Co-operative Society

An autonomous open and voluntary association of persons of the

weaker section of the society, to meet their common socio-economic and
cultural needs and aspiration through a jointly owned and democratic control
enterprise in accordance with the cooperative values and principles.
OR
A Cooperative Society is an Association of a minimum of 25 persons
untitled voluntarily to meet their common economic, social and cultural
needs and aspirations, through a jointly owned and democratically controlled
enterprise, registered under the Cooperative Societies Act.

Classification of Co-operative Societies

As per subject to the provisions of sub-section (1) of section 4, a co-

operative society formed with the object of facilitating the operation of any
one of the classes or sub-classes here in after given shall be classified as a
co-operative society of that class or sub-class namely:-

1.) Producers' society.

(Objective is producing and disposing of goods as
the collective property of its members.)

2.) Consumers' Society.

(Objective is obtaining and distributing goods to or
of performing services for its member, as well as
to other consumers within the area of
operation specified in the bye-laws.)
3.) Housing Society.
(Object of providing its members with dwelling
houses subject to the provisions of these
rules and on the conditions to be
determined by the Lt. Governor from time to
time) and may be of any of the following
types:-

⇒ Tenant Ownership.
⇒ Tenant Co-partnership.
⇒ Builder Co-operative.

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 ⇒ Ownership cooperative.

4.) Processing Society.

(Objective is the processing of goods by
mechanical or manual process.)

5.) Marketing society.

(Its main purpose is of marketing agricultural or
other produce and includes amongst its
objects, the supply of the requisites of such
production.)

6.) Joint Farming Society.

(Objective is increasing agricultural
production, employment, income and better
utilization of resources; land held by
members is pooled together and
is jointly cultivated by the members on behalf
of the co-operative society.)

7.) Collective Farming Society.

(The object is increasing agricultural
production land is acquired from outside in
the name of cooperative society and is
collectively and jointly cultivated by
the members themselves on behalf of the
cooperative society.)

8.) Co-operative Union.

(Principal objective is the undertaking of
Co-operative Education, Propaganda and
Training.)

9.) Apex Co-operative Society.

(Their principle object is the promotion of
the principal objects and provisions of
facilities for the operation of other co-
operative societies affiliated to
it.)

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 But as our project of Management of Co-operatives is “Housing Co-
operatives”. So, our group is going to provide focus the information on
“Housing Co-operatives” Housing is an important sector, with a direct
connection to human welfare and economic linkages to the construction
industry. The National Housing & Habitat Policy has been formulated to
address the issues of sustainable development, infrastructure and strong
public-private partnerships for shelter delivery. The objective of the policy is
to facilitate the construction of two million dwelling units each year. It is
envisaged that Government would provide fiscal concessions, carry out legal
and regulatory reforms and create an enabling environment. The private
sector would undertake actual construction activities.

Policies in the area of housing finance have been a key vehicle

through which home ownership has been promoted. Income tax exemptions
have been given to households building or purchasing homes; financial
institutions and builders have been given fiscal incentives to build housing
for low-income groups, and investors in housing finance companies have
been given tax breaks.

HUDCO (Housing urban Development Co-operative) plays a major

role in the implementation of government policies on housing. It has been
entrusted with the implementation of the following programmes: Low Cost
Sanitation. Night Shelter for Footpath Dwellers. Building Centres. Shelter
Upgradation under Nehru Rozgar Yojana (NRY) and Valmiki Ambedkar
Awas Yojna (VAMBAY). HUDCO has been allocating 55 per cent of its
housing loans for Economically Weaker Sections (EWS) and Lower Income
Group (LIG). Over 92 per cent of the dwelling units sanctioned by HUDCO
are meant for EWS and LIG. Out of a target of construction of 20 lakh
additional houses, 7 lakh houses would be constructed in urban areas and 13
lakh in rural areas. HUDCO is expected to meet more than 55 per cent of the
urban housing target, i.e., 4 lakh units.

The cooperative housing sector plays an important role. All the 26

State- level Apex Cooperative Housing Federations are members of the
National Cooperative Housing Federation (NCHF). At the grassroot level,
30,410 primary housing cooperatives are affiliated to State-level federations.
These federations obtain loans from various financial institutions for on-
lending to their member housing cooperatives as well as individual members
for construction/acquisition of dwelling units. These federations have
borrowed a sum of Rs.6.882 crores from LIC, HUDCO. National Housing

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Bank, cooperative banks, etc. and disbursed loans of Rs.7,371 crores to
primary housing cooperatives and individual members, thereby assisting in
the construction of about 22 lakh dwelling units in the country.

Introduction of Housing Co-operatives

The prime necessities of human beings are food, clothing and shelter
and housing cooperative is an essential for human existence as much food
and clothing. Housing is a significant subject having a concern with a
common man. One of the important problems faced by India is the housing
problem. The reasons are varied, like tremendous growth in population,
migration from rural to urban areas. Highly speculative trend in the cost of
land, weakening of joint family system thus creating a requirement of a
separate house for each family unit etc.

Co-operative housing emerged as a strong, well organized and

significant in order to. Solve the housing problem of common man. These
are legally established association of persons and are democratically
controlled by the members.

The working group on housing co-operatives has therefore said that,

“co-operative activity is the best means of providing decent houses at
reasonable costs to persons, particularly of low and middle income groups.’’

Mumbai is the 3rd largest density populated city in the world and the
prices of the land and construction is becoming unaffordable to the common
man. They also say that man is a social animal and is incomplete without a
social fabric. A person’s lifestyle, his culture, his social status all are
determined on where he stays.

Definition of Housing Co-operatives

"Co-operative housing society" means a society of persons-

(a) which is formed for all or any of the objects referred to in

section five of the act 1958;
(b) which has under its rules a share capital divided into equal
shares of one or more classes and not being preferential shares; and

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 (c) which under its rules is to terminate on a specified date or
when a specified object is attained or a specified event occurs- but
does not include a Starr-Bowkett society, that is to say, a society in
which the order of advances to members is determined either solely
or partly by the drawing of lots;
OR

A housing Co-operative is also defined as “an association run along

with co-operative principles (Voluntary membership, democratic member
control, member economic participation, autonomy and independence,
education, training and information, co-operation among co-operators
and concern for community.)”.

It is owned and managed by the members of the co-operative. Most

housing co-operatives are fully mutual and further reference to housing co-
operatives in this document refer to this type, where only tenants or
prospective tenants may be members, and only members may hold a
tenancy. This means that decisions are made by the people who are affected
by those decisions.

Housing co-operatives provide a way for people to share in the

ownership of property and live in it at affordable rent levels, as opposed to
rent levels designed to generate profit for an individual or company. They
are an alternative to home ownership in the traditional sense or renting in the
private sector.

Objectives of Co-operative Society

A co-operative housing society may be formed for all or any of the

following objects-

to enable each of its members-

 to purchase land and to erect a dwelling-house thereon; or

 to erect a dwelling-house on land already owned by him; or
 to erect a dwelling-house on Crown land leased by him for a term of
not less than 50 years being Crown land within an area approved by
the Governor in Council for the purposes of this Act;

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  subject to section thirty-four of this Act to purchase land upon which
is situated a dwelling-house; or
 to maintain and keep in proper repair his dwelling-house; or
 where the approval of the Governor in Council given after
consideration of a report by the registrar is first obtained-to
discharge a mortgage held by another society upon any land; or
 to discharge a mortgage or any other charge or security over or
affecting any land which mortgage charge or security was granted or
executed by the member in question in anticipation of the society's
making an advance to him and with the approval of the registrar to
the making of the advance; and

(b) for all or any of those purposes to make advances to its members
upon the security of freehold property or a lease for a term of not less
than 50 years of Crown land within an area approved by the Governor in
Council for the purposes of this Act.

Structure of housing cooperative

# First level: National cooperative

At the apex of the structure is the National cooperative housing
society’s federation (NCHF) which was established in 1969
and has headquarters in New Delhi. The objectives of this
institution are:-

1) Give publicity of cooperation housing movements by publishing books

and brochures.
2) To establish financial institutions at state level (Maharashtra Housing
Finance Corporation)
3) To help the primary housing cooperative to get loans for building houses
and flats at very nominal interest rate.
4) To undertake research for new building material so to reduce the
construction cost.

# Second level: State level housing cooperative

Their main objective is to guide primary housing cooperatives
regarding legal and statutory matters so as to get that
registered. They also help in negotiating with institution like
MHADA for allotment of plots.

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# Third level: Primary housing cooperative
The objectives are found in rural, semi urban and urban areas and can
get themselves registered if they have ten or more members
who have a fix source of income and who come together to
build a housing cooperatives and solve the housing problems
and prevent exploitation of Land lords. They provide a
systematic and organized way of maintaining the building
and property of housing cooperatives.

The basic guidelines for the formation of Co-operative society in

Maharashtra State are as follows:-

⇒ There should be at least ten persons or more as the Registrar may

determine from time to time.

⇒ These persons should be from different families.

⇒ These persons should be competent to enter into a contract under the

Indian contracts Act 1872.

⇒ He should reside in the area of operation of the Society.

⇒ He should be eligible as per the bye-laws of the proposed Society.

⇒ Any individual, firm, company or any other body corporate can become
member of the Society.

⇒ Any Society registered under this Act or Societies registration Act 1860

⇒ State & Central Government, Public Trust, local authority.

⇒ The object of the Society should be promotion of economic interests or

general welfare of the members or the public, in accordance with the
co-operative principles.

⇒ It should be economically sound, its registration should not affect

adversely on the development of the co-operative movement.

Bye-laws of the Co-operatives

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 Co-operation is an activity of the people. It is a self-generated,
voluntary and self-sufficient activity. Hence little governmental interference
is desirable. However considering the economic parameters of this
movement and interests of several persons involved there is a possibility of
misuse of personal power by any of the group-members. The governments
therefore had to pass legislation to monitor the activities of the co-operatives
mainly with the purpose of safeguarding the interests of all the members.

Great Britain for example had passed legislation as early as 1852.

Similar intervention of legislature can be seen in Germany and France
(1867) and Italy (1883).

In Maharashtra the Co-operatives are governed by the Maharashtra

Co-operative Societies Act 1960 and supported by Maharashtra Co-
operative Societies Rules, 1961. The legal system in the co-operatives
registered in Maharashtra State is elaborate. Moreover each co-operative
should have its own Bye-Laws which are the guiding principles of the co-
operative. These Bye-laws have to be approved through a resolution of the
Society. These bye-laws can be amended in the General body Meeting of the
co-operative. The only condition on the bye-laws is that they should not be
contrary to the Maharashtra Co-operative Societies Act, and have to be
approved by the Registrar.

Requirements for forming a cooperative society

⇒ Minimum number of persons 25.

⇒ The society's object should be promotion of the economic interests of
its members.
⇒ The proposed society should be capable of being run on economically
sound lines.
⇒ The registration of the proposed society should not have an adverse
effect on the cooperative movement.
⇒ The prospective members should contribute a minimum amount of
share capital prescribed by the Registrar of Cooperative Societies for
the particular type of society to be started.

Procedure for Registration of cooperative Society

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 On receiving such applications the Asstt. Registrar through his
subordinate will conduct an inquiry to find out the feasibility and economic
viability of the proposed Cooperative Society and whether its proposed bye
laws conforms to the Meghalaya Coop. Acts and Rules. In case a proposed
Cooperative Society is either a, Fishery, / Dairy/, Poultry/, Piggery/or
Handloom etc., views and comments from concerned department has to be
obtained before registration of such society.

After inquiry report with views and comments from concerned

Department are found favorable, Permission is given to complete the
necessary formalities for Registration.

A date will be fixed for holding the inaugural general meeting of the
promoter in which members will finally decide on adoption of the Bye-Laws
and matters concerning with day-to-day functioning of the Society including
constitution of Managing Committee, operation of Bank Account etc.

In the inaugural General Meeting, one of the Promoters presided over

the meeting. An officer from the Department is deputed to attend the
meeting and help the promoters in organizational matters. In this meeting
they will decide what type of a Society they want to form, how many
persons would join as members of the Society ,l elect the office bearers of
the society and decide the authorized share capital and the share capital to be
contributed by each members.

All the papers duly signed by the Promoters are to be submitted to

Asstt. Registrar of Coop. Societies who after satisfying himself on all points,
register the society and its Bye-laws.

The certificate of Registration in the form set forth and the schedule is
issued by Asstt. Registrar of Coop. Societies after registration of the society.
A copy of registration with Bye-laws is sent to the applicant and also to
concerned Departments.

Registration of Co-operative societies

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⇒ A co-operative society can be registered in Maharashtra State with the
Registrar of Co-operative Societies.
⇒ Any person competent to contract, as per the Indian contract Act, 1872
can join in the formation of a co-operative.
⇒ A group of ten persons, who reside in the area of operation of the
proposed society and are from different families, can join in application
for registration of a society.
⇒ A society with the objects of promoting the economic interests or the
general welfare of the members only can be registered.
⇒ No society which is contrary to the policy directives of the State can be
registered.
⇒ Registration can be obtained from the registrar on filling up the
application form with the necessary fees and the bye-laws.
⇒ Division/Amalgamation/Transfer and conversion of a co-operative is
allowed.
⇒ A Co-operative Society can enter into collaboration with any
Government Undertaking or any other undertaking with the prior
permission of the State Government for business.
⇒ It can also enter into a partnership with other co-operatives.

Certificate of incorporation as evidence

A certificate of incorporation under this Act shall be conclusive

evidence that all the requirements of this Act in respect of registration and
matters precedent or incidental thereto have been complied with:

Provided that nothing in this section shall affect any provision of this Act
relating to the winding up or dissolution of the society or the cancellation of
its registration.

Classification of Housing Co-operatives

(a) Tenant Ownership: In the case where the land is owned by the
Society and the structure on the plot is owned by the members.
Individual members are allotted plots by the co-operative to construct
their houses. The society creates infrastructure and may also arrange
the finance for the members.

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 (b) Tenant Co-partnership: The land and the constructed structure is
owned by the society and the members who are allotted the flats have
the easement rights.

(c) Builder Co-operative: where the builder floats a housing scheme and
sells the flats. The buyers of the flats then organize into a housing
society. Such societies are merely service societies or maintenance
societies.

(d) Ownership cooperative: - In this case, people working in an

organization come together and form them into a housing cooperative
society. They get their society register, apply to MAHADA.
(MAHARASHTRA HOUSING AND DEVELOPMENT
AUTHORITY) and get a plot allotted to them in LIG, MIG, and HIG
i.e.: low income group, middle income group, high income group.
Once the plot is sanctioned they approach a construction company and
depending on their budget build up housing society. E.g.: Gulmohar
cooperative housing society situated at Ceissor road, Andheri (west) is
the housing complex of the ICICI officers.

Terms and Conditions to be complied with for admission to

membership

1. No person shall be admitted as member of a co-operative society unless-

⇒ he has applied in writing in the form laid down by the co-operative

society or in the form specified by the Registrar, if any, for
membership along with a declaration .on oath that he is-net 9 member
of any other co-operative society having similar objects;

⇒ his application is approved by the committee of the co-operative

society in pursuance of the powers conferred on it in that behalf and
subject to such resolution as the general body may in pursuance of the
powers conferred on it in that behalf from time to time pass, and in the
case of nominal, associate, or sympathizer member by an officer of
the society authorised in that behalf by the committee.

⇒ he has fulfilled all other conditions laid down in the Act, the Rules
and the Bye-laws;

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 ⇒ in case of a firm, company or body corporate, society registered under
the societies Registration Act, 1860, a public trust registered under
any law for the time being in force relating to registration of public
trust or a local authority, the application for membership is
accompanied by a resolution authorizing it to apply for such
membership, and the sanction of the Lt. Governor has been accorded.

⇒ in case of a Cooperative Housing Society, he has been a resident of

the National Capital Territory of Delhi-for a minimum period of three
years at the time of applying for a membership in such society.

2. In case of vacancy in a housing society including group housing society

where layout and building plans have been approved by the competent
authority, the same shall be filled by the committee by notifying It in
leading daily newspaper of Delhi in Hindi and English. In case the
number of applications is more than the notified vacancies the
membership shall be finalized through draw of lot in the presence of
authorised representative of the Registrar.

Management of a cooperative society

As per the Bye-law, there will be a Committee of Management, initially

nominated by the Registrar of Cooperative Societies for a period not
exceeding 3 years and subsequently elected by the General Body once every
3 years. Among the members of the Committee of Management there shall
be office-bearers like President, Vice-President, Secretary, Treasurer etc. It
will be the responsibility of this Committee of Management to carry on the
executive management of the society in accordance with the provisions of
the Act, Rules and Bye-laws and as per the annual budget and programme of
action approved by the General Body each year.

⇒ The final authority of the Society vests in the General Body of the
Society comprising of all the members.
⇒ Every Society shall call Annual General Meeting within a period of
three months after the date fixed for completing or drawing up of its
accounts for the year.
⇒ At every Annual General meeting, the Managing Committee shall lay
a statement of loans given to the members of the Managing

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 Committee and their family members, Income and Expenditure
Account, Balance Sheet, a Report by the Managing Committee
regarding the Society’s affairs.

Failure to do so may attract the disqualification of the members of the

Managing Committee and other penalties.

⇒ A Special General Meeting can be called by the Chairman of the Co-

operative or by majority of the members of the Managing Committee.
Members too can requisition for such a meeting if 1/5 th of the total
members of the Society endorse this requisition.. The Registrar also
has the powers to call for a Special General meeting. So can the
committee of the Federal Society do so.

Failure to call for this meeting may attract penalty for the Managing
Committee.

⇒ It is the duty of every Managing Committee to arrange for holding of

elections of its members before the expiry of its term.

Election to a Specified Society shall be conducted by the Collector and that

of a Notified Society by the Registrar.

⇒ Management of the Society vests in a duly constituted Managing

Committee.
⇒ Reservation for the weaker section, women and scheduled
castes/tribes has been provided in the Managing Committee.
⇒ No committee is duly constituted unless the Registrar publishes the
names of the members of the Managing Committee along with their
addresses.
⇒ If a Managing Committee of a Society is not duly constituted, an
Administrator may be appointed by the Registrar.
⇒ An Administrator can also be appointed (for a period of six months)
by the Registrar if the Managing Committee is removed for negligent
performance as per the provisions of Co-operative Law.

A member of the Managing committee can also be removed by the

Registrar for negligent performance.

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⇒ The Managing committee can appeal against its removal / dismissal.
⇒ Office bearers of a Society can be removed by the way of No
confidence motion. Such a no confidence motion has to be supported
by at least one-third of the members of the managing Committee.
Removal from office is effected only after the resolution is passed by
a simple majority in the Managing Committee.

Members of societies

1.) The members of a society which is formed under this Act shall
be the persons who sign the application for membership on the formation
of the society, and any other persons who are admitted to membership in
accordance with this Act and the rules of the society.

2.) No rights of membership shall be exercised by any member

until he has made such payment to the society in respect of membership
or acquired such share or interest as is provided in the rules of the society
in that behalf.

3.) A person shall cease to be a member in any of the following

circumstances, that is to say-
(a) where his shares are transferred to another person in accordance
with the rules of the society, and the transferee is registered as
holder in his place;

(b) where his shares are forfeited in accordance with the rules of the
society;

(c) where any power of sale (whether expressed or implied) in any

mortgage given by the member to the society is exercised by the
society;

(d) where he becomes bankrupt or insolvent under any law relating to

bankruptcy or insolvency and the official receiver or assignee
disclaims in accordance with the provisions of such law;

(e) on death:
Provided that the estate of the deceased person shall remain liable
and his executor or administrator shall be and may be registered as

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 the holder of the shares as such executor or administrator (whether
eligible to be a member of the society or not) until some eligible
person is registered as the holder of the shares by transfer from the
executor or administrator or until the shares are withdrawn or
discharged in accordance with this Act and the rules of the society,
and while any such executor or administrator is so registered he shall
be deemed to be and shall have the rights and obligations of a
member of the society for all purposes other than voting at meetings
of the society and becoming a director thereof;

(f) where the contract of membership is rescinded on the ground of

misrepresentation or mistake;

(g) where he ceases to be a member in accordance with the rules of the

society;

(h) where the value of his shares is repaid or a refund in respect of his
subscriptions is made to him in accordance with the rules of the
society.

4.) Where shares are held by the executor or administrator of a

deceased member, the Board may in its discretion by notice in writing to
the executor or administrator call upon him to transfer the shares to an
eligible person or to withdraw or discharge the shares within six months
after receipt of the notice or within such further time as the Board may in
any particular case allow, and unless the shares are so transferred
withdrawn or discharged they may at the discretion of the society be
forfeited and dealt with as forfeited shares in accordance with this Act
and the rules of the society.

5.) Where a person becomes the trustee within the meaning of the
Commonwealth Act known as the Bankruptcy Act 1966 as amended
from time to time of the estate of a member or deceased member the
trustee may be registered as the holder of the shares of the member as
such trustee (whether eligible to be a member of the society or not) until
some eligible person is registered as the holder of the shares by transfer
from the trustee or until the shares are withdrawn or discharged in
accordance with the provisions of this Act and the rules of the society
and while the trustee is so registered he shall be deemed to be and shall
have the rights and obligations of a member of the society for all

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 purposes other than voting at meetings of the society and becoming a
director thereof.

Rights and Duties of Members of Society

Rights:-

1. Right to get certificate of allotment:-

Every member of a co-operative housing society, whether

registered before or after the commencement of this Act, to whom plots of
land or dwelling units have been allotted, shall be issued certificate of
allotment by the co-operative housing society under its seal and signature in
such form as may be prescribed.

2. Right to hold according to terms of allotment:-

Irrespective of the provisions of the Transfer of Property Act, or

the Registration act, any allotment or re-allotment of a plot of land or
dwelling unit in a building of a co-operative housing society to its member
as per terms of allotment shall entitle such member to hold such plot of land
or dwelling unit with such title or interest.

3. Right to transfer / inherit the property:-

The right, title and interest in a plot of land or dwelling unit in a

building of the co-operative housing society (including the undivided
interest in common areas and facilities) shall constitute a heritable and
transferable immovable property. However, such land or building shall not
be partitioned for any purpose whatsoever.

4. Right to undivided interest in common area:-

Every member of a co-operative housing society shall be

entitled to an undivided interest in the common areas and facilities
pertaining to the plot of land or dwelling unit allotted to him.

5. Right to use the common area:-

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 Every member of a co-operative housing society to whom a
plot of land or a dwelling unit has been allotted shall have the right to use
the common areas and facilities as prescribed by the co-operative housing
society. In case of any violation or misuse by a member, the management
committee is empowered to recover damages.

6. Right to attend meeting and vote:-

A member has right to attend all the meetings of the society and
vote thereat.

7. Right to contest election:-

A member has right to stand for the election of the management

committee.

8. Right to seek information from the society:-

A member can seek information relating to any transaction of

the co-operative housing society and the society is required to furnish such
information within 30 days from the receipt of request. The society may fix
the application fee for this purpose.

Duties:-

The rights of members underline the duties of the housing

society. The society should not discriminate between members and should
not place unlawful restrictions on them. Besides this, the society should be
prompt in attending to the complaints and grievances of the members as to
provision of services.

Liabilities of Members of Co-operative Society

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1.) A member shall be liable to the society for the amount, if
any, unpaid on the shares held by him, together with any
charges and other moneys payable by him to the society as
prescribed by this Act or the rules of the society.

2.) Where, under or in relation to any contract or policy of life

insurance or similar contract in a form approved by the registrar
after consideration of a report thereon from the Government
Statist, or by virtue of any legal or equitable assignment of or
trust created in respect of any such contract or policy, or
pursuant to any scheme relating to life insurance approved by
the registrar after consideration of such a report, provision is
made whereby, in the event of the death of a member of a
society to whom the contract policy or scheme applies or in the
event of the death of a member's spouse or domestic partner to
whom the contract policy or scheme applies, moneys will be
available for or towards the discharge of the member's liability
to the society, then the society shall be empowered-

(a) to receive from any such member, at such times as

are agreed upon by the member and the society, the
amount of each periodical premium or contribution
payable by him in respect of the contract or policy or
pursuant to the scheme; and
(b) to pay or otherwise deal with each such amount in
such manner as the contract policy or scheme requires or
allows; and
(c) if the member defaults in payment of any such
amount at the agreed time-

⇒ to make payment thereof pursuant to the contract

policy or scheme on his behalf or to take such other
action as the contract policy or scheme requires or
allows; and

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 ⇒ to recover from the member any amount in respect of
which the member has made default as aforesaid-and
any amount so recoverable shall until paid be a debt
due to the society by the member and the provisions of
this Act shall apply in relation thereto accordingly.
The society may make either by itself or in
conjunction with any other society or societies any
contract or arrangement relating to or connected with
the carrying into effect of this sub-section and may
carry out any such contract or arrangement.

3.) Where, under or in relation to any contract or policy of

accident or sickness insurance or similar contract in a form
approved by the registrar after consideration of a report thereon
from the Government Statist, or by virtue of any legal or
equitable assignment of or trust created in respect of any such
contract or policy or pursuant to any scheme relating to accident
or sickness insurance approved by the registrar after
consideration of such a report, provision is made whereby in the
event of any accident to or sickness of a member of a society to
whom the contract policy or scheme applies or in the event of
any accident to or sickness of a member's spouse or domestic
partner to whom the contract policy or scheme applies moneys
will be available for or towards the discharge of the member's
liability to the society.

Responsibility of members and Co-operatives

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 The relationship between tenant and co-operative is not a simple one.
The co-op supplies the tenant with a service (housing) according to a
contract (tenancy agreement/license). The tenant pays rent in return for the
housing they occupy according to the contract.

However, the co-operative is run by its members. The tenant is a

member and as such is responsible for ensuring that the co-op delivers the
service. A co-operator can simultaneously expect to receive a service whilst
being responsible for its delivery.

The member is responsible:

⇒ as a member, to participate in the smooth operation and democracy of

the co-operative. To attend general meetings. To participate in setting
policy.
⇒ as a tenant, to pay rent. To behave responsibly towards other tenants
and other duties as laid out in the tenancy agreement/license.
⇒ as a director, to ensure that the co-operative is run in a fit & proper
manner. All directors are responsible for ensuring that tasks are
carried out. Even when tasks have been delegated, all directors are
equally responsible for monitoring them. To make management
decisions.

The co-operative is responsible:

⇒ to provide tenants with suitable housing, and other duties as laid out in
⇒ the tenancy agreement/license.
⇒ to conduct business in a fit & proper manner.
⇒ to keep accurate records & accounts of the business of the co-operative.

In practice many of the co-operatives tasks are delegated to individuals.

However, all directors are equally responsible for ensuring they are carried
out and making checks.

Privileges and Duties of Society

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⇒ A Society is a Body Corporate by the name with perpetual succession
and common Seal.
⇒ It can acquire, hold and dispose off property in its name.
⇒ It can enter in a contract.
⇒ Institute and defend suits and other legal proceedings.
⇒ It is exempted from compulsory registration of Instruments relating to
shares and debentures of Society under the Indian Registration Act 1908
⇒ The society has claim only next to the Government, on the property and
interest of the borrowing members.
⇒ The society has claim over the sale price of agricultural produce of the
borrowing member.
⇒ It is mandatory on the part of the employer to deduct from the salary of
the employee, dues of the Society, if agreed upon by the member.
⇒ The Society can receive deposits and loans from the members and other
persons within the area of operation of the Society and /or on conditions
imposed by the Registrar
⇒ Loans can be advanced to the members only. With the prior permission
of the Registrar, loans can be advanced to other Societies.
⇒ The Society has to keep and maintain updated records in prescribed
format.
⇒ There are restrictions on the transactions with the non-members.

Property and Funds of Co-operative Society

⇒ No funds shall be divided among its members, other than the net profits
earned by the Society.

⇒ The society’s funds cannot be utilized to defend any proceedings filed

by or against any office bearer of the Society, in his personal capacity
under sections 78, 96 or 144-T of the Maharashtra Co-operative Societies
Act, 1960.

⇒ Remuneration can be paid to the Managing Committee members for

services provided by them to the Society.

⇒ Net Profit earned by the Society can be appropriated by the members

with the approval of the Annual General Meeting.

21
⇒ Reserve fund shall be maintained by the Society.

⇒ Investments of Funds shall be made as per the guidelines prescribed in

the Maharashtra Co-operative societies Act, 1960.

⇒ Audit, Inquiry Inspection and Supervision of Societies.

⇒ The Registrar of Co-operative Societies makes it compulsory for every

Government -aided Co-operative Society to audit its accounts at least
once in a co-operative year (i.e. April - March).

⇒ All the other Societies also have to get their accounts audited by a
Certified Auditor once in every co-operative year.

⇒ A Registrar has powers to order the Society to be re-audited. This is

however done by him suo-moto or in the case where 1/3rd members of
the Society apply to him for re-audit.

⇒ The Registrar can inspect the working of the Society on his own or on
application of its creditors.

⇒ The Registrar can commission an inquiry into the affairs of the Society
on the basis of the audit report or an inspection report. He can appoint an
Inquiry Officer and conduct an inquiry through him.

⇒ Similarly he can also conduct inspection of a Society just to ascertain that

all the Books of Accounts are being maintained properly and that the
affairs of the Society are being conducted reasonably by the Managing
Committee.

⇒ The Registrar can order for compensation, if it is found That any person
has misapplied or retained any property, or money of the Society, or has
caused breach of trust.

Change in Name of Society

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1. The name of a co-operative society may be changed under
section 14 so however that it does not refer to any caste or religious or
regional denomination and is not inconsistent with the objects of the co-
operative society.

2. Every change in the name of a co-operative society shall be

made by amendment 6f its bye-taws and shall be notified in the official
Gazette.

3. After the change in the name is approved by the Registrar the

Co-operative Society shall send the original registration certificate for
amendment to the Registrar, who shall return the same to the cooperative
society duly amended.

Change in Liability

1.) The change of liability of a co-operative society from unlimited to

limited and vice-versa or in terms of multiple of share capital, shall be
secured by passing a resolution in that behalf at a general meeting of the
co-operative society indicating in clear terms the manner of changing the
liability. The co-operative society shall give 30 days notice in writing of
such meeting to all its members and creditors and shall furnish them with
copies of the resolution proposed to be moved at the meeting. After the
resolution is duly moved and passed, a copy thereof shall be send to the
Registrar within three months of its passing.

2.) Every notice to be given by the co-operative society under sub-sec. (2)
of section 14 shall be sent by post under certificate of posting or other
wise to the address of each of its members and creditors gs recorded in
the book of the co-operative society. A copy of such notice shall be
exhibited on the notice board of the co-operative society and a copy shall
also be sent to the Registrar for exhibition on the notice board in his
office; and thereupon, notice of the resolution to change the form or
extent of its liability shall be deemed to have been duly given to all its
members and creditors, notice not being send to their correct address or
notice not being received by them, notwithstanding.

23
 3.) For the purpose of determining the claims of a member under clause
(b) of sub-sec. (4) of sec. 14 the value of a share of a member in a co-
operative shall be ascertained as follows:-
(a) In the case of a co-operative society with unlimited liability, the
value of the share shall be the actual amount received by the co-
operative society in respect of such share.
(b) In the case of the co-operative society with limited liability, the
value of the share shall be the amount arrived at by a valuation
based on the financial position of the -co-operative society as
shown in the last audited balance sheet, provided that it shall not
exceed the amount actually received by the co-operative society in
respect of such share.
Explanation - For purposes of this rule, form of liability refers to limited or
unlimited while 'extent' of friability means (a) face value of share (b) the
multiple of the value of shares subscribed, and (c) value limited as to
particular amount (such as guarantee liability) etc.

4.) Any member or creditor desiring to exercise his opinion

under sub-sec. (2) of sec. 14 shall inform the co-operative society
accordingly in writing and where he does not propose to withdraw his
entire shares or deposits, the members or creditor shall clearly indicate in
writing the extent of his withdrawal. The option once exercised shall be
final and shall not be revoked. The co-operative society shall examine
and draw up a scheme for orderly payment of all the claims in an
equitable manner including shares, the value to which shall be
ascertained in accordance with the provisions of sub-rule (3), the scheme
may also provide for settlement of claims by mutual agreement. Where
Registrar does not approve the scheme on the ground of impracticability
or undesirability, the resolution passed by the society under sub-rule (1)
shall be ineffective,

5.) After the Registrar approves the scheme, the cooperative

society shall make payments to members and creditors as provided in
clause (b) of sub-sec. (4) of sec. 14 and make a report to that effect to the
Registrar and furnish the Registrar with a proposal to amend the bye-laws
of the co-operative society duly passed in the behalf. On receipt of the
proposal, the Registrar shall register the amendment in accordance with
the provisions of section 11.

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 Reconstruction of a Society

1.) Where in the case of defunct societies or a co-operative society

which is being wound up, a proposal for compromise or arrangement-

(a) between a co-operative society and its creditors;

(b) between the co-operative society and its members, is received, the
registrar may on the application of the co-operative society or any
member or of any creditor of the co-operative society or of the
liquidator, order reconstruction of the co-operative society in the
manner hereinafter given.

2.) An application for reconstruction of 'a co-operative society

under sub-rule (1) may be made in Form 9. On receipt of such
application, the Registrar may taking into consideration the compromise
or arrangement for reconstruction of the co-operative society, if he thinks
fit, prepare a draft order indicating –

(a) the manner in which the amounts payable by the co-operative

society to its creditors should be paid and the amounts recoverable
from its debtors and members should be recovered:
(b) the manner in which the share capital, if any, of such member
should be reduced;
(c) the manner in which the scheme of reconstruction should be
implemented: and
(d) the manner in which the bye-law of the co-operative society
will stand amended in cruder to given effect to the scheme of
reconstruction.

A copy of the draft order shall be exhibited on the notice board of the co-
operative society and a copy thereof shall be exhibited on the notice board of
the office of the Registrar inviting objections and suggestions from, all those
interested within a specified time, which shall not exceed one month.

3.) After taking into consideration the objections and suggestion (if
any) received, the Registrar may issue an order approving such

25
 reconstruction or staying further proceedings in respect of such
reconstruction. On issue of an order approving the reconstruction, the co-
operative society shall stand reconstructed and the bye-laws of the co-
operative society shall be modified to that effect and to the extent.

4.) After the order referred to in sub-rule (3) has been made by the
Registrar the order of the liquidation already passed shall be deemed to
have been withdrawn with effect from the date of the order under sub-
rule (3).

Problems of housing society

(a) Scarcity of land:

In Asia, the rate of urban growth has led to an increase in
the construction activities and real estate which is as high as 42% of GDP as
compared to12% in Australia. As of December 2002, there were
approximately 710 million homeless people in India. And at the end of 8th 5
year plan there will be a housing shortage or 3.5 crores houses. This is also
because of tremendous growth in population and contribution of joint family
making requirement of separate houses for each nuclear family.

(b) Inadequate finance:

In the measure metros, housing finance cooperatives are
offering loans at very competitive rates. However in semi urban and rural
areas, there is no institutional finance available for building houses. The
housing urban developmental cooperative (HUDCO) has launched retail
finance for rural and semi urban areas and under them NIWAS scheme
sanctioned over 1500 crores and build over 1 million houses as on dec 2004.

(c) Malpractices of builders:

The allotment of land is subject to bureaucratic delays,
competition and political influence. Further the cost of the land especially in
a city like MUMBAI is highly speculative and is on this increased cost to the
members making the real estate a distant dream for a common man. They
also use substandard products like steel and cement and the quality of
construction also suffers.

(d) Disinterested members :

26
 In the busy city like Mumbai, both husband and wife is
working having a very hectic work schedule. They are already under
pressure of managing there households and careers. They do not have time
to socialize and neither contributes proactively for the development of
housing cooperative.

(e) The office bearers are poorly paid:

Most of the staff of housing cooperative is either retired
people or people who have taken VRS and are compensated very poorly for
services they offer. The young blood is missing in management of
cooperative as they do not pay handsome salaries.

Remedial measures to solve the problems

Following remedies are suggested for solving the problems of co-operative

housing societies:

Supplying materials on priority basis:

The building material should be provided on priority
basis. There should be a quota of this material to apex co-operative housing
society. The registrar of the society should have control on the quota allotted
to co-operative housing society.

Allocate land on priority:

Government should give preference to co-operative
housing societies while allocating land as to start the work by the societies
or otherwise whose existence is only on paper.

Bye-laws:-
There are no systematic bye-laws of co-operative housing
societies in the country. All co-operative housing societies should adopt
model bye-laws suggested by the committee appointed under the president-
ship of S.T. Raja. Thereby, the registrar of societies can have control over
the working of their societies.

Financial assistance:-

27
 Agencies like LIC, HUDCO etc. should provide housing
loans at concessional rates. Government should try to make housing
societies more strong. Government should establish central housing finance
institute to provide finance to apex housing societies.
Tax concessions:-
The houses build by co-operative housing societies
should get concession in taxes and certain incentives should be given.

Membership to houseless people:-

The membership of the housing society should be given
only to the people who have no house.

Procedure for issue of Winding up of the society

a. Before passing the order under section 63, the Registrar shall give an
opportunity to the society to show cause against the proposed order. The
show cause notice shall be sent to the President of the Society as its
registered address under registered post. The service of this notice will be
complete after 48 hours of the posting of the letter properly addressed
and pre-paid, containing the notice. The notice shall state the grounds on
which the order under section63 is proposed to be made.

b. After considering the reply from the Society which shall

be supported by the resolution its committee, or if no reply is received by
the Registrar within fifteen days of the service of the notice under sub-
rule (1), he Shall proceed to pass the order under section 63.
c. The order passed under section 63 and sub-section (1) of
section 66 shall be communicated to the President of the society in the
manner specified under sub-section (4) of section 63, at the registered
address of the Society. The communication will be complete as soon as
the letter containing the order is so posted.

d. The order referred to in sub-rule (3) shall also be

published in the official Gazette.

28
 e. The order referred to in sub-rule (3) shall take effect from
the date of order notwithstanding whether or not it is published in the
official Gazette and shall operate in favour of all creditors, contributories,
debtors and any other persons, having custody, possession and control
over any asset or record of the society.
FORM’E’

Notice under Rule 13(1)

By Registered Post A.D.
To,
The Chairman, …………………
……………………………Co-operative Society,
……………………………………

Sir,
It appears to me that amendment/amendments of the bye-laws of your
society as indicated in the attached statement is/are necessary and that
it/those is/are desirable in the interest of your society.

I am to request you to consider this/these amendment/amendments in

the interest of your society and to call upon you by this notice under Rule
13(1) of the Maharashtra Co-operative Rules, 1961, to take necessary steps
to make he amendments to the bye-laws of your society within,……………
days from the date of receipt of this notice, failing which action will be taken
as provided under section 14(2) of the Maharashtra Co-operatives Societies
Act, 1960.

Yours faithfully,
Registrar of Co-operative Societies.
No. ……………………….
Date ……………………….
[Seal of the officer]

Sr.No. The extract wording Bye-laws as Exact Reasons why

of existing bye-laws it would read wording of amendment is
after bye-law, if it considered
amendment is a new one necessary

29
 Registrar of Co-operative Societies.
FORM’A’
Application foe Registration Society
Place: ____________
Date: _____________
To,
The Additional/Joint Deputy Addistant Registrar, Co-operative Societies.
1. We submit herewith a proposal for registration of the following society
along with enclosures as indicated below.
2. We also declare that the information given herewith, including that in the
enclosures is correct to the best of our knowledge.
(a) Name of the proposed society:+
(b) Address to be registered:
(c) Whether liability is limited or unlimited:
(d) Area of operation:
(e) Objectives of the society:
(f) The amount of preliminary expenditure incurred by the
promoters till the date of application, and estimate of
expenditure likely to be incurred by them thereafter with a view
to getting the society registered.
(g) Language in which the books and accounts of the society will
be kept.

3. We are sending four copies of the proposed bye-laws signed by the

applicant (not less than 10).
Sr.No. Full Name Whether individual/ corporate Age Nation Profession
(1) (2) body(3) (4) (5) (6)
1. Chief Promoter
2.
3.
4.
5.
6.
7.

30
 8.
9.
10.
*.Strike of whichever is not applicable.
+.The name of the society should not have any reference to caste
or religious denomination.

Sr.No. Full Name Place of Amount Whether any In the case of

(1) (2) residence, village subscribed to other signatory of representative of society,
and taluka share capital the application is whether he is a member
(7) (8) a member of his of the committee of that
family society
(9) (10)
1. Chief
Promoter
2.
3.
4.
5.
6.
7.
8.
9.
10.

Name and address of the person to whom correspondence regarding

registration or otherwise should be addressed.

Signature-
1. Chef Promoter _______________ 6. _______________
2. _______________ 7. _______________
3. _______________ 8. _______________
4. _______________ 9. _______________
5. _______________ 10. _______________

N.B.-(1) in the case of a representative of society, a copy of the resolution of

the committee of the society authorizing him to sign on its behalf, this
application and bye-laws should be enclosed with this application.

(2) In the case of a corporate body, representative status of the

signatory on behalf of the corporate body should be indicated.

31
 (3) the expression “Member of family” means a wife, husband, father,
mother, grand-father, grand—mother, step-father, step-mother, son-
daughter, step-son, step-daughter, grand-son, grand-daughter, brother, sister
half brother, half sister, and wife or brother or half brother.

Enclosures-
1. Bank balance certificate.
2. List of persons who have contributed to the share capital together
with the amount contributed by each of them and the entrance fee to
be paid by them.
3. The scheme showing the details as to how the working of the society
will be economically sound, and where the scheme envisages the
holding of immovable property by the society, giving description of
immovable property proposed to be purchased, acquired or transferred
to the society.
4. a copy of the resolution authorizing a member of the committee of the
registered society to sign the application on behalf of the society.
5. a copy of the document authorizing any person to sign the application
on its behalf issued by a firm, company or other corporate body, a
society registered under the Societies Registration Act, 1860 or public
trust registered under any law for the time being in force relating to
registration of public trusts.

Sent by registered post……………/Delivered by hand by ………..to/in

the office of the Assistant Registrar/Deputy Registrar/Joint
Registrar/Additional registrar/Registrar.
………………..(Chief Promoter)
Received by registered post/hand delivery on by in the office of the
Assistant Registrar/ Deputy Registrar/Joint Registrar/Additional
registrar/Registrar.
Entered in the register of registration proposals at Serial No.
……………………………………….
(Signature of the officer receiving this

application).

ACKNOWLEDGEMENT

32
 Received Registration proposal no. …………… on ………………… for
the registration of ………………………….. Society from the chief
promoter Shri
……………………………………….
(Assistant Registrar/ Deputy Registrar/Joint
Registrar/Additional
registrar/Registrar.)
Place:
Date:

33
 Bibliography

Website media:-

.) <http://www.mah.nic.in/sahakaar/a.html>
.) < http://rcs.delhigovt.nic.in/regcop/act73/CHAPTER%20II.htm>
.) < http://www.avoncda.coop/Co-operative%20Social%20Firms.pdf>

Reference books:-

1). The Maharashtra Co-operative Societies Rules, 1961.

Conclusion

34