By I C Naik
My story on the pet subject of Associate Membership of CHS in Maharashtra (4 2 2015) titled “SCEA compounds confusion on AM” was based on the TOI story (Page 4, Mumbai, dt. 2-02-2015). No official content was available. The said report carried views of Mr. Shrikrushna Wadekar (the ASCEC) and CA Ramesh Prabhu, President, AHWO of India to the effect that “with consent of the original owner an associate member can participate in elections” and “a person whose name comes second in the share certificate is deemed co-owner of the flat, and thus can contest and be part of the managing panel” Really it is so simple? Did SCEA agree with? Looks like he does. But is it supported by cooperative societies law.
May be, with a view to removing doubts, the Honorable SCEA has issued an official clarification to TOI Mumbai on 16 2 2015 on the role of “Associate Member” in cooperative society elections. The Housing Times (Mumbai District Co-op Housing Federation) April 2015 edition has published this letter adding head notes purporting to be the essence of the clarification by the SCEA : We publish below the letter dated 16-02-2015 issued by the State Co-op. Election Authority Pune clarifying that” a member even if he claims to be an associate member but has not his name entered in a share certificate after the name of primary member will not be able to vote making the term crystal clear that “Associate must have share in flat property and his joint name with the primary member in share certificate for participating in the election of managing committee. The phrase “Associate must have share in flat property “ is something SCEA has not mentioned at all.
A society member’s role ( same as rights) in the election to committee is two fold (i) casting one vote per each of the membership strength and (ii) to get nominated as a candidate as provided in Rule 20(1) of New Election Rules. reading: “(1) Any member whose name appears in the final list of voters may be nominated as the candidate for the election to fill a seat, if he is qualified to be chosen under the provision of the Act, rules and the bye-laws of concerned society:” If elected, he can become an office bearer including the Chairman of the society.
Before going further let’s have a re-cap of some fundamentals of CHS management.
Statutorily, an authority to manage a registered society vests in its committee as provided U/S 73: “ (1) The management of every society shall vest in a committee, constituted in accordance with this Act, the rules and by-laws,…..”In other words the committee constituted in violation of provisions of any one or more of these three does not have a lawful authority to manage its society. Committee must ensure that its constitution conforms to the applicable provisions of these three.
The SCEA has at Para 3 reproduced 2nd Proviso to Rule 20(1). The text of the Rule 20(1) has not been reproduced. In the Para immediately following the SCEA provides his interpretation of the Proviso: “Aforesaid provision in the election rules promulgated on 11th September 2014 provides for nomination of an associate member in election of co-operative housing and premises society in the same manner in which the provision U/S 27 of MCS Act 1960 provides for voting right of the Associate Member.
Mere absence of primary member allows the Associate to exercise member’s voting right U/S 27(2). In reaching conclusion that Associate can contest election in the absence of primary member as aforesaid, the SCEA has relied in isolation on proviso alone. Law of interpreting a Proviso has been laid down in many cases by the Supreme Court of India. Justice Krishnaiyer, V.R. in AIR 1758, 1976 SCR (1) 277] in very few words clarified : “the golden rule is to read the whole section, inclusive of the proviso, in such manner that they mutually throw light on each other and result in a harmonious construction.”
When we ardently follow Justice Krishnaiyer, V.R. the Sub-Rule (1) of Rule 20 (after incorporating the Proviso therein) it does provide a crystal clear and quite a harmonious construction : ”Any member whose name appears in the final list of voters or in his absence, the concerned Associate member, may be nominated as the candidate for the election to fill a seat, if the member or the Associate Member, as the case may be, if qualified to be chosen under the provision of the Act, rules and the bye-laws of concerned society. “ Thus meer absence of original member may admittedly enable member to cast a vote as so allowed U/S 27(2) but that does not by itself confer a right to be nominated as candidate for election under the Proviso. The essential prerequisite for nomination is that he must necessarily be qualified to be chosen under the provision of the Act, rules and the bye-laws of concerned society as the main enactment viz:- the Rule 20(1) so requires. Proviso cannot override Rule 20(1). “A proviso cannot be torn apart from the main enactment nor can it be used to qualify and set at naught, the object of the main enactment.” [ Sundaram Pillai versus Patte Birman (1985) 1 SCC 591
There is yet another rationale we can look at to prove beyond doubt that the registered bye-laws must unequivocally confer a right to the Associate Member to join the managing committee. Section 24(2) of the MCS Act 1960 allows the members of the society to decide, through a provision in the registered bye-laws, as to what rights of primary member can be conferred on the Associate. Model Bye-Law No 25 (Model of 2001,2009 and 2014 and 27 of 1984 Model) restrict Associate’s right to that conferred U/S Section 27(2) i.e. casting one vote where Primary member is absent.
Not ready to give in, as to how the Highest Co-op Election Authority can interpret the law so erroneously, persistent Associate member may argue: the SCEA has at Para 3 of his letter brought out the fact that the Proviso to Rule 20(1) is the same as what Section 27(2) provides for member’s right to vote, so it carries the same force as Section 27(2) i.e. in the absence of the original member Associate can be nominated to contest the committee’s election: sounds very tempting. Hold it. A mere resemblance to the text of Section 27(2) lends no credibility to the aforesaid Proviso brought in to play in isolation of the substantive conditions in Rule 20(1). The SC order authored by Justice Krishnaiyer, V.R directs to read the main enactment and proviso to gather to get a harmonious construction and we have already done that and proved that under all the Model Bye-Laws Associate has only one right of voting in the absence of primary member.
And if Associate does not relent, here is a rejoinder. As per Bye-Law No 118 there are at least 4 disqualifying clauses and they apply to Associate as well. That scrutiny is possible if Rule 20(1) is brought in to play along with the Proviso. The SCEA having relied on Proviso alone it mis-led every one. An Associate who have become so by paying just an entrance fees is equated with a deemed co-owner!!! In this manner a totally disqualified Associate member will make it to committee and grab the Chairmanship too.
And finally, if the Proviso is allowed to play its devil, in isolation of Rule 20(1) it has the effect of robbing the members of their democratic right to decide through the Bye-Law provision, whether any Associate member should be allowed to join the Committee and run the society becoming its chairman? A right conferred to a society under Section 24(2) of the MCS Act 1960 enacted by legislature cannot be allowed to be hijacked under the Proviso to any Rule which reads the way Section 27(2) reads. In fact Section 24(2) upholds the supremacy of the members’ democratic right to be exercised through Bye-Laws and no Rule much less the Proviso, can take that away.
First and foremost the rank and file in Authority should start accepting one thing that now it’s a members’ democracy that is supposed to govern cooperative societies more than Rules and even the Legislative enactment. The reason is that it is the Constitutional imperative as held by the Supreme Court of India in a recent Order dated 19-03-2015 (2015) 42 SCD 494 SC. At Para 53 of the order the Apex Court lays down : The cooperative society registered under the Central or the State Act is bound to function as a democratic institution and conduct its affairs based on democratic principles. Democratic functioning on democratic principles is to be reflected in the respective Acts or Rules or Bye-laws both on the principle and procedure.
