#THE CO-OPERATIVE SOCIETIES ACT, 1912 

##ARRANGEMENT OF SECTIONS 

###PRELIMINARY 

SECTIONS. 

1. Short title and extent. 
2. Definitions. 

###REGISTRATION 
3. The Registrar. 
4. Societies which may be 
  registered. 
5. Restrictions on interest of member of society with limited liability and a share capital. 
6. Conditions of registration. 
7. Power of Registrar to decide certain questions. 
8. Application for registration. 
9. Registration. 
10. Evidence of registration. 
11. Amendment of the by-laws of a registered society. 

###RIGHTS AND LIABILITIES OF MEMBERS 

12. Member not to exercise rights till due payment made. 
13. Votes of members. 
14. Restrictions on transfer of share or interest. 

###DUTIES OF REGISTERED SOCIETIES 

15. Address of societies. 
16. Copy of Act, rules and by-laws to be open to inspection. 
17. Audit. 

###PRIVILEGES OF REGISTERED SOCIETIES 

18. Societies to be bodies corporate. 
19. Prior claim of society. 
20. Charge and set-off in respect of shares or interest of member. 
21. Shares or interest not liable to attachment. 
22. Transfer of interest on death of member. 
23. Liability of past member.
24. Liability of the estates of deceased members. 
25. Register of members. 
26. Proof of entries in societies’ books. 
27. Exemption  from  compulsory  registration  of  instruments  relating  to  shares  and  debentures  of 
registered society. 
28. Power to exempt from income-tax, stamp-duty and registration fees. 

###PROPERTY AND FUNDS OF REGISTERED SOCIETIES 

29. Restrictions on loans. 
30. Restrictions on borrowing. 
31. Restrictions on other transactions with non-members. 
32. Investment of funds. 
33. Funds not to be divided by way of profit. 
34. Contribution to charitable purpose. 

###INSPECTION OF AFFAIRS 

35. Inquiry by Registrar. 
36. Inspection of books of indebted society. 
37. Costs of inquiry. 
38. Recovery of costs. 

###DISSOLUTION OF SOCIETY 

39. Dissolution. 
40. Cancellation of registration of society. 
41. Effect of cancellation of registration. 
42. Winding-up. 

###RULES 

43. Rules. 

###MISCELLANEOUS 

44. Recovery of sums due to Government. 
45. Power to exempt societies from conditions as to registration. 
46. Power to exempt registered societies from provisions of the Act. 
47. Prohibition of the use of the word “co-operative”. 
48. Indian Companies Act, 1882, not to apply. 
49. Saving of existing societies. 
50. [Repealed.]. 



#THE CO-OPERATIVE SOCIETIES ACT, 1912 

##ACT NO. 2 OF 1912
[^1]

[1st March, 1912.] 

An Act to amend the Law relating to Co-operative Societies. 

  WHEREAS it is expedient further to facilitate the formation of Co-operative Societies for the 
promotion  of  thrift  and  self-help  among  agriculturists,  artisans  and  persons  of  limited  means,  and  for 
that purpose to amend the law relating to Co-operative Societies; It is hereby enacted as follows:— 

###PRELIMINARY 

1. **Short title and extent.**—(1)  This  Act  may  be  called  the  Co-operative  Societies  Act,  1912; and 

(2) it  extends  to  the  whole  of  India  except the  territories  which,  immediately  before  the  1st 
November, 1956, were comprised in Part B States. 

2. **Definitions.**—In this Act, unless there is anything repugnant in the subject or context,— 

  (a) “by-laws” means the registered by-laws for the time being in force, and includes a registered 
amendment of the by-laws: 

  (b) “committee” means the governing body of a registered society to whom the management of 
its affairs is entrusted: 

  (c) “member”  includes  a  person joining  in  the  application  for  the  registration  of  a  society and 
a person admitted to membership after registration in accordance with the by laws and any rules: 

  (d) “officer”  includes  a  chairman,  secretary,  treasurer,  member  of  committee,  or  other  person 
empowered under the rules or the by-laws to give directions in regard to the business of the society: 

  (e) “registered society” means a society registered or deemed to be registered under this Act: 

[^1]. This Act has been declared to be in force in the Sonthal Parganas by notification under s. 3 of the Sonthal Parganas 
Settlement Regulation (3 of 1872), see B. and O. Gazette, 1913, Pt. II, p. 105. 

It has been repealed in its application to— 

     (1) the Bombay Presidency by the Bombay Co-operative Societies Act, 1925 (Bom. 7 of 1925); 
     (2) the Madras Presidency by the Madras Co-operative Societies Act, 1932 (Mad. 6 of 1932); 
     (3) Bihar and Orissa by the B. and O. Co-operative Societies Act, 1935 (B. and O. 6 of 1935); 
     (4) Orissa, separately, by the Orissa Laws Regulation, 1936 (1 of 1936); 
     (5) Coorg by the Coorg Co-operative Societies Act, 1936 (Coorg 2 of 1936); 
     (6) Bengal, with certain exceptions, by the Bengal Co-operative Societies Act, 1940 (Ben. 21 of 1940); 
     (7) Vidarbha region of Bombay by Bombay Act 20 of 1960; 
     (8) Mahakoshal region by Madhya Pradesh Act 17 of 1961; and 
     (9) the Union territory of Andaman and Nicobar Islands by Reg. 3 of 1973. It has been amended in— 

  (1) the  U.P.  by  the  Co-operative  Societies  (Amendment)  Act,  1919  (U.P.  3  of  1919),  the  Co-operative  Societies  (U.P. 
Amendment) Act, 1944 (U.P. 1 of 1944) as continued in force by the U.P. Expiring Laws Continuance Act, 1948 (U.P. 13 of 
1948) and Uttar Pradesh Act 10 of 1957; 

  (2) the C.P. by the Co-operative Societies (Central Provinces Amendment) Act, 1930 (C.P. 7 of 1930) and in C.P. and 
Berar by the following Acts as continued in force by the C.P. and Berar Expiring laws Continuance and Amending Act, 1947 
(C.P. & B. 48 of 1947):— 

  (i)  the C.P. and Berar Co-operative Societies (Amendment) Act, 1940 (C.P. & B. 5 of 1940); 
  (ii) the C.P. and Berar Co-operative Societies (Amendment) Act, 1941 (C.P. & B. 6 of 1941); 
  (iii)  the C.P. and Berar Co-operative Societies Amendment and Liquidators, Orders Validation Act, 1945 (C.P. & B. 10 of 
1945); and 
  (iv) Madhya Pradesh by M.P. Act 8 of 1954. 


 
  (f) “Registrar”  means  a  person  appointed  to  perform  the  duties  of  a  Registrar of  Co-operative 
Societies under this Act: and 

  (g) “rules” means rules made under this Act. 

###REGISTRATION 

3. **The Registrar.**—The  State  Government  may  appoint  a  person  to  be  Registrar  of  Co-operative 
Societies for the State or any portion of it, and may appoint persons to assist such Registrar, and may, by 
general or special order, confer on any such persons all or any of the powers of a Registrar under this Act. 

4. **Societies which may be registered.**—Subject to the provisions hereinafter contained, a society 
which  has  as  its  object  the  promotion  of  the  economic interests of its members in accordance with 
co-operative principles, or a society established with the object of facilitating the operations of such a 
society, may be registered under this Act with or without limited liability: 

  Provided that unless the State Government by general or special order otherwise directs— 

     (1) the liability of a society of which a member is a registered society shall be limited; 

     (2) the liability of a society of which the object is the creation of funds to be lent to its members, 
and  of which the majority of the members are agriculturists, and of which no member is a registered 
society, shall be unlimited. 

5. **Restrictions on interest of member of society with limited liability and a share capital.**—Where 
the liability of the members of a society is limited by shares, no member other than a registered society 
shall— 

  (a) hold more than such portion of the share capital of the society, subject to a maximum of one- 
fifth, as may be prescribed by the rules; or 

  (b) have or claim any interest in the shares of the society exceeding one thousand rupees. 

6. **Conditions of registration.**—(1) No society, other than a society of which a member is a registered 
society, shall be registered under this Act which does not consist of at least ten persons above the age of 
eighteen  years  and,  where  the  object  of  the  society  is  the  creation  of  funds  to  be  lent  to  its  members, 
unless such persons— 

  (a) reside in the same town or village or in the same group of villages; or 

  (b) save  where  the  Registrar  otherwise  directs,  are  members  of  the  same  tribe,  class,  caste,  or 
occupation. 

(2) The  word  “limited”  shall  be  the  last  word  in  the  name  of  every  society  with  limited  liability 
registered under this Act. 

7. **Power of Registrar to decide certain questions.**—When  any  question  arises  whether  for  the 
purposes of this Act a person is an agriculturist or a non-agriculturist, or whether any person is a resident 
in a town or village or group of villages, or whether two or more villages shall be considered to form a 
group, or whether any person belongs to any particular tribe, class, caste or occupation, the question shall 
be decided by the Registrar, whose decision shall be final. 

8. **Application for registration.**—(1) For purposes of registration an application to register shall be 
made to the Registrar. 

(2) The application shall be signed— 

  (a) in the case of a society of which no member is  a registered society by at least ten persons 
qualified in accordance with the requirements of section 6, sub-section (1); and 

  (b) in the case of a society of which a member is a registered society, by a duly authorised person 
on behalf of every such registered society, and where all the members of the society are not registered 
societies, by ten other members or, when there are less than ten other members, by all of them. 

(3) The application shall be accompanied by a copy of the proposed by-laws of the society, and the 
persons by whom or on whose behalf such application is made shall furnish such information in regard 
to the society as the Registrar may require. 

9. **Registration.**—If the Registrar is satisfied that a society has complied with the provisions of this 
Act and the rules and that its proposed by-laws are not contrary to the Act or to the rules, he may, if he 
thinks fit, register the society and its by-laws. 

10. **Evidence of registration.**—A  certificate  of  registration  signed  by  the  Registrar  shall  be 
conclusive  evidence  that  the  society  therein  mentioned  is  duly  registered  unless  it  is  proved  that  the 
registration of the society has been cancelled. 

11. **Amendment of the by-laws of a registered society.**—(1) No amendment of the by-laws of a 
registered society shall be valid until the same has been registered under this Act, for which purpose a 
copy of the amendment shall be forwarded to the Registrar. 

(2) If the Registrar is satisfied that any amendment of the by-laws is not contrary to this Act or to the 
rules, he may, if he thinks fit, register the amendment. 

(3) When the Registrar registers an amendment of the by-laws of a registered 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. 

###RIGHTS AND LIABILITIES OF MEMBERS 

12. **Member not to exercise rights till due payment made.**—No member of a registered society 
shall exercise the rights of a member unless or until he has made such payment to the society in respect 
of membership or acquired such interest in the society, as may be prescribed by the rules or by-laws. 

13. **Votes of members.**—(1) Where the liability of the members of a registered society is not limited 
by shares, each member shall, notwithstanding the amount of his interest in the capital, have one vote 
only as a member in the affairs of the society. 

(2) Where the liability of the members of a registered society is limited by shares, each member shall 
have as many votes as may be prescribed by the by-laws. 

(3) A registered society which has invested any part of its funds in the shares of any other registered 
society may appoint as its proxy, for the purpose of voting in the affairs of such other registered society, 
any one of its members. 

14. **Restrictions on transfer of share or interest.**—(1) The transfer or charge of the share or interest 
of  a  member  in  the  capital  of  a  registered  society  shall  be  subject  to  such  conditions  as  to  maximum 
holding as may be prescribed by this Act or by the rules. 

(2) In case of a society registered with unlimited liability a member shall not transfer any share held 
by him or his interest in the capital of the society or any part thereof unless— 

  (a) he has held such share or interest for not less than one year; and 

  (b) the transfer or charge is made to the society or to a member of the society. 

###DUTIES OF REGISTERED SOCIETIES 

15. **Address of societies.**—Every registered society shall have an address, registered in accordance 
with  the  rules,  to  which  all  notices  and  communications  may  be  sent,  and  shall  send  to  the  Registrar 
notice of every change thereof. 

16. **Copy of Act, rules and by-laws to be open to inspection.**— Every registered society shall keep a 
copy of this Act and of the rules governing such society, and of its by-laws, open to inspection free of 
charge at all reasonable times at the registered address of the society. 

17. **Audit.**—(1) The Registrar shall audit or cause to be audited by some person authorised by him by 
general or special order in writing in this behalf the accounts of every registered society once at least in 
every year. 

(2) The  audit  under  sub-section  (1)  shall  include  an  examination  of  overdue  debts,  if  any,  and  a 
valuation of the assets and liabilities of the society. 

(3) The Registrar, the Collector or any person authorised by general or special order in writing in this 
behalf by the Registrar shall at all times have access to all the books, accounts, papers and securities of a 
society, and every officer of the society shall furnish such information in regard to the transactions and 
working of the society as the person making such inspection may require. 

###PRIVILEGES OF REGISTERED SOCIETIES 

18. **Societies to be bodies corporate.**—The registration of a society shall render it a body corporate 
by the name under which it is registered, with perpetual succession and a common seal, and with power 
to  hold property, to enter into contracts, to institute and defend suits and other legal proceedings and to 
do all things necessary for the purposes of its constitution. 

19. **Prior claim of society.**— Subject to any prior claim of the Government in respect of land-revenue 
or any money recoverable as land-revenue or of a landlord in respect of rent or any money recoverable as 
rent, a registered society shall be entitled in priority to other creditors to enforce any outstanding demand 
due to the society from a member or past member— 

  (a) in respect of the supply of seed or manure or of the loan of money for the purchase of seed or 
manure upon the crops or other agricultural produce of such member or person at any time within 
eighteen months from the date of such supply or loan; 

  (b) in respect of the supply of cattle, fodder for cattle, agricultural or industrial  implements or 
machinery, or raw materials for manufacture, or of the loan of money for the purchase of any of the 
foregoing things—upon any such things so supplied, or purchased in whole or in part from any such 
loan, or on any articles manufactured from raw materials so supplied or purchased. 

20. **Charge and set-off in respect of shares or interest of member.**—A registered society shall have 
a charge upon the share or interest in the capital and on the deposits of a member or past member and 
upon any dividend, bonus or profits payable to a member or past member in respect of any debt due from 
such member or past member to the society, and may set-off any sum credited or payable to a member or 
past member in or towards payment of any such debt. 

21. **Shares or interest not liable to attachment.**— Subject to the provisions of section 20, the share 
or interest of a member in the capital of a registered society shall not be liable to attachment or sale under 
any decree or order of a Court of Justice in respect of any debt or liability incurred by such member, and 
neither  the  Official  Assignee  under  the  Presidency-towns  Insolvency  Act,  1909  (3  of  1909)  nor  a 
Receiver under the Provincial Insolvency Act, 1907 (3 of 1907)[^1], shall be entitled to or have any claim on 
such share or interest. 

22. **Transfer of interest on death of member.**—(1) On the death of a member a registered society 
may transfer the share or interest of the deceased member to the person nominated in accordance with the 
rules made in this behalf, or, if there is no person so nominated, to such person as may appear to the 
committee to be the heir or legal representative of the deceased member, or pay to such nominee, heir or 
legal representative, as the case may he, a sum representing the value of such member's share or interest, 
as ascertained in accordance with the rules or by-laws: 

  Provided that— 

     (i) in the case of a society with unlimited liability, such nominee, heir or legal representative, as 
the   case may be, may require payment by the society of the value of the share or interest of the 
deceased member ascertained as aforesaid; 

     (ii) in the case of a society with limited liability, the society shall transfer the share or interest of 
the  deceased member to such nominee, heir or legal representative, as the case may be, being qualified 
in accordance with the rules and by-laws for membership of the society, or on his application within 
one month of the death of the deceased member to any person specified in the application who is so 
qualified. 

[^1]. See  now  the  Provincial  Insolvency  Act,  1920  (5  of  1920). 



(2) A registered 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. 

(3) All transfers and payments made by a registered 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. 

23. **Liability of past member.**—The liability of a past member for the debts of a registered society 
as they existed at the time when he ceased to be a member shall continue for a period of two years from 
the date of his ceasing to be a member. 

24. **Liability of the estates of deceased member.**—The estate of a deceased member shall be liable 
for a period of one year from the time of his decease for the debts of a registered society as they existed 
at the time of his decease. 

25. **Register of members.**—Any register or list of members or shares kept by any registered society 
shall be *prima facie* evidence of any of the following particulars entered therein:— 

  (a) the date at which the name of any person was entered in such register or list as a member; 

  (b) the date at which any such person ceased to be a member. 

26. **Proof of entries in societies, books.**—A copy of any entry in a book of a registered society 
regularly kept in the course of business, shall, if certified in such manner as may be prescribed by the 
rules, be received, in any suit or legal proceeding, as prima facie evidence of the existence of such entry, 
and shall be admitted as evidence of the matters, transactions and accounts therein recorded in every case 
where, and to the same extent as, the original entry itself is admissible. 

27. **Exemption from compulsory registration of instruments relating to shares and debentures 
of registered society.**—Nothing  in  section  17,  sub-section  (1),  clauses  (b)  and  (c)  of  the  Indian 
Registration Act, 1908 (16 of 1908), shall apply to— 

  (1) any instrument relating to shares in a registered society, notwithstanding that the assets of such 
society consist in whole or in part of immoveable property; or 

  (2) any debenture issued by any such society and not creating, declaring, assigning, limiting or 
extinguishing any right, title or interest to or in immoveable property except in so far as it entitles the 
holder  to  the  security  afforded  by  a  registered  instrument  whereby  the  society  has  mortgaged, 
conveyed  or  otherwise  transferred  the  whole  or  part  of  its  immoveable  property  or  any  interest 
therein to trustees upon trust for the benefit of the holders of such debentures; or 

  (3) any endorsement upon or transfer of any debenture issued by any such society. 

28. **Power to exempt from income-tax, stamp-duty and registration fees.**—[^1](1) The Central 
Government, by notification in the Official Gazette, may, in the case of any registered society or class 
of registered society, remit the income-tax payable in respect of the profits of the society, or of the 
dividends or other payments received by the members of the society on account of profits; 

1. S. 28 re-numbered a sub-section (1) of that section by Act 38 of 1920, s. 2 and the first Schedule, Pt. I. The whole of this 
Act, with the exception of— 

  (a) Sub-section (1) of section 28, and 
  (b) Sub-section (2) of section 28, so far as it relates to the stamp-duties specified in the second paragraph thereof, has 
been repealed in Bengal by the Bengal Co-operative Societies Act, 1940 (Ben. 21 of 1940), s. 3 and the first Schedule. 


 
(2) The Government, by notification in the Official Gazette, may, in the case of any registered 
society or class of registered society, remit— 

  (a) the stamp-duty with which, under any law for the time being in force, instruments executed by 
or on behalf of a registered society or by an officer or member and relating to the business of such 
society, or any class of such instruments, are respectively chargeable, and 

  (b) any fee payable under the law of registration for the time being in force.

     [In this sub-section “Government” in relation to stamp-duty in respect of bills of exchange, cheques, 
promissory notes, bills of lading, letters of credit, policies of insurance, transfer of shares, debentures, 
proxies and receipts, and in relation to any stamp-duty falling within entry 96 in List I in the Seventh 
Schedule to the Constitution, means the Central Government, and save as aforesaid means the State 
Government.][^7]

###PROPERTY AND FUNDS OF REGISTERED SOCIETIES 

29. **Restrictions on loans.**—(1) A registered society shall not make a loan to any person other than 
a member: 

  Provided  that,  with  the  general  or  special  sanction  of  the  Registrar,  a  registered  society  may 
make loans to another registered society. 

  (2) Save with the sanction of the Registrar, a society with unlimited liability shall not lend money on 
the security of moveable property. 

  (3) The State Government may, by general or special order, prohibit or restrict the lending of money 
on mortgage of immoveable property by any registered society or class of registered societies. 

30. **Restrictions on borrowing.**—A registered society shall receive deposits and loans from persons 
who are not members only to such extent and under such conditions as may be prescribed by the rules 
or by-laws. 

31. **Restrictions on other transactions with non-members.**—Save as provided in sections 29 and 
30,  the transactions of a registered society with persons other than members shall be subject to such 
prohibitions and restrictions, if any, as the State Government may, by rules, prescribe. 

32. **Investment of funds.**—(1) A registered society may invest or deposit its funds— 

    (a) in the Government Savings Bank, or 

    (b) in any of the securities specified in section 20 of the Indian Trusts Act, 1882 (2 of 1882), or 

    (c) in the shares or on the security of any other registered society, or 

    (d) with any bank or person carrying on the business of banking approved for this purpose by the 
Registrar, or 

    (e) in any other mode permitted by the rules. 

 (2) Any investments or deposits made before the commencement of this Act which would have been 

valid if this Act had been in force are hereby ratified and confirmed. 

[^7]. For s. 28A ins. in the U.P., see the Co-operative Societies (U.P. Amendment) Act, 1944 (U.P. 1 of 1944) as continued in 
force by the U.P. Expiring Laws Continuance Act, 1948 (U.P. 13 of 1948). 



33. **Funds not to be divided by way of profit.**—No part of the funds of a registered society shall be 
divided by way of bonus or dividend or otherwise among its members: 

  Provided that after at least one-fourth of the net profits in any year have been carried to a reserve 
fund, payments  from  the  remainder  of  such  profits  and  from  any  profits  of  past  years  available  for 
distribution  may  be  made  among  the  members  to  such  extent  and  under  such  conditions  as  may  be 
prescribed by the rules or by-laws: 

  Provided also that in the case of a society with unlimited liability no distribution of profits shall be 
made without the general or special order of the State Government in this behalf. 

34. **Contribution to charitable purpose.**—Any  registered  society  may,  with  the  sanction  of  the 
Registrar, after one-fourth of the net profits in any year has been carried to a reserve fund, contribute an 
amount not exceeding ten per cent. of the remaining net profits to any charitable purpose, as defined in 
section 2 of the Charitable Endowments Act, 1890 (1 of 1890). 

###INSPECTION OF AFFAIRS 

35. **Inquiry by Registrar.**—(1) The Registrar may of his own motion, and shall on the request of the 
Collector,  or  on  the  application  of  a  majority  of  the  committee,  or  of  not  less  than  one-third  of  the 
members, hold an inquiry or direct some person authorised by him by order in writing in this behalf to 
hold an inquiry into the constitution, working and financial condition of a registered society. 

(2) All officers and members of the society shall furnish such information in regard to the affairs of 
the  society as the Registrar or the person authorised by the Registrar may require. 

36. **Inspection of books of indebted society.**—(1) The Registrar shall, on the application of a creditor 
of  a  registered  society,  inspect  or  direct  some  person  authorised  by  him  by  order  in  writing  in  this 
behalf  to inspect the books of the society: 

  Provided that— 

     (a) the applicant satisfies the Registrar that the debt is a sum then due, and that he has demanded 
payment thereof and has not received satisfaction within a reasonable time; and 

     (b) the applicant deposits with the Registrar such sum as security for the costs of the proposed 
inspection as the Registrar may require. 

  (2) The Registrar shall communicate the results of any such inspection to the creditor. 

37. **Costs of inquiry.**—Where an inquiry is held under section 35, or an inspection is made under 
section 36, the Registrar may apportion the costs, or such part of the costs as he may think right, between 
the society, the members or creditor demanding an inquiry or inspection, and the officers or former officers 
of the society. 

38. **Recovery of costs.**—Any sum awarded by way of costs under section 37 may be recovered, on 
application to a Magistrate having jurisdiction in the place where the person from whom the money is 
claimable actually and voluntarily resides or carries on business, by the distress and sale of any moveable 
property within the limits of the jurisdiction of such Magistrate belonging to such person. 

###DISSOLUTION OF SOCIETY 

39. **Dissolution.**—(1)  If  the  Registrar, after an  inquiry  has  been  held  under section  35  or  after  an 
inspection has been made under section 36 or on receipt of an application made by three-fourths of the 
members of a registered society, is of opinion that the society ought to be dissolved, he may cancel the 
registration of the society. 

(2) Any  member  of  a  society  may,  within two months from the date of an order made under 
sub-section (1), appeal from such order. 

(3) Where  no  appeal  is  presented within two months from the making of an order cancelling the 
registration of a society, the order shall take effect on the expiry of that period. 

(4) Where an appeal is presented within two months, the order shall not take effect until it is formed  by 
the appellate authority. 

(5) The authority to which appeals under this section shall lie shall be the State Government: 

  Provided  that  the  State  Government  may,  by  notification  in  the  Official  Gazette,  direct  that  appeals 
shall lie to such Revenue authority as may be specified in the notification. 

40. **Cancellation of registration of society.**—Where it is a condition of the registration of a society that 
it should consist of at least ten members, the Registrar may, by order in writing, cancel  the registration of the 
society if at any time it is proved to his satisfaction that the number of the members has  been reduced to less 
than ten. 

41. **Effect of cancellation of registration.**—Where the registration of a society is cancelled, the society 
shall cease to exist as a corporate body— 

  (a) in the case of cancellation in accordance with the provisions of section 39, from the date the order 
of cancellation takes effect; 

  (b) in the case of cancellation in accordance with the provisions of section 40, from the date of the 
order. 

42. **Winding-up.**—(1) Where the registration of a society is cancelled under section 39 or section 40, the 
Registrar may appoint a competent person to be liquidator of the society. 

  [^1](2) A liquidator appointed under sub-section (1) shall have power— 

     (a) to institute and defend suits and other legal proceedings on behalf of the society by his name of 
office; 

     (b) to  determine  the  contribution  to  be  made  by  the  members  and  past  members  of  the  society 
respectively to the assets of the society; 

     (c) to  investigate  all claims  against the society and,  subject  to  the  provisions  of this  Act, to decide 
questions of priority arising between claimants; 

     (d) to  determine  by  what  persons  and  in  what  proportions  the  costs  of  the  liquidation  are  to  be 
borne; and 

     (e) to give such directions in regard to the collection and distribution of the assets of the society, as 
may appear to him to be necessary for winding-up the affairs of the society. 

  (3) Subject  to  any  rules,  a  liquidator  appointed  under  this  section  shall,  in  so  far  as  such  powers  are 
necessary for carrying out the purposes of this section, have power to summon and enforce the attendance  of 
witnesses and to compel the production of documents by the same means and (so far as may be) in the same 
manner as is provided in the case of a Civil Court under the Code of Civil Procedure, 1908 (5 of 1908). 

  (4) Where an appeal from any order made by a liquidator under this section is provided for by the rules, it 
shall lie to the Court of the District Judge.[^2]

[^1]. This sub-section has been amended in  its  application  to  the  C.P.  and  Berar  by  the  C.P.  and  Berar  Co-operative Societies 
Amendment  and  Liquidator's  Orders  Validation  Act,  1945   (C.P.   &   B.   10   of  1945)   as   continued  in force  by  the  C.P.  & 
Berar  Expiring  Laws  Continuance  and  Amending  Act,  1947  (C.P.  &  B.  48  of  1947). 

[^2]. For sub-section (4A) which applies to  the  U.P.,  see  the  Co-operative  Societies  (Amendment)  Act,  1919  (U.P.  3  of 
1919). 



[^1](5) Orders made under this section shall, on application, be enforced as follows:— 

  (a) when made by a liquidator, by any Civil Court having local jurisdiction in the same manner as a 
decree of such Court; 

  (b) when made by the Court of the District Judge on appeal, in the same manner as a decree of such 
Court made in any suit pending therein. 

(6) Save in so far as is hereinbefore expressly provided no Civil Court shall have any jurisdiction in respect 
of any matter connected with the dissolution of a registered society under this Act.[^2]

###RULES 

43. **Rules.**—(1) The State Government  may, for the whole or any part of the State and for any 
registered society or class of such societies, make rules to carry out the purposes of this Act. 

(2) In particular and without prejudice to the generality of the foregoing power, such rules may— 

  (a) subject to the provisions of section 5, prescribe the maximum number of shares or portion of the 
capital of a society which may be held by a member; 

  (b) prescribe the forms to be used and the conditions to be complied with in the making of applications 
for the registration of a society and the procedure in the matter of such applications; 

  (c) prescribe the matters in respect of which a society may or shall make by-laws and for the procedure 
to be followed in making, altering and abrogating by-laws, and the conditions to be satisfied  prior to such 
making, alteration or abrogation; 

  (d) prescribe the conditions to be complied with by persons applying for admission or admitted as 
members, and provide for the election and admission of members, and the payment to be made and the 
interests to be acquired before the exercise of the right of membership; 

  (e) regulate the manner in which funds may be raised by means of shares or debentures or  otherwise; 

  (f) provide for general meetings of the members and for the procedure at such meetings and the powers 
to be exercised by such meetings; 

  (g) provide for the appointment, suspension and removal of the members of the committee and other 
officers, and for the procedure at meetings of the committee, and for the powers to be exercised and the 
duties to be performed by the committee and other officers; 

  (h) prescribe the accounts and books to be kept by a society and provide for the audit of such accounts 
and the charges, if any, to be made for such audit, and for the periodical publication of a balance-sheet 
showing the assets and liabilities of a society; 

  (i) prescribe the returns to be submitted by a society to the Registrar and provide for the persons by 
whom and the form in which such returns shall be submitted; 

  (j) provide for the person by whom and the form in which copies of entries in books of societies 
may be certified; 

  (k) provide for the formation and maintenance of a register of members and, where the liability of the 



[^1]. This  sub-section  has  been  modified  in  its  application  to  the  U.P.,  see  ibid. 

[^2]. For s. 42A ins. in the C.P., see the Co-operative Societies (C.P. Amendment) Act, 1930 (C. P. 7 of 1930). For sections 42-B 
and 42-C ins. in the C.P. and Berar, see the following Acts as continued in force by the C.P. and Berar Act 48 of 1947:— 

1. The C.P. and Berar Co-operative Societies (Amendment) Act, 1940 (C.P. & B. 5 of 1940); 
2. The C.P. and Berar Co-operative Societies (Amendment) Act, 1941 (C.P. & B. 6 of 1941); and 
3.  The  C.P.  and  Berar  Co-operative  Societies  Amendment  and  Liquidators'  Orders  Validation  Act,  1945  (C.P.  &  B.  10 
of 1945). 

 
 
members is limited by shares, of a register of shares; 

  (l) provide that any dispute touching the business of a society between members or past members 
of the society or persons claiming through a member or past member or between a member or past member 
or persons so claiming and the committee or any officer shall be referred to the Registrar for decision or, 
if he so directs, to arbitration, and prescribe the mode of appointing an arbitrator or arbitrators and the 
procedure to be followed in proceedings before the Registrar or such arbitrator or  arbitrators,  and  the 
enforcement of the decisions of the Registrar or the awards of arbitrators; 

  (m) provide for the withdrawal and expulsion of members and for the payments, if any to he made to 
members who withdraw or are expelled and for the liabilities of past members; 

  (n) provide for the mode in which the value of a deceased member’s interest shall be ascertained, and 
for the nomination of a person to whom such interest may be paid or transferred; 

  (o) prescribe  the  payments  to  be  made  and  the  conditions  to  be  complied  with  by  members 
applying for loans, the period for which loans may be made, and the amount which may be lent, to an 
individual member; 

  (p) provide  for  the  formation and maintenance of reserve funds, and the objects to which such 
funds may be applied, and for the investment of any funds under the control of the society; 

  (q) prescribe the extent to which a society may limit the number of its members; 

  (r) prescribe the conditions under which profits may be distributed to the members of a society with 
unlimited liability and the maximum rate of dividend which may be paid by societies; 

  (s) subject to the provisions of section 39, determine in what cases an appeal shall lie from the orders 
of the Registrar, and prescribe the procedure to be followed in presenting and disposing of such appeals; 
and 

  (t) prescribe the procedure to be followed by a liquidator appointed under section 42, and the cases in 
which an appeal shall lie from the order of such liquidator. 

(3) The State Government may delegate, subject to such conditions, if any, as it thinks fit, all or any of 
its powers to make rules under this section to any authority specified in the order of delegation. 

(4) The  power  to  make  rules  conferred  by  this  section  is  subject  to  the  condition  of  the  rules  being 
made after previous publication. 

(5) All rules made under this section shall be published in the Official Gazette and on such publication 
shall have effect as if enacted in this Act. 

(6) Every rule made by the State Government under this Act shall be laid, as soon as may be after it is 
made, before the State Legislature.

###MISCELLANEOUS 

44. **Recovery of sums due to Government.**—(1) All sums due from a registered society or from an 
officer or member or past member of a registered society as such to the Government, including any costs 
awarded  to  the  Government  under  section  37,  may be recovered in the same manner as arrears of 
land-revenue. 

(2) Sums due from a registered society to Government and recoverable under sub-section (1) 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 subject to the limit of their liability; and, thirdly; in the case of 
other societies, from the members. 

45. **Power  to  exempt societies from conditions as to registration.**—Notwithstanding  anything 
contained in this Act, the State Government may, by special order in each case and subject to such conditions, 
if any, as it may impose, exempt any society from any of the requirements of this Act as to registration. 

46. **Power to exempt registered societies from provisions of the Act.**—The State Government may, 
by general or special order, exempt any registered society from any of the provisions of this Act or may direct 
that such provisions shall apply to such society with such modifications as may be specified in the order. 

47. **Prohibition of the use of the word “co-operative”.**—(1) No person other than a registered society 
shall trade or carry on business under any name or title of which the word “co-operative” is part without the 
sanction of the State Government: 

  Provided that nothing in this section shall apply to the use by any person or his successor in interest of 
any name or title under which he traded or carried on business at the date on which this Act comes into 
operation. 

(2) Whoever contravenes the provisions of this section shall be punishable with fine which may extend 
to fifty rupees, and in the case of a continuing offence with further fine of five rupees for each day on which 
the offence is continued after conviction therefor. 

48. **Indian Companies Act, 1882, not to apply.**—The provisions of the Indian Companies Act, 1882[^1]
(6 of 1882), shall not apply to registered societies. 

49. **Saving of existing societies.**—Every  society  now  existing  which  has  been  registered  under  the 
Co-operative Credit Societies Act, 1904 (10 of 1904), shall be deemed to be registered under this Act, and 
its by-laws shall, so far as the same are not inconsistent with the express provisions of this Act, continue 
in force until altered or rescinded. 

50. *[Repealed.]. Rep. by the Second Repealing and Amending Act,* 1914  (17 of  1914),  s. 3and the 
*second Schedule.*

[^1]. See  now  the  Companies  Act,  1956  (1  of  1956). 