Housing Societies started allowing maids and other domestic helps with conditions

By HST News Bureau

Department of Co-operation in Maharashtra issued a circular in June 2020 asking societies to not to stop domestic helps and other servants to enter in the society premises. Due to COVIS-19, majority of housing societies in Maharashtra have stopped entry of domestic helps, couriers and even utility persons like electrician, plumber, delivery boys etc.

On 26th June 2020, The department issued a circular asking societies not to have such restrictions. The guidance issued by the department specifically asked the housing societies to allow the helps and outsiders.

The circular asked societies to not to frame rules and restricting people entering the societies.

No Confidence motion against housing society office bearers

By Legal Cell

Motion of No-confidence can be passed by simple majority of

Committee Members Bombay High Court Clarifies the Position

The unamended section 73-ID indicated that the requisition for special meeting in response to a motion of no-confidence was required to be signed by not less than 1/3rd of the total number of members of the committee who are entitled to vote, the quorum for such a meeting was required to be 2/3rd is a fraction it was to be rounded off to the next higher number and finally the amendment, as made by the Maharashtra Act 7 of 1997, the situation has changed so far as it relates to the motion to be passed by majority and the “word 2/3rd majority” has been replaced by the word “simple majority”.

This was stated by Justice B.M. Marlapalle and Justice D.S. Zoting of the Bombay High Court, allowing the writ petition filed by Jayprakash Raosaheb Salunkhe and other vs. states of Maharashtra and others.

The facts of the case were as follows : The petitioners claimed to be the member of the Managing Committee of the Trimurti Stalkply Sahakari Sanstha, Ltd., Basmant, Taluka – Basmat District Hingoli, which is a registered Co-operative Society under the provisions of the Maharashtra Co-operative Societies Act, 1960. The respondent no.4 was the Chairman of the said Managing Committee and other respondents were members of the Managing Committee. It was contended that total members of the Managing Committee were 15.

On 10th April, 2000, the Petitioners submitted a motion of no-confidence before the District Deputy Registrar against the respondent no.4, the Chairman in the prescribed form and ac- cordingly the District Deputy Registrar (Respondent No.2) issued notice on 16th April, 2000 to all the members of the Managing Committee informing them that a special meeting of the Managing Committee to discuss the motion of no-confidence and to vote on the said motion was called and fixed on 24th April, 2000. Along with the requisition of no-confidence the list of the Managing Committee members was also submitted by the petitioners-requisitionist.

On 20th April 2000, the Petitioner no.1 submitted a representation to the Respondent no.2 (DDR) inviting his attention to the amended provisions of section 73-ID of the Act, to the effect that the motion of no-confidence was are required of the total number of the Managing Committee members who were entitled to vote at the election of such Managing Committee and the Provisions of Rule 57-A(7)(a)(III) of the Maharashtra Co-operative Societies Rules 1961would not operate. In the meanwhile, the meeting as fixed y the respondent no.2 was proceeded on 24th April 2000 and the respondent no.3 as directed by respondent no.2 by a specific order, presided over the said meeting. Respondent no.3 passed an order on 24th April 2000, stating that as required under rule 57-A (7)(G)(III) of the rules, the 2/3rd members of the total members entitled to vote were not present and the motion of no-confidence was rejected. The petition was therefore amended and the order passed on 24th April 2000 by respondent no.3 was also challenged.

The counsel appearing for the respondent no.4 took objections to the maintainability of the petition on the grounds that (1) the petition involved disputed questions of fact (b) petitioners had an alternative and efficacious remedy under section 91 of the Act to approach the co- operative court byway of a dispute etc.

The counsel for added respondent urged that there was no anomaly or inconsistency be- tween the amended provisions of section 73-ID of the Act Rule – 57 – A (7)(G)(III) of the rulesand in any case it was not the function of this (High) Court to declare the provisions as incon- sistent or to make laws.

Both the counsel endeavoured to impress upon the High Court that the provisions of section 73-ID(1) of the Act and Rule –57-A(7)(G)(III) of the Rules operated in different areas viz. for passing the resolution by simple majority ; Provisions of section 73-ID of the act are required to be considered and for deciding the quorum for the special meeting called by the Registrar by following the provisions of Rule 57-A of the Rules, the provisions of sub rule (7)(9)(iii) were required to be followed and in short there was no conflict between there two provisions.

The counsel for the petitioners submitted that the action of Respondent no.3 in insisting on 2/ 3 majority as a quorum for the meeting was illegal and the quorum for the meeting was to be decided in keeping with provisions of bye-law no.G.3.2. of the said societies bye-laws, which had been duly approved by the competent Authority. On this point the High Court observed that it was well settled by a cater of decisions that provisions of bye-laws were not statutory in nature and they did not have an overriding effect on the provisions of the Rules, though no doubt, they were referred to an relied upon for the matters for which there was no provision in the statutory Rules and therefore, the High Court was not impressed by the submissions of the counsel of the petitioners, that the quorum for the special meeting scheduled on 24th April 2000 ought to have been followed in keeping with the provisions of Bye-law No.G.3.2. of the Bye-Law of the said society.

The High Court in its judgement quoted fully section 73-ID of the Act (motion of no confidence against officers of Societies) and observed that Rule 73-ID(I) in the original scheme Pro- vided for 2/3rd majority and the said words simple majority by an amended by the Housing Act 7 of 1997.

The High Court observed that if bye laws be mad to the provisions of section 73-ID of the act, it must be held that for the meeting which are called by the Registrar for discussing or for holding vote on the motion of no-confidence, the provisions of Rule 57-A of the Rules must be construed to be mandatory and such meeting would be covered only by the procedure set out therein and not the bye-laws.

The unamended Section 73-ID indicated that the requisitions for special meeting in response to a motion of no-confidence was required to be signed by not less than 1/3rd of the total number of members of the committee who are entitled to vote, the quorum for such a meeting was required to be 2/3rd of the members of the Managing Committee and if the 2/ 3rd is a fraction it was to be rounded off to the next higher number and finally motion of no confidence was required to be passed by 2/3 majority. With the amendment, as made by Maharashtra Act 7 of 1997, the situation has changed so far as it relates to the motion to be passed by majority. With the amendment it is contended that (a) fraction it was to be rounded off to the next higher number and finally the motion of no confidence was required to be passed by 2/3rd majority. With the amended it is contended that (a) the requisition for no- confidence shall be signed by 1/3rd of the members (b) the quorum shall be complete with 2/ 3rd of the members and (C) the vote of no-confidence shall be simple majority. Referring to the arguments of the counsels for the Petitioners as well as for the Respondents, the High Court allowed the Petition holding that the special meeting for discussing the no-confidence motion and casting vote thereon was required to be proceeded on the basis of simple major- ity.

The High Court therefore directed Respondent No.3 to hold a fresh meeting by giving due notice to that effect of the Petitioners as well as the respondent members.

There was no order as to costs.

(In the High Court of Judicature, Bombay Aurangabad Bench, writ petition No.1559 of 2000 decided on 3-5-2000).

 

Structural Survey of Housing Society

By Utkarsh A Jani
M.D- (Edifice Erection Pvt.Ltd)
http://www.buildingmaintenance.co.in
[email protected]

Every year a large number of buildings in Mumbai collapse, resulting in deaths and economic damage. Sometimes the damage is inflicted by the weather. The salty sea breeze and the heavy monsoon play havoc with houses in the city, giving most sea-facing walls a puffed and peeling look. Often this leads to water seepage into the walls. If this remains unchecked, water can rust and corrode steel reinforcements inside the concrete columns and seriously damage the building.

mumbai is plagued with buildings needing repairs. Many of them have to be repaired urgently if precious lives and property have to be saved. It is the paradox that every occupant knows and understands the importance of living in safe structure, due to some reason or the other, most of them either try to avoid repairs or even go to an extent of creating problems for other occupants who are agreeable for repairs.

Building need maintenance to ensure serviceability during their life span, which can be prolonged with right type of repairs done for any distress observed. Periodical and routine inspections of buildings are essential to precede maintenance by professional engineers. An expert can only prescribe the right kind of repair to arrest this process of deteriorations to save the property and ensure the return of the investment preventing premature deterioration or collapse. As self-medication is likely to be injurious to health, similarly inexperienced approach to repair may not ensure prolonged service of built up assets.

Building repairs are costly and the more they are delayed, the more costly they become, many a times, the contractor selected for repairs has very little or no technical knowledge of what is required to be done and he some how manages to complete the work. After few years, the building needs further repairs to give it a fresh lease of life. Reliable consultant and experienced contractors are difficult to get and therefore many a times the common man is just lost in this unending maze. The people in charge are the worst sufferers. Even if they are honest and disciplined they are seldom appreciated. It mostly becomes thankless honorary job, where persons are burdened with and in return they develop unnecessary stress and also become unpopular. In vied of above structural survey is need of the hour

Statutory obligations on the close of financial year in housing societies

By Legal Bureau

STATUTORY OBLIGATIONS ON THE CLOSE OF CO-OPERATIVE YEAR
The Co-operative year 2019-2020 is coming to a close on 31st March, 2020 All Co-operative Housing Societies will have to attend to the functions to be carried out after the close of the Co-operative year. For the benefit of societies, we summaries the same as follows.
1. Close accounts of the society on 31st March 2020.
2. Prepare Receipts & Payments Statement and Income & Expenditure Account for proceeding Co-operative year as at 31st March, 2020 before May 15.
3. Submit copies of statements of accounts to the Deputy Registrar, C. S. of your ward and the auditor of the society by May 31.
4. If the time schedule is not likely to be adhered to, apply for extension of time for finalisation of accounts before May 15, with a copy of the Managing Committee resolution, justifying extension of time to the Deputy Registrar/Asst. Registrar of the ward.
5. Hold Annual General Meeting of the society on or before August 14.
6. If holding of the Annual General Meeting within the stipulated period is not possible, apply for extension of time to the Deputy Registrar of the ward before August, 14th, along with a copy of Managing Committee resolution explaining reasons for not being able to hold the meeting in time. Note that the maximum extension of time can be granted upto 14th November Stamp of Rs.1, is to be fixed on the application.
7. Also note the society has no authority to convene Annual General Meeting after August 14, if no extension is sought for or an extension is sought for, but or not granted or meeting is not held within the extended time.
8. Each member should have notice of the meeting of such period is mentioned in the old bye-law No.37, read with bye-law No.37, read with bye-law No.82(1) the relevant new buy-law in respect of flat owner’s society is100 read with bye-law No. 166, and in respect of Open Type of societies the relevant New bye-law is 102 read with bye-law no. 169).
9. Start Business of the meeting, if there is quorum as prescribed under old bye-law No.38 (New bye-law in respect of Flat owner’s society is 101 and in respect of open type of society is 103) if there is no quorum, follow procedure as laid down in bye-law No.38 (old).(The relevant new Bye-laws are Nos.101, 102, 103)
10. Do not postpone Annual General Meeting for want of statutory audit. Place before Annual General Meeting Statements of Accounts as finalised by the Managing Committee. The Annual General Meeting could accept them, subject to audit.

Sinking fund, its propriety & utilisation

By Maharashtra Bureau

Every Co-operative society, in particular a housing Society, should invariably create sinking fund by setting a part of the income on monthly basis. This is necessary for incurring expenditure required for undertaking major repair or reconstruction of the ageing building. Unfortunately, majority of the Co-operative Housing Societies make nominal provision or no provision at all for sinking fund. And when major repair is necessary for the building, flat owners are called upon to contribute required amount for undertaking repairs. This creates difficulties. Hence every Housing Society should make provision for sinking fund is monthly bills.

Proprietary of sinking fund. :
A sinking fund is usually created by setting a part of income to accumulate at interest for paying of a debt. In some business organizations such a fund is created for making a provision for replacement of wasting assets. In a co-operative housing society, the necessity of creating such a fund is to provide for sum of money, required for reconstruction of the building, when the existing building, is not safe for human habitation. A co-operative housing society being merely a service organisation has no source of income and naturally it cannot build up such a fund by setting aside a part of income for the purpose. The alternative is to collect contributions from members in such manner as is provided under the bye-laws towards this fund.
PROVISIONS IN THE BYE-LAWS FOR CREATION OF SINKING FUND
The basis on which sinking fund contribution is fixed
Every building has its normal life. Its life is extended by some more years by carrying out certain repairs. It is however risky to continue in occupation of the building which has run its life. A Co-operative housing society has therefore to reconstruct the building after it has run its life. As it may be difficult for any co-operative housing society to raise the funds for reconstructing the building form its members in a short spell of time, it becomes necessary to establish a Sinking Fund right form the inception of society. A provision has, therefore, been made in the bye-laws, enabling a co-operative housing society. A provision has, therefore, been made in the bye-laws, enabling a co-operative housing society to collect contribution towards this fund from its members at a fixed rate per month. The rate fixed under the bye-laws is ¼ percent per annum of the cost (b) A flat includes a godown, showroom shop or a law No. 13 (b). A flat includes a godown, showroom shop or a garage. It may be noted that the contributions at the rate mentioned above are to be collected only on the cost of construction and the value of the land included in the cost of construction and the value of the land included in the cost of construction has to be excluded. A building sinks in course of time due to its wear and tear but the land remains as it is even if the building collapses.

The procedure for ascertaining the cost of construction of a flat in an flat owners’ society.
In case of an open plot type co-operative housing society (which has purchased or taken a place of land on lease and constructed building / buildings thereon) it is not difficult to work out the cost of construction of a flat only. The difficulty in working out the cost of construction of a flat arises in certain cases, particularly the flat owner’s society (in which flats are taken by purchasers under agreements under section 4 of the Maharashtra Owners Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act 1963. A builder-promoter sells the flats on different occasions to different purchasers for different prices, even though the flats are of identical sizes and there is no difference in the type of construction and the amenities provided. The price paid for a flat proportionate land also and further that the cost of construction of a flat is not on the basis of actuals. In majority of cases the actual price paid by a purchaser is more than that mentioned in the agreement. It would thus be wrong to recover contribution form members at the fixed rate towards the Sinking Fund on the basis of value shown in the agreements. The builder may be most unwilling to give the actual cost of construction. A Co-operative society has therefore to employ the agency of an architect or a valuer, appointed by the general body meeting of the construction of the building and apportion such cost amongst costs of a flat so arrived at may be taken as the basis for fixing the amount of contribution to the sinking fund in respect of the flat/shop/garage etc.
Investment of sinking fund contribution with interest earned thereon
Investment of Sinking Fund made Obligatory
The amount in the sinking fund is required to be utilised when the reconstruction of the building is due. This is a very long period. During this period the contribution received from members by a society should stand invested on long term basis so that such an investment will fetch substantial return to the society. As per Bye-law No. 15 and Section 70 of M.C.S. Act. 1960. However, the societies which have not adopted the new provision, regarding investment of sinking fund contribution on long term basis, need not put off the questions of the said bye-law because it is in their own interest to ensure that the contributions received form members towards sinking fund on long term basis from time to time.
The need for investing interest on Sinking Fund Investment
It is brought to the notice of the Co-operative housing societies that if they go on investing only the contribution form members towards sinking fund at the rate of ¼ per cent per annum of the cost of construction of the flats and utilise the interest earned on such investments in their businesses, the total amount to the creation of sinking fund will not be sufficient to meet the cost of reconstruction of the building only if the sinking fund is invested on long term basis, along with the interest earned on such investment.
Modes of investment of Sinking Fund
A Co-operative housing society can invest its fund in the state Co-operative Bank i.e. the Maharashtra State Co-operative Bank Ltd., Bombay or the district Co-operative Bank i.e. The Bombay District Central Co-operative Bank Ltd. or the securities specified under section 20 of the Indian Trust Act. Although the Registrar can permit Co-op. Housing Societies to invest their funds in the Nationalised banks for other commercial banks or the Urban Co-operative Banks. This facility is given only for facilitating day to day banking transactions. A long-term investment has, therefore to be made by Co-operative Housing Societies with either of the two banks named above. All Co-operative Housing Societies should therefore, note that they have to invest their sinking fund collection is one of the above two banks. So far as securities under section 20 of the Indian Trustees Act are concerned, the list of the securities in which Co-operative housing can invest their sinking fund is published in the new bye-law.

Utilisation of the sinking fund
A. For Structural Repairs
As stated earlier, the sinking fund is meant for reconstruction of the building. However, if it becomes necessary for a Co-operative Housing Society to make any structural additions to and / or alterations in the building which should strengthen it and if it has no funds to carry such alterations if can fall back upon its sinking fund.

Procedure for withdrawing Sinking Fund
In case of withdrawal from the sinking fund, either for structural repairs or for reconstruction’s of the building, prior permission of the Registering Authority is necessary. A Co-operative Housing Society which has no funds or is not able to raise the funds required for sinking fund or for creating charge on the sinking fund investment.
An appointment of an Architect should be made at a general body meeting on such terms and conditions as are suggested by it for inspection of the building and bringing out the nature of the structural repairs necessary.
After entering into a contract with the Architect subject to the items and conditions approved by the general body meeting the Architect should be called upon to prepare plans estimates with specifications of the structural changes required to be carried out.
On getting the report from the Architect about the repairs necessary, with plans, estimates and specifications, the Managing Committee should invite tenders for the work in consultation with the Architect, examine the tenders received and prepare its own report on the tenders received and make its recommendations as to the tender which in its opinion may be accepted.
The plans, estimates with specifications the tenders received and the committee’s report thereon should be placed before the general body meeting called for considering the above documents and taking decision thereon. The general body meeting should also authorise the committee to make an application to the Registering authority for grant of permission for drawing the required amount from the Sinking Fund/creating charge on the sinking fund investments to the extent required.
The committee should then enter into a contract with the contractor whose tender is accepted by the general body meeting, on the terms and conditions set out by the general body meeting.
The Registering Authority should then be requested to grant necessary permission to withdraw the requested amount from the Sinking fund/create charge on the sinking fund investment.

No Stamp Duty on new flats acquired after redevelopment in Maharashtra

By Maharashtra Bureau

According to circular No.K.5/Stamp-17/Pra.Kr.10/13/303/17 dated 30th March 2017, Department of Stamps, Inspector General of Registration & Controller of Stamps (Maharashtra State), there shall be no Stamp Duty payable on the areas previously held by the members of the society or areas of rehab in new construction. The circular says:

It has been made clear vide Government Revenue & Forest Department Circular No. Petition-2013/1425/ Pra.Kra. 260/M-1 dt. 09.05.2014 that, while transferring the built up area to the owner vide the incidental document to be executed as per the development agreement executed between the owner of the property and the developer, the property does not get transferred, hence stamp duty on such documents should be charged as per Sec. 4 of Maharashtra Stamp Act.

Pursuant to the above, clarification as to how the stamp duty should be charged while giving premises in the new building in redevelopment project of old building of the co-operative housing society (i.e. when the original owner is a certain housing society), has been given in Circular No. K.15/Bamudat/ Margadarshak Suchana/ 621 dt. 23.06.2015 issued by the office of Inspector General of Registration, in which it has been clearly stated that,

A) If a development agreement has been entered into between the housing society (original owner) and developer and when the incidental agreement in compliance of the said agreement is executed in favour of housing society, the stamp duty on such incidental agreement should be charged as per Sec. 4 of Maharashtra Stamp Act.

B) However, if the development agreement has been executed only between the housing society (original owner) and developer, the document transferring the flat/unit in individual favour of the original member of the housing society will not be treated as an incidental document made for compliance of the original development agreement, but will be an independent document. Therefore, the stamp duty for the area approved by the housing society for the flat to be transferred through such document, should be charged on the construction cost.

3) National Real Estate Development Council, Mumbai and other various units had called for detailed explanation of this clarification from this office. It was especially demanded that, the document to be executed in individual favour of the member in compliance of the tripartite development agreement entered into between the developer, housing society and member, is required to be treated as the incidental document of the original development transaction/agreement, hence the provisions of Section 4 should be made applicable to such agreement.

On deliberations of the above factors, following explanation is being given:

(1) In cases where the development agreement has been made only between the housing society (owners) and developers, the individual member is not a party to such development agreement, hence the provision of Section 4 will not be applicable to the transfer document in his (member) favour and the stamp duty will have to be charged as mentioned in 2(B) in the Introduction above.

(2) In cases where the following criterion are being complied with –

(a) if a tripartite development agreement has been made between the housing society (original owner), member and developer,

And,

(b) if a condition of making separate transfer document of new flat in favour of each member is incorporated in the original development agreement, And,

(c) if there is limited objective of transferring the built-up area in the transfer document in favour of the said member as per the terms and conditions of the original development agreement. And,

(d) if the housing society is a consenter party in the transfer document in favour of such individual member, in such circumstances, the transfer document in favour of the individual member shall be treated as incidental document of the original development agreement and the provision of Sec. 4 should be made applicable to it.

(3) Here, it is clarified that the above explanation will be applicable only to the area agreed in the development agreement. In case the member is getting / purchasing more than the said agreed area, the stamp duty should be charged on the valuation arrived at as per the Annual Market Value Rate Chart for such additional area (flat / shop unit / office / industrial) or the consideration amount, whichever is more, as clarified in the circular under reference.

(4) However, in regard to the criterion regarding the document in favour of individual member as mentioned in Sr.No.2 above especially regarding confirmation about the compliance of the Critria, is a quasi-judicial process. Hence the directions are also being given that, if the parties in such document are of the opinion that these criterion in regard to the document are being complied with and that the provision of Sec. 4 is becoming applicable, then they may get one such transfer document in the redevelopment scheme adjudicated from the Collector of Stamps and accordingly the Sub Registrar may directly register other similar documents having same draft in the scheme as per the adjudication decision.

A copy of this circular is available on website www.igrmaharashtra.gov.in of Registration & Stamp Department under the category Publication at ‘Circulars’.

 

Sd/-

Society matters in Courts : Lis Pendence

societyBy Legal Bureau

What precautions should be taken by the parties during the pendency of dispute in Co-operative Court ?

Answer: Even if the Advocate is appointed by the Society, the Society should see someone on its behalf attends the matter, but it remain present by the parties concerned or on the scheduled date, but on dates of hearing, the concerned parties must remain present preferably along with Advocate. It is to be noted here that taking submissions of Advocate is at the sole discretion of the Co-operative Court. The Co-operative Courts are empowered to refuse the appearance of Advocate in the case for the reasons given, but the party concerned must remain present in the Court. The interested party may appear through his Constituted Attorney or by any means of authorization of such person concerned. As stated earlier, the Opponent must file his Written Statement within 30 days or as early as possible, but in any case before expiry of 90 days. The parties must not make an issue of controversies finalized by the Co-operative Court, because the evidence is to be laid on the basis of issues. The parties may pray for recasting of issues in case the burden is wrongly placed. The parties should have copies of evidence including Cross Examination recorded on the scheduled date. The important points to be noted here is that the party, who feels some correction in the deposition of witness must pray before the Court then and there only because application for correction on deposition after a lapse of time may not be entertained by the Court. It is also to be borne in mind that staffs in the Co-operative Court, as on today are not the trained staff as that of the Civil Courts. Therefore, there is likelihood of certain mistakes in recording the proceedings and recording of deposition too. Therefore, the parties must be careful in reading the proceedings before the Court and correct it then and there. At times small mistakes in cross Examination may effect the finality of the judgment in the concerned dispute. Therefore, the parties are informed and suggested to read carefully the depositor’s sworn statement of the parties concerned. The parties are also advised to note down all the orders passed by the Court during the pendency of the litigation. The parties are also advised to note down the daily Roznama recorded by concerned person and signed by the concerned presiding judge. Instead of asking for Certified copes of the proceedings, if the party records the proceedings i.e. Roznama daily in their brief, it helps the party at the time of final argument of the matter. The parties must remain present on the date of judgment or order because at times the aggrieved party may not be able to go to the Appellate Court because during the period of presentation of Appeal rights may be taken away. Therefore, the party may place an application before the same judge for saying execution of judgment or Award. Generally if the parties are present, the judges can exercise their discretionary powers in writing such orders. The Co-operative Courts have power to redirect the dispute and Therefore due precaution in necessary in this regard.

Non Occupancy Charges is 10% of Service Charges in Maharashtra

lawBy Advocate S R Agarwal

The levy of non-occupation charges has been a
controversial issue for a long time, which resulted into
disputes between members and the Societies flooding
the offices of the Deputy Registrar and the Courts.
Therefore, attempts have been made by the State Govt
from time to time to regulate it. The commissioner for Cooperative
Societies, Maharashtra State, issued a Circular
on 13.3.1992 laying down that the Societies could levy
non-occupation charges upto a maximum of 25% of
service charges and, accordingly, clause No: (C) of Byelaw
No: 45 (2) (iii) of the old bye-laws was replaced by
the following words.
“He shall pay non-occupancy charges to the Society at a
rate of not exceeding 25% of the service charges as will
be determined by the meeting of General body of the
Society.”
This Circular was challenged in Writ Petition No: 1618 of
1993, but it was disposed off as the said Circular was
withdrawn. In exercise of the powers vest in the State
Government under Section 79 A of the Maharashtra Co-
Operative Societies Act, the State Government issued
an Order on 9.3.1995 laying down that the non occupation

charges shall not be fixed beyond 100% of the
maintenance charges. But this Order was also challenged
in Writ Petition No: 1398 of 1996. Therefore, the State
Government appointed a Committee on 19.6.1997 to look
into the whole gamut of non-occupancy charges. The
Committee submitted its report to the State Govt on
31.7.1998 and when the said Writ Petition came up for
hearing in January 2000, it was dismissed as withdrawn,
as the State Govt submitted that the report of the said
committee was under consideration of the State
Government and, in the meanwhile, the earlier Order
dated 9.3.1995 was not being applied.
After the consideration of the Committee’s Report, the
State Government issued an Order dated 1.8.2001 in
Public Interest under Section 79 A of the said Act, there
by directing the Societies not to charge non-occupancy
charges beyond 10% of the Service charges (excluding
Municipal Taxes). Agian a number of the Societies led by
Palm Beach Riviera CHS Ltd., challenged this
Government Order dated 1.8.2001, fixing the non occupancy
charges not more than the 10% of the service
charges, before the Hon’ble High Court during the years
2002 and 2006 on various grounds such as, that this
Order was against the interest of the Societies, arbitrary,
not in public interest and unwarranted interference in the
affairs of the Societies and there is no legislative policy
enabling the Govt or Registrar to override the bye-laws

of the Societies duly approved by the Registrar enabling
the General Body to fix the non-occupancy charges
payable by the members and that the said Order may
enable a member to use the flat as a vehicle for carrying
out the object of earning money, thereby defeating the
spirit of the co-operative housing.
The State Government, justifying the Order dated 1st
August 2001, submitted before the Hon’ble High Court
that it has been issued in exercise of statutory powers
under Section 79 A of the said Act in public interest as it
serves the interest of the Societies, as well as the
members, because by virtue of a bruit majority and with
a view to extract more money from the members not
occupying the flats, non-occupancy charges were being
imposed whimsically and at exorbitant rates and on the
basis of the income earned by such members, which
amounted to levying the tax on income of the members
and in some cases at the rate of per sq.ft. of the area of
the Flat and the complaints were received by the Govt.
that in case of a few societies, the non-occupancy
charges recovered in respect of two flats were being
utilized towards the property taxes for the remaining 47
members, who were not required to pay anything towards
the Property Tax and the non-occupancy charges
recovered from three to six flats were more than the
property tax bill of the entire society, which levied these
charges @ of Rs. 9/- per sq. ft per month. Therefore, the

Government constituted a committee and after due
consideration of its recommendations decided a uniform
rate of non-occupancy charges throughout the state,
without linking the same with the rateable value of the flat
or the rental income derived by such members and to
achieve the objective of stopping the Societies from
profiteering and to prevent unjust enrichment and acting
to the detriment of the members, who gave their flats on
rent or on leave and license basis and to protect such
minority members from the oppression by majority in as
much as a flat is a property of the member and he is
entitled to return from the same as he has invested the
money for acquiring the same. It was also pointed out
that in such cases, societies do not spend any extra
money on account of the member giving the flat on leave
and license or rental basis and Govt. is concerned for
solving the housing problem in the State. Therefore, the
State Govt issued the Order dated 1-8-2001 and at the
same time, replaced by Bye-law No: 45 in the amended
Bye-law numbered as 43 which, interalia, provided as
under :-
“ C) He shall pay non-occupancy charges to the society.
Non occupancy charges shall be charged in accordance
with the circular issued by the Government of
Maharashtra/Commissioner for Co-operation from time
to time and shall not be levied if the flat is occupied by the
‘family’ of the member as defined under these Bye-laws.”

After the careful consideration of the submissions made
on behalf of the Societies and the Sate Government, the
Hon’ble High Court observed that the validity of Section
79 A of the said Act has already been upheld by this Court
in the cases 1989 Mh-L-J. 173 and 1993 (2), Mh L.J. 1716
and that it has been found that in some area, levy of nonoccupancy
charges has become a profit making business
and the State Government is empowered to issue Order
in public interest preventing the affairs of the Society being
conducted in a manner detrimental to the interest of the
members and looking at the housing cost as at present,
the member concerned must be allowed to earn some
income on the investment he has made and a good
member of flats remain unoccupied for various reasons
and if non-occupancy charges are allowed at the rate,
the majority decide, it would be an additional impediment
in the flats being available on leave and licence or tenancy
basis, which does not in any way violate the provisions of
the Maharashtra Ownership Flats Act and the provision
of the earlier Bye-law No : 45, empowering the General
Body of the Society to fix the non-occupancy charges,
was being abused by some of the societies, which cannot
be allowed to use the authority under the bye laws, a
vehicle for making money and exploit the minority
members, as it is not the business of the societies to
impose taxes and derive income by different modes, like
non-occupancy charges etc. The Hon’ble High Court came

to the conclusion that the exercise of the power by the
State Government is bonafide one with the objective to
avoid unnecessary litigation and disputes and bringing
uniformly in the rate of nonoccupancy charges without
linking the same to the income derived by the concerned
member or the rateable value of the Flat and to prevent
the exploitation of minority members. The argument on
behalf of the Societies that the entire property of the
Society was assessed as one Unit for Municipal Taxes
and the flats given on rent or lease and licence basis would
add to the rateable value component thereby, giving rise
to increase in such taxes did not find favour with the High
Court as of no significance and need not be considered,
as each flat is assessed separately for Municipal taxes
with effect from 1st April 2006.
Thus, the issue of the quantum of the non-occupancy
charges has been finally settled by the Hon’ble Bombay
High Court by its Judgment dated 2nd March 2007 by
upholding the Government Order dated 1st August 2001,
prescribing the non-occupancy charges not more than
10% of the service charges, excluding property taxes, both
in respect of residential as well as commercial premises,
irrespective of the fact whether the new Bye-laws are
adopted by the Societies or not. This Judgment has
brought in a great relief to the members of the Societies,
who give the flats on rent or leave and licence basis.

However, this judgement has been challenged before the
Hon’ble Supreme Court of India, which, after preliminary
hearing has passed the order dated 30.4.07, as “Interim
order passed by the High Court shall continue in the
meantime.” Therefore, no society can charge more than
10% as non-occupancy charges, unless ruled otherwise
by the Hon’ble Supreme Court of India.

New election procedure for cooperative housing societies in Maharashtra

electionsBy Legal Bureau
By Sunil Deshmukh
District Deputy Registrar (Retd.)
For K.K. Ramani & Associates
The Government of Maharashtra has amended the Maharashtra Cooperative Societies Act, 1960 in 2013 and introduced new election procedure for cooperative housing societies.

We have explained the procedure as per the Act regarding elections to be conducted by the cooperative housing societies.  We trust that you will find the same useful.

Elections of Cooperative Housing Societies

1.    Maharashtra Cooperative Societies Act, 1960 has been amended on 13th August, 2013.  As per the amended provisions of Section 73CB(1), State Cooperative Election Authority has been constituted.  The Elections of all the Cooperative Societies have to be conducted as per the provisions of Maharashtra Cooperative Societies (Elections to Committee) Rules, 2014.

2.    The Housing Societies have been classified in two categories under the aforesaid Rules:

i.               Housing Societies having 200 or more members as on 31st March of the preceding year in ‘C’ Type.
ii.              Housing Societies having less than 200 members as on 31st March of the preceding year in ‘D’ Type.

Both type of Societies which are due for election has to submit the information in E-2 Format of the aforesaid Rules.
Form E-2
Forms of report to be delivered by the committee of the society 6 months before of the expiry of the period of the committee of the society.

Sr. No.

(1) Name of Cooperative Society with registration No. and Address

(2) Date of result which last election of managing committee was held declared.
?

(3) Date on which term of the present MC members in the office to expire.

(4) Names of the constituencies as per bye-law.

(5) No. of MC members to be elected against each constituency.

(6) Remark

(7)

Note:  The Certificate from the Chief Executive Office / Secretary of the Society to the effect that submission of provisional voter list will follow within 7 days shall be as under :

Certificate

I, Shri / Smt. _________________, Chief Executive Officer / Secretary of ___________ _________ Society Limited _________, hereby certify that –

(1)           The Society shall prepare provisional voters list of the members prior to that date and on or before expiry of 120/150 days.
(2)           The information furnished in the Form E-2 is as correct and derived from the records of the Society.
(3)           The particulars to be included in the provisional voters list shall be according to the Rules No.6 of these Rules.
Seal of the Society
Date :
Name and Signature of the
Chief Executive Officer / Secretary
Of the Society
The Elections of the ‘C’ Type Societies will be conducted Returning Officer appointed by the Assistant Registrar / Deputy Registrar of Cooperative Societies of concerned Ward.
Every society has to submit the information in above format to the concerned Assistant Registrar / Deputy Registrar.
The Elections of ‘D’ Type Societies will be conducted by the authorized officer appointed by the concerned Registrar.  The Societies have to submit a copy of the byelaw along with the Form E-2 to the concerned Registrar.  Society has to submit final list of voters to the concerned Registrar.   The society should prepare voters list considering Section 26(1), which reads as under :

26(1) a member shall be entitled to exercise such rights as provided in the Act, Rules and the Byelaws.

The members should be eligible as per Section 27 of the Maharashtra Cooperative Societies Act.  He should not be a defaulter under Section 73CA and should not be disqualified as per the provisions of Byelaws of the Society.

The relevant provisions of Section 27 are as under :

(1)  save as otherwise provided in sub-section (2) to (7) both inclusive, no member of any society shall have more than one vote in its affairs and every right to vote shall be exercised personally and not by proxy.
(1)A – notwithstanding anything contained in sub-section (1), an active member who subsequently fails to participate in the affairs of the Society and use the services upto the minimum level as specified, from time to time, in its byelaws, shall cease to be active member and shall not be entitled to vote.
(2) Where a share of a society is held jointly by more than one person, (the person whose name stands first in the share certificate, if present shall have the right to vote but in his absence the person whose name stands second and in the absence of both, the person whose name stands next, and likewise, in the absence of the preceding persons the person whose name is next on the share certificate who is present and who is not a minor shall have right to vote.
(8) No nominal member shall have right to vote (and no such member shall be eligible to be member of a committee)
Section 73CA (A)(e) of the Act : “a member who defaults the payment of dues to the society within three months from the date of service of notice in writing served by post under Certificate of posting demanding the payment of dues and such member fails to make the payment become disqualified.
A member who is having more than two children on or after 7.9.2001 is disqualified to become a member of the committee.
The Secretary /Manager of a society has to prepare a provisional voter list as per the I-Register of members and publish it on the notice board of the society calling the objection on it within 2 days.
After two days prepare a final list of voters and to be submitted to the concerned Registrar in four copies.
The Returning Officer shall be appointed by the concerned Assistant / Deputy Registrar with the prior sanction of State Election Commission.
The Returning Officer with the consultation of Registrar and Society will prepare an election programme and will display it on the notice board of the society.
Expenses of Elections
1.             Remuneration to the Authorised Officer Rs.750/-
2.             Election Funds – less than 25 members – Rs.2500/-
26 – 50 members         – Rs. 4000/-
51 – 100 members       – Rs. 5000/-
101 – 199 members     – Rs.7500/-
Strength of Managing Committee

No of member of the Society General Reserved ? ? ? Total Quorum of Meeting
? ? Women SC/ST OBC VJ/NT/SBC ? ?
Upto 100 6 2 1 1 1 11 6
101 to 200 6 2 1 1 1 13 7
201 to 300 10 2 1 1 1 15 8
301 to 500 12 2 1 1 1 17 9
501 and above 14 2 1 1 1 19 10

* Quorum for the meeting will be simple majority for the existing Committee Members.

Transfer of Shares on the death of a member in housing society in Maharashtra

By Legal Bureau

TRANSFER ON THE DEATH OF A MEMBER – SECTION 30 THE M.C.S. ACT, 1960
30 (1) On the death of a member of a society the society shall transfer the share or interest of the deceased member to a persons or person nominated in accordance with the rules, or, if no person has been so nominated to such person as may appear to the committee to be the heir of legal representative of the deceased member.

Provided that, such nominee, heir or legal representatives, as the case may be, is duly admitted as a member of the society.

Provided further that, nothing in this Sub-section or in section 22 shall prevent a minor or a person of unsound mind from acquiring by inheritance or otherwise, any share or interest of a deceased member in a society.

2 Notwithstanding anything contained in Sub-section (1) any such nominee, heir or legal representative as the case may be, may require the society to pay to him the value of the share or interest of the deceased member ascertained in accordance with the rules.
3 A society may pay all other moneys due to the deceased member from the society to such nominee, heir or legal representative, as the case may be.
4 All transfers and payments duly made by a society in accordance with the provisions of this section shall be valid and effectual against any demand made upon the society by any other person.

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