By I C Naik
When the managing committees of housing societies in Maharashtra are still struggling to grasp the true legislative intent behind the membership called “Associate Member” one more term concerning the society membership namely “Active Member” has emerged with the State enactment namely the Maharashtra Cooperative Societies (Amendment) Act 2013.
Article 243ZO (2) inserted by the Constitution (97th Amendment) Act 2011 reads: “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” This created a need for the Societies Amendment Act 2013 to coin two new terms “Active Member” and Non-“Active Member.”
In keeping with the new found impetus to “the members’ democracy” new definition in Sub-Clause (a-1) in Section 2(19) of the M C S Act 1960 empowers the members to specify their own obligations as “active members” by amending their Bye-Laws thus: “Active member” means a member 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;”
Management of every housing society is facing a predicament of fixing the above conditions in the registered Bye-Laws. If it was not to concern itself for the Sub-Section 2 in the substituted Section 26 of the Act, this would have been fixed already. As a matter of fact Section 26(2) has baffled even the drafting team in the office of Commissioner and Registrar of Cooperative Societies, Pune who released a draft of Model Bye-laws 2013 at its web-site. Clause (xxiv) in Bye-laws 3 in Sub-Clause (a) proposes 3 conditions which an Active member must satisfy namely (i) he must have a flat in his name, (ii) he must attend at least 1 general body meeting and (iii) he must pay maintenance of one year out of 5 consecutive years. If he fails in any of the three, he is to be classified as Non-Active member as proposed under bye law number 22(B)(2). The drafters of Model Bye-Laws 2013, reiterated the contents of Clause (xxiv)(1) of Bye-Law No 3 in Sub-Clause (1) of Bye-Law No 22(B) but made an error of specifying payment of 3 years’ maintenance in place of 1 year. So which is right?
Utilization of Services and Products:
Now every existing Society is required to amend the registered Bye-Laws to specify a minimum level of utilization of services or buying of products of the society by every Active member. Each class of cooperative society has its own specific product portfolio and/or range of services and as such it is logical that the members specify a mandatory level of utilization in the Bye-Laws. Attaining that level once in 5 years allow him to be on the list of Active members and failure to attain that for ten years means a fatal blow to membership- expulsion by members. He is not a co-operator.
Participating in management
The general body meetings have a common agenda as specified under Section 75 of the Act and as such “providing minimum requirement of attending meetings by the members” as per Article 243Z)(2) (Supra) has been specified in the Act itself, by mandating it as a duty of every member of attending least 1 of the general body meetings in 5 consecutive years.
Consequences of a member failing in performing statutory duties
Chapter III of the Act “ MEMBERS AND THEIR RIGHTS AND LIABILITIES: has Section 26 – titled as “No rights of membership to be exercised till due payments are made” wherein a new Sub-Section (2) has been inserted by the Societies Amendment Act 2013, stating “It shall be the duty of every member of a society,— (as stated in two Sub-Clauses (a) and (b) subject to seven Provisos thereto);
(a)To attend at least one general body meeting within a consecutive period of five years :
(b) To utilize minimum level of services at least once in a period of five consecutive years as specified in the by-laws of the society:
7 Provisos lay down:
1.The general body meeting can condone the lapse in adherence to (a).
2.Classifying a member as Non-active if
(i)he does not attend at least one meeting of the general body in 5 years (and that lapse is not condoned as aforesaid) and
(ii)he does not utilize a minimum level of services/products (as specified in the by-laws) at least once in a period of five consecutive years.
3.The Society to send a communication to every Non-active member in prescribed form before 30th April every year
4.Such Non-active member does not attend one general body meeting and utilize services/products as specified in Bye-Laws during next consecutive 5 years the members can sxpel such member from membership.
5.Such Non Active member is entitled to be reclassified as Active member if he attends one general body meeting and utilize services/products as specified in Bye-Laws during next consecutive 5 years after the date of communication as per 3 above.
6.Dissatisfied about classification a member can appeal to the Registrar in 60 days.
7.In any election held for the first time after 15 2 2014 (date of coming in to force of the Societies Amendment Act 2013) no member shall be disqualified from voting under this Section.
DEMOCRATIC MEMBER CONTROL
As per Supreme Court (a-1) of clause 19 of Section 2, Members are to specify by amending the registered Bye-Laws, a minimum level of participation in both areas i.e. attending members’ meetings as well as in utilizing services / products as their collective wisdom guide them.
1.Members’ meetings are of two types : Mandatory annual general meeting once every year before 30/09 and the need based Special general body meeting as many as they need. In a period of 5 years one can reasonably expect at least 10 meetings. As the co-operative principles are in sharper focus, principle 2 namely “Co-operatives are democratic organisations controlled by their members, who actively participate in setting their policies and making decisions.” pre-supposes a much larger participation of members in the general body meetings. Attending just 1 meeting in 5 years is a lip service to this principle. So well-meaning committees should propose their members to accept an obligation of participation of at least up to 50 per cent in number of the general body meetings.
Every Active member must participate in half the numbers of the general body meetings every 5 years. it should be incorporated in Bye-Laws as a mandatory duty of every member and a default is liable to penalties under the Bye-Laws as may be fixed in the general body meeting in advance.As section 26(2) provides for an extreme consequence of expulsion of members not attending even one general body meeting in 5 years, Bye-Laws should accept the same norm and exhort much higher participation under a threat of penalties – once again a democratic decision. Members failing in attending up to half number of the general body meetings in 5 years may be penalized by the general body meeting, at pre-decided rate for shortfall of every one meeting and in case of a member not attending a single of the general body meeting in 10 consecutive years may be made liable to expulsion from membership.
2.For housing societies utilization of service by every member is inescapable and what is critical is timely payment of the maintenance charges. It is equally an economic success factor. The managing committee can propose to the general body meeting to fix 12 months’ outstanding once in 5 years as an outer tolerable limit. And repeating the same in another 5 year period attracts expulsion.
LEGISLATIVE INTENT
If a member of cooperative society does not attend even one general body meeting in 10 years is not a cooperator and he has no right to reap the benefits of Cooperative Movement. Members have to hold committee accountable to themselves and if they do not attend the general body meetings the Committees are bound to go astray. Second co-operative principles “Men and women serving as elected representatives are accountable to the membership.” goes to toss.
Cooperative society is a vehicle to run an economic enterprise for common men and women bestowing ownership with a meager contribution to its equity capital. its success is determined by the volume of economic activities it performs. More the members participate in it, larger is the common benefit. So fixing the volume of participation in economic activities is left for members of every class of societies.
Coming to housing societies, its services are not commercial services to members offered at a price with a profit element. Its sharing actual expenses of securing services from external sources like water, electricity, house keeping, security etc. It’s maintenance charge is a product of a scheme of pulling resources contributed by members to a common kitty to pay for common services necessarily drawn by members and not by choice. Housing society management always expect predetermined flow of money from members as maintenance charges for securing amenities and services and maintaining long term term funds. A housing society should therefore classify a member as active as long as he controls his outstanding within demands of 12 months’ charges and does not exceed the 12 months even once in 5 years. If he exceeds once in 19 years he is liable to expulsion.
