Chapter IV Chapter IV

Management of Societies

Ultimate authority of society: [Rule 21]

1. (1) (a) Subject to the provisions of this Act, the rules and the bye-laws, the ultimate authority of a society shall vest in the general body : Provided that nothing in this clause shall affect the exercise by the committee or any officer of a society or any power conferred on such committee or officer by the Act, the rules or the bye-laws.
   • (b) Notwithstanding anything in clause (a), where the area of operation of a society is not less than such area as may be prescribed, or where the society consists of not less than such number of members as may be prescribed, the society-may and if so directed by the Registrar shall provide in its bye-laws for the Constitution of smaller general body designated as the representative general body consisting of such number of members of the society as may be specified in and elected in accordance with, the rules, to exercise all or any of the powers of the general body except the power to conduct elections of members of the committee as may be specified in the bye-laws ; and thereupon any reference in this Act to the general body meeting thereof shall be construed as a reference to the representative general body or its meetings : Provided that the representative general body shall not alter any provision in the bye-laws relating to its Constitution or powers.
   • (c) The exercise of any power by representative general body shall be subject to such restrictions and conditions as may be specified in the rules or the bye-laws,
2. (2) Subject to the other provisions of this Act, the following matters shall be dealt with by the 1[General Body in the manner prescribed]-
   • (i) election and removal of members of the committee and members
   • (ii) annual report to the Registrar ;
   • (iii) consideration of the audit report and the annual service ;
   • (iv) disposal of the net profits ;
   • (v) amendment to bye-laws ;
   • (vi) expulsion of a member ;
   • (vii) approval of the annual budget of income and expenditure ;
   • (viii) affiliation of the society to the financing bank or other societies ; 1[xxx]
   • (ix) 2[election of delegates to the financing Bank or other societies] 3[ Provided that where a delegate is not elected under this item the President shall be the delegate to the Financing Bank or other society until a delegate is elected ; Provided further that where a President is elected by direct election, he shall represent the society as a delegate to the Financing Bank or other Societies.] 4[(x) review of the loans and advances sanctioned to or the business done with the society by the members of the committee or their such near relatives as may be prescribed, and report to the Registrar about any default in the recovery of the amounts due to the society.] Provided that the general body may delegate, by a resolution, to the committee its powers in respect of 5[items
   • (viii) and (ix)] or to withdraw by a resolution such powers at any time. 6[(xi) appointment of two internal auditors from among its members other than the members of the committee ;
   • (xii) consideration of the report of the internal auditors appointed by it.] 7[(xiii) contribution to Cooperative Education Fund;
   • (xiv) consideration of report of inquiry under Section 51 or Inspection under Section 52 or under Section 53 or Special report of Audit under Section 50;
   • (xv) decision on bad debts considered irrecoverable;
   • (xvi) management of deficits in stocks or cash;
   • (xvii) appointment of members of supervisory council, entrustment of duties to the supervisory council and consideration of its reports; (xviii) decision on transfer of assets and liabilities, on division or amalgamation;
   • (xix) review of attendance of Committee members;
   • (xx) review of membership;
   • (xxi) review of the report on the disqualification of the members and the committee members;
   • (xxii) review of all overdue loans and defaulters; (xxiii) approval of the staffing pattern, pay and other allowances of the employees of the society and contingencies, subject to the availability of administrative and contingent fund and approval of the Registrar.

Constitution of committees: [Rule 22,22A,22B,22C,22D,25] (1)

1. (a) The general body of a society shall constitute a committee in accordance with the bye-laws and entrust the management of the affairs of the society to such committee : Provided that in the case of a society registered after the commencement of the Andhra Pradesh Co-operative Societies (Second Amendment) Act, 2001 the persons who have signed the application for the registration of the society shall conduct the affairs of the society for a period of one month from the date of registration and shall cease to conduct the affairs of the society after duly constituting a committee as per the provisions of the Act thereafter: Provided further that where the bye-laws so provide, the Government or the Registrar may nominate all or any of the members of the committee for such period as may be specified therein ;
2. (b) On the Committee of such society or class of societies other than the societies formed exclusively for the persons belonging to the Scheduled Castes, Scheduled Tribes or Backward Classes as may be notified by the Government, such number of seats as may be specified by them shall be reserved for the members of the Weaker Section : Provided that in the case of such classes of Societies as may be prescribed, two seats shall be reserved for women in the manner prescribed and such reservation may be made in the reserved and unreserved categories also ; Provided further that in the case of a Primary Agricultural Co-operative Credit Society, a Fanners Service Co-operative Society a Co-operative Farming Society, a Co-operative Central Bank and a District Co-operative Marketing Society, not more than one-half of the total number of seats to be filled by elected members on the committee thereof shall be reserved to be filled by members of the Scheduled Castes, Scheduled Tribes Backward Classes and Women in such proportion as may be prescribed: Provided also that where no such members are elected in the proportion specified in the foregoing proviso the persons elected as members of the committee shall choose in the prescribed manner the members required to fill up the short fall in the said proportion, from amongst the persons belonging to the Scheduled Castes, Schedules Tribes, Backward Classes or Women, as the case may be, who are members of the general body of the society : Provided also that in a committee where the number of members elected as aforesaid was fallen short of the said proportion, in respect of any of the categories of the weaker sections, namely, Scheduled Castes, Scheduled Tribes or Backward Classes, the persons elected as members of the Committee shall choose in the prescribed manner the members required to fill up the short fall in the said proportion, from amongst the persons belonging to the other categories of weaker sections in such order of priority as may be prescribed. Explanation: For the purposes of this clause

1. (1) the expression ‘members of the weaker sections shall mean the persons belonging to the Scheduled Castes, Scheduled Tribes, Backward Classes and such other socially and economically backward sections of the community as the Government may, from time to time, notify in this behalf ;
2. (2) in the determination of ‘one half of the total number of members’ any fraction arrived at shall be counted as one.
   • (c) Two women members shall be nominated by the Registrar to the Committee of such class of societies and in such manner as may be prescribed from among the women members belonging to Self-Help Groups, Rythu Mithra Groups and Non-Governmental organizations. Such nominated women members, notwithstanding anything contained in this Act, may take part in proceedings of the meetings of the committee but shall not have the right to vote.
   • (d) One member belonging to minority community, shall be nominated by the Registrar to the Committee of such class of societies and in such manner as may be prescribed from among the members belonging to minority communities. Such nominated members, notwithstanding anything contained in this Act, may take part in proceedings of the meetings of the committee but shall not have the right to vote. (1-A)Notwithstanding anything in this Act or in the bye-laws the societies referred to in Clause
   • (b) of sub-section (1), the Government may, for the purpose of effective implementation of the reservation specified in Clause(b), by rules made in this behalf, provide for the constitution of, and election to, the committees of such societies and all other matters relating thereto, including the division of constituencies, allocation of seats and the choice of persons belonging to weaker sections of the society as members of the committee of any central society from amongst the members of the committees of the societies affiliated to such central society, by the members of the central society in cases where no such person is a member of the general body of such central society.
3. (2) (a) Save as otherwise provided in this Act, the term of office of the committee or any of its members or of the President elected in accordance with the provisions of sub-section
4. (5) shall be five years from the date of election of the members of the committee : Provided that the term of office of five years specified in this clause shall be applicable only to a committee or its members or the President elected in any ordinary election conducted after the commencement of the Andhra Pradesh Co-operative Societies (Second Amendment) Act, 1995 and the term of office of any committee or its members or the President holding office at such commencement shall be the same for which they were elected under the law in force when they were elected.
   • (b) It shall be the duty of the Registrar to hold elections to the office of the members of the committee of a society which received State aid as specified in Section 43 of the Act before the expiry of their term.
   • (c) In respect of other societies it shall be the responsibility of the incumbent committee of such society to hold elections to the office of the members of the committee in the manner specified in the byelaws before the expiry of the term: Provided that where the committee of a society requests the Registrar to hold elections to the office of the members of the committee, the Registrar shall hold elections to the office of the members of the committee in the manner prescribed on payment of costs in advance. (3)
   • (a) In the case of the committee of Co-operative Central Bank, a District Marketing Society, a District Co-operative Wholesale Store, a Centrally sponsored Consumer Co-operative Stores, an apex society and a society formed for a sugar factory or for a spinning mill, such officer of the co-operative department, not below the rank of a Deputy Registrar, as may be authorised by the Registrar in this behalf shall be the election officer and the election of the members of the committee shall be in such manner as may be prescribed.
   • (b) In any other case, the election officer and the manner of election of the members of the committee shall be such as may be prescribed; Provided that where a requisition signed by not less than one-fifth of the total number of members is received by the Registrar to appoint the election officer to conduct the election, the Registrar shall appoint the election officer to conduct the election.
5. (4) (a) For the purpose of electing members to its committee, a society may provide in its bye-laws, for the division of the area of operation of a society into territorial constituencies, or the membership of the society into electoral groups on any other basis, for the number or proportion of members who may be elected to represent each such territorial constituency or electoral group on the committee, and for the manner of election of such representatives.
   • (b) In the absence of such bye-laws, the society may elect members to its committee from among all the members of the society.
6. (5) In the case of such classes of Co-operative Societies as may be prescribed, the President shall, subject to the provisions of Section 21-A, be elected by the members of the committee from among themselves in the manner prescribed.

General meetings and committee meetings General meetings and committee meetings: [Rule 23, 23A, 23B, 23AA, 26]

1. (1) The committee may, at any time, call not less than two general meetings of a society in a co-operative year: Provided that one meeting shall be held in each half year. (1-A) If the general meeting is not convened in accordance with the provisions of sub-section (1), the members of the Committee shall cease to hold office on the day next after the 1st day on which the general meeting should have been held, and it shall be competent for the Registrar, notwithstanding anything in the bye-laws, to call such general meeting in such manner as may be prescribed.
2. (2) The committee shall call a general meeting of the society within thirty days of the date of receipt of a requisition in writing from
   • (i) such number of members or proportion of the total number of members, as may be specified in the bye-laws ;
   • (ii) the financing bank to which the society is indebted ;
   • (iii) a federal society to which the society is affiliated ; or
   • (iv) the Registrar.
3. (3) It shall be the duty of the President of the society to call the meetings of the committee so that atleast one meeting of the committee is held in every three months. If the President fails to discharge that duty with the result that no meeting is held, within such period of three months or within one month following such period, he shall with effect from the date of expiration of one month aforesaid cease to be the President : Provided that it shall also be the duty of the President to call such meetings within fifteen days of the date of receipt of requisition in writing in that behalf from any of the requisitionists specified in sub-section (2).
4. (4) The requisition referred to in sub-section
5. (2) or sub-section
6. (3) shall specify the purpose for which the meeting is to be called, and shall be signed by the requisitionists and delivered in person or by registered post at the registered address of the society.
7. (5) (a) If for any reason, a meeting is not called in accordance with the requisition delivered under sub-section (4), or if, in the opinion of the Registrar there is no committee or officer competent under this Act, the rules or the bye-laws to call a meeting, or if there be a dispute regarding the competence of the committee to function, then notwithstanding anything in the bye-laws of the society, the Registrar shall have the power to call such meeting in the manner prescribed, and to determine the time for such meeting and the subjects to be considered thereat. The Registrar or a person authorised by him in writing in this behalf shall preside at such meeting, but he shall not be entitled to vote.
   • (b) (i)If, at any general meeting of the society called by the Registrar himself under clause (a), otherwise than in pursuance of the requisition, there is no quorum, the meeting shall stand adjourned to such other date and time as the Registrar may determine.
     • (ii) If at the adjourned meeting also there is no quorum for holding the meeting, the members present shall constitute the quorum.
   • (c) If at any general meeting of the society called by the Registrar himself under clause
   • (a) in pursuance of the requisition, there is no quorum, the requisition shall lapse.
8. (6) Notwithstanding anything in this Chapter, if at any time the Government are satisfied that circumstances exist which render it necessary for them to call a general meeting for election of members of the committee to be held in accordance with the provisions of this Act, the Government or any person authorised by them in this behalf shall have power to call such meeting and to determine the place, time and the period of notice for such meeting. If at such meeting, there is no quorum, the meeting shall stand adjourned to such other date and time as the Government or person authorised may determine. If at the adjourned meeting also there is no quorum for holding the meeting, the members present shall constitute the quorum. When the meeting is called by the Government it shall be presided over by a person appointed by them in that behalf and if the meeting is called by the person authorised by the Government, the person so authorised shall preside at such meeting ; but the person presiding shall not be entitled to vote at the meeting so called or adjourned.
9. (7) (a)(i) If there is no committee or in the opinion of the Government or, the Registrar, it is not possible to call a general meeting for the purpose of conducting election of members of the committee, the Government, in respect of such class of societies as may be prescribed and the Registrar in all other cases may appoint a person or persons to manage the affairs of the society for a period not exceeding six months and the Government may, on their own and the Registrar with the previous approval of the Government, extend, from time to time, such period beyond six months, so however that the aggregate period include the extended period if any, shall not exceed three years.
   • (ii) Notwithstanding anything contained in this Act, in the special circumstances and for the reasons to be recorded, if in the opinion of the Government, it is not possible to hold the elections to the societies or class of societies, the Government may by order extend the term of the person or the persons appointed to manage the affairs of the society or class of societies beyond three years but not exceeding five years in aggregate.
   • (b) The person or persons so appointed shall, subject to the control of the Government or as the case may be, of the Registrar and subject to such instructions or directions as they may issue, from time to time, have power to exercise all or any of the functions of the committee or any officer of the society and to take all such actions as may be required in the interest of the society.
   • (c) The Registrar may fix the remuneration payable to the person or persons so appointed. The amount of such remuneration and other costs if any, incurred in the management of the society shall be payable out of the funds of the society.
   • (d) The Registrar may at any time, and shall at the expiration of the period of appointment of person or persons so appointed, arrange for calling of a general meeting for the election of a new committee in such manner as may be prescribed. The person or persons so appointed shall cease to manage the affairs of the society on the new committee entering upon its office.
10. (8) All the expenses incurred in connection with a meeting held under this section shall be paid out of the funds of the society : Provided that the Registrar may by order direct that such expenses shall, in a case falling under sub-section
11. (5) be recovered from any person who is, in the opinion of the Registrar, responsible for the failure to call the meeting.

Nominee of the Government on the Committee: [Rule 34]

1. (1) Where the Government,
   • (a) have subscribed to the share capital of a society, or
   • (b) have assisted indirectly in the formation or augmentation of the share capital of a society as provided in Section 43, or
   • (c) have guaranteed the repayment of principal and payment of interest on debentures issued by a society, or
   • (d) have guaranteed the repayment of principal and payment of interest on loans and advances to a society, the Government or any authority specified by the Government in this behalf shall have the right to nominate to the committee not more than [three persons as members] or one third of the total number of members of the committee, whichever is less, [notwithstanding anything contained in the bye-laws of society.]
2. (2) A member nominated to the committee under sub-section (1), shall, hold office during the pleasure of the Government or the specified authority, as the case may be.
3. (3) Any nominee of the Government may refer to the Government, through the Registrar, any resolution the execution of which, in the opinion of the nominee, is likely to be prejudicial to the interests of the Government and the decision of the Government thereon shall be final and binding on the committee :

Supersession of the committee Supersession of the committee:

1. (1) If in the opinion of the Registrar, the committee is not functioning properly or wilfully disobeys or fails to comply wilfully with any lawful order or direction issued by the Registrar under this Act or the rules, he may, after giving the committee an opportunity of making its representation, by order supersede the committee from a specified date ; and appoint either a person (hereinafter referred to as the special officer) or a committee of two or more persons (hereinafter referred to as the managing committee) to manage the affairs of the society for a period not exceeding two years, specified in the order which period, may, at the discretion of the Registrar, be extended from time to time, so however, that the aggregate period shall not exceed three years.
2. (2) Such order shall take effect from the date specified therein unless it is stayed by the Government. Where such order is reserved by the Government, the special officer or the managing committee shall forthwith handover the management of the society to the committee.
3. (3) The special officer or the managing committee shall, subject to the general control of the Registrar and to such directions as he may from time to time, give, have power to exercise all or any of the functions of the committee or of any officer of the society.
4. (4) The Registrar may fix the remuneration payable to the special officer or the managing committee. The amount of remuneration so fixed and such other expenditure incidental to the management of the society during the period of the supersession as may be approved by the Registrar shall be payable from the funds of the society.
5. (5) At the expiration of the period of appointment of the special officer or the managing committee, the Registrar shall arrange for the calling of a general meeting for the election of a new committee in accordance with the provisions of sub-section
6. (5) of Section 32.
7. (6) Where a society is indebted to any financing bank, the Registrar shall, before taking any action under sub-section
8. (1) in respect of that society, consult the financing bank.