By I C Naik
Twin objectives of the provisions of the Maharashtra Cooperative Societies Act 1960 in short (MCS Act) as per the Statement appended to MAHA-C H S Ordinance October 2018 are: To regulate the management aspect of the co-operative societies and protect the interest of its members. Housing societies in Maharashtra are largest in number (nearly 50%) amongst all cooperative societies. All classes of societies are regulated by a common statute namely, the MCS Act 1960. It is widely accepted that there is a complete failure to achieve the aforesaid objectives of the MCS Act. The Governor of Maharashtra therefore promulgated an ordinance on 29th October amending MCS Act in such a manner that after that date, the MCS Act can be resorted to regulating the Housing societies exclusively.
- New sections 154B to 154B 31are inserted under a new chapter IIIB: COOPERATIVE HOUSING SOCIETIES
- Certain Sections are identified to apply to Housing societies mutatis mutandis [“by changing those things which need to be changed].” (S.154B1)
- Certain Sections are declared non-operative to housing societies. (S.154B2)
The regulatory framework of cooperative housing societies has however become quite cluttered. Main reason is the very same regime of Commissioner for Cooperation and Registrar of Cooperative Societies [in short CCRCS] continues to be in control of all the classes of societies including housing societies. There will continue same demands on CCRCS from other classes of societies, objects of which are very diverse. The MCS Act as amended aligning to the 97CAA has already confused the cadres of this regime so much that after more than 5 years also 97CAA has not shown its impacts on the functioning of cooperatives as contemplated under the Constitution of India. It is good that the tenure of this ordinance is short and soon a full-fledged legislative enactment will replace it.
At this juncture is it not a good idea for housing society activists to do some homework? Should they not strive for much cleaner and strait forward code of conduct thoroughly redesigned for housing management committees and the bureaucracy so that members’ rights are safeguarded without going through a protracted dispute settlement ordeal on all and sundry issues. After all sustained qualitative community life is the ultimate goal of housing societies, is it or is not? Can we not set up a simple regulatory mechanism to suit this umbrella objective? Do the housing societies not deserve lasting peace and sustaining development of healthy social environment?
In recent times housing societies have been passing through turbulent times isn’t it?; Chaotic environment due to contentious notion of Ghettoization of minorities, issues like whether self-sustaining housing societies “Private” or “Public”, is housing society obliged to provide personal information of members to any member of public, can Chairman /Secretary be removed for loss of confidence, should transfer fees be regulated by the Government in public interest, what and how a specific interest of public is concerned with housing societies, why the committee’s prior permission is not required for a member to sub-let his flat, should society recover extra money towards maintenance costs in respect of let out flat, should it be regulated by the State order or by member’s democratic decisions, can a person become member without purchasing a flat in his name or in joint name with other person, can such a member join management committee, should all leakages of water be handled at the society’s costs, is the Housing Society a service provider to its members, if yes who is liable to bear damages for deficiency in service, does the cooperative housing society provide taxable services liable to GST. Should there be so many questions despite the fact that cooperative Housing Society is a private entity like a joint stock company owned by several individual shareholders running as per democratic principles and values? Have we missed the track in the case of housing societies; Yes or No? Is there way to set it right? That exactly is a genesis of an option to October Ordinance.
Is the time not ripe that such questions are exhaustively analyzed prior to replacing the Ordinance? Why not think of a wholly new Cooperative Housing Societies Code after almost a century old legal system is being revamped? Do we need anything beyond a simple Code, not to mention the Act of legislature, just a code easily understood by the gullible flat owners and not misunderstood by people in CCRCS regime?
The October C H S ordinance has not touched upon the stressful participation of Government (Ministry of Agriculture and Cooperation) and of bureaucratic regime of CCRCS, which closely monitor functioning of cooperative housing societies despite the Government’s zero stake. They seem to conveniently forget that financially self-sustaining Cooperative Housing Societies are recognized private enterprises and have to be left to operate under member democratic control with full autonomy. The National Policy 2002 has clarified that “the regulatory role of the Government will be mainly limited to the conduct of timely elections, audit of the cooperative societies, and measures to safeguard the interest of the members and other stake holders in the cooperatives. There shall, however, be no interference in the management and working of the cooperatives. The Government recognizes the apolitical nature of cooperatives” 97CAA has miserably failed to translate the Policy imperatives in to ground level actions.
Housing societies are also ageing and very soon thousands of properties of housing societies registered in eighties and nineties will be staring at redevelopment en-mass. Fire-fighting systems in these properties will need technological up gradation. Notorious Real Estate markets have done enough damage to the aspiration of residents of Mumbai to have one’s own dwelling. Should such an eventuality be not factored in to the new Code? Should we not want suitable regulations for housing societies to build financial strength and administrative capabilities commensurate to the challenges of self-redevelopment? Most importantly special care be taken to focus on the objective of 97CAA namely: “The Parliament, with a view to enhance public faith in the co-operative institutions and to insulate them to avoidable political or bureaucratic interference brought in Constitutional (97th Amendment) Act, 2011,” Supreme Court in Thalappalam Ser. Coop. Bank Ltd.& … vs State Of Kerala & Ors. on 7 October, 2013 : CIVIL APPEAL NO. 9017 OF 2013.
Taking cognizance of constitutional mandates enshrined by the Parliament through 97CAA the MCS ACT 1960 has redefined the society as ” a co-operative society registered, or deemed to be registered, under this Act which is an autonomous association of persons, united voluntarily to meet their common needs and aspirations through a jointly owned and democratically controlled enterprise and adhering to the co-operative principles and values” Section 2(27). Going by Apex Curt directive of converting constitutional directions in to legal system what provisions of October Ordinance support Cooperative Housing Societies to fulfill the functioning criterion of housing societies?
Dwelling units managed by housing societies is a long term phenomenon and can become a very long term one with well-designed scheme of Self Redevelopment. Such a scheme built in to the regulatory regime can make housing societies a millennium phenomenon. One after another generations of families will get to own them, occupy them, maintain them and redevelop them and so on and on. This will continue like a birth and rebirth cycle in the life of human beings. For this an extremely robust system of fixation of goals and roles of Management Committees and general body of members of the society must form part of the regulatory mechanism. Such mechanism must be dynamic enough to accept changes needed from time to time to keep the goal and roles setting alive to changing demands of relevant time.
In Maharashtra State there are 4 Federations of Cooperative Housing societies. In fact there should be at least one in every district. This may justify initiatives from the District Administration in a welfare state like ours where the Government’s programs are sharply focued on development.
- Maharashtra Police Co-operative Housing Federation Ltd.
- The Thane District Co- Operative Housing Federation Limited
- The Mumbai District Co-Op Housing Federation Ltd.
- Vasai Taluka Co-operative Housing Federation
Incidentally October Ordinance is looking forward to a wider / higher participation of Housing Federations in the matters of Housing Societies. These federations are cooperative societies covered by new constitutional frame and should be deemed to have a right / obligation to participate in re-designing regulatory regime for housing societies most of which being their members. These federations may be inspired to collate views of their member societies organizing seminars. The Coordinating role could be assumed voluntarily by the senior members of the State Cooperative Election Authority as a neutral body between State Administration and Cooperative Societies regime in Pune. As a matter of fact there is a need to increase the number of federations as their role will demand qualitative improvisation as facilitators to translating new mandates in to their functioning. Federations will have to be actively imparting education and learning amongst primary members a huge challenge in itself.
A pretty long time has elapsed since 97CAA became operational. Not much progress has taken place in changing over to the new framework of functioning of cooperatives in accordance with cooperative principles and values which were imported in to 97CAA from National Policy on Cooperatives accepted in 2002. Intervention of bureaucracy just one important reform has been tossed in to the skies by “authorized persons “ the substitutes of banned specie the administrator staying back with impunity in Housing Society management well past the ceiling of tenure of 6 months.
The question to be seriously gone in to is this. Should the achieving of just two objectives namely; “regulate the management aspect of the co-operative housing societies and protect the interest of its members” need such a complex regulatory regime, led by October Ordinance? It is complex to an extent that only a few smart players will reap undue advantage thereof as most stake holders fail to grasp the complexities.
Questioning the relevance of the MCS Act 1960 to housing societies may sound over enthusiastic but may be not so when seen in the context of India enacting 97CAA under a national level marathon legislative process which started on 22 May, 2006 with the introduction of the Constitution (106th Amendment) Bill, 2006 in Lok Sabha and ending with enactment 97CAA assented to by the President on 12.01.2012. Should such an effort not deserve far more attention of India as a great democracy? Do not forget that 97AA process gave a constitutional status to Cooperative Societies founded as voluntary associations to run under member democratic control with autonomy.
Lastly, let us not wait for the Supreme Court to tell the authorities that fundamental right to form a cooperative society [Article 19(1)(c)] is not limited to registration thereof but it extends to running them as the members’ fundamental right which no public authority having any say in their internal matters much less the interference.