Odisha act 002 of 1963 : The ODISHA CO-OPERATIVE SOCIETIES ACT, 1962

ODISHA ACT 2 OF 1963

* THE ODISHA

CO-OPERATIVE SOCIETIES ACT, 1962

Assented to by the President on the 3rd February 1963, first published in an extraordinary issue of the Orissa Gazette, dated the 15th February 1963.

AN ACT TO CONSOLIDATE AND AMEND THE LAW RELATING TO

CO-OPERATIVE SOCIETIES.

BE it enacted by the Legislature of the State of Orissa in the Thirteenth Year of the Republic of India as follows :-

CHAPTER - I

PRELIMINARY

1. Short title, extent and commencement :- (1) This Act may be called the Orissa Co-operative Societies Act, 1962.

(2) It extends to the whole of the State of Orissa.

(3) It shall come into force on such date as the State Government may, by notification appoint.

Objects and Reasons :- The provisions of the present Orissa Co- operative Societies Act, 1951 are not adequate to meet the present days' requirement and they are not suited for the repaid development of Co-operatives in the State which is an essential need for the success of various development programmes, particularly those which are meant to help the weaker sections of the community. The question of revising the existing Act thoroughly has been under consideration of the State Government for sometime past A model Co-operative Societies Bill has been prepared by a committee specially constituted by the Government of India for this purpose. Accordingly, after taking this model Bill into consideration and in the light of the circumstances prevailing in the State, the present Bill has been drafted to make the law simple, comprehensive and easily understandable and to specially provide for development of Co-operatives in certain directions; such as Co-operative farms and land mortgage banks, for which adequate provisions do not exist under the present Act. This Bill seeks to achieve the above purpose.

1. Published vide Orissa Gazette Ext. No. 99-D/15.02.1963, Notfn. No. 968 Legis. dated 13.02.1963.

The Odisha Gazette

EXTRAORDINARY

PUBLISHED BY AUTHORITY

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Similarly, it is necessary that the Auditor-General of Co-operative Societies, to whom all powers of Audit and Surcharge etc., have been transferred under the amendments of 1991, is empowered to have access to the records and property of the Society and exercises all ancillary powers and not the Registrar any longer, as provided under Sub-Section (4) of Section 62 of the Act. This Bill seeks to achieve inter alia, the above objectives. Act 7 of 1996

The Bill presented for replacement of the Orissa Co-operative Societies (Amendment) Ordinance, 1996 provides, inter alia, for immediate representation of the weaker Sections in the Committees of management of all Central and Apex Societies in the State, dissolution of the exiting Committees of such Societies with effect from the date of promulgation of the Ordinance, vesting of the management of the said Societies in the Registrar, upon such dissolution, entrustment of such management of interim Committees to be nominated by the Registrar giving representation therein to the target group of vulnerable Sections, voluntary amendments of bye-laws and reconstitution of Committees of the Societies concerned within the specified period of six months and compulsory amendment of bye-laws and reconstitution of Committees of the Societies concerned within the specified period of six months, and compulsory amendment of bye-laws and constitution of such Committees by the Registrar in the event of the Society failing to so amend and constitute, within the specified period, deemed membership of the members of Primary Societies in the Central and Apex Societies to which the Primary Societies are affiliated, revised definition of Central and Apex Societies, enabling such Societies to also have individuals as their members, reintroduction of the provision regarding suspension of erring Committees of Societies, pending finalisation of suppression proceedings initiated against them, and also reintroduction of a system of indirect election of Presidents of Committees of mangement in order to have more cohesively functional Committees.

The Bills seeks to achieve the above objectives.

Act 6 of 1998

The Orissa Co-operative Societies (Amendment) Bill, 1998 seeks to replace the Orissa Co-operative Societies (Amendment) Ordinance, 1998. In order to give reasonable time, so as to enable the Registrar to cause amendment of the Bye-Laws of the Central and Apex Co-operative Societies and to reconstitute the Committees of such Societies with adequate representation of weaker Sections belongings to Scheduled Castes, Scheduled Tribes, Other Backward Classes and women by holding election, which could not be completed within the statutory period due to unexpected interruption caused by the General Election to the Lok Sabha, as stated in the Statement explaining the circumstances which had necessitated immediate legislation. It is considered necessary and expedient to amend Section 28 (2) (g) (iv) of the Orissa Co-operative Societies Act, 1962 by enhancing the period specified therein from nineteen months to twenty-five months.

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Society or class of registered societies, the accounts of which are made up to any other date with the previous approval of the Auditor-General, the year ending with such date;] 1 [(d-2) "Co-operative Principles" means the principles specified in Schedule II;

(d-3) "Family" means an individual, his or her spouse, sons, daughters and other near relatives dependent on, and jointly residing with, him or her;]

2 [(e) "Financing Bank" in relation to a Society means a Society engaged in Banking business under the Banking Regulation Act, 1949 or a Scheduled Bank as defined under the Reserve Bank of India Act, 1934 or the Reserve Bank of India, the National Bank for Agriculture and Rural Development, the Industrial Development Bank of India Limited or any similar Bank or any financial institutions regulated by the Reserve Bank of India and includes such financing institutions like the National Dairy Development Board and National Cooperative Development Corporation, to which the Society is indebted in cash or in kind;'; and]

1 [(e-1)

"Joint Member" means a husband and wife team joining as such in an application for registration of a Society which is subsequently registered, or admitted as joint member after the registration of a Society in accordance with the provisions of this Act, Rules and Bye-laws of a Society and holding a share or shares in the Society jointly;]

(f)

"Member" means a person joining in the application for the registration of a Society and a person admitted to membership after such registration in accordance with this Act, the rules and the bye-laws, and includes a³[joint and nominal Member;] 4 [(f-1) "Near relative" means father, mother, husband, wife, son, daughter, undivided brother, unmarried sister and son's wife;] 5 [(f-2) "Nominal member" means a person admitted as such to a Society, after its registration in accordance with the bye-law;] 6 [(f-3) "National Bank" means the National Bank for Agriculture and Rural Development established under section 3 of the National Bank for Agriculture and Rural Development Act, 1981;]

1. Inserted by Orissa Act 28 of 1991, dated 31.12.1991, w.e.f. 11.09.1992.

2. Substituted by Orissa Act 1 of 2008, dated 20.03.2008, w.e.f. 29.09.2007.

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(ii) to such amount as they may, in accordance with such Bye-laws, respectively, undertake to contribute to the assets of the Society ;

(m) "Society with unlimited liability" means a Society, the members of which are, in the event of its being wound up jointly and severally liable for and in respect of all its obligations to contribute to any deficit in the assets of the Society; 1 [(m-1) "Standard acre" shall have the same meaning as assigned to it under the Orissa Land Reforms Act, 1960 (Orissa Act 16 of 1960);]

(n) "State Co-operative Union" means the Society registered under the Orissa Co-operative Societies Act, 1951 (Orissa Act 11 of 1952), by the name of the 'Orissa State Co-operative Union Limited; and

2 [(n-1)

"State Co-operative Election Commission" means the Odisha State Co-operative Election Commission consisting of a Odisha State Co-operative Election Commissioner appointed by the Governor under Section 28-AA;]

3 [(o) "Tribunal" means Co-operative Tribunal constituted under Section 67-A.]

CHAPTER - II

REGISTRATION OF CO-OPERATIVE SOCIETIES

3. Registrar :- (1) The State Government may appoint a person to be the Registrar of Co-operative Societies for the State and may appoint other persons with prescribed designations to assist him.

(2) The State Government may, by general or special order, confer on any person appointed to assist the Registrar all or any of the powers of the Registrar under this Act to be exercised within such local limits as may be assigned by the Registrar.

(3) The State Government may also, by order, appoint any Society or local authority to assist the Registrar who shall exercise in the prescribed manner such powers of the Registrar, as may be specified in the said order.

(4) Every person appointed to assist the Registrar shall exercise the powers conferred on him under Sub-Section (2) or (3), as the case may be, subject to the general superintendence and control of the Registrar. 4 [3-A. Auditor-General :- (1) The State Government may appoint a person to be the Auditor-General of Co-operative Societies for the State, and

1. Inserted by Orissa Act 21 of 1970, dated 26.10.1970.

2. Inserted by Orissa Act 1 of 2013, dated 30.01.2013.

3. Inserted by Orissa Act 19 of 1985, dated 11.10.1985.

4. Inserted by Orissa Act 28 of 1991, dated 31.12.1991, w.e.f. 01.05.1993.

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case of a Society the object of which is housing where such minimum number shall be fifteen, so however that, in either case, such minimum number of individuals shall include three members from the Scheduled Castes including one woman, three from Scheduled Tribes including one woman, four from Other Backward Classes including one woman and five from other categories of members including two women :] Provided that no such individual shall be a near relative of another :

Provided further that in the case of a Society organised exclusively for the promotion of the economic interest of any particular professional or occupational group of individuals, the individuals joining in the application for registration shall be pursuing such profession or occupation:

1 [Provided also that in the event of non-availability of the minimum number of individuals from the Scheduled Castes, the Scheduled Tribes, Other Backward Classes or women so required for registration, the Registrar may exempt the proposed Society from the requirement of such category of individuals] Explanation :- A husband and wife team of two individuals joining in the application as a Joint Member shall be deemed to be one individual for the purpose of this clause.

(ii) a Central Society including a Central Co-operative Bank, or an Apex Society, the number of Societies joining in the application shall not be less than five and ten, respectively.

(c) persons joining in the application for registration shall belong to the area of operation of the proposed Society as defined in its bye-laws;]

(d) the application shall be signed by every one of the applicants who is an individual and in the case of applicants other than individuals by a person duly authorised by such applicant in that behalf; 2 [(e) the application shall indicate the names and addresses of the applicants who shall be the members and President of the Preliminary Committee of the Society as referred to in Sub-Section (1-c) of Section 28:

Provided that the number of applicants to be so indicated shall, in no case, exceed the limit specified for that purpose in Sub-Section (2) of Section

28.]

7. Registration :- (1) If the Registrar is satisfied -

(a) that the application complies with the provisions of this Act and the Rules;

(b) that the objects of the proposed Society are in accordance with Section 4;

1. Substituted by Orissa Act 10 of 2001, dated 29.08.2001, w.e.f. 03.07.2001.

2. Inserted by Orissa Act 28 of 1991, dated 31.12.1991, w.e.f. 01.05.1993.

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opinion is received from the Society consulted within fifteen days from the date of the reference to that effect, it shall be deemed that such Society has no objection if the proposed Society is registered.]

8. Registration Certificate :-¹[A Certificate of registration issued under Section 7 shall be conclusive evidence of the fact that the Co-operative Society mentioned therein is a Society duly registered under this Act.]

9. Co-operative Societies to be bodies corporate :- A Co-operative Society registered under this Act shall be a body corporate by the name under which it is registered having perpetual succession and a common seal and with power to²[acquire and hold property and to dispose in the manner prescribed of its property,] enter into contracts, institute and defend suits and other legal proceedings and to do all things necessary for the purpose for which it was constituted.]

10. Change of name of a Society :- (1) A Society may, by an amendment of its bye-laws, change its name.

(2) Where a Society changes its name, the Registrar shall enter the new name in the register of Co-operative Societies, in the place of former name and shall amend the certificate of registration accordingly.

(3) The change of name of a Society shall not affect any rights or obligations of the Co-operative Society, or render defective any legal proceedings by or against it; and any legal proceedings which might have been continued or commenced by or against the Society by its former name may be continued or commenced by its new name.

11. Change of liability :- (1) Subject to the provisions of this Act and the Rules a Society may, by an amendment of its bye-laws, change the form or extent of its liability.

(2) When a Society has passed a resolution to change the form or extent of its liability, it shall give notice thereof in writing to all its members and creditors and notwithstanding any bye-law or contract to the contrary, any member or creditor shall, during a period of one month from the date of service of the notice upon him, have the option of withdrawing his shares, deposits or loans, as the case may be.

(3) Any member or creditor who does not exercise his option within the period specified in Sub-Section (2) shall be deemed to have assented to the change.

(4) Any amendment of the bye-laws of a Society changing the form or extent of its liability shall not be registered or take effect until, either-

(a) the assent thereto of all members and creditors has been obtained; or

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the prescribed manner, call upon the Society to make such amendment within such period as he may specify in that behalf.

(6) If the Society fails to make the amendment within the period aforesaid the Registrar may, after giving the Society a reasonable opportunity of being heard, register the amendment and shall forward to the Society a copy of the registered amendment together with a certificate signed by him and such certificate shall be conclusive evidence that the amendment has been duly registered.]

13. When amendments of bye-laws come into force :- An amendment of the bye-laws of Society shall unless it is expressed to come into operation on a particular day, come into force on the day on which it is registered. 1 [Provided that an amendment made with the prior approval of the Registrar shall come into operation with effect from the date on which the resolution in respect thereof is passed at the general meeting of the Society.]

14. Amalgamation, transfer of assets and liabilities and division of Societies :- (1) A Society may,²[ x x x ] by a resolution passed by a majority of the members present and voting at a general meeting of the Society-

(a) transfer its assets and liabilities in whole or in part to any other Society which is prepared to accept them; or

(b) divide itself into two or more Societies.

(2) Any two or more Societies may,²[ x x x] by a resolution passed by a majority of the members present at an ordinary general meeting of each such Society specially convened for the purpose of which at least seven days clear notice has been given to each member and subject to the other condition of this section amalgamate into a single Co-operative Society. (3)³[ x x x ]

(4) The resolution of a Society under Sub-Section (1) or Sub-Section (2)

3 [ x x x ] shall contain all particulars of the transfer, division or amalgamation as the case may be.

(5) When a Society has passed any such resolution under Sub-Section

(1) or Sub-Section (2)³[ x x x ], the Society concerned shall give notice thereof in writing in the prescribed manner to all its members and creditors and, notwithstanding any bye-laws or contract to the contrary, any member or creditor shall, during the period of one month from the date of issue of the notice, have the option of withdrawing his shares, deposits or loans, as the case may be.

(6) Any member or creditor who does not exercise his option within the period specified in Sub-Section (5) shall be deemed to have assented to the proposals contained in the resolution³[ x x x ].

1. Inserted by Orissa Act 5 of 1970, dated 05.03.1970.

2. Omitted by Orissa Act 28 of 1991, dated 31.12.1991, w.e.f. 01.05.1993.

3 . Omitted by Orissa Act 19 of 1983 , dated 11.10.1983 .

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(b) such incidental, consequential and supplemental matters as may, in the opinion of the Registrar, be necessary to give effect to the re-organisation or amalgamation of the Society or Societies.

(3) No order under Sub-Section (1) shall be made unless the Registrar-

(a) has given every Society concerned an opportunity of stating its objections and suggestions on the order proposed to be made; and

(b) has considered the objections and suggestions so made by every such Society, or its members, depositors, creditors, employees, or any other persons concerned, within such period, not being less than fifteen days from the date of receipt of the proposed order, as the Registrar may fix in that behalf.

(4) An order issued under Sub-Section (1) shall, notwithstanding anything contained in this Act, or in any other law or in any contract, award or instruments for the time being in force, be binding on all Societies and their members, depositors, creditors, employees and other persons having any rights, assets or liabilities in relation to all or any of the concerned Societies.

(5) On and from the date the re-organisation or the amalgamation takes effect, the assets and liabilities referred to therein shall stand re-organised or amalgamated, as the case may be, with the assets and liabilities of the resulting Society or Societies formed out of such re-organisation or amalgamation and the members, creditors and debtors of such Society or Societies shall be deemed to be members, creditors and debtors, as the case may be, of such resulting Society or Societies as ordered by the Registrar.

(6) In case of the Society or Societies directed to be re-organised or amalgamated, the registration of the re-organised or merged Society or societies, as the case may be, shall be deemed to be cancelled from the date on which the re-organisation or amalgamation takes effect.

(7) Notwithstanding anything contained in the Transfer of Property Act, 1882 (4 of 1882) or the Registration Act, 1908 (16 of 1908), an order issued under this section shall be sufficient conveyance to transfer the assets and liabilities of the Society or Societies covered by any order passed under Sub- Section (1).]

1 [14-B. Special provision in respect of certain sick Societies :-

2 [(1) (a) Subject to the provisions of Section 123, and notwithstanding anything to the contrary contained in any other provisions of this Act and the Rules or Bye-laws framed thereunder, or any other law, for the time being in force, where the Registrar, for reasons to be recorded, is of the opinion that a Co- operative Society in which majority of the shares have been subscribed or liabilities by way of guarantee for borrowing exceeding fifty percentum of the working capital of the Society have been undertaken by the State Government;

1. Inserted by Orissa Act 1 of 1995, dated 11.01.1995.

2. Substituted by Orissa Act 7 of 1997, dated 23.07.1997.

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on the date of the transfer, is increased and make payments due, if any, under the settlement, to the Society or any such persons.]

(2) An order issued under Sub-Section (1) shall, notwithstanding any- thing contained in this Act, the Rules or Bye-laws framed thereunder, or in any other law or in any contract, award or instrument for the time being in force, be binding on all members, depositors, creditors, employees of the Society and other persons concerned having any right, assets or liabilities in relation to the Society.

(3) The order under Sub-Section (1) may provide for :-

(a) reduction of the interest or right which the members, depositors, creditors, employees and other persons concerned may have in or against the Society, to such extent as the Registrar considers nec- essary, having due regard to the proportion of the assets of the Society to its liabilities; and

(b) such incidental, consequential and supplemental matters as may in the opinion of the Registrar, be necessary to give effect to the said transfer.

1 [(4) For the purpose of this section, at any stage of proceeding thereun- der, it shall be competent for the State Government to give such directions to the Registrar, as it may deem proper in the facts and circumstances of every case, and such directive shall be binding on the Registrar.] 2 [(5) Notwithstanding anything contained in the Transfer of Property Act, 1882 (4 of 1882) or the Registration Act, 1908, (16 of 1908) an order issued under this Section shall be sufficient conveyance to transfer the assets and liabilities of the Society.]

1 [Explanation :- For the purposes of this section,-

(i) 'Company' shall mean a company as defined in the Companies Act, 1956 (1 of 1956);

(ii)

'Sickness' in respect of a Society shall ordinarily mean non-viabil- ity, and may bear such other meaning as assigned to it under Sick Industrial Companies (Special Provisions) Act, 1985 (1 of 1986) or any other law in force; and

(iii) 'Transfer' shall include transfer by way of management contracts, lease or any other mode.]

15. Cancellation of registration certificates of Societies in cer- tain cases :- (1) Where the whole of the assets and liabilities of a Society are transferred to another Society in accordance with the provisions of Section 14 the registration of the first mentioned Society shall stand cancelled and it shall be deemed to have been dissolved and shall cease to exist as a corporate body.

1. Substituted by Orissa Act 7 of 1997, dated 23.07.1997.

2. Added by Orissa Act 7 of 1997, dated 23.07.1997.

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Provided that nothing in this clause shall debar a student, who is a mi- nor, from becoming a member of a Society formed for the benefit of the stu- dents of an Educational Institution, or a person who is not an individual, from becoming a nominal member:

Provided further that not more than three individuals from the same family shall be admitted as members:

1 [Provided also that nothing in this clause shall debar the Co-operative Societies to admit Self-Help Groups as member;]

Explanation :- A Joint Member consisting of two individuals related to each other as husband and wife shall be deemed to be one individual for the purpose of this clause.

(b) a Society other than a Primary Society, except the following, namely :-

(i) any Society;

(ii) the State Government;

(iii) the Central Government; and

(iv) any other person as may be prescribed; 2 [(v) a cooperative registered under the Orissa Self-Help Co-operatives Act, 2001]

3 [ x x x ]

4 [(1-a) Notwithstanding anything to the contrary contained in any other provisions of this Act, and the Rules or Bye-laws framed thereunder, the mem- bers of the Committee including the co-opted members, if any, but excluding the members nominated or appointed under Clause (ii) of Sub-Section (1-b) of Section 28, Sub-Section (1) of Section 31 and Sub-Section (1) of Section 32, of the Primary Societies affiliated to the Central Society or an Apex Society, shall be deemed to be the members of their respective Central Society or, as the case may be, the Apex Society or both, with effect from the date of commence- ment of the Orissa Co-operative Societies (Amendment) Act, 1997 so long as they continue as member of the Committees of Primary Societies. (1-b) (i) The members of the Primary Societies who were deemed to be the members of their respective Central Society or, as the case may be, the Apex Society or both, prior to the date of the commencement of the Orissa Co- operative Societies (Amendment) Act, 1997, shall be deemed to have ceased to be members of such Societies with effect from the date of such commence- ment.

(ii) Upon such cessation:-

1. Substituted by Orissa Act 1 of 2008, dated 20.03.2008, w.e.f. 29.09.2007.

2. Inserted by Orissa Act 1 of 2008, dated 20.03.2008, w.e.f. 29.09.2007.

3. Omitted by Orissa Act 7 of 1996, dated 22.04.1996.

4. Substituted by Orissa Act 4 of 1997, dated 23.05.1997.

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(d) the business in milk and milk products carried on by a person shall be deemed to be prejudicial to the business or interest of a Milk Co-operative Society;

(e) the business in oil-seeds and oil-seed products carried on by a person shall be deemed to be prejudicial to the business or inter- est of an Oil-seed Growers' Co-operative Society; and

(f) a family member of an individual shall, unless the contrary is proved, be deemed to have common economic interest with such indi- vidual.

(4) Any person continuing as a member of a Society in contravention of the provisions of this section shall cease to be such member with effect from the date of commencement of Section 12 of the Orissa Co-operative Societies (Amendment) Act, 1991.]

1 [(5) x x x ]

2 [16-A. Admission and continuance as members :- (1) No person shall be eligible for being admitted or for continuing as a member of a Society, if he-

(a) does not satisfy the requirements of this Act, Rules and Bye-laws made thereunder; or

3 [(a-1) has not attended three consecutive general meetings of the society and such absence has not been condoned by the members in the general meeting ; or

(a-2) has not used for two consecutive years the services, below the minimum level specified in the bye-laws; or]

(b) has been sentenced for an offence involving moral turpitude; or sentenced to fine or imprisonment or both for any other offence by a Court in India, unless any such sentence is annulled or re- versed or, in the latter cases until expiry of a period of five years from the date the fine is paid if the sentence is for fine, or where the sentence is for imprisonment or both fine and imprisonment, from the date he is released from the imprisonment, as the case may be; or

(c) is an applicant to be, adjudicated as a bankrupt or an insolvent or is an undischarged bankrupt or insolvent; or

(d) is a paid employee of the Society or its Financing Bank :

Provided such an employee may be admitted or retained as a nominal member; or

(e) has been expelled by the Society or any other Society, unless a period of two years has expired from the date of such expulsion.

1. Omitted by Orissa Act 28 of 1991, dated 31.12.1991, w.e.f. 11.09.1992.

2. Inserted by Orissa Act 28 of 1991, dated 31.12.1991, w.e.f. 11.09.1992.

3. Inserted by Orissa Act 1 of 2013, dated 30.01.2013.

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1. Substituted by Orissa Act 28 of 1991, dated 31.12.1991, w.e.f. 11.09.1992.

2 . Renumbered by Orissa Act 1 of 2 008, dated 2 0.03.2 008, w.e.f. 2 9.09.2 007.

3. Inserted by Orissa Act 1 of 2008, dated 20.03.2008, w.e.f. 29.09.2007.

4. Inserted by Orissa Act 4 of 1997, dated 19.05.1997.

5. Inserted by Orissa Act 1 of 2013, dated 30.01.2013.

6 . Omitted by Orissa Act 7 of 1996 . dated 22.04.1996 . 19.¹[Exercise of membership rights :-²[(1)] No member of a Society shall be entitled to exercise his right as such unless he has made such payments to the Society in respect of membership, acquired such interest in the Society or fulfilled such obligation of members, as is required by this Act or as may be provided in Rules and Bye-laws:]

3 [(2) Save as provided in sub-section (1), a member of a Primary Agricultural Credit Co-operative Society, Large-sized Adivasi Multipurpose Co- operative Society, Service Co-operative Society and Farmers' Service Co-operative Society shall not have the right to vote unless he has deposited such amount for such period as may be specified by the Registrar from time to time.] 4 [Provided that the provisions of this Section shall not apply to the members of the Committee of the Primary Societies who shall be deemed to be members of the Central Society or as the case may be, the Apex Society in accordance with the provisions of Sub-Section (1-a) of Section 16.] 5 [(3) Every member of a Society shall have right to access to the books, information and accounts of a Society kept in regular transaction of its business during business hours.]

20. Vote of members :- Every member of a Society shall have one vote in the affairs of the Society :

1 [Provided that -

(a) ⁶[x x x]

(b) where two individuals, have been admitted as joint members, they shall have one vote which may be exercised by any one of them;

(c) where the State Government or the Central Government is a member of the Society, each person nominated by or on behalf of such Government on the Committee shall have one vote;

(d) where there is an equality of votes at a meeting on the affairs of the Society other than election of its office-bearers or amendment of its bye-laws, the person presiding over the meeting shall have a second and deciding vote; and

(e) where a member of the Society is simultaneously electing the President and the member of the Committee from his constituency, he shall have one vote for electing the President and another for the member.]

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22. Restriction of holding of shares :- In any Society no member belonging to the category mentioned in Clause (a) of Sub-Section (1) of Sec- tion 16 shall-

(a) hold more than such portion of the total share capital of the Soci- ety not exceeding one-tenth thereof as may be prescribed; or

(b) have or claim any interest in the shares of the Society exceeding five thousand rupees:

Provided that the State Government may, by notification, specify in re- spect of any class of Societies a higher maximum than one-tenth of the share capital or a higher amount than five thousand rupees, as the case may be.

23. Restrictions on transfer of shares or interest :- (1) The trans- fer of a share or interest of a member in the capital of a Society shall be subject to such conditions and restrictions as to the maximum holdings as are specified in Section 22.

(2) No transfer by a member of his share or interest in a Society shall be valid unless-

(a) the member has held such share or interest for not less than one year;

(b) the transfer is made to a member of the Society; and

(c) the transfer is approved by the Committee of the Society.

(3) Where a member of a Co-operative Farming Society has pooled lands in favour of the Society no such land shall be withdrawn from the Society within such period as may be specified in the Bye-laws of such Society. 1 [(4) Notwithstanding anything contained in the preceding Sub-Section where a person ceases to be a member of any Society by reason of resignation or expulsion or by reason of incurring any disqualification provided under this Act or the Rules or under the Bye-laws of the Society, the Society may retire the shares of or the interest in the share capital held by such person on pay- ment of the face value of such share or in interest.]

24. Transfer of interest on death of member :- (1) On the death of a member, the Society shall transfer the share or interest of the deceased member to the person or persons nominated in accordance with the Rules, or, if no person has been so nominated, to such person as may appear to the committee after such enquiry as he deems fit to be the heir or legal representative of the deceased member:

Provided that such nominee, heir or legal representative, as the case may be, is admitted as a member of the Society:

Provided further that nothing in this Sub-Section shall prevent a minor or a person of unsound mind or a person suffering from any other disqualification, if any, under the bye-laws from acquiring by inheritance or otherwise the share

1. Substituted by Orissa Act 21 of 1970, dated 20.10.1970.

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CHAPTER - IV

MANAGEMENT OF SOCIETIES

27. Final authority in a Society :- The final authority in a Society shall vest in the general body of members:

1 [Provided that where the area of operation or the membership of a Society exceeds such limits as may be prescribed, a representative smaller General Body shall be constituted in the manner prescribed which shall exer- cise all the powers of the General Body except the powers of electing office bearers.²[x x x]:

Provided further that nothing in this section shall affect any powers con- ferred on a committee or any officer of a Society by the Rules or the Bye-laws.

28. Society to have a Committee :-³[(1) The management of a Society shall vest in a Committee constituted in accordance with this Act, Rules and Bye-laws, and the Committee so constituted shall exercise such powers and perform such duties as may be necessary or expedient for the purpose of carrying out its functions under this Act which shall include-

(a) the power to-

(i) admit members and dispose of applications for shares;

(ii) interpret the organisational objectives and set specific goals to be achieved towards those objectives;

(iii) prepare annual and supplementary budgets and get ap- proval of the General Body thereto;

(iv) raise and invest funds in accordance with the Bye-laws;

(v) sanction all expenditure above the prescribed level and the plan of capital development for the coming year or years;

(vi) enforce any debt or demand of the Society and institute, defend or compromise legal proceedings for or against the Society;

(vii) assess the existing man-power resources and future re- quirements in the context of changes that might have taken place and the measures to be taken to ensure availability of the required resources, consider and remove constraints in the process or progress of manpower planning atleast once at the beginning of every year;

4 [(viii) appoint officers or other staff to conduct the business of the Society and define interalia their duties,service condi-

1. Substituted by Orissa Act 28 of 1991, dated 31.12.1991, w.e.f. 14.11.1995.

14

(c) preparation of Annual returns prescribed by the Reg- istrar and the Auditor-General;

(d) preparation of the statement of accounts required at audit and placement of the same before the audi- tors;

(e) preparation of all other statements and returns and submission of the same to the Registrar and the Au- ditor-General in such forms as they may direct;

(f) maintenance of the accounts of the Society regularly in proper Books;

(g) maintenance of the register of members up to date; 1 [(ii-a) providing co-operative education and training to its members;

(ii-b) save as provided in sub-clause(ii), filing of return of the society every year within six months of the closure of the financial year, to the Registrar or, as the case may be, to the Financing Bank, which shall include-

(a) annual report of its activities ;

(b) its audited statement of accounts ;

(c) plan for surplus disposal as approved by the General Body;

(d) list of amendments to its bye-laws, if any;

(e) declaration regarding date of holding its General Body meeting and conduct of election when due; and

(f) any other information required by the Registrar or, as the case may be, Financing Bank.];

(iii) formulating recommendation for appropriation of the net profits declared as distributable under the provisions of this Act and Rules, and submitting the same to the General Body;

(iv) facilitating the inspections, inquiries and audits under this Act and considering the Audit, Inspection and Inquiry Re- ports received from the concerned authorities and furnish- ing compliance there to in accordance with the provisions of this Act and Rules;

(v) convening the meetings and special meetings of the Gen- eral Body in time;

(vi) watching that the loans and advances are utilised for the purposes for which they are meant and also that they are repaid punctually;

1. Inserted by Orissa Act 1 of 2013, dated 30.01.2013.

15

in any manner specified in Sub-Section (1) of section 31, the State Government or any person authorised by it may nominate the members and President of the Preliminary Committee to manage the affairs of the Society,¹[and if neces- sary, take all or any policy decision including admission of members in relation to the Society] for a period not exceeding two years so, however, that not less than half of the members thereof shall be from among the members of the Society.]

Modification by govt. order dt 08.10.2002 in respect of it's application to the P.P.T Employees Co-operative credit

society ltd., paradeep

Section 28 (1-b)-

The expiratiori of the period of four years shall operate as a dissolution of the Committee and thereupon;

(i) The members including the President and Vice-President of the Committee shall be deemed to have vacated their officer;

(ii) if the election of a new committee is not completed by the date of such dissolution, the management of the Society shall vest with the chairman, Paradeep Port Trust and upon such vesting the Chairman or any Officer of the Paradeep Port Trust authorised by him in that behalf in writing shall manage the affairs of the society and if necessary take all or any policy decision including admission of members in relation to the society and constitute the Committee in accordance with the provisions of this Act, Rules and the bye-laws within a period of six months from the date of Such dissolution.

(2) ²[(a) Subject to the provisions of this Act, the Committee of a Society, excluding the member under sub-section (3-b) and co-opted members under section 31, shall consist of,-

(i) twenty-one members in the case of an Apex Society including the President and the Vice-President; and

(ii) fifteen members in the case of Central Society, a Primary Society including Large Sized Adivasi Multipurpose Co-operative Society, including the President and the Vice-President of such Society.]; 3 [(b) In the case of a Large-sized Adivasi Multipurpose Co- operative Society, in the total number of elected members of the Committee, there shall be representation from among the members belonging to the Scheduled Tribes, which shall be proportional to the ratio between the members belonging to the Scheduled Tribes and the total numbers of member of the said Society, not less than two third, so however that

16

(e) In the case of an Apex Society, in the total number of elected members of the Committee, there shall be representation from among the members belonging to the Scheduled Castes, the Scheduled Tribes, the other Backward Classes including Socially and Educationally Backward Classes and the Woman which shall be proportional to the ratio between the members belonging to each said category and the total number of members of the Electoral College referred to in clause (ii-a) of sub-section (1) of section 28-A, so that among each of the said Scheduled Castes, the Scheduled Tribes, the Other Backward Classes including Socially and Educationally Backward Classes of members, there shall be representation of woman which shall be proportional to the ratio between the woman members belonging to each said category in the said Electoral College and the total number of the members of the category in that Electoral College :

Provided that, save as provided in the aforesaid clauses there shall be no bar for the members belonging to the said reserved categories to contest the election against the remaining seats in the Managing Committee of the Primary, Central and Apex Societies. 1 [Provided further that a Society shall provide reservation of one seat for the Scheduled Castes or the Scheduled Tribes and two seats for women to the Committee consisting of individuals as members and having members from such class or category of persons.]

(f) Notwithstanding anything contained in this sub-section,-

(i) In the event of the seats in the Committee reserved for Women, Scheduled Castes, Scheduled Tribes and Other Backward Classes including Socially and Educationally Backward Classes remain unfilled in any election of a Primary, Central or Apex Society, the Committee of the Society shall co-opt. the required number of such categories of members from among the members of the Primary Society, or as the case may be, from among the members of the Electoral College of the Central or Apex Society, and for the purpose of making such co-option the vacancies in the unfilled seats reserved for the said categories shall not invalidate the constitution or functioning of the Committee, if otherwise it would be having a quorum;

(ii) the term of office of every such co-opted member shall be co-terminus with the other members of the Committee.

1. Substituted by Orissa Act 1 of 2013, dated 30.01.2013.

17

1 [(2-a) (i) A Society, the Bye-laws and the Committee of which, are not in conformity with the provisions of this Act as amended by the Orissa Co-operative Societies (Amendment) Act, 1991 shall amend its Bye-laws and notwithstanding anything to the con- trary in this Act, reconstitute in the manner provided under this Act, Rules and the Bye-laws its Committee within a period of²[eight months] from the date of commencement of the said Amendment Act, so as to bring them in conformity with the provisions as so amended.

(ii) In the event of a Society failing to so amend and reconstitute within the period mentioned in Clause (i), the Registrar shall make such amendment and reconstitution within a period of four months following the date of expiry of the period men- tioned in the said Clause.]

1 [(2-b) The provisions of Sub-Section (2-a) shall mutatis mutandis apply to a Society, the Committee of which may be standing dissolved under Section 28 or superseded under Section 32 as on the date of commencement of the Orissa Co-operative Societies (Amendment) Act, 1991.] 2 [(3) No individual shall, whether by himself or as a representative of the Society, be eligible for being chosen or for continuing as a member or³[the President or as the Vice-President, if any,] of the Committee of a Society, if he,]

(a) is an applicant to be adjudicated an insolvent or an undis- charged insolvent; or

(b) has been sentenced for an offence involving moral turpitude such sentence not having been reversed; or

(c) is of unsound mind or is a deaf-mute or is suffering from lep- rosy; or

1 [(d) is a family member of any paid employee of the Society :] Provided that nothing in this clause shall debar -

(i) any person specifically permitted by the Registrar in that behalf from becoming the Secretary of the Society; or

(ii) the paid employee of societies from becoming members of the Committee of a society composed exclusively of such employees; or

1 [(e) has failed to pay any amount due, whether in cash or in kind, to the Society, its Financing Bank, or any other Society, on account of any loan or otherwise within three months from the date of notice by the Society or the Financing Bank concerned for payment of such dues :

1. Substituted by Orissa Act 28 of 1991, dated 31.12.1991, w.e.f. 11.09.1992.

18

(i) without prior intimation in respect of every such meeting; or

(ii) with prior intimation if, upon such intimation, the Commit- tee disapproves the abstention in the meeting to which the intimation relates or the meeting next following :

Provided that nothing in this clause shall debar such person from be- coming a member or President after the expiry of a period of two years from the date immediately following the date on which the said period of six months expires; or

(o) abstains himself from attending the meetings or special meet- ings of the General Body or the Representative Smaller General Body, as the case may be, over a continuous period of one year—

(i) without prior intimation for every such meeting; or

(ii) with prior intimation if, upon such intimation, the¹[General Body or, as the case may be, Smaller General Body] disap- proves the abstention in the meeting to which the intima- tion relates or the meeting next following :

Provided that nothing in this clause shall debar such person from be- coming a member or President after the expiry of a period of two years from the date immediately following the date on which the said period of one year 1 [expires; or]

2 [(P) has more than two children :

Provided that nothing in this clause shall apply to a person who has more than two children as on the 1st day of January, 1995 or, as the case may be, within a period of one year of the said date, unless such person be gets an additional child after the said period of one year.

3 [(3-a) A representative of a Society or a body corporate shall not be eligible for being chosen or for continuing as a member or President of the Committee of any other Society in cases where the Society or the body corpo- rate which he represents-

4 [(i) has failed to pay any amount due, whether in cash or in kind, to the Society, its Financing Bank or any other Society, on ac- count of any loan or otherwise, within three months from the date of notice by the Society or the Financing Bank concerned for payment of such dues :

Provided that nothing in this clause shall debar any such representative from being chosen as a member or President of the Committee of any other Society if the Society or body corporate he represents, makes payment of the dues, before the date of filing his nomination at an election of any such other Society.]

(i) ceases from the membership of the Society; or

(ii) is ordered to be wound up or dissolved. 5 [(3-aa) Any individual continuing as a member or President of the Com-

19

(3-c) The Chief Executive shall be deemed to be public servant within the meaning of Section 21 of the Indian Penal Code, 1860 ( 5 of 1860). 1 [(4) to (4-d) x x x ]

2 [(5) If in the opinion of the Registrar, any officer or office-bearer of a Society who having the power, by or under the bye-laws, to remain in custody of any cash belonging to the Society, keeps in his custody, without reasonable cause, any such money in excess of the permissible limit beyond the period allowed under the Bye-laws or in any other manner not permitted thereunder, the Registrar may, by order in writing, after giving such officer or office bearer a reasonable opportunity of being heard remove him from his office, and there- upon he shall be deemed to have vacated his office with effect from the date of the said order.]

3 [(6) Where any vacancy in the office of a member or the President of a Committee arises by reasons of death, resignation or removal of any member or the President or²[otherwise], such vacancy—

(a) shall be filled up in the same manner as it was originally filled up;

4 [(b) shall, within fifteen days from the date of its occurrence, be intimated by the Chief Executive of the Society to the State Co-operative Election Commission to fill up the vacancy on receipt of intimation :

Provided that where a casual vacancy occurs in the office of the mem- ber and the term of that member remains less than half of his original term, the committee shall fill up such vacancy by nomination out of the same class of members in respect of which the casual vacancy has arisen.^]

20

3 [(2) The Chief Executive of the Society, by whatever designation called, shall intimate the State Co-operative Election Commission, the date of expiry of the term of a committee six months before such expiry.] 4 [(3) x x x ]

4 [(4) x x x ]

4 [(5) x x x ]

5 [(6) x x x ]

6 [(7) x x x ]

7 [(8) Any expenditure required to be incurred inholding of election of members and President of a Committee or in connection with matters inciden- tal thereto shall be met by the Society under the direction of the³[State Co- operative Election Commission].]

8 [28-AA. Superintendence, direction and control of elections to a Society vest in the State Co-operative Election Commission :- (1) The superintendence, direction and control of the preparation of the electoral rolls for, and the conduct of, all elections to a Co-operative Society shall vest in the State Co-operative Election Commission consisting of a State Co-operative Election Commissioner appointed by the Governor and shall hold office for a period of five years from the date of his appointment or he attains the age of sixty five years whichever is earlier.

(2) No person shall be qualified for appointment as State Co-operative Election Commissioner unless he is or has been an officer of the Government not below the rank of Secretary to the Government, having experience in co- operative sector.

(3) A person appointed as State Co-operative Election Commissioner shall before he enters upon his office, make and subscribe before the Governor an oath or, affirmation in the form as may be prescribed.

(4) The salary and allowance payable to, and other terms and conditions of service of, the State Co-operative Election Commission shall be such as may be prescribed:

Provided that the conditions of service shall not be varied to his disadvantage after his appointment.

(5) The State Co-operative Election Commissioner may be removed from his office by the Governor on the ground of corruption or misdemeanour after the Lokpal, on a reference being made to it by the Governor, has, on inquiry held in accordance with the procedure prescribed in that behalf, reported that the State Co-operative Election Commissioner ought, on any such ground, to be removed.

21

(2) Subject to the provisions of this Act, Rules and the Bye-laws, the following matters shall be dealt with by the General Body:-

(a) approval of the programme of activities of the Society and Annual and Supplementary budgets;

(b) review of the programme for the year and its implementation;

(c) matters concerning the election of office-bearers;

(d) review of loans advanced to office-bearers and their near rela- tives or family members and direction for recovery of such loans;

(e) consideration of reports of Audit, Inspection and Inquiry, Annual Reports including the Annual Report of the Auditor-General, and directives of the Government, if any, action taken by the Commit- tee thereon;

(f) review of the Reports of the Committee, Sub-Committees and the Chief Executive;

(g) creation of Reserve and other Funds and review of utilisation thereof;

(h) disposal of the net profits and review thereof;

(i) review of the operational deficits, if any, and allocation of liability on members in proportion to their transactions;

(j) membership of the Society in other Societies, partnership with other Societies and review of reports and accounts in respect of such partnership, if any;

(k) promotion of Subsidiary Organisations and review of Annual Re- ports and Accounts of Subsidiary Organisations, if any;

(l) amendments of the bye-laws;

(m) formulation of Code of Conduct for the members, office bearers, Officers and other employees of the Society;

(n) liquidation of the Society;

(o) acquisition of property and disposal, in the manner prescribed of its property;

(p) fixation of remuneration and other facilities to be allowed to the office bearers in connection with duties performed and meetings attended in their capacity as such;

22

(2) The office bearers of the Committee dissolved under Sub-Section (1) shall not be eligible for being chosen as office bearer of any Society until expiry of a period of two years from the date of such dissolution.]

31. Nominees of the Government on the Committee of a Soci- ety :-¹[(1) Where the State Government or Central Government,-

(a) has subscribed to the share capital of a society; or has granted any assistance in cash or in kind or in any other manner; or

(b) has assisted indirectly in the formation or augmentation of the share capital of a society as provided in Chapter VI; or

(c) has guaranteed the repayment of principal and payment of interest on debentures issued by a society ; or

(d) has guaranteed the repayment of principal and payment of interest on loans and advances to a society,

the State Government or the Central Government, as the case may be, or any authority specified by such Government in this behalf, shall provide a panel of names not exceeding four persons having experience in the field of banking, management, finance or specialization in any other field relating to the objects and activities undertaken by the Society for co-option of two persons by the Committee to be the members of the said Committee. ( 2 ) In case of Society other than the Society specified in sub-section (1), the Committee shall co-opt persons not exceeding two having the experience in the field of banking, management, finance or specialization in any other field relating to the objects and activities undertaken by the Society to be the member of the said committee:

Provided that the co-opted members referred to in sub-sections (1) and

(2) shall not have the right to vote in any election of the Society in their capacity as such member or to be eligible to be elected as office bearer of the committee.] The 2nd November 2002

S.R.O. 957/2002 - ln exercise of the powers conferred by Section 123 of the Orissa Co-operative Societies Act, 1962 Orissa Act 2 of 1963), and in continuation of the order of the Government of Orissa in the Co-operation Department No. 2865-Co-op., dated the 8th March 2002, the State Government in Co-operation Department do hereby exempt all Primary Milk Producers Co- operative Societies, registered under the said Act, and which are not coming under the operation Flood Programmes,, from the provisions of Section 31 of the said Act.

[No. 13974-ll-Legal-73/2000-Co-op.]

By order of the Governor

R.N. DASHI

Joint Secretary to Government .

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opportunity to state his objection, disqualify him from being a member of a Committee in respect of the Society for a period not exceeding three years to be specified in the order and every order made under the Sub-Section shall state the reasons for which it is made and shall be communicated to the Soci- ety and the officer concerned.

(6) In cases where the Registrar makes an appointment under Clause

(b) or (c) of Sub-Section (1) he may, by the order made under that Sub-Section fix the remuneration to be paid to the Administrator or the Society, as the case may be, and the remuneration so fixed shall be paid from out of the funds of the Society whose affairs are managed by such Administrator or Society. 3 [(7) Notwithstanding anything contained in this Section, if, in the opin- ion of the Registrar, the Committee of any Society is acting in a manner preju- dicial to the interest of the Society or its members, or has committed such serious irregularities or illegality that further continuance of the Committee would be detrimental to the interest of the Society, the Registrar may, at any time before or, as the case may be, after issue of a notice under Sub-Section (1), suspend the Committee and make such arrangements as he thinks proper for the management of the affairs of the Society during the period of suspen- sion of the Committee:

Provided that if the Committee so suspended is reinstated the period of suspension shall count towards its terms.

(8) Notwithstanding anything contained in this Section, if, in the opinion of the Registrar, any member of the Committee of a Society, delegated or entrusted with any of the powers or responsibilities of such Committee, per- sistently makes default or is negligent in exercise of powers or in discharge of responsibilities or commits any act prejudicial to the interests of the Society or its member, the Registrar may, after giving an opportunity to state his objec- tions, if any, by order in writing stating reasons therefor remove him from office.]

33. Securing possession of records etc. :- (1) If the Committee of a Society is reconstituted at a general meeting of the Society or is removed by the Registrar under Section 32 or if the Society is ordered to be wound up under Section 72 and the outgoing members of the Committee refuse to handover charge of the records and property of the Society to the new Com- mittee or the Administrators or the Society appointed under Section 32 or the liquidator, as the case may be, such Committee, Administrators, Society or liquidator, as the case may be, may apply through the Registrar or any person empowered by the Registrar to the Sub-divisional Officer having jurisdiction for securing such records and property.

(2) The Registrar may, if he has reason to believe that any records of any Society are likely to be tampered with or suppressed or that any property of any Society is likely to be removed or misappropriated, authorise any person to enter and search any place where such records or property are kept or are believed to be kept and to seize such records and property and in the event of

24

cancellation thereof made under Sub-Section (3) shall be sent by registered post by the Society concerned to the Sub-registrar having jurisdiction over the area in which such land or property situates, on receipt of which the Sub- Registrar shall, if it is in order, register such declaration or the variation or cancellation thereof and issue a copy thereof to the said Society. Where it is not in order, he shall return it to that Society without registration. The declaration or any variation or cancellation thereof shall have effect only on the date of registration.

(5) No person shall transfer any property which is subject to a charge under Sub-Section (1) or Sub-Section (2) except with the previous permission in writing of the Society which holds the charge.

(6) Notwithstanding anything contained in any law for the time being in force, any transfer of property made in contravention of the provisions of Sub- Section (5) shall be void.

(7) Notwithstanding anything contained in the Provincial Insolvency Act, 1920 (5 of 1920) or any corresponding law for the time being in force, the dues of a Society from a member in insolvency proceedings against him shall rank in order of priority next to the dues payable by him to Government.

(8) Without prejudice to the provisions of Sub-Section (7) the charge created under Sub-Section (1) or Sub-Section (2) shall have priority over any claim of the Government in respect of a loan granted under the Land Improve- ment Loans Act, 1883 (19 of 1883) or the Agriculaturists Loan Act, 1884 (12 of

25

(a) the stamp duty chargeable under any law for the time being in force in respect of any class of instruments executed by or on behalf of a Society or by an officer or member thereof and relating to the business of such Society, or in respect of any award or order made under this Act, in cases where, but for such remission the Society, officer or member, as the case may be, would be liable to pay such stamp duty;

(b) any fee payable under any law for the time being in force relating to the registration of documents or Court fees:

Provided that nothing in Clause (a) shall apply in respect of bills of ex- change, cheques, promissory notes, bills of lading, letters of credit, policies of insurance, transfer of shares, debentures, proxies and receipts.

(2) The State Government may, by notification exempt any class of So- cieties from taxes on-

(a) agricultural income,

(b) sale or purchase of goods, or

(c) professions, trades, callings and employments.

39. Exemption from compulsory registration of instruments :-

Nothing in Clauses (b) and (c) of Sub-Section (1) of Section 17 of the Indian Registration Act, 1908, (16 of 1908) shall apply to-

(a) any instrument relating to shares in a Society notwithstanding that the assets of the Society consist in whole or in part of immov- able property; or

(b) any debentures issued by any such Society and not creating, de- claring, assigning, limiting or extinguishing, any right, title or in- terest 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 trans- ferred the whole or a part of its immovable property or any inter- est therein to trustees upon trust for the benefit of the holders of such debentures; or

(c) any endorsement upon or transfer of any debenture issued by any such Society.

CHAPTER - VI

STATE-AID TO SOCIETIES

40. Promotion of Co-operative Movement :- It shall be the duty of the State Government to encourage and promote the Co-operative movement in the State and to take such steps in this direction as may be necessary.

41. Direct Partnership of State Government in Societies :- (1)

1. Substituted by Orissa Act 28 of 1991.

2. Inserted by Orissa Act 19 of 1983.

26

nership Fund' or the 'Subsidiary State Partnership Fund' respec- tively;

the liability in respect of such shares shall, in the event of the Society being wound up, be limited to the amount paid in respect of such shares.

47. 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 Pri- mary Societies from the moneys in '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 share holders of that Society.

48. 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 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 is 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 in dissolution, as the case may be, and such moneys shall be credited to the 'Principal State Partnership Fund'.

49. 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 Partner- ship 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-Section (1) and Sub- Section (2) shall be paid to the State Government from out of the 'Principal State Partnership Fund'.

(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 42.

50. Disposal of 'Principal State Partnership Fund' and 'Subsidi-

1. Substituted by Orissa Act 28 of 1991.

2. Omitted by ibid.

3. Inserted by ibid.

27

(e) give financial assistance in any other form, including subsidies, to any Society.

54. Provision of this Chapter to override other laws :- The provi- sions of Sections 42 to 52 of this Chapter shall have effect notwithstanding anything inconsistent therewith contained in any other law, for the time being in force.

CHAPTER - VII

PROPERTIES AND FUNDS OF SOCIETIES

55. Funds not to be divided :- (1) No part of the funds other than the net profits of a Society shall be paid by way of bonus or dividend or otherwise distributed among its members:

Provided that a member may be paid remuneration on such scale as may be laid down by the Bye-laws for any services rendered by him to the Society.

(2) Nothing in Sub-Section (1) shall be construed so as to debar any payment from being made out of such fund to a member as wages or as price of the produced of such member supplied to the Society.

56. Disposal of net profits :-¹[xxx] (1) A Society shall, out of its net profits in any year-

(a) transfer an amount not less than ten percent in the case of a Co- operative Farming Society and not less than twenty-five per cent in any other case, of the profits to the reserve fund; and 2 [(b) credit four per cent of such profits to the Co-operative Education Fund constituted under Section 56-A.]

(2) The balance of the net profits may be utilised for all or any of the following purposes, namely :-

(a) payment of dividend to members on their paid-up share capital at a rate not exceeding³[twelve per cent] of such share capital;

(b) payment of bonus to members on the amount or volume of busi- ness done by them with the Society, to the extent and in the manner specified in the Bye-laws;

(c) constitution of or contributions to such special fund as may be specified in the Bye-laws;

(d) donations of amounts not exceeding ten per cent of the net prof- its for any charitable purpose as defined in Section 2 of the Chari- table Endowments Act, 1890 (6 of 1890).

(e) payment of bonus to employees of the Society, to the extent and in the manner specified in the Bye-laws;

1. Substituted by Orissa Act 28 of 1991.

28

59. Restriction of loans :- (1) A Society shall not advance a loan to any person other than a member except with the general or special sanction of the Registrar.

(2) Notwithstanding anything contained in Sub-Section (1), a Society may advance a loan to a depositor on the security of his deposit. 1 [59-A. Restriction on Interest :- Notwithstanding anything contained in any law or agreement for the time being in force, a Society shall not charge on account of interest on any short term loan, whether advanced before or after the commencement of the Orissa Co-operative Societies (Amendment) Act, 1982 (Orissa Act 19 of 1983) a sum greater than that of the principal. Explanation :- For the purpose of this Section the expression "short term loan" shall mean a loan repayable within a period of fifteen months.]

60. Restrictions on other transactions with non-members :- Save as is provided in Sections 58 and 59, the transactions of a Society with persons other than members shall be subject to such restrictions, if any, as may be prescribed.

61. Provident Fund :- (1) A Society may establish a Contributory Provi- dent Fund for the benefit of its employees to which shall be credited all contri- butions made by the employees and the Society in accordance with the Bye- laws of the Society.

(2) A Contributory Provident Fund established by a Society under Sub- Section (1)-

(a) shall not be used in the business of the Society;

(b) shall not form part of the assets of the Society; and

(c) shall not be liable to attachment or be subject to any other proc- ess of any Court or other authority.

CHAPTER - VIII

AUDIT, ENQUIRY, INSPECTION AND SURCHARGE

2 [62. Audit :- (1) (i) The Auditor-General shall audit, or cause to be audited by an Auditor duly authorised by him in that behalf, the accounts of every Society for each Co-operative year, and complete such audit within six months of the closure of the year, at least once or for such number of times as may be directed by the State Government from time to time in respect of any Society or class of Societies:

3 [Provided that the Auditor-General of the Co-operative Societies, Orissa may engage one or more Chartered Accountants to cause the audit of the accounts of the Co-operative Society and the fees shall be paid by the Society both to the Chartered Accountant and the Government for the audit of its accounts for each Co-operative year at such rate as may be fixed by the Gov- ernment.]

1. Substituted by Orissa Act 28 of 1991.

29

far as is necessary for carrying out any of the purposes of this Act, have power to summon and enforce the attendance of any person and to examine him on oath or affirmation and to compel the production of any books, accounts, docu- ments, securities, cash and other properties at any place at the headquarters of the Society or any branch thereof and to issue commission for the examina- tion of witness by the same means and so far as may be, in the same manner as is provided in the case of a Civil Court under the Code of Civil Procedure,

30

(a) a Society to which the Society concerned is affiliated;

(b) a majority of the members of the Committee of the Society; or

(c) not less than one-third of the total number of members of the Society.

(3) The Registrar, or the person authorised by him under Sub-Section

(1) shall, for the purposes of an inquiry under Sub-Section (1) or Sub-Section

(2) have the following powers, namely :-

(a) he shall, at all times, have free access to the books, accounts, documents, securities, cash and other properties belonging to or in the custody of the Society and may summon any person in possession or responsible for the custody of any such books, ac- counts, documents, securities, cash or other properties, to pro- duce the same at any place at the head-quarters of the Society or any branch thereof;

(b) he may summon any person who, he has reason to believe, has knowledge of any of the affairs of the Society to appear before him at any place at the head-quarters of the Society or any branch thereof and may examine such person on oath; and

(c) (i) he may, notwithstanding any rule or bye-laws specifying the pe- riod of notice for a general meeting of the Society, require the Officers of the Society to call a general meeting at such time and place at the head-quarters of the Society or any branch thereof and to determine such matters as may be directed by him and where the Officers of the Society refuse or fail to call such a meet- ing he shall have power to call it himself :

Provided that no such meeting shall be called without giving notice of at least five days prior to the date of the meeting;

(ii) a meeting called under Sub-clause (i) shall for all purposes be deemed to be a general meeting called under the Bye-laws of the Society and its pro- ceedings shall be regulated by such Bye-laws except that no quorum shall be necessary for such meeting;

(d) if he has reasons to believe that the continuance of any Officer of the Society in Office will be detrimental to the interests of the Society, he may, by order assigning reasons therefor, suspend such Officer or member from holding the Office during the tendency of the enquiry :

Provided that in no case the suspension as aforesaid shall extend over a period of more than six months :

Provided further that no order of suspension shall be passed by any

1. Substituted by Orissa Act 28 of 1991.

2. Substituted by ibid.

3. Inserted by Orissa Act 28 of 1991.

31

any money or other property belonging to the Society, the Auditor-General or a person authorised by him by an order in writing in that behalf, on his own motion or on the application of a liquidator, the Committee or any creditor, after giving the person concerned a reasonable opportunity of being heard, may make an order in the manner prescribed, requiring him to repay or restore the money or property or any part thereof, with interest at such rates, or to pay such contribution, costs or compensation as he may consider just and equita- ble and all such orders shall have effect without prejudice to any other action that may be lawfully taken against him :

Provided that no proceedings under this Section shall be initiated after the expiry of a period of four years from the date any act or omission as aforesaid is first detected during audit, inspection, inquiry or the winding up of a Society, as the case may be.

(2) Notwithstanding anything to the contrary in Sub-Section (1), any authority competent to initiate, institute or dispose of any proceedings under this Section as it stood prior to the date of commencement of Section 35 of the Orissa Co-operative Societies (Amendment) Act, 1991 shall continue to be so competent until appointment of the Auditor-General and upon such appoint- ment, all proceedings pending before any such authority as on the date of the said appointment shall stand transferred to the Auditor-General who shall dis- pose of the same in accordance with law.]

1

[CHAPTER - VIII-A]

CONSTITUTION AND POWERS OF TRIBUNAL

67-A. Constitution of Co-operative Tribunal:-²[(1) (i) The State Government shall by notification constitute a Tribunal, to be called the Co- operative Tribunal, consisting of such number of members with such qualifica- tions as may be prescribed, so however that-

(a) if there are more than one member, one among them shall be from the Orissa Superior Judicial Service (Senior Branch) who shall be the Chairman; and

(b) if there is only one member, he shall be from the Orissa Superior Judicial Service (Senior Branch).

(ii) The Tribunal may sit at such place or places as it may find convenient for the transaction of its business.]

(2) The Tribunal constituted under Sub-Section (1) shall exercise such powers and perform such functions as are or may be conferred by or under the provisions of this Act.

3 [67-B. Powers of Tribunal :- 4 [(1)(i) Notwithstanding anything con- tained in any law for the time being in force, any dispute arising in connection

1. Substituted by Orissa Act 28 of 1991.

32

to the Registrar if the parties thereto are among the following, namely :-

(a) the Society, its Committee, past Committee, any past or present Officer or office bearer, any past or present agent, any past or present servant, or the nominee, legal heir or representative of any deceased officer, office-bearer, deceased agent or deceased servant of the Society; or

(b) a member, past member, or a person claiming through a member, past member or deceased member of the Society, or of a Society which is a member of the Society; or

(c) a surety of a member, past member or a deceased member, whether such surety is or is not a member of the Society; or

(d) any other Society. Explanation I - A claim in respect of any sum payable to or by a Society, by or to a person or Society mentioned in Clauses(a) to (d), shall be a dispute touching the business of the Society within the meaning of this Section, even in case such claim is admitted and the only points at issue are the ability to pay and the manner of enforcement of payment.

Explanation II - A claim by a Financing Bank against a member of a Society which is a member of the Financing Bank and indebted to it for the recovery of dues payable by such member to the Society shall be a dispute touching the business of the Financing Bank within the meaning of this Section. Explanation III - The question whether a person is or was a member of a Society or not shall be a dispute within the meaning of this Section. Explanation IV - A claim by a surety for any sum or payment due to him from the principal borrower in respect of a loan advanced by a Society shall be a dispute within the meaning of this Section.

Explanation V - The question whether a person or any one of his family members is carrying on any business prejudicial to the business or interests of the Society, or whether such family member has common economic interest with such person shall be a dispute within the meaning of this Section.]

(2) Any person, Society,¹[or Financing Bank] referring a dispute to the Registrar under Sub-Section (1) shall deposit in advance such fees as may be prescribed.

(3) No dispute referred to in this Section shall be entertained in any Civil Court and decision of the Registrar in this respect shall, subject to the provi- sions of Section 70, be final.

(4) If any question arises whether a dispute referred to the Registrar under this Section is a dispute touching the constitution, management or the

33

WINDING UP AND DISSOLUTION OF SOCIETIES

72. Winding up of Societies :- (1) If the Registrar, after an inquiry has been held under Section 65 or an inspection has been made under Section 64 or upon perusal of the audit report or on receipt of¹[a resolution passed] by not less than three-fourths of the members of a Society, is of opinion that the Society ought to be wound up, he may issue an order directing it to be wound up.

(2) The Registrar may of his own motion, make an order directing the winding up of a Society -

2 [(a) its membership has fallen below the minimum number required for its registration; or]

(b) where the Society has not commenced working within a period of eighteen months from the date of its registration or has ceased to work.

3 [(2-a) Except on the basis of a resolution specified in Sub-Section (1) no order directing the winding up of a Society under this section shall be passed without giving an opportunity to the Society to state objection, if any to the proposed winding up, through its Chief Executive, within thirty days from the date of issue of a notice by the Registrar in that regard.]

(3) The Registrar may cancel an order for the winding up of Society, at any time, in any case where, in his opinion the Society should continue to exist.

73. Liquidator :- (1) Where the Registrar has made an order under Section 72 for the winding up of a Society, he may appoint a liquidator for the purpose and fix his remuneration, which shall be paid from out of the funds of the Society and may also remove any liquidator and appoint another in his place.

1 [(2) A liquidator appointed under Sub-Section (1) shall forthwith take such action as may be prescribed.]

(3) Where an order of winding up of a Society is cancelled by the Regis- trar under Sub-Section (3) of Section 72 or is set aside in appeal, the property, effects and actionable claims of the Society shall revest in the Society.

74. Priority of contribution assessed by a liquidator. :- Notwith- standing anything contained in the Provincial Insolvency Act, 1920 (5 of 1920), the debts due to a Society under orders of being wound up and the contribu- tion assessed by the liquidator shall rank next to debts due to the Government or to any local authority in order of priority in insolvency proceedings.

75. Powers of liquidator :- (1) Subject to any rules made in this behalf, the whole of the assets of a Society in respect of which an order for winding up has been made, shall vest in the liquidator appointed under Section

34

assets or the winding up of the Society on such terms as may be agreed and take in security for the discharge of any such call, liability, debt or claim and give a complete discharge in respect thereof.

2 [(2-a) The Liquidator shall submit such reports and returns on the progress of liquidation of the Society and in such form and manner, as the Registrar may from time to time require.]

(3) When the affairs of a Society have been wound up, the liquidator shall make a report to the Registrar and deposit the records of the Society in such place as the Registrar may direct and shall make over the surplus assets of the Society to the Registrar.

3 [(4) Notwithstanding anything contained in this Act-

(a) no dispute touching the constitution, management or business of a Society, in respect of which an order for winding up has been made under Sub-Section (1), shall, on and after the date of com- mencement of Section 41 of the Orissa Co-operative Societies (Amendment) Act, 1991, be raised before any authority other than the Liquidator of the Society, and for that purpose, the Liquidator shall have powers to start, on his own motion, proceedings on behalf of the Society; and

(b) all proceedings under Section 68 concerning such Society, with whatever authority pending as on the said date of commence- ment shall stand transferred to the Liquidator on that date; and the Liquidator shall decide the disputes so raised/started or trans- ferred, as the case may be, in accordance with law.]

76. Disposal of surplus assets :- The surplus assets of a Society made over by the liquidator to the Registrar shall not be divided among its members, but shall be applied by the Registrar, in whole or in part, to all or any of the following objects, namely :-

(a) any object specified in that behalf in the Bye-laws of the Society;

(b) an object of local public utility;

(c) a charitable purpose as defined in Section 2 of the Charitable Endowments Act, 1890 (6 of 1890);

(d) any union of Co-operative Societies, the object of which is the development of the Co-operative movement; and

(e) reserve fund of a new Society, if and when established with the same object and the same area of operation as of the Society wound up.

77. Cancellation of Registration of a Society :- Where in respect of a Society which has been ordered to be wound up under Section 72, no

1. Substituted by Orissa Act 23 of 1994.

2. Inserted by Orissa Act 1 of 1979.

3. Substituted by Orissa Act 23 of 1994.

35

by notification, from time to time specify.]

79. Appointment of Trustee and his Powers and Functions :- (1) The Registrar, or where the State Government appoint any other person in this behalf, such person shall be the Trustee for the purpose of securing the fulfil- ment of the obligation of the⁴[State Co-operative Agricultural and Rural Devel- opment Bank] to the holders of debenture issued by the Board.

(2) The powers and functions of the Trustee shall be governed by the provisions of this Act and by the instrument of trust executed between the Bank and the Trustee as modified from time to time by mutual agreement between the Bank and the Trustee.

80. Trustee to be a Corporation Sole :- The Trustee shall be a cor- poration sole by the name of the Trustee for the debentures and as such shall have perpetual succession and a common seal and in his corporate name shall sue and be sued.

81. Issue of debentures by the Board :- (1) With the previous sanc- tion of the Trustee, the Board may from time to time issue debentures of one or more denominations for such periods as it may deem expedient on the security of the mortgages and assets held by or transferred or deemed under the pro- visions of Section 87 to have been transferred by the¹[Co-operative Agricul- tural and Rural Development Bank] to the¹[State Co-operative Agricultural and Rural Development Bank] and other properties of such Bank.

(2) Such debentures may contain a term fixing a period not exceeding ten years from the date of issue during which they shall be irredeemable or reserving to the Board the right to call in at any time of the debentures in advance of the date fixed for redemption after giving to the debenture-holder concerned not less than three months notice in writing.

(3) The total amount due on the debentures issued by the Board and outstanding at any time shall not exceed the aggregate of-

(a) the total amount due on the mortgages held by the¹[State Co- operative Agricultural and Rural Development Bank] or transferred or deemed under the provisions of Section 87 to have been transferred to it by the¹[Co-operative Agricultural and Rural Development Bank] and the value of the assets in respect of the land mortgage business held by the¹[State Co-operative Agricultural and Rural Development Bank] and subsisting at such time; and

(b) the amounts paid under the mortgages aforesaid and remaining in the hands of the Board or of the Trustee at that time.

(4) Notwithstanding anything contained in this Chapter-

(a) the Board may, with the previous sanction of the Trustee, issue

1 . Substituted by Act 23 of 1 994.

2. Substituted by Orissa Act 5 of 1970.

36

(4) Every notification and notice referred to in Sub-Section (3) shall, where the maximum amount of the guarantee is to be restricted or the condi- tions subject to which the guarantee is given are to be modified, set forth precisely the scope and effect of the restriction or modification, as the case may be.

1 [83-A. Grant of loan by 2 [Co-operative Agricultural and Rural Development Bank] :- Any²[Co-operative Agricultural and Rural Develop- ment Bank] may grant loan to its members against the creation of a charge on or mortgage of land free of encumbrances].

3 [ 1 [83-B. Applicant for loan to make a declaration :- (1) Every applicant for a loan to a²[Co-operative Agricultural and Rural Development Bank] shall make a declaration in the form prescribed by the⁴[Co-operative Agricultural and Rural Development Bank] before an officer authorised by the Registrar this behalf, on solemn affirmation that the land sought to be in mort- gaged is free from all encumbrances and that the mortgagor is in possession thereof and has the right to create the mortgage.

(2) The declaration made under Sub-Section (1) shall be conclusive, final and binding.

(3) If at any time a declaration made under Sub-Section (1) is found to be false or defective, the¹[Co-operative Agricultural and Rural Development Bank] shall, subject to the provisions of Section 85, have a first charge on all other movable and immovable properties of the applicant, and all such proper- ties shall be deemed to have been included in the mortgage deed and the Development Bank may proceed against all such properties of the mortgagor under Section 91.

Explanation - A charge created under Section 34 shall not constitute an encumbrance for the purposes of this Section and Section 83-A.

(4) Only those applications which conform to the requirements of Sub- Section (1) shall, in accordance with the Rules made in that behalf, be taken into consideration by the bank.]

2 [83-C. Order granting loan conclusive of certain matters :- A written order by the¹[Co-operative Agricultural and Rural Development Bank] or any Committee or other person authorised by this Act or the bye-laws of the bank to grant loans for any of the purposes specified in the bye-laws of the concerned bank, granting, either before or after the commencement of this Act, a loan for the benefit of the land or for any productive purpose specified therein shall, for the purposes of this Act, be conclusive of the following mat- ters, namely :-

(a) that the work described or the purpose for which the loan is granted is an improvement or productive purpose, as the case may be, within the meaning of the bye-laws of the Society;

1 . Deleted by Orissa Act 5 of 1 970.

2. Substituted by Orissa Act 23 of 1994.

37

more of the co-sharers of a Hindu Joint Family or by any Co-owner or by any purchaser from them, who is or are in possession of the said property on the date of the mortgage or charge and such possession is certified by a Revenue Officer not below the rank of a Revenue Inspector in the form to be prescribed by the¹[State Co-operative Agricultural and Rural Development Bank], the same shall remain a first charge on the said land and the certificate of posses- sion so granted shall be conclusive and binding and shall not be called in ques- tion in any Court or Tribunal.

(2) Notwithstanding anything contained in any other law, custom or us- age to the contrary, any loan given by a¹[Co-operative Agricultural and Rural Development Bank] shall remain a first charge on the property so mortgaged till it is fully satisfied and discharged, notwithstanding a partition, settlement, sale, gift, transfer, encumbrance, charge or any other liability made or created, whether by or through Court, or under any Act, mutual agreement, arbitration or by any other means, and any person who acquires the said property in any manner whatsoever shall be liable to discharge the loan.

(3) The aforesaid provisions shall apply notwithstanding the provisions of the Orissa Consolidation of Holdings and Prevention of Fragmentation of Land Act, 1972 (Orissa Act 21 of 1972) and the Orissa Land Reforms Act, 1960 (Orissa Act 16 of 1960).]

84. Other guarantees by State Government :- Where the³[State Co-operative Agricultural and Rural Development Bank] or a³[Co-operative Agricultural and Rural Development Bank] has given a loan to a member for the development of any land in excess of the amount of the loan to which such member would be entitled on the basis of the value of the land as determined in accordance with the principles of valuation approved by the State Govern- ment, the State Government may, if they think fit, guarantee for a specified period the repayment of the loan to the extent of the excess. 1 [85. Priority of mortgage over certain claims :- (1) Notwithstanding anything contained in any law for the time being in force but subject to any claim of the Government in respect of land revenue or any money recoverable as arrears of land revenue and to the provisions of Sub-Section (2), any debt or outstanding demand due to the²[State Co-operative Agricultural and Rural Development Bank] or any²[Co-operative Agricultural and Rural Development Bank] on account of a mortgage executed by any member or past or deceased member in favour of such bank shall be a first charge upon the land so mort- gaged.

(2) Any such mortgage as aforesaid shall also have priority over any claim of the Government arising from a loan under the Land Improvement Loans Act, 1883 (19 of 1883) or the Agriculturists Loans Act, 1884 (12 of 1884), granted after the execution of the mortgage.

1. Substituted by Orissa Act 23 of 1994.

2 . Substituted by Orissa Act 5 of 1970.

38

2 [87-A. Transfer of Mortgages. :- (1) Notwithstanding anything con- tained in this Act or in the relative mortgage bonds, the mortgages executed in favour of the¹[State Co-operative Agricultural and Rural Development Bank] by the individual members thereof shall be deemed to be mortgages executed in favour of the¹[Co-operative Agricultural and Rural Development Bank] oper- ating in the area wherein the mortgaged properties are situate and the said members shall be deemed to be members and debtors of such¹[Co-operative Agricultural and Rural Development Bank] with effect from the date on which the¹[State Co-operative Agricultural and Rural Development Bank] transfers the amounts due thereon and the shares held by the members to the¹[Co- operative Agricultural and Rural Development Bank] concerned.

(2) Notwithstanding anything contained in this Act or in the relative mortgage bonds, a mortgage executed in favour of a¹[Co-operative Agricul- tural and Rural Development Bank] in respect of properties situate within the area of operation of another¹[Co-operative Agricultural and Rural Develop- ment Bank] newly or subsequently established shall be deemed to be executed in favour of such other bank and the mortgagor shall be deemed to be a member and debtor of such other bank with effect from the date on which the former bank transfers the amounts due thereon and the shares held by the member to the later bank.

(3) All moneys due under a mortgage transferred under this Section shall be payable to the¹[Co-operative Agricultural and Rural Development Bank] to which the mortgage is transferred under Sub-Section (1) or Sub-Section (2) and such bank shall be entitled to receive money, to grant valid discharge and to sue on the mortgage or take any other proceedings for the recovery of money due thereunder.]

88. Power of¹[Co-operative Agricultural and Rural Development Bank] to receive money and grant discharge :- Notwithstanding that a mortgage executed in favour of a¹[Co-operative Agricultural and Rural Devel- opment Bank] has been transferred, or is deemed under the provisions of Section 87, to have been transferred, to the¹[State Co-operative Agricultural and Rural Development Bank] -

(a) all moneys due under the mortgage shall, in the absence of any specific direction to the contrary issued by the Board or Trustee and communicated to the mortgagor, be payable to such¹[Co- operative Agricultural and Rural Development Bank] and such payment shall be as valid as if the mortgage had not been so transferred ; and

1 . Inserted by Orissa Act 1 of 1 979.

2. Substituted by Orissa Act 23 of 1994.

3. Substituted by Orissa Act 28 of 1991.

4. Substituted by Orissa Act 11 of 2004.

5. Omitted by ibid.

6. Substituted by Orissa Act 28 of 1991.

7. Substituted by Orissa Act 11 of 2004.

39

anything contained in the Transfer of Property Act, 1882 (4 of 1882) where a power of sale without the intervention of the Court is expressly conferred on the²[State Co-operative Agricultural and Rural Development Bank] or the²[Co- operative Agricultural and Rural Development Bank] by the mortgage deed, the Board or the Committee of such bank, as the case may be, or any person authorised by such Board or Committee in this behalf shall, in case of default of payment of the mortgage money or any part thereof have power, in addition to any other remedy available to the bank, to bring the mortgaged property to sale without the intervention of the Court after hearing the objections, if any, of the mortgagor.

(2) No such power shall be exercised unless and until-

(a) notice in writing requiring payment of such mortgage money or any part thereof, as the case may be, has been served upon-

(i) the mortgagor;

(ii) any person who has any interest in or charge upon the property mortgaged or in or upon the right to redeem the same;

(iii) any surety for the payment of the mortgage debt or any part thereof; and

(iv) any creditor of the mortgagor who has in a suit for the administration of his estate obtained a decree for sale of the mortgaged property; and

(b) default has been made in payment of such mortgage money or part thereof for three months after such service.

92. Powers of²[Co-operative Agricultural and Rural Develop- ment Bank] where mortgaged property is destroyed or security be- comes insufficient :- Where any property mortgaged to the²[State Co- operative Agricultural and Rural Development Bank] or a²[Co-operative Agri- cultural and Rural Development Bank] is wholly or partially destroyed or the security is rendered insufficient and the mortgagor, having been given a rea- sonable opportunity by the Board or the Committee of such bank, as the case may be, for providing further security to render the whole security sufficient or of repaying such portion of the loan as may be determined by the Board or Committee, has failed to provide such security or to repay such portion of the loan, the whole of the loan shall be deemed to fall due at once and the Board or the Committee, as the case may be, shall be entitled to take action against the mortgagor under Section 90 or 91 for the recovery thereof. Explanation - A security is insufficient within the meaning of this Section unless the value of the mortgaged property exceeds the amount for the time

1. Substituted by Orissa Act 11 of 2004.

2 . Substituted by ibid.

40

may, on the application of a¹[Co-operative Agricultural and Rural Development Bank] and under circumstances in which the powers of sale conferred by Section 91 may be exercised, appoint in writing a receiver of the produce and income of the mortgaged property or any part thereof and such receiver, shall be entitled either to take possession of the property or collect its produce and income, as the case may be, to retain out of any money realised by him, his expenses of management including his remuneration, if any, as may be fixed by the Board and to apply the balance in accordance with the provisions of Sub-Section (8) of Section 69-A of the Transfer of Property Act, 1882 (4 of

1882).

(2) A receiver appointed under Sub-Section (1) may for sufficient cause and on application made by the mortgagor, be removed by the Board.

(3) A vacancy in the office of the receiver may be filled up by the Board.

(4) Nothing in this Section shall empower the Board to appoint a receiver where the mortgaged property is already in the possession of a receiver appointed by a Civil Court.

97. Mortgagor's powers to lease :- (1) Notwithstanding anything contained in the Transfer of Property Act, 1882 (4 of 1882) or any other law for the time being in force, a mortgagor shall not grant a lease of the mortgaged property for a period exceeding five years.

(2) Any lease granted in contravention of Sub-Section (1) shall be void.

98. Registration of documents executed on behalf of a¹[Co- operative Agricultural and Rural Development Bank] or of the

[State

Co-operative Agricultural and Rural Development Bank] :- (1) Notwithstanding anything contained in the Indian Registration Act, 1908 (16 of

41