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THE KERALA SELF RELIANT CO-OPERATIVE BILL, 2002

A bill to provide for the voluntary formation of co-operatives as self-reliant, self-help, mutual aid, autonomous, voluntary, democratic, business enterprises, jointly owned, managed and controlled by their members for their economic and social betterment, through the financially gainful provisions of core services which fulfill a common need felt by them.

Preamble. - WHEREAS, it is expedient to provide for the voluntary formation of co-operatives as self-reliant, self-help, mutual-aid autonomous, voluntary, democratic, business enterprises, jointly owned, managed and controlled by their members for their economic and social betterment, through the financially gainful provision of core services which fulfill a common need felt by them, and for the matters connected therewith or incidental thereto;

BE it enacted in the Fifty-third Year of the Republic of India, as follows: -

CHAPTER I
Preliminary

1. Short title, extent and commencement. –(1) This Act may be called the Kerala Self Reliant Co-operatives Act, 2002.

(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.

2. Definitions. – In this Act, unless the context otherwise requires, -

(a) "arbitral tribunal" means an individual or group of individuals not exceeding five, constituted by the general body of a co-operative for settlement of disputes, in accordance with the articles of association of that co-operative;

(b) "articles of association" means the articles of association of a co-operative framed for the management of its affairs;

(c) "authorised equity capital" means the maximum share that can be raised by a co-operative as shown in their articles of association;

(d) "Board” means the governing body of a co-operative by whatever name called, to which the direction of the affairs of the co-operative is entrusted by the articles of association of that co-operative;

(e) "chief executive" means that individual, in paid or honorary capacity, nominated or elected or appointed by the board of a co-operative from among its members, directors or others, in accordance with the articles of association, who is the person to sue or be sued on behalf of the co-operative, and who performs such functions, and has such responsibilities and powers as are specified in the articles of association, and assigned by the board;

(f) "common need" means that economic need which is common to all those who wish to form a co-operative, or have taken membership in a co-operative, and which the co-operative is expected to fulfill through the provision of core services;

(g) "co-operative" means a self-reliant, self-help, mutual-aid, autonomous, voluntary, democratic, business enterprise incorporated under this Act, which is jointly owned, managed and controlled by its members, who may be individuals or co-operatives, for their economic and social betterment, through the financially gainful provision of core services which fulfill a common need felt by them;

(h) "co-operative business" means a business which is committed to functioning in accordance with the principles of co-operation, and includes all co-operatives incorporated under this Act and all co-operative societies registered or deemed to have been registered under the Kerala Co-operative Societies Act, 1969 (21 of 1969);

(i) "co-operative identity" means the statement of identity specified in Schedule A of this Act;

(j) "co-operative principles" means the principles included in the statement of co-operative identity specified in Schedule A of this Act;

(k) "co-operative society" means a co-operative society registered or deemed to have been registered under the Kerala co-operative societies Act, 1969 (21 of 1969);

(l) "co-operative societies Act" means the Kerala Co-operative Societies Act, 1969 (21 of 1969);

(m) Co-operative Tribunal "means the co-operative tribunal constituted under the Co-operative Societies Act;

(n) "core services" means those main services provided to members, through which a co-operative intends to meet that economic need common to all members for the fulfillment of which the co-operative was established, and the fulfillment of which is expected to result in the economic and social betterment of members;

(o) "court" means the principal civil court of original jurisdiction in a district; and includes the High Court in exercise of its ordinary original civil jurisdiction.;

(p) "deficit" means the excess of expenditure over income, arrived at, at the end of a financial year, after the payment of interest, if any, on share capital;

(q) "deficit charge" means the amount collected from or debited to the accounts of members, in proportion to the use or non-use of the services of the co-operative, in accordance with the articles of association and resolutions of the general body, to meet deficit, if any, in whole or part;

(r) "delegate" means a member nominated by a co-operative to represent its interests at the time of promotion of a secondary co-operative, and or at meetings of a secondary co-operative to which the co-operative is affiliated;

(s) "director" means a member elected in accordance with the articles of association to the board of the co-operative;

(t) "financial year" means the twelve months accounting period as provided for in the articles of association of a co-operative, for which the annual statements of accounts are prepared for placement at the annual general meeting of that co-operative;

(u) "general body" in relation to a co-operative means all its members;

(v) "general meeting" means a meeting of the general body called and conducted in accordance with the provisions of this Act and the articles of association of the co-operative;

(w) "Government" means the Government of Kerala;

(x) "member" means a person who is in need of and is able to use the core services of a co-operative and who is admitted and continues as a member of the co-operative, in accordance with the provisions of this Act and the articles of association of that co-operative, and includes a "member-cooperative";

(y) "member-cooperative" means a primary or secondary cooperative which is in need of and is able to use the core services of a secondary co-operative, and which is admitted as a member of that secondary co-operative, in accordance with the provisions of this Act and the articles of association of that secondary co-operative;

(z) "memorandum of association" means the document expressing the desire of the promoters to form themselves into a co-operative;

(aa) "office-bearer" means a director elected by the board of a co-operative to any office of such co-operative in accordance with its articles of association;

(ab) "ordinary resolution" means a resolution of the general body which has the approval of the majority of members with the right of vote, present and voting at the general meeting;

(ac) "person" means an individual or institution competent to contract;

(ad) potential member" means a person who needs the core services being offered by a co-operative, applied for membership or been admitted as a member, and is eligible to be a member of that co-operative, but is not yet member;

(ae) "president" means an elected director who is further elected by the board to preside over its meetings and the meetings of the general body, and to perform such other functions and have such other powers and responsibilities as are specified in the articles of association and assigned by the board;

(af) "primary cooperative" means a cooperative whose members are individuals;

(ag) "Registrar" means the individual appointed as such under this Act, and includes any individual entrusted with the performance of functions and the discharge of responsibilities of the Registrar under this Act;

(ah) "Registrar of cooperative societies" means the individual appointed as such under the Cooperative Societies Act, and includes any individual entrusted with the performance of functions and the discharge of responsibilities of the Registrar of Co-operative Societies under that Act;

(ai)"representative" means a person elected by a section of members, in accordance with the articles of association, to participate on their behalf at the representative general body meeting;

(aj) "representative general body" in relation to a cooperative means all its representatives;

(ak) "representative general body meeting" means a meeting of the representatives, called and conducted in accordance with the provisions of this Act and the articles of association of the cooperative;

(al) "secondary cooperative" means a cooperative whose members are cooperatives;

(am) "special resolution" means a resolution of the general body, at a meeting called with at least fifteen days notice, which has the approval of more than half of all the members of the cooperative with right to vote at the time of the general meeting, or of at least two-third of members with right to vote at the time of the general meeting and present in the general meeting, whichever is less;

(an) "service" means such facilities as are organized primarily for being provided to members to meet the objective of the cooperative;

(ao)"surplus" means the excess of income over expenditure, arrived at the end of the financial year, after the payment of interest, if any, on share capital, and before the payment of surplus refund, and allocation of reserves and other funds;

(ap) "surplus refund" means the refund from the surplus given to the members or credited to the accounts of members, in proportion to their use of the services of the cooperative in accordance with the articles of association and resolutions of the general body;

(aq) “this Act” means the Kerala Self Reliant Co-operative Act, 2002.

CHAPTER II
Incorporation

3. Incorporation of a new cooperative. – (1) Notwithstanding anything in the Co-operative Societies Act, from the date of commencement of this Act all new co-operatives shall be incorporated under this Act only and no new cooperative society shall be registered or incorporated under any other law for the time being in force.

(2) A memorandum of association in the form provided in Schedule B may be submitted to the Registrar by hand or registered post signed by a minimum number of twenty five promoters who wish to form a primary cooperative or by the delegates of cooperatives which wish to form a secondary cooperative.

(3) Every such memorandum shall be accompanied by, -

(a) the original of a declaration by the promoters expressing commitment to the principles of cooperation as provided for in Schedule-A;

(b) the original and one copy of the articles of association of the proposed cooperative as adopted by the promoters;

(d) a list of names of the promoters with their complete address.

(4) The Registrar shall register the cooperative and also take on record its articles of association and communicate by registered post a certificate of registration and the original of the registered articles of association signed and sealed by him, within sixty days from the date of submission of application, to such person as specified in the application:

Provided that , -

(a) the application is in conformity with the requirements laid down by this Act; and

(b) the proposed articles of association are not contrary to the provisions of this Act.

(5) If the conditions laid down in sub-section (3) are not fulfilled, the Registrar shall within sixty days from the date of submission of the memorandum pass an order of refusal together with specific reasons there of to such person as may be specified in the memorandum.

Provided that no order of refusal shall be passed except after giving an opportunity of making representation by such person as may be specified in the memorandum.

(6) Where a cooperative is registered under sub-section (4) the certificate of incorporation signed and sealed by the Registrar shall be conclusive proof for a cooperative being duly incorporated under this Act.

(7) Where the person specified in the memorandum receives neither the certificate of incorporation nor the order of refusal, within ninety days of submission of the memorandum for incorporation, the promoters may move the Co-operative tribunal Court for redressal.

4. Conversion of a cooperative society into a cooperative under this Act. – (1) Notwithstanding anything contained in the Cooperative Societies Act. from the date of commencement of this Act, any cooperative society functioning under the Cooperative Societies Act, which is not in receipt of any share capital from the Government, at the time of seeking incorporation under this Act, may apply for incorporation under this Act:

Provided that where the Government does have share capital in a cooperative societies desiring to convert itself into a cooperative under this Act, the cooperative society may, before applying for incorporation under this Act, return such share capital to the Government, and the Government shall accept such returned share capital.

(2) A memorandum for incorporation may be submitted to the Registrar by hand or by registered post, by the board of such cooperative society as wishes to convert itself into a cooperative under this Act, on the basis of a decision of a majority of members present at a meeting of the general body of the cooperative, called with at least fifteen days notice, and attended by at least one fourth of the total members or five hundred members, which ever is less.

(3) Every such memorandum shall be in such form and containing such particulars as specified in Schedule D and shall be accompanied by,-

(a) a true copy of the resolution of the general body expressing commitment to the principles of cooperation as provided in Schedule-A;

(b) the original and one copy of the articles of association of the proposed cooperative as adopted by the general body;

(d) a true copy of the declaration of the general body stating that the cooperative society is not in receipt of any share capital from the Government or any source other than members;

(e) a true copy of the latest annual report and audited statement of accounts;

(f) a true copy of the resolution of the general body, along with a financial statement duly certified by a Chartered Accountant indicating the adjustment of accumulated losses, if any, to various reserves or by debiting to the accounts of members as decided at the meeting;

(g) a statement of the total number of members of the cooperative society with right of vote as on the day of the meeting, the members who attended the meeting, and the number of members who voted for the resolution;

(4) The Registrar shall, if satisfied that the memorandum of association is in conformity with the requirements laid down by this Act, register the memorandum of association and articles of association of the cooperative and issue a certificate of incorporation in the form specified in Schedule-E together with and a certified copy of the memorandum of association and of the articles of association signed by him, within sixty days from the date of submission of the memorandum of association, to such person as is specified in the memorandum.

(5) If the conditions laid down in sub-section (3) are not fulfilled, the Registrar shall within sixty days from the date of submission of memorandum pass an order of refusal stating the reasons therefore and the order shall be communicated to such person as may be specified in the memorandum:

Provided that no order of refusal shall be passed except after giving an opportunity of making representation by such person as may be specified in the memorandum.

(6) Where a cooperative is registered under sub-section (4), the certificate of incorporation signed and sealed by the Registrar shall be the conclusive proof for a cooperative being duly incorporated under this Act.

(7) Where the person specified with memorandum receives neither the certificate of incorporation nor the order of refusal, within ninety days of submission of the memorandum for incorporation, the cooperative society may move the Co-operative tribunal for redressal.

(8) Where a cooperative is registered under sub-section (4), its earlier registration as a cooperative society under the Cooperative Societies Act shall stand cancelled and it shall send within seven days of receipt of the certificate of incorporation, by registered post, to the Registrar of Cooperative Societies a copy of the certificate of registration issued under the Cooperative Societies Act and a copy of the certificate of incorporation under this Act, and the Registrar of Co-operative Societies shall, within seven days of receipt of such information remove the name of such cooperative society from the register maintained under the Co-operative Societies Act.

(9) Where a cooperative is registered under sub-section (4) the assets and liabilities, the rights and obligations and members of the applicant Cooperative Society shall become the assets and liabilities, the rights and obligations and the members, as the case may be, of the cooperative incorporated under this Act, and all transactions of the applicant cooperative society shall be deemed to have been the transactions of the cooperative registered under this Act.

(10) Where a cooperative society is in receipt of loan or guarantee from the Government at the time of submission of memorandum for incorporation as a cooperative under this Act, it shall within a month of incorporation under this Act, apply to the Government for entering into an agreement with the Government for repayment of the amount of loan or guarantee made available by the Government, failing which, it shall repay the entire amount due as loan to the Government or other source for which guarantee was made available by the Government, within six months from the date of incorporation under this Act.

(11) Where a cooperative has not entered into an agreement with the Government or repaid such amount in accordance with sub section (10), it shall be competent for the Government to recover such amounts from the cooperative as an arrear of public revenue due on land as per the provisions of the Revenue Recovery Act for the time being in force.

(12) Where a cooperative society which is a member of another secondary cooperative society is incorporated as a cooperative under this Act, such cooperative may continue to receive services from such secondary cooperative society and to participate in its affairs for a period of one year from the date of its incorporation under this Act, at the end of which period, its membership in that secondary cooperative society shall cease, unless, by then, the secondary cooperative society too is incorporated under this Act:

Provided that in all matters governing the internal functioning of the cooperative, the provisions of this Act shall apply and in matters governing the relationship of the cooperative with the secondary cooperative society to which it is affiliated the cooperative societies Act shall apply:

Provided further that even on cessation of membership in the Co-operative Society the cooperative may continue to receive such services, and have such business relations as are mutually agreed upon, and permissible under the Cooperative Societies Act and the bye-laws of the cooperative society.

(13) Where a secondary cooperative society, which has other cooperative societies as its members, is registered as a secondary cooperative under this Act, it may continue to serve, and, have its affairs managed by its member cooperative societies, for a period of one year from the date of its incorporation under this Act, at the end of which period it may be have as its members only such cooperatives as are incorporated under this Act:

Provided that in all matters governing the relationship between the secondary cooperative and its member cooperative societies, the provisions of this Act shall apply.

5. Cooperative to be body corporate. – The incorporation of a cooperative under this Act shall render it a body corporate by the name under which it is incorporated having perpetual succession and a common seal with power to acquire hold and dispose of property and to enter into contracts and shall, by the said name sue and be sued.

6. Articles of Association. – (1) The members constituting a cooperative, shall have a set of articles of association, formulated or amended from time to time, in accordance with the provisions of this Act, and the affairs of the cooperative shall be managed in accordance with the terms, conditions and procedures specified in such articles of association.

(2) Except on such specific matters provided for by this Act the functioning of every cooperative shall be regulated by its articles of association.

(3) The articles of association may contain such matters as decided by the members and shall be specific on all matters listed in Schedule-F of this Act.

7. Amendment of articles of association. – (1) A cooperative may decide, by a special resolution, to amend its articles of association:

Provided that the text of such proposed amendment with reasons thereof shall be sent to each member, along with the notice of the general meeting at which the proposed amendment is to be discussed.

(2) A copy of any amendment shall be forwarded by the cooperative, by the registered post, to the Registrar within a period of thirty days from the date on which the resolution was passed.

(3) Every such information forwarded to the Registrar under sub-section (2) shall be signed by the President and two Directors and shall be accompanied by the following particulars, namely: -

(a) a copy of the resolution agreeing to the amendment;

(b) the date of the general body meeting at which the amendment was approved;

(4)The Registrar shall take on record the amendment immediately on receipt of the notice:

Provided that such action shall not preclude the Registrar from challenging the legal validity of the amendment before the court, after giving the cooperative a reasonable opportunity to reconsider the amendment.

8. Name of a cooperative. –(1) A cooperative may not be registered with the same name as another cooperative registered under this Act or the Cooperative Societies Act, as the case may be:

Provided that where the articles of association of a secondary cooperative require all its member cooperatives to use a common name, the name of each such member-cooperative shall have its location or other distinguishing feature included in the name at the beginning or end of the common name;

(2) Every cooperative shall display its full name in legible characters in a conspicuous position,-

(a) at every office or place at which it carries on business;

(b) in all notices and other official publications;

(c) on all its contracts, business letters, orders for goods, invoices, statements of account, receipts and letters of credit, and

(d) on all bills of exchange, promissory notes, endorsements, cheques and orders for money its signs or that are signed on its behalf.

(3) Every cooperative shall display its full name in legible characters on its common seal.

(4) A cooperative with limited liability shall have as a suffix to, or as part of its name, the expression "limited" or its equivalent in any Indian language.

(5) Nothing in sub-section (2) shall prevent a cooperative displaying more conspicuously than the full name, any shorter name by which it is popularly known and which, too is specifically provided for in the articles of association.

(6) A cooperative may, by an amendment to its articles of association, change its name:

Provided that it shall send prior notice of its intention to change its name to the Registrar, along with the proposed name, and the Registrar shall, within fifteen days of receiving such notice inform the cooperative if such name is already in use by another cooperative.

(7) Where a cooperative changes its name, the Registrar shall,-

(a) enter the new name of the cooperative in the register of cooperatives in place of the former name;

(b) make necessary changes in the memorandum of association and articles of association;

(d) communicate to the cooperative, by registered post, the fresh certificate of incorporation along with certified copies of the amended memorandum and articles of association.

(8) The change of name of a cooperative shall not affect any rights or obligations of the cooperative or of any of its members or past members or render defective any legal proceedings by or against it; and any legal proceedings which might have been continued or commenced by or against the cooperative under its former name may be continued or commenced under its new name.

(9) A cooperative which changes its name shall publish such change of name in a popular newspaper in the district in which its registered office is located.

9. Location of registered office. – (1) Every cooperative shall notify to the Registrar the full address of its registered office, within ninety days of being registered as a cooperative.

(2) Every cooperative shall display in full the address of its registered office in legible characters in a conspicuous position,-

(a) at every office or place at which it carries on business;

(b) in all notices and other official publications;

(c) on all contracts, business letters, orders for goods, invoices, statements of account, receipts and letters of credit; and

(d) on all bills of exchange, promissory notes, endorsements, cheques and orders for money it signs or that are signed on its behalf.

(3) A cooperative may, by a resolution of the board of directors, change the address of its registered office:

Provided, that it shall, give notice of such change to its members, creditors, the Registrar and to any secondary cooperative to which it is affiliated, within fifteen days of the board's resolution;

(4) The Registrar shall, within fifteen days of receiving information from a cooperative, take on record, in the register of cooperatives the full address of the registered office of a cooperative and any change thereof.

10. Transfer of assets and liabilities. – (1) A cooperative may, by a special resolution, decide to transfer its assets and liabilities, in whole or in part, to any other cooperative which agrees by a special resolution to receive such assets and liabilities.

(2) Where a special resolution is passed under sub-section (1), each cooperative shall, within the following fifteen days, give notice thereof together with a copy of the resolution passed by it to all its members and creditors, and notwithstanding any provision in the articles of association or contract to the contrary, any member other than one who voted in favour of the proposed transfer of assets and liabilities and any creditor shall during a period of fifteen days from the date of service of the notice upon him, have the option of withdrawing from the cooperative, his interest, subject to the discharge of his obligations to the cooperative.

(3) Any member or creditor who does not exercise his option within the period specified in sub-section (2) shall be deemed to have agreed to the resolution.

(4) A special resolution passed under sub-section(1) shall not take effect until,-

(a) all claims of the members and creditors of each cooperative who have exersise the option under sub-section (2) have been met in full or otherwise satisfied; and

(b) information about the transfer of assets and liabilities has been sent by the cooperatives concerned to the Registrar and his acknowledgement of receipt of the information received.

(5) When a special resolution passed under sub-section(1) taken effect, the resolution shall be sufficient conveyance to vest the assets and liabilities in the transferee without any further assurance.

(6) When a cooperative transfers the whole of its assets and liabilities to any other cooperative, under this section, the incorporation of the cooperative shall stand cancelled and it shall be deemed to have been dissolved and shall cease to exist as a corporate body, and the Registrar shall delete the name of the cooperative from the register of cooperatives.

11. Division. – (1) A cooperative may, by a special resolution, decide to divide itself into two or more cooperatives.

(2) Where a special resolution is passed under sub-section (1), the cooperative shall, within the following fifteen days, give notice thereof together with a copy of the resolution to all its members and creditors and notwithstanding any provision in the articles of association or contract to the contrary, any member other than one who voted in favour of the proposed division or creditor shall during a period of fifteen days from the date of service of the notice upon him have the option of withdrawing his interest, subject to the discharge of his obligations to the cooperative.

(3) Any member or creditor who does not exercise his option within the period specified in sub-section (2) shall be deemed to have agreed to the resolution.

(4) The special resolution passed under sub-section (1) shall not take effect until,-

(a) all claims of the members and creditors of the cooperative who have exercised the option under sub-section (2) have been met in full or otherwise satisfied;

(b) information of the intended division and settlement of claims of members and creditors is sent to the Registrar and his acknowledgement or receipt of the information is obtained; and

(c) the certificate of incorporation and the copies of the registered memorandum and articles of association of the resultant cooperatives, signed and sealed by the Registrar, are issued in accordance with section 4.

(5) When a cooperative divides itself into two or more cooperatives under this section, the incorporation of the cooperative shall stand cancelled and it shall be deemed to have been dissolved and shall cease to exist as a body corporate and the Registrar shall remove the name of the cooperative from the register of cooperatives.

(6) When a cooperative divides itself into two or more cooperatives each member who has assented to the division shall be deemed to have become a member of that newly formed cooperative to which his interests were transferred, in accordance with the scheme of division approved by the general body.

(7) When a special resolution passed under sub-section (1) takes effect, the resolution shall be sufficient conveyance to vest the assets and liabilities in the transferees without any further assurance.

12. Amalgamation. – (1) Any two or more cooperatives may, by special resolutions, decide to amalgamate themselves and form a new cooperative.

(2) Where a special resolution is passed under sub-section (1) each cooperative shall within the following fifteen days, give notice thereof together with a copy of the resolution passed by it to all its members and creditors, and notwithstanding any provision of the articles of association or contract to the contrary, any member other than one who voted in favour of the proposed amalgamation, or creditor shall, during a period of fifteen days from the date of service of the notice upon him, have the option of withdrawing from the co-operative, his interests, subject to the discharge of his obligations to the co-operative.

(3) Any member or creditor who does not exercise his option within the period specified in sub-section (2) shall be deemed to have assented to the resolution.

(4) A special resolution passed under sub-section (1) shall not take effect until,-

(a) all claims of the members and creditors of each co-operative who have exercised the option under sub-section (2) have been met in full or otherwise satisfied;

(b) information of the impending amalgamation and settlement of claims of members and creditors is sent to the Registrar and his acknowledgement of receipt of the information is obtained, and

(c) the certificate of incorporation and a copy of the memorandum and articles of association of the resultant co-operative, signed and sealed by the Registrar, is issued in accordance with section 4.

(5) When two or more co-operatives amalgamate themselves into a new co-operative under this section, the incorporation of the cooperatives so amalgamated shall stand cancelled and they shall be deemed to have been dissolved and shall cease to exist as body corporate, and the Registrar shall delete the names of the cooperatives from the register of cooperatives.

(6) When two or more cooperatives amalgamate themselves into a new cooperative under this section, all the members of the cooperatives who have assented or are deemed to have assented to the amalgamation shall be deemed to have become members of the new cooperative.

(7) when special resolutions passed under sub-section (1) take effect, the resolutions shall be sufficient conveyance to vest the assets and liabilities in the transferee without any further assurance.

13. Merger.- (1) A cooperative may, by a special resolution, decide to merge itself into any other cooperative which agrees by a special resolution to such merger.

(2) Where a special resolution is passed under sub-section (1) each cooperative shall, within the following fifteen days, give notice thereof together with a copy of the resolution passed by it to all its members and creditors, and notwithstanding any provision in the articles of association or contract to the contrary, any member other than one who voted in favour of the proposed merger, or creditor shall, during a period of fifteen days from the date of service of the notice upon him have the option of withdrawing from the cooperative, his interests, subject to the discharge of his obligations to the cooperative.

(3) Any member or creditor who does not exercise his option within the period specified in sub-section (2) shall be deemed to have assented to the resolution.

(4) The special resolution passed under sub-section (1) shall not take effect until,-

(a) all claims of the members and creditors of each co-operative who have exercised the option under sub-section (2) have been met in full or otherwise satisfied, and

(b) information of the impending member and settlement of claims of members and creditors is sent to the Registrar and his acknowledgement of receipt of the information is obtained.

(5) When a cooperative merges itself into any other cooperative under this section, the registration of the cooperative shall stand cancelled and it shall be deemed to have been dissolved and shall cease to exist as a corporate body, and the Registrar shall delete the name of the cooperative from the register of cooperatives.

(6) When a cooperative merges itself into any other cooperative under this section, the members of the first cooperative who assented to the merger shall be deemed to have become the members of the second cooperative.

(7) When special resolutions passed under sub-section (1) take effect, the resolutions shall be sufficient conveyance to vest the assets and liabilities in the transferee without any further assurance.

14. Registration offices.- (1) For the purpose of registration of cooperatives under this Act there shall be offices at such places as the Government thinks fit.

(2) The Government shall appoint a Registrar of Co-operatives and such other individuals as it thinks necessary to carry out the duties, to perform the functions, and to exercise the powers of the Registrar in pursuance of this Act.

(3) No individual appointed under this section shall, either during the course of his service with the Government or for a period of three years thereafter serve in any capacity as an employee or as a director with any cooperative:

Provided that this restriction shall not apply where the individual appointed under this section is a member of a cooperative.

15. Fee for services.- (1) Every application for registration under this Act shall be accompanied by a registration fee amounting to one per cent of the authorised equity capital of the proposed cooperative:

Provided that such fee shall be not less than rupees one hundred and not more than rupees five thousand:

Provided further that the fee shall be rupees five hundred in the case of such cooperatives as do not intend to have any equity capital.

(2) The fee to be paid by cooperatives and others for various services rendered by the Registrar under this Act may be fixed by the Government and made known to the Registrar, who in turn shall make such information available to any interested person:

Provided that any charge in the fee payable for any service may be made by the Government only after publishing in two leading vernacular newspapers or advertising in the vernacular electronic media, inviting comment from those affected.

CHAPTER III

Membership

16. Eligibility for membership in a cooperative.- (1) Any person who needs the services of a cooperative, expresses willingness to accept the responsibilities of membership, meets such other conditions as may be specified in the articles of association of the cooperative and is in a position to use the services, may seek membership and be admitted as a member:

Provided that the cooperative is in a position to extend its services to the applicant.

(2) Every applicant for membership, and every member of a cooperative must keep each cooperative of which the person is a member informed of membership in other cooperatives and it shall be competent for a cooperative to refuse admission or remove from membership on grounds, among others, of dual or conflicting membership.

17. Admission to membership.- (1) Admission to membership shall be made only by elected board in accordance with the procedure specified in the articles of association.

(2) Where admission is refused, the decision with the reasons there of shall be communicated by registered post to such applicant within fifteen days of the date of the decision, or within sixty days from the date of application for membership, which ever is earlier.

(3) Where an application for membership in a cooperative is rejected by the Board, the applicant shall file an appeal to the general body of the Society within the time specified thereof.

18. Withdrawal of membership.- (1) A member may at any time withdraw from membership in a cooperative in accordance with the procedure specified in the articles of association of that cooperative.

(2) Withdrawal from membership shall nonetheless require the person to fulfill such obligations as were undertaken / assumed as a member, under the provisions of this Act, the articles of association or other agreements.

19. Cessation of membership.- (1) A person shall cease tobe a member on death or on incurring such disqualification as may be specified in the articles of association.

(2) Every cooperative shall inform, in the event of the death of the member the nominee of the member, and in every other instance, the member, about the cessation of membership and consequences thereof.

20. Termination of membership.- (1) The Board of a cooperative may terminate the membership of a person who has acted adversely to the objects and interests of the cooperative, including the violation by the member of the articles of association of the cooperative the policies of the general body or board, and / or contacts entered into by the member with the cooperative:

Provided that member has been given a reasonable opportunity to make representation at the board meeting as to why membership should not be terminated.

(2) Where the membership of a person has been terminated by the board, the person may request the board to place its decision for review by the general body. The Board shall place the matter before the general body at its next general meeting and the decision of the general body shall be final:

Provided that pending the decision of the general body the person may have only such transactions, if any, with the cooperative, as may be permitted by the board.

21. Registers of members.- (1) Every cooperative shall maintain a register of members. The name of every person admitted as a member of the cooperative, the date of admission, and the address of the member shall be entered in the register along with such other particulars as are deemed necessary by the board.

(2) The name of every person whose membership has ceased, or was terminated or withdrawn, shall be struck off the register.

22. Cooperative education.- 1) Every cooperative shall include in its budget annually, provision for expenses on member and potential member education and staff and directors training for the development of the cooperative in accordance with the principles and practices of cooperation.

(2) Any balance under the budget head provided for under sub-section (1) shall be transferred at the end of the year into a cooperative education fund, and may be used only for the purpose of educating and training members, potential members, staff and directors in cooperative principles and practices.

23. Services primarily for members.- (1) A cooperative’s services shall normally be available to members only.

(2) After two years of its being registered under this Act, any cooperative found to be providing more than one fourth of its core services, as specified in its articles of association, in terms of the value of transactions, to non-members in any given financial year shall be deemed to be an “aberrant cooperative” and may be liable to lose for that year exemptions, if any, provided to it, on the ground that it is a cooperative, by this Act or other laws.

(3) Any cooperative found to be “aberrant” for three continuous years shall be deemed to be an organization not operating on a cooperative basis and the Registrar or any person may apply to the Co-operative tribunal for an order dissolving the cooperative.

24. Exercise of rights.- (1) No member of a cooperative shall exercise the rights of membership, including the right of vote, unless the member has made such payments to the cooperative in respect of membership or has acquired and continues to have such interest in the cooperative, including a minimum use of the services of the cooperative, as may be specified in the articles of association.

(2) Every year, within twenty days of closure of the previous financial year, the chief executive shall prepare a list of members with the right of vote and a list of members without the right of vote, valid for the current financial year. The list shall be affixed to the notice board of the cooperative for information of all members, and any member, not satisfied with the specific instances of inclusion or non-inclusion of members in the lists, may appeal to the Board within ten days of the affixation of the of the lists on the notice board, for re-examination of the records, and the board shall, within forty five days of closure of the previous financial year, review the lists, finalise them and have them affixed to the notice board of the cooperative.

25. Voting rights of members.- In primary cooperatives, as well as in secondary cooperatives rights members shall have equal voting rights (one member, one vote):

Provided that a person has been member for at least one full financial year before being eligible to vote:

Provided further that the condition of one year membership shall not apply to the members who join at any time after the incorporation of a cooperative but before the end of the first financial year ending:

Provided also that the articles of association of a secondary cooperative may fix an upper limit on the number of votes that a member cooperative can have.

26. Member's liability.- (1) A cooperative may be registered with limited or unlimited liability, where,-

(a) a “cooperative with limited liability” means a cooperative in which the liability of its members for the debts of the cooperative is limited by its articles of association, to such form and extent as they may undertake to contribute to any deficit in the assets of the cooperative, in the event of its being wound up, and

(b) a “cooperative with unlimited liability” means a cooperative in which its members are jointly and severally liable for the debts of the cooperative and to contribute to any deficit in the assets of the cooperative, in the event of its being would up.

(2) Where a cooperative amends its articles of association to change the form and extent of its members’ liability, it shall, within the fifteen days of such amendment, give notice thereof together with a copy of the amendment to its members and creditors and, notwithstanding any provision in the articles of association or contract to the contrary, any member other than one who voted in favour of the proposed change, or creditor shall, during a period of fifteen days from the date of service of the notice upon him, have the option of withdrawing from the cooperative, his interests, subject to the discharge of his obligations to the cooperative.

(3) Any member or creditor who does not exercise his option within the period specified in sub-section (2) shall be deemed to have assented to the resolution.

(4) An amendment passed under sub-section (2) shall not take effect until,-

(a) all claims of the members and creditors of the cooperative who have exercised the option under sub-section (2) have been met in full or otherwise satisfied, and

(b) notice of the amendment of the articles of association of the cooperative has been received by the Registrar in accordance with this Act.

(5) Subject to the provisions of sub-section (6), the liability of a member or of the estate of a deceased member for the debts of the cooperative as they existed,-

(a) in the case of a past member, on the date on which the person ceased 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.

(6) Where a cooperative is ordered to be dissolved, the liability of a past member, who ceased to be a member or the estate of a deceased member, who died, within two years immediately preceding the date of order of dissolution, shall continue until completion of the liquidation proceedings, but such liability shall be limited only to the debts of the cooperative as they existed on the date of cessation of membership or death, as the case may be.

27. General Body.- (1) There shall be a general body for every cooperative consisting of all the members of such cooperative:

Provided that where the general body of a cooperative decides that the size, spread or types of its membership requires a representative body for more effective decision making, its articles of association may provide for a smaller body called representative general body drawn from the members, to be formed in such a democratic manner with such functions and powers, and such relationship with members as may be specified in the articles of association.

(2) Any reference in this Act to the general body shall apply to the representative general body where it exists:

Provided however, that the representative general body shall not alter any provision in the articles of association or take any decisions relating to such subjects as the general body may have explicitly retained for itself.

(3) Subject to the provisions of this Act and the articles of association of a cooperative, the ultimate power of a cooperative shall vest in the general body of its members:

Provided that nothing contained in this sub-section shall affect the exercise by the board or any other authority of a cooperative of any power conferred on such board or such other authority by this Act.

(4) Any function or responsibility, falling within the scope of a cooperative as a body corporate, which has not been specifically entrusted by this Act or the articles of association, to any of the several authorities within the cooperative, maybe dealt with the general body, on a reference by the board of directors.

28. Functions and responsibilities of general body.- The following and such other matters as are considered necessary by the board, shall be dealt with by the general body at its annual general meeting, namely :-

(a) action on resolutions of the previous meeting;

(b) consideration of the long term plan and budget, when required;

(d) appointment of auditors for the current financial year;

(e) consideration of the annual report of activities for the previous financial year;

(f) consideration of the annual audited statements of accounts, and the audit report relating to the previous financial year;

(g) consideration of the report on deviations, if any, from the approved budget relating to the previous financial year and the appropriate action to be taken;

(h) disposal of surplus, if any of previous financial year;

(i) management of deficit, if any, of previous financial year,;

(j) creation of specific reserves and other funds,;

(k) review of actual utilization of reserves and other funds;

(l) review of the report on the attendance at meetings by directors;

(m) review of the use of the cooperative’s services by the directors.

(n)review of remuneration paid to any director or member of any committee or internal auditor in connection with his duties in that capacity or his attendance at related meetings;

(o) review of quantum and percentage of services provided to non-members vis- avis services provided to the members;

(p) appeal of a person whose application for membership has been rejected by the board;

(q) appeal of a person who has been expelled from membership by the board;

(r) report of activities and accounts related to member education and board and staff training;

(2) The following and other matters when considered, necessary by the board, shall be dealt with by the general body at its annual or other general body meeting, namely:-

(a) election of directors;

(b) amendments to articles of association;

(d) elections or appointments to casual vacancies in the board;

(e) removal, and consequent appointment of auditors;

(f) membership of the cooperative in secondary cooperatives;

(g) partnership with other cooperatives;

(h) amalgamation, division, merger, transfer of assets and liabilities;

(i) dissolution of the cooperative;

(j) consideration of the Registrar's report of inquiry, if any;

29. General meetings. (1) The Board of a cooperative may, at any time call a general meeting of the members of the cooperative:

Provided that one such meeting known as annual general meeting shall be held within one hundred and fifty days of the closure of the cooperative’s financial year to deal with the matters specified in sub section (1) of section 28.

(2)The board shall hold a special general meeting within thirty days of the date of receipt of a requisition from,-

(a)not less than one fifth of the members having the right to vote; or

(b)the Registrar, in pursuance of his functions under this Act:

Provided that any such requisition shall contain the reasons why the meeting is felt necessary and the proposed agenda, and no subject other than the subjects included in the proposed agenda shall be discussed at the special general meeting.

(3) All directors shall cease to be directors at the end of the period within which an annual general meeting under sub-section (1) or a special general meeting under sub-section (2) is required to be held, if the board fails to hold such general meetings within the specified period.

(4) All directors shall cease to be directors at the annual general meeting, if the audited annual financial statement and auditor’s comments and observations, if any, along with the report of activities for the previous financial year were not made available to the members along with the notice to attend the annual general meeting at which the report and accounts are to be considered by the general body, and such meeting shall be conducted by an ad hoc body appointed under sub-section (5) of section 34.

(5) The quorum for a general meeting shall be as specified in the articles of association, but shall not be less than one-fifth of the members eligible to vote at the meeting:

Provided that quorum for a representative general body meeting shall not be less than two-fifth of the representatives eligible to vote at the representative general body meeting.

30. Minutes of general meeting.- (1) Every cooperative shall maintain, in the language specified by the articles of association, in the minutes book, minutes of all proceedings of every general meeting and the chief executive shall send the copy of the minutes within fifteen days of the conclusion of every such meeting to all members.

(2) The minutes so recorded shall be signed by the person who chaired the said meeting, or in the event of his incapacity to sign the minutes within the time required, by a director or duly authorised by the board.

Chapter IV.

Management

31. Board of directors.- There shall be an elected board of directors for every cooperative constituted and entrusted with the direction of the affairs of the cooperative in accordance with the provisions of the articles of association:

Provided that in the case of a cooperative newly registered under this Act, the persons who have signed the memorandum for the incorporation of the cooperative may appoint a promoter board, for a period not exceeding one year from the date of incorporation, to direct the affairs of the cooperative and to get elections of directors conducted within the said period, and the promoter board appointed so shall cease to function as soon as a regular board has been constituted in accordance with the articles or association:

Provided further that in the case of a cooperative society originally registered under the Cooperative Societies Act and subsequently registered under this Act, the elected members of the board, whose term has not expired at the time of incorporation under this Act, may be deemed to be the promoter board, for a period not exceeding one year from the date of incorporation under this Act, to direct the affairs of the cooperative and to get elections of directors conducted within the said period, and the deemed promoter board shall cease to function as soon as a regular board has been constituted in accordance with the articles of association.

32. Functions and responsibilities of board.- (1) The board may perform the following functions and discharge responsibilities in accordance with the terms, conditions and procedure laid down in the articles of association, namely:-

(a) to interpret the organizational objectives to set up specific goals to be achieved towards these objectives, and to make periodic appraisal of operations;

(b) to elect and remove office bearers;

(d) to frame regulations for the appointment of all employees of the cooperative and the scales of pay, allowances and other conditions of service including disciplinary action;

(e) to finalise long term perspective plan, annual plan and budget, and to direct the affairs of the cooperative in accordance with the plan and budget approved by the general body;

(f) to make arrangements for the mobilization of funds;

(g) to authorise acquisition and disposal of immovable property, and

(h) to frame, approve and amend regulations relating to services, funds, accounts and accountability, and information and reporting systems.

(2) Every director of a cooperative while performing functions, discharging responsibilities, and exercising powers shall,-

(a) act honestly and in good faith and in the best interests of the cooperative, and

(b) exercise such due care, diligence and skill as a reasonable prudent person would exercise similar circumstances.

(3) Any director who is guilty of misappropriation, breach of trust or any other omission or commission, resulting in lose or shortfall in revenue to the cooperative, shall be personally liable to make good that loss or shortfall, without prejudice to any criminal action to which the director may be liable under law.

33. Eligibility for directorship in a cooperative.- In addition to such other conditions as may be specified in the articles of association, a member of a cooperative shall be eligible for being chosen as a director of the cooperative, if,-

(i) such member has the right to vote in the affairs of the cooperative; and

(ii) such member has patronized the services of the cooperative during the previous financial year to the extent and in the manner specified in the articles of association; and

(iii) such member has no interest in any subsisting contract made with or work being done for the cooperative except as otherwise specified in the articles of association; and

(iv) six years have lapsed from the date that such member may have ceased to be a director of the cooperative for reasons of ,-

a) non-conduct of general meeting;

b) non-conduct of a elections to the board;

c) non-submission of annual report of activities, audited annual financial statements and / or auditor’s report to the general body; or

d) absence from board meetings

34.Elections.- (1) The conduct of elections of directors to the board and of representative to the represent at general body of a cooperative shall be the responsibility of the incumbent board of the cooperative.

(2) Elections shall be conducted in the manner specified in the article of association. Elections shall be conducted before the term of office of the outgoing directors or representatives comes to an end.

(3) All directors on the board shall cease to be directors at the point of time when any task required for the conduct of elections by the artiacles of association is not undertaken or completed and the board has not immediately taken necessary steps to continue with the process as required by the articles of association.

(4) Elections of directors shall normally take place at the annual general meeting.

(5) Where a board fails to conduct elections before the expiry of the term of the directors or representatives, or where the process of elections is discontinued or suspended at any stage of the process and the board has not initiated remedial measures, or where there are no directors remaining on the board, the arbitral tribunal, within such time and in such manner as specified in the articles of association, shall appoint a three-member ad-hoc board from among members who are not members of the arbitral tribunal, nor members of the outgoing board, nor intend to stand as candidates for the elections on hand, for the specific purpose of conducting elections and to perform all functions of the board during the interregnum except those prescribed by the articles of association.

(6) The term of the ad-hoc board so appointed shall not exceed three months and the ad-hoc board shall cease to function as soon as a regular board is elected in accordance with the articles of association.

(7) The directors shall hold office for the period for which they were elected and the newly elected directors shall assume office at the end of this period.

(8) The directors may not be eligible, if so specified in the articles of association, for re-election.

(9) Where there are vacancies on the board and where there is a quorum, the remaining directors may exercise all the powers of the board or may fill the vacancies by cooption for the remainder of the respective terms.

(10) Where there are vacancies on the board and where there are not sufficient number of directors to constitute a quorum for board meeting the arbitral tribunal shall call a general meeting for the purpose of electing directors to fill the vacancies.

35. Tenure of directors.- Where the articles of association provide for retirement of all directors at one time, the tenure of office of all the directors, and, where the articles of association provide for retirement of directors by rotation, the tenure of office of the individual directors shall be for such period as specified in the articles of association, not exceeding three years from the date of assumption of office, as specified in the articles of association.

36. Board meetings.- The President of a cooperative may, at any time, call a meeting of the board of directors:

Provided, that at least four board meetings shall be held in a financial year, and the period between two consecutive board meetings shall not exceed one hundred and twenty days.

(2) The President shall hold a special board meeting within fifteen days of the date of receipt of a requisition from,-

(a) at least one-third of the directors on the board; or

(b) the Auditor:

Provided that any such requisition shall contain the reasons why the meeting is felt necessary and the proposed agenda and no subject other than the subjects included in the proposed agenda shall be discussed at the special board meeting.

(3) The President shall cease to be President at the end of the period within which a board meeting under sub-section (1) or sub-section (2) or the articles of association has to be held if he fails to hold such board meeting within the specified period.

(4) An individual who ceases to be President under sub-section (3) shall not be eligible to hold the office of President for a period of six years from the date of such cessation.

(5) The quorum for a board meeting shall be as specified in the articles of association, but shall be more than half of the total number of directors on the board.

(6) The procedure to convene and conduct the board meetings shall be such as specified in the articles of association.

(7) If a director fails to attend three consecutive board meetings, he shall cease to be director, from the date of the third board meeting.

37. Minutes of Board meeting.- (1) Every cooperative shall maintain in the language specified by the articles of association, in the minutes book, minutes of all proceedings of every board meeting and the chief executive shall send the copy of the minutes within seven days of the conclusion of every such meeting to all directors.

(2) The minutes so recorded shall be signed by the person who chaired the said meeting or by the person who chairs the following meeting, wherein the minutes are confirmed.

CHAPTER V
Finance

38. Mobilization of funds.- (1) A cooperative may mobilize funds including equity capital, deposits, grants, and loans from its members in such form, to such extent and under such conditions as may be specified in the articles of association.

(2) A cooperative may raise funds and other forms of financial support including guarantee from non-members including individuals, banks other financial and non-financial institutions, and the Government, on mutually agreed terms, to such extent and subject to such conditions as may be specified in the articles of association.

39. Deployment of funds.- (1) The funds mobilized by a cooperative shall be for the furtherance of its objectives.

(2) Such of its funds as are not needed for use in its business, a cooperative may invest or deposit, outside its business, in any manner specified in sub-section (5) of section 11 of the Income tax Act, 1961.

40. Disposal of surplus.- (1) Surplus, if any, arising out of the business of a cooperative in a financial year may be used in one or more of the following ways, namely:-

(a) towards a deficit cover fund;

(b) to be distributed as surplus refund among its members;

(d) towards reserves and funds constituted in accordance with the articles of association;

(e) to provide common services to its members;

(f) to provide rewards or incentives to staff;

(g) towards a non-divisible corpus fund:

Provided that surplus arising out of services provided to non-members may not be used for the provision of common services to the community at large, and for encouraging potential members to become members.

(2) Surplus must be fully allocated at the annual general meeting in which the audited statements of accounts for the financial year in which the surplus arose are presented for the consideration of the general body.

41. Management of deficit.- (1) Deficit, if any, arising out of the business of a cooperative in a financial year, shall be fully settled by debiting a part of all of the deficit to the deficit cover fund, if any, and/or as deficit charge among its members:

Provided that nothing in this sub-section shall preclude a cooperative from proceeding against its directors for recovery of amounts contributing to the deficit, where such deficit is the result of gross negligence or mismanagement:

Provided further that where such amounts are recovered, the general body may resolve to credit a part or all of the amount to the deficit cover fund and / or to the account of each member in proportion to the deficit charge levied on him in this regard.

(2) No member shall be permitted to withdraw from the membership of the cooperative without paying his share towards clearing the deficit, if any.

42. Operation of special funds.- (1) A cooperative may, in the interest of its members and towards the fulfillment of its objectives, create reserves and such other funds as are specified in the articles of association or resolved on by the general body.

(2) Funds so created may be used in the business of the cooperative, but at the end of every year, on that portion of each fund which was not applied for the purpose for which it was created, the cooperative shall crdit to the account of such fund an annual interest, at not less than the rate paid by Scheduled Banks on long term fixed deposits debiting such interest as operational expenditure.

43. First Charge.- Notwithstanding anything contained in any law for the time being in force, but subject to any claim of the Government in respect of land tax, any debt or other amount due to a cooperative by any member shall be a first charge upon such properties of the member as agreed by the cooperative, and as the member may declare the manner specified in the articles of association, at the time of membership, and subsequently thereafter.

CHAPTER VI
ACCOUNTABILITY

44. Accounts, records and documents to be maintained.- (1) Every cooperative shall keep at its registered office, the following accounts, records and documents, namely:-

(a) a copy of this Act, with amendments made from time to time;

(b) a copy of its articles of association, with amendments made from time to time;

(d) account of all sums of money received and expended by the cooperative and their respective purposes;

(e) account of all purchases and sales of goods by the cooperative;

(f) account of the assets and liabilities of the cooperative;

(g) a list of members, their fulfillment of responsibilities over the previous financial year, their eligibility to exercise their rights for the current financial year, updated within forty five days of closure of the cooperative’s financial year; and

(h) all such other accounts, records and documents as may be required by this Act or other laws and regulations:

Provided that where a cooperative has branch offices; summarized statements of accounts relating to such branch offices, shall be available at the registered office for each quarter, within fifteen days of the end of that quarter.

(2) Every cooperative shall keep open the books of account and other records for inspection by any director during business hours, in accordance with the procedure framed by the Board.

(3) Every cooperative shall make available during its business hours to any member who so requests, copies of this Act, articles of association, minutes book of the general body, voters’ list and such accounts and records of transactions that relate to that member.

(4) Every cooperative shall preserve its books of accounts relating to a period of at least eight years before the current year together with supporting records and vouchers.

45. Audit.- (1) A cooperative shall get its accounts audited by a Charted Accountant within the meaning of the Charted Accountants Act, 1949:

Provided that where a cooperative’s business turnover is less than rupees forty lakhs, it may appoint an auditor, any person from within its membership or outside, with such qualifications as are specified in the articles of association.

Explanation.- For the purpose of this section, business turnover shall mean the value of sales, services provided and / or loans recovered.

(2) A cooperative, at its annual general meeting, shall appoint an auditor. This appointment shall be valid only until the close of the next succeeding annual general meeting.

(3) The remuneration of an auditor may be fixed by the general body or, if not so fixed, by the arbitral tribunal.

(4) An auditor ceases to hold office when the auditor, -

(a) resigns;

(b) is removed from office under sub-section (6); or

(5) The resignation of an auditor becomes effective at the time a written resignation is received by the cooperative, or at the time specified in the resignation which ever is later.

(6) The general body may, by a special resolution, remove an auditor from office.

(7) An auditor, who,-

(a) resigns; or

(b) receives a notice or otherwise learns of a general meeting called for the purpose of removing him from office;

is entitled to submit to the general body a written statement giving the reasons for his resignation or the comments on the proposed removal, as the case may be.

(8) A vacancy created by the resignation of an auditor shall be filled up by the arbitral tribunal.

(9) A vacancy created by the removal an auditor shall be filled up by the general body.

(10) An auditor appointed to fill a vacancy holds office for the unexpired term of his predecessor.

(11) An auditor shall be given notice of every general meeting and, at the expense of the cooperative, will be entitled to attend and be heard thereat on matters relating to his duties as auditor and their exercise.

(12) It shall be the duty of the board to ensure that annual financial statements are prepared and presented for audit within forty-five days of closure of the cooperative’s financial year.

(13) Upon the reasonable demand of the auditor of a cooperative, the chief executive shall arrange to,-

(a) provide such access to records, documents, books, accounts and vouchers of the cooperative : and

(b) furnish such information and explanations,

as, are in the opinion of the auditor, necessary to enable him to make the examination and report, and as the Chief executive or a present or former director, members, managers or employees are reasonably able to furnish.

(14) It shall be the duty of the auditor to ensure that audited annual financial statements and his accompanying report are furnished to the cooperative within forty five days of the submission of annual financial statements by the board.

(15) The auditor’s report to the members of the cooperative shall,-

(a) state whether the auditor has obtained all the information and explanations which to the best of his knowledge and belief were necessary for the purpose of his audit;

(b) state whether the cooperative’s balance sheet and income and expenditure account dealt with by the report are in agreement with the books of accounts;

(c) indicate the basis on which each asset and liability was valued, and make specific mention of any change in the manner in which such valuation was done in the year under examination and its effect on surplus or deficit;

(d) indicate the amount of surplus earned or deficit incurred from provision of services to non-members as distinct from surplus or deficit accruing because of services to members or in normal course of business;

(e) indicate every deviation in actual expenses and income from the estimated expenses and income in the approved budget;

(f) specify the gross remuneration or honorarium or allowances paid or value of benefits provided, if any, to the Chief Executive, any of the office bearers, or directors, in the financial year under audit;

(g) state whether or not any of the office bearers or directors had become, at any time during the year under review, ineligible under this Act to continue in office as an office bearer or director; and

(h) state whether the decisions on disposal of surplus or assessment of deficit, of the general body, at its previous annual general meeting were implemented correctly and completely or not.

46. Return to be filed with the Regiastrar:- (1) Every year, within thirty days of the holding of the annual general meeting, every cooperative shall file the following returns with the Registrar, namely:-

(a) annual report of activities;

(b) audited annual statements of accounts with auditor’s report.

(c) statistical statement indicating name of the cooperative; core services offered by the cooperative to its members; total number of members as on the last day of the year; total liabilities expressed as (i) funds from members and surpluses, (ii) funds from the Government, if any, and (iii) funds from other external sources as on the last day of the financial year, quantum in rupees of services provided (i) to members, and (ii) to non-members; and surplus or deficit at end of year and.

(d) annual disposal of surplus or management of deficit.

(2) Alongwith the return specified in sub-section (1) every cooperative shall furnish the following information to the Registrar, namely:-

(a) the date of the annual general meeting at which the returns being filed with the Registrar were considered and / or approved;

(b) the total number of members on the rolls of the cooperative who were eligible to vote on the date of such annual general meeting;

(d) list of names of directors, their addresses and their terms of office;

(e) name and address of the auditor appointed for auditing the current year’s accounts.

(3) The Registrar shall submit an annual report to the Government by 21st March of each year, containing statistical information on the cooperative in the State compiled from the returns received during the previous calendar year, under clause (e) of sub-section (1), with regard to the total number of cooperative in the state, their membership, funds, services and surplus or deficit; and the report shall also contain information on the strength of staff in the department of cooperation, including those on deputation, establishment expenses on the department, fee raised under this Act by the department and a statistical summary of statutory powers exercised during the previous calendar year.

(4) Any person may apply in writing to the Registrar seeking a copy of the Registrar’s annual report, or of any return or any information filed by the cooperatives with the Registrar, and such information shall be made available by the Registrar on reasonable fee.

47. Inquiry.- (1) The Registrar may after first providing an opportunity to the cooperative concerned to present its case, for reasons to be recorded in writing, of his/her own motion and shall, on the application of a secondary cooperative to which the cooperative concerned is affiliated, or of a creditor to whom the cooperative is indebted, or of not less than one third of the directors, or of not less than one tenth of the members, hold an inquiry or cause an inquiry to be made into any specific subject or subjects relating to any gross violation of any of the provisions of this Act by the cooperative.

(2) Except when an inquiry is undertaken on his own motion, the Registrar shall order an inquiry only after the receipt of a fee, from the applicant or the applicants, deemed sufficient to meet the costs of the inquiry to be conducted.

(3) The inquiry shall be completed within a period of one hundred and twenty days from the date of ordering the inquiry.

(4) If the inquiry is not completed within the time specified in sub-section (3); it shall lapse at the end of the said period and the Registrar shall refund to the applicants the fee collected from them.

(5) The Registrar shall, within a period of thirty days from the date of the completion of the inquiry, as specified in sub-section (3) or of the lapse of the inquiry as specified in sub-section (4) communicate the report of the inquiry or the reasons for the non-completion of the inquiry, as the case may be,-

(a) to the cooperative concerned;

(b) to the applicant secondary cooperative, if any;

(d) to the person designated by the applicant-directors, if any;

(e) to the person designated by the applicant-members, if any; and

(f) to any person, on payment of fee specified by the Registrar.

CHAPTER VII
OFFENCES

48. Offences.- (1) A person, who makes or assists in making a report, return notice or other document required in this Act to be sent to the Registrar or to any other person that contains an untrue statement of a material fact or omits to state a material fact which is required in the report or necessary to make a statement contained in the report not misleading in the light of the circumstances in which it was made shall be guilty of an offence and shall on summary conviction, be punishable-,

(a) in the case of an individual with a fine which may extend to one thousand rupees or with imprisonment for a term which may extend to three months or with both,

(b) in the case of a person other than an individual, with a fine which may extend to rupees ten thousand.

(2) Where the person guilty of an offence under sub-section (1) is a body corporate and whether or not the body corporate has been prosecuted or convicted, any director or officer of the body corporate who knowingly authorizes, permits or acquiesces in the offence shall also guilty of an offence and shall on summary conviction be punished with a fine which may extend to one thousand rupees or to imprisonment for a term which may extend to three months or with both.

(3) No person shall be guilty of an offence under sub-section (1) or (2) where the untrue statement or omission,-

(a) was unknown to him, and

(b) in the exercise of reasonable diligence could not have been known to him.

(4) Every person who,-

(a) without reasonable cause, contravenes a provision of this Act for which no penalty is otherwise provided, or

(b) fails to give any notice, send any return or document that is required by the this Act,

shall be guilty of an offence and shall on summary conviction, be punished with a fine which may extend to one thousand rupees.

(5) An offence by a cooperative shall be deemed to have been also committed by each office bearer of the cooperative bound by the articles of association thereof to fulfill the duties where of the offences is a breach, or if there is no such office bearer, then by each of the directors, unless the office bearer or directors, as the case may, be, prove to have attempted to prevent the commission of the offence.

(6) Where a person is convicted of an offence in pursuance of this Act, the Court may, in addition to any punishment imposed, order the person to comply with the provisions of this Act or the regulations for the contravention of which he has been convicted.

(7) No prosecution for an offence under the Act shall be commenced after two years from the time when the subject matter of the complaint arose.

(8) No civil remedy for an act or omission under the Act is suspended or affected by reasons that the act or omission is an offence under this Act.

CHAPTER VIII

Disputes

49. Disputes.- (1) Notwithstanding anything contained in any law for the time being in force, any dispute touching the constitution, management or business of a cooperative arises,-

(a) among members, past members and persons claiming through members and deceased members; or

(b) between a member, past member or a person claiming through a member, past member or deceased member and the cooperative, its board, director, office-bearer, or liquidator, past or present; or

(c) between the cooperative or its board and any past board, any director, office bearer, or any past director, past office bearer, or the nominee, heir, or legal representative of any deceased director or deceased office bearer of the cooperative,

such dispute shall be referred to the arbitral tribunal of the cooperative.

Explanation.- For the purposes of this sub-section, a dispute shall include a claim by a cooperative for any debt or other amount due to it from a member, past member, the nominee, heir or legal representative of a deceased member, and/or surety, whether such debt or other amount be admitted or not.

(2) If any question arises whether a dispute referred to the arbitral tribunal under this section is a dispute touching the constitution, management or business of the cooperative, such question shall be decided by the arbitral tribunal.

(3) The arbitral tribunal shall decide the dispute in accordance with the provisions of this Act and the articles of association, and such decisions shall be final. Pending final decision on the dispute, the arbitral tribunal may make such interlocutory orders, as it may deem necessary in the interest of justice.

(4) Every order or decision made under this section, shall be executed by the Civil court having jurisdiction, as if such order is a decree of that court, on a certificate issued by the arbitral tribunal.

(5) Notwithstanding anything in sub-section (4), or in any other law for the time being in force, and without prejudice to any other mode of recovery which is being taken or may be taken, an arbitral tribunal may, on the application made by the co-operative for the recovery of arrears due to the co-operative by any of its members, and on its furnishing a statement of accounts in respect of the arrears and after making such inquiry as the arbitral tribunal deems fit, issue a certificate for the recovery of the amount stated therein to be due as arrears.

(6) A certificate issued by the arbitral tribunal under sub-section (5) shall be final and conclusive proof of the arrears stated to be due and the certificate shall be executed by the chief executive in the manner specified in the articles of association.

50. Arbitral tribunal.- The articles of association of each cooperative shall provide for the constitution of an arbitral tribunal consisting of an individual or group of individuals not exceeding five chosen by the General body from among its members, in accordance with the provisions of articles of association.

CHAPTER IX
Dissolution

51. Dissolution by members.- (1) A cooperative may, by a special resolution, authorise its own dissolution:

Provided that a copy of the notice of the general meeting shall be sent by registered post with an invitation to attend, to the Registrar, to all to whom the cooperative owes money, to any secondary cooperative to which the cooperative is affiliated, and to any cooperative with which a partnership contract has been entered into.

(2) Invitees under the proviso of sub-section (1) shall have the right to make a presentation to the general body, if they so wish to, on the issue of the proposed dissolution.

(3) Within fifteen days of such authorization for dissolution, the cooperative shall send to the Registrar a copy by registered post of the authorization to dissolve the cooperative.

(4) The authorization approved in pursuance of sub-section (1) is required to set out,-

(a) the assets and liabilities of the cooperative;

(b) the claims of creditors;

(d) the nature of extent of the members’ interest in the cooperative;

(e) the name and address of the liquidator appointed by the cooperative.

(5) When a Registrar receives the special resolution passed in pursuance of sub-section (1),-

(a) where he is satisfied that the cooperative has no assets or liabilities, he may dissolve the cooperative, strike off its name from the register of cooperatives and issue a certificate of dissolution; or

(b) he, shall, within thirty days of such approval, cause at the expense of the cooperative a notice of the special resolution to be published once a week for two consecutive weeks in a newspaper published or distributed in the district where the registered office of the cooperative is located.

(6) In the case of dissolution, the Registrar may require till the certificate of dissolution is issued by him, from the liquidator appointed by the cooperative or any other person who is required to furnish information, a periodical return showing,-

(a) the progress of dissolution;

(b) the distribution of any undistributed surplus or reserve; and

52. Dissolution by Registrar.- (1) Where the Registrar has reasonable cause to believe that a cooperative,-

(a) has not commenced business within two years after the date shown on its certificate of incorporation; or

(b) has not carried on business for two consecutive years;

he shall send to the cooperative a letter by registered post, inquiring whether the cooperative is carrying on business.

(2) Where the Registrar does not, within thirty days of the date he sent a letter in pursuance of sub-section (1) received a reply to the letter, he shall, within fifteen days after the expiry of thirty days, send to the cooperative a letter stating that,-

(a) a letter was sent to the cooperative in pursuance of sub-section (1);

(b) no reply to that letter has been received by him,

(c) if reply answer is not received to the letter sent under this sub-section within thirty days from the date it is sent, a notice shall be published in the Gazette to dissolve the cooperative.

(3) Where the Registrar,-

(a) receives a reply from the cooperative that it is not carrying on business; or

(b) does not, within thirty days after the date that he sent a letter in pursuance of sub-section (2), receive a reply to that letter;

he may publish in the Gazette and send to the cooperative a notice that, at the expiry of thirty days from the date of that notice, the cooperative shall have its name struck off the register, or, unless cause is shown to the contrary, be dissolved.

(4) On the expiry of thirty days after the date of the issue of the notice in pursuance of sub-section (3), the Registrar may, unless cause to the contrary is previously shown by the cooperative,-

(a) where he is satisfied that the cooperative has no assets or liabilities, dissolve the cooperative, strike off its name from the register of cooperatives and issue a certificate of dissolution; or

(b) appoint a liquidator, in accordance with the section 54, to dissolve the cooperative.

(5) Where a cooperative fails to file returns and furnish information, as required under section 46, even after a lapse of two hundred and forty days from the close of the cooperative’s financial year, the Registrar shall require the board to call a special general meeting for the purpose of considering the annual return to be filed with and the information to be furnish to the Registrar.

(6) Where the board fails to call a special general meeting within the time specified in sub-section (2) of section 29, the Registrar may call the special general meeting to ascertain where the general body desires to continue the cooperative.

(7) Where,-

(a) a quorum of members is not present at a special general meeting called in pursuance of sub-section (5) or (6); or

(b) the general body fails to pass a resolution to the effect that,-

(i) the cooperative is to carry on business;

(ii) the board must present, within sixty days from the date of the special general meeting, to the general body the annual returns to be filed with and the information to be furnished to the Registrar, and

(iii) the cooperative will file a returns with and furnish the information to the Registrar within ninety days from the date of the special general meeting; or

(c) the cooperative fails to file the returns with and furnish the information to the Registrar within ninety days from the date of the special general meeting; the Registrar shall,-

(i) if he is satisfied that the cooperative has no assets or liabilities, dissolve the cooperative, strike off its name from the Registrar of cooperative and issue a certificate of dissolution; or

(ii) appoint a liquidator, in accordance with section 54, to dissolve the cooperative.

53. Dissolution by Court.- (1) The Registrar or an interested person may, after giving the cooperative ninety days notice of the proposed application, apply to the Court for an order dissolving a cooperative, where the cooperative:

(a) obtained its incorporation by fraud or mistake;

(b) exists for a illegal purpose;

(c) has willfully, after notice by the Registrar, violated any of the provisions of this Act or its articles of association; or

(d) is no longer operating on a cooperative basis.

(2) Where an interested person applies to a Court in pursuance of this section, he shall give the Registrar notice or his application and the Registrar is entitled to appear and be heard in person or by counsel.

(3) Where the Court receives an application in pursuance of this section, it may order that the cooperative be dissolved or liquidated and dissolved under the supervision of the Registrar.

(4) Where the Registrar receives an order made in pursuance of sub-section (3) he shall,-

(a) if the order is to dissolve the cooperative, dissolve it, strike off its name from the register of cooperatives and issue a certificate of dissolution; or

(b) if the order is to liquidate and dissolve the cooperative, appoint any person as a liquidator to wind up the affairs of the cooperative.

54. Appointment of liquidator.- Where a cooperative is to be dissolved and no liquidator is appointed by the general body or the Court, the Registrar may,-

(a) appoint any person as a liquidator to wind up the affairs of the co-operative; or

(b) where he is satisfied that the co-operative has no assets and liabilities, issue a certificate of dissolution.

55. Duties of liquidator.- A liquidator shall, -

(a) immediately after his appointment, give notice of his appointment,

(i)in the case of a liquidator not appointed by the Registrar, to the Registrar; and

(ii) to each claimant and creditor known to the liquidator;

(b) publish notice of his appointment in the Gazette and once a week for two consecutive weeks in a newspaper published or distributed in the district where the cooperative has its registered office and take reasonable steps to give notice of the liquidation in every jurisdiction where the cooperative carries on business;

(i) indebted to the cooperative, to render an account and pay to the liquidator at the time and place specified any amount owing;

(ii) possessing property of the cooperative, to deliver it to the liquidator at the time and place specified: in the notice; and

(iii) having a claim against the cooperative, whether liquidated, un-liquidated, further or contingent, to present particulars of the claim in writing to the liquidator at the time and place specified in the notice which shall not exceed sixty days from date of first publication of the notice.

(d) take into custody and control the property of the cooperative;

(e) open and maintain a trust account for the moneys of the cooperative;

(f) keep accounts of the moneys of the cooperative received and paid out by him;

(g) maintain separate lists of the members, creditors and other persons having claims against the cooperative;

(h) where at any time he determines that the cooperative is unable to pay or adequately provide for the discharge of its obligations, apply to the Registrar or general body, as the case may be, for directions; and

(i) deliver to the Registrar or general body, periodically as the Registrar or general body may require, financial statements of the cooperative in any form that the liquidator considers proper or that the Registrar or general body may require.

56. Functions and responsibilities of liquidator. – (1) The liquidator may,-

(a) retain lawyers, accountants, engineers, appraisers, professional advisors;

(b) bring, defend or take part in any civil, criminal or administrative proceeding in the name and on behalf of the cooperative;

(d) sell by public auction or private sale any property of the cooperative;

(e) do all acts and execute any documents in the name and on behalf of the cooperative;

(f) borrow money on the security of the property of the cooperative;

(g) settle or compromise any claims by or against the cooperative; and

(h) do all other things that he considers necessary for the liquidation of the cooperatives and distribution of its property.

(2) Where a liquidator has reason to believe that any person has in his possession or under his control, or has concealed, withheld or misappropriated any property of the cooperative, he may apply to the court for an order requiring that person to appear before the co operative tribunal at the time and place designated in the order and to be examined.

(3) Where the examination mentioned in sub-section(2) discloses that a person has concealed, withheld or misappropriated property of the cooperative, or has in possession or under his control the property of the co-operative the Co-operative tribunal may order that person to restore the property or pay compensation to the liquidator or on behalf of the cooperative.

(4) No liquidator shall purchase, directly or indirectly any part of the stock-in-trade, debts or assets of the cooperative.

57. Final accounts. – (1) A liquidator shall pay the costs of liquidation out of the property of the cooperative and shall pay or make adequate provision for all claims against the cooperative.

(2) After paying or making adequate provisions for all claims against the cooperative, the liquidator shall apply to the Registrar for approval of his final accounts and for permission to distribute in cash or in kind the remaining property of the cooperative in accordance with the articles of association.

(3) Where the Registrar approves the final accounts rendered by a liquidator in pursuance of sub-section (2) he shall,-

(a) issue directions with respect to the custody or disposal of the documents and records of the cooperative; and

(b) discharge of the liquidator.

(4) Where the Registrar discharges a liquidator under sub-section (3), he shall dissolve the cooperative, issue a certificate of dissolution and strike off its name from the register of cooperative.

(5) The cooperative ceases to exist on the date shown in the certificate of dissolution, which shall not be later than two years after the appointment of the liquidator.

CHAPTER X

Miscellaneous

58. Exemption from certain taxes, duties and fees. – The Government, if in its opinion it is necessary in the public interest so to do, may be notification in the Gazette, and subject to such restrictions and conditions as may be specified in such notification, reduce or exempt in respect of cooperatives,-

(a) the taxes on professions, trades, callings and employments;

(b) the stamp duty with which, under any law for the time being in force, instruments executed by or on behalf of a cooperative or by an office bearer, or director or member and relating to business of such cooperative or any class of such instruments or decisions or orders of the Registrar or arbitral tribunal or liquidator under this Act, are respectively chargeable;

59. Exemption from compulsory incorporation of instruments. – Nothing in the Indian Registration Act, 1908 shall apply to –

(a) any instruments relating to shares in a cooperative notwithstanding that the assets of the cooperative consist in whole or in part of immovable property.

(b) any debentures issued by any such cooperative and not creating, declaring, assigning, limiting or extinguishing any right, title or interest to or in immovable property except in so far as it entitles the holder to the security afforded by a registered instrument whereby the cooperative 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 debentures; or

60. Removal of difficulty:- (1) If any difficulty arises in giving effect to the provisions of this Act, the State Government may issue such order not inconsistent with the provisions of this Act as it may deem necessary to remove such difficulty:

Provided that no such order shall be passed after be passed after the expiry of the period of two years from the date of coming into force of this Act.

(2) The order passed under sub-section(1) shall be laid on the table of the legislative assembly.

61. Right Information.- Any member or creditor having interest in the affairs of the cooperative may seek information relating to any transaction of the cooperative and for that purpose may be provided a certified copy of any document within one month of application relating to such transaction on payment of such fee as may be specified in the articles of association.

62. Bar of Jurisdiction of Courts:- (1) Save as provided in this Act, no Civil shall have jurisdiction in respect of-

(a) the registration or conversion of a Cooperative or of an amendment of a bye - law;

(b) any matter concerning the winding up and the dissolution of a Cooperative.

(2) While a Cooperative is being wound-up no suit or other legal proceedings relating to the business of such Co-operative shall be proceeded with, or instituted against, the liquidater as such or against the Cooperative or any member thereof

(3) Save as provided in this Act, no order, decision or award made under this Act shall be questioned in any court or any ground whatsoever

63. Indemnity for acts done in good faith.- No suit, prosecution or other legal proceedings shall lie against the Registrar or any person subordinate to him or acting under his authority, in respect of anything done or purporting to have been done by him in good faith under this Act.

64. Directors, Office bearers of co operative auditors, members of arbitral tribunal etc. to be public servant.- All office bearers and directors of a cooperative, the auditors appointed by the co operative , the members of arbitral tribunal shall be deemed , when acting or purporting to act in pursuance of any of the provisions of this Act to be public servant within the meaning of section 21 of the Indian Penal Code, 1860 (Central Act 45 of 1860)

65. Settlement of Disputes by co operative Tribunal.- (1)If any dispute arises touching the constitution management of business of a co-operative , and matters connected therewith or incidental thereto:-

(a) among members, past members or persons claiming through members, past members and deceased members; or

(b) between a member, past member or a person claiming thorugh a member, past member or deceased member and the co-operative, its board, director, office-bearer or lilquidator past or present or

(c) between the cooperative or its board and any past board, director, office bearer. or the nominee, heirs, or legal representatives of any deceased director, deceased officer, of the co-operative; or

(d) between the cooperative and any other cooperative; or

(e) between the promoters of a cooperative and the Registrar, or a cooperative and the Registrar; or

(f) between a cooperative and liquidator of another cooperative or between the liquidators of two or more cooperatives

such disputes may be referred to the tribunal for decision:

Provided that no dispute shall be referred under this section to the tribunal unless the disputing parties exhausted all remedies that may be available in the articles of association for the settlement of disputes.

SCHEDULE - A

(See section 2(j), 2(k), 3(3)a, 4(3)(a)

STATEMENT OF CO-OPERATIVE IDENTITY

1. Definition.- A cooperative is an autonomous association of persons united voluntarily to meet their common economic, social and cultural needs and aspirations through a jointly owned and democratically controlled enterprise.

2. Values.- Cooperatives are based on the values of self-responsibility, democracy, equality, equity, and solidarity. In the tradition of their founders, cooperative members believe in the ethical values of honesty, openness, social responsibilities and caring for others.

3. Principles.- The cooperative principles are guidelines by which cooperatives put their values into practice.

Ist Principle: Voluntary and Open Membership

Cooperatives are voluntary organisations, open to all persons able to use their services and willing to accept the responsibilities of membership, without gender, social, racial, political, or religious discrimination.

2nd Principle: Democratic Member Control

Cooperatives are democratic organisations controlled by their members, who actively participate in setting their policies and making decisions. Men and women serving as elected representatives are accountable to membership. In primary cooperatives members have equal voting rights (one member's one vote) and cooperatives at other levels are also organized in democratic manner.

3rd Principle: Member Economic Participation

Members contribute to, and democratically control, the capital of their cooperative. At least part of that capital is usually the common property of the cooperative. Members usually receive limited compensation, if any, on capital subscribed to as a condition of membership. Members allocate surpluses for any of the following purposes: developing their cooperative, possibly by setting up reserves, part of which at lease would be indivisible; benefiting members in proportion to their transactions with the cooperative; and supporting other activities approved by the membership.

4th Principle: Autonomy and Independence

Cooperatives are autonomous, self-help organisations controlled by their members. If they enter into agreements with other organisations, including Governments, or raise capital from external sources, they do so in terms that ensure democratic control by their members and maintain their cooperative autonomy.

5th Principle: Educations, Training and Information

Cooperatives provide education and training for their memebrs, elected representatives, managers, and employees so they can contribute effectively to the development of their cooperatives. They inform the general public particularly bound people and opinion leaders – about the nature and benefits of cooperation.

6th Principle: Cooperation among Cooperatives

Cooperatives serve their members most effectively and strengthen the cooperative movement by working through local, national, regional, and international structures.

7th Principle: Concern for community

Cooperatives work for the sustainable development of their communities through policies approved by their members.

SCHEDULE B

[section 3(2)]

Memorandum of A