Query of Anil-Advocate

I am a practicing Advocate in Mumbai.My query relates to registered Co-operative Housing Society.

Facts:-

1. A CHS in Mumbai is registered on August, 2014 (i.e., after 2013 amended provisions came into force) with new model bye-laws of 2013.

2. It’s provisional committee was constituted on October,2014.

3. Maximum period of tenure of ONE year expires in October,2015.

4. Regular committee is not elected in or prior to October ,2015.

5. Assistant Registrar holing his office at Pune inclined to provide benefit and protection of provisions of Section 166(4) MCS Act,1960 as amended up to date to such office bearers of the Provisional Committee.

My Queries:-

1. Whether Section 164(4) as inserted by amended by 2013 can give protection to such provisional committee to continue its office even after October, 2015?

2. If election is not conducted prior to October,2015, can officer bearers of such provisional committee continue to function in their capacity of office bearers(i.e., Chairman, Secretary & Treasurer) even after end of October,2015 by resorting to protection U/s 164(4) of MCS Act,1960?

3. Whether such running of administration of provisional committee is invalid in the eye of law?

4. What steps a member of the society initiate against such persons?

5. Need your valuable guidelines.

I C Naik

I am not surprised that Advocate fraternities are also thrown in to the Confusion. The avowed objective of the Constitution (97^th Amendment) Act 2011 (97CAA) as describe in one line by the Hon. Supreme Court namely in Thalappalam Ser.Coop.Bank Ltd.& … vs State Of Kerala & Ors. on 7 October, 2013 : CIVIL APPEAL NO. 9017 OF 2013 is going to toss at the behest of the State Governments and most shocking is in the Home State of pioneer of 97CAA  Shri Sharad Pawar.

The case before us is: On June 24^th 2016 ( the Provisional Committee is in office despite its term has ended in October 2015) . You state that the Assistant Registrar at Pune is inclined to provide benefit and protection of provisions of Section 166(4) MCS Act,1960

Despite being in legal profession you are perplexed as to whether:

1.Section 166(4) can rescue such committee to continue beyond one year?

2.Can the office bearers of such committee continue to function?

3.Such running of administration by provisional committee is valid in  law?

4.What steps a member of the society to initiate against such persons?

Answer to q. 1 is No. Dy.Regisrtar has no power to apply it to Provisional Commitees. This provision is an illegal escape route to SCEA to cover delay in holding elections which constitution has mandated tto be conducted before the expiry of 5 year term of every committee, [Article 243ZK)

For handling this situation there is an express provision in Section 77A of the MCS Act 1960.   How this was not resorted to is not a surprise to me at all.

As per Sub-Section (1) Where the Registrar is satisfied that,—

(1-a) a provisional committee has failed to make necessary arrangements for holding election for the constitution of the first committee, before the expiry of its term as specified in sub-section (1A) of section 73;

the Registrar may, either suo-motu or on the application of any officer or member of the society by order appoint—

(i)any member or members of the society to be the member or members of the committee to fill the vacancies;

(ii) a committee, consisting of not more than three members of the society, or  one or more authorised officers”, who need not be the members of the society, to manage the affairs of the society till a new committee enters upon office:

Provided that, before making such order, the Registrar shall publish a notice on the notice board at the head office of the society, inviting objections and suggestions with respect to the proposed order within a period specified in the notice and consider all objections and suggestions received by him within that period :

Provided further that, it shall not be necessary to publish such notice in any case where registrar is satisfied that immediate action is required to be taken or that it is not reasonably practical to publish such notice. lso that, if no member or

“Provided also that, if no member or members of the society are willing to work on such committee, it shall be lawful for the Registrar, to appoint one or more authorized officers, not being a member of the society, as he may deem fit, to look after affairs of the society. “;

(2) The committee or authorized officer so appointed shall, subject to the control of the Registrar and to such instructions as he may, from time to time give, have power to discharge all or any of the functions of the committee or of any officer of the society, and take all such action as may be required to be taken in the interests of the society.

(3) The Committee or authorized officer so appointed shall hold office for a period of six months from the date of assuming the management of the society and shall -make necessary arrangements for constituting a new committee within the said period and for enabling the new committee xxxx to enter upon office;].

“Provided that, in no circumstances the term of office of the committee or authorized officer shall exceed six months from the date of their holding office.”;

[(4) The Registrar shall have the power to change the committee or any or all members thereof or any or all the “authorised officers appointed under sub-section (1) at his discretion even before the expiry of the period specified in the order made under sub-section (1).

(5) The provisions of “sub-section(2) of section 78A”shall apply mutatis mutandis for fixation of remuneration to be paid to “authorised officers appointed under sub-section (1).]

Answer to questions 2 & 3 are in following Section:

Section 77 – Acts of societies etc., not to be invalidated by certain defects

(1) No act of a society or a committee or any officer, done in good faith in pursuance of the business of the society shall be deemed to be invalid by reason only of some defect subsequently discovered in the organization of the society, or in the constitution of the committee, or in the appointment or election of an officer, or on the ground that such officer was disqualified for his office.

(2) No Act done in good faith by any person appointed under this Act, the rules and the bye-laws shall be invalid merely by reason of the fact that his appointment has been cancelled by or in consequence of any order subsequently passed under this Act, Rules and the Bye-laws.

(3) The Registrar shall decide whether any act was done in good faith in pursuance of the business of the society; and his decision thereon shall be final.

Answer Q 4 is take a print out of this and hand it over to the Dy Registrar.