SC summons secretaries for discussion on cooperative problems

KATHMANDU, Dec 26: The Supreme Court (SC) has summoned all concerned bodies of the government for a discussion on whether to enact a new law or amend the existing laws to solve the problems appearing in cooperatives.

A joint bench of Justices Kumar Regmi and Nityanand Pandey has ordered a summon for a discussion on what the government agencies have done to solve the cooperative problem and the arrangements to be made in the future.

It has been stated in the order that the concerned secretaries of the respective ministries should be present in court for discussions and decisions regarding the plan, policies, and programs to resolve the issues observed in cooperative institutions, with the hearing scheduled for the upcoming January 20.

In the order issued by the joint bench on Sunday, the Secretary of the Office of the Prime Minister and Council of Ministers; the Secretary of the Ministry of Finance, the Secretary of the Ministry of Land Management Cooperatives and Poverty Alleviation; the Secretary of the Ministry of Law, Justice and Parliamentary Affairs, the Director of the Nepal Rastra Bank, Banks & Financial Institutions Regulation Department; the Registrar of the Department of Co-operative and member-secretary of the Office of the Problematic Cooperative Management Committee have been asked to personally attend the discussion.

Senior Advocate Surendra Bhandari and others have filed a writ petition in the SC, seeking the issuance of necessary orders for addressing the growing issues related to cooperatives across the country.

The writ petition says that there are no certain standards and procedures for declaring problematic cooperatives, and requests the court to issue an order for the formulation of necessary procedures regarding cooperative management.

The bench also ordered the designated ministries to send various details regarding cooperatives in writing form by January 17. The court has also asked for details of the progress of the work done in connection with the implementation of the Special Investigation Report on Misuse of Savings Funds of Co-operative Societies, 2081, prepared by the Parliamentary Special Committee.

The order mentioned, “The designated ministries are requested to get information from the Office of the Prime Minister and Council of Ministers and the Ministry of Land Management, Cooperatives and Poverty Alleviation Cooperatives.”

Documents requested by the court

The joint bench of the SC has requested written opinions from the Ministry of Land Management, Cooperatives and Poverty Alleviation and the Ministry of Law, Justice and Parliamentary Affairs regarding whether a new law should be made or the existing laws should be amended to address the issues currently seen in cooperative institutions.

The bench has ordered the designated minister to withdraw the progress report on the implementation of the system from the opposition Ministry of Finance including the budget statement for the fiscal year 2081/82, which includes point 146 which says “A regulatory body will be established to regulate savings and credit cooperative institutions” and point 147 which says “to refund up to Rs 500,000 of depositors' money, which is secured by collateral in the name of the directors of the cooperative with existing problems and members of their immediate family.”

What is the plan in case of having to return the deposit amount of the cooperative victims? The bench also has information regarding the provisions under Section 81 of the Cooperative Act for resolving the current issues observed in cooperatives.

The order reads, “The updated details of the actions taken so far regarding the formation of the Debt Recovery Tribunal as per Section 82, the establishment of the Stabilization Fund under Section 103, and the Deposit and Credit Guarantee Fund (DCGF) under Section 101 should be withdraw from the Ministry of Land Management, Cooperatives and Poverty Alleviation, the Ministry of Finance, and the Cooperative Department.”

Similarly, the bench has ordered the Central Office of Nepal Rastra Bank to submit the progress report of the inspection and monitoring of cooperatives to the court within January 17 in accordance with Section 95(2) of the Cooperative Act, 2074.

In the writ petition, it is mentioned that although the committee's jurisdiction is to resolve the issues of cooperative organizations that have written to the management committee regarding property management and liability payment, the committee has not yet been able to settle the responsibilities and amount of the cooperative victims.

The petition mentions that the real problems of the cooperative sufferers across the country have not been addressed due to the arbitrary declaration of certain cooperatives as problematic rather than based on specific indicators.

The petitioners have demanded that the law, regulations, and related laws be amended and revised to address the potential misuse of cooperative laws as the regulatory bodies have failed to fulfill their responsibilities. They have demanded an investigation be conducted into those involved in the embezzlement of cooperative deposit funds and facilitating the cooperatives to become problematic and departmental actions and legal proceedings be initiated against them.

The writ petitioners also demand that the Acts, Rules and Laws be amended and the Bill be submitted to parliament immediately and the proceedings be taken forward.

The writ petition mentions that the victim had to face various financial, social and health problems due to the fact that they have not yet received their deposited money back.

In the writ petition, it has also been requested to form a powerful and effective cooperative dispute resolution commission to ensure that the actual depositors receive their funds when refunded, to free from political pressure and influence and bringing all bodies related to cooperatives under its jurisdiction and directives.