Query from Kailash Kapoor

Our society has been collecting welfare fund from members in his monthly maintenance bill. I want to know whether it is a statutory requirement. Your expert opinion is requested.

I C Naik

Welfare fund is to be set up by housing societies   as voluntary action as provided under one of its bye-laws. For ready reference it is extracted below [Model 2014} {Check with the Honorary Secretary if your society bye-laws has a similar clause.

148.

1. After providing for the interest upon any loans and deposits and after making such other deductions as required under Section 65(1) and 66 of the MCS Act 1960 and Rule 49A of MCS Rules 1961, twenty five percent (25%) of the net profit of all the business carried on by or on account of the Society, shall be placed at the credit of the Reserve Fund of the Society.
2. The remaining seventy five percent (75%) of the net profit of the Society shall be utilised as provided under Rule 50, 51, 52, 53 of MCS Rule 1961.
3. To pay dividend not exceeding 15 percent per annum, upon the paid up share capital at such rate as the Committee may recommend and the Annual General Body Meeting may approve. The dividend on shares shall be paid to the registered holders of such shares according to the books of the Society as on the last day of the preceding co-operative year.
4. To pay honorarium to office-bearers of the Society not exceeding fifteen percent (15%) of the net surplus to reward them for the sacrifice of their valuable time for the working of the Society or as decided by the General Body Meeting

iii. To allocate to a Common Welfare Fund, such part of the profit as the Annual Meeting of the General Body may determine, to be utilised in furtherance of the objects specified in the bye-law No. 5(d)*See extract Below.

1. The balance, if any, shall be carried forward or dealt with in such manner as the Annual General Body Meeting, on the recommendations of the Committee, may determine.

Bye-law No 5 d) To undertake and provide for, on its own account or jointly with a cooperative or Other Institution Social, Cultural or Recreational activities;

Levy of Society Charges is provided at length in bye-laws and the Management Committee as no power to ask for any amount as a part of maintenance contribution.