The Meghalaya Credit Operation and Miscellaneous Provisions Act, 1976 (Act 10 of 1976)

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(ME
GHALAYA ACT 10 OF 1976)
THE MEGHALAYA CREDIT OPERATION AND MISCELLANEOUS PROVISIONS ACT, 1976
Arrangement of Sections
Sections:-
1. Short title, extent and commencement.
2. Definitions.
3. Removal of restrictions on alienation.
4. Charge on crops and other movable property created in favour of a bank.
5. Creation of charges on land in favour of a bank by declaration.
6. Priority of mortgages and charges.
7. Registration of charge and mortgage in favour of banks.
8. Noting of charge or mortgage created in favour of a bank in the Record of Rights.
9. Restrictions on creation tenancy by an agriculturist borrower.
10. Recovery of dues of a bank through a prescribed Authority.
11. Rights of a bank to acquire and dispose of immovable property.
12. Exemption to banks from restrictions on acquisition of land in excess of ceiling.
13. Bank eligible to become member of a Co-operative Society.
14. Power of Co-operative Societies to borrow from banks.
15. Inspection of books of a Co-operative Society by a Bank.
16. Disputes between a bank and a Co-operative Society.
17. Settlement of dispute.
18. Procedure for hearing of disputes.
19. Decision of Registrar or his nominee or Board of nominees.
20. Recovery of money awarded.
21. Power of a bank to proceed against defaulting members of a Co-operative Society.
22. Audit, inspection and inquiry reports of Societies to be available to banks.
23. Exemption from legislation relating to money lending and agriculturists’ debt relief.
24. Extension to other developmental purposes.
25. Power of State Government to make rules.
1

ME
GHALAYA ACT 10 OF 1976
MEGHALAYA CREDIT OPERATION AND MISCELLANEOUS PROVISIONS ACT, 1976.
(As passed by the Assembly)
[Received the assent of the President on the 17th July, 1976]
(Published in the Gazette of Meghalaya, Extraordinary, dated 2nd August, 1976)
An
Act
to make provisions to facilitate adequate flow of credit for agricultural production and
development through Banks and other institutional credit agencies and for matters connected
therewith and incidental therto.
Be it enacted by the Legislature of Meghalaya in the Twenty-seventh Year of the Republic of
India as follows:-
Short title,
extent and
commencement.
1. (1) This Act may be called the Meghalaya Credit
Operation and Miscellaneous Provisions Act, 1976.

(2) It extends to the whole of the State of Meghalaya.

(3) It shall come into force on such date as the State
Government may, by notification in the Gazette appoint
in this behalf and different dates may be appointed for
different areas of the State.

Definitions 2. In this Act, unless the context otherwise requires:-

(a) “agriculture” and “agricultural purposes” shall
include making land fit for cultivation,
cultivation of land, improvement of land
including development of sources of irrigation,
raising and harvesting of crops, horticulture,
forestry, planting and farming, and cattle
breeding, animal husbandry, dairy farming, seed
farming, pisciculture, apiculture, sericulture,
piggery, poultry farming and such other
activities as are generally carried on by
agriculturists, dairy farmers, cattle breede rs,
poultry farmers and other categories of persons
engaged in similar activities including
marketing of agricultural products, their storage
and transport and the acquisition of implements
and machinery in connection with such activity;

(b) “agriculturist” means a person who is engaged
in agriculture ;

(c) “Agro-Industries Corporation” means a
company or other body corporate, one of the
principal objectives of which is to undertake
activities connected with or intended for the
development of agriculture and not less than
fifty-one percent of the paid- up share capital of
which is held by the Central Government or by
any State Government or State Governments or
partly by the Central Government and partly by
one or more State Governments ;

(d) “bank” means,-

(i) the Meghalaya Co -operative Apex Bank
Ltd.;

(ii) a banking company as defined in the
Banking Regulation Act, 1949 ;

(iii) the State Bank of India constituted under
the State Bank of India Act,1955;

(iv) a Subsidiary Bank of India constituted
under the State Bank of India (Subsidiary
Banks) Act, 1959 ;

(v) a corresponding new bank constituted
under section 3 of the Banking Companies
(Acquisition and Transfer of
Undertakings) Act, 1970;

(vi) any banking institution notified by the
Central Government under section 51 of
the Banking Regulation Act, 1949 ;

(vii) the Agriculture Refinance Corporation
constituted under the Agricultural
Refinance Corporation Act,1963.

(viii) the Agro -Industries Corporation as
defined in clause (c);

(ix) the Agricultural Finance Corporation
Limited a company inc orporated under the
Indian Companies Act, 1956 ; and

(x) any other financial institution notified by
the State Government in the Official
Gazette as a bank for the purpose of this
Act.

(e) “Co-operative Society” means a Co -operative
Society registered or deemed to be registered or
deemed to be registered under the Meghalaya
Co-operative Societies Act (Assam Act I of
1950 as adapted by Meghalaya) the object of
which is to provide financial assistance as
defined in clause (g) to its members and
includes a Co- operative Land Mortgage or
Development Bank ;

(f) “Crop loan” means a loan advanced to an
agriculturist for the purpose of seasonal
agricultural operations or the marketing of crops
and is recoverable within fifteen months from
the date of advancement of such loan ;

(g) “financial assistance” for the purposes of this
Act means assistance granted by way of loan,
advance, guarantee or otherwise for agricultural
purpose ;

(h) “Land” include s crops, trees, houses, and/or
other structures standing thereon.

(i) “Term loan” means a loan advanced to any
agriculturist for meeting outlay relating to the
replacement or maintenance of wasting assets
including machineries or for capital investment
designed to increase the crop output and is
repayable within any period exceeding fifteen
months but not exceeding twenty years.

Removal of restrictions
on alienation.
3. Notwithstanding anything contained in any other law for
the time being in force or in any custom or usage having
the force of law, it shall be lawful for an agriculturist to
alienate his land or any of his interest therein and
execute a charge or mortgage on such land or interest in
favour of a bank as security, for the purpose of obtaining
financial assistance from that bank.

Charge on crops and
other moveable property
created in favour of a
bank.

4. (1) It shall be lawful for an agriculturist to create a
charge on any movable property owned by him or on the
crops raised by him, standing or otherwise or other
produce from land cultivated by him, to the extent of his
interest therein, in favour of a bank, notwithstanding that
he may not be owner of the land on and from which the
crop is raised.

(2) A bank may distrain and sell through such officer of
the State Government as may be specified by the State
Government in this behalf the crop of other produce or
other movable charged to that bank to the extent of the
agriculturists’ interest therein and appropriate the
proceeds of such sale towards all moneys due to the
bank from that agriculturist.

Creation
of charges
on land in
favour of a
bank by
declaration.
5. (1) Where an agriculturist creates a charge on land, or
any other immovable property which he owns or in
which he has an interest in respect of any financial
assistance given to him by bank, he ma y make a
declaration on the lines of the form set out in the
Schedule to this Act or as near thereto as circumstances
permit, declaring that thereby he creates, in favour of the
bank, a charge on such land or his interest therein, or
other immovable property as the case may be, to secure
the financial assistance given to him by the bank.

(2) A declaration made under sub- section(1) may be
varied from time to time by the Agriculturist with the
consent of the bank in whose favour the declaration has
been made and such variation shall take effect from such
date on which the variation if it had been an original
declaration, would have effect under section 7.

Priority of mortgages
and charges.
6. (1) Notwithstanding anything contained in any other law
for the time being in force where different mortgages or
charges have been executed by an agriculturist in respect
of the same land both in favour of a bank and in favour
of any person, then the mortgage or charge executed in
favour of a bank shall have priority over the mortgage or
charge in favour of such person irrespective of the fact
whether the mortgage or charge in favour of the bank
was executed before or after the date of the mortgage or
charge in favour of such person.

(Explanation. - In this sub -section the word “person”
shall not include the State Government or any Co-
operative Society.)

(2) Where in respect of the same land different
mortgages or charges have been executed by any
agriculturist in favour of:-

(i) the State Government.
(ii) a Co-operative Society, and
(iii) one or more banks,
such mortgages or charges shall rank for priority in
accordance with the respective dates of their execution.

(3) Notwithstanding anything contained in any other
law for the time being in force, where different
mortgages or charges have been executed by any
agriculturist in respect of the same land for obtaining
crop loan from one bank and a huge subsequent term
loan from another ban, then the mortgage or charge in
relation to the subsequent term loan shall have priority
over the mortgage or charge in relation to the crop loan
provided, the mortgage or charge in relation to such
term loan was executed with the knowledge and consent
of the bank providing the crop loan.

Registration of charge
and mortgage in favour
of banks.
7.(1) Notwithstanding anything contained in the Indian
Registration Act, 1908, a charge in respect of which a
declaration has been made under sub- section (1) of
section5, or in respect of which a variation has been
made under sub- sec
tion (2) of that section, or a
mortgage executed by an agriculturist in favour of a
bank in respect of financial assistance given by that
bank shall be deemed to have been duly registered with
effect from the date of such charge, variation or
mortgage as t he case may be, provided that the bank
sends to the Deputy Commissioner or the Sub-Registrar
within the local limits of whose jurisdiction, the whole
or any part of the property charged or mortgaged is
situated, within the time stipulated by the State
Government for this purpose, by registered post
acknowledgement due, a copy of the document creating
such charge, variation or mortgage duly certified to be a
true copy by an employee of the bank authorised to sign
on its behalf.

(2) The Deputy Commissioner o r the Sub- Registrar
receiving the declaration in respect of a charge or
variation or a mortgage referred to in sub -section (1)
shall as soon as practicable on receipt thereof, record in
a register to be maintained in this behalf, the fact of the
receipt of such declaration variation on mortgage for
registration.

Noting of charge or
mortgage created in
favour of a bank in the
Record of Rights.
8. (1) Whenever a charge or a mortgage on land or
interest therein is created in favour of a bank by an
agriculturist, the bank may give intimation to the
District Council or such Revenue Official as may be
designated in this behalf by the State Government of
the particulars of the charge or mortgage in its
favour.

(2) The District Council of the Revenue Of ficial, as the
case may be, shall make note of the particulars of
charge or mortgage in the record of rights as may be
available relating to the land over which the charge or
mortgage has been created.

Restrictions on creation
of tenancy by an
agriculturist borrower.
9. (1) Notwithstanding anything contained in any law for the
time being in force, an agriculturist who has availed himself of
financial assistance from a bank by creating a charge or
mortgage on land or interest therein shall not, so long as the
financial assistance continues to be outstanding, lease or create
any interest therein without prior permission in writing of the
bank , if he had not already leased or created tenancy rights
thereon at the time of availing of the financial assistance from
the bank.

(2) Any lease granted or interest created in contravention of this
section shall be void.

Recovery of dues of a
bank through a
prescribed Authority.
10.(1) An official of the State Government notified in the
Official Gazette by the State Government as the prescribed
authority for the purpose of this section may, on the application
of a Bank , make an order on any agriculturist or his heir or legal
representative, directing the payment of any sum due to the bank
on account of financial assistance availed of by the agriculturist,
by the sale of any land or interest therein upon which the
payment of such money is charged or mortgaged;

Provided that no order shall be made by the prescribed
authority under this section for the sale of land or any interest
therein or any other immovable property upon which the
payment of money is charged or mortgaged unless the
agriculturist or the heir or legal representative of the
agriculturist, as the case may be, has been served with a notice
by the prescribed authority calling upon him to pay the amount’s
due.

(2) Every order passed by the prescribed authority in terms of
sub-section (1) shall be deemed to be a decree of a Civil Court
and shall be executed in the same manner as the decree of such
court.

(3) No thing in this section shall debar a bank from seeking to
enforce its rights in any other manner open to it under any other
law for the time being in force.

Rights of a bank to
acquire and dispose of
immovable property.
11.(1) Notwithstanding anything contained in any law of the
time being in force, a bank shall have power to itself acquire
agricultural land or interest therein or any other immovable
property which has been charged or mortgaged to it by an
agriculturist in respect of any financial assis tance availed of by
him, provided the said land or interest therein or any other
immovable property has been sought to be sold by public
auction and no person has offered to purchase it for a price
which is sufficient to pay to the bank the money due to it.

(2) A bank which acquires land or interest therein or
any other immovable property in exercise of the power
vested in it under sub- section (1) shall dispose it of by
sale within a period to be specified by the State
Government in this behalf.

(3) If the bank has to lease out any land acquired by it
under sub-section (1), pending sale thereof as provided
for in sub-
section (2), the period of lease shall not
exceed one year at a time and the lease shall not acquire
any interest in that property n
otwithstanding any
provision to the contrary in any law for the time being
in force.

(4) A sale by a bank of land or interest therein in term
of this section shall be subject to any provision of any
law in force which may place restrictions on purchase
of land by non-agriculturists or ceiling for acquisition of
land or by a person not belonging to a particular tribe or
Scheduled Caste or fragmentation of land.

Exemption banks from
restrictions on
acquisition of land in
excess of ceiling.
12.Nothing in a ny law for the time being in force
pacing a ceiling or limit on the holding of land shall
apply to a bank acquiring land in terms of section 11
and holding such land till such time, the bank is in a
position to sell the land in the manner provided in
section11 or otherwise, at a price which is adequate to
cover its dues.

Bank eligible to become
member of a Co-
operative Society.
13. Notwithstanding anything contained in the
Meghalaya Co-operative Societies Act (Assam Act I of
1950 as adapted by Meghalay a) or any law for the time
being in force, it shall be lawful for a bank to become a
member of a Co-operative Society.

Power of Co-operative
Societies to borrow from
banks.
14. Notwithstanding anything contained in the
Meghalaya Co-operative Societies’ Act (Assam Act I of
1950 as adapted by Meghalaya), it shall be lawful for
any Co-operative Society to borrow from a bank.

Inspection of books of a
Co-operative Society by
a Bank.
15. (1) A bank shall have the right to inspect the books
of any Co-operative Society which has either applied to
the Bank for financial assistance or is indebted to the
bank on account of financial assistance granted earlier.

(2) The Inspection may be carried out by an officer or
any other member of the paid staff of the bank with
previous sanction in writing of the Registrar of Co-
operative Societies.

(3) The officer or any other member of the paid staff of
the bank , undertaking such inspection, shall, at all
reasonable time, have access to the books of accounts,
documents, securities, cash and other properties
belonging to or in the custody of the Co-operative
Society inspected by him, and shall also be supplied by
such societies such information, statements and returns
as may be required by him to asses
s the financial
conditions of the Society and the safety of financial
assistance to be made to the Society or already made to
it.

Disputes between a bank
and a Co-operative
Society.
16. (1) Notwithstanding anything contained in any other
law for the time being in force, any dispute touching the
constitution, management or the business of a Co-
operative Society, between a bank financing a Co-
operative Society and the Co-
operative Society so
financed, other tha n disputes regarding the discip linary
action taken by the Society or its committee against a
paid employee of the Society, shall be referred by either
of the parties to the dispute to the Registrar of Co-
operative Societies for decision.

(2) Where any question arises whether, for the purposes
of the foregoing sub-
section, a matter referred to for
decision is a dispute or not, the question shall be
decided by the Registrar of Co- operative Societies
whose decision shall be final.

Settlement of dispute. 17. (1) If the Registrar is satisfied that any matter
referred to him or brought to his notice is a dispute
within the meaning of section 16, the Registrar shall
decide the dispute himself or refer it for disposal to a
nominee or a Board of nominees appointed by him.

(2) Where any dispute is refer red under the foregoing
sub-section for decision to the Registrar’s nominee or
Board of nominees, the Registrar may at any time, for
reasons to be recorded in writing ,withdraw such
dispute from his nominee or Board of nominees and
may decide the dispute h imself or refer it again for
decision to any other nominee or Board of nominees
appointed by him.

(3) Notwithstanding anything contained in section 16,
the Registrar, may if he thinks fit, suspend proceedings
in regard to any dispute, if the question at issue between
a Co -operative Society and a bank is one involving
complicated questions of law and fact, until the
question has been tried by a regular suit instituted by
one of the parties to the dispute. If any such suit is not
instituted within two months from the Registrar’s order
suspending proceedings, the Registrar shall take action
as is provided in subsection (1).

Procedure
for hearing of
`disputes.
18. The Registrar or his nominees or Board of nominees
hearing a dispute under the last preced ing section shall
hear the dispute in the manner that may be prescribed
by the Registrar in this behalf.

Decision of
Registrar or his
nominees
or Board of
nominees.
19. When the dispute is referred for decision, the
Registrar or his nominee or she Board of nominees
may, after giving a reasonable opportunity to the parties
to the dispute to be heard, make an aware on the
dispute, on the expenses incurred by the parties to the
dispute in connection with the proceedings and fees,
expenses payable to the Registrar or his nominee or, as
the case may be, to the Board of nominees. Such an
award shall not be invalid merely on the ground that it
was made after the expiry of the period fixed for
deciding the dispute by the Registrar and shall be
binding on the parties to the dispute.

Recovery of money
awarded.
20. Every award given by the Registrar or the
Registrar’s nominee or the Board of nominees under
section 19 shall, if not carried out, on a certificate
signed by the Registrar, be deemed to be a decree of a
Civil Court and shall be executed in the same manner as
a decree of such court.

Power of a bank to
proceed against
defaulting member of a
co-operative society.
21. (1) If a Co -operative Society is unable to pay its
debt to a bank from which it has borrowed, by reasons
of its members defaulting in the payment of the moneys
due by them, the bank may direct the Committee of
such Society to proceed against such members by
taking action under the Meghalaya Co -operative
Societies’ Act (Act I of 1950 as adapted by Meghalaya).

(2) If the Committee of a Co -operative Society fails to
proceed against its defaulting members within a period
of sixty days from the date of receipt of such direction
from the bank, the bank itself may proceed against such
defaulting members, in which event, the provisions of
the Meghalaya Co-operative Societies’ Act (Assam Act
I of 1950 as adapted by Meghalaya) the rules and the
bye-laws made thereun
der shall apply as if all
references to the Society or its Committee in the said
provision, rules and bye laws were references to the
bank.

(3) Where a bank has obtained a decree or award
against a Co -operative Society indebted to it, the bank
may proceed to recover such moneys firstly from the
assets of the Co -operative Society and secondly from
the members of the Co -operative Society to the extent
of their debts due to the Society.

Audit, instpection and
inquiry reports of
Societies to be available
to banks.
22. The Registrar of Co -operative Societies shall draw
the attention of the bank financing a Co- operative
Society to the defects noticed in every audit or inquiry
or inspection of such Society con ducted as per
provisions of the Meghalaya Co -operative Societies’
Act (Assam Act I of 1950 as adapted by Meghalaya)
and shall also supply a copy each of such audit, inquiry
or inspection report, if demanded, in writing, by the
bank.

Exemption from
legislation relating to
money lending and
agriculturists debt relief.
23. Nothing in any law for the time being in force
dealing with money-lending or agriculturists’ debt relief
shall apply to a financial assistance availed of by an
agriculturist from a bank.

Extension to other
developmental purposes.
24. The State Government may by notification, extend
from time to time the provisions of this Act to facilitate
adequate flow of credit to agriculturists and non-
agriculturists for housing, industrial, trade or any other
developmental purposes through banks.

Power of State
Government to make
rules.
25. The State Government may make rules to provide
for all matters for which provision is necessary or
expedient for the purpose of giving effect to the
provisions of this Act and all such rules shall be
published in the official Gazette.

SCHEDULE

[(See Section 5 (1))]
FORM
Declaration under sub-section (1) of section 5 of the Meghalaya Credit Operation and Miscellaneous Provisions Act, 1976.
I......................................son/daughter of Shri / Shrimati.......................................aged..............................................................................years,
Residing at.........................................P.O..................................P.S....................................District..................................................................................,being desirous
of availing of financial assistance in the form of ............................................................................from the..........................................................................................
(details of financial assistance to be stated) (name and particulars of the
Bank to be stated)
make this declaration, as required by section 5 (1) of the Meghalaya Credit Operation and Miscellaneous Provisions Act, 1976, that I own / have interest
as............................................................ the/on the land /immovable property specified below.
(details of interest to be stated and
strike out what is not applicable)
and that I hereby do create a charge on the said land/immovable property in favour of the said ...............................................................................
(her name of the Bank to be stated)
as security for the payment of the aforesaid financial assistance and for all future financial assistance, if any, which the Bank may make to me together
with interest, costs and expenses thereon.
Particulars of the land/immovable property.
Name of village, where the
land immovable property
situates.
Name of Laskarship/Nokmaship/Mouza/
Syiemship/Wahadadarship/Dolloiship/
Sirdarship,etc.,where the land/
immovable property situates
Name of Blocks where
the land/immovable
property situates.
Name of Subdivision/District
where the land/immovable
property situates
Name of P.O. and Police
Station where the land/
Immovable property
situates
1 2 3 4 5

37
37
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Description of
land/immo-
vable property
including the name of
loca-lity where
situates
Name of
Owners/with
Full address
Nature, extent
and value of
Interest of the
agriculturist
Type of land/
Immovable
Property (in
Case of land
whether wet
or dry
cultivation)
Dag No. In
case of Plain
Mouza of
Garo Hills
Town/Dag
No.
and Patta
No. where
Applicable

Area in
Acres
Approximate
value
Encum-
brance
If any, with
Nature of en-
cumbrances
Remarks, if
Any

6 7 8 9 10 11 12 13 14 15

In witness whereof, I ............................................................................................. hereunder set my hand this........................................................................
................................................. day of ....................................................... in the year one thousand nine hundred and ............................................................................

Witness:-

Signed and delivered to the above named in the presence of:-

Attested by: - Signature of Declarant .
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Forwarded with compliments to the ......................................................................................................................................with a request to include
the particulars of the Charge............................................................................. created under the declaration in the Record of Rights and returned to the
Bank for its records.
Manager/Agent,
.............................................................................................. BANK.
Place.................................................................................................
Returned with compliments to the Manager/Agent............................................................................... Bank. The Charge created u nder the
declaration is duly included in the Record of Rights on the ........................................... day of.....................................................................19 .
Revenue Officer/District Council.....................................................................................................
Forwarded with compliment to the Sub- Registrar with a request to record the particulars of the Charge ............................................................ .........
.............................................................................. created under the declaration in his office.
Manager/Agent,
.............................................................................................. BANK.
Place.................................................................................................

Returned with compliments to the Manager/Agent............................................................ Bank, the Charge created under the declaration is duly
recorded.

Sub-Registrar.
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