Sikkim act 012 of 1978 : The Sikkim Coperative Socities Act,1978

Adnrissiirility^olt copy of cnt:'r'^:rs evidc:trce

E.Ke rnption from cort'rltrtlsory rcgistra tiou oI i nst rr"ttlren ts Lixr,:tnpt:ion fronr t;ertaitt taxes, fecs antl c[trlics l)rrrlttctiorr I.rorn saiar;,to nlcet society's clairrt in ccrtairr casc\ for the anrount

bo rro n,crl

socictl

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II

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r3 t4. t+

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t+ t4 I+ I+ l, r5 r5 r5 l5 r6 r6 I?

L7

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$9' 5o. 6r. bt. 6,i .

64.

trs.

66.

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SLat;c aitl to .socie tics l{egisl:r'ar's j)owcr to cletertlitre tct'r.tts of ctnploytlt:rtt itt socrit:tit:s CH/\P-IEII^VI

Pr'o'perties an<1 firncls of socicties

liunds rrot t:o bc rlivided by rvay o1t prr.,{it

Contlibution to charitable pu j-pose

Contrihr"rtiorr lo Co-o1;clative llducation [jtrntl

lul i:stur<:nt of' l\rrr<.ls

l:(est.ric:t;ilrnr; orr loa tts

llcstrictiorls on borrorvings

llestlicti<:ns on ot:her tratrsactions with notr-rtrettbers Ct-IAPl'ER^ViI

Auclit, lnquiry, Irrspectiou ancl Sttrch,rrgt:

r\udit

lnspection ol' societjes

lnquiry by Registrar

Inspcction oI books ol inclebted societics

Costs of inquiry

Ilecovcrl' o['costs

Surchar:gr:

Suspcusic,r'r. rrI olTjcer or etlrPioyee of societ;'

CiIAPT'Irll Vlll

Settlen-rent of Disputcs

I)isputcs rvhich rnay be relerred to arbitration

Refcren(r(: ol dispute to arbitration

I)orver of State Clo-opr:rativtr Bank to.Proceed

CHAPI'ER^IX

1 Winding up o1' soc:ietiex WinLling up ot' societitrs l,iqLridator

L'owers <;f' li

) 1,

74,

15.

76.

78.

79.

rit r8

r8

Ig

t9

4

Act

to consolidate and anrend t}e larv reiating to co'operative societies in the State of Sikkim.

WHEREAS it is expedient to further Ihcilitate the (rrrn,ation and rvorking of co-operative societies for the prornotion of thirift, self-help anil nrutr.,a'l ,'id ^rllorg

p"rsons with comrron econonric needs and to bring about improve',rent in agriftilture and industry through better methods of production, bet'ter busine., "ni b"t,". living

and foi that pirrpose to amend and consolidate

the law relating to co-operative societies in the State of Sikkim, Ie it enicted by the State iegislature in the.. ',2E.,,.,.)oar of^the Republic of India as follows :

ChaPter I

Preliminary

(i) Tlris Act rniry be called the Sikkim Co-operativc societier | 978.

(ii) It extend to^the ra'hole of the State of Sikkim,

(iii) It shall come into force on such date as the Governnretlt rrraY, Short+itle extc.nt anrl^t '

conjmencement^Act,

D$nitron.r

ro oJ t967

ro oJ' t949

tz d^tsss

5 oJ' t97o

ro oJ r94g

47 o-f r96t

by notification in the official Gazette appoint, f ' In this act, unless the context orherwise requires. t, (o) 'Agricultural Relinance and Development Corporation' r:rean$

the Agriculiural Re-firrar.rce and Development Corpoiation const'ih,rted under^the Agriciltural llefinance and Development Corporation Act, I953. - (lr) 'Barrk' irrclucles (tj A banking conlPauy as defined in Section 5 of the Banking

RegLrlation Act, t 9+g" " (ii) State Bank o[ India constitttted unde.r the State Bank of']ndie Act, r955. -

1iiil A 'corresponding new bank' constituted under section^3o[

the Banking -ompanies (Aiquisition and Transfer of Llndertakings) Act, I970' 1iv; Any other banking institution notified by the Cenral Govern- rnent trnder Section 5r of the Banking Regulation Act, r949'

(c) 'Bye-laws' means thi registered bye-laws'for the tilne being irr fbrce, ancl includes registered alt'Iendments of such bye-laws.

(d) 'Commiitee' means the governing body of^a society, by rvhat' ever rlarne called, to u4rich the ntanagement of the aflairs of the society ir en trusted,

(.) 'Co-operative year' means the period beginning from _rst July or the date of comrneniement o[ business or the date^of registration and ending the 3oth June for the purpose of drawing up the balance sheets

(0 'Deposit Insurance Corporation' mearrs the Deposit Insurance Corporation established under section 3 of the Deposit Insurance Corpora- rig" 4.t: -\s \ct, 195r. !, qg) 'Federal society' n'Ieans a society other thln state^co-oPera' tive baJk, iny not less than five members ol which'are themselves societies;^and

(b) in,rhich^the voting rights are so i'egrrlatc arc sr.rcietics have not less thin tliree fourths o[ the tota] number of yotes in the gene- State Government of Sikkinr.

(i) 'Industrial Development Bank' mearrs the Industrial Devclop' ment Bank of India constituted under the Industrial Development Bank of Inclia Act, | 964,

(j) 'Member' means a Person joining in the application lbr regir- tratior.r of a society and^a person adlnitted to membership after such registration in?accordance *iih this Act, the rules and dre bye-laws, and shall include^a nominal menrber and the Government when it subscribes to the share capitrtl of a society.

(k) 'Nominal member' means a person admitted to memberrhip as ruch after registration in accordance with the byc-laws, t6 oJ 1964

5

Coⁿ d.h i ons oJ' t c g i rrn - tiol

(2)

,* (l) 'Nertional Co-operative Dcvt'iopment Corporation' rueans thc National Co-operrrtive l)evelopnrent Corporation constitutcd under the Natior-r.lI Co-operative Development'Corporation Act, r 96 z.

(",) 'Oflicer' rrleans the president, vice-presidenr, chairrnan, vice- chairnran, mar.raging director, secretary, manager, inenrber of cornrnittee, treasurer, liquidator, administrator and irrciudes any other person empowerecl under the rules ,rr the bye-larvs to give clirections in regard to the business of' society.

(") 'l'rescribed' means prescribeci in tl.re rules.

(") 'Primary agricultural credit societ;,' shall have the nreanirrg a"ssignecl to it in clause (cii) of Section r of tl:e Reserve Bank of India Act, ,931 and includes a Farmers Service Society or Large-sized Multipurpose So ci ety.

(p) 'Registrar' llleans a person appointed to perforrn the I'unctior.rs of the Registrar of Co-c-rperative Societies under this Act and includes any persorl appointecl to assist the Registrar in exercise of all or any o[ his powers-under this Act.

(C) 'lleserve Bank' nreans the Reser.ve Barrk of'India constituted uncler the R.eserve Bank ol India Act, r934,

(r) 'Rules' means the rules made under. this Act,

. G) 'Society' n-reans a co-operative society registered or deenred to l>e registeleci r-rnrler this Act:

(t) 'Soc.iety rvith linrited iiabiiity' ireans a society the liability of whose nrenrbers is iimited bi'its bye-larvs to the an"rount, if ar"ry, unpaid on thi shares individually held by them or to -such amoullr as they may individuallyundertake to contribute to the assets of the society, in the event of its being rvound up.

(u) '.Society rvith unlin'rired liability' nreans society the joint or several liabiiity of whose nrenrbers to rnect any deficiency in tlre assets of dre society in tiie event ol its being wound up is unlirnited,

(r) 'State Co-operative Bank' nreans the 'siklcim State Co-opere- tive Bank l,tcl,' registered as a society under tltis Act, Chaptcr Il

Registration of Societies

i, (,) "fhe Governrnent nlay a1:poinr I person to be thc Ilegistrer of Co-operative Societies for the State of'sikkinr and may appoint other per:snr to assist hinr,

(z) T'he Governnrellt nray, by general c,r special ordcr, confer on eny person ap1:oirrted to assist the Reg.istlar all or any, of the powers of the Regis- , trar under this Act,

(:) Every person appointed to assist the Registrar shall exercisc the powers conferred on irirn under sub-section (z) sublect to thc gcneral gui- clance, superirrrenclence and control of the Registrar,

(,+) T'he Governnrent n1ay, by notification in the Offic;al Gazette rnd.subject to such conditions as it may think fit to impose, confer a]l or any of.the powers of the Registrar under this Act on thc Siate Co-operative Bani< or -an/ federal_ societl, or an officer o[ such ban'k or federal society and cvcry such bank or fede-rai society or officer oir whom the porvcrs of thc Registrai are so couferrecl shall exercise such polvers urrder the general gr.ridance, nrlerir- tetrdence anrl control of the I{cgistrar.

- +. (t) Subject to the provisions hereinafter contained, a society which has as its object the promotion of the ccorlonlic intercsts o[ its lnenibers.in ac-cordance with co-operative principles, or a society esrablished rvith the object o[ fac_ilitating the operations of such a socr'ety and the State Co-operative Bink malr bg regisiered undcr this act,

Provided tirat tl.re Registrar shail not register any socicty u,ith uniirnited liabi- litv,

;- -t (") No sociery, other than a fecleral society, sirall be registerecl rinder this Act unless it consists of at least terl persons not belonging to t[e same family who are qualifred ro be r*r:ml;ers u*dei this Act a,d wh"o iesicle in the area of operaticll of thc society.

Explanation - For the purposes of this Act 'Faruily' nreaur

wife, sons and unmarrierl daughters.

-

(b) The word "linrited" shirli be 1he last rvord in cvery rociery with limited lialrllitl registered under thi! Acr. the husbancl,

tlic name of

6

?ower of thc Registror to decide ceftain qLtes- tions

Regist,ation

Registration Certifcotc Registered Socict.ies^to be bodies corpotate Anendment oJ lyc-lav's of o Societl

Segi.rtrar's powat to direct omendnent of bye-laws

trlhen antendntcnts of b1e-law s come into.lbrcc Change of nan'te

"(3)^i. 6, (, ) For the plrtposes of registratiorr, an appiic,rtion shall be nredc to thc Registrar.

(z) 'l'he application shall be signed - (a; in tbr: c.rse ol a society ol which no rnember is a societyr by at ier,st ten persons qu,rlified in accordance with the requirernents of section 5; ancl (b) irr the case of a society of rvhich a nrentber is a co-operative society, by a duly authorised person on behall of such socicty and where all the rnembers of the society are not societies, by ten other lnernbcrs or when there ale less than ten other members qr.ralilled to <1c., so un

7. Where any c1:estion arises whether, lbr the purposc c,f this Act, a 'persorr resides in the area ofoperation ofa society or not, or whether a societT is of the sarne type as another society or of dift'erent type, the qr,restion shail be decicleci by the Registrar whose decision shall be final,

8. (,) Il the Registrar is satisfied - (a) t)rat the application conrplies u,ith the provisions of this Act and the rules; (b) that the objects of the proposed society ;tre in accordance rvith section.4l (c) that the proposed bye-larvs are not contrary' to the provisions of this Act arrd the rules; and (d) that the proposed society has reasonable chances olt stlccess, and that the registration thereof may not have arry adverse effect on the development of co-operative movement, tha Registrar may register the society and its bye-laws, ' (t) When the Registrar refuses to register a societlr he shall co"

rnmunicate 'r,r,ithirr^a period of six nronths fronr the date of receipt of application the order of refrrsal, together with the reasons therefor, to the appiicant^rrs maI

be prescribed.

9, Where a society is registered, the Ilegistrar shall isstre a cerrificate

of registratiorr sigrred by l.rim, which shail be conclusive evirlence that the societ"y thereln mcntionid^is duly registcred under ti'ris Act.

ro. The registration ofa society shall render it a body corpornte by thc

nanre under rvhich it is registerecl, having perpetnal succession and a comnron

sea}, and with power to acquire, hold and dispose of property, enter into con-

tracts, institute^and defeird".ri*:,]q other legal proceedings and to^rlo all thingr

necessary for the purpose tor which it is constitutecl.

(,) No amendment of auv bye-larvs of a society shall be valied un-

Iess it is registered uncler this Act,

(z) Every proposal for such amendment shall be forwardt:cl to thc Registrar^and if the Rcgistrar is satisfied that the amendment^-

G) is rlot contrary to the provisions of this Act^and the rr-rlea;

(b) rloes not conf.lict rvith Co-operative princliples; and (") n ili promote the economic interests of the members of thc sot:iety,

he may register the amendment,

- (S) The Registrar-shall forward to the society a copy of the regis- tered amendmerrt together with a certificate signed by hirn and such certifiiatc shall be conclusive evidence that the amendment has Lreen duly registered, (+) Where the Registrar refuses to register an amendmenr ofl the bye-larvs of a society, he shall comrnunicate the order of refusal together rt'ith the reasons therefor, to the soeciety in the manner prescri.bed, ,2. Notwithstanding anything contained in section r r, if in the opinion of thc Registrar, an amendnrent of the bye-laws of a sociery is necessary or desirable in the interest of such society or of the co-operative mouement, hc may, in such manner ar rnay be prescribecl, call upon the society to make any amendment within sr.rch time^as he may specify. If the sociery fails to makt sur:h an amenclment witirin

-the

time so specifiecl the Registrar may, after giving

the society^an opportunity o[ making its representarion, register such amendmeni and forrvard to the society by registered post a copy of the anrendment together wjth a certificate signed by him, such a certificate shali be conch.isive e.t,idence that the amendment has been duly registered; and such an amendntent shall have the same effect as an amendmer-rt of any bye-laws duly rnade by the society. r3.^An amendment of the bye-iaws of a roci.ty shall, unless ii i,

"*pr"rrJ.lto come into o,peration on a particuiar day, come into force on the day on lvhich it lis re:gistered.

t+.

"

(r) Asocietymay,byanarnendmentofitsbyeJaws,insuchmanner as nlay be prescribed, change its name; but such change shall not affect any righr o.obiigatitrlofthesociety"orofanyoiit.m"*L,.rr,iurrmemberso. dJ."u.-.d memberu and any legal proceedings pending may be Continued by or against the society under its new nan1e.

(z) Where a soceiety changes its narne, the Regis*ar shall enter the new name on the register of societies in place of the former name and shall amend the certificate of registration accordingly.

7

and ditision of rccietie.t

?cwct to dircct antalgrr,

aation and teorganisa-

tioa

toll

tIe

(4)

.$

ri. (r) No society rvith linrited liability shall change jrsell:inro a Society witli unlimired liability,

(r) Subject to the provision ol'sub-secrion (r ), a society rnay change the fomr and extent of its liab)liiy by an amerrclment of it, by"-lan* iir the nranner Jrrescribed.

(l) When a society has anrended its bye-larvs r-urder sub-section (r), it shall give notice thereof in writing to all its nreurbers ancl creditors and rrotwithstanding any bye-lalv or contract to tire contrary any member or creditor' shall, r,t'ithin a period of jo days from the date of service of the notice npon him, have the option to withdrarv his shares or deposits or recall the loans, as t]ie case rrray be,

(+) Any member or creditor who dor:s not exercise his option x'itl"rin theperiod specified in sub-section (z) shall be deerrred to have assented to the change.

(f ) An amentlment of the bye-larvs of a socicty cirauging thb fornr r:r extend ol its liability shall not be registered or take eff'ect untii either -

(n) the asient thcreto of aii members ancl creditors has been ob- tained or is cleemed to have been obtained; or

(b) all clain'rs of nrembers ar.rd creditors who exercise the option let'erred to iir sub-section (z) within the period specified therein have been met irr full.

16. (r) A society may, rvith the previous approval of the Registrar and by.1 l'esoiution passed by at least a two thirds majority ol the nrenibers pre- sent ancl voting at^a general rneeting of the socicty^-

(u) transfer its assets and liabilities in rvhole or in palt ro any other societ/ i

(b) clivide itsclf into two or nrore societies.

(z) Auy two or more societies rnay, rvith the previous approval o{ the Registral and by.a resolution passed by at least a two-thirds nrajoiity of the members present and voting at^a general meeting of cach society, amalgamate drerlselves and form^a new society,

(:) The resolution of a society uuder sub-secrion (r ) or sr-rb-secr-

(z) shall contain all patticulars or the transfler, division or anralgamation, as case rrray he.

"^@'i _ When a society l.ras passed arry such r.esolurion, it shall give notice thereof in writirig to all its members and creditors and, notwithstanding auy bye-lau,s 01'contract to the contrary, irny mer.nber or crcditor.shall, rvithi-i

a period oIthirty days from the date of service of the trotice upon him, exerbise

the optiorr to withdraw his sharess or

be.

(S) Any member or creditor rvho d.oes not exercise h.is option within t]'re period specified ir-r sub-secti<;n (a) shail be dceurerl to have orsinted to the proposals coritaineci in the resolution,

(5) A resolrtion passecl b1"a society utrrlcr this section shall not' take eflect until -

(u) the assent thereto of'aii the members ancl creclitors iras lreen obtained or iri dcemecl to have l',een obtained; or

(b) all clain'rs of tl.re members and creditors who irave excrcised the option referred to in sub-section (4) witi.rin the period specifred therein have becu met in [u]1,

0) Where a resolution passed by a society r.u.rdcr this section involves the transfer ol any assets and liabilities, the resolution shall, not with- standing anything contained in any law for the time being in fbrce, be a sufficient ::rL:l:::"

to vest the assets and liabilities in the transferee withour any further t7 .^{( t} ) Nofrvitl:st.:uding anything contained in this Act, il tire ILegistrar is of the o1:iniciu tlrat .-

(u) for the purpose of cnsuring econornic viability of any society qrr societies I or

(b) for avoiding overiapping or couflicr of jurisdictions of socieries in any area; or

(l) iu order^to, secure proper mariagel'nenr of auy society; or

(d) in the public interest; or' (") in the interest of the co-operative nloyenlent in the Srate as a *'hole; or

({), in the intcrest of

Gl in tlte interest of the co-operativc creclit stn"rcture in the State as a rvhole, it is necessary to alnalgamate two or nrore societies or to rcorganisc t

8

any society, he may by or

q,ith limited lia-

I "i a b i I it1, oJ' r esu I to n t

societ)l to be limitcd

Cancello t.ion of' r eg i stt^{tt -}

tian certficotas oJ socic-

ties in cettairl cases

bility or to reorganise *the society.

(r) Such order may also provide for -

(o) recluction of the interests or the rights n,hidr the members, cleposiLors, creditors, enlployees and other persons nray have in ol against an,v sociel:y so to be amalgamated or reorganised, to sr,rch extent as the Registrar may consider irecessary in the interest of strch persons or for the maintenance of the business of that sociery having due regarrl to tire propor:tion of tire asscts of such societl, to its liabilities.

(lr) such incidental, corsequential and supplemerltai provisions as n.ray in the opinion oi'the Il.egistrar be necessary to give effect tt, the amalgarna- tion oI the societies.

(:) No order shall bc tnade under sub-sect.icrn (r) unless^-

(o)^a copy ol'the proposed order has been sent in draft t<, each o[' lhc socir'.iies corrcernt:t1 ; ar;t1

(lr) the Registrar has consi

(+) Notwithstanding anytliing containecl in this Act or ir.r any other Iarv, ol irr anv contract, au'arcl or other instlurnent for the time being in forc:e, on the lssue of;,n order under sul:-section (r), the plovisions thereof shall b.:

binding on all societies and their members, past men'rbers, clepositors, creditors, enrpio;,1es ancl all other persons having dealings rvith the concerned societies.

(S) On ancl fronr the

(6) Notwithstandinganything contained in^: ny law lbr rhe rime being in lorce relating to transfer of properties or registration of dor,urnents, an orcler issued under this section shall be s;ufficient con\/eyance to trnlrsfcr rl"re assets and ]iabilitics of thc society or societies coverecl lr1, anv ,:r'der passed rrnclel suL-,-section (r ) ol' this section.

h)^Any orcler rnade bv the Ilegistrar r,rnder this section sirall be final an,l ;orclusive, ar-rd shall not tre ca]lccl in question in any Court. r 8. W]rere the whole of the assets ancl liabilities of a sc,ciety irrc rr'rns- lcrrcd to another socicty in acccrrdarrce with the provisiorrs of section r G or whereasooiet)/isdirecte

"n.. may be , shall be limitecl.

)

t9. (,) Where the rvhoie of the assets and liabilities of a socieiy are transferred to arrother society in accordnnce with the provisions ol section r6 oi section r7, thc rcgistration of ti-re society rvhose assets and liabilities ale ,o trar.,,fi:rr,,<1, shr,ll stand car-rcelled and the said socicty shail be clcemecl io hare been clissolved ancl shall cease to exist^as a corporate body.

(z) Where two or Inore societies are amalganrated into a nely society in, accordance with the provisions ofsection r6or iection r7, the regis- tration of

":ar:l.r of the amalgamating socjeties shall stand cancelled on the regls- tration of the rre..r' societ/, and each socit:ty shall be dee:mecl io have been dis- solved and shall cease to exist^as a corporate body,

(:) Where a society divides irself into t\vo or more societies in accoldance u,'ith thc provisions of section r6, thc r'egistration of that society sholl stand cancelled on the legistration of the new societies and tl-rat society shall be iieemed to have been dissolved and shall cease to exist as a corporate L,o <1y.

(+) 'lhe anralgamation, diyision or reorganisarion of societies shali not in any manner whatsoever afl'ect any right or obligation of the amalgamated, divided or reorganisecl society or societies or render delective any legai procee- dings-by or against such society or societies and any legai procecding rirat might have be,:r-r conrmenced or continued by or against such society or iocieties, as the case

1n_ay

be, before the anralganration, division or reorganisatior.r, may be continuecl by or against the resulting or the reorganised so"iety or societies.

(l) Where a society has not cor.nmenced business witl.rin six nlonths of its registration or such furtl'rer tirne as may be gr.antecl by the Registrar afte.r its registration or has ceased to function or ifthe Registrar is satisfied, alter nraking "t

9

91[^r87t

DisquoLficotion Ior mcmbcrship

( u*)

'tr':11

j1q1f i1';' r:, he tlrirrk, t;t,tln.,t rhc socir'lv rr, i,,nqcr.h.rs ge.LLi.elv,rs irs,',L- jccts.rrt: r:r irtr,t'c ol tltc ol.:jects spccilied ,r sccriorl--+

",.,,1 tll,"t its registr.atiorr or:glrt irr tlre. i,ter.csts oi'rhcrg.r,,.,ial 1,,b1i., tr, i:. ..,,,.*,,,,i,-ir",fr"ii;;;;;;ot'det't:ancclling the registr'.itiJn rrt'the sr.:ciet;,, Tire soc.iety shajl f'rt-r1r the date ,,1'su,th o,:d"r nf cancellatio. lrc decn.,.:d to ir., dirr,,lue,l .,,,i ,1",^ll cease to exist

as a col.porate body.

Chaprer Ill

Men'lbers of societies a,d trreir riglrts a'cr riabirities

thc fbllowing, rrarneiy ;

(") an intiividual competent to contl'act unrle r sectiep r r of the

thr: lrrclian Cot-rtr.act Act, r g7z ;

(Lr) any odrer socicty;

(.) the Coverumenr;

(,1 )

^

a firnr, a cornp:rny or. any ,rtitcr bocly cor.l)oritte c,.lusritutcrl rLrrdci a.u1' larv.lor Lhc tirn<' lLeing'in [,,rct ,rr " ,oci"'ty ,..[irt"r"d under auvlara' i^ fbrce relarilrg t. i.{cgisrratiin of societies u. o 1.,.,',1. n.o,l.fi*4 i;;h;;;1 .subjcct to such ter.nrs ancl Conditious As nra), be laij clou,n by tire Gover.nment

by gentr;al or speciaI orde r in this bc]ralf'.

(z) Any per:son who is dt.rly qualified lor adnrission as a nrenri.,er trnclcrr thc pr-ovisiorrs r-,f'tlris ,\ct anrl the liye-lanus.ola prilrary agrictrltrrral crcciit socjety, rnakcs an applic;rtion for rnenrbciship of sucli ,,,,ciciy,"slrail bc 4eemed t<> have beer-r admitted as a rnenrber or'such socict,v fi.,,,,-, ti.,o clate ol. ,,,.;i;;of the_ ap;;lica,tion in the ol{ice ol the society l)rovided that the,llegis.trar rnay, either on i-ris <.rwn nlotion at any time or on

.rn applicitior,_by rhe!rirrrary agriculcurar cre

nradc within ,ilteen day-s flol,r ihc date of such a,lrnissio,., ,nJ n{,t". givi.g i.c;r-

sona]rle opPortr.rnity,to.thc society an<1 the nrerrrber c.ncerrrcti, by;.dt r-;:.1;"

such person.as not eligible cither to become or to continle

^, " me,.,rb"r of such socicty lrot' ti:e reasnni nreutiont:cl tirerein, Whcre t:he nrcler is to be pnrr"J on- an application of the.,society or."a,nreinb-,:r cl'rerc.<,f rt ,hrI be p.,sscd ,"ir[i, ,tri,*y

rla1,s 6,",r,',', tht: iiate of recr:ipt ,['the applic;rti., hi, the ]legi.sti.ar.

(r)

. Any- r,r1r6p nr;r c {inal an,l sh:rll nirt bc.ollerl in cluestion in any Cotrr.t. (+) ,An application lbl urenrbcrship.in a sociel;,, orhJr trran a 1;ri.rnary.ag^ricLrlturai,credit society s.haI be dispose,t .ot' by the'society withi, tnr:trtonth frotrt tirc clatc of receipi rhc.er,f, nni the .lecisi,n .rf ih. So.i.ty on rlre aPplication shalI be conrmunii"rted to tht: appiicant within filteen clays /!onr t6e rlate o.l rlrr: clecision:

I)rovit.lerI thar if the dccision r-rf tl,rc socie.ty is uot conrmunicatecl to the applicant

'r irhj, a pcr ir,d of lo^rry.frve i.{: ,fr"T trre drte.of rhc r.ceipt of ,i.." "pf ri.,.,in,, , l)y the Society, t)re Socie ty shirll bc rlccmcd ro ]r,rve c)ccici,:,'1, 61 t6c clarc of c>r-

piry oI sr"rch period, r.efirsirig ar]nrission t<-r tire applicant,

2I , (l) No 1:crson shali bc ,:iigiblt: iol aclmission .rs a prt:r.nl>cr of a strcir:t;, if hc -

(.) has appiied t, i:t: adjuclicated an insolvent or is an u1

(t,l has been sentcnccd lol any offence, otl'rcr thap a5 oFflerrce of a p()liticai cltaracl:er or an olti'er-rcc not involving nrorol tu.piru,i.., ,u,,f, sente.cc

rrot having.l,t'err r.,ersed or rhc ofte.c" p".cl#ed

",,,.1 ,, p:;;;.j-rr n"" y"*., i,".not elapsccl lrortr the datc of expir,v of the sentence,

(r) II a nrenrber: bcr:ornes,subjcc-t roxn), of' trr,: rli:;quaii[ir:ations spcr:ilierl in sr"tb-section (r), he shall l>e cle.,,',1ed to lrni,e ccaserl (:o be a.rember l'rom'the: dat,: rvhen the disquaiification rvas inc:urrecl .

(: ) sLrbject to thc ge.e.ai. or speciar c,r.trers oI trre Iregistrar Published. in the official cazt:cte,io individLrai rvho is a rncmber o[ a crer]it societ), sh;rll ,:re eligible lor adnrission as a rnernber of another creclit society. Every mtrmber of a socliety sirall ]rave one vote in the affairs oi at," ,o.i.7y; proviclcd that^-

(l) a nor.ninal nrenrber shaii not have tlte right to votc;

. (1,) a mcmbc' of a primary "ag'icLriturar c?e,rir so.ieiy srra, have no right to vote in a ge'er-al lucering if hl ls"in

(c) where trre covernlnent is the nrcn-rber o.r the society, cacrr Pelsoll nomillated by the Govcrnnlcnt on the Conlnittee ofl the society ,h'oil hn"., orlc vote cxcePt whcn the right to vole is to bc exercisecl for electioir of of6ce bexrcrrs of ther ,society.

l/otes of nembers

10

fu{etnl:et ili)a l{) c(crl,il(' rights till drre .rrrwntent natl^e

Rcstrictirrrts on lwltlinq o.[ ,thares

Rcstriction on t.randcr ol thotcs of intetcst.

7'ron'rfcr oJ )ntercst^ot't dcoth o.f' o ntcnl;cr I.ial:;lity^6f' post meml,crs ond estote of dcceased nnmLter

$

L), (, ) Flvery inenrber. of I socit:ty slrall exer.cise his vote in.ircrsotr^at a nrecting oi tl',e ,ociety and no menlber shall be pertnitterl to vo[e. bv proxl'. "(z) Not$'iihstanding anythirrg c.,tai^etl iu r^tt6-scctitr, (r ), a srt.ictr,r)r- corDor.lti(),., uifir,',, *'li.h is n r,rJ',rl,". of anrtlrcr soeiety ma;', strbject

t,,

^,,y

rule, ,rn,l" ,,,,d". this Act, appgint one of^its mcnlbels 01'piirtncrs,^{as thc}

cns" ,'',ny be, to vote on jts l>ehalf in the affairs of that societY'

1+.^(, ) A socictl, may adurit any individtra'L oI other Pcrsorl or lirnt as^a

rronrinal ,ti.,,,',1r.l. in acccridance with its l>ye-larvs'

(u ) A nominal nrenrber shall not be entitiecl tc.r.ltt.tv sitare, in,anv

forn.r ruh"tlu'"ver, in the assets or profits of the society or to beconle arr officer

oI^the society.

(l)^A irominal nrember shall have such priYileges rnd rigl-rts of^a

rnertrbc:'",r,i'tr. sLrbjcct to sttch liabilities of a metnL,ttr, as trr'r1'be specified in the

by,,:-lar'r's of the society.

,..1^Jio nr,,rrrber oi I sor,itjl. "haii i.r:elc i:r,: th.: r'ight.s t)[ .r tl ,..,il,bel trnless

lte ha.s nlarle sr.rch paynrcnts to the societ/v irr respect oi nreml-:e,rsh'ip r:r'iras i'rc-

qr.rirtrl :uCl, ini.,:r.st irr the society, as 1llny be specified irr t'h'r tric-lart's'

2(t.^ln anl'socit:ty, no tlreurber othcr.thal) thc Covcrtlrlrt:nt or ru1'otht]t'

,u.i"g, shall hr1l.t ,,. Iil.re clrim to n*rorc thiltr.sr.rch.porti

..',pitai of tlre sot:ietl' r'r'hich cxc:t:e<1 onc-filth thcrcol or^11s 5,ooo/' tvl:it'iit:t't:r

is Ies;i.

Provirieci that the (ioverntuettt nrav, by notiflcatjon 1n tli': OHicial Cazetl:e,

speciIy irr rerpecr oi arry class ol societjes'a higher nraximLttn thatr onc-6It]r oI the

.i-'r,r"'.n1rit"l^<,r ^

higitci a)t-Iotlnt than Rs.5,ooo/- as the case ntaY be'

27.^(, ) 'fhe transfer r.rf a sl-rare or interest ol'a nreurhcr in the capit;li of

a socicrr, ri-,.11 lr(,, suirjer:t to the restrictions specifi,:d in section r6.

(l)Notrans{ret'h1'anrclll;r'rof'l-'issha;'<'ol'illtertlstilt't'oi:ir''t,v

.,lrali be valicl unlt:ss^-

(n)^the urtlnl>rrr hrs lrelrl such sl,are or intercst fbr rrot lcss than t>t'tt:

Yexl' ; ;

(ir) thc: tr.ansfer is rnadc to ti.re societ' or.to .1 me.rber of t[e socic.t.y I

;Llttl

(c) the transfer is approve

28. (,)^On i'he er to the person or Per);()tls troniinatcd in

acc6rc{a;j.cc rvith the rltles or, if no pers

Prov.ide{ t[at strch nomir:rec, hcir^t>r legal .r'epres.'ntati\;c, as tltr: t:osc rrray lre, is aclmitted as the l'llen1ber of the society;

proviclerl iirrthcr that nothirrg in this sub-section shaiIPrevcnt a mlrrot' {)r a pcrrion of unsoundTninrl from acquiring hrv inheritarrce the share or inte'rest ,rit a cleceated trrenrber irl a s<-rciety.

(z) i'lotwithstanding anvthing contained ln sr'tb-sectiorr (r )^anv :ir.rgh noniinr:e, lttit', or a iegal i'ept'eserntative' as thc crse n1a)/ be recluire th(:

so(:i(.t\. 16 lrir.), to irim thc value of the sltare or intercst,rl the rleccascd tncnrb.rr ascc-.t;.inc(i in a<:c,rrtlarrcc'witlr the I{trles.

(l)^The society rray Pay all othcr n1or1cys. tlue to the deceased ..\ernber f-,.,1 tlr., society iu srch not-nint:e, heir or legal represerltative, ari the cast: nra v be^,

(+) Al1 transfers and paymentl made by- a societY itr accordance u,itir the pi,ruisions of this section shail be valicl ancl effectual against any demand rrradr, ,.rpon the society by any other person.

29, (r) Subjecr to the provi.sions of sub-section (2), the jiabilitv_of a pest nternber or of thc estatc of the cleceased meml:er"of a society lbr the debts irl,the scciety as they existed sl.rall continue lbr^a period ol two years^- Gi in ihe case ol a past member, from tire date on which he ccased to be i member;^ancl

(b) irr the case of a deceased metnber from the date of his death.

(z) Where a society is ordered,to be lvound up under section 75, the liabiiity o1'a past member or of the estate of a deccased member who ceasecl to be a melnber or died within two )rears immediateiy preceding the date of the order of rvinding up, shall continue until the entire liquidation prriceedings^are completed but iuch liability shali extend only to dre debts of a society as they exisied on the date of l.ris ceasing to be^a mptnber or death, as the case mayeb,

11

,1{ o na gc ne nt of Socⁱ ety ,4nnual qatero I ntcct in ct t^t*)

Chaptir IV

Matragement' of, So<;ir;ties ]o. (,) The linal authority of erery sr.icir:t,v shall vcst in the general body of'uremLers in general meeting:

Provided that in such circunrstances as may l.,e prescribed the finai authority nlay vest in the deiegates of such nternbers elecred in the prescribed nlanrler and assembled in general meeting,

(z) The genera) meeting shall be sunrnronecl and shall exercisc its authr>rity in sr.rch mallner as may be prescribed. I^r . (, ) 'i'he managen'ient of cvery society shall vest in a contnrittee (:on*(titLlted in accordancc with tl-re bye-larvs.

(l) No person shall be eligible to be elected as a member of a conrmittec urrless he is a rnernber of the society. (:) No rncmber of a society shail be eligible tbr being electecl. as a nrcnrber ol the cornmittee of that society or of any oiher society tb which such society ls affiliatecl, if such member^-

(") has been adjudged by a c6rlpstent collrr ro be insoivenr or of r-rrrsound mincl ;

(lr) is concerncd or participates in the profits of any (ontract rvith thc society;

(c) lt;rs b,:ctr punislrrd rt,ith inritrisonnrent for an ol{:cnce: involving rrioral tur'llitucic;

(d) I.ras1lr:cn in d<:tault-in paynrenr olhis dr,re,; to r'llt: societT lbr a contirtrons periocl o| three rnonths froll the clue dater or arly cxtended period tfrercof.

(") carries the business of the samc kind carried on by the society. t+.1 A mcmber of the comrnittee of a society shall lease to be a rnr:nrbel r-,f such contnrittee if he becomes sr-rbject to any of the disquaiifications rnenti<>necl irr sub-section (3) and the vacancl, so u.iring irr the cornmittee shall be {illed in accordance witl"r the bvc-laws.

32, (,) The general tneeting of ev,:ty sueicty slrall be held rvithin a period ri[ six lnonths after the date fixed lo;' nratling-up its accounts lbr the co-operatil,e ),ear under the rulcs lor the time l-:eirrg in Ibrce, for the pur.pose of -

(n) approving the pr:ogranrrae of tire activities of rhe society 1rr.c- part:d by the conrmittee for tire ensuing co-operative year;

(b) clecting the metnbers of the committee other than mernber.s nornir:ated urrcler section 38;

(") considering thc audit report and tfie annual l.eporr '

(d) clisposing of the net profits; and (.) considering-any oshs. matter wlrich niay be brought forr.r.ard in accoldance w'ith the byc-lau,s:

Provicled that the ilegistrar may, by generai or sl.rccial ordcr, exrcnrl^' thc period flor- holding snch nreering lor a hrrr:Jrer pcriod not exceeding threc rnonths :

Provided t'urtlter that, if in ths opiniorr of the l{egistrar no sucl'r extcn- sion is necgssar)/ or such mecting is not calied by the societl: within the extended period,.if any, granted by hitn, the Rt:gistlar or any persop ar"rt[orised by him r1a)/ call such ineeting and exercise all polygy" and fulctions of an oftlcer 6f the societ/ author:ised to conveuc such tneeting and that meeting shail be cleemed to lte a general me<:ting duly called by the society, The Regisrrar may oydsy 1h.g tlre experrditure incurrecl in callirrg.luch a nrei:ting shall be paid our of the funds of rhc society cr l;y such person-or persons who, in thg opinion ol the Registrar, werc r(rsponsibie for the reflusrl or I'ailure to (ronvc.c the gene.ai meeting.

(z) At every annual gcneral rneeting ol a societl, the conrmitteg shall lay belore the society a statelnent showinp the details o[the ]oaus, ilany, given tir any of thg *"*.b"., of tire coprnrittee"(1ring tlre prececiing lear,

33. (r) _ -Thecomr:rirteeofasocietyrnay, aranl,tinre, callaspecialgene- ral nrecting oi the society arrd also shali call such rneeting rvitjrin one rnonth after the receipt oi'ar requisition in writing from the llegistrar. or from such num- bcr^o_f rne rnbers or. a proportion of the total nunrber of nrembers, as rlay be pro- vided in the bve-larvs.

(z) Ifa special gcneral meeting ofa societ/ is 1ot called in accordalce with the re_quisition referred to in sub-secrion (r), the Regirtrar or any person authorised by him in this behalf shali cail such meeting and exercise ali powgrt and functions of an officer-of the society y!" i, authori"secl to convene ruih rp.- c.ial general rneeting ahd that nreeting skallle cleenred to be a rleeting calle

12

'fern ol ofiice of a Comntittec

Di sguollJictttion.r to Ac an o{fiier 2f a sociew ncptcscntation oJ ncaker section on thc cotnmittcc N b mi nat i on oJ' to cmb er t to the conmittee

(e )

calling such a meeting shall be paid out of the funds of thr sociery or by any such.perso-n^o.r persons *[o, iri^ghs opinion of the Registror, ',r.",."'rcsp<.,s15161'. for the -efusal or failure. to corlvene the special g".,...I nr."iinn. j+, (,) The superintcndencc, direction"and control of"the preparatiorr of ths qlg6loral rolls for, ind the conduct of, electibns of the merirbe.rs of the conurittees of such societies or class of societics as may be notified by the state governn-rcnt in the official gazette shall be vested in su<;h returning tj16sgl.5 nos l>elorv the rank ol gazt:ttecl ollicers as nray be appoi111..d by the Cov.:rnnrept. ip this tr,:half.

(2) 'fhe vote at such elecrions shail be bv secrct brllrrt. 3 j. , 'Ihe ter"nr of olfice ol the elected mentbers ol'the conrntittee sha]i be such, not exceeding three (lo-operative yeai"s inch,rding the co-operative year of their election, as may_be specified in the bye-larvs of ihe societyl Provided thar the elccred n,embcrs shall continue ro hdld oftice tiil their successol's are electeri or nornirrated undcl the provisions of the Act or tlr,.r rult,,, ,)r b)'r,-lalvs.

r6, Notwithstanding anything conrrirred in this Ao, a person slrall be tlistlr"ialiiic r election as, ^o1 [o1 bCing, the president, vice-presiilent, chairnran, vicc-chairmirtr, Secretary, Joint Secrctary or treasul-e r. of a conrnrittee, ,

(a) ilhc has hcld any such olfice on rhat commirree during rhe pre- r:eding t\^,o conr-ec:utive ternls, whether full or ptrt;

(b) if he holds any such oflice on i cornnrittce oi'anorher so(:ie(1, of the sante type i

(c) if he holds anlr s,,"1, office on the cornnritrces ol threc o1. 1110yg societies^olr different types inclu '

Provicletl that nothing containctl in this sub-scction shiril be rleenre

l:.xplonat.ion r t Where alty pet'soll hoiding arry ofllsg as albresaid irt thr: conrrnen- nrent o[ this Ar:t is again clected to any such of6ce after suclr conrmencenrent, he shall, for the purpose of this sub-section,

bc deemecl to have held that offici for one term beforc such

election.

l)xltlanatioi t: A person who has ceased to holi u,r) sr.rch office as aforesairi continuousl)i for onc full term shall again be qualified Ibr election to any of those offict:s.

;.7, On the_ comirritlce^o1' a primary agricultural crgrlit societ/^or. orher societies as n'ra,y be prescrilled, not less tha-n ons-third of total seats shnll bc reservccJ for economically weaker sections of the men-rbers \vho, as land olvnerfl or tenants or as both, do'not hold more than the prescriberJ arca of agricultural land or rvho fulfil the prescribed condiglerr, and ii no such persons ai elccted, the conrrnittee shall co-opt the required number o[members from apong51.1[i persorrs entitled to such represcntation,

j8.. (r) Norwithstanding anything contained in this Act, but subject to the provisions o[ section 36, where the Governnr€nt has subscribeti to'the share'capital of 3 5ociet/ or has asl"isted directly or indirectly, in thc fornratiou or augmcntation ol the sliare clpital of a

-society,

or has guaranted the repaymellg

of principal and payment of irrterest o1 loans and advapies 1o n society, ,ir" g"- vernment or any o.rher person authoriscd by it.in rhis behalI shal] have the rilht to nornir:ate members on the conlmittee in dre manner prescribed below fi2.

(i) rvh-ere the Government shareholding is not iess rhan ons shlld and nor nrore than two-1fu.4. of ihe equiw the nunrber of governrrient nominees shall nor exceed o tiri.d of the total numtrer of members oI the committee or tirree, whichever is less.

(ii) where the Governtnent holds more than two-thirds of the total equity, the numtrer of Governrnent nominees sha]l not exceecl one-half of the totai number of members of the committee or ' five whichever is less, Provided that in the case of societies registcred after the conuience- ment of this Act, ths Qovernment may have the -po*.. to nominate the inifial committee for a period of 3 yearc or such extendedperiod as ma) be decided by the Goi'ernment.

- (z). A person nominated under sub-secrion^1r; shall hold office during the pleasure of the Government, ;,9, . .( r ) . If,. in ths opinion-of the Regisrar, the comnritte" of anI socieg persistently makes defaul,t or is negligent in th'e perfosn^rr". of the dutiesimposg;l S u p e n u r ion oJ committec

13

,4ccs oJ'socict.ic,r /)rrf to i n,/dl id drcd ly, rrrrr,,,, dcJects

Fir.st chctgle of a socieg on ccrt.ain novcahle

asse$ of nlcinl.)cr;[or tltc anount due l:y hint

(ta)

o, it h.)' this tct.or trr. ,u,r,lto. the bye-.rarvs, o1. 6r)11.1111i15 ary a(:r rvhich is prc-juclicial rr) rhe irtcr.rst ,f rhe,society, 6,. irr-r,r.,,,rtr".r, ollt," .],,_u0".r,,,,.. ,.,.,ou"_ n1!nt in tlre starc, or.u.iifirlly disol,evs or. liriJs to,.,,'1,01,"'ir"ij, nny lawful o16rrr. or dircctiorrs issur:d urrder. tili, A.t.o',. ,t * ,.,,1"r, ,ir"'.I1"J,.,,..,. ,. rtre con,rirre. ;; ,,;,;;;;;,;;";:;;; ;,, n[,1.,.,;on.,, if ,Jny,, ,, Jliij iii1 fil;:l.eltrove tire cornrrittcel and-

(rj orclcr fr.esh eleclion o[ [he conrrrrittee, oi.

(it) aPPoint 9l1c or nro|t: adrl1inistrntors ,u'}r,, ,-,"."4 not be n]cnrbers of 1lq 5rr6i.,.r, ,:l

]l]"]Ige

rhe aliijr.s,,,t'rlrc socierv for i, p.,lioo ,.,o, excectling o.c y(:;1r' sp,r':ifit',.i irr. thc or'

;>er.iocl cloes not exc,r.rr:tl thrcc: years.

(z) I he ReqistraI rriay fix .'rny-r'enluncratiorr iirr thc .rrlririrrjstratoi., as h,,, r,ay think ric. srrc]r rerrrurre'-nci,r,.,'rr.,aiI t . 1r"ia ,r,,1' "i'rlr. furrc]s of tlrt:^society.

(l) -l'hc adnrinistr.lror shall, sul;ject t() rhe coprrol ol the llegistraranrl to such ilistrLrctions as he n-ray ti.orri tinre to tin)e irru",

"*"."ire arr or anvo{: ths po1y6l.:q of the corrlr.rrittt:.. oroI an) oiTiccr ot rtr. ,o"i.,y ;;;jt;;.ij'r;:i]actio^s as nray he r.t:quirt:tl iu thc i,tereit of the sL)cierv. --) -'

(+) l'he adrnirristrator or aclrninistratiorr'shall, befor.e shs .*,ri..,r>l'his-.r their tet'nt of ofTice, taiie all stcps to constitute a new con*rittee in accorclarrct: .r,it:h the l:ye-laws <_rf thg 5o6it:ty.

(S) llcfore taking arry action u;(lcr. sutr-secri<_rrr ( r ) ip rcspcct of a 'sr)ciet/, thtr flr1gi511'1p slr;rll <:Jnsrrlt rhc Sratc C()-op(,r.ari\(.tilnI rn ra,]rit.lr it is i rr^r l.'lr tc, I .

+o.^(r )(a)^Il the lt:cords, r'trgister-s, clocunrents o1 th(: r;ook5 of, accounrs r/:15riqie1y;rre lir

,,r',riri,]l.,ll:fj;t';;arid th,e outgoing rueml;ers; of'rhc conr,r.ritue rcfusccl ,.-i;"1,i,i,,;;;. c|arge <:f r|e

l.::".:1,. 1",1,.l)

")l).'tics of the sociery trr tliosr. l::.vi.o,r .,rtitl,,,l-r,r reccivc sr.rch cJIiir'tc th(, l{(,,gisrr.ar or. ln.),other. I:<:r.:;o:r arrtjroriscii [,y hirl i,,r rl,1is Ir"l,;r)l ,nay '11)l)lv t() thc nrag'st'atc, rvithirr rvhost: jrrlistli.tio,,, rl(,,'ro..i.,iu t,,n.tiors,;orsc(:rrrinI th,' recor.

.pi.opr:rty

ol.thc society

(2) ,ll1.:::"]ll:,:lf arr epplic.rti

"",,,.;;';i;f.,"rlu'.,,rn.,r.,itt""^o,..rrlrrrirristiatt)r':: .f tlrc socicL,\' ol rirc riquiri.tor, as tl)e cls,: ,r;rv be. l,c +r . No act (,f ;r socii:rI ,;r'of arr) cirlririr.Lc,: r,,;i.;;,

"ii;;'"J.,.f^{f 5e} ricc'rc,lro bc irrv.rjirl bv rca;on"orrly or tI,,, .,'*irt..,,.,,, ,,i",1y a"r,..', ;]';,;;,i,",,.. lb1oyy",1or: irr tht: constitution of the socier,v or r.)f thc co]llluittee or.in Lhe appoiDtrnent orelcction of 111 rii{j1.1y1. o1. o11 tlls gr,rur_.

"gi."r. ,r"r-,i*ilJ.f,n.a for hisaPPointr)rent. Chapter V

Rights ancl privileges of societies +2.^(, ) Notwitlrstancl.ing arrythirrg e onraitrr:rl irr any o1f1.11. la rv lr.rr :l::,',,]" being in forr:c bur ',,b;.".t ,u ,,,,y.ioi,,, ;i,fu C;r;,;.1.,,,.,.'n, irr resr)ucr ot liincl t'cve.'.rc.r alt) s.t)t r.('c(r!ei.ablc as la,d l.cvcn.c.r.as j;Lrlrlic ,1.;r,i,.,J;any claim, auv dehr or other a]r.ourjt duc ro a s()(jicty it;,r),'.;;;ri;",.i,.,.1u.ling o l)irst or rlcccast:d rlcnrlrcr sh,r.ll bc a first r:hrrgc.rpu,i ttr. crops or.olhsr ;g;;_cultrrral produce' tt::I:l

,i1'r:t:''

for crttle, t*,'i'.,-,ttl,'"i ". ,,..rrj,,'ii' ,rprejrrcrlrs or r,aclri'er')', iau' .1i1t(:rirrs rirr nrl.uracturJa.d ony rinirh",r pl." jr.r, ruanurac- tureci froi, such rarv rnarerials o.a,^ed [y or beloni;t;;:,i;; ;.,l"r.,b"r, lrnrtrneml;er or for,ring part of the estate of th'c rieceasecl irr.,i.,lr.,. orl*," .ur. may be,

". (r) Srrch charge s,all be avaiiablrr cve. .s ngoi,rrt o,rr'n,,ror-,n, ,"-coverable b1, the covc,rnrelr as if ir rvere an o.r..,arl orl,iJ ;;;;,i. subseqLrenr llJ]:::"1:

,].:g

:1,1.r"

d.ebt or thc liabilirv for rhc u0,". n,,.,o,,,,, .rr.,.'r. *,. sc,ciety reterl.eci to ilt .sub-section (r ).

-,

(.1 ) No pcrson shall tra,sfcr alry l)roprlr.ty rvhicrr is subiect to such cnarge except \vlth the previous peflnission in rvriiing of the societl, rvhiclr l^"11,.:lll:ilt-.:lid l,y i..n'[.,., *itliour suctr^p., ",t..i."',1,.1i, l,*.",*,,r,,*,"a_ing anything contained in any larv for the rinie lreing in forss,.!g,oi6.

14

of' societies

Noting^oJ charge or

nlottga7e created in the

Record o[ R;51hts

Reaistration ta constitute notice

( trt )

$

(+) The chargc nnder this se*ion shall not be available againsr thc ftrll

(.) thc rrecessary wearing ai)])arL:I, co()kir)g icsScls, betls and bed- ding ar:d such personal ornantents of a wornan as in accordance 1,it[ religious Usage cannot be partcd rn'ith by h,:r ;

0r) plougl.ts, inrplerrrents of husbandrl,, (tne pair,['p]oughing cattle, sr-rch nranure ancl seed grairrs stocked by hinr, a.s'llray be rrec,cssaly lor the due cr.rltivation of l-',ir lanris in ti-re cnsuing year.

+3.^(r ) Notwithstandiug an1,1hiug contained in th-is Acr ol ir.r any other larv for the tinre being in ft>rce,.but suLrject t6 any .is a tenant, rnaking an application lbr financial assistance fron"r the society shall make a deciaration i,. 1i1g form prescribed cl'eating a charge in favoLrr of the society ..;lt such land or interest or su<:li portion thereof'as rrray be specifiecl in tl-re sr.rch maxirnunr as lnay l.,r rlctr:rnrined by tht:

socioty logc.thcr rvith the .intcrcst or-i such anrount ,:l the loans"

(2) SLrcli declaratioll 11111, be varied or cancclled^{at any} tirnc b,v thc nre;nl>er n,ith tlrt: colr:ient of 1l1e 5ociggy in vrho.se lavour it is made.

. (:) Subjecr to the Provisi<;ns of sttb-st:r:tiol (r )^and to the clairtr r.r{:1ny p111'1io11 iu u,}rose lhvor.rr a chargc i'ras been createcl beforc the date of regis- tl'ation of thr: declaratir:r-r ma f ol on), intcrcsc therein s]rall bc scrlcl t)l' otllcrwisc transi'crrecl until the cntire amout of t.h,: Jorn ol rdr', r.rcc takeu 1,.y the nrcnrbcr fronr the soc.iety together H ith intercsi thereolr is pai

l)yor,idt:

socict) nlay on application lrort the ntembet releasc fi'om the chargt: sur:h part of tjre lirnd or interest thcreirr as it nray ciecm proper, having du.r re,ard to the security or the balance of thc nli'rount rerrraining olrtstanding fropl 111; member. ++, A nrortgage exer:L.rted itr favottr of a prinrary agricultural c:redit socicty ()r the Statc Cct-operative Bank shal] }ravc priority over an) clainr ol thc:

(iolernlnent arising fronr a loan grarrted subsequent to the e xectition of thc rnor'1.. gage.

4.5.^(, ) Nlotrvithst rnding anytiring r;oDtl'inec] irr the [n (r ),r)l' 511c1[rin 43 or a v.rriati,:rr or <:ancellation nracle un as thr: casc nray be, provideii tha-t the sr:cietv scnds to tlrc Sub-Registrar within the local linrits of rthose jurisdictiolt thc r.r,hole or any pxrt of the lrroperty cl.rarged or nrortgagecl is situat,:d rvithin thirty da1,s from'thc datc oi'sr-rch

(z) 1'lie Srrb-llegistrar ,t"cceir ing the declaration i1 rer;perct of a chargc or var:iation or a nlortgage refcrred to in sub-section (r) sholl, as imnte- diately^as practicat,le^on receipt thereof, record in a register to be maintetainecl in this behalf, the fact oi'the receipt ofsuch declaration, variation ot: nrortgage fo1 pggi511.11lon.

46, Wlrenever a charge or h mortgage of land or interest tfierein is creater] in favour c,f a society or is clischarged by a society the so6iggy shall give intimation to such lcvenlre ol-ficial as nray be designatecl in this behalfby the Government, of the particulals of tl.re charge or nortgage in its favor,rr or discirargc tl.rcreof. 'fhc rcrenne ofHcial shail rnake a note of the particular-s oI chargc oi. mol.tgage or discharge thcrcof in the Record of Righw.

Provided that the al-rscnce of an entry in the record of riChts on tlie basis of 1.lch declaration or-a-defective entry passcd in the recorciin respect thereof shall not affect the validity of the charge or nrorrgage or discharge thireof. 46A. The Registration in,the records of the Sub-Registlar or the iccording in the recorcl olrights of a cliange or variation'made under section 4.3 shall cons- titr,ite sufficient notice_ of such

-change

or. variation to any person dealing with

the property sllbject thereto.

15

niortoaged to o ,tocietv

Chatge and sct 2fi 9[

shates or intercst of o

mentber

Sltores, intere*,^ctc,

not lidhle to attachment

Reg)ster o-l menl.tr.r.t

Adnissibilitl^o-l co1y, 1l

cntrt!⁽¹⁵ evidencc

lixcntptiot rton conpul-

rcry registration of int-

ttumentt

Exentptio n,fr o rn ccr ta in tuxesrJccs and duder

(12)

i$

+1 . (r) Notrvithstanding anything cnnrriued in rny law for thc rirnc being in [orcc, a rnqmber who fiis availed-hinrself of fipalcial assistarrce lr<.rm a,ro1:ig1y by-creating a.chargQ or lnorrgage on lanrl o1 intcresr rherein, shaU rrot, so long as the financial assistince continues to be ourstandilg, lease, trapsf'er or create any encunll)radnce on such land gr intercst tfiereil-*ithnrt prior per- nrisslon in v,,riting o[ thc societf in rvhose favogl 5uc]h ctrarge or *brtgug" i, created,

(z) Any iease or transfer or encunrbrance createcl in conlraysn- trion of this section shall be void,

. 'hl Nothing corrrained in any larv r.clrrting gs ceiiing on agricul- t,,1'11_[,rlclings shall apply to-thc acquisition oI tand by a s-ociety clur-gecl o."nro.r- gaged to it^as sec:urity by for loan,

48, A societ)' shall have a charge uPon the sharc or contribution or interest in tl-rc capital and on the deposits of a ruenrber or past menrlreL, or deceased llrelllber and uPon any dividend, or profits payablc toi urer,.ber or pasr mernber or the estate of a deceased member,.in respect of any ciebt u. ourrtoniirlg demand owing to the socjcty, and nlav set o[f 1py sunr credited <-rr payal:le co r nrlember,r'. past urember or the estate of

+9, Subjt:ct to the prov'cions of section 48 rhe share or contriburion.^or. intclest of a iletnl>ct'.t9 past nre.rnber or deceased rnerrrber in the capital of a sociery slrall not be liable to attlachnlent or sale under an;, decree or order of any court in respect ol

_any

debt or liabilit), irrcu1.1.ed by such rrrember o,.,cl nny r.-

ceiver apoointecl under any law relating to insolverrcy for. thi: tirle i;e;ng in iorce shall not tre entitled to or have auy claim on such share or conrribution oiintelest. Jo. - Every 5o6iet/- shall keep arrd tuair.rtain a register or list of mernbers or shares o[ the socisly which shall-ire prirna lacie evid-e'ce olt6e li:llo*,ing parti- cr.llars erltere,l therein l-

(u) the date on n,hich any persorl entererl in srrch rcgister or list hecarne a mernber l

(ir) the date orr r'r'hich a,y such persoli cr:ased to be a ,rerrrbe r.. .tl, (,) A copy of any entry in thc books of'a sclciery rvhi<:h ar.e nrain- taincd ir-r the"cldinarl, course of business sh.all , ilr ccltificd ir:r ihc rnarurer as rnay bc prescribcd, be received in arry suit r.rr legal proceedipgs as prirn..r facje evidc'ct of the existence of such entry, and shall be adrnittcrl as-evidence of thc rnat[cr.s, transactions and accounLt thl.ei,l recordecl in every case to the sarne extent, as tl.re original entry.

(:) No offrcer of a s,cicty and r1o orficcr i'whosc oifice ti-re books o.f a societl arc dcpo.sited-after liquidation sl.rrll, in any legal proceedings to which the societ],r;,r.the liquidator is.or a par.ty, b-e c,,,,,1n;;1"U to 1>rodirce any of tire society's lrooks or documctrts the contcnts of u]rich c.rn bc prbued ,,rr,l.r this tection, or to appear as a witncss to prove the nratters , transaciions and accounts. therein recorded, cxcept under order of tht: c<>urt, tribunal or the arbitrator . made for special cause.

52, ^ .

N,-, prov,ision relating,to,r'egistration of docunit:nts c()l1tair1e(l in a1y larn, for the time being in force shail apply to -

(t) -^any instrurnellt relating to shores irr a- society ll()tvvithstaltd,rlg that the assets of tl-re society con5irg in whole or- in part of inrnrovablt: properuy ; o r (z) any debe,ture or bond issut:d by arry such s,ciery.rd ir,rt tr."a- tir.rg, declaringassigning, Iimiting or extinguishing a"y rigirt, title or.inrerest ro

or iu ir.ntuovable property, except in so far as it-entitleithe holder thereof to

the security afforded by a r'egiste red instrument whereby

_the

society has litortgage

conveyed, or otherwise transferred the rvhole oI pirt of its immovable property

or any interesf therein ro trustees upon trust for. the benefit ot' the holders o?

such del>entures or bonds; or

(:) any errdorsement upon br transfler of any debepture or bogrl

issued by a111, .u.1-r society,

JJ. (r) The Governrnent n1ay, by notilicarion in rhe Officiai Gazette,

remit in respect of any class r:I societies -

- (u) the-starnp cluty chargeal>le -u-rrder any-larv rbr the tir,e being in for_ce in respect of any instrunrenr executed-by,or or belralf ol a society or b!

an officer or mernber thereof and relating-to tire business of such society or alty

class of such instruments or in respect of any award 9r order nrade uncier phis

Act, in casesl wherer lit {"I sucir i'ernission t}re society, officer or rnernber as

the case may be, rvould be liable to pay suqh stamp duty;

16

Statc oid to tocietie, Rcgistrot's power^to

determine terms ol' emplol- fient in societies

Fund.s noc to be divided by way oJ profir

Cont.r iltttt i ttn to cha^{r i} ta- ble purpose

[ 't^l

(b) n,',y f"nJp"y"ble undcr any larr,flor th,: tinre bcing in fiir.ce rela- l:irrg to thc registration of documents or court fee, (r)-^The (.frverlrnrent may,^by po1ifi661irr11, cxcrtrpr any class of socictic! fron]

(.) land reucnue;

(b) taxes on agricultural inccms ' (") taxcs on sale or plrrchl5q of good5 ; nni

(d) taxes on professior.rs, t.rades, callings ar,rd employnrcnts, t+. (,) Notwithstanding anytliing contained in an1, lxv, lor the tirnr. being in forct:,^a lircmber of a socictl nlay execute an agreen'rellt in falour of thc sc;<:iety providing that his enrplo;,e1 shall be cor)rpetent to dedr.rct frorn thc salary o:'wages payable to him by the trnrployer, such.rnrount as ma)r bc specified in tlre agr:eenrcnt and to pay the arlrount so dedr,rcted to the society in satisfacrion rrl any de[t or other denrapd or,r,ing by the nrentber to the society.

(z) C)n the execution c,f srrch agreernent, the enrployer shall, if Io r('qliir'(' Iby-tlre socit:t),L,r'a reguisition in u,t'itir:g 1;615o ]oy1g thc lociery does not intinlate that the rvholr: of such dcbt or clenrand has been paid, rnade the de<[uction in ac:cordance ra,ith the agrcement and piy tlte anrorrnt so deciucted to the society u,ithin sei,en days ofsuch deduction. Such paynrent shall be vaiid clisc:harge of t:her <:mploycr gf his Iiability ro pay the anrounr so deducted and paid to thc: socicty.

. (l ) lJ: altcr thc rcceipt of a reqrrisition rrra

jS. Notl.ithstanding anything conraincd in anv liirv lbr the tirne beipg in lo rcc, thc Covelnrtrent may -

(a) sul;scribe to the sharc capital of a societ).

(b) give loans or nrake advances to socir:ties; (.) guara,rtee the repayment of principal and pa1,r16n1 oI' interest on <1eber:rturt:s ol bgncls issuecl by a society.

(d) guararltce the repaymentofshare capital ofa sociery and divl- dends thereon at such ratcs as nray bc specified by the Govcrnment; (.) - guatentec the repayment of principal and pavment of inreresr on loans and arlvances to a society; and (0 give fin,rncial assistance in any olhsr folnr, jncludipg su|sidies,

to any societ),.

56. (,) The Registrar may lronl tinre ro rirne l'ranre rtrlcs govgpning thc tcrnls of t:rnyrioymentand *'orking conriitious ol officers and cimployee! in a society incltrcling the statc Co-operative }Jank or r r:lass of societies andthe soc:iety or th-e class of societies tp which such terrns of employenrent and or rvorking,conditions are applicable shall r:omply with the or

. Provjdcd that u,hile prescribing the rcmunr:ration of the ofiicers and ,rther'.,,rnplo),ees of the Statc Co-operative Bank, the Registrar shall have due regarcl t:o tht: sa'lary structule of the cmplo-yees of thc GovJrnment and the local authorit,es r.rI cornparab]e ]evcl and stiltl-:s in the State,

(z) Where a disprrte rt:gar.rling reiltls of cnrploytnent, rvorking conclitions and disciplinary. action takcu

-b;,

a societ),r ar.isej betwee, a societ!

ar.rcl its ernplo.yecs, tht: Rcgistrar-or an), officcr appointed by him shall decide thl dispute and his

Properties and funds ofsocieties

5.7, . No parr of the fr.rnds of a society shall be divided by way of bonus or diviclend or otherlvise among its members:

Provided tLat after-at least one-fourth of the ner profrt in the year has bccn translcrred ro the reserve funcl, payments from the ,1.-ui'J.. of such p'ofits aiid from any_pro6ts.of past years,-if-any, availab]e may be made to the members by yry of dividend or-bonus ro such qxtentond subject to such condi- ' tions as may be prescribed by the ru)es or bye-}aws,

58. - ^ fi 5ociet/ rnay, *'ith rhe sanction of the Regisrr.ar and after^one-fourth of the net profits of the year has been transfeired to the reserye fund,

17

( r)r)tr'il',utc irn rr)1ourlt not exJledirrg fi*c ircl ccn". r>f thr: r'cnrrining net profics tr.r ally purpose connectcd with the deveiopnrent^01' co-operative .rroveu'rcl]t or charitable purpose as defineil in scctiotr zo o[' tirt: r:haritabie Endon,rnenus 6 of r89o Act, rS9o.

- \

Co,ttribt,tiuu to Co-ope- .59. A society shall, out o[ its net Profits it1 aly year, contribLrte such p0r- tdtiveF,ducation Fund tion of the profrts not exceeding livc pcr cent as rnay bc pre.scrilrcd to the Co- operative Education Fund consrituted Lrnder the rtrles.

Int,e.rtntent^o.f .funds 6;, (, ) A society nray^invest or deposit its liurd^- (") in the post of6ce savings bank;

(b) in any of dre securities specificci in section zo of the Indiirrr : o1f rSSz

Rcstl'ictiotls on loons

Restr i cti o n s on h tt r tov itt g^s

&esttictions on othet

tdnsactiof)s with non'

nrcmbers

fudit

'l-!'tlsts,A,ct, r882 ;

(.) in the shares or debentures or recuritics of an), other sociegy; c.r1' (.1) r.r'ith the financing bank;or

(") rvith itny societ)' or bank carrying on the birsiness of banking^as rrrry be appt'orcci iry the Reqistrar;^ol'

' '(fl in ih" l,ondi issrted by itself; or

(g) in any other nrocle permittcd.lry the lules ol bl'the. Regirtrar. ()r.

Plovided tl.rat with the gener., I or special sarlctiorl oi' the Registrar a societv ntay nrake loan to another socierl. '

f16uided [urther that a society rnay nlak" s,-rch loans as nravrirtr specilied in tfie bye-laws to any of its paid "nlplty.... (z) Notwithstanding anything cont.inc(l iu sttb-section ( r ), r :rocicty r)ray l1lake a ioan to dcpositor on the security of his rleposit,

62, ' li. society shali receive deposits and loans only to such extent and

r"rnder strch conclitions as n-ray 1-:e prescribed or as l-r1ay be specified in the bye-laws. 6r. Save as provided in sections 6r^and 6z the transactions ofa socierl'

rvith any perlon other thau^a urember shall be subject to sttch urohibitions

or rcsttictions, as may be prcscribed.

ChaPter^VI{

Aur'lit, Inquiry, Inspection and Surcirarge

64. (t) The l{egistral shall audit or causc to be audited by a pr:rsc,,r authoriscd by hirrr by general or sl:eciai order in rvriting in this behalf,^L:he accoL6tts c,f every society at least once irr t:ach co-operative year,

(z) The audit under sub-section (r) shall include an c:xanritration of overdue debt, if any, the verificatiotr of the cash balance atrd securities, and a valuation of the urs.ts and liabilities of tl.rt: society

(:) The person auditing thc accounts of a society shall have free access to the books, accoruts, papers, voucircrs, stocl< at-rd other properry of such society and shall be allowcd to verify its cash balance and sccurities. ('+) The clirectror, ,r,r,,rg.i-r, aclministtators and other olfictrrs^' r>f the society shall fulr.rish to the Pcrson auditing the accounts of a society all such inlort'naiitn as to the sociiety's trxllsactiorls anci n'orking as such i)e l'sol'l nia) r'equ irc ,

(l)^The l{egistrar or the person authorised by hinr under sub-section (r)^to arrdit the acrcounts ola society shall hare power where llecessary^-

(o) to sunlmon at^the time o[ his audit any officsr, agent, servatlt or member ol the socictl/, past or presolrt, who ire hrs reason to believe can give valuable inf

(b)^to recluire the productiorr of 11'1y book or dourcunrer-rt relating to the afthirs of, ol any citsh secLlritics belongillq to, thc to6iet/ b1'ar-ry c.'flicer, irgent, servarlt, or titet-uber itr possession-of srtch !ooks, docunteutsr cash or sc curities and in the cvent of serious irregularities discovereci during audit, tc) take them into cu:lt-'.>d/,

(6)^{If at thc} tirne of audit the accounts r:f a society are not colrlplete, the Registrar or the persolr authorised by him nLrder sttb-sectior-r (r ) to auclit may cause the accounts to be written up-at the exPensc of tire society.

0) Audit fee, if any, due frorn any societi, shail be recoverable in the same rrranner as is provided in sectiotr^85.

65. The Rcgistral', or any person ar"rthorisecl by general or speciai order in this behall by hinr, rnay inspect a society. For the purpose of inspection, thc Registrar or the person so authorised by hinr shall at ail tirnes have access to all books, accourlts, papers, vouchers, securities, stock and otler property of the society and nray, in the event ofserious irregLrlarities discovcred dr.tring inspection, take them into custody and shall have porver to verifly the cash balance of the Inspection of socicties

Accoverl oJ- costs ( 1s )

,$

societ), a:Td to call a comnlittee meeting ot'a gelteral urccting as he r-nay decnr lrcc_cssaary in tlre circumstances. - Every officer or a nrember of the society sl.rall furrrisL such infcrun.rl(rn rvir-h regard to the working of the society as the I{egistrar or the person miking such inspection ma/ ."qii.., 6u. (r) The Registrar lnay of iris own nlotiorl <.rr on application of a majority o[ tht' n'rembel's of the corrrrni[tee or of not less than one-third ol the nrenrbers of the society, hold r.n inqrriry or direcc a person authorised by hinr by order in writing in this behall'to holcl an inquiry into the constitutior), working and firran<:ial corrdition of a society,

(2 ) 'l'he Registrar or the person authorised by him under sub-section

(r) shall have tlrc following pou'ers, nanrely :

(") hc shall at all times have, for purpose of examir.ration,^free access to the books, accounts, cash and other properties belonging to or in the custody of the society and rnay sgmmon any person in possession or responsible for the custody ofany such books, accounts, documents, securities, cash or other propelties to 1:roduce thc sanre, at any Place specified b1,him. ;

(h) he may, notwithstanding any rule or bye-laws specifl,ing^the period r.rf notice for^a general lneeting of the society, require the olficers of the societl, to call^a general nlceting at such tinre and place at the headquarters of the sogiq11, to consider such matters,^as may be dilected by him; and where the of;ficers of the -society refuse or lail to call such a nleeting he'shall have power to cail it himselfl

(c) he may sunlnln an), person r.r'ho is reasonably believed by hinr to have any knowlerlge ol the aflairs of'the sociegy^to appear before him at any place at the headquarters of the society or any branch thereof and may exarnine such person on oath.

(:) Any nrecrting called ru.rdcr clause^(b) oi:sub-section (:) shall have all the porvels ol a gerreral rneeting called under the hye-lau.s of thc societv and its proceedings shall^be regulated by such bye-larvs.

(+) The Registr'ar shall cc,nrmunicate a brief summary of the report of the incluiry to the societl, the State Co-operative Bank or a federal societl to rvhich the society ls affiliaterl, and to the person or authority, if any,.at rvhose insrance the inquiry is rnade.

bi. (, ) The Registral shall,^o11 the application ol'a cret.litor of a socier), irrspect or direct sonre persorl authorisecl by him by order in rvriting in this behalf to inspect the books of the society r

Provided that no such inspection shall be made unless the applicant (,.) satisfies the Registrar that the tlebt is a sr.rn'r then due, and that he n,ar clerrranded paynrent thercoi: and has not reccivcd satisfaction within a reasonable tirue; and

(lr) deposits with thc I{egistrar such surn as security for the cost olproposeri inspection as the Registrar may require.

(z) 'l'he ilegistrar shall conununicate the result of any such ins- pectiorl tc, dre creditor.

58. Where an inquiry is held under section 65, or an inspection is nrade under section 67, the Registrar nlay apportion the costs, or such of the costs, as he may think fit, between tlre society, the rnembers or creditors demanding an inquiry or inspection, and the; o{ficers or former officers and the rnembers or past members of tho society^as the case ruay l.>e :

Proyided, however, that^-

(o) no order of the apportionment of the costs, shall be made uncier tiris section uniess the society or the person liable to pay the costs thereunder has had a reasonable opportunity ol being heard; and

(ir) the Regisffar shall state in writing the nranner in which 1i1g gosts are aPPoltioned.

69. Any sunr awirxled^by rvay of ccsts under section 68 nray be recovered, on applicairon to a lnrgisirafc having jurisdrction in the.place where the person flrorl whonr the rn,rr.rcy is claimablc, actually and vo]untarily resides or carries on busincss, and suci-r magist.rte shall r'ccover the salne as if it were a fine im- posed by hirnseif,

7o. (r) Where in the course of an audit, inqtriry, inspcction or the rvindirrg ui) of a society, it is found that any person, wiro is or rvas entrusted u,itlr the organisation oy p1113gement of such society or rvho is or has at any time been an oFficer or an employee of the scrcietlr has made any paylnent contrary to this Act, the rules or the tlye-laws or has caused any deficiency in the assets of the sociery by breach of trust or rvilful default or negligence or lias misappro- priated or fradulently retiined^any monev or other propirty belonging to iuch Surchargc

19

( 16 )

sociclJr thc ){egistrar ,,,.,y, ufi.,, own nroriorr or"ou thc aPplication of l:he conrnri- ttee, liquidator or any crcdir.or, inquirc himsell

by any pcrson authoriscd by him, bv an order in writing in this-behalf.

(z) Where an .irlquiry is tnade under sub-section (r ), the llegisrrar or the person authoris(id lly hini nla)', aFter giving thc person c0ncerned an oppor- tunity of bcing hcard, nrake an order, requirirrg hinr to repal or restore the nrone)' or property or any part tht:reof, with interest at such rate, or to pav r:ontribu- rion and costs or conrpensation to such extent, as tlre Rcgistr.ar or'the person authorised by hinr rnay'consider just and proper"

7t. (,) Wherc in the course of an audit under section 6+ or an in- quiry undct'strction 66 or an inspection under section 55 or section 67, it is brought to the lrotice of thc Regisrilr that^a paid oFfir:er. or employee of the socieil, has cornmitte and disposal of the nlat.tcr, to place or caqse to be placed such paid officcr or enrp)oyec rttr

(:) On rect:ipt ol a direction from the Registrar nnder sub-sec- tion (r ), tht: c'oninrittcc ol thc registered society sha)1, notrvithstancling an/ pro- visiorr to the contr';rr) in the bye-larvs, placc or cause ro bt: placediuch paid officer or crnployee under surpension lorthwith.

(l)^The Registrar nray rlirect the conrmimec to extend fronr tjme to tip1e, the pcriorl of suspension and thc paid offi69. ()r enlployee suspender'l shall not be reinstated except rvith the previous sanction^of, the Registrar. Chaptcr VIII

Sr:ttlemcnt of Disputes

77. (,) Notrvithstanding anything contained in an,y lau, lor tht: timc being in f<.lrcr,; if any dispute touching the constirution, manager-r1er1t or the business ef n society arises :-

(.) among lnembers, past members and persons claiming drrough menrbers, past members and deceased member6, o1^:

(b) bctween I rncmber,_ past n'rember or pel'son clairning through i\ nleml)el', pnst nrember or deceased mcmber and the soeciet"y, its c-onrmittce o1 xn1, officer, agenr or ernployee of the society past or. present, or (") between the society or its conrmittec: and'any past committce, auy o(66,rr', allcnt or cnrplnyec, or an)' Past olficer, past agent or past employee or thc nor'ni11ce, heirs or legal representatives of any deceased officer', deieaied agcnt, or decc,rsed cniploycc of the society, or

(d) between the socicty,and any other society, bet'rycren a socisgy and liqr,riclatoi' .rf another sgciety or l:etrvecn the liquiclator of onc society anC the liquidator of another society, 9r

(p) l:etrveen the society and a person other than nrember of the society r+,ho has been granted a loan by the society or rvith whom the society has or had business transactions or any pbrson claiming through such a person; or

(f) bctr.r.een the society and a creditor of the society. such disputes shall be referred to the l{egistrar for decision'and no cour.t shall have juriscliction to entertain any suit or other procee

(2) For tlte purposes of sub-st<:tion (r), the follorving shall be decmed to l:e disputes tou(:hin-q the ronstitution, n-ranagement or the Eusiness ol a sor:iety, trarrrely :- ' (.) a claim by the society for any debt or demand due to it from a member or tile nonlinee, heirs or legal reprcsentatives of a deceased member, whether such debt or demand be adriitted"or not;

(b)^a claim by a surety against^the principal Cebtor where the so- ciety lras recovered lrorn the surety any amount in respect of any debt or demand due to it fi'onr the principal debtor as a-rcsult of the rlcfault of the principal debtor rvhether sr,rclt debt or demand is admitted or noti

(.) any tlispute arising in connection rvith che election of any oflrcer of a soc:iet);

(d) a ciaim by a society against a Jttember, Past member or dre luominee, heir or legal representative of a deceased nrember for delivery of pgssession to the society of land or pther immovable property resumed by it

20

?ower o.f State Co-opeta' tire Bonl'fto procecd

(17)

lor brer.ch .f th.

"o,ltfiii<;ns o[ assignment or allourrcnr of such land or other irrulovable ProPerty.

(l) Ilanv rlrr<'stion ariies rvhether a disputg referled ro the Regisrrai. tuncler this section is or ii nor a-dispute touching the constifution, management or rhe l:usincss of r societ/, thc decision thereon of the Registrar shallbe finaland shall not be called iu qucstion in any court.

(4)(a) Norwirl'rstanding anything conrained in any Iaw for thc tinre beingintbrceprovidingloranype,iodo[[inritationforsuitsand otherproceedings but iulrlect to^the specifr<: provisions made in this Act, tl.re period of linritation within whi<:h the disputc shall bc referred to the Registrar under sub-section (r) shall^-

(i) when the dispute l'elates to the recovery of any sum including interest thereon due to a society by a n'rember thereof, be computed frorn 1[. date on which such member dies or ceases to be^a mernber of the society;

(ii) savc as otherwise proviried in strb-clause (iii), when the ciis- 1:ute relates to any act or orrission on the ParC of any of the parties referred to in clause (b) or clause 1c) olsub-seclion (r), be six years from the date on w'hich the act or omission with reference to which the dispute arose, took placel

(iii) when the dispute relates^{to a} societl rvhich has been ordered to be wound up urrdc.r section 7S or in respecl of which^an administrator has be.en appointe(l uncit:r section 39 be six years fronr the date ol the order issued under sectiorr 75 ot'sectiou 39^as the case rnay ['re;

(iu) when the dispute is in resltect of an election of an officer^{ol a} socicty other than a society rcferled to in sub-section (l) ofsectiop 3+,^{be one} month from the clate of the declaration of the result of the eiection,

(b) 'lhe period of lin.ritation in the case of any o;her disprrte except tlrr:se r:rentioned in thc foregoing c:lause whicli arc required to be referrcrl to thc Registrar undel the last prec:eding section shal] be regulated by thc provisions of the lavr for the tirne being in lorce providing for any period ol' limitation lor' suits and other proceeciings,^as if tlre ilisptrte rvas a suit and the Registrar', a civil court.

(c) Notrvithstanding an;,thing containecl in clatrses (a) and (b) the Registrar may admit a dispute alter the expiry of the period of linritation, if the applicant satisfics the l{egistrar that he had suflicient cause for }1oI refen'ing the dispute rvithin su<:h period^and the dispr.rte so admitted shall be a dispute ,vhich shall not be barred on the ground that the period of lirnitation has expired. 73.^(r ) The llegistrar nray, on receil)t of tlre, rclerence of 2

(.) decide the dispute hilnself, or

(tr) transfer it for to any person who has been invested by (l

(z ) Wherc tlie reference relates to any dispute involving itnmpiable property the Registrar or suclt Person or arbitratorr may order that any person be joined as a pirrty rvho has acqttired any interest in such propertv stibse<1"rer.rt to the,acquisition of interest thereir"r b1,a parr:y to the reflerencc and any decision th;it rnay be irassed on the refcrence by the Registrtrr. or the person or the arbi- rrator aloresaid, shall be biuding on the party so joined as iI hc were an original l)arty to the relerence,

(l) The l\egistral nray rvithdraw an), re['er.:nce cranslerred r.rrrder:

clause ([r) ofsub-secton (r) or referred undcr clause (c) of that sub-section and decide it hinrscll or refer the sanrt: to anothnr arbitrator or such ar.rother person tbr decisiorr.

(+)^The llegistrar" or such pcrson or .1l.bitrator^to whom a rlispute is ref'erred [or c]ecision undel this section may, pendir.rg the clecision of the.dispute, rnake such irlterlocutory orders as he nray dcem necessall, in the interesr oljustice.

(S) The Ilegisrar or such person shali decide the dispute or thc arbitlar.>r shall pass an awarcl, in accorclancc with the provisir:ns of the ,\ct and the nik:s ar-rd the bye-larus.

74, (r) If^a society js ui.rable to pay irs debts to thc State Co-operative )iank by reasorl.of its metnbers comntitting default in the payment of the m()neys due by theirr, the Statr: Co-operative Bank may direct tlie committee of sucha societT to proceecl against sncir nrcrnbers uncler sectiorl 7z and if the committec lails to do so within a 1:eriotl of ninety days from the date ol receipt clf such direction, the State Co-operativ,e Bank itself 1l4y proceed against such members in rvhich c,.rse the provisions of this Act, the rulcs or the bye-laws shall apply as if all reference to ttrre society or its comnrittce in the said provisions tverc relerences to the Stilte Co-opeiative Bank.

(z) Where the State Co-operarive Bank has obtained a decision

21

State Co-opelarir,: Blni. n',"yt1.o...,1 to rccover such nror,e1,5 rir-stl),fr-om t[e assets of the society and secondly fr<.rm tLe lnenrbers to the cxient,rl'iheir

Winding up of Societies

wiadins up ot Socic'ltet

;k x"';1',;; *.J;-llitr,i:ki.:ff,";:r]i ;'|;:',,:fri#"r'j,',:ifi:"#* opinion that the society ought to be rvound up, he mav in consultation *,ith th"

State Co-operative Bank issue au orcler directing it to be wor"rnd up, (u ) The Registrar, nray, of his own motion, make an order direct- ing the winding up of a society^-

(l) u'here it is a condition of the registration of the societl that thc society 5l1ll 6crsist ol at least ten met'ubers and the nLimber of nrember.s has become lcss than ten, or

(b) u,hure^the society has not colrltlencc(i .u,or[ipg r.r'ithin six- morths of its registration or sr.rch further tiine as may be granted by-rhe Registrar or has ceased tc ftrnctiorr irr accordance lvith co-operative pr.inciplr:s.

. (l) The )legistrar llla)/ cancel an or,ier ior th" winding u1t cit' socir:t), at any tinrc, in an1,case, wherc, in his opinion, tire society shou-ld c<-,n- tinuc to exist:

(+) A copy olsr,rch order shall be cornmunicare(l by r.egistr:re

l)ror'itled that it shall not be rlecess.)r)/ to appoint any liquidator lor ivindirrg uP ola_t;ocict),rvl'riclr hirs not comme,cecl worl:1ng, or l-ras share capit;rl ancl m<:mbers' deposits not ecxcee(lilrg five hundred rupeei.

(r) A -liquidacor shalJ, orr -appoinrmenr, take ihro his custo<[y ot' unde t' his controi alJ tire propcrt.y, effercts and actionable claims t() \\,ilicli thr:

socic.ty is or a1;pgnr'5 to be entitlecl and allbooks, rccor

pertainirrg to thc b_rrsincss of thc society and shail take stic:h step)^ as hc-: nray dcc;rr

nerJessary or cxpedicrrtI to prevent loss oI detelioration o1', o1 rln6xge, to, such

propcrty, effccts ancl claims. [-le rnay carry on r.he brrsiness ol'the society

so fir as nray be nccessary rvith the previous approval of the Registrar..

(:) ltr/here an airircal is prc.f'erred urrrler section 9g, an ordcr. of

rn,inding r-rp olt a .;o-cict,y t-traclc ttn

the order is confirnrccl in appeal:

Providerl that the liquidat<-r-r'shall continue to have crrstorly or control

of the property, cff'ects and actionab]e r:laims mcntioned irr sr-ib-seciion (:) arrd

have authority to takc thc steps referred to in that sub-i-ection,

(+) 'I,/hert: an orcler of rvinding up cf a society is set asirlt: in appeal,

the property, efft:cts and ;.ctionaltle cl,,inrs o{rtl,e society i}rall rev<:st in r}rc-sirciety

77. (,) Subject ro any rules rnacle in this behalf, the whole olrhe assers- of a societ/v, in respect of r.r,hich an orcler lbr windinp r.rp has l:een macle, shall vest in thc )iquidator appointecl undcr section 75 froin th. date on.rvhich tl.re orcler talces eltl''ect anc'l the liquidaror shall irave power to realise sr,rch asr-ets b1, salc or oth,:rr, ist'.

(z) Such liquidator shali aiso l'ravc power, subject to thc controJ rr[: thr: Ilegistrar'-

. G) to insrirutc and clefeucl suits ancl othr:r. legalproceedings on behalf of thc society in thc rrrurc of irjs c>f[-ice; 0r)_^to detenriine liom time to tinie the contiibutiorl (incJucling debts clue anrl costs of liguidation.) to he ntarle or rernaining to be nrade by thE nrembers or past ntetrtbers or-by the estates or nor1linees, helrs or legr.l represcn- tativer of deceasecl nrctrrbers. by or any ollicers or [olnrer officers, to the-assets ol' the socicty;

(.) io'investigate all ci,rjnrs against the society and subject to the provisiqns o{ this Act, to.decide questions of priority arising betweer.r clairnants;

(d) to pay clainrs againsr the society including interesr up ro the date of winding up ac-^.rrding to their respective prioritles, if a-ny, in fr-rll-or rateably, is the asers oI the socicty may permit; the surplus, if any, remaining after pry- nrt:nt of the clai:ns being applied irr payment ol intr:resr'from the dlr" of ,u.h ordr:r of rvinding up at a rate fixecl by hirn but'not exceeding the contract rate in an1' case;

?owers oJ Liquidator

22

$ (,,)^to cletet'r'ninr: by wlrat Persotls ancl^iu what proportions^the t:ost of tlre liquidatioll a.re to lre bot'ue i ', (f)

-

t() dct€l'lirine rvhether atly Persol:I is a member, Past nlem- lrer or nonriuec of dec.clascd urember;

€l to give such directions irr regard to tht: collection and distri- bution ol t-he ass"ts-olt thc society as lrlay nlipear to'hin1 to be trecessary lor r.r,inding Lrp the affails of the society; .. . " itrl to c.u'ry on tllc business o['t]re societ;'so lar as lnf,)/ lje nece- ssar'1' lir thc bcrrefie ill n intJirrg ttp ol tl'rc santc;

(i) to tlrke any conlPromise or. arrallgenlent lvith .crcditors c'rt' persons cl.air:ring to be creclitors or having or alleging to have any clailn, Presen- tly ,,. l,tu,'", w:h"r"by the socitity miry be renclered liablc;

(j) to ilake rny,colltProlttise ot xrratlSement with an1' Perso11 betr.r,ct:r.r ,rliur-, nn.l the sot:iety thet"e c,xists any disputc arrd to refer any strch di- sDut(. t._. ^r.l>itr.atirtn ; "''--' " -([)-

nf't",'.,o,r.,rlting the nrenrbers,o'f the soc'iety, to dispose of the sur.1:ius if any, renraining atier payirrg the clain'rs against the societ;' itr the nrrtrner rlres< r'illc ilities to calls arrd debts and

liabilities capablc ot"r'cstrlting in debts, and all claiurs, prescut.or fttrrLrre, cer- tail or contiugent, subsistinf or supposed to subsist betweeu the societ;, 151d¹ contribr-;tor.y Jr alleged coniribtrtory or other, debtor or Person and all ques- rior.rs in o,-,yi""y relating to or ;rl{ectirrq thc assets or the u,inding up OI the socie- ty o,r sr.r,'li tcrjnts as rlray^Lrc agrced irrJ take auy security for thc dischargc of oi.,y ru.h c.rl), liability, rleirt lbr claini and givc a compir:te discharge iri respect thereol,

(:) When the alfairs of a society,have lreen r,r't ttrtd LrP, the liclui' tlator shall nrake a rcipol't to tlie Iiegistlar anrl dep<.rs.it tlit: records of tir<: society irr such place a,; thc l{cgistral tnay dilect.

78. , Notwitlrstunding anything containe^d in au;. lau' relating to .iusolvencl' n, n-,ny tirr tli.r time bcirrg in li.,rce, tltt: contri[rution assesscd by a liqr.ridirtor shall ,..,,r1.

.1,,

ordcr ol'ltriority ncxt t() tlt:bt clttt: to the Covel'nll-IenL or to any local authoi'it), itr solvcrlcy llrocc:t:dings,

79. (r) TI'rc Registrtrt'tuay, a['tr:r consider;ing tl.rc repolt oi che liqtri-. ,.-lator in,icle to [rir-n rrn<]r:r'-.r,-rb-section (3) olsection 77 order the registlation ol thc socicty to be cancellecl.

(z) An ordel pass.)d r.rnder' sub-scction (r) shall be conrnrunica- tecl by registcrcd post ttt tire president o{ the-society and to, t}re federai society, iI arr[ onf, to the Statc Co-opi:rative I]ank, of which tire sjociel/ rvas a tuetr.Lbt:t'. P r ior i\' of contributions

asscs.red ly I i tTuidator

l'owct's 2f Registrar^to

LoDccl tcSisilation ol'⁽¹

co^{- oP} c r a l:i^v c soci et)/

tnforccment oJ cht11a

Chapter X

Execution of awards, decrecs, orders

and decisions

I

go. Notrvithstanding anythiDg contained in chapter vlll or any other 1a\^, ft.,r the time being in force, but withotlt prejudictt to any <.rther mode of reco- veri provided in this Act, tl'rc Registrar or any persol sr.ibordinate to him^em-

Attachment bcjore awail Aegistru ot petson^cm- powered by hin to bc clvil courtJor certain

,

PUtPoset Recovegr oJ sums due ta Government

Applicabil ity oJ Chdptcr Acginration oJ Stat, Co-operatire [lanl Business which thc Stotc Co-opcrotivc Bank may trans0ct

Acr to of t91g

(20)

(b) iii any oth.rt"r. be execriied by the Registrar or ar)y pel.son subordinare tr: him ancl

.empowered by the Regiitrar in ihis behall' by utt,n"h- ment irnd sale or sale without aitachment of any p-roperty of the person or society against whonr thc order, decision or arvard hai l,ee,r 6btained or passecl,

82. The ordcrs of drc liquidaror un

83. Whcre the Registrar is satisfied thar a parry to rn,v rel'ercnce rrrarle himundersectionTu withintcnttodct'eatordelaytheexecutionof anydecision that may be paised thereon is about to^-

(.) dispose of the whole or any part ot'the properry; or

(b) remove the wholeoranypartofthepropertyfrr;mthe local Iimirs of the jurisdiction of the Registrar, the llegistlr nray, u.lcss adequatrr secu- rity is furnished, direct attachnrcnt of the said property or such part thtrreof as he thinks nectrssar).. Such attachmenr shall have the r.:r:e effcct rs il made hi.;r comPetcl'rt cir il cottrt.

Provided that the polyers of the Ilegistrar under this section shall not be delcgated to any ofllcer below such rank as may lre prescribeci. Provided lurther that imrnovable property shall not bc sol

84. The Registrar or any person enrpowered by him in this behalf shall be deemed, when exercising any plwers- under this Act lor the recovery of anv anlount by attachnrent and saie or by sale without atrachmrlt of any propert;,, or when passing any orders on any application rnarle co him for ,rlh ...ol,"ry to be a civil corrrt for the purposes of an;, l1v7 relating to limitation. s5. (r) All sums due from a socisgy, oi fron'r an omcer or member or past ntclnl)er of a society as such, to Government, including any costs au,ardecl to Government under^any provision of this Act, ntay, on a Certfficate issued by the Registrar in this behalf, be recovered in the sanre manner a5 arrears of lanil revenue,

(z) Srrnrs due from a society to Government and recoverable under sub-sec_tion (r), may be recovered,- 6-rs1ly from the property of the societ;r; $econdly, in the case of a society the liability of the members of which is limited, fronr. the members, past members or the estates of deceased members, subject ro the limit o[their liability and thirdly, in the case of other socie;ies, flrom ihe rnenrbers, pist members oi the estates of the deceased mernbers r Provided that the liability of past members and the estates of deceased nrembers shall in all cases be subject to the provisione of section 29. ' Chapter XI

State Co-operative^Bank

86, Notlvithstanding anything contained to the contrary in rhis Act or. rules, the provisions of this Chaptir shali apply to the Sbte-io-operative Biank that nray be'registered in the State under this Act.

B;, Nofwithstanding anything contained in this Act, a ".ociery shall not be iegistered as the-State-Co-operative Ban& unless the application loi registration thereof is signed by at least r o persons of whonr one shall be the Governinent an

88. It shall be lawful for the State Co-operative Bank ro cary on all or any of the lollowing business viz. :-

(r) to do banking business as defined in Clause (b) ot's€ction 5 and section 6(i) read with section 55 of the Banking Regulation Act, r949 or anyother law for the time being in force and in general to carry on and dis- charge such functions and business as are rrsually undertaken by banki or bankers; (z)^to serve as an apex bank tor the co-operative 56si.gi.. and to provide all types of financial accommodation, including short, medium and long-rerm loans for all kinds of economic acrivities, including agriculture and alliJd activities, industry, trade and commerce, to co-ope.i'tiri socieries as well as to other persons including fi-rms, companies or other corporate bodies; (: ) to act as an agent of the Reserve Bank,in the matter of operating currency chests on such terms and conditions as^may be mut,rally ng.".i rlponl i rnd

(+) to open bran_ches, -pay offi-ces or regional offices in any parr of the State of Sikkim-or outside Sikkim with the p..ri-ou. sanction of the Re- gstrar,

t

24

ContntittL'c

Taking over the busi' ness oJ the state Bank of'Si/

!ssue oJ'bonrls

Gudtantca by Covem- ntent of'pr)ncipal^o.l and interest on tlrc httnd.r

Othcr Guarantee b1, Co- Yerntnent

l\tght ol ptintagr agti- culturol cridit socieqr or tht State Coperotive Bonk to pty prior debts to tllottdBa0or

'Pova oJ the State Co- operatiYe BanA to Su-- pervise

I"I

>-

89. l-he Governrirent shall contribute not less than Sr Per cent of the total issued capital of the State Co-operative Banl<.

90. '[hc Conurrit'tt:rr of thc State Co-operative Bank sha]l consist of 9 members of whom 3 sh'all be nominated by the Government, 3 shall be prere- .lcntatics ol socir:ties, u shall be representatives of members other tharr socie' ties to be elected or nor.ninated^as per the by-laws of the Bank , and one Mana- ging Director ro be appointed bt the Covernntent in consultation with the i{est:rve Rank,

Provided that the jrritial comrnittee shali be entirely uonrinated by the Govern- r.nent for a period of 3 years or such other extended period as may be deeided l;v the Covernment,

;r,^The State Co-operative Bank may at any tin1e,-acqttire in w6ole or i., our, thc busipess of thl State llank of Siklcim, established under the State tsanl ol Sikkinr Proclarnation, r968,^as may be provided by Central Govern- rnent i:y^law,

9L. (,) 'the State Co-operative Bank nray-, with the prior approval uf tha Guu.,.ltnleltt,^and subjecC to such terms ,rnd conditions^{as the} Govern- rnent lr)ry dcem fic to inrpose, borrow lrlolley by issue of bonds'

(z) 'fhe bcruds shall be in the form of pt'orn-issory note^and shali not lie'repay,rble belore the expiry of 6ve years h'onl the date of issue thereol'. ' Provided that the conrmittee may rePay the amount due under the bonc|s at any time belore the date so fixecl, a{ter issue of notice in such manner as the conrmittee may clirect in that behalf to the holdels of the bonds. 9J. (,) 'lire,principal o1', and interest on, the bonds isstted under sJcrion .rz iliall, subjecito suih maximull .,lr1ount as may be 6xed by dre Go- verr)lne:-,t ancl sub;ect to such conditions xs ths Governmenl may thir-rk 6t to irlpose, carry the guxralltee^o-[ the Government' ' trj J:hs (;overnment nlay, subject to the Provisions of any Act in that regard, increase the maximunl amount ol any guarantee given uncler

sub-section (r ),

(:)^The Goverruuent n'Iay, after consulting the Committee, *

(") by notification in the Offlcial Cazette,^aud

(b) by notice of not less than fotrrteen-days in such of^the impor- tant news papefs in the State and in other State.s of india, as tlte Governtncnt rnay select'in this behalf, rvithdraw xny guarantee giv:rr by theur or reduce the u',"*i,rr.,rr', irr)rount. thereof or nrodily the conditions, subject to which it^was givelr'

provided tl-rat the withdrawal, reduction or n-ro(lificxtion of any gua- rantee under this sub-section, shall not in any way affect. the guaralitee carried by any bonds issued prior to the date on which such withdrawa.l, reduction or modification takcs elfect.

g+. Where the State Co'opeative Bank or the primary agriculgural ciidit society has given a long-term loan to a member for- the improvement of of any land in "*cei ^{the arrioi-rut}

of thc loan to which such rnember would be

entitGd, on the basis of the yah"re of the land^as detei'mined in accordance r+'iti the principlcs of vaiuation approved by the Conrn-rittee lrom time to tinrc with the lpp:'oial of the Retgist.ri, th" G'overntnent-may guat'antee lor a specifiecl pe.ioil tlre repayrnent of the loan to the extent of the excess.

95. (r) Where a urortagage is execuled in favour of a prirnary agricul- iurol

"r:edit society or the State Co-operative Bank for payment of prior debts of' the nrortgagor, the society or tire bank rrray, notw-ithstanding anything in an1' lar,r, fo. ih" time being in ltorce relating to the transfer of ProPerties, by no- ticl in writin$, r.equire^any person to-whom^any such debt is due, to receive payment of sich dibt or part thcreof from the bank at its registered olIlce wi- il',i,-, rucir period^as may be specified in the notice, irl Wherle any sucir Person fails to receive such notice ol such payrner)t, such debt or part thcreof, as the case lltay be, shall ce;\sc to carry in- ieiest frdm the expiration of the period specified in the notice:

Provided ihat where there is a dispute as regards the atnount ol' any such debt, the person to whom such debt is due shail be bound to receive pay- rnent of the amount offered by the primary agricultural credit society or the State Co-operative Bank, as the case may, be-towards the debt but such receipt shall^nou piejudice the right; il any, of such person to recover the balance claimed by hirl.

96. The State Co-operative Bank nray rhaintain gerreral supervision^over ol inspect societies affiliated to or financed by it 'and take_ up the lllanage- rnent tf the societies ou such terrtrs aud conditions as Inay be approvcd by the Registrar.

25

lnswed co-opuat.ive banks

47 ol' t9(tr

i

+7 9l't96r

+7 ol r96t

{22)

, 96, A (i) Subjeet tc,the plori.ions of Scctiorr 89 allorment of shar.es to nrt:ntbers of the State Co-operative Bank shall l:e gnvernr:tl by the .provisions o[ ((\ by-L\ws a.s qprored \the Registr.rs.

(r) 'fhc voting rights of nr,:nrlr.r.s shall b,r prol:ortionatc ro rhc shares he]d by each menrber.

Chapter XII

lnsurcd Co-o1:crative Banks

9j, Notwithstancling anything eontained in tiris Acr, in rlrc cast: of lr insured co-operative bank^-

(r j nn order lor the winding up, or au orcler,'anctioniug a schenrc of compromise or arrangelnent or of amalgamation or l'ecoi-rstntctiorr (inclr.r-

(t) an order lor the winding up of the bank slrall be n-rade by the Registrar il so reqrrired by the Resctr,cr llank in thc circunrstances referrecl ro iu section r3D of'the Deposit Insurance Colpor.ation Act, r96r ;

. (:) ifso required by the Reserve Banl< in the pub)ic inrcresr or. for prcver-rting the affairs of ttre bink being conclucted irr a ,,ror.,n". detrinier-rtal to the interests of thc clepositors or lor securing tlre proper rnanaget-nent of the bank, an order sha]1 be made lor t]-re sr:persession (rerroval) of thtr courmittee or ot:her marraging bo.ly (hy w]]atever nan.re called) of the bank anrl the appoint nrent ol..n adnrinistrator tllerefor for such Perio<1 or pcriods, not exccedi;q five years in the rggregate, as na\. [)'onr tir,re to time be specified by rhe Resi,rrt:

llanli^and the administrator so appointed shall, after the expiry of his tcrnr of offict,, r:orrtir.ue in ofFce rrntill the dav irrrnrerliately prcceding thc date of the first rneet.ing of tlre new conrurittee;

- (+) no ilppc;rl, r(rvision ot'r'erierv shall lie or be pernrissiblc ag;rinrt an ortler such as is relerred to in clauses (, ), (z) or (3) n',ade ra.,ith the 1:re viorrs sarnc:tion iu w;'iting or on tlte rerluisitior-r olt the lleserve Banl< and sric:h orrler ot. sanction shall.not be liahle to be <:allecl in qr.restion in any nrannt:r;

(S) the liquidator of the insured co-operatirle bank or. transJi:ree bank, as thc case tnay bc, shall be under an obligation r,o repay to the L)eposir Insuratrce Corpo121i911 in tl-rc circumstances, to the extent ancl irr t[e mannci. referrerl to in section z r of that Act.

Exirlanatiorl

(j) Frlr the plu'pos(:s of tiris section "a cci-ope:-ative bank', nrr:ans a bank as has l:eon

(ii) ".lr:surecl co-ollerativc L>ank" means a so6isgy lvhich is an insurerl bank rrnrler the provisions o1' the Deposit Insurance (iorporation iAc't, , t96t.

(jii) "'l'rarrsft:ree bank" in relation to an insurr:<[ co-oper.ative l;arik lrrrrans a co-operative banl.. -(u) vvith which such insured co-operar:ive banl< (b)^to which tire assers and liabilities of r;uch

is a.malgamated, o r

itrsured co-ollerati\re

banl< is divicled or con-

Lrank are transfen'ed, or

(") irito which sr.rch ir.rsurcd co-oi)erative

verted undcl the provisions ol this Act.

Chapter )(trII

Appeals and Revision

Appeals 98, An appeal shall lie uniier tiris secrion against -(o) an order of the Registrar rnade under. Jub-section (2) of sec- tion 8 refusing 1o rr:gister a societli

(b) an order of the Registrar rnade rrn r r rcfusing to register an amendnrent of the l>ve-lalvs of a co-operative societrv I

-(")^a d_ecision of a socierl, other dran a primary agricultural creditsociety,refusing to admit any person as a member of the society who is other-wise duly qualified for membership under the bye-laws of that spciery ;

(d) a decision of a society expeiling any of its members; -

(") au order of the Registar remoying the committee of a society mlde untler section J9;

26

. (D an orde t' nrade by the l\cgistlar undcr section 68 arrporrionirrrr rhc c<>sr of an c,quiry he]d urrdei sectio,., Zo o.

"n inspection

"r.d;-';;;..;;;;:lioll 6r; \ ($) any order of surchargc under section 7o I (lr ) any decision or aivaftl nrade under section'73 ; (i) an order made by the Registra*nd", ,""iion 75 direcring the winding up of a society;

(j) any order.maclc b1'tire liquidatr:r of a socicty ip e:xercise of the I)owels conFclrccl on him by secLiorr 77;

-

(k) any orcler nlade ur.rder section 8j.

(z) (a) An api;eal againsr arry decisionororderu,dersub-section (r), excepting tirose nrenrioned jn clausci (c) and (d), shall be 6rar.le to the Govt:rumcnt rvithin sixty days from the date of the dercision or the order; a,d

. lLrt the -app.:a[ against a'y decisio' of -r society rnentioned inclauses (c;_an

, (:). No.-appeal shall lie uncler this section fr<.,nr^any 6ccisiol 9r. ordt:r macle by the Regisrrar in appeai. - (+)

'l'hr: Gove,rure)rt or the Registrar, to whom an appeal is r.'ade

urrder sub-section (z) n:ay cali for and_exariine the record reiiting to the

rllatce.aPPeaied, for the pur?ose oI satislying itse]f-or himself as ro the'legality

r,rr Propliety oI any rlecision or order paiserland if in any case it appear. io th"(iovs1n111s.1 or the llegistrar, as the ior,. n,oy be, that #y ,,,ch ^ciecision or should be .rodified, airnult:d or reversecl, t(e GovcrnniJnt or che Registrar,

as the case^may be, n-ra,y pass sLrch order thereon as it and he nray deem fir]

99. _ Subject to the provisiolls o1' scction 97, the Govcipmeni: may, so or on the application r.,i'o party tio u ..L."n"", cal] lor anj examine the recorcl of any proceedings in which no appeal lies ro tlie Cover.nrnelt ulder

section,98 lor the pr.rrposc uf.satislying iiself as to the legality a,ci propriety

<.,I any decisio^ ,,,r order Pa-ssc.d arrd-iI i-n a^y casc it shall #p";,. tu ri thit any such decisio, or brder shouldle,lodified, annuled or."ris'"h, it n,ay pars.uci., ()i"der. 1:heroll as ir n-ray deer-n fit.

roo. wher'e an appcal is nrade under scction 9g o,r rvrrere the Grvern,rent:

calls lbr tlic rc<:orcl <>f i casr: u^rler section 99, the appellate authority for the

CovcrnurunL.rs rhc casc ma1, be, rnay, in ordcr tt_r nl""i ih" ends of iustice make

strch interlocLlt()ry order, inclLrrling'an or.der of stay, pendisg the' decision of

the appeai r:r revision as such authorit;, or.Corerlrneni n-,"y j.",r, fit,

Chapter, XIV

Offerrces arrd Pelralties

,ol. (u) No lterson, other thair a society, shall carl.y on business

tunder anv

^arne

or title ol: rvhich the *urd ",:o-ope:rative,, or'ir, equivalent

ir-r any L-rdia. language, is part , withotrt the sanction of the Government.

(t) Any person carlying on. anI trade or busiuess irr contravenriorr of sub-sectio.-r (r) shall be punished rvirh aine which rn.ry exten(i ro rwo hur-r- , clrcd rupces an-cl in thc case-ofa co,tinuing offence *ith u^dnc ui .up.", ,5 rn. ' each day on rn4rich the olfence is continuir"rg alter convictio'tt.r"oi, Provided alwal,s thac nothing in-this section shalt apply ro rhe gsc

by any persij,n or his successor i, inteist of any nanlc or ritl" ',*j"r which he carried on his business rvith the r.r,ord ,,co-operative,, or its equivalent in any India langr"rage, at the date o. rvhich the Silikinr Co-operative'soci"ti.s nct,

lg5.S camc itlto opcra[ion,

(l)

-

Any lnemb.r or'.past rrenrber o. r]re nornirce, heir or legal

J:el)rese.ntative of a cleceasecl rnerlrber of a socicty who contravenes the proovi-

sions of sec:rion 4e by-clisposi.g of any property in rcspect of which the siciety

is cntitled ro have a firsc chrr[c rrndcithit settion ui ,]u n,.,y other acr to the

prejudice^crf such clair,, shail 6e punishable rvith fine *)rich ri;ry.*t.nd to two

IrLrndred rupees. r -'---

(+) The conrrnittee of a society or an officer or nrcmber thereof

:llilllt lTk,lg ^"

false rerur.n or,furnishing,fatse inform",ior,, or'u.,y person wirturty.or

_\.'ithouc any reasoralrle excuse disobeying any s,mmons,' requisi_

t'ion oi lawful written'ordet' issued under the provisiois oi this Act or wilf*lly

do.es,not,f,,rniih any inlornration requirecl from hirn by a person authorised in

th,s behalr,under [he provisions of this ,\ct, shrll be punislble *.ith fine wl iclr

may extend to two hundred rupees,

(s) Any enrployer, who, without sufricient carrse, fairs to detluct or tails to paj'/ to a society the amount deducted by him u'der sub-section (z)

27

Copy oJ'the,lct.rulcs

and ly,e-lows to be open to insDcction

o r d ci.t to b c' pr o notr n- cecl

(24 )

,*

of section 54 r.rithin a pltiod ol'seven days lrom the date on which such clecluc- tion is made sha.ll^be punishable rvith fine which may exten(l to five hundled rupees andinthecaseofacontinuir.rgdefaultwithafurtherfineof Rs. r5 lbrear:h rlay on which the offence continues aflter conviction thereof.

(6) .lldefault is macle ir.r cornl:lf ing with provisions of section^18, srrbsection(r)ofsection33,sectionST,section6o, sectiotr 6r, section 61, tltt:

society,ancleveryof'ficerormemberof conrmittee olthe society who is default shall be punishable with Ene which may extend to two hundred rupees.

0) Il any person -.(i) alter ceasir-rg to be a nrcmber ttnder srtb-section (z) of ser:-

tion^u r acts as a member; or

(ii) exercises the rights of nrenrl:er itr contravetrtion of the plo- visions of section l5 shall be punishable with frne which mav extenrl to two hun-

(B) [f any person <:ollecting tht: share li-ior.,c\'foi' a rocit-ty^{in lor-} nration cloes not deposit the sarne in the State Co-oper;tive lJank witnin fbur- teen cla1,s of its receipt, he shall be punishable with fine which may extend^to five hundred rupees.

(y) If any person collecting the share rrioney lbr a society in fbr- mation nrake,; use of the funds so raised for conducting any trade or business in tht: rTame of the society to bc registet'ed or otherwise, he shall be punishable rvith flne rvhich may cxtend to five hundred rupees.

(,o)^If ar.ry officer or nrember of a society misappropriates or unau- thorisedly or illegally keeps any money belortging to that society heshal)^{be pu-} nishable with imprisonrnent lbr^a ternl which may extend to or)e year! or w'ith fine which may extcnd to one thousaud rupees, or r+'ith both. to2, Where an ,:ffence utrder sub-section (r ) or sub-section (4) of section ror has been comrnittcd by a comparry, every person v,[o, at the time^the ,rffcr:cc rras corulrittcd, was ir., ch;,rgc c,[, and was responsible to, the comparry-] lbr the conduct oi'the business of the conrpany , as well as the compirn)', shall I be decmed to^be guilty or the oflt'nce and shall be liable to be pror:eecled against and punishecl accordirigly :

Provided that nothing contained in this scction shall renrler anl, sllch person Iiable to auy pdnishnrent provideil in the aforesaid sub-sectiorr he pro.'es that the oft'ence was coninlitted rvithotrt his knorvledge or tirat hc exercised ali due diligence to prevent the commission of such of}'ence Provided further that if it is proved that the ol{e.nce has been conttlj- tted by the consent or connivance of or is attributable to arry neglect on the part of any directol', nlal'rager, secretary or other officer of the cornpany , such di- rector, marlager, secl'etary or other officer shall also be deemecl to be gLrilty of that off'ence and shall be liable to be proceeded against and punished accor- d ingiv.OJ

Explanation

-

For the purposes of' this ssqti6n -(oi "company" nleans a bocly corporate, and jnclucies a firm or other association of individuals; and

(b) "clirector" jn relation to firm rneans a pal'tner of the finn. rol, (,) No court inferior to that of a Presidency Magistrate or a Ma- gistrate o[ the first c]ass shall try any offence uncler this Act" * (z)" No prosecution shall be ir.rstitutecl u'nder this Act widrotrc tlre previous sanction ol the Registrar and such sancti<.rn shall not be given ---

(i) without giving to the person concenred an opportunity to represent his case;

(ii) il tl-re Registrar is satisfietl that the person concerned actcrl in gr:od faith,

Chapter XV

Miscellaneous

r04, Every society shail have an address registeredⁱⁿ accorciance with the mles to which all notices and commnnications may be serrt and shall send to thc Iiegistrar notice of any change thcr"ol rvitfiin thirty days of t|e chasge. roS. E-/ery society shall keep a copy of this Act, the rrlles and its bye-laws open to inspection free of charge at all reasonable times at the registered ad- tlress of the society.

ro6. Fvery order; decision or award made or given by the Registrar, or any oflicer or other person or a liquidator, under this Act, shall be pronounced on the day on which the case is finally heard or on some fr-rrure day of u,hich tlLre notice shall be given to.the parties.

28

r:7. . - (,) tr.*;:rlr or a,ly other person to whom a rlispute is re-ferreci lor decision or a, appeal is rnade against any order or

and sharl have power io surnmon and enforie attendance of rvitnesses inclu-

ding the parties interested or any of them and to compel them give evidence

on oath, alfirmatlon or affidavit,^and to compei the production of documents

by the same moans atrd as far as possible in the sanre manner, as is provided at

in the case of a civil court by the Codc of Civil Proccdure, r9o8

(z) Except with the permission of the Registrar or any other persorl dcciding a dispute, as the case tnay be, no party shall be represented at tire hearing o[ a dispute by a legal practitioner.

(:) (o) If the Registrar or arly other person to whom a dispute is rei'erred is satisfied that a person, whether he be a member of the society or not, has acquired any irrterest in the property of a person who is a party to a dispute he ma1, order that the person who has acquired the interest in the pro- perty may join as a party to the dispute; and any decision, order or arvardlhat rnay be passcci by the llegistrar or his nominee or any other person shali be binding on .the party so joined, in the sanre manlrer as if he u/ere an originai part)/ to the dispute,

(b) Wfrele a,dispute has been instituted in the name of a wrong persolr, or where all the ciefendants have nor been included, the Registrar oi any othel'person to rvhom a dispute is referred lor decision under s-ction 7z may at any stage of the hearing of the dispute, if satisfied that the mistake was bohafide, order substitttion of parties upon such terms as he may think just. (") The Rcgistrar or any other person to whom a dispute is re- ferred for decision undcr section 7-2, r\\ay at any stage of the proceedings, either upon or without the application of any party, and on such terms as may appeal. to the Registrar or any other-person deciding a dispute, as the cose mny be-, to be just, order tlre 1en1ova1 of the name of any party improperly included in the rlispute and substitution of the nanre of nny pl.ior', who ought io have been jn- cluded in the dispute or whose presence - belore the l{egistrarr or an/ other person deciding the dispute, as th-e case may-le, nray be necesiary lor effectually aud cornpletely adjudicating upon ancl settiing all the"questions involved in the dispute, (,1) Any person who is a party to'the dispute and entitled toiore than one relief in respect o[ the san-re cause of action may c]ainr all or any or ;il,:5'i' :lx i:t :#:;l ff :,;l,i!oi' l[#;]l;:;], J;:"i?,i: ;1d1, l;:

or ar,y other person io whom a dispute is reflcrrecl lor c]ecision. Powets of civil coutt, ro8, (r) In exercisiong the fLrnctior.r conferred by or under this Act, the Coverrrmcnt , the-Registrar, the arbitlator or any other person deciding a dispute and the liquidator or arr auclitor of a society shail havi all the porveri of a civil court, wl-rile trying a suit, under the Code'of Civil procedure, r9o8, in lespect of the lollowing nrattel's nanrely:*

(l) summoning and cnforcing the attenclance o[ any person and exanrining hin-r on oath j. r

(b) requiring the disovery and prodirction of any documenr;

. (.) prool of facts by affrdavits; and , (d) issuing cornnrissions for exarnination of witness,

(r) in the case ofl"any affrdavit, any-oflicer appoinrcd by the Go_ vernr)rert, the Registrar, the arbitrator or any other person decidinga dispute or the liquidator,br the auditor as rhe case inay be,'rnay aclrninistJr the lath to the ccPor)erlt,

lSar of Jtrisdiction of ro9. (r) Save as provided in this .Act, no civil or revenue court shall coLltts have arry jurisdiction in respect of -

- io) the registratio, of a sociefr r:r bye-laws or of an ame,drnent of a bye-laws;

(b) the rentoval of a committee;

. (c) a*y dispute required under sectior) 72 to be referred ro the Registrar; ol' order for pal,ment of moneys under section 8 j.

(z) Whilr a sociery is being.wound up, no sr,rir.r other iegal pro- ceeding

-relating

ro the business ofsuch societli shalibeproceece{ iuit}i, o, instirurcd against the li

(:)

-Save as provided i'r this Act, no order decision or award lnade un o"f t961 der tfiis Act.

29

Service oJ notice under the Act

Noilce necessar! ;in Jul''{ lndemnity

( 26$)

r r !. Jhs Qovernment n1ay, by gcneral or sPecial orde^r' pubiished in^the

otficial Gazette, "*.".,pt""'y ';";t'i;t

any class o?societies fronr any of the pro-

vi5ions of tl is Act o. r,uy^ii"t""(ot-t"ttl provisions sha)l apply ,t".:t* societv

0r class of iocieties *i;li ;;h;'dificatioi'" as nlay be,sy1fied in the orcler'

I--verv notice cl, o'at' issued or'""d" undtr this Act' may be scrt'ed " '- ) on any persorl, by P.;;tt;iittttrtg it to the lnss lqnown place of residencc

.. irl,""*-tI ru.1r;"';;-i*p"yi"g.";tl posting by registered Pitt 1]^Tt::-::l:

taining the .:-,otice o. o.dJa uri ,r-nl"t. ih. corltrarv is llro,ed, such servrce

shall 5e clecmed ,o t-,t'"'il""n "ff"tttd

at the time nr i'hith the letter wotrld 'e

delivered in the ordinarY course'

r r r. No suit ,1'"11 iJ r""i**a against a societY

ol any of its officersⁱⁿ

."ip".t of any act touching the constitlltion' *"n''gtnienc' or'the.business oI dre

,o.i"tyuntiltheexpiratiorioft\vomonthsnexta[t&noticeinr+'r'iting has^becn

delirci'ed to th" Regi'tt", "t-i"f' ^'

his office' staEing the cause o[ action'^the

,^rr", i"r.', 1'.t ior, .fi^d ir^'" " r'" "

J;

I

;::Ilil1lLt' kf :*t:*lr-l::l i:

claims;^and ?.he plaint shall contain a statenl€ ilelivered or left.

ti+, No suit, prosecution or other.legal oroceedings shail lie against thc

Repistrar or any p"rron"J,iUo,:dir,.te to him'or'o.tine ,.,n.i.t his authority in^res-

;".il;,.y;iir! i.. g""a faith done

or PurPorting to"h"'" been done

under^this

Act..

companies Act, 1956 r15. The provisions o[ the companies Act' 1956 shall not apply to^so-

i""',!',n":1!r,,',,{',1,1!,,,,:ih: o", lll *1,U";::'Ul':U,,T:lX*"il',*"iiffl'#:?1i::':,:T:

cicties Act, I955 oI' ';;;t-;;i

otfi"t l"u relatirrg to co-operative.societies in

force in thc State "f Siil;i*

ti'lff f'" dttnl"d to hu"'" been iegistered"under this

Act. and its bve-laws ;;;1i; ; i"t as the same are not inconslstent with^{the ex-}

;:."J,";;;:,;i; ;f ,il;:,, "'*i"u'

in force until altered or resciud'ed'

P.."t P'."'(;;^' nri "pp.rr',nr.",r,

rules -and

or.ders made, notilications^and

notices issued and ."t;:;;-;;t-p'ottttlings instituted under

the Sikkim^Co-

operative Sc'.:icties A;,"; ;55 th'ti Ut. d""n''Erl to have been respectively nrade

issued or institutect "';;'";;1i1"

Ac!' uniess

powerstomaherules tt7, (r)-- Th.;;;;;-entmay'fort("wholeoranyPartofthestate of Sikkim and for ",,y

Jn" oi Societies' after previous publication in^the Gazette'

make ruies to carry out the PurPoses of this Act'

(z) In particuia'r, and without prejudice *"t|"

"g-t1:]-11iry of thc

foregoing )rJ*"r, ,,'.t rules may provide for-all or any of the following matters'

namelY l- ,.u,,,.', .-(")

the applicant to whonr the order refusing the registration of

a socieW nray be sent by the Registrar;wurtrL/ (#

"";;;;J;; ;;i conditions for change 1s 1[q flornr and ex- tent of tlrl iiuiritity if a society; " r. ! ^,:--.. -L^, ^* (.:) the matters in respect of which a society shall or may tnake bye-laws; " (d) the procedure to be followed for amendrnent of bye-laws by

a society; . ""-'-'r'1.\

the qualifications or disqualifrcations of individuals who^may

Ir. admittld n, r,,embe" of societies;

(0 ttr" p.o,l,iott^for a second or casting vote by the chairman

of

a meeting qf x 5ociet/ i

/o\ the aopoinrment b'7 a society of one of its members to rePresent

nnd vote "lrui,

U.ir.lf li^u ''''ttting

of unothti society of which it is a member ;

(h) tlr. ,";;;;;-ni''b"' o[ shares.or'portion of tlr'e share capital of n ...i.['*hich may be held ]y an individual member'; ""'""-^"(i) "";i; pi";..ure foi.the no,rinatio' of a p,erso, to whom the shareorinterestolo,,.*"t,""*,..hl,.l"ut],maybetrarrsferreclorthevaluethereof

may bc Pai

(j)^the mode in which the value of a deceased member's share

ahall be ascettained;

0.) the election of urembers of committee by the.general

body of a

societyinc)trr1irrgtt,"..ppoint,.-rerrtolReturningol.ficcrsand-theporvet.sand

functi6ns of strcll Returning Officers-;

(l)^the requisi"tioning of a general meeting o[ a society;

i,{.,1^th" .",,L,r.,"."tiui ptyiblt to a new*committee

or Ailminis-

trators appo inted 1n p)ace

o[ a conrtnittes lsrnoved bv the Registrar i

(r,)^,n" qu"iin.o,ions or disqualification', fnr *J*bership of com-

mittee of

to 'no"i..ty, 'the autl,ority c"onlpetent to decide qtlestions of disqua-

lifications r.r.d appeals from such decisions;

30

(q) the rnatters connecred rvith the partnership of the Governrent in societies;

(r) the rare ar which dividend may be paid by societies;

(t) the 1:ayn-rent to be nrade to the 'Co-operative Educatior.r F-ultl' by a society out of irs net proiits and the mode of itslnvestrnent;

(c) the nrocle^ol: investment of funds of a society; (") the objects of the reserve fund o[ a sociery and r.node of irs invcstnlflrt;

(u) the rnode^o I disp.osal of r.eserve fund of a society o, irs rvindi,g up ; (*) the exrent and conditions subject to which a society may 1.e- ceivc deDosits atrd loans;

(") the restrjctions on transactions by a society rvith non-merlbers;

(y) the restrictions^or1 grant of ioans b;, a sociery againsr its shares I (r) the fonn and standalrds of fluid ."rorr"". to bE maintained bv societies accepting deposits and granting cash creclits;

(nn) the levy of audit fees on societiesl

(lrb) rhc procedu'e ro be followed irr proceediugs before trre ile-

gistrar, arbitrator or other person deciding disputes;

. (..) the co.ditio,s subject to which rssets of a sociery shall vest in a liquidator and the pr,cedure ro be adopred,in winding ,p of u societ/; (dd) the procedure lbr recovery of amolrllts ?ue or payable io a society;

(:-") the mode of making attachment before judgernent; (10 the procedure ar.rd conditions lor thc issue-, redemprion, re_ issue, transfer, replacetlerrt or conversion of bonds issled by a society; (gg) the nraximu,l alrount of principal, the rate of interesiand other conditions for the guararltee of debentures/bonds issued by a society; - (hh) the proccdr-rr.e Ibr the distraint and

,sale of p.operry, mort-

gaged to a priurary- agriculturai credit society or to the state co-operative Bank ; (ii) the iurmediate sale o[ perishable arric]es; (jl) the manner of registering the address of a sociery;

(kk) dre account.books and registers to be kepr by a'society and

power of Registrar to direct the accounts and books to be written up;

(11) rhe nranner of certificatio, of enrries in the booksbf a society and of copies of documents kept by it in the course o['its business; (innr) the staremerlts and retr.rrns to be f'urnished'by societies to the Ilegistrar;

(".) the restrictions -olt persons appear.ing ng (o") the inspecrion of documenrs and the Ievy certified ccpies thereof; and

lcgal practitions;

oi fees for granting

I\epeol

, -(pp) the marrers expressly required or allowed by the Acc to be prescribed.

,

(:) . .Every rule made under this sectior: shall inrnrediately afrer it is made, b: laid belore the state Legislature if ir is in session and if it is not in session, in the session im-mediately follorving for a total period of fourteen days which may be complised in onc session orlin truo sucCessive sessions,

"rr,1 if,

belore the expirafion of the session in rvhich it is so laid or the session imrnediately following; the Flouse agrees, in nraking any modification in the rules or in the anntlalment of the rules, the rules shail thereafter ]rave eft'ect only in such nro- di6ed form or shall stand a.nualled, as the case l)ray be, so, l.ro*Lu"r, that any such modification or annuaiment shall be without prejudice to the valiciity of arrything previousll, done uu

r,1. - O,l the day on rvhich this Act comes into force, the Sikkim Co-ope- rative Societ"ies Act, r g jJ as in fbrce in the state of sikkim shall stand repealed :

Provided that the repeai shall nor affect :-

. (l _ the previous olteration of the Act so repealed or anything duly done or sr-rffered thereunclerl or

. (,b) any ri-qhr, privilege, obligarion or liability acquired, accrued or incurred under the Acr so rcltealcd ; or-

(o) any penaity, for:feiture or 1>u,ishnre,t i'curred in respect of any offence conrmitted againsc the Act so iepealed; or , (d) any. investigation, legal -proieeding or remedy in respect of an)/ sucil right, privilege, obligation, lialiility, p".,ulty, fcrr.l'eiture or punishment as aforesaid, and any sr.rch

^irivestigation,

legai proceeding o. .*nl".Iy rnay be

instituted, co,tinued <.rr e'frrlcer,l, and-any iuch perralry,-tbrfeiture o, p,*luh- ment may be imposed as if that Act had not been-repeaied.

31

Government may, by nOtifiCafion in the official Gazette, make srtch pro^visions as appear to it io b. ,,ec"rrary or expedientfor lslnoving tlre difllcul6,.

(z) If any difficulty arises in giving effect to the provis.ions of this Act (otherwise than' inrelation to the tiansition from the provisions of the Acts in force before the commencement of this Act), the Government rnay bv notification make provisions, not inconsistent with the PutPo:-. of this Act,^as appeat to it to b"

-nece.sary or expedierrt lor removing the diffictrlty'

By Order of the Governor.

B. R. PRADHAN,

Secretary to the Government of Sikkim Law and Legislative DePartment. F. t5 (zs)LLfi1,

TTNTTNN AT THT SMXMI GOVERNMENT PRESS

32

EXTRAORDINARY

PUBLISHED BY AUTHORITY

No. 112

Gangtok, Wednesday July^3,1985.

GOVERNMENT OF SIKKIM

LAW DEPARTMENT

GANGTOK.

Notification No. 6/LD/85 Dated the 29th June, 1985. 'The following Act of the Sikkirn Legislative Assembly having received the assent of the Governor on the 28th day of June, 1985, is hereby published for general information:-

Short title and

comrnencemen t.

THE STKKIM CO-OPERATIVE SOCIETIES (AMENDMENT) ACT, 1985.

(ACT NO. 6 OF 1985)

AN

ACT

to amend the Sikkim Co-operative Societies Act, 1978. Be it enacted by the Legislative Assembly of Sikkim in the Thirty- sixth Year of the Repu blic of India as follows:-

1. (1) This Act may be called the Sikkim Co-operative Societies (Amend- ment) Act, 1985.

(2) It shall be deemed to have come into force on the 1st day of July,

1978.

Amendment of section 38.

2. In the Sikkim Co-operative Societies Act, 1978, in section 38, in sub- section 0), after the word "nominate" and before the word "members", the words' 'Chairman and" shall be inserted.

B. R. PRADHAN,

Secretary to the Govt. of Sikkim, Law Department.

F. No. 16 (25) LD/78.

PRINTED AT THE~ SIKKIM GOVERNMENT PRESS, GANGTOK.

33

GAZE"TTE

EXTRAORDINARY

PUBLlSHED BY AUTHORITY ----._------------_._-------_. __ ..__.--_._------, Gangto/( Monday 18th August: 2003

"- No. 262 GOVERNMENT OF SI~

LAW DEPARTMENT

GANGTOf<

No. 9JLD/2003.

Dated 13.8.2003. NOTIFiCATION The following Act of the Sikkim Ler.Jislative Assembly ilavill~received the assent of the Governor on 4th day of August, 2003 is hereby published for general information:-

THE SIKKIP,,~ COOPERATIVE SOCIETIES (AMENDMENT) ACT, 2003

(ACT NO, 9 OF 2003)

AN

ACT

further to amend the Sikkirn Cooperative Societies Act, 1978. BE it enacted by the I_egislatum of Sikkim ill the Filty-Iourtn Year of the Republic of India as follows:-

Short title,

and comm-

encement.

1. ('I) This Act may be called the Sii(kim Cooperative Societies (Amendment) Act, 2003.

(2) It shall come into force at once.

..

Amendment of Section 38,

2. In the Sikkirn Cooperative Societies Act, 1978. in section 38,-

(i) in sub-section (1), the words" Chairman and" shall be omilteel

(ii) after SUb-section (2), the following sub-section shall be inserted, namely- '(3) The chairpeson of the Apex Cooperative Societies shall be elected from amongst President of the M8mber Cooperative Societies and the manner of electon shall be such as may be prescribe in Hl8 Bye-Laws of the respective Cooperative Societies".

3. The Sikkim Coope.rative Societies (Amendment) Ordinace, 2003 (6 of 2003) is hereby repealed.

Reoeel.

By Order,

T,O. RINZING

Secretary to the Govt. of Sikkim, Law Departrnent.

F. No, 16 (82)LD/2003.

34

GOVERNMENT GAZETTE

EXTRAORDINARY

PUBLISHED BY AUTHORITY

Gangtok Monday 17th April, 2006 No. 104

GOVERNMENT OF SIKKIM

LAW DEPARTMENT

No. 30/LD/2006.

Date: 15.04.2006.

NOTIFICATION

The following Act of the Sikkim Legislative Assembly having received the assent of the Governor on 24.03.2004 is published for general information:-

THE SIKKIM CO-OPERATIVE SOCIETIES (AMENDMENT) ACT, 2006

(ACT NO 1 OF 2006)

AN ACT

Further to amend the Sikkim Co-operative Societies Act, 1978. Be it enacted by the Legislature pf Sikkim in Fifty sixth year of the Republic of India as follows:-

Short title and 1, (i) This Act may be called the Sikkim Co-operative Societies (Amendment) Commencement Act, 2006.

(ii) It shall come into force at once. Amendment of

Section 90

2. In the Co-operative Societies Act, 1978 (hereinafter referred to as the said Act,) in section 26,

(i) for the figure "5000" wherever it occurs, the figure "20,000" shall be substituted,

(ii) after the words "whichever is less" the following shall be inserted, namely;

"except in case of Urban Co-operative bank where the maximum ceiling will be Rs, 1.00 (one) lakh".

3. In the said Act, for the existing section 90, the following shall be substituted namely: -

"90. The committee of the State Co-operative Bank shall conslsts of 14 (fourteen) members of whom 4 (four) shall be nominated by the Government, I (seven) shall be representatives of societies of which one shall be women representative elected from amongst the women Presidents of Multi-purpose Co-operative Societies and if not one women Director having some experience and background abou cooperative to be nominated by the State Government, 2 (two) shall be representatives of members other than societies to be elected or nominated as per the bye-laws 0 the Bank and one Managing Director to be appointed by the State Government ir consultation witl, the Reserve Bank of India",

Amendment of

Section 26

By Order.

R.K. Purkayastha (SSJS)

Legal Remembrancer- Cum- Secretary

Law Department

File no. 16(82) LD/P/2006

S.G.P.G -1141Gazeffe1150 NosIDt:- 19.4.2006.

35

GOVERNMENT GAZETTE

EXTRAORDINARY

PUBLISHED BY AUTHORITY

Gangtok Thursday 20^th

August, 2009 No. 311

GOVERNMENT OF SIKKIM

LAW DEPARTMENT

GANGTOK

No. 6/LD/P/2009 Date: 20.08.2009

NOTIFICATION

The following Act passed by the Slkkirn Legislative Assembly and having received the assent of the Governor on 4th day of August, 2009 is hereby published for general information:-

THE SIKKIM COOPERATIVE SOCIETIES (AMENDMENT) ACT, 2009

(Act No.6 of 2009)

AN

ACT

further to amend the Sikkim Cooperative Societies Act, 1978. Be it enacted by the Legislature of Sikkim in Sixtieth Year of the Republic of India as follows:-

Short title extent

and commencement.

1. (i) This Act may be called the Sikkim Cooperative Societies (Amendment) Act, 2009.

(2). It extends to the whole of the Sikkim. (3). It shall come into force at once.

Amendment

of Section 2.

2. In the Sikkim Cooperative Societies Act, 1978(hereinafter referred to as 'the principal Act); in section 2,-

(i) for the existing clause (a), the following shall be substituted namely:-

(a) "National Bank" means the National Bank for Agriculture and Rural Development established under Section 3 of National Bank for Agriculture and Rural Development Act1981;

(ii) for the existing clause (e), the following shall be substituted, namely;-

(e) "Cooperative year' means the period beginning from 1^stday of April or the date of commencement of business or

36

(iii) for the existing clause (f) the following shall be substituted, namely:-

(I) 'Deposit Insurance and Credit Guarantee Corporation' means the Deposit Insurance Corporation established under section 3 of the Deposit Insurance Corporation Act, 1961',

(iv) for the existing clause (g) the following shall be substituted, namely:-

(g) 'Apex Society' means a society, where not less than five members of which are themselves societies. Note :- the word 'chairman! chairperson' shall be used only by the Apex societies and those societies other than the Apex societies shall use the word President for the word Chairman after the enactment of this Act.

(v) for the existing clause (i) the following shall be substituted, namely; 'Self Help Group', including 'Joint Liability Group' means a group of individuals willing to undertake economic activity! ies individually or jointly, whether incorporated or not and whether established or not by or under any law.

(vi) for the existing clause (k) the following shall be substituted, namely:-

'Nominal Member' means a person admitted as a member by paying the admission fee and shall not be having any voting rights and shall not be entitled to dividend declared,

(vii) for the existing clause (0) the following shall be substituted, namely:-

'Primary Agricultural Credit Society' means a cooperative SOCietyas defined under clause (cciv) of Section 5 of Banking Regulation Act, 1949(Central Act 10 of 1949) and includes a Multipurpose cooperative society.

(viii) for the existing clause (v) the following shall be substituted, namely:-

"State Cooperative Bank" means an apex society engaged in the business of banking;

(lx) after clause (v) the following clauses shall be inserted, namely ;-

(w) "Chartered Accountant" means a member of the Institute of Chartered Accountants of India within the meaning of the Chartered Accountants Act,1949 (38 of 1949)

(x) "Cooperative credit structure society" includes a State Cooperative Bank and a primary agricultural credit society.

(y) "Multipurpose Cooperative Society" means a primary society the object of which Is to provide various services including services related to savings, credit, business, industry and consumer durables to its members.

(z) "Primary society" means a cooperative society whose membership consists exclusively of individuals and self help groups.

2

of Section 11.

3. In the principal Act, in suo-section (4) of section 3, for the word 'federal' the word 'apex' shall be substituted.

4. In the principal Act, in section 5,

(i) in clause (a), for the word 'federal' the word' apex' shall be substituted,

(ii) after clause (b), the following clause shall be inserted, namely:-

(c) No primary agricultural 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 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) has been registered or using the same as a part of its name before the commencement of the Sikkim Cooperative Societies (Amendment) Bill,2009 with the word 'bank' or any of its derivatives in its registered name, it shall within three months from the date of such commencement, change its name SO as to remove the word 'bank' or its derivative, if any, from its name:

Provided further that where any such society fails to comply with the above provisions within the period specified therein, the Registrar shall order the winding up of such society forthwith.

5. In the principal Act, in section 8, (1) in sub-section (1) after the words 'its bylaws' the following words shall be added, namely:- 'within one month from the date of submission of application to the Registrar'.

(ii) in sub-section (2), for the words 'six', the word one shall be substituted.

In the principal Act, after section 8, the following new section SA shall be inserted, namely;- "Affiliation" 'A cooperative credit structure society may affiliate or disaffiliate with an apex society of its choice:

Provided that before dis-affiliation, the society shall discharge Its financial liability, if any, to the society from which it is dis-affiliating.

6. In the principal Act, in section 11,

(i) in SUb-section (3), after the word "amendment" and before the words "together with", the words "within one month" shall be inserted;

3

of Section 20. Amendment

of Section 21. Amendment

of Section 22.

(ii) in sub-section (4), after the words "therefore" and before the words "to the society", the words "within one month" shall be inserted.

7. In the principal Act, in section 12 after the words" duly made by the society" the following provisio shall be inserted, namely:

"Provided that the provisions of this section shall not apply to a cooperative credit structure society".

8. In the principal Act, after section19, the following new section 19A shall be inserted, namely:-

. "Financial and internal Administrative matters"

(1) 'Notwithstanding anything contained in this Act, rules or bye- laws made there under or any other law for the time being in force, a cooperative credit structure SOCiety shall have autonomy in all financial and internal administrative matters including the following areas:-

(a) Interest rates on deposits and loans, in conformity with the guidelines of the Reserve Bank;

(b) Borrowing and Investments;

(c) Loan policies and individual loan decisions;

(d) Personnel policy, staffing, recruitment, posting and compensation to staff;

(e) Internal control systems, appointment of auditors and compensation for the audit'.

(2) 'A cooperative credit structure society shall have the freedom of entry and exit at any tier without mandatory restrictions of geographical boundaries for its operation'.

9. In the principal Act, in sub-section (1) of section 20 after clause (d) the following clause shall be inserted, namely:-

"(e) any self help group".

1O. In the principal Act, in sub-section (3) of section 21, after the words

"member of another" and before the words "credit society", the word 'primary' shall be inserted.

11. In the principal Act, in section 22, -(i) in clause (c) the following proviso shall be inserted, namely:-

'Provided that the provisions of this clause do not apply to a primary agricultural credit SOCiety'.

(ii) after clause (c), the following clause shall be inserted, namely:-

(d) where a self-help group is a member, a person nominated by such self-help group, may vote on its behalf In the affairs of the society'.

4

of section 34. Amendment

of Section 36. Amendment

of Section 38.

12. In the principal Act, in sub-section (3) of section 31, after clause

(e) the following clause shall be inserted, namely:-

(f) Notwithstanding anything contained in this Act, no person shall be elected, nominated or co-opted or allowed to continue as a member of the committee of a cooperative credit structure society, if he,

(i) is a person who represents a society other than a primary agricultural credit society on the committee of a State Cooperative Bank if such society he represents has committed a default towards the payments of such Bank for a period exceeding ninety days;

(ii) is a person who committed a default towards the payments to a primary agricultural credit society or represents a primary agricultural credit society on the committee of a State Cooperative Bank if such society he represents has committed a default towards the payments of such bank for a period exceeding one year unless the default Is cleared;

(iii) is a person, who represents a society whose committee is superceded or has ceased to be a member on the committee of his own society'.

13. In the principal Act, in section 34 after sub-section (2) the following sub-sections shall be inserted, namely:-

(3) The Returning Officer under sub-section (1) of Section (34) shall within 90(ninety)days before expiry of term of the committee, make arrangements for the constitution of a new committee in accordance with the provisions of this Act and rules and bye-laws made there under.

(4) Where any Committee has ceased to hold office and no Committee has been constituted in accordance with the provisions of this Act and Rules and bye-Jaws made there under, the Registrar, may, by an order in writing, appoint an Administrator for such period as may, from time to time, be specified in the order and the Administrator shall before the expiry of the period of his appointment, arrange for the constitution of a new Committee in accordance with the provisions of this Act and rules and bye-laws made there under:

Provided that the total period for which an Administrator may be appointed shall not in any case exceed 60 days.

14. In the principal Act, in clause (c) of section 36, for the words "a federal society" the words 'an Apex society' shall be substituted.

15. In the principal Act, in section 38, in sub-section (1), after clause (ii), the following clauses shall be inserted, namely;-"(iii) Notwithstanding anything contained in sub-section (1) of this Section, there shall

5

of Section 42. Amendment

of Section 55. be only one nominee of the State Government on the committee of a State Cooperative Bank if the Government has subscribed to its share capital."(iv) Notwithstanding anything contained in sub-section (1) of this Section, there shall be no nominee of the State Government on the committee of a primary agricultural credit society.

16. In the principal Act, in section 39, -

(1) in sub-section (1), the words 'or the cooperative movement in the state'; shall be omitted:-

(2) in clause (b), for the words 'one year' the words 'two months' and for the words 'three years' the words 'six months from the date of supersession' shall respectively be substituted;

(3) in sub-section (3), words 'subject to the control of the Registrar and to such instructions as he may from time to time issue'; shall be omitted;

(4) after sub-section (5) the following new SUb-sections shall be inserted, namely;-

"6 (a) The Board of a State Cooperative Bank shall be superseded with the prior approval of the Reserve Bank.

(b) The Board of a primary agricultural credit Society shall be superseded by the Registrar only under the following conditions:-

(i) that a society incurs losses for three consecutive years; or

(ii) that serious financial Irregularities or frauds have been identified; or

(iii) that there are judicial directives to this effect; or (lv) there is perpetual lack of quorum.

Explanation:- "perpetual lack of quorum" means failure of holding three consecutive meeting for want of quorum.

(c) A member of the Board of a primary agricultural credit cooperative society which has been superseded under sub clauses (i) and (li) of clause b of SUb-section

(6) of Section 39 shall not be entitled to contest again for a period of three years after supersession".

17. In sub-section (1) of section 42, after the words, "due to a society by any member" and before the words including a passed or deceased member the words 'or the surety of any member of a society' shall be inserted, and after the words "deceased members and before the words shall be a first charge the words 'and or surety thereof' shall be insertec;

18. In the principal Act, in clause (a) of section 55 the following provisos shall be inserted, namely;-

"Provided that the State Government's subscription to the equity share capital of a cooperative credit structure society shall

6

of Section 57. Amendment

of Section 58. Amendment

of Section 59. Amendment

of Section 60. not exceed twenty five percent of its equity share capital and the State government or the cooperative credit structure entity may r~duce the State Government's subscription further at its choice:

"Provided further that in case of a State Cooperative Bank which is unable to comply with the requirements of sub-section

(1) of Section 11 of Banking regulation Act, 1949(Central Act 10 of 1949), the State Government can contribute equity only to the extent required to enable a State Cooperative Bank to comply with the requirements of sub-section (1) of Section 11 of Banking Regulation Act, 1949, (Central Act, 10 of 1949)".

19. In the principal Act, in section 56, - (i)for the existing sub-section (1), the following sub-section shall be substituted, namely:-

(1) 'A society shall have autonomy in formulating its own personnel policy including recruitment and compensation to the staff' .

(ii) in sub-section (2) the following proviso shall be inserted, namely:-

'Provided that the provisions of this sub-section shall not apply to a cooperative credit structure society'.

20. In the principal Act, section 57 shall be renumbered as sub-section

(1) of that section and after the sub-section (1) as so renumbered the following sub-section shall be inserted, namely:-

(2) 'Notwithstanding anything contained in SUb-section (1), a primary agricultural credit society shall pay a dividend to its members in accordance with the guidelines laid down by the Registrar in consultation with the National Bank'.

21. In the principal Act, in Section 58 the following proviso shall be inserted, namely:-

'Provided that the ::>rovisions of this Section shall not be applicable to a cooperative credit structure society'.

22. In the principal Act, in section 59 the following proviso shall be inserted, namely:-

'Provided that the provisions of this Section shall not be applicable to a cooperative credit structure society'.

23. In the principal Act, in sub-section (1) of section 60,-

(i) for the existing clause (e) the following clause shall be substituted, namely:-

"(e)with any bank or Reserve Bank regulated financial institution of its choice;'

(ii ) clause (f) shall be omitted;

(iii) after clause (g) the following proviso shall be inserted, namely:-

7

of Section 62. 'Provided that while making investments, a State Cooperative Bank will follow guidelines stipulated by Reserve Bank:

24. In the principal Act, in section 61,-(1) in sub-section (1), the words 'with the general or special sanction of the Registrar'; shall be omitted;

(2) after the first proviso the following proviso shall be inserted, namely:-

'Provided further that the cooperative credit structure society may take appropriate decision regarding its loan policies including individual loan decision to its member, keeping in view the Interest of the society and its members'.

(3) after sub-section (2); the following new sub-section shall be inserted, namely:-

U(3) (a) An individual or group depositor in a primary agricultural credit society shall become amember of the society under sub-section

(1) of Section 20 by subscribing at least the minimum share capital specified in the bye-laws and on holding a minimum deposit as may be prescribed by the Government from time to time for a continuous minimum period as may be prescribed preceding the date of notification of election shall have full voting rights.

(b) An individual or a group borrower shall become a member of a primary agricultural credit society under sub-section (1) of Section 20 by subscribing the prescribed share capital specified in the bye-laws and shall have full voting rights.

(c) Every group depositor or group borrower admitted as a member under SUb-section (1) of Section 20 shall be entitled to vote through one delegate nominated by the group:

Provided that a depositor member of a primary agricultural credit society shall be eligible for loans on par with other members.

"(4) 'The prudential norms including Capital to Risk Weighted Assets Ratio shall be prescribed by the Registrar for all the primary agricultural credit societies in consultation with the National Bank."

25. In the principal Act, Section 62 shall be renumbered as sub-Section(1) of that section and after the sub-section (1) as so renumbered the following sub-sections shall be inserted, namely:-

(2) Notwithstanding anything contained in sub-section (1), a cooperative credit structure society shall have freedom to raise loan from any bank or Reserve Bank regulated financial

8

of Section 64. Amendment

of Section 71. institution, refinance from National Bank or any other refinance agencies directly or through any institution of its choice and not necessarily from only the society to which it is affiliated.

26. In the principal Act, in section 63, after the words

"Transactions of a society" and before the words "with any person" the words 'except State Cooperative Bank' shall be inserted.

27. In the principal Act, in section 64,(i) in sub-section (1),the following clauses shall be inserted, namely:-

(a) A primary agricultural credit society shall get its accounts audited at least once in each year by the Registrar or by a person authorized by him by general or special order in writing in this behalf or by a Chartered Accountant appointed by its committee.

(b) Notwithstanding anything contained in sub-section (1), the accounts of a State Cooperative Bank shall be audited and certified by Chartered Accountants appointed by its committee from the panel approved by the National Bank.

(c) The Registrar shall get conducted a special audit of a State Cooperative Bank on the request of the Reserve Bank in the manner and form stipulated by the Reserve Bank and shall endorse a copy of the report of such special audit to the Reserve Bank and National Bank within the time stipulated by the Reserve Ban~ .

(ii) In sub-section (5), after the words, "under sub-section (1) and before the words "to audit the accounts", the words 'or the auditor or chartered accountant appointed under clauses (a) (b) and (c) shall be inserted.

28. In the principal Act, in section 71,(i) in sub-section (1), before the words where the course of an audit, the words 'Except in case of Cooperative credit structure society'; shall be inserted.

(ii) after sub-section (3) the following sub-sections shall be inserted, namely:-

(4)The Registrar shall ensure that Reserve Bank's regulatory prescriptions in the case of a State Cooperative Bank including recommendation for super session of the committee or winding up of a State Cooperative Bank and appointment of the Administrator or the Liquidator, as the case may be, are implemented within one month from the date of receipt of the advice from the Reserve Bank.

(5) The Registrar shall, within two months of being advised by the Reserve Bank or the National Bank, ensure removal of Chief Executive Officer of a State Cooperative Bank who does not fulfill eli'gibility criteria specified by the Reserve Bank.

9

of Section 89. Amendment

of Section 90.

(6) The Registrar shall, within two months of being advised so by the Reserve Bank or the Nation Bank, ensure removal of any person elected or co-opted as a member of the Board under sub-section (1A) of Section 90 without having the requisite knowledge or experience as stipulated by the Reserve Bank.

29. In the principal Act, in sub-section (4) of section 88, the words, 'or outside Sikkim' shall be omitted and for the words 'the previous sanction of the Registrar' the words 'the approval of RBI' shall be substituted,

30. In the principal Act, section 89 shall be omitted.

31. In the principal Act, for the existing section 90 the following shall be substituted. namely:- "90 (1)The Board of a State Cooperative Bank shall consist of 11 members of whom 1 shall be nominated by the Government,S shall be representatives of primary agricultural credit societies of which 1 shall be woman representative elected from amongst the women Presidents of primary agricultural credit societies and if no such woman is elected one Woman Director having some experience and background about

cooperative to be co-opted by the Board of the Directors of the State Cooperative Bank, and one shall be representative of members other than societies to be elected or nominated as per the byelaws of the Bank, and a Managing Director.

(2) There shall be at least such number of professionals having special knowledge or experience in such fields as may be stipulated by the Reserve Bank on the committee of a State Cooperative Bank and in case such number of elected directors do not, in the opinion of Reserve Bank or National Bank, possess special knowledge or experience in such fields as may be stipulated by the Reserve Bank, the Committee of a State Cooperative Bank shall co-opt such number of professionals with full voting rights irrespective of-

(i) the limit on the number of members of the committee under this Act or rules framed there under or its byelaws,

(ii) whether such professional is a member of the society or not.

(3) NotWithstanding anything contained in this Act, the Chief Executive Officer and the members of the committee of a State Cooperative Bank shall fulfill the criteria stipulated by the Reserve Bank for the time being in force and such person who, in the opinion of the Reserve Bank or the National Bank, does not fulfill the criteria stipulated by the Reserve Bank shall be removed on advice of the Reserve Bank or the National Bank.

10

of Section 101. Amendment

of Section 111.

32. In the principal Act, section 96 shall be omitted.

33. In the principal Act, (i) in section 96A (i); the words 'subject to the provisions of section 89' shall be omitted".

(ii) the sub-section (2) of section 96A shall be omitted.

34. In the principal Act, in section 101, (i) in sub-section (2)for the words

"two hundred rupees" the words 'Five thousand rupees' and for the words and figure "rupees 25" the words "rupees one hundred" shall respectively be substituted.

(li) in sub-section (3) for the words "two hundred rupees" the words

"five thousand rupees" shall be substituted; (iil) in sub-section (4) for the words "two hundred rupees", the words "two thousand rupees" shall be substituted;

(iv) in sub-section (5) for the words 'five hundred rupees' the words 'five thousand rupees' and for the words and figure' Rs. 25 the words "rupees one hundred" shall respectively be substituted;

(v) in sub-section (6) for the words 'two hundred rupees' the words two thousand rupees shall be substituted;

(vi) in sub-section (7)for the words 'two hundred rupees' the words two thousand rupees shall be substituted;

(vii) in sub-sections (8) and (9), for the words five hundred rupees wherever they occur the words five thousand rupees or 10% of the share money collected whichever is less' shall be substituted;

(viii) in sub-section (10) for the words one thousand rupees the words ten thousand rupees shall be substituted.

35. In the principal Act, section 111 shall be renumbered as sub-section

(1) of that section and after the sub-section (1) as so renumbered the following sub-section shall be inserted, namely:-

(2) No cooperative credit structure society shall be exempted by the Government from the application of the provisions of this Act without the prior approval of the Reserve Bank or the National Bank.

By Order.

R.K. PURKAYASTHA (SSJS)

LR-cum-SECRETARY Law Department

File No. 16 (82)/ LD/P/2009

46

GOVERNMENT GAZETTE

EXTRAORDINARY

PUBLISHED BY AUTHORITY

Gangtok Thursday 22nd April, 2010 No. 171

GOVERNMENT OF SIKKIM

LAW DEPARTMENT

GANGTOK

No. 5ILDIP12010 Date: 21.4.2010

NOTIFICATION

The following Act passed by the Sikkim Legislative Assembly and having received the assent of the Governor on the 30^th

day of March, 2010 is hereby published for general information:-

THE SIKKIM COOPERATIVE SOCIETIES (AMENDMENT) ACT, 2010

ACT NO.5 OF 2010

AN ACT

further to amend the Sikkim Cooperative Societies Act, 1978.

Seit enacted by the Legislature of Sikkim in the Sixty-first Year of the Republic of India as follows:-

Short title and commencement

1. (1) This Act may be called the Sikkim Cooperative Societies (Amendment) Act, 2010.

(2) It extends to the whole of Sikkim.

(3) It shall come into force at once.

Amendment of Section 117

2. In the Sikkim Cooperative Societies Act, 1978, sub-section (1) of section 117 shall be omitted.

R.K. PURKAYASTHA (SSJS)

LR-cum-Secretary Law & Parliamentary Affairs Department s.G.P.G. -171/GazetteifOOCps.l22.04.20fO

47

GOVERNMENT GAZETTE

EXTRAORDINARY

PUBLISHED BY AUTHORITY

. Gangtok Saturday 30^th

April, 2011

No. 220

GOVERNMENT OF SIKKIM

LAW DEPARTMENT·

GANGTOK

No. 3/LD/P/11

Dated: 26/04/2011.

NOTIFICATION

The following Act passed by the Sikkim Legislative Assembly and having received the assent of the Governor on 30^th

day of March, 2011 is hereby published for general information:-

THE SIKKIM COOPERATIVE SOCIETIES (AMENDMENT) ACT, 2011

(ACT NO.3 OF 2011)

AN

ACT

further to amend the Sikkim Cooperative Societies Act, 1978.

Be it enacted by the Legislature of Sikkim in the Sixty-second Year of the Republic of India as follows:-

Short title and 1. (1) This Act may be called the Cooperative Societies (Amendment)

commencement Act,~011.

(2) It shall come into force at once.

Amendment of 2. ^lritheSikkim Sikkim Cooperative Societies^Act,1978, herein after

section 26

referred^{toasthesaidAct,in}section^26;forthefigure^andthewords, 'Rs. 1.00 (one) lakh', the figure and the words '5% of the total Paid-Up Share Capital' shall be substituted.

Insertion of new 3. ^{InthesaidAct,}after section^26,thefollowing^newsection^'26A',shall

section 26 A be inserted namely:-

48

'26 A The Urban Cooperative Bank (s) after registration. in addition to raising share capital from its/their individual members may also issue Preferential Shares of the following types. namely:-

(i) Perpetual Non-Cumulative Preferential Shares (PNCPS);

(ii) Perpetual Cumulative Preferential Shares (PCPS);

(iii) Redeemable Non-Cumulative Preferential Shares (RNCPS);

(iv) Redeemable Cumulative Preferential Shares (RCPS):

Provided that the Urban Cooperative Banks shall not be entitled to subscribe the Preferential Shares of other Urban Cooperative Bank (s).' R.K. Purkayastha, (SSJS)

L. R-cu m-Sec reta ry

Law Department.

File 16 (82) LD/P/77-11

S.G.P.G. - 220/ Gazette/3D Cps./ 30.04.2011

49

, T_h_,_u_rs_d_a_y~2_0th J ;~!le,"._~~~3

LAW DEPARTIVIENT

GOVERNMENT OF SIKKIM

GANGTOK

No. 296 No. 06/LD/P/13 Dated: 11.06.2013

NOTIFICATION

The following,Act passed by the Sikkim Legislative assembly and IJaving received the assent of the Governor on 18th day of May, 2013 is hereby published for general information:-

THE SIKKIM COOPERATIVE SOCIETIES (AMENDMENT)

ACT,201:~

ACT NO. 6 01: 2013

AN

ACT

further to amend the Sikkirn Cooperative Societies Act, 1978. Be it enacted by the Legislature of Sikkim in the Sixty-fourth Year of India as follows:-

and

This Act may be called the Sikkim Cooperative Societies,

(Amendment) Act, 2013.

It extends to the whole of Sikkirn,

It shall come into force at once,

Short title, extent 1. (1)

commencement (2)

(3)

Amendment of

section 2,

2. In the Sikkim Cooperative Societies Act, 1978,(hereinafter referred to as 'the said Act'); in section 2,-

(i) after clause (b), the following clause shall be inserted, namely:-

"(bb) 'Board' means the Board of Director or the governing body of a Cooperative Society, by whatever name called, to which the direction and control 01the management 01the afiairs of a society is entrusted to,"

(ii) after clause (v), the following clause shall be inserted, namely:-

"(vv) 'State Level Cooperative Society' means a Cooperative Society having its area of operation extending to the whole of the State,"

50

of

section 32.

Amendment of

section 34.

Amendment of

section 35.

3, III^thesaid^Act,alter sub-section (3) 01 ~;ec\iorl^21,tilefOlloWing sub-section shall be inserted, namely:

"(4) A member who tails to atteno a minimum number of meetings of the Society 01' to participate in its activities by availing a minimum quantum of its services, as may be specified ill its bye-laws, shall be disqualified from continuing as a member and shall cease to be a member from that day a declaration to that effect is made by CI resolution passed by tlte General Body meeting."

4. In the said Act, in section 26:-

(i) for the words and figure 'such portion of the total share capital of the Society which exceed one-fifth thereof or Rs.20,OOO/- whichever is less except in case of Urban Cooperative Bank where the maximum ceiling will be Rs.1.00(one)lakh', the words and figure, '5% of the total paid-up share capital' shall be substituted;

(ii) the proviso shall be omitted.

5. In the said Act, after section 29,a section shan be inserted, namely:-

"29A Every member of a SOCiety shall have access to its account books and other connected record and information kept in respect of transactions with that member; and the Chief Executive shall make arrangernents for tile inspection of such records and documents by the member .jll his request."

6. In the said Act, in sub-sectionrt) of section 32, for the words. 'alter the date fixed for making up its accounts for tile cooperative year under tile rules tor the time being in force' the words, 'Irom the closing of the cooperative year', shall be substituted.

7. In the said Act, after sub-section (1) of section 34, the following sub-sections shall be inserted, namely.-"

"(1 a) The election of a Board shall be conducted before the expiry of the term of the board so as to ensure trial the newly elected members of the Board assume office immediately on the expiry of the ofiice of members of the outgoing Board;

(1b) The Board shall consist of such number of Directors as may be prescribed by the bye-laws:

Provided that the maximum number of Directors s' a Cooperative Society shall not exceed twenty-one members.

(1c) One seat for the Scheduled Castes or the Scheduled Tribes and two seats for women on Board of every CO[Jr:\~rative Society consisting of individuals as members shall be kept reserved to be filled by members from such class or category of persons."

B. In the said Act, in section 35,

(i) for the word 'three', me word 'five', shall be substituted;

2

, Provided further that the Board may fill a casual vacancy on the BOclrd by nomination out of the same class of members in respecl of which the casual vacancy has arisen, if the term of office 01 tile Board is less than half of its original term,'

Amendment of 9. In the said Act, after sub-section (3) of section 38, the following sub-section section 38. shall be inserted. namely:-

'(4) The board shall co-opt certain persons to be members of

the board who may be having experience in the field of banking.

management, finance or specialization in any other field relating

to the objects and activities undertaken by the Cooperative

Society:

Provided that the number of such co-opted members

shall not exceed 2(two) in addition to 21 (twenty-one) directors

and these members shall not have the right to vote in any

election of the Cooperative Society in their capacity as such

member or be eligible to be elected as office bearers of the

Board:

Provided further that tile functional directors of a

Cooperative Society shall also be the members of the Board

and such members shall be excluded for the purpose of counting

the total number of directors specified in the proviso to sub-

section (1b) of section 34.'

Amendment

of section 39.

10. In the said Act, after clause (c) of sub-section (6) of section 39,following shall be inserted, namely:-

'(d) The Board of other Cooperative Societies except as

mentioned in clause (b) above, the Board may be superseded

or kept under suspension in case-

(i) of its persistent default; or

(ii) of negligence in the performance of its duties; or

(iii) the Board has committed any act prejudicial to the interest of the Cooperative Society or its members; or (lv) there is stalemate in tne constitution or functions of the Board; or

(v) the authority or officers as provided under sub-section

(1) of section 34 has failed to conduct elections in accordance with the provisions of the Act:

Provided that the Board of any such Cooperative Society shall not be superseded or kept under suspension

3

Section 55 "(g) The State Government shau take steps for the education and training of members of Societies in Cooperative matters and

shall make an annual contribution to the State Cooperative

Union which shall be expended ill providing training and on

information, education and comrnunication activities to educate

the public in various aspects of cooperation"

Amendment of 12. In the said Act, in section 64,

section 64. (i) In clause (a) of sub-section 1, for the words 'A primary agricultural credit society' the words, 'AII cooperative societies' shall be substituted, and after the words 'by its committee' the

words 'from the panel of Chartered Accountants maintained

by the Government' shall be inserted;

(ii) after clause (C),tI18 following clauses shall be inserted, nameiy-;

"(d) The accounts of every Cooperative Society shall be audited within 6(six) months of the close of the financial year to which such accounts relate.

(e) The audited annual statement of accounts of each apex society, alongwith the observations of the auditors thereon, if any, shall be laid before the Legislative Assembly for one full session."

Insertion of

section64 A

'Societies to

furnish returns'

13. In the said Act, after section 64, a new section shall be inserted namely;-

"64A Every Society shall furnish to the prescribed authority, within 6(six) montns from tne close Of eacn cooperative year;-

(a) a report on its activities during the year:

(b) an audited statement of Accounts for ttle year;

(c) its plan for disposal of surplus generated dUring the year approved by the General Body;

(d) a statement of amendments made to the Byelaws:

(e) a declaration regarding holding general body meeting and conduct ot elections, if due; and

(f) Any other report prescribed under the rules and other information as required by tile Registrar under tile provisions of the Act."

Amendment

of

section 117

14. In the said Act, in section 117,the following shall be inserted, namely:-

'(1) The Government may, for the whole or any part of the State of Sikkim and for any class of societies, make rules to carry out the purposes of these Act.'

R. K. Purkayastha

Advisor-cum-Principal Secretary,

Law & Parliamentary Affairs Department.

S.G.P.G. ·2961 Gazetlel 30 Cps./ 20.06.2013

THE SUBSEQUENT AMENDMENTS TO THE SIKKIM CO-OPERATIVE SOCIETIES ACT, 1978 (ACT NO. 12 OF 1978) AMENDED AND UPDATED UPTO JUNE, 2013

53