Article 243ZL Constitution: Supersession and suspension of board and interim management

Article 243ZL: Supersession and suspension of board and interim management

(1) Notwithstanding anything contained in any law for the time being in force, no board shall be superseded or kept under suspension for a period exceeding six months:

Provided that the board may be superseded or kept under suspension in a case—

(i) of its persistent default; or

(ii) of negligence in the performance of its duties; or

(iii) the board has committed any act prejudicial to the interests of the co-operative society or its members; or

(iv) there is stalemate in the constitution or functions of the board; or

(v) the authority or body as provided by the Legislature of a State, by law, under clause (2) of article 243ZK, has failed to conduct elections in accordance with the provisions of the State Act: Provided further that the board of any such co-operative society shall not be superseded or kept under suspension where there is no Government shareholding or loan or financial assistance or any guarantee by the Government:

Provided also that in case of a co-operative society carrying on the business of banking, the provisions of the Banking Regulation Act, 1949 (10 of 1949) shall also apply:

Provided also that in case of a co-operative society, other than a multi-State co-operative society, carrying on the business of banking, the provisions of this clause shall have the effect as if for the words “six months”, the words “one year” had been substituted.

(2) In case of supersession of a board, the administrator appointed to manage the affairs of such co-operative society shall arrange for conduct of elections within the period specified in clause (1) and handover the management to the elected board.

(3) The Legislature of a State may, by law, make provisions for the conditions of service of the administrator.

Questions on this article

2 questions in 7 of our papers cite Article 243ZL. Try these from the free papers:

1. The board of a multi-State co-operative society, which does not carry on banking business, is superseded by the competent authority on the ground of persistent default. The society has no Government shareholding, loan, financial assistance or guarantee by the Government. Under Article 243ZL read with Article 243ZR, the supersession is:
2. With reference to Sandeep S. Ghandat v. Reserve Bank of India (3 September 2026) on supersession of the board of a multi-State co-operative bank under Section 36AAA of the Banking Regulation Act, 1949, consider the following statements: 1. The RBI's power is not confined by the six-month limit on supersession in Article 243ZL(1). 2. Supersession may be extended from time to time, but the total period cannot exceed five years. 3. The RBI must consult the State Government before superseding the board of a multi-State co-operative bank. Which of the statements given above is/are correct?