State Act

THE KARNATAKA CO-OPERATIVE SOCIETIES ACT, 1959.

1[79. Issue of debentures.- (1) With the previous sanction of the State Government and the Trustee, and subject to such terms and conditions as the State Government may impose, the 2[State Agriculture and Rural Development Bank]2 in 1 the discharge of its function as a 2[Agriculture and Rural Development Bank]2 may issue debentures of such denominations 3[or take loans]3 , for such period, and at such rates of interest, as it may deem expedient 4[on the security of,— (a) mortgage or mortgages 2[or the hypothecation of the agricultural machinery 1[or on the basis of charges created on the lands of the borrowers under section 33]1 or other assets created out of the loan]2 already held; or 1[(aa) Charges already created under section 33 on the land owned by members or on the interest in the land held by such members as tenants;]1 (b) mortgage or mortgages 1[or the hypothecation of the agricultural machinery or other assets created out of the loan]1 to be acquired; or 1[(bb) charges to be created under section 33 on the lands owned by members or on the interest in the land held by such members as tenants;]1 (c) partly on mortgage 1[or the hypothecation of the agricultural machinery or other assets created out of the loan]1 held and partly to be acquired; or 1[(cc) partly on charges already created and partly on charges to be created under section 33 on the lands owned by members or on the interest in the land held by such members as tenants;]1 (d) the guarantee of the State Government guaranteeing the full amount of principal and interest on debentures 1[or loans]1 until the date of complete discharge of the debentures; or (e) partly on mortgages held or to be acquired and partly on the Government guarantee for the principal and interest till the complete discharge of the debentures [or loans]1 ; and (f) properties and other assets of the 1[Agriculture and Rural Development Banks.]1 ]4 (2) Every debenture may contain a term fixing a period not exceeding thirty years from the date of issue during which it shall be redeemable, or reserving to the *board* the right to redeem at any time in advance of the date fixed for debenture not less than three months’ notice in writing. (3) The total amount due on debentures issued 1[or loans taken]1 by the 2[State Agriculture and Rural Development Bank]2 , and outstanding at any time, shall not exceed— (a) where debentures are issued 1[or loans are taken against mortgages or charges on lands or hypothecations of agricultural machinery or other assets created out of loans]1 held, the aggregate of— (i) the amounts due on the mortgages; (ii) the value of the properties and other assets transferred or deemed to have been transferred under section 85 by the Primary 1[Agriculture and Rural Development Banks]1 to the 1[State Agriculture and Rural Development Bank]1 and subsisting at such time; and (iii) the amounts paid under the mortgages aforesaid and the unsecured amounts remaining in the hands of the 1[State Agriculture and Rural Development Bank]1 or the Trustee at the time; (b) where debentures are issued 1[or loans are taken]1 otherwise than on mortgages held, the total amount as calculated under clause (a) increased by such portion of the amount obtained on the debentures as is not covered by a mortgage.]1