TaxTMI 
TaxTMI 
Multi-State Co-operative Societies (Amendment) Act, 2023
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing into force of that provision. Amendment of section 3. 2. In section 3 of the Multi-State Co-operative Societies Act, 2002 (39 of 2002.) (hereinafter referred to as the principal Act),-- (i) after clause (a), the following clause shall be inserted, namely:- '(aa) "Authority" means the Co-operative Election Authority established under sub-section (1) of section 45;'; (ii) in clause (d), for the words, brackets and figures "under sub-section (1) of section 4", the words, brackets, letters and figures "as per clause (f) of article 243ZH of the Constitution read with sub-section (1) of section 4" shall be substituted; (iii) after clause (f), the following clause shall be inserted, namely:- '(fa) "Co-operative Ombudsman" means the Ombudsman appointed by the Central Government under section 85A;'; (iv) clause (i), shall be omitted; (v) after clause (k), the following clause shall be inserted, namely:- '(ka) "financial year", in relation to any multi-State co-operative society or class of such societies, means the year ending on the 31st day of March of the year and where the accounts of such society or class of such societies are, with the previous sanction of the Ce....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... be made, unless the applicant has been given an opportunity of being heard: Provided further that if the application for registration is not disposed of within the period specified in sub-section (3) or the Central Registrar fails to communicate the order of refusal within the said period, the application shall be deemed to have been accepted for registration and the Central Registrar shall issue the registration certificate in accordance with the provisions of this Act and the rules made thereunder.". Amendment of section 10. 4. In section 10 of the principal Act, in sub-section (2), in clause (a), for the word "address", the words and brackets "address, including e-mail address" shall be substituted. Amendment of section 14. 5. In section 14 of the principal Act,- (i) for the marginal heading "Change of address", the marginal heading "Address" shall be substituted; (ii) for the word "address", the words "address, including e-mail address," shall be substituted. Amendment of section 17. 6. In section 17 of the principal Act, after sub-section (9), the following sub-section shall be inserted, namely:-- "(10) Any co-operative society may, by a resolution passed by maj....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... two consecutive years; or". Amendment of section 30. 12. In section 30 of the principal Act, in sub-section (2), for the words "one year", the words "three years" shall be substituted. Substitution of new section for section 35. 13. For section 35 of the principal Act, the following section shall be substituted, namely:-- Redemption of shares. "35. (1) The shares of the authorities referred to in clauses (c) and (d) of sub-section (1) of section 25, held in multi-State co-operative societies,-- (a) shall not be redeemed without the prior approval of such authorities; and (b) may be redeemed in such manner as may be agreed upon between the multi-State co-operative society and such authorities. (2) The shares held in a multi-State co-operative society by any of the authorities referred to in clauses (e) to (g) of sub-section (1) of section 25, shall be redeemed in accordance with the bye-laws of such multi-State co-operative society and in case, where the bye-laws do not contain any provision, in such manner as may be agreed upon between the multi-State co-operative society and such authorities. (3) The redemption of shares referred to in sub-sections (1) and (2), sha....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r's father; (i) father's mother; (j) mother's father; (k) mother's mother; (l) son's son; (m) son's son's wife; (n) son's daughter; (o) son's daughter's husband; (p) daughter's son; (q) daughter's son's wife; (r) daughter's daughter; (s) daughter's daughter's husband; (t) brother (including step brother); (u) brother's wife; (v) sister (including step sister); (w) sister's husband; and (x) Hindu undivided family. (7) Any director of the board who violates the provision of sub-section (6), shall be disqualified for being a member of the board and deemed to have vacated his office from the date of such meeting of the board as is referred to in the said sub-section and such proceedings shall be deemed to be void.'. Amendment of section 43. 16. In section 43 of the principal Act,-- (i) in sub-section (1),-- (a) in clause (a), after the words "to be insolvent", the words "or has been a director of an insolvent company" shall be inserted; (b) in clause (h), after the words "under this Act", the words "or under any other Act specified in the Third Schedule" shall be inserted; (c) after clause (n), the following clause shall be inserted, namely:-....
X X X X Extracts X X X X
X X X X Extracts X X X X
....appointed by the Central Government on the recommendation of the Selection Committee consisting of such persons as may be prescribed. (2) The head office of the Authority shall be at such place as may be notified by the Central Government. (3) A person shall not be qualified for appointment as a,-- (i) Chairperson of the Authority unless he held the post of Additional Secretary to the Government of India or equivalent rank; (ii) Vice-Chairperson of the Authority unless he held the post of Joint Secretary to the Government of India or equivalent rank; and (iii) Member unless he fulfils such qualification and experience as may be prescribed. (4) The Chairperson, Vice-Chairperson or Member of the Authority shall hold office for a period of three years from the date on which they enter upon their office or until they attain the age of sixty-five years, whichever is earlier and they shall be eligible for re-appointment: Provided that in case of appointment of a Government servant as a Chairperson, Vice-Chairperson or a Member, he shall be treated as an ex officio Member and he shall continue so long as he holds the office by virtue of which he is a Chairperson, Vice-Chairp....
X X X X Extracts X X X X
X X X X Extracts X X X X
....all satisfy itself that the person does not have any such financial or other interest as is likely to affect prejudicially his functions as such Chairperson, Vice-Chairperson or Member. (2) The Chairperson, Vice-Chairperson or Members shall immediately after entering office and every year thereafter, make a declaration as to the extent of their interest, whether direct or indirect and whether financial or otherwise, in any co-operative society. (3) The declaration so made under sub-section (2) shall be placed in the public domain by the Authority. Resignation of Members 45D. The Chairperson, Vice-Chairperson or Members, other than ex officio Members, may, by notice in writing of not less than thirty days under their hand addressed to the Central Government, resign their office and on such resignation being accepted by that Government, shall be deemed to have vacated their office: Provided that the Chairperson, Vice-Chairperson or Member shall, unless he is permitted by the Central Government to relinquish his office sooner, continue to hold office until the expiry of three months from the date of receipt of such notice or until a person duly appointed as his successor ent....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rcise a second or casting vote. (4) Save as otherwise provided in sub-section (1), every Member shall have one vote. Functions of Authority. 45-I. The Authority shall discharge the following functions, namely:-- (i) conduct the elections of the multi-State co-operative society; (ii) supervise, direct and control the matters relating to preparation of electoral rolls; and (iii) such other functions as may be prescribed. Elections of members of board. 45J. (1) No person shall be eligible to be elected as a member of the board or office bearer of a multi-State co-operative society, unless he is an active member of the general body of that society. Explanation.-For the purposes of this sub-section, the term "active member" means any member- (i) availing minimum level of products or services of the society; or (ii) attending not less than three consecutive general meetings, as specified in section 29. (2) A member of the board or office bearer of a multi-State co-operative society shall cease to be such member or office bearer, if he ceases to be a member of general body of that society. (3) The election of members of board shall be held by secret ballot in suc....
X X X X Extracts X X X X
X X X X Extracts X X X X
....consider necessary to assist the Returning Officer. Power to issue directions. 45L. The Authority may, by general or special order, issue such directions to the board, its members, Chief Executive and other staff of the multi-State co-operative society as may be necessary for the conduct of free and fair elections and the board, its members, Chief Executive and staff of the society shall comply with such directions.'. Amendment of section 49. 18. In section 49 of the principal Act, in sub-section (2),-- (i) after clause (a), the following clause shall be inserted, namely:-- "(aa) to elect the Chairperson and Vice-Chairperson or President and Vice-President of the multi-State co-operative society from amongst the elected members of the board in accordance with the directions of the Authority: Provided that the certificate of election shall be issued by the Chief Executive of the multi-State co-operative society after conclusion of resolution by the board;"; (ii) in clause (e), the following proviso shall be inserted, namely:- "Provided that the recruitment of such employees shall be subject to such procedure as may be prescribed.". Amendment of section 50. 19. In sec....
X X X X Extracts X X X X
X X X X Extracts X X X X
....se (j), for the words "thirty days", the words "forty-five days" shall be substituted. Amendment of section 53. 22. In section 53 of the principal Act, for sub-section (1), the following sub-section shall be substituted, namely:-- "(1) The board may constitute an Executive Committee, and such other committees or sub-committees as may be specified in the bye-laws of the multi-State co-operative society: Provided that the board shall constitute- (a) an Audit and Ethics Committee; (b) a Committee on prevention of sexual harassment at work place.". Amendment of section 63. 23. In section 63 of the principal Act, in sub-section (1), for clause (b), the following clause shall be substituted, namely:-- "(b) credit annually one per cent. of net profit to co-operative education fund to be maintained by the Central Government in such manner as may be prescribed and the proceeds from such fund shall be used for co-operative education and training through the National Co-operative Union of India and any other agency in such manner as may be determined by the Central Government;". Insertion of new sections 63A, 63B and 63C. 24. After section 63 of the principal Act, the followin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tive society" means a multi-State co-operative society being a society registered under the provisions of this Act which has at the end of any financial year accumulated losses equal to or exceeding total of its paid-up capital, free reserves and surpluses and has also suffered cash losses in such financial year and the financial year immediately preceding such financial year. Financial assistance to multi-State co-operative societies for development. 63C. (1) The Central Government may, on an application made by a multi-State co-operative society which has contributed to the Fund for continuous five preceding financial years, grant such financial assistance as it may consider appropriate to the society out of the Fund for infrastructural requirement: Provided that at least fifty per cent. of the total requirement shall be borne by the multi-State co-operative society and the financial assistance from the Fund shall not exceed more than the fifty per cent. of such requirement. (2) The Committee constituted under sub-section (2) of section 63A shall examine and recommend to the Central Government for providing the financial assistance to the multi-State co-operative society ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tate co-operative society, within six months from the date of closing of the financial year, to which such accounts relate."; (c) in sub-section (7), in clause (a), for the proviso, the following proviso shall be substituted, namely:-- "Provided that where such vacancy is caused by the resignation or death of an auditor, the vacancy shall be filled by the board from the panel of auditors from which such auditor was appointed."; (d) after sub-section (9) and the Explanation thereunder, the following sub-section shall be inserted, namely:- "(10) The audit report of the accounts of the national co-operative societies shall be laid before each House of Parliament.". Insertion of new section 70A. 28. After section 70 of the principal Act, the following section shall be inserted, namely:- Concurrent Audit. "70A. In case of multi-State co-operative societies,-- (i) having an annual turnover more than the amount as determined by the Central Government; or (ii) having deposit of more than the amount as determined by the Central Government, the concurrent audit shall be carried out by an auditor appointed from a panel of auditors approved by the Central Registrar.". Amen....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oint, one or more Co-operative Ombudsman with territorial jurisdiction for inquiring into the complaints made by any member of the multi-State co-operative societies regarding their deposits, equitable benefits of society's functioning or any other issue affecting the individual rights of the concerned member, in such manner, as may be prescribed. (2) The Co-operative Ombudsman shall, on receipt of a complaint, complete the process of inquiry and adjudicate within a period of three months from the date of receipt of the complaint and may issue necessary directions to the society during the course of inquiry and the society shall be bound to comply with the same within a period of one month from the date of issuance of such directions. (3) The multi-State co-operative society aggrieved by any directions of the Ombudsman may file an appeal in such manner as may be prescribed, within a period of one month before the Central Registrar who shall decide the appeal within a period of forty-five days and the decision of the Central Registrar shall be final and binding: Provided that the Central Registrar may entertain the appeal after the expiry of said period of one month, if he is sat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ngs and loan association, trust company, insurance company, real estate investment trust, pension fund and the like.'. Amendment of section 94. 33. In section 94 of the principal Act, in the opening paragraph, after the words and figures "section 83 or", the words and figures "section 84 or" shall be inserted. Amendment of section 98. 34. In section 98 of the principal Act, after sub-section (2), the following sub-section shall be inserted, namely:- "(3) The Central Registrar shall also have the power to recover the following dues by attaching bank accounts of defaulting multi-State co-operative societies- (a) the co-operative education fund referred to in clause (b) of sub-section (1) of section 63; (b) the Co-operative Rehabilitation, Reconstruction and Development Fund established under section 63A; and (c) the expenses incurred by the Co-operative Election Authority for conduct of elections.". Insertion of new section 98A. 35. After section 98 of the principal Act, the following section shall be inserted, namely:- Review of decision. ''98A. The Central Registrar may, on an application received from any party, review his decision under clause (a) or clause (b) ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....),- (i) in clause (h), after the words "to any person", the words "or receives such gift, promise or gratification" shall be inserted; (ii) in the long line, occurring after sub-clause (iii) of clause (h), after the words "or with both", the words "and shall also be debarred from contesting elections for a period of three years" shall be inserted; (e) after sub-section (4), the following sub-section shall be inserted, namely:- "(5) Where a multi-State co-operative society,- (a) which is required to provide an explanation or make a statement during the course of inspection, inquiry or investigation, destroys, mutilates or falsifies, or conceals or tampers or unauthorisedly removes, or causes the destruction, mutilation or falsification or concealment or tampering or unauthorised removal of, any document relating to the property, assets or affairs of the society or makes or causes to make a false entry in any document concerning the society; (b) makes any investment in contravention of the provision of section 64 or the bye-laws made under this Act; (c) causes unlawful loss to the assets and property of the society; or (d) causes unlawful loss to the depositor, the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....inal and binding. Copy of rules and bye-laws, etc., for inspection. 106A. Every Chief Executive of multi-State co-operative society shall keep a copy of the rules and its bye-laws and also a list of its members, open to inspection free of charge at all reasonable times, at the registered address of the multi-State co-operative society.". Amendment of section 108. 40. In section 108 of the principal Act, in sub-section (1), in clause (i), after the words "Central Registrar" the words, "or any person authorised by him in this behalf, not below the rank of Assistant Commissioner or equivalent" shall be inserted. Amendment of section 109. 41. In section 109 of the principal Act, in clause (a), for the words "co-operative year", the words "financial year" shall be substituted. Amendment of section 116. 42. In section 116 of the principal Act,- (i) for the marginal heading, the following marginal heading shall be substituted, namely:- "Power to amend Schedules."; (ii) after sub-section (1), the following sub-section shall be inserted, namely:- "(1A) If the Central Government is satisfied that it is necessary or expedient so to do, it may, by notification, amend the Firs....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ctronic form, as is otherwise available for inspection under this Act or the rules made thereunder, may be made by any person through the electronic form; and (e) such fees, charges or other sums payable under this Act or the rules made thereunder shall be paid through the electronic form, in such manner as may be prescribed. (2) The Central Registrar shall- (a) issue certificate of registration; (b) register the amendment of bye-laws; (c) register change of registered office; (d) register any document; (e) issue any certificate; (f) issue notice; and (g) receive such communication as may be required to be registered or issued or recorded or received, as the case may be, under this Act or the rules made thereunder or perform duties or discharge functions or exercise powers under this Act or the rules made thereunder or do any act which is by this Act directed to be performed or discharged or exercised or done by the Central Registrar, in the electronic form in such manner as may be prescribed. Application of Banking Regulation Act, 1949. 120B. The provisions of this Act shall apply to a multi-State co-operative society in respect of matters relating to incorpor....
X X X X Extracts X X X X
X X X X Extracts X X X X
....or loan or financial assistance or any guarantee by the Government.'. Amendment of section 124. 47. In section 124 of the principal Act,- (a) in sub-section (2),- (i) after clause (a), the following clause shall be inserted, namely:- "(aa) the guidelines under sub-section (2) of section 7;"; (ii) after clause (j), the following clause shall be inserted, namely:- "(ja) the manner in which the board of a multi-State co-operative society shall provide information, documents, personnel, funds or expenses or any other assistance as sought by the Co-operative Election Authority for conducting elections under clause (a) of sub-section (2) of section 43;"; (iii) for clause (k), the following clauses shall be substituted, namely:- "(k) the composition of the Selection Committee for appointment of Chairperson, Vice-Chairperson and Members of the Co-operative Election Authority under sub-section (1) of section 45; (ka) the qualification and experience for appointment of Member of the Authority under clause (iii) of sub-section (3) of section 45; (kb) the salaries and allowances payable to, and other terms and conditions of service of the Chairperson, Vice-Chairperson....
X X X X Extracts X X X X
X X X X Extracts X X X X
....xercising powers with respect to matters mentioned therein by the Central Registrar in electronic form under sub-section (2) of section 120A;"; (b) for sub-section (3), the following sub-section shall be substituted, namely:- "(3) Every rule made under this section and any notification issued under section 116 shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree that the rules and any notification issued under section 116 should not be made, the rule and any notification issued under section 116 shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule and any notification issued under section 116.". Amendment of section 125. 48. In section 125 of the principal Act, after sub-section (1), the following sub-se....