Co-operative Societies Act, 1912

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THE CO-OPERATIVE SOCIETIES ACT, 1912 
 
 
 
CONTENTS 
 
PRELIMINARY 
 
1. Short title and extent 
 
2. Definitions  
 
REGISTRATION 
3. The Registrar 
 
4. Societies which may be registered 
  
5. Restrictions on interest of member of society with limited liability and a share capital 
 
6. Conditions of registration 
 
7. Power of Registrar to decide certain questions  
 
8. Application for registration 
 
9. Registration 
 
10. Evidence of registration  
 
11. Amendment of the bye-laws of a registered society 
 
RIGHTS AND LIABILITIES OF MEMBERS 
 
12. Member not to exercise rights till due payment made 
 

 
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13. Votes of members 
 
14. Restrictions on transfer of share of interest 
 
DUTIES OF REGISTERED SOCIETIES 
 
15. Address of societies 
 
16. Copy of Act, rules and bye-laws to be open to inspection 
 
17. Audit 
 
PRIVILEGES OF REGISTERED SOCIETIES 
 
18. Societies to be bodies corporate 
 
19. Prior claim of society 
 
20. Charge and set-off in respects of shares or interests of member 
 
21. Shares or interest not liable to attachment  
 
22. Transfer of interest on death of member 
 
23. Liability of past member 
 
24. Liability of the estates of deceased member  
 
25. Register of members 
 
26. Proof of entries in societies books 
 
27. Exemption from compulsory registration of instruments relating to s hares and debentures 
 of registered society 
 
28. Power to exempt from income tax stamp-duty and registration-fees 
 
PROPERTY AND FUNDS OF REGISTERED SOCIETIES 
 
29. Restrictions of loans 
 
30. Restrictions on borrowing  
 
31. Restrictions on other transactions with non-members  
 
32. Investment of funds 
 
33. Funds not to be divided by way of profit  
 
34. Contribution to charitable purpose 
 
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INSPECTION OF AFFAIRS 
35. Inquiry by Registrar 
 
36. Inspection of books of indebted society 
 
37. Costs of inquiry 
 
38. Recovery of costs 
 
DISSOLUTION OF SOCIETY 
39. Dissolution 
 
40. Cancellation of registration of society  
 
41. Effect of cancellation of registration  
 
42. Winding up 
 
RULES 
 
43. Rules 
 
MISCELLANEOUS 
 
44. Recovery of sums due to Government 
 
45. Power to exempt registered societies from conditions as to registration 
 
46. Power to exempt registered societies from provisions of the Act  
 
47. Prohibition of the use of the word “co-operative” 
 
48. Indian Companies Act, 1882, not to apply  
 
49. Savings of existing societies  
 
50. [Repealed.] 
 
 
 
 
 
 
 
 
 
 
 
 
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THE CO-OPERATIVE SOCIETIES ACT, 1912 
 
1Act No. II OF 1912 
[1st March, 1912] 
An Act to amend the Law relating to Co-operative Societies 
 
WHEREAS it is expedient further to facilitate the formation of Co-operative Societies for the 
promotion of thrift and self-help among agriculturists, artisans and persons of limited means, and for 
that purpose to amend the law relating to Co-operative Societies; It is hereby enacted as follows:— 
PRELIMINARY 
 
 1. Short title and extent.—(1) This Act may be called the Co-operative Societies Act, 1912; 
and 
 
 (2) It extends to 2[the whole of Pakistan]. 
 
2. Definition. In this Act; unless there is anything repugnant in the subject or context,— 
 
(a) " bye-laws " means the registered bye-laws for the time being in force, and includes 
a registered amendment of the bye-laws: 
 
(b) "committee" means the governing body of a registered society to whom the 
management of its affairs is entrusted: 
 
(c) " member " includes a person joining in the application for the registration of a 
society and a person admitted to membership after registration in accordance with 
the bye-laws and any rules: 
 
(d) " officer" includes a chairman, secretary, treasurer, member of committee, or other 
person empowered under the rules or the bye-laws to give directions in regard to 
the business of the society : 
 
(e) " registered society " means a society registered or deemed to be registered under 
this Act: 
 
(f)  " Registrar " means a person appointed to perform the duties of a Registrar of 
Co-operative Societies under this Act: and 
 
(g)  " rules " means rules made under this Act. 
1For Statement of Objects and Reasons, see Gazette of India, 1911, Pt. V, p.95; for Report of Select Committee, see ibid., 1912, Pt.V, p.7; and  for 
Proceedings in Council, see ibid.,1911, Pt.VI, pp. 186, 679, and ibid., 1912, Pt. VI, pp.3,31 and 256.This Act has been declared to be in force in 
Baluchistan by the British Baluchistan Laws Regulations, 1913 (2 of 1913), s.3. 
It has been extended to the Leas ed Areas of Baluchistan, see the Leased Areas (Laws) Order, 1950 (G.G.O.3 of 1950); and applied in the Federated 
Areas of Baluchistan, see Gazette of India, 1937, Pt. I, p.1499. 
The Act has also been applied in the Federated Areas of Baluchistan, see Gazette of Pakistan, 1955, Pt.I, p. 28. 
The Act has been amended in its application to the Province of the Punjab, see Punjab Act No. 10 of 1955. 
It has been applied to Phulera in the Excluded Area of Upper Tanawa to the extent the Act is applicable in the N.W. F.P., subject to certain 
modifications; see N.W.F.P (Upper Tanawal) (Excluded Area) laws Regulation, 1950. 
It has been extended to the Excluded Area of Upper Tanawal other than Phulera by the N.W.F.P (Upper Tanawal) (Excluded Area) Laws Regulation, 
1950 and declared to be in force in that area with effect from 1st June, 1951, see N.W.F.P., Gazette, Extraordinary, dated 1st June,  1951. 
It has been rep. in its application to the Bombay Presidency by the Bombay Co-operative Societies Act, 1925 (Bom. 7 of 1925). 
This Act has been amended to the extent of Islamabad Capital Territory, see Ordinance No. XXVII of 1981, s.5 and 4th Sch. 
This Act has been rep. in its application to the Province of Sind by Sind Act VII of 1925, s. 72. 
The Act has been repealed in its application to the Province of W. Pakistan, see W.P. Ord. No. VII of 1965. 
2Subs. by the Central Laws (Statute Reform) Ordinance, 1960 (21 of 1960), s.3 and 2 nd Sch. (with effect from the 14 th October, 1955), for “all the 
Provinces and the Capital of the Federation” which had been subs. by A.O., 1949, Arts. 3(2) and 4, for “the whole of British India”. 
 
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REGISTRATION 
 
 3. The Registrar. The 1[Provincial Government] may appoint a person to be Registrar of 
Co-operative Societies for the Province or any portion of it, and may appoint persons to assist such 
Registrar, and may, by general or special order, confer on any such persons all or any of the powers 
of a Registrar under this Act. 
 
 4. Societies which may be registered. 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 Act with or without limited liability. 
 
 Provided that unless the 1[Provincial Government] by general or special order otherwise 
directs. 
 
 (1) the liability of a society of which a member is a registered society shall be limited; 
 
 (2) the liability of a society of which the object is the creation of funds to be lent to its 
members, and of which the majority of the members are agriculturists, and of which no member is a 
registered society, shall be unlimited. 
 
 5. Restrictions on interest of member of society with limited, liability and a share capital. 
Where the liability of the members of a society is limited by shares, no member other than a 
registered society shall— 
 
(a)  hold more than such portion of the share capital of the society, subject to a 
maximum of one-fifth, as may be prescribed by the rules; or 
 
(b)  have or claim any interest in the shares of the Society exceeding one thousand 
rupees. 
 
 6. Conditions of registration. —(1) No society, other than a society of which a member is a 
registered society, shall be registered under this Act which does not consist of at least ten persons 
above the age of eighteen years and, where the object of the society is the creation of funds to be lent 
to its members, unless such persons— 
 
(a)  reside in the same town or village or in the same group of villages; or 
 
(b)  save where the Registrar otherwise directs, are members of the same tribe, class, 
caste or occupation. 
 
 (2) The word " limited " shall be the last word in the name of every society with limited 
liability registered under this Act. 
 
7. Power of Registrar to decide certain questions. When any question arises whether for the 
purposes of this Act a person is an agriculturist or a non-agriculturist, or whether any person is a 
resident in a town or village or group of villages, or whether two or more villages shall be considered 
to form a group, or whether any person belongs to any particular tribe, class, caste or occupation, the 
question shall be decided by the Registrar, whose decision shall be final. 
 
1Subs. By A. O., 1937, for “L.G.”. 
 
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 8. Application for registration.—(1) For purposes of registration an application to a register 
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 section 6, sub-section (1); 
and 
 
(b)  in the case of a society of which a member is a registered society, by a duly 
authorised person on behalf of every 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 a copy of the proposed bye-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. 
 
 9. Registration. If the Registrar is satisfied that a society has complied with the provisions of 
this Act and the rules and that its proposed bye-laws are not contrary to the Act or to the rules, he 
may, if he thinks fit, register the society and its bye-laws. 
 
 10. Evidence of registration. 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. 
 
 11. Amendment of the bye-laws of a registered society.—(1) No amendment of the bye-laws 
of a registered society shall be valid until the same has been registered under this Act, for which 
purpose a copy of the amendment shall be forwarded to the Registrar. 
 
 (2) If the Registrar is satisfied that any amendment of the bye-laws is not contrary to this Act or 
to the rules, he may, if he thinks fit, register the amendment. 
 
 (3) When the Registrar registers an amendment of the byelaws of a registered society, he shall 
issue to the society a copy of the amendment certified by him, which shall be conclusive evidence 
that the same is duly registered. 
 
RIGHTS AND LIABILITIES OF MEMBERS 
 
 12. Member not to exercise rights till due payment made. 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 bye-laws. 
 
 13. Votes of members.—(1) Where the liability of the members of a registered society is not 
limited by shares, each member shall, notwithstanding the amount of his interest in the capital, have 
one vote only as a member in the affairs of the society. 
 
 (2) Where the liability of the members of a registered society is limited by shares, each 
member shall have as many votes as may be prescribed by the bye-laws. 
 
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 (3) A registered society which has invested any part of its funds in the shares of any other 
registered society may appoint as its proxy, for the purpose of voting in the affairs of such other 
registered society, any one of its members. 
 
 14. Restrictions on transfer of share of interest.—(1) The transfer or charge of the share or 
interest of a member in the capital of a registered society shall be subject to such conditions as to 
maximum holding as may be prescribed by this Act or by the rules. 
 
 (2) In 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— 
 
(a) he has held 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. 
 
DUTIES OF REGISTERED SOCIETIES 
 
 15. Address of societies. 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 thereof. 
 
 16. Copy of Act, rules and bye-laws to be open to inspection. Every registered society shall 
keep a copy of this Act and of the rules governing such society, and of its bye-laws, open to 
inspection free of charge at all reasonable times at the registered address of the society. 
 
 17. Audit.—(1) The Registrar shall audit or causes to be audited by some person authorised by 
him by general or special order in writing in this behalf the accounts of every registered society once 
at least in every year. 
 
 (2) The audit under sub-section (1) shall include an examination of overdue debts, if any, and a 
valuation of the assets and liabilities of the society. 
 
 (3) The Registrar, the Collector or any person authorised by general or special order in writing 
in this behalf by the Registrar shall at all times have access to all the books, accounts, papers and 
securities of a society, 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. 
PRIVILEGES OF REGISTERED SOCIETIES 
 
 18. Societies to be bodies corporate. The registration of a society shall render it a body 
corporate by the name under which it is registered, with perpetual succession and a common seal, 
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 purposes of its constitution. 
 
 19. Prior claim of society. Subject to any prior claim of the 1[Government] in respect of 
land-revenue or any money recoverable as land-revenue or of a landlord in respect of rent or any 
money recoverable as rent, a registered society shall be entitled in priority to other creditors to 
enforce any outstanding demand due to the society from a member or past member— 
 
1Subs. By A.O., 1961, Art. 2 (with effect from the 23rd March, 1956), for “Crown” which had been subs. By A. O., 1937, for “Govt”. 
 
 
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(a)  in respect of the supply of seed or manure or of the loan of money for the purchase 
of seed or manure upon the crops or other agricultural produce of such member or 
person at any time within eighteen months from the date of such supply or loan; 
 
(b)  in respect of the supply of cattle, fodder for cattle, agricultural or industrial 
implements or machinery, or raw materials for manufacture, or of the loan of 
money for the purchase of any of the foregoing things-upon any such things so 
supplied, or purchased in whole or in part from any such loan, or on any articles 
manufactured from raw materials so supplied or purchased. 
 
 20. Charge and set-off in respects of shares or interests of member. A registered society 
shall have a charge upon the share or interest in the capital and on the deposits of a member or past 
member and upon any dividend, bonus or profits payable to a member or past member in respect of 
any debt due from such member or past member to the society, and may set-off any sum credited or 
payable to a member or past member in or towards payment of any such debt. 
 
 21. Shares or interest not liablie to attachment. Subject to the provisions of section 20, 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 of Justice in respect of any debt or liability incurred by 
such member, and neither the Official Assignee under 1[the Insolvency (Karachi Division) Act], nor 
a Receiver under the 2[Provincial Insolvency Act, 1920 (V of 1920)], shall be entitled to or have ' any 
claim on such share or interest. 
 
 22. Transfer of interest on death of member.- (l) 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 person 
as may appear to the committee to be the heir or legal representative of the deceased member, or 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 bye-laws: 
Provided that— 
 
(i)  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; 
 
(ii)  in the case of a society with limited liability, the society shall 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 bye-laws for 
membership of the society, or on his application within one month of the death of 
the deceased member to any person specified in the application who is so qualified. 
 
 (2) A registered society may 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. 
 
1the Original word “the Presidency -towns. Insolvency Act, 1909” were first subs. By the Federal Laws (Revision and Declaration) Act, 1951 (26 of 
1951), s. 4 and III Sch., and then amended by the Repea ling and Amending Ordinance, 1961 (1 of 1961), s. 3 and 2 nd Sch., and A.O., 1964, Art. 2 and 
Sch., to read as above. 
2Subs by Ord. XXVII of 1981, s.5 and Sch IV (only to the extent of Islamabad Capital Territory). 
 
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 23. Liability of past member. The liability of a past member for the debts of a registered 
society as they existed at the time when he ceased to be a member shall continue for a period of two 
years from the date of his ceasing to be a member. 
 
 24. Liability of the estates of deceased member. The estate of a deceased member shall be 
liable for a period of one year from the time of his decease for the debts of a registered society as 
they existed at the time of his decease. 
 
 25. Register of members. Any register or list of members or shares kept by any registered 
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. 
 
 26. Proof of entries in societies books. 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 suit or legal proceeding, 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. 
 
 27. Exemption from compulsory registration of instruments relating to shares and 
debentures of registered society. Nothing in section 17, sub-section (1), clauses (b) and (c), of the 
Registration Act, 1908 (XVI of 1908), shall apply to— 
 
 (1) any instrument relating to shares in a registered society, notwithstanding that the assets of 
such society consist in whole or in part of immoveable property; or 
 
 (2) any debenture issued by any such society and not creating, declaring, assigning, limiting or 
extinguishing any right, title or interest to or in immoveable property except in so far as it entitles the 
holder to the security afforded by a registered instrument whereby the society has mortgaged, 
conveyed or otherwise transferred the whole or part of its immoveable property or any interest 
therein to trustees upon trust for the benefit of the holders of such debentures; or 
 
 (3) any endorsement upon or transfer of any debenture issued by any such society. 
 
1[28. Power to exempt from income tax stamp-duty and registration-fees.—(1) The 
2[Federal Government], by notification3 in the 4[official Gazette], may, in the case of any registered 
society or class of registered society, remit 5* * the income-tax payable in respect of the profits of the 
society, or of the dividends or other payments received by the members of the society on account of 
profits; 
 
6* * * * * * 
 
7[(2) The 8[Provincial Government], by notification in the 9[official Gazette], may, in the case 
of any registered society or class of registered society, remit— 
 
1The original s. 28 was re-numbered as sub-section (1) of that section by the Devolution Act, 1920 (38 of 1920), s.2 and Sch. I. 
2Subs. by F.A.O., 1975, Art. 2 and Table, for “Central Government”, which was previously amended by A.O., 1937, for “G.G. in C.”. 
3For notifications under this section, see Gen. R. & O. 
4Subs. by A.O., 1937, for “Gazette of India”. 
5The letter and parentheses “(a)” rep. by Act 38 of 1920, s.2 and Sch. I. 
6Clauses (b) and (c) rep., ibid. 
7Sub-section (2) ins., ibid. 
8Subs. by A.O., 1964, Art. 2 and Sch., for “Government” which had been subs. by A.O., 1937, for “L.G.”. 
9Subs. by A.O., 1937, for “local official Gazette”. 
 
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(a)  the stamp-duty with which, under any law for the  time being in force, instruments 
executed by or on 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, and 
 
(b)  any fee payable under the law of registration for the time being in force. 
 
1* * * * * * 
PROPERTY AND FUNDS OF REGISTERED SOCIETIES 
 
 29. Restrictions of loans. (1) A registered society shall not make a loan to any person other 
than a member : 
 
 Provided that, with the general or special sanction of the Registrar, a registered society may 
make loans to another registered society. 
 
 (2) Save with the sanction of the Registrar, a society with unlimited liability shall not lend 
money on the security of moveable property. 
 
 (3) The 2[Provincial Government] may, by general or special order, prohibit or restrict the 
lending of money on mortgage of immoveable property by any registered society or class of 
registered societies. 
 
 30. Restrictions on borrowing. 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 bye-laws. 
 
 31. Restrictions on other transactions with non-members. Save as provided in sections 29 
and 30, the transactions of a registered society with persons other than members shall be subject to 
such prohibitions and restrictions, if any, as the 2[Provincial Government] may, by rules, prescribe. 
 
 32. Investment of funds.—(1) A registered society may invest or deposit its funds— 
 
(a)  in the Government Savings Bank, or 
 
(b) in any of the securities specified in section 20 of the Trusts Act, 1882 (II of 1882), 
or 
 
(c)  in the shares or on the security of any other registered society, or 
 
(d)  with any bank or person carrying on the business of banking approved for this 
purpose by the Registrar, or 
 
(e)  in any other mode permitted by the rules. 
 
 (2) Any investments or deposits made before the commencement of this Act which would have 
been valid if this Act had been in force are hereby ratified and confirmed. 
 
1The paragraph as amended by A.O., 1937, and A.O., 1961, Art, 2 and Sch, (with effect from the 23rd March, 1956), has been omited by A.O. 1964, Art. 
2 and Sch. 
2Subs by A.O., 1937 FOR “L.G” 
 
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 33. Funds not to be divided by way of profit. No part of the funds of a registered society 
shall be divided by way of bonus or dividend or otherwise among its members. 
 
 Provided that after at least one-fourth of the net profits in any year have been carried to a 
reserve fund, payments from the remainder of such profits and from any profits of past years 
available for distribution may be made among the members to such extent and under such conditions 
as may be prescribed by the rules or bye-laws. 
 
 Provided also 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 1[Provincial Government] in this behalf. 
 
 34. Contribution to charitable purpose. Any registered society may, with the sanction of the 
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, as 
defined in section 2 of the Charitable Endowments Act, 1890 (VI of 1890). 
INSPECTION OF AFFAIRS 
 
 35. Inquiry by Registrar.—(1) The Registrar may of his own motion, and shall on the request 
of the Collector, or on the application of a majority of the committee, or of not less than one-third of 
the members, hold an inquiry or direct some person authorised by him by order in writing in this 
behalf to hold an inquiry into the constitution, working and financial condition of a registered 
society. 
 
 (2) All officers and members of the society shall furnish such information in regard to the 
affairs of the society as the Registrar or the person authorised by the Registrar may require. 
 
 36. Inspection of books of indebted society.—(1) The Registrar shall, on the application of a 
creditor of a registered society, inspect or direct some person authorised by him by order in writing 
in this behalf to inspect the books of the society 
Provided that— 
 
(a)  the applicant satisfies the Registrar that the debt is a sum then due, and that he has 
demanded payment thereof and has not received satisfaction within a reasonable 
time; and 
 
(b)  the applicant deposits with the Registrar such sum as security for the costs of the 
proposed inspection as the Registrar may require. 
 
 (2) The Registrar shall communicate the results of any such inspection to the creditor. 
 
 37. Costs of inquiry. Where an inquiry is held under section 35, or an in spection is made 
under section 36, the Registrar may apportion the costs, or such part of the costs as he may think 
right, between the society, the members or creditor demanding an inquiry or inspection, and the 
officers or former officers of the society. 
 
 38. Recovery of costs. Any sum awarded by way of costs under section 37 may be recovered, 
on application to a Magistrate having jurisdic tion in the place where the person from whom the 
money is claimable actually and voluntarily resides or carries on business, by the distress and sale of 
any moveable property within the limits of the jurisdiction of such Magistrate belonging to such 
person. 
 
1Subs. by A.O., 1937, for “L.G.”. 
 
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DISSOLUTION OF SOCIETY 
 
 39. Dissolution.—(1) If the Registrar, after an inquiry has been held under section 35 or after 
an inspection has been made under section 36 or on receipt of an application made by three-fourth of 
the members of a registered society, is of opinion that the society ought to be dissolved, he may 
cancel the registration of the society. 
 
 (2) Any member of a society may, within two months from the date of an order made under 
sub-section (1), appeal from such order. 
 
 (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. 
 
 (4) Where an appeal is presented within two months, the order shall not take effect until it is 
confirmed by the appellate authority. 
 
 (5) The authority to which appeals under this section shall lie shall be the 1[Provincial 
Government]. 
 
 Provided that the 1[Provincial Government] may, by notification in the 2[official Gazette], 
direct that appeals shall lie to such Revenue-authority as may be specified in the notification. 
 
 40. Cancellation of registration of society. Where it is a condition of the registration of a 
society that it should consist of at least ten members, the Registrar may, by order in writing, cancel 
the registration of the society if at any time it is proved to his satisfaction that the number of the 
members has been reduced to less than ten. 
 
 41. Effect of cancellation of registration. Where the registration of a society is cancelled, the 
society shall cease to exist as a corporate body— 
 
(a)  in the case of cancellation in accordance with the provisions of section 39, from the 
date the order of cancellation takes effect; 
 
(b)  in the case of cancellation in accordance with the provisions of section 40, from the 
date of the order. 
 
 42. Winding up.—(1) Where the registration of a society is cancelled under section 39 or 
section 40, the Registrar may appoint a competent person to be liquidator of the society. 
 
 (2) A liquidator appointed under sub-section (1) shall have power— 
 
(a)  to institute and defend suits and other legal proceedings on behalf of the society by 
his name of office; 
 
(b)  to determine the contribution to be made by the members and past members of the 
society respectively to the assets of the society; 
 
(c)  to investigate all claims against the society and, subject to the provisions of this 
Act, to decide questions of priority arising between claimants; 
 
1Subs. by A.O., 1937, for “L.G.”.  
2Subs. ibid., for “local official Gazette”. 
 
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(d)  to determine by what persons and in what proportions the costs of the liquidation 
are to be borne; and 
 
(e) to give such directions in regard to the collection and distribution of the assets of 
the society, as may appear to him to be necessary for winding up the affairs of the 
society. 
 
 (3) Subject to any rules, a liquidator appointed under this section 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 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 Civil Court under the Code of Civil 
Procedure, 19081 (V of 1908). 
 
 (4) Where an appeal from any order made by a liquidator under this section is provided for by 
the rules, it shall lie to the Court of the District Judge. 
 
 (5) Orders made under this section shall, on application, be enforced as follows:— 
 
(a)  when made by a liquidator, by any Civil Court having local jurisdiction in the same 
manner as a decree of such Court; 
 
(b)  when made by the Court of the District Judge on appeal, in the same manner as a 
decree of such Court made in any suit pending therein. 
 
 (6) Save in so far as is hereinbefore expressly provided, no Civil Court shall have any 
jurisdiction in respect of any matter connected with the dissolution of a registered society under this 
Act. 
 
RULES 
 
 43. Rules.—(1) The 2[Provincial Government] may, for the whole or any part of the Province 
and for any registered society or class of such societies, make rules3 to carry out the purposes of this 
Act. 
 
 (2) In particular and without prejudice to the generality of the foregoing power, such rules 
may— 
 
(a)  subject to the provisions of section 5, prescribe the maximum number of shares or 
portion of the capital of a society which may be held by a member; 
 
(b)  prescribe the forms to be used and the conditions to be complied with in the 
making of applications for the registration of a society and the procedure in the 
matter of such applications; 
 
(c)  prescribe the matters in respect of which a society may or shall make bye-laws and 
for the procedure to be followed in making, altering and abrogating bye-laws, and 
the conditions to be satisfied prior to such making, alteration or abrogation; 
 
1In its application to  Baluchistan this sub -section shall be read as if the words “or the British Baluchistan Civil Justice Regulation, 1896, as the case 
may be” were ins. at the end: see the British Baluchistan laws Regulation, 1913 (2 of 1913), Sch. I. 
2Subs. by A.O., 1937, for “L.G.”. 
3For rules, see different local Rules and Orders. 
 
Page 14 of 16 
 
(d)  prescribe the conditions to be complied with by persons applying for 
admission or admitted as members, and provide for the election and admission 
of members, and the payment to be made and the interest to be acquired before 
the exercise of the right of membership; 
 
(e)  regulate the manner in which funds may be raised by means of shares or debentures 
or otherwise; 
 
(f)  provide for general meetings of the members and for the procedure at such 
meetings and the powers to be exercised by such meetings; 
 
(g)  provide for the appointment, suspension and removal of the members of the 
committee and other officers, and for the procedure at meetings of the committee, 
and for the powers to be exercised and the duties to be performed by the committee 
and other officers; 
 
(h)  prescribe the accounts and books to be kept by a society and provide for the audit 
of such accounts and the charges, if any, to be made for such audit, and for the 
periodical publication of a balance-sheet showing the assets and liabilities of a 
society; 
 
(i)  prescribe the returns to be submitted by a society to the Registrar and provide for 
the persons by whom and the form in which such returns shall be submitted; 
 
(j)  provide for the persons by whom and the form in which copies of entries in books 
of societies may be certified; 
 
(k)  provide for the formation and maintenance of a register of members and, where the 
liability of the members is limited by shares, of a register of shares; 
 
(1) provide that any dispute touching the business of a society between members or 
past members of the society or persons claiming through a member or past member 
or between a member or past member or persons so claiming and the committee or 
any officer shall be referred to the Registrar for decision or, if he so directs, to 
arbitration, and prescribe the mode of appointing an arbitrator or arbitrators and the 
procedure to be followed in proceedings before the Registrar or such arbitrator or 
arbitrators, and the enforcement of the decisions of the Registrar or the awards of 
arbitrators; 
 
(m)  provide for the withdrawal and expulsion of members and for the payments, if any, 
to be made to members who withdraw or are expelled and for the liabilities of past 
members; 
 
(n)  provide for 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; 
 
(o)  prescribe the payments to be made and the conditions to be complied with by 
members applying for loans, the period for which loans may be made, and the 
amount which may be lent, to an individual member; 
 
Page 15 of 16 
 
 
(p)  provide for the formation and maintenance of reserve funds, and the objects to 
which such funds may be applied, and for the investment of any funds under the 
control of the society; 
 
(q)  prescribe the extent to which a society may limit the number of its members; 
 
(r)  prescribe the 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; 
 
(s)  subject to the provisions of section 39, determine in what cases an appeal shall lie 
from the orders of the registrar, and prescribe the procedure to be followed in 
presenting and disposing of such appeals; and 
 
(t)  prescribe the procedure to be followed by a liquidator appointed under section 42, 
and the cases in which an appeal shall lie from the order of such liquidator. 
 
 (3) The 1[Provincial Government] may delegate, subject to such conditions, if any, as it thinks 
fit, all or any of its powers to make rules under this section to any authority specified in the order of 
delegation. 
 
 (4) The power to make rules conferred by this section is subject to the condition of the rules 
being made after previous publication. 
 
 (5) All rules made under this section shall be published in the 2[official Gazette], and on such 
publication shall have effect as if enacted in this Act. 
 
MISCELLANEOUS 
 
 44. Recovery of sums due to Government. —(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 any costs awarded to the Govern ment under section 37, may be recovered in the same 
manner as arrears of land-revenue. 
 
 (2) Sums due from a registered society to Government and recoverable under sub -section (1) 
may be recovered, firstly, from the property of the society; secondly, in the case of a society of 
which the liability of the me mbers is limited, from the members subject to the limit of their liability; 
and, thirdly in the case of other societies, from the members. 
 
 45. Power to exempt societies from conditions as to registration.  Notwithstanding anything 
contained in this Act, the 1[Provincial Government] may, by special order in each case and subject to 
such conditions, if any, as it may impose, exempt any society from any of the requirements of this 
Act as to registration. 
 
 46. Power to exempt registered societies from provisi ons of the Act.  The 1[Provincial 
Government] may, by general or special order, exempt any registered society from any of the 
provisions of this Act or may direct that such provisions shall apply to such society with such 
modifications as may be specified in the order. 
 
1Subs. by A.O., 1937, for “L.G.”. 
2Subs. ibid., for “local official Gazette”. 
 
Page 16 of 16 
 
 47. Prohibition of the use of the word “co-operative”. (1) No person other than a registered 
society shall trade or carry on business under any name or title of which the word " co-operative " is 
part without the sanction of the 1[Provincial Government]: 
 
 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 date on which this 
Act comes into operation. 
 
 (2) Whoever contravenes the provisions of this section shall be punishable with fine which may 
extend to fifty rupees, and in the case of a continuing offence with further fine of five rupees for each 
day on which the offence is continued after conviction therefor. 
 
 48. Indian Companies Act, 1882, not to apply. The provisions of the 2[Companies Act, 1913 
(VII of 1913)], shall not apply to registered societies. 
 
 49. Savings of existing societies. Every society now existing which has been registered under 
the Co-operative Credit Societies Act, 1904 (X of 1904) shall be deemed to be registered under this 
Act, and its bye-laws shall, so far as the same are not inconsistent with the express provisions of this 
Act, continue in force until altered or rescinded. 
 
 50. 3[Repeal]. Rep. by the Second Repealing and Amending Act, 1914. (XVII of 1914), s. 3 and 
Schedule II. 
 
 
 
___________ 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Date: 11-09-2024 
1Subs. by A.O., 1937, for “L.G.”. 
2See now the Companies Act, 1913 (7 of 1913). 
3Subs. By Ord. No XXVII of 1981, S. 5 and Sch. IV (only to the extent of Islamabad Capital Territory).