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THE DELHI CO-OPERATIVE SOCIETIES ACT,
2003
ARRANGEMENT OF SECTIONS
PREAMBLE
CHAPTER-I
PRELIMINARY
SECTIONS
1. Short title, extent and commencement.
2. Definitions.
CHAPTER-II
Registration of Co-operative Societies
3. Registrar.
4. Co-operative societies which may be registered.
5. Restrictions on registration.
6. Restrictions on holding of shares.
7. Application for registration.
8. Power of the Registrar to decide certain questions.
9. Registration.
10. Registration certificate.
11. Bye-laws of co-operative societies.
12. Amendment of bye-laws of a co-operative society and compulsory
amendment of bye-laws by the Registrar.
13. When amendments of bye-laws come into force.
14. Change of name.
15. Change of liability.
16. Amalgamation, transfer of assets and liabilities and division of co-operative
societies.
17. Power to direct amalgamation, division and re-organisation in public interest,
etc.
18. Registrar to prepare scheme of amalgamation of co-operative bank in certain
cases.
19. Liability of a co-operative bank to the Deposit Insurance Corporation.
20. Cancellation of registration certificate of the co-operative societies in certain
cases.
21. Classification.
CHAPTER-III
Members of Co-operative Societies and their Rights and liabilities
22. Persons who may become members.
23. Nominal or associate or joint member.
24. Member not to exercise rights till due payment made.
25. Votes of members.
26. Manner of exercising vote.
27. Restriction on transfer of shares or interest.
28. Transfer of interest on death of member.
29. Liability of past member and estate of deceased member.
CHAPTER-IV
Management of Co-operative societies
30. Final authority in a co-operative society.
31. Annual general body meeting.
32. Returns to be filed to the Registrar after annual general body meeting.
33. Special general body meeting.
34. Constitution of committee.
35. Election and nomination of members of committee.
36. Removal of committee or its officer.
37. Supersession of committee.
38. Securing possession of records, etc.
39. Acts of co-operative society not to be invalidated by certain defects.
40. Expulsion of members.
41. Cessation of membership of co-operative society.
42. Directions by the Registrar for successful conduct of business.
CHAPTER-V
Privileges of Co-operative Societies
43. Co-operative society to be body corporate.
44. First charge of co-operative society on certain movable assets of member for
the amount due to him.
45. Charge on immovable property of member borrowing loans from certain co-
operative societies.
46. Charge and set-off in respect of share or contribution or interest of members.
47. Share or contribution or interest not liable to attachment.
48. Register of members.
49. Admissibility of copy of entry as evidence.
50. Exemption from compulsory registration of instruments.
51. Exemption from certain taxes, fees and duties.
52. Deduction from salary to meet co-operative society's claim in certain cases.
CHAPTER-VI
Properties and funds of Co-operative Societies
53. Funds other than net profits not to be divided among members.
54. Contribution to charitable purpose.
55. Contribution to Co-operative Education Fund.
56. Investment of funds.
57. Restrictions on loans.
58. Restrictions on borrowings.
59. Restrictions on other transactions with non-members.
CHAPTER-VII
Audit, inquiry, inspection and surcharge
60. Audit.
61. Inspection of co-operative societies.
62. Inquiry by the Registrar.
63. Inspection of books of indebted co-operative societies.
64. Cost of inquiry.
65. Recovery of cost.
66. Surcharge.
67. Rectification of defects in audit, inquiry or inspection.
68. Power to summon and examine documents and persons, etc.
69. Maintenance of accounts and books, etc.
CHAPTER-VIII
Settlement of Disputes
70. Disputes which may be referred for arbitration.
71. Reference of disputes to arbitration.
72. Power of financing bank and federal co-operative society to proceed.
CHAPTER-IX
Special provisions for Co-operative Housing Societies
73. Application of this chapter.
74. Definitions.
75. Limit on membership.
76. Rights and privileges of members on allotment of plot or dwelling unit in a
co-operative housing society.
77. Allotment of plots, flats or houses through draw of lots.
78. Provision for nomination.
79. Restriction on transfer of share or interest of a member.
80. Permission for transfer of occupancy right not to be ordinarily refused and
provision for appeal.
81. Creation, maintenance and utilisation of building and replacement fund.
82. Registration of mortgage in favour of co-operative housing society or apex.
83. Settlement of disputes.
84. Recovery of outgoings and arrears of dues as arrears of land revenue.
85. Recovery of dues and foreclosures.
86. Expulsion of a member.
87. Additional grounds for Cessation of membership of co-operative housing
society.
88. Management of co-operative housing societies.
89. Maintenance of essential services in co-operative housing societies.
90. Co-operative housing society to maintain register of its properties with
prescribed details.
91. Special provision for regularisation of occupancy right of persons who have
acquired such a right through the instrument of power of attorney or agreement
for sale.
92. Execution of housing project.
93. Management of co-operative housing complex by co-operative societies.
94. House building co-operative societies which have achieved their objectives.
CHAPTER-X
Winding up of co-operative societies
95. Dissolution of co-operative society by members.
96. Dissolution of co-operative society by the Registrar.
97. Winding up of co-operative banks at the direction of the Reserve Bank.
98. Re-imbursement to the Deposit Insurance and Credit Guarantee by the
liquidator
99. Appointment of liquidator.
100. Duties of liquidator.
101. Powers of liquidator.
102. Disposal of surplus assets of liquidated co-operative societies.
103. Final accounts.
CHAPTER-XI
Execution of awards, decrees, orders and decisions
104. Enforcement of charge.
105. Execution of orders, etc.
106. Execution of orders of liquidator.
107. Attachment before award.
108. Recovery of debt.
109. Registrar or person empowered by him to be civil court for certain
purposes.
110. Recovery of sums due to Government.
111. Special powers of Registrar for recovery of amount recoverable as arrears of
land revenue.
CHAPTER-XII
Appeals, Revision and review
112. Appeals.
113. No appeal or revision in certain cases.
114. Delhi Co-operative Tribunal.
115. Review.
116. Revision.
117. Interlocutory orders.
CHAPTER-XIII
Offences and penalties
118. Offences and penalties.
119. Prohibition of the use of the word `co-operative' or its equivalent.
120. Punishment for offences not otherwise provided for.
121. Cognizance of offences.
122. Presumption as to commission of offence in certain cases.
123. Presumption as to statements.
124. Address of co-operative society.
125. Copy of Act, rules and bye-laws, etc. to be open for inspection.
126. Power to exempt co-operative societies from conditions as to registration.
127. Power to exempt co-operative societies from the provisions of the Act.
128. Officers and employees to be public servants.
129. Notice necessary in suits.
130. Companies Act not to apply.
131. Saving of existing co-operative societies.
132. Bar of jurisdiction of civil or revenue courts.
133. Powers of civil Court.
134. Indemnity.
135. Service rules for employees of co-operative societies.
CHAPTER-XIV
Rules and Miscellaneous provisions
136. Power to delegate.
137. Power to make rules.
138. Power of the Registrar to give directions to the co-operative banks.
139. Right to information.
140. Act to override other laws.
141. Repeal and savings.
142. Removal of difficulties.
The First Schedule [See Section 2(g)]
Co-operative Principles
* * *
No.F.14 (32)/LA-2003/149 Dated: the 2nd April, 2004
NOTIFICATION
No.F.14 (32)/LA-2003 - The following Act of the Legislative Assembly of the National
Capital Territory of Delhi received the assent of the President of India on the 3rd March,
2004 and is hereby published for general information:-
No. Part file 37/01/Coop.-Act/Policy/RCS/10 Dated: 24-03-2005
NOTIFICATION
No. Part file 37/Coop.-Act/Policy/RCS/(i) - In exercise of the powers
conferred by sub-section (3) of section I of the Delhi Co-operative
Societies Act, 2003 (Delhi Act 3 of 2004), the Lieutenant Governor of
National Capital Territory of Delhi, hereby, appoints the 1st day of April
2005 as the date on which the provisions of the said Act shall come into
force.
No. Part file 37/Coop.-Act/Policy/RCS/(ii) - In exercise of the powers
conferred by sub-section (3) of section I of the Delhi Co-operative Societies
(Amendment) Act, 2004 (Delhi Act I of 2005), the Lieutenant Governor of
National Capital Territory of Delhi, hereby, appoints the I" day of April 2005 as
the date on which the provisions of the said Act shall come into force.
No. Part file 37/01/Coop.-Act/Policy/RCS/(iii) - In exercise of the
powers conferred by sub-section (3) of section I of the Delhi Co-operative
Societies (Amendment) Act, 2006 (Delhi Act 8 of 2006), the Lieutenant
Governor of National Capital Territory of Delhi, hereby, appoints the 13th day
of January 2007 as the date on which the provisions of the said Act shall come
into force.
"THE DELHI CO-OPERATIVE SOCIETIES ACT,
2003" (DELHI ACT 3 OF 2004)
(As passed by the Legislative Assembly of the National Capital Territory of Delhi on
the 29th July, 2003)
[3rd March, 2004}
An Act to consolidate and amend the laws relating to co-operative societies, to facilitate
the voluntary formation and democratic functioning of cooperatives as people's
institutions based on self help and mutual aid to enable them to promote their economic
and social betterment and to provide for better regulation, management, functional
autonomy of such societies and for matters connected therewith or incidental thereto in
the National Capital Territory of Delhi.
Be it enacted by Legislative Assembly of the National Capital Territory of Delhi in
the Fifty-fourth Year of the Republic of India as follows :-
CHAPTER - I
PRELIMINARY
Short title, extent and commence-ment.
1. (1) This Act may be called the Delhi Co-operative Societies Act, 2003.
(2) It extends to the whole of the National Capital Territory of Delhi.
(3) It shall come into force on such date as the Government may, by notification in the
official Gazette, appoint.
Definitions.
2. In this Act, unless the context otherwise requires, -
(a) Omitted vide Notification No. F.14(31)/LA-2004/16 dated 17/01/2005
(b) "area of operation" means the area of Delhi from which the membership is drawn;
(‘and’ Omitted vide Notification No. F.14(31)/LA-2004/16 dated 17/01/2005)
(c) "bye-laws" means the registered bye-laws for the time being in force and includes
registered or deemed amendments of such bye-laws;
(d) "Collector" shall have the same meaning as is assigned to it in the General
Clauses Act, 1897 (10 of 1897).
(e) "committee' means the governing body of a co-operative society by whatever
name called, to which the management of the affairs of the co-operative society
is entrusted;
(f) "co-operative bank" means a bank as defined under section 5 as amended by
section 56 of the Banking Regulations Act, 1949 ( 10 of 1949);
(g) "co-operative principles" means the co-operative principles specified in the
Schedule to this Act;
(h) "co-operative society" means a society registered or deemed to be registered
under this Act;
(i) "co-operative year" means the year ending on the 31st day of March;
(j) "Delhi" means the National Capital Territory of Delhi;
(k) "Deposit Insurance Corporation" means the Deposit Insurance and Credit
Guarantee Corporation established under section 3 of the Deposit Insurance and
Credit Guarantee Corporation Act, 1961 (47 of 1961);
(l) "Divisional Commissioner" means an officer appointed by the Government as such
possessing the powers of the Collector and the District Magistrate under the
relevant laws for the time being in force.
(m) "federal co-operative society" means a co-operative society whose membership
is available only to co-operative societies and in the case of a federal co-
operative society formed with the main objective to propagate and promote
activities in the field of art, culture, education, information technology, training,
industry, etc., shall also include experts in the respective fields in individual
capacity not exceeding one-fifths of the total strength of such society or twenty,
whichever is less;
(n) "financing bank" means a co-operative bank the objects of which include the
creation of funds to be lent to other co-operative societies;
(o) "general body" in relation to a primary co-operative society means all the
members of that co-operative society and in relation to a federal co-operative
society, means all the delegates of the member co-operative societies and the
individual members as per clause (m);
(p) "Government" means the Lieutenant Governor of the National Capital Territory of
Delhi appointed by the President under article 239 and designated by such under
article 239 AA of the Constitution;
(q) "Lieutenant-Governor" means the Administrator of National Capital Territory of
Delhi appointed by the President under article 239 of the Constitution;
(r) "member" means a person joining in the application for the registration of a co-
operative society and a person admitted to membership after such registration in
accordance with this Act, the rules and the bye-laws, and includes a nominal or
associate or joint member and the Government when it subscribes to the share
capital of a co-operative society;
(s) "NABARD" means the National Bank of Agriculture and Rural Development
constituted under the National Bank for Agriculture and Rural Development Act,
1981 (61 of 1981);
(t) ``officer'' means the president, vice-president, chairman, vice-chairman, managing
director, secretary, manager, member of committee, treasurer, liquidator,
administrator and includes any other person empowered under this Act, the rules
or the bye-laws, to give directions in regard to the business of a co-operative
society;
(u) "prescribed'' means prescribed by rules made under this Act;
(v) "primary co-operative society" means a co-operative society in which individuals
are members;
(w) "Registrar" means a person appointed to perform the functions of the Registrar of
co-operative societies under this Act and includes any person appointed to assist
the Registrar when exercising all or any of the powers of the Registrar;
(x) "Reserve Bank" means the Reserve Bank of India constituted under sub-section
(1) of section 3 of the Reserve Bank of India Act, 1934 (2 of 1934);
(y) "rule" means a rule made under this Act;
(z) "section" means a section of this Act;
(za) "Sub-divisional Magistrate" means an Executive Magistrate appointed under the
Code of Criminal Procedure, 1973 (2 of 1974) and posted by the Government to
be in-charge of the sub-division;
(zb) "Tribunal" means the Delhi Co-operative Tribunal constituted under section 114.
CHAPTER - II
REGISTRATION OF CO-OPERATIVE SOCIETIES
Registrar.
3. (1) The Government may, by notification in the Official Gazette, appoint a person to
be the Registrar of co-operative societies for Delhi and may appoint other
persons to assist him.
(2) The Government may, by general or special order, confer on any person
appointed to assist the Registrar all or any of the powers of Registrar under this
Act.
(3) Every person appointed to assist the Registrar shall exercise the powers
conferred on him under sub-section(2) subject to the general guidance,
superintendence and control of the Registrar.
(4) The Government may, by notification in the Official Gazette and subject to such
conditions as it may think fit to impose, confer all or any of the powers of the
Registrar under this Act on any federal co-operative society, or an officer of such
federal co-operative society, and every such federal co-operative society or
officer on whom the powers of the Registrar are so conferred shall exercise such
powers under the general guidance, superintendence and control of the
Registrar.
Co-operative societies which may be registered.
4. (1) Subject to the provisions hereinafter contained, a co-operative society which has its
object the promotion of economic, social and cultural interests of its members, in
accordance with co-operative principles, or a co-operative society established
with the object of facilitating the operations of such a co-operative society, may
be registered under this Act with limited liability:
Provided that a co-operative society shall be registered only if it fulfils the
viability norms with limited liability as prescribed for a co-operative society or
class of co-operative societies to ensure that it is economically sound and its
registration may not adversely affect the development of co-operative movement.
(2) The word "limited" or its equivalent in any Indian language shall be the last
word in the name of every co-operative society registered under this Act with
limited liability.
Restrictions on registration.
5. No co-operative society shall be registered under this Act unless it consists of at least
fifteen members who are qualified to be members under this Act and who reside in
the area of operation of the co-operative society :
Provided that in the case of a primary co-operative society each of such
members shall be a member of different family.
Explanation .- For the purpose of this section the expression, "member of a
family" means father, mother, wife, husband and dependent children.
Restrictions on holding of shares.
6. No member other than the Government or a co-operative society shall hold more than
such portion of the share capital of a co-operative society subject to a maximum of
one-tenths, as may be prescribed.
Application for registration.
7. (1) For the purposes of registration, an application shall be made to the Registrar.
(2) The application shall be signed -
(a) in case of a co-operative society of which no member is a co-
operative society, by at least fifteen persons qualified in
accordance with the requirements of section 4; and
(b) in case of a federal co-operative society of which a member is a
co-operative society, by a duly authorised person on behalf of
such co-operative society and where all the members of the
federal co-operative society are not co-operative societies, upto
one-fifths of total strength or twenty, whichever is less, of other
members, by the minimum number of fifteen and where all
members are co-operative societies by duly authorised persons
on behalf of fifteen different co-operative societies.
Power of the Registrar to decide certain questions.
8. Where any question arises at the stage of registration whether for the purpose of this
Act a person resides in the area of operation of a co-operative society or not, or
whether a co-operative society is of same type as another co-operative society or of
different type, the question shall be decided by the Registrar whose decision shall be
final.
Registration.
9.(1) If the Registrar is satisfied -
(a) that the application complies with the provisions of this Act
and the rules;
(b) that the objects of the proposed co-operative society are in
accordance with section 4;
(c) that the proposed bye-laws are not contrary to the provisions
of this Act and the rules;
(d) that in case of co-operative bank prior written permission of
the Reserve Bank for registration has been received by the
Registrar;
(e) that the proposed co-operative society has reasonable
chances of success; the Registrar may register the co-operative
society and its bye-laws.;
(f) that in case of a co-operative housing society, the
confirmation of availability of land to the co-operative
housing society from the land allotting agency has been
received by the Registrar. (Inserted vide Notification No.
F.14(31)/LA-2004/16 dated 17/01/2005)
(2) When the Registrar refuses to register a co-operative society, he shall
communicate the order of refusal together with the reasons, therefor, to the
applicant.
(3) The application for registration shall be disposed of by the Registrar within a
period of ninety days from the date of receipt thereof by him :
Provided that if the Registrar is unable to dispose of the application within the
aforesaid period, he shall make a report to the Government stating therein the
reasons for his inability to do so, and the Government may allow him further time
not exceeding ninety days to dispose of such application :
Provided further that if the application for registration is not disposed of within
the aforesaid period of ninety days and the Registrar fails to communicate the
order of refusal within that period, the application shall be deemed to have been
accepted for registration and the Registrar shall issue the registration certificate
in accordance with the provisions of this Act and the rules made thereunder.
Registration certificate.
10. Where a co-operative society is registered or deemed to be registered under this Act,
the Registrar shall issue a certificate of registration signed by him, which shall be
conclusive evidence that the co-operative society therein mentioned is duly
registered under this Act.
Bye-laws of co-operative societies.
11. (1) Every co-operative society may make its bye-laws consistent with the provisions
of this Act and the rules made thereunder.
(2) In particular and without prejudice to the generality of the foregoing power, such
bye-laws may provide for all or any of the following matters, namely :-
(a) The name, address and area of operation of the society;
(b) the objects of the society;
(c) the services to be provided to its members;
(d) the eligibility for obtaining membership;
(e) the procedure for obtaining membership;
(f) the conditions for continuing as member;
(g) the procedure for withdrawal of membership;
(h) the transfer of membership;
(i) the procedure for expulsion from membership;
(j) the rights and duties of the members;
(k) the nature and amount of capital of the society;
(l) the manner in which the maximum capital to which a single member can
subscribe;
(m) the sources from which the funds may be raised by a co-operative society;
(n) the purpose for which the funds may be applied;
(o) the manner of allocation or disbursement of net profits of co-operative society;
(p) the constitution of various reserves;
(q) the manner of convening general meetings and quorum thereof other than
those provided under this Act;
(r) the procedure for notice and manner of voting in general and other meetings;
(s) the procedure for amending the bye-laws;
(t) the number of members of the committee not exceeding twenty one;
(u) the term of office of elected members of a committee shall be three years;
(v) the procedure for removal of members of the committee and for filling of
vacancies;
(w) the manner of convening committee meetings, its quorum, number of such
meetings in a year and venue of such meetings;
(x) the frequency of committee meetings;
(y) the powers and functions of the paid executive;
(z) the manner of imposing the penalty;
(za) the appointment, rights and duties of auditors and procedure for conduct of
audit;
(zb) the authorisation of officers to sign documents, operate of bank accounts
and to institute and defend suits and other legal proceedings on behalf of the
society;
(zc) the terms on which a co-operative society may deal with persons other than
members;
(zd) the terms on which a co-operative society may associate with other co-
operative societies;
(ze) the terms on which a co-operative society may deal with organisations other
than co-operative societies;
(zf) the procedure and manner for transfer of shares and interest in the name of a
nominee in case of death of a member;
(zg) the educational and training programmes to be conducted by the co-
operative society;
(zh) the principal place and other places of business of the co-operative society;
(zi) the minimum level of services, to be used by its members;
(zj) any other matter which may be prescribed.
Amendment of bye-laws of a co-operative society and compulsory amendment of bye-laws
by the Registrar.
12. (1) No amendment of any bye-laws of a co-operative society shall be valid unless
such amendment has been registered or deemed to have been registered under
this Act.
(2) Every proposal for such amendment approved by the general body and
complete in all respect as prescribed shall be forwarded to the Registrar within
thirty days of approval of the general body and if the Registrar is satisfied that the
proposed amendment -
(a) is not contrary to the provisions of this Act and the rules;
(b) does not conflict with the co-operative principles; and
(c) will promote the economic, social and cultural interests of the members of the
co-operative society; he may register the amendment :
Provided that in case of amendment of bye-laws of a co-operative bank, prior
approval in writing of the Reserve Bank shall be necessary.
(3) The Registrar shall forward to the co-operative society a copy of the
registered amendment together with a certificate signed by him and such
certificate shall be conclusive evidence that the amendment has been duly
registered.
(4) Where the Registrar refuses to register an amendment of bye-laws of a co-
operative society, he shall communicate the order of refusal together with the
reasons therefor, to the co-operative society in the prescribed manner.
(5) In case the Registrar does not communicate any decision under sub-section
(2) or sub-section (4) as above within the period of ninety days, the amended
bye-laws shall be deemed to have been registered.
(6) Where it appears to the Registrar that amendment in the bye-laws of a co-
operative society is necessary and desirable in the interest of the co-operative
society or class of co-operative societies, the Registrar shall direct the co-
operative society or the class of co-operative societies, as the case may be, to
make amendment in the bye-laws within a period of sixty days, by convening a
general body meeting of the co-operative society.
(7) After the expiry of the period specified in sub- section (6) and if the co-
operative society fails to make the amendment, the Registrar after giving the co-
operative society an opportunity of being heard, may register the amendment
and issue to the co-operative society, a copy of such amendment certified by him
with a certificate signed by him, with effect from the date of registration the
amendment shall be binding on the co-operative society and its members,
subject to appeal, if any.
When amendments of bye-laws come into force.
13. An amendment of the bye-laws of a co-operative society shall, unless it is
expressed to come into operation on a particular day, come into force on the day
on which it is registered or deemed to be registered.
Change of name.
14.(1) A co-operative society may by an amendment of its bye-laws, change its name but
such change shall not affect any right or obligation of the co-operative society or
of any of its members or past members and any legal proceedings pending may
be continued by or against the co-operative society under its new name :
Provided that prior approval in writing of the Reserve Bank shall be necessary
for change of the name of a co-operative bank.
(2) Where a co-operative society changes its name, the Registrar shall enter the new
name on the register of co-operative societies in place of the former name and
shall amend the certificate of registration accordingly.
Change of liability.
15.(1) Subject to the provisions of this Act and the rules, a co-operative society may, by
an amendment of its bye-laws change the form or extent of its liability.
(2) When a co-operative society has passed a resolution to change the form or extent
of its liability, it shall give notice thereof in writing to all its members and creditors
and, notwithstanding any bye-laws or contract to the contrary, any member or
creditor shall, during a period of thirty days from the date of service of the notice
upon him, have the option of withdrawing his shares, deposits or loans, as the
case may be.
(3) Any member or creditor who does not exercise his option within the period
specified in sub-section (2) shall be deemed to have assented to the change.
(4) An amendment of a bye-laws of a co-operative society changing the form or
extent of its liability shall not be registered or take effect until either -
(a) the assent thereto of all members and creditors has been obtained; or
(b) all claims of members and creditors who exercise the option referred to in
sub-section (2) within the period specified therein have been met in full.
Amalgamation, transfer of assets and liabilities and division of co-operative societies.
16.(1) A co-operative society may, by a resolution passed by a two-thirds majority of the
members present and voting at a general body meeting of the co-operative
society -
(a) transfer its assets and liabilities in whole or in part to any other co-operative
society;
(b) divide itself into two or more co-operative societies;
(c ) approve a scheme of compromise or arrangement or reconstruction.
(Inserted vide Notification No. F.14(31)/LA-2004/16 dated 17/01/2005)
(2) Any two or more co-operative societies may, by a resolution passed by a two-
thirds majority of the members present and voting at a general body meeting of
each such co-operative society, amalgamate themselves and form a new co-
operative society.
(3) The resolution of a co-operative society under sub-section (1) or sub-section (2)
shall contain all particulars of the transfer, division or amalgamation or scheme
of compromise or arrangement or reconstruction,( Substituted vide
Notification No. F.14(31)/LA-2004/16 dated 17/01/2005) as the case may be :
Provided that in the case of a co-operative bank, the Registrar shall not accord
approval to any such resolution without the previous sanction in writing of the
Reserve Bank.
(4) When a co-operative society has passed any such resolution, it shall give notice
thereof in writing to all its members and creditors and, notwithstanding any bye-
laws or contract to the contrary, any member or creditor shall, during the period
of thirty days of the date of service of the notice upon him, have the option of
withdrawing his shares, deposits or loans, as the case may be.
(5) Any member or creditor who does not exercise his option within the period
specified in sub-section (4) shall be deemed to have assented to the proposals
contained in the resolution.
(6) A resolution passed by a co-operative society under this section shall not take
effect until, either -
(a) the assent thereto of all the members and creditors has been obtained;
(b) all claims of members and creditors who exercise the option referred to in sub-
section (4) within the period specified therein have been met in full.
(7) Where a resolution passed by a co-operative society under this section involves
the transfer of any assets and liabilities, the resolution shall, notwithstanding
anything contained in any law for the time being in force, be a sufficient
conveyance to vest the assets and liabilities in the transferee without any further
assurance.
Power to direct amalga-mation, division and re-organisation in public interest, etc.
17. (1) Where the Registrar is satisfied that it is essential in the public interest, or in the
interest of the co-operative movement, or for the purpose of securing the proper
management of any co-operative society that two or more co-operative societies
should be amalgamated or any co-operative society should be divided to form
two or more co-operative societies or should be reorganised, then
notwithstanding anything contained in section 16, but subject to the provisions of
this section, the Registrar may, by order, provide for the amalgamation, division
or reorganisation of these co-operative societies into a single co-operative
society or into co-operative societies with such constitution, property, rights,
interest and authorities and such liabilities, duties and obligations as may be
specified in the order:
Provided that no such order of amalgamation, division or reorganisation in
respect of a co-operative bank shall be made without the previous sanction in
writing of the Reserve Bank.
(2) No order shall be made under this section unless -
(a) a copy of the proposed order has been sent in draft to the co-operative society or
each of the co-operative societies concerned; and
(b) the Registrar has considered and made such modifications in the draft order as
may seem to him desirable in the light of any suggestions and objections which
may be received by him within such period (not being less than sixty days from
the date on which a copy of the order aforesaid is received by the co-operative
society or co-operative societies, as the case may be), as the Registrar may fix in
that behalf, either from the co-operative society or from any of the co-operative
societies concerned or from any member or class of members thereof or from
any creditor or class of creditors thereof.
(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, division or
reorganisation, as the case may be.
(4) Every member or creditor of each of the co-operative society to be amalgamated,
divided or reorganised, who has objected to the scheme of amalgamation,
division, or reorganisation, within the period specified, shall be entitled to receive,
on the issue of the order of amalgamation, division or reorganisation, his share or
interest, if he be a member and the amount in satisfaction of his dues, if he be a
creditor.
(5) On the issue of an order under sub-section (1), the provisions of sub-sections (2),
(3) and (4) of section 20 shall apply to the co-operative societies so
amalgamated, divided or reorganised as if the amalgamation, division or
reorganisation had been made under section 16.
Registrar to prepare scheme of amalgamation of co-operative bank in certain cases.
18. (1) When an order of moratorium has been made by the Central Government under
sub-section (2) of section 45 of the Banking Regulations Act, 1949 (10 of 1949) in
respect of a co-operative bank, the Registrar, with the previous approval of the
Reserve Bank in writing, may, during the period of moratorium, prepare a scheme -
(a) for the reorganisation of the co-operative bank; or
(b) for the amalgamation of the co-operative bank with any other co-operative
bank.
Liability of a co-operative bank to the Deposit Insurance Corporation.
19. Notwithstanding anything contained in sections 16 and 17 or any other provision of
this Act, where a co-operative bank, being an insured bank within the meaning of the
Deposit Insurance and Credit Guarantee Corporation Act, 1961 (47 of 1961), is
amalgamated or reorganised 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 insured bank is amalgamated or the new co-
operative bank formed after such amalgamation, as the case may be, the insured
bank or transferee bank shall be under an obligation, to repay the Deposit Insurance
Corporation in the circumstances, to the extent of and in the manner referred to in
section 21 of the Deposit Insurance and Credit Guarantee Corporation Act,1961 (47
of 1961).
Cancellation of registration certificate of the co-operative societies in certain cases.
20.(1) Where the whole of the assets and liabilities of a co-operative society are
transferred to another co-operative society in accordance with the provisions of
section 16 or section 17, the registration of the first mentioned co-operative
society shall stand cancelled and the co-operative society shall be deemed to
have been dissolved and shall cease to exist as corporate body.
(2) Where two or more co-operative societies are amalgamated into a new co-
operative society in accordance with the provisions of section 16 or section 17,
the registration of each of the amalgamating co-operative society shall stand
cancelled on the registration of the new co-operative society, and each co-
operative society shall be deemed to have been dissolved and shall cease to
exist as a corporate body.
(3) Where a co-operative society divides itself into two or more co-operative societies
in accordance with the provisions of section 16 or is divided by the Registrar in
accordance with the provisions of section 17, the registration of that co-operative
society shall stand cancelled on the registration of the new co-operative society
and that co-operative society shall be deemed to have been dissolved and shall
cease to exist as a corporate body.
(4) The amalgamation and splitting of co-operative society or co-operative societies
shall not in any manner whatsoever affect any right or obligation of resulting co-
operative society or co-operative societies or render defective any legal
proceedings by or against the co-operative society or co-operative societies or
any legal proceedings that might have been continued or commenced by or
against the co-operative society or co-operative societies, as the case may be,
before the amalgamation or splitting may be continued or commenced by or
against the resulting co-operative society or co-operative societies.
(5) Where a co-operative society has not commenced business within one hundred
and eighty days of its registration or has ceased to function or if the Registrar is
satisfied on the basis of inspection, inquiry or audit that the co-operative society
no longer has genuinely as its object one or more of the objects specified in
section 4 and that its registration ought, in the interest of general public, be
cancelled, he shall give an opportunity to the co-operative society to represent its
case and if not satisfied he shall make an order cancelling the registration of the
co-operative society, the co-operative society shall, from the date of such order
of cancellation be deemed to be dissolved and shall cease to exist as a corporate
body.
* Provided that in the case of a co-operative society which has not conducted
audit or annual general body meeting for five consecutive years or has no fixed
assets and outside liabilities excluding share money of the members, such
society shall be deemed to have been dissolved and shall cease to exist as
corporate body after the expiry of the said period of five years.
Classification.
21. The Registrar shall classify co-operative societies with reference to their objects, area
of operation, membership or any other matter.
CHAPTER - III
MEMBERS OF CO-OPERATIVE SOCIETIES AND THEIR RIGHTS AND LIABILITIES
Persons who may become members.
22.(1) No person shall be admitted as member of a co-operative society except the
following, namely -
(a) an individual competent to contract under section 11 of the Indian Contract
Act, 1872 (9 of 1872);
(b) any other co-operative society;
(c) the Government;
(d) a firm, a joint stock company, or any other body corporate constituted under
any law; and
(e) such class or classes of persons or association of persons as may be notified
by the Government in this behalf :
Provided that the provisions of clause (a) shall not apply to an individual seeking
admission to a co-operative society exclusively formed for the benefit of students
of a school or college :
Provided further that no individual shall be eligible for admission as a member of
any financing bank or federal co-operative society except as provided in clause
(m) of section 2.
(2) Notwithstanding anything contained in sub-section (1), the Government may,
having regard to the fact that the interest of any person or class of persons
conflicts or is likely to conflict with the objects of any co-operative society or class
of co-operative societies by general or special order, published in the official
Gazette, declare that any person or class of persons engaged in or carrying on
any profession, business or employment shall be disqualified from being
admitted, or for continuing as member or shall be eligible for membership only to
a limited extent of any specified co-operative society or class of co-operative
societies, so long as such person is or such persons are engaged in or carrying
on that profession, business or employment, as the case may be.
Nominal or associate or joint member.
23. (1) Notwithstanding anything contained in section 22, a co-operative society may
admit any person as a nominal or associate or joint member in accordance with
its bye-laws and subject to the rules.
(2) A nominal or associate member shall not be entitled to any share in any form
whatsoever, in the assets or profits of the co-operative society.
(3) Save as provided in this section, a nominal or associate or joint member shall
have such privileges and rights of a member and be subject to such liabilities of a
member as may be prescribed in rules and specified in the bye-laws of the co-
operative society.
Member not to exercise rights till due payment made.
24. No member of a co-operative society shall exercise the right of a member unless he
has made such payment to the co-operative society in respect of membership and
share or has acquired such interest in the co-operative society as may be specified in
the bye-laws.
Votes of members.
25. Every member of a co-operative society shall have one vote in the affairs of the co-
operative society :
Provided that -
(a) in the case of an equality of votes, the Chairman shall have a second or casting
vote;
(b) a nominal or associate or joint member shall not have the right of vote;
(c) where the Government is a member of the co-operative society, each person
nominated by the Government on the committee shall have one vote; and
Provided that where the Government had subscribed to the Share
Capital of such cooperative society, the voting rights of the
Government nominees shall be in proportion to the Share Capital of
the Government in the paid-up equity of the cooperative society
which shall be distributed among nominated members equally;
(d) if a member is in default in payment of the sum demanded by the co-operative
society or has transferred his interest in a co-operative society to any other
member or to any other person without the approval of the competent authority,
he shall have no voting right in the general body meeting of the co-operative
society.
(e) “if a co-operative society becomes defunct and has ceased to function in
accordance with the bye-laws and co-operative principles, its representative shall
have no voting right in the affairs of a federal co-operative society or financial
bank or financial society.”
Explanation I. - Default means any default in payment of loan installment, land
money, construction money and annual subscription payable as provided in the
bye-laws of a co-operative society for which due notice for payment has been
served on the member or an award has been passed for recovery of such sum.
* Explanation II. –Defunct society means a society which has not carried on
business for three consecutive years or its accounts have not been audited for
three or more consecutive years.
Manner of exercising vote.
26.(1) Every member of a co-operative society shall exercise his vote in person and no
member shall be permitted to vote by proxy.
(2) Notwithstanding anything contained in sub-section (1), a co-operative society
which is a member of another co-operative society, may appoint one of its
member to vote on its behalf in the affairs of that other co-operative society.
Restriction on transfer of shares or interest.
27. The transfer of the share or interest of a member in the capital of a co-operative
society shall be subject to such conditions as to maximum holding as are specified in
section 6.
Transfer of interest on death of member.
28.(1) On the death of a member, a co-operative society shall 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 share or interest as ascertained in
accordance with the rules or the bye-laws:
Provided that -
(i) such nominee, heir or legal representative, as the case may be, may require
payment by the co-operative society of the value of the share or interest of the
deceased member ascertained as aforesaid; or
(ii) the co-operative society shall transfer the share or interest of the deceased
member to such nominee, heir or legal representative, as the case may be, being
qualified in accordance with the rules and bye-laws for membership of the co-
operative society, or on his application within one hundred and eighty days of the
death of the deceased member to any person specified in the application who is
so qualified; and
(iii) no such transfer or payment shall be made except with the consent of the
nominee, heir or legal representative, as the case may be.
(2) A co-operative society shall, subject to the provisions of section 45 and
unless within three hundred and sixty five days of the death of member
prevented by an order of a competent court, pay to such nominee, heir or legal
representative, as the case may be, all other moneys due to the deceased
member from the co-operative society.
(3) All transfers and payments made by a co-operative society in accordance
with the provisions of this section shall be valid and effectual against any demand
made upon the co-operative society by any other person.
Liability of past member and 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 co-operative society for the debts of the co-
operative society as they existed -
(a) in case of a past member, on the date on which he ceased to be a member;
and
(b) in the case of a deceased member, on the date of his death; shall continue for
a period of seven hundred and thirty days from such date.
(2) Where a co-operative society is ordered to be wound up under section 95, section
96 or section 97, the liability of a past member or of the estate of a deceased
member who ceased to be a member or died within seven hundred and thirty
days immediately preceding the date of the order of winding up shall continue
until the entire liquidation proceedings are completed but such liability shall
extend only to the debts of the co-operative society as they existed on the date of
his ceasing to be a member or death, as the case may be.
CHAPTER - IV
MANAGEMENT OF CO-OPEATIVE SOCIETIES
Final authority in a co-operative society.
30. (1) The final authority in a co-operative society shall vest in the general body of
members :
Provided that where the bye-laws of a co-operative society provide for the
constitution of a smaller body consisting of delegates of members of the co-
operative society elected or selected in accordance with such bye-laws, the
smaller body shall exercise such powers of the general body as may be
prescribed or as may be specified in the bye-laws of the co-operative society.
(2) Notwithstanding anything contained in sub-section (2) of section 26 each delegate
shall have one vote in the affairs of the federal co-operative society.
Annual general body meeting.
31.(1) Every co-operative society shall within a period of one hundred and eighty days
(Substituted vide Notification No. F.14(31)/LA-2004/16 dated 17/01/2005) next
after the date fixed for making-up its accounts for the year under the rules for the
time being in force, call a general body meeting of its members for the purpose of
_
(a) approval of the programme of the activities of the co-operative society
prepared by the committee for the ensuing year;
(b) election, if any, of the members of the committee other than the nominated
members subject to the provisions of section 35;
(c) consideration of the audit report along with audited accounts and the annual
report;
(d) disposal of the net profits; and
(e) consideration of any other matter which may be brought forward in
accordance with the bye-laws.
(2) If a co-operative society fails to hold the annual general body meeting within the
aforesaid period of one hundred and eighty days, (Substituted vide Notification
No. F.14(31)/LA-2004/16 dated 17/01/2005) the Registrar or any person
authorised by him may call such meeting in the manner prescribed and that
meeting shall be deemed to be a general body meeting duly called by the co-
operative society and the Registrar may order that the expenditure incurred in
calling such a meeting shall be a charge on the delinquent members of the
committee of the co-operative society who have failed to conduct the general
body meeting within the prescribed time limit and the said amount shall be
recoverable as arrears of land revenue from such delinquent members of the co-
operative society in the same manner as provided in section 111.
(3) At every annual general body meeting of the co-operative society, the committee
shall lay before the general body a statement showing the details of the loans, if
any, given to any of the members of the committee during the preceding year.
Returns to be filed to the Registrar after annual general body meeting.
32. Every year within thirty days of holding of annual general body meeting, the
committee shall file returns relating to its constitution, business and allied matters
to the Registrar as prescribed and if the returns are not filed, it shall be an
offence under this Act and the persons responsible shall be penalised in
accordance with the provisions of this Act.
Special general body meeting.
33. (1) The committee of a co-operative society may, at any time, call a special general
body meeting of the co-operative society and shall call such meeting within thirty
days after the receipt of a requisition in writing from the Registrar or on a request
to the Registrar by the institution to which co-operative society is indebted, if the
number of defaulter members of such co-operative society is one-fifths or more
among the loanee members or on a requisition from one-fifths members out of
total membership of a co-operative society.
(2) If a special general body meeting of a co-operative society is not called in
accordance with the requisition referred to in sub-section (1), the Registrar or any
person authorised by him in this behalf shall have the power to call such meeting
and that meeting shall be deemed to be a meeting called by the committee and
the Registrar may order that the expenditure incurred in calling such a meeting
shall be paid out of the funds of the co-operative society or by such person or
persons who, in the opinion of the Registrar, were responsible for the refusal or
failure to convene the special general body meeting and shall be recovered as
arrears of land revenue in the same manner as provided in section 111.
Constitution of committee.
34. The general body meeting of a co-operative society shall constitute a committee as
prescribed and in accordance with the bye-laws and entrust the management of
affairs of the co-operative society to such committee.
Election and nomination of members of committee.
35.(1) The superintendence, direction and control of the preparation of the electoral rolls
for, and the conduct of elections of the members of the committee of, a co-
operative society shall be vested in the committee which shall appoint returning
officer who shall not be a member or an employee of the society:
Provided that on the request of the committee or one-sixth members of the
society, and in case of dispute in a society, the Registrar may appoint the
returning officer to conduct the election of a society:
Provided further that the Government shall appoint returning officer, not below
the rank of a gazetted officer or a retired gazetted officer to conduct the election
of a co-operative bank, financial bank, federal co-operative society and such
housing society as has been allotted land and draw of lots has not been conducted
in accordance with the provisions of section 77 and such housing society as is
awaiting allotment of land.
(2) The vote at such election shall be by secret ballot.
(3) The term of office of the elected members of the committee shall be three years.
(4) All co-operative societies shall hold election at the commencement of this Act on the date
fixed for holding annual general body meeting as provided in section 31 and on failure to
conduct election as aforesaid, the committee shall cease to hold office and its affairs shall
be managed by a person (hereinafter referred to as "administrator") appointed by the
Registrar who shall also hold election within ninety days of his appointment.
(5) Thereafter the committee shall arrange election of the new committee before the expiry of
its term and in case the committee fails to do so, the committee shall cease to hold office
on the expiry of its term and the affairs of the co-operative society shall be managed by
an administrator appointed by the Registrar who shall also hold election within ninety
days from the date of his appointment.
(6) No person shall be eligible to be elected as a member of the committee of a co-operative
society unless he is a shareholder of that co-operative society.
(7) Notwithstanding any thing contained in this Act, a person shall be disqualified for election
of office in a committee -
(a) if he holds any such office on a committee of another co-operative society of the same
type;
(b) if he holds any such office on the committees of three or more co-operative societies of
a different type or types;
(c) if he has been held guilty of any of the offences as enumerated in section 118;
(d) if he is an officer of a co-operative society which has not got its statutory audit
completed within the statutory period prescribed in this Act; or
(e) if he fails to give a declaration on oath about his eligibility for contesting election as
prescribed.
(8) On the committee of a co-operative society or class of co-operative societies where the
Government has subscribed to the share capital seats shall be reserved for scheduled
castes, other backward classes and women as may be prescribed and two seats for
women in all types of co-operative societies.
(9) The Government may make rules generally to provide for or to regulate matters in respect
of elections of members of the committees.
(10) Notwithstanding anything contained in sub-section (1) to sub-section (9), where the
Government has subscribed to the share capital of a co-operative society, the
Government shall have right to nominate on the committee such number of persons as its
members on the following basis, namely -
(a) where the total amount of issued equity share capital held by the Government is less
than twenty six per cent of the total issued equity share capital, one member on the
committee;
(b) where total amount of issued share capital held by the Government is twenty six per
cent or more, but less than fifty one per cent of the total equity share capital, two
members on the committee;
(c) where the total amount of issued equity share capital held by the Government is
fifty one per cent but less than sixty per cent of the total issued share capital, three
members of the committee:
Provided that in case of a financing bank, there shall be a Director on the Board
from NABARD with or without any share holding with right to vote in the affairs
thereof; (Substituted vide Notification No. F.14(31)/LA-2004/16 dated 17/01/2005)
Provided that the number of such nominated persons shall not exceed one-thirds of the
total number of members of the committee or three, whichever is less :
Provided further that where the Government has guaranteed repayment of principal and
payment of interest on debenture issued by the co-operative society or guaranteed
repayment of principal and payment of interest on loans and advances to a co-operative
society, the Government shall have the right to nominate a person on the committee of
such a co-operative society as may be prescribed:
Provided also that in case of a financing bank, there shall be a Director on the Board
from NABARD with or without any share holding with the right of vote in the affairs
thereof;
(cc) where the total amount of issued equity share capital held by the Government
is sixty per cent or more of the total issued share capital or the Government has
given loan or made advances to the co-operative society or guaranteed the
repayment of principal and payment of interest on debentures or bonds issued by
the co-operative society or guaranteed the payment of principal and payment of
interest on loan and advances to the co-operative society in amount not less than
sixty percent in the aggregate of the total amount so borrowed by the co-operative
society,
** Members of the Committee including Chairman in the following manner namely:-
Percentage held by the Government Percentage of Members of committee to
be nominated by the Govt.
Sixty to Seventy Percent
Seventy to Eighty percent
Eighty to Ninety Percent
Above Ninety Percent
Seventy Percent
Eighty Percent
Ninety Percent
Hundred Percent
Provided that the right once accrued under this clause shall continue until the
percentage of the amount in respect of share contribution or guaranteed loan goes
down to less than Sixty per cent; (Inserted vide Notification No. F.14(31)/LA-2004/16
dated 17/01/2005)
(d) where the Industrial Finance Corporation of India or a federal co-operative society or
a financing bank or the Delhi Financial Corporation Ltd. or any other financing institution
notified in this behalf by the Government has provided finance to a co-operative society,
the Industrial Finance Corporation of India or such federal co-operative society or
financing bank or the Delhi Financial Corporation Ltd., or such other financing institution,
as the case may be, shall have the right to nominate one person on the committee.
(11) A person nominated under sub-section (10) shall hold office during the pleasure of
the Government or the concerned Corporation or federal co-operative society, or
financing bank or other financing institution, as the case may be.
Removal of committee or its officer.
36.(1) A motion for expressing lack of confidence in the committee or any of its
officer may be made in a special general body meeting convened for the
purpose.
(2) The requisition for convening the special general body meeting as above shall
not be admissible unless moved in writing by not less than one-fifths of the total
members of a co-operative society, if the motion of no confidence is carried by a
simple majority of the members present and voting, the committee shall be
removed and special general body meeting shall also elect an ad-hoc committee
to take care of the affairs of the co-operative society which shall also hold
elections to the committee within ninety days of the date of the appointment of
ad-hoc committee.
Supersession of committee.
37.(1) If, in the opinion of the Registrar, the committee of any co-operative society
continuously makes default for ninety days (Substituted vide Notification No.
F.14(31)/LA-2004/16 dated 17/01/2005) or is negligent in the performance of the
duties imposed on it by or under this Act or the rules framed thereunder, the bye-
laws or commits any act which is prejudicial to the interest of the co-operative
society or its members or defies the directions issued by the Registrar under
section 42 of this Act or fails to comply with the provisions of section 92 or
there is a stalemate in the constitution or function of the committee or fails
to initiate recovery of the dues of the financing institution inspite of a
notice issued to the co-operative society by the financing institution within
a period of ninety days or fails to remit the recovered amount from
members, to the financing institution to which the society is indebted
within a period of ninety days, (Substituted vide Notification No. F.14(31)/LA-
2004/16 dated 17/01/2005) the Registrar may after giving the committee an
opportunity to state its objections, if any, by order in writing direct -
(a) to hold election of the committee within a period of thirty days by calling a
special general body meeting; and
(b) if in the opinion of the Registrar, the election of committee is not feasible
under the prevailing circumstances, the Registrar shall pass an order in
writing to remove the committee and appoint one or more administrators
to manage the affairs of the co-operative society for a period not
exceeding one hundred and eighty days to be specified in the order,
which period may, at the discretion of the Registrar be extended from
time to time, however, that the aggregate period does not exceed
three hundred and sixty five days : (Substituted vide Notification No.
F.14(31)/LA-2004/16 dated 17/01/2005)
Provided that where the co-operative society is a co-operative bank, before
issuing of a show-cause notice under sub-section (1), the prior consultation with
the Reserve Bank and NABARD shall be necessary;
Proviso (Deleted vide Notification No. F.14(31)/LA-2004/16 dated 17/01/2005)
(c) Notwithstanding anything contained in this Act, the Registrar in
case of the co-operative bank, if so required by the Reserve
Bank or the NABARD on requisition from the Reserve Bank to
supersede management of a co-operative bank, the Registrar
shall supersede the management of such a co-operative bank.
(2) The Registrar may fix such remuneration, if any, for the administrator(s) as he may
think fit and such remuneration shall be paid out of the funds of the co-operative
society.
(3) The administrator shall, subject to the control of the Registrar and to such
instructions as he may from time to time give, exercise powers and perform
functions of the committee or of any officer of the co-operative society and take all
such actions as may be required in the interest of the co-operative society, but
shall not be empowered to enroll new members without the prior approval of the
Registrar. (Inserted vide Notification No. F.14(31)/LA-2004/16 dated 17/01/2005)
(4) The administrator shall call the general body meeting of the co-operative society to
spell out his plan of action.
(5) The administrator shall before expiry of his term of office, arrange for the
constitution of a new committee in accordance with the rules and the bye-laws of
the co-operative society.
(6) Before passing any order under clause (b) of sub-section (1) in respect of a co-
operative society the Registrar shall, at first, consult the financing bank or the
financing institution to which it is indebted :
Provided that where the co-operative society is a co-operative bank, before issuing a
show cause notice under sub-section (1) prior consultation with the Reserve
Bank shall be necessary :
Provided further that on a requisition of the Reserve Bank to supersede the Board of a
co-operative bank, the Registrar shall supersede the committee of such a co-
operative bank.
(7) Notwithstanding anything contained in this Act, the Registrar shall in the case of a
co-operative bank, if so required in writing by the Reserve Bank or NABARD in
the public interest or for preventing the affairs of the co-operative bank being
conducted in a manner detrimental to the interest of the depositors or for
securing the proper management of a co-operative bank, pass an order for the
supersession of the committee of that co-operative bank and appoint an
administrator therefor, for such period or periods not exceeding three hundred
and sixty five days (Substituted vide Notification No. F.14(31)/LA-2004/16
dated 17/01/2005) in the aggregate, as may, from time to time be specified by
the Reserve Bank.
Securing possession of records, etc.
38. (1) (a) If the records, registers or the books of account of a co-operative society are
likely to be tampered with or destroyed and the funds and property of a co-
operative society are likely to be misappropriated or misapplied; or
(b) if the committee of a co-operative society is reconstituted at general body meeting
of the co-operative society or the committee of a co-operative society is removed
by the Registrar under section 37 or if the co-operative society is ordered to be
wound up under section 95, section 96 or section 97 and the outgoing members
of the committee refuse to hand over charge of the records and the property of
the co-operative society within fifteen days of notice by the new committee or
administrator or the liquidator to those having or entitled to receive such charge;
(c) the newly elected committee or administrator or the liquidator, as the case may be,
on expiry of fifteen days notice shall apply to the Registrar, who on application by
the newly elected committee, administrator, the liquidator or suo-motu, if
satisfied, may approach the Divisional Commissioner to authorise the Sub-
divisional Magistrate in whose jurisdiction the registered office of the society is
located, in the prescribed form setting forth the reasons therefor, to enter, search
or break open any premises where such records and properties of the society are
kept and seize any such records and properties of the society and to cause
delivery to the new committee, administrator or the liquidator of the records and
properties of the society.
(2) For the purpose of the proceedings under sub- section (1), the authorization
aforesaid shall be conclusive evidence that the records and properties to which it
related belong to the society.
(3) The officer authorised under sub-section (1) may take such police assistance as
may be necessary for the said purpose and the expenses incurred under this
section shall be borne from the funds of the society.
(4) The provisions of section 100 to 102 (both inclusive) of the Code of Criminal
Procedures, 1973 (Central Act, 2 of 1974) relating to searches and seizure shall
apply, so far as may be, to searches and seizure under this section.
Acts of co-operative society not to be invalidated by certain defects.
39. No act of a co-operative society or of any committee or of any officer shall be deemed
to be invalid by reason only of the existence of any defect in procedure or in the
constitution of the co-operative society or of the committee or in the appointment
or election of an officer or on the ground that such officer was disqualified for his
appointment.
Expulsion of members.
40. Any member of a co-operative society (other than a co-operative housing society)
may be expelled by a resolution passed by the committee of the co-operative
society subject to the approval of such resolution by the Registrar if :
(i) the member has wilfully deceived the co-operative society by false document
to obtain the membership of such co-operative society; or
(ii) the member incurs any of the disqualifications for being a member of the co-
operative society; or
(iii) the member has brought disrepute to the co-operative society or has done
any other act detrimental to the interest and proper working of the co-operative
society:
Provided that the member concerned shall not be expelled unless he has been
given a reasonable opportunity to represent himself in the matter:
Provided further that no member shall be expelled unless the resolution for such
expulsion is passed by a majority of not less than three-fourths of the members
present and entitled to vote in the meeting of the committee and no resolution for
expulsion shall be valid unless approved by the Registrar.
(2) After the resolution for expulsion is passed as above by the committee, the
resolution shall be referred to the Registrar for approval within a period of thirty
days.
(3) On receipt of the resolution for expulsion, the Registrar shall take cognizance of
such resolution within thirty days and pass a final order either approving the
expulsion or rejecting the proposal for expulsion within a period of one hundred
and eighty days and if the matter is not decided by the Registrar within the
aforesaid period, the expulsion of such a member shall be deemed have been
approved:
Provided that the Registrar, before approving the resolution, shall hear the
parties in the manner prescribed and shall have power to summon and enforce
attendance of witness including the parties interested or any of them and compel
them to give evidence on oath, affirmation or affidavit and to compel production
of documents by the same means as far as possible in the same manner as
provided in the case of a civil court under the Code of Civil Procedure, 1908 (5 of
1908) and the order under this section so passed by the Registrar shall be final
with a right for appeal before the Tribunal.
(4) Any party aggrieved by the order of the Registrar or deemed approval of
expulsion, as the case may be, under sub-section (3) may, within sixty days from
the date of such order, appeal to the Tribunal.
Cessation of membership of Cooperative Society.
41. (1) Notwithstanding anything contained in this Act, a person shall cease to be a
member of a cooperative society -
(a) on his resignation from such membership; or
(b) on his death, if there is no claim by the nominee or legal heirs
within three hundred sixty five days; or
(c) on transfer of the whole of his share or interest in that
cooperative society; or
(d) on his expulsion or incurring any disqualification for being a
member of that cooperative society.
(2) If any question as to whether a member has incurred any of the disqualifications
mentioned in sub-section (1), it shall be referred to the Registrar for his decision,
whose decision shall be final and binding.
(3) The Registrar may of his own motion, if satisfied that any member has incurred
any of the disqualification under sub-section (1) declare through an order in
writing that such member is disqualified to be a member :
Provided that no such order shall be passed without affording opportunity of
being heard to such member as prescribed.
Directions by the Registrar for successful conduct of business.
42. The Registrar may from time to time issue such directions or directives to a co-
operative society or a class of co-operative societies as he considers necessary
for successful conduct of business and on all matters incidental thereto and such
directions or directives shall be binding on them.
Provided that this power shall be limited to cooperative society with government
equity of fifty one percentum or more.
CHAPTER - V
PRIVILEGES OF CO-OPERATIVE SOCIETIES
Co-operative society to be body corporate.
43. The registration of a co-operative 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 contract, institute and defend suits and other legal proceedings and
do all things necessary for the purposes for which it is constituted.
First charge of co-operative society on certain movable assets of member for the amount
due to him.
44. (1) Notwithstanding anything contained in this Act or any other law for the time being
in force, but subject to any prior claim of the Government in respect of land
revenue or any money recoverable as land revenue, any debt or outstanding
demand owing to a co-operative society by any member or past member or
deceased member shall be a first charge upon the crops and other agricultural
produce, cattle, fodder for cattle, agricultural or industrial implements or
machinery, raw materials for manufacture and any finished products
manufactured from such raw materials, belonging to such member, past member
or forming part of the estate of the deceased member, as the case may be.
(2) No person shall transfer any property which is subject to a charge under sub-
section (1) except with the prior permission in writing of the co-operative society
which holds the charge.
(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.
(4) The charge created under sub-section (1) shall be available as against any claim
of the Government arising from a loan granted under the Land Improvement
Loans Act, 1883, (19 of 1883) or the Agriculturist's Loans Act, 1884, (12 of 1884)
after the grant of the loan by the co-operative society.
Charge on immovable property of members borrowing loans from certain co-operative
societies.
45. Notwithstanding anything contained in this Act or in any other law for the time being in
force -
(i) any person who makes an application to a co-operative society of which he is
a member for a loan shall, if he owns any land or has interest in any land as
tenant, make a declaration in the prescribed form which shall state that the
applicant thereby creates a charge on such land or interest specified in the
declaration for the payment of the amount of loan which co-operative society may
make to the member in pursuance of the application and for all future advances,
if any, required by him which the co-operative society may make to him as such
member subject to such maximum as may be determined by the co-operative
society together with the interest on such amount of loan and advances;
(ii) a declaration made under clause (i) may be varied at any time by a member
with the consent of the co-operative society in favour of which such charge is
created;
(iii) no member shall alienate the whole or any part of the land or interest therein
specified in the declaration made under clause (i) until the whole amount
borrowed by the member together with interest thereon is paid in full:
Provided that for the purpose of paying in full to the co-operative society the
whole amount borrowed by the member together with interest thereon, the
member may, with the previous permission in writing of the co-operative society
and subject to such conditions as the co-operative society may impose, alienate
the whole or any part of such land or interest thereon :
Provided further that standing crops on any such land may be alienated with the
previous permission of the co-operative society;
(iv) any alienation made in contravention of the provisions of clause (iii) shall be
void;
(v) subject to the prior claims of the Government in respect of land revenue or
any money recoverable as land revenue, there shall be a first charge in favour of
the co-operative society on the land or interest specified in the declaration made
under clause (i) for and to the extent of the dues owing by him on account of the
loans and advances;
(vi) the record of rights shall also include the particulars of every charge on land
or interest created under a declaration under clause (i) notwithstanding anything
contained in any law relating to land revenue for the time being in force;
(vii) any sum due to a co-operative society in consequence of charge created
under a declaration under clause (i) shall, on application of its recovery being
made by such co-operative society accompanied by a certificate signed by the
Registrar, be recoverable by the Collector, according to the law and under the
rules for the time being in force for the recovery of land revenue.
Explanation. - For the purposes of this section, "co-operative society" shall mean
any co-operative society or class of co-operative societies specified in this behalf
by the Government by a general or special order.
Charge and set-off in respect of share or contribution or interest of members.
46. A co-operative society shall have a charge upon the share or contribution or interest
in the capital and on the deposit of a member or past member or deceased
member and upon any dividend, bonus or profits payable to a member or past
member or the estate of a deceased member in respect of any debt due from such
member or past member or the estate of such deceased member to the co-
operative society, and may set-off any sum credited or payable to a member or
past member or the estate of deceased member in or towards payment of any such
debt.
Share or contribution or interest not liable to attachment.
47. Subject to the provisions of section 45, the share or contribution or interest of a
member or past member or deceased member in the capital of a co-operative society
shall not be liable to attachment or sale under any decree or order of any court in
respect of any debt or liability incurred by such member, and a receiver under the
Provincial Insolvency Act, 1920 (5 of 1920) shall not be entitled to or have any claim
on such share or contribution or interest.
Register of members.
48. Any register or list of members or shares kept by any co-operative society shall be
prima facie evidence of any of the following particulars entered therein -
(a) the date on which any person entered in such register or list became
a member; and
(b) the date on which any such person ceased to be a member.
Admissibility of copy of entry as evidence.
49. (1) A copy of any entry in a book of a co-operative 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 as prima facie evidence of the existence of such entry, and shall be
admitted as evidence of the matters, transactions and accounts therein recorded in every
case where, and to the same extent as, the original entry itself is admissible.
(2) No officer of a co-operative society and no officer in whose office the books of a co-
operative society are deposited after liquidation shall, in any legal proceedings to which
the co-operative society or the liquidator is not a party, be compelled to produce any of
the co-operative 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.
Exemption from compulsory registration of instruments.
50. Nothing in clauses (b) and (c) of sub-section (1) of section 17 of the Registration Act,
1908 (16 of 1908) shall apply to -
(1) any instrument relating to shares in a co-operative society
notwithstanding that the assets of the co-operative society
consist in whole or in part of immovable property; or
(2) any debenture issued by any such co-operative 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 thereof to the security afforded by a registered
instrument whereby the co-operative 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 holders of such debentures; or
(3) any endorsement upon or transfer of any debenture issued by any
such co-operative society.
Exemption from certain taxes, fees and duties.
51. (1) The Government may, by notification in the Official Gazette, remit in respect of
any class of co-operative societies -
(a) the stamp duty chargeable under any law for the time being
in force in respect of any instrument executed by or on behalf of
a co-operative society or by an officer or member thereof and
relating to the business of such co-operative society or any class
of such instruments or in respect of any award or order made
under this Act, in cases, where, but for such remission the co-
operative society, officer or member, as the case may be, would
be liable to pay such stamp duty; and
(b) any fee payable under any law for the time being in force
relating to the registration of documents or court fees.
(2) The Government may, by notification in the official Gazette, remit in respect of
any class of co-operative societies -
(a) land revenue;
(b) taxes on agricultural income; and
(c) taxes on professions, trades, callings and employments.
Provided that the aforesaid exemption shall not include exemption in respect of
Central sales taxes or Central taxes or duties or levies.
Deduction from salary to meet co-operative society's claim in certain cases.
52. (1) Notwithstanding anything contained in any law for the time being in force, a
member of a co-operative society may execute an agreement in favour of the co-
operative 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 co-
operative society in satisfaction of any debt or other demand owing by the
member to the co-operative society.
(2) On the execution of such agreement, the employer shall, if so required by the co-
operative society by a requisition in writing and so long as the co-operative
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 co-operative 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 (4 of
1936). Such payment shall be valid discharge of the employer for his liability to
pay the amount deducted.
(3) Where a requisition in writing from any co-operative society registered or deemed
to be registered in any reciprocating State/Union territory in respect of a member
of that co-operative society, who has executed any such agreement as is
referred to in sub-section (1) and who, for the time being, is employed in Delhi, is
received by his employer, the requisition shall be acted upon as if it had been
made by a co-operative society in Delhi and the provisions of this section shall
have effect accordingly.
Explanation-For the purpose of this sub-section "reciprocating State/Union territory"
means any State or Union territory which the Government may, by notification in
the official Gazette, declare to be reciprocating State/Union territory.
(4) If, after the receipt of a requisition made under sub-section (2) or sub-section (3),
the employer at any time fails to deduct the amount specified in the requisition
from the salary or wages payable to the member concerned or makes default in
remitting the amount deducted to the co-operative society, the co-operative
society shall be entitled to recover any such amount from the employer as
arrears 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.
(5) Nothing contained in this section shall apply to an establishment under a railway
administration operating any railway as defined in clause (20) of article 366 of the
Constitution.
CHAPTER - VI
PROPERTIES AND FUNDS OF CO-OPERATIVE SOCIETIES
Funds other than net profits not to be divided among members.
53. No part of the funds other than net profits of a co-operative society shall be divided by
way of bonus or dividend or otherwise distributed among its members :
Provided that after at least one-fourths of the net profits in the year has been carried to the
reserve fund, payments from the remainder of such profits and from any profits of past
years available for distribution may be made to the member to such extent and under
such conditions as may be prescribed by the rules or bye-laws.
Contribution to charitable purpose.
54. Any co-operative society may, with the prior approval of the general body, after one-fourths of
the net profits in any year has been carried to the reserve fund, contribute an amount not
exceeding five per cent of the remaining net profits to any purpose connected with the
development of co-operative movement or charitable purpose as defined in section 2 of
the Charitable Endowments Act, 1890 (6 of 1890).
Contribution to Co-operative Education Fund.
55. A co-operative society shall out of its net profits in any year credit such portion of the
profits not exceeding five per cent as may be prescribed to the Co-operative
Education Fund constituted under the rules.
Investment of funds.
56. (1) A co-operative society may invest or deposit its fund -
(a) in the postal savings 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 securities of any other co-operative society;
or
(d) with co-operative or scheduled or nationalised banks; or
(e) in any federal co-operative society of which it is a member or
apex or financing bank; or
(f) in any other mode permitted by the rules :
Provided that the co-operative bank shall be required to make investment of its
funds in accordance with the directions, instructions and guidelines of the
Reserve Bank.
(2) Any investment or deposit made before the commencement of this Act which
would have been valid if this Act had been in force are hereby ratified and
confirmed.
Restrictions on loans.
57. (1) A co-operative 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 co-
operative society may make a loan to another co-operative society :
Provided further that the co-operative bank shall make loans and advances as
per directions of the Reserve Bank from time to time.
(2) Notwithstanding anything contained in sub-section (1), a co-operative society may
make a loan to a depositor within his deposit on its security.
Restrictions on borrowings.
58. (1) A co-operative society may receive deposits, raise loans and receive grants from
external sources to such extent and under such conditions as may be specified in
the bye-laws:
Provided that the total amount of deposits and loans received during any
financial year shall not exceed ten times of the sum of subscribed share capital
and accumulated reserves:
Provided further that while calculating the total sum of subscribed share capital
accumulated reserves, the accumulated losses shall be deducted.
(2) Subject to the provisions of sub-section (1), a cooperative society may accept
funds or borrow fund for the fulfillment of its objects as are mutually contracted
upon and approved by the general body of members of the co-operative society.
(3) A co-operative society may issue non-convertible debentures or other instruments
subject to the provisions of any law for the time being in force to raise resources
for fulfillment of its objectives to the extent of twenty five per cent of its paid up
share capital with the approval of general body of members with a provision for
redemption fund for its repayment on maturity:
Provided that in case of borrowing by a co-operative bank, it shall be in
accordance with the directions, instructions and guidelines issued by the Reserve
Bank from time to time.
Restrictions on other transactions with non-members.
59. Save as provided in section 57 and section 58, the transactions of a co-operative
society with any person other than a member shall be subject to such
prohibitions and restrictions, if any, as may be prescribed.
CHAPTER - VII
AUDIT, INQUIRY, INSPECTION AND SURCHARGE
Audit.
60. (1) A co-operative society shall get its accounts audited annually by an auditor
selected from the panel prepared by the Registrar in the prescribed manner
within the period of * one hundred twenty days from the prescribed date for making up
its account for the year.
(2) The audit under sub-section (1) shall include an examination of overdue debts, if
any, the verification of the cash balance, securities and a valuation of the assets
and liabilities of the co-operative society :
Provided that in the case of a co-operative group housing society where land has
been allotted, the audit report shall contain a separate chapter regarding detailed
financial working of the co-operative society before construction, during
construction, and on allotment of flats to members, detailing individual
investment, defaults if any, by an individual, action taken by the committee in
case of default, etc. :
Provided further that the Registrar shall be competent to issue guidelines and
instructions in this regard from time to time.
(3) The person auditing the accounts of a co-operative society shall have free access
to the books, accounts, papers, vouchers, stock and other property of such co-
operative society and shall be allowed to verify its cash balance and securities.
(4) The directors, managers, administrators and other officers of the co-operative
society shall furnish to the person auditing the accounts of a co-operative society
all such information as to its transactions and working as such person may
require.
(5) It shall be the duty of the committee of the co-operative society to ensure that its
accounts are audited annually and the audit report presented for consideration in
annual general body meeting of the co-operative society as provided in section
31 and a copy of the audit report shall also be forwarded by the co-operative
society to the Registrar for his information and record.
(6) On failure to get the audit of the co-operative society conducted in time, the
Registrar shall get the audit conducted and fee paid shall be a charge against the
delinquent officers of the committee and shall be recoverable from them as an
arrears of land revenue as provided in section 111.
(7) The auditor appointed under sub-section (1) to audit the accounts of a co-
operative society shall have power where necessary -
(a) to summon at the time of his audit any officer, agent, servant or
member of the co-operative society , past or present, who he has
reason to believe can give valuable information in regard to
transactions of the co-operative society or the management of its
affairs; and
(b) to require the production of any book or document relating to the
affairs of, or any cash or securities belonging to, the co-operative
society by any officer, agent, servant, or member in possession
of such books, documents, cash or securities and in the event of
serious irregularities discovered during audit, to take them into
custody.
(8) If at the time of audit the accounts of a co-operative society are not complete, the
Registrar or the person authorised by him under sub-section (1) to audit, may
cause the accounts to be written up at the expense of the co-operative society.
(9) Audit fee, if any, due from co-operative society shall be recoverable in the same
manner as is provided in section 111.
Inspection of co-operative societies.
61. (1) The Registrar may, on the request made by a creditor or, not less than one thirds of the
members of the committee, or not less than one fifths of the total number of members, of
a co-operative society, undertake inspection of a co-operative society or class of co-
operative societies by general or special order in writing and authorise any person by
order in writing in this behalf, to make an inspection into the constitution, working and
financial condition of a co-operative society.
* Provided that where a serious complaint is made by a member or a pubic servant
in writing about the affairs of a co-operative society or committee or office bearers,
to the Registrar or to any person authorized by him in this regard not below the
rank of Joint Registrar and if the Registrar is prima-facie satisfied, after recording
his views in writing and affording an opportunity to the person against whom
complaint has been made, he may order an inspection in respect of only issue or
issues as the case may be, raised in the complaint and the inspection shall be
conducted by a person not below the rank of an Assistant Registrar. (Added vide
Notification No. F.14(31)/LA-2004/16 dated 17/01/2005)
(2) For the purpose of inspection under sub-section (1), the Registrar or a person authorised
by him under that sub-section shall at all times have access to all books, accounts,
papers, vouchers, securities, stock and other property of that society and may, in the
event of serious irregularities discovered during inspection, take into custody and shall
have power to verify the cash balance of the society and subject to general or special
order of the Registrar, call a meeting of the committee and also a general body meeting
of the society, where general body meeting is, in his opinion, necessary.
(3) Every officer or member of a co-operative society shall furnish such information
with regard to working of the society as the Registrar or the person making such
inspection may require.
(4) A copy of the inspection under this section shall be communicated to the co-
operative society within a period of ninety days from the date of completion of
such inspection.
Inquiry by Registrar.
62. (1) The Registrar may on the basis of findings of audit or inspection under section 61
or request from any creditor, or not less than one-thirds of the total members of
the co-operative society, by general or special order in writing in this behalf, hold
an inquiry or direct any of the subordinate officials authorised by general or
special order in this behalf to hold an inquiry in respect of such matters and such
period as may be specified in this order, into the constitution, business,
management and financial affairs of a co-operative society and such enquiry
shall be completed within such period as may be specified in the order but not
exceeding ninety days.
(2) The Registrar or the official authorised by him under sub-section (1) shall have
the following powers, namely -
(a) he shall at all times have, for purpose of examination free access
to the books, accounts, cash and other properties belonging to,
or in the custody of, the co-operative society and may summon
any person in possession or responsible for the custody of any
such books, accounts, documents, securities, cash or other
properties to produce the same at any place specified by him;
(b) he may, notwithstanding any rule or bye-laws specifying the
period of notice for a general body meeting of the co-operative
society, require the officers of the co-operative society to call a
general body meeting at such time and place at the
headquarters of the co-operative society to consider such matter
as may be directed by him and where the officer of the co-
operative society refuse or fail to call such a meeting, he shall
have power to call it himself;
(c) he may summon any person who is reasonably believed by him
to have any knowledge of the affairs of the co-operative society
to appear before him at any place at the headquarters of the co-
operative society or any branch thereof and may examine such
person on oath.
(3) Any meeting called under clause (b) of sub-section (2) shall have all the powers of
a general body meeting called under the bye-laws of the co-operative society and
its proceedings shall be regulated by such bye-laws.
(4) The Registrar shall supply a copy of the report of the inquiry to the co-operative
society, the financing institution, federal co-operative society if any, to which the
co-operative society is affiliated and indebted and also to the person or authority,
if any, at whose instance the inquiry is made.
Inspection of books of indebted co-operative societies.
63. (1) The Registrar shall, on the application of creditor of a co-operative society, inspect
or direct a subordinate official authorised by him by order in writing in this behalf,
to inspect the books of the co-operative society :
Provided that no such inspection shall be made unless the applicant -
(a) satisfies the Registrar that the debt is sum then due, and that
he has demanded payment thereof and has not received
satisfaction within a reasonable time; and
(b) deposits with the Registrar such sum as security for the costs
of proposed inspection as the Registrar may require.
(2) The Registrar shall communicate the result of any such inspection to the creditor.
Cost of inquiry.
64. Where an inspection is held under section 61, or an inquiry is made under sections
62, the Registrar may apportion the costs or such part of the costs as he may
think fit, between the co-operative society, the members or creditor demanding
an inspection or inquiry if any and the officers or former officers and the members
or past members of the co-operative society :
Provided that -
(a) no order of the apportionment of the costs shall be made
under this section unless the co-operative society or the person
liable to pay the costs thereunder has had reasonable
opportunity of being heard;
(b) the Registrar shall state in writing under his own hand the
grounds on which the costs are apportioned.
Recovery of cost.
65. Any sum awarded by way of costs under section 64 may be recovered, as if it were
an arrears of land revenue.
Surcharge.
66. (1) If in the course of an audit, inspection, inquiry or the winding up of a co-operative
society, it is found that any person who is or was entrusted with the organisation
or management of such co-operative society or who is or has at any time been
an officer or an employee of the co-operative society had made any payment
contrary to this Act, the rules or the bye-laws or has caused any deficiency in the
assets of the co-operative society by breach of trust or wilful negligence or has
misappropriated or fraudulently retained any money or other property belonging
to such co-operative society, the Registrar may, of his own motion, or on the
application of the committee, liquidator or any creditor, inquire himself or direct
any person authorised by him by an order in writing in his behalf, to inquire into
the conduct of such person.
(2) Where an inquiry is made under sub-section (1), the Registrar may, after giving
the person concerned an opportunity of being heard make an order requiring him
to repay or restore the money or property or any part thereof with interest at such
rate or to pay contribution and costs or compensation to such extent as the
Registrar may consider just and equitable.
(3) Any sum ordered under this section to be repaid to a co-operative society or
recovered as a contribution to its assets may be recovered on a requisition being
made in this behalf by the Registrar to the Collector in the same manner as
arrears of land revenue.
(4) This section shall apply notwithstanding that such person or officer or servant
have incurred criminal liability by this Act.
Rectification of defects in audit, inspection or inquiry.
67. The Registrar shall draw the attention of the co-operative society to the defects
noticed in every audit conducted under section 60 or inspection held under section
61 or inquiry made under section 62 or inspection of books made under section 63
and if the co-operative society is affiliated to federal co-operative society also draw
the attention of that federal co-operative society and may make an order directing the
co-operative society or its officers to take such action and within such time as may be
specified therein to remedy such defects.
Power to summon and examine documents and persons, etc.
68. (1) The Registrar, or the auditor or any person authorised by either of them to
exercise any powers under this Act shall at all reasonable times have free access
to the books, accounts, documents, records, securities, cash and other
properties belonging to, or in the custody of the co-operative society and may
summon any person in possession of, or responsible for the custody of any such
books, accounts, documents, records, securities, cash or other properties, to
produce all or any of them at any place at the headquarters of the co-operative
society or any branch thereof.
(2) The Registrar or any other subordinate official authorised by him to exercise any
powers under this Act -
(a) may summon any person who, he has reason to believe has
knowledge of any of the affairs of the co-operative society to
appear before him at any place at the headquarters of the co-
operative society or any branch thereof or at any other place
specified by the Registrar, and may examine that person on
oath;
(b) may seize the books, accounts or documents belonging to, or
in the custody of, the co-operative society, if he considers that
such seizure is necessary to ensure safety of such books,
accounts or documents, and shall give the person from whose
custody the books, accounts or documents have been seized, a
receipt for the same :
Provided that the books, accounts or documents so seized shall be retained by
him only for so long as may be necessary
Provided further that the books, accounts or documents so seized shall not be
retained for more than sixty days at a time except with the permission of the next
higher authority.
Maintenance of accounts and books, etc.
69. (1) The paid executive of every co-operative society by whatsoever designation he is
called, or the president or any other office bearer as provided in the bye-laws of
the co-operative society, if there is no such paid executive for that co-operative
society, shall be bound to keep, maintain or cause to be maintained such
accounts and books relating to that co-operative society in such manner as may
be prescribed and shall be responsible for the correct and up-to-date
maintenance of such accounts and books, for producing or causing production of
the same when called for in connection with audit, inspection or inquiry.
(2) If such accounts and books are not maintained, the Registrar may direct the
person who is responsible to bring the accounts and books up-to-date to make
them up-to-date, and he shall be bound to comply with such direction within the
period specified therein.
(3) If the person fails to comply with the direction under sub-section (2), the Registrar
may ask the committee of the co-operative society for taking action against such
person including suspension for such period, if necessary, as he may consider
necessary and authorise any person to take action for bringing such accounts
and books up-to-date at the expenses of the co-operative society and such
expenses shall be recoverable from the co-operative society as if it were an
arrear of land revenue.
(4) Where the Registrar takes action under sub- section (3), the Registrar may call
upon the person concerned whom he considers to be responsible for not
complying with the direction made under sub-section (2) and after giving such
person an opportunity of being heard, may require him to pay to the co-operative
society the expenses paid or payable by him to the Government as a result of his
failure to take action.
CHAPTER - VIII
SETTLEMENT OF DISPUTES
Disputes which may be referred for arbitration.
70. (1) Notwithstanding anything contained in any law for the time being in force, if any
dispute touching the constitution, management or the business of a co-operative
society other than a dispute regarding disciplinary action taken by the co-
operative society or its committee against a paid employee of the co-operative
society arises -
(a) among members, past members and persons claiming through members,
past members and deceased members; or
(b) between a member, past member or person claiming through a member, past
member or deceased member and the co-operative society, its committee or any
officer, agent or employee of the co-operative society or liquidator, past or
present; or
(c) between the co-operative society or its committee and any past committee,
any officer, agent or employee, or any past officer, past agent or past employee
or the nominee, heirs or legal representatives of any deceased officer, deceased
agent, or deceased employee of the co-operative society; or
(d) between the co-operative society and any other co-operative society,
between a co-operative society and liquidator of another co-operative society or
between the liquidator of one co-operative society and the liquidator of another
co-operative society;
such disputes shall be referred to the Registrar for decision and no court shall
have jurisdiction to entertain any suit or other proceedings in respect of such
disputes.
(2) If any question arises whether a dispute referred to the Registrar under this
section is or is not a dispute touching the constitution, management or the
business of a co-operative society, the decision thereon of the Registrar shall be
final and shall not be called in question in any court.
(3) The Registrar shall decide the aforesaid question within a period of ninety days
and in case the aforesaid question, as enumerated under sub-section (2) is not
decided within the stipulated period of ninety days, the dispute shall be deemed
to have been admitted under section 70 of this Act and the same shall be
referred for decision under section 71.
(4) (a) Notwithstanding anything contained in the Limitation Act, 1963 (36 of 1963),
but subject to the specific provisions made in this Act, the period of limitation in
the case of a dispute referred to the Registrar under sub-section (1) shall -
(i) when the dispute relates to the recovery of any sum including
interest thereon due to a co-operative society by a member
thereof, be computed from the date on which such member dies
or ceases to be member of the co-operative society, be three
years;
(ii) save as otherwise provided in sub-clause (iii), when the
dispute relates to any act or omission on the part of any of the
parties referred to in clause (b) or clause (c) of sub-section (1),
be six years from the date on which the act or omission with
reference to which the dispute arose or took place;
(iii) when the disputes relates to a co-operative society which has
been ordered to be wound up under section 95 or section 96 or
section 97 or in respect of which an administrator has been
appointed under section 37, be six years from the date of the
order issued under section 95 or section 96 or section 97 or
section 37, as the case may be; and
(iv) when the dispute is in respect of an election of an officer of a
co-operative society be thirty days from the date of the
declaration of the result of the election.
(b) The period of limitation in the case of any other dispute except those
mentioned in the foregoing clause which are required to be referred to the
Registrar shall be regulated by the provisions of the Limitation Act, 1963 (36 of
1963), as if the dispute was a suit and the Registrar a civil court.
(c) Notwithstanding anything contained in clauses (a) and (b), the Registrar may
admit a dispute after the expiry of the period of limitation, if the applicant satisfies
the Registrar that he had sufficient cause for not referring the dispute within such
period and the dispute so admitted shall be a dispute which shall not be barred
on the ground that the period of limitation has expired.
(5) Save as otherwise provided under this Act, the provisions of the Arbitration and
Conciliation Act, 1996 (26 of 1996) shall apply to all arbitrations under this Act, as
if proceedings for arbitration were referred for settlement or decision under the
provisions of the Arbitration and Conciliation Act, 1996.
Reference of disputes to arbitration.
71. (1) The Registrar may, on receipt of the reference of dispute under section 70 –
(a) decide the dispute himself, or
(b) transfer it for disposal to any person who has been invested by the
Government with powers in that behalf, or
(c ) refer it for disposal to an arbitrator.
(2) The method, manner of selection, appointment of arbitrators, their
qualifications, terms and conditions of appointment and fees payable to
them shall be as prescribed under the rules.
(3) (a) For selecting persons for appointment as arbitrators, the Government shall
constitute a selection committee which shall consist of the following, namely :-
(i) Minister in charge of the Department of Co-operative Societies – Chairman
(ii) One elected member of the Delhi Legislative Assembly - Member
(iii) Secretary (Cooperation) to the Government - Member
(iv) Secretary (Law & Justice) to the Government - Member
(v) Registrar, Cooperative Societies - Member
(b) All decisions of the selection committee shall be taken by majority.
(4) The Registrar may withdraw any reference under clause (b) of sub-section (1) or
referred under clause (c) of sub-section (1) and decide it himself or refer the same
to another arbitrator for decision.
(5) The Registrar or any other arbitrator to whom a dispute is referred for decision
under this section may, pending the decision of the dispute, make such
interlocutory orders as he may deem necessary in the interest of justice.
(Substituted vide Notification No. F.14(31)/LA-2004/16 dated 17/01/2005)
Power of financing bank and federal co-operative society to proceed.
72. (1) If a co-operative society is unable to pay its debts to a financing bank or a federal
co-operative society by reason of its members committing default in the payment
of the moneys due by them, the financing bank or the federal co-operative
society as the case may be, may direct the committee of such a co-operative
society to proceed against such members under section 71 and if the committee
fails to do so within a period of ninety days from the date of receipt of such
direction, the financing bank or the federal co-operative society itself may
proceed against such members in which case the provisions of this Act, the rules
or the bye-laws shall apply as if all references to the co-operative society or its
committee in the said provisions were references to the financing bank or the
federal co-operative society.
(2) Where a financing bank or federal co-operative society has obtained a decree
or award against a co-operative society in respect of moneys due to it from the
co-operative society, the financing bank or the federal co-operative society may
proceed to recover such moneys firstly, from the assets of the co-operative
society and secondly, from the members to the extent of their debts due to the
co-operative society.
CHAPTER - IX
SPECIAL PROVISIONS FOR CO-OPERATIVE HOUSING SOCIETIES
Application of this chapter.
73. This Chapter ll apply to -
(a) all co-operative housing societies including housing finance
society registered or deemed to be registered at the
commencement of this Act;
(b) all co-operative housing societies including housing finance
society registered or deemed to be registered under this Act.
Definitions.
74. In this Chapter, unless the context otherwise require-
(a) "allottee" means a member of a co-operative housing society to
whom a plot of land or a site, or a flat in a building or complex
held by it, is allotted by the co-operative society;
(b) "apex" means the Delhi Co-operative Housing Finance
Corporation Ltd; a co-operative society registered to provide long
term finances for construction, development of infrastructure,
bridge loan for land etc., against certain securities or sureties for
construction, purchase of land, etc.;
(c) "building fund" means a fund created by the collection of
contributions from members for -
(i) the purchase and or acquisition of land; or
(ii) the land development; or
(iii) the construction of dwelling units in a complex or
buildings; or
(iv) for the purpose of providing any other common
amenities to achieve the objectives of the co-
operative housing society;
(d) "building maintenance fund" means a fund created by collection
of the contribution from its members at such rate as may be
determined by the general body meeting of the members
annually as a part of budget provision for carrying out repairs or
structural additions, improvements or alterations to the property
of the co-operative housing society which is likely to increase the
life of such property and to maintain the property of the said
society in good and habitable conditions at all times;
(e) "co-operative housing society" means a co-operative society -
(i) registered or deemed to be registered as a co-operative
housing society under this Act;
(ii) the principal object of which is to provide its members open
plots under plot housing, dwelling units or flats (whether in a
multi-storeyed building or otherwise) in a complex under group
housing and in case where open plots or dwelling units or flats
are already acquired to provide its members common amenities
and services including services relating to the arrangement of
finances for facilitating construction of dwelling units in order to
solve their needs of dwelling units through mutual-aid in
accordance with the co-operative principles, and includes a
house building, co-partnership, co-ownership housing society,
co-operative housing maintenance society, multipurpose co-
operative housing society and any other co-operative society of
like nature and purpose;
(iii) "co-operative housing maintenance society" means a co-
operative society formed by the owners of dwelling units in a
building for the purpose of maintenance of the building and
provisions of common amenities, services, etc;
(iv) "co-ownership co-operative housing society" means a co-
operative society known as "house building" or plotted society in
which the land is held either on lease-hold or free-hold basis by
the co-operative society and the houses constructed on it are
owned or to be owned by its members;
(v) "co-partnership co-operative housing society" known as
group housing means a co-operative society in which land and
buildings are held by the co-operative society on lease-hold or
free hold basis and members are allotted flats or such other
premises in such buildings with a right to occupy the same in
accordance with terms of lease, Government's guidelines and
the bye-laws of such group housing;
(vi) "multi-purpose co-operative housing society" means a
society formed with the object of undertaking multifarious
activities for the economic and social development of its
members, particularly of slum dwellers and economically weaker
sections of the people, in addition to providing better housing
accommodation and better environment to improve their quality
of life;
(f) "dwelling unit" includes a house, flat and apartment for the purpose of dwelling;
(g) "external repairs" means all structural repairs and repairs required to be carried
out to the property of the co-operative society the use of which is common to two
or more members, and includes repairs of common walls, external walls, roads,
lifts, water tanks, electric pumps, staircases, terraces and parapet walls, roofs of
flats, street lights, electric lines, all leakages of water, water pipelines, compound
walls, septic tanks, fencing, drainage, gates and other like common amenities;
(h) "internal repairs" means such repairs as are not external repairs;
(i) "maintenance fund" means periodical payments which are made by the members
or occupants of house or flat to meet the expenditure incurred by a housing co-
operative society towards providing of cleanliness, watch and ward, landscape,
water supply, lifts, maintenance services for sanitary, electric fittings, drains, fire
fighting system, generation sets, intercom systems, etc. within the complex fixed
annually by the general body meeting of the members as a budget provision;
(j) "National Housing Bank" means the National Housing Bank established under the
National Housing Bank Act, 1987 (53 of 1987);
(k) "occupancy right" means the right of an allottee to possess and use the plot of
land, site or dwelling unit or flat allotted to him with power to give it on hire or on
lease and licence or to mortgage it or to donate or to gift or to transmit it by will or
by inheritance or to transfer it after paying the transfer fee;
(l) "outgoings" means ground rent, if any, municipal and other local taxes, cesses,
charges, water charges, electricity charges, revenue assessments, expenses of
management and maintenance, repairs to or replacement of any property,
insurance premium, other like expenses in respect of the co-operative housing
society on recurring or non-recurring basis;
(m) "sub-allottee" means an individual or body of persons, whether incorporated or
not, in whose favour the possession of the dwelling unit or part thereof is
transferred for a period of not less than ninety days, and includes a tenant,
licensee, paying guest and caretaker thereof;
(n) "transfer fee" means fee payable to transfer the membership of a member to
another person in a co-operative housing society as provided in section 91;
(o) words and expressions defined in this Act and used, but not defined, in this
Chapter, shall have the same meanings, assigned to them in this Act.
Limit on membership.
75. A co-operative housing society shall not admit to its membership persons exceeding
the number of dwelling units or plots as the case may be, available for allotment
in that co-operative housing society.
* Provided that a cooperative house building society may admit to its membership
more than the plots allotted in case the plot owner has constructed and sold
floors, by charging transfer fee of five thousand rupees and share money and
admission fee as per provisions of the by-laws of the society and in that case the
committee shall grant membership within a period of thirty days after the
submission of application for grant of membership by such applicant and in case
of refusal by the committee, the applicant may appeal to the Registrar within
thirty days of the refusal by the committee and the decision of the Registrar in
such appeal shall be final.
Rights and privileges of members on allotment of plot or dwelling unit in a co-operative
housing society.
76. (1) Every member of a co-operative housing society, whether registered before or
after the commencement of this Act, to whom plots of land or dwelling units have
been allotted, shall be issued certificate of allotment by the co-operative housing
society under its seal and signature in such form as may be prescribed.
(2) Notwithstanding anything contained in the Transfer of Property Act, 1882 (4 of
1882), or the Registration Act, 1908 (16 of 1908), any allotment (including re-
allotment) of a plot of land or dwelling unit in a building of a co-operative housing
society to its member as per terms of allotment shall entitle such member to hold
such plot of land or dwelling unit with such title or interest.
(3) A member of a co-operative housing society shall not be entitled to any title or
interest in any plot of land or dwelling unit in a building of the co-operative society
until he has made such payment as may be specified by the co-operative
housing society towards the cost of such plot of land or construction of such
dwelling unit, as the case may be, to the co-operative housing society.
(4) The right, title and interest in a plot of land or dwelling unit in a building of the
co-operative housing society (including the undivided interest in common areas
and facilities) shall constitute a heritable and transferable immovable property
within the meaning of any law for the time being in force :
Provided that notwithstanding anything contained in any other law for the time
being in force, such land or building shall not be partitioned for any purpose
whatsoever.
(5) Every member of a co-operative housing society shall be entitled to an
undivided interest in the common areas and facilities pertaining to the plot of land
or dwelling unit allotted to him, which shall be described in the certificate of
allotment as provided in sub-section (1).
(6) Every member of a co-operative housing society in whose favour a plot of
land or a dwelling unit has been allotted shall have the right to use the common
areas and facilities as prescribed by the co-operative housing society and in case
of any violation by a member, the committee shall be competent to recover it at
the cost of the encroacher which also be applicable with regard to the common
areas under the control of the co-operative housing society.
(7) The work relating to the maintenance, repair and replacement of the common
areas and facilities (including additions or improvements thereto) shall be carried
out in accordance with the building rules of the concerned civic authorities, or
other competent authority, as the case may be, and the costs thereof shall be
apportioned amongst the members of the co-operative housing society in such
manner as may be determined and notified by the committee from time to time.
Allotment of plots, flats or houses through draw of lots.
77. (1) Allotment of plots of land, flats, houses or other dwelling units shall be made by
the committee of a co-operative housing society to the members strictly on the
basis of draw of lots only in respect of such members whose enrolment as a
member of a co-operative housing society is found proper in accordance with the
provisions of this Act, rules framed thereunder and the bye-laws of the co-
operative housing society * by the Registrar with the prior approval of a
committee as prescribed and such a draw of lot shall be conducted by the lessor
of the land in accordance with the terms and conditions of lease.
(2) If any draw of lot is held in violation of the above provisions it shall be void
and any financial loss on account of this shall be recovered as arrears of land
revenue from persons who were responsible for it and such persons shall be
debarred from holding any office in the co-operative housing society in future.
(3) Every member of a co-operative housing society, whether registered before
or after the commencement of this Act, to whom plots of lands, flats, houses or
other dwelling units have been allotted, shall be issued certificate of occupancy
by the co-operative housing society under its seal and signature in such form, on
such terms and on such conditions as may be prescribed and such certificate
shall be issued forthwith when all the dues as may be determined and notified by
the co-operative housing society are duly paid by the member.
Provision for nomination.
78. (1) Every member of a co-operative housing society shall nominate a person or
persons to whom in the event of his death his right and interest in such co-
operative housing society shall be transferred.
(2) The member of the co-operative housing society shall have right to change
the nomination at any time.
(3) There shall not be more than one nomination subsisting at any time:
Provided that joint and more than one nomination within the blood relation shall
be permissible.
Restriction on transfer of share or interest of a member.
79. Subject to the provisions of this Act, in the case of a co-operative housing society, no
transfer of share or interest of a member or the occupancy right, except the
transfer to his heir or a nominee, shall be effective, unless -
(a) the previous permission of the co-operative housing society has been
obtained * by the transferor;
(b) the dues of the co-operative housing society are paid or transferred to the
transferee with the consent of the co-operative housing society;
(c) the transferor vacates and gives possession of the premises to the transferee;
and
(d) the transferee applies and acquires membership of the co-operative society :
Provided that the transfer of share or interest in respect of lease hold properties
shall be governed by the terms of the lease.
Permission for transfer of occupancy right not to be ordinarily refused and provision for
appeal.
80. (1) No co-operative housing society shall ordinarily refuse to grant to its member
permission for transfer of his occupancy right in the property of the co-operative
housing society unless the transferee is otherwise not qualified to be a member :
Provided that nothing contained in any agreement, contract or the bye-laws
regarding eligibility for membership stipulated therein shall apply to a nominee,
heir or legal representative of the deceased member for his admission to
membership of the co-operative housing society :
Provided further that aforesaid transfer in case of lease hold land shall be
governed by the provisions of the perpetual lease of land.
(2) The decision of the co-operative housing society on an application for
permission to such transfer shall be communicated to the applicant within thirty
days from the date of receipt of the application.
(3) Any person aggrieved by the decision of the co-operative housing society
refusing permission for such transfer may within thirty days from the date on
which the refusal of permission is communicated to him appeal to the Registrar.
(4) The Registrar shall dispose of the appeal within a period of one hundred and
twenty five days whose decision shall be final.
Creation, maintenance and utilisation of building and replacement fund.
81. (1) A co-operative housing society which owns land or building shall maintain
a corpus of building maintenance fund by collecting money from its members as
their contribution to the extent and in the manner as may be fixed annually by the
general body meeting.
(2) The building maintenance fund shall be utilised only for the purposes of
repairs and maintenance of the building and for carrying out such structural
additions and alterations to the building which are essential for the safety of the
building and to increase its life.
(3) The building maintenance fund of the co-operative housing society, when not
required by it for its immediate use, shall be invested with the apex or financing
bank.
(4) A corpus for replacement fund shall be created annually through a budget
provision duly approved by the general body of members of the society and shall
be utilized only for replacement of building in course of time.
Registration of mortgage in favour of co-operative housing society or apex.
82. Notwithstanding anything contained in the Registration Act, 1908 (16 of
1908), it shall not be necessary to register mortgages, executed in favour of co-
operative housing society or apex provided that the co-operative housing society
or apex sends, within a period of sixty days, a copy of the instrument whereby
the property is mortgaged or a written declaration creating a charge on such
property in the prescribed form and manner to the registering officer within whose
jurisdiction the whole or part of the mortgaged property is situated and such
registering officer shall file a copy or copies thereof, as the case may be, in Book
No.1 prescribed under section 51 of the Registration Act, 1908 (16 of 1908).
Settlement of disputes.
83. (1) Notwithstanding anything contained in any law relating to rents or any
other corresponding law for the time being in force in Delhi, any dispute relating
to the occupation or recovery of possession of any plot, dwelling unit or flat in any
co-operative housing society, the recovery of dues payable by a member or sub-
allottee to a co-operative housing society or vice-versa arising on or after the
date of the commencement of this Act and suits or proceedings pending in any
court after such commencement, shall be deemed to be a dispute within the
meaning of section 70 of this Act and shall be decided in accordance with the
provisions of this Act, and no court or other tribunal or authority shall have
jurisdiction to entertain and decide any proceedings in respect of such disputes.
(2) Notwithstanding anything contained in the law relating to rents or any other
corresponding law for the time being in force, no licensee, caretaker, or sub-
allottee who is occupying the dwelling unit or flat, or plot of land in a co-operative
housing society shall be a tenant of such dwelling unit or flat or plot of land within
the meaning of that law.
(3) Where any property mortgaged to the co-operative housing society including
the apex, as the case may be, is wholly or partially destroyed or for any reasons
the security is rendered insufficient and the mortgagor having been given
reasonable opportunity to repay such portion of loan as may be determined by
the co-operative housing society or the apex, as the case may be, has failed to
provide such security or to such portion of loans, the whole of the loan shall be
deemed to fall due at once notwithstanding the original terms on which the loan
was advanced, and the co-operative housing society or the apex, as the case
may be, shall be entitled to take action against the mortgagor for the recovery
thereof.
(4) All loans granted by the co-operative housing society or the apex, as the case
may be, and all interests chargeable thereon and costs incurred in making the
same, shall be recoverable when they become due by the co-operative housing
society or the apex, as the case may be.
(5) If any installment payable under the mortgage executed in favour of the co-
operative housing society or the apex, as the case may be, or any financial
institution which the National Housing Bank, having regard to the objects of this
Chapter, has recognised for the purposes of this section, being a financial
institution whose main object is to provide housing finance and any part of such
installment has remained unpaid for more than ninety days from the date on
which it falls due, the co-operative housing society or the apex or the said
financial institution may, in addition to any other remedy available to it, apply to
the Registrar for the recovery of such installments or part thereof as arrears of
land revenue, who will complete the enquiry to satisfy himself about the request
within a period of thirty days from the date of receipt of such application and shall
either issue a certificate for recovery as arrears of land revenue or reject it after
giving grounds for doing so within the said period of thirty days.
(6) On the issuance of letter for execution of award, the right of the original
allottee member shall be suspended subject to the mortgage interest of the
mortgage and in case the property has been transferred through the instrument
of power of attorney and agreement for sale, the occupant as power of attorney
holder or purchaser of agreement for sale shall be deemed as trespasser.
(7) The committee shall give sixty days time to such a person to vacate the
premises failing which the committee shall take appropriate legal recourse for
implementation of the decision of the committee.
Recovery of outgoings and arrears of dues as arrears of land revenue.
84. (1) Notwithstanding anything contained in this Act, on an application made by
a co-operative housing society or the apex for the recovery of its outgoings and
of arrears of its dues of such sums advanced by it to any of its members, on its
furnishing statement of the accounts in respect of arrears, the Registrar may,
after making such inquiries as he deems fit, grant a certificate for the recovery of
the amount stated therein to be due as arrears and such an enquiry shall be
completed by the Registrar within thirty days.
(2) Where the Registrar is satisfied that the concerned co-operative housing
society has failed to take action under sub-section (1) in respect of any amount
due as arrears and outgoings, the Registrar may of his own motion, after making
such an enquiry as he deems fit, grant a certificate for the recovery of the amount
stated therein to be due as arrears and such a certificate shall be deemed to
have been issued as if issued on an application made by the co-operative
housing society or the apex concerned.
(3) A certificate granted by the Registrar under sub-section (1) or sub-section (2)
shall be final and a conclusive proof of the arrears stated to be due therein and
the same shall be recoverable according to the law for the time being in force for
the recovery of arrears of land revenue.
(4) It shall be lawful for the Collector and the Registrar to take precautionary
measures authorised by law until the arrears due to the co-operative housing
society or the apex, as the case may be, together with interest and any incidental
charges incurred in the recovery of such arrears are paid or security of such
arrears is furnished to the satisfaction of the Registrar.
(5) It shall be competent for the Registrar or a person authorised by him to direct
conditional attachment of the property of the mortgagor until the arrears due to
the co-operative housing society or the apex, as the case may be, together with
interest and any incidental charges incurred in the recovery of such arrears are
paid or security for payment of such arrears is furnished to the satisfaction of the
Registrar or the person authorised by him.
Recovery of dues and foreclosure.
85. (1) Where a co-operative housing society has raised loan from the apex or
any other approved housing finance institution against the security of land and
building and the possession of such building has been handed over to the loanee
members, if any member fails to repay the loan installment for a continuous
period of sixty days after the installment has become due, the co-operative
housing society shall issue a notice for repayment of the defaulted amount along
with the balance outstanding as recall of loan.
(2) If the member fails to repay the recalled amount of loan together with the
interest, if any, within thirty days, the committee shall refer the case to the
Registrar who may make further enquiries as deem fit and issue a notice to the
defaulter member providing him an opportunity to pay the defaulted amount
within such time as he may deem fit subject to a maximum of ninety days and
pass orders to that effect and in case the defaulter member still persists in
default, the Registrar may issue a recovery certificate for the recovery of
defaulted amount along with interest and cost, if any, as arrears of land revenue :
Provided that the apex or the financing institution may directly approach the
Registrar for initiating proceedings against the defaulter member as above, in
case the committee fails to initiate action against the defaulter member within
thirty days.
Expulsion of a member.
86. (1) Notwithstanding anything contained in this Act and the rules framed
thereunder, the committee of a co-operative housing society may, by a
resolution, expel a member on any one or more of the following grounds, namely
-
(a) if he has been a persistent defaulter in respect of any dues of
the co-operative housing society; or
(b) if he has willfully deceived the co-operative housing society
by making any false statement or submitting any false document
to obtain the membership of such co-operative society; or
(c) if he has brought disrepute to the co-operative society or has
done any other act detrimental to the interest and proper working
of the co-operative society :
Provided that no such resolution shall be passed unless the member concerned
has been given an opportunity of being heard after service of three registered
notices confronting the member with the grounds for his proposed expulsion :
Provided further that no member shall be expelled unless a resolution to that
effect is passed by not less than three-fourths of the members of the committee
present and entitled to vote at the meeting and no resolution for expulsion shall
be valid unless approved by the Registrar.
(2) After the resolution for expulsion is passed as above by the committee, the
resolution shall be referred to the Registrar for approval within a period of thirty
days.
(3) On the receipt of the resolution for expulsion, the Registrar shall take
cognizance of such resolution within thirty days and pass a final order either
approving the expulsion or rejecting the proposal for expulsion within a period of
one hundred and eighty days and if the matter is not decided by the Registrar
within the aforesaid period, the expulsion of such a member shall be deemed to
have been approved :
Provided that the Registrar, before approving the resolution, shall hear the
parties concerned in the manner prescribed and shall have power to summon
and enforce attendance of witnesses including the parties interested or any of
them and compel them to give evidence on oath, affirmation or affidavit and to
compel production of documents by the same means and as far as possible in
the same manner as provided in the case of a civil court under the Code of Civil
Procedure, 1908 (5 of 1908) and the order under this section so passed by the
Registrar, shall be final with a right for appeal before the Tribunal.
(4) Any party aggrieved by the order of the Registrar or deemed approval of
expulsion, as the case may be, under sub-section (3) may, within sixty days from
the date of such order, appeal to the Tribunal.
Additional grounds for Cessation of membership of co-operative housing society.
87. Subject to the provision of this Act, in the case of a cooperative housing society, a
person shall also cease to be a member of a cooperative society -
(a) on disposing of the property through instrument of power of
attorney and agreement for sale subject to the interest of the
mortgagee if there is any loan on the property; or
(b) if he -
(i) before becoming a member of a cooperative housing
society, already owns, either in his own name or in the
name of his spouse or any of his dependent children;
(ii) after becoming a member in a cooperative housing
society, during the currency of such membership, till
allotment of any plot or flat to him, as the case may be,
acquires either in his own name or in the name of his
spouse or any of his dependent children; a residential
property exceeding 66.72 sq. meters in area, in any of
the approved or unapproved colonies or other localities
in Delhi either on lease-hold basis or free-hold basis or
on power of attorney or on agreement for sale basis :
Provided that no person having residential property under this
section in the village abadi area in Delhi shall be disqualified :
Provided further that no such disqualification shall be applicable
in the case of a person who has acquired property on power of
attorney or through agreement for sale and on conversion of the
property from leasehold to freehold on execution of conveyance
deed for it, if such person applies for the membership of the
cooperative housing society concerned :
Provided also that no member shall earn disqualification in
clause (b) above, if the residential property devolves on him by
way of inheritance.
Management of co-operative housing societies.
88. The management of every co-operative housing society shall vest in its
committee.
Maintenance of essential services in co-operative housing societies.
89. (1) Every co-operative housing society shall frame regulations from time to
time with the approval of the general body meeting of the co-operative housing
society for maintenance of essential services including mandatory green area in
the co-operative housing society which shall contain details of services to be
provided and service charges to be recovered for such services from the
members and residents of its housing complex.
(2) If any member or resident fails to make payment of such services for thirty
days after raising of the demand by the committee such member or resident, as
the case may be, will be asked to clear default within thirty days and in case of
default by the member, the committee may institute proceedings for recovery of
the dues in accordance with the provisions of this Act as arrears of land revenue.
Co-operative housing society to maintain register of its properties with prescribed
details.
90. Every co-operative housing society shall maintain register of its properties in such
form as may be prescribed.
Special provision for regularisation of occupancy right of persons who have
acquired such a right through the instrument of power of attorney or agreement for
sale.
91. A member of a housing society who has sold his plot or flat on the power of attorney
or agreement for sale or by sale deed, shall cease to be a member of that society
from the date of the sale of plot or flat:
Provided that the purchaser having registered power of attorney or registered
agreement for sale or registered sale deed, as the case may be, in respect of such
plot or flat, may apply for membership by paying transfer fee of five hundred rupees
and share money and admission fee as per the provisions of the bye-laws of the
society and the committee shall grant membership to the applicant within thirty days
after the submission of his application. In case of refusal by the committee, the
applicant may appeal to the Registrar within thirty days and the decision of the
Registrar shall be final:
Provided further that no purchaser shall be entitled for more than one membership in
a housing society
Execution of housing project.
92. (1) On allotment of land to, and possession thereof by the co-operative housing
society, the committee shall appoint the architect and the contractor with a
provision that construction shall be completed as per time limit fixed for
completion of construction of the housing project of the society in the sanction
letter conveying approval of layout and building plans by the sanctioning authority
under the applicable building bye-laws or within five years from the date of
sanction of layout and building plans by the competent civic authority, whichever
is earlier, with the prior approval of the general body:
Provided that if due to unforeseen circumstances, the aforesaid time limit cannot
be adhered, the committee shall approach the Government for further extension
of time to complete the project with the approval of its general body at least one
hundred and eighty days in advance and failure to adhere to the above time limit
by the committee shall be an offence.
(2) After the appointment of the architect and the contractor the committee shall
finalise the likely cost, the time for the execution of the project, the size, category
and design of the flats with a five years defect liability provision to attend defects
in the construction by the concerned contractor and all incidental matters thereto
and get the approval of the general body.
(3) During the construction period, there shall be, at least, two special general
body meetings every year besides one annual general body meeting to give
progress report to the members.
(4) No escalation in cost of the project, and the time fixed for the execution
thereof shall be extended by the committee without the prior approval of the
general body.
(5) There will not be unilateral change of category or size of flat by the committee
without giving an opportunity to the concerned member of hearing after
communicating to him the grounds for change of category or size and preference
shall be given to the existing members in case of any vacancy falling in the
higher category.
(6) All proposals as above, shall be approved by the general body in a meeting
by a majority of not less then two-thirds the * members present in the meeting.
(7) It shall be the responsibility of the committee to ensure quality and structure
stability of the project and the availability of all facilities including electricity,
water, lifts, sewage, roads, mandatory green and landscape, etc. before
allotment.
(8) The Registrar may issue directions and guidelines from time to time in public
interest for timely execution of the project.
Management of co-operative housing complex by co-operative societies.
93. (1) The management of co-operative housing complex shall be entrusted to the
committee which will ensure cleanliness, security, upkeep of common areas,
services, landscape and exterior of the building, prepare a budget for annual
maintenance charges which shall be got approved annually from the general
body and it shall be the responsibility of the member or occupant, as the case
may be, to make payment of maintenance charges to the committee.
(2) If any defects occur in the flats and any repairs are required after allotment,
the committee shall have the right to get such defects rectified or repairs carried
out at the cost of the member or members concerned in whose flats such defects
need rectification or need repairs and if the member or members concerned fail
to make payment to the committee for getting such repairs carried out upon
being given proper notice, the committee shall recover the above dues as arrears
of land revenue by making a reference to appropriate authority under section
111.
(3) A member who wants to carry out internal repairs may apply to the committee
for necessary permission and if no structural changes are involved and the
proposed repairs are not likely to cause any defect in the flat of any other
member, the committee may grant permission to the concerned member to carry
out the internal repairs.
(4) In case any defect occurs in the flat of any other member or members on
account of internal repairs in his flat by a member, the member or members
concerned shall be compensated by the member who has carried out repairs and
in case the member concerned does not pay the necessary compensation after
service of notice, the committee shall recover the same as arrears of land
revenue by making reference to appropriate authority under section 111 and after
such recovery to make payment to the affected member.
(5) All the flats besides other assets of the co-operative housing society shall
have to be insured for all risks including earthquake annually on reinstatement
basis against the value of the inflation for the same type of buildings.
House building co-operative societies which have achieved their objectives.
94. In case of a house building co-operative society where all plots have been allotted to
its members and basic civic services have been transferred to the local civic
body, the Registrar shall, after giving sixty days' notice to the committee, initiate
winding up proceedings and such co-operative house building society shall be
wound up :
Provided that in the case of a co-operative house building society where land
has been allotted on perpetual lease, before passing winding up orders the prior
consent of the lessor shall be obtained.
Provided further that where a house building co-operative society has
been provided land to run a club, school, community centre, dispensary
or community facility, etc., by the lessor, the above provision shall not
apply to such a co-operative house building society, if the general body
decides to run these activities for the benefit of the members and the
residents. (Added vide Notification No. F.14(31)/LA-2004/16 dated 17/01/2005)
CHAPTER - X
WINDING UP OF CO-OPERATIVE SOCIETIES
Dissolution of co-operative society by members.
95. (1) A co-operative society may by special resolution, authorise its own
dissolution, a notice of the general body meeting called for the purpose shall also
be sent by registered post with an invitation to attend, to the Registrar, to
creditors, if any, to any co-operative society to which the co-operative society is
affiliated, and to any co-operative society with which a partnership contract has
been entered into.
(2) The invitee under sub-section (1) shall have the right only to make a
presentation to the general body, if he wishes to do so, on the issue of the
proposed dissolution.
(3) Within fifteen days of such authorisation for dissolution, the co-operative
society shall send to the Registrar a copy by registered post of the authorisation
to dissolve the co-operative society.
(4) The authorisation approved under sub-section (1) shall set out -
(a) the assets and liabilities of the co-operative society;
(b) the claims of creditors;
(c) the number of members;
(d) the nature and extent of the members interest in the co-
operative society; and
(e) the name and address of the liquidator appointed by the co-
operative society.
(5) When the Registrar receives the special resolution passed under sub-section
(1) -
(a) where he is satisfied that the co-operative society has no
assets or liabilities, he shall dissolve the co-operative society,
delete its name from the register of co-operative societies and
issue a certificate of dissolution of such co-operative society; or
(b) he shall, within thirty days of the date of receipt of such
resolution, cause at the expense of the co-operative society a
notice of the special resolution to be published in the official
Gazette and in a newspaper in Hindi and English.
(6) In the case of dissolution, the Registrar may require, till the certificate of
dissolution is issued by him, from the liquidator appointed by the co-operative
society or from any other person who is required to furnish information, a
periodical return showing -
(a) the progress of dissolution;
(b) the distribution of any undistributed surplus or reserve; and
(c) any other relevant information.
Dissolution of co-operative society by the Registrar.
96. (1) Where the Registrar has reason to believe that a co-operative society -
(a) has not commenced business within seven hundred seventy five days after
the date shown on its certificate of registration; or
(b) has not carried on business for two consecutive co-operative years; he shall
send to the co-operative society a letter by registered post, inquiring whether
the co-operative society is carrying on business.
(c) has not got the accounts of the society audited since last three or more
consecutive years;
* he shall send to the co-operative society a letter by registered post, inquiring
whether the co-operative society is carrying on business or got its accounts
audited.
(2) Where the Registrar -
(i) does not, within thirty days of the date of sending a letter under sub-section
(1) , receive a reply to the letter, he shall, within fifteen days after the expiry
of said thirty days, send to the co-operative society a letter stating that -
(a) a letter was sent to the co-operative society under sub-
section (1);
(b) no reply to the letter has been received by him within thirty
days from the date of sending it.
(ii) receives a reply from the co-operative society that it is not carrying on
business; or got its accounts audited or
(iii) does not , within thirty days from the date he sent a letter under sub-section
(i) receive a reply to that letter; he shall publish the notice in the newspaper
and send to the co-operative society a notice that, at the expiry of thirty days
from the date of the notice, the co-operative society shall, unless cause is
shown to the contrary, be dissolved and have its name deleted from the
register of co-operative societies.
(3) On the expiry of thirty days from the date of issue of the letter under sub-
section (2), the Registrar shall, unless cause to the contrary is previously
shown by the co-operative society -
(a) where he is satisfied that the co-operative society has no
assets or liabilities, dissolve the co-operative society, delete
its name from the register of co-operative societies and issue
a certificate of dissolution of such co-operative society; or
(b) appoint a liquidator under section 99 to wind up the affairs of
the co-operative society.
(4) Where a co-operative society fails to file returns and furnish information, as
required by section 32, the Registrar shall send a requisition under sub-
section (1) of section 33 to the committee to call a special general body
meeting for the purpose of considering the annual returns to be filed with,
and the information to be furnished to the Registrar.
(5) Where the committee fails to call a special general meeting within the period
specified in sub-section (1) of section 33 the Registrar may at the cost of the
co-operative society call the special general body meeting notwithstanding
anything contained in this Act -
(a) to review the affairs of the co-operative society; and
(b) to ascertain whether the general body desires to continue the
co-operative society.
(6) Where -
(a) a quorum of members is not present at the special general
body meeting called under sub-section (4) or sub-section (5); or
(b) the general body meeting fails to pass a resolution to the
effect that -
(i) the co-operative society is to carry on business;
(ii) the committee shall present, within sixty days from the
date of special general body meeting to the general body the
annual returns to be filed with, and the information to be
furnished to, the Registrar; and
(iii) the co-operative society shall file the returns with, and
furnish the information to, the Registrar within ninety days
from the date of special general body meeting; or
(c) if the co-operative society fails to file the returns with, and furnish
the information to, the Registrar within ninety days from the date of
the special general body meeting; the Registrar shall -
(i) if he is satisfied that the co-operative society has no
assets or liabilities, dissolve the co-operative society, delete
its name from the register of co-operative societies and issue
a certificate of dissolution of such co-operative society; or
(ii) appoint a liquidator under section 99 to wind up the
affairs of the co-operative society.
Winding up of co-operative banks at the direction of the Reserve Bank.
97. Notwithstanding anything to the contrary contained in this Act, the Registrar
shall make an order for winding up or an order sanctioning scheme of
compromise or arrangement or of amalgamation or reconstruction of a co-
operative bank, if so required by the Reserve Bank. (Substituted vide Notification
No. F.14(31)/LA-2004/16 dated 17/01/2005)
Reimburse-ment to the Deposit Insurance Corporation by the liquidator.
98. Where a co-operative bank being an insured bank within the meaning of the
Deposit Insurance and Credit Guarantee Corporation Act, 1961 (47 of 1961) is
wound up, or taken into liquidation, and the Deposit Insurance Corporation has
become liable to the depositors of the insured bank under sub-section (1) of
section 16 of that Act, the Deposit Insurance Corporation shall be reimbursed by
the liquidator or such other person in the circumstances to the extent and in the
manner provided in section 21 of the Deposit Insurance and Credit Guarantee
Corporation Act, 1961 (47 of 1961).
Appointment of liquidator.
99. (1) Where the Registrar has made an order under section 96 for the winding
up of a co-operative society, the Registrar may appoint a liquidator for the
purpose and fix his remuneration.
(2) Where a co-operative society is to be dissolved and no liquidator is appointed
by the general body meeting, the Registrar shall appoint any person as a
liquidator to wind up the affairs of the co-operative society.
Duties of liquidator.
100. A liquidator on his appointment shall -
(a) immediately give notice of his appointment -
(i) in the case of a liquidator not appointed by the Registrar, to
the Registrar; and
(ii) to each claimant and creditor known to the liquidator;
(b) immediately publish notice of his appointment in the official Gazette and in a
newspaper in Hindi and English and take reasonable steps to give notice of the
liquidation in every jurisdiction where the co-operative society carries on
business;
(c) include in the notice mentioned in clauses (a) and (b) a provision requiring
any person -
(i) indebted to the co-operative society to render an account and
pay to the liquidator at the time and place specified in the notice
any amount owing;
(ii) possessing property of the co-operative society to deliver it to
the liquidator at the time and place specified in the notice; and
(iii) having a claim against the co-operative society, whether
liquidated, unliquidated, future or contingent, to present
particulars of the claim in writing to the liquidator at the time and
place specified in the notice within the period specified in such
notice which shall not exceed sixty days from the date of first
publication of the notice.
(d) take into his custody and under his control all the property and actionable
claims to which the co-operative society is or appears to be entitled and shall
take such steps as he may deem necessary or expedient to prevent loss or
deterioration of or damage to such property, effects and claims;
(e) open and maintain a trust account for the moneys of the co-operative society;
(f) keep accounts of the moneys of the co-operative society received and paid
out by him;
(g) maintain separate lists of the members, creditors and other persons having
claims against the co-operative society;
(h) where at any time he determines that the co-operative society is unable to
pay or adequately provide for the discharge of its obligations, apply to the
Registrar or general body, as the case may be, for directions; and
(i) deliver to the Registrar or general body, as the case may be, periodically as
the Registrar or general body may require, financial statements of the co-
operative society in such form the liquidator considers proper or that the
Registrar or general body may require.
Powers of liquidator.
101. (1) The whole of the assets of a co-operative society in respect of which an
order for winding up has been made shall vest in the liquidator appointed under
section 99 from the date the order takes effect.
(2) The liquidator may -
(a) retain lawyers, accountants, engineers, appraisers and other
professional advisors;
(b) institute and defend suits and other legal proceedings on
behalf of the co-operative society by the name of his office;
(c) carry on the business of the co-operative society so far as
may be necessary for the beneficial winding up of the same;
(d) sell by public auction or private sale any property of the co-
operative society;
(e) do all acts and execute any documents in the name and on
behalf of the co-operative society;
(f) borrow money on the security of the property of the co-
operative society;
(g) settle or compromise any claims by or against the co-
operative society; and
(h) do all other things that he considers necessary for the
liquidation of the co-operative society and distribution of its
property.
(3) Where a liquidator has reasons to believe that any person has in his
possession or under his control, or has concealed, withheld or misappropriated
any property of the co-operative society, he may apply to the Metropolitan
Magistrate for an order requiring that person to appear before the court at the
time and place designated in the order and to be examined.
(4) Where the examination under sub-section (3) discloses that a person has
concealed, withheld or misappropriated property of the co-operative society or
has in possession or under his control the property of the co-operative society,
the Metropolitan Magistrate may order that person to restore the property or pay
compensation to the liquidator on behalf of the co-operative society.
(5) No liquidator shall purchase, directly or indirectly, any part of the stock-in-
trade, debts or assets of the co-operative society.
(6) Where an order of winding up of co-operative society is set aside in appeal,
the property, effects and actionable claims of the co-operative society shall
revest in the co-operative society.
Disposal of surplus assets of liquidated co-operative societies.
102. After all the liabilities including the paid up share capital of a wound up co-
operative society have been met, the surplus assets shall not be divided among
its members but they shall be applied to any object described in the rules and
when no object is so described, to any object of public utility determined by the
general body meeting.
Final accounts.
103. (1) A liquidator shall pay the costs of liquidation out of the property of the co-
operative society and shall pay or make adequate provision for all claims against
the co-operative society.
(2) Subject to the provisions of section 102 after paying or making adequate
provision for all claims against the co-operative society, the liquidator shall apply
to the Registrar for approval of his final accounts and for permission to distribute
in cash or in kind, the remaining property of the co-operative society in
accordance with the rules.
(3) Where the Registrar approves the final accounts rendered by a liquidator
under sub-section (2), he shall -
(i) issue directions with respect to the custody or disposal of the
documents and records of the co-operative society; and
(ii) discharge the liquidator.
(4) Where the Registrar discharges a liquidator under sub-section (3) the
Registrar shall dissolve the co-operative society, issue a certificate of dissolution
and delete its name from the register of co-operative societies.
(5) The co-operative society ceases to exist on the date shown in the certificate
of dissolution, which shall not be later than seven hundred and thirty days after
the appointment of the liquidator.
(6) An order passed under sub-section (1) shall be communicated by registered
post to the president of the co-operative society and to the financing bank or
federal co-operative society to which co-operative society if indebted, if any, of
which the co-operative society was a member.
CHAPTER - XI
EXECUTION OF AWARDS, DECREES, ORDERS AND DECISIONS
Enforcement of charge.
104. Notwithstanding anything contained in Chapter VIII or any other law for the time
being in force, but without prejudice to any other mode of recovery provided in this
Act, the Registrar or any person subordinate to him empowered by the Registrar in
this behalf may on the application of a co-operative society, make an order
directing the payment of any debt or outstanding demand due to the co-operative
society by any member or past or deceased member, by sale of the property or any
interest therein, which is subject to a charge under section 45 :
Provided that no order shall be made under this section unless the member, past
member or the nominee, heir or legal representative of the deceased member, has
been served with a notice in the manner prescribed.
Execution of orders, etc.
105. Every decision award or order duly passed by the Registrar or the arbitrator
(substituted vide Notification No. F.14(31)/LA-2004/16 dated 17/01/2005) or the Tribunal,
or the Government under section 31, section 32, section 33, section 66, section 71,
section 104, section 110, section 112, section 114, section 115, section 116 or any other
provisions of this Act shall, if not carried out -
(a) where the decision, award or order provides for the recovery of
money, be executed according to the law for the time being in force
relating to the recovery of land revenue :
Provided that an application for the recovery of any sum in the manner
aforesaid shall be made to the Collector and shall be accompanied by a
certificate signed by the Registrar or by any person subordinate to him
and empowered by the Registrar in this behalf;
(b) in any other case be executed by the Registrar or any person
subordinate to him and empowered by the Registrar in this behalf, in the
same manner as is provided in the case of a civil court by the Code of
Civil Procedure, 1908 (5 of 1908).
Execution of orders of liquidator.
106. The orders of the liquidator under section 101 shall be executed according to the Act
and under the rules for the time being in force for the recovery of arrears of land
revenues.
Attachment before award.
107. Where the Registrar is satisfied that a party to any reference made to him under
section 70 with intent to defeat or delay the execution of any decision that may
be passed thereon is about to -
(a) dispose of the whole or any part of the property; or
(b) remove the whole or any part of the property from the local
limits of the jurisdiction of the Registrar;
the Registrar may, unless adequate security is furnished, direct the conditional
attachment of the said property or such part thereof as he thinks necessary and
such attachment shall be executed as if by a civil court having jurisdiction in the
same way as an attachment order passed by itself and shall have the same
effect as such an order:
Provided that the powers of the Registrar under this section shall not be
delegated to any officer below such rank as may be prescribed.
Recovery of debt.
108. (1) Notwithstanding anything contained in this Act or in any other law for the time
being in force and without prejudice to any mode of recovery which is being
taken or may be taken, the Registrar may, on application made by a co-operative
society including federal co-operative society or financial institution for recovery
of arrears of any sums advanced to any of its members and on its furnishing a
statement of accounts in respect of arrears and after making such inquiry as he
deems fit, issue a certificate for recovery of the amount stated therein to be due
as arrears.
(2) Where the Registrar is satisfied that a co-operative society has failed to take
action under sub-section (1) in respect of any amount due as arrears, he may on
his own motion, and after making such enquiry as he deems fit, issue a certificate
for the recovery of the amount stated therein to be due as arrears and such
certificate shall be deemed to have been issued on an application made by co-
operative society or financial institution concerned.
(3) A certificate issued by the Registrar under sub-section (1) or sub-section (2) shall
be final and conclusive proof of the arrears stated to be due therein and the
certificate shall be executed in the manner specified in section 111.
Registrar or person empowered by him to be civil court for certain purposes.
109. The Registrar or any person empowered by him in this behalf shall be deemed,
when exercising any powers under this Act for the recovery of any amount by the
attachment and sale or by sale without attachment of any property, or when
passing any orders on any application made to him for such recovery or for
taking a step in aid of such recovery, to be civil court for the purposes of article
136 of the Schedule to the Limitation Act, 1963 (36 of 1963).
Recovery of sums due to Government.
110. (1) All sums due from a co-operative society, or from an officer or member or past
member of a co-operative society as such, to Government, including any costs
awarded to Government under any provision of this Act, may on a certificate
issued by the Registrar in this behalf, be recovered in the same manner as
arrears of land revenue.
(2) Sums due from a co-operative society to Government and recoverable under sub-
section (1), may be recovered, firstly, from the property of the co-operative
society, secondly, in the case of the co-operative society, the liability of the
members of which is limited from the members, past members or the estates of
deceased members, subject to the limit of their liability, and thirdly, in the case of
other co-operative societies, from the members, past members or the estates of
the deceased members :
Provided that the liability of past members and the estate of deceased members
shall in all cases be subject to the provisions of section 29.
Special powers of Registrar for recovery of amount recoverable as arrears of land
revenue.
111. (1) For the purpose of effecting recovery of amount due and recoverable under the
provisions of this Act and the rules made thereunder, as arrears of land revenue -
(i) the Registrar appointed under section 3 shall have and exercise all
powers and perform all the duties of the Collector under the Delhi
Land Reforms Act, 1954; (Delhi Act 8 of 1954) read with the Delhi
Land Revenue Act, 1954 (Delhi Act 12 of 1954);
(ii) the Joint Registrars appointed to assist the Registrar under section 3
of this Act shall have and exercise all powers and perform all the
duties of the Additional Collector;
(iii) the Deputy Registrars, Assistant Registrars and the Recovery Officer
appointed under section 3 of this Act shall have and exercise all
powers and perform all the duties of the Assistant Collector Grade I;
and
(iv) Inspectors Grade II assigned the duties of recovery shall have and
exercise all the powers and perform all the duties of Assistant
Collector Grade II.
(2) Every notice issued or order passed in exercise of the powers conferred
by sub-section (1) shall, for the purpose of sections 31, 33, 44, 51, 65,
66, 69, 77, 83, 84, 85, 89, 93, 105, 106, 108, 110, 111, 116 and 122 be
deemed to be a notice or an order passed under this Act.
CHAPTER - XII
APPEALS, REVISION AND REVIEW
Appeals.
112. (1) Subject to the provisions of section 113, an appeal shall lie under this section
against-
(a) an order of the Registrar made under sub-section (2) of section 9
refusing to register a co-operative society;
(b) an order of the Registrar made under sub-section (4) of section
12 refusing to register an amendment of the bye-laws of a co-
operative society;
(c) an order of the Registrar made under sub-section (1) of section
17;
(d) disputes relating to election under section 35;
(e) an order of the Registrar removing the committee of a co-
operative society made under section 37;
(f) a decision of a co-operative society expelling any of its member
under section 40;
(g) an order made by the Registrar under section 64 apportioning the
cost of an inspection held under section 61 or an inquiry made
under section 62;
(h) an order of surcharge under sub-section (2) of section 66;
(i) any decision made under section 70;
(j) any deemed admission of case under sub-section (3) of section
70;
(k) any decision or award made under section 71;
(l) application for implementation of award for vacating possession of
flat or plot under sub-section (7) of section 83;
(m) expulsion from the membership under sub-section (3) of section
86;
(n) an order made by the co-operative society or the Registrar under
section 95 or section 96 or section 97 directing the winding up of
a co-operative society;
(o) any order made by the liquidator of a co-operative society in
exercise of the powers conferred on him by section 101;
(p) any order made under section 107; and
(q) a decision of a co-operative society refusing to admit any person
as a member of the co-operative society who is otherwise duly
qualified for membership under the bye-laws of the co-operative
society.
(2) An appeal against any decision or order under sub-section (1) shall be made
within sixty days from the date of decision or order -
(a) if the decision or order falls under clauses (d), (f) (g), (h), (i),
(j), (k) and (m) of sub-section (1), to the Tribunal;
(b) if the decision or order falls under clause (e), to the
Government;
(c) if decision or order falls under clause (l), to the court of
Metropolitan Magistrate; and
(d) in any other case, to the Government or the Registrar
according as the decision or order was made by the Registrar or
any other person.
(3) No appeal shall lie under this section from any decision or
order by the Registrar in appeal.
No appeal or revision in certain cases.
113. Notwithstanding anything contained in this Act where, with the previous sanction in
writing or on requisition of the Reserve Bank -
(i) a co-operative bank is being wound up; or
(ii) in respect of which a scheme of amalgamation or reorganisation is given
effect to; or
(iii) in respect of which an order for the supersession of the committee and
the appointment of an administrator therefor has been made;
no appeal, revision or review thereagainst shall lie or be permissible, and the
sanction or requisition of the Reserve Bank shall not be liable to be called in
question.
Delhi Co-operative Tribunal.
114. (1) The Government shall by notification published in the official Gazette, constitute
a Tribunal to be called the Delhi Co-operative Tribunal to exercise the powers
and perform the functions conferred by or under this Act upon such Tribunal.
(2) The Tribunal shall consist of a Chairman and not more than two other members
possessing such qualifications as may be prescribed, and shall be appointed by
the Government by notification in the official Gazette for such term as may be
prescribed.
(3) Any vacancy in the membership of the Tribunal shall be filled by the Government.
(4) Subject to the previous approval of the Government, the Tribunal shall frame
regulations, consistent with the provisions of this Act and the rules made
thereunder for regulating its procedure and the disposal of its business.
(5) The regulations made under sub-section (4) shall be published by the
Government in the official Gazette.
(6) The Tribunal may call for and examine the record of any proceedings, in which an
appeal lies to it, for the purpose of satisfying itself as to the legality or propriety of
any decision or order passed and if in any case it shall appear to the Tribunal
that any such decision or order should be modified, annulled or reversed, the
Tribunal may pass such order thereon as it may deem fit.
(7) An order passed in appeal under section 112 or in revision under sub-section (6)
of this section or in review under section 115 by the Tribunal shall be final and
conclusive, and shall not be called in question in any civil or revenue court.
Explanation. - The Tribunal hearing an appeal under this Act shall exercise all the
powers conferred upon an appellate court by section 97 of, and Order XLI of the
First Schedule to, the Code of Civil Procedure, 1908 (5 of 1908).
Review.
115. (1) The Government or the Tribunal or the Registrar on the application of any party
may review their own order in any case, and pass in reference thereto such order
as they think just :
Provided that no such application made by the party shall be entertained unless
the Government or the Tribunal or the Registrar, as the case may be, is satisfied
that there has been the discovery of new important matter of evidence, which
after the exercise of due diligence was not within the knowledge of the applicant
or could not be produced by him at the time when order was made or that there
has been some mistake or error apparent on the face of the record, or for any
other sufficient reasons :
Provided further that no such order shall be varied or revised unless notice has
been given to the parties interested to appear and being heard in support of such
order.
(2) An application for review under sub-section (1) by any party shall be made
within thirty days from the date of communication of the order of the Goverment
or the Tribunal or the Registrar.
Revision.
116. (1) Goverment may of its own motion or on application made to it, call for and
examine the record of the Registrar, in respect of any proceeding not being a
proceeding in respect of which an appeal to the Tribunal is provided by section
114 to satisfy himself as to the regularity of such proceeding or the correctness,
legality or propriety of any decision passed or order made therein and if, in any
case, it appears to the Goverment that any such decision or order should be
modified, annulled, reversed or remitted for reconsideration, he may pass orders
accordingly :
Provided that every application to the Goverment for the exercise of the powers
under this section shall be preferred within ninety days from the date on which
the proceedings, decision or order to which the application relates was
communicated to the applicant.
(2) No order prejudicial to any person shall be passed under sub-section (1)
unless such person has been given an opportunity of making his representation.
(3) Government may suspend the decision or order pending the exercise of its
power under sub-section (1) in respect thereof.
(4) Government may award costs in proceedings under this section to be paid
either out of the funds of the co-operative society or by such party to the
application for the revision as the Government may deem fit which may be
recovered as arrears of land revenue.
Interlocutory orders.
117. Where an appeal is made under section 112 or where the Tribunal or the
Government calls for the record of a case under section 113 or section 115, the
appellate authority or the Tribunal or the Government, as the case may be, may
in order to prevent the ends of justice being defeated, make such interlocutory
order, including an order of stay, pending the decision of the appeal or revision
as such authority or the Tribunal or the Government may deem fit.
CHAPTER - XIII
OFFENCES AND PENALTIES
Offences and penalties.
118. (1) Any co-operative society or an officer or member thereof, willfully making a false
return or furnishing false information, or any person willfully or without any
reasonable excuse disobeys any summons, requisition or lawful written order
issued under the provisions of this Act, or willfully not furnishing any information
required from it or him or by a person authorized in this behalf under the
provisions of this Act, shall be punishable with fine which shall not be less than
two thousand rupees but which may extend to ten thousand rupees.
(2) Any employer who, without sufficient cause, fails to pay to a co-operative society
the amount deducted by him under section 52 within a period of fourteen days
from the date on which such deduction is made shall, without prejudice to any
action that may be taken against him under any other law for the time being in
force, be punishable with fine which may extend to five thousand rupees.
(3) Any officer or custodian who willfully fails to handover custody of books,
accounts, documents, records, cash, security and other property belonging to a
co-operative society of which he is an officer or custodian, to a person entitled
under section 38 or section 60 or section 61 or section 62 or section 99 shall be
punishable with fine which may extend to two thousand rupees and in the case
of a continuing breach, with a further fine which may extend to five thousand
rupees for every day during which the breach is continued after conviction for
the first such breach.
(4) Any person who acts in contravention of section 44 or section 45 or sub-section
(2) of section 66 or section 67 or section 68 or section 138 shall be punishable
with fine of five hundred rupees.
(5) The committee of a co-operative society or any of its officers or employees who
falsify or tamper with the record of the co-operative society, shall be punishable
with imprisonment which may extend to seven years and shall also be liable to
fine.
(6) Any officer or employee of a co-operative society including the paid secretary
who dishonestly or fraudulently misappropriates or otherwise converts for his
own use or intentionally causes loss to the property of the co-operative society
entrusted to him or under his control as such officer or employee, or allows
another person so to do shall be punishable with imprisonment which may
extend to seven years and shall also be liable to fine.
(7) If any allotment of plot or flat is made by the committee in contravention of the
provisions of sub-section (1) of section 77, the committee and its members
responsible shall be punishable with imprisonment which may extend to seven
years and shall also be liable to fine.
(8) If a co-operative society fails to file return as required under section 32, the
committee or the negligent officer shall be punishable with a fine, which may
extend to five hundred rupees.
(9) If committee fails to dispose of application within the period prescribed in section
91, the committee members responsible shall be liable for a penalty of ten
thousand rupees and in the case of a continuing breach, with a further fine of
one hundred rupees for every day during which the breach is continued after the
expiry of the prescribed period.
(10) On conviction, a member of the co-operative society shall be debarred from
contesting election of a committee for a period of six years.”
(substituted vide Notification No. F.14(31)/LA-2004/16 dated 17/01/2005)
Prohibition of the use of the word `co-operative' or its equivalent.
119. (1) No person other than a co-operative society shall trade or carry on business
under any name or title of which the word `co-operative' or its equivalent in any
Indian language forms part without the sanction of the Government :
Provided that nothing in this sub-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 the Co-operative Societies Act, 1912, (2 of 1912 )
come into operation.
(2) Whoever contravenes the provisions of sub- section (1) shall be punishable with
fine which may extend to two hundred rupees and in the case of a continuing
offence with further fine of five hundred rupees for each day during which the
offence is continued after conviction therefor.
Punishment for offences not otherwise provided for.
120. Any co-operative society or any officer or member thereof or any other person
contravening the provisions of this Act for which no punishment is expressly
provided herein shall be punishable with a fine which may extend to five thousand
rupees.
Cognizance of offences.
121. (1) No court inferior to that of a Metropolitan Magistrate shall try any offence under
this Act.
(2) No prosecution shall be instituted under this Act without the previous sanction
of the Registrar and such sanction shall not be given unless the person
concerned has been provided a reasonable opportunity to represent his case.
(3) Every offence under this Act shall, for the purposes of the Code of Criminal
Procedure, 1973 (2 of 1974), be deemed to be a cognizable offence.
Presumption as to commission of offence in certain cases.
122. (1) In the trial of offences by the Metropolitan Magistrate, it shall be presumed until
the contrary is proved that any officer or employee of a co-operative society -
(a) who draws the amounts from the financing institution and fails to
properly disburse or account for it, has misused or
misappropriated the amounts;
(b) who is responsible for the custody of books and properties or who
is in actual possession thereof, fails to produce the same on
requisition by the Registrar or any person authorised by him, has
wilfully withheld the same;
(c) who makes any false entries or manipulates or alters the account
books of the co-operative society, has wilfully committed the said
act in order to cause loss or damage to the co-operative society;
(d) who misuses the properties of the co-operative society in
contravention of the provisions of this Act and the rules made
thereunder or the bye-laws of the co-operative society has done
so, for his personal benefit;
(e) who executes any documents or enters into an agreement for sale
or purchase of the land, plots, flats, etc., in contravention of the
provisions of the registered bye-laws of the co-operative society,
has done so for his personal benefit and in order to cause loss to
the members of the co-operative society.
(2) Any officer or employee of a co-operative society who issues any receipt shall
be deemed to have issued the same in the name of the co-operative society
and shall be responsible to account for the same.
(3) Notwithstanding the criminal liability, the officer or employee of a co-operative
society shall be responsible to make good the loss caused to the co-operative
society by committing such offences and the same shall be recovered as
arrears of land revenue by the Registrar or the person authorised by him from
the person responsible for causing such loss or his legal heirs or any person
who has acquired the properties from such person or with the assistance of
such person.
Presumption as to statements.
123. Where any member, officer or employee of a co-operative society has made a
statement during the audit under section 60, or inspection under section 61, or
inquiry under section 62, or inspection of debtor institution under section 63, or
proceedings under section 66 and the statement is recorded by the Registrar or
the person authorised by the Registrar in exercise of their powers conferred on
them under this Act, the court shall presume that the statement was so recorded
by the Registrar or the person authorised by him as a statement within the
meaning of the Indian Evidence Act, 1872 (Act 1 of 1872).
Address of co-operative society.
124. Every co-operative society shall have an address registered in the manner
prescribed to which all notices and communications may be sent and shall send
to the Registrar notice of every change thereof within thirty days of such change.
Copy of Act, rules and bye-laws, etc. to be open for inspection.
125. Every co-operative society shall keep a copy of this Act, the rule and its bye-laws
and also a list of its members, open to inspection free of charge at all reasonable
times at the registered address of the co-operative society.
Power to exempt co-operative societies from conditions as to registration.
126. Notwithstanding anything contained in this Act, the Government may, by general or
special order and subject to such conditions, if any, as it may impose, exempt
any co-operative society or class of co-operative societies from any of the
requirements of this Act as to registration.
Power to exempt co-operative societies from the provisions of the Act.
127. The Government may, by general or special order, to be published in the official
Gazette, exempt any co-operative society or class of co-operative societies from
any of the provisions of this Act, or may direct that such provisions shall apply to
such co-operative society or class of co-operative societies with such
modifications as may be specified in the order.
Officers and employees to be public servants.
128. The Registrar or any person authorised by him to recover any amount or to execute
any orders or decisions taken under any provisions of this Act and every officer
and employee of the co-operative society shall be deemed to be a public servant
within the meaning of section 21 of the Indian Penal Code, 1860 (45 of 1860)
Notice necessary in suits.
129. No suit shall be instituted against a co-operative society or any of its officer in
respect of any act touching the business of the co-operative society until the
expiration of ninety days next after notice in writing has been delivered to the
Registrar or left at his office, stating the cause of action, the name, description
and place of residence of the plaintiff and the relief which he claims, and the
plaint shall contain a statement that such notice has been so delivered or left.
Companies Act not to apply.
130. The provisions of the Companies Act, 1956 (1 of 1956) shall not apply to co-
operative societies.
Saving of existing co-operative societies.
131. (1) Every existing co-operative society which had been registered under the Co-
operative Credit Societies Act, 1904 or under the Co-operative Societies Act,
1912, or under the Bombay Co-operative Societies Act, 1925, as was in force in
Delhi, or the Delhi Co-operative Societies Act, 1972 shall be deemed to be
registered under the corresponding provisions of this Act and rules framed
thereunder and bye-laws thereof shall, so far as the same are not inconsistent
with the express provisions of this Act, continue in force until altered or
rescinded.
(2) All appointments, rules and orders made, notifications and notices issued and
suits and other proceedings instituted under the said Acts shall, so far as they
are consistent with the provisions of this Act, be deemed to have been
respectively made, issued and instituted under this Act, save that an order made
cancelling registration of a co-operative society shall be deemed, unless the co-
operative society has already been finally liquidated, as an order issued under
section 95 or section 96 or section 97 for its being wound up.
Bar of jurisdiction of civil or revenue courts.
132. (1) Save as provided in this Act, no civil or revenue court shall have any jurisdiction
in respect of -
(a) the registration of a co-operative society or
its bye-laws or of an amendment of a bye-law;
(b) the removal of the committee;
(c) any dispute required under section 70 to be
referred to the Registrar; and
(d) any matter concerning the winding up and
the dissolution of a co-operative society.
(2) While a co-operative society is being wound up, no suit or other legal
proceedings relating to the business of such co-operative society shall be
proceeded with or instituted against the liquidator as such or against the co-
operative society or any member thereof, except by leave of the Registrar and
subject to such terms as he may impose.
(3) Save as provided in this Act, no order, decision or award made under this Act,
shall be questioned in any court on any ground whatsoever.
Powers of civil Court.
133. (1) In exercising the functions conferred on him by or under this Act, the Registrar,
the arbitrator (substituted vide Notification No. F.14(31)/LA-2004/16 dated
17/01/2005) or any other person deciding a dispute under section 70 and the
liquidator of a co-operative society or person entitled to audit, inspect or hold an
inquiry and the Tribunal shall have all the powers of a civil court, while trying a
suit under the Code of Civil Procedure, 1908 (5 of 1908) in respect of the
following matters, namely -
(a) Summoning and enforcing the attendance of any person and
examining him on oath;
(b) requiring the discovery and production of any document;
(c) proof of facts by affidavits; and
(d) issuing commissions for examination of witness.
(2) In the case of an affidavit, the Registrar or any officer appointed by him, the
arbitrator (substituted vide Notification No. F.14(31)/LA-2004/16 dated
17/01/2005), the liquidator or the Tribunal, as the case may be, may administer
the oath to the deponent.
Indemnity.
134. No suit, prosecution or other legal proceedings shall lie against the Registrar or any
person subordinate to him or acting on his authority in respect of anything in
good faith done or purporting to have been done under this Act.
Service rules for employees of co-operative societies.
135. The Government shall as soon as may be after the commencement of this Act,
direct all co-operative societies or class of co-operative societies to frame service
rules for their employees and get them approved from the committee within a
period of three hundred and sixty five days.
CHAPTER - XIV
RULES AND MISCELLANEOUS PROVISIONS
Power to delegate.
136. The Government may, by notification in the official Gazette, direct that any power
exercisable by it under this Act, except the power to make rules, may also be
exercised by such officer as may be mentioned therein in such cases and subject
to such conditions, if any, as may be specified therein.
Power to make rules.
137. (1) The Government may, by notification published in the official Gazette, make
rules for carrying out all or any of the purposes of this Act and for any class of co-
operative societies.
(2) In particular and without prejudice to the generality of the foregoing power, such
rules may provide for all or any of the following matters, namely -
(a) prescription of viability norms for registration of a co-operative
society;
(b) the maximum number of shares or proportion of the capital of a
co-operative society which may be held by a member;
(c) the form to be used and conditions to be complied with in making
of application for the registration of a co-operative society and
the procedure in the matter of such applications;
(d) the procedure to be followed in making, altering and abrogating
the bye-laws and the conditions to be specified prior to such
making, alteration and abrogation and compulsory amendment
of the bye-laws by the Registrar;
(e) the procedure and conditions for change in the form and extent of
liability of a co-operative society;
(f) procedure for amalgamation, transfer of assets and division of co-
operative society;
(g) classifications of co-operative societies with reference to their
objects, area of operation, membership or any other matter by
the Registrar;
(h) conditions to be complied with by a person applying for admission
or admitted as member;
(i) admission of any person as nominal, associate or joint member
and the terms and conditions and the procedure to be followed
therefor;
(j) right of membership to be acquired only on payment made
towards membership and interest to be acquired to exercise the
right of membership and the manner in which vote can be
exercised;
(k) restriction on transfer of shares or interest;
(l) transfer of interest on death of a member, procedure and liability
of past member and estate of the deceased member;
(m) the proportion of individual and co-operative society in the
constitution of the committee and the general body of co-
operative society of which other co-operative society is a
member and the power exerciseable by such committee or
generla body;
(n) the procedure for holding of annual general body meeting, time to
be given for finanalising the accounts at the close of the co-
operative year, consequence of failure of a committee to conduct
the annual general body meeting in time and action by the
Registrar to conduct the same and recovery of the expenses as
arrears of land revenue from the defaulting persons;
(o) details of the returns and their format to be filed relating to the
constitution, business and allied matters by a co-operative
society within thirty days of holding of the annual general body
meeting;
(p) the procedure for holding a special general body meeting and
recovery of expenses from delinquent officers of the committee;
(q) the constitution of the committee of a co-operative society for its
management, procedure for nomination of members on the
committees where the Government has contributed equity share
capital and the Government guarantees have been given for
loans or floating of bonds;
(r) the procedure for holding of the elections and the steps to be
initiated for such election before the expiry of the term,
appointment of an administrator on failure to conduct elections
and to conduct election within ninety days, recovery of expenses
from the delinquent officers of the committee in cases of default;
(s) prescribing reservation of seats for schedule castes, other
backward classes and woman on the committee, where share
capital is subscribed by the government and reservation of two
seats for woman in all types of co-operative societies;
(t) rules and procedure for conducting the election of the committees;
(u) the procedure for making a motion expressing lack of confidence
in the committee or any of its officer in the special general body
meeting convened for the purpose and setting up an ad-hoc
committee to conduct fresh elections within the period of ninety
days;
(v) the modalities to be complied with before supersession of the
committee of a co-operative society and constitution of the new
committee by the administrator before the expiry of his term;
(w) procedure for authorisation to Sub-divisional Magistrate for
securing possession of records of a co-operative society;
(x) the manner in which funds may be raised for running the
business of a co-operative society,
(y) the procedure to be followed for cessation of membership in a
cooperative society.
(z) procedure to be followed for expulsion of members other than
members of co-operative housing societies;
(za) the procedure for certifying any entries in the books of a co-
operative society and charges to be levied for supply of copies
thereof;
(zb) the formation and maintenance of reserve fund and other funds,
and the objects to which such funds may be applied and
allocation and distribution of the net profit arrived thereafter;
(zc) the amount and percentage of net profit to be contributed by a
co-operative society for Co-operative Education Fund and its
utilisation;
(zd) manner in which a co-operative society may invest or deposit its
funds;
(ze) the limit up to which a co-operative society can receive deposits
and loans, conditions for it;
(zf) prohibitions and restrictions subject to which co-operative
societies may transact business with the persons who are not
members;
(zg) the manner of getting the audit conducted by an auditor on the
panel of the Registrar with in the prescribed time limit, action by
the Registrar on failure to comply with the time limit by a co-
operative society and recovery of expenses for getting the audit
conducted as a arrears of land revenue from the officers of the
committee;
(zh) the manner in which a copy of audit report to be sent to the
Registrar and rectification of defects by a co-operative society
reported in the audit report by an auditor;
(zi) the manner in which inspection, inquiry and inspection of books
of indebted co-operative society is to be conducted, the security
money to be deposited by a creditor for such inspection and the
follow up action to be taken on the findings including the
rectification thereof;
(zj) the accounts and books to be kept by a co-operative society
during the course of its business and on failure to do so, to get
them completed by the Registrar by engaging other persons as a
charge on the committee recoverable as arrears of land revenue,
the procedure and fee to be charged for it;
(zk) the manner in which disputes to be referred for arbitration and
fee for it;
(zl) the procedure for selection and appointment of members of
arbitrator (substituted vide Notification No. F.14(31)/LA-
2004/16 dated 17/01/2005), their terms and conditions of service
and related matters;
(zm) the procedure to be followed before the Registrar or
arbitrator (substituted vide Notification No. F.14(31)/LA-
2004/16 dated 17/01/2005) for settlement of disputes and
guidelines and the format for announcing the award;
(zn) the manner in which the affairs of a co-operative housing society
shall be managed, rights and privileges of members on allotment
of plot or flat, issue of certificate of allotment giving therein the
details of plot or flat and the rights and privileges of member
therein and member's obligations towards the co-operative
society;
(zo) the procedure for the allotment of plot or flat by draw of lots and
for the verification of membership or change in the membership,
with special reference to co-operative housing societies which
have been allotted land on leasehold right basis by the lessor;
(zp) the manner in which membership can be transferred in a co-
operative housing society to heir or a nominee subject to the
terms and conditions of the lease of land;
(zq) the manner in which occupancy rights may be transferred in a
co-operative housing society subject to right of the lesser in
terms of lease deed of the land;
(zr) the guidelines for the creation, maintenance and utilisation of the
building maintenance fund and replacement fund in a co-
operative housing society;
(zs) the manner in which a mortgage in favour of a co-operative
housing society or apex can be registered, its procedure and
format;
(zt) the procedure and manner of settling disputes in a co-operative
housing society;
(zu) the procedure for recovery of outgoings and arrears of dues of
co-operative housing society or the apex by the Registrar as
arrears of land revenue;
(zv) the recovery of dues and foreclosure of properties in respect of
dues of a co-operative housing society, apex and other approved
housing finance institutions;
(zw) the manner and procedure in which a member of a co-operative
housing society may be expelled;
(zx) the manner and procedure in which the membership of a
member of co-operative housing society can be ceased;
(zy) the guidelines for the management of co-operative housing
societies;
(zz) the guidelines for the maintenance of essential services in a co-
operative housing society;
(zza) the form of register of the properties to be maintained by co-
operative housing society;
(zzb) the manner of regularisation of membership of persons who
have acquired property in a co-operative housing society as
power of attorney holder or purchaser of property through
agreement of sale and purchase subject to right of lessor and
procedure for enforcement of time limit for conversion of property
to freehold;
(zzc) the prescription of the guidelines for execution of co-operative
housing projects and procedure for initiating action in case of
default;
(zzd) the prescription of the guidelines for the management of co-
operative housing complex by the co-operative housing
societies;
(zze) the manner in which a house building co-operative society
which has achieved its objects is to be wound up and the
scheme therefor subject to the prior consent of the lessor;
(zzf) the procedure to be followed in respect of co-operative societies
which have decided for the dissolution or where liquidator has
been appointed for winding up proceedings by the Registrar and
finalisation thereof;
(zzg) the manner of service of notice regarding the procedure for
enforcement of charge;
(zzh) the manner of effecting execution of orders and attachment;
(zzi) attachment before award and authorisation of officers by the
Registrar for taking custody, preservation and sale of property
under attachment, recovery of debt as arrears of land revenue,
specifying officers who can be delegated powers of the Registrar
to attach property before announcement of the award;
(zzj) recovery of dues as arrears of land revenue procedure for it;
(zzk) the procedure to be followed in presenting and disposing of
appeals;
(zzl) the procedure for selection of members of the Tribunal, laying
down the qualifications and the terms of the Chairman and the
members of the Tribunal, and framing of regulations for the
working of Tribunal;
(zzm) the procedure for submission of application for review;
(zzn) the procedure for making submission for revision;
(zzo) issuing directions to the co-operative societies to frame service
rules for employees;
(zzp) fee to be fixed for supply of documents and information to a
member or a creditor;
(zzq) the method of communication or publishing any order, decree
or award required to be communicated or published under this
Act or the rules;
(zzr) any other matter which is required to be, or may be, prescribed
under this Act.
(2) Every rule made under this Act shall be laid as soon as may be after it is
made, before the Legislative Assembly of the National Capital Territory of Delhi
while it is in session, for a total period of thirty days which may be comprised in
one session or in two or more successive sessions, and if, before the expiry of
the session immediately following the session or the successive sessions
aforesaid, the Legislative Assembly agrees in making any modification to the rule
or the Legislative Assembly agrees that the rule should not be made, the rule
shall thereafter have effect only in such modified form or be of no effect, as the
case may be, so however, that any such modification or annulment shall be
without prejudice to the validity of anything previously done under that rule.
Power of the Registrar to give directions to the co- operative banks.
138. The Registrar may generally or in any particular matter under this Act or for
enforcement of directions of the Reserve Bank to protect the interest of members
and depositors of the co-operative banks licensed by the Reserve Bank and
registered under this Act or operating in Delhi under the Multi-State Co-operative
Societies Act, 2002 (39 of 2002), issue such orders or directions as he may
consider necessary to a co-operative bank or banks and thereupon such co-
operative bank shall give effect to such orders or directions and shall report to him
the compliance within the time specified in the order or direction.
Right to information.
139. (1) Any member or creditor having interest in the affairs of the co-operative society
may seek information relating to any transaction of the co-operative society and for
that purpose may be provided a certified copy of any document within thirty days
from the date of receipt of application relating to such transaction on payment of
such fee as may be specified.
(2) Where a member or creditor having interest in affairs of a society
seeking information prefers an appeal to the Registrar stating that the
officer of the society without any reasonable cause, has refused to receive
his application for providing information or has not furnished information
within the time specified under sub-section (1) or has refused the request
for information or knowingly given incorrect information or obstructed in
any manner in furnishing the information, the Registrar, after affording a
reasonable opportunity of being heard to the officer of the society and the
appellant, may either reject the appeal; or direct the officer of the society
to furnish information within the period specified in the order or such
extended period as may be allowed, and in case of default the Registrar
may impose a penalty of two hundred and fifty rupees each day till the
information is furnished, so however, the total amount of such penalty
shall not exceed ten thousand rupees which shall be recoverable as arrears
of land revenue in case of default in payment.
Act to override other laws.
140. The provisions of this Act shall have effect notwithstanding anything inconsistent
therewith contained in any other law.
Repeal and savings.
141. On the day on which the Delhi Co-operative Societies Act, 2003 comes into force,
the Delhi Co-operative Societies Act, 1972 (35 of 1972) in force in the National
Capital Territory of Delhi shall stand repealed. Provided that the repeal shall not
affect -
(a) the previous operation of the Act so repealed or anything duly done or
suffered thereunder; or
(b) any right, privilege, obligation or liability acquired, accrued or incurred under
the Act so repealed; or
(c) any penalty, forfeiture or punishment incurred in respect of any offence
committed against the Act so repealed; or
(d) any investigation, legal proceedings or remedy in respect of any such right,
privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid and
any such investigation, legal proceedings or remedy may be instituted, continued
or enforced and any such penalty, forfeiture or punishment may be imposed as if
that Act had not been repealed.
Removal of difficulties.
142. (1) If any difficulty arises in giving effect to the provisions of this Act, the
Government may by order, do any thing not inconsistent with such provisions
of this Act for the purpose of removing the difficulties :
Provided that no such order shall be made under this section after the expiry of
two years from the commencement of this Act.
(2) Every order under this section shall be laid, as soon as may be after it is made,
before the Legislative Assembly of Delhi for ratification.
THE FIRST SCHEDULE
[SEE SECTION 2(g)]
CO-OPERATIVE PRINCIPLES
1. Voluntary and Open Membership _ Co-operatives are voluntary organisations, open to all
persons capable of using their services and willing to accept the responsibilities of membership,
without discrimination on basis of gender, social inequality, racial, political ideologies or
religious consideration.
2. Democratic Member Control _ Co-operatives are democratic organisations controlled by their
members, who actively participate in setting their policies and decision making. Elected
representatives of these co-operatives are responsible and accountable to their members.
3. Member's Economic Participation _ Members contribute equitably and control the capital of
their Co-operative democratically. At least a part of the surplus arising out of the economic
results would be the common property of the co-operatives. The remaining surplus could be
utilised benefiting the members in proportion to their share in the Co-operative.
4. Autonomy and Independence _ Co-operatives are autonomous, self-help organisations
controlled by their members. If co-operatives enter into agreement with other organisations
including Government or raise capital from external sources, they do so on terms that ensure
their democratic control by members and maintenance of Co-operative autonomy.
5. Education, Training and Information _ Co-operatives provide education and training to their
members, elected representatives and employees so that they can contribute effectively to the
development of their Co-operatives. They also make general public, particularly young people
and leaders aware of the nature and benefits of co-operation.
6. Co-operation among Co-operatives _ Co-operatives serve their members most effectively
and strengthen the co-operative movement by working together through available local,
regional, national and international structures.
7. Concern for Community _ While focusing on the needs of their members, co-operatives work
for the sustainable development of communities through policies accepted by their members.
Sd/-
(P.S. PARMAR)
DEPUTY SECRETARY (LAW,JUSTICE & L.A.)
PROVISIONS OF DELHI CO-OFERATIVE SOCIETIES ACT-2003
PRIOR TO
AMENDMENTS BEFORE 17-01-2005
I. Under Sec-2(a)
2. Under Sec-9(d)
3. Under Sec-3 I(I)
4. Under Sec-3 1(2)
5. Under Sec-37( I)
6. Under Sec-37(1)
7. Under Sec-37(7)
8. Under Sec-37(I)(b)
9. Under Sec-60(1)
10. Under Sec-71(1)
[82]
"arbitration councii" means a group of three individuals constituted by the
Government for the settlement of disputes under section 71 in accordance
with the provisions of this Act;
"and"
"ninty days"
"ninty days"
"persistently makes default"
"fails to initiate action for recovery or fails to recover any dues ofa federal co
operative society or any financial institution after the finality of award and
issue of recovery certificate or after such recovery fails to pay the recovery
amount to the federal G)-operative society or the financial institution"
"five hundred and fifty days"
"Provided further that the supersession of the committee ofa co-operative society
shall be made only where the Government has equity of fifty one percentum or
more."
"ninty days"
"shall"
"(a) decide the dispute himself, or
(b) refer it for disposal to arbitration council.
(2) The Government shall constitute as many arbitration councils as may
be necessary each consisting of three members incfuding a Chairman. to
decide disputes under this section.
(3) (a) For selecting persons for appointment as members of the arbitration
council, the Government shall constitute a selection committee as often as
may be reqUired which shall consist of the follOWing namely-
(i) PrinCipal Secretary to the Government - Chairman
(ii) Secretary. Law and judicial - Member
(iii) Registrar Co-operative Societies - Member Secretary
(b) The selectian committee shall finalise within a period of thirty days
from the date on which the reference is made to it.
(c) The selection committee shall recommend a panel of names for every
vacancy referred to it.
(d) All decisions of the selection committee shall be by majority.
(4) The Government shall appoint the member of the arbiU,,'ion council
from the names recommended by the selection committee.
(5) The method. manner of selection. appointment of members of the
arbitration council. designation of one of the members as Chairperson of
such council. their qualifications, terms and conditions of appointment
and fee payable to them shall be prescribed by the Government from time
to time.
II.
12.
13.
14.
Under Sec-91
Under 5ec-97
Under Sec-105
Under Sec-I 18( I)
(6) The term of members of tile ar!:>itralion council sholl be three years
and they sholl hold their office at the pleasure of the Government.
(7) The decision of the arbitration council shalf be taken on the basis of
majority.
(8) The Registrar or arbitrolion council will decide the dispute referred
within a period of one hundred and (wenty five i"ys anu it' (,,,, '.hpute
;s not decided within the aforesaid period. (he ,'{t:g;strcr (j{ 'J/ bitration
council, as the case may be. on a written appiic:JtHJn {rom rllt: parties to
the reference and on being satisfied that there were sufficient reasons (or
delay, may extend the period upto further period of one hundred and
twenty five days, within which the dispute shall be decided.
(9) The Registrar may withdrm'/ any reference transferred under clause
(b) of sub-section (I) and decide it himself or refer the same to another
arbitration council for decision.
(10) The Registrar or arbitration council to wham a dispute is referred for
decision under this section may. pending the decision of the dispute. make
such interlocutory orders as may be deemed necessary in the interest of
justice. "
"Any person who has acquired property an occupancy right in a co
operative housing society thraugh the instrument of power of attorney or
agreement for sale shall have the opportunity to became member of the
concerned co-operative housing society where the property exists by getting
the property converted from leasehold to freehold and on paying the
transfer fee to the concerned co-operative housing society along with dues,
including the dues of the apex or financial institution. if any :
Provided that a power of attorney holder or purchaser of property through
agreement of sale and purchase in a co-operative housing society shall get
the said property converted from lease hold to free hold within a period
of three hundred and sixty days at the commencement of this Act and all
subsequent sales and purchases of such property after the commencement
of this Act, the property shall be converted from lease hold to free hold
within three hundred and sixty days, failure to do so sholl be deemed to
be an offence under section I 18 :
Provided further that any such person can have access to the paid services
provided by the committee, namely the use of community hall. swimming
pool or any other common facilities available to the members or the use
of common parking spaces provided by the co-operative housing society only
in the event of his becoming member as aforesaid and the transfer fee for
becoming member sholl be ten thousand rupees or as may be revised by
the Registrar from time to time."
"Notwithstanding anything to the contrary contained in this Act. the
Registrar shall make an order for winding up of a co-operative bank. if so
required by the Reserve Bonk."
"Arbitration council"
"( I) It shall be on offence under this Act. if-
(a) the committee. an officer. employee or any member of the co-operative
society wilfully makes a false return or furnishes false information relating
to the affairs of the co-operative s,?ciety under this Act;
(b) the committee. its officers or employees falSify or tamper with the
records of the co-operative society:
(c) the committee fails to ho!:1 annual general body meeting under sub
section (I) of section 3 I or fails to send returns to the Registrar after the
meeting under section 32:
[83]
•
15. Under Sec-I33( I)
16. Under Sec-137(zl)
17. Under Sec-137(zrn)
[84]
(d) committee foils to act on a requisition for holding special general body
meeting under sub-section (2) of section 33;
(e) the outgoing committee does not hand over the records to the newly
elected committee or administrator or the liquidator under sub-section (2)
of section 38;
en the committee or any of its officials fail to comply with the directions
given under section 42 or section 138;
(g) any person acts in contravention of section 44 or section 45 or sub
section (2) of section 66 or section 67 or section 68 or sub-section (8) of
section 92;
(h) if any allotment of plot or" flat is made in contravention of provisions
of sub-section (I) of section 77;
(i) an officer, or an employee of the co-operative society including the
paid secretary, dishonesty or fraudulently mis-appropriates or otherwise
converts for his own use or intentionally causes loss to the praperty of the
co-operative society entrusted to him or under his control as such officer
or employee or allows any other person so to do;
(j) an officer or an employee of the co-operative society is or proved to
have been in possession of any pro-perty of the co-operative society
reasonably suspected to have been stolen or unlawfully obtained;
(k) any officer or employee abets any offence punishable under this Act
whether or not that offence is committed in consequence of that abetment;
(/) if the committee fails to initiate action against the defaulter member
for recovery of dues of the apex or any other financing institution after the
finality of the award or after recovery of such dues, fails to pay the
recovered amount to the apex or the financial institution;
(m) on failure to convert the property to freehold by a power of attorney
holder or purchaser of property on agreement to sell within a period of
three hundred and sixty days the under provisions of section 91;
(n) on failure of the committee of a co-operative housing society to complete
construction of its housing praject within time limit fixed under sub-section
(I) of section 92.
(2) An offence under clause (a) of sub-section (I) shall be punishable
with fine which may extend to fifty thousand rupees.
(3) An offence under any of the clauses (b) to (n) of sub-section (I) shall
be punishable with imprisonment for a term which may extend to seven
years and with fine which may extend to fifty thousand rupees or the both.
(4) On conviction, a member of the co-operative society shall be debarred
from contesting election of a committee for a period of six years.
(5) The period of limitation for taking cognizance of the offence under this
section shall be three years from the date of the offence."
"Arbitration council"
"Arbitration council"
"Arbitration council"
!'nOVISIONS OF DELHI CO-OPERATIVE SOCIETIES ACT-2003
PRIOR TO
AMENDMENTS BEFORE 13-01-2007
I.
2.
3.
4.
5.
6.
Unde,' Sec-35( I)
Under Sec-60( I)
Under Sec-77(1)
Under 5ec-79(a)
Under 5ec-91
Under 5ec-92(6)
The superintendence, direction and control of the preparation of the electoral
rolls for, and the conduct of elections of the members of the committee of. a
co-operative society shall be vested in the committee.
Provided that the entire process of election will be conducted by a
Returning Officer to be appOinted by the Government who shall be not
below the rank ofa Gazetted Officer.'
co-operative society shall get its accounts audited annually by an auditor selected
from the panel prepared by the Registrar in the prescribed manner within the
period ofninety days' from the cfose ofco-operative year.
Allotment ofplots of land, flats, houses or other dwelling units shall be made by the
committee ofa co-operative housing society to the members strictly on the basis of
draw oflots only in respect ofsuch members whose enrolment as a member ofa co·
operative housing society is found proper in accordance with the provisions ofthis Act,
rules framed thereunder and the bye-laws ofthe co-operative housing society by the
Registrar and such a draw of lot shall be conducted by the lessor of the land in
accordance with the terms and tonditions of lease.
the previous permission of the co-operative housing society has been obtained by
the transferor by paying the transfer fee;
Any person who has acqUired property on occupancy right in a co-operative
housing society through the instrument ofpower ofattorney or agreement for
sale shallhave the opportunity to become memberofthe concernedco-operative
housing society where the property exists by getting the property converted
from leasehold to freehold and on paying the transfer fee of ten thausand
rupees or such amount as may be determined by the Registrar from time to
time to the concerned co-operative housing society along with dues, incfuding
the dues ofthe apex or financial institution, ifany:
Provided that the member who has sold his plot or flat on power ofattorney
or agreemer.t for sale shall have no voting right in the affairs of the co
operative housing society, however, the power of attorney holder shall
. acquire voting right only after getting the property converted into freehold:
Provided further that any such person can have access to the paid services,
namely, the use of community hall, swimming pool or any other common
facilities available to the members or the use of common parking spaces
provided by the co-operative housing society only after becoming a nominal
member of the co-operative housing society as per its bye-laws and after
paying a nominal membership fee oftwo hundred rupees to the co-operative
housing society: .
Provided also thot the committee ofco-operative housing society shall issue
'no objection certificate' to the general power of attorney holder on his
application required for submission to get the property converted to free
hold from the lessor, within the period of thirty days ofits receipt, after
ensuring that there are no dues outstanding against the member or general
power ofattorney holder in the records ofthe co-operative housing society.'
All proposals as above, shall be approved by the general body in a meeting by a
majority ofnot less then two-thirds of the total membership of the co-operative
housing society.
[85]
7.
8.
Under Sec-96( I)
Under Sec-139
Where the Registrar has reason to believe that a co-operative society -
(a) has not commenced business within seven hundred seventy five days after
the date shown on its certificate of registration; or
(b) has not carried on business for two consecutive co-operative years;
2(ii) receives a reply from the co-operative society that it is not carrying on
business; or
Any member or creditor having interest in the affairs of the co-operative
society may seek ;nformation relating to any transaction of the co-operative
society and for that purpose may be provided a certified copy ofany document
within thirty days (rom the dote of receipt of application relating to such
transaction on payment a( such fee as may be specified.
PROVISIONS OF DELHI CO-OPERATIVE SOCIETIES ACT-2003
PRIOR TO
AMENDMENTS BEFORE 29-C!~-:LO12
9.
[86]
Under Sec-35( I0) -Icc) where the total amount af issued equity share capital held by the
Government is sixty per cent or more of the total issued share capital or the
Government has given loan or made advances to the co-operative society or
guaranteed the repayment ofprincipal and payment ofinterest on debentures or
bonds issued by the co-operative society or guaranteed the payment of principa{
and payment of interest on loan and advances to the co-operative society in
amaunt not less than sixty percent in the aggregate of the total amount so
borrowed by the co-operative society. three-fourth ofmembers of the committee
including the Chairman;
Provided that the right once accrued under this clause shall continue until the
percentage o( the amount in respect o( share contribution or guaranteed loan
goes down to less than fifty per cent;'
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About this act
- Jurisdiction
- Delhi
- Enactment date
- 2005-03-24
- Sections available
- Document reader
Commencement information from the source
01-04-2005
India Code, Government of India. Text fetched 10 Oct 2026. Check the linked official text and subsequent notifications when applying a provision.