Section 43 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 43 lists the grounds on which a person cannot be chosen as, or remain, a member of the board of a multi-State co-operative society. It also bars a person for five years when the board fails in certain basic duties, and, since 2023, for five years after a board has been superseded. This article states the section as per the Ministry of Cooperation copy of the Act read with the Multi-State Co-operative Societies (Amendment) Act, 2023.
Section 43(1) names grounds of disqualification in clauses (a) to (n), from insolvency and conviction to three missed board meetings in a row, and the 2023 Act adds clause (o). New sub-section (1A) bars a former director of a superseded board from the board of another multi-State co-operative society or co-operative bank for five years from the supersession, but only after a hearing by the Central Registrar and a finding of responsibility. Sub-section (2) bars a person for five years if the board fails to hold elections, to call the annual general meeting, to prepare financial statements, to make the funds contributions, to file the annual return or to get the audit done on time.
Who the section applies to
Section 43(1) applies to "any member of any multi-State cooperative society or nominee of a member, society or a national cooperative society" (as printed in the principal copy). The disqualification covers being "chosen as, or for being" a member of the board of that society, of a national co-operative society, or of "any other cooperative society to which the multi-State cooperatives society is affiliated". So it is both an entry test and a continuing test: a director who falls into a listed ground is no longer eligible to remain.
The principal Act came into force by notification, date not in the source. The 2023 Amendment Act came into force on 3 August 2023 by notification S.O. 3493(E). A society facing a dispute over a director's eligibility can start with our legal dispute resolution team. For the wider setting of board composition, see our note on board of directors of a multi-State co-operative society and for how a society is run overall, our guide to the Act.
The grounds in section 43(1)
A member is not eligible if he:
| Clause | Ground |
|---|---|
| (a) | has been adjudged by a competent court to be insolvent, or has been a director of an insolvent company, or is of unsound mind |
| (b) | is concerned or participates in the profits of any contract with the society |
| (c) | has been convicted for an offence involving moral turpitude |
| (d) | holds any office or place of profit under the society |
| (e) | has been a member of the society for less than twelve months immediately preceding the date of election or appointment |
| (f) | has interest in any business of the kind carried on by the society of which he is a member |
| (g) | has taken a loan or goods on credit, or is otherwise indebted, and after a notice of default has defaulted |
| (h) | is a person against whom any amount due under a decree, decision or order is pending recovery under this Act or under any other Act specified in the Third Schedule |
| (i) | is retained or employed as a legal practitioner for or against the society, or for or against another multi-State co-operative society that is a member of it |
| (j) | has been convicted for any offence under this Act |
| (k) | is disqualified for being a member under section 29 |
| (l) | has been expelled as a member under section 30 |
| (m) | absents himself from three consecutive board meetings and the board has not condoned the absence |
| (n) | absents himself from three consecutive general body meetings and the members in general body have not condoned the absence |
| (o) | has been disqualified under sub-section (7) of section 41 (inserted in 2023) |
Some of these carry detail worth reading closely.
Clause (a) after the amendment. The 2023 Act inserts, after the words "to be insolvent", the words "or has been a director of an insolvent company". Applied to the principal text, the clause reads: "has been adjudged by a competent court to be insolvent or has been a director of an insolvent company or of unsound mind". The two texts fit together mechanically, but the result is awkward: the Act does not say whether "adjudged by a competent court" also governs the director of an insolvent company, and it does not define "insolvent company" in this section. We quote and do not guess.
Clause (d) and its proviso. The Chief Executive, or "such full time employee of the society as may be notified by the Central Government from time to time", or a person elected by the employees to represent them on the board, is eligible despite holding office under the society. In the print the proviso sits directly under clause (d), before clause (e); it is not a proviso to a later clause. Section 42 on employees on the board is covered in our note on employees in management and government nominees on the board.
Clause (g) and loan default. The default must follow "a notice of default" issued by the society. Under sub-clause (i) the borrower must repay by the fixed date, or by an extended date that "in no case shall exceed six months". Under sub-clause (ii) for instalments, the amount in default or any part of it must have remained unpaid on the expiry of six months from the date of default. A proviso adds that a board member who ceased to hold office under this clause is not eligible, for one year from the date he ceased to hold office, for re-election to the board of that society or to the board of any other multi-State co-operative society.
Clause (i) and the legal practitioner. An Explanation says "legal practitioner" has the same meaning as in clause (i) of sub-section (1) of section 2 of the Advocates Act, 1961 (25 of 1961). Check the current law for the corresponding provision.
Clause (h) and the Third Schedule. The 2023 Act adds the words "or under any other Act specified in the Third Schedule". The Third Schedule, inserted in 2023, lists seventeen Acts; they are set out in our note on the Second and Third Schedules. The section refers to the Third Schedule as "See clause (h) of sub-section (1) of section 43".
Sub-section (1A): the five-year bar after supersession
Sub-section (1A) is new. It says that a member who has been a director of the board of any multi-State co-operative society or co-operative bank, where such board has been superseded, "shall not be eligible to be elected as director of the board of another multi-State co-operative society or co-operative bank for a period of five years, from the date of such supersession".
The proviso protects the director in two ways. First, "no member shall be declared ineligible under this sub-section unless an opportunity of being heard has been given to such member by the Central Registrar". Second, the declaration "shall be made only after ascertaining that the member concerned has been responsible by acts of omission or commission leading to such supersession". A director who was not responsible cannot be barred merely because the board was superseded. Supersession itself is dealt with in section 123; see our note on supersession of the board.
The bar is stated in terms of "another" society or bank. Whether it also stops re-election to the superseded society itself is a point the text does not address.
Sub-section (2): five years if the board fails
Sub-section (2) reads in the principal copy: "A person shall not be eligible for being elected as member of board of a multi-State cooperative society for a period of five years if the board of such multi-State cooperative society fails-". After 2023 the failures are:
| Clause | Failure |
|---|---|
| (a) | to provide information, documents, personnel, funds or expenses or any other assistance as required by the Co-operative Election Authority for conducting elections under this Act in such manner as may be prescribed |
| (b) | to call the annual general meeting under section 39 |
| (c) | to prepare the financial statement and present it in the annual general meeting |
| (d) | to make contribution to the co-operative education fund referred to in clause (b) of sub-section (1) of section 63 or the Co-operative Rehabilitation, Reconstruction and Development Fund established under section 63A |
| (e) | to file the annual return specified in section 120 within the time specified |
| (f) | to get the audit of the society conducted within six months of the close of the financial year to which such account relate |
A proviso, added in 2023, says that before taking any action under this sub-section, "he shall be given an opportunity of being heard by the Central Registrar". The word "he" is printed without a stated antecedent in the amending clause; the natural reading is the Central Registrar, but the gazette does not say so in terms.
What the 2023 Amendment Act changed
| Provision | Before | After |
|---|---|---|
| s.43(1)(a) | insolvent or of unsound mind | also "has been a director of an insolvent company" |
| s.43(1)(h) | amount due under this Act pending recovery | also under "any other Act specified in the Third Schedule" |
| s.43(1)(o) | not present | disqualified under sub-section (7) of section 41 |
| s.43(1A) | not present | five-year bar after supersession, with hearing and finding of responsibility |
| s.43(2)(a) | failure to conduct elections under section 45 | failure to assist the Co-operative Election Authority |
| s.43(2)(d), (e), (f) | not present | fund contributions, annual return, audit within six months |
| s.43(2) proviso | not present | hearing by the Central Registrar |
The first clause of sub-section (2) was changed because elections are now conducted by the Authority under the substituted section 45 and sections 45A to 45L. Rules on the manner of assistance are left to be prescribed. Amendment rules were notified on 4 August 2023 (G.S.R. 591(E)); the consolidated Rules should be checked.
A practical example
Hari Om Weavers Multi-State Co-operative Society has a director, Mr. Rane, who is also a partner in a firm supplying yarn to the society and shares in the profit of that contract, so clause (b) applies to him. A second director, Ms. Kulkarni, missed three board meetings in a row and the board did not condone it, so clause (m) applies. Separately, if the society's audit is completed eight months after the year closes, sub-section (2)(f) can make a person ineligible for five years, but only after the Central Registrar has heard him.
Need help with a board disqualification matter?
If a director has been told he is ineligible, or a society wants to check its board before an election, we can review the facts against the text of section 43 and help prepare for the hearing before the Central Registrar. Start with our legal dispute resolution page.
Key takeaways
- Section 43(1) lists the grounds of disqualification; the 2023 Act adds a director of an insolvent company, the Third Schedule Acts, and clause (o).
- New sub-section (1A) bars a former director of a superseded board for five years, only after a hearing and a finding of responsibility.
- Sub-section (2) bars a person for five years when the board fails in listed duties, and now needs a hearing first.
- A loan default counts only after a notice of default and after the six-month periods in clause (g).
- Rules and notifications on detail are outside the sources; check them separately.
Read next
- Board of directors of a multi-State co-operative society
- Employees in management and government nominees on the board
- Supersession of the board under section 123
- Multi-State Co-operative Societies Act, 2002: complete guide
Disclaimer: Based on the Ministry of Cooperation copy of the Multi-State Co-operative Societies Act, 2002 read with the Multi-State Co-operative Societies (Amendment) Act, 2023 (in force from 3 August 2023), as consulted on 2 October 2026. The Multi-State Co-operative Societies Rules, 2002 as amended, later notifications and later amendments are not covered and should be checked. This article is general information, not legal advice; check the official text before acting.