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Can associate member stand for election of managing committee?

Saturday, June 30, 2018
By Ramesh S. Prabhu

Q. What is the scope of audit in case of a Co-operative Housing Society?
As per section 81(2) of the MCS Act, 1960, following are the scope of the auditors:

The audit under sub-section (1) shall "be carried out as per Auditing Standards notified by the State Government from time to time and shall also"; include examination or verification of the following items, namely

(i)    Over dues of debts, if any;
(ii)    Cash balance and securities and a valuation of the assets and liabilities of the society
(iii)    Whether loan and advances and debts made by the society on the basis of security have been properly secured and the terms on which such loans and advances are made or debts are incurred are not pre-judicial to the interest of the society and its members.
(iv)    Whether transactions of the society which are presented merely by book entries are not prejudicial to the interest of the society.
(v)    Whether loans and advances made by the society have been shown as deposits;
(vi)    Whether personal expenses have been charged to revenue account
(vii)    Whether the society has incurred any expenditure in furtherance of its objects;
(viii)    Whether the society has properly utilised the financial assistance granted by government or Government undertakings or financial institutions, for the purpose for which such assistance was granted;
(viii)    Whether the society is properly carrying out its objects and obligations towards members

Q. Can an associate member of a co-operative housing society, whose name is second in the share certificate, stand for the election of the managing committee. If so, are there any formalities to be done?
An associate member is a person whose name stands second or third and so on in the share certificate.  As per the New Model Bye-laws of 2014, a person whose is the co-owner or joint owner of the flat only can be admitted as the associate member.

Entries of the associate member in the share certificate, in the statutory records like I form register, J form register, share register, etc are the conclusive evidence of having been admitted as the associate member. Therefore, the Maharashtra State Co-operative Election Authority has issued a clarification that, if any person’s name is incorporated in the share certificate as associate member, such an associate member will be entitled to vote and contest in the election to the Managing Committee. The returning officer is not supposed to travel beyond the voter list provided by the society and is approved by the registrar.   

The societies, after adopting Bye-laws of 2014, need to advice the associate member whose name stands second or third without having any rights in the property to acquire such rights as contemplated under section 26 of the amended Maharashtra Co-operative Societies Act, 1960 within a prescribed period. If such right, title and interest in the property is not acquired within the specified time, the society may by passing an appropriate resolution remove such associate member’s name from the share certificate and other records.

Till names of such associate members are removed from the share certificate and other statutory records by adopting the necessary formalities and giving a proper opportunities, such associate members are entitled to vote and contest the election. In order to contest the election, the associate member needs to submit form No. 10A (No objection certificate from the first member) as provided in the Bye-laws to contest the election to the managing committee. If such an associate member gets elected, he or she may become the office bearer. 

Q.Will resale of investor flats through unregistered broker in Real Estate (Regulation and Development) Act, 2016 (RERA) registered project or unregistered project be permissible without any consequences under RERA?
The brokers need not be registered for resale flats. In the case of investor flats, which are already registered in the name of investor, they become resale flats. Here promoter is not involved in the resale. In other words resale and resale brokers are not covered under RERA. In case investor had not registered the agreement in his name and through builder, it is sold as first sale. In such situation brokers need to be registered with RERA and be listed with particular project as broker.

(Ramesh S. Prabhu is Chairman,  Maharashtra Societies Welfare Association)

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