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TMI BlogMulti-State Co-operative Societies (Amendment) Act, 2023X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 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 Central Registrar, balanced on any other day, the year ending on such day; ; (vi) in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lication 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 majority of not less than two-thirds of the members present and voting at a general meeting of such society, decide to merge into an exis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tituted. 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), shall be on the face value of shares. . Amendment of section 39. 14 . In section 39 of the principal Act, in sub-section (1), after clause (o), the following clause shall be inserted, namely: (p) app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aughter 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: (o) has been disqualified under sub-section (7) of section 41. ; (ii) after sub-section (1), the following sub-section shall be inserted, namely: (1A) A member who has been a director of the board of any multi-State co-operative society or co-operative bank, where such board has been superse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld 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-Chairperson or Member. (5) The salaries and allowances payable to, and the other terms and conditions of service of the Chairperson, Vice-Chairperson and Members of the Authority, other than the ex officio Member, shall be such as may be prescribed. Power of Chairperson. 45A. The Chairperson of the Authority shall have powers of general superintendence and direc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hether 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 enters upon his office or until the expiry of his term of office, whichever is the earliest. Filling of casual vacancy. 45E. If a casual vacancy occurs in the office of the Chairperson, Vice-Chairperson or Member of the Authority, whether by reason of his death, resignation or otherwise, such vacancy shall be filled within a period of ninety days by making a fresh appointment in accordance with the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns 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 such manner as may be prescribed. (4) The election of the members of the board shall be held in the general meeting of the members of the multi-State co-operative society and the elected members of the board shall, if the bye-laws of such society permit, be eligible for re-election. (5) The term of office of elected members of the board and its office bearers shall be five years from the date of election and the term of office bearers shall be co-terminus wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 section 50 of the principal Act, (a) in sub-section (1), the following provisos shall be inserted, namely: Provided that where such Chairperson or President fails to direct the Chief Executive to convene the meeting of the board within the quarter, such Chief Executive shall convene the meeting on the basis of requisition of the Vice-Chairperson or Vice-President or any other Member of the board: Provided further that notwithstanding anything contained in the first proviso, the Chief Executive may also conv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dment 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 following sections shall be inserted, namely: Establishment of Co-operative Rehabilitation, Reconstruction and Development Fund. 63A. (1) The Central Government shall establish a Fund, to be called the Co-operative Rehabilitation, Reconstruction and Development Fund for revival of sick multi-State co-operative societies as referred to in section 63B and for development purposes in such manner as may be determined by it and there shall be credited to such Fund annually by multi-State co-operative societies which are in profit for the preceding three financial years one crore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uous 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 to such extent and on such terms and conditions as it may consider necessary. . Amendment of section 64. 25 . In section 64 of the principal Act, (i) for clause (b), the following clause shall be substituted, namely: (b) in any of the securities issued by the Central Government, State Government, Government Corporations, Government Companies, Authorities, Public Sector Undertakings or any other securities ensured by Government guarantees; ; (ii) in clause (d), after the words any other institution , the words in the same line of business as the multi-State co-operative society shall be inserted; (ii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. . 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. . Amendment of section 73. 29 . In section 73 of the principal Act, after sub-section (5), the following sub-section shall be inserted, namely: (6) the multi-State co-operative society or class of multi-State co-operative societies, as the case may be, shall adopt such standards of auditing and accounting as may be determined by the Central Government: Provided that until such standards of auditing and accounting are specified, the auditing and accounting standards specified by the Institute of Chartered Accountants of India constituted by sub-section (1) of section 3 of the Chartered Accountants Act, 1949 (38 of 1949) shall be deemed to be the standards of auditing and accounting: Provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssuance 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 satisfied that the society was prevented by sufficient cause from preferring the appeal in time. (4) The Ombudsman shall submit periodic reports to the Central Registrar of Co-operative Societies. (5) The Co-operative Ombudsman while conducting the inquiry under sub-section (1), shall exercise the same powers as are vested in a civil court under the Code of Civil Procedure, 1908 (5 of 1908.), (a) for summoning and enforcing the attendance of persons; (b) examining them on oath; (c) discovery and production of books of account and other documents; and (d) any other matter which may be prescribed. . Amendment of section 86. 32 . In section 86 of the principal Act, (a) in sub-section (1), after the words and figures ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... blished 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) or clause (c) of sub-section (1) of section 94: Provided that no application for review shall be entertained against the recovery certificate issued by the Central Registrar or by any person authorised by him in writing in this behalf, unless the applicant deposits with the concerned society, fifty per cent. of the amount of the recoverable dues: Provided further that no application for review shall be entertained, if made after sixty days of the date of receipt of the decision or order: Provided also that the Central Registrar may entertain any such application made after such period, if the applicant satisfies that he had sufficient cause for not making the application within such period. . Amendment of section 103. 36 . In section 103 of the principal Act, in sub-section (1), the following pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 board of directors or the responsible officers of the multi-State co-operative society shall be punishable with imprisonment for a term which shall not be less than one month but which may extend to one year or with fine which shall not be less than five thousand rupees but may extend to one lakh rupees or with both. (6) Where the board of directors or officers of the multi-State co-operative society receive any unlawful gains while transacting matters related to such society or utilise any assets of the society for personal unlawful gains, such directors or officers concerned shall be punishable with imprisonment for a term which shall not be less than one month but which may extend to one year or with fine which shall not be less than five thousand rupees but may extend to one lakh rupees or with both and the proceeds of such unlawful gains shall be recovered from them and depo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 First Schedule and the Third Schedule and thereupon such Schedules shall be deemed to have been amended accordingly: Provided that in case of the First Schedule, such notification shall be used only for adding to the co-operative principles in the list. ; (iii) in sub-section (2), for the word, brackets and figure sub-section (1) , the words, brackets, figures and letter sub-sections (1) and (1A) shall be substituted. Amendment of section 120. 43 . In section 120 of the principal Act, (i) for clause (a), the following clause shall be substituted, namely: (a) annual report of the activities including details of board decisions which were not unanimous; ; (ii) for clause (f), the following clauses shall be substituted, namely: (f) disclosure regarding employees who are relatives of Members of board; (g) declaration of any related party transactions by the board of directors; and (h) any other information required by the Central Regist ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er 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 incorporation, regulation and winding up: Provided that in case of a multi-State co-operative society carrying on the business of banking, the provisions of the Banking Regulation Act, 1949 (10 of 1949) shall also apply. . Amendment of section 121. 45 . In section 121 of the principal Act, in sub-section (1), for the words and figures the Companies Act, 1956 (1 of 1956.) and the Monopoly and Restrictive Trade Practices Act, 1969 (54 of 1969.) , the words and figures the Companies Act, 2013 (18 of 2013.) and the Competition Act, 2002 (12 of 2003) shall respectively be substituted. Amendment of section 123. 46 . In section 123 of the principal Act, (i) in sub-section (1), (a) for the portion beginning with or has committed any act and ending with the aggregate period does not exceed one year , the following shall be substituted, namely: 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (kb) the salaries and allowances payable to, and other terms and conditions of service of the Chairperson, Vice-Chairperson and Members of the Authority under sub-section (5) of section 45; (kc) the other powers and functions of Chairperson under section 45A; (kd) the procedure of inquiry under sub-section (2) of section 45B; (ke) time, places and the procedure to be observed by the Authority in regard to transaction of business at its meetings under sub-section (1) of section 45H; (kf ) other functions of the Authority under clause (iii) of section 45-I; (kg) the manner of election of members of board by secret ballot under sub-section (3) of section 45J; (kh) the manner of bearing the expenses for holding elections by the Authority under sub-section (6) of section 45J; (ki) the manner of discharge of functions by the Returning Officers and observers under sub-section (1) and clause (a) of sub-section (3) of section 45K; (kj) other functions of the observers under clause (a) of sub-section (3) of section 45K; ; (iv) after clause (m), the following clause shall be inserted, namely: (ma) the procedure for recruitment of employees under proviso to clause (e) of sub-section (2) of se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e principal Act, after sub-section (1), the following sub-section shall be inserted, namely: (1A) Notwithstanding anything contained in sub-section (1), if any difficulty arises in giving effect to the provisions of this Act as amended by the Multi-State Co-operative Societies (Amendment) Act, 2023, the Central Government may, by order published in the Official Gazette, make such provisions not inconsistent with the provisions of this Act as may appear to it to be necessary for removing the difficulty: Provided that no such order shall be made under this section after the expiry of a period of two years from the date of commencement of the Multi-State Co-operative Societies (Amendment) Act, 2023. . Insertion of Third Schedule. 49 . After the Second Schedule to the principal Act, the following Schedule shall be inserted, namely: THE THIRD SCHEDULE [ See clause ( h ) of sub-section ( 1 ) of section 43] Sl. No. Name of the Act Act Number 1. The Indian Stamp Act, 1899 2 of 1899. 2. The Reserve Bank of India Act, 1934 2 of 1934. 3. The Central Excise Act, 1944 1 of 1944. 4. The Industries (Development and Regulation) Act, 1951 65 of 1951. 5. The Prevention of Food Adulteration Act, 1954 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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