धारा 126 · Power of registrar to direct division of co-operative society in to two or more co-operative societies

(1) Where in the opinion of the Registrar it is essential in public interest or in the interest of the co-operative movement or desirable for the purpose of securing better management of a cooperative society, that any co-operative society should be divided to form two or more societies, he may, notwithstanding anything to the contrary contained in this Act, after consulting the financing bank, if any, to which the society is indebted, call upon such society by order in writing to divide itself in to two or more societies with such constitutions, assets, liabilities, rights, duties and obligations as may be specified in the order and thereupon in the society shall take all such steps as may be necessary for that purpose in accordance with the provisions of section 16.

(2) on the failure of the society to divide itself in accordance with the order passed under sub-section (1), the Registrar ¹[X X X] may, by order in writing direct division of the society into two or more societies.

(3) The direction of the Registrar under sub-section (2) shall be deemed to be a preliminary resolution of the society concerned for the purpose of section 16, and the Registrar shall take such further steps as are required by that section.

(4) After the expiry of ²[thirty days from the date of receipt of the copy of the preliminary resolution under clause (a) of sub-section (2) of section 15 or, as the case may be, form the date of its publication in a newspaper under clause (b) of that sub-section] the Registrar shall, from the funds of the society concerned repay, subject to provision of section 41, the share capital of all the members, and satisfy the claims of all the creditors who have given notice under clause (i) and clause (ii) respectively of sub-section (3) of section 16, and thereafter register the new societies and the bye-laws thereof. On such registration, the registration of the old society shall be deemed to have been cancelled.

(5) The registration of the new societies under sub-section (4) shall be deemed to be registration under section 16 and the provisions of sub-section (7) of that section shall apply to them.