Wednesday, March 30, 2011

Section 6 of the Maharastra Co-operative Societies Act, 1961


The other documents necessary for Housing Societies are as follows:
The person who has legally acquired or intends to acquire a plot or flat in the proposed Society can join in application for registration of a Society. The following procedures have to be fulfilled:
·         The documents pertaining to the purchase of land/building.
·         Title clearance certificate.
·         Sanctioned/Proposed plan and layouts for construction of building / houses.
·         Proof of payment of stamp-duty and registration of documents.
·         Certificate from the architect showing the scheme of construction.
·         In case of Builder promoted Societies, FORM- Z and for others FORM-X is to be submitted.
·         60 % of the total members should join in the Registration Proposal.
(i) Registration is optional in the case of a flat owner to another person in a registered Co-operative Society. This is because under section 41 of the Maharashtra Co-operative Societies Act, 1960, any instrument relating to a transfer of shares in a society is exempted from compulsory registration.
(ii) A flat owner to another person in an unregistered society. Registration is advisable.
This is because registration of a document safeguards the interest of a purchaser.
In the Rules framed under the Act known as Maharastra Co-operative Societies Rules, 1961, the Registrar classifies the societies under section 12 and Rule 10 where housing societies is classified into three categories-
(a) Tenant Ownership Housing Society- where land on which the houses are built and constructed is obtained either on lease-hold or free-hold basis by the society for the joint activities of the members.
(b) Tenant Co-partnership Housing Society- is a housing society, which holds both land and building either on lease-hold or free-hold basis and allots the flats or other premises in the building to its members.

Monday, March 28, 2011

Section 6 of the Maharastra Co-operative Societies Act, 1961


The procedure for Registration of a society begins with electing a Chief Promoter in a meeting of the Promoter who has the authority to sign the necessary documents on behalf of the promoter members and open a bank account in the name of the proposed Society after obtaining the necessary permission from the Registrar.
The Chief Promoter will apply to the Registrar for reservation of name of the Society of the proposed society and permission to collect share-capital. The name once reserved is valid for 3 Months. He will then deposit the collected share money in the bank account of the proposed Society. This has to be done only after receiving the name reservation from the Registrar and after collection of the necessary share capital.
The application for registration should be accompanied with the Scheme showing economic feasibility of the proposed Society, bank balance certificate, and list of persons who have contributed to the share-capital and the entrance fee of the proposed Society.
The Registrar will enter the particulars in register of application maintained in Form "B" and give serial number and issue receipt in acknowledgement of the same.
Afterward, if the Registrar is satisfied that a proposed society has complied with the provisions of the said Act and the rules and its proposed bye-laws are not contrary to this Act or to the rules, he shall within 2 months from the date of receipt of the application register the society and its bye-laws.

Wednesday, March 23, 2011

Section 6 of the Maharastra Co-operative Societies Act, 1961


To form a Co-operative Society, Section 6 of the Maharastra Co-operative Societies Act, 1961 lays down the conditions for registering a society which is among others, that a minimum of ten members would be required to own the various units in the building. These persons should be from different families.
Also, these persons should be competent to enter into a contract under the Indian Contracts Act 1872
Every developer has to form a Co-operative Housing Society at one point of time or another. With the limited amount of options available with regard to management of the affairs of the building i.e. (a) Condominium (b) Private Limited Company and (c) Co-operative Society, (excluding the unrealistic rental housing), it will not be an exaggeration to state that in atleast 90% cases particularly in Mumbai the Promoters and/or the Builders have formed a Co-operative Housing Society. The flat purchasers normally do not know the basic requirement for Registration of Co-operative Housing Society. It is here that apart from the statutory obligations cast upon the builder, the builder as a friend, philosopher and guide of promoters helps in forming a Co-operative Housing Society.
Earlier, unless the registration proposal was signed by 90% of the flat purchasers, the society could not be formed. Now, even if 60% of the total number of flat purchasers is willing to form a Society, then the Co-operative Society can be formed.
The Society has to be registered with the Registrar of Co-operative Societies. The application for registration has to be made in FORM-AUnder section 8 of the Act, 1960 states that for the purposes of registration, an application shall be made to the Registrar in the prescribed form and shall be accompanied by 4 copies of the proposed bye-laws of the society and such registration fee as may be prescribed in this behalf. The application should be signed by at least 10 persons (such persons being a member of a different families) and who are qualified under the said Act.

Monday, March 7, 2011

HIGH COURT ORDERS FRESH ELECTIONS TO MANAGING COMMITTEE OF INDUSTRIAL COOPERATIVE SOCIETY



 “Members not having filed indemnity bonds within 15 days of being elected cease to be part of the managing committee. All documents signed when they have ceased to be managing committee members are illegal and cannot be given effect to proceed in any matter pertaining to the society’s day to day affairs.”

“When residents of the society insisted on seeing copies of the indemnity bonds, the accused purchased stamp papers and prepared back-dated indemnity
bonds,”. Another resident, moved the HC alleging fraud. The court asked the additional controller of stamps (Mumbai) to investigate. The investigation revealed that the dates on the indemnity bonds were forged. An officer at Bandra police station said a complaint was registered under Sections 465, 467 and 471 of the IPC.



Mumbai, December 25 The Bombay High Court recently ordered fresh elections to the managing committee of an industrial cooperative society in Chunabhatti. Following their removal from the committee for non-execution of bonds under the Maharashtra Cooperative Societies Act,  had moved the HC contesting the order passed by the Divisional Joint Registrar as he was “facing corruption charges and his anticipatory bail application was rejected by the sessions court”.

The Managing Committee of the was superseded by an order of the Deputy Registrar of Cooperative Societies . The members challenged the order before the Divisional Joint Registrar . who is under suspension, according to Assistant Government Pleader  dismissed their appeal following which the members moved the HC.

the petitioners contested  order as he had passed it on October 23, a day after his anticipatory bail application was rejected by the session’s court. The petitioners expressed apprehension that the order was “based on consideration other than merit”,

that if the petitioners' contention was accepted, the court would have to order an inquiry into the allegations and, if found true, the matter will have to be referred back to the appellate authority for fresh hearing.

contended before Justice Khanwilkar that the managing committee was removed on technical grounds as they ceased to be members for non-execution of bonds. submitted that instead of going into allegations and counter-allegations, it would be appropriate to hold fresh elections to the committee. 

observing that the removal was technically correct, the court directed that the three members of the seven who had executed the bonds should continue to function as the Board of Administrators instead of the single administrator appointed by the Deputy Registrar of Cooperative Societies on July 6.

the HC then directed the Deputy Registrar of Cooperative Societies to issue order in this regard by December 27. The court also directed that elections to the committee should be held within three months. The court has, however, asked the not to take any major policy decisions during this period. 

Friday, March 4, 2011

Rule 58-A of the Maharashtra Co-operative Societies Rules 1961 is reproduced below:&INDIA: MANAGING COMMITTEE OF CO-OPERATIVE HOUSING SOCIETY MUST EXECUTE BOND March 2008



"Every elected member of the Managing Committee shall execute a bond in Form M-20 within fifteen days of his assuming the office. Such bond shall be executed on the stamp paper as provided under the Bombay Stamp Act 1958. The expenditure on stamp paper shall be borne by the society. The Chief Executive Officer / secretary of the society shall receive such bonds and keep them on record of the society and accordingly inform the Registrar within Fifteen days from the formation of the Committee."

It is clear from above that the bond must be executed within fifteen days of assuming of office by each member of the Managing Committee in Form M-20 on a stamp paper. Failure will invite penal consequences.

INDIA: MANAGING COMMITTEE OF CO-OPERATIVE HOUSING SOCIETY MUST EXECUTE BOND March 2008

The legislature having experienced and realized that the members of the Managing Committee of different co-operative societies were acting in an arbitrary manner, with a view to have some accountability amongst the members of the Managing Committee, have enacted a provision in the Maharashtra Co-operative Societies Act, 1960 ("MCSA") mandating every member of such Managing Committee to execute a bond within 15 days from the date being elected as Committee member. If the committee member fails to execute the bond within the specified period, then such member shall be deemed to have vacated his office as member of the Committee. This provision has been given effect by Section 73(1AB) of the MCSA.

This legislation was recently challenged by a Writ Petition filed in the Bombay High Court (Writ Petition No. 457 of 2007) under Article 226 of the Constitution of India on the ground that the same is ultra virus. However, the Bombay High Court has upheld the legislature’s act.

The intention of the legislature is to make the members fully aware of their personal responsibility and liability towards the society and its members. The time limit laid down under Section 73(1AB) is mandatory and the elected committee members have to hand over the bond to the Deputy Registrar of Co-operative Society within such stipulated time.

This ruling of the Bombay High Court in the aforesaid writ petition emphasizes the basic principle of "ignorance of law is not an excuse" i.e. being unaware of the provision contained in Section 73(1AB) of the MCSA cannot be used an excuse for the failure to execute the bond within the stipulated time.

When a managing committee is elected, it is mandatory for them to file indemnity bonds (before the registrar of societies) accepting responsibility for wrong-doing, if any, during their tenure. Without the indemnity bonds, the society cannot enter into a deal to redevelop the property.

“The election took place on May 25, 2004. The committee was constituted on the same day. The indemnity bonds ought to have been placed on record by committee members on or before June 9, 2004, which was not done,”

Tuesday, March 1, 2011

Redevelopment of old housing societies in Mumbai: Indemnity bond in form m-20 MSC act Section 73(1AB) of the Maharashtra Co-operative Societies Act 1960 is reproduced below:



"The Members of the Committee shall be jointly and severally responsible for all the decisions taken by the committee during its term relating to the business of the society. The members of the committee shall be jointly and severally responsible for all the acts and omissions detrimental to the interest of the society. Every such member shall execute a bond to that effect within fifteen days of his assuming the office, in the form as specified by the State Government by general or special order.

The member, who fails to execute such bond within the specified period i.e. within fifteen days from joining the Managing Committee member, shall be deemed to have vacated his office as a member of the committee."

Further, the power to decide whether the losses incurred by the society are due to act or omissions of members of the committee is given to the Registrar

"Provided that, before fixing any responsibility mentioned above, the Registrar shall inspect the records of the society and decide as to whether the losses incurred by the society are on account of acts or omissions on the part of the members of the committee or on account of any natural calamities, accident or any circumstances beyond the control of such members."