Maha – CHS poised to by-passing the Real Estate Market – 4

 Post-Redevelopment scenario should be visualized as the cooperative housing societies operating in true sense on Seven Cooperative Principles[1]. With the kind of cooperators’ grievances pouring in, the Maha-CHS as an institution appears to have quite a very long way to catch up with the cooperative principles. Looking to the support being assured by the [2]State Government [3] to Maha-CH Societies, no time should be lost in gearing society managements to the challenge. Under the present Scenario of buying a flat in a newly developed project by a builder a flat purchaser gets keys of the flat with unknown neighbors and unheard of, unseen bye-laws blindly agreed to be bound by it including any future changes made by the Registrar[4]. It is also widespread experience that in all most all cases the flat buyers are left in limbo over matters of conveyance of title deeds. Deliberate failure is aimed at pocketing future gains of enhanced FSI. These gains belong to housing society[5].  In this background, let’s see how far the cooperative principles can help prepare housing societies to be ready to launch the self-redevelopment project, when it comes to launching one.

Cooperatives around the world generally operate according to the same core principles and values, adopted by the International Co-operative Alliance in 1995. In India NATIONAL POLICY on COOPERATIVES 2002 and the Multi-State Cooperative Societies Act, 2002 both have adopted the following text of the cooperative principles for cooperative societies in India. Article 243ZI inserted vide 97th Constitutional Amendment in new Part IXB of the Constitution of India has succinctly put these principles in simple words: the principles of voluntary formation, democratic member-control, member-economic participation and autonomous functioning. As most of us know for carrying out the 97th Constitutional Amendment mandate of aligning the State Law on cooperatives the Maharashtra Cooperative Societies (Amendment) Act 2013 was enacted which came in to force on 14 2 2013. The Clause (27) of Section 2 of the M C S Act 1960  gives a new definition of the society namely:   “society” means 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 democraticallycontrolled enterprise and adhering to the co-operative principles and values. The cooperative principles are obviously those recognized by the Government of India 1. Adhering to the cooperative principles is now made a precondition to the continued existence of a cooperative society. It appears a society resorting to the deliberate contravention of these principles could be proposed by the Registrar to the competent Court for deregistration. Seven Principles are:

1st Principle : Voluntary and Open Membership

Co-operatives are voluntary organizations, open to all persons able to use their service and willing to accept the responsibilities of membership, without gender, social, racial, political or religious discrimination.

2nd Principle : Democratic Member Control

Co-operatives are democratic organizations controlled by their members, who actively participate in setting their policies and making decisions. Men and women serving as elected representatives are accountable to the membership. In primary co-operatives members have equal voting rights (one member, one vote) and co-operatives at other levels are also organized in a democratic manner.

3rd Principle : Member Economic Participation

Members contribute equitably to, and democratically control, the capital of their co­operative. At least part of that capital is usually the common property of the co-operative. Members usually receive limited compensation, if any, on capital subscribed as a condition of membership. Members allocate surpluses for any or all of the following purposes : developing their cooperative, possibly by setting up reserves, part of which at least would be indivisible; benefiting members in proportion to their transactions with the co­operative; and supporting other activities approved by the membership.

4th Principle : Autonomy and Independence

Co-operatives are autonomous, self-help organisations controlled by their members. If they enter into agreements with other organisations, including governments, or raise capital from external sources, they do so on terms that ensure democratic control by their members and maintain their co-operative autonomy.

5th Principle : Education, Training and Information

Co-operative provide education and training for their members, elected representatives, managers, and employees so they can contribute effectively to the development of their co-operatives. They inform the general public – particularly young people and opinion leaders – about the nature and benefits of co-operation.

6th Principle: Co-operation among Co-operatives.

Co-operatives serve their members most effectively and strengthen the co-operative movement by working together through local, national, regional and international structures.

7th Principle : Concern for Community

Co-operatives work for the sustainable development of their communities through policies approved by their members.

A commonly understood and accepted set of principles are intended to help the membership at large, tune the conduct of individual members in harmony with those of all others. It helps narrows down the internal conflicts to a significant extent. It will save the society from avoidable litigation costs and prevent the social harmony getting vitiated.

At a later date we will try to understand how best housing societies can live up to these principles especially in the context of a potential of Self-Redevelopment project.

[1]  Para 4.2 Cooperative Principles and Schedule 1 to the Multi-State Cooperative Societies Act, 2002

[2] MUMBAI 2017 2 13 Maharashtra plans dedicated regulator for co-operative housing societies “In a significant move that will ease handling of housing society affairs, the state government has proposed setting up a separate regulatory authority to oversee them and resolve grievances by drafting a separate chapter dedicated to housing in the Cooperatives Act.”

[3]  (TOI 9 Jan 2018).“The CM said the state will appoint Mhada as planning agency. He said some developers had reduced Mumbaikars to being ‘dhobi ka kutta, na ghar ka na ghat ka,’ and his government was looking to change this.” Fadnavis said the government will make matters easy for societies by bringing all authorities under a single-window system. “All permissions will be brought under one roof to ensure people do not have to run from one government office to another,” he said at an event organized by Mumbai Bank.

[4] Every Model requires this undertaking which is void to start with.

[5] Bombay High Court – [Plaintiff] Ratna Rupal Co-Operative Housing … vs Rupal Builders & Ors on 27 June, 2011 Para 10.”The Plaintiff alone had right, title and interest on the entire plot of land. Nonperformance of the statutory duty and obligation would not alter the legal position. The Conveyance had to be executed within the specified period. The conveyance was not executed for a number of years. The Plaintiff must be taken to have had full title in the entire plot of land on which their building came to be  constructed.”


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