Sriniwas Patil, Thane
I am an Office Bearer of the MC of CHS in Thane. The following is my query
In case of a person having two or more flats, should we issue one share certificate for all flats combined or issue one share certificate for each flat?
What would be the number of shares in either instance?
Secondly does such a person has a single vote or as number of votes equal to number of flats whenever required for voting?
Your guidance shall be highly appreciated.
I C Naik
Sriniwas Patil has raised very good questions concerning the three issues (Shares Flats and Votes). These three baffle a large number of housing society members and management a like. Hence a comprehensive answer with full legal support is being attempted. Hope a large number CHS management will take trouble to understand fully and strengthen their understanding on certain important fundamental matters of housing society management.
1.Number of Shares:
A person desirous of becoming a member of a CHS, is required to satisfy the Committee on 8 matters specified in the registered bye-laws of every CHS, one of them reading is under. “19.An individual who is eligible to be a member and who has applied for membership of the society in the prescribed form, may be admitted as member by the Committee on complying with the following conditions:-
(i)he has fully paid the value of at least five shares of the society, along with his application for membership;”
2.Number of Flats
The condition Number (vii) reads (vii) he has sent, along with the application for membership of the society, a certified copy of the agreement, entered in to by him with the Promoter (Builder) under section 4 of the Ownership Flats Act.
If an applicant has bought more than one flats at a time, or at intervals of time, he has to submit as many number of copies of agreements, referred to in above condition as are bought by him. Subscribing a minimum number of shares applies to a member who may buy one flat or more.
Even entrance fee payable as per condition number (ii) of that Bye-Law is not payable as a member is admitted to membership only once.
If you read the format of Share Certificate appended to the Bye-Laws carefully you will not find any reference to flat. Purchase of a Flat and purchase of shares are two independent conditions but both must be fulfilled if one wants one or more flats in a CHS.
3.Number of Votes
“One Member one Vote” is a hallmark of cooperative movement that cooperative societies are democratic organizations. In Para 13 of the recent order [19-02-2015 (2015) 42 SCD 494] the Supreme Court of India has observed ( “The traits of democracy were present in the very first legislation (1904) through the principle “one man, one vote”).
Section 27 of the MCS Act 1960 declares that “no member of any society shall have more than one vote in its affairs”
Member of CHS is called upon to exercise his vote generally on two occasions.
One, on every matter included as Agenda item, of members’ meeting for their approval and second to cast one vote each to elect members of the managing committee.
It should be understood clearly that right to the flat is a legal right to the property and right to vote on society matters is a right to have a say in the management of housing society attached to membership and not to flat. These three are extremely carefully crafted in to the concept of cooperative societies.