Analysis-The Provisions of Proposed H P Society Regd. Bill 2006

Analysis By-

Voluntary Action Network India
BB-5, First Floor
Greater Kailash Enclave – II
New Delhi – 110 048, India
Email : [email protected] :
Analysis of The Provisions

Chapter 1: The inclusion of diffusion of political knowledge is a relic of 1860 Act and has no place after India became a republic and enacted various laws like the Representation of Peoples Act, introduced a system of registration of political parties etc. Instead of specifying purposes under 3(i) to XII comprehensive expressions like poverty alleviation; social and economic development; empowerment of women, disadvantaged and weaker sections; social justice; promotion of scientific spirit; education; fraternity; tolerance etc. would have served the purpose better. The present bill may compound the problem as in trying to be specific, it has narrowed down the scope/purpose of forming a society. 2(j) section provides for ‘Registrar’. It seems Registrar of Cooperative Societies; State Government is also to function as Registrar of Societies. This is wrong as the functions are basically different. Cooperatives have suffered from too much of control of RCS. The extension of the same culture to non-profit making societies would be ruinous. In Section, 2(m) the concept of a ‘State Aided Society’ is wrong in principle; again a parallel may be drawn to state aided schools/colleges. NPO/VO’s are structurally different and will not lend themselves to a straight jacketed definition. The words occurring at the end of the definition “or any other agency located in India or abroad” lacks clarity. Does it refer to NRI funds routed through GoI? This should be scrapped in the interest of GO-VO partnership and spirit of voluntarism and is also contrary to the spirit of the policy for the voluntary sector, under consideration of the Centre.

Chapter II & III – no comments except 5(6) is fine as it meets a long standing problem. Equally 8(IV) will be welcome to NGO staff; and Section 14 which makes a society ‘a body corporate by the name’! It should have clarified the liability of the GB/EC members or ordinary members. Is this ‘limited’ in the sense it is understood in the Companies Act or otherwise? It needs a clear statement.

Chapter IV It has introduced strict provisions for holding of meetings of General Body, ABM, GB/EC meetings and decision making process. This will increase administrative costs of VOs as they have to function formally which is opposed to the spirit of VOs/NPOs as they have to ‘respond’ quickly to demands of public service & calamity relief for instance.

In Chapter V, the provisions seem to bring in both cooperative and election laws to bind down the members and make confusions only. For example section 31 (i) – does it apply if a member attracts this provision in his private capacity in a matter unconnected with the society? The emphasis is on regulation and control only.

Chapter VI introduces an unaccountable ‘control regime of the Registrar’ and section 35 (2) gives ‘overall responsibility’, huge in nature to Registrar, especially the power to conduct special audit. These provisions under Section 35 make the funding agencies less important and powerful than the Registrar as the latter, by exercising powers under this section could even look into policies and practices of donor agencies regardless of the source – foreign or domestic and is further empowered with the powers of a civil court under section 37.

Chapter VII Section 39 (i) is unnecessary and prone to misuse by the Government. This applies to section 41 also and together encroach upon the territory of funding departments of the Government as they have a say before the enquiry and hence the power to act suo moto is bad in law and violative of sound administrative practice. Equally impracticable is provision to section 41 laying down the appointment of an administrator which
is again an ‘import’ from cooperative law. The context is different and it may mean the death of the VO. It may be better to wind it up and the Government take over implementation of the scheme. All the provisions seem to be drastically designed to control, regulate and not to support VOs.

Chapter IX Section 50 (2) ousts the court’s jurisdiction which is contestable as the VOs are left with no legal remedy against any arbitrary action of the Registrar. This is bad in law and should be examined deeply.

This makes chapter X rigid and unfair.

Chapter XI makes a sad reading as provisions under 51 to 56 seem to stand on a hypothesis that VOs are a source of state revenues and hence fees are envisaged in every stage. Why? Is it the best way to promote charity? Section 57 is equally objectionable as it may create a division in the voluntary sector as some may seek patronage for a price. Since Income Tax Act provides substantive concessions and inducement to charity, why bring in the State Government as it is likely to be misused as ‘favoured’ societies may get a ‘free run’ which will destroy the spirit of voluntary action.

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