MADHYA PRADESH CO-OPERATIVE SOCIETIES ACT, 1960

MADHYA PRADESH/CHHATTISGARH CO-OPERATIVE SOCIETIES ACT, 1960 (No. 17 of 1961) C O N T E N T S Pg. No. List of amending Acts 20 Sections - CHAPTER I - Preliminary Preamble 24 1. Short title, extent and commencement. 24 2. Definitions. 24 CHAPTER II - Registration 3. Registrar and other officers. 36 4. Societies which may be registered. 38 5. Registration of societies with limited or 38 unlimited liability. 6. Conditions of registration. 38 7. Application for registration. 40 8. Power of Registrar to decide certain questions. 40 9. Registration. 40 10. Classification of societies. 42 11. Amendment of byelaws of a society. 44 12. Power to direct amendment of byelaws. 44 13. Change of name. 46 14. Certain certificates to be conclusive evidence. 46 15. Change of liability of society from limited to 46 unlimited or vice-versa. 16. Reorganization of societies. 48 16-A. Collaboration by Societies. 54 16-B. Partnership of societies. 54 16-C. Government's power to make scheme of 56 reorganization in the public interest (for Chhattisgarh only) 17. Compromise or arrangement for repayment 56 of liabilities and reconstruction of societies. 17-A. Action and liability of Banks under 58 moratorium. 17-B. Liability of new Bank to repay to the Deposit 60 Insurance Corporation. 18. Cancellation of registration. 60 18-A. De-registration of Societies. 60 CHAPTER III Members, their rights, liabilities and privileges 19. Persons who may become members. 62 19-A. Disqualification of member. 66 19-AA.Disqualification for membership of committee 68 19-B. Effect of subsequent disabilities. 68 2 19-C. Expulsion of members. 68 20. Nominal members. 70 21. No rights of membership to be exercised till 72 due payments are made. 22. Votes of members. 72 23. Manner of exercising vote. 74 24. Restrictions on holding of share capital by a 74 member. 25. Restrictions on transfer of shares or interest. 76 26. Transfer of interest on death of member. 76 27. Share or deposit or interest not liable to 76 attachment. 28. Rights of members to see books, etc. 78 29. Liability of a past member or the estate of a 78 deceased member. 30. Insolvency of members. 78 CHAPTER IV Duties, Privileges, Property and Funds of Societies 31. Societies to be bodies corporate. 80 32. Address of society and display of name. 80 33. Register of members. 80 34. Proof of entries in society's books. 82 34-A. Societies to give pass books to member. 82 35. Exemption from compulsory registration 84 of instruments. 36. Borrowings. 84 37. Restrictions on loans. 86 37-A. Society not to recover or receive interest 86 greater than the principal from members belonging to Scheduled Caste and Scheduled Tribes. (for M.P. only) 37-A. Society not to recover or receive interest 88 greater than the principal. (for Chhattisgarh only) 38. Restrictions on other transactions with 88 non-members. 39. Charge and set-off in respect of share or 88 interest of members. 40. Prior claim of society on certain assets. 90 41. First charge of co-operative societies on 92 certain assets. 41-A. Right of society to acquire and dispose of 94 immovable property. 42. Deduction from salary to meet society's 96 claim in certain cases. 43. Funds and profits. 96 43-A. Appropriation of profits. 98 43-B. Liability for deficit. 100 44. Investment of funds. 100 45. Grant of State aid to societies. 102 3 46. Employees' Provident Fund. 102 47. Power to direct affiliation to Federal Society. 104 47-A. Apex Society. 104 CHAPTER V - Management of Societies 48. Final authority in society. 106 48-A. Disqualifications for holding specified office. 112 48-B. Representatives and Delegates. 114 48-C. Powers of committee. 114 49. Annual General Meeting. 116 49-A. Omitted. 49-B. Annulment of proceedings of society by 122 successor committee. 49-C. Government's powers to give directions in 122 public interest, etc. 49-D. Registrar's power to give directions to make 124 regulations. 49-E. Appointment of Managing Director and Chief 126 Executive Officer in certain circumstances. 50. Special General Meeting. 128 50-A. Disqualification for being candidate on voter 128 for election to committee or representative or delegate of society. 50-AA.Omitted. 51. Validation of acts. 130 52. Power to appoint Government nominees. 130 52-A. Omitted. 52-B. Representation of women members on committee. 132 53. Supersession of committee. 132 53-A. Taking over of charge. 140 53-B. Power of Registrar to remove an Officer of a 142 society in certain circumstances. 54. Appointment of Managers, Secretaries and 142 other officers. 55. Registrar's power to determine conditions of 144 employment in societies. 56. Registrar's power to enforce performance of 144 obligation. 57. Registrar's power to seize records, etc. 146 57-A. Taking possession of record and property. 146 CHAPTER VI Audit, Inquiry, Inspection and Supervision 58. Audit and Audit fee. 148 58-A. Audit Board. 150 58-B. Procedure for making good losses caused to 150 a society. 59. Inquiry. 152 59-A. Duty of certain persons to assist enquiry. 154 60. Inspection of books of society. 154 4 61. Rectification of defects. 156 62. Costs of inquiry. 156 63. Omitted. 63-A. Expenditure on proceedings, etc. 158 CHAPTER VII - Disputes and Arbitration 64. Disputes. 158 65. Limitation. 160 66. Settlement of dispute. 162 67. Procedure for settlement of disputes and power 162 of Registrar, his nominee or board of nominee. 68. Attachment before award. 164 CHAPTER VIII - Liquidation 69. Winding up of Societies. 164 69-A. Winding up of Co-operative Bank. 166 69-B. Reimbursement of Deposit Insurance 166 Corporation in case of Insured Bank. 70. Appointment of Liquidator. 168 70-A. Control of liquidator. 168 71. Powers of Liquidator. 168 72. Disposal of surplus assets of liquidated 172 societies. CHAPTER VIII - A (Applicable to M.P. only) Special Provisions for Co-operative Housing Societies 72-A. Application of Chapter. 172 72-B. Member's entitlement for plot, house and 172 amenities and the liability of the cost. 72-C. Restriction on membership of housing society. 176 72-D. Offences. 176 72-E. Penalties for offences. 176 CHAPTER IX Offences and Penalties 73. Prohibition of use of work 'Co-operative'. 178 74. Offences. 178 75. Penalties for offences. 180 76. Cognizance of offences. 182 CHAPTER X (Applicable to M.P. only) Constitution of Tribunal 77. Madhya Pradesh State Co-operative Tribunal. 182 77-A. Review. 186 77-B. Tribunal to exercise powers of a civil Court. 188 78. Appeals before the Registrar and Tribunal. 188 78-A. Extension of period of limitation by appellate 190 authority in certain cases. 79. No appeal or revision in certain cases. 190 80. Transfer or withdrawal of cases. 190 5 80-A. Power of Registrar to call for proceedings of 192 subordinate Officers and committee of a society and to pass orders thereon. 80-B. Transfer of pending cases. 192 CHAPTER X (Applicable to Chhattisgarh only) 77. Appeal. 192 78. Revision. 194 79. No appeal or revision in certain cases. 196 80. Review. 196 80-A. Extension of period of limitation by appellate 196 authority in certain cases. 80-B. Transfer or withdrawal of cases. 196 80-C. Power to make interlocutory orders. 198 80-D. Stay of execution of orders. 198 80-E. Transfer of pending cases. 198 80-F. 198 CHAPTER XI Miscellaneous 81. Recovery of sums due to Government. 198 81-A. Power of financing Bank to proceed against 200 defaulting members of co-operative society. 82. Bar of jurisdiction of Courts. 200 83. Recovery of costs. 202 84. Enforcement of charge. 202 84-A. Recovery of sums due to housing society. 204 85. Execution of orders, etc. 204 85-A. Manner of executing order to deliver 204 possession of immovable property. 86. Service of notice. 206 87. Registrar and other officers etc. to be public 208 servants. 88. Indemnity for acts done in good faith. 208 89. Powers of civil Courts. 208 90. Registrar or person empowered by him to be 208 a civil Court for certain purposes. 91. Omitted. 92. Companies Act not to apply. 208 93. Certain other Acts not to apply to Co-op. 210 Societies. 94. Notice necessary in suits. 210 95. Power to make rules. 210 96. Repeal and savings. 218 6 MADHYA PRADESH/CHHATTISGARH CO-OPERATIVE SOCIETIES ACT, 1960 (M.P. Act No.17 of 1961) LIST OF AMENDING ACTS As amended subsequently by - 1. M.P. Act No. 1 of 1968, w.e.f. 5.2.1968; 2. M.P. Act No. 8 of 1970, w.e.f. 12.2.1970 but some provisions came into effect on 15.12.1969 vide M.P.Ord.25 of 1969; 3. M.P. Act No.4 of 1971, w.e.f.21.11.1970 and 22.11.1970 vide M.P. Ordinances 11 and 12 of 1970; 4. M.P. Act No.14 of 1976, w.e.f. 12.3.1976 but certain provisions came into effect on 5.12.1975 as per notification issued under M.P. Ordinance 22 of 1975. Amendments relating to Chapter X came into force on 1-5- 1999. 5. M.P. Act 53 of 1976, w.e.f. 7.10.1976; 6. M.P. Act 5 of 1978 - Amendments came into effect on 24.11.1977 vide M.P. Ordinance 11 of 1977 except amendment relating to S.53 which came into force on 4.4.1978; 7. M.P. Act 7 of 1979, w.e.f. 12.4.1979; 8. M.P. Act 29 of 1979, w.e.f. 11.9.1979; 9. M.P. Act 5 of 1980, w.e.f. 12.4.1979; 10. M.P. Act 9 of 1981, w.e.f. 12.4.1979; 11. M.P. Act 3 of 1982, w.e.f. 13.1.1982; 12. M.P. Act 28 of 1982, w.e.f.29.10.1982, except amendment relating to S.49 (7-B) which became operative on 18.6.1982, vide M.P. Ordinance No.6 of 1982; 13. M.P. Act 10 of 1984, Amendments came into effect on 2.12.1983, vide M.P. Ordinance 10 of 1983; 14. M.P. Act3 of 1985, w.e.f. 15.2.1985, but amendments made in S.49(7- B) with effect from 31.12.1984, vide M.P. Ord. 27 of 1984; 15. M.P. Act 23 of 1986, w.e.f. 21.7.1986; 16. M.P. Act 4 of 1987, w.e.f. 14.7.1986 vide M.P. Ord. 2 of 1986; 17. M.P. Act 3 of 1988, w.e.f. 6.10.1987 vide M.P. Ord. 4 of 1987; 18. M.P. Act 25 of 1988, w.e.f. 28.6.1988 vide M.P. Ord. 3 of 1988; 19. M.P. Act 14 of 1990, w.e.f. 31.7.1990 but some provisions came into effect on 26.4.1990 by virtue of M.P. Ord.2 pf 1990; 20. M.P. Act 13 of 1991, w.e.f. 26.4.1991 vide M.P. Ord. 3 of 1991; 21. M.P. Act 12 of 1994, w.e.f. 8.5.1994; 22. M.P. Act 30 of 1994, w.e.f. 2.12.1994; 23. M.P. Act 22 of 1995, w.e.f. 22.6.1995; 24. M.P. Act 7 of 1997, w.e.f. 6.2.1997; 25. M.P. Act 33 of 1998, w.e.f. 3.11.1998; 26. M.P. Act 20 of 1999, w.e.f. 7.8.1999; 27. M.P. Act 17 of 2000, w.e.f. 13.6.2000; 28. M.P. Act 2 of 2001, w.e.f. 17.1.2001 (Applicable in Madhya Pradesh only); 29. C.G. Act 11 of 2001, w.e.f. 14.9.2001 (Applicable in Chhattisgarh only); 7 30. M.P. Act 1 of 2002, w.e.f. 5.1.2002 (Applicable in Madhya Pradesh only); 31. C.G. Act 33 of 2002, w.e.f. 1.3.2002 (Applicable in Chhattisgarh only); 32. C.G. Ordinance 4 of 2003, w.e.f. 1.3.2003 (Applicable in Chhattisgarh only); 33. C.G. Act 20 of 2003, w.e.f. 9.9.2003 (Applicable in Chhattisgarh only); and 34. M.P. Act 34 of 2003, shall come into force on such date as the State Govt. may, by notification, appoint.(Applicable in Madhya Pradesh only). 35. MP. Bill No.10 of 2005 published in the Madhya Pradesh gazette dated 5th May 2005. 36. M.P. Act 23 of 2005 published in the Madhya Pradesh gazette dated 2nd Sept.2005. 37 Madhya Pradesh Ordinance No.6 of 2007 published in MP Gazette on 5th October having been assented by the Governor on 4th October. THE MADHYA PRADESH/CHHATTISGARH CO-OPERATIVE SOCIETIES ACT, 1960 (No.17 of 1961) (Received the assent of the President on 28-4-1961, the assent first published in M.P. Gaz. on 12-5-1961) (An Act to organize and develop co-operatives as democratic instruments and people's institutions based on self help, and mutual aid, and for curbing exploitation and ensuring socio-economic development of people with particular emphasis on weaker sections of society.) Be it enacted by the Madhya Pradesh Legislature in the Eleventh Year of the Republic of India as follows:- CHAPTER I PRELIMINARY 1. Short title, extent and commencement.-(1) This Act may be called the Madhya Pradesh Co-operative Societies Act, 1960. (2) It extends to the whole of Madhya Pradesh. (3) It shall come into force on such date as the State Government may, by notification, appoint. 2. Definitions.-In this Act, unless the context otherwise requires,- (a) "Additional Registrar" means an Additional Registrar of Co- operative Societies appointed under section 3; (a-i) 'Apex Society' means a society whose principal object is to provide facilities for the operation of other societies affiliated to it and whose are of operation extends to the whole State of Madhya Pradesh; (b) "Assistant Registrar" means an Assistant Registrar of Co- operative Societies appointed under section 3; (b-i) "Area of operation" means the area from which the membership is drawn or as specified in the byelaws of the society; 8 (c) "bye-laws" means the bye-laws registered or deemed to have been registered under this Act and for the time being in force, and includes a registered amendment of the bye-laws; Clause (c-i) - as applicable to M.P. only (c-i) "Central Society" means a Co-operative Land Development Bank or any other society whose area of operation is confined to a part of the State and which has as its principal object the promotion of the principal objects and the provision of facilities for the operation of same type of societies and for other societies affiliated to it and not less than five members of which are societies; Clause (c-i) - as applicable to Chhattisgarh only (c-i) "Central Society" means a District Co-operative Agriculture and Rural Development Bank or any other society, whose area of operation is confined to a part of the State and which has as its object the promotion of the objects of the member societies, and which has at least five societies as its members; (c-ii) "Central Co-operative Bank" means a resource society registered or deemed to be registered under this Act, which is either licensed under the Banking Regulation Act, 1949 (10 of 1949) or permitted by the Reserve Bank of India to do banking business till so licensed, and (i) has area of operation confined to part of the State; and (ii) has as its principal object, the creation of funds and the obtaining credit, goods or services for and providing credit, goods or services as loan to Co-operative Societies affiliated to it for agriculture, industrial and other allied purposes; (c-iii) 'Company' means a Company as defined in section 3 of the Com panies Act, 1956 (1 of 1956); (c-iv) "Co-operative Union" means a registered society which has as its principal object the undertaking of co-operative education, propaganda, training and extension of co-operative services; (d) "Committee" means the Board of a management by whatever name called constituted under section 48; (d-i) "Co-operative Bank" means a State Co-operative Bank, a Central Co-operative Bank, and a Primary Co-operative Bank, registered or deemed to be registered under this Act; (d-ii) "Co-operative credit structure" means the Madhya Pradesh State Co-operative Bank or Central Co-operative Bank or Primary Agriculture Credit Co-operative Society; (e) "Co-operative Society with limited liability" means a society having the liability of its members limited by its bye-laws to the amount, if any, unpaid on the shares respectively held by them or to such amount as they may, respectively, undertake to contribute to the assets of the society in the event of its being wound up; (e-i) "Chief executive Officer" means an individual appointed under section 49-E and who subject to superintendence, control and direction of the Board of Directors, has been entrusted by the Board of Directors with the management of the affairs of the society”; (g) "Consumers' Society" means a society formed with the object of obtaining or producing and processing and distributing goods to or performing other services for its members, as well as for other customers and dividing 9 among its members and customers in a proportion as may be laid down in the bye-laws of such society, the profits accruing from such supply, production, processing and distribution; (g-i) "delegate" means a person elected by a group of individual members to represent them in the general body of the society in accordance with the bye-laws of the society; (g-ii) "Deposit Insurance and Credit Guarantee Corporation" means the Deposit Insurance and Credit Guarantee Corporation established under the Deposit Insurance and Credit Guarantee Corporation Act, 1961 (No.47 of 1961); (h) "Deputy Registrar" means a Deputy Registrar of Co-operative Societies appointed under section 3; Clause (hh) - as applicable to Madhya Pradesh only (hh) "Development Bank" means a Co-operative Land Development Bank registered or deemed to be registered under this Act; Clause (hh) - as applicable to Chhattisgarh only (hh) "Development Bank" means a District Co-operative Agricultural and Rural Development Bank or the Chhattisgarh State Co-operative Agriculture and Rural Development Bank registered or deemed to be registered under this Act; (i) "Family" means a person, his spouse, his children, dependent on him and his other relations dependent on him and jointly residing with him; (j) "Farming Society" means a society formed with the object of promoting development of land and better methods of cultivation, and includes a better farming society, tenant farming society, collective farming society, joint farming society, irrigation society and a crop protection society; (k) "Federal Society" means a society of which not less than fifty per cent of the share capital, excluding Government share capital is held by Societies; (l) "Financing Bank" means a society, the objects of which is the creation of funds to be lent to other societies or its individual members, and includes State Co-operative Bank, Co-operative Agriculture and Rural Development Bank, Central Co-operative Bank, Primary Urban Co-operative Bank and District Co-operative Agriculture and Rural Development Bank; (l-i) “Financing Institution” means a National or State level Co- operative Institution or organization, which provides financial assistance or advance or loan to a Co-operative Society or an individual;”; (m) "General Society" means a society not falling under any of the heads (i) to (ix) specified in sub-section (1) of section 10; Clause (n) as applicable to Madhya Pradesh only "(n)"Housing Society" means a society formed with the object of providing its members with residential accommodation;" (n-i) 'Industrial Society' means a Society formed with the objects of promoting development of weavers, carpenters, metal workers, shoe makers or any other Society which aims at producing finished goods from raw materials of any kind. (o) "Joint Registrar" means a Joint Registrar of Co-operative Societies appointed under section 3: (p) "Liquidator" means a person appointed under section-70; 10 (q) "Marketing Society" means a society formed for the purpose of marketing agricultural or other produce and including among its objects, the supply of the requisites of such production; (r) "Member" means a person joining in the application for the registration of a society or a person admitted to membership after registration in accordance with this Act, the rules and the bye-laws applicable to such society and includes the State Government when it subscribes to the share capital of a society; (s) "Multi-purpose Society" means a society which includes amongst its objects any of the primary objects specified in any two or more of the clauses (g), (n), (v) and (y); (s-i) "National Bank" means the National Bank for Agriculture and Rural Development established under section 3 of the National Bank for Agricultural and Rural Development Act, 1981(No.61 of 1981); (t) "Nominal Member" means a person admitted to membership of a society under section 20; (t-i) "Officer" means a person elected or appointed by a society according to its bye-laws to any office of such society and includes a Chairman, Vice-Chairman, President, Vice-President, Managing Director, Manager, Secretary, Treasurer, Member of the Committee and any other person elected or appointed under this Act, the rules or the bye-laws to give directions in regard to the business of such society; (u) "other backward classes" means category of persons belonging to backward classes as notified by the State Government; (u-i) "Primary Society" means a society which is neither an Apex Society nor a Central Society; (u-ii) "Primary Agriculture Credit Cooperative Society" means a society organized with the main objective of making credit available for agriculture production and includes a Primary, Service Cooperative Society and Adimjati Sewa Sahakari Samiti. (u-iii) 'Primary Co-operative Bank' means a resource society other than a village or urban resource society not registered as bank, the objects of which include creation of funds to be lent to, and obtaining credit to be extended to its Regulation Act, 1949 (10 of 1949) or permitted by the Reserve Bank of India to do banking business till so licensed; (v) "Producers' Society" means a society formed with the object of producing and disposing of goods as a collective property of its members and includes a society formed with the object of the collective disposal of the labour of its members; (w) "Processing Society" means a society formed with the object of producing goods by mechanical or manual process and includes an industrial society and a society for the processing of agricultural commodities; (x) "Registrar" means the Registrar of Co-operative Societies appointed under section 3; (x-i) "Representative" means a member of the society to represent the society in other societies; (x-ii) "Reserve Bank" means the Reserve Bank of India established under the Reserve Bank of India Act, 1934 (No.2 of 1934); 11 (y) "Resource Society" means a society formed with the object of obtaining for its members the credit, goods or services required by them and includes a service society and a primary credit society; (y-i) "Returning Officer" means a person appointed or approved by the Registrar by general or special order for performing the duties of a Returning Officer under this Act or the rules made thereunder and includes an officer subordinate to the Returning Officer nominated in writing by him to perform the duties of Returning Officer and to assist him;”; (y-ii) "Scheduled area" means the area which has been declared under the Scheduled Area (State of Bihar, Gujarat, Madhya Pradesh and Orissa) Order, 1977. (z) "Society" means a co-operative society registered or deemed to be registered under this Act; (z-i) "Specified office" means the office of the President or Chairman and the Vice-President or Vice-Chairman;”; (aa) "State Co-operative Bank" means the Madhya Pradesh State Co- operative Bank, Limited; (bb) "Student" means a person studying in any educational, vocational or training institution; Clause (cc) - as applicable to M.P. only (cc) "Tribunal" means the Madhya Pradesh State Co-operative Tribunal constituted under section 77. Clause (cc) - Omitted in Chhattisgarh only (cc) (xxx) CHAPTER II REGISTRATION 3. Registrar and other officers.-(1) The State Government shall appoint a person to be the Registrar of Co-operative Societies for the State and may appoint one or more officers of the following categories to assist him, namely: (a) Additional Registrar of Co-operative Societies; (b) Joint Registrar of Co-operative Societies; (c) Deputy Registrar of Co-operative Societies; (d) Assistant Registrar of Co-operative Societies; (e) such other categories of officers as may be prescribed. (2) The officers appointed to assist the Registrar shall, within such areas as the State Government may specify, exercise such powers and perform such duties conferred and imposed on the Registrar by or under this Act as the State Government may, by special or general order, direct: Provided that no officer other than the Additional Registrar or the Joint Registrar shall be directed to exercise the powers to hear appeals under section 78. (3) The officers appointed to assist the Registrar shall be subordinate to him and shall work under his general guidance, supervision and control. 4. Societies which may be registered.- Subject to the provisions of this Act, a society which has as its objects the promotion of the economic interest of its members or their general welfare in accordance with co-operative principles 12 or a society established with the object of facilitating the operations of such a society, may be registered under this Act. 5. Registration of societies with limited or unlimited liability.- A society may be registered with limited or unlimited liability: Provided that unless the State Government by a general or special order otherwise directs, the liability of a society of which another society is a member shall be limited. 6. Conditions of registration.- (1) No society, other than a society of which another society is a member, shall be registered under this Act unless it consists of at least (twenty) persons competent to contract under section 11 of the Indian Contract Act, 1872 (IX of 1873) and belonging to (twenty) different families, not being near relations and, where the objects of the society include the creation of funds to be lent to its members, unless such persons, save where the Registrar by general or special order otherwise directs, reside in the same town or village or in a compact group of villages: Provided that a society formed exclusively for the benefit of students may be registered, notwithstanding that the members of such society may not have attained the age of majority according to the law to which they are subject: Provided further that the Registrar may relax the condition of minimum membership to that society which is organized for the welfare of the employees of any organization/establishment. Provided also that in case of a primary society, there shall be at least 33 per cent. women members at the time of registration: Provided also that the Registrar may, for sufficient reasons, relax the conditions of the prescribed percentage of women members. (2) The word "limited" or its equivalent in any Indian language shall be the last word in the name of every society registered with limited liability under this Act. 7. Application and fee for registration.-(1) For purposes of registration, an application to register a society shall be made to the Registrar in the prescribed form and shall be accompanied by four copies of the proposed bye- laws of the society. The person by whom or on whose behalf such application is made, shall furnish such information in regard to the society, as the Registrar may such information in regard to the society, as the Registrar may require. (2) The application shall be signed- (a) in the case of a society of which no other society is a member, by at least ten persons qualified in accordance with the requirements of section 6; and (b) in the case of a society of which a member is a registered society, by a duly authorized person on behalf of every such registered society and where all the members of the society are not registered societies, by ten other members, or when there are less than ten other members, by all of them. (3) A society shall be registered on the payment of such fee and in such manner as may be prescribed. 8. Power of Registrar to decide certain questions.-Where in connection with the formation, registration or continuance of a society or the admission of 13 a person as a member of a society any question arises whether a person is an agriculturist or not or whether any person resides in a particular area or not or whether any person belongs to any particular class or occupation or not or such other question pertaining to the eligibility of any person to become a member of a society, such question shall be decided by the Registrar and his decision shall be final. 9. Registration.-(1)If the Registrar is satisfied that a society has complied with the provisions of this Act and the rules and that its proposed bye-laws are not contrary to this Act or the rules, he may register the society and its bye- laws with such modifications as he may consider necessary: Provided that no society shall be registered, if in the opinion of the Registrar, it is likely to be economically unsound or is likely to have an adverse effect upon any other society. (2) Where the Registrar refuses to register a society or its bye-laws he shall communicate the order of refusal together with reasons therefor to the first signatory to the application. (3) The Registrar shall take a decision within ninety days from the date of receipt of an application for registration of a society: Provided that where there is a failure on the part of the Registrar to dispose of such application within the period aforesaid the Registrar shall within the period of fifteen days from the date of expiration of that period, refer the application to the next higher officer and where the Registrar himself is the registering officer to the State Government, who or which, as the case may be, shall dispose of the application within two months from the date of its receipt and on the failure of such higher officer or State Government, as the case may be, to dispose of the application within that period, the society and its byelaws shall be deemed to have been registered. (4) The Registrar shall maintain register of societies registered or deemed to be registered under this Act. 9-A. Conversion of co-operative into co-operative society.- Where a co- operative registered under the Madhya Pradesh Swayatta Sahakarita Adhiniyam, 1999 (No.2 of 2000) intends to convert itself into society under this Act, it may apply for conversion to the Registrar, and if the Registrar is satisfied that the co-operative has complied with the provisions of this Act and rules made thereunder, and that its byelaws are not contrary to this Act and rules made thereunder, he may convert and register the co-operative society in accordance with the provisions of this Act. 10. Classification of Societies. (1) The Registrar shall classify all societies under one or more of the following heads, namely:- (i) Consumer's society; (ii) Farming society; (iii) Federal Society; (iv) Central Society; (v) Housing Society; (vi) Marketing Society; (vii) Multipurpose Society; (viii) Producers Society; (ix) Processing Society; (x) Resource Society; (xi) General Society; 14 (xii) Industrial Society. Provided that a society formed with the object of facilitating the operations of any particular class of societies shall be classified as a society of that class. (1-a) The Registrar may further classify the societies falling under any of the heads specified in sub-section (1) under the following heads, namely: (a) Apex Society; (b) Central Society; (c) Primary Society. (2) The Registrar for reasons to be recorded in writing may alter the classification of any society from one head to another. (3) The decision of the Registrar in respect of classification of societies shall be final. 11. Amendment of bye-laws of society.-(1) No amendment of the bye- laws of a society shall be valid until the same has been registered under this Act, for which purpose four copies of the proposed amendment shall be forwarded in the prescribed manner to the Registrar. (2) If the Registrar is satisfied that the proposed amendment is not contrary to this Act or the rules and is not against the aims and objects of the Society or any of its existing bye-laws he may register the amendment within thirty days of receipt of the proposed amendment. (3) The Registrar shall not refuse to register an amendment of the byelaws without giving an opportunity to the applicant society, for being heard. If he decides to refuse to register an amendment, he shall communicate the order of refusal together with reasons therefor to the society within thirty days from the date of receipt of the proposal: Provided that, where there is a failure on the part of the Registrar to dispose of such application within the period aforesaid, the Registrar shall, within a period of fifteen days from the date of expiration of that period, refer the application to the next higher officer and where the Registrar himself is the registering officer, to the State Government, who or which, as the case may be, shall dispose of the application within two months from the date of its receipt and on the failure of such higher officer or the State Government, as the case may be, to dispose of the application within that period, the amendment of the byelaws shall be deemed to have been registered: Provided further that in the case of co-operative credit structure the provisions of the aforesaid proviso shall not be applicable. 12. Power to direct amendment of bye-laws.- (1) Notwithstanding anything contained in this Act, or the rules or byelaws, on the request of more than fifty per cent of the members of the society or if the Registrar considers that an amendment of the byelaws of society is necessary or desirable in the interest of such society, he may, by an order in writing to be served on the society in the prescribed manner, require the society to make the amendment within sixty days. (2) If the society fails to make the amendment within the time specified by the Registrar, the Registrar may after giving the society an opportunity of being heard and after soliciting the opinion of such Apex 15 Federal society, as may be notified by the State Government, register such amendment and issue a certified copy there of to such society: 13. Change of name.- A society may, by an amendment of its bye-laws, change its name, but such change shall not affect any right or obligation of the society, or of any of its members, or past members, or deceased members, or render defective any legal proceedings by or against the society, and any legal proceedings which might have been continued or commenced by or against the society by its new name. 14. Certain certificates to be conclusive evidence.- (1) Where a society is registered or deemed to be registered under this Act, the Registrar shall issue a certificate or registration signed by him and such certificate shall be conclusive evidence that the society therein mentioned has been duly registered unless it is proved that the registration of the society has been subsequently cancelled: Provided that where a society is deemed to be registered under this Act, the Registrar shall issue a certificate of registration within sixty days from the date on which it was deemed to be registered. (2) No society shall commence business unless it has obtained a certificate of registration under sub-section (1) and every member of such society carrying on business in contravention of this sub-section shall be severally liable for all liabilities incurred in such business. (3) When the Registrar registers an amendment of the bye-laws of a society under section 11 or section 12 he shall issue to the society a copy of the amendment registered by him, which shall be conclusive evidence that the same is duly registered. (4) Where a society changes its name under section 13, the Registrar shall amend the certificate of registration accordingly which shall be conclusive evidence that the change of name is duly registered. 15. Change of liability of society from limited to unlimited or vice- versa.- (1) Subject to the provisions of section 11, a society may by an amendment of its bye-laws change its liability from limited to unlimited or from unlimited to limited. (2) No such amendment shall be registered by the Registrar unless he is satisfied that- (i) twenty-one day's notice has been given to every member of the society and to any person or class of persons whose interest may, in the opinion of the Registrar, be affected by the change; and (ii) with respect to every such member or person who, in the opinion of the Registrar, is entitled to notice- (a) either his assent has been obtained to the change or is deemed to have been obtained by virtue of his failure to object within twenty one days from the date of the notice, (b) if he objects- (i) he is allowed to withdraw his share if he is a member, or (ii) that his debt or claim has been discharged or has been determined or has been secured to the satisfaction of the Registrar within three months from the date of receipt of objection if he is a creditor: 16 Provided that the Registrar may in the case of any person or class of persons, for special reasons, to be recorded, dispense with the notice required by this sub-section. 16. Reorganization of Societies.-(1) In this section- (a) "affected society" means a society which decides to reorganize itself in any of the manners specified in sub-section (2); and (b) "resulting society" means a society- (i) which is formed as a result of amalgamation under clause (a) of sub-section (2); or (ii) to which the assets and liabilities of the affected societies are transferred in whole or in part under clause (b) sub- section(2); or (iii) which is formed as a result of division under clause (c) of sub-section (2); or (iv) which is the result of change of class as provided in clause (d) of sub-section (2). (2) A society may, by resolution passed by two-thirds majority of the members present and voting at a special general meeting held for the purpose decide to reorganize itself by- (a) amalgamating itself with another society; or (b) transferring its assets and liabilities in whole or in part to any other society; or (c) dividing itself into two or more societies; or (d) converting itself into a class of society, the object of which is materially different from that under which it has been classified under this Act: Provided that no such decisions shall take effect unless it is approved by the Registrar: Provided further than in case of a Co-operative Bank, the Registrar shall not give his approval save with the previous sanction in writing of the Reserve Bank; (3) Notwithstanding anything contained in sub-section (2) where the Registrar is satisfied that it is essential in the public interest or in the interest of the members of the affected societies or necessary to secure the proper management of any society, he may direct that any society or societies shall reorganize itself or themselves in any one or more of the modes indicated in sub-section (2): Provided that, in the case of a Co-operative Bank, the Registrar shall not issue any direction save with the previous sanction in writing of the Reserve Bank: Provided further that before a final order under this sub-section is passed by the Registrar every society concerned shall be given an opportunity of expressing its opinion on the reorganization proposals. (4) The procedure for reorganization of a society in accordance with the decision under sub-section (2) or the direction of the Registrar under sub- section (3), as the case may be, shall be such as may be prescribed. (5) If any such reorganization under sub-section (2) or (3) is likely to affect in any manner the interest of any person, notice thereof shall be given to all such persons and every such person shall be given an option, to be exercised within a month from the date of the issue of such notice, of either 17 becoming a member of the resulting society or societies or of demanding the payment of the share or interest or dues in respect of the affected society, as the case may be. (6) No reorganization shall be final until the assent of every such person whose interest is likely to be affected, has been obtained or deemed to have been obtained by virtue of his failure to exercise the option given to him, and further, unless all the claims of persons who have exercised the option of demanding the payment of their shares or interests or dues under sub-section (5) have been met in full. (7) Every resulting society under this section shall have such constitution, property, powers, rights, interests, authorities, duties and obligations as may be specified in the scheme of reorganization and every such scheme of reorganization may contain such consequential, incidental and supplemental provisions as may, in the opinion of the Registrar, be necessary to give effect to such scheme. (8) Notwithstanding anything contained in the Transfer of Property Act, 1882 (IV of 1882) or the Indian Registration Act, 1908 (XVI of 1908), a resolution of a society approved by the Registrar under sub-section (3) shall be sufficient conveyance to vest the assets and liabilities of each affected society in the resulting society or societies concerned, such vesting being subject only to the provisions of the scheme of reorganization. (9) The reorganization of societies shall not in any manner, whatsoever affect any right or obligation of the resulting society or societies or render defective any legal proceedings by or against the society or societies and any legal proceedings that might have been continued or commenced by or against the society or the societies, as the case may be, before the reorganization may be continued or commenced by or against the resulting society or societies. (10) Where any two or more societies have been amalgamated or a society has been divided or converted, the registration of such society or societies shall be deemed to have been cancelled on the date of registration of the amalgamated society or of the converted society or of the new societies into which the society may have been divided. (11) Where a land mortgage bank has been reorganized by amalgamation with a central bank, the amalgamated bank shall in respect of all transactions relating to the land mortgage bank business made on and after such amalgamation be deemed to be a land mortgage bank within the meaning of the law relating to Land Mortgage Banks for the time being in force. Explanation.- For the purposes of this section "Central Bank" means a society with the words "Central Bank” or "District Bank" as part of its name and whose main object is to finance societies which are members of it and lie within a specified area. (12) Every scheme of such reorganization shall be published in the official Gazette for general information. 16-A. Collaboration by Societies.- Any society may, enter into the collaboration with any Government Undertaking or any undertaking approved by the State Government for carrying on any specific business including industrial investment, financial aid or marketing and management expertise. 16-B. Partnership of Societies.-Any two or more societies may by resolution passed at general meeting by a majority of members present and voting in each 18 such society enter into a contract of a partnership for carrying out any specific business permissible under the byelaws on such terms and conditions as may be mutually agreed upon. Where such partnership requires creation of a new organization, the participating society shall be its members. (Section 16-C - Applicable in Chhattisgarh only) 16-C. Government's power to make scheme of reorganization in the public interest.-(1) Notwithstanding anything contained in this Act or the Rules made thereunder, if the State Government, on receipt of a report from the Registrar or otherwise, is satisfied that in the public interest it is necessary to reorganize any society or societies for the purpose of securing proper implementation of development programmers, the State Government, as it may deem necessary, may make such scheme of reorganization and issue orders to implement above scheme: Provided that in case of a Co-operative Bank, prior sanction in writing of the Reserve Bank shall be necessary. (2) There shall be the provisions in scheme of reorganization regarding :- (a) Method of reorganization; (b) Procedure for reorganization; (c) To the membership, registration, management, assets and liabilities, powers, rights, interests, duties, staff and conditions of employment of such society or societies which are made after reorganization; (d) Such other consequential, incidental and supplementary provisions as may be necessary; (e) Any other subject as may be deemed necessary by the State Government. (3) The State Government may modify or cancel any reorganization scheme made or issued any orders under sub-section (1). (4) The provisions regarding every reorganization scheme and the orders issued by the State Government shall be binding upon the interested parties. (5) Every scheme of such reorganization shall be published in the official Gazette for general information. 17. Compromise or arrangement for repayment of liabilities and reconstruction of societies.-(1) Notwithstanding anything contained in this Act, or the rules made thereunder where a compromise or arrangement is proposed between (a) a society and its creditors or any class of them, and (b) a society and its members, the Registrar may on the application of the society or of any member or of any creditor of the society or, in the case of a society which is being wound up of the liquidator order a meeting of the members, or creditors or both, as the case may be, to be called, held and conducted in such manner as may be prescribed: Provided that the Registrar may, on his own motion, order such a meeting to be called for the purpose of affecting a compromise or arrangement. (2) If a majority in number representing three-fourths of the members or three-fourths of the total amount of valuation due to the creditors, as the case may be, present and voting in person at the meeting agree to any compromise or arrangement the compromise or arrangement shall, if confirmed by the Registrar, be binding on all members or all the creditors, as the case may 19 be, and also on the society, or in the case of a society which is being wound up, on the liquidator: Provided that the Registrar shall not confirm a compromise or arrangement unless he is satisfied that all the members or creditors, as the case may be, whose interests are affected by such compromise or arrangement, had notice of such meeting: Provided further that in case of a Co-operative Bank the Registrar shall not confirm the compromise, or arrangement, save with the previous sanction in writing of the Reserve Bank or National Bank for Agriculture and Rural Development. (3) When an order canceling a meeting is passed under sub-section (1) or the proviso thereof for considering any compromise or arrangement between a society and its creditors or any class of them, the Registrar may give notice of such order to a Civil Court in which proceedings, whether instituted before or after the order, in respect of any liability of the society due to a creditor to whom a copy of the order is posted, are pending and on receipt of such notice the Civil Court shall stay the proceedings. If no such compromise of arrangement is confirmed under sub-section (2), the Registrar shall inform the Civil Court accordingly and the proceedings which may have been stayed, shall be resumed. (4) If a compromise or arrangement between a society and its creditors or any class of them is confirmed under sub-section (2) the proceedings, if any, stayed under sub-section (3) shall abate and no proceedings shall lie in a Civil Court in respect of any liability of the society to which the compromise or arrangement relates. (5) The Registrar may, with the previous approval of the State Government, exempt any class of creditors from the operation of this section or any provisions thereof. (6) A compromise or arrangement confirmed by the Registrar shall not be called in question in any Civil Court. (7) If a creditor in respect of whom a compromise or arrangement has been confirmed by the Registrar under sub-section (2), fails to receive the amount payable to him under such compromise or arrangement after due notice to do so within the period specified in such notice, the society or the liquidator, as the case may be, shall deposit the amount in such manner as may be directed by the Registrar. On the making of such deposit the amount payable to the creditor under the compromise or arrangement shall be deemed to have been paid to the extent of the deposit. (8) A compromise or an arrangement between a society and its creditors or any class of them confirmed by the Registrar under sub-section (2) shall cease to be in force as soon as the whole amount of the liability determined thereunder has been or is deemed to have been paid whether under the provisions of this section or otherwise notwithstanding that the period originally stipulated for the discharge of such liability has not expired. (9) After such compromise or arrangement has ceased to be in force no further claim shall remain against the society, or against any property, movable or immovable which it may acquire thereafter, in respect of the liability which had been the subject of the compromise or arrangement, and the society shall be free to conduct its normal business. 20 17-A. Action and liability of Banks under moratorium.- Where an order of moratorium has been made by the Central Government under sub-section (2) of section 45 of the Banking Regulation Act, 1949 (No.10 of 1949) in respect of Co-operative Bank, the Registrar with the previous approval of the Reserve Bank in writing, may, during the period of moratorium, prepare a scheme,- (i) for the reconstruction or re-organization of the Co-operative Bank; or (ii) for the amalgamation of the Co-operative Bank with any other Bank. 17-B. Liability of new Bank to repay to the Deposit Insurance Corporation.-Notwithstanding anything contained in this Act, where a Co- operative Bank being an insured bank within the meaning of the Deposit Insurance Corporation Act, 1961 (No.47 of 1961) is amalgamated or in respect of which a scheme of compromise or arrangement or of reconstruction or reorganization has been sanctioned and the Deposit Insurance Corporation has become liable to pay to the depositors of the insured bank under sub-section (2) of section 16 of that Act, the bank with which such insured bank is amalgamated or the new co-operative bank formed after such amalgamation or, as the case may be, the insured bank or transferee bank shall be under an obligation to repay to the Deposit Insurance Corporation in the circumstances, to the extent and in the manner referred to in section 21 of the Deposit Insurance Corporation Act, 1961 (No.47 of 1961). 18. Cancellation of registration.-(1) The Registrar shall make an order canceling the registration of a society if it transfers the whole of its assets and liabilities to another society, or amalgamates with another society, or divides itself into two or more societies or it is de-registered under the provisions of sub-section (1) of section 18-A or it is wound up under section 69. The society shall, from the date of such order of cancellation, be deemed to be dissolved and shall cease to exist as a corporate body. (2) Notwithstanding anything contained in this Act if any proceedings relating to the winding up or dissolution of a society are pending immediately before the commencement of this Act, such proceedings shall after such commencement be disposed of in accordance with the provisions of the law under which such society was registered or deemed to be registered. 18-A. De-registration of societies.-(1) If the Registrar is satisfied that any society is registered on misrepresentation made by applicants, or where the work of the society is completed or the purposes for which the society has been registered or not served or the society other than a Co-operative Bank or Development Bank has used the word "Bank", "Banker", "Banking" and any other derivative of the word Bank" he may, after giving an opportunity of being heard to the chief promoter, the committee and the members of the society, de- register the society: Provided that, where the number of members of the society is so large and it is not possible to ascertain the correct addresses of all such members from the records in the office of the Registrar and, in the opinion of the Registrar it is not practicable to serve a notice of hearing on all such individual members, a public notice of the proceedings of the de-registration shall be given in the prescribed manner and such notice shall be deemed to be notice to all the members of the society, including the chief promoter and the members of the committee of the society, and no proceeding in respect of the de- 21 registration of the society shall be called in question, merely on the ground that individual notice is not served on any member. (2) When a society is de-registered under the provisions of sub- section (1), the Registrar may, notwithstanding anything contained in this Act, make such incidental and consequential order including appointment of official assignee as the circumstances may require. (3) Subject to the rules made under this Act, the official assignee shall realize the assets and liquidate the liabilities within a period of one year from the date he takes over the charge of property, assets, books, records and other documents. The period aforesaid may, at the discretion of the Registrar, be extended from time to time, so however, that the total period does not exceed three years in the aggregate. (4) The official assignee shall be paid such remuneration and allowances as may be prescribed. (5) The powers of the Registrar under sub-sections (1) and (2) shall not be exercised by any officer below the rank of a Joint Registrar of Co- operative Societies. CHAPTER III MEMBERS, THEIR RIGHTS, LIABILITIES AND PRIVILEGES 19. Persons who may become members.-(1) No person shall be admitted as a member of a society except the following, namely: (a) an individual competent to contract under section 11 of the Indian Contract Act, 1872 (No.11 of 1872); (b) any other society; (c) a public trust registered under the Madhya Pradesh Public Trusts Act, 1951 (No.30 of 1951); (d) a firm, company or any other body corporate, not having minors as partners or directors, registered established or constituted, as the case may be under any law for the time being in force. (e) a society registered under the Madhya Pradesh Societies Registration Act, 1959 (No.1 of 1960), as may be approved by the State Government in this behalf by general or special order; (ea) a co-operative registered under the Madhya Pradesh Swayatta Sahakarita Adhiniyam, 1999 (No.2 of 2000); (f) the State Government: Provided that the provisions of clause (a) shall not apply to- (i) an individual seeking admission to a society exclusively formed for the benefit of students; (ii) a minor acting through a guardian appointed by the Court. (2) Notwithstanding anything to the contrary in this Act or rules or in the byelaws of a society, where the State Government has contributed to the share capital of a society, the liability of the State Government shall be limited to the face value of the shares held by it. (2-A) Notwithstanding anything contained in this Act or rules made thereunder or in the byelaws of a resource Society or consumers society, as the case may be, if any person duly qualified for admission as a member under the provisions of this Act and the byelaws of that Society makes an application for membership of such Society he shall be deemed to have been admitted as a 22 member of such Society from the date of receipt of the application in the office thereof: Provided that the Registrar may, either on his own motion at any time or on an application by the society or any aggrieved person made within fifteen days from the aforesaid date and after giving reasonable opportunity to the society or person concerned by order, declare such person as not eligible for membership of such society for the reasons mentioned therein, within forty five days from the date of receipt of application by the Registrar. (3) Where a student, who is not competent to contract under section 11 of the Indian Contract Act, 1872 (IX of 1872), desires to become a member of a society formed exclusively for the benefit of students, his application for the registration of a society or his application for membership shall be accompanied by a written undertaking from his guardian or other person competent to contract under section 11 of the said Act in the prescribed form, in respect of the liability of the student as a member. (4) Where a person is refused admission as a member in a society, the decision refusing admission shall be communicated by the society to that person within (thirty days) of the date of such decision. (5) No society shall, without sufficient cause, refuse admission to membership to any person, duly qualified therefor under the provisions of this Act and the byelaws of the society. (6) Any person aggrieved under sub-section (4) or sub-section (5) may appeal to the Registrar within ninety days of the date of rejection. (7) The decision of the Registrar in appeal shall be final and the Registrar shall communicate his decision to the parties within (thirty) days from the date thereof. 19-A. Disqualifications of member.- No person shall be eligible for admission as member and any member shall cease to be a member of a society, if- (a) he is an applicant to be adjudicated or is an undischarged insolvent; (b) he has been sentenced for an offence involving moral turpitude and a period of five years has not elapsed from the date of expiry of sentence; (bb) he has been sentenced for an offence under the provisions of the Protection of Civil Rights Act, 1955 (No.22 of 1955) and a period of six years has not elapsed from the date of expiry of sentence. (c) he or any member of his family, having common interest with him, carries on business similar to one carried on by the society: Provided that the provisions of clause (b) shall not apply to a person seeking admission as member of a society exclusively formed or to be formed for the reclamation of Vimukta Jatis. (d) If he is disqualified under section 48-A of the Act; (e) If he is a person who has been dismissed from the service of any co-operative institution or Government service. Explanation.- For the purposes of this section- (i) "Vimukta Jatis" means such tribes as the State Government may, from time to time, by general or special order, declare as Vimukta Jatis for the purpose of this sub-section; (ii) the business carried on by a trader including that of money lending shall be deemed to be similar to the business carried on by a marketing society. 23 represent the society in other society, if he suffers from such disqualification, as may be prescribed: Provided that, if a member suffers from any of the disqualifications prescribed under this section- (i) it shall be lawful for the committee of the society to disqualify such member where he is elected as a Director being a member of that society, 19-B. Effect of subsequent disabilities.-If any person having been admitted as a member of a society subsequently becomes subject to any of the disqualifications specified in section 19-A, such person shall cease to be a member of the society and the Registrar shall declare his seat to be vacant. 19-C. Expulsion of members.- (1)The Committee may, by a resolution passed by three-fourth majority of the members present and voting at a meeting held for the purposes, expel a member if he - (a) intentionally does any act likely to injure the credit of the society or bring it to disrepute; or (b) willfully deceives the society by false statements; or (c) carries on any business which comes or is likely to come into conflict with the business carried on by the society; or (d) persistently makes default in payment of his dues or fails to comply with any provisions of the bye-laws: Provided that no such resolution shall be valid unless the member concerned has been given seven days' notice, either personally or by registered post, of the proposal to expel him and has been given an opportunity to represent his case to the committee. (1-A) Any person aggrieved by the resolution of the Committee under sub-section (1) may appeal before the Registrar within 30 days of the communication of such resolution. (2) Notwithstanding anything contained in this Act or rules or bye- laws made thereunder, where it appears to the Registrar that it is necessary and desirable in the interest of the society to expel a member from the society for his indulging in any of the activities specified in sub-section (1), he may call upon such member and the society, to explain within a period to be specified by him, why such member should not be expelled from the society. If the member or society fails to furnish his or its explanation, within the specified period or after considering the explanation, if received, the Registrar may pass an order expelling a member from the society. (3) No person who has been expelled shall be eligible for re- admission as a member of the co-operative for a period of six years from the date of such expulsion. (4) Expulsion of a member from a society may involve forfeiture of shares held by the member in such society. 20. Nominal members.- Notwithstanding anything contained in section 19, a society may admit any person as a nominal member who shall no share either in the management or profits of a society and shall not be subject to any contributory liability in the case of winding up of the society. 21. No rights of membership to be exercised till due payments are made.- No member shall exercise the rights of a member unless he has made such payment to the society in respect of membership or acquired such interest in the 24 society as may be prescribed or as may be specified in the bye-laws of such society. 22. Votes of members.- (1) Every member of the society shall have one vote in the affairs of the society's (1-A) Every depositor who shall be a member of the Primary Agriculture Credit co-operative Society shall also be eligible to vote in the affairs of the society. (2)(a) The voting right of federal society shall be so regulated that the members, which are societies, do not have less than four-fifths of the total number of votes in the general meeting of such society. (b) In case of federal society the voting rights of individual members (which term shall include public trust, firm, company or body corporate, society registered under the Madhya Pradesh Society Registrikaran Adhiniyam, 1973 (No.44 of 1973), and State Government but shall not include a co-operative society) shall be regulated in such manner as may be prescribed. (3) every affiliated co-operative society through its properly authorized representative and every delegate referred to in clause (b) of sub-section (2) shall have one vote in the general meeting. (4) The quorum for the meeting shall, unless otherwise provided in the byelaws of a society, be one-fifth of the total number of delegates and representatives of the societies: Provided that the delegates shall not at any time in the meeting exceed one-fifth of the member representatives of the societies. (5) The elections of delegates shall be held in accordance with the provisions prescribed for election of the members of the committee. (6) Any vacancy of a delegate caused on account of cessation of membership or otherwise, shall be filled in by delegates by co-opting one of the individual members of the group to which the vacancy relates. (7) Unless otherwise directed by the Registrar in respect of any particular society the delegates on the committee shall not at any time exceed one-third of the number of representatives of societies (fractions being neglected). (8) In the case of equality of votes the Chairman shall have a second or casting vote. 23. Manner of exercising vote.-(1) Every member of a society shall exercise his vote in person and no member shall be permitted to vote by proxy: Provided that subject to any rules made under this Act- (i)(a) a society which is a member of another society may appoint one of its members as a representative to vote on its behalf. (b) a group of individual members formed by the society in accordance with its bye-laws may elect one of the members in the group as a delegate to vote on their behalf. (ii) the State Government may nominate one of its officers as its representative, to vote or otherwise participate in its behalf in the affairs of the society of which such society or the State Government is a member; (iii) a public trust which is a member of a society may appoint, in writing, any one of its trustees to vote on its behalf; (iv) a firm which is a member of a society may appoint, in writing, any one of its major partners to vote on its behalf; and 25 (v) a company or any other body corporate which is a member of a society may appoint, in writing, any of its directors or officers to vote on its behalf. (2) Where a share is held jointly by more than one person and if- (i) in respect of such share a share certificate is issued by the society, the person whose name stands first in such share certificate; and (ii) in respect of such share no share certificate is issued by the society, the person whose name stands first in the register of members maintained by such society; shall have the right to vote. 24. Restriction on holding of share capital by a member.-In any society, no member, other than the State Government or any other society, shall- (a) hold more than such portion of the total share capital of the society not exceeding one-fifth thereof as may be prescribed; or (b) have or claim any interest in the shares of the society exceeding (twenty thousand) rupees: Provided that the State Government may, by notification, specify in respect of any class of societies a maximum exceeding one-fifth of the share capital or (twenty thousand) rupees, as the case may be. 25. Restrictions on transfer of shares or interest.(1) The transfer of a share or interest of a member in the share capital of a society shall be subject to the restrictions as to the maximum holdings specified in section 24. (2) No transfer by a member of his share or interest in a society shall be valid unless- (a) the member has held such share or interest for not less than one year; (b) the transfer is made to the society or to a member of the society; and (c) the transfer is approved by the Committee. 26. Transfer of interest on death of member.-(1) On the death of a member, a society may transfer the share or interest of the deceased member to the person nominated in accordance with the rules made in this behalf, or if there is no person so nominated, to such person as may appear to the Committee to be the heir or legal representative of the deceased member, or pay to such nominee, heir or legal representative, as the case may be, a sum representing the value of such member's interest, as ascertained in accordance with rules or bye-laws. (2) A society may pay all other moneys due to the deceased member from the society to such nominee, heir or legal representative, as the case may be. (3) All transfers and payments made by a society in accordance with the provisions of this section shall be valid and effectual against any demand made upon the society by any other person. 27. Share or deposit or interest not liable to attachment.- Subject to the provisions of section 39, the share or interest or deposit of a member in the capital or working capital of society or in the loan stock issued by a housing society or in the funds raised by a society from its members by way of savings deposit or by compulsory deductions made by it from wages or in the form of surcharge on the value of sale or supply of goods to members, shall not be liable to attachment or sale under any decree or order of a court for or in respect of any debt or liability incurred by the members or past members and accordingly neither a Receiver under the Provincial Insolvency Act, 1920 (No. 26 5 of 1920), nor any such person or authority under any corresponding law for the time being in force shall be entitled to, or have any claim on such share or interest or deposit. 28. Rights of members to see books, etc.- (1) every society shall keep open to inspection for its members free of any charge, at all reasonable times at the registered address of the society- (a) a copy of this Act; (b) a copy of the rules; (c) a copy of the bye-laws of the society; and (d) a register of members. (e) the last audited annual balance sheet, the profit and loss account; and (f) the minutes of the general meetings. (2) All registers and record of a society except books and other documents relating to accounts other than one's own shall be open to inspection in the office of the society by any member of such society on payment of such fee as may be specified in the bye-laws. (3) Subject to such conditions and on payment of such fees as may be specified in the bye-laws, the society shall, on an application made by any member thereof grant him a certified copy of such records or registers or extracts thereof. 29. Liability of a past member or estate of deceased member.- (1) Subject to the provisions of sub-section (2), the liability of a past member or of the estate of a deceased member of a society for the debts of the society as they stood:- (a) in case of a past member, on the date on which he ceased to be a member, and (b) in case of a deceased member, on the date of his death; shall continue for a period of two years from such date. (2) Where a society is ordered to be wound up under any provisions of this Act, the liability of a past member or of the estate of a deceased member who ceased to be a member or died, within two years immediately preceding the date of the order for winding up shall continue until the entire liquidation proceedings are completed; but such liability shall extend only to the debts of the society as they stood on the date of his ceasing to be a member or of his death as the case may be. 30. Insolvency of members.- Notwithstanding anything contained in the Provincial Insolvency Act, 1920 (V of 1920), in an insolvency proceeding against a member of a society, the dues of the society shall have priority over all other dues except those payable to Government. CHAPTER IV - DUTIES, PRIVILEGES, PROPERTY AND FUNDS OF SOCIETIES 31. Societies to be bodies corporate.-The registration of a society shall render it a body corporate by the name under which it is registered, having perpetual succession and a common seal, and with power to hold property, enter into contracts, institute and defend suits and other legal proceedings and to do all things necessary for the purposes for which it was constituted. 27 32. Address of society and display of name.-(1) Every society shall have an address registered in accordance with the rules to which all notices and communications may be sent, and shall send a notice in writing to the Registrar of any change therein within thirty days of the change. (2) Every society shall display its name and the address of its registered office and the words "Registered under Madhya Pradesh Co-operative Societies Act, 1960" in legible characters in 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, promissory notes, endorsements, cheques and orders for money it signs or that are signed on its behalf. (3) The name of every society shall contain the words "Co-operative" and "limited" or their equivalent in official language of the State. (4) The Primary Agriculture Credit Co-operative Society shall not use the word "Bank", "Banking”,” Banker" or any other derivative of the word "Bank" in its registered name. 33. Register of members.-(1) Every society shall keep a register of its members and enter therein the following particulars, namely:- (a) the name, address and occupation of each member; (b) the share held by each member in the case of a society having share capital; (c) the date on which each person was admitted as a member; (d) the date on which any person ceased to be a member; and (e) such other particulars as may be prescribed: Provided that, where a society has under this Act, permitted a member to transfer his share or interest on death, to any person, the register shall also show against the member concerned the name of the person entitled to the share or interest of the member and the date on which the nomination was recorded. (2) The register shall be prima facie evidence of the date on which any person was admitted to the society as a member and of the date on which he ceased to be a member. 34. Proof of entries in society's books.- (1) A copy of any entry in a book of a society regularly kept in the course of its business, shall, if certified in such manner as may be prescribed, be received, in any suit or legal proceedings or for any other purposes as Prima facie evidence of such entry and shall be admissible in evidence in respect of the matters, transactions and accounts therein recorded in the same manner and to the same extent as the original entry. (2) Copies given by a society of any document obtained and kept by it in the course of its business or any entries in such document shall, if certified in the prescribed manner, be admissible in evidence in any suit or legal proceedings or for any other purpose in the same manner and to the same extent as the original document, or the entries therein, as the case may be. (3) No officer of a society and no officer, in whose office the books of a society are deposited after liquidation shall, in any legal proceedings to which the society or the liquidator is not a party, be compelled to produce any of the society's books or documents, the contents of which can be proved under this 28 section or to appear as a witness to prove the matters, transactions and accounts therein recorded, except under order of the court, or the arbitrator, made for special cause. 34-A. Societies to give pass books to member.-(1) A society which gives loans to its members or a society or class of societies which the State Government may notify in the official Gazette, from time to time, shall furnish to each member a pass book, which shall contain an account of the transactions with the member, such as, the date of the transaction, the amount of loan advanced, the rate of interest, the repayment made by the member, the amount of the principal and interest due and such other particulars as may be prescribed. The necessary entries shall be made in the pass book from time to time which shall be countersigned by such office - bearer of the society as may be authorized in this behalf by the committee. For this purpose, the member shall be bound to present the pass book to such office-bearer and if the pass book is required to be kept for some time for making the necessary entries the member shall be granted a receipt therefor, by such office-bearer. (2) The entries in the pass book duly made shall, until the contrary is proved, be prima facie evidence of the account of transactions of the society with the member. 35. Exemption from compulsory registration of instruments.- Nothing in clause (b) and (c) of sub-section (1) of section 17 of the Indian Registration Act, 1908 (XVI of 1908) shall apply to- (a) any instrument relating to shares in a society notwithstanding that the assets of the society consist in whole or in part of immovable property; or (b) any debentures issued by any such society and not creating, declaring, assigning, limiting or extinguishing any right, title or interest to or in immovable property except in so far as it entitles the holder to the security afforded by a registered instrument whereby the society has mortgaged, conveyed or otherwise transferred the whole or part of its immovable property or any interest therein to trustees upon trust for the benefit of the holders of such debentures; or (c) any endorsement upon, or transfer of, any debenture issued by any such society: or (d) any declaration made by a member in favor of a society for creating a charge on land under section 41 and its assignment by the said society in favor of the financing bank or the federal society to which it is affiliated and further assignment by such financing bank or federal society in favor of the Madhya Pradesh State Co-operative Bank Ltd., or any other federal society. Explanation.- For the purposes of this section, a financing bank shall include the Reserve Bank of India, the State Bank of India, the State Bank of India, the corresponding new bank specified in First Schedule to the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (No.5 of 1970), and such other Bank as the State Government may, from to time, by notification, specify in this behalf. 36. Borrowings.- A society may receive deposits and loans from the State Government, Banks, Financing bodies, Corporate Bodies under any law, operating in the State and individuals under the provision of the byelaws of the 29 society. It may also receive funds as a share capital under specific agreement or approved project by way of granting nominal membership. 37. Restrictions on loans.-(1) No society shall make a loan to- (a) any person who is not a member; (b) any member on the security of its own shares; (c) any member on the security of a non-member; Provided that a society may make loans to another society and/or nominal member as provided in the byelaws of the society. (1-A) a society making a loan to its members who have been provided with "Bhoo-Adhikar Avam Rin Pustika" prescribed under section 114-A of the Madhya Pradesh Land Revenue Code, 1959 (No.20 of 1959) shall enter all transactions of loans; advances and recoveries thereof in the aforesaid Bhoo- Adhikar Avam Rin-Pustika. (1-B) Notwithstanding anything contained in this Act, rules made thereunder and byelaws of the society, in case of an omission in making entry of a loan or advance made to members of the society, it shall be presumed that no such loan or advances has been made unless proved otherwise by the society; (2) Notwithstanding anything contained in sub-section (1), a society may make a loan to a depositor on the security of his deposit. (4) If an officer or employee of a society entrusted with the work of making an entry of any transaction of loans, advances and recoveries thereof in the "Bhoo-Adhikar avam Rin-Pustika" referred to in sub-section (1-A) fails to make such entry in the said Pustika the Registrar may by order impose a penalty on him of any amount not exceeding rupees five hundred. The order imposing a penalty shall be enforced in accordance with the provisions of section 85. 38. Restrictions on other transactions with non-members.- Save as provided in sections 36 and 37, the transactions of a society with persons other than members shall be subject to such restrictions, if any, as may be prescribed. 39. Charge and set-off in respect of share or interest of members.- A society shall have a charge upon the share or interest in the capital and on the deposits of a member, past member or deceased member and upon any dividend, bonus or profits payable to a member, past member or deceased member, in respect of any debt or outstanding demand owing to the society from such member or past member of deceased member and may set-off any sum credited or payable to a member, past member or deceased member in or towards payment of any such debt or outstanding demand: Provided that no financing bank shall have a charge upon any sum invested in such bank by a society as reserve fund if such bank is not the sole creditor of the society or upon any sum invested in such bank from any Provident Fund nor shall such bank be entitled to set-off any such sum credited or payable to the society in or towards payment of any debt or outstanding demand owing to such bank from such society. 40. Prior claim of 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 State Government in respect of land revenue or any money recoverable as arrears of land revenue and to any claim of a development bank arising out of a loan granted at any time whatsoever under the Madhya Pradesh Sahkari Bhoomi Vikas Bank Adhiniyam, 1966 (28 of 1966), any debt or outstanding 30 demand owing to a society by any member or past member or deceased member, shall be a first charge upon the crops and other movable property belonging such member, past member or forming part of the estate of the deceased member, as the case may be: Provided that where any prior claim of the State Government arises out of a loan granted under the Land Improvement Loans Act, 1883 (XIX of 1883) or the Agriculturists Loans Act, 1884 (XII of 1884) and such loan is granted after the grant of loan by a society the loan granted by the society shall, notwithstanding anything contained in the said enactments, have priority over such claim of the Government. (2) No person shall transfer any property which is subject to a charge under sub-section(1) except with the previous permission in writing of the society which holds the charge: Provided that it shall always be lawful for a member or past member to create a charge in favour of a Development Bank under the Madhya Pradesh Sahkari Bhoomi Vikas Bank Adhiniyam, 1966(28 of 1966) for the dues thereof. (3) Notwithstanding contained in any law for the time being in force any transfer of property made in contravention of the provisions of sub-section (2) shall be void as against any claim of the society in respect of any debt or outstanding demand owing to it which is a first charge on such property under sub-section (1). 41. First charge of Co-operative societies on certain assets.-(1) Notwithstanding anything contained in any law for the time being in force, but subject to any prior claim of the State Government in respect of land revenue or any money recoverable as arrears of land revenue or to any of claim of a development bank arising out of a loan granted at any time whatsoever under the Madhya Pradesh Sahkari Bhumi Vikas Bank Adhiniyam, 1966 (No. 28 of 1966), or by a bank under the Madhya Pradesh Krishi Udhar Pravartan Tatha Prakirn Upbandha (Bank) Adhiniyam, 1972 (No. 32 of 1973), any debt or outstanding demand owing to a society by a member or past member or deceased member shall be first charge in favour of the society on- (a) the land owned by such member or past member or forming part of the estate of the deceased member, as the case may be; and (b) his interest in any land as a tenant if such member owns such interest; against which such debt was granted or such outstanding demand stands, for and to the extent of the debt, or outstanding demand owing by him: Provided that where any prior claim of the State Government arises out of the loan granted under the Land Improvement Loans Act, 1883 (No.19 of 1884), and such loan is granted after the grant of loan by a society, the loan granted by the society shall, notwithstanding anything contained in the said enactment, have priority over such claim of the Government. (2) No member shall alienate the whole or any part of the land or interest therein which is subject to charge under sub-section (1) until the whole amount borrowed by the member together with interest is paid in full: Provided that it shall be lawful for a member or a past member to mortgage in favour of- (i) a Co-operative Land Development Bank; or 31 (ii) a bank under the Madhya Pradesh Krishi Udhar Pravartan Tatha Prakirn Upbandha (Bank) Adhiniyam, 1972 (No.32 of 1973); or (iii) the State Government such land or any part thereof under the rules made under the Madhya Pradesh Irrigation Act, 1931 (No.3 of 1931), for supply of water from a canal to such land or any part thereof. (3) Any alienation made in contravention of the provisions of sub- section(2) shall be void as against any claim of the society in respect of the loan taken from it under this section. (4) Intimation in writing shall be given to the Tahsildar about the details of the debt or outstanding demand owing to the society from a member, past member or deceased member in the prescribed manner and the Tahsildar shall on receipt of such information, have it entered in the Record of Rights. 41-A. Right of society to acquire and dispose of immovable property.- (1) Notwithstanding anything contained in any law for the time being in force, a society shall have power to itself to acquire agricultural land or interest therein, or any immovable property which has been charged or mortgaged to it by a member in respect of any financial assistance availed of by him, provided the said land or interest therein or any other immovable property has been sought to be sold by public auction and no person has offered to purchase it for a price which is sufficient to pay to the society the money due to it: Provided that only such portion of the property shall be sold as may be reasonably sufficient to satisfy the debt and interest thereon. (2) A society which acquires land or interest therein or any other immovable property in exercise of the power vested in it under sub-section (1) may dispose it of by sale within a period to be specified by the Registrar in this behalf. (3) If the society has to lease out any land acquired by it under sub- section (1) pending sale thereof as indicated in sub-section (2), the period of lease shall not exceed one year at a time and the lessee shall not acquire any interest in that property, notwithstanding any provisions to the contrary in any other law for the time being in force. (4) A sale by a society of land or interest therein in terms of this section shall be subject to the provisions of any other law for the time being in force providing for restrictions on purchase of land by non-agriculturists or in excess of ceiling limits or involving fragmentation of land below a specified limit. (5) The provisions of sub-section (6) of section 165 of the Madhya Pradesh Land Revenue Code, 1959 (No.20 of 1959), shall apply for sale of any land or interest therein of a person belonging to an aboriginal tribe to a person not belonging to such tribe. (6) Nothing in the Madhya Pradesh Ceiling on Agricultural Holdings Act, 1960 (No.20 of 1960) shall apply to a society acquiring land under sub-section (1) and holding such land till such time as the society is in a position to sell the land in the manner provided in this section or otherwise, at a price which is adequate to cover its dues. 42. Deduction from salary to meet society's claim in certain cases.- (1) Notwithstanding anything contained in any law for the time being in force, a member of a society may execute an agreement in favour of such society providing that his employer shall be competent to deduct from the salary or 32 wages payable to him by the employer, such amount, as may be specified in the agreement and to pay the amount so deducted to the society in satisfaction of any debt or other demand owing by the member to the society. (2) On the execution of such agreement, it shall not be necessary to have the debt or claim adjudged by any authority, and the employer shall, if so required by the society, by a requisition in writing and so long as the society does not intimate that the whole of such debt or demand has been paid, make the deduction in accordance with the agreement and pay the amount so deducted to the society, as if it were a part of the salary, or wages payable on the day as required under the Payment of Wages Act, 1936 (No.4 of 1936). (3) If after the receipt of a requisition, made under sub-section (2), the employer at any time fails to deduct the amount specified in the requisition from the salary or wages payable to the members concerned or makes default in remitting the amount deducted to the society, the society shall be entitled to recover any such amount from the employer as an arrear of land revenue and the amount so due from the employer shall rank in priority in respect of the liability of the employer equal to that of the wages in arrears. (4) The provisions of this section shall also apply to all such agreements of the nature referred to in sub-section (1) as were in force on the date of the commencement of this Act. (5) Nothing contained in this section shall apply to persons employed in railways, mines and oil-fields. (6) For the purposes of this section, Drawing and Disbursing Officer shall be deemed to be an employer in respect of a Government servant. 43. Funds and profits.- (1) No part of the funds of a society other than the net profits shall be paid by way of bonus or dividend or otherwise distributed among its members: Provided that a member may be paid remuneration on such scale as may be laid down by the bye-laws for any services rendered by him to the society. (2) A society shall, out of its net profits in any year- (a) transfer an amount not being less than twenty-five percent of such profits to the reserve funds unless such society has been, by general or special order, partially or wholly exempted in this behalf by the Registrar; and (b) pay to the Madhya Pradesh Co-operative Union Ltd. and to such other institutions or unions as may be specified by the Registrar in this behalf, such contribution as may be prescribed but co-operative credit structure shall not be required to pay any contribution; and (c) transfer at least twenty per cent, to an equity redemption fund by such societies which have Government equity participation." (3) No society shall pay dividend to its members at the rate exceeding twenty five per cent. except with the prior approval of the Registrar. (3-A) The Primary Agriculture Credit Co-operative Society shall pay dividend to its members in accordance with the guidelines issued by the Registrar in consultation with the National Bank for the purpose. (4) A society may, with the sanction of the Registrar, after one fourth of the net profit in any year has been carried to the reserve fund, contribute not exceeding five per cent of the remaining net profits to any purpose connected with the development of co-operative movement or charitable purpose as defined in section 2 of the Charitable Endowment Act, 1890 (No.6 of 1890). 33 (5) No society shall make a contribution either in money or in kind, either directly or indirectly to an organization that has an object the furtherance of the interest of a political party or of any religious faith. 43-A. Appropriation of profits.-(1) A society earning profit shall calculate the net profit by deducting from the gross profits for the year the following:- (a) all overdue interest accrued on loan accounts. (b) management charges; (c) interest payable on loans and deposits; (d) audit fee; (e) working expenses, including repairs, rent, taxes; (f) depreciation; (g) bonus payable to employees under the Payment of Bonus Act, 1965 (No.21 of 1965)' (h) provision for payment of income-tax; (i) provision for payment of subscription to the State/District Co- operative Union as may be notified; (j) provision for development fund, bad debt fund, price fluctuation fund, dividend and equalization fund, investment fluctuation fund and such other funds as may be specified by the Registrar in this behalf; (k) provision for retirement benefits to employees and in the case of societies engaged in consumer goods business, provision for purchase rebate to be paid to the members; and (l) provision for writing off bad debts and losses not adjusted against any fund created out of profits. (m) provision for non performing assets, as may be specified from time to time by the Registrar in consultation with the Reserve Bank of India and National Bank for Agriculture and Rural Development. (2) A society may, however, add to the net profits of the year, interest accrued in the preceding years but actually recovered during the year; the net profits thus arrived at, together with the amount of the profits brought forward from the previous year, shall be available for appropriation for the purposes of section 43. 43-B. Liability for deficit.-(1) Where a society has an operational deficit in any year, the committee shall place before the general body the reasons therefor. (2) The general body shall examine the reasons and where the deficit has arisen in the normal course of business of the society the general body based on its examination may resolve to make good the operational deficit wholly or partially from members and or its reserves. 44. Investment of funds.-(1) Subject to the provision of sub-section (3), a society may invest or deposit its funds- (a) in savings account of Government Post -office or Government securities; or (b) in any Bank or financial institution regulated by Reserve Bank; or (c) in any of the securities specified in section 20 of the Indian Trusts Act, 1882 (II of 1882); or (d) with the federal society of which it is a member or in the purchase of the share thereof; or 34 (e) with any other society with limited liability or in the purchase of the shares or securities or debentures thereof. (2) The reserve fund of a society shall be utilized only in such manner and on such terms and conditions as may be laid down by the Registrar in this behalf: Provided that in the case of co-operative credit structure, the manner and terms and conditions to be laid down for utilization of the reserve fund by the Registrar shall be subject to the guidelines specified by the National Bank. (3) No investment of any of its fund in immovable or movable property, other than funds created for specified purposes, shall be made by a society, other than a housing society. (4) A society accepting deposits shall maintain, as a cover against such deposits, fluid resources to such extent and in such manner as may be specified by the Registrar from time to time: Provided that in the case of co-operative credit structure, the Registrar shall specify the extent and manner after consultation with the National Bank. 45. Grant of State aid to societies.-(1) Any society desirous of having State aid otherwise than by way of contribution towards share capital may apply to the Registrar stating the reasons for seeking such State aid. (2) On receipt of an application under sub-section (1) or otherwise, the Registrar may, if he is satisfied that such aid is necessary in the interest of the society, recommend to the State Government the grant of such aid. The State Government may thereupon grant such aid to the society as it may deem fit on such terms and conditions as may be prescribed. 46. Employee's Provident Fund.- (1) A society may establish a contributory Provident Fund for the benefit of its employees to which shall be credited all contributions made by the employees and the society in accordance with the bye-laws of the society. (2) A contributory Provident Fund established by a society under sub-section (1)- (a) shall not be used in the business of the society; (b) shall not form part of the assets of the society; (c) shall not be liable to attachment or be subject to any other process of any court or other authority; and (d) shall be administered in such manner as may be prescribed. 47. Power to direct affiliation to Federal Society.-The State Government may, by a general or special order, direct that all or any of the societies situated within a specified area shall be affiliated to the Madhya Pradesh Co-operative Union or to a (the District Co-operative Union) or to any other union in such manner and on such conditions as the State Government may specify: Provided that no order shall be passed by the State Government in respect of co-operative credit structure. 47-A. Apex society.-(1) The Apex society may, for servicing its constituents and in accordance with its byelaws, perform the following functions:- (a) safeguard the observance of the co-operative principles; 35 (b) promote and organize co-operative societies and for this purposes, frame model byelaws and guidelines for making various regulation and policies for consideration by the societies; (c) provide co-operative training, education and information, and propagate co-operative principles; (d) undertake research and evaluation and assist in preparation of perspective development plans of member societies; (e) promote harmonious relations between member societies; (f) help member societies in the settlement of disputes among themselves and between a society and its members; (g) represent the interest of member societies and lobby for policies and legislation favorable