Short Answer

Yes, a cooperative society can borrow funds for maintenance purposes, and it can recover these funds from its members.

Detailed Explanation

Section 63 of the Gujarat Cooperative Societies Act, 1961 empowers cooperative societies to borrow funds for their activities, including maintenance. This section allows societies to take loans from banks, financial institutions, or other sources with the approval of the general body. The borrowed funds can be utilized for various purposes, including maintenance expenses.

Furthermore, Rule 113 of the Gujarat Cooperative Societies Rules, 1965 provides guidelines on borrowing by societies. It states that the borrowing powers of the society should be exercised as per the Act and Rules, and the society must ensure proper utilization of the borrowed funds. The rule also specifies that the society should maintain records of all borrowings and repayments.

In practice, when a cooperative society needs funds for maintenance, it can convene a general body meeting to seek approval for borrowing. Once the funds are borrowed, the society should use them for the intended purpose of maintenance. The society must maintain proper records of the borrowing, utilization, and repayment to ensure transparency and accountability.

Real-world Scenarios

• Scenario 1: A cooperative housing society in Gujarat needs funds for repairing the common areas like the parking lot and garden. The society convenes a meeting, obtains approval from the members, and borrows funds from a bank for the maintenance work.

• Scenario 2: A cooperative society managing a commercial complex requires funds for regular upkeep and repairs. The society decides to take a loan from a financial institution after obtaining consent from the general body.

Reference

• Section 63 of the Gujarat Cooperative Societies Act, 1961

• Rule 113 of the Gujarat Cooperative Societies Rules, 1965