LexThe Himachal Pradesh Cooperative Societies Act, 1968
Himachal Pradesh · state statute
Open in Lexace · Ask the AI about this actTHE HIMACHAL PRADESH CO-OPERATIVE SOCIETIES ACT,
1968
ARRANGEMENT OF SECTIONS
Sections:
CHAPTER I
PRELIMINARY
1. Short title, extent and commencement.
2. Definitions.
CHAPTER II
REGISTRATION OF CO-OPERATIVE SOCIETIES
3. Registrar.
4. Societies which may be registered.
5. Registration with limited or unlimited liability.
6. Restrictions on holding of shares.
7. Application for registration.
8. Registration.
9. Evidence of registration.
10. Societies to be bodies corporate.
11. Amendment of bye-laws of a co-operative society.
12. Change of name and its effect.
13. Change of liability.
14. Amalgamation, transfer of assets and liabilities, conversion and
division of societies.
15. Cancellation of registration certificate of co-operative societies
in certain cases.
16. Partnership of societies.
CHAPTER III
MEMBERS OF CO-OPERATIVE SOCIETIES AND
THEIR RIGHTS AND LIABILITIES
17. Persons who may become members.
18. Nominal or associate members.
19. Members not to exercise rights till due payment made.
20. Votes of members.
21. Manner of exercising vote.
THE HIMACHAL PRADESH CO-OPERATIVE SOCIETIES ACT, 1968 2
22. Restrictions on transfer of shares or interest.
23. Transfer of interest on death of a member.
24. Disposal of share or interest of expelled, resigned or insane
member.
25. Disposal of moneys due to an expelled or resigned or insane
member.
26. Rights of members to see books, etc.
27. Share or interest not liable to attachment.
28. Liability of members.
29. Liability of past member and estate of deceased member.
30. Members to furnish information as to their financial position
and alienation of their immovable property.
CHAPTER IV
MANAGEMENT OF CO-OPERATIVE SOCIETIES
31. Final authority in co-operative society.
32. Annual general meeting.
33. Special general meeting.
34. Constitution of the Managing Committee.
34-A. Appointment of managing committee member by the Registrar.
35. Nominees of the Government and other nominees on the
committee of co-operative societies.
35-A. Power of Registrar to constitute new committee in certain cases.
35-B. Appointment, powers and functions of Managing Directors.
36. Powers to depute Government servant to manage affairs of co-
operative society.
37. Supersession of committee.
38. Securing possession of records.
CHAPTER V
DUTIES AND OBLIGATIONS OF CO-OPERATIVE
SOCIETIES
39. Address of societies.
40. Right of members to service s by society and application for
redress.
41. Liability to furnish information.
THE HIMACHAL PRADESH CO-OPERATIVE SOCIETIES ACT, 1968 3
CHAPTER VI
PRIVILEGES OF CO-OPERATIVE SOCIETIES
42. Charges and set off in respect of shares or interest of members.
43. Register of members.
44. Proof of entries in society’s books.
45. Exemption from compulsory registration of instruments.
46. Deduction from salary to meet society’s claim in certain cases.
47. Charge on immovable properties of members borrowing loans
from certain societies.
48. Other forms of State aid to co-operative societies.
49. Limitation.
50. Exemption from certain taxes, fees and duties.
51. Insolvency of members.
52. First charge of co-operative societies on certain assets.
CHAPTER VII
PROPERTIES AND FUNDS OF CO-OPERATIVE
SOCIETIES
53. Investment of funds.
54. Contribution to co-operative education fund.
55. Funds not to be divided.
56. Appropriation of profits.
57. Reserve fund.
58. Regulation of loan making policy.
59. Restrictions on borrowings.
60. Restrictions on other transactions with non-members.
CHAPTER VIII
AUDIT, INQUIRY, INSPECTION AND SURCHARGE
61. Audit.
62. Nature of audit.
63. Auditor’s report.
64. Rectification of defects.
65. Inspection of co-operative societies.
66. Inspection of books of an indebted co-operative society.
THE HIMACHAL PRADESH CO-OPERATIVE SOCIETIES ACT, 1968 4
67. Inquiry by the Registrar.
68. Cost of inquiry.
69. Surcharge.
70. Access to documents.
71. Powers of civil court.
CHAPTER IX
SETTLEMENT OF DISPUTES
72. Disputes may be referred to arbitration.
73. Reference of disputes to arbitration.
74. Attachment before award.
75. Finality of award.
76. Notice necessary in suits.
77. Power of Registrar to sanction compromise between a society
and its creditors.
CHAPTER X
WINDING UP AND DISSOLUTION OF CO-OPERATIVE
SOCIETIES
78. Order for the winding up of a society.
79. Appointment of a liquidator.
80. Powers of liquidator.
81. Priority of contribution assessed by liquidator.
82. Liquidator to deposit the books and submit a final report.
83. Power of Registrar to cancel order of winding up or of
registration of co-operative society.
84. Bar of suit in winding up and dissolution matters.
85. Disposal of surplus assets.
CHAPTER XI
EXECUTION OF AWARDS, DECREES, ORDERS AND
DECISIONS
86. Enforcement of charge.
86-A. Powers of a financing bank to proceed against defaulting
members of a co-operative society.
86-B. Powers of a financing bank to proceed against the members of a
co-operative society.
87. Execution of orders.
THE HIMACHAL PRADESH CO-OPERATIVE SOCIETIES ACT, 1968 5
88. Execution of orders of liquidator.
89. Registrar or person empowered by him to be civil court for
certain purposes.
90. Recovery of sums due to Government.
90-A. Recovery of crop loans.
CHAPTER XII
JURISDICTION, APPEAL AND REVIEW
91. Indemnity.
92. Bar of jurisdiction of courts.
93. Appeal.
94. Review and revision.
95. Interlocutory orders.
CHAPTER XIII
OFFENCES AND PENALTIES
96. Offences.
97. Cognizance of offences.
CHAPTER XIII-A
INSURED CO-OPERATIVE BANKS
97-A. Winding up order of insured banks.
CHAPTER XIV
MISCELLANEOUS
98. Constitution of State co-operative Council, its functions, etc.
99. Prohibition against the use of the word co-operative.
100. Power to exempt co-operative societies from provisions of this
Act.
101. Service of notice under the Act.
102. Acts of co-operative societies not invalidated by certain defects.
103. Companies Act not to apply.
104. Branches etc. of societies outside the State.
105. Liability of a Government servant in connection with the affairs
of a co-operative society.
106. Repeal.
107. Savings of existing society.
108. Appointment of a Co-operative Appellate Tribunal.
THE HIMACHAL PRADESH CO-OPERATIVE SOCIETIES ACT, 1968 6
CHAPTER XV
POWER TO MAKE RULES
109. Power to make rules.
THE HIMACHAL PRADESH CO-OPERATIVE SOCIETIES
ACT, 1968
(ACT NO. 3 OF 1969)1
(Received the assent of the President on the 22 nd February, 1969 and
was published in the Rajpatra, Himachal Pradesh (Extra -ordinary), dated the
19th July, 1969, pp. 665-699).
An Act to consolidate and amend the law relating to co-operative societies
in Himachal Pradesh.
Amended, repealed or otherwise affected by,-
1. H.P. Act 15 of 1972 2, assented to by the Governor on the 21 st
August, 1972 , published in the Rajpatra, Himachal Pradesh
(Extra-ordinary), dated the 7th September, 1972, pp. 798-799.
2. The Himachal Pradesh Adoption of L aws (State and
Concurrent Subjects) Order, 1973, published in the Rajpatra,
Himachal Pradesh (Extra-ordinary), dated the 20 th January,
1973, pp. 91-112.
3. H.P. Act No. 7 of 1976 3 assented to by the Governor on the
29th March, 1976 , published in Rajpatra, Him achal Pradesh
(Extra-ordinary), dated the 1st April, 1976, pp. 1032-1038.
4. H.P. Act No. 24 of 1978 4 assented to by the Governor on 4 th
May, 1978, published in the Rajpatra, Himachal Pradesh
(Extra-ordinary), dated 10th May, 1978, pp. 536-537.
5. H.P. Act No. 13 of 19815 assented to by the Governor on 19 th
May 19 81, published in the Rajpatra, Himachal Pradesh
(Extra-ordinary), dated 21-5-1981, pp. 370-373.
1. For Statement of Objects and Reasons, see the Rajpatra, Himachal Pradesh
(Extra-ordinary), dated the 17th July, 1968, p. 564.
2. For Statement of Objects and Reasons, see the Rajpatra, Himachal Pradesh
(Extra-ordinary), dated the 10th June, 1972, p. 514.
3. For Statement of Objects and Reasons, see the Rajpatra, Himachal Pradesh
(Extra-ordinary), dated the 17th March, 1976, p. 875.
4. For Statement of Objects and Reasons see the Rajpatra, Himachal Pradesh (Extra-
ordinary), dated 12th April, 1978, p. 346.
5. For Statement of Objects and Reasons see the Rajpatra, Himachal Pradesh (Extra-
ordinary), dated 2nd April, 1981, p. 220
THE HIMACHAL PRADESH CO-OPERATIVE SOCIETIES ACT, 1968 7
6. H.P. Act No. 20 of 1986 1 assented to by the Governor on 17th
September, 1986, published in the Rajpatra, H imachal
Pradesh (Extra -ordinary), dated 20 th September, 1986, p p.
1534-1536.
7. H.P. Act No. 19 of 2006 2 assented to by the Governor on 28 th
September, 2006, published both in Hindi and English in the
Rajpatra, Himachal Pradesh (Extra -ordinary), dated 30th
September, 2006, pp. 4931-4936.
8. H.P. Act No. 21 of 2013 3 assented to by the Governor on 5 th
January, 2013, published both in Hindi and English in the
Rajpatra, Himachal Pradesh , dated 30th January, 2013, p p.
6601-6603.
9. H.P. Act No. 24 of 2013 4 assented to by the Governor on 20th
May, 2013, published both in Hindi and English in the
Rajpatra, Himachal Pradesh, dated 29th May, 2013, pp. 1304-
1307, effective from 14th February, 2013.
10. H.P. Act No. 20 of 2015 5 assented to by the Governor on 24th
May, 2015, published both in Hindi and English in the
Rajpatra, Himachal Pradesh, dated 30th May, 2015, pp. 1075-
1078, effective from 1st April, 2014.
11. H.P. Act No. 9 of 2020 6 assented to by the Governor on the
27th October, 2020 and was published in the Rajpatra (e -
Gazette), Himachal Pradesh dated 9 th November, 2020, pp.
5067-5072).
1. For Statement of Objects and Reasons see the Rajpatra, Himachal Pradesh (Extra-
ordinary), d ated 16th August, 1986 , p. 1363 . Act c ame into force from 7th
January, 1988 vide Notification No. co-operative. E(11)21/74 -IV, dated
30th December, 1987, published in the Rajpatra, Himachal Pradesh (Extra-
ordinary) dated 26th April, 1988, p. 582.
2. Passed in Hindi by the Himach al Pradesh Vidhan Sabha. For Statement of
Objects and Reasons see the Rajpatra, Himachal Pradesh (Extra -ordinary), dated
25th August, 2006, pp. 3959 and 3962.
3. Passed in Hindi by the Himachal Pradesh Vidhan Sabha. For Statement of
Objects and Reasons se e the Rajpatra, Himachal Pradesh dated 29th August,
2012, pp. 3142 and 3144.
4. Passed in Hindi by the Himachal Pradesh Vidhan Sabha. For Statement of
Objects and Reasons see the Rajpatra, Himachal Pradesh dated 9th April, 2013, pp
227-228 and 230.
5. Passed in Hindi by the Himachal Pradesh Vidhan Sabha. For Statement of
Objects and Reasons see the Rajpatra, Himachal Pradesh dated 9th April, 2015, pp
201-204.
6. Passed in Hindi by the Himachal Pradesh Vidhan Sabha. For Statement of Objects
and Reasons see the Rajpatra (e-Gazette), Himachal Pradesh dated 14th September,
2020, pp. 3522 and 3525-3526.
THE HIMACHAL PRADESH CO-OPERATIVE SOCIETIES ACT, 1968 8
BE it enacted by the Legislative Assembly of Himachal Pradesh in the
Nineteenth Year of the Republic of India as follows:-
CHAPTER I
PRELIMINARY
1. Short title, extent and commencement .- (1) Th is Act may be
called the Himachal Pradesh Co-operative Societies Act, 1968.
(2) It extends to the whole of Himachal Pradesh.
(3) It shall come into force on such date 1 as the State Government
may, by notification in the Official Gazette, appoint in this behalf.
2. Definitions.- In this Act, unless there is anything repugnant in the
subject or context,-
2[(1) “Auditor” means an auditor or auditors or auditing firm or an
officer or official of the Government as included in the panel
constituted under section 61.
(1A) “Bye-law” means a bye -law registered or deemed to have
been registered under this Act; and includes a registered
amendment of the bye-law;
(1B) “Collector” means the Collector of a district and includes a
Deputy Commissioner and any other offic er specially
appointed by the State Government to perform the functions
of the Collector under this Act;]
(2) “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;
(3) “Co-operative society” means a society registered or
deemed to be registered under this Act;
(4) “Co-operative society with unlimited liability ” means a co-
operative society the liability of whose members is
unlimited for the pu rpose of contributing jointly and
severally to any deficiency in the assets of the society in the
event of its being wound up;
(5) “Co-operative society with limited liability ” means a co-
operative 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, thereby, undertake to contribute to the assets
of the society in the event of its being wound up;
1. The Act came into force from the 14th January 1971 vide Notification No. 5-8/69-
Co-op (S), dated the 13 th January, 1971, published in the Rajpatra, Himachal
Pradesh (Extra-ordinary), dated 14th January, 1971, p. 15.
2. Substituted for the existing clauses (1) and (1a) vide H.P. Act No. 9 of 2020.
THE HIMACHAL PRADESH CO-OPERATIVE SOCIETIES ACT, 1968 9
1[(6) Co-operative year” shall mean the year commencing on the
1st day of April;]
2[(6-A) “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);]
(7) “Dispute” means any matter capable of being the subject of
civil litigation and includes a claim in respect of any sum
payable to or by a co-operative society whether such claim
be admitted or not;
(8) “Family” means husband, wife and unmarried s ons and
daughters;
(9) “Federal society” means a society not less than three -fourth
of the members of which are societies;
(10) “Member” means a person joining in the application for the
registration of a co-operative society and a person admitted
to membe rship after such registration in accordance with
this Act, the rules and the bye -laws, and includes a nominal
and an associate member;
(11) “Officer” means the President, Vice -President, Chairman,
Vice-Chairman, Secretary, Assistant Secretary, Manager,
Member of a Committee, Treasurer, Liquidator,
Administrator and includes any other person empowered
under the rules or the bye -laws to give directions in regard
to the business of a co-operative society;
(12) “Registrar” means Registrar of Co-operative Societies
appointed under section 3, and includes any person
appointed to assist the Registrar on whom all or any of the
powers or duties of the Registrar have been or has been
conferred or imposed, under this Act;
3[(12-A) “Reserve Bank ” means the Reserve Bank of India
constituted under the Reserve Bank of India Act, 1934 (2 of
1934);]
(13) “Rules” means rules made or deemed to be made under this
Act;
(14) “Prescribed” means prescribed by rules made under this
Act;
(15) “Society” or “Registered society ” means a co-operative
society registered or deemed to be registered under this Act;
1. Clause (6) substituted vide H.P. Act No. 19 of 2006.
2. Clause (6-A) inserted vide H.P. Act No. 13 of 1981.
3. (12-A) inserted vide H. P. Act No. 13 of 1981.
THE HIMACHAL PRADESH CO-OPERATIVE SOCIETIES ACT, 1968 10
(16) “State Government ” or “Government” unless expressed
otherwise, means the Government of Himachal Pradesh;
1[(17) “State” means the State of Himachal Pradesh;]
(18) “Official Gazette” means the Rajpatra, Himachal Pradesh;
and
(19) “Financing bank” means a co-operative society the objects
of which include the creation of funds to be lent to other co-
operative societies.
CHAPTER II
REGISTRATION OF CO-OPERATIVE SOCIETIES
3. Registrar.- 2[(1) The State Government may appoint a person to be
the Registrar of Co-operative Societies for the State and may appoint such
number of Additional Registrars, Joint Registrars, Deputy Registrars,
Assistant Registrars and other persons, as it may think fit to assist him.]
(2) The State Government may, by general or special order, confer on
any person appointed to assist the Registrar all or any of the powers of the
Registrar under this Act.
(3) Every person appointed to assist the Registrar shall exe rcise the
powers conferred on him under sub -section (2) subject to the general
guidance, superintendence and control of the Registrar.
3[(4) Notwithstanding anything contained in this Act, where any
power of the Registrar is exercised by any other person appointed under sub-
section (1) to assist the Registrar, the order passed or decision made by such
person shall, for the purpose of appeal, not be deemed to be the order or
decision of the Registrar.]
4. Societies which may be registered .- Subject to the provisions of
this Act, and any rules framed thereunder, a co-operative society which has, as
its objects, the promotion of the economic and social interests of its members
or the public in accordance with the co-operative principles, or a co-operative
society established with the object of facilitating the operations of such a
society, including a society formed by the division of any existing co-
operative society or amalgamation of existing co-operative societies, may be
registered under this Act.
5. Registration with limited or un limited liability .- (1) A co-
operative society may be registered with or without limited liability:
Provided that -
(i) the liability of a co-operative society of which any member is
1. Clause (17) amended vide A.O. 1973 and substituted vide H.P. Act No. 19 of
2006.
2. Sub-section (1) substituted vide H.P. Act No. 19 of 2006.
3. Sub-section (4) inserted vide H.P. Act No. 19 of 2006.
THE HIMACHAL PRADESH CO-OPERATIVE SOCIETIES ACT, 1968 11
a co-operative society shall be limited; and
(ii) no co-operative society shall be registered as a society with
unlimited liability if, amongst its objects, it also includes any
object other than the advancement of loans to its members.
(2) The word `limited' or its equivalent in any Indian lan guage shall
be the last word in the name of co-operative society registered or deemed to
be registered under this Act with limited liability.
6. Restrictions on holding of shares.- In any co-operative society, no
member other than the State Government or any other co-operative society
shall-
(a) hold more than such portion of the total share capital of the
society not exceeding one-fifth thereof as may be prescribed,
or
(b) have or claim any interest in the shares of such society
exceeding 1[one lakh] rupees:
Provided that the State Government may, by notification in Official
Gazette, specify, in respect of any co-operative society, a higher maximum
than one-fifth of the share capital or a higher amount than 2[one lakh] rupees,
as the case may be 3[:]
4[Provided further that no individual member of a primary co -
operative bank shall hold more than five percent of the total paid up share
capital of such bank.
Explanation.- For the purpose of this section “primary co-operative
bank” means a bank as has been defined in the Banking Regulation Act, 1949
(10 of 1949).]
7. Application for registration .- (1) An application for the
registration of a co-operative society shall be made to the Registrar in such
form as may be prescribed and the applicants shall furnis h to him all such
information about the society as he may require.
(2) Every such application shall conform to the following:-
(a) the application shall be accompanied by three copies of the
bye-laws of the co-operative society;
(b) where all the applic ants are individuals, the number of
applicants shall not be less than ten, each of such ten persons
being a member of a different family and competent to
contract under section 11 of the Indian Contract Act, 1872 (9
of 1872), and where all the applicants a re not individuals, the
1. Substituted for the words “ten thousand” vide H.P. Act No. 9 of 2020.
2. Substituted for the words “ten thousand” vide H.P. Act No. 9 of 2020.
3. Substituted for the sign “.” vide H.P. Act No. 9 of 2020.
4. Proviso and explanation inserted vide H.P. Act No. 9 of 2020.
THE HIMACHAL PRADESH CO-OPERATIVE SOCIETIES ACT, 1968 12
number of such applicants shall not be less than five;
(c) every one of the applicants who is an individual shall be
above the age of 18 years; and
(d) where the objects of the co-operative society include the
creation of funds to be lent to its members and where all the
applicants are individuals, the applicants shall reside in the
same town or village or in the same group of villages, or
belong to a common interest or pursue the same occupation.
(3) The application shall be signed-
(a) in the case of society of which no member is a co-operative
society, by all individuals as qualified in accordance with the
requirements of clause (b) and clause (c) of sub -section (2);
and
(b) in the case of a society of which a member is a soc iety, by a
duly authorised person on behalf of every such society, and
where all the members of the society are not societies, by all
other members.
8. Registration.- 1[(1) On receipt of an application for registration of
a co -operative society, the Regis trar shall enter the particulars of the
application in the Register of the applications to be maintained either
manually or electronically, and give a serial number to the application and
thereafter shall register the society and its bye-laws if-
(a) the aims of the proposed society are not contrary to the
provisions of this Act and the rules made thereunder; and
(b) the aims of the proposed society are not inconsistent with the
principles of the social justice, as may be prescribed.]
(2) 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.
(3) If the Registrar fails to dispose of the application within the period
specified in sub -section (2), the applicant society s hall be deemed to have
been registered.
(4) When the Registrar refuses to register a society, he shall
communicate the order of refusal, together with the reasons therefor to such of
the applicants as may be prescribed.
9. Evidence of registration .- Where a co-operative society is
registered under this Act or is deemed to have been registered under sub -
section (3) of section 8, the Registrar shall issue a certificate of registration
signed by him, which shall be conclusive evidence that the society therei n
mentioned is a society duly registered under this Act, unless it is proved that
1. Sub-section (1) substituted vide H.P. Act No. 9 of 2020.
THE HIMACHAL PRADESH CO-OPERATIVE SOCIETIES ACT, 1968 13
the registration has been cancelled.
10. Societies to be bodies corporate .- The registration of a co-
operative society shall render it a body corporate by the name under whi ch it
is registered, having perpetual succession and a common seal, and with power
to hold property, enter into contracts, institute and defend suits and other legal
proceedings and to do all things necessary for the purposes for which it is
constituted.
11. Amendment of bye -laws of a co-operative society.- (1) No
amendment of any bye -law of a co-operative society shall be valid unless
approved by the resolution of a general meeting and registered under this Act
for which purpose three copies of the amendm ent shall be forwarded to the
Registrar as prescribed.
1[(2) On receipt of an application for amendment of bye -laws of a co-
operative society, the Registrar shall enter the particulars of the application in
the Register of applications to be maintained either manually or electronically;
and give a serial number to the application and thereafter may register the
amendment in the bye-laws if-
(a) the proposed amendments are not contrary to the provisions
of this Act and the rules made there under; and
(b) the proposed amendments are not inconsistent with the
principles of the social justice, as may be prescribed.].
(3) When the Registrar registers an amendment, he shall forward to
the 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 the bye -
laws, of a co-operative society, he shall communicate the order o f refusal
together with the reasons therefor to the society.
(5) Any amendment which is not disposed of by the Registrar within
90 days of its receipt, shall be deemed to have been registered under this Act
and the provisions of sub -section (3) of this section shall ap ply to such
amendment.
(6) 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.
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12. Change of name and its effect .- (1) A co-operative society may,
by an amendment of its bye-laws, change its name.
1. Sub-section (2) substituted vide H.P. Act No. 9 of 2020.
2. Section 11-A added vide H.P. Act No. 7 of 1976 and omitted vide H.P Act No. 9
of 2020.
THE HIMACHAL PRADESH CO-OPERATIVE SOCIETIES ACT, 1968 14
(2) Where a co-operative society changes its name, the Registrar shall
enter the new name on the register of co-operative societies in the place of the
former name and shall amend the certificate of registration accordingly.
(3) The change of name of a co-operative society shall not affect any
rights or obligations of the co-operative society, or of any of its members or
past members or decease d members; and any legal proceedings pending may
be continued by or against the society under its new name.
13. Change of liability.- (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 -law or con tract to the
contrary, any member or creditor shall, during a period of 3 months 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 exe rcise 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 -law of a co-operative society changing
the form or extent of its liability shall not be registered or take effect unt il,
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.
14. Amalgam ation, transfer of assets and liabilities, conversion
and division of societies .- (1) A co-operative society may, with the previous
approval of the Registrar and by resolution passed by a three -fourth majority
of the members present and voting at a special general meeting of the society-
(a) transfer its assets and liabilities in whole or in part to any
other society;
(b) divide itself into two or more co-operative societies and form
as such new societies;
(c) convert itself into any other class of so ciety and form as such
a new class of society 1[:]
2[Provided that in case of an insured co-operative bank, no resolution
under this sub-section shall be passed without the prior approval in writing of
1. Substituted for the sign “;” vide H.P. Act No. 13 of 1981.
2. Proviso inserted vide H.P. Act No. 13 of 1981.
THE HIMACHAL PRADESH CO-OPERATIVE SOCIETIES ACT, 1968 15
the Reserve Bank of India.]
(2) Any two or more co-operative societies may, with the previous
approval of the Registrar and by a resolution passed by a three-fourth majority
of the members present and voting at a special general meeting of each such
society, amalgamate themselves and form a new 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,
conversion or amalgamation, as the case may be.
(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 three months 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
resolution.
(6) A resolution passed b y 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, or
(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) When a resolution passed by a society under this section involves
transfer of any assets and liabilities, the resolution shall, notwithstanding
anything contained in any law for the time be ing in force, be sufficient
conveyance to vest the assets and liabilities in the transferee without any
further assurance.
1[XXXXXXXXXXXXXXXXXXXX.]
15. Cancellation of registration certificate of co-operative societies
in certain cases .- (1) When the who le of the assets and liabilities of a co-
operative society are transferred to another society in accordance with the
provisions of section 14, the registration of the first mentioned society shall
stand cancelled and that society shall be deemed to have be en dissolved and
shall cease to exist as a corporate body.
(2) When two or more co-operative societies are amalgamated into a
new co-operative society in accordance with the provisions of section 14, the
registration of each of the amalgamating societies shall stand cancelled on the
registration of the new society and each such society shall be deemed to have
1. Section 14-A inserted vide H. P. Act No. 7 of 1976 and omitted vide H.P Act No.
9 of 2020.
THE HIMACHAL PRADESH CO-OPERATIVE SOCIETIES ACT, 1968 16
been dissolved and shall cease to exist as a corporate body.
(3) Where a society divides itself into two or more societies in
accordance with the pr ovisions of section 14, the registration of that society
shall stand cancelled on the registration of new societies and that society shall
be deemed to have been dissolved and shall cease to exist as a corporate body.
(4) When a co-operative society is co nverted from one class to
another in accordance with section 14, the registration of the first mentioned
class of society shall stand cancelled and society shall be deemed to have been
dissolved and shall cease to exist as a corporate body.
16. Partnershi p of societies .- (1) Any two or more societies may,
with the prior approval of the Registrar, by resolution passed by three -fourth
majority of the members present and voting at a special general meeting of
each such society, enter into partnership for carrying out any specific business
or businesses provided that each member has had clear ten days' written notice
of the date of the meeting.
(2) Nothing in the Indian Partnership Act, 1932 (9 of 1932), shall
apply to such partnership.
CHAPTER-III
MEMBERS OF CO-OPERATIVE SOCIETIES AND THEIR
RIGHTS AND LIABILITIES
17. Persons who may become members .- No person shall be
admitted to membership 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 registered society (except a society under
liquidation proceedings);
(c) State Government; and
(d) such class or classes of persons or associations of persons as
may be notified by the State Government in this behalf.
18. Nominal or associate members .- (1) Notwithstanding anything
contained in section 17, a society may also have the following kinds of
members:-
(a) nominal members; and
(b) associate members.
(2) (a) A person with whom the co-operative society has or proposes
to have business dealings may be admitted as a nominal
member.
(b) In the school stores or any other such societies, a minor may
be admitted as an associate member.
THE HIMACHAL PRADESH CO-OPERATIVE SOCIETIES ACT, 1968 17
(c) A nominal or an associate member shall have no right to
share in the profits of the society, nor shall he be eligible for
the membership of the committee, nor shall he be entitled to
such privileges and rights as may be specified in the bye-laws
of the society in preference over a member.
(3) Save as provided in this section, a nominal or an associate member
shall have such privileges and rights of a member, as may be specified in the
bye-laws of the society.
19. Members not to exercise rights till due payment made .- No
member of a society shall exer cise the rights of a member unless he has made
such payments to the society in respect of membership or has acquired such
interest in the society as may be prescribed by the rules or the bye -laws of
such society.
20. Votes of members .- Every member of a s ociety shall have one
vote, in the affairs of a society:
Provided that-
(a) nominal or associate member shall not have right of vote;
(b) in the case of equality of votes, the Chairman shall have a
casting vote;
(c) where the Government is a member of the society, each
person nominated 1[under section 35 or appointed as
Managing Director under section 35 -B] by the Government
on the committee shall have one vote;
(d) where a share of a society is held jointly by more than one
person, only the person w hose name stands first in the share
certificate and in its absence, in the member register shall
have the right to cast one vote; and
(e) save as otherwise provided in the bye -laws, a minor to whom
the share of a deceased member is transferred under sect ion
23 shall not be entitled to vote.
21. Manner of exercising vote .- (1) Every member of a 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), the society
which is a member of another society, may appoint such number of its
members as may be prescribed, to vote in the affairs of such other society.
22. Restrictions on transfer of shares or interest .- (1) The transfer
of a share or interest in the capital of a society shall be subject to such
conditions and restrictions, as to the maximum holding as are specified in
section 6.
1. Inserted vide H. P. Act No. 20 of 1986, effective from 7th January, 1988.
THE HIMACHAL PRADESH CO-OPERATIVE SOCIETIES ACT, 1968 18
(2) A member shall not transfer any share held by him or his interest
in the capital or property of any society or any part thereof unless-
(a) he has held such share or interest for not less than one year;
(b) the transfer is made to the society or to a member of the
society or to a person whose application for membership has
been accepted by the society; and
(c) the committee has approved such transfer.
23. Transfer of interest on death of a member .- (1) On the death of
a member of a society, the society shall transfer the share or interest of the
deceased member to a person or persons nominated in accordance with rules
or if no person has been nominated, to such person as may appear to the
committee to be the heir or legal representative of the deceased member:
Provided that such nominee, heir or legal representative, as the case
may be, is admitted as a member of the society:
Provided further that nothing in this sub -section shall prevent a minor
or a person of unsound mind from acquiring by inheritance or otherwise the
share or interest of a deceased member in a co-operative society.
(2) Notwithstanding anything contained in sub section (1), any such
nominee heir or legal representative, as the case may be, may require the
society to pay to him the value of the share or interest of the deceased member
ascertained in accordance with the rules.
(3) A Society may pay all othe r moneys due to the deceased member
from the society to such nominee, heir or legal representative, as the case may
be.
(4) All transfers and payments made by a society in accordance with
the provisions of this section shall be valid and effectual against any demand
made upon the society by any other person.
24. Disposal of share or interest of expelled, resigned or insane
member.- When a member of a society is expelled or resigns in accordance
with the rules or the bye-laws, or when a member becomes insane,-
(a) his share or interest shall be transferred to another person
qualified to be the transferee in accordance with the provisions
of section 22, and the value thereof determined in accordance
with the rules, shall be paid to such member or, if he is insane,
to any person appointed to manage his properties under the
Indian Lunacy Act, 1912 (4 of 1912); or
(b) in case of a society with unlimited liability if the bye -laws so
provide, the value of his shares or interest determined in
accordance with th e rule, shall be paid to him, or, if he is
insane, to any person appointed to manage his properties under
the Indian Lunacy Act, 1912 (4 of 1912).
THE HIMACHAL PRADESH CO-OPERATIVE SOCIETIES ACT, 1968 19
25. Disposal of moneys due to an expelled or resigned or insane
member.- All sums calculated in accordance with the rules to be due from a
society to a member, other than payments in respect of the share or interest of
such member of the society, shall, subject to the provisions of section 22, be
paid:-
(a) in the case of a member who has been expelled or has
resigned from a society, to him; and
(b) in the case of a member who has become insane, to any
person appointed to manage his properties under the Indian
Lunacy Act, 1912 (4 of 1912).
26. Rights of members to see books, etc .- (1) Every society shall
keep open to inspection for its members or non -members free of charge, at all
reasonable times, at the registered address of the society-
(a) a copy of this Act;
(b) a copy of the rules;
(c) a copy of the bye-laws of the society; and
(d) a register of members.
(2) All registers and records of a society except books and other
documents relating to accounts other than one's own shall be open to
inspection in the office of the society by any member of such society on
payment of such fees as may be specified in the bye-laws.
(3) Subject to such conditions and payment of such fee s as may be
specified in the bye -laws, the society shall, on an application made by any
member thereof, grant him a certified copy of such records or registers or
extracts thereof.
27. Share or interest not liable to attachment .- Subject to the
provisions of section 42, the share or interest or contribution of a member in
the capital of a registered society shall not be liable to attachment or sale
under any decree or order of a court , in respect of any debt or liability
incurred by such member, nor shall a receiver under the Provincial Insolvency
Act, 1920 (5 of 1920), be entitled to have any claim on such shar e or interest
or contribution.
28. Liability of members.- The members of a society shall, upon the
winding up of the society, be jointly and severally liable to contribute towards
any deficiency in the assets of the society-
(a) in the case of a society with unlimited liability, without limit;
and
(b) in the case of a societ y with limited liability, subject to such
limitation of amount as may be provided in the bye-laws.
29. Liability of past member and estate of deceased member .- (1)
Subject to the provisions of sub-section(2), the liability of a past member or of
THE HIMACHAL PRADESH CO-OPERATIVE SOCIETIES ACT, 1968 20
the estate of a deceased member of a co -operative society for the debts of the
society as they existed-
(a) in case of a past member, on the date on which he ceased to
be a member;
(b) in the case of a deceased member on the date of his death;
shall continue for a period of two years from such date.
(2) Where a co -operative society is ordered to be wound up under
section 78, the liability of a past member or of the estate of deceased member
who ceased to be a member or died within 2 years, immediately preceding the
date on which the order of winding up takes effect, shall continue until the
entire liquidation proceedings are completed, but such liability shall extend
only to the debts of the society as they existed on the date of his ceasing to be
a member or death, as the case may be.
30. Members to furnish information as to their financial position
and alienation of their immovable property .- (1) A full, true and accurate
statement of his assets and liabilities shall be furnished-
(a) by an applicant for me mbership of a society with unlimited
liability, with his application;
(b) by a member of a society with unlimited liability when
required to do so by the Registrar or any person authorised by
him by a general or special order or by the financing bank;
and
(c) by a member of any other society, with an application for a
loan or for acceptance as a surety.
(2) A member of a society shall, before the completion of each such
transaction, furnish to the society of which he is a member, full, true and
accurate information regarding any sale, mortgage, or transfer in any form
whatsoever of his immovable property or any portion or share thereof and
regarding any debt proposed to be incurred on the security of such property.
CHAPTER IV
MANAGEMENT OF CO-OPERATIVE SOCIETIES
31. Final authority in co-operative society.- The final authority in a
co-operative society shall vest in the general body of members in a general
meeting:
Provided that where the bye -laws of a co -operative society provide
for the constitution of a smaller body consisting of delegates of members of
the society elected or selected in accordance with such bye -laws, the smaller
body shall exercise such powers of the general body as may be prescribed or
as may be specified in the bye -laws of the s ociety 1[but shall not have the
power to conduct election of managing c ommittee and to amend the bye -
1. Substituted for the sign “:” vide H.P. Act No. 19 of 2006.
THE HIMACHAL PRADESH CO-OPERATIVE SOCIETIES ACT, 1968 21
laws:]
Provided further that nothing in this section shall affect any powers
conferred on a committee or any officer of a co -operative society by the rules
or the bye-laws.
32. Annual general meeting.- (1) A general meeting of every society
shall be held once at least in every co-operative year for the purpose of-
(a) approval of the programme of activities of the society
prepared by the committee for the ensuing year;
(b) election, if any, in the prescribed manner of the members of
the committee other than the nominated members;
(c) consideration of the audit report and the annual report;
(d) disposal of the net profits; and
(e) consideration of any other matter which may be brought
forward in accordance with the bye-laws.
(2) Such meeting shall be held not more than 15 months after the date
of the last preceding meeting held Excerpt shown. Open the full act in Lexace.