Co-operative Societies Act, 1912- Sections 29 to 50

PROPERTY AND FUNDS OF REGISTERED SOCIETIES

29. Restrictions on loans.

29. Restrictions on loans.—(1) A registered society shall not make a loan to any person other than a member:

Provided that, with the general or special sanction of the Registrar, a registered society may make loans to another registered society.

(2) Save with the sanction of the Registrar, a society with unlimited liability shall not lend money on the security of moveable property.

(3) The [i][State Government] may, by general or special order, prohibit or restrict the lending of money on mortgage of immoveable property by any registered society or class of registered societies.

Other Contents of Co-operative Societies Act, 1912
Sections 1 to 28 Sections 29 to 50

30. Restrictions on borrowing.

30. Restrictions on borrowing.—A registered society shall receive deposits and loans from persons who are not members only to such extent and under such conditions as may be prescribed by the rules or by-laws.

31. Restrictions on other transactions with non-members.

31. Restrictions on other transactions with non-members.—Save as provided in Sections 29 and 30, the transactions of a registered society with persons other than members shall be subject to such prohibitions and restrictions, if any, as the [ii][State Government] may, by rules, prescribe.

32. Investment of funds.

32. Investment of funds.—(1) A registered society may invest or deposit its funds—

(a) in the Government Saving Bank, or

(b) in any of the securities specified in Section 20 of the Indian Trusts Act, 1882 (2 of 1882), or

(c) in the shares or on the security of any other registered society, or

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

(e) in any other mode permitted by the rules.

(2) Any investments or deposits made before the commencement of this Act which would have been valid if this Act had been in force are hereby ratified and confirmed.

33. Funds not to be divided by way of profit.

33. Funds not to be divided by way of profit.—No part of the funds of a registered society shall be divided by way of bonus or dividend or otherwise among its members:

Provided that after at least one-fourth of the net profits in any year have been carried to a reserve fund, payments from the remainder of such profits and from any profits of past years available for distribution may be made among the members to such extent and under such conditions as may be prescribed by the rules or by-laws:

Provided also that in the case of a society with unlimited liability no distribution of profits shall be made without the general or special order of the [iii][State Government] in this behalf.

34. Contribution to charitable purpose.

34. Contribution to charitable purpose.—Any registered society may, with the sanction of the Registrar, after one-fourth of the net profits in any year has been carried to a reserve fund, contribute an amount not exceeding ten per cent. of the remaining net profits to any charitable purpose, as defined as Section 2 of the Charitable Endowments Act, 1890 (6 of 1890).

INSPECTION OF AFFAIRS

35. Inquiry by Registrar.

35. Inquiry by Registrar.—(1) The Registrar may of his own motion, and shall on the request of the Collector, or on the application of a majority of the committee, or of not less than one-third of the members, hold an inquiry or direct some person authorised by him by order in writing in this behalf to hold an inquiry into the constitution, working and financial condition of a registered society.

(2) All officers and members of the society shall furnish such information in regard to the affairs of the society as the Registrar or the person authorised by the Registrar may require.

36. Inspection of books of indebted society.

36. Inspection of books of indebted society.—(1) The Registrar shall, on the application of a creditor of a registered society, inspect or direct some person authorised by him by order in writing in this behalf to inspect the books of the society:

Provided that—

(a) the applicant satisfies the Registrar that the debt is a sum then due, and that he has demanded payment thereof and has not received satisfaction within a reasonable time; and

(b) the applicant deposits with the Registrar such sum as security for the costs of the proposed inspection as the Registrar may require.

(2) The Registrar shall communicate the results of any such inspection to the creditor.

37. Costs of inquiry.

37. Costs of inquiry.—Where an inquiry is held under Section 35, or an inspection is made under Section 36, the Registrar may apportion the costs, or such part of the costs as he may think right, between the society, the members or creditor demanding an inquiry or inspection, and the officers or former officers of the society.

38. Recovery of costs.

38. Recovery of costs.—Any sum awarded by way of costs under Section 37 may be recovered, on application to a Magistrate having jurisdiction in the place where the person from whom the money is claimable actually and voluntarily resides or carries on business, by the distress and sale of any moveable property within the limits of the jurisdiction of such Magistrate belonging to such person.

DISSOLUTION OF SOCIETY

39. Dissolution.

39. Dissolution.—(1) If the Registrar, after an inquiry has been held under Section 35 or after an inspection has been made under Section 36 or on receipt of an application made three-fourths of the members of a registered society, is of opinion that the society ought to be dissolved, he may cancel the registration.

(2) Any member of a society may, within two months from the date of an order made under sub-section (1), appeal from such order.

(3) Where no appeal is presented within two months from the making of an order cancelling the registration of a society, the order shall take effect on the expiry of that period.

(4) Where an appeal is presented within two months, the order shall not take effect until it is confirmed by the appellate authority.

(5) The authority to which appeals under this section shall lie shall be the [iv][State Government]:

Provided that the [v][State Government] may, by notification in the [vi][Official Gazette], direct that appeals shall lie to such Revenue-authority as may be specified in the notification.

40. Cancellation of registration of society.

40. Cancellation of registration of society.—Where it is a condition of the registration of a society that it should consist of at least ten members, the Registrar may, by order in writing, cancel the registration of the society it (sic if) at any time it is proved to his satisfaction, that the number of the members has been reduced to less than ten.

41. Effect of cancellation of registration.

41. Effect of cancellation of registration.—Where the registration of a society is cancelled, the society shall cease to exist as a corporate body—

(a) in the case of cancellation in accordance with the provisions of Section 39, from the date the order of cancellation takes effect;

(b) in the case of cancellation in accordance with the provisions of Section 40, from the date of the order.

42. Winding up.

42. Winding up.—(1) Where the registration of a society is cancelled under Section 39 or Section 40, the Registrar may appoint a competent person to be liquidator of the society.

(2) A liquidator appointed under sub-section (1) shall have power—

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

(b) to determine the contribution to be made by the members and past members of the society respectively to the assets of the society;

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

(d) to determine by what persons and in what proportions the costs of the liquidation are to be borne; and

(e) to give such directions in regard to the collection and distribution of the assets of the society, as may appear to him to be necessary for winding up the affairs of the society.

(3) Subject to any rules, a liquidator appointed under this section shall, in so far as such powers are necessary for carrying out the purposes of this section, have power to summon and enforce the attendance of witnesses and to compel the production of documents by the same means and (so far as may be) in the same manner as is provided in the case of a Civil Court under the Code of Civil Procedure, 1908 (5 of 1908).

(4) Where an appeal from any order made by a liquidator under this section is provided for by the rules, it shall lie to the Court of the District Judge.

(5) Orders made under this section shall, on application, be enforced as follows:—

(a) when made by a liquidator, by any Civil Court having local jurisdiction in the same manner as a decree of such Court;

(b) when made by the Court of the District Judge on appeal, in the same manner as a decree of such Court made in any suit pending therein.

(6) Save in so far as is hereinbefore expressly provided, no Civil Court shall have any jurisdiction in respect of any matter connected with the dissolution of a registered society under this Act.

RULES

43. Rules.

43. Rules.—(1) The [vii][State Government] may, for the whole or any part of the [viii][State] and for any registered society of class of such societies, make rules to carry out the purposes of this Act.

(2) In particular and without prejudice to the generality of the foregoing power, such rules may—

(a) subject to the provisions of Section 5, prescribe the maximum number of shares or portion of the capital of a society which may be held by a member;

(b) prescribe the forms to be used and the conditions to be complied with in the making of applications for the registration of a society and the procedure in the matter of such applications;

(c) prescribe the matters in respect of which a society may or shall make by-laws and for the procedure to be followed in making, altering and abrogating by-laws, and the conditions to be satisfied prior to such making, alteration or abrogation;

(d) prescribe the conditions to be complied with by persons applying for admission or admitted as members, and provide for the election and admission of members, and the payment to be made and the interests to be acquired before the exercise of the right of membership:

(e) regulate the manner in which funds may be raised by means of shares or debentures or otherwise;

(f) provide for general meetings of the members and for the procedure at such meetings and the powers to be exercised by such meetings;

(g) provide for the appointment, suspension and removal of the members of the committee and other officers, and for the procedure at meetings of the committee, and for the powers to be exercised and the duties to be performed by the committee and other officers;

(h) prescribe the accounts and books to be kept by a society and provide for the audit of such accounts and the charges, if any, to be made for such audit, and for the periodical publication of a balance-sheet showing the assets and liabilities of a society;

(i) prescribe the returns to be submitted by a society to the Registrar and provide for the persons by whom and the form in which such returns shall be submitted;

(j) provide for the persons by whom and the form in which copies of entries in books of societies may be certified;

(k) provide for the formation and maintenance of a register of members and, where the liability of the members is limited by shares, of register of shares;

(l) provide that any dispute touching the business of a society between members or past members of the society or persons claiming through a member or past member or between a member or past member or persons so claiming and the committee or any officer shall be referred to the Registrar for decision or, if he so directs, to arbitration, and prescribe the mode of appointing an arbitrator or arbitrators and the procedure to be followed in proceedings before the Registrar or such arbitrator or arbitrators, and the enforcement of the decisions of the Registrar or the awards of arbitrators;

(m) provide for the withdrawal and expulsion of members and for the payments, if any, to be made to members who withdraw or are expelled and for the liabilities of past members;

(n) provide for the mode in which the value of a deceased member's interest shall be ascertained, and for the nomination of a person to whom such interest may be paid or transferred;

(o) prescribe the payments to be made and the conditions to be complied with by members applying for loans, the period for which loans may be made, and the amount which may be lent, to an individual member;

(p) provide for the formation and maintenance of reserve funds, and the objects to which such funds may be applied, and for the investment of any funds under the control of the society;

(q) prescribe the extent to which a society may limit the number of its members;

(r) prescribe the conditions under which profits may be distributed to the members of a society with unlimited liability and the maximum rate of dividend which may be paid by societies;

(s) subject to the provisions of Section 39, determine in what cases an appeal shall lie from the orders of the Registrar and prescribe the procedure to be followed in presenting and disposing of such appeals; and

(t) prescribe the procedure to be followed by a liquidator appointed under Section 42, and the cases in which an appeal shall lie from the order of such liquidator.

(3) The [ix][State Government] may delegate, subject of such conditions, if any, as it thinks fit, all or any of its powers to make rules under this section to any authority specified in the order of delegation.

(4) The power to make rules conferred by this section is subject to the conditions of the rules being made after previous publication.

(5) All rules made under this section shall be published in the [x][Official Gazette], and on such publication shall have effect as if enacted in this Act.

[xi][(6) Every rule made by the State Government under this Act shall be laid, as soon as may be after it is made, before the State Legislature.]

MISCELLANEOUS

44. Recovery of sums due to Government.

44. Recovery of sums due to Government.—(1) All sums due from a registered society or from an officer or member of a registered society as such to the Government, including any costs awarded to the Government under Section 37, may be recovered in the same manner as arrears of land-revenue.

(2) Sum, due from a registered society to Government and recoverable under sub-section (1) may be recovered, firstly, from the property of the society; secondly, in the case of a society of which the liability of the members is limited, from the members subject to the limit of their liability; and, thirdly, in the case of other societies, from the members.

45. Power to exempt societies from conditions as to registration.

45. Power to exempt societies from conditions as to registration.—Notwithstanding anything contained in this Act, the [xii][State Government] may, by special order in each case and subject to such conditions, if any, as it may impose, exempt any society from any of the requirements of this Act as to registration.

46. Power to exempt registered societies from provisions of the Act.

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

47. Prohibition of the use of the word “co-operative”.

47. Prohibition of the use of the word “co-operative”.—(1) No person other than a registered society shall trade or carry on business under any name or title of which the word “co-operative” is part without the sanction of the [xiv][State Government]:

Provided that nothing in this section shall apply to the use by any person or his successor in interest of any name or title under which he traded or carried on business at the date on which this Act comes into operation.

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

48. Indian Companies Act, 1882, not to apply.

48. Indian Companies Act, 1882, not to apply.—The provisions of the Indian Companies Act, 1882 (6 of 1882), shall not apply to registered societies.

49. Saving of existing societies.

49. Saving of existing societies.—Every society now existing which has been registered under the Co-operative Credit Societies Act, 1904 (10 of 1904), shall be deemed to be registered under this Act, and its by-laws shall, so far as the same are not inconsistent with the express provisions of this Act, continue in force until altered or rescinded.

50. Repeal.

50. Repeal.—[Repealed by the Second Repealing and Amending Act,1914 (17 of 1914), Section 3 and Schedule II.]

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