INDEX

Sr No.
1

Particulars

Meaning Of Co-Operative Society

Page No
2

Characteristics of Co-operative Society

Types of Co-operative Societies

Formation of a Co-opeative Society

Registration of Society

By Laws / Regulations of Co-operative Societies

11

Refrences

35

Meaning Of Co-Operative Society:

A co-operative society is an association of persons who have voluntarily
joined together to achieve a common economic and social end through the
formation of a jointly-owned and democratically controlled business
organisation. Members make equitable contributions to the capital required
and accept a fair share of the risks and benefits of the undertaking.
Co-operative societieswork on the principles of self-help and mutual
assistance to provide services for their members. These include credit,
consumer, medical, insurance, dental, transport, security, food, housing,
travel, childcare and welfare services.
Characteristics of Co-operative Society:
A co-operative society is a special type of business organisation different
from other forms of organsation you have learnt earlier. Let us discuss its
characteristics.
i.

Open membership: The membership of a Co-operative Society is

open to all those who have a common interest. A minimum of ten
members are required to form a cooperative society. The Co
operative societies Act does not specify the maximum number of
members for any co-operative society. However, after the
formation of the society, the member may specify the maximum
number of members.

ii.

Voluntary Association: Members join the co-operative society

voluntarily, that is, by choice. A member can join the society as
and when he likes, continue for as long as he likes, and leave the
society at will.

iii.

State control: To protect the interest of members, co- operative

societies are placed under state control through registration.
While getting registered, a society has to submit details about the
members and the business it is to undertake. It has to maintain
books of accounts, which are to be audited by government auditors.

iv.

Sources of Finance: In a co-operative society capital

contributed by all the members. However, it can easily raise

is

loans and
registration.

secure

grants

from

government

after

its

v.

Democratic Management: Co-operative societies are managed on

democratic lines. The society is managed by a group known as
Board of Directors. The members of the board of directors are
the elected representatives of the society. Each member has a
single vote, irrespective of the number of shares held. For
example, in a village credit society the small farmer having one
share has equal voting right as that of a landlord having 20 shares.

vi.

Service motive: Co-operatives are not formed to maximise profit

like other forms of business organisation. The main purpose of
a Co-operative Society is to provide service to its members. For
example, in a Consumer Co-operative Store, goods are sold to
its members at a reasonable price by retaining a small margin
of profit. It also provides better quality goods to its members
and the general public.

vii.

Separate Legal Entity: A Co-operative Society is registered under

the Co-operative Societies Act. After registration a society
becomes a separate legal entity, with limited liability of its
members. Death, insolvency or lunacy of a member does not
affect the existence of a society. It can enter into agreements with
others and can purchase or sell properties in its own name.

viii.

Distribution of Surplus: Every co-operative society in addition

to providing services to its members, also generates some profit
while conducting business. Profits are not earned at the cost of its
members. Profit generated is distributed to its members not on
the basis of the shares held by the members (like the company
form of business), but on the basis of members participation in
the business of the society. For example, in a consumer cooperative store only a small part of the profit is distributed to
members as dividend on their shares; a major part of the profit
is paid as purchase bonus to members on the basis of goods
purchased by each member from the society.

ix.

Self-help through mutual cooperation: Co-operative Societies

thrive on the principle of mutual help. They are the

organisations of financially weaker sections of society. Cooperative Societies convert the weakness of members into
strength by adopting the principle of self-help through mutual cooperation. It is only by working jointly on the principle of Each
for all and all for each, the members can fight exploitation and
secure a place in society.
Advantages of Co-operative Society:
A Co-operative
advantages:

form

of business

organisation

has

the

following

i.

Easy Formation: Formation of a co-operative society is very easy

compared to a joint stock company. Any ten adults can voluntarily
form an association and get it registered with the Registrar of Cooperative Societies.

ii.

Open Membership: Persons having common interest can form

a co-operative society. Any competent person can become a
member at any time he/she likes and can leave the society at will.

iii.

Democratic Control: A co-operative society is controlled in a

democratic manner. The members cast their vote to elect their
representatives to form a committee that looks after the day-to-day
administration. This committee is accountable to all the members
of the society.
Limited Liability: The liability of members of a co-operative
society is limited to the extent of capital contributed by them.
Unlike sole proprietors and partners the personal properties of
members of the co-operative societies are free from any kind of
risk because of business liabilities.

iv.

v.

Elimination of Middlemens Profit: Through co-operatives the

members or consumers control their own supplies and thus,
middlemens profit is eliminated.

vi.

State Assistance: Both Central and State governments provide all

kinds of help to the societies. Such help may be provided in the
form of capital contribution, loans at low rates of interest,
exemption in tax, subsidies in repayment of loans, etc.

vii.

Stable Life: A co-operative society has a fairly stable life and it

continues to exist for a long period of time. Its existence is not
affected by the death, insolvency, lunacy or resignation of any of its
members.

Limitations of Cooperative Society:

Besides the above advantages, the co-operative form of business
organisation also suffers from various limitations. Let us learn these
limitations.
i.
Limited Capital: The amount of capital that a cooperative
society can raise from its member is very limited because the
membership is generally confined to a particular section of the
society. Again due to low rate of return the members do not
invest more capital. Governments assistance is often
inadequate for most of the co-operative societies.
ii.

Problems in Management: Generally it is seen that cooperative societies do not function efficiently due to lack of
managerial talent. The members or their elected representatives are
not experienced enough to manage the society. Again, because of
limited capital they are not able to get the benefits of professional
management.

iii.

Lack of Motivation: Every co-operative society is formed to

render service to its members rather than to earn profit. This does
not provide enough motivation to the members to put in their best
effort and manage the society efficiently.

iv.

Lack of Co-operation: The co-operative societies are formed with

the idea of mutual co-operation. But it is often seen that there is a
lot of friction between the members because of personality
differences, ego clash, etc. The selfish attitude of members may
sometimes bring an end to the society.

v.

Dependence on Government: The inadequacy of capital and

various other limitations make cooperative societies dependant on
the government for support and patronage in terms of grants,
loans subsidies, etc. Due to this, the government sometimes
directly interferes in the management of the society and also audit
their annual accounts.

Let us now sum up

ADVANTAGES

DISADVANTAGES

Easy formation
Open membership
Democratic Control
Limited Liability
Elimination of Middlemans
Profit
State Assistance
Stable Life

Limited Capital
Problems in Management
Lack of Motivation
Lack of Cooperation
Dependence on Government

Types of Co-operative Societies:

There are two types of co-operative societies.

A primary society is a registered co-operative all of whose members

are individual persons who, or institutions which, have the
qualifications for membership.

A secondary society is a registered co-operative all of whose

registered members are co-operative societies, trade unions, or cooperative societies and trade unions.

Producer cooperative societies. These are formed to eliminate the

middlemen and capitalist groups from the industrial production, its
main purpose goods for the requirements of its members. Surplus
productions are also supplied to out sliders in the open market at
profit. All the necessary activities as production, management and
marketing are performed by the members themselves. Its members
get dividend on the basis of the capital invested by them.
a) To purchases the raw materials and other factors at most
economical prices.
b) To produces the goods at the most economical level.
c) To supervises
the production
most
efficiently and
effectively.
d) To disposes of the surplus production to non members at
maximum price.
e) To eliminates the middlemen and capitalists.
f) To remove the workers grievances in respect of working
conditions, wages etc.
g) To arrange for the democratic control of the industrial unit.

Consumer cooperative societies. This society is the voluntary

association of ordinary people formed with the object of obtaining
daily requirements of the members. It directly purchases the goods
at large scale from the producer or wholesalers at whole sale price.
It thus eliminates capitalists, retailers and other middlemen from the
channel of distribution and members are in a position to make their
purchase at cheaper rate. Any one can become member by purchasing
one share of the society. Sometimes goods are also supplied to nonmembers but they do not share in the profit of the society. Profit earned
by the store is distributed among the members according to the value
of the purchases conducted by the manager who is elected by the
members. Generally is two types are popular in the world.
a) Retail cooperative store.
b) Wholesale cooperative

store.
Formation of a Co-opeative Society:

Stage 1: A Pro-tem Committee

A Pro-tem Committee (at least 3 members):

Undertakes a feasibility study to determine the economic and

financial viability of the proposed society. A viability statement
consisting of the business plan and the cash flow projections (at least 5
years) is to be prepared.

Considers the objects and the constitution of the society and drafts
the By-laws.

Stage 2: Seeking the Registrar's Comments

After completing the feasibility study, the Pro-tem Committee is to
submit the viability statement, their particulars (i.e. Name, NRIC No, Date
of Birth, Citizenship, Occupation, Address and the Office Tel No.) and the
draft By-laws which include matters spelt out in The Schedule of the Cooperative Societies Act for the Registrar's comments.
Stage 3: Preliminary Meeting

After obtaining the Registrar's comments, a Preliminary Meeting of at least

10 persons qualified for membership is convened to:

adopt the By-laws

comments); and

pass the resolution to accept all the rights, duties and liabilities
prescribed by the By-laws.

(which

have

incorporated

the

Registry's

Qualifications for membership:

a) 16 years (12 years for school co-ops)
b)
registered society or trade union
c)
citizen or resident in India
d)
is not legally or mentally disabled
e)
is not an undischarged bankrupt
f)
meet residence, employment, profession requirements as prescribed
in by-laws
g)
credit co-op individual membership restricted to those who belong to
pre-existing common bond of association or community of interest
h)
has not been convicted of an offence punishable with
imprisonment
i)
is able to meet such other requirements prescribed by the By-laws.
Stage 4: Application for registration
The following documents are required to be submitted:
SR.
No.

Signatures

Type of Document

a)

For credit society Form 1

At
least
persons

b)

For
non-credit
Form 2

At
least
persons

society

Remarks
Re
qui
red
10

10

Provide:
Name
PIN
No.
Nationality
Occupation
Address
Provide:
Name
PIN
No.
Nationality
Occupation

c)
d)

By-laws
Not applicable
Not applicable
Viability
statement
(business plan and cash flow
forecast)

e)

Minutes of the Preliminary

Meeting

All
present

Address
Nil
Cash
flow
forecast
of at
least 5 years. If
viability statement
is
unchanged from
earlier submission,
no
need
to
resubmit.

those

Upon registration, the Pro-tem Committee shall continue to manage the

affairs of the co-operative society until the First Meeting of its members
which is held not later than 3 months after receipt of the Notice of
registration.
The business of the first meeting shall include the election of officers who
shall serve until the first annual general meeting.
No person shall be eligible for membership of the Committee of
Management of a co-operative society if:
a) he is under 21 years of age (except in the case of school cooperatives);
b) he is not a Singapore citizen or resident in Singapore, subject to the
Registrar's approval;
c) he is an undischarged bankrupt;
d) he has been convicted of an offence involving fraud or
dishonesty
5-year disqualification period applicable for non-credit co-ops

No time bar for credit co-ops;

e) he has been convicted of an offence under the Co-operative

Societies Act;
f) he has been dismissed as an employee of a co-operative society; and
g) he has been found to have previously misused or mismanaged the
funds of a co-operative society.
Registration of Society:

State Government will appoint Registrar of Cooperative Societies. State

Government can appoint persons to assist Registrar and confer on such
persons all or any of powers of Registrar. [section 3]. Function of Registrar
starts with registration of a society. He has powers of general supervision
over society. Returns of Society are to be filed with Registrar. He can order
inquiry or inspection against society. He can order dissolution of society.
Societies which may be registered
A society, which has as its object the promotion of economic interests of its
members in accordance with cooperative principles, can be registered as
a Society. Similarly, a society established with the object of facilitating
operation of such a society can also be registered under the Act. The society
can be registered with limited or unlimited liability. However, unless State
Government otherwise directs, (1) Liability of a society of which a member
is a registered society shall be limited. (2) Liability of a society of which
object is to creation of funds to be lent to members, and of which majority of
members are agriculturists and of which no member is a registered society
shall be unlimited [section 4]. Thus, a registered society can be member
of another society, but liability of such other society must be limited, unless
State Government otherwise directs.
Who can form a society:
A society can be formed with at least 10 members of age above 18 years.
If object of society is creation of funds to be lent to its members, all the
members must be residing in same town, village or group of villages or all
members should be of same tribe, class, caste or occupation, unless Registrar
otherwise directs. - - The provision of minimum 10 members or residing
in same town/village etc. is not applicable if a registered society is member
of another society. - - The last word in name of society should be
Limited. If the Society is registered with limited liability. [section 6].
Registrar is empowered to decide whether a person is agriculturist or nonagriculturist or whether he is resident of same town/village or whether the
members belong to same caste/tribe etc. and his decision will be final.
[section 7].
Restrictions on society with limited liability:
If a society has limited liability, any individual member of such society
cannot have share capital more than one-fifth of total capital. An

individual member cannot have interest in shares exceeding Rs 1,000.

- - This restriction of 20% shares or Rs 1,000 shares value is not
applicable to a registered society which is member of another society.
[section 5]. - - Thus, if a registered society is member of another
society, it can hold shares exceeding 20% or exceeding Rs 1,000 in value.
Bye-laws:
Any Amendment to bye-laws shall be registered with Registrar. If
Registrar is satisfied that the amendment is not contrary to Act or rules,
he will register the amendment. He will issue a certificate of registration
along with copy of amendment certified by him, which is conclusive
evidence that the amendment has been duly registered. [section 11].
Model Bye- laws:

If your co-operative society is old it may continue to follow old

byelaws. But when a new co-operative society approaches the registrar it
would have to compulsorily adopt the new byelaws.
Under the Maharashtra Co-operative Societies Act 1960, a housing
society is free to adopt its own set of laws that governs its members. These
are called byelaws and are limited to the Maharashtra state.
Byelaws are the rules that govern a co-operative society and its
members and these undergo changes from time to time through
amendments whenever the government feels the need for changes.
For instance, the cash on hand limit under the old byelaws was Rs
300. Cash on hand is maintained by the society for day to expenses such as
plumber's payments for instance. Over the years it was felt that the amount
was not sufficient. And hence in the new byelaws the same has been
increased to Rs 4,500.
Such changes under various headings become imminent and that is how
the new model byelaws came into effect from July 2, 2001. Since then, the
government has made it mandatory for co-operative societies in
Maharashtra to adopt the new byelaws.

Byelaws are district specific. In other words while these are more or less
the same there could be minor changes depending on which district you
fall in whether it is Mumbai, Pune or Thane.
Enumerated here are some of the differences between the old and the new
byelaws.
Transfer of flat: Under the old byelaws in case you were to transfer your
flat, a charge of 2.5% of the difference in the purchase value minus sale
value would be levied as transfer charges. But under the new model
byelaw number 45 all that has been scrapped and a common charge is
levied as per the general body resolution subject to the condition that it is not
above Rs 25,000.
Maintenance: Under the old byelaws the maintenance charged varied among
members. For instance, let us say the monthly maintenance amount
payable was Rs 500. Now if the flat was given on leave and licence, the
maintenance charge would be hiked to Rs 1,000.
But as per the new byelaws, maintenance is 10% of service charges. Service
charges include salary of the office staff, liftmen, watchman, the property
taxes, electricity charges, water charges, etc. in case the society has an
independent office.
That apart it also includes entrance fees for affiliation to the housing
federation and any other co-operative institution, audit fees for internal,
statutory and re-audit if any besides expenses incurred at meetings of the
general body, the committee and the sub-committee retainer fees, legal
charges, statutory enquiry fees among others.
Purchase of second flat: Under the old byelaws there were restrictions on
holding more than one flat. You needed to obtain the registrar's
permission to purchase a second flat in the same society or within the limits
of a certain district.
You were also needed to submit an affidavit saying that you do not hold
any other flat in the same district. For instance, if you were the owner of a
flat in Mumbai you could not own another flat in the same city. But another
flat in Pune or Thane was allowed.
In the new byelaws the same has been done away with. So you can very
well purchase a flat in the same society. Under Byelaw number 62 of the
new model byelaws all you need to do is make an application to the society
saying that you intend to purchase another flat. It's the society's consent that
matters.

Transfer among family members: Under the old byelaws there were
transfer charges applicable even if the transfer was between family
members.
But then under Section 6 read with byelaw number 3 of the model
byelaws, no transfer charge is to be levied in case of transfer of flat to any
one of the family members. Under byelaw number 3(25) family members
means the following group of persons: husband, wife, father, mother, sister,
brother, son, daughter, son in law, brother in law, sister in law, daughter in
law, grandson, granddaughter
Membership:
The members of an association are the subscribers and the persons and
eligible organizations admitted to membership in the association according
to its rules.
Membership share requirement
An association, in its rules, must designate a class of shares as the
membership shares and provide, as a condition of the admission of a person
or eligible organization as a member of the association, that the person or
eligible organization subscribe for a minimum number of membership
shares.
Members under 19 years of age
(1) An association may provide in its rules for the admission to
membership in the association of persons under 19 years of age who
are at least 16 years of age.
(2) Rules referred to in subsection (1) are subject to subsection (3).
(3) Despite the Infants Act, the Age of Majority Act or the common law
and subject to subsection (4) of this section, an individual admitted
to membership in an association who is under 19 years of age and who is
at least 16 years of age
(a) has the same obligations, rights and legal capacity as a member
of the association who has reached 19 years of age, and
(b) may be sued,but only in respect of membership in an association and
of any indebtedness or obligation to the association.

(4) An individual under 18 years of age is not eligible to be a director

or officer of an association.

Termination Of Membership:
(1) This section applies only to an association other than a housing
cooperative.
(2) An association may provide in its rules for the termination of the
membership of a member.
(3) Rules referred to in subsection (2) are subject to this section and sections
36 to 39.
(4) Subject to any rules of an association for termination of membership,
and to subsections (5) and (6) of this section and sections 36 to 39, an
association may terminate the membership of a member if
(a) the member has engaged in conduct detrimental to the association,
(b) the member has not paid money due by the member to the association
within a reasonable time after receiving written notice to do so from
the association, or
(c) in the opinion of the directors, based on reasonable grounds, the
member
(i) has breached a material condition of an agreement with the
association, and
(ii) has not rectified the breach within a reasonable time after
receiving written notice to do so from the association.
(5) An association may exercise the powers under this section to terminate
the membership of a member only by a resolution of the directors
requiring a majority of at least 3/4 of all the directors and passed at a
meeting of the directors called to consider the resolution.

(6) Sections 156 and 208 do not apply to termination of a membership in

an association on the grounds described in subsection (4) (b) or (c).
Termination of membership in a housing cooperative:
(1) A housing cooperative may provide in its rules for the termination of
the membership of a member.
(2) Rules referred to in subsection (1) and the rules that a housing
cooperative may adopt under subsection (3) of this section are
subject to this section and sections 36 to 39.
(3) A housing cooperative by its rules may adopt either of the
following grounds as constituting grounds for termination of the
membership of a member who has a right to possession or occupancy of
residential premises that is dependent on the member's membership:
(a) the member has not paid rent, occupancy charges or other money
due by the member to the housing cooperative in respect of the
residential premises and has not rectified the nonpayment within a
reasonable time after receiving written notice to do so from the
housing cooperative;
(b) the member
(i) has not paid rent, occupancy charges or other money due by
the member to the housing cooperative in respect of the
residential premises, or
(ii) in the opinion of the directors, based on reasonable grounds,
has breached a material condition of an agreement between
the member and the housing cooperative relating to the
member's
(A) possession
premises, or

or

occupancy

of

the

residential

(B) use of the property of which those premises form part,

and has not rectified the nonpayment or breach

within a reasonable time after receiving written
notice to do so from the housing cooperative.
(4) Subject to any rules of a housing cooperative for termination of
membership, and to subsections (5) and (6), a housing cooperative may
terminate the membership of a member if the member has engaged in
conduct detrimental to the housing cooperative.
(5) A housing cooperative may exercise the powers under this section to
terminate the membership of a member only by a resolution of the
directors requiring a majority of at least 3/4 of all the directors and
passed at a meeting of the directors called to consider the resolution.
(6) Sections 156 and 208 do not apply to termination under this section of
a membership in a housing cooperative.
Notices respecting the termination of members:
(1) A member of an association whose membership is proposed to be
terminated by a resolution of the directors
(a) is entitled to at least 7 days' notice of the meeting at which the
resolution is to be considered, together with a statement of the
grounds on which the member's membership is proposed to be
terminated, and
(b) may appear, either personally or by or with an agent or counsel,
to make submissions at the meeting.
(2) Within 7 days after the date on which a proposed resolution to terminate
a membership referred to in subsection (1)
(a)

is withdrawn,
(b) is defeated because it does not receive the required majority, or
(c) is passed by the required majority,

the directors must deliver written notice of the outcome to the

member.

Appeal from termination of membership:

(1) A person whose membership in an association is terminated under
section 34 or 35 may appeal the decision of the directors at the next
meeting of the association, by delivering a notice of appeal to the
association within 7 days after delivery of written notice under
section 36 (2).
(2) A person whose membership in an association is terminated and who,
under and within the time limited by subsection (1), appeals the
termination of the membership, continues, despite the resolution of
the directors terminating the membership, to be a member of the
association unless the members at the general meeting to which the
appeal is brought confirm the termination of the membership
(a) in the case of a membership in an association other than a housing
cooperative,
(i) if the membership is terminated for any of the reasons referred
to in section 34 (4) (b) or (c), by a resolution requiring a
simple majority or, if provided by the association's rules, a greater
majority, or
(ii) if the membership is terminated for the reason referred to in
section 34 (4) (a), by a special resolution, or
(b) in the case of a membership in a housing cooperative,
(i) if the membership is terminated for any of the reasons referred
to in section 35 (3), by a resolution requiring a simple
majority or, if provided by the housing cooperative's rules, a
greater majority, or
(ii) if the membership is terminated for the reason referred to in
section 35 (4), by a special resolution.
(2.1) If the members of a housing cooperative confirm the termination
of a person's membership under subsection (2) (b), the housing
cooperative must
(a) promptly serve the person with

(i)

a notice that the resolution or special resolution confirming

the termination was passed by the members, and

(ii)

a notice in the prescribed form of the person's right to appeal the

termination under subsection (3), and

(b) comply with other prescribed conditions.

(3) A person who has been served with a notice under subsection (2.1) (a)
(i) may appeal the termination to the court before the expiry of the 30
day period beginning on the day after the person is served with the notice
on any of the following grounds:
(a) the housing cooperative failed to observe the principles of natural
justice in terminating the membership;
(b) the decision of the
supported by the facts;

housing

cooperative

is

not

reasonably

(c) the decision of the housing cooperative is not authorized by section

35.
(3.1) Despite section 171, a person who has commenced an appeal in
accordance with subsection (4) of this section continues to be a member
of the association for the purposes of an application under section 172.1,
and may include with the appeal an application under section 172.1 for an
order of possession.
(4) An appeal to the court under subsection (3) must be commenced in
accordance with Rule 49 of the Rules of Court by notice of appeal in
Form 59
(a) filed in a registry of the court before expiry of the 30 day period
referred to in subsection (3), and
(b) served on the housing cooperative before expiry of the 14 day
period beginning on the day after the notice of appeal is filed in the
registry of the court.
(4.1) If a person commences an appeal under subsection (3) from a
decision of a housing cooperative to terminate that person's
membership, the housing cooperative may file an application under

section 172 (1) with its appearance under Rule 49 (6) of the Rules of
Court.
(4.2) If an appeal is commenced under this section,
(a) any application by the housing cooperative for an order under section
172 (1) must be filed with the appearance, and
(b) any application by the member under section 172.1 must be filed with
the notice of appeal so that the court may determine at the same time
all the issues between the parties relating to the termination.
(5) An appeal to the court under subsection (3) may be a new hearing
and the court may hear all the evidence the court considers relevant
including, but not limited to, the evidence of the housing cooperative
and the person, and the court
(a) must either
(i) despite section 39, restore the membership in the housing
cooperative of the person whose membership was terminated by
the resolution or special resolution, with the restoration to be
effective on and after a date specified by the court, and if an
application has been made under section 172.1, the court must
make an order of possession in favour of the member, or
(ii) confirm the resolution or special resolution by which the members
of the housing cooperative confirmed the termination of the
person's membership, and if an application has been made
under section 172, the court must make an order of possession
in favour of the housing cooperative, and
(b) may make any other order that the court considers appropriate.
(6) An appeal from a decision of the court under subsection (5) lies to the
Court of Appeal with leave of a justice of the Court of Appeal.

Requirement to redeem shares on membership withdrawal or

termination:
(1) A person who withdraws from membership in an association is entitled,
subject to section 66 (2), to require the association to redeem
(a)

the person's membership shares, and

(b) any of the person's investment shares in classes restricted
distribution to members only within a period and on conditions
association may establish under its rules, or immediately
unconditionally, if the association's rules do not establish
period or conditions.

for
the
and
any

(2) A person whose membership in an association is terminated under

this Division is entitled, subject to section 66 (2), to require the
association to redeem
(a)

the person's membership shares, and

(b) any of the person's investment shares in classes restricted for
distribution to members only.

(3) The entitlement, described in subsections (1) and (2), of a person

who withdraws from membership in a housing cooperative or whose
membership in a housing cooperative is terminated, is postponed until
the person has given up the actual possession and occupancy of any
residential premises in which the person had a right to possession or
occupancy dependent on the person's membership.
(4) In the case of
(a)

a community service cooperative, or

(b) an association to which section 173 or 196 (2) applies, the refund
on account of membership shares must not exceed the amount paid
up on the member's membership shares.

Rights and liabilities of members:

If liability of members is not limited by shares, each member shall have one
vote irrespective of amount of his interest in the capital. [section 13(1)]. If
liability of members of a registered society is limited by shares, each
member will have as many votes as may be prescribed in bye-laws. [section
13(2)]. If a registered society has invested in shares of other registered
society, it can vote by appointing a proxy. [section 13(3)]. - - A member of
registered society shall not exercise his rights as member, unless he has
made payment to society in respect of membership or has acquired
interest in society, as may be prescribed by rules or bye-laws. [section 12].
Thus, if there is any default in payment to society, the member cannot
exercise his rights.

Secretary of the Co-operative Society:

(1) The committee shall appoint a secretary and, unless the person so appointed is
a member of the committee, shall have power to fix the remuneration for his
services.
(2) The secretary, if a member of the committee, shall be unpaid.
(3) No appointment made under paragraph (1) of this rule shall be valid and
effective, and no remuneration fixed thereunder shall be payable or
recoverable, unless approved by the Registrar. Every such approval shall be
communicated in writing by the Registrar to the committee.
(4) In the event of failure on the part of the committee to appoint a secretary,
the Registrar shall appoint a secretary and, unless the person so
appointed is a member of the committee, the Registrar shall fix his
remuneration. Every appointment made by the Registrar under this
paragraph shall be valid and effective, and every remuneration fixed by
the Registrar shall be payable and recoverable, as if made or fixed by the
committee.
(5) The secretary shall occupy his office until his services are determined by
one month's notice in writing given by the committee:

Provided that no determination as aforesaid shall be valid and effective until

the approval of the Registrar in writing has been obtained therefor.
(6) The secretary may resign his office by giving one month's notice to the
committee in writing.
(7) On the occurrence of a vacancy in the office of the secretary, the provisions
of this rule shall apply mutatis mutandis to the filling of such vacancy.

Duties of the Secretary the Co-operative Society:

(a) to attend all meetings of the registered society and of the committee and to
carry out all the instructions of the committee;
(b) to be present at the office during the hours of business as fixed from time
to time by the committee;
(c) to record the whole of the transactions of the registered society in the books
provided for that purpose; to conduct correspondence on behalf of the
registered society; to prepare the annual statement of accounts and balance
sheet; and to have charge of the documents, books and vouchers for
payments and receipts on behalf of the registered society;
(d) to receive all applications for loans and bring the same before the committee;
to prepare receipts and other documents in the form prescribed for
signature by borrowers prior to their taking the loans sanctioned; and with
the authority of the committee to supply information about the registered
society which may be applied for by members;
(e) to receive all moneys due or payable to the registered society and issue
receipts to the payer for same from a counterfoil receipt book supplied to
the registered society for the purpose by the Registrar, obtaining at the
same time the signature of the person making the payment on the
counterfoil;
(f) to deposit with the treasurer from moneys collected by him on behalf of
the registered society all sums in excess of an amount to be

fixed from time to time by the committee and to obtain from him a
receipt on a form to be taken from the prescribed counterfoil book;
(g) to keep separate all moneys belonging to the registered society and on no
account to mix them with any other moneys; and to produce at all times when
called upon to the committee, or the Registrar or any person authorized by
him, all moneys in his hands belonging to the registered society;
(h) to make payments as authorized by the committee, obtaining the payee's
signature on the payment book prescribed by the Registrar: Provided that if
the payment is made outside the registered society's office the secretary
shall, in every instance, obtain from the payee a manuscript receipt and
attach it to a separate page of the payment book;
(i) to issue a receipt on a form to be taken from the prescribed counterfoil
book when receiving money from the treasurer; and
(j) to summon meetings as provided in the rules.

Meetings Held in a Co-operative society:

General meeting
The supreme authority of a society shall be vested in the general
meeting of its members, at which every member has a right to attend and to
vote.
Meeting of delegates
(1) Notwithstanding section 50, if a primary society has more than 3,000
members, the general meeting of members may be replaced by a meeting of
delegates, each delegate representing a certain number of individual
members. All provisions of this Act referring to general meetings of
members shall include a reference to meetings of delegates.
(2) Every individual person who is a member of a society may be eligible
for election as a delegate.
(3) The meeting of delegates shall consist of not less than 20 delegates, elected
from among the members. The delegates may not vote by proxy.
(4) The society shall make by-laws specifying the method by which the delegates
are elected and the number of individual members represented by each
delegate and the term of office of the delegates.
(5) The Registrar may, on application by a primary society with less than 3,000
members, allow the society to replace the general meeting

of members by a meeting of delegates, if for any special reason he thinks

fit to do so.
First meeting
(1) Every society shall within 3 months after receipt of the notice of
registration, unless the time is extended by the Registrar, hold a first
meeting of its members.
(2) The business of the first meeting shall include the election of officers
who shall serve until the first annual general meeting and shall be eligible for
re-election.
Annual general meeting
(1) Every society shall provide in its by-laws for an annual general meeting
to be convened by the committee of management and to be held as soon as
practicable, but not later than 6 months after the end of the financial year,
unless the approval of the Registrar has, within that period of 6 months,
been obtained to extend that period, and may also provide for other general
meetings.
(2) Unless the by-laws otherwise provide, a notice of every general meeting
shall be sent to each member or delegate entitled to attend the meeting at
least 15 clear days prior to the date of the meeting. The notice shall state the
matters for discussion and the resolutions to be proposed and no other
subject shall be discussed without the consent of the majority of the
members present and voting at the general meeting.
Functions of annual general meeting
The functions of the annual general meeting of a society are
(a) to consider and confirm the minutes of the last annual general meeting
and of any other intervening general meeting;
(b) to consider the auditors report, the reports of the committee of
management and any report made by the Registrar or his representative;
(c) to approve the financial statements;
(d) to consider and resolve the manner in which any available net surplus
shall be distributed or invested subject to the provisions of this Act and the
by-laws;
(e) to consider and adopt any amendments to the by-laws;
(f) to elect or remove members of the committee of management;
(g) to appoint, where necessary, the auditors of the society;
(h) to consider and determine the maximum amount the society may borrow;
and

(i) to transact any other general business of the society of which due notice has
been given to members.
Extraordinary general meeting
(1) An extraordinary general meeting of a society may be convened at any time by
the committee of management of the society, except that at least 7 clear
days", and in the case of a proposed amendment to by- laws at least 15 clear
days", written notice of the meeting and of the subjects on the agenda for
discussion have been sent to each member or delegate, as the case may be, or
given as provided in the by-laws.
(2) An extraordinary general meeting of a society shall be convened by the
committee of management on receipt of a requisition for such a meeting
signed by at least 20% or 60 of the members or delegates of the society,
whichever is the less, stating the objects of the meeting.
(3) If the committee of management fails to convene a meeting in accordance
with subsection (2) within one month of receiving the requisition for the
meeting, the members making the requisition shall have power to convene
the meeting themselves by notice to all members of the society stating the
objects of the meeting and the fact that the committee of management has
failed to convene the meeting.
(4) The Registrar or his representative may at any time convene a special
general meeting of a society and may also direct what matters shall be
discussed at the meeting.
Co-operative Society Act 1904:
In India, cooperative societies are regarded as instruments to mobilize and
aggregate community effort to eliminate layers of middlemen in any
product or service supply chain hence resulting in greater benefit sharing for
the grassroot farmer,worker or artisans. The Cooperative Credit Societies
Act, 1904 enabled formation of cooperatives for supplying to farmers cheap
credit and protect them from exploitation in the hands of the moneylenders.
The cooperative act 1912 expanded the sphere of cooperation and
provided for supervision by central organization.
Co-operative Society Act 1904:
In India, cooperative societies are regarded as instruments to mobilize and
aggregate community effort to eliminate layers of middlemen in any
product or service supply chain hence resulting in greater benefit sharing for
the grassroot farmer,worker or artisans. The Cooperative Credit Societies
Act, 1904 enabled formation of cooperatives for

supplying to farmers cheap credit and protect them from exploitation in the
hands of the moneylenders. The cooperative act 1912 expanded the sphere
of cooperation and provided for supervision by central organization.
Maharashtra Co-operative Societies Act 1960:
An Act further to amend the Maharashtra Co-operative Societies Act, 1960.
WHEREAS it is expedient further to amend the Maharashtra Co- operative
Societies Act 1960, for the purpose hereinafter appearing; It is hereby
enacted in the Forty-seventh Year of the Republic of India as follows :1.This Act may be called the Maharashtra Co-operative Societies
(Amendment) Short title Act, 1996.
2.In section 9 of the Maharashtra Co-operative Societies Act, 1960 (hereinafter
referred to as the principal Act). in such-section (2), after the words
deemed to have been registered the words and thereafter the Registrar
shall issue a certificate of registration under his seal and signature within a
period of fifteen days shall be added. Our Comments :-Section 9, had been
amended to clarify the provision as regards Registration of Co-operative
Society more explicit.
3.In section 22 of the principal Act, in sub-section (2), after the words deemed
to have been admitted as a member of the society. the words If any
question arises whether a person has become a deemed member or
otherwise, the same shall be decided by the Registrar after giving a
reasonable opportunity of being heard to all the concerned parties. shall be
added.
4.In section 23 of the principal Act, in sub-section (IA), after the words
become a member of such society, the words, If any question arises
whether a person has become a deemed member otherwise, the same shall be
decided by the Registrar after giving a reasonable opportunity of being heard
to all the concerned parties, shall be added.
Our Comments : Section 22(2) and 23 (1A) has been amended to clarify
that as regards membership the power shall be exercised by the registrar.
5.In section 27 of the principal Act, for sub-section (9), the following subsection shall be substituted, namely :

(9) No nominee of the Governmetn or any financing bank on the committee

of any society shall be entitled to vote at any election of officers of such
committee such as, the President, Vice President, Chairman, Vice Chairman,
Secretary, Treasurer or any other officers by whatsoever designation called,
who holds the office by virtue of his election to that office.
Our Comments : Section 27 has been amended so that the powers as
regards Governmetn nominees as regards election of office bearers have been
0curtailed.
6. In section 73-1 D of the principal Act.
a) in such-section (I),
i) for the words two-third majority the words simple majority shall be
substituted;
ii) for the words for the time being entitled to sit and vote at any meeting of the
committee the word as entitled to vote at the election of such President,
Vice President, Chairman , Vice Chairman, Secretary, Treasurer or any other
officer shall be substituted.
(b) in sub section (2) for the time being entitled to site and vote at any meeting of
the committee the words entitled to elect the President, Vice President,
Chairman, Vice Chairman, Secretary, Treasurer or any other officer, as the
case may be, of the committee shall be substituted;
(c) in sub-section (7) for the words six months the word as one year
shall be substituted.
Our comments :- section 73 (1D) have been amended so that no confidence
motion can be passed with simple majority instead of 2/3 majority.
Subsection 7 of this section has been amended so that the requisition for a
Fresh Motion of no confidence can be brought only after a period of one
year. Instead of the previous period of six months. The term of the
administrator is now extended upto one year from the previous period of six
months.
7. In section 73BB of the principal Act, in sub-section (I)
(a) for the words union then the selection shall be made by the union with the
largest membership, and where there is no union at all, then by an election by
such employees from amongst themselves in the prescribed manner the
words recognised union or unions and where there is no union at all or
where there is a dispute in relation to such issues including whether a union is
recognised or not, then the seats so reserved shall be filled by an election by
such employees from amongst themselves in the prescribed manner shall be
substituted.
(b) the following Explanation shall be added at the end, namely :Explanation For the purpose of this section the members of the
committee shall mean and include the representatives of the
employees.

8. In section 73BB of the principal Act,

(a) to sub-section (I), the following Explanation shall be added, at the end,
namely :Explanation For the purpose of determining the number of committee
members under this sub-section, committee members who are elected, coopted nominate, appointed or otherwise occupying the position on the
committee under 73B, 73BB and under this sub-section shall not be
included,
(b) in sub-section (2), for the existing proviso, the following proviso shall be
substituted, namely :Provided that, where the bye-law of a society already provide for
reservation of seats for women on the committee thereof, the total number of
seats to be reserved for women shall be equal to the number of seats
specified in sub-section (I).
9.In section 73H (2), of the principal Act, in sub-section (2), for the words,
where there is a willful failure on the part of the committee to hold election
to the committee before the expiration of its term, the committee before the
expiration of its term, the committee before the expiration of its term, the
committee the words The committee shall be substituted. Our
Committee, to conduct the elections before the expiry of the tenure of the
committee. The above said amendment appears to have been made to bring
consistency with the provisions of subsection (2B) of subsection 73-G.
10.In section 77A of the principal Act, in sub-section (3), the following proviso
shall be added, namely :Provided hat, if a new committee is not, or cannot be constituted at the
expiry or termination of the term of office of the committee or Administrator,
for any reason beyond the control of the committee or Administrator, the
term of office of the committee or Administrator, as the case may be, shall be
deemed to be extended, until the new committee is duly constituted.
Our Comments :- Section 77 (A) has been amended so that the tenure of
office of the Managing Committee or Administrator would be deemed to
have been extended if for any reason whatsoever a new committee cannot
be constituted before the expiry of the term office.
11.In section 78 of the principal Act, in sub-section (3) the following proviso
shall be added, namely:Provided that, the member who has been so removed, shall not be eligible to
be re-elected, re-appointed, re-nominated, or re-co-opted, as a member of any
committee from the date on which he has been so removed or till such lesser
period as may be laid down under the provisions of section 73FFF or 144E,
as the case may be.
Our Comments :- if a member of the committee has been removed

under this section than he cannot be re-elected, reappointed, renominated or

recopted as a member of the Managing Committee for one full term from the
date he has been removed or for such period as laid down in provisions of
sections 73FFF or 144E of the M.C.S. Act 1960.
Our comments : Subsection of 104 has been substituted to specify in
which cases the appeal should lie with the registrar and in which places the
appeal should lie with the State Government.
12.In section 104 of the principal Act, for sub-section (I), the following subsection shall be substituted, namely :(1) The committee or any member of the society ordered to be wound up
may prefer an appeal against the final order of winding-up within two
months form the date of the issue of the order made under section 102.(a) if made by the Registrar, or the special or Additional or Joint Registrar on
whom the powers of the Registrar are conferred, to the State Government
;
(b) If made by any person other than the Registrar, or the Special or Additional
or Joint Registrar on whom the powers of the Registrar are conferred, to
the Registrar.
Provided that, no appeal shall lie against order, issued under sub- clause (i),
(ii) or (iii) of clause (c) of sub-section (I) of section 102.
13.In section 112B of the principal Act, in sub section (I) in clause (b), in subclause (iv), for the words such employees, the following shall be
substituted namely :such employees. Where there is no recognised union or unions or where
there is no union at all, the employees shall elect representatives from
amongst themselves. The election shall be held by the Collector in the
manner laid down in Chapter XI-A of this Act.
14.In section 148 of the principal Act, for sub-section (3), the following subsection shall be substituted, namely :(3) No prosecution under this Act shall be lodged, except with the previous
sanction of the Registrar.
Management of society:
Each society will be managed by Committee. - - Committee means the
governing body of a registered society to whom the management of its affairs
is entrusted. [section 2(b)]. Officer of society includes a Chairman,
Secretary, treasurer, member of Committee or other person

empowered under rules or bye-laws to give directions in regard to

business of society. [section 2(e)].
Registered Society is body corporate:
A registered cooperative society is a body corporate with perpetual
succession and common sea. (just like a company). It can hold property,
enter into contracts, institute and defend suit and other legal proceedings and
to do all things necessary for the purposes of its constitution. [section
18].
Audit:
(1) The Registrar shall audit or cause to be audited by some person authorised
by him by general or special order in writing in this behalf the accounts of
every registered society once at least in every year.
(2) The audit under sub-section (1) shall include an examination of overdue
debts, if any, and a valuation of the assets and liabilities of the society.
(3) The Registrar, the Collector or any person authorised by general or special
order in writing in this behalf by the Registrar shall at all times have access
to all the books, accounts, papers and securities of a society, and every
officer of the society shall furnish such information in regard to the
transactions and working of the society as the person making such
inspection may require.
Inspection of affairs of society:
Registrar can hold an enquiry or direct some person authorised by him to hold
enquiry in following circumstances (a) Of his own motion (b) Request of
Collector (c) Application by majority of committee members of society or
(d) At least one-third of members of society. [section 35(1)]. All officers
and members of society shall furnish necessary information to registrar or
person authorised by him. [section 35(2)].
1)The Registrar may of his own motion, and shall on the request of the
Collector, or on the application of a majority of the committee, or of not
less than one- third of the members, hold an inquiry or direct some person
authorised by him by order in writing in this behalf to hold an inquiry into
the constitution, working and financial condition of a registered society.
(2) All officers and members of the society shall furnish such information
in regard to the affairs of the society as the Registrar or the person
authorised by the Registrar may require.

The Birth of Amul and development of Indias Dairy

Cooperative Movement:
The birth of Amul at Anand provided the impetus to the cooperative dairy
movement in the country. The Kaira District Cooperative Milk
Producers Union Limited was registered on December 14, 1946 as a
response to exploitation of marginal milk producers by traders or
agents of existing dairies in the small town named Anand (in Kaira
District of Gujarat). Milk Producers had to travel long distances to
deliver milk to the only dairy, the Polson Dairy in Anand. Often milk
went sour as producers had to physically carry the milk in individual
containers, especially in the summer season. These agents arbitrarily
decided the prices depending on the production and the season. Milk is a
commodity that has to be collected twice a day from each cow/buffalo. In
winter, the producer was either left with surplus / unsold milk or had to
sell it at very low prices. Moreover, the government at that time had given
monopoly rights to Polson Dairy (around that time Polson was the most well
known butter brand in the country) to collect milk from Anand and supply
it to Bombay city in turn. India ranked nowhere amongst milk producing
countries in the world in 1946.
Angered by the unfair and manipulative trade practices, the farmers of Kaira
District approached Sardar Vallabhbhai Patel (who later became the first
Deputy Prime Minister and Home Minister of free India) under the
leadership of the local farmer leader Tribhuvandas Patel. Sardar Patel
advised the farmers to form a Cooperative and supply milk directly to
the Bombay Milk Scheme instead of selling it to Polson (who did the same
but gave low prices to the producers). He sent Morarji Desai (who later
became Prime Minister of India) to organize the farmers. In 1946, the
farmers of the area went on a milk strike refusing to be further oppressed.
Thus the Kaira District Cooperative was established to collect and process
milk in the District of Kaira in 1946. Milk collection was also
decentralized, as most producers were marginal farmers who were in a
position to deliver 1-2 litres of milk per day. Village level cooperatives were
established to organize the marginal milk producers in each of these villages.

The Cooperative was further developed & managed by Dr. V Kurien

along with Shri H M Dalaya. The first modern dairy of the Kaira Union was
established at Anand (which popularly came to be known as AMUL dairy
after its brand name). Indigenous R&D and technology development at
the Cooperative had led to the successful production of skimmed milk
powder from buffalo milk the first time on a commercial scale
anywhere in the world. The foundations of a modern dairy industry in India
were thus laid since India had one of the largest buffalo populations in the
world.
The success of the dairy co-operative movement spread rapidly in
Gujarat. Within a short span five other district unions Mehsana,
Banaskantha, Baroda, Sabarkantha and Surat were organized. In order to
combine forces and expand the market while saving on advertising and
avoid a situation where milk cooperatives would compete against each other
it was decided to set up an apex marketing body of dairy cooperative unions
in Gujarat. Thus, in 1973, the Gujarat Co-operative Milk Marketing
Federation was established. The Kaira District Co- operative Milk
Producers Union Ltd. which had established the brand name AMUL in
1955 decided to hand over the brand name to GCMMF (AMUL). With the
creation of GCMMF (AMUL), we managed to eliminate competition
between Gujarats cooperatives while competing with the private sector as
a combined stronger force. GCMMF (AMUL) has ensured remunerative
returns to the farmers while providing consumers with products under the
brand name AMUL.
This was possible due to the leadership of the founder Chairman of
AMUL, Tribhuvandas Patel and the vision of the father of the White
Revolution, Dr. Verghese Kurien who worked as a professional manager
at AMUL. Numerous people contributed to this movement which would
otherwise not have been possible.
Dr. Verghese Kurien, the World Food Prize and the Magsaysay Award
winner, is the architect of Indias White Revolution, which helped India
emerge as the largest milk producer in the world.
Impressed with the development of dairy cooperatives in Kaira District
& its success, Shri Lal Bahadur Shastri, the then Prime Minister of India
during his visit to Anand in 1964, asked Dr. V Kurien to replicate the
Anand type dairy cooperatives all over India. Thus, the National Dairy
Developed Board was formed and Operation Flood Programme was
launched for replication of the Amul Model all over India.
Operation Flood, the worlds largest dairy development programme, is based
on the experience gained from the Amul Model dairy cooperatives. The
facilities at all levels are entirely farmer-owned. The

cooperatives are able to build markets, supply inputs and create value- added
processing. Thus, Amul Model cooperatives seem to be the most appropriate
organizational force for promoting agricultural development using modern
technologies and professional management and thereby generating
employment for the rural masses and eradicating poverty in these
undeveloped areas. India has already demonstrated the superiority of this
approach.

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http://www.accommodationtimes.com/legal/society/ma
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