Can society be formed without consent of the builder ?

By Vinod Sampat, Advocate

Posted on 10 August 1999

Q.1. Can a Co-operative Housing Society be formed if the builder refuses to co-operate ? What is the minimum number of members required to form a Co-operative society ? How many members consent is required to form a Co-operative Society ?

Ans.1. Section 10 of the Maharashtra Ownership flats (Regulations of the Provisions of Construction Sale, Management and Transfer) Act makes it obligatory on Promoter (Builder to submit proposal for registration of a Co-operative Housing Society, within a period of four months from the date on which the minimum number of members required to form such a society have purchased the flats. Yes, a Co-operative Society can be formed even if the builder does not co-operative. In such a situation a notice should be issued to the builder. A copy of such notice has also to be sent to the Dy.Registrar / Asstt. Registrar of the concerned ward with a request to call upon the builder to explain his stand on the above and matter. The minimum number of members required to form a Co-operative Society is ten. However societies can be formed with less than ten members after obtaining the permission from the Competent Authority. The Government’s Agriculture & Co-operation Department has by its Circular No. CCSH-C079-36997-1289-4c dated 01-03-1980 laid down the criteria or exempting Co-operative Housing Societies with less than ten members. The consent of a minimum of 60% of the total number of flat purchasers is required to form a Co-operative Housing Society.

Q.2. What are the formalities that have to be complied by the outgoing Managing committee/Returning Officer in the year in which elections are to be held ? Please explain the same along with a model election program duly prepared by the Returning Officer ?

Ans. 2. The outgoing Managing Committee has to appoint a returning officer who has to conduct the elections. The returning officer has to give a declaration that he shall not contest the elections. The returning officer has to give a declaration that he shall not contest the elections. The Returning Officer than draws up an election program.

The model election program would include : a) Publication of Provisional list of members of the Society as on 30^th June/31^st March on the Notice Board of the society. b) Last date for receipt of suggestions or objection to the names of members in the Provisional list. C) Publication of the final list of members eligible to vote on the Notice Board of the society. d) Issue of Notice to members in the final list inviting nominations e) Last date for receipt of nominations. f) Scrutinizing of nominations. g) (i) Publication of the list of valid nominations (ii) Communications of reasons for rejection of nominations to the candidate concerned. h) (i) Last date for withdrawal of nominations. (ii) Publication of the final list of valid nominations excluding the withdrawals if any. I) Publication on the Notice Board the date, time and place of voting j) (i) Voting (ii) Counting of votes (iii) Publication of the list of the candidates with votes polled by them on the Notice Board. K) Declaration of the result of election at the General Body Meeting.

For the above said purpose the returning officer is entitled to appoint necessary staff and shall have access to the relevant records of the society.

Q.3. Our Co-operative year ends on 30^th June. What are the Statutory Obligations that have to be complied by the society at the close of the Co-operative year ?

Ans 3. Apart from the day to day working of the society the office bearers have to approve the statement of Accounts for the Co-operative year July to June. The date of the Annual General Body Meeting should also be fixed in the Managing Committee Meeting. The office bearers must also prepare the Annual Report of the society and must also prepare the agenda for the Annual General Body Meeting.

The Below mentioned functions will have to be carried out by Co-operative Societies at the close of the Co-operative year.

1. Close accounts as on 30^th June.

2. Prepare receipts and payments statement and profit and loss account for the proceeding co-operative year and balance sheet as at 30th June before August 14.

3. Submit copies of statements of accounts to the Dy./Asstt..Registrar and the auditor of the society by August 31.

4. If the above time for finalization of accounts before August 15, with a copy of the managing committee’s resolution justifying extension of time, to the Dy/Asstt. Registrar of the Ward wherein your society is situated.

5. Hold Annual General Body Meeting of the society on or before November 14.

6. IF holding of the Annual General Meeting within the stipulated period is not possible, apply for extension of time to the Dy./Asstt. Registrar of the Ward before November 14^th along with a copy of the managing committee resolutions, explaining reasons for not being able to hold the meeting in time. The maximum extension of time that can be granted by the Dy./Asstt. Registrar, is upto 14^th February next.

7. Society has no authority to convene Annual General Meeting after November 14, if no extension is soughtfor, but not granted or meeting is not held within the extended time.

8. Each member should have notice of the meeting of such period as is mentioned in the bye-law No. 166/169. A copy thereof should be sent to the Dy/Asstt. Registrar, of the Ward. Notice and agenda should be accompanied by statement of accounts and committees report . The notice with its accompaniments must be exhibited on the notice board.

9. Start business of the meeting if there is no quorum and you follow procedure as laid down in bye-law No.39.

10. Do not postpone Annual General Meeting for want of statutory audit. Place before Annual General Body Meeting statements of accounts as finalised by the Managing committee. The Annual General Meeting could accept them subject to audit. A) The bye-law Nos. 100 and 166 are for flat-owners societies. B) The bye-laws No.s102 and 169 are of open plot type societies.

Q.4. What are the rights and liabilities of members of a Co-operative Society ? Can defaulters vote at the General Body meeting ?

As 4. The Right and Liabilities of members of Co-operative Society are briefly summarised as under. A) Right of Members. (i) To sell his shares. (ii) TO exchange his flat. (iii) To get certified true copies of certain documents including the bye-laws of the society (section 32) (iv) to sub-let his flat with the permission of the Society (Bye-law No.45 (1). (v) To receive notice of AGM/SGM (vi) To participate, discuss and vote at the AGM/SGM (vii) To contest the elections and to vote at the elections. (viii) To file a nomination with the society (ix) To request the society to have an associate members name added along with his name. (x) To draw the attention of the Committee on various matters affecting the interest of the members. (xi) To apply to the society for loan. (xii) To instruct the office bearers to call a Special General Body Meeting if the requisite number of signatories sign the application (xiii) To draw the attention of the Dy./Asstt.Registrar for various acts of the Society pertaining to irregularities and/or omissions.

Liabilities of Members (i) He has to abide by the provisions of the M.C.S. Act 1960, M.C.S. Rules 1961 and bye laws of the society (ii) To pay the legitimate dues of the Society irrespective of his grievances/dispute with the society (iii) To present any record which is required for audit purpose as per section 81 & 83 of the M./C.S. Act 1960.

I would like to add that the defaulting members can definitely vote and participate at the General Body Meeting. They are however not allowed to contest the elections.