Chapter VII MANAGEMENT OF SOCIETIES

Subject to the provisions in this Regulation and the rules made thereunder, the final authority of every society shall vest in the general body of members in general meeting, summoned in such a manner as may be specified in the bye-laws: Provided that where the bye-laws of a society provide for the election of delegates of such members, the final authority may vest in the delegates of such members elected in the prescribed manner, and assembled in the general meeting.

1. (1) The management of every society shall vest in a Committee constituted under this Regulation, which shall exercise such powers and perform such duties as may be conferred or imposed on it by this Regulation, the rules and the bye-laws: Provided that in case of co-operative society carrying on the business of banking, the fit and proper criteria framed by the Reserve Bank shall be followed.
2. (2) Save as otherwise provided, the Managing Committee of a society, which is not an apex society, shall consist of, such number of elected members not exceeding twenty-one. Explanation.––For the purposes of this sub-section, the expression “apex

society ” means a society,—

1. (a) the area of operation of which extends to the whole of the Union territory;
2. (b) the main object of which is to promote the principal objects of the societies affiliated to it as members and to provide for the facilities and services to them; and
3. (c) which has been classified as an apex society by the Registrar.

1. (3) There shall be reserved one seat for the Scheduled Castes or the Scheduled Tribes or Other Backward Classes and two seats for women in the Managing Committee of every society consisting of individuals as members and having members from such class or category of persons as may be prescribed: Provided that one seat may be reserved for the persons who are small farmers and marginal farmers.
2. (4) Every member of a society who is entitled to vote shall be eligible for appointment as a member of a Committee thereof, if––
   • (a) he is continuously a member of the society for a period not less than three years and continues to be such member;
   • (b) he is not in default in respect of any loan taken by him from any co-operative society, co-operative bank or any other financial institution;
   • (c) he has any interest directly or indirectly in any subsisting contract made with the society or in any property sold or purchased by the society or any other transaction of the society except in any investment made in or any loan taken from the society;
   • (d) he is not otherwise disqualified for being appointed as such member;
   • (e) he is not held responsible under section 87;
   • (f) no order for recovery of costs is made against him by a magistrate under section 97;
   • (g) no order is made against him under sections 65 and 99;
   • (h) he is not found guilty of any of the offences mentioned under

section 156 or any offence under section 314 of the Bharatiya Nyaya

Sanhita, 2023, in respect of the property of any society.

1. (5) A member of the Committee who incurs any of the disqualifications specified above shall vacate the office, and if he does not vacate such office, he shall be removed by the Registrar as such member: Provided that the Registrar shall before issuing the order of removal, give the person concerned an opportunity of being heard.
2. (6) Notwithstanding anything contained in sub-sections (4) and (5),––
   • (a) in case of societies dispensing with credit, no person who carries on the business of money lending, shall be eligible for appointment as a member of the Managing Committee of the society;
   • (b) a member of a society, who carries on business of the kind carried on by the societies of which he is the member, shall not be eligible to be the member of any Committee of that society without the sanction of the Registrar.
3. (7) Where any person becomes a member of a Committee of a society in contravention of sub-section (6), he shall be removed from office as a member of such Committee by the Registrar: Provided that the Registrar shall, before issuing the order of removal, give the person concerned an opportunity of being heard.
4. (8) The term of the elected members of the Managing Committee and its office bearers shall be five years from the date of election for all co-operative societies including co-operative bank and federal societies: Provided that the Managing Committee shall fill up a casual vacancy in the Committee by nomination out of the same class or categories of members in respect of which the casual vacancy has arisen within sixty days from the date of such vacancy, if the remaining term of office of the Managing Committee is less than half of its original term.
5. (9) The elected members of the Managing Committee and its office bearers shall cease to hold the office on the date of expiry of their term.
6. (10) The office bearers of the Managing Committee of the societies shall be eligible for re-election.
7. (11) The society shall co-opt persons having experience in the field of banking, management, finance or specialisation in any other field relating to the objects and activities undertaken by the society as the members of the Managing Committee: Provided that the number of such co-opted members shall not exceed two in addition to the twenty-one members as specified in sub-section (2).
8. (12) The co-opted members as aforesaid shall not have the right to vote in any election of the society in their capacity as such members or to be eligible to be elected as office bearers of the Managing Committee.
9. (13) In case, where there are functional directors of a society, they shall also be members of the Managing Committee and such members shall be excluded for the purpose of counting the total number of members of such Managing Committee. Explanation.––For the purposes of this sub-section, the expression “functional director” means and includes a Managing Director or a Chief Executive Officer, by whatever designation called, or any exofficio member or any of the Head of the Department of the concerned society, nominated by the Committee.
10. (14) No Committee member of a society shall, as a Committee member, be present in the discussion of, or vote on, any contract or arrangement entered into, or to be entered into, by or on behalf of such society, if he or his relative is directly or indirectly concerned or interested in such contract or arrangement and no relative of any of the sitting Managing Committee members of the society shall be recruited as employee including the Chief Executive Officer of that society. Explanation.––For the purposes of this sub-section, the term “relative” with reference to an individual, includes—
    • (a) spouse;
    • (b) father (including step father);
    • (c) mother (including step mother);
    • (d) son (including step son);
    • (e) son’s wife;
    • (f) daughter (including step daughter);
    • (g) daughter’s husband;
    • (h) father’s father;
      • (i) father’s mother;
    • (j) mother’s father;
    • (k) mother’s mother;
    • (l) son’s son;
    • (m) son’s son’s wife;
    • (n) son’s daughter;
    • (o) son’s daughter’s husband;
    • (p) daughter’s son;
    • (q) daughter’s son’s wife;
    • (r) daughter’s daughter; daughter’s daughter’s husband;
    • (t) brother (including step brother);
    • (u) brother’s wife;
      • (v) sister (including step sister);
    • (w) sister’s husband; and
      • (x) Hindu undivided family.
11. (15) Any member of the Managing Committee who violates the provision of sub-section (14), shall be disqualified for being a member of the Managing Committee and deemed to have vacated his office from the date of such meeting of the Managing Committee as is referred to in the said sub-section and such proceedings shall be deemed to be void.

1. (1) The Committee may exercise all such powers as may be necessary or expedient for the purpose of carrying out its functions under this Regulation.
2. (2) Without prejudice to the generality of the foregoing powers, such powers shall include the following, namely:––
   • (a) to admit members;
   • (b) to interpret the organisational objectives and set up specific goals to be achieved towards these objectives;
   • (c) to make periodic appraisal of operations;
   • (d) to appoint and remove Chief Executive Officer and such other employees of the society as are not required to be appointed by the Chief Executive Officer: Provided that the Committee shall frame fair and transparent policy for recruitment of Chief Executive Officer or any other employee;
   • (e) to make provisions for regulating the appointment of employees of the society and the scales of pay, allowances and other conditions of service of, including disciplinary action against such employees;
   • (f) to place the annual report, annual financial statements, annual plan and budget for the approval of the general body;
   • (g) to consider audit and compliance report and place the same before the general body;
   • (h) to acquire or dispose of immovable property;
     • (i) to review membership in other co-operative society;
   • (j) to approve annual and supplementary budget;
   • (k) to raise funds;
   • (l) to sanction loans to the members and determine the security to be taken;
   • (m) to take measures relating to the recovery of loans; and
   • (n) to take such other measures or to do such other acts as may be prescribed or required under this Regulation, rules or the bye-laws or as may be delegated by the general body of the society.

1. (1) The Chief Executive Officer shall convene the meetings of the Managing Committee at the instance of the Chairperson or President of the society: Provided that where such Chairperson or President fails to direct the Chief Executive Officer to convene the meeting of the Board within the quarter, such Chief Executive Officer shall convene the meeting on the basis of requisition of the Vice-Chairperson or Vice-President or any other Member of the Committee: Provided further that notwithstanding anything contained in the first proviso, the Chief Executive Officer may also convene the meeting on the basis of requisition from at least fifty per cent. of Members of the Committee.
2. (2) The total number of meetings of the Committee in a year and the venue of meetings shall be such as may be specified in the bye-laws: Provided that the Committee shall meet at least once in every quarter.
3. (3) The Chairperson or President, if for any reason, is unable to attend a meeting of the Committee, the Vice-Chairperson or Vice-President and in the absence of both, any other Member of the Committee chosen by the Members of the Committee present from amongst themselves at the meeting, shall preside over the meeting.
4. (4) The quorum for a meeting of the Managing Committee of a society shall be one-half of its total number of Committee members.

1. (1) There shall be a Chief Executive Officer, by whatever designation called, of every society to be appointed by the Committee and he shall be a full-time employee of such society.
2. (2) No society shall appoint or continue the employment of any person as the Chief Executive officer who—
   • (a) is below the age of twenty-one years or has attained the age of seventy years: Provided that any person above the age of seventy years may be appointed by a special resolution passed by three-fourths majority of the Committee members, in which case the explanatory statement annexed to the notice for such motion shall indicate the justification for appointing such person;
   • (b) is an undischarged insolvent or has any time been adjudged as an insolvent;
   • (c) has at any time been convicted by a court of an offence and sentenced for a period of more than six months; or
   • (d) does not meet the criteria for “fit and proper”, as determined by the Registrar in case of credit societies or in case of non-credit societies, does not meet the criteria as the Registrar may prescribe in terms of educational qualifications and relevant experience.
3. (3) The Chief Executive Officer shall be a member of the Managing Committee and of such other Committees or Sub-Committees as may be constituted.
4. (4) Where the Central Government or the Administration holds fifty-one per cent. or more equity share capital or of total shares of the society, the salary and allowances payable to and other terms and conditions of service including pension, gratuity and other retirement benefits of the Chief Executive Officer shall be such as may be prescribed.

The Chief Executive Officer shall, under the general superintendence, direction and control of the Committee, exercise and discharge the following powers and functions, namely:––

1. (a) day-to-day management of the business of the society;
2. (b) operate the account of the society and be responsible for making arrangements for safe custody of cash;
3. (c) sign the documents for and on behalf of the society;
4. (d) make arrangements for the proper maintenance of various books and records of the society and for the correct preparation, timely submission of periodical statements and returns in accordance with the provisions of this Regulation, the rules and the bye-laws;
5. (e) convene meetings of the general body of the society, the Managing Committee and the other Committees or sub-Committees and maintain proper records of such meetings;
6. (f) make appointments to the posts in the society in accordance with the bye-laws;
7. (g) assist the Committee in the formulation of policies, objectives and planning;
8. (h) furnish to the Committee periodical information necessary for appraising the operations and functions of the society;
   • (i) appoint the person to sue or be sued on behalf of the society;
9. (j) present the draft annual report and the financial statement for the approval of the Committee within thirty days of closure of the financial year; and
10. (k) perform such other functions, and exercise such other powers, as may be specified in the bye-laws of the society, or delegated by the Committee or general body.

1. (1) Where in respect of any society—
   • (i) a new Committee of Management is, for any reason whatsoever, not elected before the expiry of the term of office of members of a Committee of Management of such society;
   • (ii) a new Committee has been elected and not functioning within a period of fifteen days (not being a Committee referred to in section 85);
   • (iii) there is a stalemate in the constitution of the Committee, and if such Committee has ceased to function, a vacuum is created in the Management;
   • (iv) any Committee is prevented from entering upon office;
   • (v) a new Committee has failed to enter upon office on the date on which the term of office of the existing Committee expired; or
   • (vi) where more than one group of persons in a society is claiming to be elected as the Committee members and proceedings in respect thereof have been filed, the Registrar shall, by an order in writing, appoint a person or a Committee of persons to be the custodian of the society to manage the affairs of the society for a period of one year or until a new Committee of Management is elected or, as the case may be, starts functioning: Provided that before making such order, the Registrar shall display a notice on the notice board at the head office of the society, inviting objections and suggestions with respect to the proposed order within a period specified in the notice and consider all objections and suggestions received by him within that period: Provided further that it shall not be necessary to display such notice in any case where Registrar is satisfied that immediate action is required to be taken or that it is not reasonably practical to display such notice.
2. (2) The custodian shall arrange to hold election of such society within a period of one year and the Committee shall be constituted before the expiration of that period.
3. (3) The custodian so appointed shall, subject to the control of the Registrar and to such instructions as he may from time to time give, have powers to exercise all or any of the functions of the Committee and take all such actions as may be required in the interest of the society.
4. (4) All acts done or purported to be done by the custodian during the period when the affairs of the society are carried on by such custodian, shall be binding on the new Committee of Management.

1. (1) A President, Vice-President, Chairperson, Vice-Chairperson, Secretary, Treasurer or any other officer by whatever designation called, who holds office by virtue of his election to that office, shall cease to be the President, Vice-President, Chairperson, Vice-Chairperson, Secretary, Treasurer or such officer, as the case may be, if a motion of no-confidence is carried at a meeting of the Committee by the majority of not less than two-third of the total number of members present at the meeting and voting, and such office shall thereupon be deemed to be vacant.
2. (2) The requisition for such special meeting shall be signed by not less than one-third of the total number of members of the Committee who are entitled to vote, shall be delivered to the Registrar in respect of a Committee of a society which has the Registrar as its member and also in any other cases to the Registrar: Provided that no such requisition for a special meeting shall be made within a period of six months from the date on which any of the officers referred to in sub-section (1) has entered upon his office.
3. (3) The Registrar upon whom the requisition has been made under sub-section (2), shall convene a special meeting of the Committee within a period of thirty days from the date of receipt of such requisition.
4. (4) The meeting shall be presided over by such officer as authorised by the Registrar and the officer shall, when presiding over such meeting, have the same powers as the President or Chairperson when presiding over such meeting, but shall not have the right to vote: Provided that the voting shall be by secret ballot.
5. (5) The meeting called under this section shall not for any reason, be adjourned.
6. (6) If a motion of no-confidence is rejected, no fresh motion of no-confidence shall be brought within a period of six months from the date of rejection of such motion.

1. (1) The superintendence, direction and control of the preparation of the electoral rolls for, and the conduct of, all elections to a society shall vest in the authority to be called the “Co-operative Election Authority”, as may be constituted by the Administrator in that behalf.
2. (2) Every general election of the members of the Committee and election of the office-bearers of a society including any casual vacancy, to the extent applicable, shall be held in accordance with the procedure prescribed.
3. (3) The Co-operative Election Authority shall consist of a Co-operative Election Officer, appointed by the Administrator from officers of the Union territory who fulfills such qualifications and experience as may be prescribed.
4. (4) The Administrator may appoint any employee of the Union territory, not below the rank of Superintendent as Secretary to the Co-operative Election Authority.
5. (5) The Administrator may, after consultation with the Co-operative Election Officer, provide such number of officers and employees for his office, to assist him in performing his functions under this Regulation.
6. (6) The Administrator may, when requested by the Co-operative Election Officer, make available to the Co-operative Election Authority such staff as may be necessary for discharge of the functions conferred on the Co-operative Election Authority by sub-section (1).
7. (7) Notwithstanding anything contained in any law for the time being in force in the Union territory, the election of the Committee of each society shall be conducted by the Co-operative Election Authority one month before the expiry of the term of the existing Committee so as to ensure that the newly elected members of the Committee assume office immediately on the expiry of the office of the members of the outgoing Committee.
8. (8) The Co-operative Election Authority shall hold the elections of the society or class of societies as per the procedure, guidelines and the manner, including using the latest technology and expertise, as may be prescribed: Provided that the Administrator may, considering the objects of the society, class of societies, area of operation and norms of business and for proper management and interest of members, may by general or special order in writing, classify the societies in such manner as may be prescribed.
9. (9) The Co-operative Election Authority shall conduct elections to the Committee and also to office of President or Chairperson, Vice-President or Vice-Chairperson and such other office bearers as are required to be elected as per the bye-laws of the society, within fifteen days from the date of constitution of the Committee after a general election.
10. (10) There shall be an Election Fund maintained by the Co-operative Election Authority and every society shall deposit in advance, the estimated amount of expenditure on its election, as may be prescribed and required by the Co-operative Election Authority towards the Election Fund.
11. (11) The Co-operative Election Authority shall incur the necessary expenses, for the conduct of the elections of the societies, including the election of the office bearers, from the said Fund contributed by the concerned society.
12. (12) The expenses of holding of any election, including the payment of travelling allowances, daily allowances and remuneration, if any, to the persons appointed to exercise the powers and perform the duties in respect of the election, shall be incurred from the said Fund and the expenditure shall be made in the manner prescribed and the Registrar shall, on requisition by the Co-operative Election Authority, recover expenses of holding election from any such society or class of societies in such manner as may be prescribed: Provided that if any society fails to pay the election expenses, the Registrar may issue the recovery certificate for recovery of the amount due and such amount shall be recovered as arrears of land revenue.
13. (13) The Committee of every co-operative society shall,—
    • (a) inform the Registrar of co-operative societies about the expiry of its term of office at least six months before the date of expiry of such term;
    • (b) inform any casual vacancy occurred in the Committee or its office bearers within fifteen days of the occurrence of such vacancy;
    • (c) furnish such books, records and information as the Co-operative Election Authority may require as per the calendar specified by it; and
    • (d) provide all necessary help, assistance and co-operation for the smooth preparation of electoral rolls for the conduct of elections.

Where due to scarcity, drought, flood, fire or any other natural calamity or rainy season or any election programme of the Council of the States or House of the People or a local authority, coinciding with the election programme of any society or class of societies, in the opinion of the Administrator, it is not in the public interest to hold elections to any society or class of societies, the Administrator may, notwithstanding anything contained in this Regulation or the rules or bye-laws made thereunder, or any other law for the time being in force in the Union territory, for reasons to be recorded in writing, by general or special order, postpone the election of any society or class of societies, for a period not exceeding six months at a time, which period may further be extended so, however, that, the total period shall not exceed one year in the aggregate.

If a person is elected to more than one seat on the Committee then, unless, within a period of seven days from the date of declaration of the result of the election he resigns all but one of the seats by writing under his hand addressed to the Election Officer, or as the case may be, the officer authorised by the Co-operative Election Authority in this regard, all the seats shall become vacant and on receipt of such resignation or on the seats becoming so vacant the Election Officer, or as the case may be, the officer authorised by the Co-operative Election Authority in this regard shall cause to hold the election for filling the vacancy.

1. (1) It shall be the duty of the Committee to inform the Co-operative Election Authority, for holding of election, before expiry of its term.
2. (2) Where there is a wilful failure on the part of the Committee to inform the Co-operative Election Authority as required under sub-section (1) for holding of election, and for any reason whatsoever and election of the members of the Committee could not be held before the expiry of its term, then the members thereof shall cease to hold their office and in such a situation, the Registrar shall take action as contemplated under section 72.
3. (3) On taking action under sub-section (2), the custodian so appointed shall inform the Co-operative Election Authority for holding of the election with immediate effect and assist to make necessary arrangement for holding such election within the period specified.

1. (1) On the election of a new Committee, the retiring Chairperson in whose place the new Chairperson is elected shall hand over charge of the office of the Committee and all papers and property, if any, of the society in possession of the Committee or any officer thereof, to the new Chairperson of the Committee.
2. (2) If the retiring Chairperson fails or refuses to hand over charge or to hand over the papers and property of the society as aforesaid, the Registrar, or any person empowered by him in this behalf, may by order in writing direct him to forthwith hand over such charge and property and the Registrar may, on the retiring Chairperson’s failure to comply with such direction, make order for seizing the records and property and handing them over to the new Chairperson, in the manner provided in section 89.

Notwithstanding anything contained in the bye-laws of a society—

1. (i) no society shall prescribe nor a member of a Committee thereof shall be entitled to sitting fees, and travelling and daily allowances while touring on public business, at rates exceeding such rates as may be prescribed; and
2. (ii) a member of a Committee of a society shall, in relation to touring on public business be subject to such conditions and limitations as may be prescribed and different rates, conditions and limitations may be prescribed in relation to members of Committees of different societies or class of societies. Explanation.—For the purposes of this section, the expression “touring on public business” includes—

1. (a) a journey for attending any meeting of the Committee;
2. (b) a journey in connection with the performance of any other functions of the Committee;
3. (c) a journey for attending any conference sponsored by—
   • (i) the Central Government;
   • (ii) the State Government;
   • (iii) the Administration;
   • (iv) any co-operative institution; or
   • (v) such other institutions recognised by the Administration in this behalf.

1. (1) If, in the opinion of the Registrar, any officer makes persistent default or is negligent in performance of the duties imposed on him by this Regulation or the rules or the bye-laws made thereunder or does anything which is prejudicial to the interests of the society or where he stands disqualified by or under this Regulation, the Registrar may, after giving the officer an opportunity of being heard, by order remove such officer and direct the society to elect or appoint a person or a qualified member in the vacancy caused by such removal and the officer so elected or appointed shall hold office so long only as the officer in whose place he is elected or appointed would have held if the vacancy had not occurred.
2. (2) The Registrar may, by order, direct that the officer so removed shall be disqualified to hold or to contest election for any office in the society from which he is removed and in any other society for a period not exceeding six years from the date of the order and such officer shall stand disqualified accordingly.

1. (1) Every society shall convene the general meeting of its members within a period of six months of closure of the financial year to transact the business as provided under this Regulation: Provided that if such meeting is not called by the society within such period, the Registrar or any person authorised by him in that behalf may in the prescribed manner, call such meeting which shall be deemed to be a general meeting duly called by the society.
2. (2) At every annual general meeting of a society, the Committee shall lay before the society a balance sheet and profit and loss account for the year in such manner as may be prescribed. Explanation.—For the purposes of this section, it is hereby clarified that, in the case of a society not carrying on business for profit, an income and expenditure account shall be placed before the society at the annual general meeting instead of profit and loss account; and all references to profit and loss account, and to “profit” or loss in this Regulation, shall be construed in relation to such society as references respectively to the “excess of income over expenditure” and “excess of expenditure over income”.
3. (3) There shall be attached to every balance sheet laid before the society in general meeting, a report by its Committee, with respect to—
   • (a) the state of the society’s affairs;
   • (b) the amounts, if any, which it proposes to carry to any reserve either in such balance sheet, or any specific balance sheet; and
   • (c) the amounts, if any, which it recommends for payment by way of dividend, bonus, or honoraria to honorary workers.
4. (4) The Committee’s report shall also deal in any changes in the nature of the society’s business which have occurred during the year for which the accounts are drawn up and such report shall be signed by its Chairperson, or any other member authorised to sign on behalf of the Committee.
5. (5) At every annual general meeting, the balance sheet, the profit and loss account, the auditor’s report and the Committee’s report, shall be placed for adoption, and such other business shall be transacted as may be laid down in the bye-laws and of which due notice has been given.
6. (6) Where any officer of the society, whose duty was to call a general meeting within the period specified in sub-section (1) or to comply with sub-sections (2), (3) or (4) fails without reasonable cause to call such meeting or to comply with such sub-sections, then—
   • (i) if such officer is a servant of the society, the Registrar may by an order in writing impose on him such penalty as is referred to in section 127; and
   • (ii) if such officer is not a servant of the society, the Registrar may by an order in writing impose such liability as is referred to in section 127.

1. (1) A special general meeting may be called at any time by the Committee, within one month—
   • (i) on a requisition in writing of one-fifth of the members of the society or of members the number of which is specified in the bye-laws for the purpose, whichever is lower;
   • (ii) on a requisition from the Registrar; or
   • (iii) in the case of a society, which is a member of a federal society, on a requisition from the Committee of such federal society.
2. (2) Where any officer or a member of the Committee, whose duty was to call such meeting, without reasonable excuse, fails to call such meeting, the Registrar may by order declare such officer or member disqualified for being a member of the Committee for such period not exceeding six years, as he may specify in such order and if the officer is an employee of the society, he may impose on him a penalty not exceeding ten thousand rupees: Provided that before making an order under this sub-section, the Registrar shall give, or cause to be given, an opportunity to the person concerned of showing cause against the action proposed to be taken against him.
3. (3) If a special general meeting of a society is not called in accordance with the requisition referred to in sub-section (1), the Registrar or any person authorised by him in that behalf, shall have power to call such meeting, which shall be deemed to be a meeting duly called by the Committee.
4. (4) The Registrar shall have power to order that the expenditure incurred in calling a meeting under sub-section (3) shall be paid out of the funds of the society or by such person or persons who, in the opinion of the Registrar, were responsible for refusal or failure to convene the meeting.

1. (1) No act or proceeding of a society or a Committee or any officer, done in good faith in pursuance of the business of the society shall be deemed to be invalid by reason of some defect subsequently discovered in the organisation of the society or in the constitution of the Committee or in the appointment or election of an officer or on the ground that such officer was disqualified from his office.
2. (2) No act done in good faith by any person appointed under this Regulation, the rules or bye-laws made thereunder shall be invalid merely by reason of the fact that his appointment has been cancelled by or in consequence of any order subsequently passed thereunder.
3. (3) The Registrar shall decide whether any act was done in good faith in pursuance of the business of the society and his decision thereon shall be final.

1. (1) Where the Administration has subscribed to the share capital of a society, directly or through another society, or has guaranteed the repayment of the principal and payment of interest on, debentures issued or loans raised by a society, the Administration shall, notwithstanding anything contained in the bye-laws of such society, have the right to nominate three representatives on the Committee of such society, in such manner as may be determined by the Administration from time to time.
2. (2) The members so nominated shall hold office during the pleasure of the Administration, or for such period as may be specified in the order by which they are appointed, and any such member on assuming office shall have all rights, duties, responsibilities and liabilities, as if, he were a member of the Committee duly elected.
3. (3) Where the Administration is of the opinion that having regard to the public interest involved in the operation of a society it is necessary or expedient so to do, it may nominate its representatives on the Committee of such society, as if, the Administration had subscribed to the share capital of the society and the provisions of sub-sections (1) and (2) shall, so far as may be apply to such nomination. Explanation.—For the purposes of this section, it is hereby clarified that any nomination of the Registrar or his nominee on the Committee of a society under the bye-laws of such society shall not be construed as nomination of the representative on that Committee in exercise of the right of the Administration under this section.

1. (1) Where on the expiry of the term of office of the members of any Committee of Management nominated by the Administrator, or the Registrar, the Administrator or, as the case may be, the Registrar is of the opinion that it is necessary or expedient so to do, it or he may, by an order published in the Official Gazette,—
   • (a) extend the term of office of the members of the said Committee of the Management; or
   • (b) appoint a person or a Committee of persons to be the custodian of the society for such period not exceeding two years in the aggregate or until a new Committee of Management is elected, whichever is earlier.
2. (2) The custodian so appointed shall, subject to the control of the Registrar and to such instructions as he may, from time to time, give, have powers to exercise all or any of the functions of the Committee, and take all such actions as may be required in the interests of the society.

1. (1) If, in respect of a Committee of a society having the Registrar as its member, the Administrator and in respect of a Committee of a society which does not have the Registrar as its member, the Registrar, is of the opinion that—
   • (i) the Committee persistently makes default;
   • (ii) the Committee is negligent in the performance of its duties imposed on it by or under this Regulation or the rules made thereunder or the bye-laws; or
   • (iii) the Committee has committed any act prejudicial to the interest of the society or its members, the Administrator or, as the case may be, the Registrar, after giving the Committee an opportunity of being heard, within fifteen days from the date of issue of notice, by an order in writing, supersede the Committee and appoint—
   • (a) a Committee, consisting of one or more members of the society, not being the members of the Committee superseded under this sub-section; or
   • (b) a special officer from amongst the officers of the Administration, to manage the affairs of the society for a period not exceeding one year as may be specified in the order, which period may, at the discretion of the Administrator or the Registrar, as the case may be, be extended from time to time, so, however, the term of the Committee or the special officer shall be, two years in aggregate.
2. (2) Before passing an order under sub-section (1), the Administrator or the Registrar, as the case may be, shall consult the co-operative financing institution, if such society is indebted to it.
3. (3) The Committee or special officer so appointed shall, subject to such instructions and control of the Administrator or the Registrar, as the case may be, have power to exercise all or any of the functions of the Committee or of any officer of the society, and take all such action as may be required in the interests of the society.
4. (4) The Committee or special officer appointed under sub-section (1) shall arrange to hold the election of the Committee of the society at such time as directed by the Administrator or the Registrar, as the case may be, but not later than the period as specified in sub-section (1).
5. (5) All acts done or purported to be done by the Committee or special officer during the period during which the affairs of the society are carried on by the Committee or special officer appointed under sub-section (1), shall be binding on the new Committee.
6. (6) The remuneration of members of the Committee or special officer appointed under sub-section (1) shall be such as may be prescribed and the same shall be paid from the fund of the society.
7. (7) The members of the Committee which has been superseded under sub-section (1), shall not be eligible to become a member of the Committee of any society for a period of six years from the date of supersession of such Committee.

1. (1) It shall be the duty of every society to keep the prescribed books of accounts with respect to all sums of money received and expended by the society, and the matters in respect of which the receipt and expenditure take place, all sales and purchases of goods by the society, and the assets and liabilities of the society, and to furnish such statements and returns and such records to the Registrar as the Registrar may by order direct from time to time and the officer or officers of the society shall be bound to comply with the order within the period specified therein.
2. (2) Where any society is required to take any action under this Regulation, the rules or the bye-laws made thereunder, or in compliance with an order made under sub-section (1) and such action is not taken—
   • (a) within the time provided in this Regulation, the rules or the bye-laws, or the order, as the case may be; or
   • (b) where no time is so provided, within such time, having regard to the nature and extent of the action to be taken, as the Registrar may specify by notice in writing, the Registrar may himself, or through a person authorised by him, take such action, at the expense of the society and such expense shall be recoverable from the society, as if it were an arrear of land revenue.
3. (3) Where the Registrar takes action under sub-section (2), he may call upon any officer of the society whom he considers to be responsible for not complying with the provisions of this Regulation, the rules or the bye-laws made thereunder, or the order made under sub-section (1), and, after giving him an opportunity of being heard, may require him to pay to the society the expenses paid or payable by it to the Administration as a result of his failure to take action, and to pay to from the assets of the society, such sum not exceeding one hundred rupees for each day until the directions of the Registrar are carried out.

1. (1) If the Administrator, on receipt of a report from the Registrar or otherwise, is satisfied that in the public interest or for the purposes of securing proper implementation of co-operative production and other development programmes approved or undertaken by the Administration or to secure the proper management of the business of the society generally, or for preventing the affairs of the society being conducted in a manner detrimental to the interests of the members or of the depositors or the creditors thereof, it is necessary to issue directions to any class of societies generally or to any society or societies in particular, the Administration may issue directions to them from time to time, and all societies or the society concerned, as the case may be, shall be bound to comply with such directions.
2. (2) The Administrator may modify or cancel any directions issued under sub-section (1), and in modifying or cancelling such directions, it may impose such conditions as it may deem fit.
3. (3) Where the Administrator is satisfied that any person was responsible for complying with directions or modified directions issued to a society under sub-sections (1) and (2) and he has failed, without any good reason or justification, to comply with the directions, the Administrator may by order,—
   • (a) if the person is a member of the Committee of the society, declare him to be disqualified to continue as such member for a period of six years from the date of the order;
   • (b) if the person is an employee of the society, direct the Committee to remove such person from employment of the society forthwith, and if any member or members of the Committee, without any good reason or justification, fail to comply with this order, declare them disqualified as provided in clause (a) Provided that, before making any order under this sub-section, the Registrar shall give a reasonable opportunity of being heard to the person or persons concerned and consult the federal society to which the society is affiliated: Provided further that, such federal society shall communicate its opinion to the Administrator within a period of forty-five days from the date of receipt of communication, failing which it shall be presumed that such federal society has no objection to take action under this section and the Administrator shall be at liberty to proceed further and take action accordingly.
4. (4) Any order made by the Administrator under this section shall be final. Explanation.––For the removal of doubts, it is hereby clarified that the above provisions shall only be applicable where there is a Central Government’s or Administration’s shareholding or loan or financial assistance or any guarantee by the Central Government or Administration, to the society.

1. (1) Where the Registrar is satisfied that the books and records of a society are likely to be suppressed, tampered with or destroyed or the funds and property of a society are likely to be mis-appropriated or mis-applied or the officer or the person in possession unreasonably refuses to give possession of the books, records, funds and property, he may issue an order in writing directing the person duly authorised by him to seize and take possession of such books, records, funds and property of the society, and the officer of the society responsible for the custody of such books, records, funds and property or person in possession of the same shall give delivery thereof forthwith to the person so authorised.
2. (2) If the officer of the society or person in possession does not give the delivery, then, without prejudice to any other action that may be taken against such officer, person or society under the provisions of this Regulation, the Registrar or the person authorised by him may apply to the Executive Magistrate within whose jurisdiction the society is functioning for seizing and taking the possession of such books, records, funds and property of the society.
3. (3) On receipt of an application under sub-section (2), the Magistrate may authorise any police officer not below the rank of a Sub-Inspector to enter and search any place where the books, records, funds and property are kept or likely to be kept and to seize them and hand over possession thereof to the Registrar or the person authorised by him, as the case may be.