Disqualification for membership of the board

(1) No person shall be eligible for being elected or appointed or continued as a member of the board of any co-operative society, if,— (a) he is in default to that society or any other co-operative society in respect of any dues from him as borrower; (b) he is interested directly or indirectly in any contract made with such co-operative society or in the sale or purchase made by such co-operative society privately or in auction or in any contract or transaction of the co-operative society (other than investment and borrowing) involving financial interests in that contract, sale, purchase or transaction; (c) he carries on a business of the kind carried on by such co-operative society or by a co-operative society of which such co-operative society is a member; (d) he is employed as legal practitioner on behalf of such co-operative society or accepts employment as legal practitioner against such co-operative society; (e) he is a paid employee other than the chief executive of such co-operative society or of its financing bank; (f) he is a near relation of a paid employee of such co-operative society. Explanation.—For the purpose of this clause ‘near relation’ means,— (i) husband, wife and unmarried daughter; (ii) father, mother, undivided son, undivided brother and unmarried sister; and (iii) such other relations as may be prescribed to be a near relation. (g) he was a paid employee of a co-operative society and was dismissed, removed or compulsorily retired from service of a co-operative society; (h) he is disqualified to be a member of the society or to vote as such member; (i) he has been convicted for an offence punishable under section 153A or section 171E or section 171F or sub-section (2) or sub-section (3) of section 505 of the Penal Code, 1860 (Central Act 45 of 1860) or under section 39J or clause (b) of sub-section (2) of section 39K of this Act, unless a period of six years has elapsed from the date of such conviction; (j) he has been convicted by a Court in India for any offence and sentenced to imprisonment for a term of not less than two years, unless a period of five years has elapsed from the date of his release; (k) he is found guilty of corrupt practice within the meaning of section 39C unless a period of six years has elapsed from the date on which he was found guilty; (l) he has failed to remit to any co-operative society any amount (other than a loan) retained by him in contravention of the provisions of this Act, rules or bye-laws; (m) he is a representative of a co-operative society which is in default to a financing bank or to any co-operative society in respect of any dues by the co-operative society which he represents, for a continuous period of one year: Provided that the disqualification under this clause for being continued as a member of the board shall apply to a co-operative society which has defaulted in payment of an amount exceeding thirty percent of such dues; (n) he was a member of the board which failed to make arrangement for election within the time limit specified in section 39A. (o) [Omitted] (p) he has absented himself for three consecutive meetings of the board of such society , without leave of absence. (2) No person including a person elected by a co-operative society as a member of a board of another co-operative society of which such co-operative society is a member shall be a President or Chairperson, Vice-President or Vice-Chairperson or other office bearer of more than two co-operative societies. (3) If the board of a cooperative society fails,- (a) to assist the cooperative Election Commission for conducting elections as per section 39A and section 29F; or (b) to call the annual general meeting under section 27 or special general meeting when required under section 28; or (c) to present the audited accounts and annual report in the annual general meeting, every member of such defaulting board shall be disqualified for being elected or appointed or continued as a member of the board of the society for a period of five years from the date of the order of disqualification (4) Nothing in sub-section (2) shall apply,— (i) to any person who is appointed by the State Government or the Registrar as the President or Chairperson, Vice-President or the Vice-Chairperson; or (ii) to any person who is merely a member of the board. (5) In the case of co-operative marketing societies, consumers co-operative societies and such class or classes of co-operative societies as may be specified by the State Government, by notification in the official Gazette, no member shall be eligible for being appointed or elected as a member of the board of such co-operative society if he does not fulfill the minimum qualifications relating to his transactions with the co-operative society upto such monetary limits as may be specified from time to time in such notification. (6). There shall be no representative of individual members on the boards of a District Central Co-operative Bank or an Apex Co-operative Bank or such other classes of co-operative banks as may be prescribed. (7) Any question as to whether a member of the board was or has become subject to any of the disqualifications mentioned in this section shall be decided by the Registrar after giving the person concerned a reasonable opportunity of being heard. (8) If any member of a board of a co-operative society during the term of his office,— (a) becomes subject to any disqualifications specified in sub-sections (1), (2) and (5); or (b) has acted or has been acting fraudulently or with gross negligence or in contravention of the provisions of this Act, the rules or the bye-laws of the co-operative society or without the sanction of the board of the co-operative society where such sanction is necessary or contrary to the resolution of the co-operative society or its board or in any way prejudicial to the interest of the co-operative society; or (c) has acted or has been acting persistently against the directions or orders issued under this Act, rules or bye-laws; or (d) is not discharging his duties satisfactorily; the Registrar may either on a report made to him or otherwise, by order remove such member, and in cases falling under clauses (a), (b), (c) and (d) of this sub-section disqualify him from holding any office in the co-operative society for such period not exceeding five years, as may be specified in such order: Provided that no order shall be made under this sub-section unless a reasonable opportunity of being heard, is given to the person against whom the order is to be made. (9) A copy of the order made under sub-section (8) shall be communicated to the member and the co-operative society concerned. (10) No director of a cooperative society shall be eligible for being elected or appointed or continued as a delegate of another society, if he suffers from any disqualification mentioned in sub-section (1). The provisions of sub-section (8) shall, mutatis-mutandis, apply. (11) No member of a cooperative society shall be eligible for being elected or appointed or continued as a representative, if he suffers from any disqualification mentioned in sub-section (1) other than clauses (m) and (n) thereof. The provisions of sub-section (8) shall, mutatis-mutandis, apply.