Members, Rights And Responsiblities

Part - 12

v     Insolvency Of Members

Notwithstanding anything contained in the Presidency – Towns Insolvency Act, 1909, the Provincial Insolvency Act, 1920, or any corresponding law for the being in force, the dues of a society from a member, in insolvency proceeding against him, shall in order of priority next to the dues payable by him to Government or to local authority.

[Mapusa Urban Co-operative Bank Ltd. v. Dattarya A.P. Mhambra, 1999(2) Mh. L.J.505]

v     Issues & Solution

      Can a Public Trust be admitted to the membership of a society?

Ans. Yes, it can be admitted to the membership of the society as per provision of Model Bye-law No.18. However, it is to be noted that the change of use is not permissible unless the Municipal Corporation approves it.

      Can a society refuses membership? If so, on what grounds?

Ans. As per Section 23(1) MCS Act no society shall, without sufficient cause, refuse admission of membership to any person duly qualified thereof under the provision of the said Act and its Bye-laws.

      Can a member continue his membership in respect of his garage only?

Ans. A member can sell his flat and continue his membership in the society in the respect of garage only. There are the number of cases in housing societies where a member holds only a shop or a garage. It is not a condition precedent to membership that a person must hold a flat. A person can therefore be member of a Co-operative housing society in respect of only a shop or a garage. 

      What steps should be taken by eligible person if the Society refuses to accept him as a member even after the Registrar forward his application to his society?

Ans.(1) The eligible person has to make an appeal to the Registrar under Section 23(2)     of MCS Act.

       (2) The decision of the Registrar in appeal shall be final. 

          (3) However, application for revision can be made within two months by either party affected by the order to the State Government.

Note: The Registrar also can revise the order passed by the Deputy Registrar or the     Assistant Registrar.

      One of the members of our society has kept his flat locked for a long period. Now the society has decided to treat all the flats for white ants. The Pest Control people say that all the flats are to be treated simultaneously. What should be done about the flat locked by the member?

Ans. As per Bye-law No.46 it is the responsibility of every member to keep his flat clean. By keeping the flat locked for a long time and preventing it from being treated for pest control, the member is violating this obligation. The member should be directed to make the flat available for of pest control treatment failing which he will be liable for breach of Bye-law.

      Why is nomination necessary?

Ans. Nomination means nominating a person who will become a member on the death of a member. Nomination makes clear as to who will be the next member of the society and avoids obtaining probate from the court.

      Does a nominee become the owner of the Flat?

Ans. As such, a nominee does not automatically become an owner of the flat on the death of the owner. He holds the shares/interest in the flat in trust. In the absence of a will, however, the nominee does become the owner of the Flat. In case of a dispute raised by any of family member or legal heirs, the matter is referred to a competent court whose decision will be binding on the society, the nominee and the disputants.

      What is the position in the event of the will being contrary to the nomination?

Ans. The will is the final legal document and the person whose name appears in the will is the owner. In case of a contrary direction in the will, the nominee acts as a trustee & is obliged to transfer the interest & right of the deceased owner to the beneficiary named in the will.

      On what grounds can a member be expelled?

Ans. A member of Co-operative Housing Society is expected to follow the provisions, Bye-laws, Regulations and refrain from any act which is detrimental to the interest and working of the society. He may be expelled on the following grounds:

(1)   If he has persistently failed to pay the charges due to the society.

(2)   If he has willfully deceived the society by giving false information

(3)   If he has used his flat for immoral purposes or misused it for illegal purposes habitually.

(4)   If he has been in the habit of committing braches of any of the provisions of the Bye-laws of the society, which in the opinion of the Committee, are of serious nature.

(5)   If he has furnished false information or omitted to furnish material information to the Registering Authority at the time of registration of the society

      Can an expelled member be readmitted?

Ans.No member of the society, who has been expelled from its membership, shall be eligible for readmission to membership of the society, until expiry of the period of one year from the date of his expulsion, provided that on the recommendations of the meetings of the general body of the society, the expelled member may be readmitted to its membership, as a special case before the expiry of the period of one year, with the prior permission of the Registering Authority.

      If a nomination does not give any succession rights, why should one make it?

Ans.A nomination is a facility only. Upon the death of a member, the Co-operative Society will immediately transfer shares in the nominee’s name and admit the nominee as a member. If there is no nomination then legal heirs would have to follow a cumbersome and expensive procedure of obtaining a succession certificate from Civil Court.

      Is there any provision in the Model Bye-laws of the Society to suspend the rights and privileges of a member?

Ans.There is no provision in the Model Bye-laws of Co-operative Housing Societies authorizing the general body meeting of the society to suspend the rights and privileges of a member. The society, however, can consider expelling the member from the society under Section 35 of the MCS Act, read with Rules 28 and 29 of the MCS Rules.