Chapter IV MEMBERS OF MULTI-STATE CO-OPERATIVE SOCIETIES AND THEIR DUTIES, RIGHTS AND LIABILITIES

(1) No person shall be admitted as a member of a multi-State co-operative society except the following, namely:— (a) an individual, competent to contract under section 11 of the Indian Contract Act, 1872 (9 of 1872); (b) any multi-State co-operative society or any co-operative society; (c) the Central Government; (d) a State Government; (e) the National Co-operative Development Corporation established under the National Co-operative Development Corporation Act, 1962 (26 of 1962); (f) any other corporation owned or controlled by the Government; (g) any Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956); (h) such class or classes of persons or association of persons as may be permitted by the Central Registrar having regard to the nature and activities of a multi-State co-operative society. (2) No individual person shall be eligible for admission as a member of a national co-operative society or a federal co-operative. (3) Any person eligible for membership of a multi-State co-operative society may, on his application, be admitted as a member by such society. (4) Every application for admission as a member of a multi-State co-operative society shall be disposed of by such society within a period of four months from the date of receipt of the application, and the decision of such society on the application shall be communicated to the applicant within fifteen days from the date of such decision: Provided that if the application is not disposed of within the period aforesaid, or the decision is not communicated within a period of fifteen days of the expiry of the aforesaid period of four months, the multi-State co-operative society shall be deemed to have made a decision, on the date of expiry of such period, refusing admission to the applicant. (5) It shall be the duty of every member of a multi-State co-operative society to promote and protect the interests and objects of such society.

A multi-State co-operative society may, if provided in its bye-laws, admit a person as nominal or associate member: Provided that no such nominal or associate member shall have any interest in the management thereof including right to vote, elect as a director of the board or participate in the general body meetings: Provided further that nominal or associate member can be issued non-voting shares which may not confer any interest in the management of the multi-State co-operative society including right to vote, to be elected as a director of the board or participate in the general body meetings: Provided also that in case of multi-State co-operative bank, such shares shall be issued in accordance with the instructions issued by the Reserve Bank from time to time.

(1) Every multi-State co-operative society shall organise co-operative education programmes for its members, directors and employees. (2) Every multi-State co-operative society may provide funds for such co-operative education programmes.

No member of a multi-State co-operative society shall exercise the rights of a member, unless he has made the payment of all dues to the multi-State co-operative society including the payment in respect of membership or has availed such minimum level of product or services as specified in the bye-laws, or has acquired such interest in the society, as may be specified in the bye-laws.

No person shall be eligible for being a member of a multi-State co-operative society if— (a) his business is in conflict or competitive with the business of such multi-State co-operative society; or (b) he fails to use the minimum level of the products or services as specified in the bye-laws for two consecutive years; or (c) he has not attended three consecutive general meetings of the multi-State co-operative society and such absence has not been condoned by the members in the general meeting; or (d) he has made any default in payment of any amount to be paid to the multi-State co-operative society under the bye-laws of such society.

(1) A multi-State co-operative society may, by resolution passed by a majority of not less than two-thirds of the members present and voting at a general meeting of members held for the purpose, expel a member for acts which are detrimental to the proper working of the society: Provided that the member concerned shall not be expelled unless he has been given a reasonable opportunity of making representation in the matter. (2) No member of the multi-State co-operative society who has been expelled under sub-section (1), shall be eligible for re-admission as a member of that society, for a period of three years from the date of such expulsion.

Every member of a multi-State co-operative society, including a member who is an employee of such society, shall have one vote in the affairs of the society: Provided that— (a) a member who is an employee of such society shall not be entitled to vote— (i) at the election of a member of the board of such society; (ii) in any general meeting convened for framing the bye-laws of such society or any amendments thereto; (b) in the case of an equality of votes, the chairperson shall have a casting vote; (c) where any of the authorities, multi-State co-operative society or a co-operative society referred to in clauses (b) to (g) of sub-section (1) of section 25 is a member of a multi-State co-operative society, each person nominated by such authority or society, on the board in accordance with the provisions contained in this Act and the rules, shall, have one vote; (d) a multi-State co-operative society, the membership of which include co-operative societies or other multi-State co-operative societies, may provide in its bye-laws for an equitable system of voting having regard to the membership of, and the extent of business carried on, by such co-operative societies or multi-State co-operative societies. Provided that where such Chairperson or President fails to direct the Chief Executive to convene the meeting of the board within the quarter, such Chief Executive shall convene the meeting on the basis of requisition of the Vice-Chairperson or Vice-President or any other Member of the board: Provided further that notwithstanding anything contained in the first proviso, the Chief Executive may also convene the meeting on the basis of requisition from at least fifty per cent. of Members of the board; (2) The total number of meetings of the board in a year and the venue of meetings as may be specified in the bye-laws: Provided that the board shall meet at least once in every quarter: Provided further that not more than two persons may be invited by the board in its meetings. (3) The Chairperson or President, if for any reason, is unable to attend a meeting of the board, the Vice-Chairperson or Vice-President and in the absence of both, any other Member of the board chosen by the Members of the board present from amongst themselves at the meeting, shall preside over the meeting. (4) The quorum for a meeting of the board of directors of a multi-State co-operative society shall be one-third of its total number of elected directors.

Every member of a multi-State co-operative society shall exercise his vote in person and no member shall be permitted to vote by proxy: Provided that a multi-State co-operative society or a co-operative society or any other institution which is a member of any other multi-State co-operative society may, subject to the provisions of sub-section (3) of section 38 and the rules, appoint its representative to vote on its behalf in the affairs of such multi-State co-operative society.

No member, other than the authorities referred to in clauses (c) to (g) of sub-section (1) of section 25 or a multi-State co-operative society or a co-operative society, shall hold more than such portion of the total share capital of the society (in no case exceeding one-fifth thereof) as may be prescribed in the rules or bye-laws of such multi-State co-operative society.

The transfer of share or interest of a member in the capital of a multi-State co-operative society shall be subject to such conditions as to maximum holding as specified in section 33.

(1) The shares of the authorities referred to in clauses (c) and (d) of sub-section (1) of section 25, held in multi-State co-operative societies,–– (a) shall not be redeemed without the prior approval of such authorities; and (b) may be redeemed in such manner as may be agreed upon between the multi-State co-operative society and such authorities. (2) The shares held in a multi-State co-operative society by any of the authorities referred to in clauses (e) to (g) of sub-section (1) of section 25, shall be redeemed in accordance with the bye-laws of such multi-State co-operative society and in case, where the bye-laws do not contain any provision, in such manner as may be agreed upon between the multi-State co-operative society and such authorities. (3) The redemption of shares referred to in sub-sections (1) and (2), shall be on the face value of shares.

(1) On the death of a member, a multi-State co-operative society may transfer the share or interest of the deceased member to the person nominated in accordance with the bye-laws made in this behalf or, if there is no person nominated, to such person as may appear to the board to be the heir or legal representative of the deceased member, or pay to such nominee, heir or legal representative, as the case may be, a sum representing the value of such member’s share or interest as ascertained in accordance with the rules: Provided that no such transfer or payment shall be made except with the consent of the nominee, heir or legal representative, as the case may be. (2) A multi-State co-operative society shall, unless within six months of the death of the member prevented by an order of a competent court, pay to such nominee, heir or legal representative, as the case may be, all other moneys due to the deceased member from the society. (3) All transfers and payments made by a multi-State co-operative society in accordance with the provisions of this section shall be valid and effectual against any demand made upon the society by any other person.

(1) Subject to the provisions of sub-section (2), the liability of a past member or of the estate of a deceased member of a multi-State co-operative society for the debts of the society as they existed,— (a) in the case of a past member, on the date on which he ceased to be a member; (b) in the case of a deceased member, on the date of his death, shall continue for a period of two years from such date. (2) Notwithstanding anything contained in sub-section (1), where a multi-State co-operative society is ordered to be wound up under section 86, the liability of a past member who ceased to be a member or of the estate of a deceased member who died within two years immediately preceding the date of the order of winding up, shall continue until the entire liquidation proceedings are completed, but such liability shall extend only to the debts of the society as they existed on the date of cessation of membership or death, as the case may be.