(1) Notwithstanding anything contained in this Act, or the rules made thereunder where a compromise or - 19 - repayment of liabilities and reconstruction of societies.
arrangement is proposed between.-
(a) a society and its creditors or any class of them, and
(b) a society and its members, the Registrar may on the application of the society or of any member or of any creditor of the society or, in the case of a society which is being wound up by the liquidator, order a meeting of the members, or creditors or both, as the case may be, to be called, held and conducted in such manner as may be prescribed:
Provided that the Registrar may, on his own motion, order such a meeting to be called for the purpose of affecting a compromise or arrangement.
(2) If a majority in number representing three-fourths of the members or three-fourths of the total amount of valuation due to creditors, as the case may be, present and voting in person at the meeting agree to any compromise or arrangement the compromise or arrangement shall, if confirmed by the Registrar, be binding on all members or all the creditors, as the case may be, and also on the society, or in the case of a society which is being wound up, on the liquidator;
Provided that the Registrar shall not confirm a compromise or arrangement unless he is satisfied that all the members or creditors, as the case may be, whose interests are affected by such compromise or arrangements, had notice of such meeting;
Provided further that in case of Co-operative Bank the Registrar shall not confirm the compromise, or arrangement, save with the previous sanction in writing of the Reserve Bank.
(3) When an order canceling a meeting is passed under sub-section (1) or the proviso thereof for considering any compromise or arrangement between a society and its creditors or any class of them, the Registrar may give notice of such order to a Civil Court in which proceedings, whether instituted before or after the order, in respect of any liability of the society due to a creditor to whom a copy of the order is - 20 - posted, are pending and on receipt of such notice the Civil Court shall stay the proceedings, If no such compromise of arrangement is confirmed under subsection(2) the Registrar shall inform the Civil Court accordingly and the proceedings which may have been stayed, shall be resumed.
(4) If a compromise or arrangement between a society and its creditors or any class of them is confirmed under sub-section (2) the proceedings, if any, stayed under sub-section (3) shall abate and no proceedings shall lie in a Civil Court in respect of any liability of the society to which the compromise or arrangement relates.
(5) The Registrar may, with the previous approval of the State Government, exempt any class of creditors from the operation of this section or any provisions thereof.
(6) A compromise or arrangement confirmed by the Registrar shall not be called in question in any Civil Court.
(7) If a creditor in respect of whom a compromise or arrangement has been confirmed by the Registrar under sub-section (2), fails to receive the amount payable to him under such compromise or arrangement after due notice to do so within the period specified in such notice, the society or the liquidator, as the case may be, shall deposit the amount in such manner as may be directed by the Registrar. On the making of such deposit the amount payable to the creditor under the compromise or arrangement shall be deemed to have been paid to the extent of the deposit.
(8) A compromise or an arrangement between a society and its creditors or any class of them confirmed by the Registrar under sub-section (2) shall cease to be in force as soon as the whole amount of the liability determined thereunder has been or is deemed to have been paid whether under the provisions of this section or otherwise notwithstanding that the period originally stipulated for the discharge of such liability has not expired.
(9) After such compromise or arrangement has ceased to be in force no further claim shall remain against the - 21 - society, or against any property, movable or immovable which it may acquire thereafter, in respect of the liability which had been the subject of the compromise or arrangement, and the society shall be free to conduct its normal business.
Action and liability of Banks under moratorium.
17-A Where an order of moratorium has been made by the Central Government under sub-section (2) of section 45 of the Banking Regulation Act, 1949 (No. 10 of 1949) in respect of Co-operative Bank, the Registrar with the previous approval of the Reserve Bank in writing may, during the period of moratorium, prepare a scheme,-
(i) for the reconstruction or re-organisation of the Co-operative Bank; or
(ii) for the amalgamation of the Co-operative Bank with any other Bank.
Liability of new Bank to repay to the Deposit Insurance Corporation.
17-B Notwithstanding anything contained in this Act, where a Co-operative Bank being an insured bank within the meaning of the Deposit Insurance Corporation Act, 1961 (No.47 of 1961) is amalgamated or in respect of which a scheme of compromise or arrangement or of reconstruction or reorganisation has been sanctioned and the Deposit Insurance Corporation has become liable to pay to the depositors of the insured bank under sub-section
(2) of section 16 of that Act, the bank with which such insured bank is amalgamated or the new Cooperative bank formed after such amalgamation or, as the case may be, the insured bank or transferee bank shall be under an obligation to repay to the Deposit Insurance Corporation in the circumstances, to the extent and in the manner referred to in section 21 of the Deposit Insurance Corporation Act, 1961 (No. 47 of 1961) Cancellation of registration.
18 (1) The Registrar shall make an order cancelling the registration of a society if it transfers the whole of its assets and liabilities to another society, or amalgamates with another society, or divides itself into two or more societies or it is de-registered under the provisions of sub-section (1) of section 24 or it is wound up under section 102. The society shall, from the date of such order of cancellation, be deemed to be dissolved and shall cease to exist as a corporate - 22 - body.
(2) Notwithstanding anything contained in this Act if any proceedings relating to the winding up or dissolution of a society are pending immediately before the commencement of this Act, such proceedings shall after such commencement be disposed of in accordance with the provisions of the law under which such society was registered or deemed to be registered.
De-registration of societies.
18-A (1) If the Registrar is satisfied that any society is registered on misrepresentation made by applicants, or where the work of the society is completed or the purposes for which the society has been registered are not served, he may, after giving an opportunity of being heard to the committee, de-register the society.
(2) When a society is de-registered under the provisions of sub-section (1), the Registrar may, notwithstanding anything contained in this Act, make such incidental and consequential order including appointment of official assignee as the circumstances may require.
(3) Subject to the rules made under this Act, the official assignee shall realize the assets and liquidate the liabilities within a period of one year from the date he takes over the charge of property, assets, books, records and other documents. The period aforesaid may, at the discretion of the Registrar, be extended from time to time, so however, that the total period does not exceed three years in the aggregate.
(4) The official assignee shall be paid such remuneration and allowances as may be prescribed.
(5) The powers of the Registrar under sub-section (1) and (2) shall not be exercised by any officer below the rank of a Joint Registrar of Co-operative Societies.
CHAPTER III MEMBERS, THEIR RIGHTS, LIABILITIES AND PRIVILEGES - 23 - Persons who may become members.
19 (1) No persons shall be admitted as a member of a society except the following, namely:-
(a) an individual competent to contract under section 11 of the Indian Contract Act, 1872 (No. 9 of 1872);
(b) any other society;
(c) a public trust registered under the Chhattisgarh Public Trusts Act, 1951 (No. 30 of 1951);
(d) a firm, company or any other body corporate, not having minors as partners or directors, registered established or constituted, as the case may be, under any law for the time being in force;
(e) a society registered under the Chhattisgarh Societies Registration Act, 1959 (No. 1 of 1960), as may be approved by the State Government in this behalf by general or special order;
(f) the State Government:
Provided that the provisions of clause (a) shall not apply to,–
(i) an individual seeking admission to a society exclusively formed for the benefit of students;
(ii) a minor acting through a guardian appointed by the Court.
(2) Notwithstanding anything to contrary in this Act or rules or in the byelaws of a society, where the State Government has contributed to the share capital of a society, the liability of the State Government shall be limited to the face value of the shares held by it.
(2-A) Notwithstanding anything contained in this Act or rules made there under or in the byelaws of a resource society or consumers society, as the case may be, if any person duly qualified for admission as a member under the provisions of this Act and the byelaws of that Society makes an application for membership of such Society he shall be deemed to have been admitted as a member of such Society from the date of receipt of the application in the office thereof;
Provided that the Registrar may, either on his own motion at any time or on an application by - 24 - the society or any aggrieved person made within fifteen days from the aforesaid date and after giving reasonable opportunity to the society or person concerned by order, declare such person as not eligible for membership of such society for the reasons mentioned therein, within forty five days from the date of receipt of application by the Registrar.
(3) Where a student, who is not competent to contract under section 11 of the Indian Contract Act, 1872 ( 9 of 1872), desires to become a member of a society formed exclusively for the benefit of students, his application for the registration of a society or his application for membership shall be accompanied by a written undertaking from his guardian or other person competent to contract under section 11 of the said Act in the prescribed form, in respect of the liability of the student as a member.
(4) Where a person is refused admission as a member in a society, the decision refusing admission shall be communicated by the society to that person within thirty days of the date of such decision.
(5) No society shall, without sufficient cause, refuse admission to membership to any person, duly qualified there for under the provisions of this Act and the byelaws of the society.
(6) Any person aggrieved under sub-section (4) or subsection (5) may appeal to the Registrar within ninety days of the date of rejection.
(7) The decision of the Registrar in appeal shall be final and the Registrar shall communicate his decision to the parties within thirty days from the date thereof.
Disqualifications of member.
19-A No person shall be eligible for admission as member and any member shall cease to be a member of a society, if –
(a) he is an applicant to be adjudicated or is an undischarged insolvent;
(b) he has been sentenced for an offence involving moral turpitude and a period of five years has not elapsed from the date of expiry of sentence;
(bb) he has been sentenced for an offence under the provisions of the Protection of Civil Rights - 25 - Act, 1955 (No. 22 of 1955) and a period of six years has not elapsed from the date of expiry of sentence;
(c) he or any member of his family, having common interest with him, carries on business similar to one carried on by the society:
Provided that the provisions of clause (b) shall not apply to a person seeking admission as member of a society exclusively formed or to be formed for the reclamation of Vimukta Jatis.
(d) If he is disqualified under section 48-A of the Act:
(e) if he is a person who has been dismissed from the service of any co-operative institution or Government service.
(f) In case of a Primary Agriculture Credit Cooperative Society, he is not a Bhumiswami, occupancy tenant or a Government lessee holding agricultural land;
Explanation.- For the purposes of this sub-section-
(i) “Vimukta Jatis” means such tribes as the State Government may, from time to time, by general or special order, declare as Vimukta Jatis for the purpose of this sub-section;
(ii) the business carried on by a trader including that of money lending shall be deemed to be similar to the business carried on by a marketing society.
Disqualification for membership of committee and for representation.
19- AA No Person shall be eligible for election as a member of the committee of a society and shall cease to hold his office as such if he suffers from such disqualification as may be prescribed. No society shall elect any member as its representative to the committee of any other society or to represent the society in other society, if he suffers from such disqualification, as may be prescribed:
Provide that, if a member suffers from any of the disqualification prescribed under this section- Effect of subsequent disabilities.
19-B If any person having been admitted as a member of a society subsequently becomes subject to any of the - 26 - disqualifications specified in section 19-A such person shall cease to be a member of the society and the Registrar shall declare his seat to be vacant.
Expulsion of members.
19-C (1) The committee may, by a resolution passed by three-fourth majority of the members present and voting at a meeting held for the purposes, expel a member if he,-
(a) intentionally does any act likely to injure the credit of the society or bring it to disrepute ;
or
(b) wilfully deceives the society by false statements; or
(c) carries on any business which comes or is likely to come into conflict with the business carried on by the society; or
(d) persistently makes default in payment of his dues or fails to comply with any provisions of the bye-laws;
Provided that no such resolution shall be valid unless the member concerned has been given seven day’s notice, either personally or by registered post, of the proposal to expel him and has been given an opportunity to represent his case to the committee.
(1-A) Any person aggrieved by the resolution of the Committee under sub-section (1) may appeal before the Registrar within 30 days of the communication of such resolution.
(2) Notwithstanding anything contained in the Act, or rules or bye-laws made there under, where it appears to the Registrar that it is necessary and desirable in the interest of the society to expel a member from the society for his indulging in any of the activities specified in sub-section (1), he may call upon such member and the society, to explain within a period to be specified by him, why such member should not be expelled from the society. If the member or society fails to submits his or its explanation, within the specified period or after considering the explanation, if received, the Registrar may pass an order expelling a member from the society
(3) No person who has been expelled shall be eligible for re-admission as a member of the co-operative for - 27 - a period of one year from the date of such expulsion.
(4) Expulsion of a member from a society may involve forfeiture of shares held by the member in such society.
Nominal members. 20 Notwithstanding anything contained in section 19, a society may admit any person as a nominal member who shall have no share either in the management or profits of a society and shall not be subject to any contributory liability in the case of winding up the society.
No rights of membership to be exercised till due payments are made.
21 No member shall exercise the rights of a member unless he has made such payment to the society in respect of membership or acquired such interest in the society as may be prescribed or as may be specified in the bye-laws of such society.
Votes of members. 22 (1) Every member of the society shall have one vote in the affairs of the society.
(2) (a) The voting right of federal society shall be so regulated that the members, which are societies, do not have less than four-fifths of the total number of votes in the general meeting of such society.
(b) In case of federal society the voting rights of individual members (which term shall include public trust, firm, company or body corporate, society registered under the Chhattisgarh Society Registrikaran Adhiniyam, 1973 (No 44 of 1973), and State Government but shall not include a co-operative society) shall be regulated in such manner as may be prescribed.
(3) every affiliated co-operative society through its properly authorised representative and every delegate referred to in clause (b) of sub-section (2) shall have one vote in the general meeting.
(4) The quorum for the meeting shall, unless otherwise provided in the byelaws of a society, be one-fifth of the total number of delegates and representatives of the societies:
Provided that the delegates shall not at any time in the meeting exceed one-fifth of the member representatives of the societies.
(5) The elections of delegates shall be held in accordance with the provisions prescribed for - 28 - election of the members of the committee.
(6) Any vacancy of a delegate caused on account of cessation of membership or otherwise, shall be filled in by delegates by co-opting one of the individual members of the group to which the vacancy relates.
(7) unless otherwise directed by the Registrar in respect of any particular society the delegates on the committee shall not at any time exceed one-third of the number of representatives of societies(fractions being neglected)
(8) In the case of equality of votes the Chairman shall have a second or casting vote.
Manner of exercising vote.