The ARUNACHAL PRADESH COOPERATIVE SOCIETIES ACT

1 APCS ACT 1978 THE ARUNACHAL PRADESH CO-OPERATIVE SOCIETIES ACT, 1978 (Act No. 3 of 1979) (Received the assent of the Lt.Governor on 30th June, 1979) AN ACT To provide for the proper management of the Co-operative movement in the State of Arunachal Pradesh. WHEREAS with a view to providing for the orderly development of the Cooperative movement in the State of Arunachal Pradesh in accordance with the relevant directive principles of state policy enunciated in the Constitution of India, it is expedient to frame adequate legislation relating to co-operative societies in that territory ; it is hereby enacted by the Legislative Assembly of Arunachal Pradesh in the Twenty-ninth Year of the Republic of India as follows : CHAPTER – I Preliminary 1. (1) ThisAct may be called theArunachal Pradesh Cooperative Societies Short title, Act, 1978. extent and commence- (2) It extends to the whole of the State ofArunachal Pradesh. ment. (3) It shall come into force on such date as the Government ofArunachal Pradesh may by notification in the Official Gazette, appoint. 2. In thisAct, unless the context otherwise requires : Definitions. (1) “Agricultural Marketing Society” means a society :- (a) The object of which is the marketing of agricultural produce and the supply of implements and other requisites for agricultural production, and (b) Not less than three-fourth of the members of which are agriculturist or societies formed by agriculturist ; (2) “ Arbitrator” means a person appointed under this Act, to decide disputes referred to him by the Registrar and includes the Registrar’s nominees or Board of nominees ; (3) “Apex Bank” means the Arunachal Pradesh State Cooperative Apex Bank Limited ; (4) “Auditor” means a person appointed by the Registrar of by a society to audit the accounts of the society ; (5) “Bonus” means payment made in cash or kind out of the profits of a society to a member, or to a person who is not a member, on the 2 APCS ACT 1978 basis of his contribution (including any contribution in the form of labour or service) to the business of the society. And in the case of a farming society, on the basis both of such contribution and also the value or income or, as the case may be, the area of the lands of the members brought together for joint cultivation, as may be decided by the society ; (6) “Bye-laws” means by-laws registered under this Act and for the time being in force, and includes registered amendment of such bye-laws ; (7) “Central Bank” means a Cooperative Bank, the objects of which include the creation of fund to be loaned to other societies ; (8) “Committee” means the committee of management, or other directing body, to which the management of the affairs of a society is entrusted ; 1 of 1956 (9) “Company” means a company as defined in the company’s Act,1956 and includes a Banking Company and also any board, corporation or other corporate body constituted or established by any Central, or State Act for the purpose of the development of any industry ; (10) “ Consumers Society” means a society the object of which is - (a) The procurement, production or processing and distribution of goods to, or the performance of other services for, its members as also other customers, and (b) The distribution among its members and customers, in the proportion prescribed by rules or by the bye-laws of the society of the profits accruing from such procurement, production or processing and distribution ; X of 1949 (11) “Co-operative bank” means society registered under this Act and doing the business of Banking as defined in clause (b) of sub-section (1) of section 5 of the Banking Companies Act, 1949 ; (12) “Cooperative year” means the 12 months period beginning on 1st April and ending on 31st March. (13) “Dividend” means the amount paid, out of the profits of a society, to a member in proportion to the shares held by him ; (14) “farming society” means a society in which the object of increasing agricultural production, employment and income and the better utilization of resources, land are brought together and jointly cultivated by all the members, such lands - (a) being owned by or leased to the members (or some of them), or (b) coming in possession of the society in any other manner whatsoever ; 3 APCS ACT 1978 (15) “federal society” means by a society - (a) Not less than five members of which are themselves societies, and (b) In which the voting rights are so regulated that the members which are societies have not less than four-fifth of the total number of votes in the general meeting of such society ; (16) “firm” means a firm registered under the Indian PartnershipAct,1932; (17) “general society” means a society not falling in any of the class of IX of 1932 societies defined by other clauses of this section ; (18) “Government” means the Government of Arunachal Pradesh ; (19) “Housing society” means a society the object of which is providing its members with dwelling houses ; (20) “Liquidator” means a person appointed as liquidator under the Act ; (21) “ Local authority” includes a school board and an agricultural produce market committee constituted by or under any law for the time being in force ; (22) (a) “member” means a person joining in an application for the registration of a cooperative society which is subsequently registered or a person duly admitted to membership of a society after registration, and includes a nominal, associate or sympathizer member ; (b) ”associate member” means a member who holds jointly a share of a society with others, but whose name does not stand first in the share certificate ; (c) “nominal member” means a person admitted to membership as such after registration in accordance with the bye-laws ; (d) ”sympathizer member” means a person who sympathizes with the aims and objects of the society and who is admitted by the society as such member ; (23) “officer” means a person elected or appointed by a society to any office of such society according to its bye-laws; and includes a Chairman, Vice-Chairman, President, Vice-President, Managing Director, Manager, Secretary, Treasurer, member of the committee, and any other person elected or appointed under this Act, the rules or the bye-laws, to give directions in regard to the business of such society ; (24) “Official Gazette” means the Arunachal Pradesh Gazette ; (25) “Prescribed” means prescribed by rules ; 4 APCS ACT 1978 (26) “Processing society” means a society the object of which is the processing of goods ; (27) “Producers society” means a society the object of which is the production and disposal of goods or the collective disposal of the Labour of the members thereof ; (28) “Registrar” means, in relation to the multi-State Co-operative Societies, the Central Registrar appointed by the Central Government and in relation to State Co-operative Societies, the Registrar appointed by the State Government under the law made by the Legislature of the State ; (29) “resource society” means a society the object of which is the obtaining for its members of credit, goods or services required by them ; (30) “rules” means rules made under this Act ; (31) “Co-operative Society” means a society registered or deemed to be registered under any law relating to Co-operative Societies for the time being in force in any State ; (32) “ society with limited liability” means a society having the liability of its members limited by its bye-laws ; (33) “society with unlimited liability” means a society the members of which are in the event of its being wound up, jointly and severally liable for and in respect of its obligations and to contribute to any deficiency in the assets of the society ; (34) “working capital” means funds at the disposal of a society inclusive of paid up share capital, funds build out of profits, and money raised by borrowing and by other means. (35) “Authorized person” means a person referred to as such in article 243ZQ of the Constitution of India. (36) “ Board” means the Board of Directors of the governing body of a Co-operative Society, by whatever name called, to which the direction and control of the management of the affairs of a Society is entrusted to. (37) “Multi-State Co-operative Society” means a Society with objects not confined to one State and registered or deemed to be registered under any law for the time being in force relating to such Co-operatives. 5 APCS ACT 1978 (38) “Office bearer” means the President, Vice-President, Chairman, Vice- Chairman, Secretary or Treasurer of a Co-operative Society and includes any other person to be elected by the Board of any Co-operative Society. (39) “StateAct” means theArunachal Pradesh Co-operative Societies Act, 1978 (Act No.3 of 1979) or any other related laws made by the Legislature of the State. (40) “State level Co-operative Society” means a Co-operative Society having its area of operation extending to the whole of the State and defined as such in any other law made by the Legislature of the State”. CHAPTER – II Registration 3. The Government may appoint a person to be the Registrar of Cooperative Registrar. Societies for the State; and may appoint one or more persons to assist such Registrar, and may, by general or special order, confer on and such person or persons all or any of the powers of the Registrar under this Act. The person or persons so appointed to assist the Registrar and on whom any powers of the Registrar are conferred, shall work under the general guidance, superintendence and control of the Registrar. 4. A society, which has as its objects are promotion of the economic interest Societies which may be or general welfare of its members, or of the public, in accordance with registered. cooperative principles, or a society established with the object of facilitating the operations of any such society, may be registered under this Act ; Provided that no society shall be registered if it is likely to be economically unsound, or the registration of which may have an adverse effect on development of the cooperative movement. 5. A society may be registered with limited or unlimited liability. Registration with limited or unlimited liability. 6. (1) No society, other than a federal society, shall be registered under Conditions of this Act, unless it consists of at least ten persons (each of such registration. persons being a member of a different family), who are qualified to be members under this Act, and who reside in the area of operation of the society. 6 APCS ACT 1978 No society shall be registered unless 80% of its members are bonafide Tribals of Arunachal Pradesh holding minimum 51% of the share capital of the society. (2) No society with unlimited liability shall be registered unless all persons forming the society reside in the same town or village, or in the same group of village. (3) No federal society shall be registered unless it has at least five societies as its members. (4) Nothing in thisAct, shall be deemed to affect the registration of any society made before the commencement of this Act. (5) The word “limited” or “unlimited” shall be the last word in the name of every society with limited or unlimited liability, as the case may be, which is registered or deemed to be registered under this Act. Explanation – For the purpose of this section and section 8, the expression “member of a family” means a wife, husband, father, mother, grand-father, grand-mother, step-father, step-mother, son, daughter, step-son, step-daughter, grand-son, grand-daughter, brother, sister, half-brother, half-sister and wife of brother of half-brother. Power to 7. Notwithstanding anything contained in thisAct the Government may, by exempt special order in each case, exempt, subject to such conditions, if any, societies from as it may impose, any society from any of the requirements of this Act conditions as as to registration. toregistration. Application for 8. (1) For the purpose of registration, an application shall be made to the registration. Registrar in the prescribed form, and shall be accompanied by four copies of the proposed bye-laws of the society. The person by whom or on whose behalf, such application is made shall furnish such information in regard to the society, as the Registrar may require. (2) The application shall be signed – (a) in the case of a society, other than a federal society, by atleast ten persons (each of such persons being a member of a family), who are qualified under this Act, and (b) in the case of a federal society, by at least five societies. No signature to an application on behalf of a society shall be valid, unless the person signing is a member of the committee of such a society, and is authorized by the committee by resolution to sign on its behalf the application for registration of society and its bye-laws, and a copy of such resolution is appended to the application. 7 APCS ACT 1978 9. (1) If the Registrar is satisfied that a proposed society has complied with Registration. the provisions of this Act and the rules, and that its proposed bye- laws are not contrary to this Act or to the rules, he may, within six months from the date of receipt of the application register the society and its bye-laws. (2) If the Registrar is unable to dispose of an application for registration within the period mentioned in the foregoing sub-section, he shall make a report to the Government stating therein the reasons therefore; and he shall thereafter act in accordance with such directions as may be issued to him by the Government. (3) Where the Registrar refuses to register a proposed society, he shall forthwith communicate his decision, with the reasons therefore, to the person making the application and if there be more than one to the person who has signed first thereon. (4) The Registrar shall maintain a register of all societies registered or deemed to be registered under this Act. 10. A certificate of registration, signed by the Registrar, shall be conclusive Evidence of evidence that the society therein mentioned is duly registered unless it registration. is proved that the registration of the society has been canceled. 11. When, for the purpose of the formation, or registration or continuance, of Power of a society, any question arises whether a person is an agriculturist or not Registrar to or whether any person resides in the area of operation of the society or decide questions. not, such question shall be decided by the Registrar. 12. (1) The Registrar shall classify all societies into one or other classes of Classification societies defined in section 2, and also into such sub-classes thereof, of societies. as may be prescribed by rules. (2) The Registrar may for reasons to be recorded in writing alter the classification of a society from one class of society to another, or from one sub-class thereof to another and may, in the public interest and subject to such terms and conditions as he may think fit to impose allow and society so classified, to undertake the activities of a society belonging to another class. (3) A list of all societies so classified shall be published by the Registrar every three years in such manner as the Government may, from time to time, direct. 13. (1) No amendment of the bye-laws of the society shall be valid until Amendment registered under this Act. For the purpose of registration of an of bye-laws of amendment of the bye-laws, a copy of the amendment passed in society. the manner prescribed, at a general meeting of the society shall be forwarded to the Registrar. 8 APCS ACT 1978 (2) When the Registrar registers an amendment of the bye-laws of a society, he shall issue to the society a copy of the amendment certified by him, which shall be conclusive evidence that the same is duly registered. (3) Where the Registrar refuses to register an amendment of the bye- laws of a society, he shall communicate the order of refusal, together with his reasons therefore the society. Power to 14. (1) If it appears to the Registrar that an amendment of the bye-laws of direct a society is necessary or desirable in the interest of such society, amendment of he may call upon the society, in the manner prescribed, to make bye-laws. the amendment within such time as he may specify. (2) If the society fails to make the amendment within the time specified the Registrar may, after giving the society an opportunity of being heard and after consulting such federal society as may be notified by the Government, register such amendment and issue to the society a copy of such amendment, certified by him. With effect from the date of the registration of the amendment in the manner aforesaid, the bye-laws shall be deemed to have been duly amended accordingly ; and the bye-laws as amended shall, subject to appeal, if any, be binding on the society and its members. Change of 15. (1) A society may, by resolution passed at a general meeting, and with name. the approval of the Registrar, changes its name; but such change shall not affect any right or obligation of the society, or any of its members, or part members, or deceased members; and any legal proceedings pending before any person, authority or court may be continued by or against the society, under its new name. (2) Where a society changes its name, the Registrar shall enter the new name in its place in the register of societies, and shall also amend the certificate of registration accordingly. Change of 16. (1) Subject to the provisions of thisAct and the Rules, a society may liability. by amendment of its bye-laws, change the form of extent of its liability. (2) When a society has passed a resolution to change the form of extent of its liability, it shall give notice thereof in writing to all its members and creditors and, notwithstanding anything in any bye- law or contract to the contrary, any member or creditor shall during a period of one month from the date of service of such notice upon him have the option of withdrawing his shares, deposits or loans. 9 APCS ACT 1978 (3) Any member of creditor who does not exercise his option within the period specified in sub-section (2), shall be deemed to have assented to the change. (4) An amendment of bye-laws of a society, changing the form or event of its liability, shall not be registered or take effect until, either – (a) all members and creditors have assented, or deemed to have assented, thereto as aforesaid; or (b) all claims of members and creditors who exercise the option, given by sub-section (2), within the period specified therein, have been met in full or otherwise satisfied. 17. (1) A society may, with the previous approval of the Registrar, by resolution Amalgamation, passed by two-thirds majority of the members present and voting at transfer, a special general meeting held for the purpose, decide- division or conversion of (a) To amalgamate with another society ; societies. (b) To transfer its assets and liabilities, in whole or in part to any other society ; (c) to divide itself in to two or more societies ; or (d) to convert itself into another class of society ; Provided that when such amalgamation, transfer division or conversion, aforesaid, involves, a transfer of the liabilities of a society to any other society, no order on the resolution shall be passed by the Registrar, unless he is satisfied that- (i) the society, after passing such resolution has given notice thereof in such manner as may be prescribed to all its members creditors and other persons whose interest are likely to be affected (hereinafter, in this section referred to as “other interested persons”) giving them the option, to be exercised within one month from the date of such notice of becoming members of any of the new societies, or containing their membership in the amalgamated or converted society, or demanding payment of their share or interest or dues, as the case may be. (ii) all the members and creditors and other interested persons, have assented thereto, by virtue of any member or creditor, or any other interested person failing to exercise his option within the specified period in clause (i) aforesaid, and 10 APCS ACT 1978 (iii) all claims of members and creditors and other interested persons, who exercise the option within the period specified have been met in full or otherwise satisfied. IV of 1882 (2) Notwithstanding anything contained in theTransfer of propertyAct, XVI of 1908. 1882, or the Indian Registration Act, 1908, in the event of division or conversion, the registration of the new societies or, as the case may be, of the converted society, and in the event of amalgamation on the amalgamation, the resolution of the societies concerned with amalgamation, shall in each case be sufficient conveyance to vest the assets and liabilities of the original society or amalgamating societies in the new societies or converted or amalgamated society, as the case may be, (3) The amalgamation of societies or division or conversion of a society shall not affect any rights or obligations of the societies so amalgamated, or society so divided or converted, or render defective any legal proceedings which might have been continued or commenced by or against the societies which have been amalgamated, or divided or divided or converted ; and accordingly such legal proceedings may be continued or commenced by or against the amalgamated society, or, as the case may be, the converted society, or the new societies. (4) Where two or more societies have been amalgamated or a society has been divided or converted the registration of such societies or society shall be cancelled on the date of registration of the amalgamated society, or the converted society or the new societies between which the society may have been divided. Power to 18. (1) Where the Registrar is satisfied that it is essential in the public direct interest or in the interest or the cooperative movement, or for the amalgamation, purpose of securing the proper management of any society, that division and two or more societies should amalgamate or any society should be recoganization divided to form to or more societies or should be reorganized, then in public notwithstanding anything contained in the last preceding section, interest etc. but subject to the provisions of this section, the Registrar may, after consulting such federal society as may be notified by the Government, by the order published in the Official Gazette, provide for the amalgamation, division or reorganization of those societies, into a single society, or into societies, with such constitution, property, rights interests and authorities and with such liabilities, duties and obligations, as may be specified in the order. 11 APCS ACT 1978 (2) No order shall be made under this section, unless- (a) a copy of the proposed order has been sent in draft to the society or each of the societies concerned; and (b) the Registrar has considered and made such modifications in the draft order as may seem to him desirable in the light of any suggestions and objections which may be received by him within such period (not being less than two months from the date on which the copy of the order as aforesaid was received by the society) as the Registrar may fix in that behalf, either from the society, or from any member or class of members thereof, or from any creditor or class of creditors. (3) The order referred to in sub-section (1) may contain such incidental IX of 1932. consequential and supplemental provisions as may, in the opinion of the Registrar, be necessary to give effect to the amalgamation, the division or the reorganization. (4) Every member or creditor of each of the societies to be amalgamated divided or reorganized, who has objected to the scheme of amalgamation, division or reorganization within the period specified, shall be entitled to receive, on the issue of the order of amalgamation, division or reorganization, his share or interest if he be a member, and the amount in satisfaction of his dues if he be a creditor. (5) On the issue of an order under sub-section (1), the provisions of sub- Section (2), (3) and (4) of section 17 shall apply to the societies so amalgamated, divided or reorganized as if they were amalgamated divided or reorganization under that section, and to the society amalgamated, divided or reorganized. 19. Where a proposal for a compromise or arrangement – Reconstruction of societies. (a) between a society and its creditors, or (b) between a society and its members, is approved at a special general meeting called for the purpose, the Registrar may, on the application of the society, or of any member or of any creditor of the society of in the case of society which is being wound up, of the Liquidator, order reconstruction in the prescribed manner, of the society. 20. (1) Any two or more societies may, with the prior approval of the Registrar, Partnership of by resolution passed by three-fourth majority of the members present societies. and voting at a general meeting of each such society, enter into partnership for carrying out any specific business or businesses provided that its members has had clear thirty days written notice of the resolution, and the date of the meeting. 12 APCS ACT 1978 IX of 1932. (2) Nothing in the Indian partnership Act, 1932 shall apply to such partnership. Cancellation 21. The Registrar shall make an order cancelling the registration or a society of registration. if it transfers the whole of its assets and liabilities to another society or amalgamates with another society, or divides itself into two or more societies or if its affairs are would up, or it has not commenced business within a reasonable time of its registration, or has ceased to function of if he is satisfied, after making such inquiry as he thinks fit, that the society no longer has genuinely as its objects one or more of the objects specified in section 4, and its registration ought, in the interests of the general public, be cancelled. The society shall, from the date of such order of cancellation, be deemed to be dissolved, and shall cease to exist as a corporate body. CHAPTER – III Members and their Right and Liabilities Person who 22. (1) Subject to the provisions of section 24, no person shall be admitted may become as a member of a society except the following, that it is to say,- member. IX of 1872. (a) an individual, who is competent to contract under the Indian Contract Act, 1872 ; XXI of 1860. (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 ; (d) the Government ; (e) a local Authority ; (f) a public trust registered under any law for the time being in force for registration of such trusts ; Provided that, the provisions of clause (a) shall not apply to an individual seeking admission to 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 Government by general or special order, a firm or company may be admitted as member only of a society which is a federal or urban society or which conducts or intends to conduct as industrial undertaking ; 13 APCS ACT 1978 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) Where a person is refused admission as a member of a society, the decision, together with the reasons therefore, shall be communicated to that person within fifteen days of the date of the decision or within three months from the date of the application for admission, whichever is earlier. 23. (1) No society shall, without sufficient cause, refuse admission, to Open membership to any person duly qualified therefore, under the membership. provisions of this Act and its bye-laws. (2) Any person aggrieved by the decision of a society, refusing him admission to its membership, may appeal to the Registrar. (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. 24. (1) Notwithstanding anything contained in section 22 a society may Nominal, admit any person as a nominal, associate or sympathizer members. associate and sympathizer (2) A nominal member or sympathizer member shall not be entitled to member. any share in any form whatsoever in the profits or assets of the society as such member. A nominal or sympathizer shall ordinarily not have any of the privilege 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 bye-laws of the society. 25. A person shall cease to be a member of a society on his resignation Cessation of from the membership thereof being accepted, or on the transfer of the membership. whole of his share or interest in the society to another member or on his death, removal or expulsion from the society. 14 APCS ACT 1978 No rights of 26. No person shall exercise the rights of a member of a society, until he membership has made such payment to the society, in respect of membership, or to be exercis- acquired such interest in the society, as may be prescribed by the rules ed till due or the bye-laws of such society. payments are made. Voting powers 27. (1) No member of any society shall have more than one vote in its of members. affairs 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, only the person whose name stands first in the Share Certificate, shall have the right to vote. (3) A society, which has invested any part of its funds in the shares of another society, may appoint one of its members to vote on its behalf in the affairs of that other society, and accordingly such member shall have the right to vote on behalf of the first 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 society may appoint any one of its directors 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 shall be entitled to vote in the affairs of the society on behalf of the firm. (6) The Government, 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 officers, members or trustees to such persons shall have the right to vote on behalf of the Government, 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, associate, or sympathizer member shall have the right to vote. Restrictions 28. In any society, no member other than the Government or any other on holding of society, shall :- shares. (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 15 APCS ACT 1978 (b) Have or claim any interest in the shares of the society exceeding five thousand rupees : Provided that the 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 five thousand rupees. 29. (1) Subject to the provisions of the last preceding section as to the Restrictions maximum holding of shares and to any rules made in this behalf, a on transfer of charge on transfer of, or charge on the share or interest of the member in the share of share capital of a society shall be subject to such conditions as interest. 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 by the society. (3) Notwithstanding anything contained in sub-section (1) and (2), where a member is allowed to resign or is expelled, or cease to be a member on account of his being disqualified by this Act or by the rules made there- under or by the bye-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 purpose does not exceed ten percent of the paid-up share capital of the society on the last day of the financial year immediately preceding. Explanation – The right to forfeit the share or interest, of any expelled member in the share capital by virtue of any bye-laws of the society, shall not be affected by the aforesaid provisions. (4) Where the Government is a member of a society the restriction contained in this section shall not apply to any transfer made by its share or interest in the capital of the society; and the Government may, notwithstanding anything in this Act, withdraw from the society its share capital at any time, after giving to the society notice thereof not less than three months. 16 APCS ACT 1978 Transfer of 30. (1) On the death of a member of a society the society shall transfer the interest on share or interest of the deceased member to a person or persons death of nominated in accordance with the rules, or, if no person has been member. so nominated, to such persons 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 deceased member in a society. (2) Notwithstanding anything contained in sub-section (1), and such nominee, heir or legal representative, as the case may be, may require the society to pay him the value of share or interest of the deceased member, 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 transfer 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. Share interest 31. The share or interest of a member in the capital of a society, or the loan not liable to stock issued by a housing society, or in the funds raised by a society attachment. from its member 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. Rights of 32. (1) Every member of a society shall be entitled to inspect, free of cost, member to at the society’s office during office hours, or any time fixed for the see books purpose by the society, a copy of the Act, the rules, and the bye- etc. 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 meetings minutes of committee meetings and those portions of the books and records in which his transaction 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 thereof, a copy of any of the documents mentioned in the foregoing sub-section within one month from the date of payment of such fees. 17 APCS ACT 1978 33. (1) Subject to the provisions of sub-section (2) the liability of a past Liability of member or the estate of a deceased member of a society for the past member debts of society as they stood – and estate of deceased (a) in the case of a past member, on the late on which he ceased member. 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 they stood on the date of his ceasing to be a member of death, as the case may be : Provided that provisions of sub-section (1) and (2) shall not apply in the case of a minor who succeeds the deceased. 34. Notwithstanding anything contained in any law for the time being in Insolvency of force, the dues of society from a member, in insolvency proceedings members. against him, shall rank in order or priority next to the dues payable by him to Government or to a local authority. 35. (1) A society may, by resolution passed by three-fourths majority of the Expulsion of members entitled to vote who are present at general meeting held members. 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 an opportunity or 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 the 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 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. 36. (1) Every member of a society shall exercise his vote in person and no Manner of member shall be permitted to vote by proxy. exercising vote. 18 APCS ACT 1978 (2) Notwithstanding anything contained in sub-section (I) ; a society which is a member of another society may, subject to the Rules, appoint one of the members to vote on its behalf in the affairs of that other society. CHAPTER - IV Incorporation, Duties and Privilege of Societies Societies 37. The registration of the society shall render it a body corporate by the bodies to be name under which it is registered, with perpetual succession and a corporate. common seal and with power to acquire, hold and dispose of property, to enter into contracts, to institute and defend suits and other legal proceedings, and to do all such things as are necessary for the purpose for which it is constituted. Address of 38. Every society shall have an address, registered in accordance with the societies. rules to which all notices and communications may be sent and the society shall send notice in writing to the Registrar of any change in the said address within thirty days thereof. Register of 39. (1) Every society shall keep a register of its members and enter therein members. the following particulars, that is to say : (a) the name, address and occupation of each member ; (b) in the case of a society having share capital, the share held by each member ; (c) the date on which each person was admitted as a member ; (d) the date on which any person ceased to be a member ; and (e) such other particulars as may be prescribed : Provided that where a society has, by or under this Act, permitted a member to transfer his share or interest on death to any person, the register shall also show against the member concerned the name of the person entitled to the share or interest of the member and the date on which the nomination was recorded. (2) The register shall be prima facie evidence of the date on which any person was admitted to membership, and of the date on which he ceased to be a member. Copy of Act 40. Every society shall keep, at the registered address of the society, a etc. to be copy of this Act and the rules and of its bye-laws and a list of members, open to open to inspection to the public free of charge, during office hours or inspection. any house fixed by the society therefore. 19 APCS ACT 1978 41. (1) A copy of any entry in any book, register of list, regularly kept in the Admissibility of copy of course of business and in the possession of a society, shall, if duly entry as certified in such manner as may be prescribed be admissible in evidence. evidence of the existence of the entry, and shall be admitted as evidence of the matters and transactions therein recorded in every case where, and to the same extent to which, the original entry would if produced, have been admissible to prove such matters. (2) In the case of such societies, as the Government may by general or special order, direct, no officer of a society shall in any legal proceedings to which the society is not a party, be compelled to produce any of the society’s books the contents of which can be proved under the foregoing sub-Section or to appear as witness to prove the matters transactions and accounts therein recorded, unless required to do so by order the Court or a judge made for any special reason. 42. Nothing in clauses (b) and (c) of sub-section (1) of section 17 of the XVI of 1908 Indian Registration Act, 1908, shall apply- (a) To any instrument relating to shares in a society, notwithstanding Exemption from that the assets of the society consist in whole or in part of compulsory immovable property ; or registration (b) To any debentures issued by any society and not creating, and instru- ments relating declaring, assigning, limiting or extinguishing any right, title or to shares and interest to or in immovable property, except in so far as it entitles debentures of the holder to the security afforded by a registered instrument society. whereby the society has mortgaged, conveyed or otherwise transferred the whole or part of its immovable property or any interest therein to trustees upon trust for the benefit of the holders of such debenture ; or (c) To any endorsement upon, or transfer of, any debentures issued by any society. 43. The Government, by notification in the Official Gazette, may in the case Power to of any society or class of societies, remit, exempt from taxation. (a) The stamp with which under any law relating to stamp duty for the time being in force, instruments executed by or on behalf of a society by on officer or member thereof and relating to the business of the society or any class of such instruments or awards of the Registrar or his nominee or board of nominees under this Act are respectively chargeable. 20 APCS ACT 1978 (b) Any fee payable by or on behalf of a society under the relating to the registration of documents and to court fees for the time being in force, and (c) Any other tax or fee or duty (for any portion thereof) payable or on behalf of a society under any law for the time being in force, which the Government is competent to levy. Restrictions 44. A Society shall receive deposits and loans from members and other on borrow- persons, only to such extent, and under such conditions as may be ings. prescribed, or specified by the Bye-laws of the society. Regulation of 45. (1) No society shall make a loan to any person other than a member, loan making or on the security of its own shares or on the security of any person policy. who is not a member. Provided that with the special sanction of the Registrar, a society may make loans to another society : (2) Notwithstanding anything contained in the foregoing sub-section a society may make a loan to a depositor on the security of his deposit. (3) If, in the opinion of the Government, it is necessary in the interest of the society or societies concerned to do so, the Government may by general or special order, prohibit, restrict or regulate the lending of money by any society or class of societies on the security of any property. Restrictions 46. Same as is provided in thisAct, the transaction of a society with persons on transaction other than members, shall be subject to such restrictions, if any, as with persons may be prescribed. other than members. Charge and 47. A society shall have a charge upon the share or interest in the capital, set-off in and on the deposits, of a member or past member or deceased member, respect of and upon any dividend, bonus or profits payable to any such member, share or in respect of any debt due, from such member or his estate to the interest of society ; and the society may set-off any sum credited or payable to member. such member in or towards payment of any such debt : Provided that no Co-operative bank shall have a charge upon any sum invested with it by a society out of the provident fund established by it under section 72 or its reserve fund ; and no co-operative bank shall be entitled to set-off any such sum towards any debts due from the society. 21 APCS ACT 1978 48. (1) Notwithstanding anything in any other law for the time being in force, Prior claim of but subject to any prior claim of Government in respect of any money society. recoverable as a public demand and to the provisions of sections 60 V of 1908. and 61 of the Code of Civil Procedure, 1908 or the analogous law in force in the State of Arunachal Pradesh. (a) Any debt or outstanding demand, owed to a society by any member or past member or deceased member, shall be a first charge – (i) upon the crops, or other agricultural produce raised in whole or in part whether with or without a loan taken from the society by such member or past member or deceased member. (ii) upon any cattle, fodder for cattle, agricultural or industrial implements or machinery or raw materials for manufacture, or workshop, godown or place of business supplied to or purchased by such member or past member or deceased member, in whole or in part, from any loan whether in money or goods made to him by the society, and (iii) upon any movable property which may have been hypothecated, pledged or otherwise mortgaged by a member with the society and remaining in his custody : (b) any outstanding demands or dues payable to a society by any member or past member or deceased member in respect of rent, shares, loan or purchase money or any other rights or amounts payable to such society shall be a first charge upon his interest in the immovable property of the society. Explanation - The prior claim of Government in respect of dues, other than land revenue, shall be restricted for the purpose of sub-section (1) to the assets created by a member out of the funds in respect of which the Government has claim.

(2) No property or interest in property, which is subject to a charge under the foregoing sub-section, shall be transferred in any manner without the previous permission of the society; and such transfer shall be subject to such conditions, if any, as the society may impose. (3) Any transfer made in contravention of sub-section (2) shall be void. 22 APCS ACT 1978 (4) Notwithstanding anything contained in sub-sections (2) and (3), a society, which has as one of its objects the disposal of the produce of its members may provide in its bye-laws, or may other5wise contract with its members, - (a) That every such member shall dispose of his produce through the society ; and (b) That any member, who is found guilty of a breach of the bye- law or any such contract, shall reimburse the society for any loss, determined in such manner as may be specified in the bye-laws. Charge on the 49. Notwithstanding anything contained in thisAct or in any other law for immovable the time being in force, - property of (a) Any person, who makes an application to a society of which he is members borrowing a member, for a loan shall, if he owns any land or has interest in from certain any land as a tenant, made a declaration in the form prescribed, societies. such declaration shall state that the applicant thereby creates a charge on such land or interest specified in the declaration for the payment of the amount of the loan which the society may make to the member in pursuance of the application, and for all future advances if any, required by him which the society may make to him as such member, subject to such maximum as may be determined by the society, together with interest on such amount of the loan and advances : (b) Any person who has taken a loan from a society of which he is a member, before the date of the coming into force of this Act, and who owns any land or has interest in land as a tenant, and who has not already made such a declaration before the aforesaid date shall, as soon as possible thereafter, make a declaration in the form and to the effect referred to in clause (a); and no such person shall, unless and until he made such declaration, be entitled to exercise any rights as a member of the society ; (c) a declaration made under clause (a) or (b) may be varied at any time by a member, with the consent of the society in favour of which such charge is created ; (d) No member shall alienate the whole or an part of the land or inter- est therein, specified in the declaration made under clause (a) or (b) until the whole amount borrowed by the member together with interest thereon, is repaid in full : 23 APCS ACT 1978 Provided that, for the purpose of paying in full to the society the whole amount borrowed by the member together with interest thereon, the member may, with the previous permission in writing of the society and subject to such conditions as the society may impose, alienate the whole or any part of such land or interest thereon : Provided further that, if a part of the amount borrowed by a member is paid, the Central Financing Agency may, on an application from the member, release from the charge created under the declaration made under clause (a) or (b), such part of the movable or immovable property specified in the said declaration as it may deem proper with due regard to the security of the balance of the amount remaining outstanding from the member : Provided further that, standing crops on any such land may be alienated with the previous permission of the society. (e) Any alienation made in contravention of the provision of clause (d) shall be void ; (f) Subject to the prior claim of the Government in respect of land revenue or any money recoverable as land revenue, or any other law for the time being in force in any part of the State there shall be first charge in favour of the society on the land or interest specified in the declaration made under clause (a) or (b), for and to the extent of the dues owing by him on account of the loan ; (g) the record of rights shall also include the particulars of every charge on land or interest created under a declaration under clause (a) or (b) notwithstanding anything contained in any law relating to land revenue for the time being in force ; (h) any sum due to a society in consequence of charge created under a declaration under clause (a) or clause (b) shall on application for its recovery being made by such society accompanied by a certificate signed by the Registrar, be recoverable by the Deputy Commissioner/Additional Deputy Commissioner according to the laws and under the rules for the time being in force for recovery as a public demand under the Bengal Public Demand Recovery Act, 1913. Explanation - For the purpose of this section, the expression “society” means – (i) any resource society, the majority of the members of which are agriculturist and the primary object of which is to obtain credit for its members, or (ii) any society, or any society of the class of societies specified in this behalf by the Government, by a general or special order . 24 APCS ACT 1978 Deduction 50. (1) It shall be compulsory for any office bearer or employee of a society from salary to to enter into an agreement in writing with the society, that in case of meet misappropriation, defalcation or in connection with an amount society’s realizable from such person, shall be realized from his salaries, claim in securities or any amounts that may be payable to him on the strength certain cases. of the said agreement to be entered into before assuming office bearer or employees. IV of 1936. (2) On the execution of such agreement, the employer shall if so required by the society by a requisition in writing, and so long as the society does not intimate that the whole of such debt on demand has been paid make the deduction in accordance with the agreement, and pay the amount so deducted to the society, as if it were a part of the wages payable by him as required under the Payment of Wages Act, 1936 on the day on which he makes payment. Such payment shall be valid discharge of the employee’s liability to pay the amount deducted. (3) If after the receipt of a requisition made under the foregoing sub- section, the employer at any time fails to deduct the amount specified in the requisition from the salary or wages payable to the member concerned to makes default in remitting the amount deducted to the society, the employer shall be personally liable for the payment thereof ; and the amount shall be recoverable on behalf of the society from him as a public demand under the Bengal Public Demands Recovery Act, 1913 and the amount so due shall rank in priority in respect of such liability of the employer as wages in arrears. (4) Nothing contained in this section shall apply to person employer in any railways and in mines and oil fields. CHAPTER – V State aid to Societies Direct partner- 51. The Central Government may subscribe directly to the share capital of ship ofCentral a society with limited liability upon such terms and conditions as may Government be agreed upon. in societies. Indirect 52. The Central Government may, under appropriation made by law, provide partnership of moneys to a society for the purchase directly or indirectly of shares in Central other societies with limited liability. (A society to which moneys are so Government provided for the aforesaid purpose is hereinafter in this Chapter referred in society. to as an ‘Apex Society). 25 APCS ACT 1978 53. (1) AnApex Society which is provided with moneys as aforesaid shall, Principal with such moneys establish a Fund to be called the “Principal State State Partnership Fund”. Partnership Fund. (2) AnApex Society shall utilize the Principal State Partnership Fund for the purpose of – (a) directly purchasing shares in other societies with limited liability (b) providing moneys to a society to enable that society (hereinafter in this referred to as a Central Society to purchase share in other societies with limited liability (the later societies being hereinafter in this Chapter referred to as Primary Societies) : (c) Making payments to the Central Government in accordance with the provisions of this Chapter and for no other purpose. 54. (1) A Central Society which is provided with moneys by anApex Society, Subsidiary from the Principal State Partnership Fund shall with such moneys State establish a Fund to be called the “Subsidiary State Partnership Fund”. Partnership Fund. (2) A Central Society shall utilize the subsidiary State Partnership Fund for the purpose of – (a) Purchasing shares in Primary Society ; (b) Making payment to the Apex Society in accordance with the provisions of this Chapter; and for no other purpose. 55. Shares shall not be purchased in a society from one moneys in the Approval of Principal State Partnership Fund or the Subsidiary State Partnership Central Government Fund, except with the previous approval of Central Government. for purchase of shares. 56. Where any shares are purchased in a society by – Liability to be limited in (a) The Central Government ; or respect of (b) AnApex Society from the Principal State Partnership Fund, or certain share. Central Society from the Subsidiary State Partnership Fund as the case may be : the liability in respect of such shares shall in the event of the society of which the shares are purchased being wound up the limited to the amount paid in respect of such shares. 57. AnApex Society which has purchased shares in other societies from Restriction on the moneys in the Principal State Partnership Fund and a Central Society amount of which has purchased shares in Primary Societies from the money in dividend. the Subsidiary State Partnership Fund, shall be entitled only to such dividend on the said share as is decided by the society concerned and is payable to other share holders of the society. 26 APCS ACT 1978 Idennity of 58. (1) If a society in which shares are purchased from the Principal State Apex and Partnership Fund is wound up, or is dissolved the Central Government Central shall not have any claim against the Apex Society which purchased Societies. the shares in respect of any loss arising from such purchase but the Central Government shall be entitled to any moneys received by the Apex Society in liquidation proceedings or on dissolution as the case may be. (2) If a society in which shares are purchased from the Subsidiary State Partnership Fund is wound up or dissolved neither the Central Government nor the Apex Society shall have any claim against the Central Society which purchased the shares in respect of any loss arising from such purchase ; but the Apex Society shall be entitled to any moneys received by Central Society in liquidation proceedings or on dissolution as the case may be and such money shall be credited to the Principal State Partnership Fund. Disposal of 59. (1) All moneys received by anApex Society in respect of share of other share capital societies purchased from the moneys in Principal State Partner- and dividend, ship Fund on redemption of such shares or by way of dividends or etc. otherwise, shall be credited to that fund. (2) All moneys received by a Central Society in respect of shares of Primary Societies purchased from the moneys in the Subsidiary State Partnership Fund on redemption of such shares or by way of dividends or otherwise shall in the first instance be credited to that Fund and then transferred to the Apex Society which shall credit them to the Principal State Partnership Fund. (3) All moneys and dividends referred to in sub-sections (1) and (2) shall, notwithstanding that the shares stand in the name of the Apex Society, or the Central Society as the case may be, paid to the Central Government. (4) Same as provided in sub-section (3), the Central Government shall not be entitled to any other return on the moneys provided by it to an Apex Society under Section 52. Disposal of 60. (1) If anApex Society which has established a Principal State Partnership Pricipal or Fund is wound up or dissolved all moneys to the credit of, or payable Subsidiary. to that fund shall be paid to the Central Government. State Partner- (2) If a Central Society which has established a Subsidiary State ship Fund on Partnership Fund is wound up or is dissolved, all moneys to the State winding credit of, or payable to that fund shall be paid and credited to the up of Apex or Principal State Partnership Fund from which it received moneys Central Society. under clause (b) of sub-section (2) of section 53. 27 APCS ACT 1978 61. Any amount to be credit of a Principal State partnership Fund or a Principal or Subsidiary Subsidiary State Partnership Fund shall not form part of the assets of State Partner- the Apex Society or the Central Society, as the case may be. ship Fund not to form part of assets. 62. Subject to the foregoing provisions of the Chapter – Agreement by Central (a) The Central Government may enter into an agreement with anApex Government Society setting out the terms and conditions on which it shall provide and Apex moneys to the Apex Society for the purpose specified in section 52. Spociety. (b) AnApex Society may, with the previous approval of the Central Government, enter into an agreement with a Central Society setting out the terms and conditions on which it shall provide moneys to that society from the Principal State Partnership Fund for the purpose specified in clause (b) of sub-section (2) of section 53. 63. Notwithstanding anything contained in any law for the time being in Other form of force but subject to such conditions as the Central Government, by State aid to general or special order may specify in this behalf, the Central societies. Government may – (a) Give loans to a society ; (b) Guarantee the payment of the principal debentures issued by a society or of interest thereon or both or the repayment of the share capital of a society to its members or the payment of dividend thereon at such rates as may be specified by the Central Government ; (c) Guarantee the repayment of loans given by a Co-operative Bank to a society ; (d) Guarantee the repayment of the principal and payment of interest on loans and advances given by the Reserve Bank of India or the Industrial Finance Corporation of India or any other authority constituted under any law for the time being in force ; or (e) Provide financial assistance, in any other form (including subsidies), to a society. 64. The provisions of section 52 to 62 (both inclusive) in this Chapter shall Provisions of have effect notwithstanding anything inconsistent therewith contained this Chapter in any other law for the time being in force. to over-ride other laws. CHAPTER – VI Property and Funds of Societies 65. No part of the funds, other than the net profits of a society, shall be Fund not to paid by way of bonus or dividend, or otherwise distributed among its be divided. members ; 28 APCS ACT 1978 Provided that a member may be paid remuneration on such scale as may be laid down by the bye-laws for any services rendered by him to the society. Appropriation 66. (1) A society earning profit shall calculate the net profits by deducting of profit. from the gross profits for the year, all accrued interest which is overdue or more than six months establishment charges, interest payable on loans and deposits audit fees working expenses including repairs, rent, taxes and depreciation, and after providing for or writing off bad debts and losses not adjusted against any fund created out of profit. A society may, however, add to the net profits for the year, interest accrued in the preceding years but actually recovered during the year. The net profits thus arrived at together with the amount of profits brought forward from the previous year, shall be available for appropriation. (2) A society may appropriate its profits to the reserve fund or any other fund to payment of dividends to members on their share, to the contribution to educational fund of the territory level federal society which may be notified in this behalf by the Government to the payment of bonus on the basis of the support from the 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. Reserve fund. 67. (1) Every society which does, or can derive a profit from its transactions shall maintain a reserve fund – (2) In the case of Resource or Producer’s society at least one fourth of the net profits of the society each year, and in the case of any other society, at least one tenth of the net profits of the society each year, shall be carried to the reserve fund; and such reserve fund may be used in the business of the society or may subject to the provisions of section 71, be invested as the Government may, by general, or special order direct or may with the previous sanction of the 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. Restriction on 68. No society shall pay a dividend to its members at a rate exceeding 25 dividend. percent. 29 APCS ACT 1978 69. (1) Every society which declares a dividend to its members at a rate of Contribution 4 percent or more shall contribute towards the educational fund of to educational the Territory level federal society which may be notified in this behalf fund of the State Federal by the Government in such rate as may be prescribed. society. (2) No society liable to contribute towards the educational funds shall pay a dividend to its members, unless said contribution is made to the federal society notified as aforesaid. An officer willfully failing to comply with the requirement of this section shall be personally li- able for making good the amount to the federal society notified as aforesaid. 70. After, providing for the reserve fund as provided in section 67 and for the Contribution educational fund as provided in section 69, a society may set aside a to public sum not exceeding twenty percent of its net profits and utilize, with the purposes. approval of such federal society as may be notified by the Government in this behalf from time to time the whole or part of such sum in contrib- uting 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. 71. A society shall invest or deposit its funds in one or more of the Investment of following :- funds. (a) In theArunachal Pradesh State Co-operativeApex Bank Limited. (b) In any of the securities specified in section 20 of the Indian Trusts II of 1882. Act, 1881; (c) In the shares or security bonds or debentures issue by any other society with limited liability ; (d) In any banking company approved for this purpose by the Regis- trar, and on such conditions as the Registrar may from time to time impose ; (e) In any other mode permitted by the rules, or by general or special order of the Government. 72. (1) Any society may establish for its employees a provident fund into Employees which shall be paid the contributions made by its employees and by provident the society. Such provident fund shall not be used in the business of fund. 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, XIX of 1952. a provident fund established, by a society to which the Employees Provident Funds Act, 1952, as applicable, shall be governed by that Act. 30 APCS ACT 1978 CHAPTER – VII Management of Society Final 73. Subject to the provisions in this Act and the rules, the final authority of authority. every society shall vest in the general body of members in general meeting summoned in such a manner as may be specified in the bye-laws. Committee its 74. The management of every society shall vest in a committee constituted powers and in according with this Act, the rules and bye-laws, which shall exercise functions. such powers and perform such duties as may be conferred or imposed respectively by this Act, the rules and the bye-laws. 74. (A) Number and terms of Board and its office bearer, - (1) The management of every Society shall vest in a Board constituted in accordance with this Act, and the Rules and the Bye-laws made there under, which shall exercise such powers and perform such duties as may be conferred or imposed respectively by this Act, or the Rules and the Bye-laws made there under. Provided that the maximum number of Directors of a Co- operative Society shall not exceed twenty one. Provided further that there shall be reservation of two seats for woman in the Board of every Co-operative Society. (2) The term of office of elected members and its office bearers shall be five years from the date of election and the term of office bearers shall be coterminous with the term of the Board. Provided that, there shall be provisions for co-option of persons to be members of the Board having experience in the field of banking management, finance or specialization in any other field relating to the objects and activities undertaken by the Co-operative Society, as a members of the Board of such Society. Provided further that, the number of such co-opted members shall not exceed two in addition to twenty one Directors specified in the first proviso to clause (1) of this section. Provided also, that such co-opted members shall not have the right to vote in any election of the Co-operative Society in their capacity as such member or to be eligible to be elected as office bearers of the Board. Provided further also, that the functional Directors of a Co- operative Society shall also be the members of the Board and such members shall be excluded for the purpose of counting the total number of Directors specified in the first proviso to clause (1) of this section. 31 APCS ACT 1978 74. (B) (i) Notwithstanding anything contained in any other law for the time Election of being in force, made by the Legislature of the State, the election of Members of the members of the Board shall be conducted before the expiry of Board. the term of the Board so as to ensure that the newly elected members of the Board assume office immediately on the expiry of the office of the members of the outgoing Board. (2) The superintendence, direction and control of the preparation of electoral rolls for, and the conduct of, all election to a Co-operative society shall vest in such an authority or body, as may be provided, by law, made by the State Legislature. Provided that, the procedure and guidelines for the conduct of such election shall be evolved separately, as may be deemed appropriate, by such authority or body. 75. The qualifications for the appointment of a Manager, Secretary, Appointment Accountant or any other officer of a society shall be such, as may from of Manager, time to time, be prescribed. Secretary and other officers. 76. (1) Every Society shall, within a period of six months after the date Annual fixed for making-up its accounts for the year under the rules for the General time being in force, call a general meeting. Meting. Provided that, the Registrar may, by general or special order, extend the period for holding such meeting for a further period not exceeding three months. Provided further that, if in the opinion of the Registrar, such extension is necessary, or such meeting is not called by the society within the extended period (if any) granted by him, the Registrar or any person authorized by him may call such meeting in the prescribed manner and that meeting shall be deemed to be a general meeting duly called by the society. (2) There shall be attached to every balance sheet laid before the general meeting of the Society, a report by its committee with respect to,- (a) The state of the society affairs. (b) The amount if any, which it proposes to carry to any reserve either in such balance sheet, or any other specific balance sheet ; and (c) The amount if any, which it recommends should be paid by way of dividend bonus or honoraria to honorary workers. The committee’s report shall also deal with changes, which have occurred during the year for which the accounts are made up 32 APCS ACT 1978 in the nature of the Society’s business. The committee’s report shall be signed by its Chairman, or any other member authorized to sign on behalf of the committee/Chairman. (3) At every annual general meeting the balance sheet, the profit and loss account, the auditor’s report and the committee’s report shall be placed for adoption and such other business will be transacted, as may be laid down in the bye-laws for which due notice has to be given. (4) If default is made in calling a general meeting within the period or as the case may be, the extended period prescribed, the Registrar may by order declare any officer or member of the committee whose duty it was to call such meeting, and who without reasonable ground, failed to comply with the provisions of the aforesaid sub-sections, disqualified for being elected and for being an officer or member of the committee for such period not exceeding three years, as may be specified in such an order and if the officer is a servant of the Society, impose a penalty on him to an amount not exceeding one thousand rupees. Before making such an order, the Registrar, however, shall give or cause to be given, a reasonable opportunity to the person concerned of showing cause with regard to the action proposed to be taken against him. (5) Any penalty imposed may be recovered in the manner provided by the Code of Criminal Procedure, 1973, for the recovery of fines imposed by a Magistrate, as if, such fine were imposed by the Magistrate himself. II of 1974. (6) Any penalty imposed under sub-section (5) or under the next succeeding section, may be recovered in the manner provided by the Code of Criminal Procedure, 1973, for the recovery of fines imposed by a Magistrate, as if such fine were imposed by the Magistrate himself. Special 77. (1) A special general meeting may be called at any time by the Chairman general or by a majority of the members of the committee and shall be meeting. called within one month – (i) on a requisition in writing of one-fifth of the members of the society or of members the members of which is specified in the bye- laws for the purpose, whichever is lower, or (ii) at the instance of the Registrar, or (iii) in the case of a society which is a member of federal society, at the instance of the committee of such federal society. 33 APCS ACT 1978 (2) Where any officer or a member of the committee whose duty it was to call such meeting without reasonable excuse fails to call such meeting, the Registrar may by order declare such officer or member disqualified for being a member of the committee for such period not exceeding three years, as he may specify in such order; and if the officer is servant of the society, he may impose on him a penalty not exceeding one hundred rupees. Before making an order under this sub-section, the Registrar shall give or cause to be given, a reasonable opportunity to the person concerned of showing cause in regard to the action proposed to be taken against him. (3) If a special general meeting of a society is not called in accordance with the requisition referred to in sub-section (1), the Registrar or any person authorized by him in this behalf shall have power to call such meeting and that meeting shall be deemed to be a meeting duly called by the committee. (4) The Registrar shall have power to order that the expenditure incurred in calling a meeting under sub-section (3) shall be paid out of the funds of the society or by such person or persons who in the opinion of the Registrar, were responsible for the refusal or failure to convene the meeting. 78. (1) No act of a society or a committee or any officer done in good faith Act of in pursuance of the business of the society shall be deemed to be societies, etc invalid by reason only of some defects subsequently discovered in not to be the organization of the society, or in the constitution of the committee invalidated by or in the appointment or election of an officer or on the ground that certain such officer was disqualified for his office. defects. (2) No act done in good faith by any person appointed under thisAct, the rules and the bye-laws shall be invalid merely by reason of the fact that his appointment has been cancelled by or in consequence of any order subsequently passed under this Act, rules and the bye-laws. (3) The Registrar shall decide whether anyAct was done in good faith in pursuance of the business of the society; and his decision thereon shall be final. 79. (1) Notwithstanding anything contained in any other law for the time Supersession being in force, no Board shall be superseded or kept under suspension and for a period exceeding six months. suspension of Board and Provided that, the Board may be superseded or kept under interim suspension in case – management. (i) of persistent default ; or (ii) of negligence in the performance of its duties ; or 34 APCS ACT 1978 (iii) the Board has committed any act prejudicial to the interest of the Co-operative Society or its members ; or (iv) there is stalemate in the constitution or functions of the Board ; or (v) the authority or body as provided by the Legislature of the State, by law, under clause (2) of article 243ZK of the Constitution has failed to conduct elections in accordance with the provisions of the State Act. Provided further that, the Board of any such Co-operative shall not be superseded or kept under suspension where there is no Government shareholding or loan or financial assistance or any guarantee by the Government. Provided also, that in case of a Co-operative Society carrying on the business of banking, the provisions of the Banking Regulation Act, 1949 shall apply. (2) In case of supersession of a Board, the administrator appointed to manage the affairs of such Cooperative Society shall arrange for conduct of elections within the period specified in section 74(A) and 74(B), as the case may be and handover the management to the elected Board. (3) The conditions of service of the administrator shall be such as provided in this Act or as may be prescribed under the rules or bye- laws made thereunder. (4) The committee or the administrator so appointed shall, subject to the control of the Registrar and to such instructions as he may from time to time give, have the power to exercise all or any of the functions of the committee or of any of the office of the society and take all such action as may be required in the interest of the society. (5) If at any time during any period or extended period referred to in provisos to section 76, it appears to the Registrar that it is no longer necessary to continue to carry on the affairs of the society, as aforesaid, the Registrar may, by an order published in the Official Gazette, direct that the management shall terminate, and on such order being made, the management of the society shall be handed over to the new committee duly constituted. (6) The committee or the administrator shall, at the expiry or termination of its or his term of office, arrange for the constitution of the new committee in accordance with the bye-laws of the society. 35 APCS ACT 1978 (7) All acts done or purported to be done by the committee or the administrator during the period, the affairs of the society are carried on by the committee or the administrator under this section shall be binding on the new committee. (8) The Registrar may fix the remuneration of the administrator and any expenses of management which shall be payable out of the funds of the society within such time and at such intervals as the Registrar may fix and if such remuneration or expenses are not paid within such time, and at such interval, the registrar may direct the person having the custody of the fund of the society to pay the administrator. Such remuneration and expenses on priority to any other payment (except any amount recoverable as a public demand under the Bengal Public Demands Recovery Act, 1913), and such person as far as the fund to the credit of the society allow, comply with the order of the Registrar. 80. (1) The Registrar may direct any society or class of societies, to keep Registrar’s proper books or accounts with respect to all sums of money received power to and expended by the society and the matters in respect of which enforce performance the receipt and expenditure take place, all sales and purchases of of obligations. goods by the society and the assets and liabilities of the society and to furnish such statements and returns and to produce such records as he may require from time to time, and the officer or officers of the society shall be bound to comply with his order within the period specified therein. (2) Where any society is required to take any action under thisAct, the rules or the bye-laws, or to comply with an order made under the foregoing sub-section and such action is not taken – (a) within the time provided in thisAct, the rules or the bye-laws, or the order, as the case may be, or (b) Where no time is so provided, within such time, having regard to the nature and extent of the action to be taken, as the Registrar may specify by notice in writing, the Registrar may himself or through a person authorized by him take such action, at the expenses of the society ; and such expenses shall be recoverable from the society as if it were a public demand under the Bengal Public Demands Recovery Act, 1913. (3) Where the Registrar takes action under sub-section(2), the Registrar may call upon the officer or officers of the society whom he considers to be responsible for not complying with the provisions of this Act, 36 APCS ACT 1978 the rules or the bye-laws, or the order made under sub-section (1), and after giving such officer or officers an opportunity of being heard may require him or them to pay to the society the expenses paid or payable by it to the State Government as a result of their failure to take action, and to pay to the assets of the society such sum not exceeding twenty-five rupees as the Registrar may think fit for each day until the Registrar’s directions are carried out. Registrar’s 81. (1) Where the Registrar is satisfied that the books and records of a power to society are likely to be suppressed, tampered with or destroyed, or seize records, the funds and property of a society are likely to be misappropriated etc. or misapplied, the Registrar or the person authorized by him may apply to the Executive Magistrate with whose jurisdiction of society is functioning for seizing and taking possession in the records and property of the society. (2) On receipt of an application under sub-section (1), the Magistrate may in a warrant authorize any police officer not below the rank of a Sub-Inspector, to enter and search any place where the records and property are kept or likely to be kept and to seize them and handover possession thereof to the Registrar or the person authorized by him as the case may be. CHAPTER – VIII Audit, Inquiry, Inspection and supervision Audit. 82. Audit ofAccounts and returns of the Co-operative Society, - (1) Every Cooperative Society shall be audited by an auditor or auditing firms appointed by the General Body of the Cooperative Society. Provided that, such auditor or auditing firms shall be appointed from a panel approved by the Registrar having required qualification of the auditors and auditing firms. (2) The accounts of every Cooperative Society shall be audited within six months of the closure of the financial year to which the accounts relate. (3) The audit shall include an examination of overdue debts, if any, the verification of the cash balance and securities, and the valuation of the assets and liabilities of Society. (4) The auditor auditing the accounts of the society shall, at all times, have access to all the books accounts, documents, papers, securities, cash and other properties belonging to, or in the custody of the society, and may summon and person in possession, or 37 APCS ACT 1978 responsible for the custody, of any such books, accounts, documents, papers, securities, cash or other properties, to produce the same at any place at the headquarter of the society or any branch thereof. (5) Every person who is, or has at any time been, an officer or employee of the society and every member and the past member of the society shall furnish such information with regard to the transaction and working of the society as the auditor may require. (6) The Auditor shall have the right to receive all notes, and every communication relating to the Annual General meeting of the society and to attend such meeting to hear there at in respect of any part of the business with which he is concerned as auditor. (7) If it appears to the General Body of the Co-operative Society, that it is necessary or expedient to re-audit their accounts, the same may be done with the information of the Registrar. (8) The audit reports of the accounts of theApex Cooperative Societies shall be laid before the State Legislature as per prescribed procedure of laying of such audit report. (9) Every Co-operative Society shall file returns as mentioned below within six months of the closure of every financial year to the Registrar. (i) Annual report of each activities. (ii) Its audited statement of accounts. (iii) Plan for surplus disposal as approved by the General Body of the Co-operative Society ; (iv) List of amendments to the Bye-laws of the Co-operative Society, if any ; (v) Declaration regarding date of holding of General Body meeting and conduct of election when due; and (vi) Any other information required by the Registrar in pursuance of any of the provisions of this Act. 83. If the result of the audit held under the last preceding section disclose Rectification any defects in the working of a society, the society shall within three of defects in months from the order of the audit report, explain to the Registrar the accounts. defects or the irregularities pointed out by the auditor, and take steps to rectify the defects and remedy irregularities and report to the Registrar the action taken by it thereon. The Registrar may also make an order 38 APCS ACT 1978 directing the society or its officers to take such action, as may be specified in the order to remedy the defects, within the time specified therein, where the society concerned is a member of a federal society, such order shall be made after consulting the federal society. Inquiry by 84. (1) The Registrar may, of his own motion, himself or by a person duly Registrar. authorized by him in writing in this behalf, hold an inquiry into the constitution, working and financial conditions of a society. (2) The Registrar shall hold such an inquiry – (a) On the requisition of a society duly authorized by rules made in this behalf to make such requisition, in respect of one of its members, such member being itself a society, or (b) On the application of a majority or the committee of a society, or (c) On the application of one-third of the members of society. (3) (a) All officers, members and past members of the society in respect of which an inquiry, is held, and any other who in the opinion of the officer holding the inquiry is in possession of information, books and papers relating to the society, shall furnish such information as in their possession and produce all books and papers relating to the society which are in their custody or and otherwise give to the officer holding an inquiry all assistance in connection with the inquiry when they can reasonably give. (b) If any such person refuse to produce to the Registrar or any person authorized by him under sub-section (1), any book or papers which it is his duty under clause (1) to produce or to answer any question which is put to him by the Registrar or the person authorized by the Registrar in pursuance of sub-clause (a), the Registrar or the person authorized by the Registrar may certify the refusal and the Registrar after hearing any statement which may be offered in defense, punish the defaulter with a penalty not exceeding five hundred rupees. Any sum imposed as penalty under this section shall, on the application by the Registrar of the person authorized by him, to a Magistrate having jurisdiction be recoverable by the Magistrates as if it were a fine imposed by himself. (4) The result of any inquiry under this section shall be communicated to the society whose affairs have been investigated. 39 APCS ACT 1978 (5) It shall be competent for the Registrar to withdraw any inquiry from the officer to whom it is entrusted, and to hold the inquiry himself or entrust it to any other person as be deems fit. 85. The Registrar, or any person, authorized by general or special order in Inspection of this behalf by him, may inspect a Cooperative Society. For the purpose the societies. of inspection, the Registrar or the person so authorized by him shall at all times have access to all books, accounts, papers, vouchers, securities, stock and other property of the society and may in the event of serious irregularities discovered during inspection taken them into custody and shall have power to verify the cash balance of the society and subject to the general or special order of the Registrar to call a committee meeting, general meeting, Every Officer or member of the society shall furnish such information with regard to the working of the society as the Registrar or the person making such inspection may require. 86. (1) On the application of a creditor of a society who – Inspection of books of (a) Satisfies the Registrar that the debit is a sum than due, and indebted that he has demanded payment thereof and has not received society. satisfaction within reasonable time, and (b) Deposits with the Registrar such sum as the Registrar may require as security for the cost of any inspection of the books of the society. The Registrar may, if he think it necessary, inspect or direct any person or persons authorized by him by order in writing in this behalf to inspect the books of the society. (2) The Registrar shall communicate the result of any such inspection to the applicant, and to the society whose books have been inspected. (3) It shall be competent for the Registrar to withdraw any order of inspection from the officer to whom it is entrusted and to inspect himself or entrust it to any other person as he deems fit. 87. (1) Where an inquiry is held under section 84 or an inspection is made Cost of under the last preceding section, the Registrar may apportion the inquiry and costs, or such part of the costs, he may think just between the inspection. society, the members or creditors demanding the inquiry or inspection, the officers or former officers and the members or past members or the estates of the deceased members of the society. 40 APCS ACT 1978 Provided that – (a) no order of apportionment of the costs shall be made under this section, unless the society or persons or the legal repre- sentative of the deceased person liable to pay the costs there- under; has or have been heard, or has or have had a reason- able opportunity of being heard ; (b) the Registrar shall state in writing the grounds on which the costs are apportioned. (2) No expenditure from the funds of a society shall be incurred for the purpose of defraying any costs in support of any appeal preferred by any person other than the society against an order made under the foregoing sub-section. Recovery of 88. Any sum awarded by way of costs under the last preceding section, costs. may be recovered, on an application by the Registrar to a Magistrate having jurisdiction in the place where the person from whom the money is claimable resides or carries on business, and such Magistrate shall proceed to recover the same in the same manner as if it were a fine imposed by himself. Registrar to 89. (1) If the result of any inquiry held under section 84 or an inspection bring defects made under section 85 disclose any defects in the constitution, disclosed in working of financial condition of the books of a society, the Registrar inquiry or may bring such defects to the notice of the society. The Registrar inspection of may also make an order directing the society or its officers to take notice of such action as may be specified in the order to remedy the defects, society. within the time specified therein. (2) The society concerned may, within sixty days from the date of any order made by the Registrar under the foregoing sub-section appeal against it to the State Government. (3) The State Government may, in deciding the appeal annual, reverse, modify or confirm the order of the Registrar. (4) If a society fails to rectify the defects disclosed in the course of or as a result of an audit under section 82 or fails to rectify the defects as directed by the Registrar, and where no appeal has been made to the State Government within the time specified in the order, or where on appeal so made the State Government has not annualled, reversed or modified the order, the Registrar may himself take steps to have the defects of the society who in his opinion, has or have failed to rectify the defects. 41 APCS ACT 1978 90. (1) Where, in the course of or as a result of an audit under section 82 or Power of an inquiry under section 84 or an inspection under section 86 or the Registrar to winding up of a society, the Registrar is satisfied on the basis of the assess report made by the auditor or the person authorized to make inquiry damages under section 84 or the person authorized to inspect the books against under section 86 or the liquidator under section 109 or otherwise delinquent that any person who has taken any part in the organization or promoters, management of the society or any deceased or past or present etc. officer of the society has within a period of five years, prior to the date of such audit, inquiry, inspection or order for winding up, misapplied or retained, or become liable or accountable for, any money or property of the society, or has been guilty of misfeasance or breach of trust in relation to the society, the Registrar or a person authorized by him in that behalf, may frame charge against such person or persons and after giving reasonable opportunity to the person concerned and in the case of a deceased person to his representative who inherits his estate to answer the charges and make an order requiring him to repay or restore the money or property or any part thereof ; with interest at such rate as the Registrar or the person authorized under this section may determine, or to contribute such sum to the assets of the society by way of compensation in regard to the misapplication, retention, misfeasance, or from the trust as he may determine. (2) The Registrar or the person authorized under sub-section (1) in making any order under this section may provide therein for the payment of the cost or any part thereof, as he thinks just, and he may direct that such costs or any part thereof shall be recovered from the person against whom the order has been issued. (3) This section shall apply, notwithstanding that the act is one for which the person concerned may be criminally responsible. 91.

The Registrar or the persons authorized by him, when acting under Power to sections 84, 86 or 90 shall have the power to summon and enforce the enforce the attendance or any person to give evidence or to compel the production attendance of any document or other material object by the same means and in the etc. same manner as is provided in the case of Civil Court under the Code of Civil Procedure 1908, or the analogous, law in force in the State of V of 1908. Arunachal Pradesh. 92. (1) The State Government may constitute or recognize one or more Constitution cooperative federal authorities, in such manner as may be prescribed on recognition and subject to such conditions as the State Government may impose, of federal for supervision of a society or a class or societies and may frame authority to rules for making grants to such an authority. supervise working of societies. 42 APCS ACT 1978 (2) The State Government may, by general or special order require a society or a class of societies to make contribution of such sum every year as may be fixed by the Registrar towards the recoupment of expenditure which the Government or any person authorized in that behalf has incurred or is likely to incur, in respect of supervision of societies. (3) A society to which sub-section (2) is applicable shall pay to such authority such fee as may be prescribed within a reasonable time and, if it fails to pay such fee within that reasonable time, the authority may recover it as if it were a public demand under the Bengal Public Demands Recovery Act, 1913. Power to 93. (1) If the Registrar or any person authorized by him in this behalf, while seize record making audit, inspection inquiry or supervision as the case may be, of society. believes or has reason to have that the registered society is not keeping or maintaining the account books and records, of society’s property or finds or reasonably suspects gross negligence of duties, misappropriation or misuse of funds of the society, irregularity in recording proceedings or keeping accounts or books, he shall have power to take possession of any of the books registers or documents, cash in hand or account books of the society and remove such seized property or keep in proper custody such seized property till is disposed of any manner as may be directed by the Registrar. (2) The persons seizing the properties should prepare duplicate copies of inventory of the properties, seize with his signature and require the officer or member from whose possession or custody the property is seized to put his signature in witness thereof and if such officer or member refuses to sign, then the person seizing the property shall call upon two or more person to sign seizure list. A copy of the list prepared under this section signed by the witness shall be delivered to the office of the society. (3) The Registrar shall take immediate steps by way of audit or inspection and pass such orders, as he may think fit. (4) TheAdministrative head of the respective place shall give police help to all officer mentioned in sub-section (1) of this section when sought for. 43 APCS ACT 1978 CHAPTER – IX Disputes and Arbitration 94. (1) Notwithstanding anything contained in any other law for the time Dispute. being in force any dispute touching the constitution, elections of the office bearers, conduct of general meetings, management or business of society shall be referred by any of the parties to the dispute, or by a federal society to which the society is affiliated, or by a creditor of the society, to the Registrar, if both the parties thereto are one or other of the following:- (a) a society, its committee, any past committee, any past or present officer, any past or present agent, any past or present servant or nominee, heir or legal representative of any deceased officer, deceased agent or deceased servant of the society, or the liquidator of the society ; (b) Member, past member or a person claiming through a member, past member or a deceased member of a society or a society which is a member of the society. (c) a person other than a member of the society who has been granted a loan by the society, or with whom the society has or had transactions under the provisions of section 46, and any person claiming through such a person. (d) a surety of a member, past member or a deceased member or a person other than a member who has been granted a loan by the society under section 46, whether such a surety is or not a member of the society. (e) Any other society, or the liquidator of such a society. (2) When any question arises whether for the purpose of the foregoing sub section, a matter referred to for decision is a dispute or not, the question shall be considered by the Registrar whose decision shall be final. (3) Same as otherwise provided under sub-section 3 of section 97, no Court shall have jurisdiction to entertain any suit or other proceedings in respect of any dispute referred to in sub-section (1). Explanation 1: A dispute between the Liquidator of a society and the members of the same society shall not be referred to the Registrar under the provisions of Sub-Section (1) Explanation 2 : For the purposes of this sub-section, a dispute shall include – 44 APCS ACT 1978 (i) a claim by or against a society for any debt or demand due to it from a member or due from it to a member, past member or the nominee, heir or legal representative of a deceased member or servant or employee whether such a debt or demand be admitted or not. (ii) a claim by a surety for any sum or demand due to him from the principal borrower in respect of a loan by a society and recovered from the surety owing to the default of the principal borrower whether such a sum or demand be admitted or not ; (iii) a claim by a society for any loss caused to it by a member, past member or deceased member, by any officer, past officer or deceased officer, by any agent, past agent or deceased agent, or by any servant past servant or deceased servant or by its committee past or present, whether such loss be admitted or not ; (iv) a refusal or failure by a member, past member or a nominee, heir or legal representative of a deceased member, to deliver possession to a society land or any other asset resumed by it for breach of conditions of the assignment. Power of the 95. (1) If any society is unable to pay its debt to theApex Bank by reason Apex Bank to of any of its members committing default in the payment of the proceed moneys due by them or to the society, the Apex Bank may direct against such society to refer to the Registrar, under section 94, the dispute members of between the society and defaulting members thereof : the society for recovery of Provided that, if such society fails to refer the dispute as the money aforesaid within a period of ninety days from the date of receipt of due to it. such direction, the Apex Bank, itself may refer to the Registrar the said dispute : Provided further that, in case of a reference, the bye-laws of the defaulting society shall apply as if all references to the society or its committee in the said bye-laws were references to the Apex Bank. (2) When anApex Bank has obtained a decree or award against any society in respect of the moneys due to it by such society, the Apex Bank may proceed to recover such moneys firstly from the assets of that society and secondly from the members of that society to the extent of the moneys due by them to that society. 45 APCS ACT 1978 96. (1) Notwithstanding anything contained in the Indian LimitationAct, 1963 Limitation but subject to the specific provision made in this Act, the period of XXXVI of 1963. limitation in the case of a dispute reference to the Registrar under the preceding section, shall – (a) when the dispute relates to the recovery of any sum including interest thereon, due to a society by a member thereof, be computed from the date on which such member dies or ceases to be a member of the society ; (b) when the dispute is between a society or its committee and any past committee, or any past or present officer, or past or present agent, or past or present servant, or a member, or past member of the nominee, heir or legal representative of a deceased member, and when the dispute relates to any act or omission on the part of either party to the dispute, be six years from the date on which the act or omission with reference to which the dispute arose, took place. (c) when the dispute is in respect of any matter touching the constitution, management or business of a society which has been ordered to be wound up under section 106, or in respect of which a nominated committee or an administrator has been appointed under section 79, be six years from the date of the issue under section 106, or section 79, as the case may be ; (d) when the dispute is in respect of an election of an office bearer of the society, be one month from the date of the declaration of the result of the election. (2) The period of limitation in the case of any other dispute except those mentioned in the foregoing sub-section which are required to be referred to the Registrar under the last preceding section shall be regulated by the provisions of the Indian Limitation Act, 1963, as if the dispute were suit, and the Registrar a Civil Court. (3) Notwithstanding anything contained in sub-section (1) and (2), the Registrar may admit as dispute after the expiry of the limitation period if the applicant satisfies the Registrar that he had sufficient cause for not referring the dispute within such period and the dispute so admitted shall be a dispute which shall not be barred on the ground that the period of limitation had expired. 97. (1) If the Registrar is satisfied that any matter referred to him or brought Settlement of to his notice is a dispute within the meaning of section 94, the disputes. Registrar shall subject to the rules, decide the dispute himself, or refer it for disposal to a nominee or a board of nominees, appointed by the Registrar. 46 APCS ACT 1978 (2) Where any dispute is referred under the foregoing sub-section, for decision to the Registrar’s nominee or board of nominees, the Registrar may, at any time, for reasons to be recorded in writing, withdraw such dispute from his nominee or board of nominees, and may decide the dispute himself, or refer it again for decision to any other nominee or board of nominees appointed by him. (3) Notwithstanding anything contained in section 94, the Registrar may, if he thinks fit, suspend proceedings in regard to any dispute, if the question at issue between a society and a claimant or between different claimants, is one involving complicated questions of law and fact, until the questions has been tried by a regular suit instituted by one of the parties or by the society. If any such suit is not instituted within two months from the Registrar’s order suspending proceedings, the Registrar shall take action as is provided in sub- section (1). Procedure for 98. (1) The Registrar, or his nominee or board of nominees, hearing a dispute settlement of under the last preceding section shall hear the dispute in the manner disputes and prescribed and shall have power to summon and enforce attendance power of of witness including the parties interested or any of them and to Registrar, his compel them to give evidence on oath, affirmation or affidavit and to nominee or board of compel the production of documents by the same means and as far nominees. V as possible in the same manner, as is provided in the case of Civil of 1908. Court by the Code of Civil Procedure, 1908 or the analogous law in force the State of Arunachal Pradesh. (2) Except with the permission of the Registrar or his nominee or board of nominees, as the case may be, no party shall be represented at the hearing of a legal practitioner. (3) (a) If the Registrar or his nominee or board of nominees is satisfied that a person, whether he be a member of the society or not has acquired any interest in the property of a person who is a party to a dispute, he may order that the person who has acquired the interest in the property may join as a party to the dispute ; and any decision that may be passed on the reference by the Registrar or his nominee or board of nominees shall be binding on the party so joined, in the same manner as if he were an original party to the dispute. (b) where a dispute has been instituted in the name of wrong person, or where all the defendants have not been included, the Registrar or his nominee or board of nominees may, at 47 APCS ACT 1978 any stage of the hearing of the dispute, if satisfied that the mistake was bonafide, order any other person to be substituted or added as a plaintiff or a defendant upon such terms as he thinks just. (c) The Registrar, his nominee or board of nominees may at any stage of the proceedings, either upon or without the application of either party, and on such terms as may appear to the Registrar, his nominee or board of nominees, as the case may be, to be just, order that the name of any party improperly joined whether as plaintiff or defendant, be struck out and that the name of any person who ought to have been joined whether as plaintiff or defendant or whose presence before the Registrar, his nominee or board of nominees as the case may be necessary in order to enable the Registrar, his nominee or board of nominees effectually and completely to adjudicate upon and settle all the questions involved in the dispute, be added. (d) Any person who is a party to the dispute and entitled to more than one relief in respect of the same cause of action may claim all or any of such relief ; but if he omits to claim for all such reliefs he shall not forward a claim for any relief so omitted, except with the leave of the Registrar, his nominee or board of nominees. 99. (1) Where a dispute has been referred to the Registrar or his nominee Attachment or board of nominees under section 97 or under section 109 or where before ward. the Registrar or the person authorized under section 90, hears a person against whom charges are framed under that section, the Registrar or his nominee or board of nominees or as the case may be, the person so authorized under section 90, if satisfied on enquiry or otherwise that a party to such dispute or against whom proceedings are pending under section 90 with intent to defeat, delay or obstruct the execution of any award or the carrying out of any order that may be made. (a) is about to dispose of whole or any part of his property, or (b) is about to remove the whole or any part of his property from the jurisdiction of the Registrar, may unless adequate security is furnished, direct conditional attachment of the said property and such attachment shall have the same effect as if made by a competent Civil Court. (2) Where the Registrar, his nominee or board of nominees or the person authorized under section 90 direct attachment of property under the foregoing sub-section, he shall issue a notice calling upon the 48 APCS ACT 1978 person whose property is so attached to furnish security which he thinks adequate within a specified period ; and if the person fails to provide the security so demanded, the Registrar or his nominee or board of nominees or, as the case may be, the person, authorized under section 90 may confirm the order and after the decision in the dispute or the completion of the proceedings referred to in the foregoing sub-section may direct the disposal of the property so attached towards the claim if awarded. (3) Attachment made under this section shall not effect the rights subsisting prior to the attachment of the property of persons not parties to the proceedings in connection with which the attachment is made, or bar any person holding a decree against the person whose property is so attached from applying for the sale of the property under attachment in execution of such decree. Decision of 100. When a dispute is referred to arbitration, the Registrar or his nominee Registrar or or board of nominees may, after giving a reasonable opportunity to the his nominee parties to the dispute to be heard, make an award on the dispute on or board or the expenses incurred by the parties to the dispute in connection with nominees. the proceedings, and the fees and expenses payable to the Registrar or his nominee or, as the case may be, board of nominees. Such an award shall not be invalid merely on the ground that it was made after the expiry of the period fixed for deciding the dispute by the Registrar, and shall subject to appeal or review or revision, be binding on the parties to the dispute. Appeal 101. Any party aggrieved by any decision of the Registrar or his nominee or against board of nominees under the last preceding section or an order, passed decision of under section 99 may, within two months from the date of the decision Registrar or his nominee or order, appeal to the Government. or board of nominee. Money how 102. Every order passed by the Registrar or a person authorized by him recovered . under section 90 or by the Registrar, his nominee or board of nominees under section 99 or 100 every order passed in appeal under the last preceding section, every order passed by a Liquidator under section 109, every order passed by the Government in appeal against orders under section 109 and every order passed in revision under section 122 shall if not carried out, - (a) on a certificate signed by the Registrar or a liquidator, be deemed to be a decree of a Civil Court, and shall be executed in the same manner as a decree of such Court, or 49 APCS ACT 1978 (b) be executed according to the law and under the rules for the time being in force for the recovery as a public demand under the Bengal Public Demands Recovery Act 1913 : Provided that any application for the recovery in such manner of any such sum shall be made to the collector or Deputy Commissioner and shall be accompanied by a certificate signed by the Registrar, or by an Assistant Registrar to whom said power has been delegated by the Registrar, such application shall be made within twelve months from the date fixed in the order and if no such date is fixed, from the date of the order. 103. Any private transfer or delivery of or encumbrance or charge on, property Private transfer of made or created after the issue of the certificate of the Registrar, property Liquidator or Assistant Registrar, as the case may be, under section made after 102 shall be null and void as against the society on whose application issue of the said certificate was issued. certificate void against society. 104. (1) When in any execution of an order sought to be executed under Transfer or property section 102, any property cannot be sold for want of buyers, if such which cannot property is in occupancy of the defaulter, or of some person on his be sold. behalf, or of some person claiming under a title created by the defaulter subsequently to the issue of the certificate of the Registrar, Liquidator or the Assistant Registrar, under clause (a) or (b) of section 102, the Court or the Collector of the Deputy Commissioner or the Registrar, as the case may be, notwithstanding anything contained in any law for the time being in force, direct that the said property or any portion thereof, shall be transferred to the society which has applied for the execution of the said order, in the manner prescribed. (2) Where property is transferred to the society under the foregoing sub-section, or where property is sold under section 102 the Court, the Collector, the Deputy Commissioner or the Registrar, as the case may be, may in accordance with rules, place the society or the purchaser, as the case may be in possession of the property transferred or sold. (3) Subject to such rules as may be made in this behalf and to any rights, encumbrances, charges or equities lawfully subsisting in favour of any person, such property or portion thereof shall be held under sub-section (1) by the said society on such terms and conditions as may be agreed upon between the Court, the Collector, the Deputy Commissioner or the Registrar, as the case may be, 50 APCS ACT 1978 and the said society. Subject to the general or special orders of the State Government, the Collector, the Deputy Commissioner or the Registrar may delegate to an officer, not below the rank of a Circle Officer for the Assistant Registrar, power exercisable by the Collector, the Deputy Commissioner or the Registrar under this section. Scales of fees 105. The Registrar may by general or special order specify the scale of to be paid to fees and expenses to be paid to his nominees or the board of nominees. the Registrar’s nominees. CHAPTER – X Liquidation Winding up. 106. (I) If the Registrar – (a) after an inquiry has been held under section 84 or an inspection has been made under section 86 or on the report of the auditing of the account of the society, or (b) on receipt of an application made upon a resolution carried by three-fourths of the members of a society present at a special meeting called for the purpose, or (c) of his own motion in the case of a society which – (i) has not commenced working, or (ii) has ceased working, or (iii) processes shares or members’ deposits not exceeding five hundred rupees, or (iv) has ceased to comply with any conditions as to registration and management in this Act or the rules or the bye-laws, is of the opinion that a society ought to be wound up, he may issue an interim order directing it to be wound up. (2) A copy of such order made under clause (a) or sub-clause (iv) of clause (c ) of sub-section (1) shall be communicated in the prescribed manner, to the society calling upon it to submit its explanation to the Registrar within a month from the date of issue of such order, and the Registrar, on giving an opportunity to the society of being heard may issue a final order, vacating or confirming the interim order. Appointment 107. (1) When an interim order is passed under the last preceding section of Liquidator. of a final order is passed under that section, for the winding up a society the Registrar may, in accordance with the rules, appoint a person to be Liquidator of the society, and fix his remuneration. 51 APCS ACT 1978 (2) On issue of the interim order, the officers of the society shall hand over to the Liquidator the custody and control of all the property, effects and actionable claims to which the society is or appears to be entitled, and all books, records and other documents pertaining to the business of the society and, shall have no access to any of them. (3) When a final order is passed confirming the interim order, the officers of the society shall vacate their offices and while the winding up order remains in force, the general body of the society shall not exercise any powers. (4) The person appointed under this section as Liquidator shall, subject to the general control of the Registrar, exercise all or any of the powers mentioned in section 109. The Registrar may remove such persons and appoint another in his place without assigning any reason. (5) The whole of the assets of the society shall on the appointment of the Liquidator under this section vest in such Liquidator, and notwithstanding anything contained in any law for the time being in force if any immovable property is held by a Liquidator on behalf of the society, the title over the land shall be complete as soon as mutation of the name of his office is effected, and no Court shall question the title on the ground of dispossession, want of possession, or physical delivery of possession. (6) In the event of the interim order being cancelled the person appointed as Liquidator shall hand over the property, effects and actionable claims and books, records and other documents of the society to the officers who had delivered the same to him. The acts done, and the proceedings taken by Liquidator, shall be binding on the society, and such proceedings shall after the interim order has been cancelled under the preceding section, be continued by the officers of the society. 108. (1) The Committee, or any member, of the society ordered to be wound Appeal up, may within two months from the date of the issue of the order against order of winding up. made under section 106, appeal to the Government : Provided that no appeal shall lie against an order issued under sub-clause (i), (ii) or (iii) of clause (c ) of sub-section (1) of section 106. (2) No appeal from a member under this section shall be entertained unless it is accompanied by such sum as security for the costs of hearing the appeal, as may be prescribed. 52 APCS ACT 1978 Powers of the 109. The Liquidator appointed under section 107, shall have power subject Liquidator. to the rules and the general supervision, control and direction, of the Registrar, - (a) to institute and defend any suit and other legal proceeding civil or criminal, on behalf of the society, in the name of his office ; (b) to carry on the business of the society, so far as may be necessary for the beneficial winding up of the same ; (c) to sell the immovable and movable property and actionable claims of the society by public auction or private contract, with power to transfer the whole or part thereof to any person or body corporate, or sell the same in parcels ; (d) to raise, on the security of the assets of the society any money required ; (e) to investigate all claims against the society and subject to the provisions of the Act, to decide questions on priority arising out such claims, and to pay any class or classes of creditors in full or rateable according to the amount of such debts, the surplus being applied in payment of interest from the date of liquidation at a rate to be approved by the Registrar, but not exceeding the contract rates ; (f) to make any compromise or arrangement with creditors or persons claiming to be creditors or, having or alleging themselves to have any claim, present or future, whereby the society may be rendered liable ; (g) to compromise all calls or liabilities to calls and debts and liabilities capable or resulting in debts and all claims present or future certain or contingent, subsisting or supposed to subsist, between the society and contributory or alleged contributory or other debtor or person apprehending liability to the society, and all questions in any way relating to or affecting the assets or the winding up of the society, on such terms as may be agreed, and take any security for discharge of any such call, liability, debt or claim, and give a complete discharge in respect thereof ; (h) to determine from time to time, after giving an opportunity to answer the claim, the contribution to be made or remaining to be made by the members or past members or by the estate, nominees, heirs or legal representative of deceased members, or by any officers or the estate or nominees, heirs, or legal representatives of a deceased officer to the asset of the society such contribution being inclusive of debts due from such members or officers ; 53 APCS ACT 1978 (i) to issue requisitions under section 102. (j) to get disputes referred to the Registrar for decision by himself or his nominee or board nominees ; (k) to determine by what persons and in what proportion the cost of the liquidation shall be borne ; (l) to fix the time or times within which the creditors shall prove their debts and claim to be included for the benefit of any distribution made before these debts or claims are proved ; (m) to summon and enforce the attendance of witness and compel the V of 1908. production of any books, accounts, documents, securities, cash or other properties belonging to or in custody of the society by the same means and in the same manner as is provided in the case of a Civil Court under Code of Civil Procedure, 1908 (n) to do all acts, and to execute in the name and on behalf of the society, all deeds, receipts and other documents, as may be necessary to such winding up ; (o) To take such action as may be necessary under section 19, with the prior approval of the Registrar, if there is reason to believe that the society can be re-constructed. 110. After expiry of the period for appeal against the order made under sub- Effect of order of winding up. section (1) of section 106 or where the appeal, has been dismissed the order for winding up shall be effective and shall operate in favour of all the creditors and of all the contributors of the society, as if it had been made on the joint petition of creditors and contributors. When a winding up order becomes effective the liquidator shall proceed to realize the assets of the society by sale or otherwise, and no dispute shall be commenced or, if pending at the date of the winding up order, shall be proceeded with, against the society, except by leave of the Registrar and subject to such terms as the Registrar may impose. The Registrar may, of his own motion, however, entertain or dispose of any dispute by or against the society. 111. Same as expressly provided in this Act, no Civil Court shall take Bar or suit in cognizance of any matter connected with the winding up or dissolution winding up and of a society under this Act ; and when a winding up order has been dissolution made no suit or other legal proceedings shall lie or be proceeded with matters. against the society or the Liquidator, except by leave of the Registrar, and subject to such terms as he may impose : 54 APCS ACT 1978 Provided that where the winding up order is cancelled, the provisions of this section shall cease to operate so far as the liability of the society and of the members thereof, to be sued is concerned, but they shall continue to apply to the person who appointed as Liquidator. Audit of 112. (1) The Liquidator shall, during his tenure of office, at such times as Liquidator’s may be prescribed, but not less than twice each year, present to accaounts. the Registrar an account in the prescribed form of his receipts and payments as Liquidator. The Registrar shall cause the accounts to be audited in such manner as he thinks fit, and for the purpose of audit, the Liquidator shall furnish the Registrar with such vouchers and information as he, or the person appointed by him, may require. (2) The Liquidator shall cause a summary of audited accounts to be prepared and shall send a copy of such summary to every contributory. (3) The Liquidator shall pay such fees as the Registrar may direct for the audit of the accounts and books kept by him in the manner prescribed. (4) The Liquidator shall be held liable for any irregularities which might be discovered in the course or as a result of audit in respect of transactions subsequent to his taking over the affairs of the society and may be proceeded against as if it were an act against which action could be taken under section 90 : Provided that, no such action shall be taken unless the irregularities have caused or are likely to cause loss to the society, and have occurred due to gross negligence or want or omission, in carrying out the duties and functions. Termination of 113. (1) The winding up proceedings of a society shall be closed within three liquidation years from the date of the order of the winding up, unless the period prodeedings. is extended by the Registrar : Provided that the Registrar shall not grant any extension for a period exceeding one year at a time and four years in the aggregate, and shall immediately after the expiry of seven years from the date of the order for winding up of the society, deem that the liquidation proceedings have been terminated and pass an order terminating the liquidation proceedings. Explanation - In the case of a society which is under liquidation at the commencement of this Act, an order for the winding up of the society shall be deemed for the purpose of this section to have been passed on the date of such commencement. 55 APCS ACT 1978 (2) Notwithstanding anything contained in the foregoing sub-section the Registrar shall terminate the liquidation proceedings on receipt of the final report from the Liquidator. The final report of the Liquidator shall state that the liquidation proceedings of the society have been closed and how the winding has been conducted and the property of and the claims of the society have been disposed of and shall include a statement showing a summary of the account of the winding up including the cost of liquidation the amount (if any) standing to the credit of the society in liquidation, after paying of its liabilities including the share on interest of members, and suggest how the surplus should be utilized. (3) The Registrar, on receipt of the final report from the Liquidator, shall direct the Liquidator to convene a general meeting of the members of the society for recording his final report. 114. The surplus assets, as shown in the final report of the Liquidator of a VI of 1890. society which has been wound up ; may either be divided by the Registrar, with the previous sanction of the Government, amongst its members in such manner may be prescribed or be devoted to any object or objects provided in the bye-laws of the society, if they specify that such surplus shall be utilized for the particular purpose or may be utilized for both the purpose. Where the surplus is not so divided among the members and the society has no such bye-law, the surplus vest in the Registrar, who shall hold it in trust and shall transfer it to the reserve fund of a new society registered with a similar object, and serving more or less an area which the society to which the surplus belonged was serving. Provided that, where no such society exists or is registered within three years of the cancellation of the society whose surplus is vested in the Registrar, the Registrar may distribute the surplus, in the manner he thinks best among any or all of the followings : (a) an object of public utility and of local interest as may be recommended by the members in general meeting held under the preceding section ; (b) a federal society with similar objects to which the cancelled society was eligible for affiliation or ; where no federal society exists, the territory level federal society which may be notified in this behalf by the State Government ; and (c) any charitable purpose as defined in section 2 of the Charitable Endowments Act, 1890. 56 APCS ACT 1978 Order for 115. Notwithstanding anything contained in this Act, - winding up of insured Co- (i) an order for the winding up or an order sanctioning a scheme of operative compromise or arrangement or amalgamation or reconstruction Bank etc, and not to be of an insured Co-operative Bank cannot be made save with the made without previous sanction in writing of the Reserve Bank of India ; sanction of Reserve Bank (ii) an order for the winding up of an insured Co-operative Bank shall of India, XII, be made if so required by the Reserve Bank of India in the VII of 1961. circumstances referred to in section 13 D of the Deposit Insurance Corporation Act,1961 ; (iii) if so required by the Reserved Bank of India in the public interest or for preventing the affairs of an insured Co-operative Bank from being conducted in a manner detrimental to the interest of the depositors or for securing the proper management of such Bank, an order shall be made for the supersession of the managing body by whatever name called, of such Bank and for the appointment of an administrator for five years in the aggregate as may from time to time be specified by the Reserve Bank of India. (iv) an order for winding up of an insured Co-operative Bank or an order sanctioning a scheme of compromise or arrangement or of amalgamation or reconstruction or an order for the supersession of the managing body, by whatever name called, of such Bank and appointment of an administrator therefore, made with the previous sanction in writing or on requisition of the Reserve Bank of India shall not be liable to be called in question in any manner ; and XL VII of 1961. (v) the Liquidator or the insured Co-operative Bank or the transferee Bank, as the case may be, shall be under an obligation to repay to the Deposit Insurance Corporation established under section 3 (1) of the Deposit Insurance Corporation Act 1961 in the circumstances, to the extent and in the manner referred to in section 21 of the Deposit Insurance Corporation Act, 1961. XLVII of 1961. Explanation : -For the purpose of this section, an “Insured Co- operative Bank” means a society which is an Insured Bank as defined under the provisions of the Deposit insurance Corporation Act, 1961. 57 APCS ACT 1978 CHAPTER – XI Offences and Penalties 116. (1) No person, other than a society registered or deemed to be Prohibition of use of the registered, under this Act, and a person or his successor in interest word co- of any name of title under which he traded or carried on business at operative. the date on which this Act comes into force, shall without the sanction of the Government, function, trade or carry on business under any name or title of which the word “Co-operative”, or its equivalent in any India language, forms part. (2) Every person contravening the provisions of the foregoing sub-section Offences. shall on conviction, be punished with fine which may extend to five hundred rupees. 117. It shall be an offence under this Act, if – (a) any member of a society transfers any property or interest in the property in contravention of sub-section (2) of section 48 or any person knowingly acquires, or abets in the acquisition of, such property ; (b) any employer and every director, manager, secretary or other officer or agent acting on behalf of such employer who without sufficient cause, fails to comply with sub-section (2) of section 50 ; or (c) a committee of a society or an officer or member thereof fails to invest funds of such society in the manner required by section 71 ; or (d) any person, collecting share money for a society information does not within a reasonable period deposit the same in the Apex Bank, or an urban Co-operative Bank, or Postal Savings Bank ; or (e) any person, collecting share money for a society in formation makes use of the funds so raised for conducting any business or trading in the name of a society be registered or otherwise ; or (f) a committee of a society, or an officer member thereof fails to comply with the provisions of sub-sections (2), (3) or (4) of section 76 ; or (g) any officer or member of a society who is in possession of information, books and records, fails to furnish such information or produce books and papers, or give assistance to a person appointed or authorized by the State Government or the Registrar under Sections 79, 82, 84, 86 or 98 or 107 ; or 58 APCS ACT 1978 (h) any officer of a society fails to hand over the custody of books, records, cash, security and other property belonging to the society of which he is an officer to a person appointed under section 79 or 107 ; or (i) a committee of a society with a working capital of fifty thousand rupees or more, or any officer or a member thereof, fails without any reasonable excuse to give any notice, send any return or document, do or allow to be done anything, which the committee, officer or member is by this Act required to give, send, do or allow to be done or comply with orders made under section 80, or (j) a committee of a society or an officer or member thereof willfully neglects or refuse to do any act, or to furnish any information required for the purposes of this Act, the Registrar, or other person duly authorized by him in writing in this behalf ; or (k) a committee of a society or an officer or member thereof willfully makes a false return or furnishes false information or fails to maintain proper accounts ; (l) any member, officer, agent or servant of a society fails to comply with the requirements of sub-section (4) of section 82 ; or (m) any officer or a member of a society willfully fails to comply with any decision, award or order passed under section 97 ; or (n) a member of a society fraudulently disposes of property over which the society has a prior claim or a member or officer or employee or any person disposes of his property by sale, transfer, mortgage, gift or otherwise with the fraudulent intention of evading the dues of the society ; or (o) any officer of a society willfully recommends or sanctions for his own personal use or benefit or for the use or benefit of a person in whom he is interested a loan in the name of any other person ; or (p) any officer or member of a society destroys, mutilates, tampers with or, otherwise alters, falsifies or secrets or is privy to the destruction, mutilation, alteration, falsification or secreting of any books, paper or securities or makes or is privy to the making of any false or fraudulent entry in any register, book of account or document belonging to the society ; or (q) any officer or member of a society or any person does any act declared by the rules to be an offence. Explanation-For the purpose of this section an officer or a member referred to in the section shall include past officer and past member, as the case may be. 59 APCS ACT 1978 118. Every society, officer or past officer, member or past member, or past Punishment for offences under employee of a society, or any other person who commits an offence section 117. under section 117 shall, on conviction be punished, - (a) if it is an offence under clause (a) of that section, with imprisonment for a term which may extended to six months or with fine which may extend to five hundred rupees, or with both ; (b) if it is an offence under Clause (b) of that section, with imprisonment for a term which may extend to one month, or with fine which may extend to five hundred rupees, or with both ; (c) if it is an offence under clause (c) of that section, with fine which may extend to five hundred rupees ; (d) if it is an offence under clause (d) of that section, with fine which may extend to five hundred rupees ; (e) if it is an offence under clause (e) of that section, with imprisonment for a term which may extend to one year, or with fine, which may extend to one thousand rupees, or with both ; (f) if it is an offence under clause (f) of that section, with fine which may extend to two hundred and fifty rupees ; (g) if it is an offence under clause (g) of that section, with fine which may extend to five hundred rupees ; (h) if it is an offence under clause (h) of that section, with fine which may extend to five hundred rupees ; (i) if it is an offence under clause (i) of that section, with fine which may extend to five hundred rupees ; (j) if it is an offence under clause (j) of that section, with imprisonment for a term which may extend to one month, or with fine which may extend to five hundred rupees, or with both ; (k) if it is an offence under clause (k) of that section, with imprisonment for a term which may extend to one year or with five which may extend to two thousand rupees, or with both ; (l) if it is an offence under clause (l) of that section, with fine which may extend to one hundred rupees ; (m) if it is an offence under clause (m) of that section, with imprisonment for a term which may extend to six months, or with fine which may extend to five hundred rupees, or with both ; (n) if it is an offence under clause (n) of that section, with imprisonment for a term which may extend to six months or with fine which may extend to one thousand rupees, or 60 APCS ACT 1978 (o) it is an offence under clause (o) of that section, with imprisonment for a term which may extend to three years, or with fine or with both ; (p) if it is an offence under clause (p) of that section, with imprisonment for a term which may extend to three years, or with fine or with both ; (q) if it is an offence under clause (q) of that section, with fine which may extend to two hundred and fifty rupees. Congnizance of 119. (1) A Magistrate of the First Class or a Magistrate of Second Class offences. shall try any offence under this Act. (2) Notwithstanding anything contained in the Code of Criminal Procedure, 1973, it shall be lawful for a Magistrate of the First Class or a Magistrate or Second Class to pass a sentence or fine on any person convicted of an offence under clause (b) of section 117 as provided under section 118 in excess of his powers under section 29 of that Code. (3) No prosecution under this Act shall be lodged except with the previous sanction of the Government in the case of an offence under clause (b) of section 117 and of the Registrar in the case of any other offence under this Act. Such sanction shall not be given except after hearing the party concerned by an officer authorized in this behalf by the Government by a general or special order. CHAPTER – XII Appeals, Review and Revision 120. (1) An appeal against an order or decision under sections 4, 9, 11, 12, 13, 14, 17, 18, 19, 21, 29, 35, 79, 106 and 109 shall lie : (a) if made or sanctioned or approved by the Registrar or the Additional or Joint Registrar on whom powers of the Registrar are conferred, to the Government ; (b) If made or sanctioned by any person other than the Registrar, or the Additional or Joint Registrar on whom the power of the Registrar are conferred, to the Registrar. (2) An appeal against an order or decision under sections 80, 87 and 90 and any order passed by the Registrar for paying compensation to a society, shall lie to the Government. (3) An appeal under sub-section (1) or (2) shall be filed within two months of the date of the communication of the order or decision. 61 APCS ACT 1978 (4) Same as provided in thisAct no appeal shall lie against any order, decision or award passed in accordance with this Act ; and every such order, decision or award shall be final and where any appeal has been provided for, any order passed on appeal shall be final and no further appeal shall lie against it. 121. In all cases in which it is provided under this Act that an appeal may be Extension of period of filed against any decision or order within a specified period, the appellate limitation by authority may admit an appeal after the expiry of such period, if the appellate appellant satisfied the appellate authority that he had sufficient cause authority in for not preferring the appeal within such period. certain cases. 122. The Government and the Registrar may call for and examine the record Power of of any enquiry or the proceedings of any other matter conducted by any Government and Registrar to call officer subordinate to them for the purpose of satisfying themselves as for proceedings to the legality or property of any decision or order passed and as to the of subordinate regularity of the proceedings of such officer. If in any case, it appears to officers and to the Government or the Registrar, that any decision or order or pass order. proceedings so called for should be modified, annulled or reversed, the Government or the Registrar, as the case may be, may, after giving persons affected there by an opportunity of being heard pass such order thereon as may seem just. CHAPTER – XIII Miscellaneous 123. (1) Unless otherwise provided by this Act all sums due from a society Recovery of sum due to or from an officer or members or past member or a deceased Government. member of a society as such to the Government, may be recovered according to the law and under the rules, for the time being in force for the recovery as a public demand under the Bengal Public Demands Recovery Act, 1913. (2) Sums due from a society to the Government and recoverable under Liability.

the foregoing sub-selection may be recovered, firstly from the property of the society, secondly in the case of a society of which the liability of the members is limited from the members or past members or the estate of deceased members subject to the limit of their liability, and thirdly, in the case of societies with unlimited liability ; from the members or past members of estate of deceased member. (3) The liability or past members or estate of deceased members shall in all cases be subject to the provisions of section 33. 62 APCS ACT 1978 Registrar’s 124. (1) The Registrar or any officer subordinate to him and empowered by powers to him in this behalf may, subject to such rules as may be made by recover certain the Government, but without prejudice to any other mode of recovery sums by attachment provided by or under this Act, recover, - and sale of (a) any amount due under a decree or order of Civil Court obtained property. by a society ; (b) Any amount due under decision, award or order of the Registrar, Arbitrator or Liquidator ; (c) any sum awarded by way of cost under thisAct ; (d) any sum ordered to be paid under thisAct as a contribution to the assets of the society ; together with interest if any, due on such amount or sum and costs or process by the attachment and sale or by sale without attachment of the property of the person against whom such, decree, decision, award or order has been obtained or passed. (2) The Registrar or the officer empowered by him shall be deemed, when exercising the powers under the foregoing sub-section, when passing any orders on any application made to him for such recovery to be a Civil Court for the purposes of articles 136 in the Schedule to the Indian Limitation Act, 1963. Power to 125. The Government may by general or special order to be published in the exempt Official Gazette, exempt any society or class of societies from any of societies from the provisions of this Act, or may direct that such provisions shall apply provisions of to such society or class of societies with such modifications not Act. affecting the substance thereof as may be specified in the order : Provided that, no order to the prejudice of any society shall be passed, without an opportunity being given to such society to represent its case. Delegation of 126. The Government may, by notification in the Official Gazette and subject power of to such conditions (if any) as it may think fit to impose delegate all or Registrar to any of the powers of the Registrar under this Act to any federal authority federal or to an officer thereof and such officer shall work under the general authorities. guidance, superintendence and control of the Registrar, specified in the notification. Branches etc. 127. (1) No society shall open a branch or a place of business outside the of societies State of Arunachal Pradesh and no Cooperative society registered outside the under law elsewhere in India shall open a branch or a place of State. business in the State of Arunachal Pradesh without the permission of the Registrar. 63 APCS ACT 1978 (2) Every co-operative society registered under any law elsewhere in India, and permitted to open a branch or place of business in the State of Arunachal Pradesh under the foregoing sub-section, or which has a branch or a place of business in the State of Arunachal Pradesh at the commencement of this Act, shall within three months from the opening of such branch or place of business or from the commencement of this Act, as the case may be, file with the Registrar a certified copy of the bye-laws and amendments and if these are not written in English language, a certified translation thereof in English or Hindi, and shall submit to the Registrar such returns and information as are submitted by similar societies registered under this Act in addition to those which may be submitted to the Registrar of the State/State where such society is registered. 128. (1) On the election of a new committee and its chairman the retiring Handing over Chairman, in whose place the new Chairman is elected shall records and property to handover charge of the office of the committee and all papers and new Chairman property, if any, of the society in possession of the committee or on election. any officer thereof, to the new Chairman of the committee. (2) If the retiring Chairman fails or refuse to hand over charge or to hand over the papers and property of the society as aforesaid the Registrar, or any person, empowered by him in this behalf may by order in writing direct him to forth-with hand over such charge and property. (3) If the retiring Chairman to whom a direction has been issued as aforesaid does not comply with such direction, he shall on conviction be punished with simple imprisonment which may extend to one month, or with fine which may extend to five hundred rupees, or with both; and the Registrar may, on the retiring Chairman’s failure to comply with such direction, make order for seizing the records and property and handing it over to the new Chairman in the manner provided in section 81. 129. The Registrar, a person exercising the powers of the Registrar, a person Registrar and other officers authorized to audit the accounts of a society under section 82, or to to be public hold an inquiry under section 84, or to make an inspection under section servants. 86, and a person appointed as an administrator under section 79, or as a nominee or board of nominee or board of nominees under section 97, or as a Liquidator under Section 107 shall be deemed to be public servants within the meaning of section 21 of the Indian Penal Code. 130. No suit, prosecution or other legal proceeding shall lie against the Indemnity for act done in Registrar or any person subordinate to him or acting on his authority, in good faith. respect of anything in good faith done or purported to be done by him or under this act. 64 APCS ACT 1978 Bar of 131. (1) Same as expressly provided in this Act, no Civil or Revenue Court jurisdiction of shall have any jurisdiction in respect of – Courts. (a) the registration of society or its bye-laws or the amendment of its bye-laws, or the dissolution of the committee or a society or the management of the society on dissolution thereof ; (b) any dispute required to be referred to the Registrar or his nominee, or board of nominees, for decision : or (c) any matter concerned with the winding up and dissolution of a society. (2) While a society is being wound up no suit or other legal proceedings relating to the business of such society shall be proceeded with or instituted against the society or any member thereof or any matter touching the affairs of the society, except by leave of the Registrar, and subject to such terms as he may impose. (3) All orders, decisions or awards passed in accordance with this Act or the rules shall, subject to the provisions for appeal or revision in this Act, be final and no such order, decision or award shall be liable to be challenged, set aside modified, revised or declared void in any Court upon the merits or upon any other ground whatsoever except for want of jurisdiction. Notice 132. No suit shall be instituted against a society or any of its officers in necessary in respect of any act touching the business of the society, until the suits. expiration of two months next after notice in writing has been delivered to the Registrar or left at his office, stating the cause of action, the name, description and place or residence of the plaintiff and the relief which he claims and the plaint shall contain a statement that such notice has been so delivered or left. Rules. 133. (1) The Government may for the whole or any part of the Territory and for any society or class of societies make rules for the conduct and regulation of the business of such society or class of societies and for carrying out the purpose of this Act. (2) In particular, and without prejudice to the generality of the foregoing power such rules may – (i) subject to the provisions of section 3 prescribe the delegation of powers vested in the Registrar to persons appointed to assist the Registrar ; 65 APCS ACT 1978 (ii) prescribe the forms to be used and the conditions to be complied with in the making of applications for the registration of a society under section 8 and the procedure in the matters of such application ; (iii) prescribe the matters in respect of which a society may make or the Registrar may direct a society to make bye-laws and the procedure to be followed in making, altering and abrogating bye-laws and the conditions to be satisfied prior to such making alteration or abrogation ; (iv) prescribe the form of an procedure for an application under section19 and the procedure for reconstruction of a society under that section ; (v) prescribe the conditions to be complied with by a person applying for admission or admitted as a member and provide for the election and admission of member and the payment to be made and the interest to be acquired before the exercise of the right of membership ; (vi) prescribe in the case of a federal society or class of federal societies the proportion of individual members to society members in such society or class or societies and the proportion of individual members to society members in the committee or such society or class of societies. (vii) subject to the provisions of sections 28, prescribe the maximum number of shares or portion of the capital of a society which may be held by a member ; (viii) prescribe the procedure for the admission of joint members, members of a joint undivided family and minors and persons of unsound mind inheriting the share or interest of deceased members and provide for their rights and liabilities. (ix) provide for the withdrawal, removal or expulsion of members and for the payments to them and for the liabilities of passed members and the estate of deceased members ; (x) prescribe the conditions and procedures for the transfer of shares or interest ; (xi) provide for the nomination of a person to whom the share or the interest of a deceased member may be paid or transferred. (xii) provide for ascertaining the value of a share or interest of a past member or deceased member ; 66 APCS ACT 1978 (xiii) prescribe the payments to be made and the condition to be complied with bymembers applying for loans the period for which loans may be made and the amount which may be lent to an individual member ; (xiv) provide for the inspection of documents in the Registrar’s office and the levy of fee for granting certified copies of the same. (xv) provide for the procedure for registering the address of a society and the change of its address ; (xvi) provide for the formation and maintenance of a register of members and where the liability of members is limited by shares, of a register of shares and list of members ; (xvii) provide for securing that the share capital of any society shall be variable in such a way as it may be necessary to secure that the share shall not appreciate in value andthat necessary capital shall be available for the society as required ; (xviii) provide for the procedure to be adopted by a society with limited liability in order to reduce its share capital ; (xix) prescribe the period for and terms upon which Government aid and may be given to societies and terms under which Government may subscribe to the share capital of and guarantee the payment of the principal of and interest on debentures issued by society. (xx) regulate the manner in which funds may be raised by a society or class of societies by means of shares or debenturesor otherwise and the quantum of funds so raised ; (xxi) prescribe the limits for loans to be granted by a society or class of societies against different class of securities or without security and the procedure for granting loan ; (xxii) prescribe the manner of recalling a loan ; (xxiii) prescribe the limits for granting credit by a non-credit society or a class of non-credit societies ; (xxiv) prescribe the prohibitions and restrictions subject to which societies may trade or transact business with persons who are not members ; (xxv) prescribe the conditions on which any charge in favour ofa society shall be satisfied and the extent to which and the order in which the property to the charge shall be used in its satisfaction ; 67 APCS ACT 1978 (xxvi) provide for giving reasonable notice of the charge under section 49 ; (xxvii) prescribe the procedure by which a society shall calculate and write off bad debts ; (xxviii) prescribe the sums which in addition to those referred to in section 66 (1) shall be deducted from profits before arriving at the profit for the purpose of section 66(2) ; (xxix) provide for the formation and maintenance of reserve fund and the objects to which such fund may be applied and for the investment and use of any fund including reserve fund under the control of a society ; (xxx) prescribe the conditions under which profits may be distributed as dividend and bonus among the members and non-members of a society. (xxxi) prescribe the rate of which a society shall contribute towards the educational fund of the Territory level federal society under section 69 ; (xxxii) define the co-operative purpose for which a society shall under section 70, utilize its fund ; (xxxiii) prescribed the mode of investment of funds of a society under section 71 and the proportion of investment in any security or class of securities ; (xxxiv) provide for the payment of contribution to any provident fund which may be established by a society for the benefit of officers and servants employed by it and for the administration of such provident fund ; (xxxv) prescribe the procedure and conditions for the exercise by a federal society of the powers conferred by this Act. (xxxvi) provide for general meetings of the member for the procedure at such meetings and the powers to be exercised by such meetings ; (xxxvii) prescribe the conditions in which a member of a society may be disqualified from voting ; (xxxviii) provide for the appointment, suspension and removal of the members of the committee and other of officers and for the appointment of administrator under section 79 and prescribe procedure for meeting of the committee and for the powers to be exercised and the duties to be performed by the committee, administrator and other officers ; 68 APCS ACT 1978 (xxxix) prescribe qualifications for members of the committee and employees of a society or class of societies and the condition of service subject to which persons may be employed by societies ; (xI) prescribe the returns to be submitted by a society to the Registrar and provide for the person by whom and the form in which such returns shall be submitted ; (xIi) provide for the persons by whom and the form in which copies of documents and entries in books of societies may be certified and the charges to be levied for the supply of copies thereof ; (xIii) provide for the procedure to be adopted by the Registrar in the cases where the taking of possession of books, docu- ments, securities, cash and other properties of a society the affairs of which have been ordered to be wound up, by the Registrar or by a person entitled to the same is resisted or obstructed ; (xIiii) provide for the procedure to be adopted for taking possession of books, documents, securities, cash and other property of a society by a person acting under sections 82, 84 and 86 in cases where misappropriation of funds, breach of trust or fraud has been committed or where it is suspected or apprehended that the books documents, securities, cash and other properties are likely to be tempered with or destroyed or removed ; (xIiv) prescribe the accounts and books to be kept by a society or class of societies ; (xIv) prescribe the procedure for conducting an audit the matters on which the auditor shall submit a report, the form in which the statement of account shall be prepared for this audit, the limits within which the auditor may examine the monetary transaction of a society, the form of audit, memorandum and report and the charges, if any, to be paid by a society for audit ; (xIvi) prescribe the procedure for appointment of auditors under section 82. (xIvii) prescribethe form for the rectification of defects discovered in the course of audit inspection or inquiry ; (xIviii) prescribed the procedure and principles for the conduct of inquiry under section 84 and inspection under section 86 ; 69 APCS ACT 1978 (I) prescribe the manner in which appointment shall be made and control exercised by, and the number of persons comprising and functions to be performed by, the authority constituted under section 92, the manner of election and nomination of such persons, the fees to be paid to such authority and the manner of such payment and the procedure for and the method of calculating any cost, charges or expenses required to be levied under this Act or the rules ; (Ii) provide for appointment of the Registrar’s nominee or board of nominees, procedure to be followed in proceedings before the Registrar or his nominee or board of nominees and for fixing and levying the expenses for determining the disputes and for enforcing the decision or awards in such proceedings. (Iii) prescribed the form in which a dispute shall be referred to the Registrar ; (Iiii) provide for the issue and service of processes and for providing of service thereof ; (Iiv) provide for the investigation of claims and objections that may be preferred against any attachment effected by the Registrar ; (Iv) prescribe the procedure for and the method of recovery of any sums due under this Act or the rules ; (Ivi) prescribe the procedure to be followed for the custody of property attached under section 99 ; (Ivii) prescribe the procedure to be followed in the execution of awards ; (Iviii) prescribe the manner in which any property shall be delivered to and the terms and conditions subject to which such property shall be held by a society under section 104 ; (Iix) prescribe the procedure for attachment and sale of property for the realization of any security given by a person in the course of execution proceedings : (Ix) prescribe the procedure and conditions for the exercise of the powers conferred under section 109 and the procedure to be followed by a Liquidator and provide for the disposal of surplus assets ; (Ixi) prescribe the matters in which an appeal shall lie from the order of Liquidator appointed under section 107 ; 70 APCS ACT 1978 (Ixii) prescribe the procedure to be followed in presenting and disposing of appeals ; (Ixiii) prescribe in the case of appeals lying to the Government the authority to which power of hearing appeals may be delegated ; (Ixiv) prescribe the method of communicating or publishing order, decision or award required to be communicated or published under this Act or the rules ; (Ixvi) provide for all other matters expressly required or allowed by this Act to be prescribed by rules ; (Ixvii) prescribe the procedure to be followed and conditions to be observed for change of name or liability, amalgamation, transfer, division, conversion or reconstruction of society. (3) All rules made under thisAct shall be subjected to the condition of previous publication and every rule made by the Government of Arunachal Pradesh under this Act shall be laid, as soon as may be after it is made, before the Legislature of Arunachal Pradesh while it is in session for a total period of four days which may be comprised in one session or in the successive session, and if before the expiry of the session in which it is so laid or the session immediately following, the Legislature agrees in making any modification in the rule or the Legislature agrees that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of effect as the case may be ; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule. Companies 134. For the removal of doubt it is hereby declared that the provisions of the Act not to Companies Act, 1956, shall not apply to societies registered or deemed apply 1 of 1956. to be registered under this Act. Repeal and 135. On the day on whichArunachal Pradesh Co-operative SocietiesAct, savings. 1978 comes into force, the Co-operative Societies Act, 1912 as in force in the State of Arunachal Pradesh shall stand repealed provided that the repeal shall not affect. Extension of (a) The previous operation of theAct so repealed or anything duly deposit done or suffered there under ; or insurance Scheme to (b) Any right, privilege, obligation or liability acquired, accrued or co-operative incurred under the Act so repealed ; or Bank. (c) any penalty, forfeiture or punishment incurred in respect of any offence committed against the Act so repealed ; or 71 APCS ACT 1978 (d) any investigation, legal proceeding or remedy in respect of any such right privilege, obligations reality penalty, forfeiture or punishment as aforesaid, and any such investigation, legal proceeding or remedy may be instituted continued or enforced, and any such penalty, forfeiture or punishment may be imposed as if that Act had not been repealed. CHAPTER –XIV Insured Co-operative Banks 135. A. Notwithstanding anything contained in thisAct, in the case of an insured Co-operative Bank. (i) an order for winding up or an order sanctioning a scheme of compromise or arrangement or of amalgamation or reconstruction (including division or re-organization) of the bank may be made only with the previous sanction in writing of the Reserve Bank of India ; (ii) an order for the winding up of the Bank shall be made by the Registrar if so required by the Reserve Bank of India in the circumstances referred to in section 13D (1) of the Deposit Insurance Corporation Act, 1961. (iii) if so required by the Reserve Bank of India in the public interest or for preventing the affairs of the bank being conducted in a manner detrimental to the interests of the depositors or for securing the proper management of the bank, an order shall be made for the supersession (removal) or the committee of management or other managing body (by whatever name called) of the bank and the appointment of an Administrator therefore for such period or periods, not exceeding five years in the aggregate, as may from time to time be specified by the Reserve Bank of India, and the administrator so appointed shall, after the expiry of his term of office, continue in office until the day immediately preceding the date of the first meeting of the new Committee. (iv) no appeal, revision or review shall lie or be permissible against an order such as is referred to in clause (i), (ii) or (iii) made with the previous sanction in writing or on the requisition of the Reserve Bank of India and such order or sanction shall not be liable to be called in question in any manner ; 72 APCS ACT 1978 (v) the liquidator or the insured Co-operative bank or transferee bank, as the case may be, shall be under an obligation to repay the Deposit Insurance Corporation established Under the Deposit Insurance Corporation Act, 1961 in the circumstances, to the extent and in the manner referred to in Section 21 of that Act. Explanation- (i) For the purposes of this section ‘a Co-operative bank’ means a bank as has been defined in the Deposit Insurance Corporation Act, 1961. (ii) ‘Insured Co-operative bank’ means a society which is an insured bank under the provisions of the Deposit Insurance Corporation Act, 1961. (iii) ”Transferee bank” in relation to an insured Co-operative bank means a co-operative bank : (a) with which such insured co-operative bank is amalgamated, or (b) to which the assets and liabilities of such insured Co-operative bank are transferred, or (c) into which such insured co-operative bank is divided or converted under the provisions section 18(i). CHAPTER – XV Special provisions applicable to Societies in Co-operative Credit Structure Over-riding 136. The provisions of the Chapter shall have effect, notwithstanding anything effect. contrary or inconsistent contained in any other Chapter of the Act or any other law for the time in force or any instrument having effect by virtue of this Act or any other law. Definitions. 137. In this chapter, unless the context otherwise requires : (a) ‘Cooperative Credit Structure’ includes the State Co-operative Bank, Large Sized Multipurpose Co-operative Societies registered under the Act. (b) ‘National Bank’ means National Bank for Agriculture and Rural Development established under section 3 of National Bank for Agriculture and Rural Development Act, 1981 (Act 61 of 1981). (c) ‘Reserve Bank’ means Reserve Bank of India established under section 3 of the Reserve Bank of India Act, 1934 (Act No.2 of 1934). (d) Words and expression used in this Chapter but not defined shall have the meaning assigned to in the Principal Act. 73 APCS ACT 1978 138. No person or group of persons other than a member or members under Members to borrow or section 22 shall be eligible to borrow or make deposit in Large Sized made Multipurpose Co-operative Societies. deposits. 139. (1) The Committee of every society in a Co-operative Credit Structure Power of the shall have freedom and power to decide its financial and internal Committee. administrative matters including : (i) interest rate on deposits and loans subject to the directives issued by the Reserve Bank. (ii) Borrowing, investment, loaning, policies (including individual loans) and other business policies. (iii) Personal policies including issues relating to recruitment promotion, staffing, training, posting and compensation to staff as per business requirement of the society ; (iv) Internal check and control systems, appointment of auditors, their compensation and other internal administrative issues ; (v) Affiliation or disaffiliation in a federal structure as per the choice of the society including entry and exit there from ; (vi) Area of operation as per business requirements of the societies without any geographical restrictions ; (vii) Dividend payable to members of the society subject to guidelines issued by the Registrar as per the criteria specified by the National Bank. 140. The Committee of a Society in Co-operative Credit Structure shall have Borrowing and power : Investment. (a) To borrow from any bank or financial institution regulated by the Reserve Bank and avail refinance from the National Bank or any other refinancing body directly or through any financial institution regulated by the Reserve Bank. (b) To keep its deposits and invest its surplus in any Bank or financial institution regulated by the Reserve Bank taking into account the interest of the Society and its members. 141. (1) No members of a society in Co-operative Credit Structure shall be Disqualification eligible to be elected as member or other office bearer in the Com- of members and other mittee if he is in default for a period of 12 months in payment of office bearers. dues to the Society. 74 APCS ACT 1978 (2) No person elected as member or other office bearer in the Committee of a society in Co-operative Credit Structure shall be allowed to act as such if he is in default for a period exceeding 12 months in payment of dues to the society unless the amount in default with due interest is paid to the Society. (3) No member or office bearer of Large Sized Multipurpose Cooperative Societies shall be eligible to be elected as member or office bearer in the Committee of the State Co-operative Bank or can be permitted to hold such post if the society is in default in payment of dues to the State Co-operative bank for more than one year unless amount in default with due interest is paid to be State Co-operative Bank. (4) No member of a non-credit society who is member in the Committee of the State Co-operative Bank shall be allowed to act as such if the society commits default for a period exceeding ninety days in payment of dues to the Bank. (5) No member of the Committee of Large Sized Multipurpose Cooperative Societies superseded under section 143 shall be eligible to contest election for its membership for period of three years from the date of supersession. Co-option of 142. If members with professional background as stipulated by the Reserve Professional Bank are not elected in required number in the Committee of the in Commi- State Co-operative Bank to the extent of shortfall, such vacancies ttees. shall be filled by Co-option of such persons in the Committee and such co-opted members shall have full voting rights. Supersession 143. (1) No Committee of Large Sized Multipurpose Co-operative Societies of Committee. shall be superseded by the Registrar unless one of the following conditions exists – (i) it incurs loss for three consecutive years, or (ii) serious financial irregularities are identified, or (iii) there are judicial directives to this effect or there is perpetual lack of quorum. (2) No Committee of Large Sized Multipurpose Cooperative Societies shall be placed under supersession for more than six months. (3) No Committee of the State Cooperative Bank or a Central Cooperative Bank shall be superseded without prior consultation with Reserve Bank. 75 APCS ACT 1978 144. No Society in Co-operative Credit Structure shall be directed by the Contribution of Fund. State Government or otherwise required to contribute to any fund other than those for improving the net worth and owned fund of the society. 145. There shall not be any cadre system in Co-operative Credit Structure Abolition of Cadre with effect from such date as may be notified by the State Government. System. 146. (1) Audit of the State Co-operative Bank shall be conducted by Chartered Audit. Accountants from the panel approved by the National Bank. (2) The Registrar shall cause a special audit of State Co-operative Bank on the recommendation of the Reserve Bank and shall submit a copy of the report of such special audit to the Reserve Bank and National Bank within the period specified by the Reserve Bank. 147. (1) The Registrar on receipt of an application for approval and registration Obligation of of amendments in Bye-laws of a society in a Co-operative Credit the Registrar. structure made as per the provisions of the Act, shall dispose of such applications within thirty days of its receipt. (2) The Registrar shall ensure that (a) Regulatory prescriptions or directives for the State Co-operative Bank by the Reserve Bank are complied with; (b) The elections of the office bearers of the Committee of a Society in the Co-operative credit Structure are completed before the expiry of its term. (c) The Committee of a society in a Co-operative Credit Structure is not placed under supersession for a period exceeding six months and the election are completed well before expiry of the period of supersession. (d) Supervisory prescriptions and guidelines for Large Sized Multipurpose Co-operative Societies issued by the National Bank are complied with. (e) Guidelines for payment of dividend to members by Large Sized Multipurpose Cooperative Societies are issued, subject to cri- teria specified by the National Bank. (3) A Person who does not fulfill the eligibility criteria for the post of Chief Executive Officer or a member in the Committee of the State Co- operative Bank as stipulated by the Reserve Bank shall be treated as ineligible for such post and if such person is holding the post, he shall be removed by the Registrar on receipt of advice to this effect from the Reserve Bank or the National Bank. 76 APCS ACT 1978 (4) No Large Sized Multipurpose Co-operative Societies shall use the word “Bank”, “Banking”, “Banker” or any other derivative of the word“Bank” in its name and the society using such name shall be de-registered by the Registrar. (5) The State Co-operative Bank shall be liable to be wound up in public interest at the advice of the Reserve Bank and the Registrar shall take action in this behalf including appointment of a liquidator within 30 days of receipt of advice from the Reserve Bank. (6) Prescribe prudential norms including capital to risk weighted asset ratio for all the Large Sized Multipurpose Co-operative Societies in consultation with National Bank. Equity in 148. (1) The capital of 25% State equity would be applicable to State Co- Co-operative. operative Banks (SCBs) in the normal course but the State Government would be permitted to contribute equity in excess of this limit only if equity infusion is required in the SCB to enable it to comply with section 11(1) of the Banking Regulation Act, 1949 (Act 10 of 1949). There will be only one Government representative on the Board of SCB. The CEO of the SCB shall not be regarded as the representative of the State Government. However, there will be no Government nominee on the Board of PACS/LAMPS/FSS irrespective of the State equity in such an entity. Provided that the State Government may contribute equity in excess of the aforesaid limit only if equity infusion is required in the State Co-operative Bank, to enable it to comply with section 11(1) of the Banking Regulation Act, 1949 (Central Act 10 of 1949). Role of the 149. (1) No society in Co-operative Credit Structure shall be exempted by State the State Government in any manner from the application of the Government. provisions of this chapter without prior approval of the Reserve Bank or the National Bank. The State Government shall not do anything or take any action or issue any order or directive which may have effect of curtailing any of the freedoms or powers given under this chapter to the societies in Co-operative Credit Structure or adversely affect the operation of the provisions of this chapter. Promotion of 150. The State shall endeavour to promote voluntary formation, autonomous Co-operative functioning, democratic control and professional management of Societies. Co-operative Societies. 77 APCS ACT 1978 Facts and Dates Amendment of Section 6 (1) Insertion of Section 135 (A) Insertion of Chapter XV Substitution of Section 76, 79 & 82 Insertion of sub-section 35, 36, 37, 38, 39, 40 under Section 2 Substitution of sub-section 28 & 31 of Section-2 Insertion of 74(A) and 74(B) Addition of Section 150 NOTE : The words “Union Territory of Arunachal Pradesh”wherever they occurred in the previous edition of this Act have been substituted by the words “State of Arunachal Pradesh” in terms of“The State of Arunachal Pradesh Adaptation of Laws Orders” (No. 2), 1987. This revised edition of the Arunachal Pradesh Cooperative Societies Act, 1978 is an effort of Development Branch Team of the office of the Registrar of Cooperative Societies, Arunachal Pradesh, Naharlagun. ______ 78 APCS ACT 1978 CONTENTS Page No. CHAPTER - 1 1 Preliminary CHAPTER – II 5 Registration CHAPTER – III 12 Members and their Right and Liabilities CHAPTER – IV 18 Incorporation, Duties and Privilege of Societies CHAPTER – V 24 State Aid to Societies CHAPTER – VI 27 Property and Funds of Societies CHAPTER -VII 30 Management of Society CHAPTER – VIII 36 Audit, Inquiry, Inspection and Supervision CHAPTER – IX 43 Disputes and Arbitration CHAPTER – X 50 Liquidation CHAPTER – XI 57 Offences and Penalties CHAPTER – XII 60 Appeals, Review and Revision CHAPTER – XIII 61 Miscellaneous CHAPTER – XIV 71 Insured Cooperative Banks CHAPTER – XV 72 Special Provisions Applicable to Societies in Cooperative Credit Structure Facts and Dates 77 79 APCS ACT 1978 THE ARUNACHAL PRADESH COOPERATIVE SOCIETIES ACT 1978 (AS AMENDED UPTO 31ST JULY 2014) GOVERNMENT OF ARUNACHAL PRADESH DEPARTMENT OF COOPERATION 2014 Printed at Directorate of Printing 735/2014-Dy.Registrar (Co-operative)-200-10-2014.