By Vimal Punmiya FCA, LLB.
DOCUMENTS TO BE EXECUTED AND SIGNED FOR TRANSFER OF SHARES IN A CO-OPERATIVE HOUSING SOCIETY
On entering into an Agreement for the sale of purchase of Flat/shop etc. before execution of such sale deed the Transferor is required to prove to the Transferee that he is the true member of the society in which the said Flat or shop is situated . As a proof of his true membership the Transferor is required to produce before the Transferee the following documents :
I ) Original and copy of the Purchase Deed with society/with Builders.
II ) Original and a copy of Share Certificate.
Original and a copy of latest society’s bill,
Original and a copy of Best Bill,
Original sinking fund certificate if any,
Pass Book issued by the society,
Only after going through these records and on satisfaction of the true membership of the Transferor. The transferee agrees to sign the form No. 20-B to be filed before the society for its No Objection to admit the Transferee as its member.
On obtaining no objection certificate from the society and if the apparent consideration of sale deed exceeds Rs. 75,00,000/- ( For the property situated in greater Bombay ) both the parties are required to sign and file form 37-I in duplicate before the Appropriate Authority of the Income Tax Department along with a copy of the Agreement for sale signed by both the parties. The Appropriate Authority takes minimum 3 months ( excluding the month in which form No.37-I is filed ) time to pass the relevant order, wherein either it mentions regarding Acquisition of the Flat/shop or grant of No objection. In case of acquisition of the property the Appropriate Authority acts as the Transferee and pays the consideration mentioned in the Agreement after deducting a certain percentage as per the provision of sec. 269 UA (2) to the Transferor and the sale deed comes to an end. If the Appropriate Authority has granted its no objection to the sale of the Flat/Shop then and in such event both the parties proceed further and execute other relevant documents for the effective transfer and vacant and peaceful possession of the said Flat/shop.
The following are the various documents required to be signed by both the parties at the time of vacant possession of flat. The documents such as :
a Agreement of sale ( to be properly stamped ).
B Transfer Form.
Letter to the society requesting them to transfer share certificate in the name of purchaser and incidental to that use and occupation of Flat/shop etc.
The Transferor is required to indemnify the Transferee against any claim made by any third person by signing the Indemnity Bond. It is also advisable to take a special power of Attorney in favour of Transferee and also to send letters to the society for issue of share certificate in the name of Transferee and to the B.E.S.T. for transferor further is required to sign a declaration in support of his possession and also acknowledge the receipt of the consideration amount by signing the receipt. As per the urban land ( Ceiling and Regulation Act ) 1976 the Transferor is required to give declaration in the form 24 that he does not hold any vacant land the area of which together with the area of the proposed flat to be transferred does not exceed 500 sq.mtrs. similar declaration is required to be given by the Transferee too in Form No.25.
The Transferee is also required to send letter to the society and undertake to pay stamp duty and execute a document and sign the same. He is also further required to make an application to the society to admit as a member of the society by signing application for membership and filing the same with the society.
Further it is to be noted that all the original documents relating to the transfer of title, rights and interest in the society such as
Original No Objection Certificate from society,
Original Share Certificate.
Original No Dues Certificate from society.
Original (Latest) society bill and Receipts.
Original ( Latest ) BEST Bill.
Original Purchase Agreement.
Pass Book issued by the society.
All other original/documents of title to the Flat.
Keys of the said Flat/Shop to be obtained from transferor.
Thus one the above mentioned formalities are completed and vacant and peaceful possession of the Flat/shop is handed over to the Transferee the sale deed is said to be finalised and completed.
EXCHANGE OF FLATS :
The members, desiring to exchange their flats, shall make a joint application to the secretary of the society, containing the following details :
The name of the members concerned.
The distinctive numbers of their respective shares and No. of their Flats.
The carpet areas ( in sq.metres ) of their respective flats.
The building number/numbers or name/name of the building/buildings in which the respective flats are situated.
The reasons for exchange of Flats.
PROCEDURE FOR TRANSFER OF SHARES
Rules 24 of the M.C.S. Rules, 1961
No Transfer of shares shall be effective unless :
( A ) It is made in accordance with the provisions of the bye-law.
( B ) A clear fifteen day’s notice in writing is given to the society indicating therein the name of the proposed transferee, his consent, his application for membership, where necessary and the value proposed to be paid by the Transferee.
( C ) All liabilities of the Transferor due to the society are discharged ; and
( D ) The transfer is registered in the books of the society.
Any charge in favour of the society on the share so transferred will continue unless discharged otherwise.
Bye-Law No.19 :
’19 (1) Notwithstanding anything contained in any other bye-law, no member shall be permitted to transfer any shares held by him/or his interest in the property of the society unless he had held such shares or interest in the property for a period of not less than one year from the date of his admission to the membership of the society. Application for transfer shall be in the form set out in schedule II appended to the Bye-law.
Registration of Transfer :
Until the transfer of shares is registered, no right shall be acquired against the society by the Transferee, nor shall any claim of the society upon the Transferor be affected.
Bye Law No.20 :
“ 20 ( 1 ) The society shall issue within six months of allotment, a share certificate showing the number of member’s register, the number of the shares and the holder’s anme in full under the signature of officers authorised in this behalf and duly sealed with the society seal.
The Committee shall keep a share register in which there shall be entered the name, occupation and address of the member, the date of admission and the number of shares allotted or transferred from another member’ holding. The Register shall also show the number of shares transferred, repaid, forfeited or cancelled and the date of such repayments, forfeiture or cancellation.
Up on each transfer of any shares there shall be paid to the society such fee not exceeding Rs.50/- as the committee may fix”.
A part from transfer of share and interest of a member in the capital/property contemplated under section 29 of the M.C.S. Act 1960, Rule 24 of the MCS Rule 1961 and the Bye-Laws No.19 and 20 of the model bye-laws for co-op, housing societies, transfer of shares and interest of a deceased member in the capital/property of a society to his nominee or heir has to be considered by the society. Section 30 of the M.C.S. Act 1960, the Rule 25 of the M.C.S. Rule , 1961 and the bye-laws No.15 and 15 deal with transfer of shares and interest of a deceased member in the capital/property of the society. The said Rule also deals with the procedure to be followed for the transfer of shares and interest of a deceased member in the capital/property of the society if the deceased member had not made any nomination. The said provisions are reproduced hereafter.
PROCEDURE FOR THE TRANSFER OF SHARES AND INTEREST IN THE CAPITAL/PROERTY OF THE SOCIETY AS PER THE NEW BYE-LAWS
(a) A member, desiring to transfer his shares and interest in the capital/property of the society, shall give 15 days notice of his intention to do so to the secretary of the society in the prescribed form, along with the consent of the proposed transferee in the prescribed form.
b On receipt of such notice, the secretary of the society shall place the same before the meeting of the committee, held next after the receipt of the notice, pointing out whether the member is prime-facie eligible to transfer his shares and interest in the capital/property of the society, in view of the provisions of section 29 (2) (1) of the Act.
C In the event of ineligibility of the member to transfer his shares and interest in the capital/property of the society, the committee shall direct the secretary of the society to inform the member accordingly within 3 days of the decision of the committee.
D If the committee is satisfied that the member is prima facie eligible to transfer his/her shares and interest in the capital/property of the society, the committee shall direct the secretary of the society to inform the member within 3 days of the decision of the committee to make the compliance as under :