Agricultural Co-Operative Societies (Debentures) Act, 1934

Application of called-up capital subject to charge.

8.—(1) Whenever the uncalled capital of a society registered under the Industrial and Provident Societies Act, 1893 , is subject to a charge made under this Act by debenture, order, or otherwise, no part of the capital of such society which is called-up after the making of such charge shall, so long as any principal money or interest secured by such charge is outstanding and unpaid, be applied for any purpose other than in or towards payment of such principal money and interest.

(2) Whenever any part of the called-up capital of a society registered under the Industrial and Provident Societies Act, 1893 , is applied in contravention of this section, every member of the committee of such society shall be guilty of an offence under this section and shall be liable on summary conviction thereof to a fine not exceeding twenty-five pounds.

(3) Where a member of the committee of a society is charged with an offence under this section, it shall be a good defence to such charge for such member to prove that he did not vote for and was not a party to or responsible, directly or indirectly, for the wrongful application of called-up capital which is alleged to constitute such offence.