If your co-operative society is old it may continue to follow old byelaws.

But when a new co-operative society

approaches the registrar it would have to compulsorily adopt the new byelaws.

Under the Maharashtra [ Images ] Co-operative Societies Act 1960, a housing society is free to adopt its own set of laws that governs its members. These are called byelaws and are limited to the Maharashtra state. Byelaws are the rules that govern a co-operative society and its members and these undergo changes from time to time through amendments whenever the government feels the need for changes. For instance, the cash on hand limit under the old byelaws was Rs 300. Cash on hand is maintained by the society for day to expenses such as plumber's payments for instance. Over the years it was felt that the amount was not sufficient. And hence in the new byelaws the same has been increased to Rs 4,500. Such changes under various headings become imminent and that is how the new model byelaws came into effect from July 2, 2001. Since then, the government has made it mandatory for co-operative societies in Maharashtra to adopt the new byelaws. Byelaws are district specific. In other words while these are more or less the same there could be minor changes depending on which district you fall in whether it is Mumbai [ Images ], Pune or Thane. Enumerated here are some of the differences between the old and the new byelaws. Transfer of flat: Under the old byelaws in case you were to transfer your flat, a charge of 2.5% of the difference in the purchase value minus sale value would be levied as transfer charges. But under the new model byelaw number 45 all that has been scrapped and a common charge is levied as per the general body resolution subject to the condition that it is not above Rs 25,000. Maintenance: Under the old byelaws the maintenance charged varied among members. For instance, let us say the monthly maintenance amount payable was Rs 500. Now if the flat was given on leave and licence, the maintenance charge would be hiked to Rs 1,000. But as per the new byelaws, maintenance is 10% of service charges. Service charges include salary of the office staff, liftmen, watchman, the property taxes, electricity charges, water charges, etc. in case the society has an independent office. That apart it also includes entrance fees for affiliation to the housing federation and any other co-operative institution, audit fees for internal, statutory and re-audit if any besides expenses incurred at meetings of the general body, the committee and the sub-committee retainer fees, legal charges, statutory enquiry fees among others. Purchase of second flat: Under the old byelaws there were restrictions on holding more than one flat. You needed to obtain the registrar's permission to purchase a second flat in the same society or within the limits of a certain district.

You were also needed to submit an affidavit saying that you do not hold any other flat in the same district. For instance, if you were the owner of a flat in Mumbai you could not own another flat in the same city. But another flat in Pune or Thane was allowed. In the new byelaws the same has been done away with. So you can very well purchase a flat in the same society. Under Byelaw number 62 of the new model byelaws all you need to do is make an application to the society saying that you intend to purchase another flat. It's the society's consent that matters. Transfer among family members: Under the old byelaws there were transfer charges applicable even if the transfer was between family members. But then under Section 6 read with byelaw number 3 of the model byelaws, no transfer charge is to be levied in case of transfer of flat to any one of the family members. Under byelaw number 3(25) family members means the following group of persons: husband, wife, father, mother, sister, brother, son, daughter, son in law, brother in law, sister in law, daughter in law, grandson, granddaughter. Says Vinod Sampat, property lawyer, "If your co-operative society is old and continues with the old byelaws it may do so as byelaws cannot be enforced by law per se. Also, in my opinion, there are many mistakes in it. For instance, under the new model byelaw number 61, the managing committee needs to inform the member in writing within seven days of the date of the decision of committee about cessation of a membership." He adds: "Cessation of membership can take place when the member has sold his flat. And such communication in reality takes more than seven days or even a month since the committee needs to find out whether all dues such as electricity bills, housing loans if any among others have been paid. But then note that when a new co-operative society approaches the registrar it would have to compulsorily adopt the new byelaws

1. Not signing M-20 bond as required under law: According to Rule 58-A of the Maharashtra Co-operative Societies Rules, 1961, every elected member of the managing committee is to execute a bond in Form M-20 within 15 days of assuming office. The secretary of the society is responsible for receiving the bonds and keeping them on record of the society and informing the registrar within 15 days of formation of the committee. This rule is often flouted as Form M-20 makes each member liable for decisions taken jointly and severally. Some members of Brahma Majestic in Wanavdi are still awaiting a conclusion in their case on non-issuance of the bonds by MC members elected in April 2007 within the time frame prescribed by the law, even though the matter was brought to the notice of the deputy registrar of co-operatives in October 2008. Members question several financial decisions taken by the committee, which have led to financial burden on the society as well as members. Unless there is a resolution of the M-20 issue, we cannot hold any of the members of the MC accountable for what they have been doing, said Col (retd) JV Singh, a resident. 2. Charging transfer premium at per square foot (psf) rather than the maximum permissible rate: The MC cannot charge a transfer fee on psf basis. As per bye-law number 38 (transfer of shares) (ix) the premium for transfer fixed by the general body and the law allows a maximum of Rs25,000, as the transfer fee is Rs500 and entrance fee Rs100, said Shroff. Further, no additional money can be charged under any head whatsoever from transferer or transferee.

This rule is openly flouted by MCs that expect an owner to cough up Rs100 psf. For large apartments, the cost could run into lakhs of rupees. The MC holds the member/ proposed member to ransom to pay the extra amount, which is illegal. The remedy is that one should approach the registrar of cooperative societies through a lawyer or consultant seeking refund and compensation by way of interest on additional amount so collected by the society. If the members are alert and know the law, they are self-sufficient to fight against any injustice, said Shroff. 3. Charging illegal non-occupancy fees: The government of Maharashtra issued an order dated 01 August, 2001, in public interest under Section 79A of the Maharashtra Co-operative Societies Act, 1960, (MCS Act) directing the societies not to charge non-occupancy charges beyond 10% of the service charges (excluding municipal taxes). This order, though appealed against, was also upheld by the Bombay high court in March 2007. In a society in Kalyaninagar, non-occupancy charges are being charged at 10% of the rent amount. If the rent is Rs18,000, I was being charged Rs1,800 per month, said Arun Kajaria. On his repeated questioning, the MC insisted that the high court ruling of 2007 was being appealed against in the Supreme Court and until then the societies could charge as they wished. According to Shroff, the stand of the MC is wrong. Since the order is not quashed or altered, it stands. As mentioned earlier, the immediate recourse is to open litigation against such a society and to file a case in the matter, he said. 4. Taking decisions and passing resolutions in contravention of the law: Some societies also do not follow the law and pass resolutions in contravention of the MCS Act, like excessive charging of transfer amount. Such resolutions should be brought to the notice of the deputy registrar and in certain cases to the co-operative court, said Shroff. 5. Misuse of funds: The misuse of resources is a common grievance and is difficult to substantiate or prove to an authority. Some members of a housing society in Kondhwa have been on the warpath with the MC alleging misuse of society funds in white-washing of the building and road repairs. Retired senior citizens who have limited sources of income were caught off guard by the MCs demands for funds for the same. Rs20,000 was taken by the MC for major repairs. The job was not up to the mark and ultimately we feel that there has been some sort of financial misappropriation. Contractors have not been chosen carefully, alleged IC Kapoor, a resident. Alleged financial misappropriation can be investigated by the deputy registrar. He can order a re-audit of the accounts of the period suspected by a government auditor after a complaint is lodged with him specifically seeking a re-audit. The charges for the same have to be borne by the complainant. 6. Taking decisions, conducting general body without proper quorum or support: Complicating matters is the fact that meetings where major decisions are taken are hardly attended by 10% of the members. Lack of quorum is a major problem in meetings. Most owners are not interested in the decision-making process, which gives MCs the upper hand. Out of the few members present, many of them are conduits of the MC, willing to play along which leaves some of us in a minority, said J Valavil, resident of Brahma Majestic, who has been questioning several financial decisions taken by the MC of the society. At the general body meeting conducted at one housing society in October 2010, it was observed that resolutions were being passed by a show of hands, co-owners being counted as one vote and opposing members were being disregarded and sidelined in complete contravention to the spirit of the MCS Act. 7. Disregarding members views and victimising members who dissent by cutting off water supply, lift and garbage collection:According to Shroff water, lift and common lights are essential services and the society cannot cut them off. The aggrieved member should file a FIR with the police station as such an act is not permissible under law, he said. 8. Using society funds to fight cases: According to Shroff, society funds can be used to fight cases as long as they are not personal cases. For recovery of money from members u/s 101 (non-payment of society dues), appeals in recovery matters, to defend the society against any litigation put by a member, disputes relating to non-compliance of terms between builder and society, sub-standard constructions (where the society has given the building for

reconstruction), conveyance matters and any other matter where the society and its property is in question, as per bye-laws, society funds can be used, he added.

Sale of flat in Co.op. Hsg. Society in Maharashtra

Sale of flat in Co.op.Hsg.Society in Maharashtra Posted on 28 Feb 2000 Q.1. For sale of shares and flat in a Co-operative Housing Society, is it necessary to enter into any written Agreement by and between a member and the intending Purchaser ? Under the Contract Act there can be an oral agreement which is not in writing. Such an oral Agreement is valid and binding on the parties thereto. Under the Transfer of Properties Act also it is not necessary to enter into an Agreement in writing for the sale of the shares or rights of a member in the properties of the Co-operative Society. Such an Agreement can be an oral Agreement. The Maharashtra Co-op. Societies Act, 1960, Maharashtra Co-operative Housing Societies Rules, 1961 and the Model Byelaws of Co-operative Housing Societies, no where mention or provide that such an Agreement should be in writing. The relevant Sections of the said Act for transfer of Membership is Section 29, which is negative in form, providing restriction on transfer. Under the said Section certain conditions are prescribed. But no where is it mentioned that there should be an Agreement in writing for the Sale of shares and the rights in property of the Co-operative Society. Rule 24 of the said Rule prescribes procedure for transfer of shares. Under the said Rule also there is no mention of any Agreement or an Agreement in writing. Clause 40 of the Model Bylaws of Co-operative Housing Societies, which provides for the notice of transfer of shares and interest in the capital of the property of the Society. Clause 40 (D) provides for the documents to be submitted along with the application for transfer. There is no reference whatsoever that any Agreement or a copy of any Agreement should be furnished to the Society. Therefore, there is no need for an Agreement in writing or furnishing an Agreement for Sale or a copy thereof to the Society. Under the provisions of Contract Act, Transfer of properties Act, Maharashtra Co-operative Societies Act, 1960, Maharashtra Co-operative Societies Rule 1961 and the Model Bye-laws of Co-operative Housing Society. it has been recently held by the High Court of Judicature at Bombay in its Judgement passed in Writ Petition No. 2094 of 1994, Shri. Harish G. Bulchani V/s. Shri. Subhash Manoharlal Arora and Others reported in 1992 (2) All Maharashtra Law Reporter, Page 349, that if a member or Intending Purchaser does not produce Agreement for Sale and if its not required under the Maharashtra Co-operative Societies Act, Rules or Bylaws then it could not be a valid the ground of refusal to transfer the shares and the rights of a member in a property of the Cooperative Housing Society. Therefore it is not necessary for a transferor or transferee to produce any Agreement or copy thereof to the Co-operative Housing Society. Q.2) Is it possible to enter into oral Agreement for Sale without executing an Agreement for Sale and paying stamp duty thereon ? The stamp duty is payable only if an Agreement for Sale has to be executed in writing. In case of Oral

Agreement for Sale of shares and the rights in property by a member to intending Purchaser, if there is no Agreement in writing, then the question of payment of any Stamp Duty does not arise. Q.3) Is it necessary to Register Agreement for Sale between a member of the Co-op. Housing Society and the Intending Purchaser ? Section 41 of the Maharashtra Co-op. Societies Act Specifically provides for exemption from compulsory registration of an Instrument relating to shares and debentures of the Society. Nothing in clause (b) and (c) of sub section (1), of section 17 of the Indian Registration Act, 1908, shall apply to any instrument relating to shares in a society, notwithstanding that the assets of the society consist in whole or in part of immovable property. Therefore, under the said Section it is specifically mentioned that such an Agreement does not require registration. In fact it has been held by Bombay high Court in its Judgement in USHA DONGRE VS. SURESH KOTWAL reported in 1990 Maharashtra Law Journal 306 that such an Agreement does not require Registration . Therefore, such an Agreement is not required registration with the Sub-Registrar of Assurances. Q.4) Is the second part of the Notification or Circular issued by Commissioner for Co-operation and Registrar, Co-operative Societies dated the 18th February, 1994 valid ? Are Co-op. Societies or members thereof bound to comply with it ? As stated in answers to earlier questions the Co-operative Societies Act, Rules and Bylaws do not provide for any Agreement for Sale between a member and intending members to be in writing or payment of the stamp duty thereon. As stated in earlier answers it is not necessary to register such an Agreement between a member and the new member of the Society. If the said Act, the said Rules and Bylaws of the Society or Indian Registration Act not require such a Agreement to be in writing, then the question of payment of Stamp Duty on the same will not arise if such an agreement is not in writing. Similarly, neither the said Act nor the Indian Registration Act requires Registration of such an agreement. In fact the 2nd part of the said circular amounts to imposing of tax on the citizens. Citizens will have to pay Stamp Duty and Registration fees even though the Acts and Rules do not provide the same. Under Article 265 of the Constitution of India no taxes can be levied or collected except by authority of Law. Stamp Duty and Registration charges can be imposed only by legislation. The Commissioner cannot levy taxes which he has purported to do through his circular. The said Circular is bad in law and against the provisions of the said Act, the said Rules, the Indian Registration Act and against the Judgements of Bombay High Court which have been referred in answers to earlier questions. It is ultra-vires of Article 265 of the Constitution of India. It is respectfully submitted that 2nd part of the same is, therefore, illegal, unlawful, invalid and not binding on the Society or the members or the intending Purchasers. Q.5) Is Commissioners aforesaid Circular is valid because it is issued after the judgement of the Bombay High Court in USHA DONGRE VS. SURESH KOTWAL ? By Circular, Commissioner cannot validate which is unconstitutional or invalid under any Act or Rules. Section 41 of the Maharashtra Co-op. Societies Act and the Judgment in USHA DONGRE VS. Suresh KOTWAL make it abundantly and absolutely clear that such an Agreement for Sale does not require registration. The Commissioner, Circular dated the 18th February, 1994 is beyond jurisdiction and it is contrary to and inconsistent with the provisions

under the said Act, the said Rules, the said Bylaws, Indian Registration Act and Article 265 of the Constitution of India. Q.6) In a case of Sale of Flat by Builder or Developer to Flat Purchaser, can there be an Oral Agreement ? The aforesaid questions and answers are with reference to sale of shares and flat by a member of a Co-op. Hsg. Soc. To an Intending Member. The law relating to purchase of a flat from a builder is not governed by Maharashtra Co-op. Societies Act but is governed by The Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale , Management and Transfer) Act, 1963. Under Section 4 of the said Act it is necessary that Agreement has to be in writing and it must be duly registered. Therefore, such an Agreement between the Builder and Flat Purchaser has to be in writing and has to be stamped as per Bombay Stamp Act 1958 and needs to be registered. Q.7) Is it necessary to register an Agreement for Sale of purchase of a Flat from Flat Purchaser (and not builder) wherein a Society is not registered ? The Agreement between the Flat Purchaser and another purchaser is not governed by the provisions of the Maharashtra Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1963 and therefore, it is not necessary to have such an Agreement registered with the Sub Registrar of Assurances