Housing societies act like dictators

Tolerance is being eroded because many of housing societies function as fiefs of dictatorial committee members.
Thane consumer court has recently upheld a Vashi resident’s right to use his housing society’s elevator – the said resident is an 11-year-old infirm Labrador. The owner of the ageing pet is delighted by the judgment, not least because it vindicates his stand that the society was being unfair and foolish in denying the dog an unexceptionable facility.

The owner’s sentiments are intelligible. The society was demonstrating an irrational loathing for pets, of course. But what appals me is that the neighbours were exercised by a molehill of dog hair when housing societies across Mumbai have real problems which amount to a mountain of dog poop.

In August this year, a 70-year-old Andheri (E) resident was murdered in a housing society equipped with attack alarms and guarded by sentries who recorded every visitor’s entry. In March, a 62-year-old woman who lived alone was slaughtered in her Gorai apartment. You think these are recent aberrations that presaged the 26/11 butchery? Let me tell you that there is no way you can blame Pakistan for this.

These crimes are triggered, and sometimes encouraged, by neighbours who are indifferent to each other all the time – except when something as significant as loud conversation provokes a general body meeting. I say this churlishly, but with certitude, because much before south Mumbai bloodied front pages of newspapers across the world, Jay Mahal Cooperative Housing Society in the tony Churchgate was the site of a double murder. A 94-year-old man and his 86-year-old wife were killed by their household help who had been hired without police verification.

As I argued a few columns ago, housing societies would be better served by focusing on strict police verification of tenants rather than by denying accommodation to single people or to members of certain faiths. Tolerance is being eroded because many of these societies function as fiefs of dictatorial committee members. It may be hyperbolic to compare an authoritarian housing society with Pakistan. But the overreach allows you to draw instructive parallels. As democracy is throttled, a tiny cabal takes over.

The cabal is interested in no more than self-preservation, so the interests of the larger group is neglected. But the larger group, remains silent because what matters to it is a no-hassle life. In the circumstances, authoritarianism breeds arbitrariness, because nobody is bold enough to ask questions. In the end, such a society is easily able to ban music, dogs, certain kinds of dress, and faiths. That intolerance opens cracks between one society and another. Mohammad Ajmal Amir and his friends are born in those cracks.

Housing societies, unlettered in law, flout norms at will in Pune

Eight common complaints of members against managing committees.
1. Not signing M-20 bond as required under law: According to Rule 58-A of the Maharashtra Co-operative Societies Rules, 1961, every elected member of the managing committee is to execute a bond in Form M-20 within 15 days of assuming office.
The secretary of the society is responsible for receiving the bonds and keeping them on record of the society and informing the registrar within 15 days of formation of the committee. This rule is often flouted as Form M-20 makes each member liable for decisions taken “jointly and severally”.
Some members of Brahma Majestic in Wanavdi are still awaiting a conclusion in their case on non-issuance of the bonds by MC members elected in April 2007 within the time frame prescribed by the law, even though the matter was brought to the notice of the deputy registrar of co-operatives in October 2008.
Members question several financial decisions taken by the committee, which have led to financial burden on the society as well as members. “Unless there is a resolution of the M-20 issue, we cannot hold any of the members of the MC accountable for what they have been doing,” said Col (retd) JV Singh, a resident.

2. Charging transfer premium at per square foot (psf) rather than the maximum permissible rate: The MC cannot charge a transfer fee on psf basis. “As per bye-law number 38 (transfer of shares) (ix) the premium for transfer fixed by the general body and the law allows a maximum of Rs25,000, as the transfer fee is Rs500 and entrance fee Rs100,” said Shroff. “Further, no additional money can be charged under any head whatsoever from transferer or transferee.”

This rule is openly flouted by MCs that expect an owner to cough up Rs100 psf. For large apartments, the cost could run into lakhs of rupees. The MC holds the member/ proposed member to ransom to pay the extra amount, which is illegal.

“The remedy is that one should approach the registrar of cooperative societies through a lawyer or consultant seeking refund and compensation by way of interest on additional amount so collected by the society. If the members are alert and know the law, they are self-sufficient to fight against any injustice,” said Shroff.

3. Charging illegal non-occupancy fees: The government of Maharashtra issued an order dated 01 August, 2001, in public interest under Section 79A of the Maharashtra Co-operative Societies Act, 1960, (MCS Act) directing the societies not to charge non-occupancy charges beyond 10% of the service charges (excluding municipal taxes). This order, though appealed against, was also upheld by the Bombay high court in March 2007.

In a society in Kalyaninagar, non-occupancy charges are being charged at 10% of the rent amount. “If the rent is Rs18,000, I was being charged Rs1,800 per month,” said Arun Kajaria. On his repeated questioning, the MC insisted that the high court ruling of 2007 was being appealed against in the Supreme Court and until then the societies could charge as they wished.

According to Shroff, the stand of the MC is wrong. “Since the order is not quashed or altered, it stands. As mentioned earlier, the immediate recourse is to open litigation against such a society and to file a case in the matter,” he said.

4. Taking decisions and passing resolutions in contravention of the law: “Some societies also do not follow the law and pass resolutions in contravention of the MCS Act, like excessive charging of transfer amount. Such resolutions should be brought to the notice of the deputy registrar and in certain cases to the co-operative court,” said Shroff.

5. Misuse of funds: The misuse of resources is a common grievance and is difficult to substantiate or prove to an authority. Some members of a housing society in Kondhwa have been on the warpath with the MC alleging misuse of society funds in white-washing of the building and road repairs.

Retired senior citizens who have limited sources of income were caught off guard by the MC’s demands for funds for the same. “Rs20,000 was taken by the MC for major repairs. The job was not up to the mark and ultimately we feel that there has been some sort of financial misappropriation. Contractors have not been chosen carefully,” alleged IC Kapoor, a resident.

Alleged financial misappropriation can be investigated by the deputy registrar. He can order a re-audit of the accounts of the period suspected by a government auditor after a complaint is lodged with him specifically seeking a re-audit. The charges for the same have to be borne by the complainant.

6. Taking decisions, conducting general body without proper quorum or support: Complicating matters is the fact that meetings where major decisions are taken are hardly attended by 10% of the members.

“Lack of quorum is a major problem in meetings. Most owners are not interested in the decision-making process, which gives MCs the upper hand. Out of the few members present, many of them are conduits of the MC, willing to play along which leaves some of us in a minority,” said J Valavil, resident of Brahma Majestic, who has been questioning several financial decisions taken by the MC of the society.

At the general body meeting conducted at one housing society in October 2010, it was observed that resolutions were being passed by a show of hands, co-owners being counted as one vote and opposing members were being disregarded and sidelined in complete contravention to the spirit of the MCS Act.

7. Disregarding members’ views and victimising members who dissent by cutting off water supply, lift and garbage collection: According to Shroff water, lift and common lights are essential services and the society cannot cut them off. “The aggrieved member should file a FIR with the police station as such an act is not permissible under law,” he said.

8. Using society funds to fight cases: According to Shroff, society funds can be used to fight cases as long as they are not personal cases. “For recovery of money from members u/s 101 (non-payment of society dues), appeals in recovery matters, to defend the society against any litigation put by a member, disputes relating to non-compliance of terms between builder and society, sub-standard constructions (where the society has given the building for reconstruction), conveyance matters and any other matter where the society and its property is in question, as per bye-laws, society funds can be used,” he added.


Co-operative society elections in Maharashtra within reality now

polls to Maharashtra’s 32,000 societies have not been held for past two years.
The state government’s decision to set up a co-operative election authority will be a relief for about 32,000 co-operative bodies, including housing societies, which have not held elections since 2011.

This election authority shall be on lines of an election commission for co-operative bodies and it will supervise, control and conduct polls to all registered co-operative societies, including housing societies, banks, credit societies and milk federations, barring exceptions like societies with less than 100 members.
This is being done according to the 97th Constitutional amendment. Though the state had amended the Maharashtra Co-operative Societies Act, 1960, and notified the authority in March, it had not set up the authority so far. However, on Friday, the state government approved 44 posts for the state election authority, which is expected to come into being soon. The body will also get a state co-operative election commissioner, who shall be a retired IAS officer not below the rank of a secretary.

As on March 31, 2012, Maharashtra had around 2.28 lakh co-operative societies with around 5.25 crore members, including 88,472 co-operative housing societies with 23.11 lakh members.

According to an economic survey, the state also has 25,437 co-operative dairy societies, 15,004 urban co-operative credit societies, 526 urban banks, 21,443 primary agricultural credit societies and 202 sugar co-operatives.

“After the amendment to the Act, the registrar of co-operative societies could not conduct elections to co-operative bodies as it was the mandate of the election authority. Moreover, in April 2011, the state had postponed elections to some co-operative bodies due to factors like drought in some areas of Maharashtra,” said a senior co-operation department official. He added elections for some co-operative bodies had not been held for over two years.

Another official said elections to around 32,000 co-operatives, including around 12,000 housing societies had been delayed. He added that even if the body with the commissioner was in place by the second week of November, the department hoped to finish the polls by January second week.

It would take around 30 days to conduct elections to a co-operative society. The official rued that states like Karnataka, Andhra Pradesh and Tamil Nadu were way ahead in setting up the authority.

The amendment also restricts the maximum number of members of the committee to 21. It also reserves seats for women and the weaker sections.

Talk of the ballot
This election authority shall be on lines of an election commission for co-operative bodies
It will supervise, control and conduct polls to all registered co-operative societies, including housing societies, banks etc.

Maharashtra supervision for society elections

state mandate has 44 posts in authority committee that will be formed in next two weeks.
Housing societies in the state with more than 100 members will now have to conduct their society elections under the supervision of a state-appointed co-operative election authority.

The state government has approved 44 posts for the election authority that will come into being within the next two weeks. This is applicable for other co-operatives as well including co-operative banks, credit societies, sugar mills,etc.
In Maharashtra, as many as 32,000 co-operative societies, of which 12,000 are housing societies, will go through the process of elections once the election authority is established. The state will also appoint an election commissioner to oversee the functioning of the committee. A retired IAS officer at the rank of a secretary will fill the post.

Elections for all societies which were due in the last two years will need to be conducted by December 31, as per the stipulated deadline. This deadline is one of the mandates as per the amended Co-operatives Act.

An official of the state co-operatives department said, “We have prepared the election rules and are waiting for an approval from the Minister for Co-operation. Once the state co-operative election commissioner is appointed, the process will begin.”

The mandate, under the supervision of the election commissioner, will eventually apply to all co-operative housing societies, but as of now only societies with more than 100 members must conduct elections under the supervision of the up election authority.

There are a total of 2.27 lakh co-operative societies in Maharashtra. As per the amendments in the co-operative laws, that took place in April this year, the election process of all co-operative societies will be carried for a period of five years, along with the preparation of the voters’ list. The maximum numbers of directors on the board of each co-operative society have been limited to 21.

Besides this, the amendment also mandates a yearly audit for every co-operative society. The Annual General Meeting (AGM) of the co-operative society will have the right to appoint an auditor to conduct their financial audit.

What the amendment says
State government will set up an election authority. State has 44 posts under this authority that will come into being within two weeks

Election commissioner will be a retired IAS officer

Societies with more than 100 members are required to conduct elections under the election authority, it will soon apply to all housing societies.

Maximum numbers of directors on the board of each co-operative society have been limited to 21.


Army Welfare Cooperative Housing Society refutes charges

Army Welfare Cooperative Housing Society has responded to a series of articles carried in DNA between November 13 and December 2, 2010.
Army Welfare Cooperative Housing Society has responded to a series of articles carried in DNA between November 13 and December 2, 2010. The society insists that the reports were neither fair nor accurate, and, therefore, were damaging to the reputation of the society. The reports, the society says, also contained comments from non-members of the society. This reply from the society is because the society feels it necessary to remove any wrong impressions created by the allegations in the series of articles.
Reply to articles dated November 13, 2010, with headlines ‘Charges of fraud in Salunke Vihar’ and ‘Salunke Vihar’s 7/12 entries being probed’

I. The land was granted by the Govt. of Maharashtra to Army Welfare Housing Organisation (AWHO), Delhi in 1980 when this society was not in existence. The condition of constructing 1,728 houses was imposed on AWHO. The construction was completed in 1990. The land and the property were transferred to this society in February 1997. The society is wrongly accused of constructing less houses.

II. As per documents available with the society the point regarding 1728 houses was taken up by AWHO with the government authorities way back in 1993.

III. The Commissioner visited the society in December 2009 along with Collector, Pune and City Engineer, PMC. The commissioner ordered the city engineer to review the case and give recommendations regarding additional construction of houses.

IV. A case for review was already with the government authorities when the reports appeared.

V. There is no stipulation by the collector restricting maximum area of a flat to 600 sq. ft. The figure of 1,728 was arrived at on the basis of economic consideration, i.e. income group of AWHO members.

VI. In the wake of news about ‘Adarsh’ society at Mumbai, Shri. Johar and others tried to prove that this transfer of land is fraudulent. The cases of land of this society and that of ‘Adarsh’ society are incomparable. The land on which this society is located is indisputedly part of the revenue and forest department land.

VII. The land was granted to AWHO at Survey No. 19 as per Rule 26 (1) Maharashtra Land Revenue (Disposal of Govt. land) Rules 1977 under the powers of district collector.

VIII. The AWHO paid the occupancy price to the Government of Maharashtra at full market rate. On making the final payment, AWHO members of Pune scheme formed a society and the land was rightfully transferred to them by AHWO. There was no fraud involved.

IX. The grant of land to AWHO was on condition of Occupancy Class – II. As per Sec. 29 (3) (a) of MLRC Code 1966, a Class – II Occupant holds the land in perpetuity subject to restriction on the right to transfer. Irrespective of the Class of Occupancy the title to the land was made in the name of AWHO as per collector’s order. This society was given title to the land only after the land was conveyed by AWHO with the permission of the collector. Obviously, conclusion of fraud was without ascertaining the facts.

X. The Revenue Records cannot be manipulated as the Record of Mutition Entries is maintained in a register in accordance with Sec. 150 of Maharashtra Land Revenue Code. The operative part of the Mutition Entry is the authority for change (Ferfar). There are no changes in the contents (Ferfar) of Mutition Entry 1740.

XI. The title to the land was changed in the name of this society vide Mutition Entry No. 11877 dated 16 September 2000.

XII. Title of the land was changed on the basis of a sale deed which in actual fact is a conveyance deed. In this regard, the judgment in the case of State of Maharashtra V Mahavir Lalchand Rathod (1992 (2) Bom. C.R. 1) is relevant.

Reply to article dated November 14, 2010, with headline ‘One group of Salunke Vihar Residents seek transparency’

I. The contents of the news betray the headline. Transparency is inbuilt in MCS Act 1960 and the society bye-laws. As per society records, none of these members have availed the provisions of MCS Act and the bye-laws. It is on record that both Shri Johar and Shri Chandhiok were asked to verify details as permitted under the Act. They have not done it so far.

II. In our view, the members purported to be ‘one group’ have complained in vengeance.

Reply to article dated November 15, 2010, with headline `Is Salunke Vihar wrongly registered as co-op society?’

I. Army Welfare Cooperative Housing Society, Salunke Vihar, has been registered under the MCS Act 1960. It is not the only AWHO colony which is registered under the MCS Act in Pune. AWHO Colony Tucker Vihar at Hadapsar in Pune is also registered as Cooperative Housing Society under MCS Act. Registration of this society with that of Dara Enclave Navi Mumbai is not comparable.

II. As regards AWHO, their welfare activity is restricted to providing dwelling units on no profit no loss basis. The housing societies function with the contribution made by the members.

III. As per documents held with AWCHS, all members of AWHO were informed in 1985 that the societies formed by them will be registered under the respective State Cooperative Societies Acts. AWCHS was thus registered in 1986 under MCS Act as per directions of AWHO. There is no direction to the contrary from AWHO to register this society under Registration Act 1860.

IV. You have quoted an extract from AWHO brochure. This is a part of AWHO brochure 1987 as amended on 01 June 2008. In this brochure there is no direction to the effect that registration under Registration Act 1860 has a retrospective effect. This society was registered in 1986. AWHO brochure of 1982 was applicable at that time.

V. As per documents held with the society, Col. Padsalgikar was properly elected as promoter and his appointment was duly approved by the Dy Registrar, Pune City.

VI. It may be noted that AWHO had not sought membership of this society and hence Col. Padsalgikar was not required to obtain any NOC from AWHO.

Reply to article dated November 16, 2010, with headline ‘Did members flout norms at Salunke Vihar society?’

I. The contention that AWHO had sold the property to AWCHS is wrong. In the present case, the Sale Deed executed between AWHO and AWCHS was actually a Conveyance Deed. In this context, the Judgment in the case of State of Maharashtra Vs. Mahavir Lalchand Rathord (1992 (2) Bom. C.R. 1) is relevant. The property was conveyed to this Society because we accepted members of AWHO as our members. There has been no financial transaction between the AWHO and AWCHS.

Reply to report dated December 02, 2010, under the title ‘Probe under way into Stamp Duty evasion at Salunke Vihar’
The society has not evaded any stamp duty whatsoever.