Part – v
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Insertion of section 78A in Maharashtra XXIV of 1961.
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Sec. 46.
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After section
78 of the principal Act, the following section shall be inserted, namely:-
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Power of
supersession of committee or removal of member thereof - 78A
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(1)
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If in the
opinion of the Registrar, the committee or any member of such committee has
committed any act, which is prejudicial to the interest of the society or its
members or if the State Co-operative Election Authority has failed to conduct
the elections in accordance with the provisions of this Act or where
situation has arisen in which the committee or any member of such committee
refuses or has ceased to discharge its or his functions and the business of
the society has, or is likely to, come to a stand-still, or if serious
financial irregularities or frauds have been identified or if there are
judicial directives to this effect or, if there is a perpetual lack of quorum
or, where in the opinion of the Registrar the grounds mentioned in
sub-section (1) of section 78 are not remedied or not complied with, or where
any member of such committee stands disqualified by or under this Act for
being a member of the committee, the Registrar may, after giving the
committee or the member, as the case may be, an opportunity of stating its or
his objections in writing as provided under sub-section (1) of section 78 and
after giving a reasonable opportunity of being heard, and after consultation
with the federal society to which the society is affiliated comes to a
conclusion that the charges mentioned in the notice are proved, and the
administration of the society cannot be carried out in accordance with the
provisions of this Act, rules and by-laws, he may by order stating reasons
therefor,-
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(a)
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(i) supersede
the committee; and
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(ii) appoint a
committee consisting of three or more members of the society otherwise than
the members of the committee so superseded, in its place, or appoint an
administrator or committee of administrators who need not be the members of
the society, to manage the affairs of society for a period not exceeding six
months:
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Provided that,
the Registrar shall have the power to change the committee or any member
thereof or administrator or administrators appointed at his discretion even
before the expiry of the period specified in the order made under this
sub-section :
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Provided
further that, such federal society shall communicate its opinion to the
Registrar within forty-five days, from the date of receipt of communication,
failing which it shall be presumed that such federal society has no objection
to the order of supersession or removed of a member and the Registrar shall
be at liberty to proceed further to take action accordingly :
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Provided also
that, in case of a society carrying on the business of banking, the
provisions of the Banking Regulation Act, 1949, shall also apply and the
committee shall not be superseded for a period exceeding one year :
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Provided also
that, nothing in this sub-section shall apply to a society, where there is no
Government shareholding or loan or financial assistance in terms of any cash
or kind or any guarantee by the Government ;
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(b)
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remove the
member :
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Provided that,
the member who has been so removed shall not be eligible to be re-elected,
re-co-opted or re-nominated as a member of any committee of any society till
the expiry of period of next one term of the committee from the date on which
he has been so removed :
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Provided
further that, in case of a society carrying on the business of banking, the
provisions of the Banking Regulation Act, 1949, shall also apply.
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(2)
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The provisions
of sub-sections (3), (4), (5) and (6) of section 78 shall apply mutatis
mutandis, in relation to supersession or removal under this section."
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Amendment of section 79 of Maharashtra XXIV of 1961.
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Sec. 47.
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In section 79
of the principal Act,-
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(a)
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in sub-section
(1), after the words “books of accounts” the words “in such form, including
electronic or any other form, as may be prescribed” shall be inserted ;
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(b)
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after
sub-section (1), the following sub-sections shall be inserted, namely:-
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“(1A) Every
society shall file returns within six months of the close of every financial
year to which such accounts relate, to the Registrar or to the person
authorised by him. The returns shall contain the following matters, namely :-
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(a) annual
report of its activities;
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(b) its
audited statement of accounts;
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(c) plans for
disposal of surplus funds as approved by the general body of the society;
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(d) list of amendments to the by-laws of the
society, if any;
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(e)
declaration regarding date of holding of its general body meeting and conduct
of elections when due;
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(f) any other
information required by the Registrar in pursuance of any of the provisions
of this Act.
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(1B) Every
society shall also file a return regarding the name of the auditor or
auditing firm from a panel approved by a State Government in this behalf,
appointed in the general body meeting together with his written consent,
within a period of one month from the date of annual general body meeting.”;
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(c)
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in sub-section
(2),-
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(i) after the
words “take any action” the words “including filing of returns” shall be
inserted;
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(ii) for the
words " foregoing sub-section" the words "foregoing
sub-sections" shall be substituted;
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(d)
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in sub-section
(3), for the words “twenty-five rupees” the words “one hundred rupees” shall
be substituted;
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(e)
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after
sub-section (3), the following sub-section shall be added, namely:-
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“(4) The
Registrar or the authorised person on his behalf shall scrutinise the returns
and information so received and take further necessary action, if required.”;
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(f)
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for the
marginal note, the following marginal note shall be substituted, namely:-
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“Society’s
obligation to file returns and statements and Registrar’s power to enforce
performance of such obligations.”
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Amendment of section 79A of Maharashtra XXIV of 1961.
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Sec. 48.
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In section 79A
of the principal Act, in sub-section (3),-
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(a)
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in clause (a),
for the words “remove the member from the committee and appoint any other
person as a member of the committee for the remainder of the term of his
office and declare him to be disqualified to be such member” the following
shall be substituted, namely:-
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“declare him
to be disqualified to be or to continue to be a member of the committee of
any society,”;
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(b)
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in clause
(b),-
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(i) the words
“remove the members, appoint other persons as members and” shall be deleted;
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(ii) after the
first proviso, the following proviso shall be added, namely:-
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“Provided
further that, such federal society shall communicate its opinion to the
Registrar within a period of forty-five days from the date of receipt of
communication, failing which it shall be presumed that such federal society
has no objection to take action under this section and the Registrar shall be
at liberty to proceed further to take action accordingly.”
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Deletion of section 79B of Maharashtra XXIV of 1961.
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Sec. 49.
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Section 79B of
the principal Act shall be deleted.
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Amendment of section 81 of Maharashtra XXIV of 1961.
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Sec. 50.
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In section 81
of the principal Act,-
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(a)
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for
sub-section (1), the following sub-section shall be substituted, namely:-
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“(1) (a) The
society shall cause to be audited its accounts at least once in each
financial year and also cause it to be completed within a period of four
months from the close of financial year to which such accounts relate by
auditor or auditing firm from a panel prepared by the Registrar and approved
by the State Government or an authority authorised by it in this behalf,
possessing required qualifications and experience as may be prescribed, to be
eligible for auditing accounts of societies, appointed by the general body of
a society, as provided in sub-section (2A) of section 75 and shall lay such
audit report before the annual general body meeting. In case of apex society,
the audit report shall also be laid before both Houses of the State
Legislature, in such manner, as may be prescribed:
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Provided that,
if the Registrar is satisfied that the society has failed to intimate and
file the return as provided by sub-section (2A) of section 75 and sub-section
(1B) of section 79, by order, for the reasons to be recorded in writing, he
may cause its accounts to be audited, by an auditor from the panel of the
auditors approved by the State Government or an authority authorised by it in
this behalf :
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Provided
further that, no auditor shall accept audit of more than twenty societies for
audit in a financial year excluding societies having paid up share capital of
less than rupees one lakh :
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Provided also
that, the Registrar shall maintain a panel of auditors and auditing firms as
approved by the State Government or an authority authorised by it in this
behalf.
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(b)
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The manner of
preparation, declaration and maintenance of the panel of auditors and auditing
firms by the Registrar shall be such as may be prescribed.
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(c)
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The committee
of every society shall ensure that the annual financial statements like the
receipts and payments or income and expenditure, profit and loss and the
balance-sheet along with such schedules and other statements are audited,
within four months of the closure of the financial year.
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(d)
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The Registrar
shall submit the audit report of every apex co-operative society to the State
Government annually for being laid before both the Houses of the State
Legislature in the manner prescribed.
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(e)
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The auditor's
report shall have,-
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(i) all
particulars of the defects or the irregularities observed in audit and in
case of financial irregularities and misappropriation or embezzlement of
funds or fraud, the auditor or the auditing firm shall investigate and report
the modus operandi, the entrustment and amount involved ;
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(ii)
accounting irregularities and their implications on the financial statements
to be indicated in detail in the report with the corresponding effects on the
profit and loss;
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(iii) the
functioning of the committee and sub-committees of the societies be checked
and if any irregularities or violations are observed or reported, duly fixing
the responsibilities for such irregularities or violations.
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(f)
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The
remuneration of the auditor or auditing firm of a society shall be borne by
the society and shall be at such rate as may be prescribed.
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(g)
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The Registrar
shall maintain the list of society’s district wise, the list of working
societies, the list of societies whose accounts are audited, the list of
societies whose accounts are not audited within the prescribed time and
reasons therefor. The Registrar shall co-ordinate with the societies and the
auditors or auditing firms and ensures the completion of audit of accounts of
all the co-operative societies in time every year.
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Explanation
I.- For the purposes of this section, the expression, “possessing required
qualifications” for being included in the panel duly approved by the State
Government or an authority authorised by the State Government in this behalf,
from time to time, shall mean and include-
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(a)
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a person who
is a Chartered Accountant within the meaning of the Chartered Accountants
Act, 1949, who has a fair knowledge of the functioning of the societies and
an experience of at least one year in auditing of societies with a working
knowledge of Marathi language;
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(b)
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an auditing
firm which is a firm of more than one Chartered Accountants within the
meaning of the Chartered Accountants Act, 1949, who have a fair knowledge of
the functioning of the societies with a working knowledge of Marathi
language;
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(c)
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a certified
auditor, who is a person holding a Degree from a recognised University and
also has completed a Government Diploma in Co-operation and Accountancy and
who has a fair knowledge of the functioning of the societies and an
experience of at least three years in auditing of societies with a working
knowledge of Marathi language;
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(d)
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a Government
Auditor, who is an employee of the Co-operation Department of the State,
possessing the Higher Diploma in Co-operative Management or the Diploma in
Co-operative Audit or Government Diploma in Co-operation and Accountancy with
a working knowledge of Marathi language and who has completed the period of
probation successfully;
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Explanation-II.-
The terms and conditions for inclusion and retention of name as an auditor or
auditing firm in the panel of auditors shall be subject to the terms and conditions,
as may be prescribed.’’;
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(b) in
sub-section (2), after the words, brackets and figure “subsection (1) shall”
the following shall be inserted, namely:-
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“be carried
out as per Auditing Standards notified by the State Government from time to
time and shall also”;
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(c) in
sub-section (2A), after the words “public interest” the words “or in the
interest of the society” shall be inserted;
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(d) in
sub-section (2B), for the words “Registrar shall cause such audit of such
society or class of societies to be conducted” the words “Society shall cause
its audit to be conducted” shall be substituted;
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(e)
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in sub-section
(3), -
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(i) in clause
(a), for the words “Registrar or person authorised” the words “The Auditor”
shall be substituted;
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(ii) for
clause (b), the following clause shall be substituted, namely :-
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“(b) If the
Registrar has reason to believe that there exists an element of fraud,
misapplication of funds, manipulation of the accounts and the accounts of the
society are likely to be tampered with, thereby causing loss to the society,
he shall be competent to depute Flying Squad to a society or societies for
examination of books, records, accounts, and such other papers and for
verification of cash balance. The report of the Flying Squad shall be treated
as sufficient evidence for further action, if any. ” ;
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(iii) for
clause (c), the following clause shall be substituted, namely:-
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“(c) If it is
brought to the notice of the Registrar that the audit report submitted by the
auditor does not disclose the true and correct picture of the accounts, the
Registrar or the authorised person may carry out or cause to be carried out a
test audit of accounts of such society. The test audit shall include the
examination of such items as may be prescribed and specified by the Registrar
in such order.”
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(f)
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in sub-section
(5B),-
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(i) for the
words “an audit memorandum duly signed by him”, the following shall be
substituted, namely:-
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“his audit
report within a period of one month from its completion and in any case
before issuance of notice of the annual general body meeting,”;
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(ii) the
following provisos shall be added, namely:-
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“Provided
that, where the auditor has come to a conclusion in his audit report that any
person is guilty of any offence relating to the accounts or any other
offences, he shall file a specific report to the Registrar within a period of
fifteen days from the date of submission of his audit report. The auditor
concerned shall, after obtaining written permission of the Registrar, file a
First Information Report of the offence. The auditor, who fails to file First
Information Report, shall be liable for disqualification and his name shall
be liable to be removed from the panel of auditors and he shall also be
liable to any other action as the Registrar may think fit:
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Provided
further that, when it is brought to the notice of the Registrar that, the
auditor has failed to initiate action as specified above, the Registrar shall
cause a First Information Report to be filed by a person authorised by him in
that behalf:
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Provided also
that, on conclusion of his audit, if the auditor finds that there are
apparent instances of financial irregularities resulting into losses to the
society caused by any member of the committee or officers of the society or
by any other person, then he shall prepare a Special Report and submit the
same to the Registrar along with his audit report. Failure to file such
Special Report, would amount to negligence in the duties of the auditor and
he shall be liable for disqualification for appointment as an auditor or any
other action, as the Registrar may think fit.”
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