By I C Naik
From Wikipedia, the free encyclopedia: A by-law (sometimes also spelled bylaw or bye-law) is a rule or law established by an organization or community to regulate itself, as allowed or provided for by some higher authority. The higher authority, generally a legislature or some other government body, establishes the degree of control that the by-laws may exercise.
Are bye-laws inescapable?
Yes, primarily because, the statute giving legitimacy to Cooperative Society namely the MCS Act 1960 [Section 8(1)] provides that “for the purposes of registration, an application shall be made to the Registrar in the prescribed form, and shall be accompanied by four copies of the proposed by-laws of the society”
The statute further lays down the fundamental of the proposed bye-laws namely: that they should satisfy the Registrar of Cooperatives that they are not contrary to the MCS Act 1960 or to the MCR 1961[Section 9(1)]. The MCR 1961 (Rule 8) lists out matters of governance of a Cooperative Society which the Registrar of Cooperatives is empowered to specify for inclusion in the proposed bye-laws.
How many cooperators are aware that registered bye-laws of their society are to be framed by themselves i.e. the promoters of the Society, to meet their own economic needs as a group of homogeneous and harmonious thinkers. Since a Cooperative Society is born of a statute enacted by legislators of the State, they have the responsibility to ensure that such creation regulates its affairs in accordance with generally acceptable and standardized principles. These principles are not self made ones. They are codified through Directive Principles of State Policy as enshrined in the nation’s supreme legal document the Constitution of India under Article 43B.This directive reads:
“43B. The State shall endeavor to promote voluntary formation, autonomous functioning, democratic control and professional management of Co-operatives”
This directive is also not an over- night idea coming out of hat. It’s a theme which earned wider recognition over the globe, and got matured over an age. The Supreme Court of India in its recent judgment showering all praise for the recent unanimous Parliamentary enactment namely the Constitution (97th Amendment ) Act 2011 at Para 8 of its order observed ….’it appears that the cooperatives in India did not have effective autonomy, democratic functioning and professional management. The National Policy on Cooperatives announced by the Department of Agriculture and Cooperation, Ministry of Agriculture, Government of India adopted in March, 2002, is wholly based on the definition, values and principles namely…“Co-operatives are based on the values of self-help, self-responsibility, democracy, equality, equity and solidarity. In the tradition of their founders, co-operative members believe in the ethical values of honesty, openness, social responsibility and caring for others.” The true representation of these values is in registered bye laws of every Society framed as guided by the MCS Act 1960 and the MCR 1961 under a global umbrella namely “Part 9XB Cooperative Societies” of the Constitution of India.
Concept of bye-laws is more than 100 years old. In 1913, the State of Maharashtra (former State of Bombay) set up a non-official body, the Bombay Co-operative Housing Association, which did a pioneering job in propagating co-operative housing. The association elaborated model by-laws which were used in the organization of several housing co-operatives.
Since the Cooperative Society in India was born during the later part of the colonial era’ predominantly as a Government initiative its growth has been Government centric rather than people-centric as its theory says so. As observed in Para 6.2.4 of the 9th Report of the 2nd Administrative Reforms Commission (August 2008) “ there has been a growing realization that undue interference from the State, lack of autonomy and widespread politicization has severely impaired the functioning of these institutions and there is need to introduce urgent reforms in the sector. During the last two decades, a number of Committees were appointed to go into various issues of Cooperatives. These Committees strongly advocated the need to replace the existing government dominated cooperative laws by a new people centric legislation.” Report of the Committee chaired by Choudhary Brahm Prakash [1918-1993] (which proposed a model law in 1990) later became the torch bearer of reforms that followed with the Constitution (97th Amendment ) Act 2011 . At Para 6.2.6 the ARC Report noted: “Government of India announced a National Policy on Co-operatives in 2002.The ultimate objective of the National Policy is to provide support for promotion and development of cooperatives as autonomous, independent and democratic organizations so that they can play their due role in the socio-economic development of the country, The Policy further aims at ….. strengthening of cooperative education, training and human resource development for professionalization of cooperative management.”
As against these policy I initiatives backed up by the Constitution (97th Amendment ) Act 2011, the functioning of the regime of the Commissioner for Co-operation and Registrar of Cooperative Societies does not seem to recognize them. The practice of issuing Model bye-laws is continuing with creating a confusion that they are mandatory and through Federation of housing societies indirect pressures are being created on Cooperative housing societies to replace their registered bye laws by the latest Model. Despite National Policy 2002 commitment to “ cooperative education, training and human resource development for professionalization of cooperative management” the MCR 1961 under new Rule 20B lays down a ridiculous requirement of training in sub-rule 2 and 3 as under, namely
“(2) As far as possible the period of education and training for members of committee shall be minimum three days in aggregate during their tenure.
(3) As far as possible all the members, may be covered in five consecutive years.”
The housing society law having reached the highest level of complexities has just started unfolding its true colors. Model bye-laws 2014 is the classic example of making the law so much complex like never before. Prospective cooperators have hardly got an opportunity to have an over view of functioning of Cooperative housing societies, the back bone being its bye-laws. The fact that the Model bye-laws are recommendatory in nature but the promoters are not advised to study them and modify them as suited to them before registration.
Instead of merely releasing to housing federation to print and supply to member societies for adoption I would if I were to undertake that task, address a letter as under.
MODEL BYE-LAWS 20xx
(TENANT PARTNERSHIP COOPERATIVE HOUSING SOCIETIES)
I am pleased to release the latest Model of Housing Society Bye-Laws- Model 20xx. In updating this Model several experts have contributed immensely. I am grateful to each one of them. I have no hesitation to strongly recommend to all flat purchasers’ housing societies that they switch over to this Model by carrying the amendment procedure at the earliest. Bye-Laws as we all know are defined as those which are registered and are in force and include registered amendments. Unless this Model is adopted and registered it does not apply to any society automatically.
As Bye-Laws are held by the Hon. Supreme Court to be the contracts inter-se the members, it is absolutely necessary that every member goes through this Model carefully and fully understand their rights, privileges ,duties and obligations. Chairmen/Secretaries of all housing societies are hereby urged to ensure that members do go through this Model before they vote in favour of adopting as their society’s new Bye-Laws.
Every effort has been made to see that this Model meets the requirements of every housing society. At the same it is open to housing societies which may need to make some modifications in some Bye-Laws as per their society’s specific needs. The members should debate every modification at length and incorporate the same only after getting convinced of the rationale thereof. As the Members’ democratic control is paramount for specific critical decisions of the general body, criterion for a Special majority of not less than 50% of the total membership of the society, which shall not be less than 2/3 majority of members present and voting is proposed to be made mandatory for taking certain critical decisions. This is also in line with one of the important imperative of the Constitution (97th Amendment ) Act 2011 as expressed in Article 243Z-O of the Constitution of India. The Registering Authorities are hereby directed to encourage housing societies to go for necessary changes which are not in conflict with any law. Under no situation societies shall be forced to register this Model as hereby released.