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(1) If, in the opinion of the Registrar, the committee of any co-operative society persistently makes default or is negligent in the performance of the duties imposed on it by or under this Act or the rules framed thereunder, the bye-laws or commits any act which is prejudicial to the interest of the co-operative society or its members or defies the directions issued by the Registrar under section 42 of this Act or fails to initiate action for recovery or fails to recover any dues of a federal co-operative society or any financial institution after the finality of award and issue of recovery certificate or after such recovery fails to pay the recovery amount to the federal co-operative society or the financial institution, the Registrar may after giving the committee an opportunity to state its objections, if any, by order in writing direct -
(a) to hold election of the committee within a period of thirty days by calling a special general body meeting; and
(b) if in the opinion of the Registrar, the election of committee is not feasible under the prevailing circumstances, the Registrar shall pass an order in writing to remove the committee and appoint one or more administrators to manage the affairs of the co-operative society for a period not exceeding one hundred and eighty days to be specified in the order, which period may, at the discretion of the Registrar be extended from time to time, however, that the aggregate period does not exceed five hundred and fifty days :
Provided that where the co-operative society is a co-operative bank, before issuing of a show-cause notice under sub-section (1), the prior consultation with the Reserve Bank and NABARD shall be necessary;
Provided further that the supersession of the committee of a co-operative society shall be made only where the Government has equity of fifty one percentum or more.
(c) Notwithstanding anything contained in this Act, the Registrar in case of the co-operative bank, if so required by the Reserve Bank or the NABARD on requisition from the Reserve Bank to supersede management of a co-operative bank, the Registrar shall supersede the management of such a co-operative bank.
(2) The Registrar may fix such remuneration, if any, for the administrator(s) as he may think fit and such remuneration shall be paid out of the funds of the co-operative society.
(3) The administrator shall, subject to the control of the Registrar and to such instructions as he may from time to time give, exercise powers and perform functions of the committee or of any officer of the co-operative society and take all such actions as may be required in the interest of the co-operative society, but shall not be empowered to enroll new members.
(4) The administrator shall call the general body meeting of the co-operative society to spell out his plan of action.
(5) The administrator shall before expiry of his term of office, arrange for the constitution of a new committee in accordance with the rules and the bye-laws of the co-operative society.
(6) Before passing any order under clause (b) of sub-section (1) in respect of a co-operative society the Registrar shall, at first, consult the financing bank or the financing institution to which it is indebted
:Provided that where the co-operative society is a co-operative bank, before issuing a show cause notice under sub-section (1) prior consultation with the Reserve Bank shall be necessary :
Provided further that on a requisition of the Reserve Bank to supersede the Board of a co-operative bank, the Registrar shall supersede the committee of such a co-operative bank.
(7) 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 or NABARD in the public interest or for preventing the affairs of the co-operative bank being conducted in a manner detrimental to the interest 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 appoint an administrator therefor, for such period or periods not exceeding five hundred and fifty days in the aggregate, as may, from time to time be specified by the Reserve Bank.
Last Updated Date :- 09-05-2018
Page last updated on: 22-09-2021