The JAMMU AND KASHMIR CO-OPERATIVE SOCIETIES ACT, 1989

CO-OPERATIVE SOCIETIES
ACT, 1989
(Act No. X of 1989)
376 CO-OPERA TIVE SOCITIES ACT, 1989
CO-OPERA TIVE SOCITIES ACT, 1989 377
THE JAMMU AND KASHMIR CO-OPERATIVE SOCIETIES
ACT, 1989
(Act No. X of 1989)
CONTENTS
SECTION.
CHAPTER I
PRELIMINARY
1. Short title, extent and commencement.
2. Definitions.
CHAPTER II
REGISTRATION OF CO-OPERATIVE SOCIETIES
3. The Registrar.
4. Societies which may be registered.
5. Application for registration of  Co-operative Societies.
6. Registration.
7. Registration certificate.
8. Registration with limited or unlimited liability.
8A. Conversion.
9. Amendment of the bye-laws of Co-operative Society. 
10. Power to direct amendment of bye-laws
11. Change of name of Co-operative Society.
12. When amendment of bye-laws comes into force.
13. Change of liability.
14. Amalgamation, transfer of  assets and liabilities and division of Co-
operative Societies.
15. Cancellation of registration certificate of Co-operative Societies in certain
cases.
378 CO-OPERA TIVE SOCITIES ACT, 1989
SECTION.
16. Re-organisation of  Societies.
CHAPTER III
MEMBERS OF CO-OPERATIVE SOCIETIES, THEIR RIGHTS AND
LIABILITIES
17. Persons who may become members.
18. Nominal or associate members.
19. Member not to exercise rights till due payment made.
20. V otes for members.
21. Manner of exercising vote.
22. Restrictions on holding of shares.
23. Restriction on transfer of shares or interest.
24. Transfer of interest on death of member.
25. Liability of a past member and estate of deceased member.
CHAPTER IV
MANAGEMENT OF CO-OPERATIVE SOCIETIES
26. Final authority in a Co-operative Society.
27. Annual general meeting.
28. Special general meeting.
29. Election and nomination of members of Committees.
29A. Bar to election, nomination and continuance as member of Committees.
29B. Qualification for membership of the Committees.
30. Supersession/removal of Committee.
30A. Transitional provision.
30-B. Transitory provision for revival of certain Cooperative Banks.
31. Securing possession of records.
CO-OPERA TIVE SOCITIES ACT, 1989 379
SECTION.
32. Acts of Co-operative Societies not to invalidate by certain defects.
32A. Autonomy in all financial and internal administrative matters.
CHAPTER V
PRIVILEGES OF CO-OPERATIVE SOCIETIES
33. Co-operative Societies to be bodies corporate.
34. First charge of Co-operative Society on certain assets.
35. Declaration for creating charge.
36. Charge and set off in respect of shares or interest of members in the
capital or a Co-operative Society.
37. Shares or interest not liable to attachment.
38. Register of members.
39. Proof of entries in Co-operative society’s books.
40. Exemption from compulsory registration of instruments.
41. Exemption from certain taxes, fee and duties.
42. Deduction from salary to meet society’s claim in certain cases.
CHAPTER VI
GOVERNMENT AID TO  CO-OPERATIVE SOCIETIES.
43. Direct partnership of   Government in Co-operative Societies.
44. Indirect partnership of Government in Co-operative Societies.
45. Principal Government Partnership Fund.
46. Subsidiary Government Partnership Fund.
47. Approval of Government of purchase of shares.
48. Liability to be limited in respect of certain shares.
49. Restriction on amount of dividend.
50. Indemnity of apex and central societies.
380 CO-OPERA TIVE SOCITIES ACT, 1989
SECTION.
51. Disposal of share capital and dividend etc.
52. Disposal of Principal Government Partnership Fund and Subsidiary
Government Partnership Fund on winding up of an apex or a central
society.
53. Principal Government Partnership Fund and Subsidiary Partnership Fund
not to form part of assets.
54. Agreement by Government and apex societies subject to the foregoing
provisions of this Chapter.
55. Other forms of Government aid to Co-operative societies.
56. Provisions of this Chapter to over-ride other laws.
CHAPTER VII
PROPERTY AND FUNDS OF CO-OPERATIVE SOCIETIES.
57. Fund not to be divided.
58. Procedure for calculation of profits.
59. Disposal of net profits.
60. Investment of funds.
61. Restriction on loans.
62. Instructions on borrowings.
63. Restriction on other transactions with non-member.
CHAPTER VIII
AUDIT, ENQUIRY , INSPECTION AND SURCHARGE.
64. Audit.
65. Communication of defects in audit to Co-operative society.
66. Inspection of books of a Co-operative society.
67. Inquiry by Registrar.
68. Costs of inquiry.
69. Surcharge.
CO-OPERA TIVE SOCITIES ACT, 1989 381
SECTION.
CHAPTER IX
SETTLEMENT OF DISPUTES
70. Dispute which may be referred to arbitration.
71. Recovery of money by  Financing Bank.
72. Reference of disputes to the authorities or arbitration.
73. Recovery of sums advanced.
CHAPTER X
WINDING UP AND DISSOLUTION OF CO-OPERATIVE SOCIETY
74. Winding up of Co-operative Societies.
75. Liquidator.
76. Powers of liquidator.
77. Cancellation of registration of a Co-operative Society.
CHAPTER XI
AGRICUL TURE AND RURAL DEVELOPMENT BANK.
78. Definitions.
79. State and other Agriculture and Rural Development Banks.
80.Powers of Agriculture and Rural Development Bank to advance loans
and to hold lands.
81. Appointment of Trustee and his powers and functions.
82. Trustee to be a Corporation sole.
83. Issue of debentures by the Board.
84. Powers to borrow money by issue of bonds or by way of loan.
85. Charge of debentures holders on certain properties.
86. Guarantee by Government of Principal of, and interest on debentures
bonds etc.
87. Security for loans.
382 CO-OPERA TIVE SOCITIES ACT, 1989
SECTION.
88. Mode of dealing with applications for loans.
89. Other Guarantees by the  Government.
90. Order granting loan conclusive of certain matters.
91. Priority of mortgage over certain claims.
92. Right of Agriculture and Rural Development Bank or of the State
Agriculture and Rural Development Bank to purchase mortgaged
property.
93. Mortgages executed in favour of Agriculture and Rural Development
Bank to stand vested in State Agriculture and Rural Development Bank.
94. Registration of mortgages in favour of Agriculture and Rural Development
Bank.
95. Restriction or lease and transfer.
96. Recovery of loans by Agriculture and Rural Development Bank.
97. Power of Agriculture and Rural Development Bank to receive money and
grant discharges.
98. Right of Agriculture and Rural Development Bank to pay prior debts of
Mortgagor.
99. Distraint when to be made.
100. Power of sale when to be exercised.
101. Power of Agriculture and Rural Development Bank where mortgaged
property is destroyed or security becomes insufficient.
102. Power of Board or of Trustee to distrain and sell property etc.
103. Title of purchaser not to be questioned on the ground of irregularity etc.
104. Mortgage not to be questioned on insolvency of mortgagor.
105. Appointment of Receiver and his powers.
106. Mortgager’s powers to lease.
107. Registration of documents executed on behalf of an Agriculture and Rural
Development Bank or of the State Agriculture and Rural Development Bank.
CO-OPERA TIVE SOCITIES ACT, 1989 383
SECTION.
108. Delegation of certain power by the Board.
109. Sections 102, 103 and 104 of the Transfer of Property Act, 1882 to apply
to notice under this Chapter.
110. Power of the Board to make regulations.
111. Mortgage Bank to be Agricultural Class.
112. Over-riding effect.
CHAPTER XII
HOUSING SOCIETIES
113. Housing Co-operative Societies.
114. Definition for purposes of this Chapter.
115. Issue of debentures.
116. Appointment and powers of trustee.
117. Vesting property in trustee.
118. Guarantee by Government of principal of, and interest on debentures.
119. Guarantee Fund.
120. Rights of debenture holders.
121. Raising of loans from Government and funding agencies at National and
International levels.
122. Accepting of deposit.
123. Distraint when to be made.
124. Distraint how to be effected.
125. Sale of property distrained.
126. Power of sale of mortgage and property when and how to be exercised.
127. Application for sale and manner of sale.
128. Application to set aside sale.
129. Disposal of sale proceeds.
384 CO-OPERA TIVE SOCITIES ACT, 1989
SECTION.
130. Grant of certificate to purchaser.
131. Delivery of property to purchaser.
132. Appointment and power of receiver.
133. Title of purchaser not impeachable for irregularities.
134. Eviction of defaulter member and tenants etc. and applicability of the
Residential and Commercial Tenancy Act, 2012.
135. Appointment of Sale Officers.
136. Mortgages executed in favour of Housing Society to stand vested in
Housefed.
137. Requirement when property mortgaged is destroyed or security is
rendered insufficient etc.
138. Power of Board and Trustee to direct distraint sale.
139. Mortgage not to be questioned in insolvency of mortgagor.
140. Right of Housing Society to pay prior debts of mortgagor.
141. Power of Housing Society regarding mortgages transferred to Housefed.
142. Mortgages executed by Manager of Joint Hindu Family.
143. Non-applicability of Land Acquisition Act to Lands of Housing
Societies.
144. Proof of document or entries in documents.
145. Application of this Chapter to loans advance by Housing Society from
funds not borrowed from Housefed.
146. Application of provisions of Transfer of Property Act, Samvat 1977 to
notices.
147. Officers of Housing Societies and Sale Officers not to bid at sales.
148. Delegation of powers of Board.
149. Board’s power of supervision.
150. Regulation under this Chapter.
CO-OPERA TIVE SOCITIES ACT, 1989 385
SECTION.
151. Power to make rules.
CHAPTER XIII
EXECUTION OF A W ARDS, DECREES, ORDERS AND DECISIONS
152. Enforcement of charges.
153. Execution of orders etc.
154. Attachment of property before award or order.
155. Registrar or person empowered by him to be civil court for certain
purposes.
156. Recovery of sum due to Government.
CHAPTER XIV
APPEALS, REVISION AND REVIEW
157. Constitution of Co-operative Appellate Tribunal.
158. Appeals to Tribunal and other authorities.
159. Limitation for appeal.
160. Revision.
161. Review.
162. Interlocutory orders.
CHAPTER XV
OFFENCES AND PENAL TIES
163. Offences.
164. Cognizance of offences.
CHAPTER XVI
MISCELLANEOUS
165. Address of a Co-operative Society.
166. Copy of Act, Rules and Bye-laws to open to inspection.
386 CO-OPERA TIVE SOCITIES ACT, 1989
SECTION.
167. Prohibition against the use of the word “Co-operative”.
168. Notice necessary in suits.
169. Travelling and other allowances etc.
170. Securities etc.
171. Companies Act not to apply.
172. Saving of existing societies.
173. Indemnity.
174. Power of Civil Court.
175. Bar of Jurisdiction of Courts.
176. Power to make rules.
177. Repeal and savings.
–––––––
CO-OPERA TIVE SOCITIES ACT, 1989 387
* Now Union territory of Jammu and Kashmir.
1. Substituted for “the whole of the State of Jammu and Kashmir” by S.O. 3466 (E)
dated 05.10.2020.
2. Enforced w.e.f. 5-12-1999 vide SRO-538 dated 3-12-1999.
* * Now Official Gazette.
3. Existing clause (a) re-numbered as clause (aa) and before the so renumbered clause
(aa) clause (a) inserted by Act No. X of 2010, s. 2.
THE JAMMU AND KASHMIR CO-OPERATIVE
SOCIETIES ACT, 1989
(Act No. X of 1989)
[Received the assent of the Governor on 8th July, 1989 and published
in the Government Gazette dated 11th July, 1989].
An Act to consolidate and amend the law relating to Co-operative
Societies in the *State, with a view to providing for the orderly development
of the co-operative movement in the *State in accordance with the directive
principles of State policy enunciated in the Constitution of Jammu and
Kashmir.
Be it enacted by the Jammu and Kashmir State Legislature in the Thirty-
ninth Year of the Republic of India as follows :––
CHAPTER I
PRELIMINARY
1. Short title, extent and commencement.—(1) This Act may be called the
Jammu and Kashmir Co-operative Societies Act, 1989.
(2) It shall extend to 1[whole of the Union territory of Jammu and
Kashmir].
2[(3) It shall come into force on such date as the Government may, by
notification in the **[Government Gazette], appoint in this behalf.]
2. Definitions.—In this Act, unless the context otherwise requires,—
2[(a) “Apex Co-operative Bank” means a Co-operative Federation at State
level engaged in business of banking].
2[(aa)] “Board” means governing body of a Co-operative Society to
which the direction and control of the management of the affairs of the Society
is entrusted.
388 CO-OPERA TIVE SOCITIES ACT, 1989
(b) “Bye-laws” means the bye-laws for the time being in force which
have been registered under this act and includes amendments thereto which
have been duly registered under this Act.
1[(bb) “Central Co-operative Bank” means a central society engaged in
business of banking.
(bba) “Chartered Accountant” means a member of the Institute of Chartered
Accountants of India within the meaning of Chartered Accountants Act, 1949 (38 of
1949) ].
(c) “Chief Executive” means the Chief Executive of State Level Federation
Central Societies or Primary Societies by whatever designation called who shall
also be a member of the Board and other committees constituted by the Board.
(d) “Committee” means the governing body of a Co-operative Society to
whom the management of its affairs is entrusted.
(e) “Co-operative Bank” means Co-operative Society which undertakes
banking business.
2[(ee) “Co-operative Credit Structure Society” includes the Apex Co-
operative Bank, a Central Co-operative Bank and a Primary Agricultural Credit
Society.]
(f) “Co-operative Federations” at—
(i) “District level” means a Federation of Co-operative Societies
to which primaries as well as block level Societies are
affiliated.
(ii) “Divisional level” means Co-operative Societies to which
block level/primary level/district level Societies are affiliated.
(iii) “State level” means a Co-operative Society at Apex level to
which divisional level/district level/primary level Co-operative
Societies are affiliated.
(g) “Co-operative Society” means a Society registered or deemed to be
registered under this Act.
(h) “Co-operative year” in relation to any Co-operative Society or class
of such Societies means the year ending 31st day of March and where the
1. Clauses (bb) and (bba) inserted by Act No. X of 2010, s. 2.
2. Clause (ee) inserted by Act No. X of 2010, s. 2.
CO-OPERA TIVE SOCITIES ACT, 1989 389
accounts of such Society or class of such Societies are, with the previous
sanction of the Registrar, Co-operative Societies, balanced on any other day,
the year ending on such day.
(i) “Co-operative Society with unlimited liability” means a Co-operative
Society, the members of which are, in the event of its being wound up, jointly
and severally liable for and in respect of all its obligations and to contribute
to any deficit in the assets of the Society.
(j) “Co-operative Society with limited liability” means a Co-operative
Society in which the liability of its members, for the debts of the Society in
the event of its being wound up, is limited by its bye-laws—
(i) to the amount, if any, unpaid on the shares respectively held
by them ; or
(ii) to such amount as they may, respectively, undertake to
contribute to the assets of the Society.
(k) “Creditor” includes depositor.
(1) “Deposit Insurance Corporation” means the Deposit Insurance
Corporation established under section 3 of the Deposit Insurance Corporation
Act, 1961.
(m) “Federal body” means a Co-operative Federation at District,
Divisional or State level as the case may be.
(n) “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, rules and bye-laws, and
includes a nominal and an associate member.
1[(nn) “Multipurpose Co-operative Society” means a primary society, the
object of which is to provide various services including services relating to
savings, credit business, industry, consumer durables to its members.]
(o) “Net profit” means profit after deduction of establishment charges,
contingent charges, interest payable on loans and deposits, audit fee and such
other sums as may be prescribed.
2[(p) “National Bank” means the National Bank for Agriculture and Rural
Development established under section 3 of National Bank for Agriculture and
Rural Development Act, 1981 (Central Act No. 61 of 1981).]
1. Clause (nn) inserted by Act No. X of 2010, s. 2.
2. Clause (p) substituted ibid.
390 CO-OPERA TIVE SOCITIES ACT, 1989
(q) “Officer” means a President, Vice-President, Chairman, Vice-Chairman,
Managing Director, Secretary, Manager, Member of the Board, Treasurer,
Liquidator and Administrator appointed under section 30 and include any other
person empowered under this Act or rules of bye-laws to give directions in
regard to the business of a Co-operative Society.
(r) “Prescribed” means prescribed by rules made under this Act.
1[(rr) “Primary Agricultural Co-operative Credit Society” means a Co-
operative Society, by whatever name called, as defined under clause (cciv) of
section 5 of the Banking Regulation Act, 1949 (Central Act 10 of 1949) and
includes a Multipurpose Co-operative Society.]
(s) “Registrar” means a person appointed to perform the functions of
the Registrar of Co-operative Societies under this Act and include any person
appointed to assist the Registrar when exercising all or any of the powers of
the Registrar.
(t) “Reserve Bank” means the Reserve Bank of India established under
section 3 of the Reserve Bank of India Act, 1934.
(u) “Rules” means the rules made under this Act.
(v) “Tribunal” means the Tribunal constituted under section 157.
CHAPTER II
REGISTRATION OF CO-OPERATIVE SOCIETIES.
3. The Registrar. —(1) The Government may appoint a person to be the
Registrar of Co-operative Societies for 2[the Union territory of Jammu and
Kashmir] for all types of Societies and may appoint a person or 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 the
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
superintendent and control of the Registrar.
(4) The Government may appoint any number as Additional Registrar
Co-operative Societies to assist the Registrar. The person or persons so
1. Clause (rr) inserted by Act No. X of 2010, s. 2.
2. Substituted for “the whole State” by S.O. 3466 (E) dated 05.10.2020.
CO-OPERA TIVE SOCITIES ACT, 1989 391
appointed to assist the Registrar and on whom any power of Registrar is
conferred shall work under the general guidance, superintendence and control
of the Registrar.
4. Societies which may be registered.— Subject to the provisions of this
Act, a Co-operative Society which has as its object the promotion of the
economic 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 Society, or a Co-operative Society, established for
carrying out any of the objects specified in section 113 may be registered
under this Act.
5. Application for registration of Co-operative Societies. ––(1) An
application for the registration of a Co-operative Society shall be made to the
Registrar in such form as the Registrar may from time to time specify, and the
applicants shall furnish to him all such information about the Society as he
may require.
(2) Every such application shall conform to the following requirements,
namely :––
(a) the application shall be accompanied by three copies of the
proposed bye-laws of the Co-operative Society ;
(b) where all the applicants are individuals the number of applicants
shall not be less then 100 in case of primary agricultural societies,
not less than 50 in case of registration of primary non-agricultural
societies ; provided that in case of husband and wife joining as
member they shall be treated as one member for the purpose of
registration. This will not apply in case of registration of Federal
Co-operative Societies ;
(c) membership to be open to all such persons ordinarily residing
within the area of operation of the Society who can make use of
the services offered by the Society ;
(d) individuals can only become associate/nominal members in Federal
and Apex Level Institutions ;
(e) every one of the applicants who is individual shall be above the
age of eighteen years ;
(f) 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 same village or in the
392 CO-OPERA TIVE SOCITIES ACT, 1989
same group of villages or belong to the same class or pursue the
same occupation ;
(g) the application shall be signed by everyone of the applicants who
is individual and by a person duly authorised on behalf of Co-
operative Society which is an applicant.
6. Registration. ––(1) If the Registrar is satisfied—
(a) that the application complies with the provisions of this Act and
rules ;
(b) that the objects of the proposed Society are in accordance with
section 4 ;
(c) that the aims of the proposed Society are not inconsistent with the
principles of social justice ;
(d) that the proposed bye-laws are not contrary to the provisions of
this Act and rules ; and
(e) that the proposed Society complies with the requirements of sound
business and has reasonable chances of success ;
1[the Registrar shall, within one month from the date of receipt of application,
register the Society provisionally] for a maximum period of six months during
which period the Society shall fulfil the following obligations in order to
qualify for permanent registration :—
(i) Capital building to the extent to be prescribed.
(ii) Membership mobilization/education to be prescribed.
(iii) Development of projects, plans and schemes.
(2) Where the Registrar refuses to register a Co-operative Society, 2[he
shall, within one month from the date of receipt of application, communicate]
the order of refusal together with the reasons therefor, to such of the
applicants as may be prescribed.
7. Registration certificate. ––(1) Where a Co-operative Society is
registered provisionally under this Act, the Registrar shall issue the provisional
certificate signed by him.
1. Substituted for “the Registrar shall register the society provisionally” by Act No.
X of 2010, s. 3.
2. Substituted ibid for “he shall communicate”.
CO-OPERA TIVE SOCITIES ACT, 1989 393
(2) When the Registrar is satisfied that the Society has complied with
obligations as laid down in section 6 of this Act qualifying for permanent
registration, the Registrar shall issue a certificate of registration signed by him
which shall be conclusive evidence that the Co-operative Society mentioned
therein is a Co-operative Society duly registered under this Act.
8. Registration with limited or unlimited liability. ––(1) A Co-operative
Society may subject to the provisions of sub-section (2) be registered with or
without limited liability.
(2) Unless the Government by general or special order otherwise
directs :—
(a) a Co-operative Society shall be registered with limited liability if
any of its members is another Co-operative Society ;
(b) whether the liability of the members of a Co-operative Society is
unlimited or limited by shares, the liability of the Government which
has taken shares in Co-operative Society shall be limited to the
share capital subscribed by the Government.
(3) The word ‘limited’ shall be the last word in the name of every Society
with limited liability registered under this Act.
1[8A. Conversion. ––(1) A Co-operative Credit Structure Society registered
under this Act shall be eligible to become a member of a Central Level Co-operative
registered under the provisions of the Jammu and Kashmir Self-Reliant Co-operatives
Act, 1999.
(2) A Co-operative registered under Jammu and Kashmir Self-Reliant Co-
operatives Act, 1999 may become the member of the Co-operative Federation
registered under this Act.
(3) A Co-operative Credit Structure Society may affiliate with, or disaffiliate
from, a Co-operative Federation of its choice keeping in view the financial position
of the Co-operative Federation :
Provided that before disaffiliation, the Co-operative or the Society shall
discharge its financial liability, if any, to the Society from which it is disaffiliating.]
9. Amendment of the bye-laws of Co-operative Society. ––(1) No
amendment of any bye-laws of a Co-operative Society shall be valid unless
such amendment has been registered under this Act.
1. Section 8A inserted by Act No. X of 2010, s. 4.
394 CO-OPERA TIVE SOCITIES ACT, 1989
(2) Every proposal for such amendment shall be forwarded to the
Registrar and if the Registrar is satisfied that the proposed amendment—
(i) is not contrary to provisions of this act and the rules ;
(ii) does not conflict with Co-operative principles ;
(iii) satisfies the requirements of sound business ;
(iv) will promote the economic interests of the members of the
Society ; and
(v) is not inconsistent with the principles of social justice ;
he may 1[register the amendment within one month from the date of receipt of
the application].
(3) The Registrar 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 of refusal, together
with the reasons thereof, 2[to the Society within one month from the date of
receipt of the application].
10. Power to direct amendment of bye-laws. ––(1) If it appears to the
Registrar that an amendment of the bye-laws of a class of Societies is
necessary or desirable in the interest of such Societies or in the interests of
the Co-operative movement or for the implementation of the development
3[programmes of the Union territory of Jammu and Kashmir], he may call upon
all the Societies of that class, in the manner prescribed, to make the amendment
within such time as he may specify.
(2) If any Society of that class fails to make the amendment within the
time specified, the Registrar may, after giving the Society an opportunity of
being heard, register such amendment, and issue to the Society a copy of such
amendment certified by him. With effect from the date of amendment in the
manner aforesaid, the bye-laws shall be deemed to have been duly amended
accordingly and the bye-laws as amended shall be binding on the Society and
its members :
1. Substituted for “he may register the amendment” by Act No. X of 2010, s. 5.
2. Substituted ibid for “to the Society”.
3. Substituted for “programmes of the State” by S.O. 3466 (E) dated 05.10.2020.
CO-OPERA TIVE SOCITIES ACT, 1989 395
1[Provided that nothing in this sub-section shall apply to a Co-operative
Credit Structure Society and the decision of General Body of such Society with
regard to amendment of bye-laws shall be fina1].
11. Change of name of Co-operative Society. ––(1) A Co-operative
Society may, by an amendment of its bye-laws, change its name.
(2) Where 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.
(3) The change of name of a Co-operative Society shall not affect any
rights or obligations of the Co-operative Society, or render defective any legal
proceedings by or against it ; and any legal proceedings which might have
been continued or commenced by or against the Society by its former name
may be continued or commenced by its new name.
2[(4) No Primary Agricultural Co-operative Credit Society or its Federation or
Association (except those which are permitted to act as a bank under Banking
Regulation Act, 1949 (Central Act No. 10 of 1949) shall be registered with the words
‘bank’ or any other derivative of the word ‘bank’ in its registered name or shall use
the same as a part of its name :
Provided that where any Primary Agricultural Credit Society is presently
using the word ‘bank’ or any other derivative of this word, it shall within three
months from the date of coming into force of the Jammu and Kashmir Co-operative
Societies (Amendment) Act, 2010 remove the word ‘bank’ or its derivative, if any,
from its name :
Provided further that in the event of failure on the part of the Society concerned
to remove such word from its name, the Registrar shall, after affording a reasonable
opportunity of being heard to such Society, order the winding up of such Society
forthwith].
12. When amendment of bye-laws comes into force.–– 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.
13. Change of liability. ––(1) Subject to the provision of this Act and
rules, a Co-operative Society may, by amendment of its bye-laws, change the
form or extent of its liability.
1. Proviso inserted by Act No. X of 2010, s. 6.
2. Inserted ibid, s. 7.
396 CO-OPERA TIVE SOCITIES ACT, 1989
(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 one month 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 the 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 the 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. Amalgamation, transfer of assets and liabilities and division of Co-
operative Societies. ––(1) A Co-operative Society may, with the previous
approval of the Registrar and by a resolution passed by a two-third majority
of the members present and voting at the general meeting of the 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.
(2) Any two or more Co-operative Societies may, with the previous
approval of the Registrar and by a resolution passed by a two-third majority
of the members present and voting at a general meeting of each such Society,
amalgamate themselves and form a new Co-operative Society.
(3) The resolution of a Co-operative Society under sub-section (1) or
subsection (2) shall contain all particulars of the transfer, division 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
CO-OPERA TIVE SOCITIES ACT, 1989 397
notwithstanding any bye-laws or contract to the contrary, any such member
or creditor shall, during the period of one month of the date of service of the
notice upon him, have the option of withdrawing his shares, deposits, or loans,
or interest 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 affected has
been obtained ; or
(b) all claims of members and creditors affected who exercise the
option referred to in sub-section (4) within the period specified
therein, have been met in full.
(7) Where the 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.
15. Cancellation of registration certificate of Co-operative Societies in
certain cases. ––(1) Where the whole of the assets and liabilities of a Co-
operative Society are transferred to another Co-operative Society in accordance
with provisions of section 14 the registration of the first mentioned Co-
operative Society, shall stand cancelled and the 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 14, the
registration of each of the amalgamating Societies shall stand cancelled on the
registration of the new Society and each Society shall be deemed to have
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 14, the
registration of that Society shall stand cancelled on the registration of the new
Societies, and that Society shall be deemed to have been dissolved and shall
cease to exist as a corporate body.
398 CO-OPERA TIVE SOCITIES ACT, 1989
1[(4) A Co-operative Credit Structure Society shall have the freedom of
entry and exit at any tier without mandatory restrictions of geographical
boundaries for its operation :
Provided that freedom shall be availed only after the outstanding
amount, if any, existing against its name in the books of Federal Co-operative
Society has been liquidated in full].
16. Re-organisation of Societies. ––(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 proper management of any Society,
that two or more Societies should be amalgamated or any Society should be
divided to form two or more Societies or should be re-organised, then
notwithstanding anything contained in section 3 but subject to the provisions
of this section, the Registrar may after consulting the federal body of particular
class of Societies, Jammu and Kashmir Co-operative Union/the financing
agency which may have advanced any loan to the Societies or the Society
concerned, provide for the amalgamation, division or re-organistation of those
Societies into a single Society or into Societies with such constitution,
property, rights, interest and authorities and such liabilities, duties and
obligations, as may be specified in the order :
Provided that every such order made by the Registrar under this section
in respect of a non-agricultural Society shall be issued after obtaining prior
approval of the Government and every such order shall be laid, as soon as may
be, after it is made, before 2[Legislative Assembly of the Union territory of
Jammu and Kashmir] :
Provided further that notwithstanding anything contained in section 3 or
any order made thereunder, the powers of the Registrar under this section shall
not be exercised by any person other than the Registrar himself.
(2) No order shall be made under this section, unless––
(a) a copy of the proposed order has been sent in draft to the Society
or each of Societies concerned,
(b) the Registrar has considered and made such modifications in the
draft order as may seem to him desirable, in the light of any
1. Added by Act No. X of 2010, s. 8.
2. Substituted for “each House of the State Legislature” by S.O. 3466 (E) dated 05.10.2020.
CO-OPERA TIVE SOCITIES ACT, 1989 399
suggestion and objection which may be received by him within
such period (not being less than two months from the date on
which the copy of the order as aforesaid was received by the
Society) as the registrar may fix in that behalf, either from the
Society or from any member or class of members thereof or from
any creditor or class of creditors.
(3) The order referred to in sub-section (1) may contain such incidental,
consequential or supplemental provisions as may in the opinion of the
Registrar, be necessary to give effect to the amalgamation, the division, or
reorganisation. On the issue of an order under sub-section (1), the provisions
of such sub-section (7) of section 14 shall apply to the Societies so
amalgamated divided or re-organised as if they were amalgamated or
reorganised under that section.
(4) Notwithstanding anything contained in this section or in any other
provision of this Act, no action in pursuance of sub-section (1) or sub-section
(2) of section 14 or sub-section (1) or sub-section (2) of this section and no
scheme of compromise or arrangement or re-construction or amalgamation of
a Co-operative Bank, shall be taken or given effect to without the previous
sanction in writing of the Reserve Bank.
(5) 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, 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––
(i) for the reconstruction of the Co-operative Bank, or
(ii) for the amalgamation of the Co-operative Bank with any other Co-
operative Bank hereinafter referred or to as “the Transferee Bank”.
(6) Where a Co-operative Bank being an insured Bank within the meaning
of the Deposit Insurance Corporation Act, 1961 is amalgamated, or in respect of
which a scheme of compromise or arrangement or of reconstruction has been
sanctioned and the Deposit Insurance Corporation has been liable to pay to the
depositors of the insured Bank under sub-section (2) or section 16 of that Act,
the Bank with which such insured Bank is amalgamated or the Co-operative Bank
formed after such amalgamation or ; as the case may be, insured Bank or the
transferee Bank shall, be under an obligation to repay          the Deposit
Insurance Corporation in the circumstances, to the extent and in the manner
referred to in section 21 of the Deposit Insurance Corporation  Act, 1961.
400 CO-OPERA TIVE SOCITIES ACT, 1989
CHAPTER III
MEMBERS  OF  CO-OPERATIVE  SOCIETIES,  THEIR  RIGHTS  AND
LIABILITIES
17. Persons who may become members. ––(1) No person shall be
admitted as member of Co-operative Society except the following, namely :––
(a) an individual who is––
(i) competent to contract under section 11 of 1[the Indian
Contract Act, 1872 (9 of 1872) ;
1[(ii) a permanent resident of the State of Jammu and Kashmir as
defined in section 6 of the Constitution of Jammu and Kashmir] ;
(b) any other Co-operative Society registered under this Act ;
(c) a firm, company or any other body corporate constituted under any
law for the time being in force or a Society registered under 2[the
Societies Registration Act, 1860 (21 of 1860)] :
1[Provided that every partner, director or member as the case may be, of
such firm, company, corporate body or society is a permanent resident of the
State.]
3[(d) a Self-help group.
Explanation :––For purposes of clause (d), a self-help group means a
homogeneous group of rural poor comprising of ten to twenty
members, voluntarily formed to save small amounts out of their
earnings and agreed upon to form a corpus or fund to be lent on
loan to the members of such group].
(2) Where a person is refused admission as a member in a Co-operative
Society, the decision refusing admission shall be communicated by the Society
to that person within fifteen days of the date of submission of application for
admission.
(3) No individual shall be admitted as member of a Central or Apex
Society unless such a Society has been exempted by the Registrar in this
behalf, by general or special order.
1. Sub-clause (ii) and proviso after clause (c) have become redundant in view of the Removal of
Difficulties Order, 2019 issued vide S.O. 3912 (E) dated 30.10.2019.
2. Substituted for “the Jammu and Kashmir Societies Registration Act, Samvat 1998” by S.O.
3466 (E) dated 05.10.2020.
3. Clause (d) and Explanation inserted by Act No. X of 2010, s. 9.
CO-OPERA TIVE SOCITIES ACT, 1989 401
(4) The Central and Apex Societies having individual as members on the
date of commencement of this Act, shall retire the shares of such individuals
within a period of three years of such commencement in the prescribed form.
Explanation.—For the purpose of this section––
(a) “Primary Society” means a Co-operative Society whose membership
consists exclusively of individuals ;
(b) “Central Society” means a Co-operative Society whose membership
includes primary societies ;
(c) “Apex Society” means a Co-operative Society whose membership
includes Central Societies. Notwithstanding anything contained
herein, the Jammu and Kashmir State Co-operative Rural
Development Bank shall be construed as Apex Society for the
purpose of this Act :
Provided that in case of districts where Central level Societies do not
exist and Apex Level Societies have been undertaking the functions of Central
Level Societies and have enrolled primary societies as members. These primary
Societies will continue to remain as the members of the Apex Level Societies
till the time Central Level Societies come up or are registered in these districts.
After the Central Level Societies are registered in these districts, primary
societies, shall cease to exist as members of Apex Level Societies.
(5) Every person eligible for admission as member of a Co-operative
Society shall be deemed to have been admitted as a member of the Society from
the date of receipt of his application for such admission in the office of that
Society.
(6) The Registrar may, of his own motion or on a complaint made by the
Committee of the Society or any aggrieved person, by an order determine that
such a person is not eligible to be a member of the Society and on such
determination that person will cease to be member :
Provided that no such order shall be made unless the person already
admitted as a member is given opportunity of being heard and where an order
is to be made on the basis of complaint it shall be made within a period of thirty
days of the receipt thereof.
(7) Notwithstanding anything contained in sub-section (1), the
Government or any person authorised by the Government may, having regard
to the fact that the interests of any person or class of persons conflict or are
likely to conflict with the objects of any Society or class of Societies, by
402 CO-OPERA TIVE SOCITIES ACT, 1989
general or special order published in the Government Gazette, declare that any
person or class of persons engaged in or carrying on any profession, business
or employment shall be dis-qualified from being admitted or for continuing as
members or shall be eligible for membership only to a limited extent of any
specified Society or class of Societies so long as such person or persons are
engaged in or carry on that profession, business or employment as the case
may be.
1[(8) Notwithstanding anything contained in sub-section (1), any person
desirous of making a deposit in Primary Agricultural Credit Society shall
become a member of that Society by subscribing the minimum share capital
specified in the bye-laws and on admission as such, he shall be entitled to full
membership voting rights].
18. Nominal or associate members. ––(1) A Co-operative Society may
admit any person as nominal or associate member in accordance with its bye-
laws.
(2) A nominal member shall not be entitled to any share, in any form
whatsoever, in the assets or profit of the Society.
(3) Save as provided in this section a nominal or associate member shall
have such privileges and rights of a member and be subject to such liabilities
of a member as may be specified in the bye-laws of the Society.
19. Member not to exercise rights till due payment made. ––(1) No
member of a Co-operative Society shall, save as otherwise provided in
subsection (2), exercise the rights of a member unless or until he has made
such payment to the Society in respect of membership or has acquired such
interest in the Society as may be specified in the bye-laws.
(2) In the case of a Society registered after the commencement of this
Act, the persons who have signed the application to register the Society may
elect a committee to conduct the affairs of the Society for a period of six
months from the date of registration or for such further period not exceeding
nine months as the Registrar may fix :
Provided that the Committee shall cease to function as soon as the
members of the Society have elected a Committee in accordance with its bye-
laws.
1[(3) All 

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