LexThe KARNATAKA CO-OPERATIVE SOCIETIES ACT, 1959.
Karnataka · state statute
Open in Lexace · Ask the AI about this act1959:KAR.ACT 11] Co-operative Societies 1
THE KARNATAKA CO-OPERATIVE SOCIETIES ACT, 1959.
ARRANGEMENT OF SECTIONS
Statement Of Objects And Reasons:
Sections :
CHAPTER I
PRELIMINARY
1. Short title, extent and commencement.
2. Definitions.
CHAPTER IA
AUTHORITIES AND APPELATE TRIBUNAL.
2A. Registrar, Additional Registrars, Joint Registrars, Deputy Registrars,
State Representatives and Assistant Registrars.
2AA. Director of Co-operative Audit, Additional Director of Co- operative Audit,
Joint Directors of Co -operative Audit, Deputy Directors of Co- operative
Audit and Assistant Directors of Co-operative Audit.
2B. Omitted.
CHAPTER II
REGISTRATION OF CO-OPERATIVE SOCIETIES.
3. Omitted
4. Societies which may be registered.
5. Registration with limited or unlimited liability.
6. Application for registration of co-operative societies.
7. Registration.
8. Registration certificate.
9. Co-operative societies to be bodies corporate.
10. Change of name of co-operative society.
11. Change of liability.
11A. Bye-laws.
12. Amendment of bye-laws of a co-operative society.
13. When amendments of bye-laws come into force.
14. Amalgamation, transfer of assets and liabilities and division of co -
operative societies.
[14A. XXX]
14B. Registrar to prepare scheme for amalgamation of co- operative banks
in certain areas.
14C. Liability of co-operative bank to the Deposit Insurance Corporation.
15. Cancellation of registration certificates of co -operative societies in
certain cases.
1959:KAR.ACT 11] Co-operative Societies 2
CHAPTER III
MEMBERS OF CO-OPERATIVE SOCIETIES AND THEIR RIGHTS AND
LIABILITIES.
16. Persons who may become members.
17. Disqualification for membership.
18. Nominal or associate members.
18A.Cessation of Membership.
18-B. Cessation of directorship
19. Member not to exercise rights till due payment made.
19A- Access to information
20. Votes of members.
21. Manner of exercising vote.
22. Omitted.
23. Restrictions on transfers of shares or interest.
23A. Refund of value of share.
24. Transfer of interest on death of member.
25. Liability of past member and estate of deceased member.
CHAPTER IV
MANAGEMENT OF CO-OPERATIVE SOCIETIES.
26. Final authority in a co-operative society.
26A. Partnership of Co-operative Societies.
26B. Collaboration of Co-operative Societies.
27. Annual General Meeting.
28. Special general meeting.
28A. Management of co-operative societies vest in the *board*.
28B. *board* to arrange for election.
28C- Powers and functions of the board
28D. Foreign tours by members, directors, office- bearers and employees of
a cooperative societies
29. [XXX]
29A. Commencement of term of office.
29B. Resignation of member of a board or office -bearer of a Co- operative
Society
29C. Disqualification for membership of the *board*.
29D. Omitted.
29E. Filling up of casual vacancy in the office of members of the *board*.
29F. Election of President, Chairperson, Vice -President, or Vice -
Chairperson, etc.
29G. Appointment of Chief Executive.
30. Supersession or suspension of the board.
30A. Omitted.
1959:KAR.ACT 11] Co-operative Societies 3
39AA Co-operative Election Commission.
30B. Powers to give direction in public interest.
31. Appointment of Special Officer.
31A. Delivery of possession of records and properties of the co- operative
societies.
CHAPTER V
PREVILEGES OF CO-OPERATIVE SOCIETIES.
32. First charge of co-operative society on certain assets.
33. Charge on land, owned by members or held as tenants by members
borrowing loans from certain co-operative societies.
34. Deduction from salary to meet society’s claim in certain cases.
35. Charge and set off in respect of shares or interest of members in the
capital of a co-operative society.
36. Shares or interest not liable to attachment.
37. Exemption from certain taxes, duties and fees.
38. Exemption from compulsory registration of instruments.
39. Registration of documents executed on behalf of co-operative societies.
39A.
CHAPTER VA
ELECTION OF MEMBERS OF THE *BOARD*S OF CO-OPERATIVE
SOCIETIES.
Conduct of elections.
39B. Cost of conducting elections.
39C. Corrupt practices.
39D. Maintenance of secrecy of voting.
39E. Officers etc. at election not to act for candidates or to influence voting.
39F. Prohibition of canvassing in or near polling station.
39G. Penalty for disorderly conduct in or near polling station.
39H. Penalty for misconduct at the polling station.
39I. Breaches of official duty in connection with election.
39J. Removal of ballot papers from polling station to be an offence.
39K. Other offences and penalties.
CHAPTER VI
STATE AID TO CO-OPERATIVE SOCIETIES.
40. Promotion of co-operative movement.
41. Direct partnership of State Government in co-operative societies.
42. Indirect partnership of State Government in co-operative societies.
43. Principal State Partnership Fund.
44. Subsidiary State Partnership Fund.
45. Approval of State Government for purchase of shares.
46. Liability to be limited in respect of certain shares.
47. Restriction on amount of dividend.
1959:KAR.ACT 11] Co-operative Societies 4
48. Indemnity of apex and central societies.
49. Disposal of share capital and dividend, etc.
50. Disposal of ‘Principal State Partners hip Fund’ and ‘Subsidiary State
Partnership Fund’ on winding up of an apex or a central society.
51. Principal State Partnership Fund and Subsidiary State Partnership Fund
not to form part of assets.
52. Agreement by State Government and apex societies.
53. Other forms of State aid to co-operative societies.
53A. [XXX]
54. Control of society assisted.
55. Provisions of this Chapter to override other laws.
CHAPTER VII
PROPERTIES AND FUNDS OF CO-OPERATIVE SOCIETIES.
56. Mobilisation of Funds.
57. Net profits and their disposal.
57A- Cooperative Education and Training.
58. Investment of funds.
59. Restrictions on borrowings.
60. Restrictions on loans.
61. Restrictions on other transactions with non-members.
62. Provident Fund.
CHAPTER VIII
AUDIT, INQUIRY, INSPECTION AND SURCHARGE.
63. Audit.
64. Inquiry by Registrar.
65. Inspection of books of a co-operative society.
65A. Report of inquiry, inspection and final report to be made available to a
credit agency.
65B. Inspection of books of co-operative society by a credit agency.
66. Power to seize books and property.
67. Costs of Inquiry.
68. Order by the Registrar.
69. Surcharge.
CHAPTER IX
SETTLEMENT OF DISPUTES.
70. Disputes which may be referred to Registrar for decision.
70A. Period of limitation.
71. Disposal of disputes.
71A. Powers of financing bank to pr oceed against members of a co -
operative society for the recovery of money due to it from such
society.
1959:KAR.ACT 11] Co-operative Societies 5
71B. Powers of credit agency to proceed against members of a co-operative
society for the recovery of money due to it from such society.
CHAPTER X
WINDING UP AND DISSOLUTION OF CO-OPERATIVE SOCIETIES
72. Winding up of co-operative societies.
72A. Winding up of a co-operative bank if so, required by the Reserve Bank.
72B. Reimbursement to the Deposit Insurance Corporation by the
Liquidators.
73. Liquidator.
74. Powers of Liquidator.
75. Cancellation of registration of a co-operative society.
CHAPTER XI
AGRICULTURE AND RURAL DEVELOPMENT BANKS.
76. Definitions.
76A. Application of Chapter to Agriculture and Rural Development Banks.
76B. State and other Agriculture and Rural Development Banks.
77. Appointment of Trustee and his powers and functions.
78. Trustee to be a corporation sole.
79. Issue of debentures.
80. Charge of debenture holders on certain properties.
81. Guarantee by State Government of principal of, and interest on,
debentures.
82. Other guarantees by State Government.
82A. Powers of Agriculture and Rural Development Banks to advance loans
and to hold lands.
82B. Mode of dealing with applications for loans.
82C. Order granting loan conclusive of certain matters.
83. Priority of mortgage over certain claims.
84. Right of Agriculture and Rural Development Bank or of the State
Agriculture and Rural Development Bank to purchase mortgaged
property.
85. Mortgages executed in favour of Agriculture and Rural Development
Bank to stand vested in State Agriculture and Rural Development
Bank.
85A. Registration of mortgage or lease in favour of Agriculture and Rural
Development Banks.
86. Power of Agriculture and Rural Development Bank to receive moneys
and grant discharges.
86A. Recovery of Loans by development banks.
87. Right of Agriculture and Rural Development Bank to pay prior debts of
mortgagor.
87A. Mortgages executed by managers of joint Hindu families.
1959:KAR.ACT 11] Co-operative Societies 6
87B. Restrictions on lease.
88. Distraint— When to be made.
89. Power of sale when to be exercised.
89A. Confirmation of sale.
89B. Disposal of sale-proceeds.
89C. Certificate to purchase, delivery of property and title of purchase.
89D. Recovery of loans on certificate by Registrar.
89E. Deputy Commissioner to make recoveries during a certain period.
89F. Officers of banks not to bid at sales.
89G. Section 40 of Bombay Act 28 of 1947 not to apply to alienation in
favour of Agriculture and Rural Development Banks.
89H. Provision for Guarantee Funds to meet certain losses.
90. Powers of Agriculture and Rural Development Bank where mortgaged
property is destroyed or security becomes insufficient.
91. Power of Board or of Trustee to distrain and sell property, etc.
92. Title of purchaser not to be questioned on the ground of irregularity, etc.
93. Mortgage not to be questioned on insolvency of mortgagor.
94. Appointment of receiver and his powers.
95. Mortgagor’s powers to lease.
96. Delegation of certain powers by Board.
97. Sections 102, 103 and 104 of the Transfer of Property Act, 1882, to
apply to notices under this Chapter.
97A.Constitution of a common cadre for the employees of primary
agriculture and rural development banks.
98. Power to Board of State Agriculture a nd Rural Development Bank to
supervise Agriculture and Rural Development Banks and make
regulations.
CHAPTER XII
EXECUTION OF AWARDS DECREES ORDERS AND DECISIONS.
99. Enforcement of charge.
100. Recovery of moneys due to Societies.
101. Execution of orders, etc.
101A. Transfer of property made after issue of certificate void against co -
operative society.
101B. Transfer of property which cannot be sold.
101C. Omitted
102. Registrar or person empowered by him to be a civil court for certain
purposes.
103. Attachment of property before award or order.
104. Recovery of sums due to Government.
104A. Application of this Chapter to Co-operative Societies in other States.
1959:KAR.ACT 11] Co-operative Societies 7
CHAPTER XIII
APPEALS, REVISION AND REVIEW.
105. Appeals to the Tribunal.
105A. Appeals relating to admission of members to societies.
106. Appeals to other authorities.
107. Revision by Tribunal.
108. Powers of revision of State Government.
108A. No appeal or revision in certain cases.
CHAPTER XIV
OFFENCES AND PENALTIES.
109. Offences.
110. Offences by Companies.
110A. Power to compound offences.
111. Cognizance of offences.
CHAPTER XV
MISCELLANEOUS
111A. Omitted.
111B. Preservation of records.
112. Prohibition against the use of the word “Co-operative”.
113. Address of a co-operative society.
114. Copy of Act, rules and bye-laws to be open to inspection.
115. Omitted.
116. Orders to be pronounced.
117. Procedure for settlement of disputes and power of the Registrar or any
other person to whom a dispute is referred for decision under
section 70.
118. Bar of jurisdiction of courts.
119. Application of Limitation Act.
120. Power to exempt societies from conditions of registration.
121. Power to exempt societies.
122. Register of Members.
123. Proof of entries in co-operative societies’ books.
124. Service of notice under the Act.
125. Notice necessary in suits.
126. Acts of co-operative societies not to be invalidated by certain defects.
126A. Omitted.
127. Indemnity.
127A. Office bearers, members and employees of co -operative societies to
be public servants.
128. Companies Act, 1956 not to apply.
128A. Constitution of a common cadre.
128B. Duties of police officer.
1959:KAR.ACT 11] Co-operative Societies 8
129. Powers to make rules.
129A. Model bye-laws.
130. Rules and orders to be laid before State Legislature.
131. Repeal and savings.
132. Power to remove difficulties.
*****
STATEMENT OF OBJECTS AND REASONS
I
Act of 11 of 1959. —The Report of the Committee of Directors of the All
India Rural Credit Survey, appointed by the Reserve Bank of India, was
published in December, 1954. At the first conference of State Ministers in
charge of Co-operation held at New Delhi in April, 1955, it was agreed that
schemes of Co -operative development under the Second Five -Year Plan
should be drawn up to give effect to the recommendations contained in the
Rural Credit Survey Report. The Report recommended, among other things,
increased State partnership in Co- operative Societies an d State
participation in their management. In order to implement the
recommendations of the Rural Credit Survey Report and to facilitate the
implementation of the schemes of co -operative development under the
Second Five-Year Plan and also to simplify, rat ionalise and modernise the
existing laws relating to Co -operative Societies, the Committee on Co -
operative Law was appointed by the Government of India. The Committee
observed that the implementation of the recommendations of the Rural
Credit Survey Report and of the schemes of co -operative development
under the Second Five -Year Plan requires revision of the existing Co-
operative Societies Act and the Rules made thereunder in all States.
Further, the Re- organisation of States has brought together, areas whi ch
are being governed by different Acts and Rules. Under these circumstances
the Committee felt, the present juncture was very opportune for revising the
Co-operative Societies Act, in force in the different States with a view to
bringing about as large a degree of uniformity in the legislation governing
Co-operative Societies as possible throughout the country. Taking these
factors into consideration, the Committee prepared a Model Co- operative
Societies Bill and Model Rules which they recommended to State
Governments for enactment and adoption. At present five different Co-
operative Societies Acts are in operation in the different parts of the Mysore
State. This is a source of considerable administrative inconvenience. It is
necessary to have a uniform Co- operative Societies Law as applicable to
the whole of the State.
Government have, therefore, decided to introduce the present Bill. The
Bill has been drafted after taking into consideration the Model Co- operative
Societies Bill recommended by the Committee on Co -operative Law
appointed by the Government of India. The principle of State partnership in
Co-operative Societies and State participation in their management has
been accepted and incorporated in the relevant provisions of this Bill.
1959:KAR.ACT 11] Co-operative Societies 9
(Published in Karnataka Gazette (Extraordinary) Part IV -2A dated 10th
April 1958 as No. 21 at page 1.)
II
Amending Act 40 of 1964. —The Mysore Co- operative Societies Act,
1959, which was brought into force from First July 1960 has revealed in the
course of working the need for some amendments for speedy
implementation. It has also become necessary to amend the chapter
relating to the Mysore Central Land Mortgage Bank Ltd., so that the Bank
could take up expeditiously development activities for which funds could be
made available from the provision made under Taccavi loans or from the
funds borrowed from the Agricultural Re-finance Corporation of India or from
the debentures raised by the Bank itself. Hence the amending Bill.
(Published in Karnataka Gazette (Extraordinar y) Part IV -2A dated 18th
June 1964 as No. 152 at page 55.)
III
Amending Act 27 of 1966. — Note.-By this Act the Karnataka
Agricultural Produce Marketing (Regulation) Act, 1966 (Karnataka Act 27 of
1966) was enacted. Certain consequential amendments are made therein to
this Act .
IV
Amending Act 16 of 1967. — Consequent on the amendment of the
Central Sales Tax Act by the Parliament providing for the enhancement of
the rates of tax applicable to the declared good under the local sales tax
laws, it has beco me necessary to amend the IX Schedule which specifies
the declared goods and the rates of tax applicable to them. The rates of tax
applicable tot he declared goods specified therein are now being enhanced
accordingly. Co-operative Societies
The Government was considering the question of granting certain
concessions to new industries with a view to encourage development of
industries in the State. The Government recently took a decision that in
respect of new industries exemption from the payment of Sales T ax should
be provided for an initial period of two years. The manner in which that
exemption should be provided was examined and it was though that it can
be best done by means of Notifications issued from time to time whenever
occasion arises. Since the A ct did not contain a provision empowering the
State Government to issue such notifications it is now intended to insert a
provision empowering the Government to notify exemptions and reduction of
tax rates. Such a provision exists in the Sales Tax Laws of the neighbouring
States also.
This occasion is also utilised to make certain minor amendments relating
to procedural matters and also to provide for concessional rate of tax for
vermicelli and to reduce the rates of tax on sugarcane and to exempt Amber
Charkas, Druggets, Durries and Carpets. The benefit of exemption granted
to bona fide producers under item 28 of the V Schedule is proposed to be
limited to persons who produce goods exclusively coming under village
industry.
1959:KAR.ACT 11] Co-operative Societies 10
Note: By this Act some consequential amendments are made to Act 11 of
1959 .
(Obtained from L.A. Bill No.35 of 1967 Page No. 9 & 10)
V
Amending Act 1 of 1972. — According to clause (c) of section 101 of the
Mysore Co -operative Societies Act, 1959, an order, decision and award
made under the Act can be executed by the Registrar or any other person
subordinate to him by attachment and sale of any property of the person or
co-operative society against whom the order, decision or award has been
obtained or passed. In order to implement this provision necessary rules
have been made and rule 41 of the Mysore Co- operative Societies Rules,
1960, empowers the Sale Officer to investigate the claims to property
attached in execution. In pursuance of this provision, Sale Officers have
been investigating such claims.
In Jyotiba Yellappa vs. Hubli Co- operative Cotton Sale Society, Ltd.,
[1970 (2) Mys. L.J. 344], the High Court of Mysore held that the procedure
under Rule 41 of the Co- operative Societies Rules is limited in its operation
to persons who can properly be made parties to the original dispute under
section 70 of the Act and that hence a claim by non- members against the
attachment and sale in execution of an award cannot be adjudicated under
rule 41.
In view of this decision, execution of or ders, decisions and awards in
which claims to the property attached had been made by non- members
would become
Invalid and ineffective. Further, execution of orders, decisions and
awards could not be proceeded with except in cases where members of the
society were interested in the properties liable to attachment and sale.
Consequently, the Co- operative Societies could not pursue the expeditious
procedure for recovery under the Co-operative Societies Rules.
Hence it became necessary to empower the Re gistrar and his
subordinate to exercise the powers of investigating claims to property
attached in the execution of the orders, decisions and awards.
As the Houses of Legislature were not in Session and the matter was
urgent, an Ordinance was promulgated amending section 101 of the Act and
validating the action already taken. Thereafter before the Ordinance could
be replaced by the Act of State Legislature, the State Legislature was
suspended by the proclamation of the President dated 27th March 1971
under article 356 of the Constitution. The Bill is intended to replace the
Ordinance and is for enactment under the provisions of the Mysore State
Legislature (Delegation of Powers) Act, 1971.
The Consultative Committee on State Legislature relating to Mysore at its
second meeting on the 7th December 1971, has considered the Mysore Co-
operative Societies (Amendment) Bill, 1972, and has accorded its approval
of the same.
(Obtained from Presidents Act 1 of 1972.)
1959:KAR.ACT 11] Co-operative Societies 11
VI
Amending Act 14 of 1973. —The post of Direct or of Sugar has been
created to fulfil the need for a single agency to deal with all matters relating
to sugar industry in the State in a comprehensive and co- ordinated manner.
Since there are a number of sugar factories already in the co- operative
sector and more factories are likely to come up in future it was necessary to
designate the Director of Sugar as Additional Registrar of Co- operative
Societies in respect of all the Sugar Factories in the co- operative sector. At
present the Registrar of Co- operative Societies is dealing with all matters
relating to Co- operative Sugar Factories and it is felt that the Director of
Sugar should assist the Registrar in the discharge of his functions in respect
of Co-operative Sugar Factories. The Additional Chief Marketing Officer has
been designated as Ex -Officio Additional Registrar of Co- operative
Societies.
2. Section 2- A of the Mysore Co- operative Societies Act, 1959 provides
for the appointment of an Additional Registrar of Co- operative Societies. In
order to enable the Additional Chief Marketing Officer and the Director of
Sugar to be designated as Additional Registrar of Co- operative Societies
and also in order to provide for future contingencies it is considered
necessary to amend the provision to enable Gover nment to appoint as
many Additional Registrars of Co- operative Societies as it thinks fit for the
purpose of assisting the Registrar.
(Published in Karnataka Gazette (Extraordinary) Part IV -2A dated 2nd
May 1973 as No. 433 at page 3.)
VII
Amending Act 2 of 1975.— Note.- By this Act the Karnataka Agricultural
Credit Operations and Miscellaneous Provision Act, 1975 (Karnataka Act 2
of 1975) was enacted. Certain consequential amendments are made therein
to Act 11 of 1959.
VIII
Amending Act 39 of 1975. —In order to facilitate the extension of
Deposit Insurance Schemes under the Deposit Insurance Corporation Act,
1961 (Central Act 47 of 1961) to co -operative banks registered under the
Mysore Co-operative Societies Act 1959 the Government of India, Ministry
of Food, Agriculture, Community Development and Co- operation and also
the Reserve Bank of India have suggested to the State Government to
make necessary amendments in the State Act so as to enable the State
Government and the Reserve Bank of India to exercis e powers of
supersession, re -constitution and liquidation of Co- operative Banks. The
Committee appointed by the Government with the then Deputy Minister for
Co-operation as the Chairman with non- official Presidents of some of the
major Co-operative Institutions and officers of the Government to consider
the amendments to be made in the State Act in the light of the policies and
programmes of the Government, recommended among others, making all
the necessary provisions in the Co- operative Societies Act as su ggested by
the Government of India and the Reserve Bank. A Bill was introduced for
1959:KAR.ACT 11] Co-operative Societies 12
this purpose in the Legislative Assembly in March 1970. The Bill was not
taken up for consideration by the Assembly, and with the dissolution of the
Legislative Assembly, t he Bill has lapsed. It was considered necessary by
Government to amend the Act to provide for certain urgent and important
items noted below:
(1) Extension of deposit insurance schemes to the Co-operative Banks;
(2) Amalgamation of Co-operative Banks;
(3) Creation of second charge on the land of the member of the Society
enabling him to draw finance for agricultural operations.
(4) Nomination of members of Committee by State Government in certain
cases;
(5) Winding up of Co-operative Banks.
Accordingly, an amendment Bill was prepared and forwarded to the
Government of India with a request to get it enacted as President’s Act. The
Government of India suggested certain changes in the Bill. As elections to
the State Legislature were to be held the Bill was not enacted as a
President’s Act.
It is now considered necessary to amend the Mysore State Co- operative
Societies Act 1959, so as to facilitate the extension of Deposit Insurance
Scheme to Co- operative Banks, to allow for the admission of Commercial
Banks as nominal members of the Co- operative Societies, to afford relief to
the borrowers from Co- operative Society to get proportionate release of
charge on lands where partial discharges of loans are made and where
Area Development Works are taken up in com pact areas to protect the
interest of Government or Land Development Bank financing the scheme, to
make suitable provision in the Act for nomination of two- thirds of the total
number of Directors on the Board of Directors of any Co-operative Society in
which Government hold shares of the value not less than 50 percent of the
share capital of Co- operative Society, to make provisions of framing T.A.
Rules of the members of the Co- operative Societies, to provide for the
Central Banks to initiate the Arbitration Proceedings on some of the
members of the Primary Co -operative Societies, to make provision for
disqualification of defaulters from membership of Committee of
Management, to provide for the commencement of term office of the
members, resignation of Members of the Committee and for disqualifying a
member to be appointed or continued as President, vice-president, etc., of a
co-operative society for more than six consecutive years, to provide for the
constitution of a bench comprising of two members, by the Chairman,
Mysore Co -operative Appellate Tribunal and to make provision enabling
Government to constitute an authority/authorities for the recruitment,
training, etc., of employees of the Co-operative Societies.
During the President’s rule, section 101 of the Mysore Co- operative
Societies Act, 1959 was amended by President Act No. 1 of 1972. This was
to overcome the difficulty arising out of the decision of the High Court in
regard to execution of decree against non-members. As the operation of the
President’s Act is upto March 1973, and it is necessary to continue the
provisions made therein, these provisions have to be re-enacted.
1959:KAR.ACT 11] Co-operative Societies 13
Hence the Bill.
(Published in Karnataka Gazette (Extraordinary) Part IV -2A dated 26th
February 1973 as No. 179 at page 22–24.)
IX
Amending Act 19 of 1976. —The Karnataka Co- operative Societies Act
was amended on 10th March 1976 providing for reorganization of Co-
operative Societies with a view to making the Societies more viable and to
serve the interest of weaker sections in particular and to slacken the hold of
vested interests over the Societies. But even after the amendment of the
Act, it was seen that there were some difficulties in the timely and effective
implementation of the provision of the Act. It is also considered necessary to
provide for legal steps towards ensuring proper management of the Co-
operative Institutions as also for effective action on the erring Co- operative
Societies. Accordingly the provisions pertaining to the following matters
have been amended suitably by promulgating Ordinance Nos. 15 and 19 of
1976 on 19th July 1976 and 7th August 1976 respectively:
(1) Reorganization of Co-operative Societies.
(2) Appointment of Special Officers to Co-operative Societies.
(3) Power to give direction to Co-operative Societies.
(4) Appeal provisions under the Act as consequential measure.
(5) Removal and disqualification of members on the Committee of
Management.
(6) Extending the indemnity provision to the new Management
Committee and the Administrators and Special Officers appointed under the
Act.
The reorganization of Co- operative Societies was of an urgent nature.
The Reserve Bank of India and the Government of India were pressing all
State Governments to immediately complete the reorganization of Co-
operative Societies so as to enable effective implementation of the 20 Point
Economic Programme.
In certain cases immediate action for taking over the management of Co-
operative Societies is considered essential. Hence a new Section 30(A) has
been included. It is also considered to have legal authority to enable
Government to give directions in public interest, to Co- operative Societies.
Provision for removal of members of the Committees existed in the rules. It
was necessary to make provision under the Act.
The provision regarding the indemnifying the officers who acted in good
faith was sought to be extended to the new Committee s of Management as
also administrators and the Special Officers appointed under the Act is
considered necessary.
All the amendments were of urgent nature in the interest of development
of Co-operative Movement on right lines and in the absence the Legislative
Assembly in Session recourse to promulgation of Ordinance had to be
resorted to.
These amendments do not involve additional cost to Government.
This Bill seeks to replace the said Ordinances.
1959:KAR.ACT 11] Co-operative Societies 14
(Published in Karnataka Gazette (Extraordinary) part IV -2A dated 8th
November 1976 as No. 4430 at page 7 & 8.
X
Amending Act 70 of 1976. — The Karnataka Co-operative Societies Act
was amended on 10th March 1976 providing for reorganization of Co-
operative Societies with a view of making the Societies more viable and to
serve the interest of weaker sections in particular and to slacken the hold of
vested interests over the Societies. But even after the amendment of the
Act, it was seen that there were some difficulties in the timely and effective
implementation of the provision of the Act. It is also considered necessary to
provide for legal steps towards ensuring proper management of the Co-
operative Institutions as also for effective action on the erring Co- operative
Societies. Accordingly the provisions pertaining to the following matters
have been amended suitably by promulgation Ordinance Nos. 15 and 19 of
1976 on 19th July and 7th August respectively.
(1) Reorganization of Co-operative Societies.
(2) Appointment of Special Officers to Co-operative Societies.
(3) Power to give direction to Co-operative Societies.
(4) Appeal provisions under the Act as consequential measure.
(5) Removal and disqualification of members on the Committee of
Management.
(6) Extending the indemnity provision to the new Management
Committee and the Administrators and Special Officers appointed under the
Act.
The reorganization of Co- operative Societies was of an urgent nature.
The Reserve Bank of India and the Government of India were pressing all
State Governments to immediately complete the reorganization of Co-
operative Societies so as to enable effective implementation of the 20 Point
Economic Programme.
In certain cases immediate action for taking over the management of Co-
operative Societies is considered essential. Hence a new Section 30(A) has
been included. It is considered to have legal authority to enable Government
to give directions in public int erest, to Co -operative Societies. Provision for
removal of members of the Committee s existed in the rules. It was
necessary to make provision under the Act.
The provision regarding the indemnifying the officers who acted in good
faith was sought to be ext ended to the new Committee s of Management as
also administrators and the Special Officers appointed under the Act is
considered necessary.
All the amendments were of urgent nature in the interest of development
of Co-operative Movement on right lines and in the absence the Legislative
Assembly in Session recourse to promulgation of Ordinance had to be
restored to.
These amendments do not involve additional cost to Government.
This Bill seeks to replace the said ordinances.
(Obtained from L.A. Bill No. 45 of 1976)
1959:KAR.ACT 11] Co-operative Societies 15
(Published in the Karnataka Gazette (Extraordinary) Part IV -2A
dated 8-12-1976 as No. 4430.)
XI
Amending Act 71 of 1976. — With a view streamline the working of the
Co-operatives and to enable them to play an effective role in the
implementation of the economic policies and programmes of Government,
certain amendments to the Co- operative Societies Act were considered
necessary:—
(i) To enable specially the urban banks to allow institutions like firms etc.,
to be admitted as members;
(ii) To bar persons carrying on the same kind of business as that of a Co-
operative Society from being members;
(iii) To deny voting rights to name- sake societies who used to be
activised at the time of election and to deny voting rights to surities also as
in the case of defaulters since their responsibility were co-existance with the
defaulters;
(iv) To enable the State Land Development Banks to float debentures
without mortgage of securities in view of their diversified finances even
including Dairy Development to put a stop the tendency of the Co- operative
Societies holding their meeting at inconvenient places with ulterior motives;
(v) To make the penalties for offences committed under the Act more
rigorous.
All these amendments would help to streamline the working of the Co-
operative Societies to instil a sense of responsibility amongst the office
bearers, the loanees, surities, etc.
Hence the Bill.
(Obtained from LA Bill No. 65 of 1976.)
XII
Amending Act 14 of 1978. — With a view to make the Co- operative
Societies effective instruments of assisting the weaker sections and also for
handling the financing of agricultural production on an increasing scale, it
was considered necessary to reorganize the Co- operative Societies into
stronger units. The need for r eorganization of these Societies into viable
units has gained urgency in view of the necessity for filling up the credit gap
as a result of the Debt Relief measure which apart from redeeming the
debts of weaker sections has resulted in more or less drying up the
traditional sources of available finance.
Writ petitions were filed before the High Court of Karnataka by the
Primary Agricultural Credit Co -operative Societies/individuals challenging
the validity of the provisions of section 14A of the Karnataka Co-operative
Societies Act, 1959, as also the orders issued by the Deputy Registrars of
Co-operative Societies.
The Hon’ble High Court of Karnataka while disposing of the writ petitions
has upheld the constitutional validity of section 14A of the Karnatak a Co -
operative Societies Act, 1959 but the orders issued by the authorities under
1959:KAR.ACT 11] Co-operative Societies 16
section 14A of the Act have been struck down on the ground of non-
application of the principle of udi alterem partem.
As the amalgamation and reorganization of societies alr eady taken place
and the said societies have functioned for quite some time it was not
practicable to revert back to the original position. Hence it was considered
necessary to validate the action taken earlier by specifically excluding the
application of principle of natural justice before taking action under section
14A of the Act by suitably amending the Act with retrospective effect.
Since the Legislature Council was not in session an Ordinance was
promulgated. This Bill seeks to replace the said Ordinance.
(Published in Karnataka Gazette (Extraordinary) Part IV -2A dated 30th
June 1978 as No. 1005 at page 4.)
XIII
Amending Act 16 of 1979. —In December 1968, Government
constituted a Committee with the Deputy Minister for Co- operation as the
Chairman and non-official Presidents of some major co-operative institutions
and officers of Government as members to consider the various
amendments to the Mysore Co- operative Societies Act, in the light of the
policies and programmes of Government and also the experience gained by
the Department of Co- operation in implementing the various provisions of
the existing Act. The Committee after a detailed consideration of the working
of the various classes of cooperative societies submitted its
recommendations suggesting certain amendments to the Act.
It is considered necessary to amend the Act as recommended by the
Committee subject to certain modifications. Hence this Bill.
(Published in Karnataka Gazette (Extraordinary) Part IV -2A dated 16th
March 1970 as No. 94 at page. 58.)
XIV
Amending Act 3 of 1980. —Under the existing provisions of the
Karnataka Co-operative Societies Act, 1959, the Registrar of Co- operative
Societies is empowered to get the accounts of the Co- operative Societies
audited by a person authorized by him.
In order to ensure that the accounts of the Co- operative Societies are
audited by independent persons, the State Government has created a
separate audit wing with the Chief Auditor as the head thereof. This wing
has been functioning effectively since more than two years.
In order to give the Chief Auditor and officers sub- ordinate to him
statutory recognition it was considered necessary to amend the Co-
operative Societies Act 1959 suitably. As the matter was very urgent, the
Karnataka Co-operative Societies (Amendment) Ordinance 1979 (Karnataka
Ordinance No. 20 of 1979) was issued.
Hence this Bill to replace the said Ordinance.
(Published in Karnataka Gazette (Extraordinary) Part IV -2A dated 27th
February 1980 as No. 139 at page 6.)
1959:KAR.ACT 11] Co-operative Societies 17
XV
Amending Act 4 of 1980. — Section 14A of Karnataka Co- operative
Societies Act was first introduced by an amendment to Karnataka Co-
operative Societies Act through Karnataka Co- operative Societies
Amendment Act 1975. Sub -section (1) of Section 14 -A contained a provi so
providing for the previous sanction in writing of the Reserve Bank of India in
the case of amalgamation, division, Re- organization of Co-operative Banks.
This proviso was retained when further amendment were carried out by
Karnataka Act 19 of 1976. When the Karnataka Act 70 of 1976 was
published carrying out further amendments to the Co- operative Societies
Act it is found that this proviso to sub- section (1) of Section 14 -A is not
found in the Karnataka Act 70 of 1976. In this amendment the sub- section
(1) of Section 14- A was substituted by new provision and the proviso was
left out.
Hence an amendment to Section 14-A is necessary for incorporating then
proviso which was left out while further amendments were made in
Karnataka Act 70 of 1976.
Hence this Bill.
(Published in Karnataka Gazette (Extraordinary) Part IV -2A dated 29th
February, as No. 151 at page. 3.)
XVI
Amending Act 5 of 1984. —The Karnataka Co- operative Societies Act,
1959 has revealed in the course of working the need for some amendments
on the lines of the recommendations made by K. H. Patil Committee for
speedy implementation. It has become necessary to amend the provisions
relating to audit, so that Government could constitute an audit board for
audit of accounts of Milk Co -operative Unions and Milk Co -operative
Federations in the State. It has also become necessary to amend the
chapter relating to the “Land Development Bank” so that the bank could take
up expeditiously developmental activities for which funds could be made
available on the basis of hypothecation of moveable property. The penalties
under the Act have been enhanced by way of fine, imprisonment to create a
deterrant impact on the persons committing offences under the Act.
Hence the Bill.
(Published in Karnataka Gazette (E xtraordinary) Part IV -2A dated 24th
February 1984 as No. 139 at page 16.)
XVII
Amending Act 34 of 1985. —It is considered necessary to amend the
Karnataka Co- operative Societies Act, 1959 for speedy recovery of large
amounts due from the members of various Co -operative Institutions in the
State of Karnataka. The Amendment proposed enables the State
Government to purchase the defaulters’ properties by Government bidding
in the public auction and to dispose of such properties in such manner as
Government deems fit.
2. As the matter was very urgent, and the Legislative Assembly was not
in session, the Karnataka Co- operative Societies (Amendment) Ordinance,
1959:KAR.ACT 11] Co-operative Societies 18
1985 (Karnataka Ordinance No. 15 of 1985) was issued. This Bill seeks to
replace the said ordinance.
(Published in Karnataka Gazette (Extraordinary) Part IV -2A dated 29th
July 1985 as No. 405 at page 3.)
XVIII
Amending Act 34 of 1991. —It is considered necessary to omit section
101-C, since other provisions relating to recovery of Co- operative dues are
found to be adequate and the purchase of immovable property by the State
Government in the auctions has caused un- necessary anxiety and hardship
to the farmers.
Hence the Bill.
(Published in Karnataka Gazette (Extraordinary) Part IV -2A dated 30th
September 1991 as No. 622 at page 254.)
XIX
Amending ActExcerpt shown. Open the full act in Lexace.