Section 104 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Section 104 is the main penal provision of the Act. As amended in 2023, it now punishes failing to file a return or information, raises the fines in sub-sections (1), (2) and (3), adds receiving a gift in election offences with a three-year debarment, and adds two new sub-sections on offences by boards and officers: (5) for misconduct, wrongful investment and loss, and (6) for unlawful gains.
This article follows the Ministry of Cooperation copy of the Act read with the Multi-State Co-operative Societies (Amendment) Act, 2023, which amended s.104 by its section 37. The 2023 Act came into force on 3 August 2023 (notification S.O. 3493(E)).
Fines under sub-section (1) are now not less than five thousand rupees and up to one lakh rupees. Under sub-section (2) the fine for an employer who fails to pay over a deduction may extend to ten thousand rupees. Election offences carry up to six months' imprisonment or fine or both, and now also debarment from contesting elections for three years. New sub-sections (5) and (6) punish boards and responsible officers with one month to one year imprisonment or a fine of five thousand rupees to one lakh rupees, or both.
Section 104(1): false returns, failing to file, disobedience
As amended, the sub-section reads: "A multi-state cooperative society or an officer or member thereof wilfully making a false return or furnishing false information or failing to file any return or information, or any person wilfully or without any reasonable excuse disobeying any summons, requisition or lawful written order issued under the provisions of this Act, or wilfully not furnishing any information required from him by a person authorised in this behalf under the provisions of this Act, shall be punishable with fine which shall not be less than five thousand rupees and which may extend to one lakh rupees."
The words "or failing to file any return or information" were added in 2023. The point is that failing to file is itself an offence under this sub-section; the returns a society files are dealt with in s.120 (see our article on annual returns). The text uses "wilfully" for the first limb and for the last; whether the added limb carries the same requirement is a matter for the words as printed, and this article does not decide it.
Example. The invented Chambal Multi-State Credit Society does not file a return that the Act requires. The society and its officers should treat the failure as within sub-section (1), and a board facing a notice can obtain legal dispute resolution support to respond on the facts.
Section 104(2) and (3): deductions and custody
Sub-section (2): an employer who, "without sufficient cause", fails to pay to a society the amount deducted by him under section 60 within fourteen days from the deduction is punishable "without prejudice to any action that may be taken against him under any other law" with fine which may extend to ten thousand rupees (as amended).
Sub-section (3): an officer or custodian who wilfully fails to hand over custody of books, accounts, documents, records, cash, security and other property of the society to a person entitled under section 54, section 70, section 78, section 79 or section 89 "or to a person required to file return under section 120" is punishable with fine up to five thousand rupees and, for a continuing breach, a further fine up to ten thousand rupees for every day after conviction for the first breach (as amended).
The added words in sub-section (3) speak of handing over custody "to a person required to file return under section 120". A person who files a return is not obviously a person to whom custody is handed. The amending clause inserts these words after "section 89" exactly as printed above, and this article quotes both texts and does not reconcile them.
Section 104(4): election offences
The sub-section applies to whoever, "before, during or after the election of delegates under the proviso to sub-section (1) of section 38 or election of members of the board", does any of the following: fraudulently defaces or destroys a nomination paper (a); fraudulently defaces, destroys or removes a list, notice or document affixed by or under the authority of a returning officer (b); fraudulently defaces or destroys a ballot paper, its official mark or a declaration of identity (c); without due authority supplies, receives or possesses ballot papers (d); fraudulently puts anything other than a ballot paper into a ballot box (e); without due authority destroys, takes, opens or interferes with ballot boxes or papers in use (f); attempts or wilfully aids or abets any of these (g); or (h) "offers any gift or promises to offer any gratification to any person or receives such gift, promise or gratification" with the object of inducing a person to stand or not to stand, to withdraw or not to withdraw, a member to vote or refrain, or as a reward for having so done.
The punishment is imprisonment up to six months or fine or both, "and shall also be debarred from contesting elections for a period of three years". The debarment words were added in 2023 and appear after "or with both" at the end of the long line following clause (h). They are placed at the end of the whole sub-section, so on the face of the text they attach to every clause (a) to (h); the print does not say more.
Section 104(5): boards and responsible officers
Where a society "(a) which is required to provide an explanation or make a statement during the course of inspection, inquiry or investigation, destroys, mutilates or falsifies, or conceals or tampers or unauthorisedly removes ... any document relating to the property, assets or affairs of the society or makes or causes to make a false entry in any document concerning the society; (b) makes any investment in contravention of the provision of section 64 or the bye-laws made under this Act; (c) causes unlawful loss to the assets and property of the society; or (d) causes unlawful loss to the depositor", the board or responsible officers are punishable "with imprisonment for a term which shall not be less than one month but which may extend to one year or with fine which shall not be less than five thousand rupees but may extend to one lakh rupees or with both".
Section 104(6): unlawful gains
Where the board or officers "receive any unlawful gains while transacting matters related to such society or utilise any assets of the society for personal unlawful gains", they are punishable with the same range, "and the proceeds of such unlawful gains shall be recovered from them and deposited in such manner as may be prescribed". The manner is left to rules; the Rules, 2002 as amended should be checked.
Before and after the 2023 Act
| Provision | Before | After |
|---|---|---|
| (1) acts | False return or information; disobedience; not furnishing information | Also "failing to file any return or information" |
| (1) fine | Not less than two thousand rupees, up to ten thousand rupees | Not less than five thousand rupees, up to one lakh rupees |
| (2) fine | Up to five thousand rupees | Up to ten thousand rupees |
| (3) persons | Custody to a person entitled under ss.54, 70, 78, 79, 89 | Adds "or to a person required to file return under section 120" |
| (3) fines | Up to two thousand rupees; further up to five thousand rupees a day | Up to five thousand rupees; further up to ten thousand rupees a day |
| (4)(h) | Offers a gift or promises gratification | Also "receives such gift, promise or gratification"; debarment for three years |
| (5) and (6) | Not present | New |
How prosecution starts, and which court tries the offence, is in s.105; see our article on cognizance of offences. Other laws may apply independently; see s.105A.
Need help with a notice or an allegation?
An allegation under s.104 can affect a society, its directors, officers and employees differently, and a missed return can start it. Our team can review the notice, the records and the dates with you under legal dispute resolution.
Key takeaways
- Failing to file any return or information is now an offence under s.104(1).
- Fines in sub-sections (1), (2) and (3) were raised in 2023.
- Election offences include receiving a gift, and carry debarment from contesting elections for three years.
- New sub-sections (5) and (6) punish boards and responsible officers for document tampering, wrong investment, unlawful loss and unlawful gains.
- Recovery of unlawful gains is in the manner prescribed.
Read next
- Multi-State Co-operative Societies Act, 2002: complete guide
- Sections 105 and 105A: cognizance of offences and Act in addition to other laws
- Section 120: filing of annual returns
- Compounding vs adjudication of offences: key differences
Disclaimer: Based on the Ministry of Cooperation copy of the Multi-State Co-operative Societies Act, 2002 read with the Multi-State Co-operative Societies (Amendment) Act, 2023 (in force from 3 August 2023), as consulted on 2 October 2026. The Multi-State Co-operative Societies Rules, 2002 as amended, later notifications and later amendments are not covered and should be checked. This article is general information, not legal advice; check the official text before acting.