Gujarat HC has recently held that 97th amendment to India’s Constitution of 2012 is unconstitutional. Post this order we have discussed the implication of the order on MCS (Amendment) Ordinance, 2013.                   

Gujarat HC order vs MCS (Amendment) Ordinance, 2013

01.  Constitutional (97th Amendment) Act 2011, incorporated definition-articles namely 243-ZH to 243-ZT, on 12-01-2012. The Parliament gave the States one full year to make appropriate amendments to its Cooperative Acts.

02.  MCS (Amendment) Ordinance, 2013, was promulgated on 14-02-2013, and is BASED on the Constitutional (97th Amendment) articles namely 243-ZH to 243-ZT.   The Maharashtra State Govt., could not amend the MCS Act of 1960 within this one full year, hence the Maharashtra Governor had to issue the aforesaid ordinance, keeping in line with the directions of the Parliament.

03.  The MCS (Amendment) Ordinance, 2013, amended certain sections of the MCS Act, based and in-line with the definition-article namely 243-ZH to 243-ZT (as per the Constitutional – 97th Amendment)

THE BUMPER SPOILER:

04.  Gujarat High Court, in Writ Petition (PIL) no. 166 of 2012, vide its order dated 22-04-2013,  has declared the Constitution [97th amendment] Act, 2011 as ultra vires of the Constitution of India.  SPECIFICALLY & SPECIALLY DECLARING THAT “Articles 243ZH to 243ZT  is  ultra vires”.

a) Ultra-Vires means a “law-debilitating-virus” that declares something as “Null & Void”

b) Ultra-Vires, in context also means that the MCS (Amendment) Ordinance, 2013, of 15-02-2013 is also “Null & Void”, since the Maharashtra ordinance was based on Constitution [97th amendment] Act, 2011 (more specifically  on definition-articles namely 243-ZH to 243-ZT)

c) The Hon. Judges have REFUSED to grant “STAY on the OPERATION of the its Judgment”,  which means that the judgment is effective with immediate effect and would continue to be effective TILL the Supreme Court decides otherwise.

d) EFFECTIVELY, the above means that the Gujarat High Court judgment, is effective for entire India (all States), unless & until the Supreme Court decides otherwise.

CONSOLATION-in-CHIEF: 

AFTER-EFFECTS (i.e. spiking a spanner in the wheel)

a) The BAN of Govt. Administrator, in Housing / General Societies is not applicable any more, hence power of Registrar u/s 78 stands restored by default and Administrator can be now appointed.  (due to article no. 243-ZL, now declared as null & void)

b) AGM has to be held on 14th Aug (or by 14 Nov), instead of 30th September (due to article no. 243-ZN, now declared as null & void)

c) Reservations for SC / ST / other categories, is gone (article no. 243-ZJ)

d) Concept of Active /Passive member, is gone (due to article no. 243-ZO)

e) Election that was mandatorily to be held by State Co-operative Election Authority, is null & Void (due to article no. 243-ZK)

f) Auditors special & specific powers, is gone (article no. 243-ZM)

g) Co-operative education & training for members, is gone (article no. 243-ZN)

h) Concept of Expert and Functional Directors, is gone (article no. 243-ZJ)

i) Much hyped new Bye-Laws, as formulated by the Coop. Registrars, need not be adopted since such new bye-laws were based on MCS (Amendment) Ordinance, 2013, which in turn was based on definition-articles  namely 243-ZH to 243-ZT (Constitution [97th amendment] Act, 2011), which is now declared as “Ultra Vires”.  Therefore any adopted bye-law based on the said Constitution [97th amendment] Act, 2011, is also “Null & Void”.

IF you pay various taxes, THEN INTROSPECT on this:

a) WHEN the Maharashtra Govt., takes more than one year to make simple amendments in the MCS Act as per the Constitutional (97th Amendment) Act 2011,  THEN how the Govt. expects the scores of Society Mg. Committee’s to function with vigour and as per the MCS Act, leave aside the reluctances in signing of the erstwhile M-20 Bonds  .OR. holding AGM on time .OR.  conducting Accounts & Audit on time .OR. resisting from Misappropriation of members funds, besides scores of burning issues like Dictatorial Functioning, Harassment’s of ordinary members and so on….,  which is evident from the consistent scores of litigation before the Registrar’s office and in the Coop. Courts.

b) Apathy, Ignorance, Arrogance, Ego are the bane of Cooperative Society’s.

—————-

Hemant Agarwal  (Legal Consultants)

Email:  ha21@rediffmail.com

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  1. shravan says:

    Gujarat HC order on 97th amendment to India’s Constitution of 2012 vs MCS (Amendment) Ordinance, 2013
    Posted In Corporate Law | Articles | 3 Comments »

    Gujarat HC has recently held that 97th amendment to India’s Constitution of 2012 is unconstitutional. Post this order we have discussed the implication of the order on MCS (Amendment) Ordinance, 2013.
    Gujarat HC order vs MCS (Amendment) Ordinance, 2013
    01. Constitutional (97th Amendment) Act 2011, incorporated definition-articles namely 243-ZH to 243-ZT, on 12-01-2012. The Parliament gave the States one full year to make appropriate amendments to its Cooperative Acts.
    02. MCS (Amendment) Ordinance, 2013, was promulgated on 14-02-2013, and is BASED on the Constitutional (97th Amendment) articles namely 243-ZH to 243-ZT. The Maharashtra State Govt., could not amend the MCS Act of 1960 within this one full year, hence the Maharashtra Governor had to issue the aforesaid ordinance, keeping in line with the directions of the Parliament.
    03. The MCS (Amendment) Ordinance, 2013, amended certain sections of the MCS Act, based and in-line with the definition-article namely 243-ZH to 243-ZT (as per the Constitutional – 97th Amendment)
    THE BUMPER SPOILER:
    04. Gujarat High Court, in Writ Petition (PIL) no. 166 of 2012, vide its order dated 22-04-2013, has declared the Constitution [97th amendment] Act, 2011 as ultra vires of the Constitution of India. SPECIFICALLY & SPECIALLY DECLARING THAT “Articles 243ZH to 243ZT is ultra vires”.
    a) Ultra-Vires means a “law-debilitating-virus” that declares something as “Null & Void”
    b) Ultra-Vires, in context also means that the MCS (Amendment) Ordinance, 2013, of 15-02-2013 is also “Null & Void”, since the Maharashtra ordinance was based on Constitution [97th amendment] Act, 2011 (more specifically on definition-articles namely 243-ZH to 243-ZT)
    c) The Hon. Judges have REFUSED to grant “STAY on the OPERATION of the its Judgment”, which means that the judgment is effective with immediate effect and would continue to be effective TILL the Supreme Court decides otherwise.
    d) EFFECTIVELY, the above means that the Gujarat High Court judgment, is effective for entire India (all States), unless & until the Supreme Court decides otherwise.
    CONSOLATION-in-CHIEF:
    AFTER-EFFECTS (i.e. spiking a spanner in the wheel)
    a) The BAN of Govt. Administrator, in Housing / General Societies is not applicable any more, hence power of Registrar u/s 78 stands restored by default and Administrator can be now appointed. (due to article no. 243-ZL, now declared as null & void)
    b) AGM has to be held on 14th Aug (or by 14 Nov), instead of 30th September (due to article no. 243-ZN, now declared as null & void)
    c) Reservations for SC / ST / other categories, is gone (article no. 243-ZJ)
    d) Concept of Active /Passive member, is gone (due to article no. 243-ZO)
    e) Election that was mandatorily to be held by State Co-operative Election Authority, is null & Void (due to article no. 243-ZK)
    f) Auditors special & specific powers, is gone (article no. 243-ZM)
    g) Co-operative education & training for members, is gone (article no. 243-ZN)
    h) Concept of Expert and Functional Directors, is gone (article no. 243-ZJ)
    i) Much hyped new Bye-Laws, as formulated by the Coop. Registrars, need not be adopted since such new bye-laws were based on MCS (Amendment) Ordinance, 2013, which in turn was based on definition-articles namely 243-ZH to 243-ZT (Constitution [97th amendment] Act, 2011), which is now declared as “Ultra Vires”. Therefore any adopted bye-law based on the said Constitution [97th amendment] Act, 2011, is also “Null & Void”.
    IF you pay various taxes, THEN INTROSPECT on this:
    a) WHEN the Maharashtra Govt., takes more than one year to make simple amendments in the MCS Act as per the Constitutional (97th Amendment) Act 2011, THEN how the Govt. expects the scores of Society Mg. Committee’s to function with vigour and as per the MCS Act, leave aside the reluctances in signing of the erstwhile M-20 Bonds .OR. holding AGM on time .OR. conducting Accounts & Audit on time .OR. resisting from Misappropriation of members funds, besides scores of burning issues like Dictatorial Functioning, Harassment’s of ordinary members and so on…., which is evident from the consistent scores of litigation before the Registrar’s office and in the Coop. Courts.
    b) Apathy, Ignorance, Arrogance, Ego are the bane of Cooperative Society’s.
    —————-
    Hemant Agarwal (Legal Consultants)
    Email: ha21@rediffmail.com
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    Sandeep Kanoi+
    3 Responses to “Gujarat HC order on 97th amendment to India’s Constitution of 2012 vs MCS (Amendment) Ordinance, 2013”

    Dilip Mali Says:
    June 7, 2013 At 11:18 AM
    require judgementof gutarat hc against mcs (amendment) ordinnce 2013

    Radhakrishnan K.V. Says:
    May 6, 2013 At 4:30 PM
    It is not correct to say that the order of Gujarat HC is not binding to other States. It is applicable all over India unless it is reversed in appeal.The judgment is not merely an offer of suggestion. HC has quashed Article 243ZH to Article ZT which means these clauses are no longer in existance in the Constitution itself.Is this phenominon applicable for Gujarat only?
    However this verdict will not affect the amendments made by the States in sp far as the State legislature is empowered for that even in the absence of 97th CAA.

    Krishnaraj Rao Says:
    April 27, 2013 At 9:56 PM
    The 97th Amendment has been partially quashed by the Gujarat HC judgment.

    One school of thought says that because of this, the carpet has been pulled out from under the feet of all the state governments, and that they have all lost their power to amend their respective co-operative acts. According to this school of thought, amendment to Maharashtra Cooperative Societies Act 1960 made as per 97th Amendment stands scrapped, and therefore, all the changes made so far (eg. adoption of Model Bye-laws) will be rolled back or put on hold.

    Such is not the case. Please understand the reasons.

    The conclusion of Gujarat HC Judgment (point no. 27 of attached file) says,
    QUOTE
    We, therefore, allow this Public Interest Litigation by declaring that the Constitution [97th amendment] Act, 2011 inserting part IXB containing Articles 243ZH to 243ZT is ultra vires the Constitution of India for not taking recourse to Article 368(2) of the Constitution providing for ratification by the majority of the State Legislatures. This order, however, will not affect other parts of the Constitution [97th amendment] Act, 2011.
    UNQUOTE.

    But MCS Amendment Ordinance is not directly unaffected by this judgment. The Reasons:

    FIRSTLY: Many PILs may have been filed with various arguments against the 97th Amendment (indeed, one such was filed before Aurangabad Bench of Bombay High Court). Such PILs may be pending before any of the 23 other High Courts in the country… and other High Courts may deliver judgments that differ from Gujarat High Court… or keep the matter hanging for another year or two without delivering any judgment. The Gujarat HC judgment is only suggestive, and it is not binding on any other High Courts, and other states such as Maharashtra.

    Gujarat HC judgment cannot be considered taken as final and binding nationwide until the same judgment is delivered by Supreme Court, after considering all the judgments of various High Courts, and/or after hearing appeals against judgments against various high court judgments in this regard.

    SECONDLY: The MCS Amendment Ordinance has NOT been quashed by this judgment. Quashing of 97th Amendment would actually give even more power to State Legislatures to amend their respective Co-operative Legislations, as THEY WILL HAVE NO REQUIREMENT TO BE CONSISTENT WITH THE 97TH AMENDMENT.

    CONCLUSION: Maharashtra State Legislature (and legislature of every other State) is at complete liberty to ratify the MCS Amendment ordinance, with minor modifications of wordings, or with major changes. They may or may not cite the 97th Amendment as their reason for changing their respective Act.

    In Maharashtra, as Sharad Pawar (who stewarded the 97th Amendment through parliament) exercises considerable clout in the government, there is every likelihood that the proposed amendment of the MCS Act will go through — with or without making a reference to the 97th amendment. In the meantime, the MCS Amendment Ordinance continues to be in force.

    Hypothetically, there are four possible events that can prevent MCS Act Amendment from happening:

    1) By citing the Gujarat High Court order to secure a stay from the Supreme Court on the 97th Amendment, and also amendment of various State Co-operative Acts

    2) By citing Gujarat HC order to secure a stay from Bombay High specifically on amendment of Maharashtra Co-operative Societies Act.

    3) Opposition leaders like Uddhav and Raj Thackeray decide to politicize the whole issue, and strenuously oppose the amendment in the state assembly and outside also, stalling the amendment indefinitely.

    4) Maharashtra government loses the will to amend the MCS Act, and allows the ordinance to lapse in July 2013 due to its inaction, without even re-issuing the ordinance for another six months.

    Until some combination of these four things happen, MCS Act amendment is very much on track.

    Regards,
    Krish

  2. Radhakrishnan K.V. says:

    It is not correct to say that the order of Gujarat HC is not binding to other States. It is applicable all over India unless it is reversed in appeal.The judgment is not merely an offer of suggestion. HC has quashed Article 243ZH to Article ZT which means these clauses are no longer in existance in the Constitution itself.Is this phenominon applicable for Gujarat only?
    However this verdict will not affect the amendments made by the States in sp far as the State legislature is empowered for that even in the absence of 97th CAA.

  3. Krishnaraj Rao says:

    The 97th Amendment has been partially quashed by the Gujarat HC judgment.

    One school of thought says that because of this, the carpet has been pulled out from under the feet of all the state governments, and that they have all lost their power to amend their respective co-operative acts. According to this school of thought, amendment to Maharashtra Cooperative Societies Act 1960 made as per 97th Amendment stands scrapped, and therefore, all the changes made so far (eg. adoption of Model Bye-laws) will be rolled back or put on hold.

    Such is not the case. Please understand the reasons.

    The conclusion of Gujarat HC Judgment (point no. 27 of attached file) says,
    QUOTE
    We, therefore, allow this Public Interest Litigation by declaring that the Constitution [97th amendment] Act, 2011 inserting part IXB containing Articles 243ZH to 243ZT is ultra vires the Constitution of India for not taking recourse to Article 368(2) of the Constitution providing for ratification by the majority of the State Legislatures. This order, however, will not affect other parts of the Constitution [97th amendment] Act, 2011.
    UNQUOTE.

    But MCS Amendment Ordinance is not directly unaffected by this judgment. The Reasons:

    FIRSTLY: Many PILs may have been filed with various arguments against the 97th Amendment (indeed, one such was filed before Aurangabad Bench of Bombay High Court). Such PILs may be pending before any of the 23 other High Courts in the country… and other High Courts may deliver judgments that differ from Gujarat High Court… or keep the matter hanging for another year or two without delivering any judgment. The Gujarat HC judgment is only suggestive, and it is not binding on any other High Courts, and other states such as Maharashtra.

    Gujarat HC judgment cannot be considered taken as final and binding nationwide until the same judgment is delivered by Supreme Court, after considering all the judgments of various High Courts, and/or after hearing appeals against judgments against various high court judgments in this regard.

    SECONDLY: The MCS Amendment Ordinance has NOT been quashed by this judgment. Quashing of 97th Amendment would actually give even more power to State Legislatures to amend their respective Co-operative Legislations, as THEY WILL HAVE NO REQUIREMENT TO BE CONSISTENT WITH THE 97TH AMENDMENT.

    CONCLUSION: Maharashtra State Legislature (and legislature of every other State) is at complete liberty to ratify the MCS Amendment ordinance, with minor modifications of wordings, or with major changes. They may or may not cite the 97th Amendment as their reason for changing their respective Act.

    In Maharashtra, as Sharad Pawar (who stewarded the 97th Amendment through parliament) exercises considerable clout in the government, there is every likelihood that the proposed amendment of the MCS Act will go through — with or without making a reference to the 97th amendment. In the meantime, the MCS Amendment Ordinance continues to be in force.

    Hypothetically, there are four possible events that can prevent MCS Act Amendment from happening:

    1) By citing the Gujarat High Court order to secure a stay from the Supreme Court on the 97th Amendment, and also amendment of various State Co-operative Acts

    2) By citing Gujarat HC order to secure a stay from Bombay High specifically on amendment of Maharashtra Co-operative Societies Act.

    3) Opposition leaders like Uddhav and Raj Thackeray decide to politicize the whole issue, and strenuously oppose the amendment in the state assembly and outside also, stalling the amendment indefinitely.

    4) Maharashtra government loses the will to amend the MCS Act, and allows the ordinance to lapse in July 2013 due to its inaction, without even re-issuing the ordinance for another six months.

    Until some combination of these four things happen, MCS Act amendment is very much on track.

    Regards,
    Krish

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