Division of A Co-operative Housing Society

v     General

The Maharashtra Co-operative Societies Act, 1960 (Section 17) and the Maharashtra Co-operative Societies Rules, 1961, provide for division of a Co-operative Society. The procedural details are given in the Act and the Rules. They are summarized here.

v     Grounds for division

Division of a society is not permissible unless the Registrar is convinced that there is no alternative other than to divide a society into one or more subdivisions. The Registrar may consider division of a Co-operative housing society on the following grounds:

(a)                The membership is so large that the affairs of the society are unmanageable.

(b)               The units (building) are located plots which are far away from each other, rendering the management of the society difficult.

   

(c)                There are factions in the society.

v     The prerequisite for bifurcation

The plots on which the buildings are constructed should be independent of each other in the Municipal records. If the buildings are constructed on the same plot, the plot should be divisible. If the plot is not divisible, bifurcation is not possible.

v     Scheme

The Secretary of a society should first prepare a scheme for two or more units and place the same before the meeting of the managing committee of the society. The scheme should include

(i)                  Reasons for bifurcation

(ii)                Details of the land and buildings to be divided

(iii)               The basis on which the assets and liabilities are proposed to be divided

Preliminary approval of the proposed scheme of division of the society by the Registrar is necessary before the scheme is finally approved by him.

v     Procedure of preliminary Approval

(i)            A general body meeting, with due notice as provided in the Bye-laws of the society, should be convened. A proposal for division of the society should be included in the agenda of the general body meeting. Copies of the proposed scheme of division of the society should accompany the notice and both should be field with the Registrar. 

(ii)          A resolution, deciding to divide the society on the basis indicated above has to be passed at the general body meeting with a simple majority. Thereafter, the society should make an application (for which no form is prescribed) to the Registrar, together with a copy of the notice convening the general body meeting, a copy of the proposed scheme of division of the Society and a copy of the resolution of the general body meeting of the Society deciding to divide the society. This is necessary to obtain the Registrar’s preliminary approved of the scheme.