(Act No. 16 of 2002)

[Received the assent of the President on the 3rd day of October, 2002]

An act to consolidate and amend the law relating to co-operative societies in the State of Rajasthan.

Be it enacted by the Rajasthan State Legislature in the Fifty Second Year of the Republic of India, as follows :-

 

 

Read full Act

Ch.1 Chapter I

Preliminary

1. Short title, commencement and extent. (1) This Act may be called the Raj Co-operative Societies Act. 2001.

(2) It extends to the whole of the State of Rajasthan.

(3) It shall come into force on such date as the State Government may, [by] [Notification No F. 12 (15) Coop./2000 dated 13-11-2002 Published in Rajasthan Gazette E.O. Part 4 (ga) dated 13-11-2002 Page 433 w.e.f. 14-11-2002.] notification in the Official Gazette, appoint.

2. Definitions. - In this Act, unless the context otherwise requires.

(a) [ "Apex Co-operative Bank" means an apex society which is the federal body of the Central Co-operative Banks in the State an is engaged in the business of banking:] [Added by Notification No F. 2(15) Vidhi/22010 dated 3-4-201(1 w.e.f. 16-10-2009.]"

(aa) "Apex society" means a society whose core object is to provide facilities for the operation of other societies affiliated to it and whose area of op

ch.2 Chapter II

Incorporation

3. Promotion of Co-operative movement. - It shall be policy of the Government to encourage and promote the co-operative moment in the State and to take such step in this direction. as may be necessary and desirable.

4. Registrar. (1) The Government may appoint a person to be the Registrar of Co-operative Societies for the State and may appoint other person to assist him.

(2) The Government may, by general or special order, and subject to such conditions as it may think fit to impose, confer on any person appointed to assist the Registrar, or may delegate to any officer of any society, all or any of the powers of Registrar under this o Act. The Government may also, by notification, direct that all or any of the powers exercisable by it under this Act or the rules may be the exercised by the Registrar or such other officer, and subject to such conditions, if any, as may be specified in the notification. Every person. conf

ch.3 Chapter III

Members of Co-operative Societies and their Rights and Liabilities

15. Membership. (1) The following may be admitted as members of a co-operative society, namely:

(a) Any citizen of India, who (i) has attained age of 18 years;

(ii) is of sound mind;

(iii) is not disqualified from contracting by any law for the time being in force and applicable to him;

(iv) is desirous to utilize the services of the society; and (v) is ready to accept the responsibilities and liability associated with such memberships;

(b) any other co-operative society;

(c) the State Government; or

(d) any other person, body or local authority, as may be prescribed:

Provided that an individual shall not be eligible to the membership of a financing bank other than a Land Development Bank or such class of co-operative society as may be prescribed in this behalf:

Provided further that in a society exclusively formed for

Ch.4 Chapter IV

Management of Co-operative Societies

24. Final authority in a co-operative society. (1) The final authority in a co-operative society shall, subject to the provisions of this Act and the rules, vest in the general body of the members:

Provided that nothing in this section shall affect any powers conferred on a committee or any officer. of a co-operative society by the rules or the bye-laws.

(2) Notwithstanding anything contained in sub-section (1), where the size, spread or type of membership of a society requires a representative body of delegates to take decisions effectively, a smaller body called the Delegate General Body, elected from the members of the society in the prescribed manner, may be constituted in accordance with the bye-laws of the society. Such smaller body may exercise all the powers of the general body.

25. Annual general meeting. (1) Every co-operative society shall call, (within the time} in the manner pr

Ch.5 Chapter V

Election

32. [ Election of Co-operative Society. [Substituted by Notification Act No. 31 of 2015, dated 7.10.2015.] - The election to the committee of a co-operative society shall be conducted as per the provisions of this Act and the rules and bye-laws made thereunder.]

32. State Co-operative Election Authority.- (1) The State Government shall, by notification in the Official Gazette, appoint an officer of the State Government, as the State Co-operative Election Authority, in such manner, as may be prescribed, and may appoint such other officers and staff to assist such Authority, as it may deem fit. (2) The State Co-operative Election Authority, herein -after, referred to as the Authority in this Chapter, 'shall be an independent agency for conducting elections of the committees of the co-operative societies in the State under the provisions of this Act and the rules made thereunder.

(3) For the purpose of this Chapter, the Zonal R

Ch.6 Chapter VI

Privileges of Co-operative Societies

38. First charge of co-operative society on certain assets. (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,-

(a) any debt or outstanding demand owing to a co-operative society by any member, past member, deceased member, or a person who executed guarantee thereof for repayment of such debt or demand shall be a first charge upon the crops and other agricultural produce, cattle, fodder for cattle, agricultural or industrial implements, or machinery, raw materials for manufacture and any finished products manufactured from such raw materials, or the property or interest in the assets created out of loan/debt, or property mortgaged as security, belonging to such member, past member or the guarantor/surety thereof or forming part of the assets of the deceased mem

Ch.7 Chapter VII

State Aid to Co-operative Societies

44. Financial partnership or aid of the Government. (1) Notwithstanding anything contained in any law for the time being in force, the Government may (a) subscribe directly to the share capital of a co-operative society:

(b) subject to the appropriate bye-laws, provide moneys to an apex society for purchase of shares in other co-operative societies, subjects to the condition that no such shares in any co-operative society shall be purchased except with the previous approval of the Government in each case;

(c) give loan or make advances to co-operative societies:

(d) guarantee the repayment of principal and payment of interest on debentures issued by a co-operative society.

(e) guarantee the repayment of share capital of a co-operative society and dividends thereon, at such rates as may be specified by the Government:

(f) guarantee the repayment of principal and payment of inter

Ch.8 Chapter VIII

Properties and Fund of Co-operative Societies

47. Funds not to be divided. - No part of the funds other than the net profits of a co-operative society shall be paid by way of bonus or dividend or otherwise distributed among the members. Provided that a member may be paid remuneration, allowances or honoraria on such scale as may be laid down by the bye-laws for any services rendered by him to the co-operative society.

47 A. [ Prudential norms. [Added by Notification No F. 2(15) Vidhi/2/2010 dated 3-4-2010 w.e.f. 16-10-2009.]

- A Primary agricultural credit society shall follow such prudential norms including Capital to Risk Weighted Assets Ratio as may be specified by the Registrar from time to time in consultation with the National Bank.]

48. disposal of net profits. (1) A co-operative society shall, out of its net profits in any year, (a) transfer to the reserve funds, such twenty five percent of its profits and within such

Ch.9 Chapter IX

Audit, Inquiry and Surcharge

54. Audit. (1) For the audit of co-operative societies, the registrar shall prepare three panels of auditors, viz departmental auditors, certified auditors, and Chartered Accountants as defined in the Chartered Accountants Act, 1949 (Central Act No. 38 of 1949), in the manner prescribed, and shall, from one of such panels which the society may, within the time prescribed therefor, opt, appoint the auditor.

(2) [ Every society shall cause its accounts to be audited by an auditor or auditing firm appointed by the committee of the society from amongst the panel approved under sub-section (4):

Provided that where the committee of the society fails to appoint an auditor or auditing firm within the time stipulated therefor, the Registrar may appoint an auditor or auditing firm for the audit of the society from the panel approved under sub-section (4):

Provided further that no auditor or auditing firm sha

Ch.10 Chapter X

Settlement of Disputes

58. Disputes which may be referred to arbitration. (1) Notwithstanding anything contained in any law for the time being in force, if any dispute touching the constitution, management, or the business of a co-operative society arises-

(a) among members, past members and persons claiming through members, past members deceased members or (b) between a member, past member or a person claiming through a member, past member or deceased member and the society, its committee or any officer, agent or employee of the society, or (c) between the society or its committee and any past committee, any officer, agent or employee, or any past officer, past agent or past employee or the nominee, heirs or legal representatives of any deceased officer, deceased agent or deceased employee of the society, or (d) between the society. and any other co-operative society, or (e) between the society and the surety of a member, past member, or a

Ch.11 Chapter XI

Winding up and Dissolution of Co-operative Societies

61. Winding up of co-operative societies. (1) Where, on the basis of an audit conducted under section 54 or an enquiry held under section 55 or on receipt of an application made with a special resolution passed at a special general meeting called for the purpose, [or otherwise] [Inserted by Rajasthan Act No. 11 of 2016, dated 25.4.2016.]it comes to the knowledge of the Registrar that-

(a) the number of members or the amount of the paid up share capital in the society has reduced below the minimum level which is essential for registration of such class of society; or

(b) the society has not commenced to work even after two years of its registration, or has fulfilled the objects for which it was constituted or has ceased to work in accordance with its core objectives [or has repeatedly been violating the provisions of the Act or the rules or its bye-laws] [Inserted by Rajasthan Act N

Ch.12 Chapter XII

Land Development Banks

67. Application of Chapter to Land Development Banks. - This Chapter shall apply to -

(a) co-operative banks advancing loans other than short term and medium term loans, for the purposes herein enumerated, (hereinafter referred to as -"Land Development Banks") that is to say -

(i) land improvement and productive purposes;

(ii) the erection, rebuilding or repairing of houses for agricultural purposes;

(iii) the purchase or acquisition of agricultural lands by tenants or agriculturists by way of allotment or otherwise under the Rajasthan Tenancy Act, 1955 (Act No. 3 of 1955), the Rajasthan Land Revenue Act, 1956 (Act No. 15 of 1956) or the Rajasthan Colonisation Act, 1954 (Act No. 24 of 1954) and rules made thereunder;

(iv) the liquidation of debts under the Rajasthan Relief of Agricultural Indebtedness Act, 1957(Act No. 28 of 1957) or any corresponding law for the time being in force in any

Ch.13 Chapter XIII

Execution of Awards, Decrees, Orders and Decisions

99. Enforcement of charge. - Notwithstanding anything contained in Chapter X, 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 empowered by the Registrar in this behalf, may, on his own motion or on the application of a co-operative society, make an order directing the payment of any debt or outstanding demand due to the society by any member or past member or deceased member or by guarantor thereof, by sale. of the property or any interest therein, which is mortgaged to the society or is subject to a charge under section 38 or section 39.

Provided that no order shall be made under this section unless the member, past member or the nominee, heir or legal representative of the deceased member or guarantor thereof, or any person who has any interest in or charge upon the mortgaged property or an

Ch.14 Chapter XIV

Appeals, Revision and Review

104. Appeal to the Registrar and the State Government. (1) An appeal may lie, under this section, to the State Government against an order or decision passed by the Registrar and to the Registrar against an order or decision passed by an officer subordinate to the Registrar or by any other person, to whom powers of the Registrar have been conferred or delegated under sub-section (2) of section 4.

Explanation - for the purpose of this sub-section, Registrar shall not include any other person except the Registrar appointed by the State Government under sub-section (1) of section 4 and an Additional Registrar exercising the appellate powers of the Registrar under this section.

(2) Any person aggrieved by -

(a) an order of the Registrar mane under sub-section (2) of section 6 refusing registration of a co-operative society, (b) an order of the Registrar made under sub-section (3) of section 10 refusing

Ch.15 Chapter XV

Offences and Penalties

108. Prohibition against misuse of the word 'Co-operative'. (1) No person other than a co-operative society shall trade or carry on business under any name or title of which the word 'co-operative' or its equivalent in any Indian language is a Part.

(2) Every person contravening the provisions of sub-section (1) shall on conviction, be punished with fine which may extend to five thousand rupees and in the case of a continuing offence, with a further fine or rupees one hundred for each day on which the offence is continued after conviction therefor.

109. Offences and punishment. (1) It shall be an offence under this Act, if -

(a) any person transfers any property in contravention of sub-section (2) of section 38; or

(b) any member or his guarantor or surety or the nominee, heir or legal representative of deceased member alienates the whole or any part of any property specified in the declaration in

Ch.16 Chapter XVI

Miscellaneous

111. Co-operative education and training. (1) It shall be the duty of each co-operative society to arrange co-operative education and training relating to basic needs of the institution, for its officers, personnel and members. and for this purpose it shall provide for-sufficiently in its annual budget.

(2) The Registrar shall prepare working plan for co-operative education and training for various co-operative institutions of the State in coordination with federal bodies, if any. and the Rajasthan State Co-operative Union. The Registrar shall implement such plan through co-operative union of the State or any such education and training institution, which has expertise/resources for implementing such plan.

112. Insolvency of members. - Notwithstanding anything contained in any law relating to insolvency for the time being in force, the dues of society from a member, in insolvency proceedings against him, shall rank in o

Sch.1 SCHEDULE-A

(See Section 5)

Co-operative Principles

The co-operative principles are guidelines by which co-operatives put their value into practice.

1 st. Principal: Voluntary and Open Membership Co-operatives are voluntary organisations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political, or religious discrimination.

2 nd. Principal: Democratic Member Control Co-operatives are democratic organisations controlled by their members, who actively participate in setting their policies and making decisions. Men and Women serving as elected representatives are accountable to membership. In primary co-operatives members have equal voting rights (one member, one vote) and co-operatives at other levels are also organised in a democratic manner.

3 rd. Principle: Member Economic Participation Members contribute to, and democratica

Sch.2 SCHEDULE-B

(See Section 8)

Subject Matter of Bye-Laws 

(1) The bye-laws of a co-operative society shall provide for the following matters. namely :-

(a) the name and address of the society;

(b) the area of its operation;

(c) the objects of the society;

(d) the manner in which funds may be raised and the maximum share-capital which a single member may hold;

(e) the nature and extent of the liability of the members;

(f) the extent to which the society may borrow funds and the rates of interest payable on such funds;

(g) the entrance and other fees to be collected form members;

(h) the purposes for which its funds may be applied;

(i) the terms, qualifications and conditional of admission of members and their rights and liabilities;

(j) in the case of credit societies -

(i) the maximum loan admissible to a members;

(ii) the maximum rates of interest of lo