Section 79: Debts to be recovered

1) In case any members of a Cooperative Organization fails comply with the loan agreement or any terms or condition or bond thereof; does not repay the principal, interests and penal interests within the time stated in the deed; or the amount of loan is not used in the current scheme for which it was availed and found embezzled; the concerned Cooperative Organization may recover its principal, interests and penal interests having sold by auction the collateral security mortgaged by such a member while availing the loan or by any other means.

2) In case a member who has mortgaged a collateral in a Cooperative Organisation transfers the title of such a collateral to anyone in any manner or the value of such a collateral decreases for any reason, such borrower may be asked for additional collateral within a certain time frame.

3) In case the borrower does not submit additional collateral pursuant to sub-section (2) or the principal, interests and penal interests could not be recovered even from the collateral security mortgaged pursuant to sub-Section (1) or (2), the principal, interests and penal interests may be recovered from other assets belonging to such a borrower.

4) The amount remaining after recovery of the principal, interests and penal interests or the expenses incurred while making the recovery of the principal, interests and penal interests shall be refunded to the concerned borrower.

5) While selling by auction of collateral security or any other assets of a borrower by a Cooperative Organization under this Section, it shall write to the concerned Land Revenue Office to transfer the title of such collateral security, by registration or writing off the name of the earlier owner, in the name of the person accepting the auction according to the prevailing law and the concerned Office shall also have to carry out registration or the writing off the title and inform the same to the concerned Cooperative Organization.

6) In case the assets of collateral mortgaged in auction under this Section are not accepted by anyone, the concerned Cooperative Organisation may itself accept such assets.

7) In case the Cooperative Organization itself accepts the collateral pursuant to sub-Section (6), it shall write to the concerned Land Revenue Office to transfer the title of such a collateral by registration or writing off the name of the earlier owner and the concerned Office shall also have to carry out the registration or the writing off accordingly.

8) Other matters as to the recovery of credits shall be as prescribed.