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CPRA makes representation to State Legislature Committee on MCS Act Amendment

Mumbai, 20 May 2013:  Responding to a public notice by Joint Committee of Maharashtra State Legislature soliciting citizens’ suggestions on Maharashtra Co-operative Societies (Amendment) Bill 2013, the Cuffe Parade Residents’ Association (CPRA) wrote a detailed letter on behalf of people living in all the co-operative housing societies in Mumbai. The letter, addressed to Harshvardhan Patil, Chairman, Joint Committee of Maharashtra State Legislature on MCS (Amendment) Bill 2013, was signed by Ashok Kanwar, Chairman of Cuffe Parade Residents’ Association (representing 46 housing societies), and Mr Ramasubban Balakrishnan, a leading member of the association. The letter said, “The said Ordinance to amend Maharashtra Co-operative Societies Act, 1960, has some negative features that will harm co-operative housing societies. Housing societies are only for administering the land, building and common amenities of societies and not for making profit. They are harmed by application of some new provisions of the Ordinance that seem to be primarily intended to regulate co-operatives formed for transacting profitable business, such as agricultural, sugar, dairy, banking & credit, and labourers co-operatives.

“It is therefore necessary to spare housing societies from some new provisions of the Ordinance, as well as some existing provisions of the Act. In the long term, it would be advisable to frame a separate legislation for co-operative housing societies.

“The 97th Amendment made it a Directive Principle of State Policy to ensure “autonomous functioning” and “democratic control” of cooperative societies. It is sad and ironic that many provisions of the said Ordinance can harm housing societies by:

(i)    Curbing their autonomy
(ii)    Giving scope for police interference and corruption
(iii)    Expelling and evicting senior citizens, widows, NRIs etc. – a violation of their fundamental rights
(iv)    Disqualifying managing committee members for petty and procedural reasons
(v)    Causing additional scope for disputes and lengthy court litigations
(vi)    Poisoning the atmosphere with caste-based quarrels & abuse of Atrocities Act

The detailed letter asked for changes in many provisions of the MCS Act.

See acknowledged copy of CPRA’s letter submitted on Friday, 17th May: http://tinyurl.com/CPRA-letter-MCS-Bill

See state govt’s public notice in prominent dailies: http://tinyurl.com/Notice-MCS-Bill

DRAFT OF CPRA’S LETTER IS COPY-PASTED BELOW.

Warm Regards,
Krish
9821588114

PS: I too am a signatory to the below letter as I participated in drafting it.
——————————————————————————————

To
Shri Harshvardhan Patil,
Chairman,
Joint Committee of Maharashtra State Legislature on
MCS (Amendment) Bill 2013.

Through
Shri MM Kaj,
Deputy Secretary,
Maharashtra Legislature Secretariat,
Vidhan Bhavan,
Backbay Reclamation,
Mumbai 400032
17th  May 2013

Representation about MCS (Amendment) Ordinance 2013
On behalf of Housing Societies

Respected Sir,

The said Ordinance to amend Maharashtra Co-operative Societies Act, 1960, has some negative features that will harm co-operative housing societies.

Housing societies are only for administering the land, building and common amenities of societies and not for making profit. They are harmed by application of some new provisions of the Ordinance that seem to be primarily intended to regulate co-operatives formed for transacting profitable business, such as agricultural, sugar, dairy, banking & credit, and labourers co-operatives.

It is therefore necessary to spare housing societies from some new provisions of the Ordinance, as well as some existing provisions of the Act. In the long term, it would be advisable to frame a separate legislation for co-operative housing societies.

The 97th Amendment made it a Directive Principle of State Policy to ensure “autonomous functioning” and “democratic control” of cooperative societies. It is sad and ironic that many provisions of the said Ordinance can harm housing societies by:

(vii)    Curbing their autonomy
(viii)    Giving scope for police interference and corruption
(ix)    Expelling and evicting senior citizens, widows, NRIs etc. – a violation of their fundamental rights
(x)    Disqualifying managing committee members for petty and procedural reasons
(xi)    Causing additional scope for disputes and lengthy court litigations
(xii)    Poisoning the atmosphere with caste-based quarrels & abuse of Atrocities Act

We, on behalf of the residents of co-operative societies in Mumbai, urge you to make suitable modifications in the MCS Amendment ordinance. Otherwise, the negative consequences of this legislation will cause sufferings for millions of residents of housing societies for years and decades to come.
CHANGES RECOMMENDED:

1. Kindly introduce suitable provisions for condoning reasonable procedural delays of upto three months in statutory compliances required from managing committees, such as:
a) Submitting Audit Rectification Reports as required by section 81 and 82
b) Filing Annual Report and Returns to the Registrar as required under Section 79
c) Holding Annual General Meeting on or before September 30 each year.
In its present form, the ordinance seeks to punish delays in the above-mentioned compliances with disqualification for six years, trial by co-operative court for offences under Section 146, with penalties u/s 147, etc. Surely, these actions are too harsh, given the fact that most office-bearers are rendering many hours of voluntary and unpaid service every week!

2. As per the ordinance, Section 26(2) of the Act, stipulates, “… Provided that a member who does not attend at least one meeting of the general body as above and does not utilize minimum level of services at least once in a period of five consecutive years, as specified in the bye-laws of such society, shall be classified as non-active member…
Provided also that, a non-active member who does not attend one meeting of the general body and does not utilize the minimum level of services as specified in the bye-laws, in next five years, from the date of classification as non-active member shall be liable for expulsion under section 35.

WORDS TO BE CHANGED: Kindly modify this last proviso as follows: “Provided also that, a non-active member of any co-operative society except a co-operative housing society who does not attend one meeting of the general body and does not utilize the minimum level of services as specified in the bye-laws, in next five years, from the date of classification as non-active member shall be liable for expulsion under section 35.”
Why this change is necessary:  Common people become members after investing lakhs and crores  of rupees to own a flat. If expelled, a flat-owner would have to be evicted. Evicting people, including senior citizens, widows, spinsters, etc. on flimsy grounds of not attending Annual General-Body Meetings is surely a violation of the Fundamental Right to Life and liberty. Citizens do not become members of housing societies to participate in governance and administration; they are compelled to become members after purchasing the flats, and they only aim to live peacefully. Please allow law-abiding and non-interfering citizens to live peacefully, instead of art-twisting them to attend meetings!

2. An existing provision of the Act, Section 73-B, says: (1) … the State Government may… direct, three seats shall be reserved.–
(a) one for the members belonging to the Scheduled Castes or Scheduled Tribes;
(a-1) one for the members belonging to the Other Backward Classes;
(a-2) one for the members belonging to the De-notified Tribes (Vimukta Jatis), Nomadic Tribes or Special Backward Classes;

WORDS TO BE CHANGED: Kindly insert a proviso that says, “Provided that nothing contained in this section is applicable to housing societies.”

Why this change is necessary: Caste-based reservations in housing societies will highlight caste distinctions between neighbours, as office-bearers will be compelled to seek caste-certificates for the purpose of holding elections. In metropolitan cities like Mumbai, caste distinctions have faded out of people’s memories in recent decades. Section 73-B will force people to become aware of which neighbor belongs to which caste, community or tribe. This is likely to cause groupism and quarrels along caste-based lines. In such a scenario, existing divisions and rifts may take on caste-based lines, under Scheduled Caste and Scheduled Tribe (Prevention of Atrocities) Act, 1989. Some words spoken in anger may also give occasion for frequent use (and misuse) of the Atrocities Act. In the long run, people may start segregating themselves by moving into societies where they are among their own caste or tribe. Please modify the MCS amendment promptly, to avoid causing such regressive tendencies.

3. As per the ordinance, Section 78, concerning “Power of suspension of committee” says -
(1) lf in the opinion of the Registrar, the committee makes a persistent default in performance of its duties or is negligent in the performance of duties or is otherwise not discharging its functions properly … the Registrar… may by order. -
(i) keep the committee under suspension for such temporary period not exceeding six months, as may be specified in the order;
(ii) And appoint an administrator or committee of administrators consisting of three or more members of the society, otherwise than the members of the committee so suspended, in its place or appoint an administrator or committee of administrators who need not be the members of the society, to manage the affairs of society;
Provided that nothing in this sub-section shall apply to a society, where there is no government shareholding or loan or financial assistance in terms of any cash or kind or any guarantee by the Government;

WORDS TO BE CHANGED: Kindly modify this last proviso as follows, “Provided that, no administrator or administrators shall be appointed to a society, where there is no government shareholding or loan or financial assistance …;”

Why this change is necessary: This appears to be a mistake. If not corrected, the above proviso empowers the Registrar to suspend the committee for six months, but does not empower him to appoint anybody in its place. In other words, it will leave a vacuum in the place of the managing committee that has been superseded in the case of societies with no government shareholding, etc. Surely, this cannot be the legislative intent! It appears that the legislative intent is to empower the Registrar to appoint members of such societies, but not outside persons as administrators.

4. Similarly, Section 78-A concerning “Power of suspension of committee or removal of member thereof”, says, “(1) If in the opinion of the Registar, the committee or any member of such committee has committed any act, which is prejudicial to the interest of the society…, he may by order stating reasons therefor -
(a)    (i) supersede the committee and –
(ii)  appoint a committee consisting of three or more members of the society otherwise than the members of the committee so superseded, in its place or appoint an administrator or committee of administrators who need not be the members of the society, to manage the affairs of society for a period not exceeding six months…
Provided also that, nothing in this sub-section shall apply to a society, where there is no government shareholding or loan or financial assistance in terms of any cash or kind or any guarantee by the government;”

WORDS TO BE CHANGED: Kindly modify this last proviso as follows, “Provided also that, no administrator or administrators shall be appointed to a society, where there is no government shareholding or loan or financial assistance in terms of any cash or kind or any guarantee by the government;”

Why this change is necessary: If not corrected, this proviso empowers the Registrar to supercede the committee, but nothing in the Act gives Registrar the powers to appoint anybody in their place in the case of societies with no government shareholding, loan, etc.

5. As per the ordinance, Section 81(5B) empowers the auditor or Registrar to file an FIR. It says:  “… Provided that, where the auditor has come to a conclusion in his audit report that any person is guilty of any offence relating to the accounts or any other offences, he shall file a specific report to the Registrar within a period of 15 days from the date of submission of his audit report. The Auditor concerned shall, after obtaining written permission of the Registrar, file a First Information Report of the offence. The Auditor who fails to file First information Report shall be liable for disqualification and his name shall be liable to be removed from panel of auditors, and he shall also be liable to any other action as the Registrar may think fit:
Provided further that when it is brought to the notice of the Registrar that the Auditor has failed to initiate action as specified above, the Registrar shall cause a First Information Report to be filed by a person authorized by him in that behalf”

WORDS TO BE CHANGED: Kindly add a proviso as follows, “Provided also that in respect of Housing Societies, the words “First Information Report” in this section and provisos thereof shall be substituted by the words “Complaint before the Co-operative Court”.

Why this change is necessary: The above section will create police harassment to housing society members and managing committee members without improving the standards of governance. As policemen have no education or training to understand accounting and financial fraud, they can cause harassment by frequenting the society in the name of conducting “investigations”, or by summoning members to the police station for interrogation etc. Few people are willing to devote time to managing the affairs of housing societies, as it is usually a voluntary, unpaid and thankless service. If fear of police harassment becomes widespread, nobody will be willing to serve on the managing committees, and the co-operative housing movement will collapse. It will be a sufficient deterrent if complaint is filed directly before the co-operative courts, instead of the police.

Sir, all our requests and recommendations are made for safeguarding the integrity and continuing harmony of co-operative housing societies, which are run by voluntary efforts of its members. While aiming for greater financial discipline and achievement of other social objectives, we urge the legislators not to lose sight of the larger objective, namely to facilitate the peaceful co-existence of different types of people with varied needs and interests.

Yours Sincerely,

1) Krishnaraj Rao, 12, New Shiv Krupa CHS, Kulupwadi Road, Borivli East, Mumbai 400066. 9821588114, building.rti.union@gmail.com

2) Ashok Kanwar, Cuffe Parade Residents’ Association (representing 46 housing societies), CPRA Garden, Cuffe Parade, Colaba, Mumbai 400 005. 022-22185714 cpramumbai@gmail.com
 
3) Ramasubban Balakrishnan, 1-4, 9th floor, Cuffe Castle, Cuffe Parade, Colaba, Mumbai 400005.  022-22187898 harida123@yahoo.com
 

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By friendly ghost – May 20, 2013


Thousands of Housing societies face the axe for missing 31st May deadline

Mumbai, 15th May 2013: Uncertainty looms before Maharashtra’s 80,000 co-operative housing societies where lakhs of families live. This is because many thousands of societies have not complied with government diktats issued a couple of months back with a grim ultimatum, “if information does not reach from your side, it is assumed that the working of the society is closed.” The looming danger is that the Registrar will de-recognize any society that misses the 31st May deadline.

Specimen circulars in English and Marathi: http://tinyurl.com/CHS-adopt-model-byelaws

Office-bearers of most societies are finding it hard to even understand the circular, which mandates them to hold a special general-body meeting (SGM) to adopt the bye-laws, appoint auditors for 2013-14 from a government-approved panel, and submit some basic information to the Deputy Registrar in a tabular format. The circulars, issued in English or Marathi, also contain a lot of other confusing information besides! Also, different dates and deadlines have been issued by different Deputy Registrars in various wards, but all leading up to the 31st May deadline.

Some office-bearers are not aware of the grave consequences of non-compliance. Others are locked up in internal disputes and power struggles, and therefore unable to comply. And many are afraid to pass the new model bye-laws, which will subject them to statutory audit, an independent Grievance Redressal Committee, and democratic elections supervised by a special authority. They are afraid of losing their grip over power and exposing their past misdoings!

OTHER COMMON REASONS FOR DELAY:

  • Many societies have not even received the circulars. The co-operation department has not made due efforts for disbursal. Most of the information-dissemination is happening due to activists.
  • Some societies may have been advised by lawyers and other professionals to be complacent.


THE OPINIONS OF EXPERTS & ACTIVISTS ARE DIVIDED:

  • At one extreme are the experts/activists who feel that that the circulars are nullified, as the Gujarat High Court has partially quashed the 97th Constitutional Amendment. See their reasoning here: http://tinyurl.com/97th-Quash

  • Some feel that the ultimatum of de-registration is an empty threat, which cannot be fulfilled. Section 14 of the Maharashtra Co-operative Societies Act 1960 (MCS Act 1960), relating to the Registrar’s ‘Power to direct amendment of bye-laws’ states, “If the society fails to make the amendment within the time specified, the Registrar may… register such amendment, and issue to the society a copy of such amendment certified by him…. the bye-laws as amended shall, subject to appeal (if any), be binding on the society and its members.” These experts also argue that the Registrar has no powers to penalize any society by de-registering it. His powers to de-register may be exercised only as per Section 21 of the MCS Act (http://tinyurl.com/CHS-MCS-Act-1960 ) and not otherwise. In other words, if the society fails to adopt the new bye-laws, then the Registrar may at most impose them unilaterally, but can do nothing more.

  • However, some experts are advising the co-operative societies to tread cautiously by immediately complying with the circular. They point out Section 79-A, titled ‘Government’s Powers to Give Directions in the Public Interest etc.’ Non-compliance may have extremely serious consequences, as per Section 79-A, Sub-section (3): “Where the Registrar is satisfied that any person was responsible for complying with any directions or modified directions issued to a society under sub-sections (1) and (2) and he has failed without any good reason or justification, to comply with the directions, the Registrar may by order — (a) If the person is a member of the committee of the society, declare him to be disqualified … for a period of six years from the date of the order, (b) If the person is an employee of the society, direct the committee to remove such person from employment of the society forthwith, and if any member or members of the committee, without any good reason or justification, fail to comply with this order, declare them disqualified as provided in clause (a) above.” In other words, managing committee members may be dismissed and also disqualified to contest elections for six years (effectively, two terms, or ten years), and employees may lose their jobs. Why take the risk, and suffer the pain and uncertainty of legal battles? So, societies should hurry up and comply within the next 15 days, advise these experts and activists.


POSSIBLE LONG-TERM FALLOUTS:

i)    It is likely that the Commissioner/Registrar of Co-operation will give extension of the 31st May deadline. It is unlikely that he will take any widespread penal action.

ii)    The Registrar may condone reasonable delays, provided the managing committee shows at least some reasonable efforts to comply.

iii)    However, if any aggrieved society member moves the registrar or co-operative court to take penalize the office-bearers, then they may be dismissed and disqualified.

iv)    Dismissal of existing office-bearers may lead to a “vacuum at the top” in many societies, as very few members have the competence or temperament to run societies.

v)    If any housing societies are de-registered, they will fall into a no-man’s land. Their bank accounts, the powers of its office-bearers to sign cheques and enter into contracts, and to seek legal remedies – all will suffer serious legal shortcomings.

vi)    If a society that has signed a Redevelopment Agreement with a builder is de-registered, it will put a big question-mark on its redevelopment. Even if the society is registered again, the earlier agreement may suffer from legal flaws. Some redevelopers may lose their shirts as they have already paid huge bribes and make huge investments before even a brick is laid!

BOTTOMLINE:

Some basic questions: If a housing society is de-registered, by what laws and rules will this group of neighbours govern themselves? Which authority will regulate their affairs?

In the aftermath of the Gujarat High Court judgment partially quashing the 97th Constitutional Amendment (and pending PILs before other high courts), there is much uncertainty about the MCS (Amendment) Ordinance 2013, scheduled to be ratified by the State legislature in July.

Dark storm clouds are gathering on the horizon, and there is sure to be some thunder and lightning in the monsoon session of the State Legislature. The big question is: Will it rain?

Warm Regards,
Krish
9821588114
Building.rti.union@gmail.com

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By friendly ghost – May 15, 2013


Why 97th Constitutional Amendment & Amended MCS Act 1960 are valid, despite Gujarat HC Judgment

The 97th Amendment has been partially quashed by the Gujarat High Court judgement. One school of thought says that because of this, the carpet has been pulled out from under the feet of all the state governments, and that they have all lost their power to amend their respective co-operative acts. According to this school of thought, amendment to Maharashtra Cooperative Societies Act 1960 (MCS Act 1960) made as per 97th Amendment stands scrapped, and therefore, all the changes made so far (eg. adoption of Model Bye-laws 2013) will be rolled back or put on hold.

Such is not the case. Please understand the reasons.

Read Gujarat High Court judgment on 97th Amendment: http://tinyurl.com/Gujarat-HC-97th-Amendment

The conclusion of Gujarat HC Judgment (point no. 27 of above file) says:
QUOTE
We, therefore, allow this Public Interest Litigation by declaring that the Constitution [97th amendment] Act, 2011 inserting part IXB containing Articles 243ZH to 243ZT is ultra vires the Constitution of India for not taking recourse to Article 368(2) of the Constitution providing for ratification by the majority of the State Legislatures. This order, however, will not affect other parts of the Constitution [97th amendment] Act, 2011.
UNQUOTE.

MCS Amendment Ordinance is not directly affected by this judgment. The reasons are:

FIRSTLY: Many PILs may have been filed with various arguments against the 97th Amendment (indeed, one such was filed before Aurangabad Bench of Bombay High Court). Such PILs may be pending before any of the 23 other High Courts in the country… and other High Courts may deliver judgments that differ from Gujarat High Court, or alternatively, keep the matter hanging for another year or two without delivering any judgment. Gujarat HC judgment is only suggestive, and it is not binding on any other High Courts and other states such as Maharashtra.

Gujarat HC judgment cannot be considered taken as final and binding nationwide until the same judgment is delivered by Supreme Court, after considering all the judgments of various High Courts, and/or after hearing appeals against judgments against various high court judgments in this regard.

SECONDLY: The MCS Amendment Ordinance has NOT been quashed by this judgment. Quashing of 97th Amendment actually gives even more power to State Legislatures to amend their respective Co-operative Legislations, as THEY WILL HAVE NO REQUIREMENT TO BE CONSISTENT WITH THE 97TH AMENDMENT.

CONCLUSION: Maharashtra State Legislature (and legislature of every other State) is at complete liberty to ratify the MCS Amendment ordinance, with minor modifications of wordings, or with major changes. They may or may not cite the 97th Amendment as their reason for changing their respective Act.

In Maharashtra, as Sharad Pawar (who stewarded the 97th Amendment through parliament) exercises considerable clout in the government, there is every likelihood that the proposed amendment of the MCS Act will go through — with or without making a reference to the 97th amendment. In the meantime, the MCS Amendment Ordinance continues to be in force.

Hypothetically, only these four possible events can prevent MCS Act Amendment from happening:

1) By citing the Gujarat High Court order to secure a stay from the Supreme Court on the 97th Amendment, and also amendment of various State Co-operative Acts.

2) By citing Gujarat HC order to secure a stay from Bombay High specifically on amendment of Maharashtra Co-operative Societies Act.

3) Opposition leaders like Uddhav and Raj Thackeray decide to politicize the whole issue, and strenuously oppose the amendment in the state assembly and outside also, stalling the amendment indefinitely.

4) Maharashtra government loses the will to amend the MCS Act, and allows the ordinance to lapse in July 2013 due to its inaction, without even re-issuing the ordinance for another six months.

Until some combination of these four things happens, MCS Act amendment is very much on track, and the amendment ordinance is likely to be ratified by both houses of State legislature in July 2013.

Also, before the deadline of 31st May, co-operative housing societies are required to adopt the model bye-laws issued by the State Registrar of Co-operative Societies: http://tinyurl.com/CHS-Byelaws-2013

Regards,
Krish
9821588114

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By friendly ghost – May 14, 2013


Self-employed Professionals will be Crippled by Maharastra’s New Housing Byelaws

7th May, 2013

To
Shri Harshvardhan Patil
Minister for Co-operation, Maharashtra
3rd Floor, Mantralaya Annexe, Madame Cama Road
Mumbai

Model Bye-law no. 170(a) will affect many self-employed professionals, cause bitter disputes in Housing Societies  

Dear Sir,

Many of the 80,000-odd co-operative housing societies (CHS) in our state have already adopted the new model bye-laws, complying with your department’s strict directions. By this month-end, a majority of them will have adopted them.

Some new model bye-laws are not necessary in for implementing amended Maharashtra Co-operative Societies Act 1960 and 97th Constitutional Amendment. We humbly request you to suitably modify or delete such bye-laws in the larger interest.

Download official copy of new model bye-laws for CHS: http://tinyurl.com/CHS-Model-Byelaws

Download new model bye-laws with annexures - forms etc: http://tinyurl.com/CHS-Byelaws-2013

Download selected sections of Amended MCS Act 1960: http://tinyurl.com/CHS-MCS-Act-1960

We draw your attention to bye-law no. 170(a) – a new provision that says that if any society member is found to have encroached on common areas, or used the flat for any purpose other than that for which it was allotted, “shall pay an amount equal to five times the monthly maintenance charges, per month with retrospective effect for the period for which such violation is existed.”

Sir, there are High Court judgments upholding individuals’ right to peacefully carry on professions from their own premises. Many self-employed professionals peacefully working from home e.g. Insurance Agents, Lawyers, Architects & interior Designers, Chartered Accountants, Translators, Tuition Teachers, etc. will be badly hurt by implementation of Bye-law no. 170(a) by their societies.

Also, in almost all societies, builders have illegally sold stilt-parking spaces and other common amenities to individual flat-owners. Technically, such flat-owners are encroachers. If penalties at the rate of five times the monthly maintenance are imposed, a reign of terror will be let loose in many housing societies.     
Please consider this example of how common people will be affected.

Example: SELF-EMPLOYED PROFESSIONALS & “TERRACE FLATS”

Arcadia Heights CHS Ltd. was occupied in April 2003. Mr John D’Costa and three others residing on the first floor of their building purchased “terrace-flats” from the builder, who charged each of them an extra amount of Rs 2 lakh to the small terraces on top of ground-floor shops (to which only they have access from inside the house). The terraces are clearly mentioned in their agreement. However, the managing committee has been recently disputing the right of these flat-owners to exclusively enjoy these terraces, and wants to seal them off.

Soon after the adoption of the New Model Bye-laws in April 2013, the society issued a general notice for “removal of all encroachments”.

The society also sent notices of “stopping all professional work from residential premises” to a chartered account, a lawyer and a freelance translator who work from home.

All these seven members were sent bills for March 2013 calculated as per bye-law no. 170(a):
(i)    Regular Monthly Maintenance bill = Rs 12,000
(ii)    Penalty for encroachment = Rs 12,000 x 5 times = Rs 60,000
(iii)    Penalty for encroachment for the last ten years (with retrospective effect) i.e. 120 months = Rs 72 lakhs

THEREFORE, TOTAL BILL FOR MARCH 2013 – Rs 72 lakhs.

Naturally, John D’Costa and his neighbours are shocked. They are unwilling to, and incapable of, paying this whopping amount. And so they decide go to High Court. However, until they can successfully get a stay, the society managing committee decides that it cannot reduce its demand and write off their dues.

Meanwhile, the society sends bill for April 2013, calculated as follows:
(a)    Regular Monthly Maintenance Bill – Rs 12,000
(b)    Monthly penalty amount – Rs 60,000
(c)    Monthly simple interest @ 21% per annum (see bye-law no. 72) on Rs 72 lakhs – Rs 1.26 lakhs

THEREFORE, BILL FOR APRIL 2013 — RS 1.98 LAKHS

The monthly interest shown in item (c) will increase in geometric proportion for every month as long as the society members do not pay the penalty amount of Rs 72 lakhs. At 21% per annum, monthly interest continues to mount on Rs 72 lakhs plus Rs 60,000.

After the third month, the society plans to issues notices proclaiming John D’Costa and his neighbours as defaulters, and initiate recovery proceedings under Section 91 or 101 of the amended MCS Act.

In other words, a normal housing society has turned into a legal battlefield, thanks to Bye-law no. 170(a).

Sir, does anybody believe that lakhs of affected citizens of Mumbai will quietly pay five times the monthly maintenance amount as penalty? And furthermore, with retrospective effect? People will naturally fight tooth and nail by every possible means — lawful and unlawful, to avoid paying such crushing penalties! Bye-law no 170 alone will result in tens of thousands of litigations!

THEREFORE, PLEASE MODIFY OR DELETE THIS INFLAMMATORY PROVISION.

Societies that have already adopted them must be directed to immediately call another Special General Meeting and either delete 170(a), or suitably modify it.
Full text of this vexatious bye-law is quoted here for your reference and action: “All open /common spaces meant for use of all members for eg. staircase, steps, landing areas, parking areas, lift, corridor, and such other spaces, cannot be occupied by any member for his own use. The use of such areas shall be restricted to the cause for which these are meant. Any member found to be violating the above condition by encroachment shall have to vacate the encroachment and further he /she shall pay an amount equal to five times the monthly maintenance charges per month for the period for which he/she has encroached such spaces and further members must not carry out any constructions, structural changes over and above the sanctioned plan without prior permission of the society and concern municipal authorities. Also members must not use the flat /unit for which it was meant /sanctioned. Any member violating the above directives shall pay an amount equal to five times the monthly maintenance charges, per month with retrospective effect for the period for which such violation is existed.”

Yours sincerely,
Ramesh Prabhu
Chairman
Maharashtra Societies Welfare Association

Copy endorsed to
1)    Shri Prithviraj Chavan, Chief Minister of Maharashtra,
2)    Shri Madhukar Chaudhari, Commissioner of Co-operation and Registrar of Co-operative Societies, Pune

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By friendly ghost – May 11, 2013


Attn Women! 3-Hour Orientation Program for Participating in Housing Soc. Management on Wed, 1st May

21st April, 2013: Two seats will be reserved for women on the board of every co-operative society, as per the 97th Constitutional Amendment, the amended Maharashtra Co-operative Societies Act 1960 and the newly announced model bye-laws. So far, in housing societies of Maharashtra, there was only one reserved seat for women, and that mandate was usually ignored. Now, with the State Co-operative Election Authority supervising elections, it will be impossible to ignore.

The moot question is: Will these reserved seats be filled up with “Rabri-devis” i.e. women who take orders from their menfolk, dummy-candidates of dominating males? Or will the housewives and working women of Mumbai use this opportunity to take their rightful place at the helm of housing societies, so that women’s interests are safeguarded? The answer is in our hands.

It makes good sense that housewives especially should actively participate. After all, they are most affected by the quality of upkeep of buildings, water-supply, sanitation etc., as they stay home for most of the day; their menfolk spend most of their day outside.

What prevents housewives from participating in discussions at meetings? Often, it is a lack of confidence. They don’t have confidence because they feel ignorant of the laws and rules. (Many men may also be ignorant, but they are better at hiding it behind a show of general knowledge or male authority.)

Maharashtra Societies Welfare Association (MSWA) has organized 3-hour orientation program specifically for women who wish to participate in governance of their societies, by availing of the reserved seats (and general category seats also if they wish).  With some experience, they can also occupy the paid posts of “functional directors” and “expert directors” as defined in the amended MCS Act.

DATE & TIME: Wednesday, 1st May, 4 to 7 pm.

VENUE: MSWA, A-2/302, Laram Centre, Opp. Platform 6, Andheri West, Mumbai.

FACULTY: Well-known experts & activists on co-operative housing societies.

REGISTRATION FEES – Rs 400/-per head.

DISCOUNTS:
(i) Fees for Two or more women attending from the same society  – Rs 300/- per head
(ii) EARLY-BIRD DISCOUNT: 10% discount on applicable fees if you register on or before 25th April.
Fees are inclusive of tea and snacks & printed notes.

TOPICS TO BE COVERED:
•    Principles and Functioning of co-operative societies in general and housing societies in particular
•    Objectives of 97th Constitutional Amendment
•    New features of amended MCS Act 1960 and New model bye-laws for CHS
•    Further changes in MCS Act in near future — What is needed, what is likely scenario
•    Members’ rights & responsibilities — active members, associate members, nominal members, etc.
•    Managing committee & office-bearers duties & responsibilities
•    Seat Reservations for Women, SC/ST/OBC etc.
•    Functioning of Grievance Redressal & Dispute Resolution Committee
•    Forums of redressal for various disputes & grievances outlined in Model Bye-laws e.g. police, consumer court, co-operative court, civil court, office of dy. Registrar.

To register, contact Mr Vishal Bamne on 9823911027 or 42551414, or email on mswa.hsg@gmail.com

Warm Regards,
Krish
9821588114
Krish.kkphoto@gmail.com

FOR YOUR REFERENCE:

Download official copy of new model bye-laws for CHS: http://tinyurl.com/CHS-Model-Byelaws

Download new model bye-laws with annexures - forms etc: http://tinyurl.com/CHS-Byelaws-2013

Download selected sections of Amended MCS Act 1960: http://tinyurl.com/CHS-MCS-Act-1960


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By friendly ghost – April 21, 2013


Good news!! Training seminar for Mumbai Co-op. Housing Societies on 28th April

http://datastore.rediff.com/h5000-w5000/thumb/5A5A5D66626C6D73/2cmx470eesjer4lb.D.0.MCS_Laws.jpg19th April 2013, Mumbai: A new era of co-operation has begun, with professionalism and law-abiding functioning, from Accounting Year 2013-14. It is upto us to study and understand, and adapt to the new legal changes brought into the co-operative sector by the recently enacted 97th Constitutional Amendment. If we do so, we will reap many benefits in the form of harmonious living and orderly functioning. However, if we neglect to understand the new laws and rules, the consequences can be painful.

Remember, knowledge is power. Also remember, ignorance may be bliss, but when the time comes for punishment, ignorance of the law is not an excuse!
Some changes may still be expected in the amended Maharashtra Co-operative Societies Act, as it is now before a select committee of the State Legislature, to be tabled before legislature in the monsoon session. But as it is, MCS Act stands amended already, and we broadly know the shape of things to come. Therefore, it is crucial to understand and prepare for the changed scenario.


MAHARASHTRA SOCIETIES WELFARE ASSOCIATION (MSWA) HAS ORGANIZED A FULL-DAY BASIC TRAINING PROGRAM IN CHS LAWS i.e. Various implications of 97th Constitutional Amendment, Amended Maharashtra Cooperative Societies Act, and Model Bye-laws

DATE & TIME: Sunday, 28th April, 9.30 am To 6.15 pm.

VENUE: MSWA, A-2/302, Laram Centre, Opp. Platform 6, Andheri West, Mumbai.

WHO MUST ATTEND?
• Managing committee members of Housing Societies, as they will have to make many adjustments in their style of working due to sweeping changes in the Maharashtra Co-operative Societies (MCS) Act, 1960 and New Model Bye-laws. Henceforth, elections must be held under supervision of the State Co-operatives Election Authority, and statutory returns need to be filed to the Registrar, failing which the managing committee will be disqualified and debarred.
• Society members with grievances, as they can get speedy relief owing to extension of Right to Information to co-operative societies, and also Grievance Redressal and Dispute Resolution Committee to be appointed. But first, they will have to understand their new rights and duties!
• Ordinary members & associate members, who are required to actively participate in the society’s affairs, failing which they may forfeit various rights and privileges.
• Women, who will enjoy two reserved seats on the managing committees, as against one formerly. But they must earn the respect of the men on the managing committee by getting thorough knowledge of the various aspects of running a housing society.
• Members of scheduled castes, scheduled tribes, etc., who will get three reserved seats – enabling active participation in their society’s governance.
• Chartered Accountants, Advocates, Tax Practitioners, Society Managers and other professionals, who will play an expanded role in housing societies. They will have fresh avenues for earning by rendering new service, but they must understand their statutory responsibilities and legal liabilities, and also guide the office-bearers. Professionals must have a thorough grip of new laws and rules.

REGISTRATION FEES – Rs 1,900/- per head.

DISCOUNTS:
(i) Two or more members attending from the same society – Rs 1,500/- per head
(ii) Housewives and Retired Persons — Rs 1,300/- per head
(iii) PLUS EARLY-BIRD DISCOUNT: 10% discount on applicable fees for above-mentioned fees if you register on or before 21st April.
Fees are inclusive of lunch, tea and snacks & printed notes i.e. gist of MCS Act & Bye-laws, plus copy of Amended MCS Act & Bye-laws on CD.

FACULTY: Well-known experts & activists on co-operative housing societies, retired officers of co-operation department, etc.
To register, contact Mr Vishal Bamne on 9823911027 or 42551414, or email on mswa.hsg@gmail.com.

TOPICS TO BE COVERED:
• Historical background of co-operative movement, land owners’ societies & housing societies
• Objectives & scope of 97th Constitutional Amendment
• MCS (Amendment) Ordinance 2013
• New features of amended MCS Act 1960, their Impacts on co-operative enterprises and on housing societies
• New model bye-laws for CHS, highlights & impacts
• Positive & negative effects of the recent amendments on various stakeholders
• Further changes in MCS Act in near future — What is needed, what is likely scenario
• Members’ rights & responsibilities — active members, associate members, nominal members, etc.
• Managing committee & office-bearers duties & responsibilities
• Audit, AGM, Election Authority& Election Rules, filing of Annual Returns & consequences of non-compliance
• Seat Reservations for Women, SC/ST/OBC etc. – how to implement
• How to set up Grievance Redressal & Dispute Resolution Committee, and how it will function
• Forums of redressal for various disputes & grievances outlined in Model Bye-laws e.g. police, consumer court, co-operative court, civil court, office of dy. Registrar – Theory & Practical Realities
• Importance of people’s participation, how & where to make representations, how to create a public campaign to inform, educate & participate

Warm Regards,
Krish
9821588114
Krish.kkphoto@gmail.com

Posted in Activism, Governance & Administration, RTI Act 2005, Right to Information.

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By friendly ghost – April 19, 2013


Letter to Maharashtra Co-operation Minister: Remove Toxic Provisions of MCS (Amendment) Ordinance 2013

To
Shri Prithviraj Chavan,
Chief Minister of Maharashtra,
Madame Cama Road,
Mantralaya, Mumbai.

Copy to: Shri Harshvardhan Patil, Minister for Co-operation and Textiles

11 April 2013

Please Remove Toxic Provisions of MCS (Amendment) Ordinance 2013


Respected Sir,

The Ordinance to amend Maharashtra Co-operative Societies Act, 1960, dated 14.2.2013, has some negative features that defeat the purpose of the 97th Constitutional Amendment passed in January 2012, specifically in respect of co-operative housing societies. The 97th Amendment made it a Directive Principle of State Policy to ensure “voluntary formation, autonomous functioning, democratic control and professional management of Cooperative Societies”. Unfortunately, the MCS Act, amended as per the said Ordinance, has untoward provisions that will:

1)    Curb the autonomy of co-operative housing societies
2)    Give draconian powers to Registrar’s office & statutory auditors
3)    Create scope for police interference & corruption in society affairs
4)    Make artificial divisions among members, and spread disharmony
5)    Raise the risk of expulsion & eviction of senior citizens, widows, NRIs etc.
6)    Increase risk of managing committee members being debarred for petty reasons
7)    Create new areas for disputes and lengthy court litigations
8)    Poison the housing society atmosphere with caste-based quarrels & potential abuse of Atrocities Act

Sir, the root cause of these problems is that many provisions have been introduced with the objective of reforming profit-making co-operative enterprises such as agricultural, sugar, dairy, banking & credit, and labourers co-operatives, which may have business dealings in hundreds of crores of rupees. But when these provisions are made applicable to co-operative housing societies, which are non-profit-making entities, they have untoward effects. Housing societies are formed for the limited purpose of maintenance of common amenities of the residents, and are usually joined involuntarily by flat-purchasers, as there is no alternative. They cannot be clubbed with other co-operative enterprises that are formed for transacting business and making profits, and where each member has a choice whether to join or continue business independently.

In the immediate term, the remedy lies in introducing some provisos that say, “Provided that this section/sub-section shall not be applicable to co-operative housing societies.”

In the long term, however, a lasting remedy lies in framing a separate legislation for co-operative housing societies.

Accordingly, we, the residents of co-operative societies in Mumbai, urge you to make the below-mentioned modifications in the MCS Act (amended vide the ordinance dated 14.2.2013), before placing it before the state legislature to be ratified. Otherwise, the negative consequences of this legislation will cause sufferings for millions of residents of co-operative housing societies for years and decades to come.

CHANGES RECOMMENDED:

1. As per the ordinance, Section 26(2), says,
“It shall be the duty of every member of a society
(a) To attend at least one general body meeting within a consecutive period of five years,
(b) To utilize minimum level of services at least once in a period of five consecutive years as specified in the bye-laws of the society:
Provided that a member who does not attend at least one meeting of the general body as above and does not utilize minimum level of services at least once in a period of five consecutive years, as specified in the bye-laws of such society, shall be classified as non-active member.
Provided further that, when a society classifies a member as a non-active member, the society shall, in the prescribed manner, communicate such classification to the concerned member within 30 days from the date of close of the financial year.
Provided also that, a non-active member who does not attend one meeting of the general body and does not utilize the minimum level of services as specified in the bye-laws, in next five years, from the date of classification as non-active member shall be liable for expulsion under section 35.”

WORDS TO BE CHANGED: Kindly modify this last proviso as follows: “Provided also that, a non-active member of any co-operative society except a co-operative housing society who does not attend one meeting of the general body and does not utilize the minimum level of services as specified in the bye-laws, in next five years, from the date of classification as non-active member shall be liable for expulsion under section 35.”

Why this change is necessary:  In a co-operative housing society, expulsion of member should not be taken up as all members (whether classified as active or non-active) have invested lakhs and crores  of rupees to own a flat. (This is unlike the members of other co-operatives, where a person may become a member by just owning shares worth a few thousand rupees.) Thus, after expelling a member of a co-operative housing society on the grounds of his being “non active” i.e. not attending AGM for 10 years, such member will have to be evicted from his flat, and further, the flat will have to be sold, and the value reimbursed to him. Forcibly dispossessing a member of any flat involves Constitutional issues and violation of the Fundamental Right to Life and liberty. Also, kindly bear in mind that membership of a co-operative housing society is not exactly “voluntary”; a citizen is compelled to become a member after purchasing the flat in a co-operative housing society, as there are no other alternatives available to him. This is because in major cities, decent ownership houses (other than slum and tenanted building) are by-and-large available only in co-operative housing societies.

2. Section 73-B says:
(1) Notwithstanding anything contained in this Act or in the rules made thereunder or any bye-laws of any society, on the committee of such society or class of societies as the State Government may, by general or special order, direct, three seats shall be reserved.–
(a) one for the members belonging to the Scheduled Castes or Scheduled Tribes;
(a-1) one for the members belonging to the Other Backward Classes;
(a-2) one for the members belonging to the De-notified Tribes (Vimukta Jatis), Nomadic Tribes or Special Backward Classes;
(3) Any individual member of the society, or any elected, member of the committee of a member-society, or any member of the committee of a member-society, whether elected, co-opted or appointed under this section, belonging to the Scheduled Castes or Scheduled Tribes, shall be eligible to contest the election to a reserved seat and every person who is entitled to vote at the election to the committee shall be entitled to vote at the election to any such reserved seats.
(4) Where no person is elected to any of the three reserved seats, then such seat or seats shall be filled in by nomination from amongst the persons entitled to contest the election to the reserved seats under sub-section (3)”

WORDS TO BE CHANGED: Kindly insert a proviso as follows, “Provided that nothing contained in this section is applicable to housing societies.”

Why this change is necessary: Without questioning the merits of caste-based reservations in general, we wish to point out that such reservations in co-operative housing societies will only highlight caste distinctions between neighbours. Currently, most co-operative housing societies are functioning without making visible distinctions between people belonging to various castes and communities. However, in order to comply with these provisions of section 73-B, people will now have to become aware of which neighbor belongs to which caste, community or tribe. Such heightened awareness of castes etc. is likely to cause groupism along caste-based lines, and quarrels citing caste-based characteristics. Needless to say, divisions and rifts between people already exist in some societies; however, it is unusual for people to make unfavourable references to members of the scheduled castes and tribes, for fear of being booked under Scheduled Caste and Scheduled Tribe (Prevention of Atrocities) Act, 1989. But now, managing committees of societies will be forced to ask for the caste-certificate of such members for the purpose of elections, and accordingly, references to caste may be made in writing, and orally also. Quarrels and stray remarks may also cause frequent use (and abuse) of the Atrocities Act. It is highly probable that this may cause a tendency for people to segregate themselves, i.e. go to live in societies where they are among their own caste or tribe.     

3. As per the ordinance, Section 78, concerning “Power of suspension of committee” says -
“(1) If in the opinion of the Registrar, the committee makes a persistent default in performance of its duties or is negligent in the performance of duties or is otherwise not discharging its functions properly and diligently or there is a stalemate in the constitution or functioning of the committee, occasioned by resignation, disqualification of members of committee or otherwise, the Registrar, after giving the committee an opportunity of showing cause, in writing, if any, within fifteen days from the date of receipt of the notice and after giving reasonable opportunity of being heard, and after consultation with the federal society to which the society is affiliated, comes to a conclusion that the charges mentioned in the notice prima facie exist, but capable of being remedied with, he may by order. -
(i) keep the committee under suspension for such temporary period not exceeding six months, as may be specified in the order;
(ii) And appoint an administrator or committee of administrators consisting of three or more members of the society, otherwise than the members of the committee so suspended, in its place or appoint an administrator or committee of administrators who need not be the members of the society, to manage the affairs of society;
Provided that nothing in this sub-section shall apply to a society, where there is no government shareholding or loan or financial assistance in terms of any cash or kind or any guarantee by the Government;”

WORDS TO BE CHANGED: Kindly modify this last proviso as follows, “Provided that, no administrator or administrators shall be appointed to a society, where there is no government shareholding or loan or financial assistance in terms of any cash or kind or any guarantee by the government;”

Why this change is necessary: If not corrected, the above proviso empowers the Registrar to suspend the committee for six months, but not to appoint anybody in its place. In other words, it will leave a vacuum in the place of the managing committee that has been superseded in the case of societies with no government shareholding, loan, etc. Surely, this cannot be the legislative intent! It appears that the legislative intent is to empower the Registrar to appoint a committee of three or more members of such societies, but not administrators.

4. There is the same shortcoming in Section 78-A concerning “Power of suspension of committee or removal of member thereof”, which says,
“(1) If in the opinion of the Registar, the committee or any member of such committee has committed any act, which is prejudicial to the interest of the society or its members or if the State Co-operative Election Authority constituted under section 73-E has failed to conduct the elections in accordance with the provisions of this Act or where situation has arisen in which the committee or any member of such committee refuses or has ceased to discharge its or his functions and the business of the society has, or is likely to, come to a stand-still, or if serious financial irregularities or frauds have been identified or if there are judicial directives to this effect or, if there is a perpetual lack of quorum or where in the opinion of the Registrar the grounds mentioned in sub section (1) of section 78 are not remedied or not complied with, or where any member of such Committee, stands disqualified by or under this Act for being a member of committee, the Registrar may after giving the committee or the member, as the case may be an opportunity of stating its or his objections in writing as provided under sub-section (1) of section 78 and after giving a reasonable opportunity of being heard, comes to a conclusion that the charges mentioned in the notice are proved, and the administration of the society cannot be carried out in accordance with the provisions of this Act, Rules and bye-laws, he may by order stating reasons therefor -
(a)    (i) supersede the committee and –
(ii)  appoint a committee consisting of three or more members of the society otherwise than the members of the committee so superseded, in its place or appoint an administrator or committee of administrators who need not be the members of the society, to manage the affairs of society for a period not exceeding six months:
Provided that the Registrar shall have the power to change the committee or any member thereof, or administrator or administrators appointed at his discretion even before the expiry of the period specified in the order made in this sub-section:
Provided further that, in case of a society carrying on the business of banking, the provisions of the Banking Regulation Act 1949 shall also apply and the committee shall not be superseded for a period exceeding one year:
Provided also that, nothing in this sub-section shall apply to a society, where there is no government shareholding or loan or financial assistance in terms of any cash or kind or any guarantee by the government;”

WORDS TO BE CHANGED: Kindly modify this last proviso as follows, “Provided also that, no administrator or administrators shall be appointed to a society, where there is no government shareholding or loan or financial assistance in terms of any cash or kind or any guarantee by the government;”

Why this change is necessary: If not corrected, the above proviso empowers the Registrar to supercede the committee, but does not give him the powers to appoint anybody in his place in the case of societies with no government shareholding, loan, etc.

5. As per the ordinance, Section 81(5B) says,
“The auditor shall submit his audit report within a period of one month from its completion and in any case before issuance of notice of the annual general body meeting, to the society and to the Registrar in such form as may be specified by the Registrar, on the accounts examined by him and on the balance sheet and profit and loss account as on the date and for the period up to which the accounts have been audited, and shall state whether in his opinion and to the best of his information and according to the explanation given to him by the society they said accounts give all information required by or under this Act and present the true and fair view of the financial transactions of the society.
Provided that, where the auditor has come to a conclusion in his audit report that any person is guilty of any offence relating to the accounts or any other offences, he shall file a specific report to the Registrar within a period of 15 days from the date of submission of his audit report. The Auditor concerned shall, after obtaining written permission of the Registrar, file a First Information Report of the offence. The Auditor who fails to file First information Report shall be liable for disqualification and his name shall be liable to be removed from panel of auditors, and he shall also be liable to any other action as the Registrar may think fit:
Provided further that when it is brought to the notice of the Registrar that the Auditor has failed to initiate action as specified above, the Registrar shall cause a First Information Report to be filed by a person authorized by him in that behalf:
Provided also that, on conclusion of his audit, if the auditor finds that there are apparent instances of financial irregularities resulting into losses to the society caused by any member of the committee, or officers of the society or by any other person, then he shall prepare a Special Report and submit the same to the Registrar along with his audit report. Failure to file such Special Report would amount to negligence in the duties of the Auditor, and he shall be liable for disqualification for appointment as an auditor or any other action as Registrar may think fit.”

WORDS TO BE CHANGED: Kindly add a proviso as follows, “Provided also that in respect of Housing Societies, the words “First Information Report” in this section and provisos thereof shall be substituted by the words “Complaint before the Co-operative Court”.
 
Why this change is necessary: If not corrected, the above section will create police harassment to co-operative housing society members, especially managing committee members who shoulder the responsibilities. As policemen have no education or training to understand subjects such as accounting and financial fraud, they can cause substantial harassment by frequenting the society in the name of conducting “investigations”, or by summoning members to the police station for interrogation, giving witness etc. As it is, few people are willing to devote time to managing the affairs of housing societies, as it is usually a voluntary, unpaid and often thankless service. If fear of police harassment becomes widespread, nobody will be willing to serve on the managing committees, and the co-operative housing movement will collapse. As a deterrent, it will be sufficient if complaint is filed directly before the co-operative courts.

Sir, on behalf of all co-operative housing societies, we earnestly plead with you make the changes suggested above before you table this Ordinance in the state legislature.

Yours Sincerely,

1) Krishnaraj Rao, 12, New Shiv Krupa CHS, Kulupwadi Road, Borivli East, Mumbai 400066
9821588114, building.rti.union@gmail.com

2) Ashok Kanwar, Cuffe Parade Residents’ Association (representing 46 housing societies)
CPRA Garden, Cuffe Parade, Colaba, Mumbai 400 005. 022-22185714 cpramumbai@gmail.com

3) Pushpa J Vijula,  5/3, Kailash Nagar,658, Tardeo Rd., Opp Bhatia Hospital,  Mumbai 400007.
09321741740  pvijula@yahoo.com pushp.vijula@gmail.com

4) Sulaiman Bhimani, Shop No.5 R-14 RNA Plaza, Somanigram Goregaon West, Mumbai 400104
9323642081 designerstouch11@gmail.com

5) Ravindra K Mehta, Harshvardhan CHS Ltd, C-204, Harshvardhan, Saki Vihar Road, Andheri east, Mumbai 400072. meeravi62@yahoo.com

6) Satyabhash Y. Salgaonkar, J 42, Vrushali Shilp CHS, New Link road, Shimpoli Chikuwadi, Borivali - west, Mumbai - 400092. 9819194196 salgaonkarsy@gmail.com

7) Mrs Indra J Ajwani, A/9 Bandra Amar-Jiwan CHS, Bandra West, Mumbai 400 050.
9819292142 sunil.2810@gmail.com

8) Ashok S Rathod ,31/914,Pantnagar Hans-Geet CHS Ltd,Ghatkopar (E),Mumbai-400075
9821741445 ashok.s.rathod@gmail.com

9) Prasad Subramaniam, 1, Pravin Villa, Shree Ram CHS, Behind M.P. Pump, Quarry Road, Bhandup, Mumbai – 78.  Mob  07666912020  prasadsubramaniam@gmail.com

10)  G R Vora, 275/3, Gope Nivas, Sion E, Mumbai 400022. 09869195785   grvora@gmail.com

11) Kamlesh Shantilal Shah, Tulsi Co-op housing society ltd., Flat no. 302, Telephone Exchange,
CA Road, Nagpur – 440008. Mob: 9422103349  kamlesh.shh@rediffmail.com

.  

Posted in Activism, Governance & Administration, Our Future.

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By friendly ghost – April 15, 2013


Maharashtra Housing societies, Red Alert! Oppose Amendments to MCS Act URGENTLY!

The recent amendments to Maharashtra Co-operative Societies Act 1960 (MCS Act) vide an ordinance has some dangerous issues. The 97th Constitutional Amendment mandated the States to amend the laws so that co-operatives could become truly autonomous and democratic. However, the amendments in Maharashtra’s law encroach on the fundamental rights of people living in co-operative housing societies, and will reduce the autonomy of the housing societies. Before the ordinance is ratified in the ongoing budget session, we – the residents and managing committees of co-operative housing societies – must make representations to the government and to the state legislature. We need to move quickly, as the ordinance may be tabled before the state legislature in the next few days or weeks.

There is a saying in Hindi, “Gadha-ghoda ek karna”, which literally means, “equal treatment to horses and donkeys”. The MCS Act does exactly that. This Act is not exclusively intended for the regulation and administration of co-operative housing societies, it also covers co-operative enterprises such as dairy co-operatives, sugar co-operatives, credit co-operatives, agricultural, and various other marketing and procurement co-operatives. Unlike housing societies, such co-operatives have hundreds or even thousands of members, and are involved in business activities spanning several districts. Some of them have turnover of several hundred crore rupees, and they attract the involvement of powerful politicians. Many of the recent amendments make sense when seen in the light of such enterprises, where members join in order to earn incomes and profits. These enterprises are expected to be run profitably, following the principles of the market economy.

We involuntarily become members of co-operative housing societies. We generally cannot own a flat in a particular building without becoming a member of that society. So, we flat owners elect a managing committee to manage the building and compound, water supply, garden area etc. We don’t want the managing committee to be profit-minded; we don’t expect it to earn profits and distribute a dividend. The scope of operation of a CHS is limited to its building and compound, and its turnover is mainly in the nature of maintenance dues, property tax collection etc.

Unlike flat owners, take the example of a person who owns buffalos. He can voluntarily choose to be a member of a dairy co-operative. Alternatively, he can sell his milk in the open market if he chooses not to become a member of any milk-marketing co-operative society. Also, unlike flat-owners, he also has the option of getting together with others like himself, and floating a new milk-marketing co-operative society if he does not like the existing one in his region.

The recent amendments in the MCS Act 1960 are largely designed to curb the corruption, politics and state interference in CO-OPERATIVE ENTERPRISES… BUT CO-OPERATIVE HOUSING SOCIETIES (CHS) ARE NOT BUSINESS ENTERPRISES! The yardstick for governing co-operative housing societies and co-operative enterprises cannot be the same!

WHY WE SHOULD BE ALARMED:

  • EVICTION OF MEMBERS WHO DON’T ATTEND MEETINGS: The recent amendments give a mandate to the managing committee to categorize all members as “Active” and “Non-Active”, mainly on the basis of their attending annual general meetings [see section 26(2)]. It then allows them to deprive the non-active member of his right to vote, and to initiate expulsion proceedings against the non-active members after 10 years have elapsed. The Act and the recent bye-laws have many ambiguities which can lead to multiple interpretations, e.g. if associate member attends meetings, and main member never attends meetings. Co-operative courts are full of cases where managing committees of some societies have deliberately and persistently misrepresented such facts on paper, or taken advantage of gray areas; and therefore, such a power is dangerous. Further, when such disputes are taken before the Registrar of Co-operatives, it gives the Registrar (and office of the registrar) a dangerous amount of discretionary power. The common experience is that such powers are misused by managing committee members to settle scores, and by the Registrar’s office to make money. This amendment infringes on the life and liberty of individual flat-owners, as the Act then gives the society powers to evict the expelled member from his flat… for the heinous crime of not attending meetings!!!
  • POWER OF AUDITOR TO FILE FIRST INFORMATION REPORT AGAINST OFFICE-BEARERS ETC: The recent amendments give a mandate to the auditor to directly file an FIR against specific managing committee members, office-bearers and society employees if they find instances of misappropriation and fraud. As the fees of the auditor are not fixed by law; they are generally decided and approved by the managing committee with general body approval, this clause [See section 81(5B)] gives the auditor power to virtually blackmail the managing committee and the society, who are his clients, to increase his fees, or to appoint him or his colleagues in other capacities e.g. functional director. Please remember that the managing committee members of many housing societies are only doing a voluntary job. Serving on the committee is usually an unpaid and thankless job, which very few society members are willing to take up. Being a managing committee member – especially the chairman or secretary – means sacrificing ones peace of mind. According to this amendment, the handful of people who voluntarily serve on the managing committee must be mortally afraid of antagonizing the auditor! In the hands of the auditor, who is basically a commercial person out to squeeze maximum amount of money from his clients, this power is likely to be misused, and lead to widespread misuse of the police and magistrate’s courts. (Note: In the Indian economic environment, making “adjustments” to the books of account is a routine practice, and almost every chartered accountant does it in everybody’s accounts. So, it is easy for any auditor to find faults in almost anybody’s books of accounts and to allege fraud, misappropriations etc.
  • INVOLVEMENT OF POLICE & CRIMINAL COURTS: Currently, the police avoid getting involved in housing society matters, and it is very difficult to get an FIR registered even in genuine cases of blatant fraud. Matters concerning housing societies generally land up in the Registrar’s office, or in the co-operative court. However, Section 81(5B) will lead to multiple forums taking up housing society matters. The police, who are overloaded and understaffed, have no time or inclination to investigate even pick-pocketing, theft and kidnap cases; and police will now be expected to register FIRs filed by auditors and Registrar, and investigate in the society’s books of account?! Police will be expected to visit co-operative society office and summon various society members to the police station for their say in matters relating to accounts etc! Housing society members will be summoned as witnesses by magistrate’s courts! Can you imagine the chaos and unhealthy environment that this will create?

This file has sections that are only relevant to Housing societies: http://tinyurl.com/Amended-MCS-Act-4-CHS   (The provisions relating to agricultural co-operatives, credit co-operative etc. have been deleted from this copy of MCS Act 1960, and the amendments from the ordinance relating to housing societies have been included). Read it!

I request friends in Mumbai Metropolitan Region (Mumbai, Navi Mumbai and Thane) to call for neighbourhood-level meetings to discuss the various implications of these amendments, and the steps that we can collectively take to oppose them. My colleagues and I will be happy to come to your neighbourhoods and help you understand the MCS Act and new Model Bye-laws. Alternatively, you may come to Maharashtra Societies Welfare Association in Andheri West (A2/302 Laram Centre, near Railway Station) with a prior appointment, to understand these issues. You may call me on 9821588114 between 9 am and 9 pm.

Act now. Please don’t delay. Otherwise, we all will be badly hurt by this Act.

Warm Regards,
Krishnaraj Rao
Building.RTI.Union@gmail.com

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By friendly ghost – March 8, 2013


Your Right to Vote & Stand for Elections is Curtailed by 97th Amendment!

6th March 2013: Unnoticed by Legal pundits, constitutional experts and activists, our right to vote – an unconditional right of all adult Indian citizens — is being curtailed. It is a creeping change that has just become visible in Maharashtra. A backdoor has been opened for curtailment. Based on Article 243ZO(2) introduced by the 97th Amendment of India’s Constitution in 2012 (Gazette http://tinyurl.com/97th-Constitution-Amendment-In ), co-operative laws and bye-laws are being framed in different states, that will affect the voters there. Currently, the change applies only to members of co-operative societies e.g. agricultural co-operatives, credit co-operatives, co-operative housing societies etc. But make no mistake, these changes can be precursors to sweeping changes that will affect voting rights of every citizen of India in all elections.

Please understand this: Following the 97th Amendment, CO-OPERATIVE SOCIETIES ARE NOW CONSTITUTIONAL BODIES, SIMILAR TO MUNICIPALITIES AND PANCHAYATS. So a similar logic can be made applicable to municipalities, panchayats, and other organs of the state.

http://datastore.rediff.com/h5000-w5000/thumb/5A5A5D66626C6D73/slpz3d6507j7q1ey.D.0.Krish_no_specs_3.jpg

CREEPING CHANGE, STEP-BY-STEP:

STEP 1: In January 2012, Article 243ZO(2) mandated, “A legislature of a State, may, by law, make provisions to ensure the participation of members in the management of the co-operative society providing minimum requirement of attending meetings by members and utilising the minimum level of services as may be provided in such law”.

STEP 2: On 14th February, 2013, following this noble-sounding constitutional mandate, Maharashtra legislature passed an ordinance amending the Maharashtra Co-operative Societies (MCS) Act, 1960. As per the amended Act, (Read http://tinyurl.com/MCS-Act-1960-Amended-Ordin ), discriminatory guidelines fixed for “active” and “non-active” members of co-operative societies. As per Section 26(2) of the amended Act, “It shall be the duty of every member of a society (a) To attend at least one general body meeting within a consecutive period of five years, (b) To utilize minimum level of services at least once in a period of five consecutive years as specified in the bye-laws of the society: Provided that a member who does not attend at least one meeting of the general body as above and does not utilize minimum level of services at least once in a period of five consecutive years, as specified in the bye-laws of such society, shall be classified as non-active member… Provided also that, a non-active member who does not attend one meeting of the general body and does not utilize the minimum level of services as specified in the bye-laws, in next five years, from the date of classification as non-active member shall be liable for expulsion under section 35.” Section 27(1A) says, “(1A) Notwithstanding anything contained in sub-section (1), an active member who subsequently fails to participate in affairs of the society and to use the services up to a minimum level as specified, from time to time, in the byelaws, shall cease to be an active member and shall not be entitled to vote”.

STEP 3:  On March 1, 2013, Maharashtra government’s Department of Co-operation released its Model Bye-laws for Housing Societies (http://tinyurl.com/CHS-Byelaws-Mrashtra-new ). These bye laws have added further conditions. Bye-law no. 3(xxiv)(a) defines “Active member” as “a person: (1) Who has purchased and/or owns the Flat / Unit in the Society. (2) Who attends at least one General Body Meeting of the Society in the previous Five consecutive Years (3) He has at least paid the amount equivalent to one Year of society Maintenance and Service charges, within a consecutive period of Five years.” Bye-law no. 118(v) further adds, “No person shall be eligible for being elected as a member of the Committee or co-opted on it, if… he is not an Active member”. Most alarmingly, a person who is categorized as a non-active member not only loses his voting right, and his right to stand for elections, but also, as per Bye-lay no. 54, becomes liable for expulsion, and soon afterwards, eviction from the flat that he owns. This bye-law says, “The member, who has been duly expelled from the membership of the society, shall not be entitled to continue in occupation of his flat and he shall arrange to hand over peaceful and vacant possession of his flat to the Secretary of the Society, within such period as the Committee may allow. On his failure to do so, he shall be liable to be evicted from his flat.” Bye-law no. 55 describes the procedure for having the property summarily disposed off within three months.

IN A NUTSHELL: A CONSTITUTIONAL MANDATE FOR ENSURING PARTICIPATION IN CO-OPERATIVE SOCIETIES, WAS INTERPRETED BY THE STATE OF MAHARASHTRA AS A MANDATE TO DISENFRANCHISE, DISPOSSESS AND EVICT LAW-ABIDING SOCIETY MEMBER. The flimsy excuse – failure to participate in Annual General Body Meetings!

Granted, the bar has been set laughably low: attendance of one single AGM in five years, and payment of maintenance and service charges for one year out of five years. But it is arbitrary; why only one year? Why not three years out of five years? If we accept curtailment of our voting rights based on arbitrary norms, then after 5-10 years, they can raise the bar as high as they like. And they can do it differently in different states! In some states, they may even make laws defining “active member” as a person who attends every single AGM and Special General Body meeting! And if and when that happens, the people in other states will remain silent, and feel grateful that it isn’t happening to them! If we generally accept the principle of differentiating “active members” and “non-active members” based on arbitrary norms, and evicting “non-active members”, then this creeping evil will be given a space to grow and expand in our own hearts and minds! Please remember, the roots of the Indian democracy is in our hearts and minds; if we allow the twisted logic of discrimination to enter our daily affairs in our societies, the roots of democracy will be corrupted and poisoned.

Why are our journalists, legal pundits, constitutional experts and activists silent? Can’t they see the fundamental rights violation in progress?

I believe they are silent because, at first sight, the amendment and the changes in co-operative laws seem like a collection of many good things. After all, everybody feels that non-participation by members is something to be curbed by any means possible. (I was among the first to greet the amendment with a big smile; see my article and power-point presentation here: http://tinyurl.com/12-impacts-97th-Amendment . But now I think otherwise.)

Maharashtra’s interpretation of the constitutional amendment promotes the culture of divide-and-rule. For example, in my society, I may not protest when a non-active member is evicted, because I am easily able to attend at least one AGM in five years, and pay my dues on time. But where is the guarantee that these will remain the only criteria? And if I am disqualified and evicted after 5-10 years as per some new criteria, then others who are qualified as “active members” will remain silent!

I am reminded of this poem:
“First they came for the Socialists, and I did not speak out–
Because I was not a Socialist.
Then they came for the Trade Unionists, and I did not speak out–
Because I was not a Trade Unionist.
Then they came for the Jews, and I did not speak out–
Because I was not a Jew.
Then they came for me–and there was no one left to speak for me.”
[These lines were spoken in many gatherings by Martin Niemöller (1892-1984), an outspoken public critic of Adolf Hitler. Niemöller spent seven years of Nazi rule in concentration camps.]

DANGER TO INDIAN DEMOCRACY. HOW?

Our right to vote (in municipal elections, panchayat elections, and elections of MLAs and MPs) is currently defined by the barest minimum requirement i.e. being adult citizens (or members of societies) of voting age. But the guidelines for curtailing these are being formulated under state laws and, most importantly, rules and guidelines that can be passed by various government departments without being passed by the state legislature. These rules and laws can be easily restructured to violate constitutional principles. For example, they can make rules that unless you meet your municipal corporator or MLA once in five years, you will not be allowed to vote during elections.

If we remain silent while this discriminatory principle is tested in co-operative societies, then the same principle can be applied to voting in the other elections also.

OUR REMEDIES:

a) Approaching the government and the MLAs to reconsider. So far, the ordinance amending the MCS Act has not been ratified by the state legislature. Before it is ratified, we must seek to have some crucial changes made.

b) Filing a Writ Petition before High Court to have the relevant provisions struck down as “ultra vires”. We will have to file a writ in Bombay High Court for having the relevant sections of the MCS Act 1960 (and parts of the Model Bye-laws) struck down as being ultra vires of the Constitution, and violative of Fundamental Rights, particularly Article 14 (“Equality before law and equal protection of laws”).

Being a citizen of India is quite similar to being member of a co-operative housing society. Both are by default; we generally don’t choose to be a member of a housing society; we are mostly compelled to become a member of that society when we buy a flat in a particular building. Just as, we don’t actively choose to become an Indian citizen or a citizen of Maharashtra; we become citizens by being born here, or by living here.

I urge the journalists, activists, constitutional experts, and the common man, to promptly raise their voices against this. I also request the opposition parties in Maharashtra, and other states too, to apply their minds.

And last but not least, I urge the stalwarts of the RTI Union in Mumbai (who are well-known advocates, chartered accountants, Legal counselors and CHS activists) not to remain silent spectators. Please mobilize public opinion!

Warm Regards,
Krishnaraj Rao
9821588114
building.rti.union@gmail.com

Posted in Activism, Bhakti Poetry, Blasphemy, Blogs, Governance & Administration, Our Future, Personal, Philosophy, Poetry, Prayers, RTI Act 2005, Right to Information, angst.

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By friendly ghost – March 6, 2013


12 Impacts of Amended Maharashtra Co-operatives Act on Housing Co-operatives

Dear friends,

On Feb 14th, 2013, Maharashtra Co-operative Societies Act 1960 was amended vide an ordinance. The impact of this will be felt immediately by Co-operative Housing Societies. This change was mandated by the 97th Constitutional Amendment, which was at various stages of process since 2006.

I gave a talk on this yesterday at DNA’s Real Estate Exhibition at Goregaon, where a two-day seminar was conducted by Maharashtra Societies Welfare Association (MSWA). Please see the PPT on highlights of MCS Act, along with Gazette of 97th Constitutional Amendment.

In the months to come, we will have to hold many meetings in the neighbourhoods of every city, to ensure that people understand what the amendments in MCS Act requires of them, what it mandates them to do, and how it empowers them.

Contrary to all the negative vibes that are being spread about 97th Amendment etc., I feel that a lot of good winds are blowing. However, we have the duty to spread our sail to receive the good winds!

Download selected sections of Amended MCS Act 1960: http://tinyurl.com/CHS-MCS-Act-1960

AMENDED MAHARASHTRA CO-OP. SOCIETIES ACT  - HIGHLIGHTS:

1. Empowers active members. Non-serious participants cannot participate in decision-making.

2. Power to expel dormant members or compel them to become active is given to co-operative societies.

3. No Administrators can be appointed for most co-op housing societies. Instead, active members will be “authorized officer” or “interim committee”.

4. Regular education & training to groom fresh leaders through Apex Co-operatives.

5. No more ignorant MC members. Managing Committee must attend regular training at least once in five years.

6. Stop washing dirty linen in co-op. court. Resolve internal differences  through “Grievance Redressal Committee”.

7. Co-op. court to encourage Win-Win compromise, and discourage litigation. This will reduce clutter of neighbour-to-neighbour conflicts, and let co-op court focus on important cases.

8. Mandate and power to get professionals’ help for CHS management. Adopt modern methods of management, record keeping etc. and stop being frogs in the well!

9. Strengthen Audit function. Duty of auditors, Registrar etc. to pinpoint responsibility for fraud and register FIR. Also, mandate for auditor to present audit findings including irregularities in every AGM. If they don’t, Auditors will be disqualified.

10. Realistic penalties for offences. Fine and prison sentences have been substantially increased.

11. Disqualification of errant MC members is now very easy, and much more long-lasting. Disqualified MC members will be debarred for contesting for 5 years.

12. State Election Authority to monitor elections closely. No more bullying by a small clique retaining power by token elections by show of hands etc!

All this and much more is there to make co-operatives truly participative democracies… but we have to act, educate co-op. society members and let them know about their new rights!

Come, let us create a mass movement to educate and train co-op housing societies in Mumbai and MMR region to understand and utilize co-operative legal structure!

Warm Regards,
Krish
9821588114

PS: Each and every action of government, parliament and political establishment is NOT tainted by corrupt motives; even a defective clock shows the correct time twice a day! Please let us shed our habitual negativity and cynicism. We (civil society and activists) need not find fault with everything that the government does; otherwise, we will become paralyzed, and the only thing that we will be capable of doing is armchair criticism! In the end, governance is determined by our actions, and not only the actions of the government.

Posted in Activism, Governance & Administration, Our Future, RTI Act 2005, Right to Information.

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By friendly ghost – February 18, 2013