Chapter IV INCORPORATION, DUTIES AND PRIVILEGES OF SOCIETIES

A society on its registration shall be a body corporate by the name under which it is registered, with perpetual succession and a common seal, and with power to acquire, hold and dispose of property, both moveable and immoveable, to enter into contracts, to institute and defend suits and other legal proceedings, and to do all such things as are necessary for the purpose for which it is incorporated.

Every society shall have an address, registered in accordance with the rules, to which all notices and communications may be sent and the society shall send notice in writing to the Registrar of any change in the said address, within a period of thirty days thereof.

1. (1) Every society shall keep a register of members, and enter therein the following particulars, namely:—
   • (a) the name, address and occupation of each member;
   • (b) in the case of a society having share capital, the share held by each member;
   • (c) the date on which each person was admitted as a member;
   • (d) the date on which any person ceased to be a member; and
   • (e) such other particulars as may be prescribed: Provided that where a society has by or under this Regulation, permitted a member to transfer his share or interest on death to any person, the register shall also show against the member concerned the name of the person entitled to the share or interest of the member, and the date on which the nomination was recorded.
2. (2) The register shall be prima facie evidence of the date on which any person was admitted to membership, and of the date on which he ceased to be a member.

Every society shall keep, at the registered address of the society, a copy of this Regulation, the rules and bye-laws, and a list of members open to inspection to the public, free of cost, during office hours or any hours fixed by the society therefor.

1. (1) A copy of any entry in any book, register or list, regularly kept in the course of business and in the possession of a society shall, if duly certified in such manner as may be prescribed, be admissible in evidence of the existence of the entry, the matters and transactions therein recorded in every case where, and to the same extent to which, the original entry would, if produced, have been admissible to prove such matter.
2. (2) In the case of such societies as the Administrator may by general or special order in writing direct, no officer of a society shall in any legal proceedings to which the society is not a party, be compelled to produce any of the society’s books, the contents of which may be proved under sub-section (1) or to appear as a witness to prove the matters, transactions and accounts therein recorded, except by order of the court or a Judge made for special cause.

Nothing contained in clauses (b) and (c) of sub-section (1) of section 17 of the Registration Act, 1908 shall, apply—

1. (a) to any instrument relating to shares in a society not being a housing society notwithstanding that the assets of the society consist in whole or in part of immovable property; or
2. (b) to any debenture issued by any 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 for the benefit of the holders of such debentures; or
3. (c) to any endorsement upon, or transfer of, any debenture issued by any society.

Power to exempt from taxation [Section text not available in the official gazette publication.]

1. (1) A society shall receive deposits and loans from members and other persons, only to such extent, and under such conditions, as may be prescribed, or specified by the bye-laws of the society: Provided that the total amount of deposits and loans received during any financial year shall not exceed such multiples as may be determined by the Administrator of the sum of subscribed share capital and accumulated reserves minus accumulated losses.
2. (2) If in the opinion of the Registrar, it is necessary so to do for ensuring safety of the funds obtained under sub-section (1), for proper utilisation of such funds in furtherance of the objects of the society or societies concerned and for keeping them within the borrowing limits as laid down in the rules and bye-laws, the Registrar may, by general or special order in writing, impose additional conditions on any society or class of societies, subject to which and the extent up to which such society or such class of societies may receive deposits, issue debentures or raise loans from any creditor other than a

Restrictions on giving loans

1. (1) No society shall give a loan to any person other than a member, or

on the security of its own shares, or on the security of any person who is not a

member:

Provided that subject to such rules as may be made in this behalf , a society

may give loans to another society.

1. (2) Notwithstanding anything contained in sub-section (1) , a societ y may

give a loan to a depositor on the security of his deposit.

1. (3) Notwithstanding anything contained in this Regulation, no person or

group of persons other than a member or members shall be eligible to borrow

from or make deposit in a Primary Agricultural Credit Co-operative Society.

1. (4) If in the opinion of the Administrator, it is necessary or expedient so to

do in the interest of the society or societies concerned, the Administrator may,

by general or special order in writing, prohibit, restrict or regulate the lending of money by any society or class of societies on the security of any property:

Provided that the Registrar may, for ensuring safety of the funds of the

society or societies concerned, for proper utilisation of such funds in furtherance of their objects and for keeping them within the loan making limits laid down in

societies to its members or other societies.

Save as provided in this Regulation, the transactions of a society with

persons other than members, shall be subject to such restrictions, if any, as may be prescribed.

In respect of any debt due to a society by any member thereof, the society shall have a charge upon the share or interest of such member in the capital of the society, upon the deposits of such member with the society and upon any dividend, rebate or profits payable to such member and the society may set off any sum credited or payable to such member in or towards the payment of any such debt: Provided that no co-operative bank shall have a charge upon any sum invested with it by a society out of the provident fund referred to in section 64, and no co-operative bank shall be entitled to set off any such sum towards any debts due from the society.

1. (1) Notwithstanding anything contained in any other law for the time being in force in the Union territory, but subject to any prior claim of the Administration in respect of land revenue or any money recoverable as land revenue and subject to the provisions of sections 60 and 61 of the Code of Civil Procedure, 1908,—
   • (a) any debt or outstanding demand, owing to a society by any member or a person who has ceased to be a member shall be a first charge upon—
     • (i) the crops or other agricultural produce raised in whole or in part whether with or without a loan taken from the society by him;
     • (ii) cattle, fodder for cattle, agricultural or industrial implements or machinery, or raw materials for manufacture, or workshop, godown or place of business, supplied to, or purchased by him in whole or in part, from any loan whether in money or goods made to him by the society; and
     • (iii) any movable property which has been hypothecated, pledged or otherwise mortgaged by him with the society, and remaining in his custody;
   • (b) any outstanding demands or dues payable to a society by any member or a person who has ceased to be a member, in respect of rent, shares, loans or purchase, money or any other rights or amounts payable to such society, shall be a first charge upon his interest in the immovable property of the society: Provided that the prior claim of the Administration in respect of dues other than land revenue, shall be restricted for the purpose of this sub-section to the assets created by a member out of the funds in respect of which the Administration has a claim.
2. (2) No property or interest in property, which is subject to a charge under sub-section (1) shall be transferred in any manner without the previous permission of the society and such transfer shall be subject to such conditions, if any, as the society may impose.
3. (3) Any transfer made in contravention of sub-section (2) shall be void.
4. (4) Notwithstanding anything contained in sub-sections (2) and (3), a society, while disposal of the produce of its members, may provide in its bye-laws, or may otherwise contract with its members,—
   • (a) that every such member shall dispose of his produce through the society; and
   • (b) that any member, who is found guilty of a breach of the bye-laws or of any such contract, shall reimburse the society for any resultant loss, determined in such manner as may be provided in the bye-laws.

1. (1) Notwithstanding anything contained in this Regulation or in any other law for the time being in force in the Union territory,—
   • (a) any person who makes an application to a society of which he is a member, for a loan shall, if he owns any land or has interest in any land as a tenant, make a declaration in the prescribed form, which shall state that the applicant thereby creates a charge on such land or interest specified in the declaration for the payment of the amount of the loan which the society may make to the member in pursuance of the application, and for all future advances, if any, required by him which the society may make to him as such member, subject to such maximum as may be determined by the society, together with interest on such amount of the loan and advances;
   • (b) any person who has taken a loan from a society of which he is a member, before the date of the coming into force of this Regulation, and who owns any land or has interest in land as a tenant, and who has not already made such a declaration before the aforesaid date shall, as soon as possible thereafter, make a declaration in the form and to the effect referred to in clause (a) and no such person shall, unless and until he has made such declaration, be entitled to exercise any right as a member of the society;
   • (c) a declaration made under clause (a) or clause (b) may be varied at any time by a member, with the consent of the society in favour of which such charge is created;
   • (d) no member shall alienate the whole or any part of the land or interest therein, specified in the declaration made under clause (a) or clause (b) until the whole amount borrowed by the member together with interest thereon, is repaid in full: Provided that it shall be lawful for a member to execute a mortgage bond in favour of the Administration in respect of such land or any part thereof, under the law for the time being in force in the Union territory, for the supply of water from a canal to such land: Provided further that if a part of the amount borrowed by a member is paid, the society may, on an application from the member, release from the charge created under the declaration made under clause (a) or clause (b) such part of the movable or immovable property specified in the declaration, as it may deem proper, with due regard to the adequacy of the security for the balance of the amount remaining due from or outstanding against the member;
   • (e) any alienation made in contravention of the provisions of clause (d) shall be void;
   • (f) subject to the prior claims of the Administration in respect of land revenue or any money recoverable as land revenue, and to the charge, if any created under an award made under the law for the time being in force in any part of the Union territory: Provided that notwithstanding anything contained in the Land Revenue Code or any other law for the time being in force in the Union territory, the Record of Rights maintained thereunder shall also include the particulars of every charge on land or interest created under a declaration under clause (a) or clause (b).
2. (2) For the purposes of this section, the expression “society” means—
   • (i) any society, the majority of which are agriculturists and the primary object of which is to obtain credit for its members; or
   • (ii) any society, or any class of societies, specified in this behalf by the Administration by a general or special order.

1. (1) A member of a society may execute an agreement in favour of the society, providing that his employer shall be competent to deduct from the salary or wages payable to him by the employer, such amount as may be specified in the agreement, and to pay to the society the amount so deducted in satisfaction of any debt or other demand of the society against the member.
2. (2) On the execution of the agreement referred to in sub-section (1), the employer shall, if by a requisition in writing so required by the society and so long as the society does not inform that the whole of such debt or demand has been paid, make the deduction in accordance with the agreement, notwithstanding anything to the contrary contained in the relevant law for the time being in force in the Union territory and pay the amount so deducted to the society, within a period of fourteen days from the date on which such deduction is made as if it were a part of the wages payable by him as required under the said Act on the day on which he makes payment and in making such deduction and payment, it shall not be open to the employer to question the validity or otherwise of such debt or demand.
3. (3) If, after receipt of a requisition made under sub-section (2), the employer at any time fails to deduct the amount specified in the requisition from the salary or wages payable to the member concerned, or makes default in remitting the amount deducted to the society, such employer shall be personally liable for the payment thereof and the amount shall be recoverable on behalf of the society from him as an arrear of land revenue on a certificate being issued by the Registrar after holding such inquiry as he deems fit, and the amount so due shall rank in priority in respect of such liability of the employer as wages in arrears and a certificate so issued by the Registrar shall not be questioned in any court.
4. (4) Nothing contained in this section shall apply to persons employed in any railway within the meaning of the Constitution and in mines and oil fields.