Model Bye-laws of National level Cooperative Society/Federal Cooperative/Multi-State Cooperative Society.

 

1.                       Name and area of operation :

As per Section 2(a) of MSCS Act,2002

(i)         The society shall be called ____________________;

As per Rule 8 of MSCS Rules, 2002

(ii)               The Society shall have a principal place of business which shall be the registered office of the society.  The Headquarter of the society shall be at     __________________. (Full address). Any change in address shall be notified to the Central Registrar within 15 days of its change and also published in local newspaper and shall be made by an amendment of its bye-laws after following the procedures laid down in Sec. 11 of the Multi State Coop. Societies Act 2002. 

(iii)             The Society shall have a Common Seal.  The Common Seal shall be kept in the safe custody of the Officer authorised by the Board and shall be used on the authority of a resolution of the Board constituted under the bye-laws of the society; 

(iv)             The area of operation of the society shall extend to the  ---------- states or whole of India. 

(v)                The society is body corporate which sue and be sued in its name. 


2.            Definitions:-      As per Section 3 of MSCS Act, 2002         

The words/expressions appearing in these bye-laws shall have the following meaning unless otherwise provided :

a)                 “Act” means the Multi-State Cooperative Societies Act, 2002 as amended time to time.

b)                 “Rules” means the Multi-State Cooperative Societies Rules, 2002 made under Multi-State Cooperative Societies Act, 2002 and as amended time to time.

c)                  “Central Registrar”, means the Central Registrar of Cooperative  Societies appointed under the provisions of the MSCS Act;

d)                 “Bye-laws” means  the Bye-laws of the society for the time being in force which have been duly registered  or deemed to have been registered under the Multi State Cooperative Societies Act in force and includes amendments thereto  which have been duly registered or deemed to have been registered under the Act;

e)                 “Delegate” means a person who is duly appointed/elected by the members of the society or part thereof in accordance with its bye-laws as its representatives to the General Body of the society or a person who is duly authorised by the Board of the member society to represent the society in General body of the society of which the society is a member.

f)                    “General Body”, means all the members of the Society and in relation to a nation cooperative society or a federal cooperative means all the delegates of member cooperative societies or delegates of multi state cooperative society and includes a body constituted under the provisions of the Act; 

g)                 “Board”  means the Board of Directors of the Society. 

h)                  “General Meeting” means a meeting of the general body of the society and includes special general meeting; 

i)                    “Chief Executive” means Chief Executive/Managing Director, by whatever name he may be called, of the Society; 

j)                  ‘Officer’ means a President, Vice-President, Chairperson, Vice-chairperson, Managing Director, Secretary, Manager, Members of the Board, Treasure, Liquidator, an Administrator appointed under Sec. 123 and includes any other person empowered under Multi State Cooperative Societies Act or the rules or the Bye-laws to give direction in regard to business of the society. 

k)                    “Member” means a cooperative society/individual who is admitted as member of the society and continues to be so for the time being; 

l)               ‘Nominal’ member means a person who has been admitted as a nominal member or associate member  under the bye-law of the society. 

m)                  “Multi State Cooperative Society” means a cooperative society registered or deemed to be registered under the Multi-State Cooperative Societies Act 2002;.

n)                 “National Cooperative Society” means a Multi-State Cooperative Society specified in the second schedule to the Multi-State Cooperative Societies Act, 2002; 

o)                 “ Cooperative Society” means a cooperative society registered or deemed to be registered under any law relating to cooperative societies for the time being in-force in any State or Union Territory; 

p)                 “Federal Cooperative” means a federation of cooperative societies registered under the MSCS Act and whose membership is available only to a cooperative society or a multi-state cooperative society; 

q)                   A ‘Cooperative Bank’ means a multi state cooperative society which undertakes banking business; 

r)                  ‘Reserve Bank’ means the Reserve Bank of India constituted under the RBI Act 1934 – 2 of 1934; 

s)                    ‘Deposit Insurance Corporation’ means the Deposit Insurance & Credit Guarantee Corporation established under Sec. 3 of the Deposit Insurance Corporation Act 1961;

t)                  “Defaulter” means a member who has defaulted in payment of any kind of dues payable to the society; 

u)                  “Cooperative Year” means the period from 1st of April to 31st March;

v)                “Area of Operation” means the area from which the persons can be admitted as members of the society.

w)                  “Cooperative Principles” means the cooperative principles as specified in the first schedule of the Multi-State Cooperative Societies Act, 2002.

3.            Objects, and functions:  As per  Section 5(a) of MSCS Act, 2002                                         

a)            Objects :

The principal object of the society will be to promote the interests of all its members to attain their social and economic betterment through self-help and mutual aid in accordance with the cooperative principles.

(N.B.: The statement of objects of the society should clearly show the activities carried out / proposed to be carried out in each state from where the members are drawn.)

b)                 Functions:

In furtherance of the above objects, the society may undertake any or all the following activities :-

1

2

3

(to be specified as per the objects of the society)

 

C.    In addition to above, federal cooperative shall also undertake following functions:-

 

      Subject to the provisions of this Act and any other law for the time being in force, a federal cooperative may discharge the functions to facilitate the voluntary formation and democratic functioning of cooperative societies as federal cooperative or multi State cooperatives based on self-help and mutual aid.

            Without prejudice to the generality of the provisions contained in sub-section(1), the federal cooperative may—

 

(a)               ensure compliance of the cooperative principle; 

(b)               make model bye-laws and policies for consideration of its member cooperative; 

(c)               provide specialised training, education and data-based information; 

(d)               undertake research, evaluation and assist in preparation of perspective development plans for its member cooperative; 

(e)               promote harmonious relations amongst member cooperative; 

(f)                 help member cooperative to settle disputes among themselves; 

(g)               undertake business services on behalf of its member cooperative, if specifically required by or under the resolution of the general body or the board, or bye-laws of a member co-operative; 

(h)               provide management development services to a member cooperative; 

(i)                 evolve code of conduct for observance by a member cooperative; 

(j)                  evolve viability norms for a member cooperative; 

(k)               provide legal aid and advice to a member cooperative; 

(l)                  assist member cooperative in organising self-help; 

(m)             develop market information system, logo brand promotion, quality control and technology upgradation.

 

4.            Membership :   As per  Section 25 of MSCS Act, 2002

           

A society shall have following categories of members:-

                                i.            Ordinary members

                              ii.            Nominal/ associate members

 

Who can be ordinary members :

 

(i)                 Any person who resides within the area of operation of the society and who genuinely need the services provided by the society and whose interest does not conflict with the interest of the society;

(ii)               No person shall be admitted as a member of a multi-State co-operative society except the following namely:-

 

a)     An individual, competent to contract under section 11 of the Indian Contract Act, 1872;

b)     Any multi-State co-operative society or any co-operative society;

c)      The Central Government;

d)     A State Government;

e)     The National Co-operative Development Corporation established under the National Co-operative Development Corporation Act, 1962;

f)        Any other corporation owned or controlled by the Government

g)     Any Government company as defined in section 617 of the Companies Act, 1956;

h)      Such class or classes of persons or association of persons may be permitted by the Central Registrar having regard to the nature and activities of a multi-State co-operative society.

 

(iii)             No right of membership shall be exercisable until a person has made such payments to the Society in respect of membership or acquired such interest in the society as may be prescribed by the society in its Bye-laws as per the provisions of the Act and rules.

(iv)          Every member shall pay an admission fee as specified in the bye-laws of the society.

 

Note :   No individual person shall be eligible for admission as a member of a national co-operative society or a federal cooperative.

 

5. Nominal or Associate Member: As per Section 26 of MSCS Act,2002

Society may, in the interest of promotion of the business of the society, admit a person as nominal member or associate member on payment of fee of Rs------only.

Provided that such members will not be entitled to subscribe to the share capital of the society.

They will not be allowed to have any interest in the management of the society including right to vote, contest election as director of the board or participate in the general body meetings of the society.

   

6.            Application :   As per Rule 11(a) & Rule 11(c) of MSCS Rules,2002

The application for membership of the society shall be submitted by the applicant to the Chief Executive of the society in the prescribed form and at least ----% of the value of shares to be deposited by the applicant at the time of submission of application. 

Disposal :                                                                                                                                            As per Rule 11(b) 25(4) of MSCS Rules, 2002

The applications for membership of the society found complete in all respects shall be disposed of within the period of four months from the date of receipt of the application by the society.  The same shall be communicated to the applicant within fifteen days of the decision by Registered Post.

                                                                   

7.            A member may, with the approval of the Board of Directors, transfer its shares to another member of the multi-State cooperative society.

 

A fee of Rs.----- per share as mentioned in the Bye-laws, shall be payable to  the society for each such transfer.

 

8.            The Board may, on application, by a Member: 

(i)     approve conversion of shares allotted to it or a part thereof into those of other denominations subject to such conditions as the Board may decide to impose;

 

(ii)               consolidate all or some of the partly paid shares already allotted to member.

 

9.            Disqualifications of membership:  As per  Section 29 of MSCS Act,2002

No person shall be eligible for being or continuing as a member of the society if :-

a)           his business is in conflict or competitive with the business of the society; or 

b)           He did not make annual transactions of the value of atleast Rs. ___________ for continuously two years or (to be specified in the bye-laws); or

c)            He did not attend the three consecutive general meetings and such absence was not condoned by the 2/3rd majority of the members attending the meeting; or 

d)           Has defaulted in payment of all dues including contributions, subscriptions, if any, as decided by the board of the society from time to time. 

10.          Cessation of membership: 

The membership of the cooperative society may cease in case of :

(i)           resignation or death of the member.

(ii)         cancellation of registration of the member society;

(iii)       all the shares  are transferred to another person/ society;

(iv)        expelled by the general body;

(v)          incurring any of the disqualifications of membership. 

 

11.          Withdrawal from membership : 

Any member of the society may withdraw from membership of the society only after ------- years by giving at least a three months notice and duly approved by the Board of the society.

12.          Termination of membership : Section 30 of MSCS Act, 2002

                                                                                             

Membership of the society may be terminated by a resolution of the general body passed by 2/3rd majority present and voting if :

 

(i)               Any member has defaulted in payment of dues as per bye-laws of the society for a continuous period of one year; 

(ii)               Any activity of a member is found to be conflicting or competitive with the interest or activities of the society.

 

13.          Rights of member : As per Section 31 of  MSCS Act, 2002

Every member of the society shall have the following rights :- 

a)                One vote in the general body meetings of the society and no member shall be permitted to vote by proxy; 

Provided that a multi-State co-operative society or a co-operative society or any other institution which is a member of any other multi-state cooperative society may appoint its representative by a resolution passed by its Board to vote on its behalf in the affairs of such multi-State cooperative society. 

b)             Right to receive notice of general body meetings as per bye-laws of the society; 

c)              Right to attend and take active part in the proceedings of the committee; 

d)              Take part in elections and contest for any post as per provision of the Act, Rules and bye-laws of the society; 

e)               Inspect member registers, books of accounts or any other record and obtain certified copies of the resolutions or documents on a payment of fee as may be prescribed by the society from time to time.

14. Liability :  As per Section 16 of MSCS Act, 2002

a)                 Liability of the members shall be limited to the share capital subscribed by them; 

b)                 Liability of every member would continue for period of two years from the date of ceasing to be member of the society.

15.          Authorised Share Capital  : 

The authorised share capital of the society shall be Rs. ________which shall comprise of _______ shares of the face value of Rs. _________each.

(N.B.: Indicate details about equity holding by the Govt. of India, State Govt. or any other Govt. undertakings.)

 As per Section   35(1) and (2) of MSCS, Act, 2002

                16. The society may with approval of the General Body retire shares, if any, held by the Central/State Government, Central/ State Government organizations at any time.  However, retirement of such share shall be at face value.  (Society to clearly specify the modalities for redemption of shares). 

                                                                                                                                                                               

17.          (i) A member shall subscribe to minimum of _____number of shares ____% of share value shall be paid at the time of application and rest in _____equal  instalments. 

 

(ii)   Manner of allotment, transfer, redemption and/or repatriation shall be at face value and as per the provisions of the Act.

 

18.          Joint Shareholders

Shares may be purchased in the names of more than one person jointly.

i)                On death of a joint-holder, the surviving person/ persons shall be recognized as joint shareholder/holders

ii)             The joint-holder of any share shall be liable severally as well as jointly for all payments which are to be made in respect of such share or shares.

iii)             The person whose name stands first written on the share certificate shall enjoy all the rights of a member and be responsible for all the liabilities of a member.  He shall be entitled to receive the annual dividend and notice of the General Meeting.

iv)             Where a share of the society is held jointly by more than one person, the person whose name stands first in the share certificate, if present, shall have the right to vote.  But in his absence, the person whose name stands second and, in the absence of both, the person whose name stands next, and likewise in the absence of preceding persons the person whose name is next on the share certificate, who is present and who is not a minor, shall have right to vote.

 

19.          Share Certificate

Every person admitted as member shall be entitled to receive a share certificate gratis stating the number of share/s and their distinctive number/s.  The share certificates shall be signed by the Chairman, or any Director duly authorized and the Chief Executive Officer.  The share certificate shall bear the Society’s seal.

 

20.          Transfer of Shares

i)             A member may transfer his share or shares after holding them for not less than one year to any person duly approved by the Board of Directors.  The transfer is not complete until the name of  the transferee has been duly entered in the register of members and the transfer fee of ……….. per share is paid.

 

ii)                            If any certificate be worn out, defaced, destroyed or      lost, a new share certificate’s may be issued in lieu thereof on payment of a fee of …………… per share.  It shall, however, be necessary to produce evidence to the satisfaction of the Board of Directors that the share certificates were worn out, defaced, destroyed or lost, or in absence of such evidence, on such indemnity as the Board of Directors may deem sufficient. 

21.          Nomination

A member may nominate a person to receive the member’s interest in the society after his death.  Nomination shall be made in the prescribed form and entered in the special register kept at the society’s registered office.  Prior approval of the Board shall be necessary if the person to be nominated is an employee of the society. 

22.          Death of a Shareholder

On death of a shareholder, the society may pay to the person or persons nominated a sum representing the value of the shareholder’s interest in the society within six months from the death of the shareholder.  In the absence of nomination, the society may pay to such person or persons as may appear to the Board of Directors to be entitled to receive the same as heir or legal representative of the deceased shareholder on his or their executing an appropriate deed of indemnity in favour of the society. 

 

23.          Lien on Shares, Dividends and Deposits

The society shall have the first and paramount lien or charge upon all the shares, dividends and deposits of any member of past member for all moneys due from him to the society from time to time.  The society may at any time set off any sum credited by or payable to the member or past member towards payment of any liability of such member as past-member.                  

 

24.          Capital and Funds :                                                        Section 67 of MSCS Act,2002

The society may receive funds from any or all the following sources :

(i)                 admission fee;

(ii)               share capital;

(iii)             loans and deposits;

(iv)              grants-in-aid;

(v)                donations;

(vi)              contributions;

(vii)            subscriptions;

(viii)          profit.

 

25.      MAXIMUM BORROWING LIMIT: Section 67 of  MSCS Act,2002

            The multi-State cooperative society shall be eligible to receive deposits and loans from members and other upto ------- times of its paid up share capital plus accumulated reserves minus any losses.

 

26.          General Body :  Section 38 of MSCS Act,2002

The General Body of a multi-State Cooperative Society shall consist of all the members of such society.  The society shall consists of : 

(i)                 individual members;

Section 32 of  MSCS  Act,2002

(iii)             Each member-society shall be represented by one delegate elected/nominated to the general body as specified in the Bye-laws of the society;                          

 

NOTE : No individual can become member of a National  Cooperative Society.

 

Smaller General Body (if applicable): As per Section 38 of MSCS Act,2002 :

(A Multi State Cooperative Society with a membership exceeding 1000, may provide in its Bye-laws for the constitution of a smaller body consisting of   delegates of members of the society elected or selected in accordance with such Bye-laws).

 

Such smaller general body may be constituted with delegates elected or selected from among the member-societies on the basis to be elaborated in the Bye-laws of a multi State cooperative society.

 

That smaller body shall exercise such powers of the general body as may be specified in the Bye-laws of the multi-State Cooperative Society
Section 38(3) of MSCS Act,2002

Such delegate of the society shall be the Chairman/President or the Chief Executive of the society or a member of the Board of such cooperative society if such member is authorised by the Board of the nominating society. Where there is no Board, such society shall be represented through its administrator by whatever name called;

 

The delegates shall continue to be members of the General Body of the society for a period of 5 years or till their successors are elected or as specified in the nomination by the concerned member society. 

 

The procedure for election/selection of delegates on the General Body shall be in accordance with the election/selection regulations framed by the Board of Directors in accordance with the provisions of the Act & Rules framed thereunder.
 

The delegate of a member society which has not been a member of the society for atleast 30 days before the date of General Body Meeting may attend the General Body Meeting but shall not be eligible either to exercise the right to vote, participate in the election or to contest election for any post;
 

Delegates from defaulting member societies shall not be entitled to exercise the right to vote or to seek election to any office. The delegates of defaulting society, if holding any office of the society shall forfeit their right to hold such office w.e.f. the date on which the society becomes defaulter under these bye-laws provided, due notice has been given to the defaulting society and it has failed to pay its dues within 30 days after the receipt of notice.

 

27.          Annual General Meeting : As per Section 39 of  MSCS Act,2002

The final authority of the society shall vest in the General Body.
 

The Board of the society under a resolution shall within six months after the close of the corresponding year call the annual general meeting at the principal place of business of the society for the purpose of :

 

a)                 Consideration of the audited statement of accounts; 

b)                 Consideration of the audit report and annual report; 

c)                  Consideration of audit compliance report; 

d)                 Disposal of net profits; 

e)                 Approval for appointment of Auditors & fixation of remuneration; 

f)                    Review of operational deficit, if any; 

g)                 Creation of specific reserves and other funds; 

h)                  Approval of the annual budget; 

i)                    Review of actual utilisation of reserve and other funds; 

j)                    Creation of specific reserves and other funds; 

k)                  Approval of the long-term perspective plan and the annual operational plan; 

l)                    Review of annual report and accounts of subsidiary institution, if any;

m)               Expulsion of members; 

n)                  List of employees who are relatives of members of the board or of the chief Executive; 

o)                 Amendment of bye-laws, if any; 

p)                 Formulation of code of conduct for the members of the board and officers; 

q)                 Election & removal of  members of the board, if any; 

r)                   Consider the statement showing details of loans or goods on credit if any given to any director or to the spouse of the director or his/her son or daughter during the preceding year or outstanding against any of them; 

s)                  Any other matter laid before it by the Board of Directors.

 

28.          Amendment to Bye-laws: Section 11(2) of MSCS Act,2002

The amendment of these bye-laws shall only be passed by a resolution of the meeting of the general body in which a quorum is present by a vote of not less than two thirds of the members present thereat and not less than 15 clear days’ notice for the considering of such amendment has been previously given.

29.          Special General Meeting : Section 40 of  MSCS Act,2002

Chief Executive may, at any time, on the direction of the Board shall call a special general meeting of the society as per provisions of the Act/Rules.

30.          Notice for the General Meetings and Special General Meetings: As per Rule 15 of  MSCS Rules,2002

a)                 Annual General Meeting of the society may be called by giving not less than 14 days notice in writing to all the members of the society

As per Rule 15(2) of  MSCS Rules,2002

b)                 Special General Meeting of the society may be called by giving not less than 7 days notice in writing to all the members of the society;

             As per Rule 15(5) of  MSCS Rules,2002

c)                  The notice of the Annual General Meeting shall be accompanied by a copy of each of the audited balance-sheet, profit and loss account together with the auditors report relating to the preceding year and the report of the Board of Directors thereon.


31.          Quorum of the meeting :   As per Rule 16 of  MSCS Rules,2002

(i)                 The quorum for the general meeting shall be one fifth of the total number of delegates of the general body; 

(ii)               No business shall be transacted at any general meeting unless there is a quorum at the time when the business of the meeting is due to commence; 

(iii)             If within half an hour from the time appointed for the meeting, quorum is not present, the meeting shall stand adjourned and would be held after half an hour at which the quorum will not be required.  

(iv)              If at any time during the meeting sufficient number of members are not present to form the quorum, the Chairman or the member presiding over the meeting on his own, or on his attention being drawn to this fact, shall adjourn the meeting and the business that remains to be transacted at this meeting, if any, shall be disposed off in the usual manner at the adjourned meeting; 

(v)                Where a meeting is adjourned under sub-clause (iii) or (iv) the adjourned meeting shall be held either on the same day or on such date, time and place as may be decided by the Chairman or the member presiding over the meeting; 

(vi)            No business shall be transacted at any adjourned meeting other than the business on the agenda of the adjourned meeting; 

(vii)            The adjourned meeting will transact its regular business even without the quorum being present at the meeting. 

32.          Board of Directors: As per Section 41 of  MSCS Act,2002

The Board of Directors of the society shall be  ------(not more than 21) excluding functional directors and co-opted directors’ 

(i)                 Directors to be elected by the General Body (number as may be specified in the Bye-laws; 

(ii)               Nominated Directors (number as may be specified in the Bye-laws); 

(iii)             Chief Executive and Functional Directors shall be the ex-officio member of the Board of Directors; 

(iv)            Two eminent persons may be co-opted by the Board of Directors;

As per Section 50(3) of  MSCS Act,2002

(v)                Two subject matter specialists may be invited by the Board in any of its meetings;

As per Section 48 of  MSCS Act,2002

(vi)             Nominees of the Central Government, if any, as per the provisions of the Act.

 

(The number of the Government Nominees shall be as per the equity share capital held by the Central Government in the multi-State cooperative society  i.e. one person  if the  equity  share capital is  less than 26% ,  two persons  if the equity share capital is 26%  or more  but less than 51%;  and  three persons  if  the equity share capital is 51%   or more of the total issued share capital)

 

Provided that such nominated persons shall not exceed one third of the total number of members of the Board.

 

 Where the Central Government or a State Government has guaranteed the repayment of principal and payment of interest on debentures issued by a multi-State cooperative society or has guaranteed the repayment of principal and payment of interest on loans and advances to a multi-State cooperative society or has given any assistance by way of grants or otherwise to a multi-State cooperative society, the Central Government or the State Governments in this behalf, as the case may be,  or any person authorised by the Central Government, shall have the right to nominate person on the Board of such a society in the manner as may be prescribed.

 

                   A person nominated under this section shall hold office during the pleasure of the Government by which he has been so nominated.

 

33.          Meetings of the Board of Directors: As per Section 50(2) of  MSCS Act,2002

(i)                 The Board of Directors shall meet at least once in every quarter; 

(ii)               The meetings of the Board of Directors shall normally be held at the registered office of the society. In exceptional cases, the meetings of the board may be held at any other place as decided by the Board;

  As per Section 50(3) of  MSCS Act,2002

(iii)             The meetings of the Board of Directors shall be presided over by the Chairman or in his absence by the Vice Chairman and in the absence of both Chairman & Vice-Chairman, the Directors present in the Meeting shall elect a Chairman for the Meeting from among themselves;  

(iv)            14 days notice shall ordinarily be necessary for the meeting of the Board of Directors; 

(v)               The quorum for the meeting of the Board of Directors shall be 1/3rd of its total strength or as specified in the Bye-laws of the multi-State cooperative society. 

34.          Term of the Board of Directors: As per Section 45(5) of MSCS Act,2002

             The term of the office of the elected Members of the Board of Directors shall be  -----years  from the date of election (not more than 5 years).

The term of office of the members of the Board who are nominees of the Government or institutions or federations shall be as indicated from time to time by the Government or the concerned Institutions.  However, their term will be co-terminus with the term of the elected Directors/Board; and the Government/concerned institutions shall make fresh nominations for the new Board;

              The elected members of the Board shall be eligible for re-election.

 

35.          Powers & Functions of the Board of Directors : As per Section 49 of  MSCS Act,2002

(i)                 To admit members; 

(ii)               To elect Chairman and Vice-Chairman/Chairmen of the society; 

(iii)             To authorise convening of Meetings of the General Body; 

(iv)            To interpret the organisational objectives and set-up specific goals to be achieved towards these objectives;

(v)               To make periodic appraisal of objectives; 

(vi)             To appoint, suspend or remove the Chief Executive and such other employee of the society as may be prescribed; 

(vii)            To make provisions for regulating the appointment of the society and the scales of pay, allowances and other conditions of service, including explanatory action against such employees; 

(viii)          To place the annual report, annual financial statements, annual plan and budget for the approval of the general body;  

(ix)              To consider audit and compliance report and place the same before the general body; 

(x)                To acquire or dispose off immovable property; 

(xi)              To review the membership in other cooperatives; 

(xii)            To approve annual and supplementary budget; 

(xiii)          To recommend to the General Body distribution of profits; 

(xiv)          To raise funds; 

(xv)            To sanction loans to the members; 

(xvi)          To fill any vacancy/vacancies in the Board by election

(xvii)        To approve the panel of auditors for placing in the General Body; 

(xviii)      To appoint such Committees, Sub-Committees or Standing Committees as may be necessary and delegate to them such powers as may be appropriate; 

(xix)          To frame regulations for the election of delegates to the General Body, Members to the Board of Directors and for the conduct of Meetings of the General Body and the Board of Directors as per the provisions of the Act; 

(xx)            To take such other measures or to do such other acts as may be prescribed or required under this act or the bye-laws or as may be delegated by the general body. 

36.          Committee : As per Section 53 of  MSCS Act,2002

The Board of Directors shall constitute an Executive Committee and other committees or sub-committees as may be considered necessary. 

37.          Executive Committee 

Composition & Functions of the Executive Committee or other committee or sub-committee may be specified in the Bye-laws of the Society.

              As per Section 53 of  MSCS Act,2002                                                                                         

Provided that other committees or sub-committees, other than the Executive Committee shall not exceed 3 at a given point of time.

38.          Chairman and Vice-Chairman

 

There shall be a Chairman and a Vice-Chairman/Chairmen elected by the Board of Directors from among themselves.  The Chairman and in his absence, the Vice-Chairman shall preside over the Meeting of the General Body and the Board of Directors.

 

The terms of office of the Chairman and Vice-Chairman shall be co-terminus with the term of the elected Members of the Board unless Chairman or Vice-Chairman/Chairmen ceases to be a Director earlier.  In case of any vacancy within this period, the Board shall fill up the vacancy through re-election for the unexpired term of the Board.

 

39.          Powers and functions of the Chairman : 

The Chairman shall have the following powers and functions: 

(i)                 He shall preside over the meeting of the general body, Board of Directors and executive committee; 

(ii)               The Chairman shall sign the proceedings of all the meetings presided over by him; 

(iii)             In the event of equality of votes on a resolution the Chairman shall have an additional casting vote in the meeting; 

(iv)            To convene the meeting of the Board of Directors, Executive Committee and other committees of which he is the Chairman; 

(v)              The Chairman may delegate any of his powers and functions to the Vice-Chairman; 

40.          Functional Directors: As per Section 41(3)& 51 of  MSCS Act,2002  

The Society shall have a Chief Executive (and other Functional Directors).  They shall be appointed by the Board and will be whole time employees of the Society and Members of the Board.

 

41.          Chief Executive: As per Section 51 of  MSCS Act,2002  

The Managing Director shall be the Chief Executive of the  Society and shall be appointed by the Board and shall aid and assist the Board of Directors in its functions.  He shall be member of all the committees, sub-committees and sub-groups of the Board of Directors as may be constituted.

42.          Powers and functions of the Managing Director : As per Section 52 of  MSCS Act,2002

Subject to overall control and general supervision of the Board of Directors, the Managing Director shall have the following powers, functions and responsibilities:

(i)                 To assist the Board of Directors in the formulation of policies, objectives and planning; 

(ii)               To implement the policies and plans duly approved by the General Body or the Board and furnish to the Board of Directors periodical information necessary for appraising the activities and progress of achievement towards implementations of the policies and programmes; 

(iii)             To summon meetings of various committees including the general body under the instructions of the Chairman; 

(iv)             To maintain proper records of the society; 

(v)              To manage the funds of the society, cause proper accounts to be maintained and audited; 

(vi)            To attend to all correspondence of the society; 

(vii)            To be responsible for collection and safety of the funds; 

(viii)          To execute the policies/programmes and business of the society and take such action as is necessary to give effect to the resolutions of the general body, Board of Directors or any other committee constituted under bye-laws; 

(ix)              To sign all deposit receipts of the society with banks in accordance with the resolution of the executive committee; 

(x)                To endorse and transfer promissory notes and other securities and to endorse, sign, encash cheques and negotiate instruments on behalf of the society; 

(xi)              To be the office of the society to sue or to be sued on behalf of the society and sign all books and arrangements in favour of the society; 

(xii)            To appoint such personnel in the society as may be approved by the Board of Directors; 

(xiii)          To determine powers, functions and responsibilities of the employees of the society of all categories; 

(xiv)          To maintain a list of members correct and up-to-date; 

(xv)            To exercise administrative control in respect of all officers and staff, including granting of leave, granting of annual increments and other matters relating to the service conditions of the employees; 

(xvi)          To delegate powers to other officers of the society; 

(xvii)        To sanction contingent expenditure in so far as the amount involved is upto Rs. __________; 

(xviii)      To sign on behalf of the society and conduct its correspondence; 

(xix)          To present the draft annual report and financial statements for the approval of the Board; 

(xx)            To record proceedings of meeting and have duly signed; 

(xxi)        To perform all duties entrusted to him and to exercise such other powers as may be delegated to him by the Board of Directors, executive committee and Chairman from time to time. 

                                                                   

                                                                   

43.          Deposits:  As per Sec.20,87 & 88 of MSCS Act, 2002

i)             Deposits may be received from Members at any time within the limits determined under the Cooperative Societies Act and Rules, on such rates of interest and subject to such rules and regulations as may be fixed by the Board of Directors and also subject to the directives issued by the Reserve Bank of India in this behalf from time to time.

ii)            Deposits may be received on current, savings, fixed, recurring, cumulative and under any other special scheme/s.

iii)           All the deposits of the bank shall be insured under DICGC Act 1961 and shall be governed by the various sections of the DICGC Act.

44.          Loans and Advances:

1)            Loans, cash credits and/or overdrafts on current accounts bay be granted to members on securities mentioned below or other security or securities approved by the Board of Directors or without security.

i)        Personal security and/or surety/sureties of other member/members. 

ii)    Collateral security of movable and immovable property. 

iii)   Industrial, mercantile, agricultural and other marketable commodities or machinery under pledge, hypothecation or charge of the Bank. 

iv)   Pledge of government, trustee securities, shares of approved companies, debentures and fixed deposits 

v)    Insurance policies assigned to the Bank within the surrender value. 

vi)   Warehouse receipts

     vii)     Gold and silver ornaments

   viii)      Any other tangible security 

     ix)      The Board may frame detailed loan regulations prescribing proportion of unsecured loans to total loans and advances, proper terms and conditions and the nature of securities acceptable for loans and advances for different purposes.

 

2)            Short-term loans will be for periods up to 15 months, medium-term loans for 15 months to 5 years and long-term loans over 5 years.

45.          Linking of Shareholding with Loan Limits

a)            A borrower should hold at least 5 per cent of his borrowings if such borrowings are on an unsecured basis, i.e. in the form of clean overdrafts, loans against one or two personal sureties and purchase/discount of clean bills and cheques.

b)            A borrower against tangible securities should hold shares of the bank to the extent of at least 2 ½ per cent of his borrowings from the Bank.

c)            In the case of loans for small-scale industrial units, the linking of share capital might be fixed initially at one per cent of the borrowings, to be raised in the course of the next two years to 2 ½ percent.  The total amount of share capital held by a member will, however, have to be within the limits laid down under the Cooperative Societies Act. 

46.          Distribution of profit :As per Section 63 of  MSCS Act,2002

Subject to the provisions of the Act and Rules framed thereunder, the net profits of a multi-State cooperative society shall be distributed by the General Body as follows: 

 

(i)                 transfer at least 25% of net profit to the reserve fund; 

(ii)               credit one per cent of its net profit to the cooperative education fund maintained by the National Cooperative Union of India; 

(iii)             The undistributed profits shall be added to the Reserve Fund.  However, an amount of at least 10% shall be transferred to the reserve fund for meeting unforeseen losses.

47.          Utilisation of Net Profit : As per Section 63(2) of  MSCS Act,2002

The balance of the net profit may be utilised for all or any of the following purposes :-

a)                 payment of dividend to members on their paid up capital at the rate as specified in the Bye-laws;

b)                 any other privileges to  members; if any; as specified in the Bye-laws;

c)                  contribution to the education fund at the rate of 5% or more and not exceeding 10%.  The fund may be utilised for the education and training of members, directors and employees as approved by the Board of Directors;

d)                 Donation for the development of the cooperative movement or charitable purpose as defined in section 2 of the Charitable Endowment Act 1890 not exceeding 5%.

e)                 Payment of ex-gratia amount to employees as approved by the Board of Directors;

 

However such payment shall be paid only out of net profit and in no case the capital or the reserve shall be distributed as dividend.

48.          Investment of funds : As per Section 64 of  MSCS Act, 2002

The society may invest or deposit its funds in :-

a)                 a cooperative bank including cooperative land development bank;

b)                 securities specified in section 20 of the Indian Trust Act 1882;

c)                  Shares and securities of any other cooperative society/subsidiary institutions;

d)                 Any other bank;


49.          Reserve Fund

i)             In addition to the sum prescribed under the Co-operative Societies Act and Bye-laws , all admission fees, entrance fees, nominal membership fees, amount of forfeited shares and dividends and donations shall be carried to the Reserve Fund.

ii)            Any loss occurring as the net result of the year’s working may with the previous sanction of the Registrar, be made good from the Reserve Fund or from the profits of the next ensuing year or years.

iii)           The Reserve Fund shall be separately invested in government and trustee securities or other approved securities or in fixed deposits with the District Central Co-operative Bank or the State Co-operative Bank.

 

50.          Dividend :

i)             The dividend declared shall be paid to the person whose name stands as the registered shareholder in the books of the Society on the last day of the co-operative year to which the dividend relates.

ii)            Dividend shall be proportionate to the amount paid on shares and the period in whole months for which the amount stood to the credit of the shareholder.

iii)           Any dividend remaining undrawn for three years after having been declared shall be forfeited and shall be carried to the Reserve Fund of the society.

Unpaid dividend shall be payable on application provided the same has not been forfeited.

  51.        Accounts and Records

Accounts and records shall be maintained in forms prescribed or approved by the Registrar and the Reserve Bank of India with such additions as the Board of Directors consider necessary.  Any member of the Bank may inspect any of the registers or records during office hours in so far as they relate to his own business transaction.

                As per Sec.70(1),(2),(9) & Sec.28 of Act/Rules

52.          Audit                                                                                                    

 

i)             The accounts of the society shall be audited by an auditor appointed from the panel of auditors approved by the Central Registrar or from a panel of auditors, if any, prepared by the society at least once in each year and the remuneration of auditors shall be fixed by the Central Registrar or the society as the case may be.

ii)            Audit Committee (applicable in case of cooperative banks):

Each multi state coop. bank shall constitute audit committee of their boards to look into implementation of guidelines issued by RBI from time to time in this regard.                                             


As per Sec.84 of Act & 31 of Rules

53.          Settlement of Disputes

All the disputes shall be referred to Arbitration in accordance with the provisions of the Multi State Cooperative Societies Act and Rules.

As per Sec. 85 of MSCS Act

54.          Limitations

The limitation period in disputes shall be as per the provisions of the Act. 

55.          MISCELLANEOUS

No act of the General Body or the Board of Directors shall be deemed invalid by reason of any defect in the election of a Member thereof or by reason of any vacancy therein not having been filled in;

                Service Rules : 

             As per Section 49(2)(e) of  MSCS Act,2002

The society shall have service rules for regulating the service conditions of its employees as formulated and amended by the Board from time to time.

As per Section 69 & Rule 26(1) of  MSCS Act/ Rules

The Society shall maintain a Contributory Provident Fund for the benefit of its employees in accordance with the provisions of Employees Provident Fund and Miscellaneous Provisions Act, 1952.

 

Model Bye Laws for Delhi Cooperative Societies Act
THE BYE-LAWS OF COOPERATIVE THRIFT & CREDIT SOCIETY LTD.
I. PRELIMINARY

1. The name of the Society is the............Cooperative Thrift & Credit Society Ltd..................and its registered address is...................
2. In these bye-laws unless there is anything repugnant to the subject or context, the expression "the Act" means The Delhi Cooperative Societies Act, 2003 and its words and expression defined in the act and used in these bye-laws shall have the same meaning as assigned to them in the said Act and the "Rules". "The Rules" means The Delhi Cooperative Societies Rules 2007.


II. OBJECTS

3. The objects of the Society are to promote the economic, social and cultural interest of members and more particularly:

  1. The creation of funds to be lent to its members;
  2. To undertake thrift and credit business by mobilizing deposits from members and loans from financing institution.
  3. To own lands, buildings, or take them on lease or rent for the business of the society.
  4. To undertake welfare activities particularly for the members and employees for the promotion of their moral educational and physical improvements;
  5. To undertake other means designed to encourage in the members the spirit and practice of thrift, self-help and mutual help;
  6. To do all such things as are incidental and conducive to the attainment of the above objects.

III. MEMBERSHIP


4. The members shall consist of:

  1. The persons joining in the application for registration;
  2. Persons admitted in accordance with these bye-laws;
  3. Nominal or Associate members subject to conditions as laid down in rules.

5. No person shall be member unless:

  1. His written application of membership has been approved by the Managing Committee;
  2. He is competent to contract under Section 2 of the Indian Contract Act 1872
  3. He is not a member of any primary society dispensing credit with limited or unlimited liability
  4. The Society may admit joint members provided they make a declaration in writing that the person whose name stands first in the share certificate shall have the right to vote and all the liabilities will be borne jointly and severally by them as provided in the Act, Rules and Bye-Laws;
  5. In accordance with the procedure laid down in the bye-laws and the rules for admission of any member, the society may admit minors and persons of unsound mind inheriting share or interest of deceased members as its members through legal representative or guardian respectively. The members so admitted will enjoy such rights and liabilities as are laid down in these bye-laws and which are consistent with the Act and Rules;
  6. He has carried out the provisions of bye-law II.
  7. Every member on admission shall pay Rs....... as admission fee which shall not be refunded in any case;
  8. When a person's application for membership has been accepted by the Managing Committee and he has paid his admission fee and share money, he shall be deemed to have acquired all the rights, incurred all the obligations as laid down in the Act and Rules made there under and these bye-laws.

6. Admission of members:

  1. Promoter members are exempted from the provisions of Bye-Laws 5 (b)
  2. The Society shall not admit members within 30 days prior to the meeting of the General Body.

7. Expulsion of Members: A member of the society may be expelled by a 3/4th majority of the Managing Committee members present at the Managing Committee Meeting.

  1. If he makes default in the payment of his installment of loan
  2. If he has applied to be adjudicated as insolvent or is an undischarged insolvent.
  3. If he has been sentenced for any offence other than an offence of a political character or an offence involving moral turpitude and dishonesty; or
  4. If he undertakes any profession similar to the objects of the society; or
  5. If he intentionally does any act likely to injure the credit of the society or fails to observe proper discipline in regards to work of the society.
  6. For any action which may be held by the Managing Committee to be dishonest or contrary to the stated objects of the society or to the interest of cooperatives.
  7. Incurs any of the disqualifications as contained in the rules
  8. Provided that an opportunity shall be given to the member before expulsion from membership to represent his case to the Managing Committee and expulsion shall not be effective unless it is approved by the registrar.

8. Cessation of Membership: A person ceases to be a member:-

  1. On death; or
  2. For lack of confirmation of membership as per bye-law 5; or
  3. When his resignation is accepted by the Managing Committee; or
  4. On expulsion under bye-law 7; or
  5. Ceasing to hold the minimum number of shares prescribed in these bye-laws; or
  6. On withdrawal after one month's notice in writing to the Secretary, provided that the member withdrawing does not owe anything to the society;

9. Transfer of Shares:

  1. A member or the nominee or successor of an ex-member may transfer his share to another member or applicant qualified under bye-law 5 and approved by the committee or to share transfer fund created by the society out of its profit and shall, then be paid the value of his share, less any sum due from him to the society.
  2. Shares may, however, be returned in case of death, dismissal, transfer and retirement of a member, provided he is not indebted to the society and is not surety to unpaid loan;
  3. The value of the shares to be paid shall in no case be more than the same received by the society in payment thereof;
  4. A member on withdrawal whether voluntarily or through the action of the society, shall subject, however, to the rules of the society, have no claim on the reserve fund or on any other funds or property of the society of any kind.

IV. CAPITAL

10. The capital shall be composed of:

  1. An undetermined number of shares of the value of Rs. 100 each.
  2. Deposits from members; and loans from financing institutions.
  3. Donations and Grants;
  4. Other funds created out of profit;
  5. Realized profits.

Provided that the acceptance of deposits from non-members shall be subject to the prior approval of the Registrar.


V. SHARES


11. Every member shall purchase at least one share and no member shall hold shares 1/10 of the total shares capita actually subscribed. If any member by inheritance or otherwise becomes possessed, of more than the maximum holding permitted by the Act/Rule, Managing Committee shall have the power to sell the excess number or buy them on behalf of the society and to hold the proceed at his disposal.
12. Shares shall not be withdrawn, repaid or transferred otherwise than provided in bye-law 9.
13. Every members may nominate a person or persons to whom on death, share shall be transferred but no member may nominate more than one person, unless he holds more an one share and in any case unless the amount to be paid to such nominees whether by way of whole shares, or by fixed proportion of the amount available for transfer , as the case may be, is duly specified when the nominee is appointed and he shall attest the nomination by putting his signature or thumb impression in the register of members. If not admitted to membership, the nominee or nominees shall be paid the value of the shares or interest subject to the provisions of the bye-law 9. If any deduction to be made from the shares of the deceased and there is more than one nominee, the amount to be deducted shall be set off against the amount due to each nominee in proportion to their interest.
14. The society shall have the right to set-off any money due to a member or past member or person claiming through member or payment of any sum which he owes to the society, or for which he stands surety.

VI. LIABILITY

16. The liability of the members for any deficit in the assets of the Society on liquidation shall be limited to .....time the face value of their paid up shares.

VII. GENERAL MEETING


17. The first general meeting of the members shall have the same powers as are here given to the Annual Meeting.
18. Preliminary General Meeting:

a) The preliminary General Meeting shall be called within a period of not less than one month and not more than three months from the date of its registration. In this meeting the following business shall be discussed and decided :-

    1. Approval of allotment of shares, amounts collected and amount spent in connection with the registration of the society:
    2. Election of Members of the Managing Committee.
    3. Programme of activities and the ensuing year.

b) The society shall within a period of 180 days next after the date fixed for making its account for the year under the rules for the time being in force, call a general meeting of its members for the purpose of:

    1. Approval of the activities of the Society prepared by the Committee for the ensuing year.
    2. Election of the Committee other than nominated members subject to the provisions of Section 35 (1).
    3. Consideration of the audit report;
    4. Disposal of the net profit;
    5. Consideration of any other matter which may be brought forward in accordance with the bye-laws.

Provided further that if such meeting is not called by the society within 180 days of the closing of accounts the registrar, or any person authorized by him may call such meeting in the manner prescribed and that meeting shall be deemed to be a general meeting duly called by the society and the registrar may order that the expenditure incurred in calling such a meeting shall be paid out of the funds of the society or by such person or persons who, in the opinion of the registrar, were responsible for the refusal or failure to convene the general meeting.

c) If within an hour of the time appointed for the meeting a quorum is not present, the meeting shall stand adjourned for half an hour to the same day and place but if the meeting is called upon the requisition of members (not the Registrar) it shall stand dissolved, provided that in the adjourned meeting no quorum shall be necessary. This should be clearly specified in the agenda notice issued to the members.

d) The presence of the 1/3rd of the total number of the members subsisting as such on the date of notice of the meeting subject to a minimum of 10 members shall be necessary for the disposal of any business at General Meeting. Each member shall have one vote irrespective of the shares held by him. The president shall have a casting vote in addition. No proxy shall be allowed and no member shall be allowed to vote if a decree or award has been passed against him or he is a defaulter as defined in the Act.

e) The President or the Vice President or in their absence one of the other members elected for the purpose shall preside.

19. Duties and Powers of the General Meeting:

a) To elect, suspend or remove members of the Managing Committee including a President and a Vice-President;
b) To receive from the Committee a report of the preceding year's working of the society together with a statement showing the receipts and expenditure, assets & liabilities and profit & loss for the year;
c) To consider audit note/inspection note of the registrar or financing institution and any other communication from the registrar;
d) To dispose of profit in accordance with the Act, Rules and bye-laws;
e) To lay down for the guidance of the Managing Committee general policy for the various activities to be undertaken by the Society.
f) To determine the nature and extent of the welfare activities to be undertaken by the Society.
g) To fix the maximum credit limit of each member on the basis of his shares.
h) To fix subject to the approval of the General Body maximum borrowing limit of the Society;
i) To amend bye-laws subject to the approval of the registrar.
j) To consider any other business brought forward for which the Managing Committee is not authorized or is unable to transact.


20. Proceeding Register: All business discussed at a General Meeting shall be recorded in a proceedings book which shall be signed by the Chairman of the Meeting.
21. Amendment of bye laws shall only be carried out by a majority of not less than 2/3rd of the members present in the general meeting in which due notice of the intention to discuss such amendments has been previously given. Such amendments shall be forwarded to the Registrar for registration within a period of 30 days from the date of meeting. All other questions before the general meeting shall be decided by a majority of votes.
22.

a) If it appears to the Registrar that an amendment of a bye-law of a Cooperative Society is necessary or desirable in the interest of such Cooperative Society, he may call upon the Cooperative Society to make the amendment;
b) The Registrar may by serving a notice inform or call upon a society to make an amendment within a period not exceeding 60 days;
c) After the expiry of the period specified in the notice under the sub-rule (2) and if, the Society fails to make the amendment, the Registrar after giving the Cooperative Society an opportunity of being heard, may register the amendment and issue to the cooperative society a copy of such amendment certified by him with a certificate signed by him. With effect from the date of registration, the amendment is binding on the Cooperative Society and its members subject to appeal, if any;
d) All amendments of the bye-laws relating to the same Cooperative Society when registered by the registrar shall be assigned a consecutive number in chronological order and shall be noted the Registrar shall be assigned a consecutive number in chronological order and shall be noted in index to the bye-laws to be maintained by Cooperative Society in the Registration file.

VIII.MANAGING COMMITTEE


23.

a) The Managing Committee shall consist of at least 5 members of the Society and not more than 15 over the age of 21 years including a President and one Vice-President. Two seats shall be reserved for women members of the Society as per the Act. The President or Vice-President or in their absence one of other members of the Committee shall have one vote but the President shall have a casting vote, in addition years;
b) The Managing Committee member shall be elected and hold office for three years and shall be eligible for re-election. Office bearers shall not be eligible to hold such office on a committee of another Cooperative Society of the same types or on the committees of more than three different types of the Society;
c) The Election of the Managing Committee shall be held by Secret Ballot in the manner given in Schedule II of the Delhi Cooperative Society Rules.
d) The meeting of the Committee shall be held when necessary and shall be called by the Secretary or President on receipt of a requisition from I/3rd members of the Managing Committee whichever is more or from the Registrar, Cooperative Societies or any person authorized by him. The Managing Committee shall cause minutes of all proceedings of its meetings to be entered in the book maintained for the purpose in handwritten at the spot in the presence of members present and voting. The minutes of each meeting shall contain the names of the members, if any, dissenting from or not concurring with any resolution. At the end of the minutes, each member present and voting shall sign them or proceeding shall be signed by the President and shall be circulated to the Managing Committee members for confirmation. The quorum of the Managing Committee is 5 days and in case of emergent meeting, the notice period is 24 hours provided the notice is served on all the members.
e) The meeting shall be held as often as required but a meeting shall be held at least once in every month.


24. Cessation of Office: A member of the Committee shall cease to hold office if he/she:

a) Ceases to be a member of the Society
b) Applies for insolvency or is a declared insolvent.
c) Becomes of unsound mind; or
d) Is convicted of any offence involving dishonesty or moral turpitude.
e) Lends money on his own account;
f) Carries on business on his own account similar to that as specified in bye-law no.3
g) Resigns and his resignation is accepted by the committee;
h) Fails without showing satisfactory reason to the Committee to attend three consecutive committee meeting; or
i) Defaults in the payment of loan and other dues of the society.
j) Hold any office of profits under the Society.

25. The Committee shall exercise all the powers of the Society except those reserved for the General Meeting subject to any regulation or restrictions laid down by the Society in a general meeting or in these bye-laws and in particular shall have the following powers and duties:

i. To observe in all their transactions the Act, the Notified Rules and these Bye-laws.
ii. To maintain true and accurate account of all money received, expended and bought or sold;
iii. To keep register of members correct and up to date;
iv. To keep true account of assets and liabilities of the Society;
v. To prepare and lay before the General Meeting the Annual Profit and loss Account Audited Balance Sheet.
vi. To examine the accounts, sanction contingent and other expenditure and supervise the maintenance of the registers;
vii. To consider the inspection notes of the registrar or any other person authorized by the registrar to inspect, or of financing institution to take necessary action;
viii. To enroll new members and to issue new and transfer old shares.
ix. To arrange for the loan installments recovery;
x. To summon General Meeting in accordance with the bye-laws.
xi. To contract loans subject to any restrictions imposed by the Registrar or the General Meeting;
xii. To decide the terms and period for which loans are to be given and to approve or reject the security, to arrange for the recovery of loans as laid down by the General Meeting and to sanction, renew loan when necessary;
xiii. To decide the terms and periods at which deposits are to be received and to arrange for the payments of such deposits;
xiv. To watch that the loans are applied for the approved purposes for which they were advanced;
xv. To assist the inspection of the books by any person authorized by the Registrar;
xvi. To appoint, suspend, punish and dismiss employees;
xvii. Through any member or employee of the Society or any other person specially authorized to institute, conduct, defend, compromise, refer to arbitration or abandon legal proceedings by or against the Society or Committee or the officers or employees concerning the affairs of the Society.
xviii. To acquire on behalf of the Society shares in other registered Cooperative Societies.
xix. To arrange for the custody of books and to appoint one of its members or one of the officer of the society, residing, in the area of operation , to take charge of all the registers and papers prescribed in these bye-laws;
xx. To invest the funds of Society in accordance with Sec 56 of the Delhi Cooperative Societies Act and Rules;
xxi. To acquire and hold property and to enter into contracts on behalf of the Society.
xxii. To fix the maximum credit limit for each member in accordance with the instruction of the Registrar subject to the approval of the General Meeting. This limit will be fixed only when a member has a declaration giving the amount of his debts secured and unsecured. The proposal for maximum credit limits of member of the committee shall be brought before the general meeting in a separate detailed resolution and shall not be included in the proposal for maximum credit limit of other members;
xxiii. To fix the terms and conditions of services of their employee and to make recruitment.
xxiv. To appoint a treasurer to keep the money of the Society and require him to give such security as it may deemed sufficient;
xxv. To elect Secretary from amongst of the Managing Committee and entrust him with such duties as deemed necessary;
xxvi. To distribute the duties between the Secretary and the Manager, if necessary;
xxvii. To arrange for the safe custody of the property of the Society, to maintain in good state of affairs and where necessary to arrange for its insurance;
xxviii. To co-opt members against the vacancy caused by the resignation or disqualification of any member of the Managing Committee.
xxix. To carry on the business of the Society.
In conduct of the affairs of the Society, the Committee shall exercise the prudence and diligence of ordinary men of business and shall be responsible for any loss sustained through the acts contrary to the Act, the Notified Rules and these Bye-laws.
No member of committee shall receive any remuneration for his work as a member of the Committee. No member of the Committee shall vote in any application for loan in which he himself is interested as a borrower, nor shall he stand surety for a loan to another member of the Committee.

26. Recording of Committee Proceedings: All business discussed or decided at a meeting of the Committee shall be recorded in a proceedings book which shall be signed by the Chairman of the Meeting and all members of the Committee present.

27. Possession of records of Society:

1.The committee of the Society shall specify which of the officer of the Society shall:

a) Keep the books of account
b) Keep other books and registers; and
c) Prepare returns and statement.
Provided that a person charged with the keeping of accounts shall not be the in charge of cash.


2. If the Committee of a cooperative society has not specified the officer required to be specified in sub-rule (I) not withstanding anything contained in the bye-laws of the Society, the following officers shall be responsible for keeping accounts, records etc. indicated against each namely;
Treasurer: He shall keep or cause to be kept all the books of account and vouchers and shall prepare or cause to be prepared Annual Profit & Loss Account, Receipt and Disbursement Account and the Balance Sheet. Whosoever may be writing these books of accounts, it shall always be deemed to be in this custody, possession, power and control. He shall be responsible for their safe delivery to his successor after making a list of documents handed and taken over.
Secretary: He shall keep or cause to be kept all other records of the Society and shall be responsible for preparation and submission of various returns to the Registrar. Whosoever may be keeping these records, these shall always be deemed to be in custody, possession, power and control. He shall be responsible for making over the charge of this record to his successor under proper charge to be signed by the relieved officers.

Cash: Cash balance in hand shall always remain in the hands of the treasurers or any other officer appointed by the Managing Committee.

28. Every Cooperative Society shall from time to time determine at a meeting of the committee, the minimum members of paid staff required for its business. The Committee shall prescribe their qualifications, experience and the emoluments. The Committee shall be competent to appoint, dismiss or remove any paid staff.


IX.REGISTERS


29. The following registers and papers shall be maintained and shall be open for the inspection by anyone interested in the funds, except that no one shall be allowed to see the deposit account of any person, without that person's consent in writing:
a) A register of members, showing the name, address and occupation of every member, the number of shares held by him, the date of admission to membership, date of termination of membership and the nominee appointed under bye-law 17;
b) A Cash Book showing the income, expenditure and balance on each day on which a business is done;
c) A ledger account for each member, depositor, and creditor, miscellaneous and contingent income and expenditure;
d) A register showing
e) An account of showing the monthly installments of shares and deposits;
f) A Register showing the monthly installments for payments of loans;
g) A minute book;
h) A book of bonds for all loans issued;
i) A share allotment register;
j) Register of application for membership containing the name and address of the applicants, the date of receipt of application, the number of shares applied for and in case of refusal, the date of communication of the decision refusing admission to the applicant; and
k) Any other register prescribed by the Registrar;
l) A pass book for each member and depositor;
m) A surety register.

30. Copies of the bye-laws and the balance-sheet shall be supplied free on demand to any member. The last balance sheet shall be open to public inspection during office hours.
31. The Committee shall appoint one of its members or one of its members or one of the Officers of the Society to take hold and keep in safe custody all the registers prescribed in bye-law 29 and other papers in use of the society.

X. LOANS


32. a) Loans may be granted to a member for necessary purpose but preference shall be given to a loan for productive purposes. No loans shall be granted for extravagant or speculating purposes. No loan shall be advanced to a member who is in arrear of is loan installment or is a persistent defaulter. Applications for loan shall be submitted to the Secretary stating the purpose for which the loan is required and they shall be dealt with by the Committee at its discretion. The Committee is not bound to give any reason for rejecting the loan application.
b) The Borrower shall execute a bond and shall furnish sureties as laid down in bye-laws or decided by the Managing Committee.
33. The Committee may at its discretion grant to any member a loan not exceeding Rs........... or 10 times the value of the paid-up shares, whichever is less and shall take surety in each case. The limit is further subject to any general and special restriction or conditions imposed by the General Body of the Society from time to time.
34. Loan shall be repaid by each member in installments which may be fixed by the Committee up to a maximum of..................The Committee may suspend repayments of any installment for a certain period of time at its discretion on sufficient cause being shown and may thereby extend the time of total payment but the period should not be exceeding 6 months.
35. A member's commitment as surety shall not exceed
an additional amount equal to his maximum borrowing limit. The limit to which a member can stand as surety in accordance with this bye-law may exceed at the discretion of the Committee in case where collateral security is also taken.
36. All documents creating a charge or obligation on the Society shall be signed by the President, the Secretary and Treasurer. Provided that in case of receipts for deposits and repayments of loans, the President or Secretary and Treasurer may sign. All important documents of the Society shall be sealed with Society's seal. This seal shall be kept in the custody of the Secretary.
37. Audit: The Accounts of the Society shall be audited at least once a year by an auditor appointed by the Society from the approved panel of C.A's notified by the registrar. The Society shall pay such audit fee as may from time to time fixed by the Registrar, Cooperatives Societies, Delhi.
38. First Charge: The following shall be the first charge on profits:
i) Contribution to Audit Fee as may be fixed from time to time by the Registrar;
ii) Any losses undergone by the Society;
iii) Necessary deduction for depreciation of machinery, building etc.;
iv) All insurance charges;
v) All payments of Salaries, Provident Fund, Working Expenses;
vi) Interest on deposits etc.
The balance shall be the net profits of the society.

XI. RESERVE FUND


39. Not less than 25% of the net profits shall

Model Bye-Laws for Bihar Self-Supporting Cooperative Societies Act, 1996

1. Name and Area of Operation :


i. The society shall be called .................Cooperative Credit Society Ltd.
ii. The society shall have a principal place of business, which shall be registered office of the society. The head quarter of the society shall be at.............
iii. The Society shall have a Common seal.
iv. The area of operation of the Society shall extend to the whole of the State of Bihar.
v. The society is body corporate, which can sue and be sued in its name.

2. Definitions:
i. "Act" means the Bihar Self-Supporting Cooperative Societies Act, 1996 as amended from time to time.
ii. "Registrar" means the Registrar of Self-Supporting Cooperative Societies appointed under Section 8 of the Bihar Self-Supporting Cooperative Societies Act, 1996 and includes any other person on whom all of or any of the powers of the Registrar under the Act are conferred.
iii. "Bye-Laws" mean the bye-laws of the society for the time being in force, which have been duly registered or deemed to have been registered under the Self-Supporting Cooperative Societies Act in force, and includes amendments thereto which have been duly registered or deemed to have been registered under the Act.
iv. "Delegate" means a person who is duly appointed/elected by the members of the society or part thereof in accordance with its bye-laws as its representatives to the General Body of the society or a person who is duly authorized by the Board of member society to represent the society in general body of the Society of which the Society is a member.
v. "General Body" means all the members of the Society or delegates of a cooperative society and includes a body constituted under the provisions of the Act.
vi. "Board" means the board of directors of the Society.
vii. "General Meeting" means a meeting of the general body of the society
viii. "Chief Executive" means Managing Director of the Society.
ix. "Person" means an adult individual proprietary concern, partnership firm duly registered under the Indian Partnership Act 1932, company, or any other body corporate constituted under the law for the time being in force, society registered under the Societies Registration Act of 1860. State Government and Public Trust registered under any law for the time being in force for registration of such trusts subject to amendment in the Act.
x. "Officer" means a Chairperson, Vice-chairperson, Managing Director, Secretary, Manager, Members of the Board, Treasurer
xi. "Member" means a cooperative society/individual who is admitted as member of the society and continues to be so for the time being.
xii. "Cooperative Society" means a cooperative society registered or deemed to be registered under any law relating to cooperative societies for the time being in-force in any State or Union Territory.
xiii. "Defaulter" means a member who has defaulted in payment of any kind of dues payable to the society.
xiv. "Cooperative Year" means the period from 1st of April to 31st March
xv. "Area of Operation" means the area from which the persons can be admitted as members of the society.
xvi. "Cooperative Principles" means the cooperative principles as specified in the Chapter II (Sec 3) of the Bihar Self-Supporting Cooperative Societies Act, 1996.

3. Objects and functions: The principal object of the society will be to promote the interests of all its members to attain their social and economic betterment through self-help and mutual aid in accordance with the cooperative principles.

A. Objects:

i. To promote economic and social betterment of its members through mutual co-operation and in accordance with the co-operative principles as described in the Section 3 of the Act.
ii. To encourage and provide facilities for thrift, self-help and co-operation amongst the members.
iii. To create funds to be lent out to, or invested for its members, or for their benefit subject always to the provisions of the Act.
iv. To facilitate the operations of, and to co-operate with, other co-operative societies.
v. To encourage and enable members for savings and to keep their such savings and other funds with the Society as recurring, demand or term deposits without any charge or condition for payment of dividends, interest or opportunity cost thereon.
vi. To give loans and advances to members and levy service charges thereon subject to the mode and period of repayments, method of computation of the service charges, nature and type of security and other rules and regulations framed for the purpose by the Board of Directors of the Society. No interest, as such, shall be levied on such loans and advances to members.
vii. To procure and purchase items in the nature of personal requirements, educational needs, domestic consumption, business and professional use and provide these on hire, or supply on outright cash down basis, installment basis or hire-purchase basis, earning profit in the process in favour of the Society.

viii. To provide financial and other services to the members at nominal service charges.

ix. To promote one or more subsidiary institution, which may be registered under any law for the time being in force, for the furtherance of the objects of the Society.

x. To do such other things incidental or conducive to all or any of the above mentioned {sections 5(a) to 5(i)} objects.

B. Functions: In furtherance of the above objects, the society may undertake any or all the following activities:

i. Creating awareness about Co-operative Principles and increasing membership base of the Society.
ii. Encouraging savings by the members and ensuring deposits in different funds of the society.
iii. Establishing and promoting self-help groups among deprived and marginalized section of the society.
iv. Lending to members under different schemes.
v. Procuring and purchasing items required by members and providing the same to them by adding profit margins.
vi. Providing financial and other services to members.
vii. Other functions incidental to and in consonance with the objects as decided by board from time to time.

3. Cooperative Principles.-
(a) membership of the Society shall be voluntary available without restriction of any social, political, racial or religious discrimination, of all persons who can make use of its services and are willing to accept the responsibilities of membership;
(b) affairs of the Society shall be administered by persons elected or appointed in a manner agreed to by the members and accountable to them, Members of the Society shall enjoy equal rights of voting (one member one vote) and participation in decisions affecting the Cooperative Societies of which they are members;
(c) the economic results, arising out of the operations of the Society belong to the members of the Society and shall distributed in such a manner as would avoid on member gaining at the expense of others, which shall be achieved-
(i) By provision for development of the business of the Society,
(ii) By provision of common services, or
(iii) By distribution among the members in proportion to their transactions with the Society;
(d) The Society shall make provision for the education of their members, office-bearers and employees and of the general public, in the principles and techniques of Cooperative, both economic and democratic;
(e) The Society in interest of its members and its communities, shall actively cooperate in every practical way with other cooperatives at local, national and international levels having as therein the achievement of unity of action by cooperators throughout the world.

4. Membership: The society shall have following categories of members:
A. Ordinary Members
B. Nominal / Associate Members

A. Ordinary Members:

i. Any person who resides within the area of operation of the society and who genuinely need the services provided by the society and whose interest does not conflict with the interest of the society.
ii. No person shall be admitted as a member of a multi-State co-operative society except the following namely:
a. An individual, competent to contract under section 11 of the Indian Contract Act, 1872.
b. Any other co-operative society.
c. The Central Government.
d. A State Government.
e. The National Co-operative Development Corporation established under the National Co-operative Development Corporation Act, 1962.
f. Any other corporation owned or controlled by the Government.
g. Any Government company as defined in section 617 of the Companies Act, 1956.
h. Such class or classes of persons or association of persons as may be permitted by the registrar.
iii. No person shall be admitted as a member of the Society unless:
a. He has applied in the form prescribed for the purpose of the Society.
b. The Board of the Society approves his application.
c. He has purchased the minimum number of shares and paid the value thereof in full along with the entrance fee of Rs.......
d. He has fulfilled all other conditions laid down in the Act.
e. He has attained the age of 18 years in the case of an individual.
f. He has not been adjudged by a competent court to be an insolvent or an undischarged person.
g. He has not been sentenced for any offence, other than offence of a political character or an offence not involving moral turpitude and dishonesty and a period of five years has elapsed from the date of expiry of the sentence

B. Nominal or Associate Member

i. Society may, in the interest of promotion of the business of the society, admit a person as nominal member or associate member on payment of fee of Rs........ only.
ii. Provided that such members shall not be entitled to subscribe to the share capital of the society.
iii. They will not be allowed to have any interest in the management of the society including right to vote, contest election as director of the board or participate in the general body meetings of the society.
5. Application: The application for membership of the society shall be submitted by the applicant to the Chief Executive of the society in the prescribed form along with 100 % of the value of shares to be deposited by the applicant at the time of submission of application.

6. Disposal: The applications for membership of the society found complete in all respects shall be disposed of within the period of 30 days from the date of receipt of the application by the society. The same shall be communicated to the applicant within 30 days of the decision. If no decision is communicated within 30 days from the date of receipt of application then the person shall be deemed to be registered as the member of the Society.

7. Disqualifications of membership: No person shall be eligible for being or continuing as a member of the society if:

i. His business is in conflict or competitive with the business of the society; or
ii. He did not attend the three consecutive general meetings and such absence was not condoned by the 2/3rd majority of the members attending the meeting; or
iii. Has defaulted in payment of all dues including contributions, subscriptions, if any, as decided by the board of the society from time to time.

8. Cessation of membership: The membership of the cooperative society may cease in case of:

i. Resignation or death of the member.
ii. Cancellation of registration of the member society.
iii. All the shares are transferred to another person/ society.
iv. Expulsion by the general body.
v. Incurring any of the disqualifications of membership.
vi. Permanent insanity or other legal disability.

9. Withdrawal from membership

i. Any member of the society may withdraw from membership of the society only after three years by giving at least a three months notice and duly approved by the Board of the society.
ii. However the total refund of the share capital in any cooperative year shall not exceed ten percent of the paid up share capital of the society on the last day of the cooperative year.

10. Termination of membership
Membership of the society may be terminated by a resolution of the general body passed by 2/3rd majority present and voting if:

i. Any member has defaulted in payment of dues as per bye-laws of the society for a continuous period of one year.
ii. Any activity of a member is found to be conflicting or competitive with the interest or activities of the society.

11. Rights of member: Every member of the society shall have the following rights:

i. At least one vote in the general body meetings of the society and no member shall be permitted to vote by proxy.
ii. Provided that a multi-State co-operative society or a co-operative society or any other institution, which is a member of any other multi-state cooperative society, may appoint its representative by a resolution passed by its Board to vote on its behalf in the affairs of such multi-State cooperative society.
iii. Right to receive notice of general body meetings as per bye-laws of the society.
iv. Right to attend and take active part in the proceedings of the committee.
v. Take part in elections and contest for any post as per provision of the Act, Rules and bye-laws of the society.
vi. Inspect member registers, books of accounts or any other record and obtain certified copies of the resolutions or documents on a payment of fee as may be prescribed by the Board of the society from time to time.

12. Liability

i. Liability of the members shall be limited to the share capital subscribed by them.
ii. Liability of every member would continue for period of two years from the date of ceasing to be member of the society.

13. Minimum performance of members:

Each member of the Society shall contribute to regular thrift deposits at least once in a month and shall not default any other sum to the Society beyond 180 days during the year.

14. Share Capital:

i. The authorised share capital of the society shall be Rs........which shall comprise of....... shares of the face value of Rs.....each.
ii. A member shall subscribe to minimum of .... shares of share value shall be paid at the time of application itself along with entrance fees of Rs.../-.
iii. Manner of allotment, transfer, redemption and/or repatriation shall be at face value and as per the provisions of the Act.

15. Restriction on holding of equity:
No member of the Society shall, at anytime, hold more than one-tenth of the paid up equity capital.

16. Joint Shareholders:

i. Shares may be purchased in the names of more than one person jointly.
ii. On death of a joint-holder, the surviving person/ persons shall be recognized as joint shareholder/holders
iii. The joint-holder of any share shall be liable severally as well as jointly for all payments, which are to be made in respect of such share or shares.
iv. The person whose name stands first written on the share certificate shall enjoy all the rights of a member and be responsible for all the liabilities of a member. He shall be entitled to receive the annual dividend and notice of the General Meeting.
v. Where a share of the society is held jointly by more than one person, the person whose name stands first in the share certificate, if present, shall have the right to vote. But in his absence, the person whose name stands second and, in the absence of both, the person whose name stands next, and likewise in the absence of preceding persons the person whose name is next on the share certificate, who is present and who is not a minor shall have right to vote.

17. Share Certificate:
Every person admitted, as member shall be entitled to receive a share certificate gratis stating the number of share/s and their distinctive number/s. The Chairperson, or any Director duly authorized and the Chief Executive Officer shall sign the share certificates. The share certificate shall bear the Society's seal.

18. Transfer of Shares

i. A member may transfer his share or shares after holding them for not less than one year to any person duly approved by the Board of Directors. The transfer is not complete until the name of the transferee has been duly entered in the register of members and the transfer fee of Rs..../- per share is paid.
ii. If any certificate were worn out, defaced, destroyed or lost, a new share certificates may be issued in lieu thereof on payment of a fee of Rs. .../- per share. It shall, however, be necessary to produce evidence to the satisfaction of the Board of Directors that the share certificates were worn out, defaced, destroyed or lost, or in absence of such evidence, on such indemnity as the Board of Directors may deem sufficient.

19. Nomination:
A member may nominate a person to receive the member's interest in the society after his death. Nomination shall be made in the prescribed form and entered in the special register kept at the society's registered office. Prior approval of the Board shall be necessary if the person to be nominated is an employee of the society.

20. Death of a Shareholder:
On death of a shareholder, the society may pay to the person or persons nominated a sum representing the value of the shareholder's interest in the society within six months from the death of the shareholder. In the absence of nomination, the society may pay to such person or persons as may appear to the Board of Directors to be entitled to receive the same as heir or legal representative of the deceased shareholder on his or their executing an appropriate deed of indemnity in favour of the society.

21. Lien on Shares, Dividends and Deposits:
The society shall have the first and paramount lien or charge upon all the shares, dividends and deposits of any member of past member for all moneys due from him to the society from time to time. The society may at any time set off any sum credited by or payable to the member or past member towards payment of any liability of such member as past-member.
22. Capital and Funds:
The society may receive funds from any or all the following sources:
i. Admission fee
ii. Share capital
iii. Deposits from members
iv. Loans
v. Grants-in-aid
vi. Donations and gifts
vii. Contributions
viii. Subscriptions;
ix. Profit

23. Borrowing Limit:
Deposits and loans raised by Society from external sources, however, shall at no time exceed ten times the sum of member funds and organizational reserves less accumulated deficit, if any.
The Society may accept funds/guarantees from the government of other financing institution for the fulfillment of its objectives on such terms and conditions as are mutually contracted, upon and such conditions may include the right of the government or other financier to nominate one expert on the board.
24. General Body :
The General Body of the society shall consist of all the members.
In the case of membership exceeding 1000 the General Body in any of its annual general meeting may decide by a majority vote in favour of constitution of a smaller General Body comprising delegates elected or selected from among the members on the basis elaborated in that decision of the General Body. That smaller body shall exercise all powers and functions of the general body.

25. Annual General Meeting:

i. The final authority of the society shall vest in the General Body.
ii. The Board of the society under a resolution shall within six months after the close of the corresponding year call the annual general meeting for the purpose of:
(a) Consideration of the audited statement of accounts.

(b) Consideration of the audit report and annual report.

(c) Consideration of audit compliance report.

(d) Disposal of net profits.

(e) Approval for appointment of Auditors & fixation of remuneration.

(f) Review of operational deficit, if any.

(g) Creation of specific reserves and other funds.

(h) Approval of the annual budget.

(i) Review of actual utilisation of reserve and other funds.

(j) Approval of the long-term perspective plan and the annual operational plan.

(k) Review of annual report and accounts of subsidiary institution, if any.

(l) Expulsion of members.

(m) List of employees who are relatives of members of the board or of the chief Executive.

(n) Amendment of bye-laws, if any.

(o) Formulation of code of conduct for the members of the board and officers.

(p) Election & removal of members of the board, if any.

(q) Consider the statement showing details of loans or goods on credit if any given to any director or to the spouse of the director or his/her son or daughter during the preceding year or outstanding against any of them.

(r) Any other matter lay before it by the Board of Directors.

26. Notice for the General Meeting:
i. Annual General Meeting of the society may be called by giving not less than 15 days notice in writing to all the members of the society.
ii. The notice of the Annual General Meeting shall be accompanied by a copy of each of the audited balance sheet, profit and loss account together with the auditors report relating to the preceding year and the report of the Board of Directors thereon.

27. Special General Meeting:

Chief Executive may, at any time, on the direction of the Board shall call a special general meeting, within one month after receipt of a requisition in from one tenth of the total number of members of the society as per Section 30 of the Act. Special General Meeting of the society may be called by giving not less than 7 days notice in writing to all the members of the society.

28. Amendment to Bye-laws:

The amendment of these bye-laws shall only be passed by a resolution of the meeting of the general body in which a quorum is present by a vote of not less than two thirds of the members present thereat and not less than 20 clear days' notice for the considering of such amendment has been previously given.

29. Quorum of the meeting

i. The quorum for the general meeting shall be one tenth of the total number of delegates or 100; whichever is less, of the general body.
ii. No business shall be transacted at any general meeting unless there is a quorum at the time when the business of the meeting is due to commence.
iii. If within half an hour from the time appointed for the meeting, quorum is not present, the meeting shall stand adjourned and would be held after half an hour at which the quorum will not be required.
iv. If at any time during the meeting sufficient number of members are not present to form the quorum, the Chairperson or the member presiding over the meeting on his own, or on his attention being drawn to this fact, shall adjourn the meeting and the business that remains to be transacted at this meeting, if any, shall be disposed off in the usual manner at the adjourned meeting.
v. Where a meeting is adjourned under sub-clause (iii) or (iv) the adjourned meeting shall be held either on the same day or on such date, time and place as may be decided by the Chairperson or the member presiding over the meeting.
vi. No business shall be transacted at any adjourned meeting other than the business on the agenda of the adjourned meeting.
vii. The adjourned meeting will transact its regular business even without the quorum being present at the meeting.

30. Board of Directors:
The Board of Directors of the society shall be 21 excluding co-opted directors'.
i. Directors to be elected by the General Body shall be 20 Chief Executive shall be the ex-officio member of the Board of Directors;
ii. Two eminent persons may be co-opted by the Board of Directors.

31. Meetings of the Board of Directors

i. The Board of Directors shall meet at least once in every quarter.
ii. The meetings of the Board of Directors shall normally be held at the registered office of the society. In exceptional cases, the meetings of the board may be held at any other place as decided by the Board.
iii. The meetings of the Board of Directors shall be presided over by the Chairperson or in his absence by the Vice Chairperson and in the absence of both Chairperson & Vice-Chairperson; the Directors present in the Meeting shall elect a Chairperson for the Meeting from among themselves.
iv. 15 days notice shall ordinarily be necessary for the meeting of the Board of Directors
The quorum for the meeting of the Board of Directors shall be 1/3rd of its total strength.

32. Term of the Board of Directors The term of the office of the elected Members of the Board of Directors shall be 5 years. The elected members of the Board shall be eligible for re-election.

33. Powers & Functions of the Board of Directors:

i. To admit members;

ii. To elect Chairperson and Vice-Chairperson of the society;

iii. To authorize convening of Meetings of the General Body;

iv. To interpret the organizational objectives and set-up specific goals to be achieved towards these objectives;

v. To make periodic appraisal of objectives;

vi. To appoint, suspend or remove the Chief Executive and such other employee of the society as may be prescribed.

vii. To make provisions for regulating the appointment of the society and the scales of pay, allowances and other conditions of service, including explanatory action against such employees.

viii. To place the annual report, annual financial statements, annual plan and budget for the approval of the general body.

ix. To consider audit and compliance report and place the same before the general body;

x. To acquire or dispose off immovable property;

xi. To review the membership in other cooperatives;

xii. To approve annual and supplementary budget;

xiii. To recommend to the General Body distribution of profits;

xiv. To raise funds.

xv. To sanction loans to the members;

xvi. To approve the panel of auditors for placing in the General Body;

xvii. To appoint such Committees, Sub-Committees or Standing Committees as may be necessary and delegate to them such powers as may be appropriate.

xviii. To frame regulations for the election of delegates to the General Body, Members to the Board of Directors and for the conduct of Meetings of the General Body and the Board of Directors as per the provisions of the Act

xix. To take such other measures or to do such other acts as may be prescribed or required under this act or the bye-laws or as may be delegated by the general body.

34. Manner of voting at Board Meeting :

All the resolutions which are put to vote at the Board Meeting shall be decided by a majority of the Directors present and voting. In the event of an equality of votes, the Chairperson of the meeting shall have casting vote.

35. Removal of elected members:

An elected member of the Board, who has acted adversely to the interest of the society may be removed from the Board upon a resolution of the General Body passed, after giving the member concerned a reasonable opportunity of making a representation in the matter, at its meeting by a majority of not less than two third of the members present and voting at the meeting.

36. Chairpersons and Vice-Chairperson:

i. There shall be a Chairperson and a Vice-Chairperson elected by the Board of Directors from among them. The Chairperson and in his absence, the Vice-Chairperson shall preside over the Meeting of the General Body and the Board of Directors.
ii. The terms of office of the Chairperson and Vice-Chairperson shall be co-terminus with the term of the elected Members of the Board unless Chairperson or Vice-Chairperson/Chairmen ceases to be a Director earlier. In case of any vacancy within this period, the Board shall fill up the vacancy through re-election for the unexpired term of the Board.

37. Powers and Functions of Chairperson: The Chairperson shall have the following powers and functions:

i. He shall preside over the meeting of the general body and Board of Directors.
ii. The Chairperson shall sign the proceedings of all the meetings presided over by him.
iii. In the event of equality of votes on a resolution the Chairperson shall have an additional casting vote in the meeting.
iv. To convene the meeting of the Board of Directors, Executive Committee and other committees of which he is the Chairperson.
v. The Chairperson may delegate any of his powers and functions to the Vice-Chairperson.
vi. The Chairperson may take decisions as of an urgent and emergent nature affecting the policy of the society on behalf of the Board of Directors, Executive Committee or any other committees. The matter will be placed before the next meeting of the concerned committee for ratification.
38. Chief Executive:
The Society shall have a Chief Executive, appointed by the Board who shall be a whole time paid employee and Member of the Board.
i. Managing Director: The Managing Director shall be the Chief Executive of the Society and shall aid and assist the Board of Directors in its functions. He shall be member of all the committees, sub- committees and sub- groups of the Board of Directors as may be constituted.
ii. Powers and functions of the Managing Director: Subject to overall control and general supervision of the Board of Directors, the Managing Director shall have the following powers, functions and responsibilities:

a. To assist the Board of Directors in the formulation of policies, objectives and planning.
b. To implement the policies and plans duly approved by the General Body or the Board and furnish to the Board of Directors periodical information necessary for appraising the activities and progress of achievement towards implementations of the policies and programmes.
c. To summon meetings of various committees including the general body under the instructions of the Chairperson.
d. To maintain proper records of the society.
e. To manage the funds of the society, cause proper accounts to be maintained and audited.
f. To attend to all correspondence of the society.
g. To be responsible for collection and safety of the funds.
h. To execute the policies/programmes and business of the society and take such action as is necessary to give effect to the resolutions of the general body, Board of Directors or any other committee constituted under bye-laws.
i. To sign all deposit receipts of the society with banks in accordance with the resolution of the executive committee.
j. To endorse and transfer promissory notes and other securities and to endorse, sign, encash cheques and negotiate instruments on behalf of the society.
k. To be the office of the society to sue or to be sued on behalf of the society and sign all books and arrangements in favour of the society.
l. To appoint such personnel in the society as may be approved by the Board of Directors.
m. To determine powers, functions and responsibilities of the employees of the society of all categories.
n. To maintain a list of members correct and up-to-date.
o. To exercise administrative control in respect of all officers and staff, including granting of leave, granting of annual increments and other matters relating to the service conditions of the employees.
p. To delegate powers to other officers of the society.
q. To sanction contingent expenditure in so far as the amount involved is upto Rs. 10,000/-.
r. To sign on behalf of the society and conduct its correspondence.
s. To present the draft annual report and financial statements for the approval of the Board.
t. To record proceedings of meeting and have duly signed.
u. To perform all duties entrusted to him and to exercise such other powers as may be delegated to him by the Board of Directors, executive committee and Chairperson from time to time.

39. Deposits:
i. Deposits and loans may be raised without any liability for payment of interest or other charges for such period and under such conditions as may be decided and up to such an amount as may be determined by the Board of Directors provided that the total deposits and borrowings shall not exceed ten times the sum of the paid up share capital plus the total reserves created and accumulated minus any losses.
ii. Deposits may be received at any time within the limits determined under the Act , without interest or opportunity cost and subject to such rules and regulations as may be fixed by the Board of Directors and also subject to the directives issued by any statutory body in this behalf from time to time, if applicable to a credit society.

40. Loans and Advances

A. Loans, cash credits and/or overdrafts on current accounts may be granted to members on security or securities mentioned below or other security or securities approved by the Board of Directors or without security.
i. Personal security and/or surety/sureties of other member/members. Ii.
ii. Collateral security of movable and immovable property.
iii. Industrial, mercantile, agricultural and other marketable commodities or machinery under pledge, hypothecation or charge of the Cooperative Society.
iv. Pledge of government, trustee securities, shares of approved companies, debentures and fixed deposits
v. Insurance policies assigned to the Society within the surrender value.
vi. Warehouse receipts
vii. Gold and silver ornaments
viii. Any other tangible security
B. The Board may frame detailed loan regulations prescribing proportion of unsecured loans to total loans and advances, proper terms and conditions and the nature of securities acceptable for loans and advances for different purposes.
C. Short-term loans will be for periods up to 12 months, medium-term loans for 12 months to 3 years and long-term loans over 3 years.
D. The Society shall not make a loan:
i. To a member on the security of his share or on the security bond of ii. a non-member.
E. Loans and advances shall be granted to members only. Service charges may be levied on such loans and advances and that such charges shall no time exceed the cost of actual servicing of loans and advances estimated periodically at such regular interval as is deemed proper by the Board of Directors.
F. The Board of Directors shall frame detailed rules and regulations prescribing the procedure for sanction of loans and advances, margins to be maintained, proportion of unsecured loans, proper terms and conditions and nature and extent of different securities.

G. Repayment period of the loan shall be limited to five years.

H. The limit up to which loans and advances may be granted and the nature and value of the movable and immovable property required to be mortgaged shall be in accordance with and as prescribed in the rules framed by the Board of Directors. Such mortgaged property shall be fully insured against all sort of risk.

41. Distribution of profit: Subject to the provisions of the Act, the General Body shall distribute the net profits of the society as follows:
i. Transfer at least ....% of net profit to the reserve fund.
ii. The undistributed profits shall be added to the Reserve Fund. However, an amount of at least ....% shall be transferred to the reserve fund for meeting unforeseen losses.

42. Utilization of Net Profit:
The balance of the net profit may be utilized for all or any of the following purposes:

i. Payment of dividend to members on their paid up capital not exceeding ... per cent per annum of the paid up share capital of the society
ii. Any privileges to members as decided by the Board of Directors.
iii. Contribution to the education fund at the rate of ..% or more and not exceeding ...%. The fund may be utilized for the education and training of members, directors and employees as approved by the Board of Directors.
43. Investment of funds: The society may invest or deposit its funds in:

i. A cooperative society including cooperative land development society.
ii. Securities specified in section 20 of the Indian Trust Act 1882.
iii. Shares and securities of any other cooperative society/subsidiary institutions.
iv. Any other scheduled bank

44. Reserve Fund:
i. In addition to the sum prescribed under the Act and Bye-laws, amount of forfeited shares and dividends shall be carried to the Reserve Fund.
ii. Any loss occurring as the net result of the year's working may with the previous sanction of the Registrar, be made good from the Reserve Fund or from the profits of the next ensuing year or years.
45. Dividend:

i. The dividend declared should be paid to the person whose name stands as the registered shareholder in the books of the Society on the last day of the co-operative year to which the dividend relates.
ii. Dividend shall be proportionate to the amount paid on shares and the period in whole months for which the amount stood to the credit of the shareholder.
iii. Any dividend remaining undrawn for three years after having been declared shall be forfeited and shall be carried to the Reserve Fund of the society.
iv. Unpaid dividend shall be payable on application provided the same has not been forfeited.

46. Accounts and Records:
Accounts and records shall be maintained in forms prescribed or approved by the Registrar with such additions, as the Board of Directors consider necessary. Any member of the Society may inspect any of the registers or records during office hours in so far as they relate to his own business transaction.
47. Audit:
The accounts of the society shall be audited by an auditor appointed from the panel of auditors approved by the Registrar or from a panel of auditors, if any, prepared by the society at least once in each year and the remuneration of auditors shall be fixed by the Registrar or the society as the case may be.
48. Settlement of Disputes:
All the disputes shall be referred to Arbitration in accordance with the provisions of the Act.
49. Limitations:
The limitation period in disputes shall be as per the provisions of the Act.
50. Miscellaneous

i. No act of the General Body or the Board of Directors shall be deemed invalid by reason of any defect in the election of a Member thereof or by reason of any vacancy therein not having been filled in.
ii. The Society shall establish a contributory provident fund for the benefits of its employees subject to the provisions of the Employees Provident Fund and Miscellaneous Provisions Act, 1952, at the stage of having such number or class of employees as prescribed by the said Act.
51. General: All matters not specifically provided for, are to be decided in accordance with the Act.

Model Bye Laws for Multi State Cooperative Societies Act, 2002

Model Bye-Laws for Madhya Pradesh Swayatta Sahkari Adhiniyam