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Issue of debentures by agricultural co-operative societies.
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4.—(1) An agricultural co-operative society which is authorised by its rules to borrow money may at any time, subject to the provisions of this section and with such consent of the Minister as is mentioned in this Act and whether the issue of debentures is or is not authorised, or is or is not forbidden by the rules of such society, issue debentures to any authorised lender for the purpose of securing to such lender the repayment, with or without interest, of any capital sum of money lent by such lender to such society before the issue of such debentures (whether before or after the passing of this Act) or intended to be so lent at or after such issue, or partly so lent and partly so intended to be lent.
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(2) An issue of debentures shall not be made by an agricultural co-operative society under this section unless either the committee of such society has power under the rules of such society to borrow money and the amount to be borrowed on the security of such debentures is within such borrowing power or a resolution approving of the making of such issue has been passed by a special meeting of the shareholders of such society convened expressly for the purpose of considering and, if thought fit, passing such resolution.
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(3) The following provisions shall apply to debentures issued by an agricultural co-operative society under this section, that is to say:—
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(a) such debentures may be expressed to charge the money secured thereby in either or both of the following ways, that is to say, by way of fixed charge on any specified property (including uncalled capital) of such society or by way of floating charge on the assets, property, and undertaking (either with or without specified exceptions) for the time being and from time to time belonging to such society;
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(b) such debentures may contain all or any such provisions for enforcing or making effective the security thereby afforded as are usually contained in debentures issued by a limited company;
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(c) such debentures shall operate and have effect in accordance with the terms thereof so far as such terms are authorised by this Act.
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(4) An issue of debentures made by an agricultural co-operative society under this section may consist either of a single debenture to secure the whole amount of the sum of money for the securing of which such issue is made or of a series of debentures for separate sums ranking pari passu and amounting in the aggregate to the full amount of the said sum of money, and in any event shall rank in priority to any issue of debentures subsequently made by such society under this section.
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(5) An issue of debentures made by an agricultural co-operative society under this section may be accompanied and collaterally secured by a trust deed of the general character usual in respect of trust deeds entered into for similar purposes in relation to an issue of debentures or debenture stock by a limited company.
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(6) Whenever an issue of debentures is made under this section by an agricultural co-operative society, the authorised lender to whom such debentures are issued shall, within twenty-one days after the issue thereof, apply in the prescribed form and manner to the Minister for the registration of such issue in the register, and if such authorised lender fails so to apply for such registration every debenture comprised in such issue shall, upon the expiration of the said period of twenty-one days, become and be null and void.
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