The Maharashtra Cooperative Societies Act 1960

Chapter: IV - INCORPORATION DUTIES AND PRIVILEGES OF SOCIETIES

Section 36 to 49

Section 36 - Societies to be bodies corporate

The registration of a society shall render it a body corporate by the name under which it is registered, with perpetual succession and a common seal, and with power to acquit, hold and dispose of property, to enter into contracts, to institute and defend suits and other legal proceedings and to do all such things as are necessary for the purpose for which it is constituted.

Section 37 - Address of societies

Every society shall have an address, registered in accordance with the rules, to which all notices and communications may be sent; and the society shall send notice in writing to the Registrar of any change in the said address, within thirty days thereof.

Section 38 - Register of members

(1) Every society shall keep a register of its members and enter therein the following particulars, that is to say,--
(a) the name, address and occupation of each member;
(b) in the case of a society having share capital, the share held by each member;
(c) the date on which each person was admitted a member;
(d) the date on which any person ceased to be a member; and
(e) such other particulars as may be prescribed:
Provided that, where a society has by or under this Act, permitted a member to transfer his share or interest on death to any person, the register shall also show against the member concerned the name of the person entitled to the share or interest of the member, and the date on which the nomination was recorded.

(2) The register shall be prima facie evidence of the date on which any person was admitted to membership, and of the date on which he ceased to be a member.

Section 39 - Copy of Act, etc. to be open to inspection

Every society shall keep, at the registered address of the society, a copy of this Act and the rules and of its by-laws, and a list of members, open to inspection to the public, free of charge, during office hours or any hours fixed by the society therefor.

Section 40 - Admissibility of copy of entry or evidence

(1) A copy of any entry in any book, register or list, regularly kept in the course of business and in the possession of a society, shall, if duly certified in such manner as may be prescribed, be admissible in evidence of the existence of the entry, and shall be admitted as evidence of the matters and transactions therein recorded in every case where, and to the same extent to which, the original entry would, if produced, have been admissible to prove such matters.

(2) In the case of such societies, as the State Government may by general or special order direct, no officer of a society shall in any legal proceedings to which the society is not a party, be compelled to produce any of the society's books, the contents of which can be proved under the foregoing sub-section, or to appear as a witness to prove the matters, transactions and accounts therein recorded, unless by order of the Court or a Judge made for special cause.

Section 41 - Exemption from compulsory registration of instruments relating to shares and debentures of societies

Nothing in clauses (b) and (c) of sub-section (I) of section 17 of the Indian Registration Act, 1908, shall apply--
(a) to any instrument relating to shares in a society, notwithstanding that the assets of the society consist in whole or in part of immovable property; or

(b) to any debentures issued by any 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 to the security afforded by a registered instrument whereby the society has mortgaged, conveyed or otherwise transferred the whole or part of its immovable property, or any interest therein to trustees upon trust for the benefit of the holders of such debentures; or

(c) to any endorsement upon, or transfer of, any debentures issued by any society.

Section 42 - Power to exempt from taxation 1 [power to refund]

2 (1) The State Government, by notification in the Official Gazette may, in the case of any society or class of societies, 3 [reduce or remit, whether prospectively or retrospectively, in the whole of the State or any part thereof)--
(a)the stamp duty with which, under any law relating to stamp duty for the time being in force, instruments executed by or on behalf of a society or by an officer or member thereof and relating to the business of the society, or any class of such instruments, or awards of the Registrar 4 [or Co-operative Court] under this Act, are respectively chargeable,
(b)any fee payable by or on behalf of a society under the law relating to the registration of documents and to court-fees, for the time being in force, and
(c)any other tax or fee or duty (or any portion thereof) payable by or on behalf of a society under any law for the time being in force, which the State Government is competent to levy.

5 (2) The State Government may refund the amount of any tax, fee or duty paid in pursuance of any law referred to in sub-section (1) in such circumstances, to such extent and subject to such terms and conditions, if any, as the State Government may by order determine.

Footnote:
1. These words were added by Mah. 40 of 1972, s. 2(3).
2. Section 42 was renumbered assub-section (1)andsub-section (2)was added byMah. 40 of 1972, s. 2(1) and (2).
3. These words were substituted for "remit", by Mah. 20 of 1986, s. 2(1).
4. These words were substituted for the words "or his nominee or board of nominees" by Mah. 3 of 1974, s. 8.
5. Section 42 was renumbered assub-section (1)andsub-section (2) was added by Mah, 40 of 1972, s. 2(1) and (2).

Section 43 - Restrictions on borrowings

1 (1) A society shall receive deposits and loans from members and other persons, only to such extent, and under such conditions, as may be prescribed, or specified by the bylaws of the society.

1 (2) If in the opinion of the Registrar it is necessary so to do for ensuring safety of the funds obtained under sub -section ( 1), for proper utilisation of such funds in furtherance of the objects of the society or societies concerned and for keeping them within the borrowing limits as laid down in the rules and by-laws, the Registrar may, by general or special order, impose additional conditions on any society or class of societies, subject to which and the extent up to which such society or such class or societies may receive deposits, issue debentures or raise loans from any creditor other than a Central Bank.

2 [Provided that, nothing in this sub-section shall apply to a society which has not taken any financial assistance from the Government in the form of share capital, loan or guarantee and such society may, adopt its own borrowing policy having regard to its financial position. However, such society shall send to the Registrar, in writing, full details about its borrowing policy, and change, if any introduced in such policy at any time.]

Footnote:
1. Section 43 was renumbered as sub -section ( 1) and sub -section ( 2) was added by Mah. 33 of 1963, s. 8.
2. This provison was added by Mah. 34 of 2001, (w.e.f. 7 - 9 - 2001) s. 4.

Section 44 - Regulation of loan making policy

(1) No society shall make a loan to any person other than a member, or on the security of its own shares, or on the security of any person who is not a member:
Provided that, with the special sanction of the Registrar, a society may make loans to another society.

(2) Notwithstanding anything contained in the foregoing sub-section, a society may make a loan to a depositor on the security of his deposit.

(3) If in the opinion of the State Government, it is necessary in the interest of the society or societies concerned to do so, the State Government may, by general or special order, prohibit, restrict or regulate the lending of money by any society or class of societies on the security of any property:
1 Provided that, the Registrar may, for ensuring safety of the funds of the society or societies concerned, for proper utilisation of such funds in furtherance of their objects and for keeping them within the loan making limits laid down in the rules and bye-laws, with the approval of the Apex Bank, by general or special order, regulate further the extent, conditions and manner of making loans by any societies to its members or other societies.

Footnote:
1. This provison was added, by Mah. 33 of 1963, s. 9.

1 Section 44A - Limit on interest in certain cases

Not with standing anything contained in any agreement or any law for the time being in force, a society (including a co-operative bank but excluding 2 [an Agriculture and Rural Development Bank] shall not for any loan (including rehabilitation loan but excluding long-term loan for irrigation or agricultural development purposes or loan exceeding rupees three thousand for non-agricultural or commercial purposes) given by it to any member (including a member-society) for a period not exceeding15 years, whether the loan was given before or is given after the commencement of the Maharashtra Cooperative Societies (Second Amendment) Act, 1985,recover, in any manner whatsoever, on account of interest, a sum greater than the amount of the principal of the loan.]

Footnote:
1. Section 44A was substituted by Mah. 20 of 1986 s. 19.
2. Substitutedby Mah. 10 of 1988, s.8

Section 45 - Restrictions on other transactions with non members

Save as is provided in this Act, the transactions of a society with persons other than members, shall be subject to such restrictions, if any, as may be prescribed.

Section 46 - Charge and set-off in respect of share or interest of members

A society shall have a charge upon the share 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 any such member, in respect of any debt due from such member or his estate to the society; and the society may set-off any sum credited or payable to such member in or towards payment of any such debt:
Provided that, no co-operative bank shall have a charge upon any sum invested with it by a society out of the provident fund established by it under section 71, or its reserve fund; and no co-operative bank shall be entitled to set off any such sum towards any debts due from the society.

Section 47 - Prior claim of society

(1) Notwithstanding anything in any other law for the time being in force, but subject to any prior claim of Government in respect of land revenue or any money recoverable as land revenue and to the provisions of sections 60 and 61 of the Code of Civil Procedure, 1908.
(a) any debt or outstanding demand, owing to a society by any member or past member or deceased member, shall be a first charge,--
(i) upon the crops or other agricultural produce raised in whole or in part whether with or without a loan taken from the society by such member or past member or deceased member,--
(ii) upon any cattle, fodder for cattle, agricultural or industrial implements or machinery, or raw materials for manufacture, or workshop, godown or place of business supplied, to or purchased by such member or past member or deceased member, in whole or in part, from any loan whether in money or goods made to him by the society, and
(iii) upon any movable property which may have been hypothecated, pledged or otherwise mortgaged by a member with the society, and remaining in his custody;

(b) any outstanding demands or dues payable to a society by any member or past member or deceased member, in respect of rent, shares, loans or purchase money or any other rights or amounts payable to such society, shall be a first charge upon his interest in the immovable property of the society,
Explanation.--The prior claim of Government in respect of dues other than land revenue, shall be restricted for the purpose of sub-section (1) to the assets created by a member out of the funds in respect of which the Government has a claim.

(2) No property or interest in property, which is subject to a charge under the foregoing sub-section, shall be transferred in any manner without the previous permission of the society; and such transfer shall be subject to such conditions, if any, as the society may impose.

(3) Any transfer made in contravention of sub-section (2) shall be void.

(4) Notwithstanding anything contained in sub-sections (2) and (3), a society, which has as one of its objects the disposal of the produce of its members, may provide in its bylaws, or may otherwise contract with its members,--
(a) that every such member shall dispose of his produce through the society, and
(b) that any member, who is found guilty of a breach of the by-laws or of any such contract, shall reimburse the society for any loss, determined in such manner as may be specified in the by-laws.

Section 48 - Charge on immovable property of members borrowing from certain societies

Notwithstanding anything contained in this Act or in any other law for the time being in force,--
(a) 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 form prescribed. Such declaration 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 such member,subject to such maximum as may be determined by the society, together with interest on such amount of the loan and advances;

(b)any person who has taken 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 any land or has interest in land as a tenant, and who has not already made such a declaration before the a foresaid date shall,as soon as possible thereafter, make a declaration in the form and to the effect referred to in clause (a); and no such person shall, unless and until he has made such declaration, be entitled to exercise any right, as a member of the society;

(c)a declaration made under clause (a) or (b) may be varied at any time by a member, with the consent of the society in favour of which such charge is created;

(d)no member shall alienate the whole or any part of the land or interest therein, specified in the declaration made under clause(a) or (b) until the whole amount borrowed by the member together with interest thereon, is repaid in full:
Provided that, it shall be lawful to a member to execute a mortgage bond 1 [in respect of such land or any part thereof in favour of 2 [an agriculture and Rural Development Bank or of the State Government] under the Bombay Canal Rules made under the Bombay Irrigation Act,1879 3 or under any corresponding law for the time being in force for the supply of water from a canal to such land, or to any part thereof:
Provided further that, if a part of the amount borrowed by a member is paid 4 [the society with the approval of the Central Bank to which it may be indebted] may, on an application from the member, release from the charge created under the declaration made under clause (a) or (b), such part of the movable or immovable property specified in the said declaration, as it may deem proper, with due regard to the security of the balance of the amount remaining outstanding from the member;

(e) any alienation made in contravention of the provisions of clause (d)shall be void;

(f) 5 [Subject to all claims of the Government in respect of land revenue or any money recoverable as land revenue, and all claims of the 6 [Agriculture and Rural Development Bank] in respect of its dues, in either case whether prior in time or subsequent,] and to the charge (if any) created under an award made under the Bombay Agricultural Debtors Relife Act,1947 or any corresponding law for the time being in force in any part of the State, there shall be a first charge in favour of the society on the land or interest specified in the declaration made under clause (a) or (b),for and to extent of the dues owing 7 [by the member] on account of the loan.

(g) and in particular, notwithstanding anything contained in 8 [Chapter X of the Maharashtra Land Revenue Code,1966], the Record of Rights maintained there under shall also include the particulars of every charge on land or interest created under a declaration under clause (a)or (b), 9 [and also the particulars of extinction of such charge.]

Explanation.--For the purposes of this section, the expression "society"means--
(i)any resource society, the majority of the members of which are agriculturists and the primary object of which is to obtain credit for its members, or
(ii)any society, or any society of the class of societies, specified in this behalfby the State Government, by a general or special order.

Footnote:
1. These words were substituted for the words "in favour of a mortgage bank or the State Government inrespect of such land or any part thereof," by Mah. 33 of 1963, s. 10(a)(i)
2. These words were substituted for the words "a Land Development Bank" by Mah. 10 of 1988, s. 9(a).
3. See now Maharashtra Irrigation Act, 1976 (Mah. 38 of 1976).
4. These words were substituted for the words "the Central Financing Agency", by Mah. 33 of 1963,s. 10(a)(ii).
5. These words were substituted for the portion beginning with "subject to" and ending with "inrespect of its dues." by Mah. 12 of 1966, s. 2(a).
6. These words were substituted for the words "Land Development Bank" by Mah. 10 of 1988, s. 9(b).
7. These words were substituted for the words "by him", byMah. 12 of 1966, s. 2(b).
8. These words and figureswere substituted for the words, figures and letter,"Chapter XA of the Bombay Land Revenue Code, 1879 or any corresponding lawfor the time being in force," by Mah. 20 of 1986, s. 20(a).
9. These words were added,by Mah. 20 of 1986, s. 20(b).

1 Section 48A - Deductions from sale price of certain agricultural produce to meet society's dues

2 [(1) Where a loan has been advanced by any society in accordance with the last preceding section for the growing of any agricultural produce, or has been advanced by any other society which is 3 [an Agriculture and Rural Development Bank] for any of the purposes enumerated in clause(a) of section 111 and if in either case any agricultural produce is tendered by the person who has taken any such loan] for sale at a collection centre under section 30A of the Maharashtra Agricultural Produce Marketing(Regulation) Act, 1963, on any day then the price agreed to be paid thereof shall be paid by the purchaser to the tenderer after deducting the dues of 4 [the societies mentioned] aforesaid 5 [* * * * *] and the amount so deducted shall be paid to the Market Committee constituted under that Act as provided in that section. On making payment tothe tenderer and the Market Committee in the manner provided in the aforementioned section 30A the purchaser shall be discharged of his liability to pay the price to the tenderer.

6 [The amount of the deduction on account of loans advanced by societies shall 7 [be made at such rate as may be notified by the State Government in this behalf by general or special order, so,however, that such rate shall] not in the aggregate exceed the following percentage of the total amount to be paid by the purchaser as the price, namely:--
(i) if the produce tendered for sale is sugarcane 100 %
(ii) if the produce tendered for sale is 8 [cotton] 60 % (iii) in any other case 40 %.]

(2) The Market Committee on receiving the amount from the purchaser shall arrange to pay 9 [to the societies concerned] the amount of dues from the tenderer within a reasonable time to be prescribed for the purpose. If the Market Committee does not pay such dues within 8 days, after the realisation of the cheque the Market Committee shall be liable to pay interest on such dues 6 [to the societies concerned] at a rate prescribed in this behalf, such rate not being in excess of the maximum rate of interest fixed for unsecured loans under the Bombay Money- lenders Act,1946.]

10 [(3) Where any such purchases is the State Government or an agent or officer appointed by that Government, or is a processing factory notified by the State Government in this behalf by general or special order or an agent or officer appointed by such factory, the purchaser shall pay the price to the tenderer after deducting the dues of the societies mentioned aforesaid and pay the amount so deducted on behalf of the tenderer to the concerned societies direct:
Provided that, where loans have been taken by the tenderer from more than one society, the purchaser may, keeping in view the extent of the dues, on account of financing of crop or seasonal finance or finance for other agricultural purposes, repayable during a period of not less than eighteen months and not more than five years and the extent of the dues of any 11 [Agriculture and Rural Land Development Bank] and subject to such directions (if any) as may be issued by the State Government from time to time determine the proportion in which the amount of deduction madeshall beapportioned between the different lending societies.]

12 [Explanation.--For the purpose of this section, "purchaser" shall include any person who pays the purchase price of any agricultural produce tendered for sale, or by whom payment of such price is made, whether on his own account or as an agent or on behalf of another person.]

Footnote:
1. This section was inserted by Mah. 2of 1972,s. 12.
2. This portion was substituted by Mah. 44of 1973s. 2(a)(i).
3. These words were substituted for the words "a Land Development Bank"by Mah. 10 of 1988,s. 10(a).
4. These words were substituted for the words"the co-operative societymentioned", by Mah. 44of 1973,s. 2(a)(ii)
5. The words "and to the extent hereinafter stated" were deleted by Mah. 50of 1977,s. 3(a)(i).
6. This portion was substituted by Mah. 44of 1973,s. 2(a)(iii).
7. These words were inserted by Mah. 50of 1977,s. 3(a)(ii).
8. This word was substituted for the word "kapas",by Mah. 50of 1977,s. 3(a)(ii).
9. These words were substituted for the words "to the society", by Mah. 44of 1973,s. 2(b).
10. Sub-section (3)was added, Mah. 44of 1973,s. 2(c).
11. These words were substituted were the words "a Land Development Bank" by Mah. 10of 1988,s. 10(b).
12. This Explanation was added by Mah. 50of 1977,s. 3(b).

Section 49 - Deduction from salary to meet Society's claim in certain cases

1 (1) A member of a society may execute an agreement in favour of the society, providing that his employer shall be competent to deduct from the or wages payable to him by the employer, such total amount payable to the society and in such instalments as may be specified in the agreement and to pay to the society the amounts so deducted in satisfaction of any debt or other demand of the society against the member. A copy of such agreement duly attested by an officer of the society shall be forwarded by the society to the employer.

(2) 2 [On receipt of a copy of such agreement], the employer shall, if so required by the society by a requisition in writing, and so long as the 3 [total amount shown in the copy of the agreement as payable to the society has been deducted and paid to the society,] 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 wages payable by him as required under the Payment of Wages Act,1936 on the day on which he makes payment.

(3) If after the receipt of a requisition made under the foregoing sub-section,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 employer shall be personally liable for the 4 (payment of such amount or where the employer has made deductions but the amount so deducted is not remitted to the society, then such amount together with interest thereon at one and half times the rate of interest charged by the society to the member for the period commencing on the date on which the amount was due to be paid to the society and ending on the date of actually remitting it to the society; and such amount together with the interest thereon, if any, shall,on a certificate issued by the Registrar, be recoverable from him as an arrear of land revenue, and the amount and interest so due shall rank in priority in respect of such liability of the employer as wages in arrears.]

(4) Nothing contained in this section shall apply to persons employed in any railways (within the meaning of the Constitution) and in mines and oil fields.

Footnote:
1. Sub-section(I) was substituted by Mah. 20 of 1986, s.21(a).
2. These words were substituted for the words "on the execution of such agreement", by Mah. 20 of 1986, s. 21(b)(i).
3. These words were substituted for the words "society does not intimate that the whole of such debt ordemand has been paid", by Mah. 20 of 1986, s. 21(b)(ii).
4. This portion wass ubstituted for the portion beginning with the words "payment thereof and ending withthe words "wages in arrears", by Mah. 20 of 1986, s. 21(c).

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