The Chhattisgarh Co-operative Societies Act, 1960

 - 1 - 
THE CHATTISGARH 
CO-OPERATIVE SOCIETIES ACT, 1960 
[No. 17 of  1961] 
 
Received the assent of the President on 28-04-1961, the assent first 
published in M.P. Gazette on 12-05-1961. 
An act to organise and develop co -operatives as democratic 
instruments and peo ple’s institutions based on self help  mutual aid for 
curbing exploitation and ensuring socio -economic development of 
people with particular emphasis on weaker sections of society. 
 
           Be it enacted by the Madhya Pradesh Legislature in the Eleventh 
Year of the Republic of India as follows:- 
 
CHAPTER I 
PRELIMINARY 
 
Short title, extent 
and commencement. 
1. (1) This Act may be called the Chhattisgarh Co -
operative Societies Act, 1960 (No. 17 of 1961). 
 
  (2) It extends to the whole of Chhattisgarh. 
 
  (3) It shall come into force on such date as the State 
Government may, by notification, appoint.  
 
Definitions. 2.  In this act, unless the context otherwise, requires,- 
 
   (a)  “Additional Registrar”  means an Additional 
Registrar of Co -operative Societ ies appointed 
under section 3; 
 
   (a-i)   “Apex Society” means a Society which has as 
its members more than one Federal or Central 
societies and whose principal object is to 
provide facilities for operations of other 
societies affiliated to it and whose area of 
operation extends to the whole State of 
Chhattisgarh;  
 
   (b) “Assistant Registrar”  means an Assistant 
Registrar of Co -operative Societies appointed 
under section 3; 
   (b-i) “Area of operation”  means the area from 
which the membership is drawn or as specified 
in the byelaws of the society; 
 
 - 2 - 
   (c)  “Bye-laws” means the bye -laws registered or 
deemed to have been registered under this Act 
and for the time being in force, and includes a 
registered amendment of the bye-laws; 
 
   (c-i)   “Central Society” means a District  Co -
operative Agriculture and Rural Development 
Bank or any other society whose area of 
operation is confined to a part of the State and 
which has as its object the promotion of the 
objects of the member societies, and which 
has at least five societies as its members; 
   
 
(c-ii) “Central Co -operative Bank”  means a 
resource society registered or deemed to be 
registered under this Act, which is either 
licensed under the Banking Regulation Act, 
1949 (10 of 1949) or permitted by the R eserve 
Bank of India to do banking business till so 
licensed, and 
 
(i)      has area of operation confined to a part of the 
State; and 
 
(ii)    has as its principal object, the creation of funds 
and the obtaining of credit, goods or services 
for and provid ing credit, goods or services as 
loan to Co -operative Societies affiliated to it 
for agriculture, industrial and other allied 
purposes; 
 
   (c-iii)  “Company” means a Company as defined in 
section 3 of the Companies Act, 1956 (1 of 
1956); 
   (c-iv) “Co-operative Union”  means a registered 
society which has as its principal object the 
undertaking of co -operative education, 
propaganda, training and extension of co -
operative services; 
   (d)  “Committee” means the Board of a 
management by whatever name calle d 
constituted under section 63; 
   (d-i) “Co-operative Bank”  means a State Co -
operative Bank, a Central Co -operative Bank 
and a Primary Co -operative Bank, registered 
or deemed to be registered under the Act; 
 - 3 - 
   (e)      “Co-operative Society with limite d 
liability” means a society having the liability 
of its members limited by its bye -laws to the 
amount, if any, unpaid on the shares 
respectively held by them or to such amount 
as they may, respectively, undertake to 
contribute to the assets of the society  in the 
event of its being wound up; 
 
   (e-i)    “Chief Executive”  means an individual 
appointed under section 71 and who subject to 
superintendence, control and direction of the 
Committee has been entrusted by the 
Committee with the management of the a ffairs 
of the co-operative; 
 
   (g)      “Consumers’ Society”  means a society 
formed with the object of obtaining or 
producing and processing and distributing 
goods to or performing other services for its 
members, as well as for other customers and 
dividing amount its members and customers in 
a proportion as may be laid down in the bye -
laws of such society, the profits accruing from 
such supply, production processing and 
distribution;  
   (g-i)   “delegate” means a person elected by a group 
of individual members to represent them in the 
general body of the society in accordance with 
the bye-laws of the society; 
 
   (g-ii)  “Deposit Insurance and Credit Guarantee 
Corporation” means the Deposit Insurance 
and Credit Guarantee Corporation established 
under the Deposit Insurance and Credit 
Guarantee Corporation Act, 1961 (No 47 of 
1961); 
   (h)   “Deputy Registrar” means a Deputy Registrar 
of Co -operative Societies appointed under 
section 3; 
   (hh)  “Development Bank”  means a District Co -
operative Agriculture and Rural Development 
Bank or the Chhattisgarh State Co -operative 
 - 4 - 
Agriculture and Rural Development Bank 
registered or deemed to be registered under 
this Act; 
 
   (i)      “Family” means a person, his spouse, his 
children, dependent on him and his o ther 
relations dependent on him and jointly 
residing with him; 
 
   (j) “Farming Society” means a registered society 
formed with the object of promoting 
development  of land, better methods of 
cultivation and promotion of new agricultural 
technology, and i ncludes a better farming 
society, tenant farming society, collective 
farming society, joint farming society, 
irrigation society, contract farming society and 
crop promotion society. 
 
   
 
(k) “Federal Society”  means a society of which 
not less than fifty p ercent of the share capital, 
excluding Government share capital is held by 
societies; 
 
   (l) “Financing Bank”  means a society, the 
objects of which include the creation of funds 
to be lent to other societies or its individual 
members, and which includes a Development  
Bank and the State Co-operative Bank; 
 
   (m)  “General Society” means a society not falling 
under any of the heads (i) to (x) specified in 
sub-section (1) of section 10; 
 
   (n) “Housing Society”  means a society formed 
with the object of providing its members with 
residential accommodation; 
 
   (n-i) “Industrial Society”  means a society formed 
with the objects of promoting development of 
weavers, carpenters, metal workers, shoe 
makers or any other Society which aims at 
producing finished goods from raw materials 
of any kind; 
 
 - 5 - 
   (o)    “Joint Registrar” means a Joint Registrar of 
Co-operative Societies appointed under 
section 3; 
 
   (p)    “Liquidator” means a person appointed under 
section 70; 
 
   (q)   “Marketing Society”  means a soci ety formed 
for the purpose of marketing agricultural or 
other produce and including among its objects, 
the supply of the requisites of such production; 
 
   (r)   “Member” means a person joining in the 
application for the registration of a society or a 
person admitted to membership after 
registration in accordance with this Act, the 
rules and the bye -laws applicable to such 
society and includes the State Government 
when it subscribes to the share capital of a 
society; 
 
   (s)    “Multi-purpose Society”  means a society 
which includes amongst its objects any of the 
primary objects specified in any two or more 
of the clauses (g), (n), (v) and (y); 
 
   (t)     “Nominal Member” means a person admitted 
to membership of a society under section 20; 
 
   (t-i)     
   (u)  “Other backward classes”  means category of 
persons belonging to backward classes as 
notified by the State Government; 
 
   (u-i)    “Primary Society” means a society which is 
neither an Apex Society nor a Central Society; 
 
   (u-ii) “Primary Agri culture Credit Cooperative 
Society” means a society organized with the 
main objective of making credit available for 
agriculture production and includes a Primary, 
Service Cooperative Society and Adimjati 
Sewa Sahakari Samiti; 
 
   (u-iii) “Primary Co -operative Bank”  means a 
resource society other than a village or urban 
resource society not registered as bank, the 
 - 6 - 
objects of which include creation of funds to 
be lent to, and obtaining credit to be extended 
to members and which is licensed under 
Banking Regulation Act, 1949 (10 of 1949) or 
permitted by the Reserve Bank of India to do 
banking business till so licensed; 
 
   (v)    “Producers’ Society” means a society formed 
with the object of producing and disposing of 
goods as a collective property of its m embers 
and includes a society formed with the object 
of the collective disposal of the labour of its 
members; 
   (w)   “Processing Society” means a society formed 
with the object of producing goods by 
mechanical or manual process and includes an 
industrial society and a society for the 
processing of agricultural commodities; 
 
   (x)  “Registrar” means the Registrar of Co -
operative Societies appointed under section 3; 
 
   (x-i)  “Representative” means a member of the 
society to represent the society in ot her 
societies; 
   (x-ii)  “Reserve Bank” means the Reserve Bank of 
India established under the Reserve Bank of 
India Act, 1934 (No. 2 of 1934): 
 
   (y)    “Resource Society”  means a society formed 
with the object of obtaining for its members 
the credit, goods or services required by them 
and includes a service society and a primary 
credit society; 
 
   (y-i) “Returning Officer”  means an officer 
appointed by the Registrar  general or special 
order for performing the duties of a Returning 
Officer under this Act or the rules made there 
under and includes an officer subordinate to 
the Returning Officer nominated in writing by 
him to perform the duties of Returning 
Officer; 
 
   (y-ii) “Scheduled Area”  means the area which has 
been declared under the Scheduled A rea (State 
of Bihar, Gujrat, Madhya Pradesh & Orissa ) 
 - 7 - 
Order, 1977; 
 
   (z)  “Society” means a co -operative society 
registered or deemed to be registered under the 
Act; 
 
   (z-i)  “Specified Office”  means the office of the  
President or Vice -president wha tever the 
designation may be; 
 
   (aa) “State Co -operative Bank”  means the 
Chhattisgarh State Co -operative Bank 
Limited; 
 
   (bb) “Student” means a person studying in any 
educational, vocational or training institution; 
 
    
    
    
    
    
   
 
   
 
   
 
 
 
   
 
   
 
   
 
   
 
 
    
 
 
 
 
 
 
 
 
 
 
CHAPTER II 
RIGISTRATION 
Registrar and other 3. (1) (1) The State Government shall appoint a person  to 
 - 8 - 
officer. be the Registrar of Co -operative Societies  for the 
State and may appoint one or more officers of t he 
following categories to assist him, namely:- 
 
(a) Additional Registrar of Cooperative Societies; 
 
(b) Joint Registrar of Cooperative Societies; 
 
(c) Deputy Registrar of Cooperative Societies; 
 
(d) Assistant Registrar of Cooperative Societies; 
 
(e) Such other categories of officers as may be 
prescribed. 
 
  (2)  The officer appointed to assist the Registrar 
shall, within such areas as the State 
Government may specify, exercise such 
powers and perform such duties conferred and 
imposed on the Registrar by or under this Act, 
as the State Government may, by special or 
general order, direct:  
 
Provided that no officer other than the 
Additional Registrar or the Joint Registrar shall be  
Directed to exercise the powers to hear appeals 
under section 78 
 
  (3) The officers appointed to assist the Registrar shall be 
subordinate to him and shall work under his general 
guidance, supervision and control. 
 
Societies which may 
be registered. 
4.  Subject to the provisions of this Act, a society which 
has as its objects the promotion of the  economic 
interest of its members or their general welfare in 
accordance with co -operative principles or a society 
established with the object of facilitating the 
operations of such a society, may be registered under 
this Act. 
 
Registration of 
societies with 
limited or unlimited 
liability. 
5.  A society may be registered with limited or 
unlimited liability; 
           Provided that unless the State Government by 
a general or special order otherwise directs, the 
liability of a society of which another socie ty is a 
member shall be limited. 
Conditions of 
registration. 
6. (1) No society, other than a society of which another 
society is a member, shall be registered under this 
Act unless it consists of at least twenty persons 
 - 9 - 
competent to contract under section  11 of the Indian 
Contract Act, 1872( 9 of 1872) and belonging to 
twenty different families, not being near relations 
and, where the objects of the society include the 
creation of funds to be lent to its members, unless 
such persons, save where the Registr ar by general or 
special order otherwise directs, reside in the same 
town or village or in a compact group of villages. 
 
           Provided that a society formed exclusively for 
the benefit of students may be registered, 
notwithstanding that the members of such society 
may not have attained the age of majority according 
to the law to which they are subject: 
 
            Provided further that the Registrar may relax 
the condition of minimum membership to that 
society which is organized for the welfare of the 
employees of any organization / establishment. 
 
            Provided also that in case of a primary 
society, there shall be atleast 33 per cent, women 
members at the time of registration: 
           Provided also that the Registrar may, for 
sufficient reasons, relax the conditions of the 
prescribed percentage of women members, 
 
  (2) The word “limited” or its equivalent in any Indian 
language shall be the last word in the name of every 
society registered with limited liability under this 
Act. 
 
Application for 
registration. 
7. (1) For purposes of registration, an application to 
register a society shall be made to the Registrar in 
the prescribed form and shall be accompanied by 
four copies of the proposed bye -laws of the society. 
The person by whom or on whose behalf such 
application is made, shall furnish such information 
in regard to the society, as the Registrar may require. 
 
  (2) (2) The application shall be signed,- 
(a) in the case of a society of which no other 
society is a member, by at least ten p ersons 
qualified in accordance with the requirements 
of section 6: and 
(b) in the case of a society of which a member is 
a registered society, by a duly authorized 
person on behalf of every such registered 
 - 10 - 
society and where all the members of the 
society are n ot registered societies, by ten 
other members, or when there are less than 
ten  other members, by all of them. 
 
Power of Registrar 
to decide certain 
questions. 
8.  Where in connection with the formation, registration 
or continuance of a society or the adm ission of a 
person as a member of a society any question arises 
whether a person is an agriculturist or not or whether 
any person resides in a particular area or not or 
whether any person belongs to any particular class 
or occupation or not or such other q uestion 
pertaining to the eligibility of any person to become 
a member of a society, such question shall be 
decided by the Registrar and his decision shall be 
final. 
Registration. 9. (1) If the Registrar is satisfied that a society has 
complied with the p rovisions of this  Act and the 
rules and that its proposed bye -laws are not contrary 
to this Act or the rules, he may register the society 
and its bye -laws with such modifications as he may 
consider necessary: 
           Provided that no society shall be registered, if 
in the opinion of the Registrar, it is likely to be 
economically unsound or is likely to have an adverse 
effect upon any other society. 
 
  (2) Where the Registrar refuses to register a society or 
its bye -laws he shall communicate the order or 
refusal together with reasons therefor to the first 
signatory to the application. 
  (3) The Registrar shall take a decision within ninety 
days from the date of receipt of an application for 
registration of a society: 
          Provided that where there  is a failure on the 
part of the Registrar to dispose of such application 
within the period aforesaid the Registrar shall within 
the period of fifteen days form the date of expiration 
of that period, refer the application to the next higher 
officer and whe re the Registrar himself is the 
Registering officer to the State Government, who or 
which, as the case may be,  shall dispose of the 
applications within two months from the date of its 
receipt and on the failure of such higher officer or 
State Government, as the case may be, to dispose of 
 - 11 - 
the application within that period, the society and  its 
bye laws shall be deemed to have been registered. 
 
  (4) The Registrar shall maintain register of societies 
registered or deemed to be registered under this Act. 
 
Classification of 
Societies. 
10. (1) The Registrar shall classify all societies under one or 
more of the following heads, namely :- 
(i) Consumers’ Society; 
(ii) Farming Society; 
(iii) Federal Society; 
(iv) Central Society; 
(v) Housing Society; 
(vi) Marketing Society; 
(vii) Multipurpose Society; 
(viii) Producers’ Society; 
(ix) Processing Society; 
(x) Resource Society; 
(xi) General Society. 
(xii) Industrial Society; 
 
           Provided that a society formed with the object 
of facilitating the operations of any particular class 
of societies shall be classified as a soc iety of that 
class 
  (1-a) The Registrar may further classify the societies 
falling under any of the heads specified in sub -
section (1) under the following heads, namely:- 
(a) Apex Society 
(b) Central Society 
(c) Primary Society           
 
  (2) The Registrar for r easons to be recorded in writing 
may alter the classification of any society from one 
head to another. 
  (3) The decision of the Registrar in respect of 
classification of societies shall be final. 
Amendment of   
bye-laws of society. 
11. (1) No amendment of the bye -laws of a society shall be 
valid until the same has been registered under this 
Act, for which purpose four copies of the proposed 
amendment shall be forwarded in the prescribed 
manner to the Registrar. 
 
  (2) If the Registrar is satisfied that the proposed 
amendment is not contrary to the Act or the rules 
and is not against the aims and objects of the Society 
 - 12 - 
or any of the existing bye -laws he may register the 
amendment. 
 
  (3) The Registrar shall not refuse to register an 
amendment of the bye -laws without giving an 
opportunity to the applicant society, for being heard. 
If he decides to refuse to register an amendment, he 
shall communicate the order of refusal together with 
reasons therefor e to the society within forty -five 
days from the date of receipt of the proposal: 
 
           Provided that, where there is a failure on the 
part of the Registrar to dispose of such application 
within the period aforesaid, the Registrar shall, 
within a period of fifteen days from the date of 
expiration of that  period, refer the application to the 
next higher officer and where the Registrar himself 
is the registering officer, to the state Government, 
who or which, as the  case may be, shall dispose of 
the application within two months from the date of 
its receipt and on the failure of such higher officer or 
the State Government, as the case may be, to dispose 
of the application within that period, the amendment 
of the byelaws shall be deemed to have been 
registered. 
 
Power to direct 
amendment of     
bye-laws. 
12. (1) Not-withstanding anything contained in this Act, or 
the rules or byelaws, on the request of more than 
fifty per cent of the members of the society or if the 
Registrar considers that an amendment of the 
byelaws of society is necessary or desirable in the 
interest of such society, he may, by an order in 
writing to be served on the society in the prescribed 
manner, require the society to make the amendment 
within sixty days. 
 
  (2) If the society fails to make the amendment within 
the time specified by the Registrar, the Registrar 
may after giving the society an opportunity of being 
heard and after soliciting the opinion of such Apex 
Federal Society, as may be notified by the State 
Government, register such amendment and issue a 
certified copy there of to such society: 
 
              Provided that the provisions of this section 
shall not apply in the case of Urban Co -operative 
 - 13 - 
Banks. 
Change of name. 13.  A society may, by an amendment of its bye -laws, 
change its name, but such change shall not affect 
any right or obligation of the society, or of any of its 
members, or past members, or deceased members, or 
render defective any legal proceedings by or against 
the society, and any legal proceedings which might 
have been continued or commenced by or against 
the society by its new name. 
 
Certain certificates 
to be conclusive 
evidence. 
14. (1) Where a society is registered or deemed to be 
registered under this Act, the Registrar shall issue a 
certificate of registration signed by him and such 
certificate shall be conclusive evidence that the 
society therein mentioned has been duly registered 
unless it is proved that the registration of the society 
has been subsequently cancelled: 
 
           Provided that where a society is deemed to be 
registered under this Ac t, the Registrar shall issue a 
certificate of registration within sixty days from the 
date on which it was deemed to be registered. 
  (2) No society shall commence business unless it has 
obtained a certificate of registration under sub -
section (1) and eve ry member of such society 
carrying on business in contravention of this sub -
section shall be severally liable for all liabilities 
incurred in such business. 
 
  (3) When the Registrar registers an amendment of the 
bye-laws of a society under section 11 or section 12 
he shall issue to the society a copy of the 
amendment registered by him, which shall be 
conclusive evidence that the same is duly registered.  
  (4) Where a society changes its name under section 13, 
the Registrar shall amend the certificate of 
registration accordingly, which shall be conclusive 
evidence that the change of name is duly registered. 
 
Change of liability 
of society from 
limited to unlimited 
or vice-versa. 
15. (1) Subject to the provisions of section 11, a society 
may by an amendmen t of its bye -laws change its 
liability from limited to unlimited or from unlimited 
to limited. 
  (2) No such amendment shall be registered by the 
Registrar unless he is satisfied that,- 
 - 14 - 
 
(i) Twenty-one day’s notice has been given to 
every member of the socie ty and to any 
person or class of persons whose interest 
may, in the opinion of the Registrar, be 
affected by the change; and 
 
(ii) With respect to every such member or person 
who, in the opinion of the Registrar, is 
entitled to notice,- 
 
(a) either his assent has b een obtained to 
the change or is deemed to have been 
obtained by virtue of his failure to 
object within twenty one days from the 
date of the notice, 
 
(b) if he objects;  
(i) he is allowed to withdraw his 
share if he is a member, or 
 
(ii) that his debt or claim has been  
discharged or has been 
determined or has been secured 
to the  satisfaction of the 
Registrar within three month 
from the date of  receipt of 
objection if he is a creditor: 
 
          Provided that the Registrar may in the case of 
any person or class of persons, for special reasons, to 
be recorded, dispense with the notice required by 
this sub-section. 
 
Reorganization of 
Societies. 
16. (1) In this section,- 
(a) “affected society” means a society 
which decides to reorganize itself in any 
of the manners specified  in sub -section 
(2); and 
(b) “resulting society” means a society ,– 
(i) which is formed as a result of 
amalgamation under clause (i) of 
sub-section (2) or 
(ii) to which the assets and liabilities of 
the affected societies are 
transferred in whole or in part 
under clause (ii) sub-section (2); or 
 - 15 - 
(iii) which is formed as a result of 
division under clause (iii) of sub -
section (2); or 
(iv) which is the result of change of 
class as provided in clause (iv) of 
sub-section (2). 
 
  (2) A society may, by resolution passed by two -thirds 
majority of the members present and voting at a 
special general meeting held for the purpose, decide 
to reorganize itself by- 
 
(i) amalgamating itself with another society; or 
(ii) transferring its assets and liabilities in 
whole or in part to any other society; or 
(iii) dividing itself into two or more societies; or 
(iv) converting itself into a class of society, the 
object of which is materially different from 
that under which it has been classified 
under the Act: 
 
Provided that no such decisions shall take 
effect unless it is approved by the Registrar; 
Provided further than in case of a Co -
operative Bank, the Registrar shall not give his 
approval save with the previous sanction in writing 
of the Reserve Bank; 
  (3) Notwithstanding anything contained in sub -section 
(2) where the Registrar is satisfied that it is essential 
in the public interest or in the interest of the 
members of the affected societies or necessary to 
secure the proper management of any society, he 
may direct that any society or societies shall 
reorganize itself or themselves in any one or more of 
the modes indicated in sub-section (2): 
 
      Provided that, in the case of a Co -operative 
Bank, the Registrar shall not issue any direction save 
with the previous sanction in writing of the Reserve 
Bank; 
          Provided further that before a final order 
under this sub -section is passed by the Registrar 
every society concerned shall be given an 
opportunity of expressing its opinion on the 
reorganization proposals. 
  (4) The procedure for reorganization of a so ciety in 
accordance with the decision under sub -section (2) 
 - 16 - 
or the direction of the Registrar under sub -section 
(3), as the case may be, shall be such as may be 
prescribed. 
 
  (5) If any such reorganization under sub -section (2) or 
(3) is likely to affect  in any manner the interest of 
any person, notice thereof shall be given to all such 
persons and every such person shall be given an 
option, to be exercised within a month from the date 
of the issue of such notice, of either becoming a 
member of the result ing society or societies or of 
demanding the payment of the share or interest or 
dues in respect of the affected society, as the case 
may be. 
 
  (6) No reorganization shall be final until the assent of 
every such person whose interest is likely to be 
affected, has been obtained or deemed to have been 
obtained by virtue of his failure to exercise the 
option given to him, and further, unless all the 
claims of persons who have exercised the option of 
demanding the payment of their shares or interests 
or dues under sub-section (5) have been met in full. 
 
  (7)  Every resulting society under this section shall have 
such constitution, property, powers, rights, interests, 
authorities, duties and obligations as may be 
specified in the scheme of reorganization an d every 
such scheme of reorganization may contain such 
consequential, incidental and supplemental 
provisions as may, in the opinion of the Registrar, be 
necessary to give effect to such scheme. 
 
  (8) Notwithstanding anything contained in the Transfer 
of Property Act, 1882 (4 of 1882) or the Indian 
Registration Act, 1908 (16 of 1908), a resolution of 
a society approved by the Registrar under sub -
section (3) shall be sufficient conveyance to vest the 
assets and liabilities of each affected society in the 
resulting society or societies concerned, such vesting 
being subject only to the provisions of the scheme of 
reorganization. 
 
  (9) The reorganization of societies shall not in any 
manner, whatsoever affect any right or obligation of 
 - 17 - 
the resulting society o r societies or render defective 
any legal proceedings by or against the society or 
societies and any legal proceedings that might have 
been continued or commenced by or against the 
society or the societies, as the case may be, before 
the reorganization may  be continued or commenced 
by or against the resulting society or societies. 
 
  (10) Where any two or more societies have been 
amalgamated or a society has been divided or 
converted, the registration of such society or 
societies shall be deemed to have be en cancelled on 
the date of registration of the amalgamated society 
or of the converted society or of the new societies 
into which the society may have been divided. 
 
  (11) Where a development bank has been reorganized by 
amalgamation with a central ban k, the amalgamated 
bank shall in respect of all transactions relating to 
the development bank business made on and after 
such amalgamation be deemed to be a development 
bank within the meaning of the law relating to 
development bank for the time being in force. 
Explanation.- For the purposes of this 
section “Central Bank” means a society with the 
words “Central Bank” or “District Bank” as part of 
its name and whose main object is to finance 
societies which are members of it and lie within a 
specified area. 
 
  (12) Every scheme of such reorganisation shall be 
published in the official Gazette for general 
information. 
 
Collaboration by 
Societies. 
16-A.  Any society may, enter into the collaboration with 
any Government Undertaking or any undertaking 
approved by the State Government for carrying on 
any specific business including industrial 
investment, financial aid or marketing and 
management expertise. 
 
Partnership of 
Societies. 
16-B  Any two or more societies may by resolution passed 
at general meeting by a majority of members present 
and voting in each such society enter into a contract 
of a partnership for carrying out any specific 
business permissible under the byelaws on such 
 - 18 - 
terms and conditions as may be mutually agreed 
upon. Where such partnership re quires creation of a 
new organization, the participating society shall be 
its members. 
 
Government’s 
power to make 
scheme of 
reorganization in 
the public interest. 
16-C (1)  Notwithstanding anything contained in this Act or 
the Rules made thereunder, if t he State Government, 
on receipt of a report from the Registrar or 
otherwise, is satisfied that in the public interest it is 
necessary to reorganize any society or societies for 
the purpose of securing proper implementation of 
development programmes, the St ate Government, as 
it may deem necessary, may make such scheme of 
reorganisation and issue orders to implement above 
scheme: 
 
Provided that in case of a Co -operative Bank, 
prior sanction in writing of the Reserve Bank shall 
be necessary.  
 
  (2) There sh all be the provisions in scheme of 
reorganisation regarding :-  
(a) Method of reorganization; 
(b) Procedure for reorganization; 
(c)Membership, registration, management, assets 
and liabilities, powers, rights, interests, duties, 
staff and conditions of empl oyment of such 
society or societies which are made after 
reorganisation ; 
(d) Such other consequential, incidental and 
supplementary provisions as may be necessary; 
   (e) Any other subject as may be deemed necessary 
by the State Government. 
  (3) The St ate Government may modify or cancel any 
reorganisation scheme made under sub-section (1). 
 
  (4) The provisions regarding every reorganisation 
scheme and the orders issued by the State 
Government shall be binding upon the interested  
parties.  
 
  (5) Every scheme of such reorganisation shall be 
published in the official Gazette for general 
information. 
Compromise or 
arrangement for 
17. (1) Notwithstanding anything contained in this Act, or 
the ru les made thereunder where a compromise or 
 - 19 - 
repayment of 
liabilities and 
reconstruction of 
societies. 
arrangement is proposed between.-  
(a) a society and its creditors or any class of 
them, and  
(b) a society and its members, the Registrar may 
on the application of the society or of any 
member or of any creditor o f the society or, 
in the case of a society which is being wound 
up by the liquidator, order a meeting of the 
members, or creditors or both, as the case 
may be, to be called, held and conducted in 
such manner as may be prescribed: 
 
             Provided that the Registrar may, on his own 
motion, order such a meeting to be called for the 
purpose of affecting a compromise or arrangement. 
 
  (2) If a majority in number representing three -fourths of 
the members or three -fourths of the total amount of 
valuation due to creditors, as the case may be, 
present and voting in person at the meeting agree to 
any compromise or arrangement the compromise or 
arrangement shall, if confirmed by the Registrar, be 
binding on all members or all the creditors, as the 
case may b e, and also on the society, or in the case 
of a society which is being wound up, on the 
liquidator; 
 
             Provided that the Registrar shall not confirm 
a compromise or arrangement unless he is satisfied 
that all the members or creditors, as the ca se may be, 
whose interests are affected by such compromise or 
arrangements, had notice of such meeting; 
 
             Provided further that in case of Co -operative 
Bank the Registrar shall not confirm the 
compromise, or arrangement, save with the previous  
sanction in writing of the Reserve Bank. 
 
  (3) When an order canceling a meeting is passed under 
sub-section (1) or the proviso thereof for considering 
any compromise or arrangement between a society 
and its creditors or any class of them, the Registra r 
may give notice of such order to a Civil Court in 
which proceedings, whether instituted before or after 
the order, in respect of any liability of the society 
due to a creditor to whom a copy of the order is 
 - 20 - 
posted, are pending and on receipt of such noti ce the 
Civil Court shall stay the proceedings, If no such 
compromise of arrangement is confirmed under sub -
section(2) the Registrar shall inform the Civil Court 
accordingly and the proceedings which may have 
been stayed, shall be resumed. 
  (4) If a comp romise or arrangement between a society 
and its creditors or any class of them is confirmed 
under sub-section (2) the proceedings, if any, stayed 
under sub-section (3) shall abate and no proceedings 
shall lie in a Civil Court in respect of any liability of  
the society to which the compromise or arrangement 
relates. 
  (5) The Registrar may, with the previous approval of the 
State Government, exempt any class of creditors 
from the operation of this section or any provisions 
thereof. 
  (6) A compromise or a rrangement confirmed by the 
Registrar shall not be called in question in any Civil 
Court. 
  (7) If a creditor in respect of whom a compromise or 
arrangement has been confirmed by the Registrar 
under sub -section (2), fails to receive the amount 
payable to him under such compromise or 
arrangement after due notice to do so within the 
period specified in such notice, the society or the 
liquidator, as the case may be, shall deposit the 
amount in such manner as may be directed by the 
Registrar. On the making of such deposit the amount 
payable to the creditor under the compromise or 
arrangement shall be deemed to have been paid to 
the extent of the deposit. 
  (8) A compromise or an arrangement between a society 
and its creditors or any class of them confirmed by 
the Registrar under sub -section (2) shall cease to be 
in force as soon as the whole amount of the liability 
determined thereunder has been or is deemed to 
have been paid whether under the provisions of this 
section or otherwise notwithstanding that the per iod 
originally stipulated for the discharge of such 
liability has not expired. 
 
  (9) After such compromise or arrangement has ceased to 
be in force no further claim shall remain against the 
 - 21 - 
society, or against any property, movable or 
immovable which it may acquire thereafter, in 
respect of the liability which had been the subject of 
the compromise or arrangement, and the society 
shall be free to conduct its normal business. 
 
Action and liability 
of Banks under 
moratorium. 
17-A  Where an order of moratorium has been made by the 
Central Government under sub-section (2) of section 
45 of the Banking Regulation Act, 1949 (No. 10 of 
1949) in respect of Co -operative Bank, the Registrar 
with the previous approval of the Reserve Bank in 
writing may, during the pe riod of moratorium, 
prepare a scheme,- 
(i) for the reconstruction or re -organisation of 
the Co-operative Bank; or 
(ii) for the amalgamation of the Co -operative 
Bank with any other Bank. 
 
Liability of new 
Bank to repay to the 
Deposit Insurance 
Corporation. 
17-B  Notwithstanding anything contained in this Act, 
where a Co -operative Bank being an insured bank 
within the meaning of the Deposit Insurance 
Corporation Act, 1961 (No.47 of 1961) is 
amalgamated or in respect of which a scheme of 
compromise or arrangement or o f reconstruction or 
reorganisation has been sanctioned and the Deposit 
Insurance Corporation has become liable to pay to 
the depositors of the insured bank under sub -section 
(2) of section 16 of that Act, the bank with which 
such insured bank is amalgamate d or the new Co -
operative bank formed after such amalgamation or, 
as the case may be, the insured bank or transferee 
bank shall be under an obligation to repay to the 
Deposit Insurance Corporation in the circumstances, 
to the extent and in the manner refer red to in section 
21 of the Deposit Insurance Corporation Act, 1961 
(No. 47 of 1961) 
Cancellation of 
registration. 
18 (1) The Registrar shall make an order cancelling the 
registration of a society if it transfers the whole of its 
assets and liabilities to  another society, or 
amalgamates with another society, or divides itself 
into two or more societies or it is de-registered under 
the provisions of sub-section (1) of section 24 or it is 
wound up under section 102. The society shall, from 
the date of such o rder of cancellation, be deemed to 
be dissolved and shall cease to exist as a corporate 
 - 22 - 
body. 
 
  (2) Notwithstanding anything contained in this Act if 
any proceedings relating to the winding up or 
dissolution of a society are pending immediately 
before th e commencement of this Act, such 
proceedings shall after such commencement be 
disposed of in accordance with the provisions of the 
law under which such society was registered or 
deemed to be registered. 
 
De-registration of 
societies. 
18-A (1) If the Regi strar is satisfied that any society is 
registered on misrepresentation made by applicants, 
or where the work of the society is completed or the 
purposes for which the society has been registered 
are not served, he may, after giving an opportunity 
of being heard to the committee, de -register the 
society.                
  (2) When a society is de -registered under the provisions 
of sub -section (1), the Registrar may, 
notwithstanding anything contained in this Act, 
make such incidental and consequential order  
including appointment of official assignee as the 
circumstances may require. 
 
  (3) Subject to the rules made under this Act, the official 
assignee shall realize the assets and liquidate the 
liabilities within a period of one year from the date 
he takes over the charge of property, assets, books, 
records and other documents. The period aforesaid 
may, at the discretion of the Registrar, be extended 
from time to time, so however, that the total period 
does not exceed three years in the aggregate. 
  (4) The official assignee shall be paid such 
remuneration and allowances as may be prescribed. 
 
  (5) The powers of the Registrar under sub -section (1) 
and (2) shall not be exercised by any officer below 
the rank of a Joint Registrar of Co -operative 
Societies. 
 
 
 
 
CHAPTER III 
MEMBERS, THEIR RIGHTS, LIABILITIES AND PRIVILEGES  
 - 23 - 
Persons who may 
become members. 
19 (1) No persons shall be admitted as a member of a 
society except the following, namely:-   
(a) an individual competent to contract under 
section 11 of the Indian Contract Act, 1872 
(No. 9 of 1872); 
(b) any other society; 
(c) a public trust registered under the Chhattisgarh 
Public Trusts Act, 1951 (No. 30 of 1951); 
(d) a firm, company or any other body corporate, 
not having minors as partners or directors, 
registered est ablished or constituted, as the 
case may be, under any law for the time being 
in force; 
(e) a society registered under the Chhattisgarh 
Societies Registration Act, 1959 (No. 1 of 
1960), as  may be approved by the State 
Government in this behalf by general or 
special order; 
(f) the State Government: 
 
            Provided that the provisions of clause ( a) 
shall not apply to,– 
 
(i) an individual seeking admission to a 
society exclusively formed for the benefit 
of students;  
(ii) a minor acting through a guardian 
appointed by the Court. 
  (2) Notwithstanding anything to contrary in this Act or 
rules or in the byelaws of a society, where the State 
Government has contributed to the share capital of a 
society, the liability of the State Government shall 
be limited to the face value of the shares held by it. 
  (2-A) Notwithstanding anything contained in this Act or 
rules made there  under or in the byelaws of a 
resource society or consumers society, as the case 
may be, if any person duly qualified for admission 
as a member under the provisions of this Act and the 
byelaws of that Society makes an application for 
membership of such Society he shall be deemed to 
have been admitted as a member of such Society 
from the date of receipt of the application in the 
office thereof; 
             Provided that the Registrar may, either on 
his own motion at any time or on an application by 
 - 24 - 
the society or any aggrieved person made within 
fifteen days from the aforesaid date and after giving 
reasonable opportunity to the society or person 
concerned by order, declare such person as not 
eligible for membership of such society for the 
reasons mentioned therein, within forty five days 
from the date of receipt of application by the 
Registrar. 
  (3) Where a student, who is not competent to contract 
under section 11 of the Indian Contract Act, 1872 ( 9 
of 1872), desires to become a member of a society 
formed exclusively for the benefit of students, his 
application for the registration of a society or his 
application for membership shall be accompanied by  
a written undertaking from his guardian or other 
person competent to contract under section 11 of the 
said Act in the prescribed form, in respect of the 
liability of the student as a member. 
  (4) Where a person is refused admission as a member in 
a soc iety, the decision refusing admission shall be 
communicated by the society to that person within 
thirty days of the date of such decision.  
  (5) No society shall, without sufficient cause, refuse 
admission to membership to any person, duly 
qualified the re for under the provisions of this Act 
and the byelaws of the society. 
  (6) Any person aggrieved under sub -section (4) or sub -
section (5) may appeal to the Registrar within ninety 
days of the date of rejection. 
  (7) The decision of the Registrar in appeal shall be final 
and the Registrar shall communicate his decision to 
the parties within thirty days from the date thereof. 
 
Disqualifications of 
member. 
19-A  No person shall be eligible for admission as member 
and any member shall cease to be a memb er of a 
society, if – 
(a) he is an applicant to be adjudicated or is an un -
discharged insolvent; 
(b) he has been sentenced for an offence involving 
moral turpitude and a period of five years has 
not elapsed from the date of expiry of 
sentence; 
(bb)  he has been sentenc ed for an offence under 
the provisions of the Protection of Civil Rights 
 - 25 - 
Act, 1955 (No. 22 of 1955) and a period of six 
years has not elapsed from the date of expiry 
of sentence; 
(c) he or any member of his family, having 
common interest with him, carries on b usiness 
similar to one carried on by the society: 
 
     Provided that the provisions of clause ( b) 
shall not app

Excerpt shown. Open the full act in Lexace.

‹ Prev All Chhattisgarh acts Next ›