Chapter VI Chapter VI

(1)The Government may subscribe directly to the share capital of a society with limited liability (2)Notwithstanding any agreement to the contrary, the Government shall not be entitled to a dividend on the shares of any such society at a rate higher than that at which such dividend is payable to any other share holder of the society.

The Government may provide moneys to a society for the purchase of shares in other societies with limited liability.

(1)An apex society which is provided with moneys by the Government under section 43 shall, with such moneys, establish a fund to be called the ‘Principal State Partnership Fund’. (2)An apex society shall utilize the Principal State Partnership Fund for the purpose of— (a) directly purchasing shares in other societies with limited liability; or (b)providing moneys to a central society to enable that society to purchase shares in other societies with limited liability (hereinafter in this Chapter referred to as primary societies); or (c)making payments to the Government in accordance with the provisions of this Chapter, and for no other purpose.

(1)A central society which is provided with moneys by an apex society from the Principal State Partnership Fund shall, with such moneys, establish a fund to be called the ‘Subsidiary State Partnership Fund’. (2)A central society shall utilize the Subsidiary State Partnership Fund for the purpose of— (a)purchasing shares in primary societies; or (b)making payments to the apex society in accordance with the provisions of this Chapter, and for no other purpose.

No shares in a society shall be purchased from the moneys in the Principal State Partnership Fund or the Subsidiary State Partnership Fund except with the previous approval in writing of the Government.

Where any shares in a society are purchased by— (a)the Government; or (b)the apex society or a central society from the Principal State Partnership Fund or the Subsidiary State Partnership Fund, as the case may be, the liability in respect of such shares shall, in the event of the society being wound up, be limited to the amount paid in respect of such shares.

An apex society which has purchased shares in other societies from the moneys in the Principal State Partnership Fund and a central society which has purchased shares in primary societies from the moneys in the Subsidiary State Partnership Fund shall be entitled only to such dividend on the said shares as is declared by the society concerned and is payable to other share holders of that society.

(1)If a society in which shares are purchased from the moneys in the Principal State Partnership Fund is wound up or is dissolved, the Government shall not have any claim against the apex society which purchased the shares in respect of any loss arising from such purchase; but the Government shall be entitled to any moneys received by the apex society in liquidation proceedings or on dissolution, as the case may be. (2)If a society in which shares are purchased from the money in the Subsidiary State Partnership Fund is wound up or is dissolved neither the Government nor the apex society shall have any claim against the central society which purchased the shares in respect of any loss arising from such purchase; but the apex society shall be entitled to any moneys received by the central society in liquidation proceedings or on dissolution, as the case may be, and such moneys shall be credited to the Principal State Partnership Fund.

(1)All moneys received by an apex society in respect of shares of other societies purchased from moneys in the Principal State Partnership Fund on redemption of such share or by way of dividends or otherwise shall be credited to that Fund. (2)All moneys received by a central society in respect of shares of primary societies purchased from the moneys in the Subsidiary State Partnership Fund on redemption of such shares or by way of dividends or otherwise, shall in the first instance be credited to that fund and then transferred to the apex society which shall credit them to the Principal State Partnership Fund. (3)All moneys referred to in sub-section (1) or sub-section (2) shall, notwithstanding that the shares stand in the name of the apex society or in the central society, as the case may be, be paid to the Government. (4)Save as provided in sub-section (3), the Government shall not be entitled to any other return on the moneys provided by it to an apex society under section 43. (5)Any amount to the credit of the Principal State Partnership Fund or the Subsidiary State Partnership Fund and the investments thereof shall not form part of the assets or liabilities of the apex society or central society, as the case may be. The balance sheet of any such society shall separately show the amounts to the credit of the Principal State Partnership Fund or the Subsidiary State Partnership Fund or the investments thereof, as the case may be.

(1)If an apex society which has established a Principal State Partnership Fund is wound up or is dissolved, all moneys to the credit of, or payable to, that fund shall be paid to the Government. (2)If a central society which has established a Subsidiary State Partnership Fund is wound up or is dissolved, all moneys to the credit of, or payable to, that fund shall be credited or paid, as the case may be, to the Principal State Partnership Fund from which it received moneys under clause (b) of sub-section (2) of section 44.

Subject to the foregoing provisions of this Chapter,- (a)the Government may enter into an agreement with an apex society setting out the terms and conditions on which it shall provide moneys to the apex society for the purpose specified in section 43; (b)an apex society may, with the previous approval of the Government, enter into an agreement with a central society, setting out the terms and conditions on which it shall provide moneys to that society from the Principal State Partnership Fund for the purpose specified in clause (b) of sub-section (2) of section 44.

Notwithstanding anything contained in any law for the time being in force, the Government may- (a)give loans or make advances to societies; (b)guarantee the repayment of principal and payment of interest on debentures issued by a society; (c)guarantee the repayment of share capital of a society and dividends thereon at such rates as may be specified by the Government; (d)guarantee the repayment of principal and payment of interest on loans and advances to a society; (e)guarantee the repayment of deposits received by the society and payment of interest on such deposits; and (f)give financial assistance in any other form, including subsidies, to any society; (g)set off any amount due to Government out of the financial assistances given under this section, in which case the gross amount of assistance before set off shall be treated as the original amount of assistance: Provided that the Government may exempt any society, in eligible cases considering its financial position, from setting off Government dues.

The provisions of sections 43 to 52 shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force.