Rule 49. Writing off of bad debts and losses | Maharashtra Co-operative Societies Rules, 1961

Rule 49. Writing off of bad debts and losses:-

All loans including interest thereon and recovery charges in respect thereof which are found irrecoverable and are certified as bad debts by the auditor appointed under Section 81 shall first be written off against the Bad Debt Fund and the balance, if any, may be written off against the Reserve Fund and the share capital of the society.
      All other dues and accumulated losses or any other loss sustained by the society which cannot be recovered and have been certified as irrecoverable by the auditor may be written off against the Reserve Fund or share capital of the society :

Provided that—
(1) no bad debts or losses shall be written off without the sanction of the general body;

(2) before any such bad debts or losses are so written off, the society, if it is affiliated and indebted to a Central Bank, shall first obtain the approval of that bank in writing and also the approval of the Registrar. If the society is affiliated but not indebted to the Central Bank and in all other cases it shall obtain the approval of the Registrar in writing. If the society itself is a Central Bank, approval of the State Co-operative Bank and the approval of the Registrar shall first be obtained :
Provided that in case of societies classified as A or B at the time of last audit, no such permission need be taken if the bad debts are to be written off against the Bad Debt Fund specially created for the purpose :

Provided further that the Registrar may, while giving the approval, impose such conditions as to the recoupment of the Bad Debt Fund and restoration of part or whole of the amount written off against the Reserve Fund, from out -of future profits as he deems fit.

1(49A. Calculation of net profits:-
(1) A society shall calculate the net profits by deducting the following from the gross profits for the year -
    (i) all interest accrued and accruing oh amounts of overdue loans (excepting overdue amounts of loans against fixed deposit, gold, etc.);
    (ii)O interest payable on loans and deposits;
    (iii) establishment charges;
    (iv) audit fees or supervision fees;
    (v) working expenses including repairs, rent and taxes;
    (VI) depreciation;
    (vii) bonus payable to employees under the Payment of Bonus Act, 1965;
    (viii) provision for payment of Income-tax;
    (ix) amount to be paid as contribution to the Education Fund at the State Federal Society which may be notified by the State Government in this behalf;
    (x) amount to be paid for contribution to the Co-operative Cadre Employment Fund;
    (xi) provision for bad and doubtful debts;
    (xii) provision for share capital Redemption Fund;
    (xiii) provision for Investment Fluctuations Fund;
    (xiv) provision for retirement benefits to the employees;
    (xv) provision for any other claims admissible under any other law;
    (xvi) provision for bad debts and revenue losses not adjusted against any fund created out of profits.

(2) In addition to the sums referred to in sub-rule (1) of this rule, the following sums shall be deducted by a society from its profits :-
(i) contribution, if any. to be made to any sinking fund or guarantee fund,constituted under the provisions of the Act, these rules or by-laws of the society for ensuring due fulfillment of guarantee given by Government in respect of loans raised by the society;

Footnotes:
1. Ins. by G.N. of 16-10-1987.
(ii) provision considered necessary for depreciation in the value of any Security Bonds or Shares held by the society as part of its investments.

(3) The net profit thus arrived at together with the amount of profits brought forward from the previous year shall be available for appropriation.]