KCS Act 1969 - Section 1 and 2 PDF

KERALA CO-OPERATIVE SOCIETIES ACT 1969 KCS ACT:  The Act is to be enacted by legislature which gives the list of the law.  There are 16 chapters in KCS Act  Number of Scheduled attached to KCS Act :3  Act contains 110 sections  KCS ACT came into fo...

KERALA CO-OPERATIVE SOCIETIES ACT 1969 KCS ACT:  The Act is to be enacted by legislature which gives the list of the law.  There are 16 chapters in KCS Act  Number of Scheduled attached to KCS Act :3  Act contains 110 sections  KCS ACT came into force on 15-5-1969  Act number 21 of 1969  Schedule I – List of Apex and Central Societies to which appointments are done by Public Service Commission -section 80 (3A)  Amendment of Schedule I.—In the Schedule I of the principal Act, after serial number 15, the following serial numbers and  entries shall be added, namely:—  16. Kerala State Women Co-operative Federation Limited (VANITHAFED).  17. Kerala State Co-operative Tourism Federation Limited (TOURFED).  18. Kerala State Labour Co-operative Federation Limited (LABOURFED).  19. Kerala State Co-operative Hospital Federation Limited (HOSPITALFED).”.  Schedule II- Co-operative Principles. Section – 2(eccc)  Schedule III – Time limit – Section 69(4) KCS RULES  KCS Rules came into force on 14-7-1969  The Rules for Sec 80 came in to force on 01.01.1974  There are 15 Chapters in KCS Rules  KCS Act contains 201 Rules.  Rules are framed by the government to implement the provisions in the Act.  Government have the power to frame the Rules as per section 109 of KCS Act  Number of Appendix attached to KCS Rule 3  Appendix I- Registers to be maintained by State Co-operative Union and Circle Co-operative Unions.  Appendix II- Forms – KCS Rule 2(f)  Appendix III – Classification of societies according to type and financial position/Staff pattern of various types of co-operative societies- section 80 (3AA). KCS ACT 1969 PREAMBLE  An Act to consolidate, Amend and unify the laws relating to co-operative societies in the state of Kerala.  It enacted in the 19th year of Republic of India  KCS Act Major Amendments  1.The Kerala Co-operative Societies (Amendment) Act 1999.  Act 1 of 2000 came in to force on 01.01.2000  Known as First Amendment Act  2.The Kerala Co-operative Societies (Amendment) Act 2013.  Act 22 of 2013  Known as Second Amendment Act  3.The Kerala Co-operative Societies (Amendment) Act 2023.  Act No:9 of 2024  Known as Third Amendment Act.  The Bill as passed by the Legislative Assembly received the assent of the Governor on the 26th day of April, 2024.  Published in the Official Gazette on 7th June 2024. KCS ACT Chapter 1 – Preliminary: Section 1 and 2 Section 1: Short title, extent and commencement (1) This Act may be called the Kerala co-operative Societies Act, 1969 (2) It extends to the whole of the state of Kerala (3) It shall Came into force on such a date as Government may by notification in the gazette.(This Act came into force on 15/05/1969 by notification number 24314/C3/69 dated12/05/69)  Section 2: Definitions The Kerala Co-operative Societies (Amendment) Act 2023. Amendment of section 2.— In section 2 of the Kerala Co-operative Societies Act, 1969 (Act 21 of 1969) (hereinafter referred to as the principal Act),  in clause (ab), the following sentence shall be added at the end, namely:— “It includes the verification of accounts through software solutions, auditing of information system and migration of data, in the case of societies whose accounts are computerized”.  (ii) after clause (ac), the following clause shall be inserted, namely: “(ad) “administrative audit” means a close assessment of all affairs of the society, including constitution, management and establishment, maintenance of books and accounts and other records and internal control systems of the society and the extent to which its activities were useful in promoting the economic welfare of the members in accordance with the cooperative principles, and it includes Compliance Audit, Performance Audit as well as IT Audit;”  (iii) after clause (da), the following clauses shall be inserted, namely:-  “(db) “common software for Primary Agricultural Credit Societies”: means an effective software solution that covers the complete day-to-day functions of Primary Agricultural Credit Societies through a centralised architecture. (dc) “consortium” means a formal association of co-operative societies formed based on a common objective for establishing a new entity for raising funds for providing financial assistance for public purpose with the approval of State Government;”.  (iv) for clause (ib), the following clause shall be substituted, namely:— “(ib) “Federal Co-operative Society” means a society having more than one district as its area of operation and having the State Government, individuals and other co-operative societies as its members. But the number of individual members in the society shall not exceed twenty five per cent of the total membership in the society: Provided that the condition regarding number of individual members shall not be applicable to societies which are in existence before the commencement of the Kerala Co-operative Societies (Amendment) Act 2023.  (v) for clause (oaa), the following clause shall be substituted, namely:—  “(oaa) “Primary Agricultural Credit Society” means a service co- operative society, a service co-operative bank, a farmers' service co- operative bank or a rural bank having its area of operation confined to a Village, Panchayat or Municipality and the primary object or principal business of which is to provide financial accommodation to its members for agricultural purposes or allied agricultural activities, the rate of interest on such loans and advances and the area of operation shall be fixed by the Registrar: Provided that the restriction regarding area of operation shall not apply to societies or banks which are in existence on 1st January, 2000.”.  (vi) for clause (ob), the following clause shall be substituted, namely:— “(ob) “Primary Credit Society” means a co-operative society other than Primary Agricultural Credit Society, the primary object or principal business of which is to accept deposit from its members for the purpose of lending to its members or investments and the bye-laws of which do not permit admission of any other co-operative society as its member;”.  (vii) for clause (od), the following clause shall be substituted, namely:— “(od) “Primary Co-operative Society” means a society having jurisdiction over any specified area in one revenue district or more  than one districts in the State and having individuals, other societies, State Government and Local Self Government as its members;”. (viii) in clause (p), for the words “any person”, the words “any other officer of the State Government” shall be substituted.  (ix) after clause (qb), the following clause shall be inserted, namely:— “(qba) “Social Co-operative Societies” means primary co- operative societies formed for the welfare of social classes like differently abled persons, aged persons, transgenders, depressed persons or mentally challenged persons;”. (x) in clause (ra), before the words “State Co-operative Agricultural Rural Development Bank”, the word “Kerala” shall be inserted.  (xi) after clause (u), the following clause shall be added, namely:— “(v) “Youth Co-operative Societies” means co-operative societies which are registered to promote entrepreneurship, new technology, innovations and start-ups with the objective to generate employment and income and the welfare of youth and having its area of operation within one district.”.  SECTION 2 DEFINITION  Sec. 2 (a): -Apex Society : Apex Society means a society have the whole of the state as its area of operation and having as its members only other societies with similar objects and declared as such by the Registrar.  Sec 2 (aa): -Assisted Society : Assisted Society means a co-operative society which has received the government assistance in the form of share capital, loan, grant or any other financial assistance or any guarantee by government or from boards constituted by the government for repayment of loan, interest or deposits.  Sec 2 (ab): -Auditing of accounts of Co-operative society : Auditing means close examination of financial transaction overdue debts, if any, maintenance of books of accounts, documents and other records of a business, preparation of audit report and includes an inquiry into the affairs of the society and subsidiary institutions in order to ascertain the correctness of accounts and the extent to which its activities were useful in promoting the economic welfare of the members in accordance with the cooperative principles. “It includes the verification of accounts through software solutions, auditing of information system and migration of data, in the case of societies whose accounts are computerized”  Sec 2(ac):- Anand Pattern Milk Co-operative Society : Anand pattern milk co-operative society means a Primary Dairy co- operative society otherwise known as “Ksheerolpadaka Sahakarana Sangham” Registered in or after 1st day of January 1980 and functioning  as per the model byelaws of Anand Pattern, with the principal objectives of procurement, and marketing of milk and milk products and pouring marketable surplus of milk to the regional Co-operative Milk Producers Union and for providing inputs to the Dairy farmers, within the area of operation of the society.  Sec 2(ad):- administrative audit :- means a close assessment of all affairs of the society, including constitution, management and establishment, maintenance of books and accounts and other records and internal control systems of the society and the extent to which its activities were useful in promoting the economic welfare of the members in accordance with the co-operative principles, and it includes Compliance Audit, Performance Audit as well as IT Audit;”.  Sec 2(b): -Bye-laws : Bye-law means the registered bye-law of a Co-operative Society for the time being in force. Bye-law is the internal law of co-operative society.  Sec 2(c): -Circle Co-operative Union : Circle Co-operative Union constituted under Sec 88 Sec 2(d): -Central Society :Central Society means a society having Jurisdiction over one or more revenue districts, but not whole of the state as its area of operation, and having as its member only other societies and declared as such by Registrar or the Government.  Sec 2 (da): -Chief Executive : Chief Executive means any employee of a Co-operative Society by whatever designation called and includes an officer of the state Government or an employee of any other institution or co-operative society, who discharges the functions of a Chief Executive under the Act, the Rules or the bye-law.  Sec 2 (db):- Common software for Primary Agricultural Credit Societies : It means an effective software solution that covers the complete day-to-day functions of Primary Agricultural Credit Societies through a centralised architecture.  Sec 2(dc) :-consortium means a formal association of co-operative societies formed based on a common objective for establishing a new entity for raising funds for providing financial assistance for public purpose with the approval of State Government;”.  Sec 2(e): -Committee : Committee means the governing body of a co-operative society by whatever name called, to which the management of affairs of the society is entrusted. Sec 2(ea): -Co-operative Arbitration Court: Co-operative Arbitration Court means a Court constituted under Sec. 70A. Sec 2(eb):Consortium of lending scheme: Consortium of lending scheme means the scheme formed under Sec 57C.  Sec 2(ec): -Co-operative Development and Welfare Fund : Co-operative Development and Welfare Fund established under Sec 57A.   Sec 2(ecc): -Co-operative Ombudsman : Co-operative Ombudsman means the person or persons appointed under sub section (2) of Sec 69A.  Sec 2(eccc): -Co-operative Principles : Co-operative Principles means principles listed in Schedule II appended to this Act. (Manchester congress -1995- 7 principle).  Sec 2(ed): - Co-operative Service Examination Board : Co-operative Service Examination Board Constituted under Sec. 80B.  Sec 2(f):Co-operative Society or society: Co-operative Society means Co-operative Society registered or deemed to be registered under this Act.  Sec 2(g): -Co-operative Society with limited liability : Co-operative Society with limited liability Means society in which the liability of its members for the debts of the society in the event of its being wound up is limited by its byelaws. (i)To the amount, if any, unpaid on the shares respectively held by them or (ii) To such amount as they may, respectively, undertake to contribute the assets of the society.  Sec 2 (h): -Co-operative Society with unlimited liability : Co-operative Society with unlimited liability means a society the members of which are in the event of its being wound up, jointly and severally liable for and in respect of all its obligations and to contribute to any deficit in the asset of the society.   Sec 2 (ha): -Deposit Guarantee Scheme : Deposit Guarantee Scheme means deposit guarantee scheme framed under Sec. 57B.  Sec 2(hb): -Director of Co-operative Audit : Director of Co-operative Audit (DCA) appointed under Sec 63(1) and any officer to whom all or any of the powers of the Director of Co-operative Audit (DCA) may be delegated by the government, by general or special order under Sec. 63(3).  Sec 2(i): -Dispute : Dispute Means any matter touching the business, constitution, establishments or management of a society capable of being the subject of litigation and includes a claim in respect of any sum payable to or by a society, whether such claim be admitted or not;  Sec 2(ia): -District Co-operative Bank : District Co-operative Bank means a central society having jurisdiction over one revenue district and having as its members primary Agricultural credit societies, Urban co-operative Banks and the principal object of which is to raise funds to be lent to its members, including nominal or associate members, which existed under this act.  Sec 2(ib): -Federal Cooperative Societies : Federal Co-operative Society” means a society having more than one district as its area of operation and having the State Government, individuals and other co-operative societies as its members. But the number of individual members in the society shall not exceed twenty five per cent of the total membership in the society: Provided that the condition regarding number of individual members shall not be applicable to societies which are in existence before the commencement of the Kerala Co-operative Societies (Amendment) Act, 2023;”.  Sec 2(j): -Financing Bank : Financing Bank means a co-operative society having as its member only other co-operative societies and the main object of which is to raise money and lend the sum to its members.  Sec 2(k): -General Body Meeting : General Body Meeting means a meeting of the members who are entitled to vote in the affairs of the society.  Sec 2(ka): -Kerala State Co-operative Bank Kerala State Co-operative Bank means an apex society having primary agricultural credit societies and Urban Co-operative Banks as its members including nominal or associate members of the District Co-operative Banks who shall continue as nominal or associate members of the Kerala State Co-operative Bank.  Sec 2(l): -Members : Member means a person joining in the application for the registration of a co-operative society or a person admitted to membership after such registration in accordance with this Act, the Rules and the bye-law and includes a nominal or associate members.  Sec 2 (la): -Miscellaneous Society: Miscellaneous Society means such societies as may be prescribed and which accept deposit from theirs members only and no deposits shall be accepted from nominal or Associate members, and shall undertake business activities for the welfare of its members as per the bye-law and shall issue loans only to members. Provided that no agricultural loans or schematic loans shall be issued to the members except the loans for welfare activities.  Sec 2(m): -Nominal or Associate Member: Nominal or Associate Member means a member who possess only such privileges and rights of members who is subject only to such liabilities of a member as may be specified in the bye-law.  Sec 2(n): -Officer : Officer means the President, Vice President, Chairman, Vice Chairman, Secretary, Manager, Member of Committee or Treasurers and includes a liquidator, Administrator, and any other person empowered under the rules or the bye-laws to give direction in regards to the business of a co-operative society.  Sec 2(o): -Prescribed : Prescribed means prescribed by rules made under this Act.  Sec 2(oa): - Prescribed Period : Prescribed Period means the period of limitation specified in Schedule III appended to this act.  Sec 2(oaa): - Primary Agricultural Credit Society : Primary Agricultural Credit Society means a service co-operative society, a service co-operative bank, a farmers' service co-operative bank or a rural bank having its area of operation confined to a Village, Panchayat or Municipality and the primary object or principal business of which is to provide financial accommodation to its members for agricultural purposes or allied agricultural activities, the rate of interest on such loans and advances and the area of operation shall be fixed by the Registrar: Provided that the restriction regarding area of operation shall not apply to societies or banks which are in existence on 1st January, 2000.”.  Sec2(ob):-Primary Credit Society : Primary Credit Society means a co-operative society other than Primary Agricultural Credit Society, the primary object or principal business of which is to accept deposit from its members for the purpose of lending to its members or investments and the bye-laws of which do not permit admission of any other co-operative society as its member.  Sec2(oc):Primary co-operative Agricultural and Rural Development Bank : Primary co-operative Agricultural and Rural Development Bank means a society having its area of operation confined to a taluk, and the principle object of which is to provide for long term credit for agricultural and rural development activities.  Sec 2(od): - Primary Co-operative Society: Primary co-operative society means a society having jurisdiction over any specified area in one revenue district or more than one districts in the State and having individuals, other societies, State Government and Local Self Government as its members  Sec 2(oe): - Primary Tourism co-operative society : Primary Tourism co-operative society means a society having its area of operation confined to a taluk and the principal object of which is to promote, organize and assist tourism activities.   Sec 2(P): - Registrar : Registrar means the registrar of co-operative society’ as appointed under Sec 3(1) and include any other officer of the State Government on whom all or any of the powers of the registrar under this Act are conferred.  Sec 2(Pa): - Recruitment committees: Recruitment committees means the committees constituted under section 80(BB) for the purpose of conducting the selection and recruitment process of all categories of employees of the Regional Co-operative Milk Producer’s Union.  Sec 2(Pb): - Regional Co-operative Milk Producers Union : Regional Co-operative Milk Producers Union is a central society having principal objective of undertaking procurement, processing and marketing of milk and milk products and to provide technical financial and production input assistance to their member societies.  Sec 2(q): - Rules : Rules means the Rules made under this Act.  Sec 2(qa): - Scheduled Castes : Scheduled Caste means a SC in relation to the State of Kerala specified in constitution (Sc order 1950).  Sec 2(qb): - Scheduled Tribe : Scheduled Tribe means ST in relation to the state of Kerala are specified in the constitution (ST order 1950).  Sec 2(qba):- Social Co-operative Societies: primary co-operative societies formed for the welfare of social classes like differently abled persons, aged persons, transgenders, depressed persons or mentally challenged persons.   Sec 2 (qc): -Special Officer : Special Officer means an officer not below the rank of Asst. Registrar appointed by registrar to take into custody the assets and liabilities of the society which secured registration, without bifurcating the area of operation of an existing society and to register new societies and to constitute committees as provided in Section 28 of the Act.  Sec 2(r): -State : State means the State of Kerala  Sec 2(ra): Kerala State Co-operative Agricultural and Rural Development Bank: Kerala State Co-operative Agricultural and Rural Development Bank means an apex society having only primary co-operative agricultural and Rural Development Bank as its members and functioning in accordance with the provisions in the Kerala Co-operative Agricultural and Rural Development Bank Act 1984 (Act Number 20 of 1984).  Sec 2(rb): -State Co-operative Bank (Omitted)  Sec 2(rc): - State Co-operative Election Commission : State Co-operative Election Commission means State Co-operative Election Commission constituted under Sec 28B.  Sec 2(s): -State Co-operative Union : State Co-operative Union means Co-operative Union constituted under Sec 89.  Sec 2(sa): -Transferee Bank : Transferee Bank means the Kerala state co-operative bank.  Sec 2(sb): -Transferor Bank : Transferor Bank Means the district co-operative bank as defined under clause (ia) of this section.   Sec 2(t): -Tribunal : Tribunal means Tribunal constituted under Sec 81.  Sec 2(ta): -Urban Co-operative Bank: Urban Co-operative Bank means a society registered under this Act having its area of operation in the Urban areas and which undertake banking business with the license obtained from RBI.  Sec 2(taa): -Urban Co-operative Society: Urban Co-operative Society means a co-operative society the principal object of which is to under take non-agricultural credit activates and to raise fund to be lent to its members with its area of operation confined to a municipality or a corporation.  Sec 2(tb): -Vigilance Officer : Vigilance Officer means VO appointed under Sec 68A.  Sec 2(u): -Year : Year means the period commencing on the 1st day of April of any year and ending with 31st of March of the succeeding year or in the case of any registered society or class of registered societies, the accounts of which are made upto any other date with the previous sanction of the Registrar, the year ending with such date.  Sec 2 (v):-Youth Co-operative Societies : means co-operative societies which are registered to promote entrepreneurship, new technology, innovations and start-ups with the objective to generate employment and income and the welfare of youth and having its area of operation within one district.”. KCS RULES -Chapter 1- Preliminary: RULE 1 and 2 RULE 1: Short Title and Extent: These rules may be called the KCS Rule 1969 ( This rule (except for chapter XV) came into force on 14th July 1969 , by notification number 35649/C3/69 dated 14.7.1969 and the rules for chapter XV came into force on 1st January 1974 by notification number SRO 596/73 KG Ex No 952 dated 27.9.1973). RULE 2 : Definitions : Rule 2(a) : Act : means the Kerala Co-operative Societies Act 1969. Rule 2(aa) : Co-operative Member Relief Fund: Means the Co-operative Member Relief Fund constituted under section 56(1)( c) of the Act. Rule 2(b) Decree: Means any order , decision or award referred to in section 76 of the Act. Rule 2 (c) : Decree Holder: Means any person holding a decree or legal assignees of the decree. Rule 2(d) Default : Means failure on the part of any person to repay the financing bank or to any other society a loan or any other amount due to it within the time fixed for repayment or to return to the society within the time fixed the finished goods in respect of raw materials advanced or to keep any other obligations for the fulfillment of which a time limit has been specified in the byelaws. Rule 2(e) Defaulter: Means any Co-operative society against which or any person against whom a decree has been obtained. Rule 2(f) : Form: Means a form set out in Appendix II Rule 2 (g) Net Profit : means net profit as certified by the Director of Co-operative Audit. Rule 2(ga) Net Loss : Means net loss as certified by the Director of Co-operative Audit Rule 2(h) Person: Includes the Government and a Co-operative Society Rule 2(i) Sale Officer : Means an officer of any department empowered by the Registrar by general or special order to conduct the attachment and sale or sale without attachment of the property of defaulters, or to execute the order or decision of the Registrar in regard to the attachment and sale or sale without attachment of the property of the defaulter. Rule 2 (j) Section: Means a Section of the Act Rule 2(k) Working Capital: Means such portion of the Reserve Fund, other funds paid up share capital , Loans and deposits received by the society and debentures issued by a society as have not been invested in buildings and other fixed assets.