Section 40: Directives may be given to call an Extraordinary General Meeting

1) Registrar or authority authorised by the Registrar may direct the Cooperative Organization to call an Extraordinary General Meeting in case any of the following circumstances are found while carrying out inspection or supervision of any Cooperative Organization or while inquiring into a complaint:-

(a) In case of commission of any act against values, norms and principles of cooperatives,

(b) In case of commission of any act against this Act, the Rules, Byelaws and internal procedures framed under this Act,

(c) In case serious flaws are identified in the course of inspection or supervision of a Cooperative Bank by the Nepal Rastra Bank,

(d) In case of frequent violation of the directives issued by the Registrar or authority authorised by the Registrar,

(e) In case the Registrar or authority authorised by the Registrar issues an order pursuant to sub-Section (2) of Section 42.

2) In case of receipt of the directive to call the General Meeting pursuant to sub-Section (1), the Board shall call the General Meeting within Thirty-five days from the date of receipt of the directive, and discussions shall be held on the complaint, or the matter identified in the course of inspection and report thereof shall be submitted to the Registrar or authority authorised by the Registrar.

3) In case the Board fails to call the General Meeting within the period referred to in sub-Section (1) and (2), the authority authorised by the Registrar in case of the organisation, District Sectoral Cooperative Association and District Cooperative Association; and the Registrar in case of Provincial Sectoral Cooperative Association, provincial cooperative Association, Specialized Cooperative Association, Central Sectoral Cooperative Association, National Cooperatives Federation and Cooperative Bank, may call such a General Meeting.

4) The quorum for the General Meeting of a Cooperative Organization shall be at least fifty-one percent of the number of the then-existing members.

Provided that in case the quorum could not be constituted in the General Meeting called for the first time, it shall be called again within seven days. If one-third of the members, along with the majority of the members of the Board of Directors, are present in the General Meeting called again, the quorum for the General Meeting shall be deemed to be constituted.

5) While convening the General Meeting by a Cooperative Organization having two thousand or more members, the General Meeting may be convened on the same agenda in a local body or a ward thereof on the basis of a prescribed number by sending the members of the Board of Directors, representatives may be selected to certify the decisions of the General Meeting and the General Meeting may take final decisions in the presence of such representatives.