Keyword(s):
By-Laws, Financing Bank, Nominal or Associate Member, Registered Society, Society, Society with Limited Liability, Supervising Union

THE f AMIL NAN CO-OPERATIVE SOCIETlBS ACT, 1961 TABLE OF CONTENTS. CHAPTER I. PRELIMINARY. %ECT~ONS I 1 Slmrt title, exttot and commencement. 2 Definitions. CHAPTER 11. RBGWRATFQN. ~ 3 The Registrar. 4 Societies which may be d~tered. 5 Change of liability. \ 6 Conditions of registratim. 7 Power of Rercistrar to dacide, oertain qwstio~–s. I ~ 8 Application for registratkm. Registration. 1 1 Evidence of registration. – 11 Anzandrnant of the by-hws of registered society. 12 Power to direct amndnwt of by-laws. 13 Division and amalgamation of societies. 13-A P6wer to direct adgamatim in public interest, ate. 14 Tdcr of assets and liabilities among mgisterod &tie& 15 Ckaifbtion. 15 Conversion, QUALIFICATIONS OF AND IRBl RIQHm AND LIAmBI. 18 DisqualiWonr for membership of 8ocis:y. J 8 19 Right of ma lbm to do08 by redstered SOOiecty and application for] rrQu#. 9 -+ 1 ‘f T.N. Act 531 SECTIONS, i 20 Expulsion. 21 Votes of members. h 5 i 22 Inspection of accounts by member. 4 23 Restrictions on transfer of share or interest, 24 Transfer of interest on deathafaember. 25 Liability of past rnembzr or of theestate of a dm& membet. CHAPTBR IV. MANAGEMEN* OZJ RRBG~ERRD SOC~IE& 26 General meetings. . . ,! lj, :’.# 27 Appointment ofcommittee& 28 Disqualifications for membership of committee. 28-A Removal or disqualification. CHAPTER V. Dunes AND PRI~~ES OFREQIWERED SOCIETIES. 29 Address of siocieties. 30 Copy of Act, rules and by-laws to be open to inspection. – 31 Societies to be bodies corparatc. 32 First charge of society. -<. 33 Charge of immovable property of members borrowing loans from certain registered societies. 34 Charge and set off in respect of qhares or interest of member. i 3 35 Financing bank not to have a claim on cortain sums of money. f 36 Shares, interest, ctc., not liable to attrchment. 37 Reserve fund and bad debt reserve not liable to attaCMent \ 38 Register of members. 39 Proof of entries it1 societies, books. 1 40 Deduction from salary or wages, 41 Exemption from compulsory registration of instruments relating to shares and debentures of registered society. r 42 Right to set off where a registered society purchases immovable promrty at a sale under Tamil Nadu Act of 1861 for any sum due to it. i 43 Power to egempt from stamp duty and registration fee. 4. . CHAPTER VI* 8 I STATE AID TO REGISTERED SOCIETIES. i SEC!TXONS* 44 mvestment by Oove anlent in registered societies. 45 Provision of funds by Government to apex wciet y. . 46 Partnership of -Government with apex society. 47 Subbidiay State Partnership Fund. . 48 Approval of Government for purchase of shares. 49 Liabii ity to be limited in respect of certain shares. I 50 Restrictions on amount of dividend. 5 1 Indemnity of apex and central ~~cietie~. 52 Disposal of share capital and dividend, etc. 53 1 Wsposal of Principal State Partnership Fund and Subsidiary State Partnership Fund on winding up of an apex or central society. 54 Principal State Partnership Fund and Subsidiary State Partnership Fund i mot to form part of assets, * Fi 6 55 Agreement by Government and apex societies . 56 Other form. ” State aid to registered societies. fl Provisions of this Chapter to override other laws. CHAPTER VII $8 Rescstridions on loans. . C — 59 Restrictions on borrowing% 60 Invesp~nt of funds. a mods not to be divided among members. . . 1- . . . . a . ‘ ; niipiq ,pf net profly; ‘ * . -1 .I , .1 . .. . – – . . ‘ , . . 2: . . ; b . 1 . . . &.- .-. – I.; :::2 i: . – *.k i,E.,:- *. . -, C r 63 bvfdat f\md . . r . . .. . , – . , . ., . -.% .,. -. . … – ;;L< –*?.. – -‘+$+j 1961 r T.N. Act 531 4zAPmRvm t AUDIT, INC!U~, INSPI!CTION, SWRCBABO. AND SUPmaSSW* SEC~ONS* “s 64 Audit. 65 Inquiry. 66 Inspection. 67 Inspection of books by 6nancing bank. 68 Costs of inquiry and inspection. 69 Registered society to pay certain expenses. 70 Suspension of officer or servant of society. .I 71 Surcharge. 72 Supersession of committee. d CHAPTER IX. SETTLEMENT OF DISPUTES. 73 Disputes. CHAPTER IX-A STATE CO-OPERATIVE BANK AND ~NTRAL ~~~P~TIVE BANKS. cL 73-A Definitions. 73-8 State Co-oper ative Bank and Central Co-operative Banks. I 73-C Vesting of assets and liabilities. f 73-D (Omitted). 73-E Central Co-operative Banks may function th:ough the agency of othos societies. 73-F Power to make rules. T 73-G Provisions of this Chapter to override other prc visions. CHAPTER IX-B. APEX SW~IES AND CENTRAL SOCETLES. 73-H Definitions. 73-1 Application of this Chapter to apex societies and central socictm. 734 The Board of an apex society and central society. . . [I961 : T.N. Act 53 S ECTIONS- b.., . – 73-K Me nbersbip of . apex . societies and central societies. 3.. __’ . . % -.. 7 3-L Guarantee by Government of d’ rincipal of, and interest on, loans and advancra taken by apex societies an central societies. 73-M Power to make rules. ! 73-N Provision sof th 9 Chapter to override other provisions. CHAPTER IX-C. *A 3,. . * * .- Exp2unati~n.-A cash credit with a finahcing bank fox the maintenance of fluid resources shall not be regarded as assistance under this clause, notwi& standing that the financing bank receives asbistance from the Government i (13) “society vith limited liability” means a registared society the liability of whose members for the debts of the society on its liquidation is limited by its bylaws ; (14) ” society with unlimited liability ” meanr a registered society, whose mcatbers are, on its liquidation, jointly and severally liable for and in raspoct of all its obligations and to contribute to any deficit in the assets of the cociety B (1 5) r4 supervising union means a registend soci~y which has as itsprincipal object the organizing, assisting, developing and supervising of registered societies which are its members or the carrying on of propaganda or tho spreld of education in co-operative principlen and pra otices ; (1 6) ” Tribunal ” means a Tribunal aonstitutsd under section 95 and having ju~isdiction. 1961 : T.N. Act 531 Co-operative Societies 787 CHAPTER 11. 3. The Government may appoint person to be ~he~~gis. Registrar of Co-operative Societies for the l[State of trar. Tamil Nadu] or any portion of it and may, by general or special order, confer on any other persons all or any of the powers of a Registrar under this Act. 4. (1) Subject to the provisions of this Act, a society Societies which has as its object the promotion of the economic which may’ interests of its members in rccordance with co-operative be registered. principles, or a society established with the object of facilitating the operations of suc~ a society, may be registered under this Act with limited or unlimited liability: Provided that the liability of a society of which a registered societyis a member shall, be limited. (2) Whether the liability of the inembers of a registered society is unlimited or limited by shares, the t t . liability of the Government or of a fiiiancing bank, which have or has taken shares in such rzgi’stered society, shall be limited to the share capital subscribed by the Govern- . ment ol: such financing bank. i 5. (1) Subject to the proviso to sub-section (1) of Chpp of section 4 and to any rules made in this behalf, a registered liability* I society may, by an a mendment of its by-laws, change its i liability from limited to unlimited or from unlimited to f limited : ! 1 Provided that- (i) the society shall give notice in writing of its intention to change its liability to all its mcmbers and i creditors ; (ii) any member or creditor shall, notwithstanding any by-law or contract to the contrary, have the option of withdrawing his shares, deposits OF loans, as the case 3 This expression was substituted for the expression ” Stalt; of Madras ” by the Tamil Nadu Adaptation of Laws Order, 1 969, as amended by the Tamil Nadu Adaptation of Laws (Second Amendment) Order, 1969. 780 Co-operat ive Societies [I961 : T.N. Act 53 may be, within two months of tho service of such notice on him and the change shall not take effect until all such claims have been satisfied ; and’ (iii) any member or creditor, whe does not exercise his option within the period aforesaid, sha!l be deemed to have assented to the change. (2) Notwithstanding anything contained in the proviso to sub-section (I), the change shall take effect at I once if all the members and creditors assent thereto. t – ,- 1; Ondi lions 6. (1) No society, other than a society of wl ich a wresiara- member is a registered society, shall be registered under li tion. this Act which does not wnsist of at least ten persoos i and where the object of the society is the creation of funds to be lent ta its members, unless suck perb qons– (a) reside or own immovable property in tb-, same town or village or in the same group of villages ; Power of 7. Wben an3 question arises whether for the purposes RegistmrtQ of &is Act any person is an agriculturist or a non-agri- decide main eulturist or whether any person is a resident of, or owns questions. immovable property in, a town or village or group .of villages, or whether two or more villages shall be considered to form a group, or whethlsr any person belongs to any parti~ukr class or-ocoupation, the question shall be decided by the Registrar. . . 11 (b) save where tbz Registrar otherwise directs, are 1 1 rnembzrs of the same class of occupation. Application 8. (1) An appliostion for registration shall made for registra- to tb Repistgar. irioa, . , I I I I I @) The application shall be signed- <.,> :($ inthe case ohsociety of which 90 meri~fm is 8 registered society, by as least ‘ten persons qualified in a~rdanee with the requirements of sub-section (I) of (2) The word ” limited ” shall be the last word in the name of every society with limited liability registered under tbis Act. 1 section 6 and sub-section (1) of section 1 ‘lad who are not disqualified for admission as members under su b-secticm (1) of section 18 ; and (b) in the case of a society of Which a member is 3 registered society, by a duly authorized per~oo on behalfof every such registered society, and, where all the members of the society arc not registered societies, by ten other members or, when there are less than ten other members, by all of them. (3) The application shall be accompa~iied by a copy of the proposed by-law of thc society and the persons by whom or on whose behalf such application is nlzde shall furnish such information in regard to the society as the Registrar may require. \ 9. (1) If the Registrar is satisfied that tile application WOistratioG for the registration of a society is in accordance with the provisions of this Act and the rules and that the proposed by-laws arc not contrary to this Act or rbe rules or to co-operative principles and that the socicty will, in his opinion, work successf~~lly, he may register thc society and its by-la WS. (2) If the Registrar refuses to re~isler a society and its by-laws, he shall commlulicate the nrdcl* of rcfusafl wjtlz the rei\Pons for thc ref1:sal to any pcrson who has sig~~ed thc opnlicnl ion fol- the registration of’tllc :;ol;icty aild wllo lies i~cef~ 11o~ni natcd in this behalf by i llc j~crsoiis who llave simed that 2pplication. 10. A certificate of registration sig1c.d by the hbgistrar midells cif shall be wnclrrsiwe evidence that the society therein meam registratio”. tiolzed is duly registered unless it is proved that tho regstram tion of the society has been cancelled. ] I. (1) No rrmei~dment of the by-laws of a registered Am:ndment society shall be valid ilntil the same has been rcgistcred afthebyunder this AG~. laws of reglam lered society. (2) A11 applicatiolz for the registration of an amendment of the by-laws of a registered society shall be made to the Registrar in the prescribed manner and shall be I accotnpanied by a copy oft he amendment oft he by-lalnwsvs. I * -” r p, -$?’ y. -r7r – – ..- , (3) U’ the Registrar is satisfied that an amendment of J’$. the by-laws is not contrary to this Act or the nile$ he may register the amendments: ‘” 1.. . Provided that ~o order refusing to register the ameod – lllent of the by-laws shall be passed except. after giving tlk registered society an opportunity of making its representatio’u s . I (4) If the Registrar refuses to register an amendment of the by-la ws of a registered society, 11e shall cornmunicate the order of refusal to the registered society with the seasons for the refusal. (5) When the Registrar registe -s an amendinent of the by-k ws he silaall issue to the registered so ciet y a copy c f the amendment of the by-laws certified by him, which shall be colzclusive evidence that the same is duly registered. (6) ,ill amendmeil~ L~LC b4-lws of a registered society shall take effect from the drte, if any, specified in the amendment. Where no such date is specified, the amendment shallitakeeffect from thedate on which it is registered. (7) Without prejudice to the provisions of this section, where any amendment of the by-laws proposed by a society involves, in the opinion of the Reg:sti,ar, a lnatcrial change ill the objects or operatio 11s of the society, the amendment shall be registered only subject to such I rules as may be made in this behalf. \ power t 12. (1) Where the Registrar is satisfied that fur the dircct parpose of altering the area of operations of a registered am2nd1ncnC society or for the purpose of improving the services Of by laws rendered by it or for any other purpose specified in the des. zn .rt~endmez~t of the b y-laws is necessary. he may, – …. —r – ‘ ” – —- – . .— . — — “_ TI&’Zer rwe-* :k 2xEmcxI #F – – -.c- – – ? — i. *- — ? – ‘ -T –= – -,. A – r1. ‘- -L .Az I — – – – * _ I–,… C ^^ I . 1961 : T. N. ‘Act 531 Co-gper~itiw Societros – I 79 1 (2) If, within the time specified in the: notice roferred to in sub-section (I), thc registered socirt y fails to make the amendment, the Registrar may, after giving the socicf y a0 opportunity of making its repreantations, register the amendinent and issue to the society s copy of such atllc~ld – ment . (3) Any amnendmc~lt of the by-laws registered u~ulldcr su b-sectio n (2) shall have the same effeed as an amendmem of the by-laws registered under section 1 I unless the registration is cancelled in pursuance of a decision in appeal. t 13. (1) (a) Any registcmd society may, at a meeting of Division its general body specially called for the purpose of whic11 at and amalpaIcast seven clear days’ notice shall be given to its members, lnat ion Or resolve to divide itself into two or more societies. Tlie sccicties, said rcsolution (hereinafter in this su b-section refcrrerl to as the prelinlinary resolution) shall contain proposals for the division of the assets and liabilities of the society among the new societies into which it is proposcd to divide it and may prescribe the area of operations of, and specify the members wlzo will constitute, each of t lle new societies. The proposed by-laws of the new societies shall be annexed to the preliminary resolution. (6) (i) A copy of ilic preliminary rcsolution shll be mot to all the members and creditors of the socitgy. (ii) Any inember ol’ the society l~lay, notwithstanding any by-law to the contrary, by notice givm to tho society within it period of ot~e month from the date of seccipt by him of the prelinzinary resolution, intiinate his intention not to become a rnelub:c of ax~v of the new societies. (iii) Any crcditor of the society may, i~otwit!r sta.11ding any agreemen’ to the contrary, by notice give11 to t he society wit hi11 the period referred to in su b-clause (ii), i rl~ir~iatc lzis i~lteiltioll to1 demand a return of the amount due to him. (c) After the expiry of two months from thc date of despatch of the preliminary resolution to all the members and creditors of the society, a meeting of the gem~al body of the society of which at least fifteen clear days’ notic4 125-6-5 1 A 792 Co-opevative Socktics [I961 : T.N. Act 53 shall be given to its members, shall be convened for cor~idering the preliminary resolution and the proposed by-lawa. If, at such meeting, the preliminary resolution and the proposed by-laws of the new societies are confirmed by a resolution passed by a majority of not less than twothirds of tlie :nembers present and voting, either withoui changes or with such changes as, in the opinion of the Registrar, are not m~terial, he may, subject to the provisions – of. clause (e) and section 9, but notwithstanding anything contained in section !! and on receipt of a copy of such resolution certified in the manner prescribed register the new societies and the by-laws thereof. On such registration, the registration of the original society shall be deemed to have been cailcelled. , .. The opinion of the Registrar as to whether the changes made in the preliminary resolution are, 6r are not, material shall be final. (d) At the meeting referred to in clause (c) provision shall be made by another a*- resolution for- , t ,s (i) the repayment of the share capital of all the -J members who have given n~tice under sub-clause (ii) of clause (b) ; and (ii) the Wisfaction of the claims of all the creditors who have given notice under sub-clause (iii) of clause (b) ; 4 provided that no member or creditoi shall be entitled to such repayment or satisfaction until the prelimi- * .?! wry resolution is confirmed as provided in clausi (c). . $4 . t (e)- If the. Registrar is satisfied that provision for the mpayment af the share capita& of all the members and fo~ the of the claims of all the creditors referred to in clause (d) has not been-made, he ]nay refuse to register the new societies. (fj’ The registration of the new societies shall be a sufficient conveyance to vestthe rssets and liabilities of the original society in the new societies in the mannefi specified in the preliminary resolution as confirmed under clause (c). A . . 1961 : T.N. A~t~5.31 Co+opertaivr Societks 793 (2) ((1) TWO or more registered societies may, m’ meci ings or t l~cir rcspccl ivc general bodies specL.; -. called for the purpose of wldcll st least seven clear days’ notice shall be given to their respective members, resolve 😮 amalgamate into one society. The said resolution is hereinafter in this sub-section rekrred to as the preliminary resol~tion. The proposed by-laws of the amalgamated socioty shall be annexed to the preliminar)~ resolution. (b) (i) A copy of the preliminary resolution of each society shdl be sent to all the members and credit 01s thereof. (ii) Any member of a2y such society may, notwithstanding ally by-law to the contrary, by notice given to the society of which he is a member withir. a period of one mor.!h, from the date of receipt by him of the prelilninary resolution, intimate his intention not to become a l-iwmber f the amalgamated society. S (iii) Any creditor of ally such society, may, notwithstanding any agreement to the contrary, by notice given to the society of which he is a creditor within the period referred to in sub-clause (ii), intinlate his intention to demand a return of the amount due to him. (c) After the expiry of two months from the date of despatch of the preliminary resolution to a11 the mernbcrs and creditors of all the societies, a joint meeting of the members of such societies of which at least fifteen clear days’ notice shall be given to them, shall be convened for considering the preliminary resolution and the proposed bylaws. If, at such mceting, the prelimincry rcso lul ion and the proposed by-l~ws ?.re confirmed by a resolution passed by a majority of not less than two-thirds of the meillbers present and voting, either without changes or with such changes as, in the opinion of the Registrar, are not material, he may, subject to the provisions of clause Cf) aiid section 9, but notwithstandkg anything contained in section 8, and on receipt of a copy of such resolution certified in the manner prescribed, register the amalgamated society and the by-laws thereof. On such registration, the registration of the original societies shall be deemed to have been cancelled. The opinion of the Registrar as to whetller the chahges lmade in ihe preliminary.resolution a re,, . or . are not, material shall be final. 794 :Co~s)petative $oci@e~ [I961 : T.N. Act 53 (d) At the joint meetin referred to in clause (c) proviaon shall bt: made by an01 k er rr:solution for- (i) the repayment of the share capital of all the members who have: given notice under sub-clause (ii) of etause (b) ; and (ii) the satisfaction of the claims of all the creditors who have given notice under sub-clause (iii) of clsi~w (h) : Provided that no member or creditor sllall be entitled to :iuch repayment or satisfaction until the preliminary resolution is confirmed as provided in clause (c). $ “3 4 (e) The person by whom a joint meeting leferred to clause (c) shall be convened, the procedure to be followed I &hareat and the quorum thcrefor shall be sucll as may be prescribed. (f) If the Registrar is satisfied that provision for the repayment of the share capital of all the members and for the gatisfaction of tle claims of all the creditors ret’erred to in $lause (d) has not been made, he may refuse to regitrer the aualgmared society. (g) ‘Ihe registration of the smalgn rn ated society shall be sufficient conveyance rt, vest in ii all the asseis an/? liabil~ties of the origlnal ies. Power to:a [13-A. (I) Where the Registrar is satisfied that it is direct amal- essential in the public interest or in the interest of the @mation in co-operative movement, or for the purpose oi securing the public proper management of any registered society, that two or fist. ttc., more registered societies should amalgamate, then, notwithstanding anything contained in section 13 but subject to the provisions of this section, the Regist~as may, by order notified, in the Tamil Naclu Government Gazette, provide for the amalgamation of those societies into a single registered society with such constitution, property rights, interest and authorities, and such liabilities, duties and obligations, as may be specified in the order. – – I =This &stion was inserted by section 2 of the Tamil Nadu COoperative Societies (Amendment) Act, 19 77 (President ‘i Aa 1 of 19771. s – .,*a -. 5 – . . %- — -.- – .=- — 5 . =- – – > L. . . Co-operative Socicl’i, ; 795 I (2) No order shall be made under this section, I (a) a ccpy of f F- ycysed order has beeit sent irr draft to each of the societies concerned ; (b) the Registtar has considered and made such modifications in the draft order as may see= to him desirable in the light of any suggestions and objections which may be received by him within such period (not being less than two months from the date on which the copy of the order as aforesaid was received by each of the societies concerned) as the Registrar may fix in that behalf, either from such society or: from any member or class of members thereof, OT from any creditor or class of creditors. (3) The order referred to in sub-section (1) may contain such incidental, consequential and supplemental provisions as may, in the opinion of the Registrar, be necessary to give effect to the amalgamation. ‘9 (4) Every member or creditor of each of the societies to be amalgamated who has objected to the scheme of amalgamation, within the period sljecified, shall be entitled to receive, on the issue of the order of amnaigarnation, his share or interest if1 he lx a member, and the amount in satisfaction of his dues if he be a creditor. (5) Where two or more soci’eties have been amalga- . mated, the registration of such societies shall be cancelled onthe date of registration of the amalgamated society. (6) The legistration of the amalgamated society shall be a sufficient convt:yancc to vest the assets and liabll~ties of the oliginal societies in tlie uew society iu tllc inanlier specified in the order refcrred to in sub–section (I).] 14. (1) Two or more registered sccieties may, at meetings of their respective general bodies specially called for the purpose of which at least seven clear days’ notice shall be given to their respective members, lesolve to effect in whole or in part a tralisfer amokg themselves of the~r ‘respective assets and liabilities. The said resolution is hereinafter in this section reftrred to as the prc’isdinary