(1) Notwithstanding anything contained in any law for the time being in force, but subject to any prior claim of the State Government in respect of land revenue or any money recoverable as arrears of land revenue and to any claim of a development bank arising out of a loan granted at any time whatsoever under the Chhattisgarh Sahakari Krishi Aur Gramin Vikas Bank Adhiniyam, 1999 ( 20 of 2000), any debt or outstanding demand owing to a society by any member or past member or deceased member, shall be a first charge upon the crops and other movable property belonging to such member, past member or forming part of the estate of the deceased member, as the case may be;
Provided that where any prior claim of the State Government arises out of a loan granted under the Land Improvement Loans Act, 1883 (19 of - 38 - 1883) or the Agriculturists Loans Act, 1884 (12 of 1884) and such loan is granted after the grant of loan by a society the loan granted by the society shall, notwithstanding anything contained in the said enactments, have priority over such claim of the Government.
(2) No person shall transfer any property, which is subject to a charge under sub-section (1) except with the previous permission in writing of the society which holds the charge;
Provided that it shall always be lawful for a member or past member to create a charge in favour of a Development Bank under the Chhattisgarh Sahakari Krishi Aur Gramin Vikas Bank Adhiniyam, 1999 ( 20 of 2000), for dues thereof.
(3) Notwithstanding anything contained in any law for the time being in force any transfer of property made in contravention of the provisions of sub-section (2) shall be void as against any claim of the society in respect of any debt or outstanding demand owing to it which is a first charge on such property under subsection (1).
First charge of Cooperative societies on certain assets.
41 (1) Notwithstanding anything contained in any law for the time being in force, but subject to any prior claim of the State Government in respect of land revenue or any money recoverable as arrears of land revenue or to any of claim of a development bank arising out of a loan granted at any time whatsoever under the Chhattisgarh Sahakari Krishi Aur Gramin Vikas Bank Adhiniyam, 1999 ( 20 of 2000), or by a bank under Chhattisgarh Krishi Udhar Pravartan Tatha Prakirn Upbandha (Bank) Adhiniyam, 1972 (No. 32 of 1973), any debt or outstanding demand owing to a society by a member or past member or deceased member shall be first charge in favour of the society on,-
(a) the land owned by such member or past member or forming part of the estate of the deceased member, as the case may be; and
(b) his interest in any land as a tenant if such member owns such interest;
against which such debt was granted or such - 39 - outstanding demand stands, for and to the extent of the debt, or outstanding demand owing by him:
Provided that where any prior claim of the State Government arises out of the loan granted under the Land Improvement Loans Act, 1883 (No.
19 of 1884), and such loan is granted after the grant of loan by a society, the loan granted by the society shall, notwithstanding anything contained in the said enactment, have priority over such claim of the Government;
(2) No member shall alienate the whole or any part of the land or interest therein which is subject to charge under sub-section (1) until the whole amount borrowed by the member together with interest is paid in full:
Provided that it shall be lawful for a member or a past member to mortgage in favour of-
(i) a Development Bank; or
(ii) a bank under the Chhattisgarh Krishi Udhar Pravartan Tatha Prakirn Upbandha (Bank) Adhiniyam, 1972 (No. 32 of 1973); or
(iii) the State Government,- such land or any part thereof under the rules made under the Chhattisgarh Irrigation Act, 1931 (No. 3 of 1931), for supply of water from a canal to such land or any part thereof.
(3) Any alienation made in contravention of the provisions of sub-section (2) shall be void as against any claim of the society in respect of the loan taken from it under this section;
(4) Intimation in writing shall be given to the Tahsildar about the details of the debt or outstanding demand owing to the society from a member, past member or deceased member in the prescribed manner and the Tahsildar shall on receipt of such information, have it entered in the Record of Rights.
Right of society to acquire and dispose of immovable property.
41-A (1) Notwithstanding anything contained in any law for the time being in force, a society shall have power to acquire agricultural land or interest therein, or any immovable property which has been charged or mortgaged to it by a member in respect of any financial assistance availed of by him, provided the - 40 - said land or interest therein or any other immovable property has been sought to be sold by public auction and no person has offered to purchase it for a price which is sufficient to pay to the society the money due to it;
Provided that only such portion of the property shall be sold as may be reasonably sufficient to satisfy the debt and interest thereon.
(2) A society which acquires land or interest therein or any other immovable property in exercise of the power vested in it under sub-section (1), may dispose it of by sale within a period to be specified by the Registrar in this behalf,
(3) If the society has to lease out any land acquired by it under sub-section (1),pending sale thereof as indicated in sub-section (2) the period of lease shall not exceed one year at a time and the lessee shall not acquire any interest in that property, notwithstanding any provisions to the contrary in any other law for the time being in force.
(4) A sale by a society of land or interest therein in terms of this section shall be subject to the provisions of any other law for the time being in force providing for restrictions on purchase of land by non-agriculturists or in excess of ceiling limits or involving fragmentation of land below a specified limit.
(5) Nothing in this section shall be construed to empower the society to sell any land or interest therein of a person belonging to an aboriginal tribe, which has been declared to be an aboriginal tribe by the State Government by notification under subsection (6) of section 165 of the Chhattisgarh Land Revenue Code, 1959 (No. 20 of 1959) to a person not belonging to such tribe.
(6) Nothing in the Chhattisgarh Ceiling on Agricultural Holdings Act, 1960 (No. 20 of 1960) shall apply to a society acquiring land under sub-section (1) and holding such land till such time as the society is in a position to sell the land in the manner provided in this section or otherwise, at a price which is adequate to cover its dues.
- 41 - Deduction from salary to meet society’s claim in certain cases.
42 (1) Notwithstanding anything contained in any law for the time being in force, a member of a society may execute an agreement in favour of such society providing that his employer shall be competent to deduct from the salary or wages payable to him by the employer, such amount, as may be specified in the agreement and to pay the amount so deducted to the society in satisfaction of any debt or other demand owing by the member to the society.
(2) On the execution of such agreement, it shall not be necessary to have the debt or claim adjudged by any authority and the employer shall, if so required by the society, by a requisition in writing and so long as the society does not intimate that the whole of such debt or demand has been paid, make the deduction in accordance with the agreement and pay the amount so deducted to the society, as if it were a part of the salary, or wages payable on the day as required under the Payment of Wages Act, 1936 (No 4 of 1936).
(3) If after the receipt of a requisition, made under subsection (2), the employer at any time fails to deduct the amount specified in the requisition from the salary or wages payable to the members concerned or makes default in remitting the amount deducted to the society, the society shall be entitled to recover any such amount from the employer as an arrear of land revenue and the amount so due from the employer shall rank in priority in respect of the liability of the employer equal to that of the wages in arrears.
(4) The provisions of this section shall also apply to all such agreements of the nature referred to in subsection (1) as were in force on the date of the commencement of the Act,
(5) Nothing contained in this section shall apply to persons employed in railways, mines and oil- fields.
(6) For the purposes of this section, Drawing and Disbursing Officer shall be deemed to be an employer in respect of a Government servant.
- 42 - Funds and profits. 43 (1) No part of the funds of a society other than the net profits shall be paid by way of bonus or dividend or otherwise distributed amongst its members;
Provided that a member may be paid remuneration on such scale as may be laid down by the bye-laws for any services rendered by him to the society.
(2) A society shall, out of its net profits in any year,-
(a) transfer an amount not being less than twentyfive percent of such profits to the reserve funds unless such society has been, by general or special order, partially or wholly exempted in this behalf by the Registrar; and
(b) pay to the Chhattisgarh Co-operative Union Limited and to such other institutions or unions as may be specified by the Registrar in this behalf, such contribution as may be prescribed.
(c) transfer at least twenty per cent to an equity redemption fund by such societies which have Government equity participation.
(3) No society shall pay dividend to its members at the rate exceeding twenty five per cent, except with the prior approval of the Registrar.
(4) A society may, with the sanction of the Registrar, after one fourth of the net profit in any year has been carried to the reserve fund, contribute not exceeding five per cent of the remaining net profits to any purpose connected with the development of Cooperative movement or charitable purpose as defined in section 2 of the Charitable Endowment Act, 1890 (No. 6 of 1890).
(5) No society shall make a contribution either in money or in kind, either directly or indirectly to an organisation that has an object in furtherance of the interest of a political party or of any religious faith.
Appropriation of profits.
43-A (1) A society earning profit shall calculate the net profit by deducting from the gross profits for the year following:-
(a) all overdue interest accrued on loan accounts.
(b) management charges;
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(c) interest payable on loans and deposits;
(d) audit fee;
(e) working expenses, including repairs, rent, taxes;
(f) depreciation;
(g) bonus payable to employees under the Payment of Bonus Act, 1965 (No. 21 of 1965);
(h) provision for payment of income-tax;
(i) provision for payment of subscription to the State/District Co-operative Union as may be notified;
(j) provision for development fund, bad debt fund, price fluctuation fund, dividend equalisation fund, investment fluctuation fund and such other funds as may be specified by the Registrar in this behalf;
(k) provision for retirement benefits to employees and in the case of societies engaged in consumer goods business, provision for purchase rebate to be paid to the members; and
(l) provision for writing off bad debts and losses not adjusted against any fund created out of profits.
(2) A society may, however, add to the net profits of the year, interest accrued in the preceding year but actually recovered during the year; the net profit thus arrived at, together with the amount of the profits brought forward from the previous year, shall be available for appropriation for the purposes of section 43.
Liability for deficit. 43-B (1) Where a society has an operational deficit in any year, the committee shall place before the general body the reasons therefor.
(2) The general body shall examine the reasons and where the deficit has arisen in the normal course of business of the society the general body based on its examination may resolve to make good the operational deficit wholly or partially from members and or its reserves.
- 44 - Investment of funds 44 (1) Subject to the provisions of sub-section (2) and (3), a society may invest or deposit its funds,-
(a) in Government Savings Bank; or
(aa) in a Co-operative Bank; or
(b) in any of the securities specified in section 20 of the Indian Trusts Act, 1882 (2 of 1882); or
(c) with the federal society of which it is a member or in the purchase of the share thereof; or
(d) with the approval of the Registrar, with any other society with limited liability or in the purchase of the shares or securities or debentures thereof; or
(e) with any bank approved for this purpose by the Registrar and on such terms and conditions, if any, as may be laid down by him in this behalf:
Provided that the approval of the Registrar shall not be necessary under clause (d) if shares are to be purchased to become a member thereof according to the bye-laws of such society.
(2) The reserve fund of a society shall be invested or utilized only in such manner and on such terms and conditions as may be laid down by Registrar in this behalf.
(3) No investment of any of its funds in immovable property, other than funds created for specified purposes, shall be made by a society other than a housing society without the approval of the Registrar.
(4) A society accepting deposits shall maintain, as a cover against such deposits, fluid resources to such extent and in such manner as may be specified by the Registrar from time to time.
Grant of State aid to societies.
45 (1) Any society desirous of having State aid otherwise than by way of contribution towards share capital may apply to the Registrar stating the reasons for seeking such State aid.
(2) On receipt of an application under sub-section (1) or otherwise, the Registrar may, if he is satisfied that such aid is necessary in the interest of the society, - 45 - recommend to the State Government the grant of such aid. The State Government may thereupon grant such aid to the society as it may deem fit on such terms and conditions as may be prescribed.
Employee’s Provident Fund.
46 (1) A society may establish a contributory Provident Fund for the benefit of its employees to which shall be credited all contributions made by the employees and the society in accordance with the bye-laws of the society.
(2) A contributory Provident Fund established by a society under sub-section (1) -
(a) shall not be used in the business of the society;
(b) shall not form part of the assets of the society;
(c) shall not be liable to attachment or be subject to any other process of any court or other authority; and
(d) shall be administered in such manner as may be prescribed.
Power to direct affiliation to Federal Society.
47 The State Government may, by a general or special order, direct that all or any of the societies situated within a specified area shall be affiliated to the Chhattisgarh Co-operative Union or to a District Cooperative Union or to any other union in such manner and on such conditions as the State Government may specify.
Apex Society. 47-A The Apex Society may, for servicing its constituents and in accordance with its byelaws, perform the following functions;-
(a) safeguard the observance of the Co-operative principles;
(b) promote and organise Co-operative societies and for this purpose, frame model byelaws and guidelines for making various regulation and policies for consideration by the societies;
(c) provide Co-operative training, education and information, and propagate Co-operative principles;
(d) undertake research and evaluation and assist in preparation of perspective development plans of member societies;
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(e) promote harmonious relations between member societies;
(f) help member societies in the settlement of disputes among themselves and between a society and its members;
(g) represent the interest of member societies and lobby for policies and legislation favorable to societies;
(h) undertake business services on behalf of its members;
(i) provide Co-operation and management of development services to member societies including participation in board meetings where member societies are invited;
(j) ensure timely conduct of annual audit in member societies;
(k) ensure timely conduct of elections in member societies;
(l) assist member societies in regular conduct of general meetings;
(m) evolve code of conduct for observance by member societies;
(n) evolve viability norms for member societies;
(o) provide legal aid and advice to member societies;
(p) provide any other service in the interest of member societies.
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CHAPTER- V MANAGEMENT OF SOCIETIES Final authority in society.
48 (1) The final authority in a society shall vest in the general body of members;
Provided that the byelaws of a society may provide for the constitution of a smaller body consisting of delegates elected in accordance with such byelaws to exercise powers of the general body or as may be specified in the byelaws of the society.
(2) Subject to sub-section (1), the management of every society shall vest in a committee constituted in accordance with this Act or rules made thereunder or byelaws of the society and it shall exercise such powers and perform such duties as may be conferred or imposed respectively by the Act or rules made thereunder or byelaws of the society.
(3) (a) On the committee of primary society
(i) In which half or more than half the members belong to scheduled castes, scheduled tribes and other backward classes not less than half the total number of seats, shall be reserved for the members belonging to such castes, trives and backward classes in such proportion as may be prescribed;
(ii) In which one fourth or more than one fourth, but less than half the members belong to Scheduled Castes, Scheduled Tribes and other background classes, three seats shall be reserved for the members belonging to such castes, tribes and background classes of which one seat each shall be reserved for each class;
(iii) In which the number of members belonging to Scheduled Castes, Scheduled Tribes and other backward classes is less then one fourth of total numbers of members one seat shall be reserved for a member belonging to such castes, tribes and other backward classes, which has the larger number of members in the society.
(iv) Which is the operating in a Scheduled Area, the number of seats to be reserved for - 48 - Scheduled Tribes shall bear as nearly as may be the same proportion as members belonging to Scheduled Tribes bear to the total memberships of the society.
Explanation: For the purpose of this clause the District Co-operative Agriculture And Rural Development Bank shall be deemed to be a primary society;
(b) On the Committee of such Central or Apex Society or class of Central or Apex Societies, as the State Govermment may having regard to the total membership of [Scheduled Castes, Scheduled Tribes and other backward classes] in the Primary Societies affiliated to such Apex or Central Society, by general or special order, direct, such number of seats as may be specified in the order shall be reserved for the members belonging to of [Scheduled Castes, Scheduled Tribes and other backward classes]
Provided that the number of seat so reserved shall not exceed for each category of members;
Provided further that on the Committee of every Central or Apex Society of the Resource class at least one seat each shall be reserved for the members of [Scheduled Castes, Scheduled Tribes and other backward classes]
(c) In the event of society failing to elect requisite number of members or electing less than such number of members, as is specified in clauses
(a) and (b), the members of the committee shall co-opt the requisite number of members from amongst members of such society eligible for such representation and in the event of the Committee failing to do so Registrar shall nominate the requisite number of members from amongst members of such society eligible for such representation;
(5) There shall be a President/Chairman and two Vice Presidents/ Vice-Chairmen in a resource society. Out of the two offices of Vice-president/ Vice- Chairman- - 49 -
(i) One shall be held by a woman member, and
(ii) One shall be held, if the chairman is not elected from amongst persons belonging to scheduled castes, scheduled Tribes and other Backward Classes, by a person belonging to these categories and otherwise, by any person;
Provided that in case of such resource society other than a Nagrik Co-operative Bank or Urban Cooperative Credit Society or Thrift Society, operating in a Scheduled area, the chairman or president shall be elected only from amongst persons belonging to Scheduled Tribes.
Explanation: For the purpose of this Section-
(i) “Scheduled Caste” means any caste, race or tribe or part of or group within a caste, race of tribe specified in relation to State of Chhattisgarh under Article 341 of the Constitution of India.
(ii) “Scheduled Tribe” means any tribe, Tribal community or part of or group within a Tribe or Tribal community specified as such in relation to the State of Chhattisgarh under Article 342 of the Constitution of India.
(5-A) There shall be a President or Chairman and Vice President or Vice Chairman in consumer society of whom one shall be a woman.
(6) No person who is individual member in a Central Co-operative Bank shall hold any specified office in the Central or Apex Society.
(7) In a resource society, no person who is a nonborrowing member shall be qualified for election as member of the committee, delegate or representative nor shall he be entitled to vote in any election of the committee, delegate or representative of the society:
Explanation.- A non-borrowing member shall be one who never borrowed from such a Bank or society in which he is a member.
Provided that the provisions of this subsection shall apply to the society from the date it commences its lending operations;
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Provided further that the provisions of this sub-section shall not apply to the society in so far as its first provisional committee/nominated committee is concerned.
Disqualification for holding specified office.
48-A (1) No person shall at the same time hold the specified office of more than one Apex Society, One Central Society and one Primary society.
Provided that the provisions of this subsection shall be applicable in case of societies of same classification.
(2) If any person who is holding a specified office in one Apex Society, one Central Society and one Primary Society is elected or appointed to a specified office in any other Apex or Central or Primary society, he may, by a letter in writing signed by him and addressed to the Registrar, within a period of one month from the date of his election or appointment to such specified office resigns from the specified office in all except one Apex Society and or one Central Society and or One Primary Society as the case may be.
(3) If any person required to resign under sub-section
(2), fails to resign within the period specified therein, then at the expiration of such period he shall be deemed to have resigned from the specified office in all except one Apex Society and one Central Society and one Primary Society, as the case may be, in which he was already holding the specified office prior to such subsequent election or appointment to specified office in other Apex or Central or Primary Society.
Representatives and delegates.
48-B (1) Every committee of society shall at the time of election of Chairman or Vice-Chairman, also elect representative who shall represent it in other society and the representative so elected shall not be withdrawn by the Committee till the next election of the committee.
(2) (a) In a society where not less than half of the members belong to Scheduled Caste and Scheduled Tribes, the representative shall be only from amongst the members belonging to such castes or tribes; and - 51 -
(b) In a society where not less than two-third of the members belong to other Backward Classes, the representative shall be from amongst the members belonging to such classes.
(3) If the byelaws of the society provide for the constitution of its general body by the elections of the delegates the society shall reserve seats in the general body for the members belonging to Scheduled Castes, Scheduled Tribes and other Backward Classes in such a manner that the number of seats so reserved for each category shall as far as possible, be in the same proportion in which members of each category, shall bear to the total membership of the society.
Powers of Committee.
48-C The Board or the Committee of a society shall in accordance with the byelaws, have power to –
(a) admit and terminate membership;
(b) elect the Chairman and other office bearers;
(c) remove from office the Chairman and office bearers;
(d) fix staff strength with the approval of the Registrar;
(e) frame policies concerning,-
(i) organisation and provisions for services to members;
(ii) qualifications, recruitment, service conditions of the staff and other matters relating to staff with the approval of the Registrar;
(iii) mode of custody and investment of funds;
(iv) manner of keeping accounts;
(v) mobilisation, utilization and investment of funds;
(vi) monitoring and management of information system including statutory returns to be filed;
(f) place the annual report, annual financial statements, plan and budget for the approval of the general body;
(g) consider audit and compliance reports and place the same before the general body; and
(h) undertake such other functions as specified in the byelaws.
- 52 - Annual General Meeting.
49 (1) Every society shall within three months before the close of financial year call a general meeting of its members for the following purposes of;
(a) approval of the programme of the activities of the society prepared by the committee for the ensuring year;
(b) Election, if fallen due, of the members of the committee;
Explanation.-Election of the committee shall be deemed to have fallen due, if the term of the committee comes to an end within a period of three months from the date of the annual general meeting.
(c) consideration of the audit report, if received and the annual report;
(d) disposal of the net profit;
(c) consideration of any matter which may be brought forward in accordance with the byelaws; and
(f) presenting the budget for the next Cooperative year;
Provided that the Registrar may , save the meeting in which elections are to be held on expiration of the term of the committee specified in sub-section (7-A), extend the period for holding such meeting , by a further period not exceeding three months;
Provided further that in respect of a society where an order of liquidation has been issued under Section 69, an