Sections 68 and 69 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 68 leaves the limits on a multi-State co-operative society's dealings with non-members to its bye-laws, subject to the rules on loans and borrowing in sections 66 and 67. Section 69 lets a society with the prescribed number or class of employees set up a contributory provident fund for them and keeps the fund apart from the society's business, assets and creditors. Neither section was amended in 2023. They are stated as per the Ministry of Cooperation copy of the Act read with the Multi-State Co-operative Societies (Amendment) Act, 2023.
Section 68: except as sections 66 and 67 provide, a society's transactions with anyone who is not a member are subject to such prohibitions and restrictions, if any, as are specified in the bye-laws. Section 69: a society with the prescribed number or class of employees may establish a contributory provident fund, into which employees' and the society's contributions are credited under the bye-laws. Money in the fund cannot be used in the society's business, does not form part of its assets and cannot be attached by any court or other authority.
Section 68: other transactions with non-members
"Save as provided in sections 66 and 67, the transaction of a multi-state cooperative society with any person other than a member, shall be subject to such prohibitions and restrictions, if any, as may be specified in the bye-laws."
Three readings follow from the text:
- the Act itself imposes the limits in sections 66 and 67 only: loans (section 66) and deposits, loans and borrowing (section 67). See our note on restrictions on contributions, loans and borrowings;
- for any other dealing with a non-member, whatever limits exist are for the bye-laws to state, and the words "if any" mean the bye-laws need not impose any;
- the section does not itself prohibit dealing with non-members.
The section does not define a "transaction", and does not say whether dealings with a non-member that are permitted by the bye-laws affect any other part of the Act. A society drafting or reviewing bye-laws on this point can ask our legal consultation team for help.
Section 69: contributory provident fund
Sub-section (1): establishing the fund
"Subject to the provisions of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 (19 of 1952), a multi-state cooperative society having such number or class of employees as may be prescribed, may establish a contributory provident fund for the benefit of its employees to which shall be credited all contributions made by the employees and the society in accordance with the bye-laws of the society."
Check the current law for the corresponding provision of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952, and for how it interacts with this section. The Act names no other law here.
| Element | Text |
|---|---|
| Who may establish | A society "having such number or class of employees as may be prescribed" |
| Whether it must | "may establish", so the section is permissive |
| Beneficiaries | "its employees" |
| What is credited | "all contributions made by the employees and the society in accordance with the bye-laws" |
| Subject to | the 1952 Act |
The number or class of employees is left to rules. Amendment rules were notified on 4 August 2023 (G.S.R. 591(E)); the consolidated Rules should be checked. No number is given here.
Sub-section (2): ring-fencing the fund
"Monies standing to the credit of any contributory provident fund established by a multi-state cooperative society under sub-section (1) shall not—
(a) be used in the business of the society; (b) form part of the assets of the society; (c) be liable to attachment or be subject to any other process of any court or other authority."
Each clause protects employees in a different way:
| Clause | Protection |
|---|---|
| (a) | The society cannot use the money in its business, so it cannot lend itself the fund |
| (b) | The money is not an asset of the society, so it is outside the pool available to the society's creditors and, on a winding up, outside its assets as the text reads |
| (c) | No court or other authority can attach it or subject it to "any other process" |
Clause (c) goes further than section 56(2), which protects the "provident fund of the employees" from attachment under a court decree or order only if it is invested in accordance with the Act and the bye-laws; see our note on charge and set-off and bar on attachment. Section 69(2)(c) refers to "any court or other authority" and to "any other process", and carries no investment condition in its text. The Act does not reconcile the two provisions, and we do not attempt to.
The fund's money is not to be used in the society's business, but the Act says nothing in section 69 about where it should be held or invested. Section 64 lists where a society may invest its own funds; see our note on investment of funds. Whether those modes govern the provident fund is not stated in either section.
A practical example
Navdeep Multi-State Co-operative Society has the number of employees that the rules prescribe and sets up a contributory provident fund under its bye-laws. Each month an employee's contribution and the society's contribution are credited to it. When the society faces a cash shortage, the board proposes to borrow from the fund to pay suppliers. Section 69(2)(a) forbids using the fund in the society's business. Later a creditor with a decree against the society tries to attach the fund. Section 69(2)(c) says the money is not liable to attachment, and section 69(2)(b) says it is not part of the society's assets. Separately, the society sells goods to a non-member; unless the bye-laws prohibit it, section 68 does not.
What the 2023 Amendment Act changed
| Provision | Before | After |
|---|---|---|
| ss.68, 69 | As printed above | Unchanged |
The 2023 Amendment Act is Act 11 of 2023 and came into force on 3 August 2023 by notification S.O. 3493(E). The principal Act came into force by notification, date not in the source. Section 67, to which section 68 refers, was changed in 2023 (the borrowing multiple), but section 68's own words did not change.
Need help with employee funds and bye-laws?
A society that is setting up a provident fund, or that is unsure what its bye-laws say about dealings with non-members, should check the text before it acts. Our legal consultation team can review the bye-laws and the fund arrangements against sections 68 and 69.
Key takeaways
- Dealings with non-members are limited by sections 66 and 67 and, for the rest, only by such restrictions as the bye-laws specify.
- A society with the prescribed number or class of employees may set up a contributory provident fund, subject to the Employees' Provident Fund and Miscellaneous Provisions Act, 1952.
- Contributions of employees and the society are credited under the bye-laws.
- The fund cannot be used in the society's business, is not part of its assets and cannot be attached.
Read next
- Restrictions on contributions, loans and borrowings (sections 65 to 67)
- Appointment and remuneration of auditors (section 70)
- Charge and set-off on shares and bar on attachment (sections 55 and 56)
- Multi-State Co-operative Societies Act, 2002: complete guide
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.