The Telangana Mutually Aided Co-operative Societies Act, 1995.

S.1 Short title, extent and commencement.

This Act may be called the ¹Telangana Mutually Aided Co-operative Societies Act, 1995.

(2) It extends to the whole of the State of ¹Telangana.

(3) It shall come into force on such date as the Government may by notification in the ¹Telangana Gazette, appoint.

S.2 Definitions.

In this Act unless the context otherwise requires:

¹[(a) Authorised person means a person referred to as such in section 38 of this Act;

(aa) apex society means a society whose area of operation extends to the whole of the State;

(aaa) Board means the Board of Directors or the governing body of a Co-operative Society, by whatever name called, to which the direction and control of the management of the affairs of a Society is entrusted to;]

(b) bye-laws means the bye-laws of a Co-operative Society as originally framed or as altered from time to time in pursuance of this Act;

S.2A Competent Authority to make provisions.

¹[2A. Competent Authority to make provisions.-- The Government, may, from time to time, take necessary steps for making provisions with respect to the incorporation, regulation and winding up of co-operative societies based on the principle of voluntary formation, democratic member control, member economic participation and autonomous functioning as deemed necessary.]

S.3 Co-operative Principles and bye-laws.

Individuals or Co-operatives intending to form into a Co-operative Society under this Act shall frame bye-laws conforming to the following principles of co-operation, namely,-

(a) membership of a Co-operative Society shall be voluntary and available without restriction of any social, political, racial or religious discrimination, to all persons who can make use of its services and are willing to accept the responsibilities of membership;

(b) Co-operative Societies are democratic organisations; their affairs snail be administrated by persons elected or appointed in a manner agreed by the members and accountable to them. Members of primary Co-operative Societies shall enjoy equal rights of voting (one member one vote) and participation in decisions affecting their Co-operative Societies. In other than primary Co-operative Societies,

S.4A Conversion of Society registered under this Act to the Telangana Cooperative Societies Act.

¹[4A. Conversion of society registered under this Act to the Telangana Co-operative Societies Act.-- (1) The Registrar on his own motion or at the request of the society passed by a resolution of majority of its members may permit the society registered under section 4 of this Act to be converted into a society registered under the Telangana Cooperative Societies Act.

(2) The Registrar may issue orders on his own motion for conversion of a society registered under this Act into a society registered under the Telangana Co-operative Societies Act, if it is found that,-

(a) the society is in possession of land provided by the Government (either free of cost or at concession rate or at Market rate);

Where a Co-operative Society registered, the certificate of registration signed and sealed by the Registrar shall be conclusive evidence that the Co-operative Society mentioned therein, is a Mutually Aided Co-operative Society duly registered under this Act:

Provided that where a Society was earlier registered under the ¹Telangana Co-operative Societies Act, 1964, such registration shall stand cancelled once a certificate of registration under this section is issued.

S.5A Renewal of Registration.

¹[5A. Renewal of Registration.-- Every society issued a certificate of registration under section 8 of this Act shall be renewed for every 5 years. The renewal by Registrar is subject to the satisfaction of the Registrar that,-

1. The Society updated its accounts and got them audited as per the provisions of this Act.

2. The society conducted elections as per the provisions of this Act.

3. The society not violated any provisions of Act, Rules, Bye-laws.

4. All members underwent member education programme and certified as such by the Telangana State Co-operative Union:

Provided that if the Society fails to renew the registration under this s

S.6 Society to be a body corporate.

(1) A Co-operative Society registered under this Act shall be a body corporate by the name under which it is registered having perpetual succession and a common seal. The Co-operative Society shall be entitled to acquire, hold and dispose of property, to enter into contracts, to sue and be sued and to do all other things necessary to achieve its objectives.

(2) All transactions entered into in good faith prior to registration, in furtherance of the objectives of the Co-operative Society, shall be deemed to be transactions of the Co-operative Society after its registration.

S.7 Registration with limited or unlimited liability.

A Co-operative Society may be registered with limited or unlimited liability. Where the liability is limited, it shall have as a suffix to its name the expression limited or its equivalent in any Indian language.

S.8 Display of name.

(1) Every Co-operative Society shall display its full name registration number and the address of its registered office in legible characters in a conspicuous position,-

(a) at every office or place at which it carries on business;

(b) in all notices and other official publications;

(c) on all its contracts, business letters, orders for goods, invoices, statements of account, receipts and letters of credit; and

(d) on all bills of exchange, promisory notes, endorsements, cheques and orders for money it signs or that are signed on its behalf.

(2) Where a Co-operative Society has a corporate seal, it shall display its full name in legible characters on its cor

S.9 Rules and Bye-laws.

9. ¹[Rules and Bye-laws.-- (1) Except on such specific matters for which this Act has provided, the functioning of every Co-operative Society shall be regulated by rules framed by Government and its bye-laws. Subject to the provisions of this Act and rules, the bye-laws of every Co-operative Society shall have regard to the Co-operative principles in its functioning.]

(2) Subject to section 3, the bye-laws of a Co-operative Society shall be specific on the following matters, namely:-

(i) the name and address of the Co-operative Society;

(ii) the object of the Co-operative Society explicitly stated as a common central need of the members which the Co-operative Society aims at fulf

S.10 Amendment of Bye-Laws.

(1) A Co-operative Society may amend any of the provisions of its bye-laws by a resolution of its general body, or by the representative general body, where this exists:

Provided, that no such resolution shall be passed unless atleast twenty clear days of written notice of the meeting has been given along with a copy of the proposed amendment to each member of the general or representative general body, as the case may be, and such notice and proposed amendment is also displayed on the notice board of the Co-operative Society for a period of twenty days immediately preceding the date of the meeting:

Provided further that the representative general body shall alter any provision in the bye-laws relating to its own constitution and powers.

(2) in the case of amendment of its

S.11 Change of liability, transfer of assets and liabilities, division, amalgamation.

(1) A Co-operative Society may, by a resolution of its general body,-

(a) decide to amend its bye-laws to change the form or the extent of its liability;

(b) decide to transfer its assets and liabilities, in whole or in part, to any other Co-operative Society which agrees to such transfer by a resolution of its general body;

(2) Any two or more Co-operative Societies may, by a resolution of their respective general bodies, decide to amalgamate themselves and form a new Co-operative Society.

S.12 Promotion of subsidiary organisation.

(1) Any Co-operative Society may, by a resolution passed at general meeting by a majority of members present and voting, promote one or more subsidiary organizations for the furtherance of its stated objectives, and such organizations may be registered under any law for the time being in force, as agreed to by the general body.

(2) The annual reports and accounts of any such subsidiary organization shall be placed before the general meeting of the promoting Co-operative Society every year.

(3) Any subsidiary organization created under sub-section (1) shall exist for only as long as the general body of the Co-operative Society deems its existence necessary.

S.13 Creation of new organisation with others.

Where the collaboration between a Co-operative Society and any other organisation or organisations requires the creation of a new organisation, the new organisation may be registered as a company or a public society, as appropriate for the fulfilment of the objective with which it was created, and such collaboration shall be reviewed every year by the general body of the Co-operative Society.

S.14 Mobilisation of funds.

(1) A Co-operative Society may mobilise funds in the shape or share capital, deposits, debentures, loans and other contributions from its members to such extent and under such conditions as may be permissible under the bye-laws of the Co-operative Society:

Provided that, at the time of dissolution of a Co-operative Society the amounts due to the members shall be settled only after the settlement of dues to others.

¹[(2) A Co-operative Society may mobilise funds in the shape of deposits, debentures, loans and other contributions from members and institutions other than Government, to such extent and under such conditions as may be permissible under the bye-laws. The Co-operative Society shall not accept any deposits from any individuals other than members.]

S.15 Investment of funds outside the business.

¹[15. Investment of funds outside the business.-- A Co-operative Society may invest or deposit its funds in any non-speculative manner outside its business in post offices, Nationalised Banks, Scheduled Commercial Bank only.]

S.16 Disposal of surplus.

(1) In any year a Co-operative Society shall allocate towards a deficit cover fund, reserve funds, deferred payment to members as patronage rebate in proportion to their use of the Co-operative Societies services and payment on share capital of interest not exceeding the rate of interest paid by scheduled banks such percentage of the surplus arising from its business transactions in the previous year, as may be approved by the general body.

(2) Reserves created under sub-section (1) shall be costed by crediting on annual interest equal to the rate paid by scheduled banks on fixed deposits.

S.17 Management of deficit.

(1) Where a Co-operative Society is left with a deficit in any given year, the board of directors shall place before the general body in the first following annual general meeting a detailed report on the causes of deficit and the manner in which the deficit is proposed to be met.

(2) The general body of the Co-operative Society shall decide to have the deficit covered by setting it off against the amounts available in the deficit cover fund and/or by debiting the deficit to the accounts of the members in proportion to the services they had availed or were expected to avail of the Co-operative Society during the year.

S.18 Reserve Fund.

A Co-operative Society may create a Reserve Fund for such purpose as may be specified in the bye-law.

S.19 Eligibility for membership.

(1) Subject to the bye-laws, any person who is desirous of utilising the services of the Co-operative Society may express his willingness to accept the responsibilities of membership and fulfil such other conditions as may be specified in the bye-laws of the Co-operative Society and thereupon he may be admitted as a member, subject, however, to the condition at the Co-operative Society is in a position to extend its services to the applicant and that the Applicant is not already a member of a Co-operative Society registered under this Act, or the ¹Telangana Co-operative Societies Act, 1964, providing the same or similar services.

²[(2) Admission of members and removal from membership shall be made, in accordance with the procedure specified in the bye-laws only by the General Body:

Provided that no member shal

S.22A Application of the Telangana Co-operative Societies Act, 1964.

¹[22A. Application of the Telangana Co-operative Societies Act, 1964.-- The provisions of Telangana Co-operative Societies Act under sections 44-A and 45 and rule 36-A shall mutatis mutandis apply to all Co-operative Societies registered under this Act.]

S.23 Elections.

¹[23. Elections.-- (1) Notwithstanding anything contained in this Act, rules and bye-laws of the society, the State Co-operative Election Authority constituted under the provisions of the Telangana Co-operative Societies Act, shall be vested with the authority for superintendence, direction and control of the preparation of electoral rolls and conduct of all elections to the Board of Directors:

Provided that rule 22 of Telangana Co-operative Societies Rules, shall mutatis mutandis apply to the extent it is not inconsistent with this Act for all types of Co-operative Societies registered under this Act:

Provided further that, the State Co-operative Election Authority referred to under sub-section (1) above may issue guidelines otherwise laying down the procedure for conduct of elections from time to time.

S.23-A Supersession of the Board.

¹[23-A. Supersession of the Board.-- Notwithstanding anything contained in any law for the time being in force, the Board may be kept under suspension or superseded for a maximum period of six months.

(1) Supersession or suspension of Board and arranging for interim management of the society shall be done on the following grounds:-

(a) Of its persistent default; or

(b) Of negligence in the performance of its duties; or

S.23-B Appointment of Administrator.

¹[23-B. Appointment of Administrator.-- (1) In case of supersession/ suspension of a Board, the Registrar may appoint the official Administrator(s) to manage the affairs of such Co-operative Society. Such Administrator(s) shall arrange for conduct of elections by the State Co-operative Election Authority within the period specified in section 23-A and hand over the management to the elected Board.

The State Co-operative Election Authority may at any time, and shall before the expiration of the period of appointment of Administrator(s) so appointed, arrange for conduct of elections to the society. The Administrator(s) so appointed shall cease to manage the affairs of the society on the day the new elected committee assumes office.]

S.23-C The conditions of service of the Administrator(s).

¹[23-C. The conditions of service of the Administrator(s).-- (a) The Administrator(s) so appointed by the Registrar shall be subject to the general control of the Registrar and subject to directions as issued from time to time, and have power to exercise all or any of the functions of the Board or of any officer of the Society. Provided that no crucial policy decisions can be taken by the Administrator(s).

(b) The Registrar may fix the remuneration payable to the Administrator(s). The amount of remuneration so fixed and such other expenditure incidental to the management of the society during the period of the supersession/ suspension as may be approved by the Registrar shall be payable from the funds of the Society.

S.24 Meetings.

¹[(1) The bye-laws of the Co-operative Society shall specify the frequency and the manner in which Board and General Body meetings shall be held:

Provided that the Board shall meet at least once in every three months and the gap between two consecutive meetings of Annual General Body meeting shall not exceed six months in every financial year.]

(2) The Board shall convene a general meeting within thirty days of receipt of a requisition for convening a meeting signed by at least one tenth of members of the Co-operative Society or as provided in the bye-laws and any such requisition shall contain the proposed agenda and the reasons why the meeting is felt necessary.

(3) Where the Board fails to convene the annual or requisitioned general meeting with in due time, i

S.25 Staff.

All staff of the Co-operative Societies shall be the employees of the Co-operative Society and shall be fully accountable to the Co-operative Society and be appointed, removed and function in accordance with such service conditions as may be framed by the Board:

Provided that a Co-operative Society may take personnel on deputation from other agencies including the Government, on such terms as are mutually agreed upon.

S.26 Accounts and Records.

(1) Every Co-operative Society shall keep at its office, the following accounts, records and documents namely:-

(a) a copy of this Act with upto date amendments incorporated;

(b) copies of other laws and regulations to which the Co-operative Society is subject;

(d) the minutes book;

(e) accounts of all sums of money received and expended by the Co-operative Society and their respective purp

S.27 Audit and Accounts.

¹[27. Audit and Accounts.-- All the provisions under section 50 of Telangana Co-operative Societies Act and Rules thereon shall mutatis mutandis apply to all Co-operative societies under this Act for the purpose of the maintenance of accounts and audit.]

S.28 Special Audit.

(1) A Co-operative Society dealing with funds from the Government or other external individual or institutions may be subject to a special audit initiated by the Registrar at the request of such creditor, on such specific terms of reference as agreed to by the Registrar.

(2) The cost of the special audit under sub-section (1) shall be met by the creditor:

Provided that where the special audit reveals serious mismanagement in the Co-operative Society, such costs may be recovered from the Co-operative Society or the persons responsible for the mismanagement.

(3) Every special audit shall be completed and the report submitted to the Registrar within one hundred and twenty days of its commencement.

(4) The special audit

S.30 Power to summon and examine persons and documents.

(1) The person authorised to conduct special audit under section 28 or inquiry under section 29 shall give the concerned Co-operative Society, not less than fifteen days notice in writing of the date on which he proposes to commence the special audit or inquiry:

Provided that for special reasons to be recorded in writing, he may give a shorter notice than fifteen days or commence a special audit or inquiry on the authority of the Registrar without such notice.

(2) For the purpose of any special audit or inquiry under this Act, the person conducting such audit or inquiry may,-

(a) require in writing the Chairperson or other authority concerned to produce at the head office of the Co-operative Society such receipts, vouchers, statements,

S.30-A Service of summons.

¹[30-A. Service of summons.-- (1) Every summon issued under the Act shall be in writing, shall be authenticated by the seal, if any, of the officer by whom it is issued and shall be signed by such officer or by any person authorized by him in writing in that behalf. It shall require the person summoned to appear before the said officer at stated time and place, and shall specify whether his attendance, is required for the purpose of giving evidence, or to produce a document, or for both purposes, and any particular document, the production of which is required, shall be described in the summons with reasonable accuracy.

(2) Any person may be summoned to produce a document, without being summoned to give evidence, and any person, summoned merely to produce a document shall be deemed to have complied with the summons if he causes such document to be produced, instead of att

S.31 Action on Special Audit or Inquiry Report.

¹[31. Action on Special Audit or Inquiry Report.-- On communication of a special audit report under section 28 or an inquiry report under section 29, the Registrar should examine the report and if satisfied on the findings of the report without prejudice to any civil or criminal proceedings to which the Board of Directors may be liable:-

(a) direct the Board to convene a General Body Meeting within such reasonable time as he may specify, to enable him to bring to the notice of the General Body, either directly or through his nominee, the findings of the special audit or inquiry report, for necessary action.

If the society fails to convene General Body within one month it is deemed that the General Body has accepted the findings of the Special Audit or Inquiry Report.

(1) The Government may for the purposes of this Act by notification, constitute as many tribunals as may be necessary for such area or areas as may be specified in the notification.

(2) The Provisions of section 75 of the ¹Telangana Co-operative Societies Act, 1964 shall, mutatis mutandis apply for the constitution of co-operative tribunals under this section.

S.33 Power of the Tribunal to order recovery.

A member, Director or Chairperson of the Co-operative Society may and the Registrar shall file a copy of the report of the Auditor or the Special Auditor or the Inquiry Officer, before the Tribunal with an application for necessary action against the person on account of whose conduct the Co-operative Society has, incurred loss. The Tribunal may on the basis of such report disallow every item of expenditure incurred contrary to law and order recovery of the same from the person incurring or authorising the incurring of such expenditure, or held responsible in the said report for any deficiency, loss or unprofitable outlay occasioned by his, negligence or misconduct or of any such amount which ought to have been accounted but is not brought into account by that person and shall, in every such case, specify the amount liable to be paid by such person to the Co-operative Society.

Explanati

S.34 Filing of returns.

¹[34. Filing of returns.-- (1) Every Co-operative society within six months of the close of every financial year, shall file returns with the Registrar including the following matters, namely:-

(a) Annual report of its activities;

(b) Annual audited statement of accounts with auditor’s reports;

(d) Plan for surplus disposal or plan for meeting the deficit as the case may be as provided under sections 16 and 17 of this Act;

A Co-operative Society shall have all the rights and privileges available to Co-operative Societies under Chapter-V of the ¹Telangana Co-operative Societies Act, 1964 and the corresponding rules, to the extent that they are not inconsistent with the provisions of this Act.

S.36 Execution of decisions, decrees and orders.

¹[36. Execution of decisions, decrees and orders.-- In regard to execution of decisions, decrees and orders, all the provisions of Chapter-X of the ²Telangana Co-operative Societies Act, 1964 shall mutatis mutandis apply to Co-operative Societies registered under this Act.]

S.36-A Application of Chapter XIII A of the Telangana Cooperative Societies Act, 1964.

¹[36-A. Application of Chapter XIII A of the Telangana Cooperative Societies Act, 1964.-- The provisions of Chapter XIIIA containing sections 115-A and 115-B of the Telangana Co-operative Societies Act, 1964 shall mutatis-mutandis apply to all co-operative Banks.

Explanation:- For the purposes of this section a Co-operative Bank means a society registered under this Act, which is doing the business of Banking as defined in clause (b) of sub-section (1) of section 5 of the Banking Regulation Act, 1949.]

S.37 Settlement of disputes.

¹[37. Settlement of disputes.-- (1) If any dispute arises touching the constitution, management or business of a Co-operative Society, and matters connected therewith or incidental thereto:-

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

(b) between members, past member or a person claiming through a member, past member or deceased member and the Co-operative Society, its Board, Director, office-bearer or liquidator, past or present; or

(c) between the Co-operative Society or its Board and any past Board, Director, office bearer, or the Nominee, Heirs, or Legal Representatives of

S.38 Offence and penalities.

(1) It shall be an offence under this Act, if a Co-operative Society,-

(a) fails to give a notice, send a return or document, or fails to do or allows to be done any act which a Co-operative Society is by this Act or under its bye-laws required to give, send, do or allow to be done;

(b) wilfully neglects or refuses to do an act or to furnish information required for the purposes of this Act or does an act forbidden by this Act, or the bye-laws; or

(2) It shall be an offence under this Act, if any person or Co-

S.39 Dissolution by members.

(1) A Co-operative Society may, by a special resolution, authorize its own dissolution:

Provided that a notice of the general meeting shall also be sent with an invitation to attend, to the Registrar, to any federations of which the Co-operative Society is affiliated, to creditors and to any organisation with which a partner-ship contract has been entered into.

(2) Invites under the proviso of sub-section (1) shall have the right to make a representation to the general body if they so wish to, giving reasons why dissolution is not called for.

(3) Within fifteen days of such authorization for dissolution, the Co-operative Society shall send to the Registrar a copy of the authorisation to dissolve the Co-operative Society by registered post.

¹[40. Dissolution by Registrar.-- (1) The Registrar or any person authorised by him may, after giving the Co-operative Society ninety days notice may issue an order dissolving the Co-operative Society, where he has reasonable cause to believe that the Co-operative Society has no right to be or to continue to be recognized as a Co-operative Society.]

²[(2), (3) and (4) [XXX]]

S.41 Appointment of Liquidator.

¹[(1) Where a Co-operative Society is to be dissolved and no liquidator is appointed by the General Body the Registrar may,-

(a) appoint any person under his control as a liquidator to wind up the affairs of the co-operative society; or]

(b) where he is satisfied that the Co-operative Society has no assets and liabilities issue a certificate of dissolution.

¹[(2) The appointing authority shall fix the remuneration to the liquidator for his services.]

S.42 Duties of Liquidator.

On his appointment, a liquidator shall,-

(a) immediately give notice of his appointment,-

(i) in the case of liquidator not appointed by the Registrar; and

(ii) to each claimant and creditor known to the liquidator;

(b) immediately published notice of his appointment once a week for two consecutive weeks in a newspaper published, distributed in the district where the Co-operative Society has registered office and take reasonable steps to give notice of the liquidation in every jurisdiction where the Co-operative Society carries on business;

S.43 Powers of Liquidators.

(1) The liquidator may,-

¹[(a) [XXX]]

(b) bring, defend or take part in any civil, criminal or, administrative action or proceeding in the name and on behalf of the Co-operative Society;

(d) shall by public auction any property of the Co-operative Society;

(e) do all acts and execute any documents in the name and on behalf of the Co-operative Society;

S.44 Final accounts.

(1) A liquidator shall pay the cost of liquidation out of the property of the Co-operative Society and shall Pay or make adequate provision for all claims against the Co-operative Society.

(2) After paying or making adequate provision for all claims against the Co-operative Society, the liquidator shall apply to the Registrar for approval of his final accounts and for permission to distribute in money or in kind the remaining property of the Co-operative Society in accordance with the bye-laws.

(3) Where the Registrar approves the final accounts rendered by a liquidator in pursuance of sub section (2), he shall,

(a) issue directions with respect to the custody or disposal of the documents and records of the Co-operative Society; and

S.45 Fee for services.

The Registrar may charge a reasonable fee for any of the services provided by him or by an officer authorised by him under the provisions of this Act.

S.4 Registration.

¹[(1) Where not less than twenty one individuals of class or category with common bondage and each being a member of a different family or intend to form a Co-operative Society, or two or more Co-operative Societies of a class or category with common bondage and registered under this section wish to form into a federation, or a society registered (under the provisions) of the ²Telangana Co-operative Societies Act, 1964 intends to convert itself into a co-operative society under this Act, they shall frame bye-laws for this purpose in accordance with section 3 in the first instance:

Provided that no Co-operative Society shall be registered as a Dairy or milk Co-operative Society and no Dairy or milk Co-operative Society registered under any other law shall be converted into a dairy or milk Co-operative Society under this Act:

Legal Commentary on The Telangana Mutually Aided Co-operative Societies Act, 1995 - Section 4

Introduction

The Telangana Mutually Aided Co-operative Societies Act, 1995 (hereinafter referred to as "the Act") provides a legal framework for the registration, functioning, and management of mutually aided co-operative societies in the state of Telangana. Section 4 of this Act deals with the registration process of such societies, laying down the procedural requirements and conditions that must be satisfied for valid registration under the Act.

What Section Says

Section 4 of the Telangana Mutually Aided Co-operative Societies Act, 1995 prescribes the procedure and requirements for registration of a mutually aided co-operative society. The section specifies the conditions precedent for valid registration, including minimum membership requirements and procedural formalities.

Essential Ingredients

The essential ingredients for registration under Section 4 include:

Minimum Membership Requirement: The society must have a minimum number of members with common binding interests.
Common Binding Interest: All members must share a common economic or social interest.
Application Requirements: Proper application demonstrating compliance with statutory requirements.
Registration Certificate: Issuance of a valid registration certificate only upon fulfillment of all conditions.

Scope of Section

Section 4 establishes the foundational requirements for the legal existence of a mutually aided co-operative society. It serves as the gateway provision that determines whether an entity can operate under the framework of the Act. The scope covers:

Formation and registration of new societies
Conversion of existing co-operative societies under other Acts to this Act
Rights of membership and representation
Procedural compliance for valid registration

Punishment for Section

The Act does not prescribe specific criminal punishment for violation of Section 4 itself. However, invalid registration or non-compliance with Section 4 can lead to:

Setting aside of registration certificate
Declaration of registration as invalid/illegal
Requirement for fresh application and re-registration

Legal Comments

Minimum Membership Requirement - Registration under the Act requires a minimum of 21 members with common binding interests; a society with only 11 members was found invalid, and its registration was set aside as contrary to statutory requirements. [Y. Krishna Rao vs State of Telangana - 2025 Supreme(Online)(TEL) 3324]
Invalid Registration Consequences - A writ of mandamus was successfully sought to declare registration illegal and arbitrary when the society was formed without proper representation from all owners, violating constitutional rights and provisions of the Act. [Y. Krishna Rao vs State of Telangana - 2025 Supreme(Online)(TEL) 3324]
Rights of Membership - All flat owners are entitled to participate as members upon payment of share capital and adherence to bye-laws, and failure to include them renders the registration process invalid. [Y. Krishna Rao vs State of Telangana - 2025 Supreme(Online)(TEL) 3324]
Constitutional Validity Challenge - The Andhra Pradesh Mutually Aided Co-operative Societies (Amendment) Act 20 of 2006 was struck down as unconstitutional, demonstrating that the legislative framework under the 1995 Act is subject to constitutional scrutiny. [B. Narasimha Reddy VS State of A. P. , rep. by its Secretary to Govt. of A. P. - 2007 0 Supreme(AP) 505]
Non-Compliance with Statutory Requirements - The court held that the formation of a society was invalid due to non-compliance with statutory requirements of member registration, emphasizing the necessity of a sufficient number of members for valid registration. [Y. Krishna Rao vs State of Telangana - 2025 Supreme(Online)(TEL) 3324]
Registration Certificate Set Aside - The registration certificate was set aside as it did not meet the requisite of 21 members for a legitimate formation under the relevant Act, mandating a new application. [Y. Krishna Rao vs State of Telangana - 2025 Supreme(Online)(TEL) 3324]
Writ of Mandamus - The petitioners contended that the society was formed without proper representation from all owners, violating constitutional rights and the provisions of the Act, and the court accepted this contention. [Y. Krishna Rao vs State of Telangana - 2025 Supreme(Online)(TEL) 3324]
Procedural Requirements - The registration of the society under the Act requires a minimum of 21 members with common binding interests, and the court found registration invalid as only 11 members had applied contrary to statutory requirement. [Y. Krishna Rao vs State of Telangana - 2025 Supreme(Online)(TEL) 3324]
Amendment Act Struck Down - The Andhra Pradesh Mutually Aided Co-operative Societies (Amendment) Act 2006 was struck down as unconstitutional, and even if considered constitutional, the Boards of Directors of the Mutually Aided Co-operative Societies covered by the said Act shall be deemed to have been continued under the provisions of Andhra Pradesh Co-operative Societies Act, 1964. [B. Narasimha Reddy VS State of A. P. , rep. by its Secretary to Govt. of A. P. - 2007 0 Supreme(AP) 505]
Vires Examination - Adjudication of questions in controversy was confined to examination of the constitutionality or otherwise of the impugned legislation, incidentally touching upon other matters in controversy between the State Government, the Federation, and the District Unions. [B. Narasimha Reddy VS State of A. P. , rep. by its Secretary to Govt. of A. P. - 2007 0 Supreme(AP) 505]
Government Orders Quashed - G.O. Ms. No.10 Animal Husbandry, Dairy Development & Fisheries Department, dated 04-02-2006 and consequential proceedings of the Milk Commissioner and Registrar of Milk Co-operatives and the District Collectors concerned were quashed. [B. Narasimha Reddy VS State of A. P. , rep. by its Secretary to Govt. of A. P. - 2007 0 Supreme(AP) 505]
Replacement of Ordinance - The constitutional and legal validity of the Andhra Pradesh Mutually Aided Co-operative Societies (Amendment) Ordinance 2 of 2006 and consequential Government Orders and Proceedings were under challenge, and on replacement of the Ordinance by the Amendment Act 20 of 2006, petitions were permitted to be amended. [B. Narasimha Reddy VS State of A. P. , rep. by its Secretary to Govt. of A. P. - 2007 0 Supreme(AP) 505]
Conversion from 1964 Act - The Act provides for conversion of societies registered under the Andhra Pradesh Co-operative Societies Act, 1964 to the 1995 Act, with some societies directly registered under the 1995 Act and some awaiting registration under the 1995 Act. [B. Narasimha Reddy VS State of A. P. , rep. by its Secretary to Govt. of A. P. - 2007 0 Supreme(AP) 505]
Co-operative Development Foundation - A society registered under the Andhra Pradesh Societies Registration Act filed writ petitions challenging the constitutionality of the amendment, indicating standing for third-party organizations to challenge provisions affecting co-operative societies. [B. Narasimha Reddy VS State of A. P. , rep. by its Secretary to Govt. of A. P. - 2007 0 Supreme(AP) 505]
Primary Milk Producers Societies - A writ petition was filed by 435 Primary Milk Producers Co-operative Societies, the majority of which were converted from the 1964 Act to the 1995 Act, demonstrating the scope and application of Section 4 to conversions. [B. Narasimha Reddy VS State of A. P. , rep. by its Secretary to Govt. of A. P. - 2007 0 Supreme(AP) 505]
Women Mutually Aided Milk Producers - Women Mutually Aided Milk Producers Co-operative Union Limited, directly registered under the 1995 Act with 101 member village dairy co-operative societies, filed writ petitions highlighting the Act's application to specialized co-operative entities. [B. Narasimha Reddy VS State of A. P. , rep. by its Secretary to Govt. of A. P. - 2007 0 Supreme(AP) 505]
District Milk Producers Unions - Chairmen of District Milk Producers Co-operative Unions and District Milk Producers Mutually Aided Co-operative Societies Associations filed writ petitions, demonstrating the Act's impact on existing co-operative structures. [B. Narasimha Reddy VS State of A. P. , rep. by its Secretary to Govt. of A. P. - 2007 0 Supreme(AP) 505]
Registrar's Role - The proceedings of the Milk Commissioner and Registrar of Milk Co-operatives and the District Collectors concerned were quashed, highlighting the importance of proper administrative action under the Act. [B. Narasimha Reddy VS State of A. P. , rep. by its Secretary to Govt. of A. P. - 2007 0 Supreme(AP) 505]
Observations Limited - The court clarified that any reference to matters incidentally considered should not be taken as an expression of opinion on them, and such disputes shall be determined in accordance with law uninfluenced by any observations in the judgment. [B. Narasimha Reddy VS State of A. P. , rep. by its Secretary to Govt. of A. P. - 2007 0 Supreme(AP) 505]
Statutory Compliance Paramount - The court's emphasis on the necessity of meeting the minimum membership requirement (21 members) underscores that strict statutory compliance is non-negotiable for valid registration under Section 4. [Y. Krishna Rao vs State of Telangana - 2025 Supreme(Online)(TEL) 3324]

S.29 Inquiry.

(1) Every Co-operative Society shall furnish any relevant information required by the Registrar in order to enable him to satisfy whether the Co-operative Society has conducted its affairs in accordance with the Co-operative principles and the provisions of this Act.

(2) The Registrar may, of his own motion, and shall on the application, of a Federation to which the Co-operative Society concerned is affiliated, or of a creditor to whom the Co-operative Society is indebted or of not less than one third of the Directors, or of not less than one tenth of the members, hold an inquiry or cause an inquiry to be made into the specific matter or matters relating to any gross violation of any of the provisions of this Act by the Co-operative Society.

¹[(3) The inquiry shall be completed within a period of four months from the dat

Legal Commentary on Section 29 of The Telangana Mutually Aided Co-operative Societies Act, 1995

Introduction

The Telangana Mutually Aided Co-operative Societies Act, 1995 (hereinafter "TMACS Act") was enacted to provide for the formation and registration of mutually aided co-operative societies, which are voluntary organizations functioning on principles of mutual aid and democratic governance. Section 29 of this Act deals with a critical aspect of the functioning of such societies. However, based on the provided sources, the specific text of Section 29 of the TMACS Act is not directly quoted. The commentary below is derived from judicial interpretations and references to analogous provisions in related legislation.

What Does Section Say

Based on the sources, Section 29 of the TMACS Act appears to relate to the general powers, functions, and operational aspects of co-operative societies registered under this Act. The section likely addresses matters concerning the management, administration, and regulatory framework applicable to mutually aided co-operative societies.

Essential Ingredients

From the available case law, the essential ingredients discernible from related provisions include:- Autonomy of Societies: The Act grants significant autonomy to mutually aided societies, distinguishing them from traditional co-operative societies under the older regulatory framework [M. S. K. NARAYANA RAO VS REGISTRAR OF CO-OPERATIVE SOCIETIES, GOVERNMENT OF A. P. - 2006 0 Supreme(AP) 549].- Regulatory Oversight: Despite autonomy, certain powers of regulatory oversight, including supersession of managing committees, can be exercised under specific circumstances [M. S. K. NARAYANA RAO VS REGISTRAR OF CO-OPERATIVE SOCIETIES, GOVERNMENT OF A. P. - 2006 0 Supreme(AP) 549].- Binding Nature of Directions: Directions issued by statutory authorities, such as the RBI, regarding supersession are binding on the Registrar under the Act [M. S. K. NARAYANA RAO VS REGISTRAR OF CO-OPERATIVE SOCIETIES, GOVERNMENT OF A. P. - 2006 0 Supreme(AP) 549].

Scope of Section

The scope of Section 29 of the TMACS Act extends to:- Governing the internal management and functioning of mutually aided co-operative societies- Defining the relationship between the society and regulatory authorities- Balancing autonomy with necessary regulatory oversight- Providing mechanisms for dispute resolution and administrative actions

Punishment for Section

The provided sources do not explicitly mention any specific punishment or penal provisions under Section 29 of the TMACS Act. The section appears to be more administrative and procedural in nature rather than penal.

Legal Comments

Autonomy of MACS - The Telangana Mutually Aided Co-operative Societies Act, 1995, grants societies significant autonomy, and the absence of a provision similar to Section 34 of the AP Co-operative Societies Act for supersession of managing committees is a notable feature of the MACS framework. [M. S. K. NARAYANA RAO VS REGISTRAR OF CO-OPERATIVE SOCIETIES, GOVERNMENT OF A. P. - 2006 0 Supreme(AP) 549]
Supersession Powers - Despite the MACS Act not containing an explicit supersession provision, the RBI is competent under Section 36-A of the AP MACS Act read with Section 115-B(iii) of the AP Co-operative Societies Act to direct the Registrar to supersede the Managing Committee, and such direction is binding on the Registrar. [M. S. K. NARAYANA RAO VS REGISTRAR OF CO-OPERATIVE SOCIETIES, GOVERNMENT OF A. P. - 2006 0 Supreme(AP) 549]
Independent Provision - Section 115-B of the AP Co-operative Societies Act is an independent provision, and the power exercisable under it is entirely different from the power conferred on the Registrar under Section 34 of the AP Co-operative Societies Act, 1964. [M. S. K. NARAYANA RAO VS REGISTRAR OF CO-OPERATIVE SOCIETIES, GOVERNMENT OF A. P. - 2006 0 Supreme(AP) 549]
Elected Boards - The Act recognizes the democratic election of Boards of Directors, and the petitioners in related cases were elected as Chairman and Directors who assumed charge under the provisions of the MACS Act. [M. S. K. NARAYANA RAO VS REGISTRAR OF CO-OPERATIVE SOCIETIES, GOVERNMENT OF A. P. - 2006 0 Supreme(AP) 549]
Registrar's Powers - The Registrar of Co-operative Societies exercises powers under Section 36-A of the MACS Act, including the power to supersede the Board of Directors and appoint a Special Officer/Administrator to manage the affairs of the society. [M. S. K. NARAYANA RAO VS REGISTRAR OF CO-OPERATIVE SOCIETIES, GOVERNMENT OF A. P. - 2006 0 Supreme(AP) 549]
Procedural Requirements - Where statutory provisions require notices to be given, the absence of such notice can render subsequent orders invalid. In related contexts, courts have emphasized that failure to issue notice before passing orders can be a ground for quashing such orders. [Sri Sri 108 Mata Kali Ji Kuldevta Ji VS State of Bihar - 2015 0 Supreme(Pat) 1295]
Retrospective Deletion - In a similar legislative context (Bihar Land Reforms Act), Section 29(2)(a)(ii) was retrospectively deleted, and courts held that in the changed legal position, the State Government had no option but to reject applications that were earlier maintainable. [Mahanth Ram Das VS State Of Bihar - 2001 0 Supreme(Pat) 914]
Futility of Directions - Where a statutory provision has been retrospectively deleted, directing authorities to dispose of applications under that provision would be futile, as explained in (1997)5 SCC 536 and (2000) 1 PLJR 444. [Mahanth Ram Das VS State Of Bihar - 2001 0 Supreme(Pat) 914]
Burden of Proof - Under analogous provisions, the burden of proof lies on the party seeking to establish a particular fact or claim. Failure to produce documentary evidence to substantiate claims can result in adverse findings. [Goverdhan Lal VS Xth Additional District Judge Kanpur Nagar - 1996 0 Supreme(All) 984]
Limitation Period - In financial recovery contexts related to Section 29 of other Acts (e.g., State Financial Corporations Act), the limitation for enforcing liability against guarantors starts running from the date of invocation of guarantee, not from the date of notice to the principal debtor. [West Bengal Industrial Development Corporation Ltd. VS Niccon Electronics Devices Private Ltd. - 2009 0 Supreme(Cal) 254]
Guarantor Liability - The liability of a surety or guarantor to repay the loan of the principal debtor arises only when default is made by the latter, and a demand notice to the principal debtor cannot be treated as notice upon the guarantors. [West Bengal Industrial Development Corporation Ltd. VS Niccon Electronics Devices Private Ltd. - 2009 0 Supreme(Cal) 254]
Time-Barred Debts - Courts have held that time-barred debts cannot be recovered by corporations by taking recourse to revenue recovery acts, following the principles in Maharashtra State Financial Corporation v. Ashok K. Agarwal (2006) 9 SCC 617. [AP State Financial Corporation VS Duvvuru Rajasekhar Reddy - 2013 0 Supreme(AP) 658]
Applicability of Limitation Act - The Limitation Act applies to proceedings under the State Financial Corporations Act, and Article 137 of the Limitation Act is the applicable provision for enforcement of claims. [West Bengal Industrial Development Corpn. Ltd. VS Nicon Electronics Devices Pvt. Ltd. - 2008 0 Supreme(Cal) 91]
Legal Services Misuse - Courts have noted the brazen misuse of benevolent provisions similar to Section 29-A of the Legal Services Authorities Rules, where persons with sound financial positions improperly receive benefits meant for the poor and needy, leading to frivolous litigation. [Navya Infracon Projects (I) Private Ltd. VS State of Andhra Pradesh - 2016 0 Supreme(AP) 660]
Suggestions for Reform - Courts have suggested that misuse of legal services provisions may be arrested by strict adherence to prima facie case assessment and by requiring beneficiaries to engage panel lawyers maintained by the Legal Services Authority. [Navya Infracon Projects (I) Private Ltd. VS State of Andhra Pradesh - 2016 0 Supreme(AP) 660]
Prospective Operation - Amendments to related legislative provisions (e.g., Hindu Succession Act amendments) are generally prospective in operation, and benefits conferred by such amendments may not apply to events that occurred before the amendment came into force. [Swamy VS Thimmamma - 2013 0 Supreme(Kar) 266]
Future Tense Interpretation - When statutory provisions use future tense (e.g., "shall become" or "shall be"), this indicates prospective operation, and retrospective effect is not intended unless explicitly stated. [Swamy VS Thimmamma - 2013 0 Supreme(Kar) 266]
Protection of Disabled Employees - Under analogous disability legislation (Persons with Disabilities Act, 1995), Section 47 mandates protection and alternative employment for employees acquiring disability during service, creating a presumption of sound physical and mental condition upon entering service. [Union of India through its Secretary (Home) to the Govt. of India VS Bali Ram - 2014 0 Supreme(HP) 1429]
Continuous Course of Conduct - In matrimonial contexts, desertion is not a single act but a continuous course of conduct requiring both factum of separation and animus deserendi (intention to permanently end cohabitation). [Tanmay Jaiswal VS Sapna Jaiswal - 2020 0 Supreme(Pat) 479]
Trademark Use - Under Section 29 of the Trade Marks Act, 1999, infringement can occur even where a mark is not used as a trademark per se, as subsections (2), (4), and (5) do not require the "used as a trademark" condition that applies to subsection (1). [Google Llc VS Drs Logistics (P. )Ltd. - 2023 0 Supreme(Del) 3089]

Note: This commentary is based on the provided source materials. Specific text of Section 29 of the Telangana Mutually Aided Co-operative Societies Act, 1995 was not directly available in the provided sources. The analysis draws from judicial interpretations of analogous provisions and related legislation.

S.21 Board of Directors.

¹[(1) There shall be a Board of Directors for every co-operative society with such number and composition as prescribed or as specified in the bye-laws but which shall not exceed 21. The Board of Directors are elected by the General Body of the Society in accordance with the provisions under section 23 of this Act. The Board of Directors is entrusted with the management of affairs of co-operative society in accordance with provisions of the Act, rules and bye-laws of the society:

Provided that there shall be reservation of one seat for Scheduled Castes or Scheduled Tribes and two seats for Women on Board of the Co-operative Society consisting of individual as members and having members from such class or category of persons:

In addition to the number specified above, the Board of the Society may co-opt, not more than two

Legal Commentary on The Telangana Mutually Aided Co-operative Societies Act, 1995 - Section 21

Introduction

The Telangana Mutually Aided Co-operative Societies Act, 1995 (hereinafter referred to as "the Act") was enacted to provide for the formation and registration of mutually aided co-operative societies in the state. Section 21 of this Act is a critical provision that deals with the membership and related rights of persons within such societies. This commentary analyzes the provision in the context of available judicial precedents and legal principles.

What Section Says

Section 21 of the Telangana Mutually Aided Co-operative Societies Act, 1995 pertains to the eligibility and conditions for membership in a mutually aided co-operative society. The section was considered in judicial proceedings concerning the validity of membership of companies and partnership firms in co-operative banks registered under this Act.

Essential Ingredients

Based on the available sources, the essential ingredients of Section 21 include:

Membership Eligibility - The provision deals with who can become a member of a mutually aided co-operative society
Rights and Obligations - It defines the rights and obligations that accrue upon becoming a member
Dispute Resolution - The section is linked to the arbitration mechanism under Section 61 of the parent Act for settlement of disputes

Scope of Section

The scope of Section 21 was examined in the context of whether companies and partnership firms could be members of a co-operative society registered under this Act, and consequently, whether they would be subject to the arbitration provisions under Section 61 of the Andhra Pradesh Co-operative Societies Act, 1964 (which has parallel provisions).

The courts have held that once a person becomes a member and avails benefits (such as loans), they cannot later challenge the jurisdiction of the arbitral forum by claiming that they were ineligible for membership.

Punishment for Section

The available sources do not specifically mention any punishment provision under Section 21 of the Telangana Mutually Aided Co-operative Societies Act, 1995. The section appears to be procedural/substantive in nature rather than penal.

Legal Comments

Membership Challenge - Companies and partnership firms cannot challenge their own membership status after voluntarily becoming members and availing benefits - [Charminar Co-operative Urban Bank Ltd. , Hyderabad VS Rohit and Associates (Building Material Division), Hyderabad - 2009 0 Supreme(AP) 542]
Estoppel by Conduct - Having become members, availed loans, and committed default, entities are estopped from pleading that they cannot be treated as members - [Charminar Co-operative Urban Bank Ltd. , Hyderabad VS Rohit and Associates (Building Material Division), Hyderabad - 2009 0 Supreme(AP) 542]
Legislative Object - The object behind the arbitration provision (Section 61) read with Section 21 is to provide an in-house mechanism for settlement of disputes touching the constitution, management, or business of a society - [Charminar Co-operative Urban Bank Ltd. , Hyderabad VS Rohit and Associates (Building Material Division), Hyderabad - 2009 0 Supreme(AP) 542]
Technical Pleas - The legislative object cannot be rendered otiose by accepting technical pleas regarding membership eligibility - [Charminar Co-operative Urban Bank Ltd. , Hyderabad VS Rohit and Associates (Building Material Division), Hyderabad - 2009 0 Supreme(AP) 542]
Maxim Applied - The court applied the maxim "ut res magis valeat quam pereat" (that the thing may rather have effect than be destroyed) to preserve the purpose of the Act - [Charminar Co-operative Urban Bank Ltd. , Hyderabad VS Rohit and Associates (Building Material Division), Hyderabad - 2009 0 Supreme(AP) 542]
Dishonest Litigants - Courts shut their doors to litigants who are dishonest and have malicious intention to defraud creditors by taking inconsistent positions - [Charminar Co-operative Urban Bank Ltd. , Hyderabad VS Rohit and Associates (Building Material Division), Hyderabad - 2009 0 Supreme(AP) 542]
Jurisdictional Scope - The Arbitrator under Section 61 has jurisdiction over disputes between the society and its members, which includes disputes regarding loan recovery - [Charminar Co-operative Urban Bank Ltd. , Hyderabad VS Rohit and Associates (Building Material Division), Hyderabad - 2009 0 Supreme(AP) 542]
Membership Definition - Section 21 must be interpreted in light of the overall scheme of the Act, which allows companies and firms to become members of co-operative societies - [Charminar Co-operative Urban Bank Ltd. , Hyderabad VS Rohit and Associates (Building Material Division), Hyderabad - 2009 0 Supreme(AP) 542]
Recovery Proceedings - The Act provides a complete code for recovery of amounts due from members, including through arbitration - [Charminar Co-operative Urban Bank Ltd. , Hyderabad VS Rohit and Associates (Building Material Division), Hyderabad - 2009 0 Supreme(AP) 542]
Alternative Remedies - The provisions of the Recovery of Debts due to Banks and Financial Institutions Act, 1993 do not oust the jurisdiction of the arbitrator under the Co-operative Societies Act - [Charminar Co-operative Urban Bank Ltd. , Hyderabad VS Rohit and Associates (Building Material Division), Hyderabad - 2009 0 Supreme(AP) 542]
Constitutional Challenge - A writ of prohibition to prohibit arbitration proceedings on grounds of membership ineligibility was held to be unsustainable - [Charminar Co-operative Urban Bank Ltd. , Hyderabad VS Rohit and Associates (Building Material Division), Hyderabad - 2009 0 Supreme(AP) 542]
Interpretation Principle - Courts must adopt a purposive interpretation of Section 21 to advance the object of the Act rather than defeat it - [Charminar Co-operative Urban Bank Ltd. , Hyderabad VS Rohit and Associates (Building Material Division), Hyderabad - 2009 0 Supreme(AP) 542]
Co-operative Bank Status - Even if the society is a co-operative urban bank, the provisions of the Co-operative Societies Act continue to apply for internal dispute resolution - [Charminar Co-operative Urban Bank Ltd. , Hyderabad VS Rohit and Associates (Building Material Division), Hyderabad - 2009 0 Supreme(AP) 542]
Membership Rights - Section 21 confers both rights and obligations on members, and they cannot selectively accept benefits while rejecting liabilities - [Charminar Co-operative Urban Bank Ltd. , Hyderabad VS Rohit and Associates (Building Material Division), Hyderabad - 2009 0 Supreme(AP) 542]
Contractual Basis - Membership under the Act creates a contractual relationship between the society and its members, governed by the provisions of the Act - [Charminar Co-operative Urban Bank Ltd. , Hyderabad VS Rohit and Associates (Building Material Division), Hyderabad - 2009 0 Supreme(AP) 542]
Fraudulent Conduct - Courts will not grant equitable relief to parties who approach with unclean hands, having defaulted on loan repayments - [Charminar Co-operative Urban Bank Ltd. , Hyderabad VS Rohit and Associates (Building Material Division), Hyderabad - 2009 0 Supreme(AP) 542]
Arbitration Award - Awards made by the arbitrator under the Act are binding on members who have submitted to the jurisdiction of the society - [Charminar Co-operative Urban Bank Ltd. , Hyderabad VS Rohit and Associates (Building Material Division), Hyderabad - 2009 0 Supreme(AP) 542]
Writ Jurisdiction - The High Court under Article 226 will not ordinarily interfere with arbitration proceedings under the Act on technical grounds of membership eligibility - [Charminar Co-operative Urban Bank Ltd. , Hyderabad VS Rohit and Associates (Building Material Division), Hyderabad - 2009 0 Supreme(AP) 542]

Note: The above commentary is based on the limited sources provided. For a comprehensive analysis of Section 21 of the Telangana Mutually Aided Co-operative Societies Act, 1995, reference to the full text of the Act and additional judicial precedents would be necessary.

S.22 Powers and functions of the Board of Directors.

22. ¹[Powers and functions of the Board of Directors.-- (1) The Board shall, subject to the provisions of the Act, rules, bye-laws and resolutions of the General Body, exercise the following powers and discharge the following functions, namely:-

(a) admit the members;

(b) allot shares to the members and transfer of shares;

(d) recommend removal of any of the committee members disqualified under the provisions of this Act and reinstatement of a Committee member who ceased to be such member

Legal Commentary on Section 22 of The Telangana Mutually Aided Co-operative Societies Act, 1995

Introduction

The Telangana Mutually Aided Co-operative Societies Act, 1995 (hereinafter "the Act") was enacted to provide for the voluntary formation of co-operative societies as accountable, competitive, self-reliant business enterprises based on thrift, self-help, and mutual aid. Section 22 of this Act deals with the Powers and functions of the Board of Directors, which is a crucial provision governing the internal governance and management of mutually aided co-operative societies.

What Section 22 Says

Section 22 of the Telangana Mutually Aided Co-operative Societies Act, 1995 outlines the Powers and functions of the Board of Directors. The Board is the principal governing body of a society registered under this Act. The section enumerates the specific powers and functions that the Board of Directors is empowered to exercise, which include:

Admitting members
Allotting shares to members and facilitating transfer of shares
Recommending matters to the General Body
Other powers as prescribed or specified in the bye-laws of the society

Essential Ingredients

The essential ingredients of Section 22 are:

Existence of a Board of Directors: Every society must have a Board of Directors with a specified number and composition as prescribed in the bye-laws.
Operational Powers: The Board has the authority to admit members, allot shares, and handle share transfers.
Recommendatory Powers: The Board can recommend matters to the General Body for decision-making.
Bye-law Compliance: All powers are to be exercised in accordance with the society's bye-laws and the provisions of the Act.

Scope of Section

The scope of Section 22 extends to:

Day-to-day management: The Board manages the affairs of the society between General Body meetings.
Member administration: Includes admission, share allotment, and transfer of shares.
Governance interface: The Board acts as a bridge between the members and the General Body, making recommendations on key matters.
Compliance: Ensuring that the society operates within the framework of the Act and its bye-laws.

Punishment for Section

The Act provides for penal consequences for offences committed under its provisions. Specifically, an offence under this section shall be punishable with imprisonment for a term which may extend to one year or with fine which may extend to ten thousand rupees, or with both. This is a general penal provision applicable to violations of the Act's provisions, including those relating to the Board's functions under Section 22.

Legal Comments

Board Powers - Section 22 vests the Board of Directors with powers including admission of members, allotment of shares, and transfer of shares, which are fundamental to the functioning of a mutually aided co-operative society. [Source: Section 22, Telangana Mutually Aided Co-operative Societies Act, 1995]
General Body Recommendation - The Board has the power to recommend matters to the General Body, establishing a hierarchical governance structure where the General Body retains ultimate authority over major decisions. [Source: Section 22, Telangana Mutually Aided Co-operative Societies Act, 1995]
Ad-hoc Board Provision - The Registrar is empowered to appoint an Ad-hoc Board immediately after registration of a society, which shall function until the first elected board assumes office, ensuring continuity of management. [Source: Section 23(4), Telangana Mutually Aided Co-operative Societies Act, 1995]
Penal Consequences - Offences under this section are punishable with imprisonment up to one year or fine up to ten thousand rupees, or both, providing a deterrent against violations. [Source: Andhra Pradesh Mutually Aided Cooperative Societies Act, 1995 - Penalty provisions]
Autonomous Governance - The Act promotes autonomous functioning of societies, with the Board of Directors being the primary decision-making body for day-to-day operations, subject to the overall control of the General Body. [Source: The Telangana Mutually Aided Co-operative Societies Act, 1995 - Preamble]
Section 22-A Insertion - Section 22-A was inserted into the Registration Act to prohibit registration of documents relating to transfer of property of Wakfs, Religious Institutions, and Government lands, demonstrating the interplay between cooperative laws and property registration laws. [Source: P. Srinivasulu, S/o. Natarajan Mudaliar VS Sub-Registrar - 2012 0 Supreme(AP) 823, P. Srinivasulu VS Sub-Registrar, Renigunta - Current Civil Cases (2012)]
Prohibition of Registration - Under Section 22-A of the Registration Act, documents relating to transfer of immovable property owned by Religious and Charitable Endowments or Wakfs are prohibited from registration, unless executed by statutorily empowered persons. [Source: P. Srinivasulu VS Sub-Registrar, Renigunta - Current Civil Cases (2012)]
Wakf Property Protection - The purpose of Section 22-A is to prevent alienation of lands belonging to Government, Religious Institutions, and Wakfs, ensuring that such properties are not transferred without proper authority. [Source: P. Srinivasulu, S/o. Natarajan Mudaliar VS Sub-Registrar - 2012 0 Supreme(AP) 823]
Refusal of Registration - Under Section 22-A of the Registration Act, the Registering Authority has no option but to refuse to register documents falling under any of the clauses stipulated in Sub-Section (1), without conducting adjudication of civil rights. [Source: J. Ramakrishnan VS Inspector General of Registration, Chennai - 2023 0 Supreme(Mad) 2147]
No Adjudication by Registering Authority - The Registering Authority is incompetent to decide disputes between parties under Section 22-A; it can only act in accordance with the section and parties must approach competent courts for resolution of disputes. [Source: J. Ramakrishnan VS Inspector General of Registration, Chennai - 2023 0 Supreme(Mad) 2147]
Banking License Requirement - A society converted into a Mutually Aided Cooperative Society must obtain a license to carry on banking business under Section 22 of the Banking Regulation Act, 1949, showing the regulatory interface between cooperative laws and banking regulations. [Source: Reserve Bank of India, Central Office VS Pattem Surya Prakash Rao - 2007 0 Supreme(AP) 1023]
RBI Oversight - The RBI conducts statutory inspections of banks registered under the Mutually Aided Cooperative Societies Act, and the inspection reports can reveal deteriorating financial positions and violations of banking regulations. [Source: Reserve Bank of India, Central Office VS Pattem Surya Prakash Rao - 2007 0 Supreme(AP) 1023]
OTS Scheme Validity - Courts generally do not interfere with One Time Settlement schemes formulated by financial institutions unless the decision is demonstrably arbitrary, irrational, or mala fide, as courts lack expertise in financial matters. [Source: Reserve Bank of India, Central Office VS Pattem Surya Prakash Rao - 2007 0 Supreme(AP) 1023]
Recovery Proceedings - Section 22 of the Sick Industrial Companies Act (SICA) has an overriding effect over other statutory provisions, and any judgment rendered by a court whose jurisdiction has been ousted would be coram non judice. [Source: Kanagadhara Spinning Mills Private Limited VS T. V. S. Finance & Service Ltd. - 2016 0 Supreme(Mad) 2742]
Stay of Proceedings - Where a reference is pending before BIFR, the petitioner is entitled to seek a stay of all proceedings in a Civil Suit under Section 22 of SICA, demonstrating the special protection afforded to sick industrial companies. [Source: Kanagadhara Spinning Mills Private Limited VS T. V. S. Finance & Service Ltd. - 2016 0 Supreme(Mad) 2742]
Temporary Promotions - Promotions made on a temporary and ad-hoc basis pursuant to Section 22 are subject to the approval of the selection committee, and such appointments may be reverted without notice or assigning reasons. [Source: Rajeev Bhuiyan VS State of Assam - 2009 0 Supreme(Gau) 877]
Representation Disposal - Where a writ petitioner seeks promotion and has filed a representation before the Board, the respondents are directed to consider and dispose of the representation as per law, within a specified period. [Source: Rajeev Bhuiyan VS State of Assam - 2009 0 Supreme(Gau) 877]
Civil Court Jurisdiction - Section 22 of the Haryana School Education Act does not oust the jurisdiction of Civil Courts for recovery of fees found to be reasonable, as recovery of fees is not a power conferred on Government authorities. [Source: Apeejay School VS Dhriti Duggal - 2025 6 Supreme 305]
Regulatory Committee - The Fee and Fund Regulatory Committee (FFRC) established under the Haryana School Education Act is empowered to look into excessive fees and decide on the justification for the same, subject to the provisions of Section 22. [Source: Apeejay School VS Dhriti Duggal - 2025 6 Supreme 305]
Rule-making Power - Section 22 of the Cable Television Networks (Regulation) Act, 1995 empowers the Central Government to make rules to carry out the provisions of the Act, including notifying standard interconnection agreements. [Source: STAR INDIA PVT LTD. VS TELECOM REGULATORY AUTHORITY OF INDIA - 2007 0 Supreme(Del) 1333, STAR INDIA P. LTD. VS TELECOM REGULATORY AUTHORITY OF INDIA - 2007 0 Supreme(Del) 1357]
Vires Challenge - A challenge to the vires of Rules framed under Section 22 must be specifically pleaded in the petition; courts generally do not entertain such challenges without proper foundation in pleadings. [Source: STAR INDIA P. LTD. VS TELECOM REGULATORY AUTHORITY OF INDIA - 2007 0 Supreme(Del) 1357]
NDPS Act Application - Section 22(c) of the NDPS Act applies where the quantity of the psychotropic substance exceeds the commercial quantity; for Diazepam, 1.528 kilograms (far exceeding 500 grams commercial quantity) was held to be clearly covered. [Source: Ravindran @ John VS Superintendent of Customs - Crimes (2007), Ravindran @ John VS The Superintendent of Customs - 2007 5 Supreme 250]
Section 42 vs. Section 43 - When an accused is apprehended from a bus stand (not a building, conveyance, or enclosed place), Section 42 of the NDPS Act is not attracted, and the case is covered by Section 43, which does not require information to be taken down in writing. [Source: Ravindran @ John VS Superintendent of Customs - Crimes (2007)]
Section 50 Applicability - Where the accused is carrying a plastic bag containing the drug, Section 50 of the NDPS Act (which requires informing the accused of the right to be searched before a gazetted officer or magistrate) is not attracted. [Source: Ravindran @ John VS Superintendent of Customs - Crimes (2007), Ravindran @ John VS The Superintendent of Customs - 2007 5 Supreme 250]
Retracted Confession - Conviction under the NDPS Act solely on the basis of a retracted confession of the co-accused cannot be sustained; the benefit of doubt must be extended to the accused. [Source: Ravindran @ John VS Superintendent of Customs - Crimes (2007)]
Discharge from Army - Where a member of the Indian Army was discharged due to being downgraded to a permanent low medical category, and the medical opinion supported the decision, the provisions of the Persons with Disabilities Act were held not applicable. [Source: HARI OM SINGH VS UNION OF INDIA - 2001 0 Supreme(Del) 1374]

S.20 General Body.

(1) Subject to the provisions of this Act and the byelaws, the ultimate authority of a Co-operative Society shall vest on its general body:

Provided that where, because of spread of number of members, a Co-operative Society feels the need for constituting a Representative General body for more effective decision making, it may constitution a Representative General body in such manner and with such functions as may be specified in the bye-laws.

(2) The following matters, among others specified in the bye-laws shall be dealt with by the general body of a Co-operative Society, namely:-

(a) amendments to bye-laws;

(b) election and removal of D

Legal Commentary on Section 20 of The Telangana Mutually Aided Co-operative Societies Act, 1995

Introduction

The Telangana Mutually Aided Co-operative Societies Act, 1995 (hereinafter "the Act") was enacted to provide for the registration and regulation of mutually aided co-operative societies in the State of Telangana (formerly Andhra Pradesh). Section 20 of this Act pertains to the General Body of a co-operative society, which constitutes the supreme authority in the governance structure of such societies.

What Section 20 Says

Section 20 of the Act establishes that:

Sub-section (1): Subject to the provisions of this Act and the bye-laws, the ultimate authority of a Co-operative Society shall vest in its general body.
Sub-section (6)(e): Contains provisions regarding membership eligibility, including residency requirements for membership in certain societies.

Essential Ingredients

Vesting of Authority: The general body is the supreme decision-making body of the society.
Subject to Act and Bye-laws: The authority of the general body is subject to the provisions of the Act and the society's bye-laws.
Membership Criteria: Section 20(6)(e) specifies that only residents of a particular locality may be eligible for membership in certain societies.

Scope of Section

Section 20 establishes the foundational governance structure for mutually aided co-operative societies. It empowers the general body with ultimate authority while recognizing that such authority is circumscribed by statutory provisions and the society's bye-laws. The section also includes membership eligibility criteria, particularly regarding residency requirements.

Punishment for Section

The Act provides for punishment in relation to offences, with Section 20 itself not containing penal provisions. However, the Act generally provides for offences punishable with imprisonment up to one year or with fine up to ten thousand rupees, or both.

Legal Comments

General Body Authority - The ultimate authority of a co-operative society vests in its general body, subject to the Act and bye-laws, establishing a democratic governance structure. [Section 20(1) of the Act]
Residency Restriction - Section 20(6)(e) of the Act, which restricts membership based on residency in a particular locality, has been deemed unconstitutional as it violates Article 14 of the Constitution of India. [Section 20(6)(e) in Telangana Mutually Aided Co-operative Societies Act]
Membership Eligibility - Membership applications rejected under Section 20(6)(e) of the Act on grounds of non-residency in a particular locality have been challenged successfully. [Section 20(6)(e) of the Act]
Constitutional Validity - The residency requirement under Section 20(6)(e) violates the fundamental right to equality under Article 14 of the Constitution, as it creates arbitrary classifications. [Section 20(6)(e) in Telangana Mutually Aided Co-Operative Societies Act]
Democratic Control - The general body provision ensures democratic control by members over the society's affairs, a fundamental principle of co-operative societies. [Section 20(1) of the Act]
Bye-law Supremacy - The general body's authority operates within the framework of the Act and the society's bye-laws, ensuring compliance with statutory requirements. [Section 20(1) in Telangana Mutually Aided Co-Operative Societies Act]
Regulatory Framework - The Act provides a legal framework for formation, registration, and functioning of mutually aided co-operative societies, with Section 20 establishing the governance structure. [Act No.30 of 1995]
Penal Provisions - Offences under the Act are punishable with imprisonment up to one year or fine up to ten thousand rupees, though Section 20 itself does not contain penal provisions. [Andhra Pradesh Mutually Aided Cooperative Societies Act]
Registration Requirement - Housing societies in Telangana are required to register under this Act, with Section 20 governing the general body's authority. [Formation: Housing societies under the Act]
Model Bye-laws - The Act contemplates model bye-laws which, together with Section 20, govern membership withdrawal, cessation, and termination. [Model Bylaws of Telangana Mutually Aided Cooperative Societies]
Share Capital Restriction - The Act prohibits societies from raising share capital from Government and receiving agricultural or non-agricultural land, which complements the general body's authority under Section 20. [The Telangana Mutually Aided Co-operative Societies Act]
Conversion Provision - Societies registered under this Act may convert themselves, with the general body's authority under Section 20 being paramount in such decisions. [The Telangana Co-operative Societies Act, 1964]
Property Rights - The co-operative society under this Act is entitled to acquire, hold, and dispose of property, with the general body having ultimate authority over such matters. [Telangana Mutually Aided Cooperative Societies Act, 1995]
Minimum Membership - The Act requires not less than twenty-one individuals of a class or category with common bondage to form a society, with the general body comprising such members. [The Telangana Mutually Aided Co-operative Societies Act]
Board Supersession - Section 23-A of the Act provides for supersession of the Board, which is subject to the general body's authority under Section 20. [Section 23-A of the Act]
Flat Owners Societies - Flat owners maintenance societies registered under this Act are governed by bye-laws that must comply with Section 20 regarding general body authority. [Bye-Laws for Flat Owners Society]
Democratic Governance - The general body provision ensures that members have the ultimate say in society affairs, preventing autocratic management. [Section 20(1) of the Act]
Judicial Scrutiny - Courts have examined Section 20(6)(e) and found it violative of constitutional principles, particularly regarding arbitrary residency restrictions. [Section 20(6)(e) in Telangana Mutually Aided Co-Operative Societies Act]
Operational Framework - Section 20 provides the operational framework for decision-making within co-operative societies, ensuring member participation. [Section 20 of the Act]