Person who may become members

(1) No person shall be admitted as a member of a co-operative society except the following, namely:-(a) an individual competent to contract under section II of the Indian Contract Act, 1872; 9 of 1872. (b) any other co-operative society; (c) the Government ; and (d) such class or classes of persons or associations of persons as may be notified by the Chief Commissioner in this behalf. (2) Notwithstanding anything contained in sub-section (1); the Chief Commissioner may, having regard to the fact that the interest of any person or class of person conflicts or is likely to conflict with the objects of any society or class of societies, by general or special order, published in the Official Gazette, declare that any person or class of persons engaged in or carrying on any profession, business or employment shall be disqualified from being admitted, or for continuing, as members or shall be eligible for membership only to a limited extent of any specified society or class of societies, so long as such persons is or are engaged in or carrying on that profession business or employment, as the case may be. (1) Every notice to be given under sub-section (2) of section 12 shall be sent by post under certificate of posting or otherwise to the address of each of its members and creditors as recorded in the books of the society. A copy of such notice shall be exhibited on the notice board or on the outer wall of society's building or at a conspicuous public place and a copy shall also be sent to the Registrar for exhibition on the notice board of his office; and there upon, the notice of resolution to change the form or extent of its liability shall be deemed to have been duly given to all its members and creditors, notwithstanding the fact that such notice had not been sent to their correct address or that it had not been received by them.

(2) For the purpose of determining the claims of a member under clause (b) of the sub-section 12, the value of a share of a member in a co-operative society shall be ascertained as in the following manner, namely:

(a) in the case of a co-operative society with limited liability, the value of a share shall be the actual amount received by the co-operative society in respect of such share; and

(b) in the case of a co-operative society with unlimited liability, the value of the shares shall be the amount arrived at by a valuation based on the financial position of the co-operative society as shown in the last audited balance sheet:

Provided that it shall not exceed the actual amount received by the co-operative society in respect of such shares.

(3) Any member or creditor desiring to exercise his option under sub-section (2) of section 12 shall inform the co-operative society accordingly in writing and when he does not propose to withdraw his entire shares or deposits the member or creditor shall clearly indicate in writing the extent of his withdrawals. The co-operative society shall examine and draw up a scheme for orderly payment of all claims in an equitable manner including shares, the value of which shall be ascertained in accordance with provisions of sub-rule (3). The scheme may also provide for settlement of claims by mutual agreement. Where the Registrar does not approve the scheme on the ground of impracticability or undesirability, resolution passed by the co-operative society for amendment of its bye-laws or the purpose shall be ineffective and the form and extent of liability of co-operative society shall not be changed in accordance with the resolution so passed.

(4) After the Registrar approves the scheme, the co-operative society shall make payments to member and creditors as provided for in clause (b) of sub-section (b) of sub-section (4) of section 12 and make a report to that effect to the Registrar and the Registrar shall thereupon proceed to register the amendment to the bye-laws of the co-operative society.

(5) Subject to the provisions of this rule the provisions of section 10 and rules 10 to 12 shall apply to an amendment of the bye-laws of a society for purpose of changing the form or extent of its liability.