THE ARUNACHAL PRADESH COOPERATIVE SOCIETIES ACT

APCS ACT 1978 1 THE ARUNACHAL PRADESH CO-OPERATIVE SOCIETIES ACT, 1978 (Act No. 3 of 1979) (Received the assent of the Lt.Governor on 30th June, 1979) AN ACT To provide for the proper management of the Co-operative movement in the State of Arunachal Pradesh. WHEREAS with a view to providing for the orderly development of the Cooperative movement in the State of Arunachal Pradesh in accordance with the relevant directive principles of state policy enunciated in the Constitution of India, it is expedient to frame adequate legislation relating to co-operative societies in that territory ; it is hereby enacted by the Legislative Assembly of Arunachal Pradesh in the Twenty-ninth Year of the Republic of India as follows : CHAPTER – I Preliminary 1. (1) ThisAct may be called theArunachal Pradesh Cooperative Societies Act, 1978. (2) It extends to the whole of the State of Arunachal Pradesh. (3) It shall come into force on such date as the Government ofArunachal Pradesh may by notification in the Official Gazette, appoint. 2. In this Act, unless the context otherwise requires : (1) “Agricultural Marketing Society” means a society :- (a) The object of which is the marketing of agricultural produce and the supply of implements and other requisites for agricultural production, and (b) Not less than three-fourth of the members of which are agriculturist or societies formed by agriculturist ; (2) “ Arbitrator” means a person appointed under this Act, to decide disputes referred to him by the Registrar and includes the Registrar’s nominees or Board of nominees ; (3) “Apex Bank” means the Arunachal Pradesh State Cooperative Apex Bank Limited ; (4) “Auditor” means a person appointed by the Registrar of by a society to audit the accounts of the society ; (5) “Bonus” means payment made in cash or kind out of the profits of a society to a member, or to a person who is not a member, on the Short title, extent and commence- ment. Definitions. APCS ACT 1978 2 basis of his contribution (including any contribution in the form of labour or service) to the business of the society. And in the case of a farming society, on the basis both of such contribution and also the value or income or, as the case may be, the area of the lands of the members brought together for joint cultivation, as may be decided by the society ; (6) “Bye-laws” means by-laws registered under this Act and for the time being in force, and includes registered amendment of such bye-laws ; (7) “Central Bank” means a Cooperative Bank, the objects of which include the creation of fund to be loaned to other societies ; (8) “Committee” means the committee of management, or other directing body, to which the management of the affairs of a society is entrusted ; (9) “Company” means a company as defined in the company’s Act,1956 and includes a Banking Company and also any board, corporation or other corporate body constituted or established by any Central, or State Act for the purpose of the development of any industry ; (10) “ Consumers Society” means a society the object of which is - (a) The procurement, production or processing and distribution of goods to, or the performance of other services for, its members as also other customers, and (b) The distribution among its members and customers, in the proportion prescribed by rules or by the bye-laws of the society of the profits accruing from such procurement, production or processing and distribution ; (11) “Co-operative bank” means society registered under this Act and doing the business of Banking as defined in clause (b) of sub-section (1) of section 5 of the Banking Companies Act, 1949 ; (12) “Cooperative year” means the 12 months period beginning on 1st April and ending on 31st March. (13) “Dividend” means the amount paid, out of the profits of a society, to a member in proportion to the shares held by him ; (14) “farming society” means a society in which the object of increasing agricultural production, employment and income and the better utilization of resources, land are brought together and jointly cultivated by all the members, such lands - (a) being owned by or leased to the members (or some of them), or (b) coming in possession of the society in any other manner whatsoever ; 1 of 1956 X of 1949 APCS ACT 1978 3 (15) “federal society” means by a society - (a) Not less than five members of which are themselves societies, and (b) In which the voting rights are so regulated that the members which are societies have not less than four-fifth of the total number of votes in the general meeting of such society ; (16) “firm” means a firm registered under the Indian PartnershipAct,1932; (17) “general society” means a society not falling in any of the class of societies defined by other clauses of this section ; (18) “Government” means the Government of Arunachal Pradesh ; (19) “Housing society” means a society the object of which is providing its members with dwelling houses ; (20) “Liquidator” means a person appointed as liquidator under the Act ; (21) “ Local authority” includes a school board and an agricultural produce market committee constituted by or under any law for the time being in force ; (22) (a) “member” means a person joining in an application for the registration of a cooperative society which is subsequently registered or a person duly admitted to membership of a society after registration, and includes a nominal, associate or sympathizer member ; (b) ”associate member” means a member who holds jointly a share of a society with others, but whose name does not stand first in the share certificate ; (c) “nominal member” means a person admitted to membership as such after registration in accordance with the bye-laws ; (d) ”sympathizer member” means a person who sympathizes with the aims and objects of the society and who is admitted by the society as such member ; (23) “officer” means a person elected or appointed by a society to any office of such society according to its bye-laws; 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 ; (24) “Official Gazette” means the Arunachal Pradesh Gazette ; (25) “Prescribed” means prescribed by rules ; IX of 1932 APCS ACT 1978 4 (26) “Processing society” means a society the object of which is the processing of goods ; (27) “Producers society” means a society the object of which is the production and disposal of goods or the collective disposal of the Labour of the members thereof ; (28) “Registrar” means, in relation to the multi-State Co-operative Societies, the Central Registrar appointed by the Central Government and in relation to State Co-operative Societies, the Registrar appointed by the State Government under the law made by the Legislature of the State ; (29) “resource society” means a society the object of which is the obtaining for its members of credit, goods or services required by them ; (30) “rules” means rules made under this Act ; (31) “Co-operative Society” means a society registered or deemed to be registered under any law relating to Co-operative Societies for the time being in force in any State ; (32) “ society with limited liability” means a society having the liability of its members limited by its bye-laws ; (33) “society with unlimited liability” means a society the members of which are in the event of its being wound up, jointly and severally liable for and in respect of its obligations and to contribute to any deficiency in the assets of the society ; (34) “working capital” means funds at the disposal of a society inclusive of paid up share capital, funds build out of profits, and money raised by borrowing and by other means. (35) “Authorized person” means a person referred to as such in article 243ZQ of the Constitution of India. (36) “ Board” means the Board of Directors of the governing body of a Co-operative Society, by whatever name called, to which the direction and control of the management of the affairs of a Society is entrusted to. (37) “Multi-State Co-operative Society” means a Society with objects not confined to one State and registered or deemed to be registered under any law for the time being in force relating to such Co-operatives. APCS ACT 1978 5 (38) “Office bearer” means the President, Vice-President, Chairman, Vice- Chairman, Secretary or Treasurer of a Co-operative Society and includes any other person to be elected by the Board of any Co-operative Society. (39) “State Act” means the Arunachal Pradesh Co-operative Societies Act, 1978 (Act No.3 of 1979) or any other related laws made by the Legislature of the State. (40) “State level Co-operative Society” means a Co-operative Society having its area of operation extending to the whole of the State and defined as such in any other law made by the Legislature of the State”. CHAPTER – II Registration 3. The Government may appoint a person to be the Registrar of Cooperative Societies for the State; and may appoint one or more persons to assist such Registrar, and may, by general or special order, confer on and such person or persons all or any of the powers of the Registrar under this Act. The person or persons so appointed to assist the Registrar and on whom any powers of the Registrar are conferred, shall work under the general guidance, superintendence and control of the Registrar. 4. A society, which has as its objects are promotion of the economic interest or general welfare of its members, or of the public, in accordance with cooperative principles, or a society established with the object of facilitating the operations of any such society, may be registered under this Act ; Provided that no society shall be registered if it is likely to be economically unsound, or the registration of which may have an adverse effect on development of the cooperative movement. 5. A society may be registered with limited or unlimited liability. 6. (1) No society, other than a federal society, shall be registered under this Act, unless it consists of at least ten persons (each of such persons being a member of a different family), who are qualified to be members under this Act, and who reside in the area of operation of the society. Societies which may be registered. Registrar. Conditions of registration. Registration with limited or unlimited liability. APCS ACT 1978 6 No society shall be registered unless 80% of its members are bonafide Tribals of Arunachal Pradesh holding minimum 51% of the share capital of the society. (2) No society with unlimited liability shall be registered unless all persons forming the society reside in the same town or village, or in the same group of village. (3) No federal society shall be registered unless it has at least five societies as its members. (4) Nothing in this Act, shall be deemed to affect the registration of any society made before the commencement of this Act. (5) The word “limited” or “unlimited” shall be the last word in the name of every society with limited or unlimited liability, as the case may be, which is registered or deemed to be registered under this Act. Explanation – For the purpose of this section and section 8, the expression “member of a family” means a wife, husband, father, mother, grand-father, grand-mother, step-father, step-mother, son, daughter, step-son, step-daughter, grand-son, grand-daughter, brother, sister, half-brother, half-sister and wife of brother of half-brother. 7. Notwithstanding anything contained in this Act the Government may, by special order in each case, exempt, subject to such conditions, if any, as it may impose, any society from any of the requirements of this Act as to registration. 8. (1) For the purpose of registration, an application 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 require. (2) The application shall be signed – (a) in the case of a society, other than a federal society, by atleast ten persons (each of such persons being a member of a family), who are qualified under this Act, and (b) in the case of a federal society, by at least five societies. No signature to an application on behalf of a society shall be valid, unless the person signing is a member of the committee of such a society, and is authorized by the committee by resolution to sign on its behalf the application for registration of society and its bye-laws, and a copy of such resolution is appended to the application. Power to exempt societies from conditions as to registration. Application for registration. APCS ACT 1978 7 9. (1) If the Registrar is satisfied that a proposed 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 to the rules, he may, within six months from the date of receipt of the application register the society and its bye-laws. (2) If the Registrar is unable to dispose of an application for registration within the period mentioned in the foregoing sub-section, he shall make a report to the Government stating therein the reasons therefore; and he shall thereafter act in accordance with such directions as may be issued to him by the Government. (3) Where the Registrar refuses to register a proposed society, he shall forthwith communicate his decision, with the reasons therefore, to the person making the application and if there be more than one to the person who has signed first thereon. (4) The Registrar shall maintain a register of all societies registered or deemed to be registered under this Act. 10. A certificate of registration, signed by the Registrar, shall be conclusive evidence that the society therein mentioned is duly registered unless it is proved that the registration of the society has been canceled. 11. When, for the purpose of the formation, or registration or continuance, of a society, any question arises whether a person is an agriculturist or not or whether any person resides in the area of operation of the society or not, such question shall be decided by the Registrar. 12. (1) The Registrar shall classify all societies into one or other classes of societies defined in section 2, and also into such sub-classes thereof, as may be prescribed by rules. (2) The Registrar may for reasons to be recorded in writing alter the classification of a society from one class of society to another, or from one sub-class thereof to another and may, in the public interest and subject to such terms and conditions as he may think fit to impose allow and society so classified, to undertake the activities of a society belonging to another class. (3) A list of all societies so classified shall be published by the Registrar every three years in such manner as the Government may, from time to time, direct. 13. (1) No amendment of the bye-laws of the society shall be valid until registered under this Act. For the purpose of registration of an amendment of the bye-laws, a copy of the amendment passed in the manner prescribed, at a general meeting of the society shall be forwarded to the Registrar. Registration. Evidence of registration. Power of Registrar to decide questions. Classification of societies. Amendment of bye-laws of society. APCS ACT 1978 8 (2) When the Registrar registers an amendment of the bye-laws of a society, he shall issue to the society a copy of the amendment certified by him, which shall be conclusive evidence that the same is duly registered. (3) Where the Registrar refuses to register an amendment of the bye- laws of a society, he shall communicate the order of refusal, together with his reasons therefore the society. 14. (1) If it appears to the Registrar that an amendment of the bye-laws of a society is necessary or desirable in the interest of such society, he may call upon the society, in the manner prescribed, to make the amendment within such time as he may specify. (2) If the society fails to make the amendment within the time specified the Registrar may, after giving the society an opportunity of being heard and after consulting such federal society as may be notified by the Government, register such amendment and issue to the society a copy of such amendment, certified by him. With effect from the date of the registration of the amendment in the manner aforesaid, the bye-laws shall be deemed to have been duly amended accordingly ; and the bye-laws as amended shall, subject to appeal, if any, be binding on the society and its members. 15. (1) A society may, by resolution passed at a general meeting, and with the approval of the Registrar, changes its name; but such change shall not affect any right or obligation of the society, or any of its members, or part members, or deceased members; and any legal proceedings pending before any person, authority or court may be continued by or against the society, under its new name. (2) Where a society changes its name, the Registrar shall enter the new name in its place in the register of societies, and shall also amend the certificate of registration accordingly. 16. (1) Subject to the provisions of this Act and the Rules, a society may by amendment of its bye-laws, change the form of extent of its liability. (2) When a society has passed a resolution to change the form of extent of its liability, it shall give notice thereof in writing to all its members and creditors and, notwithstanding anything in any bye- law or contract to the contrary, any member or creditor shall during a period of one month from the date of service of such notice upon him have the option of withdrawing his shares, deposits or loans. Power to direct amendment of bye-laws. Change of name. Change of liability. APCS ACT 1978 9 (3) Any member of creditor who does not exercise his option within the period specified in sub-section (2), shall be deemed to have assented to the change. (4) An amendment of bye-laws of a society, changing the form or event of its liability, shall not be registered or take effect until, either – (a) all members and creditors have assented, or deemed to have assented, thereto as aforesaid; or (b) all claims of members and creditors who exercise the option, given by sub-section (2), within the period specified therein, have been met in full or otherwise satisfied. 17. (1) A society may, with the previous approval of the Registrar, by resolution passed by two-thirds majority of the members present and voting at a special general meeting held for the purpose, decide- (a) To amalgamate with another society ; (b) To transfer its assets and liabilities, in whole or in part to any other society ; (c) to divide itself in to two or more societies ; or (d) to convert itself into another class of society ; Provided that when such amalgamation, transfer division or conversion, aforesaid, involves, a transfer of the liabilities of a society to any other society, no order on the resolution shall be passed by the Registrar, unless he is satisfied that- (i) the society, after passing such resolution has given notice thereof in such manner as may be prescribed to all its members creditors and other persons whose interest are likely to be affected (hereinafter, in this section referred to as “other interested persons”) giving them the option, to be exercised within one month from the date of such notice of becoming members of any of the new societies, or containing their membership in the amalgamated or converted society, or demanding payment of their share or interest or dues, as the case may be. (ii) all the members and creditors and other interested persons, have assented thereto, by virtue of any member or creditor, or any other interested person failing to exercise his option within the specified period in clause (i) aforesaid, and Amalgamation, transfer, division or conversion of societies. APCS ACT 1978 10 (iii) all claims of members and creditors and other interested persons, who exercise the option within the period specified have been met in full or otherwise satisfied. (2) Notwithstanding anything contained in the Transfer of propertyAct, 1882, or the Indian Registration Act, 1908, in the event of division or conversion, the registration of the new societies or, as the case may be, of the converted society, and in the event of amalgamation on the amalgamation, the resolution of the societies concerned with amalgamation, shall in each case be sufficient conveyance to vest the assets and liabilities of the original society or amalgamating societies in the new societies or converted or amalgamated society, as the case may be, (3) The amalgamation of societies or division or conversion of a society shall not affect any rights or obligations of the societies so amalgamated, or society so divided or converted, or render defective any legal proceedings which might have been continued or commenced by or against the societies which have been amalgamated, or divided or divided or converted ; and accordingly such legal proceedings may be continued or commenced by or against the amalgamated society, or, as the case may be, the converted society, or the new societies. (4) Where two or more societies have been amalgamated or a society has been divided or converted the registration of such societies or society shall be cancelled on the date of registration of the amalgamated society, or the converted society or the new societies between which the society may have been divided. 18. (1) Where the Registrar is satisfied that it is essential in the public interest or in the interest or the cooperative movement, or for the purpose of securing the proper management of any society, that two or more societies should amalgamate or any society should be divided to form to or more societies or should be reorganized, then notwithstanding anything contained in the last preceding section, but subject to the provisions of this section, the Registrar may, after consulting such federal society as may be notified by the Government, by the order published in the Official Gazette, provide for the amalgamation, division or reorganization of those societies, into a single society, or into societies, with such constitution, property, rights interests and authorities and with such liabilities, duties and obligations, as may be specified in the order. Power to direct amalgamation, division and recoganization in public interest etc. IV of 1882 XVI of 1908. APCS ACT 1978 11 (2) No order shall be made under this section, unless- (a) a copy of the proposed order has been sent in draft to the society or each of the societies concerned; and (b) the Registrar has considered and made such modifications in the draft order as may seem to him desirable in the light of any suggestions and objections which may be received by him within such period (not being less than two months from the date on which the copy of the order as aforesaid was received by the society) as the Registrar may fix in that behalf, either from the society, or from any member or class of members thereof, or from any creditor or class of creditors. (3) The order referred to in sub-section (1) may contain such incidental consequential and supplemental provisions as may, in the opinion of the Registrar, be necessary to give effect to the amalgamation, the division or the reorganization. (4) Every member or creditor of each of the societies to be amalgamated divided or reorganized, who has objected to the scheme of amalgamation, division or reorganization within the period specified, shall be entitled to receive, on the issue of the order of amalgamation, division or reorganization, his share or interest if he be a member, and the amount in satisfaction of his dues if he be a creditor. (5) On the issue of an order under sub-section (1), the provisions of sub- Section (2), (3) and (4) of section 17 shall apply to the societies so amalgamated, divided or reorganized as if they were amalgamated divided or reorganization under that section, and to the society amalgamated, divided or reorganized. 19. Where a proposal for a compromise or arrangement – (a) between a society and its creditors, or (b) between a society and its members, is approved at a special general meeting called for the purpose, the Registrar may, on the application of the society, or of any member or of any creditor of the society of in the case of society which is being wound up, of the Liquidator, order reconstruction in the prescribed manner, of the society. 20. (1) Any two or more societies may, with the prior approval of the Registrar, by resolution passed by three-fourth majority of the members present and voting at a general meeting of each such society, enter into partnership for carrying out any specific business or businesses provided that its members has had clear thirty days written notice of the resolution, and the date of the meeting. Reconstruction of societies. Partnership of societies. IX of 1932. APCS ACT 1978 12 (2) Nothing in the Indian partnership Act, 1932 shall apply to such partnership. 21. The Registrar shall make an order cancelling the registration or 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 if its affairs are would up, or it has not commenced business within a reasonable time of its registration, or has ceased to function of if he is satisfied, after making such inquiry as he thinks fit, that the society no longer has genuinely as its objects one or more of the objects specified in section 4, and its registration ought, in the interests of the general public, be cancelled. 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. CHAPTER – III Members and their Right and Liabilities 22. (1) Subject to the provisions of section 24, no person shall be admitted as a member of a society except the following, that it is to say,- (a) an individual, who is competent to contract under the Indian Contract Act, 1872 ; (b) a firm, company or any other body, corporate constituted under any law for the time being in force, or a society registered under the societies registration Act 1860 ; (c) a society registered, or deemed to be registered under this Act ; (d) the Government ; (e) a local Authority ; (f) a public trust registered under any law for the time being in force for registration of such trusts ; Provided that, the provisions of clause (a) shall not apply to an individual seeking admission to society exclusively formed for the benefit of students of a school or college ; Provided further that, subject to such terms and conditions as may be laid down by the Government by general or special order, a firm or company may be admitted as member only of a society which is a federal or urban society or which conducts or intends to conduct as industrial undertaking ; Cancellation of registration. Person who may become member. XXI of 1860. IX of 1932. IX of 1872. APCS ACT 1978 13 Provided also that, any firm or company which is immediately before the commencement of this Act a member of a society deemed to be registered under this Act, shall have, subject to the other provisions of this Act, the right to continue to be such member on and after such commencement. Explanation – For the purpose of this section an “urban society” means a society the business of which mainly falls within the limits of a municipal corporation, municipality, cantonment or notified area committee. (2) Where a person is refused admission as a member of a society, the decision, together with the reasons therefore, shall be communicated to that person within fifteen days of the date of the decision or within three months from the date of the application for admission, whichever is earlier. 23. (1) No society shall, without sufficient cause, refuse admission, to membership to any person duly qualified therefore, under the provisions of this Act and its bye-laws. (2) Any person aggrieved by the decision of a society, refusing him admission to its membership, may appeal to the Registrar. (3) The decision of the Registrar in appeal shall be final and the Registrar shall communicate his decision to the parties within fifteen days from the date thereof. 24. (1) Notwithstanding anything contained in section 22 a society may admit any person as a nominal, associate or sympathizer members. (2) A nominal member or sympathizer member shall not be entitled to any share in any form whatsoever in the profits or assets of the society as such member. A nominal or sympathizer shall ordinarily not have any of the privilege and rights of a member, but such a member or an associate member, may subject to the provisions of sub- section (8) of section 27, have such privileges and rights and be subject to such liabilities, of a member, as may be specified in the bye-laws of the society. 25. A person shall cease to be a member of a society on his resignation from the membership thereof being accepted, or on the transfer of the whole of his share or interest in the society to another member or on his death, removal or expulsion from the society. Open membership. Nominal, associate and sympathizer member. Cessation of membership. APCS ACT 1978 14 26. No person shall exercise the rights of a member of a society, until he has made such payment to the society, in respect of membership, or acquired such interest in the society, as may be prescribed by the rules or the bye-laws of such society. 27. (1) No member of any society shall have more than one vote in its affairs provided that, in the case of an equality of votes, the chairman shall have a casting vote. (2) Where a share of a society is held jointly by more than one person, only the person whose name stands first in the Share Certificate, shall have the right to vote. (3) A society, which has invested any part of its funds in the shares of another society, may appoint one of its members to vote on its behalf in the affairs of that other society, and accordingly such member shall have the right to vote on behalf of the first society. (4) A company or any other body corporate constituted under any law for the time being in force which has invested any part of its funds in the shares of society may appoint any one of its directors to vote on its behalf in the affairs of such society; and accordingly such director or officer shall have the right to vote on behalf of the company or body corporate. (5) Where a firm has invested any part of its funds in the shares of a society, any one of its partners shall be entitled to vote in the affairs of the society on behalf of the firm. (6) The Government, a local authority or public trust which has invested any part of its funds in the shares of a society, may appoint any of its officers, members or trustees to such persons shall have the right to vote on behalf of the Government, local authority or the public trust as the case may be. (7) In the case of a federal society, the voting rights of individual members thereof shall be such as may be regulated by the rules made under this Act and by the bye-laws of the society. (8) No nominal, associate, or sympathizer member shall have the right to vote. 28. In any society, no member other than the Government or any other society, shall :- (a) Hold more than such portion of the total share capital of the society (in no case exceeding one-fifth thereof) as may be prescribed, or No rights of membership to be exercis- ed till due payments are made. Voting powers of members. Restrictions on holding of shares. APCS ACT 1978 15 (b) Have or claim any interest in the shares of the society exceeding five thousand rupees : Provided that the Government may, by notification in the Official Gazette specify in respect of any class of societies a higher or lower maximum than one fifth of the share capital or, as the case may be, a higher or lower amount than five thousand rupees. 29. (1) Subject to the provisions of the last preceding section as to the maximum holding of shares and to any rules made in this behalf, a transfer of, or charge on the share or interest of the member in the share capital of a society shall be subject to such conditions as may be prescribed. (2) A member shall not transfer any share held by him or his interest in the capital or property of any society, or any part thereof, unless – (a) he has held such share or interest for not less than one year; (b) the transfer is made to a member of the society or to a person whose application for membership has been accepted by the society. (3) Notwithstanding anything contained in sub-section (1) and (2), where a member is allowed to resign or is expelled, or cease to be a member on account of his being disqualified by this Act or by the rules made there- under or by the bye-laws of the society, the society may acquire the share or interest of such member in the share capital by paying for it at the value determined in the manner prescribed, provided that the total payment of share capital of a society in any financial year for such purpose does not exceed ten percent of the paid-up share capital of the society on the last day of the financial year immediately preceding. Explanation – The right to forfeit the share or interest, of any expelled member in the share capital by virtue of any bye-laws of the society, shall not be affected by the aforesaid provisions. (4) Where the Government is a member of a society the restriction contained in this section shall not apply to any transfer made by its share or interest in the capital of the society; and the Government may, notwithstanding anything in this Act, withdraw from the society its share capital at any time, after giving to the society notice thereof not less than three months. Restrictions on transfer of charge on share of interest. APCS ACT 1978 16 30. (1) On the death of a member of a society the society shall transfer the share or interest of the deceased member to a person or persons nominated in accordance with the rules, or, if no person has been so nominated, to such persons as may appear to the Committee to be the heir or legal representative of the deceased member : Provided that such nominee, heir or legal representative, as the case may be, is duly admitted as a member of the society ; Provided further that, nothing in this sub-section or in section 22 shall prevent a minor or a person of unsound mind from acquiring by inheritance or otherwise, any share or interest of deceased member in a society. (2) Notwithstanding anything contained in sub-section (1), and such nominee, heir or legal representative, as the case may be, may require the society to pay him the value of share or interest of the deceased member, ascertained in accordance with the rules. (3) 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. (4) All transfer and payments, duly 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. 31. The share or interest of a member in the capital of a society, or the loan stock issued by a housing society, or in the funds raised by a society from its member by way of savings deposit, 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 member. 32. (1) Every member of a society shall be entitled to inspect, free of cost, at the society’s office during office hours, or any time fixed for the purpose by the society, a copy of the Act, the rules, and the bye- laws, the last audited annual balance sheet, the profit and loss account, a list of the members of the committee, a register of members the minutes of general meetings minutes of committee meetings and those portions of the books and records in which his transaction with the society have been recorded. (2) A society shall furnish to a member, on request in writing and on payment of such fees as may be prescribed thereof, a copy of any of the documents mentioned in the foregoing sub-section within one month from the date of payment of such fees. Transfer of interest on death of member. Rights of member to see books etc. Share interest not liable to attachment. APCS ACT 1978 17 33. (1) Subject to the provisions of sub-section (2) the liability of a past member or the estate of a deceased member of a society for the debts of society as they stood – (a) in the case of a past member, on the late on which he ceased to be a member, and (b) in the case of a deceased member, on the date of his death, shall continue for a period of two years from such date. (2) Where a society, is ordered to be wound up under any provision 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 of winding up shall continue until the entire liquidation proceedings are completed but such they stood on the date of his ceasing to be a member of death, as the case may be : Provided that provisions of sub-section (1) and (2) shall not apply in the case of a minor who succeeds the deceased. 34. Notwithstanding anything contained in any law for the time being in force, the dues of society from a member, in insolvency proceedings against him, shall rank in order or priority next to the dues payable by him to Government or to a local authority. 35. (1) A society may, by resolution passed by three-fourths majority of the members entitled to vote who are present at general meeting held for the purpose, expel a member for acts which are detrimental to the interest or proper working of the society : Provided that, no resolution shall be valid, unless the member concerned is given an opportunity or representing his case to the general body and no resolution shall be effective unless it is approved by the Registrar. (2) No member of a society who has been expelled under the foregoing sub-section shall be eligible for re-admission as a member of the society, or for admission as a member of any other society, for a period of one year from the date of such expulsion ; Provided that Registrar may, on an application by the society and in special circumstances, sanction the re-admission or admission, within the said period, of any such member as a member of the said society or of any other society, as the case may be. 36. (1) Every member of a society shall exercise his vote in person and no member shall be permitted to vote by proxy. Liability of past member and estate of deceased member. Insolvency of members. Expulsion of members. Manner of exercising vote. APCS ACT 1978 18 (2) Notwithstanding anything contained in sub-section (I) ; a society which is a member of another society may, subject to the Rules, appoint one of the members to vote on its behalf in the affairs of that other society. CHAPTER - IV Incorporation, Duties and Privilege of Societies 37. The registration of the society shall render it a body corporate by the name under which it is registered, with perpetual succession and a common seal and with power to acquire, hold and dispose of property, to enter into contracts, to institute and defend suits and other legal proceedings, and to do all such things as are necessary for the purpose for which it is constituted. 38. Every society shall have an address, registered in accordance with the rules to which all notices and communications may be sent and the society shall send notice in writing to the Registrar of any change in the said address within thirty days thereof. 39. (1) Every society shall keep a register of its members and enter therein the following particulars, that is to say : (a) the name, address and occupation of each member ; (b) in the case of a society having share capital, the share held by each member ; (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, by or 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 membership, and of the date on which he ceased to be a member. 40. Every society shall keep, at the registered address of the society, a copy of this Act and the rules and of its bye-laws and a list of members, open to inspection to the public free of charge, during office hours or any house fixed by the society therefore. Societies bodies to be corporate. Address of societies. Register of members. Copy of Act etc. to be open to inspection. APCS ACT 1978 19 41. (1) A copy of any entry in any book, register of list, regularly kept in the course of business and in the possession of a society, shall, if duly certified in such manner as may be prescribed be admissible in evidence of the existence of the entry, and shall be admitted as evidence of the matters and transactions therein recorded in every case where, and to the same extent to which, the original entry would if produced, have been admissible to prove such matters. (2) In the case of such societies, as the Government may by general or special order, direct, no officer of a society shall in any legal proceedings to which the society is not a party, be compelled to produce any of the society’s books the contents of which can be proved under the foregoing sub-Section or to appear as witness to prove the matters transactions and accounts therein recorded, unless required to do so by order the Court or a judge made for any special reason. 42. Nothing in clauses (b) and (c) of sub-section (1) of section 17 of the Indian Registration Act, 1908, shall apply- (a) To 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) To any debentures issued by any 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 debenture ; or (c) To any endorsement upon, or transfer of, any debentures issued by any society. 43. The Government, by notification in the Official Gazette, may in the case of any society or class of societies, remit, (a) The stamp with which under any law relating to stamp duty for the time being in force, instruments executed by or on behalf of a society by on officer or member thereof and relating to the business of the society or any class of such instruments or awards of the Registrar or his nominee or board of nominees under this Act are respectively chargeable. Admissibility of copy of entry as evidence. Exemption from compulsory registration and instru- ments relating to shares and debentures of society. Power to exempt from taxation. XVI of 1908 APCS ACT 1978 20 (b) Any fee payable by or on behalf of a society under the relating to the registration of documents and to court fees for the time being in force, and (c) Any other tax or fee or duty (for any portion thereof) payable or on behalf of a society under any law for the time being in force, which the Government is competent to levy. 44. A Society shall receive deposits and loans from members and other persons, only to such extent, and under such conditions as may be prescribed, or specified by the Bye-laws of the society. 45. (1) No society shall make a loan to any person other than a member, or on the security of its own shares or on the security of any person who is not a member. Provided that with the special sanction of the Registrar, a society may make loans to another society : (2) Notwithstanding anything contained in the foregoing sub-section a society may make a loan to a depositor on the security of his deposit. (3) If, in the opinion of the Government, it is necessary in the interest of the society or societies concerned to do so, the Government may by general or special order, prohibit, restrict or regulate the lending of money by any society or class of societies on the security of any property. 46. Same as is provided in thisAct, the transaction of a society with persons other than members, shall be subject to such restrictions, if any, as may be prescribed. 47. A society shall have a charge upon the share or interest in the capital, and on the deposits, of a member or past member or deceased member, and upon any dividend, bonus or profits payable to any such member, in respect of any debt due, from such member or his estate to the society ; and the society may set-off any sum credited or payable to such member in or towards payment of any such debt : Provided that no Co-operative bank shall have a charge upon any sum invested with it by a society out of the provident fund established by it under section 72 or its reserve fund ; and no co-operative bank shall be entitled to set-off any such sum towards any debts due from the society. Restrictions on borrow- ings. Regulation of loan making policy. Restrictions on transaction with persons other than members. Charge and set-off in respect of share or interest of member. APCS ACT 1978 21 48. (1) Notwithstanding anything in any other law for the time being in force, but subject to any prior claim of Government in respect of any money recoverable as a public demand and to the provisions of sections 60 and 61 of the Code of Civil Procedure, 1908 or the analogous law in force in the State of Arunachal Pradesh. (a) Any debt or outstanding demand, owed to a society by any member or past member or deceased member, shall be a first charge – (i) upon the crops, or other agricultural produce raised in whole or in part whether with or without a loan taken from the society by such member or past member or deceased member. (ii) upon any cattle, fodder for cattle, agricultural or industrial implements or machinery or raw materials for manufacture, or workshop, godown or place of business supplied to or purchased by such member or past member or deceased member, in whole or in part, from any loan whether in money or goods made to him by the society, and (iii) upon any movable property which may have been hypothecated, pledged or otherwise mortgaged by a member with the society and remaining in his custody : (b) any outstanding demands or dues payable to a society by any member or past member or deceased member in respect of rent, shares, loan or purchase money or any other rights or amounts payable to such society shall be a first charge upon his interest in the immovable property of the society. Explanation - The prior claim of Government in respect of dues, other than land revenue, shall be restricted for the purpose of sub-section (1) to the assets created by a member out of the funds in respect of which the Government has claim. (2) No property or interest in property, which is subject to a charge under the foregoing sub-section, shall be transferred in any manner without the previous permission of the society; and such transfer shall be subject to such conditions, if any, as the society may impose. (3) Any transfer made in contravention of sub-section (2) shall be void. Prior claim of society. V of 1908. APCS ACT 1978 22 (4) Notwithstanding anything contained in sub-sections (2) and (3), a society, which has as one of its objects the disposal of the produce of its members may provide in its bye-laws, or may other5wise contract with its members, - (a) That every such member shall dispose of his produce through the society ; and (b) That any member, who is found guilty of a breach of the bye- law or any such contract, shall reimburse the society for any loss, determined in such manner as may be specified in the bye-laws. 49. Notwithstanding anything contained in this Act or in any other law for the time being in force, - (a) Any person, who makes an application to a society of which he is a member, for a loan shall, if he owns any land or has interest in any land as a tenant, made a declaration in the form prescribed, such declaration shall state that the applicant thereby creates a charge on such land or interest specified in the declaration for the payment of the amount of the loan which the society may make to the member in pursuance of the application, and for all future advances if any, required by him which the society may make to him as such member, subject to such maximum as may be determined by the society, together with interest on such amount of the loan and advances : (b) Any person who has taken a loan from a society of which he is a member, before the date of the coming into force of this Act, and who owns any land or has interest in land as a tenant, and who has not already made such a declaration before the aforesaid date shall, as soon as possible thereafter, make a declaration in the form and to the effect referred to in clause (a); and no such person shall, unless and until he made such declaration, be entitled to exercise any rights as a member of the society ; (c) a declaration made under clause (a) or (b) may be varied at any time by a member, with the consent of the society in favour of which such charge is created ; (d) No member shall alienate the whole or an part of the land or inter- est therein, specified in the declaration made under clause (a) or (b) until the whole amount borrowed by the member together with interest thereon, is repaid in full : Charge on the immovable property of members borrowing from certain societies. APCS ACT 1978 23 Provided that, for the purpose of paying in full to the society the whole amount borrowed by the member together with interest thereon, the member may, with the previous permission in writing of the society and subject to such conditions as the society may impose, alienate the whole or any part of such land or interest thereon : Provided further that, if a part of the amount borrowed by a member is paid, the Central Financing Agency may, on an application from the member, release from the charge created under the declaration made under clause (a) or (b), such part of the movable or immovable property specified in the said declaration as it may deem proper with due regard to the security of the balance of the amount remaining outstanding from the member : Provided further that, standing crops on any such land may be alienated with the previous permission of the society. (e) Any alienation made in contravention of the provision of clause (d) shall be void ; (f) Subject to the prior claim of the Government in respect of land revenue or any money recoverable as land revenue, or any other law for the time being in force in any part of the State there shall be first charge in favour of the society on the land or interest specified in the declaration made under clause (a) or (b), for and to the extent of the dues owing by him on account of the loan ; (g) the record of rights shall also include the particulars of every charge on land or interest created under a declaration under clause (a) or (b) notwithstanding anything contained in any law relating to land revenue for the time being in force ; (h) any sum due to a society in consequence of charge created under a declaration under clause (a) or clause (b) shall on application for its recovery being made by such society accompanied by a certificate signed by the Registrar, be recoverable by the Deputy Commissioner/Additional Deputy Commissioner according to the laws and under the rules for the time being in force for recovery as a public demand under the Bengal Public Demand Recovery Act, 1913. Explanation - For the purpose of this section, the expression “society” means – (i) any resource society, the majority of the members of which are agriculturist and the primary object of which is to obtain credit for its members, or (ii) any society, or any society of the class of societies specified in this behalf by the Government, by a general or special order . APCS ACT 1978 24 50. (1) It shall be compulsory for any office bearer or employee of a society to enter into an agreement in writing with the society, that in case of misappropriation, defalcation or in connection with an amount realizable from such person, shall be realized from his salaries, securities or any amounts that may be payable to him on the strength of the said agreement to be entered into before assuming office bearer or employees. (2) On the execution of such agreement, 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 on 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 wages payable by him as required under the Payment of Wages Act, 1936 on the day on which he makes payment. Such payment shall be valid discharge of the employee’s liability to pay the amount deducted. (3) If after the receipt of a requisition made under the foregoing sub- section, the employer at any time fails to deduct the amount specified in the requisition from the salary or wages payable to the member concerned to makes default in remitting the amount deducted to the society, the employer shall be personally liable for the payment thereof ; and the amount shall be recoverable on behalf of the society from him as a public demand under the Bengal Public Demands Recovery Act, 1913 and the amount so due shall rank in priority in respect of such liability of the employer as wages in arrears. (4) Nothing contained in this section shall apply to person employer in any railways and in mines and oil fields. CHAPTER – V State aid to Societies 51. The Central Government may subscribe directly to the share capital of a society with limited liability upon such terms and conditions as may be agreed upon. 52. The Central Government may, under appropriation made by law, provide moneys to a society for the purchase directly or indirectly of shares in other societies with limited liability. (A society to which moneys are so provided for the aforesaid purpose is hereinafter in this Chapter referred to as an ‘Apex Society). Deduction from salary to meet society’s claim in certain cases. IV of 1936. Direct partner- ship of Central Government in societies. Indirect partnership of Central Government in society. APCS ACT 1978 25 53. (1) An Apex Society which is provided with moneys as aforesaid shall, with such moneys establish a Fund to be called the “Principal State Partnership Fund”. (2) An Apex Society shall utilize the Principal State Partnership Fund for the purpose of – (a) directly purchasing shares in other societies with limited liability (b) providing moneys to a society to enable that society (hereinafter in this referred to as a Central Society to purchase share in other societies with limited liability (the later societies being hereinafter in this Chapter referred to as Primary Societies) : (c) Making payments to the Central Government in accordance with the provisions of this Chapter and for no other purpose. 54. (1) A Central Society which is provided with moneys by anApex Society, from the Principal State Partnership Fund shall with such moneys establish a Fund to be called the “Subsidiary State Partnership Fund”. (2) A Central Society shall utilize the subsidiary State Partnership Fund for the purpose of – (a) Purchasing shares in Primary Society ; (b) Making payment to the Apex Society in accordance with the provisions of this Chapter; and for no other purpose. 55. Shares shall not be purchased in a society from one moneys in the Principal State Partnership Fund or the Subsidiary State Partnership Fund, except with the previous approval of Central Government. 56. Where any shares are purchased in a society by – (a) The Central Government ; or (b) An Apex Society from the Principal State Partnership Fund, or Central Society from the Subsidiary State Partnership Fund as the case may be : the liability in respect of such shares shall in the event of the society of which the shares are purchased being wound up the limited to the amount paid in respect of such shares. 57. An Apex Society which has purchased shares in other societies from the moneys in the Principal State Partnership Fund and a Central Society which has purchased shares in Primary Societies from the money in the Subsidiary State Partnership Fund, shall be entitled only to such dividend on the said share as is decided by the society concerned and is payable to other share holders of the society. Principal State Partnership Fund. Subsidiary State Partnership Fund. Approval of Central Government for purchase of shares. Liability to be limited in respect of certain share. Restriction on amount of dividend. APCS ACT 1978 26 58. (1) If a society in which shares are purchased from the Principal State Partnership Fund is wound up, or is dissolved the Central Government shall not have any claim against the Apex Society which purchased the shares in respect of any loss arising from such purchase but the Central Government shall be entitled to any moneys received by the Apex Society in liquidation proceedings or on dissolution as the case may be. (2) If a society in which shares are purchased from the Subsidiary State Partnership Fund is wound up or dissolved neither the Central Government nor the Apex Society shall have any claim against the Central Society which purchased the shares in respect of any loss arising from such purchase ; but the Apex Society shall be entitled to any moneys received by Central Society in liquidation proceedings or on dissolution as the case may be and such money shall be credited to the Principal State Partnership Fund. 59. (1) All moneys received by anApex Society in respect of share of other societies purchased from the moneys in Principal State Partner- ship Fund on redemption of such shares or by way of dividends or otherwise, shall be credited to that fund. (2) All moneys received by a Central Society in respect of shares of Primary Societies purchased from the moneys in the Subsidiary State Partnership Fund on redemption of such shares or by way of dividends or otherwise shall in the first instance be credited to that Fund and then transferred to the Apex Society which shall credit them to the Principal State Partnership Fund. (3) All moneys and dividends referred to in sub-sections (1) and (2) shall, notwithstanding that the shares stand in the name of the Apex Society, or the Central Society as the case may be, paid to the Central Government. (4) Same as provided in sub-section (3), the Central Government shall not be entitled to any other return on the moneys provided by it to an Apex Society under Section 52. 60. (1) If anApex Society which has established a Principal State Partnership Fund is wound up or dissolved all moneys to the credit of, or payable to that fund shall be paid to the Central Government. (2) If a Central Society which has established a Subsidiary State Partnership Fund is wound up or is dissolved, all moneys to the credit of, or payable to that fund shall be paid and credited to the Principal State Partnership Fund from which it received moneys under clause (b) of sub-section (2) of section 53. Idennity of Apex and Central Societies. Disposal of share capital and dividend, etc. Disposal of Pricipal or Subsidiary. State Partner- ship Fund on State winding up of Apex or Central Society. APCS ACT 1978 27 61. Any amount to be credit of a Principal State partnership Fund or a Subsidiary State Partnership Fund shall not form part of the assets of the Apex Society or the Central Society, as the case may be. 62. Subject to the foregoing provisions of the Chapter – (a) The Central Government may enter into an agreement with anApex Society setting out the terms and conditions on which it shall provide moneys to the Apex Society for the purpose specified in section 52. (b) An Apex Society may, with the previous approval of the Central Government, enter into an agreement with a Central Society setting out the terms and conditions on which it shall provide moneys to that society from the Principal State Partnership Fund for the purpose specified in clause (b) of sub-section (2) of section 53. 63. Notwithstanding anything contained in any law for the time being in force but subject to such conditions as the Central Government, by general or special order may specify in this behalf, the Central Government may – (a) Give loans to a society ; (b) Guarantee the payment of the principal debentures issued by a society or of interest thereon or both or the repayment of the share capital of a society to its members or the payment of dividend thereon at such rates as may be specified by the Central Government ; (c) Guarantee the repayment of loans given by a Co-operative Bank to a society ; (d) Guarantee the repayment of the principal and payment of interest on loans and advances given by the Reserve Bank of India or the Industrial Finance Corporation of India or any other authority constituted under any law for the time being in force ; or (e) Provide financial assistance, in any other form (including subsidies), to a society. 64. The provisions of section 52 to 62 (both inclusive) in this Chapter shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force. CHAPTER – VI Property and Funds of Societies 65. No part of the funds, other than the net profits of a society, shall be paid by way of bonus or dividend, or otherwise distributed among its members ; Principal or Subsidiary State Partner- ship Fund not to form part of assets. Agreement by Central Government and Apex Spociety. Other form of State aid to societies. Provisions of this Chapter to over-ride other laws. Fund not to be divided. APCS ACT 1978 28 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. 66. (1) A society earning profit shall calculate the net profits by deducting from the gross profits for the year, all accrued interest which is overdue or more than six months establishment charges, interest payable on loans and deposits audit fees working expenses including repairs, rent, taxes and depreciation, and after providing for or writing off bad debts and losses not adjusted against any fund created out of profit. A society may, however, add to the net profits for 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 profits brought forward from the previous year, shall be available for appropriation. (2) A society may appropriate its profits to the reserve fund or any other fund to payment of dividends to members on their share, to the contribution to educational fund of the territory level federal society which may be notified in this behalf by the Government to the payment of bonus on the basis of the support from the members and persons who are not members to its business to payment of honoraria, and towards any other purpose which may be specified in the rules or bye-laws. Provided that, no part of the profits shall be appropriated except with the approval of the annual general meeting and in conformity with the Act, rules and bye-laws. 67. (1) Every society which does, or can derive a profit from its transactions shall maintain a reserve fund – (2) In the case of Resource or Producer’s society at least one fourth of the net profits of the society each year, and in the case of any other society, at least one tenth of the net profits of the society each year, shall be carried to the reserve fund; and such reserve fund may be used in the business of the society or may subject to the provisions of section 71, be invested as the Government may, by general, or special order direct or may with the previous sanction of the Government, be used in part for some public purpose likely to promote the objects of this Act, or for some such purpose of the State or of local interest. 68. No society shall pay a dividend to its members at a rate exceeding 25 percent. Appropriation of profit. Reserve fund. Restriction on dividend. APCS ACT 1978 29 69. (1) Every society which declares a dividend to its members at a rate of 4 percent or more shall contribute towards the educational fund of the Territory level federal society which may be notified in this behalf by the Government in such rate as may be prescribed. (2) No society liable to contribute towards the educational funds shall pay a dividend to its members, unless said contribution is made to the federal society notified as aforesaid. An officer willfully failing to comply with the requirement of this section shall be personally li- able for making good the amount to the federal society notified as aforesaid. 70. After, providing for the reserve fund as provided in section 67 and for the educational fund as provided in section 69, a society may set aside a sum not exceeding twenty percent of its net profits and utilize, with the approval of such federal society as may be notified by the Government in this behalf from time to time the whole or part of such sum in contrib- uting to any co-operative purpose or to any charitable purpose within the meaning of section 2 of the Charitable Endowments Act, 1890, or to any other public purpose. 71. A society shall invest or deposit its funds in one or more of the following :- (a) In theArunachal Pradesh State Co-operative Apex Bank Limited. (b) In any of the securities specified in section 20 of the Indian Trusts Act, 1881; (c) In the shares or security bonds or debentures issue by any other society with limited liability ; (d) In any banking company approved for this purpose by the Regis- trar, and on such conditions as the Registrar may from time to time impose ; (e) In any other mode permitted by the rules, or by general or special order of the Government. 72. (1) Any society may establish for its employees a provident fund into which shall be paid the contributions made by its employees and by the society. Such provident fund shall not be used in the business of the society nor shall it form part of the assets of the society, but shall be invested under the provisions of the last preceding section, and shall be administered in the manner prescribed. (2) Notwithstanding anything contained in the foregoing sub-section, a provident fund established, by a society to which the Employees Provident Funds Act, 1952, as applicable, shall be governed by that Act. Contribution to educational fund of the State Federal society. Contribution to public purposes. Investment of funds. II of 1882. XIX of 1952. Employees provident fund. APCS ACT 1978 30 CHAPTER – VII Management of Society 73. Subject to the provisions in this Act and the rules, the final authority of every society shall vest in the general body of members in general meeting summoned in such a manner as may be specified in the bye-laws. 74. The management of every society shall vest in a committee constituted in according with this Act, the rules and bye-laws, which shall exercise such powers and perform such duties as may be conferred or imposed respectively by this Act, the rules and the bye-laws. 74. (A) Number and terms of Board and its office bearer, - (1) The management of every Society shall vest in a Board constituted in accordance with this Act, and the Rules and the Bye-laws made there under, which shall exercise such powers and perform such duties as may be conferred or imposed respectively by this Act, or the Rules and the Bye-laws made there under. Provided that the maximum number of Directors of a Co- operative Society shall not exceed twenty one. Provided further that there shall be reservation of two seats for woman in the Board of every Co-operative Society. (2) The term of office of elected members and its office bearers shall be five years from the date of election and the term of office bearers shall be coterminous with the term of the Board. Provided that, there shall be provisions for co-option of persons to be members of the Board having experience in the field of banking management, finance or specialization in any other field relating to the objects and activities undertaken by the Co-operative Society, as a members of the Board of such Society. Provided further that, the number of such co-opted members shall not exceed two in addition to twenty one Directors specified in the first proviso to clause (1) of this section. Provided also, that such co-opted members shall not have the right to vote in any election of the Co-operative Society in their capacity as such member or to be eligible to be elected as office bearers of the Board. Provided further also, that the functional Directors of a Co- operative Society shall also be the members of the Board and such members shall be excluded for the purpose of counting the total number of Directors specified in the first proviso to clause (1) of this section. Final authority. Committee its powers and functions. APCS ACT 1978 31 74. (B) (i) Notwithstanding anything contained in any other law for the time being in force, made by the Legislature of the State, the election of the members of the Board shall be conducted before the expiry of the term of the Board so as to ensure that the newly elected members of the Board assume office immediately on the expiry of the office of the members of the outgoing Board. (2) The superintendence, direction and control of the preparation of electoral rolls for, and the conduct of, all election to a Co-operative society shall vest in such an authority or body, as may be provided, by law, made by the State Legislature. Provided that, the procedure and guidelines for the conduct of such election shall be evolved separately, as may be deemed appropriate, by such authority or body. 75. The qualifications for the appointment of a Manager, Secretary, Accountant or any other officer of a society shall be such, as may from time to time, be prescribed. 76. (1) Every Society shall, within a period of six months after the date fixed for making-up its accounts for the year under the rules for the time being in force, call a general meeting. Provided that, the Registrar may, by general or special order, extend the period for holding such meeting for a further period not exceeding three months. Provided further that, if in the opinion of the Registrar, such extension is necessary, or such meeting is not called by the society within the extended period (if any) granted by him, the Registrar or any person authorized by him may call such meeting in the prescribed manner and that meeting shall be deemed to be a general meeting duly called by the society. (2) There shall be attached to every balance sheet laid before the general meeting of the Society, a report by its committee with respect to,- (a) The state of the society affairs. (b) The amount if any, which it proposes to carry to any reserve either in such balance sheet, or any other specific balance sheet ; and (c) The amount if any, which it recommends should be paid by way of dividend bonus or honoraria to honorary workers. The committee’s report shall also deal with changes, which have occurred during the year for which the accounts are made up Election of Members of Board. Appointment of Manager, Secretary and other officers. Annual General Meting. APCS ACT 1978 32 in the nature of the Society’s business. The committee’s report shall be signed by its Chairman, or any other member authorized to sign on behalf of the committee/Chairman. (3) At every annual general meeting the balance sheet, the profit and loss account, the auditor’s report and the committee’s report shall be placed for adoption and such other business will be transacted, as may be laid down in the bye-laws for which due notice has to be given. (4) If default is made in calling a general meeting within the period or as the case may be, the extended period prescribed, the Registrar may by order declare any officer or member of the committee whose duty it was to call such meeting, and who without reasonable ground, failed to comply with the provisions of the aforesaid sub-sections, disqualified for being elected and for being an officer or member of the committee for such period not exceeding three years, as may be specified in such an order and if the officer is a servant of the Society, impose a penalty on him to an amount not exceeding one thousand rupees. Before making such an order, the Registrar, however, shall give or cause to be given, a reasonable opportunity to the person concerned of showing cause with regard to the action proposed to be taken against him. (5) Any penalty imposed may be recovered in the manner provided by the Code of Criminal Procedure, 1973, for the recovery of fines imposed by a Magistrate, as if, such fine were imposed by the Magistrate himself. (6) Any penalty imposed under sub-section (5) or under the next succeeding section, may be recovered in the manner provided by the Code of Criminal Procedure, 1973, for the recovery of fines imposed by a Magistrate, as if such fine were imposed by the Magistrate himself. 77. (1) A special general meeting may be called at any time by the Chairman or by a majority of the members of the committee and shall be called within one month – (i) on a requisition in writing of one-fifth of the members of the society or of members the members of which is specified in the bye- laws for the purpose, whichever is lower, or (ii) at the instance of the Registrar, or (iii) in the case of a society which is a member of federal society, at the instance of the committee of such federal society. Special general meeting. II of 1974. APCS ACT 1978 33 (2) Where any officer or a member of the committee whose duty it was to call such meeting without reasonable excuse fails to call such meeting, the Registrar may by order declare such officer or member disqualified for being a member of the committee for such period not exceeding three years, as he may specify in such order; and if the officer is servant of the society, he may impose on him a penalty not exceeding one hundred rupees. Before making an order under this sub-section, the Registrar shall give or cause to be given, a reasonable opportunity to the person concerned of showing cause in regard to the action proposed to be taken against him. (3) If a special general meeting of a society is not called in accordance with the requisition referred to in sub-section (1), the Registrar or any person authorized by him in this behalf shall have power to call such meeting and that meeting shall be deemed to be a meeting duly called by the committee. (4) The Registrar shall have power to order that the expenditure incurred in calling a meeting under sub-section (3) shall be paid out of the funds of the society or by such person or persons who in the opinion of the Registrar, were responsible for the refusal or failure to convene the meeting. 78. (1) No act of a society or a committee or any officer done in good faith in pursuance of the business of the society shall be deemed to be invalid by reason only of some defects subsequently discovered in the organization of the society, or in the constitution of the committee or in the appointment or election of an officer or on the ground that such officer was disqualified for his office. (2) No act done in good faith by any person appointed under this Act, the rules and the bye-laws shall be invalid merely by reason of the fact that his appointment has been cancelled by or in consequence of any order subsequently passed under this Act, rules and the bye-laws. (3) The Registrar shall decide whether anyAct was done in good faith in pursuance of the business of the society; and his decision thereon shall be final. 79. (1) Notwithstanding anything contained in any other law for the time being in force, no Board shall be superseded or kept under suspension for a period exceeding six months. Provided that, the Board may be superseded or kept under suspension in case – (i) of persistent default ; or (ii) of negligence in the performance of its duties ; or Act of societies, etc not to be invalidated by certain defects. Supersession and suspension of Board and interim management. APCS ACT 1978 34 (iii) the Board has committed any act prejudicial to the interest of the Co-operative Society or its members ; or (iv) there is stalemate in the constitution or functions of the Board ; or (v) the authority or body as provided by the Legislature of the State, by law, under clause (2) of article 243ZK of the Constitution has failed to conduct elections in accordance with the provisions of the State Act. Provided further that, the Board of any such Co-operative shall not be superseded or kept under suspension where there is no Government shareholding or loan or financial assistance or any guarantee by the Government. Provided also, that in case of a Co-operative Society carrying on the business of banking, the provisions of the Banking Regulation Act, 1949 shall apply. (2) In case of supersession of a Board, the administrator appointed to manage the affairs of such Cooperative Society shall arrange for conduct of elections within the period specified in section 74(A) and 74(B), as the case may be and handover the management to the elected Board. (3) The conditions of service of the administrator shall be such as provided in this Act or as may be prescribed under the rules or bye- laws made thereunder. (4) The committee or the administrator so appointed shall, subject to the control of the Registrar and to such instructions as he may from time to time give, have the power to exercise all or any of the functions of the committee or of any of the office of the society and take all such action as may be required in the interest of the society. (5) If at any time during any period or extended period referred to in provisos to section 76, it appears to the Registrar that it is no longer necessary to continue to carry on the affairs of the society, as aforesaid, the Registrar may, by an order published in the Official Gazette, direct that the management shall terminate, and on such order being made, the management of the society shall be handed over to the new committee duly constituted. (6) The committee or the administrator shall, at the expiry or termination of its or his term of office, arrange for the constitution of the new committee in accordance with the bye-laws of the society. APCS ACT 1978 35 (7) All acts done or purported to be done by the committee or the administrator during the period, the affairs of the society are carried on by the committee or the administrator under this section shall be binding on the new committee. (8) The Registrar may fix the remuneration of the administrator and any expenses of management which shall be payable out of the funds of the society within such time and at such intervals as the Registrar may fix and if such remuneration or expenses are not paid within such time, and at such interval, the registrar may direct the person having the custody of the fund of the society to pay the administrator. Such remuneration and expenses on priority to any other payment (except any amount recoverable as a public demand under the Bengal Public Demands Recovery Act, 1913), and such person as far as the fund to the credit of the society allow, comply with the order of the Registrar. 80. (1) The Registrar may direct any society or class of societies, to keep proper books or accounts with respect to all sums of money received and expended by the society and the matters in respect of which the receipt and expenditure take place, all sales and purchases of goods by the society and the assets and liabilities of the society and to furnish such statements and returns and to produce such records as he may require from time to time, and the officer or officers of the society shall be bound to comply with his order within the period specified therein. (2) Where any society is required to take any action under this Act, the rules or the bye-laws, or to comply with an order made under the foregoing sub-section and such action is not taken – (a) within the time provided in this Act, the rules or the bye-laws, or the order, as the case may be, or (b) Where no time is so provided, within such time, having regard to the nature and extent of the action to be taken, as the Registrar may specify by notice in writing, the Registrar may himself or through a person authorized by him take such action, at the expenses of the society ; and such expenses shall be recoverable from the society as if it were a public demand under the Bengal Public Demands Recovery Act, 1913. (3) Where the Registrar takes action under sub-section(2), the Registrar may call upon the officer or officers of the society whom he considers to be responsible for not complying with the provisions of this Act, Registrar’s power to enforce performance of obligations. APCS ACT 1978 36 the rules or the bye-laws, or the order made under sub-section (1), and after giving such officer or officers an opportunity of being heard may require him or them to pay to the society the expenses paid or payable by it to the State Government as a result of their failure to take action, and to pay to the assets of the society such sum not exceeding twenty-five rupees as the Registrar may think fit for each day until the Registrar’s directions are carried out. 81. (1) Where the Registrar is satisfied that the books and records of a society are likely to be suppressed, tampered with or destroyed, or the funds and property of a society are likely to be misappropriated or misapplied, the Registrar or the person authorized by him may apply to the Executive Magistrate with whose jurisdiction of society is functioning for seizing and taking possession in the records and property of the society. (2) On receipt of an application under sub-section (1), the Magistrate may in a warrant authorize any police officer not below the rank of a Sub-Inspector, to enter and search any place where the records and property are kept or likely to be kept and to seize them and handover possession thereof to the Registrar or the person authorized by him as the case may be. CHAPTER – VIII Audit, Inquiry, Inspection and supervision 82. Audit of Accounts and returns of the Co-operative Society, - (1) Every Cooperative Society shall be audited by an auditor or auditing firms appointed by the General Body of the Cooperative Society. Provided that, such auditor or auditing firms shall be appointed from a panel approved by the Registrar having required qualification of the auditors and auditing firms. (2) The accounts of every Cooperative Society shall be audited within six months of the closure of the financial year to which the accounts relate. (3) The audit shall include an examination of overdue debts, if any, the verification of the cash balance and securities, and the valuation of the assets and liabilities of Society. (4) The auditor auditing the accounts of the society shall, at all times, have access to all the books accounts, documents, papers, securities, cash and other properties belonging to, or in the custody of the society, and may summon and person in possession, or Registrar’s power to seize records, etc. Audit. APCS ACT 1978 37 responsible for the custody, of any such books, accounts, documents, papers, securities, cash or other properties, to produce the same at any place at the headquarter of the society or any branch thereof. (5) Every person who is, or has at any time been, an officer or employee of the society and every member and the past member of the society shall furnish such information with regard to the transaction and working of the society as the auditor may require. (6) The Auditor shall have the right to receive all notes, and every communication relating to the Annual General meeting of the society and to attend such meeting to hear there at in respect of any part of the business with which he is concerned as auditor. (7) If it appears to the General Body of the Co-operative Society, that it is necessary or expedient to re-audit their accounts, the same may be done with the information of the Registrar. (8) The audit reports of the accounts of theApex Cooperative Societies shall be laid before the State Legislature as per prescribed procedure of laying of such audit report. (9) Every Co-operative Society shall file returns as mentioned below within six months of the closure of every financial year to the Registrar. (i) Annual report of each activities. (ii) Its audited statement of accounts. (iii) Plan for surplus disposal as approved by the General Body of the Co-operative Society ; (iv) List of amendments to the Bye-laws of the Co-operative Society, if any ; (v) Declaration regarding date of holding of General Body meeting and conduct of election when due; and (vi) Any other information required by the Registrar in pursuance of any of the provisions of this Act. 83. If the result of the audit held under the last preceding section disclose any defects in the working of a society, the society shall within three months from the order of the audit report, explain to the Registrar the defects or the irregularities pointed out by the auditor, and take steps to rectify the defects and remedy irregularities and report to the Registrar the action taken by it thereon. The Registrar may also make an order Rectification of defects in accounts. APCS ACT 1978 38 directing the society or its officers to take such action, as may be specified in the order to remedy the defects, within the time specified therein, where the society concerned is a member of a federal society, such order shall be made after consulting the federal society. 84. (1) The Registrar may, of his own motion, himself or by a person duly authorized by him in writing in this behalf, hold an inquiry into the constitution, working and financial conditions of a society. (2) The Registrar shall hold such an inquiry – (a) On the requisition of a society duly authorized by rules made in this behalf to make such requisition, in respect of one of its members, such member being itself a society, or (b) On the application of a majority or the committee of a society, or (c) On the application of one-third of the members of society. (3) (a) All officers, members and past members of the society in respect of which an inquiry, is held, and any other who in the opinion of the officer holding the inquiry is in possession of information, books and papers relating to the society, shall furnish such information as in their possession and produce all books and papers relating to the society which are in their custody or and otherwise give to the officer holding an inquiry all assistance in connection with the inquiry when they can reasonably give. (b) If any such person refuse to produce to the Registrar or any person authorized by him under sub-section (1), any book or papers which it is his duty under clause (1) to produce or to answer any question which is put to him by the Registrar or the person authorized by the Registrar in pursuance of sub-clause (a), the Registrar or the person authorized by the Registrar may certify the refusal and the Registrar after hearing any statement which may be offered in defense, punish the defaulter with a penalty not exceeding five hundred rupees. Any sum imposed as penalty under this section shall, on the application by the Registrar of the person authorized by him, to a Magistrate having jurisdiction be recoverable by the Magistrates as if it were a fine imposed by himself. (4) The result of any inquiry under this section shall be communicated to the society whose affairs have been investigated. Inquiry by Registrar. APCS ACT 1978 39 (5) It shall be competent for the Registrar to withdraw any inquiry from the officer to whom it is entrusted, and to hold the inquiry himself or entrust it to any other person as be deems fit. 85. The Registrar, or any person, authorized by general or special order in this behalf by him, may inspect a Cooperative Society. For the purpose of inspection, the Registrar or the person so authorized by him shall at all times have access to all books, accounts, papers, vouchers, securities, stock and other property of the society and may in the event of serious irregularities discovered during inspection taken them into custody and shall have power to verify the cash balance of the society and subject to the general or special order of the Registrar to call a committee meeting, general meeting, Every Officer or member of the society shall furnish such information with regard to the working of the society as the Registrar or the person making such inspection may require. 86. (1) On the application of a creditor of a society who – (a) Satisfies the Registrar that the debit is a sum than due, and that he has demanded payment thereof and has not received satisfaction within reasonable time, and (b) Deposits with the Registrar such sum as the Registrar may require as security for the cost of any inspection of the books of the society. The Registrar may, if he think it necessary, inspect or direct any person or persons authorized by him by order in writing in this behalf to inspect the books of the society. (2) The Registrar shall communicate the result of any such inspection to the applicant, and to the society whose books have been inspected. (3) It shall be competent for the Registrar to withdraw any order of inspection from the officer to whom it is entrusted and to inspect himself or entrust it to any other person as he deems fit. 87. (1) Where an inquiry is held under section 84 or an inspection is made under the last preceding section, the Registrar may apportion the costs, or such part of the costs, he may think just between the society, the members or creditors demanding the inquiry or inspection, the officers or former officers and the members or past members or the estates of the deceased members of the society. Inspection of the societies. Inspection of books of indebted society. Cost of inquiry and inspection. APCS ACT 1978 40 Provided that – (a) no order of apportionment of the costs shall be made under this section, unless the society or persons or the legal repre- sentative of the deceased person liable to pay the costs there- under; has or have been heard, or has or have had a reason- able opportunity of being heard ; (b) the Registrar shall state in writing the grounds on which the costs are apportioned. (2) No expenditure from the funds of a society shall be incurred for the purpose of defraying any costs in support of any appeal preferred by any person other than the society against an order made under the foregoing sub-section. 88. Any sum awarded by way of costs under the last preceding section, may be recovered, on an application by the Registrar to a Magistrate having jurisdiction in the place where the person from whom the money is claimable resides or carries on business, and such Magistrate shall proceed to recover the same in the same manner as if it were a fine imposed by himself. 89. (1) If the result of any inquiry held under section 84 or an inspection made under section 85 disclose any defects in the constitution, working of financial condition of the books of a society, the Registrar may bring such defects to the notice of the society. The Registrar may also make an order directing the society or its officers to take such action as may be specified in the order to remedy the defects, within the time specified therein. (2) The society concerned may, within sixty days from the date of any order made by the Registrar under the foregoing sub-section appeal against it to the State Government. (3) The State Government may, in deciding the appeal annual, reverse, modify or confirm the order of the Registrar. (4) If a society fails to rectify the defects disclosed in the course of or as a result of an audit under section 82 or fails to rectify the defects as directed by the Registrar, and where no appeal has been made to the State Government within the time specified in the order, or where on appeal so made the State Government has not annualled, reversed or modified the order, the Registrar may himself take steps to have the defects of the society who in his opinion, has or have failed to rectify the defects. Recovery of costs. Registrar to bring defects disclosed in inquiry or inspection of notice of society. APCS ACT 1978 41 90. (1) Where, in the course of or as a result of an audit under section 82 or an inquiry under section 84 or an inspection under section 86 or the winding up of a society, the Registrar is satisfied on the basis of the report made by the auditor or the person authorized to make inquiry under section 84 or the person authorized to inspect the books under section 86 or the liquidator under section 109 or otherwise that any person who has taken any part in the organization or management of the society or any deceased or past or present officer of the society has within a period of five years, prior to the date of such audit, inquiry, inspection or order for winding up, misapplied or retained, or become liable or accountable for, any money or property of the society, or has been guilty of misfeasance or breach of trust in relation to the society, the Registrar or a person authorized by him in that behalf, may frame charge against such person or persons and after giving reasonable opportunity to the person concerned and in the case of a deceased person to his representative who inherits his estate to answer the charges and make an order requiring him to repay or restore the money or property or any part thereof ; with interest at such rate as the Registrar or the person authorized under this section may determine, or to contribute such sum to the assets of the society by way of compensation in regard to the misapplication, retention, misfeasance, or from the trust as he may determine. (2) The Registrar or the person authorized under sub-section (1) in making any order under this section may provide therein for the payment of the cost or any part thereof, as he thinks just, and he may direct that such costs or any part thereof shall be recovered from the person against whom the order has been issued. (3) This section shall apply, notwithstanding that the act is one for which the person concerned may be criminally responsible. 91. The Registrar or the persons authorized by him, when acting under sections 84, 86 or 90 shall have the power to summon and enforce the attendance or any person to give evidence or to compel the production of any document or other material object by the same means and in the same manner as is provided in the case of Civil Court under the Code of Civil Procedure 1908, or the analogous, law in force in the State of Arunachal Pradesh. 92. (1) The State Government may constitute or recognize one or more cooperative federal authorities, in such manner as may be prescribed and subject to such conditions as the State Government may impose, for supervision of a society or a class or societies and may frame rules for making grants to such an authority. Power of Registrar to assess damages against delinquent promoters, etc. Power to enforce the attendance etc. V of 1908. Constitution on recognition of federal authority to supervise working of societies. APCS ACT 1978 42 (2) The State Government may, by general or special order require a society or a class of societies to make contribution of such sum every year as may be fixed by the Registrar towards the recoupment of expenditure which the Government or any person authorized in that behalf has incurred or is likely to incur, in respect of supervision of societies. (3) A society to which sub-section (2) is applicable shall pay to such authority such fee as may be prescribed within a reasonable time and, if it fails to pay such fee within that reasonable time, the authority may recover it as if it were a public demand under the Bengal Public Demands Recovery Act, 1913. 93. (1) If the Registrar or any person authorized by him in this behalf, while making audit, inspection inquiry or supervision as the case may be, believes or has reason to have that the registered society is not keeping or maintaining the account books and records, of society’s property or finds or reasonably suspects gross negligence of duties, misappropriation or misuse of funds of the society, irregularity in recording proceedings or keeping accounts or books, he shall have power to take possession of any of the books registers or documents, cash in hand or account books of the society and remove such seized property or keep in proper custody such seized property till is disposed of any manner as may be directed by the Registrar. (2) The persons seizing the properties should prepare duplicate copies of inventory of the properties, seize with his signature and require the officer or member from whose possession or custody the property is seized to put his signature in witness thereof and if such officer or member refuses to sign, then the person seizing the property shall call upon two or more person to sign seizure list. A copy of the list prepared under this section signed by the witness shall be delivered to the office of the society. (3) The Registrar shall take immediate steps by way of audit or inspection and pass such orders, as he may think fit. (4) The Administrative head of the respective place shall give police help to all officer mentioned in sub-section (1) of this section when sought for. Power to seize record of society. APCS ACT 1978 43 CHAPTER – IX D