| CHAPTER VII |
| PROPERTIES & FUNDS OF MULTI-STATE CO-OPERATIVE
|
| Funds not to be divided by way of profits. |
| 62- | Funds not to be divided by way of profits. |
|
| | (1) | No part of the funds, other than net profits, of a multi-State co-operative society shall be divided by way of bonus or dividend or otherwise distributed among its members. | | | (2) | The net profits of a multi-State co-operative society referred to in sub-section (1) in respect of a society earning profits shall be calculated by deducting from the gross profit for the year, all interest accrued and accruing in relation to amounts which are overdue, establishment charges, interest payable on loans and deposits, audit fees, working expenses including repairs, rent, taxes and depreciation, bonus payable to employees under the law relating to payment of bonus for the time being in force, and equalisation fund for such bonus, provision for payment of income-tax and making approved donations under the Income-tax Act, 1961 (43 of 1961), rebate, provision for development fund, bad debt fund, price fluctuation fund, dividend e ualisation fund, share capital redemption fund, investment fluctuation fund, provision for retirement benefits to employees, and after providing for or writing off bad debts and losses not adjusted against any fund created out of profit: | | | | Provided that such society may add to the net profits for the year interest accrued in the preceding years, but actually recovered during the year: | | | | Provided further that in the case of such multi-State co-operative societies as do not have share capital, the surplus of income over expenditure shall not be treated as net profits and such surplus shall be dealt with in accordance with the bye-laws. |
|
| 63- | Disposal of net profits. |
|
| | (1) | A multi-State co-operative society shall, out of its net profits in any year – |
|
| | | (a) | Transfer an amount not less than twenty-five per cent to the reserve fund; | | | | (b) | Credit one per cent. to co-operative education fund maintained, by the National Co-operative Union of India Limited, New Delhi, in the manner as may be prescribed; | | | | (c) | Transfer an amount not less than ten per cent. to a reserve fund for meeting unforeseen losses. |
|
| | (2) | Subject to such conditions as may be prescribed, the balance of the net profits may be utilised for all or any of the following purposes, namely – |
|
| | | (a) | payment of dividend to the members on their paid-up share capital at a rate not exceeding the prescribed limit; | | | | (b) | constitution of, or contribution to, such special funds including education funds, as may be specified in the bye-laws; | | | | (c) | donation of amounts not exceeding five per cent of the net profits for any purpose connected with the development of co-operative movement or charitable purpose as defined in section 2 of the Charitable Endowments Act, 1890 (6 of 1890); | | | | (d) | payment of extraction amount to employees of the multi-State co-operative society to the extent and in the manner specified in the bye-laws. |
|
| Investment of funds. |
| 64- | A multi-State co-operative society may invest or deposit its funds – |
|
| | | (a) | in a co-operative bank, State co-operative bank, co-operative land development bank or Central co-operative bank; or | | | | (b) | in any of the securities specified in section 20 of the Indian Trusts Act, 1882 (2 of 1882); or | | | | (c) | in the shares or securities of any other multi-State co-operative society or any co-operative society; or | | | | (d) | in the shares, securities or assets of a subsidiary institution or any other institution; or | | | | (e) | with any other bank; or | | | | (f) | in such other mode as may be provided in the bye-laws. | | | | | Explanation.-For the purposes of clause (e), ''bank'' means any banking company as defined in clause (c) of section 5 of the Banking Regulation Act, 1949 (10 of 1949), and includes – |
|
| | | | (i) | the State Bank of India constituted under the State Bank of India Act, 1955 (23 of 1955); | | | | | (ii) | a subsidiary bank as defined in clause (k) of section 2 of the State Bank of India (Subsidiary Banks) Act, 1959 (38 of 1959); | | | | | (iii) | a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970 (5 of 1970) or a corresponding new bank constituted under section 3 of the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1980 (40 of 1980). |
|
| 65- | Restriction on contribution. | | | No multi-State co-operative society shall make a contribution, either in money or in kind, whether directly or indirectly, to an institution which has an object of furtherance of the interest of a political party. | | 66- | Restriction on loans. |
|
| | (1) | A multi-State co-operative society, other than a co-operative bank, shall not make a loan to a member on the security of his share or on the security of a non-member. | | | (2) | Notwithstanding anything contained in sub-section (1), a multi-State co-operative society may make a loan to a depositor on the security of his deposit. |
|
| 67- | Restriction on borrowing. |
|
| | (1) | A multi-State co-operative society may receive deposits, raise loans and receive grants from external sources to such extent and under such conditions as may be specified in the bye-laws:
Provided that the total amount of deposits and loans received during any financial year shall not exceed ten times of the sum of subscribed share capital and accumulated reserves:
Provided further that while calculating the total sum of subscribed share capital and accumulated reserves, the accumulated losses shall be deducted. | | | (2) | Subject to the provisions of sub-section (1), a multi-State co-operative society may accept funds or borrow funds for the fulfillment of its objects on such terms and conditions as are mutually contracted upon. | | | (3) | A multi-State co-operative society may issue non-convertible debentures or other instruments subject to the provisions of any law for the time being in force to raise resources for the fulfilment of its objects to the extent of twenty-five per cent or its paid-up share capital. |
|
| Restriction on other transactions with non-members. |
| 68- | Save as provided in sections 66 and 67, the transaction of a multi-State co-operative society with any person other than a member, shall be subject to such prohibitions and restrictions, if any, as ay be specified in the bye-laws. |
|
| 69- | Contributory provident fund. |
|
| | (1) | Subject to the provisions of the Employees' Provident Fund and Miscellaneous Provisions Act, 1952 (19 of 1952), a multi-State co-operative society having such number or class of employees as may be prescribed, may establish a contributory provident fund for the benefit of its employees to which shall be credited all contributions made by the employees and the society in accordance with the bye-laws of the society. | | | (2) | Monies standing to the credit of any contributory provident fund established by a multi-State co-operative society under sub-section (1) shall not – |
|
| | | (a) | be used in the business of the society; | | | | (b) | form part of the assets of the society; | | | | (c) | be liable to attachment or be subject to any other process of any court or other authority. |
|
|
|
