Chapter 6 - Maharashtra Cooperative Societies Rules 1961

Rule No 57. Prohibition against being interested in contracts etc

(1) No officer of a society shall have any interest, directly or indirectly otherwise than as such Officer;—

(a) in any contract made with or by the society; or
(b) in any property sold or purchased by the society; or
(c) in any other transaction of the society, except as investment made or as loan taken from the society or the provision of residential accommodation by the society to any paid employee of the society.

(2) No officer of the society shall purchase, directly or indirectly, any property of a member of the society sold for the recovery of his dues to the society.

¹ Rule No 57A. Motion of no-confidence against the officers of the society

(1) The requisition to call the special meeting of the committee of a society to consider a motion of no-confldence against the President, Vice-Ptesident, Chairman, ViceChairman, Secretary, Treasurer or other officer of the society, by whatever designation called, who holds office by virtue of his elections to that office, shall be made in Form M-18. The requisition shall be accompanied by;-

(a) the grounds of no-confldence;
(b) the text of the motion of no-confldence to be moved;
(c) the name of the committee members who shall move the motion of non-confidence;
(d) a list of members of the committee specifying their full names, and address who are, for the time being, entitled to sit and vote at any meeting of the committee;
(e) signatures of the members of the committee who are signing the requisition duly attested by the Chief Executive Officer of the society or Special Executive Magistrate or Executive Magistrate or any Gazetted Officer of the Government.

(2) The requisition referred to in sub-rule (1) shall be delivered in person to the Registrar. Such requisition or requisitions shall be delivered in duplicate in each case. The Registrar on ascertaining that the requisition or requisitions as the case may be, have been signed by not less than 1/3rd members of the committee who for the time being are entitled to sit and vote in any meeting of the committee of society;-

(a) receive and acknowledge the requisition under his signature with date and time.

(b) issue notice, within 7 days from the date of receipt of the. requisition, convening, the special meeting for that purpose specifying therein place, date, time, name and designation of the officer who shall be presiding over such meeting, to all the members of the committee, the presiding officer and the Managing Director, General Manager, Manager, Paid Secretary, Group Secretary or such employee of the society, to whom the Registrar has directed to produce minute book of committee meetings of the society. This notice of no-confidence shall also be issued, to the Officer or officers against whom the motion of noconfidence is being moved, and shall be accompanied by the copy of the requisition alongwith enclosures and agenda.

(c) The Registrar shall direct the Managing Director, General Manager, Manager, Paid Secretary, Group Secretary or any other employee to deliver in person the minute book Of the committee meetings on the date, time and place of the meeting, to the Presiding Officer.

(d) The Registrar shall send a notice under certificate of posting, to all the persons concerned. However, he shall serve or cause to be served the notice on the officer or officers against whom the motion of no-confidence is proposed to be moved through the special messenger or the officer or officers, as the case may be, or in his or their absence on any adult member of his or their families at the place of residence. If for some reason it is not possible to serve the notice, the authorised person in this behalf, shall in presence of two witnesses, affix such notice on any conspicuous place of the residence.

(e) copies of this notice shall be displayed on the Notice Board of the Registrar, the Presiding Officer and the society. Such display of the notice on the notice board of the Registrar and the Presiding Officer shall be the conclusive proof that such notice has been served on all concerned.

(3) Notwithstanding anything contained in the bye-laws of the society regarding the procedure for convening and holding meeting and recording of minutes, the procedure adopted by the Registrar, the Presiding Officer and the Authorised Officer under sub-rule (2), shall be deemed to be the proper procedure under the provisions of bye-laws of the society.
If the Registrar deems it necessary, he shall require any Officer of the society to furnish any information to him and it shall be obligatory on the part of such officer to furnish such information. On failure of the officer to furnish the information, the Registrar may get it through any person authorising in that behalf. This failure on part of the officer of the society shall be construed as non-compliance of provisions as contemplated under sub-section (1) of Section 79. However, in case of the officer of the society who holds that office by virtue of his election, including the member of the committee of management, it shall be construed as breach of provisions under sub-section (1) of Section 79 and negligence of performance of duties imposed by the Registrar as contemplated under subsection (1) of Section 78.

(4) The time of the meeting shall be between Office hours of the authorised officer. The meeting shall be held either in the office of the society or at any other place which may, as far as possible, be public place or any other place specified by the District Deputy Registrar.

(5) No other subject, except the motion or motions of no-confidence shall be kept on the agenda.

(6) The Registrar or the officer authorised to preside over the meeting shall,

(a) announce or cause to be announced the commencement of the meeting,

(b) take possession of the minute book of the committee meetings from the officer of the society. However, for some reasons, if it is not possible for him to take possession of the minute book of the committee meetings of the society, at the commencement of the meeting, he shall record proceedings in the register kept for that purpose in his office. The text of the minutes of the meeting recorded in the minute book kept in the office of the Registrar shall be incorporated in the minute book of the society.

(c) record the date, time, place, names of members of the committee present at the commencement of the meeting, in the minute book of the society or kept by him, as the case may be, in his own hand and cause all the members of the committee who are present, to sign it and it shall be obligatory on their part to do so. The signature of the members on the minute book shall be the concrete proof of their attendance.

(d) riot allow any other person to enter the place of meeting except the person or persons appointed to assist him, the officer of the society who has produced the minute book, the officer or officers against whom the motion of no-confidence is moved, the members of the committee who are for the time being entitled to sit and vote in any meeting of the committee, who are present at the commencement of the meeting and police officer or officers if called by him to maintain the law and order.

(e) record or cause to be recorded, the proceedings of the meeting and thereafter allow those members who desire to sign the proceedings. Signature of the members on the minute book shall be the conclusive proof of their attendance.

(f) not allow the discussions on any other subject than the subject on agenda.

(g) declare the motion or motions as rejected and take a note to that effect with reasons, in the minute book under the following circumstances;—

(i) if no member of the committee present;
(ii) none of the members of the committee, who are present refuse to sign the requisition;
(iii) 2/3rd members are not present at the commencement of the meeting (i) 2/3rd is fraction, it shall be rounded to next higher number.

(h)

(i) read or cause to be read the text and grounds of no-confldence motion and allow any of the member, who have signed the requisition to move the motion and to speak in support of the motion.
(ii) allow the member against whom no-confldence motion is moved or any other member on his behalf to defend.

(i) put the motion to vote and declare the results as laid down in sub-section (6) of Section 73ID.

(j) the Presiding Officer shall not speak or give any decision on the merit or otherwise of no-confidence motion.

(k) issue certificate in Form M-19 in favour of the society.

¹ Rule No 58. [Disqualification for membership of committee

(1) No person shall be eligible for appointment, or election or nomination or co-option or being continued as member of the committee or District Loan Committee of State Land Development Bank, if he is in default to any society, in respect of any dues from him either as borrower or is a defaulter within the meaning of Section 73FF or has incurred disqualification under Clauses (ii), (iii), (iv), (v), and (iv) of sub-section (1) of Section 73FF.

(2) When any member incurs disqualification as mentioned in sub-rule (1) the Chief Executive Officer or whatsoever name called, shall communicate, the members, thathe has ceased to be a member of the committee, under certificate of posting. The Chief Executive Officer shall also report alongwith a copy of communication to the Registrar and also affix a copy thereof on the notice board of the society. The publication of such copy of the notice of the receipt of such copy of the notice in the office of the Registrar, shall be the conclusive proof of the fact that the person has duly received the communication. When any member ceased to be a member of the committee, the seat of such member shall be deemed to have fallen vacant from the date of such communication. The society shall not allow such persons to exercise any powers, enjoy any rights and privileges and perform functions as member of the committee, under the Act and the rules and bye-laws made thereunder. If the Chief Executive Officer fails to take action as contemplated above, the Registrar shall after giving an opportunity to the person disqualified, issue communication of cessation of membership of such person from the committee of the society under certificate of posting and also by publishing a copy on the notice board of his office.]

³ Rule No 58A. Bond to be executed by elected Members of Managing Committee

Every elected member of the Managing Committee shall execute a bond in Form M20 within fifteen days of his assuming the office. Such bond shall be executed on the stamp paper as provided under the Bombay Stamp Act, 1958. The expenditure on stamp paper shall be borne by the society. The Chief Executive Officer/Secretary of the society shall receive such bonds and keep them on record of the society and accordingly inform the Registrar within fifteen days from formation of the Committee.]

Rule No 59. First general meeting

(1) Within three months from the date of registration of a society, the Chief Promoter thereof, shall convene the first general meeting of all persons who had joined in the application for registration of the society. Where the Chief Promoter fails to convene the meeting as aforesaid, it shall be convened by any person authorised in that behalf by the Registrar.

(2) At the first general meeting, the following business shall be transacted:-

(i) Election of a president for the meeting;
(ii) Admission of new members;
(iii) receiving a statement of accounts and reporting all transactions entered into by the promoter upto 14 days before the meeting.
(iv) Constitution of a provisional committee until regular elections are held under the by-laws. The provisional committee shall have the same powers and functions as the committee elected in accordance with the by-laws;
(v) Fixing the limit up to which the funds may be borrowed;
(vi) Any other matter which has been specifically mentioned in the by-laws.

Rule No 59A2. [****]

Rule No 59B2. [****]

Rule No 60. General meetings

(1) All general meetings of a society excepting the first general meeting shall be convened by the Secretary or any other officer authorised by and under the by-laws to convene such meetings under intimation to the Registrar, who may attend such meetings or authorise some person to attend such meetings on his behalf. The President of the Society or in his absence the Vice-President or, in the absence of both, a member elected by the members present at the meeting shall preside over the meeting unless the by-laws specify that the President of the meeting elected by the meeting.

(2) No general meeting shall be held or proceeded with unless the number of members required to form a quorum as specified in the by-laws are present.

(3) The Secretary or any other officer convening the meeting shall read out the notice convening the meeting and the agenda for the meeting and then the subjects shall be taken up for consideration in the order in which they are mentioned, in the agenda unless the members present, with the permission of the President, agree to change the order. Unless otherwise specified in the Act, these rules and the by-laws, the resolutions will be passed by a majority of the members present. The President will have a casting vote.

(4) When the members are divided on any resolution, any member may demand a poll. When a poll is demanded, the President shall put the resolution for vote.

(5) Voting may be by show of hands or by ballot as may be decided by the members present at the meeting, unless otherwise specified in the by-laws. Notwithstanding anything contained in the by-laws, election of office bearers of a Society having members share capital in excess of Rs. 10,000, including Government share capital, if any, shall be by ballot.

(6) When voting is to be by ballot, the President shall take necessary steps for the issue of ballot papers and counting of votes.

(7) The result of voting shall be announced by the President.

(8) If all the business in the agenda cannot be transacted on the date on which the general meeting is held, the meeting may be postponed to any other suitable date not later than thirty days from the date of the meeting as may be decided by the members present at the meeting.

(9) The remaining subject or subjects on the agenda shall be taken up for consideration at the postponed meeting.

(10) If the general meeting cannot be held for want of quorum, if shall be adjourned to a later hour on the same day as may have been specified in the notice calling the meeting or to a subsequent date not earlier than seven days and at such adjourned meeting the business on the agenda of the original meeting shall be transacted whether there is a quorum or not.

(11) No resolution regarding expulsion of a member of the society, removal of a member of the committee or amendment of by-laws shall be brought forward in any general meeting, unless dtie notice thereof is given in accordance with the provisions of the Act, these rules and the by-laws of the society.

Rule No 61. Annual statements of accounts including balance sheet, etc

Within forty-five days of the close of every co-operative year, or within such extended period as may be specified by the Registrar, in the case of any society or class of societies, the committee of every society shall prepare annual statements of accounts showing:-

(i) receipts and disbursements during the previous co-operative year;
(ii) the profit and loss account for the year; and
(iii) the balance sheet as at the close of the year.
These statements of accounts shall be open to inspection by any member during office hours at the office of the society and a copy thereof shall be submitted, within fifteen days from the date of preparation, to the auditor appointed by the Registrar for the audit of that society.

Rule No 62. Form for the balance sheet and the profit and loss account

(1) The balance sheet and the profit and loss account to be laid before the annual 'general meeting of a society by the committee shall ordinarily be in Form N :
Provided that it shall be competent for the Registrar to permit a society or class of societies to adopt such other form as he may deem fit.

(2) A copy of the balance sheet and profit and loss account to be presented at the annual general meeting under sub-section (2) of Section 75 and a copy of the report of the committee under sub-section (3) of Section 75 shall be fixed on the notice board of the society at least fourteen days before the date fixed for the annual general meeting.

Rule No 63. Power to call annual and special general meeting

If the annual general meeting of a society is not called in accordance with the provisions of Section 75 or if the Chairman or a majority of the committee of the society fail to call a special general meeting in accordance with the provisions of Section 76, the Registrar may authorise any person subordinate to him or any officer or employee of a federal society to call the annual general meeting or the special general meeting, as the case may be, and such officer or person shall have all the powers and functions of the officer of the society authorised to convene such annual or special general meeting, under its bylaws.

Rule No 64. Procedure for appointment, suspension, and removal of members of the committee and other officers, etc

(1) Notwithstanding anything contained in the by-laws of a society but subject to the provisions of Section 78, the Registrar may ³ [by an order stating the reasons therefor:-]

(a) remove the committee of a society and appoint a new committee in its place consisting of three or more members of the society to manage the affairs of the society; or

(b) remove the committee and appoint one or more administrators, who need not be members of the society, to manage the affairs of the society; or

(2) Before making any order under sub-rule (I), the Registrar shall consult the federal society to which the society is affiliated and give an opportunity to the committee or the member concerned to show cause, within fifteen days from the date of issue of notice, why such an order shall not be made.

(3) The member appointed under clause (c) of sub-rule (1) shall hold office so long as the member in whose place he is appointed would have held office, if the vacancy had not occurred.

(4) Notwithstanding anything contained in the by-laws regarding holding any meeting of the society, the Registrar may, by special or general order specify the procedure for holding meetings of the Committee appointed by him under clause (a) of sub-rule (1).

(5) Immediately after the appointment of a new committee or an administrator or administrators under sub-rule (I), the committee in whose place such appointment is made and officers of the society shall give the new committee or the administrator or administrators, as the case may be, the of the property, documents and accounts of the society .

⁴ Rule No 65. Accounts and books to be kept

(1) Every society shall keep the following accounts and books:-

(1) A register of members including persons nominated under Section 38 in Form T.
(2) A register of shares.
(3) A register of debentures and bonds (where capital is raised by debentures and bonds).
(4) Minute book recording proceedings of general meetings.
(5) Minute book recording proceedings of committee meetings.
(6) Cash book.
(7) General ledger and personal ledger.
(8) Stock register.
(9) Property register.
(10) Register of audit objections and their rectification.
(11) Such other accounts and books as from time to time be specified by the State Government by special-or general order for any society or class of societies.

⁶ [(2) Where the State Government directs by order as provided under subsection (2A) of Section 81 that the cost audit of any society or class of societies shall be conducted, such society or class of societies shall, in addition to the accounts and books required to be kept under sub-rule (i), also maintain such books, records and accounts in such manner as the State Government may specify by general or special order from time to time for the purposes of cost audit.]

⁶ Rule No 66. [Copies of monthly returns to be furnished to Registrar

All Registered Co-operative Societies classified by the Registrar as Central Banks or as Urban Banks shall furnish to the Registrar every month a copy of each of the returns required to be furnished to the Reserve Bank of India under Sections 18, 24 and 27 of the Banking Regulation Act, 1949 (10 of 1949).]

Rule No 67. Registrars power to enforce performance of obligations

(1) In addition to the periodical financial statements referred to in Rule 66, the Registrar may, by special or general order, require any society to furnish to him any other returns in such forms as may be specified by him, on such date or dates or at such interval or intervals as may be specified by him, in the order. The salarie officers of the society shall be responsible for the submission of these returns on' due dates. If there are no salaried officers of the society or if the executive functions are attended to by the Chairman or any other member of the committee in an honorary capacity, the return shall be submitted by the Chairman or such member of the committee.

(2) On failure of the society to furnish any returns on due dates, the Registrar may, after giving due notice to the person or persons responsible for the submission of the same, depute an employee of the Co-operative Department or of the Federal Society to which the society is affiliated to prepare the return or returns and submit it or them to him. The members of the committee and other officers of the society shall furnish to the employee of the Co-operative Department or of the federal society entrusted with the work, all information necessary for preparing the return or returns. The expenses incurred by the Registrar in getting such return or returns prepared shall be borne by the society and shall be recovered from the society under Section 79 as if they were an arrear of land revenue.

⁷ Rule No 67A. Directions of Registrar to the society to make regulations on certain matters

(1) Where, in the course of, or as a result of audit under Section 81, or enquiry under Section 83, or inspections under Section 84 or Section 89A or supervision under Section 89A or visit or administrative inspection of any officer of the Co-operative Department or financial institution, or on the report of federal society or financial institution, or in any other way, or suo moto or otherwise, the Registrar is of the opinion that it is necessary, having regard to financial condition of the society or before after grant of Government financial assistance of any kind directly or indirectly, including Government guarantee or any other financial interest of Government accrue or likely to be accrued to regulate the manner of carrying on trade or business, the Registrar, after making such further enquiry if he deems necessary and after consulting the committee or any officer of the society and after examining the record of the society, shall:-

(i) direct the society to make regulations on.the items specified by him;
(ii) direct the society to make regulations in such manner as he specifies and forward the same to him within three months fom the date of such issue of directions to him, for approval.

(2) The society shall frame the regulations on items specified by the Registrar and also in the manner specified by him, if he has so directed while forwarding regulations and forward the same personally along with copy of resolution within a period of three months from the date of issue of such directives.

(3) On receipt of regulations, the Registrar or the District Deputy Registrar on examination may issue an order approving them or modify, eliminate, delete or add as he deems fit in the interest of the society. The regulations shall be effective from the date of issue of order of approval by the Registrar and the society shall carry on its business in accordance with such regulations from the date of order of approval of such regulations.

(4) If any society fails to submit regulations to the Registrar on any or all the items forwarded by the Registrar or in the manner directed by him, the Registrar shall make the regulations on the items and in the manner if directed by him under sub-section (I) of Section 79AA and issue an order directing the society to carry on its business in accordance with such resolutions from the date of issue of such order. It shall be obligatory on the society to carry on its business and trade in accordance with the regulations so issued.

if:-

(a) (the Committee or any officer of the society fails to attend the consultation, to produce record furnishing the information, attend for satisfying the doubts of Registrar or to carry out any other act or to comply with any of the provisions of sub-rules (1), (2) and (3);

(b) after issue of order in sub-rules (3) and (4) of this rule, if the society is negligent in observance or fails to comply with the regulations, it shall be construed as non-compliance of direction issued by the Registrar under subsection (I) of Section 79, if it relates to clause (a) and non-compliance of directions issued by the Registrar under Section 79AA, if it relates to clause (b) and thereupon the provisions of Section 79 shall be applicable mutatis mutandis. If the committee or elected officer of the society is responsible for noncompliance of provisions of clauses (a) and (b) of this sub-rule,.it shall, in addition to non-compliance of directives under sub-section (I) of Section 79 and Section 79AA, also be construed as negligence in performance of duties imposed on it or upon him by the Act arid the rules made thereunder and willful disobedience of instructions issued by the Registrar as contemplated in subsection (I) of Section 78.]

Rule No 68. Procedure to be adopted for taking possession of books, documents, securities, cash and other properties of society

(1) Where taking possession of books, documents, securities, cash or other properties of a society is considered necessary and where taking of such possession is resisted or obstructed, the Registar, the Liquidator or any other person entitled to the same may take or cause to be taken order for seizing the books, documents, securities, cash or other properties of the society, as the case may be, in the manner provided in Section 80.

(2) Any person appointed by the Registrar as a Liquidator of a society or any person authorised by the Registrar to audit the accounts of a society under Section 81 or any person authorised by the Registrar to hold an inquiry into the constitution, working and financial conditions of a society under Section 83 or any person authorised by the Registrar to inspect the books of a society under Section 84 shall, in cases where the misappropriation of funds, breach of trust or fraud has been committed or where it is suspected or apprehended that the books, documents, securities, cash or other properties of a society are likely to be tampered with or destroyed or removed, and where taking of possession of such books, docurnents, securities, cash or other properties is considered necessary, shall follow the same procedure, with the previous permission of the Registrar, as is laid down in Section 80 for the purposes of obtaining such possession.

The Maharashtra Cooperative Societies Rule 1961

Chapter VI - Management of Societies