Byes laws, Rules and Regulations – When, where, how applicable
Managing Committee’s of many cooperative societies make their own laws and bye-laws and implement it. For the record and information, let us once and for all state that this is highly illegal – and any adverse consequences to formulation of such laws, the Managing Committee members can be and should be collectily and individually penalized.
For one, the courts right from cooperative to Supreme Court have clearly stated that no bye-laws for a cooperative society can be passed whether in AGM , SGM or anywhere, which are contrary to the Constitution of the country and go against the Cooperative Society Act.
It is again a big myth many Managing Committee’s perpetutate, that `We are still following old bye-laws and have not yet adopted New laws’. If a statue has been approved by the legislator and gazetted.. it is automatically applicable to all the Registered Cooperative societies. When the Parliament passes a lwa, does each and every citizen have to approve it?
Even the bye-laws, which are specially proposed and enacted by certain cooperative societies (keeping within the frame work of the Cooperative Act) have to follow the following procedure, before they can be implemented.
Passs the law/amendment in AGM/ SGM with proper voting – not show of hands.
Record How many Ayes and how many Nyes
Pass it as a resolution and send it to the Deputy Registrar along with the minutes of the meeting.
Give it a Bye Law Nos and sub-section No and deliver to the deputy registarar with a covering letter declaring that the enclosed amendment/ bye-law has been approved by the majority member in the AGM/SGM taken place on such and such date.
Take a special received stamp from the Deputy Registrar’s Office.
Normally, the Deputy Registrar should reply to you within 90 days. Which in most of the cases does not happen. He does not even bother to acknowledge it. After passing of 90 days, the managing committee should pass a resolution since there has been no response from the deputy registrar in the statutory period, the said amendment/buy-law be adopted and incorporated.
The document on which the Registrar’s office has put a received stamp, be pasted into the Bye-laws of the society and the a copy of the new amendment/bye law be circulated to the members informing them that it has been incorporated and adopted now… and inform the members the date from which it will be applicable.
No amendments/bye-laws can be with retrospective effect.
Unless the above procedure is foolowed, no amendment/bye law, whether approved by the AGM or not, is applicable.
Here are some court decisions which have been delivered by various courts over the years :
n A bye?law of the society has no force of statute until it is registered. But such registration cannot be validated if it is invalid law. Thus Bye?law must bee concurrent to the Co?operative Societies Act and Rules it should not be contrary to the Act and Rules. (Omprakash V.G.V. Koimtur, 1966 Mah.LJ.514: 68 Bom.LR?176: AIR 1967 Bom.7).
n Validity of Registered Bye?laws?Bye?laws of a society should not be contrary to the Act and Rules. If the Bye?laws are registered then it can take effect, unless bye?laws are contrary to the law then registration cannot validate the bye?laws. (Omprakash Gowardhandas Singhania vs G.V.Koimattur, 1966 Mah.LJ. 514: AIR 1967 Bom.7).
n Bye?law of the society laid down that if the Government wanted to make any change in Board of Directors nominated or appointed, changes shall be effected after consulting Indian Dairy Corporation. Consultation as to change in Board of Directors must be prior as it is a condition precedent. The requirement of prior consultation is mandatory and not directory. (Eknath Vishnu vs State, 1985 Mah.LJ.728).
n The General Body of the society passed a resolution which wanted to amend the bye?law of the society which if wanted to reduce period of three years of tenure of Board of Directors to one year. The Registrar to whom resolution of general body was sent returned the proposed amendment to the bye?laws as the same not in tune with model bye?laws. The Chairman suo motu re?submitted amended bye?laws. The bye?law in such a situation cannot be said to have been amended. It was further observed that merely because amended bye?laws were placed in the subsequent meeting of the general body for information is not compliance with Rule 12 of the Maharashtra Co? operative Societies Rules. (Eknath Vishnoo vs State of Maharashtra, 1985 Mah.LJ.727).
n It was held that no amendment of bye?laws of a society shall be valid until registered “under this Act”. The words “under this Act ” leave no doubt that an amendment, whether at the instance of the Registrar or the society, would become valid and come into force only on the date of its registration. There is nothing in section 14 to indicate that an amendment proposed by the Registrar would become or effective as soon as it was accepted by the society at its annual general meeting and that its registration was not necessary. (Devgad Taluka Sahakari Kharedi Vikri Sangh Ltd. and 9 others vs Krishnaji Govind Bapat, 1967.CTD?374)
n Framing of the rules is within the power of the Managing Committee to do and section 13 of the Maharashtra Co?operative Societies Act, 1960 imposes the condition of obtaining sanction only in respect of bye?laws and not the rules. Therefore, section 13 has no application regarding rules (Guatam Co?operative Housing Society Ltd. vs Kabul Kavdu Makhate and another, 1965.CTD?172).
n The term `regulate’ in this section expresses that there is a right conferred on the individual member but the mode of exercise of that right can be regulated by the rules and bye?laws. The power to regulate does not include power to provide total prohibition. (All India Handloom Fabrics Marketing Co?operative Housing Society Ltd. vs Pritam Singh, 1985 CTJ. 33).
n Jurisdiction of High court under section 46?A finding as to whether circumstances justify the exercise of a discretion or not. Unless clearly perverse and patently unreasonable is, after all a finding of fact only which cannot be interfeared with under Art.227 of the Constitution. (Ganpat Ladha vs Shashikant Vishnu Shinde, AIR?1978 SC955).
n When a charge is created in the manner prescribed by this section and rule 4B, it becomes enforceable without being required under the Indian Registration Act, 1980. (Sharado vs AtaniMunicipality, 44 Bom.LR? 849, 853).
n Restrictions imposed by section and section 48A of the Maharashtra Co?operative Societies Act upon the commission agents are reasonable and are in the interest of general public and are wholly saves by Article 19(6) of the Constitution. (Vyapari Association vsState of Maharashtra, (1985) 2 Bom.CR?603: AIR?1986 Bom.302 (D?B): 1986 CTJ. 254).
n It was held that Bye?laws made contrary to the statutory rules has no effect and the rules will prevail. (In M.G.Somwanshi and & others vs Kasim Saheb Anwarsaheb Gusijerga and anothers, (1966.CTD?233), )
n Effect of the Bye?laws?The bye?laws of the Society constitute a contract between a member and the Society and unless it is prohibited expressly by any enactment or rules or is contrary to public policy, the bye?laws must govern the members as well as the Society. The bye?laws are registered under the Maharashtra Societies Act, 1960. The bye?laws are meant for internal management of the society. (YD Bole and another vs Shivaji Mahadev Nagvekar, 1964.CTD?122).
n The term `society’ and `Committee’ go together. The society cannot work without a Committee, and the Committee works or acts only for the society. Management of every society vests in a committee under section 73(1) of the Act. The power of Management of the society are vested in a body of persons, the society cannot run unless the body is vested with powers, the body is called the committee. (Wasudeo Pandurang Mokhare vs Registrar, Co? operative Society, 1989 CTJ. 743 (D?B).
n The bye?laws are registered under the Maharashtra Societies Act, 1960. The bye?laws are meant for internal management of the society. If the bye?laws are inconsistent with the provisions of the Act or Rules made under the Act they will be of no effect. (Shantilal vs Vijay Pawar, 88 Bom.LR?535).
n Bye?laws Interpretation of?Clause 25 (viii) of the Bye?laws of the Amravati District Central Co?operative Banks provided for disqualification of servant who operated within the area of Bank for election on Board of Directors. The Court held that Employees of the Bank itself was not disqualified. (Purshottam vs Gopalrao, 1970 Mah.LJ.895).
n Bye?laws as such does not have force of statute but they may be binding between the persons affected by them. (Co?operative Credit Bank vs Industrial Tribunal, Hyderabad, AIR?1970 SC 24).
n Compliance of bye?laws?Where the bye?laws which are binding on the Society lay down procedure it is not open to a society or its office bearers to commit a branch of it on the ground that they were following a certain practice in the previous year. If the Society does not want the procedure prescribed the bye?laws, the obvious course is not to ignore it altogether but to take steps to amend it after passing and obtaining sanction of the Registrar. (The Konkan Co?operative Housing Society Ltd. Bombay and Ors. vs Subarao Venkatesh Bhujle and Ors. 1964. TD?Note No. 3).
n Unless the bye?laws which cast a duty also provide for a penalty for omission to perform the duty, honorary office bearers are not liable for the loss sustained by the Society by reason of the omission on the part of the office bearers to perform certain functions. (Navjivan Vividh Karyakari Sahakari Vikas Seva Society Ltd. vs Malhar Satyappa).
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