THE PUNJAB CO-OPERATIVE SOCIETIES ACT, 1961

Arrangement of Sections

 

Section

Contents

CHAPTER-I PRELIMINARY

1

Short Title and Commencement

2

Definition

CHAPTER –II

REGISTRATION OF CO-OPERATIVE SOCIETIES

3

Registrar and other officers and their power

4

Societies which may be registered

5

Restrictions of Registration

6

Restrictions on holding of shares

7

Application for registration

8

Registration

9

Registration Certificate

10

Amendment of bye-law of a Co-operative Society

10A

Power to direct amendment of bye-laws of Co-Operative Society

11

Change of name

12

Change of liability

13

Amalgamation, transfer of assets and liabilities and division

14

Cancellation of registration certificates of Co-operative Societies in certain cases.

CHAPTER III

MEMBER OF CO-OPERATIVE SOCIETIES AND THEIR RIGHTS AND LIABILITIES

15

Person who may become members

15A

Restrictions on individuals in becoming members of certain Co-operative Societies.

15B

Provision for admission as members in the case of certain societies

16

Nominal or associate members

17

Member not to exercise rights till due payment made

18

Votes of members

19

Manner of exercising vote

20

Restriction on transfer of shares of interest

21

Transfer of interest on death of member

22

Liability of past members and estates of deceased member

CHAPTER IV

MANAGEMENT OF CO-OPERATIVE SOCIETIES

23

Final authority in a Co-operative Society

24.

Annual general meeting

25

Special general meeting

26.

Election and nomination of members of committees

26A

Co-option of members

26B

Restriction on membership, etc

27.

Removal of Suspension of Committee of member thereof

28

Securing possession of records etc.

29

Acts of Co-operative Societies not to be invalidates by certain defects

CHAPTER –V

PRIVILEGES OF CO-OPERATIVE SOCIETIES

30.

Co-operative Societies to be bodies corporate

31.

First Charge of Co-operative Societies in certain assets

32

Charge on immovable property of members borrowing loans from certain Societies

33.

Charge and set off in respect of share of contribution or interest of members

34.

Chare or contribution or interest not liable to attachment

35.

Register of members

36.

Admissibility of copy of entry as evidence

37.

Exemption from compulsory registration of instruments

38.

Exemption from certain taxes, fee and duties

39

Deduction from salary to meet Co-operative societies claim

In certain cases

40

Other forms of State aid to So-operative Societies

CHAPER- VI

PROPERTIES AND FUNDS OF CO-OPERATIVE SOCIETIES

41.

Funds not to be divided by way of profit

42.

Contribution to Charitable purpose

43.

Contribution to Co-operative Education Fund

44.

Investment of funds

45.

Restrictions of loans

46.

Restriction on borrowings

47.      

Restrictions on other transactions with non members

CHAPTER –VII

AUDIT INQUIRY, INSPECTION AND SURCHARGE

48.

Audit

49.

Inspection

50.

Inquiry by Registrar

51.

Inspection of books of indebted Societies

52.

Costs of inquiry

53.

Recovery of costs

54

Surcharge

CHAPTER – VIII

SETTLEMENT OF DISPUTES

55.

Disputes which may be referred to arbitration

56.

Reference of disputes to arbitration      

CHAPTER-IX

WINDING UP OF CO-OPERATIVE SOCIETIES

57.

Windings up of Co-operative Societies.

58.

Liquidator

59.

Power of Liquidator

60.

Priority of contributions assessed

61

Power of Registrar to cancel registration of a Co-operative Societies

CHAPTER –X

EXECUTION OF AWARDS, DECREES ORDERS AND DECISIONS

62

Enforcement of change

63

Execution of order etc.

64

Execution of orders of liquidator

65

Attachment before award

66

Registrar or person empowered by him to be civil court for certain purpose

67       

Recovery of sums due to Government

67A

Recovery of certain loans as arrears of land revenue

CHAPTER –XI

APPEALS AND REVISION

68.

Appeals

69.

Revision

70.

Interlocutory orders

CHAPTER-XI-A

CO-OPERATIVE BANK

70A

Orders for winding up reconstruction, suppression of Committee etc. of Co-operative  Bank

CHAPTER –XII

OFFENCE AND PENALTIES

71.      

Offences

72.

Congnizance of offences

73.

Address of Societies

74.

Copy of Act, rules and bye-laws, etc to be open to inspection

75.

Prohibition against the use of word “Co-operative”

76.

Powers to exempt societies from conditions as to registration

77.

power to exempt

78

Liquidator to be public servant

79

Notice necessary in suits

80

Companies Act not to apply

81.

Savings of existing societies

82.

Bar of jurisdiction of courts

83.

Power of civil courts

84.

Indemnity

84A

Constitution of Common Cadre of employees of certain societies

84B

Dearness Allowance

85.

Rules

86.

Repeal and savings

 

                                                           

 

THE PUNJAB CO-OPERATIVE

SOCIETIES ACT, 1961

Punjab Act No. 25 of 1961

As Amended by the Punjab Co-operative Societies (Amendment)

Act 1993 (Punjab Act 19 of 1993)

 

Also as amended by Punjab Act No. 15 of 1994

 

[Received the assent of the President of India on the 22nd June, 1961 and first published for general information in the Punjab Government Gazette (Extraordinary), Legislative Supplement, of the 8th  July, 1961]

An Act to consolidate and amend the law relating to Co-operative Societies in the State of Punjab.

Be it enacted by the legislature of the state of Punjab in the Twelfth year of the Republic of India as follows:-

STATEMENT OF OBJECTS AND REASONS:

In pursuance of the policy of the government of India to simplify co-operative law and procedure in order to remove all bottlenecks in the way of development of co-operative movement in the country, it has become necessary and incumbent to amend the law regarding co-operative societies in the state. In this bill the approach has been to make the law as simple as possible. The important provisions, such as relating to change of liability, amalgamation of societies, splitting up of societies, settlement of disputes and winding up of societies, etc. were found to be of a dilatory and complicated nature, and,   therefore, creating problems in the day to day working of the operative societies. Special care has, therefore, been taken to cut out all unnecessary delays particularly in registration of societies and the provisions to this effect have been simplified.  Another approach influencing a change is to make the Co-operative Law comprehensive and growth of the co-operative societies in the various fields of economic activity, more difficult and complicated forms of cooperative societies are to spring up as compared to cooperative credit societies.  To meet the situation a number of new provisions have been made in the bill. The notable changes, inter alia pertain to condition of registration, qualification of members, management of societies, nominees of Government on the committees, suppression  of  committees, charging of immovable property of members, borrowing loans from certain societies, deduction from salary to meet the society’s claim in certain cases. cooperative Education Fund, audit, surcharges, appeals, offences and penalties etc.  (Vide Punjab Government Gazette Extraordinary, dated 24th  October, 1960,  p.040.

 

 

CHAPTER 1

PRELIMINARY

SECTION-1

 

1.      Short Title Extent and Commencement. - (1) This act may be called the Punjab Co-operative Societies Act, 1961.

 

2.      It extends to the whole of the State of Punjab.

 

3.      It shall come into force on such date as the Government may, by notification, appoint.

 

SECTION-2

 

2.         Definitions . - In this Act, unless the context otherwise requires.

 

*(a)     “associate member” means a member who holds jointly a share of a co-operative society with others but whose name does not stand first in the share certificate.

 

*(aa)    “bye-laws” means the registered bye laws for the time being in force;

(b)         “committee” means the governing body of a co-operative society ; by whatever name  called, to which the management of the affairs of the society is entrusted;

 

(c)         “co-operative society” means a society registered or deemed to be registered under this act;

 

(d)         “co-operative society with limited liability” means a co-operative society the liability of  whose members is limited by its bye-laws  to the amount if any, unpaid on the shares individually held by them or to such amount as they may individually undertake to contribute to the assets of  the society, in the event of  its being wound up;

 

(e)         “Co-operative society with limited liability” means a co-operative society the liability of whose members is unlimited for the purpose of contributing jointly and severally to any deficiency in the assets of the society in the event of its being wound up.

 

(f)           “Government” means Government of the State of Punjab:

 

(g)         “members” means a person joining in the application for the registration of a cooperative 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 and an associate member and the Government when it subscribes to the share-capital of a society.

 

*(gg) “net profits” means profits after deduction of establishment charges, contingent charges, interest payable on loans and deposits, audit fee and such other sums as may be prescribed:

*(ggg) “nominal members” means a person admitted to membership as such after registration in accordance with the bye-laws:

(h)         “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 the rules or the bye-laws to give directions in regard to the business of a cooperative society:

 

(i)           “prescribed” means prescribed by rules:

 

(j)           “Registrar” means a person appointed to perform the functions of the Registrar of Cooperative Societies under this Act *.

 

(k)         “producers society” means a society formed with the object of producing and disposing of goods and commodities as a collective property of its members, and includes a society formed with the object of the collective disposal of the labour of its members:

 

(l)             “rules” means the rules made under this Act.

 

CHAPTER II

REGISTRATION OF CO-CPERATIVE SOCIETIES

 

SECTION – 3

 

3        Registrar and other Officers and their powers:- 1(1) The Government may only   appoint a person to be Registrar of Cooperative Societies for the State.

 

(2)                 To assist the Registrar in his functions under this Act the Government may appoint such number of Additional Registrars, Joint Registrars, Deputy Registrars, Assistant Registrars and other person with such designations as it may think fit.

 

(3)                 The Government may, by general or special order, confer any person appointed under sub-section (2), all or any of the powers of the Registrar under this Act.

 

(4)                 Every person appointed under sub-section (2) shall exercise his Powers subject to the general superintendence and control of the Registrar.

 

2(5)      Notwithstanding anything contained in this Act, where any power of the Registrar is exercised by any person by virtue of the order issued by the Government under sub-section (3), the order passed or decision made by such person shall, for the purpose of appeal, be deemed to be the order of decision of that person and not of the Registrar.

 

4.      Societies which may be Registered :- (1) Subject to the provisions hereafter contained, a society which has as its object the promotion of the economic interest of its members in accordance with cooperative principles, or a society established with the object of facilitating the operations of such a society established with the object of facilitating the operations of such a society, may be registered under this Act with or without limited liability:

 

Provided that unless Government by general or special order wise directs. The liability of the society of which a member is a cooperative society shall be limited.

 

(2)               The word “limited” or its equivalent in any Indian language shall be the last word in the name of every society registered under this Act with limited liability.

 

SECTION - 5

 

5.      Restrictions on Registration:- No society, other than a society of which a member is a cooperative society, shall be registered under this Act, unless it consists of at least ten individuals above the age of eighteen years.

 

SECTION - 6            

 

*6        Restrictions on holding of shares. – 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, as may be prescribed which in no case shall exceed one-tenth of the share capital, or, have or claim any interest in the shares of such a co-operative society exceeding fifty thousand rupees, whichever is less.”

 

*Provided that in the case of a milk producers cooperative society or a society engaged in the marketing of such other perishable commodity as may be notified by the state government, from time to time, in this behalf ( hereinafter referred to as society dealing in notified commodity’) registered after the commencement of the Punjab cooperative societies (amendment) act, 1978 no member shall have or claim any interest in the shares of such society exceeding one thousand rupees.

 

SECTION – 7

 

7                     Application for Registration : - 1 ) for purposes of registration an application shall be made to the registrar.

(2)        the application shall be signed,-

 

(a)                in the case of a society of which no member is a co-operative society by at least ten persons qualified in accordance with the requirements of section 5; and

 

(b)               in the case of a society of which a member is a cooperative society, by a duly authorised person on behalf of every such society and where all the member of the society are not co-operative societies by ten other members, or when there are less than ten other member, by all of them

 

SECTION – 8

 

(8)               Registration – (1) if the Registrar is satisfied –

 

(a)                that the application complies with the provisions of the act and the rules,

 

(b)               that the objects of the proposed 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; and

 

(d)        that the proposed society has reasonable chances of success, the Registrar may register the society, and its bye-laws.

 

(2)               When the registrar refuses to register a society, he shall communicate the order of refusal, together with the reasons therefor, to such of the applicants as may be prescribed

 

(3)               The application for registration shall be disposed of by the registrar within a period of two months from the date of receipt thereof by him.

 

SECTION – 9

 

9.                  Registration Certificate : Where a Society is registered under this Act, the Registrar shall issue a certificate of registration singed by him which shall be conclusive evidence that the co-operative society therein mentioned is duly registered under this Act.

 

SECTION – 10

 

10.              Amendment of Bye-Laws of a Cooperative Society :- (1) No amendment of any bye-laws of a cooperative society  shall be valid unless such amendment has been registered under this Act.

 

(2)               Every proposal for such amendment shall be forwarded to the Registrar and if the Registrar is satisfied that the proposed amendment :-

 

(i)                  is not contrary to the provisions of this Act and the rules

 

(ii)                does not conflict with cooperative principles, and

 

(iii)               will promote the economic interests of the members of the society, he may register the amendment.

 

(3)               The Registrar shall forward to the 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 the bye-laws of a cooperative society, he shall communicate the order of refusal together with reasons therefor, to the society in the manner prescribed.

 

*10-A. Power to direct amendment of bye-laws of cooperative society. - (1) If in the opinion of the Registrar, an amendment of the bye-laws of a cooperative society is necessary or desirable in the interest of such a society or of the cooperative movement, or to bring such bye-laws in conformity with any provision of the Act of rules made thereunder he may by notice in writing. call upon the society to make such amendment within a period of three months of the date of service of the notice.

 

(2)    If  within the period specified in sub-section(1) the co-operative society fails to make such as amendment the Registrar may, after giving the society an opportunity of making its representation, register the amendment and issue to the society a copy of the amendment together with a certificate signed by him.

 

(3)    The certificate issued under sub-section (2) shall be conclusive evidence that amendment has been  duly registered and such amendment shall have the same effect as an amendment registered under Section 10]

 

 

SECTION – 11

 

11               Change of Name.- (1) A cooperative society may, by an amendment of its bye-laws, change its name but such change shall not effect any right of obligation of the society or of any of its members or past members, and any legal proceedings pending may be continued by or against the society under its new name.

 

(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.

 

SECTION – 12

 

Change of liability.- (1) subject to the provisions of this Act and the rules, a cooperative society may, an amendment of its bye-laws, change the form or extent of its liability.

 

(2)                When a cooperative 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-law or contract to the contrary, any member or creditor shall, during a 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.

 

(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-law of a cooperative society changing the form or extent of its liability shall not be registered to taken 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 have been met in full.

 

SECTION – 13

 

13.                       Amalgamation, transfer of assets and liabilities and division of cooperative societies – (1) A cooperative society may with the previous approval of the Registrar and by a resolution passed by a two third majority of the members present and voting at a general meeting of the society;-

 

*(a)       transfer its asset and liabilities in whole or in part to another cooperative society provided the cooperative society to which the assets and liabilities are to be transferred also passes  resolution in the aforesaid manner to accept such assets and liabilities in whole or in part, as the case may be;

 

(b)       divide itself into two or more cooperative societies

 

(2)              Any two or more cooperative societies may, with the previous approval of the registrar and by a resolution passed by a two-thirds majority of the members present and voting at a general meeting of each such society, amalgamate themselves and form a new cooperative society.

 

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

(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 not withstanding any 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 proposal contained in the resolution.

 

(6)              A resolution passed by a cooperative society under this section shall not take effect until, either-

 

(a)              the assent thereto of all the members and creditors has been obtained; or

 

(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 any thing 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.

 

*(8)  Where the Registrar is satisfied that it is necessary in the interest

 

 of the co-operative society or co-operative societies that –

 

(i)                  any co-operative society be divided  to form  two or more cooperative societies; or

(ii)                One or more coop. Societies be amalgamated to form a new coop society; or

 

(iii)               two or more co-operative societies be amalgamated to form a new cooperative society, then notwithstanding anything herein before contained, the Registrar may, after consulting the financing institution if any provide for-

 

(a)                    the division of that co operative society into two or more co-operative societies ; or

 

(b)                    the amalgamation of the society or societies-

 

(i)                     With any other co-operative society or

 

(ii)                   to form a new co-operative society, with such constitution including representation on the committee, property rights, interests, liabilities, duties and obligations, as may be specified in the order.

 

(9)               No order shall be made under sub-section (8), unless-

 

(a)                  a copy of the  proposed order has been sent under certificate of posting to the society or societies concerned and the creditors;

 

(b)                 The Registrar has considered the objections received from the society or societies concerned or form any member or creditor of such society or societies within such period, being not less than fifteen days from the date of posting of the proposed order, as may be specified by the Registrar in this behalf in the  proposed order.

 

(10)           The Registrar may, after considering the objections referred to in sub-section (9), make such modification in the proposed order as he may deem fit and the order may contain such incidental, consequential and supplement provisions as the Registrar may deem necessary to give effect to the same.

 

(11)            A member or creditor who had objected to the proposed order under sub-section (9), shall have the option of withdrawing his share, deposits or loans, as the case may be, on an application which shall be made to the society to which his shares, deposit or loan stands allocated by virtue of the order under sub-section (8), within a period of thirty days of the date of such order.

 

(12)            Save as provided in sub-section (11), the order passed by the Registrar under sub-section (8) shall be final and where as such an order involved the transfer of any assets and liabilities the same 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 society in which these are vested under that order without any further assurance.

 

SECTION – 14

 

14.                       Cancellation on registration certificates of co-operative societies in certain cases (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 13, the registration of the first mentioned co-operative society shall stand cancelled and society shall be deemed to have been dissolved and shall cease to exist as a corporate body.

 

*[1-A]    Where one or more co-operative societies are amalgamated with any other co-operative society by an order sub-section (8) of  section 13, the registration of the co-operative society or co-operative societies as the case may be, amalgamated shall stand cancelled and the society or societies whose registration stands so cancelled shall be deemed to have been dissolved and shall cease to exist as a corporate body on the date of the aforesaid order and the members thereof shall become the members of the other co-operative society.

Where two or more co-operative societies are amalgamated into a new co-operative society in accordance with provisions of section 13, the registration of each of the amalgamated societies shall stand cancelled on the  registration of the new society, and each 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 13, the registration of that society shall stand cancelled on the registration of the new societies, and that societies shall be deemed to have been dissolved and shall cease to exist as a corporate body.

 

(4)The amalgamation and splitting of co-operative societies shall not in any manner whatsoever effect any right or obligation of the resulting co-operative society or societies or render defective any legal proceedings by or against the co-operative society or societies, and any legal proceedings that might have been continued or commenced by or against the co-operative society or the societies, as the case may be, before  the amalgamation or splitting, may be continued or commenced by or against the resulting cooperative society or societies.

 

CHAPTER III

Members of Co-operative Societies and their Right and Liabilities.

 

Section – 15

 

15.                       Persons who may become members- No person shall be admitted as members of a Co-operative society except the following, namely:-

 

(a)                               an individual competent to contract under Section 11 of the Indian contract Act, 11872 (9 of 1872);

(b)                              any other co-operative society;

 

(c)                               any Government ; and

 

(d)                              such class or classes of association of persons as may be notified by the government  in this behalf.