Section 23 of the Co-operative Societies Act, 1912 - Liability of Past Member

Section 23 of the Co-operative Societies Act, 1912 deals with the continuing liability of a person who has ceased to be a member of a registered co-operative society. The provision fixes both the nature of the relevant debts and the period for which the former member's liability continues.

Act No. 2 of 1912 | Section 23 | Liability of past member

Meaning and Scope of Section 23

Section 23 provides a statutory continuation of liability after a person ceases to be a member of a registered society. Cessation of membership does not, by itself, immediately extinguish liability for qualifying debts of the society.

The provision is limited in two important respects. First, it concerns debts of the registered society as they existed at the time the person ceased to be a member. Second, the statutory continuation of the past member's liability is for two years from the date on which membership ceased.

Key Requirements of Section 23

• The person concerned must be a past member of a registered society.
• The relevant liability relates to debts of the registered society.
• The debts must have existed when the person ceased to be a member.
• The liability continues for two years from the date on which the person ceased to be a member.

What Is a Registered Society?

Under Section 2 of the Co-operative Societies Act, 1912, a "registered society" means a society registered or deemed to be registered under the Act. Section 23 applies to the liability of a past member in relation to the debts of such a registered society.

When Does the Two-Year Period Begin?

The statutory period begins from the date on which the person ceases to be a member. The date of cessation is therefore important when determining the operation of Section 23.

Section 25 of the Act is also relevant in this context because the register or list of members or shares maintained by a registered society is prima facie evidence of specified membership particulars, including the date on which a person ceased to be a member.

Debts Covered by Section 23

The language of Section 23 links the continuing liability to debts that existed at the time the member ceased to be a member. The provision therefore does not state that a former member remains liable under Section 23 for every debt subsequently incurred by the society.

Related Provisions

Section 22 deals with transfer of a member's interest on death. Section 24 deals with liability of the estate of a deceased member, while Section 25 deals with the evidentiary effect of the society's register or list of members or shares.