Short Answer

Yes, a cooperative society can cancel the membership of a member who becomes insolvent or bankrupt.

Detailed Explanation

Section 29 of the Gujarat Cooperative Societies Act, 1961 empowers a cooperative society to cancel the membership of a member who becomes insolvent or bankrupt. This section allows the society to expel such a member by passing a resolution at a general meeting. The member in question must be given an opportunity to be heard before the resolution is passed. This provision is crucial to protect the financial interests and integrity of the cooperative society.

In practice, if a member is declared insolvent or bankrupt, the society can initiate the process of canceling their membership by convening a general meeting. During the meeting, the reasons for expulsion must be clearly stated, and the member should be given a chance to present their case. After due consideration, a resolution can be passed to expel the member from the society.

Real-world Scenarios

• Mr. Patel, a member of a cooperative housing society, files for bankruptcy due to financial difficulties. The society, after following the due process, decides to cancel his membership to safeguard the interests of other members.

• A farmer who is a member of an agricultural cooperative society faces insolvency. The society, in compliance with Section 29, expels him to maintain financial stability.

Reference

• Section 29 of the Gujarat Cooperative Societies Act, 1961: Official PDF