By I C Naik
Readers must be wondering why adopt model 2014 and then immediately make so many amendments? Adoption of this Model is not compulsory as of now. The Registrar of Cooperative Societies has been empowered vide a new proviso appended to Section 14 of the MCS Act 1960 (w.e.f. 14-02-2013) to ‘specify the Model bylaws, for such type of societies or class of societies, as he may deem fit.”.2014 Model has not been specified as a specified model for all cooperative housing societies in exercise of this power.
When that is done the Model Bye-Laws will acquire very high status by becoming a part of the MCS Act 1960 as declared by the Constitution of India, in Co-Operative Central Bank’s case… on 3 April, 1969 [1970 AIR 245, 1970 SCR (1) 206 QUOTE : It has no doubt been held that, if a statute gives power to a Government or other authority to make rules, the rules so framed have the force of statute and are to be deemed to be incorporated as a part of the statute. Every housing society’s petty quarrels will land up in the Supreme Court, stage by stage. Read full judgment on: http://indiankanoon.org/doc/924801/
There are two reasons for adopting this model to start with. Firstly it will be registered by the Registering Authority without asking questions. Secondly, it will update internal regulations such that the managing committee will not make an accidental breach of the changed society law post 97th Constitutional Amendments. The amendment could become contentious and its completion may drag on for months.
Why amend immediately, because certain Bye-Laws are inconsistent and not workable well. Rule No 13 of the MCR 1961 lays down in detail steps required to amend the Bye-Laws. The Registering Authority requires justification for every change in Bye-Laws passed by 2/3 majority of members voting on the resolution, in general body meeting specially called to pass this resolution after giving 14 days’ notice. In this new series we take up justification for every amendment suggested in two parts earlier. This is Part 1.
The very first amendment by inserting 3 Clauses (a)(b) and (c)was in fact long overdue. Why the C C & R C S did not consider it is a mystery in itself. Absence of this fund has done a huge damage to housing societies unintentionally. The classification of this cooperative society as housing society is based on the definition which is a very foundation of every housing society. Adding a Clause No (xviii-a) after Clause (xviii) reading as “ Common Amenities and Services Fund’ is justified because the MCS Act 1960 as amended in 1986 requires every society to provide Common Amenities and Services and establishing a separate fund was required to focus on this declared object of housing society.
The second amendment is of extreme importance. It is not at all enough for an active member to pay maintenance just once in five years. Maintenance payment keeps housing society in proper shape. It is no less than oxygen for a living being. If a member has persistently failed to pay the charges due to the Society, he is liable to be expelled pursuant to Bye-Law No 49(a). Another harsher provision concerning the arrears of maintenance must also be noted. A member of the managing committee is disqualified to contest or to continue if already there, if he defaults in paying arrears just for three months.[Bye-Law No 117b]. In fact section 101 provides for a procedure to recover such arrears as land revenue.
Amendment No 3 is to align the definition of the Associate member to that as per the MCS Act 1960 U/S 2(19)(b). In any case Associate having no share in the interest of the property of the society has no other right except that as provided U/S 27(2) of the Act as a small matter of convenience.
Amendment No 4 is to remove the definition of a term “authorized person” having no bearing on members’ power to grant any authority under the Act.
Amendment No 5 provides for three important changes.
- As the co-owner Associate member can also vote and join the managing committee it is necessary that his attendance at the general body meeting is recognized in to the concerned condition for Active membership.
- Most housing societies need to hold at least one special general body meeting raising the tally of the general body meetings to 10 in 5 years. Only one meeting out of 10 or more meetings does not make any person active in the true sense of the term.
- Substitution of Bye-Law No 22(c)(i) also removes the Proviso as that is contrary to the Constitutional mandate under new Article 243ZO(2) namely “(2) The Legislature of a State may, by law, make provisions to ensure the participation of members in the management of the co-operative society providing minimum requirement of attending meetings by the members….” The Proviso neutralizes this mandate.
Amendment No 6 is necessary since the Sub-clause (iii) of Clause ( c ) of Bye-Law No 22 must be identical to item (iii) in Sub-clause (a) of Clause (xxiv) of Bye-Law No 3 both requiring a member to contain arrears of society charges to a maximum of 12 months.
Amendment No 7 has two fold objectives. One is the inexpensive access to electronic media and another is to respond to a call of 97th Constitutional Amendment to provide education to members of cooperative societies [Article 243ZO(3)].
Amendment No 8: The Housing manual issued U/S 79A and posted on the website of the C C & R C S has prescribed a similar condition on page 16 :To quote: “A person, who became an Associate member by paying only admission fee, shall not get any rights in voting or election behalf the original member. It is necessary for the Associate member that his share/name is included in the ownership of property for holding share jointly.”More over Bye-Law No 117 (d) enables an Associate to join the Constitution after following a procedure prescribed therein but Bye-Law No 25 expressly prohibit the society to confer on Associate any right except that provided U/S 27(2) that is of voting in general body meeting if main member is absent. Enlightened members of housing societies can read this Manual on the following. https://sahakarayukta.maharashtra.gov.in/site/upload/documents/Housing%20Manual%202012%20English.pdf
Amendment Nos 9 and 10 are to align nomination provisions to section 30 of the MCS Act 1960. Bye-Law No 32 enables Associate member to file nomination in respect of his joint share in the property of the society separately. U/S 30 a member ( i.e. main member) is permitted to nominate a person. Moreover prescribed forms concerning nominations do not recognize Associate member filing a separate nomination. In fact as a measure of simplicity to manage housing societies by dealing with single person has been designed and that should not be disturbed. Such succession issues are better left to be handled by the family members without dragging the managing committee in to it.
Amendment No 11 is to align the Bye-Law requirement to Rule No 25(3)(i) reading as “Where a member of a society has not made any nomination, the society shall on the member’s death, by a public notice exhibited at the office of the society, invite claims or objections for the proposed transfer of the share or interest of the deceased within the time specified in the notice.” Publishing Notice in the news paper is an avoidable formality built in the Bye-Laws and is also an expensive mode of finding out successors.