The Maharashtra Cooperative Societies Act 1960

Chapter: V - STATE AID TO SOCIETIES

Section 50 to 63

Section 50 - Direct partnership of State Government in societies

The State Government may subscribe directly to the share capital of a society with limited liability, upon such terms and conditions as may be agreed upon.

Section 51 - Indirect partnership of State Government in societies

The State Government may, under appropriation made by law, provide moneys to a 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".)

Section 52 - Principal State Partnership Fund

(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 (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 payments to the State Government in accordance with the provisions of this Chapter;
and for no other purpose.

Section 53 - Subsidiary State Partnership Fund

(1) A Central Society which is provided with moneys by an Apex Society from the Principal State partnership Funds 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.

Section 54 - Approval of State Government for purchase of shares

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.

Section 55 - Liability to be limited in respect of certain shares

Where any shares are purchased in a society by--
(a) the State Government; or
(b) an Apex society from the Principal State Partnership Fund, or a Central society from the Subsidiary State Partnership Fund, as the case may be;
the liability in respect of such shares shall, in the event of the society of which the shares are purchased 1 [being wound up], be limited to the amount paid in respect of such shares.

Footnote:
1. These words were substituted for the words "is wound up", by Mah. 33 of 1963. s. 11.

Section 56 - Restriction on amount of dividend

An Apex society which has purchased shares in other societies from the moneys in the Principal State Partnership Fund, and a Central society which has purchased shares in Primary societies from the moneys in the Subsidiary State Partnership Fund, shall be entitled only to such dividend on the said shares as is declared by the society concerned and is payable to other shareholders of that society.

Section 57 - Indemnity of Apex and Central societies

(1) If a society in which shares are purchased from the Principal State Partnership Fund is wound up, or is dissolved, the State 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 State 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 society in which shares are purchased from the Subsidiary State Partnership Fund is wound up or dissolved, neither the State Government nor the Apex society shall have any claim against the Central society which purchased the 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.

Section 58 - Disposal of share capital and dividend, etc.

(1) All moneys received by an Apex society in respect of shares of other societies purchased from the moneys in the Principal State Partnership Fund on redemption of such shares, or by way of dividends or otherwise, shall be credited to that fund.

(2) All moneys received by a Central society in respect of shares of Primary societies purchased from the moneys in the Subsidiary State Partnership Fund on redemption of such shares, or by way of dividends or otherwise, shall in the first instance be credited to that Fund, and then transferred to the Apex society which shall credit them to the Principal State Partnership Fund.

(3) All moneys and dividends referred to in sub-sections (1) and (2) shall, notwithstanding that the shares stand in the name of the Apex society or the Central society, as the case may be, be paid to the State Government.

(4) Save as provided in sub-section (3), the State Government shall not be entitled to any other return on the moneys provided by it to an Apex society under section 51.

Section 59 - Disposal of Principal or Subsidiary State Partnership Fund on winding up of Apex or Central society

(1) If an Apex society which has established a Principal State Partnership Fund is wound up or dissolved, all money to the credit of, or payable to that Fund, shall be paid to the State Government.

(2) If a Central society which has established a Subsidiary State Partnership Fund is wound up or is dissolved, all moneys to the credit of, or payable to that Fund shall be paid and credited to the Principal State Partnership Fund from which it received moneys under clause (b) of sub-section (2) of section 52.

Section 60 - Principal or Subsidiary State Partnership Fund not to form part of assets

Any amount to the credit of a Principal State Partnership Fund or a Subsidiary State Partnership Fund shall not form part of the assets of the Apex society or the Central society, as the case may be.

Section 61 - Agreement by State Government and Apex societies

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 purpose specified in clause (b) of sub-section (2) of section 52.

Section 62 - Other forms of State aid to societies

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 shares capital of a society to its members, or the payment of dividends thereon at such rates as may be specified by the State Government;
(c) guarantee the repayment of loans given by a Co-operative Bank to a society;
(d) guarantee the repayment of the principal of, 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.

Section 63 - Provisions of this Chapter to override other laws

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

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