MAHARASHTRA CO-OPERATIVE SOCIETIES RULES, 1961

PREAMBLE

In exercise of the powers conferred by sub-sections (1) and (2) of Section 165 of the Maharashtra Co-operative Societies Act, 1960 (Mah. XXIV of 1961), the Government of Maharashtra hereby, after previous publication as required by sub-section (3) of that section read with section 22 of the Bombay General Clauses Act, 1904 (Bombay I of 1904), makes the following Rules, namely:

CHAPTER I: PRELIMINARY

Rule - 1. Short title and extent.

(1)     These rules may be called the Maharashtra Co-operative Societies Rules, 1961.

(2)     They extend to the whole of the State of Maharashtra.

NOTES: Rule is a regulation, for management of a society and binding on the members. It is also a point of law settled by authority.

The State Government has power to make rules for the whole or any part of the State and for any society or class of societies, for the conduct and regulation of the business of such society or class of societies, and for carrying out the purposes of the Co-operative Societies Act. See Sec. 165. Rules cannot go beyond the scope of the Act itself, nor can they be inconsistent with the Act.

Rule - 2. Definitions.

In these rules, unless the context otherwise requires,-

(a)      "Act" means the Maharashtra Co-operative Societies Act, 1960;

(b)      "Apex co-operative bank" means a federal co-operative bank having jurisdiction over the whole of the Maharashtra State and recognised as such by the State Government for the purpose;

(c)      "Co-operative year" means the year ending on the 30th day of June or in the case of any society or class of societies, the accounts of which are with the previous sanction of the Registrar, balanced on any other day, the year ending on such day;

NOTES: Co-operative year - The State Government has made an amendment in the definition of co-op. year in the Act in 1986, but it is necessary to have consistancy in the definition of co-op. year in the Rules.

Amendment to sec. 2 (10-a iii) of the Co-operative Societies Act which was Substituted for the words 30th June by Mah. Act 13 of 1994, section 2(b), but in rule 2(c) it is necessary to change the co-operative year.

(d)      "decree" means any decree of a Civil Court, and includes any order, decision or award referred to in sub-section (1) of section 156;

(e)      "decree holder" means any person holding a decree;

(f)       "form" means a form appended to these rules;

(g)      " Record of Rights" means,-

(i)       as respects the Bombay area of the State, the record of rights maintained under the Bombay Land Revenue Code, 1879 :

(ii)      as respects the Vidarbha region of the State, the record of rights maintained under the Madhya Pradesh Land Revenue Code, 1954;

(iii)     as respects the Hyderabad area of the State, the Settlement Register maintained under section 86 of the Hyderabad Land Revenue Act. 1317-F :

(h)     "recovery officer" means any person empowered to exercise, in any district, the powers of the Registrar under section 156;

(i)       "registered society" means society registered or deemed to be registered under the Act;

(j)       "sale officer" means an officer empowered by the Registrar, by general or special order, to attach and sell the property of defaulters or to execute any decree by attachment and sale of property :

(k)      "section" means a section of the Act.

CHAPTER II : REGISTRATION

Rule - 3.

[1][***]

Rule - [4. Application for Registration and Registration fee.

(1)     Every application for registration of a society under section 8 shall be made in Form 'A' in Marathi, Hindi or English, and shall, subject to the provisions of sub-section (2) of section 8 and sub-rules (2) and (3), be signed by the applicants and shall, in addition to four copies of the proposed bye-laws of the society, be accompanied by:

(a)      a list of persons who have contributed to the share capital, together with the amount contributed by each of them, and the entrance fee paid by them; 

(b)      a certificate from the Bank or Banks stating the credit balance therein in favour of the proposed society; 

(c)      a Scheme showing the details explaining how the working of the society will be economically sound and where the Scheme envisages the holding of immovable property by the society, the description of such property proposed to be purchased, acquired or transferred to the society: 

(d)      such other documents as may be specified in the model bye-laws, if any, framed by the Registrar; ][2]

(e)      [3][the registration fees at the following rates, namely:

(2)     Where any member of a society to be registered is a registered society, a member of the committee of such registered society shall be authorised by that committee by a resolution to sign the application for registration and bye-laws on its behalf, and a copy of such resolution shall be appended to the application. (3) Where any member of society to be registered is a firm, company, other co-operative body society registered under the Societies Registration Act. 1860, or local authority or public trust registered under any law for the time being in force for the registration of such trust then firm, company, corporate body, society, local authority or public trust as the case may be. shall duly authorise any person to sign the application for registration and the bye-laws on its behalf, and a copy of the resolution giving such authority shall be appended to the application. (4) The application shall be sent to the Registrar by registered post or delivery by hand.

NOTES: The specified societies belonged to a class which was special and distinct, by comparison between two different provisions, these provisions cannot be declared as ultra vires.- Chapadgaon Vividh Karyakari Seva Sahakari Society Ltd. v. The Collector. Ahmednagar. 1989 C.T.J. 50 Bombay H. C. (D.B.).

Collector's power to prepare voters list.- In the instant case High Court found that the Collector has issued the letter to the District Dy. Registrar, he could have invoked the powers under sub-rule (3) of rule 4 of 1971 Rules for the purpose of getting the provisional list. The moment the Collector invokes the powers under rule 4(3) it becomes abundantly clear that the society or Board of Directors have failed to proceed with the election, and therefore, coercive method are required to be taken against the society by preparing the voters list by the Collector himself and recovering amount incurred therefore as arrears of land revenue. The officers of the State Government issued order superseding Board of Directors under section 77A of the Act was justified. The High Court denied to interfere with the order. Sahebrao Narayanrao Patil v. State of Maharaslitra. 2000 (3) Mah. L. J. 644 : 2001 (Supp.) Bombay C. R. 135.

Rule - 5. Registration.

(1)     On receipt of an application under rule 4 the Registrar shall enter particulars of the application in the register of applications to be maintained in Form 'B' give a serial number to the application and issue a receipt in acknowledgement thereof.

(2)     The Registrar may give wherever necessary opportunity to the promoters to modify the proposed bye-laws before finally registering the society or rejecting the application for registration of the society. (3) On registering a society and its bye-laws under sub-section (1) of section 9, the Registrar shall as soon as may be, notify the registration of the society in the Official Gazette and grant to the society a certificate of registration signed by him and bearing his official seal and containing the registration number of the society, and the date of its registration. The Registrar shall also furnish the society with a certified copy of the bye-laws approved and registered by him.

NOTES: Object - Aims of the rule is to establish identity of voters. This rule provides safeguard and reasonable guarantee that person whose name appears in provisional list can be identified as one whose name appears in Register of members and so he is entitled to vote. - Dhondiba v. Someshwar, 1979 Mah.L.J. 311.

Under the provisions of - Rule 5(2) of the said Rules it is open for a society which has communicated the name of its delegate, to change the name of its delegate not later than 7 days before the date appointed by the Collector under rule 16 of the said Rules, for making nomination. Collector rejected the application on the ground that the Resolution effecting the change was passed after date of publication of provisional voters list. The High Court set aside the order of the Collector and directed to redecide the objection raised by the petitioner. Anandrao Vithobaji Umre v. Collector, Chandrapur. 2002 (2) Mah. L. J. 274.

Rule - 6. Form of report under section 9(2).

The report to be made by the Registrar to the State Government under sub-section (2) of section 9 shall be in Form 'C.

NOTES: Jurisdiction of the Collector.- Collector holding an enquiry and deleting names of petitioners on ground that they were not entitled to be members of the society. Collector has no jurisdiction to decide whether the order was just or not. Correctness of order is no Substituted for initial lack of jurisdiction. Dhondiba v. Someshwar, 1979 Mah.L.J. 311.

Rule - 7. Refusal of registration.

Where any society does not furnish the information in regard to the society as required by the Registrar or fulfil any of the conditions laid down in the Act or these rules, the Registrar may refuse to register that society.

Rule - 8. Matters in respect of which Registrar may direct society to make bye-laws or society may make bye-laws.

(1)     The Registrar may require a society to make bye-laws in respect of all or any of the following matters, that is to say,-

(a)      the name of the society and address of the society and its branches; (b) the area of operation: (c) the objects of the society; 

(b)      the manner in which and the limit up to which the funds of the society may be raised, the maximum share capital which any one member may "hold and the purpose to which the funds would be made applicable: 

(c)      the terms and qualifications for admission to membership; 

(d)      the privileges, rights, duties and liabilities of members including nominal, associate and sympathiser members; 

(e)      the consequences of default in payment of any sum due by a member: 

(f)       conditions regarding sale or disposal of produce of members wherever applicable; 

(g)      in the case of credit societies – 

(i)       the maximum loan admissible to members; 

(ii)      the maximum rate of interest on loans to member; 

(iii)     the conditions on which loans may be granted to members and penalties for misapplication of loans so advanced; 

(iv)    the procedure for granting extension of time for the repayment of loans and advances; 

(v)      the consequences of default in payment of any sum due; 

(vi)    the circumstances under which a loan may be recalled; 

(h)     in the case of non-credit societies, the mode of conducting business such as manufacture, purchase, sale, stock taking and other like matters; 

(i)       in the case of a composite society, that is to say, society having both credit and non-credit functions, matters referred to in clauses (i) and (j); 

(j)       the mode of holding meetings of the general body and of the committee; 

(k)      the procedure for expulsion of members; 

(l)       the manner of making, altering, abrogating bye-laws : 

(m)    the mode of appointment either by election or otherwise and removal of members of the committee and other officer, if any, their duties and powers; 

(n)     the Chairman's powers, duties and functions and his removal on his losing support of the majority; 

(o)      the method of recruitment, the conditions of service and the authority competent to fix, revise or regulate the scale of pay and allowances of salaried officers and servants of the society and the procedure to be followed in the disposal of disciplinary cases against them; 

(p)      the mode of custody and investment of funds and mode of keeping the accounts and records; 

(q)      the disposal of net profits; 

(r)      the manner in which penalty should be levied on a member who is found to be guilty of breach of bye-laws; 

(s)      appointment of a provisional committee where necessary; 

(t)       the mode of appointment and removal of committee and its powers and duties; 

(u)     the mode of convening annual and special general meetings, issue of notices, and the business which may be transacted thereat;

(v)      in the event of winding up of the society, the purpose for which surplus assets, if any, shall be utilised; 

(w)     the conduct of elections to the committee and other bodies of the society as provided in the bye-laws, including the number of members to be elected by different constituencies and appointment of Returning Officer; 

(x)      any other matters incidental to the management of its business. 

(2)     A society may make bye-laws for all or any of the following matters, that is to say,- 

(a)      the circumstances under which withdrawal from membership may be permitted; 

(b)      the procedure to be followed in cases of withdrawal, ineligibility and death of members; 

(c)      the conditions, if any, under which the transfer of share or interest of a member may be permitted; 

(d)      the method of appropriating payments made by members from whom moneys are due; 

(e)      the authorisation of an officer or officers to sign documents and to institute and defend suits and other legal proceedings on behalf of the society; 

(f)       the constitution and maintenance of various funds as required to be maintained under the provisions of the Act, rules and bye-laws: 

(g)      constitution of representative body consisting of delegates of members of the society and the mode of election of such delegates to exercise the powers of the general body of members and to specify the powers which may be exercised by such smaller body.

NOTES: Power of Registrar.- Registrar may direct society to make bye laws in respect of all or any of the matters referred in Rule 8 of the Co operative Societies Rules. But the bye-laws of the co-operative societies do not have force of law. Giridharilal Bhaulal v. State of Maharashtra. 1991 Mah.L.J. 630 : 1992 C.T.J. 175. In the case of Co-operative Central Bank Ltd. v. Additional Industrial Tribunal, Andhra Pradesh, Hyderabad. AIR 1970 SC 245, Supreme Court observed that, the bye-laws that are contemplated by the Act can be merely those which govern the internal management, business or administration of a society. They may be binding between the persons affected by them but they do not have the force of Statute. The bye-laws so framed or adopted by the Society are binding on the Society and the members but not on the non-members of the Society. Bye-laws cannot claim force of Statute even though they are framed under rule 8(a). In the case of housing societies, bye-laws cannot claim force of law so as to bind stranger non-members such as licensees from members. Licence by member without previous written consent as per bye-law cannot make the licence illegal.- Sardar Ajit Singh v. Saibaba Co-operative Housing Society Ltd.. 1978 Mah.L.J. 404.

Opportunity for explanation of absence is necessary.- A Director of a Board of Directors who was absent for four consecutive meetings, the Society without giving opportunity to explain his absence in the meetings of the Board ceased his membership while passing the resolution in the meeting of the Board of Directors. This Act is in violation of principle of natural justice and so the decision of the Board of Directors is invalid. Justice of common law requires that the giving of notice will have to be read into the bye-law.- Krishna Khore Sahakari Doodh Utpadak and Puravtha Sangh Ltd. v. Shri Mohanrao Ganapatrao Shinde. 1986 (2) Bombay C.R. 87.

Appointment of office-bearers of a society :- The definition of the word "officer" specifically includes the Chairman and Vice-Chairman, a member of the committee and any other person elected or appointed under the Act, the Rules, the Bye-laws to give directions in regards to the business of the society. If clause (o) of rule 8(1) of the Rules is read with the definition of the word "officer", the mode of appointment either by election or otherwise of any member of the Committee or Board of Directors and its office-bearers including the Chairman and Vice-Chairman would be comprehended within the said clause. The appointment of the Chairman and Vice-Chairman is thus clearly covered by clause (o) of rule 8(1). The Society is competent to make or Registrar can direct the Society to make Bye-laws upon the said question of appointment of the Chairman and Vice-Chairman.- Vasudeo Gulabrao Deshmukh v. State of Maharashtra, 1995.(2) Mah. L.J. 160.

Rule - 9. First bye-laws of society.

When a society has been registered the bye-laws of the society as approved and registered by the Registrar shall be the bye-laws of the society.

NOTES: Bye-laws must be construed in manner so as to reflect intention of its framers as also to make them effective and workable.-Wasudeo Gulabrao Deshmukh v. State of Maharashtra, 1995(2) Mah. L.J. 160. It is well settled law that over the Bye-laws the Rules will have the precedence and over the Rules the Act will have the precedence for binding effect and no Bye-laws can be adopted contrary to the provisions of either Act or the Rules.- A. I. Umrani v. Saraswat Suburban Co-op. Housing Society Ltd.. 1985 C.T.J. 357.

Rule - 10. Classification and sub-classification of societies.

(1)     After registration of a society, the Registrar shall classify the society into one or other of the following classes and sub-classes of societies prescribed below according to the principal object provided in the bye-laws -

(2)     If the Registrar alters the classification of a society from one class of society to another, or from one sub-class thereof to another, he shall issue to the society a copy of his order as in the case of an amendment of the bye-laws.

NOTES: Effect of allotment to the member of housing society :- Once the allotment letter is issued, members have right to occupy the flat which was allotted to them by the allotment letter. The Society cannot deal with or dispose of the premises without the consent of the member, after issuing allotment letter to him. Krishnqji Jamnadas Modi v. Colaba Land Co-op. Housing Society Ltd., 1980 CTJ 23 : 1979 Bombay CR 398: 1980 Mah. LR 58.

Even the Society by its By-laws and Tenancy Regulations describes the members in the Tenant Co-partnership Housing Society. There exists no relationship of landlord and tenant between Society and members. Licensee of a member cannot claim to be sub-tenant of the Society. Sardar Ajit Singh Matharu v. Saibaba Co-op. Housing Society Ltd., 1978 Mah. LJ 404 : 1980 CTJ 170. 

Tenant Co-partnership Society filed dispute under section 91 for recovery of possession of flat from its member and his licensee in occupation of flat. The High Court held that the Society is not landlord of its member or his licensee. Licensee can claim as tenant of member but not of Society. Contessa Knit Wear v. Udyog Mandir Co-op. Housing Society, AIR 1980 Bombay 374.

A category of housing societies :- If the land and buildings are owned by the Society and if the flats are allotted by the Society to its members for residential purposes it will be a Tenant Co-partnership Housing Society. Lai P. Hathi v. Venus Co-op. Housing Society Ltd.. 1986 CTJ 278.

In a Tenant Co-partnership Housing Society, a dispute was filed by allottee, member of appellant society, against the respondents for reliefs of possession of flats. The Society issued a notice whereby licence was terminated seeking the possession of the flat. The Co-operative Court has jurisdiction and the dispute falls under section 91 of the Act. It is not permissible to apply the provisions of the Bombay Rent Act. The respondent member was directed to vacate and hand over the possession of the disputed premises to the appellant society. Uttara Co-op. Housing Society Ltd., Pune v. Purshottam Bhimrao Vijapurkar, 1987 CTJ 28. In a dispute between Housing Society and a tenant held that the dispute is touching the business of the Society. Ishujaribat Tahilram v. Ramchand Vallabhdas Katara, 1987 CTJ 438. The purpose for valuation of shares under rule 23 on withdrawal of the membership by resignation is for payment or refund of the amount payable by the Society. The Society is not entitled to withhold the same for any other reasons once the member's resignation is accepted without showing any liability towards him, for the payment to the Society. Dilip Anandrao Shinde v. Keshav Ramarao Desai, 1987 CTJ 472. The appellant have purchased the property in dispute by conveyance deed from their predecessor-in-title and the property included the passage in dispute and thereafter they have joined the Society. Therefore, the Society would not be Tenant Co-partnership Society, it would be a Tenant Ownership Society under Rule 10 though this description may not be precisely applicable to such Society. There was no iota of prima facie case for grant orders of injunction against the appellants either restraining them from parting with possession or transferring it in favour of third party. Dr. (Mrs.) Tarlika H. Shah v. Standard House Co-op. Hsg. Society Ltd., 1990 CTJ 76.

Sub-Society in a society :- Neither section 4 nor section 79A of the Maharashtra Co-operative Societies Act conferred power on the State Government, though there is dearth of accommodation, that does not enable the State to compel the housing society to act contrary to bye-laws or to foist new members who are not acceptable to the existing members of the society. The directive was nothing but a charter to permit breach of such agreements under which the plots were secured with compulsion to amend bye-laws only with a view to validate such infraction. The Notification issued by the State Government was without any authority or jurisdiction and was, therefore, liable to be struck down. The direction issued by the State Government infringed upon right of citizen to form and continue the association and to determine who shall be a member of such association. The State Government was forcing a member on such association and such compulsion clearly amounted to infraction of the fundamental rights. Karve Nagar Sahakari Graha Rachana Sanstha Maryadit v. State of Maharashtra, 1989 Mah. LJ 320.

Rule - 11. Maintenance of register.

(1)     The register to be maintained by the Registrar under sub-section (4) of section 9 shall be in Form 'D'.

(2)     The Registrar shall divide the register into parts, one for each district in the State. A society shall be registered in that part for a district in which its head office is situate. (3) The Registrar shall assign for each district and each class or subclass of societies, a code symbol, for giving registration numbers to the societies and the societies shall be registered from the dates specified by him.

Rule - 12. Amendment of bye-laws.

(1)     Subject to the provisions of this rule, bye-laws of a society may be amended by passing a resolution at a general meeting of the society held for that purpose.

(2)     The society shall give due notice in accordance with its bye-laws to all the members for considering any amendment thereof. 

(3)     An amendment shall be deemed to have been duly passed, if a resolution in that behalf is passed in a general meeting by not less than two-thirds of the members present thereat, and voting. 

(4)     After the resolution is passed, a copy thereof shall, within a period of two months from the date of the meeting at which the resolution was passed be furnished to the Registrar along with- 

(a)      a copy of the relevant bye-laws in force with amendments proposed to be made in pursuance of the resolution, together with reasons justifying such amendments; 

(b)      four copies of the text of the bye-laws as it would stand after amendment, signed by the officers duly authorised in this behalf by the committee of the society; 

(c)      a copy of the notice given to the members of the society of the proposal to amend the bye-laws; 

(d)      such other information as may be required by the Registrar. 

(5)     On receipt of a copy of the resolution and other particulars referred to in sub-rule (4). the Registrar shall examine the amendment proposed by the society and if he is satisfied that the amendment is not contrary to the Act or the Rules and is in the interest of the society and co-operative movements, he may register the amendment and issue to the society a copy of the amendment certified by him under sub-section (2) of Section 13. Where the Registrar is of opinion that proposed amendment may be accepted subject to any modification, he may indicate to the society such modification after explaining in writing reasons therefor.

NOTES: Power to amend bye-law - The General Body has power to amend the Bye-law. The Board of the Directors cannot amend the Bye-laws. Eknath Vishnu Hinge v. State of Maharashtra and others, 1985 (1) Bombay CR 598 : 1985 Mah. LJ 727 : 1986 Mah. LR 113 (Bombay).

Rule - 13. Manner of calling upon society to make amendment to bye-laws.

(1)     Subject to the provisions of this rule, the Registrar may by serving a notice in Form 'E' call upon a society to make such amendment to the bye-laws of the society as he considers to be necessary or desirable in its interest, within a period not exceeding two months from the date of service of notice. The notice shall state the exact amendment which the society should make.

(2)     For the purposes of sub-section (2) of section 14, the Registrar shall send a copy of the notice to the State Federal Society duly notified under that sub-section with a request to offer its comments on the amendment within such time as may be specified by him. If the State Federal Society fails to offer its comments within the specified time, it may be presumed by the Registrar that the said society has no objection to the amendment. 

(3)     If after considering the comments of the State Federal Society, if any, the Registrar considers that there is no objection to registering the amendment, he shall send a written notice in Form 'F' by registered post to the registered address of the society calling upon it to show cause in writing or through a properly authorised representative to appear before the Registrar on the date specified in the notice, as to why the proposed amendment should not be registered within the time specified in the notice in Form 'E'. 

(4)     After the expiry of the period specified in the notice in Form 'E' and after considering the reply, if any, of the society and the views, if any. of the State Federal Society on such reply, the Registrar may, after duly considering the objections of the society (if any) to the proposed amendment, register the amendment.

NOTES:  See Notifications under sec. 14.

Rule - 14. Change in name of society.

(1)     The name of a society may be changed under section 15 so however that it does not refer to any caste or religious denomination and is not inconsistent with the objects of society.

(2)     Every change in the name of a society shall be made by an amendment of its bye-laws and shall be notified in the Official Gazette. 

(3)     After the change in the name is approved by the Registrar, the society shall send the original registration certificate for amendment to the Registrar, who shall return the same to the society duly amended. 

(4)     The Registrar shall enter the new name in the register of societies maintained by him.

Rule - 15. Change of liability.

(1)     The change of liability of a society from unlimited to limited, and vice versa or in terms of multiple of share capital, shall be secured by passing a resolution in that behalf at a general meeting of the society indicating in clear terms the manner of changing the liability. The society shall give thirty days' notice in writing of such meeting to all its members and creditors and shall furnish them with copies of the resolution proposed to be moved at the meeting. After the resolution is duly moved and passed a copy thereof shall be sent to the Registrar within thirty days of its passing.

(2)     Every notice to be given by the society under sub-section (2) of section 16 shall be sent by post under certificate of posting or otherwise to the address of each of its members and creditors as recorded in the books of the society. A copy of such notice shall be exhibited on the notice-board of the society and a copy shall also be sent to the Registrar for exhibition on the notice-board in his office; and thereupon, notice of the resolution to change the form or extent of its liability shall be deemed to have been duly given to all members and creditors, notice not being sent to their correct address or notice not being received by them, notwithstanding. 

(3)     For the purpose of determining the claims of a member under clause (b) of sub-section (4) of section 16 the value of share of a member in a society shall be ascertained as follows : 

(a)      In the case of a society with unlimited liability the value of a share shall be the actual amount received by the society in respect of such share. 

(b)      In the case of a society with limited liability, the value of a share shall be the amount arrived at by a valuation based on the financial position of the society as shown in the last audited balance sheet, provided that it shall not exceed the actual amount received by the society in respect of such share. 

(4)     Any member or creditor desiring to exercise his option under Sub-section (2) of section 16 shall inform the society accordingly in writing, and when he does not propose to withdraw his entire shares or deposits, the member or creditor shall clearly indicate in writing the extent of his withdrawal. The society shall examine and draw up a Scheme for orderly payment of all claims in an equitable manner including shares, the value of which shall be ascertained in accordance with the provisions of sub-rule (3). The Scheme may also provide for settlement of claims by mutual agreement. Where the Registrar does not approve the Scheme on the ground .of impracticability or undesirability, the resolutions passed by the society under sub-rule (1) shall be ineffective, and the form and extent of liability of a society shall not be deemed to be changed in accordance with resolution passed aforesaid. 

(5)     After the Registrar approves the Schemes the society shall make payments to members and creditors as provided in clause (b) of sub-section (4) of section 16, make a report to that effect to the Registrar and furnish the Registrar with a proposal to amend the bye-laws of the society duly passed in that behalf. On receipt of the proposal, the Registrar shall register the amendment in accordance with the provisions of section 13.

Rule - 16. Amalgamation, transfer of assets and liabilities, division or conversion of societies.

(1)     Every society desiring to effect amalgamation, transfer of assets and liabilities, division or conversion shall make an application to the Registrar in that behalf, giving full details about such amalgamation, transfer, division or as the case may be, conversion.

(2)     On receipt of such application, the Registrar may, after examining the details furnished in the application and other particulars which he may call upon the society to furnish, give his approval to the amalgamation, transfer, division or conversion, if he considers such amalgamation, transfer, division or conversion, as the case may be, to be in the interest of the society. 

(3)     After the receipt of Registrar's approval under sub-rule (2) the society shall convene a special general meeting by giving notice of at least 15 clear days to all its members and creditors and pass resolution for amalgamation, transfer of assets and liabilities, division or conversion, as the case may be, by two-third majority of the members present and voting at the meeting. The resolution so passed shall contain purpose and the full Scheme indicating how the proposed amalgamation, transfer or division or conversion would be useful to the society and be given effect to. Where the Scheme does not involve transfer of liabilities of the society to another society, a statement to that effect shall be made in the application to be made under sub-rule (1). Where the Scheme involves transfer of liabilities of the society, the society shall give written notice in Form 'G' to all its members, creditors and other persons whose interests are likely to be affected by such transfer. The notice shall also be published in at least one newspaper in circulation in the district in which the society's office is situated and copy thereof shall be exhibited on the notice-board in the society's and Registrar's office: 

[15][Provided that the State Government may in the case of any society, dispense with the giving of such notice, regard being had to the extent of liabilities, the financial position of the society and its members and other relevant factors pertaining to such society.] 

(4)     Within one month from the date of notice referred to in sub-rule (3), the members, creditors and other persons whose interests are likely to be affected by the transfer of the society's liabilities may exercise their option as required by clause (i) of the proviso to sub-section (1) of section 17 failing which they shall be deemed to have assented to the transfer of liabilities of the society to another society. 

(5)     The society shall meet in full or otherwise satisfy all claims of members and creditors and other interested persons who exercise the option. 

(6)     The society shall submit a report to the Registrar of the action taken. by it and request him to give effect to its decision for amalgamation, transfer, division or conversion by registering the amalgamated or converted society or new society as the case may be, and cancelling the registration of the societies which have been amalgamated, divided or converted. 

(7)     On receipt of the report from the society under sub-rule (6), the Registrar shallafter satisfying himself that the procedure has been properly followed, register the amalgamated, divided or converted societies and cancel the registration of the societies which have been amalgamated, divided or converted.

Rule - 17. Direction by Registrar for amalgamation, division and reorganisation of societies.

(1)     Before issuing any order under Sub-section (1) of section 18 providing for the amalgamation, division or reorganisation of any society or societies, the Registrar shall prepare a draft Scheme in respect of such amalgamation, diyision or reorganisation stating in particular the manner in which the new committee or committees of the society or societies resulting from such amalgamation, conversion or reorganisation shall be constituted and the bye-laws which such society or societies shall follow. The Registrar shall then consult such federal society as may be notified by the State Government in the Official Gazette, and after considering the suggestions, if any, that will be made by such federal society, shall send a copy of the draft of the order proposed to be issued by him under sub-section (1) of section 18, to the society or each of the societies concerned calling upon it or them or invite objections or suggestions from any member or class of members thereof or from any creditor or class of creditors and to submit such objections and suggestions together with its own or their own suggestions and objections within a period of not less than two months from the date on which the copy of the draft aforesaid was received by it or them. 

(2)     The Registrar shall consider all such suggestions and objections and make such modifications in the draft order as may seem to him desirable in the light of those suggestions or objections and then issue a final order under sub-section (1) of section 18. 

(3)     Any member or creditor of each of the societies to be amalgamated, divided or reorganised, who has objected to the Scheme of amalgamation, division or reorganisation within the period specified in sub-rule (1), may apply to the Registrar for payment of his share on interest, if he be a member, and the amount in satisfaction of his dues, if he be a creditor. Such application shall be separate and distinct from the objection or suggestion which he may have submitted to the society or the Registrar under clause (b) of sub-section (2) of section 18. It shall be competent for the Registrar to nominate an officer not below the rank of a Deputy Registrar to investigate such applications and to determine the payments required to be made to the members or creditors, as the case may be. 

(4)     Subject to the provisions of the Act, the rules and the bye-laws, the Registrar may by order require the society concerned to meet in full or satisfy otherwise all due claims of the members and creditors and thereupon the society shall be bound to meet in full or satisfy otherwise all due claims of the members and creditors within such time as may be specified by the Registrar in the order.

Rule - 18. Reconstruction of a society.

(1)     An application for re-construction of a society under section 19 may be made in Form 'H'. On receipt of such application the Registrar may, taking into consideration the compromise or arrangement for reconstruction of the society, if he thinks fit, prepare a draft order indicating –

(i)       the manner in which the amounts payable by the society to its creditors should be paid and the amounts recoverable from its debtor members should be recovered, 

(ii)      the manner in which the share capital, if any. of such members should be reduced, 

(iii)     the manner in which the Scheme of reconstruction should be implemented, and 

(iv)    the manner in which the bye-laws of the society will stand amended in order to give effect to the Scheme of reconstruction. 

A copy of the draft order shall be exhibited on the notice-board of the society and a copy thereof shall be exhibited on the notice board of the Registrar's office inviting objections and suggestions from all those interested within a specified time, which shall not exceed one month. 

(2)     After taking into consideration the objections and suggestions (if any) received, the Registrar may issue an order improving such reconstruction or staying further proceedings in respect of such reconstruction. On issue of an order approving the reconstruction, the society shall stand reconstructed and the bye-laws of the society shall be modified to that effect and to that extent.

Rule - [18A. Conditions for realising the assets and liquidating the liabilities of the de-registered society by the Official Assignee.

(1)     The Official Assignee shall work under the general control, superintendence and directions of the Registrar.

(2)     He shall have the following powers for the purpose of realising the assets and for liquidating the liabilities of the society which is de registered under the provisions of sub-section (1) of section 21-A, namely:

(a)      he shall have the power to institute and defend any suit and other legal proceedings, civil and criminal, on behalf of the de-registered society in the name of his office; 

(b)      to carry on the business of the society, so far as may be necessary for the beneficial completion of the de-registration proceedings;

(c)      to sell such immovable and movable property and actionable claims of the de-registered society generally by public auction or in exceptional cases by private contract, with prior approval of the Registrar; 

(d)      to investigate all the claims against the de-registered society and subject to the provisions of the Act, to decide questions of priority arising out of such claims and to pay any class or classes of creditors in full or rateable according to the amount of such debts. However, the Official Assignee shall pay all the liabilities in the following priority namely:

(i)       his salaries, remuneration, allowances and other claims; 

(ii)      wages and other payments to be made to the employees of the de-registered society including arrears; 

(iii)     expenses required for beneficial completion of de-registration proceedings; 

(iv)    taxes, charges, fees and revenues etc., payable under any other law for the time being in force and such other dues which are recoverable as arrears of land revenue; 

(v)      any dues payable under the decree of any Court; 

(vi)    deposits; 

(vii)   loans payable to Government of India; 

(viii)  loans payable to the State Government; 

(ix)    any other dues payable to the Government of India; 

(x)      any other dues payable to the State Government; 

(xi)    loans guaranteed by the Government of India; 

(xii)   loans guaranteed by the State Government; 

(xiii)  gecured loans; 

(xiv)  unsecured loans; 

(xv)   shares of Government of India; 

(xvi)  shares of State Government; 

(xvii) shares of any financial institution;

(xviii)   shares of Co-operative Societies; 

(xix)  shares of other body corporates; 

(xx)   shares of members; 

(e)      to make any compromise or arrangement, with creditors or persons claiming to be the creditors of having or alleging themselves to have claims, present or future, whereby he may be rendered liable; 

(f)       to compromise all calls, or liabilities to calls and debts and liabilities capable of resulting in debts, and all claims present or future, certain or contingent, subsisting or supposed to subsist between him and contributory or alleged contributory or other debtors or person apprehending liability to him and all questions in any way relating to or affecting the assets of de-registration proceedings on such terms as may be agreed, and to take any security for the diSchedulearge of any such calls, liability, debt or claim and give a complete diSchedulearge in respect thereof: 

(g)      to determine from time to time, after giving an opportunity to answer the claims, the contribution to be made, or remaining to be made by the members or past members of the de-registered society or by the estates, nominees, heirs or legal representatives of the deceased members of de-registered society, or by the officer, past officer of the estate or nominee, heirs or legal representatives of deceased officer to the assets of de-registered society, such contribution of debts and dues from such members or officers of the de-registered society; 

(h)     to determine from whom and in what proportions the cost of de-registration and that of the proceedings of de-registration shall be borne; 

(i)       to fix the time or times within which the creditors shall prove their debts and claims; 

(j)       to summon and enforce the attendance of witnesses and to compel the production of any books, accounts, documents, securities, cash or other properties belonging to the society de-registered which have vested in him but are in the possession of any person or body corporate by same means and in the same manner as provided in the case of civil case under the Code of Civil Procedure, 1908: 

(k)      to do all acts and to execute in his name on behalf of the society de-registered all deeds, receipts and other documents as may be necessary for finalisation of proceedings of de-registration. 

(3)     Immediately on his appointment, the Official Assignee shall proceed to realise the assets of the society de-registered by sale or otherwise and liquidate the liabilities. 

(4)     The Official Assignee, during the tenure of office, present accounts of his receipts, not less than twice in each year to the Registrar. The Registrar shall cause the accounts to be audited in such manner as he thinks fit and for the purpose of audit, the Official Assignee shall furnish to the Registrar with such accounts and information as he, or the person appointed by him may require. 

(5)     The Official Assignee shall on demand and on payment of such fee as he may determine, supply a copy of audited accounts to contributory. 

(6)     The Official Assignee shall pay such fees as the Registrar may direct for the audit of accounts and books kept by him or by the society de-registered. 

(7)     He shall be held liable for any irregularities which might be discovered in the course or as a result of audit or otherwise in respect of transaction subsequent to his taking over the charges of Official Assignee and may be proceeded against as if it were an act against which action should be taken under section 88 : Provided that, no such action shall be taken unless the irregularities have caused or likely to cause the loss, damage and have occurred due to gross negligence or an act of omission or commission in carrying out duties and functions assigned to him. 

(8)     He shall, after settling assets and liabilities of the society de-registered as they stood on the date of his appointment, proceed to determine the contribution to be made or remaining to be made to the assets of the society de-registered by any person and the property of such persons and call upon each of them by order, to pay the amount specified in such order as contribution and as cost of the proceedings after de-registration as determined under this rule after approval of the Registrar. Every such order shall be submitted for approval to the Registrar who may modify it or refer it back to the Official Assignee for further enquiry or further action. 

(9)     If the sum assessed against any person is not recovered, the Official Assignee may issue Substitutedidiary order or orders against any other person or persons to the extent of the liability of each for the debts the society de-registered until the whole amount due from such person is recovered. The provision of foregoing rule shall mutatis mutandis apply to such order. 

(10)   He shall submit the progress report and such other reports and statements to the Registrar, as the Registrar may require. 

(11)   He may empower one or more persons by general or special order in writing to make collection and to grant valid receipts on his behalf. 

(12)   He shall have power to call meetings of creditors and contributors and it shall be obligatory on all such persons to attend such meetings. 

(13)   The Official Assignee may, at any time, be removed by the Registrar and he shall on such removal hand over all the property and documents to such persons as the Registrar may direct. 

(14)   The Official Assignee shall exercise only those powers under the Act and these rules, as may be determined by the Registrar by general or special order from time to time and in the manner and subject to the conditions he may impose. 

(15)   He shall maintain such books and accounts as the Registrar may require him to keep. 

(16)   He shall submit a final report to the Registrar. On acceptance of such report by the Registrar, the Official Assignee shall, within 30 days, arrange to transfer the entire surplus to the Registrar. 

(17)   On the day of acceptance of final report of the Official Assignee by the Registrar, all the assets of the society de-registered, shall stand vested in the Registrar and the liabilities, if any, remained to have been liquidated, shall stand liquidated.

Rule - 18B. Purposes for investment of surplus by the Registrar.

(1)     The Registrar shall dispose of the surplus vested in him under rule 18-A in any manner at his discretion for the following purposes, namely: 

(i)       any object of public utility, welfare activity, education, relief to poor, medical relief and for any other charitable purpose defined in section 2 of the Charitable Endowment Act, 1890; 

(ii)      any society registered with similar object which the society de-registered had. 

(2)     After the Registrar accepts final report and the surplus is transferred to him, he may terminate the appointment of the Official Assignee, and from the date of such order the person appointed as Official Assignee shall cease to function].[16]

Rule - [18C. Manner of issue of public notice of the proceedings of de-registration of society.

(1)     Where the number of members of the society is so large and it is not possible to ascertain the correct addresses of all such members from the records of the office of the Registrar, and in the opinion of the Registrar it is not practicable to serve notice of hearing on each such individual member as contemplated under the proviso to sub-section (1) of section 21 A, a public notice of the proceedings of the de-registration of society shall be published in two local newspapers having wide circulation in that locality in which the registered office of the society proposed for de-registration is situated, and of which at least one shall be in the Marathi language. A copy of the said public notice shall be sent to the registered address of the society by registered post acknowledgement due together with the directives to display it in the office of the society. Such copy of the notice shall also be displayed on the notice-board in the office of the Registering Authority. If the notice sent by such registered post is returned undelivered, the notice shall be treated as having been duly served, but a copy of the said notice shall be displayed on the notice-board in the office of the society.

(2)     Such public notice shall contain amongst others, the following items, namely:

(a)      the reasons for initiating the proceedings for de-registration of the society; 

(b)      the date by which any aggrieved person may submit his written statements as to why the proposed action should not be taken; 

(c)      the date on which and the place where the Registrar shall give an opportunity of being heard to any aggrieved person:

(d)      the proposed action contemplated under the provisions of Sub-sections (2) and (3) of section 21 A.][17]

CHAPTER III MEMBERS AND THEIR RIGHTS AND LIABILITIES

Rule - 19. Conditions to be complied with for admission for membership, etc.

No person shall be admitted as a member of a society unless,-

(i)       he has applied in writing in the form laid down by the society or in the form specified by the Registrar, if any, for membership; 

(ii)      his application is approved by the committee of the society in pursuance of the powers conferred on it in that behalf and subject to such resolution as the general body of members may in pursuance of the powers conferred on it in that behalf from time to time pass, and in the case of nominal,-associate or sympathiser member by an officer of the society authorised in that behalf by the committee; 

(iii)     he has fulfilled all other conditions laid down in the Act, the rules and the bye-laws; 

(iv)    in case of firm, company or body corporate, society registered under the Societies Registration Act, 1860, a public trust registered under any law for the time being in force relating to registration of public trusts or a local authority, the application for membership is accompanied by a resolution authorising it to apply for such membership.

NOTES: Admission for membership :- The son cannot be treated as member of the Society after the death of his father, unless he makes an application and unless he is admitted as member of the Society. G. G. Sujadekar v. Shelad Sanuta Sahakar Farming Society Ltd., 1966 CTD 190.

Validity of membership :- Registrar has power to decide whether a particular person is validly admitted as member of the Society or not. Under Section 91, the Co-op. Court has no power to decide the same issue'. Baliram Sopan Borawke v. Samvatsar Vibhag Big Bagayatdar Vividh Karyakari Society Ltd.. 1981 CTJ 312.

Jurisdiction of the Co-operative Court :- The Co-op. Court has no jurisdiction to try and dispose of the disputed question whether the applicant, a non-member of Society, was made a nominal member of the Society. R. C. Bannerji v. Sridhar Ganesh Pande, 1986 CTJ 445.

Relatives of Director can become members of the Society Bank. Jawaharlal Shantilal Shah v. Kopargaon Taluka Merchants Co-operative Bank Ltd.; Ramanlal Madanlal Kale v. Koparagaon Taluka Merchants Co-operative Bank Ltd., 1986 CTJ 213.

Members and their rights :- Society always is at liberty to recover the balance amount of the cost of construction. Assisi Co-op. Housing Society Ltd.. Bombay v. K. A. Antony, 1987 CTJ 130.

Member has right to transfer his flat:A flat held by a member in a Tenant Co-partnership Society, can be attached and sold in execution of decree which shows that a member has a saleable interest in a flat allotted to him. Member has right to transfer his flat and Society cannot put unreasonable restrictions on the said right. Ramesh Himmatlal Shah v. Harsukh Jadhavji Joshi, AIR 1975 SC 1470. If a person wants to be a fulfledged member or nominal member he has to submit an application in writing and that application may be approved by the resolution by the Committee if the Committee is authorised by the General Body in that behalf. In accordance with Rule 19 the previous Managing Committee of the said Society has after discussion, approved the application for nominal membership of the respondents. See ibid.

Sugarcane growers' membership:When the membership of sugar cane growers were granted by the Chairman of Sugar factory without following procedure by the Act etc.: the membership so granted to specific member was set aside and directed the Jt. Director to hold inquiry.- Eknath Ashiram v. State. 1991 CTJ 34 Bombay H.C.

Rule - [19A. Procedure for tendering application to the Registrar for membership under section 23(1A):

(1)     Where a Society has refused to accept the application for membership from eligible person, such person shall tender an application to the Registrar in Form 'H-l' together with requisite share money and entrance fee.

(2)     The Registrar, on receipt of such application, shall forward the same to the Society concerned together with requisite share money and entrance fee within thirty days from the date of its receipts. 

(3)     The Society shall take the decision and communicate the same to the applicant within sixty days from the date of receipt of such application as provided in sub-rule (2) and if no decision is communicated to the applicant within the said period of sixty days, the applicant shall be deemed to have been admitted as a member of such society. 

(4)     In case the society refuses to admit the applicant as its member, it shall communicate the decision within the period of sixty days mentioned in sub-rule (3) with reasons therefor and refund the share money and entrance fee with such communication. If the society fails to refund the said amount. it shall be liable to pay interest at 15% per annum on the said amount from the date of such communication and the said amount if not paid, shall be recovered as an arrears of land revenue.][18]

Rule - 20. Procedure for admission of joint members and minors and persons of unsound mind inheriting the share or interest of deceased member.

(1)     A society may admit joint members provided they make a declaration in writing that the person whose name stands first in the share certificate shall have the right to vote and all the liabilities will be borne jointly and severally by them as provided in the Act, rules and bye-laws.

(2)     In accordance with the procedure laid down in its bye-laws and these rules for admission of any member, a society may admit minors and persons of unsound mind inheriting share or interest of deceased members as its members through their legal representatives or guardians respectively. The members so admitted will enjoy such rights and liabilities through such legal representatives or guardians as are laid down in the bye-laws of the society that are consistent with the Act and rules.

Rule - 21. Withdrawal of membership.

(1)     Subject to the provisions of the Act. the rules and the bye-laws of the society, a member may withdraw from the society after giving three months' notice to the Secretary of the society of his intention to resign his membership of the society.

(2)     No resignation of a membership shall be accepted by the society unless the member has paid in full, his dues, if any, to the society and has also cleared his liability, if any, as surety to any other member or otherwise. 

(3)     The withdrawal from membership shall also be subject to such restrictions regarding the maximum amount of share capital that can be refunded in a year or as may have been provided for in the Act, rules or bye-laws of the society.

(4)     Any member, whose resignation has been accepted by the society, or any heir or legal representative of deceased member, may demand refund of the share capital held by such member or deceased member and the society shall, subject to the provisions of sub-section (3) of section 29 and subject to the provisions of the bye-laws refund the amount within six months from the acceptance of the resignation or as the case may be, the date of demand made by the heir or legal representative of the deceased member.

(5)     In all cases where share capital is to be refunded, valuation of the shares to be refunded shall be made in accordance with the provisions contained in rule 23.

NOTES: Resignation of the applicant member was accepted that does not mean there was no views for accepting the resignation. Sri Parisa Babu Chougule v. Shetkari Sahakari Sakhar Karkhana Ltd.. Sangli, 1985 CTJ 52. Members could not be punished for the reason that the Society did not pass a resolution for acceptance of the resignations. Under Rule 21 member has right to withdraw his membership of the Society. Ashok Sahakari Sakhar Karkhana Ltd., Ahmednagar v. Tanhibai Ganpatrao Jagtap. 1986 CTJ 550. Acceptance of resignation of member by the Managing Committee cannot be treated as an illegal one. There was no other regulation or any other provision requiring that the Managing Committee after accepting the resignation to put the matter before the General Body. S.A. Pitale v. The L.I.C. Employees' Shramasaphalya Co-op. Housing Society Ltd. and another. 1986 CTJ 583.

Rule - 22. Voting rights of individual members in a Federal Society.

(1)     In the case of federal societies, the voting rights of individual members (which terms shall include firm, company or body corporate, society registered under Societies Registration Act, 1860, State Government, local authority, and public trust registered under any law for the time being in force relating to registration of public trusts but shall not include a society) may be regulated as follows: 

(a)      Immediately after the 30th June of every year and as soon as possible before the annual general meeting, individual members admitted to membership up to the 30th June of the preceding year (hereinafter referred to as "the relevant date") shall elect delegates equal to one-fourth of the number of societies admitted to membership up to the relevant date or one delegate for every twenty-five individual members (fractions being neglected) whichever is less. The delegates so elected will continue in office till their successors are elected after 30th June, next week. 

(b)      Every society through its properly authorised representative and every delegate referred to in clause (a) above shall have one vote in the general meeting. 

(c)      The quorum for the meeting shall be one-fifth of the total number of delegates and representatives of the societies or 25 whichever is less : Provided that the delegates shall not at any time in the meeting exceed one-fourth of the number of representatives of the societies. 

(d)      The election of delegates shall be held in accordance with the provisions of the bye-laws. 

(e)      Any vacancy of a delegate caused on account of cessation of membership shall be filled by the delegates by co-opting one of the individual members. 

(2)     Unless, otherwise provided by the Registrar in respect of any particular society, the delegates on the committee or the Board of Directors, as the case may be, shall not at any time exceed one-third of the number of representatives of societies (fraction being neglected).

Rule - 23. Valuation of shares.

(1)     Where a member of society ceases to be a member thereof, the sum representing the value of his share or interest in the share capital of the society to be paid to him or his nominee, heir or legal representative, as the case may be, shall be ascertained in the following manner namely:

(i)       In the case of a society with unlimited liability, it shall be the actual amount received by the society in respect of such share or interest; 

(ii)      In the case of a society with limited liability, it shall be the amount arrived at by a valuation based on the financial position of the society as shown in the last audited balance sheet preceding the cessation of membership: Provided that the amount so ascertained shall not exceed the actual amount received by the society in respect of such share or interest. 

(2)     Where a person is allotted a share by a society, the payment required to be made therefor shall not exceed the face value of the share notwithstanding anything contained in the bye-laws of the society. 

(3)     When a share is transferred by a member to another member duly admitted as a member of a society, the transferee shall not be required to pay anything in excess of the value of the share determined in accordance with sub-rule (1).

NOTES: The purpose for valuation of shares under rule 23 on withdrawal of the membership by resignation is for payment or refund of the amount payable by the Society. The Society is not entitled to withhold the same for any other reason once the member's resignation is accepted without showing any liability towards him, for the payment to the Society. Dilip Anandrao Shinde v. Keshao Ramarao Desai. 1987 CTJ 472.

Rule - 24. Procedure for transfer of shares.

(1)     No transfer of shares shall be effective unless, -

(a)      it is made in accordance with the provisions of the bye-laws: 

(b)      a clear fifteen days notice in writing is given to the society indicating therein the name of the proposed transferee, his consent, his application for membership, where necessary, and the value proposed to be paid by the transferee; 

(c)      all liabilities of the transferor due to the society are discharged; and 

(d)      the transfer is registered in the books of the society. 

(2)     Any charge in favour of the society on the share so transferred will continue unless discharged otherwise.

Rule - 25. Nomination of persons.

(1)     For the purpose of transfer of his share or interest Under sub-section (1) of section 30, a member of a society may, by a document signed by him or by making a statement in any book kept for the purpose by the society nominate any person or persons. Where the nomination is made by a document, such document shall be deposited with the society during the member's lifetime and where the nomination is made by a statement, such statement shall be signed by the member and attested by one witness.

(2)     The nomination made under sub-rule (1) may be revoked or varied by any other nomination made in accordance with that sub-rule. 

(3)     (i) Where a member of a society has not made any nomination, the society shall on the member's death, by a public notice exhibited at the office of the society, invite claims or objections for the proposed transfer of the share or interest of the deceased within the time specified in the notice. 

(ii) After taking into consideration the claim or objections received in reply to the notice or otherwise, and after making such inquiries as the committee considers proper in the circumstances prevailing, the committee shall decide as to the person who in its opinion is the heir or the legal representative of the deceased member and proceed to take action under section 30.

NOTES: Nomination of persons :- Nominee is a mere trustee with whom Society can initially or prima facie deal with and after the death of a member all the heirs of the deceased member will have the right of succession to the property and nominee cannot exclude other heirs. Smt. Sarbati Devi v. Smt. Usha Devi, AIR 1984 SC 346.

Status of nomination:Nomination cannot create title in the property forming part of estate of the deceased in favour of the nominee. Gopal Vishnu Ghatnekar v. Madhukar Vishnu Ghatnekar, 1982 Mah. LJ 65 : 1982 Mah. LR 122 : 1981 Bombay CR 210. Flat was allotted to a member of a Society who had nominated her husband as a nominee after her death. Husband died without transferring her flat. Dispute regarding the possession of flat is tenable under Section 91. The Society did not follow the procedure laid down in Rule 25. The Court held that the Society should not dispose of the flat for recovering the arrears etc., after following the proper procedure. A. Rqjam, Bombay v. Radha Sadan Co-op. Housing Society Ltd., 1986 CTJ 114. To declare as the only legitimate person, he Las to produce succession certificate and has to file dispute in time. Sadashiv Vinayak Godbole v. The Panvel Co-op. Housing Society Ltd.. Panvel, 1985 CTJ 485.

Rule - 26. Registration of nominations.

The name and address of every person nominated for the purposes of sub-section (1) of Section 30 and any revocation or variation of such nomination shall be entered in the register kept under Rule 32.

Rule - 27. Supply of copies of documents by societies and fees therefor.

(1)     A member of a society requiring a copy of any of the documents mentioned in sub-section (1) of section 32. may apply to the society for the same. Every such application shall be accompanied by a deposit of such amount as may be decided by the committee, for recovering the cost of preparing the copies according to the following scale, namely: 

for every 200 words or less- 

On receipt of the deposit, the society shall issue a receipt for the same. (2) Where the copies are prepared, the amount due from the member according to the scale laid down in sub-rule (1), shall be retained by the society as copying fees and the surplus amount, if any, remaining out of the deposit shall be refunded to the member at the time of supplying copies. Where the amount deposited by the member is found to be insufficient to cover the copying fees, the member shall be called upon to pay the deficit before taking delivery of the copies. (3) The copies shall be certified and signed as true copies by any person duly authorised in this behalf by the committee or under the bye-laws of the society.

Rule - 28. Expulsion of Members.

Any member who has been persistently defaulting payment of his dues or has been failing to comply with the provisions of the bye-laws regarding sales of his produce through the society or other matters in connection with his dealings with the society or who. in the opinion of the committee, has brought disrepute to the society or has done other acts detrimental to the interest or proper working of the society may in accordance with the provisions of sub-section (1) of section 35. be expelled from the society. Expulsion from membership may involve forfeiture of shares held by the member.

NOTES: Expulsion.- Society by indirect method without using the word 'expulsion' actually expelled the disputants in violation of the Act and the Rules. The cancellation of share certificates is illegal. The Atomica Co op. Housing Society Ltd.. Bombay v. B.R. Ballal and otheRs. 1988 CTJ 292 : 1988 (2) Bombay CR 104.

Expulsion of member - resolution passed unanimously.- The decision of expulsion from membership of the society under bye-laws 12(l)(a), (g) and (h) and also under section 35 of the Act r/w rules 28 and 29 was being taken. The resolution as passed would clearly indicate that there was serious deliberation and each aspect was thoroughly examined by the general body of the society and it had taken a decision regarding each of the grounds. The general body unanimously passed the amended resolution, if that is so. it is not possible to take view that entire decision of the general body is vitiated. V. Slireeniuasan v. Stale of Maharashtra. 2003 (3) Bombay C. R. 134 : 2003 (3) Mah. L. J. 189.

Revisional powers in case of expulsion of members :- Revisional powers are conferred only to be exercised in cases where orders under revision are either totally unjust or unreasonable or in breach of the principles of natural justice or- in violation of the legal requirements involved. The Bombay Suburban District Govt. Servants Co-op. Hsg. Soc. Ltd. v.- D.K. Gawand. 1981 CTJ 197.

Rule - 29. Procedure for Expulsion of Members.

(1)     Where any member of a society proposes to bring resolution for expulsion of any other member he shall give a written notice thereof, to the Chairman of the society. On receipt of notice or when the committee itself decides to bring in such resolution, the consideration of such resolution shall be included in the agenda for the next general meeting and a notice thereof shall be given to the member against whom such resolution is proposed to be brought, calling upon him to be present at the general meeting, to be held not earlier than a period of one month from the date of such notice and to show cause against expulsion to the general body of members. After hearing the member, if present, or after taking into consideration any written representation which he might have sent, the general body of members shall proceed to consider the resolution.

(2)     When a resolution passed in accordance with sub-rule (1) is sent to the Registrar or otherwise, brought to his notice, the Registrar may consider the resolution and after making such inquiries as he may deem fit, give his approval and communicate the same to the society and the member concerned. The resolution shall be effective from the date of such approval.

NOTES: Sub-rule (2) of rule 29 makes it obligatory on the Registrar to consider the merits of the resolution and not merely to see that formalities are observed. Vishwqjeet Co-op. Societies v. Damle, 77 Bombay LR 619.

Requirement about notice is mandatory.- Under the provisions of Rule 29 the procedure prescribed for expulsion of member are mandatory. It is clear from the language of Rule 29 that where society proposes to expel a member from membership he should be individually served with a notice and the meeting has to be held not earlier than a period of one month from the date of such notice. If the meeting was held within a period of one month and if the resolution of expulsion of the member was passed then it is illegal. The High Court quashed the order granting approval to the resolution of expulsion; Narayan Ramkrishna Embadwar v. Asstt. Registrar Co op. Societies. Yavatmal. 1994 Mah. L.J. 822.

Scope - Registrar in proceedings contemplated by Rule 29 in the matter of giving approval to resolution of expulsion of member has to hold inquiry after notice to member concerned and must give him hearing. K.V. Sundaram v. Raj Rajeshri Co-op. Hsg. Society Ltd. 1980 Mah.LJ 4 : 1980 CTJ 130.

Order of the expulsion of the Chairman and the Secretary by Asstt. Registrar set aside by the Divisional Joint Registrar - Conviction by Criminal Courts against them for misappropriation of the funds of Housing Society. It was held that , impugned order passed by Divisional Joint Registrar was set aside and that of the order of the Asstt. Registrar was restored. Ravindranath Tagore Sahakari Graha Nirman Sanstha. Deopur. Dhule v. Bajirao Bhila Patil. 1991 CTJ 61.

Rule - 30. Inspection of documents in the Registrar's office by members of societies and the scale of fees for supply of copies of documents:

A member of a society or any member of the public may inspect the following documents in the office of the Registrar free of charge, and may obtain certified copies thereof, on payment of the following fees:

CHAPTER IV INCORPORATION, DUTIES AND PRIVILEGES OF SOCIETIES

Rule - 31. Procedure for change of address of societies.

(1)     Every society shall communicate in writing to the Registrar its postal address as indicated in its bye-laws registered under the Act and wherever applicable mention the name of the district, taluka, tahsil, town or village, municipal ward or mohalla, street, house number and postal circle. While communicating the postal address of the society, the committee of the society shall also send a copy of a resolution passed by it for adoption of the address communicated to a Registrar.

(2)     On receipt of the communication from the society under sub-rule (1), the Registrar shall register the address communicated by the society in a register to be maintained for that purpose and inform the society of such registration. 

(3)     Every change in its registered address shall be communicated by the society to the Registrar in the manner laid down in sub-rule (1, Any such change shall not be treated as registered unless,- (1) it is indicated in the bye-laws by amending them and the amendment so made is registered under the Act, and (ii) the change is registered in the manner laid down in sub-rule (2). 

(4)     The registered address of a society or such change therein may be registered, from time to time, shall be exhibited on the notice-board of the society, immediately after registration.

Rule - 32. Register of members.

The register of members to be kept by every society under sub-section (1) of section 38 shall be in Form T.

Rule - 33. List of members.

The list of members to be kept by every society under section 39 shall be in Form J'.

Rule - 34. Certified copies of entries in books of societies.

For the purposes of section 40. copies of any entries referred to in that section may be certified by any officer of the society duly authorised in that behalf by the committee under the seal of the society.

Rule - 35. Conditions for borrowing by societies with limited liability.

(1)     No society other than those referred to in rules 36 and 37 with limited liability shall, without the previous sanction of the Registrar, incur liability exceeding in total ten times the total amount of its paid up share capital, accumulated reserve fund and building fund minus accumulated losses :

Provided that central banks, urban banks and producers' societies shall not. except with the previous sanction of the Registrar, incur liabilities exceeding twelve times the total of their paid up share capital accumulated reserve fund and building fund minus accumulated losses. 

Explanation: In calculating the total amount of liability for the purposes of this sub-rule, in the case of any society or class of societies, the bye-laws of which permit borrowing or granting credit facilities on the pledge of agricultural produce or other goods specified in that behalf by the Registrar, by general or special order, a sum equal to the amount borrowed by such society or class of societies, on the security of agricultural produce or other goods of such society or its members, shall be excluded from the amount of the actual liability under this rule. 

(2)     Any society may incur liabilities in excess of the limit specified in sub-rule (1) by receiving deposits or borrowing loans subject to the condition that the amount received as deposits or borrowed as loans in excess of the said limit shall not be utilised in the business of the society but shall be invested in Government securities which, in the case of Central Banks, shall be deposited with the Maharashtra State Co-operative Bank and in case of other Co-operative Banks, with the Central Banks. No society shall borrow against such securities.

NOTES: Applicability of Rule - Plaintiff filed suit for recovering price of yarn sold lo society. Rule 35 did not apply. Adarsha Vinkar Sahakari Sanslha v. Daulatram Guanchand. 1977 Mah.LJ Note 37.

Rule - 36. Conditions for borrowing of Maharashtra State Co-operative Bank.

Except with the previous sanction of the Registrar, the Maharashtra State Co-operative Bank Limited, shall not incur liabilities exceeding in total fifteen times the total amount of its paid up share capital and all reserves minus accumulated losses, actual bad debts, if any. and overdue interest :

Provided that, the Bank may incur liabilities in excess of the aforesaid limit by receiving deposits or borrowing loans subject to the condition that the amount received as deposits or borrowed as loans in excess of the said limit shall not be utilised in the business of the Bank but shall be invested in Government securities which shall be deposited with the Reserve Bank of India. The Bank shall not borrow against such securities. 

Explanation: In calculating the total amount of liability for the purposes of this rule, a sum equal to the amount borrowed by the Bank on the security of agricultural produce or other goods of the members of the Bank shall be excluded from the amount of the actual liability under this rule.

Rule - 37. Conditions for borrowing of Land Development Banks.

Land Development Banks may incur liabilities not exceeding in total twenty times the total amount of their paid up share capital, accumulated reserve and building hinds minus accumulated losses.

Rule - 38. Loans and deposits from non-members in unlimited liability societies.

Every society with unlimited liability shall, from time to time, fix in a general meeting the maximum liability which it may incur in loans and in deposits from non-members. The maximum so fixed shall be subject to the sanction of the Registrar, who may at any time reduce it, for reasons to be communicated by him to the society in writing, and may specify a period not being less than four months, within which the society shall comply with his orders. No such society shall receive any loan or deposit from a non-member, which will make its liability to non-members exceed the limit sanctioned by the Registrar.

Rule - 39. Raising of funds by societies.

(1)     Every society, which has a share capital, shall provide in the bye-laws the maximum amount of such share capital, the number of shares into which it is divided, the class of shares, the face value of each share of each class and the rights and liabilities attached to each class of shares and where the full amount of the share is not payable on allotment, the amount and the number of instalments in which it is required to be paid and such other incidental matters.

(2)     Any society, which is authorised under its bye-laws to raise funds by the issue of debentures and bonds may, with the prior sanction of the Registrar, frame regulations regarding the maximum amount to be raised by the issue of debentures and bonds, the class or classes of debentures and bonds, the face value of each debenture or bond, the date on which the debentures or bonds are to be redeemed, the rate at which interest is payable, the terms and conditions regarding transfer of debentures and bonds and other incidental matters. (3) The total amount of debentures and bonds issued at any time together with the other liabilities incurred by the society shall not exceed the maximum amount which the society can borrow under the provisions of rules 35, 36, 37 or 38, as the case may be and its bye-laws.

Rule - 40. Additional conditions for raising funds by societies.

The Registrar may. by general or special order, lay down such additional conditions as he may deems fit, subject to which and the extent up to which any society or class of societies may receive deposits, issue debentures or raise loans from any creditor other than a Central Bank.

Rule - 41. Maintenance of liquid resources and distribution of assets.

Every society which obtains any portion of its working capital by deposits shall,-

(1)     maintain such liquid resources and in such form as may be specified from time to time by the Registrar, and 

(2)     utilise only such portion of its working capital in lending business and distribute its assets in accordance with such standards as may be specified from time to time by the Registrar.

Rule - 42. Regulation of loans to be granted by societies.

(1)     In case of grant of loans against security of movable or immovable property, the lending society shall maintain such margin as the Registrar may, with the approval of the Apex Bank, by general or special order, direct from time to time with reference to different commodities, securities or classes of societies.

(2)     In case of cash credit, the amount of loans shall not exceed such multiple of owned funds of the borrowing society as may be laid down by the Registrar with the approval of concerned financing agency from time to time. 

(3)     It shall be lawful for a society to grant loans without taking security of moveable or immoveable property if the purpose for which the loan given is considered production worthy or creditworthy and it is reasonably expected that the loans will be repaid by the loanee. The Registrar may. with the approval of the Apex Bank, issue directions to societies to ensure that creditworthy purposes indicated above receive finance from the societies without any difficulties, on the one hand and without being detrimental to the financial interest of the societies on the other. 

(4)     The Registrar may recognise a Central Bank as the Central Financing Agency which shall be primarily responsible for financing credit requirements of all creditworthy purpose through the concerned societies in its jurisdiction. On such recognition, such Bank shall be responsible for making all possible efforts to mobilise local resources for making loans available to the societies in its area. Such loans may be granted for creditworthy purposes, giving due importance to the production plans and requirements of various stratas of the producers and Co-operative discipline with reference to linking up of credit with Co-operative processing or Co-operative marketing. 

(5)     Except with the general or special permission of the Registrar, the loan advanced to a member by a society, or to a society by a Bank, shall be subject to such conditions as may be laid down by the Registrar, with the approval of the Apex Bank, including the maximum amount to be advanced and the period of repayment, both in regard to total advances to members and societies as also against different types of securities. 

(6)     No society shall carry on transactions on credit or sanction trade credit to its members or to non-members except in accordance with the general directions that may be issued by the Registrar in that behalf. 

(7)     In the matter of grant of loans to societies by Central Banks or to members by Primary societies, the Registrar may lay down with the approval of the Central Banks, the procedure regarding receiving applications assessing credit needs, making inquiries in respect of the production programme for which such loan is required and the procedure for finally sanctioning the loan as also the rates of finance to be followed from year to year and the nature of inquiries to be made for the purpose of financing of different crops and imposition of certain conditions regarding proper utilisation of loans and sale of agricultural produce through specified Cooperative Organisation, before such finance is granted. 

(8)     The Registrar may with the approval of the Apex Bank by general or special order prohibit or regulate grant of loans by a Cental Bank or a society where such grant is considered neither in the interest of the society nor in the interest of the development of co-operative movement on sound lines.

Rule - 43. Conditions to be complied with by members applying for loans.

(1)     Every member of a society applying for a loan from the society shall be required to hold shares in such manner and in such proportion to the amount of loan applied for by him as may be specified in the bye-laws of the society. (2) Subject to the maximum limit specified in the bye-laws, a loan to be granted to a member of a resource society and the period of its repayment shall be in accordance with the standard laid down by the Registrar in consultation with the Cental Bank and the federal society. A loan in excess of the maximum amount may be granted to a member with the previous sanction of the Central Bank and the federal society to which the society is affiliated : Provided that, where the amount of the loan exceeds twice the maximum limit contained in the bye-laws, prior sanction of the Registrar shall also be obtained.

Rule - 44. Credit limit by non-credit societies.

(1)     No society whose objects do not include grant of loan or financial accommodation to its members shall grant loans or sanction credit to any member without the sanction of the Registrar :

Provided that, any society, which has, as one of its objects, supply of goods or service required by members for production purposes, may supply goods or provide services on credit against sufficient security on condition that the cost of the goods supplied or services provided shall be recoverable from the amount of the sale proceeds of the agricultural produce or other goods produced by the member. (2) A consumer society may sell goods on credit to its members and other customers upto the extent of deposits received from them.

Rule - 45. Restrictions on borrowing from more than one credit society.

(1)     Every person who is a member of more than one resource society (other than a Land Development Bank or a Central Bank or a marketing society) dispensing credit shall, if he has not already made, make a declaration in Form 'K' that he will borrow only from one such society to be mentioned in the declaration and shall send a copy of such declaration duly attested to all societies of which he is or has become a member.

(2)     Any person who continues to be a member of more than one such society without complying with the provision of this rule shall be liable to be removed from the membership of any or all such societies upon receiving a written requisition from the Registrar to that effect : Provided that, the society from which a person has borrowed may permit him to borrow from any other society of which he is a member to such extent and subject to such conditions as may be laid down by it. (3) The Registrar may, for reasons to be recorded in writing, exempt any person or persons from the operation of this rule or prohibit any person or persons from borrowing from more than one society, notwithstanding that permission of the society under proviso to sub-rule (2) has been obtained by him.

Rule - [45-A. Limits on loans against fixed deposits.

(1)     When a society makes a loan to a depositor on the security of his fixed deposits with the society, the amount of loan shall not exceed 90 per cent of the deposit amount and the period for which the loan is granted shall not extend beyond the date of maturity of the fixed deposit.

(2)     If the depositor does not pay the loan within the period for which it is granted, the fixed deposit amount may be adjusted towards the repayment of the loan amount and the interest thereon, and only the balance, if any, shall be paid by the society to the depositor on the date of maturity].[22]

Rule - 46. Manner of recalling of loan.

(1)     Notwithstanding anything contained in the agreement entered into with the borrowing member, the committee of a society shall be entitled, after giving a week's notice to such member, to recall the entire loan amount immediately, when it is satisfied that the loan given has not been applied for the purpose for which it was given or there has been breach of any of the conditions for grant of such loan.

(2)     Nothing in this rule shall be deemed to preclude the Registrar from directing the society to recall a loan of his own motion, when it is brought to his notice that the loan given by the society has been misapplied or conditions thereof have not been followed. The Registrar may make in the matter, such inquiries as he may deem necessary and after giving a show cause notice to the society issue with the prior approval of the co-operative bank financing the society, necessary directions to the society. The directions issued by the Registrar in this respect shall be complied with by the society.

Rule - [46-A. Restrictions on borrowings from non-members.

No society shall receive or raise loans from non-members 3|including any banking company other than the Central Bank], unless specially authorised by the Registrar and such non-members from whom any loan is received or raised, gives an undertaking to the Society that any dispute arising out of the transactions shall be referred to the Registrar for decision under section 91].[23]

Rule - [46-B. Restrictions on credit sales to non-members:

Where the bye-laws of a society permit credit sales, such sales may be made to traders and other non-members, provided that the person to whom such sales are made gives an undertaking to the society that any dispute arising out of the transactions shall be referred to the Registrar for decision under section 91.1][24]

Rule - 47. Restrictions on transactions with non-members.

On the application of a member of any society or of his own motion, when it appears to the Registrar that it is necessary in the interest of the working of any particular society, to regulate or restrict transactions of such society with any non-member, the Registrar shall after giving an opportunity to the society of being heard, issue such directions as he may consider necessary Regulationg or restricting such transactions.

Rule - 48. Form of declarations be made by members borrowing loans from certain societies and conditions on which any charge in favour of a society shall be satisfied.

(1)     A declaration to be made under clauses (a) and (b) of section 48 shall be in Form 'L'.

(2)     A register of such declaration shall be kept by the society in Form 'M'. 

(3)     A charge on any immovable property created by a member in favour of a society for amounts borrowed or likely to be borrowed by him, from time to time, shall, subject to the provisions of clauses (c) and (d) of section 48 continue in force till the person creating the charges ceases to be a member of the society. 

(4)     Where a member of a society creates a charge on his land or on his interest in any land as a tenant by declaration under section 48, the society may, if compelled to make use of such property for the recovery of the loan granted to such member against the security of such property or interest in the property, utilise the whole or any portion of such property which may be sufficient to satisfy the amount due with interest and any incidental expenses incurred in that connection. 

(5)     Where a charge is created by a member on his land or on his interest in any as a tenant by declaration under section 48, the society shall record or cause to record such particulars of charge in the Record of Rights maintained by the village officers of the village where such property is situated. Such recording of the charge in the Record of Rights of the village shall be treated as a reasonable notice of such charge created under section 48.

NOTES: For failure to submit a declaration under section 48(a) the nomination paper of such member as a candidate will be rejected if the bye-law of the society provides he will not be entitled to exercise any right as a member. This order of rejection or acceptance of nomination is open to challenge by a writ petition. Pandurang Hindurao Patil v. State of Maharashtra, 1984 CTJ 125 : (1983) 7 CLC 379.

CHAPTER V PROPERTY AND FUNDS OF SOCIETIES

Rule - 49. Writing off of bad debts and losses.

All loans including interest thereon and recovery charges in respect thereof which are found irrecoverable and are certified as bad debts, by the auditor appointed under section 81, shall first be written off against the Bad Debt Fund and the balance, if any. may be written off against the Reserve Fund and the share capital of the society.

All other dues and accumulated losses or any other loss sustained by the society which cannot be recovered and have been certified as irrecoverable by the auditor may be written off against the Reserve Fund or share captial of the society: 

Provided that - 

(1)     no bad debts or losses shall be written off without the sanction of the general body: 

(2)     before any such bad debts or losses are so written off, the society, if it is affiliated and indebted to a Central Bank, shall first obtain the approval of that Bank in writing and also the approval of the Registrar. If the society is affiliated but not indebted to the Central Bank and in all other cases, it shall obtain the approval of the Registrar in writing. If the society itself is a Central Bank, approval of the State Co-operative Bank and the approval of the Registrar shall first be obtained: Provided that, in case of societies classified as A or B at the time of last audit, no such permission need be taken if the bad debts are to be written off against the Bad Debt Fund specially created for the purpose: Provided further that, the Registrar may while giving the approval impose such conditions as to the recoupment of the Bad Debt Fund and restoration of part or whole of the amount written off against the Reserve Fund, from out of future profits as he deems fit.

Rule - [49A. Calculation of net profits.

(1)     A society shall calculate the net profits by deducting the following from the gross profits for the year-

(i)       all interest accrued and accruing on amounts of overdue loans (except in over due amounts of loans against fixed deposit, gold, etc.); 

(ii)      interest payable on loans and deposits; 

(iii)     establishment charges: 

(iv)    audit fees or supervision fees: 

(v)      working expenses including repairs, rent and taxes; 

(vi)    depreciation; 

(vii)   bonus payable to employees under the Payment of Bonus Act, 1965;

(viii)  provision for payment of Income Tax; 

(ix)    amount to be paid for contribution to the Education Fund at the State Federal Society which may be notified by the State Government, in this behalf; 

(x)      amount to be paid for contribution to the Co-operative Cadre Employment Fund; 

(xi)    provision for bad and doubtful debts; 

(xii)   provision for share Capital Redemption Fund; 

(xiii)  provision for Investment Fluctuations Fund: 

(xiv)  provision for retirement benefits to the employees. 

(xv)   provisions for any other claims admissible under any other law; 

(xvi)  provision for bad debts and revenue losses not adjusted against any fund created out of profits. 

(2)     In addition to the sums referred to in sub-rule (1) of this rule, the following sums shall be deducted by a society from its profits:

(i)       contribution if any, to be made, to any sinking fund or guarantee fund, constituted under the provisions of the Act, these rules or bye-laws of the society for ensuring due fulfilment of guarantee given by Government in respect of loans raised by the society; 

(ii)      provision considered necessary for depreciation in the value of any Security Bonds or Shares held by the society as part of its investments. 

(3)     The net profit thus arrived at together with the amount of profits brought forward from the previous year, shall be available for appropriation.][25]

Rule - 50. Appropriation of profits.

(1)   The other purposes for which a society may appropriate its profits shall be education and enlightenment of the members of the society as also any co-operative or charitable purpose including relief to the poor, education, medical relief and advancement of any other general public utility, provided that the expenditure on such items does not exceed 10 per cent of the net profits.

[26][(2) The net profits calculated in accordance with the provisions of Rule 49-A. shall be appropriated for the creation of - (a) Development Fund: (b) Divided Equalisation Fund: or (c) any other fund created under bye-laws.]

Rule - 51. Amounts to be deducted by a society from its profits before arriving at its net profits.

In addition to the sums referred to in Sub-section (1) of section 65. the following sums shall be deducted by a society from its profits before arriving at its profit for the purposes of sub-section (2) of section 65 :-

(1)     Contribution, if any. to be made to any sinking fund or guarantee fund, constituted under the provisions of the Act, these rules or bye-laws of the society for ensuring due fulfilment of guarantee given by Government in respect of loans raised by the society. 

(2)     Provision considered necessary for depreciation in the value of any security bonds or shares held by the society as part of its investments. 

(3)     Any provision required to be made for the redemption and share capital contributed by Government or by a federal society.

Rule - 52. Bonus and Dividend Equalization Fund.

(1)    A society may create out of its net profits a fund to be called the Bonus Equalization Fund [27][for payment of bonus to persons other than its paid employees] [28][who are not its members].

(2)    Except otherwise specially authorised by the Registrar, 3[the fund], so created shall be utilised in accordance with the provisions of the bye-laws of the society only for [29][payment of such bonus.] 

[30][(3) A society may create the Dividend Equalisation Fund and credit to it a sum not exceeding 2 per cent of the paid up share capital in any year, until the total amount in such Fund amounts to 9 per cent of the paid up share capital. The society may draw upon this Fund in any year only when it is unable to maintain a uniform rate of dividend it has been paying during the last preceding five years] or more. (4) No society shall declare a dividend at a rate exceeding that recommended by its committees.

Rule - [53. Rates of annual contribution to education fund of State Federal Society.

The rates at which the classes of societies specified under column (2) of the Table below shall contribute annually under section 68 towards the education fund of the State Federal Society, which may be notified in this behalf by the State Government, shall be those which are respectively specified against them in column (3) of the said Table.][31]

TABLE

Rule - [53A. Rates of annual contribution to Co-operative State Cadre Employment Fund:

The rates at which the class or classes of societies or other body corporate specified under column 2 of the Table below shall contribute annually under sub-section (4) of section 69-A towards the Cooperative State Cadre Employment Fund, which may be notified in this behalf by the State Government, shall be those which are respectively specified against them in Column 3 of the said table:][32]

TABLE

Rule - [53B. Manner of contributions to be made under the Rule 53-A.

(1)     Apex Society which has been notified by the State Government under sub-section (3) of section 69-A shall open an account in the name of the "Co-operative State Cadre Employment Fund" established by it in the Maharashtra State Co-operative Bank Ltd., Bombay and also in every District Co-operative Bank, excluding the Bombay District Central Cooperative Bank. 

(2)     The amount of annual contribution payable under rule 53A by the Maharashtra State Co-operative Bank Limited, Bombay and the Maharashtra State Co-operative Land Development Bank Limited, Bombay for every Cooperative Year shall be paid by them before the 30th day of September of the next following Co-operative Year by crediting the amount of contribution into the "Co-operative State Cadre Employment Fund" account opened under sub-rule (1) in the Maharashtra State Co-operative Bank Limited, Bombay. 

(3)     The Auditor of][33]

(a)      the Maharashtra State Co-operative Marketing Federation Limited, Bombay, 

(b)      every District Central Co-operative Bank (other than the Bombay District Central Co-operative Bank Limited and the Ahmednagar Urban District Central Co-operative Bank Limited; Ahmednagar), 

(c)      every Co-operative Sugar Factory, and 1. Added by G.N.of 3:9-1979. 

(d)      every Primary Co-operative Marketing Society dealing in fertilisers, seeds, agricultural implements or sale of agricultural produce, shall certify the amount of the annual contribution payable by them under rule 53-A and send the certificate, in the case of the Maharashtra State Co-operative Marketing Federation to the State Level Caderisation Committee and in any other case, to the relevant Central Society. The certificate in respect of every Co-operative year shall be sent before the 18th day of August of the next following Co-operative year. 

(4)     The Director of Sugar, Maharashtra State, shall certify the amount of annual contribution payable under rule 53-A by every sugar factory (other than a Co-operative Sugar Factory) and send the certificate to the relevant Central Society. The certificate in respect of every Co-operative year shall be sent, before the 15th day of August of the next following Cooperative year. 

(5)     Within fifteen days from the date of receipt of a certificate sent under sub-rule (3) or (4), the State Level Caderisation Committee or. as the case may be. the relevant Central Society, shall serve a notice of demand for payment of the contribution mentioned in the certificate on the Maharashtra State Co-operative Marketing Federation or, as the case may be, a society or a sugar factory (other than a Co-operative Sugar Factory) by which it is payable. 

(6)     On receipt of the notice of demand under sub-rule (5). the Maharashtra State Co-operative Marketing Federation, every society and every sugar factory (other than a Co-operative Sugar Factory) shall pay the amount of contribution payable by them for any co-op. year before the 30th day of September, of the next following co-operative year. Such contribution shall, in the case of the Maharashtra State Co-operative Marketing Federation Limited, Bombay be paid into "Co-operative State Cadre Employment Fund" account in the Maharashtra State Co-op. Bank Ltd., Bombay and in other cases, into the "Co-operative State Cadre Employment Fund" account in the District Central Co-operative Bank in the District in which the society making the contribution operates or the sugar factory (other than a cooperative sugar factory) making such contribution is situated. 

(7)     Before the 15th day of August next following the end of each cooperative year, every Primary Agricultural Credit Society shall furnish to the relevant Central Society such information as may be necessary for it to assess the amount of contribution payable for that year by the Primary Agricultural Credit Society under rule 53A. On receipt of such information, the relevant Central Society shall scrutinize it, determine the amount of contribution payable by the Primary Agricultural Credit Society and shall, before the 15th day of September, next following the end of the said cooperative year, serve a notice of demand on the Primary Agricultural Credit Society for payment of the amount of contribution so determined. The relevant Central Society shall also, before that date, furnish to the District Central Co-operative Bank of the District in which the Primary Agricultural Credit Societies furnishing, the information operate, a statement indicating the name of each Primary Agricultural Credit Society, the rate of annual contribution payable by it under rule 53-A. the amount of contribution determined and the amount of arrears of contribution, if any. which was remained to be paid by each Primary Agricultural Credit Society. On the service of a notice of demand, the Primary Agricultural Credit Society shall, before the 31st day of December next following the end of the aforementioned Co-operative year, pay the amount of contribution payable by it for the year, into the "Co-operative State Cadre Employment Fund" account in the District Co-operative Bank in the District in which such society operates. 

(8)     Where any society (including the Primary Agricultural Credit Society and Co-operative Sugar Factory) which has received any loan from any District Central Co-operative Bank or the Maharashtra State Co-operative Bank pays to that Bank any amount towards payment of interest on such loan, or repayment of such loan, or where any such amount is received by the District Central Co-operative Bank or the Maharashtra State Cooperative Bank on behalf of any such society or Sugar Factory from any other agency, and the District Central Co-operative Bank or the Maharashtra State Co-operative Bank is satisfied after consulting the relevant Central Society that there are any arrears of annual contribution payable by such society or sugar factory as per demand notice served on it, then the District Central Co-operative Bank or the Maharashtra State Co-operative Bank, as the case may be. shall in accordance with procedure laid down from time to time, by the State Level Caderisation Committee and after obtaining the consent of such society or sugar factory to do so, first credit to the "Cooperative State Cadre Employment Fund" such amount as may be necessary to recover the arrears and adjust the remaining balance, if any. towards payment of interest on such loan, or as the case may be. repayment of such loan. Whenever the District Central Co-operative Bank or the Maharashtra State Co-operative Bank so credits any amount to the said Fund, it shall send advice of such credit to the society or as the case may be. Co-operative Sugar Factory and also the relevant Central Society. 

(9)     Notwithstanding anything contained in sub-rules (2), (3). (4). (6) and (7) - 

(a)      the certificate to be sent by the auditor under sub-rule (3) and the certificate to be sent by the Director of Sugar, Maharashtra Stale, under sub-rule (4) for the Co-operative Years 1977-78 and 1978-79 shall be sent by them before the 15th day of September, 1979: 

(b)      the information to be furnished by the Primary Agricultural Credit Society under sub-rule (7) in respect of the Co-operative Years 1977-78 and 1978-79 shall be furnished by it before the 15th day of September. 1979; 

(c)      the notice of demand for payment of the amount of contribution payable by any society (including the Primary Agricultural Credit Society) or Sugar Factory for the Co-operative Years 1977-78 and 1978-79 shall be served on it before the 30th day of September. 1979: 

(d)      the amount of contribution payable by any society (including the Primary Agricultural Credit Society) or Sugar Factory for the Co-operative Years 1977-78 and 1978-79 shall be paid by it before the 31st day of October, 1970 and the 31st day of December, 1979 respectively.

(10)   The relevant Central Society shall maintain books of accounts of the annual contribution due from each society which operates in the area of its operation and each Sugar Factory situated in that area. The State Level Caderisation Committee shall maintain books of accounts of the annual contributions due from the Maharashtra State Co-operative Bank Ltd. (incorporating the Vidarbha Co-operative Bank Ltd.) Bombay, the Maharashtra State Co-operative Marketing Federation Ltd., Bombay and the Maharashtra State Co-operative Land Development Bank Ltd., Bombay. Every such book of accounts shall contain the following particulars, namely:

(i)       the society or the sugar factory from which the annual contribution is due: 

(ii)      the amount of annual contribution collected from such society or sugar factory: 

(iii)     the balance of arrears of the annual contribution payable by such society or sugar factory or the excess amount paid by it.

(11)   A periodical statement of accounts of the moneys credited into the "Co-operative State Cadre Employment Fund" accounts with each District Central Bank shall be sent by that Bank to the relevant Central Society at such intervals as may be determined by the State Level Caderisation Committee. The statement so received shall be forwarded by the relevant Central Society to the State Level Caderisation Committee after due scrutiny. 

(12)   Where any society or sugar factory fails to pay the annual contribution as provided in the preceding sub-rules, the State Level Caderisation Committee, in the case of the Maharashtra State Co-operative Bank Limited (incorporating the Vidarbha Co-operative Bank Ltd.), Bombay, the Maharashtra State Co-operative Marketing Federation Limited, Bombay and the Maharashtra State Co-operative Land Development Bank Limited, Bombay and the relevant Central Society in the case of other societies and sugar factories, shall communicate the name of the defaulting society or sugar factory to the Registrar for taking action under sub-section (5) of section 69-A. 

Explanation : For the purpose of this rule, 

(a)      "Central Society" means society notified by the Government of Maharashtra to be a Central Society under section 69-A; 

(b)      "relevant Central Society" in relation to any society or sugar factory, means the Central Society in the area of operation of which any such society operates or any sugar factory is situated; 

(c)      "State Level Caderisation Committee" means a Committee appointed as such by the Government of Maharashtra.

Rule - 54. Utilisation and investment of reserve fund.

(1)     A society shall, in addition to the modes specified in clauses (a) to (d) of section 70, invest or deposit in reserve fund in any one or more of the following permitted modes, namely:

(i)       In the case of Primary Societies in the Central Financing Agencies,

(ii)      In the case of Central Co-operative Banks and Urban Banks, in the State Co-operative Bank, 

(iii)     In debentures issued by the Apex Land Development Bank or in Government loans, or 

(iv)    In any immovable property specified by the Registrar by a general or special order : Provided that, in the case of a society whose reserve fund is equal to or more than its paid up share capital, the Registrar may; by general or special order, permit that society to invest that portion of the reserve fund which is in excess of its paid up share capital, or a portion thereof, in its business: Provided further that, in the case of Central Co-operative Banks and the State Co-operative Bank, the Registrar may, by general or special order, authorise such Banks to invest fifty per cent of their reserved fund in their business. 

(2)     No society whose reserve fund has been separately invested or deposited shall draw upon, pledge or otherwise employ such fund except with the sanction of the Registrar previously obtained in writing. (3) In the case of a society constituted with the object of Co-operative housing on a co-partnership basis, the reserve fund may be utilised for expenditure on the maintenance, repair and renewal of buildings of the society. (4) In the case of a processing society the reserve fund may be utilised in the acquisition, purchase or construction of lands, buildings and machinery.

NOTES: Reserve Fund.- It is quite clear that the reserve fund remains in reserve and it is not to be used for the business of the society as capital, unless it is equal to or more than its paid up share capital. Reserve Fund cannot be treated as the capital of the society for the purposes of the deduction under the Payment of Bonus Act. Co-operative Banks and Societies Employees Federation, Maharashtra v. A. K. Thorat, Member, Industrial Tribunal, Maharashtra, 1988 (1) Bombay C.R. 386.

Rule - 55. Investment of other funds.

(1)     A society may invest any of its funds (other than the reserve fund) in any of the modes specified in section 70 when such funds are not utilised for the business of the society.

Explanation : For the purpose of this sub-rule, "business of society" shall include any investment made by the society in immovable property with the prior sanction of the Registrar in the process of recovery of the society's normal dues for the purpose of construction of building or buildings for its own use. 

(2)     The Registrar may, in the case of any society or class of societies, specify by a special or general order the maximum amounts to be invested in any class or classes of securities. 

(3)     Every society which has invested an amount not less than 10 per cent of its working capital in securities shall be required to constitute an investment fluctuation fund. The Registrar may direct that a specified per cent of the net profits every year shall be credited to the investment fluctuation fund until, in his opinion, the amount of the funds is adequate to cover anticipated loss arising out of the disposal of the securities. 

(4)     [34][Proportion of paid up share capital of the investing society or a class of society shall be determined by the Registrar by special or general order, from time to time, for investment in the shares or security bonds or 1. Added by G.N. No. CSL 1186/ 134313/ 132/ISC (i), dated 16.10.1987. debentures issued by any other society. While determining such proportion, the Registrar may impose such conditions as he may deem fit. 

(5)     When any society or societies have been permitted to enter into collaboration as provided under sub-section (1) of Section 20A. if it is necessary to invest the funds of the society or societies in such collaboration, the Registrar may. in addition to any general or special order of the State Government as specified in clause (e) of section 70, impose such additional conditions as may be necessary in the interest of the society : 

Provided that, the Registrar may for ensuring the safety of the funds of the society or societies invested in such collaboration for beneficial utilisation of the funds furtherance of the objects may be regulated to the extent and manner of such investment from time to time.]

Rule - 56. Maintenance and administration of provident fund.

A society which has established a provident fund for its employees under section 71 shall, with the previous approval of the Registrar, frame regulations for the maintenance and utilisation of the provident fund for its employees. Among other matters, such regulations shall provide for the following:

(i)       amount (not exceeding ten per cent of the employees' salary) of contribution to be deducted from the employees' salary; 

(ii)      the rate of contribution (not exceeding the annual contribution made by the employee) to be made by the society; 

(iii)     advances which may be made against the security of the provident fund; 

(iv)    refund of employees' contribution and contribution made by the society; 

(v)      mode of investment of the provident fund and payment of interest thereon.

[35][CHAPTER VA ELECTION TO NOTIFIED SOCIETIES, ETC.

Rule - 56A. Manner of election to notified Societies.

(1)     The elections of the societies notified by the State Government under section 73-IC, shall be held or cause to be held by the Registrar through the machinery created for this purpose in the manner as specified hereunder, namely:

(a)      The Registrar may appoint any officer, not below the rank of an Additional Registrar of Co-operative Societies, as the Chief Election Officer for the State, who shall be subordinate to the Registrar and accountable to him for the purpose of such elections. He shall work under the general guidance of the Registrar of Co-operative Societies. 

(b)      The Chief Election Officer shall have powers to appoint one or more officers along with their jurisdiction as District Election Officer, who shall not be below the rank of an Assistant Registrar of Cooperative Societies or the Special Auditor, Class-II. 

(c)      The Chief Election Officer shall have powers to appoint such additional staff as he deems necessary to assist him and the District Election Officer. 

(d)      The Chief Election Officer shall have powers of general guidance, superintendence and control over the District Election Officers and the staff appointed under the foregoing sub-clauses of these rules. The District Election Officer and the staff so appointed shall be subordinate to the Chief Election Officer and shall be accountable to him for the purpose of elections. 

(e)      The District Election Officer, shall be responsible for holding the elections of all the notified societies, headquarters of which are situated in his jurisdiction. 

(f)       For holding the elections of notified societies, the Registrar or the Chief Election Officer or the District Election Officer, as the case may be, shall have the following powers, namely:

(i)       To appoint any officer of the State Government, Zilla Parishad, any Local Body, any Co-operative Society, Agricultural Produce Market Committee, having establishment in that district, on any post with such designation and duties for the purpose holding the elections. 

(ii)      It shall be obligatory on every officer or employee, so appointed to perform the duties assigned on him, failing which, he shall be liable for prosecution for having committed contempt of the lawful authority of the public servant within the meaning of Chapter 10 of Indian Penal Code. 

(iii)     To requisition any premises, vehicles or any other material required for holding the election, from any Co-operative Societies as he may deem necessary. 

(iv)    On service of such requisition, it shall be obligatory on the authority to whom such requisition is made, to forthwith hand over the possession of premises, vehicles or any other material, as the case may be. to the Requisitioning Authority or any person authorised by him in that behalf, 

(g)      (i) The Registrar shall be competent to create a fund called the "Notified Co-operative Societies Election Fund", as he deems fit by a special or general order. 

(ii) The expenses of holding of any elections to the notified society, including payment of travelling allowances, daily allowance and other remuneration, if any, to the persons appointed to exercise the powers and perform the duties in respect of election, shall be borne by the notified society concerned. For this purpose, the Registrar or the Chief Election Officer or the District Election Officer may call upon a notified society to deposit in the Notified Co-operative Societies Election Fund, such amount as he considers necessary for the conduct of elections, within such period as may be directed by the Registrar : 

Provided that, it shall be competent for the Registrar to exempt any notified society or class of notified societies from depositing in full or in part, having regard to the financial position of such society or class of societies, as the case may be. 

(iii) If the expenditure exceeds the amount deposited, the Registrar or the Chief Election Officer or the District Election Officer shall call upon the notified society to pay the excess amount as specified by him within eight days from the receipt of directions from him and the society shall comply with such directions. 

(iv) On failure of the notified society to deposit the amount or to pay the excess amount as aforesaid, the Registrar, the Chief Election Officer or the District Election Officer may issue a certificate for recovery of amount due, together with interest thereon at the rate of 15% per annum from the society. On issue of such certificate, the amount shall be recovered as arrears of land revenue. 

(2)     The Registrar shall maintain a register in Form M-l'. in his office showing, the names of the notified societies with details thereof. 

(3)     The Chief Executive of the notified society shall deliver a report in Form M-2' to the Registrar on or before 30th September of the preceding calendar year in which the term of office of the Managing Committee of such society expires : 

Provided that, if the Chief Executive of the notified society fails to report in time the Registrar shall proceed to enlist the name of such society or societies for the purpose of aforesaid sub-rule on the basis of information available in the register and such enlisting the names shall be prima facie evidence that the election of the society is due to be held in the succeeding co-operative year, unless proved to the contrary. 

(4)     On receipt of report or otherwise, the Registrar shall publish, on or before 15th October a list of societies in his office and in the office of the District Election Officer, of which elections of the committee are to be held in the succeeding year.

NOTES: Interpretation of word "etc" in title of Chap. V-A.- Chapter V-A in its title clause refers "elections to notified societies, etc". Title makes it clear that other than notified societies, if there are other societies, those also can be said to have been governed by provisions of these Rules, else Legislature would not have unnecessarily added word 'etc' This word 'etc' includes other societies like notified societies and others, which are otherwise not governed by specific or any other Rules. Jagdeo Ramchandra Raipure v. State of Maharashtra, 2003 (4) Bombay C. R. 102 : 2003 Vol. 105 (3) Bombay L. R. 488 : 2003 (3) Mah. L. J. 273.

Elections to be conducted under the auctionable of Registrar.-When the share capital of the society is in excess of Rs. 10 lacs, the holding of the elections had to be lawfully conducted under the independent authority of the Registrar. Once the society is regarded as a notified society, the provisions contained in Chapter V-A of the Rules regulate the conduct and holding of elections. The elections are required to be held under the authority of the Registrar or his designated officers in the manner set out in rule 56A of the Rules. Balasaheb Narayan Ingale v. Arua Bruhat Vividh Karyakari Sahakari Sanstha Mydated & Ann, 2002 Vol. 104(1) Bombay L. R. 872 : 2002 (Supp.l) Bombay C. R. 16.

Rule - 56B. Provisional list of voters.

[36][(1) A provisional list of voters shall be prepared by every notified society in the year in which the elections of such society is due to be held. The persons who have completed minimum two years as members from the date of their enrollment; shall be included in the provisional list. If different constituencies are provided in the bye-laws, the names of voters shall be arranged constituency wise as laid down in the bye-laws.]

(2)   Four copies of the authenticated provisional lists of voters shall be delivered by the Chief Executive of the society to the Registrar, 120 days before the date of expiry of the term of Committee. Copies of such lists shall be displayed on the notice board of the society. The District Election Officer and the Registrar, within 15 days from its receipt, call for inviting claims and objections from the members of the society. 

(3)   If any Chief Executive Officer fails to deliver copies of the provisional lists of voters to the Registrar on or before the due date, the Registrar shall himself or through any person authorised by him in this behalf, prepare such provisional list of voters and expenditure incurred therefor shall be recovered from the Chief Executive Officer or other persons responsible therefor, as arrears of land revenue. 

(4)   In the event of the Registrar taking action under the last preceding sub-rule, he shall also cause copies of the provisional list of voters to be displayed on his notice board and on the notice board of the District Election Officer and of the society within ten days from the date of receipt of such list from the society for inviting claims and objections from the members of the society. 

ORDER

No. CSL. 2192/1645/56/15-C, dated 3.8.92. In exercise of the powers conferred by Section 157 of the Maharashtra Co-operative Societies Act, 1960 Mah. XXIV of 1961), the Government of Maharashtra hereby directs that sub-rule (1) of rule 56B of the Maharashtra Co-operative Societies Rule, 1961 shall apply to those notified Societies in respect of which the elections were due but were postponed by Government from time to time with the modification that as if in the said sub-rule (1), for the words and figures "The persons who are members as on the date prior to 180 days of the date on which the term of the committee of such society expires", shall be included in the provisional list the words, figures and letters "the persons who were members as on the 31st March, 1992 shall be included in the provisional list of those notified Societies in respect of which elections were due but were postponed by Government from time to time" were Substituted.

Rule - 56C. Particulars to be included in the provisional list of voters.

(1)     The provisional list of voters in case of individual share holders, shall contain the name, father's or husband's name, surname, if any, with address recorded in the register of members in Form M-l of every person entitled to be registered as voter with such other particulars as may be necessary to identify him. 

(2)     Where a society is the member of a notified society, the notified society shall call for the name of representative duly authorised to vote at the election on behalf of the affiliated society, so as to reach it by 150 days prior to the date of expiry of term of office of the Committee. 

(3)     While communicating the name of the representative to the notified society, the affiliated society shall enclose a copy of the resolution of the society or its committee as provided under the bye-laws, where the representative is so authorised. The notified society shall include in the list of voters the name of all such representatives as have been communicated to it before the date fixed for publication of the provisional list. In addition to the names of representatives, the list shall contain the name of the affiliated societies, their registration numbers and addresses with names of the constituency, if any, to which they belong.

Rule - 56D. Claims and objections to the provisional list of voters, and the final list of voters.

(1)     When any provisional list of voters is published for inviting claims and objections, any omission or error in respect of name or address or other particulars in the list may be brought to the notice of the Registrar in writing by any member of the society concerned who is a voter or any representative authorised to vote on behalf of such society during office hours within 15 days from the date of publication of the provisional list of voters.

(2)     The Registrar shall, after making such enquiries as deemed necessary in this behalf, consider each claim or objection, and give his decision thereon in writing to the persons concerned within 10 days from the last date prescribed for receiving the claims and objections and the list shall be conclusively final voters list. 

(3)     The copies of final list of voters shall be displayed on the notice board of the Registrar and on the notice-board of the office of the District Election Officer and that of the society at least seven days before the declaration of the election programme and in no case later than fifteen days from the finalisation of claims and objections.

NOTES: If the rules have given power to the Registrar to consider the claims and objections the claims and objections should have been filed before the Registrar and if the Registrar has given the judgment, the Co-operative Court cannot entertain any fresh objection as an appellate authority. This would be contrary to the provisions of Rule 56D. which gives finality to the voters's list. Subhash Fakirchand Agarwal v. State of Maharashtra. 1994 Mah. L.J. 487.

Rule - 56E. Appointment of Returning Officers, Assistant Returning Officers and such other Officers required to conduct the elections.

The Registrar or the Chief Election Officer or the District Election Officer shall, whenever necessary, appoint the Returning Officer and may also appoint one or more persons to be called as the Assistant Returning Officer-to assist the Returning Officer in the performance of his functions :

Provided that, in case where no other person is appointed as Returning Officer, the District Election Officer himself shall be deemed to be the Returning Officer and shall perform all the functions of the Returning Officer under these rules. Every Assistant Returning Officer, shall, subject to the control of the Returning Officer, be competent to perform all or any of the functions of the Returning Officer provided that, no Assistant Returning Officer shall perform any of the functions of the Returning Officer which relate to the scrutiny of nominations unless the Returning Officer is unavoidably prevented from performing the said function.

Rule - 56F. General duty of Returning Officer.

It shall be the general duty of the Returning Officer at any election to do all such acts and things as may be necessary for effectually conducting the election in the manner provided in these rules and bye-laws of the notified society or societies.

Rule - 56G. Polling stations.

The Returning Officer shall, if necessary, provide a sufficient number of polling stations for any constituency for which election is to be held and shall publish on the notice board of the society and in such other manner as he deems fit, a list showing the polling stations so provided and the polling areas for which they have respectively been provided.

Rule - 56H. Appointment of Presiding Officers and Polling Officers.

(1)     The Returning Officer shall appoint a Presiding Officer for each polling station and such Polling Officer or Officers as he thinks necessary, but shall not appoint any person who has been employed by the concerned society or on behalf of. or has been otherwise working for a candidate in or about the election : 

Provided that, if a Polling Officer is absent from the polling station, the Presiding Officer may appoint any person who is present at the polling station, other than a person who has been employed by the concerned society or on behalf of, or who has been otherwise working for a candidate in or about the election, to be the Polling Officer during the absence of such officer, and shall inform the Returning Officer accordingly. 

(2)     A Polling Officer shall, if so directed by the Presiding Officer, perform all or any of the functions of a Presiding Officer under the Act or these rules and bye-laws made thereunder. 

(3)     If the Presiding Officer, owing to illness or otherwise or due to unavoidable cause, is absent from the polling station, his functions shall be performed by such Polling Officer as has been previously authorised by the Presiding Officer, to perform such functions during his absence.

Rule - 56I. General duty of Presiding Officer and Polling Officer.

(1)     It shall be the general duty of the Presiding Officer at a polling station to keep law and order and to see that the poll is fairly taken.

(2)     It shall be the duty of the Polling Officers at a polling station to assist the Presiding Officer for such station in the performance of his functions. 

(3)     The Presiding Officer. Polling Officer, Returning Officer, Assistant Returning Officers and other persons appointed for any of the purposes of these rules shall work under the general guidance, superintendence and control of the District Election Officer or the Chief Election Officer.

Rule - 56J. Appointment of dates etc., for various stages of an election.

(1)     The Returning Officer, with prior approval of the Registrar or the District Election Officer, as the case may be, shall draw and declare a programme of various stages of election, as indicated hereinbelow, not earlier than seven days and not later than fifteen days of the date of display of final list of voters of the society:

Explanation :- (a) If the last date in reckoning dates as specified in the above cases is a public holiday, the next succeeding working day shall be fixed for the respective events; 

(b) The proportion of polling stations to number of voters at each polling station and the place of polling station shall be fixed in consultation with in the notified society concerned. In case the polling stations are spread over either the district, town or villages in the District, the Election Officer shall make arrangement to get all the ballot boxes to the office of the Returning Officer or to the registered office of the society or to such other safe places as he deems fit.

NOTES: Any modification in the election programme due to unavoidable reasons and in public interest in the facts and circumstances would have beyond 1 5 days of publication of final list of contesting candidates because under the original programme the election was already fixed on 15th day of publication of such list and, therefore, the Returning Officer cannot be said to have committed any illegality in fixing the election later on. The power which has been given to the Returning Officer for modification of election programme due to unavoidable circumstances and in the public Interest, cannot be constrained and confined to the period given in Rule 56-J(vii). The said power of modification of election programme is not restricted to the period provided in rule 56-J(vii).- Baburao Virupaksha Kore v. Murgha Rajendra Co-operative Bank Ltd. Miraj. 2000 Vol. 102 (3) Bombay L. R. 601.

Rule - 56K. Manner of publication of election programme under rule 56-J.

(1)     The Returning Officer shall send a copy of the election programme declared under rule 56-J in Form M-3 to the society either by special messenger or the District Election Officer shall make arrangement to get all the ballot boxes to the office of the Returning Officer or to the registered office of the societies or to such other safe places as he deems fit.

(2)     The time during which poll shall be taken Should be mentioned in the election programme. The time of poll should not be earlier than 8-00 a.m. and later than 5.00 p.m. 

(3)     Wherever it is necessary to fix time, date and place for any stage in the election programme, it shall be fixed by the Returning Officer and shall be mentioned in the election programme declared by him. 

(4)     Except with the previous approval of the District Election Officer, or the Chief Election Officer, as the case may be, the date fixed under this rule shall not be changed within 7 days of the date fixed for the poll: Provided that, if due to any unavoidable circumstances and in the public interest, it has become imminent to modify the programme and there is no sufficient time for obtaining the previous approval of the District Election Officer, or the Chief Election Officer as the case may be to such modifications the Returning Officer may. for the reasons to be recorded in writing, modify the programme. In every such case the Returning Officer shall forthwith send a copy of the modified election programme along with the reasons recorded by him for such modification to the Chief Election Officer or the District Election Officer, as the case may be.

Rule - 56L. Manner of publication of election programme under rule 56-K.

(1)     The Returning Officer shall send a copy of the election programme declared under rule 56-J in Form M-3 to the society either by special messenger or through post under certificate of posting addressed to the society at the registered address with instructions to display the copy of the programme on the notice-board of the society. In addition, the said election programme shall be displayed on the notice-board of the office of the Returning Officer. Registrar and the District Election Officer.

(2)     The election programme shall also be published at least in one local daily newspaper for a society or class of societies at the discretion of the District Election Officer.

Rule - 56M. Nomination of candidates.

(1)     Any person may be nominated as the candidate for election to fill a seat, if he is qualified to be chosen to fill that seat under the provisions of the Act, these rules and the bye-laws and if his name is entered in the list of voters:

Provided that, in case of joint or associate members, only the member whose name stands first in the share certificate shall be eligible to be nominated as candidate for the election. Where the seats are reserved on the committee of any notified society as provided under section 73-B of the Act, and individual belonging to the categories provided under sub-section (3) of section 73-B shall be eligible for being nominated as candidate even if his name does not appear in the list of voters. 

(2)     Every nomination paper presented under rule 56-N, shall be completed in Form 'M-4' : 

Provided that, a failure to complete or defect in completing the declaration as to symbols in a nomination paper, shall not be deemed to be a defect of a substantial character within the meaning of these rules. 

(3)     Any person whose name is entered in the list of voters may be a proposer or seconder for nominating a candidate for election: Provided that in the case of election from constituency of societies, the proposer and the seconder shall be from the same constituency. 

(4)     A nomination paper shall be supplied by the Returning Officer to any Voter on demand and on payment of such fees as determined by the District Election Officer : 

Provided that, such nomination paper shall be supplied by the Returning Officer to any person desirous of contesting from the constituency under section 73-B even if his name is not included in the list of voters.

Rule - 56N. Presentation of nomination paper and requirements for valid nominations.

(1)     On or before the date appointed under Rule 56-J, each candidate shall either in person or by his proposer, deliver to the Returning Officer during the time and at the place specified in the programme declared under the said rule, a nomination paper completed as provided by rule 56-M, and signed by the candidate and by two voters of his constituency one of whom shall be a proposer and the other seconder.

(2)     Any person, who is not subject to any disqualification as a voter under the Act. these rules or bye-laws and whose name is entered in the list of voters for the constituency for which the candidate is nominated, may Subscribe as proposer and seconder. 

(3)     In the case of a reserved seat under the provisions of Section 73-B, a candidate shall not be deemed to be qualified to be chosen to fill that seat unless his nomination paper contain a declaration by him specifying the particulars of Scheduled Caste or Scheduled Tribe of which he is a member or the details of his income and land-holding during the year immediately preceding, in the case of members of weaker section. 

(4)     On the presentation of a nomination paper, the Returning Officer shall satisfy himself that the names and the number of candidate and his proposer and seconder are as entered in the list of voters excepting in the case of nomination paper presented under the provisions of sub-section (3) of section 73-B for reserved constituency. If a nomination paper is rejected under this rule, the Returning Officer shall record thereon his reasons for " rejecting the same, and in that case, the candidate may deliver a fresh nomination paper subject however, to all the provisions of this rule : 

Provided that, the Returning Officer shall permit any clerical or technical error in the nomination paper in regard to the said names or number to be corrected in order to bring them into conformity with the corresponding entries in the list of voters and where necessary, and clerical or printing error in the said entries shall be overlooked.

Rule - 56O. Symbols for elections.

(1)     The Returning Officer shall specify the symbols that may be chosen by the candidates at the election from among those specified by him, but he shall not allot any symbols which are associated with political parties.

(2)     Where at any such election, more nomination papers than one and delivered by on or behalf of a candidate, the declaration as to symbols made in the nomination paper first delivered and no other declarations, as symbols, shall be taken into consideration under sub-rule (2) of Rule 56-M even if that nomination paper has been rejected.

Rule - 56P. Deposit.

A candidate shall not be deemed to be duly nominated for election from a constituency unless he deposits or causes to be deposited with the Returning Officer a sum of Rs. 25 in cash and where the candidate is of Scheduled Caste or Scheduled Tribe or of a weaker section, a sum of Rs. 5 :

Provided that, where a candidate has been nominated by more than one nomination paper for election in the same constituency not more than one deposit shall be required from him under this rule. However, the Chief Election Officer shall be competent to fix amount, from time to time, towards deposits as per aforesaid rule by a candidate in the case of any society or class of societies in consultation of the financial standing membership etc, by general or special order.

Rule - 56Q. Notice of nomination and time and place for the scrutiny.

The Returning Officer shall on receiving the nomination paper under rule 56-N inform the person or persons delivering the same, of the day, time and place fixed for the scrutiny of nominations and shall enter on the nomination paper, its serial number and shall sign thereon a certificate stating the date on which and the hour at which the nomination paper has been delivered to him and shall as soon as may be therefore, cause to be affixed on the notice board in his office, a notice of the nomination containing descriptions as similar to those contained in 'the nomination papers, both the candidate and of the proposer.

Rule - 56R. Scrutiny of nomination papers.

(1)     On the date fixed for the scrutiny of nomination papers under Rule 56-J, the candidates, one proposed of each candidate duly authorised in writing by each candidate, may attend at the time and place appointed in this behalf and the Returning Officer shall give or cause to give them all reasonable facilities for examining the nomination papers for all candidates which have been delivered as required by rule 56-N. No other person shall be allowed to attend the scrutiny of nominations.

(2)     The Returning Officer shall then examine the nomination papers and shall decide all objections which may be made to any nomination and may either on such objections or on his own motion, after such summary inquiry, if any, as he thinks necessary reject any nomination on any of the following grounds, this is to say:

(a)      that the candidate is disqualified for being chosen to fill the seat by or under the Act. these rules and the bye-laws; 

(b)      that the proposer is disqualified from subscribing a nomination paper ; 

(c)      that there has been failure to comply with any of the provisions of rule 56-N or 56-P; 

(d)      that the signature of the candidate or the proposer or the seconder on the nomination paper is not genuine. 

(3)     Nothing contained in clause (c) or (d) of sub-rule (2) shall be deemed to authorise the rejection of the nominee of any candidate on the ground of any irregularity in respect of a nomination paper if the candidate has been duly nominated by means of another nomination paper in respect of which no irregularity has been committed. 

(4)     The Returning Officer shall not reject any nomination paper on the ground of any defect which is not of a substantial character. 

(5)     The Returning Officer shall hold the scrutiny on the date appointed in this behalf under rule 56-J, and shall not allow any adjournment of the proceedings, except when such proceedings are interrupted or obstructed by riot or open violence or by causes beyond his control : 

Provided that, in case any objection is raised by the Returning Officer or is made by any other person, the candidate concerned may be allowed time to rebut it, not later than the next day, and Returning Officer shall record his decision on the date to which the proceedings have been adjourned. 

(6)     The Returning Officer shall endorse on each nomination paper his decision accepting or rejecting the same and, if the nomination paper is rejected, he shall record in writing a brief statement of his reasons for such rejection, and a copy of such statement shall be immediately supplied on demand to the candidate or to the proposer concerned. The copy of such statement shall be sent invariably to the Registrar or to the District Election Officer, as the case may be.

Rule - 56S. Publication of list of valid nomination.

Immediately after all the nomination papers have been scrutinised and decision accepting or rejecting the same has been recorded, the Returning Officer shall prepare a list of candidates whose nominations have been accepted or rejected. Immediately on the day after the scrutiny is over, the Returning Officer shall affix the list on his notice-board and shall record the date on which and the time at which, the list was so affixed :

Provided that, the Returning Officer shall be competent to include the names of candidates whose nominations are subsequently held valid, after the period of appeal by the Competent Authorities.

Rule - 56T. Withdrawal of candidature.

(1)     Any candidate may withdraw his candidature by application in writing and deliver it personally to the Returning Officer within the stipulated time as specified in the election programme.

(2)     No person who has given an application of withdrawal of his candidature shall be allowed to cancel the application.

Rule - 56U. Preparation of list of contesting candidates.

(1)     On the day next succeeding the last date fixed for withdrawal of candidature, the Returning Officer shall prepare and publish in Form M-5, a list of contesting candidates which means the candidates whose names have been finally accepted and who have not withdrawn their candidatures with the prescribed time on the notice board of his office. 

(2)     The said list shall contain the names in alphabetical order with reference in the names of candidates having surnames and the names proper of other candidates,' in the language in which the list of voters is prepared and the addresses of the contesting candidates as given in the nomination papers. 

(3)     Where a poll becomes necessary, the Returning Officer shall consider the choice of symbols expressed by the contesting candidates in their nomination papers and shall,- 

(a)      allot a different symbol to each contesting candidate in conformity as far as practicable, with his choice : and 

(b)      if more than one contesting candidates have indicated their preference for the same symbol, decide by lot and such allotment shall be final. .

(4)     Every candidate shall forthwith be informed of the symbol allotted to him and be supplied with a specimen thereof by the Returning Officer.

Rule - 56V. Appointment of Polling Agents and Counting Agents.

(1)     At an election at which a poll is to be taken, any contesting candidate may appoint one agent and one relief agent to act as Polling Agents of such candidate, at each polling station. Such appointment shall be made by a letter in writing in Form M-6. signed by the candidate.

(2)     The candidate shall deliver the letter of appointment to Polling Agents who shall on the date fixed for the poll, present it to and sign the declaration contained therein, before the Presiding Officer. The Presiding Officer shall retain a letter presented to him in his custody. Polling Agent shall not be allowed to perform any duty at the Polling Station unless he has complied with the provisions of this rule. 

(3)     The Polling Agents may work as Counting Agents as per the authority given by the candidate in Form M-7. 

(4)     Each contesting candidate may appoint not more than two agents to act as Counting Agents of such candidate by a letter in writing in duplicate in Form M-8. signed by the candidates. Before the commencement of the counting of votes, the candidate shall give notice of the appointment of such Counting Agents to the Returning Officer by forwarding to such Officer the letter of appointment. The candidate shall also sic the duplicate copy of the letter of appointment to the Counting Agent who shall, on the date fixed for the counting of votes, present it to. and sign the declaration contained therein before the Returning Officer. The Returning Officer shall retain the duplicate copy presented to him in his custody. No Counting Agent shall be allowed to perform any duty at the place fixed for the counting of votes, unless he has complied with these provisions.

Rule - 56W. Death of candidate before poll:-

If a contesting candidate dies and a report of his death is received by the Returning Officer before the commencement of the poll, the Returning Officer shall, upon being satisfied of the fact of the death of candidate, countermand the poll and where the Returning Officer is not the District Election Officer himself, shall report the fact to the District Election Officer along with the proceedings with reference to the election, and the election shall be commenced in all respects as if for a new election:

Provided that, no further nomination shall be necessary in the case of a person who was a contesting candidate at the time of the countermanding of the poll : 

Provided further that, no person who have given a notice of withdrawal of his candidature under Rule 56-T before the countermanding of the poll, shall be eligible for being nominated as a candidate for the election after such countermanding.

Rule - 56X. Uncontested elections.

If after the expiry of the period within which candidatures may be withdrawn under Rule 56-T, the number of candidates in the constituency whose nominations have been accepted as equal to or less than number of seats to be filled, the Returning Officer shall forthwith declare such candidate or all such candidates to be duly elected to fill the seat or the relevant number of seats, as the case may be, and shall complete and certify the declaration in Form M-9 and where the Returning Officer is not the District Election Officer himself, he shall send signed copies thereof to the District Election Officer.

Rule - 56Y. Manner of voting at elections.

At every election where a poll is taken, votes shall be given by secret ballot in the manner hereinafter provided and no votes shall be allowed by proxy.

Rule - 56Z. Ballot Box.

Every ballot box shall be of such design as may be approved by the Chief Election Officer.

Rule - 56-A1. Form of ballot paper.

Every ballot paper shall be in Form M-10 and the names of candidates shall be arranged in the same order in which they appear in the list of contesting candidates. However, if two or more candidates bear the same name, they shall be distinguished by addition of their occupation or residence or in some other manner which should be determined by the Returning Officer.

Rule - 56-A2. Arrangement at Polling Stations.

(1)     Outside each polling station, there shall be:

(a)      notice specifying the polling area, the voters of which are entitled to vote at the polling station and where the polling station has more than one polling booth, at each of such booth, the description of the voters allotted to such booth; and 

(b)      a copy of the list of contesting candidates. 

(2)     At each polling station, there shall be set up, one or more voting compartments in which voters can record their votes screened from reservation.
 

(3)     The Returning Officer shall provide at each polling station a sufficient number of ballot boxes, ballot papers, copies of the list of voters in respect of the polling area or areas the voters of which are entitled to vote at such polling station, instruments for stamping the distinguished mark on ballot papers and articles necessary for voters to mark the ballot papers. The Returning Officer shall also provide at each polling station such other equipment and accessories as may be required for taking the poll at such polling station.

Rule - 56-A3. Admission to Polling Station.

The Presiding Officer shall regulate the number of voters to be admitted at any one time inside the polling station and shall exclude therefrom all persons other than,-

(a)      Polling Officers,. 

(b)      public servants on duty in connection with the election, 

(c)      persons authorised by the Chief Election Officer, District Election Officer or the Returning Officer, 

(d)      candidates, their polling agents, and subject to the provisions of rule 56-V, one polling agent of each candidate, 

(e)      a child in arms accompanying a voter, 

(f)       a person accompanying a blind or infirm voter who cannot move without help, 

(g)      such other persons as the Returning Officer or the Presiding Officer may employ for the purpose of identifying the voter.

Rule - 56-A4. The preparation of ballot boxes for poll.

(1)     Where a paper seal is used for securing a ballot box, the Presiding Officer shall affix his own signature on the paper seal and obtain thereon the signatures of such of the polling agents present and are desirous of affixing the same.

(2)     The Presiding Officer shall thereafter fix the paper seal so signed in the space meant therefor in the ballot box and shall then secure and seal the box in such manner that the slit for the insertion of ballot paper remains open. 

(3)     The seal used securing a ballot box shall be affixed in such manner that after the box has been closed, it is not possible to open it without breaking the seals. 

(4)     Where it is not necessary to use paper seals for securing the ballot box, the Presiding Officer shall secure and seal the ballot box in such a manner that the slit for the insertion of ballot papers remains open and shall allow the Polling Agents present to affix, if they so desire, their seals. 

(5)     Every ballot box used at a polling station shall bear the seal both inside and outside marked with,

(a)      the serial number, if any, and the name of constituency. 

(b)      the serial number and name of the polling station, 

(c)      the serial number of the ballot box to be filled in at the end of the poll on the label outside the ballot box only, and 

(d)      the date of poll. 

(6)     Immediately before the commencement of the poll, the Presiding Officers shall demonstrate to the polling agents and other persons present that the ballot box is empty and bears the labels referred to in sub-rule (5) of this rule. 

(7)     The ballot box shall then be closed, sealed and secured and placed in full view of the Presiding Officer and the Polling Agents.

Rule - 56-A5. Identification of voters.

(1)     The Presiding Officer may employ at the polling station such persons as he thinks fit to help in the identification of the voters or to assist him at the time of taking poll.

(2)     As each voter enters the polling station, the Presiding Officer or the Polling Officer authorised by him in this behalf, shall check the voter's name and other particulars with the relevant entry in the list of voters and then call out the serial number, name and other particulars of the voter. 

(3)     In deciding the right of a person to obtain a ballot paper, the Presiding Officer or the Polling Officer, as the case may be, shall overlook clerical or printing errors in any entry in the list of voters, if he is satisfied that such person is the same voter whom that entry relates.

Rule - 56-A6. Challenging of identity.

(1)     Any Polling Agent may challenge the identity of a person claiming to be a particular voter by depositing sum of Rs. 2 in cash with the Presiding Officer for each such challenge.

(2)     On such deposit being made, by that person, the Presiding Officer shall,- 

(a)      warn the person challenged of the penalty for personation; 

(b)      read the relevant entry in the list of voters in full and ask him whether he is the person referred to in that entry:

(c)      enter his name and address in the list of challenged voters in Form M-l1: and 

(d)      require him to affix his signature in the said list. 

(3)     The Presiding Officer shall thereafter, hold a summary inquiry into the allegations and may for that purpose -
 

(a)      require the challenger to adduce evidence in proof of the challenge and the person challenged to adduce evidence in proof of his identity: 

(b)      put to the person challenged any question necessary for the purpose of establishing his identity and require him to answer them on oath: and

(c)      administer an oath to the person challenged and any other person offering to give evidence ; 

(d)      if. after the enquiry, the Presiding Officer considers that the challenge has not been established, he shall allow the person challenged to vote, and if he considers that the challenge has been established, he shall debar the person challenged from voting ; 

(e)      if the Presiding Officer is of the opinion that the challenge is frivolous or has not been made in good faith, he shall direct that deposit made under sub-rule (1) be forfeited to the State Eletion Fund and in the other case, he shall return it to the challenger at the conclusion of the enquiry. 

Rule - 56-A7. Safeguard against personation.

(1)     With a view to prevent the personation of voters, every voter about whose identity the Presiding Officer or the Polling Officer as the case may be, is satisfied shall allow his left thumb to he inspected by the Presiding Officer or the Polling Officer and an indelible ink mark to be put on it. 

(2)     If any voter refuses to allow his left thumb to be inspected or marked in accordance with sub-rule (1) or has already such a mark on his left thumb or does any act with a view to removing the ink mark, he shall not be supplied with any ballot paper or allowed vote. 

(3)     Any reference in this rule to the left thumb of a voter, shall, in the case, where the voter has his left thumb missing, be construed as a reference to any other finger, or his left hand and shall, in the case where all the fingers of his left hand are missing be construed as a reference to the thumb or any other finger of his right hand, and shall in the case where all his fingers of both the hands are missing, be construed as reference to such extremity of his left or right arm as he possesses.

Rule - 56-A8. Issue of ballot paper.

(1)     No ballot paper shall be issued to any voter before the hour fixed for the commencement of the poll.

(2)     No ballot paper shall be issued to any voter after the hour fixed for the closing of the poll, except to those voters, who are present at the polling station at the time of the closing of the poll. Such voters shall be allowed to record their votes even after the poll hours close. 

(3)     Every ballot paper shall before issue to a voter be,- 

(a)      stamped with such distinguishing mark as the District Election Officer may direct; and 

(b)      signed in full in its back by the Presiding Officer. 

(4)     At the time of issuing a ballot paper to a voter, the Polling Officer shall record the serial number thereof against the entry relating to the voter in the copy of the list of voters set apart for the purpose. 

(5)     Save as provided in sub-rule (4), no person in the polling station shall note down the serial numbers of the ballot papers issued to particular voters.

Rule - 56-A9. Voting procedure.

The voter on receiving the ballot paper shall forthwith :-

(a)      proceed to one of the polling compartments; 

(b)      there make a mark on the ballot paper with the instrument supplied for the purpose on or near the symbols of the candidate for whom he intends to vote ; 

(c)      fold the ballot paper, so as to conceal his vote; 

(d)      if required, show the Presiding Officer the distinguished mark on the ballot paper; (e) insert the folded ballot paper into the ballot box;

(e)      quit the polling station ; and 

(f)       no voter shall be allowed to enter a polling compartment when another voter is inside it.

Rule - 56-A10. Procedure for voting where there are no separate constituencies or more than one seat to be filled in one constituency.

In cases where there are no constituencies defined in the bye-laws or where more than one seat is authorised in the bye-laws for a constituency, voting in so far as these seats are concerned shall be recorded in accordance with the following provisions, namely:

(a)      every voter shall be entitled to give as many votes as there are seats for filling, which votes are to be taken but no voter shall give more than one vote to anyone candidate; 

(b)      the voter shall make a mark on the ballot paper with the instrument supplied for the purpose on or near the symbols of the candidate or candidate for whom he intends to vote, so however, that no part of any mark so made shall appear in the space provided for other candidates. The voter shall thereafter fold the marked ballot paper, so 'as to conceal his vote and insert the folded ballot paper into the ballot box and without undue delay leave the polling station. 

Rule - 56-A11. Recording of vote of blind or infirm voter.

(1)     If the Presiding Officer is satisfied that, owing to blindness or other physical infirmity, a voter is unable to recognise the symbols on the ballot paper or to make a mark thereon without assistance, the Presiding Officer shall permit the voter to take with him a companion of not less than twenty one years of age to the voting compartment for recording the vote on the ballot paper on his behalf and in accordance with his wishes, and if necessary for holding the ballot paper so as to conceal the vote and inserting it into the ballot box: 

Provided that, no person shall be permitted to act as the companion of more than one voter at any polling station on the same day : 

Provided further that, before any person is permitted to act as the companion of voter on any day under this rule, he shall be required to declare in Form M-12 that he shall keep secret the vote recorded by him on behalf of the voter and that he has not already acted as the companion of any other voter at any polling station on that day. 

(2)     The Presiding Officer shall keep a record in Form M-13 of all such cases under this rule.

Rule - 56-A12. Spoilt and Returned ballot papers.

(1)     A voter who has inadvertently dealt with his ballot paper in such manner that it cannot be conveniently used as a ballot paper may, on returning it to the Presiding Officer and on satisfying him of the inadvertence, be given another ballot paper and the ballot paper so returned shall be marked, 'Spoilt cancelled' by the Presiding Officer.

(2)     If a voter after obtaining a ballot paper decides not to use it. he shall return it to the Presiding Officer, and the ballot paper so returned shall be marked as 'Returned cancelled' by the Presiding Officer. 

(3)     All ballot papers cancelled under sub-rule (1) or sub-rule (2) shall be kept in a separate packet.

Rule - 56-A13. Tendered votes.

(1)     If a person representing himself to be a voter applies for a ballot paper after another person has already voted as such voter, he shall, on satisfactorily answering such questions relating to his identity as the Presiding Officer may ask, be entitled to the following provisions of this rule, to mark a ballot paper (hereinafter referred to as a tendered ballot paper') in the same manner as any other voter.

(2)     Every such person shall, before being supplied with a tendered ballot paper, sign his name against the entry relating to him in a list in Form M-14. 

(3)     A tendered ballot paper shall be the same as the other ballot papers used at the polling station, except that it shall be, - (a) serially the last in the bundle of the ballot papers issued for use at the polling station, and (b) endorsed on the back with the words 'tendered ballot paper' by the Presiding Officer in his own handwriting and signed by him. 

(4)     The voter, after marking a tendered ballot paper in the polling compartment, and folding it, shall, instead of putting it into the ballot box, give it to the Presiding Officer, who shall place it in a cover specially kept for the purpose.-

Rule - 56-A14. Closing of poll.

(1)     The Presiding Officer shall close a polling station at the hour fixed in that behalf under Rule 56K and shall not thereafter admit any voter into the polling station:

Provided that, all voters present at the polling station before it is closed shall be allowed to cast their votes. (2) If any question arises whether a voter was present at the polling station before it was closed, it shall be decided by the Presiding Officer and his decision shall be final.

Rule - 56-A15. Sealing of ballot boxes after poll.

(1)     As soon as practicable after closing of the poll, the Presiding Officer shall, in the presence of any candidates or their polling agents, close the slit of the ballot box and where the ballot box does not contain any mechanical device, for closing the slit, he shall seal up the slit and also show any polling agent present, to affix his seal.

(2)     The ballot box shall thereafter be sealed and secured. (3) Where it becomes necessary to use a second ballot box by reason of the first box getting full, the first box shall be closed, sealed and secured as provided in sub-rules (1) and (2) before another ballot box is put into the use.

Rule - 56-A16. Account of ballot papers.

(1)     The Presiding Officer shall at the close of the poll prepare a ballot paper account in Form M-15 and enclose it in a separate cover with the words 'Ballot papers account' superscribed thereon.

(2)     The Presiding Officer shall permit a polling agent, who so desires to take a true copy of the entries made in the ballot paper account and shall attest it as true copy.

Rule - 56-A17. Sealing of other packets.

(1)     The Presiding Officer shall then make into separate packets, -

(a)      the marked copy of the list of voters, 

(b)      the unused ballot papers, 

(c)      the cover containing the tendered ballot papers and the list of the tendered ballot papers. 

(d)      the list of challenged votes, and 

(e)      any other papers directed by the Returning Officer to be kept in a sealed packet. 

(2)     Each such packet shall be sealed with the seals of the Presiding Officer and those polling agents present, who may desire to affix their seals thereon.

Rule - 56-A18. Transmission of ballot boxes, packets, etc.. to the Returning Officer.

(1)     The Presiding Officer shall then deliver or cause to be delivered the following to the Returning Officer at such places as the Returning Officer may direct:

(a)      the ballot boxes, 

(b)      the ballot paper account, 

(c)      the sealed packets referred to in rule 56A16 of these rules, and 

(d)      all other papers used at the poll. 

(2)     The Returning Officer shall make adequate arrangements for the safe transport of all ballot boxes, packets and other papers and for their safe custody until the commencement of the counting of votes.

Rule - 56-A19. Fresh poll in case of destruction etc., of ballot boxes.

(1)     If at any election,

(a)      any ballot box used at a polling station is unlawfully taken out of the custody of the Presiding Officer or the Returning Officer or is accidentally or intentionally destroyed or lost, or is damaged or tampered with, to such an extent, that the result of the poll at the polling station cannot be ascertained, or 

(b)      any such error or irregularity in the procedure as it likely to vitiate poll is committed at a polling station, the Returning Officer (where the District Election Officer himself is not the Returning Officer) shall forthwith report the matter to the District Election Officer. 

(2)     The District Election Officer upon receipt of such report, or of his own motion in the circumstance stated in sub-rule (1) of this rule after taking into consideration all material circumstances, either, - 

(a)      declare the poll at the polling station to be void, appoint a day and fix the hours, for taking a fresh poll at that polling station and notify the day, so appointed and the hours, so fixed in such manner as may deem fit, or 

(b)      if satisfied that, the result of a fresh poll at that polling station will not, in any way, affect the result of the election or that the error or irregularity in procedure is not material, then he may issue such directions to the Returning Officer or take such action as he may deem proper for the election. 

(3)     The provisions of the Act and the rules or bye-laws made thereunder shall apply to every such fresh poll as they apply to the original poll.

Rule - 56-A20. Counting of votes.

At every election where a poll is taken, votes shall be counted by, or under the supervision and direction of the Returning Officer and each contesting candidate and his counting agents shall have a right to be present at the time of counting.

Rule - 56-A21. Admission to the place fixed for counting.

(1)     The Returning Officer shall exclude from place fixed for counting of votes all persons except,-

(a)      such persons as he may appoint to assist him in the counting;

(b)      persons authorised by the District Election Officer; 

(c)      public servants on duty in connection with the election; and 

(d)      candidates, and their counting agents. 

(2)     No person, who has been employed by the society or has been otherwise working for a candidate in the election, shall be appointed under clause (a) of sub-rule (1). 

(3)     The Returning Officer shall decide, with Counting Agent or Agents shall watch the counting at any particular counting table or group of counting tables. 

(4)     Any person, who during the counting of votes misconducts himself or fails to obey the lawful directions of the Returning Officer, may be removed from the place where the votes are being counted by the Returning Officer, or by any police on duty or by any person authorised in this behalf by the Returning Officer.

Rule - 56-A22. Scrutiny and opening of ballot boxes.

(1)     The Returning Officer may have the ballot boxes used at more than one polling station opened and their contents counted simultaneously.

(2)     Before any ballot box is opened at a counting table the Counting Agents present at that table shall be allowed to inspect the paper seal or such other seal as might have been affixed thereon and to satisfy themselves that it is intact. (3) The Returning Officer shall satisfy himself that none of the ballot boxes has in fact been tampered with. He shall not count the ballot papers contained in tempered box and shall follow the procedure laid down in rule 56A19 in respect of that polling station.

Rule - 56-A23. Scrutiny and rejection of ballot papers.

(1)     The ballot, papers taken out of each ballot box shall be arranged in convenient bundles and scrutinised.