Chapter V Chapter V

Rights and Privileges of Societies

("First charge of a society on certain movable assets of a member for the amount due by him")

1. (1) Notwithstanding anything in any law for the time being in force, but subject to any claim of the Government in respect of land revenue, any debt or other amount due to a society by any member including a past or deceased member shall be a first charge upon the crop or other agricultural produce, cattle fodder for cattle, agricultural or industrial implements or machinery, raw materials for manufacture and any finished products manufactured from such raw materials owned by such member.
2. (2) Such charge shall be available even as against any amount recoverable by the Government as if it were an arrear of land revenue or any claim of the Government arising from a loan granted under the Land Improvement Loans Act, 1883, subsequent to the incurring of the debt of the liability for the other amount due to the society referred to in sub-section (1).
3. (3) No person shall transfer any property which is subject to such charge except with the previous permission in writing of the society which holds the charge and any transfer, without such permission shall, notwithstanding anything in any law for the time being in force, be void.
4. (4) The charge under this section shall not be available against the following articles of such members:-
   • (a) the necessary wearing apparel, cooking vessels, beds and bedding and such personal ornaments of a woman as in accordance with religious usage cannot be parted with by her ;
   • (b) ploughs, implements of husbandry, one pair of ploughing cattle, such manure and seed grain stocked by him, as may be necessary for the due cultivation of his lands in the ensuring year.

("Charge on the immovable property of a member for the loans borrowed")

1. (1) Notwithstanding anything in this Act or in any law for the time being in force, but subject to any claim of the Government in respect of land revenue and to any claim of an agricultural development bank in respect of its dues, in either case, whether prior in time or subsequent any member owning any land or having interest in any land as a tenant, who applies to a society for a loan, shall make a declaration in the form prescribed creating a charge in favour of the society, on the land or interest specified in the declaration, for the payment of the loan to be granted to him by the society in pursuance of the application and for all future advances, if any, required by him, which the society may grant to him, subject to such maximum as may be determined by the society, together with the interest on such amount of the loan and advances.
2. (2) Such declaration may be varied or cancelled at any time by the member with the consent of the society.
3. (3) Subject to the provisions of sub-section
4. (1) and to the claim of any person in whose favour a mortgage or a charge has been created before the date of registration of the declaration made under sub-section (1), no land in respect of which such declaration has been made or any part of or any interest in such land shall be sold or otherwise transferred until the entire amount of the loan or advance taken by the member from the society together with interest thereon is paid to the society; and any transaction made in contravention of this sub-section shall be void : Provided that, if a part of the amount borrowed by a member is paid, the society may, on application from the member and with the approval of the financing bank, release from the charge created under the declaration made under sub-section (1), such part of the land or interest in such land specified in the said declaration, as it may deem proper, with due regard to the security of the balance of the amount remaining outstanding from the member : Provided further that, nothing in this sub-section shall apply in respect of a mortgage created in favour of an agricultural development bank, subsequent to the date of Registration of the declaration made under sub- section (1).
5. (4) The declaration made under sub-section
6. (1) or any variation or cancellation thereof under sub-section
7. (2) shall be sent by registered post by the society to the Sub-Registrar having jurisdiction over the area in which the land is situated. He shall, if it is in order, register such declaration or variation or cancellation and return it to the society and where it is not in order, he shall return it to the society without registering it. Where it is registered, it shall take effect from the time of its registration and where it is not registered, it shall be of no effect. Explanation:- For the purposes of this section, the expression “Society” means-
   • (i) any society, the majority of members of which are agriculturists and the primary object of which is to obtain credit for its members of any agricultural purpose ; or
   • (ii) any society or any class of societies specified in this behalf by the

Deduction from salary or wages

Deduction from salary or wages:— [Rule 33]

1. (1) Notwithstanding anything in any other law for the time being in force, a member of a society may execute an agreement in favour of that society providing that his employer shall be competent, on a requisition in writing from the society, to deduct every month from the salary or wages payable to him such amount as may be specified in the requisition towards the amount due by him to the society in respect of any debt or other amount due by the member to the society, from time to time.
2. (2) (a)Where such agreement has been executed by a member, the employer of such member shall, on receipt of a requisition from the society, make the deduction from the salary or wages payable to the member in accordance with the requisition, and pay, within such time as may be specified in the rules in respect of any society or class of societies, the amount so deducted, to the society.
   • (b) Where the amount to be deducted in any month in accordance with the requisition made by a society, or where a requisition has been made by two or more societies in respect of the same person, the total amount to be deducted in accordance with all the requisitions, exceeds one-third of his entire gross salary or wages for the month, the employer shall deduct from the salary or wages of such person only a sum representing one-third of his entire gross salary or wages for the month. The amount deducted shall, where deductions have been made against requisitions received from two or more societies be paid by the employer to all the societies in proportion to the amounts to be deducted according to their requisitions : Provided that where any amount is due to such class of societies as may be specified in the rules, the entire gross salary or wages for the month on such portion thereof as may be specified in the rules in respect of any such class of societies may be deducted and paid as aforesaid.
3. (3) The employer shall maintain such registers as may be prescribed.
4. (4) The provisions of this section shall apply to all such agreements of

the nature referred to in sub-section

1. (1) as are in force at the commencement of this Act.
2. (5) If such employer fails to comply with any of the provisions of this section, he shall be punishable with fine which may extend to five hundred rupees.
3. (6) Where a requisition in writing from any society registered or deemed to be registered in any reciprocating State in respect of a member of that society who for the time being is employed in this State, is received by his employer, the requisition shall be acted upon as if it had been made by a society in this State. Explanation:-For the purposes of this sub-section ‘reciprocating State’ means any State which the Government may, by notification in the Andhra Pradesh Gazette, declare to be a reciprocating State.
4. (7) Nothing in this section shall apply to establishments under a railway administration operating any railway as defined in clause
5. (20) of Article 366 of the Constitution or to any industry to which the Payment of Wages Act, 1936 is applicable. Explanation:- For the purposes of this section, employer shall include an officer disbursing salary or wages of a member,

Charge and set-off in respect of shares or interest of members in the capital, etc., of a society:- A society shall have a charge upon the share or interest in the capital, deposits, dividend, bonus or profits payable to a member or a past member or the estate of a deceased member in respect of any debt or other amount due by him to the society and may set off any sum credited or payable to such member against payment of any such debt or other amount due : Provided that no financing bank to which a society is affiliated shall have a charge upon or set-off against any debt due from such society-

1. (i) any sum invested in the financing bank as reserve fund by the society if the bank is not the sole creditor of the society ; or
2. (ii) any sum invested in it by the society as provident fund of its employees established under Section 49.

Share or interest, etc., not liable to attachment:— The share or interest, of a member in the capital of a society or of an employee in the provident fund established under Section 49 or the contribution made by a member or past member or from the estate of a deceased member or by any officer or former officer under Section 66, or the reserve fund of a society [or the bad debts reserve of a Society] or the Provident Fund of its employees invested under Section 46, shall not be liable to attachment or sale, under any decree or order of a Court, in respect of any debt or liability incurred by such member, or officer; and an official assignee or a receiver under any law relating to insolvency shall not be entitled to or have any claim on such share, interest, contribution or fund.

Right to set-off where a registered society purchases immovable property at a sale under the Andhra Pradesh Revenue Recovery Act, 1864, for any amount due to it:—

1. (1) Where, under this Act or any rule made thereunder, any amount due to a society from any person is recoverable as an arrear of the land revenue and immovable property of such person is brought to sale under the provisions of the Andhra Pradesh Revenue Recovery Act, 1864, and the society is the purchaser at such sale, the provisions of Section 36 of the said Act shall apply thereto subject to the modification that for the third and fourth clauses thereof, the following clauses were substituted, namely:— “Third:— The sum due to the purchaser shall be set-off, in whole or in part, against the purchase money and the remainder, if any, of the purchase money shall be paid to the Collector or other officer empowered by the Collector in that behalf within thirty days of the date of sale.” “Fourth:— Where the purchaser refuses or fails to make the payment of the remainder, if any, of the purchase money the amount of loss or expense consequent on such refusal or failure shall be a charge on the property purchased, and shall be recoverable from such purchaser in the same manner as arrears of land revenue. The amount so recovered shall be paid to the owner of the immovable property.”
2. (2) Where a sale is conducted under Section 71, Section 103 or Section 104 by the Registrar or any other person authorised by him, the provisions of sub-section
3. (1) shall apply as if it were a sale for the recovery of an arrear of land revenue.

Exemption from certain taxes, duties and fees:— The Government, if in their opinion it is necessary in the public interest so to do, may, by notification in the Andhra Pradesh Gazette, and subject to such restrictions and conditions as may be specified in such notifications, reduce or exempt in respect of any class of societies—

1. (a) the taxes on professions, trades, callings and employments ;
2. (b) the stamp duty with which, under any law for the time being in force, instruments executed by or on behalf of a society or by an officer or member and relating to business of such society or any class of such instruments or decisions or orders of the Registrar or arbitrator or liquidator under this Act, are respectively chargeable ; or
3. (c) any fee payable under the law relating to registration for the time being in force or Court-fees.

Exemption from compulsory registration of instruments:— Nothing in clauses

1. (b) and
2. (c) of sub-section
   • (I) of Section 17 of the Indian Registration Act, 1908 shall apply to—
3. (a) any instruments relating to shares in a society notwithstanding that the assets of the society consist in whole or in part of immovable property;
4. (b) any debentures issued by any such society and not creating, declaring, assigning, limiting or extinguishing any right, title or interest to or in immovable property except in so far as it entitles the holder to the security afforded by a registered instrument whereby the society has mortgaged, conveyed or otherwise transferred the whole or part of its immovable property or any interest therein to trustees upon trust for the benefit of the holders of such debentures ; or
5. (c) any endorsement upon or transfer of any other debenture issued by any such society.