Chapter III RIGHTS AND LIABILITIES OF MEMBERS

No person shall be admitted as member of a co-operative society except the following, namely :- (a) an individual competent to contract under section 11 of the Indian Contract Act, 1872 (9 of 1872); (b) any other co-operative society; (c) the Government; (d) such class or classes of persons or association of persons, corporate bodies, firms or joint stock companies, as provided in the bye-laws of the society : Provided that every person eligible for admission as a member of a co-operative credit and service society, the farmers service society or primary agricultural development bank shall be deemed to have been admitted as a member thereof on the expiry of 60 days from the date of receipt of the application for such admission in the office of the society : Provided further that the Registrar, of his own motion or on a complaint made by the committee of the society concerned or by any aggrieved person may, notwithstanding anything to the contrary contained in this Act, order for the removal of the person deemed to have been admitted to such membership, if, for reasons to be recorded by the Registrar, he is not eligible to be a member of such society and every such order in the case of complaint made by the committee of the society or of any aggrieved person shall be passed within thirty days of the receipt of the complaint.

No individual shall be admitted as member of a central or apex society unless such society has been exempted by the Registrar by a general or special order.

(1) A Co-operative society may admit any person or self-help group or a co-operative society or any other statutory body notified by the Government in this behalf as an associate member in accordance with its bye-laws. Explanation :- For the purposes of this sub-section “self help group” means and includes a group of persons for their economic development. (2) An associate member shall not be entitled to any share in any form whatsoever, in the assets or profits of the co-operative society. (3) Save as provided in this Act, an associate member shall have such privileges and rights of a member and be subject to such liabilities of a member as may be specified in the by laws of the society.

No member of a co-operative society shall exercise the rights of a member unless he has made such payments to the society in respect of membership or has acquired such interest in the society as may be specified in the bye-laws.

Every member of a co-operative society shall have one vote in affairs of the society : Provided that – (a) in the case of equality of votes, the chairman shall have a second or casting vote; (b) an associate member shall not have the right of vote; (c) where the Government is a member of the co-operative society each person nominated by the Government on the committee shall have one vote; (d) a member in default of any sum due from him to the society shall not be eligible to exercise his right of vote; Explanation:- For the purpose of this clause, the expression, ‘member’ does not include a society. (e) a society brought under the process of winding up or in liquidation shall not be eligible to exercise its right of vote.

Every member of a co-operative society shall exercise his vote in person and no member shall be permitted to vote by proxy: Provided that – (a) a co-operative society which is a member of another co-operative society may, subject to the rules, appoint one of its committee members through a resolution of its committee to vote on its behalf in the affairs of the other society; (b) In case of a primary society which is a member of another co-operative society may, subject to the rules, appoint one of its members to vote on its behalf in the affairs of the other society.

The transfer of the share or interest of a member, in the capital of a co-operative society shall be subject to such conditions as to the maximum holding as are specified in section 6 : Provided that no transfer shall be allowed unless such shares have been held by the member for a minimum period of one year.

(1) On the death of a member, a co-operative society may transfer the share or interest of deceased member to the person nominated in accordance with the rules made in this behalf and if there is no person so nominated, to such person as may appear to the committee to be the heir or legal representative of the deceased member or pay to such nominee, heir or legal representative, as the case may be, a sum representing the value of such member‘s share or interest as ascertained in accordance with the rules or bye-laws : Provided that – (i) in the case of a co-operative society with unlimited liability, such nominee, heir or legal representative, as the case may be, may require payment by the society of the value of the share or interest of the deceased member ascertained as aforesaid; (ii) in the case of a co-operative society with limited liability, the society shall transfer the share or interest of the deceased member to such nominee, heir or legal representative, as the case may be, being qualified in accordance with the rules and bye-laws for membership of the society, or on his application within one month of the death of the deceased member, to any person specified in the application who is so qualified; (iii) no such transfer or payment shall be made except with the consent of the nominee, heir or legal representative, as the case may be. (2) A co-operative society shall, subject to the provisions of section 52 and unless within six months of the death of the member prevented by an order of a competent court, pay to such nominee, heir or legal representative, as the case may be, all other moneys due to the deceased member from the society. (3) All transfers and payments made by a co-operative society in accordance with the provisions of this section shall be valid and effectual against any demand made upon the society by any other person.

(1) Subject to the provisions of sub section (2), the liability of the past member or of the estate of a deceased member of a co-operative society for the debts of the society as they existed,– (a) in the case of a past member, on the date on which he ceased to be a member; (c) in the case of a deceased member, on the date of his death, shall continue for a period of two years from such date. (2) Where a co-operative society is ordered to be wound up under section 105, the liability of a past member or of the estate of a deceased member who ceased to be member or died within two years immediately proceeding the date of the order of winding up, shall continue until the entire liquidation proceedings are completed, but such liability shall extend only to the debts of the society as they existed on the date of his ceasing to be a member or death as the case may be.