Official sources claim the move may rule out the frequent sale of sites to outsiders by house building societies. Independent sources say the cap on associate members will create a situation in which a large number of ordinary people will miss the bus on housing.
However, in case of cooperative societies already having more than 15 per cent of their total membership as associate members, the excess associate members shall be either made as member, if eligible under the Section 16 or shall be removed from the associate membership within six months from the date of commencement of the Karnataka Co-operative Societies (Amendment)?Act, 2014.”
In Narayan Reddy vs State of Karnataka case, the High Court suggested that in case of HBCS, the membership should be confined only to the employees who may continue as members even after retirement and the societies should be prohibited from enrolling outsiders as members.
In Karnataka, several HBCS flouted these norms and admitted thousands of associate members and made them beneficiaries to the site allotment. For instance, in the Karnataka Telecom Department Employees HBCS there are only 282 registered members but a whopping 18,581 associate members.
There are 4,500 permanent members and 10,168 associate members in the Telecom Department Employees HBCS. Many associate members have been allotted sites and are residing on their purchased properties.