(1) Every member of a society shall exercise his vote in person and no member shall be permitted to vote by proxy:
Provided that subject to any rules made under this Act,-
(i) (a) a society which is a member of another society may appoint one of its members as a representative to vote on its behalf,
(b) a group of individual members formed by the society in accordance with its byelaws may elect one of the members in the group as a delegate to vote on their behalf.
(ii) the State Government may nominate one of its officers as its representative, to vote or otherwise participate in its behalf in the affairs of the society of which such society or the State Government is a member;
(iii) a public trust which is a member of a society may appoint, in writing, any one of its trustees to vote on its behalf;
(iv) a firm which is a member of a society may appoint, in writing, any one of it major partners to vote on its behalf; and
(v) a company or any other body corporate which is a member of a society may appoint in writing, any of its directors or officers to vote on its behalf.
(2) Where a share is held jointly by more than one person and if,-
(i) in respect of such share a share certificate is - 29 - issued by the society, the person whose name stands first in such share certificate; and
(ii) in respect of such share no share certificate is issued by the society, the person whose name stands first in the register of members maintained by such society;
shall have the right to vote.
Restriction on holding of share capital by a member 24 In any society, no member, other than the State Government or any other society, shall,-
(a) hold more than such portion of the total share capital of the society not exceeding one-fifth thereof as may be prescribed; or
(b) have or claim any interest in the shares of the society exceeding twenty thousand rupees;
Provided that the State Government may, by notification, specify in respect of any class of societies a maximum exceeding one-fifth of the share capital or twenty thousand rupees, as the case may be.
Restrictions on transfer of shares or interest.
25 (1) The transfer of a share or interest of a member in the share capital of a society shall be subject to the restrictions as to the maximum holdings specified in section 24.
(2) No transfer by a member of his share or interest in a society shall be valid unless,–
(a) the member has held such share or interest for not less than one year;
(b) the transfer is made to the society or to a member of the society; and
(c) the transfer is approved by the committee.
Transfer of interest on death of member.
26 (1) On the death of a member, a society may transfer the share or interest of the deceased member to the person nominated in accordance with the rules made in this behalf, or, 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 or legal representative, as the case may be, a sum representing the value of such member’s interest, as ascertained in accordance with rules or bye-laws.
(2) A society may pay all other moneys due to the - 30 - deceased member from the society to such nominee, heir or legal representative, as the case may be.
(3) All transfers and payments made by a 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.
Share or deposit or interest not liable to attachments.
27 Subject to the provisions of section 39 the share or interest or deposit of a member in the capital or working capital of society or in the loan stock issued by a housing society or in the funds raised by a society from its members by way of savings deposit or by compulsory deductions made by it from wages or in the form of surcharge on the value of sale or supply of goods to members, shall not be liable to attachment or sale under any decree or order of a court for or in respect of any debt or liability incurred by the members or past members and accordingly neither a Receiver under the Provincial Insolvency Act, 1920 (No. 5 of 1920), nor any such person or authority under any corresponding law for the time being in force shall be entitled to , or have any claim on such share or interest or deposit.
Rights of members to see books, etc.
28 (1) Every society shall keep open to inspection for its members free of any charge, at all reasonable times at the registered address of society,-
(a) a copy of this Act;
(b) a copy of the rules;
(c) a copy of the bye-laws of the society;
(d) a register of members,-
(e) the last audited annual balance sheet, the profit and loss account; and
(f) the minutes of the general meetings.
(2) All registers and record of a society except books and other documents relating to accounts other than one’s own shall be open to inspection in the office of the society by any member of such society on payment of such fee as may be specified in the byelaws.
(3) Subject to such conditions and on payment of such - 31 - fees as may be specified in the bye-laws, the society shall, on an application made by any member thereof grant him a certified copy of such records or registers or extracts thereof.
Liability of a past member or estate of deceased member.
29 (1) Subject to the provisions of sub-section (2), the liability of a past member or of the estate of a deceased member of a society for the debts of the society as they stood:-
(a) in case of a past member, on the date on which he ceased to be a member, and
(b) in case of a deceased member, on the date of his death;
shall continue for a period of two years from such date.
(2) Where a society is ordered to be wound up under any provisions of this Act, the liability of a past member or of the estate of a deceased member who ceased to be a member or died, within two years immediately preceding the date of the order for 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 stood on the date of his ceasing to be a member or of his death as the case may be.
Insolvency of members.
30 Notwithstanding anything contained in the Provincial Insolvency Act, 1920 (5 of 1920), in an insolvency proceeding against a member of a society, the dues of the society shall have priority over all other dues except those payable to Government.
CHAPTER IV - 32 - DUTIES, PRIVILEGES, PROPERTYAND FUNDS OF SOCIETIES Societies to be body corporate.
31 The registration of a society shall render it a body corporate by the name under which it is registered, having perpetual succession and a common seal, and with power to hold property, enter into contracts, institute and defend suits and other legal proceedings and to do all things necessary for the purposes for which it was constituted.
Address of society and display of name.
32 (1) Every society shall have an address registered in accordance with the rules to which all notices and communications may be sent, and shall send a notice in writing to the Registrar of any change therein within thirty days of the change.
(2) Every society shall display its name and the address of its registered office and the words “Registered Under Chhattisgarh Co-operative Societies Act, 1960” in legible characters in conspicuous position-
(a) at every office or place at which it carries on business;
(b) in all notices and other official publications;
(c) on all its contracts, business letter, orders for goods, invoices, statements of account, receipts and letters of credit; and
(d) on all bills of exchange, promissory notes, endorsements, cheques and orders for money it signs or that are signed on its behalf.
(3) The name of every society shall contain the words “Co-operative” and “limited” or their equivalent in official language of the State.
Register of members 33 (1) Every society shall keep a register of its members and enter therein the following particulars, namely:-
(a) the name, address and occupation of each member;
(b) the share held by each member in the case of a society having share capital;
(c) the date on which each person was admitted as a member;
(d) the date on which any person ceased to be a member; and
(e) such other particulars as may be prescribed:
Provided that, where a society has under this - 33 - Act, permitted a member to transfer his share or interest on death, to any person, the register shall also show against the member concerned the name of the person entitled to the share or interest of the member and the date on which the nomination was recorded.
(2) The register shall be prima facie evidence of the date on which any person was admitted to the society as a member and of the date on which he ceased to be member.
Proof of entries in society’s books.
34
(1) A copy of any entry in the book of a society regularly kept in the course of its business, shall, if certified in such manner as may be prescribed, be received, in any suit or legal proceedings or for any other purposes as prima facie evidence of such entry and shall be admissible in evidence in respect of the matter, transactions and accounts therein recorded in the same manner and to the same extent as the original entry.
(2) Copies given by a society of any document obtained and kept by it in the course of its business or any entries in such document shall, if certified in the prescribed manner, be admissible in evidence in any suit or legal proceedings or for any other purpose in the same manner and to the same extent as the original document, or the entries therein, as the case may be.
(3) No officer of a society and no officer, in whose office the books of a society are deposited after liquidation shall, in any legal proceedings to which the society or the liquidator is not a party, be compelled to produce any of the society’s books or documents, the contents of which can be proved under this section or to appear as a witness to prove the matters, transactions and accounts therein recorded, except under order of the court, or the arbitrator, made for special cause.
Societies to give pass book to members.
34-A (1) A society which gives loans to its members or a society or class of societies which the State Government may notify in the official Gazettee, from time to time, shall furnish to each member a pass book, which shall contain an account of the transactions with the member, such as, the date of - 34 - the transaction, the amount of loan advanced, the rate of interest, the repayment made by the member, the amount of the principal and interest due and such other particulars as may be prescribed. The necessary entries shall be made in the pass book from time to time which shall be counter signed by such office-bearer of the society as may be authorised in this behalf by the committee. For this purpose, the member shall be bound to present the passbook to such office-bearer and if the passbook is required to be kept for some time for making the necessary entries the member shall be granted a receipt there of, by such office-bearer.
(2) The entries in the passbook duly made shall, until the contrary is proved, be prima facie evidence of the account of transactions of the society with the member.
Exemption from compulsory registration or instruments.
35 Nothing in clause (b) and (c) of sub-section (1) of section 17 of the Indian Registration Act, 1908 (16 of 1908) shall apply to, –
(a) any instrument relating to share in a society notwithstanding that the assets of the society consist in whole or in part of immovable property; or
(b) any debentures issued by any such society and not creating, declaring, assigning, limiting or extinguishing any right, title or interest to or in immovable property except in so far as it entitles the holder to the security afforded by a registered instrument whereby the society has mortgaged, conveyed or otherwise transferred the whole or part of its immovable property or any interest therein to trustees upon trust for the benefit of the holder of such debentures; or
(c) any endorsement upon, or transfer of, any debenture issued by any such society; or
(d) any declaration made by a member in favour of a society for creating a charge on land under section 41 and its assignment by the said society in favour of the financing bank or the federal society to which it is affiliated and further assignment by such financing bank or - 35 - federal society in favour of the Chhattisgarh State Co-operative Bank Limited, or any other federal society.
Explanation.- For the purposes of this section, a financing bank shall include the Reserve Bank of India, the State Bank of India, the corresponding new bank specified in First Schedule to the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (No. 5 of 1970), and such other Bank as the State Government may, from time to time, by notification, specify in this behalf.
Borrowings. 36 A society may receive deposits and loans from the State Government, Banks, Financing bodies, Corporate Bodies under any law, operating in the State and individuals under the provision of the byelaws of the society. It may also receive funds as a share capital under specific agreement or approved project by way of granting nominal membership.
Restrictions on loans.
37 (1) No society shall make a loan to,-
(a) any person who is not a member;
(b) any member on the security of its own shares;
(c) any member on the security of a nonmember;
Provided that a society may make loans to another society and/or nominal member as provided in the byelaws of the society.
(1A) a society making a loan to its members who have been provided with “Bhoo-Adhikar Avam Rin Pustika” prescribed under section 114-A of the Chhattisgarh Land Revenue Code, 1959 (No. 20 of 1959) shall enter all transactions of loans; advances and recoveries thereof in the aforesaid Bhoo- Adhikar Avam Rin-Pustika.
(1B) Notwithstanding anything contained in the Act, rules made thereunder and byelaws of the society, in case of an omission in making entry of a loan or advance made to members of the society, it shall be presumed that no such loan or advances has been made unless proved otherwise by the society;
- 36 -
(2) Notwithstanding anything contained in sub-section
(1), a society may make a loan to a depositor on the security of his deposit.
(3) The Registrar may, by general or special order, prohibit or restrict the lending of money on the security of movable property or on the mortgage of immovable property by any society or class of societies.
(4) If an officer or employee of a society entrusted with the work of making an entry of any transaction of loans, advances and recoveries thereof in the “Bhoo- Adhikar Avam Rin Pustika” referred to in subsection (1-A) fails to make such entry in the said Pustika the Registrar may by order impose a penalty on him of any amount not exceeding rupees five hundred. The order imposing a penalty shall be enforced in accordance with the provisions of section 85.
Society not to recover or receive interest greater than the principal.
37-A Notwithstanding anything contained in any agreement or any law for the time being in force, no society shall, in respect of any lone advanced by it to a member belonging to scheduled caste or scheduled tribes, or other members owing 5 acre irrigated or 10 acre un-irrigated land, whether before or after commencement of the Madhya Pradesh Cooperative Societies (Second Amendment) Act 1979 which is repayable within a period not exceeding ten years from the date of its advance, charge, recover or receive towards interest thereon during the currency of such loan a sum greater than the principal and any sum charged, recovered or received in excess thereof shall, if the loan is subsisting be adjusted, towards repayment of the Principal till it is fully repaid and in any other case, shall be refunded to the debtor member within sixty days of the date on which the payment towards interest exceeds the limit aforesaid:
Provided that nothing in this Section shall apply to loans advanced by a Development Bank and an Urban Co-operative Bank.
- 37 - Restrictions on other transactions with non-members.
38 Save as provided in section 36 and 37, the transactions of a society with persons other than members shall be subject to such restrictions, if any, as may be prescribed.
Charge and set-off in respect of share or interest of members.
39 A society shall have a charge upon the share or interest in the capital and on the deposits of a member, past member or deceased member and upon any dividend, bonus or profits payable to a member, past member or deceased member, in respect of any debt or outstanding demand owing to the society from such member or past member of deceased member and may set-off any sum credited or payable to a member, past member or deceased member in or towards payment of any such debt or outstanding demand:
Provided that no financing bank shall have a charge upon any sum invested in such bank by a society as reserve fund if such bank is not the sole creditor of the society or upon any sum invested in such bank from any Provident Fund nor shall such bank be entitled to set-off any such sum credited or payable to the society in or towards payment of any debt or outstanding demand owing to such bank from such society.
Prior claim of society on certain assets.