Section 38 of the Co-operative Societies Act, 1912 - Recovery of Costs

Section 38 provides the statutory mechanism for recovering a sum awarded as costs under Section 37 of the Co-operative Societies Act, 1912. It connects an award of inquiry or inspection costs with a specific recovery process before the Magistrate having territorial jurisdiction.

What does Section 38 provide?

Section 38 - Recovery of costs.

Any sum awarded by way of costs under section 37 may be recovered, on application to a Magistrate having jurisdiction 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.

Meaning and scope of Section 38

Section 38 is a recovery provision. It applies when costs have first been awarded under Section 37 of the Co-operative Societies Act, 1912. Section 37 permits the Registrar, after an inquiry under Section 35 or an inspection under Section 36, to apportion the relevant costs among the persons specified in that provision.

Once a sum is awarded by way of costs under Section 37, Section 38 permits recovery through an application to the Magistrate having jurisdiction where the person liable actually and voluntarily resides or carries on business. The statutory mode stated in Section 38 is distress and sale of movable property belonging to that person and situated within the Magistrate's jurisdiction.

Essential requirements for recovery

There must be a sum awarded as costs under Section 37.
An application for recovery is made to the Magistrate having the jurisdiction described in Section 38.
Jurisdiction is linked to the place where the person from whom the money is claimable actually and voluntarily resides or carries on business.
The provision authorizes recovery by distress and sale of movable property belonging to that person within the Magistrate's territorial jurisdiction.

Connection with Sections 35, 36 and 37

The recovery mechanism should be read with the preceding provisions. Section 35 concerns inquiry by the Registrar. Section 36 concerns inspection of the books of an indebted society. Section 37 deals with apportionment of the costs of such inquiry or inspection. Section 38 then supplies the method for recovery of the costs awarded under Section 37.

Practical legal effect

Section 38 does not itself create an independent award of costs. Its operation depends upon an existing award under Section 37. The recovery application must also be presented before the Magistrate who satisfies the territorial connection specified by the section.

Applicability note: Co-operative societies are also governed by State and Union Territory legislation. The Co-operative Societies Act, 1912 has been repealed or replaced in its application in various territories. Before relying on Section 38 in a current matter, verify the law presently applicable to the society and the relevant State or Union Territory.

Official text of the Act

The authoritative Central Act can be checked on the Government of India's India Code portal: The Co-operative Societies Act, 1912 - India Code PDF.

Article reviewed for statutory accuracy on 21 September 2026.