Short Answer

Yes, settlement agreements with the society, such as compounding defaults, are legally binding.

Detailed Explanation

Section 63 of the Gujarat Cooperative Societies Act, 1961 empowers the Registrar to inquire into disputes and complaints. This section allows for the settlement of disputes through arbitration or conciliation, and any settlement reached in this manner is legally binding. In practice, when a society and its members agree to a settlement, it must be in writing and signed by both parties to be enforceable. Real-world scenarios include cases where a member defaults on payments to the society, and both parties agree to a settlement amount to resolve the issue. The step-by-step process involves drafting a settlement agreement outlining the terms agreed upon, getting it signed by both parties, and registering it with the society for record-keeping.

Rule 137 of the Gujarat Cooperative Societies Rules, 1965 further elaborates on the procedure for settlement of disputes. This rule specifies that any compromise or arrangement between a society and its members regarding any matter under dispute shall be in writing and signed by both parties. The rule also mandates that such settlements must be approved by the Registrar to be considered legally binding. Practical examples include situations where a society and a member enter into a settlement agreement to waive off certain penalties for late payments in exchange for prompt settlement of dues. This rule ensures that settlements are formalized, approved, and upheld by the Registrar, providing legal validity to such agreements.

Reference

• Section 63 of the Gujarat Cooperative Societies Act, 1961: Official PDF

• Rule 137 of the Gujarat Cooperative Societies Rules, 1965: Official PDF