Chapter VII MANAGEMENT OF SOCIETIES

Subject to the provisions in this Act and the Rules, the final authority of every secie‘ty shall vest in the- general body of members in a general meeting, summoned in such a manner as may be specified in the rules and the bye-I—aws.

The management ofevery society shall: vest in. a Board consti‘ tuted in accordance With this Act, the rules and bye«laws, Which shall exercise suehipowers and perform such; duties as may be. _eonferred-- or imposed byfthis Act. the rules: and-thebyex-laws.

(1) The qualifications for the appointment of a Manager, Secretary, Accountant or any other officer of a society shall be such as may from time to time, be prescribed. (2) The State Govt may nominate a Government servant not below the rank of class-II officer to work as Managing Director/General Manager/Manager as the case may be of a Co-operative Institution wherein the State Government have contributed to its share capital, guaranteed loans to the tune of Rs. 3 lakhs (Rupees three lakhs) or above or if the society has incurred loss to the extent of 25 p.c. of its paid up capital. The officer so nominated shall be deemed to be on deputation with the society and his salary and allowance as determined by the State Government shall be paid from the fund of the society. The officer so deputed shall be the ex-officio member of the Board and shall have the right to vote. The officer shall be the Chief Executive Officer of the society and have the following assignments; amongst others:— (a) To have general control over the administration of the society. (b) To convene meetings of the management Board and General Body. (c) To receive all moneys and securities on behalf of the society and to make arrangements for the proper maintenance and custody of cash balance and other properties of the institution. (d) To endorse and transfer promissory notes, Government securities and to endorse, sign and negotiate cheque and other negotiable instruments on behalf of the institution. (e) To be responsible for the conduct, supervision and management of the day to day business and transaction of the society. (f) To sign all deposits, receipts and operate the accounts of the society with banks. (g) To sign bonds, and agreement in favour of the society. (h) To determine the powers, duties and responsibilities of the employees of the society. (i) To institute, conduct, defend compound or abandon any suit or other legal proceedings by or against the society or otherwise concerning the affairs of the society and also to compound and allow time for payment or satisfaction of any claims or demand by or against the society: (j) Subject to the regulations if any, Which may be framed by the Board to enter into negotiations and Sanction contracts the value of Which may be determined by the Board from time to time, (k) To delegate all or any of the said powers to an employee or employees of the society subject to the ultimate control and authority being retained by him. (3) The Registrar may constitute a common cadre authority/Society or maintaining cadres of personnel for employment as Secretaries/Managers/other paid-employees of the Co-operative Institutions,

(1) No act of the society or committee or any officer done in good faith in pursuance of the business of the society shall be deemed to be invalid by reason only of some defect subsequently discovered in the organisation of the society, or in the constitution of the Board, or in the appointment or election of an officer, or on the ground that such officer was disqualified for his office. (2) No Act done in good faith by any person appointed under this Act, the rules and the bye-laws shall be invalid merely by reasons of the fact that his appointment has been cancelled by or in consequence of any order Subsequently passed under this Act, rules and the bye-laws. (3) The Registrar shall be the authority to decide if any act was done in good faith in pursuance of the business of the society ; and his decision thereon shall be final.

(1) If, in the opinion, of the Registrar, the Board of any society persistently makes default, or is negligent, in the performance of the duties imposed on it by this Act or the Rules of the bye-laws, or commits any act Which is prejudicial to the interests, of the Society or its members, or Willfully disobeys directions issued by him for the purposes of securing proper implementation of Co-operative production; and other development programmes approved or undertaken by Government, or is otherwise not functioning properly, the Registrar may, after giving the Board an opportunity of stating its objects, (if any). Within fifteen days from the date of issue of notice by order in writing remove the Board, and :— (a) appoint a Board, consisting of three or more members of the society, in its place, or (b) 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 two years) specified in the order. Which period may, at the discretion of the Registrar, be extended from time to time, so however that the total period does not exceed five years in the aggregate. (2) The Board or administrator so appointed shall, subject to the control of the Registrar and to such instructions as he, may from time to time give, have power to exercise all or any of the functions of the Board or of any officer of the society, and take all such action as may be required in the interest of the Society. (3) If at any time during any period, extended period referred to in sub-section (1), it appears to the Registrar, that it is no longer necessary to continue to carry on the affairs of the society as aforesaid, the Registrar, may by an order published in the Official Gazette, direct that the management shall terminate ; and on such order being made, the management of the Society shall be handed over to a new Board duly constituted. (4) The Committee or administrator shall, at the expiry or termination of its or his terms of office. arrange for the constitution of a new Board in accordance with the bye-laws of the society. (5) All acts, done or proposed to be done by the Committee or administrator during the period the affairs of the society carried on by the Committee or administrator appointed under sub-section (1), shall be binding on the new Board: (6) The entire Board of Directors of a Central Co-operative Bank, Urban Co-operative Bank and Primary Land Development Bank and Primary Agricultural Credit Co-operative Society shall stand automatically disqualified if the amount of default or the total number of defaulters exceeds 60 p. c. of the total demand or the total number of indebted societies/members in the case of Central Co-operative Bank, Urban Co-operative Bank and 70 p. c. of the total demand/or the total number of indebted members in the case of primary Agricultural credit co-operative Societies for a continuous period of 2 (two) years. (7) On being discovered or declared to be disqualified under sub-section (6). The Registrar shall appoint a Special officer who should be charged with the responsibility for managing the affairs of such Banks/Primary Society as long as is necessary but not exceeding 2 (two) years. The officer appointed in the Bank or in the society shall be Vested with the powers of Registrar under section 156 in respect of individual defaulters at the primary level. If the position of the overdues of the institutions whose management is entrusted to the special officer does not improve even after the tenure of two years, the management of the institution shall not be restored to the elected representative and alternative institutional arrangement should be made for the provision of agricultural credit and the tenure of the office of the special officer may be extended by one year. Necessary arrangement should be made for liquidation of the society and for extension of the area of an adjoining viable society so as to enable the. latter to meet the credit needs of the non-defaulters and new members from the area or the Bank may by-pass the society and may undertake to finance the cultivators directly through its branch. (8) All the Cooperative Institutions registered are to submit proceedings of the general body, Board of management and any other committees and subcommittees to the Registrar, Co-operative Societies, Manipur within 15 (fifteen) days from the date of the meeting. If in the opinion of the Registrar there is anything in the proceedings which is contrary to the provisions of the Act and Rules and the bye-laws of the society. he may annul such proceedings by an order in writing but of course he shall issue a show cause notice to the concerned officer or the Board etc.

(1) The Registrar may direct any Society or class of Rocietiee, to keep proper books of accounts with teepeet to all sums of money received and expended by the society and the matters, in respect of Which the receipt and expenditure take place, all sales and purchases of goods by the society, and the assets and liabilities of the society, and to furnish such statements and returns and to produce such records as may be required from time to time ; and the officer or officers of the Society shall be bound to comply with his order within the period specified therein. (2) Where any society is required to take any action under this Act, the rules or bye-iaws, or to comply with an ordervmade under the foregoing sub-section and such action is not taken :— (a) within the time provided in this Act, the rules or the bye-laws, or the order, as the case may be, or (b) where no time is so provided, within such time, having regard to the nature and extent of the action to be taken as the Registrar may specify by notice in writing, the B egistrar may himself, or through a person authorised- by him, take such action, at the expense of the society ; and such expense shall be recoverable from the society as if it were an arrear of land revenue. (3) Where the Registrar takes action under sub-section (2), the Registrar may call upon the officer or officers of the society, whom he considers to be responsible for not cemplying with the provisions of this Act, the rules or the bye-laws, or the order made under subsection (1), and, after giving Such officer or officers an opportunity of being, heard, may require him or them to pay to the society the expenSee paidbr payable by it to the State Government as a result of their failure to take aetion anti to pay to the assete of the society such sum not exceeding twenty-five rupees as the Registrar may think fit, for each day until the Registrar’s directions are carried out.

(1) Where 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 property of a Society are likely to be misappropriated or misapplied, the Registrar or the person antheriised by him may apply to therEXecutiVe Magistrate within whose jurist diction the society is functioning for seizing and taking posseseienof the records and property of the society. (2) On receipt of an application under sub-subtion (1), the Magistrate may authorise any police offier, not below the rank of a Sub-lnspector, to enter and search any place where the recerds and property are kept or likely to be kept, and to seize them and hand over possesion thereof to the Registrar or the person authorised by him, as the case may be.

(1) The Registrar may, of his own motion, by himself, or by a person duly authorised by him in writing in this behalf, hold an inqulry into the constitution, working and financial conditions of a society. (2) The Registrar shall hold such an inquiry— (a) on the requisition of amember society in the case of an affiliating society, or (b) on the a plication b the majority of the members of the Board of the somety, or (c) on the application of one-third of the members of the society, or (d) on the requisition of the creditors repreSenting half of the borrowed capital of the society. (3) (a) All officers, members and past members of the society in respect of which an enquiry is held, and any other person who, in the opinion of the officer holding the inquiry is in possession of information. books and papers relating to the Society, shall furnish such information as is in their possession,and produce all books and papers relating to the society which are in their custody or power and otherwise give to the officer holding an inquiry all assistance in connection with the inquiry which they can reaSOnably give. (b) If any such person refuses to produce to the Registrar or any person authorised by him under sub—section (1), any book or papers which it is his duty under clause (a) to produce or to answer any question which is put to him by the Registrar 01' the persan authorised by the Registrar in pursuance of sub-elause (a) the Registrar or the person authorised by the Registrar may certify the refusal and the Registrar, after hearing any statement Which may be olfered in defence, punish the defaulter With a. penalty not exceeding five hundred rupees. Any sum imposed as penalty under this section shall on the application by the Registrar or the person authorised by him, to a Magistrate having jurisdiction, be recoverable by the Magistrate as if it were a fine imposed by himself. (4) The remit of any inquiry under this section shall be communicated to the society whose affairs have been investigated. (5) It shall be eempetent for the the Registrar to withdraw any inquiry from the officer to whom it is entrusted, and to hold the inquiry himself 01' entrust it to any other person as he deems fit.

(1) Notwithstanding anything contained in the Indian Limitation Act, 1963, but subject to the specific provisions made in this Act, the period of limitation in the case of a dispute referred to the Registrar under the last proceedings section shall— (a) when the dispute relates to the recovery of any sum, including interest thereon, due to a society by a member thereof, be computed from the date on which such member dies or ceases to be a member of the society ; (b) When the dispute is between a society or its committee, and any past committee, any past or present officer, or past or present agent, or past or present servant or the nominee, heir or legal representative of a deceased officer, deceased agent or deceased servant of the society, or a member, or past member, or the nominee, heir or legal representative of a deceased member, and when the dispute relates to any act of omission on the part of either party to the dispute, be six years from the date on Which the act of omission With reference to which the dispute arose, took place ; (c) when the dispute is in respect of any matter touching the constitution, management or business of a society which has ordered to be Wound up under section 102, or in respect of which a nominated committee or an administrator has been appointed under section 78 be six years from the date of the order issued under Section 102, or section 78 as the case may be ; (d) when the dispute is in respect of an election of an office-bearer of the societv, be one month from the date of the declaration of the result of the election. (2) The period of limitation in the case of any other dispute except these mentioned in the foregoing sub-section which are required to be referred to the Registrar under the last preceding Section shall be regulated by the provisions of the Indian Limitation Act, 1963, as if the dispute were a suit, and the Registrar a Civil Court. (3) Notwithstanding anything contained in sub-seetions (1) and (2) the Registrar may admit a dispute after the expiry of the limitation period, if the applicant satisfies the Registrar that he had sufficient cause for not referring the dispute within such period and the dispute so admitted shall be a dispute which shall not be barred on the ground that the period of limitation had expired.