Chapter V PRIVILEGES OF CO-OPERATIVE SOCIETIES

The registration of a co-operative society shall render it a body corporate by the name under which it is registered having perpetual succession and a common seal, and with power to hold property, enter into contract, institute and defend suits and other legal proceedings and to do all things necessary for the purposes for which it is constituted.

(1) Notwithstanding anything contained in any law for the time being in force, but subject to any prior claim of the Government in respect of land revenue or any money recoverable as land revenue, any debt or outstanding demand owing to a co-operative society by any member or past member or deceased member shall be a first charge upon the crops and other agricultural produce, cattle, fodder for cattle, agricultural or industrial implements or machinery, raw materials for manufacture and any finished products manufactured from such raw materials, belonging to such member, past member or forming part of the estate of the deceased member as the case may be. (2) No person shall transfer any property which is subject to a charge under sub-section (1) except with the previous permission in writing of the co-operative society which holds the charge. (3) Notwithstanding anything contained in any law for the time being in force, any transfer of property made in contravention of the provisions of sub-section (2) shall be void. (4) The charge created under sub-section (1) shall be available as against any claim of the Government arising from a loan granted under the Land Improvement Loans Act, 1883 (19 of 1883 ), or the Agriculturists Loans Act, 1884 (12 of 1884), after the grant of the loan by the society.

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 society of which he is a member for a loan shall, if he owns any land or has interest in any land as a tenant, make a declaration in the prescribed form, which shall state that the applicant thereby creates a charge on such land or interest specified in the declaration 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 him 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) any person who has borrowed a loan from a society of which he is a member before the date of the coming into force of this Act, and who owns land or has any interest in land as a tenant shall, as soon as possible, make a declaration in the form and to the effect referred to in clause (i); (iii) a declaration made under clause (i) or clause (ii) may be varied at any time by a member with the consent of the society in favour of which such charge is created ; (iv) no member shall alienate the whole or any part of the land or interest therein specified in the declaration made under clause (i) or clause (ii) until the whole amount borrowed by the member together with interest thereon is paid in full: Provided that for the purpose of paying in full to the society the whole amount borrowed by the member together with interest thereon, the member may, with the previous permission in writing of the society and subject to such conditions as the society may impose, alienate the whole or any part of such land or interest therein: Provided further that standing crops on any such land may be alienated with the previous permission of the society; (v) any alienation made in contravention of the provisions of clause (iv) shall be void. (vi) subject to the prior claims of the Government in respect of land revenue or any money recoverable as land revenue, there shall be a first charge in favour of the society on the land or interest specified in the declaration made under clause (i) or clause (ii) for and to the extent of the dues owing by him on account of the loan and advances; (vii) the record of rights shall also include the particulars of every charge on land or interest created under a declaration under clause (i) or clause (ii) notwithstanding anything contained in section 31 of the Punjab Land Revenue Act, 1887. EXPLANATION :- For the purpose of this section, society shall mean any co-operative society or class of co-operative societies specified in this behalf by the Government by a general or special order.

A co-operative society shall have a charge upon the share of contribution or interest in the capital and on the deposits of a member or past member or deceased mamber and upon any dividend, bonus or profits payable to a member or past member or the estate of a deceased member in respect of any debt due from such member or past member or the estate of such deceased member to the society, and may set off any sum credited or payable to a member or past member or the estate of deceased member in or towards payment of any such debt.

Subject to the provisions of section 33, the share or contribution or interest of a member or past member or deceased member in the capital of a co-operative society shall not be liable to attachment or sale under any decree or order of any court in respect of any debt or liability incurred by such member, and a receiver under the Provincial Insolvency Act, 1920 (V of 1920 ), shall not be entitled to or have any claim on such share or contribution or interest.

Any register or list of members or shares kept by any co-operative society shall be prima facie evidence of any of the following particulars entered therein - (a) the date on which any person entered in such register or list became a member : and (b) the date on which any such person ceased to be member.

(1) A copy of any entry in a book of co-operative society regularly kept in the course of its business, shall, if certified in such manner as may be prescribed, be received in any suit or legal proceedings as prima facie evidence of the existence of such entry, and shall be admitted as evidence of the matters, transactions and accounts therein recorded in every case where, and to the same extent as, the original entry itself is admissible. (2) No officer of a co-operative society and no officer in whose office the books of a co-operative society are deposited after liquidation shall in any legal proceedings to which the society or the liquidator is not a party, be compelled to produce any of the society’s books or documents the contents of which can be proved under this section, or to appear as a witness to prove the matters, transactions and accounts therein recorded, except under order of the court or the arbitrator made for special cause.

Nothing in clauses (b) and (c) of sub-section (1) of section 17 of the Indian Registration Act, 1908 (XVI of 1908), shall apply to- (1) any instrument relating to shares in a co-operative society notwithstanding that assets of the society consist in whole or in part of immovable property; or (2) any debenture issued by any such society and not creating, declaring, assigning, limiting or extinguishing any right, title or interest to or in immovable property, except in so far as it entitles the holder thereof to the security afforded by a registered instrument whereby the society has mortgaged, conveyed, or

(1) The Central Government may by notification in the Official Gazette, remit the income-tax payable in respect of the profits of any class of co-operative societies or the dividends or other payments received by members of any class or such societies on account of profits. (2) The Government may, by notification remit in respect of any class of co-operative societies— (a) the stamp duty chargeable under any law for the time being in force in respect of any instrument executed by or on behalf of a co-operative society or by an officer or member thereof and relating to the business of such society, or any class of such instruments or in respect of any award or order made under this Act, in cases, where, but for such remission the co-operatiave society officer or member, as the case may be, would be liable to pay such stamp duty; and (b) any fee payable under any law for the time being in force relating to the registration of documents or court fees. Explanation:- In this sub-section 'Government' means in relation to stamp duty in respect of bills of exchange, cheques, promissory notes, bills of lading, letters of credit, policies of insurance, transfer of shares, debentures, proxies and receipts, the Central Government and save as aforesaid the Government. (3) The Government may, by notification, exempt any class of co-operative societies from— (a) land revenue; (b) taxes on agricultural income; (c) taxes on sale or purchase of goods; and (d) taxes on professions, trades, callings and employments.

(1) Notwithstanding anything contained in any law for the time being in force , a member of a co-operative society may execute an agreement in favour of the society providing that his employer shall be competent to deduct from the salary or wages payable to him by the employer, such amount as may be specified in the agreement and to pay the amount so deducted to the society in satisfaction of any debt or other demand owing by the member to the society. (2) On the execution of such agreement, the employer shall, if so required by the co-operative society by a requisition in writing and so long as the society does not intimate that the whole of such debt or demand has been paid, make the deduction in accordance with the agreement and pay the amount so deducted to the society, as if it were a part of the salary or wages payable on the day as required under the Payment of Wages Act, 1936 (IV of 1936). Such payment shall be valid discharge of the employer for his liability to pay the amount deducted. (3) If after the receipt of a requisition made under sub-section (2), the employer at any time fails to deduct the amount specified in the requisition from the salary or wages payable to the member concerned or makes default in remitting the amount deducted to the society, the society shall be entitled to recover any such amount from the employer as arrears of land revenue and the amount so due from the employer shall rank in priority in respect of the liability of the employer equal to that of the wages in arrears.

Notwithstanding anything contained in any law for the time being in force, the Government may- (a) subscribe to the share capital of a co-operative society; (b) give loans or make advances to co-operative society; (c) guarantee the repayment of principal and payment of interest on debentures issued by a co-operative society; (d) guarantee the repayment of the share capital of a co-operative society and dividends thereon at such rates as may be specified by the Government; (e) guarantee the repayment of principal and payment of interest on loans and advances to a co-operative society; and (f) give financial assistance in any other form, including subsidies, to any co-operative society.