West Bengal Co-operative Societies Law
Q: What Act and Rules are applicable in this law?
A: The West Bengal Co-operative Societies (Amendment) Act, 2011 and the Rules, 2011 are applicable relating to Co-operative Societies in West Bengal (Refer to Notification No. 177-Coop/H/2R-1/2006(Pt.) dated 18.01.2011 and No. 179-Coop/H/2R-1/2006(pt.) dated 18.01.2011).
Q: What is the basic Act now in vogue relating to Co-operative Societies Law in West Bengal?
A: The West Bengal Co-operative Societies Act, 2006 and The West Bengal Co-operative Rules, 2006 are in vogue relating to Co-operative Societies Law in West Bengal.
Q: State the basic objects of Co-operative Societies Law in West Bengal.
A: The basic objects intend to infuse a new life into the Co-operative movement of West Bengal in the face of new challenges of globalization and liberalization of the Indian economy. The law extends to the whole of West Bengal.
Q: State the salient features of Co-operative Societies in West Bengal.
A: Co-operatives in West Bengal are autonomous associations of persons united voluntarily to meet their common needs and aspirations through a jointly owned and democratically controlled enterprise, adhering to co-operative principles and values.
Q: What would be the registered terminology in the name of Co-operative Societies?
A: The registered Co-operative Societies are termed with the name ending with the words “limited liability,” signifying the societies having the liability of its members limited by its bye-laws to the amount, if any, unpaid on the shares respectively held by them or to such amount as they may have respectively undertaken to contribute to the assets of the co-operative societies in the event of its being wound up.
Q: Is the Company’s Act, 1956 applicable to the Co-operative societies?
A: No, the provisions of the Companies Act, 1956 shall not apply to Co-operative Societies. (Section 8)
Q: What is the meaning of Co-operative year?
A: “Co-operative Year” means the year commencing on the 1st day of April every year.
Q: What do you understand by “Bye Law” of the Co-operative Societies?
A: “Bye law” of the Society means a Bye Law registered under the Act and includes an amendment thereof.
Q: Can a partnership of Co-operative Societies be formed?
A: Yes, Section 26 of the West Bengal Co-operative Societies Act states that any two or more Co-operative Societies may, by resolution passed at a general meeting by a majority of members present and voting in each of such Co-operative Societies, enter into a contract of partnership for carrying on any specific business permissible under the bye-laws of such Co-operative Societies on such terms and conditions as may be mutually agreed upon. Such partnership of Co-operative Societies shall be governed by the provisions of the Indian Partnership Act, 1932 (Act 9 of 1932).
Q: What is the genesis of forming Co-operative Societies?
A: The area of operation adopted by the Societies is the genesis of forming Co-operative Societies in West Bengal. Notable examples include Consumers’ Co-operative Society, Co-operative Farming Society, Co-operative Land Development Bank, Co-operative Housing Society, and Co-operative Credit Society.
Q: How is the business activity managed in Co-operative Societies?
A: The strategic management of the Co-operative societies is entrusted to a Board of Directors constituted under Section 32, headed by a Chairman or the Chief Executive.
Q: What is an Apex Co-operative Society?
A: An Apex Co-operative Society is a Co-operative Society whose area of membership extends to the whole of West Bengal, with the primary object of promoting the objectives and providing facilities for the operation of other Co-operative Societies which are its members. This includes the West Bengal State Co-operative Bank Ltd. and the West Bengal State Co-operative Agriculture and Rural Development Bank Ltd.
Q: State the types of Share Capital of a Co-operative Society.
A: There are two types of Share Capital: Preferential Share Capital and Equity Share Capital. These two types of share capital are raised by the Society as authorized by virtue of the registration certificate of the Society.
Q: What is the meaning of Registrar?
A: The Registrar means the registrar of Co-operative Societies appointed under Section 12, and includes Additional Registrar, Joint Registrar, Deputy Registrar, Assistant Registrar of Co-operative Societies, and any other officers appointed under that section to assist the Registrar and on whom all or any of the powers of the Registrar under this act are conferred.
Q: What is the Working Capital of a Co-operative Society?
A: Working Capital of a Co-operative Society means the total capital of a Co-operative Society consisting of Borrowed Capital and Owned Capital.
Q: What is the consequence of omission of the word “Co-operative” in the name of a Society?
A: 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 language is a part. Any violation of this provision shall constitute an offence punishable with imprisonment for a term which may extend to two years or with a fine which may extend to Rs. 5000/- or both.
Q: What is the procedure for submission of application for registration of a Co-operative Society?
A: The procedure is as follows:
- An application for registration of a Co-operative Society in the prescribed form and its bye-laws shall be submitted to the Registrar by hand or by registered post with acknowledgment due, with one copy to the District Co-operative Union in the case of a Co-operative Society having its area of membership within a district and to the State Co-operative Union in more than one Co-operative range.
- Every such application shall be accompanied by: i. 4 copies of the proposed bye-laws of the Co-operative society as adopted by the Promoting Members; ii. A list of names of the members with their addresses, occupations, and equity participation and signatures; iii. A list of members of the 1st Board elected by the promoting members; iv. A true copy of the minutes of the meeting at which the bye-laws were adopted and the election was held, duly signed by the Chairman; v. A scheme of the project, if any, to be undertaken by the proposed Co-operative society (refer to West Bengal Co-operative Societies Act, 2006).
Q: What are the matters to be included in the bye-laws?
A: The bye-laws of the Co-operative Societies may include the following matters as decided by the General Body: a. Identification of the Co-operatives b. Objects and services c. Capital and fund d. Membership – Members’ rights and obligations e. General body f. Chief executive and staff g. Finances h. Other matters
Q: What are the provisions for the Annual General Meeting of Co-operative Societies?
| A: Category of Co-operative Society | Period during which the AGM to be held |
| a) All Primary Co-operative Societies | April, May & June |
| b) All Central Co-operative Societies | September |
| c) All Apex Co-operative Societies | December |
Q: State the power of the State Government to give financial assistance to the Co-operative Societies.
A: Notwithstanding anything contained in any other law for the time being in force, the State Government may, subject to the rules: a. Grant loans to, take shares in, or give financial assistance in any other form to, any Co-operative Society; b. Guarantee the payment of share capital of any Co-operative Society and dividends thereon at such rate as may be specified by the State Government; c. Guarantee the repayment of principal and payment of interest on loans and advances to any Co-operative Society.
Q: State the liability of members upon the dissolution of the Co-operative Societies.
A: The members of Co-operative Societies shall, upon the dissolution of Co-operative Societies, be jointly and severally liable to contribute towards any deficiency in the assets of the Co-operative Societies if the Society is a Co-operative Society with limited liability, subject to such limitation as may be provided in the bye-laws.
Q: Who appoints the Registrar of Co-operative Societies in West Bengal, and what are the powers and duties conferred to the Registrar of Co-operatives?
A: The State Government may appoint a person to be the Registrar of Co-operative Societies [Section 12(1) of the Act]. Under Section 13, the State Government may, by general or special order, confer all or any of the powers or impose all or any of the duties of the Registrar under this Act, other than those specified in the first schedule, on any person appointed under sub-section (1) of section 12 to assist the Registrar.
Q. How is a Co-operative Society registered?
Ans: A Co-operative Society is established with the object of social and economic betterment of its members through self-help and mutual aid, according to Co-operative principles. The procedure for registration includes:
- Submitting an application in Form 1, signed by the applicant, to the Registrar.
- Providing four copies of the proposed bye-laws, a list of members with their addresses and signatures, a list of the first Board members, a true copy of the meeting minutes where bye-laws were adopted, and a scheme of the project to be undertaken by the proposed society.
- The application must be signed by at least 10 individuals for a primary co-operative society or by the authorized representatives of at least 5 primary co-operative societies for a federal co-operative society.
- The Registrar will ensure the application and bye-laws conform to the Act and Rules and grant a Certificate of Registration in Form II if all conditions are met.
Q. What is the minimum requirement for registering a Housing Co-operative Society?
Ans: The number of applications required for the registration of a Housing Co-operative Society is not less than 8.
Q. Can a Co-operative Society be a Body Corporate?
Ans: Yes, after registration, a Co-operative Society becomes a Body Corporate. It has perpetual succession, a common seal, and is entitled to acquire, hold, and dispose of property, enter into contracts, institute and defend suits, and perform all necessary functions to achieve its objectives.
Q. What is the provision for displaying the name of a Co-operative Society?
Ans: According to Section 18 of the Act, every Co-operative Society must display its name and the address of its Registered Office along with the Registration No. at:
- Every office or place where it carries on business.
- In all notices and official publications.
- On contracts, business letters, orders for goods, invoices, statements of account, receipts, and letters of credit.
- On bills of exchange, promissory notes, endorsements, cheques, and orders for money.
Q. What are the different meetings to be held in a Co-operative Society?
Ans: The meetings include:
- Annual General Meeting
- Half-Yearly General Meeting
- Special General Meeting
Q. What is the procedure for holding the Annual General Meeting of a Co-operative Society?
Ans: Procedure for AGM is as follows:
- An Annual General Meeting must be held within 15 months from the date of registration and thereafter as per Section 29.
- It is convened by the Secretary or another authorized officer.
- Notices of the meeting, stating the place, date, hour, and business to be transacted, must be sent to every member at least 21 days before the meeting.
- The Chairman or, in his absence, the Vice Chairman or the highest designated employee shall convene the 1st Annual General Meeting if the Board fails to do so.
- If the Board fails to convene the meeting, the Registrar will call it.
Q. What is the legal procedure for a Half-Yearly General Meeting?
Ans: A Half-Yearly General Meeting should be held within 8 months from the date of the last Annual General Meeting. The meeting aims to review the Co-operative Society’s activities, consider audit reports, review the financial position, and discuss other items as specified in the bye-laws.
Q. What is the procedure for holding a Special General Meeting?
Ans: A Special General Meeting can be called:
- By the Board on urgent matters or under Section 29.
- By at least 1/3rd of the members or delegates through a written requisition for specific matters, including a resolution for ‘No Confidence’ against the Board.
The Secretary must call the meeting within two months from the date of requisition.
Q. How are the proceedings of meetings recorded in a Co-operative Society?
Ans: Minutes of the Annual General Meeting and other General Meetings must be entered in a book, drawn up and signed by the Chairman within three working days of the meeting.
Q. What is the quorum for General Meetings of a Co-operative Society?
Ans: The quorum for Annual, Half-Yearly, or Special General Meetings is 1/5th of the total number of members, delegates, or representatives on the date of the meeting.
Q. Is business transacted in a meeting valid without quorum?
Ans: No, no business shall be transacted unless there is a quorum.
Q. Is a quorum necessary for an adjourned meeting?
No, a quorum is not required for an adjourned Annual, Half-Yearly, or Special General Meeting.
Q. Discuss the management of Co-operative Societies.
Ans: Management of Co-operative Societies-
- Every Co-operative Society has a Board of Directors, consisting of 6 to 15 Directors or 3 to 6 if the membership is fewer than 12.
- The State Government may nominate one Director if it has subscribed to the Society’s Share Capital or guaranteed loans.
- Directors serve a term of five years, with restrictions on holding office in multiple societies.
- The quorum for Board meetings is 1/3rd of the total number of Directors.
Q. What are the powers and duties of the Board?
Ans: The Board has full control over the administration and business of the society and must perform duties including:
- Receiving and disbursing money, maintaining true accounts, and preparing reports for the Annual General Meeting.
- Preparing statements for audit, maintaining a register of members, conducting transparent business, and creating various policies for the society.
Q. To whom is the Annual Return of the Co-operative Society submitted and in which form?
Ans: The Annual Return is submitted to the Registrar of Co-operative Societies in Form XV.
Q. How is a compromise between a Co-operative Society and its Creditors made?
Ans: The compromise is made by the Board and must be ratified by the General Body.
Q. Define Liquid Cover.
Ans: Liquid Cover refers to assets that can be quickly converted into cash, including cash in hand, savings accounts, government securities, and other investments approved by the Board.
Q. What is a Financing Bank in the context of Co-operative Societies?
Ans: A Financing Bank may include State Co-operative Bank, Central Co-operative Bank, State Co-operative Agricultural & Rural Development Bank, a primary Co-operative Bank, State Bank of India, and National Bank for Agriculture & Rural Development.
Q. What is a Joint Member and the provision for their voting rights?
Ans: A Joint Member is one or two persons admitted jointly to membership, such as husband and wife or parent and child. Voting rights are exercised by the first named member, or the other member in their absence.
Q. What is the Co-operative Service Commission, and what is its tenure?
Ans: The Co-operative Service Commission consists of three members appointed by the State Government: one Chairman (a former Special Secretary) and two members from Apex Co-operative Societies. The tenure of the Commission is three years.
Q. Who is the Director of Co-operative Audit?
Ans: The Director of Co-operative Audit includes the person appointed under Section 12, along with Additional, Deputy, and Assistant Directors of Co-operative Audit.
Q. What are the different types of audits conducted in a Co-operative Society?
Ans: Types of audits include Annual Audit, Running Audit, Concurrent Audit, Re-Audit, Cost or Performance Audit, and Internal Audit.
Q. Define Concurrent Audit and how it is conducted.
Ans: Concurrent Audit involves daily auditing of accounts during a co-operative year. The auditor issues daily memos for errors and irregularities, and the society must submit a rectification report within three days.
Q. Is the Right to Information Act applicable to Co-operative Societies?
Ans: Yes, the Right to Information Act applies to Co-operative Societies, allowing members to inspect books of account, registers, financial statements, etc.
Q. What are the special requirements for disclosure in financial statements?
Ans: Special disclosure requirements include:
- Bad Debt Fund: Not less than 15% of Net Profit
- Reserve Fund: Not less than 10% of Net Profit
- Co-operative Education Fund: 5% of Net Profit, up to Rs. 15,000
Q. Is it essential for a Co-operative Society to obtain SME Registration?
Ans: Yes, MSME registration is required for Co-operative Societies to access benefits related to financial credit and other facilities like land, water, and electricity.
