Archive for February, 2016

Co-op society norms amended

Members of co-op housing societies will have to attend at least 2 AGMs in 5 yrs.
Want to skip the annual general meeting (AGM) of your co-operative housing society? Do it at your own peril. For, it could cost you your membership.

Though members crib about lack of amenities in their housing society, majority of them usually do not bother to attend the AGM. And, even if they do, they do not raise any issue at the meeting or participate in the election process.

So, to increase the participation of members of housing co-operative societies in administrative matters, the state government has introduced a series of amendments to the co-operative act.
According to the amendment introduced in the co-operative Act by the government in March, any member of a co-operative society, including housing, will have to attend at least two AGMs in five years, failing which he or she is likely to lose membership.

However, the member would be given the opportunity to explain his or her absence. The government has also imposed restrictions on the district registrars of co-operatives. Henceforth, a district registrar can supersede the society and appoint administrator only if the government’s financial interest is involved. As the government does not have any stake in housing co-operative societies, the district registrar cannot supersede the body on any issue, said sources in the cooperative.

Of course, this rule only applies to agriculture societies or farmers’ credit societies where the government provides loan for agriculture.


Now, attending general body meetings of your hsg society is a must

Those who do not attend the meet for 5 years will be barred from voting or contesting society polls, according to amended co-op act
Make it a point to attend all general body meetings of your housing society. For, under the amended Maharashtra Co-operative Societies Act, 1960 members of co-operative housing societies who do not attend at least one general body meeting (GBM) in a consecutive period of five years stand to lose the privilege of voting and contesting elections.

Though experts welcome the provision as positive and expect it to bring in more transparency in functioning of cooperatives, property owners especially those working abroad or out of the state find it taxing.
Advocate Dnyanaraj Sant, secretary of Grahak Hitavardhini, a consumer rights organisation, said there is no provision in the act for members to nominate someone else to attend meetings on their behalf. A non-active member may become an active member after five years if he fulfills all eligibility criteria.

“It is not practical for everyone living abroad who own homes in India to come within six months of the closing of the financial year, which is the time period within which the GBM is supposed to be held. Most people come to India in December, when they get Christmas breaks,” said Anagha Bhise, a chartered accountant working in Hampshire, UK who owns a flat in Pune.

To whom the law is applicable

Housing societies registered under the cooperatives act, cooperative credit societies, cooperative banks, cooperative sugar mills, cooperative ginning mills and other institutions registered as cooperative societies under the cooperatives act.

Fundamental right

Constitutional amendment that led to the change: The 97th constitutional amendment makes it a fundamental right to form a co-operative society by inserting the words “or co-operative societies” in Article 19 (1) (c), which guarantees the right to “form associations or unions or co-operative societies”.

The amendments

Amendments to the Maharashtra Co-operative Societies Act, 1960

The amendment makes it mandatory to hold a general body meeting (GBM) within six months of the closing of the financial year, i.e. before the end of September every year.

The term of office of elected members of the management committee is now five years. This is aimed at continuity in executive decisions. The term was not defined earlier.

The minimum number of members for the management committee is 7 and the maximum is 21. The Act has been amended to include reservations for SC/ST, BC, women, NT, in the absence of whom the seats will be filled by the other members.

The state government has been given the authority to constitute a state co-operative election authority, along the lines of the State Election Commission, which will be vested with quasi-judicial powers to take action against members who do not comply with the provisions of the Act.

You can take your housing society to consumer court

The Consumer Disputes Redressal Commission directed the district consumer forum to hear the case of Rajan Alimchandani against his society by declaring him a “consumer”.
Now, residents of cooperative societies, locked in a battle with the management, need not wait for years to get justice from cooperative courts. They can hit the fast track to justice — consumer courts.

In a landmark judgment, the State Consumer Disputes Redressal Commission directed the district consumer forum to hear the case of 72-year-old Worli resident Rajan Alimchandani against his society by declaring him a “consumer”. The commission also directed the forum to dispose of the case within three months.

Three years ago, the management of Venus Cooperative Housing Society on Worli Seaface, of which Alimchandani is a resident, decided to replace the old bathroom pipes. The decision was taken without a general body meeting, and each flat owner was billed an additional Rs5,000 over and above the maintenance charges. The society plumber was entrusted with the job after Rs1,40,000 was collected.

Alimchandani found leakages inside his bathroom ever after the pipes were changed. “This happened after I had my bathroom spruced up at my own cost. I spoke to the management, but no one responded to my written complaints. So, I moved the district consumer forum,” said Alimchandani.

But the forum dismissed the complaint, saying that under the Consumer Protection Act (CPA), 1986, he was not a consumer. Alimchandani then filed an appeal in the State Commission. In an order, Justice BB Vagyani and member Anjali Karadkhedkar said the Supreme Court had observed that the remedies under CPA for the aggrieved party were wider.

It said CPA not only created a framework for speedy disposal of consumer disputes by granting specific reliefs, but the consumer forums too had the jurisdiction to award compensation for mental agony and suffering. The Commission held Alimchandani a “consumer” and his complaint maintainable, and directed the case back to the district consumer forum for speedy redressal.

Although Alimchandani has demanded Rs 32,000 as compensation for his three-year-old battle, he wants to donate the money to the society for repair work. “For me, it was a fight for my rights,” he said.

The judgment has wider repercussions as more than 15,000 cases are pending in the six cooperative courts in Mumbai. “Cases referring to deficiency of services like leakage and parking can now be tried in consumer courts for faster redressal,” said advocate and president of Co-operative Societies Residents and Users Association Vinod Sampat.

No clarity on rules for election to housing societies in Mumbai

Though the state government has postponed the elections to co-operative societies till the end of 2014, there is no clarity on rules for elections to housing societies. The rules for election to housing societies have to be framed by the co-operative authorities.

Co-operation minister Harshvardhan Patil had told media persons that the co-operative societies with less than 100 members can conduct elections on their own. However, confusion still persists as the rules for the same are yet to be framed. The draft for framing of the rules is pending with the minister.
“Even housing societies with less than 100 members will not be allowed to conduct elections on their own. First let the rules be framed,” said an official of the co-operative department.

“It is for the minister to approve the rules and then we can frame them,” an official said.

There are 32,000 co-operative bodies, including housing societies, which have not held elections since 2011. The election authority will supervise, control and conduct polls to all registered co-operative societies, including housing societies, banks, credit societies, sugar factories and milk federations.

The state had amended the Maharashtra Co-operative Societies Act, 1960, and notified the authority too and also appointed certain posts for the election authority. However, it has not appointed the election authority that is the state co-operative election commissioner so far.

The state has around 2.28 lakh co-operative societies with around 5.25 crore members, including 88,472 co-operative housing societies.

Society must pay for repairs of leaky roof: HC

The Bombay High Court, in a recent decision, has held that a co-operative society is responsible for repairs of a leaking roof.
MUMBAI: The Bombay High Court, in a recent decision, has held that a co-operative society is responsible for repairs of a leaking roof.

Justice BH Marlapalle, in his decision last month, ordered Humble Home Cooperative Housing Society in Bandra to reimburse Rs 8,458 — cost of roof repair — to Sham Balani, a flat owner.

The case dated back to 1990, when Balani, who had to repair the roof of his top floor flat as it was leaking, demanded that society reimburse the expenses as per the Maharashtra Cooperative Societies Act, 1960.

The issue became a little tricky, as the terrace above Balani’s flat was owned by another flat owner as a private terrace.

In a suit before the Co-operative Court, Balani pleaded that according to principles governing cooperative housing society, even the private terrace belonging to one of the flat owners was the property of the society, hence the society was responsible for its repairs.

The Cooperative Court upheld this argument, and directed the society, to bear expenses for repair of terrace, which was a part of roof of Balani’s flat.

However, the society challenged the ruling in the Bombay High Court.

But the high court, while confirming that society will have to bear repairing expenses for leaking roof, observed that a private terrace was not society’s property.

Further, the high court held, it was not necessary to decide whether such a terrace was society’s property in this case.

Bylaws framed by the state government for housing societies — under the Maharashtra Cooperative Societies Act — clearly say that maintenance and repairs of roof of a flat is society’s responsibility, the court ruled.

Transfer of shares in CHS is liable to registration

Land has not been conveyed in favour of our society. Is there any stamp duty on transfer of shares? Can society refuse to transfer membership without registration? Can a society charge fees on transfer of garage?
In case of transfer of shares in a co-operative housing society, what is conveyed by the instrument of transfer is not only the transfer of shares but such transfer of shares is coupled with right, title and interest in the immovable property and therefore on such a transfer, stamp duty becomes payable.
Merely because no conveyance has been executed by the builder or landlord in favour of co-operative society, it cannot be said that flat owners are transferring only the shares and not right, title and interest in immovable properties. Instruments of transfers of shares in a CHS by virtue whereof ultimately flats get transferred are conveyance under the provisions of the Bombay Stamp Act, 1958.

With regard to registration, one may like to take a stand that section 41 of the Maharashtra Co-operative Societies Act, 1960 provides, with overriding effect, exemption to any instrument of transfer of shares in a co-operative society.

However, there is a circular of department of co-operation requiring committee to ensure stamping and registration before effecting transfer of shares in a CHS. A flat purchaser may contest validity of the said circular being in contradiction of the specific provisions of law.

As far as society is concerned, committee would have to implement the said circular. Registrar of co-operative societies would go by the circular. Registration Act, 1908 also requires registration of an agreement for sale, but section 41 of MCS Act, 1960 overrides Registration Act, 1908 in respect of transfer of shares in a co-operative society.

Courts have consistently taken a view that transfer of shares in a CHS is in substance transfer of immovable property. Flat purchaser having paid various kinds of considerations would like to get transfer effected by the society in his favour at the earliest.

On such considerations, a strong case lies in favour of requirement of registration of an agreement for sale of a flat in a CHS. If, however, the shares have already been transferred in favour of a member, then the CHS cannot enforce registration.

Under the provisions of MOFA, 1963 read with model bye laws of a CHS, a garage is also a flat and therefore transfer of garage would attract transfer fees.

Be the first to comment - What do you think?  Posted by admin - February 2, 2016 at 11:11 am

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Amendment to Maharashtra Co-operative Societies Act approved

The Act is applicable to 2.47 lakh co-operative bodies all over Maharashtra with an annual turnover of Rs6 lakh crore and a total member strength of 5.50 lakh.
The Maharashtra cabinet has approved amending the Maharashtra Co-operative Societies Act, 1960, state minister for co-operation Harshvardhan Patil said in Mumbai on Thursday.

The Act is applicable to 2.47 lakh co-operative bodies all over Maharashtra with an annual turnover of Rs6 lakh crore and a total member strength of 5.50 lakh.

The amendments, necessitated due to the 97th constitutional amendment, were discussed at a cabinet meeting here yesterday, the minister told reporters.
The state government will issue an ordinance and the new measure would become effective from February 16.

As per new norms, co-operatives having an ‘A’ audit class for three consecutive years would be able to park their funds in nationalised, scheduled and urban co-operative banks.

To enable elected co-operative bodies to complete their five-year terms, it has been decided that their elections will be conducted only after completion of their terms, through a proposed State Co-operative Election Authority, Patil said.

The strength of the board of directors will be fixed at 21, of which five seats will be reserved, he said. Out of these five reserved seats, two seats would be for women, one for scheduled caste / scheduled tribe, one for other backward class, as well as one for ‘Vimukta Jati’ and notified tribes, he said.

Co-operative housing societies would be able to initiate recovery of dues from defaulting members by instituting measures which could include seizure or disposal of flats of concerned members, he said.

Under new norms, it would be mandatory for an annual general meeting to appoint an auditor. Audits of co-operative bodies would be carried out by certified government auditors, he said.

Maharashtra: Government to conduct survey of elected bodies in co-operative housing societies across state

Showing concern that hundreds of societies did not have a board or managing committee to look after the affairs of the condominiums, members wanted more information from the government. Ashish Shelar asked if the government planned to gather data on this.
The government will be conducting a survey of elected bodies in cooperative housing societies across the state. This information was recently given in the assembly during a calling attention motion.

Showing concern that hundreds of societies did not have a board or managing committee to look after the affairs of the condominiums, members wanted more information from the government. Ashish Shelar asked if the government planned to gather data on this.
Calling attention is a procedure whereby a member calls the attention of a minister to a matter of urgent public importance. The minister concerned makes a brief statement thereon after which members seek clarifications.

There are nearly 81,000 co-operative housing societies, including over 12,000 from city, in the state. These are divided in two groups – K and D. The first category comprises housing societies that have less than 200 members, while the other has a member count of more than 200. Each housing society should have an elected body in place by June 30.

“We will conduct a survey to check if the elected bodies are in place,” said Dadaji Bhuse, minister of state for co-operation. Two other issues that were raised will also be taken for discussion stated the minister. These were allowances given to those conducting elections and to the CA’s. On the issue of shortage of people in the registrar’s office, the minister said that staff from other departments would be taken for the work to be carried forward.

Housing society administrators or overstaying guests?

The powers enabling the Registrar to expel a committee are to be exercised only sparingly and to bring erring societies and their committees to book.
Here’s a ready reckoner on the office, its powers, duties and responsibilities

Cases of appointment of administrators in cooperative housing societies are on the rise.
Generally, the deputy or assistant registrar of cooperative societies (the Registrar) appoints an administrator upon a complaint(s) from any member(s) of the society, if he finds that it is a fit case to expel the managing committee of the society. Such an action may invite mixed reactions from the concerned society depending upon the facts of the case and depending upon the perception of the members about the manner of management of the affairs of the society by the expelled committee. The powers enabling the Registrar to expel a committee are to be exercised only sparingly and to bring erring societies and their committees to book (M R Bhuibhar vs Divisional Joint Registrar: 1982 Mh.L.J. 368).

Such powers have to be exercised by the Registrar after giving the committee an opportunity of being heard and an opportunity of stating objections and by application of principles of natural justice.

Wide powers
Section 78 of the MCS Act, 1960 inter alia equips the Registrar with such powers to be exercised upon the specified grounds including when the managing committee has committed defaults or has been found negligent in the performance of duties, or has committed an act prejudicial to the interests of the society or its members, or has willfully disobeyed the directions of cooperative authorities, or is not discharging its functions properly and diligently, or if the business of the society has come to or is likely to come to a standstill.

When the committee is removed, the Registrar has two options:
i. to appoint three or more society members, who should not be the members of the committee being removed, or
ii. to appoint administrator(s) in place of the expelled committee.

However, in practice, the first option is hardly exercised. On the contrary, the same person is appointed as an administrator of more than one society.

Remuneration payable to an administrator is to be fixed by the Registrar. The Act and the Rules are silent about the basis for or methodology of fixing such remuneration. On equity and reasonableness, such remuneration has to be with reference to the nature and quantum of functions performed by the administrator. In some cases, the administrator, in turn, appoints a private individual and remotely functions through such private appointee. The bank account of the society is operated by the administrator himself. The administrator or the private appointee, as the case may be, does not devote more time for managing the affairs of the society. Under the circumstances, the remuneration should be based on these aspects. The quantum of time spent by the administrator or his appointee may be noted on a day-to-day basis. The society or its member(s) may keep such records if they want to take up the issue of reasonableness of remuneration at a later date. In fact, the entire practice of appointing such private persons by the administrator and remuneration to him is questionable under the law.

Tenure of administrator
The law provides for appointment inter alia of the administrator for a maximum period of six months, which may be extended for a further maximum of three months. However, suffice to emphasise that such an extension has to be for the reasons to be recorded in writing and under proper intimations to the society. All powers, whether judicial, quasi judicial or administrative, are to be exercised objectively and reasonably.

The spirit of the law is that the administrator should set the things right and hold elections at the earliest. The administrator is like a guest to manage the affairs of the society on an ad hoc basis till a new committee is constituted by due process of law. Problems may arise when the guest overstays and beyond the need.

Powers and functions of administrator
Being an ad hoc appointee, the powers of an administrator are quite restricted. Legally speaking, the administrator replaces the managing committee and therefore the powers of an administrator, under no circumstances, can exceed the powers of the managing committee.

Recently, in the matter of Palm Towers Co-operative Housing Society Ltd, the Bombay High Court has inter alia ruled that the administrator is appointed for the purpose of holding elections and to constitute a proper managing committee. The administrator is not ordinarily required, nor expected to take policy decisions.

The administrator has no power to enroll new members; he has only power to organise elections in accordance with the law and the byelaws of the society (K Shantaraj vs M L Nagaraja, AIR-1995 SC 2925; Joint Registrar of Co-operative Societies, Kerala vs T A Kuttappan and Ors, (2000) 6 SCC 127. Section 32(4) of the Kerala Co-operative Societies Act, 1969 is par-materia with section 78(2) of the MCS Act, 1960.

Supremacy of the general body continues
An administrator replaces the committee and therefore, the supremacy of the general body continues. There is no provision in the Act, Rules or the byelaws prohibiting the holding of general body meetings during the continuance of an administrator. And very rightly so, because upon appointment of an administrator, the functions and affairs of the society do not come to a standstill and the powers, which are reserved and vested in a general body, can be exercised by the general body only. The decision of the general body, subject to the framework of the law, would be binding upon the administrator being in place of the committee.

Administrator to set example of good governance
Since an administrator is appointed in place of a delinquent committee, the manner of functioning of the administrator should be exemplary so that the society, its members and the incoming committee can observe good governance by functioning objectively and transparently. As part of the minimum requirement of such good governance, the administrator should disclose to members complete details of income and expenditure and receipts and payments for each month.

Similarly, decisions taken by the administrator from time to time should be communicated to the members with reasons.

Office of the Registrar is a public authority covered by the RTI Act
There can be instances when the society or its member(s) are not satisfied about exercise of powers by the Registrar in relation to removal of a committee, appointment of an administrator, continuance of the administrator, functioning of the administrator, remuneration to the administrator, etc. In all such or similar circumstances, one may use the provisions of the Right to Information Act, 2005 as the office of the Registrar of Co-operative Societies and all its organs are a public authority subject to the provisions of the said Act.

Housing societies not under RTI yet: Info chief

The 97th constitutional amendment made RTI activists happy because they believed that it brought co-operative housing societies under the purview of the RTI Act.

In February, the state passed its own ordinance implementing the amendment.

He spoke with dna’s Ashutosh Shukla about cooperative societies, pending second appeals and voluntary disclosure.

Your opinion on housing societies coming under RTI?
I don’t think that they come under RTI Act. One has to read section 2h of the RTI Act to see what it covers. Just because an amendment enables something to come up, does not mean it is established by the government. Societies are a body formed by 20 people. Where is the public interest in that? Even if it did come under RTI, whom will we fine as public information officers? Private companies too are formed under Companies Act but that does not mean they come under RTI unless they are financed or adhere to some of the provisions.

What is the status of second appeals?
There are around 23,000 second appeals in all benches. In my bench, people will be able to get orders within two months if they file an appeal today. Due to vacancies the pending appeals in greater Mumbai region are over 3,000, of which, around 1,500 are of 2011 and 1,600 of 2012. By December, 1,500 appeals of Greater Mumbai bench will be cleared.

Voluntary disclosure under section 4 of the RTI Act has not improved much.
There is nothing much the commission can do. The state government, collectors and people heading the authority will have to take most of the initiative. We had issued directions to all public authorities to properly implement section 4. This time, a reminder will go a warning that disobedience of the commission orders will attract serious contempt under section 166 of the IPC (deals with imprisonment of public servant or fine or both)

Be the first to comment - What do you think?  Posted by admin - at 11:02 am

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