|THE CO-OPERATIVE SOCIETIES ACT, 1925
(Sind Act VII of 1925)
C O N T E N T S
1. Short title.
4. The Registrar.
4-A. Power of Registrar to issue search warrant.
5. Societies which may be registered.
6. Restrictions on interest of member of society with limited liability and a share capital.
7. Conditions of registration.
7-A. Eligibility for membership.
8. Power of Registrar to decide certain questions.
9. Application for registration.
11. Evidence of registration.
12. Annual general meeting.
13. Special general meeting.
14. Change of name: its effect.
15. Amalgamation and division of societies.
15-A. Merger of a society in a company, etc.
16. Amendment of the by-laws of a society.
16-A. Powers of the Registrar to amend bye-laws.
Rights and Liabilities of Members
17. No rights of membership to be exercised till due payments are made.
17-A. Special provisions for membership of resource societies.
17-B. Expulsion of a member.
18. Votes of members.
18-A. General body and managing committee.
18-B. Disqualification for being , and for voting at an election of Director, Manager or other officer of the society.
19. Restrictions on transfer of share or interest.
Duties of Societies
20. Address of societies.
21. Copy of Act etc., to be open to inspection.
22-A. Power of Registrar to exercise powers under section 50-A in the course of an audit.
22-B. Internal audit committee.
Privileges of Societies
23. Societies to be bodies corporate.
24. Prior claim of society.
25. Charge and set-off in respect of shares or interest of member.
26. Shares or interest not liable to attachment.
27. Transfer of interest on death of member.
28. Liability of past member.
29. Liability of the estate of deceased member.
30. Register of members.
31. Admissibility of copy of entry as evidence.
32. Exemption from compulsory registration of instruments relating to shares etc of society.
33. Power to exempt from income-tax, stamp-duty, registration and court fees.
33-A. Provincial Government may give loans or guarantee interest or return.
Property and Funds of Societies
34. Restrictions on loans.
35. Restrictions on borrowing.
36. Restrictions on other transactions with non-members.
37. Investment of funds.
38. Restrictions on dividend.
39. Reserve Fund.
40. Restriction on distribution of profits.
41. Provident fund.
42. Contribution to charitable purpose.
Inspection of Affairs
43. Inquiry by Registrar.
44. Inspection of books of indebted society.
44-A. Inspection of books and properties.
44-B. Power of Registrar to exercise powers under section 50-A in the course of an inquiry or inspection.
44-C. Power to remove officers.
44-D. Power of Registrar to give directions.
44-E. Special measures.
45. Costs of inquiry.
46. Recovery of costs.
Liquidation and Arbitration
47. Winding up.
48. Society may be wound up if membership is reduced.
48-A. Winding up of housing society.
49. Effect of cancellation of registration.
50. Power of a liquidator.
50-A. Power of Registrar to assess damage against delinquent promoters, etc.
51. Bar of suit in winding up and dissolution matters.
52. Disposal of surplus assets.
53. Surplus assets of housing society.
54-A. Registrar’s power to set aside the award and order the dispute to be referred back to arbitration.
55. Attachment before award.
56. Appeal against award of arbitrator.
57. Finality of awards in certain orders.
58. Powers to enforce attendance.
59. Money how recovered.
Powers of Registrar to recover certain sums by attachment and sale of property.
Registrar or person empowered by him to be a Civil Court for certain purposes.
59-A. Transfer of property which cannot be sold.
59-C. Cases in which application for distraint may be made.
59-D. Form of application.
59-E. Procedure on receipt of application.
59-F. Execution of order for distraint.
59-G. Service of notice of demand and the grounds of distraint.
59.H. Right to reap, etc., produce.
59.I. Sale proclamation to be issued unless demand is satisfied.
59.J. Place of sale.
59.K. Provisions relating to growing crops.
59.L. Manner of sale.
59.M. Postponement of sale.
59.N. Payment of purchase money.
59.O. Certificate be given to the purchaser.
59.P. Proceeds of sale how to be applied.
59.Q. Certain persons may not purchase.
59.R. Procedure where demand is paid before the sale.
59.S. Distraint of property which is under attachment.
59.T. Suit for compensation for wrongful distraint and appeals.
Default by a society, officer or member.
Wilful neglect or default by a society, etc.
Wilful furnishing of false information.
Disobedience of summons, requisition, or order.
Indulgence in fraudulent activities.
Performing acts without approval.
Making a false report or refusing to do an act.
Violation of the master plan.
61. Penalty for offences not otherwise provided for.
62. Prohibition of the use of the word “co-operative”.
63. Cognizance of offences.
Appeals and Revisions
64.A. Power of Provincial Government and the Registrar to call for proceedings of subordinate officers and to pass orders thereon.
64.AA. Finality of orders of Provincial Government.
65. Recovery of sums due to Government.
65.B. Officers of societies to be public servants.
66. Power to exempt societies from conditions as to registration.
67. Powers to exempt societies from provisions of Act.
68. Companies Act not to apply.
69. Branches, etc., of societies outside the province.
70. Notice necessary in suits.
70.A. Bar of Jurisdiction.
72. Repeal and savings.
72.A. Construction of references to Co-operative Societies Act, 1912, in enactments.
1THE CO-OPERATIVE SOCIETIES ACT, 1925
(Sind Act VII of 1925)
[4 December 1925]
An Act to consolidate and amend the law relating to co-operative societies in 2[the Province of West Pakistan].
3[Preamble.– Whereas it is expedient to provide for the formation, registration and regulation of cooperative societies for the promotion of thrift, self help and mutual assistance amongst agriculturist or other persons with common economic or social interests and for achieving better standards of living and for the matters incidental thereto;
It is hereby enacted as follows:-]
1. Short title.– This Act may be called the 5[* * *] Co-operative Societies Act, 1925.
6[2. Extent.– This Act extends to the whole of the Province of West Pakistan, except the Tribal Areas.]
3. Definitions.– In this Act, unless there is anything repugnant in the subject or context,
(a) “by-laws” means by-laws registered under this Act and for the time being in force and includes a registered amendment of such by-laws;
(b) “Committee” means the Committee of Management or other directing body to whom the management of the affairs of a society is entrusted;
7[(bb) “Financing Bank” means a society the main object of which is to make loans in cash or in kind to any other society or to an agriculturist who is not a member of a society or to both societies and such agriculturists;]
8[(bbb) “Loan” includes finance as defined in the Banking Tribunals Ordinance, 19849 and all cognate expressions shall be construed accordingly];
(c) “Member” includes a person joining in the application for the registration of a society or a person admitted to membership after registration in accordance with the rules and by-laws applicable to such society;
(d) “Officer” includes a Chairman, Secretary, Treasurer, member of committee or other person empowered under the rules or under the by-laws of a society to give directions in regard to the business of such society;
(e) “Society” means a society registered or deemed to be registered or deemed to be registered under this Act;
(f) “Registrar” means a person appointed to perform the duties of a Registrar of Co-operative Societies under this Act;
(g) “Rules” means rules made under this Act;
(h) (1) a “resource society” means a society formed with the object of obtaining for its members the credit, goods or services required by them;
(2) a “producers’ society” means a society formed with the object of producing and disposing of goods as the collective property of its members and includes a society formed with the object of the collective disposal of the labour of the members of such society;
(3) a “consumers’ society” means a society formed with the object of obtaining and distributing goods to or of performing services for its members, as well as to other consumers and of dividing among its members and customers in a proportion prescribed by the rules or by the by-laws of such society, the profits accruing from such supply and distribution;
(4) a “housing society” means a society formed with the object of providing its members with dwelling houses on conditions to be determined by its by-laws;
(5) a “general society” means a society not falling under any of the four classes above-mentioned.
The Registrar shall classify all societies under one or other of the above heads and his decision shall be final.
A society formed with the object of facilitating the operations of any one of the above classes of societies shall be classified as a society of that class.
A list of all such societies, so classified shall be published annually in the 10[Official Gazette].
4. The Registrar.– 12[The Provincial Government] may appoint a person to be Registrar of Co-operative Societies for 13[the Province] or any portion of it, and may appoint a person or persons to assist such Registrar, and may, by general or special order, confer on any such person or persons all or any of the powers of a Registrar under this Act.
14[4-A. Power of Registrar to issue search warrant.– (1) For the purpose of recovering any papers, documents or books of account belonging to a society, the Registrar may issue a search warrant and exercise all such powers with respect thereto as may be lawfully exercised by a Magistrate under the Provisions of Chapter VII of the Code of Criminal Procedure, 1898, and all such searches shall be made in accordance with the Provisions of that Code.
(2) The powers under sub-section (1) shall not be exercised by the Registrar before serving a notice on the society and giving it a reasonable opportunity to produce such papers, documents or books of account as are specified in such notice.]
5. Societies which may be registered.– Subject to the provisions hereinafter contained a society which has as its object the promotion of the economic interests of its members in accordance with co-operative principles, or a society established with the object of facilitating the operations of such a society, may be registered under this Act with or without limited liability:
Provided that, unless 15[the Provincial Government] by general or special order otherwise directs–
(a) the liability of a society of which a member is a society shall be limited;
(b) the liability of a society of which the primary object is the creation of funds to be lent to its members, and of which the majority of the members are agriculturists and of which no member is a registered society shall be unlimited and the members of such a society shall, on its liquidation, be jointly and severally liable for and in respect of all obligations of such a society:
Provided further that when the question whether the liability of a society is limited or unlimited has once been decided by the Registrar at the time of registration his decision shall be final.
6. Restrictions on interest of member of society with limited liability and a share capital.– Where the liability of the members of a society is limited by shares, no member other than a society shall–
(a) hold more than such portion of the share capital of the society, subject to a maximum of one fifth, as may be prescribed by the rules; or
16[(b) have or claim to have an interest in the shares of the society not exceeding fifty thousand rupees; provided that if the society is a housing society, a member may have or claim to have an interest in the shares of the society, not exceeding two hundred thousand rupees.]
17[7. Conditions of registration.– (1) No society, other than a society of which a member is a society, shall be registered under this Act, unless it consists of at least thirty members and in case of a producers’ or housing society, consists of at least fifty members and each member of a society, except the housing and producers’ societies, shall have the ordinary place of abode in the same town or village or in the same group of villages within a radius of fifteen kilometers from the registered office of the society.
(2) No society shall be registered for the purpose of carrying on business as a banking society, financing bank or which uses as part of its name under which it proposes to carry on business, the word “bank” or “banking” unless–
(a) it has a paid up capital of not less than twenty million rupees or such higher amount, as may be prescribed; and
(b) satisfies such other conditions as may be prescribed.
(3) The word “Limited” shall be the last word in the name of every society registered with limited liability.]
18[7-A. Eligibility for membership.– A person shall be eligible to become member of a society if–
(a) in case of an individual, he is above the age of eighteen years, is of sound mind, is solvent and has not applied to be adjudged as an un-discharged insolvent;
(b) it is a cooperative society; or
(c) it is a body corporate or a company.]
19[8. Power of Registrar to decide certain questions.– When any question arises as to whether, for the purposes of this Act, a person is an agriculturist or not, or is resident of a town or village or group of villages within a radius of fifteen kilometers from the registered office of the society, the question shall be decided by the Registrar, whose decision shall be final.]
9. Application for registration.– (1) For purposes of registration an application to register shall be made to the Registrar.
20[(2) The application for registration of a cooperative society shall be–
(a) made in writing specifying the address of its proposed registered office;
(b) signed by at least fifty persons in case of producers’ or housing society and at least thirty persons for any other category of societies with proof of the identifications of those persons; provided that this condition as to the number of persons shall not be applicable in case where at least one of the proposed member is a society;
(c) accompanied, in the case of producers, or housing society or any other society which is likely to adversely affect the environment, approval of the competent authority in accordance with section 12 of the Pakistan Environmental Protection Act, 1997 (Act XXXIV of 1997);
(d) accompanied by the following documents:
(i) a feasibility report showing its financial viability;
Explanation.– Financial viability shall include a statement of finances relating to the expected business turn over of the society, stating the number of members and expenditures being within its income;
(ii) proof that promoter members’ contributions towards the paid up share capital are in accordance with the feasibility report;
(iii) proof of the payment of such registration fee as may be prescribed; provided that different registration fee may be prescribed for different categories of societies; provided further that in case of agriculture society, the registration fee shall not exceed five hundred rupees; and
(iv) a copy of the proposed by-laws of the society.
(3) A housing society shall, within a period of one year of its registration, furnish the schedule of proposed development of land, master plan, site plan indicating availability of the existing public utilities, public amenities and other allied facilities in the area and, in case of its failure, the Registrar may de-register the society after affording it an opportunity of hearing.
(4) The registration fee shall be deposited in the account of the Registrar and shall be utilized in the prescribed manner.]
10. Registration.– If the Registrar is satisfied that a society has complied with the provisions of this Act and the rules and that its proposed by-laws are not contrary to 21[any law for the time being in force], he may register the society and its by-laws.
11. Evidence of registration.– A certificate of registration signed by the Registrar shall be conclusive evidence that the society therein mentioned is duly registered unless it is proved that the registration of the society has been cancelled.
12. Annual general meeting.– Every society shall within a period of three months after the date fixed for making up its accounts for the year under the rules for the time being in force call a general meeting of its members.
13. Special general meeting.– A special general meeting may be called at any time by a majority of the committee and shall be called within one month–
(1) on the requisition in writing of one-fifth of the members of the society, or
(2) at the instance of the Registrar.
14. Change of name: its effect.– A society may, by a resolution of a general meeting and with the approval of the Registrar, change its name: but such change shall not affect any right or obligation of the society, or of any of its members, or past members and any legal proceedings pending may be continued by or against the society under its new name.
22[15. Amalgamation and division of societies.– (1) Any two or more societies may, with the prior approval of the Registrar, by a resolution passed by two-third majority of the members present and voting in a general or special meeting of the societies, amalgamate as a single society.
(2) A society may, with the prior approval of the Registrar, by a resolution passed by two-third majority of the members present and voting in a general or special meeting of the society divide the society into two or more societies.
(3) A society or societies, as the case may be, by way of a resolution passed in accordance with this section, transfer to, divide or amalgamate its or their assets and liabilities with any other society or societies in case of division or amalgamation with the prior written consent of the creditor or creditors, if any, of the society or the societies.
(4) Division of assets and liabilities shall take place after due approval and audit and in such manner, as may be prescribed.
(5) No new society arising out of an existing society shall be registered unless it satisfies the conditions of registration of a society under this Act or the rules.]
23[15-A. Merger of a society in a company, etc.– (1) Notwithstanding anything contained in this Act and subject to any other law for the time being in force, a society may, with the written consent of its creditors and the approval of the Registrar, by a resolution, incorporating the terms and conditions of the proposed merger, passed by two-third majority of its members present and voting in a general body meeting, merge itself in a company or a body corporate.
(2) On the fulfillment of the legal formalities and disposal of objections, if any, the Registrar may issue a certificate authorizing such merger.
(3) On the issuance of the certificate under sub-section (2), all the assets and liabilities of the society shall stand transferred to the company or the body corporate, as the case may be.]
24[16. Amendment of the by-laws of a society.– (1) No amendment of the by-laws of a society shall be valid until it is registered under this Act.]
(2) If the Registrar is satisfied that any amendment of the by-laws 25[made by a society] is not contrary to 26[any law for the time being in force], he may register the amendment.
(3) When the Registrar registers an amendment of by-laws of a society 27[under sub-section(2)], he shall issue to the society a copy of the amendment certified by him, which shall be conclusive evidence that the same is duly registered.
28[16-A. Powers of the Registrar to amend bye-laws.– (1) If the Registrar is satisfied that the bye-laws of a society are inconsistent with any law for the time being in force, or it is necessary in the interest of the society and its members to make amendments in such bye-laws, he may, by means of a notice in writing, giving reasons, bring the fact to the notice of the society and advise the society to make the amendments within a period of sixty days.
(2) If the society fails to make such amendments within the time specified in sub-section (1), the Registrar may, after giving the society an opportunity of being heard, register such amendments as he may decide and issue to the society a copy of the amendment registered by him.
(3) An appeal shall lie to the Government from an order of the Registrar passed under sub-section (2) within two months of the date of communication of the order.]