The Cooperative Societies Rules, 1927

The Cooperative Societies Rules, 1927

14th July, 1926

Whereas certain rules, which it was proposed to make under Section 71 the Cooperative Societies Act, 1925, (Act VII of 1925) were published in Government Notification in the Revenue Department No.5978/24, And whereas the objections and suggestions received with reference to the said rules have been considered by the Government of the Province.

Now, therefore, the Government of the Province in exercise of the powers conferred by Section 71 of the Cooperative Societies Act, 1925 (Act VII of 1925), and in pleased to make the following rules:-

1. Short title.

(1) These rules may be called the Cooperative Societies Rules, 1927.

(2) Definitions. In these rules, unless there is anything repugnant to the subject or context,

(i) the expression “the Act” means the Cooperative Societies Act, 1925

(ii) “section” means a section of Act,

(iii) Words and expressions defined in the Act shall have the meanings assigned to them in the Act.

2. Application for Registration.

(1) Every application for the registration of a society under sub section (1) of Section 9 shall be in the form of Schedule “A” hereto annexed.

(2) In addition to the copy of the bye-laws which is required to accompany the application for registration under subsection (3) of Section 9 two other copies of the proposed bye laws of the society shall be forwarded therewith.

(3) In case where one of the members of the society to be registered is a registered society a member of the Managing Committee of such registered society shall be authorized by such Committee by resolution to sign the application for registration and the bye laws on its behalf and a copy of such resolution shall be appended to the application.

3. Decision of Registrar to be communicated in case of refusal to register. If the Registrar refuses to register the society or its bye laws under Section 10, he shall communicate to the applicants his reasons for so doing.

4. Matters in respect of which a society shall or may make bye laws.

(1) The matters in respect of which every society shall make bye laws are the following:

a. the name and address of the society and its branches, the tribe, classes caste or occupation of its members if the membership is proposed to be s restricted, and the area for which it is to be registered;

b. the object of the society, the purposes to which its funds are applicable, the terms of admission of members, and their rights and liabilities, the consequences of default in payment of any sum due by a member and in the case of credit societies the conditions on which loans may be granted, and the rate of interest and the system of calculation of interest and the maximum number of members that may be admitted; and the case of non credit societies the mode of conducting business purchase, sale, stock taking, and other like matters.

c. The mode of holding meetings and subject to the provisions of rules 5 and 6 the manner of making altering and abrogating bye laws.

d. The mode of appointments and removal of members of the committee and the officers, if any, and the duties and powers of the committee and officers;

e. The manner in which capital may be raised;

f. The mode of custody and of investment of funds and subject to rules 14, 17, 18 and 19 the mode of keeping of accounts; and

g. The distribution of its profits.

(2) Every society may make bye laws in respect of any other matters incidental to the management of its business.

5. Bye-laws. When a society has been registered, the bye laws submitted under sub section (3) of Section 9 shall, subject to any modification approved by the Registrar, and adopted at a general meeting, having a quorum, by majority of not less than two thirds of the members present at such meeting, become the bye laws of the societies.

6. Amendment of Bye Laws. Bye laws may be made, altered or abrogated by a resolution passed at a general meeting of the society provided that

(1) due notice of any proposal to make, alter or abrogate the bye laws give in accordance with the bye laws.

(2) The resolution is passed by not less than two thirds of the members present at the general meeting at which a quorum shall be present or, at an adjourned general meeting (at which if a quorum is not present members present shall form a quorum) and a copy of the resolution is forwarded to the Registrar writhing a period of three months from the date of meeting. A copy of the proposed amendments signed by the officers of the society shall be attached to the copy of the resolution; and

(3) The making, alteration or abrogation of the bye laws is approved and registered by the Registrar.

6-A. Special general meeting at the instance of the Registrar.

Notwithstanding anything contained in the rules or bye laws of a society as to the manner or summoning a General Meeting and a notice to be given, for the said purpose, any person authorized in this behalf by the Registrar may call a special general meeting for which a requisition has been made by the Registrar under sub section (2) of Section 13 is such manner and at such time and place as the Registrar may direct. A special general meeting so convened shall have powers to transact all business which can be transacted at the annual general meeting under the bye laws framed by the society and such other business is specially mentioned in requisition made by the Registrar.

7. Loans and deposits.

Every society with unlimited liability shall, from time to time fix in a general meeting the maximum liability which it may incur in loans and in deposits from non members. The maximum so fixed shall be subject to the sanction of the Registrar who may at any time reduce, it for reasons to be communicated by him to the society in writing and may prescribe a period not being less than four months within which the society shall comply with his orders. No such society shall receive any loan or deposit from a non member which will make its liability to non members exceed the limit sanctioned by the Registrar.

8. Restrictions on borrowing by societies with limited liability.

No society with limited liability shall incur liabilities from persons who are not members exceeding in total fifteen times the total amount of its paid up share capital accumulated reserve fund, and building, funds minus accumulated loss, In calculating the total amount of liabilities for the purposes of this rule, in the case of an agricultural sale society purchase and sale society or a multipurpose sale society, specified by the Registrar by general or special order in that behalf a sum equal to the amounts borrowed by such society from a banking society for giving advances on the security of agricultural produce shall be deducted from the amount of actual liabilities of such society and in the case of the Provincial Cooperative Bank Ltd. A sum equal to the face value of the gilt-edged securities owned by the Bank up to an amount of the paid up share capital of the Bank shall be deducted from the amount of actual liabilities of the Bank.

8-A. The provisions of rule 8 shall apply to land mortgage societies and District Industrial Associations registered under the Cooperative Societies Act, 1927, with the modification that for the word “fifteen time” occurring herein the words “twenty times” shall be substituted.

9. Share not to be hypothecated to the society.

The shares of a society shall not be hypothecated to that society by its members as a security for a loan.

9A. Value of share of member. If a member resigns his membership of society or dies the sum representing the value of interest in the capital of the society to be paid to him or his nominee; heir or legal representative, shall be ascertained as under:

(i) In the case of society with unlimited liability, it shall be the actual amount received by the society in respect of such share or interest;

(ii) In the case of a society with limited liability, it shall be the amount arrived at by a valuation based on the financial position of the society as shown in the last audited balance sheet proceeding the registration or death of such member, provided that it shall not exceed the actual amount received by the society in respect of each share or interest.

10. Deposits with agricultural credit societies.

Agricultural credit societies shall not accept deposits which are not fixed for a period of at least two months, except savings deposits in such societies as have made in their bye laws provisions for the encouragement of thrift among their members by the opening of saving account.

11. Loans on surety ship of non member.

No society shall make any loan to a member on a bond secured by the surety ship of a non member; provided that the registrar may, for special reasons exempt any society by name from the operation of this rule.

12. Writing off of losses.

Losses may be written off against the reserve fund of any society, and the case of limited liability societies if the losses exceed the reserve fund, the balance remaining may be written off against the share capital of the society;

Provided that:

(i) no losses shall be written off without the sanction of a general meeting;

(ii) before any such losses are so written off the society, if it is affiliated and indebted to a Central Bank, shall obtain the approval of the Central Bank in writing which approval shall be given after consultation with the Assistant Registrar, and shall be countersigned by him. If the society is not so affiliated, or if the society is so affiliated, and is not indebted to the Central Bank, it shall first obtain the approval of the Assistant Registrar in writing and;

(iii) if the society itself is a Central Bank the approval of the Provincial Cooperative Bank, given in consultation with and countersigned by the Registrar shall first be obtained;

Provided further that the Assistant Registrar or the Registrar as the case may be may while according or countersigning the approval impose such conditions as to the restoration of part or whole of the amount written off to the reserve fund from out of future profits, as he deems fit.

13. Interblending.

For the purposes of sub section (1) of Section 34 a loan means and includes a deposit made by one society with another society.

14. Accounts, returns and documents.

(1) Every credit society shall keep the following accounts and books , viz.

a. A register of members including persons nominated under section 27;

b. A register of shares and debentures (where capital is raised by shares or

debentures;

c. A share transfer register (where capital is raised by shares of debenture

d. Cash account

e. Members loan account.

f. Deposit Account.

g. Loan register.

h. Interest account.

i. Expense account.

j. Bank account.

k. Minute Book, recording the proceedings of general meetings;

l. Minute book, recording the proceedings of the committee.

m. Register of member’s credit worthiness;

n. Such other accounts and books as may from time to time be prescribed by the Registrar.

Provided that the Registrar may exempt any society or class of societies from the operation of clause (m) mentioned above.

(2) Societies other than credit societies shall keep the accounts and books mentioned in clauses (a), (b), (k) and (i) of sub rule (1) and such other accounts and books as may be approved or form time to time required by the Registrar.

(3) The Registrar may, by order in writing direct any society to get any or all the accounts and books required to be kept by it under sub rule (1) and (2) written up to such date in such form and within such time as he may describe.

(4) The accounts and books by a society shall be kept in such place and by such person as the Registrar may direct.

15. By whom copies of documents or entries my be certified.

For the purpose of Section 31 copies of documents or entries in the books of a society may be certified by any officer of the society

16. Inspection of Documents.

Any member of the public shall be permitted on payment of a fee of 1 rupee for each inspection, to inspect for any lawful purpose any public document (exclusive of public documents privileged under articles 6, 7, 12 and 14 of Qanun-e-Shahadat Order 1984 filled in the office of Registrar.

17. Registrar may require statement and returns to be furnished.

The Registrar and may required any society to submit any statement and any periodical return of receipts and disbursements on such dates and in such form as he may prescribe. Every housing society shall submit a property register to the Registrar on such dates and in such form as he may prescribe.

18. Periodical financial statement to be furnished.

All registered societies classified by the Registrar as Central Bank or as Urban Banks shall submit to that officer a quarterly finance statement in the form prescribed by the Government for the quarters and ending 30th June respectively.

19. Annual Balance Sheet.

(1) On or before 15th September of each year, the Committee of every society shall publish an annual balance sheet showing (a) the profit and loss (b) the receipt and expenditure of the previous financial year and (c) the assets and liabilities as they stood on June 30th. The balance sheet shall be in such form as the Registrar may prescribe or any society or class of society of societies. This balance sheet shall be open to the inspection of any member during office hours at the September 30th to the Registrar and to the Auditor appointed by the Registrar for the audit of that society.

(2) In case of Taluka Development Association the financial year will being from 1st April, and close on 31st day of March.

20. Transfer of interest.

The name and address of every person nominated under section 27 an any revocation or under rule 14, sub rule (1) clause (a).

21. Nomination of persons.

A member may, be writing under his hand deposited with the society during his life time or by a statement signed by the member made in any book kept by the society nominate any person to whom under section 27 his share or interest in the society or so much thereof as may be specified in such nomination shall be paid or transferred on his death.

22. Distribution of profits.

In calculating the profit of a society for the year all accrued interest which is overdue shall be deducted form the gross profits of the year before the net profits are arrived at. All accrued interest, that has been so deducted from the profit of the year and is actually recovered during the subsequent year.

23. Distribution of bonus.

No registered society shall distribute any bonus or shares beyond or shares beyond declared under section 38.

24. Payment of dividend by consumer’s producers or housing society.

No society shall pay its shares holders a dividend exceeding 6/4 per cent in any year on the paid up hare capital standing on the name of each shareholder. If a society is unable to pay a dividend of 6/4 per cent in a year, it may make good the deficit by paying the difference out of profits in future years.

25. Distribution of balance of profits.

Any distribution of the remaining balance of profits under section 40 and after the distribution of dividend under section 38 shall be in accordance with bye laws of the society regarding such distribution. It shall be in proportion to the wages earned by each member in the case of producer's society, and to the amount of goods purchased by each member, or, where it is so provided in the by laws, by each member or customer, in the case of consumer society. It shall also e in proportion to the amount of rent paid by each member in the case of a Housing Society and in the case of a resource society may be in proportion to the goods obtained or sold through the society by each member, or to the loans borrowed from, and the deposits made with, the society by each member.

26. Restrictions on distribution of funds by way of bonus dividend or otherwise.

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.

Provided that any loss or portion of loss on account of bad debts written off during the year may not be debited if it be deducted from any bad debt or with the sanction of the Registrar from the Reserve fund.

27. Investment of funds.

With the previous sanction of the Registrar any society may invest its funds or a portion thereof (a) in the shares of the State Bank of Pakistan constituted under the State Bank of Pakistan Order, 1948 (b) in the purchase or leasing of land or building and (c) in the construction of buildings, provided that the purchase of such land or the construction of such buildings, is likely to be advantageous to the society in the conduct of its business.

28. Reserve fund.

The reserve fund of any registered society may be utilized in the business of the society, or be invest or deposited in any of the ways mentioned in clauses (a), (b), (c) and (d) of section 37. The Registrar may, for reasons to be communicated in writing by him to the society, by general or special order direct that the latter course be adopted. In the case of a society constituted with the object of cooperative housing on a co-partnership tenancy basis the reserve fund may be utilized for expenditure on the maintenance, repair and renewal of the buildings of the society.

29. The Levy of audit fees.

Registrar may, with the previous sanction of the Provincial Government, levy audit fees on all societies provided that in the case of an agricultural cooperative 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 cooperative year. The Registrar shall employ the proceed of such audit fees in maintaining a staff to audit the accounts of society. Such audit fees shall be recoverable under section 65.

30. [Deleted].

31. Audit of account of consumer’s societies.

(1)Consumer’s Societies with working capital exceeding Rs.50,000/- may at their option arrange for their own annual audit independently. The societies arranging for their own audit shall report the fact to the Registrar before the 1st of May every year. Failing the receipt of such a report from any Consumer’s Society before the 1st May in any year, the Registrar shall arrange for the compulsory audit of such society by an official auditor. When the audit is made by an official auditor, a fee of Rs. 10 per day to the whole period of the audit (a portion of day being treated as full day) shall be recovered from the society and credited to Government.

(2) If, after an inquiry under Section 43 or an inspection under Section 44, the Registrar has grounds for thinking that the audit arranged independently by the society has been serious defective, he may order the official auditor to make a fresh audit of the society, and may recover the cost of the audit from the society.

32. Arbitration.

When a dispute has been referred to the Registrar under Section 54, the Registrar or his nominees, shall issue a notice to all parties, and unless either of the parties desired with 15 days of the issue of such a notice that the matter be referred to arbitration, shall proceed to decide the dispute himself.

When either of the parties desire that the matter be referred to arbitration, the Registrar (or his nominee shall call each party to nominate his arbitrator within 15 days, and to send statement signed by the proposed arbitrator about his willingness to serve as an arbitrator. When there are more persons than one on each side, the principal party on each side will have the right to nominate the arbitrator. In such cases the Registrar will decide who is the principal party and his decision shall be final.

When either of the parties fails to make a nomination within the period aforesaid, the Registrar may nominate an arbitrator on behalf of such party.

The Registrar or his nominee will act as Chairman of the Committee of three Arbitrators. He will fix the date and place of hearing, the dispute and carry on the necessary correspondence in connection with the disposal of the case.

When any dispute is referred to the Registrar’s nominee or to three arbitrators for decision and is not decided by them within two months or such further period as the Registrar may allow the Registrar may decide the dispute himself or refer it again to his nominee for decision.

33. Registrar may appoint any person to be his nominee for any specified area.

The Registrar, by Special order to be notified in the Provincial Gazette may appoint any person to perform the duties of his nominee for disputes arising in any one or more cooperative societies within any area specified in the order for a period to be specified in the order. Such period shall not ordinarily exceed one year but may be extended by further special order for a further period not exceeding one year in each case.

34. Payment of expenses of arbitration.

The Registrar or his nominee and the arbitrators shall have power to order the expenses of determining the disputes, to be paid out of the funds of the society, or by such party or parities to the dispute as they think fit. According to a scale lay down by the Registrar. The Registrar may fix the fees to be paid to his nominee out of the expenses so recovered.

35. Procedure in arbitration proceedings.

The Registrar or his nominee shall record a brief notice in English or in vernacular of the evidence of the parties and witness, who attend, and upon the evidence so recorded, and upon consideration of any documentary evidence produced by either side, a decision or award, as the case may be, shall be given in accordance with justice, equity and good conscience, and shall be reduced to writing. If any party duly summoned to attend fails to appears, the dispute may be decided ex-parte. In cases where three arbitrators are appointed, the opinion of the majority shall prevail. In case of equality of votes, it shall be decided by the Registrar himself.

If an arbitrator nominated by a party remains absent for two consecutive meetings without the permission of the Registrar or his nominee the Registrar, (Where he is an arbitrator) or his nominee, as the case may be and the other arbitrator may proceed with the case and give award. In case of difference of opinion between the Registrar (where he is an arbitrator, and the other arbitrator), the decision of the Registrar shall prevail, and in case of difference of opinion between the Registrar’s nominee and the second arbitrator, the matter will be decided by the Registrar himself.

36. Appearance by pleaders.

In proceeding held under rules 32 to 35, no party shall be represented by a legal practitioner.

37. Execution of arbitrator order in special case.

Subject to the provisions of Section 59 of the Act, the Registrar may by an order in writing specially authorize any officer of the Cooperatives Department not below the rank of a Sub-Auditor or a Supervisor of supervising union to call for and send arbitration order obtained by any society for execution. The societies in respect of which those powers are to be exercised by the officer so authorized shall be mentioned in the order.

37-A. When recovery of arbitration awards is made by village officers, the Registrar shall have power to order the expenses of such recovery to be paid out of the society or by such party or parties in default as he may think fit according to a scale laid down by the Registrar.

38. Liquidation.

Where a Liquidator has been appointed under Section 47, the following procedure shall be adopted.

(1) The appointment of the Liquidator shall be notified by the Registrar in the Provincial Gazette.

(2) The Liquidator shall at once take charge of the book and property and assets of the society and publish by such means as he may think proper a notice requiring all claims against the dissolved society to be notified to him within two months of the publication of the notice. He shall thereafter proceed to take such further action as empowered to take under the Act. All liabilities recorded in the account books of a society shall be deemed to have been duly notified to the Liquidator.

(3) The Liquidator shall make separate orders against the various members and past members of the society, noting the amount to be realized form each as a contribution under clause (d) of Section 50 and as the cost of liquidation under clause (i) of the said section. These order shall be submitted for approval to the Registrar, who may modify them or refer them back to the Liquidator for further inquiry or other action or may forward them for execution under Section 59.

(4) If the sum assessed against any member is not recovered the Liquidator may frame a subsidiary order or orders against the any other member or members to the extent of the liability or each of the debits of the society until the whole amount due from members is recovered, and these orders shall be dealt with in the same way as orders under sub rule (3).

(5) The Liquidator shall submit a quarterly progress report to the Registrar in such form as the Registrar may require.

(6) All funds in the charge of the Liquidator shall be deposited either in the Post Officer Savings Bank or in a Central Cooperative Bank, and shall stand in his name.

(7) Where recovery of the dues is made by village officers the Liquidator may pay to such officers, remuneration at the rate of one per cent of the amount collected by such officers.

(8) The Registrar shall fix the amount of fee, any to be paid to the Liquidator.

(9) At the conclusion of the Liquidation a general meeting of the members of the dissolved society shall be called at which the Liquidator shall summaries his proceedings, point out the causes of the failure of the society and report what sum, if any, remains in his possession after meeting all the liabilities of the society, as determined under the rules.

(10) The record of a society that is being wound up shall be kept in such place and by such person as the Registrar may direct.

39. Execution of orders.

Every order passed by the Registrar under Section 50-A and every order issued under Section 55 shall if not carried out, be executed, in accordance with Section 59.

39-A. Recovery of costs of execution when property is not sold.

When recovery is made under Section 59 in execution of any order referred to in the said section, and the property is not sold in such execution the Registrar may order the expenses of such recovery to be paid by any party in default according to a scale laid down by him not exceeding in the aggregate five per centum of the amount of the dues.

40. Disposal of records of society whose registration is cancelled.

(1) When an order directing a society to be wound up is issued under Section 47 and no Liquidator is appointed, the officers of the society which is wound up shall, 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 Auditors.

(2) When the affairs of a society for which a Liquidator has been appointed, have been wound up and an order cancelled the registration is made under Section 49, 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 Assistant Registrar together with an account of his expenses, showing how the balance has been disposed of and attaching the receipt of the person to whom it was handed over.

(3) All the books and records of a society whose registration has been cancelled and the proceedings of Liquidation completed shall be destroyed by the Assistant Registrar, after the expiry of two years from the date of the order canceling the registration of the society.

41. Interest in Liquidation proceedings.

On any debt which is due from a society that is being wound up, the creditor may prove for interest up to the date of the Registrar’s order for winding up at a rate which, in the case of the Provincial Cooperative Bank or Cooperative Bank or a District Cooperative Bank or other Cooperative Bank permitted by the Registrar to finance societies shall be the contract rate, and in other cases shall be a rate to be fixed by the Registrar and not exceeding the contract rate;

Provided that, if nay surplus assets remain after all liabilities including liabilities on shares, have been paid off, further interest on such debts as a rate to be fixed by the Registrar and not exceeding the contract rate may be allowed to creditors from the date mentioned above up to the date of the repayment of the principal.

42. Service or summonses, Miscellaneous.

Summonses issued by the Registrar, or by a person authorized to hold an inquiry or to make an inspection or by the Auditor or Liquidator, or by the Registrar’s nominee, under Section 58, shall if sent for service to a Mukhtiarkar by such officer.

43. Fees to be credited to Government.

All (fee) fines levied under Section 61 and rule 42 shall be credited to Government.

44. Mode of serving summonses.

(1) A summon issued by any of the officers mentioned in rule 42 may be served personally or through a Mukhtiarkar or any member of the Cooperatives Department or any Honorary Organizer or Chairman or Secretary of the society or by registered post acknowledgement paid.

(2) The serving officer shall, in all cases in which summons has been served, endorse or annex, or cause to be endorsed or annexed on or to the original summons a return stating the time when and the manner in which the summons was served and the name and address of the person (if any) identifying the person served and witnessing the delivery or tender or the summons.

(3) The person issuing the summon, may examine the serving officer on oath, or cause him to be so examine by the Mukhtiarkar through whom it is served, and may make such further inquiry in the matter as he thinks fit and shall either declare that the summons has been duly served, or order it to be served in such manner as he thinks fit.

45. Restriction on membership of two credit societies.

(1) No person being a member of a cooperative credit society or any society dispensing credit other than a land mortgage bank or a central financing society or a sale society, shall be a member of any other society of a similar type without the general or special sanction of the Registrar and where a person has become a member of two or more such societies any or all such societies shall be bound to remove him from membership upon receiving written requisition from the Registrar to that effect.

(2) Credit societies or societies dispensing credit shall not admit as members an members an unregistered firm partnership or association of individuals.

45-A. The Registrar shall have power to expel from any registered society a member who in the Registrar’s opinion is a persistent default or who does any act prejudicial to the interest of the society.

Provided however that the member so expelled shall always have the right to appeal to Government against such order.

46. Societies not to be involved in controversial matters of a religious character.

No society may take any action which would involve the society in the discussion or propagation of controversial opinions of a religious character, and the Registrar may prohibit any action or rescind any resolution which in his opinion is of such a tendency.

47. Registrar to keep a record of names, addresses and bye laws of societies.

The Registrar shall keep a register of the names and addresses of all registered societies and shall record a copy of the registered bye laws and subsequent amendments to the bye laws of such societies.

48. Society may be wound up if membership isreduced.

(1) Notwithstanding anything contained in the byelaws of a society the Registrar may be order published with reasons therefore in the Official Gazette, supersede the committee or a society for a period to be specified in such order.

(2) The period of suspension specified in an order under sub rule (1) may from time to time be extended by the Registrar.

(3) All powers and duties of the committee shall, during the period of super-sessions be exercised and performed by such person or persons not exceeding 9 as the Registrar may from time to time appoint in this behalf.

(4) The person or person appointed under sub rule (3) shall hold office for a period of 2 years.

(5) On the expiry of every 2 year period, if the order of super-session is still in force, fresh appointment of person or persons shall be made by the Registrar for a period of 2 years or for the period during which the order of super-session is in force whichever is less.

(6) Before making an order under sub rule (1) or sub rule (2) the Registrar shall.

(7) In the case of the Provincial Cooperative Bank, the appointment of a person or persons under any of the foregoing sub rules or the filling of any vacancy shall be made by the Registrar with the previous approval of the Provincial Government.

(8) Nothing in this rule shall affect the byelaws of the society relating to the meetings of the committee.

(9) Nothing in this rule shall be deemed to affect the powers of the Registrar to cancel the registration of a society under Section 47.

49. Issue of proclamation prohibiting private transfers of property.

(1) The Registrar Liquidator or Assistant Registrar acting under clause (a) or clause (b) of sub section (1) of Section 59 of the Act, shall at the same time that he signs a certificate affecting any property issue a proclamation in the form prescribed in Schedule B annexed hereto and in the case of immovable property, shall also forward a copy of the proclamation to the Mamlatdar of the taluka in which the property is situated.

(2) The Malatdar shall cause an entry about such certificate to be made in the Record of Rights.

50. Transfer of property under Section 59-A.

(1) When in execution of an order sought to be executed under Section 59 any property cannot be sold for want of buyers; if such property is in the possession of the defaulter, or of some person on his behalf or of some person on his behalf or of some person claiming it under a title created by the defaulter subsequently to the issued of the certificate by the Registrar, Liquidator or Assistant Registrar under clause (a) or (b) of sub section (1) of the said section, the officer conducting the execution shall as soon as practicable report the fact to (a) the Court or the Collector as the case may be and (b) the society which applied for the said order.

(2) On receipt of a report under sub rule (1) the society may, within one month from the date of the receipt of the report, submit an application in writing to the Court or the Collector, as the case may be, stating the terms and conditions on which it agreed to take over such property.

(3) On receipt of an application under sub rule (2) notices shall be issued to the defaulter and to all persons known to be interested in the property, including those whose names appear in the Record of Rights as persons holding any interest in the property about the intended transfer.

(4) on receipt of such a notice the defaulter or any person owing such property or holding an interest therein by virtue of a title acquire before the date of the issue of a certificate under Section 59 may within one month from the date to the receipt of such notice deposit with the Court or the Collector, as the case may be, for payment to the society sum equal to the amount due under the order sought to be executed together with interest thereon and such additional sum for payment of costs and other incidental expenses as may be determined in this behalf by the Court of the Collector, as the case may be.

(5) On the failure of the defaulter, or any person interested or any person holding any interest in the property to deposit the amount under sub-rule(4) the court or the collector, as the case may, be, shall direct the property to be transferred to the society on the conditions stated in the certificate in the form prescribed in Schedule “C” annexed hereto.

(6) The certificate granted under sub rule (5) shall state whether the property is transferred to the society in full or partial satisfaction of the amount due to it from the defaulter.

(7) If the property is transferred to the society in partial satisfaction of the amount due to it from the defaulter, the Court or the Collector, as the case may be, shall, on the production by the society of a certificate signed by the Registrar recover the balance due to the society in the manner prescribed in Section 59.

51. The Deduction from salary or wages under sub section.

of section 65-A shall not exceed one third, round off in the manner provided in this rule, of the salary or wages payable to a member of a society the rounding off shall be done by deleting all fractions of a rupee up to but excluding half and counting half and all higher fractions as one rupee.

52. Power and duties of the Committee.

(1) The business of every registered society shall be managed by the committee subject to the provisions of the Act and these rules and subject to such byelaws not being inconsistent with the Act or these rules as have been passed in general meeting and registered under the Act; but no byelaws registered under the Act, shall invalidate any prior act of the committee which would have been valid if that byelaws had not been registered.

(2) The committee shall take such security from servants and officers of the society as the committee may decide with the sanction of the Registrar.

(3) If, in the opinion of the Registrar, the number of persons who are employed by a committee as officers or servants or whom a society proposes to employ or the remuneration assigned by the committee to those persons or to any particular person is excessive the committee shall, on the requirement of Registrar, reduce the number of the said persons; or the remuneration of the said person or persons; Provided that the committee may appeal against any such requirement to the Provincial Government, whose decision shall be conclusive.

(4) Notwithstanding anything contained in the byelaws of any society, except societies with unlimited liability and those having less than Rs. 20,000/- paid up share capital, a committee shall not sanction a loan in any form to a member of the committee or to an officer or servant of the society without the prior sanction of the Registrar;

Explanation. For the purpose of this sub rule, grant of a loan includes surety ship for a loan.

(5) Notwithstanding any thing contained in the byelaws of a society other than a land mortgage bank, the committee shall not advance a loan in any form of a total period exceeding three years inclusive of extensions, if any, and shall not deposit or invest its funds in the 1st mortgage on immovable property under section 37 of the Act, without the prior sanction mentioned in sub rule (4) of this rule.

(6) Notwithstanding any thing contained in the byelaws of a society the committee shall not grant any extension to a member in respect of debts or demands due by such member to the society, after the dispute has been referred to arbitration under section 54 without the prior sanction mentioned in such rule (4) of this rule.

(7) The committee of every bank shall frame rules with the sanction of the Registrar to regulate the grant of loans to members of the society. The rule shall prescribe the maximum limits of loans which can be granted to a member, inclusive of loans for which a member is surety under the various classes of loans. Such rules may be amended with the prior sanction of the Registrar.

53. Qualification of members of committee.

(1) No member of a society shall be on the committee elected under the byelaws.

a. Who

i. has been sentenced by a criminal Court to imprisonment or whipping for an offence punishable with imprisonment for a term exceeding six months, or to transportation such sentence not having been subsequently reversed or quashed if, an, so long as such sentence has not expired; or

ii. has been removed from office under rule, 48 unless he has by an order which the Registrar is hereby empowered to make in this behalf, has been relieved from the disqualification arising on account of such sentence or removal from office; or

b. is an uncertified bankrupt or an un discharged insolvent or legally disabled, to contract; or

c. Who is less than 21 years of age; or

d. Who is of unsound mind; or

e. Who is declared by the Registrar to be a persistent defaulter; or

f. Who is a servant or officer and at the same time a borrower of the society.

(2) In cooperative banks and in such societies as, have a paid up share capital Rs. 20,000/- or above no members of the society shall be on the Committee.

a. who suffers from any of the disqualification specifiedin sub-rule(1); or

b. who is a borrower or a surety of a borrower unless he has obtained the previous permission from the Financing Bank to which the society is indebted or of the Federation or Union to which the society is affiliated or of the Registrar if the society is not so indebted or affiliated; or

c. who isinterested, directly or indirectly in any contract of employment with or under or by or on behalf of the society; or

d. who does not hold shares of the paid up value of at least Rs. 500/-; or

e. In case of represented of society, if he or the society of which he is a member, is a defaulter in payment of a loan to the bank or society from which he or it has borrowed a loan.

Provided, however that a person referred to in clause (e) of sub rules (1) or clause (a) of this sub rule may appeal to the Government for the removal of the disability operating in his case.

(3) The provisions of sub rules (1) and (2) of this rule shall apply not withstanding any thing contained in the bylaws of the society but shall not apply to the Punjab Provincial Cooperative Bank Ltd.

54. Investment of Funds.

A society may, with the previous sanction of the Registrar, invest its funds or any portion thereof in the purchase of lease of land or buildings or in the construction of buildings required for the documents of its business.

55. Power to make Rules.

The committee of any cooperative bank or society have a working capital of over rupees one lac, shall frame rules forregulating the appointment, removal, dismissal and promotion of its employees.