Expulsion from membership of Housing Society

By Legal Bureau

Expulsion from membership
(MCS Act 1960/MCS Rules, 1961/Bye-laws of the year1984 and 2001
A member may be expelled from membership of the society, by the society, on the grounds mentioned in the Registered Bye-laws, of the concerned society. Section 35(1) of the Maharashtra Co-operative Societies Act, 1960, talks about expulsion of a member for acts, which are detrimental to the interest or proper working of the society. Expulsion of a member, from membership, of the society is a very drastic step/action because it inter alia results in striking off the name of the member, from the Register of members, and the concerned member has to restore possession to the society. It may also, involve forfeiture of shares held by the member. The provisions of Section 35 etc., of the Maharashtra Co-operative Societies Act, 1960, the provisions of Rule28 and 29 etc. of the Maharashtra Co-operative Societies Act, 1961, and certain relevant provisions of Model Bye-laws, of the Co-operative Societies, (Flat Owners Type/Open Plot Type/Plot Purchased Type), of the year1984 and 2001 have been discussed herein below:
a. How and when a member can be expelled [Section 35(1)]
As per Section 35(1) of the Maharashtra Co-operative Societies Act, 1960, a society may, by resolution passed by a majority of not less than three-fourths of the members entitled to vote who are present at a general meeting held for the purpose, expel a member for acts which are detrimental to the interest or roper working of the ‘society’.
Provided that, no resolution shall be valid, unless the member concerned is given an opportunity of representing his case to the general body and no resolution shall be effective unless it is approved by the Registrar.
b. Rights of an expelled member in respect of re-admission as a member [section 35(20]
As per Section 35(2) of the Maharashtra Co-operative Societies Act 1960, no member of a society who has been expelled under Section 35(1) shall be eligible for re-admission as a member of that society, or for admission as a member of any other society, for a period of one year from the date of such expulsion.
Provided that, the registrar may, on an application by the society and in special circumstances, sanction the re-admission, within the said period, of any such member as a member of the said society or of any other society, as the case may be.
c. Rights of society to acquire the shares or interest of an expelled member by paying value [section 29(3)]
As per Section 29(3) of the Maharashtra Co-operative Societies Act, 1960, notwithstanding anything contained in sub-sections (1) and (2) of Section 29, where a member is allowed to resign, or is expelled, or ceases to be a member on account of his being disqualified by the said Act, or by the rules made thereunder or by the bye-laws of the society, the society may acquire the share or interest of such member in the share capital by paying for its value determined in the manner prescribed.
d. Restrictions on the total payment of share capital in any financial year for such purposes [Section 29(3)]
As per Section 29 (3) of the Maharashtra Co-operative Societies Act, 1960, the total payment of share capital of a society in any financial year for such purposes should not exceed ten percent of the paid-up share capital of the society on the last day of the financial year immediately preceding.
e. The right to forfeit the shares or interest of any expelled member shall not be affected by the aforesaid, provisions [explanation I to Section 29(3)]
As per Explanation I to Section 29(3) of the Maharashtra Co-operative Societies Act, 1960, the right to forfeit the share or interest of any expelled member in the share capital by virtue of any bye-laws of the society, shall not be affected by the aforesaid provision.
f. Meaning of the expression “financial year” [Explanation II to Section 26(3)
As per Explanation II to Section 29(3) of the Maharashtra Co-operative Societies Act, 1960, in section 29, the expression “financial year” means the year ending on the 31st day of March or in the case of any society or class of societies the accounts of which are with the previous sanction of the Registrar balanced on any other day, the year ending on such day.
g. When and how a member can be expelled [Rule 28]
As per Rule 28 of the Maharashtra Co-operative Societies Act, 1961, any member who has been persistently defaulting payment of his dues or has been failing to comply with the provisions of the bye-laws regarding sales of his produce through the society or, other matters in connection with his dealings with the society or who, in the opinion of the committee, has brought disrepute to the society or has done other acts detrimental to the interest or proper working of the society may in accordance with the provisions of sub-section (1) of Section 35, be expelled from the society.
h. Expulsion can involve forfeiture of shares [Rule 28]
As per Rule 28 of the Maharashtra Co-operative Societies Act, 1961, expulsion from membership may involve forfeiture of shares held by the member.
i. Procedure for expulsion of member [Rule 29] [Rule 29(1)]
Asper Rule 29(1) of the Maharashtra Co-operative Societies Act, 1961, where any member of a society proposes to bring resolution for expulsion of any other member he shall give a written notice thereof, to the chairman of the society. On receipt of notice or when the committee itself decides to bring in such resolution, the consideration of such resolution shall be included in the agenda for the next general meeting and a notice thereof shall be given to the member against whom such resolution is proposed to be brought, calling upon him to be present at the general meeting to be held not earlier than a period of one month from the date of such notice and to show cause against expulsion to the general body of members. After hearing the member, if present, or after taking into consideration any written representation which he might have sent, the general body of members shall proceed to consider the resolution.
Powers of the Registrar to grant his approval to the Resolution of Expulsion [Rule 29(20]
As per Rule 29(2) body of of the Maharashtra Co-operative Societies Act, 1961, when a resolution is passed in accordance with sub-rule(1) is sent to the Registrar or otherwise, brought to his notice, the Registrar may consider the resolution and after making such inquires as he may deem fit, give his approval and communicate the same to the society and the member concerned. The resolution shall be effective from the date of such approval