Subject NOT available

click here for IIIF manifest

REGISTERED No. D. 221

The Gazette of India

EXTRAORDINARY

PART II—Section 2

PUBLISHED BY AUTHORITY

No. 13] NEW DELHI, THURSDAY, MARCH 26,1970/CHAITRA 5, 1892

Separate paging is given to this Part in order that it may be filed

as a separate compilation.

LOK SABHA

The following Bills were introduced in Lok Sabha on the 26th March, 1970: — A Bill to consolidate and amend the law relating to co-operative societies in the Union territory of Delhi.

BE it enacted by Parliament in the Twenty-first Year of the Republic of India as follows: —

CHAPTER I

PRELIMINARY

    1.  (1)  This  Act  may  be  called  the  Delhi  Co-operative  Societies  Act,   Short
1970.                                                                                title,
                                                                                     extent
    (2)  It  extends  to  the  whole  of  the  Union  territory  of  Delhi.          and
                                                                                     commen-
    (3)  It  shall  come  into  force  on  such  date  as  the  Lieutenant-Governor  cement.
may,  by  notification  in  the  Delhi  Gazette,  appoint.
   2. In  this  Act,  unless  the  context  otherwise  requires,—                    Defini-

tions.

(a) "bye-laws" means the registered bye-laws for the time being in force, and includes registered amendments of such bye-laws;

(b) "committee" means the governing body of a co-operative society, by whatever name called, to which the management of the affairs of the society is entrusted;

309

(c) "co-operative bank" shall have the same meaning as is

assigned to it in the Deposit Insurance Corporation Act, 1961; 47 of 1961.

(d) "co-operative society" means a society registered or deemed

to be registered under this Act;

(e) "co-operative society with limited liability" means a co- operative society the liability of whose members is limited by its bye-laws to the amount, if any, unpaid on the shares individually held by them or to such amount as they may individually undertake to contribute to the assets of the society, in the event of its being wound up;

(/) "cooperative society with unlimited liability" means a co- operative society the liability of whose members is unlimited for the purpose of contributing jointly and severally to any deficiency in the assets of the society in the event of its being wound up;

47 of 1961.

(g) "Deposit Insurance Corporation" means the Deposit Insur- ance Corporation established under section 3 of the Deposit Insur- ance Corporation Act, 1961;

(h) "federal society" means a society—

(a) not less than five members of which are themselves

societies; and

(b) in which the voting rights are so regulated that the members which are societies have not less than four-fifth of the total number of votes in the general meeting of such society;

(i) "financing bank" means a co-operative society, the object? of which include the creation of funds to be lent to other co-operative societies;

(j) "Lieutenant-Governor" means the administrator of the Union territory of Delhi appointed by the President under article 239 of the Constitution;

(fc) "member" means a person joining in the application for the registration of a co-operative society and a person admitted to mem- bership after such registration in accordance with this Act, the rules and the bye-laws, and includes a nominal and an associate member and the Central Government when it subscribes to the share capital of a society;

(I) "officer" means the president, vice-president, chairman, vice- chairman, managing director, secretary, manager, member of com- mittee, treasurer, liquidator, administrator and includes any other person empowered under the rules or the bye-laws to give directions in regard to the business of a co-operative society;

(m) "prescribed" means prescribed by rules;

(n) "Registrar" means a person appointed to perform the func- tions of the Registrar of Co-operative Societies under this Act, and includes any person appointed to assist the Registrar when exercising all or any of the powers of the Registrar;

(o) Reserve Bank means the Reserve Bank of India constitu-

2 of 1934.

ted under the Reserve Bank of India Act, 1934.

(p) "rules" means the rules made under this Act;

(q) "Tribunal" means the Delhi Co-operative Tribunal constitu- ted under section 78.

CHAPTER II

REGISTRATION OF CO-OPERATIVE SOCIETIES

Regis- trar.

3. (2) The Lieutenant-Governor may appoint a person to be the Re-

gistrar of Co-operative Societies fpr the Union territory of Delhi and may

appoint other persons to assist him.

(2) The Lieutenant-Governor may, by general or special order, confer on any person appointed to assist the Registrar all or any of the powers of the Registrar under this Act.

(3) Every person appointed to assist the Registrar shall exercise the powers conferred on him under sub-section (2) subject to the general guidance, superintendence and control of the Registrar.

(4) The Lieutenant-Governor may, by notification in the Delhi Gazette and subject to such conditions as he may think fit to impose, confer all or any of the powers of the Registrar under this Act on any federal society, or an officer of such federal society; and every such federal society or officer on whom the powers of the Registrar are so conferred shall exercise such powers under the general guidance, superintendence and control of the Registrar.

Societies which may be regis- tered.

4. (1) 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 regis- tered under this Act with or without limited liability:

Provided that no society shall be registered if it is likely to be econo- mically unsound or the registration of which may have an adverse effect on development of co-operative movement:

Provided further that, unless the Lieutenant-Governor by general or special order otherwise directs, the liability of the society of which a member is a co-operative society shall be limited.

(2) The word "limited" or its equivalent in any Indian language shall be the last word in the name of every society registered under this Act with limited liability.

Restric- tions on regis- tration.

5. No society other than a federal society shall be registered under this Act unless it consists of at least ten persons (each of such persons being a member of different family), who are qualified to be members under this Act and who reside in the area of operation of the society.

Explanation.—For the purposes of this section the expression "mem- ber of a family" means wife, husband, father, mother, grand-father, grand-mother,, step-father, step-mother, son, un-married daughter, un-mar- ried step-daughter, step-son, grand-son, un-married grand-daughter, un- married sister, un-married half-sister, brother, half-brother and wife of "brother or half-brother.

Restric- tions on hold- ing of shares.

6. No member other than the Central Government or a co-operative society shall hold more than such portion of the share-capital of a co- operative society, subject to a maximum of one-fifth, as may be pres- cribed or have or claim any interest in the shares of such society exceed- ing ten thousand rupees, whichever is less.

7. (1) For the purposes of registration, an application shall be made

to the Registrar.

Appli- cation for regis- tration. (2) The application shall be signed,—

(a) in the case of a society of which no' member is a co-operative society, by at least ten persons qualified in accordance with the re- quirements of section 5; and

(b) in the case of a society of which a member is a co-operative society, by a duly authorised person on behalf of every such society and where all the members of the society are not co-operative socie- ties, by ten other members, or when there are less than ten other members, by all of them.

8. Where any question arises whether for the purpose of this Act a person resides in the area of operation of a society or not, or whether a society is of same type as another society or of different type, the ques- tion shall be decided by the Registrar whose decision shall be final.

Power of the Re- gistrar to decide certain questions.

9. (1) If the Registrar is satisfied—

Regis- tration.

(a) that the application complies with the provisions of this Act

and the rules;

(b) that the objects of the proposed society are in accordance

with section 4;

(c) that the proposed bye-laws are not contrary to the provi-

sions of this Act and the rules; and

(d) that the proposed society has reasonable chances of success,

the Registrar may register the society and its bye-laws.

(2) When the Registrar refuses to register a society, he shall com- municate the order of refusal, together with the reasons therefor, to such of the applicants as may be prescribed.

(3) The application for registration shall be disposed of by the Regis- trar within a period of two months from the date of receipt thereof by him.

Regis- tration certi- ficate.

10. Where a society is registered under this Act, the Registrar shall issue a certificate of registration signed by him, which shall be conclu- sive evidence that the co-operative society therein mentioned is duly registered under this Act.

11. (1) No amendment of any bye-laws of a co-operative society shall

be valid unless such amendment has been registered under this Act.

(2) Every proposal for such amendment shall be forwarded to the Registrar and if the Registrar is satisfied that tKe proposed amendment—

Amend- ment of by-laws of a co, opera- tive society.

(a) is not contrary to the provisions of this Act and the rules;

(b) does not conflict with co-operative principles; and

(c) will promote the economic interests of the members of the society,

he may register the amendment.

(3) The Registrar shall forward to the society a copy of the registered amendment together with a certificate signed by him and such certificate shall be conclusive evidence that the amendment has been duly register- ed.

(4) Where the Registrar refuses to register an amendment of the bye- laws of a co-operative society, he shall communicate the order of refusal together with the reasons therefor, to the society in the manner pres- cribed.

12. An amendment o'f the bye-laws of a co-operative society shall, un- less it is expressed to come into operation on a particular day, come Into force on the day on which it is registered.

When amend- ments of bye-laws come into force.

Change of name.

13. (1) A co-operative society may, by an amendment of its bye-laws, 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.

(2) Where a co-operative society changes its name, the Registrar shall enter the new name on the register of co-operative societies In place of the former name and shall amend the certificate of registration accord- ingly-

Change of lia- bility.

14. (1) Subject to the provisions of this Act and the rules, a co-opera- tive society may, by an amendment of its bye-laws, change the form or extent of its liability.

(2) When a co-operative society has passed a resolution to change the form or extent of its liability, it shall give notice thereof in writing to all its members and creditors and, notwithstanding any bye-law or con- tract to the contrary, any member or creditor shall, during a period of one month from the date of service of the notice upon him, have the option of withdrawing his shares, deposits or loans, as the case may be.

(3) Any member or creditor who does not exercise his option within the period specified in sub-section (2) shall be deemed to have assented to the change.

(4) An amendment of a bye-law of "a co-operative society changing the form or extent of its liability shall not be registered or take effect until either—

(a) the assent thereto of all members and creditors has been ob- tained; or

(b) all claims of members and creditors who exercise the option referred to in sub-section (2) within the period specified therein have been met in full.

15. (1) A co-operative society may, with the previous approval of the Registrar and by a resolution passed by a two-thirds majority of the mem- bers present and voting at a general meeting of the society,—

(a) transfer its assets and liabilities in whole or in part to any

other co-operative society;

(b) divide itself into two or more co-operative societies.

Amalga- mation, transfer of assets and lia- bilities and division of co-ope- rative societies.

(2) Any two or more co-operative societies may, with the previous approval of the Registrar and by a resolution passed by a two-thirds majority of the members present and voting at a general meeting of each such society, amalgamate themselves and form a new co-operative society.

(3) The resolution of a co-operative society under sub-section (I) or sub-section (2) shall contain all particulars of the transfer, division or amalgamation, as the case may be:

Provided that in the case of a co-operative bank, the Registrar shall not accord approval to any such resolution without the previous sanction in writing of the Reserve Bank.

(4) When a co-operative society has passed any such resolution, it shall give notice thereof in writing to all its members and creditors and, notwithstanding any bye-laws or contract to the contrary, any member or creditor shall, during the period of one month of the date of service of the notice upon him, have the option of withdrawing his shares, de- posits or loans, as the case may be.

(5) Any member or creditor who does not exercise his option within the period specified in sub-section (4) shall be deemed to have assented to the proposals contained in the resolution.

(6) A resolution passed by a co-operative society under this section

shall not take effect until either—

(a) the assent thereto of all the members and creditors has been

obtained; or

(o) all claims of members and creditors who exercise the option referred to in sub-section (4) within the period specified therein have been met in full.

(7) Where a resolution passed by a co-operative society under this section involves the transfer of any assets and liabilities, the resolution shall, notwithstanding anything contained in any law for the time being in force, be a sufficient conveyance to vest the assets and liabilities in the transferee without any further assurance,

Power to direct amalga- mation, division and re- organi- sation in public interest, etc.

16. (1) Where the Registrar is satisfied that it is essential in the pub lie Interest, or In the Interest of the co-operative movement, or for th purpose of securing the proper management of any co-operative societ; that two or more co-operative societies should be amalgamated or an? co-operative society should be divided to form two or more co-operativi societies or should be reorganised, then, notwithstanding anything con tained in section 15, but subject to the provisions of this section, thi Registrar may, by order, provide for the amalgamation, division or ra organisation of these co-operative societies into a single society or lnti societies with such constitution, property rights, interests and authori

ties and such liabilities, duties and obligations as may be specified in the order:

Provided that no such order of amalgamation, division or reorganisa- tion in respect of a co-operative bank shall be made without the previous sanction in writing of the Reserve Bank.

(2) No order shall be made under this section, unless—

(a) a copy of the proposed order has been sent in draft to the co-operative society or each of the co-operative societies concerned; and

(b) the Registrar has considered and made such modifications in the draft order as may seem to him desirable in the light of any suggestion and objections which may be received by him within such period (not being less than two months from the date on which a copy of the order aforesaid is received by the society or societies, as the case may be), as the Registrar may fix in that behali, either from the society or from any of the societies concerned or from any mem- ber or class of members thereof or from any creditor or class of cre- ditors thereof.

(3) The order referred to in sub-section (2) may contain such inci- dental, consequential and supplemental provisions as may, in the opinion of the Registrar, be necessary to give effect to the amalgamation, divi- sion or reorganisation, as the case may be.

(4) Every member or creditor of each of the co-operative societies to be amalgamated, divided or reorganised, who has objected to the scheme of amalgamation, division or reorganisation, within the period specified, shall be entitled to receive, on the issue of the order of amalgamation, division or reorganisation, his share or interest, if he be a member, and the amount in satisfaction of his dues, if he be a creditor.

(5) On the issue of an order under sub-section (1), the provisions of sub-sections (2), (3) and (4) of section IS shall apply to the co-operative societies so amalgamated, divided or reorganised as if the amalgamation, division or reorganisation had been made under section 15.

10 of 1949.

17. When an order of moratorium has been made by the Central Gov- ernment under sub-section (2) of section 45 of the Banking Regulation Act, 1949, in respect of a co-operative bank, the Registrar, with the pre- vious approval of the Reserve Bank in writing, may, during the period of moratorium, prepare a scheme—

(a) for the reorganisation of the co-operative bank; or

(fa) for the amalgamation of the co-operative bank with any

other co-operative bank.

Registrar to prepare scheme of amalga- mation of co-ope- rative bank in certain cases.

Liability

47 of 1961.

of a co- operative bank to the Deposit Insurance Corpora- tion.

18. Notwithstanding anything contained in sections 15 and 16 or any other provision of this Act, where a co-operative bank, being an insured bank within the meaning of the Deposit Insurance Corporation Act, 1961, is amalgamated or reorganised and the Deposit Insurance Corporation has become liable to pay to the depositors of the insured bank under sub- section (2) of section 16 of that Act, the bank with which such insured bank is amalgamated, or the new co-operative bank formed after such amalgamation, or as the case may be, the insured bank or transferee

bank shall be under an obligation to repay to the Deposit Insurance Cor- poration in the circumstances, to the extent of and in the manner referred to in section 21 of the Deposit Insurance Corporation Act, 1961. ⁴⁷ of ¹⁹⁶¹.

19. (2) Where the whole of the assets and liabilities of a co-operative society are transferred to another co-operative society in accordance with the provisions of section 15 or section 16, the registration of the first men- tioned co-operative society shall stand cancelled and the society shall be deemed to have been dissolved and shall cease to exist as a corporate body.

Cancel- lation of registra- tion certi- ficates of co-ope- rative societies in certain cases.

(2) Where two or more co-operative societies are amalgamated into a new co-operative society in accordance with the provisions of section 15 or section 16, the registration of each of the amalgamating societies shall stand cancelled on the registration of the new society, and each society shall be deemed to have been dissolved and shall cease to exist as a corpo- rate body.

(3) Where a co-operative society divides itself into two or more co- operative societies in accordance with the provisions of section 15 or is divided by the Registrar in accordance with the provisions of sec- tion 16, the registration of that society shall stand cancelled on the regis- tration of the new societies, and that society shall be deemed to have been dissolved and shall cease to exist as a corporate body.

(4) The amalgamation and splitting of co-operative societies shall not in any manner whatsoever affect any right or obligation of the resulting co-operative society or societies or render defective any legal proceedings by or against the co-operative society or societies, and any legal pro- ceedings that might have been continued or commenced by or against the co-operative society or societies, as the case may be, before the amal- gamation or splitting, may be continued or commenced by or against the resulting co-operative society or societies.

(5) Where a co-operative society has not commenced business within a reasonable time of its registration or has ceased to function or if the Registrar is satisfied, after making such inquiry as he thinks fit, that the society no longer has genuinely as its objects one or more of the objects specified in section 4 and that its registration ought in the interests of the general public be cancelled, he shall make an order cancelling the regis- tration of a co-operative society. A co-operative society shall, from the date of such order of cancellation, be deemed to be dissolved and shall cease to exist as a corporate body.

CHAPTER III

MEMBERS OF CO-OPERATIVE SOCIETIES AND THEIR RIGHTS AND LIABILITIES

20. (1) No person shall be admitted as member of a co-operative so- ciety except the following, namely:—

Persons who may- become member. (a) an individual competent to contract under section 11 of the Indian Contract Act, 1872;

9 of 1872.

(b) any other co-operative society;

(c) the Central Government; and

(d) such class or classes of persons or association of persons as may be notified by the Lieutenant-Governor In this behalf:

Provided that the provisions of clause (a) shall not apply to an indi- vidual seeking admission to a society exclusively formed for the benefit of students of a school or college.

(2) Notwithstanding anything contained in sub-section (2), the Lieu- tenant-Governor may, having regard to the fact tliat the interest of any , person or class of persons conflicts or is likely to conflict with the objects of any society or class of societies, by general or special order, published in the Delhi Gazette, declare that any person or class of persons engaged in or carrying on any profession, business or employment shall be disqua- lified from being admitted, or lor continuing, as members or shall be eli- gible for membership only to a limited extent of any specified society or class of societies, so long as such person is or such persons are engaged in or carrying on that profession, business or employment, as the case may be.

Dtontinat or *MOciat" 21. (1) Notwithstanding anything contained in clause (d) of section 20, a co-operative society may admit any person as a nominal or associate member in accordance with its bye-laws.

(2) A nominal or associate member shall not be entitled to any share in any form whatsoever, in the assets or proflt3 of the co-operative society.

(3) Save as provided in this section, a nominal or associate member shall have such privileges and rights of a member and be subject to such liabilities of a member, as may be specified in the bye-laws of the society.

22. No member of a co-operative society shall exercise the rights of a member unless he has made such payments to the society in respect of membership or has acquired such interest in the society as may be speci- fied in the bye-laws.

Memfaar not to exercln* righti till due payment made.

23. Every member of a co-operative society shall have one vote in the Vote* ctf mwnbers.

affairs of the society:

Provided that—

(a) in the case of an equality of votes, the chairman shall havft a second or casting vote;

(b) a nominal or associate member shall not have the right of vote;

(c) where the Central Government is a member of the co-opera- tive society, each person nominated by the Central Government on the committee shall have one vote.

24. (1) Every member of a co-operative society shall exercise his vote in person and no member shall be permitted to vote by proxy.

Mannar Of "x"r- olsing vot".

(2) Notwithstanding anything contanied in sub-section (1), a co- opr 'ative society which is a member of another co-operative society, ma •, subject to the rules, appoint one of its members to vote on its be- hali' in the affairs of that other society.

25. The transfer of the share or interest of a member in the capital of a co-operative society shall be subject to suoh conditions as to maximum holding as are specified in sec Lion 6.

Restric- tion on transfer of aharef or interest.

Transfer of inte- reit on death of focieties.

26. (1) On the death of a member a co-operative society may transfer the share or interest of the deceased member to the person nominated in accordance with the rules made in chis behalf, or, it there is no person so nominated, to such person as may appear to the committee to be the heir or legal representative of the deceased member, or pay to such nominee, heir or legal representative, as the case may be, a sum repre- senting the value of such member's share or interest as ascertained in accordance with the rules or bye-laws:

Provided that—

(i) in the case of a co-operative society with unlimited liability, such nominee, heir or legal representative, as the case may be, may require payment by the society of the value of the share or interest of the deceased member ascertained as aforesaid;

(ii) in the case of a co-operative society with limited liability, the society shall transfer the share or interest of the deceased member to such nominee, heir or legal representative, as the case may be, being qualified in accordance with the rules and bye-laws for membership of the society, or on his application within one month of the death of the deceased member to any person specified in the application who is. so qualified;

(Hi) no such transfrr or payment shall be made except with the¹ consent of the nominee, heir or legal representative, as the case may be.

(2) A co-operative society shall, subject to the provisions of section 36 and unless within six months of the death of member prevented by an order of a competent court, pay to such nominee, heir or legal represen- tative, as the case may be, all other moneys due to the deceased member from the society.

(3) All transfers and payments made by a co-operative society in ac- cordance with the provisions of this section shall be valid and effectual against any demand made upon the society by any other person.

27. (1) Subject to the provisions of sub-section (2), the liability of a past member or of the estate of a deceased member of a co-operative society for the debts of the society as they existed,—

(a) in the case of a past member, on the date on which he ceased Liability of past member and wtatj of dece"-. sed

to be a member;

(b) in the case of a deceased member, on the date of his death;

CHAPTER IV

MANAGEMENT OF CO-OPEKATLVE SOCIETIES

28. (1) The final authority in a co-operative society shall vest in the general body of members:

Final au- thority in a CO' operative society.

Provided that where the bye-laws of a co-operative society provide for the constitution of a smaller body consisting of delegates of members of the society elected or selected in accordance with such bye-laws the smaller body shall exercise such powers of the general body as may be prescribed or as may be specified in the bye-laws of the society.

(2) Notwithstanding anything contained in sub-section (2) of section 24 each delegate shall have one vote in the affairs of the society.

Annual general meeting.

29. (1) Every co-operative socie% shall, within a period of six months next after the dale fixed for making-up its accounts for the year under the rules for the time being in force, tall a general meeting of its mem- bers for the purpose of-—

(a) approval of the programme of the activities of the society prepared by the committee for the ensuing year*

(b) election, if any, of the members of the committee other than nominated members subject to the provisions of section 31;

(c) consideration of the audit report and the annual report;

(d) disposal of the net profits; and

(e) consideration of any other matter which may be brought for-

ward in accordance with the bye-laws:

Provided that the Registrar may, by general or special order, extend the period for holding such meeting for a further period not exceeding three months:

Provided further that, if in the opinion of the Registrar no such exten- sion i=; necessary, or such meeting is not called by the society within the extended period, if any, granted by him, the Registrar or any person authorised 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 cal- ling 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 respon- sible for the refusal or failure to convene the general meeting,

(2) At every annual general meeting of a co-operative society, the committee shall lay before the society a statement showing the details of the lnpns if any, given to anv of the members of the committee during the preceding year.

Special general nutting.

30. (1) The committee of n co-operative society may, at any time, call a special general meeting of the societv and shall call such meeting with- in one month after the recript of a requisition in writing from the Regis- trar or from such number of members or a proportion of the tokU number of members, as ma-y hp pr-ovi'H-p.d-in the, bye-laws,

(2) If a special general meeting of a co-operative society is not called in accordance with the requisition referred to in sub-section (1), the Re- gistrar or any person authorised by him in this behalf shall have, the power to call such meeting and that meeting shall be deemed to be a meeting called by the committee, and the Registrar may order that expenditure Incurred in calling such a meeting shall be paid out of the funds of the society or by any such person or persons who, in the opinion of the Regis- trar, were responsible for the refusal or failure to convene the special general meeting.

Election and nornl. nation of members of com- mitt""fc

31. (1) The superintendence, direction and control of the preparation of the electoral rolls for, and the conduct of, elections of the members of the committees of such co-operative societies or class of co-operative so- cieties as the Lieutenant-Govemor may, by general or special order, notify, shall bo vested in such returning officers as may be appointed by him in this behalf.

(2) The vote at such elections shall be by secret ballot.

(3) The term of office of the elected members of the committee shall be such, not exceeding three co-operative years including the co-operative year of their election, as may be specified in the bye-laws of the society:

Provided that the elected members shall continue to hold office till their successors are elected or nominated under the provisions of the Act or the rules or bye-laws.

(4) No person shall be eligible to be elected as a member of the com- mittee of a co-operative society unless he is a shareholder of that co-opera- tive society, or after he has held such office in the society during two con- secutive terms, whether full or part.

Explanation.—(i) Where any person holding office of a member of the committee at the time of commencement of this Act is again elected to that office after such commencement, he shall for the purpose of this sub- section be deemed to have held office, for one term before such election.

(ii) A member who has ceased to hold any office on the committee continuously for three co-operative years, shall again be eligible for elec- tion as a member of that committee.

(5) Notwithstanding anything contained in this Act, a person shall be disqualified for appointment as, or for being, a member of a committee,—

(a) if he is a member of a committee of another society of the same type; or

(b) if he is a member of the committees of three or more societies of a different type or different types:

Provided that nothing contained in this sub-section shall be deemed to disqualify a person for election as, or for being, a delegate of a society.

(6) On the committee of such co-operative societies or class of co-opera- tive societies as may be prescribed, two seats shall be reserved, one for the members who belong to the Scheduled Castes and one for economical- ly weaker sections of the members who as land-owners or tenants or as trtltti eto wrt hold more than the prescribed arw of agricultural feuwj or

fulfil the prescribed conditions, and if no such persons are elected, the committee shall co-opt the required number of members from amongst the persons entitled to such representation.

Explanation.—For the purpose of this sub-section, "Scheduled Castes" mean any of the Scheduled Castes specified in Part I of the Schedule to the Constitution (Scheduled Castes) (Union Territories) Order, 1951.

(7) Notwithstanding anything contained.in this Act, any dispute re- lating to election of members of any committees of a co-operative society notified under sub-section (1) shall be referred to the Lieutenant-Go ver- nor whose decision thereon shall be final.

(8) The Lieutenant-Governor may make rules generally to provide for or to regulate matters in respect of elections of members of the commit- tees.

(9) Notwithstanding anything contained in sub-sections (1) to (8),—

(a) where the Central Government has subscribed to the share eapital of a co-operative society, the Central Government or any per- son authorised by it in this behalf shall have the right to nominate on the committee such number of persons not exceeding three or one- third of the total number of members thereof, whichever is less, as the Central Government may determine;

(b) where the Industrial Finance Corporation, the State Finance Corporation or any other financing institution notified in this behalf by the Central Government has provided finance to a co-operative society, the Industrial Finance Corporation, State Finance Corpora- tion or other financing institution, as the eapp may be, shall have the right to nominate one person on the committee.

(10) A person nominated under sub-section (9) shall hold office during the pleasure of the Central Government or the Corporation or other fin- ancing institution, as the case may be.

32. (1) If, in the opinion of the Registrar, the committee of any co- Super- session of com- mittee.

operative society persistently makes default or is negligent in the per- formance of the duties imposed on it by this Act or the rules or the bye- laws, or commits any act which is prejudicial to the interest of the society, or its members, the Registrar may, after giving the committee an oppor- tunity to state its objections, if any, by order in writing, remove the com- mittee; and

(a) order fresh election of the committee, or

(b) appoint one or more administrators who need not be members of the society,

to manage the affairs of the society for a period not exceeding one year specified in the order, which period may, at the discretion of the Registrar be extended from timp to time, so, however, that the aggregate period does not exceed three years.

(2) The Registrar may fix any remuneration for the administrator, as he may think fit. Such remuneration shall be paid out of the funds of th" "relety

(3) The administrator shall, subject to the control of the Registrar and to such instructions as he may from time to time give, have power to exer- cise all or any of the functions of the committee or of any officer of the society and take all such actions as may be required in the interest of the society.

(4) The administrator shall, at the expiry of his term of office, arrange for the constitution of a new committee in accordance with the bye-laws of the society.

(5) Before taking any action under sub-section (1) in respect of a co- operative society, the Registrar shall consult the financing institution to which it is indebted.

(6) Notwithstanding anything contained in this Act, the Registrar shall in the case of a co-operative bank, if so required in writing by the Reserve Bank in the public interest or for preventing the affairs of the co-operative bank being conducted in a manner detrimental to the interests of the depositors or for securing the proper management of a co-operative bank pass an order for the supersession of the committee of that co-operative bank and appointment of an administrator therefor for such period or periods not exceeding five years in the aggregate, as may from time to time be specified by the Reserve Bank

33. (/) (a) If the record, registers or the books of accounts of a co-ope- rative society are likely to be tampered with or destroyed and the fund 'avd property of a society are likely to be misappropriated or misapplied; or

Securing possession of records, etc.

(b) if the committee of a co-onerative society is reconstituted at a general meeting of the s-ociety or the committee of a society is removed by the Registrar under section 32 or if the society is ordered to be wound up under section 63 and the outgoing members of the commit- tee refuse to hand over charge of the; records and property of the so- ciety to those having or entitled to receive such charge,

the Registrar may apply to the magistrate, within whose jurisdiction the society functions, for securing the records and property of the society;

(2) On receipt of an application under sub-section (2), the ma- gistrate may, by a warrant, authorise any police officer, not below the rank of sub-inspector to enter and search any place where the re- cords and the property are kept or are believed to be kept and to seize such records and property; and the records and property so seized shall be handed over to the new committee or administrator of the society or the liquidator, as the case may be.

34. No act of a co-operative society or of any committee or of any officer shall be deemed to be invalid by reason only of the existence of any defect in procedure or in the constitution of the society or of the committee or in the appointment or election of an officer or on the ground that such officer was disqualified for his appointment..

Acts of co-opera- tive socie- ties not to be in- validated by certain defects.

CHAPTER V

PRIVILEGES OF CO-OPERATIVE SOCIETIES

Co-ope- rative sn- ciet'es to be bodies corporate.

35. The registration of a co-operative society shall render it a body corporate by the name under which it is registered having perpetual succession and a common seal, and with power to hold property, enter into contract, institute and defend suits and other legal proceedings and to do all things necessary lor the purposes lor which it is constituted.

First charge of co-ODPra- tivo so- ciety on certain assets.

36. (1) Notwithstanding anything contained in any law for the time being in force, but subject to any prior claim of the Government in respect of land revenue or any money recoverable as land revenue, any debt or outstanding demand owing to a co-operative society by any member or past member or deceased member shall be a first charge upon the crops and other agricultural produce, cattle, fodder for cattle, agricultural or industrial implement.¹; or machinery, raw materials for manufacture and any finished products manufactured from such raw materials, belonging to such member, past member or forming part of the estate of the deceased member, as the case may be.

(2) No person shall transfer any property which is subject to a charge under .sub-section (1) except with the previous permission in writing of the co-operative society which holds the charge.

(3) No+ withstanding anything contained in any law for the time oeing in force, any transfer of property made in contravention of the provisions of sub-section (2) shall be void.

19 of 1883.

\i) The charge created under sub-section (1) shall be available a3 against any claim of the Government arising from a loan granted under ihe Land Improvement Loans Act, 1883, or the Agriculturists' Loans Act, 1884, after the grant of the loan by the society.

12 of 1884,

37. Notwithstanding anything contained in this Act or in any other

law for the time being in force,—

Charge on immov- able pro- perty of members borrowing loans from certain societies.

(i) any person wbi makes an application to a society of which he is a member for a loan shall, if he owns any land or hai in- terest in any land as a tenant, make a declaration hi the prescribed form which shall state that the applicant thereby creates a charge on such land or interest specified m the declaration for the pay- ment of the amount of the loan which the society may make to the member in pursuance of the application and for all future advan- ces, if any, required by him which the society may make to him as such member subject to such maximum as may be determined by the society together with interest on such amount of the loan and advances;

(ii) any person who has borrowed a loan from a society of which he is a member before the date of the coming into force of this Act, and who owns any land or has any interest in land as a tenant shall, as soon as possible, make a declaraiion in the form and to the effect referred to in clause (i);

(m) a declaration made tinder clause (i) or clause (ii) may be varied at any time by a member with the consent of the society in favour of which such charge is created;

(iv) no member shall alienate the whole or any part of the land or interest therein specified in the declaration made undei clause (i) or clause (zi) until the whole amount borrowed by th" member together with Interest thereon is paid in full:

Provided that for tho purpose of paying in full to the society the whole amount borrowed by the member together with interest thereon, the member may. with the previous permission in writing of the society and subject to such conditions as the society may impose, alienate the whole or any part of such land or interest therein:

Provided further that standing crops on any such land may be alienated with the previous permission of the society;

(v) any alienation made in contravention of the provisions of clause (iv) shall be void;

(vi) subject to the prior claims of the Government in respect of land revenue or any money recoverable as land revenue, there shall be a first charge in favour of the society on the land or in- terest specified in the declaration made under clause (i) or clause (ii) for and to the extent of the due3 owing by himb on account of the loans and advances;

(vii) the record of rights shall also include the particulars of every charge on land or interest created under a declaration under clause (i) or clause (ii) notwithstanding anything contained tn any law relating to land revenue for the time being in force;

(mii) any sum due to a society in consequence of charge creat- ed under a declaration under clause (i) or clause (ii) shall, on application for its recovery being made by such society accom- panied by a certificate signed by the Registrar, be recoverable by the Collector, according to the law and under the rules for the time being in force for the recovery of land revenue.

Explanation:— for the purposes of this section, "society" shall mean any co-operative society or class of co-operative societies specified In this behalf by the Lieu tenant-Govern or by a general or special order.

38. A co-operative society shall have a charge upon the share or contribution or interest in the capital and on the deposits of a member or past member, or deceased member and upon any dividend, bonus or profits payable to a member or past member or the estate of a de- ceased member in respect of any debt due from such member or past member or the estate of such deceased member to the society, and may set-off any sum credited or payable to a member or past member or the estate of deceased member in or towards payment of any such debt.

Charge and set- og in respect of share or contri- bution or interact oi member*. b

Share or contribu- tion or interest liable to attach-

39. Subject to the provisions of section 38, the share or contribution or interest of a member or past member or deceased member in the capital of a co-operative society .shall not be liable to attachment or sale under any decree or order of any court in respect of any debt or lia- bility incurred by such member, and a receiver under the Provincial Insolvency Act, 1920 shall not be entitled to or have any claim on such share or contribution or interest.

Kegister of members.

40. Any register or list of members or shares kept by any co-ope- rative society shall be prima facie evidence of any of the following particulars entered therein: —

(a) the date on which any person entered in such register or

list became a member;

(b) the date on which any such person ceased to be a member.

Admissi- bility of copy of entry as evidence.

41. (1) A copy of any entry in a book of a co-operative society re- gularly kept in the course of its business shall, if certified in such manner as may be prescribed, be received in any suit or legal pro- ceedings as prima facie evidence of the existence of such entry, and shall be admitted as evidence of the matters, transactions and accounts therein recorded in every case where, and to the same extent as, the ori- ginal entry itself is admissible.

(2) No officer of a co-operative society and no officer in whose office

the books of a co-operative society are deposited after liquidation shall, in any legal proceedings to which the society or the liquidator is not a party, be compelled to produce any of the society's books or docu- ments the contents of which can be proved under this section, or to appear as a witness to prove the matters, transactions and accounts therein recorded, except under order of the court or the arbitrator made for special cause.

42. Nothing in clauses (b) and (c) of sub-section (1) of section 17 of 16 of 1908.

the Indian Registration Act, 1908 shall apply to—

(1) any instrument relating to shares in a co-operative society notwithstanding that the assets of the society consist in whole or in part of immovable property; or

Exemption from compul- sory re- gistra- tion of Instru- ments.

(2) any debenture issued by any such society and not creating, declaring, assigning, limiting or extinguishing any right, title or inter- est to or in immovable property, except in so far as it entitles the holder thereof to the security afforded by a registered instrument whereby the society has mortgaged, conveyed, or otherwise transferred the whole or part of its immovable property or any interest therein to trustees upon trust for the benefit of the holders of such deben- tures; or

(3) an endorsement upon or transfer of any debenture issued by

any such society.

43. (1) The Central Government may, by notification in the Official Gazette, remit the income-tax payable in respect of the profits of any class of co-operative societies or the dividends or other payments receiv- ed by members of any class of such societies on account of profits.

Exemption from certain taxes, fees end duties.

(2) The Central Government may, by notification in the Official Gaz-

ette, remit in respect of any class of co-operative societies—

(a) the stamp duty chargeable under any law for the time being

in force in respect of any instrument executed by or >n behalf of a co-operative society or by an officer or member thereof and relating to the business of such society or any class of such instruments or in respect of any award or order made under this Act, in cases, wliere-

but for sttch remission the co-operative society, officer or member, as the case may bo, would be liable to pay such stamp duty;

(b) any fee payable under any law for the tim" being in force

relating to the registration of documents or court-foe.

(3) The Central Government may, by notification, exempt any class of co-operative societies from—

(a) land revenue;

(b) taxes on agricultural income;

(c) taxes on sale or purchase of good and

(d) taxes on professions, trades, callings and employments.

44. (I) Notwithstanding anything contained in any law for the time being in force, a member of a co-operative society may execute an agree- ment in favour of the society providing that his employer shall be com- petent to deduct from the salary or wages payable to him by the employer, such amount as may be specified in the agreement and to pay the amount so deducted to the society in satisfaction of any debt or other demand owing by the member to the society.

Deduction from salary to meet co- operative society's claim in certain easel.

4 of 1938.

(2) On the execution of such agreement, the employer shall, if so re- quired by the co-operative society by a requisition in writing and so long as the society does not intimate that the whole of such debt or demand has been paid, make the deduction in accordance with the agreement and pay the amount so deducted to the society, as if it were a part of the salary or wages payable on the day as required under the Payment of Wages Act, 1936. Such payment shall be valid discharge of the employer for his liability to pay the amount deducted.

(3) Where a requisition in writing from any society registered or deemed to be registered in any reciprocating State in respect of a member of that society, who has executed any such agreement as is referred to in aub-section (2) and who for the time being is employed in the Union ter- ritory of Delhi, is received by his employer, the requisition shall be acted upon as if it had been made by a society in Delhi and the provisions of this section shall have effect accordingly.

Explanation.—For the purpose of this sub-section, "reciprocating State" means any State or Union territory which the Lieutenant-Governor may, by notification in the Delhi Gazette, declare to be a reciprocating State.

(4) If after the receipt of a requisition made, under sub-section (2) or sub-section (3), the employer at any time fails to deduct the amount spe- cified in the requisition from the salary or wages payable to¹ the member concerned or makes default in remitting the amount deducted to the socie- ty, the society shall be entitled to recover any such amount from the employer as arrears of land revenue and the amount so due from the employer shall rank in priority in respect of the liability of the employer equal to that of the wages in arrears.

(5) Nothing contained in this section shall apply to establishment under a railway administration operating any railway as denned in clause (20) of article 366 of the Constitution.

45. Notwithstanding anything contained in any law for tho time being

In force, the Central Government may—

Other forms of State aid to co- operative societies.

(a) subscribe to tho share capital of a co-operative society; (b) give loans or make advances to co-operative societies; (c) guarantee the repayment of principal and payment of interest

on debentures issued by a co-operative society;

(d) guarantee the repayment of share capital of a co-operative society and dividends thereon at such rates as may be specified by the Central Government;

(e) guarantee the repayment of principal and payment of inter-

est on loans and advances to a co-operative society; and

(f) give financial assistance in any other form, including subsi-

dies, to any co-operativo society.

CHAPTER VI

PROPERTIES AND FUNDS OF CO-OPERATIVE SOCIETIES

46. NL> part of the funds of a co-operative society shall be divided by-

way of bonus or dividend or otherwise among its members:

Funds not to be divided by way of profit.

Provided that after at least one-fourth of the net profits in any year has been carried to the reserve fund, payments from the remainder of such profits and from any profits of past years available for distribution may be made to the members to such extent and under such conditions as may be prescribed by the rules or bye-laws.

Contribu- tion to charitable purpose.

6 of 1890.

47. Any co-operative society may, with the sanction of the Registrar, after one-fourth of the net profits in any year has been carried to the Reserve Fund, contribute an amount not exceeding five per cent, of the remaining net profits to any purpose, connected with the development of co-operative movement or charitable purpose as defined in section 20 of the Charitable Endowments Act, 1890.

48. A co-operative society shall out of its net profits in any year credit such portion of the profits not exceeding five per cent, as may be pres- cribed to the Co-operative Education Fund constituted under the rules.

Contribu- tion to co-opera- tive Edu- cation Fund.

49. (I) A co-operative society may invest or deposit its fund— Investment

of funds.

(a) in the post office savings bank; or (b) in any of the securities specified in section 20 of the Indian 2 of 1882.

Trusts Act, 1882; or

(c) in the shares or securities of any other co-operative society;

or

(d) with any bank carrying on the business of banking approved

for this purpose by the Registrar; or

(e) in any other mode permitted by the rules.

(2) Any investments or deposits made before the commiencement of this Act which would have been valid if this Act had been in force are hereby ratified and confirmed.

50. (i) A co-operative society shall not make a loan to any person other than a member:

Restric.. tiona on loans.

Provided that with the general or special sanction of the Registrar a co-operative society may make loan to another co-operative society.

(2) Notwithstanding anything contained in sub-section (i), a co-opera- tive society may make a loan to a depositor within his deposit on its secu- rity.

51, A co-operative society shall receive deposits and loans only to such extent and under such conditions as may be prescribed or as may be spe- cified in the bye-laws.

Restric- tions on borrow- ings.

52. Save as provided in sections 50 and 51, the transactions of a co- operative society with any person other than a member shall be subject to such prohibitions and restrictions, if any, as may be prescribed.

CHAPTER VII

Restric. tiona on other transac- tions with non- members.

AUDIT, INQUIRY, INSPECTION AND SURCHARGE

Audit.

53. (1) The Registrar shall audit or cause to be audited by a person authorised by him by general or special order in writing in this behalf, the accounts of every co-operative society at least once in each year.

(2) The audit under sub-section (I) shall include an examination of overdue debts, if any, the verification of the cash balance and securities, and a valuation of the assets and liabilities of the society.

(3) The person auditing the accounts of a co-operative society shall have free access to the books, accounts, papers, vouchers, stock and other property of such society and shall be allowed to verify its cash balance and securities.

(4) The directors, managers, administrators and other officers of the society shall furnish to the person auditing the accounts of a co-operative society all such information as to its transactions and working as such person may require.

(5) The Registrar or the person authorised by him under sub-section (1) to audit the accounts of a co-operative society shall have power where necessary—

(a) to summon at the time of his audit any officer, agent, servant or member of the society, past or present, who he has reason to believe can give valuable information in regard to transactions of the society or the management of its affairs; and

(b) to require the production of any book or document relating to the affairs of, or any cash or securities belonging to, the society by any officer, agent, servant, or member in possession of such books, documents, cash or securities and in the event of serious irregulari- ties discovered during audit, to take them into custody.

(6) If at the time of audit the accounts of a society are not complete, the Registrar or the person authorised by him under sub-section (1) to audit, mny cause the accounts to be written up at the expense of the society.

(7) Audit fee, if any, due from any co-operative society shall be re- coverable in the sarnie manner as is provided in section 75.

Inspection of societies.

54. The Registrar, or any person authorised by general or special order in this behalf by him, may inspect a co-operative society. For the pur- pose of inspection, the Registrar or the person so authorised by him shall at all times have access to all books, accounts, papers, vochers, securities, stock and other property of the society and may in the event of serious irregularities discovered during inspection take them Into custody and shall have power to verify the cash balance of the society and subject to the general or special order of the Registrar to call a com- mittee meeting and a general meeting. Every officer or member of the society shall furnish such information with regard to the working of the society as the Registrar or the person making such inspection may require.

Inquiry by Register r. 55. (1) The Registrar may of his own motion or on the application of a majority of the committee or of not less than one-third of the members, hold an inquiry or direct some person authorised by him by order in writ- ing in this behalf to hold an inquiry into the constitution, working and financial condition nf n co-onerative societv.

(2) The Registrar or the person authorised by him under sub-section (2) shall have the following powers, namely:—

(a) he shall at all times have, for purpose of examination, free access to the books, accounts, cash and other properties belonging to or in the custody of the society and may summon any person in pos- session or responsible for the custody of any such books, accounts, documents, securities, cash or other properties to produce the same, at any place specified by him;

(b) he may, notwithstanding any rule or bye-law specifying the period of notice for a general meeting of the society, require the offi- cers of the society to call a general meeting at such time and place at the headquarters of the society to consider such matters, as may be directed by him; and where the officers of the society refuse or fail to call such a meeting he shall have power to call it himself;

(c) he may summon any person who is reasonably believed by him to have any knowledge of the affairs of the society to appear be- fore him at any place at the headquarters of the society or any branch thereof and may examine such persons on oath.

(3) Any meeting called under clause (b) of sub-section (2) shall have all the powers of a general meeting called under the bye-laws of the so- ciety and its proceedings shall be regulated by such bye-laws.

(4) The Registrar shall communicate a brief summary of the report of the inquiry to the society, the financing institutions, if any, to which the society is affiliated, and to the persons or authority, if any, at whose in- stance the inquiry is made.

56. (2) The Registrar shall, on the application of a creditor of a co- operative society, inspect or direct some person authorised by him by order in writing in this behalf to inspect the books of the society:

Inspection of books of indebted gocietlttt,

Provided that no such inspection shall be made unless the applicant—

(a) satisfies the Registrar that the debt is a sum then due, and that he has demanded payment thereof and has not received satisfac- tion within a reasonable time; and

(b) deposits with the Registrar such sum as security for the costs of proposed inspection as the Registrar may require.

(2) The Registrar shall communicate the result of any such inspection to the creditor.

Cost of

inquiry.

57. Where an inquiry is held under section 55, or an inspection is made under section 56. the Registrar may apportion the costs, or such part of the costs, as he may think fit, between the society, the members or creditor demanding an inquiry or inspection, and the officers or former officers and the members or past members of the society:

Provided that—

(a) no order of the apportionment of the costs shall be made under this section unless the society or the person liable to pay the costs thereunder has had a reasonable opportunity of being heard;

(b) the Registrar shall state in writing under his own hand the grounds on which the costs are apportioned.

58. Any sum awarded by way of costs under section 57 may be re- Recovery of costs. covered, on application to a magistrate having jurisdiction in the place where the person from whom the money is claimable, actually and voluntarily resides or carries on business, and such magistrate shall recover the same as if it were a fine imposed by himself.

Surcharge. 59. (1) If in the course of an audit, inquiry, inspection or the winding up of a co-operative society, it is found that any person, who is or was entrusted with the organisation or management of such society or who is or has at any time been an officer or an employee of the society, has made any payment contrary to this Act, the rules or the bye-laws or has caused any deficiency in the assets of the society by breach of trust or wilful negligence or has misappropriated or fraudulently retained any money or other property belonging to such society, the Registrar may, of his own motion or on the application of the committee, liquidator or any creditor, inquire himself or direct any person authorised by him, by an order In writing in this behalf, to inquire into the conduct of such person:

Provided that no such inquiry shall be held after the expiry of six years from the date of any act or omission referred to in this sub-section.

(2) Where an inquiry is made under sub-section (1), the Registrar may, after giving the person concerned an opportunity of being heard, make an order, requiring him to repay or restore the money or property or any part thereof, with interest at such rate, or to pay contribution and costs or compensation to such extent, as the Registrar may ponsjcler jus,t and equitably

CHAPTER VIII

SETTLEMENT OF DISPUTES

60. (1) Notwithstanding anything contained in any law for the time being in force, if any dispute touching the constitution, management or the business of a co-operative society other than a dispute regarding dis- ciplinary action taken by the society or its committee against a paid em- ployee of the society arises—

Disputes which nray be referred to arbi- tration.

(a) among members, past members and persons claiming through members, past members and deceased members, or

(b) between a member, past member or person claiming through a member, past member or deceased member and the society, Its committee or any officer, agent or employee of the society or liquida- tor, past or present, or

(c) between the society or its committee and any past committee, any officer, agent or employee, or any past officer, past agent or past employee or the nominee, heirs or legal representatives of any de- ceased officer, deceased agent, or deceased employee of the society, or

(d) between the society and any other co-operative society, between a 3ociety and liquidator of another society or between the liquidator of one society and the liquidator of another society,

such disputes shall be referred to the Registrar for decision and no court shall have jurisdiction to entertain any suit or other proceedings in res- pect of such dispute.

(2) For the purposes of sub-section (1), the following shall be deemed to be disputes touching the constitution, management or the business of a co-operative society, namely: —

(a) a claim by the society for any debt or demand due to It from a member or the nominee, heirs or legal representatives of a deceased member, whether such debt or demand be admitted or not;

(b) a claim by a surety against the principal debtor where the society has recovered from the surety any amount in respect of any debt or demand due to it from the principal debtor as a result of the default of the principal debtor, whether such debt or demand is ad- mitted or not;

(c) any dispute arising in connection with the election of any officer of a society other than a society notified under sub-section (2) of section 31.

(3) If any question arises whether a dispute referred to the Registrar under this section is or is not a dispute touching the constitution, manage- ment or the business of a co-operative society, the decision thereon of the Registrar shall be final and shall not be called in question in any court.

61. (1) The Registrar may, on receipt of the reference of dispute under section 60,—

(a) decide the dispute himself, or

Reference of dis- putes to arbitra- tion.

(b) transfer it for disposal to any person who has been invested t>y the Lieutenant-Governor with powers in that behalf, or

(c) refer it for disposal to one arbitrator.

(2) The Registrar may withdraw any reference transferred under clause (b) of sub-section (2) or referred under clause (c) of that sub- section and decide it himself or refer the same to another arbitrator for decision.

(3) The Registrar or any other person to whom a dispute is referred for decision under this section may, pending the decision of the dispute, make such interlocutory orders as he may deem necessary in the interest of justice.

Power at financing bank to proceed.

62. (1) If a co-operative society is unable to pay its debts to a financ- ing bank by reason of its members committing default in the payment of the moneys due by them, the financing bank may direct the committee of such a society to proceed against such members under section 60 and if the committee fails to do so within a period of ninety days from the date of receipt of such direction, the financing bank itself may proceed against such members in which case the provisions of this Act, the rules or the bye-laws shall apply as if all references to the society or its com- mittee in the said provisions were references to the financing bank.

(2) Where a financing bank has obtained a decree or award against a society in respect of moneys due to it from the society, the financing bank may proceed to recover such moneys firstly from the assets of the society and secondly from the members to the extent of their debts due to the society.

CHAPTER IX

W I N D I NG UP OF Co-GpERAfiVfi SOCIETIES

Winding up of co- operative societies.

63. (1) If the Registrar, after an inquiry has been held under section 55, or an inspection has been made under section 56, or on receipt of an application made by not less than three-fourths of the members of a co- operative society, is of opinion that the society ought to be wound up, he may issue an order directing it to be wound up.

(2) The Registrar may of his own motion make an order directing the winding up of a co-operative society—

(a) where it is a condition of the registration of the society that the society shall consist of at least ten members and the number of members has been reduced to less than ten, or

(b) where the co-operative society has not commenced working or has ceased to function in accordance with co-operative principles.

(3) The Registrar may cancel an order for the winding Up of a co- operative society, at any time, in any case where, in his opinion, the society should continue to exist.

(4) A copy of such order shall be communicated by registered post t6 the Society and to the financing institutions, if any, of which the society is a member.

(5) Notwithstanding anything contained in this section no co-opera- tive bank shall be Wound up except With the previous sanction in writing Of the Reserve Bank,

47 of 1061.

64. Notwithstanding anything to the contrary contained in this Act, the Registrar shall make an order for winding up of a co-operative bank, if so required by the Reserve Bank in the circumstances mentioned in section 13D of the Deposit Insurance Corporation Act, 1961.

Winding up of co- operative banks at the direction of the Heserve Bank.

47 of 1981.

Reimbur- sement to the Deposit Insurance Corpora- tion by the liquida- tors.

65. Where a co-operative bank being an insured bank within the mean- ing of the Deposit Insurance Corporation Act, 1961, is wound up, or taken into liquidation, and the Deposit Insurance Corporation has become liable to the depositors of the insured bank under sub-section (1) of section 16 of that Act, the Deposit Insurance Corporation shall be reimbursed by the liquidator or such other person in the circumstances to the extent and in the manner provided in section 21 of the Deposit Insurance Cor- poration Act, 1961.

Liqui- dator.

66. (1) Whore the Registrar has made an order under section 63 for the winding up of a co-operative society, the Registrar may appoint a liquidator for the purpose and fix his remuneration.

(2) A liquidator shall, on appointment, take into his custody or under his control all the property, effects and actionable claims to which the society is or appears to be entitled and shall take such steps as he may deem necessary or expedient, to prevent loss or deterioration of, or damage to, such property, effects and claims. He may carry on the business of the society so far as may be necessary with the previous approval of the Registrar.

(3) Where an appeal is preferred under section 76, an order of wind- ing up of a co-operative society made under section 63 shall not operate thereafter until the order is confirmed in appeal:

Provided that the liquidator shall continue to have custody or control of the property, effects and actionable claims mentioned in sub-section (2) and have authority to take the steps referred to in that sub-section.

(4) Where an order of winding up of a co-operative society is set aside in appeal, the property, effects and actionable claims oi the society shall revest in the society.

Powers of liquida- tor.

07. (i) Subject to any rules made in this behalf, the whole of the assets of a co-operative society, in respect of which an order for winding up has been made, shall vest in the liquidator appointed under section 66 from the date on which the order takes effect and the liquidator shall have power to realise such assets by sale or otherwise.

(2) Such liquidator shall also have power, subject to the control of

the Registrar,—

(a) to institute and defend suits and other legal proceedings on

behalf of the co-operative society by the name of his office;

(b) to determine from time to time the contribution (including debts due and costs of liquidation) to be made or remaining to be made by the members or past members or by the estates or nominees, heirs or legal representatives of deceased members or by any officer* or former officers, to the assets of the society;

(c) to investigate all claims against the co-operative society and subject to the provisions of this Act, to decide questions of priority- arising between claimants;

(d) to pay claims against the co-operative society including Interest up to the date of winding up according to their respective priorities, if any, in full or rateably, as the assets of the society may permit; the surplus, if any, remaining after payment of the claims being applied in payment of interest from the date of such order of winding up at a rate fixed by him but not exceeding the contract rate in any case;

(e) to determine by what persons and in what proportions the

costs of the liquidation arc to be borne;

(f) to determine whether any person is a member, past mem-

ber or noxm'nee of a deceased member;

(gf) to give such directions in regard to the collection and distri- bution of the assets of the society as may appear to him to be neces- sary for winding up the affairs of the society;

(h) to carry on the business of the society so far as may be necessary for the beneficial winding up of the same;

(i) to make any compromise or arrangement with creditors or persons claiming to be creditors or having or alleging to have any claim, present or future, whereby the society may be rendered liable;

(j) to make any compromise or arrangement with any person between whom and the society there exists any dispute and to refer any such dispute to arbitration;

(Jc) after consulting the members of the society, to dispose of the surplus, if any, remaining after paying the claims against the society, in such manner as may be prescribed; and

(I) to compromise all calls or liabilities to calls and debts and liabilities capable of resulting in debts, and all claims, present or future, certain or contingent, subsisting or supposed to subsist bet- ween the society and a contributory or alleged contributory or other debtor or person apprehending liability to the co-operative society and all questions in any way relating to or affecting the assets or the winding up of the society on such terms as may be agreed and take any security for the discharge of any such call, liability, debt or claim and give a complete discharge in respect thereof.

(3) When the affairs of a co-operative society have been wound up, the liquidator shall make a report in the Registrar and deposit the re- cords of the society in such place as the Registrar may direct.

6 of 1920.

68. Notwithstanding anything contained in the Provincial Insolvency Act, 1920, the contribution assessed by a liquidator shall rank next to debts due to the Government or to any local authority in order of priority in insolvencv proceedings.

Priority of contri- butions assessed by liqui- dator.

69. (1) The Registrar may alter considering the report of the liqui- dator made to him under sub-section (3) of section 67 order the regis- tration of the co-operative society to be cancelled.

(2) An order passed under .sub-section (1) shall be communicated by registered post to the president of the society and to the financing insti- tutions, if any, of which the society was a member.

Power of Registrar to cancel registra- tion of a co-ope- rative society.

CHAPTER X

EXECUTION OF AWARDS, DKCREES, ORDERS AND DECISIONS

Enforce- ment of charge.

70. Notwithstanding anything contained in Chapter VIII or any other law for the time being in force, but without prejudice to any other mode of recovery provided in this Act, the Registrar or any person subordinate to him empowered by the Registrar in this behalf may, on the applica- tion of a co-operative society, make an order directing the payment of any debt or outstanding demand due to the society by any member or past or deceased member, by sale of the property or any interest therein, which is subject to a charge under section 36:

Provided that no order shall be made under this section unless the member, past member or the nominee, heir or legal representative of the deceased member, has been served with a notice in the manner pres- cribed.

71. Every decision, award or order duly passed by the Registrar or Execution of orders, etc. arbitrator or Tribunal under sections 29, 30, 59, 61, 70, 76, 78 and 79 res- pectively, shall, if not carried out,—

(a) on a certificate signed by the Registrar or any person autho- rised by him in this behalf, be deemed to be a decree of a civil court and shall be executed in the same manner as decree of such court; or

(b) be executed according to the provisions of the Land Reve- nue Code and the rules thereunder for the time being in force for the recovery of arrears of land revenue;

(c) be executed by the Registrar or any other person subordi- nate to him empowered by the Registrar in this behalf, by attach- ment and sale or by sale without attachment of any property of the person or a co-operative society against whom the order, decision or award has been obtained or passed.

72. The orders of the liquidator under section 67 shall be executed according to the Act and under the rules for the time being in force for the recovery of arrears of land revenue.

Execution of orders of liqui- dator.

73. Where the Registrar is satisfied that a party to any reference made to him under section 60 with intent to defeat or delay the execution of any decision that may bo passed thereon is about to—

Attach- ment before award.

(a) dispose of the whole or any part of the property; or

(b) remove the whole or any part of the property from the

local limits of the jurisdiction of the Registrar,

the Registrar may, unless adequate security is furnished, direct the conditional attachment of the said property or such part thereof as he

thinks necessary. Such attachment shall be executed by a civil court having jurisdiction in the same way as an attachment order passed by itself and shall have the same effect as such an order:

Provided that the powers of the Registrar under this section shall not be delegated to any officer below such rank as may be prescribed.

Registrar ©r person empower- ed, by him to be civil court for certain purposes.

36oU963.

74. The Registrar or any person empowered by him in this behalf shall be deemed, when exercising any powers under this Act for the re- covery of any amount by the attachment and sale or by sale without attachment of any property, or when passing any orders on any appli- cation made to him for such! recovery or for taking a step-in-aid of such recovery, to be civil court for the purposes of article 136 of the Schedule to the Limitation Act, 1963.

Recovery of sums due to Govern- ment.

75. (1) All sums due from a co-operative society, or from an officer or member or past member of a co-operative society as such, to Govern- ment, including any costs awarded to Government under finy provision of this Act, may on a certificate issued by the Registrar in this behalf, be recovered in the same manner as arrears of land revenue.

(2) Sums due from a co-operative society to Government and recover- able under sub-section (1) may be recovered, firstly, from the property of the society, secondly, in the case of a society the liability of the mem- bers of which is limited, from the members, past members or the estates of deceased members, subject to the Umit of their liability, and, thirdly, In the case of other societies, from the members, past members or the estates of the deceased members:

Provided that the liability of past members and the estates of deceas- ed members shall In all cases be subject to the provisions of section 27.

CHAPTER XI

APPEALS AND REVISION

Appeals.

76. (I) Subject to the provisions of section 77, an appenT shall lie under this section against—

(a) an order of the Registrar made under sub-section (2) of section 9 refusing to register a society;

(b) an order of the Registrar made under sub-section (4) of sec- tion 11 refusing to register an amendment of the bye-laws of a co- operative society;

(c) an order of the Registrar made under sub-section (1) of section 16;

(d) a decision of a co-operative society refusing to admit any person as a member of the society who is otherwise duly qualified for membership under the bye-laws of the society;

(e) a decision of a co-operative society expelling any of its mem- bers;

(f) an order of the Registrar removing the committee of a co- operative society made under section 32;

(g) an order made by the Registrar under section 57 apportion- ing the costs of an enquiry held under section 55 or an inspection made under section 56;

(h) any order of surcharge under section 59;

(i) any decision or award made under section 61;

(j) an order made by the Registrar under section 63 directing the winding up of a co-operative society;

(7c) any order made by the liquidator of a co-operative society in exercise of the powers conferred on him by section 67;

(I) any order made under section 73.

(2) An appeal against any decision or order under sub-section (1) shall be made within sixty days from the date of the decision or order—

(a) if the decision or order falls under clause (y), (h), (i) or (I) of sub-section (1), to the Tribunal;

(b) in any other case, to the Lieutenant-Governor or the Regis- trar according as the decision or order was made by the Registrar or any other person,

(3) No appeal shall lie under this section from any decision or order made by the Registrar in appeal.

77, Notwithstanding anything contained in this Act, where with the previous sanction in writing or on requisition of the Reserve Bank,—

(i) a co-operative bank is being wound up; or

No ap- peal or revision in certain cases.

(ii) In respect of which a scheme of amalgamation or reorgani- sation is given effect to; or

(Hi) in respect of which an order for the supersession of the committee and the appointment of an administrator therefor has been made,

no appeal, revision or review there-against shall lie or be permissible, and the sanction or requisition of the Reserve Bank shall not be liable to be called in question.

78. (1) The Lieutenant-Governor shall constitute a Tribunal to be

called the Delhi Co-operative Tribunal to exercise the functions confer-

red on the Tribunal by or under this Act.

Delhi Co- operative Tribunal,

(2) The Tribunal shall consist of not more than three members pos- sessing such qualifications as may be prescribed.

(3) Any vacancy in the membership of the Tribunal shall be filled by the Lieutenant-Governor.

(4) Subject to the previous approval of the Lieutenant-Governor, the Tribunal shall frame regulations consistent with the provisions of this Act and the rules made thereunder, for regulating its procedure and the disposal of its business.

(5) The regulations made under sub-section (4) shrill be published by the Lieutenant-Governor in the Delhi Gazette.

(6) The Tribunal may call for and examine the record of any proceed- ings, in which an appeal lies to it, for the purpose of satisfying itself as to the legality or propriety of any decision or order passed and if in any case it shall appeal to the Tribunal that any such decision or order should be modified, annulled or reversed, the Tribunal may pass such order thereon as it may deem fit.

(7) An order passed in appeal under section 76 or in revision under sub-section (6) of this section or in review under section 79 by the Tri- bunal shall be final and conclusive, and shall not be called in question in any civil or revenue court.

5 of19O" Explanation.—The Tribunal hearing an appeal under this Act shall exercise all the powers conferred upon an appellate court by section 97 of, and Order XLI of the First Schedule to, the Code of Civil Procedure, 1908.

Review of orders oJ! Tribunal,

79. (1) The Tribunal may either on the application of the Registrar, or on the application of any party interested, review its own order in any case, and pass in reference thereto such order as it thinks just:

Provided that no such application made by the party shall be enter- tained unless the Tribunal is satisfied that there has been the discovery of new and important matter of evidence, which after the exercise of due diligence was not within the knowledge of the applicant or could not bA produced by him at the time when its order was made or that there has been some mistake or error apparent on the face of the record, or for any other sufficient reason:

Provided further that no such order .shall be varied or revised unless notice has been given to the parties interested to appear and be heard in support of such order.

(2) An application for review under sub-section (1) by any party shall be made within ninety days from the date of communication of the order of the Tribunal.

Revision.

80. Subject to the provisions of section 77, the Lieutenant-Governor may, suo motu or on the application of a party to a reference, call for and examine the record of any proceedings in which no appeal lies to the Lieutenant-Governor under section 76 (not being any proceedings in which an appeal lies to the Tribunal) for the purpose of satisfying him- self as to the legality and propriety of any decision or order passed and if in any case it shall appear to him that any such decision or order should be modified, annulled or revised, he may pass such order thereon as he may deem fit.

Interlocu- tory orders.

81. Where an appeal is made under section 76 or where the Tribunal or Lieutenant-Governor calls for the record of a case under section 78 or section 80, the appellate authority or the Tribunal or Lieutenant- Governor, as the case m ay be, may, in order to prevent the ends of justice being defeated, make such interlocutory order, including an order of stay, pending the decision of the appeal or revision as such authority or the Tribunal or Lieutenant-Governor may deem fit.

CHAPTER XII

OFFENCES AND PENALTIES

Offences.

82. (I) Any person other than a co-operative society carrying on busi- ness under any name or title of which the word "co-operative", or its equivalent in any Indian language, is part, without the sanction of the Lieutenant-Governor shall be punishable with fine which may extend to two hundred rupees and in the case of a continuing breach with a further fine which may extend to five hundred rupees for every day during which the breach is continued after conviction for the first such breach.

(2) Any member or past member or the nominee, heir or legal repre-

sentative of a deceased member of a co-operative society who contravenes the provisions of sections 36 and 37 by disposing of any property in res- pect of which the society js entitled to have a first charge under that sec- tion or do any other act to the prejudice of such claim, shall be punishable with fine which may extend to five hundred rupees.

(3) A co-operative society or an officer or member thereof wilfully making a false reuturn or furnishing false information, or any person wil- fully or without any reasonable excuse disobeying any summons, requi- sition or lawful written order issued under the provisions of this Act or wilfully not furnishing any information required from him by a person authorised in this behalf under the provisions of this Act, shall be punish- able with fine which may extend to two hundred rupees.

(4) Any employer who, without sufficient cause, fails to pay to a co- operative society the amount deducted by him under section 44 within a period of fourteen days from the date on which such deduction is made shall, without prejudice to any action that may be taken against him under any law for the time being in force, be punishable with fine which may extend to five hundred rupees.

(5) Any officer or custodian who wilfully fails to hand over custody of books, records, cash, security and other property belonging to a co- operative society of which he is an officer or custodian, to a person entitl- ed under section 33, 53, 54, 55 or 66 shall be punishable with fine which may extend to two hundred rupees and in the case of a continuing breach with a further fine which may extend to five hundred rupees for every day during which the breach is continued after conviction for the first such breach.

(6) Any person who fraudulently acquires or abets in the acquisition of any such property which is subject to a charge under sections 36 and 37 shall be punishable? with fine which may extend to two hundred rupees.

83. (1) No court inferior to that of a magistrate of the first class shall

try any offence under this Act.

Cogni- zance of offence.

(2) No prosecution shall be instituted under this Act without the pre- vious sanction of the Registrar and such Sanction shall not be given with- out giving to the person concerned a reasonable opportunity to represent his case.

Address of socie- ties.

84. Every co-operative society shall have an address registered in the manner prescribed to which all notices and communications may be sent, and shall send to the Kegistrar notice of every change thereof within thirty days of such change.

85. Every co-operative society shall keep a copy of this Act, the rules and its bye-laws and also a list of its members, open to inspection free of charge at all reasonable times at the registered address of the society.

Copy of Act, rules and bye- laws, etc,, to toe open to ins- pection,

86. No person other than a co-operative society shall trade or carry on business under any name or title of which the word "co-operative" or its equivalent in any Indian language is part:

Prohibi- tion against the use of the word ''co-opera- tive".

2 of 1912.

Provided that nothing in this section shall apply to the use by any person or his successor-in-interest of any name or title under which he carried on business at the date on which the Co-operative Societies Act, 1912, came into operation,

87. Notwithstanding anything contained in this Act, the Lieutenant- Governor may, by general or special order and subject to such conditions, if any, as he may impose, exempt any society or class of societies from any of the requirements of this Act as to registration.

Power to exempt so- cieties from con- ditions as to regis- tration.

881 The Lieutenant^Governor may, by general or special order to be published in the Delhi Gazette, exempt any co-operative society or any class of co-operative societies from any of the provisions of this Act, or may direct that such provisions shall apply to such societies or class of societies with such modifications as may be specified in the order.

Power to exempt co- operative societies from pro- visions of the Act.

89, Any person appointed as liquidator under the provisions of this

45 of 1860.

Act or the rules shall be deemed to be a public servant within the mean- ing of section 21 of the Indian Penal Code.

Liquidator lobe public servant.

Notice necessary in suits.

90. No suit shall be instituted against a co-operative society or any of its officers in respect of any act touching the business of the society until the expiration of three months next after notice in writing has been delivered to the Registrar or left at his office, stating the cause of action, the name, description and place of residence of the plaintiff and the relief which he claims, and the plaint shall contain a statement that such notice has been so delivered or left.

1 of 1056.

91. The provisions of the Companies Act, 1956, shall not apply to co-

operative societies.

Companies Act not to apply.

10 of 1904. 2 of 1912. Bom. 7 of Saving of existing societies.

92. (1) Every society now existing which has been registered under the Co-operative Credit Societies Act, 1904 or under the Co-operative Socie- ties Act, 1912, or under the. Bombay Co-operative Societies Act, 1925 as in force in the Union territory of Delhi, shall be deemed to be registered under the corresponding provisions of this Act, and its bye-laws shall, so far as the. same are not inconsistent with the express provisions of this Act, continue in force until altered or rescinded.

(2) All appointments, rules and orders made, notifications and notices Issued and suits and other proceedings instituted under the said Acts

shall, so far as they are consistent with the provisions of this Act, be deemed to have been respectively made, issued and instituted under this Act, save that an order made cancelling the registration of a society shall be deemed, unless the society has already been finally liquidated, as an order issued under section 63 for its being wound up.

"J. (1) Save as provided in this Act, no civil or revenue court shall have any jurisdiction in respect of—

(a) the registration of a co-operative society or its bye-laws or of

Bar of jurisdic- tion of courts.

an amendment of a bye-law;

(b) the removal of a committee;

(c) any dispute required under section 60 to be referred to the Registrar; and

(d) any matter concerning the winding up and the dissolution of

a co-operative society.

(2) While a co-operative society is being wound up, no suit or other legal proceedings relating to the business of such society shall be proceed- ed with or instituted against, the liquidator as such or against the society or any member thereof, except by leave ol the Registrar and subject to such terms as he may impose,

(3) Save as provided in this Act, no order, decision or award made under this Act shall be questioned in any court on any ground whatsoever.

Powers of civil court.

94. (2) In exercising the functions conferred on him by or under this Act, the Registrar, the arbitrator or any other person deciding a dispute under section 61 and the liquidator of a co-operative society or person entitled to audit, inspect or hold an inquiry and the Tribunal, shall have all the powers of a civil court, while trying a suit, under the Code of Civil Procedure, 1908, in respect of the following matters, namely:—

6 of 1908.

(a) summoning and enforcing the attendance of any person and

examining him on oath;

(b) requiring the discovery and production of any document; (c) proof of facts by affidavits; and (d) issuing commissions for examination of witnesses.

(2) In the case of an affidavit, any officer appointed by the Registrar,

the arbitrator or any other person deciding a dispute, and the liquidator or the Tribunal, as the case may be, may administer the oath to the deponent.

Indem- nity.

95. No suit, prosecution or other legal proceedings shall He. against the Registrar or any person subordinate to him. or acting on his authority in respect of anything in good faith done or purporting to have been done under this Act.

Qualifl- tlon

remuna- cation and 96. (1) The Lieutenant-Governor shall, as soon as may be after the commencement of this Act, constitute a common service comprising of officers and other employees of different classes of co-operative societies and shall determine the number and designation of such officers and other employees.

other condi- tions of service

of

(2) The Lieutenant-Governor shall make rules regulating the qualifi- cations, remuneration, allowances, recruitment and other conditions of service of such officers and other employees of the co-operative societies.

emplo- yees of co-ope- rative societies,

Ru\"*

97. (2) The Lieutenant-Governor may, for any co-operative society or class of co-operative societies, make rules to carry out the purposes of this Act.

(2) In particular, and without prejudice to the generality of the fore- going power, such rules may provide; for all or any of the following matters, namely: —

(i) the maximum number of shares or portion of the capital of a co-operative society which may, subject to the provisions of section 6, be held by a member;

(ii) the form to be used and the conditions to be complied with in the making of applications for the registration of a society and the procedure in the matter of such applications;

(Hi) the procedure and conditions for change in the form and

extent of the liability of a co-operative society;

(iv) the matters in respect of which the society may or shall make bye-laws and for the procedure to be followed in making, alter- ing and abrogating bye-laws and the conditions to be satisfied prior to such making, alteration or abrogation;

(v) the conditions to be complied with by persons applying for admission or admitted as members, for the election and admission of members, and for the payment to be made and the interest to be acquired before the exercise of the right of membership;

(vi) the manner in which funds may be raised by means of shares

and debentures or otherwise;

(vii) for general meeting of the members and for the procedure

at such meetings and the powers to be exercised by such meetings;

(viii) the prohibitions and restrictions subject to which societies

may transact business with persons who are not members;

(ix) the proportion of individuals and societies in the constitution of the committee of management and the general body of a co-opera- tive society of which another co-operative society is a member;

(x) subject to the provisions of section 31, the election and nomi- nation of members of committees, the appointment or election of offi- cers and the suspension and removal of the members and other offi- cers, and for the powers to be exercised and the duties to be perform- ed by the committees and other officers;

(xi) the area of agricultural land, the conditions required to' be

fulfilled for the purpose of sub-section (6) of section 31;

(xii) the appointment and regulation of work entrusted to person

or persons replacing the committee in pursuance of section 32;

(rein) prohibiting a co-operative society from electing a default-

ing member on its committee or to be its representative;

(xiv) the accounts and books to be kept by a co-operative society and the audit of such accounts and the charges, if any, to be made for such audit, and for the periodical publication of a balance-sheet showing the assets and liabilities of a co-operative society;

(xv) the returns to be submitted by a co-operative society to the Registrar, the persons by whom and the form in which such returns shall be submitted and in case of failure to submit any such returns for the levy of expenses of preparing it;

(xvi) the persons by whom and the form in which copies of the entries in books of societies may be certified and for the charges to be levied for the supply of such copies;

(xvii) the formation and maintenance of a register of members and where the liability of the members is limited by shares, of a register of shares;

(xviu) the appointment of an arbitrator to decide disputes;

(xix) the procedure to be followed in proceedings before the Registrar, arbitrator or other persons deciding disputes including the appointment of a guardian for a party to the dispute who is a minor or who¹, by reason of unsoundness of mind or mental infirmity, is incapable of protecting his interests, and the levy of the expenses relating to such proceedings;

(xx) the withdrawal and expulsion of members and for the pay- ments, if any, to be made to members who withdraw or are expelled and for the liability of past members and of the estates of deceased members;

(xxi) the mode in which the value of * deceased member's share or interest shall be ascertained and for the nomination of a person to whom such share or interest may be paid or transferred;

(xxii) the payments to be made and conditions to be complied with by members applying for loans, the period for which any loans may be made and the maximum amount which may be lent, to any member;

(xxiii) the formation and maintenance of reserve funds and other funds and the objects to which such funds may be applied, and for the investment of any funds under the control of a co-operative society;

(xxiv) the extent to which a co-operative society may limit the number of its members;

(xxv) the conditions under which profits may be distributed to the members of a co-operative society with unlimited liability, and the maximum rate of dividend which may be paid by co-operative societies;

(xxvi) the calculation and writing off of bad debts by co-opera- tive societies;

(sexvii) the procedure to be followed by a liquidtor appointed under section 66 in .respect of provisions of section 07;

(xxviii) the procedure to be followed in presenting and dispos- ing of appeals under this Act;

(xxicc) the form of orders referred to in sections 71 and 72;

(xxx) qualifications of the members of the Tribunal;

(xxxi) the issue and service of processes and for proof of service thereof;

(xxxii) the manner of effecting attachment;

(xxxiii) the custody, preservation and sale of property under attachment;

(xxxiv) the investigation of claims by persons other than the defaulter to any right or interest in the attached property, and for the postponement of the sale pending such investigation;

(xxxv) the immediate sale of perishable articles;

(xxxvi) the inspection of documents in the office of the Regis- trar or of any other officer or authority and the levy of fees for granting certified copies of the same;

(xxxvii) the terms and conditions on which the Central Gov- ernment may make share-capital contribution or give assistance, financial or other, to societies and the terms and conditions on which the Central Government may guarantee the payment of the princi- pal or interest on debentures issued by societies or loans raised by them;

(xxxvili) the manner in which funds may be raised by a society or a class of societies by means of shares or debentures or otherwise and the quantum of funds so raised;

(xxxix) for giving reasonable notice of the charge under sec- tions 36 and 37;

(xl) qualifications, remuneration, allowances and recruitment and the conditions of service of officers and other employees of a society or class of societies;

(xli) the method of communicating or publishing any order, decision or award required to be communicated or published under this Act or the rules.

(3) Every rule made under this section shall be laid as soon as may be after it is made before each House of Parliament while it is in ses- sion lor a total period of thirty days which may be comprised in one session or in two successive sessions, and if before the expiry of the ses- sion in which it is so laid or the session immediately following, both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, the rule shall thereafter have effect only in such modified form or be of no effect, as the case may be, so, however, that any such modification or annulment shall be without prejudice to the validity of anything previously done under that rule.

Bom. 7 of 1029.

98. On the day on which the Delhi Co-operative Societies Act. 1970 comes into force, the Bombay Co-operative Societies Act, 1925 fts in force In the Union territory of Delhi shall stand repealed:

•Repeal and savings.

Provided that the repeal shall not affect—

(a) the previous operation of the Act so repealed or anything duly done or suffered thereunder; or

(b) any right, privilege, obligation or liability acquired, accrued or incurred under the Act so repealed; or

(c) any penalty, forfeiture or punishment incurred in respect of any offence committed against the Act so repealed; or

(d) any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as aforesaid,

and any such investigation, legal proceeding or remedy may be Institut- ed, continued or enforced, and any such penalty, forfeiture or punish- ment may be imposed as if that Act had not been repealed.

STATEMENT OF OBJECTS AND REASONS

The Bombay Co-operative Societies Act, 1925 was extended to the Union territory of Delhi in 1949. This Act, which was in force in the States of Maharashtra and Gujarat has since been repealed in those Sta- tes and replaced by new Acts passed by their respective Legislatures. In view of the expansion and diversification of activities of co-operatives, it is considered necessary to replace the existing co-operative legislation by the present Bill to meet the requirements of co-operative development in the Union territory of Delhi.

2. The salient features of the Bill are that it provides for obviating de- lays in the registration of co-operative societies, open membership, ex- peditious amalgamation and division of co-operative societies, delegation of powers of the Registrar to federal societies, State partnership in co- operatives and contribution by co-operatives to a Co-operative Education Fund. Provision has also been made for appealing against refusal of society to admit a person as its member and against orders of a society expelling a member. To facilitate mobilisation of deposits by co-opera- tive banks, an enabling provision for the extension of the deposit insur- ance scheme to co-operative banks has been included in the Bill.

3. Following provisions have also been incorporated in the Bill for curbing the growth of vested interests in co-operatives as recommended by the Conference of Chief Ministers and State Ministers of Co-operation held in June, 1908.

(a) Persons like money-lenders, traders and other middle-men whose interests conflict with the objects of co-operatives are to be excluded from membership of co-operative.

(b) Two seats-one each for Scheduled Castes and small farm- ers—are to be reserved on the board of management of certain cate- gories of societies.

(c) No individual is to hold office for more than 2 terms of 3 years each in the same institution.

(d) No individual is to hold office simultaneously in more than three institutions.

(e) The loans given to members of the managing committee of a society should be reviewed at the general body meetings of the society.

(f) Elections in bigger co-operative institutions will be conduct- ed through an independent authority.

(g) Constitution of common service of personnel of co-opera- tives-

ANNASAHEB P. SHINDE.

NEW DELHI;

The 13th February, 1970.

FINANCIAL MEMORANDUM

The Delhi Co-operative Societies BiU, 1970 seeks to replace the Bom- bay Co-operative Societies Act, 1925 in its application to the Union terri- tory of Delhi. Excepting for a small additional expenditure that may arise under clause 31 of the Bill, no other new expenditure is contem- plated by reason merely oJ! the passing of the Bill.

2. Clauses 3, 53, 54, 55, 56, 61 and 66 of the Delhi Co-operatice Socie- ties Bill, 1970 which provide for the appointment of Registrar and other officers, audit, inspection and inquiry, appointment of arbitrators and liquidators by the Registrar, will not entail any additional expenditure as the Registrar's organisation is already undertaking these responsibi- lities in terms of the existing Co-operative Societies Act in force in the Union territory of Delhi.

3. Clause 31 of the Bill lays down that the election of the members of the Committees of such co-operative societies or class of co-operative societies, as the Lieutenant-Governor may, by general or general order, notify, shall be held under the superintendence, direction and control of returning officers to be appointed in this behalf. The exact amount of expenditure involved on this cannot be assessed at this stage, The addi- tional expenditure may, however, be of the order of rupees 25,000 a year-

4. Clause 43 provides for remission of certain taxes including income- tax, stamp duty, court fee, registration fee, land revenue, taxes on agri- cultural income, taxes on sales or purchase of goods and taxes on profes- sion, trades, callings and employments. The financial liability to Gov- ernment as a result of the application of this enabling provision will de- pend upon the nature and the extent of exemption given from time to time. The Co-operative Societies Act in force in the Union territory of Delhi already contains an enabling provision to exempt co-operatives from income-tax, stamp duty, court fee and registration fee.

5. Clause 45 of the Bill provides for financial assistance to co-opera- tives in the form of share capital, loans and advances, subsidies and gua- rantees. The system envisased in this provision is already in vogue and no additional expenditure to the Government is envisaged.

6. Clause 78 of the Bill provides for the constitution of a Tribunal on the lines of section 63A of the Co-operative Societies Act in force in the territory and therefore no additional expenditure is involved.

7. The budget provision of the Co-operative Department of the Union territory for the current financial year 1969-70 is of the order of rupees 15.50 lakhs as revenue expenditure and rupees 16.50 lakhs as capital ex- penditure for loans and share participation. Only a small additional ex- penditure is contemplated by reason merely of the passing of this Bill.

8. This Bill does not involve any non-recurring expenditure.

MEMORANDUM REGARDING DELEGATED LEGISLATION

Clause 78 of the Delhi Co-operative Societies Bill, 1970 empowers the Delhi Co-operative Tribunal, to be constituted under the said clause, to frame regulations, with the previous approval of the Lieutenant-Governor for the purpose of regulating its procedure and the disposal of its busi- ness. Further, clause 97 of the Bill empowers the Lieutenant-Governor to make rules to carry out the purposes of the Act. The various matters with respect to which rules may be so made are specified in sub-clause (2) of clause 97 of the Bill. It has been provided in sub-clause (3) of the said clause 97 that all rules so made shall be laid before each House of Parliament.

2. The matters in respect of which regulations are to be framed or rules are to be made, are matters of procedure or detail and the delega- tion of legislative power is thus of a normal character.

BILL NO. 8 OF 1970

A BUI further to amend the Representation of the People Act, 1951.

BE it enacted by Parliament in the Twenty-first Year of the Republic

of India as follows:—•

1. (1) This Act may be called the Representation of the People

(Amendment) Act, 3970.

Short title and com- mencement,

(2) It shall eorne into force at once or on such date retrospectively or otherwise as the Central Government may, by notification in the Official Gazette, appoint.

2. Alter section 7 of the Representation of the People Act, 1951, the

following new section shall be inserted, namely: —

Insertion of new- section 7A.

"7A. A person shall be disqualified for being chosen as, and for being, a member of the House of the People or the Legislative Assembly of a State, if his action or conduct as a Minister has caused loss to the Union or State Exchequer or he has been found guilty by a court of law or a commission of inquiry of any kind of corrupt practice, as the c^.se may be."

Disquali- fication f oi causing loss to the Ex- chequer in hia conduct as a Minis- ter or it found guilty of corrupt practice.

STATEMENT OF OBJECTS AND REASONS

The recommendations made by the Mudholkar Commission need a careful consideration because of their intrinsic merit inasmuch as they have been made in order to ensure high standards of rectitude in public service. To achieve this aim it is necessary to introduce a provision to disqualify a person for being a member of the House of People or Legislative Assembly of a State in case the said member during his tenure as a Minister is held by hist act and conduct to have caused loss to the Union or the State Exchequer or had been found guilty by a court of law or a commission of inquiry of any kind of corrupt practice. Such a provision would go a long way to eliminate the instances of abuse of power, arbitrary action and favouritism. With this object in view necessary amendments are desirable in the Representation of the People Act, 1951.

Hence the Bill.

NEW DELHI;

The 18th December, 1969.

OM PRAKASH TYAGI.

XJ-LUJJ -i 1 * - *. £4X \JI: d-O 1 \j

A Bill further to amend the Constitution of India.

BE it enacted by Parliament in the Twenty-flrst Year of the Republic

of India as follows: —

1. This Act may be called the Constitution (Amendment) Act, 1970. Short

title.

5 2. For article 16 of the Constitution, the following article shall be sub-

stituted, namely: —

Substitu- tion of article 16.

Protection for back- ward class and region.

"16 (1) There shall be equality of opportunity for all citizens in matters relating to employment or appointment to any office under the State, subject to the principles set out in clause (3) of this article. (2) No citizen shall, on grounds only of religion, race, caste, sex, descent, place of birth, residence or any of them, be ineligible for, or discriminated against, In respect of any employment or office under the State except on the basis set out in clause (3) of this article.

(3) (a) In making appointments to services, including Class I, II, III, IV, and posts, gazetted or non-gazetted, under the Union or a !5 State, 60 percent of these appointments shall be made from among

the backward class of citizens on the basis of competition confined to the members of this class and the remaining 40 percent oi the posts shall be filled up on the basis of competition open to all, including the members of the backward class:

Provided that in all future appointments to these posts and ser- c

vices under the Union or the State, the share of the Scheduled Castes and Scheduled Tribes shall be at least proportionate to their percent- age in the population of the Union or of a State, as the case may be, at the previous census;

(b) for the purposes of this article the words "backuard class" I0 shall include—

(i) Scheduled Castes and Scheduled Tribes;

(ii) male members of the non-dwija castes of the Hindu

society;

(Hi) Muslims, Christians and other religious minorities; and j^

(iv) women:

Provided that such members of categories (i), (ii), (iii) and (iv) as own a property of rupees live lakh or more and | or have an annual income of rupees twenty-five thousand or more shall be excluded from the term "backward class";

20

(c) the provisions in sub-clauses (

(d) nothing in this article shall prevent Parliament from making any law prescribing, in regard to a class ox classes of employment or appointment to an office under the Government of, or any local or ²- other authority within, a State or Union Territory, any requirement as to residence within that State or a generally recognised backward region within that State prior to such employment or appointment;

(e) the provision in sub-clause (d) above shall remain in opera- o0 tion for a period of twenty years from the date of coming into force of this provision;

(f) nothing in this article shall affect the operation of any law which provides that the incumbent of an office in connection with the affairs of any religious or denominational institution or nny member 35 of the governing body thereof shall be a person professing a particu- lar religion or belonging to a particular denomination;

(g) failure to implement clause (3) of this article shall be

punishable by law to be passed by Parliament in this respect.'

3. In article 320 of the Constitution, in clause (4), tor the words and 40 Amend- ment of article 320.

figures " (4) of article 16 may be made or as respects the manner in which effect may be given to the provisions of article 335", the words and figures "(3) of article 16 may be made" shall be substituted.

4 Article 335 of the Constitution shall be omitted.

Omission of articV S39,

STATEMENT OF OBJECTS AND EEASONS

The struggle against inequality in India must have a social dimension also. The inequitable feudal-capitalist order can be overthrown success- fully only if the struggle for economic equality is coupled with the strug- gle for social equality.

The concepts of equality and equal opportunity are not synonymous. In a society characterised by a hierarchical structure based on birth, the principle of equal opportunity cannot produce an egalitarian society. The established conventional notions about merit and ability must result in a denial of opportunities for backward castes, Harijans, adivasis, women, etc. The principle of preferential opportunities and reservation alone will ensure that the backward sections catch up with the advanced ones in a reasonable period of time.

This Bill seeks to recast article 16 of the Constitution in order to achieve more effectively the objective of social equality . It defines back- wardness primarily in social terms, but the economic proviso is a, gua- rantee that the special opportunities for the backward sections will not be exploited by the rich and the influential from among these sections.

This constitutional amendment also provides special reservation for the Harijans and adivasis which are among the most suppressed sections of our society, as also reservation for backward regions within a State. Since the existing article 16 does not take into account the fact of regional backwardness and disparity, it makes it difficult for the State to satisfy legitimate regional aspirations without breaking up the States. The present arrangement thus puts a premium on regional separatism. This amendment seeks to remove this built-in bias in favour of disunity.

Hence the Bill.

NEW DELHI;

The 31st January, 1970.

MADHU LIMAYE.

BILL N O. 23 OF 1970

A Bill further tn amend the Code of Civil Procedure, 1908.

BE it enacted by Parliament in the Twenty-first Year of the Republic

of India as follows: —

1. (I) This Act may be called the Code of Civil Procedure (Amend-

ment) Act, 1970.

Short title and com- mence- ment. r (2) It shall come into force on such date as the Central Government

may, by notification in the Official Gazette, appoint.

2. Section 80 of the Code of Civil Procedure, 1908 shall be renumbered 5 of 1908.

Amend- ment of section 80.

as sub-section (1) thereof, and after sub-section (1) as so renumbered, the following sub-section shall be inserted, namely: —

io "(2) Nothing in sub-section (1) shall be deemed to apply to a suit in

which the only relief claimed is an injunction."

STATEMENT OF OBJECTS AND REASONS

There is a conflict of opinion in the various High Courts about the app- licability of section 80 of the Code of Civil Procedure, 1908 to suits for in- junctions. A mandatory enforcement of the provisions of section 80 in suits for injunction sometimes causes an irreparable injury to a person. It is, therefore, desirable that section 80 should not apply to a suit in which the only relief claimed is an injunction of which the object would be de- feated by the giving of the notice or the postponement of the institution of the suit. The introduction of such an amendment in the section would set at rest the conflict of opinion in the various High Courts and would go a long way in strengthening the rule of law.

Hence this Bill.

NEW DELHI; OM PRAKASH TYAGL The 13th February, 1970.

BILL N O. 30 OF 1970

A BUI jurlher to amend the Constitution of India.

BE it enacted by Parliament in the Twenty-first Year of the Republic

of India as follows: —

1. This Act may be called the Constitution (Amendment) Act, 1970.

Short title.

2. In article 120 of the Constitution, clause (2) shall be omitted.

Amend- ment of article 120.

3. In article 210 of the Constitution, clause (2) shall be omitted

Amend- ment of article 210.

(a) for clause (2), the following clause shall be substituted,

namely:—

Amend- ment of article 34S.

"(2) Notwithstanding anything in this Part, or in any other provision of this Constitution, the English language shall also be the official language of the Union and shall continue to be used for all the official purposes of the Union:

Provided that the English language shall cease to be the

official language of the Union under this clause if every Legis- lative Assembly of every non-Hindi speaking State passes a resolution by a majority of not less than three ..ourths of the total membership of that Assembly declaring that the English language shall cease to be the official language 01 the Union."

(b) for clause (3), the following clause shall be substituted,

namely:—

"(3) Whenever Hindi is used for any of the official purposes of the Union, a translation of the same in English shall be made available."

5. In article 344 of the Constitution,—

Amend- ment of article 344.

(a) In clause (6), for the words "Notwithstanding anything in",

the words "Subject to the provisions of" shall be substituted;

(b) to clause (6), the following proviso shall be added, namely:—

"Provided that no direction under this clause shall be issued imposing restrictions on the use of the English language for all or any of the official purposes of the Union, unless every Legisla- tive Assembly of every non-Hindi speaking State passes a reso- lution agreeing to such restrictions, by a majority of not less than three-fourths of the total membership of that Assembly.".

6. For article 346 of the Constitution, the following article 3hall be substituted, namely:—

Substitu- tion of article 340.

"346. (1) The language for communication between one Hindi speaking State and another Hindi speaking State shall be the Hindi or the English language.

language for com- munication between one State and an- other or between a State and the Union.

(2) The language for communication between a Hindi speaking State and a non-Hindi speaking State, between one non-Hindi speak- ing State and another non-Hindi speaking State, between a non-Hindi speaking State and the Union, and a Hindi speaking State and the Union shall be the English language.

Explanation I.—In this article, "Hindi speaking State" means a State,

the official language of which is Hindi.

Explanation II.—In this article, and in the proviso to clause (2)

of article 343, in the proviso to clause (6) of article 344 and in the second proviso to article 368, "non-Hindi speaking State" means any State not being a State referred to in Explanation I,"

7- In article 348 of the Constitution, to clause (1), the following pro- viso shall be added, namely:—

Amendn ment of article 348.

"Provided that no Bill or amendment for the purpose shall be introduced or moved in either House of Parliament unless every Legislative Assembly of every non-Hindi speaking State passes a resolution agreeing to such Bill or amendment, by a majority of not less than three-fourths of the total membership of that Assembly.".

8. After the proviso to article 368 of the Constitution, the following proviso' shall be added, namely: —

Amend- ment of article 368.

"Provided further that if such amendment seeks to make any change in article 343, proviso to clause (6) of article 344, article 346 or article 348, no Bill or amendment for the purpose shall be intro- duced or moved in either House of Parliament unless every Legisla- tive Assembly of every non-Hindi speaking State passes a resolution agreeing to such Bill or amendment, by a majority of not less than three-fourths of the total membership of that Assembly.".

STATEMENT OF OBJECTS AND REASONS

Under article 343 (1) of the Constitution, Hindi is declared to be the official language of the Union. Article 343(2) of the Constitution pro- vides that English shall continue to be used till 1965 for all the official purposes of the Union for which it was being used immediately before 26-1-1950.

2. There has been persistent and repeated agitation in the non-Hindi speaking areas against the recognition of Hindi which is only a regional language as the official language of the Union, for that would place the people in non-Hindi speaking areas at a definite disadvantage. This agi- tation seeks to delete Hindi as the official language in the Constitution. So as to make a compromise between the two extreme stands, the late Prime Minister, Pandit Jawaharlal Nehru, gave an assurance that English would continue to be used as the official language of the Union and for inter-State purposes without any time limit except when the people in the non-Hindi speaking areas agree to the discontinuance of English. With a view to give effect to this assurance, the Official Languages Act was passed in 1963 and was later amended in 1968. But In practice neither the 1963 Act nor the amending Act of 1968 have allayed the fears of the non-Hindi speaking people, since it is only an Act of Parliament which can always be repealed or amended by a simple majority. It has been possible to circumvent the provisions. Those Acts have left many things to be decided and have lallen short of the expectations of the people in the South and other non-Hindi speaking areas.

3. With a view to alter the Constitutional status of Hindi, as a step in that direction, it is proposed to embody the provisions of the Official Languages Act, 1963 and the assurance of Shri Nehru as part of the Constitution itself so that it cannot be altered at the will of a simple majority. In order to meet the just and reasonable demand of the non- Hindi speaking people, the Bill seeks to amend the Constitution so as to provide that the English language shall also be the Official Language of the Union and shall be used for all the official purposes of the Union. The Bill also seeks to provide necessary safeguards before the amend- ment of the Constitution affecting the position of English language as official language of the Union is introduced in either Houses of Parlia- ment.

NEW DELHI; MURASOLI MARAN.

The 21st February, 1970.

BILL NO. 35 OF 1970

A Bill to provide for the formation of a Board for the purpose of rapid

agro-industrial development of Noirth Bihar

BE it enacted by Parliament in the Twenty-first Year of the Republic

of India as follows: —

1. (1) This Act may be called the Mithila Development Board

Act, 1970.

(2) It shall come into force at once.

Short title and com- mence- ment.

2. There shall he set up a Board to he known as the Mithila Develop-

ment Board which shall consist of the following nineteen memhers—

(a) sixteen competent geologists, engineers and economists, eight to be nominated by the Bihar Government and eight by the Central Government;

Setting up of Mithila Develop- ment Board.

(b) the Union Minister of Industrial Development and Company

Affairs, ex-officio;

(c) the Chief Minister of Bihar, ex-otficio or in his absence, the

Governor of Bihar; and

(d) one member, an economist, to be nominated by the Central Government in consultation with the Bihar Government, who shall be the Director of the Board.

3. Except the Union Minister of Industrial Development and Company Affairs, and the Chief Minister or the Governor of Bihar, as the case may be the members of the Board shall be paid suitable monthly salaries.

Salaries of mem- bers of the Board.

Functions of the Board.

4. The function of the Board shall be to survey and set up the tfruit canning factory, paper factory, leather factory, sugar factory, silk industry, and other industries; expedite the excavation of the Western Kosi Canal and other irrigation works; construct roads, bridges, highways and other agro-industrial and infrastructure works.

5. The decisions of the Board shall be arrived at by a majority of the members present and voting but in case of equality of votes, the Chairman of the meeting shall have a casting vote.

Mode of decision of the Board.

STATEMENT OF OBJECTS AND REASONS

In the State of Bihar, in the all India context, the areas of North Bihar, namely, Purnea, North Bhagalpur, Saharsa, North Monghyr, Dar- bhanga, Muzaffarpur, Champaran and Saran districts have been at the lowest rung in industrial development. But these areas are prolific in na- tural resources. If these natural resources are thoroughly surveyed and exploited, North Bihar would be one of the granaries of India and even of the world. But unfortunately this has not been done so uptill now despite the Five-Year Plans.

The object of the Bill is, thus, to provide for a thorough survey of the natural resources of North Bihar and for planning and setting up suitable industries where such requisite potentialities ordain.

Hence the Bill.

NEW DELHI;

The 24th February, 1970.

SHIVA CHANDRA JHA.

FINANCIAL MEMORANDUM

Clause 2 of the Bill seeks to set up the Bihar Mithila Development Board; clause 3 provides for payment of salaries to the members of the Board and clause 4 seeks to set up various industries. It is estimated that a sum of Rs. 50 crores will be required from the Consolidated Fund of India to set up such industries. A sum of about Rs. 2 crores will be required for meeting the recurring expenditure.

BILL NO. 29 OF 1970

A Bill further to amend the Constitution oj India.

BE it enacted by Parliament in the Twenty-first Year of the Republic

of India as follows: —

1. (1) This Act may be called the Constitution (Amendment) Act,

1970.

Short title.

2. In article 120 of the Constitution,—

Amend- ment of article 120.

(a) in clause (1), for the words "in Hindi or in English", where- ever they occur, the words "in Tamil, Hindi or in English" shall be substituted; and

(fa) clause (2) shall be omitted.

3. In article 210 of the Constitution,—

(a) in clause (1), for the words "in Hindi or in English", the

words "in Tamil, Hindi or in English" shall be substituted;

Amend- ment of article 210.

(5) clause (2) shall be omitted.

4. In Part XVII of the Constitution,—

(a) for the heading "OFFICIAL LANGUAGE", the heading Amend- ment of PartXVH

"OFFICIAL LANGUAGES" shall be substituted; and

(b) in Chapter I, for the heading "LANGUAGE OF THE UNION" the heading "LANGUAGES OF THE UNION" shall be substituted.

5. In article 343 of the Constitution,—

Amend- ment of article 343.

(a) for the marginal heading "Official language of the Union", the marginal heading "Official languages of the Union" shall be substituted;

(b) in clause (1),—

(1) for the word "language", the word "languages" shall be substituted,

(ii) and after the words "Devnagari script", the words "and

Tamil in Tamil script" shall be inserted;

(c) in clause (3),—

(i) in sub-clause (a), the word "or" shall be omitted; and

(ii) sub-clause (b) shall be omitted;

(d) after clause (3), the following clause shall be added, namely: —

" (4) Whenever Tamil, Hindi or English is used for any of the official purposes, a translation of the same in English, Hindi, OT Tamil, as the case may be, shall be made available.".

ft. For article 344 of the Constitution, the following article shall be

substituted, namely: —

Substitu- tion of article 344.

"344. (1) The President shall, as soon as may be, by order consti-

tute a permanent Commission which shall consist of a Chairman and

such other members representing the different languages specified

in the Eighth Schedule as the President may appoint, and the order

shall define the procedure to be followed by the Commission,

Commis- sion and Commit- tee of Parlia- ment on official langu- ages.

(2) The Chairman and members shall hold office for three years from the date of appointment and the President shall from time to time fill up the vacancies by fresh appointment.

(3) It shall be the duty of the Commission to make recommen-

dations to the President from time to time as to—

(a) whether, in addition to Hindi and Tamil, any of the other languages, mentioned in the Eighth Schedule may be declared as official language of the Union;

(b) the progressive use of the official languages mentioned

in clause (1) of article 343;

(c) the languages to be used for all or any of the purposes

mentioned in article 348;

(d) any other matter referred to the Commission by the Pre- sident as regards the official languages of the Union and the languages for communication between the Union and a State or between one State and another and their use.

(4) In making their recommendations under clause (3), the Commission shall have due regard to—

(a) the development, vocabulary and the suitability of the language to be declared as an official language and the interests of the persons speaking the language; and

(b) the industrial, cultural and scientific advancement of India, and the just claims and the interests of persons belonging to the non-Hindi or non-Tamil speaking areas in regard to the pubhc services.

(5) There shall be constituted a Committee consisting of thirty

members, of whom twenty shall be members of the Hpuse of the

People and ten shall be members of the Council of States to be elect-

ed respectively by the memibers of the House of the People and the

members of the Council of States in accordance with the system of

proportional representation by means of the single transferable

vote-

(6) It shall be the duty of the Committee to examine the recom- mendations of the Commission constituted under clause (1) and to report to the President their opinion thereon.

(7) Subject to the provisions of article 343 and clause (8) of this article, the President may, after consideration of the report referred to in clause (6), issue directions in accordance with the whole or any part of that report.

(8) If the report referred to in clause (6) recommends the decla- ration of any of the languages mentioned in the Eighth Schedule, in addition to Tamil, as the official language of the Union, Parliament shall, by law, declare the language so recommended as the official language of the Union and clause (1) of article 343 shall have effect as if the said language is also included in that clause. Such law may contain such supplemental, incidental and consequential provisions as may be necessary.".

7. In article 345 of the Constitution, after the words "or Hindi", the words "or Tamil" shall be inserted.

Amend- ment of article 345.

8. In article 346 of the Constitution, in the proviso, after the word "Hindi" the words "or Tamil" shall be inserted.

Amend- ment of article 346.

9. In article 348 of the Constitution, in clause (2), after the word "Hindi", the words "or Tamil" shall be inserted.

Amend- ment of article 348.

Amend- ment of article 349, 10. Article 349 of the Constitution shall be re-numbered as clause (1) thereof, and after clause (1) as so re-numbered, the following clause shall be inserted, namely: —

" (2) Nothing in clause (1) shall be deemed to affect the conti- nuance of Tamil as the official language of the Union.". 11. Article 351 of the Constitution shall be omitted. Omission

of article 351.

STATEMENT OF OBJECTS AND REASONS

At the time of the passing of the Constitution of India when Hindi was made the sole official language of the Union, the interests of non- Hindi speaking areas and the practical difficulties in enforcing Hindi as the sole official language of the Union were completely overlooked. Hindi is, at best, only a regional language and it is not entitled to any preferential treatment over other languages. Hindi is of very recent origin, not developed and its vocabulary, literature and syntax are not adequate to meet all requirements in respect of expression, communica- tion and development. Public opinion and agitations have shown strong disapproval of Hindi being the sole official language.

2. The Indian languages can be classified broadly under two heads, namely, (1) the Aryan languages, and (2) the Dravidian languages. It is also felt that Hindi cannot be the link language for the two groups. In order to accord equal status to the Dravidian group of languages and Aryan group of languages, it is considered necessary that one of the languages belonging to the Dravidian group of languages should imme- diately be declared as the official language of the Union. For this pur- pose, Tamil which is the oldest of the Dravidian languages and which is one of the official languages in some of the South East Asian countries may be included in clause (1) of article 343 as official language of the Union, thereby restoring the status of Tamil in the country of its birth. Since it is not possible by one stroke to include all the other languages mentioned in the Eighth Schedule as official languages of the Union for purposes of article 343 without ascertaining the views of the people speaking the said languages, it is proposed to constitute a Commission and Committee to examine the necessity to recognise such languages also as official languages of the Union.

3. If the Committee recommends that any of the languages mentioned in the Eighth Schedule may, in addition to Tamil, be declared as the official language of the Union, it will be incumbent on Parliament to enact a law declaring the language so recommended as the official langu- age of the Union. The present Bill is intended to prevent national dis- integration on account of language controversy and gives equal status to all the languages in the Eighth Schedule.

4. The special provisions contained in article 351 enjoining on the Union Government a duty to develop the Hindi language as a medium of expression results in undue preference to one regional language. Accord- ingly, the Bill seeks to omit this provision.

NEW DELHI; MURASOLI MARAN.

The 25th February, 1970.

FINANCIAL MEMORANDUM

Clause 6 of the Bill provides for constitution of a permanent Com- mission on official languages as also for appointment of the Committee of Parliament to examine the recommendations of the Commission. Consti- tution of permanent Commission would involve a non-recurring expendi- ture of about Rs. 2 lakhs from the Consolidated Fund of India. A recur- ring expenditure of about Rs. 3 lakhs would also be involved from the Consolidated Fund of India on the Commission and the Committee.

BILL N O. 25 OF 1970

A Bill further to amend the Constitution of India.

BE it enacted by Parliament in the Twenty-first Year of the Republic

of India as follows:—

1. (1) This Act may be called the Constitution (Amendment) Act,

1970.

(2) It shall come into force on such date as the Central Government

Short titli and com- mence- ment.

may, by notification in the Official Gazette, appoint.

2. In article 217 of the Constitution, in clause (2), to part (b), the

following proviso shall be added, namely:—

Amend- ment of article 217, "Provided that no person shall be appointed as a Judge of the High Court of which he fcas been or is an advocate at the time of appointment,".

STATEMENT OF OBJECTS AND REASONS

The practice prevailing at present is that an advocate practising in a High Court is appointed as a Judge In the same High Court. This method cannot be considered' as satisfactory for the reason that such advocates before appointment as Judges have, professional contacts with the litigant public and the appointment to the same High Court Is against the spirit of the well-known maxim that "Justice must not only be done but must appear to have been done." In order to ensure the independence of Judges it is essential and desirable that no person should be appointed as a Judge of that very High Court* of which he has been or is an advo- cate Et the time of appointment. The proposed amendment Is, therefore, necessary for ensuring and strengthening judicial independence which is absolutely necessary for enforcing the Rule of Law.

Hence this Bill.

NEW DELHI; OM PRAKASH TYAGI.

Tits 2Gth February, 1970.

S. L. SHAKDHER,

Secretary.