Subsidizing Housing Society Charges – Part 2

By IC Naik

Probably a fall out, (of my post on “Cooperative Coffee Shop on February 15, 2017) Chairman of one housing society (he may have thought my story was his story in fact) convened a Special General Body Meeting to revisit its billing format to take all decisions incidental thereto if necessary.

Calling the meeting to order the Chairman announced ;“It appears, we should revisit the new format of our monthly maintenance bill” “In any case “He continued, “the last Annual General Meeting had a few voices against the continuing Contribution to Major Repair Fund. In fact the managing committee has recently restructured the Major Repair Fund contribution taking the hint from these voices.

One member rose and started praising the Committee for granting huge subsidy. “Let the good things go on, nothing to discuss there” Several members joined him in support. One another member however, threw a challenge “if any body can prove that the subsidy was legal and maintenance bill was prepared correctly. In fact I challenge if any one has understood the flaws in the format of the bill itself.”

Uncomfortable long pause led the Chairman ask the Challenger if he could explain what was wrong. The Challenger retorted: “Yes, I will, but no member should keep quiet in case he/she disagreed with what I say. I want a dialouge. I have obseved over the years that the members do not give vent to their disagreement and most times agreeing, even if they did not understand the management proposal. Let there be an honest debate on the subsidy given by the Committee.” He went on ” Who approvand the subsidy and from where did the subsidy money come from? Which bye-law empowers the Committee to utilize the interest income to reduce the Society Charges apportioned as per bye-law No. 71(a)?

Again there was uncomfortable silence. The Chairman looked at the Treasurer. The Hon. Secretary immediately rose on his feet. “Look guys, all along we have been told by our predecessors that fixing rates of maintenance is an exclusive prerogative of the Committee. Frankly General Body Meeting has no business to meddle in to, except that in case of two funds (bye-law No. 13(a) and (b) members can revise upwards. So the rates were fixed by the managing committee recognising the interest income on society funds temporarily parked in banks. interest earnings belong to members any way.” His gesture indicated, the issue was over. Some members clapped to cheer up the Hon. Secretary.

One member agitatingly rose and asked does it mean the Committee has power to distribute interest income to lower the maintenance rate which would have been much higher? The Hon. Secretary nodded in confirmation saying “Yes as a general implied power of management, the Committee can use such income”

Another long pause.

The Chairman then asked the treasurer to read out the concerned bye-law. Treasuer read Clause (b) of bye-law No.71 “(b)The committee shall fix in respect of every flat the society charges on the basis laid down under the bye-laws-law No. 71(a).” Several members wanted Treasurer to read bye-law No. 71(a) which he did promptly. The Chairman asked the Treasurer if there was anything in bye-laws about apportionment of income of the society. Treasurer said no.

The Challenger rose on his feet: “ Chairman sir, it appears the captioned Article on has not been seen by any member including the committee members . It covers every thing we need to understand” I suggest with your kind permission, sir, we get sufficient number of xerox maded and get distributed now and then to discuss little larer. Why waste time when some authentic views are already there on net?

After an interval of an hour of distribution, the meeting resumed.

The Chairman announced, he has an announcement to make.

I have discussed the bill format with the office bearers, in the context of the implications of Section 64 ( Prohibition on distribution of funds except as Dividend), Sec 65(1)& (2) (mandatory transfer of 25% to Reserve Fund) and Bye Law No 148 ( Appropriation of profits) Rule 62 esp. form N as discussed in the post on Cooperative Coffee shop, I propose as under:

1. Subsidy of Rs 1259 and deficit of Rs 500 and Major Repair fund Rs 500 will be removed.

2. Monthly charges will work out to Rs 6279 under appropriate heads.

3. All the entries per existing bills will be reversed.

4. One composite bill for every flat will be prepared.

5. Balance payable by every member will be worked out and stated therein.

6. I will get this ratified in the next meeting of the Committee to be held soon.

Let me clarify there is no resolution to be passed by members as this is completely with in the duty of managing committee to fix the rates on the basis laid down in the bye-law No. 71(a). For Continuation of Major Fund General Body Meeting need to approve, but that we are discontinuing.

I thank you all for attending the meeting in large numbers and accept my sincere apology for the confusion in the monthly rates.

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