Chapter XII OFFENCES AND PENALTIES

(1) Any person other than a co-operative society carrying on business under any name or title of which the word "co-operative", or its equivalent in any Indian language, is part, without the sanction of the Government shall be punishable with fine which may extend to two hundred rupees and in the cases of a continuing breach with a further fine which may extend to five rupees for every day during which the breach is continued after conviction for the first such breach. (2) Any member or past member or the nominee, heir or legal representative of a deceased member of a co-operative society who contravenes the provisions of sections 31 and 32 by disposing of any property in respect of which the society is entited to have a first charge under that section or do any other act to the prejudice of such claim, shall be punishable with fine which may extend to five hundred rupees. (3) A co-operative society or an officer or member thereof wilfully making a false return or furnishing false information, or any person wilfully or wihtout any reasonable excuse disobeying any summons, requisition or lawful written order issued under the provisions of this Act or wilfully not furnishing any information required from him by a person authorised in this behalf under the provisions of this Act, shall be punishable with fine which may extend to two hundred rupees. (4) Any employer who, without sufficient cause, fails to pay to a co-operative society the amount deducted by him under section 39 within a period of fourteen days from the date on which such deduction is made shall, without prejudice to any action that may be taken against him under any law for the time being in force, be punishable with fine which may extend to five hundred rupees. (5) Any officer or custodian who wilfully fails to handover custody of books, records, cash, security and other property belonging to a co-operative society, of which he is an officer or custodian, to a person entitled under sections 26,48,49,50 or 58 shall be punishable with fine which may extend to two hundred rupees and in the case of a continuing breach with a further fine which may extend to twenty-five rupees for every day during which the breach is continued after conviction for the first such breach. (6) Any person who fradulently acquires or abets in the acquisition of any such property which is subject to a charge under sections 31 and 32 shall be punishable with fine which may extend to two hundred rupees.

(1) No court inferior to that of a Judicial Magistrate of the first class shall try any offence under this Act. (2) No prosecution shall be instituted under this Act without the previous sanction of the Registrar and such sanction shall not be given without giving to the person concerned a reasonable opportunity to represent his case.

Every co-operative society shall have an address registered in the manner prescribed to which all notices and communications may be sent, and shall send to the Registrar notice of every change thereof within thirty days of such change.

Every co-operative society shall keep a copy of this Act, the rules and its bye-laws and also a list of its members, open to inspection free of charge at all reasonable times at the registered address of the society.

No person other than a co-operative society shall trade or carry on business under any name or title of which the word “co-operative” or its equivalent in any Indian language is part: Provided that nothing in this section shall apply to the use by any person or his successor in interest of any name or title under which he carried on business at the date on which the Co-operative Societies Act,1912 (2 of 1912). came into operation.

Notwithstanding anything contained in this Act, Government may, by general or special order and subject to such conditions, if any, as it may impose, exempt any society or class of societies from any of the requirements of this Act as to registration.

Where the Government is satisfied that it is necessary so to do for furthering any object of the society or class of societies specified in its or their bye-laws, it may, by a general or special order, published in the Official Gazette, exempt such society or class of societies from any provision of this Act.

Any person apointed as liquidator under the provisions of this Act or the rules shall be deemed to be a public servant within the meaning of section 21 of the Indian Penal Code.

No suit shall be instituted against a co-operative society or any of its officers in respect of any act touching the business of the society until the expiration of three months next after notice in writing has been delivered to the Registrar or left at his office, stating the cause of action, the name, description and place of residence of the plaintiff and the relief which he claims, and the plaint, shall contain a statement that such notice has been so delivered or left.

The provisions of the Companies Act, 1956(1 of 1956), shall not apply to co-operative societies.

(1) Every society now existing which has been registered under the Co-operative Credit Societies Act,1904, or under the Co-operative Credit Societies Act, 1912 or under the Punjab Co-operative Societies Act, 1954 shall be deemed to be registered under the corresponding provisions of this Act , and its bye-laws shall, so far as the same are not inconsistent with the express provisions of this Act, continue in force untill altered or rescinded. (2) All appointments, rules and orders made, notifications and notices issued and suits and other proceedings instituted under the said Acts shall, so far as they are consistent with the provisions of this Act, be deemed to have been respectively made, issued and instituted under this Act, save that an order made cancelling the registration of a society shall be deemed, unless the society has already been finally liquidated, as an order issued under section 57 for its being wound up.

(1) Save as provided in this Act, no civil or revenue court shall have any jurisdiction in respect of - (a) the registration of a co-operative society or its bye-laws or of an amendment of a bye-law; (b) the removal of a committee; (c) any dispute required under section 55 to be refered to the Registrar; and (d) any matter concerning the winding up and the dissolution of a co-operative society. (2) While a co-operative society is being wound up, no suit or other legal proceedings relating to the business of such society shall be proceeded with or instituted against, the liquidator as such or against the society or any member thereof, except by leave of the Registrar and subject to such terms as he may impose. (3) Save as provided in this Act. no order, decision or award made under this Act shall be questioned in any court on any ground whatsoever.

(1) In exercising the functions conferred on it by or under this Act, the Registrar, the arbitrator or any other person deciding a dispute under section 56 and the liquidator of a co-operative soicety or person entitled to audit, inspect or hold an inquiry shall have all the powers of a civil court, while trying a suit, under the Code of Civil Procedure, 1908 (5 of 1908 ), in repect of the following matters namely- (a) summoning and enforcing the attendance of any person and examining him on oath: (b) requiring the discovery and production of any document : (c) proof of facts by affidavits: and (d) issuing commissions for examination of witnesses. (2) In the case of an affidavit, any officer appointed by the Registrar, the arbitrator or any other person deciding a dispute and the liquidator, as the case may be, may administer the oath to the deponent.

No suit, prosecution or other legal proceeding shall lie against the Registrar or any person subordinate to him or acting on his authority in respect of anything in good faith done or purporting to have been done under this Act.

(1) The Government may, for any co-operative society or class of such societies, make rules to carry out the purposes of this Act. (2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely- (i) the maximum number of shares or portion of the capital of a co-operative society which may, subject to the proivisions of section 6, be held by a member : (ii) the form to be used and the conditions to be complied with in the making of applications for the registration of a society and the procedure in the matter of such applications; (iii) the procedure and contitions for change in the form and extent of the liability of a co-operative society; (iv) the matters in respect of which the society may or shall make bye-laws and for the procedure to be followed in making, altering and abrogating bye-laws and the conditions to be satisfied prior to such making, alteration or abrogation; (v) the conditions to be complied with by persons applying for admission or admitted as members, for the election and admission of members, and for the payment to be made and the interest to be acquired before the exercise of the right of membership: (vi) the manner in which funds may be raised by means of shares and debentures or otherwise; (vii) for general meeting of the members and for the procedure at such meetings and the powers to be exercised by such meetings: (viii) the prohibitions and restrictions subject to which societies which may transact business with persons who are not members; (ix) the proportion of individuals and societies in the constitution of the committee of management and the general body of a co-operative society of which another co-operative society is a member; (x) subject to the provisions of section 26, the election and nomination of members of committees, the appointment or election of officers and the suspension and removal of the members and other officers, and for the powers to be exercised and the duties to be performed by the committees and other officers; (xa) restrictions on transactions of officers and past officers with the co-operative society: (xb) the manner in which share of individuals shall be retired under sub-section (2) of section 15-A; (xc) election of members of representative general body under sub-section (1A) of section 23 and the number of members of a co-operative society required under that sub-section; (xd) the area of agricultural land, the conditions required to be fulfilled and the manner of co-option, for the purpose of section 26-A; (xe) the manner in which the vacancies caused as a result of retirement of members of a committee shall be filled; (xi) the appointment and regulation of work entrusted to person or persons replacing the committee in pursuance of section 27; (xii) prohibiting a co-operative society from electing a defaulting member on its committee or to be its representative; (xiii) the accounts and books to be kept by a co-operative society, the audit of such accounts and the charges, if any, to be made for such audit, and for the periodicial publication of a balance-sheet showing the assets and liabilities of a co-operative society; (xiv) the returns to be submitted by a co-operative society to the Registrar, the persons by whom and the form in which such returns shall be submitted and in case of failure to submit any such returns for the levy of expenses of preparing it; (xv) the persons by whom and the form in which copies of the entries in books of societies may be certified and for the charges to be levied for the supply of such copies; (xvi) the formation and maintenance of a register of members and where the liability of the members is limited by shares, of a register of shares; (xvii) the appointment of an arbitrator to decide disputes; (xviii) the procedure to be followed in proceedings before the Registrar, arbitrator or other persons deciding disputes including the appointment of a guardian for a party to the dispute who is minor or who, by reason of unsoundness of mind or mental infirmity, is incapable of protecting his interest, and the levy of the expenses relating to such proceedings; (xix) the withdrawal and expulsion of members and for the payments, if any, to be made to members who withdraw or are expelled. (2) (xx) the mode in which the value of a deceased member’s share of interest shall be ascertained and for the nomination of a person to whom such share or interest may be paid or transferred; (xxi) the payments to be made and conditions to be complied with by members applying for loans, the period for which any loans may be made and the maximum amount which may be lent, to any member; (xxia) the form of certificate to be issued under sub-section (2) of section 67-A; (xxii) the formation and maintenance of reserve funds and other funds and the objects to which such funds may be applied, and for the investment of any funds under the control of a co-operative society; (xxiii) the extent to which a co-operative society may limit the number of its members; (xxiv) the conditions under which profits may be distributed to the members of a co-operative society with unlimited liability, and the maximum rate of dividend which may be paid by co-operative societies; (xxv) the calculation and writing off of bad debts by co-operative societies; (xxvi) the procedure to be followed by a liquidator appointed under section 58 in respect of provisions of section 59; (xxvii) the procedure to be followed in presenting and disposing of appeals under this Act; (xxviii) the form of orders referred to in sections 63 and 64; (xxix) the issue and service of processes and for proof of service thereof; (xxx) the manner of effecting attachment; (xxxi) the custody, preservation and sale of property under attachment; (xxxii) the investigation of claims by persons other than the defaulter to any right or interest in the attached property, and for the postponement of the sale pending such investigation; (xxxiii) the immediate sale of perishable articles; (xxxiv) the inspection of documents in the office of the Registrar or of any other officer or authority and the levy of fees for granting certified copies of the same; (xxxv) the terms and conditions on which Government may make share-capital contribution or give assistance, financial or other, to societies and the terms and conditions on which Government may gurantee the payment of the principal or interest on debentures issued by societies or loans raised by them; (xxxvi) the manner in which funds may be raised by a society or a class of societies by means of shares or debentures or otherwise and the quantum of funds so raised; (xxxvii) for giving reasonable notice of the charge under sections 31 and 32; (xxxviii) qualifications for members of the committee and employees of a society or class of societies and the conditions of service subject to which persons may be employed by societies; (xxxix) the method of communicating or publishing any order, decision or award required to be communicated or published under this Act or the rules. (3) Every rule made under this section shall be laid as soon as may be after it is made before the State Legislature while it is in session for a total period of ten days which may be comprised in one session or in two successive sessions, and if before the expiry of the session in which it is laid or the session immediately following the Legislature agree in making any modification in the rule or the Legislature agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be, so however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.

The Punjab Co-operative Societies Act, 1954 (14 of 1955), is hereby repealed, but notwithstanding such repeal, anything done or any action taken under the repealed Act shall, to the extent of being consistent with this Act, be deemed to have been done or taken under this Act.