By I C Naik
The state cooperative election authority (S C E A) has ruled that a housing society’s associate members can be part of the managing committee leading to a state of confusion which at best treats bye-laws with absolute disdain.
The Reports also misquotes Section 2 (19) (b) of the Maharashtra Cooperative Societies Act, 1960, and informs the otherwise extremely ill-informed housing societies that “an associate member can vote and participate in elections but cannot become an office-bearer of the society where his name appears as an associate member in the society register.” This section does not go beyond distinguishing an Associate member from a full-fledged member. Iniate members. fact the M C S Act 1960 has refrained from specifying rights of Associate.
www.indiancooperative.com has covered Associate Membership far more than necessary. For explaining the current contrary law on Associate member in a cooperative society this report quotes a superseded Rule 56M of the Maharashtra Cooperative Societies Rules, 1961, (the Maharashtra Co-operative Societies (1st Amendment)Rules, 2014 with effect from 30th August 2014 vide its Rule 41. Rules 56 A to 56 Z and 56 A-1 to 56 A-35 of the principal Rules, have been deleted and the Maharashtra Co-operative Societies Election to Committee Rules, 2014 with effect from 14 9 2014 superseded all cooperative election rules in force on that date).
Shrikrushna Wadekar, assistant state cooperative election commissioner (Honorable member of S C E A) has compounded the confusion when he reportedly said 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,“ Yet another confusion lies in this statement in the report namely “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,“ as reportedly told by no less than Mr. Ramesh Prabhu, President, Affordable Housing Welfare Organization of India. These statements are not supported by legal provisions.
It is not a secret that even most committee members are wary of referring to their registered Bye-Laws as much as they ought to in due discharge of their responsibilities, for it is their duty to show utmost respect to the contractual obligations coined in to Bye-Laws. More than once the Supreme Court has clarified that “The bye-laws of a cooperative society setting out the terms of membership to it, is a contract entered into by a person when he seeks to become a member of that society. Even the formation of the society is based on a contract.” Zoroastrian Co-Operative Housing Society Limited And Another V. District Registrar Co-Operative Societies (Urban) & Ors [2005]Rd-Sc 253 (15 April 2005). Let us hope management of housing societies change their approach and try imbibing values an the co-operative principles. In a situation wherein the authorities themselves have a scant respect for the Bye-Laws or cooperative societies what can be expected of the housing societies and their managing committees.
In order to prevent the most likely spate of election petitions (on the grounds proposed to be discussed herein after) to the Registrar by unsuccessful original members where there are some successful Associate members, it is respectfully reiterated that notwithstanding the authoritative clarifications, the Associate members of housing societies under today’s legal scenario do not have any right except a right to vote in the general body meeting that too if the original member was not to remain present.
Let is prove this with the help of relevant provisions of Cooperative Societies Law beyond any doubts.
Voting right to members of cooperative societies is conferred under Section 27(1) of the M C S Act 1960 and its sub section 2 is very candid on the issue on hand QUOTE: (2) Where a share of a society is held jointly by more than one person, the person whose name stands first in the share certificate, if present, shall have the right to vote. But in his absence the person whose name stands second, and in the absence of both, the person whose name stands next, and likewise, in the absence of the preceding persons the person whose name is next on the share certificate, who is present and who is not a minor, shall have the right to vote. UNQUOTE
A very pertinent statutory provision under Section 24(2) of the M C S Act 1960 as reproduced little later has been cruelly ignored by all concerned including the Commissioner and Registrar of Cooperative Societies in the periodical exercise of recommending Model Bye-Laws for cooperative societies including for housing societies. Housing societies have seen so far more than 4 Models i.e. the long lasting 1984 Model then 2001 and 2009 and now the new born (1st November 2014) Model 2014.
Bye-Law No 25 of Model 2014 reads; “No Associate Member shall have any rights or privileges of an active Member except as provided under Section 27(2) of the Act and he fulfills the conditions of bye-law 22(a)”
[ All earlier Models do have an identical Bye-laws )
Bye-Law No 22 (a) reads: “ A Member shall be entitled to exercise such rights as provided in the Act, Rules and Bye-laws. Provided that no Member shall exercise the rights of Member of a Society, until he has made such payment to the Society in respect of Membership, or acquired such interest in the Society.
The critical Section 24(2) of the M C S Act 1960 reads : “A nominal member shall ordinarily not have any of the privileges and rights of a member, but such a member, or an associate member, may, subject to the provisions of sub-section (8) of section 27, have such privileges and rights and be subject to such liabilities of a member, as may be specified in the by-laws of the society.”
Section 27 (8) reads “No nominal member shall have the right to vote and no such member shall be eligible to be a member of a committee or for appointment as a representative of the society on any other society”. About Associate member it is silent.
The Authorities and committees being indifferent to the role of Bye-Laws in housing societies are at a risk of a tremendous embarrassment if and when at a later date a Chairman of a housing society being an Associate member is unseated in an election petition filed by a defeated original member as afore said who will win get a favourable decision for grounds are robust.
1.Bye-Law No 25 is a virtual embargo to the Associate member to exercising any right of an original member except the casting of a vote in the general body meeting in case the original member was absent, As such no Associate member could have participated in election to the managing committee in the first instance. The election is liable to be set aside on that ground.
2.The affected Associate member may take recourse to Bye-Law No 117 which provides circumstances under which a person is disqualified to be eligible for being elected as a Member of the Committee or co-opted on it. The Condition at Sub-Clause (d) thereof, reading as under “In case of an Associate Member, non-submission of the no-objection certificate and undertaking, as prescribed under these bye-laws, by the Member “ has a force if Bye-Law No 25 has not clamped a ban on the Associate exercising any right except that pf voting in the general body meeting in place of an absentee original member. This Sub-Clause will not be any assistance to prove his right to contest election to the managing committee.
3.Section 24(2) having left it to the members of housing societies to contractually agree amongst themselves as to what rights the Associate Member should enjoy by specifying them in the Bye-Laws and Bye-laws have conferred no other right except that the casting of a vote in the general body meeting under Bye-Law No 25 the Associate member occupying a seat on the managing committee is doing so in breach of the contract entered in to by members by virtue of a statutory provision in Section 24(2) of the M C S Act 1960. As a result the Proviso 2 to Rule 20 of the Maharashtra Co-operative Societies Election to Committee Rules, 2014 permitting Associate member to file nomination is of having no help as it has the effect of negating the statutory right bestowed on the members of the Society to spell out the rights of Associate members in the registered Bye-Laws.
4.The clarification as reportedly provided by the S C E A therefore does not have a backing of law beyond any doubt and as such while disposing off the election petition such clarification will not be of any help.
www.indiancooperative.com in keeping with its commitment to maintain growth of Cooperative Movement , has piece of advice under the threatening circumstances. Those housing societies facing dearth of original members willing to shoulder the responsibilities of management of their affairs and are willing to repose trust in the Associate members (who may not be even co-owners of the flats) to shoulder responsibilities are advised to amend the Bye-Law No 25 by adding a proviso there to which may read as under:
Provided that an Associate member who submits to the society, the no-objection certificate and the undertaking, as prescribed under these bye-laws duly executed by the original member shall be eligible for being elected as Members of the Committee or co-opted on it.
Last but not the least important matter to touch upon; it is respectfully submitted that to confer a status to a person paying Rupees 100 only as entrance fees to become an Associate member a status of a “Deemed Owner of a Flat Property” which is actually a very serious legal matter governed by a central law and not in the least by the M C S Act 1960. It is advisable to avoid reference to ownership of the property unless a person is decisively an owner as per statutory records of the concerned Department of the State. A hint to this effect can also be seen in the 2014 Model Bye-Laws in its number 56 QUOTE: “However the associate member shall not cease to be Associate Member when the First Member ceases to be the member of the society if Associate Member holds title and interest in the property jointly with the member.” S C E A reportedly bringing in a new concept of a “Deemed Co-owner” may lead to further complications to the otherwise confusing terminology namely the Associate Member. As a matter of fact in another State Communication issued under Section 79A of the M C S Act 1960 as posted on the website [ Circular No. SAGRUYO-2011/PRA.KRA. 360/14-SA, Co operation, Marketing and Textile Department, Date 15th October, 2011] on Page 16 thereof it is vividly clarified QUOTE: “A person, who became an Associate member by paying only admission fee, shall not get any rights in voting or election behalf the original member.” UNQUOTE
So it is an earnest appeal that the Authorities please exercise caution in giving clarifications in matters of housing societies as the prices of flats in Mumbai are attaining sky rocketing heights and is already an extremely precious possession of a common man.
