THE MADHYA PRADESH SWAYATTA
SAHAKARITA ADHINIYAM, 1999[1] [Act
No. 2 of 2000] [29th December, 1999] An
Act to provide for the formation of co-opera live and conversion of a
cooperative society into the co-operative as self-reliant, self-help,
mutual-aid, autonomous, voluntary, democratic, business enterprises, owned,
managed and controlled by members for their economic and social betterment,
through the financially gainful provision of services which fulfil a common
core need felt by them, and for the matters connected therewith or incidental
thereto. Be
it enacted by the Madhya Pradesh Legislature in the Fiftieth Year of the
Republic of India, as follows :— (1) This Act may be called the Madhya Pradesh Swayatta
Sahakarita Adhiniyam, 1999. (2) It extends to the whole of the State of Madhya Pradesh. (3) It shall come into force on such date[2] as
the State Government may, by notification, appoint. (1) In this Act, unless the context otherwise requires,— (a) “arbitration council” means a group of three individuals
constituted by the general body of a co-operative for settlement of disputes
under Section 57 in accordance with the provisions of this Act and the
bye-laws; (b) “board” means by governing body of’ a co-operative by
whatever name called, to which the direction of the affairs of’ the
co-operative is entrusted under the bye-laws; (c) “bye-laws” means the bye-laws of a co-operative for the
time being in force and includes the amendment made therein from time to time; (d) “chief executive” means the individual, in paid or honorary
capacity, nominated or elected or appointed by the board from among members,
directors or others, in accordance with the bye-laws, who shall perform such
functions, have such responsibilities and exercise such powers as specified in
the bye-laws, and assigned by the board; (e) “common need” means the economic need which is common to
all persons who wishes to form a co-operative, or have taken membership in a
co-operative, and which is consistent with the objective of the co-operative; (f) “co-operative”, where used as a noun, means an autonomous
association of persons united voluntarily to meet their common need through a
jointly owned and democratically controlled enterprise registered under this
Act; (g) “co-operative society” means a society registered under the
Co-operative Societies Act; (h) “Co-operative Societies Act” means the Madhya Pradesh
Co-operative Societies Act, 1960 (No. 17 of 1961); (i) “co-operative business” means a business which intends to
function in accordance with the co-operative principles specified in Schedule
A; (j) “co-operative identity” means the statement of co-operative
identity specified in Schedule A; (k) “co-operative tribunal” means the Madhya Pradesh State
Co-operative Tribunal constituted under Section 77 of the Co-operative
Societies Act; (l) “core services” means the central services provided to
members, through which a co-operative intends It) meet the need common to all
members for the fulfilment of which the co-operative was formed, and includes
value adding services; (m) “Court” means the Civil Court of competent jurisdiction; (n) “deficit” means the next excess of expenditure over
income-arrived at, at the end of a financial year; (o) “deficit charge” means the amount collected from or debited
to the accounts of members, in proportion to the use or non-use of the services
of the co-operative, in accordance with the bye-laws and resolution of the
general body to meet deficit, if any, in whole or in part; (p) “delegate” means a person elected by group of individual
members to represent them in the general body of the co-operative in accordance
with the bye-laws of the co-operative; (q) “delegate general body” in relation to a co-operative means
all its delegates; (r) “delegate general body meeting” means a meeting of the
delegates, called and conducted in accordance with the provisions of this Act
and the bye-laws; (s) “director” means the director of the board; (t) “family” means a person, his spouse, his children dependent
on him and his other relatives dependent on him and jointly residing with him; (u) “general body” in relation to a co-operative, means all its
members; (v) “general meeting” means a meeting of the general body
called and conducted in accordance with the provisions of this Act and the
bye-laws; (w) “member” means a person who is admitted as a member of the
co-operative in accordance with the provisions of this Act and the bye-laws; (x) “officer-bearer” means President and Vice-President and
director elected by the board to any office of co-operative in accordance with
the bye-laws; (y) “potential member” means a person who does need the core
services being offered by a co-operative, and is eligible to be a member of
that co-operative, but has not yet applied for membership; (z) “primary co-operative” means a co-operative of which no
other co-operative is a member; (aa) “Registrar”
means the Registrar of co-operatives appointed under Section 3 of this Act; (bb) “Representative”
means a member nominated for the time being by a co-operative to represent its
interest at the time of promotion of a [3][principal
co-operative] and at a meeting of [4][principal
co-operative] to which the co-operative is affiliated; (cc) “[5][principal
co-operative]” means a co-operative whose members are co-operatives; (dd) “service” means
such facilities as are organised primarily for being provided by the
co-operative to members to meet its objective; (ee) “special
resolution” means a resolution of the general body which has the approval of
more than fifty per cent of the members having right to vote and not less than
two-third members present and noting at the general meeting; (ff) “surplus” means
the excess of income over expenditure, arrived at, at the end of a financial
year, after the payment of interest, if any, on share capital, and before the
payment of surplus refund, and allocation of reserves and other funds; (gg) “surplus refund”
means the refund from the surplus given to or credited to the accounts of,
members, in proportion to their use or non use of the services of the
co-operative in accordance with the bye-laws and resolution of the general
body. (2)
Words and expressions used in this Act
and not defined herein but defined in the Madhya Pradesh Co-operative Societies
Act, 1960 (No. 17 of 1961), and the rules made thereunder, shall have meaning
assigned to them in that Act and the rules made thereunder. (1) The State Government shall appoint a person to be the
Registrar of co-operatives for the State and may appoint one or more officers
of the following categories to assist him, namely :— (a) Additional Registrar of Co-operatives; (b) Joint Registrar of Co-operatives; (c) Deputy Registrar of Co-operatives; (d) Assistant Registrar of Co-operatives; (e) Such other categories of officers as may be specified by
the State Government in this behalf. (2)
The officers appointed to assist the
Registrar shall within such areas as the State Government may specify, exercise
such powers and perform such duties conferred and imposed on the Registrar by
this Act as the State Government may, by special or general order, direct. (3) The officers appointed to assist the Registrar shall be
subordinate to him and shall work under his general guidance supervision and
control. (1)
Subject to the provisions of this act,
a co-operative which intends to be self reliant, autonomous, voluntary,
democratic business enterprise constituted in accordance with the co-operative
principles specified in Schedule A or a co-operative established with the
object of facilitating the operations of such co-operatives, other than the housing
co-operative shall be registered under this Act: Provided
that no co-operative [6][which
has taken loan, share capital or Government guarantee from Government] shall be
registered as a co-operative under this Act. (2) No co-operative, other than a co-operative of which another
co-operative is a member, shall be registered under this Act unless it consists
of at least [7][ten]
persons competent to contract under Section 11 of the Indian Contract Act, 1872
(IX of 1872) and belonging to [8][ten]
different families. (3) For the purpose of registration, an application therefor
shall be submitted to the Registrar by hand or by registered post, signed by at
least [9][ten]
persons qualified under sub-section (2) who wish to form a primary co-operative
or by a duly authorised person on behalf of every such registered co-operative
which wish to form a [10][principal
co-operative]. (4) The person by whom or on whose behalf such application is
made, shall furnish such information in regard to the proposed co-operative as
the Registrar may require. (5) Every such application shall be accompanied by— (a) the original declaration signed by applicants expressing
commitment to the co-operative principles specified in Schedule A; (b) the original and four copies of the proposed bye-laws of
the co-operative as adopted by the applicants; (c) a true copy of the resolution passed at a meeting by the
applicants adopting the bye-laws; [11][(d) a list of names of all the applicants with their
photos and such proof of their permanent residential address as specified by
the Registrar;] (e) a copy of a
treasury challan in support of payment of registration fee calculated in
accordance with the provisions of sub-section (1) of Section 18. (6) The Registrar shall register the co-operative and also take
on record its bye-laws and communicate by registered post a certificate of
registration and the original bye-laws signed and sealed by him, within sixty
days from the date of submission or receipt of application for registration as
the case may be, to such person specified in the application for the purpose
subject to the fulfilment of the following conditions, namely :— (a) the application is in conformity with the requirements laid
down by this Act; (b) the object of the proposed co-operative is the economic and
social betterment of its members through the provisions of core services to
fulfil such common need as specified in the proposed bye-laws; (c) the proposed bye-laws are not inconsistent with the
provisions of this Act and are not against the aims and objects of the co-operative;
and (d) the registration fee has been paid. (7) If the conditions laid down in sub-sections (4) and (6) are
not fulfilled, the Registrar shall communicate by registered post the order of
refusal together with the reasons therefor, within sixty days from the date of
submission or receipt of application for registration, as the case may be, to
the person as specified in the application for the purpose : Provided
that no order of refusal shall be passed without giving an opportunity of being
heard to the applicant. (8) The certificate of registration signed and sealed by the
Registrar shall be conclusive evidence that the co-operative mentioned therein
is a co-operative duly registered under this Act, unless it is proved that the
registration of the co-operative has been subsequently cancelled. (9) No co-operative shall commence business unless it has
obtained a certificate of Registration under sub-section (7) and every member
of such co-operative carrying on business in contravention of this sub-section
shall be severally liable for all liabilities incurred in such business. (10) Where within sixty days of submission or receipt of the
application for registration, as the case may be, an applicant receives neither
the certificate of registration nor the order of refusal, the applicant may
move the Co-operative Tribunal for redressal. (1)
Notwithstanding anything contained in
the Co-operative Societies Act, the co-operative society other than a housing
co-operative society registered and functioning under the Co-operative
Societies Act, which intends to convert itself into co-operative, may apply for
conversion under this Act : [12][Provided that where the Central Government or State
Government have given share capital, loan or Government guarantee to a
co-operative society intending to convert itself into a swayatta co-operative
under this Act, the co-operative society shall, before applying for under this
Act, return such share capital, loan or guarantee to such Government, and such
Government shall accept such returned share capital, loan or guarantee as the
case may be.] (2)
(a) An application for conversion
shall be submitted to the Registrar by hand or by registered post, by the
elected board of such co-operative society which intends to convert itself into
a co-operative under this Act, on the basis of a resolution passed by a
majority of members present at a meeting of the general body to the
co-operative society making application under sub-section (1) (hereinafter in
this section referred to as such general body), called with atleast twenty days
notice provided that such meeting is attended by atleast twenty-five per cent
of total members or five hundred members, which ever is less. (b)
The person by whom or on whose behalf such application is made shall furnish
such information in regard to the co-operative society applying under
sub-section (1) or the proposed co-operative as the Registrar may require. (3) Every such application shall be accompanied by— (a) a true copy of the resolution of such general body
expressing commitment to the co-operative principles specified in Schedule A; (b) evidences to show that the society is not in possession of
any share capital, loan or guarantee [13][x
x x] from the Central or the State Government; (c) the original and four copies of the bye-laws of the
proposed co-operative as adopted by such general body; (d) a true copy of the resolution of such general body adopting
the bye-laws; (e) a true copy of the latest annual report and audited
statement of accounts of such co-operative society; (f) a true copy of the resolution of such general body along
with particulars regarding the writing off of accumulated losses, if any from
various reserves or by debting to the accounts of members as decided at the
meeting of such general body; (g) a list of members who attend such general body meeting; (h) a copy of the treasury challan in support of payment of
registration fee calculated in accordance with the provisions of sub-section
(1) of Section 18. (4) The Registrar shall register the co-operative and also take
on record its bye-laws and communicate by registered post a certificate of
registration and the original bye-laws signed and sealed by him, within ninety
days from the date of submission or receipt of application for registration, as
the case may be, to such person as specified in the application for the purpose
subject to the fulfilment of following, namely :— (a) the application is in conformity with the requirements laid
down by this Act; (b) the object of the proposed co-operative is the economic and
social betterment of its members through the provision of core services to
fulfil such common need as specified in the proposed bye-laws; (c) the proposed bye-laws are— (i)
not inconsistent with the provisions
of this Act; or (ii)
not against the aims and objects of
the co-operative; or (iii)
is in conformity with the co-operative
principles specified in Schedule A; and (d) the registration fee has been paid. (5) If the conditions mentioned in sub-sections (3) and (4) are
not fulfilled, the Registrar shall communicate by registered post the order of
refusal together with the reasons therefor, within ninety days from the date of
submission or receipt of application for registration, as the case may be, to
the person as specified in the application for the purpose : Provided
that no order of refusal shall be passed without giving an opportunity of being
heard to the applicant. (6) The certificate of registration signed and sealed by the
Registrar shall be conclusive evidence that the co-operative mentioned therein
is a co-operative duly registered under this Act, unless it is proved that the
registration of the co-operative has been subsequently cancelled. (7) Where within ninety days of submission or receipt of the
application for registration, as the case may be, an applicant receives neither
the certificate of registration nor the orders of refusal, the applicant may
move the co-operative Tribunal for redressal. (8) Where a co-operative is registered under sub-section (4),
it shall send to the Registrar of Co-operative Societies a copy of the
registration certificate under the Co-operative Societies Act, and a copy of
the registration certificate under this Act and the Registrar of Co-operative
Societies shall, within thirty days of the receipt of such information, delete
the name of such co-operative society from the register of co-operative
societies. (9) Where a co-operative is registered under sub-section (4),
the assets and liabilities, the rights and obligations, and members of the
applicant co-operative society shall become the assets and liabilities, the
rights and obligations, and the members of the co-operative registered under
this Act, and all transactions of the applicant co-operative society shall be
deemed to have been the transactions of the co-operative registered under this
Act. The
registration of a co-operative shall render it a body corporate by the name
under which it is registered having perpetual succession and a common seal with
power to acquire, hold and dispose of property, to enter into contracts, to
institute and defend suits and other legal proceedings and to do all other
things necessary for the purpose for which it was constituted. (1) A co-operative, shall have a set of bye-laws, and the
affairs of the co-operative shall be managed in accordance with the terms,
conditions and procedure specified in the bye-laws. (2) Subject to the provisions of this Act, the functioning of
every co-operative shall be regulated by its bye-laws. (3) The bye-laws may contain such matters as decided by the
general body and shall be specific on all matters listed in Schedule B. (1) A co-operative may decide, by a special resolution, to
amend he provisions of its bye-laws and for that purpose the text of proposed
amendment with reasons therefor shall be sent to each member, along with the
notice of the general meeting at which the proposed amendment is to be
discussed. (2) A copy of an amendment of the bye-laws shall be forwarded
by the co-operative by registered post to the Registrar within a period of
thirty days from the date of the general meeting at which the resolution was
passed. (3) A copy of amendment forwarded to the Registrar shall be
signed by the President and two directors and shall be accompanied by the
following particulars :— (a) a copy of the resolution adopting the amendment; (b) the date of the general meeting at which the amendment was
adopted; (c) the date on which the amendment comes into force; (d) a list of members who attended such general meeting and a
list of members who voted for or against the resolution in such general
meeting. (4) The Registrar shall take on record the amendment of the
bye-laws received under sub-section (2) subject to the fulfilment of the
following conditions, namely :— (a) the amendment is not inconsistent with the provisions of
this Act or any of its existing bye-laws or is not against the aims and objects
of the co-operative; and (b) the amendment is in conformity with the co-operative
principles specified in Schedule A. (5) The Registrar shall, by order, refuse to register the
amendment if any of the conditions specified in sub-section (4) is not
fulfilled : Provided
that no such order of refusal shall be passed without giving a reasonable
opportunity to the co-operative to reconsider the amendment within the period
specified by him. (6) The Registrar— (i)
may after considering the reply
received in response to the opportunity given under sub-section (5), refuse
amendment; and (ii)
shall, if no reply is received within
the period specified by him under the proviso to sub-section (5), refuse
amendment; and he shall communicate such decisions within thirty days of the
receipt of such reply or the expiry of the period referred to in clause (ii),
as the case may be. (7) An appeal against the order of refusal shall lie to the
Co-operative Tribunal for redressal. (1) The full name of every co-operative shall contain the word
“co-operative” or its equivalent in any Indian language. (2) A co-operative shall not be registered with the same name
as another co-operative business already registered under this Act or the
Co-operative Societies Act : Provided
that where the bye-laws of a [14][principal
co-operative] require that all its members which are co-operatives to use a
common name, the name of each such member co-operative shall have its location
or other distinguishing feature included in the name at the beginning or end of
the common name. (3) Every co-operative shall display its full name in legible
characters in a conspicuous position :— (a) at every office or place at which it carries on business; (b) in all notices and other official publications; (c) on all its contracts, business letters, orders for goods,
invoices, statements of accounts, receipts and letters of credit; and (d) on all bills of exchange, promissory notes, endorsements,
cheques and orders for money signed on its behalf. (4) Every co-operative shall display its full name in legible
characters on its common seal. (5) A co-operative registered with limited liability under this
Act shall have as a suffix to its name the word “limited” or its equivalent in
any Indian language. (6) Nothing in sub-section (2) shall prevent a co-operative
displaying more conspicuously than the full name, any shorter name by which it
is popularly known and which, too, is included in the bye-laws. (7) A co-operative may, by an amendment of its bye-laws, change
its name; before changing the name the co-operative shall send notice of its
intention to change its name to the Registrar under this Act and the Registrar
under the Co-operative Societies Act, along with the proposed name, and the
Registrar shall, within fifteen days of receiving such notice inform the
co-operative if such name is already in use by another co-operative or
cooperative society, as the case may be. (8) Where a co-operative changes its name, the Registrar enter
the new name of the co-operative in the register of co-operatives in place of
the former name on receipt of a copy of amendment of bye-laws under sub-section
(2) of Section 8 and issue a certificate to that effect. (9) The change of name of a co-operative shall not affect any
rights obligations of the co-operative or any of its members or past members or
deceased members or render defective any legal proceedings by or against it,
and any legal proceedings which might have been continued or commenced by or
against the co-operative by its former name shall be so continued or commenced
by its new name. (10) A prominent co-operative which changes its name shall
publicise such change-in name in a prominent newspaper in the district in which
its head office is located. [15][(1) Every co-operative shall have the same registered
address which has been mentioned in its bye-laws and the co-operative shall
carry on day to day business at its registered address mentioned in the
bye-laws and shall maintain records pertaining to the co-operative at its
registered address.] (2) Every
co-operative shall display the full address of its head office in legible
characters in a conspicuous position :— (a) at every office or place at which it carries on business; (b) in all notices and other official publications; (c) on all its contracts, business letters, orders for goods,
invoices, statements of accounts, receipts and letters of credit; and (d) on all bills of exchange, promissory notes, endorsements,
cheques and order for money signed on its behalf. [16][(3) The Board may, by resolution, change the address of
its head office and it shall give notice of such change by registered post to
its members, creditors, the Registrar and to any principal co-operative to
which it is affiliated, within fifteen days of the passing of such resolution.] (4) The Registrar
shall, within fifteen days of receiving notice of change of address from a
co-operative take on record, in the register of co-operatives, the changed
address of the head office of a co-operative. [17][(4-A) If the co-operative does not— (i)
communicate the changed address to the
Registrar; or (ii)
carry on the business at its
registered address; or (iii)
maintain the records at its registered
address, the
Registrar may impose penalty not exceeding ten thousand rupees on the Officer
responsible after giving a reasonable opportunity of being heard.] (1) A co-operative may, by special resolution, decide to
transfer its assets and liabilities, in whole, to any other co-operative which,
by special resolution, agrees to receive such assets and liabilities. (2) Where special resolutions are passed sub-section (1), each
co-operative shall give notice thereof together with a copy of the resolution
passed by it to all its members and creditors, and any member other than those
who voted in favour of the proposed transfer of assets and liabilities, or the
proposed agreement to receive such assets and liabilities, as the case may be,
and any creditor shall, during a period of thirty days from the date of service
of notice upon him, have the option of withdrawing his shares, deposits or
loans from the co-operative, as the case may be, subject to the discharge of
his obligations to the co-operative. (3) Any member or creditor who fails to exercise the option
within the period specified in sub-section (2) shall be deemed to have assented
to the transfer or receipt of assets and liabilities as the case may be. (4) The special resolution passed under sub-section (1) shall
not take effect until :— (a) all claims of the members and creditors of each
co-operative who have exercised the option under sub-section (2) have been met
in full or otherwise satisfied; and (b) information of the intended transfer of assets and
liabilities and settlement of claims of members and creditors of co-operatives
concerned is sent to the Registrar and his acknowledgement is obtained. (5) When a co-operative transfers the whole of its assets and
liabilities to any other co-operative under this section, the registration of
the co-operative transferring the assets and liabilities shall stand cancelled
and it shall be deemed to have been dissolved and shall cease to exist as a
corporate body, and the Registrar shall delete the name of such co-operative
from the register of co-operatives. (1) A co-operative may, by special resolution, decide to divide
itself into two or more co-operatives. (2) Where special resolution is passed under sub-section (1),
the co-operative shall give notice thereof together with a copy of the
resolution passed by it to all its members and creditors and any member other
than those who voted in favour of the proposed division and any creditor shall,
during a period of thirty days from the date of service of notice upon him have
the option of withdrawing his shares, deposits or loans, from the co-operative
as the case may be, subject to the discharge of his obligations to the
co-operative. (3) Any member or creditor who fails to exercise the option
within the period specified in sub-section (2) shall be deemed to have assented
to the division. (4) The special resolution passed, under sub-section (1) shall
not take effect until :— (a) all claims of the members and creditors of the co-operative
who have exercised the option under sub-section (2) have been met in full or
otherwise satisfied; (b) information of the intended division and settlement of
claims of members and creditors is sent to the Registrar and his acknowledgment
of receipt of the information is obtained; and (c) the certificates of registration and the original bye-laws
of the resultant co-operatives, signed and sealed by the Registrar, are issued
under sub-section (6) of Section 4. (5) When a co-operative divides itself into two or more
co-operatives under this section, the registration of such co-operative shall
stand cancelled and it shall be deemed to have been dissolved and shall cease
to exist as a corporate body and the Registrar shall delete the name of such
co-operative from the register of co-operatives. (6) When a co-operative divides itself into two or more
co-operatives, each member who has assented or deemed to have assented to the
division shall be deemed to have become a member of that newly formed
co-operative to which his interests were transferred, in accordance with the
scheme of division approved by the general body of such co-operative
notwithstanding anything contained in this Act. (1) Any two or more co-operatives may, by special resolutions,
decide to amalgamate themselves and form a new co-operative. (2) Where special resolutions are passed under sub-section (1),
each co-operative shall give notice thereof together with a copy of the
resolution passed by it to all its members and creditor and any member other
than those who voted in favour of the proposed amalgamation. Any creditor
shall, during a period of thirty days from the date of service of notice upon
him, have the option of withdrawing his shares, deposits or loans from the
co-operative, as the case may be, subject to the discharge of his obligations
to the co-operative concerned. (3) Any member or creditor who fails to exercise the option
within the period specified in sub-section (2) shall be deemed to have assented
to the amalgamation. (4) The special resolutions passed under sub-section (1) shall
not take effect until :— (a) all claims of the members and creditors of each
co-operative who have exercised the option under sub-section (2) have been met
in full or otherwise satisfied; (b) information of the intended amalgamation and settlement of
claims of members and creditors is sent to the Registrar and his acknowledgment
is obtained; and (c) the certificate of registration and the original bye-laws
of the co-operative which is formed as a result of amalgamation, signed and
sealed by the Registrar, is issued under sub-section (6) of Section 4. (5) When two or more co-operatives amalgamate themselves into a
new co-operative under this section, the registration of the co-operatives so
amalgamated, shall stand cancelled and they shall be deemed to have been
dissolved and shall cease to exist at corporate bodies, and the Registrar shall
delete the names of the co-operative so amalgamated from the register of
co-operatives. (6) When two or more co-operatives amalgamate themselves into a
new co-operative under this section, all the members of the co-operatives who
have assented or deemed to have assented to the amalgamation shall be deemed to
have become members of the new co-operative notwithstanding anything contained
in this Act. (1) A co-operative may, by special resolution, decide to merge
itself into any other co-operative which, by special resolution, agrees to such
merger. (2) Where special resolutions are passed under sub-section (1),
each co-operative shall give notice thereof together with a copy of the
resolution passed by it to all its members and creditors, and any member other
than those who voted in favour of the proposed merger and any creditor shall,
during a period of thirty days from the date of service of notice upon him,
have the option of withdrawing his shares, deposits or loans from the
co-operative, as the case may be, subject to the discharge of his obligations
to the co-operative concerned. (3) Any member or creditor who fails to exercise the option
within the period specified in sub-section (2) shall be deemed to have assented
to the merger. (4) The special resolutions passed under sub-section (1) shall
not take effect until:— (a) all claims of the members and creditors of each
co-operative who have exercised the option under sub-section (2) have been met
in full or otherwise satisfied; and (b) information of the intended merger and settlement of claims
of members and creditors is seat to the Registrar and his acknowledgment is
obtained. (5) When a co-operative merges itself into any other
co-operative under this section, the registration of the merged co-operative
shall stand cancelled and it shall be deemed to have been dissolved and shall
cease to exist as a corporate body, and the Registrar shall delete the name of
such co-operative from the register of co-operatives. (6) When a co-operative merges itself into any other
co-operative under this section, the members of the first co-operative who
assented or deemed to have assented to the merger, shall be deemed to have
become the members of the second co-operative notwithstanding anything
contained in this Act. A
resolution passed under sub-section (1) of Section 11 or sub-section (1) of
Section 12 or sub-section (1) of Section 13 or sub-section (1) of Section 14
shall be sufficient conveyance to vest the assets and liabilities of each
affected co-operative in the resulting co-operative or co-operatives concerned,
such vesting being subject only to the provisions of the scheme of transfer of
assets and liabilities or of division of co-operative or of amalgamation of
co-operatives or of merger of co-operative as the case may be. Explanation
:—For the purpose of this section— (a) “affected co-operative” means a co-operative which decides
in any of the manners specified in Section 11, 12, 13 or 14; (b) “resulting co-operative” shall have the meaning assigned to
it in Section 17. A
co-operative registered or a co-operative society converted as co-operative
under this Act intending to convert into a co-operative society may apply to
the Registrar in accordance with the provisions of Co-operative Societies Act. (1) The reorganisation of the co-operatives under Section 11,
12, 13 or 14 shall not, in any manner whatsoever affect any right or obligation
of the resulting co-operative or co-operatives or render defective any legal
proceedings by or against the co-operative or co-operatives and any legal
proceedings that might have been continued or commenced by or against the
co-operative or co-operatives, as the case may be, before the reorganisation
may be continued or commenced by or against the resulting co-operative or
co-operatives. (2) Every resulting co-operative shall have such structure,
property, powers, rights, interests, authorities, duties and obligations as may
be specified in the scheme of :— (i)
transfer of assets and liabilities
under Section 11; or (ii)
division of co-operative under Section
12; or (iii)
amalgamation of co-operatives under
Section 13; or (iv)
merger of co-operative under Section
14, as
the case may be, and such scheme may contain such consequential, incidental and
supplemental provisions as may be considered necessary to give effect to such
scheme. Explanation:—
For the purpose of this Section “resulting co-operative” means a co-operative— (i)
to which the assets and liabilities of
a co-operative transferring the assets and liabilities are transferred in whole
under Section 11; or (ii)
which is formed as a result of
division under Section 12; or (iii)
which is formed as a result of
amalgamation under Section 13; or (iv)
which is formed as a result of merger
under Section 14. (1)
Registration fee amounting to one
percent of the authorised equity capital of the proposed cooperative, subject
to the minimum of rupees one hundred and maximum of rupees five thousand, shall
be charged for registration of each co-operative : Provided
that the fee shall be rupees two hundred in the case of such co-operatives
which do not intend to have any equity capital. (2)
Subject to the provisions of
sub-section (2) and sub-section (6) of Section 53 the Registrar may, by order,
prescribe a scale of fee to be paid by co-operatives and others for various
services rendered by him under this Act. (1) Any person who needs the services of a co-operative,
expresses willingness to accept the responsibilities of membership meets such
other conditions as may be specified in the bye-laws of the co-operative, and
is in a position to use the services, may seek membership and if the
co-operative is in a position to extend its services to the applicant, it may
admit him as a member. (2) Every applicant for membership and every member of a
cooperative shall keep each co-operative of which the person is a member,
informed of membership in other co-operatives, and in case of conflicting
membership, the board may, by resolution, refuse admission under Section 21 or
terminate from membership under Section 24 as the case may be : Provided
that no such resolution to refuse admission shall be passed without giving the
applicant as the case may be, a reasonable opportunity to make representation
to the board as to why he should not be refused admission. Explanation
:— For the purpose of this sub-section, the expression “conflicting membership”
means the membership of the common objective co-operatives functioning within
the jurisdiction of a co-operative of which the membership is sought. No
person shall be eligible for admission as member and any member shall cease to
be a member of a co-operative, if he incurs disqualification of membership
prescribed in the bye-laws. (1) The board may admit a person for membership in accordance
with the procedure laid down in the bye-laws within sixty days from the date of
receipt of application for membership if he is eligible for membership or
refuse admission to the applicant if he is not eligible for membership and communicate
the same to the applicant by registered post. (2) Where admission is refused, the decision with the reasons
therefor shall be communicated by registered post to such applicant within
fifteen days of the date of the decision. If nothing is communicated within the
period of sixty days under sub-section (1) the admission shall be deemed to
have been refused by the board. (3) Where an applicant has been refused or deemed to have
refused admission by the board, the applicant may appeal to the Arbitration
Council within thirty days of— (i)
the communication of such decision
under sub-section (2); or (ii)
the expiry of the period of sixty days
referred to in sub-section (2): Provided
that no decision of refusal of admission shall be taken by the Arbitration Council
without giving an opportunity of being heard to the applicant. (1) Subject to the provisions of sub-section (2) of Section 48,
a member may at any time withdraw from membership in a co-operative in
accordance with the procedure laid down in the bye-laws. (2) The withdrawal from membership shall nonetheless require
the person to fulfil such obligations as were under taken or assumed as a
member, under the provisions of this Act, the bye-laws or any agreement. (1) If any person having been admitted as a member of a
co-operative dies or subsequently becomes subject to any of the
disqualification specified in the bye-laws shall cease to be a member of the
co-operative. (2) Every co-operative shall inform, in the event of the death
of the member, the nominee of the member, and in every other instance, the
member, about the cessation of membership, for the settlement of accounts. (1) The board may, by a resolution passed by three-fourth
majority of the directors present and voting at a meeting held for the purpose,
terminate the membership of a member if he— (a) intentionally does any act likely to injure the credit of
the co-operative or bring it to disrepute; or (b) wilfully deceives the co-operative; or (c) has acted adversely to the objects or his act is
detrimental to the interests of the co-operative; or (d) persistently makes default in payment of his dues or fails
to comply with the provisions of the bye-laws; or (e) having been admitted as a member subsequently becomes a
member of any other common objective co-operative functioning within the
jurisdiction of the co-operative of which he is a member : Provided
that no such resolution shall be passed without giving the member concerned a
reasonable opportunity to make representation at the board meeting. (2) Any member aggrieved by the resolution passed under
sub-section (1) may appeal to the Arbitration Council within thirty days of the
communication of such resolution. (3) No member of a co-operative whose membership has been
terminated under sub-section (1) shall be eligible for re-admission as a member
of the co-operative for a period as may be specified in the resolution but not
exceeding five years. (1) Every co-operative shall maintain a register of members.
The name of every person admitted as a member of the co-operative shall be
entered in the register along with such particulars as may be deemed necessary
by the board. (2) The name of a person— (i)
whose admission is refused under
Section 21; or (ii)
who has withdrawn from membership
under Section 22; or (iii)
who ceased to be a member under
Section 23; or (iv)
whose membership has been terminated
under Section 24 shall be deleted from the register of members : Provided
that the name of a person referred to in clause (i) or clause (iv) shall not be
deleted from the register of members till the decision of the Arbitration
Council in appeal preferred under sub-section (3) of Section 21 or under
sub-section (2) of Section 24 as the case may be. (3)
The register maintained under
sub-section (1) shall be prima facie evidence of the date on which any person
was admitted to the co-operative as a member and of the date on which he ceased
to be a member. (1) Every co-operative shall include in its budget annually,
provision for expenses on member and potential member, education and training
of staff and directors for the development of their co-operative in accordance
with the co-operative principles specified in Schedule A and practices of
co-operative. (2) Any balance under the budget head provided for under
sub-section (1) shall be taken at the end of the year into a co-operative
education fund, and may be used only for the purpose of educating and training
of staff and directors in according with co-operative principles specified in
Schedule A and practices of co-operation. (1) No member of a co-operative shall exercise the right of a
member, including the right of vote, unless he has made such payment to the
co-operative in respect of membership or has acquired and continues to have
such interest in the co-operative as may be specified in the bye-laws. (2) Every financial year, within twenty days of closure of the
previous financial year, the Chief Executive shall prepare a list of members
with the right of vote, and a list of members without the right of vote, valid
for the current financial year. The list shall be affixed on the notice board
of the head office of the co-operative for information of all members, and any
member, not satisfied with the specific instances of inclusion or non-inclusion
of members in the lists, may appeal to the board within ten days from the date
of the affixation of the lists on the notice board, for re-examination of the
records, and the board shall, within forty-five days of closure of the previous
financial year, review the lists, finalise it, and have it affixed on the
notice board of the head office of it the co-operative. (1)
In primary co-operatives, members
shall have equal voting rights (one members, one vote). Similarly in case
of [18][principal
co-operatives] the representative of such co-operatives shall have same voting
rights (one representative one vote). Every member of a co-operative or the
representative referred herein shall exercise his vote in person and in the
manner specified in the bye-laws and no member or representative shall be
permitted to vote by proxy : Provided
that a person shall have been a member for at least one full financial year,
before being eligible to vote : Provided
further that the condition of one year membership shall not apply to the
members who join at registration or at any time after the registration of a
co-operative but before the first financial year ending. (2)
Every member of a co-operative shall
exercise his vote in the manner specified in the bye-laws. (1)
A co-operative may be registered with
limited or unlimited liability : Provided
that unless the State Government, by a general or special order otherwise
directs, the liability of a co-operative of which another co-operative is a
member shall be limited. Explanation
:— For the purpose of this sub-section— (a) “cooperative with limited liability” means a co-operative
in which the liability of its members for the debts of the co-operative is
limited by its bye-laws, to such form and extent as they may undertake to
contribute to any deficit in the assets of the co-operative, in the event of
its being wound up; and (b) “co-operative with unlimited liability” means a
co-operative the members of which are, in the event of its being wound up,
jointly and severally liable for and in respect of all its obligations, to
contribute to any deficit in the assets of the co-operative. (2) Where a co-operative by special resolution amends its
bye-laws to change the form and extent of liability, of its members it shall
give notice thereof together with a copy of the amendment to its members and
creditors and any member other than those who voted in favour of the proposed
change of liability and any creditor shall, within a period of thirty days from
the date of service of notice upon him, have the option of withdrawing his
shares, deposits or loans from the co-operative as the case may be subject to
the discharge of his obligations to the co-operative. (3) Any member or creditor who fails to exercise the option
within the period specified in sub-section (2) shall be deemed to have assented
to the change of liability. (4) An amendment passed under sub-section (2) shall not take
effect until— (a) all claims of the members and creditors of the co-operative
who have exercised the option under sub-section (2) have been met in full or
otherwise satisfied; and (b) notice of the amendment of the bye-laws of the co-operative
and information of settlement of claims of members and creditors is sent to the
Registrar and his acknowledgment is obtained. (5) Subject to the provisions of sub-section (6), the liability
of a past member or of the estate of a deceased member of a co-operative for
the debts of the co-operative as they stood— (a) in the case of a past member, on the date on which he
ceased to be a member; and (b) in the case of a deceased member, on the date of his death;
shall continue for a period of two years from such date. (6) Where a co-operative is ordered to be dissolved under any
provision of this Act, the liability of a past member or of the estate of a
deceased member, who ceased to be a member or died during the period of two
years immediately preceding the date of order for dissolution, shall continue
until completion of the entire liquidation proceedings, but such liability
shall be limited only to the debts of the co-operative as they stood on the
date of cessation of his membership or his death, as the case may be. (1) There shall be a general body for every co-operative
consisting of all the members of such co-operative. (2) Where the general body of a co-operative decides that the
size, spread or types of its membership requires a representative body of
delegates for more effective decision making, its bye-laws shall provide for a
smaller body called delegate general body elected from the members, in the
annual general meeting in accordance with the bye-laws to exercise such powers
and to discharge such duties of the general body as may be specified in the
bye-laws. (3) Unless the context otherwise requires, any reference in
this Act to the general body shall apply to the delegate general body where it
exists. (4) Subject to the provisions of this Act and the bye-laws, the
ultimate power of a co-operative shall vest in the general body. (5) Any power, function or responsibility, falling within the
scope of a co-operative as a corporate body, which has not been specifically
entrusted by this Act or the bye-laws, to any authority of the co-operative,
may be dealt with by the general body, on a reference by the board. (1) The following matters, among such other matters as are
considered necessary by the board, shall be dealt with by the general body at
its annual general meeting, namely:— (a) election, if fallen due, of the directors or delegates; Explanation
:— Election of the directors or delegates shall be deemed to have fallen due,
if the term of such board or delegate general body comes to an end within a
period of three months from the date of the annual general meeting. (b) consideration of the long term plan and budget, when
required; (c) consideration of the annual operational plan and budget for
the current financial year; (d) consideration of the annual report of activities for the
previous financial year; [19][(e) consideration of audited financial statements of
accounts, the auditor’s report relating to the previous financial year and
compliance report along with the action taken on it;] (f) consideration
of the report on deviations, if any, from the approved budget relating to the
previous financial year; (g) disposal of
surplus, if any, of previous financial year; (h) management of
deficit, if any, of previous financial year; (i) creation of
specific reserves and other funds; (j) review of
actual utilisation of reserves and other funds; (k) review of the
report on the attendance at meetings by directors; (l) review of the
use of the co-operative’s services by the directors; (m) review of
remuneration paid to any director or member of any committee or internal
auditor in connection with his duties in that capacity or his attendance at
concerned meetings; (n) review of
quantum and percentage of services provided to non-members vis-a-vis services
provided to the members; (o) report of activities
and accounts related to member education and director and staff training (p) consideration of
any other matter which may be brought before the meeting of the general body in
accordance with the bye-laws. (2) The following matters, among such other matters as
considered necessary by the board, or which are specifically assigned to the
general body under any other provision of this Act, may be dealt with by the
general body at its annual or any general meeting, namely :— (a) amendments of bye-laws; (b) removal of directors; (c) membership of the co-operative in [20][principal
co-operative]; (d) partnership with other co-operatives; (e) amalgamation, division, merger, transfer of assets and
liabilities; (f) dissolution of the co-operative; (g) consideration of the Registrar’s report of inquiry or
reasons for the non-completion of the inquiry. (3) If the bye-laws of a co-operative provide for election of
all or more directors on territorial basis, such director shall be elected from
the areas, in a meeting of the members of that area in accordance with the
provisions of the bye-laws on a date prior to that of annual general meeting.
The result thereof shall be affixed on the notice board of the head office of
the cooperative and also at the place of the annual general meeting prior to the
commencement of the proceedings of the annual general meeting. (1)
The board may, at any time, call a
general meeting of the members of the co-operative : Provided
that one such meeting known as annual general meeting shall be held within one
hundred and fifty days of the closure of the financial year to consider or to
approve, among other matters, the returns to be filed with, and the information
to be furnished to the Registrar. (2) The board shall call a special general meeting and shall be
bound to do so within thirty days of the date of receipt of a written
requisition— (a) signed by not less than twenty-five per cent of the-
members having right to vote; or (b) from the Registrar. (3) Such requisition shall contain the reasons why the meeting
is felt necessary and the proposed agenda, and no subject other than the
subjects included in the proposed agenda shall be discussed at the special
general meeting. (4) If the board fails to hold an annual general meeting under
sub-section (1) or a special general meeting on requisition under sub-section
(2) within the period specified therein all directors shall cease to be
directors on the date of expiry of the said specified period. (5) All directors shall cease to be directors on the date of
the annual general meeting, if the audited annual financial statement of
accounts and annual report of activities for the previous financial year were
not sent to each member along with the notice to attend the annual general
meeting under the certification of posting at which the report and accounts are
to be considered by the general body. (6) Any meeting of the general body may, with the consent of
the majority of the members present, be adjourned from time to time to a later
hour on the same day or to any other date, but no business other than that left
over at the adjourned meeting shall be transacted at the next meeting :— A
notice of such adjournment posted in the head office of the cooperative on the
day on which the meeting is adjourned shall be deemed sufficient notice of the
next ensuring meeting. (7) The quorum for a general meeting shall be specified in the
bye-laws, but shall not be less than ten per cent of the members eligible to
vote at the general meeting. (8) If at any time in a meeting there is no quorum the
presiding authority shall adjourn it to such time or date as it thinks fit and
announce the same at once; and the business set down for the meeting shall be
brought forward at the subsequent meeting whether at such meeting there is a
quorum or not. (9) No business other than the business fixed for the original
meeting shall be transacted at such subsequent meeting. (10) A notice of such adjournment posted in the head office of
the co-operative on the day on which the meeting is adjourned shall be deemed sufficient
notice of the next subsequent meeting. (11) The quorum for a delegate general body meeting shall not be
less than twenty-five per cent of the delegate eligible to vote at the delegate
general meeting. If at any time in the meeting of delegate general meeting,
there is no quorum, the procedure laid down in sub-sections (6) to (10) shall
be followed. (12) At the meeting to the general body, the President, if
present, shall prescribe. If the President is absent from the meeting of the
general body the Vice President shall preside. If both the President and Vice
President are absent from the meeting of the general body, the members present
shall choose one of them to preside. (1)
There shall be a Board of Directors
for the management of every co-operative registered under this Act. The
Directors shall be elected in accordance with the provisions of the bye-laws.
Subject to the provisions of sub-section (4) of Section 30 the management of
every co-operative constituted in accordance with the provision of this Act and
the bye-laws shall vest in a board : Provided
that in the case of a co-operative newly registered under this Act, the persons
who have signed the application for the registration of the co-operative may
appoint a promoter board, for a period not exceeding one year from the date of
registration, to direct the affairs of the co-operative and it shall cease to
function as soon as a regular board is constituted in accordance with the
provisions of this Act and the bye-laws : Provided
further that in the case of a Co-operative Society registered under the
Co-operative Societies Act and the elected members of its board, whose term has
not expired at the time of registration of co-operative under Section 5 shall
be deemed to be the promoter board, with the same term and responsibilities as
in the first proviso for a period not exceeding one year from the date of
registration. (2) The promoter board appointed under the first provision to
sub-section (1) or deemed to be promoter board under the second proviso
thereto, as the case may be, shall conduct the election of directors within the
period mentioned therein. (3) Every director while exercising the powers and discharging
duties shall :— (a) act honestly and in good faith and in the best interests of
the co-operative; and (b) exercise such due care, diligence and skill as a reasonably
prudent person would exercise in similar circumstances. (4) A director who is guilty of misappropriation, breach of
trust or dishonestly resulting in loss or shortfall in revenue of the
co-operative shall be personally liable to make good that loss or shortfall,
without prejudice to any criminal action to which the director may be liable
under any law. (1) There shall be a President and a Vice President in a
co-operative to be elected by the board from amongst its directors in
accordance with the provisions of the bye-laws. The term of President and
Vice-President elected by the board shall be coterminous with the term of the
Board. The board shall at the time of election of President and Vice-President
also elect representative who shall represent it in other co-operative and the
representative so elected shall not be withdrawn by the board till the next
elections of the board. (2) Any casual vacancy in the office of the President or
Vice-President or representative shall be filled in by the board in accordance
with the provisions of the bye-laws and the President or Vice-President or
representative so elected shall hold office for the unexpired term of his
predecessor. (3) The Vice-President may resign his office at any time by
notice in writing to the President and the President may resign his office at
any time by notice in writing to the Vice President. (4) The board may by a resolution passed by three-fourth
majority of the directors present and voting at a meeting held for the purpose,
remove the President or Vice-President on any of the grounds mentioned in
sub-section (1) of Section 24. Such meeting shall not be presided by the
President or Vice-President against whom such resolution is to be considered. (5) The President or Vice-President as the case may be,
aggrieved by the resolution passed under sub-section (4) may appeal to the
Arbitration Council within thirty days from the date of passing of such
resolution whose decision thereon shall be final. (6) In the event of the occurrence of any vacancy in the office
of the President by reason of his death, resignation or removal, or otherwise,
the Vice-President shall act as President until the date on which a new
President elected in accordance with the provisions of this Act and the
bye-laws to fill such vacancy. (7) When the President is unable to discharge his functions
owing to absence, illness, or any other cause, the Vice-President shall
discharge the functions of the President until the date on which the President
resumes his duties. (8) The Vice-President shall, during and in respect of, the
period while he is so acting as, or discharging the functions of, President,
have all the powers of the President. The
board shall discharge such functions, perform such duties and responsibilities
and exercise such powers as may be specified in the bye-laws and in accordance
with the terms, conditions and procedure laid down therein and in particular
the board shall have the following powers, functions and duties, namely :— (a) to interpret the organisational objectives, to set up
specific goals to be achieved towards such objectives, and to make periodic
appraisal of operations; (b) to nominate, elect or appoint and remove the Chief
Executive; (c) to make provisions for the matters mentioned in Section 44
in respect of the staff of a co-operative; (d) to finalise long-term perspective plan, annual plan and
budget, and to direct the affairs of the co-operative in accordance with the
plan and budget approved by the general body; (e) to arrange for funds; (f) to authorise acquisition and disposal of immovable
property; (g) to frame, approve and amend regulations relating to
services, funds, accounts and accountability, and information and reporting
systems; (h) to elect President, Vice-President and representative in
accordance with the provisions of the bye-laws; [21][(i) to prepare the annual financial statement of accounts; (j) to file returns
and information in accordance with the provisions of sub-sections (1) and (2)
of Section 52; (k) to convene
annual general meeting or special general meeting under Section 32; (l) to prepare the
business policy for co-operative and to conduct the work in accordance with the
business policy; (m) to consider the
audit report of accounts of the previous financial year and to take action on
its recommendations and to submit the compliance report along with the details
of action taken before the annual general meeting.] In
addition to such other conditions as may be specified in the bye-laws, a member
of a co-operative shall be eligible for being chosen as a director of the
co-operative, if:— (i)
such member has the right to vote in
the affairs of the cooperative; and (ii)
such member has patronized the
services of the co-operative during the previous financial year to the extent
and in the manner specified in the bye-laws; and (iii)
such member has no pecuniary interest
in any subsisting contract made with, or work being done for, the co-operative
except as otherwise specified in the bye-laws; and (iv)
the period of three years has lapsed
from the date such member ceased to be a director for the following reasons :— (a) non-conduct of annual general meeting or special general
meeting under sub-section (4) of Section 32; (b) non-submission of annual report of activities, audited
annual financial statement of accounts or auditor ‘s report to the general body
under sub-section (5) of Section 32; or (c) non-conduct of elections of the directors, or the delegate
or representative under sub-section (3) of Section 37; (d) absence from board meetings under sub-section (7) of
Section 39. (1) It shall be the responsibility of the incumbent board to
conduct elections of directors, delegates to the delegate general body and
representatives if fallen due within the meaning of explanation to clause (a)
of sub-section (1) of Section 31. (2) The elections shall be conducted in the manner specified in
the bye-laws, before the expiry of the term of office of the outgoing
directors, delegates or representatives as the case may be. (3) Where a board fails to conduct election of the directors or
delegates or representatives, as the case may be before the expiry of the term
of their office in accordance with the bye- laws, all directors shall cease to
be directors on the date of the annual general meeting at which the elections
were due. (4) The elections of directors, and delegates shall take place
at the annual general meeting. (5) Where a board fails to conduct elections before the expiry
of the term of the directors or delegates or representatives, or, where there
are no directors remaining on the board, a minimum of 25% of total members of
the cooperative may jointly convene a general meeting, or request the Registrar
to convene a general meeting for constituting an ad hoc board for the specific
purpose of conducting elections and to perform all functions of the board
during the interregnum except those functions as prescribed by the general
body. (6) The term of the ad hoc board so constituted shall not
exceed three months and the ad hoc board shall cease to function as soon as a
regular board is constituted in accordance with the bye-laws. (7) The directors shall hold office for the period for which
they were elected and the newly elected directors shall assume office on the
date of expiry of said period. (8) The director shall not be eligible, if so specified in the
bye-laws, for re-election. (9) Where there are vacancies in the office of the directors
and where there are not sufficient number of directors to constitute a quorum
for board meetings, the remaining directors shall, notwithstanding anything
contained in this Act or the bye-laws, call a general meeting for the purpose
of electing directors to fill the vacancies for the unexpired term of the
board. (1) The term of office of the directors, or where the bye-laws
provide for retirement of director by rotation, the term of office of the
individual directors shall be for such period as specified in the bye-laws,
which shall not exceed five years from the date on which first meeting of the
board is held. (2) The term of representative elected by the board shall be
coterminous with the term of the board for which representative is elected : Provided
that the representative of a board shall continue to hold his office only till
expiry of the term of the board of which he is a member. (3) For removal of doubt it is hereby declared that where the
term of office of the director is changed by amending bye-laws, the changed
term shall apply only to the director elected after such amendment for the
constitution of new board. (4) Any casual vacancy in the office of the director shall be
filled in accordance with the provisions of the bye-laws and the director so
elected shall hold office for the unexpired term of his predecessor. (1) A meeting of the board may be called at any time by the
President and in the event of his being incapable of acting then by the
Vice-President but at least four meetings of the board shall be held in a
financial year, and the period between two consecutive meetings shall not exceed
one hundred and twenty days. (2) The President and in the event of his being physically
incapable of acting then the Vice-President may, whenever he thinks fit, call a
special meeting of the board and shall be bound to do so within fifteen days of
the date of receipt of a written requisition— (a) signed by not less than one-third of the directors on the
board; or (b) from the Registrar; or (c) from the Auditor; such
requisition shall contain the reasons why the meeting is felt necessary and the
proposed agenda and no subject other than the subjects included in the proposed
agenda shall be discussed at the special meeting of the board. (3) If the President or Vice-President, as the case may be,
fails to hold the meeting of the board under sub-section (1) or the special meeting
of the board under sub-section (2) within the period specified therein, he
shall cease to be President or Vice-President, as the case may be on the date
of expiry of the said specified period. (4) A person who ceases to be the President or Vice-President,
under sub-section (3) shall not be eligible to hold the office of President or
Vice-President, as the case may be, for a period of three years from the date
of such cessation. (5) The quorum for a meeting of the board shall be such as may
be specified in the bye-laws but shall not be less than fifty per cent of the
total number of directors on the board. (6) Subject to the provisions of this Act, the procedure to
convene and conduct the meetings of the board shall be such as may be specified
in the bye-laws. (7) If a director fails to attend three consecutive meetings of
the board without the permission of the President he shall cease to be a
director, from the date of the third meeting. Except
as otherwise provided by this Act, or the bye-laws, all questions brought
before any meeting under this Act shall be decided by majority of the votes of
the members present and in the case of an equality of votes the presiding
authority of the meeting shall have a second or casting vote : Provided
that in the case of equality of votes at the election of the President,
Vice-President, Director, delegate or representative, the presiding authority
shall not exercise his casting vote and the result shall be decided by lot. (1) [22][Every co-operative shall, in its minute book, record, in
Hindi or in any other language prescribed in the bye-laws, the minutes of all
proceedings of every general meeting, delegate general body meeting and Board
meeting and the names of the members, delegates or directors present thereat
and shall confirm it at the same or ensuing meeting and it shall be the
responsibility of the Chief Executive of co-operative to send the copy thereof
within fifteen days of every such meeting to all delegates or members or
directors, as the case may be.] (2) The minutes so recorded shall be signed— (a) in the case of a general meeting or delegate general body
meeting, by the person who presided the said meeting, or in the event of his
death or incapacity to sign the minutes within the time required, by the person
who presides the following meeting wherein the minutes are confirmed; and (b) in the case of a board meeting, by the person who presided
the said meeting or by the person who presides the following meeting, wherein
the minutes are confirmed. (3) The minutes of a general meeting shall be deemed to have
been confirmed on the thirtieth day of its dispatch to all members, if no
comments are received from members within that time : Provided
that where comments have been received from members, corrections, if any, may
be made to the minutes by the President, and the revised minutes shall be
confirmed by the person who presides the following meeting of the general body. No
act or proceeding of the co-operative or of board or of any officer constituted
or appointed under this Act shall be questioned on account of any vacancy in
the membership or any defect in the election or qualification of the President,
Vice-President, Director, delegate or representative or any defect or
irregularity in such act or proceeding not affecting the merit of the case. Unless
contrary is proved every meeting of the general body or the board shall be
deemed to have been duly convened and held and, all members of the meeting
shall be deemed to have been duly qualified when the minutes of the meeting
have been signed in accordance with the provisions of this Act. Subject
to other laws regulating employer, employee relations all employees of a
co-operative shall be appointed, regulated and removed by and be accountable to
authorities within the co-operative in accordance with the service conditions
approved by the board. [23][(1) A co-operative may raise funds in shape of equity
capital from its members to such extent and under such conditions as may be
specified in the bye-laws. (2) A co-operative
may raise funds from its members in shape of deposits and loans to such extent
which shall not be more than 25 times of the share capital and reserve fund. (3) A co-operative
may borrow funds only from any Scheduled Bank or financial institution as
defined in the Reserve Bank of India Act, 1934 (No. 2 of 1934) or Co-operative
Bank or Regional Rural Bank as defined in the Banking Regulation Act, 1949 (No.
10 of 1949) and to such extent and under such conditions as may be specified in
the bye-laws. (4) A co-operative
shall not accept any deposits from non-member or institutions and shall not
perform any work relating to banking business unless such co-operative has
obtained licence under the Banking Regulation Act, 1949 (No. 10 of 1949).] (1) The funds mobilised by a co-operative shall be primarily
for the furtherance of its objectives. (2) No part of the funds of a co-operative other than the net
profits shall be paid by way of bonus or dividend or otherwise distributed
among its members. (3) A co-operative may out of its net profits in any year, pay
on the paid up share capital of members a dividend at a rate fixed by the
general body in the annual general meeting. (4) Such of its funds as are not needed for use in its
business, a co-operative may invest or deposit, outside its business, in any
non-speculative manner. (1) The surplus, if any, arising out of the business of a
co-operative in a financial year may be used in one or more of the following
purposes :— (a) towards a deficit cover fund; (b) to be distributed as surplus refund among its members; (c) to develop its business; (d) towards reserves and funds constituted in accordance with
the bye-laws; (e) to provide common services to its members; (f) to provide rewards or incentives to staff; (g) towards payment of bonus under the Payment of Bonus Act,
1965 (No. 21 of 1965) to the employees; (h) towards payment of taxes; (i) towards writing off bad debts and losses not adjusted; (j) towards, such purposes as may be specified in the bye-laws. (2) Surplus arising out of the business of a co-operative shall
be fully disposed of at the annual general meeting in which the audited annual
financial statement of accounts for the year in which the surplus arose is
presented for the consideration of the general body. (1)
The deficit, if any arising out of the
operation of the business of a co-operative during any given financial year,
shall be fully settled by debiting a part or whole of the deficit to the
deficit cover fund, if any, or as charge, among its members : Provided
that nothing in this sub-section shall preclude a co-operative from also
proceeding against its directors or staff for recovery of amounts contributing
to the deficit, where such deficit is the result of deviation from the approved
plan or budget, and where such deviation does not receive the approval of the
general body, or is the result of gross negligence or mismanagement: Provided
further that where such amounts are recovered, the general body may resolve to
credit a part or whole amount to the deficit cover fund or to the account of
each member in proportion to the deficit charge levied on. him. (2)
No member shall be permitted to
withdraw from the membership of the co-operative without paying his share
towards clearing the deficit, if any. (1)
A co-operative may create reserves and
such other funds as are in the interest of members or the co-operative and
which are specified in the bye-laws : Provided
that where a contributory provident fund is created for the benefit of
employees, such fund— (a) shall not be used in the business of the co-operative; (b) shall not form part of the assets of the co-operative; (c) shall not be liable to attachment or be subject to any
other process of any Court or other authority; and (d) shall be administered in such manner as may be provided in
the bye-laws. (2) The funds so created may be used in the business of the
co-operative, but in any financial year if the fund is not applied in part or
whole for the purpose for which it was created, the co-operative shall credit
to the account of such fund an annual interest on the amount of balance of such
fund at a rate not less than the rate paid by Scheduled banks on long-term
fixed deposits, debiting such interest as operational expenditure. (1) Every co-operative shall keep at its head office, the
following accounts, records and documents, namely.— (a) a copy of this Act with amendments made therein from time
to time; (b) copies of other laws and regulations to which the
co-operative is a subject; (c) a copy of its bye-laws, with amendments made therein from
time to time; (d) a copy of the regulations framed under clause (g) of
Section 35 and amendments made therein from time to time; (e) the minutes books; (f) account of all sums of money received and expended by the
co-operative and their respective purposes; (g) account of all purchases and sales of goods by the
co-operative; (h) account of the assets and liabilities of the co-operative; (i) a list of members, their fulfilment of responsibilities
over the previous financial year, their eligibility to exercise their rights
for the current twelve month period updated within sixty days of closure of the
financial year; and (j) all such other accounts, records and documents as may be
required by this Act or other laws and regulations or bye-laws of the
co-operative : Provided
that where a co-operative has branch offices, summarised statements of accounts
relating to such branch office, shall be available at the head office for each
quarter of financial year, within fifteen days of the end of that quarter. (2) The books of account and records shall be opened to
inspection by any director during office hours of the co-operative. (3) The copies of this Act, bye-laws, regulations, minutes book
of the general body, voters list and such account and records of transactions
that relate to a member shall be made available to any during office hours of
the co-operative. (4) The books of accounts relating to a period of at least
eight years before the current financial year together with supporting records
and vouchers shall be preserved unless otherwise require for a longer period. (1) A co-operative shall get its accounts audited by a
Chartered Accountant as defined within the meaning of the Chartered Accountants
Act, 1949 (No. 38 of 1949) or by any other auditor authorised by the Registrar. (2) A co-operative, at its annual general meeting, shall
resolve to appoint an auditor. The resolution shall be valid for the period
ending on the close of the next succeeding annual general meeting. (3) The remuneration of an auditor may be fixed by the general
body or, if not so fixed, by the board. (4) An auditor shall cease to hold office— (a) on his resignation; or (b) on his removal from office under sub-section (6); or (c) on completion of his term of office. (5) The resignation of an auditor becomes effective on the date
the resignation in writing is received by the co-operative, or on the date
specified in the resignation whichever is later. (6) The general body may, by special resolution, remove an
auditor from office. (7) An auditor, who— (i)
resigns; or (ii)
receives a notice or otherwise learns
of a general meeting called for the purpose of removing him from office; is
entitled to submit to the general body a written statement giving the reasons
for his resignation or the comments on the proposed removal as the case may be. (8) A vacancy occurred on account of death, resignation,
removal or otherwise shall be filled in by the general body. An auditor
appointed to fill a vacancy shall hold office for the unexpired term of his
predecessor. (9) The auditor shall be given notice of every general meeting
and, at the expense of the co-operative, shall be entitled to attend and be
heard thereat on matters relating to his duties as auditor and their exercise
as auditor. (10) Where one-tenths of members of a co-operative give written
notice, of not less than ten days before a general meeting to the auditor or a
former auditor, to attend the meeting at the expense of the co-operative and
answer questions relating to his duties and their exercise as auditor. A copy
of the notice shall concurrently be given to the co-operative. (11) It shall be the duty of the board to ensure that annual
financial statements of accounts are prepared and presented for audit within
forty-five days of closure of the financial year. (12) Upon the reasonable demand of the auditor, the present or
former directors, members, managers or employees of the co-operative shall— (i)
provide access to such records,
documents, books, accounts, vouchers, papers, securities, cash and other
properties belonging to or in the custody of the co-operative; and (ii)
furnish such information and explanations,
as are, in the opinion of the auditor, necessary to enable him to make the
examination and report, and as the present or former director, members,
managers or employees are reasonably able to furnish. (13) It shall be the duty of the auditor to ensure that audited
annual financial statements of accounts and his audit report are furnished to
the cooperative within forty-five days of the submission of annual financial
statements of accounts to him by the board. (14) The auditor’s report shall— (i)
state whether the auditor has obtained
all the information and explanations which to the best of his knowledge and
belief were necessary for the purpose of the audit; (ii)
state whether the balance sheet of
co-operative and income and expenditure account dealt with by the report are in
agreement with the books of accounts; (iii)
indicate the basis on which each asset
and liability was valued, and mention specifically any change in the manner in
which such valuation was done in the financial year under examination and its effect
on surplus or deficit; (iv)
indicate the amount of surplus earned
or deficit incurred from provision of services to non-members as distinct from
surplus earned or deficit incurred because of services to members or in normal
course of business; (v)
indicate every deviation in actual
expenses and income from the estimated expenses and income, in the approved
budget; (vi)
state whether or not any of the
directors had at any time during the financial year under review, become
ineligible under this Act to continue in office as a director; and (vii)
state whether the decisions on
disposal of surplus or assessment of deficit, of the general body, at its
previous annual general meeting were implemented correctly and completely or
not. [24][(h) state whether the loss incurred in the business of the
cooperative is the result of gross negligence or serious irregularities.] (1) Every year, within thirty days of the holding of the annual
general meeting, the board shall file the following returns with the Registrar,
namely :— (a) annual report of activities; (b) annual financial statements of accounts as audited with
auditor’s report, thereon; (c) statistical statement indicating name of the co-operative;
core services offered by the co-operative to its members; total number of
members as on the last day of the financial year; total liabilities expressed
as (i) funds from members, and surpluses; (ii) funds from other external
sources as on the last day of the financial year; quantum in rupees of services
provided (i) to members, and (ii) to non-members; and surplus or deficit at the
end of financial year; and (d) annual disposal of surplus or management of deficit. (2) Along with the returns specified in sub-section (1), every
co-operative shall furnish the following information to the Registrar, namely:— (a) the date of the annual general meeting at which the returns
to be filed with the Registrar were considered or approved; (b) the total number of members on the rolls of the
co-operative who were eligible to vote on the date of such annual general
meeting; (c) the number of eligible members present at such annual
general meeting; (d) list of names of directors, their addresses and their terms
of office; (e) name and address of the auditor appointed for auditing the
current financial year’s accounts; and (f) any other relevant and specific information required by the
Registrar to enable him to decide whether the co-operative has conducted its
affairs in accordance with the co-operative principles mentioned in Schedule A
and the provisions of this Act and the bye-laws. [25][(3) If the returns and information as specified in
sub-sections (1) and (2) are not filed with or furnished to the Registrar
within the period specified in sub-section (1), the Registrar may, by an order,
impose penalty of not exceeding ten thousand rupees, on the Board which was
responsible, after giving the Board a reasonable opportunity of being heard and
all the Directors of the Board shall be jointly liable for such penalty.] (1) The Registrar shall on the application of a [principal
co-operative] to which the co-operative concerned is affiliated, or of a
creditor to whom the co-operative is indebted, or of not less than one-third of
the directors, or of not less than one-tenth of the members, hold an inquiry or
cause an inquiry to be made into any specific subject or subjects relating to
any violation of any of the provisions of this Act or bye-laws. (2) The Registrar shall order an inquiry only after the receipt
of a fee, as determined by him from the applicant or the applicants. The fee
should be sufficient to meet the costs of the inquiry to be conducted. (3) The inquiry shall be completed within a period of sixty
days from the date of order of the inquiry : Provided
that was the inquiry cannot be completed within a period of sixty days the
reasons thereof shall be recorded in writing. (4) The Registrar shall,— (i)
within a period of thirty days from
the date of the completion of the inquiry, communicate the report of the
inquiry; (ii)
within a period of fifteen days from
the date of expiry of the period mentioned in sub-section (3) communicate the
reasons for the non-completion of the inquiry along with the period not
exceeding thirty days which is likely to be taken for completion of inquiry in
case the inquiry cannot be completed within the period mentioned in sub-section
(3)— (a) to the co-operative concerned; and (b) (i) to the applicant [26][principal
co-operative]; or (ii)
to the applicant-creditor; or (iii)
to the person designated by the applicant-directors, or (iv)
to the person designated by the applicant-members, as the case may be. (5) The co-operative concerned shall, on receipt of the report,
place it before the next general meeting to take such action thereon as the
general body may think fit. (6) A copy of report shall be supplied to any person, on
payment of fee as determined by the Registrar. (1) No person other than a co-operative registered under this
Act and a person or his successor in his interests of any name or title under
which he traded or carried on business at the date on which this Act come into
force, shall without the permission of the State Government, function, trade or
carry on business under any name or title of which the word “co-operative” or
its equivalent in any Indian language forms part. (2) Every person who is a member of a co-operative formed in
contravention of sub-section (9) of Section 4 and every person contravening the
provisions of sub-section (1) shall be punishable with a fine which may extend
to five hundred rupees and in the case of a continuing offence with further
fine of two hundred rupees for each day on which the offence is continued after
conviction therefor. (1) A person who makes or assists in making a report, return,
notice or other document required by this Act to be sent to the Registrar or to
any other person that— (a) contains an untrue statement of a material fact; or (b) omits to state a material fact required in the report or
necessary to make a statement contained in the report not misleading in the
light of the circumstances in which it was made, shall
be guilty of an offence and shall on summary conviction, be punishable— (i)
in the case of an individual, with a
fine which may extend to rupees [27][ten
thousand] or with imprisonment for a term which may extend to three months or
with both; (ii)
in the case of a person other than an
individual, with a fine which may extend to rupees ten thousand. (2) (a) If the person commits an offence under sub-section (1)
is a cooperative which is a body corporate, the co-operative as well as every
person in charge of and responsible to the co-operative for the conduct of its
business at the time of commission of the offence shall be deemed to be guilty
of the offence and shall be liable to be proceeded against and punished
accordingly. (b)
Notwithstanding anything contained in clause (a) where an offence has been
committed by a co-operative and it is proved that the offence has been
committed with the consent or connivance of, or that the commission of the
offence is attributable to any neglect on the part of any director, manager,
secretary or other officer of the co-operative, such director, manager,
secretary or other officer shall also be deemed to be guilty of that offence
and shall be punishable with a fine of [28][ten
thousand] rupees or with imprisonment for a term which may extend to ninety
days or with both. (3) No person shall be guilty of an offence under sub-section
(1) or sub-section (2) where the untrue statement or omission— (a) was unknown to him, and (b) in the exercise of reasonable diligence, could not have
been known to him. (4) Every person who— (a) without reasonable cause, contravenes a provision of this
Act for which no penalty is otherwise provided; or (b) fails to file or furnish return or to give any notice, or
to send any document required by the provisions of this Act; shall
be guilty of an offence and shall, on summary conviction, be punishable with a
fine which may extend to [29][ten
thousand] rupees. [30][(4-A) Every person who— (a) destroys, mutilates or alters any book or securities, or is
privy to the making of any false or fraudulent entry in any register, book of account
or document belonging to the co-operative; or (b) invests fund of co-operative other than as provided in this
Act and the bye-laws, shall
be guilty of an offence and shall on conviction be punishable with imprisonment
which may extend to three months or with fine which may extend to ten thousand
rupees or with both.] (5) Where a person is convicted of an offence under this Act,
the Court may, in addition to any punishment imposed, order the person to
comply with the provisions of this Act for the contravention of which he has
been convicted. (6) No prosecution for an offence under this Act shall be
commenced after five years from the date when the subject matter of the
complaint arose. (7) No civil remedy for an act or omission under this Act is
suspended or affected by reason that the act or omission is an offence under
this Act. [31][(1) No Court inferior to that of a Magistrate First Class
shall try any offence under this Act. (2) No Court shall
take cognizance of any offence punishable under this Act except on a report in
writing of the facts constituting such offence by the Registrar or by a person
specially authorised by him in this behalf.] (1) If any dispute touching the constitution, management or business
of a co-operative arises— (i)
(a) among members, past members or
persons claiming through member, past member or deceased member; or (b)
between a member, past member or a person claiming through a member, past
member or deceased member and the co-operative, its board, director,
office-bearer or liquidator, past or present; or (c)
between the co-operative and its board and any past board, any director
office-bearer, or any past director, past office-bearer, or the nominee, heir,
or legal representative of any deceased director or deceased office-bearer of
the co-operative. shall
be referred to the Arbitration Council; (ii)
between the co-operative and any other
co-operative or between a co-operative and liquidator of another co-operative
or any other Individual or institutions shall be referred to the Cooperative
Tribunal. Explanation
:— For the purposes of this sub-section, a dispute shall include— (a) a claim by a co-operative for any debt or other amount due
to it from a member, past member, the nominee, heir or legal representative of
a deceased member, whether such debt or not; (b) a claim by surety against the principal debtor where the
co-operative has recovered amount from the surety in respect of any debtor or
other amount due to it from the principal debtor as a result of the default of
the principal debtor whether such debt or other amount due be admitted or not; (c) a claim by a co-operative against a member, past member or
the nominee, heir or legal representative of a deceased member for the delivery
of possession to the co-operative of land or other immovable property resumed
by it for breach of the conditions of assignment or allotment of such land or
other immovable property; (d) any dispute arising in connection with the election of
directors or delegates or representatives or President or Vice-President of the
co-operative : Provided
that no dispute under this clause shall be entertained during the period
commencing from the announcement of the election programme till the declaration
of the results. (2) If any question arises whether a dispute referred to the
Arbitration Council under this section is a dispute touching the constitution,
management or business of the co-operative, such question shall be decided by
the Arbitration Council. (3) The Arbitration Council shall on deposit of fees prescribed
in the bye-laws decide the dispute in accordance with the provisions of this
Act and the bye-laws. Pending final decision on the dispute, the Arbitration
Council may make such interlocutory orders it may deem necessary in the
interest of justice. (4) Every order or decision made under this section, shall be
executed by the Civil Court having jurisdiction, as if such order is a decree
of that Court, on a certificate issued by the Arbitration Council. (5) Notwithstanding anything contained in sub-section (4), and
without prejudice to any other mode of recovery which is being taken or may be
taken, the Arbitration Council may, on the application made by the co-operative
for the recovery of arrears of any sum advanced by the co-operative to any of
its members, and on its furnishing a statement of accounts in respect of the
arrears and after making such inquiry as such Council deems fit, issue a
certificate for the recovery of the amount stated therein to be due as arrears. (6) A certificate issued by the Arbitration Council under
sub-section (5) shall be final and conclusive proof of the arrears stated to be
due and the certificate shall be executed by the Chief Executive in the manner
specified in the bye-laws. (7) A person aggrieved by the order of the Arbitration Council
may appeal to the Co-operative Tribunal within forty-five days from the date of
passing the order : Provided
that no appeal under this sub-section shall be admitted unless twenty-five per
cent of the decreed principal amount is deposited in such manner as the
Co-operative Tribunal may prescribe by regulations. (1) The bye-laws shall provide for the constitution of an
Arbitration Council consisting of three members, possessing such qualifications
as may be prescribed by bye-laws appointed by the general body from among its
members or others, whose term of office shall be of the same duration as that
of the directors. (2) The Arbitration Council shall follow such procedure and exercise
such powers for settlement of disputes as may be prescribed by the Co-operative
Tribunal. (1) A co-operative may, by special resolution, authorise its
own dissolution. A notice of the general meeting called for the purpose shall
also be sent by registered post with an invitation to attend, to the Registrar,
to creditors, if any, to any [32][principal
co-operative] to which the co-operative is affiliated, and to any co-operative
with which a partnership contract has been entered into. (2) The invitee under sub-section (1) shall have the right only
to make a presentation to the general body, if he wishes to do so, on the issue
of the proposed dissolution. (3) Within fifteen days of such authorisation for dissolution,
the co-operative shall send to the Registrar a copy by registered post of the
authorisation to dissolve the co-operative. (4) The authorisation approved under sub-section (1) shall set
out— (a) the assets and liabilities of the co-operative; (b) the claims of creditors; (c) the number of members; (d) the nature and extent of the members’ interest in the
cooperative; (e) the name and address of the liquidator appointed by the
cooperative. (5) When the Registrar receives the special resolution passed
under sub-section (1)— (a) where he is satisfied that the co-operative has no assets
or liabilities, he shall dissolve the co-operative, delete its name from the
register of co-operatives and issue a certificate of dissolution of such
co-operative; or (b) he shall, within thirty days of the date of receipt of such
resolution, cause at the expense of the co-operative a notice of the special
resolution to be published once in the Gazette and once a week for two
consecutive weeks in a newspaper published or distributed in the district where
the head office of the cooperative is located. (6) In the case of dissolution, he Registrar may require, till
the certificate of dissolution is issued by him, from the liquidator appointed
by the co-operative or from any other person who is required to furnish
information, a periodical return showing :— (a) the progress of dissolution; (b) the distribution of any undistributed surplus or reserve;
and (c) any other relevant information. (1) Where the Registrar has reason to believe that a
co-operative— (a) has not commenced business within two years after the date
shown on its certificate of registration; or (b) has not carried on business for two consecutive years; he
shall send to the co-operative a letter by registered post, inquiring whether
the co-operative is carrying on business. (2) Where the Registrar— (i)
does not, within thirty days of the
date of sending a letter under sub-section (1), receive a reply to the letter,
he shall within fifteen days after the expiry of said thirty days, send to the
co-operative a letter stating that :— (a) a letter was sent to the co-operative under sub-section(1); (b) no reply to the letter has been received by him within
thirty days from the date of sending it; (ii)
receives a reply from the co-operative
that it is not carrying on business; or (iii)
does not, within thirty days from the
date he sent a letter under this sub-section receive a reply to that letter; he
shall publish the notice in the newspaper and send to the co-operative a notice
that, at the expiry of thirty days from the date of the notice, the
co-operative shall, unless cause is shown to the contrary, be dissolved and
have its name deleted from the register of co-operatives. (3) On the expiry of thirty days from the date of issue of the
letter under sub-section (2), the Registrar shall, unless cause to the contrary
is previously shown by the co-operative :— (a) where he is satisfied that the co-operative has no assets
or liabilities, dissolve the co-operative, delete its name from the register of
co-operatives and issue a certificate of dissolution of such co-operative; or (b) appoint a liquidator under Section 60 to wind up the
affairs of the co-operative. (4) Where a co-operative fails to file returns and furnish
information, as required by Section 52, even after a lapse of two hundred and
forty days from the close of the financial year, the Registrar shall send a
requisition under sub-section (2) of Section 32 to the board to call a special
general meeting for the purpose of considering the annual returns to be filed
with, and the information to be furnished to the Registrar. (5) Where the board fails to call a special general meeting
within the period specified in sub-section (2) of Section 32, the Registrar may
at the cost of the co-operative call the special general meeting
notwithstanding anything contained in this Act:— (a) to review the affairs of the co-operative; and (b) to ascertain whether the general body desires to continue
the co-operative. (6) Where: (a) a quorum of members is not present at a special general
meeting called under sub-section (4) or sub-section (5); or (b) the general body fails to pass a resolution to the effect
that:— (i)
the co-operative is to carry on
business; (ii)
the board shall present, within sixty
days from the date of the special general meeting, to the general body the
annual returns to be filed with, and the information to be furnished, to the
Registrar; and (iii)
the co-operative shall file the
returns with, and furnish the information to the Registrar within ninety days
from the date of the special general meeting; or (c) the co-operative fails to file the returns with, and
furnish the information to the Registrar within ninety days from the date of
the special general meeting; the
Registrar shall— (i)
if he is satisfied that the
co-operative has no assets or liabilities, dissolve the co-operative, delete
its name from the register of co-operatives and issue a certificate of
dissolution of such co-operative; or (ii)
appoint a liquidator under Section 60
to wind up the affairs of the co-operative. Where
a co-operative is to be dissolved and no liquidator is appointed by the general
body, the Registrar shall appoint any person as a liquidator to wind up the
affairs of the co-operative. A
liquidator on his appointment shall:— (a) immediately give notice of his appointment : (i)
in the case of a liquidator not
appointed by the Registrar; to the Registrar; and (ii)
to each claimant and creditor known to
the liquidator; (b) immediately publish notice of his appointment in the
Gazette and once a week for two consecutive weeks in a newspaper published or
distributed in the district where the head office of the co-operative is located
and take reasonable steps to give notice of the liquidation in every
jurisdiction where the cooperative carries on business; (c) include in the notice mentioned in clauses (a) and (b) a
provision requiring any person :— (i)
indebted to the co-operative, to
render an account and pay to the liquidator at the time and place specified in
the notice any amount owing; (ii)
possessing property of the
co-operative, to deliver it to the liquidator at the time and place specified
in the notice; and (iii)
having a claim against the
co-operative, whether liquidated, unliquidated, future or contingent, to
present particulars of the claim in writing to the liquidator at the time and
place specified in the notice within the period specified in such notice which
shall not exceed sixty days from the date of first publication of the notice; (d) take into his custody and under his control all the
property and actionable claims to which the co-operative is or appears to be
entitled and shall take such steps as he may deem necessary or expedient to
prevent loss or deterioration of or damage to such property, effects and
claims; (e) open and maintain a trust account for the moneys of the
cooperative; (f) keep accounts of the moneys of the co-operative received
and paid out by him; (g) maintain separate lists of the members, creditors and other
persons having claims against the co-operative; (h) where at any time he determines that the co-operative is
unable to pay or adequately provide for the discharge of its obligations, apply
to the Registrar or general body, as the case may be, for directions; and (i) deliver to the Registrar or general body, as the case may
be, periodically as the Registrar or general body may require, financial
statements of the co-operative in such form the liquidator considers proper or
that the Registrar or general body may require. (1) The whole of the assets of a co-operative in respect of
which an order for winding up has been made shall vest in the liquidator
appointed under Section 60 from the date the order takes effect. (2) The liquidator may— (a) retain lawyers, accountants, engineers, appraisers and
other professional advisors; (b) institute and defend suits and other legal proceedings on
behalf of the co-operative by the name of his office; (c) carry on the business of the co-operative so far as may be
necessary for the beneficial winding up of the same; (d) sell by public auction or private sale any property of the
co-operative; (e) do all acts and execute any documents in the name and on
behalf of the co-operative; (f) borrow money on the security of the property of the
cooperative; (g) settle or compromise any claims by or against the
co-operative; and (h) do all other things that he considers necessary for the
liquidation of the co-operative and distribution of its property. (3) Where a liquidator has reason to believe that any person
has in his possession or under his control, or has concealed, withheld or
misappropriated any property of the co-operative, he may apply to the Court for
an order requiring that person to appear before the court at the time and place
designated in the order and to be examined. (4) Where the examination under sub-section (3) discloses that
a person has concealed, withheld or misappropriated property of the co-operative
or has in possession or under his control the property of the co-operative, the
Court may order that person to restore the property or pay compensation to the
liquidator on behalf of the co-operative. (5) No liquidator shall purchase, directly or indirectly, any
part of the stock-in-trade, debts or assets of the co-operative. (6) Where an order of winding up of co-operative is set aside
in appeal the property, effects and actionable claims of the co-operative shall
revest in the co-operative. After
all the liabilities including the paid up share capital of a wound up
co-operative have been met, the surplus assets shall not be divided among its
members but they shall be applied to any object described in the bye-laws and
when no object is so described to any object of public utility determined by
the general body meeting. When
an order to wind up the co-operative has been made or the liquidator has been
appointed no suit or other legal proceeding relating to business of such
co-operative shall be proceeded with or instituted against the liquidator as
such or against the co-operative or any member thereof except with the leave of
the Registrar and subject to such conditions as he may impose. (1) A liquidator shall pay the costs of liquidation out of the
property of the co-operative and shall pay or make adequate provision for all
claims against the co-operative. (2) Subject to the provisions of Section 63 after paying or
making adequate provision for all claims against the co-operative, the
liquidator shall apply to the Registrar for approval of his final accounts and
for permission to distribute in case or in kind the remaining property of the
co-operative in accordance with the bye-laws. (3) Where the Registrar approves the final accounts rendered by
a liquidator under sub-section (2), he shall :— (a) issue directions with respect to the custody or disposal of
the documents and records of the co-operative; and (b) discharge the liquidator. (4) Where the Registrar discharges a liquidator under
sub-section (3), the Registrar shall dissolve the co-operative, issue a
certificate of dissolution and delete its name from the register of co-operatives. (5) The co-operatives ceases to exist on the date shown in the
certificate of dissolution, which shall not be later than two years after the
appointment of the liquidator. Notwithstanding
anything contained in Sections 5, 11, 12, 13, 14, 58 and 59 of this Act, in the
case of a co-operative bank or an urban co-operative bank, no [33][x
x x] transfer, division, amalgamation, merger or dissolution shall take place
save with the previous sanction in writing of Reserve Bank or National Bank for
Agriculture and Rural Development as the case may be. The
provisions of Sections 17-A and 17-B of the Madhya Pradesh Co-operative
Societies Act, 1960 (No. 17 of 1961) shall mutatis mutandis apply to all
co-operative banks. Explanation:—
For the purposes of this section, a “Co-operative Bank” means a co-operative
registered under this Act, which is doing the business of banking as defined in
clause (b) of sub-section (1) of Section 5 of the Banking Regulations Act, 1949
(No. 10 of 1949). (1) If any difficulty arises in giving effect to the provisions
of this Act, the State Government may pass such order not inconsistent with the
provisions of this Act as it may deem necessary to remove such difficulty : Provided
that no such order shall be passed after the expiry of the period of two years
from the date of coming into force of this Act. (2) The order passed under sub-section (1) shall be laid on the
table of the legislative assembly. Any
member or creditor having interest in the affairs of the co-operative may seek
information relating to any transaction of the co-operative and for that
purpose may be provided a certified copy of any document within one month from
the date of receipt of the application relating to such transaction on payment
of such fee as may be specified in the bye-laws. (1) Save as provided in this Act, no Civil or Revenue Court
shall have any jurisdiction in respect of— (a) the registration or conversion of a Co-operative or of an
amendment of a bye-law; (b) any matter concerning the winding up and the dissolution of
a Co-operative. (2) While a co-operative is being wound-up, no suit or other
legal proceedings relating to the business of such co-operative shall be
proceeded with, or instituted against, the liquidator as such or against the
co-operative or any member thereof except by leave of the Registrar and subject
to such conditions as he may impose. (3) Save as provided in this Act, no order, decision or award
made under this Act shall be questioned in any Court on any ground whatsoever. No
suit, prosecution or other legal proceedings shall lie against the Registrar or
any person subordinate to him or acting under this authority, in respect of
anything done or purporting to have been done by him in good faith under this
Act. SCHEDULE
A The
Statement of Co-operative Identity 1. Definition. A
co-operative is an autonomous association of persons united voluntarily to meet
their common economic, social and cultural needs and aspirations through a
jointly owned and democratically controlled enterprise. 2. Values. Co-operatives
are based on the values of self-help, self-responsibility, democracy, equality,
equity, and solidarity. In the tradition of their founders, co-operative
members believe in the ethical values of honesty, openness, social
responsibilities, and caring for others. 3. Principles. The
co-operative principles are guidelines by which co-operatives put their values
into practice. 1st Principle : Voluntary and
Open Membership Co-operatives
are voluntary organisations, open to all persons able to use their services and
willing to accept the responsibilities of membership, without gender, social,
racial, political, or religious discrimination. 2nd Principle : Democratic
Member Control Co-operatives
are democratic organisations controlled by their members, who actively
participate in setting their policies and making decisions. Men and women
serving as elected representatives are accountable to membership. In primary
co-operatives, members have equal voting rights (one member, one vote) and
co-operatives at other levels are also organised in a democratic manner. 3rd Principle : Member
Economic Participation Members
contribute to, and democratically control, the capital of their co-operative.
At least part of that capital is usually the common property of the
co-operative. Members usually receive limited compensation, if any, on capital
subscribed to as a condition of membership. Members allocate surpluses for any
of the following purposes : Developing
their co-operative, possibly by setting up reserves, part of which at least
would be indivisible, benefiting members in proportion to their transactions
with the co-operative; and supporting other activities approved by the
membership. 4th Principle : Autonomy and
Independence Co-operatives
are autonomous, self-help organisations controlled by their members. If they
enter into agreements with other organisations, including Governments or, raise
capital from external sources, they do so on terms that ensure democratic
control by their members and maintain their co-operative autonomy. 5th Principle : Education,
Training and Information Co-operatives
provide education and training for their members, elected representatives,
managers, and employees so they can contribute effectively to the development
of their co-operatives. They inform the general public-particularly young
people and opinion leaders-about the nature and benefits of co-operative. 6th Principle : Co-operation
among Co-operatives Co-operatives
serve their members most effectively and strengthen the co-operative movement
by working together through local, national, regional, and international
structures. 7th Principle : Concern for
Community Co-operatives
work for the sustainable development of their communities through policies
approved by their members. SCHEDULE B Subject matter for specific
consideration when framing bye-laws (1) Identity of the co-operative : (a) the name of the co-operative; (b) the village/town/city where the head office of the
co-operative is to be located; (c) the custody and use of the common seal; (d) the area of operation from where the membership is to be
drawn. (2) Aim and services : (a) the aim of the co-operative explicitly stated as a common
need of the members which the co-operative aims at fulfilling; (b) key service and support services to members to fulfil the
common need stated in the aim; (c) the conditions under which services may be provided to non-members. (3) Membership : (a) eligibility, ineligibility for obtaining membership; (b) eligibility, ineligibility for continuing membership; (c) procedure for obtaining membership; (d) procedure for withdrawing membership; (e) procedure for termination of membership; (f) circumstances under which membership ceases; (g) procedure for cessation of membership. (4) Member rights and
obligations : (a) the rights of members; (b) manner of fixation of minimum performance expected annually
of each member vis-a-vis use of services, financial commitment, participation
in meetings, and adherence to bye-laws, in order to be eligible to exercise the
rights of membership including the right to vote; (c) the consequences of performing below the minimum level
fixed; (d) the consequences of default in payment of any sum due by a
member. (5) General body: (a) the role of the general body, and of the delegate general
body, if any, and subjects which must be dealt with by the general body, and by
the representative general body, if any; (b) the manner and frequency of convening general meetings, the
mode of communication of the intimation of these meetings and quorum required; (c) the minutes of proceedings of general meetings. (6) Board of directors : (a) the size and composition of the board of directors; (b) eligibility, ineligibility for becoming director; (c) eligibility, ineligibility for retaining directorship; (d) the procedure for election including the appointment of
election officer, removal of directors, the election of the President, Vice
President, and representative and filling of casual vacancy; (e) the terms of office of the directors; (f) the frequency of board meetings; (g) the manner of convening board meetings, and quorum; (h) the functions, responsibilities and powers of the board; (i) the minutes of proceedings of board meetings; (j) the functions, responsibilities and powers of the
directors. (7) Chief Executive and staff: (a) the person to sue or be sued on behalf of the co-operative; (b) the manner of appointment and removal of chief executive; (c) the functions, responsibilities and powers of the chief
executive. (8) Finances: (a) the financial year which the co-operative wishes to adopt; (b) the manner of appointment of auditors and their duties; (c) the manner of appointment of internal auditors and their
duties; (d) the nature and amount of equity capital, if any, of the
cooperative; (e) the maximum capital which a single member can hold; (f) the types and extent of funds to be raised; (g) the purposes for which the funds raised by the co-operative
may be applied; (h) the debt-equity ratio that the co-operative wishes to
maintain at all times, and the maximum external debt that a co-operative wishes
to permit itself at any point of time; (i) procedure for transfer of shares or interest by a member; (j) procedure for redemption of shares by the co-operative; (k) procedure for transfer or payment of interest on death of
member; (l) the nature and extent of the liability of the members for
the debts contracted by the co-operative; (m) the nature and extent of the liability of the directors for
the debts contracted by the co-operative; (n) the manner of disposal of funds if under liquidation. (9) [34][Principal
co-operatives] : (a) the rights, if any, which the co-operative wishes to confer
on any [35][principal
co-operative] of which it is a member, and the circumstances under which these
rights may be exercised by such secondary co-operative; (b) the procedure for appointing and changing representative
to [36][principal
co-operative]. (10) Other matters : (a) the manner of making or amending bye-laws; (b) the manner of constitution and functioning of Arbitration Council
along with the qualifications of the members for settlement of disputes; (c) the manner of dissolution of the co-operative; (d) the language in which the affairs of the co-operative are
to be conducted; (e) refunding of loan, guarantee, share capital, grant or
subsidy received from Government; (f) other matters which the provisions of this Act requires to
be provided by bye-laws. [1] Received the assent of the Governor on the 29th December,
1999; assent first published in the “Madhya Pradesh Gazette (Extra-ordinary)”
dated the 4th January, 2000. [2] W.e.f. 15-2-2000, vide Notification No. F-5-13-97-XV-I,
dated 15.2-2000, published in M.P. Rajpaira (Asadharan), dated 15-2-2000. [3] Substituted by M.P. Act No. 16 of 2010 for the words
“secondary co-operative”. [4] Substituted by M.P. Act No. 16 of 2010 for the words
“secondary co-operative”. [5] Substituted by M.P. Act No. 16 of 2010 for the words
“secondary co-operative”. [6] Substituted by M.P. Act No. 24 of 2001 for the words
“which has taken loan, share capital, Government guarantee or grant from
Government” (w.e.f. 15-10-2001). [7] Substituted for “twenty” by M.P. Act No. 24 of 2001. [8] Substituted for “twenty” by M.P. Act No. 24 of 2001. [9] Substituted for “twenty” by M.P. Act No. 24 of 2001. [10] Substituted by M.P. Act No. 16 of 2010 for the words
“secondary co-operative”. [11] Substituted by M.P. Act No. 16 of 2010. Prior to
substitution it read as under: “(d) a list of names of the applicants with
their complete address;” [12] Substituted by M.P. Act No. 24 of 2001 (w.e.f.
15-10-2001). Prior to substitution it read as under: “Provided that where the
Central Government or State Government have given share capital, loan,
Government guarantee or grant to a co-operative society intending to convert
itself into a swayatta co-operative under this Act, the co-operative society
shall, before applying for under this Act, return such share capital, loan or
guarantee to such Government, and such Government shall accept such returned
share capital, loan or guarantee or grant as the case may be.” [13] Words “or has not received grant” omitted by M.P. Act No.
24 of 2001 (w.e.f. 15-10-2001). [14] Substituted by M.P. Act No. 16 of 2010 for the words
“secondary co-operative”. [15] Substituted by M.P. Act No. 16 of 2010. Prior to
substitution it read as under : “(1) Every co-operative shall notify
to the Registrar the full address of its head office, within sixty days from
the date of its registration under this Act.” [16] Substituted by M.P. Act No. 16 of 2010. Prior to
substitution it read as under : “(3) The Board may, by resolution,
change the address of its head office it shall give notice of such change to
its members, creditors, the Registrar and to any secondary co-operative to which
it is affiliated, within fifteen days of the passing of such resolution.” [17] Inserted by M.P. Act No. 16 of 2010. [18] Substituted by M.P. Act No. 16 of 2010 for the words
“secondary co-operatives”. [19] Substituted by M.P. Act No. 16 of 2010. Prior to
substitution it read as under : “(e) consideration of the audited
financial statements of accounts, and the auditor’s report relating to the.
previous financial year;” [20] Substituted by M.P. Act No. 16 of 2010 for the words
“secondary co-operative”. [21] Clause (i) substituted by M.P. Act No. 16 of 2010. Prior
to substitution it was as under : “(i) to prepare the annual financial
statement of accounts.” [22] Substituted by M.P. Act No. 16 of 2010. Prior to substitution
it read as under : “(1) Every co-operative shall record,
in Hindi or in any other language prescribed in the bye-laws the minutes book,
minutes of all proceedings of every general meeting, delegate general body
meeting and board meeting and the names of the members/delegates/directors
present thereat and shall be confirmed at the same or the next ensuing meeting
and send the copy thereof within fifteen days of the conclusion of every such
meeting to all delegates or members or directors as the case may be.” [23] Substituted by M.P. Act No. 16 of 2010. Prior to
substitution it was as under : “45. Mobilisation of funds.— (1) A co-operative may raise funds in
shape of equity capital, deposits and loans from its members to such extent and
under such conditions as may be specified in the bye-laws. (2) A co-operative may borrow funds
from non-member/individuals and institutions to such extent and under such
conditions as may be specified in the bye-laws.” [24] Inserted by M.P. Act No. 16 of 2010. [25] Substituted by M.P. Act No. 16 of 2010. Prior to
substitution it was as under : “(3) If the returns and information,
as specified in sub-sections (1) and (2), are not filed with or furnished to
the Registrar within the period specified in sub-section (1) it shall be
treated as an offence under this Act and the board shall be penalised in
accordance with the provisions of this Act.” [26] Substituted by M.P. Act No. 16 of 2010 for the words
“secondary co-operative”. [27] Substituted for “one thousand” by M.P. Act No. 16 of 2010. [28] Substituted for “one thousand” by M.P. Act No. 16 of 2010. [29] Substituted for “one thousand” by M.P. Act No. 16 of 2010. [30] Inserted by M.P. Act No. 16 of 2010. [31] Inserted by M.P. Act No. 16 of 2010. [32] Substituted by M.P. Act No. 16 of 2010 for the words
“secondary co-operative”. [33] The word “conversion” omitted by M.P. Act No. 24 of 2001
(w.e.f. 15-10-2001). [34] Substituted by M.P. Act No. 16 of 2010 for the words
“secondary co-operatives”. [35] Substituted by M.P. Act No. 16 of 2010 for the words
“secondary co-operatives”. [36] Substituted by M.P. Act No. 16 of 2010 for the words
“secondary co-operatives”.THE MADHYA PRADESH SWAYATTA SAHAKARITA
ADHINIYAM, 1999
PREAMBLE
Section 54 - Prohibition of use of word “co-operative”