Power of bank to proceed against defaulting members of a co-operative 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 money due by them, the bank may direct the committee of such society to proceed against such members by taking all such actions as are provided by the Co-operative Societies Act.

(2) If the committee of the co-operative society fails to proceed against its defaulting members within a period of ninety days from the date of receipt of such direction from the bank, the bank itself may, under intimation to the Registrar, proceed against such defaulting members in which event, the provisions of the Co-operative Societies Act and the rules and the bye-laws made thereunder shall apply, as if all references to the society or its committee in the said provisions, rules and bye-laws were reference to the bank.

(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 secondly from the members of the co-operative society to the extent of their debts due to the society.

Explanation.—In this Act "committee", in relation to a co-operative society, means a committee as defined in clause (5) of section 2 of the Co-operative Societies Act.