Chapter V STATE AID TO SOCIETIES

The State Government may, under appropriation make bye-law, provide moneys to society for the purchase directly or indirectly of shares in other societies with limited liability, (A society to which moneys are so provided for the aforesaid purpose is hereinafter in this Chapter referred to as an ‘Apex Society”).

(1) An Apex Society which is provided with moneys as aforesaid shall, with such moneys, establish a, Fund to be called the “Principal State Partnership Fund”. (2) An Apex Society shall utilise the Principal State Partnership Fund for the purpose of—(a) directly purchasing shares in other societies with limited liability ; (b) providing moneys to a, Society to enable that society (hereinafter in this Chapter referred to as a “Central Society”) to purchase shares in other societies with limited liability (the latter societies being hereinafter in this Chapter referred to as ‘Primary Societies”). (c) making payable to the State Government in accordance with the provisions of this Chapter ; and for no other purpose.

(1) A Central Society which is provided with money 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 utilise the Subsidiary State Partnership Fund for the purpose of —(a) purchasing shares in Primary societies ; (b) making payments to the Apex Society in accordance with the provisions of this Chapter ; and for no other purpose.

Shares shall not be purchased in a society from the moneys in the Principal State Partnership Fund or the Subsidiary State Partnership Fund, except with the previous approval of the State Government.

Where any shares are purchased in a society by—(a) the State Government ; or (b) an Apex Society from the Principal State or a, Central Society from the Subsidiary State Partnership Fund, as the case may be ;

Subject to the foregoing provisions of this Chapter— (a) the State 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 51. (b) an Apex society may, with the previous approval of the State 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 purp08e specified in clause (b) of sub-section (2) of section 52.

Notwithstanding anything contained in any law for the time being in force, but subject to such conditions as the State Government by general or special order may specify in this behalf, the State Government may— (a) give loans to a society ; (b) guarantee the payment of the principal of debentures issued by a. society, or of interest thereon, or both, or the repayment of the share capital of the society to its member ; or the payment of dividend thereon at such rate as may be Specified by the State ; (c) guarantee the repayment of loans given by a. Co—operative Bank to a society ; (d) guarantee the repayment of the principal, and payment of interest on, loans and advances given by the Reserve Bank of India, or the Industrial Finance Corporation of india, or any other authority constituted under any law for the time being in force ; or (e) provide financial assistance, in any other form (including subsidies), to a society.

The provisions of sections 51 to 61 (both inclusive) in this Chapter shall have efl‘ect notwithstanding anything inconsistent therewith contain in any other law for the time being in force.