Chapter IV MANAGEMENT OF CO-OPERATIVE SOCIETIES

1. (1) The final authority in a co-operative society shall, subject to the provisions of this Act and the rules, vest in the general body of the members: Provided that nothing in this section shall affect any powers conferred on a committee or any officer of a co-operative society by the rules or the bye-laws.
2. (2) Notwithstanding anything contained in sub-section (1), where the size, spread or type of membership of a society requires a representative body of delegates to take decisions effectively, a smaller body called the Delegate General Body, elected from the members of the society in the prescribed manner, may be constituted in accordance with the bye-laws of the society. Such smaller body may exercise all the powers of the general body.

1. (1) Every co-operative society shall 17[within a period of six months of close of the financial year,] call in the manner prescribed thereon, an annual general meeting for the purpose of -
   • (a) approval of the programme of the activities of the society prepared by the committee for the ensuing year;
   • (b) consideration of the accounts and annual report prepared in the prescribed manner;
   • (c) consideration of the audit report prepared in the manner prescribed, and the compliance thereof;
   • (d) disposal of the net profits; and
   • (e) consideration of any other matter which may be brought forward in accordance with the bye-laws; Provided that if no such meeting is called within the time aforesaid, the Registrar or any other person authorised by him may call such meeting in the manner prescribed and that meeting shall be deemed to be a general meeting duly called by the society: Provided further that the Registrar may order that the expenditure incurred in calling such a meeting under the foregoing proviso shall be paid out of the funds of the society or by such person or persons who, in the opinion of the registrar, were responsible for the refusal or failure to convene the general meeting.
2. (2) If default is made in calling a general meeting within the period prescribed therefor or in complying with the requirements of subsection (1), the Registrar may, after giving an opportunity of being heard, declare the members of the committee disqualified for continuing as members of such committee and for being elected as members of the committee of any other society, for a period of five years; and if the default is committed by an officer or an employee of the society, the Registrar may, after giving him an opportunity of being heard, impose on him a penalty of Rs. 1000/-.

1. (1) The committee of a co-operative may, at any time, call a special general meeting of the society and shall call such meeting within one month after the receipt of requisition in writing from the Registrar or from such number of members, not being less than one-fifth of the total number of members, as may be specified in the bye-laws.
2. (2) If a special general meeting of a co-operative society is not called in accordance with the requisition referred in sub-section (1), -
   • (a) the Registrar or any other person authorised by him in this behalf shall have the power to call such meeting within One month and that meeting shall be deemed to be a meeting called by the committee;
   • (b) the Registrar shall have power to order that the expenditure incurred in calling a meeting under this sub-section, shall be paid out of the funds of the society or by such person or persons who, in the opinion of the Registrar, were responsible for the refusal or failure to convene the meeting.

1. (1) The general body of a co-operative society shall entrust the management of the affairs of the society to a committee constituted in accordance with the bye-laws: Provided that in the case of a society registered after the commencement of this Act, the persons who have signed the application to register the society may appoint a committee to conduct the affairs of the society for the period of three months from the date of the registration, but the committee appointed under this proviso shall cease to function upon the constitution of a new committee which shall be constituted in accordance with the bye-laws within the said period of three months.
2. (2) The committee shall have such number of members as prescribed in the bye-laws: Provided that the maximum number of the members of the committee shall not exceed 18[sixteen:] Provided further that twelve members of the committee shall be elected by the general body of the society: 19[Provided also that no person shall be allowed to contest elections for more than one seat in the committee of a society:] Provided also that one seat for the Scheduled Castes, one seat for the Scheduled Tribes and two seats for women shall be reserved in the committee of a co-operative society consisting of individuals as members and having members from such class or category of persons.
3. (3) The committee of a co-operative society shall co-opt such number of persons having experience in field of banking, management, finance or specialization in any other field relating to the objects and activities undertaken by the co-operative society as members of the committee as may be specified in the bye-laws: Provided that the number of such co-opted members shall not exceed two in addition to 20[sixteen] members of the committee specified in the first proviso of sub-section (2): Provided further that the functional directors of a co-operative society shall also be the members of the committee and such members shall be excluded for the purpose of counting the total number of members of the committee specified in the first proviso.
4. (4) The term of office of the elected members of the committee and its office bearers shall be five years from the date of election and the term of office bearers shall co-terminus with the term of the committee: 21[ Provided that no person shall continue as a member of the committee, if he loses the basic eligibility as may be prescribed in rules for getting elected to such committee:] 22[ Provided further that the committee may fill a casual vacancy on the committee by co-option in the manner prescribed, out of the same class of members in respect of which the casual vacancy has arisen, if the term of office of the committee is less than half of its original term: Provided also that if a causal vacancy among the elected members of the committee has arisen and the term of office of the committee is more than half of its original term, such vacancy shall be filled up by election, and the member so elected, shall hold the office for the remainder of the term:] 23[Provided also that where the committee of a society is removed under section 30 and the remainder of the original term of the committee so removed is more than half of its original term, then the elections to the committee may be held for the remainder of the term of the committee so removed, but where the committee is removed after completion of half of its original term, elections to the committee of the society for a full term shall be held at a time decided by the State Co-operative Election Authority for the purpose of synchronizing elections of different tiers of the cooperative societies.]
5. (5) Each member of the committee, including the members nominated under section 29 or co-opted under sub-section (3), shall be entitled to cast one vote: 24[ Provided that where a member nominated under section 29 on the committee of a society is also holding charge of another member who is also a nominated member of the committee under section 29, shall be entitled to vote in his capacity as such other member also:] 25[ Provided further that members nominated under section 29 or co-opted under sub-section (3), shall not have any right to vote in any election of the co-operative society in their capacity as such members or to be eligible to be elected as office bearers of the committee:] 26[ Provided also that where the Chief Executive Officer or a member nominated by the Government has any dissent with the resolution passed by the committee, such Chief Executive Officer or the member shall inform the Registrar about such dissent preferably on the same day but in any case within fifteen days from the date of such resolution.]

27[ 27A. Appointment and Removal of the Chief Executive Officer.-

1. (1) The Chief Executive Officer of the Apex Co-operative Bank or a Central Co-operative Bank shall be appointed by the committee of the concerned bank and fulfil such criteria as may be stipulated by the Reserve Bank of India.
2. (2) A person who does not fulfil the criteria for the post of the Chief Executive Officer of the Apex Co-operative Bank or a Central Cooperative Bank as stipulated by the Reserve Bank of India shall be treated as ineligible for such post and if such person is holding the post, he shall be removed on receipt of advice to this effect from the Reserve Bank of India or the National Bank.

28(1) No person shall, at the same time, be a Chairperson of more than one apex society, or more than one central society.

1. (2) If a person, on the date of his election as a Chairperson of an apex or a central society as aforesaid, is already a Chairperson of another apex or central society, his later election shall be deemed to be void on the expiry of a period of fourteen days from the above election, unless he resigns from the chairpersonship of one of the above two apex or two central societies, as the case may be, within such period.
2. (3) No person shall be eligible for being elected, co-opted or nominated as a member of a committee or for continuing as member on the committee if he is in default to the society or to any other society, in respect of any loan or loans taken by him for such period as is specified in the bye-laws of the society concerned or in any case for a period exceeding three months: Provided that this disqualification shall not apply on a member society.
3. (4) Notwithstanding anything contained in sub-section (3), no person shall be eligible for being elected, co-opted or nominated, or for continuing as a member of the committee of a Central Co-operative Bank or the Apex Co-operative Bank, if he -
   • (i) represents a society other than a primary agricultural credit society and such society is in default to such bank, in respect of any loan or loans taken by it for a period exceeding ninety days;
   • (ii) is a person who is defaulter of a primary agricultural credit society or is a representative of a defaulting primary agricultural credit society for a period exceeding one year unless the default is cleared; and
   • (iii) is a person, who represents a society whose committee is superseded or has ceased to be a member of the committee of his own society.
4. (5) No money lender as defined in the Rajasthan Money Lenders Act, 1963 (Act No. 1 of 1964) shall be eligible for being elected or coopted as an officer of a service co-operative society, as classified under the rules, and where an officer of such society as aforesaid starts money lending business, he shall, thereupon, cease to be an officer of such society.
5. (6) No member of a committee, who has been removed under section 30, shall be eligible for election, co-option or nomination as a member of any committee for a period of five years from the date of such removal: 29[ Provided that a member of the committee replaced by an Administrator under section 30-C due to expiry of the term of the committee or under clause (b) of sub-section (1) of section 30 on the ground of a stalemate in functions of the committee due to lack of quorum shall not be deemed disqualified under this sub-section.]
6. (7) No person against whom an order under section 57 has been passed, such order not having been set aside, shall be eligible for election, co-option or nomination as a member of a committee until the expiry of a period of five years from the date he repays or restores the money or other property or part thereof with interest or pay contribution and cost or compensation in satisfaction of such order. 30 (7-A) -----deleted----
7. (8) No person -
   • (i) against whom a competent court has taken cognizance for an offence punishable under section 120B, 405, 406, 407, 408, 409, 415, 416, 419, 420, 421, 422, 423, 424, 447, 463, 464, 465, 466, 467, 468, 469, 470, 471, 472, 473, 474, 475, 476 or 477A of the Indian Penal Code, 1860 (Central Act No. 45 of 1860) and is under trial shall be eligible to be elected, co-opted or nominated or to continue as a member of the committee of a society; or
   • (ii) who has been convicted of any offence by a competent court and sentenced to imprisonment for three months or more, such sentence not having been subsequently reversed or remitted or the offender pardoned, shall be eligible to be elected, co-opted or nominated or to continue as member of the committee of a society for a period of five years from the date of such conviction. 31[ (9) No person shall remain both a Chairperson of a committee and a member of the Union Council of Ministers or the State Council of Ministers or the Pramukh of a Zila Parishad or the Pradhan of a Panchayat Samiti and, if already a member of the Union Council of Ministers or the State Council of Ministers or Pramukh of a Zila Parishad or Pradhan of a Panchayat Samiti, he shall, at the expiration of a period of fourteen days from the date he becomes a Chairperson of such committee, cease to be such Chairperson of such committee unless, before such expiration, he resigns his seat in the Union Council of Ministers or the State Council of Ministers or the office he holds in the Zila Parishad or the Panchyat Samiti, as the case may be: Provided that a person who is already a Chairperson of a committee is elected as a member of the Union Council of Ministers or the State Council of Ministers or Pramukh of a Zila Parishad or Pradhan of a Panchayat Samiti, then at the expiration of fourteen days from the date of being elected as a member of Union Council of Ministers or the State Council of Ministers or Pramukh of a Zila Parishad or Pradhan of a Panchayat Samiti, as the case may be, he shall cease to be such Chairperson of the committee unless he has previously resigned his seat in the Union Council of Ministers or the State Council of Ministers or the office he holds in the Zila Parishad or the Panchyat Samiti, as the case may be:] Provided further that he may become member of the committee or a Director.
8. (10) No person shall be eligible for election, co-option or nomination as a member of the committee if he has more than two children: Provided that a person having more than two children shall not be disqualified under this sub-section for so long as the number of children he had on 10-07-1995 does not increase. Explanation - For the purpose of this sub-section, where the couple has only one child from the earlier delivery or deliveries on 10-07-1995 and thereafter, any number of children born out of a single subsequent delivery shall be deemed to be one entity. 32[ (11) No member of a committee, which has failed to -
   • (i) provide the required information or assistance to the State Co-operative Election Authority under Chapter-V; or
   • (ii) make available or arrange to make available necessary record to the enquiry officer appointed by the Registrar under section 55 for conduct of an enquiry of the affairs of the society; or
   • (iii) appoint auditor(s) and get its audit conducted within the time stipulated therefor in this Act or the rules, shall be eligible for election, co-option or nomination as a member of the committee, or for continuing as such member for a period of six years from the date of such failure.
9. (12) No person shall be eligible for being elected as a member of the committee of a society unless he possesses such minimum educational qualification as may be prescribed in the rules, if any.
10. (13) Any question as to whether a member of the committee has become subject to any of the disqualifications mentioned under this section or the rules or the bye-laws registered under this Act shall be decided by the Registrar: Provided that the question of such disqualification of a candidate contesting elections to the committee of a society shall be decided by the Election Officer during scrutiny of his nomination papers.

1. (1) Where the Government has -
   • (a) subscribed to the share capital of a co-operative society; or
   • (b) assisted indirectly in the formation or augmentation of the share capital of a co-operative society as provided in Chapter VII; or
   • (c) guaranteed the repayment of the principal and payment of interest of debentures issued by a co-operative society; or
   • (d) guaranteed the repayment of principal amount and payment of interest on loans and advances to a co-operative society. the Government or any authority specified by the Government in this behalf shall have the right to nominate not more than three members on the committee of a co-operative society : Provided that such nominees shall only be Government servants : 33[Provided further that the State Government shall have right to nominate only one member on the committee of the Apex Co-operative Bank and Central Co-operative Banks if the Government has subscribed to the share capital and shall not nominate any member on the committee of a primary agricultural credit society irrespective of the Government's subscription to the share capital.] 34[(2) Notwithstanding anything contained in this Act or the byelaws of a society, where the Government has subscribed to the share capital of a co-operative society other than a short term co-operative credit structure society to the extent of five lakhs rupees or more, the Government or any other authority specified in this behalf may nominate another member in addition to those nominated under sub-section (1) and appoint him as Chief Executive Officer of such society who shall be the ex-officio Member-Secretary of the committee. The Government or such authority as specified may also appoint any other Executive Officer to assist the Chief Executive Officer in such society.]
2. (3) Every person nominated or appointed by the Government shall hold office during the pleasure of the Government or the authority specified by the Government in this behalf
3. (4) Where the Government appoints a Chief Executive Officer under this section, the Chief Executive Officer holding office immediately before such appointment shall cease to hold office on such appointment.
4. (5) The terms and conditions of service of the Chief Executive Officer and the Executive Officer appointed under this section shall be such as may be determined by the Government and the remuneration payable to them shall be paid out of the funds of the co-operative society. 35[29-A.Officers and employees of co-operative societies.- (1) Notwithstanding anything contained elsewhere in this Act, the Registrar may issue general directions regarding the service conditions of the employees of a society or a class of societies in the interest of smooth functioning of societies and the general welfare of their employees.
5. (2) The Registrar may also form a common cadre for the employees of a class of societies in whole or in part of the State and frame such guidelines regarding recruitment, remuneration, transfer, deputation, disciplinary action and other matters relating to the service conditions of the employees covered under such cadre.] 36[29-B. Constitution of Recruitment Board for the co-operative societies. - (1) There shall be a Co-operative Recruitment Board, hereinafter called the Board in this section, for selection and recommendation for recruitment of the employees of cooperative societies of the State, as may be prescribed in the rules.
6. (2) The Board shall consist of a Chairperson and two other members and shall be constituted by the Government, in the manner prescribed.
7. (3) The Board shall, looking at the requisition and requirement of the co-operative societies concerned, shall have the power to decide the selection criteria, procedure, criteria for shortlisting of candidates, which may include a decision as to whether and how to conduct a written examination and/or interviews.
8. (4) Where the Board decides to conduct a written examination, it may conduct the same on its own or through an independent agency having suitable expertise and repute.]

37[ (1) Where -

1. (a) the committee of a co-operative society -
   • (i) persistently makes default; or
   • (ii) is negligent in the performance of its duties imposed on it by this Act or the rules or the bye-laws; or
   • (iii) commits any act prejudicial to the interest of the society or its members; or
2. (b) there is stalemate in the constitution or functions of the committee. the Zonal Registrar, in case of a primary society, the Registrar, Cooperative Societies, Rajasthan, in case of a central society and the State Government, in case of an apex society may, after giving the committee a reasonable opportunity of being heard, by order in writing, remove the committee and appoint a Government servant as an Administrator to manage the affairs of the society till the elections are held to the committee of the society: Provided that in case of a co-operative society carrying on the business of banking, the provisions of the Banking Regulation Act, 1949 (Central Act No. 10 of 1949) shall also apply.]

1. (2) If any member of the committee persistently makes default or is negligent in the performance of his duties imposed by this Act or the rules or the bye-laws made thereunder or commits any act prejudicial to the interest of the society or its members, the Zoanl Registrar, in case of primary society, the Registrar, Co-operative Societies, Rajasthan, in case of a central society and the State Government in case of an apex society may, after giving a reasonable opportunity of being heard, remove such member by order in writing. 38[ (3) The Administrator so appointed shall have powers to perform all or any of the functions of the elected committee and take all such actions as may be required in the interest of the society, subject to the control of the Registrar and to such instructions as he may give from time to time.] 39[30-A.Obligations of the Registrar to ensure compliance of Reserve Banks of India's regulatory prescriptions - (1) The Registrar shall ensure that Reserve Bank of India's regulatory prescriptions including recommendation for supersession of the committee or winding up of the Apex Co-operative Bank and Central Co-operative Banks are implemented within one month of being advised by the Reserve Bank of India.
2. (2) The Registrar shall ensure that the Liquidator or the Administrator, as the case may be, is appointed within one month of being advised by the Reserve Bank of India for winding up or supersession of the committee.
3. (3) The Registrar shall, within one month, ensure removal of Chief Executive Officer of the Apex Co-operative Bank or a Central Cooperative Bank who does not fulfil eligibility criteria specified by the Reserve Bank of India and a request has been received from the Reserve Bank of India or the National Bank to that effect.
4. (4) The Registrar shall, within one month, on being advised by the Reserve Bank of India or the National Bank, ensure removal of any person elected or co-opted as a member of the committee under subsection (2-A) of Section 27 without having the requisite qualification mentioned therein.] 40[30-B.Autonomy in all financial and internal administrative matters. - A short term co-operative credit structure society shall, subject to the general conditions and norms laid down by the Registrar in this regard, have autonomy in its financial and internal administrative matters including the following areas, namely:-
   • (a) personnel policy, staffing, recruitment, posting and compensation to staff;
   • (b) issues relating to affiliation and disaffiliation with any federal structure of its choice including entry and exit at any level;
   • (c) area of operation according to its business requirements; and
   • (d) internal control systems.] 41[ 30-C.Appointment of Administrator on completion of term of the committee. - (1) Where the term of existing committee has expired and the State Cooperative Election Authority has failed to conduct elections for a new committee, for whatever reason, in accordance with the provisions of this Act or the rules made thereunder, the Registrar may, by an order in writing, appoint a Government servant as an Administrator to manage the affairs of the society till the elections are held to the committee of the society.
5. (2) The Administrator so appointed shall have powers to perform all or any of the functions of the elected committee and take all such actions as may be required in the interest of the society, subject to the control of the Registrar and to such instructions as he may give from time to time.]

1. (1) Where the committee of a co-operative society is reconstituted 43[under the provisions of this Act ] or the committee of a cooperative society is removed by the State Government or the Registrar under section 30 or, the Chief Executive Officer of the society is changed under the rules, every outgoing member of the committee, if he is in charge of any of the records or property of the society, or the outgoing Chief Executive Officer of the society shall hand over charge of all the records and property of the society to the Chief Executive Officer, who shall be the overall trustee of all the records and property of the society: 42[ Provided that in societies where there is no Chief Executive Officer, the Secretary of the society and if there is no Secretary also, then the Chairperson of the society shall be deemed to be the trustee of all the records and property of the society:] 43[ Provided further that where the society is ordered to be wound up under section 61, the charge of the record and property of the society shall be handed over to the Liquidator, appointed under section 63.]
2. (2) If any such outgoing officer or member, refuses to hand over the charge of the record and property to the Chief Executive Officer 2 or the Secretary or the Chairperson or the Liquidator of the society as the case may be or, where the Registrar is satisfied that the books and records of a society are likely to be suppressed, tampered with, or destroyed, or the funds and property of a society are likely to be misappropriated or misapplied, the Chief Executive Officer 42[or the Secretary or the Chairperson or the Liquidator of the society] as the case may be or the Registrar or a person authorized by the Registrar may apply to the Judicial magistrate of the First Class, within whose jurisdiction the society is functioning, for searching, seizing and taking possession of `the records and property of the society.
3. (3) On receipt of an application under sub-section (1), the Magistrate may, by a warrant, authorise any police officer, not below the rank of a Sub-Inspector, to enter the likely places, where the records and the property are kept or are believed to be kept, and to search and to seize such records and property; and the records and property so seized shall be handed over to the Chief Executive Officer or the 44[ Secretary or the Chairperson or the Liquidator of the society] or the Registrar, or the person authorised by the Registrar, as, the case may be.