Section 39 of the Co-operative Societies Act, 1912 - Dissolution
Section 39 of the Co-operative Societies Act, 1912 deals with the dissolution of a registered co-operative society. It specifies the circumstances in which the Registrar may cancel the registration of a society, the right of a member to appeal, when the cancellation becomes effective, and the authority that hears an appeal.
Section 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-fourths 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 State Government:
Provided that the State Government may, by notification in the Official Gazette, direct that appeals shall lie to such Revenue authority as may be specified in the notification.
Meaning and Scope of Section 39
Section 39 creates the statutory mechanism for dissolution of a registered society through cancellation of its registration by the Registrar. The power is not expressed as an unrestricted power. Sub-section (1) identifies the circumstances upon which the Registrar may form the opinion that a society ought to be dissolved.
The provision also protects the right of a member to challenge the cancellation order. A member has two months from the date of the order under Section 39(1) to file an appeal.
When Can the Registrar Order Dissolution?
Under Section 39(1), the Registrar may cancel the registration of a registered society if the Registrar is of the opinion that the society ought to be dissolved after any of the statutory circumstances specified in the section.
- An inquiry has been held under Section 35.
- An inspection has been made under Section 36.
- An application for dissolution has been made by three-fourths of the members of the registered society.
The statutory language therefore connects the power of cancellation with an inquiry, an inspection, or an application supported by the prescribed proportion of members.
Right of Appeal Against Cancellation
Section 39(2) provides that any member of the society may appeal against an order made under Section 39(1). The appeal must be made within two months from the date of the cancellation order.
Under Section 39(5), the appeal lies to the State Government. The proviso permits the State Government, by notification in the Official Gazette, to direct that such appeals shall instead lie to the Revenue authority specified in the notification.
When Does the Cancellation Order Take Effect?
If no appeal is presented within the statutory period of two months, Section 39(3) provides that the cancellation order takes effect on expiry of that period.
If an appeal is filed within two months, Section 39(4) provides that the cancellation order does not take effect until it is confirmed by the appellate authority. This makes the timely filing of an appeal significant to the operation of the cancellation order.
Meaning of Important Terms
Registrar
Section 2 of the Act defines "Registrar" as a person appointed to perform the duties of a Registrar of Co-operative Societies under the Act.
Member
Under Section 2, "member" includes a person joining in the application for registration of a society and a person admitted to membership after registration in accordance with the by-laws and rules.
Registered Society
A "registered society" means a society registered or deemed to be registered under the Act.
Sections Related to Dissolution
Section 39 should be read with the provisions immediately connected with inquiry, inspection and cancellation. In particular, Section 35 deals with inquiry by the Registrar, while Section 36 deals with inspection. The succeeding Section 40 deals with cancellation of registration of a society.