Chapter IX Offences

It shall be an offence under this act, if a Cooperative Society: (a) fails to give a notice, send a return or document or fails to do or allows to be done any act which a Cooperative Society is by this Act or under its bye-laws required to give, send, do or allow to be done; (b) willfully neglects or refuses to do an act or to furnish information required for the purposes of this Act or does an act forbidden by this Act, or the bye-laws; (c) makes a return, or willfully furnishes information in any respect false or insufficient; (d) indulges in fraudulent activities concerning the constitution, management and business of the Cooperative Society; (e) misuses the funds and property of the Cooperative Society; or (f) indulges in the conduct of elections to the Board in "corrupt practices" as defined under section 123 of the Representation of People Act, 1951. (2) It shall be an offence under this Act, if any person or Cooperative Society contravenes the provisions of this Act or the bye-laws of the Cooperative Society. (3) An offence by a Cooperative Society shall be deemed to have been also committed by each office-bearer of the Cooperative Society bound by the bye-laws thereof to fulfil the duties whereof the breach is an offence, or if there is no such office-bearer then by each of the directors, unless the office-bearer or director, as the case may be, proves to have attempted to prevent the commission of the offence. (4) An offence under this section shall be punishable with imprisonment for a term which may extend to one year or with fine which may extend to Rs. 2000 (Rupees two thousand), or with both: Provided that where a person is guilty of misappropriation, fraud, breach of trust, cheating or any other act involving moral turpitude, resulting in a loss to the Cooperative Society, he shall also be punishable under the relevant provisions of the Indian Penal Code, 1860. 14. In the said Act subsection (1) of section - 42 shall be substituted by the following, namely:- “ (1) It shall be an offence under this Act if- (a) A Co-operative Society or an officer or member thereof wilfully furnishes a false return or false information, or does not furnish wilfully any information required from him by a person authorized in this behalf under the provisions of this Act; (b) any person wilfully or without any reasonable excuse disobeys any summons, requisition or lawful written order issued under the provisions of this Act;

(1) A Cooperative Society may, by a special resolution, authorise its own dissolution: Provided that a notice of the general meeting shall also be sent with an invitation to attend, to the Registrar, to any federation of which the Cooperative Society is affiliated, to creditors and to any organisation with which a partnership contract has been entered into. (2) Invitees under the proviso of sub-section (1) shall have the right to make representation to the general body if they so wish to, giving reasons why dissolution is not called for. (3) Within fifteen days of such authorisation for dissolution, the Cooperative Society shall send to the Registrar a copy of the authorisation to dissolve the Cooperative Society. (4) The authorisation approved in pursuance of sub-section (1) shall be required to set out the following namely: (a) the asset and liabilities of the Cooperative Society; (b) the claims of creditors, and collaborators and protected share holders; (c) the number of members; (d) the nature and extent of the members interest in the Cooperative Society; and (e) the name of the liquidator, if appointed by the general body, or a request to the Registrar to appoint the liquidator or a request to the Registrar to issue a certificate of dissolution where there are no assets or liabilities. (5) Where the Registrar receives the special resolution passed in-pursuance of sub-section (1) he shall cause at the expense of the Cooperative Society a notice of the special resolution to be published once a week for two weeks in a newspaper published or distributed in the district where the registered office of the Cooperative Society is located. (6) The Registrar may require from the Cooperative Society, the liquidator appointed by the Cooperative Society or any other person who is required to furnish information, a periodical return showing: (a) the progress of dissolution; (b) the distribution of any undistributed surplus or reserve; and (c) any other relevant information that he may require.

(1) The Registrar or an interested person may, after giving the Cooperative Society ninety days notice of the proposed application, apply to the Tribunal for an order dissolving the cooperative Society, where he has (1) reasonable cause to believe that the Cooperative Society has no right to be or to continue to be recognised as a Cooperative Society, because it: (a) obtained its registration by fraud or mistake; (b) is serving illegal purposes; (c) has willfully; after notice by the Registrar; violate any of the provisions of this Act or its bye-laws; (d) is no longer operating in accordance with Cooperative Principles and the provision of this Act; (e) has not commenced business within two years of the date of registration; or (f) has not carried on business for the past two consecutive years. (2) Where an interested person applies in pursuance of this section, he shall give the Registrar notice of his application and the Registrar shall be entitled to appear and be heard in person or by counsel. (3) Where the Tribunal receives an application in pursuance of this section it may, after giving a reasonable opportunity to the Cooperative Society to state its case, order that the Cooperative Society be dissolved or liquidated and dissolved under the supervision of the Registrar. (4) Where the Registrar receives an order made in pursuance of sub-section (3) he shall, (a) where the order is to dissolve the Cooperative Society, issue a certificate of dissolution, or (b) where the order is to liquidate and dissolve the Cooperative Society under the supervision of the Registrar, publish a notice in a newspaper published or distributed in the district in which the registered office of the Cooperative Society is situated.

On his appointment, a liquidator shall (a) immediately give notice of his appointment (i) in the case of a liquidator not appointed by the Registrar, to the Registrar, and (ii) to each claimant and creditor known to the liquidator; (b) immediately publish notice of his appointment once a week for two consecutive weeks in a newspaper published or distributed in the place where the Cooperative Society has its registered office and take reasonable steps to give notice of the liquidation in every jurisdiction where the Cooperative Society carries on business; (c) place in the notice mentioned in clause (a) and (b) a provision requiring any person; (i) indebted to the Cooperative Society, to render an account and pay to the liquidator at the time and place specified any amount owing, (ii) possessing property of the Cooperative Society to deliver it to the liquidator at the time and place specified, and (iii) having a claim against the Cooperative Society, whether liquidated, unliquidated, future or contingent, to present particulars of the claim in writing to the liquidator not later than two months after the first publication of the notice; (d) take into custody and control the property of the Cooperative Society; (e) open and maintain a trust account for the moneys of the Cooperative Society; (f) keep accounts of the moneys of the Cooperative Society received and paid out by him; (g) maintain a separate list of members, creditors and other persons having claims against the Cooperative Society; (h) where at any time he determines that the Cooperative Society is unable to pay or adequately provide for the discharge of its obligations apply to the Registrar for directions; and (i) deliver to the Registrar, periodically as the Registrar may require, financial statements of the Cooperative Society in any form that the liquidator considers proper or that the Registrar may require.

(1) The liquidator may (a) retain lawyers, accountants, engineers, appraisers and other professional advisors; (b) bring, defend or take part in any civil, criminal or administrative action or proceeding in the name and on behalf of the Cooperative Society; (c) carry on the business of the Cooperative Society as required for an orderly liquidation; (d) sell by public auction any property of the Cooperative Society; (e) do all acts and execute any documents in the name and on behalf of the Cooperative Society; (f) borrow money on the security of the property of the Cooperative Society; (g) settle or compromise any claims by or against the Cooperative Society; and (h) take all other steps that he considers necessary for the liquidation of the Cooperative Society and distribution of its properties and funds. (2) Where a liquidator has reason to believe that any person has in his possession or under his control, has concealed, withheld or misappropriated any property of the Cooperative Society he may apply to the court for proceeding into the matter in accordance with law. (3) Where the proceeding under sub-section (2) discloses that a person has concealed, withheld or misappropriated property of the Cooperative Society, the Court may order that person to restore the property or pay compensation to the liquidator on behalf of the Cooperative Society. (4) No liquidator or his relatives shall purchase, directly or indirectly any part of the stock-in-trade, debts or assets of the Cooperative Society.

(1) A liquidator shall pay the costs of liquidation out of the property of the Cooperative Society and shall pay or make adequate provision for all claims against the Cooperative Society. (2) After paying or making adequate provision for all claims against the Cooperative Society, the liquidator shall apply to the Registrar for approval of his final accounts and for permission to distribute in money or in kind the remaining property of the Cooperative Society in accordance with the bye-laws. (3) Where the Registrar approves the final accounts rendered by a liquidator in pursuance of sub-section (2), he shall (a) issue directions with respect to the custody or disposal of the documents and records of the Cooperative Society; and (b) discharge the liquidator, (4) Where the Registrar discharges a liquidator pursuant to sub-section (3), he shall issue a certificate of dissolution. (5) The Cooperative Society ceases to exist on the date shown in the certificate of dissolution, which shall not be later than twenty-four months after appointment of the liquidator.

The Registrar may charge a reasonable fee for any of the services provided by him or by an officer authorised by him under the provisions of this Act.

(1) Save as otherwise expressly provided in this Act, no Civil or Revenue Court shall have any jurisdiction in respect of any dispute required by section 40 to be referred to the Cooperative Tribunal, or recovery proceedings under section 41 or dissolution under sections 43 and 44. (2) While a Cooperative Society is in liquidation under section 45, no suit or other legal proceedings shall be proceeded with or instituted against the liquidator as much or against the Cooperative Society or any member thereof on any matter touching the affairs of the Cooperative Society, except by leave of the Registrar and subject to such terms as he may impose.

(1) The State Government may by notification make rules, to carry out all or any of the provisions of this Act. (2) The power to make rule conferred by this section is subject to the condition to the rules being made after previous publication. (3) All rules made under this section shall be published in the Official Gazette and on such publication shall have effect as if enacted under this Act.

(1) if any practical difficulty arises in giving effect to the provisions of this Act, the State Government, as occasion may require, by notification published in the Official Gazette, do any thing not inconsistent with the provisions of this Act for purpose of removing the difficulty. (2) should any doubt arise as to the construction and interpretation of any provision of this Act, the same may be referred to the Registrar or the State Government for decision.