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THE DELHI CO-OPERATIVE SOCIETIES ACT,
2003
ARRANGEMENT OF SECTIONS
PREAMBLE
CHAPTER-I
PRELIMINARY
SECTIONS
1. Short title, extent and commencement.
2. Definitions.
CHAPTER-II
Registration of Co-operative Societies
3. Registrar.
4. Co-operative societies which may be registered.
5. Restrictions on registration.
6. Restrictions on holding of shares.
7. Application for registration.
8. Power of the Registrar to decide certain questions.
9. Registration.
10. Registration certificate.
11. Bye-laws of co-operative societies.
12. Amendment of bye-laws of a co-operative society and compulsory
amendment of bye-laws by the Registrar.
13. When amendments of bye-laws come into force.
14. Change of name.
15. Change of liability.
16. Amalgamation, transfer of assets and liabilities and division of co-operative
societies.
17. Power to direct amalgamation, division and re-organisation in public interest,
etc.
18. Registrar to prepare scheme of amalgamation of co-operative bank in certain
cases.
19. Liability of a co-operative bank to the Deposit Insurance Corporation.
20. Cancellation of registration certificate of the co-operative societies in certain
cases.
21. Classification.
CHAPTER-III
Members of Co-operative Societies and their Rights and liabilities
22. Persons who may become members.
23. Nominal or associate or joint member.
24. Member not to exercise rights till due payment made.
25. Votes of members.
26. Manner of exercising vote.
27. Restriction on transfer of shares or interest.
28. Transfer of interest on death of member.
29. Liability of past member and estate of deceased member.
CHAPTER-IV
Management of Co-operative societies
30. Final authority in a co-operative society.
31. Annual general body meeting.
32. Returns to be filed to the Registrar after annual general body meeting.
33. Special general body meeting.
34. Constitution of committee.
35. Election and nomination of members of committee.
36. Removal of committee or its officer.
37. Supersession of committee.
38. Securing possession of records, etc.
39. Acts of co-operative society not to be invalidated by certain defects.
40. Expulsion of members.
41. Cessation of membership of co-operative society.
42. Directions by the Registrar for successful conduct of business.
CHAPTER-V
Privileges of Co-operative Societies
43. Co-operative society to be body corporate.
44. First charge of co-operative society on certain movable assets of member for
the amount due to him.
45. Charge on immovable property of member borrowing loans from certain co-
operative societies.
46. Charge and set-off in respect of share or contribution or interest of members.
47. Share or contribution or interest not liable to attachment.
48. Register of members.
49. Admissibility of copy of entry as evidence.
50. Exemption from compulsory registration of instruments.
51. Exemption from certain taxes, fees and duties.
52. Deduction from salary to meet co-operative society's claim in certain cases.
CHAPTER-VI
Properties and funds of Co-operative Societies
53. Funds other than net profits not to be divided among members.
54. Contribution to charitable purpose.
55. Contribution to Co-operative Education Fund.
56. Investment of funds.
57. Restrictions on loans.
58. Restrictions on borrowings.
59. Restrictions on other transactions with non-members.
CHAPTER-VII
Audit, inquiry, inspection and surcharge
60. Audit.
61. Inspection of co-operative societies.
62. Inquiry by the Registrar.
63. Inspection of books of indebted co-operative societies.
64. Cost of inquiry.
65. Recovery of cost.
66. Surcharge.
67. Rectification of defects in audit, inquiry or inspection.
68. Power to summon and examine documents and persons, etc.
69. Maintenance of accounts and books, etc.
CHAPTER-VIII
Settlement of Disputes
70. Disputes which may be referred for arbitration.
71. Reference of disputes to arbitration.
72. Power of financing bank and federal co-operative society to proceed.
CHAPTER-IX
Special provisions for Co-operative Housing Societies
73. Application of this chapter.
74. Definitions.
75. Limit on membership.
76. Rights and privileges of members on allotment of plot or dwelling unit in a
co-operative housing society.
77. Allotment of plots, flats or houses through draw of lots.
78. Provision for nomination.
79. Restriction on transfer of share or interest of a member.
80. Permission for transfer of occupancy right not to be ordinarily refused and
provision for appeal.
81. Creation, maintenance and utilisation of building and replacement fund.
82. Registration of mortgage in favour of co-operative housing society or apex.
83. Settlement of disputes.
84. Recovery of outgoings and arrears of dues as arrears of land revenue.
85. Recovery of dues and foreclosures.
86. Expulsion of a member.
87. Additional grounds for Cessation of membership of co-operative housing
society.
88. Management of co-operative housing societies.
89. Maintenance of essential services in co-operative housing societies.
90. Co-operative housing society to maintain register of its properties with
prescribed details.
91. Special provision for regularisation of occupancy right of persons who have
acquired such a right through the instrument of power of attorney or agreement
for sale.
92. Execution of housing project.
93. Management of co-operative housing complex by co-operative societies.
94. House building co-operative societies which have achieved their objectives.
CHAPTER-X
Winding up of co-operative societies
95. Dissolution of co-operative society by members.
96. Dissolution of co-operative society by the Registrar.
97. Winding up of co-operative banks at the direction of the Reserve Bank.
98. Re-imbursement to the Deposit Insurance and Credit Guarantee by the
liquidator
99. Appointment of liquidator.
100. Duties of liquidator.
101. Powers of liquidator.
102. Disposal of surplus assets of liquidated co-operative societies.
103. Final accounts.
CHAPTER-XI
Execution of awards, decrees, orders and decisions
104. Enforcement of charge.
105. Execution of orders, etc.
106. Execution of orders of liquidator.
107. Attachment before award.
108. Recovery of debt.
109. Registrar or person empowered by him to be civil court for certain
purposes.
110. Recovery of sums due to Government.
111. Special powers of Registrar for recovery of amount recoverable as arrears of
land revenue.
CHAPTER-XII
Appeals, Revision and review
112. Appeals.
113. No appeal or revision in certain cases.
114. Delhi Co-operative Tribunal.
115. Review.
116. Revision.
117. Interlocutory orders.
CHAPTER-XIII
Offences and penalties
118. Offences and penalties.
119. Prohibition of the use of the word `co-operative' or its equivalent.
120. Punishment for offences not otherwise provided for.
121. Cognizance of offences.
122. Presumption as to commission of offence in certain cases.
123. Presumption as to statements.
124. Address of co-operative society.
125. Copy of Act, rules and bye-laws, etc. to be open for inspection.
126. Power to exempt co-operative societies from conditions as to registration.
127. Power to exempt co-operative societies from the provisions of the Act.
128. Officers and employees to be public servants.
129. Notice necessary in suits.
130. Companies Act not to apply.
131. Saving of existing co-operative societies.
132. Bar of jurisdiction of civil or revenue courts.
133. Powers of civil Court.
134. Indemnity.
135. Service rules for employees of co-operative societies.
CHAPTER-XIV
Rules and Miscellaneous provisions
136. Power to delegate.
137. Power to make rules.
138. Power of the Registrar to give directions to the co-operative banks.
139. Right to information.
140. Act to override other laws.
141. Repeal and savings.
142. Removal of difficulties.
The First Schedule [See Section 2(g)]
Co-operative Principles
* * *
No.F.14 (32)/LA-2003/149 Dated: the 2nd April, 2004
NOTIFICATION
No.F.14 (32)/LA-2003 - The following Act of the Legislative Assembly of the National Capital Territory of Delhi received the assent of the President of India on the 3rd March, 2004 and is hereby published for general information:-
No. Part file 37/01/Coop.-Act/Policy/RCS/10 Dated: 24-03-2005
NOTIFICATION
No. Part file 37/Coop.-Act/Policy/RCS/(i) - In exercise of the powers
conferred by sub-section (3) of section I of the Delhi Co-operative
Societies Act, 2003 (Delhi Act 3 of 2004), the Lieutenant Governor of
National Capital Territory of Delhi, hereby, appoints the 1st day of April
2005 as the date on which the provisions of the said Act shall come into
force.
No. Part file 37/Coop.-Act/Policy/RCS/(ii) - In exercise of the powers
conferred by sub-section (3) of section I of the Delhi Co-operative Societies
(Amendment) Act, 2004 (Delhi Act I of 2005), the Lieutenant Governor of
National Capital Territory of Delhi, hereby, appoints the I" day of April 2005 as
the date on which the provisions of the said Act shall come into force.
No. Part file 37/01/Coop.-Act/Policy/RCS/(iii) - In exercise of the
powers conferred by sub-section (3) of section I of the Delhi Co-operative
Societies (Amendment) Act, 2006 (Delhi Act 8 of 2006), the Lieutenant
Governor of National Capital Territory of Delhi, hereby, appoints the 13th day
of January 2007 as the date on which the provisions of the said Act shall come
into force.
"THE DELHI CO-OPERATIVE SOCIETIES ACT, 2003" (DELHI ACT 3 OF 2004)
(As passed by the Legislative Assembly of the National Capital Territory of Delhi on the 29th July, 2003)
[3rd March, 2004}
An Act to consolidate and amend the laws relating to co-operative societies, to facilitate
the voluntary formation and democratic functioning of cooperatives as people's
institutions based on self help and mutual aid to enable them to promote their economic
and social betterment and to provide for better regulation, management, functional
autonomy of such societies and for matters connected therewith or incidental thereto in
the National Capital Territory of Delhi.
Be it enacted by Legislative Assembly of the National Capital Territory of Delhi in
the Fifty-fourth Year of the Republic of India as follows :-
CHAPTER - I
PRELIMINARY
Short title, extent and commence-ment.
1. (1) This Act may be called the Delhi Co-operative Societies Act, 2003.
(2) It extends to the whole of the National Capital Territory of Delhi.
(3) It shall come into force on such date as the Government may, by notification in the
official Gazette, appoint.
Definitions.
2. In this Act, unless the context otherwise requires, -
(a) Omitted vide Notification No. F.14(31)/LA-2004/16 dated 17/01/2005
(b) "area of operation" means the area of Delhi from which the membership is drawn;
(‘and’ Omitted vide Notification No. F.14(31)/LA-2004/16 dated 17/01/2005)
(c) "bye-laws" means the registered bye-laws for the time being in force and includes
registered or deemed amendments of such bye-laws;
(d) "Collector" shall have the same meaning as is assigned to it in the General
Clauses Act, 1897 (10 of 1897).
(e) "committee' means the governing body of a co-operative society by whatever
name called, to which the management of the affairs of the co-operative society
is entrusted;
(f) "co-operative bank" means a bank as defined under section 5 as amended by
section 56 of the Banking Regulations Act, 1949 ( 10 of 1949);
(g) "co-operative principles" means the co-operative principles specified in the
Schedule to this Act;
(h) "co-operative society" means a society registered or deemed to be registered
under this Act;
(i) "co-operative year" means the year ending on the 31st day of March;
(j) "Delhi" means the National Capital Territory of Delhi;
(k) "Deposit Insurance Corporation" means the Deposit Insurance and Credit
Guarantee Corporation established under section 3 of the Deposit Insurance and
Credit Guarantee Corporation Act, 1961 (47 of 1961);
(l) "Divisional Commissioner" means an officer appointed by the Government as such
possessing the powers of the Collector and the District Magistrate under the
relevant laws for the time being in force.
(m) "federal co-operative society" means a co-operative society whose membership
is available only to co-operative societies and in the case of a federal co-
operative society formed with the main objective to propagate and promote
activities in the field of art, culture, education, information technology, training,
industry, etc., shall also include experts in the respective fields in individual
capacity not exceeding one-fifths of the total strength of such society or twenty,
whichever is less;
(n) "financing bank" means a co-operative bank the objects of which include the
creation of funds to be lent to other co-operative societies;
(o) "general body" in relation to a primary co-operative society means all the
members of that co-operative society and in relation to a federal co-operative
society, means all the delegates of the member co-operative societies and the
individual members as per clause (m);
(p) "Government" means the Lieutenant Governor of the National Capital Territory of
Delhi appointed by the President under article 239 and designated by such under
article 239 AA of the Constitution;
(q) "Lieutenant-Governor" means the Administrator of National Capital Territory of
Delhi appointed by the President under article 239 of the Constitution;
(r) "member" means a person joining in the application for the registration of a co-
operative society and a person admitted to membership after such registration in
accordance with this Act, the rules and the bye-laws, and includes a nominal or
associate or joint member and the Government when it subscribes to the share
capital of a co-operative society;
(s) "NABARD" means the National Bank of Agriculture and Rural Development
constituted under the National Bank for Agriculture and Rural Development Act,
1981 (61 of 1981);
(t) ``officer'' means the president, vice-president, chairman, vice-chairman, managing
director, secretary, manager, member of committee, treasurer, liquidator,
administrator and includes any other person empowered under this Act, the rules
or the bye-laws, to give directions in regard to the business of a co-operative
society;
(u) "prescribed'' means prescribed by rules made under this Act;
(v) "primary co-operative society" means a co-operative society in which individuals
are members;
(w) "Registrar" means a person appointed to perform the functions of the Registrar of
co-operative societies under this Act and includes any person appointed to assist
the Registrar when exercising all or any of the powers of the Registrar;
(x) "Reserve Bank" means the Reserve Bank of India constituted under sub-section
(1) of section 3 of the Reserve Bank of India Act, 1934 (2 of 1934);
(y) "rule" means a rule made under this Act;
(z) "section" means a section of this Act;
(za) "Sub-divisional Magistrate" means an Executive Magistrate appointed under the
Code of Criminal Procedure, 1973 (2 of 1974) and posted by the Government to
be in-charge of the sub-division;
(zb) "Tribunal" means the Delhi Co-operative Tribunal constituted under section 114.
CHAPTER - II
REGISTRATION OF CO-OPERATIVE SOCIETIES
Registrar.
3. (1) The Government may, by notification in the Official Gazette, appoint a person to
be the Registrar of co-operative societies for Delhi and may appoint other
persons to assist him.
(2) The Government may, by general or special order, confer on any person
appointed to assist the Registrar all or any of the powers of Registrar under this
Act.
(3) Every person appointed to assist the Registrar shall exercise the powers
conferred on him under sub-section(2) subject to the general guidance,
superintendence and control of the Registrar.
(4) The Government may, by notification in the Official Gazette and subject to such
conditions as it may think fit to impose, confer all or any of the powers of the
Registrar under this Act on any federal co-operative society, or an officer of such
federal co-operative society, and every such federal co-operative society or
officer on whom the powers of the Registrar are so conferred shall exercise such
powers under the general guidance, superintendence and control of the
Registrar.
Co-operative societies which may be registered.
4. (1) Subject to the provisions hereinafter contained, a co-operative society which has its
object the promotion of economic, social and cultural interests of its members, in
accordance with co-operative principles, or a co-operative society established
with the object of facilitating the operations of such a co-operative society, may
be registered under this Act with limited liability:
Provided that a co-operative society shall be registered only if it fulfils the
viability norms with limited liability as prescribed for a co-operative society or
class of co-operative societies to ensure that it is economically sound and its
registration may not adversely affect the development of co-operative movement.
(2) The word "limited" or its equivalent in any Indian language shall be the last
word in the name of every co-operative society registered under this Act with
limited liability.
Restrictions on registration.
5. No co-operative society shall be registered under this Act unless it consists of at least
fifteen members who are qualified to be members under this Act and who reside in
the area of operation of the co-operative society :
Provided that in the case of a primary co-operative society each of such
members shall be a member of different family.
Explanation .- For the purpose of this section the expression, "member of a
family" means father, mother, wife, husband and dependent children.
Restrictions on holding of shares.
6. No member other than the Government or a co-operative society shall hold more than
such portion of the share capital of a co-operative society subject to a maximum of
one-tenths, as may be prescribed.
Application for registration.
7. (1) For the purposes of registration, an application shall be made to the Registrar.
(2) The application shall be signed -
(a) in case of a co-operative society of which no member is a co-
operative society, by at least fifteen persons qualified in
accordance with the requirements of section 4; and
(b) in case of a federal co-operative society of which a member is a
co-operative society, by a duly authorised person on behalf of
such co-operative society and where all the members of the
federal co-operative society are not co-operative societies, upto
one-fifths of total strength or twenty, whichever is less, of other
members, by the minimum number of fifteen and where all
members are co-operative societies by duly authorised persons
on behalf of fifteen different co-operative societies.
Power of the Registrar to decide certain questions.
8. Where any question arises at the stage of registration whether for the purpose of this
Act a person resides in the area of operation of a co-operative society or not, or
whether a co-operative society is of same type as another co-operative society or of
different type, the question shall be decided by the Registrar whose decision shall be
final.
Registration.
9.(1) If the Registrar is satisfied -
(a) that the application complies with the provisions of this Act
and the rules;
(b) that the objects of the proposed co-operative society are in
accordance with section 4;
(c) that the proposed bye-laws are not contrary to the provisions
of this Act and the rules;
(d) that in case of co-operative bank prior written permission of
the Reserve Bank for registration has been received by the
Registrar;
(e) that the proposed co-operative society has reasonable
chances of success; the Registrar may register the co-operative
society and its bye-laws.;
(f) that in case of a co-operative housing society, the
confirmation of availability of land to the co-operative
housing society from the land allotting agency has been
received by the Registrar. (Inserted vide Notification No.
F.14(31)/LA-2004/16 dated 17/01/2005)
(2) When the Registrar refuses to register a co-operative society, he shall
communicate the order of refusal together with the reasons, therefor, to the
applicant.
(3) The application for registration shall be disposed of by the Registrar within a
period of ninety days from the date of receipt thereof by him :
Provided that if the Registrar is unable to dispose of the application within the
aforesaid period, he shall make a report to the Government stating therein the
reasons for his inability to do so, and the Government may allow him further time
not exceeding ninety days to dispose of such application :
Provided further that if the application for registration is not disposed of within
the aforesaid period of ninety days and the Registrar fails to communicate the
order of refusal within that period, the application shall be deemed to have been
accepted for registration and the Registrar shall issue the registration certificate
in accordance with the provisions of this Act and the rules made thereunder.
Registration certificate.
10. Where a co-operative society is registered or deemed to be registered under this Act,
the Registrar shall issue a certificate of registration signed by him, which shall be
conclusive evidence that the co-operative society therein mentioned is duly
registered under this Act.
Bye-laws of co-operative societies.
11. (1) Every co-operative society may make its bye-laws consistent with the provisions
of this Act and the rules made thereunder.
(2) In particular and without prejudice to the generality of the foregoing power, such
bye-laws may provide for all or any of the following matters, namely :-
(a) The name, address and area of operation of the society;
(b) the objects of the society;
(c) the services to be provided to its members;
(d) the eligibility for obtaining membership;
(e) the procedure for obtaining membership;
(f) the conditions for continuing as member;
(g) the procedure for withdrawal of membership;
(h) the transfer of membership;
(i) the procedure for expulsion from membership;
(j) the rights and duties of the members;
(k) the nature and amount of capital of the society;
(l) the manner in which the maximum capital to which a single member can
subscribe;
(m) the sources from which the funds may be raised by a co-operative society;
(n) the purpose for which the funds may be applied;
(o) the manner of allocation or disbursement of net profits of co-operative society;
(p) the constitution of various reserves;
(q) the manner of convening general meetings and quorum thereof other than
those provided under this Act;
(r) the procedure for notice and manner of voting in general and other meetings;
(s) the procedure for amending the bye-laws;
(t) the number of members of the committee not exceeding twenty one;
(u) the term of office of elected members of a committee shall be three years;
(v) the procedure for removal of members of the committee and for filling of
vacancies;
(w) the manner of convening committee meetings, its quorum, number of such
meetings in a year and venue of such meetings;
(x) the frequency of committee meetings;
(y) the powers and functions of the paid executive;
(z) the manner of imposing the penalty;
(za) the appointment, rights and duties of auditors and procedure for conduct of
audit;
(zb) the authorisation of officers to sign documents, operate of bank accounts
and to institute and defend suits and other legal proceedings on behalf of the
society;
(zc) the terms on which a co-operative society may deal with persons other than
members;
(zd) the terms on which a co-operative society may associate with other co-
operative societies;
(ze) the terms on which a co-operative society may deal with organisations other
than co-operative societies;
(zf) the procedure and manner for transfer of shares and interest in the name of a
nominee in case of death of a member;
(zg) the educational and training programmes to be conducted by the co-
operative society;
(zh) the principal place and other places of business of the co-operative society;
(zi) the minimum level of services, to be used by its members;
(zj) any other matter which may be prescribed.
Amendment of bye-laws of a co-operative society and compulsory amendment of bye-laws
by the Registrar.
12. (1) No amendment of any bye-laws of a co-operative society shall be valid unless
such amendment has been registered or deemed to have been registered under
this Act.
(2) Every proposal for such amendment approved by the general body and
complete in all respect as prescribed shall be forwarded to the Registrar within
thirty days of approval of the general body and if the Registrar is satisfied that the
proposed amendment -
(a) is not contrary to the provisions of this Act and the rules;
(b) does not conflict with the co-operative principles; and
(c) will promote the economic, social and cultural interests of the members of the
co-operative society; he may register the amendment :
Provided that in case of amendment of bye-laws of a co-operative bank, prior
approval in writing of the Reserve Bank shall be necessary.
(3) The Registrar shall forward to the co-operative society a copy of the
registered amendment together with a certificate signed by him and such
certificate shall be conclusive evidence that the amendment has been duly
registered.
(4) Where the Registrar refuses to register an amendment of bye-laws of a co-
operative society, he shall communicate the order of refusal together with the
reasons therefor, to the co-operative society in the prescribed manner.
(5) In case the Registrar does not communicate any decision under sub-section
(2) or sub-section (4) as above within the period of ninety days, the amended
bye-laws shall be deemed to have been registered.
(6) Where it appears to the Registrar that amendment in the bye-laws of a co-
operative society is necessary and desirable in the interest of the co-operative
society or class of co-operative societies, the Registrar shall direct the co-
operative society or the class of co-operative societies, as the case may be, to
make amendment in the bye-laws within a period of sixty days, by convening a
general body meeting of the co-operative society.
(7) After the expiry of the period specified in sub- section (6) and if the co-
operative society fails to make the amendment, the Registrar after giving the co-
operative society an opportunity of being heard, may register the amendment
and issue to the co-operative society, a copy of such amendment certified by him
with a certificate signed by him, with effect from the date of registration the
amendment shall be binding on the co-operative society and its members,
subject to appeal, if any.
When amendments of bye-laws come into force.
13. An amendment of the bye-laws of a co-operative society shall, unless it is
expressed to come into operation on a particular day, come into force on the day
on which it is registered or deemed to be registered.
Change of name.
14.(1) A co-operative society may by an amendment of its bye-laws, change its name but
such change shall not affect any right or obligation of the co-operative society or
of any of its members or past members and any legal proceedings pending may
be continued by or against the co-operative society under its new name :
Provided that prior approval in writing of the Reserve Bank shall be necessary
for change of the name of a co-operative bank.
(2) Where a co-operative society changes its name, the Registrar shall enter the new
name on the register of co-operative societies in place of the former name and
shall amend the certificate of registration accordingly.
Change of liability.
15.(1) Subject to the provisions of this Act and the rules, a co-operative society may, by
an amendment of its bye-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, it shall give notice thereof in writing to all its members and creditors
and, notwithstanding any bye-laws or contract to the contrary, any member or
creditor shall, during a period of thirty days from the date of service of the notice
upon him, have the option of withdrawing his shares, deposits or loans, as the
case may be.
(3) Any member or creditor who does not exercise his option within the period
specified in sub-section (2) shall be deemed to have assented to the change.
(4) An amendment of a bye-laws of a co-operative society changing the form or
extent of its liability shall not be registered or take effect until either -
(a) the assent thereto of all members and creditors has been obtained; or
(b) all claims of members and creditors who exercise the option referred to in
sub-section (2) within the period specified therein have been met in full.
Amalgamation, transfer of assets and liabilities and division of co-operative societies.
16.(1) A co-operative society may, by a resolution passed by a two-thirds majority of the
members present and voting at a general body meeting of the co-operative
society -
(a) transfer its assets and liabilities in whole or in part to any other co-operative
society;
(b) divide itself into two or more co-operative societies;
(c ) approve a scheme of compromise or arrangement or reconstruction.
(Inserted vide Notification No. F.14(31)/LA-2004/16 dated 17/01/2005)
(2) Any two or more co-operative societies may, by a resolution passed by a two-
thirds majority of the members present and voting at a general body meeting of
each such co-operative society, amalgamate themselves and form a new co-
operative society.
(3) The resolution of a co-operative society under sub-section (1) or sub-section (2)
shall contain all particulars of the transfer, division or amalgamation or scheme
of compromise or arrangement or reconstruction,( Substituted vide
Notification No. F.14(31)/LA-2004/16 dated 17/01/2005) as the case may be :
Provided that in the case of a co-operative bank, the Registrar shall not accord
approval to any such resolution without the previous sanction in writing of the
Reserve Bank.
(4) When a co-operative society has passed any such resolution, it shall give notice
thereof in writing to all its members and creditors and, notwithstanding any bye-
laws or contract to the contrary, any member or creditor shall, during the period
of thirty days of the date of service of the notice upon him, have the option of
withdrawing his shares, deposits or loans, as the case may be.
(5) Any member or creditor who does not exercise his option within the period
specified in sub-section (4) shall be deemed to have assented to the proposals
contained in the resolution.
(6) A resolution passed by a co-operative society under this section shall not take
effect until, either -
(a) the assent thereto of all the members and creditors has been obtained;
(b) all claims of members and creditors who exercise the option referred to in sub-
section (4) within the period specified therein have been met in full.
(7) Where a resolution passed by a co-operative society under this section involves
the transfer of any assets and liabilities, the resolution shall, notwithstanding
anything contained in any law for the time being in force, be a sufficient
conveyance to vest the assets and liabilities in the transferee without any further
assurance.
Power to direct amalga-mation, division and re-organisation in public interest, etc.
17. (1) Where the Registrar is satisfied that it is essential in the public interest, or in the
interest of the co-operative movement, or for the purpose of securing the proper
management of any co-operative society that two or more co-operative societies
should be amalgamated or any co-operative society should be divided to form
two or more co-operative societies or should be reorganised, then
notwithstanding anything contained in section 16, but subject to the provisions of
this section, the Registrar may, by order, provide for the amalgamation, division
or reorganisation of these co-operative societies into a single co-operative
society or into co-operative societies with such constitution, property, rights,
interest and authorities and such liabilities, duties and obligations as may be
specified in the order:
Provided that no such order of amalgamation, division or reorganisation in
respect of a co-operative bank shall be made without the previous sanction in
writing of the Reserve Bank.
(2) No order shall be made under this section unless -
(a) a copy of the proposed order has been sent in draft to the co-operative society or
each of the co-operative societies concerned; and
(b) the Registrar has considered and made such modifications in the draft order as
may seem to him desirable in the light of any suggestions and objections which
may be received by him within such period (not being less than sixty days from
the date on which a copy of the order aforesaid is received by the co-operative
society or co-operative societies, as the case may be), as the Registrar may fix in
that behalf, either from the co-operative society or from any of the co-operative
societies concerned or from any member or class of members thereof or from
any creditor or class of creditors thereof.
(3) The order referred to in sub-section (1) may contain such incidental,
consequential and supplemental provisions as may, in the opinion of the
Registrar, be necessary to give effect to the amalgamation, division or
reorganisation, as the case may be.
(4) Every member or creditor of each of the co-operative society to be amalgamated,
divided or reorganised, who has objected to the scheme of amalgamation,
division, or reorganisation, within the period specified, shall be entitled to receive,
on the issue of the order of amalgamation, division or reorganisation, his share or
interest, if he be a member and the amount in satisfaction of his dues, if he be a
creditor.
(5) On the issue of an order under sub-section (1), the provisions of sub-sections (2),
(3) and (4) of section 20 shall apply to the co-operative societies so
amalgamated, divided or reorganised as if the amalgamation, division or
reorganisation had been made under section 16.
Registrar to prepare scheme of amalgamation of co-operative bank in certain cases.
18. (1) When an order of moratorium has been made by the Central Government under
sub-section (2) of section 45 of the Banking Regulations Act, 1949 (10 of 1949) in
respect of a co-operative bank, the Registrar, with the previous approval of the
Reserve Bank in writing, may, during the period of moratorium, prepare a scheme -
(a) for the reorganisation of the co-operative bank; or
(b) for the amalgamation of the co-operative bank with any other co-operative
bank.
Liability of a co-operative bank to the Deposit Insurance Corporation.
19. Notwithstanding anything contained in sections 16 and 17 or any other provision of
this Act, where a co-operative bank, being an insured bank within the meaning of the
Deposit Insurance and Credit Guarantee Corporation Act, 1961 (47 of 1961), is
amalgamated or reorganised 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 insured bank is amalgamated or the new co-
operative bank formed after such amalgamation, as the case may be, the insured
bank or transferee bank shall be under an obligation, to repay the Deposit Insurance
Corporation in the circumstances, to the extent of and in the manner referred to in
section 21 of the Deposit Insurance and Credit Guarantee Corporation Act,1961 (47
of 1961).
Cancellation of registration certificate of the co-operative societies in certain cases.
20.(1) Where the whole of the assets and liabilities of a co-operative society are
transferred to another co-operative society in accordance with the provisions of
section 16 or section 17, the registration of the first mentioned co-operative
society shall stand cancelled and the co-operative society shall be deemed to
have been dissolved and shall cease to exist as corporate body.
(2) Where two or more co-operative societies are amalgamated into a new co-
operative society in accordance with the provisions of section 16 or section 17,
the registration of each of the amalgamating co-operative society shall stand
cancelled on the registration of the new co-operative society, and each co-
operative society shall be deemed to have been dissolved and shall cease to
exist as a corporate body.
(3) Where a co-operative society divides itself into two or more co-operative societies
in accordance with the provisions of section 16 or is divided by the Registrar in
accordance with the provisions of section 17, the registration of that co-operative
society shall stand cancelled on the registration of the new co-operative society
and that co-operative society shall be deemed to have been dissolved and shall
cease to exist as a corporate body.
(4) The amalgamation and splitting of co-operative society or co-operative societies
shall not in any manner whatsoever affect any right or obligation of resulting co-
operative society or co-operative societies or render defective any legal
proceedings by or against the co-operative society or co-operative societies or
any legal proceedings that might have been continued or commenced by or
against the co-operative society or co-operative societies, as the case may be,
before the amalgamation or splitting may be continued or commenced by or
against the resulting co-operative society or co-operative societies.
(5) Where a co-operative society has not commenced business within one hundred
and eighty days of its registration or has ceased to function or if the Registrar is
satisfied on the basis of inspection, inquiry or audit that the co-operative society
no longer has genuinely as its object one or more of the objects specified in
section 4 and that its registration ought, in the interest of general public, be
cancelled, he shall give an opportunity to the co-operative society to represent its
case and if not satisfied he shall make an order cancelling the registration of the
co-operative society, the co-operative society shall, from the date of such order
of cancellation be deemed to be dissolved and shall cease to exist as a corporate
body.
* Provided that in the case of a co-operative society which has not conducted
audit or annual general body meeting for five consecutive years or has no fixed
assets and outside liabilities excluding share money of the members, such
society shall be deemed to have been dissolved and shall cease to exist as
corporate body after the expiry of the said period of five years.
Classification.
21. The Registrar shall classify co-operative societies with reference to their objects, area
of operation, membership or any other matter.
CHAPTER - III
MEMBERS OF CO-OPERATIVE SOCIETIES AND THEIR RIGHTS AND LIABILITIES
Persons who may become members.
22.(1) No person shall be admitted as member of a co-operative society except the
following, namely -
(a) an individual competent to contract under section 11 of the Indian Contract
Act, 1872 (9 of 1872);
(b) any other co-operative society;
(c) the Government;
(d) a firm, a joint stock company, or any other body corporate constituted under
any law; and
(e) such class or classes of persons or association of persons as may be notified
by the Government in this behalf :
Provided that the provisions of clause (a) shall not apply to an individual seeking
admission to a co-operative society exclusively formed for the benefit of students
of a school or college :
Provided further that no individual shall be eligible for admission as a member of
any financing bank or federal co-operative society except as provided in clause
(m) of section 2.
(2) Notwithstanding anything contained in sub-section (1), the Government may,
having regard to the fact that the interest of any person or class of persons
conflicts or is likely to conflict with the objects of any co-operative society or class
of co-operative societies by general or special order, published in the official
Gazette, declare that any person or class of persons engaged in or carrying on
any profession, business or employment shall be disqualified from being
admitted, or for continuing as member or shall be eligible for membership only to
a limited extent of any specified co-operative society or class of co-operative
societies, so long as such person is or such persons are engaged in or carrying
on that profession, business or employment, as the case may be.
Nominal or associate or joint member.
23. (1) Notwithstanding anything contained in section 22, a co-operative society may
admit any person as a nominal or associate or joint member in accordance with
its bye-laws and subject to the rules.
(2) A nominal or associate member shall not be entitled to any share in any form
whatsoever, in the assets or profits of the co-operative society.
(3) Save as provided in this section, a nominal or associate or joint member shall
have such privileges and rights of a member and be subject to such liabilities of a
member as may be prescribed in rules and specified in the bye-laws of the co-
operative society.
Member not to exercise rights till due payment made.
24. No member of a co-operative society shall exercise the right of a member unless he
has made such payment to the co-operative society in respect of membership and
share or has acquired such interest in the co-operative society as may be specified in
the bye-laws.
Votes of members.
25. Every member of a co-operative society shall have one vote in the affairs of the co-
operative society :
Provided that -
(a) in the case of an equality of votes, the Chairman shall have a second or casting
vote;
(b) a nominal or associate or joint member shall not have the right of vote;
(c) where the Government is a member of the co-operative society, each person
nominated by the Government on the committee shall have one vote; and
Provided that where the Government had subscribed to the Share
Capital of such cooperative society, the voting rights of the
Government nominees shall be in proportion to the Share Capital of
the Government in the paid-up equity of the cooperative society
which shall be distributed among nominated members equally;
(d) if a member is in default in payment of the sum demanded by the co-operative
society or has transferred his interest in a co-operative society to any other
member or to any other person without the approval of the competent authority,
he shall have no voting right in the general body meeting of the co-operative
society.
(e) “if a co-operative society becomes defunct and has ceased to function in
accordance with the bye-laws and co-operative principles, its representative shall
have no voting right in the affairs of a federal co-operative society or financial
bank or financial society.”
Explanation I. - Default means any default in payment of loan installment, land
money, construction money and annual subscription payable as provided in the
bye-laws of a co-operative society for which due notice for payment has been
served on the member or an award has been passed for recovery of such sum.
* Explanation II. –Defunct society means a society which has not carried on
business for three consecutive years or its accounts have not been audited for
three or more consecutive years.
Manner of exercising vote.
26.(1) Every member of a co-operative society shall exercise his vote in person and no
member shall be permitted to vote by proxy.
(2) Notwithstanding anything contained in sub-section (1), a co-operative society
which is a member of another co-operative society, may appoint one of its
member to vote on its behalf in Excerpt shown. Open the full act in Lexace.