Exclusive Regulations for MAHA-Housing Societies

By I C Naik

Good news for those wanting an exclusive regulatory framework for housing cooperatives. The State Government has initiated a serious dialogue on the subject and the housing activists in Mumbai can expect their wish getting fulfilled much sooner. Needless to point out; please be pro-active in advocating sensible changes in law especially now that there is a Bench mark: the redefined cooperative society[1] by the State enactment[2] post 97CAA[3] it should be easy to orchestrate a radical but pragmatic change in law. A golden chance indeed!!!

The State Governor promulgated the Ordinance on 26^th October this year and set the ball rolling proclaiming certain provisions of the MCS Act 1960 inoperative on and after that date for housing societies registered in the State. It was a nice coincidence that the Hon. Supreme Court ingeniously warned all those who are concerned with Indian cooperative movement namely that[4]

“The cooperative societies having been conferred a constitutional status by the Ninety Seventh Amendment the whole concept of cooperatives has undergone a major change.”

The 97CAA having completed the formative years, cooperative societies hopefully are well set on a clear path to reforming their functioning in consonance with the constitutional mandates very well elaborated by the Apex Court[5]

“The amendment providing constitutional status to the societies has brought out radical changes in the concept of cooperative societies. Democratic functioning and autonomy have now become the core constitutional values of a cooperative society. Such societies are to be registered only if they are founded on cooperative principles of democracy, equality, equity and solidarity.

The Apex Court in this judgment (supra) has sternly exhorted the law makers candidly at paragraph 12 of the order that:

” Articles 43B[6] and 243ZT[7] are mandates to all the States and the competent authorities to structure cooperative societies as conceived in the Constitution of India, if not already there. Therefore, we have to see whether the Act, Rules or Bye-laws contain any provision for democratic functioning.

At Para 15 of the order[8] the Apex Court reemphasizes on imperative of Constitutional compulsions:

“Once the cooperative society is conferred a constitutional status, it should rise to the constitutional aspirations as a democratic institution. So, it is for the respective legislative bodies to ensure that there is democratic functioning. When the Constitution is eloquent, the laws made there under cannot be silent. If the statute is silent or imprecise on the requirements under the Constitution, it is for the court to read the constitutional mandate in to the provisions concerned and declare it accordingly.”

This background should suffice to drive the activists to seriously ponder over the expectations from the law makers in the reformed [or aligned to 97CAA mandates] “cooperative housing society’s law”. In consonance with the Constitutional aspiration of cooperative societies to function as “democratically controlled enterprises adhering to the co-operative principles and values ;the reforming  of the law should itself  be a process conforming to democratic participation and cooperators’ intellectual involvement followed by free and frank thought sharing. The role of the government Authorities especially the Registrar’s regime should be minimal as a facilitator in consonance with the Policy Statement[9] as per National Policy[10] on cooperatives. The October Ordinance miserably fails to generate such confidence level. For example, Section 73AAA(1) inserted by post 97CAA Amendment Act lets every housing society  to fix the strength of the Management Committee by specifying number in the registered bye-laws, subject to ceiling on reserved seats and membership by cooption. Ordinance empowers the Registrar to fix the strength.

“Chapter XIIIB Cooperative Housing Societies “has been inserted in the M C S Act 1960 vide ordinance with effect from 29th October 2018. Areas needing suitable regulations were identified and listed in this chapter as under:

1. Members and their rights
2. Management of societies
3. Audit
4. Enquiry and inspection
5. Settlement of disputes
6. Liquidation
7. Elections of societies
8. Recovery of claims, etc.

National Policy 2002 has identified following areas for legislation leaving the rest to be fixed by cooperative societies.

1. Conduct of timely elections
2. Audit of the cooperative societies
3. Measures to safeguard the interest of the members and other stake holders in the cooperatives.

Prima-facie it appears that the above list of 8 areas needs to be pruned in line with National Policy 2002. More appropriate is that the Activists demand that the HOUSING DEPARTMENT of the Government of Maharashtra [Madam Cama Marg, Hutatma Rajguru Chowk, Mantralaya, Mumbai 400 032,] publishes an Intention paper  indicating areas which Notional Policy on Cooperatives – 2002 has specified for the legislative domain of the State. Suggestions should be invited from public and housing federations on their concerns in terms of various alerts issued by the Apex Court as covered herein at length in the case of Chairman Vipul Chaudhary ‘s dismissal by no confidence motion: supra.

[1] “society” means a co-operative society registered, or deemed to be registered, under this Act which is an autonomous association of persons, united voluntarily to meet their common needs and aspirations through a jointly owned and democratically controlled enterprise and adhering to the co-operative principles and values” Section 2 (27) of the MCS Act 1960 as substituted by…

[2] …the Maharashtra Cooperative Societies (Amendment) Act 2011 [post 97CAA Amendment Act]

[3] 97AA, [the Constitution (97^th Amendment) Act 2011]

[4] Chairman Vipul Chaudhary ‘s dismissal by no confidence motion upheld by the Supreme Court of India on March 19, 2015 [(2015) 42 SCD 494]

[5] Chairman Vipul Chaudhary ‘s dismissal by no confidence motion: supra

[6] Article 43B. “The State shall endeavour to promote voluntary formation, autonomous functioning,  democratic control and professional management of co-operative societies”

[7] 243ZT. Notwithstanding anything in this Part, any provision of any law relating to co-operative societies in force in a State immediately before the commencement of the Constitution (Ninety-seventh Amendment) Act, 2011, which is inconsistent with the provisions of this Part, shall continue to be in force until amended or repealed by a competent Legislature or other competent authority or until the expiration of one year from such commencement, whichever is less.’.

[8] Chairman Vipul Chaudhary ‘s dismissal by no confidence motion: supra

[9] 7(iv) “the regulatory role of the Government will be mainly limited to the conduct of timely elections, audit of the cooperative societies, and measures to safeguard the interest of the members and other stake holders in the cooperatives. There shall, however, be no interference in the management and working of the cooperatives. The Government recognizes the apolitical nature of cooperatives;”

[10]“The cooperative movement in India started at the beginning of the 20th century. Though the movements were also based on some of the values and principles stated above,(*) it appears that the cooperatives in India did not have effective autonomy, democratic functioning and professional management. The National Policy on Cooperatives announced by the Department of Agriculture and Cooperation, Ministry of Agriculture, Government of India adopted in March, 2002, is wholly based on the definition, values and principles stated above. 97th Amendment to the Constitution of India, in fact, gave a constitutional frame to this policy.” Noted by the Apex Court in the case ofChairman Vipul Chaudhary ‘s dismissal by no confidence motion: supra

(*) 7 Cooperative Principles and Values reproduced by the bench in Paragraph 6 and 7 of the Order of the Apex Court(supra).