Final Act (1).doc

8/14/2019 Final Act (1).doc

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An Act to provide for the voluntary formation of Co-operative Societies as apolitical, accountable, competitive,self-reliant business enterprises based on thrift, self-helpand mutual aid and owned, managed and controlled bymembers of common economic interests/needs for theireconomic and social betterment and to provide forfunctional autonomy and for matters connected therewithand incidental thereto.

CHAP !" - #Preliminary

Section $% Preamble

In order to facilitate the voluntary formation and democraticfunctioning of Co-operative Societies as peoples institutions basedon self-help, thrift and mutual aid and enable people to promotetheir economic and social betterment, the legislature of the State ofAndhra Pradesh, in the Sixty First year of the epublic of India, dohereby, enact as follo!s"

Section &% State Policy on Co-operatives

It shall be the policy of the State to promote Co-operativeSocieties as instruments of e#uity, social $ustice and economicdevelopment in fulfillment of the %irective Principles of State Policyas enshrined in the Indian Constitution&

'he role of the (overnment shall be mainly limited to enactingsuitable legislation providing for timely conduct of elections, audit ofthe Co-operative societies and incorporate measures to safe-guardthe interests of the members and other sta)e-holders in them&

'he State shall not interfere in the internal management andoperation of the Co-operative Society& 'o!ards this end, the stateshall recognise Co-operative Societies as democratic institutionso!ned, managed and controlled by members for their economic andsocial betterment, operating their business based on mutual aid andCo-operative Principles&

Section '% Co-operative Principles

Principles

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The co-operative principles are guidelines by which co-operatives put theirvalues into practice.

$st Principle% (oluntary and )pen *embership

Co-operatives are voluntary organi*ations, open to all persons able touse their services and !illing to accept the responsibilities ofmembership, !ithout gender, social, racial, political or religiousdiscrimination&

&nd Principle% +emocratic *ember Control

Co-operatives are democratic organi*ations controlled by their

members, !ho actively participate in setting their policies and ma)ingdecisions& +en and !omen serving as elected representatives areaccountable to the membership& In primary co-operatives membershave e#ual voting rights one member, one vote and co-operatives atother levels are also organi*ed in a democratic manner&

'rd Principle% *ember !conomic Participation

+embers contribute e#uitably to, and democratically control, the

capital of their co-operative& At least part of that capital is usually thecommon property of the co-operative& +embers usually receive limitedcompensation, if any, on capital subscribed as a condition ofmembership& +embers allocate surpluses for any or all of the follo!ingpurposes" developing their co-operative, possibly by setting upreserves, part of !hich at least !ould be indivisible. benefitingmembers in proportion to their transactions !ith the co-operative. andsupporting other activities approved by the membership&

th Principle% Autonomy and #ndependence

Co-operatives are autonomous, self-help organi*ations controlled bytheir members& If they enter into agreements !ith other organi*ations,including governments, or raise capital from external sources, they doso on terms that ensure democratic control by their members andmaintain their co-operative autonomy&

th Principle% !ducation, raining and #nformation

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Co-operatives provide education and training for their members,elected representatives, managers, and employees so they cancontribute effectively to the development of their co-operatives& 'heyinform the general public - particularly young people and opinionleaders - about the nature and benefits of co-operation&

th Principle% Co-operation among Co-operatives

Co-operatives serve their members most effectively and strengthen theco-operative movement by !or)ing together through local, national,regional and international structures&

th Principle% Concern for Community

Co-operatives !or) for the sustainable development of theircommunities through policies approved by their members&

Section % Co-operative (alues

(alues

Co-operatives are based on the values of self-help, self-responsibility, democracy, e#uality, e#uity and solidarity& In thetradition of their founders, co-operative members believe in theethical values of honesty, openness, social responsibility and caringfor others&

Section % Short title, e0tent and commencement

/ 'his Act may be called A&P& Co-operativeSocieties Act, 01/1&

0 It extends to the !hole of the State of AndhraPradesh&

2 It shall come into force on such date the(overnment may, by notification in the A&P& (a*ette,appoint and from such date the Andhra Pradesh Co-operative Societies Act, /345 and the ules framedthereunder and the Andhra Pradesh +utually Aided

Co-operative Societies Act, /336 shall stand repealed&

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Section % Saving of e0isting Co-operative Societies

/ 7very co-operative society !hich has been registered underthe A&P& Co-operative Societies Act 8 of /345 or under the A&P&+utually Aided Co-operative Societies act of /336 shall bedeemed to have been registered under the corresponding provisionsof this Act and byela!s framed thereof so far as the same are notinconsistent !ith the express provisions of this Act and continue inforce until altered or rescinded&

0 All appointments and orders made, notifications and noticesissued and suits and other proceedings instituted under the abovesaid Acts, shall so far as they are consistent !ith the provisions ofthis Act be deemed to have been respectively made, issued, and

instituted under this Act&

2 All guarantees given by the government for the debenturesfloated by the A&P& State Co-operative 9an) and its predecessorsand other guarantees !here excess loan has been issued over andabove the entitlement on the basis of value of land mortgaged, areconfirmed and the role, functions and po!ers of the 'rustee and theboard of A&P& State Co-operative 9an) in regard to issue ofdebentures and the charge accruing in favour of debenture-holderson mortgages and assets transferred to the said 9an) and thepriority of mortgages in favour of Financing 9an): PrimaryAgricultural Co-operative Society over any claim of the (overnmentand right of the A&P& State Co-operative: Financing 9an): PrimaryAgricultural Co-operative Society to purchase mortgaged propertyshall stand including the provisions in the 'rust %eed executedbet!een the A&P& State Co-operative and the 'rustee, till all thedebentures in circulation as on date are redeemed&

5 7very co-operative society registered under this Act shall!ithin a period of one year from the date of coming into force of thisAct delete or amend such byela!s, as are inconsistent !ith the

provisions of this Act and ma)e such further byela!s as may benecessary having regard to the provisions of this Act&

Section % +efinitions

In this Act, unless the context other!ise re#uires"

/ ;Act< means the A&P& Co-operative Societies Act 01/1.

0 ;Active +ember< is one !ho participates in the affairsof the Co-operative society using its services asprescribed in the byela!s of the Co-operative Society.

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2 ;Apex Co-operative Society< means a society !hosearea of operation extends to the !hole of State and!hich has as its principal ob$ect the promotion ofprincipal ob$ects of its affiliated societies and theprovision of facilities for their operations !ithout runninginto competition inter-se&

5 ;Associate member< means an individual or informalgroup !or)ing for similar ob$ective of a society of !hichassociate membership is sought for, provided suchmember shall not be entitled to vote or to any share inthe profits or assets of the society provided this shall notbe made applicable to Agricultural Co-operative CreditSocieties !hich are governed by special provisions inChapter =>I&

6 ;area of operation< means the area from !hich themembership is dra!n irrespective of the geographicalboundaries of business operations.

4 ;board< means the board of directors or the governingbody of a Co-operative society, by !hatever namecalled, to !hich the direction of the affairs of thesociety is entrusted as per the byela!s.

8 ;bye-la!s< means the bye-la!s of a co-operative societyas originally registered or deemed to have beenregistered under this Act for the time being in forceand includes amendments thereto !hich have been dulyregistered or deemed to have been registered underthis Act.

? ;Chief 7xecutive< means an individual in a Co-operativeSociety in paid or honorary capacity, nominated orelected or appointed by the board of the Co-operativeSociety from among members or directors or others, inaccordance !ith the bye-la!s, !ho is the person to sueor to be sued on behalf of the Co-operative society and!ho performs such functions sub$ect tosuperintendence, control and direction of 9oard and hassuch responsibilities as are specified in this Act and thebyela!s and as are assigned by the 9oard.

3 ;Chief Promoter< means a person !ho is chosen by theapplicants to the registration of a co-operative society

from among themselves and !ith !hom the egistrar

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may correspond on the application&

/1 ;common need:interest< means that specific economicneed: interest !hich is common to all the applicants!ho have $oined the application for registration of a co-operative society&

// ;Co-operative Credit Society< means the AndhraPradesh State Co-operative 9an) @APC 9B, the %istrictCo-operative Central 9an) @%CC9B and the PrimaryAgricultural Co-operative Credit Society @PACSB& APrimary Agricultural Co-operative Credit Society includesFarmers Service Co-operative Society @FSCSB, Co-operative ural 9an) @C 9B, arge Si*ed Co-operativeSociety @ SCSB or any other Co-operative Credit Societyprimarily dealing !ith agricultural credit, allied activitiesand rural enterprises at primary level.

/0 ;Cooperative Principles< means the principles asapproved by the International Cooperative Alliance andspecified in section 2 of this Act&

/2 ;Co-operative Society< means an autonomousassociation of persons united voluntarily to meet theircommon needs and aspirations through a $ointly-o!ned

and democratically controlled enterprise and adheringto the Co-operative Principles and values, registered ordeemed to be registered under this Act. or under anyla! relating to co-operative societies for the time beingin force in any State or the Centre.

/5 ;Core Services< means those central services providedto members through !hich the Co-operative societyintends to meet that economic need common to allmembers for the fulfillment of !hich the Co-operativesociety !as established and the fulfillment of !hich isexpected to result in the economic and socialbetterment of members including value added services&

/6 ;Creditor< means a person or a body corporate orinstitution to !hom a debt is o!ed.

/4 ;%ecree< means any decree of a civil court and includesany decision or order or a!ard referred to in Section

81 of the Act&

/8 ;%ecree holder< means any society or person including

the (overnment holding a decree&

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/? ;%efault< means failure on the part of a Co-operativesociety, member or other person, to repay to thefinancing ban) or any other Co-operative society a loanor any other amount due to it !ithin the time limitsfixed for repayment, or return to the Co-operativesociety !ithin the time fixed, the finished goods inrespect of !hich ra! material is advanced or to )eepany other obligation for the fulfillment of !hich a timelimit has been specified in the byela!s.

/3 ;%efaulter


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purpose of ensuring timely conduct of, transparent andfair elections to the co-operative societies in the State.

08 ;Federal Co-operative society< means a co-operativesociety !hose membership is available only to Co-operative Societies.

0? ;Financial year< means the period commencing on thefirst day of April of any year and ending !ith the 2/ st dayof +arch of the succeeding year.

03 ;Financing 9an)< means a Co-operative society themain ob$ect of !hich is to assist any affiliated or otherCo-operative society by giving loans or advancingmoneys. and includes any scheduled ban) as defined inthe eserve 9an) of India Act /325 @Central Act 0 of/325B and such other body corporate or financialinstitution as may be notified by the (overnment fromtime to time, !hich gives financial or other aid to a co-operative society.

21 ;Form< means a Form appended to this Act.2/ ;Functional %irector< means an officer other than

+anaging %irector: Chief 7xecutive of the ran) of

%irector or above allo!ed to be member of the 9oard ofa Co-operative Society as per its bye-la!s, but shall nothave voting rights in the affairs of co-operative Societyexcept in matters !hich relate to his speciali*ation foroffering advice.

20 ;(eneral 9ody< in relation to a Co-operative societymeans all the members of that society and in relationto a federal Co-operative society means all thedelegates of the member Co-operative societies andincludes a smaller body elected or selected inaccordance !ith the bye-la!s to exercise such po!ersof the general body, as may be specified therein.

22 ;(eneral +eeting< means a meeting of the general bodyof the Co-operative society and includes specialgeneral meeting .

25 ;(overnment< means the State (overnment of AndhraPradesh.

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26 ;Dudgment %ebtor< means any Co-operative societyagainst !hich or any person against !hom a decree hasbeen obtained.

24 ;+ember< means a person admitted to membershipafter registration in accordance !ith the provisions ofthis Act: byela!s.

28 ;EA9A %< means the Eational 9an) for Agriculture ural %evelopment established under the Eational 9an)

for Agriculture and ural %evelopment Act, /3?/ @4/ of/3?/B.

2? ;Eotification< means a notification published in the AP(a*ette.

23 ; ffice-bearer< means a President or >ice-President,Chair person, >ice Chairperson, Secretary or a 'reasurerand include any other person to be elected by the 9oardof any co-operative society.

51 ; fficer< means a President, >ice-President,Chairperson, >ice-Chairperson, +anaging %irector,Secretary, +anager, member of a board, treasurer,li#uidator, an administrator appointed under section

64 and includes any other person empo!ered underthis Act or the bye-la!s to give directions in regard tothe business of a Co-operative Society.

5/ ; rdinary esolution< means a resolution of the (eneralbody !hich has the approval of the ma$ority ofmembers !ith the right to vote, present and voting atthe general meeting.

50 ;Potential +ember< means a person !ho needs thecore services being offered by a Co-operative society,may be accessing them, and is eligible to be a memberof that Co-operative society, but is not yet its member.

52 ;Presenting fficer< means an officer of the Cooperation%epartment generally not belo! the ran) of SpecialCategory %eputy egistrar appointed by the egistrar ofCo-operative Societies to receive, on his behalf and onbehalf of the State (overnment, notices issued by theAndhra Pradesh Co-operative 'ribunals and, to present

the case: records pertaining to (overnment and itsofficers, to appear, act and plead on his behalf and on

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behalf of the State (overnment in all proceedingsbefore the said 'ribunals and includes any fficerauthori*ed by the egistrar of Co-operative Societies forthe said purpose&

55 ;Primary Co-operative Society< means a Society !hosemembership consists of "-

a Individuals. orb individuals and (overnment. orc the individuals and homogenous groups, not

belonging to the same class. ord individuals and the financing ban).

56 ;Professional %irector< means a person appointed as%irector to the 9oard of a Cooperative by virtue of hisbeing an expert in the field of accounting, finance,management, ban)ing or any other speciali*ed fieldrelating to the activities of the Co-operativeSociety !ho can be either elected or co-opted&

54 ;Promoter< means a person !ho has singed theapplication forthe registration of a Co-operative society&

58 ; egistrar of the %istrict< means a person authori*ed by

the egistrar to exercise in the district or any portionthereof,

po!ers of egistrar under Section ?6 of this Act&

5? ; eorgani*ation< means change in the structure of a co-operative

society through merger:amalgamation:conversion intoanother

Co-operative Society&

53 ; epresentative< means a person elected or selected bya section

of members, in accordance !ith the byela!s, toparticipate on

their behalf at the representative general body meeting&

61 ; epresentative general body< in relation to a Co-operative

Society means all the representatives&

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6/ ; epresentative general body meeting< means ameeting of the

representatives called and conducted in accordance !iththe

provisions of this Act and byela!s of the society&

60 ; eserve 9an)< means the eserve 9an) of Indiaconstituted

under the eserve 9an) of India Act /325 @0 of /325B&

62 ;Sale fficer< means, an officer of the co-operativedepartment

or an officer of any co-operative society empo!ered bythe egistrar by general or special order to attach andsell the properties of Dudgment debtor or to execute anydecree, decision or order by attachment and sale ofproperty.

65 ;Schedule< means schedule appended to the Act.

66 ;Secondary Co-operative Society< means a Co-operative Society

!hose members are co-operative societies.

64 ;Section< means, a section of this Act.

68 ;Secured creditor< means a person as defined in thisAct, !hoholds some security, such as a

mortgage:hypothecation:charge, for the money he has lent.

6? ;special resolution< means a resolution of the (eneral9ody, at a meeting called !ith at least /6 days notice,!hich has the approval of more than half of all themembers of the Co-operative society !ith right of voteat the time of the general meeting or of at least t!o-thirds of members present !ith right of vote in thegeneral meeting !hichever is less.

63 ;Surplus< means the excess of income overexpenditure, arrived at the end of the financial year,after allocation of reserves and other funds including thepayment of dividend, if any, on share capital.

41 ;Surplus refund< means the refund from the surplusgiven:

credited to the accounts of members, in proportion totheir use of the services of the Co-operative society in

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accordance !ith the byela!s and resolutions of the(eneral 9ody.

4/ GSociety !ith limited liabilityG means a society in !hichthe

liability of its members for the debts of the society in theevent of

its being !ound up is limited by its bye-la!s.

a to the amount, if any unpaid on the shares held byeach of them. or

b to such amount as they may underta)e to contributeto the assets of the society.

40 ;Co-operative 'ribunal< means a 'ribunal constitutedunder

section 8/ and having $urisdiction.

42 ;'urnover< means money value of goods sold: orloans issued.

45 ;Hnsecured Creditor< means a persons !ho has lentmoney !ithout obtaining any security, li)e thedepositor.

46 !ords and expressions defined in the Act and used but

not defined in the byela!s of co-operative societiesshall have the meanings respectively assigned to themin the Act&

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CHAP !"1##

#2C)"P)"A #)2

Section 3% Appointment of "egistrar

/ 'he (overnment may appoint a person to be the egistrar ofCo-operative Societies for the State for the purposes of this Act andmay appoint such other persons as it may thin) fit to assist the

egistrar&

0 'he (overnment may, by notification, direct that any po!erexercisable by the egistrar under this Act shall, in relation to suchsociety, and such matters as may be specified in the notification, be

exercisable by the fficers assisting the egistrar sub$ect to thegeneral supervision and control by the egistrar&

2 'he term of office of a egistrar shall be at least three years&

Section 4% )rgani5ations which may be registered

/ An organi*ation !hich has, as its main ob$ect, the promotionof the social and economic betterment of its members in

accordance !ith the Co-operative principles or a federal societyestablished !ith the ob$ect of facilitating the operation of such asociety, may be registered under this Act&

0 A Co-operative Society shall be registered !ith limitedliability&

2 7very Co-operative Society registered or deemed to beregistered and:or continued under this Act shall function sub$ect tosuch directions as may be issued by the egistrar, from time totime, in the interests of the Co-operative movement or the publicinterest or in order to prevent the affairs of the Society from beingconducted in a manner detrimental to the interests of the membersor of the depositors or creditors thereof, and the society shallcomply !ith such directions&

Section $6% Application for registration of aCo-operative Society

/ An application for the registration of a Co-operative Societyshall be made to the egistrar in Form @/B either in person orthrough registered post or nline through electronic medium&

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0 'he application shall be signed,

a in the case of a Co-operative society of !hich allthe members are individuals, by at least /1persons each being a member of different familyand every one of them possessing eligibility tobecome a member under the provisions of thisAct.

b In the case of a Co-operative society of !hich themembers are Co-operative societies, by dulyauthori*ed representatives on behalf of at leastfive such societies&

2 'he application shall be accompanied by"

a four copies of the proposed byela!s of the Co-operative society duly signed by each of the personsby !hom or on !hose behalf such application ismade duly incorporating therein the core services ofthe proposed co-operative society in its ob$ects.

b a list of persons !ith their addresses and occupation!ho have contributed to the Share Capital together

!ith the admission fee paid by each of them.

c a s!orn statement in Form @0B by each of thepromoters.

d evidence in proof of contribution made by thePromotersto!ards the Share Capital of the proposed Co-operative Society.

e a copy of the minutes of the meeting at !hich thebyela!s

of the proposed co-operative society !ere adoptedand duly

signed by the promoters, !hich shall also specify thename

and address of the Chief Promoter&

5 here any promoter of a Co-operative society to be registeredis a Co-operative society, a resolution authori*ing the Chairpersonor a member by the 9oard of %irectors of the said Co-operative

society, shall be appended to the application&

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6 'he list of promoters of the first board elected by thepromoting applicants&

4 A true copy of the minutes of the meeting at !hich thebyela!s !ere adopted, duly signed by the Chairperson&

8 A copy of the resolution indicating the name of one or moreapplicants !ho are authori*ed to ma)e alterations or additions tothe proposed byela!s shall be submitted !ith the application&

? Challan in proof of having remitted egistration fee amountingto one percent of the authori*ed share capital sub$ect to aminimum of upees ne thousand and maximum of upees tenthousand, in (overnment treasury under the relevant Jead ofaccount&

7xplanation" ;+ember of family< means a !ife, husband, father,mother, grand-father, grand-mother, step father, step mother, son,daughter, step son, step daughter, grandson, grand daughter,brother, sister, half brother, half sister and !ife of brother or halfbrother&

Section $$% "egistration of a Co-operative Society

n receipt of an application for registration of a Co-operative

Society the egistrar shall enter the particulars of the application inthe egister of applications to be maintained in Form @2B eithermanually or electronically and give a serial number to theapplication and issue a receipt in ac)no!ledgement thereof&

/ If the egistrar is satisfied

i that the application of the proposed Co-operativeSociety has complied !ith the provisions of this Act.

ii that the proposed Co-operative society satisfies thebasic criteria that its ob$ects are to serve theinterests:needs of its members.

iii that its byela!s provide for social and economicbetterment of its members through the practice ofthrift, self help and mutual aid in accordance !ith theCo-operative principles.

iv that the proposed byela!s are not contrary to theprovisions of this Act or any other Act relevant to theproposed activities of the Society, he may register theco-operative society and its byela!s&

0 'he egistrar shall )eep a record of the registered bye-la!s ofthe Co-operative Society, as amended from time to time and shall

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ma)e available, on demand, a certified copy of the bye-la!s to anyperson on payment of fee prescribed by him&

2 'he application for registration shall be disposed off by theegistrar"

a in the case of a primary society !ith in a period of 56days.

b and in the case of any other society !ithin a period of41 days from the date of receipt of application&

5 here the egistrar refuses to register a Co-operative society!ithin the above period, he shall communicate the order of refusaltogether !ith the reasons therefor to the Chief Promoter !ithin /6days of such decision of refusal&

Provided no order of refusal shall be made unless the ChiefPromoter has been given a reasonable opportunity of being heard&

Provided further that if the application for registration is notdisposed off !ithin the above period or the egistrar fails tocommunicate the order of refusal !ithin /6 days thereafter, theapplication shall be deemed to have been accepted for registrationand the egistrar shall issue egistration Certificate in accordance!ith the provisions of this Act&

Section $&% "egistration Certificate

/ here a Co-operative Society is registered, the egistrar shallissue a certificate of registration and byela!s registered signed andsealed by him !hich shall be conclusive evidence that thecooperative society has been duly registered under this Act, unlessit is proved that the registration of the society is cancelled&

0 n receipt of egistration Certificate, the persons !ho have

signed the application for the registration of the co-operative societyshall conduct the affairs of the society for a period of three monthsfrom the date of registration or till the conduct of elections!hichever is earlier and shall cease to conduct the affairs of thesociety after the expiry of t!elve months or after constitution of acommittee as per the provisions of the Act !hichever is earlier&

Section $'% Society to be a body corporate

/ 'he registration of a Co-operative Society shall render it a

body corporate by the name under !hich it is registered havingperpetual succession and a common seal and !ith po!er to ac#uire,

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hold and dispose of property, both movable and immovable, enterinto contract, institute and defend suits and other legal proceedingsand to do all things necessary for the purposes for !hich it isconstituted&

0 All transactions entered into in good faith prior to theregistration of a Co-operative society, in furtherance of itsob$ectives, shall be deemed to be its transactions after registration&Jo!ever, acceptance of deposits, extending credit and purchase offixed assets or trading in goods and services prior to registrationshall not be deemed as transactions of the Society after registration&

Section$ % +isplay of 2ame

/ 7very Co-operative Society shall display its name and address

of its registered office and the !ords ; egistered under A&P& Co-operative Societies Act, 01/1< in legible characters in a conspicuousposition

a At the Jead ffice and every office or place at !hich it

carries on its business.

b in all notices and other official publications.

c on all its contracts, business letters, orders for goods,invoices,

statements of accounts, receipts and letters of credit.and

d on all bills of exchange, promissory notes,endorsements,

che#ues and orders for money it signs or that aresigned on

its behalf&

0 'he name of every Co-operative Society shall contain the

!ords KCo-operative Society and Klimited and their e#uivalent in 'elugu or Hrdu language&

Section $ % Classification of Societies

'he egistrar may classify the societies as follo!s and incorporatesuch classification in the certificate of registration"

/ 'hrift Credit Society.0 9an)ing Society.2 +ar)eting Society.5 Producers Sale Society.

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6 Processing +anufacturing Society.4 Jousing society.8 Service Society.? Construction abour Contract Society.3 Co-operative Society for A!areness, 'raining esearch.

and/1 Consumer Society// +iscellaneous societies

For the purpose of this section, ;'hrift Credit Society< means asociety !hich has as its principal ob$ect raising of funds from itsmembers or external borro!ings for the purpose of lending to itsmembers&

;9an)ing Society< means a society !hich has a license from 9I tocarry on ban)ing business and may be further categori*ed asPrimary Agriculture Co-operative Society or Primary Co-operativeHrban 9an) or %istrict Co-operative Central 9an) or ApexCo-operative 9an)&

;+ar)eting Society< means a society, !hich has as its principalob$ect the arranging for the mar)eting of agricultural and otherproduce or products of its members or the underta)ing of thedistribution of commodities and includes any Co-operative Society!hich has as its principal ob$ect the provision of facilities for theoperation of a mar)eting society.

;Producers and Sale Society< means a Co-operative Society !hichhas as its principal ob$ect the promoting of the interest of a class ofproducer members including facilitation of production, processingand mar)eting&

;Processing +anufacturing Society< means a Co-operative Societyorgani*ed !ith the principal ob$ect of underta)ing processing andmanufacturing activities for the economic benefit of its members&

;Jousing society< means a Co-operative Society !hich has as itsprincipal ob$ect of providing Jousing services including Jouse Plotsand : or Jome oans and : or Construction of houses and : orapartments&

;Service Society< means a Co-operative Society !hich is formed!ith an aim to underta)e any service activity to further theeconomic and : or social interests of its members&

;Construction abour Contract Society< means a Co-operativeSociety formed to underta)e construction activity on commercial

lines and : or to supply construction material or labour or any other)ind of s)illed manpo!er on contractual terms&

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;Co-operative Society for A!areness, 'raining esearch< means aCo-operative Society established !ith the ob$ect of creatinga!areness about co-operative !ay of carrying out economicactivity, providing training and : or underta)ing research anddevelopment activities for the benefit of its members : sta)e holdersof Co-operative Societies&

;Consumer Society< means a Co-operative Society !hich has as itsprincipal ob$ect the supply of the domestic and other re#uirementsof its members for the consumption of such members&

;+iscellaneous society< means a Co-operative Society not fallingunder any of the class of societies in this section&

CHAP !" 7 ###

89!-:A;S

Section $ % 8yelaws of Co-operative Societies

/ 7xcept on such specific matters !hich the Act has providedfor and !hich the byela!s may further regulate on but notcontravene, the functions of every co-operative society shall beregulated by its byela!&

0 7very Co-operative society may ma)e its byela!s consistent!ith the Co-operative principles and the provisions of this Act&

2 It shall be mandatory for every society to

a prescribe #ualifications and fit and proper criteria for thepost ofChief 7xecutive fficer : +anaging %irector of the Society&

b ma)e service bye-la!s for its employees laying do!nstaffing

pattern, pay scales, recruitment procedures, careeradvancement

plans, mandatory training re#uirements, compensation andterminal

benefits and disciplinary procedures and relevantcompetent

authorities thereof&

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5 A definition of KActive +ember in relation to the aims andob$ects and activities of the Society shall be incorporated in the bye-la!&

6 In particular and !ithout pre$udice to the generality of theforegoing po!er, such bye-la!s may provide for all or any of thematters specified belo! and !ith such other matters incidentalthereto as may be deemed necessary by the Society&

/ 'he name, address and area of operations of the society.0 the core ob$ects of the Co-operative Society explicitly stated

ascommon central need:interest of the members !hichthe Co-operative society aims at fulfilling.

0 the co-operative principles as stated in this Act, according to!hich

the Co-operative Society shall conduct its affairs.2 the services to be provided to its members.5 the eligibility for obtaining membership.6 the procedure for obtaining membership.4 conditions for continuing as member.8 the time limit before !hich a potential member must see)

and obtainmembership in order to continue to use the services of the

Co-operative Society.

? the procedure for easy !ithdra!al:transfer of membership.

/1 the procedure for termination and cessation, expulsion ofmembership.

// the rights and duties of the members./0 the transfer of shares.

/2 the payment, if any to be made or the interest to beac#uired as a

condition for exercising the right of membership./5 fixation of minimum performance re#uired annually of each

membervis-a-vis use of services, financial commitment and

participation inmeetings to be eligible to exercise the rights of membershipincluding the right to vote.

/6 the conse#uences of default in payment of any sumdue by a

member./4 the nature and amount of capital if any of the Co-

operative Society./8 the maximum capital to !hich a single member can

subscribe.

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/? the nature and extent of the liability of the membersfor the debts

contracted by the Co-operative Society./3 the maximum interest:dividend payable to members

onPaid up Share capital.

01 the sources, types and extent of funds to be raised bythe

Co- operative society.0/ the purpose for !hich the funds may be applied.

00 the extent and conditions under !hich deposits, loans,debentures

and other funds may be obtained.02 the conditions and purposes for !hich State aid except

e#uityand aid from other financial institutions may be sought andobtained.

05 the manner of allocation or disbursement of surplus of theCo-operative Society.

06 the constitution of various reserves and their purposes. 04 the manner of and fre#uency of convening generalmeetings and

9oard meetings and #uorum re#uired therefor other thanthose

provided under this Act. 08 the role of the general body and sub$ects !hich shall be

dealt !ith by the general body.0? the manner of convening general meetings and

#uorum thereofother than those provided under this Act.

03 the procedure for notice and manner of voting ingeneral and 9oard

meetings.21 the manner of conducting elections and of filling casual

vacancies.2/ the manner of ma)ing or amending byela!s.20 the number of members of the 9oard not exceeding

'!enty one.22 eligibility, ineligibility for becoming and continuing as

member of the9oard on the basis of fit and proper criteria.

25 the tenure of office of directors, chairperson and otheroffice bearers

of the Co-operative Society not exceeding five years. 26 the procedure for removal of members of the 9oard andfilling of

vacancies.24 the manner of convening 9oard meetings and #uorum.

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28 the fre#uency of 9oard meetings. 2? po!ers and functions of the 9oard. 23 po!ers and functions of office-bearers including Chair-person. 51 #ualifications and fit and proper criteria for appointment ofthe

Chief 7xecutive, his po!ers and functions. 5/ penalties for acting against the interests of members and fornon-

fulfillment of duties by members, directors and staff. 50 the appointment and role of auditors and the procedure forconduct

of audit !here the Co-operative Society fails to ma)enecessary

arrangements and time limit for audit compliance. 52 the authori*ation of an officer or officers to sign documentsand to

institute and defined suits and other legal proceedings onbehalf of

the Co-operative Society. 55 the terms on !hich a Co-operative Society may deal !ith

non-members. 56 the terms on !hich a Co-operative society may associate!ith other

Co-operative Societies. 54 the terms on !hich a Co-operative society may deal !ith

rgani*ations other than Co-operative societies& 58 the rights, if any, !hich the Co-operative Society may conferon any

other Co-operative Society, or federal Co-operative Societyand the

circumstances under !hich such rights may be exercised bythe

federal Co-operative Society. 5? the procedure and manner of transfer of shares and interestin the

name of a nominee in the case of death of a member. 53 the minimum level of services to be used by the members ofthe

Co-operative Society. 61 the conse#uences of performing belo! the level fixed. 6/ the conse#uences of default in payment of any sum due

by a member. 60 the educational and training programmes to be conductedby the

Co-operative society. 62 the manner of choosing delegates to higher tier Co-

operative Societies and Federations.

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65 the mode of custody of valuable documents and manner ofinvest-

ment of funds and the manner of )eeping accounts. 66 the method of appropriating payments made by membersfrom

!hom moneys are due. 64 the preparation and submission of annual statementsre#uired by the

egulatory authorities and mode of publication of the same. 68 in the case of productive and distributive societies theprocedure

to be follo!ed in purchasing and selling stores, ra!materials and

finished products and in respect of stoc) ta)ing& 6? in the case of Agricultural Co-operative Societies, provisionfor

creation of charge on the immovable property of a memberfor the

SA loans borro!ed and for long-term credit for agricultureand

allied purposes byela! provision to include.

i mortgages created or assets transferred by membersand deemed to have been transferred to AndhraPradesh State Co-operative 9an) to vest in the 'rustee.

ii po!er to the Financing ban): Primary AgriculturalCo-operative Society to sue and receive moneys dueunder mortgage in the absence of specific direction tothe contrary from the 9oard of Andhra Pradesh State Co-operative 9an): 'rustee.

iii right to Financing 9an): Primary Agricultural Co-operative Society to advance loans and hold lands.

iv mode of dealing !ith applications for long-term loans.v order granting loan to be conclusive proof of productive

purpose of the loan benefiting the land.vi loans granted by Financing 9an) and Primary

Agricultural Co-operative Society becoming recoverableby them !ith interest !hen falling due.

vii remedy of applying to the egistrar to recover arrearinstallment, by distraint and sale of produce, standingcrop of the mortgaged land and any other movableproperty of the defaulter before the expiry of t!entyfour months of the installment falling due.

viii board of Financing 9an) to bring to sale the mortgagedproperty !ithout intervention of the Court !ith three

months notice to the mortgagor, his surety and his

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creditor holding a decree against the mortgagedproperty.

ix Financing 9an): Primary Agricultural Co-operativeSociety to

foreclose the loan !hen the mortgaged property isdestroyed and the mortgagor failed to provide furthersecurity after opportunity being given.

x Po!er to the 9oard of Andhra Pradesh State Co-operative 9an): 'rustee to direct Financing 9an):Primary Agricultural Co-operative Society to ta)e actionagainst defaulter as per remedies in sub-division >II, >III

I= and to step in their place, on their failure.xi that title of the auction purchaser shall not be

#uestioned ongrounds of irregularity in the conduct of sale.

xii that mortgage in favour of Financing 9an): PrimaryAgricultural

Co-operative Society shall not be #uestioned oninsolvency of

mortgagor.xiii that the 9oard of Andhra Pradesh State Co-operative

9an) may on the application of the Financing 9an):Primary Agricultural Co-operative Society appoint areceiver in !riting, if there is none appointed by a Courtto ta)e possession of the property collect its produceand income and reali*e the money due.

xiv that for sufficient cause the 9oard may remove thereceiver and fill in the vacancy.xv that the mortgagor may grant a lease of the property for

a period of not more than six years.xvi that the mortgage created by a manager of a Doint

Jindu family shall be binding on the members !hetherma$ors or minors if the loan secured by the mortgage!as granted for purchase of any land or improvement ofany agricultural land.

xvii that if the minor or ma$ors raise the #uestion that theloan is

not binding on them the burden of proof shall be onthem.

63 in the case of 7mployees Credit Societies, byela!s toempo!er employer to deduct the sum indicated in there#uisition of the 7mployees Co-operative Society from thesalary: !ages of the employee and remit the same to the7mployees Society concerned on an agreement, executed bythe employee in favour of the said society.

41 admission of minors as members for purpose of providing

servicesor benefits them.

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4/ compulsory thrift to be collected from members periodicity ofcollection, interest payable by the Co-operative society onsuch collection and manner of lin)age of thrift to eligibility ofloans terms and conditions of thrift including its refund to themember.

40 manner of preparation and display of the list of memberseligible to

vote in general body or elections.42 mode of appointment of ad-hoc committee !here needed.45 the manner of dissolution of the Co-operative society.46 the manner of disposal of funds !hen the Co-operative society

isunder dissolution and ho! surplus assets are to be dealt !ith.

44 language in !hich business is to be conducted by theCo-operative Society.

48 Financial year adopted by the Co-operative Society.4? ecords to be maintained by the Co-operative Society.43 Internal mechanism for settlement of disputes, if any&

< = Any change in the registered office of a Co-operative Societythrough amendment to the bye-la!s shall be notified to the

egistrar !ithin a period of fifteen days of its change&

Section $ % Amendment of byelaws of aCo-operative Society

/ A Co-operative Society may amend any of its bye-la!s by aresolution passed at a (eneral meeting by a ma$ority of the totalmembership !ith right of vote or of 0:2 rd of the members presentand voting, !hichever is less.

Provided no such resolution shall be passed by the (eneral 9odyunless at least t!enty clear days of !ritten notice of the resolutionand of the (eneral +eeting has been given along !ith a copy of theproposed amendment to each member of the Co-operative Society&

0 An application for the registration of the amendment shall befor!arded by egistered Post to the egistrar !ithin a period ofthirty days from the date of resolution duly signed by theChairperson and t!o members of the 9oard and shall beaccompanied by the follo!ing"--

a A copy of the resolution adopting the amendment

b A statement containing the particulars indicatingL

i the date of the general meeting at !hich theamendments to the bye-la!s !ere approved.

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ii the date of the notice issued for the generalmeeting.

iii the total number of members on the rolls of theCo-operative society having the right of vote onthe date of such general meeting.

iv the number of members having the right of votepresent at such general meeting. and

v the number of members !ho voted for theresolution.

c Four copies of the text of the byela!s incorporating thereinthe

proposed amendments&

2 'he egistrar, if the proposed amendment is in consonance!ith the provisions of this Act, shall register theamendment !ithin a period of sixty days from the dateof receipt of the application&

5 'he egistrar shall for!ard to the Co-operative society !ithina period of fifteen days after registration, a copy of the registeredamendment together !ith a certificate signed and sealed by himand such certificate shall be conclusive evidence that theamendment has been duly registered&

6 'he egistrar, if the proposed amendment is not in

consonance !ith the provisions of this Act, shall communicate theorder of refusal together !ith the reasons therefor to the Chief7xecutive of the society !ithin fifteen days from the date of suchrefusal&

Provided that no order of refusing to register the amendment shallbe passed except after giving the Co-operative society anopportunity of ma)ing its representation&

a here no order of refusal is communicated !ithin thespecified period, it shall be deemed that the egistrar hasregistered the amendment after the expiry of 86 days fromthe date of application and the egistrar shall issue thecertificate of registration of amendment proposed&

Section $3% Change of name%

/ A Co-operative Society may, by an amendment of its byela!s,change its name, ho!ever it shall be ensured that the name doesnot refer to any caste or religious denomination and is notinconsistent !ith the ob$ects of the Co-operative Society&

0 After the change is approved by the egistrar, the Co-operative society shall send the original registration Certificate to

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the egistrar for amendment, !ho shall amend the certificate ofregistration accordingly, enter the ne! name in the registermaintained in Form Eo&2 in the place of its former name and returnthe amended certificate of registration to the Co-operative Society&

2 Such change of name shall not affect any right or obligation ofthe Co-operative Society or of any of its members or past membersand any legal proceedings !hich might have been continued orcommenced by or against the Co-operative society by its formername, may be continued or commenced by or against its ne!name&

Section $4% Change of liability, transfer of assetsand

liabilities, division, amalgamation of aCo-operative Society

/ A Co-operative Society may, by a resolution of its generalbody,decide to

a change the form and:or extent of its liability.

b transfer its assets and liabilities in !hole or in part toany other

Co-operative Society !hich agrees to such transfer by aresolution of its general body.

c divide itself into t!o or more co-operative societies&

0 Any t!o or more co-operative societies may, by a resolution oftheir respective general body meetings decide to amalgamatethemselves and form a ne! co-operative society&

2 7very resolution of a co-operative society under this section

shall be passed at its general meeting by a ma$ority of totalmembers !ith right of vote or t!o thirds of members present andvoting !hichever is less and such resolution shall contain allparticulars of the liability, transfer, division, amalgamation as thecase may be&

5 here a co-operative society has passed a resolution underthis section, it shall give notice thereof together !ith a copy of theresolution to all its members, federal Co-operative Societies to!hich it is affiliated and creditors !ho may give their consent&

ther!ise, not!ithstanding any byela! or contract to the contrary,any member, federal Co-operative Society or creditor shall, during aperiod of one month from the date of service of the notice have the

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option of !ithdra!ing their shares, deposits, loans, or services asthe case may be&

6 Any member, federal Co-operative Society or creditor !ho or!hich does not exercise !ithin the specified period the right undersub-section 5 shall be deemed to have assented to the resolution&

4 A resolution passed by a Co-operative Society under thissection shall not ta)e effect until"

a i all the members, federal Co-operative Societies andcreditors

have assented or are deemed to have assentedto the

resolution under sub-section 5 or sub-section 6 . or

ii all claims of the members, federal Co-operativeSocieties

and creditors !ho have exercised the optionreferred to

under sub-section 5 !ithin the period specifiedtherein

have been met in full or other!ise satisfied. and

b i in the case of change of liability, amendment of thebyela!s

of the Co-operative Society concerned isregistered ordeemed to have been registered. or

ii in the case of division or amalgamation, thecertificate of

registration of the Co-operative Society, or the Co-operative

Societies, as the case may be, is issued or deemedto have

been issued&

8 hen a resolution passed by a Co-operative Society undersub-section 0 ta)es effect, the resolution shall be a sufficientconveyance to vest the assets and liabilities in the transferee!ithout any further assurance&

? 'he registration of a Co-operative Society shall standcancelled and the co-operative society shall be deemed to havebeen dissolved and shall cease to exist as a corporate body.

a !hen the !hole of the assets and liabilities of such Co-

operative Society are transferred to another co-operative society. or

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b !hen such Co-operative Society divides itself into t!o ormore co-operative societies&

3 here t!o or more Co-operative Societies are amalgamatedinto a ne! Co-operative Society, the registration of Co-operativeSocieties so amalgamated shall stand cancelled and they shall bedeemed to have been dissolved and shall cease to exist ascorporate bodies&Section &6% Promotion of subsidiary organi5ation

/ Any Co-operative Society may, by a resolution passed atgeneral meeting by a ma$ority of members present and voting,promote one or more subsidiary organi*ations for the furtherance ofits stated ob$ectives, and such organi*ation or organi*ations may beregistered under any la! for the time being in force, as agreed to by

the general body&Provided that a Co-operative 9an) shall not promote a subsidiary,nor shall a Co-operative Society promote a subsidiary !hosebyela!s permit the carrying of ban)ing business !ithout obtainingthe prior permission of the eserve 9an) of India in !riting&

Provided further that the +anagement Committee of such subsidiaryorgani*ation shall not be members of family of the 9oard of%irectors of the Co-operative Society&

0 'he annual reports and accounts of any such subsidiaryorgani*ation shall be placed before the general meeting of thepromoting co-operative society each year&

2 Any subsidiary organi*ation created under sub-section /shall exist only as long as general body of the co-operative societydeems its existence necessary&

Section &$% Partnership of Co-operative Societies

/ Any t!o or more co-operative societies may, by resolutionspassed at general meetings by a ma$ority of members present andvoting in each such co-operative society, enter into a contract ofpartnership for carrying out any specific business permissible underthe byela!s on such terms and conditions as may be mutuallyagreed upon&

0 here such partnership re#uires the creation of a ne!organi*ation, the participating co-operative societies shall be itsmembers&

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Provided that a Co-operative 9an) shall not enter into such apartnership !ithout obtaining prior permission of the eserve 9an)of India in !riting&

2 Eothing in the Indian Partnership Act, /320 Central Act 3 of/320 shall apply to all such partnership&

Section &&% Creation of new )rganisation withothers

here the collaboration bet!een a co-operative society and anyother organi*ation !ith similar core services re#uires the creation ofthe ne! organisation, the ne! organi*ation may be registered as acompany or a public society, as appropriate for the fulfillments ofthe ob$ective !ith !hich it !as created, and such collaboration shallbe revie!ed every year by the general body of the Co-operativeSociety&

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CHAP !" - #(

>!+!"A #)2S

Section &'% Co-operative Societies >ederations /?nions

/ Federal Co-operative societies : Co-operative Hnionsconsisting of primary and: or secondary Co-operative Societies asmembers may be established and shall be eligible for registrationunder this Act&

0 7very federal Co-operative Society shall in its general meetingbe represented by its member Co-operative Societies&

2 A federal Co-operative Society may be classified !ithreference to the nature of its activities& Eot more than one federalCo-operative Society shall be registered !ith similar and identicalob$ects in the same area of operation&

5 A federal Co-operative Society for the sa)e of promotion ofconstituent members shall ma)e suitable provisions in their byela!sto avoid competition !ith their member-societies&

6 All provisions of this Act, applicable to a Co-operative societyshall, as far as may be, apply to a federal Co-operative society&

Section & % >unctions of >ederal Co-operativeSociety

/ Sub$ect to the provision of this Act and any other la! for thetime being in force, a federal Co-operative society may dischargethe functions to facilitate the voluntary formation, autonomous and

democratic functioning of co-operative societies based on thrift, self-help and mutual aid&

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0 ithout pre$udice to the generality of the provisions containedin subsection / the federal Co-operative Society may perform thefollo!ing functions.

a Safeguard the observance of the Co-operativeprinciples byits constituents&

b Promote and organi*e the Co-operative Societies forthis

purpose, frame model byela! and guidelines forframing1 various regulations and policies for considerationby

Co-operative Societies&

c Provide Co-operative training, 7ducation andinformation,and propagate cooperative principles and practices.

d Hnderta)e research and evaluation and assist in thepreparation of perspective development plans for itsmember Co-operative societies&

e Promote harmonious relations amongst memberCo-operative societies&

f Jelp member Co-operative societies to settledisputes among themselves&

g epresent the interests of member Co-operativesocieties and lobby for policies and legislationfavorable to Co-operative societies&

h Hnderta)e business services on behalf of itsmemberCo-operative Societies, if specially re#uired by orunder the resolution of the general body or theboard or byela!s of a member Co-operative Society&

i Provide Co-operative management %evelopmentservices to a member Co-operative Society includingparticipation in board meetings !here invited&

$ Arrange for timely conduct of annual statutory auditin member Co-operative Societies !hen they fail toget their statutory audit of accounts conducted on

time&

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) Assist member Co-operative societies in regularconduct of general meetings and in the event of theirfailure Federation to call for Annual (eneral +eeting&

l 7volve code of conduct for observance by a memberCo-operative Societies&

m 7volve viability norms for member Co-operativeSocieties&

n Provide legal aid and advice to member Co-operativeSocieties&

o Assist member Co-operative societies in organisingself-help

groups of people living in its area of operations&

p %evelop mar)et information system, logo brandpromotion,#uality control and technology up-gradation

# Provide any other services, stated in its bye-la!s, atthe behest of member Co-operative societies&

Cooperative ?nion%

7very Co-operative Society registered may affiliate itselfto the A&P& State Co-operative Hnion and pay yearlysubscription at the rates fixed by the said Hnion forcontinuance of its affiliation and become eligible for theservices offered by the A&P& State Co-operative Hnion&

A Co-operative Hnion shall"

(a) Collect from all the co-operative societies the Co-operative 7ducation Fund set apart for its use,annual member subscription and othercontributions and maintain related accountsthereto&

(b) epresent the interests, problems and !elfare ofall types of Co-operative societies at district andState level to the competent authorities&

c Promote ne! forms of Co-operative societies&

d Hnderta)e experimental pro$ects to!ards the

application of Co-operative ideology&

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e iaise on behalf of and amongst Co-operativesocieties&

f Service as a data ban) on Co-operation and Co- operative societies&

g Hnderta)e esearch 7valuation studies&

CHAP !" - (

*A2A@!*!2 )> >?2+S

Section & % *obilisation of >unds

A Co-operative Society may mobilise share capital, deposits,debentures, loans and other contributions from its members to suchextent and under such conditions as may be specified in the 9ye-la!s&

Section & % "estriction on borrowings

/ A co-operative society may mobili*e debentures, deposits,raise loans and receive grants from external sources to such extentunder such conditions as may be specified in the byela!s& %epositsand loans raised from external sources, ho!ever, shall at no timeexceed ten times the sum of member funds and organi*ational

reserves less accumulated deficit, if any&

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0 A Co-operative Society may accept funds or guarantee from(overnment but not e#uity or other financing institutions for thefulfillment of its ob$ectives on such terms and conditions as aremutually contracted upon and such conditions may include the rightof the (overnment or other financier to nominate one expert on the9oard of the Co-operative Society&

Section & % "estriction on holding shares

/ Eo member in a Primary Co-operative Society, shall at anytime, hold more than one tenth of the total paid up share capital ofthe Co-operative Society&

0 Eo Co-operative Society shall accept funds from the(overnment by !ay of share capital provided the State(overnments e#uity in a Co-operative Credit Society defined insection /1/ a of the Act shall not exceed 06M of its paid up sharecapital&

2 Share capital already received from the (overnment shouldberepatriated and in case !here Co-operative Society is unable toreturn the (overnment share capital it shall enter into an+emorandum of Hnderstanding !ith the (overnment agreeing tosuch conditions that (overnment may stipulate&

Section &3% +isposal of Surplus

/ In any year a Co-operative Society shall allocate to!ardsdeficit cover fund, reserve funds such as share capital redemptionfund, common good fund, deferred payment to members aspatronage rebate in proportion to their use of the co-operativesocietys services and payment on share capital as interest notexceeding the rate of interest paid by scheduled ban)s, suchpercentage of the surplus arising from its business transactions inthe previous year, as may be approved by the general body&

0 eserves created under sub-section / shall be costed bycrediting an annual interest e#ual to the rate paid by scheduledban)s on fixed deposits&

Section &4% :iability for +eficit

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/ here a co-operative society is left !ith an operational deficitin any given year, the 9oard of %irectors shall place before thegeneral body in the first follo!ing annual general body meeting, adetailed report on the causes of deficit and the manner in !hich thedeficit is proposed to be met&

0 'he general body of the Co-operative Society shall decide tohave the deficit covered by setting it off against the amountsavailable in the deficit cover fund, and:or by debiting the deficit tothe account of the member in proportion to the services they hadavailed or !ere expected to avail of the co-operative society duringthe year&

2 Any deficit arising from out of the provisions made for non-performing assets: non-realisable assets shall be met as decided bythe general body&

Section '6% "eserve and other >unds

/ A Co-operative Society may create statutory and non-statutory reserves and other funds for the promotion of the ob$ectsof the co-operative society&

0 Statutory eserve fund shall be invested outside the businessin one or more of the modes mentioned in section 2/ &

2 Statutory eserve fund is intended to meet unforeseen lossesand !hen it exceeds 06M of its !or)ing capital, the excess may beutilised in the business !ith the approval of the (eneral bodysub$ect to recoupment as decided by it&

Eo Co-operative Society !hose eserve fund has beenseparately invested shall dra! upon pledge or other!ise employsuch funds except !ith the previous permission of the (eneral bodyin !riting&

5 n !inding up of a Co-operative Society the eserve fundtogether !ith other funds constituted by the Co-operative Society asper byela!s shall be applied by the li#uidator to the discharge ofsuch liabilities of the Co-operative Society as may remainundischarged out of the assets of the Co-operative Society in thefollo!ing order namely"-

a the debts of the Co-operative Society.b paid up share capital. andc any claim relating to the dividend upon paid up share

capital due on the date of !inding up of the Co-operative Society&

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6 'he balance, if any may be constituted as a trust for carryingout ob$ects of public utility as may be suggested by the (eneralbody, in the case of Co-operative Societies other than a financingban), or deposited !ith the financing ban) !or)ing in the area ofthe Co-operative Society till a ne! Co-operative Society !ithsimilar ob$ects is formed and !hen one such Co-operativeSociety is formed, the surplus fund may be transferred to the

eserve Fund of the ne! Co-operative Society and !hen there is noprospect of a ne! Co-operative Society being formed, the (eneralbody of the Co-operative Society under !inding up may resolveto assign the fund to the 9ad debt reserve or eserve fund of thefinancing ban) in that area&

4 In the case of a financing ban) under !inding up, its (eneralbody may resolve to deposit the surplus in any other financing ban)in the area or deposit !ith the A&P& State Co-operative 9an) or !iththe eserve fund of a ne! financing ban) organi*ed, in consultation!ith the eserve 9an) of India&

Section '$% #nvestment of >unds outside business

Such of its funds as are not needed for use by a co-operative societymay be invested or deposited outside its business by a resolution ofma$ority of the Committee, !ith due care and diligence&

a in any federal co-operative society of !hich it is amember. or

b in a local co-operative society or nationalised ban) orscheduled

ban).c in the share capital of any other co-operative society.d in any of the securities specified in section 01 of the

Indian 'rust Act, /??0.e in the local postal savings ban)&

Section '&% "estriction on contribution

Eo co-operative society shall ma)e a contribution either in money orin )ind !hether directly or indirectly to an Institution !hich has anob$ect of furtherance of the interest of a political party or religiousbody&

Section ''% >irst charge

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Eot!ithstanding anything in any la! for time being in force, butsub$ect to any claim of the (overnment in respect of land revenue,any debt or other amount due to a Co-operative Society by anymember such shall be a first charge upon such properties of themember as agreed to by the Co-operative Society and as themember may declare in the manner specified in the byela!s&

CHAP !" 7 (#

*A2A@!*!2

Section ' % *embership

/ a Any person, !ho needs the services of the co-operativesociety,

accepts the responsibilities of membership and fulfils suchother

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conditions as may be specified in the byela!s of the co-operative

society, and is competent to contract may be admitted as a member..

c any Co-operative Society.

d the Central (overnment.

e the State (overnment.

f the Eational Co-operative %evelopment Corporationestablished under the Eational Co-operative %evelopmentCorporation Act, /340.

g any other Corporation o!ned or controlled by the(overnment.

h any (overnment Company as defined in Section 4/8 of theCompanies Act, /364.

i any statutory body constituted for the purpose ofdevelopment of a particular industry may become amember of a Co-operative +ar)eting or Processing Societyor gro!ers or !or)ers engaged in such industry.

Provided that a student, !ho has not attained the age of ma$ority,shall be eligible for the membership of a co-operative societyformed for students in an educational institution to !hich hebelongs&

Provided further sub$ect to condition that the Co-operative Society isin a position to extend its services to the applicant and that theapplicant is not already a member of any other co-operative societyregistered under this Act providing the same or similar services&

0 +embership shall be available as provided for in the co-operative principles !ithout any discrimination on grounds of sex&

2 7very Co-operative Society shall organi*e, a co-operativeeducational course for all persons see)ing membership and forexisting members and shall provide funds each year for co-operative education and training of its members, staff and directorsand to organi*e into self-help groups for people living in its area topromote collective action for their economic development&

5 Admission of members may be made only by an elected boardof directors or by the general body !here such a board does not

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exist or by administrator appointed in respect of admission of ne!members&

6 In addition to such dis#ualifications as may be contained inthe byela!s of a co-operative society, the follo!ing restrictions shallapply for obtaining and retaining membership in a co-operativesociety&

a Ineligibility of a person to obtain or retain membership!here the persons business is in conflict or competition !ithsuch business of the co-operative society as specified in thebyela!s.

b ineligibility of the person to retain membership !here theperson has not used for t!o consecutive years, the services ofthe Co-operative Society made available to theminimum level specified in the byela!s and such non-performance has not been condoned by the general body.

c ineligibility of the person to retain membership !here theperson has not attended three consecutive general meetingsof the Co-operative Society and such absence has notreceived the consent of the general body.

d ineligibility of a person to retain membership !here theperson is in default regarding any payment to be made to the

co-operative society, exceeding an amount and for a periodspecified in the byela!s&

Eo Co-operative Society shall, !ithout sufficient cause, refuseadmission to any person duly #ualified for membership under thebyela!s& here admission is so refused, the decision !ith thereasons shall be communicated by registered post to such person!ithin fifteen days of the date of the decision, or !ithin thirty daysfrom the date of application for membership, !hichever is earlier.

Provided that no refusal of admission shall be made !ithout givingan opportunity to the applicant of being heard&

here a person has been refused membership by the 9oard of%irectors, an appeal shall lie to the general body against thedecision of the board& Any applicant aggrieved by the decision ofthe general body may apply to the Co-operative 'ribunal forrevie! of the decision&Section ' % 2ominal or associate member

Eot!ithstanding anything contained in this Act, a Co-operative

Society may admit any individual or informal group such as SelfJelp (roup, ythumitra (roup, non-governmental organi*ation

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!or)ing for the !elfare of farmer community in the area ofoperation as nominal or associate member, but such member shallbe entitled to vote, sub$ect to satisfying section /10 of this Act&

'he associate member shall not be entitled to any share in any form!hatsoever in the profits or assets of the Co-operative Society&Such member shall not have privileges, rights and liabilities of amember except those specified in the byela!s of the Co-operativeSociety&

Provided that the members !ithout holding any agricultural land inAgricultural Credit societies be treated as associated members&

Section ' % *ode of serving of notice of 8oardand general meetings

'he Chief 7xecutive or the senior most paid employee or!here there is no paid staff, the Chairperson or the personauthori*ed under the byela! of the co-operative society, after thedate, time and venue of the meeting has been decided by theChairperson shall send notice along !ith the agenda of the 9oardmeeting to the 9oard members and the notice along !ith theagenda of the general meeting to all the members of the (eneral9ody by certificate of posting so as to reach them !ithin the timespecified in the byela!s and unless the contrary is proved suchservice shall be deemed to have been effected, at the time at !hichthe letter !ould be delivered in the ordinary course&

Section ' % uorum at general meeting

/ 'he #uorum at a general body meeting shall be thepercentage of the strength of the general body and shall be asbelo!"

i for a strength of belo! /11 members, the #uorum shallbe 61Mof the total members.

ii for a strength of /11 to 611 members, the #uorum shallbe 22M of the total members.

iii for a strength of 611 to /,111 members, the #uorumshall be 01M of the total members.

iv for a strength of /,111 to 6,111 members, the #uorumshall be /1M of the total members.

v for a strength of above 6,111 members, the #uorumshall be 6M of the total members.

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vi in the case of representative general body, 61M of thetotal representatives shall form the #uorum&

0 Eo general meeting shall be held or proceeded !ith thetransaction of business unless there is a #uorum as specified above&

2 'he #uorum for the 9oard meeting shall be the ma$ority ofthe total members of the 9oard&

5 If !ithin half an hour from the time appointed for the meetingthe #uorum is not present, the meeting shall stand ad$ourned&

Provided that a meeting !hich has been called on re#uisition of themembers shall not be ad$ourned but dissolved&

6 If at any time during the meeting sufficient number ofmembers are not present to form the #uorum the Chairperson or themember presiding over the meeting on his o!n, or on his attentionbeing dra!n to this fact, shall ad$ourn the meeting&

4 here the meeting is ad$ourned, the ad$ourned meeting shallbe held either on the same day or on such date, time and place asmay be decided by the Chairperson or the member presiding overthe meeting but !ithin 8 days from the date of ad$ourned meeting&

8 Eo business shall be transacted at any ad$ourned meetingother than the business on the agenda slated for the originalmeeting !hich is ad$ourned&

? +embers present at the ad$ourned meeting shall be the#uorum for such meeting&

Section '3% *eetings

/ 'he byela!s of a Co-operative Society shall specify thefre#uency of and manner in !hich board and general body meetingsshall be held, such ho!ever, that not less than four board meetingsand one general body meeting shall be re#uired to be held in a year&

0 'he board shall convene a special general meeting !ithinthirty days of receipt of a re#uisition to this effect from at least/:/1 th of members of the Co-operative Society or on the re#uisitionof the Federation or egistrar as provided in the byela!s and anysuch re#uisition shall contain the proposed agenda and the reasons!hy the meeting is felt necessary&

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2 here a Co-operative Society fails to convene the annualgeneral meeting !ithin due time and the concerned federation hasalso failed to convene the meeting, the egistrar shall on the expiryof ninety days convene the annual general meeting&

Section '4% *inutes of proceedings of generalmeetings

and of 8oard and other meetings

/ 7very general meeting or the meeting of the 9oard shall bepresided over by the Chairperson of the co-operative society, in hisabsence the >ice-Chairperson thereof and in the absence of boththe Chairperson and >ice-Chairperson by a member chosen by themeeting to preside over the occasion&

0 7very Co-operative Society shall record in the minutes boo),minutes of all proceedings of every general meeting and of everymeeting of its board of directors&

0 Such minutes shall be circulated to all persons invited to themeeting !ithin thirty days of the conclusion of the meeting&

2 'he minutes so recorded shall be signed by the person !hochaired the said meeting or by a director duly authori*ed by theboard !ho attended the meeting&

Section 6% (ote of *embers

/ An active of member a Co-operative Society only shall haveone vote in the affairs of the Co-operative Society after a period offirst t!elve months on his admission as a member in the Co-operative Society

0 Je shall exercise his vote in person and not by proxy&

2 In respect a Federal Co-operative Society a member shall haveone additional vote for every 6&11 la)h units transacted through theFederation in the previous financial year&

5 A delegate representing more than one member institutionshall exercise the number of votes e#ual to the number ofinstitutions he represents&

6 Provided that an active member !ho is an employee of such

Co-operative Society shall not be entitled to vote"

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(a) at the election of a member of the board of such Co-operative Society.

b in any general meeting convened for framing the byela!sof such Co-operative Society or any amendments

thereto.

c to the extent that political personalities are themselvesactive

members they !ould be entitled to be on the board andto vote

in the affairs of the society, if elected.

d in the case of an e#uality of votes the Chairperson shallhave a

casting vote.

e !here any of the authorities or a Co-operative Societyreferred to

in clauses c to g of sub-section / of section 25 is amember

of a co-operative society, each person nominated by suchauthority

or such society, on the board in accordance !ith theprovisions

contained in this Act shall have one vote.

f a Co-operative Society, the membership of !hich includeother Co-

operative Societies may provide in its byela!s for ane#uitable system of voting having regard to the sharecapital and the extent of business carried on by such Co-operative Societies.

g no member of a Co-operative Society belonging to suchclass of

Co-operative Societies and !ho failed to transact suchminimum

business as specified in the byela!s ta)ing intoconsideration the

nature of business transacted or the services or facilitiesmade

available by the Co-operative Society, shall have the rightto stand

as a candidate or to vote in any election to the Co-operative

Society.

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h a member of a Co-operative Society sub$ect to the otherprovisions

in this section shall be eligible to exercise the right to voteonly if

he"

i contribute a minimum share capital of s&211:-.

ii is not in default in the payment of any amount duein cash or )ind to the Co-operative Society for aperiod of more than 4 months.

iii is not a delegate of a Co-operative Society !hichis under proceedings for !inding up.

Provided ineligibility to vote does not amount to ineligibility toattend and participate in the meeting&

Provided further a list of eligible members !ith right to vote andthose !ithout right to vote shall be prepared and displayed on theEotice 9oard of a Co-operative Society and its branches prior toholding of any general meeting or holding of elections in the mannerlaid do!n in the byela!s&

Provided also in any meeting of the general body or the board of aCo-operative Society, another Co-operative Society is to be

represented such cooperative society shall be represented in suchmeeting only through the Chairperson or the Chief 7xecutive or amember of the board or general body of said Co-operative Society ifso authori*ed by the board& here there is no board the Co-operative Society shall be represented by a member of the (eneralbody nominated by the administrator till a ne! elected board isconstituted&

Section $% *embers not to e0ercise rights till due

payments madeEo member of a Co-operative Society shall exercise the rights of amember unless he has made the full payment to the society inrespect of all its dues or ac#uired such interest in the society asmay be specified in the byela!s

Section &% "ights of *embers

7very member of a Society shall, inter alia, have follo!ing rights inSociety sub$ect to provisions of the Act and the 9ye-la!s of theSociety"

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/ to vote at the (eneral 9ody +eeting.

0 to contest elections to the 9oard of %irector, sub$ect toeligibility as per Act and 9ye-la!s.

2 to )no! the affairs of the Society and to see)information under the provisions of ight to InformationAct, 0116.

5 to inspect such portions of the boo)s and recordsrelating to him and obtain copies of such documentsagainst payment of applicable fee.

6 to transfer his shares and interests to any other person.

4 to refer disputes bet!een him and other members orbet!een him and Society to the egistrar for settlementof such dispute.

8 to voluntarily !ithdra! from membership.

? to patronage and obtain services offered by the Co-operative Society !hen available at similar conditionsas in open mar)et.

3 to receive patronage dividend : interest on capital&

Section '% "edemption of shares

/ Shares held in a co-operative society by any of the authoritiesreferred to in sub-section / of section 25 shall be redeemable inaccordance !ith the byela!s of such co-operative society and incases !here the byela!s do not contain any provision in this regardin such manner as may be agreed upon bet!een the co-operativesociety and such authority&

0 'he redemption of the shares in sub-section / shall be onthe face value of the shares&

Section% % ransfer of share or interest

/ 'he transfer of a share or interest in the capital of a Co-operative Society shall be sub$ect to such conditions and restrictionsas to the maximum holding as are specified in section 08 / &

0 i A member shall not transfer any share held by him orhis

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interest in the Co-operative Society unless the memberhas

held such share or interest for not than one financialyear. and

ii the transfer is made to a member of the Co-operativeSociety.

iii no member of a financing ban) or a federal Co-operativeSociety shall transfer its share or interest in such ban)or Co-operative Society to an individual member, hisheir or legal representative&

2 n the death of a member, a Co-operative Society maytransfer the share or interest of the deceased member to the personnominated by the deceased member in accordance !ith thebyela!s made in this behalf or, if there is no person nominated thento the legal heir of the deceased member and in case of more thanone legal heirs, to the one in !hose favour the remaining legal heirshave agreed for such transfer& Provided that if the value of the share : interest doesnt exceed s&/la)h the transfer of interest may be made based on the certificate offamily membership issued by revenue authorities !ithout insistingfor a legal heir certificate&

5 A Co-operative Society shall, unless !ithin 4 months of thedeath of the member prevented by an order of a competent court,pay to such nominee, heir or legal representative, all other moniesdue to the deceased member from the society&

6 All transfers and payments made by a co-operative society inaccordance !ith the provisions of the section shall be valid andeffectual against any demand made upon the society by any otherperson&

Section % :iabilities of past member and estateof deceased member

/ Sub$ect to the provision of sub-section 0 the liability ofa past member or of the estate of a deceased memberof a co-operative society for the debts of the society asthey existedL

a in the case of a past member, on the date on !hichhe ceased to be a member.

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convened !ithin a period of six months of close of the financial yearto transact the business specified in sub-section 2 of this section&

0 here a Co-operative Society so desires, its byela!s mayprovide for a representative general body dra!n from the members,to be constituted in such a manner and !ith such functions asspecified in the byela!s& Any reference in this Act to the generalbody shall apply to the representative general body !here it exists&

Provided !here the area of operation of a Co-operative Societyextends to one or more revenue +andals or its membership exceedst!o thousand, it may constitute a representative general body thetotal number of members of !hich shall not exceed 011 in Co-operative Societies having membership of 0,111 and less and 511in any other case&

Provided, further that the representative general body shall nothave the right to amend the byela!s of the Co-operative Societyexcept those in relation to !hich the byela!s have delegated thepo!er of amendment to the representative general body&

2 Sub$ect to the other provisions of this Act, and of the byela!sthe follo!ing matters shall be dealt !ith by the general body&

/ perate !ithout any restrictions imposed on area ofoperations and membership and choose any line of

economic activity as desired by the members.0 election of %irectors of the 9oard.2 removal of %irectors of the 9oard and filling up of

vacancies.5 consideration of the annual report presented by the

9oard.6 appointment and removal of statutory auditors and

internal auditors.4 consideration of the auditors report and audited

statement of accounts.8 consideration of audit compliance report.? report on action ta)en on in#uiry report under

section 45 , if any.3 disposal of net surplus./1 revie! of operational deficit, if any.// approval of the long-term perspective plan and the

annual operational plan./0 decide on the organisation structure and staffing

including recruitment policies, service conditions andremuneration, as approved by the 9oard.

/2 initiate measures for $oint ventures, partnerships,

subsidiaries and strategic alliances !ith co-operativesocieties and other corporates.

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/5 approval of the annual budget./6 creation of specific reserves and other funds./4 revie! of actual utili*ation of reserve and other funds./8 revie! on membership of the co-operative society in

otherCo-operative Societies.

/? partnership !ith other co-operative societies./3 revie! of annual report and accounts of any subsidiary

organi*ation.01 revie! of annual report and accounts of any

organi*ation collaborated !ith.0/ appeal of a person !hose application for membership

has been re$ected or !hose membership has beenter

Documents

Final Act (1).doc