From Demonetisation to Digital Currency: How India Led the Global Shift Toward Sovereign Digital Money
From Demonetisation to Digital Currency: How India Led the Global Shift Toward Sovereign Digital Money India is a visionary nation. India had a serious problem of terrorism and funding terrorism through fake currency notes. India, to abate terrorism, opted for demonetisation on 8th November 2016. India introduced digital payment platforms simultaneously. We now have Bharat Pay, G Pay and even every bank has started their UPI. India has shown the world the path towards a digital world. Now, the west side of the globe is following India’s footsteps. USA PASSES LAW OF REGULATORY FRAMEWORK OF DIGITAL CURRENCY: The Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, signed into law in July 2025, establishes the first comprehensive federal regulatory framework for payment stablecoins in the United States. It mandates 100% reserve backing, strict, liquidity requirements, and brings issuers under Bank Secrecy Act (BSA) compliance. Key Aspects of the GENIUS Act (2025-2026): Purpose: To foster innovation in digital assets while protecting consumers and ensuring financial stability. Reserve Requirements: Requires stablecoins to be backed 1:1 by high-quality, liquid assets, such as U.S. dollars or short-term Treasury bills. Issuer Regulation: Only permitted issuers can create payment stablecoins; they must adhere to capital and risk management rules. Consumer Protection: Guarantees redemption rights for stablecoin holders and mandates public disclosures of reserves. Compliance: Subjects issuers to anti-money laundering (AML), countering the financing of terrorism (CFT), and sanction requirements. International Scope: Foreign issuers targeting U.S. users are held to the same standards as domestic issuers. The Treasury Department is actively implementing the law, with public comment periods regarding the regulation of these digital assets extending into late 2025 Overview of U.S. Monetary Evolution The U.S. monetary system has undergone major changes, including: Early issuance of private bank and Treasury currencies. Creation of the Federal Reserve in 1914 as the sole currency issuer. Abandonment of gold and silver convertibility after 1933. These shifts were controversial decisions and actions but are now widely accepted. Emergence of Digital Currencies and CBDC Debate Private digital currencies (e.g., Bitcoin) and foreign CBDCs have prompted U.S. policy debates. A Central Bank Digital Currency (CBDC) is the digital form of a nation’s sovereign currency, issued and regulated by the central bank (e.g., RBI’s “Digital Rupee” or e₹). It acts as legal tender, is interchangeable 1:1 with physical cash, and is designed to make transactions faster, cheaper, and more secure. Key Aspects of CBDCs: Types: Divided into Retail (CBDC-R) for public use and Wholesale (CBDC-W) for interbank settlements. Storage: Held in digital wallets provided by banks, offering 24/7 transactions. Global Status: Over 130 countries, representing 98% of global GDP, are exploring or have launched CBDCs, driven by the need for enhanced digital payment efficiency. Digital Currency Vs. Crypto: Unlike cryptocurrencies, CBDCs are centralised, backed by the state, and not volatile. Goals: Reduce cash-handling costs, improve financial inclusion, and increase cross-border payment efficiency. Key questions include: Whether the Federal Reserve should issue a CBDC. Whether a CBDC would fundamentally change the financial system or simply modernise it. USA Congress has held several hearings and proposed multiple CBDC-related bills in recent sessions. Purpose of the […]
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Digital Euro Initiative: Modernizing Payments and Ensuring Monetary Sovereignty in Europe
Digital Euro Initiative: Modernizing Payments and Ensuring Monetary Sovereignty in Europe European Central Bank (ECB) is driving the digital euro initiative to modernize payments, ensure monetary sovereignty, and complement, not replace, cash. Following completed technical preparations, the project entered a two-year preparation phase in November 2023. A potential rollout is targeted for 2029, with pilot projects expected in 2027 pending legislative approval. Overview • On 28 June, the European Commission proposed legislation to create a legal framework for a digital euro. • The digital euro would be a central bank–issued digital currency designed to complement cash. • It aims to strengthen European retail payments and support the euro’s international role. Objectives • Maintain public access to central bank money in a digital economy. • Respond to declining cash use. • Promote financial inclusion, competition, and innovation. • Enable payments where cash cannot be used, such as online. Relationship with Cash • The digital euro will not replace physical cash. • It is meant to coexist with banknotes and coins. • A parallel proposal protects cash’s legal tender status and accessibility. • Users remain free to choose their payment method. Regulatory Framework • The draft regulation covers: o Legal tender status o Privacy and data protection o Anti-money laundering rules o Distribution and access o Financial stability o International use • The framework is “enabling,” setting core rules without fixing final design details. Digital Euro vs. Bank Deposits • Digital euro: o Issued by the ECB o Liability of the central bank o Similar in nature to cash • Bank account money: o Issued by commercial banks o Private-sector liability • The digital euro may allow offline, proximity payments. Access and User Services • Provided through banks and authorized payment providers. • Alternatives available for people without bank accounts. • Users can switch providers. • Basic services for individuals are free, including: o Account management o Balance checks o Funding and withdrawals o Transfers and payments Privacy Protections • User data handled by service providers, not the ECB. • The ECB will not see users’ identities. • Offline payments offer privacy similar to cash. Holding Limits • Limits may be set to: o Protect monetary and financial stability o Prevent money laundering o Fight terrorism financing Programmability • No automatic restrictions on how money is spent. • Users control how they use their funds. • Conditional payments are possible. Legislative Process and Next Steps • The proposal follows extensive consultations. • It requires approval by the European Parliament and Council. • After adoption, the ECB will decide: o Whether to issue the digital euro o When to launch it o Which design features to adopt Complementary Measures • A separate proposal ensures continued access to cash. • Together, both initiatives aim to guarantee reliable access to public money in all forms. Website: https://www.ecb.europa.eu/euro/digital_euro/html/index.en.html #prof Key aspects of the digital euro : • Strategic Priority: Aimed at strengthening Europe’s financial independence amidst rising private digital currencies and foreign payment solutions. • Key Features: Designed to be a free-of-charge, secure, and instant method for both online and offline payments across the euro area. […]
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Monetary Power in the 21st Century: Theories, and The Rise and Resilience of the Dollar
Monetary Power in the 21st Century: Theories and The Rise and Resilience of the Dollar Printing more dollars hits the US economy hard because it increases the money supply without a corresponding increase in the actual goods and services produced, leading to devaluation and higher prices When the Federal Reserve prints money (or creates it digitally through quantitative easing), it devalues the existing currency, which reduces purchasing power and causes inflation. Here is how printing money hurts the economy: High Inflation: When more money chases the same amount of goods, prices for everyday items rise, as demonstrated in 2021-2022 when high money supply growth led to sharp inflation. Decreased Purchasing Power: As inflation rises, each dollar buys fewer goods and services. This is particularly harmful to consumers, as their wages and savings no longer stretch as far, reducing their standard of living. Erosion of Savings: Inflation act as a “hidden tax” on cash holders. Those with savings, particularly on fixed incomes, see the real value of their money plummet. Loss of Investor Confidence: Excessive, uncontrolled money printing can lead to a loss of faith in the US dollar. If investors believe the currency will continue to lose value, they may shift to more stable assets, reducing the demand for dollars globally. Currency Devaluation Risk: Persistent printing can cause the dollar to weaken against other currencies, making imports more expensive and contributing to trade imbalances. Increased National Debt: When the government prints money to finance spending, it increases the national debt. As the debt grows, it becomes harder for the government to service its obligations without further debasing the currency. Market Bubbles: The influx of money often flows into stocks and real estate rather than into the productive economy, creating asset price bubbles that can lead to financial instability. While printing money can provide a temporary economic boost during a recession, it can cause significant long-term damage if it becomes an addictive tool for handling debt, with historical cases like Germany in the 1920s and Zimbabwe in the 2000s highlighting how it can destroy an economy. THEORY PROPELLED BY VARIOUS ECONOMIST. The concept of printing currency is a highly debated topic among leading economists. On one side, traditional theory stress the importance of maintaining monetary stability, while more modern perspectives support using debt-financed spending to stimulate the economy. At the heart of this debate is the challenge of finding the right balance between leveraging money creation to boost economic activity and managing the potential risks of inflation Here are the primary theories and the authors associated with them: 1. Modern Monetary Theory (MMT) MMT, which gained prominence in the 2010s, argues that governments that issue their own fiat currency (like the US, UK, Japan, and Canada) are not constrained by revenue when it comes to spending. Therefore, they can, and should, print money to fund public services and maintain full employment. Key Authors/Proponents: Warren Mosler (who authored The 7 Deadly Innocent Frauds of Economic Policy and Soft Currency Economics), Stephanie Kelton (The Deficit Myth), L. Randall Wray, and Bill Mitchell. Core Theory: Sovereign governments cannot go broke and do not need […]
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“DE-DOLLARIZATION: DIVERSIFYING FOR A RESILIENT FUTURE”
“DE-DOLLARIZATION: DIVERSIFYING FOR A RESILIENT FUTURE” De-dollarization refers to the process by which countries, institutions, and companies reduce their reliance on the U.S. dollar in international trade, finance, and reserves. In practical terms, it means: Using other currencies (like the euro, yuan, or local currencies) instead of the dollar for trade and payments Holding fewer U.S. dollars in central bank reserves Issuing debt and pricing commodities in non-dollar currencies Settling financial transactions outside the dollar-based system Key idea: Structural vs. Cyclical Demand Structural demand (long-term) This is about the dollar’s role as the world’s main reserve and transaction currency. It includes: Dominance in foreign exchange markets Use in global commodities (oil, gas, metals) Currency used for international loans and bonds Share of global central bank reserves De-dollarization mainly targets this structural role. If it happens meaningfully, the dollar’s global influence weakens over time. Cyclical demand (short-term) This is driven by economic cycles and market trends, such as: Strong U.S. economic growth High U.S. interest rates Strong stock market performance Global investors seeking “safe assets” Recently, strong U.S. performance (“U.S. exceptionalism”) has increased demand for dollars. Investors hold more USD because U.S. assets looked more attractive. A weaker dollar in the future doesn’t automatically mean de-dollarization. It may just reflect changing market conditions. Why countries pursue de-dollarization? As of early 2026, the USA actively imposes financial and trade sanctions via the Office of Foreign Assets Control (OFAC) and Bureau of Industry and Security (BIS). Key targeted countries include Russia, Iran, Cuba, North Korea, Syria, and Venezuela, aiming to restrict trade, influence behavior, and protect national security. Recent actions involve targeting entities linked to Iran’s energy trade, including firms in India, China, and the UAE. Countries may want to reduce dollar dependence to: Avoid U.S. sanctions and financial pressure Reduce exposure to U.S. monetary policy Increase financial sovereignty Strengthen their own currencies Examples include China, Russia, and some BRICS countries promoting trade in local currencies. BRICS SUMMIT 2024 INDIA’S APPROACH ON THE ISSUE The central bank of India, Reserve Bank of India, erstwhile Governor Shaktikanta Das, stated in December 2024 that dedollarization for India was only a part of “derisking” Indian trade and reducing dependence on any one currency since that may become “problematic”. While a BRICS currency had been raised by a member state, nothing specific was decided. He also compared the Euro and stated how nations in Euro countries are located in proximity, while that is not the case with BRICS.This was in response to a question about President-elect Trump warning about tariffs. Former ambassador D. Bala Venkatesh Varma, in an interview with the think tank India Foundation, states that India’s stance in BRICS is “pro-India” and “claiming that BRICS is dominated by China is an exaggeration”. ( wikipedia) US Gold Reserves: Stability, Not Decline US gold reserves have remained unchanged for decades, currently at 8,133.46 tonnes (about $11.041 billion at official valuation). The US remains the world’s largest official holder of gold, accounting for over a quarter of global central bank gold reserves. While the US gold stock is stable, other countries—especially China, Russia, and several emerging markets—have accelerated […]
Read moreTHE U.S. DOLLAR’S JOURNEY: BUILDING AND SUSTAINING GLOBAL SUPREMACY
America rules the world because trade is dominated by dollar. The U.S. dollar’s dominance stems from the massive, stable U.S. economy, its deep and liquid financial markets (like US Treasury markets), the rule of law, and trust in American institutions, solidified by the 1944 Bretton Woods Agreement that pegged other currencies to the dollar, backed by gold. Even after abandoning the gold standard, its role as the primary currency for global trade (especially oil), its role as a safe haven in crises, and the established infrastructure for dollar transactions (like SWIFT) cemented its status, giving the U.S. unique financial power. The 1944 Bretton Woods Agreement, signed by 44 nations alliance in New Hampshire, which was established after-WWII to run and manage international monetary system based on fixed exchange rates, with the U.S. dollar pegged to gold ($35/ounce) and other currencies pegged to the dollar. It created the IMF and World Bank to foster stability, lasting until 1971 The Bretton Woods Framework: Foundations of Modern Global Finance In July 1944, nearly 730 representatives from 44 countries gathered at Bretton Woods to design a stable and efficient system for international currency exchange, discourage harmful currency devaluations, and encourage global economic development. The resulting Bretton Woods Agreement was instrumental in achieving these aims, establishing the International Monetary Fund (IMF) and the World Bank as key institutions. Although the original Bretton Woods system ended in the 1970s, both the IMF and World Bank continue to play essential roles in supporting international currency exchange and maintaining global financial stability. ( curtsy National WWII Museum) Harry Dexter White: Architect of Bretton Woods and Controversial Legacy Harry Dexter White played a pivotal role in shaping the Bretton Woods Agreement, which led to the creation of the International Monetary Fund (IMF) and the World Bank. As a government economist, White was instrumental in designing the postwar global economic order and contributed significantly to establishing the United States as a dominant world power. Despite these achievements, his legacy has often been clouded by allegations of espionage, with claims that he acted as a Soviet spy. While these accusations have persisted over time, they remain unproven, and some evidence suggests his innocence. Bretton Woods 1944: The Birth of Modern Global Finance Two major institutions were created: The International Monetary Fund (IMF), tasked with monitoring exchange rates and providing short-term loans to countries facing balance-of-payments deficits. The International Bank for Reconstruction and Development (IBRD/World Bank), designed to finance postwar reconstruction and economic development. The agreement delivered nearly three decades of monetary stability for Western economies, fostering international trade. However, it ultimately collapsed in 1971 when the U.S. ended dollar-to-gold convertibility. Despite this, the institutions founded at Bretton Woods remain central pillars of the global financial system today. The Nixon Shock: What Happened? On August 15, 1971, U.S. President Richard Nixon announced a series of sweeping economic measures that fundamentally changed the global financial system. The most significant of these was the unilateral suspension of the U.S. dollar’s convertibility into gold, effectively ending the Bretton Woods system of fixed exchange rates that had governed international finance since World War II. [en.wikipedia.org] Key […]
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“UNVEILING THE SFIO: INDIA’S MULTI-DISCIPLINARY AGENCY Ft5tt5OR CORPORATE FRAUD INVESTIGATION”
“UNVEILING THE SFIO: INDIA’S MULTI-DISCIPLINARY AGENCY FOR CORPORATE FRAUD INVESTIGATION” NOTIFICATION: The Central Government, by notification, established an office called the Serious Fraud Investigation Office to investigate frauds relating to a company: The said office is setup by the Central Government in terms of the Government of India Resolution No. 45011/16/2003-Adm-I, dated the 2nd of July 2003 and shall be deemed to be the Serious Fraud Investigation Office for the purpose of this section. SET UP The Serious Fraud Investigation Office is headed by a director and consist of such number of experts from the following fields to be appointed by the Central Government from amongst persons of ability, integrity and experience in,— (i) banking; (ii) corporate affairs; (iii) taxation; (iv) forensic audit; (v) capital market; (vi) information technology; (vii) law; or (viii) such other fields as may be prescribed. Director in the Serious Fraud Investigation Office, shall be an officer not below the rank of a Joint Secretary to the Government of India having knowledge and experience in dealing with matters relating to corporate affairs. The Central Government may appoint also experts and other officers and employees in the Serious Fraud Investigation Office as it considers necessary for the efficient discharge of its functions under this Act. The terms and conditions of service of Director, experts, and other officers and employees of the Serious Fraud Investigation Office shall be such as may be prescribed. (see rules) RULES OF APPOINTMENT 14.1.3- Companies (Inspection, Investigation and Inquiry) Rules,2014 3. Appointment of persons having expertise in various fields.— The Central Government may appoint persons having expertise in the fields of investigations, cyber forensics, financial accounting, management accounting, cost accounting and any other fields as may be necessary for the efficient discharge of Serious Fraud Investigation Office (SFIO) functions under the Act. 14.1.4-Companies (Inspection, Investigation and Inquiry) Rules,2014 Terms and Condition of service.— The terms and conditions of service of Director, experts and other officers and employees of the Serious Fraud Investigation Office under sub-section (5) of Section 211 shall be as under— (a) the terms and conditions of appointment of Director shall be governed by the deputation rules under the Central Staffing Scheme of Government of India; (b) the terms and conditions of service of experts from the Central Government or the State Government or Union territory Government, Public Sector Undertaking, Autonomous Bodies and such other organizations shall be as per the recruitment rules which may be duly notified by the Central Government under article 309 of the Constitution of India; (c) the terms and conditions of service of other officers and employees from the Central Government or the State Government or Union Territory Government, Public Sector Undertaking, Autonomous Bodies and such other organizations shall be as per the recruitment rules which may be duly notified by the Central Government under article 309 of the Constitution of India; (d) the Central Government may appoint experts or consultants or other professionals or professional firms on contractual basis as per the Scheme of engagement of experts or consultants which may be duly approved by the Central Government. India’s Companies Act, 2013, specifically Sections 211 and […]
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“UNMASKING MONEY LAUNDERING: INTERNATIONAL LAWS, TECHNIQUES, AND LANDMARK CASES”
Money laundering laws evolved from early record-keeping rules (like the US Bank Secrecy Act, 1970) into a sophisticated global framework, driven by the war on drugs and terrorism, with the FATF (1989) setting global standards (40 Recommendations). Key milestones include the Vienna Convention, US Patriot Act, and EU AML Directives, continually expanding scope to cover new tech like crypto (FATF Rec 15) and closing loopholes in corporate transparency, with laws like India’s PMLA (2002) following global norms. Early Stages (1970s-1980s) Focus: Initial efforts, like the 1970 US Bank Secrecy Act, targeted drug trafficking proceeds, shifting from basic reporting to criminalizing the act itself. Motivation: Governments recognized the financial system’s vulnerability and sought tools to seize illicit gains, especially from organized crime. International Standardization (1989-2000s) FATF: The Financial Action Task Force (FATF) was created in 1989, becoming the primary international body issuing guidelines (40 Recommendations) for a unified global approach to combat financial crime. United Nations: The Vienna Convention (1988) marked a major early international step, targeting drug-related money laundering. Expansion: Efforts broadened beyond drugs to combat terrorist financing, leading to the FATF’s “+9” Special Recommendations and revised 40 Recommendations by 2012. Modern Era & Technological Challenges (2000s-Present) EU Directives: The EU’s series of Anti-Money Laundering Directives (AMLDs) progressively strengthened rules on Customer Due Diligence (CDD) and expanded criminal liability. USA PATRIOT Act: This significantly enhanced US AML laws post-9/11, increasing scrutiny. Digital Assets: In 2019, FATF extended its standards to cover virtual assets (crypto), requiring regulation for Virtual Asset Service Providers (VASPs). Beneficial Ownership: Recent FATF updates (2022) focus on combating criminals hiding behind secret corporate structures. Global Response: Countries like India (PMLA, 2002) and others enacted laws aligning with these global standards, dealing with issues like fintech and new criminal typologies. KEY THEMES IN EVOLUTION From Banking to All Sectors: Regulations now cover fintech, crypto, and other areas, not just traditional banks. Transparency: Moving from a system of trust to one demanding transparency and accountability. Adaptability: Laws constantly evolve to counter new criminal methods, from physical cash to digital mixers Definition: The process of converting illicit funds (dirty money) into funds with an apparently legal source (clean money). Purpose: To use the proceeds from crime without detection by law enforcement, funding further criminal enterprises. Stages: Placement: Introducing the “dirty” cash into the financial system (e.g., small cash deposits). Layering: Obscuring the money’s origin through complex transactions, like electronic transfers or shell companies. Integration: Reintroducing the money as legitimate earnings through investments or purchases (e.g., real estate, luxury goods). Example: The Restaurant Scheme A criminal owns a cash-intensive business, like a restaurant or car wash, which generates legitimate revenue. They mix illegally obtained cash with the actual daily earnings. The business then reports the inflated, combined total as legitimate sales, depositing it into a bank account. The money is now “laundered” and appears as ordinary business revenue, making it usable by the criminal. Other Examples & Methods Shell Companies: Creating fake companies to funnel money through. Invoice Fraud: Manipulating invoices (over- or under-invoicing) for goods and services to justify moving money. Smurfing: Making numerous small cash deposits to avoid triggering […]
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CAN A HOUSING SOCIETY SELL TDR TO A PRIVATE MEMBER OF THE SOCIETY UNDER DOCUMENT OF MEMORANDUM OF UNDERSTANDING AND RESOLUTIONS?
JURISDICTION OF CO-OPERATIVE COURT AND BINDING NATURE OF SOCIETY RESOLUTIONS Let us first see what is TDR? Transferring Development Rights (TDR) by a housing society involves the society, as a landowner, generating extra buildable area (TDR) by surrendering land for public use (like roads, parks) to the municipality, receiving a TDR certificate (or Development Right Certificate – DRC), and then selling these rights to a developer or another party to build more than standard Floor Space Index (FSI) allows, benefiting both the society (compensation for land) and the buyer (extra construction rights). This process helps fund infrastructure projects and allows societies to get value for reserved plots, making TDR a crucial tool in urban development, especially in places like Mumbai. How it Works for a Society: Land Surrender: The housing society owns land, often designated for public amenities (e.g., a playground, road widening) by the city. TDR Generation: Instead of cash compensation, the Municipal Corporation (like MCGM in Mumbai) issues a TDR certificate (DRC) to the society, representing the Floor Space Index (FSI) potential of the surrendered land. Selling the Rights: The society can then sell this certificate to a builder or another property owner. Utilisation: The buyer uses the TDR to construct additional built-up area on their own plot, exceeding the normal FSI limits, often in a designated “receiving zone”. Benefits of TDR for Societies Financial Compensation: Provides funds for the society (often through developers) without the government paying cash, allowing land acquisition for public projects. Development Incentive: Encourages development and helps resolve land reservations, as owners get value for undevelopable land. Legal Avenue: Offers a way for societies and trusts to utilize or sell their development potential POINT OF CAUTION: A Housing Society cannot legally sell Transferable Development Rights (TDR) to a private member using only a Memorandum of Understanding (MoU) and Resolutions. TDR transactions must follow a formal, regulated process involving proper documentation and approval from the competent authorities to be legally valid. Legal Requirements for TDR Transfer : TDR is a formal legal instrument: TDR is an official development right issued by a municipal authority as a Development Right Certificate (DRC). This certificate is a tradeable commodity, similar to a stock, in a formal market. Formal Agreements are Required: Any transaction involving the sale or transfer of TDR requires a registered agreement, such as a formal TDR Sale Agreement, not just an MoU or simple resolutions. The agreement must be registered under the Registration Act, 1908. Statutory Compliance and Oversight: The transaction must comply with the relevant state laws, such as the Maharashtra Regional and Town Planning (MRTP) Act, 1966, and local Development Control Regulations (DCRs). Regulatory Approvals: The transfer must be registered with the Sub-Registrar and updated on the relevant municipal or urban local body’s (ULB) online TDR portal (if available). Authorities track the chain of ownership and usage of TDRs to prevent misuse and ensure transparency. Transparency and Fair Value: Transactions by a housing society, especially those involving a private member, are subject to scrutiny to ensure the society receives fair market value and to prevent irregularities or fraud. Risks of Using Only […]
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UNTRACEABLE MEMBERS AND PROPERTY RIGHTS IN COOPERATIVE HOUSING SOCIETIES: PROCEDURES AND PRECEDENTS
In the model bye-laws of a cooperative housing society (such as those in Maharashtra), a member is deemed to have ceased membership if their whereabouts are unknown for a continuous period of seven years and their shares and interest in the property are unclaimed by anyone else. This cessation allows the society to take further action regarding the property. Procedures and Provisions While specific actions for handling the property itself require legal procedures beyond just the society’s internal rules, the bye-laws provide a framework for managing the situation and ultimately dealing with the ownership: Cessation of Membership: Bye-law No. 55(f) (in the Maharashtra Model Bye-laws) explicitly states that a person shall cease to be a member if their whereabouts are not known for seven continuous years and no claim is made on their interest in the property. However, the associate member shall not cease to be Associate Member when the First Member ceases to be the member of the society if Associate Member holds title and interest in the property jointly with the member. The Committee shall take further action in the matter as indicated in the Bye-law No. 62. Vesting of Shares/Interest: If, after a member’s death or disappearance, there is no claimant (nominee, heir, or legal representative), their shares and interest in the capital/property of the society will vest in the society itself. Nominations and Legal Heirs: The bye-laws heavily emphasize the importance of nomination (Bye-law No. 32-34). If an owner is untraceable and has no nominee, the committee would typically ask for a legal representative or heir to come forward. Payment of Dues: The untraceable owner’s account would likely accumulate unpaid maintenance charges and other dues, incurring interest (up to 21% per annum in some model bye-laws). These liabilities must typically be cleared before any transfer of interest can occur. Formal Communication: The society uses formal communication methods, such as registered post to the last known address or displaying notices on the society’s notice board, which are considered valid service of notice even if the member is untraceable. The society must maintain records of all sent notices as proof. Committee Action: The managing committee has the power to manage the society’s affairs (Bye-law No. 111), which includes dealing with non-compliance and cessation of membership. They are responsible for initiating the process of addressing the untraceable owner’s status. Registrar and Courts: The final authority in serious disputes or complex situations, such as an untraceable owner with no clear legal path forward, ultimately lies with the Registrar of Cooperative Societies or a Cooperative Court. The society would likely need to approach these legal bodies for formal orders to take control of or dispose of the property. DISCUSSION: A is member and have signed Conveyance. A is not traceable for more than 40 years. Taking advantage of situation widow of promoter applies for membership. It was rejected. During course of arguments she sell the flat. After two decades the flat goes for redevelopment. The purchaser of the flat sells flat to the third party. Society refuses all a membership, In a recent ruling of Supreme Court of India K, Gopi […]
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“LEGAL IMPLICATIONS OF UNTRACEABLE SELLERS AND OWNERS IN HOUSING SOCIETY SHARE TRANSFERS”
Today we are discussing very important issue of transfer of shares in a society when a seller is not traceable and when Owner is not traceable. What is the difference between the two? Before going to the core issue let us first learn definition of the term “member” under the Maharashtra Co-operative Society Act 1960 and the Bye-laws. Bye-Laws 3 (xxiv) “Member” means a person joining in an application for the Registration of a Cooperative Housing Society which is subsequently registered, or a person duly admitted to Membership of a Society after Registration and who holds the right, title and interest in the property individually or jointly; Share Capital: a.) A Share Certificate, prescribed in bye-laws, bearing distinctive number and indicating the name of the Member, the number of shares issued and the value paid there on, shall be issued by the Society to every Member for the shares subscribed by him, within a period of six months of the allotment of the shares. Conditions of Membership: 19. An individual / applicant who is eligible to be the Member and who has applied for Membership of the Society in the prescribed form, may admitted as Member by the Committee on complying with the following conditions :- i. applicant has fully tendered the value of at least Ten shares of the Society, along with his Application for Membership; ii. applicant has paid the Entrance Fee of Rs. 100/-, along with the Application for Membership; iii. applicant has submitted the application as prescribed, of the particulars in regard to any house, plot or flat owned by him or any of the Members of his family, anywhere in the area of operation of the Society; iv. applicant has submitted undertaking in the prescribed form to the effect that he shall use the flat / unit for the purpose for which it was purchased by him; v. applicant has furnished an undertaking in the prescribed form, if he / she has no independent source of income; vi. applicant has submitted, along with the application for Membership of the Society, a certified copy of the agreement, duly stamped and registered entered into by him / her/ them with the Promoter Builder or Transferor under Section 4 of the Maharashtra Ownership of Flats Act;applicant has furnished such other undertakings/declarations, in the prescribed forms as are required under any law for the time being in force and such other information as is required under the Bye-laws of the Society along with the application for Membership. viii. In case of Societies registered under the jurisdiction of special planning Authority like CIDCO / MHADA / SRA / MMRDA etc. the applicant should be eligible person as per the provision of respective Act and the directives of the Govt. / the Planning Authorities, if any. Note : The conditions at (iii), (iv), (v), and (vii) above shall not be applicable to the Promoter Builder, applying for Membership of the Society, in respect of the unsold flats. An Individual, a Firm, a Company or a Body Corporate, registered under any Law for the time being in force, who/ which is eligible to be an Associate Member and who/which shall […]
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