Co-operative Societies Act, 1912

Section 20 of the Co-operative Societies Act, 1912 - Charge and Set-Off in Respect of Shares or Interest of Member

Section 20 gives a registered co-operative society a statutory charge over specified financial interests of a member or past member and permits the society to apply sums credited or payable to that person towards a debt due to the society.

Text and scope of Section 20

Section 20 - Charge and set-off in respect of shares or interest of member.

A registered society has a charge over the share or interest in its capital, deposits, and any dividend, bonus or profits payable to a member or past member in respect of a debt due from that person to the society. The section also permits the society to set off a sum credited or payable to the member or past member towards payment of that debt.

The provision forms part of the statutory privileges of registered societies. In practical terms, it protects the society where money is due from a member or past member while the society itself holds or owes amounts falling within Section 20.

Meaning of charge under Section 20

A charge under Section 20 is a statutory security over the financial interests identified by the provision. It attaches to the member's or past member's share or interest in the society's capital, deposits, and dividend, bonus or profits payable by the society, to secure a debt due to the society.

Meaning of set-off under Section 20

Set-off means adjustment of a sum credited or payable to a member or past member against a debt that the same person owes to the registered society. The section therefore authorises adjustment within the categories covered by its language instead of requiring the society first to pay the amount to the member and separately recover the debt.

What property and payments are covered?

the share or interest of a member or past member in the capital of the registered society;
deposits of the member or past member;
dividend payable to the member or past member;
bonus payable to the member or past member; and
profits payable to the member or past member.

When can the right be used?

The statutory right is linked to a debt due from the member or past member to the registered society. Whether a particular amount is due, and the procedure for recovery or adjustment, may also depend on the applicable co-operative law, rules, by-laws and facts governing the society and the transaction.

Relationship with Section 21

Section 21 follows Section 20 and protects a member's share or interest in the capital of a registered society from attachment or sale under a court decree or order, expressly subject to Section 20. Reading the provisions together shows the special statutory position accorded to the society's own charge and set-off rights.

Applicability note: Co-operative societies are also regulated through State and Union Territory legislation. Before relying on the 1912 Act for a particular society or dispute, verify the law presently applicable in the relevant jurisdiction and to that category of society.

Official legal source

For the authoritative central text, see the Co-operative Societies Act, 1912 on India Code. The official text places Section 20 under the chapter dealing with privileges of registered societies.

This page provides general legal information and should be read with the current applicable statute, rules, amendments and jurisdiction-specific co-operative law.