QUESTIONS & ANSWERS
UNDER MAHARASHTRA CO-OPERATIVE SOCIETIES ACT

BY
MAHABALESHWAR N. MORJE

Q.1. What is the object and purpose of Co-operative Societies Act?
Q.2. What are the provisions regarding the restrictions on the children of a member in a Co-operative Society? Is he prevented from contesting Elections? Will it be proper and justifiable to exclude or exempt the members of some of the religions from the provisions of new amendment? 
Q.3. Whether the members of the committee are jointly or severally responsible for all their acts and for every decision relating to the business of the Society? Is it also mandatory for the members of the committee to execute the bond in the manner specified so that committee conducts the business of the society with due care and more responsibility?
Q.4. Is it true that the provisions relating to the no confidence motion are amended? What are the new amendments?
Q.5. Whether orders, decisions, award and actions of Registrar can be deem to be the dispute for the purpose of Section 91 of Maharashtra Co-operative Societies Act? 
Q.6. When New committee has been constituted before the expiry of the term of the existing committee? Can registrar superceed the committee and appoint Administrator?
Q.7. What precautions are taken by law to prevent the members who try to delay the payment of maintenance charges by filing Appeal or revision against the order passed against Section 101 of MCS Act?
Q.8. What is the purpose and effect of Nomination? In case of the dispute regarding the nomination what is the remedy? 
Q.9. What ground a member can be expelled? What procedure is required before expulsion? Whether approval of Registrar is required? Whether appeal can be filed against the order of expulsion? 
Q.10. What is the procedure for resignation by a member of Committee/Chairman/Secretary of a Society?
Q.11. What is the procedure for removing the Chairman/Secretary of the Society from his post?
Q.12. What is the limit of expenditure that the managing committee shall incur on repairs and maintenance?
Q.13. Which are the circumstances under which, the registrar can remove a managing committee and appoint an administrator to run a society?


Q.1. What is the object and purpose of Co-operative Societies Act?
Ans.      Co-operation is a form of organization wherein persons voluntarily associate together as human beings on the basis of equality and work together for a common end. In this sense, it has been found absolutely necessary for the progress and civilization of mankind. Co-operation is the voluntary association of persons for doing business, the basis of association being equality and the object, the satisfaction of a common need, viz. the economic improvement of themselves. In all its manifestation co-operation is the application to economic life of the principle that unity is strength. The essence of co-operation is the co-operative spirit embodied in the motto of the co-operative Union of Manchester "Each for all and all for each" i.e. each shall work for all and all shall work for each in the attainment of their common need. It is a movement for the weak: mutual help is its keynote: desire to serve is its animating spir   Co-operative is not merely business but a combination of business and a spirit of service which evokes loyalty, fellowship and a corporate feeling. Co-operation, therefore, appeals to self-interest as well as to social instinct. It is because of the spirit of service in co-operation that it helps not merely the economic, but also the social well-being of the community that takes to co-operation. Philanthropy is, no doubt, one of the noblest instincts of humanity, but philanthropy waits till suffering arises and then steps in to relieve it. But true benevolence arising from a sense of social service will avoid the evil day and use preventive measures, such measures, being intended not merely to help, but to help people to help themselves.

     Moral Movement The Co-operative movement is an economic movement essentially, but with a moral background, and high ideals. The movement represents really a new spirit, the spirit of association, self-reliance and harmony animating the impulse towards economic betterment upwards striving and better living. The new spirit helping to make better men and a better society. it is a creed, a faith that elevates, that rules out angularities that promotes a feeling of brother hood, that inculcates the desire for mutual help, self reliance and justice, and that demands suppressions of class feuds and international wars breathes international peace and harmony. Co-operation by itself is not separate activity. It is a method by which several, in fact all activities of the individual and of the group are organised taking the people and the country to the goal namely the establishment of a co-operative commonwealth.

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Q.2. What are the provisions regarding the restrictions on the children of a member in a Co-operative Society? Is he prevented from contesting Elections? Will it be proper and justifiable to exclude or exempt the members of some of the religions from the provisions of new amendment? 
Ans.    Section 73-FF and 144-E provide disqualification of membership of the committee and of the committee of the specified society, respectively, on the grounds specified therein. To encourage and promote the concept of smaller family and thereby to achieve the control of population growth also through the members of the co-operative society, the Government has decided to provide for prospectively disqualifying the member of the society having more than two children for being qualified for election as or being a member on the society or body of the society.  It will not be proper to exclude some citizens on the basis of caste, race, or religion it will be discriminatory or arbitratory, therefore it will be violate Article 14 of Constitution of India. (Maharashtra Co-op.Soc.(Second Amendment) Act, 2001 (Mah.34 of 2001) (W.e.f. 7.9.2001)

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Q.3. Whether the members of the committee are jointly or severally responsible for all their acts and for every decision relating to the business of the Society? Is it also mandatory for the members of the committee to execute the bond in the manner specified so that committee conducts the business of the society with due care and more responsibility?
Ans.    Several complaints are received against the big co-operative housing societies stating that some of the members of the committee take exorbitant transfer fee which varies from Rs.25,000/- to Rs.10 lacs or thereabouts. The Complaints are also received against the members where the contracts are given for repairs of the building without inviting the tenders. The complaints are also received for replacing the new lift under the false pretext that earlier lift has gone out of order. Some of the members of Managing Committee looks towards the society as a business and try to make profit themselves. This is contrary to the object of the Maharashtra Co-operative Societies Act and rules thereunder and therefore Section 73 is amended making it mandatory for the members of the committee to execute the bond referring to the conduct of the society with due care and more responsibility. (Mah.41 of 200) (W.e.f. 23.8.2000)

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Q.4. Is it true that the provisions relating to the no confidence motion are amended? What are the new amendments?
Ans.    As per the existing provisions of Section 73-ID (1) of the Maharashtra  Co-operative Societies Act, 1960, no confidence motion filed against the office bearers of the Co-operative societies are decided by the simple majority of the total number of the committee members who are entitled to vote at the election of such office bearers. This creates the situation of instability in the working of the management of the societies as some of the groups indulge in the activity of pursuing the members to make the simple majority on one side or the other with ulterior motive and this is not in the interest of the co-operative movement. It is, therefore, considered expedient to amend the provisions of the said section 73-ID so as to provide that no confidence motions filed against the office bearers shall be decided only by the two-thirds majority instead of simple majority, as was the provision obtaining originally.

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Q.5. Whether orders, decisions, award and actions of Registrar can be deem to be the dispute for the purpose of Section 91 of Maharashtra Co-operative Societies Act? 
Ans.    These Orders or decisions cannot be deem to be dispute under section 91 of Maharashtra Co-operative Societies Act and therefore no dispute can be filed challenging the legality or validity of the Act.

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Q.6. When New committee has been constituted before the expiry of the term of the existing committee? Can registrar superceed the committee and appoint Administrator?
Ans.    Under clause (e) of Section 77A, if for any reason whatsoever, new committee is not constituted before the expiry of the term of the existing committee, the Registrar is empowered to supersede the committee and appoint Administrator. As the existing committee cannot be held responsible, if the election is not held in time, by the election officer appointed for the purpose; the Government has decided to remove such un-reasonable provision by deleting the said clause. 

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Q.7. What precautions are taken by law to prevent the members who try to delay the payment of maintenance charges by filing Appeal or revision against the order passed against Section 101 of MCS Act?
Ans.    It must be noted that it is the duty of the members to pay the maintenance charges very regularly in the interest of efficient management of the society, however some of the members though they have money avoid making the payment of maintenance charges. In order to curb the practice of delaying the recovery process as a result of defaulters resorting to the practice of filing revision applications, Government has decided to amend section 154 of the Act suitably, so as to provide for the depositing of fifty per cent, amount of the recoverable dues by the applicant at the time of filing such revision application. (MAH.41 of 2000 w.e.f.23rd August 2000).

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Q.8. What is the purpose and effect of Nomination? In case of the dispute regarding the nomination what is the remedy? 
Ans.    The purpose of the nomination is to make certain the person with whom the society has to deal and not to create interest in the nominee to the exclusion of those who in law will be entitled to the estate. The nominee cannot be said to have become the owner of the property qua the other heir merely by virtue of the nomination. The other heirs may get their rights decided, and the society is bound by the decision.
 The form of the Nomination even though attested by two witnesses, cannot be treated as Will, as it is not executed with the intention to create succession after the death.
 In a housing society, the nomination can be only with respect to shares, and land allotted to the members. Nomination in respect to the building constructed by the member is invalid.
 The nomination of a successor to his share or interest in the society should be made by the member under his signature in the book kept by the society for that purpose (R.26, R.32). According to S.38 it is also entered in the Register of members against the name of the member. The person nominated may be a minor and need not be an heir or relative of such member. The effect of valid nomination is to vest the share or interest, on the death of the member, in his nominee. 

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Q.9.  What ground a member can be expelled? What procedure is required before expulsion? Whether approval of Registrar is required? Whether appeal can be filed against the order of expulsion? 
Ans.    The provision to expel member is under sec.35 for this ---
   Expulsion of a member is a serious punishment and consequently to avoid abuse of such power various checks are provided by this section 
(i) The acts of the member must be detrimental to the interest or proper working of the society 
(ii) The society has to call its general meeting for that purpose. 
(iii) The resolution of the expulsion should be discussed, at such meeting 
(iv) The member concerned should be given notice of resolution and of the date, time and place of the meeting 
(v) Where notice of the meeting was not given, the expulsion is illegal. 
  He should be given opportunity at the meeting to defend his acts; he may do so by himself or through other members (b). 
(vi)The resolution should be passed by three-fourths majority, and not by simple majority. 
(vii) The resolution should receive the approval of the Registrar. There was no similar provision under the repealed Act. Dispute about the expulsion of the member falls under S.91.


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Q.10. What is the procedure for resignation by a member of Committee/Chairman/Secretary of a Society?
Ans.    If any member of the committee wants to resign his membership, he should send the resignation letter to the Chairman. The resignation will be effective from the day it is accepted by the committee or after expiry of one month from the date of receipt of the letter of resignation by the Chairman which ever is earlier. If the chairman wants to resign his post he has to submit the resignation letter to the secretary. Similarly, if the secretary wants to resign his post, he has to submit the resignation letter to the chairman. The committee should accept the resignation of the chairman or secretary only after the chairman/secretary completes the work entrusted with them and produces all the papers in their possession.

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Q.11. What is the procedure for removing the Chairman/Secretary of the Society from his post?
Ans.    The chairman or secretary of a society can be removed from office by passing a no confidence resolution by a special meeting of the committee called for that purpose. Notice for such a special meeting has to be given by at least 1/3rd of the members of the committee and the resolution must be supported by at least 3/4th of the committee members present and voting. The special meeting of the committee for passing the no confidence resolution against the Chairman / Secretary must be attended by at least 2/3rd of the committee members.

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Q.12. What is the limit of expenditure that the managing committee shall incur on repairs and maintenance?
Ans.    The committee shall be competent to incur expenditure on the repairs and maintenance of the society's property.  If the one time expenditure does not exceed:
 
Upto 25 members 
26 to 50 members 
51 and above 
Rs. 25,000/-
Rs. 50,000/-
upto Rs. 1,00,000/-
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Q.13. Which are the circumstances under which, the registrar can remove a managing committee and appoint an administrator to run a society?
Ans.    Under section 78 of the Act, the registrar is empowered to remove all members of a managing committee of a society. After removing the committee, the registrar may appoint another committee or appoint an administrator to run the affairs of the society. The registrar may exercise his powers under section 78 of the Act under the following circumstances:
  • When the committee of any society makes persistent default or is negligent in the performance of its duty.
  • When the committee commits any act, which is prejudicial to the interests of the society or its members.
  • When the committee wilfully disobeys any direction given by the registrar.
  • When the committee is not discharging any of its functions or refuses to discharge its functions and the society's functioning is likely to come to a standstill.
  • When members of the committee become disqualified to hold the office.
   In the event of any such situation arising, the registrar is empowered to remove the managing committee or any of its members and appoint another committee. Alternatively, the registrar can appoint one or more administrators to manage the affairs of the society. Appointment of such administrator or administrators shall be initially for a period not exceeding 2 years. The Registrar shall extend the period of the administrator from time to time , but the total period should not exceed 4 years in the aggregate.

   Before removing the committee of a society or any of its members the registrar should give minimum 15 days notice to the committee or the member asking the committee or the member , as the case may be, to show cause why the committee or the member should not be removed from office . If any explanation is given , registrar has to consider the same , before removing the committee/member from the post.

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    In case, one need further guidance please contact the Secretary, Flat Owners Association, at the address given below:

(MAHABALESHWAR MORJE)
Gen. Secretary.


23, Hamam Street, 3rd Floor , Above Quality Machine Tools , Fort , Mumbai - 400 023
Tel : +91-22-22650284/22657291 , Fax: +91-22-22657291
© Copyright 2002, The Flat Owner's Association, Mumbai.
Updated On 19th April 2002.