Section 19 of The Co-operative Societies Act, 1912
Subject to any prior claim of the Government in respect of land-revenue or any money recoverable as land-revenue or of a landlord in respect of rent or any money recoverable as rent, a registered society shall be entitled in priority to other creditors to enforce any outstanding demand due to the society from a member or past member—
- (a)in respect of the supply of seed or manure or of the loan of money for the purchase of seed or manure upon the crops or other agricultural produce of such member or person at any time within eighteen months from the date of such supply or loan;
- (b)in respect of the supply of cattle, fodder for cattle, agricultural or industrial implements or machinery, or raw materials for manufacture, or of the loan of money for the purchase of any of the foregoing things—upon any such things so supplied, or purchased in whole or in part from any such loan, or on any articles manufactured from raw materials so supplied or purchased.
Summary
- This provision gives the registered society the first right to collect its debts from specific assets of a member before other regular lenders can.
- The society must wait in line behind the Government collecting land revenue and landlords collecting rent.
- For loans used to buy seed or manure, the society can claim the resulting crops for up to eighteen months from the date of the loan or supply.
- For loans used to buy cattle, machinery, or raw materials, the society can claim the specific items purchased or the goods manufactured from those raw materials.
- This priority claim applies to outstanding demands from both current members and past members.
Practical examples
FAQ
1. Does a society have special rights to collect debts under section 19 of The Co-operative Societies Act, 1912?
Yes, section 19 of The Co-operative Societies Act, 1912 gives a registered society a prior claim. This means it has priority over other creditors to collect outstanding demands from members.
2. What types of debts get priority for crops under section 19 of this 1912 Act?
Under section 19 of this 1912 Act, priority is given to debts for the supply of seed, manure, or money loaned to buy them, for up to eighteen months from the supply or loan date.
3. Are there any claims higher than the society's claim according to section 19 of the co-operative societies law?
According to section 19 of the co-operative societies law, the government's claim for land revenue and a landlord's claim for rent take priority over the society's claim.
Test yourself
Q1.Under Section 19 of The Co-operative Societies Act, 1912, whose claim takes priority over the registered society's claim on a member's property?
Q2.Under Section 19 of The Co-operative Societies Act, 1912, what is the maximum time limit for a society to enforce its priority claim on crops after providing a loan for seeds?
Q3.Under Section 19 of The Co-operative Societies Act, 1912, if a society loans money to a member to buy raw materials for manufacture, which items can the society claim in priority?
Q4.Does Section 19 of The Co-operative Societies Act, 1912 apply to individuals who have left the registered society?