INCORPORATION, DUTIES AND PRIVILEGES OF SOCIETIES
31.
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Procedure for change of address
of societies:-
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(1)
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Every
society shall communicate in
writing to the Registrar its postal address as indicated in its by-laws
registered under the Act and wherever applicable mention the name of the
district, Taluka, tahsil, town or village, municipal ward or mohalla, street,
house number and postal circle. While communicating the postal address of the
society, the committee of the society shall also send a copy of a resolution
passed by it for adoption of the address communicated to the Registrar.
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(2)
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On receipt of the communication from the society under sub-rule (1),
the Registrar shall register the address communicated by the society in a
register to be maintained for that purpose and inform the society of such
registration.
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(3)
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Every change in its registered address shall be communicated by the
society to the Registrar in the manner laid down in sub-rule (1). Any such
change shall not be treated as registered unless,
—
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(i)
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it is indicated in the by-laws by amending them and the amendment so
made is registered under the Act, and
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(ii)
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the change is registered in the manner laid down in sub-rule (2).
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(4)
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The registered address of a society or such change therein as may be
registered, from time to time, shall be exhibited on the notice board of the
society, immediately after registration.
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32.
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Register of Members:-
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The register of members to be kept by every society under sub section (1) of Section 38
shall be in Form ‘I’.
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33.
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List of Members:-
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The list of Members to be kept by every society under Section 39 shall be in Form ‘J’
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34.
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Certified
copies of entries in books of societies:-
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For the purposes of Section
40, copies of any entries referred to in that section may be certified by any
officer of the society duly authorised in that behalf by the committee under
the seal of the society.
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35.
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Conditions
for borrowing by societies with limited liability: -
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(1)
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No society other than
those referred in Rules 36 and 37 with limited liability shall, without the
previous sanction of the Registrar, incur liability exceeding in total ten
times the total amount of its paid up share capital, accumulated reserve fund
and building fund minus accumulated losses :
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Provided
that central banks, urban banks and producers' societies shall not except
with the previous sanction of the Registrar, incur liabilities exceeding
twelve times the total of their paid up share capital, accumulated reserve
fund and building fund minus accumulated losses.
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Explanation: — In calculating the total amount
of liability for the purposes of this
sub-rule, in the case of any society or class of societies the by-laws of
which permit borrowing or granting credit facilities on the pledge of
agricultural produce or other goods specified in that behalf by the
Registrar, by general or special order, a sum equal to the amount borrowed by
such society or class of societies, on the security of agricultural produce
or other goods of such society or its members, shall be excluded from the
amount of the actual liability under this rule.
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(2)
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Any society may incur liabilities in excess of the limit specified
in sub-rule (1) by receiving deposits or borrowing loans subject to the condition that
the amount received as deposits or borrowed as loans in excess of the said
limit shall not be utilised in the business of the society but shall be
invested in Government securities which, in the case of Central Banks, shall
be deposited with the Maharashtra State Co-operative Bank and, in case of
other co-operative banks, with the Central Banks. No society shall borrow
against such securities.
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36.
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Conditions for
borrowing of Maharashtra
State Co-operative Bank:-
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Except with
the previous sanction of the Registrar, the Maharashtra State Co-operative
Bank Limited shall now incur liabilities exceeding in total fifteen times the
total amount of its paid up share capital, and all reserves minus accumulated
losses, actual bad debts, if any, and overdue interest:
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Provided
that the Bank may incur liabilities in excess of the aforesaid limit by receiving
deposits or borrowing loans subject to the condition that the amount received
as deposits or borrowed as loans in excess of the said limit shall not be
utilised in the business of the bank but shall be invested in Government
securities which shall be deposited with the Reserve Bank of India. The bank
shall not borrow against such securities.
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Explanation: — In calculating the total amount
of liability for the purposes of this
rule, a sum equal to the amount borrowed by the Bank on the security of
agricultural produce or other goods of the members of the bank shall be
excluded from the amount of the actual liability under this rule.
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37.
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Conditions
for borrowing of Land Development Banks:-
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Land Development Banks
may incur liabilities not exceeding in total twenty times the total amount of
their paid up share capital, accumulated reserve and building funds minus
accumulated losses.
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38.
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Loans and deposits from non-members
in unlimited liability
societies:-
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Every
society with unlimited liability shall, from time to time, fix in a general
meeting the maximum liability which it may incur in loans and in deposits
from non-members. The maximum so fixed shall be subject to the sanction of
the Registrar, who may at any time reduce it, for reasons to be communicated
by him to the society in writing, and may specify
a period not being less than four months, within which the society shall
comply with his orders. No such society shall receive any loan or deposit
from a non-member, which will make its liability to non-members exceed the
limit sanctioned by the Registrar.
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39.
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Raising of
funds by societies:-
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Every
society, which has a share capital, shall provide in the by-laws the maximum amount of such share
capital, the number of shares into which it is divided, the class of shares,
the face value of each share of each class and the rights and liabilities
attaching to each class of shares and where the full amount of the share is
not payable on allotment, the amount and the number of installments in which
it is required to be paid and such other incidental matters.
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(1)
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Any society, which is authorised under its by-laws to raise funds by
the issue of debentures and bonds, may, with the prior sanction of the
Registrar, frame regulations regarding the maximum amount to be raised by the
issue of debentures and bonds, the class or classes of debentures and bonds,
the face value of each debenture or bond, the date on which the debentures or
bonds are to be redeemed, the rate at which interest is payable, the terms
and conditions regarding transfer of debentures and bonds and other
incidental matters.
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(2)
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The total amount of debentures and bonds issued at any time together
with the other liabilities incurred by the society shall not exceed the
maximum amount which the society can borrow under the provisions of Rule 35,
36, 37 or 38, as the case may be, and its by-laws.
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40.
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Additional conditions for raising funds by societies:-
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The Registrar may, by general
or special order, lay down such additional conditions as he deems fit,
subject to which and the extent up to which any society or class of societies
may receive deposits, issue debentures or raise loans from any creditor other
than a Central Bank.
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41.
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Maintenance of liquid resources and distribution of assets:-
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Every society which
obtains any portion of its working capital by deposits shall,—
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(1)
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maintain such liquid resources and in such form as may be specified
from time to time by the Registrar, and
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(2)
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utilise only such portion of its working capital in lending business
and distribute its assets in accordance with such standards as may be
specified from time to time by the Registrar.
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42.
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Regulation of loans to be granted by societies:-
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(1)
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In case of grant of loans against
security of moveable or immovable property, the lending society shall
maintain such margin as the Registrar may, with the approval of the Apex
Bank, by general or special order, direct from time to time with reference to
different commodities, securities or classes of societies.
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(2)
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In case of cash credit, the amount of loan shall not exceed such
multiple of owned funds of the borrowing society as may be laid down by the
Registrar with the approval of concerned financing agency from time to time.
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(3)
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It shall be
lawful for a
society to grant
loans without taking
security of moveable or
immovable property if the purpose for which the loan given is considered
production- worthy or creditworthy and it is reasonably expected that the
loans will be repaid by the loanee. The Registrar may, with the approval of
the Apex Bank, issue directions to societies to ensure that creditworthy
purposes indicated above receive finance from the societies without any
difficulties on the one hand and without being detrimental to the financial
interest of the societies on the other.
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(4)
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The
Registrar may recognise a Central Bank as the Central Financing Agency which
shall be primarily responsible for financing credit requirements of all
creditworthy purposes through the concerned societies in its jurisdiction. On
such recognition, such Bank shall be responsible for making all possible
efforts to mobilise local resources for making loans available to the
societies in its area. Such loans may be granted for creditworthy purposes,
giving due importance to the production plans and requirements of various
stati s of the producers and co-operative societies with reference to linking
up of credit with cooperative processing or co-operative marketing.
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(5)
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Except with the general or special permission of the Registrar, the
loan advanced to a member by a society, or to a society by a bank, shall be
subject to such conditions as may be laid down by the Registrar, with the
approval of the Apex Bank, including the maximum amount to be advanced and
the period of repayment, both in regard to total advances to members and
societies as also against different types of securities.
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(6)
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No society shall carry on transactions on credit or sanction trade
credit to its members or to non-members except in accordance with the general
directions that may be issued by the Registrar in that behalf.
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(7)
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In the matter of grant of loans to societies by Central Banks or to
members by Primary Societies, the Registrar may lay down with the approval of
the Central Banks, the procedure regarding receiving applications, assessing
credit needs, making inquiries in respect of the production programme for which
such loan is required and the procedure for finally sanctioning the loan as
also the rates of finance to be followed from year to year and the nature of
inquiries to be made for the purpose of financing of different crops and
imposition of certain conditions regarding proper utilisation of loan and
sale of agricultural produce through specified co-operative organisation,
before such finance is granted.
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(8)
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The Registrar may with the approval of the Apex Bank, by general or
special order, prohibit or regulate grant of loans by a Central Bank or a
society where such grant is considered neither in
the interest of the society nor in the interest of the development of
co-operative movement on sound lines.
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43.
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Conditions to be complied with by members applying for loans: -
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(1)
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Every member
of a society applying for a loan from the society shall be required to hold
shares in such manner and in such proportion to the amount of loan applied
for by him as may be specified in the by-laws of the society.
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(2)
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Subject to
the maximum limit specified in the by-laws, a loan to be granted to a member
of a resource society and the period of its repayment shall be in accordance
with the standard laid down by the Registrar in consultation with the Central
Bank and the Federal Society. A loan in excess of the maximum amount may be
granted to a member with the previous sanction of the Central Bank and the
Federal Society to which the society is affiliated :
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Provided
that where the amount of the loan exceeds twice the maximum limit contained
in the by-laws, prior sanction of the Registrar shall also be obtained.
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44.
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Credit
limits by non-credit societies:-
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(1)
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No society
whose objects do not include
grant of loan or financial accommodation to its members shall grant loans or
sanction credit to any member without the sanction of the Registrar:
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Provided
that any society which has, as one of its objects, supply of goods or
services required by members for production purposes, may supply goods or
provide services on credit against sufficient security on condition that the
cost of the goods supplied or services provided shall be recoverable from the
amount of the sale proceeds of the agricultural produce or other goods
produced by the member.
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(2)
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A consumer society may sell goods on credit to its members and other
customers up to the extent of deposits received from them.
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45.
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Restrictions
on borrowing from more than one credit society:-
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(1)
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Every person who is a
member of more than one resource society (other than a Land Development Bank
or a Central Bank or a marketing society) dispensing credit shall, if he has
not already made, make a declaration in Form that he will borrow only from
one such society to be mentioned in the declaration and shall send a copy of
such declaration duly attested to all societies of which he is or has become
a member.
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(2)
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Any person who continues to be a member of more than one such society
without complying with the provision of this rule shall be liable to be
removed from the membership of any or all such societies upon receiving a
written requisition from
the Registrar to that effect:
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Provided
that the society from which a person has borrowed may permit him to borrow
from any other society of which he is a member to such extent and subject to
such conditions as may be laid down by it.
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(3)
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The
Registrar may, for reasons to be recorded in writing, exempt any person or
persons from the operation of this rule or prohibit any person or persons
from borrowing from more than one society, notwithstanding that permission of
the society under proviso to sub-rule (2) has been obtained by him.
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45A.
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Limits on
loans against fixed deposits: -
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(1)
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When a
society makes a loan to a depositor on the security of his fixed deposit with the
society, the amount of loan shall not exceed 90 per cent of the deposit
amount and the period for which the loan is granted shall not extend beyond
the date of maturity of the fixed deposit.
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(2)
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If the depositor does not repay the loan within the period for which
it is granted, the fixed deposit amount may be adjusted towards the repayment
of the loan amount and the interest thereon, and only the balance, if any,
shall be paid by the society to the depositor on the date of maturity.
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46.
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Manner of recalling of loan:-
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Notwithstanding anything contained in the agreement entered into with the borrowing member, the committee
of a society shall be entitled, after giving a week's notice to such member,
to recall the entire loan amount immediately, when it is satisfied that the
loan given has not been applied for the purpose for which it was given or
there has been breach of any of the conditions for grant of such loan.
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(1)
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Nothing in
this rule shall be deemed to preclude the Registrar from directing the
society to recall a loan of his own motion, when it is brought to his notice
that the loan given by the society has been misapplied or conditions thereof
have not been followed. The Registrar may make in the matter such inquiries
as he may deem necessary and after giving a show cause notice to the society
issue with the prior approval of the co-operative bank financing the society,
necessary directions to the society. The directions issued by the Registrar
in this respect shall be complied with by the society.
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46A
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Restrictions
on borrowings from non-members:-
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No society
shall receive or raise loans from non-members
(including any banking company other than the Central Bank), unless specially
authorised by the Registrar and such non-member from whom any loan is
received or raised, gives an undertaking to the society that any dispute
arising out of the transaction shall be referred to the Registrar for
decision under Section 91.
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46B
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Restrictions
on credit sales to non-members:-
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Where the
by-laws of a society
permit credit sales, such sales may be made to traders and other non-members
provided that the person to whom such sales are made gives an undertaking to
the society that any dispute arising out of the transactions shall be
referred to the Registrar for decision under Section 91.
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47.
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Restrictions
on transactions with non-members: —
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On the
application of a member of any
society or of his own motion, when it appears to the Registrar that it is
necessary in the interest of the working of any particular society to
regulate or restrict transactions of such society with any non-member, the
Registrar shall, after giving an opportunity to the society of being heard,
issue such directions as he may consider necessary regulating or restricting
such transactions.
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48.
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Form of
declarations be made by members borrowing loans from certain societies and
conditions on which any charge in favour of a society shall be satisfied:-
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(1)
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A
declaration to be made under clauses (a) and (b) of Section 48 shall be in Form 'L'.
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(2)
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A register
of such declarations shall be kept by the society in Form 'M'.
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(3)
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A charge on any immovable property created by a member in favour of a
society for amounts borrowed or likely to be borrowed by him, from time to
time, shall, subject to the provisions of clauses (c) and (d) of Section 48
continue in force till the person creating the charge ceases to be a member
of the society.
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(4)
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Where a member of a society creates a charge on his land or on his
interest in any land as a tenant by declaration under Section 48, the society
may, if compelled to make use of such property for the recovery of the loan
granted to such member against the security of such property or interest in
the property, utilise the whole or any portion of such property which may be
sufficient to satisfy the amount due with interest and any incidental
expenses incurred in that connection
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(5)
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Where a
charge is created by a member on his land or on his interest in any land as a
tenant by declaration under Section 48, the society shall record or cause to
record such particulars of charge in the Record of Rights maintained by the
village officers of the village where such property is situated. Such
recording of the charge in the Record of Rights of the village shall be
treated as a reasonable notice of such charge created under Section 48.
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