New State Co-op E C confuses further!

By I C Naik

Shri Madhukar Chaudhary the first State Cooperative Election Commissioner after taking charge of SCEA (State Cooperative Election Authority) on 29th November 2014 reportedly issued a circular clarifying several doubts of housing societies going to election including on the following four important matters.

Reportedly around 36,000 of the total 70,000 societies in the Mumbai region are due for election following the expiry of their committees over the past two years.

1.Committee Election in all cooperative housing societies will be by a secret ballot unless the nominations do not exceed the strength of the outgoing Committee.

2.In case a candidate’s nomination is rejected, he will be given a month’s time  to file an appeal against the move with the registrar.

3.An associate member can participate in an election if his name appears on the owner’s share certificate.

4.Names of defaulters who have not paid maintenance for months will be acut out from voters’ list.

LEGISLATIVE BACKGROUND

1.State Level Supervision to ensure fair polls in cooperative societies is mandated vide the Constitution ( 97th Amendment ) Act 2011 (came in force 13 2 2012) (For States effective from 14 2 2013) by inserting Article 243ZK(2) in a new Part IXB: the Cooperative Societies. Quote The superintendence, direction and control of the preparation of electoral rolls for, and the conduct of, all elections to a co-operative society shall vest in such an authority or body,  as may be provided by the Legislature of a State, by law: Provided that the Legislature of a State may, by law, provide for the procedure and guidelines for the conduct of such elections UNQUOTE

2.The State Legislature enacted the Maharashtra Cooperative Societies (Amendment) Act 2013 and substantially modified the M C S Act 1960 which came in to effect on 15 2 2013. Legislature also enacted the Maharashtra Cooperative Societies (Second Amendment) Act 2013 published on 20-12-2013.

3.Legislative was was followed by executive action of publication of two sets of Maharashtra Cooperative Rules viz the Maharashtra Co-operative Societies (1st Amendment) Rules, 2014 (Finalized on 30-08-2014) and the Maharashtra Co-operative Societies Election to Committee Rules, 2014 (Finalized 11-09-2014).

4.And now a bureaucratic step by the Chief Commissioner of SCEA  of issuing a circular on 29th November 2014 removing the reported confusions about cooperative elections since new Government announced its resolve to complete elections by 31 12 2014.

5.The tarrying hurry in completing election process can be explained as under.

i.Sub-Section 15 of Newly inserted Section 73CB by 1st Amendment (effective 15-02-2013) provided QUOTE:  Notwithstanding anything contained in this Act, the rules or the by-laws of any co-operative society, the election to the committee and consequent election of the office-bearers which is due on the date of commencement of the Maharashtra Co-operative Societies (Amendment) Mah. Act, 2013, or may become due after such date, until 31st March 2013 shall be held before the 31st December 2013.”UNQUOTE

ii.Parliamentary Elections and State Assembly Elections took toll of cooperative society elections and Legislature enacted second Amendment to the M C S Act 1960 on December 20 2013 extending the Dec 2013 deadline but one year to 31 December 2014.

4 Myths of Clarifications by the SCEC:

1.SECRET BALLOT: The new Election Rules (Rule No 76) provides for less expensive way of holding election of the Committees in smaller housing societies having less than 200 members by a voice vote or show of hands in the general body meeting presided over by officer appointed by SCEA. These smaller societies do have an option to pass a resolution in the general body meeting asking SCEA to hold elections as per the procedure applicable to larger housing societies (i.e. per Rule 75). This option is available to the Societies as an option (Proviso to Sub Rule 2 of Rule 76)  and it is not within the ambit of authority of the SCEC to force those smaller housing societies to go for ballot.

2.The Nominations: Rejection is appealable under Sub-Rule (4)(a) of Rule 75 (in case of larger housing societies exceeding 200 members) QUOTE:  “If the nomination is rejected by the Returning Officer, the candidate may prefer an appeal to Registrar within a period of three days from the date of rejection of nomination. Registrar shall dispose of such appeal within ten days of the date of receipt of such appeal. UNQUOTE

a.If a smaller housing society does not opt for election as per Rule 75 (that is by Secret Ballot) and decides to go by Rule 76 the nomination rejection is not appealable as the Rule 76 does not provide.

b.Election program to be notified for larger housing societies as per Rule 75(2) is divided in 14 milestones to be accomplished in 35 days commencing with  “Publication of the Election program and provisional voter list” on day 1/35. It appears that SCEC has assumed the power to overturn the Election Rules while announcing  a generous time of 30 days for appealing against the rejection of nomination in place of three days allowed under the Rules as aforesaid.

c.This generous time of 30 days to appeal against rejections is now available to those smaller societies also would mean adjournment of the general body meeting convened for election at 15 days’ notice.

d.The 30 days will mean, even if there is one rejection is appealed against in every housing society election in no society will be full and final before the statutory dead line of 31 12 2014 has expired.

3.Associate Member can participate in election should mean he is eligible to file nomination as clarified by SCEC.

a.Second Proviso to Rule 20(1) of Election Rules is relevant to this.  QUOTE: Provided further that, in case of associate members of co-operative housing society and cooperative premises society, the member whose name stands first in the share certificate shall be eligible to be nominated as candidate for the election. In absence of such person whose name stands second as associate member and in the absence of both, the person whose name stands next and likewise in the absence of the preceding persons the person whose name is next on the share certificate, who is not a minor shall be eligible to be nominated as candidate for the election. UNQUOTE

b.This text is verbatim picked up from Section 27(2) providing for the voting rights in the general body meeting. The draw back in this Rule is bypassing provision of Section 24(2) which provides that QUOTE: “an associate member, may, subject to the provisions of sub-section (8) of section 27, have such privileges and rights and be subject to such liabilities of a member, as may be specified in the by-laws of the society.”

c.It is very clear that as per the Act the Associate member can contest election only if the Society has conferred such right under its bye laws. Every housing society has Bye-Laws registered based on either of the Model Bye-Laws approved in 1984 or 2001 or 2009, All these Models have a Bye-law (25) restricting rights of Associates in these words: QUOTE: No associate member shall have any rights or privileges of a member except as provided under Section 27(2) of the Act.i.e. where a share of a society is held jointly by more than one person the person whose name stands first in the share certificate, if present, shall have the right to vote. But in his absence the person whose name stands second, and in the absence of both, the person whose name stands next, and likewise, in the absence of the preceding persons the person whose name is next on the share certificate, who is present and who is not a minor, shall have the right to vote. UNQUOTE

d.Rule 20(2) as well as the clarification by the SCEC both are inoperative for most housing societies.

4.Defaulters: Their names are to be removed from Provisional Voter’s list submitted by the managing committees in format

a.Administratively names of defaulters have to be furnished to SCEA along with the Provisional list of voters. Election Rules do not have this requirement communicated to housing societies.

b.Defaulter has to be precisely defined. Under Section 73 CA 3 months time is provided for member to clear outstanding dues so as to save him from a list of disqualifications prescribe for member to disallow joining the Committee. For a member to disqualify as a voter section 26 provides for an elaborate procedure. There is no mention of this in clarification by SCEC.

c.It appears nobody has drawn the attention of the SCEC to 6th proviso to clause (b) of Sub-Section 2 of Section 26 of the M C S Act 1960: QUOTE: Provided also that, in any election conducted immediately after the date of commencement of the Maharashtra Co-operative of Societies (Amendment) Act, 2013, all the existing members of the society shall be eligible for voting, unless otherwise ineligible to vote. UNQUOTE So how far the Commissioner can slash the voters list by removing defaulter without inviting the wrath of judiciary is left to be imagined. It is good if upon pressing a wrong panic button also defaulters’ community wakes up and clear the society dues.

In sum an already confused sector in which lacs of citizens have interest , gets an overdose of confusion and no sign of relief appears even after the change in the guards in State Administration, to let the societies run by members as voluntary  and democratically  controlled  autonomous enterprises the highly cherished goal of the Constitution ( 97th Amendment ) Act 2011.