Amendment of section 78

For sub-section (1) of section 78 of the Principal Act, the following shall be substituted, namely, — (1) “If in the opinion of the Registrar, the Board of any co-operative society, (i) persistently makes default or is negligent in the performance of duty imposed on it; or (ii) willfully disobeys directions issued by the Registrar for the purposes of securing proper implementation of the co-operative production and the development programmes approved or undertaken by the Government; or (iii) commits any act which is prejudicial in the interest of the society or its members; or (iv) there is stalemate in the constitution or functioning of the society; or (v) has failed to conduct elections in accordance with the provisions of the Act, the Rules and the bye-laws; or (vi) is otherwise not functioning properly, the Registrar may after giving the Board an opportunity of hearing within fifteen days from the date of issue of notice, by order in writing, remove the Board or keep under suspension, and appoint one or more administrators who need not be members of the society to manage the affairs of the society; Provided that no Board shall be superseded or kept under suspension for a period not exceeding six months however for a co-operative society carrying on the business of banking for a period not exceeding one year; Provided further that the Board of Directors of a co-operative society shall not be superseded or kept under suspension where there is no Government shareholding or loan or financial assistance or any guarantee by the Government; Provided also that in the case of a co-operative society carrying on the business of banking, the provisions of the Banking Regulation Act, 1949 shall also apply”.