The Maharashtra Cooperative Societies Act 1960

Chapter: VI - PROPERTY AND FUNDS OF SOCIETIES

Section 64 to 71A

Section 64 - Funds not to be divided

No part of the funds, other than 1 [the dividend equilisation or bonus equalisation funds as may be prescribed or] the net profits of a society, shall be paid by way of bonus or dividend, or otherwise distributed among its members:
Provided that, a member may be paid remuneration on such scale as may be laid down by the bye-laws, for services rendered by him to the society.

Footnote:
1. These words were inserted by Mah. 33 of 1963, s. 12.

1 Section 65 - Ascertainment and appropriation of profits

2 (1) A society shall construct its relevant annual financial statements and arrive at its consequent net profit or loss in the manner prescribed.

(2) A society may appropriate 3 [its net profits] to the reserve fund or any other fund to payment of dividends to members on their shares 4 [* * * *] to the payment of bonus on the basis of support received from members and persons who are not members to its business, to payment of honoraria and towards any other purpose which may be specified in the rules or bye-laws:
Provided that no part of the profits shall be appropriated except with the approval of the annual general meeting and in conformity with the Act, rules and bye-laws.

Footnote:
1. This marginal note was substituted,by Mah. 20 of 1986, s. 22(b).
2. Sub-section (1) was substituted by Mah. 20 of 1986, s. 22(a).
3. These words were substituted for the words "its profits" by Mah. 33 of 1963, s. 13(b).
4. The portion beginning with the words "to the contribution" and ending with the words"by the State Government" was deleted by Mah. 27 of 1969, 2. 10(b).

Section 66 - Reserve fund

(1) Every society which does, or can, derive a profit from its transactions shall maintain a reserve fund.

(2)1 [Every society shall carry at least one-fourth of the net profits each year to the reserve fund;] and 2 [such reserve fund may, subject to the rules made in this behalf, if any, be used] in the business of the society or may, subject to the provisions of section 70, be invested, as the State Government may by general or special order direct, or may, with the previous sanction of the State Government, be used in part for some public purpose likely to promote the objects of this Act, or for some such purpose of the State, or of local interest:
3 [Provided that, the Registrar may, having regard to the financial position of any society or class of societies, fix the contribution to be made to the reserve fund under this subsection at a lower rate, but not lower than one-tenth of the net profits of the society or societies concerned.)

Footnote:
1. These words were sub stituted for the portion beginning with "In the case of and ending with "to the reserve fund", by Mah. 33 of 1963, s. 14(a).
2. These words were sub stituted for the words "such reserve fund may be used" by Mah. 3 of 1974, s. 10.
3. This provison was added by Mah. 33 of 1963, s. 14(b).

1 Section 67 - Restrictions on dividend

No society shall pay divided to its members at a rate exceeding 2 [15 per cent except with the prior sanction of the Registrar.]

Footnote:
1. Section 67 was substitute dby Mah. 20 of 1986, s. 23.
2. This portion was substituted by Mah. 13 of 1994, s. 4.

1 Section 68 - Contribution to education fund of the State federal society

(1)Every society shall contribute annually towards the education fund of the State federal society which may be notified in this behalf by the State Government at such rate as may be prescribed, and different rates may be prescribed for different societies or classes of societies depending on their financial condition.

2 [* * * * * *]

(2) Every society shall pay its contributions to the said fund 3 [within three months after the close of the co-operative year.] Any officer wilfully failing to comply with the requirement of this section, shall be personally liable for making good the amount to the federal society notified as aforesaid.]

4 (3) Where any society fails to pay the contribution within the period specified in subsection (2), the amount of contribution due shall be recoverable as an arrear of land revenue and on the State Federal Society making a report of such failure to the Registrar, the Registrar shall, after making such inquiry as he deems fit,grant a certificate for recovery of the amount due as an arrear of land revenue.

Footnote:
1. Section 68 was substituted for the original by Mah. 27 of 1969, s. 11.
2. The provison was deletedby Mah. 3 of 1974, s. 11
3. These words were substituted for the words "within two months from the date on which its accounts areadopted by the general body of members" by Mah. 20 of 1986, s. 24 (a).
4. This sub-section was added, by Mah. 20 of 1986, s. 24(b).

Section 69 - Contribution to public purposes

After providing for the reserve fund as provided in section 66, and for the educational funds as provided in section 68 a society may set aside a sum not exceeding twenty per cent of its net profits, and utilise, with the approval of such federal society as may be notified by the State Government in this behalf from time to time, the whole or part of such sum in contributing to any co-operative purpose, or to any charitable purpose within the meaning of section 2 of the Charitable Endowments Act, 1890, or to any other public purpose.

1Section 69A - Contribution of Co-operative State Cadre of Secretaries of certain societies and establishment of Employment such Cadre

(1) There shall be constituted a Co-operative State Cadre of Secretaries of primary agricultural credit societies, multipurpose co-operative societies and service co-operative and such other classes of societies as may be prescribed in this behalf (hereinafter in this section referred to as "the Co-operative State Cadre"), consisting of persons recruited for this purpose by the Central Societies notified in this behalf by the State Government. The number of persons to be recruited and their conditions of service shall be determined by the Central Societies in accordance with 2 [such general of special guidelines, if any,] as may be issued by the State Government, from time to time.

(2) A Central Society may, from time to time, depute any person appointed by it to that Cadre to work under any society referred to in sub-section (1), as it may consider necessary. Where any such person is posted to work under any society, his services shall be taken over by the society on such post, for such period and on such other terms and conditions, as the Central Society may determine, but the person so posted shall draw his salary and allowances from the Fund established under 3 [Sub-section (3)].

4[(2A) The immediate initial supervisory control on the person appointed to the cadre and deputed or posted to work as secretary under each of the societies referred to in subsection (1) shall be with the Taluka Supervision Society consisting of the societies, in each respective Taluka to which such persons are deputed, as members thereof and registered for the purpose. The Taluka Supervision Society, shall exercise such powers and discharge such functions or perform such duties as may be conferred or imposed on it by the bye-laws of such society.

(3) An Apex society notified in this behalf by the State Government shall establish a Fund to be called "the Co-operative State Cadre Employment Fund," which, when established, shall be deemed to have been established with effect from the 1st day of July 1973. It shall be utilized for meeting the expenses on the salaries, allowances and other emoluments to be paid to the persons appointed to the Co-operative State Cadre and the expenditure relating to the Cadre.

5 [(4) (a) Every society or class or classes of societies, which in the opinion of the State Government, derive any benefit, directly or indirectly, from the service of any Secretary belonging to the Co-operative State Cadre of Secretaries and
(b) Every other body corporate carrying on any trade, business or industry or class or classes of such corporate bodies, which in the opinion of the State Government, derive such benefit as aforesaid;
and which are notified by the State Government in this behalf, from time to time, by general or special order, shall, with effect from the 1st day of July 1977, contribute annually to the said Fund, at such rate and in such manner as may be prescribed, and different rates may be prescribed for different societies or other corporate bodies or class or classes of societies or class or classes of other corporate bodies. In determining the rate or rates of contribution, the State Government shall take into consideration the expenditure referred to in sub-section (3), the services likely to be rendered and the financial condition of the societies or other bodies concerned.
Explanation. -- Notwithstanding anything contained in any law for the time being in force, for the purpose of levy and collection of the contribution to the said Fund by any other corporate body to which this section applies, such corporate body shall be deemed to be a society governed by this Act.]

(5) Where there is a failure to comply with the requirements of the last preceding subsection, the Registrar may serve a demand notice on the society concerned to pay the contribution within two months from the date of demand. Such demand shall be a charge on the income of the society. If the contribution is not paid within the period aforesaid, the Registrar may direct any bank or person having custody of the funds of the society to pay the amount of the contribution immediately, and such Bank or person shall comply with the orders of the Registrar. Every payment made pursuant to such direction shall be a sufficient discharge to such Bank or person from all liability to the society in respect of any sum so paid by it or him out of the moneys of the society in his custody.

(6) The State Government may make rules regulating all matters connected with or ancillary to the custody and maintenance of, the payment of moneys into and the expenditure and withdrawal of moneys from, the said Fund.]

Footnote:
1. Section 69A was inserted by Mah. 36 of 1975, s. 3.
2. These words were substituted for the words "the general or special orders" by Mah. 5 of 1990, s. 2(a).
3. Substituted for the words "the next succeeding sub-section" by Mah. 5 of 90, s. 2(b)
4. Sub-section (2A) was inserted by Mah. 5 of 1990, s. 2(c).
5. Sub-section (4) was substituted by Mah. 30 of 1978, s. 3.

Section 70 - Investment of funds

A society shall invest or deposit its funds in one or more of the following:--
(a)in a Central Bankor the State Co-operative Bank;

(b)in any of the securities specified in section 20 of the Indian Trusts Act,1882;

1(c) in the shares, or security bonds, or debentures, issued by any other society with limited liability and having the same classification to which it belongs:
Provided that, no society shall invest more than such proportion of its paid up share capital as may be prescribed:
Provided further that, the provisions of this clause shall not apply to any investment made by any agricultural credit society in any processing society based on agricultural produce.

(d) 2 [in any co-operative bank (other than those referred to in clause (a) of this section) or banking company,] approved for this purpose by the Registrar, and on such conditions as the Registrar may from time to time impose;

(e) in any other permitted by the rules, or by general or special order of the State Government.

Footnote:
1. Clause (c) was substituted for the original by Mah. 20of 1986,s. 25.
2. These words were substituted for the words "in any banking company" by Mah. 33of 1963,s. 15.

Section 71 - Employees' provident fund

(1) Any society may establish for its employees a provident fund, into which shall be paid the contributions made by its employees and by the society. Such provident fund shall not be used in the business of the society, nor shall it form part of the assets of the society; but shall be invested under the provisions of the last preceding section, and shall be administered in the manner prescribed.

(2) Notwithstanding anything contained in the foregoing sub-section, a provident fund established by a society to which the Employees' Provident Funds Act, 1952 is applicable, shall be governed by that Act.

Section 71A - Funds not to be utilised for certain proceedings filed or taken by or against officers in personal capacities

1(1) No expenditure from the funds of a society shall be incurred for the purpose of defraying the costs of any proceedings filed or taken by or against any officer of the society in his personal capacity under sections 78, 96 or 144T. If any question arises whether any expenditure can be so incurred or not, such question shall be referred to and decided by the Registrar, and his decision shall be final.

2 [(2) If any person incurs expenditure in violation of sub-section (1), the Registrar shall direct the person to repay the amount to the society within one month and where such person fails to repay the amount as directed, such amount shall, on a certificate issued by the Registrar, be recoverable as arrears of land revenue.

(3) The person against whom action is taken by the Registrar under sub-section (2) shall be disqualified to continue to be the officer of any society or to be officer of any society at any next election including any next by-election held immediately after the expiration of a period of one month during which such person has failed to pay the amount referred to in sub-section (2).]

Footnote:
1. Section 71-A was inserted by Mah. 3 of 1974, s. 12.
2. Section 71-A was renumbered as sub-section (1) of that section and sub-section (2) and (3) were added by Mah. 20 of 1986, s. 26.

Search Maharashtra Cooperative Societies Act related term/topic/section here!
Disclaimer: We have converted the Cooperative Housing Society bye-laws, Maharashtra Cooperative Societies Act and Maharashtra Cooperative Societies Rules in web format so that the readers can quickly search the relevant section / bye-law / rule no. We are trying to update it as much as possible. In the event you notice any discrepancy do message us on our twitter account @mysocietyclub with the page link.

Call us now on +91 9019830840 to get best offer!