Art Of Teaching

This blog is in response to some members of Krishnalaya Housing Cooperative Society asking me to write a blog on Co-operative Societies.

Model Bye–Laws of Cooperative Housing Society

VII. MEMBERS, THEIR RIGHTS, RESPONSIBILITIES AND LIABILITIES

I. MEMBERSHIP

(A) Classes of Members: Bye Law No 16

The Membership of the Society shall consist of (i) Members, including Associate Members and (ii) Nominal Members.

(B) Eligibility for Membership: Bye Law No 17, 18

Bye Law No 17(a) Eligibility for Membership of the Society 

No individual shall be admitted as a Member of a Society except the following that is to say –

i.	Individual who is competent to contract under the Indian Contract Act, 2;
ii.	A Firm, Company or any other Body Corporate constituted under any Law for the time being in force, or a Society registered under the Societies Registration Act, 1860;
iii.	A Society registered, or deemed to be Registered, under the Act;
iv.	The State Government or the Central Government;
v.	A Local Authority;
vi.	A Public Trust registered under any Law for the time being in force for the registration of such trusts;

Bye Law No 17(b) Eligibility of Minor or a Person of unsound mind for Membership of the Society

A minor or a person of unsound mind, inheriting shares and/or interest of the deceased Member in the capital/property of the Society, or if nominated may be eligible for admission to Membership of the Society through his guardian or legal representative on an application in the prescribed form, along with undertakings / declarations, in the prescribed forms, mentioned in the application.

(C) Conditions for Membership: Bye Law No 19, 20, 21

Bye Law No 19(a) Conditions for Individuals desiring to be Member of the Society 

An individual / applicant who is eligible to be the Member and who has applied for Membership of the Society in the prescribed form, may admitted as Member by the Committee on complying with the following conditions :-

i.	Applicant has fully tendered the value of at least Ten shares of the Society, along with his Application for Membership;
ii.	Applicant has paid the Entrance Fee of Rs. 100/-, along with the Application for Membership;
iii.	Applicant has submitted the application as prescribed, of the particulars in regard to any house, plot or flat owned by him or any of the Members of his family, anywhere in the area of operation of the Society;
iv.	Applicant has submitted undertaking in the prescribed form to the effect that he shall use the flat / unit for the purpose for which it was purchased by him;
v.	Applicant has furnished an undertaking in the prescribed form, if he / she has no independent source of income;
vi.	Applicant has submitted, along with the application for Membership of the Society, a certified copy of the agreement, duly stamped and registered entered into by him / her/ them with the Promoter Builder or Transferor under Section 4 of the Maharashtra Ownership of Flats Act;
vii.	Applicant has furnished such other undertakings/declarations, in the prescribed forms as are required under any law for the time being in force and such other information as is required under the Bye-laws of the Society along with the application for Membership.
viii.	In case of Societies registered under the jurisdiction of special planning Authority like CIDCO / MHADA / SRA / MMRDA etc. the applicant should be eligible person as per the provision of respective Act and the directives of the Govt. / the Planning Authorities, if any.

Note: The conditions at (iii), (iv), (v), and (vii) above shall not be applicable to the Promoter Builder, applying for Membership of the Society, in respect of the unsold flats.

Bye Law No 19(b) Conditions of Associate membership of the Society

An Individual, a Firm, a Company or a Body Corporate, registered under any Law for the time being in force, who/ which is eligible to be an Associate Member and who/which shall apply through Member in the prescribed form for such Membership, along with the entrance fee of Rs. 100/-, may be admitted as Associate Member by the Committee.

An Associate Member in a Cooperative Housing Society

Published on December 13, 2020 by Advocate H M Suthar, A Rotarian, Advocate, core competence -cooperatives, Properties, succession laws based in Mumbai since 1982.

Please take note of important changes in the definition of an Associate Member as per amended Maharashtra Cooperative Societies Act w.e.f. 9/03/2019. I have also noted the provision prior to amendment of the law so that the amended legal position become very clear.

1.  The Associate Member is a person who has been admitted as member on written recommendation of a member of cooperative housing society to exercise his rights and duties with his written consent. This was the position even prior to amended law.

2.  The Associate Member is a person who must not have interest in the flat in that cooperative housing society. Prior to amendment a person having interest in the property/ flat was also called Associate Member if his name was not first in the share certificate. After amendment, a person having interest in the flat is called Joint Member, whose name is not first in the share certificate.

3.  The Associate Member is a person whose name must not be in the share certificate. Prior to amendment an Associate Member’s name was to be endorsed on the share certificate.

4.  The Associate Member must be one of the close relatives namely, husband, wife, father, mother, brother, sister, son, daughter, son-in law, daughter-in law, nephew, or niece. Prior to amendment any person could be admitted as Associate Member who was not required to be a relative of the member.

5.  The Associate Member can participate in the election and become a committee member or its office bearer, with written consent of the member. This was also the provision prior to amendment of the law.

Bye Law No 20. Conditions for Nominal Membership of the Society 

A Sublette, a licensee, a care-taker, or occupant who is eligible to be a Nominal Member and who shall apply through Member for such Membership in the prescribed form applicable, along with entrance fee of Rs. 100/- may be admitted as Nominal Member by the Committee.

What is difference between associate member and joint member?

Prior to amendment a person having interest in the property/ flat was also called Associate Member if his name was not first in the share certificate. After amendment, a person having interest in the flat is called Joint Member, whose name is not first in the share certificate.13-Dec-2020

Who is a defaulter under the Maharashtra Cooperative Housing Society Act?

In case of housing societies, a member, who defaults on due payment to the society within three months from the date of service of notice in writing, served by post under certificate of posting, demanding the payment of dues, is known as a defaulter.

Maharashtra Cooperative Societies Act: Rights and duties of CHS members

Under the Maharashtra Cooperative Societies Act, a member of a CHS has the following rights and duties:

He must be issued a certificate of allotment by the cooperative housing society.

Members are not eligible to be appointed, nominated, elected, co-opted or become a member of a committee, if they are a defaulter.

The member of the society has to pay the dues of the society within the stipulated time.

The member will have to vacate the flat when required, for redevelopment of the building.

Maharashtra Cooperative Societies Act: Voting rights of CHS members

One member of the society has one vote.

Associate members will have the right to vote, with the prior written consent of a member.

Provisional members have no right to vote.

In case of joint members, the person whose name stands first in the share certificate, will have the right to vote. In his absence, the person whose name stands second, will have the right to vote.

Maharashtra Cooperative Societies Act: Transfer of interest on death of a member

On the death of a member, the society will transfer the share, right, title and interest in the property of the deceased member to a person on the basis of testamentary documents or succession certificate or legal heirship certificate or document of family arrangement. The society will admit the nominee as a provisional member after the death of a member, till the legal heir is admitted as a member in place of the deceased member.

Maharashtra Cooperative Societies Act: Restriction on transfer of share or interest of a member in a CHS

In case of a cooperative housing society, no transfer of share or interest of a member or the occupancy right, except the transfer to his heir or a nominee, can be effective unless:

The dues of the housing society are paid.

The transferee applies and acquires membership of the cooperative housing society.

The transfer of share or interest in respect of leasehold properties will be governed by the terms of the lease.

Maharashtra Cooperative Societies Act, 1960: News updates

Maintenance charges to be as per flat area, under Apartment Act

July 15, 2021: Maintenance charges are applicable according to the area of a flat under the Maharashtra Apartment Owners Act. However, the same rule does not apply to housing society flats registered under the Maharashtra Cooperative Societies Act, the deputy registrar of cooperative societies, Pune city zone, has ruled.

This is because in case of cooperative housing societies, the land and the building are controlled by the society and the maintenance charges are distributed equally among all members, irrespective of the area of their flats.

Cabinet approves amendment in Maharashtra Cooperative Societies Act 1960

May 6, 2021: The Maharashtra government has approved a proposal to amend the Maharashtra Cooperative Societies Act, 1960, to ensure that members of cooperative societies do not lose their voting rights during the next elections. Under the provisions of the law, a member must attend at least one cooperative society meeting every five years or he will be considered as ‘inactive’ and lose his voting rights. Currently, the second wave of the COVID-19 pandemic has halted the operations of a number of cooperative societies across the state.

 Managing Committee of Cooperative housing society members are ‘jointly and severally’ responsible for all decisions of MC

January 2021: The Maharashtra government in January 2021 notified that all elected members of the managing committee (MC) of cooperative housing societies established under the Maharashtra Co-operative Societies Act, 1960, have to execute a bond holding them ‘jointly and severally’ responsible for all the decisions the committee takes. Under the MCS (Amendment) Rules, 2002, a new form, M-20, has been inserted, whereby elected members of the managing committee have to declare they are jointly and severally responsible for all the acts and omissions detrimental to the interests of the society.

Registrar cannot direct housing society to issue NOCs to its member: Bombay HC

July 2019: The Bombay High Court in July 2019 ruled that a deputy registrar of cooperative societies has no power to direct a cooperative housing society to issue no-objection certificates (NOC) to one of its members for improvement and change of use of his premises. Acting on a complaint lodged by a member, the deputy registrar, on July 9, 2019, directed a Mumbai housing society, Shree Raghunandan Cooperative Housing Society, to issue necessary NOCs to the member for joining four tenements and converting use of the premises from residential to commercial. “It is clearly a dispute between a member and the society, which would require adjudication before some other forum,” the HC said.

Who is the final authority in the society?

Under the Maharashtra Cooperative Societies Act and the byelaws, the final authority rests with the general body of the society.

[ By Maharashtra Cooperative Societies Act: All you need to know BY SUNITA MISHRAFEBRUARY 28, 2022]

What are the Cons of Associate members contesting Managing Committee Elections and being a part of The Managing Committee? Please read the below mentioned site and the recent amendment.

https://youtu.be/MgDsVeNLmVY [ Associate Member and Joint Member – Difference – Recent Amendment and holding Associate Members responsible in case of Fraud]

HOW TO STOP CORRUPTION IN COOPERATIVE HOUSING SOCIETIES?

ADDA DECEMBER 4, 2020 

Introduction to Corruption in Housing Societies

During the period between 1960 to 2001, the number of registered co-operative housing societies increased from roughly 5,500 to more than 1,00,000, a survey conducted by Shodhganga states. With the emergence of more and more such co-operative housing societies, it is no surprise that corruption in housing societies has also been widely rampant. While a housing society carries out different functions pertaining to maintenance of accounts and finances, heeding to the complaints of residents, managing repairs and damages and overseeing the smooth functioning of a society, there is a lot of scope for members and the management committee (MC) to commit acts of fraud, violations, misconduct and misuse of society funds. Thus, it is the responsibility of members to be aware of their rights within a co-operative housing society

Common Types of Corruption in Housing Societies

Before we dive into how we can redress and solve these issues, let us understand how the absence of an online system like a society management app can bring about such problems and cause corruption in co-operative housing societies in the first place. A major cause of dispute that occurs between managing committees is the proposed redevelopment of societies. Many MCs might engage in underhand dealings with builders and redevelopers and individual MC members. This can lead to misrepresentation of matters before the residents by builders and MCs, disputes on petty matters and filing of false complaints against persons opposing redevelopment. Management Committees are often responsible for societies with hundreds of flats, large properties and amenities like a clubhouse handling huge sums of funds amounting to lakhs and crores of rupees. In such scenarios, members can easily find ways to earn illegitimate incomes while making repairs or collecting maintenance.

In India, every co-operative housing society is laid down and governed by a set of laws and rules called Bye-laws. Bye-laws are formed and implemented differently by different state governments and they should be considered as the constitution for the functioning of every co-operative housing society. These laws constitute the redressal of different types of complaints and malpractices. In an offline system, the easiest form of corruption to identify is:

(i) Avoidance of accounts audit: This implies that a certain member is trying to hide an unapproved or illegal transaction. In some cases, auditors themselves can be corrupt by colluding with corrupt MC members.

(ii) Corruption in housing societies can also take place by producing false bills, misuse of funds and personal expenses being written off as society’s expenses. Auditing and accounting processes should be completely transparent and every little transaction should be duly recorded.

(iii) Rules specify that free and fair elections of the management committee must be conducted annually. However, the elections might be rigged at times when a particular member may have vested interest in acquiring a certain position in the MC. Hence, he/she may bribe some members to be elected.

Methods of Redressal

Thankfully, there are methods and remedies for redressal of corruption in cooperative housing societies. The Maharashtra Co-operative Societies Bye-laws prescribes whom you can approach for redressal of your complaints and disputes.

An application of your complaint must be submitted to the society office bearers in writing with all the details of the complaint.

After the receipt of such a complaint, the committee shall take decision thereof, in the coming management committee meeting. Such a decision shall be communicated to the concerned member within 15 days thereafter.

 If the member/members are not satisfied by the decision of the committee, or does not receive any communication from the committee within the time specified above, he/they may approach the competent authorities, depending upon the nature of the complaint:

– Registrar of Societies: The Assistant/Deputy registrar regulates the housing societies under his jurisdiction and usually handles complaints pertaining to tampering, suspension or incomplete maintenance of records, misappropriation of funds and improper auditing, disqualification of members or unfair electoral practices, etc.

– Civil Court: If the matter is not resolved, approach a co-operative court. Some complaints must be taken to the civil court for resolution but always keep this as a last resort because it requires more time and resources. The disputes handled by civil court can pertain to substandard construction, conveyance charges, escalation of construction cost, etc.

Steps to Stop or Minimize Corruption

An article by Economic Times stated that almost 90% of the residents in a housing society do not know or care about the developments as long as they get the basic facilities like water supply and electricity. This is highly problematic, as not knowing your rights can be the cause of certain issues. As residents, we need to be aware of the right recourse to take and ensure that the democratic values of a cooperative housing society are upheld.

Corruption in Cooperative Housing Societies can be minimized by regular Annual General Body Meetings where members have a chance to hold those involved in corruption, accountable. In fact, one can take advantage of technology to record meetings and keep tabs on the management committee. It is always advisable to try and build support for your cause among other residents. This enables members to respond to the proposals even if they miss out on any meetings. Another important tool is the Right to Information Act, through which a person can elicit information about the housing society and the workings of the management committee.

Bye Laws No. 77

 Society to carry out Structural Audit

(a) The Society shall cause the STRUCTURAL AUDIT of the Building of the society as follows:

(1) For the building ageing between 15 to 30 years…………….. Once in 5 years.

(2) For the building ageing above 30 years……………… once in 3 years.

 IMPORTANT: (a) Such STRUCTURAL AUDIT shall be conducted by the Architects from the panel of the Municipal Corporations in case of the societies which are in the limits of Municipal Corporations. In case of other societies such structural audit shall be carried by the Govt. Approved Architect.

 (b) The society shall cause to undertake Fire Audit of its premises in compliance with the State Fire Policy.

WHAT SHOULD BE CONDUCTED DURING STRUCTURAL AUDIT?

A “prudent” Structural Engineer would reflect the following in his Structural Audit Report, highlighting the relevant violations under the Municipal Laws, while keeping upfront the Approved Plans of the Building:

a) Any changes and contraventions of the Approved Plans /Availability of Sanctioned Plans. Whether Building has been built in conformity to the Sanctioned Building Plans,
b) Availability of approved & sanctioned building Plans, IOD, CC, OC,
c) Changes made to the buildings Columns, Beams, Pillars,
d) Changes made in place of WC, Bathroom, Kitchen, installation of loft water-tanks,
e) Extension OR Covering of Balcony,
f) Removal of Internal walls between rooms,
g) Internally Amalgamating (joining) of two flats, by removing partition walls /doors,
h) Installing over-protruding Grills, Sheds, Chajjas,
i) Conversions of basements OR Stilt /podium parking for any other usage (e.g. Offices, Shops …. )
j) Existence of unauthorized Lofts & Mezzanine Floors in the building,
k) Any other encroachment of Common areas, Refuge areas and Society premises,
l) Installation of illegal Mobile Towers and Hoardings, and adverse effect of same on the building,
m) Whether the building has appropriate Drainage /Sewage lines connected to the Mains,
n) Existence of Open-Well, Bore-Well and other clandestinely built sub-ground level storage water tanks,
o) Common Electrical Wiring system,
p) Changes in Internal /External Drainage /Sewage lines,
q) Ground and Overhead Water Tanks, Water Meters and supply pipelines,
r) Water logging around periphery of the Building and reverse incline level of ground,
s) Detailed report on the repairs and restorations, that is required in the Building, in terms of the Approved Plans of the building.

Note:  Structural Engineer /Auditor shall clearly outline each Alterations with graphic images and photographs and the repairs /rectifications /restorations that needs to be done in the Building.

[Ease of Constituting Mgt Committee in Maha CHS by Staff Reporter June 17, 2020 Cooperative Coffee Shop by I. C NAIK]

Constituting Management Committee as also maintaining its full strength in most Cooperative Housing Societies registered in Maharashtra have been facing turbulence post 97CAA (the Constitution 97th Amendment) Act 2011.

Taking a call of constitutional mandate, the Maharashtra legislature enacted a very comprehensive Amendment Act to the MCS Act (Maharashtra Cooperative Societies Act 1960) which came into effect on 14/2/ 2013.

Constituting the Management Committees in housing societies continued to face turbulent time even thereafter. Maybe more now as the Cooperative Department apparently failed to live up to the challenge of organizing free and fair elections, the responsibility of which has been entrusted to the State Level Election Authority constituted by the State Legislature. The Department also did not leave any stone unturned in creating troubles in the management of housing societies.

Recently the MAHARASHTRA ACT No. XXIII OF 2019 was accorded the assent of the Governor and published the Act in the “Maharashtra Government Gazette” on 23rd of Jul. Under this enactment with a view to strengthening the regulatory regime of housing societies in the interest of the stakeholders the State Legislature inserted an exclusive chapter XIII Cooperative Housing Societies (vide its Section 8) in MCS Act which came into effect on 9th March 2019.

This new chapter has one very important Section namely Section 154B having two Sub-sections 1 & 2. Provisions of these two sections in a way provide a frame work of a law on cooperative housing societies, inside the MCS Act.

The CHS Chapter in MCS Act has radically redefined the membership of Cooperative Housing Societies and along with a few more changes providing an ease of constituting the Management Committees is quite apparent. Going forward we find out how far it is true?

Post 97CAA (which gave a constitutional status to the cooperative societies, See Para 5 of The Supreme Court Order in Vipul Chaudhary Vs Amul Dairy: delivered on March 19, 2015 [(2015) 42 SCD 494], the MCS Act had redefined the Cooperative Society;

Section 2 (27) “society” means a co-operative society registered, or deemed to be registered, under this Act which is an autonomous association of persons, united voluntarily to meet their common needs and aspirations through a jointly owned and democratically controlled enterprise and adhering to the co-operative principles and values.

It is quite pertinent to note that the Apex Court in its 19th March order (supra) has made explicit reference to the co-operative principles and values while exhorting Indian judiciary and law makers that” When the Constitution is eloquent, the laws made there cannot be silent. If the statute is silent or imprecise on the requirements under the Constitution, it is for the court to read the constitutional mandate into the provisions concerned and declare it accordingly.

Central ideas on cooperative management are extremely very well engraved in just one cooperative principle namely “Co-operatives are democratic organizations controlled by their members, who actively participate in setting their policies and making decisions. Men and women serving as elected representatives are accountable to the membership.” Very satisfactory practice of this principle in cooperative society and more particularly in Housing Society is the main challenge of membership. It demands maximum coordination inter se the membership which may beneficially extended to all the residents of Housing Society. The ease of constituting the Management Committee is the most essential prerequisite of success of every Housing Society.

Membership has now been made broad based by liberalizing the rules of Associate membership of Housing Society. It includes husband, wife, father, mother, brother, sister, son, daughter, son-in-law, daughter-in-law, nephew, niece. The list does not end here but it also extends to a person unrelated to a member. He/she should be duly admitted to Membership on a written recommendation of a member to exercise his rights and duties with his written prior consent. The most convenient liberalization is that the Associate member need not hold and share the society as his /her name is not required in the share certificate. The other ease lies in the fact that these relatives are Associates of any member of a CHS with no formalities to be completed except that Rule 19 of the MCR 1961 extracted below needs to be adhered to:

“No person shall be admitted as a member of a society unless—

(i) he has applied in writing in the form laid down by the society or in the form specified by the Registrar, if any, for membership;

(ii) his application is approved by the committee of the society in pursuance of the powers conferred on it in that behalf and subject to such resolution as the general body of members may in pursuance of the powers conferred on it in that behalf from time-to-time pass and in the case of nominal, or associate member, by an officer of the society authorized in that behalf by the Committee.” [S.154B-8(18)]

The Associate Member shall have right to contest the election to the Committee with prior written consent of a Member [ Section 154B-10(6)]

The question of admitting a member(s) to the Management Committee can arise under two circumstances namely through periodic general election to reconstitute a committee upon expiry of the tenure. The other is filling up a casual vacancy. The CHS Act 2019 permits the smaller housing societies (less than 250 members) an in-house election process at general body meetings vide Section 2. It has inserted the following proviso to Section 73CB (11) of MCS Act which required cooperative societies to inform SCEA to organize elections to Committees including filling up of casual vacancies.

The Management Committee was permitted to fill up casual vacancy by co-option in case the remaining tenure of the Management Committee was less than half. In other cases the societies had to inform SCEA requesting for supervision of election for the required number of seats. Proviso for in house elections in smaller housing societies reads as under:

“Provided further that, in case of housing society having less than or up to 250 Members, the elections of the Committee shall be conducted by the said housing society in the manner as may be prescribed.”.

This proviso should mean elections to fill up casual vacancy after half the tenure of the Management Committee has expired can be conducted in special general body meetings.

As of now till the State Government takes action required under the following section of amended MCS Act the Housing Society management may be confused about the strength.

Section 154B-19 “(1) Committee shall consist of such number of Members as may be decided by the State Government by notification or special order, from time to time.”

Perhaps housing societies may advisedly maintain a status quo in case of the strength of the Management Committee.

CHS: Hazards of Associate Membership in Maharashtra by Mr. I C Naik  May 31, 2018

As per the Maharashtra Cooperative Societies Act 1960 [the Act] a member of a society, includes Associate Member, (whether a joint owner of the flat or not). The Associate member is differentiated from a member under 2 legal provisions namely:

The Share certificate issued by the society, evidencing the membership of the society, states name(s) of the Associate member(s) after the name of the member i.e. at a position other than No.1. [Section 2(19)(b) of the Act.

The rights of Associate member are restricted to those specified in registered bye-laws of the society.

Attending a General Body Meeting in the absence of a main member is the only right of the Associate member provided under Section 27(2) of the Act.

At www.indiancooperatives.com we had discussed Associate membership on numerous occasions. Two prolonged ongoing unfortunate disputes concerning the Associate Members in housing societies registered in Maharashtra, referred to us for guidance has prompted this advisory. It is intended to point out as to how simple it was to prevent such unpleasant situations.

The facts as received by us are narrated very briefly, without onus of accuracy thereof. In both the cases the sufferers are Doctors by Profession who appear to have requested to their respective housing societies to confer the Associate membership to their younger brothers. That is also the Scheme of cooperative society law and registered bye-laws of the every housing society. In one case, there is a dispute about occupancy of the property claimed to be exclusively belonging to the Doctor member. The Associate member who is an Advocate by profession was allowed to occupancy it as the Doctor Member was serving outstation employer. After a few years now the Doctor is woefully trying to get the property vacated as his age is fast approaching the retirement. It looks like his efforts are yielding no results. The professions of each one of them appears to be an “Advantage Associate Member” in the protracted legal fight.

In another case the Associate member is reportedly engaged in a vicious legal battle of nerves with his main member (Doctor brother) allegedly through the society’s Management Committee, as the later is a member of the Committee. The society has expelled the Associate Member twice but he has reportedly managed to stick to his position. On the contrary he has reportedly drawn the entire Committee to Court in a defamation suit.

The quarrel became public once on 31- 3- 2014 in Time of India  https://timesofindia.indiatimes.com/city/mumbaiHousing-society-expels-member-for-RTI-harassment/articleshow/32986401.cms  and very recently on 30-03-2018 in Mumbai Mirror. Mirrorhttps://mumbaimirror.indiatimes.com/mumbai/other/residents-managing-famous-bandra-colony-to-face-trial /articleshow/ 63539195.cms  

Both the matters are hanging fire unlikely to get extinguished in a foreseeable future.

The Cooperative Department of the State and Cooperative Societies regime headed by Commissioner for Cooperation and Registrar of Cooperative Societies (the Co-operative Commissioner) both have contributed to the avoidable chaos concerning the Associate Membership in housing societies: [may undertake a comprehensive look in future as “Associate in Chaos. v2” if so desired].

The Maharashtra State Legislature has rightly left to the members of the cooperative societies to determine the membership rights/liabilities of an Associate member under Section 24(2) of the Act in these words…. “An associate member, may, … have such privileges and rights and be subject to such liabilities, of a member, as may be specified in the bylaws of the society.”

Unfortunately, the Office of the Co-operative Commissioner appears to have chosen to hide the legal view that within the regulatory frame work provided by the Legislature under the Act, the bye-laws of a cooperative society are to be drafted by the proposed members of the society and can also be amended from time to time by them as best suited to meet the dynamic requirements of members as a homogeneous group.

Even the Apex Court has ruled that “In our view, what is in the interest of the society is primarily for the society alone to decide and it is not for an outside agency to say. Where, however, the Government or the Registrar exercises statutory power of issuing directions to amend the bye-laws, such directions should satisfy the requirement of the interest of the Society.” [JT 2000 (8) SC 68 in Karvanagar Sahakari Griha’s Case]

The model Bye-Laws drafted in the office of the Co-operative Commissioner and cleared by the State Department, does not allow Associate member more than just one right as conferred under Section 27(2) of the Act. Post 97th Constitutional Amendment the state amended the M C S Act 1960 and the Co-operative Commissioner released a new Model of the Bye-Laws in November 2013 to align the provisions to the changed law.

As per this Model an Associate member is a person who holds the flat jointly with the main member [Bye-law No. 2 (xxiv)(b)]. Section 19(b) however provides: “associate member” means a member who holds jointly a share of a society with others, but whose name does not stand first in the share certificate; meaning notwithstanding what is stated in Section 2(19)(b) of the Act, as per Bye-Laws the Associate member must be a joint holder of title to the concerned flat. Getting Associate Membership paying Rs 100/- is not available any more. In one premises society, in recognition of bye-law No. 2(XIV)(b) of the afore said Model released for housing societies as aforesaid, the Hon. Secretary and some members of the Management Committee were dismissed by the Ward Dy.  Registrar.

https://www.indiancooperative.com/from-states/how-a-dy-registrar-misguides-people-in-mumbai/

All Model Bye-Laws provide for conditions which will enable a person to join as member of the society. The conditions which can cause cessation of a membership are also laid down in registered bye-laws. Membership to cooperative society cannot be given except against a written application [per Rue 19 of the M C R 1961]. Bye-law No. 19(b) states:

“An Individual, a Firm, a Company or a Body Corporate, registered under any Law for the time being in force, who/ which is eligible to be an Associate Member and who/which shall apply through Member in the prescribed form for such Membership, along with the entrance fee of Rs. 100/-, may be admitted as Associate Member by the Committee.”

The form of application prescribed as aforesaid is provided at  Appendix-5 to the Model Bye-Laws. This form requires several declarations to be made by the applicant: one of them is about purchasing / owning a property jointly with the First Member, being flat no………in the Society. A member who is not qualified to make this declaration has an option to make the following declaration, namely: “I state that do not jointly own or have joint title to the property with the above mentioned First Member” He can also be admitted.

One more declaration by the applicant in this form is as under ‘The Associate member shall have no rights or privilege of a member, except attending general body meeting of the society and voting at them, provided that the member whose name stands first in the share certificate is absent at such meeting”

Despite such unambiguous written declaration by the Advocate in Pune (Associate member of Doctor Brother) is in occupation of the flat, against the desire of the main member. And a Catholic member confers to himself a right of dragging the Committee to court for defamation of the Associate Member.

There is a miss-match in the Bye-Law conditions for admitting a person to Associate Membership and for removing the Associate member.

Continuation of Associate membership is expressly linked to the continuation of the membership of the Main member, as provided in bye-law No. 56 reproduced below;

‘56. The person shall cease to be the Associate Member of the Society, when the Member, whose name stands first, ceases to be the Member of the Society or on the death of the Associate Member or on the acceptance of the resignation of the Associate Member by the Committee’

The miss-match is this. A person is admitted to Associate Membership at the desire of the main member (the flat owner) but there is no mandate to the Committee to terminate the Associate membership when so desired by the same member. Just as the rights can be specified the responsibilities are also to be specified which includes relinquishing the membership at the desire of the main member. Perhaps it’s time that all housing societies amend the Bye-Laws to provide one more condition to the circumstances of cessation of Associate membership namely “at the request of the main member submitted to the Committee in the prescribed form”

Maha CHS: Twin Tales of Associate Membership by Mr. I C Naik  July 10, 2018 in Cooperative Coffee Shop

On May 31, 2018 we went through examples of Hazards of Associate Membership in Maharashtra, contemplating a need to examine the issues concerning the Associate member owning the flat jointly with the main member.

https://www.indiancooperative.com/from-states/chs-hazards-of-associate-membership-in-maharashtra/

In a series of write-ups on flaws in Model 2014 Bye-Laws, we encountered inter alia how the Commissioner for Cooperation and Registrar of Cooperative Societies Maharashtra, at Pune (the CC & RC) has may be subconsciously, destabilized the legislative intent on Associate membership, by redefining it in the Model Bye-Laws 2014 released on November 1, 2013. Little did he realize that this was poised to creating quite tough situations for managements of older housing societies. The front officers of the department, i.e., Dy. Registrar appears to be bent upon adding fuel to fire unknowingly or otherwise, as revealed by the two tales discussed in this post. 

https://www.indiancooperative.com/?s=Maha+CHS+%3A+Flaws+in+Laws+on+admission+to+Associate%2C+part-7.

Some time back we had talked about quite a peculiar case in which the Andheri -Mumbai based Cooperative Premises Society’s Secretary was dismissed because he was an Associate member not jointly owning any unit in the society. The Officer passing this order was no less than the Deputy Registrar (K – East)- Mr J D Patil who has now shifted to P Ward Kandivali East.

https://www.indiancooperative.com/from-states/how-a-dy-registrar-misguides-people-in-mumbai/

Very recently I was confronted with one issue about the Associate member elected as the Hon. Secretary after new Model Bye-Laws 2014 were adopted by the society. It was referred to me through this site by a former treasurer of the Best Employees housing society in Goregaon (East) -Mumbai. For over a year he and his colleagues on the immediate past Management Committee, are engaged in a protracted legal battle seeking the Hon. Secretary’s dismissal from the Committee itself. They had complained about it more than a year ago, to the Dy. Registrar Mr J D Patil – P Ward Kandivali East. They were after the Hon. Secretary because he was not a Joint owner of the flat which was inherited by his mother upon death of her Husband. His applications for Associate Membership provides a documentary evidence thereof.

By the time the 8th hearing was to commence when they came to hear about the Andheri Premises Society dismissal order of Mr J D Patil; they were quite delighted in the hope to get a similar order very soon. Mr Patil was sitting on their complaint despite a volley of reminders from the higher ups viz:- the Commissioner’s office in Pune, Joint Registrar at Malhotra House, and Mantralaya (CM’s Secretariat), to Mr Patil to attend to the complaint expeditiously. J D Patil did not yield to these reminders. One day he passed a dismissal order not of the Hon. Secretary but of the Complaint for his dismissal. The complainants were shocked as the dismissal in Premises Society was based on the 2014 Model Bye-Laws of Cooperative Housing Society and not even that of the Premises Society. In this case the complainants were seeking dismissal based on their own society’s registered Bye-Laws which was quite a stronger case.

Even then, they failed to get a correct order issued by the very same D R Mr. Patil. What a pity!!! Mr. J D Patil chose not to dismiss the Hon. Secretary contrary to what he himself did in Andheri Premises Society based on unregistered Model Bye-Laws of another class of cooperative society!!! The intention behind delaying the order in the Best Employees society’s complaint is not too difficult to guess. This bears out from the fact that after sitting on issue over an year, the complainants were directed to go to Cooperative Court as the Election disputes are within the jurisdiction of Cooperative Court under the Election Rules. It is a matter of public knowledge, that the Election Rules provide maximum of two months’ time to file a dispute application from the date of election.

As the order was well passed the time limit, distressed Complainants helplessly reverted to follow up letters once again with the above-mentioned higher authorities, only to be told that the Dy. Registrar can only decide the issue. The complaints were shocked to realize that the higher-ups in cooperative Societies do not consider them responsible to give correct directions / advice to their subordinate officers on intricate matters of grave doubts. Does it also imply that they have no powers to deal with flawed orders? I could faintly guessed the real reason for the complainants seemed to be ; the unmindful spending of the substantial amounts from the funds of the society in a relatively short period. An honest approach in the interest of 200+ members miserably failed by just one officer of the Department; they were extremely anguished which made me feel sorry about them. Dy Registrar seems to enjoy very high level of immunity against the faulty orders harmful to the cooperative movement.

Reading the story of Andheri Premises Society, one another member who was Associate since 1995, wrote to info@www.indiancooperative.com seeking guidance to problem he faced as an Associate member. This CHS had adopted Model bye-law 2014 in AGM held on 25/09/2016 and the Dy.Registrar, Co-op.Society, ‘P’ Ward, Kandivali (East) have registered them on 24/07/2017. Yes, the same D R Mr. J D Patil. In the words of this member “the management committee of our society had cancelled my associate membership vide their letter dated 04/10/2017. Thereafter, I approached to Election Office, Pune who have forwarded my letter along with all enclosures and directed the Dy.Registrar, ‘P’ Ward for initiating action as the issue lies with him vide their letter dated 05/03/2018.

As there was no action from Dy.Registrar, ‘P’ Ward. I wrote again letter to Dy.Registrar in the month of May, 2018. “The aggrieved associate member is still awaiting to hear from the Dy Registrar.

The M C S Act 1960 defines Associate member as one whose name appears in the share Certificate after the name of the member who must be the owner of the flat: Se 2(19).

 It is the legislative decision to allow a person of choice of the member of housing society to appoint any person who can attend General Body Meetings in his / her absence. This person in law is an Associate member (admitted after proper procedure specified under laws has been adopted). In fact Section 24(2) empowers societies to specify in their Bye-Laws any rights of members which can be enjoyed by the Associate Members. This facility is hardly used by any housing society as the Model Bye-Laws are thrust upon by the Maha-Cooperative Regime with no liberty to modify them.

The CC & RC has stumbled upon a very clear legislative intent and in that passively forced all housing societies adopting 2014 Model Bye-Laws to restrict the Associate membership to those persons whose names appear in the title deeds of the flats as joint holders. No consideration was given to a situation that may arise if existing housing society were to adopt 2014 Model. This is what this housing society is now facing. The Hon. Secretary of this housing society went ahead without thinking if he had the power, dismissed a member who was admitted to Associate membership more than 2 decades ago in 1995. The Committee has the power to admit a member and dismissal is strictly governed by registered bye-laws.

The height of indifference to housing society problems in the higher echelons in the cooperative’s regime of the State of Maharashtra appears so pathetic that, they seem to think that they owe no responsibility to guide the front-line officers being the face of the regime at the Ward level. Letter of the Hon. Secretary is prima-fascia inoperative as persons are inducted as members in the society under collective decision of the Committee and the Hon. Secretary’s power is no more than to complete formalities administratively. The concerned member continues to be an Associate member until he is dismissed under due process of law. In both the tales and the same issue of Associate Membership in housing society was involved but the members were seeking two opposite orders from the one and the same Dr Mr J D Patil. No wonder he is utterly confused… The CC & RC who has created this situation owes responsibility to reach out to rescue the confused DR J D Patil.

Mumbai: Managing committees of housing societies have too much power, says Police Commissioner Sanjay Pandey.

The city police chief added that there have been instances after he took charge where strict action has been taken against high handed managing committee members.

[ Free Press Journal Staff Reporter Updated: Wednesday, May 25, 2022, 09:49 PM IST]

Taking note of increasing instances of disputes between residents and members of managing committees of housing societies, Mumbai Police Commissioner Sanjay Pandey on Wednesday said that there is a need to rethink the structure of housing societies in Mumbai and that he would be bringing this to the government’s notice.

The city’s top cop addressed a YouTube live session for half an hour on Wednesday evening, where he fielded questions on a variety of topics related to policing from several citizens. He also stated that there would be more such sessions in the days to come.

One of the questions that were asked during the session was about disputes arising from unreasonable rules and regulations imposed by managing committees of housing societies, like not giving parking space to tenants on the society premises.

Mincing no words, Pandey said that under the existing rules, the managing committees had too much power and that this needed to change.

“Committees of housing societies are elected to ensure the smooth functioning of the society and the welfare of the residents. However, the members of these managing committees seem to think that they own the building and can do whatever they want. The reason behind this is that under the Cooperative Societies Act, the committees have too much power. There is a need to rethink the current structure and I will be bringing this to the notice of the government,” he said.

The city police chief added that there have been instances after he took charge where strict action has been taken against high handed managing committee members.

“Wherever applicable, we have registered offences against them, charging them with sections like extortion or cheating under the Indian Penal Code. We have also designated the Police Inspector, Public Relations of each police station as the point of contact for such disputes. Suppose a person has lost his job during the pandemic and is struggling to make ends meet, however, the managing committee is still pressurizing him to pay maintenance charges. How is this fair?” he said.

Several other citizens also asked questions relating to traffic problems, corruption and the nuisance of bikers at night. Answering a question about alleged corruption by traffic cops, Pandey said that while corruption is doubtless intolerable, it is also the citizens’ duty to report it to the authorities.

“I keep getting these complaints but I would just like to say that it is a two-way street. If you don’t give a bribe, cops won’t be able to take it. I am not pointing fingers here, but I must point out the transactional nature of corruption.”

He also stressed the fact that all police stations have been instructed to immediately register complaints whenever a citizen approaches them, and that there is a zero-tolerance policy for non-registration of complaints.

I end by saying that as responsible members it is our duty to see that our society is running properly or not and to keep the checks and balances on the Managing Committee as they are not professionals but doing social service for smooth running of the society. We as responsible members should ask questions if we have any doubts about the transparency in the working of the Managing Committee and I am sure even the committee members will not take any offense to our queries.

Though the blog is a large one I wish I have answered the queries successfully.