Bye-Laws of Cooperative Societies

Gujarat Cooperative Societies Act, 1961 and The Gujarat Cooperative Societies Rules 1965 provide for framework for cooperative society. But there are variety of co-operative societies and  it is not possible to cover the requirements of all the types of cooperative societies in a single legislation, i.e. . Therefore, there is a provision for framing bye-laws under Rule 5 of Gujarat Cooperative Societies Rules. 1965.

The definition of bye-laws is given under Sec. 2(2) as under:

“Bye-laws means bye-laws registered under this Act and for the time-being in force, and include registered amendments of such bye-laws. “

Different Stages of Byelaws

• Under Sec. 9, the bye-laws of the society are also registered along with the registration of the Society if the bye-laws are not contrary to the Act and the Rules.
• The bye-laws, registered along with the registration of the society are placed before the first Annual General Meeting under Rule 5. The first Annual General Meeting is for approval of bye-laws under Rule 5.
• Management Committee runs the society based on bye-laws, Act and Rules.
• Annual General Meeting and Special General Meeting are convened under Sec. 77 and Sec. 78 of the Act, wherein bye-Laws can be proposed to be amended.
• The Last Annual General Meeting is convened under Sec. 114(3) after the liquidation proceeding and before the cancellation of registration.

There is no provision for model bye-laws under the Act or Rules. However, Gujarat State Cooperative Union and District Cooperative union are getting the bye-laws printed for the facility of the public.

What can included in Bye-laws

List is illustrative and can have more details as per the requirement of each society.

1. Name and address of the society and its branches if any
2. Class or occupation of its members, if membership is proposed to be so restricted.
3. Area of its operation
4. Object of the society and its liability or unlimited.
5. Members related provisions.
   • Terms and qualifications for admission to membership, and
   • Disqualification of members
   • Rights and Liabilities of members
   • Shares to be held by members
   • Provision related to collection of dues incase of default by members
   • In case of credit societies, the conditions on which loans may be granted; the rate of interest the systems of calculation of interest; and in case of non-credit societies,
   • The mode of conduction business, purchase, sale, stock-taking and other like matters
6. The privilege, rights and liability of nominal, associate and sympathiser members.
7. Payment and acquisition of interest in the society before the rights of membership are exercised by the members
8. Rights of voting by a nominal, associate or sympathiser member and the voting rights of a federal society
9. Restrictions on borrowing from members and non members
10. Manner in which the loss of the society will be determined and its re-reimbursement by the members who has not disposed of his produce through the society and who is found guilty of a breach of the bye-laws of any such contracts.
11. The scale of remunerations to be paid to a member who has rendered any service to the society
12. Appropriation of profit for any other purpose which is not prescribed in sub-section (2) of Section 66.
13. Manner of summoning general meetings under Section 73 and the manner of making, altering abrogation bye-laws.
14. Constitution and election of the Managing Committee and it s powers and duties.
15. Number of members required for the requisition of a special general meeting
16. Utilisation of surplus assets of the society under section 115
17. Manner in which capital may be raised
18. Mode of custody and investments of funds
19. Distribution of profits.
20. Responsibility of Chairman
21. Responsibility of Secretary
22. Related to books of account

Members

Lack of awareness / knowledge of various rules, regulation, bye-laws and applicable society laws leads to many issues with the housing society. Thus it is advisable, for members of society to go through the bye-laws of the society. As discussed in article “Member’s Right : Inspection of Books and Records” members can get copy of Bye-laws from society.

Reference

1. Gujarat Co operative Societies Act, 1961
2. Rule 5 of Gujarat Cooperative Societies Rules, 1965
3. Model Bye-laws