75% should agree for redevelopment of housing society in Gujarat

By Gujarat Bureau

Last May, that in May 2019, Gujarat Govt got consent from President for Amendment made to “The Gujarat Ownership Flats (Amendment) Bill” which provided way for redevelopment of thousands of dilapidated buildings in Gujarat.

The Amended At now provide for requisite of 75% consent of members of a housing society to go for redevelopment. Previously it was required to take 100 consent of its member for redevelopment.
A boom in redevelopment of buildings and old structure can be seen since last one in year in the city of Ahmadabad where more than 2 lakhs structures and buildings are going in for redevelopment.
The new Amended Act of Gujarat Co-operative Societies Act have now pave way for a flood of projects and FSI in the city where good locations are in demand and redevelopment of buildings have surpassed new constructions in outskirt areas.
A society which is registered in the state will have to take consent of only 75% for going in for redevelopment.

Gujarat Government invites Private Developers for Redevelopment

 

By Gujarat Bureau

The government has launched a new scheme to attract private developers to redevelop dilapidated public housing colonies

Gujarat government announced its ‘Redevelopment of Public Housing Policy’ yesterday. The government has launched a new scheme to attract private developers to redevelop dilapidated public housing colonies. The plan to include redevelopment of private housing colonies was dropped at the last minute.

The public housing scheme will include housing colonies in urban areas under Gujarat Housing Board (GHB), Urban Local Bodies (ULBs) and urban development authorities.

The colonies must be older than 20 years with a minimum plot size of 5,000 sq m. The developer will have to provide transitory accommodation to the present dwellers. Under the ‘Redevelopment of Public Housing Policy’, the state government has given the highest possible 3.0 FSI to private developers as well as opens trading facility for transferable developmental rights (TDR) of FSI which will boost the real estate industry in the state. Developers will be allowed to trade FSI.

Currently, developers are allowed an FSI of 1.2 in an R2 zone and 1.8 FSI in an R1 zone, with between 0.6 and 0.9 of chargeable FSI. Under the newly-announced policy, redevelopment of only government colonies will be allowed, using PPP (Public Private Partnership) model.

RING IN THE NEW

  • the housing society owners association must apply to the local authority with the consent of at least 60% of members.
  • The developer will be selected through competitive bidding.
  • Developer will get up to 3 FSI and Transfer of Development Rights (TDR). Developer can construct 7-11 storeys with consent of all stakeholders.
  •  Developer to sell additional affordable housing stock at a regulated price. Dwellers to get redeveloped houses without any cost.
  • Developers to give 40% extra carpet area to owners in case of redevelopment. The minimum should be 30 sq m carpet area. For e.g. if you have a 30 sq m apartment, the developer will have to give you a 42 sq m redeveloped one

Dispute Resolution in Housing Societies in Gujarat

By Gujarat Bureau

Introduction
(1) There are special provision and special machinery to deal with civil disputes under co-operative law with liberal limitation and special concessional lavad-fees prescribed for the same. They are covered mainly under Section 96 and the jurisdiction of Civil Court is barred under Section 166 of G.C.S, Act, read with Sec. 9 of C.P.C. Therefore, Sec. 96 is incorporated for ready reference before any further discussion:
SEC. 95 : DISPUTES:- (1) Notwithstanding anything contained in any other law for the time-being in force, any dispute touching the constitution, management or business of a society shall be referred in the prescribed form either by any of the parties to the dispute or by a federal society to which the society is affiliated or by a creditor of the society, to the Registrar if the parties there are from amongst the following.
(A) A society, its committee, any past committee, any past or present agent, any past or present servant or Nominee, heir of legal representative of any deceased officer, deceased agent or deceased servant of the society, or the liquidator of the society;
(B) A member, past member or a person claiming through a member, past member or a deceased member of society which is a member of the society;
(C) A person, other than member of the society who has been granted a loan by the society, or with whom the society has to had transactions under the provisions of Sec. 46, and any person claiming through such a person:
(D) A surety of member, past member or a deceased member, or a person other than a member who has been granted a loan by the society under section 46, whether such surety is or is not a member of the society;
(E) Any other society or the liquidator of such a society.
(F) When any question arises whether for the purpose of sub. sec.
(1) a matter referred to for decision is a dispute or not, the question shall be considered by the

Registrar, whose decision shall be final.
EXPLANATION – I:- For the purpose of this sub-section, a dispute shall include
(I) A claim by a society for any debt or demand due to it from a member, past member or the nominee, heir or legal representative of a deceased member, without such a debt or demand be admitted or not.
(II) A claim by a surety for any sum or demand due to him from the principal borrower in respect of a loan by a society and recovered from the surety owing to the default of the principal borrower, whether such a sum or demand be admitted or not.
(III) A claim by a society for any loss caused to it by a member past member; or deceased member by any officer, past, officer or deceased officer, by any agent, past agent or deceased agent, or by any servant, past servant or by its committee, past or present whether such loss be admitted or not;
(IV) A refusal or failure by a member, a past member or a nominee, heir or legal representative of a deceased members . to deliver possession to a society of land or any other assets resumed by it for breach of conditions of the assignment.
EXPLANATION – II :- For the purpose of this section, the expression “agent” includes in
the cases of a housing society, an architect, engineer or contractor engaged by the society.
Parties to Dispute
(1) Before we start any discussion, it is important to note that the Hon’ble Gujarat High Court has struck down secs. 96 (c) (d), (e); the words “any past or present agent, deceased agent” and Explanation
– II as ultravires to Art.14 of the Constitution 1971 (XII)-GLR-P-355 in the case of Rasiklal Patel v/s Kailashgauri Mehta. This judgment was challenged before Supreme Court. The same is confirmed by Supreme Court in Distract Registrar. (Assit.) v. Vikrambhai Ratilal Dalal. SCA, No 2153 of 1972 Dtd.27 -11-1986 reported in 1987 Suppl. SCC- 27.
(2) The above judgment has appreciated the situation that the society can avail the special machinery created under statute against non-member and the same is not available for the non member against the society under Sec. 96 read with Section 167. Therefore, two persons similarly situated are discriminated in law and therefore, is ultravires to Art. 14 of the Constitution, particularly builder, architect etc., are out of the net of Sec. 36. Therefore, it is necessary to amend the law to enable nonmember also to sue against the society by suitable amendment to restore Original position of law which
hold good intentions. Such amendment will abrogate the decision of Hon’ble High Court in 1971-GLB355 and disputes with mixed set of parties will be covered to resolve of complication which has arisen by strucking down the original provisions under Sec. 96.

As it stands the parties covered under sec. 96 are discussed as under :
(3) The society is the main party to the dispute since the dispute would invariably be touching the constitution, management or business of a society The society is a body corporate under section 37 and the society is having its supreme authority vested in general body in general meeting under section 73.
Therefore, the society exercises its powers either in the general body under Sec. 73 or by the managing committee as per Sec. 74 If the society is not joined as party in the dispute, it cannot be said to be a dispute under section 96. The internal dispute inter se members in which there is no direct or indirect role of the society is not a dispute under sec. 96. However, whether a society has role is a question of fact related to each case. This has been decided by the Hon’ble ‘. High Court in 1982-GLH (UJ) 8.
(Govindlal Jivanlal Desai v/s Girishchandra Vadilal Vani).
Similarly, legal heirship of a member can be decided under section 31 by the society: but the society cannot be compelled to decide disputed question of legal heirship for which a separate forum of civil court is available. The question of legal heirship is a question f succession for which Succession Law like Hindu Succession Law and Hindu Succession At are there under which civil court has jurisdiction.
Since Succession Law is a special law for succession matters, Registrar’s Nominee has no Jurisdiction.
Since co-operative law is a general law for succession matters, succession law prevails over cooperative Law and therefore, Nominee, has no jurisdiction to decide purely a succession matter, which is not coming under the regular business the society. Therefore, the society is an important and inevitable party either as a plaintiff or defendant whose action is a real cause of dispute touching the business, management and constitution of the society. The other parties to be dispute are either ,aggrieved or connected as beneficiary to the dispute.
(4) Committee :- Committee is also a party connected with any decision of the society as a body corporate. The society as body corporate is a distinct legal person and the committee members are distinct natural persons and in some cases committee members may be personally liable for the deeds rather misdeeds of the society. The definition of the word “committee” is given in section 2(5) which is reproduced herein below :
“Sec. 2(5) “committee” means the committee of management, or other directing body, to which the management of the affairs of a society is entrusted :”
Herein sec. past committee is also included. I Equally administrator or liquidator replaces
committee and enjoys all power of the committee and, therefore, liquidator/administrator is also include.
(5) Officer :- Any past or present officer is included as party to the dispute and the legal
representative of any deceased officer is also included as party under section 96. The definition of officer is given under sec. 2(14) of the act. It is reproduced as under :
Sec.2(14) :- “officer” means a person elected or appointed by a society to any office of such society according to its bye-laws and includes a chairman. vice-chairman, president vice president, managing director, manager, secretary, treasurer, member of committee, and any other person elected or appointed under this Act, the rules or the bye Laws, to give direction in regard to the business of such society; The officer includes all the committee members and officers, office bearers and they may be either elected or appointed by a society. The main criteria of officer are that he should be able to give direction in regard to the business of the society as per Act, Rules and the Bye-laws.
(6) Agent: – Any past or present agent, deceased agent is included in 96(1) (a) as parties to the dispute. However, these words are struck down as ultravires to the constitution Act. 14 by Hon. High Court in 1971 (XII)-GLR-P-355 as mentioned above along with the explanation II, wherein the definition of agent is given
(7) Member:- A member is included as party to the dispute and the liability and the rights of the member will be subject-matter of the dispute in which even past member or the deceased member can be joined as party. The act is also incorporated to protect the right of a person claiming through a member or past member or deceased member. Here, the situation of a society which is a member of other society is also included, However, if the society is, not a member of the other society, a dispute falls within the purview of Sec. 96(1) (e) which is struck down by hon’ble High Court in 1971 (XII)-GLR-355. It is also important to note that transactions with non-member u.s.
46 were sought to be covered u/s 96(1) (d); if he is a surety of a member of surety of a
nonmember. However such surety covered under section 96(i) (d) is now not covered since Sec. 96 (i) (d) is struck down as ultravires by hon’ble High Court in 1971 (XII)-GLR-355. Therefore, the surety will be covered only if he is a member himself in view of sec, 96(1)(b).
(8) Transactions – Qua Member:- It is possible that a person entered into a transaction with a proposed society which is subsequently registered and he incidentally becomes a member e.g. if a person enters into society in an agreement to sell (Satakhat) which is subsequently registered saledeed with a society, in which housing co-operative society is registered and the person joins the society as a member, he cannot sue the society for his outstanding dues of the contract of agreement of sale since it is not entered into the capacity of the member. Therefore the capacity in which the transaction is entered into with the society is important. In case, the member has two different distinct capacity in one capacity, he is either a land-lord or tenant of the society for hiring the premises and another capacity as member of the society, then the transaction in the capacity of
a member is covered under sec.96 of the Act and the transaction in a different distinct capacity other than a member which is not regular course of business between a member and society will not be covered under section 96. Similar case was decided by hon’ble Supreme Court in AIR 1969-SC-1320 in case of Deccan mercantile co-operative Bank v/s Dalichand.
Membership on the Date of Transaction Relying upon AIR-1969-SC-1320 Deccan mercantile coop bank, the tribunal in a case of Vijay Cooperative Bank Ltd. In 30-CTD-95 came to the conclusion that if u person is not a member on the date of transaction and is subsequently made a member, then the transaction is not a qua-member,
therefore, the nominee has no jurisdiction. This judgment is thereafter followed consistently by Hon’ble Tribunal and similarly by the board of nominees creating great hardship to the cases of cooperative Banks.
It was a normal practice of a bank to take the loan applications along ,with membership application form, and enter into documents and release, the finance and the resolution of admission of membership was subsequently passed by the committee under rule 33. The bank have, therefore become alert not to repeat such type of mistake and have strictly followed the procedure of completion of membership, formalities first and thereafter completing the formalities of loan documents. However past cases of such mistake have all gone up to Hon’ble High Court in case of almost all the cooperative banks and the numerous petitions on similar subjects are pending before Hon’ble High Court for final decision.
Though the matter is sub-judice before Hon. High Court, it will be interesting to comment upon various aspects of the situation. In the case of Navdip Cooperative Bank in appeal No. 11 of 1994, decided on 11-3-96, the very issue was prominent in which two members of the bench differed arid the matter was referred to the Hon. President. Therefore this issue is discussed in detail in this judgment from all angles by three decisions in a single judgment of the Tribunal. Though the view of the president is final, the matter is again taken up before Hon’ble High Court as in another case. The original statute has intended to cover the transaction with non-members covered under section 46, by Section 96(1)(c)
which is struck down as ultravires in 1971 (XII)-GLA-355. The scope of the jurisdiction against the non-member is further reduced by narrow interpretation of membership on the date of transaction.
When a person applies for loan as well as for membership simultaneously the whole process of admission of member and granting of loan is a part of continuous transaction and cannot be separately dealt with to treat a person as non-member, relying upon AIR-1969 SC 1320. The judgment of Hon’ble Supreme Court deals with a situation in which a person with two distinct capacity enters into the transactions with the society which is not qua member. In this situation, we can only hope that the Hon’ble High Court may resolve the issue to end up a state of confusion prevailing now before Board of Nominees and The Tribunal in similar cases. It is also important to appreciate the word “transaction”
of a bank with member in which the relation starts from the date of document or the date of membership, but the relation is a continuous relation that continues in all transactions reflected in the books of accounts and, therefore, the date of transaction also will not have a very narrow meaning as the date of document on which date membership has to be ensured according to the hon’ble Tribunal in Revision No. 58 of 1991, as mentioned above.
Dispute Regarding Service Matters Another important cause of controversial disputes arises from the service matters of the employees of the co-operative society which are mainly related to the service conditions prescribed by the contractual relations of appointment of the employee as well as the contractual relations arising in terms of the bye-laws. The bye laws are not enforceable by writ jurisdiction under Art. 226 or 227, as per the Hon. High Court judgment reported in 1976(XVII) GLR.53J (Rajabhai Ranmal Mori v. Members of the Managing Committee of Shri Una Taluka Sahakari.
Kharid Vechan Sangh) by which earlier judgment of 1973(XIV) GLR-786 (Lambha Vividh
Karykari Seva Sahakari Mandli v. Dist. Registrar) is overruled. Bye-laws have got no statutory force as per that judgment which is also confirmed by the Supreme Court judgment prior to 1976(XVII)-GLR-583 referred to above and subsequent to this judgments referred hereunder (1) AIR.1970-SG-245 (Co-operative Central Bank Ltd. v. Addl. Industrial Tribunal, A.P.) .
(2) AIR-1984-SC-192 (Babaji Kondaj, Garad v. Nasik Merchants Co-op. Bank Ltd.)
The above views regarding enforceability of bye-law in 1973(XIV) GLR-786 and 1976(XVII)
GLR-503 are in the two different extremities and the importance of bye-laws are placed in the right perspective in 1977{XVIII) GLR-P.692 (Rajkot Nagrik Sahakari Bank Ltd. v. Rajkot Dist. Co-op. Bank Ltd.) 1996-(2)-GLR-433 : 1996( 1)GLH-753 (Ranuj Nagarik Sahakari Bank Ltd. v. State).
Therefore, bye-laws cannot be disregarded in the service matters by any authority like the
Registrar or the Registrar’s Nominee or the Tribunal and the misreading of bye-laws is considered as an error of law which can be interfered under supervisory jurisdiction by Hon’ble High Court under Art. 227. Keeping, this view in mind, the Hon. High Court recently in 1998-(3)-GLR-2318 in the case of Janata Cooperative Bank Dholka has confirmed the enforceability of bye-laws in the service matter.
Servant and Officers are parties enumerated in Section 96 as the parties to the dispute. The cases of misappropriation or recovery of some dues of the employees are covered under Section 96. The main controversy remains regarding jurisdiction, of the Board of Nominees and the Jurisdiction of Labour Court in general disputes.
SECTION 76 :-
Section-76 has made an enabling provision to prescribe service conditions by making rules and the last attempt was made on 18-1-94 by a draft notification which was not converted into final notification under sec. 168 of GCS Act. .Therefore, this draft notification has not taken the form of rules. However, it is important to note that the service conditions are under the ambit, of cooperative law. Service condition as referred to in the bye-laws and the disputes regarding the conditions certainly touches the management if not the business or the constitution. Similar view has been expressed by the Rajasthan High Court in AIR-1991-RAJ-121. Para-12. Therefore, in the humble opinion of the authors, the disputes relating to the relations of the servants and officers of the society with the society are covered under section 96 and the Board of Nominees has jurisdiction to deal with such disputes. Similar view has been recently expressed in above referred judgment in 1998-(3)GLR-2318.
However, in P.R. Mankad’s case in AIR-1979-SC-1203, 1979-GLR-701 (SC), the Hon’ble Supreme Court has held that the co-operative law is a general law and the labour law is a special law dealing with the special disputes. Therefore, only labour court has jurisdiction and not the Board of Nominees.
With due respect to Hon’ble Supreme Court, the author submits that the society has a right to recover its normal dues as well as the dues arising out of misappropriation or misconduct from the employees for which the forum of Board of Nominees is available. However, if the servant or the officers of the society are excluded from available forum of Board of Nominees for recovering their dues from the society arising out of service conditions or bye-laws, the same will be violative of Art. 14 of the Constitution. Therefore, it is necessary to have a thorough look at the position of the statutory provisions and the case law and make a sharp distinction of purely labour disputes and the disputes arising out of contract in terms of service conditions and bye-laws. The Labour Court may allowed to deal with disciplinary matters whereas mutual finical obligations may be allowed to be entertained by the learned Board of Nominees. It is also important to note that the draft rules made under Section 76 read with Section 168 of GCS Act made provisions for dealing with service matters also and in the last rule, there was provision to refer the dispute to the learned Board of Nominee under section 96.
However, if the draft rules are made final by any subsequent attempt, the question remains whether Section 96 itself as interpreted by hon’ble Supreme Court in P.R. Mankad’s case reported in 1979(XX)-GLR-701 conferring no jurisdiction to learned
Nominees, whether the jurisdiction can be resumed by, the rules under section 76; i.e. when the statute does not confer the jurisdiction, the rules cannot confirm the jurisdiction since rules are subordinate Legislation to the original statute. Therefore, the controversy needs to be resolved regarding the jurisdiction of the Board of Nominee for service matters since the jurisdiction of the labour court covers only employees below certain pay-scale and parties to the dispute under sec. 96 covers servants and/or officers, they may not be rendered remedy less.

Jurisdiction of Registrar V/S Jurisdiction of Learned Nominees
There are two machineries prescribed under the GCS Act with provision of appeal and revision.
Looking to such provision of the Act, Hon’ble High Court in 1978(XIX)-GLR-92 (Jintendra Natvarlal Thaker v. Hirabag Co-op. Housing Society), has held that the Board of Nominees has no jurisdiction for the disputes arising out of the application of Section 36, 23, 11 etc. for which the Registrar has the jurisdiction and the separate machinery for appeal and revision is prescribed under the law. Similar view can be taken for the powers of Registrar under Section 106, 139 etc. However, in case of the resolution of expulsion under Sec. 36 the resolution is a business of the society and it has been held by Hon. Tribunal in revision No. 75 of 1988, that the Nominee has jurisdiction for challenging the resolution before the resolution is submitted to the District Registrar for approval. The jurisdiction of the Registrar i.e. ‘District Registrar starts when the resolution reaches the Registrar/District Registrar and the jurisdiction of Nominee ends. This view was referred to by the Tribunal in Revision No.106 of 1994 by judgment dated 28-6-95 in/the case of Swami Gunalitnagar Soc. Review application No. 20 of 1995 decided on 15-9-97 is allowed by Hon. Tribunal and the decision of the same is stayed by Hon.

High Court in SCA No. 7535 of 1997.
Jurisdiction of Learned Nominee in Sucession Matters Section 31 confers powers to the society to act upon the Nomination for admitting legal heirs of the deceased member and also confers the power on the society in absence of nomination to make reasonable inquiry and admit legal heir as member. However, in case of disputed questions of Legal heirship, the learned Nominee has no jurisdiction to decide the succession matters for which a special court and special law is in force. Since succession law is a special law and to-operative law is general law for succession matters, special law prevails and, therefore the learned Nominee has no jurisdiction.
This view was expressed by Tribunal in Appeal No. 307 of 1995 & 311 of 1995 decided on 9-5-97. 2004(1) GLR-337 V/S P.B. Vagadia-sec-98(1). Jurisdiction to Challenge the Validity of Bye-Laws As mentioned in the foregoing paragraph, the bye-laws are in the nature of contract as in the case of articles of association as per the reported of Hon. High Court in 1976(XVII)-GLR-583. The validity of bye-laws can be challenged under section 153 for which time-limit of two months has been prescribed and the revision application lies under Sec. 155 before State Government. We may contemplate a situation in which bye-laws are contrary to Act and Rules as it happened in 1975(XVII)-GLR-382 (Ambalal Manilal Makwana v. Khambhat Taluka Sahakari Vechan Sangh). In such a situation when the
actual byelaws are in force in an election matter in which a member is deprived of his important rights to vote or contest the election, his cause of actions is related to the bye-laws which he would take up as a dispute under section 96 together with challenge of validity of bye-laws. If the bye-laws are ultravires to act and rules they can be challenged at any time as and when the cause of action arises by enforcement of bye-laws which are in the nature of contract interse between the member and the society. In the humble opinion of the authors, the time limit of challenge of bye-laws under section 153
and the authority of the Additional Registrar under Sec. 153 will not come in the way of ,the jurisdiction of the learned, Nominee for entertaining the dispute under section 96 for the validity of bye-laws which are ultravires to act and rules. The contract as prescribed under bye-laws gives rise to cause of action and the dispute as and when it is enforced and the members may choose to challenge the same as and when he is aggrieved by enforcement. Our view finds support by Hon’bIe High Court judgment reported in 1975(XVI)-GLR382.

Jurisdiction for the Election Dispute Petitions
Before 1982, all the election disputes were entertained by the learned Nominee under section 96 and as per 1975(XVI)-GLR-1058, the dispute were entertainable before the election is concluded. After the amending Act 1982 under which the Chapter XI (A) is added for the specified society listed under Section 74 (c), the situation has changed for the specified society whose election is conducted by the Collector. The provisions of Chapter XI (A) and the provision of rules under Section 145(Y) i.e.
Gujarat Specified Co-operative Societies Elections to Committee Rules 1982 are parallel to the provisions under Representation of Peoples Act 1951. Section 145(U) takes away the powers of learned Nominee under section 96 to entertain election petitions for the specified societies for which Tribunal is vested with original jurisdiction to entertain such petitions. However, it is important to note that the distinct features under which learned Nominee U/S 96 is still having original jurisdiction to entertain election disputes touching to the elections of specified societies which are mentioned as under:
(I) In case of the specified society which is also a federal society having affiliated societies as its members, the representatives of the affiliated society will be nominated by the affiliated society by a resolution and the voters list of the federal society will contain the names of the societies as well as the name of the representatives as decided in 1975(XVI)GLR-382. The challenge of validity of such resolutions for nomination of representative to the federal society will lie before the learned Nominee under Section 96.
(II) In the case of federal society having individual members, who have representatives in the general body as well as in the committee through their delegates, the election of delegates amongst individual members is not an election as per Section 14S-B(b), and, therefore, the same is required to be conducted by the society and not by the Collector. As per the judgment of Hon’ble Gujarat High Court reported in 1983 (2) GLR 1301 : 1983 GLH – 1080 (Hasmukhbhai Jugatram Raval v. The Collector, Surat) and unreported judgment of Hon’ble Gujarat High Court Division Bench in SCA No. 8356 of 92 and 8083 of 92 the election of delegates cannot be conducted by the Collector. Therefore, if any dispute arises out of election of delegates, the same is not covered under Section -145(U) and it can be referred to under Section 96. Election petition before the Tribunal lies only against the election of managing committee. Therefore, the role of Collector in the election process in the case of specified federal society starts only after the election of delegates from individual members and the resolutions by the affiliated societies nominating their
members. If there is a dispute relating to this process, the same can be referred to Board of Nominee under Section 96 and not to the Tribunal under Section 145-U (III) The election process starts by the Collector by publication of notification under Rule 16 of the
Gujarat Specified Societies Election to Committee Rules and that election process is concluded by the declaration of result under Rule 62 of Specified Societies Committee rules. Thereafter, the election of office bearers is held under Section 14S-z, for which again the dispute will lie before, the Nominee under Section 96
(IV) Therefore, in such cases, the Tribunal will have only revision/appeal jurisdiction and accordingly Tribunal has entertained revision application No. 4 of 94 decided on 4-8 95 reported in 34- CTD.70.

Disputes Against A Firm
Under the Partnership Act, the decree against a firm can be executed against the property of the firm as well as from the personal property of the partners and the liability of the partners are joint and several and the liability is unlimited except in case of insolvency of one or more of the partners in which case the liability will be shifted to the remaining partners. Therefore, in lavad case when award or decree is sought against the firm, the partners are interested in the property of (he firm and decree also affects the
partners by virtue of their unlimited personal liability over and above the liability of the firm. In this background of the Section 25 and 49 of Partnership Act 1932, it will be important to examine the parties to the disputes, when the firm is a member and the partners are not members of the society in a suit by a co-operative bank against the firm for the dues of the bank. It is very clear that in view of Section 99(3) (a) the partners are interested in the property of the firm and, therefore, they will have to be joined as parties to the dispute.
If the firm is a member and the partners are not members, partners are claiming their rights through firm and, therefore, also they are covered Section 96(1) (b) as well as Section 99 (3) (a).
In view of the above discussion, it is also important to note that the decree against I firm can be executed against partners from their personal property after the firm’s property is applied for payment of debts. Therefore when the partners are made liable to the unlimited extent under partnership act for the dues of the firm, they are covered under Section 99(3) (c) also which is paramateria same as CPC Order 1 Rule 10.
In view of above discussion, the! Tribunal has held in 2S-CTD-G7 that the Nominee has jurisdiction against the partners, when the firm is a member and the partners are not members of the society.

The Cooption of A Committee Member
The cooption of a committee member on a vacant seat of the director is an issue before the Nominee and Nominee has jurisdiction so far as the specified societies arc concerned, the Societies Election to Committee rules 1982 Rule that no cooption can be made on a vacant seat of the Moreover, as decided in the case of Bhogilal Patel v/s Yusuf Gaziawala reported in 1971 (XII) G.L.R. 215 nominated director by institution or by the Government should not hold disqualification as per the Act, Rules and bye-laws

The jurisdiction against the legal heirs of the deceased member :
In a money suit, the legal heirs of the deceased are covered under, section 96(1) (b) but the real question is the limitation regarding the liability, of the deceased. As regards the limitation for the dues of the society from the member, Section 34(a), the liability of the member is unlimited and Sec. 34(b) prescribes limited liability for a period of three years in case of the liability of deceased member for the debts of the society to the third party. This has been interpreted in details in 27-CTD-81, 3.2-CTD-262.
However, the liability of the legal heirs shall attach to the estate of the deceased as per the section 34 as well as CPC Sec. 50(2). In short the limitation is liberal and unlimited against the heirs of the deceased.
However, the liability is limited to the extent of the estate of the deceased.
Annual General Meeting The general Body is supreme authority under Sec. 73 and exercises the powers through general meeting. There are four kinds of general meeting prescribed under the Act and Rules,
(1) First General Meeting under Rule 5
(2) Last General meeting under section 114(3) before cancellation of the society to consider the final report of the Liquidator.
(3) Annual general Meeting under section77.
(4) Special general meeting under section 78 since the general body is supreme authority for internal management of the society; the general body cannot be restrained to function by any kind of stay order against holding of a general meeting
AGM exercises certain statutory functions prescribed under section 77 and also transacts special business like amendment of bye-laws etc, Restraining AGM to conduct lawful business is also violative to article 19(1) (c) of the constitution. The general body should be allowed to consider and contemplate any agenda and ordinarily should be allowed to take the decision by democratic process and thereafter, the decision of the general meeting can only be a subject matter of the dispute. Therefore, normally
instead of granting the stay against considering any agenda it should be allowed to consider and the decision only can be challenged as dispute and examined on merits. However, purely unlawful agenda may b8 restrained e.g. if the society wants to consider an agenda to start a business prohibited by law like smuggling etc.
In short an agenda in general meeting cannot be restrained and members should be free to consider any agenda by a democratic process and the decision only should be made a subject matter or the dispute under section 96 and a dispute regarding the agenda is premature before actually passing through a democratic process of decision making.

Rights of a member in Housing Society in Gujarat

By Gujarat Bureau

Introduction
The Cooperative Societies Act Embraces a wide range of economic activities through District Cooperative Banks and primary agricultural societies for agriculture credit, urban cooperative bank for nonagricultural credit, primary dairy cooperatives and the unions for dairy activities, housing societies, consumers cooperatives etc, . The public at large deals with the cooperatives and many a times they are associated with some cooperative societies as members. Therefore, it is important to know about the rights of the members in a cooperative society.

Rights to Become A Member
The first and fore most important question is to consider the right of a person to become a member in a cooperative society for which Sec. 22 and Sec. 24 are relevant and important under GCS Act. The right to become a member is not recognised as fundamental right under constitution, since the cooperative society is not the State within the definition of article 12, as per the reported judgment in AIR! 1988- Kerala-75. As per the judgment of Hon’ble High Court Division Bench reported in 25(2) GLR 1244 the fundamental right of the cooperative society under article 19(1)(c) is recognised for the society to decide whom to associate and whom not to associate. Therefore, the amendment of GCS Act of 1982 is
declared as violative of article 19(1) (c) 2nd struck down as ultra-vires to the constitution.
Right to Continue As Member The powers of admitting a member are vested with the managing committee under Rule 33(1) but similar powers are not vested in the managing committee for removal of a member or expulsion of a member. The powers of expulsion of members are vested with the Registrar under Sec, 36 subject to appeal under Sec.153 and revision u/s 155. However, annual general meeting is vested with the powers under section 36 to initiate the proceedings of expulsion with no power of conclusion. The member once admitted cannot be dismembered except by due process of law u/s 11, Sec. 23. Sec.36 only by the Registrar subject to appeal under Sec. 153 and revision application under section 155. Therefore, the rights of members continue are protected by the law by providing remedies for any arbitrary action by the society and the society is not vested with any final powers of removal or expulsion.

Voting Rights of Member
Voting right of a member is conferred u/s 28. Here in this case, as against the companies, the voting of member is restricted only one vote irrespective of his share holding. It is important to note the words “no member of any society shall have more than one vote in its affairs under Sec. 28(1).
Therefore, there is an indication not to have more than one vote for a member, at the same time, there is an indication to have less then one vote by enabling provisions under section 27 under which the right of members can be restricted by the rules or by the bye-laws. Restrictions on the voting right of the member in case of default, in a credit society or in case of primary milk cooperative societies to supply prescribed quantity of milk may be provided in the bye-laws For restriction of exercise of the membership rights such restriction by the bye-Laws are consisted with Section 27, and, as a result not inconsistent with Section 28. This has been held by Gujarat. State Cooperative Tribunal in appeal NO.1
10/73 and recently in revision application NO. 136/96 decided on 4-12-96.

Right to Contest Election of the Committee Members
The right to contest the election is not unfettered right of a member and the same is restricted by operation of Rule 32 when provides for qualifications and disqualifications. More particularly Rule 32 (1 ) (c) gives a scope further to provide qualifications are and disqualifications in the bye-laws: over and above, the other qualifications and disqualifications under Rule 32, since Rule 32 (1) (C) reads as under.
“If he is not otherwise disqualified for being, appointed as such members”.

Right to Participate in AGM
As per the Chapter VII management of a society in GCS Act.1961 Sec. 73. final authority of society shall vest in the general body of the members in general meeting. Therefore, members has right to participate the general meeting particularly annual general meeting u/s 77 and special general meeting u/s 78. The member exercises control over the management of the society by participating in the election process to elect ,committee. Members and thereafter reviewing their performance in AGM in which balance sheet, annual, report auditor’s report etc. are placed for discussion and approve. The procedure of participation of the member in AGM may be left to be prescribe under the bye-laws
consistent with Act and Rules. AGM is empowered to adopt the bye-laws after registration as per rule 5 and to amend the bye-laws under Sec. 13 read with rule 6

Right of Members to See Books as Per Section No. 33
Section 33 is very important and, therefore, the same is reproduced herein below:
Section 33(1). Every member of a society shall be entitled to inspect free of cost, at the society’s office during office hours or any time fixed for the purpose by the society, a copy of the Act. the rules and the bye-laws the last audited annual balance sheet. The profit and loss account a list of the members of the committee, a register of members, the minutes of general meetings, and those position of the books and records in which his transactions with the society have been recorded.
“(2) A society shall furnish to a member, on request in writing and on payment of such fees as may be prescribed therefore, a copy of any of the documents mentioned in sub-section (1).”
It is important to note that similar Sec. 40 also repeats certain items as public documents which is also reproduced herein below:
Section 40 “Every society shall keep, at the registered address of the society, a copy of this Act and the rules, and of its bye-laws and a list of members open to inspection to the public, free of charge, during office hours or any hours fixed by the society therefore.”
The most important item is the bye-laws which is made public document U/S 40 so that the publics while dealing with the society can appreciate the powers and limitation of the office bearers analogous to Memorandum of Association and Article of Association under the Company Law.

Right to File Suit Under Section 96
A separate forum is provided under the Act called Board of Nominees before whom the member can file the dispute-cum-suit. This is an important right of a member of the society not only to challenge the actions of the society which really touch him, but also broadly any dispute touching the constitution, management or business of a society. Therefore, the question of locus standi does not arise in case of a member- challenging any action of the society. This questions is much more important in election
dispute wherein the member can challenge the election as an ordinary member though he may not be contesting candidate. In some of tile election laws, the right to challenge the election is given only to a contesting candidate and not to an ordinary voter. The same concept applies to the election of a specified society as per Rule 75 of Gujarat Specified Cooperative Societies elections Rule 1982. Herein Rule 75 the words by any candidate or any voter are used which means voter is also enabled to file a petition. Ail the voters may not be member, but most of he members are voters and what is emphasized
is that the right is conferred to an ordinary voter in addition to contesting candidate. Therefore, the member can vote in election and participate in annual general meeting and can challenge any illegality committed by the society touching the constitution, business or management of the society. The democratic process of Rule of majority does illegally to continued without any remedy for minority of an ordinary member.

Right to Transfer Interest of The Member in A Society
Section 30 and 31 regulates the right of a member to transfer share held by him as member. The legal heir does not automatically become a member unless his application for membership is accepted by the society. However, in case of housing society, the application of the legal heir should ordinarily be accepted since the principle of open membership as per section 24, read with Rule 12(2) applies. Rule 12(2) is held intravires to the constitution and the principle of open membership is held good by the Hon’ble High Court a reported decision in 36-GLA-Page-19 in a case of jain Merchants Cooperative
Society.

Conclusion
The rights of the members in a cooperative society are more important to know for the members, but at the same time more default to get protected against the society since the member has to right has litigation at his own costs and the society can fight at the costs of public money i.e. the money of the society. The rights of members are coupled with duties and liabilities for which a separate article may be required to deal with and therefore the scope of this Article is restricted to the rights only without touching the other part.

Election Rules in Housing Societies in Gujarat

By Gujarat Bureau

Introduction
Co-operative Societies are body corporate under Sec. 37 of. Gujarat, Co-operative Societies Act. and as per Sec. 4, the object of the Co-operative society is the promotion on of the economic interest for general welfare of its members or of the public in accordance with co-operative principles and one of the co-operative principle is the democratic structure of the organization. Under Sec. 28, every member has a right to vote, but the right to vote is restricted to one vote as against. the company. where the voting power is decided by the shareholding whereas in the case of the co-operative societies, every
member has only one vote irrespective of shareholding. Therefore, all members are equal in voting power irrespective of their contribution in share capital or participation in the business society.
Therefore, the election law for the cooperative society is materially the same as the law laid down under Representation of the People Act and the judgments of various High Courts and Supreme Court are equally applicable in the case of Panchayat, Municipality, Municipal Corporation etc.. for which the statute governing their election is also adopting the broad principles of Representation of the People Act and the election is conducted by public authority, i.e. the Collector Similar provision are incorporated for the specified societies enumerated in Sec. 74-C. for which election is conducted as per Chapter XI-A and the rules made under Sec. 145- Y read with Sec. 168, which are know as Gujarat
Specified Co-operative Societies Elections to Committee Rules. 1982. For the specified societies, these rules Chapter XI-A and the relevant provisions of amending Act, particularly Sec. 74-C, are identical as in the case of Maharashtra Co-operative Societies Act. Most of the provisions are parallel to Representation of the People Act. either in Chapter XI-A or the Rules made there under. With this background, we may examine the difference in the: election law as applicable to the co-operative societies and the extent to which the same is different. 2003(1) GLR-432 Nanubhai Vaghani v/s statesec-145. It is obligatory to hold election one month prior to the date of expiration of term.
Election Dispute Pending the Election Process The problems for the disputes arising out of election can be broadly discussed in two categories. Once the election program is declared. the election process is set in motion and in any intermediate process before polling, counting and dedication of result, whether any dispute can be raised and whether
election process can be restrained. In the case of election law in general, i.e., under Representation of the People Act, and election of Panchayat, Municipality. Municipal Corporation etc. under relevant stature cannot be restrained and the suit is premature before the election process is concluded by polling, counting and dedication of result and election petition shall only lie before appropriate Court, after the declaration of result. Similar provision is made for specified societies under Sec.145-U for the election petition to be filed before the Gujarat State Co-operative Tribunal, wherein specific provision
is made that no such petition shall be made till after the final result of the election is declared. In the cooperative societies, in general, there are bye-laws and in some societies, there are election rules in addition to bye-Iaws framed under the bye-laws for regulating the procedure for election. Generally, managing committee i.e., the Board of Directors, is vested with the power to appoint Election Officer, who may be an officer of the society of high rank like Manager, General Manager, Secretary etc. and in some cases; there is a provision for a sub-committee for holding the election. ,It is, therefore, likely to
be influenced by the Chairman and managing committee members, who are in position and power, and therefore, the election process is not impartial in all cases as expected. In many co-operative societies, in the election process, there are large number of wrongful rejection, and thereafter some withdrawal resulting into uncontested elections. Therefore, election dispute can be raised under Sec. 96 before the election process is concluded and in appropriate case, election process can be restrained also. The suit is not premature and can be entertained under Sec. 96 of the Gujarat Co-operative Societies Act and to
that extent the provision of Representation of the. People Act are not applicable. This view was taken by Hon’ble Gujarat High Court -1975 ‘GLR 1058 (equivalent to AIR 1975 Gujarat 105) in the case of Shrikrishna Gopal Joshi v. Anyonya Sahakari Mandli Co-operative Bank Ltd. and Ors. The same view is confirmed in 1996(1) GLH 212: (1196(1) GLR 586) in the case of Ramchandra Bhagwanjee Desai v. Gulabbhai Desai and Ors., in Head Note (A) by holding that the suit relating to election dispute can be filed and entertained oven before the declaration of result of election and Sec. 97 is not controlling Sec. 96 to curtail the jurisdiction ccnferred on the Registrar to entertain the suit. Section 97 provides for the
limitation of the election dispute, i.e., two months after the date of declaration of result. However, the dispute can be entertained before the declaration of result. The situation is now different in the case of specified societies under Sec. 74-C, for which election is held under Chapter XI-A and the petition cannot be entertained before the declaration of result under Sec.74-C as specified societies are large ,societies and their ejections are sensitive, and therefore, they are entrusted to the Collector under Chapter XI-A so as to minimize the irregularities in the election and conducting free, fair and impartial election by independent public authority not connected with the affairs of the society.
Bye-laws of the Society and Ejection Disputes Chapter VII of Gujarat. Co-operative Societies Act titled as “Management of Societies” starts with Sec. 73, which provides that the final authority of every society shall vest in the General Body of the members in General Meeting summoned in such a manner as may be specified in the Bye-laws. Section
74 also provides for the management of every society to vest in a committee constituted in accordance with this Act, the Rules and the Bye-laws. Rule 5(2)(n) provides for making bye-laws in the matter of Constitution and election of the managing committee and its powers and duties. Rule 32(1)(c) leaves a  scope for additional qualifications to be prescribed under the bye-laws. Section 145-Z also refers to bye-laws. Therefore, bye-laws are very important in the constitution and election of the managing committee and its powers and duties. Therefore, the question arises whether bye-laws can be enforced
by the Hon’ble High Court under-the writ jurisdiction under Ar1s. 226 and 227. Whether bye-laws have got any statutory force. It was held by Hon’ble Gujarat High Court in 1973 GLR 786 in the case of Lambha Seva Sahakari Mandli Ltd, Ahmedabad and Ors. v. District Register and Ors. that bye-laws are in terms referred and cited in any provision of the Act they are rewritten in the section and the section could not be read without the language of the bye-laws being rewritten therein. Therefore Sec 7.4. must be treated as creating statutory powers and statutory duties of the managing committee. Hon’ble High
Court can exercise writ jurisdiction under Arts. 226 and 227. This view of the Hon’ble Gujarat High Court was dissented in the judgment reported in 1976 GLR 583 in the case of Rajabhai Ranmal Mori and Ors v. Shri Una Taluka Sahakari Khana Vechan Sangh Ltd. and Ors. It was held by Hon’ble High Court that the bye-laws of co-operative societies governed by Gujarat Co-operative Act, 1961, have their origin in contract, and therefore, they do not have a force of a statute and like a Articles of Association of a company, they constitute a contract between the parties. Therefore such bye-laws of a
co-operative society could not be enforced bye writ of the High Court under Art. 226 or 227 of the Constitution in this judgments Hon’ble High Court in Special C.A. No.1005 of 1965 is referred in para 7 The same view is reiterated in AIR-1984 SC 192 holding that bye-laws are neither statutory in character nor having statutory flavour. These two judgments are referred and reconciled by Hon’ble Gujarat High Court in a judgment reported in 1977 GLR 692 in the case of Rajkot Nagrik Sahakari Bank Ltd. v:. Rajkot District. Co-operative Bank . Ltd. and Ors. Hon’ble Gujarat High Court in this
judgment, has held that it would not be open to member of a co-operative society to approach the High Court involving its writ jurisdiction under Art. 226 to enforce a bye-laws which has its origin in contract by writ of Mandamus;. For a co-operative society is not a statutory body against which a mandamus lies and the concerned member has no legal right to the performance of a legal duty by the society. What is true, however, in the context of a writ of Mandamus in a proceeding under Art. 226 would not be true in the context of writ of Certiorari in a proceeding under. Art. 227 it was held in this
judgment that the misreading of bye-laws by the Tribunal is an error of law, which can be corrected by a writ of Certiorari under Art. 227. Therefore, the latest view with reference to bye-laws expressed by Hon’ble High Court in 1977 GLR 692 has the effect of reconciling of two judgments of Hon’ble Gujarat High Court reported in 1973 GLR 736 and 1976 GLR 583. Therefore, if the Registrar or the Nominee or the Tribunal arrives at a conclusion by misreading of bye- laws the same can be interfered by a write of Certiorari under Art.227 by Hon’ble High Court and view is further followed in 1996 (1) GLH 753 in case of Ranuj Nagrik Sahakri Bank Ltd. and Ors. v. State of Gujarat and Ors. 1975 – GLR 1058 as
mentioned above. Is a landmark judgment differentiating the scheme of Gujarat Cooperative Societies Act with Representation of the People Act.

Restraining Election Process
The general law of Representation of the People Act does not permit election petition for restraining the election process and the same is case with specified societies under Sec. 74-C, for which election petition lies before Tribunal under Sec. 145-U only after the declaration of result and no petition before the declaration of result is maintainable. However, in case of other societies, the law land down by Hon’ble Gujarat High Court in 1975 GLR 1058 (equivalent to AIR 1976 Gujarat 105) holds the field.
The suit prior to declaration of result is maintainable and the same view is confirmed again in 1996(1) GLH 212 equivalent to 1996(1) GLR 586. In the above judgment, it is further held that the Court can Interface with the process of election and the general principle that once the erection starts, the courts are produced from interference with the process of election till the result is declared, is not applicable for the Board of Nominee under the Gujarat Co-operative Societies Act. In a Division Bench judgment reported in 1971 GLR 138, it was held by Hon’ble Gujarat High Court that in the election law, approach
of Court should be to see the eligibility or qualification of candidate and to see the will of the people not polluted by corrupt practice. It was also further held that no technical irregularity should hamper will of the – people. What is essential is purity and eligibility. Therefore, there is a strong reason, which would justify exercise of restraint in the matter of setting aside the election when it is questioned on grounds, which do not touch the essential factor of purity and eligibility. Secondly, election involves considerable expenditure of public revenue and resulting great inconvenience and loss of public time.
There would be good reason, therefore, for not setting at naught the election, which reflects the true will’ of the people some non-essential failure or defects.’ Though this judgment refers to setting aside the election in the trial for procedural irregularities not touching purity and eligibility, the same applies for restraining election process in the ca-se of co-operative society, for which filing of suit is permissible under law before the declaration of result. Therefore, Court should be slow in granting injunction against holding of elections. According to the judgment of Hon’ble Gujarat High Court, reported in 1982(1) GLR 611, there is provisional finality in matters pertaining to the various stages of
election, for which the relevant para 6 is reproduced below:
“(6) It is a well recognised principle and a matter of public importance that elections should be conducted as early as possible according to the time schedule, and all controversial matters as well as dispute arising out of the elections should be I postponed till after the elections are over so as to avoid an impediment or hindrance in the election proceeding. In other words, there is a provisional finality in matters pertaining to the various : stages of elections.”
Right to vote and right to contest are important right of a member in a cooperative society. Therefore, in a fit case of wrongful rejection election process can be stayed. In case of irregularities of voters list when there is a provision of election programme for publication of provisional voters list and making it final upon inviting objections and representations, provisional finality of the decision of election officer should be considered, However, if elections officer has proceeded on misreading of bye-laws, excluding large number of voters, then the election process can be restrained as per example, if the voters list as on 31-3-1996 is relevant and the voters list as on 31-3-1995 is operated of extrusion of
large number of voters, the same can be a ground for setting aside the election after it is held and it can also be the ground to restrain the process if the suit is filed before the date of polling. This was recently considered by the Gujarat State Co-operative Tribunal Appeal No. 202 of 1996 in case of Ranuj Nagrik Sahakari Bank Ltd. In the case of wrongful acceptance of nomination, the election process should normally not be allowed to be restrained even if the suit is filed before the date of polling since the acceptance nomination will allow one more candidate to contest election and election process should be interfered only in extreme cases where there is an error of law apparent on the face of record net requiring much of appreciation of evidence.

Rejection and Acceptance of Nomination
Acceptance of nomination and rejection of nomination touches the important right of member to contest the election. The suit challenging the wrongful acceptance or wrongful rejection before the election process is completed is not premature and is maintainable as discussed above as per the judgment of Hon’ble Gujarat high court reported in 1996(1) GLH 212. Rejection of nomination is a better ground for restraining the election process than wrongful acceptance of nomination in a suit filed before date of polling. Rejection of nomination of large number of candidate together with withdrawal of nomination may result into declaration of successful candidate as uncontested and this situation in
appropriate cases may be even fit situation to restrain the elected candidate. Except the fact that the suit is maintainable before the date of polling the election law for rejection of nomination in the case of cooperative societies, is the same as the election law in case of co-operative societies, is the same election law in case of Representation of the people Act. in the case of acceptance of nomination, when alleged to be a wrongful acceptance and the election is thereafter held, the elected candidate may not be restrained to. function. Rejection or nomination is more serious taken than acceptance of nomination,
since the rejection of nomination deprives right to contest. In a reported judgment of AIR 1995 Kerala 229, Head Note B. C and D arbitrary and erroneous rejection of nomination by returning officer can be quashed In petition under Art. 226. It IS held In this judgment by Hon’ble Kerala High Court that the rejection of nomination on the ground of non mention of date of election is illegal since the date of election is know everybody’. Rejection of nomination on the ground that column for signature and date In attestation from in affidavit was left blank, is also held to be illegal since the attesting officer has
written the date and there is an attestation of signature. Approach of Courts in election matters discussed in Division Bench judgment reported in 12 GLR and therefore, technical irregularity should not hamper the will of the people and the essential factor, which should be considered for setting aside the election is the factum of purity and eligibility. In a judgment of Hon’ble Gujarat High Court reported in 1968 GLR 9 it is held that candidate kept out of election, there is a presumption that the election is materially affected. Therefore in case of wrongful rejection, it is not required to be proved that election s materially affected since there is a presumption in favour of election being materially
affected. In case of specified/society also), Gujarat Specified Co-operative Societies Election to Committee Rules, 1982, Rule 82(c) does not require it to be proved that the election is materially affected. The question of proving whether the result of the election -has been materially affected is required to be proved in case 0f grounds specified in rule 82(d). Election has to be declared as void when there is improper rejection of nomination papers, is also held in Head Note A of reported judgment of AIR 1976 SC 2130. In a Maharashtra Co-operative Tribunal decision reported in 7 BCT 6, it has been held that when a person has a right to contest the election and when that right is denied to
him by rejecting his right then it amount to causing him irreparable loss.
‘2002 (1) GLR-553 – BK Patel v/s election officer Voting Right of a Member and Voters List Force As per Sec. 28 every member has right to vote, and therefore, the list or members would be generally a list of voters list in the case of primary Co-operative society. In the case of federal co-operative society, the list of voters. will include the names of affiliated societies together with their representative, who are appointed by the resolutions of the respective affiliated societies for appointing them as representatives. In the case of federal societies, the representatives of individual members are through the system of delegates. The number of delegates in a federal society representing in the general body
as well as the number of committee members representing delegates are restricted by Rule No. 15 and bye-law contrary to Rule 15 is invalid, as per reported judgment in 16 GLR 382. As compared to Companies Act. there is no provision of proxy for exercise of voting right of a member. As against the companies there is no provision for voting rights in proportion to the investment for share capital and every member has got only one vote irrespective of share capital investment or participation in the business of the society. Question is, therefore, raised now whether voting right of a member can be restricted by making a provision in . the bye-laws, such as the defaulter member cannot exercise the
right to vote. By combined reading of Sec. 27 and Sec. 28. it follows that the provision of voting right under Sec. 28 is limited to one vote and language is that no member of any society shall have more than one vote, and therefore, he may have maximum one vote or no vote in case certain condition, which may be laid down in the bye-laws. It is therefore held by-The Gujarat State Co-operative Tribunal In Appeal no. 10 of 1973 and also in Revision Application No. 136 of 1995 that the provision of such byes restricting in the voting right is not inconsistent with Sec. 28 Therefore, bye-laws call restrict the voting rights of a member. The system of delegates of individual members is generally prevailing in the case of default societies where representation of affiliated society is given more
weightage in the General Body as well as managing committee as per Rule 15. However, in the case of other societies, which are not federal societies, the system of delegates is not generally prevailing. Still, however, the system of indirect election provided in the bye-laws made under the Act was held to be not vocative of the Act. In a reported judgment of Patana High Court, reported in 2 co-operatives cases 215, in para 11, the principle of contemporanea exposition was applied for the interpretation of the Rules, which was interpreted for several years in past. Therefore, the bye-laws where given effect for
the interpretation of voting rights and restricting the voting rights, in the above judgment.
Since every member has a right to vote, the list of member would generally be identical with the voters list except for the case of federal societies wherein the names of the representative appear with the, name of the, society. Whatever detects and deficiencies remaining with the members register maintained as per Sec. 39 will be reflected in the voters list. If there are restriction on the voting right prescribed under the bye-laws. the voters list will affected to that extent. It is a normal experience that a perfect voters list is never possible since the members who died will also appear in the voters, list unless a procedure for appointing legal heir is completed. In absence of any communication about the death of the member to the society, the society will prepare the voter list per the record. Therefore, in these circumstances, there is always a provision for preparation of provisional list of voters. Suct1 a provision is their in the Gujarat Specified Co-operatives Societies Elections to Committee Rules. 1982 for specified societies wherein the procedure for provisional list of voters is prescribed in Rule 5 and Inviting claims and objections and finalising voters list is prescribed in Rules 6,7, and 8. For other societies, the Act or Rules are silent in case of Gujarat Co-operative Societies Act and the same is left to bye-laws.

Restraining Elected Candidate to Function
In the general election law, it has been made very clear that the election can be challenged by election petition after the election is over and elected candidate cannot be restrained to function till the election is set aside by trial. The same view was expressed by Hon’ble High Court by Division Bench is S.C.A.
No. 3255 of 1995 that the Tribunal has no jurisdiction 10 entertain any application for injunction under Sec. 145-U of Gujarat Co-operative Societies Act. Similar view is taken by Hon’ble Bombay High Court in reported judgment in 1982 CT J 74. The most important judgment in this direction is 21 (2) GLR 1. a Division Bench judgment in Somabhai Kacharadas Patel. v. Patel Becharbhai Shambhubhai and Ors. This judgment pertains to Gujarat Municipalities Act. but is equally applicable in the case of G.C.S.. Act. particularly when there is actual polling, counting and declaration of result. In this judgment, Hon’ble High Court has held that the Election Tribunal has no power to issue injunctions under Order 39, Rules 1 and 2 and no implied powers also. In a co-operative society, the result of the election is taken note in the General Meeting. It was held by Gujarat State Co-op. Tribunal in 18 CTD 75 that taking note of the result cannot change the result and the elected Directors cannot be restrained to function on that ground, and the result declared by the election officer is final unless it is challenged by an election dispute and is set aside by trial.
The settled position of election law is that the elected committee member, i.e., directors, cannot be restrained to function. However there are certain exceptions to it and the. elected Directors may he restrained to function in a rare case very cautiously and not lightly. It was held by Hon’ble Supreme Court in AIR 1954 SC 210 that tile election held in fragrant breach of law is invalid. Therefore, if there is a patent illegality in the election process, which is so apparent and glaring and not requiring any elaborate evidence, then the elected candidates can be restrained to function. It there are large number of wrongful rejection of nominations followed by few withdrawals resulting into uncontested elections,
such an election is sham and bogus and may require to restrain the elected Director to function. If the election is conducted by show of hands by writing a proceeding to that effect, and when the Act, Rules or Bye-laws require a particular procedure of publication of election programme, then such election is no election and elected Directors may be restrained to function. Therefore, when the bye-laws require a particular procedure to be followed and the same is not followed with ulterior motive of taking away right to contest or right to vote the election so held will be patently illegal and the elected Directors
may by restrained to function. In 1974 CLR 247, in a case before Hon’ble Punjab and Haryana High Court. the election of managing committee was held, but the Rules required appointment of presiding returning officer by Registrar and the approval of election programme by the Registrar and ,these provisions were mandatory and were not followed and therefore, the election was held illegal and the action of the Registrar for appointment of Administrator was held legal proper. In similar case before Punjab and Haryana High Court, reported in 1974 CLR 251, the same view was taken since the election programme was not approved by the Registrar as required under the law.

Automatic Cessation
Rule 32 provides for disqualifications of the member of the managing committee. i.e., Board of Directors. The title of Rule 32 is “qualifications” but there are disqualifications prescribed under the same. It was held consistently by Gujarat State Co-operative Tribunal in 28 CTD 10 that automatic cessation provided under the bye-laws is invalid. However, the same was overruled in 32 CTD 365 in Revision Application No. 210 of 1993. Rule 32(1) (a) to (g) apply for eligibility for appointment as a member of a committee and Rule 32(1) (A) provides for subsequent incurring of disqualifications, in which a member of the committee shall vacate the officer, is important to hold in favour of automatic cessation. Rule 76(B) also provides for removal of a committee member. In 1987(1) GLR 602, it was
held that the person removed under Sec. 76(B) can be ordered to be disqualified under Sec.75(8)(2): However, if the officer is not removed, he cannot be disqualified under Sac. 76-B(2).

Conclusion
The election law, in general. 2S per Representation of the People Act, is equally applicable to the specified societies under the Amending Act of 1982. The election law for other societies will be different only because the election officer is appointed by the existing managing committee and likely to be influenced by the present management. Since elections of ordinary society attracts is the Constitution of the society, the dispute lies under Sec. 96 and the limitation as prescribed under Sec. 97 for the election dispute after the date of declaration of result within a period of two months is not controlling provision as against Sec. 96, and therefore, the election dispute is not premature in the case
of ordinary society election whereas in the case of specified society election petition is not
maintainable before the result of the election. The election of the co-operative society is also different because the bye-laws of Co-operative satiety play an important role since the bye-laws are incorporated in Sec. 74 and bye-laws are made in pursuance of Rule 5(2)(n), In some societies, there are election rules framed under the bye-laws. Though byelaws are in the nature of contract having no statutory force, but the effects of bye-laws is much more than a binding contract since the same is registered by the Registrar under See, 13 in case of amendment and the original bye-laws are registered at the time of
registration under Sec.9. Therefore, bye-laws cannot be ignored or misread in the original proceedings before the Nominee and can certainly be interfered in the writ jurisdiction of Hon’ble High Court by a writ of certiorari under Art. 227 as per the decision reported in 1977 GLR 692 and 1996(1) GLH 753.
Election Petition Before the Tribunal and Election Dispute Before the Board of Nominee
Normally the election dispute lies before the learned Board of Nominee under Sec. 96 of G.C.S. Act, since the same touches the Constitution of the society. However, in the case of specified societies, the, jurisdiction for the election petition is conferred upon the Tribunal under Sec. 145-U with a clause notwithstanding anything contained in Sec. 96 or any other provisions of this Act, any dispute relating to an election shall be referred to the Tribunal. Therefore, the election ,disputes, which are covered under, Sec. 145-U are referred to the Tribunal and those, which are not covered under Sec. 145-U still
remain with the Board of Nominee. The definition of the word “election” is given in Sec. 145-B(b) to appreciate the position in a better way, Sees. 145-A, 145-B(b), 145-U(1) and 145-Z are reproduced as under:
“145-A . All Section of this Chapter except Section 145-Z shall apply to elections to committee of societies belonging to the categories specified in Sec. 74C”
“145-B(b). “Election” means election of a member or members of the committee of specified society”.
“145-U (1). Notwithstanding anything contained in Sec. 96 or any other provisions of this Act, any dispute relating to an election shall be referred to the Tribunal”.
“145-Z. (1) This section shall apply only to election of officers by members of committees of societies belonging to the categories specified in Sec 74C.
(2) After the election of the members of the committee whenever such election is due. the election of the officer or officers of any such society shall be held as provided in its bye-laws, but any meeting of the committee for this purpose shall be presided over by the Collector or an officer nominated by him in this behalf.
Reading of above sections imply that the definition of “election” in Sec. 145B(b) does not apply to Sec. 145-Z and therefore, the dispute relating to Sec. 145-Z will remain with the Board of Nominee as the original jurisdiction and the Tribunal will have revisional jurisdiction under Sec. 150(9).
In he case of federal societies, he representation of individual member is restricted by Rule 15, and therefore any provision in contravention to Rule 15 made in the bye-laws will make the bye, laws ultra vires to rules, and therefore, such bye-laws will be illegal as per the judgment of Hon’ble Gujarat High Court reported in 1973 GLR 382. In the case of federal society having affiliated society as its members, the representative of the affiliated society will be nominated by the affiliated society by a resolution and the voters list of the affiliated society will contain the name of the societies as well as the names of the representatives. If the federal society is also a specified society the Collector conducting the election will accept the resolution of the society end any dispute relating to the resolution for nominating the representative of the federal society can be challenged. by election dispute before the nominee.

Election of a Specified Society
The amending Act of 1982 made a provision for specified societies under Sec. 74-C for which ejection is conducted as per Chapter XI-A and Gujarat Specified Co-op. Societies Election to Committee Rules, 1982. Since the election is conducted by the Collector and the provisions are analogous or identical to those of the Representation of The People Act, and other Acts, for which the election is conducted by Collector, the election law is identical in nature for specified societies. The list of specified societies is such that it includes all sensitive co-operative organisations like all primary land development banks, all Dist. Co-operative Sale and Purchase. Organisation Co-operative Milk Unions, Taluka Co-op.
Processing Societies. The advantage of including a type of society as a specified society that the election is, conducted by public authority like Collector and therefore, there IS a free ‘and fair election.
The second advantage is provided in the law under. Sec. 145-U that the election petition cannot lie before the declaration of the result, and therefore, the election dispute are minimized and referred to a level higher than the Board of Nominee, i.e., the Gujarat State Co-operative Tribunal and the Tribunal is vested with the original jurisdiction. The State Government under Sec.74 C(1 )(vii) may, by general or special order, include any other society or class of societies. The most sensitive, societies. which are left out are the Urban co-operative Banks, for which the election disputes are now maximum. Since Urban Co-operative Banks are in number involving corers of rupees of deposits of non-members and
the voters are also in most of the more than 10,000. It is necessary to include, then in the list of specified society under this provision.
As mentioned earlier, the provisions of the election of specified society incorporated in Chapter XI-A and Gujarat Specified Co-op. Societies Elections to Committee Rules. 1982 are identical in nature, This can be illustrated by comparative list of some illustrations and the reference of Rule will be Election to Specified societies Committees Rules and reference of section will be that of Gujarat Co-operative Societies Act.

Representation of the People Act, 1951 Gujarat Co-Operative Act, 1961
1. Section 81 : Presentation of petition
1. Rule 75 : Presentation of election petition – Sec. 145-U.
2. Section 82 : Parties to the petition.
2. Rule 76 : Parties to the petition. 3. Section 83 : Contest of petition.
3. Section 145-W : Contents of petition. 4. Section 84 : Relief that may be claimed by
the Petitioner.
4. Rule 145-X : Relief that may be claimed by the
Petitioner.
5. Section 86 : Trial of election petitions.
5. Rule 77 : Trial of election petitions, to some extent. 6. Section 100 : Grounds for declaring
election to be void
6. Rule 82 : Ground for declaring election to be void.
7. Section 101 : Grounds for which a candidate other
than the returned candidate may be declared to have
been elected.
7. Rule 83 : Grounds for which a candidate other
than the returned candidate may be declared to
have been elected.
8. Section 102 : Procedure in case of an
equality of votes.
8. Rule 84 : Procedure in case of an equality of votes. 9. Section 107 : Effect of orders of the High
Court.
9. Rule 85 : Effect of order of the Government.

 

Election rules in Gujarati Download here: 05-Hou-Soc-Election-Bye-LawsGujarat

Voting rights of a member and right to contest election of Housing Society in Gujarat

By Gujarat Bureau

Voting Rights of a Member
As against the company law, the co-operative law provides for a single vote for a member irrespective of his share holding. However, the important question, which is often raised is that whether the voting rights of member can be restricted by the provisions of the bye-laws. In case of credit co-operative societies or the Urban Co-operative Banks, we often find that bye-laws which restricts voting rights of defaulter members and they are not allowed to exercise the voting rights, for which a provision is made in the bye-law. Question is whether such bye-law is consistent with provisions of the Co-operative Act,
in particular Gujarat Act, Sec. 28. In Rule 5(e), the rights and liabilities of the members in consequence of default can be prescribed by bye-laws. Section 27 also provides for restrictions in case of default in payment of dues. Therefore, it was held by Gujarat State Co-operative Tribunal in Appeal No.10 of 1973 and recently in Revision Application No.136 of 1996 decided on 4-12-1996, that such bye-laws restricting voting’ rights are valid and not inconsistent with Sec. 28. In case of primary milk cooperation societies, which are collecting milk from the members and supplying the same to the cooperative union at District level, like Amul and others, the question is also relevant when large number
of members do not provide the milk to the primary milk. co-operative societies and still continue to be a member and still insist upon exercise of voting rights. Model byelaws are, therefore, framed and adopted to restrict the voting rights of members, who do not supply the milk to the society in the prescribed quantity and prescribed number of days per annum. If this is not done, the members who are actively associated in the activity of the society, will go in the hands of management of the members, who are not associated with the activity of the society, therefore, such bye-laws providing for restriction on the voting rights are desirable also depending upon the objects of the society.

Right to contest election of the committee member

The Co-operative Act, in particular. Rule 32 provides for qualifications and disqualifications of the members of the Managing Committee for contesting the election as well as for continuing as members of the committee. This Rule 32, the title mentions about qualifications, but the Rule really describes disqualifications. One of the provision IS Rule 32(1)(c) which reads as follows: “if he is not otherwise disqualified for appointed as such as follows : This has been interpreted to leave the scope for provision of additional qualifications and disqualifications by the bye-laws of the society, in Revision application No. 26 of 1993 and is consistently followed by the Gujarat, State Co-op. Tribunal.

Whether Housing Society Bye-laws have Statutory Force in Gujarat

By Gujarat Bureau

The question came up for consideration before Hon’ble Gujarat High Court in the case of Lambha Vividh Karyakari Seva Sahakari Mandli Ltd., Ahmedabad & Ors. v. District Registrar, Rural & Ors., reported in 1973 GLR 786. in which Hon’ble High Court has held by reading Sec. 28(9), 64 & 74 of Bombay Co-operative Societies Act 1925 that the formation of managing committee and the voting rights of the member to be regulated by the bye-law of the society, and therefore, bye-laws, which are required to be registered and part of the status. It was further held in this judgment: -Therefore to the extent that these bye-laws are in terms referred and cited in any provisions of the Act, they are rewritten in the Section and the Section could not be read without the language of the bye-laws: being rewritten therein. Therefore, it was held by Hon’ble Court that the bye-laws have statutory force and be enforced by writ petition under arts. 226 and 227. This decision was also followed in the judgment reported in 1975 GLR 1058, wherein the rejection of nominations was held to be illegal by Hon’ble High Court by enforcing the bye-laws under writ Jurisdiction. However, the above view of the judgment reported in 1973 GLR 786 was dissented in the case of Rajabhai Ranmal Meri & Ors. v. Members of the Managing Committee of Shri Puna Taluka Sahakari Khan’d Vechan Sangh Ltd. & Ors.,
reported in 1976 GLR 583. Hon’ble High Court in this judgment held that the bye-laws made by cooperative societies have their origin in contract and such bye-laws could not be enforced by a writ under Art. 22G or Art. 227. It was held that they do not have the force of a statute and law like Article; of Association of a Company, they constitute a contract between the parties. Therefore, such bye-laws of a co-operative society could not be enforced by a writ of the High Court under Art. 226 or Art. 227 of the Constitution. In this judgment in para 4, an extract from reported judgment of AIR 1970 SC 245
is incorporated and the relevant portion is reproduced herein below:
” we are unable to accept the submission that the bye – laws of co-operative society framed in pursuance of the provision of the Act can be held to be law or to have the force of law. It has no doubt been held that if a statute gives power to a Government or other authority to make rules, the rules so framed have the force of statute and are to be deemed to be incorporated as a part of the statute. That principle, however, does not apply to bye-laws of the nature that a co-operative society is empowered
by the Act to make the bye-laws that are contemplated by the Act can be merely those which govern the internal management, business or administration of a society. They may be binding between the persons affected by them, but they do not have the force of a statute.”
In the same judgment, para 7 refers a Division Bench judgment of Hon’ble Gujarat High Court tin S.C.A. NO.1005 of 1965 and 1531 of 1965 decided on April 24-25, 1972 in the case of The Gujarat State Co-operative Bank Ltd. v. Ahmedabad District Bank’s State Union & Ors. In AIR 1984 SC 192, para 15, it was held that “they are neither statutory in character nor they have statutory flavour so as to be raised to the status of law.” The importance by bye-laws diluted by the above decisions was raised to its right level in case of Rajkot Nagrik Sahakari Bank Ltd. reported in 1977 GLR 692. In this judgment,
it was held that High Court has powers to issue writ of certiorari under Art. 227 and not a writ of mandamus under Art. 226 enforce a bye-law. It was held that the erroneous Legal proposition, which is the basis of its decision by misreading the bye-laws can be interfered by a write of certiorari under Art. 227. The same view is again taken in Ranuj Nagrik Sahakari Bank Ltd. by Hon’ble Gujarat High Court In decision reported in 1996(1) GHL 753. Therefore, the bye-laws when they are registered can’t be misread while taking a decision. The erroneous decision of the Registrar or the Nominee based on misreading of bye-law is an error of law and can be interfered with by Hon’ble High Court by a writ of certiorari under Art. 227.”

Can Housing Society Bye-Laws be challenged in Gujarat

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By Gujarat Bureau

The validity of bye-laws can be challenged and the validity of amendment can also be challenged under Sec. 153 by preferring an appeal before the Registrar if order is made by the officer subordinate to -Registrar, i.e., District Registrar and if the order is made by the Registrar, Addl. Registrar, Jt. Registrar, then to the State Government. If the party is aggrieved by the order of the; appellate authority under Sec. 153, revision application also lies under Sec. 155 before the State Government. The procedure under Rule 6 are mandatory in nature and have to be followed Amendment of bye-law cannot be
proposed form the President’s desk and it has to be in the agenda with due notice. Therefore. the byelam can be challenged on tile procedural aspect described under Rule 6 for 2 amendment. The validity of the bye-laws can also be challenged if the bye-laws are amended or registered with the approval of the Registrar, who is a statutory authority and also a public authority. In my opinion, the bye-laws can be challenged by raising dispute under Sec. 96, or by a writ petition before the Hon’ble High Court, in addition to the remedy available under Sec. 153, since the bye-laws are in the nature of contact, the
disputes regarding validity of bye-laws essentially touches the business of the society and is a dispute under Sec.96. Since the registration of the bye-laws under Sec., 9 and registration of amendment of bye-laws under Sec. 13 imposed a duty upon Registrar that the same shall not be contrary to the Act and the Rules, the same can be challenged even before Hon’ble Gujarat High Court ,by filing a petition.
In a judgment of Hon’ble Gujarat High Court reported In 1975 GLR 382. in the case of Ambalal Manilal Makwana Khambhat Taluka Sahakari Kharid Vechan Sangh Ltd., Karia & Ors., it was held that the bye-laws of a federal society in contravention to Rule 15 is ultra vires and granting of any sanction by the Registrar to such if legal bye-laws cannot make it valid.

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