(1) If a Co-operative Society is unable to pay its debts to a bank from which it has borrowed, by reason 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 Uttar Pradesh Co-operative Societies Act, 1965. U. P. Act no. XI of 1966.
(2) If the committee of the Co-operative Society fails to proceed against its defaulting members within a period of ninety 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 Uttar Pradesh Co-operative Societies Act, 1965, the rules and the bye-laws made thereunder shall apply as if all references to the society or its committee in the said provisions, rules and bye-laws were references to the bank.
1 (3) Notwithstanding anything in the Uttar Pradesh Co-operative Societies Act, 1965, where a bank1 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.
1 Provided that if any such member who was not a party to any proceedings referred to in sub-section (2) disputes the existence or amount of debt due from him to the ociety the objection shall be decided in the appropriate execution proceedings.2
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