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) 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; - 3 –
(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 - 4 –
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; - 5 –
(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 - 6 –
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 ) - 7 –
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 - 8 –
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.
- 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. - 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. - (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) 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.
- 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
- 11 –
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) 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. - (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
- 12 –
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) 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
- 13 –
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) 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. - (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,-
- 14 –
(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) 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
- 15 –
(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) - 16 –
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 - 17 –
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) Notwithstanding anything contained in this Act, or
the rules made thereunder where a compromise or
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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) 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) 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;