THE KARNATAKA CO-OPERATIVE SOCIETIES (AMENDMENT) BILL, 2025
(LA Bill No. 49 of 2025)
A Bill further to amend the Karnataka Co-operative Societies Act, 1959.
Whereas, it is expedient further to amend the Karnataka Co-operative Societies Act, 1959 (Karnataka Act No.11 of 1959) for the purposes hereinafter appearing.
Be it enacted by the Karnataka State Legislature in the seventy sixth year of the Republic of India as follows:-
1. Short title and commencement. (1) This Act may be called the Karnataka Co-operative Societies (Amendment) Act, 2025.
(2) It shall come into force at once.
2. Amendment of section 2. In the Karnataka Co-operative Societies Act, 1959 (Karnataka Act No.11 of 1959) (herein after referred to as the Principal Act) in section 2,-
(i) for clause (a-1-1), the following shall be substituted, namely:-
"(a-1-1) "Assisted Society" means a co-operative society which has received the assistance from the Central Government or State Government or Zilla Panchayat/ Taluka Panchayat, Gram Panchayat, City Corporations, City Municipal Council, Town Municipal Council, Town Panchayat and Corporations/Boards/Authorities established by the State Government or Central Government, in the form of Share Capital or loan or grant including the grant from the Member of Parliament and Member of State Legislature or guarantee for loan or rebate in. repayment of loan or interest or any fund at concessional rate of interest or interest subsidy or incentive from State Government or Central Government or National Bank for Agriculture and Rural Development (NABARD) to the society or to the member of the society or tax rebate or concession in purchasing of site or land or obtained site or land on lease basis."
(i) in clause (e-1-a) for the word "Director" the word " Member" shall be substituted;
(ii) after clause (e-2-1) the following shall be inserted, namely:-
"(e-2-2) "District Co-operative Union" means District Level Federal Co-operative whose objective is to impart co-operative education, training and publicity to the members and staff of various types of co-operative societies in the district."
3. Amendment of section 18-B.- In the principal Act, in section 18-B, after clause (iv) the following shall be inserted, namely:-
"(v) he ceases to be a member under sub clause (a) of section 18-A."
4. Amendment of section 20. In the principal Act, in section 20, in sub-section (2), in clause (b) in sub-clause (v), in the explanation,-
(i) for the words "twenty one days" the words "twenty days" shall be substituted; and
(ii) For the words "forty five days the words "thirty days" shall be substituted.
5. Amendment of section 21. In the principal Act, in section 21, after sub-section (3), the following shall be inserted, namely:-
"(4) Notwithstanding anything contained in this Act or Bye-laws made thereunder, in the Election of the Board of Secondary Co-operative Societies, Federal Co-operative Societies and Apex Co-operative Societies to the reserved seats, irrespective of any class of voters of the said societies, they shall be entitled to exercise their votes, in the such manner as may be prescribed."
6. Amendment of section 28A. In the principal Act, in section 28A,-
(i) for sub-section (2), the following shall be substituted, namely:-
"(2) The Board of a Co-operative Society shall consist of not less than thirteen members excluding the Chief Executive, but not exceeding the number of members as may be prescribed.
(2-A) Subject to the number of the members of the Board specified under sub-section (2), the bye-laws of a Co-operative Society shall provide for the composition of the Board of that Society to include within the permissible limits,-
(a) in case of assisted society, Government nominee as specified in sub-section (4-B) of section 28A;
(b) in case of Government nominee as specified in section 53-A, such nominated persons are not eligible either to vote or to contest in election of office bearers; and
(c) in case of all Co-operative Societies other than non-agricultural credit Co-operative Societies, if necessary, an ex-officio member and nominee from financing or the credit agency.
the remaining members of the Board shall be filled only through election subject to the provisions of section 29-E."
(ii) in sub-section (3),-
(i) for the words "In the Board of every Co-operative Society there shall be reserved", the words "In the Board of every Primary, Secondary, Federal and Apex Co-operative Society there shall be reserved", shall be substituted; and
(ii) after the proviso, the following provisos shall be inserted, namely:-
"provided further that, respective Co-operative Societies shall make provisions in the bye-laws with previous approval of the Government to increase the number of seats in the Board of Secondary Co-operative societies, Federal Co-operative societies and Apex Co-operative societies if the number of the Board members exceeds the limit, as specified in clauses (i) and (ii) of sub-section (2) and such other procedure as may be prescribed.
Provided also that, in the Board of secondary cooperative societies, forty percent of the remaining seats shall be reserved for the representatives of the co-operative societies after reserving the seats as specified in the sub-clauses (a) and (b) of clause (iii) of sub-section (2)."
7. Amendment of section 28B.- In the principal Act, in section 28B, in sub-section (3), the proviso shall be omitted.
8. Amendment of section 28C.- In the principal Act, in section 28C, in sub-section (2), after clause (t), the following shall be inserted, namely:-
"(u) Every elected director of the Board shall submit a declaration of assets and liabilities of his/her and his/her family for each financial year of his/her tenure in the manner as may be prescribed.
Explanation: For the purpose of this clause family' means "Director and his/her Spouse, Unmarried Daughter and Undivided Son.
(v) The Chief Executive Officer of the co-operative society shall declare the statement of assets and liabilities at the end of the every financial year of his/her tenure in the manner as may be prescribed.
Explanation: For the purpose of this clause 'family' means "Chief Executive Officer and his/her Spouse, Unmarried Daughter and Undivided Son."
9. Amendment of section 29C. In section 29C of the Principal Act, in sub-section (1), after clause (p), the following shall be inserted, namely:-
"(q) if he/she fails to submit every financial year the declaration of assets and liabilities of his/her and his/her family.
Explanation:- For the purpose of this clause family' means "Candidate and his/her Spouse, Unmarried Daughter and Undivided Son."
10. Amendment of section 29E.- In the principal Act, in section 29E,-
(i) the first proviso shall be omitted;
(ii) for the second proviso, the following shall be substituted, namely:-
"Provided further that, the board shall fill up casual vacancy of the board by nomination, out of the same class of members in respect of which the casual vacancy has arisen."; and
(iii) the third proviso shall be omitted.
11. Amendment of section 29F.- In the principal Act, in section 29F,-
(i) after sub-section (1), the following sub-section shall be inserted, namely:-
*(1-A) Subject to the order of the Registrar of Co-operative Societies there shall be reserved, such number of President and Vice-president of Primary Agriculture Cooperative Society (PACS), Milk Producers Cooperative Society (MPCS) and other Primary Assisted Society in the State for the Scheduled Castes and Scheduled Tribes, Other Backward Class and Woman on rotation basis in the manner as may be prescribed."
(ii) for sub-sections (5) and (6), the following shall be substituted, namely:-
"(5) The Chief Executive shall within fifteen days from the date of constitution or deemed constitution of the Board after a general election and immediately before the expiry of the term of office of the President or Chairperson, Vice-President, Vice-Chairperson convene a meeting of all the members of the committee in such manner as may be prescribed for the purpose of electing President or Chairperson, Vice-President or Vice-Chairperson and such others as are required to be elected under the bye-laws of the co-operative society. One of the members who is not a candidate for the election of President or Chairperson, Vice-President or Vice-Chairperson shall be chosen to preside over such meeting:
Provided that, the Members of the first Board elected in the first general. meeting held after the registration of a co-operative society shall elect the President or Chair person, Vice-President or Vice-Chairperson and other office bearers in such manner as may be prescribed.
(6) The Chief Executive shall as and when there is a casual vacancy in the office of the President or Chairperson, Vice-President or Vice-Chairperson or others convene a meeting of the members of the Board for the purpose of filling up the casual vacancy and the provisions of sub-section (5), shall mutatis mutandis apply.
(7) The Chief Executive shall within three days from the date of the meeting, forward to the Registrar and Co-operative election Authority a copy of the notice convening the meeting and also a copy of the proceedings of the meeting.
(8) If the Chief Executive fails to convene the meeting in accordance with sub-sections (5) and (6), the Co-operative Election Authority or any officer authorized by it to do so shall convene a meeting for the purposes specified in the said sub-sections."
12. Amendment of section 29G. In the principal Act, in section 29G, in sub-section (4), after clause (j), the following clause shall be inserted, namely:-
"(j-1) He/She shall submit at the end of every financial year the declaration of assets and liabilities of his/her and his/her family.
Explanation: For the purpose of this clause 'family' means "Chief Executive Officer and his/her Spouse, Unmarried Daughter and Undivided Son."
13. Amendment of section 29H. In the principal Act, in section 29H,-
(i) in sub-section (1), the words "of the elected", shall be omitted;
(ii) in sub-section (2), the word "elected", shall be omitted; and
(iii) after sub-section(2), the following shall be inserted, namely:-
"Provided that, the professional and functional directors as specified in sub-section (4A) of section 28A shall not be part of the no-confidence motion." 14. Amendment of section 30.- In the principal Act, in section 30, in sub-section (2), the first proviso shall be omitted.
15. Amendment of section 31. In the principal Act, in section 31, in sub-section(1), the proviso shall be omitted.
16. Insertion of new section 39AB. In the principal Act, after section 39AA, the following section shall be inserted, namely:-
"39AB Declaration of Assets and Liabilities (1) Every candidate. contesting to the election of the board shall submit the declaration of assets and liabilities of his/her and his/her family during filing the nomination.
Explanation:- For the purpose of this clause 'family' means "Candidate and his/her Spouse, Unmarried Daughter and Undivided Son."
17. Insertion of new section 53A. In the principal Act, after section 53 the following section shall be inserted, namely:-
"53A Nomination of members of committee by the State Government in certain cases. The State Government may nominate three persons as its representatives from among the members of co-operative society, of which one shall be a person belonging to the Scheduled Caste, one shall be from the Scheduled Tribe and one shall be from General Category, out of which, one shall be a woman in the Committee of every Assisted Society. Such nominated persons are not eligible either to vote or to contest in election of office bearers:
Provided that, the Government shall consider the members of such class or group of community who are not represented in the board of said society while nominating its representative.
Provided further that, the person so nominated shall hold the office as member of board during the pleasure of the State Government."
18. Amendment of section 57. In the principal Act, in section 57, in sub-section (2-A), the second proviso shall be omitted.
19. Amendment of section 57-A. In the principal Act, in section 57-A, after sub-section (1), the following sub-section shall be inserted namely:-
"(1-A) All Co-operative Societies which may be registered after commencement of the Karnataka Co-operative Societies (Amendment) Act, 2025 shall become the member of the respective District Co-operative Union as defined in section 2(e-2-2).
(1-B) All the Co-operative Societies which are already registered under this Act shall become the member of the respective District Co-operative Union within ninety days from the date of commencement of the Karnataka Co-operative Societies (Amendment) Act, 2025."
20. Amendment of section 58.- In section 58 of the Principal Act,-
(i) the clauses (a), (b) and (c) shall be omitted;
(ii) in clause (d), for the words "with any co-operative bank or the words and letters "with Karnataka State Co-operative Apex Bank Ltd. or District Central Co-operative Bank Ltd." shall be substituted;
(iii) in clause (e), the words "and approved by the general body of that society till the date of the next annual general body meeting" the words "with the prior permission of the Registrar" shall be substituted; and (iv) the second proviso shall be omitted.
21. Amendment of section 63. In the principal Act, in section 63, after sub-section (1), the following shall be inserted, namely:-
"(1-A) Notwithstanding anything contained in sub-section (1), except Co-operative Banks governed by the Banking Regulation Act, 1949 (Central Act 10 of 1949), once in every three years, every co-operative society shall get its accounts audited by the Director of Co-operative Audit "
22. Amendment of section 72. In the principal Act, in section 72, after sub-section (3), the following shall be inserted, namely:-
"(3-A) The Registrar in his order for the cancellation of winding up of cooperative society, Liquidator shall be re designated as an Administrator to the said co-operative society to conduct the election".
23. Amendment of section 980.- In the principal Act, in section 98Q, in sub section (1), for the words "within two months from the date of supersession", the words "before expiry of the term of administrator", shall be substituted.
STATEMENT OF OBJECTS AND REASONS
It is considered necessary further to amend the Karnataka Co-operative Societies Act, 1959 (Karnataka Act No. 11 of 1959) to,-
(1) re-define the word "Assisted Society" and to define the word "District Co-operative Union";
(2) appoint a member, instead of the director of a Co-operative society by the Board to represent that Co-operative society in other Co-operative society;
(3) increase the number of members of the board from not less than thirteen to not less than fifteen and to revise the number of members of the board in Taluk and District level;
(4) prescribe the manner to exercise the votes by the voters of the society in the Election for the reserved seats of the Board of Secondary Co-operation Societies, Federal Co-operative Societies and Apex Co-operative Societies.
(5) provide social justice and representation to the deprived and un-represented sections of the society in Co-operative sector;
(6) provide submission of assets and liabilities by the candidate contesting to the election of the board, Director and Chief Executive officer of Co-operative society and to disqualify any member if he fails to submit assets and liabilities every financial year;
(7) provide reservation to the scheduled castes and scheduled Tribes, other Backward Classes and women in election process to president and vice-president of Primary Agriculture Co-operative Society, Milk Producers Co-operative Society and other Primary Assisted Society in the State;
(8) provide the manner to convene the meeting of the board after constitution of the board in general election;
(9) provide nomination of three persons as representation from among the members of co-operative societies by the Government; and
(10) certain other consequential amendments are also made.
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