The Bye-Laws of a cooperative society is a document registered in the office of the Registrar of co-operative societies being a public authority under the M C S Act 1960. Nevertheless such registered Bye-Laws comprise private contracts inter se the members of the concerned cooperative society.
The Registrar as a public custodian of interest of every cooperative society has been empowered to direct a cooperative society to amend Bye-Laws. Sub-Section of Section 14 of the M C S Act 1960 reads as under;
QUOTE: If it appears to the Registrar that an amendment of the bye-laws of a society is necessary or desirable in the interest of such society, or any by-laws of the society are inconsistent with the provisions of this Act or rules and that amendment is necessary in such by-laws, he may call upon the society, in the manner prescribed, to make the amendment within such time as he may specify.
UNQUOTE
In this Part 4 of the preview of the Model Bye-laws 2014 of cooperative housing societies in Maharashtra we look at Bye-Laws which are just not in the interest of housing societies but are in fact prejudicial.
1.Definition of active member and overdue outstanding”
a) Though undemocratic to push members in to taking interest in cooperative management as by definition the cooperative society is an organization formed voluntary by its members, in the Constitution ( 97th Amendment ) Act 2011 the Parliament has expressed the desire that the state legislatures encourage members to take interest in Cooperative Movement by prescribing a minimum statutory participation level in management as well as in economic activities of the cooperative societies of which they are members. QUOTE: 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 and utilizing the minimum level of services as may be provided in such law. UNQUOTE
b) Taking a call of Parliament as aforesaid, the Legislature of the State of Maharashtra has made a further sub-division of membership of a cooperative society in to “Active Member” and ‘Non-Active Member” “(a-1) New Sub-Clause (a1) in Clause 19 of Section 2 as inserted by the Maharashtra Cooperative Societies (Amendment) Act 2013 defines that “active member” means one who participates in the affairs of the society and utilizes the minimum level of services or products of that society as may be specified in the by-laws;”;
c) So the model Bye-Laws 2014 in new clause (xxiv)(a) of Bye-Law No 3 defines “Active Member”:
i.One who has purchased and owns a Flat / Unit in the Society.
ii.One who attends at least one General Body Meeting of the Society in the previous five consecutive years.
Provided that nothing in this clause shall apply to the members whose absence has been condoned by the General Body Meeting of the Society.
iii. Who has paid the Society Maintenance Service and other charges at least once in previous consecutive five years.
d) No housing society can attain its object“ to provide its members common amenities and services” (clause 16 of Section 2 of the M C S Act 1960 ) where its active members’ minimum obligation is to pay “the Society Maintenance Service and other charges at least once in previous consecutive five years.” Who pays for the rest of the four years’ costs of amenities and services? Did the C R C & S give any thought to a solution of large outstanding?
2.Ban on voluntary donations and unjust Ceiling on Transfer Premium:
a) Bye-Law No 12(A)(e) contains an embargo on Voluntary Donations (Not so under registered Bye-Laws per 1984 Model). There is no official ban on voluntary donations by any order of the State Government either under mandatory order issued Section 79A or in any other declared Policy of the State Government under Section 4 of the M C S Act 1960. Then how come the C R C & S thinks about such embargo? Let the member take a call in democratic manner.
b) There is a ceiling on Premium chargeable officially on transfer of membership and its rights and share in capital/property of housing societies of Rupees 25000 fixed by the C R C & S (The circular no. Housing/ gala /transfer/fee 89 dt.27-11-1989 of Commissioner, Co-operation and Registrar, Co-operative Societies, Maharashtra State) This circular got a statutory character vide circular (Government of Maharashtra No. SAGRUYO-2001/PRA.KRA.188/14-Sub-Article Co-operation and Textile Department. Mantralaya, Mumbai-32 Dt. 9th August, 2009.) issued by exercising the powers conferred to the state Government under Section 79 A of the M C S Act 1960.
c) As is clear this ceiling of Rupees 25000 was fixed way back in the year 1989, which was arbitrary in any case was reconfirmed in 2009 (i.e. after 20 years). If it is recalibrated based on the official Index on Capital Gains Tax declared the Government of India under Income tax Act, every year this Ceiling of Rs 25,000 will reach a level of Rupees 142,000/- ( 1988-89 Index 150 and 2013-14 Index 852). Why this obvious prejudicial government policies , only to encourage ways and means of bypassing and corrupting people’s intentions?
3.NOC on sub-let flats
a) Revised Bye-Law No 43(b) QUOTE: No permission of the society is required to sub-let the flat / shops, however the intimation needs to be given to the society 8 days before such sub-letting. UNQUOTE
b) State Policy about Housing societies was supposed to be afford citizens ownership of their dwelling units. Therefore a non-member occupying a flat is not so favoured and resistance was built in to the system. It is considered a serious social necessity/issue, that the Police Authorities have instructed housing societies in Mumbai to follow certain safety Rules including Police verification of licensees/occupiers in place of the members of housing societies.
c) As such Existing Bye-Laws recognize this and only after satisfying the Committee of a supervening impossibility of owner occupying a flat tested as per following 4 situations.
i.Where the member is required to go out of the area of operation of the society for a long duration on account of exigencies of service or business or on account of the prolonged illness
ii.Where the member is unable to occupy the flat owing to absence of facilities for education of the children or is unable to secure admission to the school in the locality for them.
iii. Where his employer, with a view to ensure efficient discharge of duties, requires him to stay in the accommodation allotted to him by his employer.
iv.Where a member satisfies the Committee about his inability to occupy or continue to occupy the flat for any other genuine reasons;
d) NOC : After housing societies litigating before the High Court, the Government finalized a circular on charging 10% Service charges as NOC from member sub-letting the flat. This Charge of NOC is totally dispensed with in Bye-laws. Housing societies adopting these Bye-Laws will lose the revenue of NOC permissible under the Government Order ( No 43 of this Model
e) Two critical pre-caution against litigating sub-lattes are also missing:
i.While permitting sub-letting, giving on leave and license or care-taker basis flat or part thereof or permitting parting with its possession in any other manner, the Committee shall restrict the period thereof to 11 months, which may, on the request of the member be extended for similar period or part thereof from time to time
ii.The Member has to give an undertaking that he shall, by joining the society as a party to the proceedings, initiate necessary legal proceedings against the sub-lettee, licensee, care-taker or possessor, on his failure to get vacant possession of the flat or part thereof on expiry of the period of sub-letting, giving on leave and licence or care-taker basis the flat or part thereof or parting with its possession in any other manner and meet the cost.
4.REMEDIAL MEASURES
a.Active Member: It is necessary that Bye-Laws define member’s participation criteria to retain status of an Active Member. Attending the general body meeting may be kept as laid down in the Act (Section 24(2)(a) because failure to meet this condition over 19 consecutive years will lead to expulsion from Membership. But the second condition of participation in economic activities may be defined in Bye-Laws with an object to control the overdue outstanding as that also involves participation of member in economic activities of housing society.
b.Donation and Premium: If housing societies retain Model Bye-Laws 1984 as their Bye-Laws ban on voluntary donation will not apply. Premium will of course attract ceiling of 25000.
c.NOC and Sub-letting: Retain Bye-Laws as per the registered Bye-Laws.