WEST BENGAL CO-OPERATIVE SOCIETIES RULES, 1987

CHAPTER I PRELIMINARY

Rule - 1. Short title and commencement.

(1)     These rules may be called the West Bengal Co-operative Societies Rules, 1987.[1]

(2)     They shall come into force[2] on such date as the State Government may, by notification in the Official Gazette appoint, and different dates may be appointed for different provisions of these rules.

Rule - 2. Definitions.

(1)     In these rules, unless there is anything repugnant in the subject or context,

(a)      the 'Act' means the West Bengal Co-operative Societies Act, 1983 (West Bengal Act XLV of 1983);

(b)      'Additional Registrar of Co-operative Societies', 'Joint Registrar of Co-operative Societies', 'Deputy Registrar of Co-operative Societies', 'Assistant Registrar of Co-operative Societies', 'Chief Auditor of Co-operative Societies', 'District Auditor of Co-operative Societies', and 'Co-operative Development Officer' mean, respectively, persons appointed by those designations by the State Government to assist the Registrar of Co-operative Societies;

(c)      'applicant' or 'Chief Promoter' shall mean the first signatory in the application for registration;

(d)      'borrowed capital' means the total of loans, deposits and other borrowings of a co-operative society;

(e)      'Collector' means in Calcutta the Collector of Calcutta and in a district, the Chief Executive Officer in charge of revenue administration of the district;

(f)       'distrainer' means a person who is empowered by the Registrar to distrain and sell the produce of mortgaged land including the standing crops thereon, in accordance with the provisions of section 110;

(g)      'form' means a form appended to these rules;

(h)     'member' includes delegates of members referred to in the proviso to sub-section (1) of section 24;

(i)       'owned capital' means the total of paid-up share capital and accumulated reserve fund and other funds created out of profits of a co-operative society or otherwise;

(j)       'working capital' means the total capital of a co-operative society consisting of borrowed capital and owned capital;

(k)      'secretary' means a person who, subject to the control of the board, is entrusted with the management of the affairs of a co-operative society and includes any person discharging the duties of a secretary or by whatever name called;

(l)       'section' means a section of the Act.

(2)     Words and expressions used in these rules but not defined and defined in the Act shall have the same meanings as are respectively assigned to them in the Act.

(3)     Unless otherwise specified in these rules and the by-laws of a co-operative society,

(a)      words imparting the masculine gender include the feminine gender;

(b)      words in the plural include the singular and vice versa;

(c)      the word 'person' includes a body of persons, corporate or otherwise;

(d)      expressions referring to writing include printing, typing, lithography, photography and other methods of representing or reproducing words in a visible form; and

(e)      with reference to a person who is unable to write his name, the word 'signature' shall include his thumb impression or other mark duly attested to signify his signature.

Rule - 3. Determination of one-half, one-third, etc.

When any rule requires the determination of one-half, one-third, or any other fraction of a number and that number is not evenly divisible by 2, 3 or such other figure as may be required, the number next above which is evenly divisible by 2, 3 or such other figure shall be taken for the original number.

Rule - 4. Forms.

The forms appended to these rules or forms as near thereto as circumstances admit shall be used in all matters to which these forms relate:

Provided that the Registrar may allow use of modified forms according to circumstances requiring such modifications.

Rule - 5. Net profit.

The 'net profit' of a co-operative society shall be the profit remaining after deduction of the following charges in addition to those specified in clause (29) of section 2, namely :

(a)      working charges as repairs, rents, rates and taxes, grants or subsidies received, depreciation and irrecoverable book debts written off;

(b)      capital expenditure written off either wholly or in part

(c)      capital loss actually incurred and not adjusted against any fund created out of profits;

(d)      provisions for estimated bad debts, if any; and

(e)      such other charges as may be specified by the Registrar.

Rule - 6. Functions of the State Co-operative Union and the District Co-operative Unions.

(1)     Subject to such directions as the State Government may, from time to time, issue regarding utilisation of funds provided by it or in respect of other matters, the State Co-operative Union may discharge the following functions, namely:

(i)       to promote and develop the co-operative movement in the State, to educate, guide and assist the people in their efforts to build up and expand the co-operative sector and to serve as an exponent of co-operative principles and ideas;

(ii)      to organise co-operative training programmes and run training centres;

(iii)     to develop inter co-operative relationship and help the coordinated functioning of the co-operative movement in various sectors;

(iv)    to organise, conduct, collaborate and assist in carrying out research and investigation on important co-operative problems;

(v)      to maintain an information bureau and library;

(vi)    to express and organise opinion on matters of co-operative policy and act as the accredited representative of co-operative movement in the State in the national and international spheres;

(vii)   to convene, organise and hold co-operative seminars, meetings, conferences and exhibitions, to spread the message and ideals of co-operative movement in the State and to mould public opinion in respect thereof;

(viii)  to facilitate the promotion of co-operative societies and assist the affiliated societies in resolving their problems and difficulties;

(ix)    to select delegates, representatives or observers on behalf of the State Co-operative Union for participation in conferences;

(x)      to organise, promote or undertake such other activities or functions as are considered beneficial or conducive towards the attainment of the objects of the Union in accordance with the by-laws thereof;

(xi)    to nominate three representatives in the Board of the District Co-operative Union.

(2)     The following shall be the functions of the District Co-operative Union:-

(i)       to promote and develop the co-operative movement in the district;

(ii)      to organise co-operative education training programmes of the State Co-operative Union in the district;

(iii)     to convene, organise and hold co-operative seminars, meetings, conferences and exhibitions to spread the message and ideas of co-operative movement in the districts and to mould public opinion in respect thereof;

(iv)    to facilitate the promotion of co-operative societies and assist their affiliated societies in resolving their problems and difficulties;

(v)      to select delegates, representatives and observers on behalf of the district co-operative unions for participation in conferences and meetings, etc. at the district, state, national and international levels;

(vi)    to organise, promote or undertake such other activities or functions as are considered beneficial or conducive towards the attainment of the objects of the State Co-operative Union in accordance with the by-laws thereof.

CHAPTER II REGISTRATION

Rule - 7. Restriction to formation of certain co-operative societies.

(1)     No primary co-operative credit society shall be registered unless the applicants

(i)       reside or hold landed property in the same town or village or in the same group of villages; or

(ii)      are members of the same class or occupation.

(2)     No apex or central society shall be registered unless it has among its applicants at least six co-operative societies.

Rule - 8. Application for registration.

(1)     An application for registration of a society shall be submitted to the Registrar in Form I and shall be signed by the applicants.

(2)     Where a co-operative society is the applicant, the application shall be signed by an officer of the society duly empowered to sign documents on its behalf.

(3)     With every application there shall be submitted, duly signed by the applicants, two copies of the by-laws which the society proposes to adopt and also a third copy, if the society intends to be a member of a central society or an apex society.

Rule - 9. Registration of Society.

(1)     On receipt of the application, the Registrar shall satisfy himself that the application and the by-laws are in conformity with the provision of the Act and the rules and the by-laws are also suitable for

(a)      carrying out the objects of the society, and

(b)      ensuring the safe conduct of the business of the society.

(2)     When a society is registered, the Registrar shall grant certificate of registration in Form II.

(3)     On the registration of a society, two copies of its approved by-law shall be stamped with the official seal of the Registrar, one of the said copies shall be retained in the office of the Registrar and the other copy together with the, certificate of registration shall be forwarded to the society.

(4)     If the society intends to be a member of a central society or an apex society, another copy of the approved by-laws shall be authenticated similarly and sent to such central or apex society.

Rule - 10. Co-operative Registration Council.

(1)     The Co-operative Registration Council, referred to in sub-sections (5), (6) and (7) of section 13, shall have a Secretary to be appointed by the State Government by notification in the Official Gazette. None who is not at least a member of the West Bengal Junior Co-operative Service and has not served as such for at least five years shall be eligible to be appointed as Secretary. The Secretary shall perform such duties as may be assigned to him by the Council.

(2)     The Co-operative Registration Council (hereinafter referred to as the Council) shall discharge its functions in the following manner:

(a)      On receipt of the memorandum sent by the Registrar under sub-section (5) of section 13, transferring therewith the papers pertaining to the registration proposal, the Secretary of the Council shall convene by a written notice meeting of the Council within ten days from the date of such receipt. Seven clear days' notice shall be given for such meeting. Along with such notice shall be sent a statement containing the following particulars:

(i)       name of the proposed society and the proposed address thereof;

(ii)      area of membership of the society and its class;

(iii)     groups on which or reasons due to which the Registrar refused registration of the society or did not or could not dispose of the application within the period mentioned in clause (a) or clause (b) of sub-section (4) of section 13.

(b)      Copies of such notice shall be sent to the applicant or the Chief Promoter affording him an opportunity of being heard before the Council.

(c)      Two members of the Council will form quorum for holding its meeting. If the Chairman be absent the members present shall select one from amongst themselves to be the Chairman of the meeting.

(d)      The meeting of the Council shall examine the case and decide. The proceedings of such meeting including the decision shall be recorded in the minute book to be maintained by the Council for such purpose.

(e)      Where the Council decides that the proposed society shall not be registered, the Secretary of the Council shall communicate the decision -to all concerned by registered post and return the relevant papers to the applicant or the Chief Promoter.

(f)       Where the Council decides that the proposed society should be registered, the Secretary of the Council shall send back the papers to the Registrar for registration of the society. Seventeen days' notice shall be given for such meeting. The Secretary shall also communicate the fact to the applicant or the Chief Promoter.

(g)      Where the applicant or the Chief Promoter for registration of a co-operative society and its by-laws wishes to appeal to the Council under sub-section (6) of section 13, he or when a co-operative society wishes to appeal to the Council under sub-section (5) of section 17, it shall prepare a memorandum of appeal which shall-

(i)       be either typewritten or written legibly by hand;

(ii)      state the name and address of the appellant clearly;

(iii)     state the date and mode in which the application for registration was sent or submitted to the Registrar;

(iv)    state the name of the society and all particulars about it including address, area of membership and the object.

(3)     The Secretary shall maintain the following registers :-

(i)       Register of references received from the Registrar under sub-section (5) of section 13 in Form III.

(ii)      Register of appeals received from applicants or Chief Promoters, as the case may be, under sub-section (6) of section 13, in Form IV.

(iii)     Register of appeals presented under sub-section (5) of section 17, in Form V.

(iv)    Register of miscellaneous letters received, in Form VI.

(v)      Register of letters issued, in Form VII.

(vi)    Minute book for the meetings of the Council.

Rule - 11. Making of by-laws.

(1)     Every co-operative society shall make by laws, not inconsistent with the provisions of the Act and these rules in respect of the following matters, namely:

(a)      the name and registered address of the society;

(b)      the extent of the area the inhabitants of which or the persons carrying on their trade, profession or occupation at which are eligible to apply for membership of the society;

(c)      the object for which the society is established and the purpose to which its funds may be applied;

(d)      the qualifications required for membership and the terms of admission of members;

(e)      the rights and liabilities of members;

(f)       the manner in which the capital may be raised;

(g)      the mode of appointment and removal of the directors and officers of the society, and the duties and powers of the board;

(h)     the mode of summoning and conducting meetings and the right of voting;

(i)       the general conduct of the business of the society;

(j)       the disposal of profits;

(k)      withdrawal, removal and expulsion of members;

(l)       transfer of share or interest of a member;

(m)    the procedure and powers of a general meeting;

(n)     the power and duties of the Chairman, Vice-Chairman, Treasurer and Secretary (when the Secretary is not the Chief Executive Officer) and the Chief Executive Officer by whatever designation he may be called;

(o)      authorisation of an officer or officers to sign documents on behalf of the co-operative society;

(p)      inspection of the books of the co-operative society and the conditions or the supply of certified copies thereof;

(q)      mode of custody and of investment of funds;

(r)      mode of keeping the accounts;

(s)      settlement of disputes;

(t)       formation and use of reserve fund and the maximum rate of dividend;

(u)     amendment of by-laws;

(v)      manner of sending notices;

(2)     By-laws of a co-operative society shall also include :

(a)      where it is a credit society

(i)       guidelines for granting loans, determination of the maximum and normal credit of members and maximum loan admissible to a member;

(ii)      purposes for which loans may be granted;

(iii)     extension of the period of repayment and renewal of loans;

(b)      where it is a consumers' society, declaration of periodical rebates in appropriate cases on the purchases made from the society by the member, making provision for the issue of shares against the rebates so declared.

(3)     A co-operative society may also make by-laws on any other matter incidental to the management of its business including:

(a)      imposition of fines and penalties on members and consequences of the failure of any member to pay sum due;

(b)      internal supervision and audit of accounts;

(c)      supply of copies of by-laws and of the annual balance-sheet to members.

(4)     Where there is conflict between the rules and the by-laws, the provision of the rules shall prevail.

Rule - 12. Conversion of co-operative society with unlimited liability into a co-operative society with limited liability.

A co-operative society with unlimited liability functioning immediately before the commencement of the Act may convert itself into a co-operative society with limited liability within two years from the date of commencement of the Act by a resolution passed at a general meeting and shall suitably amend its by-laws in the manner laid down in rule 13.

Rule - 13. Amendment of by-laws.

(1)     A co-operative society may by resolution in general meeting adopted by two-thirds of the members present but not less than one-third of the total number of members as on the register of members on the date of issue of notice of such general meeting amend its by- laws :

Provided that the Registrar may register an amendment of by-laws adopted by two-thirds of the members present but not comprising one-third of the total number of members as aforesaid, if for reasons to be recorded in writing, he is satisfied that

(i)       it is impossible for the society to secure the attendance of one-third of the total number of members at a general meeting, and

(ii)      the adoption of the proposed amendment is in the interest of the society.

(2)     In every case in which the by-laws of a society are amended, an application in Form VIII for the registration of the amendment shall be submitted to the Registrar, signed by the Secretary and two directors, along with :

(a)      in case of partial amendment two copies of statement showing the existing by-laws and the amended by-laws and two copies of the resolution approving the amendment;

(b)      in case of complete amendment by substitution of an entire set of bylaws, two copies of the new by-laws and existing by-laws and two copies of the resolution approving the substitution;

(c)      where the society is a member of a central society or an apex society, a third set of such copies.

(3)     When the Registrar registers the amendment he shall retain one copy of the statement or the by-laws, as the case may be, and the copy of the resolution and send another copy of the statement or by-laws, as the case may be, to the society together with a certificate of registration in Form IX. If the society is a member of a central society or an apex society, the third copy duly authenticated by the Registrar shall be sent to such central or apex society, as the case may be.

(4)     When the Registrar finds that there are prima facie grounds for refusing the registration of the proposed amendment under sub-section (3) of section 17, he shall, before making the order of refusal, afford the society an opportunity of making its representation under a memorandum stating therein the grounds on which he proposes to refuse to register the amendment.

Rule - 14. Amendment of by-laws at the instance of the Registrar.

(1)     The Registrar shall issue notice to the Chairman or the Secretary or the Chief Executive Officer to call a special general meeting for amendment of by-laws which shall be direction on the co-operative society under sub-section (1) of section 18.

(2)     The provisions of Chapter IV of these rules apply in relation to holding of such meeting.

CHAPTER III TRANSFER OF ASSETS AND LIABILITIES AND DIVISION AND AMALGAMATION OF CO-OPERATIVE SOCIETIES

Rule - 15. Consultation with apex society.

For the purpose of consultation envisaged in sub-section (1) of section 20, the Registrar shall inform the apex society concerned about the necessity to order amalgamation or reorganisation, requesting such apex society to give its views within thirty days from the date of such communication.

Rule - 16. Issue of order for amalgamation or re-organisation.

(1)     The draft of an order to be sent to a co-operative society shall be sent by registered post with acknowledgement due. It shall also be published in the Official Gazette.

(2)     After considering the suggestions or objections as per clause (b) of subsection (2) of section 20, the Registrar shall pass a final order under sub-section (1) of section 20 and shall publish such order in the Official Gazette and send copies thereof to the concerned co-operative societies and the concerned apex societies and where the co-operative societies are concerned with dispensing of agricultural credit, to the Reserve Bank of India and the National Bank for Agricultural and Rural Development.

(3)     Every co-operative society receiving a copy of the order as per sub-rule (2) shall within thirty days of the receipt thereof, communicate, in writing, the substance thereof of its members and creditors either by delivery by hand on taking proper receipt or by registered post with acknowledgement due.

CHAPTER IV MANAGEMENT OF CO-OPERATIVE SOCIETIES

Rule - 17. Prohibition of admission of members and transfer of shares on the eve of general meeting.

No co-operative society shall admit a member or transfer shares of members within thirty days prior to the date of the annual general meeting in which election of the directors of the board is to be held and till assumption of charge by the new board.

Rule - 18. Notice of annual general meeting and special general meeting.

(1)     An annual general meeting or a special general meeting shall be convened by the Secretary or any other officer authorised by the board in accordance with the direction of the board.

(2)     Unless otherwise provided in the by-laws, a notice of the meeting stating the place, date and hour of the meeting together with a statement of business to be transacted at it, shall be sent to every member not less than twenty-one days before the date of the meeting.

(3)     Any accidental omission to give notice to any member or the non receipt of the notice by any member shall not invalidate the proceeding of any meeting.

(4)     When the Registrar or the officer or the person as the case may be authorised by him calls an annual general meeting under sub-section (3) of section 25 or a special general meeting under sub-section (3) of section 26 or when the Registrar calls an annual general meeting under sub-section (4) of section 25, the Secretary or any other officer authorised under these rules to call annual general meetings and special general meetings shall arrange to issue and despatch the notices of the meetings as may be required by the Registrar or the officer or the person authorised by him.

Rule - 19. Annual general meeting.

(1)     The first annual general meeting of every co-operative society shall be held within fifteen months from the date of its registration and thereafter annual general meetings shall be held as provided in section 25.

(2)     (i) If the board fails to take steps, or does not give direction, to convene any annual general meeting at least two months before the expiry of the period referred to in the sub-rule (1), the Chairman, or in his absence the Vice-Chairman, or in the absence of both, the Chief Executive Officer or the Managing Director shall convene the meeting.

(ii) Where an annual general meeting is required to be held by convoking representatives, the election of delegates shall be completed before the period of two months referred to in the clause (i):

Provided that in case of failure of the board to take steps or to give directions well in advance towards the holding of such election within the prescribed period the Chairman or in his absence the Vice-Chairman or in the absence of both, the Chief Executive Officer or the Managing Director shall perform such duties on behalf of the board :

Provided further that where an annual general meeting is called by Registrar he shall hold or authorise any of his officers to hold election of delegates in case the board fails to hold such election of delegates within the time specified by the Registrar or by the officer or person authorised by him.

(iii) No person shall be qualified to be chosen as a representative or elected as a delegate to join the general meeting of an apex society or a general society, if he is not a member of such apex or central society or of any co-operative society affiliated to such society or central society.

Rule - 20. Special general meeting.

(1)     The rules pertaining to annual general meetings shall apply, mutatis mutandis, to a special general meeting called under section 26.

(2)     At a special general meeting, no business other than that specified in the relevant notice shall be considered.

Rule - 21. Requisition of special general meeting.

A requisition for a special general meeting to be convened under clause (a) of sub-section (1) of section 26 shall state the object of the meeting, shall be signed by the member requisitioning it and shall be sent to the registered office of the society.

Rule - 22. Power of general meeting.

(1)     The general meeting of a co-operative society shall examine, in addition to those mentioned in section 25, the annual report regarding working of the society and, in particular, the work of the board and shall be competent to take all steps that may be necessary in the interest of the society.

(2)     Every resolution at a meeting shall be decided by a majority of votes and if the votes be equal, the matter shall be decided by the casting vote of the Chairman of the meeting.

Rule - 23. Chairman of general meeting. -

(1)     (a) The Chairman, or in his absence the Vice-Chairman shall preside over annual or special general meeting and in the absence of the both, one of the directors in the panel mentioned in sub-rule (1) of rule 32 in the order of their names in the panel, shall preside over the meeting. And in absence of all in the panel, the members present shall elect one from amongst themselves to be the Chairman of the meeting.

(b) Where there is no board or the board cannot function for any reason the members present shall elect one from amongst themselves to be the Chairman of the meeting.

(c) If the Chairman of the meeting is a candidate for election that item of agenda of the meeting shall be presided over in terms of clause (a) as if the Chairman is absent.

(d) At the conclusion of the meeting the proceedings shall be signed by the Chairman/Chairmen.

(2)     The Chairman shall maintain order in the meeting. He shall conduct the proceedings in such manner as may be conductive to expeditious and effective disposal of business and shall decide all points of order and his decision thereon shall be final. The Chairman may direct any member to withdraw for improper conduct and the member so directed shall immediately withdraw and shall not participate in the deliberations of the meeting and shall not be entitled to vote without the permission of the Chairman. In the event of disorder the Chairman may adjourn the meeting to a date not later than one month from the date of adjournment. The meeting shall not be adjourned for the second time.

(3)     Where the business of the general meeting cannot be completed in course of one sitting, the meeting shall be adjourned by the Chairman to the same day in the next week at the same place and time. The meeting shall not be adjourned for the second time.

(4)     The board may by resolution invite any person whose expert opinion may be beneficial to the society to remain present at any meeting for expressing his opinion if called for by the Chairman.

Rule - 24. Quorum of annual or special general meetings.

(1)     Unless a larger proportion is provided in the by-law the quorum of an annual or special general meeting shall be one-fifth of total number of members subsisting on the date of notice of the meeting. No business shall be transacted at any meeting unless there is a quorum and the meeting shall be-adjourned.

(2)     If within half-an-hour from the time appointed for the meeting a quorum is not present the meeting shall be adjourned ordinarily to the same day in the next week at the same place and time.

(3)     The business to be transacted in the adjourned meeting shall be the same as in the agenda of the original meeting and no fresh notice is necessary for such adjourned meeting:

Provided that no quorum shall be necessary at an annual or special general meeting which had been adjourned under sub-rule (2):

Provided further that a special general meeting which had been called on requisition under clause (a) of sub-section (1) of section 26 shall not be adjourned but be dissolved.

Rule - 25. Minutes of general meeting.

(1)     Every co-operative society shall cause minutes of proceedings of general meeting to be entered in a book kept for that purpose.

(2)     The minutes shall be drawn up and signed by the Chairman of the meeting within seventy-two hours from the time when the meeting terminates.

(3)     A general meeting of a society of which the proceedings have been so recorded, shall be deemed to have been duly called and held.

Rule - 26. Voting in general meeting.

(1)     Every member present at the meeting shall have only one vote. All voting excepting in the case of an election shall be by show of hands. For the purpose of election a 'poll' shall be held if demanded by at least 10 per centum of the members or delegates, as on the date of notice of the general meeting, three days before the holding of such election. A decision by the Chairman that a resolution has been carried or lost and the entry to that effect in the minutes of the proceedings shall be conclusive proof of whether the resolution has been carried or lost.

(2)     if a poll is demanded the vote shall be taken by ballot in such manner and at such time as the Chairman directs.

(3)     When a poll is taken, the number of members voting for or against a resolution shall be recorded in the minutes of the proceedings.

Rule - 27. General meeting by delegates.

(1)     A primary co-operative society with a membership of 1500 or more shall hold its general meetings by convoking representatives (hereinafter referred to as delegates), of areas, sections, constituencies or categories as the case may be, instead of summoning all the members in persons, on the basis of the following slabs of the representation, namely:

(a)      One delegate for every 50 members or major fraction thereof for a society having a membership between 1500 and 3000;

(b)      One delegate for every 100 members or major fraction thereof for a society having a membership between 3001 and 5000;

(c)      One delegate for every 200 members or major fraction thereof for a society having a membership between 5001 and 10000;

(d)      One delegate for every 300 members or major fraction thereof for a society having a membership of 10001 and 30000;

(e)      One delegate for every 500 members or major fraction thereof for a co-operative society having membership of 30001 or more.

(2)     Notwithstanding anything contained in sub-rule (1), the West Bengal State Co-operative Bank Limited, the West Bengal Central Co-operative Land Development Bank Limited and the Central Co-operative Banks shall hold their respective general meetings by convoking representatives (hereinafter referred to as the delegates) of section or categories, as the case may be, instead of summoning all members in person on the following basis, namly;

(a)      in case of West Bengal State Co-operative Bank Limited

(i)       one delegate for every central bank and one delegate from the area of operation of each central bank (if any) amalgamated with the State Co-operative Bank in terms of the scheme drawn by the State Government;

(ii)      one delegate for every member of the apex society;

(iii)     one delegate for every category of other member society provided that where the number in a category exceeds 50, there shall be one delegate for every 50 or a fraction thereof, and

(iv)    one representative of the State Government;

(b)      in the case of the West Bengal Central Co-operative Land Development Bank Limited

(i)       one delegate for every member primary land development bank;

(ii)      one delegate to be elected from the area of operation of each branch of the Central Co-operative Land Development Bank Limited by the members in that area;

(iii)     one delegate for every class of the other members; and

(iv)    one representative of the State Government;

(c)      in case of central co-operative bank

(i)       one delegate for every co-operative society affiliated to the bank concerned;

(ii)      one delegate for every 100 individual members or a fraction thereof, where individual persons are enrolled as members;

(iii)     one representative of the State Government where the State Government is a shareholder.

(3)     No person shall be qualified to be elected as a delegate who is not a member of the society or the concerned affiliated society and who has not the qualification of being a director of a co-operative society.

(4)     The delegate shall hold office and attend all general meetings till fresh delegates are elected in their place :

Provided that fresh delegates shall be elected before each annual general meeting in which election of directors is to be held under sub-section (1) of section 25.

(5)     Each delegate shall have one vote.

(6)     A member shall cease to be a delegate, if he
 

(a)      ceases to be a member of the society, or of the affiliated society, or

(b)      resigns his office as a delegate.

(7)     A casual vacancy in the office of a delegate in any area, section, constituency or category, shall be filled by election, within six months from the date of such vacancy by members in the area, section, constituency or category concerned:

Provided that a casual vacancy caused in the office of a delegate from any affiliated society shall be filled up in the manner in which the delegate had been elected:

Provided further that failure to fill a casual vacancy shall not invalidate the proceedings in a general meeting.

Rule - 28. Division of area of a society for election of delegates.

(1)     The board shall divide the area of membership of the society into convenient areas, sections, constituencies or categories for the purpose of election of delegates.

(2)     The division of area of membership of a society under sub-rule (1) shall be duly notified to all the members, and a member of a particular area, section, constituency or category shall be entitled to vote in the election of delegate only for that particular area, section, constituency or category.

Rule - 29. Framing of regulation by board.

The board shall make regulations to provide for all matters relating to

(a)      the manner of nomination and election of delegates;

(b)      the total number of delegates to be elected, and area, section, constituency or category in accordance with rule 28.

Rule - 30. Constitution of board.

(1)     The board of a co-operative society shall be constituted by

(a) election from amongst members at an annual general meeting :

Provided that when the general meeting of a society is held for electing members of the Board thereof, and the affiliated societies are represented by delegates in such meeting, only such delegates of such affiliated societies shall be eligible for election as directors of first mentioned societies representing the respective affiliated societies;

[3][(b)... .. .. ...]

(c)   nomination by the State Government when it decides to make such nomination under section 33;

(d)   election by the employees of a co-operative society having not less than ten employees under sub-section (3) of section 27, such election shall be held by ballot;

(e)   the Chief Executive where a co-operative society has such an executive paid out of its funds under sub-section (4) of section 27;

(f)   nomination by Gram Panchayat or Panchayat Samity, as the case may be, under sub-section (5) of section 27.

(2)     A member nominated by the State Government to the board of a co-operative society under section 33 shall hold office until a fresh nomination is made in his place, and the State Government may nominate a new member to fill up any casual vacancy of a nominated member.

(3)     [4][In case of apex and central co-operative society the number of directors to be elected shall not be less than six or more than 15 but where the aforesaid societies have less than 12 members, the number of such directors shall not be less than 3 or more than 5 and in cases of primary co-operative societies, the number of the elected directors shall be such as may be specified in the by-laws thereof.]

Rule - 31. Election of directors at an annual general meeting.

(1)     Except where election by ballot is demanded by at least ten per cent of the members or delegates as on the date of notice of the general meeting present, the directors shall be elected, subject to the provisions of rule 36, by open vote at the annual general meeting:

Provided that the election of all apex and central societies shall be held by ballot.

(2)     Where the number of candidates exceeds the number of directors to be elected, the election of directors shall be on the basis of number of votes polled by each candidate individually.

(3)     In case of equality of votes secured by two or more candidates, lots shall be drawn in such manner as the Chairman may decide.

(4)     At the first annual general meeting of all societies, held after the commencement of these rules, the whole body of directors shall retire and shall be eligible for re-election in accordance with the provision contained in section 27.

Rule - 32. Election of office bearers.

(1)     The board of directors under rule 30 shall, within a period not exceeding thirty days after the general meeting elect a Chairman and a Vice-Chairman, a panel of Chairman not exceeding three for presiding over its meeting in absence of the Chairman and the Vice-chairman, and other necessary office bearers from amongst themselves.

(2)     In the case of equality of votes in the matter of such elections, the result shall be determined by lot.

(3)     When the meeting of the board is not held within the period of thirty days as required by sub-rule (1), the Registrar or any person authorised by him shall as early as possible arrange a meeting in exercise of the powers conferred under subsection (1) section 32.

(4)     The outgoing board shall stand dissolved when the new office bearers are elected under sub-rule (1) or the Registrar takes steps under proviso to clause (a) of sub-rule (1) of section 25.

(5)     A meeting under sub-rule (3) shall be called within the thirty days after the general meeting by the Secretary of the outgoing board or by the Election Officer or the Presiding Officer, as the case may be.

Rule - 33. Filling up of casual vacancy.

Any casual vacancy in the office of director elected under sub-section (1) of section 27 shall be filled up by co-option by the remaining directors within one month from the date of such vacancy, and if they fail to do so, the vacancy shall be filled up by appointment by the Registrar and the director so co-opted or appointed shall retire at the annual general meeting where election is to be held next:

Provided that if such casual vacancy is not filled up, anything done or suffered or any action taken by the board during the continuance of such vacancy shall not be invalidated by reason only of such vacancy having not been filled up.

Rule - 34. Filling up of vacancy in the board where requisite number of directors cannot be elected due to disqualification or otherwise.

If at the annual general meeting of a co-operative society requisite number of directors cannot be elected as required under the by-laws due to disqualification, non-receipt of requisite number of nomination papers or any other reason, the vacancy shall be filled up by appointment by the Registrar to complete the board. The directors so appointed shall continue till fresh election which shall ordinarily be held within one year from the date of appointment by the Registrar.

Rule - 35. Reservation of seats on the board.

Where the State Government provides for reservation of seats on the board of a co-operative society under section 34, the seats shall be filled up by election of candidates from the appropriate community, class or group. If the seats cannot be filled up thus, the same shall be filled up under rule 3, ordinarily from members of that community.

Rule - 36. Procedure for holding election in a general meeting in some cases.

(1)     The election of directors and office-bearers of every apex society, central society and primary society having working capital or annual transaction of rupees ten lakh and above shall be held in the manner specified in this rule.

(2)     Every society may for the purpose of election of directors, divide its membership into different convenient groups, specify in its by-laws the number of proportion of the members of the board who may be elected to represent each such group in the board and specify further that such representative may be elected (a) by all the members of the society, or, (b) by only particular group of members of the society to which the representative vacating the office belonged.

(3)     The election of the members of the board shall be held at an annual general meeting of the members or of the delegates of such members for which not less than twenty-one days' notice shall be sent to each member.

(4)     The Chairman of the said meeting (hereinafter in this rule referred to as the "Presiding Officer") shall conduct the election. No member seeking election shall act as "Presiding Officer" to conduct the election.

(5)     (i) Notice of the general meeting shall be affixed on the Notice Board of the society and published at such conspicuous place as the board may decide. The notice of the general meeting shall be sent to the members or to the delegates in one or more of the following modes, namely

(a)      by local delivery under proper receipt, or

(b)      by post under certificate of posting, or

(c)      by publication through press.

(ii) The notice shall contain information regarding-

(a)      the number of vacancies to be filled up by election;

(b)      the area or constituency specified in the by-law from which the member is to be elected;

(c)      the qualification, if any, prescribed in the rules and by-law for eligibility for membership of the board;

(d)      the date on which, the place at which and the hours between which the nomination papers shall be filed by a member, such date being not less than ten clear working days before the date fixed for election;

(e)      the date on which, the place at which and the hour when the nomination papers will be scrutinised; and

(f)       the date on which, the place at which and hours between which the polling will take place.

(6)     The board shall prepare a list of the members or of the delegates who are on the date of the notice referred to in sub-rule (3) qualified in accordance with the provisions of the Act, and the rules and the by-laws of the society to vote at the election, and publish copies of such list by affixing the same to the Notice Board at the head office of the society and all its branches not less than fifteen days prior to the date fixed for election. The list shall specify the name of each eligible member or delegate, the name of father (or husband in case of married woman), the address of such member or delegate including the name of the society, if any, he or she represents and his/her number in the register of members.

(7)     (i) The nomination of a candidate for election shall be made in Form X as far as practicable.

(ii) Every nomination paper shall be signed by any two members whose names are included in the list referred to in sub-rule (6). One of the members shall sign the form as proposer and the other as seconder for the nomination. The nomination paper shall also contain a declaration signed by the candidate to the effect that he is agreeable to the nomination.

(iii) Every nomination paper shall be presented in person or through authorised agent or by registered post to the Chairman of the society or any other officer duly authorised in this behalf by the board of such society. If the Chairman himself is a candidate, the board of the society shall authorise some other officer, who is not a candidate, to receive the nomination paper.

(iv) (a) The person who receives the nomination paper shall enter in the nomination paper its serial number certify the date and hour at which the nomination paper is received by him and also immediately acknowledge the receipt of the nomination paper.

(b) The nomination papers received after the date and hour fixed under sub-clause (d) of clause (ii) of sub-rule (5) shall not be considered.

(8)     (i) (a) On the day following next the date fixed as the last date for the receipt of nomination papers, the board shall take up the scrutiny of the nomination papers at a special meeting convened only for that purpose. No quorum shall be necessary in such a meeting. The proposer and the seconder, besides the candidate, may be present at the time of scrutiny.

(b) The board shall examine the nomination papers and decide all objections which may be made at the time of scrutiny and may, either on such objection or on its own motion, after such summary enquiry, if any, as the board thinks necessary, reject any nomination paper on sufficient grounds :

Provided that the nomination of a candidate shall not be rejected merely on the ground of an incorrect description of his name or of the name of his proposer or seconder, or of any other particulars in regard to the candidate or his proposer or the seconder as entered in the list of members or delegates referred to in sub-rule (6) if the identity of the candidate, proposer or seconder, as the case may be, is established.

(ii) The board shall give all reasonable facilities to the contesting candidates or their representatives to examine all the nomination papers for satisfying themselves about the correctness of their scrutiny.

(iii) The board shall endorse on each nomination paper its decision and if the nomination paper is rejected, shall record in writing the reasons for such rejection.

(9)     The list of valid nominations, as decided by the board, shall be published on the notice board of the society on the same day on which the scrutiny of the nomination paper is completed but not later than one hundred and sixty eight hours before the time of election.

(10)   Any candidate may withdraw his candidature by notice in writing signed by him and delivered in person or through authorised agent at any time after the presentation of his nomination paper but before 3 p.m. on the day following the day on which the list of valid nominations is published under sub-rule (9) to the Chairman of the society or any other officer a uthorised for the purpose under clause (iii) of sub-rule (7). A notice of withdrawal of a candidature once given shall be final.

(11)   If for any area or constituency for which election is to be held the number of candidates in respect of whom valid nomination papers have been filed does not exceed the number of members to be elected for that area or constituency, the candidates in respect of whom valid nominations have been received shall be deemed to have been duly elected for the area or constituency, as the case may be, and the Presiding Officer shall make an announcement to this effect at the commencement of the meeting convened for election. The names of such candidates shall immediately thereafter be published in the Notice Board of the Society.

(12)   If the number of candidates for any area or constituency exceeds the number of members to be elected, the election may be held either by ballot or by open vote. The Presiding Officer shall arrange a poll, if necessary on the date fixed for the general meeting or in an adjourned meeting and may appoint one or more polling officers or may himself function as polling officer. The provisions of sub-rules (13) to (21) shall apply when the election is required to be held by ballot.

(13)   The Presiding Officer shall provide the polling officer with ballot papers, copy of list of members or of delegates referred to in sub-rule (4) and such other papers and articles as may be necessary for conducting the election.

(14)   The ballot paper shall contain the names of candidates and where so decided by the board the symbol of the candidate and shall bear the seal of the society.

Note : Symbols specified in the Third Schedule ..................... ......shall ordinarily be used. In case the number of candidates exceeds the number.......................................of symbols so specified, the board may add ............to the symbols other than accredited symbols......... ...........................of the Election Commission of India.

(15)   No ballot paper shall be issued to a voter unless the polling officer is satisfied about identity of such voter.

(16)   If owing to blindness or other physical infirmity, or illiteracy, a voter is unable to mark the ballot paper the polling officer shall ascertain from him the candidate or candidates in whose favour he desires to vote and shall accordingly mark the ballot paper on his behalf.

(17)   The counting of votes shall commence immediately after the polling is declared over by the Presiding Officer. Votes shall be counted by or under the direct supervision of the Presiding Officer. Each candidate and his authorised agent shall have right to be present at the time of counting.

(18)   (i) A ballot paper shall be rejected

(a)      if it bears any mark by which the member, who voted can be identified; or

(b)      if it does not bear the seal of the society; or

(c)      if the mark indicating the vote is made in such manner that it is doubtful to ascertain in whose favour the vote has been cast.

(ii) The Presiding Officer shall be the final authority to decide on rejection of ballot papers.

(19)   (i) Soon after the counting of votes is over, the Presiding Officer shall prepare and certify a return setting forth

(a)      total number of ballot papers issued;

(b)      the number of valid votes given to each candidates; and

(c)      the number of ballot papers declared to be invalid or rejected.

(ii) On the basis of the return, the candidates who have secured the largest number of valid votes shall be declared elected at the general meeting and their names shall be immediately published on the Notice Board of the Society under the signature of the Presiding Officer, and in case of equality of votes polled by two or more candidates, lots shall be drawn in such manner as the Presiding Officer may fix, to determine the names of the successful candidate or candidates.

(20)   The Chairman, or any other officer of the society duly authorised by the board in the event of the Chairman failing to attend shall immediately take custody of the ballot papers and shall preserve them for six months from the date of the poll. The ballot papers and other records relating to the election shall immediately, in presence of the candidates or their authorised agents as may be available, be secured in a container which shall be affixed with the seal of the society and of candidates who desire to affix their seals, if any. They shall, unless otherwise directed by the Registrar, be destroyed after the said period of six months, if no dispute relating to, or in connection with that election is pending.

(21)   The results of the election shall be immediately recorded in the minute book of the society and attested by the Presiding Officer.

(22)   The Registrar may, in respect of any primary co-operative society coming within the purview of these rules, either on an application from the board of such society or from one-third of the total number of its members or of fifty members, whichever is less, or on his own motion after an enquiry into the affairs of the society under section 93 or an inspection under section 92, by an order in writing recording reasons therefor, appoint any person as an Election Officer to conduct the election if, in the opinion of the Registrar, such an action is necessary for the proper conduct of the election.

(23)   In any apex society or central society the Registrar may, by an order in writing, appoint any person as an Election Officer to conduct the election.

(24)   Where an Election Officer is so appointed under sub-rule (22) or sub-rule (23) all reference to Chairman, Presiding Officer or the board, as the case may be, occurring in this chapter shall be construed as reference to such Election Officer.

(25)   (i) The election of Chairman, Vice-Chairman and other office bearers of the board shall be conducted by the Presiding Officer or by the Election Officer, as the case may be, at a meeting to be, called by him within thirty days and in the manner as may be laid down in the by-laws of the society or in the manner as may be decided by the Presiding Officer or the Election Officer:

Provided that the Presiding Officer or the Election Officer, as the case may be, shall, before calling the meeting, ascertain from the appropriate authority whether such authority proposes to nominate any member of the board of the society, and if the Presiding Officer or the Election Officer does not receive any reply to his aforesaid enquiry, within fifteen days from the date of such enquiry, he shall proceed with the election as provided in the rules :

Provided further that not less than seven clear days, notice in writing shall be sent by registered post with acknowledgement due or by hand delivery under proper receipt to the members of the newly constituted board for such a meeting :

Provided also that where the by-laws of a co-operative society require that one of the members of the board nominated by the State Government shall be appointed Chairman of the society, the State Government shall appoint one of such nominated members the Chairman of such co-operative society.

(ii) As soon as the election is over, the result shall be immediately declared in the meeting, published in the Notice Board of the society and recorded in the minute book of the board under the attention of the Presiding Officer or the Election Officer, as the case may be.

Rule - 37. First board of directors.

(1)     Except where the first directors are named in the by-laws or in the application for registration of a society, the first directors including the Chairman and the Vice-Chairman shall be appointed by the Registrar.

(2)     The directors appointed under sub-rule (1) may not be members of the society.

(3)     The first board shall hold office till a new board is constituted under sub-rule (1) of rule 30:

Provided that any director appointed by the Registrar may be removed by him before expiry of the term of his office, if the Registrar is, for reasons to be recorded by him in writing, of the opinion that continuance in office of such director is not desirable in the interest of the society.

(4)     If a vacancy occurs in the office of an appointed director, the vacancy may be filled up by the Registrar by a member.

(5)     Where the first directors are named in the by-laws, or in the application for registration of a society, a casual vacancy occurring in the office of such director may be filled up by co-option by the remaining directors.

Rule - 38. Qualification for membership of a board.

(1)     No member of a co-operative society other than that of a students co-operative society shall be qualified to be elected or appointed as director unless he has attained the age of twenty-one years on the first date of filing nomination.

(2)     No member of a co-operative society shall be eligible to stand for election as a director unless he is a member of the society for a continuous period of twelve months before the first date of filing nomination.

Rule - 39. Nomination by a co-operative society to another co-operative society.

The board of a co-operative society may, in a meeting with specific agenda : nominate a member of such society as its representative to another co-operative society to which the first named society is affiliated and may also recall such representative by a similar resolution of the board with specific agenda:

Provided that (i) at the same meeting, where a resolution of such recall is made there may be a fresh nomination of another representative of such society with the agenda, (77) no one shall be nominated as representative of a society if he is individually a member of the other society, and (iii) in case of such recall and fresh nomination by an affiliated society in a single-member constituency, the freshly nominated representative shall automatically be a director of the other society.

Rule - 40. Cessation of membership of a board.

(1)     A director shall cease to hold office if he-

(a)      dies, or

(b)      resigns his office, or

(c)      is removed by the general meeting from directorship, or

(d)      loses membership of the society which he represents in the board or the society whose representative he is, loses membership of the other society, or

(e)      becomes subject to any disqualification which debars him from seeking election as a director, or

(f)       if he fails to attend six consecutive meetings of the board.

(2)     The cessation of directorship shall be deemed to occur at, and be effective from the time when the disability concerned, referred to in sub-rule (1) occurs.

Rule - 41. Removal and recall of a member of a board and an office-bearer.

(1)     (a) An elected member of a board may be removed from the office by a general meeting with due agendum.

(b) A nominated member in the board may be recalled by the authority nominating him.

Explanation. The word "nominated" shall include................directors coming within the ambit................ of sub-section (3) of section 27.

(2)     An office-bearer may be removed from office by a resolution of the board at a meeting specially convened for the purpose :

Provided that a resolution for removing the Chairman appointed by the State Government shall not be moved except with the prior approval of the State Government.

Rule - 42. Notice of board meeting.

Notice of a meeting of the board in respect of any society or class of societies shall be given in writing, subject to the provisions of sub-section (1) of section 32 by the Secretary, or any officer performing the duties of Secretary, to every director specifying the place, date and hour of the meeting together with a statement of the business to be transacted thereat, not less than seven days before the date of the meeting. In case of urgency, the Chairman may convene a meeting of the board with clear three days' notice. Where there is an officer deputed under section 28 or deputed to function as manager, such officer shall call all board meetings in, consultation with the Chairman :

Provided that any urgent business, hot included in the statement accompanying he notice, may be brought up and considered with the consent of two-thirds of the rectors present at the meeting.

Rule - 43. Meeting of board.

The board shall meet for the transaction of the business of the society at least once in every two months and unless the minutes are drawn up and duly signed by the Chairman immediately on the termination of the meeting, the minutes shall be drawn up and signed by the Chairman within seventy-two hours from the time when the meeting terminated.

Rule - 44. Voting at the meeting of board.

A proposal at a meeting of the board when passed by majority of votes shall be adopted and if the votes be equal, the matter shall be decided by the casting vote of the Chairman of the meeting.

Rule - 45. Chairman of meeting.

The Chairman shall preside over all meetings of the board at which he is present. In the absence of the Chairman, the Vice-Chairman shall take the chair and in absence of the Vice-Chairman, one of the directors in the panel, in order of their names in the panel, shall preside over the meeting.

Rule - 46. Quorum of meeting.

(1)     Unless a larger proportion is provided in the bylaws, the quorum at the meeting of the board shall be one-third of the total number of directors subsisting on the date of issue of the notice for the meeting.

(2)     No business shall be transacted at any meeting including an adjourned meeting of the board unless there is a quorum at the time when the business of the meeting is scheduled to commence within half-an-hour from the time appointed for the meeting.

Rule - 47. Requisition meeting.

(1)     One-third of the directors may requisition a special meeting of the board by giving seven clear days' notice.

(2)     The requisition shall specify the object of the meeting and shall be signed by the requisitionists and shall be delivered at the office of the society.

(3)     If the Secretary or any other person performing the duties of the Secretary does not convene the meeting within seven days from the date of receipt of the requisition, a notice of seven clear days signed by the requisitionists specifying the object and the date, time and place of the meeting shall be sent to all the directors and accordingly the meeting shall be held.

(4)     At such requisition meeting no business other than that specified in the requisition shall be transacted, and if there is no quorum within half-an hour from the time appointed, the meeting shall stand dissolved.

Rule - 48. Powers of the board.

The board of a co-operative society shall have full control over the administration and the business of the society and shall exercise all or any of the following powers as may be provided in the by-laws:-

(a)      to admit new members,

(b)      to fine, suspend, remove or expel members:

Provided that no such action shall be taken by the board without giving the member concerned an opportunity of being heard and the decision is taken by a resolution in the meeting passed by two-thirds of the members of the board present,

(c)      to raise funds,

(d)      to invest funds,

(e)      to allocate duties and define responsibilities of the employees :

Provided that in case of urgency, the Chief Executive Officer of the society may, in consultation with the Chairman, reallocate the duties of the employees and officers temporarily which shall be subject to confirmation by the board within a period of two months from the date of re-allocation.

(f)       to appoint, discharge or to dismiss or to remove employees of the society:

Provided that no employee of a co-operative society shall be dismissed or removed from service except after an inquiry in which he has been informed of the charges against him and given a reasonable opportunity of being heard in respect of those charges, and where it is proposed, after such inquiry, to dismiss or remove him, until he has been given a reasonable opportunity of making representation on the penalty proposed,

(g)      to allocate, the duties and define the responsibilities of the officers,

(h)     to determine the securities to be furnished by the officers and other employees,

(i)       to compound, abandon or suspend the enforcement of any debt or demand of the society with the prior permission of the Registrar,

(j)       to institute, defend or compromise legal proceedings,

(k)      to dispose of application for shares,

(l)       to dispose of applications for loans and to determine the security to be taken,

(m)    to appoint committees as may be deemed necessary from time to time and to confer powers and impose duties upon such committees, and

(n)     to issue, subject to directions given by the general meeting from time to time, shares against rebate as declared by the board.

Rule - 49. Duties of the board.

The board shall observe, in all their transactions the provisions of the Act, rules and by-laws and shall cause to perform the following duties, namely

(a)      to receive and disburse money;

(b)      to maintain true accounts of money received and expended, and accounts of the assets and liabilities;

(c)      to prepare for submission to the annual general meeting-

(i)       an annual report on the working of the society;

(ii)      an annual statement of accounts including a balance sheet;

(iii)     a statement of loans and defaults and appointments as required under clause (f) of sub-section (1) of section 25;

(d)      to prepare the statements of accounts required an audit and to place those along with relevant vouchers and other connected papers before the auditors;

(e)      to prepare and submit all statements and returns in prescribed forms and in such other forms as may be required by the Registrar;

(f)       to enter accounts of the society regularly in proper books;

(g)      to maintain register of members up-to-date;

(h)     to facilitate the inspection of books by those entitled to inspect them;

(i)       to watch that the loans and advances are utilised for the purposes for which those are meant and that those are duly repaid;

(j)       to take prompt action for realisation of loans and advances; and

(k)      to perform such other duties as may be entrusted by the general meeting.

Rule - 50. Powers and duties of the Chairman and the Vice-Chairman of the Society.

The Chairman, or in his absence, the Vice-Chairman, shall, for the transaction of the business of a society in cases of urgency, exercise all powers and perform all duties required to be exercised and performed under the Act, the rules or the by-laws by the board except the power of sanctioning loans, bonus or ex gratia payments. The Chairman or in his absence the Vice-Chairmen shall have the full control over the administration and business of the society and shall supervise the functions of the society on behalf of the board and shall have power to call for any record of the society or any report from Chief Executive Officer or the Secretary to satisfy himself that the affairs of the society are being managed in accordance with the resolutions of the board :

Provided that the Chairman or the Vice-Chairman, as the case may be, shall not act in contravention of any order given or decision taken by the board at its meeting.

Rule - 51. Orders of the Chairman and the Vice-Chairman to be placed before the meeting.

All orders passed and all acts done by the Chairman, or by the Vice-Chairman in the absence of the Chairman, in exercise of his powers and in the performance of his duties under rule 50 shall be placed for confirmation before the board in its next meeting.

Rule - 52. Designation and power of the Government officer on deputation.

(1)     Government Officer, when deputed to the service of a co-operative society under section 28, shall be called the Chief Executive Officer of the Society.

(2)     Subject to such conditions as the State Government may impose, the Chief Executive Officer shall in the conduct of the business of the society, exercise the following powers, namely-

(i)       have control over the employees of the society, to sanction leave, to impose any punishment upon or to suspend them :

Provided that no punishment or suspension shall be imposed without the approval of the board;

(ii)      institute, defend and conduct legal proceedings and enter into compromise or arbitration with creditors and debtors of the society.

Rule - 53. Duties of the Chief Executive Officer.

The Chief Executive Officer shall perform or cause to be performed the following duties, namely

(i)       (a) receive all moneys on behalf of the society and issue receipts, other than receipts likely to create fresh obligations on the part of the society in effectual discharge of the moneys stated to have been received therein;

(b) to operate bank accounts subject to such conditions as may be laid down in by-laws or in absence thereof as the board may direct;

(c) draw, accept, make, endorse or negotiate all bills of exchange, promissory notes, debentures, securities and other documents standing in the name of, or held by the society;

(ii)      pay all costs of management and working expenses out of the fund of the society;

(iii)     deposit all receipts including securities and other effects received on behalf of the society;

(iv)    maintain proper and accurate records and accounts of the society;

(v)      proper custody of stock and maintenance of stock accounts;

(vi)    call general meetings of the society and meetings of the board where there is no Secretary;

(vii)   ordinary remain present in all meetings of the board including meetings of the committees and shall produce all relevant papers required at such meetings and sign, along with the Chairman, the minutes of such meetings; and

(viii)  place, from time to time, before the Chairman, or such other authority as the board may direct, statement of receipts and disbursements for inspection, examination or approval as the case may be:

Provided that the current routine duties of the Chief Executive Officer shall, in his absence, be performed by the Officer next below him.

Rule - 54. Administrator.

(1)     Where more than one administrators are appointed under section 30, the administrators so appointed shall be called the board of administrators and if the Registrar or the State Government does not specify as to who shall be the Chairman of the Board, the administrators shall elect one from themselves to be the Chairman of the board.

(2)     The Chairman of the board of administrators shall preside over the meetings of the administrators.

(3)     Decisions of the meetings of the board of administrators shall be arrived at on the basis of majority votes and if the votes be equal, the Chairman shall have a second or casting vote.

Rule - 55. Procedure in case of difference of opinion.

In case of any difference of opinion between the board and the Chief Executive Officer on any matter concerning the affairs of the society, the Chief Executive Officer may record his views in the minute book and may refer the matter to the Registrar, but the decision of the board shall be final and binding upon him.

Rule - 56. Indemnification of the Chief Executive Officer.

(1)     The Chief Executive Officer shall be indemnified out of the funds of the society for all costs, charges, travelling and other expenses incurred by him in the conduct of the society's business or in the discharge of his duties.

(2)     The society shall make such contribution towards the costs of deputation of the officer as the State Government may direct.

Rule - 57. Chief Administrative Officer of apex society or central society.

(1)     The board of an apex society shall appoint the managing director or the secretary of such society as its Chief Administrative Officer, and the board of a central co-operative bank or a co-operative land development bank shall appoint the manager of such bank as its Chief Administrative Officer :

Provided that for the apex societies dealing with agricultural credit or agricultural marketing the Chief Administrative Officer shall always be designated as Managing Director.

(2)     The Chief Administrative Officer referred to in sub-rule (1) shall, subject to the control of the Board, have power-

(a)      to institute or defend legal proceedings;

(b)      to enter into compromise or refer any dispute to arbitration;

(c)      (i) to operate bank account;

(ii) to buy, sell, pledge, endorse or transfer promissory notes, securities standing in the name of, or held by, such society subject to the approval of the board; and

(iii) to accept payments and issue receipts therefor;

(d)      to delegate any of his powers to any officer of such society with the approval of the board or, in case of emergency, of the Chairman;

(e)      where there is no elected Secretary, to call general meetings of such society and the meetings of the board, and to attend such meetings without any power to vote;

(f)       to exercise supervision and control over the employees of the society and sanctioning leave to them;

(g)      to transfer and to allocate duties of the employees with approval of the Chairman;

(h)     to place, subject to the approval of the board, an employee under suspension, where the disciplinary proceedings or departmental Inquiry against him in respect of any criminal offence is contemplated or pending or where a case against him in respect of any criminal offence is under investigation or trial;

(i)       to impose upon an employee of the society the following punishments, namely

(i)       fine,

(ii)      censure,

(iii)     withholding of increments or promotions,

(iv)    recovery from pay of the whole or part of any pecuniary loss caused to such society by negligence or breach of orders,

(v)      reduction to a lower stage in the time scale of pay for a specified period with further direction as to whether or not the employee will earn increments of pay during the period of such reduction,

(vi)    reduction to a lower time scale of pay grade, post or service :

Provided that no such punishment shall be imposed on any employee except after an enquiry in which he has been informed of the charges against him and given a reasonable opportunity of being heard in respect of those charges, and where it is proposed, after such inquiry to impose on him any such penalty, until he has been given a reasonable opportunity of making representation on the penalty proposed.

(3)     The Chief Administrative Officer referred to in sub-rule (1) shall exercise such other powers which the board of such society may, from time to time, confer on him.

(4)     The powers conferred and the duties imposed on the Chief Administrative Officer under sub-rule (2) or sub-rule (3) may be conferred and imposed by the board upon any other officer of such society.

(a)      during the period of absence of the Chief Administrative Officer from duty, and

(b)      with the prior approval of the Registrar, during any other period.

(5)     When a Government Officer is deputed, under section 28, to the service of an apex society or a central society, the manager or any officer of such society during the period of deputation such Government servant, shall, notwithstanding anything contained in sub-rule (2), sub-rule (3), sub-rule (4), exercise any power or perform any duty which may be exercised or performed by such Government officer under these rules.

Rule - 58. Conditions of deputation under section 28.

The following shall be the conditions of deputation of a Government Officer to the service of a co-operative society

(i)       A Government Officer shall ordinarily be deputed to the service of a co-operative society for a period not exceeding two years, such period may be so extended by the State Government or by the Registrar, as may be considered expedient:

Provided that the total period of deputation shall not exceed four years.

(ii)      They shall be governed by the rules of deputation as the State Government may make from time to time.

(iii)     A Government Officer deputed by the State Government or the Registrar to the service of the society may be withdrawn from such service by the State Government or the Registrar, as the case may be, on three months' notice to the society by the State Government or the Registrar, as the case may be, or on a request, made by the society to the State Government or the Registrar, as the case may be, to withdraw such officers.

(iv)    Unless the State Government otherwise directs, the salary of a deputationist shall be reimbursed to the State Government by the Society concerned.

Rule - 59. Limit of emoluments, allowances or honorarium.

(1)     Allowances and fees to a director as admissible under sub-section (11) of section 27 shall not exceed the rates specified below:

(i)       A director of a society travelling by rail, steamer or bus is entitled to get one and a half times the actual fare for travel by first class. In case of travel by Rajdhani Express, one and a half times the fare for air-conditioned chair-car accommodation may be paid:

Provided that the Chairman or the Vice-Chairman of an apex society shall be entitled to travel by air between two places connected by air and shall be entitled to claim air fare recording on the body of the bill the number of the air ticket.

Explanation. The word 'bus' shall include a mini bus, land rover or any other public vehicle of like nature available on hire.

(ii)      In addition to the travelling allowance admissible under clause (i) for journey between residence or office to the airport or railway, bus or steamer station and vice versa, a director shall be entitled to get actual amount spent for journey by type of hired vehicle.

(iii)     A director travelling by his own vehicle shall get at the rate of rupee one per kilometre for actual journey undertaken.

(2)     For attending meetings of the board, a director shall receive sitting fee per day at the rate specified in the table below:

Table

(3)     When the general meeting of a co-operative society has approved payment of daily allowance to directors undertaking tours in the interest of the society, such daily allowance shall not exceed the rates specified in the table below:

Table

(4)     No director shall be entitled to receive any hotel charge.

(5)     Honorarium approved by the general body under sub-section (11) of section 27 shall not exceed rupees one hundred in case of an apex or a central society and rupees fifty for any other society for onerous work done in accordance with the resolution of the board.

(6)     A director of a society going abroad for the purpose of the society and in accordance with the resolution of the board shall be entitled to such allowance or reimbursement of expenses as the board may decide with prior approval of the Registrar.

Rule - 60. Duties of the State nominee.

The following shall be duties of the nominees of the State Government nominated under section 33,

(a)      to attend meeting of the board:

(b)      to watch that Government policies are implemented;

(c)      to register their votes of dissent in all matters in which, according to their best judgement, the resolution sought to be carried in the board meetings are not in the interests of the society or of the co-operative movement or are likely to be pre-judicial to the interests of the society or of the co-operative movement;

(d)      to keep the Registrar and the Government apprised of such resolution; if adopted by majority votes; and

(e)      to register their notes of dissent when the meeting of the board seeks to pass a resolution contravening any express order of the State Government or of the Registrar or any provisions of the Act or the rules or the by-laws of the society.

Rule - 61. Meaning of "relative".

For the purpose clause (f) of sub-section (1) of section 25 the word "relative" shall mean the following :

Father, mother, brother, sister, wife, son, daughter, father-in-law, mother-in-law, brother-in-law, sister-in-law, nephew, niece, maternal uncle, paternal uncle, son's wife, grandson and grand daughter.

CHAPTER V ELECTION AUTHORITY, CADRE OF SERVICES AND CO-OPERATIVE SERVICE COMMISSION

Rule - 62. Function of co-operative Election Authority.

(1)     The Co-operative Election Authority shall maintain all necessary records appertaining to holding of annual general meetings by the co-operative societies mentioned in the Fifth Schedule to the Act and shall see that the annual general meetings of such societies in which the election of directors have to be held, are held timely in accordance with section 35.

(2)     The boards of co-operative societies mentioned in the Fifth Schedule shall assist the Co-operative Election Authority and shall furnish the said Authority with such papers as the Authority may from time to time require.

(3)     The Co-operative Election Authority shall, for the superintendence, direction and control of the election of the co-operative societies mentioned in the Fifth Schedule, have power to visit or inspect any such co-operative society at any time, to collect or procure from such society such information or factual data as it may require, give necessary directive or counsel to such society which the society shall comply with or act upon and send a nominee to remain present as an observer in any meeting where election of directors or of office bearers is scheduled to be held.

(4)     Where an observer is sent by the Co-operative Election Authority to a meeting In terms of sub-rule (3), the society concerned shall allow the observer to remain present in the meeting and shall provide him with such information or such papers he may require. The observer shall submit to the Co-operative Election Authority a comprehensive report on the meeting and the holding of election highlighting irregularities, if any, noticed by him.

(5)     The State Government shall appoint staff on deputation to assist the Co-operative Election Authority in discharging its functions and such staff shall receive such deputation allowance or special pay as the State Government may decide in accordance with the relevant rules.

(6)     The State Government shall have power to issue directives from time to time to the Co-operative Election Authority to ensure proper functioning of such authority in the interest of the co-operative movement in the State and such directive shall be binding upon such Authority.

Rule - 63. Election of directors.

The election of directors on the board of a Co-operative society shall be in accordance with the provisions contained in Chapter IV.

Rule - 64. Constitution of cadres of managers, assistant managers or other employees for all co-operative societies or class of co-operative societies.

The State Government, may, by notification, constitute cadres of managers, assistant managers or other employees for all co-operative societies or class of co-operative societies:

Provided that the State Government shall specify in such notification inter allia, the following, namely

(a)      the mode of management of the cadres;

(b)      the mode of constitution of cadre authorities;

(c)      powers and functions of the cadre authorities;

(d)      mode of determination of the scales of pay and other allowances of the members of a cadre;

(e)      creation of funds for the cadres;

(f)       utilisation of the funds by the cadre authorities;

(g)      mode of election of members of the cadre authorities; and (h) inspection and audit of the offices of the cadre authorities.

Rule - 65. Constitution of a cadre of managers of primary agricultural co-operative credit societies and a cadre authority.

(1)     The State Government may, by notification, constitute a cadre consisting of managers of all primary agricultural co-operative credit societies, including those ceded to commercial banks, operating within the territorial jurisdiction of each central co-operative bank or unit of the West Bengal State Co-operative Bank (hereinafter referred to as the cadre).

(2)     With effect from the date of such notification, all managers who possess such qualifications and experience as may be fixed by the State Government shall stand included in the cadre.

(3)     For management of the cadre, the State Government may, by notification constitute a Cadre Authority at the level of the Central Co-operative Bank or unit of the West Bengal State Co-operative Bank.

(4)     (a) The Cadre Authority shall be composed of nine members, including the Chairman of the concerned bank, who shall be the ex officio Chairman of the Cadre Authority. Out of the remaining eight numbers, one-fourth shall be nominated by the Registrar and three-fourths shall be elected by the primary agricultural co-operative credit societies, including those ceded to commercial banks, operating within the territorial jurisdiction of the respective central co-operative bank or unit of the West Bengal State Co-operative Bank:

Provided that in the case of dissolution of the board of the concerned bank, the administrator appointed under sub-sections (1) and (2) of section 30 (or, if there are more than one such administrator, such of the administrators as the Registrar or the State Government, as the case may be, may select) or the Special Officer appointed under clause (c) of section 31, as the case may be, shall be the ex officio Chairman of the Cadre Authority :

Provided further that if by reason of any order of a court or for any other reason the Chairman of the concerned bank is temporarily unable to exercise any of the powers conferred by or under the Act or these rules, the members of the Cadre Authority shall elect one (other than the Chairman of the concerned bank) from amongst themselves to act as the Chairman of the Cadre Authority during the period of such temporary inability.

(b) The Chief Executive Officer of the concerned bank or, in his absence, the managers of the concerned bank shall be Secretary of the Cadre Authority.

(5)     The Cadre Authority shall hold office for five years at the end of which it shall be reconstituted.

(6)     Notwithstanding anything contained in sub-rules (4) and (5), the members of the first Cadre Authority shall be nominated by the Registrar for a term not exceeding three years within which period the Cadre Authority shall be reconstituted in terms of sub-rule (4).

(7)     The following shall be the powers and functions of the Cadre Authority-

(i)       the Cadre Authority shall be the appointing and disciplinary authority of all members of the cadre and shall have full powers to transfer the members of the cadre from one co-operative society to another within its jurisdiction;

(ii)      recruit the members of the cadre in such manner as may be notified by the State Government from time to time and arrange for their training;

(iii)     deal with all matters appertaining to the service of its members, maintain proper records therefor and determine the conditions of service of its members with the prior approval of the Registrar;

(iv)    control and supervise the functions of the members of the cadre;

(v)      determine the procedure for the conduct of its business;

(vi)    delegate such of its powers and functions to one or more of its members as it may consider necessary.

(8)     The Registrar shall determine the scales of pay and other allowances of the members of the cadre under different Cadre Authorities and revise them from time to time.

(9)     (i) There shall be a fund at the disposal of the Cadre Authority and, for this purpose, it shall open a bank account.

(ii) The bank account shall be operated jointly by the Chairman and the Secretary of the Cadre Authority and in the absence of either of them, by another member jointly with the other as may be decided by the Cadre Authority.

(iii) The Fund shall be created and augmented out of contributions from the co-operative institutions, the State Government and such other agencies as may be notified by the State Government and also receipts from other sources.

(iv) The Cadre Authority shall utilise the fund for any purpose consistent with its responsibility including the following :

(a)      to pay salary and other allowances of the members of the cadre;

(b)      to meet its establishment cost including cost of meetings; and payment of salary and allowances to its own staff.

(10)   The office of the Cadre Authority shall situate in the premises of the office of the respective central co-operative bank or unit of the West Bengal State Co-operative Bank or as nearby as possible.

(11)   Notwithstanding anything contained in these rules, the State Government shall have the power to issue directives from time to time for constitution of Cadre Authority and to ensure its proper functioning in the interest of co-operative movement in the State.

(12)   Except as otherwise provided in this rule :

(i)       All communications from the Cadre Authority to the Government shall be routed through the Registrar,

(ii)      All orders of the Cadre Authority shall be communicated under the signature of the Secretary of the Cadre Authority,

(iii)     In the matter of election of the members of the Cadre Authority, the following procedure shall be observed :

(a)      each of the primary agricultural co-operative credit societies in a block shall select at a meeting of its board one representative and shall communicate his name forthwith to the Secretary of the Cadre Authority. Such representatives shall constitute on electoral college to take part in the election of six members of the Cadre Authority within the territorial jurisdiction of each central co-operative bank or unit of the West Bengal State Co-operative Bank and the election of such delegates of the members of the Cadre Authority shall be arranged by the Secretary of the Cadre Authority and all relevant records shall be maintained by him;

(b)      the election of members of the Cadre Authority shall be completed at least fifteen days before expiry of the term of the existing Cadre Authority;

(c)      Any casual vacancy in the elected membership of the Cadre Authority shall be filled up by the Cadre Authority by co-option from among the delegates and such member shall hold office for the remaining part of the term of the members in whose place he is co-opted;

(d)      The Secretary of the Cadre Authority or, in his absence, any officer of the Cadre Authority authorised by the Secretary shall

(i)       ask for names of representatives of all the primary credit societies within the territorial jurisdiction of the Cadre Authority sufficiently in advance of convening the meeting for the purpose of election of the delegates of each block;

(ii)      for election of delegates, send at least twenty days ore the date of the meeting notice thereof to the representatives of the primary agricultural co-operative credit societies;

(iii)     for election of the members of the Cadre Authority send at least twenty days before election notice to the delegates of the Cadre Authority.

(e)      A member of a primary agricultural co-operative credit society having overdue loan with the said society on the date of notice of the meeting of the board for selection of the representative of the said society shall not be qualified for such selection.

(iv)    The members of the Cadre Authority nominated by the Registrar shall cease to hold office on the expiry of the period of five years referred to in rule (5).

(v)      (a) The meeting of the Cadre Authority shall be convened by its Secretary at least once in every two months and notice thereof shall be issued at least seven days before the date of such meeting.

(b) The minutes of such meeting shall be recorded and signed by the Chairman and the Secretary of the Cadre Authority within seventy hours from the time of completion of the meeting.

(c) In the event of the absence of the Chairman, the members present shall elect a Chairman from amongst themselves for presiding over the meeting.

(d) Three members shall constitute a quorum.

(e) All decisions of a meeting shall be carried by majority votes. In the case of equality of votes the matter shall be decided by lot.

(vi)    The Secretary of the Cadre Authority shall be responsible for the maintenance of its records.

(vii)   The funds of each Cadre Authority shall be created and augmented in the following manner among others :

(a)      Every primary agricultural co-operative credit society affiliated to a central co-operative bank or unit of the West Bengal State Co-operative Bank or adopted by a commercial bank and having a manager shall contribute to the fund of the respective Cadre Authority at the rate of one per centum of total annual short-term advances received from the said banks and the amount shall be realised by the concerned financing bank within fifteen days from the date of issue of such loan and credited to the fund of the concerned Cadre Authority.

Explanation. The expression "commercial bank" shall include a 'Gramin Bank'.

(b)      The concerned central co-operative bank, unit of the West Bengal State Co-operative Bank and commercial bank shall each contribute an amount equivalent to one half per centum of the total annual advances made by them to the concerned primary agricultural co-operative credit societies to the fund of the respective Cadre Authority. The commercial banks shall send their remittances to the Cadre Authority on quarterly basis.

(c)      The Cadre Authority shall take action for realising contributions towards its fund from the State and Central Governments as also other agencies, if any

(d)      All amounts received shall be credited to the Fund and all payments shall be made out of such Fund.

(viii)  The Cadre Authority shall submit periodical reports and returns to the Registrar in such form as may be specified by the Registrar.

(ix)    The constitution, working and financial condition of the Cadre Authority shall be open to inspection by the Registrar or by an officer authorised by him.

Rule - 66. Co-operative Service Commission.

(1)     The person appointed under sub-section (1) of section 38 shall be the Chairman of the Co-operative Service Commission (hereinafter referred to as Commission).

(2)     There shall be paid to the Chairman of the Commission, in respect of time spent on actual service, salary and allowances, last drawn by him where he is a retired officer and his usual salary and allowances where he is a serving officer:

Provided that if the person appointed as Chairman of the Commission is in receipt of pension (other than disability or wound pension), his salary shall be reduced by the amount of that pension and if he has, before such appointment received any sum in lieu of a portion of the pension, his salary shall be reduced by the amount of that portion of the pension, and the pension equivalent to gratuity,

(3)     The Commission shall have the following staff

(a)      One Secretary,

(b)      One Deputy Secretary,

(c)      One Assistant Secretary,

(d)      One Head Assistant,

(e)      Three Stenographers,

(f)       Three typists,

(g)      Two Upper Division Assistants,

(h)     Two Lower Division Assistants,

(i)       Two peons,

(j)       Four Orderly peons :

Provided that the State Government shall have the power to increase or decrease the number of the officers and other employees of the Commission rat any time in consultation with the Chairman of the of the Commission.

(4)     The salaries and allowances of the officers and other employees of the Commission shall be such as the officers and employees and the Public Service Commission, West Bengal, are entitled to.

(5)     (a) The Chairman of the Commission, may by writing under his hand addressed to the Secretary to the Government of West Bengal, Department of Cooperation, resign his office, and

(b) The Chairman of the Commission may be removed by the State Government in the manner provided for removal of the Chairman of the Public Service Commission, West Bengal.

(6)     The Commission shall select persons as per sub-section (5) of section 38 for filling up posts bearing basic salary of two hundred rupees and above, other than of Group D category.

CHAPTER VI DUTIES AND OBLIGATIONS OF CO-OPERATIVE SOCIETIES

Rule - 67. Address of co-operative society.

(1)     Every co-operative society shall mention in the by- laws its address indicating place of business, post office, police station and district which shall be taken to be the registered address of the society.

(2)     A change of such address may be made by a resolution of the board and such change shall be reported in Form XI to

(i)       the Registrar;

(ii)      the society to which the society is affiliated;

(iii)     financing bank, if any; and

(iv)    the Reserve Bank of India, by a society having banking business.

Rule - 68. Books and documents to be kept open for inspection by members.

(1)     Under section 40, every co-operative society shall keep open for inspection by its members the following books and documents, namely:

(i)       a copy of the Act;

(ii)      a copy of the rules;

(iii)     a copy of the by-laws;

(iv)    register of members and their nominees;

(v)      register of affiliated societies, if any;

(vi)    register of directors;

(vii)   share ledger;

(viii)  ledger of deposits and other borrowings, if any;

(ix)    cash book;

(x)      loan ledger, if any;

(xi)    register containing property and debt statements of member, if any;

(xii)   general ledger, if any;

(xiii)  registers showing sales and purchases of goods, if any;

(xiv)  minute books in respect of general meeting and board meetings',

(xv)   latest audited balance sheet.

(2)     Certified copies of the books and documents mentioned in sub-rule (1) shall be supplied to members on payment of fee at the rate of two rupees for each foolscap page typed in double spaces.

Rule - 69. Minimum paid staff to be employed by a co-operative society, their respective essential qualifications and procedure of their employment and the conditions of their service.

(1)     Every co-operative society shall from time to time determine and create at a meeting of the board the minimum number of paid staff required for its business and preferably place them in convenient groups according to salary on the pattern laid down in the appendix to this chapter and may fill up the post in the manner consistent with sub-section (1) of section 42 and subsection (5) of section 38 :

Provided that in case of the societies which have obtained Government assistance in the form of share capital participation, loans, Government guarantee, etc., no post having a scale of pay of Rs. 2,000 or above shall be created without the prior concurrence of the State Government.

(2)     The pest shall be filled up in the following manner:

(a)      the superior posts in the establishment of the co-operative society as may be decided by the board, shall be filled up firstly by institutional candidates, secondly by direct recruitment and thereafter by the Government officers;

(b)      not more than twenty-five per cent of the sanctioned posts in the establishment of an apex or central society shall be filled up by promotion of fit and suitable employees of the societies affiliated to it;

(c)      after excluding the posts mentioned in clauses (a) and (b), 50 per cent of the remaining posts in Groups A and B and 10 per cent of the remaining posts in Group C may by filled up by promotion of eligible and suitable employees of the society in lower ranks;

(d)      the remaining posts in Groups A, B and C may be filled up by direct recruitment subject to sub-rule (b) of rule 68 :

Provided that every society, shall subject to availability of vacancy, offer appointment on compassionate ground depending on qualifications, ordinarily to wife, son or a daughter of its whole time employee who dies in harness or who is disabled permanently or otherwise incapacitated to continue in service when the dependence of such deceased or disabled or incapacitated employee, have no other means of sustenance;

(e)      Group D employees of a society shall be recruited by the concerned society in accordance with the procedure laid down by the State Government subject to sub-rule (6) of rule 66 and the proviso to clause (d).

(3)     The conditions of service of the employees of co-operative societies shall be as laid down in the appendix to this Chapter:

Provided that besides the condition laid down in the appendix to this Chapter, the board may formulate other conditions of service preferably through a bipartite agreement.

Rule - 70. Books and registers.

Every co-operative society shall maintain such books and registers as may be necessary for proper conduct of its business and shall, in particular, maintain corrected up-to-date the following books and registers :-

(i)       minute books recording the proceedings of the general meetings and the meetings of the board;

(ii)      register of members and their nominees in Form XII;

(iii)     register of affiliated societies, if any, in Form XIII;

(iv)    register of directors in Form XIV;

(v)      share ledger;

(vi)    ledger of deposits and other borrowings, if any;

(vii)   cash book showing the balance at the end of each day;

(viii)  receipt book containing forms for issue of receipts in carbon process;

(ix)    voucher file containing all vouchers for contingent and other expenditure incurred by the society;

(x)      loan ledger, showing disbursement of each loan issued to members, the amount of loan, the purpose for which it is granted and the date or dates of repayment, distinguishing principal and interest;

(xi)    in the case of a society with unlimited liability register containing property and debt statements of members showing the assets and liabilities of each individual member on the date of his admission with full particulars of property to identify it (to be revised in every three years);

(xii)   in case of a society with working capital exceeding one lakh of rupees, general ledger showing receipts disbursements and the outstandings under various heads from day to day;

(xiii)  stock books and registers showing sales and purchases of goods by the society, where applicable;

(xiv)  such other books and registers, and in such form, as the Registrar may direct.

Rule - 71. Affiliation of societies with the West Bengal State Co-operative Union or the District Co-operative Unions.

(1)     All apex societies, central co-operative banks, urban co-operative banks, district co-operative unions and co-operative societies having the area of operation extending over more than one district; employees' co-operative credit societies having working capital of above Rs. 5 lakhs and all co-operative societies coming under the purview of the Multi-State Co-operative Societies Act, 1984 (51 of 1984) shall be members of the State Co-operative Union on payment of the affiliation fee specified in column (2) of Table A below. Such membership shall be renewed annually on payment of a renewal fees at the rate specified in column (3) of that Table before the expiry of every co-operative year.

(2)     All other co-operative societies shall be the member of the concerned district co-operative unions on payment of the affiliation fees specified in column (2) of Table below. Such membership shall be renewed annually on payment of renewal fees at the rate specified in column (3) of that Table before the expiry of every co-operative year.

(3)     Non-compliance of the provisions of sub-rule (1) by any co-operative society mentioned in that sub-rule shall make it liable to a penalty of rupees-three hundred for the first default and a further penalty of rupees five hundred for every subsequent default.

(4)     Non-compliance of the provisions of sub-rule (2) by any co-operative society mentioned in that sub-rule shall make it liable to a penalty of rupees one hundred and a further penalty of rupees two hundred for every subsequent default.

TABLE A

Fee to be paid for membership of the State Co-operative Union

TABLE B

Fee to be paid for membership of the District Co-operative Union

Rule - 72. Annual Return.

Every co-operative society shall send to the Registrar such statements and returns and in such form as he may from time to time direct, and shall send, within four months from the expiry of a co-operative year or within such time as the Registrar may direct, an annual return in Form XV.

Rule - 73. Additional Returns.

(1)     In addition to the annual returns prescribed in rule 72, the apex societies, the central co-operative banks and such other societies shall, if the Registrar so directs, furnish a quarterly return in Form XVI showing their working and transactions and such other returns as the Registrar may from time to time require.

(2)     The returns and statements required by sub-rule (1) shall be furnished within three months from the expiry of the period to which they relate or within such further time as may be allowed by the Registrar.

Rule - 74. Persons who will maintain accounts, books, etc.

The board shall specify which of the officers and employees of a society shall

(a)      keep books of accounts;

(b)      keep other books and registers; and

(c)      prepare returns and statements:

Provided that a person in charge of accounts shall not be In charge of cash.

Rule - 75. Custody of accounts, books and records.

(1)     The books and records of a society shall be kept in the custody of the Secretary or any other person exercising the powers or performing the duties of the Secretary.

(2)     No member or employee of a society shall prevent the Secretary or any other person exercising the powers or performing the duties of the Secretary from having custody of the books and records of the society.

(3)     Any member or employee of a society who commits a breach of sub-rule (2) shall, on conviction by a Court, be punishable with fine which may extend to fifty rupees and, where the breach is a continuing one, with further fine which may extend to ten rupees for every day during which the breach continues.

(4)     Any person who fails or refuses to produce the books and registers when required by the Registrar or any person authorised by him in this behalf shall be punishable with a fine of five hundred rupees and thereafter with a further fine of fifty rupees for every day during which the failure or refusal continues.

Rule - 76. Preservation and destruction of books, records, etc.

The books and records of a society shall be preserved for such period as is set forth in the Second Schedule unless otherwise directed by the Registrar.

Rule - 77. Preparation of statements, etc., at the cost of society and recovery of such cost.

(1)     If a co-operative society fails to send to the Registrar within the time allowed any statement or return required by the Act or the rules the Registrar may cause such statement or return to be prepared by employing such persons as he may deem necessary and may assess upon the society the cost thereof.

(2)     The cost assessed under sub-rule (1) shall be recoverable from the society by the Collector as a public demand up to requisition by the Registrar, and the society may recover such cost from the person or persons responsible for the neglect.

Rule - 78. Publication of balance sheet.

(1)     Every co-operative society shall publish its audited balance sheet within one month from the date on which it is adopted by the general meeting by displaying it in any conspicuous place in the registered office of the society and in every branch office where the business of the society is carried on.

(2)     The board of a society shall in every co-operative year lay before a general meeting of the society a cash account of the last preceding quarter.

Rule - 79. Borrowings.

(1)     The maximum amount which a society may borrow shall be determined annually at a general meeting of the society and no society shall borrow beyond the maximum amount so determined :

Provided that the Registrar may at any time revise the limit fixed by the general meeting.

(2)     Save as is provided in rule 80, no society shall incur liabilities from persons who are not members in excess of a maximum fixed from time to time in general meeting and approved by the Registrar.

Rule - 80. Restriction on borrowings of primary agricultural credit society.

A primary agricultural credit society, which is a member of a central bank, shall not borrow by way of loans or deposits from any non-member without the sanction of the central bank, and where the society is not a member of any central bank, without the sanction of the Registrar.

Rule - 81. Restriction on borrowings of limited liability society.

No society with limited liability shall, by accepting deposits or loans or in any other way, incur liabilities exceeding 25 times the sum of the paid up share capital and the reserve fund for the time being separately invested outside the business of the society:

Provided that

(a)      the central co-operative land development bank, or the State Co-operative Bank or a Central Co-operative Bank for the purpose of financing land development banks, or a land development bank for the purpose of financing its members, may incur liabilities to the extent of thirty times the value of paid up share capital and the reserve fund for the time being separately invested;

(b)      with the permission of the Registrar and under such conditions as he may impose, an agricultural society or a financing bank may incur liabilities for the purpose of advancing loans to members for production of crops and for financing the disposal of product, repayable within a period of fifteen months, irrespective of the amount of its paid-up share capital or reserve fund separately invested outside the business;

(c)      with the permission of the Registrar and under such conditions as he may impose, the central co-operative land development bank or the State Co-operative Bank or a Central Co-operative Bank, or a central or a primary society may incur liabilities irrespective of the amount of its paid-up share capital and reserve fund separately invested outside the business, for the purpose of providing loans to its members for production, marketing and processing of any agricultural or industrial commodity;

(d)      with the permission of the Registrar and under such conditions as he may impose, a co-operative society may incur liabilities by way of loan or deposits from another co-operative society, repayable within a period of fifteen months irrespective of the amount of its paid-up share capital and reserve fund separately invested, if such liabilities are incurred on pledge or hypothecation of marketable security or goods or both and the amount of such liabilities does not exceed eighty per cent of the market value of such security or goods or both, offered for pledge or hypothecation;

(e)      only in such districts or part thereof where agencies have been set up for development of agriculture persons dependent thereon, with the permission of the Registrar on such conditions as he may impose, a co-operative society may, for the purpose of financing its members, incur liabilities to the extent of thirty times the sum of the paid-up share capital and the reserve fund, for the time being separately invested outside the business of the society;

(f)       with the permission of the Registrar and under such conditions as he may impose, a co-operative society composed solely of displaced persons and recommended by the Department of Government dealing with the displaced persons may in our liabilities irrespective of its paid-up share capital and reserve fund separately invested.

Rule - 82. Fluid resources or liquid cover.

(1)     A credit society other than the co-operative banks coming within the purview of the Banking Regulation Act, 1949 (10 of 1949) shall, if so required by the Registrar, keep a minimum liquid cover against deposits held by it according to the following scale:

(i)       forty per cent of deposits at call or on current account and cash credits and overdrafts sanctioned but not drawn,

(ii)      twenty-five per cent of the savings deposits,'

(iii)     twenty-five per cent of the fixed deposits maturing within the next three months, and

(iv)    twelve and a half per cent of fixed deposits maturing after next three months but within the next six months :

Provided that subject to the provisions of the Banking Regulation Act, 1949 (10 of 1949) when the reserve fund of a society is invested in a co-operative bank and cannot be drawn except with the permission of the Registrar, no fluid resources need be maintained by the bank concerned against such investment.

Explanation. (1) "Liquid cover" means any asset which can be converted into ready cash at once and which are maintained in one or more of the following forms:

(i)       cash in hand, or with such banks as the Registrar may approve,

(ii)      post office savings bank account,

(iii)     Government securities including Post Office Cash Certificate or National Savings Certificate or National Plan Certificate, and

(iv)    other investments as may be approved by the Registrar.

(2)     The extent to which the assets in the above forms shall be utilised for the purpose of calculation of fluid resources shall be as follows :

(i)       ninety per cent of the market value of Government securities including Postal Cash Certificate or National Savings Certificate or National Plan Certificate,

(ii)      cent per cent of cash in hand, balance with banks and Post Office Savings Bank,

(iii)     eighty per cent of the market value of the debentures of land development banks and also of other trustee securities such as principal of loans; and

(iv)    eighty per cent of the fixed deposits with other banks approved by the Registrar.

(3)     Under special circumstances the board may, with the approval of the Registrar, decrease the proportion of the liquid cover as mentioned in sub-rule (1).

Rule - 83. Issue of debentures.

(1)     A co-operative society may receive loans by issue or re-issue of debentures of one or more denominations repayable within twenty-five years.

(2)     The issue or re-issue of debentures shall be subject to the following conditions:

(a)      that such debentures are secured by mortgages held by the society and assigned to the trustee or secured by Gehan under section 53, and

(b)      that the total amount payable in respect of the debentures does not exceed three-fourths of the total value of the mortgages held by the society and assigned to the trustee.

Rule - 84. Financial assistance by the State Government.

(1)     The State Government may grant loans to, take share in, or give any other financial assistance to, any co-operative society which makes an application in this behalf, for any of the following purposes, namely:

(a)      facilitating the production of commodities or disposal thereof by the members,

(b)      conducting and developing agriculture or industry undertaken by a society,

(c)      redemption of prior debts of members, purchase and improvement of lands by members, or construction of any project for providing irrigation facilities for the benefit of the members,

(d)      construction of dwelling-house by the society or by its members,

(e)      repayment of money previously borrowed by a society in accordance with its by-laws,

(f)       maintenance of staff for efficient management of the society,

(g)      recouping any loss in part or in whole sustained due to circumstances over which the society had no control, or

(h)     any other purpose as the State Government may deem proper.

(2)     The financial assistance granted to a co-operative society under sub-rule (1) shall be subject to such terms and conditions as the State Government may determine.

Rule - 85. Application for loan.

(1)     An application for loan shall be in such form as may be required by the board and shall state the purpose for which the loan is required.

(2)     A member of a primary society applying for loan shall furnish a full statement of his

(i)       property and debts;

(ii)      annual income and in case of medium-term loan, expected annual income from the proposed outlay on development;

(iii)     annual expenditure including instalment of principal incurred and proposed to be incurred; and

(iv)    surplus available for repayment of the loan applied for.

Rule - 86. Security for loan.

For every loan a member shall furnish such security as may be required under the by-laws or by the board.

Rule - 87. Security for financial assistance to be granted by a primary co-operative credit society.

No financial assistance shall be granted by a primary co-operative credit society to a member thereof unless such member furnishes the following security:

(a)      such surety as may be provided in the by-laws.

(b)      where the financial assistance has been applied for the purpose or procurement of tangible assets, hypothecation of assets, or

(c)      security of other valuable assets as may be approved by the Registrar.

Rule - 88. Period of repayment.

(1)     Subject to sub-rule (2), the period of repayment of loan shall be such as may be provided in the by-laws :

Provided that loans granted for repair of houses shall be repayable within a maximum period of ten years and loans granted for construction of houses shall be repayable within a maximum period of twenty years and loans granted by the apex bank or the central co-operative banks to the primary industrial societies or to the primary credit societies for establishment of small scale industries shall be repayable within a maximum period of ten years if the loan exceeds one lakh of rupees.

(2)     Except on such condition as the Registrar may lay down, every loan which is granted to a member of a primary credit society other than a land development bank shall be repayable within five years :

Provided, however, that the Registrar may for sufficient grounds being made out in appropriate cases extend the period of repayment up to 7½, years in the total.

(3)     The instalment for the repayment of a loan shall not be in excess of the annual surplus income of the applicant estimated by the board.

(4)     No extension of the period for repayment of a loan shall be granted except with consent in writing of the sureties.

Rule - 89.Maximum credit.

The board shall determine the maximum credit of its members in such manner as it think fit

Provided that:

(a)      in a primary non-agricultural credit society, the maximum credit of a member shall be determined after taking into consideration his assets, liabilities and the surplus income over expenditure, and

(b)      unless otherwise directed by the Registrar, in a primary agricultural credit society other than a co-operative land development bank, the maximum credit limit of a member shall not exceed the amount required by him to cultivate the total area of land to be cultivated by him according to his production plan and the amount required by him to maintain his family during the cultivation season and in the case of medium-term loans, the amount proposed to be spent for the development of the land.

Rule - 90. Restriction on issue of loan.

(1)     In any co-operative society in which the liability of the members is limited by shares, no loan shall be granted to a member exceeding twenty times the amount of share capital paid up by him

Provided that:

(a)      the central co-operative land development bank, the State Co-operative Bank or a Central Co-operative Bank may grant loans to a co-operative land development bank or a central co-operative bank up to thirty times the amount of share capital paid up by the land development bank;

(b)      a land development bank or a primary co-operative bank may grant loans to a member up to thirty times the amount of share capital paid up by him;

(c)      the State Co-operative Bank may advance loan to a society engaged in purchase, production and disposal of goods of its members in excess of twenty times the share capital paid up by such society;

(d)      with the permission of the Registrar and under such conditions as he may impose, the State Co-operative Bank or any other financing bank may grant loan to its member-societies up to thirty times the amount of share capital paid up by the member societies;

(e)      with the permission of the Registrar and under such conditions as he may impose, an agricultural society may grant loan to a member, repayable within a period of eighteen months, for facilitating production or disposal of crop, irrespective of the amount of the share capital paid up by such member;

(f)       with the permission of the Registrar and under such conditions as he may impose, an agricultural society may grant loan to a member, repayable within a period exceeding eighteen months but not exceeding sixty months for promotion of irrigation facilities and such other purposes as may from time to time be determined by him irrespective of the amount of share capital paid up by such member;

(g)      a land development bank may grant loan to a member for promotion of irrigation facilities and for such other purposes as may from time to time be determined by him irrespective of the amount of share capital paid up by such member;

(h)     the State Co-operative Bank or any other co-operative bank may grant loan to a member against pledge or hypothecation of marketable security or goods or both up to a maximum limit of eighty per cent of the market value of such security or goods or both or against the guarantee of the employer of the member of the society concerned, irrespective of the amount of share capital paid up by such member;

(i)       with the permission of the Registrar and under such conditions as he may impose, a co-operative society composed solely of displaced persons and recommended by the Department dealing with the displaced persons may grant loan to a member irrespective of the amount of share capital paid up by such member;

(j)       the State Co-operative Bank or any other co-operative bank may grant loan to a member against mortgage of immovable property up to a maximum limit of eighty per cent of the market value of such property, irrespective of the amount of share capital paid up by such member;

(k)      only in the districts where agencies have been set up for development of agriculture and persons dependent thereon, a co-operative society may grant loan to a member up to thirty times the amount of share capital paid up by such member with the permission of the Registrar and on such conditions as he may impose.

(2)     A co-operative society may, with the sanction of the Registrar, grant, as provided in section 47, loan to any co-operative society which is not its member after due consideration of the adequacy of the security offered for such grant.

(3)     A co-operative society may, in terms of section 47, grant loan to a member thereof belonging to economically weaker sections, that is to say, persons (including scheduled tribes, marginal farmers, share-croppers known as Adhiars, Bargadarsor Bhagchasis or by any other local terminology, agricultural labourers and physically or mentally handicapped persons) belonging to families having total annual income not exceeding eight thousand rupees, at a concessional rate of interest and against a lower scale of security irrespective of the value of shares held by them.

Explanations. (1) A marginal farmer means a person who owns land not more than one hectare.

(2) For the purpose of this sub-rule "family" shall have the same meaning as appearing under sub-section (2) of section 13.

(3) Any-co-operative society may give by way of loan to any depositor a sum not exceeding eighty-five per centum of his deposits irrespective of the amount of share contributed by him.

Rule - 91. Form of declaration creating charge on immovable property of members.

(1)     A declaration to be made under section 52 shall be in Form XVII.

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

Rule - 92. Form of declaration for creating GEHAN on land or other immovable property or interest therein.

(1)     A declaration to be made under sub-section (1) of section 53 shall be in Form XIX.

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

Rule - 93. Levy of water rate and embankment protection rate on non-members.

(1)     A co-operative society, an object of which is to provide irrigation facilities to the cultivable land of its members, may, in Form XXI apply to the Collector for the demarcation of the area irrigable from any source of irrigation other than a tank which has been declared to be derelict tank under section 4 of the Bengal Tank Improvement Act, 1939 (Ben. Act XV of 1939).

(2)     Such area shall be termed as "irrigable area".

(3)     On receipt of such application, the Collector shall, after publishing notice in Form XXII, by way of hanging on the land adjoining the source of irrigation and affixing on the notice board of the Collectorate, of the Anchal Panchayat and of the registered office of the co-operative society, cause to be prepared and published in the same way a map of the irrigable area and a statement in Form XXIII of the cultivable land included therein.

(4)     If the land possessed by persons who are not members of the society comprise not less than forty per cent of the cultivable land included in the irrigable area, such society may levy water rate at such rate as the Registrar may approve, upon any person who is not a member of the society possessing within such area cultivable land which is benefited by such irrigation facilities.

(5)     A co-operative society, an object of which is to provide embankment protection facilities to the land of its members, may apply in Form XXIV to the Collector for demarcation of the area protection by any embankment.

(6)     Such area shall be termed "protected area".

(7)     On receipt of such application, the Collector shall, after publishing in the same form and in the same manner a notice as laid down in sub-rule (3), cause to be prepared and published in the same form and in the same manner as laid down in the said sub-rule a map and a statement of the land included in the protected area.

(8)     If the land possessed by persons who are not members of the society comprise not less than forty per cent of the land included in protected area, such society may levy embankment protection rate of such rate as the Registrar may approve upon any person who is not a member of the society possessing within such protected area land which is benefited by the project or scheme.

(9)     The water-rate and the embankment protection rate shall be recoverable as a public demand under the Bengal Public Demands Recovery Act, 1913 (Ben. Act III of 1913).

(10)   (a) A co-operative society, an object of which is agricultural farming on co-operative basis through consolidation of land holdings, may, in Form XXV, apply to the Collector for demarcation of the area proposed to be brought under the land consolidation scheme.

(b) Such area shall be termed. "Co-operative Farming Area" or "Samabaya Krishi Kshetra".

(c) On receipt of such application, the Collector shall, after publishing in the same form and in the same manner, a notice as laid down in sub-rule (3), cause to be prepared, and published, in the same form and in the same manner, as laid down in the said sub-rule, a map and a statement of lands included in the "Samabaya Krishi Kshetra".

(d) If the lands possessed by the persons who are not members of the society comprise not less than forty per cent of the cultivable lands included in the Samabaya Krishi Kshetra, such society may direct in Form XXVI the persons who are not members to join the society on payment of requisite admission fee and the value of one or more shares in terms of the by-laws of the society and such member shall thereupon within forty-five days from the receipt of the direction join the society.

(e) If a person who is not a member, referred to in clause (d), after being called upon, by the concerned society so to do, refuses to join the said society, the said society may apply to the Collector for requisition of the lands owned or possessed by such person within the Samabaya Krishi Kshetra and if the Collector, after hearing such person and the board and after making such enquiry as he may think necessary is of the opinion

(i)       that the aforesaid land or a part thereof owned or possessed by the said person is essentially necessary in the interest of the concerned co-operative farming scheme and the co-operative movement in general,

(ii)      that but for such land or part thereof the said co-operative farming scheme is likely to fail, and

(iii)     that the said society is in a position to pay compensation that may be awarded for acquisition of such land or part thereof, under the Land Acquisition Act, 1894 (1 of 1894), he shall acquire such land or part thereof on the society depositing the required compensation, hand over possession of the same to the society.

(f) In case of a co-operative society, referred to in foregoing clause, all lands, excluding homesteads, belonging to members thereof and situated within the Samabaya Krishi Kshetra, whether owned by them at the time when they became such members or acquired by them subsequently, shall become property of the society, and no member shall be entitled to hold in his personal capacity in the Samabaya Krishi Kshetra any cultivable land or any land which can be made cultivable.

Rule - 94. Form of map.

The map of the irrigable area, the protected area or the Samabaya Krishi Kshetra shall be drawn upon a scale showing the boundaries of the concerned area and the settlement plot numbers of the lands included in such areas.

Rule - 95. Levy of water-rate and embankment protection rate.

A co-operative society may, subject to the approval of the Registrar, levy per year, water-rate not exceeding two per cent of the value of estimated produce of the land benefited and embankment protection rate not exceeding rupees five per hectare.

Rule - 96. The period within which and the manner in which mortgage deed is to be sent to the registering office.

A copy of mortgage deed referred to in subsection (2) of section 59 duly certified by the manager, branch manger, or any Government officer deputed under section 28, shall be sent to the registering officer through a messenger or by registered post with acknowledgement due within thirty days from the date of its execution.

Rule - 97. Grant of preference and exemption by the State Government under sub-section (3) of section 60.

In respect of any co-operative society or class of co-operative societies, in the interest of promotion of co-operative movement in the State, the State Government may, by general or special order, grant

(i)       preference in the matter of settlement of lands and fisheries owned by the State Government;

(ii)      preference in the matter of making purchases and fixing prices thereof;

(iii)     preference in the matter of placing contractors for Government work without inviting open tenders;

(iv)    exemption from deposit of earnest money required to be made along with permission of tenders for Government contract work;

(v)      exemption from deposit of security money required to be made before being allowed to take up Government contract work for execution;

(vi)    exemption from payment of license fees, if any, required to be paid for dealing in any commodity; and

(vii)   any other preference, exemption or concession as may be deemed fit and proper.

Rule - 98. Compromise or arrangement between co-operative society and its creditor.

(1)     Where a compromise or arrangement as referred to in section 61, is proposed before a co-operative society and its creditor or creditors or any class of them, the Registrar, upon an application made in terms of sub-rule (3) by the society or by any creditor or by the liquidator in the case of a society in respect of which an order for winding up has been passed, may order a meeting of the creditors or the class of creditors, as the case may be, to be called, held and conducted in accordance with sub-rules (4) to (7).

(2)     If a majority of the creditors or the class of creditors, as the case may be, representing claims to three-fourths of the debts due by the society to the creditors or the class of creditors present either in person or by proxy at the meeting, agree to any compromise or arrangement, such compromise or arrangement shall, if sanctioned by the Registrar upon publication in terms of sub-rule (9), be binding on all the creditors, or the class of creditors, as the case may be, and also on the society or in the case of a society in respect of which an order has been passed for the winding up on the liquidator and on all persons who have been or may be required by the liquidator under section 101 to contribute to the assets of the society.

(3)     (i) An application to the Registrar under section 61 shall contain the proposed terms and conditions of the compromise or arrangement and, where the applicant is a society, shall be accompanied by a resolution of the general meeting proposing the compromise or arrangement.

(ii) On receipt of such application, the Registrar may, if he is of opinion that the proposed terms and conditions of the compromise or arrangement shall be beneficial to the parties, give direction as to the following matters, namely:

(a)      the date or dates when the scheme of compromise or arrangement shall be placed before the creditors;

(b)      the time and place where the meeting of the creditors shall be held;

(c)      the preparation by a person duly authorised by him of a statement containing the names of the creditors, likely to be affected and the amount due by the society to each of them; and

(d)      the time within which the Chairman of the meeting shall forward his report to the Registrar.

(iii) Together with the direction to be given under clause (ii), the Registrar may refer any question touching the compromise or arrangement for consideration and decision of the meeting, and the Chairman of the meeting shall place such question before the meeting.

(4)     (i) On receipt of the order of the Registrar, the society or the liquidator, shall, before thirty clear days of the date fixed for the meeting, issue a notice to every creditor who is likely to be affected thereby, specifying the date, time and place of the meeting, and the proposals for compromise or arrangement.

(ii) The notice shall be sent by registered post or through a message, in which case the signature of the receiver shall be taken as proof of service.

(iii) Any creditor, desirous of moving an amendment to the proposed compromise or arrangement, shall send at least fifteen days before the date fixed for the meeting to the society or to the liquidators copy of his amendment and the Secretary or the liquidator, as the case may be shall send copies of such amendment to each creditor to whom the notice under clause (i) was sent.

(iv) The proceedings of any meeting held under this rule shall not be invalid by reason only of the fact that the notice was not received by any person entitled to receive it.

(v) Any officer of the society or a liquidator or any person authorised in writing in this behalf by the Registrar may attend the meeting, and if so requested by the Chairman of the meeting, may take part in the discussion but shall not be entitled to vote.

(5)     (i) A creditor who is unable to be present in person in the meeting may appoint another person as his proxy in writing in Form XXVII.

(ii) The appointment of proxy shall not be valid unless the form, duly filled in, is deposited at the office from which the notice of the meeting is issued, at least forty-eight hours before the time fixed for holding the meeting.

(6)     (i) On the date, time and place appointed for the meeting, the creditors present shall elect a person to be Chairman of the meeting.

(ii) Immediately after the Chairman has been elected, he shall read out a statement, duly authenticated by an officer authorised in this behalf by the Registrar, containing the names of those creditors to whom notice under clause (;) of sub-rule (4), has been issued and the amount due by the society to each.

(iii) If creditors fulfilling requirements of sub-rule (2) are present, the Chairman shall read to the meeting the terms of the proposed compromise or arrangement and shall place before the meeting the question whether the proposed compromise or arrangement is to be accepted.

(iv) Any creditor present may move an amendment to the compromise or arrangement proposed, if he has given a notice of such amendment in accordance with clause (ii) of sub-rule (4):

Provided that the Chairman may place before the meeting any amendment proposed by a creditor of which such notice has not been given if majority of the creditors present agree that such amendment be considered by the meeting.

(v) Every amendment shall be placed before the meeting in such order as the Chairman may consider convenient for the purpose of discussion.

(vi) The persons present at the meeting may speak on the motion put by the Chairman or any amendment thereto in such order as the Chairman may direct. The Chairman may fix a time limit for speeches.

(7)     (i) The Chairman shall cause minutes to be prepared of the proceeding of the meeting and shall sign them before leaving the meeting.

(ii) The minutes shall contain the names of all creditors present at the meeting and if a poll is demanded, the number of creditors voting for or against the motion or any amendment thereto and the result thereof.

(iii) The Chairman shall forthwith forward to the Registrar a copy of the minutes of the proceeding of the meeting duly signed by him with a copy of the terms of the compromise or arrangement,

(8)     The Chairman shall dissolve the meeting if the number of creditors required under sub-rule (2) is not present and shall report it to the Registrar.

(9)     Copy of compromise or arrangement sanctioned by the Registrar shall be sent to each of the creditors to whom notice had been issued under clause (i) of sub-rule (4) and such compromise or arrangement shall be published by the society displaying it in a conspicuous place of the registered office of the society.

Rule - 99. Conduct of sale by the sales officer.

The Sales Officer shall conduct the sale, as laid down in section 54, in accordance with the provisions of Chapter XIII of the Act.

Rule - 100. Power of State Government to guarantee.

(1)     In the case of any debenture or of any class or series or issue of debentures issued under the Act, the State Government shall

(a)      guarantee repayment of the principal and the payment of the Interest thereon, subject to such maximum amount of principal or such rate of interest and such other conditions, as the State Government may decide;

(b)      notwithstanding anything contained in the Indian Trusts Act, 1882, declare that such debentures shall be deemed to be included among the securities enumerated in section 20 of that Act.

(2)     Such debentures shall not be issued by a co-operative society save with the express authority of the State Government.

Rule - 101. Liability to furnish information.

Every officer and every member of a co-operative society shall furnish such information in regard to the transactions or working of the society, as may be required of him by the Registrar, an audit officer, arbitrator, liquidator or any person conducting an inspection or inquiry under Chapter X of the Act.

Rule - 102. Change of liability.

(1)     A co-operative society may, by amendment of its by-laws, change the form or extent of its liability.

(2)     When a co-operative society has passed a resolution to change the form or extent of its liability, the society shall give notice thereof in writing to all its members and creditors, and notwithstanding any by-law or contract to the contrary, any member or creditor shall, within one month of the service of the notice upon him, have the option of withdrawing his shares, deposits or loans. Any member or creditor, who does not exercise his option within the period aforesaid, shall be deemed to have assented to the change.

(3)     The change shall not take effect until

(a)      the assent thereto of all members and creditors has been secured, or

(b)      the assent thereto of all members or creditors who exercise the option referred to in sub-rule (2) have been met in full.

Rule - 103. Co-operative society's power to call for statement of claims.

(1)     When a member of a co-operative society, which includes among its objects the advance of loans to its members, applies for a loan or when a person applies for membership of such a society, the society may serve a notice on any creditor named in the application or ascertained after inquiry, and may also publish a general notice on all creditors, requiring him in Form XXVIII and within the time specified in the notice, to furnish a written statement of his claim in Form XXVIII-A.

(2)     When a member of a co-operative society, which includes among its objects the advance of loans to its member, intends to apply for a loan from any person other than the society, such member shall send to the society a notice in writing, stating

(a)      his intention to apply for such loan,

(b)      the amount of the loan for which he intends to apply, and

(c)      the object of taking the loan.

Rule - 104. Co-operative society's power to call for notice of suits or proceedings against members.

A co-operative society the objects of which includes advance of loan to its members and the financing bank, if any, of which such society is a member, may where revenue or loan or advance realisable as public demand is payable by any member of such society to the State Government, by a notice served upon the Collector, require the Collector to furnish to such society or the financing bank or both, notice of any suit or proceedings for recovery of arrear of revenue or loan or advance instituted or commenced, by him against such member.

Rule - 105. 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 the society an opportunity of being heard, issue such directions as he may consider necessary regulating or restricting such transactions.

Rule - 106. Procedure for direct recruitment of staff by co-operative societies.

(1)     Unless the State Government otherwise directs by notification and subject to the provisions of sub-rule (1) of rule 69, all co-operative societies shall notify their Vacancies, other than those required to be reported to the Service Commission when constituted, to the Local Employment Exchange or to the Director, National Employment Service, as the case may be, and ask for names of suitable candidates in terms of the qualifications required of such candidates.

(2)     Unless the State Government otherwise directs by notification and subject to the provisions of sub-rule (1) of rule 69, recruitment to all posts in Groups C and D shall be made, as far as possible from the Local Employment Exchange.

(3)     For apex societies, central societies or primary societies which have obtained Government assistance in the form of share capital participation, loans, Government guarantee etc., selection committee for selection of staff other than Group D staff shall be constituted in the manner laid down in rule 107.

(4)     For selecting the candidates from the Employment Exchange, the selection committee for selection of staff other than Group D staff may hold such test and interview or Viva Voce tests as it may consider expedient.

(5)     In cases where the local Employment Exchange or the Director, National Employment Service, will not be in a position to furnish suitable names, specially in the higher category of posts where specialised technical personnel are necessary, the concerned society may, after obtaining the requisite certificate from the local Employment Exchange or the Director, National Employment Service, as the case may be, notify vacancies of such posts through publication of advertisement in two daily newspapers having wide circulation in the case of an apex society and in one such newspaper in the case of a central society or a primary society. Such vacancies shall also be notified in the local Panchayat Office or Municipal Office, Block Development Office and other important office of the district.

(6)     All co-operative societies shall maintain the same percentage of vacancies reserved for candidates of scheduled castes and scheduled tribes as may be specified by the State Government by general or special order from time to time.

(7)     While calculating the vacancies to be filled up, all co-operative societies shall give due consideration to the principles regarding absorption of casual and seasonal workers as enunciated by the Labour Department of the State Government.

(8)     Before actually filling up vacancies on the basis of direct recruitment, the State-aided co-operative societies shall obtain prior approval of the Registrar or of any other officer as the Registrar may by order nominate, if the society has accumulated loss.

Rule - 107. Constitution of Selection Committee.

Pending constitution of Service Commission selection committee for assisting the co-operative societies in the matter of selection candidates as referred to in sub-rule (3) of rule 106 shall be constituted as follows :

(a)      Apex societies

(i)       The Chairman and the Vice-Chairman or in their absence any two directors of the concerned society as decided by the board;

(ii)      The Chief Executive Officer of the society;

(iii)     Registrar or his nominee;

(iv)    One expert selected by Government in the case of recruitment to posts having scale or pay with maximum at Rs. 2,000 and above;

(v)      The Chairman of the State Co-operative Union or his nominee, the Chief Executive Officer or the Manager of the co-operative society shall be the convenor of the meeting and its Chairman or the Vice-Chairman or any of the two nominees of the concerned society as decided by the board shall be the Chairman of the Selection Committee.

(b)      Central co-operative bank, co-operative wholesale societies, rice milling societies, cold storage societies and other processing societies

(i)       The Chairman and the Vice-Chairman, or in their absence, two Directors of the concerned society as decided by its board;

(ii)      A nominee of the Registrar;

(iii)     The Manager or the Chief Executive Officer of the concerned co-operative society as the board of the society may decide;

(iv)    A representative of the concerned apex society.

(v)      The Chief Executive Officer or the Manager of the co-operative society shall be the convenor of the meeting and its Chairman or the Vice-Chairman or any of the two nominees of the concerned society, as decided by the board, shall be the Chairman of the Selection Committee.

(c)      Primary society

(i)       The Chairman and the Secretary, or in their absence, two directors of the concerned society as the board may decide;

(ii)      The Manager or Chief Executive Officer, as the board may decide;

(iii)     A nominee of the Registrar;

(iv)    The Secretary, or in his absence, the Chief Executive Officer or the Manager shall be the convenor of the meeting and the Chairman, or in his absence, a nominee of the society concerned shall be the Chairman of the Selection Committee.

(v)      The Secretary or in his absence, either the Chief Executive Officer or the Manager shall be the convenor of the meeting and the Chairman or in his absence, the Secretary of the society shall be the Chairman of the Selection Committee.

Rule - 108. Conditions of service of the employees of co-operative societies.

The conditions of service of the employees of co-operative societies shall, subject to the terms of specific contract enforceable by law and the provisions of any law for the time being in force, be as enunciated in the Appendix to this Chapter.

CHAPTER VII PROPERTIES AND FUNDS OF CO-OPERATIVE SOCIETIES

Rule - 109. Investment of funds.

In addition to the manner specified in section 62 or in the proviso to section 65, a co-operative society may invest or deposit its funds

(a)      with the West Bengal State Co-operative Bank Limited;

(b)      with the Central Co-operative Bank of the area within which its registered address lies (including the branches of the said Central Co-operative Bank, if any);

(c)      in any other manner permitted by the Registrar.

Rule - 110. Utilisation of bad debt fund.

A co-operative society may, subject to the provisions of section 64, invest or deposit the bad debt fund

(a)      with the West Bengal State Co-operative Bank Limited;

(b)      with any central co-operative bank operating in the area of the society;

(c)      in the units of the Unit Trust of India;

(d)      in the Small Savings Certificates;

(e)      in any Government Savings Bank;

(f)       in any other manner permitted by the Registrar.

Rule - 111. Creation and maintenance of inventory loss fund, price-fluctuation fund, sinking fund, development fund, staff welfare fund, members' welfare fund and dividend equalization fund.

A co-operative society may, if it considers expedient, create and maintain the following funds

(a)      inventory loss fund,

(b)      price-fluctuation fund,

(c)      sinking fund,

(d)      development fund,

(e)      staff welfare fund,

(f)       members' welfare fund,

(g)      dividend equalisation fund, and such other funds or reserves as may be deemed to be beneficial to the general interest of the society and may make regulations for the management of such funds.

Rule - 112. Use of reserve fund and other funds in the business of a society.

A co-operative society may, with prior-approval of the Registrar and on such conditions as he may impose, use in its business

(i)       upto one-fourth of its reserve fund, when the owned capital is less than the borrowed capital;

(ii)      upto one-half of its reserve fund, when the owned capital is equal to or exceeds, the borrowed capital; and

(iii)     the entire reserve fund, when there is no borrowed capital.

Rule - 113. Employees' Provident Fund.

(1)     A co-operative society establishing Employees' Contributory Provident Fund under section 66 shall make regulations for its management, particularly with regard to

(i)       authority to administer the fund;

(ii)      amount of employees, contribution to be deducted from the employee's salary;

(iii)     mode of nomination for payment of the amount of the fund in case of the employee's death;

(iv)    the purpose for which, extent to which, and the period after which advances may be made from such fund, and the number of monthly instalments in which the advance is to be repaid;

(v)      final payment of the amount standing in the fund on the employee's retirement, resignation or otherwise;

(vi)    maintenance of accounts of such fund.

(2)     An employee's contribution to the fund in a month shall be eight and one-third per cent of his basic salary.

(3)     The co-operative society may make such contribution every year to the Employees' Contributory Provident Fund, as may be approved by the board, but such contribution shall not be less than the annual contribution made by the employee concerned.

(4)     Such Provident Fund shall not be used in the business of the society, but shall be invested or deposited in one or more of the following ways-

(a)      in Government savings bank;

(b)      in any of the securities mentioned in section 20 of the Indian Trusts Act, 1882, other than those specified in clause (e) of that section; or

(c)      in any co-operative bank or any other bank approved by the Registrar.

Rule - 114. Declaration of dividend, bonus, rebate, etc.

(1)     In every co-operative society with shares, dividend may be declared up to a maximum of 12 per cent per annum, on the amount paid up on shares as laid down in clause (a) of sub-section (2) of section 68.

(2)     (a) In any co-operative society dealing in goods, rebate may be allowed on the total amount of payments made by a member during a co-operative year towards his purchase of goods from the society during that year.

(b) In case of credit societies, rebate on interest may be allowed to members making timely repayment.

(3)     (a) No dividend shall be paid by a society with shares and unlimited liability without the previous sanction of the Registrar.

(b) No dividend shall be paid

(a)      otherwise than out of profits certified by the audit officer to have been actually realised; or

(b)      without the previous sanction of the Registrar, if the audit officer reports that any asset is bad or doubtful and not adequately covered.

(4)     No dividend shall be paid in any co-operative society, unless recommended by the board and approved by the general meeting, and no bonus or rebate shall be allowed without approval of the board in a meeting.

(5)     A co-operative society incurring loss or having accumulated loss on its account shall not without prior approval of the Registrar, make any ex-gratia payment or payment of bonus at a rate more than the minimum prescribed under the Payment of Bonus Act, 1965 (21 of 1965).

Rule - 115. Co-operative Education Fund.

(1)     Every co-operative society shall, after the close of each co-operative year contribute five per cent of its net profit subject to a maximum of rupees seven thousand and five hundred to the Co-operative Education Fund. Such contribution shall be remitted to the West Bengal State Co-operative Bank Limited or to the central co-operative bank of the area concerned within three months from the date of receipt of the audited accounts. The central co-operative bank on receipt of the amount shall transfer the same to the West Bengal State Co-operative Bank Limited within a period of thirty days, from the date of the receipt.

(2)     (i) The fund shall be administered by the Co-operative Education Fund Committee to be set up by the State Government, with the following persons, namely:

(a)      Chairman of the State Co-operative UnionChairman;

(b)      Four representatives of agricultural societies, namely, two from societies dispensing short term credit, one from societies dispensing long-term credit, and one from marketing societies to be nominated by the State Government-Members;

(c)      Three representatives of non-agricultural societies, namely, one from non-agricultural credit societies and two from non-agricultural non-credit societies to be nominated by the State Government-Members;

(d)      One nominee of the Registrar Member.

(ii) The Executive Officer of the West Bengal State Co-operative Union, and in the absence of such Executive Officer, the Senior Co-operative Education Officer of the said Union shall be the Secretary of the committee.

(iii) The members of the committee shall hold office for a period of three years from the date of their appointment.

(iv) A casual vacancy in the membership of the committee shall be filled up by the nominating authority, as early as possible for the remaining period of the term.

(3)     Subject to such direction, if any, as the State Government may give from time to time, the fund may be utilised for any of the following purposes, namely :

(a)      education of members, office-bearers, employees and general public in co-operative principles and practice;

(b)      development of new types of co-operative societies;

(c)      improvement of co-operative societies;

(d)      development of co-operative movement in general;

(e)      co-operative publicity;

(f)       publication of the books and journals relating to co-operative movement;

(g)      conduct of research, case studies and evaluation in the field of co-operative movement;

(h)     award of prize or honorarium for rendering meritorious service to the cause of the co-operative movement of the State.

(4)     The fund shall be audited by the Registrar or by an Audit Officer authorised by him in this behalf by an order in writing, annually within a period of six months from the close of each co-operative year, and the copies of the audit report shall be submitted to the committee and to the State Government.

Rule - 116. Contribution for charitable and other purposes.

A co-operative society may make contributions under clause (c) of sub-section (2) of section 68 to the Co-operative Employees' Benefit Fund, the West Bengal State Co-operative Education Fund or any other fund which may be approved by the State Government by a general or special order made in this behalf or to any district co-operative union operating in the area.

CHAPTER VIII ELIGIBILITY FOR MEMBERSHIP AND PRIVILEGES, LIABILITIES AND OBLIGATIONS OF MEMBERS

Rule - 117. Eligibility for membership.

No person, qualified to be a member of a co-operative society under the Act, or the rules or the by-laws shall be excluded from membership:

Provided that without the permission of the Registrar

(i)       no person shall be entitled to membership of any society with unlimited liability who is or has been at any time during the two preceding years, a member of any other society with unlimited liabilities,

(ii)      no person shall be entitled to membership of any credit society even with limited liability if he is a member of or is indebted to, any other such society until he has obtained in writing the consent of the society of which he is already a member.

Rule - 118. Form and manner of admission to membership.

A person intending to be a member of a co-operative society shall apply to such co-operative society in Form XXIX and such application shall be addressed to the Chief Executive Officer of the society by whatever designation he may be called.

Rule - 119. Disposal of objection.

Where an objection is received against any such application for membership, the objection shall be placed in the next meeting of the board for decision :

Provided that the board shall before coming to a decision afford the applicant and the objector an opportunity of being heard.

Rule - 120. Appeal against refusal to admit any applicant as member of a society.

(1)     On receipt of an appeal under sub-section (4) of section 70, the Registrar shall issue clear seven days' notice to the appellant to the society concerned and to the objector, if any, fixing the date, time and place of hearing and after affording the parties an opportunity of being heard, the Registrar shall make appropriate order and the order shall be binding on the society with effect from the date of receipt of the same. No resolution of the board admitting the appellant as member shall be necessary, if the registrar decides in favour of the admission.

(2)     The appeal shall be preferred within 60 days from the date of communication of the decision or within 90 days from the date of application if there be no communication of any decision.

Rule - 121. Exercise of rights of membership.

 Before a member may exercise rights of membership, he shall

(i)       sign a declaration in such form, as may be required by the board, undertaking that he shall be bound by the by-laws of the society,

(ii)      sign the register of members, and

(iii)     make payment of share money and admission fee wherever necessary:

Provided that the requirement of the provisions of this clause shall be communicated to a member within fifteen days from the date of enrolment of such member.

Rule - 122. Appeal against order of expulsion or suspension.

Where the board of a co-operative society expels or suspends a member, he shall have a right of appeal to the general meeting and the decision of the general meeting on such appeal shall be final.

Rule - 123. Cessation of membership of a co-operative society.

A member of a co-operative society shall cease to be such member, if he

(i)       dies,

(ii)      resigns in accordance with the Act, these rules and the by-laws,

(iii)     transfers his share in favour of some other person in full,

(iv)    is adjudged an insolvent,

(v)      is adjudged bankrupt,

(vi)    turns a lunatic.

Rule - 124. An association or body of persons as a member of a co-operative society.

 When any association or body of persons is admitted as a member of a society, it shall appoint any one of its office-bearers or officers, by an instrument in writing, to exercise its rights and perform its duties in relation to such society.

Rule - 125. Manner of recalling a loan not utilised for the proper purpose.

(1)     Where the board of a society has reasonable cause to believe that a member has not utilised a loan for the purpose for which it was advanced, the society may, by a notice, direct the member to show cause, within such time as may be specified in the notice, why the loan shall not be recalled, and where no cause is shown to the satisfaction of the society within t)he time specified, the society

(a)      may recall the loan; and

(b)      if the loan is not refunded immediately on recall shall apply to the Registrar for an award under section 128 in order to recover the loan.

(2)     Where cause is shown, the society may after, holding an enquiry and giving such member an opportunity of being heard, take such decision as it may consider expedient.

Rule - 126. Restriction on interest of a member of a society with limited liability and shares.

Where the liability of a member of a co-operative society is limited by shares, no member other than the State Government or another co-operative society shall hold more than one fifth of the share capital of the society.

Rule - 127. Nomination of transferee.

(1)     A member of a co-operative society may in accordance with the provision of section 79, nominate in writing any person belonging to his family to whom the share or interest or the value of such share or interest shall, on his death, be paid or transferred under the provision of the Act:

Provided that if a member has no family he may nominate any person to whom such share or interest or the value of such share or interest shall be paid or transferred:

Provided further that such member may, from time to time, revoke such nomination and make a fresh nomination.

(2)     Every co-operative society shall keep a register of all persons so nominated.

(3)     In case the nominee of a member dies, the member shall report the death to the society, and make a fresh nomination if he so desires.

Explanation. For the purpose of this rule a family shall have the same meaning as given in the Explanation to sub-section (2) of section 13 and shall include major sons and daughters.

Rule - 128. Disposal of deceased member's share or interest and procedure for calculation of value of shares.

(1)     When upon the death of a member of a co-operative society, the question of transferring the share, or paying interest of such deceased member arises, and the board of such society finds that the deceased member did not make any nomination in accordance with the provisions of section 79, or that the existence or residential address of the person nominated cannot be ascertained, or that for any other sufficient cause such transfer or payment cannot be made without unreasonable delay, the board may transfer the share or pay interest of such deceased member in favour of or to any person who presents in writing his or her claim for the said share or interest and produces, in support of such claims, probate, letter of administration or succession certificate issued by a competent court having jurisdiction, and makes a written declaration in an affidavit before a Magistrate that he or she is the rightful claimant, being the legal heir or representative of the deceased.

(2)     (a) Where a co-operative society has to make a refund of the value of a share, the value of the share shall be deemed to be equal to the amount paid upon the share:

Provided that where a portion of the assets is estimated to be bad or doubtful in the latest audited balance sheet, and is not covered by funds created out of profits, the board may, for the purposes of such payment, reduce the value of the share, in the same proportions as the aggregate amount of assets which are not bad or doubtful, less the amount of outside liabilities, bears to the paid-up share capital.

(b) Where a transfer of share or interest is made, the value of the share or interest shall be deemed to be the sum actually paid by the member for the acquisition of such share or interest.

Rule - 129. Refund of share value.

Where a member of a co-operative society ceases to be a member due to any reason, the shares held by him in the society may be refunded in accordance with the provisions of sub-rule (2) of rule 128.

CHAPTER IX SPECIAL PROVISIONS FOR CO-OPERATIVE HOUSING SOCIETIES

Rule - 130. Functions of promoters.

For the purpose of registration of a co-operative housing society all the promoters intending to join the application for registration shall hold meeting for

(a)      adoption of name of the proposed society and of its by-laws,

(b)      election of the Chief Promoter and the first board including the Chairman, the Vice-Chairman and the Treasurer from amongst the promoters,

(c)      vesting the Chief Promoter, the Chairman, the Vice-Chairman and the Treasurer with powers and functions as laid down in these rules,

(d)      consideration and adoption of the scheme of the project to be undertaken by the proposed society,

(e)      consideration and approval of the agreement to be entered into with the vendor or lessor of the land, building or tenement, as the case may be.

Rule - 131. Function of the Chief Promoter, the Chairman, the Vice-Chairman and the Treasurer.

The Chief Promoter of a co-operative housing society shall take steps, as may be necessary, under the provisions of the Act and Chapter II of these rules to get the society registered and shall

(a)      open a bank account to be operated by him jointly with the Chairman or, in absence of any of them, the Vice-Chairman and the Treasurer together with the other available,

(b)      negotiated with the approval of the Chairman to purchase or get land, building or tenement.

Rule - 132. Holding of the first meeting of the board of a co-operative housing society.

After registration of a co-operative housing society the Chairman or, in his absence, the Vice-Chairman shall, within one month from the date of such registration, convene the first meeting of the board for the purpose of election of office-bearers other than the Chairman, the Vice-Chairman and the Treasurer and for such other purposes as the Chief Promoter may, with the approval of the Chairman determined.

Rule - 133. Report to the first general meeting and commencement of work.

(1)     The report under clause (b) of sub-section (1) of section 86 shall, besides report about progress of the work, contain particulars of (a) funds raised from members, (b) expenses incurred under various heads prior to and after registration, (c) how many members resigned and how many enrolled after registration of the society and (d) the latest estimate regarding the project cost.

(2)     Where the society decides to have the work executed by architects and contractors, in first meeting, a panel of architects and contractors not exceeding three in each case, shall be prepared after giving due publication of notice, in at least one daily newspaper having wide circulation :

Provided that when the total cost of the Project of a co-operative housing society exceeds rupees twelve lakhs, the society shall in a meeting decide to have the project executed by architects and contractors.

(3)     In the first meeting a panel of five valuers shall be prepared according to procedure prescribed in sub-rule (2).

(4)     No person acting as an architect shall also act as a contractor and vice versa.

Rule - 134. Allotment of plots or houses or apartments.

(1)     Allotment of plots, houses or apartments by the board shall be made strictly on the basis of the principles and policies adopted in its first meeting and shall be communicated to each member within seven days from such decision about allotment or otherwise. Any person dissatisfied by the decision of the board may appeal to the general body of members whose decision shall be final.

(2)     The member intending to prefer such appeal shall within fifteen days from date of receipt of the communication of the decision of the board express his intention in writing to the board to prefer an appeal, and the board shall within forty-five days of receipt of such intimation arrange to hold a meeting of the general body.

Rule - 135. Membership.

(1)     Every applicant for membership of a co-operative housing society shall, as the case may be, submit along with his application for membership

(i)       two recent passport size photographs,

(ii)      income-tax clearance certificate or profession tax certificate, and

(iii)     salary certificate (in case of persons employed by others).

(2)     In a co-operative housing society the number of members shall not exceed the total number of plots, houses or apartments proposed by a society to be allotted to members under any scheme or project of such society:

Provided that a member shall be eligible for allotment of only one plot, house or apartment in a housing co-operative society.

(3)     (a) For the transfer of land or house or apartment a member shall obtain a written consent of the society and before giving such consent the society shall satisfy itself that

(i)       the transferee is eligible for being a member of the society;

(ii)      the transferee has genuine need for residential accommodation;

(iii)     the transferor has paid off his outstanding liabilities to the society or, the transferee has undertaken to take over such liabilities of the transferor;

(iv)    the transferee formally applies for membership of the society.

(b) Where a society refuses or fails to give consent to the transfer referred to in clause (a) and the member intends to appeal to the Registrar against such refusal by or failure of the society, an appeal may be preferred within thirty days from the date of communication of the refusal or within sixty days from the date of receipt of the proposal by the society.

(4)     A person who does not own a house or apartment in his own name or in the name of a member of his family but possesses a plot of land in his own name, shall be eligible to be a member of a co-operative housing society comprising plot holders, if he intends to build a house thereon with the assistance of such society and if his plot stands adjacent to a plot within the jurisdiction of the society.

(5)     No person shall be admitted as a member of a co-operative housing society who is not considered by a board thereof as one having genuine need for housing or additional accommodation from such society.

(6)     A person who has entered or intends to enter into any contract with a co-operative housing society in the matter of any work, constructional or otherwise, relating to a project of the society shall not be eligible to be a member:

Provided that where a person conveying a plot of land in favour of a co-operative housing society intends to become a member of such society without any additional consideration and is otherwise eligible for such membership, he may be admitted as a member of such society.

Rule - 136. Cessation of membership.

(1)     A person shall cease to be a member, if

(i)       he incurs any of the disqualifications to be a member;

(ii)      he fails to accept any allotment of land or house or apartment within a period of ninety days from the date of allotment; or

(iii)     he or any member of his family establishes any business relationship with the society or acts as an advocate or solicitor against the society, unless otherwise directed by the Registrar.

(2)     The cessation of membership shall be deemed to be effective from the date when the cause of cessation referred to above first arises.

(3)     Notwithstanding anything contained in clause (i) of sub-rule (1), membership of a person shall not cease if he or any member of his family becomes owner of any land or house or apartment by inheritance and still continues to have a genuine need for accommodation in the project of the society.

Rule - 137. Expulsion of members.

(1)     Any member who continues to default in payment of his dues towards cost of land or house or apartment allotted to him by the society for more than six months without a break may be expelled from the society by the vote of two-thirds of the members of the board present and voting at a meeting after he has been given an opportunity of explaining his conduct and no resolution of the board shall be effective unless it is submitted to the Registrar for approval and approved by him:

Provided that the order of expulsion shall take effect only from the date of communication of the decision of the board to the concerned members after the approval of the Registrar as aforesaid, has been duly obtained :

Provided further that the approval or disapproval of the Registrar shall be communicated to the society within a period of six weeks and in the absence of such communication, the resolution of the board shall be effective.

Explanation. The power of approval conferred hereinabove shall vest on the Registrar exclusively and shall not be capable of being delegated to any other officer.

(2)     A member may be expelled in the same manner as laid down in sub-rule (1) if, in the opinion of the board, he has done any act prejudicial to the interest of the society or has violated a lawful decision of the board despite warning.

The member so expelled shall have a right to appeal to the State Government for which purpose he shall submit a written representation to the State Government within a fortnight from the date of communication of the order of expulsion.

Rule - 138. Recovery of dues from member, after his entitlement to title or interest in land or house or apartment.

Where a member, after his entitlement to title or interest in any land, house or apartment continues to default in payment to the society for a period of more than six months, the board may take steps for recovery of the dues laid down against serial 4 of the Second Schedule to the Act.

Rule - 139. Powers and duties of the board of a co-operative housing society.

Subject to the powers and duties conferred and imposed by these rules, the board of a co-operative housing society shall exercise the following powers and perform the following duties, namely

(a)      to appoint, suspend, remove or discharge all persons engaged on payment of fees or on the basis of contract, such as contractors, solicitors, supervisors, engineers, valuers, architects and surveyors;

(b)      to invite tenders and to enter into contracts for and on behalf of the society and to settle the terms thereof:

Provided that the terms and conditions of contracts once settled shall not be altered without a resolution passed by two-thirds of the members present and voting at a meeting of the board;

(c)      to authorise by name one of the members of the board other than the person in-charge of cash or account to verify the cash balance as shown in the books of the society at least once a month and other assets of the society once in a quarter and to report to the board the result of such verification in the next following meeting. If any shortage of cash balance or any other asset is reported, the board shall take prompt steps for the recovery of the shortage failing which the members of the board shall be jointly and severally responsible for making good the shortage;

(d)      to take such steps as may be necessary for obtaining loan from the West Bengal State Co-operative Housing Federation Limited on behalf of the members or to assist the members in all possible manners including supply of papers and documents in the matter of their obtaining loans from any source;

(e)      to inform the members of full particulars of loan sanctioned and issued by the West Bengal State Co-operative Housing Federation Limited along with the terms and conditions thereof as and when such loans are sanctioned and issued by such Federation;

(f)       to issue periodical demand notice to the members for paying instalments towards cost of land, house or apartment:

Provided that the number of such instalments shall be fixed in consideration of the actual progress of the work of the project;

(g)      to ensure that the name of a nominee of a member is entered in the appropriate register and also to inform the member of the same in an appropriate manner;

(h)     to arrange timely repayment of loans to the West Bengal State Co-operative Housing Federation Limited on collection of instalments of loans from members; and

(i)       to place reports for consideration of the members in the annual general meeting.

Rule - 140. Escalation of project cost.

The board shall endeavour to avoid any escalation of project cost. However if there is any escalation, the board shall bring the fact to the notice of the general body in the annual general meeting or special general meeting forthwith.

Rule - 141. Financial transactions and maintenance of accounts in a co-operative housing society.

(1)     All financial transactions in a co-operative housing society involving an amount exceeding one thousand rupees shall be made by Account Payee Cheques only.

(2)     All payments to a co-operative housing society shall be made against serially machine- numbered receipts duly signed by the Secretary and bearing the common seal of the society.

(3)     All payments by a co-operative housing society shall be made against proper receipts duly signed and dated by the payee concerned.

(4)     All receipts and payments by a co-operative housing society shall be immediately entered in the cash book of the society making corresponding entries in the relevant ledgers.

Rule - 142. Transfer and letting out by members of a co-operative housing society.

(1)     In all cases of transfer and letting out of land, house or apartment, prior permission of the Registrar shall be obtained in addition to written consent of the society:

Provided that in no case permission of the Registrar or the written consent of the society shall be withheld arbitrarily where the ground or grounds enumerated in sub-rule (3) of this rule have been satisfactorily made out and the conditions set forth in rule 135 (2) (a) have been fulfilled.

(2)     A co-operative housing society may raise such fee or donation as may be specified by the State Government from time to time by notification for according consent for transfer by a member of his land, house or apartment to another person having eligibility to become a member of the society.

(3)     A member of a co-operative housing society in whose favour a plot of land or a house or an apartment in a multistoreyed building has been allotted may transfer by way of sale or usufractuary mortgage as defined in the Transfer of

Property Act, 1882 (4 of 1882) such plot or house or apartment, as the case may be, on one or more of the following grounds

(i)       that the member has been involved in debts and the transfer by way of sale or usufractuary mortgage is necessary to pay off his creditors;

(ii)      that the member is compelled to shift from the locality due to unavoidable circumstances beyond the control of the member;

(iii)     that the member is in urgent need of money to meet the expenses of marriage or of education of his son or daughter or that the member is in urgent need of money to meet urgent medical expenses of any of the members of his family or any person fully dependent on him;

(iv)    such other grounds analogous to those mentioned above as the Registrar might consider reasonable and justifiable.

Rule - 143. Refund of deposits to a member or his nominee in the event of his resignation or expulsion or death.

Deposits made by a member of a co-operative housing society towards cost of project shall, in the event of termination of his membership by resignation, expulsion, death or otherwise be refunded to him or his nominee or his legal heir, as the case may be, within six months from the date of such termination.

Rule - 144. Annual general meeting of a co-operative housing society.

In the annual general meeting of a co-operative housing society held in terms of subsection (1) of section 25, in addition to particulars required therein the board shall submit a comprehensive report covering the following points :

(a)      progress in implementation of project;

(b)      particulars of funds received from individual members and cases of default, if any;

(c)      confirmation of land, house or apartment cost as per up-to-date estimate or estimates of escalation, as the case may be;

(d)      latest position as to drawal of loans from the West Bengal State Co-operative Housing Federation Limited and recovery of such loans;

(e)      cases of resignation, expulsion and death, if any, of members and fresh enrolment in the consequential vacancies.

Rule - 145. Jurisdiction of the West Bengal State Co-operative Housing Federation Limited.

(1)     The West Bengal State Co-operative Housing Federation Limited may, upon a scheme being drawn up by it duly approved by the Registrar at any time, undertake construction of houses anywhere within the State of West Bengal under its supervision and control, and simultaneously sponsor co-operative housing societies and transfer the houses to those societies on terms and conditions agreed upon by the sponsoring and the sponsored society.

(2)     In the case of a co-operative housing society sponsored by the West Bengal State Co-operative Housing Federation Limited the expression 'Chief Promoter', wherever it occurs in these rules, shall mean the Chief Executive Officer of the said housing federation.

Rule - 146. Restriction on borrowing.

Notwithstanding anything contained elsewhere in these rules the West Bengal State Co-operative Housing Federation Limited or any co-operative housing society may incur liabilities by way of loan from any other co-operative society, the Government or any other financing institution against adequate security irrespective of the amount of paid-up share capital and reserve fund separately invested outside the business of the society.

Rule - 147. Restriction on issue of loan.

Notwithstanding anything contained elsewhere in these rules the West Bengal State Co-operative Housing Federation Limited or any other co-operative housing society may grant loan to a member up to fifty times the amount of share capital paid up by such member so, however, that the amount of loan to be granted to the member shall not exceed ninety per cent of value of the land acquired or taken possession of by such member or where building has been constructed or proposed to be constructed on such land, or both land and building.

Rule - 148. Valuation of land.

(1)     The value of land for the purpose of clause (c) of section 82 shall be determined by the society

(a)      by arriving at an average sale value with reference to recorded sales of similar land in the locality within the last three years, or

(b)      if no such record of sale is available, by having the value of the land assessed by the Land Acquisition Collector within the local limits of whose jurisdiction the land is located.

(2)     The valuation of house or apartment shall be made by an empanelled valuer.

Rule - 149. Restriction on change in the scheme of the project and number of projectsfor a co-operative housing society.

(1)     No primary co-operative housing society shall undertake any housing project other than one decided upon in the promoters' meeting for the purpose of registration of the society without the approval of the general body and concurrence of the Registrar:

Provided that in the Calcutta Metropolitan area, as defined in Calcutta Metropolitan Development Authority Act, 1972, no primary co-operative housing society shall sponsor more than one housing project.

Explanation. "Housing Project" means multi-storeyed buildings or a cluster of houses in a compact area.

(2)     No primary co-operative housing society shall make any change in the project or the project site without the approval of the general body and prior approval of the Registrar.

Rule - 150. Creation of second mortgage on a co-operative land, house or apartment in favour of the employer by a member employed in the public sector.

Any member of a co-operative housing society, who is an employee of the central or the State Government or any public undertaking or government sponsored institution, may, on being formally allotted land, house or apartment by the society of which he is a member, obtain loan from his employer on such terms and conditions as may be imposed by the employer and such loan, either in lump or in suitabler instalments, as the case may be, shall be paid to him or on his authority to the co-operative housing society of which he is a member or the West Bengal Cooperative Housing Federation Limited as may be decided by the employer upon an agreement by the loanee member to assign the right, with the co-operative housing society upon a further agreement to pledge his gratuity or deposits or interest. He shall also be required to execute a second mortgage in favour of his employer after completion of the house or the apartment.

Rule - 151. Mode of communication by members to a co-operative housing society in certain matters.

(1)     When a member intends to vacate the possession of the plot, house or apartment he shall communicate such intention to the board in writing explaining the reasons thereof and intimating the period by which he intends to vacate.

(2)     Whenever a member intends to make any addition or alteration or repair of any house or apartment in his possession, he shall communicate such intention to the board in writing explaining the purpose of such addition or alteration or repair proposed and furnishing such information as may be necessary.

Rule - 152. Apportionment of cost of land, house or apartment in a co-operative housing society.

(1)     The cost of any land (including its development cost) or the cost of any house or apartment on such land built by a co-operative housing society shall be apportioned in such manner as may be decided by the board.

(2)     The cost of maintenance, repair or replacement of common areas and facilities shall be apportioned according to carpet area :

Provided that were apportionment of cost according to carpet area is not; considered equitable, the society may with the approval of the Registrar realise the cost in such manner as it may consider fit.

Rule - 153. Entitlement by a member of a co-operative housing society to title orinterest in any land, house or apartment.

A member of a co-operative housing society shall not be entitled to any title or interest in any land, house or apartment unless he has made full payment towards the cost of such land, house or apartment as may be finally apportioned by the society.

Rule - 154. Circumstances under which a member of a co-operative housing society may resideoutside the house or apartment allotted to him.

A member of a co-operative housing society may under the following circumstances be allowed to reside outside the house or apartment allotted in his favour by a co-operative housing society:

(a)      if the member is transferred by his employer to any other place;

(b)      if the member is under the conditions of his service compelled to stay outside such as in a government quarter;

(c)      if the member is compelled to reside elsewhere due to reasons of his business or avocations;

(d)      if the member is compelled to reside elsewhere under such other circumstances as the board may approve.

Rule - 155. Quarterly statement to be furnished under sub-section (3) of section 88.

The statement to be furnished under sub-section (3) of section 88 shall be in Form XXX.

CHAPTER X AUDIT, INSPECTION AND INQUIRY

Rule - 156. Submission of annual return to the Registrar.

The annual return to be sent to the Registrar by a co-operative society under sub-section (3) of section 90 shall be in Form XV.

Rule - 157. Audit fees.

(1)     A co-operative society, other than a society dealing in goods, shall pay an audit fee calculated on the working capital on the last day of the co-operative year for which the audit fee will be due.