LexThe Bihar Self-Supporting Cooperative Societies Act, 1996
Bihar · state statute
Open in Lexace · Ask the AI about this actPage No. The Bihar Self-Supporting Cooperative Societies Act, 1996 Chapter- I Introduction Sections 1. Short title, extent and commencement 2. Definitions Chapter- II Cooperative Principles 3. Organisations which may be registered 4. Organisations which way be registered 5. Application for registration 6. Cooperative Society to be a body corporate 7. Display of name 8. Appointment of registrar Chapter- III Bye- laws 9. Bye- Laws 10. Amendment of bye-laws 11. Change of liability, transfer of assets and liabilities, division and amalgamation 12. Promotion of subsidiatry organisation 13. Creation of new organization with others Chapter- IV Union & Federation 14. Cooperative Union I Federations Chapter- V Management of Funds 15. Mobilisation of funds 16. Restriction on borrowings 17. Restriction on holding of equity 18. Disposal of surplus 19. Management of Deficit 20. Reserve and other funds 21. Investment of funds outside the business 22. Restriction on Contribution Chapter- VI Managemet 23. Membership 24. Restriction on services to non- members 25. General Body 26. Board 27. Powers and functions of the board 28. Term of office 29. Elections 30. Meetings 31. Staff Chapter- VII In formation 32. Accounts and records to be maintained 33. Audit 34. Special Audit 35. Filing of returns 36. Enquiry 37. Power to summon and examine persons and documents 38. Action on special Audit or enquiry Report Chapter- VIII Settlement of desputes 39. Constitution of Cooperative Tribunals 40. Settlement of disputes 41. Power of the Tribunal to order recovery Chapter- IX Offences & Penalties 42. Offences and Penalties Chapter- X Dissolution 43. Dissolution of Member 44. Dissolution of Tribunal 45. Appointment of liquidator 46. Duties of liquidator 47. Powers of liquidator 47. Final Account Chapter- XI Miscellalneous 49. Fee for services 50. Bar of jurisdiction 51. Rules 52. Removal of difficulty * State Govt. decisions ThE BIHAR sELFSU0RT COOPERATIVE soCIET% ACT, 1996 (No. 2 of 1997) An Act to provide for the volunta format0fl of ooperat Societ5 as AccOunta competlte selfreant business enterPr5es based on thrift, Self- help and mutual ad and owned, man aged and controld by members for the\r ecOn0ml and social betterment and for the matters connected thereWith or ncdent theret0 Be it enacted by the legislature of the State of Bihar in the 0y SeVenth year of ___ , the Republic of India as follows _______ ___ , __ __ ___ ___ ____ __ __ I 25-2 6 1992 I - . CHAPT — I 1. ShOd title extent and commenment (1) This Act may be called the Bihar 5fsuppo9 Gooperat Societies Act, 1996. (2) It extends to the whole of the State of Bihar. (3) It Shall come into force at once. 2. DefinitiOns. — in this Act, unless the context othetSe requires — (a) "State" means the State of Bihar; (b) "Board" means the Board of Directors of a Cooperatt 5ociety; (c) "By-laws" means the bye-laws of a registered Coopet 5ociety; (d) 'Chief executive" means an indiVidu who, subject to the superinteee control and direction of the board, has been entrusted with the 8flagement of the affairs of a Cooperative 5ociety (e) 0ooperative society" means an organization registered of deened to be registered under this Act; (f) oo perat1 basis" means the 0ooperative principles enumerated in section 3 (g) 'primary 0ooperate society" means a Cooperative 5 ociety whose member is of this Act; not a Cooperative SocietY (h) "Central Cooperative" means a Cooperative society which iS different from Federation and Union and which has any other 0ooperative 5ociety, and ,if the bye-laws so provides dividual5 as its members; (i) Federation means a Federation constituted under subsecti0n (2) of section 14 of this Act; 0) Union' means an Union constituted under sub-section (1) of section 14 of this Act; (k) "General body" means.. (i) in relation to Primary Cooperative Society, all the members of that Cooperative Society; (ii) in relation to a Central Cooperative Society, delegates of all the member Cooperative Societies, and, if the bye-laws so provide, individuals as its members; (iii) in relation to a Federation the delegates of all member, Cooperative Societies; (iv) in relation to the Union, the delegates of all the member Cooperative Federations and Cooperative Societies; (I) "General meeting" means a meeting of the general body of a Cooperav Society registered under this Act; (m) "Office-bearer" means a person elected or appointed by a Cooperative Sbcity to any office of-such Cooperative Society; 7n) "Registrar" means the Registrar of Self-suppoing Cooperative Societies appointed under Section 8 of this Act and includes any other person on whom all of any of the Powers of the Registrar under this Act are conferred; "family" means husband, wife, their unmarried daughters and dependent and dependent Sons; (p) "cooperative tribunal" means a tribunal constituted under section 39 this Act. C HAPTER/I COOPERA TIVE PRINCIPLES 3. Cooperative Principles.. Individuals or Cooperative Sociehes intending to form a Cooperative Society under this Act shall frame bye-laws conforming to the following Principles of Cooperation namely- (a) membership of a Cooperative Society shall be voluntary available without restriction of any social, politica' racial or religious discrimination, of all persons who can make use of its services and are willing to accept the responsibilities of membership; (b) Cooperative Societies are democratic organizaj0; their affairs shall be administered by persons elected or appointed in a manner agreed to by the members and accountable to them, Members of Cooperative Societies shall enjoy equal rights of voting (one member one vote) and paicipatjon in decisions affecting the Cooperative Societies of which they are members; (c) the economic results, arising out of the operations of a Cooperative Society belong to the members of that Cooperative Society and shall distributed in such a manner as would avoid Ofl member gaining at the expense of others which shall be achieved.. (i) by provision for development of the business of the Cooperative Society, (ii) by provision of common services, or (iii) by distribution among the members in propojon to their transactions with the Cooperative Society in addition to the distribution of dividend to the share..holders; (d) all Cooperative Societies shall make provision for the education of their members, office..bearers and employees and of the general public, in the principles and techniques of Cooperative, both economic and democratic; (e) all cooperative societies, in order to best see the interest of their members and their communities, shall actively cooperate in every practical way with ( J other cooperatives at local, national and international levels having as therein the achievement of unity of action by cooperators throughout the world. 4. Organisations which may be registered. — Only such an organization may be registered as a Cooperative Society under this Act which provide in its byelaws for the Social and economic betterment of its members through self-help and mutual air in accordance with the cooperative principles; Provide that the membership of such Cooperative Societies which enjoy special privileges under government policy and programmes by virtue of their membership being confined to special groups shall be restricted to members belonging to such special groups 1. Subs. By (Arndt.) Act 9 of 2002 5. Application for registration. — (1) (i) Where not less than ten individuals each being a member of a different family intend to form a cooperative Society, they, after framing bye-laws for this purpose on the basis of section 3 and in accordance with section 9, may apply for registration under this Act. (ii) Where two or more Cooperative Societies registered under this Act intend to form a central Co-operative Society, they after framing bye-laws for this purpose on the basis of section 3 and in accordance with section 9, may apply for registration under this Act. (iii) Where two of more Cooperative Societies registered under this Act intend to form a Cooperative Federation, they after framing bye-laws for this purpose on the basis of section 3 and in accordance with section 9, may apply for registration under this Act. (iv) Where two of more Cooperative Federation and such Cooperative Societies as are not the members of any Cooperative Federation, intend to form Cooperative union, they after framing bye-laws for this purpose on the basis of section 3 and in, accordance with section 9, may apply for registration under this Act. (v) Where a society registered under section 11 of the Bihar Cooperative societies Act, 1935 intend to convert itself into a Cooperative Society under this Act, it after framing bye-laws for this purpose on the basis of section 3 and accordance with section 9. may apply for registration under this Act. 1 ["(VI) Where State Government so decides to convert any class of Cooperative Societies registered under section 11 of Bihar Cooperative Societies Act, 1935 into a class of societies under this Act it shall within the period stipulated by the State Government, apply for registration under this Act after framing its byelaws for this purpose on the basis of section 3 and in accordance with section 9 of this act" (2) An application for registration shall be submitted to the Registrar. (3) Every such application shall be accompanied by — (a) two copied of the proposed bye-laws of the Cooperative society as adopted by the promotion members; (b) a list of names of members with their addresses, occupation and equity participation; (c) the list of members of the first board elected by the promotion members; (d) a true copy of the minutes of the meeting at which the bye-laws were adopted, duly signed by the chairperson; (e) In the case of a Society registered under section 11 of the Bihar Cooperative societies Act, 1935 and wishing to convert itself into a Cooperative Society under this Act evidence to show that the Society in not in possession of any share capital from government, and evidence also to show that the society in not in receipt of any government loans or guarantees at the time of applying for registration as a Cooperative Society under this Act or that it has been entered into a memorandum of understanding with the government for any such outstanding loans of guarantees; and (f) registration fee amounting to one per cent of the total authorized share capital by whatever mane called subject to minimum of one hundred rupees and a maximum of ten thousand rupees. 1. Added by (Amdt.) Act 9 of 2002 (4) The Registrar shall, if he is satisfied that — (a) the application is in conformity with the requirement of this Act, and (b) the proposed bye-laws are not contrary to the provisions of this Act register the Cooperative Society and also its bye-laws and communicate a certificate of registration and the original of the registered bye-laws signed and sealed by him within a period of ninety days from the date of submission of application, to the Chief promoter mentioned in the application. (5) If the conditions laid down in sub-section (4) are not fulfilled, the Registrar shall communicate the order of refusal together with the reasons thereof, within ninety days from the date of submission of application, to the Chief Promoter. In case no refusal in communicated within the said period, the Cooperative Society shall be deemed to be registered and in that event to Registrar shall send a certificate of deemed registration and the original copy of deemed registered bye-laws signed and sealed by him within a period of one month. (6) Where an order of refusal in received by the applicants under sub-section within the prescribed period, they may appeal against this to the Cooperative Tribunal within sixty days of communication of such order or within sixty days of communication of such order or within sixty days of the period prescribed for the communication of the certificate of deemed registration. The decision of the Tribunal shall be final in this regard. (7) Where a Cooperative Society is registered, the certificate of registration signed and sealed by the Registrar shall be conclusive evidence: Provided that where a Cooperative Society was earlier registered under the Bihar Cooperative Societies Act, 1935, such registration shall be deemed to be cancelled once a certificate of registration under this section is issued. 6. Cooperative Society to be a body corporate.- (1) The Cooperative Society shall be a body corporate by the name under which it is registered having perpetual succession and a common seal. The Cooperative Society shall be entitled to acquire, hold and dispose of property, to enter into contracts on its behalf, to institute and defend suits and other legal proceedings and to take all such steps necessary to achieve its objectives. (2) All transactions entered into good faith prior to registration, in furtherance of the purposes of the Cooperative Society shall be deemed to be transactions of the Cooperative Society after registration. (3) A Cooperative Society may be registered with Limited Liability and it shall have the word "Limited" as suffix to its name. 7. Display of name.- (1) Every Cooperative Society shall display its name and the address of its registered office and the words "registered under Bihar Self-Supporting Cooperative Societies Act, 1996" - (a) at every office or place at which it carries on business; (b) in all notices and other official publications; (c) on all its contracts, business letters, orders for goods, invoices, statements of accounts, receipts and letters of credit; and (d) on all bills of exchange, promissory notes, endorsements, cheques and others for money it signs or that are signed on its behalf. (2) The name of every Cooperative Society shall contain the words "Cooperative" and "Limited" 8. Appointment of Registrar. - (1) The State Government may appoint a person to be Registrar of Self-Supporting Cooperative Societies for the' State or any portion of it, and may appoint other officers to assist such Registrar. (2) The State Government may, by notification, confer on such other officers appointed under sub-section (1) to assist the Registrar, all or any powers of the Registrar under this Act. (3) The term of office of the Registrar shall normally be for a period of three years. CHAP TER-Ill BYE-LAWS 9. Bye -Laws.- (1) Except on such specific matters which the Act has provided the functioning of every Cooperative Society shall be regulated by its bye-laws subject to the provisions of this Act. (2) The bye-laws of the Cooperative Society may provide for the following matters (a) the name, address and area of operation of a Cooperative Society, (b) the objectives of the Cooperative Society explicitly (Stated as a common central need of the members), (c) the Cooperative principles as described in section 3, (d) the services to be provided to its members, (e) eligibility for obtaining membership, (f) procedure for obtaining membership, (g) conditions for continuing as member, (h) the time limit before which a potential member must seek and obtain membership in order to continue to use the services of the Cooperative Society. (i) procedure for withdrawal! transfer of membership, U) procedure for termination and cessation of membership, (k) rights of members, (I) fixation of minimum performance required annually of each members vis-à-vis use of services, financial commitments and participation in meetings in order to be eligible to exercise the rights of membership including the right of vote., (m) the consequences of default in payment of any sum due by a member, (n) the nature and amount of capital, it any, of the Cooperative Society, (o) the maximum capital to which a single member can subscribe, (p) the nature and extent of the liability of the members for the debts contracted by the Cooperative Society, (q) the sources and types of funds to be raised by the. Cooperative Society, (r) the purposes for which the funds may be applied, (s) the extent and conditions under which deposits, loans, debentures and other funds may be mobilised, (t) the condition and purposes for which state aid and aid form other financial institutions may be sought and obtained, (u) the manner of disposal of surplus, (v) the constitutions of various funds, reserves and their purpose, (w) the manner of convening general and other special meeting and quorum thereof, (x) the frequency of general meetings, (y) the role of general body and the matters to be placed before the general body, (z) the manner of amending bye-laws, (aa) the procedure for conducting elections, (bb) the procedure for conducting election in case the Cooperative Society fails to do so, (cc) the size and constitution of the board, (dd) eligibility for becoming director, (ee) conditions for retaining directorship, (if) the tenure of the directors, chairperson and other office-bearers, (gg) the procedure for removal of directors and for filling of vacancies, (hh) the manner of convening board meetings and quorum, (ii) the frequency of board meetings, (jj) powers and functions of the board, (kk) powers and functions of office-bearers including chair-person, (II) Powers and functions of the Chief-Executive, (mm) Penalties for acting against the interests of members and for non- fulfillment of duties by members, directors and staff, (nn) the appointment and role of auditor and procedure for conduct of audit where the Cooperative Society fails to make necessary arrangements and time limit for audit compliance, (oo) the authorisation of an officer or officers to sign documents and to institute and defend suits and other legal p roceedingsoflbehalfOtheC0oPerati' 1e society, (pp) the terms on which a Cooperative Society may deal with non-members, (qq) the terms on which a Cooperative Society may associate with other Cooperative Societies, (rr) the terms on which a Cooperative Society may deal with organizations other than Cooperative Societies, (ss) the rights, if any, which the Cooperative Society may confer on any Cooperative Society or other federations and the circumstances under which these rights may be exercised by the federations, (tt) the manner of disposal, of funds if the Cooperative Society is under liquidation, (uu) the accounting year for the Cooperative Society, (vv) transfer of shares and interest in the name of a nominee in case of death of a member, (ww)the manner of dissolution of the Cooperative society, (xx) restriction, if any, on service to non-members, (yy) organize self-help, groups of people living in its area to conduct education and training programme. (zz) Special measures for women, scheduled castes and scheduled tribes and other weaker sections including provision for their representation of the board. 10. Amendment of bye-laws. —(1) A Cooperative Society may amend any of the provisions of its bye-laws by a resolution of its general body, or by the representative of general body, where this exists of a majority of two-third members having voting right: Provided that no such resolution shall be passed unless atleast twenty clear days of written notice of the meeting has been given along with a copy of the proposed amendment to each member of the general body or representative general body, as the case may be, and such notice and proposed amendment is also displayed on the notice board of the Cooperative Society for a period of twenty days immediately preceding the date of the meeting: Provided further that the representative general body shall not alter any provision in the bye-laws relating to its own constitution and powers. (2) An application for the registration of the amendment shall be submitted to the Registrar within a period of thirty days from the date of resolution. (3) Every application submitted to the Registrar shall be signed by the chair-person and two members of the board and shall be accompanied by the following particulars :- (a) a copy of the resolution adopting the amendment, (b) the date of the general meeting at which the amendment was approved, (c) the date of the notice issued for the general meeting (d) the total number of members on the rolls of the Cooperative Society having the right of vote on the date of such general meeting. (e) the number of members having the right of vote present at such general meeting, and (f) the number of members who voted for the resolution. (4) The Registrar, if the proposed amendment is in consonance with the provisions of the Act, shall register the amendment within a period of ninety days from the date of receipt of the application. (5) The Registrar shall forward to the Cooperative Society within a period of fifteen days after registration, a copy of the registered amendment together with a certificate signed and sealed by him, and such certificate shall be conclusive proof that the amendment has been duly registered. (6) The Registrar, if the proposed amendment is not in consonance with the provisions of the Act, Shall communicate the order of refusal together with the reasons therefore to the Cooperative Society within a period of ninety days from the date of receipt of the application: Provide that no order refusing to register the amendment shall be passed except after giving the Cooperative Society an opportunity of making its representation. (7) Where no order of refusal is communicated sub-section (6) within the period specified in that sub-section, the amendment, shall be deemed to be registered, and in that event the Registrar shall send a certificate of deemed registration and the original copy of deemed registered amendment signed and sealed by him within a period of one month. 11. Change of liability, transfer of assets and liabilities, division, amalgamation. — (1) A Cooperative Society may, by a resolution of its general body, Change the extent of its limited liability. (2) A Cooperative Society may, by a resolution of its general body transfer it assets and liabilities, in whole or in part, to any other Cooperative Society which agrees to such transfer by a resolution of its general body. (3) A Cooperative Society may, by a resolution of its general body, divide itself into two or more Cooperative Societies. (4) Any two or more Cooperative Societies may, by a resolution of their respective general bodies, amalgamate themselves and a new Cooperative Society. (5) Every resolution of a Cooperative Society under this section shall be passed at its general meeting majority of total members with right of vote and such resolution shall contain all particulars of the liability, transfer, division, amalgamation as the case may be, (6) Where a resolution is passed under this section, the Cooperative Society shall give notice thereof together with a copy of the resolution to all its members and federation to which it is affiliated and creditors who may give their consent. Notwithstanding any bye- law or contract to the contrary any member, federation or creditor shall, during a period of one month from the date of service of the notice have the option of withdrawing their shares, deposits, loans or services as the case may be. (7) Any member, federation or creditor who or which does not exercise within the specified period the right under sub-section (6) shall be deemed to have assented to the resolution. (8) A resolution passed by Co-operative Society under this section shall not take effect until- (a) (i) all the members, federation and creditors have assented under sub-section (6) or are deemed to have assented to the resolution under sub-section (7), or (ii) all claims of the members, federation and creditors who have exercised the option referred under sub-section (6) within the period specified therein have been met in full or otherwise satisfied, and (b) (I) in the case of change of liability, amendment of the bye-laws of the Cooperative Society Concerned is registered or deemed to have been registered, or (ii) in the case of division or amalgamation the certificate of registration of the Cooperative Society or the Cooperative Societies as the case may be, is issued or deemed to have been issued. (9) When resolution passed by a Cooperative Society under sub-section (2) takes effect the resolution shall be a sufficient conveyance to vest the assets and liabilities in the transferee without any further assurance. (10) The registration of a Cooperative Society shall stand cancelled and the Cooperative Society Shall be deemed to have been dissolved and shall cease to exist as a corporate body- (a) when the whole of the assets and liabilities of such cooperative Society are transferred to another Cooperative Society, or (b) when such Cooperative Society divides itself into two or more Cooperative Societies. (11) Where two or more Cooperative Societies are amalgamate into a new Cooperative Society the registration of the Cooperative Societies so amalgamated shall stand cancelled and they shall be deemed to have been dissolved and shall cease to exist as corporate bodies. 12. Promotion of subsidiary Organisation.- (1) Any Cooperative Society may, by a resolution passed at general meeting by a majority of members present having voting right, promote one or more subsidiary organisations for the furtherance of its stated objectives, and such organistion or organisations may be registered under any, law for the time being in force, as agreed to by the general body. (2) The annual reports and accounts of any such subsidiary organization shall be placed before the general meeting of the promoting Cooperative Society every year. (3) Any subsidiary organization created under-section (1) shall exist only as long as general body of the Cooperative Society deems its existence necessary. 13. Creation of new organization with others.- Where the Collaboration between a Cooperative Society and any other organisation or organisation requires the creation of a new organisation , the new organisation may be registered as a company or a public society, a appropriate for the fulfillment of the objective with which it was created. CHAPTER—IV 14. Cooperative Union/ Federations.- (1) A Cooperative Union shall be registered in the State under this Act and it shall be known as the State Cooperative Union of Bihar. The Cooperative/Union shall be constituted consisting of the Cooperative Federations and such Cooperative Societies as are not the members of any Cooperative Federation. (2) Cooperative Federations consisting of Primary and Central Cooperative Societies having same nature of objects may be established and shall be eligible for registration under this Act: Provided that there shall be only one federation in the State for a class of primary and Central Cooperative Societies having same mature of objects. (3) For servicing their constituents and in accordance with their bye-saws, Union/Federations may perform the following functions :- (a) safeguard the observance of the Cooperative principles, (b) promote and organize Cooperative Societies and for this purpose frame model bye-laws and guide lines for framing various regulations and policies for consideration by Cooperative Societies, (c) Provide Cooperative training, education and information and propagate Cooperative principles, (d) undertake research and evaluation and assist in preparation of perspective development plans of member Cooperative Societies, (e) promote harmonious relations between member Cooperative Societies. (f) help member Cooperative Society in the settlement of dispute among themselves and between a Cooperative Society and its members, (g) represent the interests of member Cooperative Societies, (h) undertake business services on behalf of its members, (i) provide Cooperative and management development services to member Cooperative Societies including participation in board meetings where invited, (j) to prepare a panel of auditors and ensure timely conduct of annual audit in member Cooperative Societies, (k) ensure timely conduct of election in member Cooperative Societies, (I) assist member Cooperative Societies in regular conduct of general meeting, (m) evolve code of conduct for observance by member Cooperative Societies, (n) evolve viability norms for member Cooperative Societies, (o) provide legal aid and advice, (p) assist member Cooperative Societies in organising self-help groups of people living in area, (q) provide any other services, at the behest of member Cooperative Societies. (4) (a) A federation may request the board of a member Cooperative Society to convene a general body meeting of its members and shall request the board to do so where at least ten percent of the members of the member Cooperative Societies have requested the federation to do so. (b) The requisition shall contain the items to be included in the agenda and these shall be dealt with at the general body meeting. (c) The board of the member Cooperative Societies shall convene such a meeting thirty days of receipt of the requisition. (d) Where a member Cooperative Society fails to convene a general meeting within thirty days of receipt of a requisition to do so by a Federation, the board of the Federation may themselves call such meeting for dealing with such items as included in the requisition. (5) (a) General body of Federation shall consist of the delegates from the member Cooperative Societies. (b) The chair-person of a Cooperative Society shall ordinarily by the delegate of the next tier of Cooperative Society: Provided that if the chair-person is unable to represent owing to illness or other unavoidable reasons, he may nominate the Chief Executive or any other member of the board to be the delegate. (c) The delegate shall continue to represent his Cooperative Society in the next tier of Cooperative Society, Federation! Union as long as he remains in office in the member Cooperative Society. (6) The Cooperative Union may- (i) create and maintain the Cooperative education fund, (ii) represent the interest and welfare of all types of Cooperative societies at the district and State level. (iii) Promote new forms of Cooperative enterprise, (iv)undertake experimental projects towards the application of Cooperative ideology. (v) Liaison on half of and amongst Cooperative Societies, and (vi) serve as a date bank on Cooperation, CHAPTER-V 15. Mobilisation of funds. — A Cooperative Society may mobilize funds in the shape of share capital, deposits, loans and other contributions from its members to such extent and under such conditions as may be permissible under the bye-laws of the Cooperative Society: Provided that at the time of dissolution of a Cooperative Society the amounts due to the members shall be settled only after settlement of due to others. 16. Restriction on borrowings.- (1) A Cooperative Society may mobilise debentures, deposits, raise loans and receive grants from external sources to such extent and under such conditions as may be specified in the bye-laws. Deposits and loans raised form external sources, however, shall at no time exceed ten times the sum of member funds and organisational reserves less accumulated deficit, if any. (2) A Cooperative Society may accept funds/guarantees from the government of other financing institution for the fulfilment of its objectives on such terms and conditions as are mutually contracted, upon and such conditions may include the right of the government or other financier to nominate one expert on the board. 17. Restriction on holding of equity. — (1) No member in a primary Cooperative Society shall, at anytime, hold more than one-tenth of the paid up eqaity capital. (2) No Cooperative Society shall accept funds from the government by way of equity. 18. Disposal of surplus.- (1) In any year, a Cooperative Society shall, out of the surplus arising from transactions with members in that year, make deferred payment to members as patronage rebate, an amount not exceeding twenty-five percent of surplus and make payment of dividend on share capital not exceeding fifteen percent of surplus divided into the members according to their shares. (2) The balance surplus accruing from members and the entire surplus accruing from transactions with others, shall be utilized in the following manner:- (a) not less than twenty-five percent shall be transferred to a statutory reserve fund, (b) not less than twenty percent shall be transferred to a reserve for meeting unforeseen losses, (c) where the Cooperative Society is a member of the Cooperative Union, upto three percent may b transferred to a Cooperative Education Fund with the Cooperative Union, (d) bonus shall be paid to employees in accordance with the decision of the general body, (e) not less than five percent may be transferred towards a common good fund whose purpose is approved by the general body, (f) not more than five percent may e paid as contribution for any purpose connected with the development of the Cooperative movement. 19. Management of Deficit.- (1) Where a Cooperative Society is left with a deficit in any given year, the board shall place before the general body in the first following annual gen4era1 meeting, a detailed report on the causes of deficit and the manner in which the deficit is proposed to be met. (2) The general body of the Cooperative Society shall decide to have the deficit covered by setting it off against the amounts available in the deficit cover fund, and/ or by debiting the deficit to the account of the members in proportion to the services they had availed or were expected avail of the Cooperative Society during the year. 20. Resenie and other funds. — (1) A Cooperative Society may create statutory reserves and other funds for the promotion of the objects of the Cooperative Society. (2) Reserves and other funds shall be used for the purpose for which they were created when necessary but otherwise may be used in the business of the Cooperative Society. 21. Investment of fund outside the business.- Such of its funds as are not needed for us by a Cooperative Society may be invested or deposited outside its business- (a) in any union! federation of which it is a member, (b) in a local Cooperative bank, (c) in the equities of any other Cooperative Societies, (d) in any of the securities specified in section 20 of the Indian Trust Act, 1982, (e) in the total Postal Savings Bank. (f) in any of the non-speculative manner as provided in the bye-laws, 22. Restriction on contribution. — No Cooperative Society shall make a contribution either in money or in kind, either directly or indirectly to an organisation that has as an object the furtherance of the interests of a political party of any religious faith. CHAPTER— VI 23. Membership.- (1) Any person, who needs the services of the Cooperative Society, accept the responsibilities of membership and fulfils such other Conditions as may be specified in the bye-laws of the Cooperative Society. May be admitted as a member: Provide that the Cooperative Society is in position to extend its services to the applicant and that the applicant is not already a member of a Cooperative Society registered under this Act, or the Bihar Cooperative Societies Act, 1935 providing the same or similar services. (2) Membership shall be available without any discrimination on grounds of sex. (3) Admission of members and removal from membership shall be made in accordance with the procedure specified in the bye-laws only by an elected board or by the general body where such an elected board does not exist for the time being. (4) No Cooperative Society Shall, without Sufficient cause, refuse admission to any person duly qualified for membership under the bye-laws. VVhere admission is so refused, the decisiOn with the reasons therefore shall be communicated to such applicant within fifteen days of the date of the decision or within thirty days from the date of application for membership, whichever is earlier; Provide that if no such decision is communicated within thirty days of applying for membership then the person shall be deemed to have been admitted as a member of the Cooperative Society on the thirty-first day. (5) Where a person has of communication of such decision to the general body against the decision of the board. (6) Any applicant aggrieved by the decision of the general body may file a rev9ision within sixty days of communication of such decision before the Cooperative Tribunal. (7) A person admitted as a member may exercise the rights of membership, including the right to vote, only on fulfilment of such conditions as may be laid down from time to time in the bye-laws: Provide that a person shall have been a member for at least one year before being eligible to exercise the right of vote: Provided further that the above proviso shall not apply to the promoter members in the first year of registration of a Cooperative Society. 24. Restriction on services to non-members. — A Cooperative Society's services shall ordinarily by available only to members unless otherwise provided in the bye-laws. 25. General Body.- (1) Subject to the provisions of this Act and the bye-laws the ultimate authority of a Cooperative Society shall vest in its general body. (2) Where a Cooperative Society so desires, its bye-laws may provide for a representative general body drawn from the members to be constituted in such a manner and with such functions as specified in the byelaws. Provided that the representative general body shall not have the right to amend the bye-law of the Cooperative Society except those in relation to which the bye-laws have delegated the power of amendment to the representative general body. (3) Subject to the provisions of the Act, and of the bye-laws the following matters shall be dealt with by the general body- (a) election of directors of the board, (b) removal of directors of the board and filling up of vacancies, (c) consideration of the annual report presented by the board for being filed with the Registrar, (d) appointment and removal of statutory auditors and internal auditors, (e) consideration of the auditor's report and audited statement of accounts for being filed with the Registrar, (f) consideration of audit/special audit compliance report, (g) report on action taken on inquiry report under section 36, if any, (h) disposal of net surplus, (i) review of operational deficit, if any, (j) approval of the long term perspective plan and the annual operational plan, (k) approval of the annual budget, (I) creation of specific reserves and other funds. (m) review of actual utilization of reserve and other funds, (n) report on membership of the cooperative Society in other Cooperative Societies. (o) review of annual report and accounts of any subsidiary organisation, (p) appeal of a person whose application for membership has been rejected or whose membership has been terminated by the board. (q) appointment, reconstitution and disbanding of the Representative General Body, (r) remuneration payable to any Director or internal auditor in connection with his duties in that capacity or his attendance at related meeting, (s) membership of the Cooperative Society in union/federation. (t) Collaboration with other organisation, (u) amendment of bye-law, (v) formulation of code of conduct for the Directors and office, bearers, (w) note of admission and termination of members, (x) dissolution of the Cooperative Society. (y) such other functions specified in the bye-saws. 26. Board.- (1) The general body of a Cooperative Society shall constitute a board in accordance with the bye-laws. (2) The size of the board shall be in accordance with the bye-laws. Chief Executive shall be an ex-officio member of the board. (3) In addition to such criteria as may be specified in the bye-laws, a person shall be ineligible for being chosen as a director, if he- (a) has at any time lost the right to vote as a member as specified in the bye-laws, (b) loses the right to continue as member as specified in the bye-laws or (c) incurs any other disqualification specified in the bye-laws. (4) In addition to such criteria as may be specified in the bye-laws a person shall cease to be a director if the incurs any of the disqualifications specified in sub-section (3), (a) absents himself from three consecutive board meetings without leave of absence. (b) absents himself from three consecutive general body meeting without leave of absence, or or (c) is penalized under this Act. (5) In addition to such criteria as be specified in the bye-laws, the directors of the board shall incur disqualification for a period of 1[five year for being chosen as directors and shall be ineligible to continue as directors of any Cooperative Society if during their term as directors of a Cooperative Society- (a) they did not conduct elections within the time specified in the bye-laws and before the expiry of their term. (b) they did not conduct annual general body meeting within four months of closure of the Cooperative's accounting year or a requisitioned meeting of the general body, or (c) the did not place the audited accounts for the preceding financial year along with the reports of the auditors before the general body at its annual general meeting. (6) In order to be eligible for being chosen as a director of the board of a Cooperative Society which has been inexistence for more than two years, a member- (a) shall have been a voting member of the Cooperative society for at least two years immediately preceding the year of election. (b) shall have attended two general body meeting of the Cooperative Society immediately preceding the elections, and [xxx] (7) Every director and employee of a Cooperative Society while exercising his powers and discharging his duties shall- (a) act honestly and in good faith and in the best interests of the Cooperative Society, and (b) exercise such due care, diligence and skill as a reasonably person would exercise in similar circumstances. (8) A director or employee who is guilty of misappropriation, breach of trust or any other omission or commission resulting in loss to the Cooperative Society, shall be personally liable to make good that loss, without prejudice to such criminal action to which he is liable under the law. 27. Powers and functions of the board.- (1) The board shall in accordance with the bye-laws, be the authority to- (a) admit and terminate membership. (b) elect the chair-person and other office-bearers, (c) remove form office the chair-person and other office bearers. (d) appoint and remove the chief executive. (e) fix staff strength, (f) frame policies concerning (I) organisation and provision of services to members, (ii) qualifications, recruitment, service conditions and other matters related to its employees. (iii) mode of custody and investment of funds, (iv) manner of keeping accounts, (v) mobilization, utilization and investment of various funds, (vi) monitoring and management of information system including statutory returns to be filed, (vii) such other subjects and matters necessary for the effective performance of the Cooperative Society. (g) place the annual report, annual financial statements, annual plan and budget for the approval of the general body, (h) consider audit and compliance reports and place these before the general body. (I) review membership in other Cooperative Societies. (j) undertake such other functions as delegated by the general body. 1. Sub. for the word three' by (amdt.) Act 9 of 2002 2. "Clause (c)' of sub-section 6 repealed by ibid. (2) The chair-person shall be elected by the board from among the elected members and shall, in accordance with the bye-law- (a) preside at meetings of the board and the general body meeting. (b) have a second vote in the event of equality of votes on any matter being decided upon by the board except in matter of election. (c) exercise such other powers as delegated by the board specified in the policies framed or resolutions adopted by the board. 28. Term of office.- The term of office of the director of the board, or where the bye-laws provide for re
Excerpt shown. Open the full act in Lexace.