Section 123 - Supersession of board of specified multi‑State co‑operative society. - Multi-State Co-Operative Societies Act, 2002

Supersession of board of specified multi‑State co‑operative society. 123. (1) If in the opinion of the Central Government, the board of any specified multi‑State co‑operative society is persistently making default or is negligent in the performance of the duties imposed on it by this Act or the rules or the bye‑laws 1 [ or has committed any act including fraud, misappropriation and the like which is prejudicial to the interests of the society or its members, or has omitted or failed to comply with any directions given to it under section 122 in public interest or that there is a stalemate in the constitution or functions of the board or the Co-operative Election Authority has failed to conduct elections in accordance with the provisions of this Act, the Central Government may, after giving the board an opportunity to state its objections, if any, and considering the objections, if received, by order in writing, supersede or suspend the board and appoint one or more administrators, who need not be members of the society, to manage the affairs of the society for such period not exceeding six months, as may be specified in the order: ] : 2 [ Provided that while taking a decision for supersession or suspension on grounds of failure to conduct election, such action shall only be taken if the Board had not given requisition to hold election to the Co-operative Election Authority within the time limit or not extended necessary assistance as per the provisions of section 45. ] (2) The Central Government may fix such remuneration for the administrators, as it may think fit and the remuneration shall be paid out of the funds of the specified multi‑State co‑operative society. (3) The administrator shall, subject to the control of the Central Government and to such instructions as it may from time to time give, have power to exercise all or any of the functions of the board or of any officer of the specified multi‑State co‑operative society and take all such actions as may be required in the interests of the society. (4) Save as otherwise provided in sub‑section (5), the administrator shall, before the expiry of his term of office, arrange for the constitution of a new board in accordance with the bye‑laws of the specified multi‑State co‑operative society. (5) If, at any time during the period the administrator is in office, the Central Government considers it necessary or expedient so to do, it may, by order in writing giving reasons therefor, direct the administrator to arrange for the constitution of a new board for such specified multi‑State co‑operative society in accordance with the bye‑laws of such society and immediately on the constitution of such board, the administrator shall hand over the management of such society to such newly constituted board and cease to function. (6) Where a specified multi‑State co‑operative society is indebted to any financial institution, the Central Government shall, before taking any action, under sub‑section (1) in respect of that society, consult the financial institution. 3 [ Explanation. For the purposes of section 122 and this section, the expression specified multi-State co-operative society means any multi-State co-operative society where there is Government shareholding or loan or financial assistance or any guarantee by the Government. ] **************** NOTES:- 1. Substituted vide THE MULTI-STATE CO-OPERATIVE SOCIETIES (AMENDMENT) ACT, 2023 dated 03-08-2023 before it was read as, or has committed any act which is prejudicial to the interests of the society or its members, or has omitted or failed to comply with any directions given to it under section 122 or that there is a stalemate in the constitution or functions of the board, the Central Government may, after giving the board an opportunity to state its objections, if any, and considering the objections, if received, by order in writing, remove the board and appoint one or more administrators, who need not be members of the society, to manage the affairs of the society for such period not exceeding six months, as may be specified in the order which period may, at the discretion of the Central Government, be extended from time to time; so, however, that the aggregate period does not exceed one year 2. Substituted vide THE MULTI-STATE CO-OPERATIVE SOCIETIES (AMENDMENT) ACT, 2023 dated 03-08-2023 before it was read as, Provided that in the case of a co‑operative bank, the provisions of this sub -section shall have effect as if for the words one year , the words two years had been substituted. 3. Substituted vide THE MULTI-STATE CO-OPERATIVE SOCIETIES (AMENDMENT) ACT, 2023 dated 03-08-2023 before it was read as, Explanation . For the purposes of sections 122 and 123, specified multi‑State co‑operative society means any multi‑State co‑operative society in which not less than fifty‑one per cent of the paid‑up share capital, or, of total shares, is held by the Central Government.