Chapter 1
Chapter 2
Chapter 3
Chapter 4
Chapter 5
Chapter 6
Chapter 7
Chapter 8
Chapter 9
Chapter 10
Chapter 11
Chapter 12
Properties and Funds of Cooperative Societies

79. Distribution of Profits.

1. No dividend shall be declared or paid except out of net profits left after making the contribution towards reserve fund required to be made under the provisions of section 46 and sub rule (3). In no co-operative society, the dividend shall exceed 18 percent per annum on paid-up share capital. Dividend shall be payable at such rate not exceeding this limit to the registered share holders, as may be approved by the general body and not otherwise. Share holders/members will have no right to the dividend unless declared and approved by general body. The dividend shall be paid to all member within three months of the approval by the general body. No dividend shall be paid by the co-operative society while any claim due from the co-operative society to a depositor or lender remains unsatisfied. (Amended on 8.8.97)

2. Notwithstanding anything contained in the rules and the bye-laws of the society, the Registrar may by a general or special order direct that a co-operative society shall not pay dividend or shall pay dividend at a reduced rate.

3. In the case of an agricultural credit co-operative society. 10 percent of net profits after contribution to the reserve fund under the proviso to section 46, shall be credited to Agricultural Stabilization Fund to be utilised for enabling the borrowers to make postponement of repayment of loans on account of famine, drought, or such other unforeseen causes. Any subsidy for special bad debt reserve given by the Government shall also be credited to this Stabilisation Fund.

4. Any distribution of the Remaining balance of profits under section 46 and after the distribution of dividend under sub-rule (1) shall be in accordance with the bye-laws of the society regarding such distribution. It shall be in proportion to the wages earned by each member in the cases of a producers' society, and to the amount of goods purchased by each member, or where it is so provided in the bye-law by each member or customer in the case of consumers society. It shall also be proportion to the amount of rent paid by each member in the case of a Housing Society, may be in proportion to the goods obtained or sold through the society by each member, or to the loans borrowed from and the deposits made with the society by each member.

5. Any cooperative society that pays dividend may give incentive/gift to its members, with the approval of the general body, not exceeding five per cent of its net profit subject to a maximum of two hundred rupees per member.

Provided that directions of the Reserve Bank of India in this behalf shall govern primary urban cooperative banks.

Provided further that the house building and group housing societies shall not be eligible to givp incentive/gift. (Amended On 8.8.97).

80. Contribution towards co-operative education fund

Every co-operative society shall credit a sum calculated at two percent of its net profits subject to a maximum of Rs. 10,000 every year for contribution to the Co-operative Education Fund to be administered by the Registrar. This Fund shall be kept with State Bank of India and the Lieutenant Governor shall nominate a committee with Registrar as its Chairman, one officer from the office of the registrar, six representative of Contributing societies, two representatives of Delhi State Coop. Union and Principal of the Co-operative Training Institute which shall advise the Registrar for the Administration of Co-operative Education Fund. And such amount payable by the Society shall be a charge on the funds of the society. (Amended on 13.10.92)

80.A. Contribution towards national funds

Subject to the provisions of section 47, a cooperative society may with the sanction of the Registrar contribute a sum out of its net profits in the National defence Funds, other funds of National importance or welfare schemes of the Government. (Amended on 8.8.87)

81. Investment of Fund.

In addition to the manner specified in section 49, a co-operative society may invest or deposit its funds:-

(a) with the Financing Bank.

(b) with the Nationalized Commercial Banks.

(c) with the State Bank of India.

(d) in any other manner permitted by the Registrar.

82. Use of reserve fund In the business of a society.

A co-operative society may, subject to the approval of the general body and to such condtions as the general body may impose, use in its business the reserve fund: -

(i) upto one fourth of its reserve fund when the owned capital is less than the borrowed capital;

(ii) upto one half of its reserve fund when the owned capital is equal to or exceeds the borrowed capital and

(iii) the entire reserve fund when there is no borrowed capital;

Provided that in the case of clauses (i) and (ii), the balance fund shall be invested in an approved mode of investment as per the provisions of the Act, the rules and the bye-laws of the society. (Amended on 8.8.87).

83. Write off Debts and other sum due.

No co-operative society shall write off in whole or in part any debt or ot~r~ums due to it without the previous sanction of the Registrar.

Provided that the committee of the society shall be competent to write off the bad' debts from the bad debts funds created out of profits subject to the limit of ten per cent or ten thousand rupees per annum when ever is more. (Amended on 8.8.97)

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Last Updated : 23 Mar,2014