Settlement of Disputes, Recovery of Dues and Winding Up

Settlement of Disputes

A special feature of co-operative law is that disputes connected with a society are kept out of the ordinary civil courts and settled through a cheaper and speedier co-operative machinery. Under Section 91, any dispute touching the constitution, elections, management or business of a society — for example, a dispute between the society and a member, between members, between the society and its committee or an officer, or between the society and another society — must be referred to the Co-operative Court (in earlier form, to the Registrar for decision or arbitration). Ordinary civil courts have no jurisdiction over such disputes.

The Act sets up Co-operative Courts to hear and decide these disputes, and a Co-operative Appellate Court to hear appeals against their decisions. This keeps the settlement of co-operative disputes within a specialised, informal and less expensive system that members can use easily.

Recovery of Dues

To make sure a society can recover the money owed to it (for example, loans not repaid by members), the Act provides special, quick recovery powers. On the Registrar's certificate (an award or a recovery certificate), the amount due to a society can be recovered as an arrear of land revenue — that is, by the same speedy process the Government uses to collect land revenue, including attachment and sale of the defaulter's property (Section 101 and related provisions). This spares the society the delay and expense of an ordinary civil suit and is one reason co-operative credit societies can lend safely to their members.

Winding Up and Cancellation

A society that can no longer continue may be wound up (dissolved). Under the Act, the Registrar may order the winding up of a society — for example, where its membership has fallen below the minimum, where it has not commenced business or has ceased to work, or where he is satisfied after audit, inquiry or inspection that it ought to be wound up. …