Preamble

Financing of Co-operative Societies by Banks

15. Bank eligible to become member of a co-operative society. - Notwithstanding anything contained in the Bihar and Orissa Co-operative Societies Act, 1935 or any law for the time being in force, it shall be lawful for a bank to become a member of a co-operative society.

16. Power of co-operative societies to borrow from banks. - Notwithstanding anything contained in the Bihar and Orissa Co-operative Societies Act, 1935 it shall be lawful for any co-operative society to borrow from a bank:

Provided that in the interest of promotion and growth of co-operative society the State Government may make such provision in the Rules as may be necessary from time to time to restrict the extent to which a Bank lend in areas adequately served by co-operatives.

17. Inspection of books of co-operative society by a bank. - (1) A bank shall have the right to inspect the book of any co-operative society which has either applied to the bank for financial assistance or is indebted to the bank on account of financial assistance granted earlier.

1. (2) The inspection of co-operative society may be carried out by an officer or any other member of the paid staff of the bank with the previous sanction in writing of a Registrar of Co-operative Societies.
2. (3) The officer or any other member of the paid staff of the bank, undertaking such inspection, shall at all reasonable time, have access to the books of accounts, documents, securities, cash and other properties belonging to or in the custody of the co-operative society inspected by him, and shall also be supplied by such society such information, statements and returns as may be required by him to assess

the financial condition of the society and security of the money advanced or to be advanced to the society by way of financial assistance.

18. Disputes between a bank and co-operative society. - (1) Notwithstanding anything contained in any other law for the time being in force any dispute touching the constitution, management or the business of a co-operative society; between a bank financing a co-operative society and co-operative society so financial other than dispute regarding the disciplinary action taken by the society or its committee against a paid employee of the society, shall be referred by either of the parties to the dispute to the Registrar of co-operative Societies for decision.

1. (2) Where any question arises whether, for purposes of the foregoing subsection, a matter referred to for decision is a dispute or not, the question shall be decided by the Registrar of Co-operative Societies whose decision shall be final. 19. Settlement of dispute. - (1) If the Registrar is satisfied that any matter referred to him or brought to his notice is a dispute within the meaning of Section 18, the Registrar shall decide the dispute himself or transfer it for disposal to any section exercising the powers of a Registrar in this behalf, or refer it for disposal to an arbitrator or arbitrators provided that nothing in the Arbitration Act, 1940 (Act X of 1940) 8/11 shall apply to such reference.
2. (2) Where any dispute is transferred or referred under the foregoing subsection for decision, the Registrar may at any time, for reasons to be recorded in writing, withdraw such dispute from any person or arbitrator or arbitrators to whom it has been transferred or referred, as the case may be, and may decide the dispute himself or either transfer it or refer it again for decision to any other person exercising the powers of a Registrar or to any other arbitrator or arbitrators.
3. (3) Notwithstanding anything contained in Section 18, the Registrar may if he thinks fit, suspend proceeding in regard to any dispute of the question at issue between a co-operative society and a bank is one involving complicated questions of law and fact, until the question has been decided in a regular suit instituted by one of the parties to the dispute. If any such suit is not instituted within two months from the Registrar's order suspending proceedings, the Registrar may take action as it provided in sub- section (1) or may refer the case to the District Judge for decision. 20. Procedure for hearing of dispute. - The Registrar or any person exercising the powers of a Registrar or any arbitrator or arbitrators hearing a dispute under the last preceding section shall mutatis mutandis, follow the procedure laid down under sections 49 and 51 of the Bihar and Orissa Cooperative Societies Act, 1935 (B. & O. Act VI of 1935) and the rules framed thereunder. 21. Decision of Registrar or any person exercising the powers of Registrar or arbitrator/arbitrators. - When the dispute is referred for decision the Registrar or any person exercising the powers of a Registrar or arbitrator or arbitrators may after giving a reasonable

opportunity to the parties to the disputes to be heard, make an award on the dispute, the expenses incurred by the parties to the dispute in connection with the proceeding and fees, expenses payable to the Registrar or any person exercising the powers of a Registrar or arbitrator or arbitrators, as the case may be. Such award shall not be invalid merely on the ground that it was made after the expiry of the period fixed for deciding the dispute by the Registrar and shall be final and binding on the parties to the dispute.

22. Recovery of money awarded. - Every award given by the Registrar or any person exercising the powers of Registrar or arbitrator or arbitrators under section 21 shall, if not carried out, on certificate signed by the Registrar, be deemed to be a decree of a civil court having jurisdiction to entertain a suit in respect of the matter in dispute and shall be executed in the same manner as a decree of such court.

23. Powers of a bank to proceed against defaulting members of a cooperative society. - (1) If a co-operative society is unable to pay its debts to a bank from which it has borrowed, by reason of its members defaulting in the payment of the moneys due from them, the bank may direct the Committee of such society to proceed against such members by taking action under the Bihar and Orissa Co- operative Societies Act, 1935.

1. (2) If the Committee of the co-operative society fails to proceed against its defaulting members within a period of ninety days from date of receipt of such direction from the bank, the bank itself may proceed

against such defaulting members in which even the provisions of the Bihar and Orissa

Co-operative Societies Act, 1935, the rules and the bye-law made thereunder, shall apply as if all references to the society or its committee in the said provisions, rules and bye-law were references to the bank.

1. (3) Where a bank has obtained a decree or award against a co-operative society indebted to it, the bank may proceed to recover such moneys firstly, from the assets of the co-operative society and 9/11 secondly, from the members of the cooperative society to the extent of their debts due to the society. 24. Audit, inspection and inquiry reports of societies to be available to banks. - The Registrar of the Co-operative Societies shall draw the attention of the bank financing a co-operative society to the financial irregularities and defects noticed in an audit or inquiry or inspection of such society conducted according to the provisions of the Bihar and Orissa Co-operative Societies Act, 1935 and shall also supply a copy of such audit, inquiry or inspection report it demanded, in writing by the bank.