The Multi-State Co-operative Societies Act, 2002
# THE MULTI-STATE CO-OPERATIVE SOCIETIES ACT, 2002

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# ARRANGEMENT OF SECTIONS

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CHAPTER I

PRELIMINARY

SECTIONS

1. Short title, extent and commencement.
2. Application.
3. Definitions.

CHAPTER II

CENTRAL REGISTRAR AND REGISTRATION OF MULTI-STATE CO-OPERATIVE SOCIETIES

4. Central Registrar.
5. Multi-State co-operative societies which may be registered.
6. Application for registration.
7. Registration.
8. Registration certificate.
9. Multi-State co-operative society to be body corporate.
10. Bye-laws of multi-State co-operative societies.
11. Amendment of bye-laws of a multi-State co-operative society.
12. When amendment of bye-laws comes into force.
13. Change of name.
14. Address.
15. Publication of name by multi-State co-operative society.
16. Liability.
17. Amalgamation or transfer of assets and liabilities, or division of multi-State co-operative

societies.

18. Central Registrar to prepare scheme of amalgamation or reorganisation of a co-operative bank in

certain cases.

19. Promotion of subsidiary institution.
20. Liability of a co-operative bank to Deposit Insurance and Credit Guarantee Corporation.
21. Cancellation of registration certificate of multi-State co-operative societies in certain cases.
22. Conversion of a co-operative society into a multi-State co-operative society.

CHAPTER III

REGISTRATION AND FUNCTIONS OF FEDERAL CO-OPERATIVES

23. Registration of federal co-operative.
24. Functions of federal co-operative.

CHAPTER IV

MEMBERS OF MULTI-STATE CO-OPERATIVE SOCIETIES AND THEIR DUTIES, RIGHTS AND LIABILITIES

25. Persons who may become members.
26. Nominal or associate member of society.
27. Educational course for members.
28. Members not to exercise rights till due payment made.
29. Disqualification for member of a multi-State co-operative society.
30. Expulsion of members.
31. Vote of members.


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SECTIONS

32. Manner of exercising vote.
33. Restriction on holding of shares.
34. Restriction on transfer of shares or interest.
35. Redemption of shares.
36. Transfer of interest on death of members.
37. Liabilities of past member and estate of deceased member.

CHAPTER V

DIRECTION AND MANAGEMENT OF MULTI-STATE CO-OPERATIVE SOCIETIES

38. Constitution, powers and functions of general body.
39. Annual general meeting of general body.
40. Special general meeting of general body.
41. Board of directors.
42. Association of employees in management decision making process.
43. Disqualifications for being a member of board.
44. Prohibition to hold office of chairperson or president or vice-chairperson or vice-president in

certain cases.

45. Establishment of Co-operative Election Authority.
45A. Power of Chairperson.
45B. Removal and suspension of Chairperson, Vice Chairperson and Members.
45C. Disclosure and declaration of interest.
45D. Resignation of Members.
45E. Filling of casual vacancy.
45F. Restriction of reemployment.
45G. Vacancies, etc., not to invalidate proceedings of Authority.
45H. Meetings of Authority.
45-I. Functions of Authority.
45J. Elections of members of board.
45K. Appointment of Returning Officer and other officers.
45L. Power to issue directions.
46. Holding of office in co-operative society.
47. Removal of elected members by general body.
48. Nominee of Central Government or State Government on board.
49. Powers and functions of board.
50. Meeting of board.
51. Chief Executive.
52. Powers and functions of Chief Executive.
53. Committees of board.
54. Securing possession of records, etc.

CHAPTER VI

PRIVILEGES OF MULTI-STATE CO-OPERATIVE SOCIETIES

55. Charge and set-off in respect of share or contribution or interest of members.
56. Share or contribution or interest not liable to attachment.
57. Register of members.
58. Admissibility of copy of entry as evidence.
59. Exemption from compulsory registration of instruments.
60. Deduction from salary to meet multi-State co-operative society’s claim incertain cases.
61. Government aid to multi-State co-operative societies.


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CHAPTER VII

PROPERTIES AND FUNDS OF MULTI-STATE CO-OPERATIVE SOCIETIES

SECTIONS

62. Funds not to be divided by way of profit.
63. Disposal of net profits.
63A. Establishment of Co-operative Rehabilitation, Reconstruction and Development Fund.
63B. Rehabilitation and reconstruction of sick societies.
63C. Financial assistance to multi-State co-operative societies for development.
64. Investment of funds.
65. Restriction on contribution.
66. Restriction on loans.
67. Restrictions on borrowings.
68. Restriction on other transactions with non-members.
69. Contributory provident fund.

CHAPTER VIII

AUDIT, INQUIRY, INSPECTION AND SURCHARGE

70. Appointment and remuneration of auditors.
70A. Concurrent Audit.
71. Provision as to resolutions for appointing or removing auditors.
72. Qualifications disqualifications of auditors.
73. Powers and duties of auditors.
74. Signature of audit report, etc.
75. Reading and inspection of auditor’s report.
76. Right of auditor to attend general meeting.
77. Power of Central Government to direct special audit in certain cases.
78. Inquiry by Central Registrar.
79. Inspection of multi-State co-operative societies.
80. Inspection of books of indebted multi-State co-operative societies.
81. Costs of inquiry and inspection.
82. Recovery of costs.
83. Repayment, etc.

CHAPTER IX

SETTLEMENT OF DISPUTES

84. Reference of disputes.
85. Limitation.

CHAPTER IXA

REDRESSAL OF COMPLAINTS

85A. Co-operative Ombudsman.

CHAPTER X

WINDING UP OF MULTI-STATE CO-OPERATIVE SOCIETY

86. Winding up of multi-State co-operative societies.
87. Winding up of co-operative bank at the direction of Reserve Bank.
88. Reimbursement to the Deposit Insurance Corporation by liquidator.
89. Liquidator.
90. Powers of liquidator.
91. Disposal of surplus assets.
92. Priority of contributions assessed by liquidator.
93. Power of Central Registrar to cancel registration of a multi-State co-operative society.


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CHAPTER XI

EXECUTION OF DECREES, ORDERS AND DECISIONS

SECTIONS

94. Execution of decisions, etc.
95. Execution of orders of liquidators.
96. Attachment before award.
97. Central Registrar or arbitrator or person authorised to be civil court for certain purposes.
98. Recovery of sums due to Government.
98A. Review of decision.

CHAPTER XII

APPEALS AND REVIEW

99. Appeals.
100. No appeal in certain cases.
101. Review.
102. Interlocutory orders.

CHAPTER XIII

SOCIETIES WHICH BECOME MULTI-STATE CO-OPERATIVE SOCIETIES CONSEQUENT ON

REORGANISATION OF STATES

103. Co-operative societies functioning immediately before reorganisation of States.

CHAPTER XIV

OFFENCES AND PENALTIES

104. Offences and penalties.
105. Cognizance of offences.
105A. Provisions of this Act not in derogation of any other law.

CHAPTER XV

MISCELLANEOUS

106. Appointment of Co-operative Information Officer.
106A. Copy of rules and bye-laws, etc., for inspection.
107. Place of keeping and inspection of, registers and returns.
108. Inspection of books of account, etc., of multi-State co-operative society.
109. Annual accounts and balance-sheet.
110. Minutes of proceedings of general meetings and of board and other meetings.
111. Minutes to be evidence.
112. Presumptions to be drawn where minutes duly drawn and signed.
113. Inspection of minutes book of general meetings.
114. Liquidator to be public servant.
115. Notice necessary in suits.
116. Power to amend Schedule.
117. Bar of jurisdiction of courts.
118. Indemnity.
119. Opening of branches.
120. Filing of returns.
120A. Filing of applications, documents, inspections, etc., in electronic form.
120B. Application of Banking Regulation Act, 1949.
121 C t i A t t t l


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SECTIONS

122. Central Government’s power to give directions to specified multi-State co-operative societies in

public interest.

123. Supersession of board of specified multi-State co-operative society.
124. Power to make rules.
125. Power to remove difficulties.
126. Repeal and saving.

THE FIRST SCHEDULE.

THE SECOND SCHEDULE.

THE THIRD SCHEDULE.


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# THE MULTI-STATE CO-OPERATIVE SOCIETIES ACT, 2002

 ACT NO. 39 OF 2002

[3rd July, 2002.]

# An Act to consolidate and amend the law relating to co-operative societies, with objects not
 confined to one State and serving the interests of members in more than one State, to facilitate the voluntary formation and democratic functioning of co-operatives as people’s institutions based on self-help and mutual aid and to enable them to promote their economic and social betterment and to provide functional autonomy and for matters connected therewith or incidental thereto.

BE it enacted by Parliament in the Fifty-third Year of the Republic of India as follows:—

CHAPTER I

PRELIMINARY

**1. Short title, extent and commencement.—(1) This Act may be called the Multi-State Co-operative**

Societies Act, 2002.

(2) It extends to the whole of India.

(3) It shall come into force on such date[1] as the Central Government may, by notification in the

Official Gazette, appoint and different dates may be appointed for different provisions of this Act and any
reference in any such provision to the commencement of this Act shall be construed as a reference to the
coming into force of that provision.

**2. Application.—This Act shall apply to—**

(a) all co-operative societies, with objects not confined to one State which were incorporated

before the commencement of this Act,—

(i) under the Co-operative Societies Act, 1912 (2 of 1912), or

(ii) under any other law relating to co-operative societies in force in any State or in pursuance

of the Multi-unit Co-operative Societies Act, 1942 (6 of 1942) or the Multi-State Co-operative
Societies Act, 1984 (51 of 1984),

and the registration of which has not been cancelled before such commencement; and

(b) all multi-State co-operative societies.

**3. Definitions.—In this Act, unless the context otherwise requires,—**

(a) “area of operation” means the area from which the persons are admitted as members;

2[(aa) “Authority” means the Co-operative Election Authority established under sub-section (1)

of section 45;]

(b) “board” means the board of directors or the governing body of a multi-State co-operative

society, by whatever name called, to which the direction and control of the management of the affairs
of the society is entrusted;

(c) “bye-laws” means the bye-laws for the time being in force which have been duly registered or

deemed to have been registered under this Act and includes amendments thereto which have been
duly registered or deemed to have been registered under this Act;

(d) “Central Registrar” means the Central Registrar of Co-operative Societies appointed [3][as per

clause (f) of article 243ZH of the Constitution read with sub-section (1) of section 4] and includes any
officer empowered to exercise the powers of the Central Registrar under sub-section (2) of that
section;

1. 19th August, 2002, _vide_ notification No. G.S.R. 571(E), dated 16th August, 2002, _see_ Gazette of India, Extraordinary,

Part II, sec. 3(i).


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(e) “Chief Executive” means a Chief Executive of a multi-State co-operative society appointed

under section 51;

(f) “co-operative bank” means a multi-State co-operative society which undertakes banking

business;

1[(fa) “Co-operative Ombudsman” means the Ombudsman appointed by the Central Government

under section 85A;]

(g) “co-operative principles” means the co-operative principles specified in the First Schedule;

(h) “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;

2*   -   -   -   
(j) “Deposit Insurance Corporation” means the Deposit Insurance and Credit Guarantee

Corporation established under section 3 of the Deposit Insurance Corporation Act, 1961 (47 of 1961);

(k) “federal co-operative” means a federation of co-operative societies registered under this Act

and whose membership is available only to a co-operative society or a multi-State co-operative
society;

3[(ka) “financial year”, in relation to any multi-State co-operative society or class of such

societies, means the year ending on the 31st day of March of the year and where the accounts of such
society or class of such societies are, with the previous sanction of the Central Registrar, balanced on
any other day, the year ending on such day;]

(l) “general body”, in relation to a multi-State co-operative society, means all the members of that

society and in relation to a national co-operative society or a federal co-operative means all the
delegates of member co-operative societies or delegates of multi-State co-operative societies and
includes a body constituted under the first proviso to sub-section (1) of section 38;

(m) “general meeting” means a meeting of the general body of a multi-State co-operative society

and includes special general meeting;

(n) “member” means a person joining in the application for the registration of a multi-State

co-operative society and includes a person admitted to membership after such registration in
accordance with the provisions of this Act, the rules and the bye-laws;

(o) “member co-operative” means a co-operative society or a multi-State co-operative society

which is member of a federal co-operative;

(p) “multi-State co-operative society” means a society registered or deemed to be registered under

this Act and includes a national co-operative society and a Federal co-operative;

(q) “multi-State co-operative society with limited liability” means a society having the liability of

its members limited by its bye-laws to the amount, if any, unpaid on the shares, respectively, held by
them or to such amount as they may, respectively, thereby undertake to contribute to the assets of the
society, in the event of its being wound up;

(r) “national co-operative society” means a multi-State co-operative society specified in the

Second Schedule;

(s) “notification” means a notification published in the Official Gazette [3][and the expression

‘notified’ with its cognate meanings and grammatical variations shall be construed accordingly;]

(t) “officer” means a president, vice-president, chairperson, vice-chairperson, managing director,

secretary, manager, member of a board, treasurer, liquidator, an administrator appointed under section
123 and includes any other person empowered under this Act or the rules or the bye-laws to give
directions in regard to the business of a multi-State co-operative society;

(u) “prescribed” means prescribed by rules;

1. Ins. by Act 11 of 2023, s. 2, (w.e.f. 3-8-2023).


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(v) “Reserve Bank” means the Reserve Bank of India constituted under the Reserve Bank of India

Act, 1934 (2 of 1934);

(w) “rules” means the rules made under this Act.

CHAPTER II

CENTRAL REGISTRAR AND REGISTRATION OF MULTI-STATE CO-OPERATIVE SOCIETIES

**4. Central Registrar.—(1) The Central Government may appoint a person to be the Central Registrar**

of Co-operative Societies and may appoint such other persons as it may think fit to assist the Central
Registrar.

(2) The Central Government may, by notification, direct that any power exercisable by the Central

Registrar under this Act (other than the power of registration of a multi-State co-operative society) shall,
in relation to such society, and such matters as may be specified in the notification, be exercisable also by
any other officer of the Central Government or of a State Government as may be authorised by the
Central Government subject to such conditions as may be specified therein:

Provided that no officer of a State Government shall be empowered to exercise such power in relation

to a national co-operative society.

**5. Multi-State co-operative societies which may be registered.—(1) No multi-State co-operative**

society shall be registered under this Act, unless,—

(a) its main objects are to serve the interests of members in more than one state; and

(b) its bye-laws provide for social and economic betterment of its members through self-help and

mutual aid in accordance with the co-operative principles.

(2) The word “limited” or its equivalent in any Indian language shall be suffixed to the name of every

multi-State co-operative society registered under this Act with limited liability.

**6. Application for registration.—(1) For the purposes of registration of a multi-State co-operative**

society under this Act, an application shall be made to the Central Registrar in such form and with such
particulars as may be prescribed.

(2) The application shall be signed,—

(a) in the case of a multi-State co-operative society of which all the members are individuals, by

at least fifty persons from each of the state concerned;

(b) in the case of a multi-State co-operative society of which the members are co-operative

societies, by duly authorised representatives on behalf of at least five such societies as are not
registered in the same State; and

(c) in the case of a multi-State co-operative society of which another multi-State co-operative

society and other co-operative societies are members, by duly authorised representatives of each of
such societies:

Provided that not less than two of the co-operative societies referred to in this clause, shall be

such as are not registered in the same State;

(d) in the case of a multi-State co-operative society of which the members are co-operative

societies or multi-State co-operative societies and individuals, by at least—

(i) fifty persons, being individuals, from each of the two States or more; and

(ii) one co-operative society each from two States or more or one multi-State co-operative

society.

(3) The application shall be accompanied by four copies of the proposed bye-laws of the multi-State

co-operative society and the persons by whom or on whose behalf such application is made shall furnish
such information in regard to the society as the Central Registrar may require.

**7. Registration.—(1) If the Central Registrar is satisfied—**

(a) that the application complies with the provisions of this Act and the rules;


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(b) that the proposed multi-State co-operative society satisfies the basic criterion that its objects

are to serve the interests of members in more than one state;

(c) that its bye-laws provide for social and economic betterment of its members through self-help

and mutual aid in accordance with the co-operative principles;

(d) that the proposed bye-laws are not contrary to the provisions of this Act and the rules,

he may register the multi-State co-operative society and its bye-laws.

1[(2) Without prejudice to the provisions of sub-section (1), the Central Registrar may register a

multi-State co-operative society if the aggregate value of the paid-up capital and provision of reserves
along with liquidity, exposure and other prudential norms specified in bye-laws of the proposed
multi-State co-operative society in the business of thrift and credit are in accordance with such guidelines
as may be prescribed:

Provided that the multi-State co-operative societies registered before the commencement of the

Multi-State Co-operative Societies (Amendment) Act, 2023 shall meet such norms within a period of five
years from the date of commencement of the said Act:

Provided further that if the liquidity, exposure, prudential and other parameters of the multi-State

credit society do not meet such norms within the period mentioned above, the Central Registrar shall have
powers to issue such directions as it deems appropriate to such society to take relevant action:

Provided also that in the case of multi-State co-operative bank, the aggregate value of the paid-up

capital and provision of reserves along with liquidity norms provided in the bye-laws shall be such as may
be laid down by the Reserve Bank from time to time.

(3) The application for registration shall be disposed of by the Central Registrar within a period of

three months from the date of receipt of such application by him:

Provided that the Central Registrar may, for rectification of mistakes, if any, in the application, extend

the period of three months with such further period, for reasons to be recorded in writing, not exceeding
two months on the request of the applicant.

(4) Where the Central Registrar refuses to register a multi-State co-operative society, he shall

communicate the order of such refusal stating therein the reasons for such refusal, to the applicant within
the period specified in sub-section (3):

Provided that no order of refusal shall be made, unless the applicant has been given an opportunity of

being heard:

Provided further that if the application for registration is not disposed of within the period specified in

sub-section (3) or the Central Registrar fails to communicate the order of refusal within the said period,
the application shall be deemed to have been accepted for registration and the Central Registrar shall issue
the registration certificate in accordance with the provisions of this Act and the rules made thereunder.]

**8. Registration certificate.—Where a multi-State co-operative society is registered under this Act,**

the Central Registrar shall issue a certificate of registration signed by him, which shall be conclusive
evidence that the society therein mentioned is duly registered under this Act, unless it is proved that the
registration of the society has been cancelled.

**9. Multi-State co-operative society to be body corporate.—(1) The registration of a multi-State**

co-operative society shall render it a body corporate by the name under which it is registered having
perpetual succession and a common seal, and with power to acquire, hold and dispose of property, both
movable and immovable, enter into contract, institute and defend suits and other legal proceedings and to
do all things necessary for the purpose for which it is constituted, and shall, by the said name, sue or be
sued.

(2) All transactions entered into in good faith prior to the registration of a multi-State co-operative

society shall be deemed to be its transactions after registration for furtherance of the objects of its
registration.


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**10. Bye-laws of multi-State co-operative societies.—(1) Every multi-State co-operative society may**

make its bye-laws consistent with the provisions of this Act and the rules made thereunder.

(2) In particular and without prejudice to the generality of the foregoing power, such bye-laws may

provide for all or any of the following matters, namely:—

(a) the name, [1][address, including e-mail address] and area of operation of the society;

(b) the objects of the society;

(c) the services to be provided to its members;

(d) the eligibility for obtaining membership;

(e) the procedure for obtaining membership;

(f) the conditions for continuing as member;

(g) the procedure for withdrawal of membership;

(h) the transfer of membership;

(i) the procedure for expulsion from membership;

(j) the rights and duties of the members;

(k) the nature and amount of capital of the society;

(l) the manner in which the maximum capital to which a single member can subscribe;

(m) the sources from which the funds may be raised by the multi-State co-operative society;

(n) the purpose for which the funds may be applied;

(o) the manner of allocation or disbursement of net profits of the multi-State co-operative society;

(p) the constitution of various reserves;

(q) the manner of convening general meetings and quorum thereof other than those provided

under this Act;

(r) the procedure for notice and manner of voting, in general and other meetings;

(s) the procedure for amending the bye-laws;

(t) the number of members of the board not exceeding twenty-one;

(u) the tenure, of directors, chairperson and other office bearers of the society, not exceeding five

years;

(v) the procedure for removal of members of the board and for filling up of vacancies;

(w) the manner of convening board meetings, its quorum, number of such meetings in a year and

venue of such meetings;

(x) the frequency of board meetings;

(y) the powers and functions of the Chief Executive in addition to those provided under

section 52;

(z) the manner of imposing the penalty;

(za) the appointment, rights and duties of auditors and procedure for conduct of audit;

(zb) the authorisation of officers to sign documents and to institute and defend suits and other

legal proceedings on behalf of the society;

(zc) the terms on which a multi-State co-operative society may deal with persons other than

members;

(zd) the terms on which a multi-State co-operative society may associate with other co-operative

societies;


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(ze) the terms on which a multi-State co-operative society may deal with organisation other than

co-operative societies;

(zf) the rights, if any, which the multi-State co-operative society may confer on any other

multi-State co-operative society or federal co-operative and the circumstances under which such
rights may be exercised by the federal co-operative;

(zg) the procedure and manner for transfer of shares and interest in the name of a nominee in case

of death of a member;

(zh) the educational and training programmes to be conducted by the multi-State co-operative

society;

(zi) the principal place and other places of business of multi-State co-operative society;

(zj) the minimum level of services, to be used by its members;

(zk) any other matter which may be prescribed.

**11. Amendment of bye-laws of a multi-State co-operative society.—(1) No amendment of any**

bye-law of a multi-State co-operative society shall be valid, unless such amendment has been registered
under this Act.

(2) The amendment to the bye-laws of a multi-State co-operative society shall be made by a

resolution passed by a two-third majority of the members present and voting at general meeting of the
society.

(3) No such resolution shall be valid unless fifteen clear days’ notice of the proposed amendment has

been given to the members.

(4) In every case in which a multi-State co-operative society proposes to amend its bye-laws, an

application to register such amendments shall be made to the Central Registrar together with—

(a) a copy of the resolution referred to in sub-section (2);

(b) a statement containing the particulars indicating—

(i) the date of the general meeting at which the amendments to the bye-laws were made;

(ii) the number of days’ notice given to convene the general meeting;

(iii) the total number of members of the multi-State co-operative society;

(iv) the quorum required for such meeting;

(v) the number of members present at the meeting;

# (vi) the number of members who voted in such meeting;

(vii) the number of members who voted in favour of such amendments to bye-laws;

(c) a copy of the relevant bye-laws in force with the amendment proposed to be made together

with reasons justifying such amendments;

(d) four copies of the text of the bye-laws incorporating therein the proposed amendments signed

by the officer duly authorised in this behalf by the general body;

(e) a copy of the notice given to the members and the proposal to amend the bye-laws;

(f) a certificate signed by the person who presided at the general meeting certifying that the

procedure specified in sub-sections (2) and (3) and the bye-laws had been followed;

(g) any other particular which may be required by the Central Registrar in this behalf.

(5) Every such application shall be made within sixty days from the date of the general meeting at

which such amendment to the bye-laws was passed.

(6) The procedure given in sub-sections (2) to (5) of this section shall apply to the amendment of the

bye-laws of a co-operative society desiring to convert itself into a multi-State co-operative society as per
the provisions of section 22.


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(7) If, on receipt of application under sub-section (5), the Central Registrar is satisfied that the

proposed amendment—

(a) is not contrary to the provisions of this Act or of the rules;

(b) does not conflict with co-operative principles; and

(c) will promote the economic interests of the members of the multi-State co-operative society,

he may register the amendment within a period of three months from the date of receipt thereof by him.

(8) The Central Registrar shall forward to the multi-State co-operative society a copy of the registered

amendment together with a certificate signed by him within a period of one month from the date of
registration thereof and such certificate shall be conclusive evidence that the amendment has been duly
registered.

(9) Where the Central Registrar refuses to register an amendment of the bye-laws of a multi-State

co-operative society, he shall communicate the order of refusal together with the reasons therefore to the
Chief Executive of the society in the manner prescribed within fifteen days from the date of such refusal:

Provided that if the application for registration is not disposed of within a period of three months

specified in sub-section (7) or the Central Registrar fails to communicate the order of refusal within that
period, the application shall be deemed to have been accepted for registration and the Central Registrar
shall issue registration certificate in accordance with the provisions of this Act.

**12. When amendment of bye-laws comes into force.—An amendment of the bye-laws of a**

multi-State co-operative society shall, unless it is expressed to come into operation on a particular day,
come into force on the day on which it is registered.

**13. Change of name.—(1) A multi-State co-operative society may, by an amendment of its bye-laws,**

change its name but such change shall not affect any right or obligation of the multi-State co-operative
society or of any of its members or past members, and any legal proceedings which might have been
continued or commenced by or against the multi-State co-operative society by its former name, may be
continued or commenced by or against its new name.

(2) Where a multi-State co-operative society changes its name, the Central Registrar shall enter the

new name on the register of multi-State co-operative society in place of the former name and shall amend
the certificate of registration accordingly.

**14. [1][Address].—Every multi-State co-operative society shall have principal place of business and an**

2[address, including e-mail address] registered in the manner prescribed to which all notices and
communications may be sent.

**15. Publication of name by multi-State co-operative society.—Every multi-State co-operative**

society—

(a) shall paint or affix its name and the address of its registered office and keep the same painted

or affixed, on the outside of every office or place in which its business is carried on, in conspicuous
position, in letters easily legible; and if the characters employed therefore are not those of the
language, or of one of the languages in general use in that locality, also in the characters of that
language or of one of those languages;

(b) shall have its name engraven in legible characters on its seal; and

(c) shall have its name and the address of its registered office mentioned in legible characters in

all its business letters, in all its bill heads and letter paper, and in all its notices and other official
publications; and also have its name so mentioned in all bills of exchange, hundies, promissory notes,
endorsements, cheques and orders for money or goods purporting to be signed by or on behalf of the
multi-State co-operative society, and in all bills of parcels, invoices, receipts and letters of credit of
the multi-State co-operative society.

**16. Liability.—(1) No multi-State co-operative society with unlimited liability shall be registered**

after the commencement of this Act:


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Provided that where a multi-State co-operative society with unlimited liability was functioning before

the commencement of this Act, such a society shall exercise the option within a period of one year from
such commencement either to continue to function as such or to convert itself into a multi-State
co-operative society with limited liability by following the procedure specified in sub-sections (2) to (4).

(2) Subject to the provisions of this Act and the rules, a multi-State co-operative society may, by an

amendment of its bye-laws, change the extent of its liability.

(3) When a multi-State co-operative society has passed a resolution to change the extent of its

liability, it shall give notice thereof in writing to all its members and creditors, and, notwithstanding
anything contained in the bye-laws or contract to the contrary, any member or creditor shall, during the
period of one month from the date of service of the notice upon him, have the option of withdrawing his
shares, deposits or loans, as the case may be.

(4) Any member or creditor who does not exercise his option within the period specified in

sub-section (3) shall be deemed to have assented to the change.

(5) An amendment of a bye-law of a multi-State co-operative society changing the extent of its

liability shall not be registered or shall not take effect until either—

(a) the assent thereto of all members and creditors has been obtained; or

(b) all claims of members and creditors who exercise the option referred to in sub-section (3)

within the period specified therein have been met in full or otherwise satisfied.

**17. Amalgamation or transfer of assets and liabilities, or division of multi-State co-operative**

**societies.—(1) A multi-State co-operative society may, by a resolution passed by a majority of not less**
than two-thirds of the members, present and voting at a general meeting of the society held for the
purpose,—

(a) transfer its assets and liabilities in whole or in part to any other multi-State co-operative

society or co-operative society;

(b) divide itself into two or more multi-State co-operative societies;

(c) divide itself into two or more co-operative societies.

(2) Any two or more multi-State co-operative societies may, by are solution passed by a majority of

not less than two-thirds of the members present and voting at a general meeting of each such society,
amalgamate themselves and form a new multi-State co-operative society.

(3) The resolution of a multi-State co-operative society under sub-section (1) or sub-section (2) shall

contain all particulars of the transfer or division or amalgamation, as the case may be.

(4) When a multi-State co-operative society has passed a resolution under sub-section (1) or

sub-section (2), it shall give notice thereof in writing to all the members and creditors, and,
notwithstanding anything contained in the bye-laws or contract to the contrary, any member or creditor
shall, during the period of one month of the date of service of the notice upon him, have the option of
withdrawing his share, deposits or loans, as the case may be.

(5) Any member or creditor who does not exercise his option within the period specified in

sub-section (4) shall be deemed to have assented to the proposals contained in the resolution.

(6) (a) A resolution passed by a multi-State co-operative society under this section shall not take

effect until the assent thereto of all the members and creditors has been obtained.

(b) The multi-State co-operative society shall make arrangements for meeting in full or otherwise

satisfying all claims of the members and creditors who exercise the option within the period specified in
sub-section (4).

(7) On receipt of an application for the registration of new societies formed by division in accordance

with the resolution passed under sub-section (1) or of a new society formed by amalgamation in
accordance with the resolution passed under sub-section (2), the Central Registrar, on being satisfied that
the resolution has become effective under sub-section (6) shall, unless for reasons to be recorded in
writing he thinks fit to refuse so to do, Register the new society or societies, as the case may be, and the
bye-laws thereof.


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(8) On the issue of an order under sub-section (7), the provisions of section 21 shall, so far as may be,

apply to the multi-State co-operative society so divided or the multi-State co-operative societies so
amalgamated.

(9) Where a resolution passed by a multi-State co-operative society under this section involves the

transfer of any assets and liabilities, the resolution shall, notwithstanding anything contained in any other
law for the time being in force, be a sufficient conveyance to vest the assets and liabilities in the
transferee without any further assurance.

1[(10) Any co-operative society may, by a resolution passed by majority of not less than two-thirds of

the members present and voting at a general meeting of such society, decide to merge into an existing
multi-State co-operative society:

Provided that such resolution shall be subject to the provisions of the respective State Co-operative

Societies Act for the time being in force under which such co-operative society is registered.]

**18. Central Registrar to prepare scheme of amalgamation or reorganisation of a co-operative**

**bank in certain cases.—When an order of moratorium has been made by the Central Government under**
sub-section (2) of section 45 of the Banking Regulation Act, 1949 (10 of 1949) in respect of a
co-operative bank, the Central Registrar, with the previous approval of the Reserve Bank in writing, may,
during the period of moratorium, prepare a scheme—

(a) for the amalgamation of the co-operative bank with any other co-operative bank; or

(b) for the reorganisation of the co-operative bank.

**19. Promotion of subsidiary institution.—(1) Any multi-State co-operative society may, by a**

resolution passed at general meeting by a majority of members present and voting, promote one or more
subsidiary institutions, which may be registered under any law for the time being in force, for the
furtherance of its stated objects.

(2) Any subsidiary institution promoted under sub-section (1) shall exist only as long as general body

of the multi-State co-operative society deems its existence necessary:

Provided that a multi-State co-operative society while promoting such a subsidiary institution, shall

not transfer or assign its substantive part of business or activities undertaken in furtherance of its stated
objects.

_Explanation.—For the purposes of this section,—_

(a) an institution shall be deemed to be a subsidiary institution if the multi-State co-operative

society—

(i) controls the management or board of directors or members of governing body of such

institution; or

(ii) holds more than half in nominal value of equity shares of such institutions; [2]***

[3]*         -         -         -         
(b) a subsidiary institution shall not include a partnership firm.

(3) The annual reports and accounts of any such subsidiary institution shall be placed each year

before general meeting of the promoting multi-State co-operative society.

**20. Liability of a co-operative bank to deposit insurance and credit guarantee corporation.—**

Notwithstanding anything contained in section 17 or any other provision of this Act, where a co-operative
bank, being an insured bank within the meaning of the Deposit Insurance and Credit Guarantee
Corporation Act,1961 (47 of 1961), is amalgamated or reorganised and the Deposit Insurance Corporation
has become liable to pay to the depositors of the insured bank under sub-section (2) of section 16 of that
Act, the bank with which such insured bank is amalgamated or the new co-operative bank formed after
such amalgamation, or, as the case may be, the insured bank or transferee bank shall be under an

1. Ins. by Act 11 of 2023, s. 6 (w.e.f. 3-8-2023).


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obligation to repay to the Deposit Insurance Corporation in the circumstances, to the extent and in the
manner referred to in section 21 of the Deposit Insurance and Credit Guarantee Corporation Act, 1961.

**21. Cancellation of registration certificate of multi-State co-operative societies in certain**

**cases.—(1) Where the whole of the assets and liabilities of a multi-State co-operative society are**
transferred to another multi-State co-operative society or to a co-operative society in accordance with the
provisions of section 17, the registration of the first mentioned multi-State co-operative society shall stand
cancelled and the society shall be deemed to have been dissolved and shall cease to exist as a corporate
body.

(2) Where two or more multi-State co-operative societies are amalgamated into a new multi-State

co-operative society in accordance with the provisions of section 17, the registration of each of the
amalgamating societies shall stand cancelled on the registration of the new society, and each of the
amalgamating societies shall be deemed to have been dissolved and shall cease to exist as a corporate
body.

(3) Where a multi-State co-operative society divides itself into two or more multi-State co-operative

societies or two or more co-operative societies in accordance with the provisions of section 17, the
registration of that society shall stand cancelled on the registration of the new societies and that society
shall be deemed to have been dissolved and shall cease to exist as a corporate body.

(4) The amalgamation or division of multi-State co-operative societies shall not in any manner

whatsoever affect any right or obligation of the resulting multi-State co-operative society or societies or
render defective any legal proceedings by or against the multi-State co-operative society or societies, and
any legal proceedings that might have been continued or commenced by or against the multistate
co-operative society or societies, as the case may be, before the amalgamation or division, may be
continued or commenced by or against the resulting multi-State co-operative society or societies.

**22. Conversion of a co-operative society into a multi-State co-operative society.—(1) A co-**

operative society may, by an amendment of its bye-laws, extend its jurisdiction and convert itself into a
multi-State co-operative society:

Provided that no such amendment of bye-laws of a co-operative society shall be valid unless it has

been registered by the Central Registrar.

(2) (a) Every proposal for such amendment of bye-laws shall be forwarded to the Central Registrar in

accordance with the provisions contained in sub-section (4) of section 11.

(b) If the Central Registrar, after consulting the Registrars of Co-operative Societies of the States

concerned, has satisfied himself that such amendment—

(i) fulfils the requirements of the members being from more than one State;

(ii) is in accordance with the provisions contained in sub-section (4) of section 11,

he may register the amendment within a period of six months from the date of receipt thereof by him:

Provided that no co-operative society shall be deemed to have been converted into a multi-State

co-operative society on any ground whatsoever unless such society is registered as a multi-State
co-operative society.

(3) The Central Registrar shall forward to the co-operative society a copy of the registered

amendment together with a certificate signed by him and such certificate shall be conclusive evidence that
the amendment has been registered.

(4) Where the Central Registrar refuses to register an amendment of the bye-laws of a co-operative

society, he shall communicate the order of refusal together with the reasons therefore to the society in the
manner prescribed within seven days from the date of refusal.

(5)(a) Once the amendment of bye-laws has been registered by the Central Registrar, the co-operative

society shall, as from the date of registration of amendment, become a multi-State co-operative society.


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(b) The Central Registrar shall forward to the co-operative society a certificate signed by him to the

effect that such society has been registered as a multi-State co-operative society under this Act and also
forward a copy of the same to the Registrar of Co-operative Societies of the State concerned.

1[(c) the co-operative society shall be deemed to have been de-registered under the law relating to

such co-operative society for the time being in force in that State, from the date of the certificate as issued
by the Central Registrar and forwarded to such co-operative society, along with a copy of the registered
amendment under sub-section (3).]

CHAPTER III

REGISTRATION AND FUNCTIONS OF FEDERAL CO-OPERATIVES

**23. Registration of federal co-operative.—(1) Every federal co-operative shall obtain registration**

certificate in accordance with the provisions of this Act.

(2) Every federal co-operative shall in its general meeting be represented by its member co-operative.

(3) The classification of federal co-operative and other terms and conditions applicable to it shall be

such as may be prescribed.

(4) All provisions of this Act, applicable to a multi-State co-operative society shall, as far as may be,

apply to a federal co-operative.

**24. Functions of federal co-operative.—(1) Subject to the provisions of this Act and any other law**

for the time being in force, a federal co-operative may discharge the functions to facilitate the voluntary
formation and democratic functioning of co-operative societies as federal co-operative or multi-State
co-operatives based on self-help and mutual aid.

(2) Without prejudice to the generality of the provisions contained in sub-section (1), the federal

co-operative may—

(a) ensure compliance of the co-operative principles;

(b) make model bye-laws and policies for consideration of its member co-operative;

(c) provide specialised training, education and data-base information;

(d) undertake research, evaluation and assist in preparation of perspective development plans for

its member co-operative;

(e) promote harmonious relations amongst member co-operative;

(f) help member co-operative to settle disputes among themselves;

(g) undertake business services on behalf of its member co-operative, if specifically required by

or under the resolution of the general body or the board, or bye-laws of a member co-operative;

(h) provide management development services to a member co-operative;

(i) evolve code of conduct for observance by a member co-operative;

(j) evolve viability norms for a member co-operative;

(k) provide legal aid and advice to a member co-operative;

(l) assist member co-operative in organising self-help;

(m) develop market information system, logo brand promotion, quality control and technology

upgradation.


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CHAPTER IV

MEMBERS OF MULTI-STATE CO-OPERATIVE SOCIETIES AND THEIR DUTIES, RIGHTS AND LIABILITIES

**25. Persons who may become members.—(1) No person shall be admitted as a member of a**

multi-State co-operative society except the following, namely:—

(a) an individual, competent to contract under section 11 of the Indian Contract Act, 1872 (9 of

1872);

(b) any multi-State co-operative society or any co-operative society;

(c) the Central Government;

(d) a State Government;

(e) the National Co-operative Development Corporation established under the National

Co-operative Development Corporation Act, 1962 (26 of 1962);

(f) any other corporation owned or controlled by the Government;

(g) any Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956);

(h) such class or classes of persons or association of persons as may be permitted by the Central

Registrar having regard to the nature and activities of a multi-State co-operative society.

(2) No individual person shall be eligible for admission as a member of a national co-operative

society or a federal co-operative.

(3) Any person eligible for membership of a multi-State co-operative society may, on his application,

be admitted as a member by such society.

(4) Every application for admission as a member of a multi-State co-operative society shall be

disposed of by such society within a period of four months from the date of receipt of the application, and
the decision of such society on the application shall be communicated to the applicant within fifteen days
from the date of such decision:

Provided that if the application is not disposed of within the period aforesaid, or the decision is not

communicated within a period of fifteen days of the expiry of the aforesaid period of four months, the
multi-State co-operative society shall be deemed to have made a decision, on the date of expiry of such
period, refusing admission to the applicant.

(5) It shall be the duty of every member of a multi-State co-operative society to promote and protect

the interests and objects of such society.

**26. Nominal or associate member of society.—A multi-State co-operative society may, if provided**

in its bye-laws, admit a person as nominal or associate member:

Provided that no such nominal or associate member shall [1]*** have any interest in the management

thereof including right to vote, elect as a director of the board or participate in the general body meetings.

2[Provided further that nominal or associate member can be issued non-voting shares which may not

confer any interest in the management of the multi-State co-operative society including right to vote, to be
elected as a director of the board or participate in the general body meetings:

Provided also that in case of multi-State co-operative bank, such shares shall be issued in accordance

with the instructions issued by the Reserve Bank from time to time.]

**27. Educational course for members.—(1) Every multi-State co-operative society shall organise**

co-operative education programmes for its members, directors and employees.

(2) Every multi-State co-operative society may provide funds for such co-operative education

programmes.


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**28. Members not to exercise rights till due payment made.—No member of a multi-State**

co-operative society shall exercise the rights of a member, unless he has made the payment [1][of all dues to
the multi-State co-operative society including the payment in respect of membership or has availed such
minimum level of product or services as specified in the bye-laws,] or has acquired such interest in the
society, as may be specified in the bye-laws.

**29. Disqualification for member of a multi-State co-operative society.—No person shall be**

eligible for being a member of a multi-State co-operative society if—

(a) his business is in conflict or competitive with the business of such multi-State co-operative

society; or

2[(b) he fails to use the minimum level of the products or services as specified in the bye-laws for

two consecutive years; or]

(c) he has not attended three consecutive general meetings of the multi-State co-operative society

and such absence has not been condoned by the members in the general meeting; or

(d) he has made any default in payment of any amount to be paid to the multi-State co-operative

society under the bye-laws of such society.

**30. Expulsion of members.—(1) A multi-State co-operative society may, by resolution passed by a**

majority of not less than two-thirds of the members present and voting at a general meeting of members
held for the purpose, expel a member for acts which are detrimental to the proper working of the society:

Provided that the member concerned shall not be expelled unless he has been given a reasonable

opportunity of making representation in the matter.

(2) No member of the multi-State co-operative society who has been expelled under sub-section (1),

shall be eligible for re-admission as a member of that society, for a period of [3][three years] from the date
of such expulsion.

**31. Vote of members.—Every member of a multi-State co-operative society, including a member**

who is an employee of such society, shall have one vote in the affairs of the society:

Provided that—

(a) a member who is an employee of such society shall not be entitled to vote—

(i) at the election of a member of the board of such society;

(ii) in any general meeting convened for framing the bye-laws of such society or any

amendments thereto;

(b) in the case of an equality of votes, the chairperson shall have a casting vote;

(c) where any of the authorities, multi-State co-operative society or a co-operative society

referred to in clauses (b) to (g) of sub-section (1) of section 25 is a member of a multi-State
co-operative society, each person nominated by such authority or society, on the board in accordance
with the provisions contained in this Act and the rules, shall, have one vote;

(d) a multi-State co-operative society, the membership of which include co-operative societies or

other multi-State co-operative societies, may provide in its bye-laws for an equitable system of voting
having regard to the membership of, and the extent of business carried on, by such co-operative
societies or multi-State co-operative societies.

**32. Manner of exercising vote.—Every member of a multi-State co-operative society shall exercise**

his vote in person and no member shall be permitted to vote by proxy:

Provided that a multi-State co-operative society or a co-operative society or any other institution

which is a member of any other multi-State co-operative society may, subject to the provisions of
sub-section (3) of section 38 and the rules, appoint its representative to vote on its behalf in the affairs of
such multi-State co-operative society.

1. Subs. by Act 11 of 2023, s. 10, for “to the society in respect of membership,” (w.e.f. 3-8-2023).


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**33. Restriction on holding of shares.—No member, other than the authorities referred to in**

clauses (c) to (g) of sub-section (1) of section 25 or a multi-State co-operative society or a co-operative
society, shall hold more than such portion of the total share capital of the society (in no case exceeding
one-fifth thereof) as may be prescribed in the rules or bye-laws of such multi-State co-operative society.

**34. Restriction on transfer of shares or interest.—The transfer of share or interest of a member in**

the capital of a multi-State co-operative society shall be subject to such conditions as to maximum
holding as specified in section 33.

1[35. Redemption of shares.—(1) The shares of the authorities referred to in clauses (c) and (d) of

sub-section (1) of section 25, held in multi-State co-operative societies,––

(a) shall not be redeemed without the prior approval of such authorities; and

(b) may be redeemed in such manner as may be agreed upon between the multi-State co-operative

society and such authorities.

(2) The shares held in a multi-State co-operative society by any of the authorities referred to in

clauses (e) to (g) of sub-section (1) of section 25, shall be redeemed in accordance with the bye-laws of
such multi-State co-operative society and in case, where the bye-laws do not contain any provision, in
such manner as may be agreed upon between the multi-State co-operative society and such authorities.

(3) The redemption of shares referred to in sub-sections (1) and (2), shall be on the face value of

shares.]

**36. Transfer of interest on death of members.—(1) On the death of a member, a multi-State**

co-operative society may transfer the share or interest of the deceased member to the person nominated in
accordance with the bye-laws made in this behalf or, if there is no person nominated, to such person as
may appear to the board to be the heir or legal representative of the deceased member, or pay to such
nominee, heir or legal representative, as the case may be, a sum representing the value of such member’s
share or interest as ascertained in accordance with the rules:

Provided that no such transfer or payment shall be made except with the consent of the nominee, heir

or legal representative, as the case may be.

(2) A multi-State co-operative society shall, unless within six months of the death of the member

prevented by an order of a competent court, pay to such nominee, heir or legal representative, as the case
may be, all other moneys due to the deceased member from the society.

(3) All transfers and payments made by a multi-State co-operative 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.

**37. Liabilities of past member and estate of deceased member.—(1) Subject to the provisions of**

sub-section (2), the liability of a past member or of the estate of a deceased member of a multi-State
co-operative society for the debts of the society as they existed,—

(a) in the case of a past member, on the date on which he ceased to be a member;

(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) Notwithstanding anything contained in sub-section (1), where a multi-State co-operative society is

ordered to be wound up under section 86, the liability of a past member who ceased to be a member or of
the estate of a deceased member who 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 liability
shall extend only to the debts of the society as they existed on the date of cessation of membership or
death, as the case may be.


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CHAPTER V

DIRECTION AND MANAGEMENT OF MULTI-STATE CO-OPERATIVE SOCIETIES

**38. Constitution, powers and functions of general body.—(1) The general body of a multi-State**

co-operative society shall consist of all the members of such society:

Provided that where the bye-laws of a multi-State co-operative society provide for the constitution of

a smaller body consisting of delegates of members of the society elected or selected in accordance with
such bye-laws, that smaller body shall exercise such powers of the general body as may be prescribed or
as maybe specified in the bye-laws of the society.

(2) Subject to the provisions of this Act, the rules and the bye-laws, the ultimate authority of a

multi-State co-operative society shall vest in the general body of its members:

Provided that nothing contained in this sub-section shall affect the exercise by the board or any

officer of a multi-State co-operative society of any power conferred on such board or such officer by this
Act or the rules or the bye-laws.

(3) Where in any meeting of the general body or the board of a multi-State co-operative society, a

co-operative society or another multi-State co-operative society is to be represented, such co-operative
society or other multi-State co-operative society shall be represented in such meeting only through the
Chairperson or the President or the Chief Executive or a member of the board of such co-operative
society or other multi-State co-operative society, as the case may be, if such member is so authorised by
the board and where there is no board of such co-operative society or other multi-State co-operative
society, for whatever reasons, through the administrator, by whatever name called, of such co-operative
society or other multi-State co-operative society:

Provided that where the bye-laws of a multi-State co-operative society provide for representation of

other institutions in any meeting of general body or the board of such multi-State co-operative society,
such institutions shall be represented through its nominee.

**39. Annual general meeting of general body.—(1) The board of every multi-State co-operative**

society shall, within such period as may be prescribed, and not later than six months after the close of the
corresponding year, call the annual general meeting in the manner prescribed for the purpose of—

(a) consideration of the audited statement of accounts;

(b) consideration of the audit report and annual report;

(c) consideration of audit compliance report;

(d) disposal of net profits;

(e) review of operational deficit, if any;

(f) creation of specific reserves and other funds;

(g) approval of the annual budget;

(h) review of actual utilisation of reserve and other funds;

(i) approval of the long-term perspective plan and the annual operational plan;

(j) review of annual report and accounts of subsidiary institution, if any;

(k) expulsion of members;

(l) list of employees who are relatives of members of the board or of the Chief Executive;

(m) amendment of bye-laws, if any;

(n) formulation of code of conduct for the members of the board and officers;

(o) election of members of the board, if any.

1[(p) appointment of auditor.]


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(2) Where the board of a multi-State co-operative society fails to convene the annual general meeting

within the period specified in sub-section (1), the Central Registrar or the person authorised by him in this
behalf shall be competent to convene such annual general meeting within a period of ninety days from the
date of expiry of the period mentioned in that sub-section and the expenditure incurred on such meeting
shall be borne by the society.

(3) At every annual general meeting of a multi-State co-operative society, the board shall lay before

the society a statement showing the details of the loans or goods on credit, if any, given to any of the
members of the board or to the spouse or a son or daughter of a member of the board during the preceding
year or outstanding against him or against such spouse or son or daughter of the member of the board.

**40. Special general meeting of general body.—(1) The Chief Executive may, at any time, on the**

direction of the board, call a special general meeting of the society and shall call such meeting within one
month after the receipt of a requisition in writing from the Central Registrar or from such member or
members or a proportion of the total number of members, as may be provided in the bye-laws.

(2) If a special general meeting of a multi-State co-operative society is not called in accordance with

the requisition referred to in sub-section (1), the Central Registrar or any person authorised by him in this
behalf shall have the power to call such meeting and that meeting shall be deemed to be a meeting called
by the Chief Executive in accordance with the provisions of that sub-section and the Central Registrar
may order that the expenditure incurred in calling such meeting shall be paid out of the funds of the
society or by such person or persons who, in the opinion of the Central Registrar, was or were responsible
for the refusal or failure to convene the special general meeting.

**41. Board of directors.—(1) Subject to the provisions of this Act and rules, there shall be a board of**

directors for every multi-State co-operative society consisting of such number of members as specified in
sub-section (3).

(2) The members of a multi-State co-operative society, by a resolution in a general meeting, shall

elect directors who shall be members of board.

1[(3) The board shall consist of such number of directors not exceeding twenty-one, as may be

specified by the bye-laws, out of which one member shall be Scheduled Caste or Scheduled Tribe and two
shall be women in the board of multi-State co-operative society consisting of individuals and having
members from such class or category of persons:

Provided further that the number of such co-opted members shall not exceed two in addition to

twenty-one directors specified in this sub-section.

(4) The co-opted directors referred to in sub-section (3) shall not have the right to vote in any election

of the office bearers or be eligible to be elected as office bearers of the board.

(5) The functional directors in a multi-State co-operative society shall also be the members of the

board and such directors shall be excluded for the purpose of counting the total number of directors
specified in sub-section (3).

(6) No director of a multi-State co-operative society shall, as a director, be present in the discussion

of, or vote on, any contract or arrangement entered into, or to be entered into, by or on behalf of such
society, if he or his relative is directly or indirectly concerned or interested in such contract or
arrangement and no relative of any of the sitting directors of the multi-State co-operative society shall be
recruited as employee including the Chief Executive of that society.

_Explanation.––For the purposes of this sub-section, the term, “relative” with reference to an_

individual, includes—

(a) spouse;

(b) father (including step father);

(c) mother (including step mother);

(d) son (including step son);

(e) son’s wife;


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(f) daughter (including step daughter);

(g) daughter’s husband;

(h) father’s father;

(i) father’s mother;

(j) mother’s father;

(k) mother’s mother;

(l) son’s son;

(m) son’s son’s wife;

(n) son’s daughter;

(o) son’s daughter’s husband;

(p) daughter’s son;

(q) daughter’s son’s wife;

(r) daughter’s daughter;

(s) daughter’s daughter’s husband;

(t) brother (including step brother);

(u) brother’s wife;

(v) sister (including step sister);

(w) sister’s husband; and

(x) Hindu undivided family.

(7) Any director of the board who violates the provision of sub-section (6), shall be disqualified for

being a member of the board and deemed to have vacated his office from the date of such meeting of the
board as is referred to in the said sub-section and such proceedings shall be deemed to be void.]

**42. Association of employees in management decision making process.—Every multi-State**

co-operative society shall devise such procedure, as may be specified in the bye-laws or in the
administrative instructions of such society, for the association of the representatives of employees of such
multi-State co-operative societies at such level or bodies as may be specified in the bye-laws or the
instructions issued in this regard, in the management decision making process.

**43. Disqualifications for being a member of board.—(1) No member of any multi-State**

co-operative society or nominee of a member, society or a national co-operative society shall be eligible
for being chosen as, or for being, a member of the board of such multi-State co-operative society or a
national co-operative society, or of any other co-operative society to which the multi-State co-operatives
society is affiliated, if such member—

(a) has been adjudged by a competent court to be insolvent [1][or has been a director of an

insolvent company] or of unsound mind;

(b) is concerned or participates in the profits of any contract with the society;

(c) has been convicted for an offence involving moral turpitude;

(d) holds any office or place of profit under the society:

Provided that the Chief Executive or such full-time employee of the society as may be notified by the

Central Government from time to time or a person elected by the employees of such society to represent
them on the board of such society shall be eligible for being chosen as, or for being, a member of such
board;

(e) has been a member of the society for less than twelve months immediately preceding the date

of such election or appointment;


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(f) has interest in any business of the kind carried on by the society of which he is a member;

(g) has taken loan or goods on credit from the society of which he is a member, or is otherwise

indebted to such society and after the receipt of a notice of default issued to him by such society, has
defaulted—

(i) in repayment of such loan or debt or in payment of the price of the goods taken on credit,

as the case may be, within the date fixed for such repayment or payment or where such date is
extended, which in no case shall exceed six months, within the date so extended, or

(ii) when such loan or debt or the price of goods taken on credit is to be paid in instalments,

in payment of any instalment, and the amount in default or any part thereof has remained unpaid
on the expiry of six months from the date of such default:

Provided that a member of the board who has ceased to hold office as such under this clause shall not

be eligible, for a period of one year, from the date on which he ceased to hold office, for re-election as a
member of the board of the multi-State co-operative society of which he was a member or for the election
to the board of any other multi-State co-operative society;

(h) is a person against whom any amount due under a decree, decision or order is pending

recovery under this Act [1][or under any other Act specified in the Third Schedule;]

(i) is retained or employed as a legal practitioner on behalf of or against the multi-State

co-operative society, or on behalf of or against any other multi-State co-operative society which is a
member of the former society.

_Explanation.—For the purposes of this clause, “legal practitioner” has the same meaning as in_

clause (i) of sub-section (1) of section 2 of the Advocates Act, 1961 (25 of 1961);

(j) has been convicted for any offence under this Act;

(k) is disqualified for being a member under section 29;

(l) has been expelled as a member under section 30;

(m) absents himself from three consecutive board meetings and such absence has not been

condoned to by the board;

(n) absents himself from three consecutive general body meetings and such absence has not been

condoned by the members in the general body.

1[(o) has been disqualified under sub-section (7) of section 41.]

1[(1A) A member who has been a director of the board of any multi-State co-operative society or

co-operative bank, where such board has been superseded, shall not be eligible to be elected as
director of the board of another multi-State co-operative society or co-operative bank for a period of
five years, from the date of such supersession:

Provided that no member shall be declared ineligible under this sub-section unless an opportunity

of being heard has been given to such member by the Central Registrar and declaration for
ineligibility shall be made only after ascertaining that the member concerned has been responsible by
acts of omission or commission leading to such supersession.]

(2) A person shall not be eligible for being elected as member of board of a multi-State co-operative

society for a period of five years if the board of such multi-State co-operative society fails—

2[(a) to provide information, documents, personnel, funds or expenses or any other assistance as

required by the Co-operative Election Authority for conducting elections under this Act in such
manner as may be prescribed; or]

(b) to call the annual general meeting under section 39; or

(c) to prepare the financial statement and present the same in the annual [3][general meeting; or]

1. Ins. by Act 11 of 2023, s. 16 (w.e.f. 3-8-2023).


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1[(d) to make contribution to the co-operative education fund referred to in clause (b) of

sub-section (1) of section 63 or the Co-operative Rehabilitation, Reconstruction and Development
Fund established under section 63A; or

(d) to make contribution to the co-operative education fund referred to in clause (b) of

sub-section (1) of section 63 or the Co-operative Rehabilitation, Reconstruction and Development
Fund established under section 63A; or

(e) to file annual return specified in section 120 within the time specified therein; or

(f) to get the audit of the society conducted within six months of the close of the financial year to

which such account relate:

Provided that before taking any action under this sub-section, he shall be given an opportunity of

being heard by the Central Registrar.]

**44. Prohibition to hold office of chairperson or president or vice-chairperson or vice-president**

**in certain cases.—(1) No member of a board shall be eligible to be elected as the chairperson or**
president or vice-chairperson or vice-president of a multi-State co-operative society if such member is a
Minister in the Central Government or a State Government.

(2) No member of a board shall be eligible to be elected as the chairperson or president of a

multi-State co-operative society, after he has held the office, as such during two consecutive terms,
whether full or part:

Provided that a member who has ceased to hold the office of the chairperson or president

continuously for one full term shall again be eligible for election to the office as such.

_Explanation.—Where any member holding the office of the chairperson or president at the_

commencement of this Act is again elected to that office after such commencement, he shall for the
purpose of this section, be deemed to have held office for one term before such election.

**2[45. Establishment of Cooperative Election Authority.—(1) The Central Government shall, by**

notification, establish an Authority to be known as the Co-operative Election Authority which shall
consist of a Chairperson, a Vice-Chairperson and Members not exceeding three to be appointed by the
Central Government on the recommendation of the Selection Committee consisting of such persons as
may be prescribed.

(2) The head office of the Authority shall be at such place as may be notified by the Central

Government.

(3) The election of the members of the board shall be held in the general meeting of the members of

the multi-State co-operative society.

(i) Chairperson of the Authority unless he held the post of Additional Secretary to the

Government of India or equivalent rank;

(ii) Vice-Chairperson of the Authority unless he held the post of Joint Secretary to the

Government of India or equivalent rank; and

(iii) Member unless he fulfils such qualification and experience as may be prescribed

(4) The Chairperson, Vice-Chairperson or Member of the Authority shall hold office for a period of

three years from the date on which they enter upon their office or until they attain the age of sixty-five
years, whichever is earlier and they shall be eligible for re-appointment:

Provided that in case of appointment of a Government servant as a Chairperson, Vice-Chairperson or

a Member, he shall be treated as an ex officio Member and he shall continue so long as he holds the office
by virtue of which he is a Chairperson, Vice-Chairperson or Member.

(5) The salaries and allowances payable to, and the other terms and conditions of service of the

Chairperson, Vice-Chairperson and Members of the Authority, other than the ex officio Member, shall be
such as may be prescribed.


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**45A. Power of Chairperson.—The Chairperson of the Authority shall have powers of general**

superintendence and directions in the conduct of the affairs of the Authority and he shall, in addition to
presiding over the meetings of the Authority, exercise and discharge such other powers and functions as
may be prescribed.

**45B. Removal and suspension of Chairperson, Vice Chairperson and Members.—(1) The**

Central Government may, by order, remove from office the Chairperson, Vice-Chairperson or Member of
the Authority, other than _ex officio Member, if the Chairperson, Vice-Chairperson or Member of the_
Authority, as the case may be,—

(a) has been adjudged as an insolvent;

(b) has been convicted of an offence which, in the opinion of the Central Government involves

moral turpitude;

(c) has been physically or mentally incapable of acting as a Chairperson, Vice-Chairperson or

Member of the Authority;

(d) has acquired such financial or other interests, as is likely to affect prejudicially his function as

a Chairperson, Vice-Chairperson or Member of the Authority;

(e) has so abused his position, as to render his continuance in office prejudicial to the public

interest; or

(f) has engaged at any time during his term of office in any other employment.

(2) The Chairperson, Vice-Chairperson or Member of the Authority shall not be removed from his

office except by an order of the Central Government on the ground of his proved misbehaviour or
incapacity after the Central Government has, on an inquiry, held in accordance with the procedure
prescribed in this behalf by it, come to the conclusion that the Chairperson, Vice-Chairperson or Member
of the Authority ought on any such ground to be removed.

(3) The Central Government may suspend the Chairperson, Vice-Chairperson or Member of the

Authority in respect of whom an inquiry under sub-section (2) is being initiated or pending until the
Central Government has passed an order on receipt of the report of the inquiry.

**45C. Disclosure and declaration of interest. —(1) Before appointing any person as Chairperson,**

Vice-Chairperson or Member, the Central Government shall satisfy itself that the person does not have
any such financial or other interest as is likely to affect prejudicially his functions as such Chairperson,
Vice-Chairperson or Member.

(2) The Chairperson, Vice-Chairperson or Members shall immediately after entering office and every

year thereafter, make a declaration as to the extent of their interest, whether direct or indirect and whether
financial or otherwise, in any co-operative society.

(3) The declaration so made under sub-section (2) shall be placed in the public domain by the

Authority.

**45D. Resignation of Members.— The Chairperson, Vice-Chairperson or Members, other than ex**

officio Members, may, by notice in writing of not less than thirty days under their hand addressed to the
Central Government, resign their office and on such resignation being accepted by that Government, shall
be deemed to have vacated their office:

Provided that the Chairperson, Vice-Chairperson or Member shall, unless he is permitted by the

Central Government to relinquish his office sooner, continue to hold office until the expiry of three
months from the date of receipt of such notice or until a person duly appointed as his successor enters
upon his office or until the expiry of his term of office, whichever is the earliest.

**45E. Filling of casual vacancy.— If a casual vacancy occurs in the office of the Chairperson, Vice-**

Chairperson or Member of the Authority, whether by reason of his death, resignation or otherwise, such
vacancy shall be filled within a period of ninety days by making a fresh appointment in accordance with
the provisions of section 45 and the person so appointed shall hold office for the remainder of the term of
office for which the Chairperson, Vice-Chairperson or Member of the Authority, as the case may be, in
whose place he is so appointed.


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**45F. Restriction of reemployment.—The Chairperson, Vice-Chairperson and Member of the**

Authority, on ceasing to hold office shall not, for a period of two years, accept any employment
(including as consultant or otherwise) in any co-operative society:

Provided that nothing contained in this section shall apply to any employment under the Central

Government or in any State Government or any Corporation established by or under any Central or State
Act or a Government Company as defined under clause (45) of section 2 of the Companies Act, 2013 (18
of 2013).

**45G. Vacancies, etc., not to invalidate proceedings of Authority.—No act or proceeding of the**

Authority shall be invalid merely by reason of—

(a) any vacancy in, or any defect in the constitution of the Authority;

(b) any defect in the appointment of a person as Chairperson or Member of the Authority; or

(c) any irregularity in the procedure of the Authority not affecting the merits of the case.

**45H. Meetings of Authority.— (1) The Authority shall meet at such places and times and shall**

observe such rules of procedure in regard to the transaction of business at its meetings (including the
quorum at its meetings), as may be prescribed.

(2) The Chairperson of the Authority shall preside at the meeting of the Authority and if for any

reason the Chairperson of the Authority is unable to attend a meeting of the Authority, the ViceChairperson of the Authority shall preside at the meeting.

(3) All questions which come up before any meeting of the Authority shall be decided by a majority

of votes of the members present and voting and, in the event of an equality of votes, the Chairperson or
the Vice-Chairperson of the Authority presiding shall have the right to exercise a second or casting vote.

(4) Save as otherwise provided in sub-section (1), every Member shall have one vote.

**45-I. Functions of Authority.— The Authority shall discharge the following functions, namely:––**

(i) conduct the elections of the multi-State co-operative society;

(ii) supervise, direct and control the matters relating to preparation of electoral rolls; and

(iii) such other functions as may be prescribed.

**45J. Elections of members of board.— (1) No person shall be eligible to be elected as a member of**

the board or office bearer of a multi-State co-operative society, unless he is an active member of the
general body of that society.

_Explanation.—For the purposes of this sub-section, the term “active member” means any member—_

(i) availing minimum level of products or services of the society; or

(ii) attending not less than three consecutive general meetings,

as specified in section 29.

(2) A member of the board or office bearer of a multi-State co-operative society shall cease to be such

member or office bearer, if he ceases to be a member of general body of that society

(3) The election of members of board shall be held by secret ballot in such manner as may be

prescribed.

(4) The election of the members of the board shall be held in the general meeting of the members of

the multi-State co-operative society and the elected members of the board shall, if the bye-laws of such
society permit, be eligible for re-election.

(5) The term of office of elected members of the board and its office bearers shall be five years from

the date of election and the term of office bearers shall be co-terminus with the term of the board:

Provided that the board may fill casual vacancies up to one-third of number of elected directors on the

board by nomination out of the same class of members in respect of which the casual vacancy has arisen,
if the term of office of the board is less than half of its original term:


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Provided further that in case the number of such casual vacancies in the same term of the board

exceeds one-third of number of elected directors, such vacancies shall be filled by elections.

(6) The expenses for holding elections by the Authority shall be borne by the multi-State co-operative

society in such manner as may be prescribed.

(7) The Central Government may make rules to provide for the powers and the procedure to be

followed by the Authority for conduct of election of members of the board.

(8) The Chairperson and the Chief Executive of the multi-State co-operative society shall inform the

Authority, six months before the expiry of the term of the existing board, to conduct the elections within
time.

(9) The multi-State co-operative society in respect of which the election is being held shall provide

such infrastructure, personnel, information, documents or other assistance to the Authority as it may
require.

**45K. Appointment of Returning Officer and other officers.— (1) The Authority may appoint a**

Returning Officer to conduct the election of the multi-State co-operative societies and discharge such
functions, as directed by the Authority, in such manner as may be prescribed.

(2) The Central Government shall provide such staff and officers to the Authority as may be

necessary for the efficient discharge of functions by the Authority under the Act.

(3) The Authority may appoint,—

(a) such observers as it may consider necessary to supervise the elections and discharge such

other functions as may be prescribed; and

(b) such number of Assistant Returning Officers as it may consider necessary to assist the

Returning Officer.

**45L. Power to issue directions.— The Authority may, by general or special order, issue such**

directions to the board, its members, Chief Executive and other staff of the multi-State co-operative
society as may be necessary for the conduct of free and fair elections and the board, its members, Chief
Executive and staff of the society shall comply with such directions.]

**46. Holding of office in co-operative society.—Notwithstanding anything contained in this Act, no**

person shall be eligible to hold, at the same time, office of a president or chairperson or vice-president or
vice-chairperson on the board of more than two multi-State co-operative societies.

**47. Removal of elected members by general body.—An elected member of a board, who has acted**

adversely to the interests of multi-State co-operative society, may on the basis of a report of the Central
Registrar or otherwise be removed from the board upon a resolution of the general body passed at its
meeting by a majority of not less than two-third of the members present and voting at the meeting:

Provided that the member concerned shall not be removed unless he has been given a reasonable

opportunity of making a representation in the matter.

**48. Nominee of Central Government or State Government on board.—(1) Where the Central**

Government or a State Government has subscribed to the share capital of a multi-State co-operative
society, the Central Government or the State Government, as the case maybe, or any person authorised by
the Central Government or the State Government shall have right to nominate on the board such number
of persons as its members on the following basis, namely:—

(a) where the total amount of issued equity share capital held by the Central Government or the

State Government is less than twenty-six per cent. of the total issued equity share capital, one member
of the board;

(b) where the total amount of issued equity share capital held by the Central Government or the

State Government is twenty-six per cent. or more but less than fifty-one per cent. of the total issued
equity share capital, two members of the board;

(c) where the total amount of issued equity share capital held by the Central Government or the

State Government is fifty-one per cent. or more of the total issued share capital, three members of the
board:


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Provided that the number of such nominated persons shall not exceed one-third of the total number of

members of the board:

Provided further that where the Central Government or a State Government has guaranteed the

repayment of principal and payment of interest on debentures issued by a multi-State co-operative society
or has guaranteed the repayment of principal and payment of interest on loans and advances to a
multi-State co-operative society or has given any assistance by way of grants or otherwise to a multi-State
co-operative society, the Central Government or the State Government in this behalf, as the case may be,
or any person authorised by the Central Government, shall have the right to nominate person on the board
of such a society in the manner as may be prescribed.

(2) A person nominated under this section shall hold office during the pleasure of the Government by

which he has been so nominated.

**49. Powers and functions of board.—(1) The board may exercise all such powers as may be**

necessary or expedient for the purpose of carrying out its functions under this Act.

(2) Without prejudice to the generality of the foregoing powers, such powers shall include the

power—

(a) to admit members;

1[(aa) to elect the Chairperson and Vice-Chairperson or President and Vice-President of the

multi-State co-operative society from amongst the elected members of the board in accordance with
the directions of the Authority:

Provided that the certificate of election shall be issued by the Chief Executive of the multi-State

co-operative society after conclusion of resolution by the board;]

(b) to interpret the organisational objectives and set-up specific goals to be achieved towards

these objectives;

(c) to make periodic appraisal of operations;

(d) to appoint and remove a Chief Executive and such other employees of the society as are not

required to be appointed by the Chief Executive;

(e) to make provisions for regulating the appointment of employees of the multi-State

co-operative society and the scales of pay, allowances and other conditions of service of, including
disciplinary action against such employees;

1[Provided that the recruitment of such employees shall be subject to such procedure as may be

prescribed.]

(f) to place the annual report, annual financial statements, annual plan and budget for the approval

of the general body;

(g) to consider audit and compliance report and place the same before the general body;

(h) to acquire or dispose of immovable property;

(i) to review membership in other co-operatives;

(j) to approve annual and supplementary budget;

(k) to raise funds;

(l) to sanction loans to the members; and

(m) to take such other measures or to do such other acts as may be prescribed or required under

this Act or the bye-laws or as may be delegated by the general body.

**50. Meeting of board.—(1) The Chief Executive shall convene the meetings of the board at the**

instance of the chairperson or president of the multi-State co-operative society.


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1[Provided that where such Chairperson or President fails to direct the Chief Executive to convene the

meeting of the board within the quarter, such Chief Executive shall convene the meeting on the basis of
requisition of the Vice-Chairperson or Vice-President or any other Member of the board:

Provided further that notwithstanding anything contained in the first proviso, the Chief Executive

may also convene the meeting on the basis of requisition from at least fifty per cent. of Members of the
board;]

(2) The total number of meetings of the board in a year and the venue of meetings as may be specified

in the bye-laws:

Provided that the board shall meet at least once in every quarter:

Provided further that not more than two persons may be invited by the board in its meetings.

2[(3) The Chairperson or President, if for any reason, is unable to attend a meeting of the board, the

Vice-Chairperson or Vice-President and in the absence of both, any other Member of the board chosen by
the Members of the board present from amongst themselves at the meeting, shall preside over the
meeting.

(4) The quorum for a meeting of the board of directors of a multi-State co-operative society shall be

one-third of its total number of elected directors.]

**51. Chief Executive.—(1) There shall be a Chief Executive, by whatever designation called, of every**

multi-State co-operative society to be appointed by the board and he shall be a full-time employee of such
multi-State co-operative society.

3[(1A) No multi-State co-operative society shall appoint or continue the employment of any person as

the Chief Executive who—

(a) is below the age of twenty-one years or has attained the age of seventy years:

Provided that any person above the age of seventy years may be appointed by a special resolution

passed by three-fourth of the board members, in which case the explanatory statement annexed to the
notice for such motion shall indicate the justification for appointing such person;

(b) is an undischarged insolvent or has any time been adjudged as an insolvent;

(c) has at any time been convicted by a court of an offence and sentenced for a period of more than

six months; or

(d) does not meet the criteria for ‘fit and proper’, as determined by the Central Registrar in case of

multi-State credit societies or in case of non-credit multi-State societies, does not meet the criteria as
Central Government may prescribe in terms of education qualifications and relevant experience.]

(2) The Chief Executive shall be a member of the board and of the Executive Committee and such

other committees or sub-committees as may be constituted under sub-section (1) of section 53.

(3) Where the Central Government or the State Government holds fifty-one per cent. or more of the

equity share capital or of total shares of the multi-State co-operative society, the salary and
allowances payable to and other terms and conditions of service including pension, gratuity and other
retirement benefits of the Chief Executive shall be such as may be prescribed.

**52. Powers and functions of Chief Executive.—The Chief Executive shall under the general**

superintendence, direction and control of the board, exercise the powers and discharge the functions
specified below, namely:—

(a) day-to-day management of the business of the multi-State co-operative society;

(b) operating the accounts of the multi-State co-operative society and be responsible for making

arrangements for safe custody of cash;

(c) signing on the documents for and on behalf of the multi-State co-operative society;

1. Ins. by Act 11 of 2023, s. 19 (w.e.f. 3-8-2023).


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(d) making arrangements for the proper maintenance of various books and records of the

multi-State co-operative society and for the correct preparation, timely submission of periodical
statements and returns in accordance with the provisions of this Act, the rules and the bye-laws;

(e) convening meetings of the general body of the multi-State co-operative society, the board and

the Executive Committee and other committees or sub-committees constituted under sub-section (1)
of section 53 and maintaining proper records for such meetings;

(f) making appointments to the posts in the multi-State co-operative society in accordance with

the bye-laws;

(g) assisting the board in the formulation of policies, objectives and planning;

(h) furnishing to the board periodical information necessary for appraising the operations and

functions of the multi-State co-operative society;

(i) appoint the person to sue or be sued on behalf of the multi-State co-operative society;

(j) present the draft annual report and financial statement for the approval of the board within

1[forty-five days] of closure of the financial year;

(k) performing such other duties, and exercising such other powers, as may be specified in the

bye-laws of the multi-State co-operative society.

**53. Committees of board.—[2][(1) The board may constitute an Executive Committee, and such other**

committees or sub-committees as may be specified in the bye-laws of the multi-State co-operative
society:

Provided that the board shall constitute—

(a) an Audit and Ethics Committee;

(b) a Committee on prevention of sexual harassment at work place.]

(2) The Executive Committee or other committee or sub-committee referred to in sub-section (1) shall

perform such functions as are assigned to it in accordance with the bye-laws of the multi-State
co-operative society.

**54. Securing possession of records, etc.—(1) If—**

(a) the records, including registers and books of account of a multi-State co-operative society are

likely to be tampered with or destroyed or the funds or other property of such society are likely to be
mis-appropriated; or

(b) the board of a multi-State co-operative society is reconstituted at a general meeting of the

society; or

(c) a multi-State co-operative society is ordered to be wound up under section 86 and the

outgoing members of the board refuse to handover charge of the records and property of the society to
those having or entitled to receive such charge,

the Chief Executive may apply to the magistrate within whose jurisdiction the multi-State co-operative
society functions for securing the records and property of the society.

(2) On receipt of an application under sub-section (1), the magistrate may, by a warrant, authorise any

police officer not below the rank of a sub-inspector to enter and search any place where such records and
property are kept or are believed to be kept and to seize such records and property; and the records and
property so seized shall be handed over to the new board or the liquidator, as the case may be.

(3) Every such search and seizure shall be made in accordance with the provisions of the Code of

Criminal Procedure, 1973 (2 of 1974).


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CHAPTER VI

PRIVILEGES OF MULTI-STATE CO-OPERATIVE SOCIETIES

**55. Charge and set-off in respect of share or contribution or interest of members.—A multi-State**

co-operative society shall have a charge on the share or contribution or interest in the capital and on the
deposits of a member or past or deceased member and on any dividend, bonus or profits payable to a
member or past member or the estate of a deceased member in respect of any debt due from such member
or past member or the estate of such deceased member to the society and may set-off any sum credited or
payable to a member or past member or the estate of deceased member in or towards payment of any such
debt.

**56. Share of contribution or interest not liable to attachment.—(1) Subject to the provisions of**

section 55, the share or contribution or interest of a member or past or deceased member in the capital of
a multi-State co-operative society shall not be liable to attachment or sale under any decree or order of
any court in respect of any debtor liability incurred by such member, and an official assignee or a receiver
under any law relating to insolvency shall not be entitled to, or have any claim on, such share or
contribution or interest.

(2) The reserve fund, or the bad debt reserves, or the provident fund of the employees, of a

multi-State co-operative society invested by such society in accordance with the provision of this Act and
the bye-laws shall not be liable to attachment under any decree or order of a court in respect of any debt
or liability incurred by the society.

**57. Register of members.—Any register or list of members or shares kept by any multi-State**

co-operative society shall be _prima facie evidence of any of the following particulars entered therein,_
namely:—

(a) the date on which any person entered in such register or list became a member; and

(b) the date on which any such person ceased to be a member.

**58. Admissibility of copy of entry as evidence.—(1) A copy of any entry in a book of a multi-State**

co-operative society regularly kept in the course of its business shall, if certified in such manner as may
be prescribed, be received in any suit or legal proceedings as _prima facie evidence of the existence of_
such entry and shall be admitted as evidence of the matters, transactions and accounts therein recorded in
every case where, and to the same extent, as the original entry itself if admissible.

(2) No officer of a multi-State co-operative society and no officer in whose office the books of a

multi-State co-operative society are deposited after liquidation shall, in any legal proceedings to which
the society or the liquidator is not a party, be compelled to produce any of the society’s books or
documents the contents of which can be proved under this section, or to appear as a witness to prove the
matters, transactions and accounts therein recorded, except under an order of a court or an arbitrator made
for a special cause.

**59. Exemption from compulsory registration of instruments.—Nothing in clauses (b) and (c) of**

sub-section (1) of section 17 of the Registration Act, 1908 (16 of 1908) shall apply to—

(a) any instrument relating to shares in a multi-State co-operative society notwithstanding that the

assets of the society consist in whole or in part of immovable property; or

(b) any debenture issued by any such society and not creating, declaring, assigning, limiting or

extinguishing any right, title or interest to or in immovable property, except in so far as it entitles the
holder thereof to the security afforded by a registered instrument whereby the society has mortgaged,
conveyed or otherwise transferred the whole or part of its immovable property or any interest therein
to trustees upon trust for the benefit of the holders of such debentures; or

(c) an endorsement upon transfer of any debenture issued by any such society.

**60. Deduction from salary to meet multi-State co-operative society’ s claim in certain cases.—(1)**

Notwithstanding anything contained in any law for the time being in force, a member of a multi-State
co-operative society may execute an agreement in favour of that society providing that his employer
disbursing his salary or wages shall be competent to deduct every month from the salary or wages payable
to him, such amount as may be specified in the agreement and to pay the amount so deducted to the

i i i f i f d b h d d h b h i


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(2) On the execution of such agreement, the employer disbursing the salary or wages of the members

shall, if so required by the multi-State co-operative society, by a requisition in writing and so long as the
society does not intimate that the whole of such debt or other demand has been paid, make the deduction
in accordance with the agreement and pay the amount so deducted to the society within a period of
fourteen days of the date on which deduction has been made, as if it were a part of the salary or wages
payable on the day as required under the Payment of Wages Act, 1936 (4 of 1936), and such payment
shall be valid discharge of the employer for his liability to pay the amount deducted.

(3) If after the receipt of a requisition made under sub-section (2), the employer disbursing the salary

or wages of the member at any time fails to deduct the amount specified in the requisition from the salary
or wages payable to the member concerned or makes default in remitting the amount deducted to the
multi-State co-operative society, the society shall be entitled to recover any such amount from such
employer as arrears of land revenue and the amount so due from such employer shall rank in priority in
respect of the liability of such employer equal to that of the salary or wages in arrears.

**61. Government aid to multi-State co-operative societies.—Notwithstanding anything contained in**

any law for the time being in force, the Central Government or a State Government, on receipt of request
from a multi-State co-operative society and with a view to promoting co-operative movement, may,—

(a) subscribe to the share capital of a multi-State co-operative society;

(b) give loans or make advances to a multi-State co-operative society;

(c) guarantee the repayment of principal and payment of interest on debentures issued by a

multi-State co-operative society;

(d) guarantee the repayment of share capital of a multi-State co-operative society and dividends

thereon at such rates as may be specified by the Central Government or the State Government;

(e) guarantee the repayment of principal and payment of interest on loans and advances to a

multi-State co-operative society;

(f) give financial assistance in any other form, including subsidies, to any multi-State co-operative

society; and

(g) provide aid to any other multi-State co-operative society on such terms and conditions as may

be prescribed.

CHAPTER VII

PROPERTIES AND FUNDS OF MULTI-STATE CO-OPERATIVE SOCIETIES

**62. Funds not to be divided by way of profit.—(1) No part of the funds, other than net profits, of a**

multi-State co-operative society shall be divided by way of bonus or dividend or otherwise distributed
among its members.

(2) The net profits of a multi-State co-operative society referred to in sub-section (1) in respect of a

society earning profits shall be calculated by deducting from the gross profit for the year, all interest
accrued and accruing in relation to amounts which are overdue, establishment charges, interest payable on
loans and deposits, audit fees, working expenses including repairs, rent, taxes and depreciation, bonus
payable to employees under the law relating to payment of bonus for the time being in force, and
equalisation fund for such bonus, provision for payment of income-tax and making approved donations
under the Income-tax Act, 1961 (43 of 1961), development rebate, provision for development fund, bad
debt fund, price fluctuation fund, dividend equalisation fund, share capital redemption fund, investment
fluctuation fund, provision for retirement benefits to employees, and after providing for or writing off bad
debts and losses not adjusted against any fund created out of profit:

Provided that such society may add to the net profits for the year interest accrued in the preceding

years, but actually recovered during the year:

Provided further that in the case of such multi-State co-operative societies as do not have share

capital, the surplus of income over expenditure shall not be treated as net profits and such surplus shall be
dealt with in accordance with the bye-laws.


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**63. Disposal of net profits.—(1) A multi-State co-operative society shall, out of its net profits in any**

year,—

(a) transfer an amount not less than twenty-five per cent. to the reserve fund;

1[(b) credit annually one per cent. of net profit to co-operative education fund to be maintained by

the Central Government in such manner as may be prescribed and the proceeds from such fund shall
be used for co-operative education and training through the National Co-operative Union of India and
any other agency in such manner as may be determined by the Central Government;]

(c) transfer an amount not less than ten per cent. to a reserve fund for meeting unforeseen losses.

(2) Subject to such conditions as may be prescribed, the balance of the net profits may be utilised for

all or any of the following purposes, namely:—

(a) payment of dividend to the members on their paid-up share capital at a rate not exceeding the

prescribed limit;

(b) constitution of, or contribution to, such special funds including education funds, as may be

specified in the bye-laws;

(c) donation of amounts not exceeding five per cent. of the net profits for any purpose connected

with the development of co-operative movement or charitable purpose as defined in section 2 of the
Charitable Endowments Act, 1890 (6 of 1890);

(d) payment of _ex gratia_ amount to employees of the multi-State co-operative society to the

extent and in the manner specified in the bye-laws.

2[63A. Establishment of Co-operative Rehabilitation, Reconstruction and Development

**Fund. — (1) The Central Government shall establish a Fund, to be called the Co-operative Rehabilitation,**
Reconstruction and Development Fund for revival of sick multi-State co-operative societies as referred to
in section 63B and for development purposes in such manner as may be determined by it and there shall
be credited to such Fund annually by multi-State co-operative societies which are in profit for the
preceding three financial years one crore rupees or one per cent. of the net profits of such multi-State cooperative society, whichever is less.

(2) The Central Government shall, by notification, constitute a Committee, consisting of such

members as it may deem fit, to administer the Fund, and maintain separate accounts and other relevant
records in relation to the Fund in such form as may be specified by the Central Government in
consultation with the Comptroller and Auditor-General of India.

(3) The Committee shall spend the money out of the Fund for carrying out the objects for which such

Fund has been established.

**63B. Rehabilitation and reconstruction of sick societies.— (1) If, at any time, the Central**

Registrar, is of the opinion that a multi-State co-operative society has become sick, he may, by an order,
declare such society as sick co-operative society.

(2) Where a multi-State co-operative society is declared as a sick co-operative society under

sub-section (1), the Central Government or any person or agency authorised by it, may prepare a scheme
for rehabilitation and reconstruction of the society and hand it over to the society for approval of the
general body.

(3) The Central Government may, on the recommendation of the general body and to give effect to

the scheme for rehabilitation and reconstruction referred to in sub-section (2), re-organise the board of
such society with such persons, having experience in the field of co-operation, management, finance,
accountancy and any other area relating to such societies as may be recommended by the general body:

Provided that in respect of a sick multi-State co-operative bank, any scheme for rehabilitation or

reconstruction shall be done with the prior approval of the Reserve Bank.

_Explanation.––For the purposes of this section, the expression “sick co-operative society” means a_

multi-State co-operative society being a society registered under the provisions of this Act which has at
the end of any financial year accumulated losses equal to or exceeding total of its paid-up capital, free


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reserves and surpluses and has also suffered cash losses in such financial year and the financial year
immediately preceding such financial year.

**63C. Financial assistance to multi-State co-operative societies for development.—(1) The Central**

Government may, on an application made by a multi-State co-operative society which has contributed to
the Fund for continuous five preceding financial years, grant such financial assistance as it may consider
appropriate to the society out of the Fund for infrastructural requirement:

Provided that at least fifty per cent. of the total requirement shall be borne by the multi-State

co-operative society and the financial assistance from the Fund shall not exceed more than the fifty per
cent. of such requirement.

(2) The Committee constituted under sub-section (2) of section 63A shall examine and recommend to

the Central Government for providing the financial assistance to the multi-State co-operative society to
such extent and on such terms and conditions as it may consider necessary.]

**64. Investment of funds.—A multi-State co-operative society may invest or deposit its funds—**

(a) in a co-operative bank, State co-operative bank, co-operative land development bank or

Central co-operative bank; or

1[(b) in any of the securities issued by the Central Government, State Government, Government

Corporations, Government Companies, Authorities, Public Sector Undertakings or any other
securities ensured by Government guarantees;]

(c) in the shares or securities of any other multi-State co-operative society or any co-operative

society; or

(d) in the shares, securities or assets of a subsidiary institution or any other institution; [2][in the

same line of business as the multi-State co-operative society] or

3[(e) with any other scheduled or nationalised bank.

_Explanation.––For the purposes of this clause, the expression,—_

(i) “scheduled bank” shall have the same meaning as assigned to it in clause (e) of

section 2 of the Reserve Bank of India Act, 1934 (2 of 1934); and

(ii) “nationalised bank” means a corresponding new bank constituted under

sub-section (1) of section 3 of the Banking Companies (Acquisition and Transfer of
Undertakings) Act, 1970 (5 of 1970) and the Banking Companies (Acquisition and Transfer
of Undertakings) Act, 1980 (40 of 1980); or

(f) in such other manner as may be determined by the Central Government.]

**65. Restriction on contribution.—No multi-State co-operative society shall make a contribution,**

either in money or in kind, whether directly or indirectly, to an institution which has an object of
furtherance of the interest of a political party.

**66. Restriction on loans.—(1) A multi-State co-operative society, other than a co-operative bank,**

shall not make a loan to a member on the security of his share or on the security of a non-member.

(2) Notwithstanding anything contained in sub-section (1), a multi-State co-operative society may

make a loan to a depositor on the security of his deposit.

**67. Restrictions on borrowing.—(1) A multi-State co-operative society may receive deposits, [4][from**

its voting members] raise loans and receive grants from external sources to such extent and under such
conditions as may be specified in the bye-laws:

Provided that the total amount of deposits and loans received during any financial year shall not

exceed [5][such multiples as may be determined by the Central Government] of the sum of subscribed share
capital and accumulated reserves:

1. Subs. by Act 11 of 2023, s. 25 for clause (b) (w.e.f. 3-8-2023).
2. Ins. by s. 25, ibid. (w.e.f. 3-8-2023).
3. Subs. by 25, ibid., for clause (e) and (f) (w.e.f. 3-8-2023).


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Provided further that while calculating the total sum of subscribed share capital and accumulated

reserves, the accumulated losses shall be deducted.

1[Explanation.— For the removal of doubts, it is hereby clarified that a multi-State co-operative

society shall not be entitled to receive deposits from persons other than voting members.]

(2) Subject to the provisions of sub-section (1), a multi-State co-operative society may accept funds

or borrow funds for the fulfilment of its objects on such terms and conditions as are mutually contracted
upon.

(3) A multi-State co-operative society may issue non-convertible debentures or other instruments

subject to the provisions of any law for the time being in force to raise resources for the fulfilment of its
objects to the extent of twenty-five per cent. of its paid-up share capital.

**68. Restriction on other transactions with non-members.—Save as provided in sections 66 and 67,**

the transaction of a multi-State co-operative society with any person other than a member, shall be subject
to such prohibitions and restrictions, if any, as may be specified in the bye-laws.

**69. Contributory provident fund.—(1) Subject to the provisions of the Employees’ Provident Fund**

and Miscellaneous Provisions Act, 1952 (19 of 1952), a multi-State co-operative society having such
number or class of employees as may be prescribed, may establish a contributory provident fund for the
benefit of its employees to which shall be credited all contributions made by the employees and the
society in accordance with the bye-laws of the society.

(2) Monies standing to the credit of any contributory provident fund established by a multi-State

co-operative society under sub-section (1) shall not—

(a) be used in the business of the society;

(b) form part of the assets of the society;

(c) be liable to attachment or be subject to any other process of any court or other authority.

CHAPTER VIII

AUDIT, INQUIRY, INSPECTION AND SURCHARGE

**70. Appointment and remuneration of auditors.—(1) Every multi-State co-operative society shall**

cause to be audited by an auditor referred to in sub-section (2), its accounts at least once in each year.

(2) Every multi-State co-operative society shall, at each annual general meeting, appoint an auditor or

auditors to hold office from the conclusion of that meeting until the conclusion of the next annual general
meeting and shall, within seven days of the appointment, give intimation thereof to every auditor so
appointed:

1[Provided that such auditors or auditing firm shall be appointed from a panel approved by the Central

Registrar:

Provided further that in case of multi-State co-operative banks, multi-State credit societies with

deposits of above five hundred crore rupees and multi-State non-credit societies with turnover of above
five hundred crore rupees, the auditor shall be appointed from a panel of auditors approved for audit of
such societies by the Central Registrar.]

(3) Every auditor appointed under sub-section (1) shall, within thirty days of the receipt from the

multi-State co-operative society of the intimation of his appointment, inform the Central Registrar in
writing that he has accepted, or refused to accept, the appointment.

2[(3A) An auditor appointed under sub-section (2) shall submit the audit of accounts report to the

multi-State co-operative society, within six months from the date of closing of the financial year, to which
such accounts relate.]

(4) A retiring auditor shall be re-appointed unless—

(a) he is not qualified for re-appointment;


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(b) he has given the multi-State co-operative society a notice in writing of his unwillingness to be

re-appointed;

(c) a resolution has been passed at the general meeting of members appointing some body instead

of him or providing expressly that he shall not be re-appointed; or

(d) where notice has been given of an intended resolution to appoint some person or persons in

the place of a retiring auditor, and by reason of the death, incapacity or disqualification of that person
or all those persons, as the case may be, the resolution cannot be proceeded with.

(5) Where at an annual general meeting no auditors are appointed or re-appointed, the Central

Registrar may appoint a person to fill the vacancy.

(6) First auditor or auditors of a multi-State co-operative society shall be appointed by the board

within one month of the date of registration of such society and the auditor or auditors so appointed shall
hold office until the conclusion of the first annual general meeting:

Provided that—

(a) the multi-State co-operative society may, at a general meeting, remove any such auditor or all

or any of such auditors and appoint in his or their places any other person or persons who have been
nominated for appointment by any member of the multi-State co-operative society and of whose
nomination notice has been given to the members of the multi-State co-operative society not less than
fourteen days before the date of the meeting; and

(b) if the board fails to exercise its powers under this sub-section, the multi-State co-operative

society in the general meeting may appoint the first auditor or auditors.

(7)(a) The multi-State co-operative society may fill any causal vacancy in the office of an auditor; but

while any such vacancy continues, the remaining auditor or auditors, if any, may act:

1[Provided that where such vacancy is caused by the resignation or death of an auditor, the vacancy

shall be filled by the board from the panel of auditors from which such auditor was appointed.]

(b) Any auditor appointed in a causal vacancy shall hold office until the conclusion of the next annual

general meeting.

(8) Any auditor appointed under this section may be removed from office before the expiry of his

term by the multi-State co-operative society in general meeting.

(9) The remuneration of the auditors of a multi-State co-operative society—

(a) in the case of an auditor appointed by the board or the Central Registrar may be fixed by the

board or the Central Registrar, as the case may be; and

(b) subject to clause (a), shall be fixed by the multi-State co-operative society in general meeting

or in such manner as the multi-State co-operative society in general meeting may determine.

_Explanation.—For the purposes of this sub-section, any sums paid by the multi-State co-operative_

society in respect of the auditors’ expenses shall be deemed to be included in the expression
“remuneration”.

2[(10) The audit report of the accounts of the national co-operative societies shall be laid before each

House of Parliament.]

3[70A. Concurrent Audit.— In case of multi-State co-operative societies,––

(i) having an annual turnover more than the amount as determined by the Central Government; or

(ii) having deposit of more than the amount as determined by the Central Government,

the concurrent audit shall be carried out by an auditor appointed from a panel of auditors approved by
the Central Registrar.]

1. Subs. by Act 11 of 2023, s. 27, for clause (a) (w.e.f. 3-8-2023).


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**71. Provision as to resolutions for appointing or removing auditors.—(1) A special notice shall be**

required for a resolution at an annual general meeting appointing as auditor a person other than a retiring
auditor, or providing expressly that a retiring auditor shall not be re-appointed.

(2) On receipt of notice of such a resolution, the multi-State co-operative society shall forthwith send

a copy thereof to the retiring auditor.

(3) Where notice is given of such a resolution and the retiring auditor makes with respect thereto

representations in writing to the multi-State co-operative society (not exceeding a reasonable length) and
requests their notification to members of the multi-State co-operative society, the multi-State co-operative
shall, unless the representations are received by it too late for it to do so,—

(a) in any notice of the resolution given to members of the multi-State co-operative society, state

the fact of the representations having been made; and

(b) send a copy of the representation to every member of the multi-State co-operative society to

whom notice of the meeting is sent, whether before or after the receipt of the representations by the
multi-State co-operative society,

and if a copy of the representations is not sent as aforesaid because they were received too late or because
of the multi-State co-operative society’s default, the auditor may (without prejudice to his right to be
heard orally) require that the representations shall be read out at the meeting.

**72. Qualifications and disqualifications of auditors.—(1) A person shall not be qualified for**

appointment as an auditor of a multi-State co-operative society unless he is a chartered accountant within
the meaning of the Chartered Accountants Act, 1949 (38 of 1949).

(2) None of the following persons shall be qualified for appointment as auditor of a multi-State

co-operative society—

(a) a body corporate;

(b) an officer or employee of the multi-State co-operative society;

(c) a person who is a member, or who is in the employment, of an officer or employee of the

multi-State co-operative society;

(d) a person who is indebted to the multi-State co-operative society or who has given any

guarantee or provided any security in connection with the indebtedness of any third person to the
multi-State co-operative society for an amount exceeding one thousand rupees.

(3) A person shall also not be qualified for appointment as an auditor of a multi-State co-operative

society if he is, by virtue of sub-section (2), disqualified for appointment as an auditor of any other body
corporate or multi-State co-operative society or co-operative society.

(4) If an auditor becomes subject, after his appointment, to any of the disqualifications specified in

sub-sections (2) and (3), he shall be deemed to have vacated his office as such.

**73. Powers and duties of auditors.—(1) Every auditor of a multi-State co-operative society shall**

have a right of access at all times to the books, accounts and vouchers of the multi-State co-operative
society, whether kept at the head office of the multi-State co-operative society or elsewhere, and shall be
entitled to require from the officers or other employees of the multi-State co-operative society such
information and explanations as the auditor may think necessary for the performance of his duties as an
auditor.

(2) Without prejudice to provisions of sub-section (1), the auditor shall inquire,—

(a) whether loans and advances made by the multi-State co-operative society on the basis of

security have been properly secured and whether the terms on which they have been made are not
prejudicial to the interests of the multi-State co-operative society or its members;

(b) whether transactions of the multi-State co-operative society which are represented merely by

book entries are not prejudicial to the interests of the multi-State co-operative society;

(c) whether personal expenses have been charged to revenue account; and

(d) where it is stated in the books and papers of the multi-State co-operative society that any


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allotment, and if no cash has actually been so received, whether the position as stated in the account
books and the balance-sheet is correct, regular and not misleading.

(3) The auditor shall make a report to the members of the multi-State co-operative society on the

accounts examined by him and on every balance-sheet and profit and loss account and on every other
document required to be part of or annexed to the balance-sheet or profit and loss account, which are laid
before the multi-State co-operative society in general meeting during his tenure of office, and the report
shall state whether, in his opinion and to the best of his information and according to the explanations
given to him, the said accounts give the information required by this Act in the manner so required and
give a true and fair view,—

(a) in the case of the balance-sheet, of the state of the multi-State co-operative society’s affairs as

at the end of its financial year; and

(b) in the case of the profit and loss account, of the profit or loss for its financial year.

(4) The auditors’ report shall also state—

(a) whether he has obtained all the information and explanations which to the best of his

knowledge and belief were necessary for the purposes of his audit;

(b) whether, in his opinion, proper books of account have been kept by the multi-State

co-operative society so far as appears from his examination of those books, and proper returns
adequate for the purposes of his audit have been received from branches or offices of the multi-State
co-operative society not visited by him;

(c) whether the report on the accounts of any branch office audited by a person other than the

multi-State co-operative society’s auditor has been forwarded to him and how he has dealt with the
same in preparing the auditor’s report;

(d) whether the multi-State co-operative society’s balance-sheet and profit and loss account dealt

with by the report are in agreement with the books of account and returns.

(5) Where any of the matters referred to in clauses (a) and (b) of sub-section (3) or in clauses (a), (b),

(c) and (d) of sub-section (4) is answered in the negative or with a qualification, the auditor’s report shall
state the reason for the answer.

1[(6) the multi-State co-operative society or class of multi-State co-operative societies, as the case

may be, shall adopt such standards of auditing and accounting as may be determined by the Central
Government:

Provided that until such standards of auditing and accounting are specified, the auditing and

accounting standards specified by the Institute of Chartered Accountants of India constituted by subsection (1) of section 3 of the Chartered Accountants Act, 1949 shall be deemed to be the standards of
auditing and accounting:

Provided further that the multi-State co-operative banks shall adopt the standards of accounting and

auditing, if any, laid down by the Reserve Bank.]

**74. Signature of audit report, etc.—Only the person appointed as an auditor of the multi-State**

co-operative society shall sign the auditor’s report, or sign or authenticate any other document of the
multi-State co-operative society required by law to be signed or authenticated by the auditor.

**75. Reading and inspection of auditor’s report.—The auditor’s report shall be read before the**

multi-State co-operative society in the general meeting and shall be open to inspection by any member of
the multi-State co-operative society.

**76. Right of auditor to attend general meeting.—All notices of, and other communications relating**

to, any general meeting of a multi-State co-operative society, which any member of the multi-State
co-operative society is entitled to have sent to him, shall also be forwarded to the auditor of the multiState co-operative society; and the auditor shall be entitled to attend any general meeting and to be heard
at any general meeting which he attends on any part of the business which concerns him as auditor.


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**77. Power of Central Government to direct special audit in certain cases.—(1) Where the Central**

Government is of the opinion—

(a) that the affairs of any multi-State co-operative society are not being managed in accordance

with self-help and mutual aid and co-operative principles or prudent commercial practices; or with
sound business principles; or

(b) that any multi-State co-operative society is being managed in a manner likely to cause serious

injury or damage to the interest of the trade, industry or business to which it pertains; or

(c) that the financial position of any multi-State co-operative society is such as to endanger its

solvency,

the Central Government may at any time by order direct that a special audit of the multi-State
co-operative society’s accounts for such period or periods as may be specified in the order, shall be
conducted and may by the same or a different order appoint either a chartered accountant as defined in
clause (b) of sub-section (1) of section 2 of the Chartered Accountants Act, 1949 (38 of 1949) or the
multi-State co-operative society’s auditor himself to conduct with special audit:

Provided that the Central Government shall not order for special audit of a multi-State co-operative

society’s accounts if that Government or the State Government either by itself or both hold less than
fifty-one per cent. of the paid-up share capital or of the shares in such multi-State co-operative society.

(2) The chartered accountant or the multi-State co-operative society’s auditor appointed under

sub-section (1) to conduct a special audit as aforesaid is hereafter in this section referred to as the special
auditor.

(3) The special auditor shall have the same powers and duties in relation to the special audit as an

auditor of a multi-State co-operative society has under section 73:

Provided that the special auditor shall, instead of making his report to the members of the multi-State

co-operative society, make the same to the Central Government.

(4) The report of the special auditor shall, as far as may be, include all the matters required to be

included in the auditors’ report under section 73 and, if the Central Government so directs, shall also
include a statement on any other matter which may be referred to him by that Government.

(5) The Central Government may by order direct any person specified in the order to furnish to the

special auditor within such time as may be specified therein such information or additional information as
may be required by the special auditor in connection with the special audit.

(6) On receipt of the report of the special auditor, the Central Government may take such action on

the report as it considers necessary in accordance with the provisions of this Act or any other law for the
time being in force:

Provided that if the Central Government does not take any action on the report within four months

from the date of its receipt, that Government shall send to the multi-State co-operative society either a
copy of, or relevant extract from, the report with its comments thereon and require the multi-State
co-operative society either to circulate that copy or those extracts to the members or to have such copy or
extracts read before the multi-State co-operative society at its next general meeting.

(7) The expenses of, and incidental to, any special audit under this section (including the

remuneration of the special auditor) shall be determined by the Central Government which determination
shall be final and paid by the multi-State co-operative society and in default of such payment, shall be
recoverable from the multi-State co-operative society as an arrear of land revenue.

**78. Inquiry by Central Registrar.—(1) The Central Registrar may, on a request from a federal**

co-operative to which a multi-State co-operative society is affiliated or a creditor or not less than
one-third of the members of the board or not less than one-fifth of the total number of members of a
multi-State co-operative society 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
multi-State co-operative society:

Provided that no inquiry under this sub-section shall be held unless a notice of not less than fifteen

days has been given to the multi-State co-operative society.


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1[(1A) If the Central Registrar is satisfied on the basis of information available with him or furnished

to him by a Government agency, that the business of a multi-State co-operative society is being carried on
for a fraudulent or unlawful purpose, he may, after informing the multi-State co-operative society of the
allegations made against it, by a written order, call on the multi-State co-operative society to furnish in
writing any information or explanation, with the endorsement of the board of the society, on matters
contained in such order within the time specified therein:

Provided that if the Central Registrar is not satisfied with the explanation of the society, he shall

either himself or through an office or agency authorised by him, conduct inquiry into the constitution,
working and financial condition of the society.

(1B) Notwithstanding anything contained in this Act, the Central Registrar shall, either _suo motu or_

through an officer or agency authorised by him, conduct inquiry into the constitution, working and
financial condition of any multi-State co-operative society, once in such period as may be determined by
the Central Government.]

(2) The Central Registrar or the person authorised by him under sub-section (1) shall have the

following powers, namely:—

(a) he shall at all reasonable times have free access to the books, accounts, documents, securities,

cash and other properties belonging to or in the custody of the multi-State co-operative society and
may summon any person in possession or responsible for the custody of any such books, accounts,
documents, securities, cash or other properties to produce the same, at any place specified by him;

(b) he may, notwithstanding any bye-law specifying the period of notice for a general meeting of

the multi-State co-operative society, require the officers of the society to call a general meeting of the
society by giving notice of not less than seven days at such time and place at the headquarters of the
society to consider such matters, as may be directed by him; and where the officers of the society
refuse or fail to call such a meeting, he shall have power to call it himself;

(c) he may summon any person who is reasonably believed by him to have any knowledge of the

affairs of the multi-State co-operative society to appear before him at any place at the headquarters of
the society or any branch thereof and may examine such person on oath.

(3) Any meeting called under clause (b) of sub-section (2) shall have all the powers of a general

meeting of the society called under the bye-laws of the society and its proceedings shall be regulated by
such bye-laws.

(4) The Central Registrar shall, within a period of three months of the date of receipt of the report,

communicate the report of inquiry to the multi-State co-operative society, the financial institutions, if any,
to which the society is affiliated, and to the person or authority, if any, at whose instance the inquiry is
made.

**79. Inspection of multi-State co-operative societies.—(1) The Central Registrar may, on a request**

from a federal co-operative to which a multi-State co-operative society is affiliated or a creditor or not
less than one-third of the members of the board or not less than one-fifth of the total number of members
of a multi-State co-operative society by general or special order in writing in this behalf, inspect-or direct
any person authorised by him by order in writing in this behalf to make an inspection into the
constitution, working and financial condition of a multi-State co-operative society:

Provided that no inspection under this sub-section shall be made unless a notice of not less than

fifteen days has been given to the multi-State co-operative society.

(2) (a) For the purpose of inspection under sub-section (1), the Central Registrar or the person

authorised by him under that sub-section shall at all times have access to all books, accounts, papers,
vouchers, securities, stock and other property of that society and may, in the event of serious irregularities
discovered during inspection, take 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 Central Registrar to call a meeting of the
board and also a general meeting of the society where such general meeting is, in his opinion, necessary.


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(b) Every officer or member of a multi-State co-operative society shall furnish such information with

regard to the working of the society as the Central Registrar or the person making such inspection may
require.

(3) A copy of the report of inspection under this section shall be communicated to the multi-State

co-operative society within a period of three months from the date of completion of such inspection.

**80. Inspection of books of indebted multi-State co-operative societies.—(1) The Central Registrar**

shall, on the application of a creditor of a multi-State co-operative society, inspect, or direct some person
authorised by him by order in writing in this behalf to inspect, the books of the society:

Provided that no such inspection shall be made unless the applicant—

(a) satisfies the Central Registrar that the debt is a sum then due, and that he has demanded

payment thereof and has not received satisfaction within a reasonable time;

(b) deposits with the Central Registrar such sum as security for the costs of the proposed

inspection as the Central Registrar may require.

(2) The Central Registrar shall communicate the result of any such inspection to the creditor.

**81. Costs of inquiry and inspection.—Where an inquiry is held under section 78 or an inspection is**

made under section 79, the Central Registrar may apportion the costs, or such part of the costs, as he may
think fit, between the multi-State co-operative society, the members or creditors demanding an inquiry or
inspection, and the officers or former officers and the members or past members of that society:

Provided that—

(a) no order of apportionment of the costs shall be made under this section unless the society or

the person liable to pay the costs thereunder has had a reasonable opportunity of being heard;

(b) the Central Registrar shall state in writing under his own hand the grounds on which the costs

are apportioned.

**82. Recovery of costs.—Any sum awarded by way of costs under section 81 may be recovered, on**

application to a magistrate having jurisdiction in the place where the person, from whom the money is
claimable, actually and voluntarily resides or carries on business, and such magistrate shall recover the
same as if it were a fine imposed by himself.

**83. Repayment, etc.—(1) If in the course of an audit, inquiry, inspection or the winding up of a**

multi-State co-operative society, it is found that any person, who is or was entrusted with the organisation
or management of such society or who is or has at any time been an officer or an employee of the society,
has made any payment contrary to this Act, or the bye-laws or has caused any deficiency in the assets of
the society by breach of trust or wilful negligence or has misappropriated or fraudulently retained any
money or other property belonging to such society, the Central Registrar may, of his own motion or on
the application of the board, liquidator or any creditor inquire himself or direct any person authorised by
him, by an order in writing in this behalf, to inquire into the conduct of such person within a period of two
years from the date of the report of the audit, inspection or inquiry or the date of the order of winding up,
as the case may be:

Provided that where the Central Registrar is satisfied that such inquiry could not be commenced

during the period of two years aforesaid on account of fraud or concealment of facts, he may make or
direct the inquiry to be made within such period not exceeding six years from the date of the report of the
audit, inspection or inquiry or the date of the order of winding up, as he thinks fit.

(2) Where an inquiry is made under sub-section (1), the Central Registrar may, after giving the person

concerned a reasonable opportunity of being heard, make an order requiring him to repay or restore the
money or property or any part thereof, with interest at such rate, or to pay contribution and costs or
compensation to such extent, as the Central Registrar may consider just and equitable.

CHAPTER IX

SETTLEMENT OF DISPUTES

**84. Reference of disputes.—(1) Notwithstanding anything contained in any other law for the time**

being in force, if any dispute [other than a dispute regarding disciplinary action taken by a multi-State


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of the Industrial Disputes Act, 1947 (14 of 1947)] touching the constitution, management or business of a
multi-State co-operative society arises—

(a) among members, past members and persons claiming through members, past members and

deceased members, or

(b) between a member, past members and persons claiming through a member, past member or

deceased member and the multi-State co-operative society, its board or any officer, agent or employee
of the multi-State co-operative society or liquidator, past or present, or

(c) between the multi-State co-operative society or its board and any past board, any officer,

agent or employee, or any past officer, past agent or past employee, heirs or legal representatives of
any deceased officer, deceased agent or deceased employee of the multi-State co-operative society, or

(d) between the multi-State co-operative society and any other multi-State co-operative society,

between a multi-State co-operative society and liquidator of another multi-State co-operative society
or between the liquidator of one multi-State co-operative society and the liquidator of another
multi-State co-operative society,

such dispute shall be referred to arbitration.

(2) For the purposes of sub-section (1), the following shall be deemed to be disputes touching the

constitution, management or business of a multi-State co-operative society, namely:—

(a) a claim by the multi-State co-operative society for any debt or demand due to it from a

member or the nominee, heirs or legal representatives of a deceased member, whether such debt or
demand be admitted or not;

(b) a claim by a surety against the principal debtor where the multi-State co-operative society has

recovered from the surety any amount in respect of any debt or demand due to it from the principal
debtor as a result of the default of the principal debtor, whether such debt or demand is admitted or
not;

(c) any dispute arising in connection with the election of any officer of a multi-State co-operative

society.

(3) If any question arises whether a dispute referred to arbitration under this section is or is not a

dispute touching the constitution, management or business of a multi-State co-operative society, the
decision thereon of the arbitrator shall be final and shall not be called in question in any court.

(4) Where a dispute has been referred to arbitration under sub-section (1), the same shall be settled or

decided by the arbitrator to be appointed by the Central Registrar.

(5) Save as otherwise provided under this Act, the provisions of the Arbitration and Conciliation

Act, 1996 (26 of 1996) shall apply to all arbitration under this Act as if the proceedings for arbitration
were referred for settlement or decision under the provisions of the Arbitration and Conciliation Act,
1996.

**85. Limitation.—(1) Notwithstanding anything contained in the Limitation Act, 1963 (36 of 1963),**

but subject to the specific provisions made in this Act, the period of limitation in the case of a dispute
referred to arbitration shall,—

(a) when the dispute relates to the recovery of any sum including interest thereon due to a

multi-State co-operative society by a member thereof, be computed from the date on which such
member dies or ceases to be a member of the society;

(b) save as otherwise provided in clause (c), when the dispute relates to any act or omission on

the part of any of the parties referred to in clause (b) or clause (c) or clause (d) of sub-section (1) of
section 84, be six years from the date on which the act or omission, with reference to which the
dispute arose, took place;

(c) when the dispute is in respect of an election of an officer of a multi-State co-operative society,

be one month from the date of the declaration of the result of the election.

(2) The period of limitation in the case of any dispute, except those mentioned in sub-section (1),

which are required to be referred to arbitration shall be regulated by the provisions of the Limitation Act,
1963 (36 of 1963) as if the dispute were a suit and the arbitrator a civil court


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(3) Notwithstanding anything contained in sub-sections (1) and (2), the arbitrator may admit a dispute

after the expiry of the period of limitation, if the applicant satisfies the arbitrator that he had sufficient
cause for not referring the dispute within such period.

1[CHAPTER IXA

REDRESSAL OF COMPLAINTS

2[85A. Co-operative Ombudsman.— (1) The Central Government shall appoint, one or more Co
operative Ombudsman with territorial jurisdiction for inquiring into the complaints made by any member
of the multi-State co-operative societies regarding their deposits, equitable benefits of society’s
functioning or any other issue affecting the individual rights of the concerned member, in such manner, as
may be prescribed.

(2) The Co-operative Ombudsman shall, on receipt of a complaint, complete the process of inquiry

and adjudicate within a period of three months from the date of receipt of the complaint and may issue
necessary directions to the society during the course of inquiry and the society shall be bound to comply
with the same within a period of one month from the date of issuance of such directions.

(3) The multi-State co-operative society aggrieved by any directions of the Ombudsman may file an

appeal in such manner as may be prescribed, within a period of one month before the Central Registrar
who shall decide the appeal within a period of forty-five days and the decision of the Central Registrar
shall be final and binding:

Provided that the Central Registrar may entertain the appeal after the expiry of said period of one

month, if he is satisfied that the society was prevented by sufficient cause from preferring the appeal in
time.

(4) The Ombudsman shall submit periodic reports to the Central Registrar of Co-operative Societies.
(5) The Co-operative Ombudsman while conducting the inquiry under sub-section (1), shall exercise

the same powers as are vested in a civil court under the Code of Civil Procedure, 1908, (5 of 1908)––

(a) for summoning and enforcing the attendance of persons;
(b) examining them on oath;
(c) discovery and production of books of account and other documents; and
(d) any other matter which may be prescribed.]

CHAPTER X

WINDING UP OF MULTI-STATE CO-OPERATIVE SOCIETY

**86. Winding up of multi-State co-operative societies.—(1) If the Central Registrar, after audit has**

been conducted under section 70 or special audit has been conducted under section 77 or an inquiry has
been held under section 78 or an inspection has been made under section 79, [3][or section 108] is of
opinion that the society ought to be wound up, he may, after giving the society a reasonable opportunity
of making its representations by order, direct it to be wound up.

(2) The Central Registrar may, of his own motion and after giving the multi-State co-operative

society a reasonable opportunity of making its representation, make an order directing the winding up of
the multi-State co-operative society,—

4[(a) where the number of members or the number of societies or the number of persons, as the

case may be, has at any time reduced below the number of members or societies or persons as
specified in  sub-section (2) of section 6:

Provided that the multi-State co-operative society shall be given six months’ time to restore the

number of members or societies or persons to the requisite number;]

(b) where the multi-State co-operative society has not commenced working within a period of six

months of the date of its registration or such extended period as the Central Registrar may allow in
this behalf or has ceased to function in accordance with [5][co-operative principles; or]

1. Ins. by Act 11 of 2023, s. 30 (w.e.f. 3-8-2023).
2. Ins. by s. 31, ibid. (w.e.f. 3-8-2023).
3. Ins. by s. 32, ibid. (w.e.f. 3-8-2023).


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1[(c) where the Central Registrar has reasons to believe that the registration was obtained by

misrepresentation of facts, submission of false or misleading information, suppression of material
facts or fraud thereby compromising the spirit of co-operation.]

(3) The Central Registrar may cancel an order for the winding up of a multi-State co-operative

society, at any time, in any case where, in his opinion, the society should continue to exist.

(4) A copy of such order shall be communicated by registered post to the multi-State co-operative

society and to the financial institutions, if any, of which the society is a member.

2[(5) Notwithstanding anything contained in this section, in case of winding up of multi-State

co-operative banks, the provisions of the Banking Regulation Act, 1949 (10 of 1949) shall also apply.]

(6) Notwithstanding anything contained in this section, the Central Registrar shall make an order for

the winding up of a multi-State co-operative society, if the society, by a resolution passed by two-third
majority of members present and voting in a general meeting decides for winding up of that society.

1[Provided that prior to winding up, “no objection” from the institutional lenders, who have

outstanding loans from the society, shall be required in writing.

_Explanation.—For the purposes of this proviso, the expression “institutional lenders” includes banks,_

savings and loan association, trust company, insurance company, real estate investment trust, pension
fund and the like.]

**87. Winding up of co-operative bank at the direction of Reserve Bank.—Notwithstanding**

anything to the contrary contained elsewhere in this Act, the Central Registrar shall make an order for the
winding up of a co-operative bank, if so required by the Reserve Bank in the circumstances mentioned in
section 13D of the Deposit Insurance and Credit Guarantee Corporation Act, 1961 (47 of 1961).

**88. Reimbursement to the Deposit Insurance Corporation by liquidator.—Where a co-operative**

bank, being an insured bank within the meaning of the Deposit Insurance and Credit Guarantee
Corporation Act, 1961 (47 of 1961), is wound up and the Deposit Insurance Corporation has become
liable to the depositors of the insured bank under sub-section (1) of section 16 of that Act, the Deposit
Insurance Corporation shall be reimbursed by the liquidator or such other person in the circumstances, to
the extent and in the manner provided in section 21 of that Act.

**89. Liquidator.—(1) Where the Central Registrar has made an order under section 86 for the winding**

up of a multi-State co-operative society, the Central Registrar may appoint a liquidator for the purpose
and fix his remuneration.

(2) A liquidator shall, on appointment, take into his custody or under his control all the property,

effects and actionable claims to which the multi-State co-operative society is or appears to be entitled and
shall take such steps as he may deem necessary or expedient to prevent loss or deterioration of, or damage
to, such property, effects and claims and he may carry on the business of the multi-State co-operative
society so far as may be necessary with the previous approval of the Central Registrar.

(3) Where an appeal is preferred under clause (f) of sub-section (1) of section 99, an order for the

winding up of a multi-State co-operative society made under section 86 shall not operate thereafter until
the order is confirmed in appeal:

Provided that the liquidator shall continue to have custody or control of the property, effects and

actionable claims mentioned in sub-section (2) and have authority to take the steps referred to in that
sub-section.

(4) Where an order for the winding up of a multi-State co-operative society is set aside in appeal, the

property, effects and actionable claims of the society shall re-vest in the society.

**90. Powers of liquidator.—(1) Subject to any rules made in this behalf, the whole of the assets of a**

multi-State co-operative society in respect of which an order for winding up has been made, shall vest in
the liquidator appointed under section 89 from the date on which the order takes effect and the liquidator
shall have power to realise such assets by sale or otherwise.

(2) Such liquidator shall also have power, subject to the control of the Central Registrar—


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(a) to institute and defend suits and other legal proceedings on behalf of the multi-State

co-operative society by the name of his office;

(b) to determine from time to time the contribution (including debts due and costs of liquidation)

to be made or remaining to be made by the members or past members or by the estates or nominees,
heirs or legal representatives of the deceased members or by any officers or former officers, to the
assets of the multi-State co-operative society;

(c) to investigate all claims against the multi-State co-operative society and subject to the

provisions of this Act, to decide questions of priority arising between claimants;

(d) to pay claims against the multi-State co-operative society, including interest up to the date of

winding up according to their respective priorities, if any, in full or rateably, as the assets of the
society may permit; and the surplus, if any, remaining after payment of the claims being applied in
payment of interest from the date of such order of winding up at a rate fixed by him but not exceeding
the contract rate in any case;

(e) to determine by what persons and in what proportions the costs of the liquidation are to be

borne;

(f) to determine whether any person is a member, past member or nominee of a deceased

member;

(g) to give such directions in regard to the collection and distribution of the assets of the

multi-State co-operative society as may appear to him to be necessary for winding up the affairs of
that society;

(h) to carry on the business of the multi-State co-operative society so far as may be necessary for

the beneficial winding up of the same;

(i) to make any compromise or arrangement with creditors or persons claiming to be creditors or

having or alleging to have any claim, present or future, whereby the multi-State co-operative society
may be rendered liable;

(j) to make any compromise or arrangement with any person between whom and the multi-State

co-operative society there exists any dispute and to refer any such dispute for decision;

(k) after consulting the members of the multi-State co-operative society, to dispose of the surplus,

if any, remaining after paying the claims against the society, in such manner as may be prescribed;

(l) to compromise all calls or liabilities to calls and debts and liabilities capable of resulting in

debts, and all claims, present or future, certain or contingent, subsisting or alleged to be subsisting
between the multi-State co-operative society and a contributory or other debtor or person
apprehending liability to the multi-State co-operative society and all questions in any way relating to
or affecting the assets or the winding up of the society on such terms as may be agreed and take any
security for the discharge of any such call, liability, debt or claim and give a complete discharge in
respect thereof.

(3) When the affairs of a multi-State co-operative society have been wound up, the liquidator shall

make a report to the Central Registrar and deposit the records of the society in such place as the Central
Registrar may direct.

**91. Disposal of surplus assets.—The surplus assets, as shown in the report of a liquidator of a**

multi-State co-operative society which is wound up,—

(a) may, if the bye-laws of the multi-State co-operative society specify the purpose for which

surplus shall be utilised, be utilised by the Central Registrar for the said purpose, and

(b) if the bye-laws aforesaid do not specify the purpose, be divided by the Central Registrar with

the previous sanction of the Central Government, amongst the members of such multi-State
co-operative society in such manner as may be prescribed.

**92. Priority of contributions assessed by liquidator.—Notwithstanding anything contained in any**

law relating to insolvency, the contribution assessed by a liquidator shall rank next to debts due to the
Central Government or a State Government or a local authority in accordance with the order of priority in
i l di


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**93. Power of Central Registrar to cancel registration of a multi-State co-operative society.—(1)**

The Central Registrar may, after considering the report of the liquidator made to him under
sub-section (3) of section 90, order the registration of the multi-State co-operative society to be cancelled
and on such cancellation, that society shall stand dissolved.

(2) An order passed under sub-section (1) shall be communicated by registered post to the president

or the chairperson as the case may be, of the multi-State co-operative society and to the financial
institutions, if any, of which the society was a member.

CHAPTER XI

EXECUTION OF DECREES, ORDERS AND DECISIONS

**94. Execution of decisions, etc.—Every decision or order made under section 39 or section 40 or**

section 83 or [1][section 84 or] section 99 or section 101 shall, if not carried out,—

(a) on a certificate signed by the Central Registrar or any person authorised by him in writing in

this behalf, be deemed to be a decree of a civil court and shall be executed in the same manner as if it
were a decree of such court and such decree shall be executed by the Central Registrar or any person
authorised by him in writing in this behalf, by attachment and sale or sale without attachment of any
property of the person or a multi-State co-operative society against whom the decision or order has
been made; or

(b) where the decision or order provides for the recovery of money, be executed according to law

for the time being in force for the recovery of arrears of land revenue:

Provided that any application for the recovery of any sum shall be made in such manner—

(i) to the Collector and shall be accompanied by a certificate signed by the Central Registrar

or by any person authorised by him in writing in this behalf;

(ii) within twelve years from the date fixed in the decision or order and if no such date is

fixed, from the date of decision or order, as the case may be; or

(c) be executed by the Central Registrar or any person authorised by him in writing in this behalf,

by attachment and sale or sale without attachment of any property of the person or a multi-State
co-operative society against whom the decision or order has been made.

**95. Execution of orders of liquidators.—Every order made by the liquidator under section 90 shall**

be executed according to the law for the time being in force for the recovery of arrears of land revenue.

**96. Attachment before award.—(1) Where the arbitrator is satisfied that a party to any reference**

made to him under section 84 with intent to defeat or delay the execution of any decision that may be
passed thereon is about to—

(a) dispose of the whole or any part of the property; or

(b) remove the whole or any part of the property from its existing precincts,

the arbitrator may, unless adequate security is furnished, direct conditional attachment of the said property
or such part thereof as he deems necessary.

(2) The attachment under sub-section (1) shall be executed by a civil court having jurisdiction in the

same way as an attachment order passed by itself and shall have the same effect as such order.

**97. Central Registrar or arbitrator or person authorised to be civil court for certain**

**purposes.—The Central Registrar or the arbitrator or any person authorised by him in writing in this**
behalf shall be deemed, when exercising any powers under this Act for the recovery of any amount by the
attachment and sale or by sale without attachment of any property, or when passing any orders on any
application made to him for such recovery or for taking a step-in-aid of such recovery, to be a civil court
for the purposes of article 136 of the Schedule to the Limitation Act, 1963 (36 of 1963).

**98. Recovery of sums due to Government.—(1) All sums due from a multi-State co-operative**

society, or from an officer or member or past member of a multi-State co-operative society, to the Central
Government or a State Government, including any cost awarded to the Central Government or the State


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Government, as the case may be, under any provision of this Act, may, on a certificate issued by the
Central Registrar in this behalf, be recovered in the same manner as arrears of land revenue as first charge
on the assets of such society or officer or member, as the case may be.

(2) Sums due from a multi-State co-operative society to the Central Government or a State

Government and recoverable under sub-section (1) may be recovered firstly from the property of the
society and secondly from the members, past members or the estates of deceased members, subject to the
limit of their liability:

Provided that the liability of past members and the estate of deceased members shall in all cases be

subject to the provisions of section 37.

1[(3) The Central Registrar shall also have the power to recover the following dues by attaching bank

accounts of defaulting multi-State co-operative societies—

(a) the co-operative education fund referred to in clause (b) of sub-section (1) of section 63;

(b) the Co-operative Rehabilitation, Reconstruction and Development Fund established under

section 63A; and

(c) the expenses incurred by the Co-operative Election Authority for conduct of elections.]

**2[98A. Review of decision.— The Central Registrar may, on an application received from any party,**

review his decision under clause (a) or clause (b) or clause (c) of sub-section (1) of section 94:

Provided that no application for review shall be entertained against the recovery certificate issued by

the Central Registrar or by any person authorised by him in writing in this behalf, unless the applicant
deposits with the concerned society, fifty per cent. of the amount of the recoverable dues:

Provided further that no application for review shall be entertained, if made after sixty days of the

date of receipt of the decision or order:

Provided also that the Central Registrar may entertain any such application made after such period, if

the applicant satisfies that he had sufficient cause for not making the application within such period.]

CHAPTER XII

APPEALS AND REVIEW

**99. Appeals.—(1) Subject to the provisions of section 100, an appeal shall lie under this section**

against—

(a) an order made by the Central Registrar under sub-section (3) of section 7 refusing to register a

multi-State co-operative society;

(b) an order made by the Central Registrar under sub-section (9) of section 11 refusing to register

an amendment of the bye-laws of a multi-State co-operative society;

(c) a decision of a multi-State co-operative society refusing or deemed to be refusing under

sub-section (4) of section 25 to admit any person as a member of the society who is otherwise duly
qualified for membership under the bye-laws of the society;

(d) an order made by the Central Registrar under section 81 apportioning the costs of an inquiry

held under section 78 or an inspection made under section 80;

(e) an order made by the Central Registrar under sub-section (2) of section 83;

(f) an order made by the Central Registrar under section 86 directing the winding up of a

multi-State co-operative society;

(g) an order made by the liquidator of a multi-State co-operative society under section 90.

(2) An appeal against any decision or order under sub-section (1) shall be made within sixty days

from the date of such decision or order to the prescribed appellate authority.


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(3) The appellate authority may, if satisfied that the appellant was prevented by sufficient cause from

preferring the appeal within the period of sixty days, admit the appeal within such further period as that
authority may deem fit.

(4) In disposing of an appeal under this section, the appellate authority may, after giving the parties a

reasonable opportunity of making their representation, pass such order thereon as that authority may deem
fit.

(5) The decision or order of the appellate authority on appeal shall be final.

**100. No appeal in certain cases.—Notwithstanding anything contained in this Act, where, with the**

previous sanction in writing of, or on requisition by, the Reserve Bank, a co-operative bank—

(a) is being wound up; or

(b) in respect of which a scheme of amalgamation or reorganisation is given effect to,

no appeal there against shall lie or be permissible, and the sanction or requisition of the Reserve Bank
shall not be liable to be called in question.

**101. Review.—(1) The appellate authority referred to in section 99, may, on the application of any**

party, review its own order in any case and pass in reference thereto such order as it thinks fit:

Provided that no such application shall be entertained unless the appellate authority is satisfied that

there has been a discovery of new and important matter or evidence which after exercise of due diligence
was not within the knowledge of the applicant or could not be produced by him at the time when the order
was made or that there has been some mistake or error apparent on the face of the record or for any other
sufficient reason:

Provided further that no such order shall be made under this sub-section unless notice has been given

to all interested parties and they have been afforded a reasonable opportunity of being heard.

(2) An application for review under sub-section (1) by any party shall be made within thirty days

from the date of communication of the order of the appellate authority sought to be reviewed.

**102. Interlocutory orders.—Where an appeal is made under section 99, the appellate authority may,**

in order to prevent the ends of justice being defeated, make such interlocutory orders, including an order
of stay pending the decision of the appeal as such authority may deem fit.

CHAPTER XIII

SOCIETIES WHICH BECOME MULTI-STATE CO-OPERATIVE SOCIETIES CONSEQUENT ON REORGANISATION

OF STATES

**103. Co-operative societies functioning immediately before reorganisation of States.—(1) Where,**

by virtue of the provisions of Part II of the State Reorganisation Act, 1956 (37 of 1956) or any other
enactment relating to reorganisation of States, any co-operative society which immediately before the
day on which the reorganisation takes place, had its objects confined to one State becomes, as from that
day, a multi-State co-operative society, it shall be deemed to be a multi-State co-operative society
registered under the corresponding provisions of this Act and the bye-laws of such society shall, in so far
as they are not inconsistent with the provisions of this Act, continue to be in force until altered or
rescinded.

1[Provided that where all the successor States take necessary steps to divide or reorganise such

deemed multi-State co-operative society into State co-operative societies in order to confine their objects,
services and the members to respective States within a period of three years, such deemed multi-State cooperative society shall cease to be a multi-State co-operative society:

Provided further that the deemed multi-State co-operative society other than those mentioned in the

first proviso shall submit an application for registration and obtain the certificate of registration from the
Central Registrar.]

(2) If it appears to the Central Registrar or any officer authorised in this behalf by the Central

Government (hereafter in this section referred to as the authorised officer) that it is necessary or expedient
to reconstitute or reorganise any society referred to in sub-section (1), the Central Registrar or the
authorised officer, as the case may be, may, with the previous approval of the Central Government, place


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before a meeting of the general body of that society, held in such manner as may be prescribed, a scheme
for the reconstitution or reorganisation, including proposals regarding—

(a) the formation of new multi-State co-operative societies and the transfer thereto in whole or in

part, of the assets and liabilities of that society; or

(b) the transfer, in whole or in part, of the assets and liabilities of that society to any other

multi-State co-operative society in existence immediately before the date of that meeting of the
general body (hereafter in this section referred to as the existing multi-State co-operative society).

(3) If the scheme is sanctioned by a resolution passed by a majority of the members present at the said

meeting, either without modifications or with modifications to which the Central Registrar or the
authorised officer agrees, he shall certify the scheme and upon such certification, the scheme shall,
notwithstanding anything to the contrary contained in any law, regulation or bye-laws for the time being
in force, be binding on all the societies affected by the scheme, as well as the shareholders and creditors
of all such societies.

(4) If the scheme is not sanctioned under sub-section (3), the Central Registrar or the authorised

officer may refer the scheme to such judge of the appropriate High Court, as may be nominated in this
behalf by the Chief Justice thereof, and the decision of that judge in regard to the scheme shall be final
and shall be binding on all the societies affected by the scheme as well as the shareholders and creditors
of all such societies.

_Explanation.—For the purposes of this sub-section, “appropriate High Court” means the High Court_

within the local limits of whose jurisdiction the principal place of business of the multi-State co-operative
society is situated.

(5) Notwithstanding anything contained in this section, where a scheme under sub-section (2)

includes any proposal regarding the transfer of the assets and liabilities of any multi-State co-operative
society referred to in clause (b) thereof, the scheme shall not be binding on such multi-State co-operative
society or the shareholders and creditors thereof, unless the proposal regarding such transfer is accepted
by that multi-State co-operative society by a resolution passed by a majority of the members present at a
meeting of its general body.

CHAPTER XIV

OFFENCES AND PENALTIES

**104. Offences and penalties.—(1) A multi-State co-operative society or an officer or member**

thereof wilfully making a false return or furnishing false information, [1][or failing to file any return or
information] or any person wilfully or without any reasonable excuse disobeying any summons,
requisition or lawful written order issued under the provisions of this Act, or wilfully not furnishing any
information required from him by a person authorised in this behalf under the provisions of this Act, shall
be punishable with fine which shall not be less than [2][five thousand rupees] and which may extend to
3[one lakh rupees].

(2) Any employer who, without sufficient cause, fails to pay to a multi-State co-operative society the

amount deducted by him under section 60 within a period of fourteen days from the date on which such
deduction is made shall, without prejudice to any action that may be taken against him under any other
law for the time being in force, be punishable with fine which may extend to [4][ten thousand rupees].

(3) Any officer or custodian who wilfully fails to hand over custody of books, accounts, documents,

records, cash, security and other property belonging to a multi-State co-operative society of which he is
an officer or custodian, to a person entitled under section 54, or section 70, or section 78, or section 79, or
section 89 [5][or to a person required to file return under section 120] shall be punishable with fine which
may extend to [6][five thousand rupees] and in the case of a continuing breach, with a further fine which

1. Ins. by Act 11 of 2023, s. 37 (w.e.f. 3-8-2023).
2. Subs. by s. 37, ibid., for “two thousand rupees” (w.e.f. 3-8-2023).
3. Subs. by s. 37, ibid., for “ten thousand rupees” (w.e.f. 3-8-2023).
4. Subs. by s. 37, ibid., for “five thousand rupees” (w.e.f. 3-8-2023).


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may extend to [1][ten thousand rupees] for every day during which the breach is continued after conviction
for the first such breach.

(4) Whoever, before, during or after the election of delegates under the proviso to sub-section (1) of

section 38 or election of members of the board,—

(a) fraudulently defaces or fraudulently destroys any nomination paper; or

(b) fraudulently defaces, destroys or removes any list, notice or other document affixed by or

under the authority of a returning officer; or

(c) fraudulently defaces or fraudulently destroys any ballot paper or the official mark on any

ballot paper or any declaration of identity; or

(d) without due authority supplies any ballot paper to any person or receives any ballot paper

from any person or is in possession of any ballot paper; or

(e) fraudulently puts into any ballot box anything other than the ballot paper which he is

authorised by law to put in; or

(f) without due authority destroys, takes, opens or otherwise interferes, with any ballot box or

ballot papers then in use for the purposes of the election; or

(g) fraudulently or without due authority, as the case may be, attempts to do any of the foregoing

acts or wilfully aids or abets the doing of any such acts;

(h) offers any gift or promises to offer any gratification to any person [2][or receives such gift,

promise or gratification] with the object, directly or indirectly, of including—

(i) a person to stand or not to stand as, or to withdraw or not to withdraw from, being a

candidate at an election; or

(ii) a member to vote or refrain from voting at an election, or as a reward to a person for

having so stood or not stood or for having withdrawn or not having withdrawn his candidature; or

(iii) a member for having voted or refrained from voting,

shall be punishable with imprisonment for a term which may extend to six months or with fine or with
both [2][and shall also be debarred from contesting elections for a period of three years.]

2[(5) Where a multi-State co-operative society,—

(a) which is required to provide an explanation or make a statement during the course of

inspection, inquiry or investigation, destroys, mutilates or falsifies, or conceals or tampers or
unauthorisedly removes, or causes the destruction, mutilation or falsification or concealment or
tampering or unauthorised removal of, any document relating to the property, assets or affairs of the
society or makes or causes to make a false entry in any document concerning the society;

(b) makes any investment in contravention of the provision of section 64 or the bye-laws made

under this Act;

(c) causes unlawful loss to the assets and property of the society; or

(d) causes unlawful loss to the depositor,

the board of directors or the responsible officers of the multi-State co-operative society shall be
punishable with imprisonment for a term which shall not be less than one month but which may extend to
one year or with fine which shall not be less than five thousand rupees but may extend to one lakh rupees
or with both.

(6) Where the board of directors or officers of the multi-State co-operative society receive any

unlawful gains while transacting matters related to such society or utilise any assets of the society for
personal unlawful gains, such directors or officers concerned shall be punishable with imprisonment for a
term which shall not be less than one month but which may extend to one year or with fine which shall


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not be less than five thousand rupees but may extend to one lakh rupees or with both and the proceeds of
such unlawful gains shall be recovered from them and deposited in such manner as may be prescribed.]

**105. Cognizance of offences.—(1) No court inferior to that of a Metropolitan Magistrate or a Judicial**

Magistrate of the first class shall try any offence under this Act.

(2) No prosecution for offences under section 104 shall be instituted except on a complaint filed in

writing by a member of a multi-State co-operative society or by the Central Registrar in the competent
court.

1[105A. Provisions of this Act not in derogation of any other law.— The provisions of this Act

shall be in addition to, and not in derogation of, any other law for the time being in force.]

CHAPTER XV

MISCELLANEOUS

2[106. Appointment of Co-operative Information Officer.— (1) Every multi-State co-operative

society shall appoint a Co-operative Information Officer to provide the information relating to affairs and
management of the society to the members of the society and such information shall be confined to the
information falling under the disclosure norms specified by the society in its bye-laws.

(2) Any member of multi-State co-operative society shall make an application, accompanying such

fee as may be prescribed, to get information specified in sub-section (1).

(3) The Co-operative Information Officer shall, within thirty days from the date of receipt of

application, either provide the information or reject the application specifying the reason to do so.

(4) Any member of the multi-State co-operative society whose application has been rejected may

prefer an appeal to the Co-operative Ombudsman within a period of one month from the date of such
rejection and his decision shall be final and binding.

**106A. Copy of rules and bye-laws, etc., for inspection.—Every Chief Executive of multi-State**

co-operative society shall keep a copy of the rules and its bye-laws and also a list of its members, open to
inspection free of charge at all reasonable times, at the registered address of the multi-State co-operative
society.]

**107. Place of keeping and inspection of, registers and returns.—(1) The register of members**

commencing from the date of the registration of multi-State co-operative society, the index of members,
the register of debenture holders, and copies of all annual returns prepared together with the copies of
certificates and documents, shall be kept at the registered office of the multi-State co-operative society.

(2) The registers, indexes, returns and copies of certificates and other documents referred to in

sub-section (1) shall be open during business hours (subject to such reasonable restrictions, as the
multi-State co-operative society may impose, so that not less than two hours in each day are allowed for
inspection) to the inspection—

(a) of any member or debenture holder, without fee; and

(b) of any other person, on payment of such sum as may be prescribed for each inspection.

**108. Inspection of books of account, etc., of multi-State co-operative society.—(1) The books of**

account and other books and papers of every multi-State co-operative society shall be open to inspection
during business hours—

(i) by the Central Registrar [3][or any person authorised by him in this behalf, not below the rank of

Assistant Commissioner or equivalent], or

(ii) by such officer of the Government as may be authorised by the Central Government in this

behalf:

Provided that such inspection may be made without giving any previous notice to that society or

any officer thereof;

1. Ins. by Act 11 of 2023, s. 38 (w.e.f. 3-8-2023).


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(iii) by the members of the multi-State co-operative society.

(2) It shall be the duty of every director, other officer or employee of the multi-State co-operative

society to produce to the person making inspection under sub-section (1), all such books of account and
other books and papers of the multi-State co-operative society in his custody or control and to furnish him
with any statement, information or explanation relating to the affairs of such society as the said person
may require of him within such time and at such place as he may specify.

(3) It shall also be the duty of every director, other officer or employee of the multi-State co-operative

society to give to the person making inspection under this section all assistance in connection with the
inspection which the multi-State co-operative society may be reasonably expected to give.

(4) The person making the inspection under this section may, during the course of inspection,—

(i) make or cause to be made copies of books of account and other books and papers, or

(ii) place or cause to be placed any marks or identification thereon in token of the inspection

having been made.

(5) Notwithstanding anything contained in any other law for the time being in force or any contract to

the contrary, the Central Registrar or an officer authorised under clause (ii) of sub-section (1), making an
inspection under this section shall have the same powers as are vested in a civil court under the Code of
Civil Procedure, 1908 (5 of 1908) while trying a suit, in respect of the following matters, namely:—

(i) the discovery and production of books of account and other documents, at such place and such

time as may be specified by such person;

(ii) summoning and enforcing the attendance of persons and examining them on oath;

(iii) inspection of any books, registers and other documents of the multi-State co-operative

society at any place.

(6) Where an inspection of the books of account and other books and papers of the multi-State

co-operative society has been made under this section, the Central Registrar or an officer authorised under
clause (ii) of sub-section (1), making the inspection shall make a report to the Central Government.

**109 Annual accounts and balance-sheet.—At every annual general meeting of a multi-State**

co-operative society, the board shall lay before the multi-State co-operative society—

(a) a balance-sheet as at the end of every [1][financial year]; and

(b) a profit and loss account for that year.

**110. Minutes of proceedings of general meetings and of board and other meetings.—(1) Every**

multi-State co-operative society shall cause minutes of all proceedings of every general meeting and of all
proceedings of every meeting of its board or of every committee of the board, to be kept by making
within thirty days of the conclusion of every such meeting concerned, entries thereof in books kept for
that purpose with their pages consecutively numbered.

(2) Each page of every such book shall be initialed or signed and the last page of the record of

proceedings of each meeting in such books shall be dated and signed—

(a) in the case of minutes of proceedings of a meeting of the board or of a committee thereof, by

the chairperson of the said meeting or the chairperson of the next succeeding meeting;

(b) in the case of minutes of proceedings of a general meeting, by the chairperson of the same

meeting within the aforesaid period of thirty days or in the event of the death or inability of that
chairperson within that period, by a member of the board duly authorised by the board for the
purpose.

(3) In no case the minutes of proceedings of a meeting shall be attached to any such books as

aforesaid by pasting or otherwise.

(4) The minutes of each meeting shall contain a fair and correct summary of the proceedings thereat.


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(5) All appointments of officers made at any of the meetings aforesaid shall be included in the

minutes of the meeting.

(6) In the case of a meeting of the board or of a committee of the board, the minutes shall also

contain—

(a) the names of the members of the board present at the meeting; and

(b) in the case of each resolution passed at the meeting, the names of the members of the board, if

any, dissenting from, or not concurring in, the resolution.

(7) Nothing contained in sub-sections (1) to (6) shall be deemed to require the inclusion in any such

minutes of any matter which, in the opinion of the chairperson of the meeting—

(a) is, or could reasonably be regarded as, defamatory of any person;

(b) is irrelevant or immaterial to the proceedings; or

(c) is detrimental to the interests of the multi-State co-operative society.

_Explanation.—The chairperson shall exercise an absolute discretion in regard to the inclusion or_

non-inclusion of any matter in the minutes on the grounds specified in this sub-section.

**111. Minutes to be evidence.—Minutes of meetings kept in accordance with the provisions of**

section 110 shall be evidence of the proceedings recorded therein.

**112. Presumptions to be drawn where minutes duly drawn and signed.—Where minutes of the**

proceedings of any general meeting of the multi-State co-operative society or of any meeting of its board
or a committee of the board have been kept in accordance with the provisions of section 110, then, until
the contrary is proved, the meeting shall be deemed to have been duly called and held, and all proceedings
thereat to have duly taken place, and in particular, all appointments of directors or liquidators made at the
meeting shall be deemed to be valid.

**113. Inspection of minutes book of general meetings.—The books containing the minutes of the**

proceedings of any general meeting of a multi-State co-operative society shall—

(a) be kept at the registered office of that society, and

(b) be open, during business hours, to the inspection of any member of that society.

**114. Liquidator to be public servant.—Any person appointed as liquidator under the provisions of**

this Act shall be deemed to be a public servant within the meaning of section 21 of the Indian Penal
Code (45 of 1860).

**115. Notice necessary in suits.—No suit shall be instituted against a multi-State co-operative society**

or any of its officers in respect of any act touching the constitution, management or the business of the
society until the expiration of ninety days next after notice in writing has been delivered to the Central
Registrar or left at his office, stating the cause of action, the name, description and place of residence of
the plaintiff and the relief which he claims, and the plaint shall contain a statement that such notice has
been so delivered or left.

**116.** **[1][Power to amend Schedules.]—(1) If the Central Government is satisfied that any**

multi-State co-operative society should be designated as a national co-operative society or any national
co-operative society specified in the Second Schedule should be omitted from the said Schedule, it may,
by notification, amend the said Schedule so at to include therein such multi-State co-operative society or
exclude therefrom such national co-operative society, and thereupon the said Schedule shall be deemed to
have been amended accordingly.

2[(1A) If the Central Government is satisfied that it is necessary or expedient so to do, it may, by

notification, amend the First Schedule and the Third Schedule and thereupon such Schedules shall be
deemed to have been amended accordingly:

Provided that in case of the First Schedule, such notification shall be used only for adding to the

co-operative principles in the list.]


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(2) A copy of every notification under [1][sub-sections (1) and (1A)] shall be laid before each House of

Parliament as soon as may be after it is made.

**117. Bar of jurisdiction of courts.—(1) Save as otherwise provided in this Act, no court shall have**

jurisdiction in respect of—

(a) the registration of a multi-State co-operative society or its bye-laws or of an amendment of the

bye-laws;

(b) any matter concerning the winding up and the dissolution of a multi-State co-operative

society.

(2) While a multi-State co-operative society is being wound up, no suit or other legal proceedings

relating to the business of such society shall be proceeded with or instituted against the liquidator or
against the society or any member thereof, except by leave of the Central Registrar and subject to such
terms and conditions as he may impose.

(3) Save as otherwise provided in this Act, no decision or order made under this Act shall be

questioned in any court.

**118. Indemnity.—No suit, prosecution or other legal proceedings shall lie against the Central**

Registrar or, any person subordinate to him or acting on his authority or against any other person, in
respect of anything in good faith done or purporting to have been done under this Act.

**119. Opening of branches.—Notwithstanding anything contained to the contrary in any law relating**

to co-operative societies in force in a State, a multi-State co-operative society, not being a co-operative
bank, may open branches or places of business in any place in India.

**120. Filing of returns.—Every year within six months of the closure of the accounting year every**

multi-State co-operative society shall file the following returns with the Central Registrar, namely:—

2[(a) annual report of the activities including details of board decisions which were not

unanimous;]

(b) audited statements of accounts;

(c) plan for surplus disposal as approved by the general body;

(d) list of amendments to the bye-laws of the multi-State co-operative society;

(e) declaration regarding date of holding of general body meeting and conduct of elections where

due;

3[(f) disclosure regarding employees who are relatives of Members of board;

(g) declaration of any related party transactions by the board of directors; and

(h) any other information required by the Central Registrar in pursuance of any of the provisions

of this Act or the rules made thereunder.]

4[120A. Filing of applications, documents, inspections, etc., in electronic form.—(1)

Notwithstanding anything to the contrary contained in this Act, and without prejudice to the provisions of
the Information Technology Act, 2000 (21 of 2000), the Central Government may, from such date as may
be notified, require that—

(a) such applications, returns, reports, statement of accounts, or any other particulars or document

as may be required to be filed or delivered under this Act or the rules made thereunder, shall be filed
in the electronic form and authenticated;

(b) such document, notice, any communication or intimation, as may be required to be served or

delivered under this Act, shall be served or delivered in the electronic form and authenticated;

(c) such applications, returns, reports, statement of accounts, registers, bye-laws or any other

particulars or documents and returns filed under this Act or the rules made thereunder shall be

1. Subs. by Act 11 of 2023, s. 42, for “sub-section (1)” (w.e.f. 3-8-2023).
2. Subs. by s. 43, ibid., for clause (a) (w.e.f. 3-8-2023).


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maintained by the Central Registrar in the electronic form and registered or authenticated, as the case
may be;

(c) such applications, returns, reports, statement of accounts, registers, bye-laws or any other

particulars or documents and returns filed under this Act or the rules made thereunder shall be
maintained by the Central Registrar in the electronic form and registered or authenticated, as the case
may be;

(e) such fees, charges or other sums payable under this Act or the rules made thereunder shall be

paid through the electronic form,

in such manner as may be prescribed.

(2) The Central Registrar shall—

(a) issue certificate of registration;

(b) register the amendment of bye-laws;

(c) register change of registered office;

(d) register any document;

(e) issue any certificate;

(f) issue notice; and

(g) receive such communication as may be required to be registered or issued or recorded or

received, as the case may be,

under this Act or the rules made thereunder or perform duties or discharge functions or exercise powers
under this Act or the rules made thereunder or do any act which is by this Act directed to be performed or
discharged or exercised or done by the Central Registrar, in the electronic form in such manner as may be
prescribed.

**120B.** **Application of Banking Regulation Act, 1949.—The provisions of this Act shall apply to a**

multi-State co-operative society in respect of matters relating to incorporation, regulation and winding up:

Provided that in case of a multi-State co-operative society carrying on the business of banking, the

provisions of the Banking Regulation Act, 1949 (10 of 1949) shall also apply.]

**121. Certain Acts not to apply.—(1) The provisions of [1][the Companies Act, 2013 (18 of 2013)] and**

1[the Competition Act, 2002 (12 of 2003)] shall not apply to the multi-State co-operative societies.

(2) The multi-State Co-operative societies registered or deemed to be registered under the provisions

of this Act shall not indulge in monopolistic and restrictive trade practices as defined in the Monopolies
and Restrictive Trade Practices Act, 1969 (54 of 1969).

**122. Central Government’s power to give directions to specified multi-State co-operative**

**societies in public interest.—If the Central Government is satisfied that in the public interest or for the**
purposes of securing proper implementation of co-operative production and other developmental
programmes approved or undertaken by the Central Government or to secure proper management of the
business of the specified multi-State co-operative societies generally or for preventing the affairs of such
society being conducted in a manner detrimental to the interests of the members, any depositors or
creditors thereof, it is necessary to issue directions to any class of specified multi-State co-operative
societies generally or to any specified multi-State co-operative society or societies in particular, the
Central Government may issue directions to it or to them, from time to time, and all such specified
multi-State co-operative society or the societies concerned, as the case may be, shall be bound to comply
with such directions.

**123. Supersession of board of specified multi-State co-operative society.—(1) If in the opinion of**

the Central Government, the board of any specified multi-State co-operative society is persistently
making default or is negligent in the performance of the duties imposed on it by this Act or the rules or


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the bye-laws [1][or has committed any act including fraud, misappropriation and the like which is
prejudicial to the interests of the society or its members, or has omitted or failed to comply with any
directions given to it under section 122 in public interest or that there is a stalemate in the constitution or
functions of the board or the Co-operative Election Authority has failed to conduct elections in
accordance with the provisions of this Act, the Central Government may, after giving the board an
opportunity to state its objections, if any, and considering the objections, if received, by order in writing,
supersede or suspend the board and appoint one or more administrators, who need not be members of the
society, to manage the affairs of the society for such period not exceeding six months, as may be specified
in the order:]

2[Provided that while taking a decision for supersession or suspension on grounds of failure to

conduct election, such action shall only be taken if the Board had not given requisition to hold election to
the Co-operative Election Authority within the time limit or not extended necessary assistance as per the
provisions of section 45.]

(2) The Central Government may fix such remuneration for the administrators, as it may think fit and

the remuneration shall be paid out of the funds of the specified multi-State co-operative society.

(3) The administrator shall, subject to the control of the Central Government and to such instructions

as it may from time to time give, have power to exercise all or any of the functions of the board or of any
officer of the specified multi-State co-operative society and take all such actions as may be required in the
interests of the society.

(4) Save as otherwise provided in sub-section (5), the administrator shall, before the expiry of his

term of office, arrange for the constitution of a new board in accordance with the bye-laws of the
specified multi-State co-operative society.

(5) If, at any time during the period the administrator is in office, the Central Government considers it

necessary or expedient so to do, it may, by order in writing giving reasons therefore, direct the
administrator to arrange for the constitution of a new board for such specified multi-State co-operative
society in accordance with the bye-laws of such society and immediately on the constitution of such
board, the administrator shall hand over the management of such society to such newly constituted board
and cease to function.

(6) Where a specified multi-State co-operative society is indebted to any financial institution, the

Central Government shall, before taking any action, under sub-section (1) in respect of that society,
consult the financial institution.

3[Explanation.—For the purposes of section 122 and this section, the expression “specified multi
State co-operative society” means any multi-State co-operative society where there is Government
shareholding or loan or financial assistance or any guarantee by the Government.]

**124. Power to make rules.—(1) The Central Government may, by notification, make rules to carry**

out the provisions of this Act.

(2) In particular, and without prejudice to the generality of the foregoing power, such rules may

provide for all or any of the following matters, namely:—

(a) the form to be used, the particulars to be given and the conditions to be complied with in the

making of applications under section 6 for the registration of a multi-State co-operative society and
the procedure in the matter of such applications;

4[(aa) the guidelines under sub-section (2) of section 7;]

(b) the matters in respect of which a multi-State co-operative society may make bye-laws under

sub-section (2) of section10;

(c) the manner in which the order of refusal to register any amendment of the bye-laws shall be

communicated under sub-section (9) of section 11;

1. Subs. by Act 11 of 2023, s. 46, for the portion beginning with “or has committed any act” and ending with “the aggregate

period does not exceed one year” (w.e.f. 3-8-2023).

2. Subs. by s. 46, ibid., for proviso (w.e.f. 3-8-2023).
3. Subs. by s. 46, ibid., for the Explanation (w.e.f. 3-8-2023).
4 I b 47 ibid ( f 3 8 2023)


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(d) the manner in which a multi-State co-operative society shall have a principal place of business

and registered address under section 14;

(e) the procedure and conditions for change in the extent of the liability of a multi-State

co-operative society under section 16;

(f) the manner in which order of refusal to register an amendment of bye-laws shall be

communicated under sub-section (4) of section 22;

(g) the classification of federal co-operative and other terms and conditions applicable to in under

sub-section (3) of section 23;

(h) the restriction on holding the share capital of the society other than a member referred to in

section 33;

(i) the constitution and powers of smaller body representing the general body under the proviso to

sub-section (1) of section38;

(j) the period within which annual general meeting be called and the procedure at such meetings

and the powers to be exercised by such meeting under section 39;

1[(ja) the manner in which the board of a multi-State co-operative society shall provide

information, documents, personnel, funds or expenses or any other assistance as sought by the
Co-operative Election Authority for conducting elections under clause (a) of sub-section (2) of
section 43;]

2[(k) the composition of the Selection Committee for appointment of Chairperson,

Vice-Chairperson and Members of the Co-operative Election Authority under sub-section (1) of
section 45

(ka) the qualification and experience for appointment of Member of the Authority under

clause (iii) of sub-section (3) of section 45;

(kb) the salaries and allowances payable to, and other terms and conditions of service of the

Chairperson, Vice-Chairperson and Members of the Authority under sub-section (5) of section 45;

(kc) the other powers and functions of Chairperson under section 45A;

(kd) the procedure of inquiry under sub-section (2) of section 45B;

(ke) time, places and the procedure to be observed by the Authority in regard to transaction of

business at its meetings under sub-section (1) of section 45H;

(kf ) other functions of the Authority under clause (iii) of section 45-I;

(kg) the manner of election of members of board by secret ballot under sub-section (3) of

section 45J;

(kh) the manner of bearing the expenses for holding elections by the Authority under

sub-section (6) of section 45J;

(ki) the manner of discharge of functions by the Returning Officers and observers under

sub-section (1) and clause (a) of sub-section (3) of section 45K;

(kj) other functions of the observers under clause (a) of sub-section (3) of section 45K;]

(l) the nomination of members under the second proviso to sub-section (1) of section 48;

(m) the additional measures and acts which may be taken or, as the case may be, done by the

board under section 49;

3[(ma) the procedure for recruitment of employees under proviso to clause (e) of sub-section (2)

of section 49;]

(n) the salary and allowances payable to and other terms and conditions of the Chief Executive

under sub-section (3) of section 51;

1. Ins. by Act 11 of 2023, s. 47 (w.e.f. 3-8-2023).


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1*     -     -     -     
(p) the persons by whom and the form in which copies of entries in books of multi-State

co-operative societies may be certified under section 58 and the charges to be levied for the supply of
such copies;

(q) providing aid to multi-State co-operative societies on certain terms and conditions under

clause (g) of section 61;

2[(qa) the manner of maintenance of fund under clause (b) of sub-section (1) of section 63;]

(r) the conditions under which profits may be distributed to the members of a multi-State

co-operative society and the maximum rate of dividend which may be paid by the multi-State
co-operative societies under section 63;

(s) establishment of contributory provident fund under sub-section (1) of section 69;

2[(sa) the manner of appointment of Co-operative Ombudsman and submission of complaints to

such Ombudsman under sub-section (1) of section 85A;

(sb) the manner of filing an appeal by society against directions of Ombudsman under

sub-section (3) of section 85A;

(sc) other matters under clause (d) of sub-section (5) of section 85A;]

(t) the manner of disposing of the surplus under clause (k) of sub-section (2) of section 90;

(u) the manner in which surplus assets be divided by the Central Registrar with the previous

sanction of the Central Government under clause (b) of section 91;

(v) the appellate authority to be specified under sub-section (2) of section 99;

(w) the procedure under section 103 for reconstitution and reorganisation of societies which

became the multi-State co-operative societies consequent on reorganisation of States;

2[(wa) the manner of recovery and deposit of proceeds of unlawful gains under sub-section (6) of

section 104;

(wb) the manner to make an application with such fee for the purpose of getting information

under sub-section (2) of section 106;]

(x) the inspection of records of the society on payment of fees under clause (b) of sub-section (2)

of section 107;

2[(xa) the manner of powers being exercised by the Central Government in respect of matters

relating to filing of applications, documents, inspections and the like in electronic form under
sub-section (1) of section 120A;

(xb) the manner of discharging the functions or exercising powers with respect to matters

mentioned therein by the Central Registrar in electronic form under sub-section (2) of section 120A;]

(y) any other matter which is required to be, or may be, prescribed.

3[(3) Every rule made under this section and any notification issued under section 116 shall be laid, as

soon as may be after it is made, before each House of Parliament, while it is in session, for a total period
of thirty days which may be comprised in one session or in two or more successive sessions, and if,
before the expiry of the session immediately following the session or the successive sessions aforesaid,
both Houses agree that the rules and any notification issued under section 116 should not be made, the
rule and any notification issued under section 116 shall thereafter have effect only in such modified form
or be of no effect, as the case may be; so, however, that any such modification or annulment shall be
without prejudice to the validity of anything previously done under that rule and any notification issued
under section 116.]

1. Clause (o) omitted by Act 11 of 2023, s. 47 (w.e.f. 3-8-2023).


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**125. Power to remove difficulties.—(1) If any difficulty arises in giving effect to the provisions of**

this Act, the Central Government may, by order published in the Official Gazette, make such provisions
not inconsistent with the provisions of this Act as may appear to be necessary for removing the difficulty:

Provided that no order shall be made under this section after the expiry of two years from the

commencement of this Act.

(2) Every order made under this section shall be laid, as soon as may be after it is made, before each

House of Parliament.

1[(1A) Notwithstanding anything contained in sub-section (1), if any difficulty arises in giving effect

to the provisions of this Act as amended by the Multi-State Co-operative Societies (Amendment)
Act, 2023, the Central Government may, by order published in the Official Gazette, make such provisions
not inconsistent with the provisions of this Act as may appear to it to be necessary for removing the
difficulty:

Provided that no such order shall be made under this section after the expiry of a period of two years

from the date of commencement of the Multi-State Co-operative Societies (Amendment) Act, 2023.]

**126. Repeal and saving.—(1) The Multi-State Co-operative Societies Act, 1984 (51 of 1984) is**

hereby repealed.

(2) Without prejudice to the provisions contained in the General Clauses Act, 1897 (10 of 1897) with

respect to repeals, any notification, rule, order, requirement, registration, certificate, notice, decision,
direction, approval, authorisation, consent, application, request or thing made, issued given or done under
the Multi-State Co-operative Societies Act, 1984 (51 of 1984) shall, if in force at the commencement of
this Act, continue to be in force and have effect as if made, issued given or done under the corresponding
provisions of this Act.

(3) Every multi-State co-operative society existing, immediately before the commencement of this

Act which has been registered under the Co-operative Societies Act, 1912 (2 of 1912) or under any other
Act relating to co-operative societies in force, in any State or in pursuance of the provisions of the
Multi-unit Co-operative Societies Act, 1942 (6 of 1942) or the Multi-State Co-operative Societies
Act, 1984 (51 of 1984), shall be deemed to be registered under the corresponding provisions of this Act,
and the bye-laws of such society shall, in so far as they are not inconsistent with the provisions of this
Act, or the rules, continue to be in force until altered or rescinded.

(4) All appointments, rules and orders made, all notifications and notices issued and all suits and

other proceedings instituted under any of the Acts referred to in sub-section (1) shall, in so far as they are
not inconsistent with the provisions of this Act, be deemed to have been respectively made, issued and
instituted under this Act, save that an order made cancelling the registration of a multi-State co-operative
society shall be deemed, unless the society has already been finally liquidated, to be an order made under
section 86 for its being wound up.

(5) The provisions of this Act shall apply to—

(a) any application for registration of a multi-State co-operative society;

(b) any application for registration of amendment of bye-laws of a multi-State co-operative

society,

pending at the commencement of this Act and to the proceedings consequent thereon and to any
registration granted in pursuance thereof.

(6) Save as otherwise provided in this Act, any legal proceeding pending in any court or before the

Central Registrar or any other authority at the commencement of this Act shall be continued to be in that
court or before the Central Registrar or that authority as if this Act had not been passed.


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THE FIRST SCHEDULE

[See section 3(g)]

CO-OPERATIVE PRINCIPLES

1. Voluntary and Open Membership.—Co-operatives are voluntary organisations, open to all

persons capable of using their services and willing to accept the responsibilities of membership, without
discrimination on bases of gender, social inequality, racial, political ideologies or religious consideration.

2. Democratic Member Control.—Co-operatives are democratic organisations controlled by their

members, who actively participate in setting their policies and decision making. Elected representatives of
these co-operatives are responsible and accountable to their members.

3. Member’s Economic Participation.—Members contribute equitably and control the capital of

their Co-operative democratically. At least a part of the surplus arising out of the economic results would
be the common property of the co-operatives. The remaining surplus could be utilised benefiting the
members in proportion to their share in the Co-operative.

4. **Autonomy and Independence.—Co-operatives are autonomous, self-help organisations**

controlled by their members. If co-operatives enter into agreement with other organisations including
Government or raise capital from external sources, they do so on terms that ensure their democratic
control by members and maintenance of Co-operative autonomy.

5. Education, Training and Information.—Co-operatives provide education and training to their

members, elected representatives and employees so that they can contribute effectively to the
development of their Co-operatives. They also make the general public, particularly young people and
leaders aware of the nature and benefits of co-operation.

6. Co-operation among Co-operatives.—Co-operatives serve their members most effectively and

strengthen the co-operative movement, by working together through available local, regional, national
and international structures.

7. Concern for Community.—While focusing on the needs of their members, co-operatives work for

the sustainable development of communities through policies accepted by their members.


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THE SECOND SCHEDULE

[See sections 3(r) and 116]

LIST OF NATIONAL CO-OPERATIVE SOCIETIES

1.  National Co-operative Land Development Banks Federation Limited, Mumbai.

2. National Federation of State Co-operative Banks Limited, Mumbai.

3. National Co-operative Union of India Limited, New Delhi.

4. National Agricultural Co-operative Marketing Federation of India Limited, New Delhi.

5. National Co-operative Consumer’s Federation of India Limited, New Delhi.

6. National Federation of Co-operative Sugar Factories Limited, New Delhi.

1[7. ****]

8. National Co-operative Housing Federation Limited, New Delhi.

9. Indian Farmer’s Fertiliser Co-operative Limited, New Delhi.

10. All India Federation of Co-operative Spinning Mills Limited, Mumbai.

1[11. ****]

12. National Co-operative Dairy Federation of India Limited, Anand.

1[13.****]

1[14. ****]

15. All India Handloom Fabrics Marketing Co-operative Society Limited, New Delhi.

16. National Federation of Urban Co-operative Banks and Credit Societies Limited, New Delhi.

17. Krishak Bharati Co-operative Limited, New Delhi.

18. National Federation of Fishermen’s Co-operative Limited, New Delhi.

19. National Federation of Labour Co-operative Limited, New Delhi.

1[20. ****]

21. Tribal Co-operative Marketing Development Federation of India Limited, New Delhi.

2[22. National Cooperative Organics Limited, Anand, Gujarat.

23. Bharatiya Beej Sahakari Samiti Limited, New Delhi.

24. National Cooperative Exports Limited, New Delhi.]

1. The Serial numbers 7, 11, 13, 14 and 20 and the entries relating thereto, omitted vide notification S.O. No. 1396(E), dated


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1[THE THIRD SCHEDULE

[See clause (h) of sub-section (1) of section 43]

|Sl. No.|Name of the Act|Act Number|
|---|---|---|
|1.|The Indian Stamp Act, 1899|2 of 1899.|
|2.|The Reserve Bank of India Act, 1934|2 of 1934.|
|3.|The Central Excise Act, 1944|1 of 1944.|
|4.|The Industries (Development and Regulation) Act, 1951|65 of 1951.|
|5.|The Prevention of Food Adulteration Act, 1954|37 of 1954.|
|6.|The Essential Commodities Act, 1955|10 of 1955.|
|7.|The Securities Contracts (Regulation) Act, 1956|42 of 1956.|
|8.|The Wealth-Tax Act,1957|27 of 1957.|
|9.|The Customs Act, 1962|52 of 1962.|
|10.|The Prize Chits and Money Circulation Schemes (Banning) Act, 1978|43 of 1978.|
|11.|The Sick Industrial Companies (Special Provisions) Act, 1985|1 of 1986.|
|12.|The Securities and Exchange Board of India Act, 1992|15 of 1992.|
|13.|The Foreign Trade (Development and Regulation) Act, 1992|22 of 1992.|
|14.|The Foreign Exchange Management Act, 1999|42 of 1999|
|15.|The Competition Act, 2002|12 of 2003.|
|16.|The Prevention of Money-Laundering Act, 2002|15 of 2003|
|17.|The Companies Act, 2013|18 of 2013.]|


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