Assam act 001 of 1950 : The Assam Co-operative Societies Act, 1949

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ASSAM ACT 1 OF 1950

*THE ASSAM CO-OPERATIVE SOCIETIES ACT, 1949

(Received the asses! c ! the Governoir-GewerHl on the 25th January, 1950.)

[Published. In the Assam (Jajtfie of the 8th February 1950 ] An

Act to Lsdlitak- Che form itoii ss.d working of Cooperative Societies ...id to eonsoiidaie and r.meiid ike Saw relating to Co-operative Societies m the Province of Assam

Preamble.-—Whereas it • expedient further to facilitate the formation and working of Co-operative Societies for the purpose of thrift, self-help, mutual aid and creating the quality of creait worthinc .s among agriculturists, artisans and other persons with commoi economic needs so as to bring about a higher standard of living, better busim better memo;.; of production, equitable distribution and exchange and for that purpose to consolidate and amend the law relating to Co-operative Societies in the Province of Assam, it is hereby enacted as follows—

CHAPTER I

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(j) "Managing Body" means the body to which the management of affairs of a registered society is directly entrusted and does not include . Administrative Council;

(k) "Member" means a person admitted to membership after registrat in accordance with the bye-laws and rules of the society and includes a promot

(l) "Office-Bearer" means a member duly elected by the appropriate hi, of a registered society, according to its bye-laws, to any office of su society, including the office of President, Chairman, Vice-Presid|L Vice-Chairman, Secretary, Managing Director and Treasurer ; provided that an; officer appointed by Government to hold charge of any office of a registered society shall be deemed to be an office-bearer unless specifically stated to the contrary; ,^;a

(m) "Prescribed" means prescribed by rules ;

(n) "Promoter" means any eligible person or registered society signing th application for registration of a society ;

(o) "Registered Society" means a Co-operative Society registered or deem ed to have been registered under tins Act and includes a society formed after amaj gamation of such two or more societies or by division of such an existing society

(p) "Registrar" means a person appointed to perform the duties of Registrar of Co-operative Societies under this A c t;

(q) "Rules" means rules made under this A c t; and

(r) "Signature" includes the thumb-impression of an illiterate person, maj

CHAPTER II

Registration of Societies

3. The Registrar.—(1) The [State]¹Government may appoint a person t< be Registrar of Co-operative Societies for lhe [State]²or any portion of it foj the registration, supervision, assistance, counsel and control of registered societies and for the development of the co-operative movement and control over co-operative education and with such other powers and responsibilities as be provided under this Act or rules or bye-laws framed thereunder.

(2) The [State]¹Government may also appoint persons to assist Registrar and may by general or special order, in writing, delegate to any persons or to any other Government Officer all pr any of the powers of Registrar under this Act. *

(3) The [State]¹Government may- also appoint non-official helpers the

such

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such designations and functions as prescribed to aid in the organisation of Co- operative Societies.4. " ................................................... - - . - - ..........................i Societies which may be registered.—Subject to the provisions hereinafter contained a society which has as its chief object the promotion of the economic

interests and general welfare of its members in accordance with co-operative;

principles, or a society established with the object of facilitating the operations;

pf such a society including a society formed by the division of an existing registered

society or amalgamation of existing two or more societies, may be registered

under this Act with or without limited liability :

Provided that unless the [State]¹Government by general pr special order

otherwise directs:—

(1) The liability of a society of which a member is a registered society; shall be limited.

(2) The liability of a society of which the primary object is the creation

of funds to be lent to its members, and of which the majority of the members are agriculturists or artisans, and of which no member is a registered society, shall 'Substituted by the A.O., 1950 for "Provincial". I

Substituted by the A.O., 1950 for "Province".

be unlimited and the members of such a society shall on its liquidation, be jointly and severally liable for and in respect of, all obligations of such a society :

Provided further that no society shall be registered if in the opinion of the

•Registrar, its declared objects are unlikely to be achieved or if it is economically 'unsound or if it may have an adverse effect upon any registered society or the co-operative movement as a whole.

5. Age qualification of a member.—No person may be an individual

•member of a registered society unless he is above eighteen years of age; provided that the bye-laws of a society may prescribe a higher minimum age. | 6. Conditions of registration.—(1) No society, other than a society of which a member is a registered society shall be registered under this Act which does not consist of at least ten eligible persons and, in cases where the primary object of the society is the creation of funds to be lent to its members, unless such ^persons reside in the same town, village or in the same Panchayat Area ;

(2) The word "Limited" shall be the last word in the name of every society With limited liability registered under this Act.

7. Restrictions on acquisition of shares in a society.—(1) No member of a

registered society shall hold more than such portion of the share capital of the society as may be prescribed by the rules, or the bye-laws of the society.

(2) No member shall be allowed to acquire an additional share until he has .paid in full the value of the whole or that portion of his share-holding which he is required to pay in accordance with the bye-laws of his society.

8. Power of Registrar to decide certain questions.—All disputes regarding membership for the purpose of the formation, registration or continuance of a

Society under this Act 'shall be decided by the Registrar.

9. Change of liability.—(1) Subject to the proviso to section 4 and to any

•fiiles made in this behalf, a registered society may, with the previous sanction of the Registrar, change its liability from limited to unlimited or from unlimited to 'limited :—

|. Provided that—

(i) The society sfrall give notice in writing of its intention to change its .liability to all its members and creditors.

(ii) Any member or creditor shall, notwithstanding any bye-law or con- ta c t to the contrary, have the option of withdrawing bis shares, deposits or loans, fas the case,may be, within three months of the service of such notice on him 'and the change shall not take effect until all such claims have been satisfied ; '■wid

(iii) Any member or creditor, who docs not exercise his option within the jperiod aforesaid, shall be deemed to have assented to the change.

(2) Nothwithstanding anything contained in the proviso to sub-section (1) Ke change shall take effect at once if all the members and creditors assent thereto.

(3) The Registrar shall register the amendment of the bye-laws consequent on the change of liability; provided that no person who ceases to be a member ■ipf the society before such amendment is registered shall be adversely affected by Hhe change of liability.

10. Application for registration.— (1) An application for registration shall be ■made to the Registrar in the prescribed Form.

(2) The application shall be signed— | (a) in the case of a society of which no promoter is a registered society, by bat least ten eligible persons; and

(b) in the case of a society of which at least one promoter is a registered ^Society, by a duly authorised person on behalf of such registered society and at Peast one other individual promoter or one other duly authorised person on behalf of another registered society.

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money which they have undertaken to subscribe with effect from the date of regis-,,:

11.

(3) The application shall be accompanied by four copies of the proposed; bye-laws of the society signed on behalf of the promoters by the president of the; inaugural general meeting. Promoters by whom or on whose behalf such appli-d cation is made shall furnish such, information in regard to the society as thy Registrar may require and they shall be liable to the full extent of the share ̂ i . ' ' ' . ' ............................... . ■ < ■

tration of the society. j

Registration.— (1) The Registrar shall decide all questions as to whethet^ the application complies with the provisions of this Act and rules thereunder and.j whether the objects of the society are in accordance with section 4.

(2) When he is satisfied that the application is in order under sub-section (1)] and the proposed bye-laws are not contrary thereto, he may register the socie™ and its bye-laws ; provided that the Registrar shall have powers to register the-.] bye-laws with such modifications as he thinks are necessary to bring about unifora mity in the main with the provisions of the bye-laws of societies which haye~i similar objects or functions.

(3) The Registrar shall endorse the bye-laws in token of registration. Eachj society shall have a copy of its bye-laws so endorsed.

(4) If the Registrar refuses to register a society or an amendment of the 1 bye-laws of a registered society he shall record his reasons in writing and commu® nicate these reasons and his decision to the promoters or the Secretary of a | registered society by a registered letter to their office, he Registrar may at any 1 time review his orders in this respect.

12. Evidence of registration.—A certificate of registration signed by tlieJ Registrar shall be issued to the society and shall be conclusive evidence that the I Co-operative Society therein mentioned is a Co-operative Society duly registered J under this Act and that its bye-laws are as attached to the certificate, unless it is 3 proved that the registration of the society has been cancelled or that amended! bye-laws have been registered or that the society's copy of the certificate or bye-jpa; laws has been tampered with. Jo

13. Amendment of the bye-laws of a registered society.—(1) No amendment w of the bye-laws of a registered society, whether by way of addition, al ternation,wliK omission, rescission or change of name shall be valid until such amendment has^B been registered under this Act.

(2) Every proposal for such amendment shall have to be approved by ad * resolution at a meeting of the General Assembly in accordance with the bye-lawsa® of the society and be forwarded within a month from the date of the resolution® to the Registrar; and if the Registrar is satisfied that the proposed amendment® is not contrary to the provisions of this Act or rules, he shall, unless for reasons.® to be recorded in writing he considers fit to refuse, register the amendment. B

(3) When the Registrar registers an amendment of the bye-laws of a t registered society, he shall issue to the society a copy' of the amendment certified B by him, which shall be conclusive evidence that the same has been duly registered, B unless it is proved that the registration of the society has been cancelled or that 1 further amendments have been registered or that the society's copy of the amend-® ments have been tampered with. The amendment shall be binding upon the® society with effect from the date of registration. ,®

14. Power of Registrar or affiliating society to direct amendment of bye-® laws or adoption of nd.es of procedure.—(1) (i) When it appears to the Registrar® that an amendment of the bye-laws or a registered society is necessary in the 1 interests of such society or of the co-operative movement as a whole or for the® purpose of bringing about uniformity in the main with the provisions of the 1 bye-laws of societies which have similar objects or functions, he may, by an order! in writing, direct the society to amend its bye-laws in accordance with the amend- J

ment drafted and forwarded to the society by him within such time as he may j specify in the order.

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(ii) If the society fails to make such amendment within the time specified, ■he Registrar shall, alter giving the society an opportunity of representing its Base, make such amendment himself and register the same. The Registrar shall ■then forward a copy thereof to the society together with a certificate signed by liiin which shall be effective as prescribed in section 13(3).

(iii) The Registrar shall not register any amendment of the bye-laws of 1 society, whether under this section or section 13 of this Act, without the consent

Id the [State]¹Government, if the effect of such amendment is to lessen the liegree of control of the Government or of the Registrar as already provided ■or in the bye-laws.

(iv) The Registrar may require any registered society to frame rules of Procedure under its bye-laws to govern any part of its business and to send such ■rules to him for prior approval.

(2) (i) When it appears to an affiliating society that an amendment of the liye-laws of a registered society which is a member and debtor of such society,

CHAPTER III

convcyan draft bye-laws shall apply to the Registrar under section 10 for registration of the new societies and the Registrar shall register the societies under section 11

(vii) The Registrar shall not register the new societies if the application for registration is not accompanied by a certificate of repayment of share capital to members and certificate of satisfaction of claims to creditors referred to in clause (iv).

(viii) From the date on which the new societies are registered und clause (vi) the registration pf the old society shall be deemed to have been can:

celled.

(ix) The registration of the new societies shall be a sufficient conveyane to vest the assets and liabilities of the original society according to the aforesaij resolution in the new societies.

(2) (i) Two or more registered societies may, at a meeting of their respect! General Assemblies specially convened for the purpose, by giving at least fifte clear days' notice to the respective members of the societies, resolve to amalg mate into one society by adopting common bye-laws.

(ii) A copy of such resolution of each society shall be circulated forthwith among all members and creditors thereof.

(iii) Notwithstanding any bye-laws to the contrary, any member of an such societies and, notwithstanding any agreement to the contrary, any credit of any such societies, may within a period of thirty days from the receipt of t aforesaid resolution, intimate his intention not to become a member of the net society, in the case of a member, and to demand a return of the amount due. him, in. the case of a creditor.

(iv) After the expiry of ninety days from the date of the aforesaid res® lution, a joint meeting of the members of such societies shall be convened t« decide finally the aforesaid resolution.

(v) At least fifteen clear days' notice shall be given to all the members the societies. If at such meeting the aforesaid resolution is confirmed by a maj# rity of three-fourths of the members of each society present and the common by laws are accepted with or without any alterations, the Registrar shall be move by an application under section 10 for registration and he shall register the ne! society under section 11 if he approves.

(vi) The Registrar shall not register the new society if the application fc registration is not accompanied by a certificate of repayment of share capital to members and a certificate of satisfaction of claims of creditors referred to is

clause (iii).

(vii) From the date on which the new society is registered the registratic of the old societies shall be deemed to have been cancelled.

(viii) The registration of the new society shall be a sufficient to vest in it all the assets and the liabilities of the original societies.

Rights and Liabilities of members of Registered Societies conditio)

of a m

16. Member not to exercise rights till due payment made and fulfilled.—No member of a registered society shall exercise the rights ber unless or until he has made such payment to the society in respect of membi ship or acquired such interest in the society, as may be prescribed by the rules bye-laws.

17. Votes of members.—(1) Irrespective of the shares he holds in society and subject to any temporary disqualifications from voting which may prescribed in bye-laws and to the provisions of section 31(2)(b) relating to vofii

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it:

If

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Eby representatives, a member of a registered society shall have one vote only in ■the allairs of the society:

Provided that in the case of an equality of votes the Chairman at any meeting ■shall have a second or casting vote :

I Provided further that the bye-laws of a society may provide for more than one ■vote in the case of an affiliated society.

(2) A registered society which is a member of another registered society ■may appoint one of its members qualified under any rule or bye-laws to vote in ■the affairs of such other society as its representative.

(3) Voting by proxy shall not be allowed except as prescribed in a registered ■society's bye-laws ; Provided that in registering the bye-laws of a society the ■Registrar shall not permit voting by proxy except in cases, such as those involving

■ a wide area of operation, where it would be difficult for members to exercise their .■right to vote if voting by proxy were not permitted.

18. Member of unlimited society to furnish information as to his financial ■position.— (1) A full, true and accurate statement of his assets including his immo- ■vable property and liabilities shall be furnished—

(a) by an applicant for membership of a registered society with unlimited ■liability, together with his application,

(b) by a member of a registered society with unlimited liability when ■required to do so by the Registrar or any person authorised by him in this behalf ■or by the affiliating society.

■ (2) No member of a registered society with unlimited liability shall be a ■member of more than one such society.

■ (3) A member of a registered society with unlimited liability shall furnish to ■the society full, true and accurate information regarding his intention to transfer ■his immovable property, in whole or in part by way of sale, mortgage or gift at least ■fifteen days before completion of each such transaction.

19. Loan to be utilised for the purpose for which advanced.—The loan ■ advanced by a registered society to a member thereof shall be utilised by him for 1 the purpose for which it was advanced and for no other purpose. The society j shall have power to recover the advance as prescribed if the member does not so | utilise it.

20. Restrictions on transfer of share or interest.— (1) The transfer or charge

• of the share or interest of a member in the capital of a registered society, shall be j subject to such conditions as to maximum holding as may be prescribed by this Act or by the rules.

(2) Except as otherwise provided in this Act no transfer or charge of his share or interest by a member of a society with unlimited liability shall be valid unless :—

(a) he has held such share or interest for not less than one year ; and

(b) the transferee or mortgagee is cither a member of such society or a person whose application for membership hag been accepted.

21. Liability of past member and his estate.—(1) The liability of a past ' member and of the estate of a deceased member for the debts of a registered society as they existed at the date of his ceasing to be a member or of his death, as the case may be, shall continue for a period of four- years from the said date.

(2) No past member of a registered society with unlimited liability shall be

eligible for membership of another such society with unlimited liability except with the special permission of the Registrar.

22. Share or interest not liable to attachment.—Notwithstanding anything contained in any law for the time being in force but subject to the provision of section 44 of this Act, the share or interest of a member in the capital of a registered society or in any fund under section 53 shall not be liable to attachment or sale

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under any decree or order of a court in respect of any debt or liability incurred such member nor be subject to any claim by a receiver under the Provincial Ins vency Act, 1920 (V of 1920).

23. Nomination of transferee.—If the bye-laws of a registered society permit, any member of the society may, in accordance therewith nominate a persi or persons in whose favour the society shall dispose of the shares or interests such member on his death.

24. Transfer of interest on death of member.—When a member of a registe society dies his shares and interest in the society shall, subject to the provisions this Act, be transferred—

(a) to the person, if any, nominated in accordance with the provision section 23 ; or

(b) if there be no such nominee or if the nominee is not available or:

difficult to be ascertained by the managing body, or if for any other cause sa transfer cannot be made without unreasonable delay or difficulty, to the persons may appear to the managing body to be the heir or legal representative of ti deceased member; provided that ninety days have elapsed from the date of member's death. No new claim shall be entertained after the said period of nine days.

25. Disposal of shares or interest of ceased members.—When a member oh registered society is expelled or withdraws or otherwise ceases to be a meml under this Act, rules or bye-laws his share or interest shall be transferred 1 another eligible person, and the value thereof, determined in accordance with ti rules, shall be paid to such ceased member if his share or interest is not f< under the provisions of this Act, rules or bye-laws or if he is insane, to any , appointed to manage his properties under the Indian Lunacy Act, 1912 (IV 1912) ; provided that if there is no eligible transferee and if die bye-laws of t society so provide the value of his share or interest determined in accordance wi the bye-laws shall be paid to him or, if he is insane, to any person appointed i manage his properties under the Indian Lunacy Act, 1912.

26. Liability of members on winding up of society.—The members of a regi tered society shall in the winding up of the society, be jointly and severally liable contribute towards any deficiency in the assets of the society—

(a) in the case of a society with unlimited liability without lim it; and

(b) in the case of a society with limited liability, subject to such limitati of amount as may be provided in the bye-laws.

27. Restriction on transfer of possession of land held under a society!

Notwithstanding anything in any law for the time being in force—

(1) a member of a registered society, the object of which is to develop operative or Collective farming, shall not be entitled to transfer his possession $ interest in any land held by him under the society, except to the society or with the previous approval of the managing body and in accordance with its bye-laws, to"

member thereof or to a person who will be admitted as a member of the societi

(2) on the death of such a member, his possession of and interest in, anj such land held by him under the society shall come to his nominee in accordai with the provisions of section 23 or in the first eligible heir according to seniojj in age willing to become a member of the society ;

(3) if no nominee or heir becomes a member the possession of and intercs in, such land of the deceased, shall vest in the society, which shall pay to the r nee or the heir, a sum equivalent to the value of the share and interest of deceased member and any other sum due from the society as determined in accord ance with this Act or rules framed thereunder after deducting all dues which ti deceased member owned to the society ;

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(4) if there is no person qualified to succeed to the share or interest of the deceased member the society shall pay to his heir, executor or the legal representa- tive as the case may be, a sum equivalent to the value of the share and interest of the deceased member as determined in accordance with the rules after deduct- ing the dues of the deceased to the society ;

(5) when in any other case a member ceases to be a member of such a society under this Act, rules or bye-laws, his possession of and interest in, any such land held by him under the society shall come to the society. If the bye- laws allow and if the share and interest of the member is not forfeited under this Act or rules framed thereunder, the society shall pay to the ceased member a sum equivalent to the value of the share and interest of such member and any other sum due to him from the society after deducting his debts to the society, if any ;

(6) no land held under a registered society specified in sub-section (1) by a member thereof, or vested under sub-section (2) in the heir or nominee of such member, shall be attachable in any suit or proceeding for the recovery of any debt other than a debt due to the society or to a member thereof ;

(7) no land shall vest in such a society by reason of the provisions of this section unless it is owned by the society or has been leased to the society and, if the society holds the land by lease or contract, the land shall vest in the society only during the pendency of the lease or contract.

28. Right of a registered society to pay prior debts of a mortgagor.—

(1) Where a mortgage is executed in favour of a registered society for payment of prior debts or part thereof, of the mortgagor secured on the mortgaged pro- perty, the registered society may, notwithstanding the provisions of sections 83 and 84 of the Transfer of Property Act, 1882 (IV of 1882), by notice in writing and served by registered post with acknowledgment due, require any person to whom any such debt is due to receive payment of such debt or part thereof from the society at its registered office within such period as may be specified in the notice.

(2) The person on whom such notice is served shall be bound to receive payment of the amount offered by the society, but where there is disagreement or dispute between the mortgagor and such person as regards the amount of the debt, or where the society tenders less than the agreed amount of debt, the receipt of the sum offered by the society shall not debar such person from enforcing his right to recover the balance claimed by him.

(3) If any such person refused to receive such notice or such payment, such debt or part thereof as the case may be, shall cease to carry interest from the expiration of the period specified in the notice and the property mortgaged under sub-section (1) shall be deemed to have been freed from the encumbrance of such prior mortgage.

(4) No society shall advance a loan on a mortgage without taking a declara- tion from the prospective mortgagor as to the names of prior mortgagees of the property in question, if any.

29. Restrictions on mortgaged property,—Where land is mortgaged to a

registered society—(1) the mortgagor shall not be entitled without the approval of the society to transfer or mortgage his equity of redemption or to create a charge upon or lease out such property for a period exceeding three years.

(2) If the mortgaged property at any time is wholly or partially destroyed or the security is rendered insufficient due to fall in value or for any other reason and the mortgagor having been given a reasonable opportunity by the society of providing for further security sufficient to cover the loan or of repaying the loan with interest or such portion of the loan as may be determined by the super- visory, managing or controlling body and the mortgagor having failed to provide such security or repay such portion of the loan, the whole of the loan or such uncovered portion shall be deemed to fall due at once and recoverable through a co-operative demand certificate.

(3) Notwithstanding anything contained in the Transfer of Property Act, 1882 (IV of 1882), the mortgaged property, in case of default of payment of mort- gage money or any part thereof, may be sold by the society as prescribed by rules in addition to any other remedy available to it, without the intervention of th?

court, if a power of sale without the intervention of court is expressly conferred! by the mortgage deed, provided the society serves a notice in writing by registered post demanding payment of the mortgage money with interest, or part thereof* upon the mortgagor or, any person having an interest in or charge upon the mortgaged property or the equity of redemption who has previously notified the! society of such interest or charge in writing or any surety, and if default has been made in payment of the loan or part thereof for three months after such service of notice. Provided that any party aggrieved by an action taken by a registered society under this section may prefer an appeal to the Registrar- within thirty days from the date of the sale. His decision shall be final.

30. Bar to certain claim.— All payments and transfer made by a registered society under this chapter, shall be valid and effectual against any demand made upon the society by any other person.

CHAPTER IV

Management

31. General Assembly.— (1) The General Assembly of a registered society shall consist of all those who are eligible to vote at general meetings of the society. '

(2) (a) Every member of a registered society and every ex-officio member of the Administrative Council or managing body of such society, unless under some) temporary disqualification, shall have the right to attend any general meeting of the society and to exercise his vote at such meeting. Provided that the bye-laws of a registered society may prescribe—

(i) that a registered society affiliated to such society may have more than one representative entitled to vote at general meetings of the society ; and

(ii) that only one-third of the members of the General Assembly, excluding ex-officio members, may be individual members, the other two-third being representatives of affiliated registered societies.

(b) When the bye-laws of a registered society contain the provision of sub- section (2) (a) (ii), if the number of individual members exceed one-third of the total membership of the society, the individual members shall elect at a special meeting, to be called by the Secretary of the society not more than one month before the annual general meeting in the manner prescribed in the bye-laws for annual general meetings, those individual members who, as the representatives of the body of individual members, shall form the one-third membership! of the General Assembly for the purpose of voting at the annual and other meetings of the General Assembly during the ensuing year, only such elected representatives having the right to attend and vote at such general meetings.

(3) The supreme authority of a registered society shall be vested in the Gene- ral Assembly. Provided that during the pendency of any loan or service from the Government, or any other creditor secured at the instance of the Government, the supreme authority in respect of any matter adversely affecting the interests of the Government or the said creditor touching such loan or service shall be vested in the *[State] Government or the Registrar, as may be provided in the bye-laws, or any person authorised by them in writing, and may extend to the appointment of officers to hold any of the offices of the society or any persons to be ex-officio:

♦Substituted by A.O., 1950 for "Provincial" .

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' pinembers of the Administrative Council, managing body or any- committee of the i j.«ociety even if not members of the society. This supreme authority of the Govern- ment or Registrar may also be cxcercised in the absence of any loan or service i 'when the Government or Registrar, as the case may be, deem their intervention to be necessary in the interests of the members of the society or of the Co-operative | movement in general. The Government or the Registrar as the case may be, may a : fix the salary of any such appointed officer and declare it to be a charge on the | society. They may cancel any such appointments made by them.

(4) An annual or special meeting of the General Assembly shall be sum- moned and shall exercise its authority and perform its functions in such manner as may be prescribed in the bye-laws of the society.

32. Annual Meeting of General Assembly.—(1) A general meeting to be

•termed the annual general meeting of the General Assembly of a registered society shall be held at least once in every Co-operative year for the purpose of—

(a) electing members to the Administrative Council, managing body and other committees of the society, the Chairman, Vice-Chairman, and other office- bearers, as may be provided in the bye-laws, and fixing such fees, salaries or other -remuneration as prescribed in the bye-laws ; provided that the Government may mrescribe by rules the qualifications necessary for office-bearers and employees;

(b) electing an internal auditor or auditors, who shall not be members the Administrative Council or governing body, and fixing the remuneration;

(c) considering the annual report of the Administrative Council or, if there no Administrative Council, of the managing body, audit report and audited | ^annual accounts and balance sheets and reviewing the working of the society I during the preceding Co-operative year ;

(d) deciding how profits are to be distributed in accordance with the bye- s : laws ;

(e) passing the annual budget and approving the programme of work for I Bhe ensuing year ;

(f) fixing the maximum amount of liability to be incurred during the

•ensuing year and the maximum rate of interest payable on deposits ; and

(g) considering such other business as may be placed before the meeting | Jn accordance with the bye-laws.

(2) Such meeting shall be held not more than fifteen months after the date a sof the last preceding meeting held under sub-section (1) and unless the Regis- ■ trar on special grounds extend the period, within three months of the receipt of the statutory annual audit report.

33. Special meeting of General Assembly.—(1) A Special Meeting of the | 'General Assembly shall be called—

at the instance of the Administrative Council or if there be no Admi- Council of the managing body ;

at

on

or

at

of

(a)

?nistrative

(b)

R (c) Assembly

(d) -

(2) The Registrar himself or any person authorised by him in this behalf, in writing, may, by special order call a special meeting of the General Assembly at any time and shall call such a meeting upon the failure of the society to call a.meeting on the requisition by the members or at the instance of the Registrar ir sub-section (1).

(3) Notwithstanding any rule or bye-law prescribing the method of sum- jnoning or period of notice for a General Assembly, the Registrar or any person authorised by him in this behalf, may specify the time, place; business for the meeting and manner of convening it.

the request of the Chairman of the society;

a requisition signed by one-tenth of the members of the General twenty members, whichever is less ; or

the instance of the Registrar.

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34. Administrative Council.—The management of every registered society; shall vest in the managing body of the society, except in the case of a society, which for administrative convenience necessitated by reasons such as wide area of operation, that responsibility shall vest in an Administrative Council. The Administrative Council, the managing body and committees of a society shall be constituted in accordance with the bye-laws of the society which shall specify the composition of such bodies, their powers, functions, duties, method of sum- moning meetings and procedure.

35. Power to depute Government servant to manage the affairs of a society.—

The *[State] Government may, on the application of a registered society and on such conditions as may be determined, depute Government officials to the service of the society for the purpose of managing its affairs and the official shall exercise such powers and perform such duties as may be determined.

36. Dissolution or reconstruction of the Administrative Council, managing body or any committee of a society.—(1) When the Registrar is satisfied, after an inspection or enquiry under section 60 or 61 for reasons to be recorded in writing, that the Administrative Council, managing body or any committee of a registered, society is not functioning properly or according to this Act, rules or bye-laws, he may, after giving the offending body an opportunity to state its case, direct under clause (d) of sub-section (1) of section 33, that a special general meeting of the General Assembly be called within a time to be specified to dissolve the Administrative Council, managing body or committee concerned and to elect a new one. Provided that, if in the opinion of the Registrar it is necessary as.' an emergent measure to suspend the offending body forthwith, he may do so and shall appoint a person or persons, on such conditions as prescribed by him, to be in full control of the suspended body until a new body has been elected or action has been taken in accordance with section 37.

(2) The Registrar may, for reasons to be recorded, specify in the direction! made under sub-section (1) that all or any of the outgoing members of the • dissolved body shall be disqualified for such period not exceeding three years as he may determine, for election or appointment as an officer of the society or for service on any of its bodies.

(3) An appeal shall lie to the *[State] Government against an order of the Registrar disqualifying a member of a society for election or appointment within two months from the receipt of the order.

37. Dissolution of Administrative Council, managing body or any com- mittee and appointment of persons to manage the affairs of a Society.—If the Administrative Council, managing body or any committee as the case may be, | of a society is not dissolved and reconstituted within the time specified by the Registrar under section 36, he may by order in writing dissolve such body and shall thereupon appoint a person or persons, on such conditions as prescribed t by him, to manage the affairs of the society for such period not exceeding one year when he shall arrange for the constitution of a new body to take the 1 place of the dissolved body. The Registrar may extend this period from time to time as he may deem f it ; provided that the aggregate of such periods shall not exceed three years.

38. Tenure of office of the person appointed under section 37.—The person appointed under section 37 shall hold office until the Administrative Council, managing body or committee, as the case may be, is reconstituted or his appoint- ment is cancelled by the Registrar.

♦Substituted by A.O., 1950 for "Provincial".

281

39. Powers of person appointed under section 37.—During the tenure of office of a person appointed under section 37 such person shall, subject to the control of the Registrar, exercise all the powers and perform all the functions and

duties which may be exercised or performed by the superseded body under the provisions of this Act, rules or bye-laws.

CHAPTER V

Duties of Registered Society

40. Address of Society.—Every registered society shall have a registered address, to which all notices and communications may be sent and shall send notice in writing of every change thereof, within thirty days of such change, to the Registrar and to the affiliating society if any.

41. Prescription and inspection of documents.—(I) Every registered society shall keep and allow inspection free of charge by any member of the society and such other persons as may be prescribed al all reasonable limes at the office of the society—

(a) A copy of this Act.

(b) A copy of the rules framed under this Act.

(c) A copy of the bye-laws of the society.

(d) A copy of all rules framed under the bye-laws of the society.

(e) Annual balance sheet authenticated by the Audit Officer, and

(f) Such other books, forms, registers or other documents as may be pres- cribed by the Registrar.

(2) A society shall deliver to every member on payment of a sum prescribed by tlic society's bye-laws or rules, copies of documents certified to be true copies.

42. Restrictions on borrowing.—A registered society may receive deposits and may borrow from its members and from persons who are not members to such extent and on such conditions as may be prescribed in the Act and bye-laws.

43. Power of Government to give financial assistance.— Notwithstanding anything contained in any law foi the time being inforce, the [State]¹Govern- ment may grant loans to, take shares in. guarantee the principal or the interest or both in respect of debentures issued by or give financial assistance in any other form to. any registered society, which puts forward a satisfactory scheme for ffic utilisation of the funds so raised. The [State]' Government may recover from any society out of its net profit in any year all or any part of such financial assistance.

44. Restrictions on loans.—(1) A registered society shall not give loans—

(a) to any person other than a member except with the general or special sanction of the Registrar : provided that a loan may be given to a depositor of the society on the security of his deposit, or

(b) to a member in excess either of (he maximum or of the normal credit determined by the society for that member in accordance with its bye-laws:

provided that in assessing normal credit the managing body shall take a full statement as to the member's means of earning,

(c) on the security of movable property or future movable property, unless the movable property is placed with the society,

(d) on persona) security without sureties, unless the borrowing member has unencumbered immovable property or attachable funded assets sufficient to cover the loan and a full statement of such securities is submitted by the borrower and the truth of the statement is ascertained by the managing body.

(c) on personal security with sureties, unless the borrowing member and his sureties together have unencumbered immovable property or attachable funded 'Substituted by the A.O., 195(1 for "Provincial".

assets sufficient to cover the loan and a full statement of such securities; submitted by the borrower and the sureties separately and the truth of th statements is ascertained by the managing body,

(f) on personal security, with or without sureties, unless the loan is fot short period not exceeding the time required to reap the benefit of the loan as in no case exceeding three years.

(2) (a) Notwithstanding the provisions of sub-clauses (l)(b), (d) and (

a loan may be given on personal security provided that the managing body the society is satisfied as to the credit of the borrower and has taken from If a scheme for the utilisation of the loan and has ascertained the truth of the s.tiL ments contained in the scheme and the bona fides of the borrowing member,

(b) the resolution of the managing body granting a loan under this sect- shall contain the names of all assenting members ; provided that, if such names at omitted from the proceedings of the meeting, (he Chairman and Secretary slya be held jointly and severally responsible for the issue of the loan,

(c) notwithstanding the provisions of sub-clauses (l)(b ) to (f) and (2)(j and (b), a registered society may issue a loan on mortgage or valuable security;!

(d) no person shall be accepted as a surety for any borrower unless is also a member of the same registered society.

(3) A registered society, the primary object of which is not the issue c loans, shall open a separate accounting or finance or banking branch in accot ance with its bye-laws and frame rules for the conduct of business in sue! branch before it issues any Ioans and such rules shall first be approved by t'w Registrar.

45. Office-bearer of society is required to furnish information and produa documents.—(1) Every office-bearer of a registered society shall produce docjj ments and books of account, cash balance in his custody, and appear before and furnish such information in regard to the transactions or working of t$ society as may be required of him by the Registrar, or persons authorized by the Registrar in this behalf, an audit officer, arbitrator, liquidator or any perso conducting an inspection or inquiry under the provisions of this Act and the Rules made thereunder.

(2) (a) At any sale of property, movable or immovable, held under this Ac or rules framed thereunder, no office-bearer of the registered society concern or any person having any duty to perform in connection with such sale, shall either directly or indirectly bid for, acquire or attempt to acquire any interest in such property.

(b) Any office-bearer of a society or a liquidator may on behalf of the society bid and purchase at a sale of mortgaged property.

CHAPTER VI

Privileges of Registered Societies

46. Prior claim of a society.—(1) Notwithstanding anything contained in:

sections 60 and 61 of the Code of Civil Procedure, 1.908 (V of 1908), any or outstanding demand due to a registered society by any member, surety, past member, or the estate of any deceased member shall be a first charge,

(a) if such debt or demand is due in respect of the supply, or any loan provide the means of such supply, of seed, manure. Labour, fodder for cattle or any other thing incidental to the conduct of agricultural, operations—upon the crops or agricultural produce of such member;' past member or belonging to the estate of such deceased member, at any time within two years from the date of such supply or loan or froni the date on which the last instalment of such supply or loan became fil repayable ;

14

(b) if such debt or demand is due in respect of the supply of or any loan for the purchase of cattle, agricultural implements or warehouses for the storage of agricultural produce—in the manner and to the extent aforesaid upon the crops or agricultural produce of such member, past member or belonging to the estate of such deceased member and also upon the cattle, agricultural implements or warehouse thus sup- ■ plied or purchased wholly or in part from any such loan ;

(c) if such debt or demand is due in respect of the supply of. or any loan lor the purchase of raw materials, industrial implements, machinery, workshop, warehouses or business premises,—upon the raw materials or other things supplied or purchased by such member, past member or the deceased member wholly or in part from any such loan and also upon any articles manufactured front raw materials or with im- plements or machinery so supplied or purchased wholly or in part j from any such loan ;

(d) if such, debt or demand is due in respect of any loan for the purchase, improvement or redemption of land or for the purchase or construc- tion of any house, building or any portion thereof,—upon the land j purchased, improved or redeemed or the house or building so pur- chased or constructed by such member, past member or the deceased member from any such loan.

'i (2) Nothing in this section shall affect the claims of any bona /ide purchaser or transferee for value without notice.

47. Charge and set oil' in respect of shares or interest of members.—A regis- lered society shall have a charge upon the share or interest in the Capital and ' on the deposits of a member or past member or deceased member and upon any dividend, bonus or surplus payable to a member or past, member or (he estate ; of a deceased member in respect of any debt due from such member or past ' member or estate of such deceased member to tile society, and may set off any 1 sum credited or payable to a member or past member or estate of a deceased : ; member in or towards payment of any such debt.

48. Deduction of dues from salary of members.—(f a member of a registered ■ iocicly, who is an employee of the Government or any local authority, takes a

1 ' loan irom a society and contracts to repay it by instalments, and authorises the ■I society to recover such instalments by deduction front his salary, the person I rho disbm :<•*; any amount payable to such member as salary or remuneration | in respect of such employment shall, on demand from the society, deduct the

1

, iniount of such instalment from the amount disbursed to such member as salary < and shall forthwith remit to the society the amount so deducted.

49. Exemption from compulsory registration and personal attendance for

registration ok' insiriiinents.—Nothing in clauses (b) and (c) of sub-seclion (1) of lection 17 of the Indian Registration Act, 1908 (XVI of 1908), shall apply to :—

(1) any instntment relating to shares in a registered society, notwithstanding that assets of such society consists in whole or in part of immovable property; or

(2) any debenture issued by any such society and not creating, declaring. ; issigning, limiting or extinguishing any right, tide or interest to or in immovable

• properly, except in so far as it entitles the bolder to the security afforded by a ■ register.: d instrument whereby the society has mortgaged, conveyed or otherwise ' transferred the whole or part of its immovable property or any interest therein ; to trustees upon trust for the benefit of the holder of such debentures : or « (3) any endorsement upon or transfer of any debenture issued by any such j society.

; (4) Notwithstanding anything contained in the Indian Registration Act, 1908, l it shall not be necessary for any office bearer ot a registered society or a liqiiR ; dator of a society to appear in person or by agent at any registration office in

(

any proceeding connected with the registration of any instrument executed by him in his official capacity or to sign as provided in section 58 of that Act.

(5) Where any instrument is so executed, the registering officer to whpn | such instrument is presented for registration may. if he thinks tit, refer to sucl ' office bearer or liquidator for information regarding the same and on beinj fe satisfied of the execution thereof, shall register the instrument.

50. Power to remit certain duties, fees, etc.—(1) The [State]¹Governmen may by general or special order in the case of a registered society or class o registered societies remit any tax, cess or fee payable under any law for the time being in force or the rules thereunder in respect of which they are con) petent to remit such tax, cess or fee.

r . _ ■ ■ ■

class of registered societies, by notification in the official gazette, remit

(a) the stamp duty other than stamp duties falling within [item 91 or 95 i_ __ _ „ --- ---------

of any instrument executed by, or on behalf of, or in relating to the business of such society or any class of such instruments, coi trators under this Act, in cases where, but for such remission, the registered society, officer or member thereof, as the case may be, would be liable to pay the stamp duty chargeable under any law for the time being in force, in respec of such instrument, and 1

(b) any force force.

(2) The '[State] Government may, in respect of any registered society ot :

in list 1 of the Seventh Schedule to the Constitution of India]²in respect favour of I

a registered society or by an officer or on behalf of a member thereof. a | |

,

operative demand certificates or decisions awards or orders of Registrar or arbi- ;

being in

being in

...... „..J

fee payable by a registered society under any law for the time ; for the registration of documents or of court fee for the time

CHAPTER V II

Property and Funds of Registered Society Investment of Funds.— (1) A registered society may invest or deposit i |51. funds—

(a) in a Government Savings Bank, or

(b) in any of the securities specified in section 20 of the Indian Trust Act, • 1882, other than those specified in clause (c) of that section, or

(c) with the sanction of the Registrar, in the shares or debentures or in Jhe security of any other registered society, or

(d) with any registered society, bank or persons carrying on the business of banking approved for this purpose by the Registrar, or

(e) in any other mode permitted by the bye-laws.

(2) Such investment shall be accounted for separately from the Reserve Funt ; of the registered society.

52. Reserve Fund.—<1) Every registered society shall maintain a Reservt Fund formed from its profits and carry to the fund in each year not less than twenty per centum of its net profits.

(2) The Reserve Fund shall be invested separately in any of the wayj prescribed in section 51 or, with the sanction of the Registrar, in immovable property required for the furtherance of the activities of the society. Any .suet investment shall be deemed to constitute Reserve Fund. No instrument securing a loan on a Reserve Fund shall be valid.

'Substituted by the A.O., 1950 for "Provincial".

Substituted by the Assam Co-operative Societies (Amendment) Act, 1953/-

16

28,5

(3) The Reserve Fund shall not be utilised for any purpose whatsoever 'except with the sanction of the Registrar, who shall accord such sanction only ■in exceptional circumstances.

53. Distribution of net profit.—After making the allocation to the Reserve Fund as prescribed in the section 52, the remaining net prpfits of a registered society may be distributed according to the bye-laws of the society.

54. Restriction on distribution of profits.—(1) Save as may be prescribed, ;no distribution of profit shall be made in the case of a registered society with

"unlimited liability and no part of the net profit or of a fund of any society shall be divided by way of dividend, bonus, patronage dividend, rebate or otherwise iamong its members.

(2) No dividend, bonus, patronage dividend, or rebate shall be paid—

(a) otherwise than out of net profits certified by the audit officer to have been actually realised ; provided that advance patronage dividend may be paid ■in accordance with the directions of the Registrar and on the certificate of an internal auditor approved by the Registrar; or

(b) without the previous sanction of the Registrar, if the audit officer reports that any asset is bad or doubtful and also recommends that such sanction is necessary.

Notwithstanding anything contained in this section payments may be

. members as a fixed interest on share capital, if so provided in the bye-

(3)

made to /laws.

CHAPTER VIII

Audit Registrar is responsible for audit.-—(1) The Registrar shall audit or be audited by some person authorized by him by general or special order

F 55.

cause to in writing in this behalf the accounts of every registered society and society under liquidation once at least in every year.

(2) The Registrar or the person authorized by him in this behalf shall al all reasonable times have free access to the books, accounts, documents, securities, cash and other properties belonging to or in the custody of the society and may summon any person in possession or responsible for the custody of any such books, accounts, documents, securities, cash or other properties to produce the same and-furnish such information in regard to the transactions and working - of the society at any convenient place or at the headquarters of the society or any branch thereof by the same means and, so far as may be, in the same manner as provided in the Code of Civil Procedure, 1908 (V of 1908).

(3) In respect of every audit of the accounts, a registered society shall pay such audit fee as may be prescribed and such fee shall be deemed to be out-

• standing dues from the society.

56. Power of the Registrar to have the Accounts written up.—If at the ' time of the audit the accounts of a registered society are not complete, the Regis-

ytrar or with his sanction, the audit officer, may cause the accounts to be written up at the expense of the society.

57. Nature of audit.—The audit shall include—

(i) a verification of the cash balance and securities :

(ii) a verification of the balance at the credit of the depositors and cre- ditors and of the amounts due from the debtors of the society ;

(iii) an examination of overdue debts, if any ;

(iv) the valuation of the assets including stock verifications, and liabilities of the society;

17

contrary not been resulted

Inquiry and Inspection

to law or to

(v) an examination of the statement of accounts and balance sheets be prepared by the managing body of the society in such forms as may prescribed ;

(vi) a certification of the realised profits ; and

(vii) any other relevant matter.

58. Audit report.—The audit officer shall, within a week from the date completion of audit, submit to the registered society, and to the Registrar, together t including a statement

brought into

have

with the statement of accounts audited, an audit report

of—

(i) every transaction which appears to him to be the rules or bye-laws ;

(ii) every sum which ought to have been but has account;

(iii) the amount of deficiency or loss which appears to have any negligence or misconduct or to require further investigation;

(iv) any money or property belonging to the society which appears to been misappropriated or fraudulently retained by auy person ;

(v) any of the assets which appears to him to be bad or doubtful;

(vi) any irregularity in maintaining account; and

(vii) any other relevant matter.

59. Rectification of defects.—A registered society shall be afforded by the Registrar an opportunity of explaining any defects, or irregularities pointed out and objected to by the audit officer, and thereafter the society shall, within such time and in such manner as the Registrar may direct, remedy such defects and irregularities and report to the Registrar the action taken by it thereon.

CHAPTER IX

60. Inquiry by Registrar.—(1) The Registrar may, at any time, of his own motion or shall at the request of the administrative head in charge of the Civil Subdivision or other Administrative Area, hold an inquiry or direct some person authorized by him by order in writing in this behalf, to hold an enquiry into the constitution, working and financial condition of a registered society.

(2) Such an inquiry shall also be held on the application of

(i) the affiliating society, if any, of which the society is a member and a i debtor ;

(ii) a majority of the members of the managing body ;

(iii) one-third of the members of the society, who shall have deposited such security for costs, if any, as the Registrar may direct;

(iv) creditors representing not less than one half of the borrowed Capital of the society, who shall have deposited such security for costs, if any, as the Registrar may direct.

" (3) The Registrar shall communicate the result of any enquiry under this section to the society and to the person at whose request such enquiry was made.

61. Inspection of society.—(1) Every registered society shall be liable to inspection at any time by the Registrar or any person authorized by him in this behalf by general or special o rder; and by any affiliating society if so provided in its bye-laws.

(2) An inspection of a registered society shall be made by the Registrar or any person authorised by him in this behalf by an order in writing at any time on the application of a creditor of a registered society; Provided that no inspection shall be made under this sub-section unless

(i) the creditor deposits with the Registrar such sum as security for the cost of the proposed inspection as the Registrar may require and (ii) the creditor satisfies

18

287

the Registrar that the alleged debt is a sum then due and that he has demanded payment thereof and has not received satisfaction within a reasonable time:

Provided further that no inspection shall be conducted under this sub-section without giving the society an opportunity of being heard.

(3) The result of an inspection under this section shall be communicated to the society and if held at the instance of a creditor, to the creditor.

62. Cost of enquiry and. inspection.—(1) When an inquiry is held under sec- tion 60(2) or an inspection is made under section 61(2), the Registrar may. after giving the parties an opportunity of being heard, apportion the cost or such part of the cost as he may deem fit. between 'he society, the members thereof

o] 1he affiliating society or (he creditor or creditors applying for such inspection or inquiry, as the 'ase may be, and the officers, former officers, members and past member; of the society.

(2) No expenditure from (he fund of a registered society shall be incurred for (be purpose of defraying any cost m support of any appeal preferred by any person other than the society itself against an order under sub-section (1).

(3) Any person authorised by the Registrar under sections 60 and 61 shall have all the powers of the Registrar when acting under these sections. Recovery of costs.- ■ (4) Any sum awarded by way of cost under this section shall be recoverable through a Co-operative demand certificate.

CHAPTER X

Settlement of Dispute's

63 Reference «>f dispute.—Any dispute touching the business of a registered society, other than a dispute icgardins disciplinary action taken by a society against :m employee of the society, or of the liquidator of a society shall be referred to the Registrar for decision if the parties thereto are among the following

(a) the society, ils past or present controlling or managing body, any past or present officer, agent or employee or the liquidator of the society : oi

(b) member, past member or persons claiming through a member, pas! member or deceased member of the society : or

(c) a surety of a member, a past member or deceased member of a society ; or

(d) any other registered society or the liquidator of such society.

64. Settlement of dispute —f l ' I he Registrar shall on receipt ot a reference under section 63—

fa) decide the dispute himself ot authorise any other Government Officer to decide the dispute : or

fb) refer it for disposal to an arbitrator appointed by the Registrar or to three arbitrators one to be nominated by each of th- parties to the dispute and the third, who shall be nominated by the Registrar, *<.■> act as < h orman Where any party to lite dispute fails to nominal' an arbitratoi within fifteen days after the communication of this notice. th ' Regi-.tr ir may himself make the nomination. No legal practitioner may hr- nominated as an arbitrator by any party to a dispute or by (he Registrar

(c) An arbitrator appointed under the previous sub-clause shall be governed by the Indian Arbitration Act, 1940 fX of 1940). with sinh statutory re-enact- ment or modification thereof as shall from time to time be made.

(2) The Registrar may withdraw any reference of such dispute referred under sub-section (1) and may deal with it himself under the said sub-section.

288

(3) Where the Registrar is satisfied that a party to any reference made to him under section 63 with intent to defeat or delay the execution of any decision; that may be passed thereon—

(a) is about to dispose of the whole or any part of his property ; or "i

(b) is about to remove the whole or any part of his property from tht, local limits of the jurisdiction of the Registrar, the Registrar may, unless ade- quate security is furnished, direct the conditional attachment of the said property or such part thereof as he deems necessary ; and such attachment shall have the same effect as if it had been made by a competent Civil Court.

CHAPTER XI

Dissolution of Society

of an Assent;

65. Cancellation of registration.—(1) If the Registrar, on receipt application made upon a resolution adopted in a meeting of the General . bly by a three fourths majority of the members present at the meeting provided that the notice of dissolution was included in the circulated agenda of the meeting

is of opinion that society ought to be dissolved, he may by an order in writing, cancel the registration of the society.

(2) The Registrar, after an enquiry has been held under section 60 or aftef an inspection has been made under section 61, may cancel the registration of a society which—

(i) has not commenced working ; or

(ii) has ceased working ; or Git) has ceased to comply materially with any condition as to registration in this Act. rules or bye-laws, and

(iv) in his opinion ought to be dissolved.

(3) A copy of the order cancelling the registration of a society shall forth* With be published in the official Gazette by a notice which shall be communi- cated to the society and to any affiliating society concerned by registered post; The notice shall contain the name of the liquidator appointed under section 66, who shall take full charge of the society forthwith and shall require all claim! against the said society to be made to the liquidator within two months of pu | lication of the notice. All liabilities recorded in the account books of the society shall be deemed ipso facto to have been so claimed.

(4) When the cancellation of the registration of a society takes effect, th(

society shall cease to exist as a corporate body, but shall vest in the liquidator. 1

(5) Any member of the society may, within two months from the date of publication of the order of cancellation, appeal to the [State]¹Government froflj such order.

(6) Where no appeal is presented within two months from the publicatioi of an order cancelling the registration of the society, the order shall take effee on the expiry of that period.

(7) When an appeal is presented within two months of an order of can cellation. the order shall not take effect until it is confirmed by the [State] Government and such confirmation is communicated to the society by register^ post.

66. Winding op.—(1) Where an order of cancellation of the registration

of a society is made by the Registrar under section 65, he may appoint am person to be the liquidator of the society and may remove such person ant appoint another in his place.

'Substituted by the A.O., 1950 for "Provincial".

289

(2) The liquidator appointed under sub-section (I) shall have power fro® the date of his appointment to lake immediate possession of all assets, properties, effects and actionable claims of the society or to which the society is entitled and of all books, records, cash and other documents pertaining to the business of the society and, in the interests of the society, shall hold charge of the society notwithstanding the provisions of section 65, provided that no steps shall be taken for the winding up of the society during the pendency of any stay order.

(3) The liquidator shall, under the general control of the Registrar, have power, so far as is necessary for the winding up of the society, on behalf of the society to carry on the business thereof and to do all acts and execute all docu- ments necessary to such winding up, and in particular shall exercise the follow- ing powers :—

(a) to institute, compromise and defend suits and oil er legal proceedings on behalf of the society by his name of office ;

(b) to make any compromise or arrangement with any person between whom and the society there exists any dispute ;

(c) to determine the debts due to the society by a member, past member or the estate, nominees, heirs or legal representatives of a deceased member;

(d) to determine from time to time the contribution to be made or remain- ing to be made by the members, past members or by the estates or nominees, heirs or legal representatives of deceased members or by any officers or former officers, to the assets of the society and to determine the debts due from such members or persons and the cost of liquidation ;

(e) to calculate the cost of liquidation and to determine by what persons and in what proportion they are to be borne ;

(f) to investigate all claims against the society and, subject to the provisions of this Act, to decide questions of priority arising between claimants :

(g) to pay claims against the society including interest upto the date of cancellation of registration according to their respective priorities, if any, in full or rateably as the assets including the reserve fund of the society, perm it; the surplus, if any. remaining after payment of claims being applied in payment of interest front the date of such cancellation at a rate fixed -y him but not exceeding the contract rate in any case ;

(h) to take steps to recover dues according to the provisions of section 83, if necessary ; and

(i) io dispose of the surplus, if any, remaining after paying the claims against the society in accordance with section 67 of this Act.

(4) Subject to the provisions of this Act and rules made thereunder, a liquidator appointed under this section shall, in so far as such powers are necessary for carrying out the purposes of this section, have power to summon and enforce the attendance of v i* ,esses and to compel the production of any book, accounts, documents, securities, cash or other properties belonging to or in the custody of the societ by the same means and so far as may be in the same manner as is provided in the case of a civil court under the Code of Civil Procedure. 1908 (V of 1908).

(5) Notwithstanding anything contained in any lav/ for the time being in force, if any landed property is held by a liquidator as such the title over the land shall be complete as soon as the mutation of the name of his office is effected and no court shall question the title on the ground of dispossession, want of possession or physical delivery of possession.

67. Distribution of fund of s dissolved society.—On dissolution of a society, the reserve fund and any undisbursed cash in hand shall be applied to discharging the liabilities of the society and the repayment of the share capital. Any sum. that may remain, shall be credited to the reserve fund of a society, to be formed to replace the dissolved society or, if there be no such society to any other

290

deserving society existing within the same area of operation and having objects similar to those of the dissolved society or, if there be no such society to any other registered society in Assam, as may be determined by the Registrar.

68. Liquidator to deposit the books and submit a final report.—When the affairs of a registered society have been wound up, the liquidator shall make a report to the Registrar, who when satisfied shall order the liquidation proceedings to be closed and direct the liquidator to deposit the records wheresoever the Registrar thinks fit.

69. Bar of suit.—Save in so far as is expressly provided in this Act, no Civil Court shall take cognizance o any matter connected with the winding up or dissolution of a society under this Act and when a liquidator has been appointed no suit or other legal proceedings shall lie or be proceeded with against him except by leave of the Registrar and subject to such terms as he may impose.

CHAPTER XII

Recovery of sums due and Enforcement of obligations

70. Power of Registrar to direct payment of dues.—Notwithstanding any- thing contained in Chapter X, the Registrar or such other person as may be authorised, in this behalf, may, on his own motion or on the written requisition of a registered society or an affiliating society for the recovery of any loan due by a defaulting member, after due enquiry, make an award directing pay- ment by such member of the amount found to be due.

71. Charge and Surcharge.—(1) Where, as the result of an audit under sec- tion 55. or an enquiry under section 60 or an inspection under section 61 or a report made in the course of the winding up of a registered society, it appears to the Registrar that any member, officer or employee past or present, of the society has at any time within a period of four years prior to the date of such audit, inspection, inquiry or report, as the case may be-

(a) intentionally, whether individually or as an assenting member of any Managing or other controlling body, made or authorized any payment or granted any loan which is contrary to the provision of this Act or to the rules or bye- laws or failed to take timely steps to recover any loan at the due date or if it was; being improperly utilised: or

(b) was grosslly negligent in respect of any loss or deficiency ; or

(c) failed to bring into account any sum which ought to have been brought into account; or

(d) misappropriated or fraudulently retained any property of the society ; or

(e) committed breach of trust in relation to the society; the Registrar may inquire into the conduct of such officer or member of the managing or other controlling body.

(2) The Registrar may similarly inquire into the conduct relating to the affairs of the society of any member, officer or employee, past or present, of a registered society on the application of the present controlling or managing body of the society, or liquidator, or any creditor, or any other registered society to which the society is affiliated or any contributory.

(3) Upon such enquiry, after giving such member, officer or employee an opportunity of being heard and, in the case of a payment made contrary to the | provisions of this Act or rule or bye-laws, after affording such member, officer or employee time to recover the amount of such payment from the payee and . credit it to the funds of the society, the Registrar may by an order in writing J require such member, officer or employee to pay such sum with interest at such i rate as the Registrar may direct, to the society by way of compensation in respect j

291

of such payment or los> or to restore such property as the Registrar thinks lit. anti to pay such sum as .he Registrar may' lix to meet the cosi of the proceedings under this section.

(4) Any award made by the Registrar under sub-section (3) shall be reduced to the form of a Co-operative demand certificate, by the officer authorised to issue such certificates.

(5) fliis section shall apply notwithstanding that such member, officer or em- ployee may by his act or omission nave incurred in addition criminal liability under this Act ot tiny other law for the time being in force.

(6) An appeal snarl lie io the [State]¹Government against an order passed tinder sub-clause (J) (a) within thirty days of the communication of the order. Cl-iAPTER X llf

Penalty

72. Prohibition »i' the use ot the word "CG-opctalive" or "Samabaya".—

(I) No person other than a society registered under this or any other Co-operative Societies Act shall trade or carry on business unde; any name or title of which lite word "Co-operative' or its vernacular equivalent •'Samabaya" is a part:

Provided that nothing in this section shall apply to the use by any person, or by his successor in interest of any name or title under which lie lawfully traded or carried on business at the commencement of this Act.

(2) Whoever contravenes the provisions of this section shall be punishable with fine which may extend to fifty rupees, and in the case of a continuing offence with further fine of five rupees for each day on which the offence is continued after conviction therefor.

73. Punishment for false return, false hifcraiation, disobeying summons, orders, etc.—If (a) a registered society or an officer or member thereof or any liquidator, wilfully makes a false return or furnishes false information or wilfully neglects or refuses to do any act required by this Act or the rules or bye-laws; or does anything contrary to this Act or the rules or bye-laws : or

(b) any person wilfully or without reasonable excuse disobeys any sum- mons, requisition or lawfully written order issued under the provisions of this Act or does net produce documents, or cash balance of the society or furnish any information lawfully required from him by a person authorised in this behalf under the provisions of this A.ct²[or fails to maintain up-to-date accounts, records and other documents of the Society required to be maintained by him under this Act or the rules or bye-laws] he shall be punishable with line which may extend to live hundred rupees ; and in the case of a continuing offence a further fine of five rupees for each day on which the offence is continued after conviction therefor.

74. Punishment for disposing property in contravention of section 46.— Any member, past member or the nominee, heir or legal representative of a deceased member removing or otherwise disposing of, or suffering to be removed or otherwise disposed of, any property on which a registered society holds a first charge under section 46 with intent 'to defraud the society or with such intent doing any other act to the prejudice of the society's first charge, shall be punish- able with fine not exceeding five hundred rupees.

'Substituted by the A.O., 1950 for "Provincial".

'■inserted by the Assam Co-operative Societies (.Amendment) Act, 1953.

75. Penalty for certain misdemeanours.—Where it appears to the Registrars that any person has contravened the provisions of this Act, the rules or bye-laws-d|

(a) by sitting or voting or exercising his rights as a member, or as a mein-J ber of any managing or controlling body, or voting in the affairs of a registered! society as a representative of another society which is a member of such society,! when such person was not entitled so to sit, vote or exercise such rights, as the! case may be, or

(b) by utilising a loan for a purpose different from that for which it was! granted,

the Registrar may, after affording such person an opportunity to be heard, by! an order in writing direct him to pay the assets of the society by way of penalty:] such sum not exceeding fifty rupees as the Registrar thinks fit.

76. Power to enforce performance of obligations.—Notwithstanding anything- contained in this Act, where any registered society is required to take any action! under this Act, the rules or bye-laws and such action is not taken within the| time provided in this Act, the rules or bye-laws or within such time as thel Registrar may specify by a notice in writing, where no time is so provided, thej Registrar may call upon any officer of the society whom he considers to bet responsible for the carrying out the directions, and after giving such officer! an opportunity, to be heard, may require him to pay to the assets of the society! such sum not exceeding twenty-five rupees as the Registrar may think fit for each - day until the Registrar's directions are carried out.

77. Cognizance of offences.—(1) No court inferior to that of a Magistrate ofl the second class shall try any offence under this Act.

(2) No prosecution for an offence under this Act shall be instituted without; the previous sanction of the Registrar.

(3) Offences under this Act may be tried summarily.

CHAPTER XIV

Jurisdiction

78. Indemnity.—No suit, proceeding or prosecution whatever shall lie against the Registrar or any person acting on his authority, or against any liqui- dator in respect of anything done or purporting to be done in good faith under this Act.

79. Bar to jurisdiction of Courts. (1) Save as provided in this Act, no Civil or Revenue Court shall have any jurisdiction in respect of—

(a) registration of a registered society or its bye-laws or amendments of bye-laws; or

(b) the dissolution of a managing or controlling body and the manage* ment of the affairs of the society on dissolution thereof; or

(c) any dispute referred to the Registrar ; or

(d) any matter in relation to the winding up and dissolution of a registered society.

(2) Save as provided in this Act, no order, decision or award under this Act, or working of the affairs of a registered society shall be liable to be challenged, set aside, modified, revised or declared void in any court on any ground what- soever except on grounds of jurisdiction.

80. Appeal or review.—(1) Except where otherwise expressly provided to the contrary an appeal shall lie to the Registrar from the decisions made under this Act or rules framed thereunder by any Government Officer, liquidator or non-official helper appointed under sub-section (3) of section 3.

(2) The Registrar may review any order passed by him at any time within two months from the communication of such order.

24

(3) Save as provided in this Act or rules, no appeal shali lie to the [State]¹ Government against any order of the Registrar, except on a question oi law, and provided such appeal is preferred within two months of the communication of such oraer.

(4) Any appellate authority and the Registrar in case of review may pass any stay order pending any appeai or review oefore such an authority, and may award costs against any party appealing or petitioning for review if such appeal or review petition is considered 1'aisc, vexatious or frivolous by the authority concerned.

81. Power of attachment of property.—Where the Registrar or such gazetted officer as may have powers delegated to him under section 83 is satisfied that any person holding property wi h:n iris jurisdiction with intent to defeat or delay the execution of any order, under a Co-operative demand certificate for recovery of dues, or with intent to avoid payment of dues from such person under this Act, rules or bye-laws—

(a) is about to dispose of the whole or any part of such properly; or

(b) is about io remove the whole or any part of such property from the local limits of the jurisdiction of the Registrar or of such gazetted officer may, unless adequate security is lurnished, as he may require, direct the conditional attachment of the said property or such part thereof as he thinks necessary, notwithstanding that the ckdmant or owner of the property may reside elsewhere, and such attachment shall have the same force and effect as if it had been made by a competent Civil Court and shall continue in force until withdrawn or cancelled.

82. Registrar to be Civil Court for certain purposes.—The Registrar or any person empowered by him in this behalf shali be deemed, when exercising any powers under this Act for the recovery of any amount by attachment and sale or by the sale without attachment of any property, or when passing any orders on any application made to him for such recovery or to take any step-in-aid of such recovery, to be a Civil Court for the purpose of Article 182 of the First Schedule to the Indian Limitation Act, 1908 (IX of 1908).

83. Recovery of sums due.—(!) All dues recoverable under this Act or Rules framed thereunder shall be reduced to the form of a Co-operative demand certificate, as in Schedule A over the signature of the Registrar or of such gazetted officers as may have powers delegated io (hem by the Registrar in this behalf and shall be recovered as an arrear of land revenue and shall be paid to the : certificate holder or his authorised nominee. Such, certificate shall be in the name of the claimant and shall be delivered to him.

(2) Not more than one officer in each civil subdivision or other administra- tive area shall be vested with the power to issue Co-operative demand certificates under sub-clause (1). No officer shall entertain any application for a certificate unless the claimant's registered address falls within his area of jurisdiction. The Registrar shall not entertain any application for a Co-operative demand ■ certificate from any claimant whose registered address falls within the jurisdic- tion of any officer who has been invested with the power to issue such certificates.

[Explanation.—'The certificate officer' means the officer so defined in, and the 'prescribed form' means the form so prescribed under the Bengal Public Demands Recovery Act, 1913].

(3) For the purpose of this section a member of an affiliated society shall be deemed to be a member of the affiliating society and Ioans due to the affiliated

• society shall be deemed also to be loans due to the affiliating society to the extent that loans from the affiliating society to the affiliated society are outstanding 'Substituted by the A.O., 1950 for "Provincial"

25

jl th. and cannot be recovered from the affiliated society directly, provided that nos more than one demand certificate may be executed against a single loan.

84. Registrar may order a meeting of creditors.—(1) Notwithstanding any- thing contained in this Act, where a compromise or arrangement is proposed^:

between a registered society and its creditor or creditors or any class of them 1 '

the Registrar, upon an application made by a registered society or by liquidator-J

in case of a society in respect of which an order has been passed for tire winding jlfv up thereof, or by a creditor or creditors or any class of creditors, may order a meeting of the creditors. „

(2) If a majority in number of creditors or the class of creditors as the case may be, representing claims to three-fourths of the debts due by the society ̂ to the creditors or class of creditors, at a meeting agree to any compromise or arrangement and if the Registrar agrees to such compromise or arrangement and;:

gives his sanction then the compromise or the arrangement shall be binding on-; jp all the creditors or class of creditors and also on the society or on the liquidator' t r , in the case of a society in respect of which an order has been passed for the- ' winding up thereof, and on < "

to contribute to the assets of

CHAPTER XV

an in all persons who may be required by the liquidator?* the society.

- j .or

1

in th Miscellaneous

85. Society to be a body corporate.—Every registered society shall be deem- ed to be a body corporate by the name under which it is registered, with per- petual succession and a common seal, and with power to hold property, to enter- 1 into contracts, to institute and defend suits and other legal proceedings and¹⁰ i «

do all things necessary for the purposes for which it was constituted.

86. Register of members.—Any register or list of members or shares kept by any registered society shall be prima facie evidence of any of the following; particulars entered therein—

(a) the date on which the name of any person was entered in such register q or list as a member; and

(b) the date on which any such member ceased to be a member. 1

87. Entries in books of registered society shall be received as prima facie

evidence.—(1) A copy of any entry in a book of a registered society, regularly; kept in the course of business shall, if certified by the Chairman or Secretary.; of the society, be received in any suit or legal proceeding as prima facie evidence ifr of the existence of such entry, and shall be admitted as evidence of the matters? Re transactions and accounts therein recorded in every case where, and to the same fol extent as the original entity itself is admissible.

(2) No officer or liquidator of a registered society and no officer in whose; office the books of a registered society are deposited after liquidation shall in?

any legal proceedings to which the society or the liquidator is not a party, be- compelled to produce any of the society's books the contents of which can ba fr proved under sub-section (1) Or to appear as a witness to prove the matter^ transactions and accounts therein recorded, unless specially so directed by an- order of the Court or the arbitrator.

88. ■ Savings of existing societies.—(1) Every society existing at the com- c l th b(st .01

:C(

h

mencement of this Act which has been registered or deemed to have been-regis® Jr tered under the Co-operative Societies Act, 1912 (II of 1912), shall be deemed it to be registered under this A c t; and its bye-laws shall, in so far as they are not' « inconsistent with the provisions of this Act continue in foree until altered ot. rescinded and shall to such extent be deemed to be registered under this Act.

26

I (2) All appointments, rules and orders made, notifications and notices issued, lall transactions entered into and al suits and other proceedings instituted under the said Act shall continue and shall, so far as may be, be deemed to have been [respectively made, issued, entered into or instituted under this Act.

89. Construction of references to Act II of 1912.—All reference to the [Co-operative Societies Act, 1912, occurring in any enactment made by any authority in India and for the time being in force in Assam shall, in the appli- cation of any such enactment thereto, be construed as references to this A c t; and anything done, or any proceeding commenced in pursuance of such enactment on or after the commencement of this Act shall be deemed to have been done [or to have commenced and to have had effect as if the reference in such enact- ment to the Co-operative Societies Act, 1912, had been a reference to this Act, and no .such thing or proceeding shall be deemed to have been invalid on the ground that such enactment did not refer to this Act.

[ 90. Act VII of 1913 not to apply.—The provisions of the Indian Companies

Act, 1913 shall not apply to registered societies.

• 91. Acts of Societies, etc., not to be invalidated by certain defects.—(1) No

1 act of a registered society or of a managing or controlling body or of any officer or liquidator done in good faith in pursuance of the business of the society shall 8 be deemed to be invalid by reason only of some defect subsequently discovered | in the organisation of the society or in the constitution of any such body or in

1 the appointment or election of the officer or liquidator or on the ground that such officer or liquidator was disqualified from appointment. [ (2) No act done in good faith by any person appointed under this Act shall pe invalid merely by reason of the fact that his appointment has been cancelled l-

:t kpt 9 r ii consequence of any order subsequently passed under this Act. er

76

■ly ry

(3) The Registrar shall decide- whether any act was done in good faith in 'pursuance of the business of a society.

92. Power to exempt Societies from provisions of the Act.—The [State]¹ Government may, by general or special order, exempt any registered society, or class of registered societies from any of the provisions of this Act or may direct that such provisions shall apply to such society with such modifications as may be specified in the order.

93. Rules and bye-laws not to be deemed to go beyond the Act.—Rules

Cfi framed under this Act and bye-laws registered under this Act shall not be deemed » ■ - _ . . - - — . . « 9 „

ne :of control expressly provided for in the Act.

)S8

■ L- - - , ■ ~ b6 order and subject to such conditions, if any, as it may impose, exempt any society

B

;rs. i'to go beyond the provisions of this Act if their effect is not to lessen the degree

94. Power to exempt societies from conditions as to registration.—Notwith- standing anything contained in this Act, the [State]¹Government may by special from anj' of the requirements of this Act as to registration.

95. Power to order recoupment of expenditure.—Notwithstanding anything an contained in any law for the time being in force the [State]¹Government may, by a general or special order, require of every registered society or a class of regis- tered societies to make contribution of such sum annually to be fixed by the Regis- trar towards the recoupment of administrative expenditure incurred by the Govcrn-

27

297

SCHEDULE A

(See Section 83) CO-OPERATIVE DEMAND CERTIFICATE

Granted under Section 83 of the Assam Co-operative Societies' Act, 1950

(To be realised as an arrear of land revenue by the Revenue authority within whose jurisdiction the judgment debtor's property is situated).

Case No. of 19 District/Subdivision/Political Area.

In the matter of........................................................................................... ........... Versus

'•................................................. ...... . ...................... ••••••• ...... . ....... . ............................. . • • Whereas.......................has made a reference in writing to me complaining

that you...............................................................owe Rs........................... ................ my way of Principal and Rs................... by way of interest up to ............................... ...................... of 19....... and have evaded payment of the same and whereas a

notice of demand calling on you to pay the dues within the specified time

was served with notice to show cause and whereas you have not paid up

your dues specified in the notice and whereas you have not submitted any

explanation

your explanation is unsatisfactory.

of Section 83 of the Assam Co-operative

..... of 1949) do hereby order that the above

is due to the above named...............................

...........................who shall pay further interest

per cent per annum from............... together

Now therefore, I. under authority

Societies Act, 1949 (Assam Act....

mentioned sum of Rs......................

. ....... ....for the above named....... on the principal sum at the rate of with all costs till the date of realisation. I further order that right, title and interest of................................................... in the properties set out and described in the Schedule below be sold as an arrear of land revenue under the provisions of the Assam Land and Revenue

Regulation, and that, if the sale proceeds should be found insufficient to dis- charge the dues with subsequent interest at the above rate till the date of realisa- tion and costs in full, the balance be realised by attachment and sale of other movable and immovable property of the judgment debtor as an arrear of land revenue.

SCHEDULE B

(See Section 101) Vear No. Short title / Extent of repeal

1 2³⁴

1912 II The Co-operative Societies Act, 1912. The whole, with the exception of sub- section (a) of section 28, and of sub- section (i) of section 28, so far as it relates to the stamp duties specified in the second paragraph thereof.