Chapter V- Privileges of a co-operative society, Section 37

This section deals with the mortgaging of an immovable property by co-operative society members by borrowing loans from certain societies. It states that-

(i) any member or tenant who makes a loan application to a society, must state the loan amount in the application which the society must pay to him along with the interest he is bound to pay on the loan.

(ii) if a member or a tenant in a co-operative society, borrowed a loan on his property before this Act came into a force, he must write a declaration on the form detailing the charge created.

(iii) Any declaration made by the member under clause (i) or (ii) may be varied at any time by him with the consent of the society in favour of which such a charge is created.

(iv) No member or tenant can dispose off a property or that part of a property on which he has created an interest or charge until the entire loan amount, with the interest agreed upon has been fully paid, unless he obtains a written permission to that effect from the society.

(v) If the member or tenant disposes of or alienates such a property, which violates clause (iv), that alienation will be void.

(vi) Unless the government has a prior interest in the property in terms of land revenue recovery, the first charge on that property will always be in the favour of the society.

(vii) the record of rights shall also include the particulars of every charge on land or interest created under a declaration under clause (i) or clause (ii) along with anything contained in any law relating to land revenue for the time being in force.

(viii) An application for the recovery of any sum due to a society as a result of the declaration under clause (i) or clause (ii) made by a society must accompanied by a certificate signed by the Registrar, be recoverable by the Collector, according to the law and under the rules for the time being in force for the recovery of land revenue.