The Multi-State Cooperative Societies Rules, 2002


The Multi-State Cooperative Societies Rules, 2002

Ministry of Agriculture (Department of Agriculture and Cooperation)
New Delhi, the 2nd December 2002

G.S.R 790(E) -In exercise of the powers conferred by section 124 of the Multi-State Cooperative Societies Act, 2002 (39 of 2002), the Central Government hereby make the following rules, namely:


Chapter 1 - Preliminary

The Multi-State Cooperative Societies Rules, 2002

Ozg Registration, Approval & Licensing Consultant

Ozg Center, New Delhi & Mumbai, INDIA

Phone # 098-735-09314, 098-735-23276; 098-715-62842

Email: registration.consultant@ozg.co.in

1. Short title, extent and commencement

1. These Rules may be called the Multi-State Cooperative Societies Rules, 2002.

2. These rules shall come into force on the date of their publication in the Official Gazette.

2. Definitions

In these rules, unless the context otherwise requires,

(i) "Act" means the Multi-State Cooperative Societies Act, 2002 (39 of

2002);

(ii) "authorised office" means an officer authorised by the Central Government for the purpose of section 103 of the Act;

(iii) "decree" means any decree of a civil court and includes any

decision or order referred to in section 94 of the Act;

(iv) "decree holder" means any person holding a decree as defined in clause (iii);

(v) "defaulter" means any multi-state cooperative society, any cooperative society, member or any other person committing default;

(vi) "form" means a form appended to these rules,

(vii) "general meeting" means a meeting of the general body including a representative general body referred to in the first proviso to subsection (1)

of section 38;

(viii) "judgement debtor" means a meeting any multi-state cooperative


society against which or any person against whom a decree has been obtained;

(ix) "recovery officer" means any person authorised to execute the powers of the Central Registrar under section 94;

(x) "sale officer" means a person authorised by the Central Registrar by a general or special order, to attach and sale the property of judgement debtor or to execute any decree by attachment or sale of property;

(xi) "section" means a section of the Act;

(xii) "schedule" means a schedule appended to these rules;

(xiii) Words and expressions defined in the Act and used but not defined in

these rules shall have the meanings respectively assigned to them in the Act.


Chapter 2 - Registration

The Multi-State Cooperative Societies Rules, 2002

Ozg Registration, Approval & Licensing Consultant

Ozg Center, New Delhi & Mumbai, INDIA

Phone # 098-735-09314, 098-735-23276; 098-715-62842

Email: registration.consultant@ozg.co.in

3. Application for registration

(1) An application for registration of a multi-state cooperative society under sub-section (1) of section 6 shall be made in Form I and shall, subject to the provisions of sub-section (2) of section 6 and sub-rules (2), (3), (4) and (5) of these Rules be signed by the applicants and be accompanied by

(a) four copies of the proposed bye-laws of the multi-state cooperative society, duly signed by each of the persons who sign the application for registration;

(b) a list of persons who have contributed to the share capital, together with the amount contributed by each of them, and the admission fee paid by them;

(c) a certificate from the bank or banks stating the credit balance in favour of the proposed multi-state cooperative society;

(d) a scheme showing the details explaining how the working of the multi-state cooperative society will be economically sound and the registration of such multi-state cooperative society will be beneficial for social and economic betterment of its members through self-help and mutual aid in accordance with the cooperative principles;

(e) certified copy of the resolution of the promoters which shall specify the name and address of one of the applicants to whom the Central Registrar may address correspondence under the rules before registration and dispatch or hand over registration documents.

(2) Where any member of a multi-state cooperative society to be registered is a multi-state cooperative society or a cooperative society, the Chairperson or Chief Executive or a member duly authorised by board of directors or the governing body of such multi-state cooperative society or cooperative society, as the case


may be, shall be authorised by that board by as resolution, to sign the application for registration and bye-laws on its behalf, and a copy of such resolution shall be suspended to the application.

(3) Where the members of a multi-state cooperative society to be registered are cooperative Societies or multi-state cooperative societies and individuals, such application shall be signed by individuals and authorised representative of such cooperative society or multi-state cooperative society.

(4) Where any member of multi-state cooperative society to be registered is a Government company, a corporate body or a society registered under the Societies Registration Act, 1860 (21 of 1860) such member duly authorise any person to sign the application for registration and the bye-laws on its behalf and a copy of such resolution giving such authority shall be appended to the application.

(5) A copy of resolution indicating the name of one or more applicants, who are authorised to make alterations or additions to the proposed bye-laws submitted with the application, as may be suggested by the Central Registrar, shall be submitted.

(6) The application shall either be sent by registered post or delivered by hand to the Central Registrar in his Office.

4. Registration

(1) On receipt of an application under rule 3, the Central Registrar shall enter the particulars of the application in the register of applications to be maintained in Form II, give a serial number to the application and issue a receipt in acknowledgement thereof.

(2) If the Central Registrar is satisfied that the proposed multi-state cooperative society has complied with the requirements of the Act and the rules, he may register the society and its bye-laws.

(3) Where the Central Registrar registers a multi-state cooperative society, he shall issue to the said society a certificate of registration signed by him and bearing his official seal containing registration number and date of registration of the said society. The Central Registrar shall also issue, along with the certificate of registration, a certified copy of bye-laws, as approved and registered by him, which shall be the registered bye-laws of the said society for the time being in force.


5. Refusal of registration

(1) The order of refusal to register a multi-state cooperative society referred to in sub-section (3) of section 7 shall be communicated through registered post to the person referred to in clause (e) of sub-rule (1) of rule 3, of the proposed society.

(2) The manner of communication of orders refusing the registration under sub-rule (1) shall be conclusive proof for refusal of the registration of the proposed society.

6. Bye-laws

Every multi-state cooperative society applying for registration under this Act may make bye-laws consistent with the provisions of this Act and the rules made thereunder and model bye-laws, if any, framed by the Central Registrar. The subject matter of the bye-laws shall be as provided in section 10 and other relevant provisions of the Act and rules made thereunder. In addition, the bye-laws may also include,

(i) Procedure and manner of redemption of shares.

(ii) The provisions of office bearers of the society, the terms and conditions, their functions and responsibilities other than those specified in the Act.

(iii) Constitution of the committees of the board.

(iv) Rate of dividend subject to maximum of the rates specified in the bye-laws.

(v) The procedure for the association and representation of employees of the society.

(vi) Constitution of the committees of the board.

(vii) The procedure of election or selection for constitution of smaller body of delegates.

(viii) The method of recruitment, the condition of service and the authority competent to fix, revise or regulate the scales of pay and allowance to be paid to the officers and other employees of the society and the procedure to be followed in the disposal of disciplinary cases.

(ix) The constitution and powers of the representative general body and the restrictions subject to which this body may exercise its powers.

7. Refusal of amendment of bye-laws


(1) Where the Central Registrar refuses to register an amendment of bye-laws of a multi state cooperative society under sub-section (9) of section 11, he shall communicate the order of refusal together with the reasons therefore to the chief executive of a multi-state cooperative society, through registered post.

(2) The manner of communication of the order of refusal under sub-rule

(1) shall conclusive proof that the amendments of bye-laws have been refused and communicated to the society.

8. Principal place of business and address

(1) Every multi-state cooperative society shall have one principal place of business which shall be the registered office of the society and shall be specified in the bye laws.

(2) Every change in principal place of business of a multi-state cooperative society shall be made by an amendment of its bye-laws after the following procedure laid down in section 11 of the Act.

(3) Any change in registered office of a multi-state cooperative society, the same shall be notified to the Central Registrar within a period of fifteen days of its change.

9. Maintenance of Registration file by the society

(1) Every multi-state cooperative society shall maintain at its registered address a registration file containing,

(a) the certificate of registration;

(b) the registered bye-laws;

(c) all registered amendments to the bye-laws along with the certificates of registration of amendments;

(d) a copy of the Act and the rules.

(2) The registration file shall be kept open for inspection at all times during working hours to the Central Registrar or any other officer authorised by him or any member of multi-state cooperative society.

10. Change in name of multi-state cooperative society

(1) The name of a multi-state cooperative society may be changed after following the procedure given in the section 11, however, that it does not refer to any caste or religion denomination and is not inconsistent with the objects of the multi-state cooperative society.

(2) Every change in the name of the multi-state cooperative society shall be made by an amendment of its bye-laws.

(3) After the change in the name is approved by the Central Registrar


the multi-state cooperative society shall send the original registration certificate for amendment to the Central Registrar who shall return the same to the multi-state cooperative society duly amended.

11. Conditions to be complied with for membership

(1) No persons shall be admitted as a member of a multi-state cooperative society unless

(a) he has applied in writing in the form, if any, laid do0wn by the multi-state cooperative society or in the form specified by the Central Registrar, if any, for membership;

(b) his application is approved by the board of the multi-state cooperative society;

(c) he has purchased the minimum number of shares and paid the value thereof in full or in part in such calls as may be laid down in the bye-laws of the multi-state cooperative society;

(d) he has fulfilled all other conditions laid down in the Act, the rules and the bye-laws;

(e) in the case of a multi-state cooperative society or a cooperative society or the national cooperative society or any other corporation owned or controlled by the Government or any Government or any Government company or body of persons whether incorporated or not, the application for membership shall be accompanied by a resolution authorising it to apply for such membership.

(2) No person shall be eligible for admission as a member of a multi-state cooperative society if he –

(a) has not attained the age of 18 years;

(b) has been adjudged by a competent court to be an insolvent or an undischarged insolvent;

(c) has been sentenced for any offence, other than offence of a political character or an offence not involving moral turpitude and dishonesty and a period of five years has not elapsed from the date of expiry of the sentence.

(3) Notwithstanding anything contained in these rules or the bye-laws of the multi-state cooperative society, if a member becomes or has already become subject to any disqualifications specified in sub-rule (2), he shall be deemed to have ceased to be a member of the society from the date when the disqualification was incurred.


(4) No individual being a member of a primary level multi-state cooperative society or a multi-state credit society, or a multi-state urban cooperative bank, shall be the member of any other multi-state cooperative society or cooperative society of the same class without the general or special permission of the Central Registrar and where an individual has become a member of two such cooperative societies aforesaid, than either or both of the societies shall be bound to remove him from membership on written requisition from the Central Registrar to that effect.

(5) No multi-state cooperative society shall admit members within thirty days prior to the date of the meeting of its general body.

Chapter 3 - Federal Cooperative

The Multi-State Cooperative Societies Rules, 2002

Ozg Registration, Approval & Licensing Consultant

Ozg Center, New Delhi & Mumbai, INDIA

Phone # 098-735-09314, 098-735-23276; 098-715-62842

Email: registration.consultant@ozg.co.in

12. Classification of federal cooperatives

(1) The federal cooperative societies may be classified with reference to the nature of their activities. Not more than one federal cooperative society shall be registered in similar and identical objects in same area of operation.

(2) The federal cooperatives for the sake of promotion of their constituent members will make suitable provisions in their bye-laws to avoid competition with the member societies.

Chapter - 4
Management of multi-state cooperative societies


13. Annual General Meeting

(1) Every multi-state cooperative society shall hold the annual general meeting of its members not later than a period of six months after the close of cooperative year. All the general meetings shall be called at the principal place of the society.

(2) Without prejudice to the provisions sub-section (3) of section 38 of the Act, a multi-state cooperative society with a membership exceeding one thousand may provide in its bye-laws for the constitution of a smaller body. The small body so constituted shall exercise all such powers of the general body as may be specified in the bye-laws.

14. Interim board and general meeting for the first election

The first general meeting of the society shall be held within six months of the registration of the society by the promoter members for the election


of the board of directors. The interim board selected by the applicants for the registration of a multi-state cooperative society shall hold office till the regular board is elected.

15. Notice for general meeting

(1) Annual general meeting of a multi-state cooperative society may be called by giving not less than fourteen days notice in writing.

(2) Special general meeting of a multi-state cooperative society may be called by giving not less than seven days notice in writing.

(3) When a general meeting is called by the Central Registrar or any person authorised by him under sub-section (2) of section 39 or a special general meeting under sub-section (2) of section 40, he may determine –

(i) the period of notice of such meeting which shall not be less than seven days;

(ii) the time and place of such meeting;

and

(iii) the subjects to be considered in such meeting.

The Central Registrar or any person authorised by him may preside over such meeting.

(4) The notice of annual general meeting shall be accompanied by a copy each of the audited balance sheet, profit and loss account, together with the auditor's report thereon relating to the preceding year and the report of the board, amendment of bye-laws, if any and election of members of the board, if any.

16. Quorum at a general meeting

(1) Unless otherwise provided in the bye-laws, the quorum for a general meeting shall be one-fifth of the total number of members of the general body of a multi-state cooperative society.

(2) No business shall be transacted at any general meeting unless there is a quorum at the time when the business of the meeting is due to commence.

(3) If within half-an hour from the time appointed for the meeting a quorum is not present, the meeting shall stand adjourned:

PROVIDED that a meeting which has been called on requisition of the members shall not be adjourned but dissolved.

(4) If at any time during the meeting sufficient number of members are


not present to form the quorum the Chairperson or the member presiding over the meeting on his own, or on his attention being drawn to this fact, shall adjourn the meeting and the business that remains to be transacted at this meeting, if any, shall be disposed of in the usual manner at the adjourned meeting.

(5) Where a meeting is adjourned under sub-rule (3) or sub-rule (4), the adjourned meeting shall be held either on the same day or on such date, time and place as may be decided by the Chairperson or the member presiding over the meeting, but within seven days from the date of adjourned meeting.

(6) No business shall be transacted at any adjourned meeting other than the business on the agenda of the adjourned meeting under sub-rule

(3) or sub-rule (4).

(7) No quorum shall be necessary in respect of an adjourned general meeting.

17. Voting in general meeting

(1) All resolutions which are put to vote at the general meeting shall be decided by a majority of the members present and voting unless otherwise required under the Act, these rules or the bye-laws of the multi-state cooperative society. Every society shall provide in its bye-laws the procedure and manner of voting and other matters connected therewith.

(2) In the event of an equality of votes, the Chairperson of the meeting, shall have a second or casting vote.

18. Minutes of the general meeting

Minutes of the proceedings of the general meeting shall be entered in a minutes book kept for the purpose and shall be signed by the Chairperson and Chief Executive of the meeting. The minutes so signed, shall be an evidence of the correct proceedings of that meeting.

19. Procedure for conduct of elections

(1) The election of members of the board shall be conducted by a returning officer appointed by the board in its meeting. The returning officer so appointed shall not be a member or an employee of the society:

Provided, that the Central Registrar shall appoint the returning officer to conduct the election of the National multi-state cooperative societies, multi-state urban cooperative banks, multi-state agricultural processing cooperatives and Railway Employees Credit Societies. The Central Registrar may also appoint returning officer for the conduct of a election of a society if so requested by the board of Directors of such society.

(2) The election of the members of the board referred to in sub-rule (1) shall be conducted by secret ballot in the manner as specified in the schedule attached with these rules.

20. Election of the Office bearers

(1) The election of the office bearers of the board shall be conducted as per the programme given in the election schedule.

(2) The eligibility of the candidates for the election of office bearers shall be subject to the provisions contained in sections 43 and 44 of the Act.

21. Terms and conditions of the chief executive

Where the Central Government or a State Government holds fifty one percent or more equity capital of a multi-state cooperative society, the qualifications and eligibility conditions for the post of Chief Executive, the salaries and allowances, other terms and conditions of service including suspension, removal, pension, gratuity, retirement benefits etc. shall be as approved by the Central Government.

Chapter - 5
Privileges, Properties and Funds of Multi-State Cooperative Societies

The Multi-State Cooperative Societies Rules, 2002

Ozg Registration, Approval & Licensing Consultant

Ozg Center, New Delhi & Mumbai, INDIA

Phone # 098-735-09314, 098-735-23276; 098-715-62842

Email: registration.consultant@ozg.co.in

22. Certification of copies of entries in books

(1) (a) A copy of any entry in a book of a multi-state cooperative society regularly kept in the course of its business shall be certified by the Chief Executive or officer authorised by the bye-laws of the society.

(b) Where an order has been passed under section 123 superseding the board and appointing an administrator by administrator or any other officer authorised by him.

(c) Where an order has been passed under sub-section (1) of section 89 appointing a liquidator of the multi-state cooperative society, by the liquidator.

(2) Every certified copy shall bear the signature of the Chief Executive or any authorised officer and seal of the multi-state cooperative society.

(3) The charges to be levied for the supply of such certified copies shall


be as provided in the bye-laws of such a multi-state cooperative society. In absence of such a provision in the bye-laws of a multi-state cooperative society, a charge of rupees two per folio shall levied.

23. Government aid to multi-state cooperative societies

Subject to the provisions of section 61 of the Act, the Central Government or a State Government may provide aid to any multi-state cooperative society on the terms and conditions mutually agreed upon.

24. Distribution of profit to members

(1) No part of the funds, other than net profits, of a multi-state cooperative society shall be distributed by way of bonus or dividend or otherwise among the members.

(2) Payment of dividend to the members on their paid-up share capital shall be as specified in the bye-laws.

(3) The bye-laws of a multi-state cooperative society may provide for distribution of patronage bonus to its members in consonance with the transactions of a member with the society.

(4) Every multi-state cooperative society may also provide for in their bye-laws the subjects and purposes for which the reserve fund will be utilized.

25. Contribution towards Cooperative Education Fund

(1) Every multi-state cooperative society shall credit a sum calculated at one percent of its net profits every year as contribution to the cooperative education fund maintained by the National Cooperative Union of India Limited, New Delhi. The cooperative education fund shall be administered by a committee constituted by the Central Government for this purpose consisting of the following members –

(i) The President of the National Cooperative Union of India Ltd. New Delhi Chairperson

(ii) The Central Registrar Member

(iii) The Financial adviser to the Department of Agriculture and Cooperation in the Ministry of Agriculture Member

(iv) Two representatives of the multi-state cooperative societies to be nominated by the Central Government for every two years Members


(v) The Director General, National Council for Cooperative Training, New Delhi Member

(vi) The Director, Vaikunth Mehta National Institute of Cooperative Management, Pune Member

(2) No expenditure out of the cooperative education fund shall be incurred without approval of the committee.

(3) The National Cooperative Union of India Limited, shall maintain this fund in a separate account and all income by way of interest or otherwise accruing from contribution towards this fund shall be credited to this fund.

(4) The balance in the fund, constituted under rule 4 of the Multi-State Cooperative Societies (Privileges, Properties and Funds, Accounts, Audit, Winding up and Execution of Decrees, Orders and Decisions) Rules, 1985, at the commencement of these rules shall be construed the fund as if constituted under these rules.

(5) The cooperative education fund shall be utilised for the purposes connected with the cooperative education and training and human resource development for cooperatives. The Committee may undertake the programmes of cooperative education and training and human resource development, through National Cooperative Union of India, National Council for Cooperative Training, contributing members or any other professionally qualified body as the Committee may, decide.

26. Contributory Provident Fund

(1) Every multi-state cooperative society which has in its service ten or more regular employees shall establish a Contributory Provident Fund referred to in sub-section (1) of section 69.

(2) The multi-state cooperative society creating such a fund shall provide for the following in its bye-laws –

(a) Authority to administer the fund.

(b) Amount of contribution to be deducted from the employee's

salary.

(c) Mode of nomination for payment of the amount of the contributory provident fund in case of employee's death.

(d) Purpose for which, the extent to which, and the period after which, advances may be made against the security of such fund and the number of monthly installments in which advance is to be repaid.


(e) Refund of employee's contribution and contribution made by the society.

(f) Maintenance of accounts of such fund.

(3) The amount of contribution that can be deducted from the salary of an employee of the multi-state cooperative society shall not be less than the ceiling provided in the Employee's Provident Fund and Miscellaneous Provisions Act, 1952 (19 of 1952)

(4) The multi-state cooperative society may make such contribution every year to the employee's contributory provident fund as may be approved by the board subject to the maximum ceiling as provided in the Employee's Provident Fund and Miscellaneous Provisions Act, 1952 (19 of 1952).

27. Audit and Accounts

(1) Every multi-state cooperative society shall keep books of account with respect to–

(a) all sums of money received and expended and the matters in respect of which the receipt and expenditure take place;

(c) all sales and purchase of goods;

(d) the assets and liabilities;

(d) in the case of a multi-state cooperative society engaged in production, processing and manufacturing, particulars relating to utilisation of materials or labour or other items of costs as may be specified in the bye-laws of such a society.

(2) The audit of a multi-state cooperative society under sub-section (1) of section 73 shall include, in addition to the matters specified in sub-section (2) of that section the following particulars –

(a) Whether the auditor has obtained all the information and explanations which, to the best of his knowledge and belief are necessary for the purposes of his audit;

(b) Whether in his opinion proper books of accounts as specified in these rules and bye-laws have been kept by the multi-state cooperative society so far as it appears from the examination of those books and proper returns adequate for the purposes of his audit have been received from the branches not visited by him;

(c) Whether the balance-sheet and profit and loss account exhibit a true and fair view of the state of affairs of the multi-state


cooperative society according to best of his information and explanation give to him and as shown by the books of the multi-state cooperative society; and

(d) Whether there has been any material impropriety or irregularity in the expenditure or in the realisation of money due to the multi-state cooperative society;

(e) Whether in case of a cooperative bank, the guidelines issued by the Reserve Bank and National Agriculture and Rural development Bank established under the National Agriculture and rural Development Bank Act, 1981 (61 of 1981) have been adhered to.

(3) The audit report shall also contain schedules with particulars of, –

(a) all transactions which appear to be contrary to the provisions of the Act, the rules or the bye-laws of the multi-state cooperative society;

(b) all transactions which appear to be contrary to the guidelines issued by the Reserve Bank and National Agriculture and Rural Development Bank;

(c) any money belonging to the multi-state cooperative society which appears to the auditor to be band or doubtful of recovery;

(d) the loans given by the multi-state cooperative society to the members of the board;

(e) any violation of guidelines, conditions etc. issued by the Reserve Bank of India or National Agriculture and Rural Development by any cooperative Bank;

(f) any other matters as may be specified by the Central Registrar in this regard.

28. Procedure to be adopted by liquidator

When liquidator has been appointed under sub-section (1) of section 89, the following procedure shall be adopted.

(a) The appointment of the liquidator shall be notified by the Central Registrar in the Official Gazette.

(b) The liquidator shall, as soon as the order of winding up of the multi-state cooperative society takes effect, publish by such means as he may, think proper, a notice, requiring all claims against the multi-state cooperative society, the winding up of


which has been ordered, to be submitted to him within two months of the publication of the notice. All liabilities recorded in the account books of a multi-state cooperative society shall be deemed ipso-fact to have been duly submitted to him under this clause.

(c) The liquidator shall investigate all the claims against the multi-state cooperative society and decide questions of priority arising between claimants.

(d) The liquidator shall recover all sums and other properties to which the multi-state cooperative society is entitled and may institute such suits for that purpose or such suits incidental to liquidation proceedings as he may think proper.

(e) The liquidator may empower any person, by general or special order in writing, to make collections and to grant valid receipts on his behalf.

(f) The liquidator shall, after setting the assets and liabilities of multi-state cooperative society as they stood on the date on which the order of winding up is made, proceed next to determine from time to time the contribution including debts due and costs of liquidation to be made or remaining to be made by each of its members, past members, or by the estates, or nominees, heirs or legal representatives of deceased members or by any officers or former officers, to the assets of the multi-state cooperative society, under clause (b) of sub-section (2) of section 90. Should necessity arise, he may also make a subsidiary order regarding such contributions and such order shall be enforceable in the same manner as the original order.

(g) All funds in the charge of the liquidator shall be deposited in the Post Office Savings Banks or in a cooperative bank or with such other banks as may be approved by the Central Registrar and shall stand in his name.

(h) The Central Registrar shall fix the amount of remuneration, if any, to be paid to the liquidator. The remuneration shall be included in the cost of liquidation, which shall be payable out of the assets of the multi-state cooperative society in priority of all other claims.

(i) The liquidator may call for the meeting of the members of the multi-state cooperative society under liquidation.

(j) The liquidator shall submit to the Central Registrar a quarterly report in such form as the Central Registrar may, specify showing the progress made in liquidation of the multi-state cooperative society.


(k) The liquidator shall keep such books and accounts as may from time to time be specified by the Central Registrar who may at any time cause such books and accounts to be audited.

(l) At the conclusion of the liquidation, the liquidator shall call for a general meeting of the members of the dissolved society at which the liquidator or any other person authorised by him, by special or general order in writing in this behalf, shall summarise, the result of his proceedings and shall take a vote as to the disposal of any surplus funds. The liquidator shall submit his final report to the Central Registrar with a copy of the proceedings of the general meeting referred to above and make over to the Central Registrar all books and registers and accounts etc., belonging to the multi-state cooperative society and all books and accounts relating to the liquidation proceedings kept by him.

(m) If any liability cannot be discharged by the liquidator owing to

the whereabouts of the claimants not being known or for any other cause, the amount covered by such undischarged liability may be deposited in a Cooperative Bank and shall be available for meeting the claims of the person or persons concerned.

(n) A liquidator may, at any time, be removed by the Central Registrar and he shall on such removal be bound to hand over all the property and documents relating to the society under liquidation to such persons as the Central Registrar may direct.

(o) All the books and records of a multi-state cooperative society whose registration has been cancelled and the proceedings of liquidation of a multi-state cooperative society ordered to be wound up may be destroyed by the Central Registrar after the expiry of three years from the date of the order canceling the registration of the multi-state cooperative society.

29. Application of assets of the multi-state cooperative society

The assets of the multi-state cooperative society shall be applied in order of priority as given below for payment of the liabilities–

(1) Pro-rata payment of all outside liabilities.

(2) Pro-rata repayment of loans and deposits of members.

(3) Pro-rata refund of share capital


(4) Pro-rata payment of dividend on the share at the rate not exceeding 6.25 per cent per annum for the period of liquidation.

30. Disputes

(1) For the purposes of sub-section (4) of section 84 of the Act, the Central Registrar may appoint and fix the fee of the arbitrators subject to the provisions of Arbitration and Conciliation Act, 1996.

(2) Save as otherwise provided under this Act, the provisions of the Arbitration and Conciliation Act, 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.

Chapter 6 - Appeals & Review
Privileges, Properties and Funds of Multi-State Cooperative Societies

The Multi-State Cooperative Societies Rules, 2002

Ozg Registration, Approval & Licensing Consultant

Ozg Center, New Delhi & Mumbai, INDIA

Phone # 098-735-09314, 098-735-23276; 098-715-62842

Email: registration.consultant@ozg.co.in

31. Appeals

For the purpose of sub-section (2) of section 99, an appeal against any decision or order shall be made, if the decision or order was made by–

(a) the Central Registrar appointed under sub-section (1) of section 4 of the Act, to the Officer not below the rank of Additional Secretary to the Government of India in the Department of Agriculture and Cooperation as may be decided by the Central Government;

(b) any officer of the Central Government or of a State Government of the rank of Registrar, on whom powers of the Central Registrar have been conferred under sub-section (2) of section 4 of the Act, to the Joint Secretary to the Government of India in the Department of Agriculture and Cooperation, Incharge of Cooperation;

(c) any other officer of the State Government on whom powers of Central Registrar have been conferred under sub-section (2) of section 4 of the Act, to the Chief Director (Cooperation) in the Ministry of Agriculture and Cooperation or any other Officer authorised by the Central Government in this behalf.

32. Procedure regarding appeals

(1) An appeal under sub-section (2) of section 99 shall be either presented in person or sent by registered post to the appellate authority.

(2) The appeal shall be in the form of a memorandum and shall be


accompanied by the original or certified copy of the order appealed from.

(3) Every appeal shall–

(a) specify the name and address of the appellant and also the name and address of the respondent or respondents;

(b) state by whom the order appealed against was made;

(c) set forth concisely and under distinct heads, the grounds of objection to the order appealed against together with a memorandum of evidence;

(d) state precisely the relief which the appellant sought for; and

(e) give the date of order appealed against or;

(f) the memorandum of the appeal inclusive of memorandum of evidence shall be supported by an affidavit duly sworn by the appellant.

(4) Where, an appeal under sub-section (2) of section 99 is preferred after the expiry of sixty days specified in the said sub-section, it shall be accompanied by a petition supported by an affidavit setting forth the facts on which the appellant relies to satisfy the appellate authority that he had sufficient cause for not preferring the appeal within the period mentioned in that sub-section.

(5) On receipt of the appeal, the appellate authority shall as soon as possible examine it and ensure that–

(a) the person presenting the appeal has the locus standi to do so;

(b) it is made within the prescribed time limit; and

(c) it conforms to all the provisions of the Act and rules.

(6) The appellate authority may call upon the appellant to remedy the defects if any, or furnish such additional information as may be necessary, within a period of fifteen days of the receipt of the notice to do so. If the appellant fails to remedy the defects or furnish the additional information called for within the said period, the appeal petition may be dismissed.

(7) The appellate authority may, before passing orders under section 99 obtain from any subordinate officer such further information in regard to the enquiry or the proceedings for the purpose of verifying the regularity of such proceedings or the correctness, legality or propriety of any decision passed or order made therein.


The appellate authority may also call for and obtain from the parties connected with such enquiry or proceedings such information as is necessary with reference to the examination of the records of enquiry or proceedings and the information obtained from the subordinate officer.

(8) The appellate authority shall on the basis of the enquiry conducted and with reference to the records examined, pass such order on the appeal as may deem just and reasonable.

(9) Every order of the appellate authority under sub-section (2) of section 99 shall be in writing and it shall be communicated to the appellant and to such other parties as in the opinion of that authority are likely to be affected by the decision or order and to the officer concerned against whose order was made.

33. Application for review

(1) Every application under section 101 shall be in the form of a memorandum setting forth concisely and under distinct heads the new and important facts which after the exercise of the due diligence, were not then within the knowledge of the applicant or could not be produced by him when the order was made or mistake or errors apparent on the face of the record or order reasons on the basis of which review is sought. It shall be accompanied by a memorandum of evidence.

(2) The application shall be accompanied by the original or a certified copy of the order to which the application relates.

(3) No application for review shall be entertained unless it is accompanied by such additional number of copies as there are parties to the original order

(4) An application for review 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.

(5) The application shall, so far as it may be necessary, be disposed of by the appellant authority in such manner as may be deemed fit:

Provided that no order in review application shall be made unless notice has been given to all interested parties and they have been afforded a reasonable opportunity of being heard.


Chapter 7
Societies which become Multi-State Cooperative Societies Consequent on Re-organisation of States

The Multi-State Cooperative Societies Rules, 2002

Ozg Registration, Approval & Licensing Consultant

Ozg Center, New Delhi & Mumbai, INDIA

Phone # 098-735-09314, 098-735-23276; 098-715-62842

Email: registration.consultant@ozg.co.in

34. Preparation of a scheme for the reconstitution or re-organisation of multi-state cooperative societies

(1) The Central Registrar or the authorised officer, as the case may be, shall prepare a scheme referred to in sub-section (2) of section 103 for the reconstitution or re-organisation of ay multi-state cooperative society rendered as such consequent on the re-organisation of States referred to in sub-section (1) of section 103. The Central Registrar or the authorised officer with the previous approval of the Central Government forward a copy of the scheme to the President or the Chairperson of the multi-state cooperative society with the direction that the scheme be placed before a meeting of the general body of the multi-state cooperative society specially convened for the purpose.

(2) The meeting referred to in sub-rule (1) shall be convened not less than forty days after the date of issue of the notice to the members and the creditors of the multi-state cooperative society in the manner specified in sub-rule (3).

(3) A written notice specifying the date, hour and place of meeting and the business to be transacted there at shall be given to every member and shall be accompanied by a copy of the scheme to be considered at the meeting. The notice to each member and creditor shall,

(i) be delivered or tendered to him in person;

(ii) be sent to him by registered post; or

(iii) be served on him in such other manner as may be specified in the bye-laws of the society.

(4) Notwithstanding anything to the contrary contained in any rule or bye-law governing the multi-state cooperative society, where the Central Registrar or the authorised officer in this behalf is satisfied that the President or Chairperson of the society has failed to convene the meeting of the general body as required under sub-rule (1), the Central Registrar or the authorised officer, as the case may be, shall convene a meeting of the general body of the multi-state cooperative society.


Chapter 8 Payment of fees for inspection of Records

35. Payment of fee for inspection of records

The fees for payment of inspection of records by any other person, other than the member shall be rupee one per folio.


Chapter 9 - Miscellaneous

The Multi-State Cooperative Societies Rules, 2002

Ozg Registration, Approval & Licensing Consultant

Ozg Center, New Delhi & Mumbai, INDIA

Phone # 098-735-09314, 098-735-23276; 098-715-62842

Email: registration.consultant@ozg.co.in


36. Mode of service of summon

(1) Every summon issued under the Act or these rules shall be in writing, shall be authenticated by the sea, if any, of the officer by whom it is issued and shall be signed by such officer or by any person authorised by him in writing in that behalf. It shall require the person summoned to appear before the said officer at a stated time and place, and shall specify whether his attendance is required for the purpose of giving evidence, or to produce a document, or for both purposed, and ay particular document the production of which is required, shall described the summons with reasonable accuracy.

(2) Any person may be summoned to produce a document, without being summoned to give evidence, and any person summoned merely to produce a document shall be deemed to have complied with the summons if he causes such document to be produced, instead of attending personally to produce the same.

(3) The service of summons under the Act or these rules on any person, may be effected in any of the following ways

(a) by giving or tendering it to such person;

or

(b) if such person is not found, by delivering or transmitting at the place where the person or his agent empowered to accept the summons on behalf of the person, actually and voluntarily resides or carries on business or personally works for gain; or

(c) if the address of such person is known to the Central Registrar or other authorised person by sending it to him by registered post acknowledgement due; or

(d) if none of the means aforesaid is available, by affixing it in some conspicuous part of his last known place where actually or voluntarily resides or carries on business or personally works for gain.

(4) Where the serving officer delivers or tenders a copy of the summons to the person personally or his agent on his behalf, he


shall require the signature of the person to whom the copy is so delivered or tendered as an acknowledgement of service endorsed on the original summons.

(5) The serving officer shall in all cases in which the summons have been served under sub-rule (4), endorse or annex, or cause to be endorsed or annexed, on or to the original summons a return stating the time when and the manner in which the summons was served and the name and address of the person, if any, identifying the person served and witnessing the delivery or tender of the summons.

(6) Where the person to be summoned is a public officer or is a servant of a company or a local authority, the officer issuing the summons may, if it appear that the summons may be conveniently so served, send it by registered post acknowledgement due for service on the party to be summoned, to the head of the office in which he is employed together with a copy to be retained by such person.

37. Procedure in execution of decrees, orders and decisions

(1) Any decree-holder requiring the provisions of clause (c) of section 94 to be applied, shall apply to the recovery officer in whose jurisdiction the cause of action arose and shall deposit the necessary costs as fixed by the Central Registrar. If the judgment debtor resides, or the property to be proceeded against is situated, outside the jurisdiction of such recovery officer, the recovery officer shall transfer the application to the recovery officer in whose jurisdiction the judgment debtor resides or the property is situated.

(2) Every such application shall be made in the form specified by the Central Registrar and shall be signed by the decree-holder. The decree-holder may indicate whether he wishes to proceed against the immovable property mortgaged to the decree-holder or other immovable property or to secure the attachment of movable property.

(3) On receipt of such application, the recovery officer shall verity the correctness and genuineness of the particulars set forth in the application with the records, if any, in the office of Central Registrar and prepare a demand notice in writing in duplicate in the form specified by the Central Registrar, setting forth the name of the judgment debtor and amount due and forward it to the Sale Officer.

(4) Unless the decree-holder has expressed a desire that proceedings should be taken in a particular order as laid down in sub-rule (2), execution shall ordinarily be taken in the following manner, namely


(i) movable property of the defaulter shall be first proceeded against, but this shall not preclude the immovable property being proceeded against simultaneously in case of necessity;

(ii) if there is no movable property, or if the sale proceeds of the movable property, or properties attached and sold are insufficient to meet in full the demand of the decree-holder, the immovable property mortgaged to the decree-holder, or other immovable property belonging to the judgment debtor may be proceeded against.


(5) In the attachment and sale of movable property, the following rules shall be observed, namely

(a) the Sale Officer, shall after giving previous notice to the decree-holder, proceed to the village or place where the judgment debtor resides or the property to be distrained is situated and serve a demand notice upon the judgment debtor if he is present. If the amount due together with expenses be not at once paid, the Sale Officer shall make the distress and shall immediately deliver to the judgment debtor a list or inventory of the property distrained and an intimation of place and day and hour at which the distrained property will be brought to sale if the amount due are not previously discharged. If the judgment debtor is absent, the Sale Officer shall serve the demand notice on some adult male member of his family, or on his authorised agent, or when such service cannot be effected, shall affix a copy of the demand notice on some conspicuous part of his residence. He shall then proceed to make the distress and shall fix the list of property attached on the usual place of residence of the judgment debtor, endorsing thereon the place where the property may be lodged or kept and an intimation of the place, day and hour of sale.

(b) After the distress is made, the Sale Officer may arrange for the custody of the property attached with the decree-holder or otherwise. If the Sale Officer requires the decree-holder to undertake the custody of the property he shall be bound to do so and any loss incurred owing to his negligence shall be made good by the decree-holder. If the attached property is live-stock, the decree-holder shall be responsible for providing the necessary food therefor. The Sale Officer may, at the instance of the judgment debtor or of any person claiming an interest in such property, leave it in the village or place where was attached, in the charge of such judgment debtor or person, if he gives a bond in the form specified by the Central Registrar with one or more sufficient sureties for the production of the property as and when called for.


(c) The distress shall be made after sunrise and before sunset and not at any other time.

(d) The distress levied shall not be excessive, that is to say, the property distrained shall be as nearly as possible proportionate to the sum due by the defaulter together with interest and all expenses incidental to the distraint, detention and sale.

(e) If crops or ungathered products of the land belonging to a judgment debtor are attached, the Sale Officer may cause them to be sold when fit for reaping or gathering, or at his option may cause them to be reaped or gathered in due season and stored in proper place until sold. In the latter case, the expense of reaping or gathering and storing such crops or products shall be defrayed by the owner upon his redeeming the property or from the proceeds of the sale in the vent of its being sold.

(f) The Sale Officer shall not work the bullocks or cattle, or make use of the goods or effect distrained, and he shall provide the necessary food for the cattle or livestock, the expense attending which shall be defrayed by the owner upon his redeeming the property or from the proceeds of the sale in the event of its being sold.

(g) It shall be lawful for the Sale Officer to force open any stable, cow house, granary, godown, out-house or other building and he may also enter any dwelling house, the outer door of which may be open and may break open the door of any room in such dwelling house for the purpose of attaching property belonging to a defaulter and lodged therein, provided always that it shall not be lawful for the officer to break open or enter apartment in such dwelling house appropriate for the zenana or residence of women except as hereinafter provided.

(h) Where the Sale Officer may have reason to suppose that the property of a defaulter is lodged within a dwelling house the outer door of which may be shut or within any apartments appropriated to women which by custom or usage are considered private, the Sale Officer shall represent the fact to the officer in charge of the nearest police station. On such representation, the officer-in-charge of the said station shall send a police officer to the spot in the presence of whom the Sale Officer may force open the other door of such dwelling house, like manner as he may break open the door of any room within the house except the zenana. The Sale Officer may also, in the presence of a police officer, after due notice given for the removal of women within a zenana and, after furnishing means for their removal in a suitable manner if they be women of rank who, according to the custom of usage cannot appear in public, enter the zenana apartments for the purpose of distraining the judgment debtor's property, if any, deposited therein, but such property, if found, shall be immediately removed from such apartments after which they shall be left free to the former occupants.

(i) The Sale Officer shall on the day previous to and on the day of sale cause proclamation of the time and place of the intended sale to be made by beat of drum in the village or place in which the judgment debtor resides on two consecutive days previous to the date of sale and on the day of sale prior to the commencement of the sale and in such other place or places as the officer may consider as the officer may consider necessary to give due publicity to the sale. No sale shall take place until after the expiration of the period of fifteen days from the date on which the sale notice has been served or affixed in the manner prescribed in clause (a) of this sub-rule:


Provided that where the property seized is subject to speedy or natural decay, or where the expense of keeping it in custody is likely to exceed its value, the Sale Officer may sell it at any time before the expiry of the said period of fifteen days, unless the amount due is sooner paid.

(j) At the appointed time the property shall be put up in one or more lots, as the Sale Officer may consider advisable and shall be disposed of to the highest bidder:

Provided further that the Sale Officer may, in his discretion, adjourn the sale to a specified date and time recording his reasons for such adjournment. Where a sale is so adjourned for a longer period than seven days, a fresh proclamation under clause (i) shall be made unless the judgment debtor consents to waive it.

(k) The property shall be paid for in cash at the time of sale, or as soon thereafter as the officer holding the sale shall appoint, and the purchaser shall not be permitted to carry away any part of the property until he has paid for it in full. Where the purchaser may fail in payment of purchase money, the property shall be resold.

(l) Where any property which has been attached under these rules has been forcibly or clandestinely removed by any person, the Sale Officer may apply to a civil court having jurisdiction for restoration of such property. Where the court is satisfied about the truth of the facts, as alleged in the application, it may order forthwith such property to be restored to the Sale Officer.


(m) Where prior to the day fixed for sale, the defaulter or any person acting on his behalf or any person claiming an interest in the property attached, pays the full amount due including interest, batta and other costs incurred in attaching the property, the Sale Officer shall cancel the order of attachment and release the property forthwith.

(n) The movable property mentioned as exempt from attachment in the proviso to section 60 of the Code of Civil Procedure, 1908 (5 of 1908), shall not be liable to attachment or sale under these rules.

(6) Where the movable property to be attached is the salary or allowance or wages of a public servant or a servant of a local authority or a firm or a company, the recovery officer may, on receiving a report from the Sale Officer, order that the amount shall, subject to the provisions of section 60 of the Code of Civil Procedure, 1908 (5 of 1908) be with-held from such salary or allowances or wages either in one payment or by monthly installment as the recovery officer may direct and upon receipt of the order, the officer or other person whose duty it is to disburse such salary or allowance or wages shall withhold and remit to the Sale Officer, the amount due under the order or the monthly installment, as the case may be.

(7) (i) Where the property to be attached consists of the share or interest of the defaulter in movable property belonging to him and another as co-owners, the attachment shall be made by a notice to the defaulter, prohibiting him from transferring the share or interest or charging it in any way.

(ii) Where the property to be attached is negotiable instrument not deposited in a court, nor in the custody of a public officer, the attachment shall be made by actual seizure and the instrument shall be brought to the office of the recovery officer ordering the attachment and be held subject to his further orders.

(iii) Where the property to be attached is in the custody of any court or public officer, the attachment shall be made by a notice to such court or officer, requesting that such property and any interest or dividend becoming payable thereon may be held subject to the further orders of the recovery officer issuing the notice:

Provided that where such property is in the custody of a court or recovery officer of another district, any question of title or priority arising between the decree-holder and any other person not being the judgment debtor claiming to be interested in such property by virtue of any assignment, attachment or otherwise shall be determined by such court or recovery officer.


Ozg Registration, Approval & Licensing Consultant

Ozg Center, New Delhi & Mumbai, INDIA

Phone # 098-735-09314, 098-735-23276; 098-715-62842

Email: registration.consultant@ozg.co.in