Bhubaneswar/Cuttack, Sept. 6: Orissa High Court today issued an interim stay on an ordinance that the Naveen Patnaik government had promulgated to bring all 1,634 self-help co-operative societies in the state under its administration.
The state government had promulgated the Odisha Self-Help Co-operatives (Repeal) Ordinance, 2013, in June to rein in non-financial banking institutions, which operate under the garb of these companies.
The Opposition had then alleged that these societies had cheated nearly 20 lakh people across the state.
“Following public outcry, the government realised that the loopholes in the Odisha Self-Help Co-operative Act, 2001, had helped the societies cheat people. It had, therefore, decided to repeal the act,” said a senior official.
However, the Pandit Deendayal Multi-purpose Co-operative Society, Balasore, had moved court challenging the government’s order.
Acting on the petition, the division bench of Chief Justice C. Nagappan and Justice Indrajit Mahanty today issued the interim stay order on the ordinance on the ground that it was prima facie unconstitutional.
“The ordinance had caused the automatic death of 1,634 self-help co-operatives registered under the 2001 act, whereas the state government had not invested a single paisa,” the petitioner said.
According to officials, of the 1,634 societies, nearly 314 are in the direct credit business, while another 600-odd organisations, which are also engaged in the same business, branded themselves as multi-purpose co-operative societies.
The government in its report to governor S.C. Jamir stated that the fraudulent companies had cheated nearly 4.5 lakh people to the tune of Rs 4,000 crore.
The government brought the ordinance to dissolve the organisations, which failed to comply with its guidelines. It also gave the required power for the purpose to the co-operative societies’ registrar, who regulates their activities. Among the major co-operative societies that have cheated people are Artha Tatwa and Sea Shore groups.
On June 6, the state government issued the ordinance, abolishing the 2001 Act and bringing the 1,634 companies under the Odisha Co-operative Act, 1962. Later, the Assembly had passed a bill, which is pending with the governor.
Senior counsel Pitambar Acharya said: “Our basic contention was that the right to form a co-operative society had assumed the status of a fundamental right under Article 19(1)(C) after the 97th amendment to the Constitution in 2011. The ordinance had impinged upon this fundamental right of the members of the self-funded self-help co-operatives.”
Eminent co-operative activist Gurupada Nanda said: “The government should not have repealed the act in a hurry. There are many good societies working in rural areas for the uplift of the masses. However, the ordinance has caused havoc in the co-operative sector.”
Nanda said without repealing the 2001 Act, the government should have had amended it and streamlined the procedure of regulating the companies’ activities.
Former law minister Narasingh Mishra said: “The government suffers from legal bankruptcy. As they are hurriedly making laws, many of these are getting struck down by the high court.”