LexThe UTTARAKHAND SELF RELIANT CO-OPERATIVES ACT, 2003
Uttarakhand · state statute
Open in Lexace · Ask the AI about this actUTTARAKHAND SELF RELIANT CO-OPERATIVES ACT, 2003
[UTTARAKHAND ACT NO. 04 OF 2003]
AN
ACT
to provide for the formation and transformation of co -operatives as self -reliant, self-help, mutual-
aid, autonomous, voluntary, democratic, business enterprises, j ointly owned, managed and controlled by
their members for their economic and social betterment, through the financially gainful provision of core
services which fulfill a common need felt by them, and for the matters connected therewith or incidental
thereto, be it enacted by the Legislature of the State of Uttarakhand in the 54the year of the republic of
India, as follows:
CHAPTER I
PRELIMINARY
Short title,
extent and
commencement
1. (1) This Act may be called the Uttarakhand Self Reliant Co-operatives Act, 2003.
(2) It extends to the whole of the State of Uttarakhand.
(3) It shall come into force on such date as the State Government may, by notification
in the Uttarakhand Gazette, appoint in this behalf:
Provided that while appointing such date, the State Government may declare that
any provisions to be specified in the declaration shall not come into force from the
date so appointed and in that case such provision shall come into force from such date
or dates as the State Government may similarly appoint in that behalf.
Definitions 2. In this Act, unless the context otherwise requires,
(1) “arbitral tribunal” means a tribunal consisting of an individual or a group of
individuals not being even in number, constituted by the general body of a co -
operative for settlement of disputes, in accordance with the articles of
association of that co-operative:
(2) “articles of association” means the regulations of the co -operative as
originally framed by the promoters of a co-operative or as amended from time
to time by the general body of that co -operative, in accordance with this act,
for the management of the affairs of such co-operative.
(3) “Board” or “Board of Directors” means the governing body of a co -operative
by whatever name called, to which the direction of the affairs of the co -
operative is entrusted by the articles of association of that co-operative;
(4) “chief executive” means that individual, in paid or honorary capacity,
nominated or elected or appointed by the Board of a co-operative from among
members, d irectors or others, in accordance with the articles of association,
who is the person to sue or be sued on behalf of the co -operative, and who
performs such functions, and has such responsibilities and powers as are
specified in the articles of association, and assigned by the Board;
(5) “common need” means that economic need which is common to all those who
wish to form a co-operative, or have taken membership in a co -operative, and
which the co -operative is expected to fulfil through the provision of core
services;
(6) “co- operative”, where used as a noun, means a self -reliant, self-help, mutual-
aid, autonomous, voluntary, democratic, business enterprise registered under
this Act, which is jointly owned, managed and controlled by its members,
who may be individuals or
Co-operatives, for their economic and social betterment, through the
financially gainful provision of core services which fulfill a common need
felt by them;
(7) “co-operative business” means a business which is committed to functioning
in accordance with the principles of cooperation, and includes all co -
operatives registered under this Act ;
(8) “co -operative identity” means the statement of Co -operative Identity
specified in Schedule A of this Act.
(9) “co-operative society” means a society registered under the U.P. co -operative
Societies Act, 1965, before and after the appointed day of creation of
Uttarakhand Under U.P Reorganization Act, 2000;
(10) “ Co- operative society Act” means U.P. Co-operative Societies Act, 1965;
(11) “core services” means those central services provided to members, through
which a co -operative intends to meet that economic need common to all
members for the fulfillment of which the co -operative was established, and
the fulfillment of which is expected to re sult in the economic and social
betterment of members;
(12) “Court” means the principal Civil Court of original jurisdiction in a district,
and includes the High Court in exercise of its original civil jurisdiction;
(13) “deficit” means the excess of expen diture over income, arrived at, at the end
of a financial year;
(14) “deficit charge” means the amount collected from/debited to the accounts of
members, in proportion to the use and/or non -use of the services of the co -
operative, in accordance with the articles of association and resolutions of the
general body, to meet deficit, if any, in whole or part;
(15) “delegate” means a member nominated by a co -operative to represent its
interests at the time of promotion of a secondary co -operative, and/or at
meetings of a secondary co-operative to which the co-operative is affiliated;
(16) “director” means a member elected in accordance with the articles of
association, to the Board of the co-operative;
(17) “ Financial year” means the year commencing from the fir st day of April and
ending on thirty first March next following, except if otherwise provided for
in the articles of association;
(18) “ general body” in relation to a co-operative, means all its members;
(19) “general meeting” means a meeting of the gener al body called and conducted
in accordance with the provisions of this Act and the articles of association of
the co-operative;
(20) “ government” means the Government of Uttarakhand;
(21) “member” means a person who is in need of and is able to use the co re
services of a co-operative and who is admitted and continues a member of the
co-operative, in accordance with the provisions of this Act and the articles of
association of that co-operative, and includes a “member-co-operative”.
(22) “Member-Co-operative” means a primary or secondary co -operative which is
in need of and is able to use the core services of a secondary co -operative,
and which is admitted as a member of that secondary co -operative, in
accordance with the provisions of this Act and the artic les of association of
that secondary co-operative;
(23) “memorandum of association” means the document expressing the desire of
the promoters to form themselves into a co-operative;
(24) “office -bearer” means a Director elected by the Board of a co -operative to
any office of such co-operative in accordance with its articles of association;
(25) “officer of the co -operative” means the president, vice president, chairmen,
vice chairmen, secretary, chief executive, member of committee of
management, treasurer, liquidator, or any other persons employed by a co -
operative whether with or without remuneration to carry on the business of
the co-operative or to supervise its affairs;
(26) “ ordinary resolution” means a resolution of the general body which has the
approval of the majority of members with the right of vote, present and
voting at the general meeting;
(27) “ person” means an individual or institution competent to contract;
(28) “ potential member” means a person who needs the core services being
offered by a co-operative, and is eligible to be a member of that co -operative,
but is not yet its member;
(29) “president” means the president elected among the elected members of the
Board to preside over its meetings and the meetings of the general body, and
to perform such other functions and have such other powers and
responsibilities as are specified in the articles of association and assigned by
the Board;
(30) “primary co -operative” means a co -operative whose members are
individuals;
(31) “ Registrar” means the person for the time being appointed as Registrar of
Co-operatives by the State Government under this Act;
(32) “ secondary co -operative” means a co -operative whose members are primary
co-operatives;
(33) “special resolution” means a resolution o f the general body, at a meeting
called with at least 15 days notice, which has the approval of more than half
of all the members of the co -operative with right of vote at the time of the
general meeting, or of at least two-thirds of members with right of vote at the
time of the general meeting and present in the general meeting, whichever is
less;
(34) “surplus” means the excess of income over expenditure, arrived at, at the end
of the financial year;
(35) “surplus refund” means the refund from the surplus given/credited to the
accounts of members, in proportion to their use of the services of the co -
operative in accordance with the provisions of the articles of association
made therein;
CHAPTER II
REGISTRATION
Registration of
a Co-operative
3. (1) The State Government may appoint a person to be the Registrar of co -
operatives for the State.
(2) The State Government may for the purposes of this Act, by general or special
order, appoint other persons to assist the Registrar and may confer on such
person any or such of the powers of the Registrar as the government may
specify.
(3) From the date of notification of this Act, all co -operative businesses in
reference to Schedule A, whose members are drawn from within the state of
Uttarakhand shall be registered under this Act.
(4) A memorandum of association in the form provided for in Schedule B, may
be submitted to the Registrar by hand or by registered post, signed by the
individuals who wish to form a primary co -operative or by the delegates of
co-operatives which wish to form a secondary co-operative.
(5) 7 or more individuals or two or more cooperatives may from a cooperative
under this Act.
(6) The Registrar shall reg ister the memorandum of association, and also take on
record its articles of association and communicate by registered post a
certificate of registration, as specified in Schedule C, and a certified copy of
the memorandum of association and of the articles of association signed by
him/her, within sixty days from the date of submission of the memorandum
of association, to such person as is specified in the Memorandum.
(7) if the conditions laid down in sub -section 5 (4) are not fulfilled, the Registrar
shall communicate by registered post the order of refusal together with the
specific reasons therefore, within sixty days from the date of submission of
memorandum, to such person as is specified in the memorandum.
Provided that no order of refusal shall be passed except after giving
an opportunity of making representation on behalf of the promoters by the
person specified in the Memorandum.
(8) Where a co -operative is registered under sub -section (6), the certificate of
registration signed and sealed by the Registrar shall be conclusive evidence
that the association mentioned therein is a co -operative duly registered under
this Act, unless it is proven that the registration of the co -operative has been
cancelled.
(9) Where within seven ty-five days of submission of the Memorandum for
registration, the person specified in the Memorandum receives neither the
certificate of registration nor the order of refusal, the cooperative will be
deemed to be registered under this Act, and the Registr ar shall issue a
certificate of registration, within the following 15 days.
Conversion of a
co-operative
society under
this Act
4. (1) Notwithstanding anything in the Uttarakhand cooperative Societies Act, 2003,
a co-operative society registered under t he Co-operative Societies Act, 2003,
may opt for registration under this Act through a special resolution of the
general body :
Provided that where the cooperative society is in receipt of share
capital from the government, it shall und ertake, in writing, to retire such
share capital within 5 years from the date of registration, at the rate of not
less that 15% per annum, of the total equity of the government on the date of
conversion.
(2) The registration of such society shall be made in ac cordance with the
provisions of this Act, and where within seventy five days of submission of
the Memorandum for registration as specified in schedule D, the person
specified in the Memorandum receives neither the certificate of registration as
specified in schedule E nor the order of refusal, the promoters may move the
appropriate Court of Law.
Co-operative to
be a body
corporate
5. On registration, every co-operative shall become a body corporate by the name
under which it is registered having p erpetual succession and a common seal.
The co -operative shall hold and dispose of property, enter into contracts,
institute and defend suits and other legal proceedings and do all other things
necessary for the purpose for which it was constituted and regi stered under
section 3 and 4 of this Act.
Articles of
association
6. (1) The members constituting a co -operative, shall have a set of articles of
association, formulated and amended from time to time, which shall not be in
contravention to the provisions of this Act;
(2) Except on such specific matters which the Act has provided for and which the
articles of association may further regulate on but not contravene, the
functioning of every co -operative shall be regulated by its articles of
association.
(3) T he articles of association may contain such matters as are decided by the
members and shall be specific on all matters listed in Schedule F of this Act.
Amendment of
articles of
association
7. (1) A co -operative may decide, by a special resolution, to a mend its articles of
association;
Provided that the text of such proposed amendment with reasons therefore
shall be sent to each member, along with the notice of the general meeting in
which the proposed amendment is to be discussed.
(2) A copy of any amendment shall be forwarded by the co-operative by registered
post to the Registrar within a period of thirty days from the date of the general
meeting at which the resolution was passed.
(3) Every such amendment forwarded to the Registrar shall be signed by the
President and two Directors and shall be accompanied by the following
particulars:
(a) A copy of the resolution agreeing to the amendment;
(b) the date of the general meeting at which the amendment was approved;
(c) the date on which the amendment comes into force.
(4) The Registrar shall take on record the amendment immediately on receipt of
the notice:
Provided that the Registrar may refuse to record such amendment(s) if in
his opinion any such amendme nt (s) is/are contrary to the provisions of this
Act;
Provided further that no such order refusing to record the amendment
shall be passed, unless the co -operative concerned is given an opportunity of
being heard.
name of a co -
operative
8. (1) A co -operative may not be registered with the same name as another co -
operative business already registered under this Act or the Co -operative
Societies Act :
Provided that where the articles of association of a secondary co -
operative require all its member -co-operative shall have its location or other
distinguishing feature included in common name.
(2) Every co -operative shall display its full name in legible characters in a
conspicuous position:
(a) at every office or place at which it carries on business;
(b) in all notice and other official publications;
(c) on all its contracts, business letters, orders for goods, invoices,
statements of accounts, receipts and letters of credit; and
(d) on all bills of exchange, promissory notes, endorsements, cheques and
orders for money it signs or that are signed on its behalf.
(3) Every co -operative shall display its full name in legible characters on its
common seal.
(4) Nothing in Sub -section (2) shall prevent a co -operative displaying more
conspicuously than the ful l name, any shorter name by which it is popularly
known and which is specifically provided for in the articles of association.
(5) A Co-operative may, by an amendment to its articles of association, change
its name;
provided, however, that b efore changing its name it shall send notice
of its intention to change its name to the Registrar, along with proposed name/s,
and the Registrar shall, within fifteen days of receiving such notice inform the co -
operative if such name is already in use by another co-operative.
(6) Where a co-operative changes its name, the Registrar shall
(a) enter the new name of the co-operative in the register of co-operatives
in place of the former name;
(b) make necessary changes in the memorandum of association and
articles of association;
(c) issue a fresh certificated of registration with the necessary alterations;
(d) communicate to the co -operative, by registered post, the fresh
certificate of registration along with certified copies of the amended
Memorandum and Articles.
(7) The change of name of a co-operative shall not affect any rights or obligations
of the co -operative or of any of its members or past members of render
defective any legal proceeding by or against it; and any legal proceedings
which might have been continued or commenc ed by or against the co -
operative by its former name may be continued or commenced by its new
name.
(8) A co-operative which changes its name shall publicise such change in name in
a popular newspaper in the district in which its registered office is located.
Location of
Registered
office
9. (1) Every co -operative shall notify to the Registrar the full address of its
registered office, within ninety days of being registered as a co-operative.
(2) Every Co-operative shall display in full the address of its Registered office in
legible characters in a conspicuous position:
(a) at every office or place at which it carries on business;
(b) in all notices and other official publications;
(c) on all its contracts, business letters, orders fo r goods, invoices,
statements of account, receipts and letters of credit; and
(d) on all bills of exchange, promissory notes, endorsements, cheques
and orders for money it signs or that are signed on its behalf.
(3) A co -operative may, by a resolution of the Board of Directors, Change the
address of its registered office:
Provided, however, that it shall give notice of such change to its
members, creditors, the Registrar and to any seconda ry co -operative/s to
which it may be affiliated, within fifteen days of the Board resolution, and to
its members and creditors, at least ten days before effecting the change.
(4) The Registrar shall, within fifteen days of receiving information from a co -
operative, take on record, in the registrar of co -operatives, the full address of
the registered office of a co-operative, and any changes there of.
Transfer of
assets and
liabilities
10. (1) A co -operative may, by a special resolution, decide to transf er its assets and
liabilities, in whole or in part, to any other co -operative which agrees, by a
special resolution, to receive such assets and liabilities.
(2) Where special resolutions are passed under sub -section (1), each co -operative
shall, within the following 15 days, give notice thereof together with a copy of
the resolution passed by it to all its members and creditors, and
notwithstanding any provision in the articles of association or contract to the
contrary, any member other than on e who voted in favour of the proposed
transfer of assets and liabilities and any creditor shall, during a period of
fifteen days from the date of ser vice of the notice upon him/her, have the
option of withdrawing from the co -operative, his/her interests, subject to t he
discharge of his/her obligations to the co-operative.
(3) Any member or creditor who does not exercise his/her option within the
period spec ified in sub -section (2) shall be deemed to have agreed to the
resolution.
(4) The special resolution passed under sub-section (1) shall not take effect until-
(a) all claims of the members and creditors of each co -operative who have
exercised the option under sub -section (2) have been met in full or
otherwise satisfied; and
(b) information about the transfer of assets and liabilities has been sent by the
co-operative concerned to the Registrar and the Registrar’s
acknowledgement of receipt of the information received.
(5) When special resolutions passed under sub -section (1) take effect, the
resolutions shall be sufficient conveyance to vest the assets and liabilities in
the transferee without any further assurance.
(6) When a co -operative transfers the whole of its assets and liabilities to any
other co-operative, under this section, the registration of the co-operative shall
stand cancelled and it shall be deemed to have been dissolved and shall cease
to exist as a registered body, and the Registrar shall delete the name of the co -
operative from the register of co-operatives.
Division 11. (1) A co-operative may, by a special resolution, decide to divide itself into two or
more co-operatives.
(2) Where a special resolution is passed under sub -section (1), the co -operative
shall, within the following 15 days, give notice thereof together with a copy of
the re solution to all its members and creditors and, notwithstanding any
provision in the articles of association or contract to the contrary, any member
other than one who voted in favour of the proposed division, or creditor shall,
during a period of fifteen d ays from the date of service of the notice upon
him/her, have the opt ion of withdrawing from the co -operative, his/her
interests, subject to the discharge of his/her obligations to the co-operative.
(3) Any member or creditor who does not exercise his/her option within the
period specified in sub -section (2) shall be deemed to have agreed to the
resolution.
(4) A special resolution passed under sub-section (1) shall not take effect until
(a) all claims of the mem bers and creditors of the co -operative who h ave
exercised the option under sub -section (2) have been met in full or
otherwise satisfied;
(b) information of the impending division and settlement of claims of
members and creditors is sent to the Registrar and the Registrar’s
acknowledgment of receipt of the information is obtained; and
(c) the certificates of registration and the copies of the registered
Memorandum and articles of association of the resultant co -operatives,
signed and sealed by the Registrar, are issued in accordance with section
3.
(5) When a co -operative divides itself into two or more co -operatives under this
section, the registration of the erstwhile co-operative shall stand cancelled and
it shall be deemed to have been dissolved and shall cease to exist as a body
corporate and the Registrar shall delete the name of the co -operative from the
register of co-operatives.
(6) When a co -operative divides itself into two or more co -operatives, each
member who has assented to the division shall be deemed to have become a
member of that newly formed co -operative to which his/her interests were
transferred, in accordance with the scheme of division approved by the
general body.
(7) When a special resolution passed under sub -section (1) takes effect, the
resolution shall be sufficient conv eyance to vest the assets and liabilities in
the transferees without any further assurance.
Amalgamation 12. (1) Any two or more co -operatives may, by special resolutions, decided to
amalgamate themselves and form a new co-operative.
(2) where special re solutions are passed under sub -section (1), each co -operative
shall, within the following 15 days, give notice thereof together with a copy of
the resolution passed by it to all its members and creditors, and
notwithstanding any provision of the articles o f association or contract to the
contrary, any member other than on who voted in favour of the proposed
amalgamation, or creditor shall, du ring a period of fifteen days from the date
of service of the notice upon him/her, have the option of withdrawing fro m
the co -operative, his/her interests, subject to the discharge of his/her
obligations to the co-operative.
(3) Any member or creditor who does not exercise his/her option within the
period specified in sub -section (2) shall be deemed to have assen ted to t he
resolution.
(4) The special resolution passed under sub-section (1) shall not take effect until-
(a) all claims of the members and creditors of each co -operative who have
exercised the option under sub -section (2) have been met in full of other
wise satisfied;
(b) information of the impending amalgamation and settlement of claims o f
members and creditors is sent to the Registrar and the Registrar’s
acknowledgement of receipt of the information is obtained; and
(c) the certificate of registration and a c opy of the Memorandum and articles
of association of the resultant co -operative, signed and sealed by the
Registrar, are issued in accordance with section 3.
(5) When two or more co -operatives amalgamate themselves into a new
cooperative under this section , the registration of the co -operatives so
amalgamated shall stand cancelled and they shall be deemed to have been
dissolved and shall cease to exist as body corporates, and the Registrar shall
delete the names of the co-operatives from the register of co-operatives.
(6) When two or more co -operatives amalgamate themselves into a new co -
operative under this section, all the members of the co -operatives who have
assented or are deemed to have assented to the amalgamation shall be deemed
to have been become members of the new co-operative.
(7) When special resolutions passed under sub -section (1) take effect, the
resolutions shall be sufficient conveyance to vest the assets and liabilities in
the transferee without any further assurance.
Merger 13. (1) A Co-operative may, by a special resolution, decide to mere itself into any
other co-operative which agrees, by a special resolution, to such merger.
(2) Where special resolutions are passed under sub -section (1), each co-operative
shall, within the following 15 days, give notice thereof together with a copy of
the resolution passed by it to all its members and creditors, and
notwithstanding any provision in the articles of association or contract to the
contrary, any member other than one who voted in fa vour of the proposed
merger, or creditor shall, during a period of fifteen days from the date of
service of the notice upon him/her, have the option of withdrawing from the
co-operative, his/her interests, subject to the discharge of his/her obligations
to the co-operative.
(3) Any member or creditor who does not exercise his/her option within the
period specified in sub -section (2) shall be deemed to have assented to the
resolution.
(4) The special resolutions passed under sub -section (1) shall not take effect
until-
(a) all claims of the members and creditors of each co -operative who have
exercised the option under sub -section (2) have been met in full or otherwise
satisfied; and
(b) information of the impending merger and settle ment of claims of
members and creditors is sent to the Registrar and the Registrar’s
acknowledgement of receipt of the information is obtained.
(5) When a co -operative merges itself into any other co -operative under this
section, the registration of the co -operative shall stand cancelled and it shall
be deemed to have been dissolved and shall cease to exist as a registered
body, and the Registrar shall delete the name of the co -operative from the
register of co-operatives.
(6) When a co -operative merges it self into any other co -operative under this
section, the members of the first co-operative shall be deemed to have become
the members of the second co-operative.
(7) When special resolution s passed under sub -section (1) take effect, the
resolutions shall b e sufficient conveyance to vest the assets and liabilities in
the transferee without any further assurance.
Fee for services 14. (1) The submission of Memorandum for registration as a co -operative under this
Act shall be accompanied by a fee amounting to one percent of the authorized
equity capital of the proposed co -operative, such, however, that the fee shall
be not less than rupees two hundred;
Provided that the fee shall be rupees two hundred in the case of such
co-operatives as do not intend to have any equity capital.
(2) The fee to be paid by co -operatives and others for various service rendered by
the Registrar under this Act may be fixed by the Government and made
known to the Registrar, who in turn shall make such information available to
any interested person :
Provided that any change in the fee payable for any service may be
made by the Government only after publishing in two leading vernacular
newspapers or advertising in the vernacular electronic media, in viting
comment from those affected.
CHAPTER III
MEMBERSHIP
Eligibility for
membership in
a co-operative
15. (1) Any person who needs the services of a co -operative, expresses willingness to
accept the responsibilities of membership, meets such other conditions as may
be specified in the articles of association of the co -operative, and is in a
position to use the services, may seek membershi p and be admitted as a
member :
Provided that the co-operative is in a position to extend its services to the
applicant.
(2) Every applicant for membership, and every member of a co -operative must
keep each co -operative of which the person is a member, informed of
membership in other co-operatives, and it shall be lawful for a co -operative to
refuse admission or remove from membership on grounds, among other, of
dual or conflicting membership.
Admission of
Members
16. (1) Admission to membership shall be made, in accordance with the procedure
specified in the articles of association, only by an elected Board.
(2) Where admission is refused, the decision with the reason thereof shall be
communicated by registered post to such applicant within fifteen days of the
date of the decision, or within sixty days from the date of application for
membership, whichever is earlier.
(3) Where an applicant has been refused admission by the Board, or has had no
response from the Board, the applicant may request the Board to place the
matter for review by the arbitral tribunal. The Board shall place the matter
before the arbitral tribunal at its next meeting and the decision of the general
body shall be final;
Provided that the applicant shall be given opportunity to be heard by the
arbitral tribunal.
Membership
withdrawal
17. (1) A member may at any time withdra w from membership in a co -operative in
accordance with the procedure specified in the articles of association of that
co-operative
(2) Before withdrawal from membership he/she will fulfil all such obligations a s
were enjoined upon him/her as a member, under the provisions of this Act, the
articles of association or other agreements.
Cessation of
membership
18. (1) A person shall cease to be a member on death or on incurring such
disqualification as may be specified in the articles of association.
(2) Every co-operative shall inform, in the event of the death of the member, the
nominee of the member, and in every other instance, the member, about the
cessation of membership and consequence thereof.
Termination of
membership
19. (1) The Board of a co -operative may terminate the membership of a person who
has acted adversely to the objects and interests of the co -operative, including
the violation by the member of the articles of association of the co -operative,
the policies of the general body or Boar d, and/or contracts entered into by t he
member with the co-operative :
Provided the member has been given a fair opportunity to make a
representation at the Board meeting as to why membership should not be
terminated.
(2) Where the membership o f a person has been terminated by the Board, the
person may request the Board to place its decision for review by the arbitral
tribunal. The Board shall place the matter before the general body at its next
meeting and the decision of the arbitral tribunal shall be final;
Provided that pending the decision of the general body the person may
have only such transactions, if any, with the co-operative, as may be permitted
by the Board.
Register of
members
20. (1) Every co -operative shall maintain a register of members. The name of every
person admitted as a member of the co -operative, the date of admission, and
the address of the member shall be entered in the register along with such
other particulars as are deemed necessary by the Board.
(2) The name of eve ry person whose membership has ceased, or was terminated
or withdrawn, shall be struck off the register.
Co-operative
education
21. (1) Every co-operative shall include in its annual budget, a provision for expenses
on member and potential member educati on and staff and Board training for
the development of the co -operative in accordance with the principles and
practices of cooperation.
(2) Any balance under the budget head provided for under sub -section (1) shall be
transferred at the end of the year int o a co-operative education fund, and may
be used only for the purpose of educating and training members, potential
members, staff and Directors in co-operative principles and practices.
Services
primarily for
members
22. (1) A Co-operative’s services shall normally be available to members only.
(2) After two years of its being registered under this Act, any co -operative found
to be providing more than one -fourth of its core services, as specified in its
articles of association, in terms of the value of transactions, to non -members
in any given financial year shall be deemed to be an “aberrant co -operative”
and may be liable to lose for that year exemptions, if any, provided to it, on
the ground that it is a co-operative, by this or other laws.
(3) Any co-operative found to be “ aberrant” for continuous three years shall be
deregistered or dissolved by the Registrar;
Provided that such co -operative shall be given an opportunity of being
heard before the deregistration or the dissolution.
Exercise of
rights
23. (1) No member of a co -operative shall exercise the rights of membership,
including the right of vote, unless the member has made such payments to the
co-operative in respect of membership or has acquired and continues to have
such interest in the co -operative, including a minimum use of the service of
the co-operative, as may be specified in the articles of association.
(2) Every year, within twenty days of closure of the previous financial year, the
chief executive shall prepa re a list of members with the right of vote, and a
list of members without the right of vote, valid for the current financial year.
The list shall be affixed to the notice Board of the co -operative for
information of all members, and any member, not satisf ied with the specific
instances of inclusion or non -inclusion of members in the lists, may appeal to
the Board within ten days of the affixation of the lists on the notice Board, for
re-examination of the records, and the Board shall, within forty five da ys of
closure of the previous financial year, review the lists, finalize them and have
them affixed to the notice Board of the co-operative.
Voting rights of
members
24. (1) In primary co-operatives, each members shall have one vote :
provided that a person shall have been a member for at least one full
financial year, before being eligible to vote :
provided that the condition of one year membership shall not apply to
the members who join at registration/conversion or at any time after the
registration/ conversion of a co -operative but before the first financial year
ending;
(2) In secondary co-operatives, the articles of association may make provision for
voting rights of a primary co -operative proportional to the numbers of
members in the primary cooperative.
Liability of
member
25. (1) A co-operative shall be registered with limited liability, where;
a “ co -operative with limited liability” means a co -operative in which the
liability of its members for the debts of the co -operative is limited by its
articles of association, to such form and extent as they may undertake to
contribute to any deficit in the assets of the co -operative, in the event of its
being wound up.
(2) Where a co-operative amends its articles of association to change the form and
extent of its members ‘liability, it shall, within fifteen days of such
amendment, give notice thereof together with a copy of the amendment to its
members and creditors and, notwithstanding any provision in the articles of
association or contract to the contrary, any member other than one who voted
in favour of the proposes change, or creditor shall, during a period of fifteen
days from the date of service of the notice upon him/her, have the option of
withdrawing from the co -operative, his/her inte rests, subject to the discharge
of his/her obligations to the co-operative.
(3) Any member or creditor who does not exercise his/her option within the
period specified in sub -section (2) shal l be deemed to have assented to the
resolution.
(4) An amendment passed under sub-section (2) shall not take effect until
(a) all claims of the members and creditors of the co -operative who have
exercised the option under sub -section (2) have been met in full or
otherwise satisfied; and
(b) notice of the amendment o f the articles of association of the co -operative
has been received by the Registrar in accordance with this Act.
(5) Where a co -operative is ordered to be dissolved, the liability of a past
member, who ceased to be a member, or of the estate of a deceas ed member,
who died, within two years immediately preceding the date of order of
dissolution, shall continue until completion of the liquidation proceeding, but
such liability shall be limited only to the debts of the co -operative as they
existed on the date of cessation of membership or death, as the case may be.
(6) Subject to the provisions of sub-section (5), the liability of a member or of the
estate of a deceased member for the debts of the co-operative as they existed.
(a) in the case of a past memb er, on the date on which the person ceased to be
a member; and
(b) in the case of a decease d member, on the date of his/her death; shall
continue for a period of two years from such date.
General body 26. (1) There shall be a general body for every co -operative consisting of all the
members of such co-operative.
(2) Subject to the provisions of this Act and the articles of association of a co -
operative, the ultimate power of a co -operative shall vest in the general body
of its members :
Provided that nothing contained in this sub -section shall affect the
exercise by the Board or any other authority of a co -operative of any power
conferred on such Board or such other authority by this Act.
(3) Any function or responsibility, falling withi n the scope of a co -operative as a
legal entity, which has not been specifically entrusted by this Act or the
articles of association, to any of the several authorities within the co -
operative, may be dealt with by the general body, on a reference by the b oard
of Directors.
Functions and
responsibilities
of general body
27. (1) The following and such other matters as are considered necessary by the
Board, shall be dealt with by the general body at its Annual General Meeting:
(a) action on resolutions of the previous meeting;
(b) consideration of the long term plan and budget, when required;
(c) consideration of the annual operational plan and budget for the current
financial year;
(d) appointment of auditors for the current financial year;
(e) consideration of the annual report of activities for the previous financial
year;
(f) consideration of the annual audited statements of accounts, and the audit
report relating to the previous financial year;
(g) consideration of the report on deviations, if any, from the approved budget
relating to the previous financial year and the appropriate action to be
taken;
(h) disposal of surplus, if any, of previous financial year;
(i) management of deficit, if any, of previous financial year;
(j) creation of specific reserves and other funds;
(k) review of actual utilization of reserves and other funds;
(l) review of the report on the attendance at meetings by Directors;
(m) review of the use of the co-operative’s service by the Directors;
(n) review of remuneration paid to any Director or member of any committee
or internal auditor in connection with his/her duties in that capacity or
his/her attendance at related meetings;
(o) review of quantum and percentage of services provided to non -members
vis-a vis service provided to the members;
(p) appeal of a person whose application for membership has been rejected by
the Board;
(q) appeal of a person who has been expelled from membership by the Board;
(r) report of activities and accounts related to member education and B oard
and staff training.
(2) The following and other matters when considered necessary by the Board.
shall be dealt with by the general body at its annual or other general meeting:
(a) election of Directors;
(b) amendments to articles of association;
(c) removal of Directors;
(d) elections/appointments to casual vacancies on the Board;
(e) removal, and consequent appointment of auditors;
(f) membership of the co-operative in secondary co-operatives;
(g) partnership with other co-operatives;
(h) amalgamation, division, merger, transfer of assets and liabilities;
(i) dissolution of the co-operative;
(j) Consideration of the Registrar’s report of inquiry, if any.
General
meetings
28. (1) The Board of a co -operative may, at any time , call a general meeting of the
members of the co-operative:
Provided that one such meeting known as Annual General Meeting shall
be held within one hundred any fifty days of the clo sure of the co-operative’s
financial year to deal with the matters specified in section 27 (1).
(2) The Board shall hold a special general meeting within thirty days of the date
of receipt of a requisition from:
(a) one- fifth of the members having the r ight to vote or 500 members having
the right to vote; or
(b) the Registrar, in pursuance of the Registrar’s functions under this Act;
Provided that any such requisition shall contain the reasons why the
proposed agenda and the meeting is felt necessary, and no subject other
than the subjects included in the proposed agenda shall be discussed at the
special general meeting.
(3) All Directors shall cease to be Directors at the end of the period within which
an Annual General Meeting under sub-section (1) or a special general meeting
under sub-section (2) is required to be held, if the Board fails to hold such
general meetings within the specified period.
(4) All Directors shall cease to be Directors at the Annual General Meeting, if the
audited annual fin ancial statement and auditor’s comments and observations,
if any, along with the report of activities for the previous financial year were
not made available to the members along with the notice to attend the Annual
General Meeting at which the report and accounts are to be considered by the
general body, and such general meeting shall be conducted by the chair
person appointed by the Arbitral Tribunal.
(5) The quorum for a general meeting shall be as specified in the articles of
association, but shall not be less than one-fifth of the members eligible to vote
at the meeting;
Minutes of
general
meetings
29. (1) Every co-operative shall maintain, in the language sExcerpt shown. Open the full act in Lexace.