The Maharashtra Cooperative Societies Act 1960

Chapter: III - MEMBERS AND THEIR RIGHTS AND LIABILITIES

Section 22 to 35

Section 22 - Person who may become member

(1) Subject to the provisions of section 24, no person shall be admitted as a member of a society except the following, that is to say--
(a)an individual, who is competent to contract under the Indian Contract Act, 1872;

(b)a firm, company or any other body corporate constituted under any law for the time being in force, or a society registered under the societies Registration Act, 1860;

(c)a society registered, or deemed to be registered, under this Act;

1(d) the State Government or the Central Government;

(e) a local authority;

(f) as public trust registered under any law for the time being in force for the registration of such trusts;

Provided that, the provisions of clause (a) shall not apply to an individual seeking admission to a society exclusively formed for the benefit of students of a school or college:

Provided further that, subject to such terms and conditions as may be laid down by the State Government by general or special order, a firm or company may be admitted as a member only of society which is a federal or urban society or which conducts or intends to conduct an industrial undertaking:

Provided also that, any firm or company, which is immediately before the commencement of this Act, a member of a society deemed to be registered under this Act,shall have,subject to the other provisions of this Act, the right to continue to be such member on and after such commencement.

Explanation.--For the purpose of this section "an urban society"means a society the business of which mainly falls within the limits of a municipal corporation, municipality, cantonment or notified area committee.

2 (1A) Notwithstanding anything contained in sub-section (1), the State Government may, having regard to the fact that the interest of any person or class of persons conflicts or is likely to conflict with the objects of any society or class or societies, by general or special order, published in the Official Gazette, declare that any person or class of persons engaged in or carrying on any profession, business or employment shall be disqualified from being admitted, or for continuing, as members or shall be eligible for membership only to a limited extent of any specified society or class of societies, so long as such person or persons are engaged in or carry on that profession, business or employment 3 [as the case may be; and the question whether a person is or is not so engaged in or carrying on any profession, business or employment or whether a person belongs or does not belong to such class of persons as declared under this sub-section and has or has not incurred a disqualification under this sub-section shall be decided by the Registrar under section 11].

4 (1B) Notwithstanding anything contained in sub-section (1), where the Registrar has decided under section 11 that a person has incurred a disqualification under subsection(1A), the Registrar or the person not below the rank of District Deputy Registrar of Co-operative Societies, authorised by him in this behalf, may, by order, remove such person from the membership of the society; and such person shall cease to be a member of the society on expiration of a period of one month from the date of receipt of such order by him.

(2) Where a person is refused admission as a member of a society, the decision (with the reasons therefor) shall be communicated to that person within fifteen days of the date of the decision, or within three months 5 [from the date of receipt of the application for admission, whichever is earlier. If the society does not communicate any decision to the applicant within three months from the date of receipt of such application the applicant shall be deemed to have been 6 [admitted] as a member of the society.] 7 [If any question arises whether a person has become a deemed member or otherwise, the same shall be decided by the Registrar after giving a reasonable opportunity of being heard to all the concerned parties.]

Footnote:
1. Clause (d) was substituted for the original by Mah. 27 of 1969, s. 7(a)
2. Sub-section (1A)was inserted,by Mah. 27 of 1969, s. 7(b).
3. This portion was substituted for the words "as the case may be" by Mah. 20 of 1986, s.12(a).
4. Sub-section 1B was inserted, by Mah. 20 of 1986 s. 12(b).
5. These words were substituted for the words "from the date of the application for admission,--whichever,is earlier", by Mah. 27 of 1969, s. 7(c).
6. This word was substituted for the words "refused admission", by Mah. 20 of 1986,s. 12(c).
7. These words were added by Mah. 7 of 1997, s. 3.

Section 23 - Open membership

(1) No society shall, without sufficient cause, refuse admission to membership to any person duly qualified therefor under the provisions of this Act and its by-laws.

1 (1A) Where a society refuse to accept the application from an eligible person for admission as a member, or the payment made by him in respect of membership, such person may tender an application in such form as may be prescribed together with payment in respect of membership, if any, to the Registrar, who shall forward the application and the amount, if any so paid, to the society concerned within thirty days from the date of receipt of such application and the amount; and thereupon if the society fails to communicate any decision to the applicant within sixty days from the date of receipt of such application and the amount by the society, the applicant shall be deemed to have become a member of such society.] 2 [If any question arises whether a person has become a deemed member or otherwise, the same shall be decided by the Registrar after giving a reasonable opportunity of being heard to all the concerned parties.

(2) Any person aggrieved by the decision of a society, refusing him admission to its membership, may appeal to the Registrar. 3 [Every such appeal, as far, as possible, be disposed of by the Registrar within a period of three months from the date of its receipt:
Provided that, where such appeal is not so disposed of within the said period of three months, the Registrar shall record the reasons for the delay.]

(3) The decision of the Registrar in appeal, shall be final and the Registrar shall communicate his decision to the parties within fifteen days from the date thereof.

4 [(4) Without prejudice to the foregoing provisions of this section, in the case of agro-processing societies or any other society for which a definite zone or an area of operation is allotted by the State Government or the Registrar, it shall be obligatory on the part of such society to admit, on an application made to it, every eligible person from that zone or the area of operation, as the case may be, as a member of such society, unless such person is already registered as a member of any other such society, in the same zone or the area of operation.]

Footnote:
1. Sub-section ( 1A) was inserted by Mah. 20 of 1986, s. 13(a).
2. These words were added by Mah. 7 of 1997, s. 3.
3. This portion was added, by Mah. 20 of 1986, s. 13(a).
4. Sub-section 4 was added, by Mah. 20 of 1986, s. 13(c).

Section 24 - Nominal, associate and sympathiser member

(1) Notwithstanding anything contained in section 22, a society may admit any person as a nominal, associate or sympathiser member.

(2) A nominal member or sympathiser member shall not be entitled to any share in any form whatsoever in the profits or assets of the society as such member. A nominal or sympathiser member shall ordinarily not have any of the privileges and rights of a member, but such a member, or an associate member, may, subject to the provisions of sub-section (8) of section 27, have such privileges and rights and be subject to such liabilities of a member, as may be specified in the by-laws of the society.

Section 25 - Cessation of membership

A person shall cease to be a member of a society on his resignation from the membership thereof being accepted, or on the transfer of the whole of his share or interest in the society to another member, or on his death, or removal or expulsion 1 [from the society, or where a firm, company, any other corporate body, society or trust is a member, on its dissolution or ceasing to exist.]

Footnote:
1. These words were sub stituted for the words "from the society", by Mah. 20 of 1986, s. 14.

1 Section 25A - Removal of names of members from membership register

The committee of a society shall remove from the register of its members the name of a person who has ceased to be a member or who stands disqualified by or under the provisions of this Act for being the member or continuing to be the member of a society:
Provided that, if the society does not comply with the requirement of this section, the Registrar shall direct such society to remove the name of such person, and the society shall be bound to comply with such direction.

Footnote:
1. Section 25 A was inserted, by Mah. 20 of 1986, s. 5.

Section 26 - No rights of membership to be exercised till due payments are made

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

Section 27 - Voting powers of members

1(1) Save as otherwise provided in sub-section (2) to (7), both inclusive, no member of any society shall have more than one vote in its affairs; and every right to vote shall be exercised personally and not by proxy:
Provided that, in the case of an equality of votes the Chairman shall have a casting vote;

(2) Where a share of a society is held jointly by more than one person, 2 [the person whose name stands first in the share certificate, if present,shall have the right to vote. But in his absence the person whose name stands second, and in the absence of both, the person whose name stands next, and likewise, in the absence of the preceding persons the person whose name is next on the share certificate, who is present and who is not a minor, shall have the right to vote.]

3 [(3) A society which has invested any part of its funds in the shares of any federal society, may appoint one of its members to vote on its behalf in the affairs of that federal society; and accordingly such member shall have the right to vote on behalf of the society;
Provided that, any new member society of a federal society shall be eligible to vote in the affairs of that federal society only after the completion of the period of three years from the date of its investing any part of its fund in the shares of such federal society:
4 [* * *]

(3A) An individual member of a society shall not be eligible for voting in the affairs of that society for a period of two years from the date of his enrollment as a member of such society.]

(4) A company or any other body corporate constituted under any law for the time being in force which has invested any part of its funds in the shares of a society may appoint anyone of its directors or officers to vote on its behalf in the affairs of such society;and accordingly such director or officer shall have the right to vote on behalf of the company or body corporate.

(5) Where a firm has invested any part of its funds in the shares of a society, any one of its partners 5 [appointed by the firm] shall be entitled to vote in the affairs of the society on behalf of the firm.

(6) A local authority or public trust which has invested any part of its funds in the shares of a society, may appoint any of its members or trustees, to vote on its behalf in the affairs of that society; and accordingly such persons shall have the right to vote on behalf of the local authority or the public trust, as the case may be.

(7) In the case of a federal society, the voting rights of individual members thereof shall be such as may be regulated by the rules made under this Act and by the bye-laws of the society.

(8) No nominal 6 [* *] or sympathiser member shall have the right to vote 7 [and no such member shall be eligible to be a member of a committee or for appointment as a representative of the society on any other society].

8(9) No nominee of the Government or of any financing bank on the committee of any society shall been titled to vote at any election of officers of such committee such as, the President, Vice-President, Chairman, Vice-Chairman, Secretary, Treasurer or any other officer by whatsoever designation called, who holds the office by virtue of his election to that office.

9 [(10) In the case of an agricultural credit society, if a member has taken a loan from the society, such member shall, whenever he is a defaulter in paying two or more consecutive instalments towards repayment of the loan on the due dates, have no right to vote in the affairs of the society:
Provided that, a member shall not be deemed to be a defaulter if he has discharged his obligation to deliver his marketable produce to the marketing or processing society and the value of such produce is not less than the amount of his dues, even if the actual settlement of his dues,either in whole or in part, takes place at a later stage.

(11) The agricultural credit society may issue suitable orders for the purpose of carrying out the provisions of sub-section (10).]

Footnote:
1. Sub-section(I) was substituted for the original byMah. 45of 1983,s. 2(a).
2. These words were substituted for the words,"only the person whose name stands first in the share certificate,shall have the right to vote, byMah. 27of 1969,s. 8(b).
3. Sub-section(3) was substituted by Mah. 41 of 2000,s. 2,(w.e.f.23-8-2000)
4. Sub-section(3) was substituted by Mah. 41 of 2000. Subsequently the second provison to sub-section (3)was substituted by Mah.Ord.No.12of 2001w.e.f.23-4-2001. But this ordinance lapsed as it was not converted into an Act.
5. These words were inserted by Mah. 33of 1963,s. 5.
6. The word "associate" was deleted by Mah. 27of 1969,s. 8(c).
7. These words were added, by Mah. 27of 1969,s. 8(c).
8. Sub-section(9) was substituted by Mah. 7of 1997,s. 5.
9. Sub-sections(10)and (11)were added by Mah. 3of 1974,s. 6.

Section 28 - Restrictions on holding of shares

In any society, 1 [no member,other than the Government, or any other society, or with the previous sanction of the State Government, a Zilla Parishad constituted under the Maharashtra Zilla Parishads and Panchayat Samitis Act, 1961,shall--]
(a)hold more than such portion of the total share capital of the society (in no case exceeding one-fifth thereof) as may be prescribed, or
(b)have or claim any interest in the shares of the society exceeding 2[twenty thousand rupees]:

Provided that the State Government may, by notification in the Official Gazette, specify in respect of any class of societies a higher or lower maximum than one-fifth of the share capital or, as the case may be, a higher or lower amount than 2[twenty thousand rupees].

Footnote:
1. This portion was substituted for the words "no member other than the State Governmentor any other society, shall--" by Mah. 27 of 1969, s. 9.
2. These words were substituted for the words "five thousand rupees" by Mah. 20 of 1986, s. 16.

Section 29 - Restrictions on transfer or charge of share or interest

(1) Subject to the provisions of the last preceding section as to the maximum holding of shares and to any rules made in this behalf, a transfer of, or charge on, the share or interest of a member in the share capital of a society shall be subject to such conditions as may be prescribed.

(2) A member shall not transfer any share held by him or his interest in the capital or property of any society, or any part thereof, unless--
(a)he has held such share or interest for not less than one year;
(b)the transfer is made to a member of the society or to a person whose application for membership has been accepted 1 [by the society, or to a person whose appeal under section23 of the Act has been allowed by the Registrar; or to a person who is deemed to be a member under sub-section (1A) of-section 23.].

(3) Notwithstanding anything contained in sub-sections (1) and (2), where a member is allowed to resign, or is expelled, or ceases to be a member on account of his being disqualified by this Act or by the rules made thereunder or by the by-laws of the society, the society may acquire the share or interest of such member in the share capital by paying for it at the value determined in the manner prescribed provided that the total payment of share capital of a society in any financial year for such purposes does not exceed ten per cent of the paid-up share capital of the society on the last day of the financial year immediately preceding.
Explanation 2 --.[I]-- The right to forfeit the share or interest of any expelled member in the share capital by virtue of any by-laws of the society, shall not be affected by the aforesaid provision.
3 [Explanation II,--In this section, the expression "financial year" means the year ending on the 3 [31st day, of March] or, in the case of any society or class of societies the accounts of which are with the previous sanction of the Registrar balanced on any other day, the year ending on such day.]

(4) Where the State Government is a member of a society, the restrictions contained in this section shall not apply to any transfer made by it of its share or interest in the capital of the society; and that Government may, notwithstanding anything in this Act,withdraw from the society its share capital at any time, after giving to the society notice thereof of not less than three months.

Footnote:
1. This portion was substituted for the words "by the society", by Mah. 20 of 1986, s. 17.
2. The Explanation was re numbered as Explanation I and Explanation II wasadded by Mah. 33 of 1963, s. 6.
3. This portion was substituted for the letters, figures and words "30th June" by Mah. 13 of 1994, s. 3.

Section 30 - Transfer of interest on death of member

(1) On the death of a member of a society, the society shall transfer the share or interest of the deceased member to a person or persons nominated in accordance with the rules, or, if no person has been so nominated to such 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 duly admitted as a member of the society:
Provided further that, nothing in this sub-section or in section 22 shall prevent a minor or a person of unsound mind from acquiring by inheritance or otherwise, any share or interest of 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 members, ascertained in accordance with the rules.

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

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

Section 31 - Share or interest not liable to attachment

The share or interest of a member in the capital of a society, or in the loan-stock issued by a housing society, or in the funds raised by a society from its members by way of savings deposit, shall not be liable to attachment or sale under any decree or order of a Court for or in respect of any debt or liability incurred by the member; and accordingly, neither the Official Assignee under the presidency-towns Insolvency Act, 1909, nor a Receiver under the Provincial Insolvency Act, 1920, nor any such person or authority under any corresponding law for the time being in force, shall be entitled to, or have any claim on, such share or interest.

Section 32 - Rights of members to see books, etc.

(1) Every member of a society shall be entitled to inspect, free of cost, at the society's office during office hours, or any time fixed for the purpose by the society, a copy of the Act, the rules and the by-laws, the last audited annual balance sheet, the profit and loss account, a list of the members of the committee a register of members, the minutes of general meeting, minutes of committee meetings and those portions of the books and records in which his transactions with the society have been recorded.

(2) A society shall furnish to a member, on request in writing and on payment of such fees as may be prescribed therefor, a copy of any of the documents mentioned in the foregoing sub-section within one month from the date of payment of such fees.

See Rules 27 & 30.

1Section 32A - Certain societies to give pass books to members and entries in such book evidence of amount due

(1) A society which gives loans to its members 2[or a society or class of societies which the State Government may notify in the Official Gazette, from time to time,] shall furnish each member with a pass book, which shall contain an account of the transaction with the member, such as, the date of the transaction, the amount of loan advanced, the rate of interest, the repayment made by the member, the amount of the principal and interest due, and such other particulars as may be prescribed. The necessary entries shall be made in the pass book, from time to time, which shall be countersigned by such office-bearer of the society as may be authorised in this behalf by the committee. For this purpose, 3 [the member] shall be bound to present the pass book to such office-bearer, and if the pass book is required to be kept for some time for making the necessary entries, the member shall be granted a receipt therefor, by such office-bearer.

(2) The entries in the pass book duly made shall, until the contrary be proved, be prima facie evidence of the account of transactions of the society with the member.

Footnote:
1. Section 32 A was inserted by Mah. 3 of 1974, s. 7
2. These words were inserted by Mah. 20 of 1986, s. 18(a).
3. These words were substituted for the words "the depositor", by Mah. 20 of 1986, 18(b).

Section 33 - Liability of past member and estate of deceased member

(1) Subject to the provisions of sub-section (2), the liability of a past member, or of the estate of a deceased member, of a society for the debts of the society as they stood,--
(a) in the case of a past member, on the date on which he ceased to be a member and
(b) in the case of a deceased member, on the date of his death, shall continue for a period of two years from such date.

(2) Where a society is ordered to be wound up under any provision" of this Act the liability of a past member or of the estate of a deceased member, who ceased to be a member or died, within two years immediately preceding the date of the order of winding up, shall continue until the entire liquidation proceedings are completed; but such liability shall extend only to the debts of the society as they stood on the date of his ceasing to be a member or death, as the case may be.

Section 34 - Insolvency of members

Notwithstanding anything contained in the Presidency-towns Insolvency Act, 1909, the Provincial Insolvency Act, 1920, or any corresponding law for the time being in force, the dues of a society from a member, in insolvency proceedings against him, shall rank in order of priority next to the dues payable by him to Government or to a local authority.

Section 35 - Expulsion of members

(1) A society may, by resolution passed 1[by a majority of not less than three-fourths] of the members entitled to vote who are present at a general meeting held for the purpose expel a member for acts which are detrimental to the interest or proper working of the society:
Provided that, no resolution shall be valid, unless the member concerned is given opportunity of representing his case to the general body, and no resolution shall be effective unless it is approved by the Registrar.

(2) No member of a society who has been expelled under the foregoing sub-section shall be eligible for re-admission as a member of that society, or for admission as a member of any other society, for a period of one year from the date of such expulsion:
Provided that, the Registrar may, on an application by the society and in special circumstances, sanction the re-admission or admission, within the said period, of any such member as a member of the said society or of any other society, as the case may be.

Footnote:
1. These words were substituted for the words "by three-fourths majority" by Mah. 33 of 1963, s. 7.

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