Special Story the Maharashtra Co-op.

Housing Society

CA Pankaj Majithia

Settlement of Disputes including Recovery of dues

men veeJeJeleg ~
men veew Yegvekeleg ~
men Jeere kejJeeJenw ~
lespeeqmJe veeJeOeerlecemleg cee efJeef<eeJenw ~
Meeefvle Meeefvle Meeefvle ~~
Being a irm believer in our vedic culture, I have
always considered co-operative movements
having roots from this vedic shloka, which
was taught to us as morning prayer during our
school days which imbibes co-operative spirit in
true sense by praying that Let us together (-saha)
be protected (-na vavatu) and let us together be
nourished (-bhunaktu) by God's blessings. Let
us together join our mental forces in strength
(-veeryam) for the beneit of humanity (-karvaa
vahai). Let our efforts at learning be luminous
(-tejasvi) and filled with joy, and endowed
with the force of purpose (-vadhita mastu).
Let us never (-maa) be poisoned (-vishaa) with
the seeds of hatred for anyone. Let there be
peace and serenity (-shaantih) in all the three
universes.
In recent past also if we try to ind torch bearers
of co-operative movement, without clearly
defining in legal terms, we had Mahatma
Gandhiji, Vinobaji, Jaiprakash Narayanji, Baba
Amteji, Anna Hazareji & each saintly persons
like Pandurang Shashtrys Swadhyay movement
SS-VI-39

where he developed concepts in rural mass

about Yogeshwar Krishi or farm, Yogeshwar
fishing boat etc. Shri Ranchhoddasji Maharaj,
Thakkar Bapa etc., or Osho commune is also
based on co-operation or even basic tenets
of Islam revolves around brotherhood/cooperation. Prophet has once observed: No one
can be believer until & unless he begins to like
for his brother what he likes for himself (Fathul
Bari, 1/73). In simple words if one expects
co-operation from others, he also need to cooperate.
It is said that US shipbuilders take 16 months
time to complete 50,000 DWT Tanker,
Spaniards/Greeks will take about 24 months
whereas Japanese will complete the job in just 8
months, rationale as explained by management
guru William Ouchi states that every activity in
Japan is group/co-operative activity and not a
springboard to individual glory and personal
advertisement".
State of Maharashtra, in fact has proved as
leader in co-operative movement for economic
benefit of Farmers, Artisans, Cobblers,
Weavers and no. of rural & weaker sections
of society by no. of stalwarts leaders like shri
Yashwant Rao Chavanji, Shankar Rao Chavan,
Anna Hazareji etc. in fact Maharashtra is having
highest no. of sugar factories in co-operative
sector.

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Settlement of disputes including Recovery of dues

No. of illustrations of Co-op. Hsg. Society also
took strong foundation in Mumbai like Sika
Nagar SAH KAR Bhutan Jaihind Society, Jain
Society Sion, etc. Concept of co-operative
activities is very rightly explained in Income
-tax Act while covering taxation aspect viz.
Co-operative society is a mutual association in
which the members of the group come together
for the common objectives, make contributions
for achieving that objective and participate in
the surplus arising out of it. It is not necessary
that all the members have to take beneits of the
resultant surplus. It is sufficient even if some
members may contribute and some members
may only take beneits".
Co-operative movement can provide a
dignified living for the many millions who
would otherwise ind it dificult to ight against
conglomerates & will thus not be marginalised.
Today, in no. of organised construction
companies are rather finding it difficult to
compete against co-operative group of friends or
community members & such informal groups in
the spirit of co-operation are observed in plenty
particularly in Kutchies, Rajasthanies, Shetties,
etc.
However do we find co-operative movement
meeting total success as a concept? Is it not
seen & observed as UTOPIAN concept? It is
particularly said with reference to co-operative
housing society is a place where there is
maximum non-cooperation and whenever the
monetary transactions are involved or property
matters are related, disputes are bound to be
there as natural consequences as correctly
said in Gujarati proverb (and in other regional
languages also)
JAR JAMEEN NE JORU
A TRAN KAJIYANA CHHORU
Topic allocated to me is attempted to cover on
the aspects as to
1.

Disputes Co-operative courts/Appeals

2.

Recovery of Dues/Procedure

56

3.

Committee powers

4.

Any alternative remedy for recovery

If any inadvertent encroachment happens in the

topics allocated to other learned writers, it is
unintentional and regretted ab-initio.

Disputes
Disputes can be of any nature, some of which are
enumerated here below:
1.

Non payment of maintenance charges/

share of contribution in Housing/other
co-op. societies under any pretext

2.

Transfer related matter

3.

Leakages between 2 loors/lats

4.

Overall maintenance of Internal Roads/

Street Lights/Common Amenities Use/
Misuse/Entitlements

5.

Managing committee Elections/Office

Bearers/Their
Conduct Fraud/
Embezzlement

6.

Parking space allotment/ reshuffling/

guest-parking

7.

Change of use from Residence to

Commercial

8.

Repairs and illegal construction

9.

Matters related to leave & license

10.

Nomination procedure

11.

Recovery of dues by co-operative societies.

Redressal Process
It is also said that whenever problems are there,
there are bound to be solutions. Some of them
are through mutual discussions or through third
party interventions like arbitration or through
Judiciary.
It has been specifically provided in the new
bye-laws that every application made to the

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Special Story the Maharashtra Co-op. Housing Society

society should be acknowledged by the society.
Managing Committee members live under the
mistaken notion that the General Body is the
supreme body for resolving all grievances.
In order to support co-operative sector,
Government has very wisely provided further
route Registrar/Sub-registrar or through Courts.
It is necessary to know for the member who
may feel the need to approach the Registrar of
co-operative Housing Society. For redressal of
their complaint such as: Charging of compound
interest, not issuing passbook to Members,
not admitting the Purchaser as Member of the
Society, recovery of dues etc.
The Registrar has power under Section 77A of
the Maharashtra Co-operative Societies Act to
appoint Members of Committee, new Committee
or administrator when there is a failure to elect
Members to constitute or whether Committee
does not enter upon the office. Under Section
78 the Registrar has the power of removal of
Committee or Member thereof.
Under Section 79, the Registrar has powers to
enforce performance of obligations. The Member
can approach the Co-operative Court under
Section 91 if there are disputes between Member
and the outgoing / incoming Member. More
powers are vested in the Co-operative Courts.
Even disputes between a Member of the Society
and another Member of the Society, or disputes
between the employees of the Society and the
Society or its Members are governed under
Section 91 of the Co-operative Societies Act.
The jurisdiction of Co-operative Courts
is unlimited and is almost on par with the
jurisdiction of High Court as far as pecuniary
jurisdiction is concerned. If a Member is not
paying the dues then also the Society can
approach the Co-operative Court for recovery
of dues. Election disputes challenging the
Managing Committee of any Co-operative
Society have also been referred to the Cooperative Court.

SS-VI-41

Few of the disputes & their Resolution

mechanisms are discussed here below:
Option available with members to approach for
solving their grievance
Member can approach different authorities for
redress of their complaints.

The Deputy Registrar of Co-operative

Housing Societies (at the concerned Ward
Ofice)

The District Registrar of Co-operative

Housing Societies City - Malhotra House,
6 Floor, Opp. GPO, Fort, Mumbai 400 001
Western suburbs - Ground loor, MHADA
Bldg., Bandra East, Mumbai 400 051
Eastern suburbs - Vardavat mansion, 1st
Flr, Station Rd, Opp. Thane District Co-op.
bank, Thane West 400 601 (Tel: 25331486)

The Mumbai District Co-operative

Housing Federation Ltd., 103, Vikas
Premises, 1 Floor, Dr. NGN Vaidya Marg,
Behind State Bank of India Head Office,
Fort, Mumbai 400 001. Tel: 22660068

The Commissioner and Registrar, Cooperative Housing Societies (Maharashtra

State), Central Building, Station Road,
Pune 411 001. Email: commcoop@
rediffmail.com

The Registrar of Co-operative Societies,

Co-operative Societies Dept., Sakhar
Sankul Bldg., Pune 411 005.

The Chief Secretary of the Co-operatives,

3rd Floor, Mantralaya, Mumbai 400 020

State Minister of Housing & Co-operatives,

7th Floor, Mantralaya, Mumbai 400 020

Option to go to Co-operative Court or Consumer

Courts
Complaint in Co-operative Court can be made
on the matters of:

Repairs, internal repairs, leakages.

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Settlement of disputes including Recovery of dues

Parking

Escalation of construction cost

Unequal water supply

Excess recovery of dues from members

As a consumer of services provided by a

co-operative housing society, members are
covered by the Consumer Protection Act in
matters concerning the business of the society.
Failure to give you necessary documents is a
deiciency in service, and so you may approach
the Consumer Court (engaging a lawyer is
not required) and pray for reliefs i.e. copies of
documents, and compensation for difficulties
suffered by you, but it must be done within the
limitation of time i.e. within 24 months from the
date of grievance arising. Please bear in mind
that these are not for settling personal disputes,
but for housing society business.
Even if you have initiated proceedings in Cooperative Court and Consumer Court, you
may also file a FIR and initiate proceedings
in Criminal Courts, if you have documentary
evidence of nefarious activities such as
misappropriation of funds, forgery of society
records, duplicate share certificates, letting
out the society property for mobile towers,
advertisement hoardings etc., without the
written consent of 75% members, rigged and
manipulated elections, refusal to transfer
membership based on caste, creed, religion,
threat or assaulting members or creating noise
after prescribed deadline hour in the evening or
use of place for immoral activities like running a
brothel/using narcotics in parties, etc. This can
be done without any permission/sanction from
the Registrar of Co-operative Housing Societies,
because it is against individuals, and not against
the society.

from its members towards common facilities

and services enjoyed by its members. It is the
duty of every member to pay dues properly &
on time for ensuring the smooth functioning of
the society. Disputes with the society cannot be
mixed or made a reason for non payment.
It is obligatory to take approval as per
resolution of general body meeting in the regard
of maintenance service and other charges.
Irrespective of the fact whether member is
occupying residential or commercial premises,
maintenance charges should be same, under
rule no 71(A)(7) of model bye laws. The only
difference would be in charges like Property
Tax, Water Charges & Insurance. (Sunanda J.
Rangnekar vs. Rahul Apartment No. 11 CHS Bombay High Court on 10 August 2005.)
If a member is consistently a defaulter in respect
of dues due and payable by him to the society,
Society can file a reference under Section 101
of the Act before the Deputy Registrar of
Co-operative Societies and the other is to ile a
dispute under Section 91 before the Co-operative
Court for recovery of maintenance charges. It is
also possible to file a summary dispute before
the Co-operative Court under Section 77-F of the
Maharashtra Co-operative Societies Rules, 1961.

Procedure for recovery of nonpayments of dues by a member

If a member fails to pay the dues after issue of
the notice for a period exceeding three months
is termed as a defaulter as per the Maharashtra
Co-operative Societies Act, 1960 and as per Byelaws of the society.

Non-payment of maintenance and

other charges

Issue a notice for payment of dues (including up

to 21% interest) to the defaulter, with a warning
therein that on failure to make payment of the
same, an application would be made to the
Assistant Registrar/ Deputy Registrar under
section 101 of MCS Act, 1960 for recovery of the
outstanding dues.

A CHS is never formed for making profits

instead it collects and disburses the contributions

Pass the resolution to recover the dues in the

Managing Committee Meeting.

58

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Special Story the Maharashtra Co-op. Housing Society

Issue a inal notice to the defaulter
Apply to the Assistant Registrar/Deputy
Registrar for the recovery of dues, with
prescribed fees.
Under section 101 of Maharashtra Co-operative
Society Act 1960, on an application made by
a Co-op. Housing Society for recovery of its
dues and on the society concerned furnishing a
statement of account of the dues.
The Registrar would issue a Recovery Certiicate
for the amount due, after making a hearing and
a summary inquiry on the basis of the afidavits
iled by the disputant and the respondent.
On receipt of the Recovery Certificate, the
Recovery Officer shall prepare demand notice
for being sent to the Sales-Oficer for attaching
the movable property of the member concerned.
The Sales Oficer, on receipt of recovery paper
from the Recovery Officer, shall visit the flat
of the member concerned for preparing an
inventory of the movable property and handover
such list to the member concerned and serve the
demand notice on the defaulter member.
If the amount is not paid by the member
concerned immediately on service of the demand
notice, the Sales Oficer will seize the movable
property.
A certiicate granted by the Registrar under subsection (1) or (2) of Section 101 of the Act shall
be final and a conclusive proof of the arrears
stated to be due therein, and the same shall be
recoverable according to the law for the time
being in force for the recovery of land revenue.
It shall be lawful for the Collector and the
Registrar to take precautionary measures
authorised by sections 140 to 144 of the
Bombay Land Revenue Code, 1879 or any law
or provision corresponding thereto for the
time being in force, until the arrears due to the
concerned society, together with interest and any
incidental charges incurred in the recovery of
such arrears, are paid, or security for payment
SS-VI-43

of such arrears is furnished to the satisfaction of

the Registrar.
Thereafter, the Sales Officer will fix the date,
time and place for such auction of the movable
property seized and auction out the same and
pay the sale proceeds thereof to the Society, in
satisfaction of the outstanding dues payable by
the defaulting member to the society.

Additional Measures/Restriction
Section 95 of Maharashtra Co-operative Societies Act, 1960
Attachment before award or orders and
interlocutory orders:- (1) Where a dispute has
been referred to the Co-operative Court under
sections 93 or 105 or whether the Registrar
or the person authorised under section 88
(hereinafter in this section referred to as "the
authorised person") hears a person against
whom charges are framed under that section
and the Co-operative Court or the Registrar or
the authorised person, as the case may be, is
satisfied on inquiry or otherwise that a party
to such dispute or the person against whom
proceedings are pending under section 88, with
intent to defeat, delay or obstruct the execution
of any award or the carrying out of any order
that may be made,
(a)

is about to dispose of the whole or any

part of his property, or

(b)

is about to remove the whole or any

part of his property from its or his
jurisdiction the Court or the Registrar or
the authorised person, as the case may be,
may, unless adequate security is furnished,
direct conditional attachment of the said
property, and such attachment shall have
the same effect as if made by a competent
Civil Court.

Section 96 of Maharashtra Co-operative Societies

Act, 1960.
Decision of Co-operative Court:- When a dispute
is referred to arbitration, the Co-operative Court

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Settlement of disputes including Recovery of dues

may, after giving a reasonable opportunity to
the parties to the dispute to be heard, made an
award on the dispute, on the expenses incurred
by the parties to the dispute in connection with
the proceedings, and fees and expenses payable
to the Co-operative Court. In case of money
claim preferred by society against a member, the
amount of award representing the interest shall
not be less than the amount of interest accrued
thereon in accordance with the contractual rate
of interest.

As per section 47 of the Maharashtra Cooperative Societies Act, 1960, it is clearly

speciied that the society has prior claim on the
amount recoverable from a member subject to
prior claim of Government in respect of land
revenue, or any money recoverable as land
revenue as per the provisions of sections 60 and
61 of Code of Civil Procedure Code, 1908, before
amounts are payable to the inanciers/business
associates.

As per the provisions of the bye-law:

Transfer of Share Certiicate

A defaulter cannot contest the election to be held

for the post of Committee Members.
A persistent defaulter can also be expelled by
the society. Even the High Court has held that
a persistent defaulter can be expelled. If the
member is expelled and the same is approved
by the Registrar and other higher authorities,
the concerned member can be evicted from the
premises to pay society dues.
If the defaulter has some complaints or
grievances against the society or Managing
Committee, his said complaints will not be
entertained by the Ofice of Registrar unless and
until he pays the society dues.
The concerned defaulter member cannot avail of
any loan which he wants to take by mortgaging
his premises on which dues are pending, as the
financial institution will always ask for a Nodues Certiicate.
A defaulter member cannot sell his/her flat
unless and until he clears-off the dues. As the
society would refuse the NOC and also to
transfer the premises unless and until the dues
are cleared.
If he wishes to rent or sub-let his premises the
society might not let him permission to do so
unless and until he pays all the dues.
Right to have prior claim on the shares of a
member if the member has become insolvent
or is unable to pay his debts to the inanciers/
business associates.

60

According to section 23(1) of the Maharashtra

Co-operative Society Act 1960, no society
without suficient cause refuse membership of
any person who is otherwise not disqualified
under any provision/rules of the Act & its
bye-laws and particularly cannot refuse on the
grounds of any caste/religion, etc. In the event
of any such unlawful action by society the
applicant can appeal to the concerned Registrar
u/s 23 for redressal of its grievance.

Asking for higher transfer fees than

` 25,000
Regulatory provisions
The charging of transfer fees is governed by
the bye-laws of the society. According to the
bye-law 40(d)(vii) of the old Model Bye-laws,
the transfer fees chargeable is ` 50 and the
premium amount chargeable is a maximum of
` 1,000. Subsequently, by a Circular issued by
the Commissioner of Co-operation and Registrar
Co-operative Societies dated 27th November,
1989, the maximum premium was increased to
` 25,000.
Under the new Model Bye-laws, bye-law 38(e)
(vii) provides for transfer fee of ` 500 only.
Further, bye-law 38(e)(ix) provides for the
payment of premium at the rate to be ixed by
the General Body but within the limits as may be
prescribed by the Department of Co-operation,
Government of Maharashtra from time to time.
Circular dated 9th August, 2001 issued by the

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Special Story the Maharashtra Co-op. Housing Society

Co-operation and Textile Department pegs the
maximum amount at ` 25,000.
Case laws
The practice of demanding transfer fees has also
been strongly condemned by the Maharashtra
State Co-operative Appellate Court, Bombay in
the case of Shri Ramanna Co-operative Housing
Society Limited vs. S. D. Chittar, Bombay, 1989
C.T.J. 319. The Co-operative Court has held that
the co-operative society can place reasonable
restrictions on transfer of a members interest
to prevent nuisance from unwanted element
but that does not mean that the society can
have such a right of proiteering out of the cooperative movement. It further held that the
practice of demanding transfer fees not approved
by the Registrar is totally illegal.
In the case of The Poona Hindu Middle Class Cooperative Housing Society Limited vs. Shri Sudhakar
Gopal Palsule, 1991 C.T.J. 326, the Maharashtra
State Co-operative Appellate Court, held that
the practice of demanding donation or transfer
fees deserves not only to be discouraged but
also to be condemned, because the practice was
repugnant to the very concept of co-operative
housing societies. The Court further held
that such payments are always made under
coercion and there is no element of consent or
voluntariness as there is a threat that the shares
will not be transferred if the payment is not
made. The Court directed the Society that since
payment amounts to extortion was illegal in law
and hence, it should refund the amount back to
the member along with interest.

NOC from society

Even though there is no necessity of society
No Objection Certificate for transfer of flat,
according to rule 24 of the Rule 1961, he has to
give 15 days notice to society before transferring
of lat. On receipt of such notice, the Secretary
should place the same before the meeting
of the committee and take decision thereof
before 30 days and inform such decision to the

SS-VI-45

member within 8 days from the decision of

society. If Society has not taken any decision
of transferring the share certificate within the
3 months stipulated period as per provision in
section 22(2) there is a provision to appeal before
the Register u/s 23(2).

Leakage problems
As per the new Bye-Laws it is specifically
mentioned that internal leakage will be the
responsibility of the members. However if the
leakage is from terrace or from outside wall it
will be responsibility of the society to have it
repaired as part of major repair from the repair
fund or from additional contribution from all the
members on the pro rata basis of area occupation.
Solution for solving leakage problem:
File police complaint.
Mandatory injunction against him/her for
carrying out the repairs to the seepage or ile a
civil suit for injunction and obtain stay order
Claim for damages to be ascertained by
competent engineer at some later stage.
For quick response file a petition u/s 133
Criminal Procedure Code in the court of local
2nd Class Magistrate

General misappropriation/Frauds
To prevent fraud, members should meet ofice
bearers at least once in three months for informal
discussions on society matters and ask for
explanations.
Once the audit is done the members can appoint
outside chartered accountant to scrutinise the
audited accounts if they feel that there is any
misappropriation.
Whenever fraud has occurred in the affairs of
the society then a minimum of 1/3rd members
can complaint in writing to Deputy Registrar of
Co-operative Department u/s 83 of MCS Act,
1960, for investigation and recovery of losses

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Settlement of disputes including Recovery of dues

done to the society. You can ask to impose
penalties and punishments on the Managing
Committee under section 146(J) and section 147
of the MCS Act. Under section 89A of the MCS
Act, you can petition the registrar to "Inspect"
the affairs of the society.
On receiving the complaint letter, the oficer or
his nominee is duty bound to conduct such an
inquiry. The Registrar may direct the applicants
to deposit a sum of nominal amount with
him and this amount can be forfeited if the
allegations made against office bearers turns
out to be vexatious or malicious. If the inquiry
discloses substance in the charges made the
amount has to be refunded to the applicants if
the allegations are not false but yet cannot be
proved the State Government would bear the
cost of inquiry.
The Maharashtra Co-operative Society Act, 1960
provides that all office bearers and members
of the society past and present are supposed
to co-operate with such inquiry and produce
any document that is needed and is in their
possession. The Registrar is supposed to inform
the society as to the indings arrived at through
the inquiry. Under the Act, the registrar has
the power to himself (suo motu) commence an
inquiry into the inancial condition of the society
based on the complaint of even a single member.
The society can also pass a resolution in the
general meeting to expel any of the erring ofice
bearers of the Society.

Commercial Activity from residential

premises
Harassment
and
nuisance
created
regularly by the purchaser by carrying on
commercial activities at residential area is
prohibited.
For converting residential premises into
commercial premises a proposal is to be
submitted to local authority through Architect/
Licensed Surveyor with prerequisites e.g.
Application for cc, Notice u/s 342, plans,

62

existing building plans, occupation permission,

D.P. Remarks, NOC from Co-operative Housing
Society, stability certificate from Structural
Consultant.
On 16th February, 2006, the then Chief Justice
of India, Y.K. Sabharwal passed a detailed
order setting into motion the process of sealing
of properties in designated residential areas of
Delhi which were being used for commercial
purposes. In the drive that followed to
implement the order, thousands of premises
being used for commercial purposes such as
shops and offices, many of which had been
functioning for decades, were sealed, forcing
them to buy or rent premises in shopping malls
and commercial complexes. This sealing went
on relentlessly under the continuous supervision
of Chief Justice Sabharwal's bench, monitored
and directed by a Court appointed monitoring
committee.
Commercial usage obeying code of conduct
The member can use his flat for the purpose
of dispensary, consulting room, nursing home,
lour mill, coaching classes, cradle home, beauty
parlour, etc. as per the bye-law No. 3. However,
it is obligatory on him to obey the code of
conduct if made by the general body meeting in
such a way that there would be no nuisance to
other members in the society by this profession.
Commercial usage in no way violates provisions
of change of user and is not a breach of model
bye-laws. Presently rules allow 20% commercial
usage in residential units. (Supreme Court: V
Sasidharan vs. Peter and Karunakar and Ors.) and
(Supreme Court: Dev Brat Sharma vs. Dr Jagjit
Mehta CA No 4216 of 1988).

Nonoccupancy charges
As per Notification of 1st August, 2001, no
non occupancy charges should be recovered if
member has given his flat to nearby relative/
family members. In other cases they can levy
@10% of the service charges only and not on
total maintenance bill.

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Special Story the Maharashtra Co-op. Housing Society

Parking space and garage

The definition of a flat includes garage, as per
Maharashtra Ownership of Flats Act (MOFA),
but does not include an open car parking space.
An enclosed garage is not the same as a stilt
parking slot. Stilt portion is not charged to
property tax whereas garage which is closed on
all the four sides is charged to property tax.
Parking facilities have to be given to members
having shops on ground loor. Visitors also have
a right to park their vehicles in the building
premises. 10% of the total parking space has to
be reserved for visitors as per Table 15 of the
Development Control Rules.
Just because one member has paid money to
the builder for car parking space that does not
mean that the said member is entitled to the
said parking space. Court judgments are crystal
clear on the same. Even if a member has not
paid for car parking space he is entitled to park
his vehicle in the building premises, based on
resolution passed by the AGM.
As per Bombay High Court and Maharashtra
State Consumer Disputes Redressal Commission
judgments, no builder can sell parking space
under stilts separately, and is classified as
common parking space and can be allocated by
the housing society committee.
As per sub-regulation (18) of Regulation 38 of
the Development Control Rules, the size of a
clearly marked parking space should be 2.5m
x 5.5m. The size of scooter, motorcycle parking
must be 2 sq. m.

Repairs and Illegal construction

If member wants to do internal structural
changes in his flat, he has to obtain approval
from Municipal Corporation and a society
NOC. If such changes were made without the
prior permission of the society, then the society
can take action under the Bye-law No. 166 of
the model Bye-laws and similarly can make
complaint to the local authority in this regard.

SS-VI-47

Terrace repairs are the responsibility of the

Society (Bombay High Court Writ Petition No.
7231 of 2002 delivered on 28-6-2006)
Having regard to the recent building crashes,
a specific provision has been made that if a
member changes the usage of the premises
and carries out unauthorised construction
without permission of the society as well as
of the competent authority, then he can be
expelled.

Nomination and Will in favour of

different heirs
As per section 30 of the Act, a nominee is
entitled to the membership in place of the
deceased member. However, the Law of
Nomination as laid down by section 30 of the
Act is not intended to set up another Law of
Succession, and that nominee in such a case
would hold the property, that is to say, the
shares and interest of the deceased member in
trust for all the heirs and legal representatives of
the deceased member.
The legatee under the Will has the sole right
over such a property and that the nominee
will have no right. This has been laid down
by the Bombay High Court in its judgment of
GATANEKAR vs. GATANEKAR (AIR 1982
(Bombay)/482). It has been held therein that
the nominee should hold the property in trust
for the heirs and legal representatives of the
deceased member.
If, however, a nominee applies for membership,
the Society is bound to admit him as a member.
Nevertheless the Society should make it clear
that he is holding the property in trust for the
heirs and legal representative of the deceased
member and that such representative of the
deceased member and that such representative
of the deceased member and that such nominee
should not be allowed to transfer the shares
and the interest vis. The lat to another which a
member can otherwise do after holding shares
for one year under section 29 of the Act.

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Settlement of disputes including Recovery of dues

The Society may advise the parties viz. the
legatee to bring a probate or to a nominee
to obtain an order from the Registrar of Cooperative Societies under section 23 of the Act.
If both the legatee and the nominee apply for
membership of the society, the society could
inform them that since there is obviously a
dispute in between two parties, they may get
an order from the Registrar of Co-operative
Societies under section 23 of the Act and the
society should formally refuse membership to
both of them.

Non-formation of Co-operative
Society by the builder
If the builder is non-operative in the matter
of formation of a Co-operative Society, he is
committing an offence under the Maharashtra
Ownership Flats Act of 1963. He can be
preceded in a Criminal Court of Law. The flat
purchasers cannot however make a complaint
against the builder before the Registrar of Cooperative Societies or a Co-operative Court. A
Co-operative will have jurisdiction only after
the Society is registered and not before. The
Bombay High Court has given an order to the
Registrar of Co-operative Societies to register a
Co-operative Society in spite of non co-operation
from the builder.

Right to access documents

transactions of the society

&

Maharashtra Co-operative Societies Act (1960),

section 32 states that any registered member
cannot be denied right to see how the society
is functioning. If the society is not co-operating,
then the member can make an application to
Chairman/ Secretary u/s 32 of the MCS Act,
to inspect the required information, with prior
permission, in the society office during office
hours. Your society is bound to give you the
required information within 30 days of the
application on payment of legitimate charges
prescribed in the bye-law, at ` 5/- per page. It
is important to use polite language, and avoid
accusations, references to previous incidents.

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Right to make RTI application

Co-operative Housing Societies are not directly
under Right to Information (RTI) Act, 2005. But
they are indirectly covered, through the ofice of
Deputy Registrar u/s 2(f), which entitles you to
information relating to any private body which
can be accessed by a public authority under any
other law for the time being in force. The Deputy
Registrar has to provide the said information,
after getting it from your Society, using his
powers u/ss. 77 & 78 of the MCS Act. But if the
desired information is not provided within 30
days, you can invoke the mechanism of First
Appellate Authority under RTI Act Sec. 19(1).

Expulsion of a member in Cooperative Housing Society

Expulsion of a member in a Co-operative
Housing Society is an extreme measure and
most societies consider it their last resort. When
everything else fails to set things right, expulsion
of the concerned member is considered the only
way out.
If extreme need arises for expulsion of a
member, the Law and Procedure be strictly
followed as laid down in section 35 of
Maharashtra Co-operative Societies Act, 1960,
Rules 28, 29 of the Maharashtra Co-operative
Societies Rule 1961 read with Bye-laws No. 51 to
56 of Model Bye-laws.
Grounds of expulsion of a member
A member may be expelled from the
Membership of the Society, if such member:

The acts of the member are detrimental

to the interest or proper working of the
Society

Has persistently failed to pay the charges,

dues to the Society

Has wilfully deceived the Society by

giving false information,

Has used his lat for immoral purposes or

misused it for illegal purposes habitually,

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SS-VI-48

Special Story the Maharashtra Co-op. Housing Society

Has been in habit of committing breaches

of any of the provisions of the Bye-Laws
of the Society, which, in the opinion of the
Committee are of serious nature,

Has furnished false information or omitted

to furnish the material information to
the Registering Authority at the time of
Registration of the Society.

Appeals
Under Maharashtra Co-operative Societies Act,
1960, there are two independent forums;
1.

Registrar exercising a quasi-judicial

authority

2.

Co-operative Courts established under

section 91 of the Act.

There are different provisions of Appeals in both

these authorities. An appeal is provided under
section 152 of the Act before the Divisional Joint
Registrar in charge of appeals. There can also
be revision under section 154 of the Act. If an
order is passed by the Registrar under Section
35 of the Act in case of a resolution of expulsion
or of rejecting it, an appeal is provided again to
the Divisional Joint Registrar under section 152
of the Act. An appeal is also provided under
the Section 152 of the Act if the Managing
Committee or its member is removed under
section 77-A or 78 of the Act. However such
powers are exercised by the Divisional Joint
Registrar in charge of Administration. Then the
powers of appeal or Revision as the case may be,
are with the State Government.
If an award is passed by the Judge of
Co-operative Court, then an appeal is

provided under section 97 of the Act before

the Maharashtra State Government Appellate
Court. If the Judge of the Co-operative Court
passes any interim order or interlocutory
order by exercising powers under section 95
of the Act, then an appeal is provided under
Section 97 before the Appellate Court. Remedy
by way Writ Petition under Articles 226 &
227 of the Constitution of India is always
available to the Co-operative Society or even to
aggrieved
member
in
extraordinary
circumstances.
Section 101 of Maharashtra Co-operative
Societies act, 1960
Where the Registrar is satisfied that the
concerned society has failed to take action
under the foregoing sub-section in respect of
any amount due as arrears, the Registrar may,
of his motion, after making such inquiries as he
deems it, grant a certiicate for the recovery of
the amount stated therein to be due as arrears
and such a certificate shall be deemed to have
been issued as if on an application made by the
society concerned.

Conclusion
Though there are number of avenues available
for redressal of disputes inter se society &
members, must successful and less time
consuming and cost effective is though
conciliation method only by persuasion by
small compromise etc. It is experience of almost
everybody that most of time dispute arises
on ego clash mode rather than on technical/
inancial grounds where discussion & persuasion
is more helpful than any other methods.

Facts are the enemy of truth.

- Don Quixote - Man of La Mancha

SS-VI-49

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