Section 51 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 51 says every multi-State co-operative society must have a Chief Executive, appointed by the board, who is a full-time employee and a member of the board. In 2023 the section gained a new sub-section (1A) that bars people below twenty-one, people who have attained seventy (with an exception), insolvents, certain convicts and anyone who fails a fit and proper test. This article states it as per the Ministry of Cooperation copy of the Act read with the Multi-State Co-operative Societies (Amendment) Act, 2023.
Every multi-State co-operative society must have a Chief Executive, by whatever designation called, appointed by the board and a full-time employee. He is a member of the board and of the Executive Committee. Since 2023, no society may appoint or continue as Chief Executive a person below twenty-one or who has attained seventy (a special resolution by three-fourth of the board can allow above seventy), an undischarged or adjudged insolvent, a person convicted and sentenced for more than six months, or one who does not meet the fit and proper criteria.
Section 51(1) to (3): the original structure
Sub-section (1). "There shall be a Chief Executive, by whatever designation called, of every multi-state cooperative society to be appointed by the board and he shall be a full-time employee of such multi-state cooperative society."
Sub-section (2). "The Chief Executive shall be a member of the board and of the Executive Committee and such other committees or sub-committees as may be constituted under sub-section (1) of section 53." This reflects the position in section 43(1)(d), which excepts the Chief Executive from the bar on holding an office of profit under the society; see our note on disqualifications for being a member of the board.
Sub-section (3). "Where the Central Government or the State Government holds fifty one per cent, or more of he equity share capital or of total shares of the multi-state cooperative society, the salary and allowances payable to and other terms and conditions of service including pension, gratuity and other retirement benefits of the Chief Executive shall be such as may be prescribed." The print says "of he equity share capital", a slip for "of the"; we quote it as printed. The terms are left to rules and none is given here.
If your society is revisiting how its Chief Executive is appointed and recorded, our legal consultation team can help you check the steps against the section.
Section 51(1A): who cannot be Chief Executive (inserted 2023)
The 2023 Amendment Act (Act 11 of 2023, in force from 3 August 2023 by notification S.O. 3493(E)) inserts: "No multi-State co-operative society shall appoint or continue the employment of any person as the Chief Executive who—". The words "appoint or continue" matter: the bar works against a sitting Chief Executive as well as a new one.
| Clause | A person who |
|---|---|
| (a) | is below the age of twenty-one years or has attained the age of seventy years |
| (b) | is an undischarged insolvent or has any time been adjudged as an insolvent |
| (c) | has at any time been convicted by a court of an offence and sentenced for a period of more than six months |
| (d) | does not meet the criteria for "fit and proper", as determined by the Central Registrar in case of multi-State credit societies, or, in case of non-credit multi-State societies, does not meet the criteria as the Central Government may prescribe in terms of education qualifications and relevant experience |
Proviso to clause (a): above seventy
"Provided that any person above the age of seventy years may be appointed by a special resolution passed by three-fourth of the board members, in which case the explanatory statement annexed to the notice for such motion shall indicate the justification for appointing such person."
The proviso speaks of "any person above the age of seventy years" and "appointed", while the clause speaks of a person who "has attained the age of seventy years". The two phrases are not identical and the Act does not say how a person aged exactly seventy is treated. We quote both and do not reconcile them. The proviso requires two things: a special resolution by three-fourth of the board members, and an explanatory statement annexed to the notice that gives the justification.
Clauses (b) and (c): insolvency and conviction
Clause (b) bars an "undischarged insolvent" and a person who "has any time been adjudged as an insolvent". The second limb has no time limit and no mention of discharge, so on the text even a discharged insolvent adjudged at any time is within it. Clause (c) bars a person who "has at any time been convicted by a court of an offence and sentenced for a period of more than six months". The test is both conviction and a sentence of more than six months; a conviction with a shorter sentence is outside the clause as printed.
Clause (d): fit and proper
For multi-State credit societies the criteria are "as determined by the Central Registrar". For non-credit multi-State societies they are "as Central Government may prescribe in terms of education qualifications and relevant experience". The Act does not define a "multi-State credit society" here and gives no criteria. Amendment rules were notified on 4 August 2023 (G.S.R. 591(E)); the consolidated Rules should be checked.
How the pieces fit
The Chief Executive is appointed by the board (section 49(2)(d)) and acts under the board's general superintendence (section 52). The new eligibility tests apply on top of that power: the board may appoint, but only from persons outside clauses (a) to (d). See our notes on the powers of the board and the powers and functions of the Chief Executive.
A practical example
Ekta Credit Multi-State Co-operative Society wants to reappoint its Chief Executive, Mr. Joshi, who is seventy-one. Under clause (a) he has attained seventy, so the society cannot continue him unless the proviso is met: a special resolution by three-fourth of the board members, with an explanatory statement annexed to the notice that gives the justification. If the board has twelve members, three-fourth is nine. Separately, the society must be satisfied that he meets the fit and proper criteria determined by the Central Registrar, because it is a credit society.
What the 2023 Amendment Act changed
| Provision | Before | After |
|---|---|---|
| s.51(1A) | No eligibility bar on the Chief Executive in section 51 | Inserted: no appointment or continuation of a person below twenty-one or who has attained seventy (proviso for above seventy), an insolvent, a person sentenced for more than six months, or a person failing the fit and proper criteria |
| s.51(1), (2), (3) | As printed above | Unchanged |
Need help with an appointment?
Before appointing or continuing a Chief Executive, a board should hold the evidence for each clause of section 51(1A) on file: date of birth, a declaration on insolvency and convictions, and the fit and proper material. Our legal consultation team can help you prepare that file and the resolution.
Key takeaways
- Every multi-State co-operative society must have a full-time Chief Executive appointed by the board.
- The Chief Executive is a member of the board and the Executive Committee.
- Since 2023, a society may not appoint or continue a person below twenty-one or who has attained seventy, subject to a special resolution by three-fourth of the board members.
- Insolvency and conviction with a sentence of more than six months bar a person.
- Fit and proper criteria are determined by the Central Registrar for credit societies and by the Central Government for others.
Read next
- Powers and functions of the Chief Executive (section 52)
- Meetings of the board and quorum (section 50)
- Committees of the board (sections 53 and 54)
- 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.