Cooperative Societies Act 1925

1. Section 2 says it extends to whole pak except tribal areas.

2. Section 3a by-laws.

3. Section 3h-1 resource society: to get loans, goods, and services for members.

4. Section 3h-2 consumer society:

5. Section 3h-4 housing society

6. Section 3h-5 general society

7. Section 4A power of search warrant by registrar.

8. Section 5 says society can be registered with promotion of economic interest

of its members.

9. Section 6 says member can hold 1/5 share of society but max 20,000 in case

of housing society.

10.Section 7-1 says society can be registered with 10 persons of 18+ which

objective of creating funds.

11.Section 9-3 says society will be registered with its own bye-laws not

contradictory to by laws of act 1925.

12. Section 12 says society shall call its AGM after 3 months of setting up its

accounts.

13. Section 13 says special general meeting can be called within 1 month on

requisition of 1/5 members or by registrar.

14. Section name change of society

15. Section says society will be amalgamated by ¾ of members in special AGM

with 15 days written notice of resolution.

16. Section 16-A power of government to amend bye-laws.

17.Section 17 says no membership until dues are paid my members.

18. Section 17-B membership will be ceased in case his propert is either moved,

gifted or transferred.

19. Section 18 one member on vote but in tie chairman will have final vote for

decision.

20. Section 22 audit of society in one year.

21.Section 25 says society will not charge or will not set up share of member in

respect of debt. (kisi bhi member ka society me hissa nahi becha ja sakta kisi

bhi qarz ki madd me)

22.Section 26 says share or interest of member shall not be liable of attachment

or sale under any order of court in respect of any debt or liability. (kisi bhi

member ka society me hissa nahi becha ja sakta kisi bhi qarz ki madd me

chahy court ka order hi kyun na ho)

23.Section 27 says if member dies then legal heir will get his/her share in

society if no heir is nominated then any heir will be duly elected as member
 of society then share of deceased member will be transferred within one year

by society.

24.Section 28: liability of past member will continue for 2 years.

25.Section 29: liability of deceased member in property will last for 1 year.

26.Section 33: federal government may expemt any tax fee, registration or court

fee to any society/class of societies.

27.Section 33-A society will not give any loan other than member.

28.Section 34: society cannot lend money in case of unlimited liabilities on the

security of moveable property.

29.Section 37: society can invest funds in any govt entity prescribed by rules of

societies.

30.Section 38: not more than 10% shall be paid as dividend to member.

31.Section 39: reserve fund is ¼ of net profits per year in case of reserve

society and 1/10th of net profits per year in case of any other society.

32.Section 40: after reserve profit is distributed among member and among

member+non members in case of consumer and producer society.

33.Section 41: provident fund is not asset of society and will be established for

members.

34. Section 42: society can make charity after reserve fund.
35.Section 43: registrar make inquiry upon majority of society committee, upon

application of 1/3rd of members of society.

36.Section 44-A: inspection of books by financing bank officer.

37.Section 44-C: any officer of society can be removed by registrar.

38.Section 47: society will be wound up and registrar will appoint liquidator

and will fix remuneration.

39.Section 48: if major members reduce from 10 then registrar will wind up

society.

40.Section 49: registration of society will be cancelled if society is wound up or

if no liquidator is appointed after 2 months of order of society’s winding up.

41.Section 51: no suit will be applied against society except by leave of

registrar in case of society’s dissolution or winding up.

42.Section 52: after cancellation of society surplus assets will not be divided

among members but to any object described under bye-laws or described by

General Meeting of society with consultation of registrar.

43.Section 53: for dissolution of housing society 3 person will be appointed as

liquidators; one by registrar, one by society in general meeting, one by

provincial cooperative institute. These persons after selling off or making

arrangement of society shall make surplus assets according to 52 rule.

44.Section 54 is about arbitration.

45.Section 56; appeal against award of arbitrator can be filed/heard in one

month.

46.Section 59-A: property of defaulter which cannot be sold will be transferred

to society.

47.Section 59-C: debt can be recovered from defaulter non member by

recovering via crop of defaulter or any other produce of him/her. In this case

society will file application fro recovery to registrar.

48.Section 59-F: registrar will send copy of order to collector to recover debt

from defaulter (crop producer)

49.Section 59-H: distraint officer will appoint a person to reap,store and mature

the produce in case defaulter fails to do so. Expense will be liable on

defaulter.

50.Section 59-I: unless demand amount is immediately paid, distraining officer

will issue notice specifying property at any place and day with in 3-7 days.

51.Section 59-L: sale of crop or property will be done through Public Auction.

52.Section 59-Q: certain person or officer cannot purchase this property/crop.

53.Section 60: offences

54.Section 60-A: if society member or officer is defaulted then he cannot

perform any function in society. Provided society has capital of 50,000.

55.Section 60-B: willful neglect or default by society

56.Section 60-C: willful furnishing of false information.

57.Section 60-D: disobedience of summon, requisition or order.

58.Section 61: penalty for any offence not expressively provided will not

exceed 1000.

59.Section 62: no person shall use word “cooperative” unless registered society

and fine for such offender will be 50 rupees plus 5 rupees/day if offence

continues.

60.Section 62-A: if officer is removed by registrar but does not leave or

contravenes then officer will be declared guilty or will be imprisoned for 6

months or will be punished with fine or with both.

61.Section 64: appeals can be made by aggrieved party to provincial

government within 2 months.

62.Section 64-A: provincial govt and registrar may modify, annul or reserve the

order.

63.Section 64-AA: order passed under appeal by provincial goct will be final

and will not be liable to question in any civil or revnue court.

64.Section 66: no society can be exempted from registration by any court in any

condition.

65. Section 67: provincial govt can exempt any society from provisions of this

act.
66.Section 68: companies ordinance will not be applicable to any society under

this act.

67.Section 69: if any branch of society is established outside of these 4

provinces then a copy of bye-laws/amended bye-laws will be submitted to

registrar of province where it is registered.

68.Section 72: following have repealed; cooperative societies act 1912,

Bombay cooperative societies act 1925 applied to Karachi.

 THE CO-OPERATIVE SOCIETIES RULES, 1927

1. Rule 2-2 two other copies of proposed by laws of society will be attached

with copy of application having one copy of by-laws.

2. Rule 5: after registration the by-laws will be adopted by majority 0f 2/3

members at the meeting plus quorum of members must be for adopting by-

laws.

3. Rule 6-2: Amendment is by-laws is made by 2/3 of members in meeting and

this resolution is forwarded to registrar within period of 3 months from date

of meeting with one copy of by-laws and three copies of propsed/amended

by-laws will be attached with resolution.

4. Rule 7: registrar will set a limit of taking loans from non-members in case

society having un-limited liabilities and society will comply to orders of

registrar within period of 4 months.

5. Rule 8: no society with limited liability can borrow from non-members

exceeding 15 times it total paid-up capital share.

6. Rule 8-A: in case of land mortgage societies and industrial societies this

borrowing will not exceed 20 times it total paid-up capital.

7. Rule 10: agricultural credit societies shall not accepts deposits less than 2

months except saving deposits.

8. Rule 11: no society shall make any loan to a member on a bond secured by

suretyship of a non-member unless permitted by registrar in special case.

9. Rule 12: losses will be written of any society against the reserve fund of

society, and in case of limited liability society losses will be written off from

reserve fund and remaining losses will be written off from sharing capital of

society.

10. Rule 18: all societies registered as central banks or urban banks shall submit

their reports quarterly.

th
11. Rule 19: each society shall publish annual balance sheet on or before 15 of

September.

12. Rule 23: no bonus will be divided among members beyond dividend

declared.

13. Rule 24: dividend will be paid to shareholders not exceeding 6 ¼ .

14. Rule 24-A: resource or general society will pay 7 ½ as dividend to its

shareholder in one year.

15. Rule 25: balance of profit after giving dividend will be distributed in

accordance of by-laws.

16. Rule 25-A: in a society with unlimited liability in which members held

shares, no dividend or bonus shall be paid until ten years have elapsed from

the date of its registration. At least one-fourth of the net profits of the year
 have been carried to the reserve fund, a dividend not exceeding 7½ per cent,

on each fully paid-up share may be paid from the reminder of the profits.

17. Rule 26: Without the sanction of the Registrar, no part of the funds of a

registered society shall be divided, by way of bonus or dividend or

otherwise, amongst its members in any year unless the entire expenditure

incurred by such society has been debited in the annual profit and loss

account before the net profit has been calculated.

18. Rule 26-A: No society shall contribute any money towards the expenses of

any co-operative conference unless such conference is held under the

auspices of a society which is authorised by its by-laws to hold such

conference.

19. Rule 27: society can invest its funds in shares of SBP, in purchase, leasing

and construction of land and building.

20. Rule 28: The reserve fund of any registered society may be utilized in the

business of the society, or be invested or deposited in any of the ways

mentioned above.

21. Rule 28-A: The fund created by a registered society for the purpose of

constructing buildings, shall be called the building fund.

22. Rule 29: in the case of an agricultural co-operative credit society, the audit

fees so
 levied shall not exceed 5/8 per cent calculated on the working capital of the

society as it stood at the close of the last preceding co-operative year.

23. Rule 30: Deleted

24. Rule 31: Consumers’ Societies with a working capital exceeding Rs.50,000

shall arrange audit on own and will inform registrar 1st may in any year but

in case failed to do so registrar will conduct audit with audit fee of Rs.10 per

day for the whole period of the audit.

25. Rule 32: in case of dispute registrar will issue notice to parties if parties

resolve issue on their own within 15 days then notice will render invalid but

in case matter refers to registrar then registrar will appoint his nominee to

decide dispute among parties. And this nominee will be chairman of

arbitration committee having 3 other arbitrators from parties within 15 days.

26. Rule 36: during proceedings of matter no party shall be represented by a

legal practitioner.

27. Rule 39-A: Recovery of costs of execution when property is not sold: such

recovery to be

paid by any party in default according to scale laid down by him not

exceeding in the aggregate five per centum of the amount of the dues.

28. Rule 40: Disposal of records of a society whose registration is cancelled:

within 15 days of the publication of the order in the Provincial Gazette send
 by registered book post or Railway parcel, the records and books of the

society to the Assistant Registrar or hand over the same to the local Auditor.

(In case liquidator is not appointed)

29. Rule 40-2: in case society registration is cancelled the Liquidator will

forward all the books and records of the cancelled society, and all his own

papers and proceedings, by Railway parcel to the Assistants Registrar,

together with an account of his expanses.

30. Rule 40-3: After cancellation of society assistant registrar after the expiry of

two year from the date of the order cancelling he registration of the society.

31. Rule 43: All (fees) fines levied shall be credited to Government.

32. Rule 44-A: attachment of moveable property; other than agricultural produce

in possession of debtor. (1) where the property to be attached is movable

property, other than agricultural produce, in the possession of the debtor the

attachment shall be made by actual seizure, and the attaching officer shall

keep the property in his own custody or in the custody of one of his

subordinates, or of a Receiver, if one is appointed under sub-rule (3) and

shall be responsible for the due custody thereof.

33. Rule 44-A: attachment of immovable property; the attachment shall be made

by an order prohibiting the debtor from transferring or charging the property

 in any way, and all persons from taking any benefit from such transfer or

change.

34. Rule 45: there is restriction on membership of two credit societies by a

member at a time.

35. Rule 45-A: register will expel a persistent defaulter member of a society.

36. Rule 46: Societies not be involved in controversial matters of a religious

character.

37. Rule 48: registrar may supersede or suspend committee or a society for

specified period.

38. Rule 48-3: all functions and duties of committee during suspension will be

performed by 9 members (rule 48-4) appointed by registrar for 2 years. (rule

48-5) after 2 years new members will be appointed if committee still

superseded.

39. Rule 48-7: in case of provincial coop bank the filling of any vacancy (in

place of suspended committee) shall be made by the Registrar with the

previous approval of the Provincial Government.

40. Rule 54: society can invest its funds in the purchase or lease of land or

buildings or in the construction of buildings required for the conduct of its

business.
41. Rule 55: Power to make rules; The committee of every Co-operative Bank

and society having a working capital of over Rupees one lac, shall frame

rules for regulating the appointment, removal, dismissal and promotion of its

employees.