CO-OPERATIVE SOCIETIES

(1) There may be appointed a Registrar of Co-operative Societies for Sri Lanka or any portion thereof and such number of Deputy, Senior Assistant, or Assistant, Registrars as may be necessary.

(2) The Minister may, by general or special Order, confer on any Deputy, Senior Assistant or Assistant Registrar all or any of the powers of a Registrar under this Law or under any rules made there under.

(3) The person appointed to be, or to act for the time being as, the Commissioner of Co-operative Development shall have and may exercise the same powers as are vested in the Registrar of Co-operative Societies by this Law and by any rules made or deemed to be made thereunder.

(4) Each of the persons appointed to assist the Commissioner of Co-operative Development shall have and may exercise such of the powers of the Registrar under this Law and under any rules made or deemed to he made thereunder as may he specified by the Minister in any general or special Order made under this section.

(a) a society which has as its object the provision, in accordance with cooperative principles, of specified services contributing to the economic social, educational and cultural welfare of its members ;

(b) a society consisting of registered societies as its members established with the object of facilitating tilt operation of societies referred to paragraph (a),

(1) No society shall be registered under this Law

(2) Where for the purposes of this section any question arises as to whether the conditions specified in the preceding provisions have been satisfied that question shall be decided by the Registrar whose decision shall be final.

(3) The word “Limited” shall be the last word in, or the equivalent of that word in Sinhala or Tamil shall form part of, the name of every society with limited liability registered under this Law.

(1) For the purposes of registration an application shall be made to the Registrar in such Form as may be prescribed.

(2) The application shall be signed-

(3) The application shall be accompanied by

(1) 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.

(2) The Registrar shall upon registering a society under section 6 issue to such society a certificate of registration.

(1) Any registered society may, subject to this Law and the rules made thereunder, 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 Law for which purpose two copies of the amendment shall be forwarded to the Registrar.

(2A) NO amendment of a by-law of a registered society shall be registered unless such amendment is accompanied by a report referred to in section 4(1) (c) (ii).

(3) If the Registrar is satisfied that any amendment of the by-laws is not contrary to this Law or to the rules, he may, if he thinks fit, register the amendment. An appeal in accordance with such rules as may be made in that behalf shall lie to the Minister 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 obligations 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) Where 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 him, which shall be conclusive evidence of the fact that the amendment has been duly registered.

(6) In this section ” amendment” includes the making of a new by-law and the variation or rescission of a by-law.

(1) A registered society may, with the previous approval of the Registrar and by a resolution passed by a two-thirds majority of the members or delegates eligible to be present and vote at a general meeting of the society-

(2) Any two or more registered societies may, with the previous approval of the Registrar and by a resolution passed by a two-thirds majority of the members or delegates eligible to be present and vote at a general meeting of each such society, amalgamate themselves and form a new society.

(3)

(4) Where a registered society has passed any such resolution, it shall give notice thereof in writing to all its members and creditors and, notwithstanding any by laws or contract to the contrary, any member or creditor shall, during the period of one month of the date of service of the notice upon him, have the option of withdrawing his shares, deposits or loans, as the case may be.

(5) Any member or creditor who does not exercise his option within the period specified in subsection (4) shall be deemed to have assented to the proposals contained in the resolution.

(6) Where a resolution passed by a registered society under this section involves the transfer of any assets and liabilities, the resolution shall, notwithstanding anything contained in any law for the time being in force, be a sufficient conveyance to vest the assets and liabilities in the transferee without any further assurance.

(1) Where the whole of the assets and liabilities of a registered society are transferred to another registered society in accordance with the provisions of section 9, the registration of the first-mentioned society certain cases. shall stand cancelled and that society shall be deemed to have been dissolved and shall cease to exist as a corporate body.

(2) When two or more registered societies are amalgamated into a new society in accordance with the provisions of section 9, the registration of each of the amalgamating societies shall stand cancelled on the registration of the new society and each such society shall be deemed to have been dissolved and shall cease to exist as a corporate body.

(3) Where a registered society divides itself into two or more societies in accordance with the provisions of section 9, the registration of that society shall stand cancelled on the registration of the new societies, and that society shall be deemed to have been dissolved and shall cease to exist as a corporate body.

(1) 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.

(1A) Where the liability of members of a society is limited, no member other than a registered society shall hold such portion of the share capital of the society, subject to a maximum of one-fifth as may be prescribed by the rules.

(2) Where a member of a registered society has not made such payment to the society or acquired such interest in the society as is referred to in subsection (1), it shall be lawful for the society, from any sum of money due from the society to such member in respect of the purchase of any scheduled agricultural product as an agent of the Paddy Marketing Board, to deduct any sum of money due to the society from such member in respect of such payment or such interest as is referred to in subsection (1).

(1) A registered society may admit as any associate member any individual who enters into a contract for the transaction of business with the by-laws of the society.

(2) An associate member shall not be entitled to any share, in any form whatsoever, in the assets or profits of the society, or any vote in the conduct of the affairs of the society.

(3) Save as provided in this section, an associate member shall have such privileges and rights of a member and be subject to such liabilities of a member, as may be specified in the by-laws of the society.

(1) No member of any primary society shall at any meeting of the society exercise his vote except in person:

Provided, however, that voting through delegates at any meeting of the society may be allowed where it is so provided under the by-laws of the society.

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

(1) The transfer of the share or other interest of a member or past member or deceased member in the capital of a registered society shall be subject to such conditions as to maximum holding as may be prescribed by this Law or by the rules.

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

(1) A registered society which has as one of its objects the disposal of any article which is the produce of agriculture or animal husbandry or any other industry, may provide in its by-laws or may contract with its members-

(2) A contract made by a registered society under subsection (1) shall create in favour of the society a first charge upon all articles, whether produced or about to be produced, to which the contract relates.

(3) In any legal proceedings arising out of a contract under subsection (1), it shall not be a defence that the contract is in restraint of trade.

(4) A member of a registered society shall be deemed not to have contravened any by-law of the society which requires him to deliver any produce to the society, if the failure to deliver such produce was due to the fact that he had, prior to becoming a member of the society, contracted to deliver the produce to some other person.

(5) Every person who applies for membership of a registered society shall, if required so to do, disclose in his application particulars of all contracts made by him for the delivery of any produce to any other person.

(1) Where the Minister is satisfied in the case of any registered society that the members of the society or any section hereof are producers of any article in Sri Lanka, or in any province, district or area in Sri Lanka, the Minister may in his discretion, by Order, direct each producer of that article in Sri Lanka or in such province, district or area in Sri Lanka, as the case may be, whether such producer is or is not a member of the society, to sell to or through the society such part of the total quantity of that article produced by him as is not required for his own use or consumption.

(2) Every Order made by the Minister under subsection (1) shall be published in the Gazette and shall specify the article, the area in which the Order shall operate and the basis on which the producer of such article shall be paid.

(3) Every Order shall come into operation on the date of its publication in the Gazette and shall subject to the provisions of subsection (5) continue in operation until it is rescinded.

(4) Every Order shall, as soon as may be after it has come into operation, be brought before Parliament for approval.

(5) Every Order which Parliament refuses to approve shall be deemed to be rescinded, but without prejudice to the validity of anything previously done or suffered to be done thereunder. The date on which an Order shall be deemed to be rescinded shall be the date on which Parliament refuses to approve the Order, and such date shall be notified in the Gazette.

(6)

(7) Every Order shall, when approved by Parliament, be as valid and effectual as if it were herein enacted.

(8) Every Notification required to be published in the Gazette under this section shall be published under the hand of the Minister.

(9) The provisions if any Order made under this section shall, notwithstanding that they are inconsistent with or in conflict with the provisions of any other written law, prevail over such other written law for the period during which the Order is in force.

(10) Every producer who is directed by Order under subsection (1) to sell any article to or through a registered society of which he is not a member, shall, in respect of any such’ sale in compliance with such direction and of any matter or transaction arising out of such sale, be subject to the same conditions and obligations to which he would have been subject if he were a member of the society.

(11) Where any producer in respect of whom an Order is made under subsection (1), and who is not a member of the registered society, applies for admission as a member of the society, the society shall-

(1) Any person who, having knowledge or notice that any other person has contracted under section 21 or is bound by an Order under section 22 to sell any article produced by such other person to or through a registered society, solicits or persuades such other person to sell or deliver such article, in violation of such contract or in contravention of such Order, as the case may be, shall be guilty of an offence and shall on conviction after summary trial before a Magistrate be liable to a fine not exceeding one thousand rupees.

(2) Where the person convicted of an offence under subsection (1) is a body corporate, every person who at the time of the commission of the offence was a director or officer of the body corporate shall be deemed to be guilty of that offence unless he proves that the offence was committed without his knowledge or that he exercised all due diligence to prevent the commission of the offence.

(a) any debt or outstanding demand payable to a registered society by any member or past member shall be a first charge-

(b) any outstanding demands or dues payable to a 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.

(a) any debt due to the society,

(b) any debt due to any other registered society, or

(c) any amount due to the liquidator of any registered society,

(1) On the death of a member, a registered society may transfer the share or other interest of the deceased member to the person nominated in accordance with the rules made in that 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 other interest, as ascertained in accordance with the rules or by-laws:

Provided that-

(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.

(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 to 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 by a society under this section shall be a sufficient discharge of the liability of that society in respect of that money.

(1) The liability of a past member for the debts of a registered society as they existed on the date on which he ceased to be a member shall continue for a period of two years reckoned from that date.

(2) The estate of a deceased member shall, for a period of two years reckoned from the date of his decease, be liable for the debts of the society as they existed on the date of his decease.

(a) the date on which the name of any person was entered in such register or list as a member;

(b) the date on which any such person ceased to be a member.

(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 registered society shall in any legal proceedings to which the society is not a party, be compelled to produce any of the society’s books, the contents of which can be proved under subsection (1) or to appear as a witness to prove any matters, transactions or accounts therein recorded, unless the court for special reasons so directs.

(a) pledge as security for a general balance of account any securities held by it; and

(b) authorize the creditor, in the event of default of payment on the date of the termination of a notice issued to the society, to sell any or all of such securities, without recourse to court, and to credit the proceeds to such balance of account

(1) Where any land or building is required for any purpose connected with the objects of a registered society, that purpose shall be deemed to be a public purpose and that land or building may be acquired under the Land Acquisition Act by the Government for that society.

(2) Where any land or building is to be acquired under the Land Acquisition Act by the Government for a registered society, that society shall, before an Order relating to that land or building is made under section 38 of that Act, pay to the Government the amount determined under that Act as the compensation payable in respect of that land or building and also the costs incurred by the Government in the acquisition proceedings:

Provided, however, that where it becomes necessary to take possession of any land or building on the ground of any urgency before the amount of compensation is determined under that Act, that society shall pay to the Government before such Order is made such amount as in the opinion of the acquiring officer is likely to be determined as the compensation payable in respect of that land or building, and shall pay the balance amount, if any, after the amount of compensation is determined under that Act.

(1) Every registered society shall be exempt from

(2) Every member of a registered society shall be exempt from the payment of any stamp duty chargeable under any written law in respect of any instrument executed by such member in favour of, and relating to the business of, such registered society in cases where but for the exemption granted by this subsection the member would be liable to pay the duty chargeable in respect of such instrument.

(1) Every by-law of a registered society shall, upon registration, be binding upon the society and the members thereof to the same extent as if the by-law was signed by each member of the society and contained a covenant by each such member to observe the provisions of the by-law.

(2) Any dispute arising out of the interpretation of a by-law of a registered society shall be referred to the Registrar for his decision, and his decision shall be final and conclusive in law.

(a) notice in writing of the intention to impose such fine and the reasons therefor have been given in writing to him by the society; and

(b) he has failed to show, within such time and in such manner as may be prescribed by rules, sufficient cause against the imposition of the fine.

(1) A registered society shall not make any loan to any person other than a member:

Provided that, with the approval of the general body of registered society and on such condition as may be imposed by it, a registered society may; grant loans to another registered society or supply goods on credit to an associate member.

(2) Provided that, with the approval of the genera, body, a registered society shall not lend money the security of any movable property other than agricultural produce

(1) 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.

(2) Where a loan is granted to a registered society by a bank on the mortgage of any immovable or movable property, such property shall, from and after the date of the registration of such mortgage under the Registration of Documents Ordinance, be charged with the payment of the moneys due under such mortgage in priority to every other debt of such registered society whatsoever and to every mortgage or charge affecting such property, except a mortgage or charge affecting such property which is secured by a mortgage duly registered under the Registration of Documents Ordinance prior to such date.

(1) A registered society may deposit or invest its funds in any of the securities other than a first mortgage of immovable property specified in section 20 of the Trusts Ordinance, or with any banker or person acting as a banker , or in the shares or on the security of any other registered society or in any other mode permitted by the rules.

(2) Any deposit or investment made before the 11th day of October, 1972, which would have been valid if this Law had been in force is hereby ratified and confirmed.

(1) Every registered society shall out of its net profits in any financial year as ascertained by the audit under section 44,-

(2) The balance of the net profits may be utilized for all or any of the following purposes:-

Subsection 3 Repealed by.

(1) Every registered the society shall cause proper accounts of the income and expenditure, assets and liabilities and of all other transactions of the society to be kept.

(2) Every registered society shall prepare an annual statement of accounts and statistics relating to the activities of the society, as may be required by the Registrar or any person authorized by him. Such statement of accounts shall be submitted to the Registrar or other person authorized by him within three months of the close of the financial year to which it relates.

(3) Where a registered society fails to comply with any of the provisions of this section every member of the Committee of such society shall be guilty of an offence, and shall on conviction after summary trial before a Magistrate be liable to a fine not exceeding two thousand rupees:

(1) Every registered society shall prepare a budget in respect of every financial year,. setting out projections of revenue, expenditure both recurrent and capital, financial and cash resources, investments of funds, budgeted profit and loss accounts, income and expenditure accounts and balance sheets pertaining to that year.

(2) Such budget shall be presented to the general body of the society for its approval not later than two months prior to the commencement of the financial year to which it relates.

(3) A copy of such budget shall be transmitted to the Registrar one month prior to the commencement of the financial year to which it relates.

(4) The form and manner in which the budget shall be prepared and the minimum information that it should contain, shall be as determined by the Registrar.

(5) The Minister may where he considers it expedient to do so having regard to the membership of a registered society and its income and expenditure by special or general order exempt any society from the requirements of this section.”.

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

(2) The audit under subsection (1) shall include”

(3) For the purposes of an audit under subsection (1), the Registrar or any person authorized by him to audit the accounts shall have the power-

(4) The Registrar or any person authorized by general or special order in writing in that behalf by the Registrar, shall at all times have access to and be entitled to examine all books, documents, accounts and papers, securities and cash in hand of a registered society and every person in charge of or maintaining or having possession of the aforesaid shall produce them to the Registrar or such authorized person or furnish such information in regard to the transactions and working of the society as the Registrar or the authorized person making such inspection or audit may require.

(5) The Registrar and every person authorized by him to audit the accounts of a registered society shall be deemed to be public servants within the meaning of the Penal Code.

(6)

(1) If on an audit held under section 44 any defects in the working of a registered society are disclosed, the Registrar may bring the defects to the notice of the society and if the society is a member of another society, also to the notice of that other society.

(2) The Registrar may make an order directing the society or its officers to take such action as may be specified in the order within the time mentioned therein to remedy the defects disclosed.

(1) The Register 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 inspection or direct some person authorized by him by orders in writing in that behalf to hold an inquiry into the constitution, working, and financial condition, or an inspection into the books of the registered society.

(2) For the purposes of an inquiry under subsection (]), the Registrar or any person authorized by him to hold an inquiry or inspection shall have the power,”

(3) The Registrar and every person authorized by him to hold an inquiry or inspection under this section shall be deemed to be public servants within the meaning of the Penal Code.”.

(1) If the Registrar is of opinion after an inquiry or inspection into the books of the registered society under section 46 that. the committee of a registered society is not performing its duties in a proper manner, he may after giving the committee an opportunity to state its objections, if any, to its dissolution, report his findings to the general body summoned by him in accordance with the rules, if such inquiry or inspection under section 46 had been held or: his own motion or, to the general meeting summoned in accordance with the by-laws, if such inquiry or inspection had been held on the application of a majority of the committee or, of not less than one-third of the number of members, and the general body may”

(2) The committee so elected or person or persons so appointed shall hold office for the remainder of the period of office of the dissolved committee.

(3) The person or persons appointed under paragraph (b) of subsection (1) may exercise all the powers, rights and privileges of a duly appointed committee of the society.

(4) Any person or persons appointed under paragraph (b) of subsection (1) shall be jointly and severally responsible for any loss sustained through any such acts committed by them as are contrary to the law, rules or by-laws of the society.

(5) The general body may fix the remuneration payable to any person, appointed under paragraph (b) of subsection (1) to manage the affairs of the society. The amount of such remuneration and other expenses, if any, incurred in the management of the society shall be payable from its funds.

(6) It shall be the duty of the person or persons appointed under this section to manage the affairs of a registered society dissolved under paragraph (b) of subsection (1) and holding office immediately prior to the date on which it ceases to hold office and to arrange for the election of a new committee in accordance with the by-laws of the society.

(7) Nothing in this section shall be deemed to affect the power of the Registrar to cancel the registration of the society under section 49.

(1) If the Registrar after an inquiry under section 46 or an inspection , or on receipt of an application for its dissolution made by three-fourths of the members of a registered society, and after giving an opportunity to the society and to the creditors of such society to state their objections, is of opinion that the society ought to be dissolved, he may by order under his hand cancel the registration of the society.

(2) Any member or any creditor of a registered society may, within two months from the date of an order under subsection (1), appeal from such order to the Minister.

(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 the two months, the order shall not take effect until it is confirmed.

(4) Where the Registrar cancels the registration of a society under subsection (1), he may appoint one or more persons to be in charge of the books, documents and other property of the society and to manage the affairs of the society until the order cancelling the registration of the society takes effect, or until such order is reversed in appeal by the Minister.

On the appointment of such person or persons the committee of the society or any other person in charge of the books, documents, and other property of the society shall hand over such books, documents or property to the first-mentioned person or persons and such committee shall until the order cancelling the registration takes effect or until such order is reversed in appeal by the Minister, cease to function.

(a) where it is a condition of the registration of the society that the society shall consist of at least ten members if the number of members of such society has been reduced to less than ten; or

(b) if a registered society has not commenced working during one year from the date of registration of such society or has ceased to work for a period of two years prior to the date of making the order of cancellation under this section.

(1) A liquidator appointed under section 52 shall, subject to the guidance and control of the Registrar and to any limitations imposed by the Registrar by order under section 54, have power to-

(2) Where there is any debt payable by any member or past member to a society whose registration is cancelled under section 49 or section 50 and such person is a member of any other society registered under this Law after the date of such cancellation, then the liquidator of such first-mentioned society appointed under section 52, shall, subject to the guidance and control of the Registrar and to any other limitations imposed by the Registrar by order under section 54, have power to require that such other society shall recover, from any sum of money due from such society to such person, a sum not exceeding such debt in like manner as if it was a debt due from such member to such other society and transmit the same to the liquidator.

(3) Subject to such rules as may be made in that behalf, any liquidator appointed under this Law 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 same manner as is provided in the case of a District Court under the Civil Procedure Code.

(1) A liquidator shall exercise his powers subject to the control and direction of the Registrar, who may-

(2) There shall be established a Fund called the ” Co-operative Fund ” to which shall be credited all the moneys collected by the liquidator, and such fund shall be operated by the Registrar in accordance with the rules .

(1) The decision of an arbitrator on any matter referred to him under section 54 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 53 or section 54 shall not be called in question in any civil court, and 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:

Provided that any bank which is a creditor of a society whose registration has been cancelled shall be entitled to appeal to the Minister from an order made by a liquidator or by the Registrar under section 53 or section 54 within two months from the date of such order of the liquidator or the Registrar.

(3) Where no appeal is presented to the Minister within two months of the making of an order by a liquidator or by the Registrar under section 53 or section 54, such order of the liquidator or the Registrar shall take effect on the expiry of that period. Where an appeal is presented to the Minister within the two months, the order of the liquidator or the Registrar shall not take effect until it is confirmed by the Minister.

(1) In the liquidation of a society whose registration has been cancelled, the funds, including the reserve fund, shall subject to the provisions of section 40 (2) be applied first to the costs of liquidation, then to the repayment of Government loans and Government guaranteed loans, then to the discharge of the other 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 six per centum per annum for any period for which no disposal of profits was made, and to the payment of a rebate to members for any period for which no disposal of profits has been made where such period is immediately preceding the date of dissolution.

(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, in respect of any claim against the funds of such society, no action shall be maintainable unless it is commenced within three months from the date of the publication of such notice in the Gazette.

(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), may be applied to such object of local or public utility as may be selected, subject to the approval of the Registrar, by the persons who were officers of the society at the date of the dissolution thereof.

If such persons fail within three months after the date on which the liquidation of the society is closed to select as aforesaid an object approved by the Registrar, the Registrar shall deposit the surplus in a bank or with a registered society.

The surplus so deposited may be paid into such Surplus Fund as may be constituted for the purposes of this Law. Disbursement out of such Surplus Fund may be made at the discretion of the Registrar for such purposes and in such manner as may be provided in the rules:

Provided, however, that any interest accruing on the surplus may be paid into the Co-operative Fund.

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

A claim by a registered society for any debt, demand or damages due to it from a member, officer or employee, whether past or present, or any nominee, heir or legal representative of a deceased member, officer or employee, or a claim for any debt, damage or demand due to a member from a register ed society, from an officer or employee or member, past or present or to any nominee, heir or legal representative of a deceased member, officer or employee, from a registered society, whether such debt, demand or damages is admitted or not, shall be deemed to be a dispute touching the business of a society within the meaning of this subsection.

(2) The Registrar may, on receipt of a reference under subsection (1)-

(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 by rules.

(4) No party to any appeal made to the Registrar under subsection (3) shall be entitled, either by himself or by any representative, to appear before and be heard by the Registrar on such appeal.

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

(6) The award of the arbitrator or arbitrators under subsection (2) shall, if no appeal is preferred to the Registrar under subsection (3) or if any such appeal is abandoned or withdrawn, be final and shall not be called in question in any civil court.

(7) The provisions of the Prescription Ordinance shall not apply to any claim which is the subject of a dispute under this section.

(8) If any question arises whether a dispute referred to the Registrar under this section is a dispute touching the business of a registered society the decision thereon of the Registrar shall be final and shall not be called in question in any civil court.

(9) In this section ” member” includes associate member.

(1) Where a decision of the Registrar on a dispute or an appeal referred or made to him under section 58, hereafter in this section called a ” decision ” or an award of an arbitrator on a dispute referred to him under that section, from which award no appeal has been duly made to the Registrar under that section, hereafter in this section called an ” award “, is that a sum of money is due from one party to the dispute to another party to the dispute, and such sum together with costs and interest, if any, has not been paid, the Registrar may in respect of the party from whom such sum is due, hereafter in this section called the ” defaulter”,-

(2)

(3) Where a certificate is issued to a District Court under paragraph (b) of subsection (1), the Court shall thereupon direct a writ of execution to issue to the Fiscal authorizing and requiring him to seize and sell all or any of the property movable and immovable of the defaulter, or such part thereof as he may deem necessary for the recovery of such sum, and the provisions of sections 226 and 297 of the Civil Procedure Code shall, mutatis mutandis, apply to such seizure and sale.

(4) Where a certificate is issued to a Magistrate under paragraph (c) of subsection (1), the Magistrate shall thereupon summon such defaulter before him to show cause why further proceedings for the recovery of the amount should not be taken against him, and in default of sufficient cause being shown, the amount shall be deemed to be a fine imposed by a sentence of the Magistrate on such defaulter for an offence punishable with fine only or not punishable with imprisonment, and the provisions of section 291 (except paragraphs (a) and (d) of subsection (1) of that section) of the Code of Criminal Procedure Act,No.15 of 1979 shall thereupon apply, and the Magistrate may make any direction which, by the provisions of that section, he could have made at the time of imposing such sentence. Any defaulter sentenced to a term of imprisonment in default of the fine imposed in accordance with section 291 of the Code of Criminal Procedure Act, No. 15 of 1979, shall not be absolved from the payment of any sum of money mentioned in the certificate specified in section 59 (1) (c).

(5) Where the Registrar issues a certificate under this section, he shall issue to the defaulter a notification thereof by personal service, registered post or telegraph; but non-receipt of such notification by the defaulter shall not invalidate proceedings under this section.

(6) Nothing in this section shall authorize or require a District Court or Magistrate in any proceedings thereunder to consider, examine or decide the correctness of any statement in the certificate of the Registrar.

(7) Any sum realized by a sale under subsection (3) and any sum paid or levied as fine under subsection (4) shall be transmitted by the District Court or the Magistrate, as the case may be, to the Registrar who shall dispose of such sum in accordance with the relevant decision or award.

(1) Where the application for membership of a registered society made by any person is refused by the society, such person may appeal to the Registrar against the refusal and the decision of the Registrar on such appeal shall be final and binding on the society.

(2) Where any question arises as to whether a member of a registered society has been duly elected to any office in the society or whether a member has ceased to be a member or officer of the society, or whether any general meeting of the society had been validly held, that question shall be decided by the Registrar whose decision shall be final.

(1) Where a registered society obtains a loan, advance or grant from the Government, every such loan, advance or grant shall be subject to the following conditions : ”

(2) If the Registrar is of opinion after an inquiry or inspection into the books of the registered society under section 46 that the committee of a registered society operating with State funds, is not performing its duties as required he may after giving such committee an opportunity to state It objections if any, to its dissolution report his findings to the general body summoned by him in accordance with the rules and such general body shall remove the committee within the time specified by the Registrar and; if the general body fails or neglects to do 30. the Registrar shall remove the committee and require the general body to appoint a Board of management. If the general body fails to appoint a Board of Management within fourteen days the Registrar may appoint a suitable person or persons to manage the affair of such Society. The members of the committee so removed shall not be eligible to be elected to office of any registered society for a period of five years from the date o’ such removal. The Board of Management appointed under this section shall hold office for the same period and shall have the same powers and functions as a person appointed under paragraph (b) of subsection (1) of section 48.

(1) If the Registrar is of the opinion after an inquiry and inspection into the books of the registered society under section 46, that any officer or employee of any registered society is not performing his duties in a proper manner, or is unfit or otherwise unable to discharge his duties efficiently, he may notwithstanding anything to the contrary in this Law, the Co-operative Employees Commission Act, No. 12 of 1972 or any other Law after giving such officer or employee, an opportunity to state their objections, by order in writing suspend or interdict, as the case may be such officer or employee pending such inquiry as may be necessary and after such inquiry remove such officer or employee from office :

Provided that any employee aggrieved by an order of removal made under this subsection, may appeal therefrom to ,the Cooperative Employees’ Commission established under Act, No. 12 of 1972 within a period of thirty days, and the decision of such Commission shall be final.

(2) Where any employee is removed under subsection (1) and where such order for removal has been affirmed by the Co-operative Employees’ Commission or no appeal against such order has been preferred within thirty days, another employee may be appointed, in accordance with the provisions applicable in respect of such appointment.

(1) The Minister 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 Law.

(2) In particular, and without prejudice to the generality of the powers conferred by subsection (1), such rules may-

(3) No rule shall have effect unless it has been approved by Parliament. Notification of such approval shall be published in the Gazette.

(4) Every rule shall, upon the publication in the Gazette of the Notification referred to in subsection (3), be as valid and effectual as though it were herein enacted.

(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, including sums due on Government loans and Government guaranteed loans, and any costs awarded to the Government under section 46 may be recovered in manner provided for the recovery of debts due to the Republic by the State Debtors Ordinance, and shall, subject to the provisions of section 40(2), be entitled to a preference of payment over sums due to any other person or persons.

(2) Sums due from a registered society to Government and recoverable under subsection (1) may be recovered, first from the property of the society; secondly in the case of a registered society of which the liability of the members is limited, from the members, subject to the limit of their liability; and thirdly, in the case of other societies, from the members.

(1) No person other than a registered society shall, without the sanction of the Minister, trade or carry on business under any name or title of which the word ” Co-operative “, or in Sinhala the words ” Eksath Sahakara ” or ” Samupakara ” or in Tamil the word ” Aikkiya ” or ” Kutturavu ” form part :

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 prior to the twenty-second day of September, 1921.

(2) Whoever contravenes the provisions of this section shall be liable on conviction after summary trial by a Magistrate’s Court to a fine which may extend to five hundred rupees, and in the case of a continuing offence, with a further fine of fifty rupees for each day on which the offence is continued after conviction therefor.

(1) Where in the course of an audit under section 44 or an inquiry under section 46, or inspection of books of a registered society, or in the course of the liquidation of a registered society, it appears that any sum of money or other property is due to the society from any person or group of persons who or which has taken part in the organization or management of the society or from any past or present officer or employee of the society, who has utilized the funds of the society contrary to the provisions of this Law or any other law or rules or regulations made thereunder or the by-laws or the working rules of the society or financial procedure approved by the Registrar or any general directions issued by the Registrar or the Co-operative Employees’ Commission, the Registrar may, of his own motion or upon the application of the committee or the liquidator or any creditor or contributor of the society, as the case may be, examine the conduct of such person or group of persons or officer or employee and make an order requiring him or such group-

Before making any such order against any person or group of persons the Registrar shall give that person or group of persons an opportunity of being heard and of showing cause why such order should not be made.

(2) Where an order under subsection (1) for the repayment of any sum to a registered society, or for the contribution of any sum to its assets by way of compensation, has not been complied with, such sum may be recovered by the Magistrate having jurisdiction in the division in which the registered place of business of- the society is situated or in which the person or group of persons or officer or employee against whom the order was made resides or carries on business as though it were a fine imposed by a sentence of the Magistrate, on such person or group of persons or officer or employee for an offence punishable with fine only or not punishable with imprisonment, and the provisions of section 291 (except paragraphs (a) and (d) of subsection (1) of that section) of the Code of Criminal Procedure Act No.15 of 1979 shall thereupon apply, and the Magistrate may make any direction which, by the provisions of that section, be could have made at the time of imposing such sentence. Nothing in this section shall authorize or require the Magistrate in any proceedings thereunder to consider, examine or decide the correctness of any order made by the Registrar.

(3) Neither the preceding provisions of this section nor the making of any order thereunder may be deemed or construed to preclude or otherwise affect the institution or maintenance of a prosecution against any person or group of persons, or officer or employee referred to in subsection (1) in respect of any offence under any other written law.

(1) The Chairman and every member of the committee of a registered society shall make, to the Commissioner of Co-operative Development, in the prescribed form, an annual declaration of”

as on the thirty-first day of March of the year in respect of which such declaration is made.

(2) The declaration referred to in subsection (1) shall be made by the Chairman or member of the committee of a registered society, to the Commissioner of Co-operative Development, within three months of his election or appointment, as the case may be, as such. Chairman or member, and unless he ceases to be such Chairman or member before the first day of July of every year succeeding the year in which he made his first declaration.

(a) to furnish any information regarding the transactions of any registered society with the bank;

(b) to produce a copy showing the account of the society with the bank from the ledger kept by the bank; or

(c) to produce any cheques paid to the credit of the society or endorsed by the society.

(1) Every registered society or an officer or employee or member thereof which or who wilfully neglects or refuses to do any act or to furnish any information required for the purposes of this Law by the Registrar or other person duly authorized by him in that behalf, and every person who wilfully or without any reasonable excuse disobeys any summons, requisition or lawful written order issued under the provisions of this Law, or fails to furnish any information lawfully required from him by a person authorized to do so under the provisions of this Law, and every registered society or officer or employee or member thereof which or who wilfully makes a false return or furnishes false information, shall be guilty of an offence under this Law.

(2) Every person who commits any offence referred to in subsection (I), shall on conviction after summary trial before a Magistrate, be liable to imprisonment of either description for a period not exceeding two years, or to a fine, not exceeding twelve thousand rupees, or to both such imprisonment and fine, notwithstanding that such punishment exceeds the ordinary jurisdiction of a Magistrate.

(3) Where any offence under this Law is committed by a registered society, every officer of the society bound by the by-laws or the rules to perform any duty whereof the offence is a breach, or if there is no such officer, then every member of the committee, unless that member is proved to have been ignorant of or to have attempted to prevent the commission of the offence, shall be liable to the same penalty as if he had committed the offence.

(a) any person or body of persons, corporate or unincorporate, which carries on in Sri Lanka the business of accepting from the public, or of creating, demand deposits;

(b) any agency or institution acting on behalf of the Government (whether established by any written law or otherwise) which makes loans, advances or investments or accepts deposits of money from the public;

(c) the Development Finance Corporation of Ceylon established under the Development Finance Corporation of Ceylon Act; and

(d) any other person or body of persons declared by the Minister in charge of the subject of Finance, in consultation with the Minister in charge of the subject of Co operative Development, by Order published in the Gazette, to be a bank for the purposes of this Law;