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BY MAHABLESHWAR N. MORJE |
| Q.1 | What is the object of registration of a Co-operative Housing Society ? Why the promoter or builder avoid the registration of the Society ? |
| Ans. |
The object of the registration of
the Society is to enable the society to have common seal and perpetual
succession. A suit can be filed by a society and against the society. By
virtue of registration the society also gets certain rights and privileges,
such as
In the proposed housing society the builders try to retain the control over the property in as much as they get benefit arising out of the transfer of residential flat or the non-residential premises and excess or unutilised F.S.I. available. For the purpose of registration the city of Bombay has been divided into different zones appointing separate officers for each zone. If the builder avoids to register the society, the purchasers of the flats have right to register the society. But sometimes obstruction is created by the Builder or Chief Promoter to avoid registration. |
| Q.2 | What is meant by Housing Society ? |
| Ans. |
A "housing society" as defined in S.2, Cl(16), means a society, the object
of which is providing its members with dwelling houses. The object of a
housing society is to provide its members with dwelling house with suitable
amenities on reasonable terms. For the purpose, the society may purchase
land of the State Government may, through land acquisition proceeding,
acquire land for the society.
The society may either sell plots to its members, or build dwelling houses, and sell them to its members or give them as tenant members. The resolution of a housing society requiring its members to build on the plots within fixed time limit, levying penalty on unbuilt plots after that period, is valid and within its powers. Housing societies are formed in big cities and towns, where there is acute scarcity of houses. A housing society after the distribution of plots or buildings has to collect rent and other charges, pay taxes to the municipalities, maintain roads, gutters, water supply, electric supply & repair building. It has also a right to terminate tenancy, obtain possession of plots and buildings on termination of tenancy or forfeiture of buildings. It has also to recover price of the building or plots etc. According to Rule 10(5), sub-classes of a Housing Society are :
(b) Tenant Co-partnership Society, (c) Other Housing Societies. |
| Q.3 | What is the object of registration of the Society ? Under what provision of Law the Society can be registered ? |
| Ans. |
Section 9 of Maharashtra Co-operative
Societies Act refers to the registration of the Society
(1) It has been made incumbent on the Registrar to register a society within a maximum period of six months provided it complies with the provisions of the Act and the Rules thereunder. (2) Sub-clause (2) has been inserted requiring the Registrar to the State Government the reasons for his failure to register a society within the prescribed period and, then to act in accordance with the directions of the State Government issued in that behalf. @ LEVL 1 = Sub-clause provides that the Registrar shall forth with communicate the decision refusing registration to the Applicant, and if there are more than one person as applicants, then to the first signatory. |
| Q.4 | What are the powers of the Registrar ? |
| Ans. | Power to register a society under this Act is conferred by this section of the Registrar. The registrar has a direction to register a society or to refuse to register it. He has to satisfy himself that the society has complied with the provisions of this Act, and the rules and its proposed bye-laws are not contrary to this Act or to the Rules. The Registrar may require modifications of the bye-laws. Such modification Registrar, subject to modification, requires to be placed before the general meeting. If the registrar wants additional information with regard to the society, he can call upon the persons signing the application for registration to supply the same. On the registration of the society, certificate of registration shall be issued by the Registrar within 3 months from the date of the registration, the first general meeting of the society is to be covered. |
| Q.5 | What is the effect of the Registration of the Society ? |
| Ans. |
A society has to the registered in order to get benefit under the Act.
The result of registration is set out in Section 36 of Maharashtra Co-operative
Societies Act, 1960, and is identical with the result of registration under
the Companies Act, 1956. According to Section 34 (2) of that Act, the Company
becomes a body corporate, it gets a common seal and it has a perpetual
succession. These are the three important incident of incorporation and
they apply to an association registered under the Co-operative Societies
Act as much as to an association registered under the Companies Act, 1956.
The effect of incorporation of a society is that it becomes a separate entity, having separate existence, apart from its members. These in essence are indicia of a Corporation and it would indicate a fortiori that a co-operative Society duly registered would comes squarely within the ambit of the term "corporation" generally and particularly as the term as used in Act 31A. A registered society being a body corporate, like an individual, has power to acquire, hold and dispose of property, to use common seal on all documents to which it is a party, to enter into contracts, and carry on business. The society, however, not being a living soul, but a corporate soul, has to act through its Managing Committee and officers. |
| Q.6 | What are the benefits of registration of the Society ? |
| Ans. | If
the societies are not registered, the members of the societies are deprived
of several privileges which are required to have under the Co-operative
Housing Societies Act. The Chapter IV of the Co-operative Societies Act
refers to certain duties and privileges, key virtue of registration the
Societies get certain privilege such as
Section 40 : Admissibility of copy of entry evidence. This section provides that the duly certified copy of any entry in a book, register or list kept by a society, shall be admissible in evidence in all proceedings and shall have the same evidentiary value as the original entry, provided the copy is duly certified (Sec. Rule 27(3) and is a copy of an entry made in any book, register or list regularly kept in the course of business. Section 41 : Exemption from compulsory registration of instruments relating to shares and debentures of society; Nothing in clauses (b) and (c) of sub-section (1) of Section 17 of the Indian Registration Act, 1908, shall apply.
To any endorsement upon, or transfer of, any debentures issued by any society. |
| Q.7 | What is the difference between the registration of a society under the Maharashtra Co-operative Act and under the Maharashtra Ownership Flat Act, 1963 ? |
| Ans. | In case of Maharashtra Co-operative Society Act, it is the promoter along with others should submit the proposal for registration and the members should be from different families and not from the same family. They should acquire the land and construct the building. In case of the Maharashtra Ownership Flats Act, 1963, the Promoter enters into an agreement with the purchasers of the Flats. Flats are constructed and obtaining occupation certificate, purchasers of the flats are required to be put into possession and minimum number of persons are required to take possession before such a registration is made. There are various documents which are required to be submitted before the registration is granted. |
| Q.8 | What documents are required to be submitted for Registration under Maharashtra Ownership Flats Act.1963 ? |
| Ans. |
List of documents enclosed with the registration proposal of (Proposed)
Co-operative Housing Society Ltd.
No objection certificate from Competent Authority if are post is more than 500 mts. |
| Q.9 | On what grounds the Registrar can refuse to register the housing Society ? |
| Ans. | The business and management of the society must be carried out as required under the law, rules and bye-laws thereunder. If the application submitted for the registration is not according to law or rules and by-laws, the Registrar has power to refuse the same for registration. However, through there is no defect in the application for registration or the bye-laws are not contrary to this Act or the Rules, the Registrar cannot be compelled to register the society. For instance, if in the same are, a society registered is properly functioning, another society of the same type or class, proposed to be registered, may not be registered, if the Registrar is satisfied that functioning of two such societies is not advisable. |
| Q.10 | Can an appeal be filed against the refusal to register ? Before whom such an appeal is to be filed and within how much time? |
| Ans. | An appeal against the decision of the Register (I) to refuse to register the society or (ii) refuse to register its bye-laws under this section, lies under Section 152(1). The appeal should be filed before the Divisional Joint Registrar within two months from the date of communication. |
| Q.11 | When the Society can be reregistered ? whether appeal can be filed against such order ? |
| Ans. |
The registrar is allowed to deregister the society if he is satisfied that :
Where the power is conferred on the public authority to exercise the same when the authority is satisfied, the Courts will not readily defer to the conclusiveness of the executive authority's opinion as to the existence of a matter of law or fact upon which the validity of existence of the power of the power is predicated. Administrative decisions in exercise of powers, even if conferred in subject terms, are to be made in good faith on relevant consideration. The Proviso to sub-section (1) says that where -
Challenge to proceedings of de-registration. - The latter part of the Proviso says that no proceeding in respect of the de-registraton of the society shall be called in in any Court merely on the ground that the individual notice is not served on any member. Appeal. - An appeal against an order under Section 21-A is provided by Section 152 (1). |
| Q.12 | What steps can be taken if the Deputy Registrar deliberately declining to register the society through the chief Promoter has complied with all requirements ? |
| Ans. |
Some times it appears that builders or promoters are interested in retaining
their right over the property through constructed and the building is duly
occupied by the purchasers of Flat. Some times promoters bring influence
on the Registrar to avoid the registration or delay the registration.
Rule 4 deals with application for registration and inter alia provides that application shall be filled in the prescribed under the Rules and must be accompanied by list of persons who have contributed to the share capital and certificate from the Bank stating credit balance, a scheme showing the details explaining how the working of the society will be economically sound and description of immovable property required to be purchased, acquired or transferred to the Society. If the builder has not submitted all documents and if the builder has failed to do so, the purchasers have submitted necessary documents, the registrar is bound to register the society. In one case the registration was, refused on the ground that 90% of the flat purchasers should have joined the society instead of only 60% found to have joined, the High Court of Bombay held that this type of objection would not justify in declining registration, (Ref. Dr. Devchand Chimanlal Shah and Others V/s State of Maharashtra - Writ Petition No. 1642 of 1983 decided on 20th August, 1984 - Justice M.L. Pendse, 1985 C.T.J. Page 7) |
| Q.13 | Is there any benefit for the purpose of payment of Stamp Duty if the Society is registered ? |
| Ans. |
The Ordinance on 29th August 1988, (Maharashtra Ordinance No.
VI of 1988 issued by Maharashtra Government, Revenue and Forests Department,
which became Maharashtra Act No.XXVII of 1988 on 19th December,
1988) refers to the benefits arising out of the registration of the Society.
It states that :-
Residential premises having area of more than 1000 sq.ft. Rs. 8.5 percent of the value of premises. |
| Q.14 | Whether in a co-operative Housing Society (Tenant Co-partnership Society) immovable property allotted by it to its member can be transferred by the member, with the approval of the society to another person without a registered instrument of transfer ? |
| Ans. |
The provisions of Maharashtra Co-operative Societies Act and Gujarat Co-operative
Act are similar in many respect. Under Section 42 of the Gujarat Co-operative
Societies Act, following views has been taken :-
"Section 42 of the Gujrat Co-operative Societies Act, inter alia, exempts from compulsory registration instruments relating to shares in a society not withstanding that the assets of such society consist wholly or in part of immovable property. Shares in a co-operative housing society have a necessary relation to the immovable properties which the society constructs and which are allotted by the society to its member"another with the approval of the society, he not only transfers the shares but also as a necessary incident thereof transfers his interest in the immovable property which has been allotted to him. What section 42, clause (a) therefore, exempts from the rule of compulsory registration is an instrument relating to "shares in a society" which carry them, as a necessary incident, member's interest inn the immovable property occupied by him, both the land on which the house has been constructed by the society and the house itself vest in the society in the eye of law. It is therefore clear that in case of a "tenant Co-partnership society" the transfer of shares necessarily carries with it the transfer of member's interest in the immovable property allotted to him and that such transfer can be brought a registered instrument because clause (a) of Section 42 carves out an exception to the rule enunciated in sub-section (1) of Section 17 of the Registration Act. (Mulshankar Kunverji Gor and Ors. V/s Juvansinhji Shivubha Jadeja. AIR 1980- Gujrat (Full Bench ) 762) |
| Q.15 | Is it necessary to register bye-laws ? What is the effect ? |
| Ans. | A bye law cannot take effect until it is registered, but if it is otherwise invalid, registration if it will not make it valid bye-law of a society must not be contrary to the Act or the Rules. |
| Q.16 | What are the remedies of the purchasers of flats if the Promoter avoids or delays the registration of the society or execution of conveyance in favour of society ? |
| Ans. |
Even assuming that there is a written agreement entered into under section
4 of the Maharashtra Ownership Flats Act, 1963, which refers to the statutory
obligation of the promoter to take necessary steps for the formation of
the Co-operative Society (as contemplated under Section 10) or to convey
the title, etc. and to execute documents according to the agreements (as
stated in Section 11), if the avoids or fails to do so, a suit for specific
performance or formandatory injunction should be filed against the Promoter
or his agents. If the purchasers of the Flats fail to do so they may not
get the benefit
Even in order to get the benefits under the Ordinance issued on 29th August, 1988, where, in case of the residential premises in a co-operative Housing Society; where building completion certificate of occupation certificates were obtained from the authorities concerned prior to 17th March, 1988, but no conveyance was executed and registered under Registration Act, 1908, the Stamp Duty chargeable on such conveyance, if presented for registration within a period of two years from the date of commencement of Bombay Stamp (Amendment) Act, 1988, will be available. It must, therefore, be noted that if the promoter does not take steps to execute a conveyance the concessions will be available for a period of two years and, therefore, it will be necessary to file a suit in the Civil Court against the promoter, i.e. Builder and Developers and their agents for appropriate reliefs. If the period of two years is over, the benefits will not be available. If the promoter fails to take steps., the purchasers of the flat can file a suit in the Civil Court. It is considered to execute the conveyance as a statutory obligation and it is not necessary for purchasers to pay ad valorum court fees, but fees on the basis of subject matter of the suit not susceptible for monetary values. The suit can be filed by paying only Court fee of Rs. 300/- (Vrindavan Society V/s Karmarkar Bros. 1982 Mh. L.J. 607). |
| Q.17 | Whether it is necessary to have an agreement in writing when a flat is transferred in a Co-operative Society and that whether the registration of an agreement is mandatory ? OR whether it only a transfer share only ? |
| Ans. | "In
the case of a tenant Co-partnership Housing Society the title to the flat
remains in the society and is not affected by the transfer of share in
the society. Only right to occupy the flat flows from the ownership of
the share in such a co-operative society. The shares thereby do not become
immovable property. Transfer of such shares does not require registration
under section 17(1)(b) of the Registration Act.
Even if the transfer of such share is considered as the transfer of interest in immovable property, section 41 of the Maharashtra Co-operative societies Act exempts the document affecting such transfer of share from the ambit of section 17(1) (b) of the Registration Act. An award which delas with transfer of shares in a flat in a tenant co-partnership society does not require registration under section 17(1)(b) of the Registration Act. AIR 1980 Guj.62 Rel. AIR 1975 SC 1470 Ref. (Paras 7-11). - Usha Arvind Dongre V/s Suresh Kotwal 1990 Mh. L.J. 306 (Justic Sujata Mlanohar ). |
In case, one need further guidance please contact the Secretary, Flat Owners
Association,
at the address given below:
(MAHABALESHWAR
MORJE)
© Copyright 1999, The Flat Owner's Association, Mumbai.