Today we are going to discuss unique issues relating to a housing society.
Human beings when getting even a little bit of power, behave like King-Queen. This is normal psychology. Taking into consideration this psychology and jurisprudence every law is enacted.
Now we shall deal with the questions individually
WHAT ARE THE PROVISIONS AND REQUIREMENTS FOR THE TRANSFER/TRANSMISSION OF SHARES UNDER MAHARASHTRA CO-OPERATIVE HOUSING SOCIETY LAWS?
( MAHARASHTRA)
Following are the relevant provisions of the Maharashtra Housing Society for transfer and transmission of shares and interest in the society.
- Open membership.—
(1) No society shall, without sufficient cause, refuse admission to membership to any person duly qualified therefore under the provisions of this Act and its bye-laws.
(1-A) Where a society refuses to accept the application from an eligible person for admission as a member, or the payment made by him in respect of membership, such person may tender an application in such form as may be prescribed together with payment in respect of membership, if any, to the Registrar, who shall forward the application and the amount, if any so paid, to the society concerned within thirty days from the date of receipt of such application and the amount; and thereupon if the society fails to communicate any decision to the applicant within sixty days from the date of receipt of such application and the amount by the society, the applicant shall be deemed to have become a member of such society. If any question arises whether a person has become a deemed member or otherwise, the same shall be decided by the Registrar after giving a reasonable opportunity of being heard to all the concerned parties.
(2) Any person aggrieved by the decision of a society, refusing him admission to its membership, may appeal to the Registrar. Every such appeal, as far as possible, be disposed of by the Registrar within a period of three months from the date of its receipt:
Provided that, where such appeal is not so disposed of within the said period of three months, the Registrar shall record the reasons for the delay.
(3) The decision of the Registrar in appeal, shall be final and the Registrar shall communicate his decision to the parties within fifteen days from the date thereof:
(4) Without prejudice to the foregoing provisions of this section, in the case of agro-processing societies or any other society for which a definite zone or an area of operation is allotted by the State Government or the Registrar, it shall be obligatory on the part of such society to admit, on an application made to it, every eligible person from that zone or the area of operation, as the case may be, as a member of such society, unless such person is already registered as a member of any other such society, into the same zone or the area of operation.
- Restrictions on transfer or charge on share or interest.—
(1) Subject to the provisions of the last preceding section as to the maximum holding of shares and to any rules made in this behalf, a transfer of, or charge on, the share or interest of a member in the share capital of a society shall be subject to such conditions as may be prescribed.
(2) A member shall not transfer any share held by him or his interest in the capital or property of
any society, or any part thereof, unless-
(a) he has held such share or interest for not less than one year;
(b) The transfer is made to a member of the society or to a person whose application for membership has been accepted 3by the society, or to a person whose appeal undersection 23 of the Act has been allowed by the Registrar or to a person who is deemed to be a member under sub-section (1A) of Section 23.
(3) Notwithstanding anything contained in sub-sections (1) and (2), where a member is allowed to resign, or is expelled, or ceases to be a member on account of his being disqualified by this Act, or by the rules made there under or by the bye-laws of the society, the society may acquire the share of interest of such member in the share capital by paying for it at the value determined in the manner prescribed, provided that the total payment of share capital of a society in any financial year for such purposes does not exceed ten percent of the paid-up share capital of the society on the last day of the financial year immediately preceding.
Explanation I – The right to forfeit the share or interest of any expelled member in the share capital by virtue of any bye-laws of the society, shall not be affected by the aforesaid provision.
Explanation II – In this section, the expression “financial year” means the year ending on the 31st day of March or in the case of any society or class of societies the accounts of which are with the previous sanction of the Registrar balanced on any other day; the year ending on such day.
(4) Where the State Government is a member of a society, the restrictions contained in this section shall not apply to any transfer made by it of its share or interest in the capital of the society; and that Government may, notwithstanding anything in this Act, withdraw from the society its share capital at any time, after giving to the society notice thereof of not less than three months.
- Transfer of interest on death of member.
(1) On the death of a member of a society, the society shall transfer the share or interest of the deceased member to a person or persons nominated in accordance with the rules or, if no person has been so nominated, to such person as may appear to the committee to be the heir or legal representative of the deceased member:
Provided that, such nominee, heir or legal representative, as the case may be, is duly admitted as a member of the society;
Provided further that, nothing in this sub section or in section 22 shall prevent a minor or person of unsound mind from acquiring by inheritance or otherwise, any share or interest of a deceased member in a society
(2) Notwithstanding anything contained in sub section (1), any such nominee, heir or legal representative, as the case may be, may require the society to pay to him the value of the share or interest of the deceased member, ascertained in accordance with the rules.
(3) A society may pay all other moneys due to the deceased member from the society to such nominee, heir or legal representative, as the case may be.
(4) All transfers and payments duly made by a society in accordance with the provisions of this section shall be valid and effectual against any demand made upo38. Register of members.—
(1) Every society shall keep a register of its members and enter therein the following particulars, that is to say,—
(a) the name, address and occupation of each member ;
(b) in the case of a society having share capital, the share held by each member,
(c) the date on which each person was admitted a member;
(d) the date on which any person ceased to be a member; and
(e) such other particulars as may be prescribed :
Provided that, where a society has by or under this Act, permitted a member to transfer his share or interest on death to any person, the register shall also show against the member concerned the name of the person entitled to the shire or interest of the member, and the date on which the nomination was recorded.
(2) The register shall be prima facie evidence of the date on which any person was admitted to membership, and of the date on which he ceased to be a member in the society by any other person
- Register of members.—
(1) Every society shall keep a register of its members and enter therein the following particulars, that is to say,—
(a) the name, address and occupation of each member ;
(b) in the case of a society having share capital, the share held by each member,
(c) the date on which each person was admitted a member;
(d) the date on which any person ceased to be a member; and
(e) such other particulars as may be prescribed :
Provided that, where a society has by or under this Act, permitted a member to transfer his share or interest on death to any person, the register shall also show against the member concerned the name of the person entitled to the shire or interest of the member, and the date on which the nomination was recorded.
(2) The register shall be prima facie evidence of the date on which any person was admitted to membership, and of the date on which he ceased to be a member.
- Transfer of property which cannot be sold.—
(1) When in any execution of an order sought to be executed under section 98 or in the recovery of any amount under section 101 or section 137, any property cannot be sold for want of buyers, if such property is in occupancy of the defaulter, or of some person in his behalf, or of some person claiming under a title created by the defaulter subsequently to the issue of the certificate of the Registrar, Court, Liquidator or the Assistant Registrar, under clause (a) or (b) of section 98, or under section 101 or 137, the Court or the Collector or the Registrar as the case may be, may, notwithstanding anything contained in any law for the time being in force,direct that the said property or any portion thereof, shall be transferred to the society which has applied for the execution of the said order, in the manner prescribed.
(2) Where property is transferred to the society under the foregoing sub-section or where property is sold under section 98, 101 or 137, the Court, the Collector, or the Registrar, as the case may be, may, in accordance with the rules, place the society or the purchaser, as the case may be, in possession of the property transferred or sold.
(3) Subject to such rules as may be made in this behalf, and to any rights, encumbrances, charges or equities lawfully subsisting in favour of any person, such property or portion thereof, shall be held under subsection (1) by the said society on such terms and conditions as may be agreed upon between the Court, the Collector or the Registrar, as the case may be, and the said society. Subject to the general or special orders of the State Government, the Collector or the Registrar may delegate to an officer, not below the rank of an Assistant or the Deputy Collector or the Assistant Registrar, powers exercisable by the Collector or the Registrar under this section.
Rules:
- Procedure for transfer of shares.—
(1) No transfer of share a shall be effective unless,-
(a) it is made in accordance with the provisions of the bye-laws;
(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.
(2) Any charge in favour of the society on the share so transferred will continue unless discharged otherwise.
- Nomination of persons.-
(1) For the purpose of transfer of his share or interest under sub-section (1) of section 30, a member of a society may, by a document signed by him or by making a statement in any book kept for the purpose by the society nominate any person or persons. Where the nomination is made by a document, such document shall be deposited with the society during the members life time and where the nomination is made by a statement, such statement shall be signed by the member and attested by one witness.
(2) The nomination made under sub-rule (1) may be revoked or varied by any other nomination made in accordance with that sub-rule.
(3) (i) Where a member of a society has not made any nomination, the society shall on the member’s death, by a public notice exhibited at the office of the society, invite claims or objections for the proposed transfer of the share or interest of the deceased within the time specified in the notice.
(ii) After making into consideration the claim or objections received in reply to the notice or otherwise, and after making such inquires as the committee considers proper in the circumstances prevailing, the committee shall decide as to the person who in its opinion is the heir or the legal representative of the deceased member and proceed to take action under section 30.
Bye-Laws provisions:
- Transfer of shares and interest of the deceased Member in the capital/ property of the Society Subject to the provisions of the Section 30 of MCS Act, 1960 bye-law No. 17A or 19, on the Death of a Member, the Society shall transfer the shares and interest of the deceased Member in the Capital/Property of the Society to the Nominee/Nominees and in proportion with the shares and interest held by the deceased Member, in case property is purchased by Member and associate Member jointly. In the event of death of the Member, Nominee/Nominees shall submit the Application for Membership, within six months from the death of a Member. If there are more than one Nominee, on the death of a Member, such Nominees shall make Joint Application to the Society and indicate the name of the Nominee who should be enrolled as Member. The other nominees shall be enrolled as Joint/Associate Members unless the nominees indicate otherwise. The nominees shall also file an Indemnity Bond in the prescribed form Indemnifying the Society against any claims made to the shares and interest of the deceased Member in the Capital/Property of the Society by any of them, in case only one nominee is/indicated by the Nominees for Membership of the Society.
*Note:- In case of acquiring Membership on the basis of Nomination, such Member shall hold the flat/unit in ‘trust’ till all the Legal Heirs are brought on record and shall not have the right to ownership and shall not create third party interest or alienation in any way whatsoever.
- Transfer of shares and interest of the deceased Member in the capital/ property of the Society to the heir ie Where a Member of the Society dies without making a nomination, or no nominee comes forward for transfer, the Society shall invite within six months from the information of his death, claims or objections to the proposed transfer of Shares and interest of the deceased Member, in the capital/property of the Society, by a public notice, in the prescribed form, exhibited on the notice board of the Society. It shall also publish such notice in at least two local news papers, having wide circulation. The entire expenses of publication of the notice shall be recoverable from the value of shares and interest of the deceased Member in the capital/property of the Society. After taking into consideration the claims or objections received, in response to the said notice, and after making such inquiries as the committee considers proper in the circumstances prevailing, the committee shall decide as to the person, who in its opinion is the heir or legal representative [ of the deceased Member. Such a person will be eligible to be a Member of the Society subject to the provisions of the bye-laws Nos. 17(a) or 19, provided that he gives an Indemnity Bond along with his application for Membership in the prescribed form, indemnifying the Society against any claims made to the shares all and interest of the deceased Member in the capital/property of the Society, at any time in future, by any person. If there are more claimants than one, they shall be asked to make the affidavit as to who should become a Member of the Society and such person, named in the affidavit shall furnish the indemnity bond as indicated above along with application for Membership, referred to above. If however, the committee is not able to decide as to the person who is the heir/legal representative of the deceased Member or the claimants do not come to the agreement, as to who should become the Member of the Society, the Committee shall call upon them to produce succession certificate from the Competent Court. If, however, there is no claimant, the shares and interest of the deceased Member in the capital/property of the Society shall vest in the Society.
- Payment of the value of Shares and interest of the deceased Member in the capital/property of the Society
If there is the single nominee and if he demands payment of the value of Shares and interest of the deceased Member, in the capital/property of the Society, the Society shall acquire the same and pay him the value thereof as provided under the bye-law No.63. If, however, there are more nominees than one and if they demand payment of the value of the shares and interest of the deceased Member in the capital/property of the Society, the Society shall acquire the same and pay them value thereof as provided under the bye-law referred to above in the proportion mentioned in the nomination form. If no proportion is mentioned in the nomination form, the payment shall be in equal proportions.
- Payment of the value of Shares and interest of the deceased Member in the capital/property of the Society to the heir/legal Representative
If, in the opinion of the Committee, there is only one heir/legal representative of the deceased Member and if he demands payment of the value of the shares and interest of the deceased Member in the capital/property of the Society, the Society may acquire the same and pay him the value thereof as provided under the bye-law No. 63 after obtaining the indemnity bond referred to in the bye-law No. 34. If, in the opinion of the Committee, there are more heirs/legal representatives than one and if they demand payment of the value of Shares and interest of the deceased Member in the capital/property of the Society, the Society may acquire the same and pay them value thereof in equal proportion as provided under the bye-law No. 66, after obtaining the Indemnity Bond referred to in the bye-law No. 35, from all the heirs/legal representatives jointly.
(H) Transfer of Shares and interest in the Capital/Property of the Society
- Notice of transfer of Shares and interest in the capital/property of the Society
(a) A Member, desiring to transfer his shares and interest in the capital/ property of the Society shall give 15 days9 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 prima-fascia eligible to transfer his shares and interest in the capital/property of the Society, in view of the provisions of Section 29(2)(a) of the Act.
(c) In the event of ineligibility (in view of the provisions of section 29(2)(a) & (b) of the Act) 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 8 days of the decision of the Committee.
(d) “No Objection Certificate” of the Society is not required to transfer the shares and interest of the transferor to transferee. However in case such a certificate is required by the transferor or transferee, he shall apply to the Society and Committee of the Society may consider such application on merit, within one month.
(e) The Transferor/Transferee shall submit following documents and fulfill compliance as under:
(i) application in the prescribed form, for transfer of his shares and interest in the capital/property of the Society, along with the Share Certificate;
(ii) application in the prescribed form for Membership of the proposed Transferee;
(iii) resignation in the prescribed form Member/Transferor;
(iv) Registered Agreement with Stamp Duty paid;
(v) valid reasons for the proposed transfer;
(vi) undertaking to discharge all the liabilities to the Society by Transferor;
(vii) payment of the transfer fee of Rs. 500;
(viii) remittance of entrance fee of Rs. 100 payable by the proposed Transferee;
(ix) payment of amount of premium at the rate to be fixed by the General Body Meeting but within the limits as prescribed under the circular, issued by the Department of Co-operation/Government of Maharashtra, from time to time. No additional amount towards donation or contribution to any other funds or under any other pretext shall be recovered from transferor or transferee;
(x) submission of ‘No Objection Certificate’, required under any law for the time being in force or order or sanction issued by the Government, any financing agency or any other authority;
(xi) the undertaking/declaration in compliance with the provisions of any law for the time being in force, in such form as is prescribed under these bye-laws.
Note : The condition at sr. No. (ix) above shall not apply to transfers of shares and interest, of the transferor in the capital/property of the Society to the Member of his family or to his nominee or his heir/legal representative after his death and in case of mutual exchange of flats amongst the Members.
- Disposal of transfer applications
(a) The procedure for disposal of applications for transfers of shares and/ or interest of Members in the capital/property of the Society as laid down under the bye-law No. 62 shall be followed by the Secretary and the Committee of the Society.
Committee/General Body not to ordinarily refuse any application for Membership or transfer of Shares
(b) A meeting of the Committee or the General Body, as the case may be, shall not refuse any application for admission to Membership of transfer of shares and interest in the capital/property of the Society except on the ground of non-compliance of the provisions of the Act, the Rules and the Bye-laws of the Society or any other law or order issued by the Government in exercise of the statutory powers vested in it.
Deemed to have been Admitted if not communicated within three months
(c) If the decision of the Committee/General Body meeting as the case may be, on the application for transfer of Shares and/or interest in the capital/ property of the Society is not communicated to the applicant withih three months of its receipt, the transfer application shall be deemed to have been accepted and the transferee shall be deemed to have been admitted as a Member of the Society as provided under Section 22(2) of the Act.
Unauthorised transfer void
(d) Any transfer made in contravention of the Act, Rules or the Bye-laws shall be void and not effective against the Society
- Rights of Membership when to be exercised by the transferee
The Transferee shall be eligible to exercise the rights of Membership on receipt of the letter in the prescribed form from the Society or order under section 22 or 23 of the Act from the Registrar; subject to the provisions of the MCS Act, 1960, Rules and Bye-laws.
(F) Other Matters
62.
(a) All the applications for (i) admission to Membership of the Society, including associate and nominal Membership, (ii) approval to the transfers of Shares and interest in the capital/property of the Society, (iii) intimation for sub¬letting or giving flats or parts thereof on leave and license or care-taker basis, (iv) permission for additions and alterations in flats, (v) allotment of parking spaces and stilts, (vi) permission for exchange of flats, (vii) permission for holding, additional flats, (viii) permission for assigning, mortgaging or creating charge or interest in fiats, (ix) permission for use of terrace, and (x) complaint application of the members, (xi) for any other purpose provided under the bye-laws but not specifically mentioned above, shall be addressed to the Secretary of the Society. Every application received by the Secretary shall be acknowledged by him;
(b) On receipt of the applications, the Secretary of the Society shall scrutinize them and bring any short-coming therein to the notice of the Members concerned within 15 days of their receipt for compliance;
(c) The Secretary shall place all the applications, complete in all respects, or incomplete, before the meeting of the Committee or the general body, as the case may be, held next after receipt of the applications;
(d) The Committee or the General Body, as the case may be, shall consider all such applications at its meetings and take decisions thereon;
(e) The Committee shall ensure that all the applications received by the Secretary of the Society are disposed off within the maximum period of 3 months from the dates of their receipt, except application for subletting;
(f) If the Committee or the General Body, as the case may be, rejects any applications, it shall record, in the minutes of its meetings, the reasons for rejection of the applications;
(g) The Secretary of the Society shall communicate the decisions of the Committee or the General Body, as the case may be, to the applicants concerned within 15,days of the decisions of the Committee or the General Body, as the case may be, with reasons, where the applications are rejected by the Committee or the General Body, as the case may be. If the Society does not communicate the decision to the applicant within three months from the date of receipt of application for Membership; including nominal or associate Membership, the applicant shall be deemed to have been admitted as a member.
- Transfer of shares and interest of the deceased Member in the capital/ property of the Society Subject to the provisions of the Section 30 of MCS Act, 1960 bye-law No. 17A or 19, on the Death of a Member, the Society shall transfer the shares and interest of the deceased Member in the Capital/Property of the Society to the Nominee/Nominees and in proportion with the shares and interest held by the deceased Member, in case property is purchased by Member and associate Member jointly. In the event of death of the Member, Nominee/Nominees shall submit the Application for Membership, within six months from the death of a Member. If there are more than one Nominee, on the death of a Member, such Nominees shall make Joint Application to the Society and indicate the name of the Nominee who should be enrolled as Member. The other nominees shall be enrolled as Joint/Associate Members unless the nominees indicate otherwise. The nominees shall also file an Indemnity Bond in the prescribed form Indemnifying the Society against any claims made to the shares and interest of the deceased Member in the Capital/Property of the Society by any of them, in case only one nominee is/indicated by the Nominees for Membership of the Society.
*Note:- In case of acquiring Membership on the basis of Nomination, such Member shall hold the flat/unit in ‘trust’ till all the Legal Heirs are brought on record and shall not have the right to ownership and shall not create third party I interest or alienation in any way whatsoever.
- Transfer of shares and interest of the deceased Member in the capital/ property of the Society to the heir ie Where a Member of the Society dies without making a nomination, or no nominee comes forward for transfer, the Society shall invite within six months from the information of his death, claims or objections to the proposed transfer of Shares and interest of the deceased Member, in the capital/property of the Society, by a public notice, in the prescribed form, exhibited on the notice board of the Society. It shall also publish such notice in at least two local news papers, having wide circulation. The entire expenses of publication of the notice shall be recoverable from the value of shares and interest of the deceased Member in the capital/property of the Society. After taking into consideration the claims or objections received, in response to the said notice, and after making such inquiries as the committee considers proper in the circumstances prevailing, the committee shall decide as to the person, who in its opinion is the heir or legal representative [ of the deceased Member. Such a person will be eligible to be a Member of the Society subject to the provisions of the bye-laws Nos. 17(a) or 19, provided that he gives an Indemnity Bond along with his application for Membership in the prescribed form, indemnifying the Society against any claims made to the shares all and interest of the deceased Member in the capital/property of the Society, at any time in future, by any person. If there are more claimants than one, they shall be asked to make the affidavit as to who should become a Member of the Society and such person, named in the affidavit shall furnish the indemnity bond as indicated above along with application for Membership, referred to above. If however, the committee is not able to decide as to the person who is the heir/legal representative of the deceased Member or the claimants do not come to the agreement, as to who should become the Member of the Society, the Committee shall call upon them to produce succession certificate from the Competent Court. If, however, there is no claimant, the shares and interest of the deceased Member in the capital/property of the Society shall vest in the Society.
- Payment of the value of Shares and interest of the deceased Member in the capital/property of the Society
If there is the single nominee and if he demands payment of the value of Shares and interest of the deceased Member, in the capital/property of the Society, the Society shall acquire the same and pay him the value thereof as provided under the bye-law No.63. If, however, there are more nominees than one and if they demand payment of the value of the shares and interest of the deceased Member in the capital/property of the Society, the Society shall acquire the same and pay them value thereof as provided under the bye-law referred to above in the proportion mentioned in the nomination form. If no proportion is mentioned in the nomination form, the payment shall be in equal proportions.
- 36. Payment of the value of Shares and interest of the deceased Member in the capital/property of the Society to the heir/legal Representative
If, in the opinion of the Committee, there is only one heir/legal representative of the deceased Member and if he demands payment of the value of the shares and interest of the deceased Member in the capital/property of the Society, the Society may acquire the same and pay him the value thereof as provided under the bye-law No. 63 after obtaining the indemnity bond referred to in the bye-law No. 34. If, in the opinion of the Committee, there are more heirs/legal representatives than one and if they demand payment of the value of Shares and interest of the deceased Member in the capital/property of the Society, the Society may acquire the same and pay them value thereof in equal proportion as provided under the bye-law No. 66, after obtaining the Indemnity Bond referred to in the bye-law No. 35, from all the heirs/legal representatives jointly.
(H) Transfer of Shares and interest in the Capital/Property of the Society
- Notice of transfer of Shares and interest in the capital/property of the Society
(a) A Member, desiring to transfer his shares and interest in the capital/ property of the Society shall give 15 days9 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 prima-fascia eligible to transfer his shares and interest in the capital/property of the Society, in view of the provisions of Section 29(2)(a) of the Act.
(c) In the event of ineligibility (in view of the provisions of section 29(2)(a) & (b) of the Act) 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 8 days of the decision of the Committee.
(d) “No Objection Certificate” of the Society is not required to transfer the shares and interest of the transferor to transferee. However in case such a certificate is required by the transferor or transferee, he shall apply to the Society and Committee of the Society may consider such application on merit, within one month.
(e) The Transferor/Transferee shall submit following documents and fulfill compliance as under:
(i) application in the prescribed form, for transfer of his shares and interest in the capital/property of the Society, along with the Share Certificate;
(ii) application in the prescribed form for Membership of the proposed Transferee;
(iii) resignation in the prescribed form Member/Transferor;
(iv) Registered Agreement with Stamp Duty paid;
(v) valid reasons for the proposed transfer;
(vi) undertaking to discharge all the liabilities to the Society by Transferor;
(vii) payment of the transfer fee of Rs. 500;
(viii) remittance of entrance fee of Rs. 100 payable by the proposed Transferee;
(ix) payment of amount of premium at the rate to be fixed by the General Body Meeting but within the limits as prescribed under the circular, issued by the Department of Co-operation/Government of Maharashtra, from time to time. No additional amount towards donation or contribution to any other funds or under any other pretext shall be recovered from transferor or transferee;
(x) submission of ‘No Objection Certificate’, required under any law for the time being in force or order or sanction issued by the Government, any financing agency or any other authority;
(xi) the undertaking/declaration in compliance with the provisions of any law for the time being in force, in such form as is prescribed under these bye-laws.
Note : The condition at sr. No. (ix) above shall not apply to transfers of shares and interest, of the transferor in the capital/property of the Society to the Member of his family or to his nominee or his heir/legal representative after his death and in case of mutual exchange of flats amongst the Members.
- Disposal of transfer applications
(a) The procedure for disposal of applications for transfers of shares and/ or interest of Members in the capital/property of the Society as laid down under the bye-law No. 62 shall be followed by the Secretary and the Committee of the Society.
Committee/General Body not to ordinarily refuse any application for Membership or transfer of Shares
(b) A meeting of the Committee or the General Body, as the case may be, shall not refuse any application for admission to Membership of transfer of shares and interest in the capital/property of the Society except on the ground of non-compliance of the provisions of the Act, the Rules and the Bye-laws of the Society or any other law or order issued by the Government in exercise of the statutory powers vested in it.
Deemed to have been Admitted if not communicated within three months
(c) If the decision of the Committee/General Body meeting as the case may be, on the application for transfer of Shares and/or interest in the capital/ property of the Society is not communicated to the applicant withih three months of its receipt, the transfer application shall be deemed to have been accepted and the transferee shall be deemed to have been admitted as a Member of the Society as provided under Section 22(2) of the Act.
Unauthorised transfer void
(d) Any transfer made in contravention of the Act, Rules or the Bye-laws shall be void and not effective against the Society
- Rights of Membership when to be exercised by the transferee
The Transferee shall be eligible to exercise the rights of Membership on receipt of the letter in the prescribed form from the Society or order under section 22 or 23 of the Act from the Registrar; subject to the provisions of the MCS Act, 1960, Rules and Bye-laws.
(F) Other Matters
62.
(a) All the applications for (i) admission to Membership of the Society, including associate and nominal Membership, (ii) approval to the transfers of Shares and interest in the capital/property of the Society, (iii) intimation for sub¬letting or giving flats or parts thereof on leave and license or care-taker basis, (iv) permission for additions and alterations in flats, (v) allotment of parking spaces and stilts, (vi) permission for exchange of flats, (vii) permission for holding, additional flats, (viii) permission for assigning, mortgaging or creating charge or interest in fiats, (ix) permission for use of terrace, and (x) complaint application of the members, (xi) for any other purpose provided under the bye-laws but not specifically mentioned above, shall be addressed to the Secretary of the Society. Every application received by the Secretary shall be acknowledged by him;
(b) On receipt of the applications, the Secretary of the Society shall scrutinize them and bring any short-coming therein to the notice of the Members concerned within 15 days of their receipt for compliance;
(c) The Secretary shall place all the applications, complete in all respects, or incomplete, before the meeting of the Committee or the general body, as the case may be, held next after receipt of the applications;
(d) The Committee or the General Body, as the case may be, shall consider all such applications at its meetings and take decisions thereon;
(e) The Committee shall ensure that all the applications received by the Secretary of the Society are disposed off within the maximum period of 3 months from the dates of their receipt, except application for subletting;
(f) If the Committee or the General Body, as the case may be, rejects any applications, it shall record, in the minutes of its meetings, the reasons for rejection of the applications;
(g) The Secretary of the Society shall communicate the decisions of the Committee or the General Body, as the case may be, to the applicants concerned within 15,days of the decisions of the Committee or the General Body, as the case may be, with reasons, where the applications are rejected by the Committee or the General Body, as the case may be. If the Society does not communicate the decision to the applicant within three months from the date of receipt of application for Membership; including nominal or associate Membership, the applicant shall be deemed to have been admitted as a Member as provided under Section 22(2) of the Act.mber as provided under Section 22(2) of the Act.
Can society take technico-legal objections and refuse to transmit shares? What if for years together society neither transfers nor refuses for years together, but keeps on orally demanding compliances.
It is relevant to note that, in view of above background, the basic scheme and procedure so prescribed under the MCS Act referring to “Member”/”Membership”. Section 2(19)(a) provides the concept of “member”. The concept “deemed member” as provided in Sections 22(2) and 23 is not defined. Section 22(2) deals with the members who became members and Section 23 provides a procedure for open membership. For deciding the membership issue, the aspect of restriction on transfer or charge of share or interest, as contemplated under Section 29 is also relevant, so also to maintain the register of members as contemplated under Section 38 of the MCS Act. Rule 38 of the bye-laws definitely covers that the Society needs to follow the bye-laws, which binds the Society, as well as, its members. Rule 19 deals with the conditions before admission for the membership. This also provides the detailed procedure to be followed by all the parties. Rule 24 deals with the procedure for transfer of shares, as no transfer of shares shall be effective unless the condition so provided under the Rules and the Act are fulfilled.
Above provisions, therefore, make the position very clear that for the transfer of membership and/or shares, the concerned parties need to follow the various procedure and the supporting material and documents. The Society needs to apply its mind to the law, as well as, the related record before granting and/or refusing admission. The statutory Authorities are also under obligation to consider this, if the Society refused the membership and/or any challenge is made to grant such admission. These, in my view, are essential elements before considering the rival case, as well as, the contentions at every stage of admission of members and/or granting membership. This itself means the Society and/or the Authority concerned, need to follow the basic principles of natural justice also and so also grant equal opportunity to all the parties and this itself follows appropriate reasons for and/or against, while granting and/or rejecting such membership
Its very simple while reading above laws if Society has to admit or reject within 60 days of receipt
Case Laws:
Dadar Avanti Co-op Hsg Society vs State Of Maharashtra And Ors. 2005 (2) BomCR 604
The application was not rejected hence applicant is deemed member.
On the issue of Limitation Act, the court held that in order to get a positive declaration of their membership right they had applied under Section 22. There was no bar nor was any limitation imposed by law on the parties so applying if otherwise, a party fell within the concept of deemed membership under Section 22(2) of the M.C.S. Act.
Provisions Explained :
Videocon Appliances Ltd. vs Maker Chambers V Premises Co-Op. on 1 December, 2005 Equivalent citations: 2006 (1) BomCR 6, 2006 (2) MhLJ 388 in my opinion the same lacks total merit. Firstly, power under sections 22(2) and 23(2) is the power conferred on the Registrar Co-operative Societies which is the same authority namely, Deputy Registrar of Cooperative Societies. The power conferred of determination whether there is a deemed membership or not and the power conferred under section 23(2) that whether the refusal of the membership is valid or not, in my opinion, is nothing but identical power to determine whether a person is entitled to be a member of the society or not. The provisions of section 22(2) and 23(2) only provide for only two different modes for the same cause of action as to become a member of a particular society. The authority prescribed under section 22(2) and under section 23(2) being both identical, in my opinion, the Registrar while exercising the power under section 22(2) is also equally empowered to consider, if there is a refusal, whether the refusal of the membership is legal and valid. I am also of the further opinion that Section 22(2) and 23(2) of the Maharashtra Cooperative Societies Act is a complete scheme for becoming a member of the society. It provides that society’s membership is an open membership and every person is entitled to become a member of the society. It also provides two modes to become member of the society (i) where there is an inaction on the part of the society to take decision on an application for membership and (ii) where an action is initiated and a decision is taken and the validity of the decision is under scrutiny. This, in my opinion is a complete scheme alternatively providing that by virtue of inaction or by virtue of an illegal action if the membership is refused by the society then Registrar is empowered to take action in the matter. The contention of the learned counsel for the petitioner that it is a separate scheme by itself and, therefore, the Registrar exercising power under section 22(2) and under Section 23(2) exercises a totally different power one in case of original power and another in case of appellate power and, therefore, both the proceedings must be treated as separate, independent and distinct. In my opinion, the contention is devoid of any merit. It is because under Section 23(1A)(2) the power is conferred on the Registrar to determine whether there is a deemed membership or not. If this power under Section 23(1A) in contrast to the power under section 22(2) of the Maharashtra Co-operative Societies Act is conferred on the basis that where the society has accepted the application but did not take decision then the power under section 22(2) Page 1410 can be exercised. But where the society refuses to accept the application itself for membership, then the application can be filed with the Registrar who will forward the same to the society for taking action and if action is not taken, a person becomes a deemed member and if any dispute arises about the deemed membership in such a case, then under section 23(1A) the Registrar is empowered to determine the said dispute. In my opinion, section 22(2) and 23(2) is required to be harmoniously interpreted. I am of the opinion that the power of the Registrar under section 22(2) and 23(2) is identical and he is exercising the very same jurisdiction thus in my opinion he is entitled to determine whether a person is entitled to become a member of any co-operative society or not. The contention of the learned counsel that the application of the petitioner has been rightly rejected because he was not entitled to be a deemed member and the Deputy Registrar wrongly entered into the arena of the fact of refusal is valid or not therefore, cannot be accepted.
VIOLATION OF ARTICLE 19 OF THE CONSTITUTION AND DEEMED MEMBERSHIP WHEN SOCIETY FAILS TO COMMUNICATE:
Madhavnagar Cooperative Housing Society vs Joint Registrar And Member, Board … on 30 August, 2019 Gujarat High Court
R/SPECIAL CIVIL APPLICATION NO. 4585 of 2016
“ in our opinion, providing for the deemed membership to such person who is not communicated the decision of the society to which he is seeking the membership within a period of three months, is equally offensive of Article 19(1)(c) of the Constitution for the self-same reasons. The consequential provisions of appeal and limitation thereof in Sub- sections (3), (4), (5) and (6) would also fail since the main provisions have been held to be suffering from the infirmity as stated above. Sub-section (7) also becomes redundant in the view of the matter which we have taken on the impugned provision in Sub-section (2) of Section 22. We are, therefore, of the opinion that the provisions contained in Sections 22 (2) and 24(1) & (2) are bad in law and void inasmuch as they are violative of Article 19(1)(c) of the Constitution.”
Amreli District Co-Operative Society vs State Of Gujarat on 17 July, 1984 Equivalent citations: (1984) 2 GLR 1244
The two sections that were materially altered is behalf are Sections 22 and 24 by Section 3 of the impugned Act of 1982, the membership is made open to the local authority or public trust registered under the Bombay Public Trusts Act, or any other corporate body constituted under any law. This amendment is very hotly contested.
Inter-alia “Section 22(2) in the Co-operative Societies Act, 1912
(2) A registered society may pay all other moneys due to the deceased member from the society to such nominee, heir or legal representative, as the case may be.”
Held :
The impugned Act of 1982, insofar as it seeks to amend the principal Act by insertion of Sections 17-A, 22(2), and 24 by Sections 2, 3, and 5 respectively of the said amending Act is bad in law and void inasmuch as the said provisions are violative of Article 19(1)(c) of the Constitution of India.
“95. Since we have held that the provision contained in new Section 22(2) of the principal Act is violative of Article 19(1)(c), it is not necessary to elaborately discuss as to whether it violates Article 14 of the Constitution. The only ground on which the challenge under Article 14 is raised against this provision is that there is no provision to determine the eligibility of members and, therefore, the provision is arbitrary. We do not think that this grievance is justified since Section 22(2)(a) which provides for deemed membership can be evoked only by those persons who are duly qualified for membership of a society to which they are seeking admission. The contention should, therefore be rejected.”
Apna Sahakari Bank Ltd. And Anr vs Matulya Centre Premises Co-Op. on 16 April, 2019
Where a person is refused admission as a member of a society, the decision (with the reasons therefor) shall be communicated to that person within fifteen days of the date of the decision, or within three months (from the date of receipt of the application for admission, whichever is earlier. If the society does not communicate any decision to the applicant within three months from the date of receipt of such application the applicant shall be deemed to have been “[admitted] as a member of the society
Jay Anant Sagar Co-Op. Housing Society vs The Divisional Joint Registrar … on 30 July, 2019 Bench: R.D. Dhanuka
It was held that, the deemed membership can be claimed only if an application for membership was filed as contemplated under Rule 19 of the MCS Rules read with bye-laws of the petitioner society and if the petitioner would not have communicated any decision to the respondent no.3 within three months from the date of receipt of such application.
DENIAL OF VOTING RIGHTS TO A MEMBER
Bhaskar S/O Eknathrao Shinde vs The State Of Maharashtra, on 31 December, 2007 Author: N Dabholkar
Bench: N Dabholkar, P Kakade
No rights of membership to be exercised till due payments are made: No person shall exercise the rights of a member of society, until he has made such payment to the society in respect of membership, or acquired such interest in the society, as may be prescribed by the rules, or the by-laws of such society.
Dictum:
On reading the three provisions relied upon by two sides together, it is evident that being a member of a society and being a member having a right to vote in the affairs of a society are two distinct things. It is evident from Section 27(8) that nominal and sympathiser members have no right to vote, although, they are members as defined by Section 2(19)(c) and (d). On reading section 27(2), it is evident that every associate member (as defined by Section 2(19)(b)) does not have a right to vote but, only one associate member whose name stands first in the share certificate, has a right to vote. Thus, a membership without voting right is not unknown to the statute.
NAME IN VOTERS LIST BUT VOTING RIGHT DENIED
Shriram Mukundrao Kodre vs The State Of Maharashtra And … on 5 February, 2015
Bench: R.V. Ghuge
It is settled law that the entire process of an election is purely a creation of a statute and governed by the statute and rules framed thereunder. If a person is denied the right to vote because his name is not on the voters’ list, it must be taken to be the intention of the the statute. It would indeed bring about uncertainty, in the certainty. of an election process if this Court interfered at the instance of persons who have been held to have no right to vote and have deleted from the voters’ list, merely, on the ground that they have thereby been denied the right to contest the election. This contention on behalf of the Petitioner certainly merits consideration but is not sufficient in my view to depart from the settled position in law that an election can only be challenged in accordance with the statute under which it is held and that this Court will not ordinarily interfere with the election process. Undoubtedly, if the challenge succeeds voters whose names have been wrongly deleted would be entitled to contest in the election held again.
Questions :
- Should Committee enjoy such powers in abundance when there are chances to misuse?
- Is there a need for a Registrar for the transfer of shares?
- What is the remedy when the society committee doesn’t discuss and put up details and documents of transfer application before and AGM?
- Should transfer/transmission applications be mandatorily put up before AGM for scrutiny?
- Remedy and suggestions?
ANNOTATIONS
Considering experience in various matters committee does in practice enjoy power in abundance, though there are restrictions. The committee is nothing but an in-house administration on which there is no day-to-day monitoring. These rights are exercised by common persons most of the time having no knowledge of the law but having an ability to maneuver. The common citizen who is a member of the society avoids litigation as they live in the same society the reason being the safety and security of the family. Imagine after investing crores a flat purchaser is oppressed by the committee and the member/flat holder is virtually a hostage in the hands of the committee. This is seen generally where there is litigation. There may be many incidents that never see the door of the office of the Registrar. Widows, single mothers are the first target.
There are also inheritance laws. Society cannot insist on probate unless there is stiff resistance. https://shrutidesai.in/can-society-insist-on-succession-certificate-for-transfer-and-sale-of-a-flat-and-share-certificate-attached-thereto/
What happens in such cases is the heir or the joint member is asked to comply with several requisitions by Managing Committee. These are under the advice of legal experts and precedent. But there are cases where the committee usurps the position of a Judge. https://shrutidesai.in/is-document-stamped-with-maharashtra-stamp-signed-and-notarized-outside-state-valid/
Suggestions:
The flat holder is a member after paying stamp duty, registration charges on an Agreement for Sale, or any other document by whatever name it is called and pays several local taxes on the property. Share Certificate is an instrument of identification of flat for admission to the membership of the society similarly in a company an investor pays for the shares and pays brokerage, taxes stamp duty charges etc. But when it comes to transfer /transmission or conversion of physical shares into Demat form there is a Centralized Registry where a person has to submit an application that is neutral, unrelated, and has no interest in the transaction.
To avoid litigation and untoward situation it’s my humble submission that even for share transfer of society some neutral agency is established that will handle the transfers and transmissions efficiently in equity and good conscience. This will save a lot of harassment and litigation that is aroused just for not being neutral and just. This will also save public resources and the quality of working for Registrars.
It is also a humble suggestion that a quasi-judicial body is established to hear cases related to co-operative housing societies because the Registrars and Joint Divisional Registrars are already overburdened with work. Most of the time litigants and Advocates attend but since officers are busy with other important official duties they just take the next date and return.
These are Without Prejudice suggestions. Hope the Parliamentary Committee takes cognizance thereof and enacts rules that may eliminate such a gloomy situation.
Shruti Desai
30th March 2022
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