I am a Chairman of a Co-Operative Housing Society in Mumbai. Our Society is fighting a legal case against the builder to get conveyance. For this Purpose we have hired a lawyer to assist us in the process.
We have 20 flats of 2 BHK and 20 flats of 3 BHK in our society. We discussed in the managing committee meeting as to how we should divide/ charge the legal charges of the lawyer to our members. As per the Bye laws the legal charges are to be divided equally flat wise. Some Committee members wanted the legal charges to be billed Sq feet wise ( Area wise ), the reason being that the benefits of the conveyance , whenever it is done will be given area wise and not equally.
We could not reach a final decision. These members insisted on calling a SGM to take the decision.
What I want to know is that if we call a SGM as per the provision of MCS Act 1960, Section 72 , and if the majority members vote in favor of charging Area Wise, can we do the same.
The Argument here is that MCS Act says that the General Body is supreme ( AGM/ SGM ) and a resolution passed by the majority vote has to be accepted by all the members. If necessary to send the copy of the resolution to the Registrar as well for confirmation. Other members say that the provision of the Bye Laws can not be overlooked.
The majority cannot muzzle the voice of the minority just by passing a resolution in a SGM.
Please give us your kind advise and direction in this matter.
I C Naik
Recommendation
1.TWO significant benefits could be imagined. But not necessarily they are assured benefits.
a.Additional F S I can be used to create common facilities by construction of club house or gym, swimming pool etc.
b.Under redevelopment Schemes with increased FSI LARGER FLATS COULD GET HIGHER BENEFITS.
2.What is the correct method approved under Cooperative Societies Law?
a.There are two types of legal expenses. One for conveyance as one time where there will be some stamp duty also. Stamp duty will of course shared prorate the area as it is linked to the area.
b.The others are recovering ones and they form part of service Charges [Bye-Law No 70(xi)]
c.As per Bye-Law 71(a)(vi) Service Charges are to equally divided by the number of flats.
d.This issue was raised before the state government and an order under Section 79A has been issued ny the government. Ref: No .SAGRUYO- 1096/PRA. KRA. 137/14-5 Co-operative & Textile Department, Mantralaya, Mumbai- 400 032 Dt. 29th April, 2000. The order issued under Section 79A are binding to all concerned societies.Relevant portion is reproduced below.
“And in view of the public interest, the government directs under Section 79 (A) of the Maharashtra Co-operative Societies Act, 1960 as follows :
i.The Co-operative Housing Societies should charge the maintenance charges ‘equally to all flats” as earlier under rule no 71 (A) (7) of model bye laws they accepted.
ii.The Above order shall be applicable to all residential flats and commercial galas in all types of registered Co-operative Housing Societies. Similarly these orders will come into force from 26/05/1999 respectively.
iii.Those housing societies have collected maintenance charges from their members as per the government order dt. 26-05-1999, then such societies should return the said maintenance charges to the concerned member or adjusted in the next months monthly charges with the consent of the concerned members.
iv.All the registered co-operative housing societies in the state should make necessary amendments in their bye-laws as above. However, even after not doing this, these orders shall come into force from dt. 26-05-1999 respectively.
3.Is there a case for funding one time legal expenses on a legal fight for obtaining Conveyance of the property?
a.This question is confusing the smaller flat holders. Property under Conveyance proceedings are of two categories. Individual flats and undivided common land.
b.As a first step a one-time legal expense, stamp duty and registration fees all are clubbed.
c.Per sq ft rate is worked out for the entire property i.e. land and carpet area of all the flats.
d.Every member bears in two parts:
e.Per sq ft rate is multiplied by the carpet area of the flat and amount A is arrived at.
f.Amount as per A in respect of all flats is worked out as “Aggregate A’
g.Out of the total outgoing as per b is reduced by the “Aggregate A’ and is divided equally over the flat.
h.An MOU is prepared of above understanding and signed by every member.
i.MOU is adopted under a resolution in general body meeting
