Section 20 of The Co-operative Societies Act, 1912
A registered society shall have a charge upon the share or interest in the capital and on the deposits of a member or past member and upon any dividend, bonus or profits payable to a member or past member in respect of any debt due from such member or past member to the society, and may set-off any sum credited or payable to a member or past member in or towards payment of any such debt.
Summary
- This provision gives the registered society the power to hold onto a member's financial assets within the society to cover their debts.
- The society can place a charge (a legal hold) on the shares, capital interest, or deposits of any member or past member who owes them money.
- The society can also hold any dividend, bonus, or profit payments that are supposed to go to the member.
- The society is allowed to set-off (directly deduct) the debt amount from any money it is supposed to pay the member.
Practical examples
FAQ
1. How can a society recover debts from a member's shares under section 20 of The Co-operative Societies Act, 1912?
Under section 20 of The Co-operative Societies Act, 1912, the society has a charge upon the share, interest, and deposits of a member. This means it holds a special right over these funds to cover debts.
2. Does this rule apply to past members under section 20 of this 1912 law?
Yes, section 20 of this 1912 law applies to the shares and deposits of both current and past members.
3. Can the society take member profits to settle a debt according to section 20 of the co-operative societies rules?
Yes, according to section 20 of the co-operative societies rules, the society can set off any dividend, bonus, or profit payable to the member to pay down their debt.
Test yourself
Q1.Under Section 20 of The Co-operative Societies Act, 1912, which of the following funds can a registered society NOT place a charge upon for a member's debt?
Q2.What action does Section 20 of The Co-operative Societies Act, 1912 permit a society to take regarding a sum it owes to a debt-burdened member?
Q3.According to Section 20 of The Co-operative Societies Act, 1912, who is subject to the society's power of charge and set-off?
Q4.Under Section 20 of The Co-operative Societies Act, 1912, what kind of financial return on a member's investment is explicitly vulnerable to a society's charge?