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KERALA CO-OPERATIVE SOCIETIES ACT, 1969

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Preamble [Act No. 21 of 1969]

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PREAMBLE

An Act to consolidate, amend and unify the laws relating to co-operative societies in the State of Kerala

WHEREAS with a view to providing for the orderly development of the co-operative movement in the State of Kerala in accordance with the relevant directive principles

S.1 Short title, extent and commencement

Section 1

(1) This Act may be called the Kerala Co-operative Societies Act, 1969.

(2) It extends to the whole of the State of Kerala

(3) It shall come into force on such date as the Government may, by notification in the Gazette, appoint:*

Section 2

In this Act, unless the context otherwise requires-

(a) "apex society" means a society having the whole of the State as its area of operation and having as its members only other societies with Similar objects and declared as such by the Registrar;

(b) "bye-l

S.3 Registrar

Section 3

(1) The Government may appoint a person to be the Registrar of Cooperative Societies for the State.

(2) The Government may by general or special order confer on any person all or any of the powers of the Registrar under this Act.


S.4 Societies which may be registered

Section 4

Subject to the provisions of this Act, a co-operative society which has as its object the promotion of the economic interests of its members or of the interests of the public in accordance with co-operative principles, or a society established with the object of facilitating the operations of such a society, may be registered under this Act.


S.5 Registration with limited liability only

Section 5

(1) A co-operative society shall be registered only with limited liability:

Provided that this sub-section will not affect the rights and liabilities of societies with unlimited liability which are in existence at the time of commencement of this Act.

(2) The

S.6 Registration

Section 7

(1) If the Registrar is satisfied-

(a) that the application complies with the provisions of this Act and the rules;

(b) that the objects of the proposed society are in accordance with section 4;

Section 8

Where a co-operative society is registered under this Act, the Registrar shall issue a certificate of registration signed and sealed by him, which shall be conclusive evidence that the said society is duly registered under this Act.


S.9 Co-operative Societies to be bodies corporate

Section 9

The registration of a society shall render it a body corporate by the name under which it is registered, having perpetual succession and a common seal and with power to hold property, enter into contracts, institute and defend suits and other legal proceedings and to do all things necessary for the purposes for which it was constituted.


S.10 Change of Name of society

Section 10

(1) A society may, by an amendment of its bye-laws, change its name.

(2) Where a society changes its name, the Registrar shall enter the new name in the register of co-operative societies in the place of the former name and shall amend the certificate of registration accordingly.

Section 11

(1) Subject to the provisions of this Act and the rules a society may, by an amendment of its bye-laws, change the form or extent of its liability.

(2) When a society has passed a resolution to change the form or extent of its liability it shall notice thereof in writing to all its members and creditors and notwithstanding the provisions of S.24 or any bye-laws or contra

S.12 Amendment of bye-laws of a Society

Section 12

(1) No amendment to any bye-law of a society shall be valid unless such amendment has been registered under this Act.

(2) The provisions of section 7 specifying the conditions to be satisfied before registration of the bye-laws of a society by the Registrar shall, mutatis mutandis, apply also to the registration of amendments to bye-laws;

Section 13

An amendment of the bye-laws of a society shall, unless it is expressed to come into operation on a particular day, come into force on the day on which it is registered.


S.14 Amalgamation, transfer of assets and liabilities and division of society

Section 14

(1) A society may, with the previous approval of the Registrar and by a resolution passed by a two thirds majority of the members present and voting at a general body meeting of the society;

(a) transfer its assets and liabilities in whole or in part to any other society;

Section 15

(1) Where the whole of the assets and liabilities of a society are transferred to another society in accordance with the provisions of section 14 the registration of the first mentioned society shall stand cancelled and that society shall be deemed to have been dissolved and shall cease to exist as a corporate body.

(2) Where two or more societies are amalgamated into a

S.16 Persons who may become members

Section 16

(1) No person shall be admitted as a member of a society except the following, namely.--

(a) an individual-

(i) who has attained the age of eighteen years;

Section 17

(1) Any member of a society, who has acted, adversely to the interests of the society, may be expelled upon a resolution of the general body passed at a special meeting convened for the purpose by the votes of not less than two-thirds of the total number of members present and voting at the meeting.

(2) No member shall be expelled under sub-section (1) without being give

S.18 Nominal or associate members

Section 18

(1) A society may admit any individual as a nominal or associate member.

(2) A nominal or associate member shall not be entitled to any share, in any form whatsoever, in the assets or profits of the society or to be elected to the committee of a society.

(3) S

S.19 Member not to exercise rights till due payment made

Section 19

No member of a society shall exercise the rights of a member unless he has made such payments to the society in respect of membership or has acquired such interest in the society, as may be prescribed by the rules or the bye-laws.


S.20 Votes of members

Section 20

Every member of a society shall have one vote in the affairs of the society:

Provided that-

(a) a nominal or associate member shall not have the right to vote;

Legal Commentary on Section 20 of the Kerala Co-operative Societies Act, 1969

Introduction

Section 20 of the Kerala Co-operative Societies Act, 1969 deals with the voting rights of members in co-operative societies. This provision is fundamental to the democratic functioning of co-operative societies, as it determines who can participate in the decision-making processes of the society. The section has undergone significant amendments, most notably by Act 3 of 2002 with effect from 4.5.2002, which expanded the scope of voting rights.

What the Section Says

Section 20, titled "Vote of members," establishes that every member of a co-operative society shall have one vote in the affairs of the society. The section contains specific provisions regarding:- Voting rights of active members- Disqualifications for voting- Government representatives' voting rights- Restrictions on voting by newly admitted members

Essential Ingredients

  1. One member, one vote - The foundational principle of co-operative democracy
  2. Active membership - Prior to the 2002 amendment, voting rights were restricted to active members
  3. Restrictions on newly admitted members - Members admitted within 60 days prior to an election cannot vote
  4. Exclusion of nominal/associate members - Such members do not have voting rights
  5. Government nominees - Multiple government nominees may each have one vote

Scope of Section

The scope of Section 20 extends to:

  • All types of co-operative societies registered under the Act
  • Election processes for committee members
  • General body meetings and decision-making
  • Determination of member eligibility for voting

Punishment for Section

The Act does not prescribe specific criminal punishment for violation of Section 20 itself. However, violations may lead to:

  • Civil consequences such as invalidation of elections
  • Administrative actions by the Registrar
  • Challenges to decisions made in contravention of voting rights

Legal Comments

  • Voting Rights - Active vs. Inactive Members: The statute as it now stands does not make any distinction between active members and inactive members in so far as the voting right as provided under Section 20 is concerned. [N. Surendran VS Poovattur East Service Co-Operative Bank Ltd. - 2015 0 Supreme(Ker) 64]

  • Amendment Impact: Before its amendment by Act 3 of 2002 w.e.f. 4.5.2002, the voting right was recognized only in favour of every active member of the society. [N. Surendran VS Poovattur East Service Co-Operative Bank Ltd. - 2015 0 Supreme(Ker) 64]

  • Determination of Ineligibility: The question of ineligibility of a member to continue to be a member for reasons stated in Section 16A (for not attending annual general body meeting and not availing of services) and the consequent removal can be ascertained or determined only after the close of the year as contemplated under Rule 18A. [N. Surendran VS Poovattur East Service Co-Operative Bank Ltd. - 2015 0 Supreme(Ker) 64]

  • Time Period for Removal Process: For completing the entire process as contemplated under sub-rule (2) of Rule 18A, the Committee has a total period of ninety days from the completion of every year. [N. Surendran VS Poovattur East Service Co-Operative Bank Ltd. - 2015 0 Supreme(Ker) 64]

  • Definition of "Year": "Year" is defined in Section 2(u) as the period commencing on the first day of April of any year and ending with 31st of March of the succeeding year. [N. Surendran VS Poovattur East Service Co-Operative Bank Ltd. - 2015 0 Supreme(Ker) 64]

  • Vote of Every Member: Every member of a society shall have one vote in the affairs of the society, as per the general principle established under Section 20.

  • Restriction on Newly Admitted Members: A member admitted within sixty days immediately prior to the date of election shall not have a right to vote.

  • Exclusion of Nominal/Associate Members: A nominal or associate member shall not have a right to vote in the affairs of the society.

  • Government Nominees' Voting Rights: Where the Government is a member of a society, each person nominated by the Government shall have one vote.

  • Eligibility Criterion for Voting: No member of a society shall be eligible to vote at the meeting fixed for any election to the committee of that society, unless 30 days prior to the date of such election they are a member in good standing.

  • Self-Governing Nature of Societies: The Act organizes co-operative societies as self-governing institutions, with Section 20 being central to ensuring democratic participation.

  • One Vote Principle: Section 20 establishes the principle of "one member, one vote" regardless of the number of shares held by a member.

  • Rules Supplementing Section 20: The Kerala Co-operative Societies Rules, 1969, particularly Rule 18A, provides the procedural framework for determining voting eligibility and membership status. [N. Surendran VS Poovattur East Service Co-Operative Bank Ltd. - 2015 0 Supreme(Ker) 64]

  • Section 20 Overrides Other Provisions: Section 20 begins with "Notwithstanding anything contained in any other provision of this Act or other law," indicating its overriding effect.

  • Interaction with Section 16A: The provisions of Section 20 regarding voting rights must be read in conjunction with Section 16A, which deals with the removal of members who do not attend annual general body meetings or avail of society services. [N. Surendran VS Poovattur East Service Co-Operative Bank Ltd. - 2015 0 Supreme(Ker) 64]

  • Procedural Requirements: The determination of a member's active status for voting purposes requires completion of the procedural process outlined in Rule 18A before voting rights can be affected. [N. Surendran VS Poovattur East Service Co-Operative Bank Ltd. - 2015 0 Supreme(Ker) 64]

S.21 Manner of exercising vote

Section 21

(1) Every member of a society shall exercise his vote in person.

(2) Notwithstanding anything contained in sub-section (1), a society or corporation or a statutory or non-statutory Board, Committee or other body of persons which is a member of another society may, subject to any rules made under this Act, appoint one of its members to vote on its behalf in the affairs of


Based solely on the provided sources, there is no specific information regarding Section 21 of the Kerala Co-operative Societies Act, 1969. The sources reference Section 21 of various other acts (like the Urban Land Ceiling Act, Karnataka Rent Control Act, U.P. Sales Tax Act, General Clauses Act, etc.) and also discuss the Maharashtra Co-operative Societies Act, but not the specific Section 21 of the Kerala Act from 1969.

However, the sources do provide extensive commentary on Section 21 of the Indian Penal Code, 1860, particularly in the context of the Maharashtra Co-operative Societies Act, 1960, which can be used to interpret provisions regarding the status of officers. Below is a legal commentary based on the available sources, focusing on the relevant legal principles.

Legal Commentary on the Status of Co-operative Society Officers (as informed by Section 21, IPC and analogous State Acts)

Introduction

The legal status of officers of co-operative societies, particularly whether they are deemed "public servants," is a critical issue affecting their liability under laws like the Prevention of Corruption Act, 1947. While the specific text of Section 21 of the Kerala Co-operative Societies Act, 1969 is not detailed in the provided sources, an analogous provision from the Maharashtra Co-operative Societies Act, 1960 (Section 161) provides a clear legal framework for this discussion. The analysis below is based on judicial interpretations of this analogous law and the principles of legislative competency.

What the Law Says (Based on Analogous Provisions)

The key provision, as interpreted from the sources, deems certain officers of co-operative societies to be "public servants" within the meaning of Section 21 of the Indian Penal Code (IPC) [Pralhad Shamburao Newale & others VS State of Maharashtra & others - 1987 0 Supreme(Bom) 394]. This is achieved through a State Act (like the Maharashtra Co-operative Societies Act) that adds to the list of public servants defined under the IPC.

Essential Ingredients

For an officer of a co-operative society to be considered a public servant:1. The officer must fall within the definition of "officer" under the relevant State Co-operative Societies Act (e.g., Section 2(20) of the Maharashtra Act) [Pralhad Shamburao Newale & others VS State of Maharashtra & others - 1987 0 Supreme(Bom) 394].2. The State Act must contain a provision (e.g., Section 161 of the Maharashtra Act) that explicitly deems such officers to be public servants within the meaning of Section 21 of the IPC [Pralhad Shamburao Newale & others VS State of Maharashtra & others - 1987 0 Supreme(Bom) 394].

Scope of Section

The scope extends to making co-operative society officers liable under central laws that apply specifically to public servants, such as the Prevention of Corruption Act, 1947 [Pralhad Shamburao Newale & others VS State of Maharashtra & others - 1987 0 Supreme(Bom) 394]. This is valid because the State Legislature has the competence to legislate on "Co-operative Societies" (State List) and can define the status of its officers for the purposes of criminal law without creating a "repugnancy" under Article 254 of the Constitution [Pralhad Shamburao Newale & others VS State of Maharashtra & others - 1987 0 Supreme(Bom) 394].

Punishment for Section

The sources do not prescribe a specific punishment for Section 21 itself. Instead, the punishment is derived from the penal law to which the officer is now made subject. By being deemed a public servant, officers become liable for offences under:- The Prevention of Corruption Act, 1947 (e.g., Section 5) for criminal misconduct [Pralhad Shamburao Newale & others VS State of Maharashtra & others - 1987 0 Supreme(Bom) 394].- The Indian Penal Code, 1860 for offences against public servants [Pralhad Shamburao Newale & others VS State of Maharashtra & others - 1987 0 Supreme(Bom) 394].

Legal Comments

S.22 Restrictions of holding of shares

Section 22

In any society no member other than the Government, any statutory or non-statutory Board, Committee or Corporation approved by the Government in this behalf or any other society, shall-

(a) hold more than such portion of the total share capital of the society not exceeding one fifth thereof, as may be prescribed; or

Section 23

(1) The transfer of a sharp or interest of a member in the capital of a society shall be subject to such conditions and restrictions as to the maximum holdings as are specified in section 22.

(2) No transfer by a member of his share or interest in a society shall be valid unless-

Section 24

Subject to the other provisions of this Act, no withdrawal by a member of his share in a society shall be valid unless-

(a) the member has held such share for not less than three years; and

(b) such withdrawal is in accordance with the bye-laws of the society.


S.25 Transfer of interest on death of members

Section 25

(1) On the death of a member of a society, the society shall transfer the share or interest of the deceased member to the person or persons nominated in accordance with the rules or the bye-laws or, if no person has been so nominated, to such person as may appear to the committee to be the heir or legal representative of the deceased member:

Provided that such nominee,

S.26 Liabilities of past member or of estate of deceased member

Section 26

(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 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;

S.27 Final authority in a Society

Section 27

(1) Subject to the provisions of this Act, the rules and the bye-laws, the final authority of a society shall vest in the general body of its members:

Provided that nothing contained in this sub-section shall affect the exercise by the committee or any officer of a society of any power conferred on such committee or such officer by this Act or the rules or the bye-laws.

(2) Notwithstanding anything contained in sub-section (1), where

S.28 Appointment of Committee

Section 28

(1) The general body of a society shall 1[constitute a committee, for a period not exceeding three years], in accordance with the bye-laws and entrust the management of the affairs of the society to such committee:

Provided that in the case of 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 a period of three months from the date of registration or for such further period as the Registrar may

S.28(a) Reservation for women members and members belonging to Scheduled Castes or Scheduled Tribes in the Committee

Section 28A

1[(1) Notwithstanding anything contained in sub-section (1) of section 28 there shall be reserved 2(in the committee of every primary credit society, every District Co-operative Bank, the Kerala State Cooperative Bank Ltd., and the Kerala State Co-operative Agricultural and Rural Development Bank Ltd.) one seat for a woman member and one seat for a member belonging to the Scheduled Castes or Scheduled Tribes and for that purpose. 3[the society or the bank, as the case may be may, if they consider it necessary so to do, increase the total number of members of the committee by two more members.

S.29 Annual general body meeting

Section 29

(1) A general body meeting of a society shall be held once in a year for the purpose of.--

(a) approval of the budget with reference to the programme of the activities of the society prepared by the committee for the ensuing year;

(b) election, if any, in th

S.30 Special general body meetings

Section 30

(1) The committee of a society may at any time, call a special general body meeting of the society and shall call such meeting within one month after receipt of a requisition in writing from the Registrar or from such number of members or a proportion of the total number of members, as may be prescribed.

(2) If a special general body meeting of a society is not call

S.31 Nominees of Government on committee of an apex or a central society

Section 31

1[(1) Where the Government-

(a) have subscribed to the share capital of an apex or a central society; or

(b) have assisted indirectly in the formation or augmentation of the share capital of an apex or a central society; or

(c) have guaranteed the repayment of principal and payment of interest on debentures iss

S.32 Supersession of Committee

Section 32

(1) If the Registrar is satisfied that the committee of any society persistently makes default or is negligent in the performance of the duties imposed on it by this Act or the rules or bye-laws or commits any act which is prejudicial to the interests of the society or willfully disobeys or willfully fails to comply with any lawful order or direction issued under this Act or the rules, the Registrar may, after giving the committee an opportunity to state its objections, if any, by

S.33 Appointment of new committee or Administrator on failure to constitute committee, etc

Section 33

(1) Where the term of office of a committee has expired and a new committee has not been constituted, or 1[where a no confidence motion is passed by the general body against the existing committee or where the existing committee resigns enbloc or where vacancies occur in the committee either by resignation or otherwise and the number of remaining members cannot constitute the quorum for the meeting of the committee, or where the committee fails to hold its regular m

S.34 Securing possession of Records etc

Section 34

(1) if the committee of a society is reconstituted at a general meeting of the society or the committee of a society is removed by the Registrar under section 32 or a new committee or administrator or administrators is or are appointed under section 33 or if the society is ordered to be wound up under section 71 and the outgoing members of the committee refuse to hand over charge of the records and property of the society to the new committee or administrator or administrators or t

S.35 First charge of society on certain assets

Section 35

(1) Notwithstanding anything contained in any law for the time being in force, but subject to any prior claim of the Government in respect of land revenue or any money recoverable as land revenue, any debt or outstanding demand owing to a society by any member or past member or deceased member shall be a first charge. -

(a) upon the crops or other agricultural produce o

S.36 Charge on land owned or held by members borrowing loans from certain societies

Section 36

Notwithstanding anything contained in this Act or any other law for the time being in force.

(i) a member who makes an application for a loan to a society of which the majority of the members are agriculturists shall, if he owns any land or holds any land as a tenant entitled to fixity of tenure, make a declaration in the prescribed form, which shall state that the appl

S.37 Deduction from salary to meet society's claim in certain cases

Section 37

(1) Notwithstanding anything contained in any law for the time being in force, a member of a society, may execute an agreement in favor of the society providing that his employer or the officer disbursing his salary or wages shall be competent to deduct from the salary or wages payable to him by the employer, such amount as may be specified in the agreement and to pay the amount so deducted to the society in satisfaction of any debt or other demand owing by the member to the Societ

S.38 Charges and set off in respect of shares or interest of members in the capital of a society

Section 38

A society shall have a charge upon the share or interest in the capital and on the deposits of a member or past member or deceased member and on any dividend, bonus or profits payable to a member or past member or the estate of a deceased member in respect of any debt or outstanding demand owing to the society and may set-off any sum credited or payable to a member, past member or the estate of a deceased member in or towards payment of any such debt or outstanding demand:

Provided that no financing bank to which a society is affiliated shall ha

S.39 Shares or interest or reserve fund not liable to attachment

Section 39

(1) Subject to the provisions of section 38, the share or interest of a member in the capital of a society shall not be liable to attachment or sale under any decree or order of a court in respect of any debt or liability incurred by him and a receiver under any law relating to insolvency shall not be entitled to, or have any claim on, such share or interest.

(2) The res

S.40 Exemption from certain taxes, fees and duties

Section 40

(1) The Government may, by notification in the Gazette, remit in respect of any class of societies-

(a) the stamp duty chargeable under the Kerala Stamp Act, 1959 (17 of 1959), in respect of any instrument executed by or on behalf of a society or by an officer or member thereof and relating to the business of such Society, or any class of such instruments, or in respect

S.41 Exemption from compulsory registration of instruments

Section 41

Nothing in clause (b) and (c) of sub-section (1) of section 17 of the Indian Registration Act, 1908 (Central Act 16 of 1908) or sections 54 and 59 of the Transfer of Property Act, 1882 (Central Act 4 of 1882), shall apply to

(a) any instrument relating to shares in a society, notwithstanding that the assets of the society consists in whole or in part of immovable proper

S.42 Direct partnership of Government in societies

Section 42

(1) The Government may subscribe directly the share capital of a society with limited liability.

(2) Notwithstanding any agreement to the contrary, the Government shall not be entitled to a dividend on the shares of any such society at a rate higher than that at which such dividend is payable to any other shareholder of the society.


S.43 Indirect partnership of Government in societies

Section 43

The Government may provide moneys to a society for the purchase of shares in other societies with limited liability.


S.44 Principal State Partnership Fund

Section 44

(1) An apex society which is provided with moneys by the Government under section 43 shall, with such moneys, establish a fund to be called the 'Principal State Partnership Fund'.

(2) An apex society shall utilize the Principal State Partnership Fund for the purpose of.--

(a) directly purchasing shares in other societies with limited liability; or

Section 45

(1) A central society which is provided with moneys an apex society from the Principal State Partnership Fund shall, with such moneys, establish a fund to be called the 'Subsidiary State Partnership Fund'

(2) A central society shall utilize the Subsidiary State Partnership Fund for the purpose of

Section 46

No shares in a society shall be purchased from the moneys in the Principal State Partnership Fund or the Subsidiary State Partnership Fund except with the previous approval in writing of the Government.


S.47 Liability to be limited in respect of certain shares

Section 47

Where any shares in a society are purchased by-

(a) the Government; or

(b) the apex society or a central society from the Principal State Partnership Fund or the Subsidiary State Partnership Fund, as the case may be, the liability in respect of such shares shall, in the event of the society being wound

S.48 Restrictions on amount of dividend

Section 48

An apex society which has purchased shares in other societies from the moneys in the Principal State Partnership Fund and a central society which has purchased shares in primary societies from the moneys in the Subsidiary State Partnership Fund shall be entitled only to such dividend on the said shares as is declared by the society concerned and is payable to other share holders of that society.


S.49 Indemnity of apex and central societies

Section 49

(1) If a society in which shares are purchased from the moneys in the Principal State Partnership Fund is wound up or is dissolved, the Government shall not have any claim against the apex society which purchased the shares in respect of any loss arising from such purchase; but the Government shall be entitled to any moneys received by the apex society in liquidation proceedings or on dissolution, as the case may be.

Section 50

(1) All moneys received by an apex society in respect of shares of other societies purchased from the moneys in the Principal State Partnership Fund or redemption of such share or by way of dividends or otherwise shall be credited to that Fund.

(2) All moneys received by a central society in respect of shares of primary societies purchased from the moneys in the Subsidia

S.51 Disposal of Principal State Partnership Fund and Subsidiary State Partnership Fund on winding up of apex or central society

Section 51

(1) If an apex society which has established a Principal State Partnership Fund is wound up or is dissolved, all moneys to the credit of, or payable to, that fund shall be paid to the Government.

(2) If a central society which has established a Subsidiary State Partnership Fund is wound up or is dissolved, all moneys to the credit of, or payable to, that Fund shall be cr

S.52 Agreement by Government and apex societies

Section 52

Subject to the foregoing provisions of this Chapter,

(a) the Government may enter into an agreement with an apex society setting out the terms and conditions on which it shall provide moneys to the apex society for the purpose specified in S.43;

(b) an apex

S.53 Order forms of State aid to societies

Section 53

Notwithstanding anything contained in any law for the time being in force, the Government may- (a) give loans or makes advances to societies;

(a) guarantee the repayment of principal and payment of interest on debentures issued by a society;

(b) guarantee the repayment of share capital of a society and dividends thereon at such rates as may be specified by the Government;

Section 54

The provisions of Ss.43 to52 shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force.


S.55 Funds not to be divided

Section 55

No part of the funds other than the net profits of a society shall be paid by way of bonus or dividend or otherwise distributed among its members;

Provided that a member may be paid such remuneration, allowances or honoraria and on such scale as may be laid down by the bye-laws for any services rendered by him to the society.


S.56 Disposal of net profit

Section 56

(1) A society shall, out of its net profits in any year-

(a) transfer an amount not being less than fifteen per cent of the net profits to the reserve fund; and

(b) credit such portion of the net profits, not exceeding five per cent, as may be prescribed, to

S.57 Investment of funds A society may invest or deposit its funds

Section 57

(a) in Government Savings Bank, or

(b) in any of the securities specified in S.20 of the Indian Trusts Act, 1882 (Central Act 2 of 1882); or

(c) in the shares or securities of any other society approved for the purposes by the Registrar by general or special o

S.58 Restrictions on borrowing

Section 58

A society shall receive deposits and loans only to such extent and under such conditions as may be prescribed or as may be specified in the bye-laws.


S.59 Restrictions on loans

Section 59

(1) A Society shall not make a loan to any person or a society other than a member:

Provided that, with the general or special sanction of the Registrar, a society may make loans to another society.

(2) Notwithstanding anything contained in sub-section (1), a society may make a loan to a depositor on th

S.60 Restrictions on other transactions with members

Section 60

Save as is provided in Ss.58 and 59, the transactions of a society with persons other than members shall be subject to such restrictions, if any, as may be prescribed.


S.61 Provident Fund

Section 61

(1) A society shall establish a contributory provident fund for the benefit of its employees, to which shall be credited all contributions made by the employees and the society in accordance with the rules or the Employees Provident Funds Act 1952 (Central Act 19 of 1952) whichever is more beneficial.

1[Provided that the contributory provident fund establishe

S.62 Gratuity

Section 62

The employees of a society shall be entitled to gratuity at such rates and on such conditions as prescribed.


S.63 Audit

Section 63

(1) The Registrar shall Audit or cause to be audited by a person authorized by him by general or special order in writing in this behalf, the accounts of every society at least once in each year.

(2) The audit under sub section (1) shall include an examination of over due debts, if any, the verification of the cash balance and securities, and a valuation of the assets an

S.64 Communication of defects in audit to societies

Section 64

(1) If the result of the audit held under S. 63 discloses any defects in the working of a society* the Registrar may bring such defects to the notice of the society and if the society is affiliated to another society also to the notice of that other society.

(2) The Registrar may, by order in writing, direct the society or its officers to take such action as may be specified in the order within the time mentioned therein to remedy the defects disclosed in the audit,


S.65 Inquiry by Registrar

Section 65

(1) The Registrar may, of his own motion or on the application of a society to which the society concerned is affiliated, by himself or by a person authorized by him order in writing hold an inquiry into the constitution, working and financial condition of the society.

(2) An inquiry of the nature referred to in sub-section (1) shall be held on the application of.--

<

S.66 Supervision and Inspection

Section 66

(1)      (a) The Registrar shall supervise or cause to be supervised by a person authorized by him by general or special order in writing in this behalf, the working of every society as frequently as he may consider necessary.

(b) The supervision under clause (a) may include an inspection of the books of the society.

Section 67

Where an inquiry is held under Section 65, or an inspection is made under S.66 on the application of a creditor, the Registrar may, by order, apportion the cost, or such portion of the cost, as he may deem fit, between the society to which the society concerned is affiliated, the society, the members or creditor demanding an inquiry or inspection, and the officers or former officers, of the society:

Provided that.--

(a) no order of a

S.68 Surcharge

Section 68

(1) If in the course of an audit, inquiry, inspection or the winding up of a society, it is found that any person, who is or was entrusted with the organization or management of such society or who is or has at any time been an officer or an employee of the society, has made any payment contrary to this Act and the rules or the bye-laws, or has caused any deficiency in the assets of the society by breach of trust or willful negligence or has misappropriated or fraudulently retained

S.69 Disputes to be referred to Registrar

Section 69

(1) Notwithstanding anything contained in any law for the time being in force, if a dispute arises.

(a) among members, past members and persons claiming through members, past members and deceased members; or

(b) between a member, past member, or person claim


Legal Commentary on Section 69 of the Kerala Co-operative Societies Act, 1969

Introduction

Section 69 of the Kerala Co-operative Societies Act, 1969, provides the statutory framework for the resolution of disputes arising in connection with the functioning of co-operative societies in Kerala. It establishes the jurisdiction of the Co-operative Arbitration Court and the Registrar to adjudicate various types of disputes, aiming to streamline dispute resolution within the cooperative sector and prevent unnecessary recourse to civil or other courts.

What does Section 69 Say?

Section 69 mandates that disputes relating to co-operative societies, including those concerning debts, demands, employment, election disputes, and service matters, shall be referred to the Co-operative Arbitration Court or the Registrar for adjudication. It specifies the types of disputes that fall under its purview and prescribes the procedure for reference, including the manner of filing and the timeline for passing awards.

Essential Ingredients

  • Scope of Disputes: Encompasses debts, demands, employment issues, election disputes, and other service-related matters.
  • Jurisdiction: Exclusively vested in the Co-operative Arbitration Court and the Registrar.
  • Referral Procedure: Disputes must be referred in writing, accompanied by relevant documents.
  • Time Frame: The Court is mandated to pass an award within a specified period (generally within one year).
  • Types of Disputes Covered: Claims for debts, demand dues, service disputes, election disputes, and other connected issues.
  • Exclusion of Civil Courts: Civil courts are barred from entertaining disputes covered under Section 69, unless exceptions apply.

Scope of Section

Section 69 broadly covers disputes arising in connection with the management, administration, and functioning of co-operative societies, including:- Financial claims (debts, demands)- Employment and service matters- Election disputes and inter-se seniority- Disputes regarding promotion, retirement, and disciplinary actions- Disputes involving co-sureties and third-party claims related to society transactions

Notably, the scope has been expanded through amendments to include all employment-related disputes, including those involving misappropriation or misconduct, provided they are connected with employment or service within the society.

Punishment for Section

Contravention of Section 69, such as failure to refer disputes to the prescribed forum, or filing suits in civil courts contrary to the statutory mandate, can attract penalties, including fines or other disciplinary measures under the Act. Additionally, if a dispute is improperly filed outside the prescribed forum, it may be dismissed, and parties may be liable for costs.

Legal Comments (with references)

Conclusion

Section 69 of the Kerala Co-operative Societies Act, 1969, provides a specialized, exclusive forum for resolving disputes related to the management, employment, and financial claims within cooperative societies. Its broad scope has been clarified and expanded through amendments, emphasizing the importance of adhering to prescribed dispute resolution mechanisms and discouraging recourse to civil courts in matters covered under the Act. Proper understanding and application of this section are crucial for effective governance of cooperative societies and for ensuring that disputes are resolved within the statutory framework.

S.70 Decision and award on disputes

Section 70

(1) The Registrar may, on receipt of the reference of a dispute under Section 69.--

(a) elect to decide the dispute himself; or

(b) transfer it for disposal to any person who has been invested by the Government with powers in that behalf; or

Section 71

(1) If the Registrar, after an inquiry has been held under section 65 or an inspection has been made under section 66 or on receipt of an application made by not less than three-fourths of the, members of a society, is of opinion that the society ought to be wound up, he may, after giving the society an opportunity of making its representation and in consultation with the financing bank to which the society is affiliated and the circle co-operative union, by order in writing direct

S.72 Liquidator

Section 72

(1) Where the Registrar has made an order under section 71 for the winding up of a society, he shall appoint a liquidator for the purpose and may fix his remuneration.

(2) The liquidator shall, on appointment take into his custody or under his control all the property, effects and actionable claims to which the society, is or appears to be entitled and shall take such st

S.73 Powers of liquidator

Section 73

(1) Subject to any rules made in this behalf, the whole of the assets of a society in respect of which an order of winding up has been made shall vest in the liquidator appointed under section 72 from the date on which the order takes effect and the liquidator shall have power to realize such assets by sale or otherwise.

(2) The liquidator shall also have power, subject

S.74 Cancellation of Registration of a Society

Section 74

When in respect of a society which has been ordered to be wound up under section 71 no liquidator has been appointed under section 72 after two months from the date of such order, or if an appeal has been filed against the order of winding up, from the date of confirmation of the order in appeal, or where the affairs of a society in respect of which a liquidator has been appointed under section 72 have been wound up or where the Registrar is satisfied that the final winding up of t

S.74(a) Insured co-operative banks

Section 74A

1CHAPTER XA

INSURED CO-OPERATIVE BANKS

Notwithstanding anything contained in this Act, in the case of an insured co-operative bank.--

Section 75

Notwithstanding anything contained in Chapter IX or any other law for the time being in force, but without prejudice to any other mode of recovery provided in this Act, the Registrar or any person subordinate to him empowered by the Registrar in this behalf, may, on the application of a society by order in writing, direct the payment of any debt or outstanding demand due to the society by any member or past member or deceased member, by sale of the property or any interest therein,

S.76 Execution of orders, etc

Section 76

Every order made under sub-section (2) of section 68 or under section 75 every decision or award made under section 70, every order made by the liquidator under section 73 and every order made by the Tribunal under section 82, section 84, section 85 or section 86 and every order made under section 83 shall, if not carried out-

(a) on a certificate signed by the Registra

S.77 Registrar or person empowered by him to be a civil court for certain purposes

Section 77

The Registrar or any person empowered by him in this behalf shall be deemed, when exercising any power under this Act for the recovery of any amount by the attachment and sale or by sale without attachment of any property, or when passing any orders on any application made to him for such recovery, to be a civil court for the purposes of Article 136 of the Schedule to the Limitation Act, 1963 (Central Act 36 of 1963).



Legal Comments

S.78 Attachment of property before award or order

Section 78

If the Registrar is satisfied on an application, report, inquiry, or otherwise, that any person with intent to delay or obstruct the enforcement of any order, decision or award that may be made against him under the provision of this Act.--

(a) is about to dispose of the whole or any part of his property ; or

Section 79

(1) All sums due from a society or from an officer or member or past member or deceased member of a society as such to the Government, including any costs awarded to the Government under any provision of this Act, may, on a certificate issued by the Registrar in this behalf be recovered in the same manner as arrears of public revenue due on land.

(2) Sums due from a soci

S.80 Officers, etc., of Co-operative Societies

Section 80

(1) The Government shall classify the societies in the State according to their type and financial position,

(2) The Government shall, in consultation with the State Co-operative Union, fix or alter the number and designation of the officers and servants of the different classes of societies specified in sub-section (1).

Section 80A

1[(1) The Government may, by notification in the Gazette, frame a Self Financing Pension Scheme for the establishment of a pension Fund for payment of pension to the employees of the societies in the manner provided therein and may appoint different dates for the application of the scheme to different classes of societies.

(2) The Pension fund established und

S.81 Tribunal

Section 81

1[(1) The Government shall constitute a single member Tribunal to exercise the powers and discharge the functions conferred on the Tribunal under this Act.

(2) A person shall not be qualified for appointment as a member of the Tribunal unless he is or has been holding the post of a District Judge in the State.

Section 81A

 

Every proceeding pending before the Tribunal immediately before the commencement of this Act shall stand transferred to and will be decided by the Tribunal constituted under this Act:

Provided that all such proceedings relating to orders passed by the

S.82 Appeals to Tribunal

Section 82

(1) Any person aggrieved by.--

(a) an order of the Registrar made under clause (ii) of sub-section (8) or clause (ii) of sub-section (9) of S. 14; or

(b) 1[xxx]

Section 83

(1) An appeal shall lie under this section against.

(a) an order of the Registrar made under sub-section (2) of S. 7 refusing to register a society; or

(b) an order of the Registrar made under sub-section (4) and (6) of S. 12 refusing to register an amendmen

S.84 Revision by Tribunal

Section 84

The Tribunal may call for and examine the record of any proceedings in which an appeal lies to it for the purpose of satisfying itself as to the legality or propriety of any decision or order passed and if in any case it shall appear to the Tribunal that any such decision or order should be modified, annulled or revised, the Tribunal may pass such order thereon as it may deem fit:

Section 85

(1) The Tribunal may, either on the application of the Registrar or on the application of any party, interested, review its own order in any ease and pass in reference thereto such order as it thinks fit:

Provided that no such application shall be entertained unless the Tribunal is satisfied that there has been a discovery of new and important matter or evidence which a

S.86 Interlocutory orders by Tribunal

Section 86

Where an appeal is made to the Tribunal under S.82 or where the Tribunal calls for the record of a case under S.84, it may, in order to prevent the ends of justice being defeated, make such interlocutory orders pending the decision of the appeal or revision as it may deem fit.


S.87 Powers of revision of Registrar and Government

Section 87

(1) The Registrar may of his own motion or on application call for and examine the record of any officer subordinate to him not being an officer exercising the powers of the Registrar and the Government may of their own motion or on application call for and examine the record of the Registrar including any officer exercising the powers of the Registrar, in respect of any proceeding, not being a proceeding in respect of which an appeal to the Tribunal is provided by S. 82, to satisf

S.88 Establishment of Circle Co-operative Unions

Section 88

1[(1) The Government shall, by notification in the Gazette, establish a Circle Co-operative Union for each circle in the State.

(2) Each Circle Co-operative Union shall consist of.--

(a) Eight members elected, in such manner as may be prescribed, b

S.89 Establishment of State Co-operative Union

Section 89

1(1) The Government shall, by notification in the Gazette establish a State Co-operative Union.

(2) The State Co-operative Union shall consist of*--

(a) a general body; and

Section 90

(1) Every co-operative society in the State shall, with a period of six months form the commencement of this Act, or within a period of six months from the date of its registration, whichever period expires later, get itself affiliated to the State Co-operative Union.

(2) The affiliation under sub-section (1) shall be in force for a period of one year from the date of af

S.91 Functions of State Co-operative Union

Section 91

(1) The functions of the State Co-operative Union shall be.--

(a) to organize, assist and generally develop co-operative societies;

(b) to carry on co-operative propaganda, and

Section 92

(1) Notwithstanding anything contained in this Act or in the bye laws of the Cochin Central Co-operative Institute Ltd., the Malabar Cooperative Institute Ltd., and the South Kerala Co-operative Union Ltd., all properties and all rights of whatever kind used, enjoyed or possessed by and all interests of whatever kind owned by or vested in or held by them and all liabilities legally subsisting against them shall on and from the date of commencement of this Act and subject to such di

S.93 Assets, liabilities etc., of State Union

Section 93

On a date to be notified by the Government after the formation of the State Co-operative Union under S.89, all properties and all rights of whatever kind used, enjoyed or possessed by and all interests of whatever kind owned by or vested in or held by and all liabilities legally subsisting against the Kerala State Co-operative Union Ltd., shall subject to such directions as may be issued by the Registrar, vest in the State Co-operative Union so formed and all the employees of the K

S.94 Offences

Section 94

(1) No person other than a 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 without the sanction of the Government:

Provided that nothing in this section shall apply in any area to the use by any person or his successor-in-interest of any name or title under which he carrie

S.95 Cognizance of offences

Section 95

No court inferior to that of a Magistrate of the first class shall try any offence under this Act and no prosecution shall be instituted under this Act without the previous sanction of the Registrar:

Provided that no such sanction shall be required in the case of an offence under sub-section (8) of Section 94.


S.96 Address of a society

Section 96

Every society shall have an address registered in accordance with the rules to which all notices and communications may be sent and shall sent to the Registrar notice of any change thereof within thirty days of the change.


S.97 Copy of Act, rules and bye-laws to be open to inspection

Section 97

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


S.98 Tribunal, Registrar, etc, to have certain powers of civil court

Section 98

(1) In exercising the functions conferred on it or him by or under this Act, the Tribunal, the Registrar, the arbitrator or any other person deciding a dispute and the liquidator of a society shall have all the powers of a civil court while trying a suit under Code of Civil Procedure, 1908 (Central Act 5 of 1908), in respect of the following matters, namely.--

(a) summo

S.99 Orders to be pronounced

Section 99

In cases where parties have been heard, the order, decision or award made or given by the Registrar or any officer or other person or a liquidator under this Act, shall be pronounced on the day on which the case is finally heard or on some future day of which due notice shall be given to the parties.


S.100 Bar of jurisdiction of courts

Section 100

No civil or revenue court shall have any jurisdiction in respect of any matter for which provision is made in this Act.


S.101 Power to exempt societies

Section 101

The Government, if they are satisfied that it is necessary to do so in the public interest, by general or special order for reasons to be recorded, exempt any society or any class of societies from any of the provisions of this Act or direct that such provisions shall apply to such society or class of societies subject to such modifications as may be specified in the order.


S.102 Register of members

Section 102

Any register or list of members or shares kept by any society shall be prima facie evidence of the following particulars entered therein.--

(a) the date on which the name of any person was entered in such register or list as a member:

(b) the date on which

S.103 Proof of entries in society's books

Section 103

(1) Notwithstanding anything contained in the Indian Evidence Act a copy of any entry in a book of a society regularly kept in the course of its business shall, if certified in such manner as may be prescribed, be received in any suit or legal proceedings as prima facie evidence of such entry and shall be admitted as evidence of the matters; transactions and accounts therein recorded in the same manner and to the same extent as the original entry itself is admissible.

S.104 Service of notice

Section 104

Every notice or order issued or made under this Act may be served on any person, by properly addressing it to the last known place of residence or business of such person preparing and posting by registered post a letter containing the notice or order and, unless the contrary is proved, such service shall be deemed to have been effected at the time at which the letter would be delivered in the ordinary course.


S.105 Acts of societies not to be invalidated by certain defects

Section 105

No act of a society or any committee or of any officer shall be deemed to be invalid by reason only of the existence of any defect in the constitution of the society or the committee or in the appointment or election of the officer or on the ground that such officer was disqualified for his appointment:

Provided that nothing in this section shall be deemed to apply to

S.106 Immunity for acts done or purporting to be done in good faith

Section 106

No suit, prosecution or other legal proceedings shall lie against any officer or the Government for anything which is in good faith done or purporting to be done under the provisions of this Act or the rules or the bye-laws.


S.107 Companies Act, 1956, not to apply

Section 107

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


S.108 Duties of Police Officer

Section 108

(1) It shall be the duty of every police officer to assist the Registrar or any person subordinate to the Registrar reasonably demanding his aid for the lawful exercise of any power vesting in the Registrar or such persons under this Act or any rule, or bye-law made thereunder.

(2) Any police officer who omits or refuses to perform any duty imposed on him under sub-sect

S.109 Power to make rules

Section 109

(1) The Government may, for the whole or any part of the State and for any class of societies, after previous publication, by notification in the Gazette, make rules 1[either prospectively or retrospectively by] 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

S.110 Repeal and savings

Section 110

(1) The Madras Co-operative Society Act, 1932 (vi of 1932). as in force in the Malabar district referred to in sub-section (2) of S.5 of the State Reorganization Act, 1956 (Central Act 37 of 1956) and the Travancore Cochin co-operative Societies Act, 1951 (X of 1952) are repealed.

(2) Notwithstanding the repeal of the Madras Co-operative Societies Act, 1932 and the Travancore-Cochin Co-operative Societies Act, 1951 and without prejudice to the provisions of Ss.4 and 23 of the interpretation and General Clauses Act, 1125 (VII of 1125).--

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