Chapter VII Chapter VII

Audit, Inquiry, Inspection and Surcharge

Audit:— [Rule 45,46]

1. (1) There shall be a separate wing for audit in the Co-operative Department headed by the Chief Auditor who will work under the general superintendence and control of the Registrar of Co-operative Societies. The Chief Auditor shall audit or cause to be audited by a person authorised by him by a general or special order in this behalf, the accounts of a society at least once in every year and shall issue or cause to be issued an audit certificate with such particulars as may be prescribed, before the end of the succeeding co-operative year. Such audit shall primarily cover an examination of the debts, overdue, if any, verification of the cash balance and securities and valuations of the assets and liabilities of the society, [including prudent management of the affairs of the society in accordance with the Act, rules and byelaws.] [ Provided that in respect of a society not in receipt of State aid as specified in Section 43 of the Act, the committee of such society shall cause the audit of accounts of the society, every year as per the audit manual prescribed by the Registrar, either through the Chief Auditor or a Chartered Accountant [authorized by the Chief Auditor, and the Chief Auditor or the officer authorized by him shall issue Audit Certificate of such society.] Where such society opts to get the accounts of the society audited by the Chief Auditor, the later shall audit or cause to be audited the accounts of such society in the manner prescribed.]
2. (2) Every person who is, or has at any time being, an officer or employee of the society and every member including a past member shall furnish such information in regard to, any transaction, working and affairs of the society as Chief Auditor or such person authorised by him may require.

[(3) The committee shall prepare and submit or cause to be prepared and submitted within such period not exceeding six months as may be prescribed for different classes of societies after the end of the co-operative year, to the Chief Auditor or the person authorised by him as the case may be, such statements and reports as may be prescribed for the purpose of the audit of accounts of the Society for the Co-operative year.

1. (4) The audit shall be completed within a period of six months from the close of the Co-operative year of the registered society concerned and such other further period not exceeding six months as the Chief Auditor may permit for reasons to be recorded in writing.]

Inquiry:— [Rule 47,50] The Registrar, may of his own motion and shall, on the application of a society to which the society concerned is affiliated, or of not less than one third of the members of the Committee, or of not less than one fifth of the total number of members of the society, hold an inquiry or direct some person authorised by him by an order in this behalf to hold an inquiry into the constitution, working and financial condition of a society. Such inquiry shall be completed within a period of four months and the report of inquiry along with the findings of the Registrar thereon shall be communicated to the managing committee of the society. It shall be the responsibility of the managing committee to place the inquiry report before the General Body or Special General Body convened for the purpose for its information, within a period of one month from the communication of the inquiry report by the Registrar. The Registrar shall be competent to initiate action under the provisions of this Act, if the committee fails to take action as aforesaid: Provided that notwithstanding anything contained in this Act and the Rules made thereunder, the bye-laws of a society and the action of the society in placing the inquiry report alongwith the findings of the Registrar, the Registrar shall not be precluded from taking follow up action as may be required on the basis of inquiry report : Provided further that such action shall not be nullified even if the General Body of the Society passes a resolution negativing the findings of the inquiry: Provided also that the Registrar may for reasons to be recorded in writing extend the period of four months for completion of inquiry for a further period not exceeding two months. Explanation:— For the purposes of this section, “Managing Committee” includes a Committee constituted under Section 31(l)(a), and a person-in- charge appointed under Section 32(7)(a) and also a special officer appointed under Section 34 of the Act.]

Inspection:— [Rule 59,60]

1. (1) The Registrar may, of his own motion or on the application of a creditor of a society, inspect or direct any person authorised by him by a general or special order in this behalf to inspect the books of the society. Such inspection shall be completed within a period of three months from the date of order of inspection. Provided that no such inspection shall be made or directed on the application of a creditor unless the creditor:—
   • (a) satisfies the Registrar that the debt is a sum then due and that he has demanded payment thereof and has not received satisfaction within a reasonable time ; and
   • (b) deposits with the Registrar such sum as security, for the costs of the proposed inspection as the Registrar may require.
2. (2) The Registrar or any person authorised by him under sub-section
3. (1) shall prepare a report of inspection which shall be communicated to the Managing Committee of the Society together with the findings of the Registrar thereon. It shall be the responsibility of the Managing Committee to place the inspection report together with the findings of the Registrar before the General Body or Special General Body convened for the purpose for its information, within a period of one month of the communication of the inspection report by Registrar. The Registrar shall be competent to initiate action under the provisions of this Act, if the Committee fails to take action as aforesaid: Provided that notwithstanding anything contained in this Act and Rules made thereunder, the bye-laws of a society and the action of the society in placing the inspection report along with the findings of the Registrar, the Registrar shall not be precluded from taking, follow up action as may be required on the basis of inspection report: Provided further that such action shall not be nullified even if the General Body of the Society passes a resolution negativing the findings of the Registrar: Provided also that the Registrar may for reasons to be recorded in writing extend the period of three months for completion of inspection for a further period not exceeding two months. Explanation:— For the purposes of this section, “Managing Committee” includes an Adhoc Committee constituted under Section 31(l)(a), and a person-in-charge appointed under Section 32(7)(a) and also a Special Officer appointed under Section 34 of the Act.

Inspection of books by financing bank or federal society:— [Rule 50] A financing bank or a federal society shall have the right to inspect the books of any society which is indebted to it. The inspection may be made either by an officer of the financing bank or federal society authorised by the committee of such bank or society or by a member of its paid staff certified by the Registrar as competent to undertake such inspection. The officer or member so authorised to conduct inspection] shall at all reasonable times have free access to the books, accounts, documents, securities, cash and other properties belonging to or in the custody of the society and may also call for such information, statements and returns as may be necessary to ascertain the financial condition of the society and the safety of the sums lent to it by such bank or society. [The Officer or Member so authorised to conduct the inspection shall prepare a report of inspection which shall be communicated to the Managing Committee of the society together with the findings of the Registrar thereon. It shall be the responsibility of the Managing Committee to place the Inspection Report together with the findings of the Registrar before the General Body or Special General Body convened for the purpose for its information, within a period of one month of the communication of the Inspection Report by the Registrar. The Registrar shall be competent to initiate action under the provisions of this Act, if the Committee fails to take action as aforesaid: Provided that such action shall not be nullified even if the General Body of the Society passes a resolution negativing the findings of the Registrar: Provided further that notwithstanding anything contained in this Act and Rules made thereunder the bye-laws of a Society and the action of the Society in placing the Inspection Report alongwith findings of the Registrar, the Registrar shall not be precluded from taking, follow up action as may be required on the basis of Inspection Report. Explanation:- For the purposes of this section, “Managing Committee” includes a Committee constituted under Section 31(l)(a), and a person-in-charge appointed under Section 32(7)(a), and also a Special Officer appointed under Section 34 of this Act.

Rectification of defects in audit, inquiry or inspection:— The Registrar shall draw the attention of the society to the defects noticed in every audit conducted under Section 50 or inquiry held under Section 51 or inspection made under Section [52, or Section 53] and if the society is affiliated to another society, also the attention of that other society and may make an order directing the society or its officers to take such action and within such time as may be specified therein to remedy such defects.

Power to summon and examine documents and persons etc.:— [Rule 50]

1. (1) The Registrar, or the Chief Auditor or any person authorised by either of them to exercise any powers under this Act, shall at all reasonable times, have free access to the books, accounts, documents, records, securities, cash and other properties belonging to, or in the custody of the society and may summon any person in possession of, or responsible for the custody of any such books, accounts, documents, records, securities, cash or other properties, to produce all or any of them at any place at the headquarters of the society or any branch thereof.
2. (2) The Registrar or any person authorised by him to exercise any powers under this Act,—
   • (a) may summon any person who, he has reason to believe has knowledge of any of the affairs of the society to appear before him at any place at the headquarters of the society or any branch thereof or at any other place specified by the Registrar, and may examine that person on oath :
   • (b) may seize the books, accounts or documents belonging to, or in the custody of, the society, if he considers that such seizure is necessary to ensure safety of such books, accounts or documents, and shall give the person from whose custody the books, accounts or documents have been seized, a receipt for the same : Provided that the books, accounts or documents so seized shall be retained by him only for so long as may be necessary :

Surcharge Surcharge:— [Rule 51]

1. (1) If in the course of an audit under section 50, an inquiry under section 51, an inspection under section 52 or 53, or the winding up of a society, it appears that any person who has taken part in the organisation or management of the society or any past or present officer or servant of the society has misappropriated or retained or become liable or accountable for any money or property of the society or has been guilty of misfeasance or breach of trust in relation to the society, the Registrar may, on his own motion or on the application of the committee, liquidator or any creditor, inquire himself or direct any person authorised by him, by an order in writing in this behalf, to inquire into the conduct of such person.
2. (2) On the completion of the inquiry under sub-section (1), the Registrar may, if he is satisfied that there are good grounds for so doing, make an order requiring such person to repay or restore the money or property or any part thereof with interest at such rate as the Registrar may think just (not exceeding the current market rate) or to contribute such sum to the assets of the society by way of compensation in respect of the misappropriation, misfeasance or breach of trust as the Registrar thinks just: Provided that an order shall be made under this sub-section against any such person only after giving him an opportunity of making his representation.
3. (3) This section shall apply notwithstanding that such person may have incurred criminal liability by his act.

("Winding up of societies")

1. (1) If the Registrar, after an inquiry has been held under section 51 or an inspection has been made under section 52 or on the receipt of an application made by not less than three-fourths of the members of a society, is of the opinion that the society ought to be wound up, he may, after giving the society an opportunity of making its representation, by order direct it to be wound up.
2. (2) The Registrar may of his own motion and after giving the society an opportunity of making its representation, make an order directing the winding up of a society—
   • (a) where it is a condition of the registration of the society that the society shall consist of a minimum number of members and the membership falls short of such minimum; or
   • (b) where the society has not commenced working within a reasonable time or has ceased to work; or
   • (c) where the society has ceased to comply with any condition as to registration or management in this Act or the rules or the bye-laws.
3. (3) The Registrar may cancel an order for the winding up of a society, at any time, in any case where, in his opinion, the society should not be wound up.
4. (4) A copy of an order under this section shall be communicated in the prescribed manner to the society and to the financing bank, if any, of which the society is a member.

("Appointment of liquidator and his powers")

1. (1) Where the Registrar has made an order under section 57 for the winding up of a society, he may appoint a liquidator for the purpose and fix his remuneration.
2. (2) On the appointment of a liquidator, all the property, assets, effects and actionable claims or liabilities of the society as on the date of such order, shall vest in or devolve on the liquidator. He shall take such steps as he may deem necessary or expedient to prevent loss or deterioration of, or damage to, such property, assets, effects and actionable claims.
3. (3) Subject to the control of the Registrar, the liquidator shall have the power—
   • (a) to institute and defend suits and other legal proceedings on behalf of the society by the name of his office;
   • (b) to realise the assets of the society, by sale or otherwise;
   • (c) to determine from time to time the contribution to be made or remaining to be made and the debts due by the members or past members or by the estates or nominees, heirs or legal representatives of deceased members or by any officers or former officers to the society;
   • (d) to investigate all claims against the society, and subject to the provisions of this Act, to decide questions of priority arising between claimants;
   • (e) to pay claims against the society including interest up to the date of winding up according to their respective priorities, if any, in full or rateably, as the assets of the society may permit; the surplus, if any, remaining after payment of the claims, being applied in payment of interest from the date of such order of winding up at a rate fixed by him but not exceeding the contractual rate in any case;
   • (f) to determine by what persons and in what proportion the costs of liquidation are to be borne;
   • (g) to determine whether any person is a member, past member or nominee of deceased member;
   • (h) to give such directions in regard to the collection and distribution of the assets of the society as may appear to him to be necessary for winding up the affairs of the society;
     • (i) with the previous approval of the prescribed authority, to make any compromise or arrangement with creditors or persons claiming to be creditors or having or alleging to have any claim present or future, whereby the society may be rendered liable; and
   • (j) with the previous approval of the prescribed authority, to compromise all calls or liabilities to any calls and debts and liabilities capable of resulting in debts and all claims present or future, certain or contingent, subsisting or alleged to subsist between the society and a contributory or alleged contributory or other debtor or person apprehending liability to the society and all questions in any way relating to or affecting the assets or the winding up of the society on such terms as may be agreed and take any security for the discharge of any such call, liability, debt or claim and give a complete discharge in respect thereof.
4. (4) Any sum ordered under this section to be recovered as a contribution to the assets of a society or as costs of liquidation may be recovered, on a requisition being made in this behalf by the Registrar to the Collector in the same manner as arrears of land revenue.
5. (5) Save as provided in sub-section (4), orders made under this section shall, on application, be enforced by any Civil Court having local jurisdiction in the same manner as a decree of such Court.
6. (6) The liquidator shall continue to exercise his powers until the affairs of the society are completely wound up when he shall make a report to the Registrar and deposit the records of the society in such place as the Registrar may direct.

Liquidation of societies:—

1. (1) If the Registrar, after an inquiry has been held under Section 51 or an inspection has been made under Section 52 or 53 or upon receipt of an application made by not less than three-fourths of the members of a society or of his own motion in the case of a society which has not commenced working or has ceased to work, or has ceased to comply with any condition as to registration and management in this Act or the rules or the bye-laws, is of the opinion that the society ought to be wound up, he may, after giving the society an opportunity of making its representation, by order, direct it to be wound up.
2. (2) The Registrar may cancel an order for the winding up of a society at any time, in any case where in his opinion the society should not be wound up.
3. (3) A copy of such order shall be published in the Andhra Pradesh Gazette.

Power to cancel registration of a society:— Where the affairs of a society in respect of which a liquidator has been appointed have been wound up or, where no liquidator has been appointed, after two months from the date of an order under Section 59, or after disposal of an appeal against that order, if any, the Registrar shall make an order cancelling the registration of the society and the society shall cease to exist as a corporate body from the date of such order.

("Disputes which may be referred to the Registrar")

1. (1) Notwithstanding anything in any law for the time being in force, if any dispute touching the constitution, management or the business of a society arises—
   • (a) among members, past members and persons claiming through members, past members and deceased members; or
   • (b) between a member, past member or person claiming through a member, past member or deceased member and the society, its committee or any officer, agent or employee of the society; or
   • (c) between the society or its committee and any past committee, any officer, agent or employee, or any past officer, any past agent or past employee or the nominee, heirs or legal representatives of any deceased officer, deceased agent or deceased employee of the society; or
   • (d) between the society and any other society; such dispute shall be referred to the Registrar for decision.
2. (2) For the purposes of sub-section (1), the following shall be deemed to be disputes touching the constitution, management or the business of a society, namely:—
   • (a) a claim by the society for any debt or other amount due to it from a member, past member or the nominee, heir or legal representative of a deceased member, whether such debt or amount be admitted or not;
   • (b) a claim by a surety against the principal debtor where the society has recovered from the surety any amount in respect of any debt or other amount due to it from the principal debtor as a result of the default of the principal debtor, whether such debt or amount due be admitted or not;
   • (c) a claim by a society for any loss caused to it by a member, past member or deceased member, by any officer, past officer or deceased officer, by any agent, past agent or deceased agent, or by any servant, past servant or deceased servant, or by its committee, past committee or by any officer, past officer or deceased officer of the financing bank;
   • (d) a dispute arising under sub-section
3. (2) of Section 37;
   • (e) a dispute regarding the election of the members of the committee: Provided that the Registrar may, where the dispute in his opinion is of a complicated nature, refer it to a Civil Court for decision.
4. (3) If any question arises whether any person or property is or is not included in the definition of a dispute touching the constitution, management or the business of a society, the decision thereon of the Registrar shall be final and shall not be called in question in any Court.

("Limitation")

1. (1) Notwithstanding anything in the Limitation Act, 1963, but subject to the specific provisions made in this Act, the period of limitation for referring any dispute of the nature referred to in Section 61 shall—
   • (a) if the dispute relates to the recovery of any sum, including interest thereon, due to a society by a member thereof, be six years computed from the date on which such member dies or otherwise ceases to be a member of the society;
   • (b) if the dispute relates to any act or omission specified in clause
   • (c) of sub-section
2. (2) of Section 61, be six years from the date on which the act or omission alleged to have taken place or occurred;
   • (c) if the dispute relates to any matter other than those specified in clauses
   • (a) and (b), be six years from the date on which the act or omission with reference to which the dispute arises, took place.
3. (2) The Registrar may admit a dispute after the expiry of the period of limitation specified in sub-section (1), if the applicant satisfies the Registrar that he had sufficient cause for not referring the dispute within such period.

("Disposal of disputes")

1. (1) If any dispute touching the constitution, management or the business of a society, by which is meant,—
   • (a) a claim by the society for any debt or other amount due to it from a member, past member or the estate of a deceased member or a nominee, heir or legal representative of a deceased member, whether such debt or amount be admitted or not;
   • (b) a claim by a surety against the principal debtor where the society has recovered from the surety any amount in respect of any debt or other amount due to it from the principal debtor as a result of the default of the principal debtor, whether such debt or amount be admitted or not;
   • (c) a claim by a society for any loss caused to it by a member, past member or deceased member, by any officer, past officer or deceased officer, by any agent, past agent or deceased agent, or by any servant, past servant or deceased servant, or by its committee, past or present, whether such loss be admitted or not;
   • (d) a dispute made by a member, past member or the estate of a deceased member or a nominee, heir or legal representative of a deceased member against the society, its committee or any officer, agent or servant of the society;
   • (e) a dispute, between a society and another society or between a society and a liquidator of another society;
   • (f) a dispute, between a society and its creditors or between a society and the financing bank; arises, it shall be referred to the Registrar for decision.
2. (2) The Registrar may, on receipt of the reference of dispute under sub-section (1),—
   • (a) elect to decide the dispute himself; or
   • (b) transfer it for disposal to any person who has been invested by the Government with powers in that behalf; or
   • (c) refer it for disposal to an arbitrator appointed by the Registrar.
3. (3) The Registrar may, pending the decision of the dispute, make such interlocutory orders including orders of attachment as he may deem necessary in the interests of justice.
4. (4) The decision of the Registrar, or the person or the arbitrator to whom the dispute is referred, shall, subject to such rules as may be prescribed, be final and conclusive and shall not be liable to be called in question in any court.

("Power to direct revival of defunct societies")

1. (1) Where the Registrar is of opinion that a society which has ceased to function and which has no chance of revival, should not be wound up, he may notwithstanding anything in this Act, direct that the society shall be revived and may issue such directions as he deems fit to the committee of the society to ensure its proper functioning.
2. (2) If the society fails to comply with the directions issued under sub-section
3. (1) within the time specified by the Registrar, the Registrar may take such action as he deems necessary for the winding up of the society under the provisions of this Act.

Settlement of disputes:—

1. (1) Notwithstanding anything in any law for the time being in force, if any dispute touching the constitution, management or the business of a society, other than a dispute regarding disciplinary action taken by the society or its committee against a paid employee of the society, arises—
   • (a) among members, past members and persons claiming through members, past members and deceased members; or
   • (b) between a member, past member or person claiming through a member, past member or deceased member and the society, its committee or any officer, agent or employee of the society; or
   • (c) between the society or its committee and any past committee, any officer, agent or employee, or any past officer, past agent or past employee or the nominee, heir or legal representative of any deceased officer, deceased agent or deceased employee of the society; or
   • (d) between the society and any other society; such dispute shall be referred to the Registrar for decision. Provided that no dispute shall be referred under this sub-section unless the disputant has deposited in the society the amount, if any, admitted to be due from him to the society.
2. (2) Where any question arises whether for the purposes of sub-section (1), any person is or is not a member of a society, or whether any matter referred to for decision under this section is a dispute or not, the question shall be for the decision of the Registrar and his decision thereon shall be final.
3. (3) The Registrar may, on receipt of such reference,—
   • (a) decide the dispute himself; or
   • (b) transfer it for disposal to any person who has been invested by the Government with powers in that behalf; or
   • (c) refer it for disposal to an arbitrator appointed by the Registrar.
4. (4) The Registrar may, pending the decision of the dispute, make such interlocutory orders as he may deem necessary in the interest of justice.
5. (5) Any person aggrieved by an award or decision of an arbitrator or a person appointed under clause
   • (b) or clause
   • (c) of sub-section
6. (3) may within two months from the date of the award or decision, appeal to the Tribunal.
7. (6) The decision or award of the Registrar, or the arbitrator or the person appointed under sub-section
8. (3) shall, subject to any appeal under sub-section (5), be final and shall not be liable to be called in question in any court.

Execution of decisions, decrees and orders:—

1. (1) Every decision, award or order duly passed by the Registrar, or any person authorised by him or by an arbitrator or the Tribunal under this Act shall, if not carried out,—
   • (a) on a certificate issued by the Registrar, be deemed to be a decree of a Civil Court and shall be executed in the same manner as a decree of such Court; or
   • (b) be executed according to the law for the time being in force for the recovery of arrears of land revenue: Provided that any application for the recovery in such manner shall be made to the Collector and shall be accompanied by a certificate signed by the Registrar or by any person authorised by him in this behalf; or
   • (c) be executed by the Registrar or any other person subordinate to him empowered by the Registrar in this behalf, by attachment and sale or by sale without attachment of any property of the person or a society against whom the order, decision or award has been obtained or passed.
2. (2) Any private transfer or delivery of, or encumbrance or charge on, property made or created after the issuance of a certificate by the Registrar under sub-section
3. (1) shall be null and void as against the society on whose application the certificate was issued.

("Execution of decisions etc., of arbitrator or liquidator")

1. (1) Every decision or order made under Section 60, Section 62, Section 70 or Section 71 shall, if not carried out,—
   • (a) on a certificate signed by the Registrar or any person authorised by him in this behalf, be deemed to be a decree of a Civil Court and shall be executed in the same manner as a decree of such Court; or
   • (b) be executed by the Registrar, or any other person subordinate to him empowered by the Registrar in this behalf, by the recovery of a sum of money, by the attachment and sale, or by the sale without attachment, of any property of the person or society against whom such order or decision has been obtained or passed.
2. (2) Every order made by the liquidator under Section 66 shall be executed as if it were an order made by the Registrar under Section 71.

("Attachment of property before award etc.")

1. (1) Where the Registrar is satisfied on a reference made to him under Section 61 or on an inquiry made under Section 51, or an inspection made under Section 52 or 53, or an examination of an auditor’s report under Section 50, that any person with intent to defeat or delay the execution of any decision that may be passed thereon is about to dispose of the whole or any part of his property, the Registrar may, unless adequate security is furnished, direct the conditional attachment of the said property or such part thereof as he thinks necessary; and such attachment, if effected by him, shall have the same effect as if it had been made by a competent Civil Court.
2. (2) Under the provisions of this section, it shall be open to the Registrar to attach any property, if he is satisfied that the person with intent to defeat or delay the execution of any decision, is about to dispose of the whole or any part of the property.

Recovery of debts:—

1. (1) Notwithstanding anything to the contrary in any law for the time being in force, the Registrar may, on the application of a society, a financing bank or a federal society, as the case may be, and after giving an opportunity of being heard to the parties, pass an order for the recovery of any amount due and payable by a member, a past member, a deceased member or a nominee, heir or legal representative of a deceased member to the society, the financing bank or the federal society, as the case may be: Provided that the decision of the Registrar under this sub-section shall not be subject to any suit in a civil court after the expiry of the period of limitation prescribed under this Act.
2. (2) Where an order is passed under sub-section (1), the Registrar or any person authorised by him shall, on the application of the society, the financing bank or the federal society concerned, recover the amount specified in the order together with interest and the costs, if any, by the attachment and sale of the property of the person against whom such order has been passed.
3. (3) Any amount ordered to be recovered under this section or any other section of this Act shall be recoverable in the same manner as an arrear of land revenue.

Registrar’s power to enforce performance of obligations:—

1. (1) It shall be the duty of a society, its committee and its officers to perform the obligations imposed upon them by this Act, the rules and the bye-laws.
2. (2) Where a society, its committee or any of its officers fails to perform any obligation imposed under this Act, the rules or the bye-laws, the Registrar may, by order, direct the society, committee or officer concerned to perform the obligation within such time as may be specified in the order.
3. (3) If the society, committee or officer fails to comply with the direction issued under sub-section (2), the Registrar may take such measures as he deems necessary for the enforcement of the obligation, including the appointment of a person to perform such obligation at the expense of the society.
4. (4) Any expense incurred in the performance of such obligation shall be recoverable from the society as an arrear of land revenue.

Recovery of sums due to Government:—

1. (1) All sums due from a society to the Government including any cost awarded to the Government under any provision of this Act may, on a certificate for the amount due issued by the Registrar in the prescribed form, be recovered as if they were arrears of land revenue and the Registrar or any person authorised by him in this behalf shall have the powers of a Collector under the Andhra Pradesh Revenue Recovery Act, 1864.
2. (2) Any sum due from a society to the Government and recoverable under sub-section
3. (1) may be recovered, in accordance with the provisions of non-attachment of property as provided in the Code of Civil Procedure, 1908 or any other law for the time being in force, by attachment and sale of the property of the society or in the case of default by the society, by attachment and sale of the property of any person who in the opinion of the Registrar is responsible for the default of the society:

Register of members Register of members:—

1. (1) Every society shall maintain a register of members and enter therein such particulars as may be prescribed.
2. (2) The register shall be prima facie evidence of any matter entered therein as provided under this Act.

("Proof of entries in society’s books")

1. (1) A copy of any entry in a book of a society regularly kept in the course of business shall, if certified in such manner as may be prescribed, be received in any suit or legal proceeding as prima facie evidence of the existence of such entry, and shall be admitted as evidence of the matters, transactions and accounts therein recorded in every case where, and to the same extent to which, the original entry itself is admissible.
2. (2) No officer of a society shall, in any legal proceeding to which the society is not a party, be compelled to produce any of the society's books the contents of which can be proved under sub-section (1), or to appear as a witness to prove the matters, transactions and accounts therein recorded, unless by order of the Court or the arbitrator made for special cause.

("Evidence of documents, etc.") A copy of any document or other material fact recorded in the registers or the books of a society shall, if certified in such manner as may be prescribed, be received in any suit or legal proceeding as prima facie evidence of such document and shall be admitted as evidence of the transaction or other matter therein recorded in every case where, and to the same extent to which, the original document is admissible.

Constitution of Tribunal:—

1. (1) The Government shall constitute a Tribunal for such area or areas as may be specified, for the purpose of performing the functions assigned to it by or under this Act.
2. (2) The Tribunal shall consist of three members, namely:—
   • (a) A Chairman, who shall be a person who is or has been a District Judge;
   • (b) a member, who shall be an officer of the Co-operative Department not below the rank of a Joint Registrar;
   • (c) a member, who shall be a Chartered Accountant or a person who has served as a senior officer in the Co-operative Department or a person, who has been atleast for five years, an Advocate or a person who has worked as a Professor of Law or Economics in a University for atleast five years.
3. (3) The members of the Tribunal shall be appointed by the Government for such period as may be prescribed.
4. (4) The Tribunal shall have the power to regulate its own procedure, and shall be guided by the principles of natural justice.
5. (5) The Tribunal shall have the same powers as are vested in a Civil Court under the Code of Civil Procedure, 1908 (Central Act 5 of 1908) while trying a suit in respect of the following matters:—
   • (a) summoning and enforcing the attendance of any person and examining him on oath;
   • (b) requiring the discovery and production of any document;
   • (c) receiving evidence on affidavit;
   • (d) issuing commissions for the examination of witnesses.

Appeals:—

1. (1) Any person or society aggrieved by any decision passed or order made or proceedings taken under sub-section
2. (1) of section 17, section 21, sub-section (2-B) of section 21, section 23, section 27, section 30, section 32, section 34, section 34-A, sub-section
3. (3) of section 37, section 60, section 62, section 64, section 66, section 70, section 71, section 73 or section 117 may appeal to the Tribunal: Provided that nothing in this sub-section shall apply to any decision or order under sub-sections
4. (3) and
5. (4) of section 32, section 34-A, sub-section
6. (3) of section 71.
7. (2) No appeal shall be preferred after the expiry of sixty days from the date of the decision, order or proceeding complained of: Provided that the Tribunal may admit an appeal preferred after the expiry of the period of sixty days mentioned in sub-section (1), if it is satisfied that the appellant had sufficient cause for not preferring the appeal within the said period.
8. (3) The Tribunal may pass such interim orders pending the decision of the appeal as it may deem fit.
9. (4) The Tribunal may award costs of any appeal out of the funds of the society concerned or fix the liability for costs on the person responsible for the order appealed against.
10. (5) Any order passed by the Tribunal under this section shall be final and shall not be called in question in any Court.

("Power of Tribunal and Registrar to call for proceedings of subordinate officers")

1. (1) The Tribunal or the Registrar may call for and examine the record of any proceeding heard and disposed of by any officer subordinate to it or him, for the purpose of satisfying themselves or himself as to the correctness, legality or propriety of any decision or order passed and as to the regularity of the proceedings of such subordinate officer; and if in any case it appears to the Tribunal or the Registrar that any such decision or order should be modified, annulled or reversed or remitted for reconsideration, the Tribunal or the Registrar may pass orders accordingly : Provided that the Tribunal or the Registrar shall not pass any order prejudicial to any party under this sub-section without making an inquiry or giving such party an opportunity of making a representation.
2. (2) The Tribunal or the Registrar may stay the execution of any such decision or order pending the exercise of its or his powers under sub-section
3. (1) in respect thereof.

("Revision")

1. (1) Any person or society aggrieved by any decision passed or order made under this Act may apply to the Government for revision, and the Government may, at any time, for the purpose of satisfying themselves as to the correctness, legality or propriety of any decision or order passed by any authority acting under this Act, call for and examine the record and pass such order in reference thereto as they think fit: Provided that the Government shall not pass any order prejudicial to any party under this sub-section without giving such party an opportunity of making a representation.
2. (2) The Government may stay the execution of any such decision or order pending the exercise of their powers under sub-section
3. (1) in respect thereof.

Review:-

1. (1) The Government or the Registrar may, either of their own motion or on an application made by any of the parties to the dispute, review any order passed by them under this Act, if they consider that there is an error apparent on the face of the record: Provided that no such application shall be entertained if the period of limitation prescribed for an appeal has expired: Provided further that nothing in this sub-section shall be construed as limiting or restricting the power of the Government or the Registrar to correct any clerical or arithmetical error in any order passed by them.
2. (2) Every application for review under sub-section
3. (1) shall be made within such time and in such manner as may be prescribed.
4. (3) The Government or the Registrar shall not pass any order under sub-section (1) adversely affecting the interests of any party unless such party has had an opportunity of making a representation.
5. (4) A review order passed by the Registrar shall not be reviewed by him.

Offences and penalties:-

1. (1) Any person who—
   • (a) willfully makes a false return or furnishes false information or willfully fails to furnish any information required by this Act or the rules or the bye-laws;
   • (b) willfully or without any reasonable excuse disobeys any summons, requisition or lawful written order issued under the provisions of this Act or does not produce or cause to be produced any document or book, account, record or other material required for the production of which an order has been made under this Act;
   • (c) knowingly acts as an officer or member of a committee when not eligible to do so;
   • (d) willfully fails to comply with any order issued under sub-section
2. (5) of Section 16;
   • (e) willfully fails to comply with any order issued under sub-section
3. (2) of Section 37;
   • (f) willfully fails to comply with any order of the Registrar issued under Section 54, Section 55 or Section 71;
   • (g) being a member of a committee, fails to take immediate action to initiate prosecution of any person for co-operative offence or any other offence under any other law applicable;
   • (h) willfully fails to handover the books, accounts, records or other property to the new committee or to the special officer or the managing committee or any other person appointed under this Act, on the expiry of the term of the committee or on dissolution, supersession or de-registration of the society;
     • (i) being a member of a committee, willfully refuses to carry out the resolutions of the general body;
   • (j) willfully misuses or misapplies the property and funds of the society; shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to five thousand rupees, or with both.
4. (2) Every officer or employee of a society who willfully makes, or causes to be made, any false entry in any book, account, record or document which a society is required to maintain under this Act or the rules, shall be punishable with imprisonment for a term which may extend to six months, or with fine which may extend to five thousand rupees, or with both.
5. (3) No court shall take cognizance of any offence under this Act except with the previous sanction of the Registrar, in writing.
6. (4) No court inferior to the court of a Magistrate of the First Class shall try any offence under this Act.

Cognizance of offences:

1. (1) No court inferior to that of a Magistrate of the First Class shall try any offence under this Act.
2. (2) No prosecution shall be instituted, under this Act, without the previous sanction of the Registrar and such sanction shall not be given without giving to the person concerned a reasonable opportunity to represent his case.

Punishment for offences not otherwise provided for: If any person or society contravenes any provision of this Act or the rules or the bye-laws made thereunder for which no punishment has been provided in this Act, such person or the society shall, on conviction, be punishable with fine which may extend to five hundred rupees.

("Constitution of co-operative service")

1. (1) The Government may constitute a co-operative service for the whole of the State of Andhra Pradesh and may frame rules for the regulation of the recruitment and conditions of service of persons appointed to such service.
2. (2) Every person who is a member of any such service shall be appointed by such authority as may be prescribed and shall receive his salary and allowances from the Co-operative Service Fund.
3. (3) The Government may constitute a Co-operative Service Fund which shall be maintained in such manner as may be prescribed and every society shall contribute to the said fund such part of its net profits as may be prescribed.

("Societies to be bodies corporate")

The registration of a society shall render it a body corporate by the name under which it is registered having perpetual succession and a common seal, and the society shall be entitled to acquire, hold and dispose of property, to enter into contracts on its behalf, to institute and defend suits and other legal proceedings, and to do all such things as are necessary for the purpose for which it is constituted.

Companies Act, 1956 not to apply:— The provisions of the Companies Act, 1956 shall not apply to a society.

Power to make rules:—

1. (1) The Government may, by notification in the Andhra Pradesh Gazette, make rules for carrying out all or any of the purposes of this Act.
2. (2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for,—
   • (a) all matters expressly required or allowed by this Act to be prescribed ;
   • (b) the entry of new members, the check of the list of members and the procedure for their admission and the entry of the name of every person admitted or deemed to have been admitted as a member of the society in such records of the society as may be prescribed ;
   • (c) the procedure for the removal of members including associate members ;
   • (d) the procedure to be followed in proceedings before the Registrar or arbitrator or other person deciding disputes ;
   • (e) the procedure to be followed by the liquidator and for the disposal of surplus assets ;
   • (f) the procedure to be followed for the custody and preservation of records of the societies, for the grant of certified copies of such records and for the fees to be charged for the grant of such copies ;
   • (g) the qualifications and the method of appointment of auditors ;
   • (h) the preparation and submission of annual reports and financial statements by the societies and the publication of such reports and statements ;
     • (i) the procedure for the conduct of elections to the committees and other bodies of societies, including the reservation of seats for members of the weaker sections [and women], and for the settlement of election disputes ;
   • (j) the procedure for the inspection of the books of a society by the Registrar or financing bank ;
   • (k) the procedure for the recovery of sums due to a society from a member ;
   • (l) the mode of serving summons and notices and of publishing orders ;
   • (m) the procedure for the registration of Societies and amendment of bye-laws ;
   • (n) the procedure for the determination of the class of societies and the conditions for the registration of societies.
3. (3) Every rule made under this section shall, immediately after it is made, be laid before the Legislative Assembly of the State if it is in session and if it is not in session, in the session immediately following for a total period of fourteen days which may be comprised in one session or in two successive sessions, and if, before the expiration of the session in which it is so laid or the session immediately following, the Legislative Assembly agrees in making any modification in the rule or in the annulment of the rule, the rule shall, from the date of notification of such modification or annulment in the Andhra Pradesh Gazette have effect only in such modified form or shall stand annulled, as the case may be ; so however that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.

Power to remove difficulties:— If any difficulty arises in giving effect to the provisions of this Act, the Government may, by order published in the Andhra Pradesh Gazette, do anything not inconsistent with the provisions of this Act or the rules which appears to them to be necessary or expedient for the purpose of removing the difficulty.

Repeals and savings:—

1. (1) The Andhra Pradesh (Andhra Area) Co-operative Societies Act, 1932, the Andhra Pradesh (Andhra Area) Co-operative Land Mortgage Banks Act, 1934, the Madras Co-operative Societies Act, 1932 as in force in the territories transferred from the State of Madras to this State, the Madras Co-operative Land Mortgage Banks Act, 1934 as in force in the territories transferred from the State of Madras to this State, the Andhra Pradesh (Telangana Area) Co-operative Societies Act, 1952 and the Hyderabad Co-operative Land Mortgage Banks Act, 1349 Fasli are hereby repealed.
2. (2) The repeal of the Acts specified in sub-section
3. (1) shall not affect—
   • (a) the previous operation of any Act so repealed or anything duly done or suffered thereunder;
   • (b) any right, privilege, obligation or liability acquired, accrued or incurred under any Act so repealed;
   • (c) any penalty or punishment incurred in respect of any offence committed against any Act so repealed;
   • (d) any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty or punishment as aforesaid, and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, and any such penalty or punishment may be imposed as if this Act had not been passed.
4. (3) Subject to the provisions of sub-section (2), anything done or any action taken (including any appointment or delegation made, notification, order, instruction or direction issued, rule, form, bye-law or scheme framed, certificate obtained, patent, permit or licence granted, or registration effected) under any such Act shall be deemed to have been done or taken under the corresponding provision of this Act and shall continue to be in force accordingly unless and until superseded by anything done or any action taken under this Act.
5. (4) Any reference in any enactment or in any other instrument to any Act so repealed shall be construed as a reference to the corresponding provision of this Act. Provided that the Co-operative Land Mortgage Banks which were registered or deemed to be registered under the Andhra Pradesh (Andhra Area) Co-operative Land Mortgage Banks Act, 1934 or the Madras Co-operative Land Mortgage Banks Act, 1934 or the Hyderabad Co-operative Land Mortgage Banks Act, 1349 Fasli shall continue to function as Agricultural Development Banks under this Act and shall be subject to the provisions of this Act: Provided further that the provisions of this Act shall apply to the Co-operative Land Mortgage Banks aforesaid as if they were registered under this Act.