THE PUNJAB AGRICULTURE CREDIT OPERATIONS AND MISCELLANEOUS PROVISIONS (BANKS) ACT, 1978

GOVERNMENT OF PUNJAB 

 

DEPARTMENT OF LEGAL AND LEGISLATIVE AFFAIRS 

 

THE PUNJAB AGRICULTURE CREDIT OPERATIONS AND 

MISCELLANEOUS PROVISIONS (BANKS) ACT, 1978 

 

(PUNJAB ACT 5 OF 1979) 

(As amended upto the 15thAugust, 2025) 

 

 

 

 

 

 

 

 

2025 

 

 

 

 

 

 

 

 

 

 

 

 

 



THE PUNJAB AGRICULTURE CREDIT OPERATIONS AND 

MISCELLANEOUS PROVISIONS (BANKS) ACT, 1978 

CONTENTS 

Preamble  

Sections 

 

CHAPTER I 

PRELIMINARY 

1.  Short title, extent and commencement 

2. Definitions 

CHAPTER II 

RIGHTS OF AGRICULTURISTS TO CREATE CHARGE ON LAND AND 

INTRESTS THEREIN IN FAVOUR OF BANKS 

3. Charge on crop and other moveable property in favour of bank 

4. Creation of charge on land in favour of bank by declaration 

4-A. Registration of charge in favour of bank 

4-B. Nothing of charge created in favour of bank in the record of   rights 

CHAPTER III 

CHARGES AND MORTGAGES IN FAVOUR OF BANKS AND THEIR 

PRIORITIES 

5. Removal of disability in creation of charges and mortgages 

6. Priority of charges and mortgages in favour of Government bank and Co-

operative society  

7. Restrictions on creation of tenancy by agriculturist borrower  

CHAPTER IV 

ARRANGEMENTS FOR RECOVERY OF DUES BY BANKS 

8. Recovery of dues of bank through prescribed authority 

9. Rights of bank to acquire and dispose of immovable property 

CHAPTER V 

FINANCING OF CO-OPERATIVE SOCIETIES BY BANKS 

10. Bank eligible to become member of Co-operative society 

11. Power of Co-operative societies to borrow from bank 

12. Inspection of books of Co-operative society by bank 

13. Disputes between bank and Co-operative society 

14. Settlement of disputes 

15. Procedure for hearing of disputes 

16. Decision of Registrar or his nominee or board of nominees 

17. Recovery of money awarded 



18. Powers of banks to proceed against defaulting members of co-operative 

society 

19. Audit, inspection and inquiry reports of societies to be available to banks 

CHAPTER VI 

MISCELLANEOUS 

20. Exemption from legislations relating to money lending and agriculturist’s debt 

relief 

21. Mortgages executed by managers of joint Hindu families 

22. Modified application of section 8 of Central Act 32 of 1956 

23. Power to make rules 

 Schedule 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



1THE PUNJAB AGRICULTURE CREDIT OPERATIONS AND 

MISCELLANEOUS PROVISIONS (BANKS) ACT, 1978 

(Punjab Act No. 5 of 1979) 

 [Received the assent of the President of India on the 7th March, 1979 and was 

first published for general information in the Punjab Government Gazette 

(Extraordinary), Legislative Supplement, dated the 27th March, 1979.]  

1 2 3 4 

Year No. Short Title Whether repealed or otherwise 

affected by the legislation  

1979 5 The Punjab 

Agriculture Credit 

Operations and 

Miscellaneous 

Provisions (Banks) 

Act, 1978 

 

Amended by Punjab Act No. 12 

of 2014 

 

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 or incidental thereto. 

 BE it enacted by the Legislature of the State of Punjab in the Twenty-ninth 

Year of the Republic of India as follows :- 

CHAPTER I 

PRELIMINARY 

1.  (1) This Act may be called the Punjab Agricultural Credit Operations and 

Miscellaneous Provisions (Banks) Act, 1978. 

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

 (3) It shall come into force on such date as the State Government may, by 

notification, appoint and different dates may be appointed for different provisions 

of this Act and for different areas of the State. 

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

                                                             
1For Statement of Objects and Reasons. seePunjab Government Gazette (Extraordinary), 1978, Page 1486 

Definitions.  

Short title, 

extent and 

commencement

. 

https://indiankanoon.org/doc/143358047/
https://indiankanoon.org/doc/53035490/
https://indiankanoon.org/doc/9466696/
https://indiankanoon.org/doc/146550527/
https://indiankanoon.org/doc/37432310/


(a) "agriculture" and "agricultural purpose" shall include making land fit 

for cultivation, cultivation of land, improvement of land including 

development of sources of irrigation, raising, protecting and 

harvesting of crops, horticulture, forestry, planting and farming, 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 breeders, 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 any 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 per centum of the paid up share 

capital of which is held by the Central Government or by any State 

Government or Governments or partly by the Central Government and 

partly by one or more State Governments; 

(d) "bank" means – 

(i) a banking company as defined in the Banking Regulation Act, 

1949; 

(ii) the State Bank of India constituted under the State Bank of 

India Act, 1955; 

(iii) a subsidiary bank as defined in the State Bank of India 

(Subsidiary Banks) Act, 1959; 

(iv)  any of the banks mentioned in column 2 of the First Schedule to 

 the Banking Companies (Acquisition and Transfer of 

Undertakings) Act, 1970; 

https://indiankanoon.org/doc/186645220/
https://indiankanoon.org/doc/136949227/
https://indiankanoon.org/doc/19044082/
https://indiankanoon.org/doc/128415364/


(v) any banking institution notified by the Central Government 

under section 51 of the Banking Regulation Act, 1949; 

(vi) the Agricultural Refinance Corporation constituted under the 

Agricultural Refinance Corporation Act, 1963; 

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

(viii) the Agricultural Finance Corporation Limited, a company 

incorporated under the Companies Act, 1956; 

(ix) any other financial institution notified by the State Government 

in the Official Gazette as a bank for the purposes of this Act1[; 

and] 

2[(x) the Punjab State Co-operative Bank, the Central Co-operative 

Banks, Urban Co-operative Banks, Primary Co-operative 

Agriculture Development Banks, Primary Co-operative 

Societies granting financial assistance to its members, registered 

under the Punjab Co-operative Societies Act, 1961;]  

(e) "co-operative society" means a co-operative society as defined in 

clause (c) of section 2 of the Punjab Co-operative Societies Act, 1961, 

the object of which is to provide financial assistance as defined in 

clause (f) of this section to its members and includes the co-operative 

land mortgage bank; 

(f) "financial assistance" means assistance granted by way of loans, 

advances, guarantee or otherwise for agricultural purpose; 

(g) "Registrar" means the Registrar as defined in clause (j) of section 2 of 

the Punjab Co-operative Societies Act, 1961. 

CHAPTER II 

RIGHTS OF AGRICULTURISTS TO CREATE CHARGE ON LAND AND 

INTERESTS THEREIN IN FAVOUR OF BANKS 

                                                             
1Substituted for sign “;” by Punjab Act No. 12 of 2014, Section 2 
2Added by Punjab Act No. 12 of 2014, Section 2 

Charge on 

crop and other 

moveable 

property in 

favour of 

bank.  

https://indiankanoon.org/doc/152409621/
https://indiankanoon.org/doc/101132600/
https://indiankanoon.org/doc/181157274/


3.  (1) It shall be lawful for an agriculturist to create a charge on the 

moveable property owned by him or on the crops raised by him, standing or 

otherwise, to the extent of his interest therein, in favour of a bank, to secure 

financial assistance from that bank, notwithstanding that he may not be the owner 

of the land on and from which the crop is raised. 

 (2) Notwithstanding anything to the contrary contained in the Punjab Co- 

operative Societies Act, 1961, or any other law for the time being in force, no 

charge in respect of financial assistance extended by a co-operative society to an 

agriculturist shall have priority over a charge on the crops raised by him, standing 

or otherwise, or any other moveable property in respect of any financial assistance 

given to him by a bank: 

 Provided that the financial assistance made by the bank is – 

(a) prior in point of time to that of the financial assistance extended 

by the co-operative society; and 

(b) on a certificate, in the form prescribed, from the co-operative 

 society or co-operative societies in the area where the 

agriculturist resides. 

 (3) A co-operative society in the area where the agriculturist holds land 

shall on demand by him issue a certificate referred to in sub-section (2). 

 (4) The Registrar or any other person appointed by him in this behalf 

shall prepare a list of co-operative societies registered under the Punjab Co-

operative Societies Act, 1961, and publish the same in the Official Gazette after 

such interval as may be prescribed. 

 (5) A bank may distrain and sell through an official of the State 

Government, designated in this behalf by the State Government, the crop or other 

produce or other moveables charged, to that bank to the extent of the agriculturist's 

interest therein and appropriate the proceeds of such sale towards all money due to 

the bank from that agriculturist. 

4.  (1) Where an agriculturist creates a charge on land, or any other 

immoveable property which he owns or in which he has an interest in respect of 

Creation of 

charge on land 

in favour of 

bank by 

declaration.  

https://indiankanoon.org/doc/30241174/
https://indiankanoon.org/doc/164681696/
https://indiankanoon.org/doc/77303596/
https://indiankanoon.org/doc/57893688/
https://indiankanoon.org/doc/198818291/
https://indiankanoon.org/doc/74919777/
https://indiankanoon.org/doc/31486624/
https://indiankanoon.org/doc/198733120/
https://indiankanoon.org/doc/136697332/
https://indiankanoon.org/doc/23991821/


any financial assistance given to him by a bank, he may make a declaration on the 

lines of the form set out in the Schedule or as near thereto as circumstances permit, 

declaring that thereby he creates, in favour of the bank, a charge on such land or 

other immoveable property or his interest therein, 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 every such variation shall take effect as if it had 

been an original declaration. 

1[4-A. (1) Notwithstanding anything contained in the Registration Act, 1908 

(Central Act 16 of 1908), a charge in resect of which a declaration has been made 

under sub-section (1) of section 4 of this Act or in respect of which a variation has 

been made under sub-section (2) of section 4 of this Act, shall be deemed to have 

been duly registered in accordance with the provisions of that Act with effect from 

the date of such charge or variation, as the case may be, provided that the bank 

sends to the Sub-Registrar or Joint Sub-Registrar within the local limits of whose 

jurisdiction the whole or any part of the property charged is situated, within a 

period of sixty days, through a registered post acknowledgement due or in person, 

a copy of the document creating such charge or variation duly certified to be true 

copy by an employee of the bank authorized to sign on its behalf. 

 (2) The Sub-Registrar or the Joint Sub-Registrar, as the case may be, 

receiving the declaration referred to in sub-section (1), as immediately as 

practicable on receipt thereof, record in a register to be maintained in this behalf, 

the fact of the receipts of such declaration or variation.  

4-B. Wherever a charge is created on the land in favour of a bank by an 

agriculturist under section 4 of the Act, the bank may given intimation in writing to 

the Tehsildar or Naib-Tehsildar within the local limits of whose jurisdiction the 

whole or any part of the property charged is situated or such other revenue official 

as may be designated in this behalf by the State Government, of the particulars of 
                                                             
1 Inserted by Punjab Act No. 12 of 2014, Section 3 

Nothing of 

charge 

created in 

favour of 

bank in the 

record of 

rights.  

Registration 

of charge in 

favour of 

bank. 

https://indiankanoon.org/doc/154023362/


the charge in its favour. The Tehsildar, Naib-Tehsildar or other revenue official 

shall make a note of the particulars of charge in the record of rights relating to the 

land over which the charge has been created.] 

CHAPTER III 

CHARGES AND MORTGAGES IN FAVOUR OF BANKS AND THEIR 

PRIORITIES 

5.  Notwithstanding anything to the contrary contained in the Punjab Co-

operative Societies Act, 1961, or any other law for the time being in force and 

notwithstanding that any land or interest therein stands already charged or 

mortgaged to a co-operative society, it shall be lawful for an agriculturist to create 

a charge or mortgage on such land or interest therein in favour of a bank as 

security for any financial assistance given to the agriculturist by that bank. 

6.  (1) Notwithstanding anything to the contrary contained in any law for the 

time being in force but subject to any prior claim of the State Government in 

respect of land revenue, -  

(a) no charge or mortgage created on any land or interest therein 

after the commencement of this Act, in favour of the State 

Government or a co-operative society shall have priority over a 

charge or mortgage on such land or interest created by an 

agriculturist in favour of a bank as security for financial 

assistance given to the agriculturist by the bank after the 

commencement of this Act and prior to the charge or mortgage 

in favour of the State Government or the co-operative society; 

and 

(b) any charge or mortgage created on any land or interest therein 

in favour of a bank in respect of financial assistance given to an 

agriculturist by that bank shall have priority over any other 

charge or mortgage that may have been created over such land 

or interest in favour of any person other than the State 

Government, a co-operative society or any other bank, prior to 

Removal of 

disability in 

creation of 

charges and 

mortgages.  

Priority of 

charges and 

mortgages in 

favour of 

Government, 

bank and co-

operative 

society.  

 

https://indiankanoon.org/doc/138840443/
https://indiankanoon.org/doc/23469730/
https://indiankanoon.org/doc/104599579/
https://indiankanoon.org/doc/46624878/
https://indiankanoon.org/doc/172330526/


the date on which the charge or mortgage was created in favour 

of the bank. 

 (2) Where different charges or mortgages over the same land or interest 

therein have been created by an agriculturists in favour of the State Government, a 

co-operative society or a bank or more than one bank, any such charge or mortgage 

created as security for financial assistance given by the State Government, Co-

operative society or the bank or banks by way of term loans for development 

purposes shall have priority over the other charges or mortgages created in favour 

of the State Government, co-operative society or any of the banks, provided prior 

notice of any such financial assistance by way of term loan for development 

purposes had been given to the State Government, co-operative society or bank and 

the State Government, co-operative society or bank has concurred in such financial 

assistance, and where more than one such charge or mortgage is as security for 

financial assistance given by way of term loan, the charges or mortgages by way of 

security for term loan for development purposes will rank for priority in 

accordance with the dates of their creation. 

 Explanation,- For the purposes of this section "term loan for development 

purposes" shall mean financial assistance which would generally lead to 

improvement of agriculture or building up of assets in agriculture but shall not 

include financial assistance for meeting working capital, expenses for seasonal 

agricultural operations and marketing of crops. 

 (3) Nothing contained in this section shall apply to borrowings only from 

one or more co-operative societies including land mortgage banks. 

7.  (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 tenancy 

rights on such land or interest therein without prior permission in writing of the 

bank if he has not already leased or created tenancy rights thereon at the time of 

availing of the financial assistance from the bank. 

Restrictions on 

creation of 

tenancy by 

agriculturist 

borrower.  

https://indiankanoon.org/doc/95503348/
https://indiankanoon.org/doc/35652587/
https://indiankanoon.org/doc/39942715/
https://indiankanoon.org/doc/113723244/


 (2) Any lease granted or tenancy rights created in contravention of this 

section shall be void. 

CHAPTER IV 

ARRANGEMENTS FOR RECOVERY OF DUES BY BANKS 

8.  (1) An official of the State Government notified by the State Government 

as the prescribed authority for the purpose of this section may, on the application 

of a bank, make an order against 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 or any land or any 

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 any land or any interest therein or any other immoveable 

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 amounts due. 

 (2) Every order passed by the prescribed authority under sub-section (1) 

shall be deemed to be a decree of a civil court and shall be executed in the same 

manner as a decree of such Court. 

 (3) The bank shall pay to the State Government such fee as may be 

prescribed for the services rendered by the State Government in connection with 

the recovery of dues of the bank. 

 (4) Nothing contained 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. 

9.  (1) Notwithstanding anything contained in any law for the time being in 

force, a bank shall have the 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 assistance availed of by him, 

provided the said land or interest therein or any other immovable property has been 

Recovery or 

dues of bank 

through 

prescribed 

authority.  

Right of bank 

to acquire and 

dispose of 

immovable 

property.  

https://indiankanoon.org/doc/132862172/
https://indiankanoon.org/doc/39429979/
https://indiankanoon.org/doc/186590099/
https://indiankanoon.org/doc/186438815/
https://indiankanoon.org/doc/156097890/
https://indiankanoon.org/doc/138980706/
https://indiankanoon.org/doc/18013803/


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 moneys 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 indicated in sub-section (2), the period of lease shall 

not exceed one year at a time and the lessee shall not acquire any interest in that 

land or property notwithstanding any provision to the contrary contained in any 

other law for the time being in force. 

CHAPTER V 

FINANCING OF CO-OPERATIVE SOCIETIES BY BANKS 

10.  Notwithstanding anything contained in the Punjab Co-operative Societies 

Act, 1961, 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. 

11.  Notwithstanding anything contained in the Punjab Co-operative Societies 

Act, 1961, it shall be lawful for any co-operative society to borrow from a bank. 

 

12.  (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 the previous sanction in writing of the Registrar. 

 (3) The officer or any other member of the paid staff of the bank 

undertaking such inspection, shall, at all reasonable times, 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 society such information, statements and returns as may be required by him to 

Bank eligible to 

become 

member of co-

operative 

society.  

Inspection of 

books of co-

operative 

society by 

bank.  

Power of Co-

operative 

societies to 

borrow from 

bank.  

https://indiankanoon.org/doc/96423884/
https://indiankanoon.org/doc/92845460/
https://indiankanoon.org/doc/29065636/
https://indiankanoon.org/doc/147286128/
https://indiankanoon.org/doc/164714264/
https://indiankanoon.org/doc/61978929/
https://indiankanoon.org/doc/177224812/
https://indiankanoon.org/doc/46695073/


assess the financial condition of the society in order to ensure the safety of 

financial assistance to be made or already made to it. 

13.  (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 than dispute regarding the disciplinary 

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 for decision. 

 (2) Where any question arises whether, for purposes of sub-section (1), a 

matter referred to for decision is a dispute or not, the question shall be decided by 

the Registrar whose decision shall be final. 

14.  (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 13, the Registrar shall 

decide the dispute himself or refer it for disposal to the nominee or a board of 

nominees appointed by him. 

 (2) Where any dispute is referred under sub-section (1) 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 himself or refer it again for decision 

to any other nominee or board of nominees appointed by him. 

 (3) Notwithstanding anything contained in section 13, the Registrar may 

if he thinks fit, suspended 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 in a regular suit 

instituted by one of the parties to the dispute, but if such suit is not instituted 

within two months from the Registrar's order suspending proceedings, the 

Registrar shall take action as is provided in sub-section (1). 

15.  The Registrar or his nominee or board or board of nominees shall hear the 

dispute under section 14 in the manner prescribed by the Registrar in this behalf. 

 

Disputes 

between bank 

and co-operative 

society.   

Settlement of 

disputes.  

Procedure for 

hearing of 

disputes.  

https://indiankanoon.org/doc/182483903/
https://indiankanoon.org/doc/40517573/
https://indiankanoon.org/doc/47749732/
https://indiankanoon.org/doc/199631125/
https://indiankanoon.org/doc/39265510/
https://indiankanoon.org/doc/66121131/
https://indiankanoon.org/doc/197916198/
https://indiankanoon.org/doc/156089753/


 

 

16.  When the dispute is referred for decision, the Registrar or his nominee or 

the board of nominees may, after giving a reasonable opportunity to the parties for 

the dispute to be heard, make an award on the dispute, on the expenses incurred by 

the parties to the disputes 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. 

17.   Every award given by the Registrar or his nominee or the board of 

nominees under section 16, 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. 

18.  (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 

money due by them, the bank may direct the committee of such society to proceed 

against such members by taking action under the Punjab Co-operative Societies 

Act, 1961. 

 (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 

directions from the Bank, the bank may itself proceed against such defaulting 

members in which event the provisions of the Punjab Co-operative Societies Act, 

1961, the rules and 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. 

 (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. 

Decision of 

Registrar or his 

nominee or 

board of 

nominees.  

Powers of banks 

to proceed 

against 

defaulting 

members of co-

operative 

society.  

Recovery of 

money 

awarded.  

https://indiankanoon.org/doc/14692287/
https://indiankanoon.org/doc/124404327/
https://indiankanoon.org/doc/125340051/
https://indiankanoon.org/doc/10169961/
https://indiankanoon.org/doc/92825575/
https://indiankanoon.org/doc/39678481/


 

19. The Registrar shall draw the attention of the bank financing a co- operative 

society to the defects noticed in every audit, inquiry or inspection of such society 

conducted under the provisions of the Punjab Co-operative Societies Act 1961, and 

shall also supply a copy of such audit, inquiry or inspection report, if demanded in 

writing by the bank. 

CHAPTER VI 

MISCELLANEOUS 

20.  Noting in any law for the time being in force dealing with money-lending or 

agriculturist's debt relief shall apply to financial assistance availed of by an 

agriculturist from a bank. 

 

21.  (1) Notwithstanding anything contained in any law for the time being in 

force, mortgages executed after the commencement of this Act by the manager of a 

joint Hindu family in favour of a bank for securing financial assistance for an 

agricultural purpose shall be binding on every member of such joint Hindu family. 

 (2) Where a mortgage executed in favour of bank is called in question on 

the ground that it was executed by the manager of a joint Hindu family for a 

purpose not binding on the members (whether such members have attained 

majority or not) thereof, the burden of proving the same shall lie on the party 

alleging it. 

22.  Section 8 of the Hindu Minority and Guardianship Act, 1956, shall apply to 

mortgages in favour of a bank subject to the modification that reference to the 

Court therein shall be construed as reference to the Collector or his nominee and 

the appeal against the order of the Collector or his nominee shall lie to the 

Commissioner. 

23.  (1) 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. 

Audit, inspection 

and inquiry 

reports of 

societies to be 

available to 

banks.  

Exemption from 

legislations 

relating to money 

lending and 

agriculturist's 

debt relief.  

Mortgages 

executed by 

managers of joint 

Hindu families.  

Modified 

application of 

section 8 of 

Central Act 32 of 

1956. 

Power to make 

rules.  

https://indiankanoon.org/doc/3478534/
https://indiankanoon.org/doc/71807129/
https://indiankanoon.org/doc/10911366/
https://indiankanoon.org/doc/197214224/
https://indiankanoon.org/doc/138258520/
https://indiankanoon.org/doc/60714558/
https://indiankanoon.org/doc/13743546/
https://indiankanoon.org/doc/80041726/


 (2) The rules framed under sub-section (1) shall be subject to previous 

publication. 

 (3) Every rule made under this section shall be laid as soon as may be 

after it is made, before the House of the State Legislature while it is in session for a 

total period of ten days which may be comprised in one session or in two or more 

successive sessions and if, before the expiry of the session in which it is so laid or 

the successive sessions aforesaid, the House agrees in making any modification in 

the rule or the House agrees that the rule should not be made the rule shall 

thereafter have effect only in such modified form or be of no effect, as the case 

may be so, however, that any such modification or annulment shall be without 

prejudice to the validity of anything previously done or omitted to be done under 

that rule. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

https://indiankanoon.org/doc/92719755/
https://indiankanoon.org/doc/180650026/


 

 

SCHEDULE 

Declaration under Section 4(1) 

 

I, ________________________________aged________________________years) 

residing at _______________, being desirous of availing myself of financial 

assistance from the ______________________________bank, make this 

declaration as required by sub-section (1) of section 4 of the Punjab Agricultural 

Credit Operations and Miscellaneous Provisions (Banks) Act, 1978, that I, 

______________________own land/other immovable property/have interest as a 

tenant in the land specified below, and I hereby create a charge on the said land, 

other immovable property, interest in land in favour of the bank for securing the 

financial assistance which the bank may make and for all future assistance, if any, 

which the bank may make to me together with interest and costs and expenses 

thereon. 

 

 

    

Name of  Name of  Name of  Khasra  Boundaries   Area 

Revenue Tehsil  District Number South, North, East  in 

Acres 

 Estate       West  

    

1 2 3 4 5 6 

 

Encumbrances, if any 

 

 

Assessment   Approximate Nature Amount Remarks, if any 

Rupees Paise Value 

  

7 8 9 10            11 

 



 In witness whereof, I, _____________________________hereunder set my 

hand this __________________________day of ___________________in the year 

one thousand nine hundred and ____________________________________ 

 Witnesses :  

 Signed and delivered by the above named in the presence of – 

 (1) _______________________________ 

 (2) _______________________________ 

 

 

        Signature of Declarant  

 

 

 


	CHAPTER I PRELIMINARY
	1.  (1) This Act may be called the Punjab Agricultural Credit Operations and Miscellaneous Provisions (Banks) Act, 1978.
	(2) It extends to the whole of the State of Punjab.
	(3) It shall come into force on such date as the State Government may, by notification, appoint and different dates may be appointed for different provisions of this Act and for different areas of the State.
	2.  In this Act, unless the context otherwise requires, -
	(a) "agriculture" and "agricultural purpose" shall include making land fit for cultivation, cultivation of land, improvement of land including development of sources of irrigation, raising, protecting and harvesting of crops, horticulture, forestry, p...
	(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 per centum of the ...
	(d) "bank" means –
	(i) a banking company as defined in the Banking Regulation Act, 1949;
	(ii) the State Bank of India constituted under the State Bank of India Act, 1955;
	(iii) a subsidiary bank as defined in the State Bank of India (Subsidiary Banks) Act, 1959;
	(iv)  any of the banks mentioned in column 2 of the First Schedule to  the Banking Companies (Acquisition and Transfer of Undertakings) Act, 1970;
	(v) any banking institution notified by the Central Government under section 51 of the Banking Regulation Act, 1949;
	(vi) the Agricultural Refinance Corporation constituted under the Agricultural Refinance Corporation Act, 1963;
	(vii) the Agro-Industries Corporation as defined in clause (c);
	(viii) the Agricultural Finance Corporation Limited, a company incorporated under the Companies Act, 1956;
	(ix) any other financial institution notified by the State Government in the Official Gazette as a bank for the purposes of this Act [; and]
	[(x) the Punjab State Co-operative Bank, the Central Co-operative Banks, Urban Co-operative Banks, Primary Co-operative Agriculture Development Banks, Primary Co-operative Societies granting financial assistance to its members, registered under the P...
	(e) "co-operative society" means a co-operative society as defined in clause (c) of section 2 of the Punjab Co-operative Societies Act, 1961, the object of which is to provide financial assistance as defined in clause (f) of this section to its member...
	(f) "financial assistance" means assistance granted by way of loans, advances, guarantee or otherwise for agricultural purpose;
	(g) "Registrar" means the Registrar as defined in clause (j) of section 2 of the Punjab Co-operative Societies Act, 1961.

	CHAPTER II RIGHTS OF AGRICULTURISTS TO CREATE CHARGE ON LAND AND INTERESTS THEREIN IN FAVOUR OF BANKS
	3.  (1) It shall be lawful for an agriculturist to create a charge on the moveable property owned by him or on the crops raised by him, standing or otherwise, to the extent of his interest therein, in favour of a bank, to secure financial assistance f...
	(2) Notwithstanding anything to the contrary contained in the Punjab Co- operative Societies Act, 1961, or any other law for the time being in force, no charge in respect of financial assistance extended by a co-operative society to an agriculturist ...
	Provided that the financial assistance made by the bank is –
	(a) prior in point of time to that of the financial assistance extended by the co-operative society; and
	(b) on a certificate, in the form prescribed, from the co-operative  society or co-operative societies in the area where the agriculturist resides.
	(3) A co-operative society in the area where the agriculturist holds land shall on demand by him issue a certificate referred to in sub-section (2).
	(4) The Registrar or any other person appointed by him in this behalf shall prepare a list of co-operative societies registered under the Punjab Co-operative Societies Act, 1961, and publish the same in the Official Gazette after such interval as may...
	(5) A bank may distrain and sell through an official of the State Government, designated in this behalf by the State Government, the crop or other produce or other moveables charged, to that bank to the extent of the agriculturist's interest therein ...
	4.  (1) Where an agriculturist creates a charge on land, or any other immoveable property which he owns or in which he has an interest in respect of any financial assistance given to him by a bank, he may make a declaration on the lines of the form se...
	(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 every such variation shall take effect as if it had been an original decl...
	[4-A. (1) Notwithstanding anything contained in the Registration Act, 1908 (Central Act 16 of 1908), a charge in resect of which a declaration has been made under sub-section (1) of section 4 of this Act or in respect of which a variation has been ma...
	(2) The Sub-Registrar or the Joint Sub-Registrar, as the case may be, receiving the declaration referred to in sub-section (1), as immediately as practicable on receipt thereof, record in a register to be maintained in this behalf, the fact of the re...
	4-B. Wherever a charge is created on the land in favour of a bank by an agriculturist under section 4 of the Act, the bank may given intimation in writing to the Tehsildar or Naib-Tehsildar within the local limits of whose jurisdiction the whole or an...

	CHAPTER III CHARGES AND MORTGAGES IN FAVOUR OF BANKS AND THEIR PRIORITIES
	5.  Notwithstanding anything to the contrary contained in the Punjab Co-operative Societies Act, 1961, or any other law for the time being in force and notwithstanding that any land or interest therein stands already charged or mortgaged to a co-opera...
	6.  (1) Notwithstanding anything to the contrary contained in any law for the time being in force but subject to any prior claim of the State Government in respect of land revenue, -
	(a) no charge or mortgage created on any land or interest therein after the commencement of this Act, in favour of the State Government or a co-operative society shall have priority over a charge or mortgage on such land or interest created by an agri...
	(b) any charge or mortgage created on any land or interest therein in favour of a bank in respect of financial assistance given to an agriculturist by that bank shall have priority over any other charge or mortgage that may have been created over such...
	(2) Where different charges or mortgages over the same land or interest therein have been created by an agriculturists in favour of the State Government, a co-operative society or a bank or more than one bank, any such charge or mortgage created as s...
	Explanation,- For the purposes of this section "term loan for development purposes" shall mean financial assistance which would generally lead to improvement of agriculture or building up of assets in agriculture but shall not include financial assis...
	(3) Nothing contained in this section shall apply to borrowings only from one or more co-operative societies including land mortgage banks.
	7.  (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 fin...
	(2) Any lease granted or tenancy rights created in contravention of this section shall be void.

	CHAPTER IV ARRANGEMENTS FOR RECOVERY OF DUES BY BANKS
	8.  (1) An official of the State Government notified by the State Government as the prescribed authority for the purpose of this section may, on the application of a bank, make an order against any agriculturist or his heir or legal representative, di...
	9.  (1) Notwithstanding anything contained in any law for the time being in force, a bank shall have the power to itself acquire agricultural land or interest therein or any other immovable property which has been charged or mortgaged to it by an agri...
	(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 indicated in sub-section (2), the period of lease shall not exceed one year at a time and the lessee shall not acquire any interest in that land o...

	CHAPTER V FINANCING OF CO-OPERATIVE SOCIETIES BY BANKS
	10.  Notwithstanding anything contained in the Punjab Co-operative Societies Act, 1961, 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.
	11.  Notwithstanding anything contained in the Punjab Co-operative Societies Act, 1961, it shall be lawful for any co-operative society to borrow from a bank.
	12.  (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 the previous sanction in writing of the Registrar.
	(3) The officer or any other member of the paid staff of the bank undertaking such inspection, shall, at all reasonable times, have access to the books of accounts, documents, securities, cash and other properties, belonging to or in the custody of t...
	13.  (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...
	(2) Where any question arises whether, for purposes of sub-section (1), a matter referred to for decision is a dispute or not, the question shall be decided by the Registrar whose decision shall be final.
	14.  (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 13, the Registrar shall decide the dispute himself or refer it for disposal to the nominee or a board of nominee...
	(2) Where any dispute is referred under sub-section (1) 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 ...
	(3) Notwithstanding anything contained in section 13, the Registrar may if he thinks fit, suspended 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 ...
	15.  The Registrar or his nominee or board or board of nominees shall hear the dispute under section 14 in the manner prescribed by the Registrar in this behalf.
	16.  When the dispute is referred for decision, the Registrar or his nominee or the board of nominees may, after giving a reasonable opportunity to the parties for the dispute to be heard, make an award on the dispute, on the expenses incurred by the ...
	17.   Every award given by the Registrar or his nominee or the board of nominees under section 16, 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 ...
	18.  (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 money due by them, the bank may direct the committee of such society to proceed against such ...
	(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 directions from the Bank, the bank may itself proceed against such defaulting members in ...
	(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 t...
	19. The Registrar shall draw the attention of the bank financing a co- operative society to the defects noticed in every audit, inquiry or inspection of such society conducted under the provisions of the Punjab Co-operative Societies Act 1961, and sha...

	CHAPTER VI MISCELLANEOUS
	20.  Noting in any law for the time being in force dealing with money-lending or agriculturist's debt relief shall apply to financial assistance availed of by an agriculturist from a bank.
	21.  (1) Notwithstanding anything contained in any law for the time being in force, mortgages executed after the commencement of this Act by the manager of a joint Hindu family in favour of a bank for securing financial assistance for an agricultural ...
	(2) Where a mortgage executed in favour of bank is called in question on the ground that it was executed by the manager of a joint Hindu family for a purpose not binding on the members (whether such members have attained majority or not) thereof, the...
	22.  Section 8 of the Hindu Minority and Guardianship Act, 1956, shall apply to mortgages in favour of a bank subject to the modification that reference to the Court therein shall be construed as reference to the Collector or his nominee and the appea...
	23.  (1) 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.
	(2) The rules framed under sub-section (1) shall be subject to previous publication.
	(3) Every rule made under this section shall be laid as soon as may be after it is made, before the House of the State Legislature while it is in session for a total period of ten days which may be comprised in one session or in two or more successiv...

	SCHEDULE