Depositors see red as co-ops go unchecked | india | Hindustan Times
  • Friday, Jul 20, 2018
  •   °C  
Today in New Delhi, India
Jul 20, 2018-Friday
-°C
New Delhi
  • Humidity
    -
  • Wind
    -

Depositors see red as co-ops go unchecked

THE RELUCTANCE of State Cooperatives Department to keep credit cooperatives and cooperative societies under check has sparked off protests from depositors. While the Department?s top officials, including former Registrar (the post is now vacant) Malay Shrivastav, have said that they have no powers to interfere in the affairs of cooperative institutions under Madhya Pradesh Swayatta Sahakarita Adhiniyam 1999, the depositors allege that it is a flimsy excuse.

india Updated: Feb 12, 2006 13:01 IST

THE RELUCTANCE of State Cooperatives Department to keep credit cooperatives and cooperative societies under check has sparked off protests from depositors. While the Department’s top officials, including former Registrar (the post is now vacant) Malay Shrivastav, have said that they have no powers to interfere in the affairs of cooperative institutions under Madhya Pradesh Swayatta Sahakarita Adhiniyam 1999, the depositors allege that it is a flimsy excuse.

“How can Registrar (cooperative societies) deny responsibility if he is granting registration to societies under 1999 Act? Under no circumstances can he shun accountability. It is highly irresponsible, if he says he doesn’t have powers,” an aggrieved depositor Saji Varghese, who has filed a complaint against constitutional breach at Indore Christian Credit Co-Op Limited, Indore, remarked.

He added that the Registrar was a discretionary authority and could draw powers from 1960 Act to ensure that cooperatives were being run as per law and that they maintain capacity to insulate personal assets from exposure to business risk.

A large number of depositors who had invested their life’s savings are faced with threat of losing their money, as cooperative after cooperative here shows signs of going into red.

With the Cooperative Department shirking its responsibility, the aggrieved depositors are forced to take recourse to law, which is expensive and time consuming. The Department, sources said, wants people to approach courts of law to seek directions for it to act.

The distressed depositors united under Gujarat Mercantile Credit Sahakarita Amanatdar Peedit Sangh are the latest victims, who, after having knocked the doors of over 25 government agencies, are filing a public interest litigation shortly to get back their dues.

The upset depositors of 30 other cooperatives are still confused over the course of action to follow even as they run from pillar to post to get back their money. These cooperatives have invested their money with Gujarat Mercantile Credit Sahakarita Limited (GMCSL), which has frozen withdrawals for past one year.

The post of Registrar is a punitive post, something similar to policeman who is line attached and therefore anyone who occupies it bides his time till he gets back to mainstream bureaucracy.

Worse, politicians and anti-social elements back most cooperative institutions in Indore district. As a result, Department officials avoid punitive measures against the defaulting bodies to keep their life and limb safe. The lawyers, too, stay away and are of very little help against cooperative bodies involving political heavyweights.

With the Department constantly avoiding action, aggrieved depositors of different institutions have formed associations to fight the cooperative and the office of Registrar.


Ambiguities in Act
MADHYA PRADESH Swayatta Sahkarita Adhiniyam 1999 has emanated from Model Act 1990, Andhra Pradesh Mutually Aided Cooperative Societies Act 1995, Referential Act 1997 and Madhya Pradesh Cooperative Societies Act 1960.

Reflecting on its shortcomings, an official notification states that the words and expression not separately explained in 1990 ruling carry the meaning of MP Cooperative Societies Act 1960.

There are two major differences between cooperative registered under 1960 and 1999 Act. Intervening directly, Registrar Cooperative Societies sends his deputy as presiding officer to hold elections of Board of Directors at cooperative societies registered under 1960 Act.

The polls in organisation under 1999 Act are exempted from such a provision. Even then, these entities are required to ensure that elections are held within prescribed norms. Likewise, 1960 societies undergo departmental audit while BoD of cooperative institutions governed by 1990 law generally hire chartered accountants for financial appraisal.