Co-operative Housing Society

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
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)

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Provisions of the Bombay Stamp Act, 1958 for Gifting property to a relative

Q. I am planning to transfer one of my residential flats to a close family member either by gift or sale at a nominal price. Please guide me about the stamp duty and tax implications.

A. Your gifting the flat to a relative specified under section 56(2) of the Income Tax Act, 1961 would not attract any tax. It would not invite any income tax implications except that gifting the flat to your wife or son would also attract clubbing provisions of section 64 in respect of income from the gifted flat. Your gifting will not invite any capital gains tax implication but your sale will certainly. Sale of a flat would also invite the implications under the provisions of section 50C of the income tax act with the result that even if you sell at a lower price the capital gains would be computed on the stamp duty valuation when such valuation is higher than the sale price. Gifting property to a relative specified under the provisions of the Bombay Stamp Act, 1958 would attract lower stamp duty at 2% however sale to such a relative will attract stamp duty at full rate. In either of the cases, registration under the provisions of Registration Act, 1908 would be necessary.
Transfer of a flat to a family member would not attract any transfer premium by the society.

Q. My flat was purchased in the year 1993 and stamp duty was not paid on market value nor was the registration of the document done. Now that the building is going in redevelopment, whether such defects would come in the way?

A. Non-payment of stamp duty or non registration of the document of purchase of your existing flat would not be an issue for redevelopment of the property of your society. Such defect would not be a hurdle to your entitlement to the redevelopment benefits.

Q. We have sold an immovable property in our public charitable trust and we would like to plan the investment from income tax point of view. Our trust also has income from renting of property.
A. The provisions of income tax in respect of trust earning capital gains do not distinguish between short term and long term capital gains. To save tax, capital gains arising out of sale of immovable property should be invested during the same previous year in some other capital asset. For such investment, even a fixed deposit with a bank or a public sector company can also be a new capital asset for this purpose. CBDT circular on the subject requires minimum term of such fixed deposit to be 6 months but it is submitted that such requirement is directory and not mandatory.
As far as renting income is concerned, no general principle can be laid down, for deciding as to when a particular income should be treated as income from house property and when the income from business and each case has to be decided on its own facts. However, in general if the property is not commercially exploited by renting, it can be said that by and large the income from renting of property including a residential and including a commercial property would give rise to the Income from house property as that is the specific head for such income.

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Maharashtra Societies redevelopment fund corpus queries

I stay in Vile Parle. We live in a tenanted house from the last 50 years. We came to know that our landlord has sold the building in which we live but not told anything to us. We want our place to be redeveloped and to become ownership. Does he have the power to vacate us?

Since you are staying as a tenant for the last 50 years, you are a protected tenant and nobody can vacate you without adopting due process of law. The land owner need not inform you about the sale of his property to new developer/ new owner. Whoever be the new owner, he cannot compel you to vacate. In the course of redevelopment, the developer or new owner has to give you the new premises in the new building and during the construction period, he has to pay you the rent also. There is a trend that whenever a tenanted building is redeveloped, the tenants are also given the ownership rights in the new premises without any extra area or corpus. The tenants cannot claim the ownership in the new building under any provisions of the law but to have the smooth redevelopment, the land owners/ developers give ownership flats to the tenants in the new building. The developer/ new owner cannot make any demand of money or compensation from you.

We own a 1000 sq ft flat in a chawl system. Though originally the land belonged to some trusts we do pay regular taxes to the government for the place we live in. Still it is tagged as illegal property. I would like to know if we are eligible to claim for the flat if any development project comes up in near future.

Normally, during the redevelopment, the builder has to consider all the legal and illegal structures and take up the project. As you have stated, in case the builder tries to avoid you or does not promise the house in the new building, you may move the application to the competent court and get the stay on the entire redevelopment process. Most of the chawls in Mumbai are not having proper approval and are considered to be illegal. However, since they are paying government taxes and the structure is before 1995, the owners of such structures are given houses in the redevelopment. The area you are occupying may not be given to you. You may get the area as specified in the Development Control Rules under which your builder is carrying out the redevelopment. For example, if it is developed under slums provision, you may get only 269 sq. ft. If it is under cess building provision, you may get between 300 sq. Ft. and 753 sq. ft., provided it is in the city. The best idea would be negotiate with the developer when they approach to you for redevelopment. If the redevelopment is not possible without demolishing your area, the builder will have to approach you and then proceed for redevelopment. In case due to being termed ‘illegal structures’, if you are asked to vacate or issued any notice, you have to engage a very good advocate and proceed legally to have new house against the surrender of old house.

Ours is a 57 individual bungalows co-operative housing society, which is tenant co partnership type. Please advise whether we can have our individual bungalow converted to ownership basis? If yes, then who is the authority to implement above changes and what is the procedure involved? Can individual bungalow type society be redeveloped to multi-storey type housing society with few members opting to stay in their existing bungalows?

The society has to call a general body meeting and take a decision to give lease rights or ownership rights of the land appurtenant (plot area of the respective bungalow) to all the bungalow owners. Without the general body meeting, it is not possible. The same should be passed by two-third majority. In case the managing committee does not implement the above changes, you can request the Registrar to call a special general body meeting with the above agenda. Before approaching the registrar, at least 20% of the members should make an application to the committee with the above agenda to call the Special General body meeting (SGM). Within one month, if the committee does not call the SGM, then you can approach the registrar who will appoint an authorized officer to decide on the agenda. Once a decision to allot the respective plots to the respective bungalow owners and permit individual bungalow owners to redevelop the same by the society, the interested bungalow owners can proceed to redevelop the same. In case, only one or two bungalow owners want to develop and have ownership, the aggrieved member has to approach the appropriate legal forums after exhausting all recourses like making an application to the committee, requesting the general body and then to the registrar of the society.

What will be the Income Tax Treatment of the rent, corpus fund (hardship compensation) and shifting charges paid to a society member by the builder during redevelopment?

As per the many latest judgments given by the Income Tax Tribunal, Mumbai, the corpus fund/ Hardship compensation is not taxable as there is no cost of acquisition. In case of rent received during the temporary accommodation, if the entire rent compensation received is for alternative accommodation, the same is not taxable. In case, no rent is paid or if any amount is saved from the rental part, the same is taxable under income from other sources. Shifting charges will not be taxable as the same will be naturally spent by the member to shift the belongings to the new place.

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Maharashtra Co-operative housing society related queries answered

WHAT ARE THE NORMS TO BE FOLLOWED WHILE STANDING FOR ELECTION?

In our society election is to be held for the new managing committee. My question is whether a member who has not completed two years of his enrollment as a member of the society on the last day of nomination, can stand for election? Is there any change in the bye-law on this point?

There is no amendment to the bye-law about the minimum requirement of two year membership of a member to get himself elected to the managing committee and in all probability, the returning office will reject the nomination of such a member on the security of nominations received by him.

CAN INDIAN LAW SUPERCEDE PORTUGESE LAW IN INHERITANCE MATTERS?

I am a Christain and my father, who was having many properties including one plot, two flats and one house at Goa, expired on 9.9.1995. According to Portugese Law, this property will be divided in the ratio of 2/3rd to the widow mother and remaining equally amongst all the children. This is hurting me and the matter is pending in Goa court. Whether I can take shelter of any other Indian Law to get the equal share? Court has declared auction of the properties for distribution of the proceeds amongst the heirs. Can I stop the auction?

The matter is sub-judise and it will not be proper to comment on it. You may consult your legal advisor handling this issue in the court at Goa to proceed further in the matter.

 

WHAT IS THE UPPER LIMIT UNDER LAW FOR PAYING SOCIETY CHARGES BY CASH?

I would like to know whether it is mandatory to pay the society charges amounting to Rs.1500 and above by cheque only or a member can make the payment by cash?

The managing committee and the AGMs may take appropriate decisions whenever such issues arise. Most of the societies do not have that much infrastructure to handle the cash beyond cash at hand limit and to provide the security for large amount of cash till deposit in the bank. If the society has taken a decision that the payment above a particular limit will be accepted by cheque, it has to be abided by the members of the society. Otherwise also, the payment by cheques is always preferred for obvious reasons.

DOES A SWORN AFFIDAVIT PROVIDE ME WITH A CLEAR TITLE FOR SALE?

A flat was owned by my deceased mother. I got this flat transferred in my name by way of a Deed of Declaration. I have four sisters and no brothers. I have power of attorney from all my sisters relinquishing their rights in the said flat as it was in accordance with the will of my mother, which has not been probated till date. So to hasten the transfer process, I gave an affidavit that I am the only legal heir of my mother. I plan to sell the flat in the near future. Is my title to the flat clear in all respects, if not, what steps should be taken to make my title to the said flat good to rule out the possibility of any litigation or dispute at the time of selling the flat.

Any such transfer based on misrepresentation supported by a fictitious document shall not be legally valid. The right, title and interest in any property cannot be relinquished by way of a power of attorney and, hence, such power of attorney by your sisters is of no consequence. Further it is a criminal offence to give a wrong affidavit which is on oath and such tactics should never be resorted to. In the circumstances of your case, you should get the will of your mother probated and on the basis of the same, you should get the transfer of the flat regularized in your name and also to avoid any litigation or problem for selling the flat in future and to pass on a good title to the purchaser. When a will in your favour has been probated, there will be no necessity for any relinquishment from any other legal heirs, including your sisters.

Co-op. society

In the current market scenario which type of housing loan interest would be beneficial in the long run?
There are different housing loan schemes available from various banks and financial institutions. With increase in bank loan interest rates, it’s difficult to suggest which of the housing loan is better compared to others. I would recommend you to take proposals from 3 financial institutions and go for the best suitable scheme. Also apart from checking interest rates, you should look into factors like processing fees, legal charges, etc.

With the rise in interest rates of housing loans, is it the right time to buy a home?
The decision of buying a home should not depend on the home loan interest rate; rather it should be evaluated basis the current requirement, down payment and monthly EMI. If all these three things fit your requisite, take a decision immediately.

Do you think the interest rate of home loan will increase in near future?
I don’t see any immediate change in home loan rates. These rates will remain stable for next 6-9 months. Post 6 months, I see marginal drop in interest rates based on the rate of inflation present in economy.

Will I get a loan for buying a flat in a 31 year old building and are the terms and conditions generally same for that?
There are a few financial institutions that won’t provide loans for old buildings, but at the same time, there are some housing finance institutes who would be willing to help for this flat in 31 year old building.

Can I get a home loan to buy a plot outside the city?
This will depend on the type of plot you wish to buy outside the city. If it’s an agricultural land, the loan would be difficult; contrary to the non-agricultural (N.A.) plot, where you can avail the loan upto 60-80% of the plot cost. The State Bank of India (SBI) has got scheme for buying N.A. Plot.

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Answers for queries on property matters co-op housing societies

CAN SOCIETY PUT ITS NAME ON THE PROPERTY CARD FOR LAND THAT HAS BEEN LEASED ?
My father-in-law had a bungalow with open land approximately 800 sq. ft., which he gave to a builder on lease-hold basis to develop a building in the year 1975. After the completion of the building in 1979, a lease-deed was executed between my father-in-law and the society, with the builder as the confirming party, duly registered in April 1979. In addition, a Deed of Conveyance was also executed on the same day between the builder and the society, with my father-in-law as the confirming party, wherein his name appears as a purchaser of the flat, but no original documents are available. The society was paying lease amount of Rs.7200 per annum till about January 2010 i.e. approximately for the last 20 years. Suddenly the society has stopped paying the lease rent and applied to the Collector’s office to include the society’s name in the property card. My father-in-law has expired recently. Please advise if the society was correct in stopping the lease rent and whether they have got the right to get their name on the property card, though we still occupy part of the land with our bungalow.

It seems that the entire land, including beneath the bungalow, is a free hold land of your father-in-law and a portion of land, admeasuring 800 sq. ft, was given to the builder to construct the building and on the registration of the society, your father-in-law executed a lease deed for this portion of the land admeasuring 800 sq. ft and the conveyance deed for the building in favour of the society, with the builders as confirming party. The society is bound, as per the terms and conditions of the lease deed, to pay the lease rent to the legal heirs of your deceased father-in-law till the expiry of the lease term. In the property card the names of the legal heirs of your father-in-law will appear as the owners of entire property and the society for the building on the said portion of the land as the lessee. It will be necessary for the legal heirs of your father-in-law to obtain a succession certificate from the court in their favour, if he has not left any will. In case of a will, a probate will be required to be obtained. Thereafter, the legal heirs can proceed against the society for the payment of the lease rent as per the terms and conditions of the lease deed.

CAN SOCIETY LEVY MAINTENANCE CHARGES SEPARATELY TO A MEMBER FOR THE GARAGE?
Our society is 25 years old and has 5 garages each linked with the flat holders, as the same is shown in the Agreement of Sale of individual members. Till date society is charging garage charges only at Rs.100 per month from the members, who are in possession of the garages with the flats. I would like to know whether the managing committee can ask for and levy separately the charges like service charge, insurance charge, property tax, repair and maintenance and sinking fund for garage in addition to the flat from such members?

In terms of ‘definitions’ under section 2 of Maharashtra Owners Flat Association 1963, a garage, as described by you, falls in the definition of ‘a flat’. The levy of charges by the society are given in Chapter VIII bye laws No.67 to 69 of the model bye-laws. The service/ maintenance charges have to be borne by all the members of the society equally. The members, who own the garages may have to share these charges for two units. The property tax will be payable by the members as fixed by local authority. Water charges are payable on the basis of total number and size of inlets provided in each unit. The expense on repairs and maintenance and sinking fund are based on the construction cost of each unit. It may be clarified that the ownership of the garages in such cases vests with the owners along with the flat and no other member in the society will have right to use the same.

CAN DECEASED MEMBERS NOMINEE OR HEIRS ATTEND SOCIETY MEETINGS?
I am an associate member, as well as the nominee, for the flat owned by my father, who has expired on 28.11.2010. Our society is going for redevelopment. Whether my two elder brothers, being legal heirs may attend the society meetings and whether the present managing committee, without forming the redevelopment committee, may take all the decisions and any member, whose flat is road facing may claim from the builder new flat also road facing and whether any member occupying flat of ground floor road facing can claim extra benefit from the builder, who is planning to construct ground + first floor as commercial. For transfer of the flat in the name of the nominee, what documents are required to be submitted to the society and after transferring the same in my name, may I surrender the same to the builder?

After the death of your father, the society has to transfer the flat in your name as the nominee but by virtue of that, you would not become the exclusive owner of the flat. In the absence of any will by your father his Class-I heirs, such as your brothers, sisters (married/unmarried), your mother and grand mother, whosoever may be live, will be entitled to succeed to his property, including his flat. If your brothers are interested to attend the society meetings, they may enroll themselves as associate members and decide who would attend the meeting on your authority letter and in your absence. All the three cannot attend the society meetings. You, being the nominee, will be recognized by the society as the member and will be entitled to attend the meeting. As regards the location of the flats on redevelopment by the builder, this is entirely a matter of negotiations with the builders and the society. If you want the exclusive ownership of the flat in your name, succession certificate will be required to be obtained from the court and all the legal heirs, excluding you if you happen one of them, will have to execute a gift deed in your favour, which would attract stamp duty at 2% of the present market value of the flat (excluding your share if you are one of the legal heirs) and the registration charges at 1% thereon (subject to a ceiling of Rs.30000).

WILL OUR SHARE IN THE REDEVELOPMENT FLAT GO TO NOMINEES OR ALL HEIRS?
My father had a flat in a society, who expired before three years and mother expired prior to him. We are five brothers but father nominated his three sons for the flat. Please advise whether we all five brothers will have the share in the flat and in case one nominee is dead, whether his share will go to his wife and children. The building is going for redevelopment and the builder gave 18 months rent, what is the share of all the nominees or all five brothers?

The succession to the property of your deceased father, including the flat, will be governed by the personal law applicable in your case. The nominees hold the property merely as the trustee or agent on behalf of all the legal heirs of the deceased. If the nominee happens to be the legal heir of the deceased, only his share shall pass on to his legal heirs. The amount received from the builders on redevelopment shall belong to all the legal heirs of your deceased father.

CAN THE SOCIETY CHARGE EXTRA MAINTENANCE FROM A MEMBER WHO IS GIVING TUTIONS?
I am the owner of a flat in a registered society for the past 8 years. Since our occupation of the flat, my wife is giving private tuitions. Recently, the managing committee has decided to charge an extra amount over and above the regular society charges, because of the tuitions being given by my wife in the flat. Whether is it correct on the part of the society to collect extra amount due to this reason?

The society has got no right to charge any extra amount from you on the ground that your wife is giving private tuitions in the flat. However it may be kept in view that in terms of model bye-law No.50, nothing should be done in the flat which may cause nuisance, annoyance or inconvenience to any of the members of the society or no practice be carried, which may be repugnant to general decency or morals of the members of the society. In such a situation, the society has the right to stop all such practices. Nevertheless it is a question of facts and circumstances of each individual case to be decided by the committee and or the general body meeting and in case of any grievance, the matter may be taken up with the Dy. Registrar of the Societies.

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Answers frequently queries in can Maharashtra co-operative co-op housing society body issues, general meeting bye-laws

Can the Society amend the bye-laws? Can the Society frame bye-law?
It is the right of the Society to amend as well as to frame new bye-laws. However, any bye-law that is proposed to be amended or is to be framed should not be against the provisions of the Maharashtra Co-operative Societies Act,1960 or Maharashtra Co-operative Societies Rules, 1961.

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When should the Society conduct its Annual General Body Meeting? What should be the quorum for the Annual General Body Meeting?
The Annual General Body Meeting of the Society should be held on or before 14th August. If for any reason the Annual General Body Meeting cannot be held before that date an application should be made to the Dy.Registrar/ Asstt.Registrar of Co-operative Societies to grant extension of time to hold the Annual General Body Meeting. Normally an extension is granted by the Dy. Registrar/ Asstt. Registrar till November 14th. It may be mentioned that if in any case the Annual General Body Meeting cannot be held before the above said dates then the Society cannot hold the Annual General Body Meeting. The Meeting will be held by the officers appointed by the Deputy Registrar/ Asstt. Registrar of Co-operative Societies. The quorum for theGeneral Body Meeting is two third of the total number of Members or twenty whichever is less.

Who can attend the General Body Meeting of the Society? Can a person holding the Power of Attorney/ Letter of Authority attend the General Body Meeting?
Only the Member of the Society can attend the General Body Meeting and in his/ her absence the Associate Member can attend the Meeting. The right to attend the Meeting cannot be delegated. Persons holding the Power of Attorney/Letter of Authority cannot attend the General Body Meeting.

Is the General Body Meeting of the Society bound to sanction each and every item put before it by the Managing Committee?
The acts of the Society are done through the resolutions passed by the Managing Committee and the General Body. The day to day Management of the Society is carried out by the Managing Committee. However, Managing Committee has to function as per the directions of the General Body. It is possible that the office-bearers of the Society might propose an item which might appear to be against the interest of the Members. The General Body has the power to reject the proposals put forth by the Managing Committee.

What business should be transacted at the Annual General Body Meeting?
The following business should be transacted at the Annual General Body Meeting.
(i) To read the Minutes of the Last Annual General Body Meeting and the Special General Body Meeting/s that has been held after the last General Body Meeting and to take action thereon.
(ii) To receive from the Committee, the report on the preceding Co-operative Year’s working, together with the statement of Accounts in Form ‘N’ prescribed under Rule 62(1) of the Rules, showing the Income and Expenditure during the preceding Co-operative Year and the Balance Sheet as at the close of the preceding Co-operative Year.
(iii) To consider Audit Memorandum, if received from the Statutory Auditor, for the previous Co-operative Year or years, along with the Audit Rectification Report of the Committee thereon.
(iv) To declare the result of election to the Committee, if election to the Committee has taken place during the year in which the Annual General Body Meeting of the Society is held.
(v) To appoint an Internal Auditor, if considered necessary and to fix his remuneration.
(vi) To consider any other matters, specifically requiring decision, concurrence or sanction of the General Body Meeting of the Society, by virtue of the provisions in the Act, Rules and the bye-laws of the Society.
(vii) To consider any important communications received from the Registering Authority, the Statutory Auditor, Government, Collector, Local Authority or any other officer of the Government.
(viii)To appoint Statutory Auditor for the coming year.
(ix) To consider any other matter, excepting those requiring proper notice, with the permission of the Chair, after the regular agenda is over.

Does the Amendment to the bye-laws become effective as soon as they are approved in the General Body Meeting? What is the procedure for amendment of bye-laws?
The bye-laws of the Society can be amended by passing the resolution in the General Body Meeting. The formalities with regards to amendment of bye-laws are as under:
(a) The resolution must be passed by 2/3 Members approval who are present in the Meeting.
(b) The resolution must be submitted to the office of the Registrar within two months from the date of the Meeting at which the resolution was passed with the below mentioned information
(bi) Copy of the relevant bye-laws in force along with the amendment/s proposed to be made in pursuance of the resolution together with reasons justifying the amendment.
(bii) Four copies of the text of the bye-laws as it Will stand after amendment/s is/are signed by the office bearers duly authorised by the Managing Committee of the Society.
(biii) A copy of the notice given to the Members of the Society for the proposal to amend the bye-laws.
(biv) Additional information as may be required by the Registrar. On receipt of the above said information/s the Registrar shall normally dispose off the application within two months from the date of receipt of the application. If the Registrar is of the opinion that the proposed amendment may be accepted subject to any modification then he may suggest the modification to the Society. It may be emphasized that it is at the discretion of the Registrar to approve the amendment. By merely passing a resolution to amend the bye-laws the same does not become effective.

What should the office bearers of the newly elected Committee do if the earlier Committee refuses to handover the charge of the records of the Society? Can the newly elected Committee obtain the records of the Society with the help of Police Officer?
The office bearers of the newly elected Committee may request the Chairman and Secretary of the outgoing Committee to prepare the list of the inventories and to hand over the same to the Chairman of the Society. The office-bearers may also write to the Registrar of Co-operative Society. The Registrar may make the necessary inquires & may empower any person on his behalf to receive the charge of the records of the Society. On receipt of such a written directive from the Registrar the Ex-chairman should handover the records. If the Ex-chairman does not comply with the above said directive then on conviction he can be punished with simple imprisonment which may extend up to one month or with a fine not exceeding Rs. 500 or both. The Registrar or a person authorised by him may also apply to the Executive Magistrate within whose jurisdiction the Society is functioning for seeking and taking possession of the records and property of the Society. If the Magistrate is satisfied that immediate action is required then he may authorise any police officer above the rank of Sub-Inspector to enter and search any place where the record & property are kept or likely to be kept and to seize them and handover the possession thereof to the Registrar or the person authorised by him as the case may be.

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Co-operative housing society related queries answered bye laws CHSL

I am a senior citizen of 71 years age, own a flat in a housing society in Mumbai. I have my wife, one daughter (already married) and a son. My daughter is well off and has already purchased flats in her name. I wish that after my death, the flat should be transferred in the name of my wife and after her death in the name of my son. If I send a letter to this effect to the society, would it be binding on the society? In the alternative, what is the solution? I have already nominated my wife for this flat in the society and this nomination is duly registered. But I understand that in case of nomination, the nominee holds the property as a trustee on behalf of all the legal heirs and not the exclusive owner. I want that she should become owner after my death. Please advise.

The letter to the society as mentioned in your query will not be binding on the society and hence it will not serve the purpose. The best way is to execute a will making your wife as the owner of your flat during her life time and after her death, your son as the exclusive owner of the flat. Such a will should be in writing and attested by minimum two witnesses and it would not need any stamp duty and the registration is not mandatory. In the meanwhile, the nomination in the name of your wife may continue. As the society would deal with her until an order to the contrary is detained by your son from a court of competent jurisdiction.

We shall feel obliged if you can quote if there is any further Government Notification or clarification after the Circular dated 1.8.2001 which has clearly stated the ‘exclusions’ such as sinking fund, insurance, repair fund, water charges etc. for calculating 10% of monthly service charges. According to society this circular includes the exclusion of property tax only.

There is no other circular after the Government Circular dated 1.8.2001 to my knowledge which excludes only municipal taxes. But the monthly service charges are defined in Model Bye Law No.8 and this bye-law does not include the contribution towards sinking fund, insurance premium, repair fund and individual water charges etc. Therefore non occupancy charges at 10% have to be calculated on the basis of the service charges for the items mentioned in bye-law No.68.

We have one 3 BHK combined flat by way of two agreements. One flat of 2 BHK is in the name of my mother as first holder and me as the second holder. The second flat of 1 BHK is in the name of my wife as the first holder and mef as the second holder. The society has issued only one share certificate. I had applied to the society to issue the share certificate in my name as the first holder (my share being the maximum), my mother as the second holder and my wife as the third. But the society insists that the first name would be of my mother and the second and 3rd name can be decided by us. Whether the society is right because if there Is any dispute in future, my wife may object why her name is not the first. Please reply.

When the plan of the building of the society has been sanctioned with two flats one 2 BHK and other 1 BHK, both of these flats cannot be combined or amalgamated without the prior approval of the sanctioning authority and until then, they would be treated two flats and two share certificates need to be issued one for 2 BHK flat in the name of your mother as the first holder and yourself as the second holder and for the second flat your wife as the first holder and yourself as the second holder. Till such approval for amalgamation of the flats, all the society charges will have to be paid for two flats as per the bye laws of the society.

I am the holder of the flat in the building constructed in 1969. The flat is in the name of my sister-in-law, who gifted it to my wife (her sister).after gift tax was paid and gift deed duly executed and registered. We requested the society to transfer the flat and complied with all the requirements, but no action was taken for two months and the society insisted for transfer premium of Rs.25000 though the building is going for redevelopment.
The society insisted for the said payment on the ground that this has been the practice since long time as per the decision in the general body. It has refused to issue the fresh share certificate. I would like to know whether the transfer premium is payable for the transfer within the family and whether the society may impose payment not permitted by law?

Firstly, when the flat has been gifted in the name of your wife, you cannot be the holder of the flat as mentioned in your query. Secondly the demand of the society for the transfer of the flat by your sister in law in the name of her sister, who is your wife, is not justified and is against the provisions of bye laws. Any decision taken by your society even in the general body meeting, which is against the provisions of the laws or the bye laws or the rules or regulations or the Government Notification, is not legally valid.

Recently I have taken possession of the flat on 6.4.2010 after payment of society charges for one year to the builder. After a few months the process to form a society has been undertaken and a core committee has been formed in January 2011. In the month of March and May, managing committee displayed a notice showing monthly charges from the month of January 2011 and they refused to accept the payment for April to June. They have also threatened to forbid me from the use of common amenities. According to them the builder has shown outstanding dues against my flat and he is taking time to clear it. It seems the other residents of other flats have not paid to the builder for the last two years. Can the managing committee collect the dues with interest from a date of possession till date? The builder is taking long time to settle the accounts. What is the possible solution?

A society can collect the charges from its members only from the date of its registration. The maintenance charges etc. have to be paid by the purchasers of the flats to the builders as per the agreement which he has to account for as per the provisions of Section 5 of the Maharashtra Ownership Flats Act and any excess amount collected till the registration of the society has to be passed on the society. For the failure of the builder, legal action may be initiated against him as per the provisions of the said Act.

I am a 52 years old asthma patient living in 4th floor of the building, which has no lift. On my request, the society gave me the permission by passing a resolution in the AGM as, “permission is given to install the lift subject to approval from BMC and lift cost, installation charges, maintenance expenses etc. will be borne by the flat owners who will be using the lift and the society will not bear any cost.” When I wanted the NOC from the society to submit the documents to BMC, it informed me that NOC will be given by the society after receiving no objection letters from the concerned members of the building where the lift will be installed. I would like to know whether the society is justified in asking for such an NOC, when a resolution has already been passed permitting me to install a lift without any condition.

The permission by the society is not unconditional as mentioned by you. The resolution clearly states that the cost of the lift, installation charges, and maintenance expenses will be borne by the flat owners, who will be using the lift and society will not bear any cost. However there are two issues involved, firstly the said cost and the expenses and secondly NOC from the members where the lift will be installed abutting the walls of their flats. The society is owner of the building and flat owners are merely the occupants on ownership basis and, therefore, once the permission to install the lift has been issued by the society by way of a resolution in AGM, NOC for installing the lift abutting the walls of the members of the owners is not justified. However the society is within its right to call for the NOC of the flat owners, who will be using the lift, about bearing the aforesaid charges so that it may be able to charge the expenses accordingly, once the lift is installed.

I am the secretary of Jayshree Krishna Darshan CHS Ltd. Most of the members purchased the flats in the year 2005 and took the possession in same year and subsequently we have formed an ad-hoc committee. The builder and the ad-hoc committee registered a society in the year 2008 without OC and conveyance. The committee members have served a legal notice to the builders for the OC and the conveyance but there is no response from him. The managing committee has the option to appoint a consultant for the OC and the deemed conveyance or directly obtain the same from BMC, which would need the expenses in the range of a couple of lakhs. If we approach the consumer court, the decision may take time. The builders have three shops in the society and we want to debit the expenses to him. We are not having sufficient funds to spend. Please advise.

It is the legal responsibility of the builders to provide all documents to the society including the occupancy certificate and he has to execute the conveyance in favour of the society as per the provisions of Maharashtra Ownership Flats Act and in case of breach of the provisions of the said Act, a criminal case may be filed against the builder. The expenses to be incurred by the society to obtain OC and the deemed conveyance can only be recovered from him through the due process of law.

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Maharashtra Co-operative housing society – Co-op Societies act issues and answers

Which are the items of which inspection of the Society records can be taken free of charge as per Section 32of the Maharashtra Co-operative Societies Act,1960? Can the Members of the Society take inspection of all the records of the Society?
As per Section 32 of the Maharashtra Co-operative Societies Act,1960, the Members of the Society can take inspection free of cost at the Societies office during office hours or any time fixed for the purpose by the Society, inspection of Audited balance-sheet, profit and loss account, list of Members of the Managing Committee, register of Members, Minutes of the general Meeting, Minutes of the Committee Meeting and those portions of the books and records for which his transaction with the Society has been recorded.

In spite of requests, the Office-bearers of the Society are not showing the records of the Society. Suspection is that the records are being manipulated by Society to suit their convenience. What can be done?
As a Member of the Society you are entitled to go through certain documents/records. You are also entitled to get Certified Copies of certain documents, on payment of the prescribed Fees.
As per Section 32 of the Maharashtra Co-operative Societies Act,1960, every Member of the Society shall be entitled to inspect, free of cost, at the Societies office during office hours, or any time fixed for the purpose by the Society, a copy of the Act, the Rules and the bye-laws, the last Audited Annual Balance Sheet, the Profit and Loss Account, a list of the Members of the Committee, register of Members, the Minutes of the General Body Meetings/Special General Body Meeting, Minutes of the Managing Committee Meeting and those portions of the books and records in which his transactions with the Society have been recorded.
If you desire to obtain Certified True Copies, then you should apply for the same in writing along with the prescribed Fees. A circular has been issued by the Co-operative Department, whereby Members are entitled to inspect all the records of the Society.
Can the Society recover compound interest from Defaulters? We have passed the same in the General Body Meeting. Please inform us the maximum amount of interest that can be charged by the Society to the Defaulters.
Your attention is drawn to the provisions of Bye Law No. 72. The Society has no right to charge Compound Interest. Societies should charge Simple Interest from Defaulters. Even if you have passed a resolution in the General Body Meeting you cannot recover Compound Interest. The General Body cannot act against the provisions of the Co-operative Societies Act, Co-operative Societies Rules and the bye-laws of the Society. The Maximum amount of simple interest can be up to 21%.

Can Members incur expenses for and on behalf of the Society and later adjust the same against the maintenance dues?
Members do not have a right to incur expenses for and on behalf of the Society unless the Society authorises the said Member to incur expenses for and on behalf of the Society.

When should the minutes of General Body Meeting be circulated?
The Committee should finalise the Draft Minutes of the General Body Meeting of the Society within 3 months from the date of the Meeting and should circulate the Draft Minutes amongst all the Members of the Society within 15 days from the Meeting of the Committee at which the Draft Minutes are finalised.
Members of your Society may communicate to the Secretary their observations, if any, on the Draft Minutes within fifteen days of the date of the circulation. The Committee at its subsequent Meeting should prepare the final Minutes of the General Body Meeting after taking into consideration the observations, if any, made by the Members on the Draft Minutes and cause them to be recorded in the Minutes book by the Secretary of the Society or any other person authorised in that behalf.

What is the procedure for adoption of new model bye laws?
The adoption of bye laws should first be discussed in the Managing Committee Meeting. Thereafter a General Body Meeting should be called. The said proposal should be passed with two third majority from amongst the Members who are present in the General Body Meeting. The amendment proposal should reach the office of the Asstt. Registrar/Deputy Registrar within two months from the date of the General Body Meeting. The necessary forms (PP Form) duly filled should also be submitted to Dy. Registrar/Asstt. Registrar.

How many days notice should be given for calling the Annual General Body Meeting? How many days notice should be given to call a Special General Body Meeting? Should intimation of the Annual General Body Meeting and Special General Body Meeting be given to the registering Authority? Can a Special General Body Meeting be called with a shorter notice, if there is any emergency?
Fourteen days clear notice should be given before calling the Annual General Body Meeting. Five days clear notice should be given before calling a Special General Body Meeting. Intimation should be given to the registering Authority before calling the General Body Meeting. Yes, in case of an emergency Special General Body Meeting can be called by issuing a short notice if the Committee unanimously decides to call Special General Body Meeting.

When does the Registrar conduct an inquiry with regards to the working of the Society?
The Registrar can on his own or on an application received by 1/3 of the Members of the Society conduct an enquiry into the Constitution, working and financial conditions of the Society. Before he conducts the enquiry the Registrar may inquire with regards to the nature of allegations involved and require the application of deposit of such sum money as may be determined by him towards the cost of the enquiry.
If the allegations made by the applicant are substantially proved the deposit collected from the applicant will be refunded to the applicant. If it is proved that the allegations made are false, vexatious or malicious, the Registrar may direct that such cost shall be recovered from the applicant. If the result of the enquiry shows that the allegations were not false, vexatious or malicious but for any reason the same could not be proved then such cost will have to be borne by the State Government.
All persons including the officers, Members, past Members of the Society and other persons deemed fit by the Registrar in respect of whom the enquiry is held and/or are in possession of the information can be called upon to furnish such information, books and papers relating to the Society which are in their custody or power and all co-operation in this regard Will have to be given to the Registrar.
If the person in possession of information does not co-operate in producing the books and/or answer the question which are put to him by the Registrar or the person appointed by the Registrar then the Registrar can levy a penalty of Rs. 500.
The Registrar or the persons conducting the enquiry is duty bound to communicate the decision to the Society whose affairs have been investigated. It may be emphasised that by recent circular the power to conduct the enquiry can only be delegated to Deputy Registrar and/or the Assistant Registrar.

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Maharashtra ownership flats act and Co-op housing society-related questions and answers

* Encroachment of common areas by members using them for storage
Our Building is having 21 flats, comprising of seven floors. Though the builder has registered the society, but he has not handed over the building formally to the society and since most of the members are working at different places, they have no time to follow-up the matter with the builders. On two floors, some of the owners have occupied the common area of electric duct and fire duct and using the same as store. We received the notice from the Fire Department to clear the area, but they have not responded. Since our society is too small and the members have no time to attend the meetings, what can the society legally do in the matter?

In terms of Section 11 of the Maharashtra Ownership Flats Act, 1963, a promoter/developer has to convey his right, title and interest in the land and building and to execute all the necessary documents and hand over the same to the society and the non-compliance amounts to a criminal offence. No common areas etc. can be encroached upon by any member of the society and the electric duct and fire duct can never be put to any such use of storage etc. by any member on any floor of the building of the society.
The society is fully empowered under the bye-laws to take action against such persons, which may include even the expulsion of the membership from the society.
In case of failure of the society to act, the matter may be taken up with Dy. Registrar of Co-op. societies. In addition, anti-encroachment squad of the Municipal Corporation may be approached to have these ducts cleared of any such encroachment.
The non-compliance of the notice of Fire Department may create problems to the office bearers of the Society.

* Flat sellers refuse to sign society transfer related documents
I have purchased a flat in a society in Malad (West) from the owners, who are related as brother and sister. The Agreement has been registered and they have given me the share certificate and 50% of the transfer fee Rs.12,500, but they have refused to sign the various forms etc. about the resignation from the membership of the society and my enrolment as the member, which are essential according to society. In the registered agreement executed by the vendors in our favour, there is a clause as, “vendor is responsible for the society membership to be transferred in the name of the buyer”. I have sent a legal notice, but they have not responded. Whether there is any alternate remedy, since I do not want to pursue legally, as the vendors are 80 years old and they hail from Goa, which is my native place, besides time and money involved in legal proceedings.

The refusal of the vendors is not legally tenable and justified and they have to comply with the requirements as per the bye-laws of the society. For this compliance, their personal presence is not required at Mumbai and even if it is so, they may execute a power of attorney in favour of their trusted person for this purpose. If still they are adamant, you may move a suitable petition in the court of competent jurisdiction against them for the compliance of the terms and conditions of the agreement for sale, as you have already served a legal notice on them.

* Office bearers illegally holding and selling society parking space
Our building was completed around the year 2004 and the society was formed in March 2006. We have 11 flats with 5 stilt parking and 6 open parking. But the chair person of the society is holding two stilt parking and two open parking, out of which she has already sold one to a member at premium. The treasurer is holding two stilt parking and one open parking. According to them, they have purchased the same from the builders, but they are unable to show any documents. We enquired from the Secretary about any such document, but no reply has been received from her. We reported the matter to the Dy. Registrar of the Societies, but it is a lengthy affair. Please let us know if we can take any other recourse or approach any other department to bring out the truth and take back the illegally occupied stilt and parking slots; so that the same may be allotted to the needy members. We are afraid that as the 3-4 members control the committee, they may sell their flat with the parking to incoming members. Please advise.

No member, including the chair-person or any other office bearer of the society, can hold parking slots contrary to the provisions of bye-laws and no one can sell the same. The society has to follow the bye-laws for the allotment of parking slots (Refer to model bye-law No.78 to 85). In case of the failure of the Dy. Registrar to look into your grievance in a reasonable time, you may approach the Minister of Co-operation at Mantralaya to issue suitable directives to the Dy. Registrar to expedite his enquiry and decision in the matter. Any incoming member purchasing the parking slots shall be doing so at his/her own risk, as such a sale is not binding on the society. The members of the society are also empowered under the bye-laws to have free of cost the inspection of the documents, registers, books, minutes etc. and to obtain the copies of the documents, as per the provisions of Section 32 of the Maharashtra Co-operative Societies Act. You may, therefore, exercise your right and ascertain the veracity of the statements of the chair-person and treasurer from the records of the society.

* Unable to sell A flat without the completion and occupancy certificate
I stay in a building in a registered society at Mira Road but the society does not have a completion certificate as well as the occupancy certificate. I am finding it difficult to sell my flat. Please let me know what is the procedure for obtaining the same, and what is the implication on the buyer, if these documents are not available and how the society has been registered without the CC/OC?

In terms of the provisions of Section 10 of the Maharashtra Ownership Flat Act 1963, as soon as a minimum number of persons required to form a cooperative society has taken flats, the promoter has to take the steps for the registration of the cooperative society and if he fails, the competent authority may upon receiving the application from the persons, who have taken the flats from the promoter, may direct the Dy. Registrar or Asstt. Registrar to register the society. A group of eligible persons may also form and register a cooperative housing society and acquire land to construct flats. Therefore, a society may be registered even where the construction of the building is not complete and occupancy certificate has not been issued. Such certificates have to be obtained on the completion of the construction from the local authority. The building may be occupied only after the receipt of the occupancy certificate and these documents are necessary to ensure that there is no violation of the FSI by the promoter or the builder. During the process of due diligence, a buyer would always like to satisfy that the flat, proposed to be purchased by him, is not an unauthorised construction.

* Flat purchased with joint names but gift deed transfers to single person
My father purchased a flat in my name in the year 2001 and I sold it in August 2008. I purchased another flat in the joint names with my wife, my name being first and her second. In February 2010, I got the gift deed duly stamped and share certificate transferred exclusively in my name. My question is that since the gift deed is not registered, can I claim absolute ownership rights of the flat?

In terms of the provisions of Section 17(a) Indian Registration Act, a gift deed has to be, necessarily, registered and the transfer of the share certificate, exclusively, in your name by the society without having the duly registered gift deed is not valid. A document which requires, compulsory, registration and if it is not registered, it cannot be taken into evidence in any proceedings. Therefore, you cannot claim full ownership rights of the flat on the basis of unregistered gift deed, as and when such a need arises.

* Transfer of inherited flat title in a society undergoing redevelopment
My father was staying with me and my family for three years before he died. Prior to that, he was staying with a woman and her illegitimate son and his wife and when the son came to know, he left that house after handing it over to the society for redevelopment. My father was the sole owner of the flat and before his death he had nominated me for the said flat and made a will in respect of the flat in my name. I have obtained the probate of the will and the case is before the cooperative court about my claim on the flat, as the society is not handing over me the keys of the flat. Whether anyone can stop me from getting possession after the will is probated?

If a person has left a will in respect of his self-acquired property in favour of his son, which has been duly probated, in addition to the nomination in the records of the society, the son will be entitled to inherit the flat after the death of his father and society cannot refuse to hand over the keys of the flat to you. But since the matter is now before the cooperative court, you may wait for the final decision in the matter.

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Questions about maharashtra co-operative housing society act

CAN A SOCIETY CHARGE COMPOUND INTEREST?
I am a member of Kailash Udyan CHS Ltd., which has been charging compound
interest @ 21% p.a. for the delayed payment of society charges.
When I enquired, they informed that it has been passed in the AGM. Can a society charge compound interest?

———- In terms of provisions of the model bye-laws, society can charge only
simple interest on the delayed payment, subject to a ceiling of 21% p. a.
within which limit the AGM may decide the rate, but in no case compound
interest can be charged.

WHY ARE NOMINEES NOT TREATED AS OWNERS?
The Bombay High Court has ruled in favour of a nominee in case of a share
demat account so why this should not hold good for the society share. In actual life the rights are transferred to the nominee in most of the CHS flats
and in case of will, many people do not obtain the probate and it is also a very
difficult task. Why a nominee should not be treated as a beneficial owner?

———– There is a provision of nomination in various types of moveable and immoveable properties, such as life insurance policy, employees provident fund, bank deposits, national saving certificates, company shares, cooperative societies in Maharashtra, mutual funds etc. and the true nature and scope of a nomination is governed by the provisions of the statutes governing these properties. It is a well settled law in case of a life insurance policy that a nominee is merely a trustee or agent on behalf of the legal heirs of the deceased. Similarly it has been held that in case of cooperative societies in Maharashtra, a nomination under Section 30 of the MCS Act is not a special rule of succession altering the mode of succession laid down under the personal law of the deceased. In case of EPF, NSC, bank deposits, different views have been taken in judicial pronouncements, but the majority view is that the nominee is not the beneficial owner. In the case of demat share account, the Bombay High Court has held in the case of Harsha N. Kokate that the nominee becomes entitled to all the rights in the shares to the exclusion of all other persons in view of the language of the provision of Section 109 of the Companies Act. If a nominee has to be made a beneficial owner of the property of the deceased, suitable provision will be required to be made in the Indian Succession Act, Hindu Succession Act and the personnel laws of the other communities and till then, the present position will hold good.

WHO IS RESPONSIBLE FOR MAINTENANCE DISPUTES?
I have given my flat on leave and license basis. The agreement is stamped and registered for a period of 3 years. I am paying the non-occupancy charges at the prescribed rate to the society. If there is a dispute with the licensee about reimbursement of maintenance charges payable to the society, please advise who has to bear the same.

—– It will depend on the terms and conditions agreed upon between both the parties and as recorded in the agreement. If the Agreement is silent on the point, the issue may become debatable. The licensee may claim that the monthly license fee has been agreed upon as inclusive of the same. The other view is that the maintenance charges consists mainly of electricity charges, water charges, wages for the sweeper, the employees of the society, watchmen etc. When a flat has been given by the owner on leave and license basis, these services are being utilized and availed of by the person actually residing in the flat i.e. the licensee and, therefore, all these charges should normally be paid by the licensee. Where these charges include property tax, the same will be required to be paid by the owner of the flat. Therefore, the Leave & License Agreement needs to be drafted carefully to make the intentions of the parties crystal clear to avoid such ambiguity.

CAN A BANK REFUSE TO TAKE OVER AN EXISTING LOAN?

I own a flat jointly with another person B and we had constructed two floors of which ground floor belonged to me and first floor to B. Since this plot is from the category of the government land (from the category of B- 1), we both had paid the required charges to Collector. I have taken a loan of Rs.40,00,000 from HSBC for my flat on the ground floor. Now we both have entered into a development agreement with a builder to demolish the existing construction and to construct a 17 storey building. I applied to a nationalized bank for takeover of the loan of HSBC, but the bank has refused for the same, though I am eligible for more than outstanding loan. Is the stand of the bank correct?

 

——– The stand of the nationalized bank is absolutely legally correct and justified. How they can take over this loan of HSBC, when the security created in favour of HSBC does not exist as on today and there will be no security for the loan with the said nationalized bank. On the contrary HSBC should initiate immediate steps for the recovery of its dues from you and proceed against the builder who demolished the portion of the building which was already mortgaged to it. Similar cases are happening in Mumbai and it seems to be a matter of system failure inasmuch as while entering into a development agreement, neither the flat owners who have already mortgaged their existing flats disclose this fact to the builders nor the society, wherever registered and issued the mortgage NOC, disclose this fact to the builders nor the municipal corporation and other authorities enquire about any such existing charge on the building or any portion thereof, before issuing the necessary approvals. In fact the banks and housing finance companies may face serious problem in case of default for the recovery of its dues in such cases. This issue was brought to the notice of RBI, NHB, IBA but it is unfortunate part of our democratic system that unless there is some pressure, nothing moves and preventive measures are not taken well in time.

CAN A SOCIETY ARBITRARILY FIX POOJA CONTRIBUTION?

I am a member of Prabhat Tower CHS, Vasai Road. In the month of January, managing committee displayed a notice asking Pooja Contribution @ Rs.250 per flat without the consent of the members of the society and as this was not acceptable to me as I own two flats having only three members and I was required to pay Rs.500. When I asked the managing committee why these charges have been included in the bills, they simply replied that it is compulsory to pay whether you are available or not for pooja function, including the meals. I gave a letter about the non-payment of these charges and requested the managing committee to amend the bills, but it did not agree and have shown the same in the bills for the month of March and April and issued instruction to pay to avoid any legal action. Is it necessary to pay such charges and whether they can include the same in the regular maintenance bill? After the said controversy I have stopped paying repair charges and the maintenance bills. What will be the consequences of non-payment?

——– Any collection towards religious ceremonies, including pooja with meals etc., cannot be made compulsory by the managing committee or even the general body meeting and the society cannot adopt coercive measures to collect the same, as such a decision is not supported by the byelaws or the Act or the Rules. In case of non-payment of these charges, society cannot take any legal action against you. However, as a matter of retaliation, you should also not stop the payment of the maintenance bills and repair fund decided by the society as per the bye-laws and in case of non-payment, the society may recover the same with interest and proceed against you as per the bye-laws. No member can also take the stand that there is no need of any repair to the outer elevation of his apartment, as the society is under obligation to maintain the building of the society including its elevation etc.

CAN BANKS DISCRIMINATE BETWEEN LOAN APPLICANTS?
I have entered into an Agreement for Sale to purchase a flat with a Widow, who has executed the agreement for self and as the natural guardian of her minor son and applied for a housing loan to a nationalized bank, which is insisting for the succession/ heirship certificate and the permission of the court for the sale of the share of the minor, whereas one of my friends has entered into a similar transaction with a Karta of a HUF, which consist of minor also, but his banker has disbursed the loan. Why this discrimination?

——— For the purchase of flat in the name of a deceased, succession or heirship certificate by his or her legal heirs is necessary and where one of the legal heirs happens to be a minor, court permission for the sale of the share of the minor is necessary as per the provisions of law, because a natural guardian, may be either father or in his absence, mother is not legally entitled to sell, transfer or mortgage the share of a minor in the property. However in case of a HUF, situation is different in the sense that a Karta of HUF can sell, assign or mortgage the property of the HUF, which may consist of a minor, either for legal necessity or for the benefit of the estate. Thus a Karta of HUF enjoys much more powers than a natural guardian, as far as the sale, transfer, mortgage of a property or a share therein of a minor is concerned.

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