Chapter VII STATE AID TO CO-OPERATIVE SOCIETIES

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44. Financial partnership or aid of the Government

Statutory text

(1) Notwithstanding anything contained in any law for the time being in force, the Government may, -
- (a) subscribe directly to the share capital of a co-operative society;
- (b) subject to the appropriate bye-laws, provide moneys to an apex society for purchase of shares in other co-operative societies, subjects to the condition that no such shares in any co-operative society shall be purchased except with the previous approval of the Government in each case;
- (c) give loan or make advances to co-operative societies;
- (d) guarantee the repayment of principal and payment of interest on debentures issued by a co-operative society;
- (e) guarantee the repayment of share capital of co-operative society and dividends thereon, at such rates as may be specified by the Government;
- (f) guarantee the repayment of principal and payment of interest on loans and advances to a co-operative society;
- (g) give financial assistance in any other form, including subsidies, to any co-operative society: Provided that liability in respect of any shares purchased with Government money either directly by the Government or through any other co-operative society shall, in the event of its being wound up, be limited to the amount paid in respect of such shares: 52[ Provided further that the Government shall not hold more than twenty-five percent of the total share capital of a short term co-operative credit structure society and such society or the Government shall have option to further reduce the Government's share capital.]
(2) Notwithstanding any agreement to the contrary, the Government shall not be entitled to a dividend or interest on shares of any such co-operative society at a rate higher than that at which such dividend or interest is payable to any other shareholder of the society.

Chapter VII STATE AID TO CO-OPERATIVE SOCIETIES

45. Principal and Subsidiary State Partnership Funds

Statutory text

(1) An apex society, which is provided with moneys by the Government under clause (b) of sub-section (1) of section 44 shall, with such moneys, establish a fund to be called the 'Principal State Partnership Fund' and shall utilise it for the purpose of -
- (a) directly purchasing shares in other co-operative societies;
- (b) providing moneys to a central co-operative society to enable that society to purchase shares in primary co-operative societies;
- (c) making payment to the Government in accordance with the provisions of this chapter; and for no other purpose.
(2) A central society, which is provided with moneys by an apex society from the Principal State Partnership Fund under clause (b) of sub section (1) shall with such moneys, establish a fund to be called the 'Subsidiary State Partnership Fund' and utilise it 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 : Provided that any amount to the credit of either principal or subsidiary state partnership funds shall not form part of the assets of an apex or a central society respectively and in the event of such societies being wound up, all moneys to the credit of or payable to the Principal State Partnership Fund shall be credited to the Government, whereas moneys to the credit of or payable to the Subsidiary State Partnership Fund shall be credited to the Principal State Partnership Fund.

Chapter VII STATE AID TO CO-OPERATIVE SOCIETIES

46. Indemnity of apex and central societies

Statutory text

(1) If a co-operative society in which shares are purchased from 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 co-operative society in which shares are purchased from 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 such 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.

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