THE KERALA CO-OPERATIVE SOCIETIES ACT, 1969 (Act 21 of 1969) as on 01.01.2014 Part 1

PLEASE NOTE THAT THIS ACT IS NOT CORRECTLY PROOFREAD WITH ORIGINALS. SO KINDLY MAKE SURE THAT THEY MATCH WITH THE ORIGINALS. DEFECTS IF ANY NOTICED MAY KINDLY BE BROUGHT INTO NOTICE BY WAY OF COMMENT SO THAT WE MAY CORRECT THEM. SUFFICIENT FURTHER NOTES SHALL BE INSERTED IN DUE COURSE.

THE KERALA CO-OPERATIVE SOCIETIES ACT, 1969 (Act 21 of 1969)

(An Act to consolidate, amend and unify the laws relating to Co-operative Societies in the State of Kerala)

[^10. Preamble :- WHEREAS with a view to provide for the orderly development of the Co-operative sector in the State, [^14. it is essential to organise the Co-operative Societies in accordance with Co-operative principles as self governing] democratic institutions, to achieve objects of equity, social justice and economic development, as envisaged in the directive principles of State Policy of the Constitution of India [^14. and to promote scientific and technological development, health care, market intervention and management excellence in the Cooperative Sector,] it is expedient to consolidate, amend and unify the law relating to co-operative societies in the State.;]]

BE it enacted in the Nineteenth Year of the republic of India as follows:-

CHAPTER I

PRELIMINARY

1. Short title, extent and commencement

(1) This Act may be called the Kerala Co-operative Societies Act, 1969.

(1) It extends to the whole of the State of Kerala.

(2) It shall come into force on such date as the Government may by notification in the Gazette, appoint: *

Provided that 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. Definitions

In this Act, unless the context otherwise requires—

(a)    “apex society” means a society having the whole of the State as its area of operation and having as its members only other societies with similar objects and declared as such by the Registrar;

[^16.(aa) “assisted society” means a co-operative society which has received the Government assistance in the form of share capital, loan, grant or any other financial assistance or any guarantee by the Government or from Boards constituted by the Government for repayment of loan, interest or deposits;

(ab) “auditing of accounts of co-operative societies” means a close examination of financial transactions, overdue debts, if any, maintenance of books of accounts, documents and other records of a business and includes an inquiry into the affairs of the society and subsidiary institutions in order to ascertain the correctness of accounts and the extent to which its activities were useful in promoting the economic welfare of the members in accordance with co-operative principles;]

(b)    “bye-laws” means the registered bye-laws of a co-operative society for the time being in force;

(c)    “circle co-operative union” means a circle co-operative union constituted under section 88;

[^4. (d) “central society” means a society having jurisdiction over one or more Revenue Districts but not the whole of the State as its area of operation; and having as its members only other societies and declared as such by the Registrar or the Government;”]

[^16. (da) “chief executive” means any employee of a co-operative society by whatever designation called and includes an officer of the State Government or an employee of any other institution or co-operative society, who discharges the functions of a chief executive under the Act, the Rules or the bye-laws;]

(e) “committee” means the governing body of a co-operative society by whatever name called, to which the management of the affairs of the society is entrusted;

[^10.(ea)] [^9.“ Co-operative Arbitration Court” means a court constituted under Sec.70A.]

[^10.(eb) “Consortium Lending Scheme” means the consortium Lending Scheme framed under section 57C;

(ec) “Co-operative Development and Welfare Fund” means the Cooperative Development Welfare Fund established under section 57A;

[^14. (ecc) `Cooperative Ombudsman' means the person or persons appointed under sub-section (2) of section 69A]

[^16. (eccc) “co-operative principles” means the co-operative principles listed in Schedule II appended to this Act;]

(ed) “Co-operative Service Examination Board” means the Cooperative Service Examination Board constituted under section 80B;”; ]

(f) “co-operative society” or “society” means a co-operative society registered or deemed to be registered under this Act;

(g) “co-operative society with limited liability” means a society in which the liability of its members for the debts of the society in the event of its being wound up is limited by its bye-laws-

(i)                 to the amount, if any, unpaid on the shares respectively held by them; or

(ii)               to such amount as they may, respectively undertake to contribute to the assets of the society;

(h) “co-operative society with unlimited liability” means a society, the members of which are, in the event of its being wound up, jointly and severally liable for and in respect of all its obligations and to contribute to any deficit in the assets of the society::

[^10.(ha) Deposit Guarantee Scheme” means the Deposit Guarantee Scheme framed under section 57 B;

[^14.(hb) `Director of Co-operative Audit' means the Director of Co-operative Audit appointed under sub-section (1) of section 63 and any officer to whom all or any of the powers of the Director of Co-operative Audit may be delegated by the Government by general or special order under subsection (3) of section 63;]

(i)      “dispute” means any matter touching the business, constitution, establishments or management of a society capable of being the subject of litigation and includes a claim in respect of any sum payable to or by a society whether such claim be admitted or not;

[^10. [^11. (ia) [^14. [^15. “District Co-operative Bank” means a central society, the principal object of which is to raise funds to be lent to its members and individuals, with jurisdiction over one revenue district and having as its members any type of primary societies and Federal and Central societies having headquarters in such district.]]

(ib)^10. “Federal Co-operative Society” means a society having more than one district as its and operation and having [^14. the Government,] individuals and other co-operative societies as its members;]

(j) “financing bank” means a co-operative society having as its members only other co-operative societies and the main object of which is to raise money and lend the same to its members;

(k) “general body meeting” means a meeting of the members who are entitled to vote in the affairs of the society;

(l) “member “ means a person joining in the application for the registration of a Co-operative society or a person admitted to membership after such registration in accordance with this Act, the rules and the bye-laws, and includes a nominal or associate member;

[^14. (la) [^16. “miscellaneous societies” means such societies, as may be prescribed, and which accept deposits from their members only and no deposits shall be accepted from nominal or associate members, and shall undertake business activities for the welfare of its members as per the bye-laws and shall issue loans only to members:

Provided that no agricultural loans or schematic loans shall be issued to the members except the loans for welfare activities;]]

(m) “nominal or associate member” means a member who possesses only such privileges and rights of a member and who is subject only to such liabilities of a member as may be specified in the bye-laws;

(n) “officer” means the president, vice-president, chairman, vice chairman, secretary, manager, member of committee or treasurer and includes a liquidator, administrator and any other person empowered under the rules or the bye-laws to give directions in regard to the business of a cooperative society;

(o) “prescribed” means prescribed by rules made under this Act;

[^16. (oa) “prescribed period” means the period of limitation specified in Schedule III appended to this Act;

[^14. (oaa) ] `Primary Agricultural Credit Society' means a Service Co-operative Society, a Service Cooperative Bank, a Farmers Service Co-operative Bank and a Rural Bank, the principal object of which is to undertake agricultural credit activities and to provide loans and advances for agricultural purposes, the rate of interest on such loans and advances shall be the rate fixed by the Registrar and having its area of operation confined to a Village, Panchayath or a Municipality:

Provided that the restriction regarding the area of operation shall not apply to societies or banks in existence at the commencement of the Kerala Co-operative Societies (Amendment) Act, 1999 (l of 2000) :

Provided further that if the above principal object is not fulfilled, such societies shall lose all characteristics of a Primary Agricultural Credit Society as specified in the Act, Rules and Byelaws except the existing staff strength.]

[^3.(ob) “primary credit society” means a society other than an apex or central society which has as its principal object the raising of funds to be lent to its members;]

(oc) [^10. “Primary Co-operative Agricultural and Rural Development Bank” means a society having its area of operation confined to a taluk and the principal object of which is to provide for long term credit for agricultural and rural development activities:

[^15. Provided that no Primary Co-operative Agricultural and Rural Development Bank shall be registered without the bifurcation of assets and liabilities of the existing societies having the area of operation in more than one Taluk and the societies shall restrict their operation in the area of the respective society on such bifurcation]]

[^13.(od)  “Primary Co-operative Society” means a society having jurisdiction over a revenue district as a whole or over any specified area within such revenue district and having individual or individuals and other Co-operative Societies as its members.]

(p) “Registrar” means the Registrar of Co-operative Societies appointed under sub-section (1) of section 3 and includes any person on whom all or any of the powers of the Registrar under this Act are conferred;

(q) “rules” means the rules made under this Act;

[^3.(qa) “Scheduled Castes” means the Scheduled Castes in the State of Kerala as specified in the Constitution (Scheduled Castes) Order, 1950;]

(qb) “Scheduled Tribes” means the Scheduled Tribes in the State of Kerala as specified in the Constitution (Scheduled Tribes) Order, 1950;]

[^16.(qc) “Special Officer” means an officer, not below the rank of an Assistant Registrar, appointed by the Registrar to take into custody the assets and liabilities of the society which secured registration without bifurcating the area of operation of an existing society and to register new societies and to constitute committees as provided in section 28 of the Act.]

(r) “State” means the State of Kerala;

(ra) [^10. State Co-operative Agricultural and Rural Development Bank” means an apex society having only Primary Cooperative Agricultural and Rural Development Banks as its members and functioning in accordance with the provisions contained in the Kerala State Co-operative Agricultural and Rural Development Banks Act, 1984 (20 of 1984);

(rb) “State Co-operative Bank” means an apex society having only District Co-operative Banks as its members;

(rc) “State Co-operative Election Commission “means the State Co-operative Election commission constituted under section 28B;]

(s) State Co-operative Union” means the State Co-operative Union established under section 89;

(t) “Tribunal” means the Tribunal constituted under section 81;

[^10.(ta) [^13.“Urban Co-operative Bank” means a society registered under this Act having its area of operation in the Urban areas and which undertakes banking business with the licence obtained from  Reserve Bank of India;]

[^14.(taa) `Urban Co-operative Society' means a co-operative society the principal object of which is to undertake non-agricultural credit activities and to raise funds to be lent to its members with its area of operation confined to a municipality or a corporation :

Provided that the restriction regarding the area of operation shall not be applicable to the existing urban co-operative societies.]

(tb) “Vigilance Officer” means the Vigilance Officer appointed under section 68A;]

(u) “year means the period commencing on the [^8A. first day of April of any year and ending with 30st of March] of the succeeding year or in the case of any registered society or class of registered societies, the accounts of which are made upto any other date with the previous sanction of the Registrar, the year ending with such date.

CHAPTER II

REGISTRATION OF CO-OPERATIVE SOCIETIES

3. Registrar

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

(2) The Government may by general or special order confer any person all or any of the powers of the Registrar under this Act.

4. Societies which may be registered

Subject to the provisions of this Act a co-operative society which has as its object the promotion of the economic interests of its members or of the interests of the public in accordance with co-operative principles, or a society established with the object of facilitating the operations of such a society, may be registered under this Act.

[^16. Provided that no co-operative society shall be registered if it is likely to be economically unsound, or the registration of which have an adverse effect on development of co-operative movement.]

5. Registration with limited liability only

1) A co-operative society shall be registered only with limited liability: Provided that this sub-section will not affect the rights and liabilities of societies with unlimited liability which are in existence at the time of commencement of this Act.

(2) The word ‘limited’ or its equivalent in any Indian language shall be the last word in the name of a society registered under this Act with limited liability.

6. Application for registration of co-operative societies

(1) An application for the registration of a co-operative society shall be made to the Registrar in such form as may be prescribed and the applicant shall furnish to him such information about the society as he may require.

(2) Every such application shall conform to the following requirements, namely:-

(a) the application shall be accompanied by three copies of the proposed bye-laws of the society;

(b) where all the applicants are individuals, the number of applicants shall not be less than twenty-five, each of such person being a member of a different family.

Explanation.-For the purposes of this clause, the expression “member of a family” means wife, husband, father, mother, grandfather, grand-mother, step-father, step-mother, son, daughter, stepson, step-daughter, grand-son, grand-daughter, brother; sister, half brother, half-sister and wife of brother or half-brother;

(c)    the application shall be signed by every one of the applicants who is an individual [^14. as specified under clause (a) of sub-section (1) of section 16] and by a person duly authorized on behalf of the Government or any society or other body of person which is an applicant.

                                                     

7. Registration

(1) If the Registrar is satisfied—

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

(b) that the objects of the proposed society are in accordance with section 4;

(c) that the area of operation of the proposed society and the area of operation of another society of similar type do not overlap;

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

(e)   that the proposed society complies with the requirements of sound business, he may register the society and its bye-laws [^10. within a period of ninety days of receipt of application.]

(2) Where the Registrar refuses to register a society, he shall communicate the order of refusal together with the reasons therefore within seven days of such order to such of the applicants as may be prescribed.

(3) An application for registration of a society shall be disposed of by the Registrar [^10. within ninety days] from the date of receipt of the application.

[^10. (4) Where an application for registration of a society is not disposed of within the time specified in sub-section (3), the applicant may make a representation,--

(a)   before the Registrar, if the application for registration is made to a person on whom the powers of the Registrar is conferred under sub-section (2) of section 3; or

(b)   before the Government, if the application for registration is made before Registrar, and the Registrar or the Government, as the case may be, shall, within sixty days from the date of receipt of such representation, issue directions to the authority concerned to take appropriate decision on the application for registration and the authority concerned shall comply with such directions.]

8. Registration certificate

[^16.(1)] Where a co-operative society is registered under this Act, the Registrar shall issue a certificate of registration signed and sealed by him, which shall be conclusive evidence that the said society is duly registered under this Act.

[^16.(2) Notwithstanding anything contained in sub-section (1), where the Registrar is satisfied that the original registration certificate is irrecoverably lost and a duplicate certificate could not be issued as the files or records regarding the Registration of the co-operative society was lost, after registration, the Registrar shall issue a certificate stating the registration number and date of registration of a co-operative society, on the basis of the details available in the audit certificate and the records available with the Registrar, signed and sealed by him, which shall be conclusive proof that the said society is duly registered and it shall be treated as a certificate of registration.]

[^10.8A Affiliation to apex Society

(1)   Every Primary Co-operative Society or Central Co-operative Society may, within such time and in such manner, as may be prescribed, apply for affiliation to the concerned apex society or Central society, as the case may be.

(2)   Where the apex society or central society does not, within sixty days from the date of receipt of the application for affiliation, determine whether such affiliation should be given or not such affiliation shall be deemed to have been given to the applicant society from the date on which the said period of sixty days expires.

(3)   When the apex or central society, as the case may be, rejects an application for affiliation under sub-section (1), the aggrieved society may file an appeal before the Registrar against such rejection within thirty days from the date of receipt of the order of rejection and the Registrar shall dispose of the appeal within sixty days from the date of appeal.]

9. Co-operative societies to be bodies corporate

The registration of a society shall render it a body corporate by the name under which it is registered, having perpetual succession and a common seal, and with power to hold property, enter into contracts, institute and defend suits and other legal proceedings and to do all things necessary for the purposes for which it was constituted.

[^14. Provided that the Government and the Registrar shall have power to regulate [^16. Omitted] the working of a society for the economic and social betterment of its members and the general public.]

[^16. 9A. Publication of name by a co-operative society.—Every co-operative society,—

(a) shall paint or affix its name, register number and the address of its registered office and keep the same painted or affixed in conspicuous position, in letters easily legible to members in vernacular language and in English language, on the outside of every office or place in which its business is carried on;

(b) shall have its name engraved in legible characters on its seal with common emblem; and

(c) shall have its name and 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 co-operative society, and in all bills of parcels, invoices, receipts and letters of credit of the co-operative society.]

10. Change of name of society

(1) A society may, by an amendment of its bye-laws, change its name.

(2) Where a society changes its name, the Registrar shall enter the new name in the register of co-operative societies in the place of the former name and shall amend the certificate of registration accordingly.

(4)   The change of name of a society shall not affect any rights or obligations of the society or render defective any legal proceedings by or against it; and any legal proceedings which might have been continued or commenced by or against the society by its former name may be continued commenced by its new name.

11. Change of liability

(1) Subject to the provisions of this Act and the rules, a society may, by an amendment of its bye-laws, change the form or extent of its liability.

(2) When a society has passed a resolution to change the form or extent of its liability, it shall give notice thereof in writing to all its members and creditors and notwithstanding the provisions of section 24 or any bye-law or contract to the contrary, any member or creditor shall, during a period of two months 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.

(3) Any member or creditor who does not exercise his option within the period specified in sub-section (2) shall be deemed to have given his assent to the change.

(5)   An amendment of the bye-laws of a society changing the form or extent of its liability shall not be registered or take effect until either—

(a)   the assent thereto of all members and creditors has been given or deemed to have been given; or

(b)   all claims of members and creditors who exercise the option referred to in sub-section (2) within the period specified therein have been me in full.

12. Amendment of bye-law of society

(1) No amendment of any bye-law of a society shall be valid unless such amendment has been registered under this Act.

(2) The provisions of section 7 specifying the conditions to be satisfied before registration of the bye-laws of a society by the Registrar shall mutatis mutandis, apply also to the registration of amendments to bye-laws:

Provided that the Registrar shall before registering an amendment of any

bye-law consult-

(a)   the State Co-operative Union if the bye-laws to be amended are that of an apex society or a central society; or

(b)   the circle co-operative union if the bye-laws that are to be amended are that of any other society; and

(c)    the financing bank if the society is indebted to the financing bank.

(3) The Registrar shall forward to the society a copy of the registered amendment together with a certificate of registration signed and sealed by him, and such certificate shall be conclusive evidence that the amendment has been duly registered.

(4) Where the Registrar refuses to register an amendment of the bye-laws of a society, he shall communicate the order of refusal, together with the reasons therefore, within seven days of the order to the society

[^10.(4A) An application to register an amendment of the bye-laws of a society shall be disposed of by the Registrar within ninety days from the date of receipt of the same.

(4B) Where an application to register an amendment of the bye-laws of a society is not disposed of within the time specified in sub-section (4A), the society may make a representation,-

(a)   before the Registrar of Co-Operative Societies, if the application to register the amendment of the bye-laws is made to a person on whom the powers of the Registrar is conferred under sub-section (2) of section 3; or

(b)   before the Government if the application for registration of the amendment of the bye-laws is made before the Registrar, and the Registrar or the Government, as the case may be, shall within, sixty days from the date of receipt of such representation, issue directions to the authority concerned, to dispose of the same”]

[^16. (5), (6), and (7) Omitted]

13. When amendments of bye-laws come into force

An amendment of the bye-laws of a 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.

[^16.13A. Subject matter of bye-laws.—Every co-operative society shall make its bye-laws consistent with the provisions of this Act and Rules and no provision in the bye-laws of a co-operative society shall be contrary to the provisions of the Act and the Rules.]

14. Amalgamation, transfer of assets and liabilities and division of societies

(1) A society may, [^16. Omitted] by a resolution passed by a two-thirds majority of the members present and voting at a general body meeting of the society,-

(a)   transfer its assets and liabilities in whole or in part to any other society;

(b)   divide itself into two or more societies

(2) Any two or more societies may, [^16. Omitted] by a resolution passed by a two-thirds majority of the members present and voting at a general body meeting of each such society, amalgamate themselves and form a new society.

(3) The resolution of a society under sub-section (1) or sub-section (2) all contain all particulars of the transfer, division or amalgamation as the case may be.

(4) When a society has passed any such resolution, it shall give notice thereof in writing to all its members and creditors and notwithstanding the provisions of section 24 or any bye-law or contract to the contrary, any member or creditor shall, within a period of two months 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.

(5) Any member of creditor who does not exercise his option within the period specified in sub-section (4) shall be deemed to have given his assent to the proposals contained in the resolution.

(6)   A resolution passed by a society under this section shall not take effect until either—

(a)   the assent thereto of all the members and creditors has been given or deemed to have been given; or

(b)   all claims of members and creditors who exercise the option referred to in sub-section (4) within the period specified therein, have been met in full.

(7)   Where a resolution passed by a society under this section involves the transfer of any assets and liabilities, the resolution shall, notwithstanding anything contained in any law for the time being in force, be a sufficient conveyance to vest the assets and liabilities in the transferee without any further assurance.

[^16. (8) and (9) Omitted]

[^16.14A. Promotion of subsidiary institutions for the economic welfare of members.—

(1) A 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 the general body of the co-operative society deems its existence necessary:

Provided that a 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 to such subsidiary institutions.

Explanation:—For the purpose of this section,—

(a) an institution shall be deemed to be a subsidiary institution where the co-operative society,—

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

(ii) holds more than half in nominal value of equity shares of such institutions.

(b) a subsidiary institution shall not include a partnership firm.

(3) The annual reports and audited accounts of any such subsidiary institution shall be placed each year before general body meeting of the promoting co-operative society.

14B. Partnership of co-operative societies.—

(1) Any two or more co-operative societies with prior permission of the Registrar, may by resolution passed by the majority of the members present and voting at a general body meeting of each of such co-operative societies, may enter into partnership to carry out anyone or more specific business. Written notice of the general body meeting shall be given to each member before fifteen clear days of such meeting.

(2) The partnership shall be in the interest of the members of the co-operative society or the co-operative societies or shall be in the public interest or shall be in the interest of the co-operative movement in general and it does not mean to be a partnership firm registered under Indian Partnership Act, 1932 (Central Act 9 of 1932).]

15. Cancellation of registration certificates of societies in certain cases

(1) Where the whole of the assets and liabilities of a society are transferred to another society in accordance with the provisions of section 14, the registration of the first mentioned society shall stand cancelled and that society shall be deemed to have been dissolved and shall cease to exit as a corporate body.

(2) Where two or more societies are amalgamated into a new society in accordance with the provisions of section 14 the registration of each of the amalgamating societies shall stand cancelled on the registration of the new society and each amalgamating society shall be deemed to have been dissolved and shall cease to exist as a corporate body.

(3) Where a society is divided into two or more societies in accordance with the provisions of section 14, 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 exit as a corporate body

CHAPTER III

MEMBERS OF CO-OPERATIVE SOCIETIES AND THEIR RIGHTS AND LIABILITIES

16. Persons who may become members

(1) No person shall be admitted as a member of a society except the following,

namely:-

(a)   an individual—

(i) who has attained the age of eighteen years:

Provided that this sub-clause shall not apply in the case of a society formed exclusively for the benefit of the students of any school or college;

(ii) who is not of unsound mind;

(iii) who is a resident within, or is in occupation of land in the area of operation of the society;

(b) any other society;

[^10.(ba) a local Self government;]

(c) the Government; and

(d) any body of persons, whether incorporated or not and whether or not established by or under any law, if such body is approved by the Government in this behalf by general or special order:

Provided that in a society formed for the promotion of the economic interests of members through a specified activity no person other than one who is likely to be benefited directly by such activity may be admitted as a member of such society unless such admission is permitted specifically by rules:

Provided further that where a society is formed exclusively for the benefit of persons engaged in any particular industry, no person who is not an actual worker in the industry shall be admitted in excess of such percentage of the total membership of the society as may be prescribed:

Provided also that the Coffee Board, the Rubber Board and any other statutory or non-statutory Board, Committee or Corporation constituted for the purpose of the development of an industry, may be admitted as a member of a society engaged in marketing and processing of the products of the industry concerned and formed for the workers and growers of such industry, so however that no such Board, Committee or Corporation shall be admitted as a member of a co-operative credit society.

[^10.Provided also that in the case of hospital co-operative societies, industrial and commercial establishments and other organizations registered under any other law may be admitted as members.

Explanation.-For the purpose of this sub-section ‘hospital cooperative society’ means a society, the main object of which is to run a hospital or to conduct medical or paramedical courses or to run medical shops.]

(2) Membership in any society other than a society formed for the benefit of the Scheduled Castes or the Scheduled Tribes shall not be refused merely on the ground that a person belongs or does not belong to a particular religion, race, community, caste, sect or denomination. A decision on an application for membership shall be taken within two months from the date of receipt of the application.

[^10.(2A) Where an application for membership in a society is not disposed of within the time specified in sub-section (2), the Registrar shall be bound, on the written request of the applicant, to determine whether such membership shall be given or not;

(2B) Where the Registrar does not, within one month of the date of receipt of such written request determine whether such membership should be given or not, the applicant may make a representation,-

(a) before the Registrar, if the request referred to in sub-section (2A) is made to a person on whom, the powers of the Registrar is conferred under sub-section (2) of section 3; or

(b) before the Government, if the request referred to in subsection (2A) is made to the Registrar and the Registrar or the Government, as the case may be, shall, within thirty days from the date of receipt of such representation, determine whether such membership should be given or not.]

(3). Where a person is refused admission as a member in a society, the decision refusing admission together with the reasons therefore shall be communicated by the society to that person within a period of fifteen days from the date of the decision.

[^16.16A. Ensuring participation of members in the management of societies.—

(1) No member shall be eligible to continue to be a member of a co-operative society if he,—

(a) is not using the services of the society for two consecutive years or using the services below the minimum level as may be prescribed in the rules or the bye-laws;

(b) has not attended three consecutive general meetings of the society and such absence has not been condoned by the members in the general meeting.

(2) Where any person becomes ineligible for continuing as a member as per sub-section (1), the committee of the society may remove the person from membership after giving him an opportunity for making his representation, if any, and the person concerned shall thereupon cease to be a member of the society:

Provided that no member of the society removed as above shall be eligible for re-admission as a member of that society for a period of one year from the date of such removal.]

17. Expulsion of members

(1) Any member of a society, who has acted adversely to the interests of the society [^16. or persistently defaulting payment of his dues, or has failed to comply with the provisions of the bye-laws], may be expelled upon a resolution of the general body passed at a special meeting convened for the purpose by the votes of not less than two-thirds of the total number of members present and voting at the meeting.

(2) No member shall be expelled under sub-section (1) without being given an opportunity of making his representation.

(3) A copy of the resolution expelling a member shall be communicated the member within a period of fifteen days from the date of passing of the resolution.

[^16.(4) The expulsion from membership may involve forfeiture of shares held by the member.

(5) No member of the 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 one year from the date of such expulsion.]

18. Nominal or associate members

(1) A society may admit any individual as a nominal or associate member.

[^15. Omitted]

[^10.Provided [^13. also] that a hospital co-operative society may admit any other society as nominal or associate member.

Explanation.-The term ‘hospital co-operative society’ shall have the same meaning as in the Explanation to the fourth proviso to sub-section (1) of section 16.] ]

(2) A nominal or associate member shall not be entitled to any share, in any form whatsoever, in the assets or profits of the society or to be elected to the committee of a society.

(3) Save as provided in this section, a nominal or associate member shall have such privileges and rights of a member and be subject to such liabilities of a member, as may be specified in the bye-laws of the society.

19. Member not to exercise rights till due payment made

No member of a society shall exercise the rights of a member unless he has made such payments to the society in respect of membership or has acquired such interest in the society, as may be prescribed by the rules or the bye-laws.

[^16.19A. Member participation.—No member of a society shall exercise the right of a member unless he has attended the minimum required general body meeting and minimum level of services as may be prescribed.

19B. Right of a member to get information.—Every society shall keep open to inspection for its members, free of charge, at all reasonable times, at the registered address of the society,—

(a) an up-to-date copy of the Kerala Co-operative Societies Act, 1969;

(b) an up-to-date copy of the Kerala Co-operative Societies Rules, 1969;

(c) an up-to-date copy of the bye-laws of the society;

(d) a register of members;

(e) the latest audited balance sheet of the society; and

(f) the accounts of the society in so far as they relate to his or her transaction only.]

[^10. 20 Vote of numbers.—Notwithstanding anything contained in any other provision of this Act other law, [^11. every member] of a society shall have one vote in the affairs of the society:

Provided that,---

(a) a member admitted within sixty days immediately prior to the date of

election shall not have a right to vote;

(b) a nominal or associate member shall not have the right to vote;

(c) Where the Government is a member of a society, each person nominated by the Government the committee of the society shall have one vote each including the right to vote for election of office bearers of the society;

(d) an ex-officio member of the committee of a society shall have one vote but shall not have right to vote for election of office bearers of the society;

(e) in the case of an equality of votes, the Chairman shall have and exercise a second or casting vote:

[^11. Omitted]]

21. Manner of exercising vote

(1) Every member of a society shall exercise his vote in person

(2) Notwithstanding anything contained in sub-section (1), a society or corporation or a statutory or non-statutory Board, Committee or other body of persons which is a member of another society may, subject to any rules made under this Act, appoint one of its members to vote on its behalf in the affairs of that other society.

[^10. 22 Restriction on holding shares:- In any society, no member other than the Government any statutory or nonstatutory Board, Committee or Corporation approved by the Government in this behalf any other society, shall hold more than such portion of the total share capital of the society, not exceeding one fifth thereof, as may be prescribed:

Provided that the Government may, by notification in the Gazette, specify in respect of any class of societies a higher maximum than one fifth of the share capital.]

23. Restrictions on transfer of shares or interest

(1) The transfer of a share or interest of a member in the capital of a society shall be subject to such conditions and restriction as to the maximum holdings as are specified in section 22.

(2) No transfer by a member of his share or interest in a society shall be valid unless-

(a) the member has held such share or interest for not less than three years; and

(b) the transfer is approved by the committee of the society

24. Restriction on withdrawal of shares

Subject to the other provisions of this Act, no withdrawal by a member of his share in a society shall be valid unless-

(a) the member has held such share for not less than three years; and

(b) such withdrawal is in accordance with the bye-laws of the society.

25. Transfer of interest on death of members

(1) On the death of a member of a society, the society shall transfer the share or interest of the deceased member to the person or persons nominated in accordance with the rules or the bye-laws or, if no person has been so nominated, to such person as may appear to the committee to be the heir or legal representative of the deceased member.:

Provided that such nominee, heir or legal representative, as the case may be, is admitted as a member of the society.

Provided further that nothing in this sub-section shall prevent a minor or a person of unsound mind from acquiring by inheritance or otherwise the share or interests of a deceased member in a society.

(2) Notwithstanding anything contained in sub-section (1), any such nominee, heir or legal representative, as the case may be, may require the society to pay to him the value of the share or interest of the deceased member ascertained in accordance with the rules or the bye-laws and the society shall pay the amount to the nominee, heir or legal representative, as the case may be, on receipt of such requisition.

(3) A society may pay all other moneys due to the deceased member from the society to such nominee, heir or legal representative, as the case may be.

(4) All transfers and payments made by a society in accordance with the provisions of this section shall be valid and effectual against any demand made upon the society by any other person.

26. Liability of past member or of estate of deceased member

(1) Subject to the provisions of sub-section (2), the liability of a past member or of the estate of a deceased member of a society for the debts of the society as they 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) Where a society is ordered to be wound up under section 71, the liability of a past member or of the estate of a deceased member who ceased to be a member or died within two years immediately preceding the date of the order of winding up, shall continue until the entire liquidation proceedings are completed, but such liability shall extend only to the debts of the society as they existed on the date of his ceasing to be a member, or death, as the case may be.

NOTES

* This Act came into force on 15.05.1969 by Notification No. 24314/C3/69 AD dated 12.05.1969 and was published in Kerala Gazette Extraordinary No. 102 dated 11.04.1969. The Bill was published in Kerala Gazette Extraordinary No. 94 dated 13.06.1967. The report of the select committee was published in Kerala Gazette Extraordinary No. 20 dated 22.01.1968.

1.  Amended by Act 38 of 1971. Act 38 of 1971 was published in Kerala Gazette Extraordinary No. dated w.e.f. 23.12.1971.

2. Amended by Act 8 of 1974. Act 8 of 1974 was published in Kerala Gazette Extraordinary No. dated w.e.f.. 13.03.1974.

3. Amended by Act 29 of 1986. . Act 29 of 1986 was published in Kerala Gazette Extraordinary No. 1078 dated 28.11.1986 w.e.f. 25.02.1985. Amendments to Sections Sections 2, 28A and 80 shall be deemed to have come into force on the 25 th day of February, 1985, Amendments to sections 69 and 70 shall be deemed to have come into force on the 15 th day of May, 1969, Amendments to sections 88 and 89 shall be deemed to have come into force on the 14 th day of February, 1986 and the remaining provisions of this Act shall come into force on 28.11.1986).

4. Amended by ACT 19 OF 1987. Act No. 19 of 1987 was published in Kerala Gazette Extraordinary No. 711 dated 25.08.1987.

5. Amended by ACT 7 OF 1988. Act 7 of 1988 was published in Kerala Gazette Extraordinary No. 351 dated 21.04.1988 w.e.f. 15.02.1988.

6. Amended by ACT 5 OF 1992. Act 5 of 1992 was published in Kerala Gazette Extraordinary No. 17 dated 12.04.1992 w.e.f. 07.02.1992.

7. Amended by ACT 16 OF 1993.  Act 16 of 1993 was published in Kerala Gazette Extraordinary No. 38 dated 20.08.1993 w.e.f. 06.02.1993.

8. Amended by ACT 6 OF 1995. Act 6 of 1995 was published in Kerala Gazette Extraordinary No. 793 dated 05.08.1995.

8A. Amended by ACT 9 of 1997. Act 9 of 1997 was published in Kerala Gazette No. 42 dated 03.05.1997 w.e.f.

9. Amended by ACT 15 of 1997. Act No. 15 of 1997 was published in Kerala Gazette Extraordinary No. 42 dated 29.12.1997 w.e.f. 03.06.1997.

10. Amended by Act 1 of 2000. Act 1 of 2000 was published in Kerala Gazette Extraordinary No. 1 dated 01.01.2000 w.e.f. 01.01.2000 Sections 13, 16, 17, 18 and 21 of this Act shall come into force on such dates as the Government may by notification in the Gazette appoint; and different dates may be appointed for different provisions of this Act, and the other provisions of this Act shall come into force at once i.e. w.e.f. 01.01.2000. Section 28B was given effect from 07.03.2001 as per SRO 244/2001 published in Kerala Gazette Extraordinary No. 46 dated 07.03.2001. Sections 57A and 57B came into force on 04.07.2000 and 02.01.2001 respectively. Sections 70, 70A and 70B were given effect from 02.01.2003 by SRO 369/2003 published in Kerala Gazette Extraordinary No. 48 dated 12.05.2003. Section 80B was given effect from 25.01.2001 as per SRO 89/2001 published in Kerala Gazette Extraordinary No. 46 dated 29.01.2001.

11. Amended by ACT 3 OF 2002. Act 3 of 2002 was published in Kerala Gazette Extraordinary No. 47 dated 15.07.2002 w.e.f. 04.05.2002.

12. Amended by ACT 16 OF 2004. Act 16 of 2004 was published in Kerala Gazette Extraordinary No. dated 23.06.2004 w.e.f. 23.06.2004.

13. Amended by ACT 9 OF 2009.  Act 9 of 2009 was published in Kerala Gazette Extraordinary No. dated  w.e.f. 11.12.2007.

14. Amended by ACT 7 OF 2010. Act 7 of 2010 was published in Kerala Gazette Notification No. 14953/LegB2/09/Law dated  28.04.2010 w.e.f. 28.04.2010.

15. Amended by ACT 13 OF 2012. Act 13 of 2012 was published in Kerala Gazette Notification No. 1318/LegH2/2012/Law dated  23.07.2012. Amendments to Sections Sections 2(oc) and 2(qc) and 28(1D) to 28(1E) shall be deemed to have come into force on 12.08.2011, Sections 2(ia), 18 and 28(1F) to 28(1I) and the special provisions in respect of the existing DCBs shall be deemed to have come into force on 11.02.2012

16. Amended by ACT 8 OF 2013. Act 8 of 2013 was published in Kerala Gazette Notification No. 816/LegH2/2013/Law dated  14.02.2013 w.e.f. 14.02.2013.

17. Amended by ACT 22 OF 2013. Act 22 of 2013 was published in Kerala Gazette Notification No. 4576/LegH2/2013/Law dated  25.04.2013. Amendments to Sections 56A, 80C, 80D and 80E shall be deemed to have come into force on 30.04.2011, Sections 33, 63(3), 66 and 69A shall be deemed to have come into force on 28.04.2010, Section 63(13) shall be deemed to have come into force on 05.06.2007 and all other Amendments shall be deemed to have come into force on 25.04.2013.