Charge on land, owned by members or held as tenants by members borrowing loans from certain co-operative societies

(1) Notwithstanding anything contained in this Act or in any other law for the time being in force,— (i) any person who makes an application to a co-operative society of which he is a member for a loan shall, if he owns any land, or holds any land as a tenant make a declaration in the prescribed form. Such declaration shall state that the applicant thereby creates a charge on the land owned by him or on his interest in the land held by him as tenant and specified therein 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 the member 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; (ii) a declaration made under clause (i) may be varied at any time by a member with the consent of the co-operative society in favour of which such charge is created; (iii) no member shall alienate the whole or any part of the land or any interest of his in the land specified in the declaration made under clause (i) or varied under clause (ii) until the whole amount borrowed by the member together with interest thereon is paid in full: Provided that standing crops on any such land may be alienated with the previous permission in writing of the society; Provided further that it shall be lawful for a member to mortgage such lands or any part thereof in favour of the State Government or an Agricultural and Rural Development Bank: Provided also that if a part of the amount borrowed by a member is paid, the co-operative society with the approval of the financing bank to which it may be indebted may, on an application from the member, release from the charge created by the declaration made under clause (i) or varied under clause (ii), such part of the land or of the interest in the land specified in the declaration as it may deem proper, with due regard to the security for the balance of the amount of loan outstanding from the member. (iv) any alienation made in contravention of the provisions of clause (iii) shall be void; (v) subject to the prior claims of the Government in respect of land revenue or any money recoverable as land revenue and the prior claims of any person in whose favour alienation of the land or interest in such land has been effected and duly registered, before the date of the grant of the loan by the society, there shall be a first charge in favour of the society on the land or interest in the land specified in the declaration made under clause (i) or varied under clause (ii) for and to the extent of the dues owing by him on account of the loan. (2) Notwithstanding anything contained in the Karnataka Land Revenue Act, 1964 (Karnataka Act 12 of 1964),— (i) the record of rights maintained under the said Act shall also include the particulars of every charge on land or interest in land created under sub-section (1); (ii) the co-operative society in whose favour a charge is created under sub-section (1) shall communicate the particulars of the charge, and when the loan is discharged, the cessation of the charge, to the Deputy Commissioner or the prescribed officer and he shall cause necessary entries to be made in the record of rights; (iii) the State Government may, by notification in the official Gazette, make rules to carry out the purposes of clauses (i) and (ii). Explanation.—For the purpose of this section,— (1) ‘land’ shall mean land to which the Karnataka Land Revenue Act, 1964 (Karnataka Act 12 of 1964), is applicable; and (2) ‘co-operative society’ shall mean a co-operative society of which majority of the members are agriculturists and which is,— (a) a credit society the primary object of which is to obtain credit for its members; or (b) any other class of society specified in this behalf by the State Government by general or special order.