Removal of Chairman of a Co-op Society

Mrs. Neerja Prabhakar

Dear Sir,

Chairman of our society has defaulted on his maintenance dues and showing favourism to his family members as he owns 2 flats in the name of his wife and son each. He is an associate member. He recently abused me (Jt. Secretary) and abused my character verbally in presence of secretary, 1 committee member, accountant and watchman and asked me to GET OUT of society office. I complained with the Dy. Registrar as this was an attack on the modesty of a woman as I had refused to sign certain papers which I thought may harm the society.

The members in AGM and Special General Body resolved to dismiss him as the Chairman due to all these reasons. But he with the support of secretary refused to be removed from the chair. I just wish to know if he’s still the authority to continue as the chairman or is the resolution of General Body binding on him. I may mention here that he was appointed Chairman 5 months prior to this resolution and the tenure of our committee expired on 12th October 2013. Pls advice. Thanks

I C Naik

If the Conduct of the Chairman has hurt the Lady colleague gravely, it can be viewed  as a “criminal assault against WOMAN” and a complaint can be lodged in  the nearest Police Station having jurisdiction under the IPC. Since you have solid eye witnesses in secretary, 1 committee member, accountant and watchman, you have a sound case. Please consult a lawyer prior to this harsh measure, though justifiable.

In fact the redressal of this type of compliant is provided in Bye Law No 173-175 and as per (E) thereof a police complaint could bring a faster remedy and it’s a process initiated under society law. File complaint with any committee member and after 15 days if nothing happens go to  Police with the copy of such complaint.

As per the bye laws of cooperative housing society “No Associate member shall have any rights or privileges of an Active member except as provided under Section 27(2) of the Act.” That right is of voting in the general body meeting in the absence of the original member.

This position is also supported elsewhere in Society Law. There is a proviso to Rule 20 of the Maharashtra Co-operative Societies Election to Committee Rules, 2013 (Published in the Maharashtra Gazette on 20-8-2013) reading as under:

Provided that, in case of joint or associate members, only the member whose name stands first in the share certificate shall be eligible to be nominated as candidate for the election. (to the managing committee)

Yet another support to this disability of the Associate member is to be found on page 16 of the Housing annual posted on the web-site of the Cooperative Commissioner Pune in these words  “A person, who became an Associate member by paying only admission fee, shall not get any rights in voting or election on behalf the original member. It is necessary for the Associate member that his share/name is included in the ownership of property for holding share jointly.”

An office bearer can be removed from the office if a motion of no confidence is passed by 2/3 majority of members of the managing committee in its meeting requisitioned  by 1/3 of the committee members and presided over by the Dy Registrar. In case you can muster requisite majority send requisition to the Dy Registrar.

Section 75CA1(i) EXPLANATION (e) (e) in the case of housing societies, a member who defaults the payment of dues to the society within three months from the date of service of notice in writing served by post under certificate of posting demanding the payment of dues, is disqualified to continue as member of the managing committee.

Resolution passed in the special general body meeting is no more than expression of loss of confidence of membership in the Chairman, but that is in-effective unless taking a cue from such resolution, the chairman quits on his own. He cannot be removed by that resolution, because the office bearers are elected by the committee out of the members elected by the general body of members. As yet a “right to recall” is not conferred on the membership of the cooperative society.

The Maharashtra Cooperative Societies (Amendment) Act 2013 has amended Section 83 – (Inquiry by Registrar ) conferring powers on the members  whereby

“on the application of the one-fifth members of the society the Registrar by  himself or by a person duly authorised by him in writing, in this behalf, shall hold an inquiry into the constitution, working and financial conditions of the society.”

Before holding any such inquiry on an application, the registrar may having regard to the nature of allegations and the inquiry involved, require the applicant to deposit with  him such sum of money as he may determine, towards the cost of the inquiry.

If the allegations made in the application are substantially proved at the inquiry, the deposit shall be refunded to the applicant, and the Registrar may under section 85, after following, the procedure laid down in that section, direct from whom and to what extent the cost of the enquiry should be recovered.

If it is proved that the allegations were false, vexatious or malicious, the Registrar may likewise direct that such cost shall be recovered from the applicant. Where the result of the inquiry shows that the allegations were not false, vexatious or malicious, but could not be proved, such cost may be borne by the State Government.

The Chairman’s family holds two flats. Holding more than flat requires prior approval of the managing committee . So as a Jt Secretary you can verify if such permission was obtained. If he is in breach he would be disqualified to be a committee member any way.

Care taker Committee

The Committee’s tenure having expired on October 12, 2013 he is no longer a Chairman. but according to government order (which I have not come across) as per news-paper reports, such Committees have to be in office as a care taker committee. Sub-Section 15 of Section 73CB does provide that Committees having expired the tenure prior to 31 3 2013 should carry on till Government appoints an Election Commissioner with a duty to organize cooperative society elections.

There are several options. As in your case majority members have opposed chairman’s conduct so it should be easy to open multiple fronts for the ouster of the chairman. It is important that members are willing to rise to a call against unfair management, which is lacking in most societies and committees have their own way and in most cases an Individual like your Chairman is the winner.

The management of cooperative society law appears to be the lowest priority of the State and as such it is full of laxities. Legal battles are hardly fought on same level as opponent and complainant. So full scale weighing of the protracted litigations is a must.