Cooperative Societies MCQ Questions & Answers

Statement 1 is incorrect: The item “Cooperative Societies” is a State Subject in the 7th Schedule under entry 32 of the State List in the Constitution of India. It confers power on the State legislatures to make laws pertaining to incorporation, regulation and the winding up of cooperative societies.

Statement 2 is correct: In a recent judgement the Supreme Court has clarified that the Centre’s role is restricted only to multi-State cooperatives. It said that, the subject matter of cooperative societies working within a state fell in the state list, and “belongs wholly and exclusively to the State legislatures to legislate upon”.

Statement 1 is correct. The right to form co-operative societies is a fundamental right. The 97th Constitutional Amendment Act of 2011 gave a constitutional status and protection to cooperative societies through following provisions:

1. It made the right to form co-operative societies a fundamental right

2. It included a new Directive Principle of State Policy on promotion of co-operative societies

3. It added a new Part IX-B in the Constitution which is entitled “The Co-operative Societies”

Statement 2 is correct. The Supreme court recently held that the co-operative societies come under the “exclusive legislative power” of State legislatures. The item “Cooperative Societies” is a State Subject in the 7th Schedule.

Statement 3 is incorrect. The provisions of Part IX-B shall apply to the multi-state co-operative societies subject to the modification that any reference to the “State Legislature”, “State Act” or “State Government” shall be construed as a reference to “Parliament”, “Central Act” or “Central Government” respectively.

Statement 1 is correct. A cooperative society is a voluntary association of persons, who join together with the motive of welfare of the members. The membership of a cooperative society is voluntary. A person is free to join a cooperative society, and can also leave anytime as per his desire.

There cannot be any compulsion for him to join or quit a society. Although procedurally a member is required to serve a notice before leaving the society, there is no compulsion to remain a member. Membership is open to all, irrespective of their religion, caste, and gender.

Statement 2 is incorrect. Cooperative societies are driven by the need to protect their economic interests.

Statement 3 is incorrect. A Co-operative Society cannot be solely formed as per the provisions of the Co-operative Societies Act, 1912. Though the Act is still in force, it has been specifically repealed in almost all the States and those States have their own Cooperative Societies Act. And the Cooperatives in states in India are usually formed under their respective Cooperative Societies Act.

Statement 4 is correct. The membership of a Co-operative Society is open to all those who have a common interest. A minimum of ten members are required to form a cooperative society. The Cooperative societies Act do not specify the maximum number of members for any co-operative society. However, after the formation of the society, the member may specify the maximum number of members.

The 97th Constitutional Amendment Act of 2011 gave a constitutional status and protection to co-operative societies. In this context, it made the following three changes in the constitution:

1) It made the right to form co-operative societies a fundamental right (Article 19). Hence, statement 1 is correct.

2) It included a new Directive Principle of State Policy on promotion of co-operative societies (Article 43- B). Hence, statement 2 is correct.

3) It added a new Part IX-B in the Constitution which is entitled “The Co-operative Societies” (Articles 243- ZH to 243-ZT). Hence, statement 3 is correct.

Statement 1 is correct. The 97th Constitutional Amendment Act of 2011 made the right to form cooperative societies a fundamental right. It also gave a constitutional status and protection to co-operative societies and included a new Directive Principle of State Policy on promotion of co-operative societies (Article 43- B2 ).

Statement 2 is incorrect. Part IX-B of the constitution provides that the state legislature may make provisions for the incorporation, regulation and winding-up of cooperative societies based on the principles of voluntary formation, democratic member control, membereconomic participation and autonomous functioning.

Statement 3 is correct. The audit report of the accounts of an apex co-operative society shall be laid before the state legislature. Every co-operative society shall be audited by an auditor or auditing firm, appointed by the general body of the co-operative society.

Statement 1 is incorrect. At present, cooperative societies come under the List II (State List) of the Constitution of India. They do not come under the the residuary powers of the Parliament of India. The state legislature has “in normal circumstances” exclusive powers to make laws with respect to any of the matters enumerated in the State List.

Statement 2 is incorrect. Part IX-B of the constitution provides that the state legislature may make provisions for the incorporation, regulation and winding-up of cooperative societies. Also, the Supreme Court in a recent judgement held that “co-operative societies” come under the “legislative power” of State legislatures. However, Parliament may legislate with respect to Multi State Cooperative Societies.

A co-operative society is a voluntary association of individuals having common needs who join hands for the achievement of common economic interest. Its aim is to serve the interest of the poorer sections of society through the principle of self-help and mutual help.

Statement 1 is correct. The 97th Amendment Act of 2011 added a new Directive Principle relating to cooperative societies. It requires the state to promote voluntary formation, autonomous functioning, democratic control and professional management of co-operative societies (Article 43B)

Statement 2 is incorrect. The 97th Constitutional Amendment Act of 2011 gave a constitutional status and protection to cooperative societies. It added a new Part IX-B in the Constitution which is entitled “The Cooperative Societies” (Articles 243-ZH to 243-ZT). Part IX-A in the Constitution is related to Municipalities.

Statement 3 is correct. Under article 19 (1)(c) of the Indian constitution all citizens have the right to form associations or unions or cooperative societies. The 97th Constitutional Amendment Act of 2011 added the word cooperatives societies in the above article. It includes the right to form political parties, companies, partnership firms, societies, clubs, organisations, trade unions or anybody of persons. It not only includes the right to start an association or union but also to continue with the association or union as such.