(1) Any co-operative society may, after duly informing the Registrar, at a general meeting called for the purpose of which, at least fifteen clear days notice shall be given to its members, resolve to divide it self into two or more societies. The resolution (hereinafter in this section referred to as the preliminary resolution) shall contain proposals for the division of the assets and liabilities of the society among the new societies into which it is proposed to divide it and may prescribe the area of operation of and specify the members who will constitute each of the new societies.
(2) Notwithstanding any other provision of this Act or of any bye-law of such society, notice of any meeting referred to in this section shall be given to the members of the society and a copy of the preliminary resolution shall be served on the members and creditors of the society in any one or more of the manners specified in sub section (2) of section 15, which shall mutatis mutandis apply.
(3) (i) any member of the society may, notwithstanding any bye-law to the contrary, by notice given to the society [ within a period of thirty days from the date of receipt of a copy of the preliminary resolution under clause (a) of sub section (2) of section 15 as applicable by virtue of sub section (2) of this section, or as the case may be, from the date of its publication in a newspaper under clause (b) thereof], intimate his intention not to become a member of any of the new societies.
(ii) any creditor of the society may, notwithstanding any agreement to the contrary, by notice given to the society within the said period, intimate his intention to demand return of the amount outstanding to his credit.
(4) After the expiry of [the period referred to in clause (i) of sub section (3)] a general meeting of which at least fifteen clear days notice shall be given to its members, shall be convened for considering the preliminary resolution.
If, at such meeting, the preliminary resolution is conformed by a resolution passed by a majority of not less than two-thirds of the members present, either without changes or with such changes, as in the opinion of the Registrar are not material, he may, subject to the provisions of sub section
(5) and (6) and section 7, register the new societies and the bye-laws thereof, on such registration, the registration of the old society shall be deemed to have been cancelled.
(5) While confirming the preliminary resolution under sub-section (4), provisions shall be made by another resolution for;
(i) The repayment, subject to the provisions of section 41, of the share capital of all the members who have given notice under clause (i) of sub section (3); and
(ii) The satisfaction of the claims of all the creditors who have given notice under clause (ii) of sub-section (3).
(6) If, within such times as the Registrar considers reasonable, the share capital of the members, referred to in sub section (5) is not repaid or the claims of the creditors referred to in that sub-section are not satisfied, the Registrar may refuse to register the new societies.
(7) Notwithstanding any thing in any other law for the time being in force, the registration of the new societies shall be a sufficient conveyance to vest the assets and liabilities of the original society in the new societies in the manner specified in the preliminary resolution as confirmed under subsection (4).
Powers of Registrar to direct amalgammation or merger of cooperative societies
16.A (1) Where in the opinion of the Registrar amalgamation or merger of two or more co-operative societies is necessary or desirable for increasing their strength or usefulness, he may, notwithstanding anything to the contrary contained in this Act, after consulting the financing bank, if any, to which the societies are indebted, call upon such societies by order in by writing, to amalgamate or merge, within such time as may be specified by him, into one society, and thereupon the societies shall take all such steps, as may be necessary for that purpose in accordance with the provisions of section 15.
(2) On the failure of the societies to amalgamate or merge in accordance with the order passed under sub section (1) the Registrar may, by order in writing, direct amalgamation or merger of the societies into one society.
The direction of the Registrar under sub-section (2) shall be deemed to be a preliminary resolution of the societies concerned for the purpose of sub-section (2) and (3) of section 15, and the Registrar shall take such further steps as required by that section.
(3) After the expiry of thirty days from the date of receipt of the copy of the preliminary resolution under clause (a) of sub section (2) of section 15 or, as the case may be, from the date of its publication in a newspaper under clause (b) of that sub section, the Registrar shall, from the funds of the societies concerned, repay, subject to the provisions of section 41, the share capital of all the members, and satisfy the claims of all the creditors, who have given notice under clause (i) and clause (ii) respectively of sub section (3) of section 15 and thereafter declare the amalgamation or merger, as the case may be, of the societies and in the case of amalgamation register the new society so formed and its byelaws.
(4) A declaration of merger or registration of the new society under sub section (4) shall be deemed to be a merger or registration under section 15 and the provisions of sub section (7) of that section shall apply to it.
Power of Registrar to direct division of a cooperative society into two or more cooperative societies
16.B (1) Where in the opinion of the Registrar it is essential in public interest or in the interest of the co-operative movement, or desirable for the purpose of securing better management of a co-operative society, that any cooperative society should be divided to form two or more societies, he may, notwithstanding anything to the contrary contained in this Act, after consulting the financing bank, if any, to which the society is indebted, call upon such society by order in writing to divide itself into two or more societies with such constitutions, assets, liabilities, rights, duties and obligations as may be specified in the order, and thereupon the society shall take all such steps as may be necessary for that purpose in accordance with the provisions of section 16.
(2) On the failure of the society to divide itself in accordance with the order passed under sub section (1), the Registrar may by order in writing, direct division of the society into two or more societies.
(3) The direction of the Registrar under sub section (2) shall be deemed to be a preliminary resolution of the society concerned for the purpose of section 16, and the Registrar shall take such further steps as are required by that section.
(4) After the expiry of thirty days from the date of receipt of the copy of the preliminary resolution under clause (a) of sub section (2) of section 15, or as the case may be, from the date of its publication in a newspaper under clause (b) of that sub-section the Registrar shall, from the funds of the society concerned repay subject to provision of section 41, the share capital of all the members, and satisfy the claims of all the creditors who have given notice under clause (i) and clause(ii) respectively of sub section (3) of section 16, and thereafter register the new societies and the bye-laws thereof. On such registration the registration of the old society shall be deemed to have been cancelled.
(5) The registration of the new societies under sub-section (4) shall be deemed to be registration under section 16 and the provisions of sub-section (7) of that section shall apply to them.
CHAPTER-III Members of Co-operative societies and their rights and liabilities Person, who may be members of a co-operative society