Sunil Jalan
I am an associate member in a cooperative society and my name is also entered in the share certificate as an associate member. I am associate member of the society from last two year few days back I received a letter from the Secretary of the society stating that I have cease to be associate member, as such you are not a member of the society. Now you can not have any right to represent as a member of the society and had attached a letter dated 16.0215 issued by State Co-op. Election Authority Pune.
I humbly request you to kindly clear the rights of an associate member when his name is entered in the share certificate.
I again request you to kindly reply the mail as soon as possible as we have our AGM on 16th July 2015 and I fear that I will not be allowed.
I C Naik
Secret of Confusion on Associate membership compounding
I am thankful to Sunil Jalan for promptly sending me a scanned copy of two page communication of the SCEA dated 16 2 2015.
It is very unfortunate that basic understanding on “Associate Membership” of housing society is in such turmoil. With a view to keep society management uncomplicated dealing with only the 1st member was legalized. Associate membership has been introduced only to be a back-up to be in touch with important matters which are generally on the agenda of general body meetings in the absence of the 1st member. The MCS Act 1960(2)(19)(b) has defined Associate member to be a share holder of the society whose name does not appear on the certificate at number 1 position. Section 24(2) permits members (through making appropriate Bye-Law provision approved by 2/3rd majority) confer on Associate any right of the 1st member. All Model Bye-Laws confer on Associate member a voting right as provided under Section 27(2) i.e. voting in general body meeting if 1st member is absent. Model Bye-Laws also provide for aneligible person to be made Associate member by application by the 1st member and managing committee has to approve and Secretary has to enter his/her name on share certificate. Upon happening of any of these events Associate member ceases to be a member namely death of 1st Member or his resignation or transfer of the flat. Associate story should end here.
If one looks at the letter of the SCEA dated 16 2 2015 carefully it reveals the source of confusion and how the media has misreported the views of SCEA. I had posted rather a long story on 4 2 2015 SCEA compounds confusion on AM. I was (somewhat) mislead by TOI story of 2-02-2015.
The Devil is in the head notes. In 5 lines introducing the letter to a reader, it has been claimed that content of the letter of the SCEA has made it crystal clear that Associate must have share in flat property. The term “share” has two connotations in cooperative societies Act namely “share Certificate” and “share in flat property”. Nowhere in the SCEA letter there is a mention of share in flat property (which means share as a Joint Owner or a Co-owner being a party to the Flat Purchase agreement). It merely refers to share certificate alone.
Incidentally TOI report on 2-02-15 proudly mentioned that “With consent of the original owner (whose name is first in the share certificate), an associate member can participate in elections and join the managing committee, provided his name is on the share certificate,“ said Shrikrushna Wadekar, assistant state cooperative election commissioner.” This is a wrong statement if law is correctly read. The head of SCEA (the former Commissioner and the Registrar of cooperative societies could never make a mistake of this level.
Ramesh Prabhu, president, Affordable Housing Welfare Organization of India went further and reportedly told TOI “The SCEA has clarified that 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,“ The clarification in the letter of 16-02-15 goes nowhere near to what Ramesh Prabhu has reportedly claimed as clarification by SCEA.
1.In Paragraph 1 in the Letter the SCEA merely reproduces definition of Associate Member where noting is mentioned about “share in flat property”
2.In Paragraph 2 in the Letter the SCEA clarifies provision of Section 27(2) of the MCS Act 1960 which is written in very simple language in the Act itself. No mention of “share in flat property”
3.In Paragraph 3 in the Letter the SCEA has reproduced the 2nd Proviso to Rule 20 of new Maharashtra Co-operative Societies (Election to Committee) Rules, 2014. Rule of interpreting a substantive provision of law or a rule, is that the Proviso must be read along with the body to which it is appended and not in isolation. In not doing so the letter has missed out the correct legal position as stipulated in the Act and the Election Rules.
Thrust of the SCEA letter was unless a person’s name appears on share certificate issued by the housing society a person’s claim to be amember of the housing society should not be believed.
The SCEA has not clarified that an Associate can contest election as understood by TOI and Ramesh Prabhu. But in quoting 2nd proviso of Rule 20(1) in isolation there has been a huge miscommunication of legal position.
Rule 20(1) reads “ 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:” Eligibility of a person to contest election is defined in the Bye-Laws and Bye-Law No.27 of Model 1984 and 25 of all subsequent Models limits the right of Associate Member strictly to only one right and that of “voting in general body meeting in the absence of the main member.” Proviso is almost verbatim reproduction of Section 27(2) but the catch is in sub rule 1 of Rule 20 as aforesaid.
As stated at the outset housing society can incorporate a proviso in its Bye-Laws by passing a resolution by 2/3 majority and registering it as amendment to Bye-Laws as permissible under Section 24 of the Act. This is a correct legal position.
Deleting name of Sunil Jalan as Associate member has no support of this letter unless Sunil was claiming Associate Membership with no name on Share Certificate.