areas, to the illiterate farmers in the rural areas, should be included in this system. Each one should have the right to vote for choosing his or her own representatives from that area, who would manage the affairs with their expertise.

The Central government cannot oversee the minute workings of all the smallest units in the country. Therefore, one of the salient features of a good representative government is the percolation of the self-rule mechanism to the grassroots level, leading to more effective decision-making and greater accountability. Keeping this in mind, our Constitution has provided for the creation of panchayats, municipalities and cooperative societies to manage the affairs of the villages and urban localities in India.

In this article, we shall explore the meaning of these three terms as well as the provisions related to their creation, operation, powers and responsibilities given in the Constitution of India, 1950.

Part- IX- Panchayats

The first Panchayati system (called “Panchayati Raj”) came up in Nagaur city of Rajasthan in 1959 as per the recommendations of the Balwant Rai Committee. This Committee did far-reaching work in the area of rural democracy, which brought Balwant Rai the title of “Father of Panchayati Raj.” Gradually, this system was adopted by other states like Andhra Pradesh and Maharashtra.

However, the Constitution did not lay an obligation upon governments to constitute panchayats. Article 40 only provided a Directive Principle of State Policy that said the State should organise village panchayats and give them the necessary powers and authority to function, but this was not mandatory.

Over time, the Panchayati systems that had cropped up started going lax. A need was felt for a more well-established decentralized administration. The L.M. Singhvi Committee was appointed in 1986 to study the problems faced by panchayats. It gave several recommendations, including that panchayats should be constitutionally recognised, promoted and preserved. Thus, Article 40 was finally solidified in Part IX by the Constitution (Seventy-Third Amendment) Act, 1992.

Let’s take a look at Articles 243 and 243A- 243O under this Part, which talks about rural local self-government.

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Gram Sabha 

The very basic unit of the Panchayati system is the Gram Sabha. It has been defined by Article 243(b) of the Constitution as the body of all the persons registered on the electoral rolls of a village.

The first question that comes to mind is, what does the Gram Sabha do? 

This permanent body is the body of the electorate. This means that all other institutions – Gram Panchayat, Zilla Parishad, etc. (which we will be talking about later) – are elected by the Gram Sabha. Moreover, the Gram Sabha acts as a forum where people can discuss matters of governance and development.

Therefore, Gram Sabha is the primary and fundamental component of the local self-government system. However, the extent of its powers depends upon the policy of the state in which the village is located, as mentioned in Article 243A. 

The membership of a Gram Sabha is restricted to persons above the age of 18 living in that village. This is done so that the best decisions, which are in line with the interests of the village, can be made.

We now move on to the self-government body that is elected by the Gram Sabha – the Panchayat.

Constitution of Panchayats

Under Article 243(d) of the Indian Constitution, ‘panchayat’ has been defined as an institution of self-government in rural areas. 

Article 243B provides for the establishment of a three-tier Panchayati system:

1. At the village level i.e. Gram Panchayat
2. At the intermediate level i.e. Panchayat Samiti
3. At the district level i.e. Zila Parishad

Intermediate-level panchayats, however, only exist in states where the population exceeds twenty lakhs. 

Gram Panchayat

Gram Panchayat is the lowest level in the panchayat pyramid system. 

Each village is divided into even smaller units called wards, each of which selects a representative of its own. They are called Ward members or the Panch. The Gram Sabha also elects the head of the Gram Panchayat, called the Sarpanch. Therefore, the Sarpanch and the Panch together make up the Gram Panchayat.

The main work of the Gram Panchayat is to take care of social issues, construct and maintain schools, roads and drainage facilities, etc., and to levy and collect local taxes.

The Gram Panchayat is accountable to the general body of voters in the village, i.e. the Gram Sabha, as well as to the two levels of authority above it in the hierarchy.

Panchayat Samiti

The Panchayat Samiti is the next level in the hierarchy. It oversees the working of the Gram Panchayats of all the villages located in the block under its jurisdiction.

The Panchayat Samiti is headed by the Pradhan. He or she is elected by a group consisting of all the members of the Panchayat Samiti as well as all the Panchs of the Gram Panchayats coming under it.

Zila Parishad

Also known as District Panchayat, this is the highest level of panchayat in the hierarchy of rural self-government. It oversees the working of the Panchayat Samitis of all the blocks in the district of its jurisdiction, as well as all the Gram Panchayats under them. Moreover, it controls the distribution of funds among all the Gram Panchayats. It is responsible for making developmental plans at the district level. 

The Zila Parishad is headed by the Chairman. It also has a Chief Executive Officer as a member, who is elected by the State government.

Composition of Panchayats 

All the members of the three levels in the panchayat hierarchy are elected by the eligible voters living in the area. However, the state can also make provisions for the representation of Members of Legislative Assembly (MLAs) or other officials in the panchayat. As for the rules regarding the composition of the panchayats, they have been taken care of by the Drafters under Article 243C of the Constitution.

A large number of panchayats are constituted in a single state. It is preferable that the ratio between the population and territory under one panchayat and the number of seats in it be the same throughout the state.

Each area having a single panchayat is divided into constituencies for the purpose of conducting elections. It is also desirable that the ratio between the population of each constituency and the number of seats allotted to it be the same throughout the panchayat area.

Disqualifications for Membership

A person can be disqualified from the membership of the panchayat in certain situations. As per Article 243F of the Constitution, this can happen when the person has been disqualified from membership of the Legislature of the Union or the State because of any reason, or if he has been specifically disqualified from membership of the panchayat by any law.

If a question arises regarding the disqualification of membership of any person, then it will be solved by the authority and by the process which the Legislature decides.

Bhanumati Etc. v. State of U.P. (2010)

Facts: 

In this case, a no-confidence motion was passed against the Chairman of a Zila Parishad under the U.P. Panchayat Laws (Amendment) Act, 2007. She challenged it on the grounds that a provision for no-confidence motion could not be made under the statute as it was not mentioned in the Constitution.

Judgement

The court dismissed the appeal, saying that the Constitution grants the State the power to fixate specific rules regarding election and membership. Therefore, the no-confidence motion was sustained.

Thus, this case is an example of the membership of a person to a Zila Parishad being under threat of disqualification under existing State law, and how the court upheld that motion.

Reservation of seats in Panchayats

The Drafters of our Constitution were aware of the reality of the rampant discrimination in India at the time of independence – which, unfortunately, has not completely died down even today. Keeping that in mind, they made special provisions for the representation of marginalised communities in the local self-government too. This was done to ensure that women, members of the downtrodden castes, etc. in the rural areas also get the opportunity to have their voices heard.

Article 243D of the Indian Constitution gives the provisions for reservation of seats in the panchayats for certain communities. They have been briefly described below.

1. Seats should be reserved for members of Scheduled Castes and Scheduled Tribes in the panchayat, in the same proportion which their population bears to the total population of the village.
2. At least one-third of the above-mentioned seats should be reserved for women belonging to Scheduled Castes and Scheduled Tribes.
3. At least one-third of the total seats in the panchayat should be reserved for women (including the seats reserved under Clause 2).

Duration of Panchayats 

The Constitution has specified the exact duration of operation of a panchayat in Article 243E. It states that every panchayat shall continue to be in force for a period of 5 years unless it is dissolved earlier by any law.

It also says that election to a panchayat should be completed before its expiry or 6 months before its dissolution.

Powers, Authority and Responsibility of Panchayats 

Panchayats have the power to prepare the plans and schemes for economic development and promotion of social justice in the village. They are responsible for preparing practical and well-thought-out plans which will enable the furtherance of the interests of the villagers. As per Article 243G, it is the State which determines the specific scope and extent of the powers of the panchayat in the above matters.

Some major functions of a panchayat are as follows:

1. Providing necessary facilities like sanitation and medical assistance, schools, irrigation, roads, drinking water, etc.
2. Making annual developmental plans for the area and preparing schemes for more scientific agriculture, employment generation, etc.
3. Making the annual budget and managing the finances of the area.
4. Implementing and coordinating schemes launched by the Central and State governments, like the Public Distribution System.

Powers to impose Taxes and Funds of Panchayats

Clearly, there are a lot of functions that a panchayat has to perform. And as we know, nothing in this world is free; to do anything, we need monetary resources. Where, then, do the monetary resources of the panchayats come from?

All of us pay taxes to the government on our incomes and expenditures. This acts as a source of revenue for the government. Some of these funds are appropriated to the panchayats. Also, in the same way as the government, panchayats too collect their own taxes, tolls, and fees from the people to keep their gears running smoothly.

Article 243H mentions that the State can take decisions to:

1. Grant the requisite power to the panchayat to levy taxes, tolls, and fees. 
2. Assign to the panchayat some of the money collected by it in similar ways.
3. Make grants to the panchayat, or create funds for it.

Finance Commission

To make the above-discussed process of mobilisation of funds for the panchayats easier, the Constitution has provided for the creation of a Finance Commission by the Governor under Article 243I. Enumerated below are the main provisions of this Article.

1. The Finance Commission appointed by the Governor would review the financial position of the panchayat and make recommendations in two matters: how to distribute the money between the state and the panchayat, and how to improve the financial position of the latter.
2. The Legislature would decide the composition of the Commission, the qualification of its membership, as well as the powers it would hold.
3. The Governor shall communicate all the recommendations made by the Commission to the state as well as the measures it should take to implement them.

Audit of Accounts of Panchayats 

As per the Constitution of India (Article 243J), State governments have the power to determine who will audit the accounts of panchayats and what procedure will be followed in their own states.

Election to the Panchayats 

The provision for an election to panchayats has been enshrined in Article 243K of the Indian Constitution. It says that the Panchayat elections are to be conducted and overseen by the State Election Commissions. Therefore, the election rules can vary from state-to-state.

Application of this Part to Union Territories 

The Constitution states that the provisions related to panchayats shall apply to Union Territories in the same way as in the case of the states, but the President may, by public notification, make any modifications in this provision.

Part IX does not apply to certain areas

There are certain areas in India that stand as exceptions to Part IX of the Constitution. This means that the state cannot establish panchayats in those areas. The areas which are provided as exceptions by Article 243M are mentioned below:

1. The Scheduled Areas and tribal areas in the states of Assam, Meghalaya, Tripura, and Mizoram
2. The states of Nagaland, Meghalaya, and Mizoram
3. The hilly areas in the state of Manipur and the district of Darjeeling.

However, the Legislature can decide to extend Part IX to some of the above exceptions. The Constitution says that the Parliament may extend the provisions of Part IX to Scheduled Areas mentioned in (1) above. Also, the Legislatures of Nagaland, Meghalaya, and Mizoram may extend Part IX to their states (except the Scheduled and tribal areas). 

Scheduled Areas have been excluded from Part IX because these predominantly tribal areas often had their own customs of governance, or else had been provided with other specific systems for their benefit. However, the tribes started becoming increasingly vulnerable and lost many of their forests, minerals, rivers, etc. to developmental projects. Thus, an established system of self-governance was required for them.

The Provisions of the Panchayats (Extension to Scheduled Areas) Act, 1996 or PESA was the law that brought about a relaxation in exclusion of Scheduled Areas from the 73rd Amendment. The self-governance system was introduced in ten out of fifteen states having Scheduled Areas. 

The case of Union of India v. Rakesh Kumar saw certain challenges to PESA.

Union of India v. Rakesh Kumar (2010)

Facts

Section 4(g) of PESA provided for the reservation of seats in a panchayat for members of Scheduled Tribes. Also, it said that in panchayats in Schedules Areas, only a member of Scheduled Tribes would be elected as Chairman. In Jharkhand, the reservations in panchayats in Scheduled Areas were supposed to be proportionate to the rest of the population and could go up to 80%.

These provisions were challenged in this case. The argument was that the reservations were excessive as they went against the cap of 50% reservations held in Indira Sawhney v. Union of India (1992) and M.R. Balaji v. State of Mysore (1963), and that they violated Article 14.

Judgement

The court held that these reservations were required to assist Scheduled tribes. In Jharkhand, the government had obligations to Scheduled tribes beyond the 50% cap as reservations were supposed to be proportional. However, 80% reservation was just the upper limit and it was not necessary to fill all those seats.

Continuance of existing laws and Panchayats: Article 243-N

Even before the enactment of the 73rd Amendment in 1992, there existed certain laws and provisions relating to Panchayats in various states. Article 243N, therefore, provides that any such laws and provisions would continue to be in force even if they were inconsistent with Part IX of the Constitution unless they were specifically repealed or amended by a competent Legislature or any other competent authority.

Usha Bharati v. State of U.P. (2014)

Facts

In this case, the appellant was the Adhyaksh of the Zila Parishad of Sitapur, Uttar Pradesh. Almost 2 years after her election, a motion of no-confidence was passed against her by the villagers, signed by 37 members, to initiate her removal. This was done in accordance with Section 28 of the U.P. Kshetra Panchayat & Zila Panchayat Act, 1961. The appellant challenged this, saying that no provision had been made in the Constitution for a no-confidence motion in panchayat elections, and thus it was illegal and invalid.

Judgement

The court said that as per Article 243N, any existing laws of the State related to panchayats would continue to be in force unless repealed or amended. Since the provision for a no-confidence motion in the U.P. Act had not been repealed and instead, rather had been confirmed in other judgments since then, it did not go against Part IX of the Constitution.

It also said that the Constitution empowered the state to make laws for the election of Chairperson of panchayat and therefore, the no-confidence motion in the state was also supported by it.

Courts to not interfere in electoral matters 

Article 243O of the Constitution bars courts from interfering in the matters of panchayats, like delimitation or allotment of seats. Courts have no jurisdiction in electoral matters of a panchayat. This means that if there are any disputes in an election process, the court cannot step in to resolve them. A panchayat’s elections can be questioned only by an election petition presented before the authority that the State government has prescribed.

PART lX-A: The Municipalities

Just like Panchayati Raj in rural areas, a system of self-governance at the smallest units has been established in urban areas too. It was added to the Constitution by the Constitution (Seventy-Fourth Amendment) Act, 1992, which was also known as the “Nagarpalika Act”. This allowed the members of a particular urban locality to come together and work towards solving the issues in their area and implementing plans for its development. These self-government bodies are known as Municipalities.

The advantage of the municipal system is that after people have elected their representatives, they have someone to approach for expressing their grievances, and someone they can hold accountable for the management of the locality. 

The Municipal system is not much different from the Panchayati system, having only a few changed aspects that help to cater to the different environment. Now that we have an understanding of panchayats, we can have a quick look at municipalities given in the provisions of Part IX-A of the Constitution (Article 243P to Article 243ZG).

Definition

The municipality has been defined in Article 243P as simply an institution of self-government in an urban area, constituted under Article 243Q. 

It has also defined district as a district in a state; and a metropolitan area as an area having a population of ten lakhs or more, comprising of multiple districts and consisting of multiple municipalities or panchayats.

Constitution of Municipalities 

The Constitution, in Article 243Q, provides for the rules regarding the constitution of municipalities. According to it, three types of municipalities are to be created:

1. Nagar Panchayats, for transitioning areas (areas turning from rural to urban)
2. Municipal Councils, for smaller urban areas
3. Municipal Corporations, for larger urban areas

Most of the members of municipalities are elected, while there may be some who are nominated by virtue of their special knowledge and expertise. The state may also provide for representation of members of the Legislative Assembly and Legislative Council in the municipality. 

Nagar Panchayats

Also called Notified Area Committee, it is set up in an area that does not qualify completely as an urban area but which the government considers important. It is set up in areas having more than 11,000 but less than 25,000 people living. 

The members of a Nagar Panchayat are called ward members. They are headed by a Chairman.

Municipal Councils

Also called Nagar Palikas, they are established in areas having more than 1,00,000 but less than 10,00,000 people living. 

Its members are also called ward members, and they elect a President to head them. Apart from that, the State appoints a Chief Officer and other officers like health officer, education officer, etc. to manage the affairs of the municipal council.

Fun fact: Uttar Pradesh has the largest number of municipal councils.

Municipal Corporations

A Municipal Corporation is also called a Nagar Nigam or a Mahanagar Palika. It is the top tier municipality and enjoys the highest degree of autonomy. Municipal Corporations are established in urban areas having a population of more than 1 million.

The biggest Municipal Corporations are found in the major metropolitan cities of India like Delhi, Mumbai, Chennai, Kolkata, etc.

Wards Committees 

For the purpose of conducting elections to the municipality, the area under its jurisdiction is divided into Wards. These Wards also have their own Committees, consisting of one or more wards within the area of all municipalities having a population of 3 lakh or more.

Reservation of seats in Municipalities 

Special provisions have been made for the representation of marginalised communities in the urban local self-governments. This has been done to ensure that women, members of the downtrodden castes, etc. also get the opportunity to have their voices heard.

Article 243T of the Indian Constitution gives the provisions for reservation of seats in the municipalities for certain communities. They have been briefly described below.

1. Seats should be reserved for members of Scheduled Castes and Scheduled Tribes in the municipality, in the same proportion which their population bears to the total population of the locality.
2. At least one-third of the above-mentioned seats should be reserved for women belonging to Scheduled Castes and Scheduled Tribes.
3. At least one-third of the total seats in the municipality should be reserved for women (including the seats reserved under Clause 2).
4. The offices of the Chairpersons shall be reserved for Scheduled Castes, Scheduled Tribes and women as the Legislature decides.

An interesting case in the matter of reservation of seats is Saraswati Devi v. Smt. Shanti Devi and Ors. (1997).

Saraswati Devi v. Smt. Shanti Devi and Ors. (1997)

Facts

In this case, the appellant and respondent were both women of Scheduled Castes elected to the Municipal Committee in Loharu, Haryana. The appellant occupied the seat reserved for Scheduled Castes while the respondent was elected in an unreserved seat. The office of the President was to be, as per the State, filled by a Scheduled Caste person. Both the women wanted to contest for this post but while the appellant was allowed to, the respondent was not, as she did not occupy a reserved seat. 

Judgement

The court held that as the respondent was elected as a member not on a reserved seat but a seat for General category of women, she could not be included in the eligible Scheduled caste candidates for Presidentship.

While she did belong to the Scheduled Caste category, she and the appellant were not in the same category for the purpose of elections. Including her would mean that all the elected members belonging to Scheduled Castes were in one category and thus, could contest for the post of President, which would distort the reservation scheme given in Article 243T of the Constitution of India.

Reservation of seats for Backward class of citizens

The Article also says that nothing in Part IX-A shall prevent the Legislature of a State from making provisions for reservation of seats in a Municipality for citizens belonging to backward classes. This means that the Legislature has the opportunity to take the existing reservation provisions forward and extend them to backward classes if it feels the need to do so.

Duration of Municipalities

The Constitution has specified the exact duration of operation of a municipality in Article 243U. It states that every municipality shall continue to be in force for a period of 5 years unless it is dissolved earlier by any law.

It also says that election to a municipality should be completed before its expiry or 6 months before its dissolution.

Kishan Singh Tomar v. Municipal Corporation of the City of Ahmedabad (2007)

Facts

In this case, the appellant was the Chairman of the Standing Committee of the Ahmedabad Municipal Corporation. He filed a writ petition for the Municipal Corporation of Ahmedabad, the government of Gujarat and the State Election Commission to take necessary steps for holding timely elections to the Municipal Corporation, before its approaching expiry.

The State Election Commission replied saying that since the number of wards in Ahmedabad had been increased, which required revisal of voters’ list in consultation with political parties, it would take 6 months to complete the election process, and could only be done after the State’s notification. An appeal was filed against this.

Judgement

The court acknowledged that Article 243U’s provision in this matter was given so as to prevent mischief or delay in the election process. The State Election Commission needed to work independently and with authority, and complete the elections before the expiration of the duration of the current municipal corporation in Ahmedabad.

Disqualifications for Membership

A person can be disqualified from the membership of the municipality in certain situations. As per Article 243V of the Constitution, this can happen when the person has been disqualified from membership of the Legislature of the Union or the State because of any reason, or if he has been specifically disqualified from membership of the municipality by any law.

If the question arises regarding the disqualification of membership of any person, then it will be solved by the authority and by the process which the Legislature decides.

Powers, authority and responsibilities of Municipalities

Municipalities play a very important role in regulating the affairs of the localities – ensuring access to civic amenities and formulating plans for development. 

As per Article 243W of the Constitution, the Legislature of the State endows its municipalities with the authority to formulate plans for economic development and social justice in the locality and to perform the functions entrusted to them which are necessary for the management of the area.

The main functions of a municipality include:

1. Construction of buildings and regulation of land use
2. Managing the water supply
3. Protecting natural resources and regulating their use
4. Ensuring public health and proper sanitation
5. Construction of schools in the locality

Power to impose taxes and funds of the Municipalities 

A municipality needs funds and resources to perform its wide range of functions. There are certain methods laid-out in Article 243X of the Constitution through which municipalities mobilise funds. The process is very similar to the one followed by panchayats, so let’s have a quick look at the provisions of this Article. 

The Constitution provides that the State can take decisions to:

1. Grant the requisite power to the municipality to levy taxes, tolls, and fees. 
2. Assign to the municipality some of the money collected by it in similar ways.
3. Make grants to the municipality, or create funds for it.

Finance Commission

Just like in the case of panchayats, the Constitution has provided for the creation of a Finance Commission for municipalities by the Governor under Article 243Y. Enumerated below are the main provisions of this Article.

1. The Finance Commission appointed by the Governor shall review the financial position of the municipality and make recommendations in two matters: how to distribute the money between the state and the municipality, and how to improve the financial position of the latter.
2. The Legislature would decide the composition of the Commission, the qualification of its membership, as well as the powers it would hold.
3. The Governor shall communicate all the recommendations made by the Commission to the state as well as the measures it should take to implement them.

Audit of Accounts of the Municipalities

As per the Constitution of India (Article 243Z), State governments have the power to determine who will audit the accounts of municipalities and what procedure will be followed in their own states.

Election to the Municipalities

Elections to municipalities are conducted under the guidance and control of the State Election Commission, as given in Article 243ZA. This means that election rules in a particular municipality depend on the policy of the government of the State in which it lies.

Application to Union Territories 

The Constitution states that the provisions related to municipalities shall apply to Union Territories in the same way as in the case of the states, but the President may, by public notification, make any modifications in this provision.

Part IX-A does not apply to certain areas 

There are certain areas in India that stand as exceptions to Part IX of the Constitution. This means that the state cannot establish municipalities in those areas. The areas which are provided as exceptions by Article 243ZC are mentioned below:

1. The Scheduled Areas and tribal areas in the states of Assam, Meghalaya, Tripura, and Mizoram 
2. The Darjeeling Gorkha Hill Council.

However, the Constitution also says that the Parliament can choose to extend the provisions of Part IX to the Scheduled Areas mentioned above, subject to certain exceptions and modifications specified by law.

Committee for District Planning

The Constitution has provided for the creation of a District Planning Committee in every district. What does this District Planning Committee do?

According to Article 243ZD, a Committee for District Planning is set up to consolidate the plans made by panchayats and municipalities in a district. It is also responsible for preparing development plans for the district, keeping in mind the interests of both the rural and urban areas within it and the resources available with the district. These plans are communicated by the Chairperson of the Committee to the State government.

This article also provides that the State Legislature decide the composition of the Committee and how the Chairperson will be chosen, as well as the exact functions it will perform.

Committee for Metropolitan Planning

The concept of the Metropolitan Planning Committee is very similar to that of the District Planning Committee discussed above. Article 243ZE provides for the creation of a Committee for Metropolitan Planning in every Metropolitan area in a state, which shall make plans for development keeping in mind the needs of the rural and urban areas within it (with respect to water and other natural resources, infrastructure, etc.), implement the plans made by the Union or the State and make investments in the metropolitan area.

This article also provides that the State Legislature decide the composition of the Committee and how the Chairperson will be chosen, as well as the exact functions it will perform.

Continuance of existing laws and Municipalities

Even before the enactment of the 74th Amendment in 1992, there existed certain laws and provisions relating to Municipalities in various states. Article 243ZF, therefore, provides that any such laws and provisions would continue to be in force even if they were inconsistent with Part IX of the Constitution unless they were specifically repealed or amended by a competent Legislature or any other competent authority.

It also states that municipalities existing before the enactment of the new law shall continue to be in force until their expiration unless specifically dissolved by the Legislative Assembly (and also the Legislative Council, if it exists in the state).

Courts to not interfere in electoral matters 

Article 243ZG of the Constitution bars courts from interfering in the matters of municipalities, like delimitation or allotment of seats. Courts have no jurisdiction in electoral matters of a municipality.

This means that if there are any disputes in an election process, the court cannot step in to resolve them. A municipality’s elections can be questioned only by an election petition presented before the authority that the State government has prescribed.

Amendment of Article 280 

A major step was taken regarding self-government bodies in tribal areas in 2019 with the 125th Amendment to the Constitution, which sought to change Article 280 and the Sixth Schedule. This amendment provided for significant improvement in the financial resources and powers of the autonomous District councils in the predominantly-tribal states of Assam, Meghalaya, Mizoram, and Tripura.

It also provided for elected and more empowered village councils who could prepare plans for economic development and social justice in the area – dealing with important matters like agriculture and irrigation, forests, etc. 

PART IX-B: The Co-operative Societies 

Panchayats and municipalities are government organisations that are established by the State governments, and which manage all the affairs of the area in which they are located. However, sometimes, a group of people with certain shared characteristics (for eg. the same occupation) may come together to manage the affairs of their community. This is called a co-operative society, and it is the third type of organisation we shall be discussing.

A co-operative society refers to an organisation of like-minded people who voluntarily come together to promote their economic, social or cultural interests. They invest their time, efforts and personal resources for this purpose.

Co-operatives may be of different types, like a co-operative housing society, a co-operative business society (which sells goods produced by its members), etc. One of the best examples of a co-operative society in India is Amul, which started as a small society of few dairy farmers in Gujarat and today runs as one of the main suppliers of dairy products in the country.

The Constitution (Ninety-Seventh Amendment) Act was passed in 2011 to make states facilitate the creation and working of co-operative societies in their territory. Let’s examine the provisions regarding co-operative societies, given in Article 243ZH to Article 243ZT under Part IX-B.

Definitions 

Article 243ZH defines a co-operative society as a society registered or deemed to be registered under any law relating to co-operative societies.

It also defines certain terms related to co-operative societies. The Board refers to the Board of Directors who govern, direct and control the management of the society. The members elected by this board as the President, Chairman, Treasurer, etc. are called the office bearers.

Further, a multi-state co-operative society has been defined as one which works not in one single state, but multiple states.

Incorporation of co-operative societies

Just like any other institution or organisation, co-operative societies to need a prescribed procedure for their incorporation. If we want to create a co-operative society today, what are the rules we must follow?

Well, these rules vary from state-to-state. Article 243ZI mentions that a State Legislature can decide the process of incorporation, regulation and winding up of co-operative societies in its territory, keeping in mind the major co-operative principles – democratic set-up, member participation, and autonomy.

Number and term of members of the board and its office bearers

The Constitution, under Article 243ZJ, has given the provisions related to the membership of the co-operative society. They have been briefly described below.

1. It states that the maximum number of directors on the board of a co-operative society can be 21. The exact number within this limit can be decided by the State.

Another thing that it says is that amongst these directors, one seat should be reserved for a person of Scheduled Castes or Scheduled Tribes and two seats should be reserved for women.

1. Further, the Article states that the term of board members and office members of the society shall be 5 years.
2. Lastly, provisions may be made by the State Legislature for appointing at most 2 persons to the society who have expertise in that particular field. However, these 2 members shall not vote or contest in elections.

Removal by a no-confidence motion 

In case a member of the co-operative society is found to be using unfair or corrupt practices, or is working against the general interest of the body, or occupies a managerial position whose functions he or she is not able to perform, the other members can pass a no-confidence motion against him or her to remove the said member. 

Since all states have their separate co-operative society laws, the circumstances in which a no-confidence motion can be passed as well as its rules and procedure vary from state-to-state.

Election of members of the board 

One of the fundamental principles of a co-operative society is a democratic set-up and member participation, which ensures that all members play a role in furthering the common interests of the entire body of members. Therefore, it is essential to conduct proper and timely elections in every co-operative society.

Article 243ZK says the State Legislature can decide the rules and procedure of co-operative society elections. The elections shall be conducted and supervised by the authority which the state government prescribes. However, it must be made sure that the elections to the board are conducted before the expiry of the term of the existing board, so that the new board is ready to take over after the expiry of the previous one and there is no gap between the two.

Supersession and suspension of board and interim management 

Sometimes, the board of directors of the co-operative society may be superseded or suspended by the Government in unfavourable circumstances. This can only be done when the Government has some shareholding in or has given as loan or financial assistance to the society. The circumstances in which the board may be superseded or suspended, as per Article 243ZL are:

1. When the board has persistently been defaulting
2. When it has neglected its duties
3. When it has committed any act against the interests of the co-operative society or its members
4. When there is a stalemate in the constitution of the board or its functions
5. When the authority or body prescribed by the State Legislature has failed to conduct elections in accordance with the provisions of the State Act.

In case the board is superseded, the administrator appointed by the state to look over the affairs of the co-operative society should take the necessary steps to conduct elections for the board.

Audit of accounts of co-operative societies

Audit of accounts of co-operative societies is necessary to ensure that they are being managed professionally and are not suffering from inexpertise, neglect or corruption. The Indian Constitution has provided the rules for audit of accounts of co-operative societies. Upon reading Article 243ZM, the main rules can be understood as follows:

1. The State Legislature may make provisions for regular maintenance of accounts by co-operative societies and their audit at least once a financial year.
2. It may also decide the minimum qualifications for the auditors.
3. The audit of the accounts of every co-operative society should be completed within 6 months of the end of each financial year.
4. These audit reports should be produced before the State Legislature in the manner prescribed by it.

Convening of general body meeting 

Article 243ZN of the Constitution gives freedom to the State Legislature to make provisions for co-operative societies to convene their general body meetings within 6 months of the end of every financial year.

Right of a member to get information 

The Constitution has made certain provisions for the Right to Information of a member of a co-operative society. Article 243ZO says that the State Legislature may:

1. Provide for access by a co-operative society member to its books, accounts, etc. 
2. Provide for participation of members in the management of the society by ensuring a minimum attendance by members.
3. Provide for co-operative education and training for the members.

Filing of Returns

Co-operative societies possess a great degree of autonomy to manage and control their affairs. However, they are still subject to State scrutiny, in order to check that they are functioning smoothly and no corrupt practices are being undertaken.

Every co-operative society is required to file returns to the authority prescribed by the State government. Certain matters that these returns must include are given in Article 243ZP, explained below:

1. An annual report of its activities
2. An audited statement of accounts
3. A plan for using surplus as approved by consensus of the members of the society
4. A list of amendments to the bye-laws of the co-operative society (if any)
5. A declaration as to the date of its general body meeting as well as elections
6. Any other information required by the State.

Offences and penalties 

Due to their autonomous nature, there is a chance of unscrupulous activities by some co-operative societies or their members. Article 243ZQ says that the State Legislature may decide what constitutes as an offence with reference to a co-operative society, and how those offences are to be punished.

It has also given certain situations which must be included in the offences, which are as follows:

1. A society or its member intentionally filing false returns, giving false information, or not furnishing information at all to a State-authorised person.
2. A person intentionally or without reasonable justification ignoring summons or orders issued by the state.
3. An employer not paying the money to the co-operative society which has been deducted by him from his employee, within 14 days.
4. A custodian of records, documents, cash, etc. of a co-operative society failing to hand them over to an authorised person.
5. Any person adopting a corrupt practice before, during or after the election of board members or office bearers.

Application to multi-State co-operative societies

Article 243ZR states that all the provisions of Part IX-B apply in the same way to multi-state co-operative societies as to the single state ones. The only difference is that in the case of the former, the words ‘Legislature’, ‘State Act’ and ‘State government’ would be replaced by ‘Parliament’, ‘Central Act’ or ‘Central government’.

Application to Union territories 

The Constitution states that the provisions related to co-operative societies shall apply to Union Territories in the same way as in the case of the states, but the President may, by public notification, make any modifications in this provision.

Continuance of existing laws

Even before the enactment of the 97th Amendment in 2011, there may have existed certain laws and provisions relating to co-operative societies in various states. Article 243ZT, therefore, provides that any such laws and provisions would continue to be in force even if they were inconsistent with Part IX of the Constitution unless they were specifically repealed or amended by a competent Legislature or any other competent authority.

Conclusion 

The Constitution has given us elaborate and thought-out provisions that determine the meaning and functions of local self-government and management bodies i.e. panchayats, municipalities and co-operative societies. This has been done to render greater decentralisation to the governance mechanism, which enables better decision-making and faster development. Thus, these institutions play a very important role in improving the quality of life of citizens in rural areas and urban centres.

Through this article, we studied in detail these provisions of the Constitution to gain more insight into the world of local self-governments.

References

• https://indiankanoon.org/doc/237570/
• https://www.writinglaw.com/part-ixb-of-constitution-of-india-the-co-operative-societies/
• https://www.writinglaw.com/part-ixb-of-constitution-of-india-the-co-operative-societies/

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