Gangadharan on The Kerala Co-operative Societies Act and Rules - Suresh G

Chapter - KCS Act - Chapter 1

KCS Act - Chapter 1

 THE KERALA
CO-OPERATIVE SOCIETIES ACT, 1969
(Act 21 of 1969)

 
An Act to consolidate, amend and unify the laws relating
to Co-operative Societies in the State of Kerala.
1[Preamble:- WHEREAS with a view to provide for the orderly development of the Co-operative sector in the State, 2[it is essential to organise the Co-operative Societies in accordance with Co-operative principles as self governing], democratic institutions, to achieve the objects of equity, social justice and economic development, as envisaged in the directive principles of State Policy of the Constitution of India, 3[and to promote scientific and technological development, health care, market intervention and management excellence in the Co-operative Sector] it is expedient to consolidate, amend and unify the law relating to Co-operative Societies in the State].
Be it enacted in the Nineteenth Year of the Republic of India as follows:-

CHAPTER 1
PRELIMINARY

1. Short title, extent and commencement.- (1) This Act may be called the Kerala Co-operative Societies Act, 1969.
(2) It extends to the whole of the State of Kerala.
(3) It shall come into force on such date as the Government may, by notification in the Gazette, appoint:*
Provided that different dates may be appointed for different provisions of this Act and any reference in any such provision to the commencement of this Act shall be construed as a reference to the coming into force of that provision.
Notes
*This Act came into force on 15-5-1969 by Notn. No. 24314/C3/69 AD dt.12-5-1969. This Act was published in K.G. Ex. 102 dt. 11-4-1969. The Bill therefor was published in K. G. Ex. 94. dt. 13. 6. 1967 and the Report of the Select Committee was published in K. G. Ex. 20 dt. 22-1- 1968.
The Statement of objects and reasons of the Act is as below:-
The law relating to Co-operative Societies in the Malabar area of the State is contained in the Madras Co-operative Societies Act, 1932. In the Travancore-Cochin area of the State, the corresponding law in force is the Travancore-Cochin Co-operative Societies Act, 1951. It is considered necessary to enact a uniform law on the subject applicable throughout the State. The field of co-operative activity is expanding and certain changes in the law to suit the needs of the present day are also felt necessary. The bill is intended for the above purposes.
2. Apart from the provisions relating to the constitution and regulation of Co-operative Societies, the principle of State partnership in Co-operative Societies and State participation in their management is also recognized in this bill and provision has been made for the same. Provision has also been made for the constitution of Tribunals in order to exercise certain functions of appeal, revision and review, as provided for in Chapter XII of the Bill. (K.G. Ex. 94 dt. 13-6-1967).
Legislative Changes:- 1. Substituted by Act No. 1 of 2000 published in K. G. Ex. 1 dt. 1-1-2000 w. e. f. 1-1-2000 for “Preamble: – WHEREAS with a view to providing for the orderly development of the Co-operative movement in the State of Kerala in accordance with the relevant directive principles of State Policy enunciated in the Constitution of India, it is expedient to consolidate, amend and unify the law relating to Co-operative Societies in that State.”
2. Substituted by Act 7 of 2010 for “by organising Co-operative Societies as self governing,” published in K. G. Ex. dt. 28-4-2010 w. e. f. 28-4-2010.
3. Inserted, ibid.
The Act has been amended by –
(1) The Kerala Co-operative Societies (Amendment) Act, 1971 (Act 38 of 1971). This Act has repealed Ordinance19 of 1971 which came into force on 9-10-1971.
(2) The Kerala Co-operative Societies (Amendment) Act, 1974 (Act 8 of 1974).
This Act has repealed Ordinance13 of 1973 which came into force on 20-11-1973.
(3) The Kerala Co-operative Societies (Amendment) Act, 1986 (Act 29 of 1986).
This Act has repealed Ordinance 55 of 1986 and 59 of 1986.
(4) The Kerala Co-operative Societies (Amendment) Act, 1987 (Act 19 of 1987).
(5) The Kerala Co-operative Societies (Amendment) Act, 1988 (Act 7 of 1988).
This Act has repealed Ordinance 8 of 1988.
(6) The Kerala Co-operative Societies (Amendment) Act, 1992 (Act 5 of 1992).
This Act has repealed Ordinance 3 of 1992.
(7) The Kerala Co-operative Societies (Amendment) Act, 1993 (Act 16 of 1993).
Act has repealed Ordinance 6 of 1993.
(8) The Kerala Co-operative Societies (Amendment) Act, 1995 (Act 6 of 1995).
Act has repealed Ordinance 10 of 1995.
(9) The Kerala Co-operative Societies (Amendment) Act 15 of 1997.
(10) The Kerala Co-operative Societies (Amendment) Act 1 of 2000.
(11) The Kerala Co-operative Societies (Amendment) Act 3 of 2003.
(12) The Kerala Co-operative Societies (Amendment) Act 16 of 2004.
(13) The Kerala Co-operative Societies (Amendment) Act 9 of 2009
(14) The Kerala Co-operative Societies (Amendment) Act 7 of 2010.
(15) The Kerala Co-operative Societies (Amendment) Act 13 of 2012. Act has repealed Ordinance 26 of 2012.
(16) The Kerala Co-operative Societies (Amendment) Act, 8 of 2013.
(17) The Kerala Co-operative Societies (Second Amendment) Act 22 of 2013. Act has repealed Ordinance 25 of 2013.
(18) The Kerala Co-operative Societies (Amendment) Act 24 of 2014. Act has repealed Ordinance 1 of 2014.
An examination of the various provisions of the Act discloses that its scheme is to permit the societies registered to function as bodies corporate having perpetual succession. (Pavithran v. State of Kerala 1970 KLT 561).
Provisions of the Kerala Co-operative Societies (Amendment) Act, 1971 are not repugnant to the provisions of the Arbitration Act. (Sivaraman Nair v. State of Kerala ILR 1974 (1) Ker. 97).
The principles of res judicata are applicable to the proceedings before Arbitrator. (Chempazhanthi Service Co-op Society v. Co-op Tribunal 1978 KLT SN 49).
Co-operative Societies Act is a welfare legislation. (Registrar v. Kunhambu 1980 KLT 112).
Employees of a Co-operative Society who are also the share holders of the society are liable to be insured under the Employee’s State Insurance Act. A member of a Co-operative Society is seperate and distinct from the society as such which is a legal person. (Regional Director v. Taj Textiles Industrial Co-operative Society Ltd. 1980 KLT 199: 1980 KLN 164).
It is well settled cannon of construction that a harmonious interpretation has to be given so as to give effect to all the provisions of the statute and the provisions of subordinate legislation. (Kunhikrishnan v. Nadapuram SCB Ltd. 1987 KLT 201).
An explanation to a section has to be read so as to harmonise with the main section and also to consider any ambiguity in it. (Kammukutty v. Joint Registrar 1993 (1) KLT 103).
The only non agricultural society which can become a member of the District Co-operative Bank is the Urban Co-operative Bank as defined in clause 3 (iv) of the Ordinance. (Lukman v.
Dy. Registrar 1997 (2) KLT 627: 1998 (1) KLJ 50).
Kerala State Handicrafts Apex Co-operative Society Ltd. comes within the purview of Art. 12 of the Constitution. (Surabhi Employees Trade Union Congress v. Kerala State Handicrafts Apex Co-operative Society Ltd. 2002 (2) KLT 77).
Co-operative Societies (Amendment) Act, 2002 is not violative of Art. 19 (1) (e) of the Constitution as there is no violation of fundamental right. There is no fundamental right for any citizen to be member of a Co-operative Society, his right is governed by the provisions of the statute. (Alappuzha District Co-operative Bank Ltd. v. State of Kerala 2003 (1) KLT 297: AIR 2003 (NOC) Ker. 243).
Co-operative Societies registered under KCS Act are public authorities for purpose of R.T.I. Act and are bound to act in conformity with obligations in Chap.II of that Act. (Thalapalam Service Co-op Bank Ltd. v. Union of India 2009 (2) KLT 507: ILR 2009 (2) Ker.438: 2009 (2) KHC 391).
Act, Rules or Bye-laws do not provide any power on committee to amend Bye-laws and thereby provide delimitation of Electoral College into different wards. (Janardhanan v. State Co-operative Election Commission 2009 (1) KLT 1032).
Every statute is prima facie prospective, unless it is expressly or by necessary implication made to have retrospective operation. When there is no express provision making the rules retrospective, it would have to be found out from language of the provisions itself as to whether they are retrospective in nature. (Bhaskaran P. R. v. State of Kerala 2010 (2) ILR 741).
2. Definitions.- In this Act, unless the context otherwise requires-
(a) “apex society” means a society having the whole of the State as its area of operation and having as its members only other societies with similar objects and declared as such by the Registrar;
1[(aa) “assisted society” means a co-operative society which has received the Government assistance in the form of share capital, loan, grant or any other financial assistance or any guarantee by the Government or from Boards constituted by the Government for repayment of loan, interest or deposits;
(ab) “auditing of accounts of co-operative societies” means a close examination of financial transactions, overdue debts, if any, maintenance of books of accounts, documents and other records of a business, preparation of audit report and includes an inquiry into the affairs of the society and subsidiary institutions in order to ascertain the correctness of accounts and the extent to which its activities were useful in promoting the economic welfare of the members in accordance with co-operative principles;]
Legislative Changes:- 1. Inserted by Act 8 of 2013 published in K. G. Ex. 434 dt 14-2-2013 w. e. f. 14-2-2013.
(b) “bye-laws” means the registered by-laws of a Co-operative Society for the time being in force;
Notes
Bye-laws - Bye- laws of a society are not statutory in character. (George v. Tatapuram Co-op. Society Ltd. 1975 KLT 367: ILR 1975 (1) Ker. 249).
A co-operative society registered under the Act is not a statutory body and the bye laws have no force of law. (Arumughan v. Kadalundy Co-op. Urban Bank Ltd 1960 KLT 727).
The principle that the rules made under a statute have force of statute is not applicable to bye-laws that a co-operative society is empowered by the Act to make. (Bihar Co-operative Bank Ltd v. Registrar, AIR 1975 Pat 187).
When there is a conflict between a provision in the Act or in the rules and bye-law, the bye law cannot prevail. (Ramasubrahmonia Mudaliar v. Salam Urban Co-operative Society AIR 1945 Mad. 434: 1945 (2) MLJ 2).
The Bye-laws of the co-operative society framed in pursuance of the provisions of the Act cannot be held to have force of law. (Co-operative Central Bank Ltd. v. Additional Industrial Tribunal AIR 1970 SC 245).
Two-fifth of the members referred to in bye laws means two-fifth of the members for the time being thereby excluding the vacancies. (Satna Central Co-operative and Land Mortgage Bank Ltd. v. Puranlal Agarwal 1969 MPLJ 879: 1969 Lab LJ 888). (See also cases under section 12).
The bye-laws of a Society constitute contract not only between the society and its members but also between the members inter se. They are binding between the members and govern their mutual relationship and rights and the affairs of the society. They rule the internal management, business or administration of the Society. (Raghava Kurupu v. Joint Registrar 1988 (2) KLT 725).
(c) “circle co-operative union” means a circle Co-operative Union constituted under Section 88;
1[(d) “central society” means a society having jurisdiction over one or more Revenue Districts but not the whole of the State as its area of operation, and having as its members only other societies and declared as such by the Registrar or the Government.]
Legislative Changes:- 1. Substituted by Act 19 of 1987 published in K.G. Ex. 711 dt. 25-8-1987 for “(d) “central society” means a society to which moneys from the Principal State Partnership Fund established under section 44 are provided to enable that society to purchase shares in other societies with limited liability”.
1[(da) “chief executive” means any employee of a co-operative society by whatever designation called and includes an officer of the State Government or an employee of any other institution or co-operative society, who discharges the functions of a chief executive under the Act, the Rules or the Bye-laws;]
Legislative Changes:- 1. Inserted by Act 8 of 2013 published in K. G. Ex. 434 dt 14-2-2013 w. e. f. 14-2-2013.
(e) “Committee” means the governing body of a co-operative society by whatever name called, to which the management of the affairs of the society is entrusted;
1[(ea) “ Co-operative Arbitration Court” means a Court constituted under S.70A;]
Legislative Changes:- 1. Inserted by Act 15 of 1997 w. e. f. 13-6-97 as (ee) and re-lettered as S. 2 (ea) by Act 1 of 2000.
1[(eb) “ Consortium Lending Scheme” means the Consortium Lending Scheme framed under Section 57C;]
1[(ec) “Co-operative Development and Welfare Fund” means the Co-operative Development and Welfare Fund established under S.57A;]
2[(ecc) “Co-operative Ombudsman” means the person or persons appointed under sub-section (2) of Section 69A;]
Legislative Changes:- 1. Sections (eb), (ec) and (ed) inserted by Act 1 of 2000 published in K.G. Ex. 1 dt. 1-1-2000 w.e.f. 1-1-2000.
2. Inserted by Act 7 of 2010 published in K. G. dt. 28-4-2010 w. e. f. 28-4-2010.
1[(eccc) “co-operative principles” means the co-operative principles listed in Schedule II appended to this Act;]
Legislative Changes:- 1. Inserted by Act 8 of 2013 published in K. G. Ex. 434 dt 14-2-2013.
1[(ed) “Co-operative Service Examination Board” means the Co-operative service Examination Board constituted under Section 80B;]
Legislative Changes:- 1. Sections (eb), (ec) and (ed) inserted by Act 1 of 2000 published in K. G. Ex. 1 dt. 1-1-2000 w. e. f. 1-1-2000.
(f) “Co-operative Society” or “Society” means a co-operative society registered or deemed to be registered under this Act;
Notes
Society and writ jurisdiction.- A co-operative society registered under the Act is not a statutory body and the bye laws have no force of law. Its employee cannot invoke the writ jurisdiction under Art. 226 of the constitution for violation of the bye laws. (Arumugham v. Kadalundy Co-op. Urban Bank 1960 KLT 727).
A Society registered under the Co-op. Societies Act is not a statutory body. (Vaish Degree College v. Lakshmi Narain AIR 1976 SC 888).
Society issuing show cause to terminate the services of an employee in violation of statutory rules. A writ under Art. 226 of the constitution is not maintainable against Society. The employee’s remedy is only for damages. (Sebastian v. Co-op. Inspector, Kothamangalam 1976 KLT 414).
A society has no locus standi to make an application under Art. 226 of the Constitution of India of the individual grievances of its members. (Perumbavoor Merchants Assn. v. Perumbavoor Municipal Council 1966 KLT 659).
The writ of certiorari being a discretionary remedy the court can permit an application to be made by any member of the public who might have some interest in the matter. (Devassy v. Asst. Registrar of Co-op. Societies 1974 KLT 40: ILR 1974 (1) Ker. 95).
An elected member of a committee has no locus standi to challenge the action of registrar revoking the nomination of a member already made to the committee. (Sukumaran v. Sukumaran Unni ILR 1974 (1) Ker. 650: 1974 KLT 318).
Co-operative Society is a body corporate under S.2 (31) of Income Tax Act. (Chala Service Co-op Bank Ltd. v. Income Tax Officer (CIB) 2010 (1) KHC 782: 2010 (1) KLT SN 92).
(g) “Co-operative Society with limited liability” means a society in which the liability of its members for the debts of the society in the event of its being wound up is limited by its bye-laws -
(i) to the amount, if any, unpaid on the shares respectively held by them; or
(ii) to such amount as they may, respectively, undertake to contribute to the assets of the society;
(h) “Co-operative 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 all its obligations and to contribute to any deficit in the assets of the society;
1[(ha) “Deposit Guarantee Scheme” means the deposit guarantee scheme framed under Section 57B;]
Legislative Changes:- 1. Clauses (ha) and (hb) inserted by Act 1 of 2000 w.e.f. 1-1-2000.
1[(hb) “Director of Co-operative Audit” means the Director of Co-operative Audit appointed under sub-section (1) of Section 63 and any officer to whom all or any of the powers of the Director of Co-operative Audit may be delegated by the Government by general or special order under sub-section (3) of Section 63].
Legislative Changes:- Inserted by Act 1 of 2000 and substituted by Act 7 of 2010 published in K. G. dt. 28-4-2010 w. e. f. 28-4-2010. Earlier it ran “ “Director of Co-operative Audit” means the Director of Co-operative Audit appointed under sub-section (1) of section 63 and includes any officer on whom all or any of the powers of the Director of Co-operative Audit under this Act are conferred.”
(i) “dispute” means any matter touching the business, constitution, establishments or management of a society capable of being the subject of litigation and includes a claim in respect of any sum payable to or by a society, whether such claim be admitted or not;
Notes
Dispute.- In the absence of rules or bye-laws regulating seniority and promotion, the Registrar has no jurisdiction to entertain a dispute as to promotion or seniority between employees of a society. (Balachandran v. Dy. Registrar 1979 KLT 249 FB).
Society as tenant of a building claiming recovery of advance rent paid to the landlord. Such a claim will not fall within the scope of a dispute to be entertained by the Registrar. (Varkey v. Director of Industries and Commerce ILR 1978 (2) Ker. 143).
A dispute in regard to the title to immovable property will not come within the scope of the definition. (Ponnuswamy v. Nambeesan 1978 KLT 836).
Dispute relating to interse seniority of the employees of a society is not a dispute which can be entertained or resolved by the Registrar. (Balachandran v. Dy.Registrar 1978 KLT 249: AIR 1978 Ker. 126: 1978 (2) LLJ 299).
A claim by the society for damages against a contractor who was entrusted with the work of construction of a godown for the Society is a dispute. (Sekharan v. State of Kerala 1976 KLT 137).
The word, ‘business’ cannot be construded to include illegal transactions. (Sriramulu v. Deputy Registrar 1957 An LT 607: 1957 (2) An WR 226).
The challenge to the validity of a general meeting is not a dispute. (Gokul Bharat v. C.T. Lands 1962 MPLJ (notes) 196).
The expression, “touching the business” of a Society means affecting the business of a society or relating to the business, of a Society. (Railway Employees Co-op. Bank Ltd. v. Bhikaji Merwanji AIR 1943 Bom. 341 Suraj Bhan v. State of Haryana 72 Punj LR 604).
“Touching” indicates that the business need not directly arise out of the business of the society but it is enough that it should have reference or relation to or concern the business of the society. The business is the corporate activity of the society and the permissible corporate activities have to be gathered from the provisions of the Act, Rules and the bye-laws. (Madhava Rao v. Surya Rao1953 (2) MLJ 340: 66 Mad. LW 821: AIR 1954 Mad. 103).
A transaction for the purpose of the business of the society does not necessarily become a transaction touching its business. (Coir Industrial Co-operative Society v. Govindan 1962 KLJ 454 : 1962 KLT 400 : ILR (1962) 1 Ker. 231).
The penalty incurred for not returning the grains borrowed on the stipulated date is a dispute touching the business of the society. (Damodar Das Attra v. Co-operative Seeds Store 1953 All LJ 112: AIR 1953 All 465).
The failure on the part of the President to credit to the Society the full amount of commission due on the sales effected by him and the resistance by him of that demand would be a dispute touching the business of the society. (Sriramulu v. Co-op. Marketing Society, AIR 1965 SC 621: (1965)1 SCWR 334).
Where both parties are not members of a society and the contract between them involved the sale of a house built under the Co-operative Housing Society, the dispute was not one touching the business of the society. (Uttam Chand v. Alumal AIR 1944 Sind 107).
A suit for an injunction restraining the society from selling the property mortgaged by a member for securing a loan is not maintainable. (Fakir Mohammed v. Mercantile Co-operative Bank Ltd. AIR 1940 Sind 143).
The dispute regarding interse seniority between the employees of the society is a dispute coming within the ambit of S. 2 (i) of the Act and under S.69 of the Act the Registrar has got jurisdiction to adjudicate the issue. (Ajitha v. State of Kerala 2001 (2) KLJ 42).
According to S.2 (i) of the Act, “dispute” includes a claim in respect of any sum payable to a society, whether such claim be admitted or not. It is not stated in S.2 (i) that such claim should arise from any matter touching the business of the society. In S.69 (2) (a) also it is not stated that the claim by the society for any demand due to it from a member should be in respect of a matter touching the business of the society. (Umadevi v. Asst. Registrar 2004 (3) KLT 450: 2004 (2) KLJ 768: ILR 2004 (3) Ker. 497).
A reading of S. 69 and S. 70 will clearly show that the dispute raised under S. 69 has to be decided by a Registrar or Registrar as defined under S.2 (p) and 3 (2) or Registrar conferred with powers by the Government under S. 3 (2). (Goplakrishnan v. Assistant Registrar 1997 (2) KLT 209: AIR 1998 Ker. 63. Reversed in 1998 (1) KLT 539).
S. 70 (1) (c) of the Act is clearly to the effect that the Asst. Registrar can appoint an Arbitrator and refer the dispute to him. But the only limitation is that he cannot refer it to a person equal or superior to him in rank. (Chandran v. Gopalakakrishnan 1998 (1) KLT 539: ILR 1998 (3) Ker. 8).(See also comments under Section 69).
1[(ia) “District Co-opeative Bank” means a Central Society, the Principal object of which is to raise funds to be lent to its members and individuals, with jurisdiction over one revenue district having as its members any type of Primary Societies, Federal Co-operative Societies and Central Societies, having headquarters in such revenue District, and having nominal or associate members as specified in the proviso to sub-section (1) of Section 18.]
Notes
Legislative Changes:- 1. Section (ii) inserted by Act 15 of 1997 w. e. f 3-6-1997. Section (ii) was relettered as Section (ia) and section (ib) inserted by Act 1 of 2000.w. e. f. 1-1-2000. Initially it ran as “(ii) “District Co-operative Bank” means a central society having jurisdiction over one revenue district and having as its members Primary Agricultural Credit Societies, and Urban Co-operative Banks and the principal object of which is to raise funds to be lent to its members, including nominal or associate members” which was substituted by Act 3 of 2002 published in K. G. 47 dt. 15-7-2002 w. e. f. 4-5-2002 as follows: “(ia) “District Co-operative Bank” means a Central Society, the principal object of which is to raise funds to be lent to its members, with jurisdiction over one revenue district and having as its members any type of primary societies and Federal and Central Societies having headquarters in such districts”. It was substituted by Act 9 of 2009 published in K. G. Ex. 30 dt. 5-1-2009 w. e. f. 11-12-2007 as follows: (ia) “District Co-operative Bank” means a Central Society having jurisdiction over one revenue district and having as its members Primary Agricultural Credit Societies anb Urban Co-operative Banks and the Principle object of which is to raise funds to be lent to its members, including nominal or associate members.” It was substituted as follows by Act 13 of 2012 published as Notn No 7318/Leg. H2/2012/Law dt. 23-7-2012 in K. G. Ex. 1558 dt. 23-7-2012 w. e. f. 11-2-2012 “(ia) “District Co-operative Bank” means a central society, the principal object of which is to raise funds to be lent to its members and individuals, with jurisdiction over one revenue district and having as its members any type of primary societies and Federal and Central societies having headquarters in such district;” It was substituted as above by Act 24 of 2014 published under Notification No 24144/Leg. H2/2013/Law. dt. 24-6-2014 in K. G. Ex. No. 1601 dt. 24-6-2014.
If legislature thinks that a particular type of society alone should be admitted as members of DCB, it has to be recognized as law of land, some other type of societies should also be admitted to membership of DCB. Court cannot sit in appeal over wisdom of legislature. The classification of member societies of DCB attempted under Ext.P2 Ordinance is not hit by Art.14. (Philip v. State of Kerala 2008 (2) KLT 555: ILR 2008 (2) Ker 442).
1[(ib) “Federal Co-operative Society” means a society having more than one district as its area of operation and having 2[the Government,] individuals and other Co-operative Societies as its members;]
Legislative Changes:- 1. Section (ii) was relettered as (ia) and (ib) inserted by Act 1 of 2000 w.e.f. 1-1-2000.
2. Inserted by Act 7 of 2010 w. e. f 28-4-2010.
(j) “financing bank” means a co-operative society having as its members only other co-operative societies and the main object of which is to raise money and lend the sum to its members;
(k) “general body meeting” means a meeting of the members who are entitled to vote in the affairs of the society;
(l) “Member” means a person joining in the application for the registration of a Co-operative Society or a person admitted to membership after such registration in accordance with this Act, the rules and the bye-laws and includes a nominal or associate member;
Notes
Member- A Joint Hindu Family can become a member of a society subject to the bye-laws framed. (Villupuram Urban Co-operative Bank v. Balasubrahmonia Mudali AIR 1938 Mad. 809; Kisanlal Kapurchand v. Co-operative Central Bank ILR 1945 Nag. 677; Bindeswari Prasad v. Shiva Dutt AIR 1938 Pat 315).
It can be a member represented by its Kartha. (Mendhasal Co-operative Society v. Radhashyam 24 Cut LT 395).
Membership is not confined to members resident within a particular area, but subject to the Bye laws. (Subha Rao v. Andhra Co-operative Central Land Mortgage Bank AIR 1957 A.P 919).
A person enrolled as a member of a Society without any resolution of the managing committee could nevertheless hold the status of a member when there is ratification by the general body of his admission as member. (Mishrimal v. Dist Co-operative Growers Assn. Ltd. AIR 1961 MP 40).
A person would be a member of the society if he had joined the application for registration of the society and he need not full fill the qualifications mentioned in bye-law in such event. The bye-law was relevant only for the purpose of determining who could be subsequently elected as members. (Satish Chandra J. Reversed, A. N. Saxena v. Deputy Registrar, Co-operative Societies U.P. 1969 All LJ 652). (See also comments under section 19).
1[(la) “miscellaneous societies” means such societies, as may be prescribed, and which accept deposits from their members only and no deposits shall be accepted from nominal or associate members, and shall undertake business activities for the welfare of its members as per the bye-laws and shall issue loans only to members:
Provided that no agricultural loans or schematic loans shall be issued to the members except the loans for welfare activities;]
Legislative Changes:- 1. Inserted by Act 7 of 2010 w. e. f. 28-4-2010 and substituted by Act 8 of 2013 published in K. G Ex. 434 dt. 14-2-2013. Earlier it ran ‘ “Miscellaneous Societies” means such societies as may be prescribed and which accept deposits from their members only and undertake business activities for the welfare of their members, as per their approved by-laws except providing of agricultural and schematic loans and which do not deal with negotiable instruments under the Negotiable Instruments Act, 1881 (Central Act 26 of 1881);’
(m) “nominal or associate member” means a member who possesses only such privileges and rights of a member who is subject only to such liabilities of a member as may be specified in the bye-laws;
(n) “officer” means the President, Vice President, Chairman, Vice-Chairman, Secretary, Manager, Member of Committee or Treasurer and includes a Liquidator, Administrator and any other person empowered under the rules or the bye-laws to give directions in regard to the business of a co-operative Society;
Notes
Officer- Officers and servants of Co-operative Society are public servants for the purpose of Prevention of Corruption Act. (Kochu Devassy v. State of Kerala 1978 KLT 880 SC).
Word ‘Officer’ denotes officer of the Society and not Registrar. (Lakha Singh v. Registrar of Co-operative Societies AIR 1973 P&H 13).
The officers and servants of Co-operative societies are public servants for the purpose of the Prevention of Corruption Act and also for the purpose of Indian Penal Code. (Kochudevassy v. State of Kerala 1977 KLT 131: ILR 1977 (1) Ker. 439 FB).
The relation of a servant of the society vis-a-vis the society is a pure case of master and servant in private employment. Hence a Civil Court cannot grant the relief of reinstatement. (Sankaran v. Dy. Registrar of Co-op Societies ILR 1975 (1) Ker. 364: 1975 KLT 861).
An accountant of a Co-operative Bank who has no power to give any direction in the business of the Bank, is not an officer. He is only a servant and rights between the Bank and its servants are governed by the law of master and servant. (Co-operative Central Bank v. Trimback AIR 1945 Nag. 183; Gurupad Ramachandra Nandini v. State of Mysore (1971) MLJ (Cl) 184).
But the Manager of a shop run by a society is an officer. (Kailash Nath Halwai v. Registrar AIR 1960 All. 294; Sita Ram v. Shanganj Consumer’s Co-operative Stores Ltd. AIR 1960 All 289).
President of a society has sufficient locus standi to maintain a writ petition challenging the appointment of administrator. (Dy. Registrar of Co-operative Societies v. George 1974 KLT 189: ILR 1974 (1) Ker. 114).
A committee member of milk society selling adulterated curd. His liability under the P. F. A. Act is absolute and the question whether he is authorized to make sale as a servant or agent is irrelevant. (State of Kerala v. Ramakrishnan Nair 1965 KLT 402).
Member of the Managing Committee who is appointed as Secretary on honorary basis is only an officer of the Committee and can be removed by proceedings under sub-s. (2). (K.T. Mattachan v. Joint Registrar ILR 2006 (2) Ker. 8: 2006 (2) KLT 45).
(o) “prescribed” means prescribed by rules made under this Act;
1[(oa) “prescribed period” means the period of limitation specified in Schedule III appended to this Act;]
Legislative Changes:- 1. Inserted by Act 8 of 2013 published in K. G. Ex. 434 dt 14-2-2013 w. e. f. 14-2-2013.
2[(oaa)] “Primary Agricultural Credit Society” means a Service Co-operative Society, a Service Co-operative Bank, a Farmers Service Co-operative Bank and a Rural Bank, the principal object of which is to undertake agricultural credit activities and to provide loans and advances for agricultural purposes, the rate of interest on such loans and advances shall be the rate fixed by the Registrar and having its area of operation confined to a Village, Panchayat or a Municipality:
Provided that the restriction regarding the area of operation shall not apply to Societies or Banks in existence at the commencement of the Kerala Co-operative Societies (Amendment) Act, 1999 (1of 2000):
Provided further that if the above principal object is not fulfilled, such societies shall lose all characteristics of a Primary Agricultural Credit Society as specified in the Act, Rules and Bye-laws except the existing staff strength;] .
Legislative Changes:- 1. The existing section (oa) was relettered as (ob) and a fresh section (oa) was inserted by Act 15 of 1997 w. e. f. 3-6-1997. It ran as “(oa) “Primary Agricultural Credit Society” means a Service Co-operative Society, a Service Co-operative Bank, a Farmers Service Co-operative Bank and a Rural Bank, the principal object of which is to undertake agricultural credit activities”. It was substituted as follows by Act 1 of 2000 “ “Primary Agricultural Credit Society” means a Service Co-operative Society, a Service Co-operative Bank, a Farmers Service Co-operative Bank and a Rural Bank, the principal object of which is to undertake agricultural credit activities and having its area of operation confined to a Village, Panchayat or a Municipality.
Provided that the restriction regarding the area of operation shall not apply to Societies or Banks in existence at the commencement of the Kerala Co-operative Societies (Amendment) Act, 1999.” This was again substituted by Act 7 of 2010 published in K.G. Ex.1033 dated 28-4-2010 as above w. e. f. 28-4-2010.
2. Renumbered by Act 8 of 2013 published in K G Ex 434 dt 14-2-2013.
1[2[ob] “Primary credit society” means a Society other than an apex or central society which has its principal object the raising of funds to be lent to its members;]
Legislative Changes:- 1. Inserted by Act 29 of 1986 published in K.G. Ex 1078 dt. 28-11-1986.
2. The existing section (oa) relettered as “(ob)” by Act 15 of 1997 w. e. f. 3.6.1997.
1[(oc) “Primary Co-operative Agricultural and Rural Development Bank” means a society having its area of operation confined to a Taluk and the principal object of which is to provide for long term credit for agricultural and rural development activities:]
2[Provided that no Primary Co-operative Agricultural and Rural Development Bank shall be registered without the bifurcation of assets and liabilities of the existing societies having the area of operation in more than one Taluk and the societies shall restrict their operation in the area of the respective society on such bifurcation.]
Notes
Legislative Changes:- 1. Section 2 (oc) inserted by Act 1 of 2000 w. e. f. 1-1-2000.
2. Proviso substituted by Act 13 of 2012 in K. G. Ex. 1558 dt. 23-7-2012 w. e. f. 12.8.2011. Earlier it ran as: “Provided that the societies in existence at the commencement of the Kerala Co-operative Societies (Amendment) Act, 1999 having more than one taluk as its area of operation shall, restrict such area of operation to the Taluk where the headquarters of such society is situated, within a period of six months.” w.e.f. 12-8-2011.
Even without proviso, would be constitutionally valid and petitioner would not be entitled to operate beyond one Taluk. If it does, it will be in violation of its status as a PCARD Bank and would be detrimental to its interests of being eligible to be a member of the KSCARD Bank. (Irinjalakuda Co-op Agricultural and Rural Development Bank Ltd. v. State Co-op Agricultural and Rural Development Bank Ltd 2009 (2) KLT SN 83 CN 84 : AIR 2009 (NOC) 1557 (Ker.): 2009 (1) KLJ 729: 2009(1) KHC 925).
1[(od) “Primary Co-operative Society” means a society having jurisdiction over a revenue district as a whole or over any specified area within such revenue district and having individual or individuals and other Co- operative Societies as its members;]
Legislative Changes:- 1. Inserted by Act 9 of 2009 w. e. f.11.12.2007 published in K. G. Ex. 30 dt. 5-1-2009.
(p) “Registrar” means the Registrar of Co-operative Societies appointed under sub-section (1) of Section 3 and includes any person on whom all or any of the powers of the Registrar under this Act are conferred;
(q) “Rules” means the rules made under this Act;
1[(qa) “Scheduled Castes” means the Scheduled Castes in relation to the State of Kerala specified in the Constitution (Scheduled Castes) Order, 1950;
(qb) “Scheduled Tribes” means the Scheduled Tribes in relation to the State of Kerala as specified in the Constitution (Scheduled Tribes ) Order, 1950];
Legislative Changes:- 1. Inserted by Act 29 of 1986 published in K. G. Ex. 1078 dt. 28-11-1986 w. e. f. 25-2-1985.
1[(qc) “Special Officer” means an officer, not below the rank of an Assistant Registrar, appointed by the Registrar, to take into custody the assets and liabilities of the society which secured registration without bifurcating and the area of operation of an existing society and to register new societies and to constitute committees as provided in Section 28 of the Act];
Legislative Changes:- 1. Clause (qc) inserted by Act 13 of 2012 in K.G. Ex. 1558 dt. 23-7-2012 and deemed to have come into force on 12-8-2011.
(r) “State” means the State of Kerala;
1[(ra) “State Co-operative Agricultural and Rural Development Bank” means an apex society having only Primary Co-operative Agricultural and Rural Development Banks as its members and functioning in accordance with the provisions contained in the Kerala State Co-operative Agricultural and Rural Development Banks Act, 1984 (20 of 1984);
(rb) “State Co-operative Bank” means an apex society having only District Co-operative Banks as its members;
(rc) “State Co-operative Election Commission” means the State Co-operative Election Commission constituted under Sec. 28 B];
Notes
Legislative Changes:- 1. Inserted by Act 1 of 2000 published in K. G. Ex. 1 dt. 1-1-2000 w. e. f. 1-1-2000.
In view of the notification issued by the Central Government on 28-1-2003, provisions of SARFAESI Act are available to those institutions, namely, Kerala State Co-operative Bank Ltd., District Co-operative Banks and Urban Co-operative Banks, to be invoked as enjoined by S. 13 of that Act. (Varghese v. Kerala State Co-operative Bank Ltd. 2008 (1) KLT 521: AIR 2008 Ker 91: ILR 2008 (1) Ker 294).
(s) “State Co-operative Union” means the State Co-operative Union established under section 89;
(t) “Tribunal” means the Tribunal constituted under section 8;
1[(ta) “Urban Co-operative Bank” means a society registered under this Act having its area of operation in the urban areas and which undertakes banking business with the licence obtained from Reserve Bank of India;]
Legislative Changes:- 1. Inserted by Act 15 of 1997 w. e. f. 3-6-97 as S. (tt) and re-lettered and substituted as S. (ta) and S. (tb) was inserted by Act 1 of 2000 w. e. f. 1-1-2000. It ran “(tt) “Urban Co-operative Bank” means a Primary Co-operative Society having its area of operation in the Urban areas and which does not undertake any agricultural credit activities.” Substituted by 9 of 2009 w. e. f. 11.12.2007 as above.
1[(taa) “Urban Co-operative Society” means a Co-operative Society the principal object of which is to undertake non-agricultural credit activities and to raise funds to be lent to its members with its area of operation confined to a municipality or a corporation:
Provided that the restriction regarding the area of operation shall not be applicable to the existing Urban Co-operative Societies;]
Legislative Changes:- 1. Inserted by Act 7of 2010.
1[(tb) “Vigilance Officer” means the Vigilance Officer appointed under section 68A;]
Legislative Changes:- 1. Inserted by Act 1 of 2000.
(u) “Year” means the period commencing on the 1[first day of April of any year and ending with 31st of March] of the succeeding year or in the case of any registered society or class of registered societies, the accounts of which are made upto any other date with the previous sanction of the Registrar, the year ending with such date.
Notes
Legislative Changes:- 1. Substituted for “first day of July of any year and ending with 30th of June” by Act 9 of 1997.
Age limit for appointment in Co-operative Society which is the month to be reckoned for the beginning of the year. The year mentioned in Rule 183 is the Co-operative Year beginning on the 1st April. Age limit should be reckoned with reference to Ist April and not 1st January. (Lekha v. Thiruvanathapuram Service Co-op Bank Ltd. ILR 2006 (4) Ker. 82: 2006 (4) KLT 109: 2006 (3) KLJ 192).

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