Chapter III Chapter III

Members and their Rights and Liabilities

Eligibility for membership:— [Rule 13,14,59,12A]

1. (1) Subject to the provisions of Section 21,—
   • (a) an individual who attained majority and is of sound mind and who belongs to a class of persons, if any, for whom the society is formed as per its bye-laws and who possesses such qualifications as may be specified in the bye-laws or as may be prescribed for the concerned class of societies in the interest of Co-operative movement.
   • (b) a society registered, or deemed to be registered, [under this Act or the Andhra Pradesh Mutually Aided Co-operative Societies Act, 1995 (Act No. 30 of 1995)] [and which belongs to the class of societies, if any, for which the society is formed as per its bye-laws: [ Provided that the Co-operative Society registered under the Andhra Pradesh Mutually Aided Co-operative Societies Act, 1995 which were admitted into Central, Apex Level Co-operative Societies, shall not be entitled for voting rights.]
   • (c) the Government ; shall be eligible for admission as a member— [ Provided that no individual shall be eligible for admission as a member of any financing bank or federal society :] [ Provided further that an individual who was admitted as a member of the financing bank or federal society and continuing as such on the date of the commencement of the Andhra Pradesh Co-operative Societies (Amendment) Act, 1985, shall, on the commencement cease to be a member of such bank or society:] [Provided also that a society shall admit an individual or a society referred to in clauses
   • (a) and
   • (b) above as a member, subject to the condition that the society is in a position to extend its services to such individual or society.] [Provided also that the individual who seeks admission into an Agricultural Credit Society, shall hold agricultural land either as an owner or a tenant in the area of operation of the said society in such manner as may be prescribed.] Explanation [I] :— For the purpose of this sub-section ;
     • (i) ‘family’ means husband, wife, unmarried sons, unmarried daughters and other dependents in the house-hold ;
     • (ii) ‘weaver’ means any individual not being a master weaver, who attends to operations of weaving of cloth or fabric or product on the loom whether such operation is carried on in private dwelling house or any other place and is dependent on weaving as profession and income thereof. [Explanation II :— For removal of any doubts, it is hereby declared that Mutually Aided Co-operative Society registered or deemed to be registered under the Andhra Pradesh Mutually Aided Co-operative Societies Act, 1995 shall be entitled to all the rights and privileges of a member of a society except voting rights under the provisions of this Act on admission as such member.]
2. (2) Notwithstanding anything in sub-section (1),—
   • (i) any firm, company or any other body corporate constituted under any law for the time being in force, or a society registered under the relevant Societies Registration Act or a local authority or a public trust registered under any law for the time being in force relating to the registration of such trusts, which is immediately before the commencement of this Act, a member of a society deemed to be registered under this Act shall have, subject to the other provisions of this Act, the right to continue to be such member on and after such commencement ;
   • (ii) the requirements specified in [clauses
   • (c) and
   • (cc) in sub-section
3. (2) of Section 6] for individual signing the application for registration of a society referred to therein, shall also apply to individuals seeking admission as members of such society after its registration ;
   • (iii) any statutory body constituted for the purpose of development of a particular industry, may become a member of a co-operative marketing or processing society of growers or workers engaged in such industry;
   • (iv) persons who are minors, may, subject to such restrictions or limitations as may be applicable to a minor under the provisions of any law for the time being in force, be admitted as members of such class of societies as may be prescribed ; (2-A)Any person duly qualified for admission as a member under the provisions of this Act, the rules and the bye-laws, may apply through the Registrar for membership of such societies and in such forms as may be prescribed and such person shall be deemed to have been admitted as a member of the society from the date of receipt of the application in the office of the society. (2-B)Notwithstanding anything in this Act, the Registrar may either suo motu at any time or on any application by the society or any aggrieved person made within fifteen days from the date mentioned in sub-section (2-A) and after giving an opportunity to the person concerned and recording the reasons therefor declare such person as not eligible for membership of the society within thirty days from the date of receipt of the application by the Registrar.
4. (3) The General body of a society shall not without sufficient cause, refuse admission to membership to any person duly qualified therefor under the provisions of this Act and its bye-laws. Where admission is so refused, the decision, with reasons therefor, shall be communicated by the registered post to such person within fifteen days of the date of the decision, or within sixty days from the date of his application for membership, whichever is earlier :
5. (4) The name of every person admitted or deemed to have been admitted as a member of the society shall be entered in such records of the society as may be prescribed [and the member so admitted shall be issued a photo identity card.]
6. (5) The name of every associate member admitted or deemed to have been admitted, shall be entered in a separate register and a photo identity card shall be issued.

Associate Member:-

1. (1) Notwithstanding anything contained in Section 19, a society may admit any individual or informal group such as Self Help Group, Rythu Mithra Group, Non-Governmental Organisation , working for the welfare of farmer community in the area of operation as associate member but such member shall not be entitled to vote.
2. (2) The associate member shall not be entitled to any share in any form whatsoever in the profits or assets of the society. Such member shall not have privileges, rights and liabilities of a member except those specified in the bye-laws of the society:

Disqualification for membership of society Disqualification for membership of society:— [Rule 21B]

1. (1) A person shall be disqualified for being admitted as, and for being, a member, he -
   • (a) is an applicant to be adjudicated, an insolvent or is an undischarged insolvent ; or
   • (aa) is not eligible for membership under Section 19;] or
   • (b) has been sentenced for any offence involving more turpitude, such sentence not having been reversed and a period of three years has not elapsed from

the date of expiration of the sentence; or

1. (c) is a paid employee of the society or of its financing bank or of any society for which it is the financing bank ; or
2. (d) has been expelled from membership under this Act and a period of one year has not elapsed from the date of such expulsion; or
3. (e) is carrying on business of such kind as the Registrar may by general or special order, declare to be a business which is in conflict with the objects or interests of the society ; or
4. (f) as such member fails to transact such minimum business or utilise minimum services or facilities in a year as may be specified- in the bye-laws; or
5. (g) fails to attend two consecutive General body meetings in two years without leave of absence; or
6. (h) fails to give information relevant to him to the society as specified in the bye- laws.]

1. (2) The provisions of clause
   • (b) of sub-section
2. (1) shall not apply to a person seeking admission to, or to a member of, a society exclusively formed for the reclamation of such class of persons as may from time to time be notified by the Government in the Andhra Pradesh Gazette. The provisions of clause
   • (c) of sub-section
3. (1) shall not apply to a person seeking admission to, or to a member of—
   • (i) a society which has as its principal object the provision of employment to its members ; or
   • (ii) such other society as may be prescribed.]
4. (3) Where any person, who is not eligible for being admitted as member has been admitted as member or where the member who is disqualified to continue as such under sub-section
   • (I) is continued as member, he shall be removed by the General body on its own motion or on a representation made to it by any member of a society or its federal society or its financing bank: Provided that no member shall be removed under this sub-section unless he had an opportunity of making a representation against the proposed action. A copy of the resolution removing the member shall be communicated to such person and on such communication, he shall be deemed to have ceased to be a member of the society.

Right of members to services by society and application for redress:—

1. (l) Every member on his admission as such member shall be entitled to the services available to the members of the society and such services shall, subject to availability, be rendered to him on his application to the committee.]

1. (2) If any member is refused any service, or where the decision of the committee on his application for services is not communicated to him within a period of thirty days from the date of such application, he may make an application to the Registrar for redress, within thirty days from the date of receipt of the decision of refusal, or within sixty days from the date of application to the society, as the case may be.
2. (3) If the Registrar is satisfied that the refusal of any service is unreasonable, improper or discriminatory, he may after giving the committee an opportunity of making its representation by order, direct the committee to render the service.

Expulsion of Members:—

1. (1) Any member who has acted adversely to the interests of the society may be expelled upon a resolution of the general body passed as its meeting by the votes of not less than 1[two-thirds of the members of the society present and voting.]
2. (2) No member shall be expelled under sub-section
3. (1) without being given an opportunity of making his representation to the General Body. A copy of the resolution expelling the member shall be communicated to the member

Members not to exercise rights till payments are made:— No member shall, save as otherwise provided in Section 31, exercise the rights of a member unless he has made such payment to the society, in respect of membership or has acquired such interest in the society, as may be specified in the rules made in this behalf or

2[as may be specified in the bye-laws].

Vote and manner of its exercise:— [Rule 18]

1. (1) [Subject to such rules as may be made in this behalf, every member] shall have one vote in the affairs of the society and shall exercise his vote in person and not by proxy : [ Provided that no member of a society belonging to such class of societies and who failed to transact such minimum business or utilise such minimum services or facilities as may be prescribed taking into consideration the nature of business transacted or the services or facilities made available by the society, shall have the right to stand as a candidate or to vote in any election to the society.] (1-A) A member of a society shall be eligible to exercise the right to vote only if he:
   • (a) contributes a minimum share capital as may be prescribed.
   • (b) [xxx]
   • (c) [is a member of the society for a continuous period as may be prescribed.]
   • (d) is not in default in the payment of any amount due in cash or kind to the society for such period as may be prescribed.
2. (2) [xxx]Every person nominated to the committee by the Government or where the financing bank is a member, every person representing such financing bank, shall have one vote : Provided that no nominee of the Government or the representative of the financing bank, as the case may be, [shall be entitled] to participate in, or vote at any election.
3. (3) In the case of equality of votes, the chairman of the meeting shall have a second or casting vote.
4. (4) [xxx]

Restriction on holding of shares:Where the liability of the members of a society is limited, no member other than a society or the Government, shall hold more than such portion of the share capital of the society, subject to a maximum of one-fifth thereof, as may be prescribed . [xxx] Provided that the Government may, by notification in the Andhra Pradesh Gazette, fix in respect of any society or class of societies, a higher maximum than one-fifth of the share capital. [xxx]

Restrictions on transfer of shares or interest:

1. (1) 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 co-operative year ; and
   • (b) the transfer is made to a member of the society.
2. (2) Not with standing anything in Sub - section(1), no member of a financing

bank or federal society shall tranfer his share or interest in such bank or

society to an individual member, his heir or legal representative.

Transfer of interest on death of a member: [Rule 16,17]

1. (1) On the death of a member, the society shall transfer his share or interest to the person or persons nominated in accordance with the rule, or if no person has been so nominated, to such person as may appear to the committee to be the heir or legal representative of the deceased member only on such nominee, heir or legal representative, as the case may be, becoming a member of the society, subject to such conditions as may be prescribed : Provided that nothing in this sub-section shall prevent a minor or a person of unsound mind from acquiring by inheritance or otherwise the share or interest of a deceased member in a society.
2. (2) Notwithstanding anything in sub-section (1), any such nominee, heir, or legal representative, as the case may be, may require the society to pay to him the value of the share or interest of the deceased member as ascertained in the manner prescribed.
3. (3) A society shall pay all other moneys due to the deceased member from the society to such nominee, heir or legal representative, as the case may be, subject to such conditions as may be prescribed.
4. (4) 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.

Liability of past member and estate of deceased member:

1. (1) Subject to the provisions of sub-section (2), the liability of a past member, or of the estate of a deceased member, for the debts of the society as they existed,
   • (a) in the case of a past member, on the date on which he ceased to be a member ;
   • (b) in the case of a deceased member, on the date of his death; shall continue for a period of two years from such date.
2. (2) Where a society is ordered to be wound up under Section 64, the liability of a past member who ceased to be a member or of the estate of a deceased member who died, within two years immediately preceding the date of the order of winding up, shall continue until completion of the liquidation proceedings but such liability shall be limited only to the debts of the society as they existed on the date of cessation of membership or death, as the case may be.