Meaning of Cooperative

 In a situation where the individuals/body corporate form a group with the

same object of promotion of economic, social and cultural interests of its
members, in accordance with co-operative principles, or a co-operative society
established with the object of facilitating the operations of such a co-operative
society decides to invest for mutual benefit, such an association when formed
and is enforceable by the state laws is known as Cooperative Society.
In a cooperative society, members are free to join and exit anytime the
membership of the co-operative society. The concept and legality of a cooperative
society are as follows:
• The cooperative society can be formed with a minimum of 15 members.
• Such a society shall have limited liability for members. Such society shall suffix
the word” limited liability” to its name.
• The maximum a person/body corporate can hold is 1/10th of share capital.
• Members forming co-operative societies must have registered under
the Cooperative Society Registration Act, 1912.
• Every society shall be registered with the word “co-operative” as the suffix.
• Such a society shall be registered with minimum capital contribution and
minimum holding of each member as prescribed.

24-07-2021 2
A. REGISTRATION OF HOUSING SOCIETIES
1. TYPES OF HOUSING SOCIETIES
2. PROCEDURE REQUIRED
3. THE DOCUMENTS REQUIRED FOR REGISTRATION OF TENANT
CO-PARTNER HOUSING SOCIETY.
4. KYC OF PROMOTERS
5. SUBMISSION OF APPLICATIONS
6. SCRUTINY OF THE APPLICATION
7. HEARING / OPPORTUNITY TO PROMOTOR
8. ACCEPT OR REJECT THE APPLICATION

B. CONVEYANCE OF SOCIETY

C. DEEMED CONVEYANCE

D. RECENT AMENDMENTS IN MAHARASHTRA COOP SOCIETIES

ACT ,1960

24-07-2021 3
24-07-2021 4
 REGISTRATION OF SOCIETIES
1.Types of Societies

1.TENANT OWNERSHIP HOUSING SOCIETIES

2.TENANT CO-PARTNERSHIP HOUSING SOCIETIES

3.OTHER HOUSING SOCIETIE S

-House mortgage
-House construction
-Flat Ownership Societies:
-Apartments formed under Apartments Act
MHADA(Maharashtra Housing and Area Development Act
and repair cess)

24-07-2021 5
1. TENANT OWNERSHIP HOUSING SOCIETIES
These are housing societies where land is held either on leasehold
or freehold basis by societies and houses are owned or are to be
owned by members.

In such societies, the societies are the owners or lessees of land,

plots are carved out and given on a long term lease to members to
construct their dwelling houses thereon as per the terms of the
lease deed. The society is thus an owner of the land only either on
leasehold or freehold basis and the ownership of building vests in
the individual members.

2.TENANT CO-PARTNERSHIP HOUSING SOCIETIES

These are societies which hold land on ownership or on lease and
construct flats thereon which are allotted to members who occupy
them. The societies, thus, hold both the land and buildings and its
members are allottees therein having the right of occupancy which
right is transferable by transfer of shares to other members in
accordance with the provisions of the Act.
The right of occupancy of the flat is transferable and inheritable
under MCS Act and by the byelaws of the society.

24-07-2021 6
DIFFERENCE BETWEEN 1 AND 2 is that:

In tenant ownership housing societies technically

the member is the tenant of the housing society
but for all practical purpose he is the owner of the
flat and
In tenant co-partnership housing societies the
member has a share in the property as a whole
and no particular claim to a particular house or
tenement.

24-07-2021 7
3.OTHER HOUSING SOCIETIES

3.1 House mortgage has the object of advancing loans

to the members and to the societies on the security of
land and houses.
In small towns there are number of persons who do not
own houses but have got individual piece of land. If
house mortgage societies are formed in each town
which would be open to such persons, it will help them
to apply for loan for construction of houses to
Maharashtra Co-operative Housing Finance Society.
These house Mortgages societies may be affiliated. The
members of these societies will get loans on the same
terms and conditions as the members of normal housing
Finance societies obtain loans.

24-07-2021 8
3.2 House construction deals in purchase and sale of
constructed houses or dwellings to members or other
societies.

3.3 Flat Ownership Societies:

These Societies are formed under the Maharashtra
Ownership Flats (Regulation and Promotion of
Construction, Sale, Management
and Transfer) Act, 1963.

3.4 Apartments formed under Apartments Act:

Maharashtra Housing and Area Development Act and
repair cess: If a society is registered as co-operative
housing society which is covered by the definition of
housing society as given in sec2(16) of the Maharashtra
Co-operative Societies Act.

24-07-2021 9
 REGISTRATION OF SOCIETIES
2.
PROCEDURE FOR FORMATION OF HOUSING SOCIETY
In all these four types of societies, the procedure to be followed for
formulation of registration proposals slightly differs.

For the purpose of registration of the Societies the City of Mumbai has
been divided as per the Municipal Wards.

There is a Deputy or Assistant Registrar of Co-operative Societies for each

Ward who is the Registration Authority for the Co-operative Societies in
that Ward.

Normally the office of such Registering Authority (RA) is situated within

the limits of such Ward. However, if no space is available for the office of
the RA in any ward the office of RA of such Ward is at the office of Deputy
Registrar Co-operative Societies, India House, 6th floor, opposite GPO
Mumbai.

In other places in each taluka a Deputy or Assistant Registrar of Co-

operative Societies is assigned the duties of registration and supervision
of Co-operative Societies.

24-07-2021 10
 REGISTRATION OF SOCIETIES
2. PROCEDURE FOR REGISTRATION OF CO-OPERATIVE SOCIETIES

The procedure for registration of society can be explained as the following

steps:
As per norms, builders are supposed to form the Association or housing
society within 4 months of the sale of 60 per cent of flats in the complex.

1.APPOINTMENT OF CHIEF PROMOTER

The first step to register a Society is that minimum 10 adult individuals
from independent families desiring to form a Society should gather and
hold a meeting to
(a) select a provisional committee and elect a Chief Promoter for formation
of a society
(b) select a name for such Society with three alternatives and to
pass appropriate resolutions in that behalf.
c) To collect the entrance fee and share capital from the prospective
members.
d) To open the Bank account in the name of chief promoter
e) To decide about area of operation of the Society
f) To decide about the registered office of the Society
g) To authorize chief promoter to submit the proposal for registration and
to do any other thing to get the society registered.
24-07-2021 11
 REGISTRATION OF SOCIETIES

2. NAME RESERVATION

The second step would be to apply to the registration authority (RA) for
reservation of name for the society and obtain letter from the RA in that
connection.
The resolutions passed at the promoters meeting as above should
accompany such application for reservation of name as aforesaid.
The letter reserving the name of the society shall be valid for 3 months. The
validity of the name is normally extended on an application for 1 or 2
further terms of 3 months each

24-07-2021 12
 REGISTRATION OF SOCIETIES

Prohibition against registration of societies with undesirable names.

No Society shall be registered by a name which, in the opinion of the

Registrar is undesirable, being a name which is identical with, or
which in the opinion of the Registrar so nearly resembles the name by
which any other existing society has been previously registered, as to
be likely to deceive the public or member of either society, or

which without the previous permission of the Government

concerned, suggests or is calculated to suggest the patronage of that
Government or connection with any body constituted by that
Government or any local authority, or which may, subject of any rules
made in that behalf, be deemed to be undesirable by the Registrar.”

24-07-2021 13
 REGISTRATION OF SOCIETIES
3. List of KYC Documents required for Registration
Following are the list of documents required for registering a housing
cooperative Societies:-
1. Passport size photograph of all members/ authorized person.
2. PAN Card as identity proof of all members of the cooperative society.
3. The residence proof of all members of the proposed housing co-operative
society.
Following can be used as a valid residence proof:-
Bank account statement; or
Aadhaar card; or
Passport; or
Driving license
4. Copy of Memorandum of Association (“MOA”) and Article of Association
(“AOA”), duly signed by all members or at least 10 members as authorized.
5. List and details of promoters.
6. Object of the housing co-operative society.
7. Proof of the principal place of business premises such proof can be
validated by
Electricity bill; or water bill; or Gas bill; or Property tax receipt.

24-07-2021 14
 REGISTRATION OF SOCIETIES

3.BANK ACCOUNT AND DEPOSITS

The third step would be to

(a) open a bank account in the name of the proposed Society as per
the RA’ s directions in that behalf that shall contain in the letter
reserving the name OR

Open in the name of the Chief Promoter and

(b) deposit therein the entrance fee, share money and the amount
recovered for preliminary expenses from the promoters and obtain the
certificate from such bank in respect of such deposits.

Normally the directions of the RA are to open account with a proximate

branch of the District Central Co-operative Bank or any Maharashtra
State Co-operative Bank or any other urban Co-operative bank.

24-07-2021 15
 REGISTRATION OF SOCIETIES

4.REGISTRATION FEE

The fourth step is to deposit the registration fee as applicable

with the Reserve Bank of India and to obtain the receipted
challan.
The registration fee for Housing Society is Rs.2,500/- and for
general Society is Rs.1250

24-07-2021 16
 REGISTRATION OF SOCIETIES

5.REGISTRATION PROPOSAL
The fifth and final step is to prepare and to submit to RA the
proposal for registration of the society. Under Rule 4 of Maharashtra
Co-operative Societies Rules the chief promoter should submit the
following documents for registration:
1) Application for registration – Form A
The application for registration in quadruplicate should be
signed by at least 60% of the promoter’s members and Chief
Promoter should attest their signatures.
2) Table giving information of society Form B
3) Table giving details of the members Form C
4) Statement of Accounts of the Members Form D
5) Four copies of the proposed bye-laws of the society
6) A list of promoter’s members, such as the name age occupation
current residential address of the promoter member, the cost of
share amount etc.

24-07-2021 17
 REGISTRATION OF SOCIETIES

7) A certificate from the Bank or Banks stating the credit balance therein in
favour of the proposed society;
8) A scheme showing the details explaining how the working of the
society will be economically sound and where the scheme envisages the
holding of immovable property by the society, the description of such
property proposed to be purchased, acquired or transferred to the society;
9) Such other documents as may be specified in the model bye-laws, if
any, framed by the Registrar;
10) The registration fees at the applicable rates,
11) Other documents like affidavit, indemnity bonds, copy of ration cards,
public notice in newspaper etc., as may applicable for different types of
society as per the notification issued from time to time.

24-07-2021 18
 REGISTRATION OF SOCIETIES
1. Other documents required for registration of Tenant Co-partner
Housing Society.
1. 7/12 extract of the land or property card.
2. Certificate from the competent authority regarding non-agricultural
land.
3. The order regarding applicable/non applicable of land ceiling Act.
4. Construction layout approved by the competent authority.
5. Letter of sanction for starting construction.
6. Certificate regarding completion of construction work.
7. Development Agreement if the land is taken for development.
8. Letter of Power of Attorney of the land.
9. Title search report of the land.
10. The registered agreement of purchases of the flat with necessary
stamp duty paid.
11. Architect Certificate regarding construction.

24-07-2021 19
 REGISTRATION OF SOCIETIES

12. List of Members.

13. Scheme of the Society.
14. Application for reserving name.
15. At least ten members are necessary for registration of
society.
However, the government has given permission subject to
some conditions for the Housing society of less than 10
members by exercising powers under section 7.
16. If the land is given by the government or undertaking
agency of the government then its guarantee letter.
17. No objection certificates from the Charitable
Commissioner if the land is of Trust.
18. Certificate of the competent authority regarding non-
agricultural plot.

24-07-2021 20
 REGISTRATION OF SOCIETIES

2. Documents required for registration of

Tenant Ownership Housing Society.

In Addition to the above mentioned

documents, following documents are
necessary.
• Zone Certificate from the competent
authority regarding in which area the land
situated.
• Layout Plan.

24-07-2021 21
WHAT HAPPENS IF THERE ARE LESS THAN 10 MEMBERS IN A
SOCIETY?
Co-operative Societies Commissioner & Registrar’s GR No.
SAGRUVO/1094/Pra.Kra 277/14C dated 10 March 1995 says “By
exercising the powers in section 7 of the Co-operative Societies
Act 1960 the government is pleased to exempt :

the provision of minimum 10 members for registering co-

operative Housing society under sub-clause 1 in Section 6 of the
said Act subject:
to the conditions that the plinth area of each flat in the proposed
co-operative Housing Society should not be more than 700 sq. ft
and
FSI should not be balance for utilization in the proposed societies
land/ building.”

24-07-2021 22
 REGISTRATION OF SOCIETIES
REGISTRATION PROCEDURE

As per rule 5 [1]

On receipt of an application under Rule 4 the Registrar shall enter
particulars of the application in the register of application to be
maintained in Form ‘B’ and give a serial number to the application and
issue a receipt in acknowledgement thereof.
5 [2]
The Registrar may give where necessary opportunity to the promoters to
modify the proposed bye-laws before finally registering the society or
rejecting the application for registration of the society.
5[3]
On registering a society and its bye-laws under sub-section (1) of section
9 the Registrar shall as soon as may be, notify the registration of the
society in the Official Gazette and grant to the society a certificate the
Registration number of the society, and the date of its registration. The
registrar shall also furnish the society with a certified copy of the bye-
laws approved and registered by him

24-07-2021 23
 REGISTRATION OF SOCIETIES

It is the duty of the concerned Registrar to register the Co-operative

Housing Society, by scrutinizing the proposal submitted after fulfilment
of above mentioned documents, and shall make an arrangement of
issuing certificate of registration society under Section 9(1) of the
Maharashtra Co-operative Society Act 1960, and copy of the registered
bye-law, memorandum regarding registration of society to the chief
promoter.

The order regarding registration of society should have been sent for
publishing in government gazette to the Government Printing Press for
appropriate action.

It is necessary to take decision on the registration of the society within a

period of two months from the date of the proposal of the society
submitted to the Registrar.

If proposal of society registration is denied or no decision is taken within

two months then it is necessary to send that proposal to the Divisional
Joint Registrar, Co-operative Societies under section 152 of the
Maharashtra Co. operative societies Act.
24-07-2021 24
 As per the Housing Society Bye-Laws:
1. The main objective of formation of the Society is to obtain the
Conveyance
2. If Conveyance is not executed by the Promoter/Landowner within four
months from the date of Registration of the Society, a case can be filed
against the Promoter/Landowner of the land to obtain the Conveyance
as per Section 13 of Maharashtra Ownership Flats Act, 1963.
3. Failure to give Conveyance is an offence and the Promoter/Landowner
of the land can be imprisoned up to 3 years or fined or both.
Although the Society is governed by the MCS Act, Rules and the Bye-
laws, a common situation most prevalent in a Cooperative Housing
Societies is where the Members and sometimes even the Office Bearers
are ignorant about the importance of the Conveyance Deed.

Seldom do the people realize the advantages of obtaining the

Conveyance Deed and the registering the name of the Society in Property
Card as the next owner of the land that makes it one of the most
important Documents that every Society should possess.

24-07-2021 25
 The Benefits of Conveyance are as under:

 1. Getting a legal title in the name of the Society.

 2. Conserve the additional FSI as per the Government
announcements. Property shall be free and marketable.
 3. Society can raise the loans for repairs and
reconstruction by mortgage.
 4. Permission from Planning Authorities is possible if
the building has to be reconstructed at a later date due
to dilapidation of the structure due to age or by
earthquake.
 5. Society can take the benefit of TDR for
redevelopment.
 6. Members can receive compensation from Builder on
redevelopment of the property of the Society.

24-07-2021 26
 Drawbacks of NOT DOING Conveyance:

 1. Even though anyone has purchased ownership flat, he/she is not the owner of
the land and building.
 2. In the event of a building collapses or damage sustained by the building, one
cannot reconstruct the building without the permission of the Promoter/Landowner
of the land.
 3. The Promoter/Landowner may mortgage the property purchased by anyone as
the Promoter/Landowner is the legal owner and holding the Title Deeds of the
Property.
 4. The Promoter/Landowner may transfer the FSI/TDR to his other projects and
enjoy the commercial benefits, depriving the flat purchasers/Society of its legal
entitlement.
 5. The Promoter/Landowner may make profit by sale of open spaces, gardens,
terrace and parking space supposed to be of the Society.
 6. The Promoter/Landowner may demand a huge amount from the Society, if
Conveyance is sought by the Society after a lapse of many years.
 7. The Promoter/Landowner may sell the entire Development Rights and the Legal
Rights on the land to third party and create a third party interest in the Property
and the Society will have to incur an exorbitant amount of expenses to clear the
same which may be difficult for the Society to sustain.

24-07-2021 27
There are 3 ways to get conveyance of land-
1) by Builder and Landlord
2) through Court Cases
3) Deemed Conveyance (DC).

1.
To get conveyance of land by builder, society should approach builder
and land owner requesting them to provide a draft of the Conveyance
Deed or by providing the draft to them and requesting them to sign
the same. Once the builder/landowner signs the document, the next
stage comes to pay stamp duty and register the conveyance deed and
obtain Index II from Registrar’s office. The society should then apply to
city survey office and get the property card changed in the name of
society.

24-07-2021 28
2.
The society can file civil suit against landowner and builder
under Specific Relief Act or can approach consumer court for
compensation.

The MOFA provides under section 13 that if builder or

landlord commits an offence with regard to the conveyance
of land then they can be punished with imprisonment for the
3years or with fine or with both.

The Provision of Rules 21 and 34 of the Civil Procedure Code

provides the remedy to face a situation when a
Promoter/Landowner does not execute the conveyance even
after a decree is passed by a Court. In such a situation the
Society which filed the suit should prepare a Draft of
Conveyance and submit it to Court. The Court will issue a
notice to a Promoter/Landowner along with a copy of the
Conveyance Deed.

24-07-2021 29
3. DEEMED CONVEYANCE- The third and most commonly used
way to get conveyance is Deemed Conveyance. In a situation
when a builder/landowner of buildings does not convey the
ownership of the land to the society, the society can make an
application to Registrar of Co-operative Housing Societies, to
transfer the ownership of the said building and land to them.
This process is carried on through Deemed Conveyance (DC) of
the title of the buildings and land in favor of the society without
the need of the builder/landowner to do so.

24-07-2021 30
Meaning of Deemed Conveyance
The Promoter (Builder/ Developer) is legally required to convey the land
and the building within 4 months of formation to the society or any
legal body of the flat purchasers.

However, it has been the experience that many promoters

(Builders/Developers) have not conveyed the land and building to the
legal bodies.

Therefore, government amended the Maharashtra Ownership Flats Act,

1963 (MOFA) and provided for the deemed conveyance in favour of the
legal bodies.
Under the provision, deemed conveyance means after the expiry of 4
months of formation of the legal body, the land and building is deemed
to have been conveyed to the legal body and to bring the same in the
revenue record, a Competent Authority has been designated who will
hear the parties on the basis of applications received from the
aggrieved party and transfers the title in favour of the legal body by
passing the necessary order and deemed conveyance certificate and
appoint an authorised officer to execute the conveyance deed in favour
of the society and execute on behalf of non co-operative builder or the
land owner.
Getting the title of land and building by adopting the above procedure
is known as deemed conveyance. 24-07-2021 31
Difference between the deemed Conveyance and the Regular
Conveyance

In case of regular conveyance, the builder/ Developer/ Landowner

prepares a conveyance deed, execute the same and appear before the
Sub-Registrar of assurance for admitting their signature. Without any
problem, the legal bodies get the conveyance with the co-operation of
the builder/ landowner.

In case of deemed conveyance, the builder/ land owner or their legal

heirs are not co-operating, therefore, the aggrieved parties appear
before the Designated Competent Authority, who hears all the parties
and passes the necessary order of conveyance.

Deemed Conveyance is obtained as a legal remedy against the defaulter

builder/ landowner who don’t want to part with the land and the
building in favour of the society.

24-07-2021 32
PROCEDURE TO GET DEEMED CONVEYANCE DEED-

If the builder or land owner refuses to give conveyance, then applicant

society needs to fill in Deemed Conveyance Application-

Form VII and attach all the related documents.

Also, society needs to send builder/landowner a legal notice stating

they are applying for DC.

24-07-2021 33
List of documents to be submitted along with the application for
applying for DC-
1.Affidavit made before a Notary or Executive Magistrate
2.List of all members and details of each member’s share certificate
3.True copy of Society Registration Certificate
4.Index II (extract after registering the document of immovable
property) and copies of Registered Agreements for all Flats/ Shops
with Stamp Duty & Registration
5.Copy of the legal notice issued to the builder for issuing Regular
Conveyance Deed
Land revenue documents from city survey office/collector’s office
7/12 Extract
City Survey Plan
Property Card
Village Form VI or register of mutation
Urban Land Ceiling Clearance Certificate (Collector’s Office)
N.A Order and latest NA tax receipt (copy of Non Agriculture Order
from Collector’s Office)

24-07-2021 34
Documents from Municipal Corporation
Property taxes paid
Approved plan of layouts of residences along with approved building
plans and location plan of the building
Intimation of Disapproval (IOD) – a clearance to the builder to start the
construction process

Documents needed from professionals

Architect’s Certificate of the layout plan
Full report of FSI left in the property from Panel Architect
Advocate issued Search Report of Land (for the last 30 years minimum)
Advocate issued Title Certificate of the Property

24-07-2021 35
Documents needed from promoter/builder/developer
Copy of Partnership Deed of all the partners of the builder firm

Development Agreement between landowner and builder

POA provided to builder from landowner

If necessary, the Will and Probate copy if land agreement signed by

landowner’s heirs along with Death Certificates of Landowners if
needed

Up until a few years ago, it was mandatory for the society to submit
an OC (Occupation Certificate) and BCC (Building Completion
Certificate).

But this was a harrowing process for societies as many builders had
abandoned the project before complying with all completion norms
and handed the reins to the society before obtaining these certificates
from authorities.

24-07-2021 36
Homebuyers found this step a major roadblock in obtaining
Conveyance Deed as the authorities would not issue OC and BCC
without proper compliance.

The government has scrapped the need for these in order to get a
Deemed Conveyance. However after it is granted, the society is
required to obtain OC and BCC from the municipal corporation.

The copy of Deemed Conveyance Deed along with the Index II has
to be sent to local authorities/government offices to officially
incorporate the name of the society.

24-07-2021 37
After the submission procedure, the Registrar sends an official/s for a
spot visit and issues a notice to the builder and the land owner (if
anyone is died then notice is served upon the legal heirs of the
deceased and if the address of any of the party is not known then the
notice should serve on the last known address of such party).

A Deemed Conveyance deed is created during this phase and is signed

by both society and builder/landlord.

The builder has the opportunity to present his plea if he so chooses,

after which a hearing is held formally. The intention is published in a
regional and English newspaper.

If builder/landlord do not appear for hearing (which is the case in

deemed conveyance), the authorities i.e. District Deputy Registrar
(DDR) have the power to stepped in the shoes of the landowner and
builder which is conferred on him under section 5A of MOFA on behalf
of developers/landlords.

24-07-2021 38
The Competent Authority will assess the application and if any
documents are missing or incomplete then they will ask the applicant
society to correct the mistake within fifteen days.

If no objection is raised on any counts, the society is given the

Deemed Conveyance.

This marks the end of the registration process and the society
becomes the owner of the land and building.

Again, the DDR can take deemed conveyance back from third builder
(in case builder or landlord has transferred the conveyance to third
builder) of and give it to the society.

It has been provided that the Deemed Conveyance order should be

issued within six months.
If order passed for non-granting DC then applicant society can
challenge the order before High Court and Supreme Court.

24-07-2021 39
Some of the Reasons which hinder the Promoter/Landowner for not executing
conveyance are as under;
• The original owner of the land finds it difficult to get Certificate under Section 230
(A) of the IT Act,( Restrictions on Registration of Transfers of Immovable
property in certain cases)as he has not cleared his liabilities.
• Internal disputes between the members of the family, Board of Directors in case
of limited companies, or among trustees in case of trust.
• Difficulty in getting a certificate under Urban Land (Ceiling & Regulation) Act,
1976 also creates difficulty in executing conveyance.
• The Promoter/Landowner delays or avoids the work of executing conveyance as
he wants to retain control over ownership of land and building.
• Directly or indirectly the Promoter is benefited if there is an additional FSI as
well as Transfer of Development Right (TDR) due to change in Law from time to
time for the purpose of construction.
• When the flats are transferred from one purchaser to the other he gets transfer
money or a share in the second sale.

24-07-2021 40
A. However, in a judgment which is very beneficial to Housing
Societies, Bombay High Court held that in a suit filed by a Co-
operative Society against the promoters for conveyance, it is not
necessary to calculate the value of property for the purpose of
court fees. (Reported in 1982 Maharashtra Law Journal, Page 607)
Hence, the Housing Societies can file suits against the Promoter for
conveyance by paying a nominal amount of Court Fees which
otherwise would have been in lakhs.

B. Secondly, under chapter-II of the Specific Relief Act, the

purchaser of the flat can file suit for specific performance of the
contract. The Housing Society can apply to the Court for directions
to the Promoter/Landowner to executive the Deed of Conveyance
in favor of the Society.

24-07-2021 41
Conveyance can be rejected on the grounds of
1. Incomplete documents,
2. Occupation Certificate (OC),
3. Dispute on open space between 2 builders,
4. FSI (Floor Space Index),
5. Same matter is pending before any court.

24-07-2021 42
Procedure to prepare DC deed and get it executed by competent
authority and send it for adjudication – stamp duty.

If the flat owners have paid stamp duty while registering the sale
agreement then they do not need to pay it again and only those flat
owners who have not paid stamp duty or who have purchased flat
premises before 1985 need to pay stamp duty as before 1985
registration and paying stamp duty was not necessary.

If all the members have paid their stamp duty (otherwise deed only
requires Rs. 100/- stamp duty) and if there is no balance FSI, the
office issues adjudication certificate.

After completing all the stages society’s name is incorporated in the

Land Revenue Records.

In this phase new applications are submitted to various departments

to make mutation entries in their records.

This would make the process complete and then only the property
becomes completely free and marketable.

24-07-2021 43
 Recent amendments in Maharashtra Coop
Societies Act,1960

1.
The state government has directed all cooperative
societies, including for housing, to henceforth submit their
audit reports in Marathi. ...
The circular, though, allows the English version
for societies that have made the required resolution
in their general body (GB) while appointing an auditor.
26-May-2021

24-07-2021 44
2. Maharashtra Ordinance No. xvii of 2020 an ordinance further to amend
the Maharashtra Co-operative Societies Act, 1960 dated the 28th October
2020.

Amendment of section 27 of Mah. XXIV of 1961.

(i) Amendment of section 27.—The said section 27 provides for voting

powers of members.
(ii) Sub-section (1A) thereof provides that a member who is not an active
member shall not be entitled to vote. In order to be an active member,
the member of the society should participate in the affairs of the society
and should avail minimum services of the society as specified in the
bye-laws of the society.
(iii) Active member:
o He has purchased and/or owns the Flat/Unit in the Society.
o He has attended at least One General Body Meeting within a
consecutive period of Five years. (Provided that nothing in this clause
shall apply to the member whose absence has been condoned by the
General Body of the Society).
o He has at least paid the amount equivalent to Three year of Society
Maintenance and Service charges within a consecutive period of Five
years.
24-07-2021 45
Generally speaking, a member who attends one annual
general meeting and who has availed the minimum services
of the society can be said to be an active member of such
society.
(iv) It is noticed that, in view of the pandemic Covid-19, the
societies may not be able to conduct the annual general
meeting within six months of the close of financial year and
consequently, member may not continue to be an active
member.

In view of this, to enable member to be an active member

and be eligible to cast his vote in the election of the society,
for the year 2020-21, it is considered expedient to amend
sub-section (1A) of section 27, suitably.

24-07-2021 46
(ii) Amendment of section 75.—Section 75 of the Act provides for
annual general meeting of the society.

Sub-section (1) thereof provides that every society shall within a

period of four months after the close of the financial year, get its
books of accounts audited and

within six months after the close of the financial year, call the
annual general meeting of its members.

In view of the pandemic Covid -19, it is considered expedient to

amend the said section to provide that for the financial year 2019 –
2020, the society may get its books of accounts audited within
nine months from the close of its financial year and call the annual
general meeting within twelve months from the close of the
financial year.

24-07-2021 47
iii) Amendment of section 81.—Section 81 provides for audit of society.
Clause (a) of sub-section (1) thereof requires the society to complete its
audit within four months of the close of the financial year.

However, due to pandemic Covid-19, the societies could not complete

its audit within the stipulated period.
It is, therefore, considered expedient to amend the said section, by
providing for extended period for the conduct of the audit of society for
the financial year 2019-2020.

The Maharashtra government in a revised notification issued on March

23, 2021 has allowed all cooperative housing societies to conduct online
Annual General meeting (AGM) till December 31st of this year. This is the
second extension given by the state. The earlier due date was March 31,
2021.
As per these new guidelines, all housing societies in the state now can
conduct online AGM. Earlier, only co-operative societies having more
than 50 members were allowed to conduct online meeting.

24-07-2021 48
( (iv) Amendment of section 154B-19.—
Section 154B-19 provides for constitution of committee of a co-
operative housing society. Sub-section (3) thereof provides that
the term of office of the elected members of the Committee and
its office bearers shall be five years from the date of first meeting
of newly constituted Committee and the term of office bearers of
the society shall be co-terminus with the term of the Committee.

In the light of pandemic Covid-19, section 73AAA of the Act has

been amended by the Maharashtra Co-operative Societies
(Amendment) Ordinance, 2020 (Mah. Ord. XII of 2020) providing
that, where the elections to the existing society cannot be held
for any reason not attributable to the members of such
Committee, the existing members of the Committee shall be
deemed to have continued till new Committee is duly constituted.

24-07-2021 49
3. Mumbai: Government plans to remove housing societies from Co-
operative Act ambit Monday, May 3, 2021

The Maharashtra government intends to remove housing societies

(CHS) from the Co-Operative Act ambit. Though the proposal is still
in the nascent stage and government is mulling other options like if it
can be brought under charity commission amongst others, the CHS
federations and association involved in it are against this action.
The Maharashtra Societies Welfare Association (MSWA) chairman
Ramesh Prabhu said, "The co-operative department has an
established mechanism to address the grievances obtained from
different housing societies. However, if it’s been removed from the
Co-Operative Act ambit then the complainants may have to go the
civil court and other courts, which will only lengthen the process.
Since these courts already have responsibility of other case hearings."
Recently, the CHS federations and associations held a virtual meeting
to discuss and decide the further course of action. Mr Prabhu
informed that if the government decides to implement its decision, a
state wide protest will be held. Already they are lodging in their
resistance. MSWA represents over 30,000 housing societies in
Mumbai alone.

24-07-2021 50
4. SOME IMPORTANT JUDGEMENTS

1. March 17,2021
MUMBAI: Bombay high court directed a society member, who had been
obstructing a redevelopment project for nearly 6 years to vacate his flat
in a dilapidated building in Goregaon. The Court said that “he must
bend his knees to law” to the high court judgement and to the
disciplines of the Cooperative Societies Act and the supremacy of the
general body.
Justice Gautam Patel said that as soon as a person becomes a member
of a cooperative housing society then his individual identity is
subsumed within that of the society. He said that he cannot claim
benefits of membership and yet deny the authority of the general body
of the society to bind that member by the decision taken by the
majority in a properly convened meeting.
Chirag Infra Projects Pvt Ltd vs Vijay Jwalal Coop Housing society.

Read more at:

http://timesofindia.indiatimes.com/articleshow/81538505.cms?utm_so
urce=contentofinterest&utm_medium=text&utm_campaign=cppst

24-07-2021 51
 2. *Supreme Court Judgement on Transfer of Flat to Nominee.
*Land Mark Judgement in the case of Indrani Wahi v Registrar of Cooperative
Societies and Others (‘Indrani Wahi Case’), the Supreme Court considered the
provisions of nomination under the West Bengal Cooperative Societies Act,
1983 (‘West Bengal Act’), wherein, the cooperative society is required to
transfer the shares and interest of such member in the name of the nominee.

*Nominee of Deceased Member is Absolutely Entitled for The Ownership by

Transfer in Co-op Society.*

*Society Can't Challenge The Right of Nominee a Settled Law of The Land.*

*No Legal Heirship, No Court Order Or Succession Certificate is Required.*

*After Nomination is Registered by society You Don't Need*

*1-To Prove Legal Heirship.*
*2-No Further Court Order Required.*
*3-No Succession Certification.*
Thus, Transfer to Registered Nominee is Automatic.

BUT

24-07-2021 52
Even in the Indrani Wahi Case, the court pointed out that the
requirement for transfer of shares in favour of the nominee, is
stipulated only for societies registered under the West Bengal Act and at
no point had the Supreme court decided that the rights of the nominees
will prevail over that of the successors.

In the Indrani Wahi Case, the apex court had observed that it would be
open for other members of the family of the deceased, to pursue their
case of succession or inheritance. Therefore, those who are claiming
their rights under inheritance, will be entitled to claim the title to the
shares in the society on the basis of inheritance.

24-07-2021 53
OTHER AMENDMENTS

Time limit for holding the AGM and minimum notice period
As per the model bye-laws for cooperative housing societies in
Maharashtra, every housing society has to hold an annual general
meeting (AGM) of the society, every year, before 30th September.

COVID-19 impact: AGM to go online

As an exception and in a much-needed relief to over 2 lakh
cooperative bodies, including housing societies, in Maharashtra, the
state cabinet chaired by Chief minister Shri Uddhav Thackeray had
given its approval to extend the time for holding the AGM up to
March 31, 2021. This came in the wake of the Coronavirus
pandemic, which made it impossible to conduct the AGM by
September 30, 2020. Now, the Maharashtra government in a revised
notification, issued on March 23, 2021, has allowed all cooperative
housing societies to conduct online AGMs till December 31, 2021.
This is the second extension given by the state. The audit report can
be finalised by the end of December, until further notice.

24-07-2021 54
The Maharashtra government on 24.07.2020,Thursday decided to allow
existing cooperative housing societies to continue until a new body is
elected. The decision is only applicable to housing societies with up to
250 members.
The decision was taken by the state cabinet, considering the surge in
Covid-19 cases in the state.

The government has postponed elections of housing societies three times

this year, in the backdrop of the health crisis. This move allows societies
to conduct elections whenever it is comfortable for them, and until then,
the existing body will continue to manage the affairs, officials said.

The cabinet has also decided to offer housing societies an extension of

five months, till December 31, to complete the audit of society books.

The decision applies to all cooperative societies such as banks, sugar,

dairy, etc. According to the existing rules, societies are required to
complete their financial audit by July, four months after completion of the
financial year.

24-07-2021 55
FEB 19, 2021
Maharashtra gets Bombay HC relief over cooperative society poll
In a relief to Maharashtra government which had extended the term
of managing committees of cooperative societies as elections could
not be held due to Covid-19 pandemic, the Bombay high court (HC)
has dismissed a petition challenging the state government’s decision.

The petition has sought appointment of administrators to oversee

functioning of cooperative societies till elections can take place.

The court held that as the government’s decision did not affect the
statutory and legal rights of the petitioner, his prayers could not
granted, and dismissed the petition.

The division bench of justice RD Dhanuka and justice VG Bisht, while

hearing the petition filed by Arun Kulkarni, was informed by advocate
Satish Talekar that the government’s June 2020 decision which was
followed by an ordinance on July 10, 2020 permitting extension of
tenure of managing committees of cooperative societies was
constitutionally not valid and hence should be set aside.

24-07-2021 56
Talekar in earlier hearings had submitted that there were around
35,000 cooperative societies in the state which included
cooperative sugar factories, cooperative ginning mills, district
central cooperative banks and multipurpose cooperative credit
societies.
He said that as the term of the managing committees in most
societies had ended in January 2020, elections were inevitable but
the state through concerned departments extended the tenure of
the lapsed committees.
Talekar submitted that this extension and the second extension due
to the pandemic in June 2020 were not as per the mandate of the
Cooperative Societies Act, and the fact that the state had made an
amendment to the Act through an ordinance to justify its extension
order was ultra vires of the Constitution of India.

24-07-2021 57
Kulkarni, through his petition, sought appointment of
administrators or committee of administrators to take care of the
affairs of cooperatives which was mandated in the pre-amended Act
till elections for the managing committees could be conducted.

However, advocate general Ashutosh Kumbhakoni, for the state,

opposed the petition on the grounds that the writ petition was not
maintainable as it was
1. canvassing a public cause and as the
2. petitioner had failed to show any personal loss suffered by him
due to the extension or ordinance, the same could not be
entertained. Kumbhakoni further submitted
3. that the Aurangabad bench of the HC had earlier rejected a
petition which had challenged the January 2020 extension and
the petitioner had failed to inform the court of the same.

24-07-2021 58
03/07/2021
Large credit co-operative society with turnover of Rs. 50 Cr
liable for TDS on payment of interest

Now, all credit co-operative societies with turnover exceeding

Rs. 50 Cr will be liable to do the TDS on payment of interest to
any person. It may be noted that all society with turnover less
than Rs. 50 Cr are not liable for TDS in respect of interest paid
to its members. However, the large co-operative society are
liable to do the TDS.

24-07-2021 59
 FOOD FOR THOUGHT

MAY 13, 2020

1.CAN RESIDENTIAL FLAT IN HOUSING SOCIETY BE USED AS
OFFICE?

FEBRUARY 26,2021
2. CAN HOUSING SOCIETY DENY PARKING SPACE TO TENENT?

APRIL 17,2021
3.CAN TERRACE IN CO-OP HOUSING SOCIETY BE SOLD OR
PURCHASED?

JULY 1, 2021
4. APPLICABILITY OF GST ON FULL VALUE OR VALUE EXCEEDING
RS. 7500 ?

24-07-2021 60
ANSWER 1 MAY 13, 2020

1.CAN RESIDENTIAL FLAT IN HOUSING SOCIETY BE USED AS OFFICE?

YES RESIDENTIAL PREMISES CAN BE USED AS OFFICE.
Under Bye-Law No.78(d) of the model bye-laws of 1984 and Bye-law
no.76(a) of the new model bye-laws of 1984 and Bye-law No. 76(a) of
the new model bye-laws of 2001 no member of the Society should use
the flat deemed to have been allotted to him for a purpose other than
for the one for which it has been allotted.
Entire flat can be used for professionals and part of the flat can be
used for business offices:
In general a misconception is prevailing in the housing societies in
Mumbai that a residential flat can be used only partly for professional
office or is also misconceived that a residential flat cannot be used for
business office at all. CRUZ of the judgements on user of residential
flats is that even if the entire flat is used by a professional person for
the practice of his profession, there is no change of user to a
commercial one and there cannot be a prohibition for the same. If the
flat is partly used for business office, then also if the dominant user is
residential, there is no violation of the provisions relating to the
change of user.

24-07-2021 61
ANSWER 2 FEBRUARY 26,2021

CAN HOUSING SOCIETY DENY PARKING SPACE TO TENENT?

Housing societies now cannot refuse parking to the tenants.

Many housing societies were refusing parking to tenants even

though the member/ owner of the flat have dedicated parking.
Maharashtra State Cooperative Appellate Court had decided in a
matter Brgd. S S Kadan where a society situated at Nepeansea
Road, Mumbai had denied a parking to the tenant of the Brgd S S
Kadan.
The flat owner had a dedicated parking and as such, parking is a
basically an amenity to the flat hence under Bye Law 78(B) parking
must be allowed to the tenants, the Court observed.
“The society should not discriminate, as parking rules are governed
by DC Rules and if the owner is eligible to get parking space, then
tenant should also get the benefit of that space.
A comprehensive parking policy is defined under Development
Control Regulation of Greater Mumbai. The rules are specifically
have laid down the regulations of parking.

24-07-2021 62
ANSWER 3 APRIL 17,2021
3.CAN TERRACE IN CO-OP HOUSING SOCIETY BE SOLD OR PURCHASED?
It has been reported that in some co-op housing societies, terraces have
purportedly been sold by the developers, also in some societies, top floor flat
owners have claimed ownership of terraces, with the connivance of office
bearers.

Whatever the case may be, the position is absolutely clear that no open spaces
including terrace can be sold as it is termed as common area.

The terrace is also shown as open space and is not included in FSI calculations
and member/s of the society cannot even cover the terrace.

Further the builder has no right to sell the terrace to a member and deprive
the other member of the open space rights as shown in Mumbai Municipal
Corporations record.

As per the law open spaces including terrace are meant for the benefit of all
the members who are entitled to the benefit under the plan and no single
individual can appropriate any part of the same. As per the Maharashtra
Ownership Flats Act 1963, section 4(1A) a (iii), (viii),and section 10(1), the
builder have absolutely no right or authority to sell In fact none of the
provisions, individually or collectively, authorise the builder or any other
entity including the society, to sell a terrace of the building.24-07-2021 63
In a landmark judgement given on this matter, Mr Justice D G Deshpande of
Mumbai High Court, on writ petition No. 4577 of 1985, decided on 5-7-
1999 in the matter of Smt. Ramagauri Keshavlal Virani V/s Om
Walkeshwar Triveni Co-op housing society Ltd & others.

The learned judge passed the judgement saying, for all these reasons, I
have no alternative but to hold that judgements of the Trial Court as well as
Appellate Court do not require any interference.
Lastly, it was argued by Mr. Naik that since two bedrooms have the opening
on the terrace, security of the flat of the petitioner should be maintained.

Mr. Deodhar appearing for the respondent No. 1 has given an assurance
that nothing will be done by the society to endanger the security of the flat
of the petitioner. This will, however, not prevent the society in exercising
its right over the terrace.

Hence, petition dismissed. Rule discharged. Stay vacated. No order as to

costs. Prayer for stay of operation of this order is rejected.

24-07-2021 64
 4. APPLICABILITY OF GST ON FULL VALUE OR VALUE EXCEEDING
RS. 7500 ? 01.07.2021
Greenwood Owners Association vs Union of India
1.CBIC Flyer and the temporary relief
In the early years of GST, The Goods and Services Tax Department
issued a clarification in the case of Co-operative Housing Societies,
wherein they categorically stated that GST would be applicable only
on the amount in excess of Rs. 7,500/-. The flier covers all Co-
operative Housing Societies, in essence, RWAs, Housing Societies or
Societies in residential complexes. This meant that the exemption
upto Rs. 7500 would have been applicable and only the balance
exceeding this amount, GST would have been applicable.
2. Circular and the U-turn
While the Government had made given an indication of their
intentions through the aforesaid flyer, the said interpretation
received a sudden jolt when the CBIC came out with a circular no.
109/28/2019-GST dated 22nd July 2019. As per the said circular,
the following clarification was provided:

24-07-2021 65
Sl. Issue Clarification
No.

5.
How should the RWA The exemption from GST on maintenance
calculate GST payable charges charged by a RWA from residents
where the maintenance is available only if such charges do not
exceed Rs. 7500/- per month per
charges exceed Rs.
member. In case the charges exceed Rs.
7500/-per month per
7500/- per month per member, the
member? Is the GST entire amount is taxable. For example, if
payable only on the the maintenance charges are Rs. 9000/-
amount exceeding Rs. per month per member, GST @ 18% shall
7500/- or on the entire be payable on the entire amount of Rs.
amount of maintenance 9000/- and not on (Rs.9000-Rs.7500) =
charges? Rs. 1500/-

24-07-2021 66
3. Advance Ruling Authorities and their adverse stand
Though the judgements of Advance ruling authorities are applicable
only upon the applicant, multiple associations commenced charging
GST on the entire component of maintenance charges and not only the
value above Rs. 7500 in order to avoid any disputes with the
Department. Some of the others continued with their old stand of
charging GST on the portion above Rs. 7500 only.

TVH Lumbini Square Owners Association [2019 (27) G.S.T.L. 610 (A.A.R.
– GST)] through order No. 25/ARA/2019, dated 21-6-2019.

Prestige South Ridge Apartment Owners’ Association [2019 (30) G.S.T.L.

107 (A.A.R. – GST)], Vaishnavi Splendour Home Owners Welfare
Association [2020 (32) G.S.T.L. 462 (A.A.R. – GST – Kar.)]

Vaishnavi Splendour Home Owners Welfare Association [2020 (34)

G.S.T.L. 360 (App. A.A.R. – GST – Kar.)].

24-07-2021 67
Order of the Madras High Court and the altered dynamics dated
01/07/2021

In the case of Greenwood Owners Association v. Union of

India [[2021] 128 taxmann.com 182 (Madras)], the question of
taxability on entire vs balance above Rs. 7500 reached the judicial
members of the Hon’ble Madras High Court. The Hon’ble Court ruled
in favour of the RWA stating that GST is applicable only on the portion
of maintenance charges above Rs. 7500 per month per member on
the following major grounds:

a. The term ‘upto’ hardly needs to be defined and connotes an upper

limit. It is interchangeable with the term ’till’ and means that any
amount till the ceiling of Rs. 7,500/- would exempt for the purposes
of GST.
b. Comparison could be drawn from other exemption entries of the
Service Tax and GST.
c. The prescription of a slab connotes that income upto that slab
would stand outside the purview of tax on exigible to a lower rate of
tax and income above that slab would be treated differently.

.
24-07-2021 68
Pros
> The impact of taxes on the individual flat owner would reduce to
a great extent (upto 7500*18%).
> If there are further judgements of any other High Court or Apex
Court, the Madras High Court judgement would attain finality. The
same may be quoted at all levels of the Department to get the
benefit of reduced tax burden.
Cons
> Where part of the outward supply is taxable (above Rs. 7500)
and part of it is exempt in nature (upto Rs. 7500), ITC would be
eligible to the extent of the taxable supply as per Section 17(2) and
(3) of the CGST Act 2017. Thereby, the common ITC for goods and
services received would have to be reversed proportionate to the
exempt portion as per Rule 42 and 43 of the CGST Rules 2017. To
this extent, the cost of procurement of goods and services may
increase in the hands of the association.
> If there are any other High Court judgement or the Supreme
Court overturns the Madras High Court, there is a potential risk of
payment of differential taxes and interest in future. Penalty may
also be leviable at the first level by the Department authorities.

24-07-2021 69
DIFFERENCE BETWEEN MOFA AND RERA

MOFA RERA

MOFA Stands for Maharashtra Ownership Flat Act (MOFA) RERA Stands for Real Estate Regulatory Authority (RERA)
Act 2016

This Act came into force from 6th Sept 2015. This Act came into force from 1st May 2016.

MOFA covered only structural defects in a building or any However, RERA Covers structural defect or defect in
defective material used. workmanship, quality, provision of services or any other
obligation as per Agreement for Sale.

The time period also changes from 3 years under MOFA The time period also changes from 5 years under RERA.

24-07-2021 70
Registration is not Compulsory for Developers and Promoters.
Under MOFA, if any defect in the building or material used is
brought to the notice of the developer within a period of 3 years
from the date of handing over the possession of the flat by the
developer to the customer, the developer has to
a) rectify the same, if rectification of such a defect is possible,
without any further charge being levied on the customer;
b) if it is not possible to rectify the defect, then the developer
would be required to pay reasonable compensation as is
determined by the competent authority.
According to the MOFA, carpet area is defined as balcony included
and the net usable area was permissible.
Not required to register marketing agents.
Registration of the project is not required.
It contains Insurance of Building.
Registration is Compulsory for Promoters and Developers.
Under RERA, in case of any structural defect or any defect in
workmanship, quality or provision of services or any other
obligation of the Promoter as per Agreement for Sale is brought to
the notice of the Promoter within a period of 5 years from the date
of handing over possession of the flat to the allottee
a) the Promoter has to rectify the defects within 30 days,
without any further charge to the allottee;
b) in case the Promoter fails to rectify such defect within the
agreed timeline, the aggrieved allottee would be entitled to
receive appropriate compensation in the manner as
provided under the Act.
According to the RERA, carpet area is defined as the net usable
floor area of an apartment, excluding the area covered by the
external walls, areas under services shafts, exclusive balcony or
veranda area and exclusive open terrace area, but includes the area
covered by the internal partition walls of the apartment.
Required to register marketing agents with RERA Authority.
Registration of the project is compulsory before any advertisement
or receipt of payment.
It contains Insurance of Building and title
(sec 17).
24-07-2021 71
Conclusion
Though legislation were on the same subject matter, yet they are
contrasting.
The rationale behind the distinction lies in the fact that RERA is much
broader in terms of its functioning and framework in comparison to
MOFA. The MOFA is only concerned with ‘flats’ while RERA covers the
whole real-estate sector and includes flat.
Also, mechanism of grievance redressal or registering of complaints
by buyer has not been addressed under the MOFA rather the buyer
has to proceed before civil court. On the contrary RERA provides and
lays down mechanism for grievance redressal and registration of
complaints before the Authority.
Further MOFA belongs to such class of such legislation that were
more regulatory in nature, instead RERA creates an environment for
the functioning and development of real estate sector.
Thus, based on the above consideration one conclusion for sure can
be drawn that the enactment of RERA marks the end of malpractices
and anti-consumer practices that existed on the face of real estate
sector. Hence, it paves a new way for creating a business ecosystem
in the real-estate sector with consumer welfare at its core.

24-07-2021 72
THANK YOU

CA TASNEEM DALAL
M/S T M DALAL & CO
8451031595

tmdalal_13@yahoo.com
tmdalalco@gmail.com

24-07-2021 73