Central Society, Development Bank
Amendments appended: 20 of 2003, 22 of 2004

THE CHATTISGARH
CO-OPERATIVE SOCIETIES ACT, 1960
[No. 17 of 1961]
Received the assent of the President on 28-04-1961, the assent first
published in M.P. Gazette on 12-05-1961.
An act to organise and develop co-operatives as democratic
instruments and people’s institutions based on self help mutual aid for
curbing exploitation and ensuring socio-economic development of
people with particular emphasis on weaker sections of society.
Be it enacted by the Madhya Pradesh Legislature in the Eleventh
Year of the Republic of India as follows:-
CHAPTER I
PRELIMINARY
Short title, extent
and commencement.

  1. (1) This Act may be called the Chhattisgarh Cooperative Societies Act, 1960 (No. 17 of 1961).
    (2) It extends to the whole of Chhattisgarh.
    (3) It shall come into force on such date as the State
    Government may, by notification, appoint.
    Definitions. 2. In this act, unless the context otherwise, requires,-
    (a) “Additional Registrar” means an Additional
    Registrar of Co-operative Societies appointed
    under section 3;
    (a-i) “Apex Society” means a Society which has as
    its members more than one Federal or Central
    societies and whose principal object is to
    provide facilities for operations of other
    societies affiliated to it and whose area of
    operation extends to the whole State of
    Chhattisgarh;
    (b) “Assistant Registrar” means an Assistant
    Registrar of Co-operative Societies appointed
    under section 3;
    (b-i) “Area of operation” means the area from
    which the membership is drawn or as specified
    in the byelaws of the society;
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    (c) “Bye-laws” means the bye-laws registered or
    deemed to have been registered under this Act
    and for the time being in force, and includes a
    registered amendment of the bye-laws;
    (c-i) “Central Society” means a District Cooperative Agriculture and Rural Development
    Bank or any other society whose area of
    operation is confined to a part of the State and
    which has as its object the promotion of the
    objects of the member societies, and which
    has at least five societies as its members;
    (c-ii) “Central Co-operative Bank” means a
    resource society registered or deemed to be
    registered under this Act, which is either
    licensed under the Banking Regulation Act,
    1949 (10 of 1949) or permitted by the Reserve
    Bank of India to do banking business till so
    licensed, and
    (i) has area of operation confined to a part of the
    State; and
    (ii) has as its principal object, the creation of funds
    and the obtaining of credit, goods or services
    for and providing credit, goods or services as
    loan to Co-operative Societies affiliated to it
    for agriculture, industrial and other allied
    purposes;
    (c-iii) “Company” means a Company as defined in
    section 3 of the Companies Act, 1956 (1 of
    1956);
    (c-iv) “Co-operative Union” means a registered
    society which has as its principal object the
    undertaking of co-operative education,
    propaganda, training and extension of cooperative services;
    (d) “Committee” means the Board of a
    management by whatever name called
    constituted under section 63;
    (d-i) “Co-operative Bank” means a State Cooperative Bank, a Central Co-operative Bank
    and a Primary Co-operative Bank, registered
    or deemed to be registered under the Act;
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    (e) “Co-operative Society with limited
    liability” means a society having the liability
    of its members limited by its bye-laws to the
    amount, if any, unpaid on the shares
    respectively held by them or to such amount
    as they may, respectively, undertake to
    contribute to the assets of the society in the
    event of its being wound up;
    (e-i) “Chief Executive” means an individual
    appointed under section 71 and who subject to
    superintendence, control and direction of the
    Committee has been entrusted by the
    Committee with the management of the affairs
    of the co-operative;
    (g) “Consumers’ Society” means a society
    formed with the object of obtaining or
    producing and processing and distributing
    goods to or performing other services for its
    members, as well as for other customers and
    dividing amount its members and customers in
    a proportion as may be laid down in the byelaws of such society, the profits accruing from
    such supply, production processing and
    distribution;
    (g-i) “delegate” means a person elected by a group
    of individual members to represent them in the
    general body of the society in accordance with
    the bye-laws of the society;
    (g-ii) “Deposit Insurance and Credit Guarantee
    Corporation” means the Deposit Insurance
    and Credit Guarantee Corporation established
    under the Deposit Insurance and Credit
    Guarantee Corporation Act, 1961 (No 47 of
    1961);
    (h) “Deputy Registrar” means a Deputy Registrar
    of Co-operative Societies appointed under
    section 3;
    (hh) “Development Bank” means a District Cooperative Agriculture and Rural Development
    Bank or the Chhattisgarh State Co-operative
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    Agriculture and Rural Development Bank
    registered or deemed to be registered under
    this Act;
    (i) “Family” means a person, his spouse, his
    children, dependent on him and his other
    relations dependent on him and jointly
    residing with him;
    (j) “Farming Society” means a registered society
    formed with the object of promoting
    development of land, better methods of
    cultivation and promotion of new agricultural
    technology, and includes a better farming
    society, tenant farming society, collective
    farming society, joint farming society,
    irrigation society, contract farming society and
    crop promotion society.
    (k) “Federal Society” means a society of which
    not less than fifty percent of the share capital,
    excluding Government share capital is held by
    societies;
    (l) “Financing Bank” means a society, the
    objects of which include the creation of funds
    to be lent to other societies or its individual
    members, and which includes a Development
    Bank and the State Co-operative Bank;
    (m) “General Society” means a society not falling
    under any of the heads (i) to (x) specified in
    sub-section (1) of section 10;
    (n) “Housing Society” means a society formed
    with the object of providing its members with
    residential accommodation;
    (n-i) “Industrial Society” means a society formed
    with the objects of promoting development of
    weavers, carpenters, metal workers, shoe
    makers or any other Society which aims at
    producing finished goods from raw materials
    of any kind;
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    (o) “Joint Registrar” means a Joint Registrar of
    Co-operative Societies appointed under
    section 3;
    (p) “Liquidator” means a person appointed under
    section 70;
    (q) “Marketing Society” means a society formed
    for the purpose of marketing agricultural or
    other produce and including among its objects,
    the supply of the requisites of such production;
    (r) “Member” means a person joining in the
    application for the registration of a society or a
    person admitted to membership after
    registration in accordance with this Act, the
    rules and the bye-laws applicable to such
    society and includes the State Government
    when it subscribes to the share capital of a
    society;
    (s) “Multi-purpose Society” means a society
    which includes amongst its objects any of the
    primary objects specified in any two or more
    of the clauses (g), (n), (v) and (y);
    (t) “Nominal Member” means a person admitted
    to membership of a society under section 20;
    (t-i)
    (u) “Other backward classes” means category of
    persons belonging to backward classes as
    notified by the State Government;
    (u-i) “Primary Society” means a society which is
    neither an Apex Society nor a Central Society;
    (u-ii) “Primary Agriculture Credit Cooperative
    Society” means a society organized with the
    main objective of making credit available for
    agriculture production and includes a Primary,
    Service Cooperative Society and Adimjati
    Sewa Sahakari Samiti;
    (u-iii) “Primary Co-operative Bank” means a
    resource society other than a village or urban
    resource society not registered as bank, the
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    objects of which include creation of funds to
    be lent to, and obtaining credit to be extended
    to members and which is licensed under
    Banking Regulation Act, 1949 (10 of 1949) or
    permitted by the Reserve Bank of India to do
    banking business till so licensed;
    (v) “Producers’ Society” means a society formed
    with the object of producing and disposing of
    goods as a collective property of its members
    and includes a society formed with the object
    of the collective disposal of the labour of its
    members;
    (w) “Processing Society” means a society formed
    with the object of producing goods by
    mechanical or manual process and includes an
    industrial society and a society for the
    processing of agricultural commodities;
    (x) “Registrar” means the Registrar of Cooperative Societies appointed under section 3;
    (x-i) “Representative” means a member of the
    society to represent the society in other
    societies;
    (x-ii) “Reserve Bank” means the Reserve Bank of
    India established under the Reserve Bank of
    India Act, 1934 (No. 2 of 1934):
    (y) “Resource Society” means a society formed
    with the object of obtaining for its members
    the credit, goods or services required by them
    and includes a service society and a primary
    credit society;
    (y-i) “Returning Officer” means an officer
    appointed by the Registrar general or special
    order for performing the duties of a Returning
    Officer under this Act or the rules made there
    under and includes an officer subordinate to
    the Returning Officer nominated in writing by
    him to perform the duties of Returning
    Officer;
    (y-ii) “Scheduled Area” means the area which has
    been declared under the Scheduled Area (State
    of Bihar, Gujrat, Madhya Pradesh & Orissa )
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    Order, 1977;
    (z) “Society” means a co-operative society
    registered or deemed to be registered under the
    Act;
    (z-i) “Specified Office” means the office of the
    President or Vice-president whatever the
    designation may be;
    (aa) “State Co-operative Bank” means the
    Chhattisgarh State Co-operative Bank
    Limited;
    (bb) “Student” means a person studying in any
    educational, vocational or training institution;
    CHAPTER II
    RIGISTRATION
    Registrar and other 3. (1) (1) The State Government shall appoint a person to
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    officer. be the Registrar of Co-operative Societies for the
    State and may appoint one or more officers of the
    following categories to assist him, namely:-
    (a) Additional Registrar of Cooperative Societies;
    (b) Joint Registrar of Cooperative Societies;
    (c) Deputy Registrar of Cooperative Societies;
    (d) Assistant Registrar of Cooperative Societies;
    (e) Such other categories of officers as may be
    prescribed.
    (2) The officer appointed to assist the Registrar
    shall, within such areas as the State
    Government may specify, exercise such
    powers and perform such duties conferred and
    imposed on the Registrar by or under this Act,
    as the State Government may, by special or
    general order, direct:
    Provided that no officer other than the
    Additional Registrar or the Joint Registrar shall be
    Directed to exercise the powers to hear appeals
    under section 78
    (3) The officers appointed to assist the Registrar shall be
    subordinate to him and shall work under his general
    guidance, supervision and control.
    Societies which may
    be registered.
  1. Subject to the provisions of this Act, a society which
    has as its objects the promotion of the economic
    interest of its members or their general welfare in
    accordance with co-operative principles or a society
    established with the object of facilitating the
    operations of such a society, may be registered under
    this Act.
    Registration of
    societies with
    limited or unlimited
    liability.
  2. A society may be registered with limited or
    unlimited liability;
    Provided that unless the State Government by
    a general or special order otherwise directs, the
    liability of a society of which another society is a
    member shall be limited.
    Conditions of
    registration.
  3. (1) No society, other than a society of which another
    society is a member, shall be registered under this
    Act unless it consists of at least twenty persons
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    competent to contract under section 11 of the Indian
    Contract Act, 1872( 9 of 1872) and belonging to
    twenty different families, not being near relations
    and, where the objects of the society include the
    creation of funds to be lent to its members, unless
    such persons, save where the Registrar by general or
    special order otherwise directs, reside in the same
    town or village or in a compact group of villages.
    Provided that a society formed exclusively for
    the benefit of students may be registered,
    notwithstanding that the members of such society
    may not have attained the age of majority according
    to the law to which they are subject:
    Provided further that the Registrar may relax
    the condition of minimum membership to that
    society which is organized for the welfare of the
    employees of any organization / establishment.
    Provided also that in case of a primary
    society, there shall be atleast 33 per cent, women
    members at the time of registration:
    Provided also that the Registrar may, for
    sufficient reasons, relax the conditions of the
    prescribed percentage of women members,
    (2) The word “limited” or its equivalent in any Indian
    language shall be the last word in the name of every
    society registered with limited liability under this
    Act.
    Application for
    registration.
  1. (1) For purposes of registration, an application to
    register a society shall be made to the Registrar in
    the prescribed form and shall be accompanied by
    four copies of the proposed bye-laws of the society.
    The person by whom or on whose behalf such
    application is made, shall furnish such information
    in regard to the society, as the Registrar may require.
    (2) (2) The application shall be signed,-
    (a) in the case of a society of which no other
    society is a member, by at least ten persons
    qualified in accordance with the requirements
    of section 6: and
    (b) in the case of a society of which a member is
    a registered society, by a duly authorized
    person on behalf of every such registered
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    society and where all the members of the
    society are not registered societies, by ten
    other members, or when there are less than
    ten other members, by all of them.
    Power of Registrar
    to decide certain
    questions.
  1. Where in connection with the formation, registration
    or continuance of a society or the admission of a
    person as a member of a society any question arises
    whether a person is an agriculturist or not or whether
    any person resides in a particular area or not or
    whether any person belongs to any particular class
    or occupation or not or such other question
    pertaining to the eligibility of any person to become
    a member of a society, such question shall be
    decided by the Registrar and his decision shall be
    final.
    Registration. 9. (1) If the Registrar is satisfied that a society has
    complied with the provisions of this Act and the
    rules and that its proposed bye-laws are not contrary
    to this Act or the rules, he may register the society
    and its bye-laws with such modifications as he may
    consider necessary:
    Provided that no society shall be registered, if
    in the opinion of the Registrar, it is likely to be
    economically unsound or is likely to have an adverse
    effect upon any other society.
    (2) Where the Registrar refuses to register a society or
    its bye-laws he shall communicate the order or
    refusal together with reasons therefor to the first
    signatory to the application.
    (3) The Registrar shall take a decision within ninety
    days from the date of receipt of an application for
    registration of a society:
    Provided that where there is a failure on the
    part of the Registrar to dispose of such application
    within the period aforesaid the Registrar shall within
    the period of fifteen days form the date of expiration
    of that period, refer the application to the next higher
    officer and where the Registrar himself is the
    Registering officer to the State Government, who or
    which, as the case may be, shall dispose of the
    applications within two months from the date of its
    receipt and on the failure of such higher officer or
    State Government, as the case may be, to dispose of
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    the application within that period, the society and its
    bye laws shall be deemed to have been registered.
    (4) The Registrar shall maintain register of societies
    registered or deemed to be registered under this Act.
    Classification of
    Societies.
  1. (1) The Registrar shall classify all societies under one or
    more of the following heads, namely :-
    (i) Consumers’ Society;
    (ii) Farming Society;
    (iii) Federal Society;
    (iv) Central Society;
    (v) Housing Society;
    (vi) Marketing Society;
    (vii) Multipurpose Society;
    (viii) Producers’ Society;
    (ix) Processing Society;
    (x) Resource Society;
    (xi) General Society.
    (xii) Industrial Society;
    Provided that a society formed with the object
    of facilitating the operations of any particular class
    of societies shall be classified as a society of that
    class
    (1-a) The Registrar may further classify the societies
    falling under any of the heads specified in subsection (1) under the following heads, namely:-
    (a) Apex Society
    (b) Central Society
    (c) Primary Society
    (2) The Registrar for reasons to be recorded in writing
    may alter the classification of any society from one
    head to another.
    (3) The decision of the Registrar in respect of
    classification of societies shall be final.
    Amendment of
    bye-laws of society.
  2. (1) No amendment of the bye-laws of a society shall be
    valid until the same has been registered under this
    Act, for which purpose four copies of the proposed
    amendment shall be forwarded in the prescribed
    manner to the Registrar.
    (2) If the Registrar is satisfied that the proposed
    amendment is not contrary to the Act or the rules
    and is not against the aims and objects of the Society
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    or any of the existing bye-laws he may register the
    amendment.
    (3) The Registrar shall not refuse to register an
    amendment of the bye-laws without giving an
    opportunity to the applicant society, for being heard.
    If he decides to refuse to register an amendment, he
    shall communicate the order of refusal together with
    reasons therefore to the society within forty-five
    days from the date of receipt of the proposal:
    Provided that, where there is a failure on the
    part of the Registrar to dispose of such application
    within the period aforesaid, the Registrar shall,
    within a period of fifteen days from the date of
    expiration of that period, refer the application to the
    next higher officer and where the Registrar himself
    is the registering officer, to the state Government,
    who or which, as the case may be, shall dispose of
    the application within two months from the date of
    its receipt and on the failure of such higher officer or
    the State Government, as the case may be, to dispose
    of the application within that period, the amendment
    of the byelaws shall be deemed to have been
    registered.
    Power to direct
    amendment of
    bye-laws.
  1. (1) Not-withstanding anything contained in this Act, or
    the rules or byelaws, on the request of more than
    fifty per cent of the members of the society or if the
    Registrar considers that an amendment of the
    byelaws of society is necessary or desirable in the
    interest of such society, he may, by an order in
    writing to be served on the society in the prescribed
    manner, require the society to make the amendment
    within sixty days.
    (2) If the society fails to make the amendment within
    the time specified by the Registrar, the Registrar
    may after giving the society an opportunity of being
    heard and after soliciting the opinion of such Apex
    Federal Society, as may be notified by the State
    Government, register such amendment and issue a
    certified copy there of to such society:
    Provided that the provisions of this section
    shall not apply in the case of Urban Co-operative
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    Banks.
    Change of name. 13. A society may, by an amendment of its bye-laws,
    change its name, but such change shall not affect
    any right or obligation of the society, or of any of its
    members, or past members, or deceased members, or
    render defective any legal proceedings by or against
    the society, and any legal proceedings which might
    have been continued or commenced by or against
    the society by its new name.
    Certain certificates
    to be conclusive
    evidence.
  1. (1) Where a society is registered or deemed to be
    registered under this Act, the Registrar shall issue a
    certificate of registration signed by him and such
    certificate shall be conclusive evidence that the
    society therein mentioned has been duly registered
    unless it is proved that the registration of the society
    has been subsequently cancelled:
    Provided that where a society is deemed to be
    registered under this Act, the Registrar shall issue a
    certificate of registration within sixty days from the
    date on which it was deemed to be registered.
    (2) No society shall commence business unless it has
    obtained a certificate of registration under subsection (1) and every member of such society
    carrying on business in contravention of this subsection shall be severally liable for all liabilities
    incurred in such business.
    (3) When the Registrar registers an amendment of the
    bye-laws of a society under section 11 or section 12
    he shall issue to the society a copy of the
    amendment registered by him, which shall be
    conclusive evidence that the same is duly registered.
    (4) Where a society changes its name under section 13,
    the Registrar shall amend the certificate of
    registration accordingly, which shall be conclusive
    evidence that the change of name is duly registered.
    Change of liability
    of society from
    limited to unlimited
    or vice-versa.
  2. (1) Subject to the provisions of section 11, a society
    may by an amendment of its bye-laws change its
    liability from limited to unlimited or from unlimited
    to limited.
    (2) No such amendment shall be registered by the
    Registrar unless he is satisfied that,-
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    (i) Twenty-one day’s notice has been given to
    every member of the society and to any
    person or class of persons whose interest
    may, in the opinion of the Registrar, be
    affected by the change; and
    (ii) With respect to every such member or person
    who, in the opinion of the Registrar, is
    entitled to notice,-
    (a) either his assent has been obtained to
    the change or is deemed to have been
    obtained by virtue of his failure to
    object within twenty one days from the
    date of the notice,
    (b) if he objects;
    (i) he is allowed to withdraw his
    share if he is a member, or
    (ii) that his debt or claim has been
    discharged or has been
    determined or has been secured
    to the satisfaction of the
    Registrar within three month
    from the date of receipt of
    objection if he is a creditor:
    Provided that the Registrar may in the case of
    any person or class of persons, for special reasons, to
    be recorded, dispense with the notice required by
    this sub-section.
    Reorganization of
    Societies.
  1. (1) In this section,-
    (a) “affected society” means a society
    which decides to reorganize itself in any
    of the manners specified in sub-section
    (2); and
    (b) “resulting society” means a society ,–
    (i) which is formed as a result of
    amalgamation under clause (i) of
    sub-section (2) or
    (ii) to which the assets and liabilities of
    the affected societies are
    transferred in whole or in part
    under clause (ii) sub-section (2); or
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    (iii) which is formed as a result of
    division under clause (iii) of subsection (2); or
    (iv) which is the result of change of
    class as provided in clause (iv) of
    sub-section (2).
    (2) A society may, by resolution passed by two-thirds
    majority of the members present and voting at a
    special general meeting held for the purpose, decide
    to reorganize itself by-
    (i) amalgamating itself with another society; or
    (ii) transferring its assets and liabilities in
    whole or in part to any other society; or
    (iii) dividing itself into two or more societies; or
    (iv) converting itself into a class of society, the
    object of which is materially different from
    that under which it has been classified
    under the Act:
    Provided that no such decisions shall take
    effect unless it is approved by the Registrar;
    Provided further than in case of a Cooperative Bank, the Registrar shall not give his
    approval save with the previous sanction in writing
    of the Reserve Bank;
    (3) Notwithstanding anything contained in sub-section
    (2) where the Registrar is satisfied that it is essential
    in the public interest or in the interest of the
    members of the affected societies or necessary to
    secure the proper management of any society, he
    may direct that any society or societies shall
    reorganize itself or themselves in any one or more of
    the modes indicated in sub-section (2):
    Provided that, in the case of a Co-operative
    Bank, the Registrar shall not issue any direction save
    with the previous sanction in writing of the Reserve
    Bank;
    Provided further that before a final order
    under this sub-section is passed by the Registrar
    every society concerned shall be given an
    opportunity of expressing its opinion on the
    reorganization proposals.
    (4) The procedure for reorganization of a society in
    accordance with the decision under sub-section (2)
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    or the direction of the Registrar under sub-section
    (3), as the case may be, shall be such as may be
    prescribed.
    (5) If any such reorganization under sub-section (2) or
    (3) is likely to affect in any manner the interest of
    any person, notice thereof shall be given to all such
    persons and every such person shall be given an
    option, to be exercised within a month from the date
    of the issue of such notice, of either becoming a
    member of the resulting society or societies or of
    demanding the payment of the share or interest or
    dues in respect of the affected society, as the case
    may be.
    (6) No reorganization shall be final until the assent of
    every such person whose interest is likely to be
    affected, has been obtained or deemed to have been
    obtained by virtue of his failure to exercise the
    option given to him, and further, unless all the
    claims of persons who have exercised the option of
    demanding the payment of their shares or interests
    or dues under sub-section (5) have been met in full.
    (7) Every resulting society under this section shall have
    such constitution, property, powers, rights, interests,
    authorities, duties and obligations as may be
    specified in the scheme of reorganization and every
    such scheme of reorganization may contain such
    consequential, incidental and supplemental
    provisions as may, in the opinion of the Registrar, be
    necessary to give effect to such scheme.
    (8) Notwithstanding anything contained in the Transfer
    of Property Act, 1882 (4 of 1882) or the Indian
    Registration Act, 1908 (16 of 1908), a resolution of
    a society approved by the Registrar under subsection (3) shall be sufficient conveyance to vest the
    assets and liabilities of each affected society in the
    resulting society or societies concerned, such vesting
    being subject only to the provisions of the scheme of
    reorganization.
    (9) The reorganization of societies shall not in any
    manner, whatsoever affect any right or obligation of
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    the resulting society or societies or render defective
    any legal proceedings by or against the society or
    societies and any legal proceedings that might have
    been continued or commenced by or against the
    society or the societies, as the case may be, before
    the reorganization may be continued or commenced
    by or against the resulting society or societies.
    (10) Where any two or more societies have been
    amalgamated or a society has been divided or
    converted, the registration of such society or
    societies shall be deemed to have been cancelled on
    the date of registration of the amalgamated society
    or of the converted society or of the new societies
    into which the society may have been divided.
    (11) Where a development bank has been reorganized by
    amalgamation with a central bank, the amalgamated
    bank shall in respect of all transactions relating to
    the development bank business made on and after
    such amalgamation be deemed to be a development
    bank within the meaning of the law relating to
    development bank for the time being in force.
    Explanation.- For the purposes of this
    section “Central Bank” means a society with the
    words “Central Bank” or “District Bank” as part of
    its name and whose main object is to finance
    societies which are members of it and lie within a
    specified area.
    (12) Every scheme of such reorganisation shall be
    published in the official Gazette for general
    information.
    Collaboration by
    Societies.
    16-A. Any society may, enter into the collaboration with
    any Government Undertaking or any undertaking
    approved by the State Government for carrying on
    any specific business including industrial
    investment, financial aid or marketing and
    management expertise.
    Partnership of
    Societies.
    16-B Any two or more societies may by resolution passed
    at general meeting by a majority of members present
    and voting in each such society enter into a contract
    of a partnership for carrying out any specific
    business permissible under the byelaws on such
  • 18 –
    terms and conditions as may be mutually agreed
    upon. Where such partnership requires creation of a
    new organization, the participating society shall be
    its members.
    Government’s
    power to make
    scheme of
    reorganization in
    the public interest.
    16-C (1) Notwithstanding anything contained in this Act or
    the Rules made thereunder, if the State Government,
    on receipt of a report from the Registrar or
    otherwise, is satisfied that in the public interest it is
    necessary to reorganize any society or societies for
    the purpose of securing proper implementation of
    development programmes, the State Government, as
    it may deem necessary, may make such scheme of
    reorganisation and issue orders to implement above
    scheme:
    Provided that in case of a Co-operative Bank,
    prior sanction in writing of the Reserve Bank shall
    be necessary.
    (2) There shall be the provisions in scheme of
    reorganisation regarding :-
    (a) Method of reorganization;
    (b) Procedure for reorganization;
    (c)Membership, registration, management, assets
    and liabilities, powers, rights, interests, duties,
    staff and conditions of employment of such
    society or societies which are made after
    reorganisation ;
    (d) Such other consequential, incidental and
    supplementary provisions as may be necessary;
    (e) Any other subject as may be deemed necessary
    by the State Government.
    (3) The State Government may modify or cancel any
    reorganisation scheme made under sub-section (1).
    (4) The provisions regarding every reorganisation
    scheme and the orders issued by the State
    Government shall be binding upon the interested
    parties.
    (5) Every scheme of such reorganisation shall be
    published in the official Gazette for general
    information.
    Compromise or
    arrangement for
  1. (1) Notwithstanding anything contained in this Act, or
    the rules made thereunder where a compromise or
  • 19 –
    repayment of
    liabilities and
    reconstruction of
    societies.
    arrangement is proposed between.-
    (a) a society and its creditors or any class of
    them, and
    (b) a society and its members, the Registrar may
    on the application of the society or of any
    member or of any creditor of the society or,
    in the case of a society which is being wound
    up by the liquidator, order a meeting of the
    members, or creditors or both, as the case
    may be, to be called, held and conducted in
    such manner as may be prescribed:
    Provided that the Registrar may, on his own
    motion, order such a meeting to be called for the
    purpose of affecting a compromise or arrangement.
    (2) If a majority in number representing three-fourths of
    the members or three-fourths of the total amount of
    valuation due to creditors, as the case may be,
    present and voting in person at the meeting agree to
    any compromise or arrangement the compromise or
    arrangement shall, if confirmed by the Registrar, be
    binding on all members or all the creditors, as the
    case may be, and also on the society, or in the case
    of a society which is being wound up, on the
    liquidator;
    Provided that the Registrar shall not confirm
    a compromise or arrangement unless he is satisfied
    that all the members or creditors, as the case may be,
    whose interests are affected by such compromise or
    arrangements, had notice of such meeting;
    Provided further that in case of Co-operative
    Bank the Registrar shall not confirm the
    compromise, or arrangement, save with the previous
    sanction in writing of the Reserve Bank.
    (3) When an order canceling a meeting is passed under
    sub-section (1) or the proviso thereof for considering
    any compromise or arrangement between a society
    and its creditors or any class of them, the Registrar
    may give notice of such order to a Civil Court in
    which proceedings, whether instituted before or after
    the order, in respect of any liability of the society
    due to a creditor to whom a copy of the order is
  • 20 –
    posted, are pending and on receipt of such notice the
    Civil Court shall stay the proceedings, If no such
    compromise of arrangement is confirmed under subsection(2) the Registrar shall inform the Civil Court
    accordingly and the proceedings which may have
    been stayed, shall be resumed.
    (4) If a compromise or arrangement between a society
    and its creditors or any class of them is confirmed
    under sub-section (2) the proceedings, if any, stayed
    under sub-section (3) shall abate and no proceedings
    shall lie in a Civil Court in respect of any liability of
    the society to which the compromise or arrangement
    relates.
    (5) The Registrar may, with the previous approval of the
    State Government, exempt any class of creditors
    from the operation of this section or any provisions
    thereof.
    (6) A compromise or arrangement confirmed by the
    Registrar shall not be called in question in any Civil
    Court.
    (7) If a creditor in respect of whom a compromise or
    arrangement has been confirmed by the Registrar
    under sub-section (2), fails to receive the amount
    payable to him under such compromise or
    arrangement after due notice to do so within the
    period specified in such notice, the society or the
    liquidator, as the case may be, shall deposit the
    amount in such manner as may be directed by the
    Registrar. On the making of such deposit the amount
    payable to the creditor under the compromise or
    arrangement shall be deemed to have been paid to
    the extent of the deposit.
    (8) A compromise or an arrangement between a society
    and its creditors or any class of them confirmed by
    the Registrar under sub-section (2) shall cease to be
    in force as soon as the whole amount of the liability
    determined thereunder has been or is deemed to
    have been paid whether under the provisions of this
    section or otherwise notwithstanding that the period
    originally stipulated for the discharge of such
    liability has not expired.
    (9) After such compromise or arrangement has ceased to
    be in force no further claim shall remain against the
  • 21 –
    society, or against any property, movable or
    immovable which it may acquire thereafter, in
    respect of the liability which had been the subject of
    the compromise or arrangement, and the society
    shall be free to conduct its normal business.
    Action and liability
    of Banks under
    moratorium.
    17-A Where an order of moratorium has been made by the
    Central Government under sub-section (2) of section
    45 of the Banking Regulation Act, 1949 (No. 10 of
    1949) in respect of Co-operative Bank, the Registrar
    with the previous approval of the Reserve Bank in
    writing may, during the period of moratorium,
    prepare a scheme,-
    (i) for the reconstruction or re-organisation of
    the Co-operative Bank; or
    (ii) for the amalgamation of the Co-operative
    Bank with any other Bank.
    Liability of new
    Bank to repay to the
    Deposit Insurance
    Corporation.
    17-B Notwithstanding anything contained in this Act,
    where a Co-operative Bank being an insured bank
    within the meaning of the Deposit Insurance
    Corporation Act, 1961 (No.47 of 1961) is
    amalgamated or in respect of which a scheme of
    compromise or arrangement or of reconstruction or
    reorganisation has been sanctioned and the Deposit
    Insurance Corporation has become liable to pay to
    the depositors of the insured bank under sub-section
    (2) of section 16 of that Act, the bank with which
    such insured bank is amalgamated or the new Cooperative bank formed after such amalgamation or,
    as the case may be, the insured bank or transferee
    bank shall be under an obligation to repay to the
    Deposit Insurance Corporation in the circumstances,
    to the extent and in the manner referred to in section
    21 of the Deposit Insurance Corporation Act, 1961
    (No. 47 of 1961)
    Cancellation of
    registration.
    18 (1) The Registrar shall make an order cancelling the
    registration of a society if it transfers the whole of its
    assets and liabilities to another society, or
    amalgamates with another society, or divides itself
    into two or more societies or it is de-registered under
    the provisions of sub-section (1) of section 24 or it is
    wound up under section 102. The society shall, from
    the date of such order of cancellation, be deemed to
    be dissolved and shall cease to exist as a corporate
  • 22 –
    body.
    (2) Notwithstanding anything contained in this Act if
    any proceedings relating to the winding up or
    dissolution of a society are pending immediately
    before the commencement of this Act, such
    proceedings shall after such commencement be
    disposed of in accordance with the provisions of the
    law under which such society was registered or
    deemed to be registered.
    De-registration of
    societies.
    18-A (1) If the Registrar is satisfied that any society is
    registered on misrepresentation made by applicants,
    or where the work of the society is completed or the
    purposes for which the society has been registered
    are not served, he may, after giving an opportunity
    of being heard to the committee, de-register the
    society.

(2) When a society is de-registered under the provisions
of sub-section (1), the Registrar may,
notwithstanding anything contained in this Act,
make such incidental and consequential order
including appointment of official assignee as the
circumstances may require.
(3) Subject to the rules made under this Act, the official
assignee shall realize the assets and liquidate the
liabilities within a period of one year from the date
he takes over the charge of property, assets, books,
records and other documents. The period aforesaid
may, at the discretion of the Registrar, be extended
from time to time, so however, that the total period
does not exceed three years in the aggregate.
(4) The official assignee shall be paid such
remuneration and allowances as may be prescribed.
(5) The powers of the Registrar under sub-section (1)
and (2) shall not be exercised by any officer below
the rank of a Joint Registrar of Co-operative
Societies.
CHAPTER III
MEMBERS, THEIR RIGHTS, LIABILITIES AND PRIVILEGES

  • 23 –
    Persons who may
    become members.
    19 (1) No persons shall be admitted as a member of a
    society except the following, namely:-
    (a) an individual competent to contract under
    section 11 of the Indian Contract Act, 1872
    (No. 9 of 1872);
    (b) any other society;
    (c) a public trust registered under the Chhattisgarh
    Public Trusts Act, 1951 (No. 30 of 1951);
    (d) a firm, company or any other body corporate,
    not having minors as partners or directors,
    registered established or constituted, as the
    case may be, under any law for the time being
    in force;
    (e) a society registered under the Chhattisgarh
    Societies Registration Act, 1959 (No. 1 of
    1960), as may be approved by the State
    Government in this behalf by general or
    special order;
    (f) the State Government:
    Provided that the provisions of clause (a)
    shall not apply to,–
    (i) an individual seeking admission to a
    society exclusively formed for the benefit
    of students;
    (ii) a minor acting through a guardian
    appointed by the Court.
    (2) Notwithstanding anything to contrary in this Act or
    rules or in the byelaws of a society, where the State
    Government has contributed to the share capital of a
    society, the liability of the State Government shall
    be limited to the face value of the shares held by it.
    (2-A) Notwithstanding anything contained in this Act or
    rules made there under or in the byelaws of a
    resource society or consumers society, as the case
    may be, if any person duly qualified for admission
    as a member under the provisions of this Act and the
    byelaws of that Society makes an application for
    membership of such Society he shall be deemed to
    have been admitted as a member of such Society
    from the date of receipt of the application in the
    office thereof;
    Provided that the Registrar may, either on
    his own motion at any time or on an application by
  • 24 –
    the society or any aggrieved person made within
    fifteen days from the aforesaid date and after giving
    reasonable opportunity to the society or person
    concerned by order, declare such person as not
    eligible for membership of such society for the
    reasons mentioned therein, within forty five days
    from the date of receipt of application by the
    Registrar.
    (3) Where a student, who is not competent to contract
    under section 11 of the Indian Contract Act, 1872 ( 9
    of 1872), desires to become a member of a society
    formed exclusively for the benefit of students, his
    application for the registration of a society or his
    application for membership shall be accompanied by
    a written undertaking from his guardian or other
    person competent to contract under section 11 of the
    said Act in the prescribed form, in respect of the
    liability of the student as a member.
    (4) Where a person is refused admission as a member in
    a society, the decision refusing admission shall be
    communicated by the society to that person within
    thirty days of the date of such decision.
    (5) No society shall, without sufficient cause, refuse
    admission to membership to any person, duly
    qualified there for under the provisions of this Act
    and the byelaws of the society.
    (6) Any person aggrieved under sub-section (4) or subsection (5) may appeal to the Registrar within ninety
    days of the date of rejection.
    (7) The decision of the Registrar in appeal shall be final
    and the Registrar shall communicate his decision to
    the parties within thirty days from the date thereof.
    Disqualifications of
    member.
    19-A No person shall be eligible for admission as member
    and any member shall cease to be a member of a
    society, if –
    (a) he is an applicant to be adjudicated or is an undischarged insolvent;
    (b) he has been sentenced for an offence involving
    moral turpitude and a period of five years has
    not elapsed from the date of expiry of
    sentence;
    (bb) he has been sentenced for an offence under
    the provisions of the Protection of Civil Rights
  • 25 –
    Act, 1955 (No. 22 of 1955) and a period of six
    years has not elapsed from the date of expiry
    of sentence;
    (c) he or any member of his family, having
    common interest with him, carries on business
    similar to one carried on by the society:
    Provided that the provisions of clause (b)
    shall not apply to a person seeking admission as
    member of a society exclusively formed or to be
    formed for the reclamation of Vimukta Jatis.
    (d) If he is disqualified under section 48-A of the
    Act:
    (e) if he is a person who has been dismissed from
    the service of any co-operative institution or
    Government service.
    (f) In case of a Primary Agriculture Credit Cooperative Society, he is not a Bhumiswami,
    occupancy tenant or a Government lessee
    holding agricultural land;
    Explanation.- For the purposes of this sub-section-
    (i) “Vimukta Jatis” means such tribes as the
    State Government may, from time to time, by
    general or special order, declare as Vimukta
    Jatis for the purpose of this sub-section;
    (ii) the business carried on by a trader including
    that of money lending shall be deemed to be
    similar to the business carried on by a
    marketing society.
    Disqualification for
    membership of
    committee and for
    representation.
    19-
    AA
    No Person shall be eligible for election as a member
    of the committee of a society and shall cease to hold
    his office as such if he suffers from such
    disqualification as may be prescribed. No society
    shall elect any member as its representative to the
    committee of any other society or to represent the
    society in other society, if he suffers from such
    disqualification, as may be prescribed:
    Provide that, if a member suffers from any
    of the disqualification prescribed under this sectionEffect of subsequent
    disabilities.
    19-B If any person having been admitted as a member of a
    society subsequently becomes subject to any of the
  • 26 –
    disqualifications specified in section 19-A such
    person shall cease to be a member of the society and
    the Registrar shall declare his seat to be vacant.
    Expulsion of
    members.
    19-C (1) The committee may, by a resolution passed by
    three-fourth majority of the members present and
    voting at a meeting held for the purposes, expel a
    member if he,-
    (a) intentionally does any act likely to injure the
    credit of the society or bring it to disrepute ;
    or
    (b) wilfully deceives the society by false
    statements; or
    (c) carries on any business which comes or is
    likely to come into conflict with the business
    carried on by the society; or
    (d) persistently makes default in payment of his
    dues or fails to comply with any provisions of
    the bye-laws;
    Provided that no such resolution shall be
    valid unless the member concerned has been given
    seven day’s notice, either personally or by registered
    post, of the proposal to expel him and has been
    given an opportunity to represent his case to the
    committee.
    (1-A) Any person aggrieved by the resolution of the
    Committee under sub-section (1) may appeal before
    the Registrar within 30 days of the communication
    of such resolution.
    (2) Notwithstanding anything contained in the Act, or
    rules or bye-laws made there under, where it appears
    to the Registrar that it is necessary and desirable in
    the interest of the society to expel a member from
    the society for his indulging in any of the activities
    specified in sub-section (1), he may call upon such
    member and the society, to explain within a period
    to be specified by him, why such member should not
    be expelled from the society. If the member or
    society fails to submits his or its explanation, within
    the specified period or after considering the
    explanation, if received, the Registrar may pass an
    order expelling a member from the society
    (3) No person who has been expelled shall be eligible
    for re-admission as a member of the co-operative for
  • 27 –
    a period of one year from the date of such expulsion.
    (4) Expulsion of a member from a society may involve
    forfeiture of shares held by the member in such
    society.
    Nominal members. 20 Notwithstanding anything contained in section 19, a
    society may admit any person as a nominal member
    who shall have no share either in the management or
    profits of a society and shall not be subject to any
    contributory liability in the case of winding up the
    society.
    No rights of
    membership to be
    exercised till due
    payments are made.
    21 No member shall exercise the rights of a member
    unless he has made such payment to the society in
    respect of membership or acquired such interest in
    the society as may be prescribed or as may be
    specified in the bye-laws of such society.
    Votes of members. 22 (1) Every member of the society shall have one vote in
    the affairs of the society.
    (2) (a) The voting right of federal society shall be so
    regulated that the members, which are
    societies, do not have less than four-fifths of
    the total number of votes in the general
    meeting of such society.
    (b) In case of federal society the voting rights of
    individual members (which term shall include
    public trust, firm, company or body corporate,
    society registered under the Chhattisgarh
    Society Registrikaran Adhiniyam, 1973 (No 44
    of 1973), and State Government but shall not
    include a co-operative society) shall be
    regulated in such manner as may be prescribed.
    (3) every affiliated co-operative society through its
    properly authorised representative and every
    delegate referred to in clause (b) of sub-section (2)
    shall have one vote in the general meeting.
    (4) The quorum for the meeting shall, unless otherwise
    provided in the byelaws of a society, be one-fifth of
    the total number of delegates and representatives of
    the societies:
    Provided that the delegates shall not at any
    time in the meeting exceed one-fifth of the member
    representatives of the societies.
    (5) The elections of delegates shall be held in
    accordance with the provisions prescribed for
  • 28 –
    election of the members of the committee.
    (6) Any vacancy of a delegate caused on account of
    cessation of membership or otherwise, shall be filled
    in by delegates by co-opting one of the individual
    members of the group to which the vacancy relates.
    (7) unless otherwise directed by the Registrar in respect
    of any particular society the delegates on the
    committee shall not at any time exceed one-third of
    the number of representatives of societies(fractions
    being neglected)
    (8) In the case of equality of votes the Chairman shall
    have a second or casting vote.
    Manner of
    exercising vote.
  1. (1) Every member of a society shall exercise his vote in
    person and no member shall be permitted to vote by
    proxy:
    Provided that subject to any rules made
    under this Act,-
    (i) (a) a society which is a member of another
    society may appoint one of its members as
    a representative to vote on its behalf,
    (b) a group of individual members formed by
    the society in accordance with its byelaws may elect one of the members in the
    group as a delegate to vote on their behalf.
    (ii) the State Government may nominate one of
    its officers as its representative, to vote or
    otherwise participate in its behalf in the
    affairs of the society of which such society or
    the State Government is a member;
    (iii) a public trust which is a member of a society
    may appoint, in writing, any one of its
    trustees to vote on its behalf;
    (iv) a firm which is a member of a society may
    appoint, in writing, any one of it major
    partners to vote on its behalf; and
    (v) a company or any other body corporate which
    is a member of a society may appoint in
    writing, any of its directors or officers to vote
    on its behalf.
    (2) Where a share is held jointly by more than one
    person and if,-
    (i) in respect of such share a share certificate is
  • 29 –
    issued by the society, the person whose name
    stands first in such share certificate; and
    (ii) in respect of such share no share certificate is
    issued by the society, the person whose name
    stands first in the register of members
    maintained by such society;
    shall have the right to vote.
    Restriction on
    holding of share
    capital by a member
    24 In any society, no member, other than the State
    Government or any other society, shall,-
    (a) hold more than such portion of the total
    share capital of the society not exceeding
    one-fifth thereof as may be prescribed; or
    (b) have or claim any interest in the shares of
    the society exceeding twenty thousand
    rupees;
    Provided that the State Government may,
    by notification, specify in respect of any class of
    societies a maximum exceeding one-fifth of the
    share capital or twenty thousand rupees, as the case
    may be.
    Restrictions on
    transfer of shares or
    interest.
    25 (1) The transfer of a share or interest of a member in the
    share capital of a society shall be subject to the
    restrictions as to the maximum holdings specified in
    section 24.
    (2) No transfer by a member of his share or interest in a
    society shall be valid unless,–
    (a) the member has held such share or interest
    for not less than one year;
    (b) the transfer is made to the society or to a
    member of the society; and
    (c) the transfer is approved by the committee.
    Transfer of interest
    on death of member.
    26 (1) On the death of a member, a society may transfer the
    share or interest of the deceased member to the
    person nominated in accordance with the rules made
    in this behalf, or, if there is no person so nominated,
    to such person as may appear to the Committee to be
    the heir or legal representative of the deceased
    member, or pay to such nominee, heir or legal
    representative, as the case may be, a sum
    representing the value of such member’s interest, as
    ascertained in accordance with rules or bye-laws.
    (2) A society may pay all other moneys due to the
  • 30 –
    deceased member from the society to such nominee,
    heir or legal representative, as the case may be.
    (3) All transfers and payments made by a society in
    accordance with the provisions of this section shall
    be valid and effectual against any demand made
    upon the society by any other person.
    Share or deposit or
    interest not liable to
    attachments.
    27 Subject to the provisions of section 39 the share or
    interest or deposit of a member in the capital or
    working capital of society or in the loan stock issued
    by a housing society or in the funds raised by a
    society from its members by way of savings deposit
    or by compulsory deductions made by it from wages
    or in the form of surcharge on the value of sale or
    supply of goods to members, shall not be liable to
    attachment or sale under any decree or order of a
    court for or in respect of any debt or liability
    incurred by the members or past members and
    accordingly neither a Receiver under the Provincial
    Insolvency Act, 1920 (No. 5 of 1920), nor any such
    person or authority under any corresponding law for
    the time being in force shall be entitled to , or have
    any claim on such share or interest or deposit.
    Rights of members
    to see books, etc.
    28 (1) Every society shall keep open to inspection for its
    members free of any charge, at all reasonable times
    at the registered address of society,-
    (a) a copy of this Act;
    (b) a copy of the rules;
    (c) a copy of the bye-laws of the society;
    (d) a register of members,-
    (e) the last audited annual balance sheet, the profit
    and loss account; and
    (f) the minutes of the general meetings.
    (2) All registers and record of a society except books
    and other documents relating to accounts other than
    one’s own shall be open to inspection in the office of
    the society by any member of such society on
    payment of such fee as may be specified in the byelaws.
    (3) Subject to such conditions and on payment of such
  • 31 –
    fees as may be specified in the bye-laws, the society
    shall, on an application made by any member thereof
    grant him a certified copy of such records or
    registers or extracts thereof.
    Liability of a past
    member or estate of
    deceased member.
    29 (1) Subject to the provisions of sub-section (2), the
    liability of a past member or of the estate of a
    deceased member of a society for the debts of the
    society as they stood:-
    (a) in case of a past member, on the date on
    which he ceased to be a member, and
    (b) in case of a deceased member, on the date of
    his death;
    shall continue for a period of two years from such
    date.
    (2) Where a society is ordered to be wound up under
    any provisions of this Act, the liability of a past
    member or of the estate of a deceased member who
    ceased to be a member or died, within two years
    immediately preceding the date of the order for
    winding up shall continue until the entire liquidation
    proceedings are completed; but such liability shall
    extend only to the debts of the society as they stood
    on the date of his ceasing to be a member or of his
    death as the case may be.
    Insolvency of
    members.
    30 Notwithstanding anything contained in the
    Provincial Insolvency Act, 1920 (5 of 1920), in an
    insolvency proceeding against a member of a
    society, the dues of the society shall have priority
    over all other dues except those payable to
    Government.
    CHAPTER IV
  • 32 –
    DUTIES, PRIVILEGES, PROPERTYAND FUNDS OF SOCIETIES
    Societies to be body
    corporate.
    31 The registration of a society shall render it a body
    corporate by the name under which it is registered,
    having perpetual succession and a common seal, and
    with power to hold property, enter into contracts,
    institute and defend suits and other legal proceedings
    and to do all things necessary for the purposes for
    which it was constituted.
    Address of society
    and display of name.
    32 (1) Every society shall have an address registered in
    accordance with the rules to which all notices and
    communications may be sent, and shall send a notice
    in writing to the Registrar of any change therein
    within thirty days of the change.
    (2) Every society shall display its name and the address
    of its registered office and the words “Registered
    Under Chhattisgarh Co-operative Societies Act,
    1960” in legible characters in conspicuous position-
    (a) at every office or place at which it carries on
    business;
    (b) in all notices and other official publications;
    (c) on all its contracts, business letter, orders for
    goods, invoices, statements of account,
    receipts and letters of credit; and
    (d) on all bills of exchange, promissory notes,
    endorsements, cheques and orders for money
    it signs or that are signed on its behalf.
    (3) The name of every society shall contain the words
    “Co-operative” and “limited” or their equivalent in
    official language of the State.
    Register of members 33 (1) Every society shall keep a register of its members
    and enter therein the following particulars, namely:-
    (a) the name, address and occupation of each
    member;
    (b) the share held by each member in the case of a
    society having share capital;
    (c) the date on which each person was admitted as
    a member;
    (d) the date on which any person ceased to be a
    member; and
    (e) such other particulars as may be prescribed:
    Provided that, where a society has under this
  • 33 –
    Act, permitted a member to transfer his share or
    interest on death, to any person, the register shall
    also show against the member concerned the name
    of the person entitled to the share or interest of the
    member and the date on which the nomination was
    recorded.
    (2) The register shall be prima facie evidence of the date
    on which any person was admitted to the society as a
    member and of the date on which he ceased to be
    member.
    Proof of entries in
    society’s books.
    34 (1) A copy of any entry in the book of a society
    regularly kept in the course of its business, shall, if
    certified in such manner as may be prescribed, be
    received, in any suit or legal proceedings or for any
    other purposes as prima facie evidence of such entry
    and shall be admissible in evidence in respect of the
    matter, transactions and accounts therein recorded in
    the same manner and to the same extent as the
    original entry.
    (2) Copies given by a society of any document obtained
    and kept by it in the course of its business or any
    entries in such document shall, if certified in the
    prescribed manner, be admissible in evidence in any
    suit or legal proceedings or for any other purpose in
    the same manner and to the same extent as the
    original document, or the entries therein, as the case
    may be.
    (3) No officer of a society and no officer, in whose
    office the books of a 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 or
    documents, the contents of which can be proved
    under this section or to appear as a witness to prove
    the matters, transactions and accounts therein
    recorded, except under order of the court, or the
    arbitrator, made for special cause.
    Societies to give pass
    book to members.
    34-A (1) A society which gives loans to its members or a
    society or class of societies which the State
    Government may notify in the official Gazettee,
    from time to time, shall furnish to each member a
    pass book, which shall contain an account of the
    transactions with the member, such as, the date of
  • 34 –
    the transaction, the amount of loan advanced, the
    rate of interest, the repayment made by the member,
    the amount of the principal and interest due and such
    other particulars as may be prescribed. The
    necessary entries shall be made in the pass book
    from time to time which shall be counter signed by
    such office-bearer of the society as may be
    authorised in this behalf by the committee. For this
    purpose, the member shall be bound to present the
    passbook to such office-bearer and if the passbook is
    required to be kept for some time for making the
    necessary entries the member shall be granted a
    receipt there of, by such office-bearer.
    (2) The entries in the passbook duly made shall, until
    the contrary is proved, be prima facie evidence of
    the account of transactions of the society with the
    member.
    Exemption from
    compulsory
    registration or
    instruments.
    35 Nothing in clause (b) and (c) of sub-section (1) of
    section 17 of the Indian Registration Act, 1908 (16
    of 1908) shall apply to, –
    (a) any instrument relating to share in a society
    notwithstanding that the assets of the society
    consist in whole or in part of immovable
    property; or
    (b) any debentures issued by any such society
    and not creating, declaring, assigning,
    limiting or extinguishing any right, title or
    interest to or in immovable property except in
    so far as it entitles the holder to the security
    afforded by a registered 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
    (c) any endorsement upon, or transfer of, any
    debenture issued by any such society; or
    (d) any declaration made by a member in favour
    of a society for creating a charge on land
    under section 41 and its assignment by the
    said society in favour of the financing bank or
    the federal society to which it is affiliated and
    further assignment by such financing bank or
  • 35 –
    federal society in favour of the Chhattisgarh
    State Co-operative Bank Limited, or any
    other federal society.
    Explanation.- For the purposes of this section, a
    financing bank shall include the Reserve Bank of
    India, the State Bank of India, the corresponding
    new bank specified in First Schedule to the Banking
    Companies (Acquisition and Transfer of
    Undertakings) Act, 1970 (No. 5 of 1970), and such
    other Bank as the State Government may, from time
    to time, by notification, specify in this behalf.
    Borrowings. 36 A society may receive deposits and loans from the
    State Government, Banks, Financing bodies,
    Corporate Bodies under any law, operating in the
    State and individuals under the provision of the
    byelaws of the society. It may also receive funds as a
    share capital under specific agreement or approved
    project by way of granting nominal membership.
    Restrictions on
    loans.
    37 (1) No society shall make a loan to,-
    (a) any person who is not a member;
    (b) any member on the security of its own
    shares;
    (c) any member on the security of a nonmember;
    Provided that a society may make loans to
    another society and/or nominal member as provided
    in the byelaws of the society.
    (1A) a society making a loan to its members who have
    been provided with “Bhoo-Adhikar Avam Rin
    Pustika” prescribed under section 114-A of the
    Chhattisgarh Land Revenue Code, 1959 (No. 20 of
    1959) shall enter all transactions of loans; advances
    and recoveries thereof in the aforesaid BhooAdhikar Avam Rin-Pustika.
    (1B) Notwithstanding anything contained in the Act, rules
    made thereunder and byelaws of the society, in case
    of an omission in making entry of a loan or advance
    made to members of the society, it shall be
    presumed that no such loan or advances has been
    made unless proved otherwise by the society;
  • 36 –
    (2) Notwithstanding anything contained in sub-section
    (1), a society may make a loan to a depositor on the
    security of his deposit.
    (3) The Registrar may, by general or special order,
    prohibit or restrict the lending of money on the
    security of movable property or on the mortgage of
    immovable property by any society or class of
    societies.
    (4) If an officer or employee of a society entrusted with
    the work of making an entry of any transaction of
    loans, advances and recoveries thereof in the “BhooAdhikar Avam Rin Pustika” referred to in subsection (1-A) fails to make such entry in the said
    Pustika the Registrar may by order impose a penalty
    on him of any amount not exceeding rupees five
    hundred. The order imposing a penalty shall be
    enforced in accordance with the provisions of
    section 85.
    Society not to
    recover or receive
    interest greater than
    the principal.
    37-A Notwithstanding anything contained in any
    agreement or any law for the time being in force, no
    society shall, in respect of any lone advanced by it to
    a member belonging to scheduled caste or scheduled
    tribes, or other members owing 5 acre irrigated or 10
    acre un-irrigated land, whether before or after
    commencement of the Madhya Pradesh Cooperative Societies (Second Amendment) Act 1979
    which is repayable within a period not exceeding ten
    years from the date of its advance, charge, recover or
    receive towards interest thereon during the currency
    of such loan a sum greater than the principal and any
    sum charged, recovered or received in excess
    thereof shall, if the loan is subsisting be adjusted,
    towards repayment of the Principal till it is fully
    repaid and in any other case, shall be refunded to the
    debtor member within sixty days of the date on
    which the payment towards interest exceeds the limit
    aforesaid:
    Provided that nothing in this Section shall
    apply to loans advanced by a Development Bank
    and an Urban Co-operative Bank.
  • 37 –
    Restrictions on
    other transactions
    with non-members.
    38 Save as provided in section 36 and 37, the
    transactions of a society with persons other than
    members shall be subject to such restrictions, if any,
    as may be prescribed.
    Charge and set-off
    in respect of share
    or interest of
    members.
    39 A society shall have a charge upon the share or
    interest in the capital and on the deposits of a
    member, past member or deceased member and
    upon any dividend, bonus or profits payable to a
    member, past member or deceased member, in
    respect of any debt or outstanding demand owing to
    the society from such member or past member of
    deceased member and may set-off any sum credited
    or payable to a member, past member or deceased
    member in or towards payment of any such debt or
    outstanding demand:
    Provided that no financing bank shall have
    a charge upon any sum invested in such bank by a
    society as reserve fund if such bank is not the sole
    creditor of the society or upon any sum invested in
    such bank from any Provident Fund nor shall such
    bank be entitled to set-off any such sum credited or
    payable to the society in or towards payment of any
    debt or outstanding demand owing to such bank
    from such society.
    Prior claim of
    society on certain
    assets.
  1. (1) Notwithstanding anything contained in any law for
    the time being in force, but subject to any prior
    claim of the State Government in respect of land
    revenue or any money recoverable as arrears of land
    revenue and to any claim of a development bank
    arising out of a loan granted at any time whatsoever
    under the Chhattisgarh Sahakari Krishi Aur Gramin
    Vikas Bank Adhiniyam, 1999 ( 20 of 2000), any
    debt or outstanding demand owing to a society by
    any member or past member or deceased member,
    shall be a first charge upon the crops and other
    movable property belonging to such member, past
    member or forming part of the estate of the deceased
    member, as the case may be;
    Provided that where any prior claim of the
    State Government arises out of a loan granted under
    the Land Improvement Loans Act, 1883 (19 of
  • 38 –
    1883) or the Agriculturists Loans Act, 1884 (12 of
    1884) and such loan is granted after the grant of loan
    by a society the loan granted by the society shall,
    notwithstanding anything contained in the said
    enactments, have priority over such claim of the
    Government.
    (2) No person shall transfer any property, which is
    subject to a charge under sub-section (1) except with
    the previous permission in writing of the society
    which holds the charge;
    Provided that it shall always be lawful for a
    member or past member to create a charge in favour
    of a Development Bank under the Chhattisgarh
    Sahakari Krishi Aur Gramin Vikas Bank
    Adhiniyam, 1999 ( 20 of 2000), for dues thereof.
    (3) Notwithstanding anything contained in any law for
    the time being in force any transfer of property made
    in contravention of the provisions of sub-section (2)
    shall be void as against any claim of the society in
    respect of any debt or outstanding demand owing to
    it which is a first charge on such property under subsection (1).
    First charge of Cooperative societies
    on certain assets.
    41 (1) Notwithstanding anything contained in any law for
    the time being in force, but subject to any prior
    claim of the State Government in respect of land
    revenue or any money recoverable as arrears of land
    revenue or to any of claim of a development bank
    arising out of a loan granted at any time whatsoever
    under the Chhattisgarh Sahakari Krishi Aur Gramin
    Vikas Bank Adhiniyam, 1999 ( 20 of 2000), or by a
    bank under Chhattisgarh Krishi Udhar Pravartan
    Tatha Prakirn Upbandha (Bank) Adhiniyam, 1972
    (No. 32 of 1973), any debt or outstanding demand
    owing to a society by a member or past member or
    deceased member shall be first charge in favour of
    the society on,-
    (a) the land owned by such member or past
    member or forming part of the estate of the
    deceased member, as the case may be; and
    (b) his interest in any land as a tenant if such
    member owns such interest;
    against which such debt was granted or such
  • 39 –
    outstanding demand stands, for and to the extent of
    the debt, or outstanding demand owing by him:
    Provided that where any prior claim of the
    State Government arises out of the loan granted
    under the Land Improvement Loans Act, 1883 (No.
    19 of 1884), and such loan is granted after the grant
    of loan by a society, the loan granted by the society
    shall, notwithstanding anything contained in the said
    enactment, have priority over such claim of the
    Government;
    (2) No member shall alienate the whole or any part of
    the land or interest therein which is subject to charge
    under sub-section (1) until the whole amount
    borrowed by the member together with interest is
    paid in full:
    Provided that it shall be lawful for a member
    or a past member to mortgage in favour of-
    (i) a Development Bank; or
    (ii) a bank under the Chhattisgarh Krishi Udhar
    Pravartan Tatha Prakirn Upbandha (Bank)
    Adhiniyam, 1972 (No. 32 of 1973); or
    (iii) the State Government,-
    such land or any part thereof under the rules made
    under the Chhattisgarh Irrigation Act, 1931 (No. 3 of
    1931), for supply of water from a canal to such land
    or any part thereof.
    (3) Any alienation made in contravention of the
    provisions of sub-section (2) shall be void as against
    any claim of the society in respect of the loan taken
    from it under this section;
    (4) Intimation in writing shall be given to the Tahsildar
    about the details of the debt or outstanding demand
    owing to the society from a member, past member or
    deceased member in the prescribed manner and the
    Tahsildar shall on receipt of such information, have
    it entered in the Record of Rights.
    Right of society to
    acquire and dispose
    of immovable
    property.
    41-A (1) Notwithstanding anything contained in any law for
    the time being in force, a society shall have power to
    acquire agricultural land or interest therein, or any
    immovable property which has been charged or
    mortgaged to it by a member in respect of any
    financial assistance availed of by him, provided the
  • 40 –
    said land or interest therein or any other immovable
    property has been sought to be sold by public
    auction and no person has offered to purchase it for
    a price which is sufficient to pay to the society the
    money due to it;
    Provided that only such portion of the
    property shall be sold as may be reasonably
    sufficient to satisfy the debt and interest thereon.
    (2) A society which acquires land or interest therein or
    any other immovable property in exercise of the
    power vested in it under sub-section (1), may
    dispose it of by sale within a period to be specified
    by the Registrar in this behalf,
    (3) If the society has to lease out any land acquired by it
    under sub-section (1),pending sale thereof as
    indicated in sub-section (2) the period of lease shall
    not exceed one year at a time and the lessee shall not
    acquire any interest in that property, notwithstanding
    any provisions to the contrary in any other law for
    the time being in force.
    (4) A sale by a society of land or interest therein in
    terms of this section shall be subject to the
    provisions of any other law for the time being in
    force providing for restrictions on purchase of land
    by non-agriculturists or in excess of ceiling limits or
    involving fragmentation of land below a specified
    limit.
    (5) Nothing in this section shall be construed to
    empower the society to sell any land or interest
    therein of a person belonging to an aboriginal tribe,
    which has been declared to be an aboriginal tribe by
    the State Government by notification under subsection (6) of section 165 of the Chhattisgarh Land
    Revenue Code, 1959 (No. 20 of 1959) to a person
    not belonging to such tribe.
    (6) Nothing in the Chhattisgarh Ceiling on Agricultural
    Holdings Act, 1960 (No. 20 of 1960) shall apply to a
    society acquiring land under sub-section (1) and
    holding such land till such time as the society is in a
    position to sell the land in the manner provided in
    this section or otherwise, at a price which is
    adequate to cover its dues.
  • 41 –
    Deduction from
    salary to meet
    society’s claim in
    certain cases.
    42 (1) Notwithstanding anything contained in any law for
    the time being in force, a member of a society may
    execute an agreement in favour of such society
    providing that his employer shall be competent to
    deduct from the salary or wages payable to him by
    the employer, such amount, as may be specified in
    the agreement and to pay the amount so deducted to
    the society in satisfaction of any debt or other
    demand owing by the member to the society.
    (2) On the execution of such agreement, it shall not be
    necessary to have the debt or claim adjudged by any
    authority and the employer shall, if so required by
    the society, by a requisition in writing and so long as
    the society does not intimate that the whole of such
    debt or demand has been paid, make the deduction
    in accordance with the agreement and pay the
    amount so deducted to the society, as if it were a
    part of the salary, or wages payable on the day as
    required under the Payment of Wages Act, 1936 (No
    4 of 1936).
    (3) If after the receipt of a requisition, made under subsection (2), the employer at any time fails to deduct
    the amount specified in the requisition from the
    salary or wages payable to the members concerned
    or makes default in remitting the amount deducted to
    the society, the society shall be entitled to recover
    any such amount from the employer as an arrear of
    land revenue and the amount so due from the
    employer shall rank in priority in respect of the
    liability of the employer equal to that of the wages in
    arrears.
    (4) The provisions of this section shall also apply to all
    such agreements of the nature referred to in subsection (1) as were in force on the date of the
    commencement of the Act,
    (5) Nothing contained in this section shall apply to
    persons employed in railways, mines and oil- fields.
    (6) For the purposes of this section, Drawing and
    Disbursing Officer shall be deemed to be an
    employer in respect of a Government servant.
  • 42 –
    Funds and profits. 43 (1) No part of the funds of a society other than the net
    profits shall be paid by way of bonus or dividend or
    otherwise distributed amongst its members;
    Provided that a member may be paid
    remuneration on such scale as may be laid down by
    the bye-laws for any services rendered by him to the
    society.
    (2) A society shall, out of its net profits in any year,-
    (a) transfer an amount not being less than twentyfive percent of such profits to the reserve funds
    unless such society has been, by general or
    special order, partially or wholly exempted in
    this behalf by the Registrar; and
    (b) pay to the Chhattisgarh Co-operative Union
    Limited and to such other institutions or unions
    as may be specified by the Registrar in this
    behalf, such contribution as may be prescribed.
    (c) transfer at least twenty per cent to an equity
    redemption fund by such societies which have
    Government equity participation.
    (3) No society shall pay dividend to its members at the
    rate exceeding twenty five per cent, except with the
    prior approval of the Registrar.
    (4) A society may, with the sanction of the Registrar,
    after one fourth of the net profit in any year has been
    carried to the reserve fund, contribute not exceeding
    five per cent of the remaining net profits to any
    purpose connected with the development of Cooperative movement or charitable purpose as defined
    in section 2 of the Charitable Endowment Act, 1890
    (No. 6 of 1890).
    (5) No society shall make a contribution either in money
    or in kind, either directly or indirectly to an
    organisation that has an object in furtherance of the
    interest of a political party or of any religious faith.
    Appropriation of
    profits.
    43-A (1) A society earning profit shall calculate the net profit
    by deducting from the gross profits for the year
    following:-
    (a) all overdue interest accrued on loan accounts.
    (b) management charges;