Section 55: Internal controller

55. Internal controller (1) Every society shall appoint at least one internal controller who shall not be a director of the society. (2) The internal controller shall be appointed by the society at a general meeting on such terms and conditions as the general meeting may determine. (3) Where the Internal Controller has vacated or is removed from office prior to a general meeting, the Board may appoint an Internal Controller on such terms and conditions as it may determine and such decision shall be ratified at the next general meeting. (4) (a) Every internal controller shall ensure that the affairs of the society are conducted in accordance with this Act, other relevant enactments and the rules of the society and, in particular, shall— (i) ensure that all the activities follow approved policies and established procedures; (ii) ensure that all the books of the society are, at all times, up to date; (iii) carry out inspections of the money, stocks, books and other assets of the society; (iv) ascertain the authority and validity of all expenditure, including loans and advances; (v) examine the accounts of the society at regular intervals and ensure that all transactions of the society are properly recorded in the respective books, accounts and any other documents where required; and (vi) not disclose to any unauthorised person any matter which comes to his knowledge in the course of his functions. (b) Any internal controller who contravenes paragraph (a) (vi) shall commit an offence and shall, on conviction, be liable to a fine not exceeding 25,000 rupees. (5) An internal controller shall, in the exercise of his functions, have access to all books, accounts and documents of the society and shall have the power to call upon any person to produce any such information or such books, accounts and documents as he may require. (6) (a) An internal controller shall, within 15 days from the end of each quarter, make a report of his findings and send a copy of the report to the Registrar and the Board. (b) Where the internal controller fails to submit his quarterly report within the delay specified in paragraph (a), the Registrar may require that the report be submitted within such time as he may determine. C49 – 31 [Issue 10] Co-Operatives Act (c) Where an internal controller fails to submit his report within the time fixed by the Registrar, the Registrar may appoint an inspector at the expense of the society to inquire into its affairs. (d) The inspector appointed under paragraph (6) shall submit his report within 30 days of his appointment or such time as the Registrar may determine. (e) The internal controller shall, at least 7 days before the next annual general meeting, make an annual report which shall be accessible at the seat of the society.