Supersession or suspension of Committee of Management

§35

Summary

3[(1) Where, in the opinion of the Registrar, the Committee of Management of any co-operative society persistently makes default or is negligent in the performance of the duties imposed on it by this Act or the rules or the bye-laws of the society or commits any act which is prejudicial to the interest of the society or its members, has failed to conduct the election in accordance with provisions of this Act before the expiry of the term of the Committee of Management or is otherwise not functioning properly, the Registrar after affording the Committee of Management a reasonable opportunity of being heard and obtaining the opinion of the General Body of the society in a general meeting called for the purpose in the manner prescribed may, by order in writing, supersede the Committee of Management ; 2[ Provided that where under the prescribed circumstances it is not feasible to convene a general meeting of the General Body of the society, the Registrar may dispense with the requirement of obtaining the opinion of the General Body of the society;] 4[Provided further that in the case of Central Co-operative Bank or the Uttar Pradesh co-operative bank, the suspension or supersession of the Committee of Management shall not be made by the Registrar unless the Reserve Bank of India has been consulted ; Provided also that the Committee of Management of the Primary agriculture Co-operative Credit society may be superseded by the Registrar only on any of the following grounds- (i) if a society incurs losses for three consecutive years, or (ii) if serious financial irregularities or fraud have been committed. (iii) if there are judicial directives to this effect or there is perpetual lack of the quorum : Provided also that Committee of Management of any such co-operative society shall not be superseded or kept under suspension by the Registrar, there is no Government shareholding or loan or financial assistance or any guarantee by the Government.]1 (2) Where the Registrar, while proceeding to take action under sub section (1) is of opinion that suspension of the committee of management during the period of proceedings is necessary in the interest of the society, he may suspend the committee of management which shall thereupon cease to function, and make such arrangement as he thinks proper for the management of the affairs of the society till the proceedings are completed ; Provided that if the committee of management so suspended is not superseded it shall be reinstated and the period during which it has remained suspended shall count towards its term. 5[Provided further that the proceeding under sub-section (1) shall be completed within one year with respect to a society carrying on the business of banking and within six months with respect to a society carrying on business other than banking and if it is not completed within stipulated period, the proceeding initiated under sub-section (1) shall be deemed to have dropped and the Committee of Management, if under suspension, shall stand reinstated.] 6[ (3) Where the Registrar has superseded the committee of management under sub-section (1), he may appoint in its place- (a) a new committee consisting of one or more members of the society, or (b) an administrator or committee of administrators who need not necessarily be members of the society ; Provided that if the Committee of Management is superseded under sub-section (1), the Committee of Management shall be reconstituted within three months from the date of supersession after holding the election in accordance with the provisions of this Act.]6 (4) The Registrar shall have the power to change the committee or any members thereof or the administrator or administrators appointed under clause (a) or (b) of sub-section (3) at his discretion during the period specified under that sub-section. (5) The committee, administrator or administrators appointed under sub-section (3) and (4) shall, subject to any directions which the Registrar may from time to time give, have the power to exercise all or any of the functions of the committee of management or of any officer of the society and shall be deemed for all purposes under this Act, the rules and the bye-laws of the society to be the Committee of Management. 7[(6) Before the expiry of the period specified under sub-section (3), the committee, administrator or administrators appointed under sub-section (3) and (4) shall arrange for the reconstitution of the Committee of Management in accordance with this Act, the rules and the bye-laws of the society to take over the management the co-operative society on the expiry of the said period. Provided that the committee or an administrator or administrators whose term has expired before the commencement of this proviso shall arrange for re constitution of the committee of management by ]7 [December 31, 1994 ]8 9[(7) The provisions 10[****] of section 29 shall apply in respect of re-constitution of the Committee of Management under this section.] 11[(8) The members of the superseded Committee of Management shall not be entitled to contest the election again for a period of three years from the date of supersession.] 12[35-A. (1) Without prejudice to other provisions of this Chapter, where for two successive co-operative years (including any period before the commencement of this section- (a) more than seventy percent of the total dues of any primary society, which is a credit society against its members during any co-operative year, remain unpaid at the end of such year ; or (b) the number of defaulting members exceeds seventy percent of the total number of indebted members of such society, at the end of any such year, Then, the Chairman and all members of the Committee of Management of any such society shall, upon an order coming into effect under sub -section (3), vacate their respective offices as such. (2) The provisions of sub-section (1), as they apply to a primary credit society, shall mutatis mutandis apply to a financing bank with the substitution of references to 'seventy percent' by references to 'sixty percent'. (3) In relation to any society or bank as referred to in sub-section (1) or sub-section (2), the Registrar may make such arrangement as he thinks proper for the management of the affairs of such society or bank, as the thinks fit and the provisions of sub-section (3), (4), (5) and (6) of section 35 shall mutatis mutandis apply.]

3[(1) Where, in the opinion of the Registrar, the Committee of Management of any co-operative society persistently makes default or is negligent in the performance of the duties imposed on it by this Act or the rules or the bye-laws of the society or commits any act which is prejudicial to the interest of the society or its members, has failed to conduct the election in accordance with provisions of this Act before the expiry of the term of the Committee of Management or is otherwise not functioning properly, the Registrar after affording the Committee of Management a reasonable opportunity of being heard and obtaining the opinion of the General Body of the society in a general meeting called for the purpose in the manner prescribed may, by order in writing, supersede the Committee of Management ; 2[ Provided that where under the prescribed circumstances it is not feasible to convene a general meeting of the General Body of the society, the Registrar may dispense with the requirement of obtaining the opinion of the General Body of the society;] 4[Provided further that in the case of Central Co-operative Bank or the Uttar Pradesh co-operative bank, the suspension or supersession of the Committee of Management shall not be made by the Registrar unless the Reserve Bank of India has been consulted ; Provided also that the Committee of Management of the Primary agriculture Co-operative Credit society may be superseded by the Registrar only on any of the following grounds- (i) if a society incurs losses for three consecutive years, or (ii) if serious financial irregularities or fraud have been committed. (iii) if there are judicial directives to this effect or there is perpetual lack of the quorum : Provided also that Committee of Management of any such co-operative society shall not be superseded or kept under suspension by the Registrar, there is no Government shareholding or loan or financial assistance or any guarantee by the Government.]1 (2) Where the Registrar, while proceeding to take action under sub section (1) is of opinion that suspension of the committee of management during the period of proceedings is necessary in the interest of the society, he may suspend the committee of management which shall thereupon cease to function, and make such arrangement as he thinks proper for the management of the affairs of the society till the proceedings are completed ; Provided that if the committee of management so suspended is not superseded it shall be reinstated and the period during which it has remained suspended shall count towards its term. 5[Provided further that the proceeding under sub-section (1) shall be completed within one year with respect to a society carrying on the business of banking and within six months with respect to a society carrying on business other than banking and if it is not completed within stipulated period, the proceeding initiated under sub-section (1) shall be deemed to have dropped and the Committee of Management, if under suspension, shall stand reinstated.] 6[ (3) Where the Registrar has superseded the committee of management under sub-section (1), he may appoint in its place- (a) a new committee consisting of one or more members of the society, or (b) an administrator or committee of administrators who need not necessarily be members of the society ; Provided that if the Committee of Management is superseded under sub-section (1), the Committee of Management shall be reconstituted within three months from the date of supersession after holding the election in accordance with the provisions of this Act.]6 (4) The Registrar shall have the power to change the committee or any members thereof or the administrator or administrators appointed under clause (a) or (b) of sub-section (3) at his discretion during the period specified under that sub-section. (5) The committee, administrator or administrators appointed under sub-section (3) and (4) shall, subject to any directions which the Registrar may from time to time give, have the power to exercise all or any of the functions of the committee of management or of any officer of the society and shall be deemed for all purposes under this Act, the rules and the bye-laws of the society to be the Committee of Management. 7[(6) Before the expiry of the period specified under sub-section (3), the committee, administrator or administrators appointed under sub-section (3) and (4) shall arrange for the reconstitution of the Committee of Management in accordance with this Act, the rules and the bye-laws of the society to take over the management the co-operative society on the expiry of the said period. Provided that the committee or an administrator or administrators whose term has expired before the commencement of this proviso shall arrange for re constitution of the committee of management by ]7 [December 31, 1994 ]8 9[(7) The provisions 10[****] of section 29 shall apply in respect of re-constitution of the Committee of Management under this section.] 11[(8) The members of the superseded Committee of Management shall not be entitled to contest the election again for a period of three years from the date of supersession.] 12[35-A. (1) Without prejudice to other provisions of this Chapter, where for two successive co-operative years (including any period before the commencement of this section- (a) more than seventy percent of the total dues of any primary society, which is a credit society against its members during any co-operative year, remain unpaid at the end of such year ; or (b) the number of defaulting members exceeds seventy percent of the total number of indebted members of such society, at the end of any such year, Then, the Chairman and all members of the Committee of Management of any such society shall, upon an order coming into effect under sub -section (3), vacate their respective offices as such. (2) The provisions of sub-section (1), as they apply to a primary credit society, shall mutatis mutandis apply to a financing bank with the substitution of references to 'seventy percent' by references to 'sixty percent'. (3) In relation to any society or bank as referred to in sub-section (1) or sub-section (2), the Registrar may make such arrangement as he thinks proper for the management of the affairs of such society or bank, as the thinks fit and the provisions of sub-section (3), (4), (5) and (6) of section 35 shall mutatis mutandis apply.]

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