Passing New Bye-laws in a Coop Society

Byes laws, Rules and Regulations – When, where, how applicable

cooplogo1Managing Committee’s of many cooperative societies make their own laws and bye-laws and implement it. For the record and information, let us once and for all state that this is highly illegal – and any adverse consequences to formulation of such laws, the Managing Committee members can be and should be collectily and individually penalized.

For one, the courts right from cooperative to Supreme Court have clearly stated that no bye-laws for a cooperative society can be passed whether in AGM , SGM or anywhere, which are contrary to the Constitution of the country and go against the Cooperative Society Act.

It is again a big myth many Managing Committee’s perpetutate, that `We are still following old bye-laws and have not yet adopted New laws’. If a statue has been approved by the legislator and gazetted.. it is automatically applicable to all the Registered Cooperative societies. When the Parliament passes a lwa, does each and every citizen have to approve it?

Even the bye-laws, which are specially proposed and enacted by certain cooperative societies (keeping within the frame work of the Cooperative Act) have to follow the following procedure, before they can be implemented.

Passs the law/amendment in AGM/ SGM with proper voting – not show of hands.

Record How many Ayes and how many Nyes

Pass it as a resolution and send it to the Deputy Registrar along with the minutes of the meeting.

Give it a Bye Law Nos and sub-section No and deliver to the deputy registarar with a covering letter declaring that the enclosed amendment/ bye-law has been approved by the majority member in the AGM/SGM taken place on such and such date.

Take a special received stamp from the Deputy Registrar’s Office.

Normally, the Deputy Registrar should reply to you within 90 days. Which in most of the cases does not happen. He does not even bother to acknowledge it. After passing of 90 days, the managing committee should pass a resolution since there has been no response from the deputy registrar in the statutory period, the said amendment/buy-law be adopted and incorporated.

The document on which the Registrar’s office has put a received stamp, be pasted into the Bye-laws of the society and the a copy of the new amendment/bye law be circulated to the members informing them that it has been incorporated and adopted now… and inform the members the date from which it will be applicable.

No amendments/bye-laws can be with retrospective effect.

Unless the above procedure is foolowed, no amendment/bye law, whether approved by the AGM or not, is applicable.

Here are some court decisions which have been delivered by various courts over the years :

Bye?Laws

n      A bye?law of the society has no force of statute until it is registered. But such registration cannot be validated if it is invalid law. Thus Bye?law must bee concurrent to the Co?operative Societies Act and Rules it should not be contrary to the Act and Rules. (Omprakash V.G.V. Koimtur, 1966 Mah.LJ.514: 68 Bom.LR?176: AIR 1967 Bom.7).

n      Validity of Registered Bye?laws?Bye?laws of a society should not be contrary to the Act and Rules. If the Bye?laws are registered then it can take effect, unless bye?laws are contrary to the law then registration cannot validate the bye?laws. (Omprakash Gowardhandas Singhania vs G.V.Koimattur, 1966 Mah.LJ. 514: AIR 1967 Bom.7).

n      Bye?law of the society laid down that if the Government wanted to make any change in Board of Directors nominated or appointed, changes shall be effected after consulting Indian Dairy Corporation. Consultation as to change in Board of Directors must be prior as it is a condition precedent. The requirement of prior consultation is mandatory and not directory. (Eknath Vishnu vs State, 1985 Mah.LJ.728).

n      The General Body of the society passed a resolution which wanted to amend the bye?law of the society which if wanted to reduce period of three years of tenure of Board of Directors to one year. The Registrar to whom resolution of general body was sent returned the proposed amendment to the bye?laws as the same not in tune with model bye?laws. The Chairman suo motu re?submitted amended bye?laws. The bye?law in such a situation cannot be said to have been amended. It was further observed that merely because amended bye?laws were placed in the subsequent meeting of the general body for information is not compliance with Rule 12 of the Maharashtra Co? operative Societies Rules. (Eknath Vishnoo vs State of Maharashtra, 1985 Mah.LJ.727).

n      It was held that no amendment of bye?laws of a society shall be valid until registered “under this Act”. The words “under this Act ” leave no doubt that an amendment, whether at the instance of the Registrar or the society, would become valid and come into force only on the date of its registration. There is nothing in section 14 to indicate that an amendment proposed by the Registrar would become or effective as soon as it was accepted by the society at its annual general meeting and that its registration was not necessary.  (Devgad Taluka Sahakari Kharedi Vikri Sangh Ltd. and 9 others vs Krishnaji Govind Bapat, 1967.CTD?374)

n      Framing of the rules is within the power of the Managing Committee to do and section 13 of the Maharashtra Co?operative Societies Act, 1960 imposes the condition of obtaining sanction only in respect of bye?laws and not the rules. Therefore, section 13 has no application regarding rules (Guatam Co?operative Housing Society Ltd. vs Kabul Kavdu Makhate and another, 1965.CTD?172).

n      The term `regulate’ in this section expresses that there is a right conferred on the individual member but the mode of exercise of that right can be regulated by the rules and bye?laws. The power to regulate does not include power to provide total prohibition. (All India Handloom Fabrics Marketing Co?operative Housing Society Ltd. vs Pritam Singh, 1985 CTJ. 33).

n      Jurisdiction of High court under section 46?A finding as to whether circumstances justify the exercise of a discretion or not. Unless clearly perverse and patently unreasonable is, after all a finding of fact only which cannot be interfeared with under Art.227 of the Constitution. (Ganpat Ladha vs Shashikant Vishnu Shinde, AIR?1978 SC955).

n      When a charge is created in the manner prescribed by this section and rule 4B, it becomes enforceable without being required under the Indian Registration Act, 1980. (Sharado vs AtaniMunicipality, 44 Bom.LR? 849, 853).

n      Restrictions imposed by section and section 48A of the Maharashtra Co?operative Societies Act upon the commission agents are reasonable and are in the interest of general public and are wholly saves by Article 19(6) of the Constitution. (Vyapari Association vsState of Maharashtra, (1985) 2 Bom.CR?603: AIR?1986 Bom.302 (D?B): 1986 CTJ. 254).

n      It was held that Bye?laws made contrary to the statutory rules has no effect and the rules will prevail. (In M.G.Somwanshi and & others vs Kasim Saheb Anwarsaheb Gusijerga and anothers, (1966.CTD?233), )

n      Effect of the Bye?laws?The bye?laws of the Society constitute a contract between a member and the Society and unless it is prohibited expressly by any enactment or rules or is contrary to public policy, the bye?laws must govern the members as well as the Society. The bye?laws are registered under the Maharashtra Societies Act, 1960. The bye?laws are meant for internal management of the society. (YD Bole and another vs Shivaji Mahadev Nagvekar, 1964.CTD?122).

n      The term `society’ and `Committee’ go together. The society cannot work without a Committee, and the Committee works or acts only for the society. Management of every society vests in a committee under section 73(1) of the Act. The power of Management of the society are vested in a body of persons, the society cannot run unless the body is vested with powers, the body is called the committee. (Wasudeo Pandurang Mokhare vs Registrar, Co? operative Society, 1989 CTJ. 743 (D?B).

n      The bye?laws are registered under the Maharashtra Societies Act, 1960. The bye?laws are meant for internal management of the society. If the bye?laws are inconsistent with the provisions of the Act or Rules made under the Act they will be of no effect.  (Shantilal vs Vijay Pawar, 88 Bom.LR?535).

n      Bye?laws Interpretation of?Clause 25 (viii) of the Bye?laws of the Amravati District Central Co?operative Banks provided for disqualification of servant who operated within the area of Bank for election on Board of Directors. The Court held that Employees of the Bank itself was not disqualified. (Purshottam vs Gopalrao, 1970 Mah.LJ.895).

n      Bye?laws as such does not have force of statute but they may be binding between the persons affected by them. (Co?operative Credit Bank vs Industrial Tribunal, Hyderabad, AIR?1970 SC 24).

n      Compliance of bye?laws?Where the bye?laws which are binding on the Society lay down procedure it is not open to a society or its office bearers to commit a branch of it on the ground that they were following a certain practice in the previous year. If the Society does not want the procedure prescribed the bye?laws, the obvious course is not to ignore it altogether but to take steps to amend it after passing and obtaining sanction of the Registrar. (The Konkan Co?operative Housing Society Ltd. Bombay and Ors. vs Subarao Venkatesh Bhujle and Ors. 1964. TD?Note No. 3).

n      Unless the bye?laws which cast a duty also provide for a penalty for omission to perform the duty, honorary office bearers are not liable for the loss sustained by the Society by reason of the omission on the part of the office bearers to perform certain functions. (Navjivan Vividh Karyakari Sahakari Vikas Seva Society Ltd. vs Malhar Satyappa).

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10 comments on “Passing New Bye-laws in a Coop Society
  1. I live in a society with 17 flats (Members) (One flat on ground floor -320 sq ft, two flats on ground floor 450 sq ft, 6 flats of 600 sq ft, 8 flats of 560 sq ft). I bought a flat six years ago in the society. In this period the building has done major repairs twice but both times, they have charged repairs contribution equally in all flats. When I complained about this to insist that they charge according to per sq ft, the officebearers maintain that this is the way they have always charged and that they need not adhere to model byelaws if majority agrees with it. The thing is, there are no byelaws of the society currently. The society has no paperwork from the past. The officebearers (and many residents) have been reluctant to discuss this issue in the first place and have given me no letter in writing that takes cognisance of my complaint. In the last meeting, where I took articles that proved that model byelaws say that major repairs should be charged according to carpet area, they have said that they will take legal opinion on this and inquire how they can change the byelaws and yet still not given me written answer. I had some questions:
    1. What is the process of changing byelaws in this case? I have read that it needs to get registered by the Dy Registrar. What kind of majority voting does it need? Can a few members of the society generally charge whatever they want? Because in the case of the flats on groundfloor the difference between repairs charges is significant.
    2. Even in case they change the byelaws, doesn’t the old repairs come under jursidiction of model byelaws (because the society doesn’t have any byelaws of its own for 40 years and we follow the model byelaws in everything else)? Won’t this mean that old decisions will still be governed by model byelaws?
    3. If this amendment is passed, do I have any legal recourse to fight this rule? What is the process?

    Thanks and regards
    JS

    • KIND ATTN : JS
      *****************

      The bye-laws as prescribed by the Cooperative Act are automatically in force. It is just a formality for the society to individually pass it.

      To complete that formality, call an AGM and present the current Model Bye laws for passing. Send a copy of the same to the deputy registrar. Have it stamped and keep that in your records. That is your official bye laws now.

      The year concerned, the bye laws in force at that time will be applicable to your society also. You will have to pay your share of the maintenance and other repairs as applicable. It will be no use approaching any authorities – if the society is billing according to applicable bye laws, you will have to pay. And later you pay – more interest will be charged. And for your information – the interest amount cannot be reversed or cancelled under any circumstances.

      Further information, you may please refer :
      COOPERATIVE SOCIETY BYE LAWS MADE EASY
      by HK Verma
      from
      AMAZON.COM
      It costs less than Rs 100 and will answer all your querries and guide you how to go about. It will be readable on your mobile, PC, Laptop or even a tablet. It can be a permanent guide to your cooperative society problems

  2. Can the Society charge to the Member for the illegal work carried out. For example the Society has constructed a shed on the terrace of the society building without getting the Revised Plan approved from the Competent authority. The Resolution for carrying out illegal work itself is void. In such cases can the society lawfully file recovery proceedings u/s. 101 for illegal work carried out by the society?

    • KIND ATTN: SHRIDHAR TAWDE
      *************************

      If the society has patently carried out ilegalwork/construction without any permissions – they cannot bill it to the members. In fact such work falls within the purview of criminal activity by the society and the whole Managing Committee can be dismissed and penalised under section 146 of the MCA Act.

      If the work is illegal and it cannot charge the members it cannot serve 101. Moreover 101 can be served in case of regular billing and regular maintenance work approved as monthly billing by AGM. Any extra charges…have to billed separately and do not fall under the purview of defaulter hence out of 101.

      Further information, you may please refer :
      COOPERATIVE SOCIETY BYE LAWS MADE EASY
      by HK Verma
      from
      AMAZON.COM
      It costs less than Rs 100 and will answer all your querries and guide you how to go about. It will be readable on your mobile, PC, Laptop or even a tablet. It can be a permanent guide to your cooperative society problems

  3. Hi,I need clarity on the a couple of rules that our society has created.
    1) Restricting the house shifting process after 8 PM.
    2)Charging Rs.2000 towards shifting charges to the tenants.

    Is is legal and if yes basis which bye-law can the society create rules?

    • KIND ATTN : KIRAN SALUNKE
      =========================

      Yes the society is within its rights to fix a timing for shifting the houses or heavy equipment. But that is usually upto 9.30 or 10… 8 is too early. You Society should reconsider its decision and allow the luggage and furniture to be shifted upto 10 pm. If the society does not agree, you can take special permission from the nearest police station to do it. The police permission will be for one time and not for repeated use.

      No the society cannot charge any shifting charges. It is not permissible… and is a legal and criminal offence under the Cooperative Society Act as well as Indian penal Code, where it comes under extortion and black-mail. You need not pay those charges. If the society has raised any such a bill, you can submit a copy of the same to the police station stating that the society is extorting money from you.

      Further information, you may please refer :
      COOPERATIVE SOCIETY BYE LAWS MADE EASY
      by HK Verma
      from
      AMAZON.COM
      It costs less than Rs 100 and will answer all your querries and guide you how to go about. It will be readable on your mobile, PC, Laptop or even a tablet. It can be a permanent guide to your cooperative society problems

  4. I want to sale my flat to Jain Trust for staying their sadhu and sadhviji but after my application to society they pass the resolution that I can’t sale my flat to any trust

    • KIND ATTN: VIPUL
      ==================

      The society cannot refuse the sale of the flat to a trust. Trust has every right to buy a flat.

      However, the society can object to both sexes, not related to each other occupying the same premises. The flat can be occupied by the owner and/or his family members (as described in the Maharashtra coop Societies Act), or if it belongs to a company, trust or it has been given on Leave and license – same occupation principles apply…

      If only Sadhus or only Sadhvis are to occupy, I am sure the society would have no objection. This has nothing to do with any religion or culture – that is the cooperative law and there is nothing you can do about it.
      Further information, you may please refer :
      COOPERATIVE SOCIETY BYE LAWS MADE EASY
      by HK Verma
      from
      AMAZON.COM
      It costs less than Rs 100 and will answer all your querries and guide you how to go about. It will be readable on your mobile, PC, Laptop or even a tablet. It can be a permanent guide to your cooperative society problems

  5. While dojng repair in flat i removed window wall (4 x 3 sf) and merged with flat. Fixed sliding window attached to box grill. Society is charging Rs 5000 monthly fine in maint bills for 12 mths. What I do to remove this fine and action should I take against soc

    • MR ROBERT
      ============

      First of all you have no right to make any changes to the exiting structure without the society’s expilit written permission. Merging with flats with opening new windows you have to to take the permission from the BMC by submitting a revised plan for the building – as to where the old window stood and where the new window exists.
      Mind you it is not YOUR flat – The society is the OWNER of the flat and has given you the flat to live in.
      AS to charging a regular penalty – the society cannot do it… object to it in writing. Maximum they can do is impose a one time fine… and subsequently if there is any change in property tax due to your chages, you will have to bear the same and any penalities/fine levied by the corporation will alo have to be borne by you.
      Also please note : The society and/or the BMC has every right to demolish the changes to the structure you have made.
      Further information, you may please refer to the Kidle book :
      COOPERATIVE SOCIETY BYE LAWS MADE EASY
      by HK Verma
      from
      AMAZON.COM
      It costs less than Rs 100 and will answer all your querries and guide you how to go about. It will be readable on your mobile, PC, Laptop or even a tablet. It can be a permanent guide to your cooperative society problems

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