Responsibilities of Managing Committee & Members Rights in a Society

Members Rights in a Society

Section 16. Persons who may become members.

No person shall be admitted as member of a co-operative Society except the following, namely:

  • an individual competent to contract under section 11 of the Indian Contract Act, 1872( 9 to 1872);
  • any other co-operative society;
  • the Government 2 [ and]
  • 3[d] such class or classes of persons or association of persons, corporate bodies, firms or joint stsock companies, as provided in the bey laws of the society;

Provided that every person eligible for admission s a member of a co-operative credit and service society, the farmers service society or primary agricultural development bank shall be deemed to have been admitted as a member thereof on the expiry of 60 days from the date of receipt of the application for such admission in the office of the society

Provided further that the Registrar, of his motion or on a complaint made by the Committee of the Society concerned or by any aggrieved person may, notwithstanding anything to the contrary contained in this Act, order or for the removal of the person deemed to have been admitted to such membership, if, for reasons to be recorded by the Registrar, he is not eligible to be a member of such society and every such order in the case of complaint made by the committee of the society or of any aggrieved person shall be passed within thirty days of the receipt of the complaint.

Section 17. Restrictions on individual membership

No individual shall be admitted as member of a central or apex society " unless such society has been exempted by the Registrar by a general or special order].

Section 18. Associate members

A co-operative Society may admit any person [ for self-help group] or a co-operative society or any other statutory body notified by the Government in this behalf as an associate member in accordance with its bye-laws.

[ Explanation . – For the purposes of this sub-section " self-help " means and includes a group of persons for their economic development]

An associate member shall not be entitled to any share in any form whatsoever, in the assets or profits of the co-operative Society.

Save as provided in this act, an associate member shall have such privileges and rights of a member and be subject to such liabilities of a member as may be specified in the bye-laws of the Society.

Section 19. Member not to exercise rights till due payment made

No member of a co-operative society shall exercise the rights of a member unless he has made such payments to the society in respect of a membership or has acquired such interest in the society as may be specified in the bye-laws.

19. A- Voting rights. - Any person desirous of making a deposit in any unit of Co-operative Credit Structure other than co-operative banks, shall become a member of that society and on admission as such, he shall be entitled to full membership voting rights.

Section 20. Vote of members

Every member of a co-operative society shall have one vote in affairs of the Society:

Provided that

  • In the case of equality of votes, the chairman shall have a second or casting vote
  • An associate member shall not have the right to vote
  • Where the Government is a member of the co-operative Society, each person nominated by the Government on the committee shall have one vote.
  • A member in default of any sum due from him to the society shall not be eligible to exercise his right to vote. Explanation :- For the purpose of this clause, the expression, ‘member’ does not include a society.
  • A society brought under the process of winding up in liquidation shall not be eligible to exercise its right of vote.

Section 21. Manner of exercising vote

Every member of a co-operative Society shall exercise his vote in person and no member shall be permitted to vote by proxy:

Provided that :

  • (a) A co-operative society which is a member of another co-operative society may, subject to the rules, appoint one of its committee members through a resolution of its committee to vote on its behalf in the affairs of the other society.
  • (b) In case of a primary society which is a member of another co-operative society may, subject to the rules, appoint one of its members to vote on its behalf in the affairs of other Society.

Section 22. Restriction on transfer of shares or interest

The transfer of the share or interest of a member, in the capital of a co-operative society shall be subject to such conditions as to the maximum holding as are specified in Section 6 [ ]

[ provided that no transfer shall be allowed unless such shares have been held by the member at least for a period of two years.

Explanation: For the purposes of this section "Capital” – For the purposes of this section " Capital refers to the capital owned by members in their individual capacity in the society’s funds]

Section 23. Transfer of interest on death of members

On the death of a member, a co-operative society may transfer the share or interest of the deceased member to the person nominated in accordance with the rules made in this behalf and if there is no person so nominated, to such person as may appear to the committee to be the heir or legal representative of the deceased member or pay to such nominee, heir to legal representative, as the case may be, a sum representating the value of such member’s share or interest as ascertained in accordance with the rules or bye-laws

Provided that :

  • In the case of a co-operative Society with unlimited liability, such nominee, heir or legal representative, as the case may be, may require payment by the Society of the value of the share or interest of the deceased member ascertained as aforesaid.
  • In the case of a co-operative society with limited liability, the society shall transfer the share or interest of the deceased member to such nominee, heir or legal representative as the case may be, being qualified in accordance with the rules and bye-laws for membership of the society, or on his application within one month of the death of the deceased member, to any person specified in the application who is so qualified
  • no such transfer or payment shall be made except with the consent of the nominee, heir or legal representative, as the case may be.

A co-operative society shall, subject to the provisions of section 52 and unless within six months of the death of member prevented by an order of a competent court, pay to such nominee heir in legal representative as thecase may be, all other moneys due to the deceased member from the society.

all transfers and payment made by a co-operative society in accordance with the provisions of this section shall be valid and effectual against any demand made upon the society by any other person.

Section 24. Liability of past member and estate of deceased member

Subject to the provisions of sub-section(2) the liability of the past member or of the estate of a deceased member of a co-operative society of the debts of the society as they existed

  • in the case of a past member on the date on which he ceased to be a member
  • in the case of a deceased member, on the date of his death, shall continue for a period of two years from such date

Where a co-operative society is ordered to be wound up under section 105, the liability of a past member or of the estate of a deceased member who ceased to be member or died within two years immediately proceeding the date of the order of winding up, shall continue until the entire liquidation proceedings are completed, but such liability shall extend only to the debts of the society as they existed on the date of his ceasing to be a member or death, as the case may be.

Responsibilities of Managing Committee

Section 28. Election and tenure of Committees

The Committee of each Society shall, before the expiry of the terms of its committee arrange for the election of a committee in accordance with its bye-laws failing which the Registrar shall arrange to hold such elections within a period of ninety days after the expiry of the term of the committee at the cost of the Society and the elected members of the outgoing committee shall be debarred from contesting the elections of the committee of any co-operative society for a period of five years from the date of the expiry of the term of the outgoing committee.

Provided that no such order shall be passed by the Registrar unless an opportunity of being heard has been given.

Section 95 (Audit)

(1) The Government or authority authorized by the Government shall prescribe the minimum qualifications and experience of auditors or empanelled auditing firms that shall be eligible for auditing accounts of Co-operative societies, approve the panel of auditing firms and shall also fix their remuneration.

(2) Every Co-operative Society shall get its accounts audited at least once in each year , within six months of close of year as per the guidelines issued by the Registrar.In case of failure to do so, the Registrar shall get audited at the expense of the Society.

(3) A person shall not be qualified for appointment as auditing firm of a society, if the proprietor, partner or director of such firm is :-

(a) an officer or a member or employee of that co-operative society;

(b) indebted to that co-operative society; or

(c) who has given any guarantee or provided any security in connection with the indebtedness of any third person to that co-operative society for an amount exceeding five thousand      rupees.

(4) If an auditing firm after its appointment becomes subject to any of the disqualifications specified in subsection (3), it shall be deemed to have vacated its office as such.

Section 97. Inspection of Societies

The Registrar or any person authorized by general or special order in this behalf, by the Registrar, may inspect a co-operative society. For the purpose of inspection he shall at all time have access to all books, accounts papers, vouchers, securities, stock and other property of the Society and may in the event of serious irregularities discovered during the inspection take them into custody and shall have power to verify the cash balance of the Society and subject to general or special order of the Registrar to call a meeting of the Committee or a general meeting. Every officer or member of the Society shall furnish such information as he may require.

Section 120. Copy of Act, rules and bye-laws

to be open to inspection. –Every co-operative Society shall keep a copy of this Act, the rules and its bye-laws and also a list of its members open to inspection free of charge at all reasonable times at the registered address of the society.

(2) Every Co-operative society may provide access to every member of a co-operative society to the books, information and accounts of the co-operative society kept in regular transaction of its business with such member by charging fees if any prescribed by the Registrar.

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