Chapter IV MANAGEMENT OF CO-OPERATIVE SOCIETIES

The final authority in a co-operative society shall vest in the general body of members in a general meeting: Provided that where the bye-laws of a co-operative society provide for the constitution of a smaller body consisting of delegates of members of the society elected or selected in accordance with such bye-laws, the smaller body shall exercise such powers of the general body as may be prescribed or as may be specified in the bye-laws of the society but shall not have the power to conduct election of managing committee and to amend the bye-laws: Provided further that nothing in this section shall affect any powers conferred on a committee or any officer of a co-operative society by the rules or the bye-laws.

(1) A general meeting of every society shall be held once at least in every co-operative year for the purpose of- (a) approval of the programme of activities of the society prepared by the committee for the ensuing year; (b) election, if any, in the prescribed manner of the members of the committee other than the nominated members; (c) consideration of the audit report and the annual report; (d) disposal of the net profits; and (e) consideration of any other matter which may be brought forward in accordance with the bye-laws. (2) Such meeting shall be held not more than 15 months after the date of the last preceding meeting held under sub-section (1): Provided that the Registrar may, by general or special order, extend the period for holding such meeting for a further period not exceeding three months: Provided further that if, in the opinion of the Registrar, no such extension is necessary, or if such meeting is not called by the society within the extended period (if any) granted by him, the Registrar or any person authorised by him may call such meeting in the manner prescribed and that meeting shall be deemed to be general meeting duly called by the society; and the Registrar may order that the expenditure incurred in calling such a meeting 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 the refusal or failure to convene the general meeting.

(1) A special general meeting may be called at any time by the President or by a majority of the members of a committee, and shall be called within one month- (a) on a requisition in writing of one-fifth of the members of a society or of members, the number of which is specified in the bye-laws for the purpose, whichever is lower, or (b) at the instance of the Registrar, or (c) in the case of a society, which is a member of a federal society, at the instance of the committee of such federal society. (2) 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 this behalf, shall call such meeting, and that meeting shall be deemed to be a meeting duly called by the committee. (3) The Registrar shall have power to order that the expenditure incurred in calling a meeting under sub-section (2) 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 the refusal or failure to convene the meeting.

(1) The management of every society shall vest in a managing committee constituted in accordance with this Act, rules and bye-laws, which shall exercise such powers and perform such duties as may be conferred or imposed respectively, by this Act, rules and bye-laws. (2) The managing committee of a co-operative society shall be constituted by,- (a) election from amongst the members of the society at the annual or special general meeting; (b) nominees of other co-operative societies or institutions, if any, provided in the bye-laws; (c) Government nominees, if any, nominated under section 35; and (d) appointment made by the Registrar under section 34-A. (2-A). The managing committee shall, as soon as may be, elect from amongst its elected or nominated members a Chairman, Vice-Chairman; or a President, Vice-President, as the case may be, of the managing committee. (2-AA). Notwithstanding anything contained in sub-section (2-A), where the State Government has- (i) subscribed to the share capital of a co-operative society, or (ii) assisted indirectly in the formation or augmentation of the share capital of a co-operative society as provided under section 48, or (iii) guaranteed the repayment of principal amount and payment of interest on loans and advances to a society, to the extent of Rs. 50,00,000 or more, the State Government may appoint, one of the members nominated under section 35, as Chairman of the managing committee of such society: Provided that no member of a managing committee shall be eligible to be elected or appointed as Chairman or Vice-Chairman or President or Vice-President of the managing committee of such society, if such member is a Minister in the State Government. (3) The managing committee of a co-operative society shall consist of not less than five but not more than twenty-one members including Government nominees. (4) The term of office of the elected members of the managing committee and its office bearers shall be five years from the date of election and the term of office bearers shall be co-terminous with the term of the managing committee: Provided that the managing committee may fill a casual vacancy by nomination out of the same class of members in respect of which the casual vacancy has arisen, if the term of office of the managing committee is less than half of its original term.

(1) (a) Where the State Government- (i) has subscribed to the share capital of a co-operative society; or (ii) has assisted indirectly in the formation or augmentation of the share capital of a co-operative society as provided under section 48; or (iii) has guaranteed the repayment of a principal and payment of interest on loans and advances to a society; the State Government or any authority specified by the State Government in this behalf shall have the right to nominate, having such qualifications and experience and in the manner as may be prescribed, not more than three members or one-third of the total number of the members of the committee of the society whichever is less. (b) Where the employer has contributed to the share capital of a co-operative society of his employees to the extent of Rs. 5,000 or more, the employer shall have right to nominate two members or one-third of the total members whichever is less, on the committee of such society. (c) Where any financing institution notified in this behalf by the Government has provided finance to a co-operative society, such financing institutions shall have the right to nominate one member on the committee. (2) A member nominated on the committee of a co-operative society under sub-section (1) shall hold office during the pleasure of the State Government or the specified authority or the employer or the financing institution, as the case may be. (3) Where in a co-operative society in which shares have been subscribed or liability by way of guarantee for borrowing has been undertaken by the Government, exceeding fifty per centum of the working capital of the society, a difference of opinion in respect of any matter arises between any member of the committee nominated under sub-section (1) (a) and other members thereof, the matter shall be referred by the committee to the Government whose decision thereon shall be final and will operate as if same were a decision taken by the committee.

The State Government may, on the application of a society and on such conditions as may be prescribed, depute a Government servant to the service of the society for the purpose of managing its affairs and the Government servant so deputed shall exercise such powers and perform such duties as may be prescribed.

(1) If, in the opinion of the Registrar, a committee of any co-operative society or any member thereof persistently makes default or is negligent in the performance of the duties imposed on it or him by this Act or the rules or the bye-laws or commits any act which is prejudicial to the interests of the society or its members, the Registrar, may, after giving such committee or members, as the case may be, an opportunity to state its or his objections, if any, by order in writing- (a) remove the committee, and- (i) order fresh election to the committee; or (ii) appoint one or more administrators who need not be members of the society, to manage the affairs of the society for a period not exceeding one year specified in the order which period may at the discretion of the Registrar, be extended from time to time, so however, that the aggregate, period does not exceed five years; or (b) remove the member and get the vacancy filled up for the remaining period of the outgoing member, according to the provisions of this Act, the rules and the bye-laws. (1-A) Where the Registrar, while proceeding to take action under sub-section (1) is of the opinion that suspension of the committee or any member during the period of proceedings is necessary in the interest of the co-operative society, he may suspend such committee or member, as the case may be, and where the committee is suspended, make such arrangements as he thinks proper for the management of the affairs of the society till the proceedings are completed: Provided that if the committee or member so suspended is not removed, it or he shall be re-instated and the period of suspension shall count towards its or his term. (2) The Registrar may fix such remuneration for the administrator as he may think fit. Such remuneration shall be paid out of the funds of the society. (3) The administrator shall, subject to the control of the Registrar and to such instructions as he may from time to time give, have powers to perform all or any of the functions of the committee or of any officer of the society and take all such actions as may be required in the interest of the society. (4) The administrator shall, at the expiry of his term of office arrange for the constitution of a new committee in accordance with the bye-laws of the society. (5) Before taking any action under sub-section (1) in respect of a co-operative society, the Registrar shall consult the financing institutions to which it is indebted. (6) A member who is removed under sub-section (1) may be disqualified for being elected to any committee for such period not exceeding three years as the Registrar may fix and the said period shall commence after the expiry of the term of the committee from which he is removed.

(1) (a) When the Registrar is satisfied that the books and records of a society are likely to be suppressed, tempered with or destroyed or the funds and the property of a society are likely to be mis-appropriated; or (b) If the committee of a co-operative society is re-constituted at a general meeting of the society, or committee of a society is removed under section 37 or if the society is ordered to be wound up under section 78 and the outgoing members of the committee refuse to hand over the charge of the records and property of the society to the new committee or the administrator or the liquidator as the case may be, the Registrar or the person authorised by him may apply to the magistrate, within whose jurisdiction the society is functioning for seizing and taking possession of the records and property of the society. (2) On receipt of an application under sub-section (1), the magistrate may authorise any police officer not below the rank of sub-inspector to enter and search any place where the records and the property are kept or are believed to be kept and to seize them and hand over the possession thereof to the Registrar, or the new committee or the administrator of the society or the liquidator as the case may be.