Section 27 of the Co-operative Societies Act, 1912: Exemption from Compulsory Registration
Section 27 creates a specific exemption from the compulsory-registration requirements in Section 17(1)(b) and (c) of the Registration Act, 1908 for specified instruments connected with shares and debentures of a registered co-operative society.
Text of Section 27
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 Indian Registration Act, 1908 (16 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.
What Section 27 means
The provision prevents specified instruments concerning a registered society's shares or debentures from becoming compulsorily registrable merely because the society owns immovable property or because the instrument falls within the categories referred to in Section 17(1)(b) or (c) of the Registration Act, 1908.
| Instrument | Effect of Section 27 |
|---|---|
| Instrument relating to shares in a registered society | The stated registration exemption applies even where the society's assets include immovable property. |
| Qualifying debenture issued by the society | The exemption applies subject to the limits stated in clause (2), particularly where rights in immovable property are concerned. |
| Endorsement or transfer of a society debenture | The instrument is included in the exemption created by clause (3). |
Connection with Section 17 of the Registration Act, 1908
Section 17 of the Registration Act, 1908 identifies documents for which registration is compulsory. Section 17(1)(b) addresses certain non-testamentary instruments creating, declaring, assigning, limiting or extinguishing rights, title or interest in immovable property, while Section 17(1)(c) addresses certain non-testamentary instruments acknowledging receipt or payment of consideration connected with such rights or interests.
Section 27 of the Co-operative Societies Act operates as a targeted statutory exception to those two clauses for the instruments expressly described in Section 27. It does not state a general exemption for every document executed by a co-operative society.
Clause-by-clause explanation
1. Instruments relating to shares
An instrument relating to shares in a registered society receives the exemption even if the society owns immovable property. The distinction is important because a member's share-related instrument is not treated, merely for that reason, as an instrument requiring registration under the provisions displaced by Section 27.
2. Debentures issued by a registered society
Clause (2) covers a debenture that does not itself create, declare, assign, limit or extinguish a right, title or interest in immovable property, subject to the statutory qualification concerning security afforded by a registered instrument under which the society has transferred or mortgaged property or an interest in property to trustees for debenture holders.
3. Endorsement or transfer of debentures
The exemption also expressly covers an endorsement upon, or transfer of, a debenture issued by the registered society.
Practical scope
Whether a particular document falls within Section 27 depends on its legal character and operative terms. Where a document independently creates or transfers rights in immovable property beyond the statutory exemption, the Registration Act and any applicable State amendments should be examined before concluding that registration is unnecessary.
Official legal resources
For authoritative statutory text, see the Co-operative Societies Act, 1912 on India Code and the Registration Act, 1908 on India Code.
This page provides general statutory information. State-specific co-operative and registration laws, amendments and notifications may affect a particular transaction.