Posts Tagged ‘Maharashtra Ownership Flats’

Mass misuse of court order on co-op society

The provision presumably intends to protect the interests of the cooperatives, whose funds would be handled by the committee members.
Many cooperative housing societies are facing harassment, because of a little known order of the Bombay High Court passed on September 15, 2006 that makes it mandatory for every committee member of the society to execute an indemnity bond on a stamp paper of Rs200, within 15 days of assuming office.

The High Court order adds that in case the member fails to do so, he forfeits his office. The order derives from Section 73 of the Maharashtra Cooperative Societies Act 1960, which says that every committee member of a cooperative society shall execute a bond within 15 days of assuming office.

The provision presumably intends to protect the interests of the cooperatives, whose funds would be handled by the committee members.

Upholding the directive as imperative, the High Court dismissed the contention of the appellants in the case of Assissi Cooperative Housing Society, stating that the bond was not mandatory. This directive is increasingly being used by many a disgruntled resident to settle scores with the managing committees of cooperative societies.

In case some resident has a dispute with any of the committee members, a complaint is promptly filed by the resident against the particular member for not executing the bond, says an official. “In such cases, we offer to disband the committee and call for fresh elections,’’ says Divisional Joint Registrar of Cooperative Societies, Mumbai, Shivajirao Pahinkar.

Curiously, there are no statistics available with the Cooperative Societies Registrar on the number of societies who have executed this bond, even though this office is supposed to be provided with a copy of every such bond. It is estimated that less than one per cent of the 29,000-plus cooperative societies in Mumbai have executed such a bond.

“Members are expected to fill up a prescribed M20 form and keep it on the record of the society, The bond stays with the society itself. It is impossible for us to check how many societies have followed the order, unless it is revealed during our annual inspections,” claims Pahinkar.

“Most of the societies are either unaware of the order or don’t want to execute the bond,” says advocate Vinod Sampat. Sampat has been writing to various wards under the Right to Information Act to find out how many members of cooperative societies have executed the bond.
“Most authorities have not replied to my applications,” he said. It is learnt that a Bill to rid the Act of this perceived anomaly was drafted way back to 2001, but is lying in limbo for want of political will.

Getting deemed conveyance of property just got easier

Recent regulatory changes obviate the need for flat owners in the state to enter into endless legal wrangles with their builder/ developer for forming a housing society and getting conveyance of property.
Flat owners slugging it out in the courts for getting their respective builder /developer to form a housing society and execute a deed of conveyance in their favour can take heart.

Maharashtra Ownership Flats (Regulation of the promotion of construction, sale, management and transfer) Act, 1963, popularly known as MOFA, which governs the promotion of construction, sale, management and transfer of flats in the state, has made it easier for them to get an order of deemed conveyance in case the builder/developer fails to do so within the time prescribed under the Act.
Provisions of Act have always required a promoter, including a builder, developer or co-operative housing society constructing flats for sale to take steps to form a housing entity, i.e. either a co-operative society, company or apartment ownership association, within four months of the date on which 60% of the total number of the flats were sold.

They also provided for mandatory conveyance of the subject land and building in favour of the housing entity either within the agreed time period, or, in the absence of any agreed time period, within four months of the date of registration or constitution of the housing entity.

However, the Act in its original form did not have the required teeth, because of which promoters have tended to go slow on forming housing entities within the prescribed time period. In fact, in the majority of the cases, conveyances have not been executed by the promoters for years as the available remedies were quite time consuming.

Now, thanks to the amendments carried out by the Amendment Act, 2005, passed in 2008, followed by the amendment in rules as notified on September 27, 2010, the relevant provisions have been strengthened.

It is necessary that flat purchase agreements are duly stamped and registered as required under the provisions of Bombay Stamp Act, 1958 and Registration Act, 1908, respectively. Applications for both the purposes may be lodged by the party or authorised agent who may or may not be an advocate.

If the promoter fails within the prescribed time period to initiate steps for formation of a housing entity, the competent authority may, upon receiving an application in the prescribed form from the flat purchasers and after verifying the authenticity of the applicants’ request and giving the concerned promoter a reasonable opportunity of being heard, direct the concerned cooperative authority to register the society.

If the promoter fails to execute conveyance in favour of the housing entity within the prescribed period, the members, through the housing entity, may make an application in the prescribed form to the concerned competent authority, accompanied by relevant documents for issuance of unilateral deemed conveyance.

After scrutinising the application and after giving an opportunity to rectify defects in the application, if any, within 15 days or an extended time of maximum 15 days, and being satisfied about the completeness of the application, the competent authority shall within a period of 15 days issue a notice in the prescribed form to the opponent/s, requiring him/them to file the written statement.

On consideration of the replies and after hearing the parties, the competent authority shall, within reasonable time and in any case not later than six months from the date of receipt of the application, pass such appropriate order as it deems fit and may issue a certificate to the concerned registering authority certifying that it is a fit case for enforcing unilateral execution of conveyance deed in favour of the applicant, as deemed conveyance.

The registering authority, on its part, shall, after giving the promoter and the applicant(s) a reasonable opportunity of being heard and on being satisfied that it is a fit case for unilateral conveyance, register that instrument as deemed conveyance.

‘Mixed objective trusts can get income-tax benefits’

Under the provisions of Bombay Public Trusts Act, 1950, as well as the income tax law, even when all the trustees are from your family, the trust can be a public charitable or religious or both.
Can we have a trust which is for charitable as well as religious purposes and all trustees are our family members and still get income tax benefits? Our trust is running and managing a school although permission from education department was refused. Whether it would affect income tax benefit?
Under the provisions of Bombay Public Trusts Act, 1950, as well as the income tax law, even when all the trustees are from your family, the trust can be a public charitable or religious or both. Whether the trust is public or not would be reckoned with reference to the objects thereof and not on the basis as to in whose hands the management is.
Language of section 11 to 13 of the Income Tax Act does not suggest that an institution of mixed objects is precluded from getting registration under section 12AA. Therefore, you can avail benefit of exemption of your trust, subject to limitations in respect of donations u/s 80G. Income tax benefits are not dependent upon permission of the education department. Once you establish that the purpose is charitable and activities of the trust are genuine, your trust is entitled to tax benefits. Charitable purpose includes education.

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