Deduction from sale proceeds of agricultural produce in certain cases

(1) Notwithstanding anything contained in any law for the time being in force, an applicant for a loan from a primary bank may execute an agreement in favour of that bank providing that it shall be lawful for the marketing co-operative societies or the Commodity Boards through which the agricultural produce belonging to the applicant is marketed, to deduct such amount as may be specified in the agreement from the sale proceeds of such agricultural produce marketed through such co-operative societies or boards and to pay the amounts so deducted to such primary bank in satisfaction of any debt or other demand due by the applicant to that bank.

Explanation.—For the purpose of this section, "Commodity Boards" means the Coffee Board established under the Coffee Act, 1942 (Central Act 7 of 1942), the Tea Board established under the Tea Act, 1953 (Central Act 29 of 1953), the Rubber Board constituted under the Rubber Act, 1947 (Central Act 24 of 1947), the Cardamom Board established under the Cardamom Act, 1965 (Central Act 42 of 1965), and the Coconut Development Board established under the Coconut Development Board Act, 1979 (Central Act 5 of 1979).

(2) On execution of an agreement as provided in sub-section (1), the marketing co-operative society or Commodity Board referred to in that sub-section shall, on a requisition in writing by the primary bank and so long as such debt or demand or any part of it remains unpaid, make a deduction, in accordance with the requisition, from the sale proceeds of the agricultural produce belonging to the applicant and marketed through them and pay the amounts so deducted to the primary bank within seven days from the date of deduction.

(3) Any payment made by a marketing co-operative society or Commodity Board under sub-section (2) shall be valid and effectual against any demand upon such society or board by any person.