CO-OPERATIVE SOCIETIES ORDINANCE

CO-OPERATIVE SOCIETIES ORDINANCE

CHAPTER 33.
THE CO-OPERATIVE SOCIETIES ORDINANCE.

ARRANGEMENT OF SECTIONS.

PART I.
PRELIMINARY.

Section Page

1. Short title ............................. ... ... ... ... 255

2. Interpretation.............................. ... ... 255

PART II.

REGISTRATION.

3. Appointment of Registrar and assistant registrars ... ... 256
4. Societies which may be registered ... ... ... ... ... ... 256
5. Conditions of registration ... ... ... ... ... ... ... ... 256
6. Application for registration ... ... ... ... ... ... ... ... 256
7. Registration ... ... ... ... ... ... ... ... ... ... ... ... 257
8. Societies to be bodies corporate ... ... ... ... ... ... ... 257
9. Evidence of registration ... ... ... ... ... ... ... ... 257

PART III.

DUTIES AND PRIVILECES OF
SOCIETIES.

10. Amendment of the by-laws of a registered society ... ... 257

11. Address of society ... ... ... ... ... ... ... 258

12. Copy of Ordinance, rules, by-laws, etc., to be open to

inspection ... ... ... ... ... ... ... ... ... ... ... 258

13. Disposal of produce to or through a registered society ... ... 258

14. Creation of charges in favour of registered societies ... ... 259

15. Charge and set ofF in respect of shares or interest of members 259
16. Shares or interest not liable to attachment or sale ... ... 260
17. Transfer of interest on death of member ... ... ... ... ... 260
18. Deposits by or on behalf of minors ... ... ... ... ... ... 261
19. Register of members ... ... ... ... .. ... ... ... ... 261
20. Proof of entries in books of society ... ... ... ... ... ... 261

PART IV.

RIGHTS AND LIABILITIES OF
MEMBERS.

21. Qualification for membership... ... ... 262

22. Members not to exercise rights till due payment made ... ... 262
23. Restriction of membership in society ... ... ... ... ... ... 262
24. Votes of members ... ... ... ... ... ... ... ... ... ... 262
25. Representation by proxy ... ... ... ... ... ... ... ... ... 262
26. Contracts with society of members who are minors ... ... 262
27. Block holdings of shares limited ... ... ... ... ... ... ... 263
28. Restriction on transfer of share or interest ... ... ... ... 263
29. Liability of past member and estate of deceased member for







debts of society................... ... ... ... ... ... ... ... 263





PART V.

PROPERTY AND FUNDS OF REGISTERED SOCIETIES.

Section Page

30. Loans made by a registered society ..... ... ... ... ... 263

31. Deposits and loans received by a registered society ... ... 264
32. Restrictions on other transactions with non-members ... ... 264

33. Investment of funds .................... ... ... ... 264

34. Disposal of profits .................... ... ... ... ... ... 264

PART VI.
AUDIT, INSPECTION AND
INQUIRY.

35. Audit ..................................... ... ... ... 265

36. Power of Registrar to inspect society's books, etc . ... ... ... 265

37. Inquiry and inspection .................... ... 265

PART VII.
DISSOLUTION.

38. Dissolution ............................ ... ... ... ... ... ... 263

39. Cancellation of registration for lack of membership ... 267

40. Effect of cancellation of registration ... ... ... ... ... 267

41. Liquidation after cancellation of registration of society ... 267

42. Liquidator's powers . .................. ... ... ... ... ... ... 268

43. Power of Registrar to control liquidation ... ... ... ... 269

44. Enforcement of order ...................... ... ... ... 269

45. Limitation of the jurisdiction of the civil court ... ... 269

46). Closure of liquidation ............... ... 270

PART VIII.

SURCHARGE AND
ATTACHMENT.

47. Power of Registrar to surcharge officers, etc., of a registered

society ................................ ... ... ... ... ... 270

48. Appeal to Governor......................... ... ... ... 271

PART IX.

DISPUTES.

49. Settlement of disputes..................... ... ... ... 271

50. Case stated on question of law ............ ... 272







PART X.
RULES.

51. Rules.................................... ... ... ... ... 272

PART XI.
MISCELLANEOUS.
52. Recovery of sums due to Government ...... ... ... 275

53. Special power of Governor to exempt any society from

requirements as to registration ........ ... ... ... ... 275

54. Special power of Governor to exempt societies from

provisions of Ordinance ................ ... ... ... ... 275

55. Power to exempt from stamp duty and registration fees ... 275

56. Prohibition of the use of the word 'co-operative' ... 276
57. Certain legislation not to apply to registered societies ... 276

58. Penalty for non-compliance with Ordinance ... ... ... 276





CHAPTER 33.

THE CO-OPERATIVE SOCIETIES.

To provide for the formallon and to regulate the operation 43 of 1947. of
co-operative societies.

[15th February, 1951.]

PART I.

PRELEMINARY,

1. This Ordinance may be cited as the Co-operative
Societies Ordinance.

2.In this Ordinance-
'bonus' means a share of the profits of a registered society divided
among its members in proportion to the volume of business done
with the society by them from which the profits of tine society
were derived;

'by-laws' means the registered by-laws made by a society in the
exercise of any power conferred by this Ordinance, and includes a
registered amendment of the by-laws ;

'committee' means the governing body of a registered society to
whom the management of its affairs is entrusted ;

'dividend' means a share of the profits of a registered society divided
among its members in proportion to the share capital held by
them;

'member' includes a person or registered society joining in the
application for the registration of a society, and a person or
registered society admitted to membership after registration in
accordance with the by-laws;

'officer' includes a chairman, secretary, treasurer, member of
committee, or other person empowered under the rules or by-laws
to give directions in regard to the business of a registered society
;

'registered society' means a co-operative society registered under
this Ordinance ;

'Registrar' means the Registrar of Co-operative Societies appointed
under section 3 and includes any person when exercising such
powers of the Registrar as may have been conferred upon him
under that section;

'rules' means rules made under this Ordinance.





PART II.

REGISTRATION.

3. The Governor may appoint a person to be Registrar of Co-
operative Societies for the Colony and may appoint persons to assist
such Registrar, and may, by general or special order published in the
Gazette, confer on any Such persons all or any of the powers of a
Registrar under this Ordinance.

4. Subject to the provisions hereinafter contained, a society which
has as its object the promotion of the economic interests of its
members in accordance with co-operative principles, or a society
established with the object of facilitating the operations of such a
society, may be registered under this Ordinance with or without limited
liability as the Registrar may decide: Provided that the liability of a
society which includes at least one registered society among its
members shall be limited.

5. (1) No society, other than a society of which a member is a
registered society, shall be registered under this Ordinance, which does
not consist of at least ten persons, each of whom is qualified under
section 21 for membership.

(2) The word 'co-op co-operative or its Chinese equivalent
shall form part of the name of every society registered under this
Ordinance.

(3) The word 'limited' or its Chinese equivalent shall be the last
word or words in the name of every society with limited liability
registered under this Ordinance.

(4) When for the purposes of this section any question arises as
to age, residence, or occupation of land constituting the qualification
of any person, that question shall be decided by the Registrar whose
decision shall be final.

6. (1) For the purposes of registration an application shall be made
to the Registrar.

(2) The application shall be signed-

(a)in the case of a society of which no member is a registered
society, by at least ten persons qualified





in accordance with the requirements of subsection (i) of
section 5; and

in the case of a society of which a member is a registered
society, by a duly authorized person on behalf of everv such
registered society, and, where all the members of the society
are not registered societies, by ten other members, or, when
there are less than ten other members, by all of them.

(3) The application shall be accompanied by copies of the
proposed by-laws of the society, and the persons by whom or on
whose behalf such application is made shall furnish such information
in regard to the society as the Registrar may require.

7. (1) If the Registrar is satisfied that a society has complied with
the provisions of this Ordinance and the rules and that its proposed by-
laws are not contrary to this Ordinance or to the rules, he may, if he
thinks fit, register the society and its by-laws. An appeal shall lie to the
Governor in Council against the refusal of the Registrar to register any
society within one month from the date of such refusal.

(2) On registration the society shall pay such fee as may be
required by the rules.

8. The registration of a society shall render it a body corporate by
the name under which it is registered, witli perpetual succession and
with power to hold property, to enter into contracts, to institute
and defend suits and other legal proceedings, and to do all things
necessary for the purpose of its constitution.

9. A certificate of registration signed by the Registrar shall be
conclusive evidence that the society therein mentioned is duly
registered, unless it is proved that the registration of the society has
been cancelled.

PART III.

DUTIES AND PRIVILEGES OF SOCIETIFS.

10. (1) Any registered society may, subject to this Ordinance and
the rules, amend its by-laws, including the by-law which declares the
name of the society.





(2) No amendment of the by-laws of a registered society shall be
valid until that amendment has been registered under this Ordinance,
for which purpose copies of the amendment shall be forwarded to the
Registrar.

(3) If the Registrar is satisfied that any amendment of the by-
laws is not contrary to this Ordinance or to the rules, lie may, if he
thinks fit, register the amendment. An appeal shall lie to the Governor
in Council against the refusal of the Registrar to register any
amendment of any by-law.

(4) An amendment which changes the name of a society shall not
affect any right or obligation of the society or of any of its members or
past members, and any legal proceedings pending may be continued
by or against the society under its new name.

(5) When the Registrar registers an amendment of the by-laws of a
registered society, he shall issue to the society a copy of the
amendment certified by hirn, which shall be conclusive evidence of the
fact that the amendment has been duly registered.

11. Every registered society shall have an address, registered in
accordance with the rules, to which all notices and communications
may be sent, and shall send to the Registrar notice of every change of
that address.

12. Every registered society shall keep a copy of this Ordinance
and of the rules and of its by-laws and a list of its members open to
inspection, free of charge, at all reasonable times at the registered
address of the society.

13. (1) A registered society which has as one of its objects the
disposal of any article produced or obtained by the work or industry of
its members whether the produce of agriculture, animal husbandry,
forestry, fisheries, handicrafts or otherwise may provide in its by-laws
or may otherwise contract with its members

(a)that every such member who produces any such article shall
dispose of the whole or any specified amount, proportion or
description thereof to or through the society; and





(b)that any member who is proved or adjudged, in such manner
as may be prescribed by the rules to be guilty of a breach of
the by-laws or contract shall pay to the society as liquidated
damages a sum ascertained or assessed in such manner as
may be prescribed by the aforesaid rules.

(2) No contract entered into under the provisions of this section
shall be contested in any court on the ground only that it constitutes a
contract in restraint of trade.

14. (1) Subject to any prior claim of the Crown on the property of
the debtor and to the lien or claim of a landlord in respect of rent or any
money recoverable as rent and in the case of immovable property to
any prior registered charge thereon

(a)any debt or outstanding demand payable to a registered
society by any member or past member shall be a first charge
on all crops or other agricultural produce, felled timber or
other forest produce, niarine produce, fish (fresh-water and
salt-water), livestock, fodder, agricultural, industrial and
fishing implements, plant, machinery, boats, tackle and nets,
raw materials, stock in trade and generally all produce of
labour and things used in connexion with production raised,
purchased or produced in whole or in part from any loan
whether in money or in goods given him by the society:
Provided that nothing herein contained shall affect the claim
of any bona fide purchaser or transferee without notice;

(b)any outstanding demands or dues payable to a registered
housing society by any member or past member in respect of
rent, shares, loans or purchase money or any other rights or
amounts payable to such society shall be a first charge upon
his interest in the immovable property of the society.

15. A registered society shall have a charge upon the shares or
interests in the capital and on the deposits of a member or past member or
deceased member and upon any dividend, bonus, or profits payable to a
member or past





member or to the estate of a deceased member in respect of any debt
due to the society from such member or past member or estate, and
may set off any sum credited or payable to a member or past member or
estate of a deceased member in or towards payment of any such debt.

16. Subject to the provisions of section 15, the share or interest
of a member in the capital of a registered society shall not be liable to
attachment or sale under any decree or order of a court in respect of
any debt or liability incurred by such member, and neither his assignee
in insolvency nor a receiver duly appointed shall be entitled to, or have
any claim on, such share or interest.

17. (1) On the death of a member, a registered society may transfer
the share or interest of the deceased member to the person nominated
in accordance with the rules made in this behalf, or, if there is no
person so nominated, to such persons as may appear to the committee
to be the heir or legal representative of the deceased member, or may
pay to such nominee, heir or legal representative, as the case may be, a
sum representing the value of such member's share or interest, as
ascertained in accordance with the rules or by-laws : Provided that-

(a)in the case of a society with unlimited liability such nominee,
heir or legal representative, as the case may be, may require
payment by the society of the value of the share or interest of
the deceased member ascertained as aforesaid;

(b)in the case of a society with limited liability, the society may
transfer the share or interest of the deceased member to such
nominee, heir or legal representative, as the case may be,
being qualified in accordance with the rules and by-laws for
membership of the society, or on his application within six
months of the death of the deceased member to any person
specified in the application who is so qualified.

(2) A registered society shall pay all other moneys due



to the deceased member from the society to such nominee,

heir or legal representative, as the case may be.





(3) All transfers and payments made by a registered
society in accordance with the provisions of this section
shall be valid and effectual against any demand made upon
the society by any other person.

18. (1) A registered society may receive deposits from
or for the benefit of minors and it shall be lawful for a
registered society to pay such minors the interest which
may become due on such deposits. Any deposits made by
a minor may, together with the interest accrued thereon, be
paid to that minor; and any deposit made on behalf of a
minor may, together with the interest accrued thereon, be
paid to the guardian of that minor for the use of the minor.

(2) The receipt of any minor or guardian for money
paid to him under this section shall be a sufficient discharge
of the liability of the society in respect of that money.

19. Any register or list of members kept by any re-
gistered society shall be prima facie evidence of any of the
following particulars entered therein-
(a)the date at which the name of any person was
entered in such register or list as a member;
(b) the date at which any such person ceased to be a
member.

20. (1) A copy of any entry in a book of a registered
society regularly kept in the course of business shall, if
certified in such manner as may be prescribed by the rules,
be received in any legal proceeding, civil or criminal, as
prima facie evidence of the existence of such entry and shall
be admitted as evidence of the matters, transactions and
accounts therein recorded in every case where, and to the
same extent as, the original entry itself is admissible.

(2) No officer of any such society shall, in any legal
proceedings to which the society is not a party, be com-
pelled to produce any of the society's books, the contents
of which can be proved under subsection (i) or to appear
as a witness to prove any matters, transactions or accounts
therein recorded, unless the court for special reason so
directs.





PART IV.

RIGHTS AND LIABILITIES OF MEMBERS

21. In order to be qualified for membership of a co-
operative society a person, other than a registered society,
must-

(a) have attained the age of 18 years;

(b)be resident within or in occupation of land within the
society's area of operations as described by the by-
laws.

22. No member of a registered society shall exercise the
rights of a member unless or until he has made such payment to
the society, in respect of membership or acquired such interest
in the society, as may be prescribed by the rules or by-laws.

23. Except with the sanction of the Registrar, no person
shall be a member of more than one registered society whose
primary object is to grant loans to its members.

24. No member of any registered society shall have
more than one vote in the conduct of the affairs of the
society: Provided that in the case of an equality of votes
the chairman shall have a casting vote : Provided also
that in the case of societies of which a registered society is
a member that society may have such voting powers as are
provided in the rules.

25. A registered society which is a member of any other
registered society may appoint any one of its members as its
proxy for the purpose of voting in the conduct of the affairs of
such other registered society.

26. The minority or non-age of any person duly admitted as
a member of any registered society shall not debar that person
from executing any instrument or giving any acquittance
necessary to be executed or given under this Ordinance or the
rules made thereunder, and shall not be a ground for invalidating
or avoiding any contract entered into by any such person with
the society; and any such contract entered into by any such
person with the society, whether as principal or as surety, shall
be enforceable at law or against such person notwithstanding his
minority, or non-age.





27. No member, other than a registered society, shall hold more
than one-fifth of the share capital of any cooperative society.

28. (1) The transfer or charge of the share or interest
of a member or past member or deceased member in the
capital of a registered society shall be subject to such con-
ditions as to maximum holding as may be prescribed by
this Ordinance or by the rules.

(2) In the case of a society registered with unlimited liability, a
member shall not transfer any share field by him or his interest in the
capital of the society or any part thereof, unless-

(a)he has field such share or interest for not less than one year;
and

(b)the transfer or charge is made to the society, or to a member
of the society, or to a person whose application for
membership has been accepted by the committee.

29. (1) The liability of a past member for the debts of a registered
society as tliey existed on the date on which lie ceased to be a member
shall not continue for a period of more than two years reckoned from
that date.

(2) The estate of a deceased member shall not be liable for the
debts of the society as they existed on the date of his decease for a
period of more than two years reckoned from the date of his decease.

PART V.

PROPERTY AND FUNDS OF REGISTERED SOCIETIES.

30. (1) A registered society shall not, except as provided in Section
33, make any loan to any person other than

ù a member : Provided that, with the consent of the Registrar,

ù registered society may make loans to another registered society.

(2) Except with the permission of the Registrar, a registered society
shall not lend money on the security of anymovable property other
than produce or goods in which the society is authorized to deal.





(3) The Governor may, by general or special order, prohibit or
restrict the lending of money on mortgage of any description of
immovable property by any registered society.

31. A registered society shall receive deposits and loans from
persons who are not members only to such extent and under such
conditions as may be prescribed by the rules or by-laws.

32. Save as provided in sections 30 and 31, the transactions of a
registered society with persons other than members shall be subject to
such prohibitions and restrictions as may be prescribed by the rules.

33. A registered society may invest or deposit its funds

(a)in a post office savings bank, or with any bank or person
carrying on the business of banking approved for this
purpose by the Registrar; or

(b)in any securities issued or guaranteed by a Government
within the Commonwealth; or

(c)with any other registered society approved for this purpose
by the Registrar; or

(d) in any other mode approved by the Registrar.

34. (1) At least one-fourth of the net profits of every registered
society, as ascertained by the audit prescribed by section 33, shall be
carried to a fund to be called the reserve fund, which shall be employed
as prescribed by the rules. After deduction of any tax which may have
been charged on such society in accordance with the provisions of the
Inland Revenue Ordinance, the remainder of such profits and any
profits of past years available for distribution may be divided among
the members by way of dividend or bonus, or allocated to any funds
constituted by the society, to such extent or under such conditions as
may be prescribed by the rules or by-laws : Provided that in the case of
a society with unlimited liability, no distribution of profits shall be made
without the general or special order of the Governor.

(2) Any registered society, may, with the sanction ot he Registrar,
after one-fourth of the net profits in any year





has been carried to a reserve fund, contribute an amount not exceeding
ten per cent of the remaining net profits to any charitable purpose or to
a common-good fund.

PART VI.

AUDIT, INSPECTION AND INQUIRY.

35. (1) The Registrar shall audit or cause to be audited by some
person authorized by him by general or special order in writing the
accounts of every registered society once at least in every year.

(2) The audit under subsection (i) shall include an examination of
overdue debts, if any, and a valuation of the assets and liabilities of
the registered society.

(3) The Registrar and every other person appointed to audit the
accounts of a society shall have power when necessary

(a)to summon at the time of his audit any officer, agent, servant
or member of the society who he has reason to believe can
give material information in regard to any transactions of the
society or the managemerit of its affairs; or

(b)to require the production of any book or document relating
to the affairs of, or any cash or securities belonging to, the
society by the officer, agent, servant or member in
possession of such book, document, cash or securities.

36. The Registrar, or any person authorized by general or special
order in writing by the Registrar, shall at all times have access to all the
books, accounts, papers and securities of a registered society, and
shall be entitled to inspect the cash in hand ; and every officer of the
society shall furnish such information in regard to the transactions and
working of the society as the person making such inspection may
require.

37. (1) The Registrar may of his own motion, and shall on the
application of a majority of the committee, or of not less than one-third
of the members of a registered society, hold an inquiry or direct some
person authorized by him by order in writing in this behalf to hold an
inquiry





into the constitution, working, and financial condition of a registered
society ; and all officers and members of the society shall furnish such
information in regard to the affairs, of the society and produce the
cash in hand and such books, accounts, papers and securities of the
society as the Regis trar or the person authorized by him may require.

(2) The Registrar shall, on the application of a creditor of the
registered society, inspect or direct some person authorized by him in
writing in this behalf to inspect the books of the society, if the
applicant-

(a)proves that an ascertained sum of money is then due to him
and that he has demanded payment thereof and has not
received satisfaction within a reasonable time ; and

(b)deposits with the Registrar such sum as security for the
costs of the proposed inspection as the Registrar may
require.

(3) The Registrar shall communicate the results of any

such inspection to the creditor and to the society into whost.
affairs inquiry has been made.

(4) Where an inquiry is held under subsection (i) or an inspection
is made under subsection (2), the Registrar may apportion the costs or
such part of the costs, as he may think right, between the registered
society, the members demanding an inquiry, the officers or former
officers of the society, and the creditor, if any, on whose application
the inquiry was made.

(5) Any sum awarded by way of costs against any society or
person under this section may be recovered, on application to a
magistrate having jurisdiction in the place where the registered office of
the society is situated or the person resides or carries on business for
the time being, in like manner as a fine imposed by such court.

PART VII.

DISSOLUTION.

38. (1) If the Registrar, after holding an inquiry or making an
inspection under section 37 or on receipt of an application made by
three-fourths of the members of a





registered society, is of opinion that the society ought to be
dissolved, he may make an order for the cancellation of the registration
of the society.

(2) Any member of a registered society may, within two months
from the date of an order under subsection (i), appeal from such order
to the Governor.

(3) Where no appeal is presented within two months from the
making of an order cancelling the registration of a society, the order
shall take effect on the expiry of that period. Where an appeal is
presented within two months, the order shall not take effect until it is
confirmed.

(4) Where the Registrar makes an order for the cancellation of the
registration of a society under subsection (i) he may make such further
order as he may think fit for the custody of the books and documents
and the protection of the assets of the societv until the order
cancelling registration takes effect.

(5) No registered society shall be wound up save by an order of
the Registrar.

39. The Registrar may by order in writing, cancel the registration
of any registered society other than a society which includes among
its members one or more registered societies, if at any time it is proved
to his satisfaction that the number of the members has been reduced to
less than ten. Every such order shall take effect from the date thereof.

40. Where the registration of a society is cancelled by an order
under section 38 or 39 the society shall cease to exist as a corporate
body from the date on which the order takes effect, hereinafter referred
to as the date of dissolution : Provided that any privileges conferred on
the society by or under sections 14, 15, 16 and 17 shall be deemed to be
vested in any liquidator appointed for that society by the Registrar.

41. Where the registration of a society is cancelled under
section 38 or 39 the Registrar may appoint one or more persons to be,
subject to his direction and control, the liquidator or liquidators of the
society.





42. (1) A liquidator appointed under section 41 shall, subject to the
guidance and control of the Registrar and to any limitations imposed
by the Registrar by order under section 43, have power to

(a)determine from time to time the contribution to be made by
members and past members or by the estates of deceased
members of the society to its assets;

(b)appoint a day by notice before which creditors whose claims
are not already recorded in the books of the society shall
state their claims for admission or to be excluded from any
distribution made before they have proved them;

(c)decide any question of priority which arises between
creditors;

(d)refer disputes to arbitration and institute and defend suits
and other legal proceedings on behalf of the society by his
name or office;

(e)decide by what persons and in what proportions the costs of
liquidation are to be borne;

(f) give such directions in regard to the collection and
distribution of assets as may be necessary in the course of
winding up the society;

(g)compromise any claim by or against the society provided
the sanction of the Registrar has first been obtained;

(h)call such general meetings of members as may be necessary
for the proper conduct of the liquidation;

(i)take possession of the books, documents and assets of the
society ;

(j) sell the property of the society;

(k)carry on the business of the society so far as may be
necessary for winding it up beneficially: Provided that
nothing herein contained shall entitle the liquidator of a
credit society to issue any loan ; and

(l)arrange for the distribution of the assets of the society in a
convenient manner when a scheme of distribution has been
approved by the Registrar.

(2) Subject to such rules as may be made in this behalf, any
liquidator appointed under this Ordinance shall in so far as such
powers are necessary for carrying out the purposes of this section,
have power to summon and enforce





the attendance of parties and witnesses and to compel the production
of documents by the same means and (so far as may be) in the manner
as is provided in the case of a magistrate.

43. A liquidator shall exercise his powers subject to the control
and revision of the Registrar, who may

(a)rescind or vary any order made by a liquidator and make
whatever new order is required;

(b) remove a liquidator from office;

(c)call for all books, documents and assets of the society;

(d)by order in writing limit the powers of a liquidator under
section 42 ;

(e)require accounts to be rendered to him by the liquidator;

(f) procure the auditing of the liquidator's accounts and
authorize the distribution of the assets of the society ;

(g)make an order for the remuneration of the liquidator; or

(h)refer any subject of dispute between a liquidator and any
third party to arbitration if that party shall



have consented in writing to be bound by the decision
of the arbitrator.

44. (1) The decision of an arbitrator on any matter referred to him
under section 43 shall be binding upon the parties, and shall be
enforceable in like manner as an order made by the Registrar under that
section.

(2) An order made by a liquidator or by the Registrar under
section 42 or 43 shall be enforced by any civil court having jurisdiction
over the place where the registered office of the society is situated in
like manner as a decree of that court.

45. Save in so far as is hereinbefore expressly provided, no civil
court shall have any jurisdiction in respect of any matter concerned
with the dissolution of a registered society under this Ordinance.





46. (1) In the liquidation of a society whose registrafion has been
cancelled, the funds, including the reserve fund, shall be applied first
to the costs of liquidation, then to the discharge of the liabilities of the
society, then to the payment of the share capital and then, provided
the by-laws of the society permit, to the payment of a dividend at a
rate not exceeding ten per cent per annum for any period for which
no disposal of profits was made.

(2) When the liquidation of a society has been closed and any
creditor of that society has not claimed or received what is due to him
under the scheme of distribution, notice of the closing of the
liquidation shall be published in the Gazette; and, all claims against
the funds of the society liquidated shall be proscribed when two years
have elapsed from the date of the publication of the Gazette notice.

(3) Any surplus remaining after the application of the funds to the
purposes specified in subsection (1) and the payment of any claims for
which an action is instituted under subsection (2) shall be available for
use by the Registrar for any co-operative purpose at his discretion.

PART VIII.

SURCHARGE AND ATTACHAWNT.

47. (1) Where, in the course of the winding up of a registered
society it appears that any person who has taken part in the
organization or management of such society or any past or present
officer of the society has misapplied or retained or become liable or
accountable for any money or property of such society or has been
guilty of misfeasance or breach of trust in relation to such society, the
Registrar may, on the application of the liquidator or of any creditor or
contributory, examine into the conduct of such person and make an
order requiring him to repay or restore the money or property or any
part thereof with interest at such rate as the Registrar thinks just or to
contribute such sum to the assets of such society by way of
compensation in regard to the misapplication, retainer, dishonesty or
breach of trust as the Registrar thinks fit.

(2) This section shall apply notwithstanding that the act is one
for which the offender may be criminally responsible.





48. Any person aggrieved by any order of the Registrar made
under section 47 may appeal to the Governor within twenty-one days
from the date of such order and the decision of the Governor shall be
final and conclusive.

PART IX.

DISPUTES.

49. (1) If any dispute touching the business of a registered
society arises-

(a)among members, past members and persons claiming
through members, past members and deceased members; or

(b) between a member, past member, or person claiming through
a member, past member or deceased member, and the
society, its committee, or any officer of the society; or

(c)between the society or its committee and any officer of the
society; or

(d)between the society and any other registered society;

such dispute shall be referred to the Registrar for decision. A claim by
a registered society for any debt or demand due to it from a member,
past member or the nominee, heir or legal representative of a deceased
member, shall be deemed to be a dispute touching the business of the
society within the meaning of this subsection.

(2) The Registrar may, on receipt of a reference under subscction
(i)-

(a) decide the dispute himself; or

(b) refer it for disposal to an arbitrator or arbitrators.

(3) Any party aggrieved by the award of the arbitrator or
arbitrators may appeal therefrom to the Registrar within such period
and in such manner as may be prescribed.

(4) A decision of the Registrar tinder subsection (2) or in appeal
under subsection (3) shall be final and shall not be called in question
in any civil court.

(5) The award of the arbitrator or arbitrators under subsection (2)
shall, if no appeal is preferred to the Registrar tinder subsection (3), or if
any such appeal is abandoned or





withdrawn, be final and shall not be called in question in any civil court
and shall be enforced in the same manner as if the award had been a
judgment of a civil court.

(i) Notwithstanding anything contained in the last foregoing
section, the Registrar at any time when proceeding to a decision under
this Ordinance, or the Governor at any time when an appeal has been
preferred to him against any decision of the Registrar under this
Ordinance, may refer any question of law arising out of such decision
for the ruling of the court.

(2) Such judge or judges as the Chief justice may direct, may
consider and determine any question of law so referred and the ruling
given on such question shall be final and conclusive.

PART X.

RULES.

51. (1) The Governor in Council may make all such rules as may be
necessary for the purpose of carrying out or giving effect to the
principles and provisions of this Ordinance.

(2) In particular, and without prejudice to the generality of the
power conferred by subsection (i), such rules may prescribe or provide
for

(a)forms to be used and the conditions to be complied with in
applying for the registration of a society and the procedure
in the matter of such applications;

(b)conditions to be complied with by persons applying for
admission or admitted as members, election and admission of
members from time to time, and the payment to be made and
interest to be acquired before exercising rights of
membership;

(c)subject to the provisions of section 27, the maximum number
of shares or portion of the capital of a registered society
which may be held by a member;

(d)the extent to which a registered society may limit the number
of its members;

(e)withdrawal and expulsion of members and payments to be
made to members who withdraw or are expelled, and the
liabilities of past members;





(f) general meetings of the members and for the procedure at
such meetings and the powers to be exercised by such
meetings;

(g)appointment, suspension and removal of the members of the
committee and other officers, and the procedure at meetings
of the committee, and the powers to be exercised and the
duties to be performed by the committee and other officers;

(h)matters in respect of which a society may or shall make by-
laws and the procedure to be followed in making, altering
and rescinding by-laws, and the conditions to be satisfied
prior to such making, alteration or rescission ;

(i)the manner in which funds may be raised by means of shares
or debentures or otherwise

conditions to be observed by a registered society applying
for financial assistance from government;

(h)the payments to be made, the conditions to be complied with
and the forms of the bonds, instruments or other documents
to be executed by members applying for loans or cash
credits, the period for which loans may be made or credits
granted, and the maximum amount which may be lent and the
maximum credit which may be allowed to individual members
with or without the consent of the Registrar;

(l)the mode in which the value of a deceased member's interest
shall be ascertained, and for the nomination of a person to
whom such interest may be paid or transferred ;

(m) the mode in which the value of the interest of a
member who has become of unsound mind and
incapable of managing himself or his affairs shall
be ascertained and the nomination of any person
to whom such interest may be paid or transferred;

(n)formation and maintenance of reserve funds, and the objects
to which such funds may be applied, and investment of any
funds under the control of any registered society ;

(o)conditions under which profits may be distributed to the
members of a society with unlimited liability





and the maximum rate of dividend which may be paid by
societies;

(p)accounts and books to be kept by a registered society, and
for the periodical publication of a balance sheet showing the
assets and liabilities of a registered society;

(q)audit of the accounts of registered societies and for the
charges, if any, to be made for such audit and the levy of
contributions from all or any registered societies to a fund to
be used for the audit and supervision of existing societies
and co-operativepropaganda and the administration of such a
fund;

(r)returns to be submitted by registered societies to the
Registrar, and the persons by whom and the form in which
the same are to be made;

(s)the persons by whom, and the form in which, copies of
entries in books of registered societies may be cectified ;
(t)formation and maintenance of a register of members, and,
where the liability of members is limited by shares, of a
register of shares;

(u)inspection of documents and registers at the Registrar's
office and the fees to be paid therefor and the issue of copies
of such documents or registers ;

(v)the manner in which any question as to the breach of any by-
law or contract relating to the disposal of produce to or
through a society may be determined, and the manner in
which the liquidated damages for any such breach may be
ascertained or assessed;

(w)the mode of appointing an arbitrator or arbitrators and the
procedure to be followed in proceedings before the Registrar
or such arbitrator or arbitrators;

(x)the procedure to be followed by a liquidator appointed under
section 41 and the cases in which appeals shall lie from the
orders of such liquidator;

(y)forms and fees and the procedure to be observed and all
other matters connected with or incidental to the
presentation, hearing and disposal of appeals under this
Ordinance or the rules.





PART XI.

MISCELLANEOUS.

52. (1) All sums due from a registered society or from an officer or
member or past member of a registered society as such to the
Government may be recovered in the manner provided for the recovery
of debts due to the Government under the law for the time being in
force.

(2) SUMS due from a registered society to the Government and
recoverable under subsection (i) may be recovered first, from the
property of the society ; secondly, in the case of a society of which
the liability of members is limited, from members, subject to the limit of
their liability; and thirdly, in the case of other societies, from the
members.

53. Notwithstanding anything contained in this Ordinance the
Governor may by special order in each case and subject to such
conditions as lie may impose, exempt any society from any of the
requirernents of this Ordinance as to registration.

54. The Governor may by general or special order exempt any
registered society or class of societies from any of the provisions of
this Ordinance, or may direct that such provisions shall apply to any
society or class of societies with effect frorn such date or with such
modifications as may be specified in the order.

55. (1) The Governor by notification in the Gazette may, in the
case of any registered society or class of registered societies, remit

(a)the stamp duty with which, under any law for the time being
in force, instruments executed by or in behalf of a registered
society, or by an officer or member, and relating to the
business of such society, or any class of such instruments
are respectively chargeable; or

(b)any fee payable tinder the law of registration for the time
being in force.

(2) A notification exempting any registered society from the fees
referred to in paragraph (b) of subsection (i) may provide for the
withdrawal of such exemption.





56. (1) No person other than a registered society shall trade or
carry on business under any name or title of which the word 'co-op-
erative' is part without the sanction of the Governor: Provided that
nothing in this section shall apply to the use by any person or his
successor in interest of any name or title under which he traded or
carried on business at the commencement of this Ordinance.

(2) Any person who contravenes the provisions of this section
shall be guilty of an offence: Penalty: a fine of one hundred dollars and
in the case of a continuing offence a further fine of twenty dollars for
each day during which the offence continues.

57. The provisions of the Companies Ordinance, and of any law
relating to trade unions, shall not apply to societies registered under
this Ordinance.

58.(a) Any registered society or an officer or a member thereof,
wilfully neglecting or refusing to do any act or to furnish any
information required for the purposes of this Ordinance by
the Registrar or other persons duly authorized by him in this
behalf; and

(b)any person wilfully or without any reasonable excuse
disobeying any summons, requisition or lawful written order
issued under the provisions of this Ordinance, or failing to
furnish any information lawfully required from him by a
person authorized to do so under the provisions of this
Ordinance,

shall be guilty of an offence: Penalty: a fine of one hundred dollars.
43 of 1947. Short title. Interpretation. Appointment of Registrar and assistant registrars. Societies which may be registered. Conditions of registration. Application for registration. Registration and appeals. Societies to be bodies corporate. Evidence of registration. Amendment of the by-laws of a registered society. [s. 10 cont.] Address of society. Copy of Ordinance, rules, by-laws, etc., to be open to inspection. Disposal of produce to or through a registered society. Creation of charges in favour of registered societies. Charge and set off in respect of shares or interest of members. [s. 15 cont.] Shares or interest not liable to attachment or sale. Transfer of interest on death of member. Deposits by or on behalf of minors. Register of members. Proof of entries in books of society. Qualification for membership. Members not to exercise rights till due payment made. Restriction of membership in society. Votes of members. Representation by proxy. Contracts with society of members who are minor. Share of capital limited. Restriction on transfer of share or interest. Liability of past member and estate of deceased member for debts of society. Loans made by a registered society. [s. 30 cont.] Deposits and loans received by a registered society. Restrictions on other transactions with non-members. Investment of funds. Disposal of profits. (Cap. 112.) Audit. Power of Registrar to inspect society's books, etc. Inquiry and inspection. [s. 37 cont.] Dissolution. Cancellation of registration of a society due to lack of membership. Effect of cancellation of registration. Liquidation after cancellation of registration of society. Liquidator's power. Power of Registrar to control liquidation. Enforcement of order. Limitation of the jurisdiction of the civil court. Closure of liquidation. Power of Registrar to surcharge officers, etc., of a registered society. Appeal to Governor. Settlement of disputes. [s. 49 cont.] Case stated on question of law. Rules. [s. 51 cont.] Recovery of sums due to Government. Special power of Governor to exempt any society from requirements as to registration. Special power of Governor to exempt societies from provisions of Ordinance. Power to exempt from stamp duty and registration fees. Prohibition of the use of the word 'co-operative'. Certain legislation not to apply to registered societies. (Cap. 32). Penalty for non-compliance with Ordinance.

43 of 1947. Short title. Interpretation. Appointment of Registrar and assistant registrars. Societies which may be registered. Conditions of registration. Application for registration. Registration and appeals. Societies to be bodies corporate. Evidence of registration. Amendment of the by-laws of a registered society. [s. 10 cont.] Address of society. Copy of Ordinance, rules, by-laws, etc., to be open to inspection. Disposal of produce to or through a registered society. Creation of charges in favour of registered societies. Charge and set off in respect of shares or interest of members. [s. 15 cont.] Shares or interest not liable to attachment or sale. Transfer of interest on death of member. Deposits by or on behalf of minors. Register of members. Proof of entries in books of society. Qualification for membership. Members not to exercise rights till due payment made. Restriction of membership in society. Votes of members. Representation by proxy. Contracts with society of members who are minor. Share of capital limited. Restriction on transfer of share or interest. Liability of past member and estate of deceased member for debts of society. Loans made by a registered society. [s. 30 cont.] Deposits and loans received by a registered society. Restrictions on other transactions with non-members. Investment of funds. Disposal of profits. (Cap. 112.) Audit. Power of Registrar to inspect society's books, etc. Inquiry and inspection. [s. 37 cont.] Dissolution. Cancellation of registration of a society due to lack of membership. Effect of cancellation of registration. Liquidation after cancellation of registration of society. Liquidator's power. Power of Registrar to control liquidation. Enforcement of order. Limitation of the jurisdiction of the civil court. Closure of liquidation. Power of Registrar to surcharge officers, etc., of a registered society. Appeal to Governor. Settlement of disputes. [s. 49 cont.] Case stated on question of law. Rules. [s. 51 cont.] Recovery of sums due to Government. Special power of Governor to exempt any society from requirements as to registration. Special power of Governor to exempt societies from provisions of Ordinance. Power to exempt from stamp duty and registration fees. Prohibition of the use of the word 'co-operative'. Certain legislation not to apply to registered societies. (Cap. 32). Penalty for non-compliance with Ordinance.

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