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The Multi-State Co-Operative Societies Act, 2002
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  The Multi-State Co-Operative Societies Act, 2002 List of acts
 
  

THE MULTI-STATE CO-OPERATIVE SOCIETIES ACT, 2002

 

ACT NO. 39 OF 2002

 

[3rd July, 2002.]

  

 

 An  Act  to  consolidate and amend the law  relating  to  co-operative societies,  with  objects  not confined to one State and  serving  the interests  of  members  in  more than one  State, to facilitate the voluntary  formation  and democratic functioning of Co-Operaties  as people's  institutions based on self-help and mutual aid and to enable them  to  promote their economic and social betterment and to  provide functional autonomy and for matters connected therewith or incidental thereto.

 

BE it enacted by Parliament in the Fifty-third Year of the Republic of India as follows –



 
 

CHAPTER I

PRELIMINARY

 

1.         Short title, extent and commencement.

            (1)        This Act may be called the Multi-State Co-operative Societies Act, 2002.

            (2)        It extends to the whole of India.

            (3)       It shall come into force on such date as the Central Government may, by notification in the Official Gazette, appoint and different dates may be appointed for different provisions of this Act and any reference in any such provision to the commencemen of this Act shall be construed  as  a  reference  to the  coming  into  force  of  that provision.

 

2.         Application.

            This Act shall apply to –

            (a)        all co-operative societies, with objects not confined to one State which were incorporated before the commencement of this Act –

                        (i)         under the Co-operative Societies Act, 1912 (2 of 1912), or  

                        (ii)       under any other law relating to co-operative societies in  force in  any State or in pursuance of the Multi-unit Co-operative Societies Act,  1942 (6 of 1942) or the Multi-State Co-operative Societies  Act, 1984 (51 of 1984), and  the  registration  of which has not been  cancelled  before  such commencement; and

            (b)        all multi-State co-operative societies.



Definitions.

 
 

3.         In this Act, unless the context otherwise requires –

            (a)        "area of operation" means the area from which the persons are admitted as members;

            (b)        "board"  means the board of directors or the governing body of  a multi-State  co-operative  society, by whatever name called, to  which the direction and control of the management of the affairs  of  the society is entrusted;

            (c)        "bye-laws" means the bye-laws for the time being in force  which have been duly registered or deemed to have been registered under this Act and includes amendments thereto which have been duly registered or deemed to have been registered under this Ac ;

            (d)        "Central Registrar" means the Central Registrar of Co-operative Societies appointed under sub-section (1) of section 4 and includes any officer empowered to exercise the powers of the Central Registrar under sub-section (2) of that section;

            (e)        "Chief Executive" means a Chief Executive of a multi-State co-operative society appointed under section 51;

            (f)         "co-operative bank" means a multi-State co-operative society which undertakes banking business;

            (g)        "co-operative principles" means   the co-operative  principles specified in the First Schedule;

            (h)        "co-operative society" means a society registered or deemed to be registered  under  any law relating to co-operative societies for  the time being in force in any State;

            (i)         "co-operative year", in relation to any multi-State  co-operative society  or class of such societies, means the year ending on the 31st day of  March of the year and where the accounts of such  society  or class of such societies are, with the previous sanction of the Central Registrar, balanced on any other day, the year ending on such day;

            (j)        "Deposit Insurance Corporation" means the Deposit Insurance  and Credit  Guarantee  Corporation  established  under section  3  of  the Deposit Insurance Corporation Act, 1961 (47 of 1961);

            (k)        "federal co-operative"  means  a  federation  of   co-operative societies  registered under this Act and whose membership is available only to a co-operative society or a multi-State co-operative society;

            (l)         "general body", in relation to a multi-State co-operative society, means all  the members of that society and in relation to a  national co-operative society or a federal co-operative means all the delegates of member co-operative societies or delegate of   multi-State co-operative societies and includes a body constituted under the first proviso to sub-section (1) of section 38;

            (m)       "general meeting" means a meeting of the  general body of a multi-State co-operative society and includes special general meeting;

            (n)        "member"  means a person joining in the application for  the registration  of  a  multi-State co-operative society and  includes  a person  admitted  to membership after such registration in  accordance with the provisions of this Act, the rules and the bye-laws;

            (o)        "member   co-operative"  means  a  co-operative  society or  a multi-State  co-operative  society  which  is   member  of  a  federal co-operative;

            (p)        "multi-State co-operative society" means a society registered  or deemed  to  be  registered  under this Act  and  includes  a  national co-operative society and a federal co-operative;

            (q)        "multi-State co-operative society with limited liability" means a society having the liability of its members limited by its bye-laws to the  amount, if any, unpaid on the shares, respectively, held by  them or  to  such  amount as they may, respectively, thereby undertake  to contribute  to  the assets of the society, in the event of  its  being wound up;

            (r)         "national co-operative society" means a multi-State co-operative society specified in the Second Schedule;

            (s)        "notification" means a notification published in  the  Official Gazette;

            (t)         "officer" means a president, vice-president, chairperson, vice-chairperson,  managing director, secretary, manager, member of  a board, treasurer, liquidator, an administrator appointed under section 123  and  includes  any other person empowered under this Act  or  the rules  or the bye-laws to give directions in regard to the business of a multi-State co-operative society;

            (u)        "prescribed" means prescribed by rules;

            (v)         "Reserve Bank" means the Reserve Bank of India constituted under the Reserve Bank of India Act, 1934 (2 of 1934);

            (w)        "rules" means the rules made under this Act.

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Central Registrar and Registration of Multi-State Co-Operative

 
 

CHAPTER II

 

CENTRAL REGISTRAR AND REGISTRATION

OF MULTI-STATE CO-OPERATIVE SOCIETIES

 

4.         Central Registrar.

            (1)        The Central Government may appoint a person to be the Central Registrar of Co-operative Societies and may appoint such other persons as it may think fit to assist the Central Registrar.

            (2)        The Central Government may, by notification, direct that any power exercisable  by  the Central Registrar under this Act (other than  the power of registration of a multi-State co-operative society) shall, in relation  to such society, and such matters a may be specified in  the notification, be exercisable also by any other officer of the Central Government  or  of  a  State Government as may be  authorised by  the Central  Government  subject  to such conditions as may  be  specified therein:

                        Provided that no officer of a State Government shall be empowered to exercise such power in relation to a national co-operative society.

 

5.         Multi-State co-operative societies which may be registered.

            (1)        No multi-State co-operative society shall be registered under this Act, unless –

                        (a)        its main objects are to serve the interests of members  in  more than one State;  and

                        (b)        its bye-laws provide for social and economic betterment of its members through self-help and mutual aid in accordance with the co-operative principles.

            (2)        The word "limited" or its equivalent in any Indian language shall be suffixed to the name of every multi-State co-operative society registered under this Act with limited liability.



Application for registration.

 
 

6.         (1)        For the purposes of registration of a multi-State co-operative society under this Act, an application shall be made to the Central Registrar in such form and with such particulars as may be prescribed.

            (2)        The application shall be signed –

                        (a)        in the case of a multi-State co-operative society of which all the members  are  individuals, by at least fifty persons from each of  the State concerned;

                        (b)        in the case of a multi-State co-operative society of  which  the members are co-operative societies, by duly authorised representatives on behalf of at least five such societies as are not registered in the same State;  and

                        (c)        in the case of a multi-State co-operative society of which another multi-State  co-operative society and other co-operative societies are members, by duly authorised representatives of each of such societies:

                                    Provided that not less than two of the co-operative societies referred to in this clause, shall be such as are not registered in the same State;

                        (d)        in  the case of a multi-State co-operative society of which the members are co-operative societies or multi-State co-operative societies and individuals, by at least –

                                    (i)         fifty persons, being individuals, from each of the two States  or more;  and

                                    (ii)         one co-operative  society each from two States or more  or  one multi-State co-operative society.

            (3)        The application  shall  be accompanied by  four  copies  of  the proposed  bye-laws  of  the multi-State co-operative society  and  the persons  by  whom  or on whose behalf such application is  made  shall furnish  such  information  in regard to the society as  the  Central Registrar may require.

 

7.         Registration.

            (1)        If the Central Registrar is satisfied –

                        (a)        that the application complies with the provisions of this Act and the rules;

                        (b)        that the proposed multi-State co-operative society satisfies  the basic criterion that its objects are to serve the interests of members in more than one State;

                        (c)        that its bye-laws provide for social and economic betterment of its  members  through self-help and mutual aid in accordance with the co-operative principles;

                        (d)        that the proposed bye-laws are not contrary to the provisions  of this Act and the rules, he may register the multi-State  co-operative society and its bye-laws.

            (2)        The application for registration shall be disposed of by the Central Registrar within a period of four months from the date of receipt thereof by him.

            (3)        Where the Central Registrar refuses to register a multi-State co-operative society, he shall communicate, within a period of four months from the date of receipt of the application for registration, the order of refusal together with the reasons other for  to  the applicant or applicants, as the case may be:

                        Provided that no order of refusal shall be made unless the applicants have been given a reasonable opportunity of being heard: 

                        Provided further that if the application for registration is not disposed  of  within a period of four months specified in  sub-section (2) or the Central Registrar fails to communicate the order of refusal within  that  period,  the  application shall be deemed  to  have been accepted  for  registration and the Central Registrar shall issue the registration certificate in accordance with the provisions of this Act and the rules made there under.

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Registration certificate.

 
 

8.         Where a multi-State co-operative society is registered under this Act, the Central Registrar shall issue a certificate of registration signed by him, which shall be conclusive evidence that the society therein mentioned is duly registered under this Act, unless it is proved that the registration of the society has been cancelled.

 

9.         Multi-State co-operative society to be body corporate.

            (1)       The registration of a multi-State 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 t acquire, hold and dispose of property, both movable and  immovable,  enter  into contract,  institute and defend suits and other legal proceedings  and to  do  all  things  necessary for the purpose for which it is constituted, and shall, by the said name, sue o be sued.

            (2)        All transactions entered into in good faith prior to the registration of a multi-State co-operative society shall be deemed to be its transactions after registration for furtherance of the objects of its registration.

 

10.        Bye-laws of multi-State co-operative societies.

            (1)        Every multi-State co-operative society may make its bye-laws consistent with the provisions of this Act and the rules made there under.

            (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 the multi-State co-operative society;

                        (n)        the purpose for which the funds may be applied;

                        (o)        the manner of allocation or disbursement of net profits  of  the multi-State 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 board not exceeding twenty-one;

                        (u)       the tenure, of directors, chairperson and other office-bearers of the society, not exceeding five years;

                        (v)         the procedure for removal of members of the board and for filling up of vacancies;

                        (w)        the manner of convening board meetings, its quorum, number of such meetings in a year and venue of such meetings;

                        (x)        the frequency of board meetings;

                        (y)        the  powers and functions of the Chief Executive in  addition  to those provided under section 52;

                        (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 and to institute and defend suits and other legal proceedings on behalf of the society;

                        (zc)       the  terms on which a multi-State co-operative society may deal with persons other than members;

                        (zd)      the terms on which a multi-State co-operative society may associate with other co-operatives societies;

                        (ze)       the terms on which a multi-State co-operative society may deal with organisations other than co-operative societies;

                        (zf)        the  rights, if any, which the multi-State co-operative society may  confer  on any other multi-State co-operative society or  federal co-operative  and  the  circumstances under which such rights  may be exercised by the federal co-operative;

                        (zg)       the procedure and manner for transfer of shares and interest in the name of a nominee in case of death of a member;

                        (zh)      the  educational and training programmes to be conducted by  the multi-State co-operative society;

                        (zi)        the principal place and other places of business of multi-State co-operative society;

                        (zj)        the minimum level of services to be used by its members;

                        (zk)       any other matter which may be prescribed.

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Amendment of bye-laws of a multi-State co-operative society.

 
 

11.        (1)        No amendment of any bye-law of a multi-State co-operative society shall be valid, unless such amendment has been registered under this Act.

            (2)        The amendment to the bye-laws of a multi-State co-operative society shall be made by a resolution passed by a two-third majority of the members present and voting at general meeting of the society.

            (3)        No such resolution shall be valid unless fifteen clear days' notice of the proposed amendment has been given to the members.

            (4)        In every case in which a multi-State co-operative society proposes to amend its bye-laws, an application to register such amendments shall be made to the Central Registrar together with –

                        (a)        a copy of the resolution referred to in sub-section (2);

                        (b)        a statement containing the particulars indicating –

                                    (i)         the date of the general meeting at which the amendments  to  the bye-laws were made;

                                    (ii)         the number of days' notice given to convene the general meeting;

                                    (iii)        the total number of members of the  multi-State  co-operative society;

                                    (iv)        the quorum required for such meeting;

                                    (v)         the number of members present at the meeting;

                                    (vi)        the number of members who voted in such meeting;

                                    (vii)       the number of members who voted in favour of such amendments to bye-laws;

                        (c)        a  copy  of  the relevant bye-laws in force  with  the  amendment proposed to be made together with reasons justifying such amendments;

                        (d)        four copies of the text of the bye-laws incorporating therein the proposed  amendments  signed  by the officer duly authorised  in  this behalf by the general body;

                        (e)        a copy  of the notice given to the members and the  proposal  to amend the bye-laws; 

                        (f)         a certificate signed by the person who presided at  the  general meeting  certifying  that the procedure specified in sub-sections  (2) and (3) and the bye-laws had been followed;

                        (g)        any  other  particular  which  may be  required  by  the  Central Registrar in this behalf.

            (5)        Every such application shall be made within sixty days from the date of the general meeting at which such amendment to the bye-laws was passed.

            (6)        The procedure given in sub-sections (2) to (5) of this section shall apply to the amendment of the bye-laws of a co-operative society desiring to convert itself into a multi-State co-operative society as per the provisions of section 22.

            (7)        If, on receipt of application under sub-section (5), the Central Registrar is satisfied that the proposed amendment –

                        (a)        is not contrary to the provisions of this Act or of the rules;

                        (b)        does not conflict with co-operative principles;  and

                        (c)        will promote  the  economic  interests of  the  members  of  the multi-State co-operative society, he may register the amendment within a period of three months from the date of receipt thereof by him.

            (8)        The  Central  Registrar  shall   forward  to   the   multi-State co-operative  society a copy of the registered amendment together with a certificate signed by him within a period of one month from the date of  registration  thereof  and such certificate  shall  be  conclusive evidence that the amendment has been duly registered.

            (9)        Where the Central Registrar refuses to register an amendment of the bye-laws of a multi-State co-operative society, he shall communicate the order of refusal together with the reasons therefore to the Chief Executive of the society in the manner pres ribed within fifteen days from the date of such refusal:

                        Provided that if the application for registration is not disposed of within a period of three months specified in sub-section (7) or the Central Registrar fails to communicate the order of refusal within that period, the application shall be deemed to ha e been accepted for registration and the Central Registrar shall issue registration certificate in accordance with the provisions of this Act.

 

12.        When amendment of bye-laws comes into force.

            An amendment of the bye-laws of a multi-State 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.

 

13.        Change of name.

            (1)        A multi-State 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 multi-State co-operative society or of any of its members or past members, an any legal proceedings which might have been continued or commenced by or against the multi-State co-operative society by its former name, may be continued or commenced by or against its new name.

            (2)        Where a multi-State co-operative society changes its name, the Central Registrar shall enter the new name on the register of multi-State co-operative society in place of the former name and shall amend the certificate of registration accordingly.

 

14.        Change of address.

            Every multi-State co-operative society shall have a principal place of business and an address registered in the manner prescribed to which all notices and communications may be sent.

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Publication of name by multi-State co-operative society.

 
 

15.        Every multi-State co-operative society –

            (a)        shall paint or affix its name and the address of its registered office and keep the same painted or affixed, on the outside of every office or place in which its business is carried on, in conspicuous position, in letters easily legible; and if the characters employed therefore are not those of the language, or of one of the languages in general use in that locality, also in the characters of that language or of one of those languages;

            (b)        shall have its name engraven in legible characters on its seal; and

            (c)        shall  have  its name and the address of  its  registered  office mentioned  in  legible characters in all its business letters, in  all its bill heads and letter paper, and in all its notices and other official  publications; and also have its name so mentioned in all bills of  exchange, hundies, promissory notes, endorsements, cheques and orders for money or goods purporting to be signed by or on behalf of the multi-State co-operative society, and in all bills of parcels, invoices, receipts and letters of  credit  of  the   multi-State co-operative society.

 

16.        Liability.

            (1)        No multi-State co-operative society with unlimited liability shall be registered after the commencement of this Act:

                        Provided that where a multi-State co-operative society with unlimited liability was functioning before the commencement of this Act, such a society shall exercise the option within a period of one year from such commencement either to continue to function as such or to convert itself into a multi-State co-operative society with limited liability by following the procedure specified in sub-sections (2) to (4).

            (2)        Subject to the provisions of this Act and the rules, a multi-State co-operative society may, by an amendment of its bye-laws, change the extent of its liability.

            (3)        When a multi-State co-operative society has passed a resolution to change  the  extent of its liability, it shall give notice thereof in writing to all  its  members  and  creditors,  and,  notwithstanding anything  contained  in the bye-laws or contract to the contrary,  any member or creditor shall, during the period of one month 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.

            (4)        Any member or creditor who does not exercise his option within the period specified in sub-section (3) shall be deemed to have assented to the change.

            (5)        An amendment of a bye-law of a multi-State co-operative society changing the extent of its liability shall not be registered or shall not 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 (3) within the period  specified  therein have been met in full or otherwise satisfied.

   

17.        Amalgamation or transfer of assets and liabilities, or division of multi-State co-operative societies.

            (1)        A multi-State co-operative society may, by a resolution passed by a majority of not  less  than two-thirds  of  the members, present and voting at general meeting of the society held for the purpose –

                        (a)        transfer its assets and liabilities in whole or in part  to  any other multi-State co-operative society or co-operative society;

                        (b)        divide itself into two or more multi-State co-operative societies;

                        (c)        divide itself into two or more co-operative societies.

            (2)        Any two or more multi-State co-operative societies may, by a resolution passed by a majority of not less than two-thirds of the members present and voting at a general meeting of each such society, amalgamate themselves and form a new multi-State co-operative society. 

            (3)        The resolution of a multi-State co-operative society under sub-section (1) or sub-section (2) shall contain all particulars of the transfer or division or amalgamation, as the case may be.

            (4)        When a multi-State co-operative society has passed a resolution under sub-section (1) or sub-section (2), it shall give notice thereof in writing to all the members and creditors, and, notwithstanding anything contained in the bye-laws or contract to the contrary, any  member  or creditor shall, during the period of one month 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)        A resolution passed by a multi-State co-operative society under  this section shall not take effect until the assent thereto  of all the members and creditors has been obtained.

                        (b)        The multi-State co-operative society shall make arrangements for meeting in full or otherwise satisfying all claims of the members and creditors who exercise the option within the period specified in sub-section (4).

            (7)        On receipt of an application for the registration of new societies formed  by  division  in accordance with the resolution  passed  under sub-section (1) or of a new society  formed  by  amalgamation in accordance with the  resolution passed under sub-section  (2),  the Central Registrar, on being satisfied that the resolution has  become effective under  sub-section  (6) shall, unless for  reasons  to  be recorded in writing he thinks fit to refuse so to do, register the new society or societies, as the case may be, and the bye-laws thereof. 

            (8)        On the issue of an order under sub-section (7), the provisions of section  21  shall,  so  far  as may  be,  apply  to  the  multi-State co-operative  society  so  divided  or  the  multi-State  co-operative societies so amalgamated.

        &n