By I C Naik
Mumbai Mirror (April 14) carried a storey of an overdue outstanding maintenance demand of a whooping sum of Rs 3,60,000 from a member. This amount comprises reportedly a penalty of Rs 3,26,818 plus interest thereon at 21%. The story unfolds further: ”During an annual general body meeting held in May last year,(2018) members of the Nisarg Heaven Co-Operative Housing Society Limited in Mahavir Nagar, Kandivali West unanimously decided to levy the fine to curb the menace of stray dogs inside society premises.” According to some members these were technically not strays as they were born and brought up in the Society premises. The new Management Committee decided to overlook this fact it seems. We are not going in to this sensitive and controversial national issue of stray dogs. Our concern is disciplinary regime in Cooperative Housing Societies. Cooperative society is a voluntary association of persons and its internal management as well as members’ conduct are all regulated in terms of contractual arrangement inter se the members as documented in bye-laws which are registered under the MCS Act 1960. Registration of cooperative society is preconditioned by the registration of bye-laws approved by the promoters (future members) of the Society. Look at what the Hon. Supreme Court in Zoroastrian Co-Operative Housing Society Limited Rd-Sc 253 (15 April 2005) has said at para 15:
Normally the bye-laws of a society do not have the status of a statute and as held by this Court in Co-operative Central Credit Bank Ltd. vs. Industrial Tribunal, Hyderabad (AIR 1970 SC 245) bye-laws are only the rules which governs the internal management or administration of a society and they are of the nature of articles of association of a company incorporated under the Companies Act. They may be binding between the persons affected by them but they do not have the force of a statute.
The registered bye-laws have also been scrutinized by the Registrar to ensure that no provision in proposed by-laws is contrary to any provisions of the MCS Act 1960 or the MCR 1961 [Section 9 of the MCS Act 1960]. Rule 8 of the MCR 1961 contains the list of areas which the Registrar may require a proposed cooperative society to frame regulations in the proposed bye-laws. One sub-clause (t) reads : “the manner in which penalty should be levied on a member who is found to be guilty of breach of bye-laws; “ the Management Committee is bound to adhere to the provisions of the society’s registered bye-law concerning levy of penalties for any breach of the bye-laws. Primary implication of this bye-law is a penalty can be levied on a member for breach of bye-laws and not for any other miss-conduct. All Model bye-laws approved by the Registrar for adoption by housing societies since 1984 have a bye-law on penalties reading as under:
“The meeting of the general body of the society may prescribe penalties for different breaches of the bye-laws of the society. The Secretary of the society, under instructions from the Committee, shall bring to the notice of the member concerned, the breach/breaches of the bye-law/bye-laws committed by him. If the member persists on continuing the breach/breaches, the Committee shall give the notice to the member to show cause as to why the penalty should not be inflicted on him for breach/breaches of the bye-law/bye-laws. The general body meeting, after considering the say of the member and after giving him hearing, may levy penalty at the rate fixed by the meeting of the general body of the society. “
The bye-law in Model 2009 has a rider providing for a ceiling of Rs 1000 as maximum penalty. In Model 2014 the ceiling has been raised to Rs 5000 in a financial year.
Many cooperators erroneously believe that the new Model bye-laws are applicable to their society as soon as the Registrar has approved it. Adopting new model bye-laws is equated with the amendment to the registered bye-laws and there is a provision in every Model which reads as under:
“ No bye-law shall be made, altered or abrogated unless (i) a proposal to do so has been communicated to all Members 14 days before the Meeting of the General Body of the Society, at which it is proposed to be considered, and, (ii) the resolution is passed by not less than 2/3rd majority of the Members present and voting at the meeting of the General Body of the Society, and (iii) the making, alteration or abrogation is Approved and Registered by the Registering Authority.”
Reverting to the penalty regime as laid down in the registered bye-laws of a Housing Society it can be surmised that the underlying principle is natural justice. First and foremost the expected conduct of members is within the full knowledge of all the members. A large number of members of housing societies in Mumbai would strongly contest this observation and that is because they are unaware of the fact of every member having agreed to the following clause in their application to the membership of the Society.
“I have gone through the registered Bye-laws of the society and undertake to abide by the same with any modifications the Registering Authority may make in them.
The other principle is the consequential penal amount for the breach of a bye-law is specified in advance and is communicated to the members through circulation of draft minutes of a gm. Most important is an opportunity to justify so called breach if a member has an explanation. Yet another good thing is finally a penalty is slapped only if a member persists with the default.
What more fair treatment one wants from the society management?
Bye-law No 69 of Model 2014
All open /common area meant for use of all Members for eg. staircase, steps, landing areas, parking spaces, lift, corridor, and such other spaces, cannot be occupied by any Member for his own use. The use of such areas shall be restricted to the cause for which these are meant. Any Member found to be violating the above condition by encroachment shall have to vacate the encroachment and further he/she shall pay an amount equal to five times the monthly maintenance charges per month for the period for which he/she has encroached such spaces and further Members must not carry out any constructions, structural changes over and above the sanctioned plan without prior permission of the Society and Concerned Municipal Authorities / Competent Authorities.
Under what bye-law the Management Committee of the Nisarg Heaven C H S has levied penalty for feeding stray dog is not possible to say, but it seems to have a link with the above provision. Unless the registered bye laws are perused no one can say conclusively.