Chapter V FINANCING OF CO-OPERATIVE SOCIETIES BY BANKS

Notwithstanding anything contained in the Himachal Pradesh Co-operative Societies Act, 1968 (3 of 1969), 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.

Notwithstanding anything contained in the Himachal Pradesh Co-operative Societies Act, 1968 (3 of 1969), it shall be lawful for any co-operative society to borrow from a bank.

(1) A bank shall have the right to inspect the books 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. (2) The inspection 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 the Registrar of Co-operative Societies. (3) The officer or any other member of the paid staff of the bank undertaking such inspection, shall, at all reasonable times, 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 financial condition of the society and the safety of financial assistance to be made to the society or already made to it.

(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 cooperative society and the co-operative society so financed other than disputes 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. (2) Where any question arises whether, for purposes of the foregoing sub-section, 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.

(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 19, the Registrar shall decide the dispute himself or refer it for disposal to a nominee or a board of nominees appointed by him. (2) Where any dispute is referred under the foregoing sub-section for decision to the Registrar's nominee or board of nominees, the Registrar may at any time, for reasons to be recorded in writing, withdraw such dispute from his nominee or board of nominees and may decide the dispute himself or refer it again for decision to any other nominee or board of nominees appointed by him. (3) Notwithstanding anything contained in section 19, the Registrar may, if he thinks fit, suspend proceedings in regard to any dispute if 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 tried by 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 shall take action as is provided in sub- section (1).

The Registrar or his nominee or board of nominee's hearing a dispute under the last preceding, section shall hear the dispute in the manner that may be prescribed by the Registrar in this behalf.

When the dispute is referred for decision, the Registrar or his nominee or the board of nominees may, after giving a reasonable opportunity to the parties to the dispute to be heard, make an award on the dispute, on the expenses incurred by the parties to the dispute in connection with the proceedings and fees, expenses payable to the Registrar or his nominee or, as the case may be, to the board of nominees. Such an 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, subject to appeal or review or revision by the co-operative tribunal of the State, be binding on the parties to the dispute.

Every award given by the Registrar or the Registrar's nominee or the board of nominees under section 22, shall, if not carried out, on a certificate signed by the Registrar, be deemed to be a decree of a civil court and shall be executed in the same manner as a decree of such court.

(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 by them, the bank may direct the committee of such society to proceed against such members by taking action under the Himachal Pradesh Co-operative Societies Act, 1968 (3 of 1969). (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 proceed against such defaulting members in which event, the provisions of the Himachal Pradesh Co-operative Societies Act 1968 (3 of 1969), 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 references 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 money 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.

The Registrar of Co-operative Societies shall draw the attention of the bank financing a co-operative society to the defects noticed in every audit, inquiry or inspection of such society conducted as per provisions of the Himachal Pradesh Co-operative Societies Act, 1968 (3 of 1969), and shall also supply a copy each of such audit, inquiry or inspection report if demanded, in writing by the bank.