Chapter I PRELIMINARY

Short title and commencement. (1) This Act may be called the Karnataka Souharda Sahakari Act, 1997. (2) It shall come into force on such date as the State Government may, by notification in the Official Gazette, appoint and different dates may be appointed for different provisions of this Act.

Definitions. In this Act unless the context otherwise requires,- (a) 'Apex cooperative‟ means a co-operative whose membership is open to co-operatives only and whose area of operation extends to the whole of the State. (a1) “Area of operation” means jurisdictional area as specified in the registered bye-laws of the co-operatives. (a2) "Backward Classes" means such classes of citizens as may be classified as category "A" and "B' and notified by the Government from time to time for the purpose of reservation in the board Co-operative (a3) „Board‟ means the board of directors or the governing body of a cooperative or a federal cooperative by whatever name called, to which the direction and control of the management of the affairs of the cooperative is entrusted to (b) “Bye-laws” means the bye-laws of Co-operatives registered or deemed to be registered under sections 5 and 11 including the bye-laws of the Federal Co-operative registered under section 53; (c) “Chief Executive” means any employee appointed by the board of a Co-operative or Federal Co-operative by whatever designation called who discharges the functions of a Chief Executive under the bye-laws of such Co-operative or Federal Co-operative; (d) “Chief Promoter” means a person elected at the meeting of the promoters and authorised by the Registrar to collect initial share capital before registration and who shall take all such necessary steps for the registration of a Co-operative or union Co-operative; (e) “Co-operative” means a Souharda Cooperative Society including a Cooperative bank doing the business of banking registered or deemed to be registered under section 5 and which has the words „Souharda Co-operative Society‟ in its name and for the purposes of the Banking Regulation Act, 1949 (Central Act 10 of 1949), the Reserve Bank of India Act, 1934 (Central Act 2 of 1934), the Deposit Insurance and Credit Guarantee Corporation Act, 1961 (Central Act 47 of 1961), the National Bank for Agriculture and Rural Development Act, 1981 (Central Act 67 of 1981), the Income Tax Act, 1961 (Central Act 43 of 1961), the Karnataka Tax on Professions, Trades, Callings and Employments Act, 1976 (Karnataka Act 35 of 1976), the Central Goods and Services Tax Act, 2017 (Central Act 12 of 2017), the Banning of Unregulated Deposits Schemes Act, 2019 (Central Act 21 of 2019), and for all purposes mentioned in all Central and State legislation it shall be deemed to be a Co-operative Society. (ee) "Co-operative Bank" means a Co-operative engaged in or having as its premary object, the business of banking; Explanation.- For the purpose of this clause "banking" shall have the meaning assigned to it in section 5 of the Banking Regulation Act, 1949 (Central Act 10 of 1949). (e1) „Cooperative Election Authority‟ means the cooperative election authority constituted under section 39AA of the Karnataka Co-operative Societies Act, 1959(Karnataka No. Act 11 of 1959) (f)“Co-operative Principles” means the Co-operative principles specified in Chapter X; (g) “Co-operative Society” means a Co-operative society registered under the Karnataka Co-operative Societies Act, 1959 (Karnataka Act 11 of 1959); (h) “Co-operative with limited liability” means a Co-operative in which liability of its members for the debts of the Co-operative in the event of its being wound up is limited to the share amount contributed by such members; (i) “Co-operative with unlimited liability” means a Co-operative whose members are in the event of its being wound up jointly and severally liable for and in respect of all its obligations and to contribute to any deficit in the assets of the Co-operative; (j) “Co-operative Year” means the year commencing from first day of April; (k) “Deficit” means the net excess of expenditure over income; (k1)„delegate‟ means a member of a cooperative to represent that cooperative in other cooperatives (kk) "Deposit Insurance Corporation" means the Deposit Insurance and Credit Guarantee Corporation established under section 3 of the Deposit Insurance and Credit Guarantee Corporation Act, 1961 (Central Act 47 of 1961) (l) “Director” means an elected or co-opted member of the board; (l1) „Director of cooperative audit‟ means the Director of cooperative audit as defined in clause (a-4) of section 2 of the Karnataka cooperative Societies Act, 1959 (Karnataka Act No. 11 of 1959) (m) “Federal Co-operative” means a Federal Co-operative constituted under section 53; (n) “Financing Agency” means a Co-operative or commercial bank and includes any other body or corporation or financial institution which gives financial assistance to a Co-operative; (o) “General Body” in relation to the Co-operative means the general body of all the members of the Co-operative under section 23 and section 53 includes a representative general body of the members; (p) “General Meeting” means a meeting of the general body of the members of the Co-operative or Federal Co-operative; (q) “Government” means the State Government; (qq) "Insured Bank" means a Co-operative Bank having the same meaning as assigned to it in clause (i) of section 2 of the Deposit Insurance and Credit Guarantee Corporation Act, 1961 (Central Act 47 of 1961); (r) “Member” means a person who has contributed towards the share capital of a Co-operative before its registration and includes a person admitted to membership after such registration in accordance with the Act, rules and the bye-laws and includes a nominal member; (rr) "National Bank"- means the National Bank for Agriculture and Rural Development constituted under section 3 of the National Bank for Agriculture and Rural Development Act, 1981 (Central Act 61 of 1981); (s) “Officer Bearer” means the President or Chairperson, Vice President or Vice Chairperson, elected Secretary, Treasurer or Special Officer Administrator, Liquidator and includes a member of the board or any other person not being an employee empowered to exercise the powers of an office bearer in accordance with the bye-laws; (t) “Primary Co-operative” means a Co-operative whose membership is not open to another Co-operative; (u) “Registrar” means an Officer of the Government appointed under section 3 to perform the functions of the Registrar of Co-operatives and includes Additional Registrars of Co-operatives, Joint Registrars of Co-operatives, Deputy Registrars of Co-operatives and Assistant Registrars of Co-operatives appointed to assist the Registrar while exercising all or any of the powers of the Registrar under this Act and includes any other person on whom all or any of the powers of the Registrar under this Act are conferred; (u1)„Representative‟ means a person elected by a group of individual members of a primary cooperative or a secondary cooperative to represent them and participate on their behalf in the representative general body meeting of the cooperative in accordance with this Act, or the rules and the bye-laws made there under. (u2)„Representative General Body‟ means all the representatives of a primary cooperative or a secondary cooperative. (u3) „Representative General Meeting‟ means a meeting of the representatives called and conducted in accordance with provisions of the Act, the rules and the bye-laws of the primary cooperative or the secondary cooperative. (v) "Reserve Bank" means the Reserve Bank of India constituted under the Reserve Bank of India Act, 1934 (Central Act 2 of 1934)". (x) “Surplus” means the net excess of income over expenditure; (w) 'Secondary Co-operative' means a Co-operative whose membership is also open to another Co-operative (w1)„State Level Cooperative‟ means a cooperative whose area of operation extends to the whole of the State. (y) “Union Co-operative” means a Co-operative of twenty or more Co-operatives registered under section 5. (z) “State Statutory Liquidity Reserve” means as specified in section 17B. In the Karnataka Souharda Sahakari Act, 1997 (Karnataka Act 17 of 2000) (hereinafter referred to as the Principal Act) in section 2,- (i) for sub-clause (a1), the following shall be substituted, namely:- “(a1) “Area of operation” means jurisdictional area as specified in the registered bye-laws of the co-operatives.” (ii) for sub-clause (e), the following shall be and shall always be deemed to have been substituted, namely:- “(e) “Co-operative” means a Souharda Cooperative Society including a Cooperative bank doing the business of banking registered or deemed to be registered under section 5 and which has the words „Souharda Co-operative Society‟ in its name and for the purposes of the Banking Regulation Act, 1949 (Central Act 10 of 1949), the Reserve Bank of India Act, 1934 (Central Act 2 of 1934), the Deposit Insurance and Credit Guarantee Corporation Act, 1961 (Central Act 47 of 1961), the National Bank for Agriculture and Rural Development Act, 1981 (Central Act 67 of 1981), the Income Tax Act, 1961 (Central Act 43 of 1961), the Karnataka Tax on Professions, Trades, Callings and Employments Act, 1976 (Karnataka Act 35 of 1976), the Central Goods and Services Tax Act, 2017 (Central Act 12 of 2017), the Banning of Unregulated Deposits Schemes Act, 2019 (Central Act 21 of 2019), and for all purposes mentioned in all Central and State legislation it shall be deemed to be a Co-operative Society.” In the Karnataka Souharda Sahakari Act, 1997 (Karnataka Act 17 of 2000) (hereinafter referred to as the Principal Act) in section 2, after clause (y),the following shall be inserted, namely:- “(z) “State Statutory Liquidity Reserve” means as specified in section 17B.”