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An Act further to amend the Co-operative Societies Act, 1925

ACT XXII OF 2020

CO-OPERATIVE SOCIETIES (SECOND AMENDMENT) ACT, 2020

[Gazette of Punjab, Extraordinary, 10th September, 2020]

No. PAP /Legis-2(68)/2020/2360.–The Co-operative Societies (Second Amendment) Bill 2020, having been passed by the Provincial Assembly of the Punjab on September 02, 2020, and assented to by the Governor of the Punjab on September 08, 2020, is hereby published as an Act of the Provincial Assembly of the Punjab.

It is necessary further to amend the Co-operative Societies Act, 1925 (VII of 1925) for the purposes hereinafter appearing.

Be it enacted by Provincial Assembly of the Punjab as follows:

1. Short title and commencement–(1) This Act may be cited as the Co-operative Societies (Second Amendment) Act, 2020.

(2) It shall come into force at once.

2. Amendment of section 3 of Act VII of 1925–In the Cooperative Societies Act, 1925 (VII of 1925), for brevity referred to as ‘the Act’, in section 3:

(a)      the existing clause (a), shall be renumbered as (aa), and before the existing clause as renumbered, the following clause (a) shall be added:

“(a)     “beneficial owner” means a natural person who owns or controls a society, whether directly or indirectly or by voting rights or by exercising effective control in that society or by such other means as may be prescribed;”; and

(b)      after clause (d), the following clause (dd) shall be inserted:

“(dd)   “prescribed” means prescribed by the rules made under this Act;”.

3. Amendment of section 5 of Act VII of 1925–In the Act, in section 5, the existing clause (b) shall be renumbered as clause (g), and after clause (a), the following clauses shall be inserted:

“(b)     if a society is a member of another society, that society shall nominate any of its members to serve as a director of the society of which it is a member;

(c)      the director of a society who is nominated under clause (b) shall be a natural person and shall provide prescribed information to the society to which he is nominated in the prescribed manner;

(d)      the secretary of a society shall keep an updated record of any nominated directors, as well as provide prescribed information of the nominated directors to the Registrar both annually and from time to time When changes occur in the prescribed manner;

(e)      the Registrar shall keep an updated record of the nominated Directors of all societies in the prescribed manner;

(f)       other than as set out in sub-section (b), no director shall nominate on his behalf a member or director to perform the membership rights on his behalf.

4. Substitution of section 8 of Act VII of 1925–In the Act, for section 8, the following shall be substituted:

“8. Power of Registrar to decide certain questions: If any question arises as to whether for the purposes of this Act, a person is an agriculturist or not, or as to which patwar circle he is resident of, the question shall be decided by the Registrar, whose decision shall be the final.”.

5. Amendment of section 9 of Act VII of 1925.–In the Act, in section 9, in sub-section (2), in clause (d):

(a)      in sub-clause (iii), the word “and” shall be omitted; and

(b)      in sub-clause (iv), for the full stop at the end, a semicolon shall be substituted, and thereafter, the following sub-clauses (v) and (vi) shall be added:

“(v)     information as may be prescribed about its members, beneficial owners, running affairs of the society; an

(vi)     information as may be prescribed regarding its employees and officers, and the reasons, if any, for running the affairs by them, in case the society is run by non-members i.e. officers or employees.”.

6. Insertion of sections 20-A and 20-B in Act VII of 1925.–In the Act, after section 20, the following sections 20-A and 20-B shall be inserted:

“20-A. Provision of information–(1) The Secretary of a society shall provide information to the Registrar annually or as and when required by Registrar, in such manner and in such form as may be prescribed.

(2)      The Secretary of a society shall provide any information, including but not limited to information regarding beneficial owners, members, nominees of the members, officers, employees and Managing Committee of the Society, in the prescribed manner to the relevant officer or authority under the Anti-Money Laundering Act, 2010 (V II of 2010).

20-B. Provision of information by the Registrar:–The Registrar shall provide information to any officer or the authority mentioned under section 20-A upon a request in writing, regarding the members and beneficial owners, officers/employees of the society, assets or shares held by the members in the society, their addresses, nominees of the members, properties and financial condition of the society.”

7. Amendment of section 21 of Act VII of 1925–In the Act, in section 21:

(a)      in clause (c), the word “and” shall be omitted, and for clause (d), the following shall be substituted:

“(d)     an up to date register of its members and nominees of the members,”; and

(b)      after clause (d) as substituted, the following clauses (e) and (f) shall be added:

“(e)     an up to date register to its beneficial owners, and

(f)       such other information as may from time to time be required by the Registrar.”

8. Insertion of section 21-A in Act VII of 1925.–In the Act, after section 21, the following section 21-A shall be inserted:

“21-A. Updating of records of societies.–(1) The Registrar shall keep such record of the beneficial owners, members, nominees of the members, directors, managing committee and employees of the societies as may be prescribed.

(2) Within three months of the commencement of the Punjab Cooperative Societies (Amendment) Act, 2020, every society shall provide the information about its beneficial owners to the Registrar.

(3) If a society fails to provide the information as required under sub-section (2), the Registrar may proceed under section 4-A of this Act.

(4) For the purposes of ensuring the requirements set out in sub-sections

(1), (2) and (3), the Registrar shall exercise such responsibilities and powers as may be prescribed.”.

9 Insertion of section 34-A in Act VII of 1925–In the Act, after section 34, the following section 34-A shall be inserted:

“34-A. Prohibition on issuance of bearer shares, warrants.–No society shall allot, issue, sell, transfer or assign any bearer shares, bearer share warrants or any other equity or debt security of a bearer nature, by whatever name called, and any allotment, issue, sale, transfer, assignment or other disposition of any bearer shares or bearer share warrants or any other equity or debt security of a bearer nature, shall be void.”.

10. Insertion of section 49-A of Act VII of 1925–In the Act, after section 49, the following section 49-A shall be inserted:

“49-A. Records of cancelled societies.–(1) The Registrar shall keep all the records of a society along with proceeding of liquidation completed whose registration has been cancelled for a period not less than five years.

(2) The Secretary of a society whose registration has been cancelled shall also keep the record of the society for a period not less than five years:

“Provided that the society shall dispose of its record after five years after the approval of the Registrar Cooperative Societies.”

11. Amendment in section 60 of Act VII of 1925–In the Act, in section 60 in clause (h) for the full stop at the end, the expression “; or” shall be substituted, and thereafter, the following clause (i) shall be added:

“(i)     Failure to provide information- a member, employee, director, officer or secretary of the society does not furnish information under clauses (viii), (ix), (x) and (xi) of section 5, section 20-A, 21-A, or does not comply with sub-section (1) of section 49-A or section 34-A of this Act.”

12. Amendment of section 61 of Act VII of 1925.–In the Act, in section 61:

(a)      in sub-section (1), the expression “society,” shall be omitted; and

(b)      after sub-section (1), the following sub-section (1a) shall be inserted

“(1a)   Every society guilty of an offence under this Act for which no penalty is expressly provided shall be liable to a penalty not exceeding rupees ten million.”.

13. Insertion of section 61-A in Act VII of 1925–In the Act, after section 61, the following section 61-A shall be inserted:

61-A penalty for offences under clause (i) of section 60.–Any member, employee, director, officer or secretary of the society found guilty under clause (i) of section 60 shall be punishable with imprisonment for a term which may extend to five years or with fine up to rupees two million or with both, and if any society is found guilty under clause (i) of section 60, it shall be liable to a fine up to a maximum of one fourth of its working capital.”.

14. Insertion of section 70-B in Act VII of 1925.–In the Act, after section 70-A, the following section 70-B shall be inserted:

 

“70-B Assistance by law enforcement agencies–All law enforcement agencies including police shall be bound to provide necessary assistance to Registrar or his authorized officers to execute the orders passed under this Act.”.

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