Chapter 1
Chapter 2
Chapter 3
Chapter 4
Chapter 5
Chapter 6
Chapter 7
Chapter 8
Chapter 9
Chapter 10
Chapter 11
Chapter 12
Privileges of Cooperative Societies

35. Cooperative society to be body corporate.
  1. 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.
36. First charge of co-operative society on certain assets.
  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 cooperative 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 the 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, or the Agriculturist’s Loan Act; 1884; after the grant of the loan by the society.
37. Charge on immovable property of members borrowing loans from certain societies.

Not withstanding anything contained if this Act or in any other law for the time being in force.
  1. 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 tenant, make a declaration in the prescribed from 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.
     
  2. any person who has borrowed a loan from a society of which is a member before the date of the coming into force of this Act, and who owns any land or has any interest in land a tenant shall; as soon as possible, make a declaration in the form and to the effect referred to in clause (i).
     
  3. 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 flavor of which such charge is created.

  4. 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) may be varied at any time a by a member 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 or interest thereon.

Provided further that standing crops on any such land may be alienated with the previous permission of the society
  1. any alienation made in contravention of the provision of clause (iv) shall be void.

  2. 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 favor 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 loans and advances.

  3. 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 any law relating to land revenue for the time being in force.

  4. any sum due to a society in consequence of charge created under a declaration under clause (i) or clause (ii) shall, on application for its recover being made by such society accompanied by a certificate signed by the Registrar, be recoverable by the Collector, according to the law and under the rules for the time being in force for the recover of land revenue.

Explanation – For the purposes of this section, “society” shall mean any co-operative society or class of co-operative societies specified in this behalf by the Lieutenant-Governor by general or special order.

38. Charge and set-off in respect of share or contribution or interest of members.

A co-operative society shall have a charge upon the share or contribution or interest in the capital and on the deposits of a member or past member or deceased member 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.


39. Share of contribution or interest not liable to attachment.

Subject to the provisions of section 38, the share or contribution or interest of a member or past member or deceased member in the capital of 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 Provisional Insolvency Act. 1920 shall not be entitled to or have any claim on such share or contribution or interest.

40. Register of members.
  1. Any register or list of members or shares kept by any co-operative society shall be prima facie evidence of any of following particulars entered therein -
  2.  
    1. the date of which any person entered in such register or list became a member.

    2. the date on which any such person ceased to be a member.
41. Admissibility of copy of entry as evidence.
  1. A copy of any entry in a book of a cooperative 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 cooperative 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.
42. Exemption from compulsory registration of instruments.

Nothing in clause (b) and (c) of sub-section (1) of section 17 of the Indian Registration Act, 1908 shall apply to -
  1. Any instrument relating to shares in a co-operative society notwithstanding that the 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 afford red by a registered instrument whereby the society has mortgaged, conveyed, or otherwise transferred the whole or part of the its immovable property or any interest therein to trustees upon trust for the benefit of the holders of such debentures; or

  3. An endorsement upon or transfer of any debenture issued by any such society.

43. Exemption from certain taxes, fees and duties.

  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 of such societies on account of profits.

  2. The Central Government may, by notification in the official Gazette, remit in respect of any class of co-operative societies -

    1. 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 instrument or in respect of any award or order made under this Act, in cases, where, but for such remission the co-operative society, officer or member, as the case may be, would be liable to pay such stamp duty.

    2. Any fee payable under any law for the time being in force relating to the registration of documents or court, fee.

    3. The Central Government may, by notification, exempt any class of co-operative societies form -

      1. land revenue

      2. taxes on agricultural income

      3. taxes on sale or purchase of goods and

      4. taxes on professions, trades callings and employments.

    44. Deduction from salary to meet cooperative society’s claim in certain cases.

    1. Notwithstanding anything contained in any law for the time being in force, a member of a cooperative society may execute an agreement in favor 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 of 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 initiate 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 is required under the Payment of Wages Act, 1936. Such payment shall be valid discharge of the employer for his liability to pay the amount deducted.

    3. Where a requisition in writing from any society registered or deemed to be registered in any reciprocating State in respect of a member of that society, who has executed any such agreement as is referred to in sub-section (1) and who for the time being is employed in the Union territory of Delhi, is received by his employer, the requisition shall be acted upon as if it had been made by a society in Delhi and the provisions of this section shall have effect accordingly.

Explanation : – For the purpose of this sub-section “reciprocating State” mean any State of Union territory which the Lieutenant-governor may, by notification in the Delhi Gazette, declare, to be reciprocating State.

    1. If after the receipt of a requisition made under sub-section (2) or sub-section (3), the employer at anytime 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 a that of the wages in arrears.

    2. Nothing contained in this section shall apply to establishment under a railway administration operating any railway as defined in clause (20) of article 366 of the Constitution.

    45. Other forms of State aid to co-operative societies.

    Not withstanding anything contained in any law for the time being in force, the Central Government may -
    1. Subscribe to be share capital of a co-operative society.

    2. Give loans or make advances to co-operative societies.

    3. Guarantee the repayment of principal and payment of interest on debentures issued by a co-operative society.

    4. Guarantee the repayment of share capital of a co-operative society and dividends thereon at such rates as may be specified by the Central Government.

    5. 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.

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Last Updated : 23 Mar,2014