Section 38 in Andhra Pradesh Co-Operative Societies Rules, 1964
38. Disposal of reserve fund on winding up of a society.
(1)On the winding up of a society the reserve fund together with other funds constituted by the society in accordance with its bye-laws shall be applied by the liquidator to the discharge of such liabilities of the society as may remain undischarged out of the assets of the society, in the following order namely:-(a)the debts of the society,(b)the paid-up share capital ; and(c)any claim relating to the dividend upon the paid-up share capital due on the date of winding up of the society.(2)The balance of the funds of the society which is wound up remaining after the payment mentioned in sub-rule (1), shall utilised in the following manner and subject to the following conditions, namely:-(a)In the case of every such society other than a financing bank,-(i)It shall be competent for the liquidator to constitute a trust out of the surplus funds of the society for purpose of carrying out such object of public utility as may be suggested by the general body of the society so wound up and approved by the Registrar. The liquidator may, either by himself or on the suggestion of the said general body, appoint a trustee, who shall execute a deed in such form as the Registrar may, from time to time, specify and any trust so created shall be governed by the provisions of the law relating to public charitable trusts, for the time being in force.(ii)Where the liquidator has not constituted any such trust the Registrar may place the surplus funds in deposit or otherwise with a financing bank working in the area in which the society which is being wound up carried on its operation, until a new society with similar objects is registered in such area, in which case the said surplus funds shall be transferred to the reserve funds of the new society. If in the opinion of the Registrar, there is no prospect of new society being registered in such area within a reasonable time, the Registrar shall assign the amount to the bad debt reserve or the reserve fund of financing bank working in such area.(b)In the case of a financing bank, the surplus fund that shall be assigned by the Registrar to the reserve fund or other funds of any other financing bank to which the societies working in the area in which the financing bank which is being wound up carried on its operation, are affiliated. If there is no such financing bank working in the area, the Registrar shall deposit the said funds in the State Co-operative Bank until a new financing bank is formed in the area, in which case the said funds shall be transferred to the reserve fund of the new financing bank.[39. Investment of funds: - (1) A society may by [a resolution of the Managing Committee] [Substituted by G.O.Ms.No. 37, Agriculture & Coop. (Co-Operative IV), dated 28-1-2002.][Substituted by G.O.Ms.No. 37, Agriculture & Coop. (Co-Operative IV), dated 28-1-2002. ] invest the whole or any portion of its funds other than the reserve fund and such other funds not available for investment on such terms as determined by the General Body:(a)In the purchase of shares of corporate bodies formed for the benefit of such societies or class of societies; and(b)in the purchase or lease of land or other immovable property or in the acquisition, construction or reconstruction of any building that may be necessary to conduct its business :Provided that the amount of funds so invested under clause (1) shall be recouped on such terms as may be determined in each case by the General Body.(2)The provisions of sub-rule (1) shall not apply:-(a)to immovable property purchased;(i)by a society at sale held in execution of a decree obtained by it, for the recovery of any sum due to it; or(ii)by a financing bank at a sale held in execution of a decree obtained by it for the recovery of any sum due to such society at a sale brought about by the liquidator of such society;(b)to the purchase or lease of lands or purchase, construction or reconstruction of buildings by a society whose objects according to its bye-laws include such purchase, lease, construction or reconstruction.(3)No recoupment of the amount invested under this rule shall be necessary where the investment is made,-(a)By a society from its building fund constituted out of its profits; and(b)by a society, other than a credit society, in which the share capital raised from the members is intended to build up the special kind of business for which it has been registered.
