Short Answer

Yes, a society can buy services from a member's company, but it must adhere to the regulations set forth in the Gujarat Cooperative Societies Act, 1961 and Rules.

Detailed Explanation

Section 73 of the Gujarat Cooperative Societies Act, 1961 allows a cooperative society to enter into contracts with its members or other persons for the provision of services. However, such contracts must be approved by the society's general meeting and should not be prejudicial to the interests of the society or its members. This means that a society can indeed purchase services like cleaning from a member's company, but it must ensure transparency, fairness, and compliance with the Act.

Rule 135 of the Gujarat Cooperative Societies Rules, 1965 further elaborates on the procedure for entering into such contracts. It states that any contract with a member or his/her relative must be approved by the committee and ratified by the general body meeting. The terms of the contract, including the rates and conditions, should be fair and competitive to ensure that the society is not at a disadvantage.

In practice, before engaging a member's company for services, the society should follow a transparent process of inviting bids or proposals from multiple vendors, including the member's company. The selection should be based on factors like quality, cost-effectiveness, and compliance with the society's requirements. The terms of the contract should be documented clearly to avoid any disputes or conflicts of interest.

Real-world Scenarios

• Scenario 1: A cooperative housing society needs cleaning services and one of its members owns a cleaning company. The society follows the process outlined in Section 73 and Rule 135, inviting bids from multiple vendors, including the member's company. After evaluating the proposals, the society selects the member's company based on fair and competitive terms.

• Scenario 2: A cooperative society requires maintenance services for its common areas, and a member offers services through their company. The society's committee reviews the proposal, ensures compliance with the Act and Rules, and presents the contract terms to the general body for approval. The contract is finalized only after due diligence and approval from the members.

• Scenario 3: In a cooperative society, a member's company provides landscaping services. The society follows the guidelines in the Act and Rules, conducts a fair evaluation process, and signs a contract with the member's company after obtaining necessary approvals. The terms of the contract are transparent and beneficial to the society.

References

• Section 73 of the Gujarat Cooperative Societies Act, 1961: Official PDF

• Rule 135 of the Gujarat Cooperative Societies Rules, 1965: Official PDF