By I C Naik
Mumbai Mirror (on 18 09 2019) carried an interesting rare story on a new species of trouble makers in Cooperative Housing Societies in Maharashtra namely the Authorized Officer have sprung up around the co-op. housing societies in Maharashtra.
The title is a bit weird veered namely “Administrator asked to return Rs 26.55L to Kalina society” (Kailash Prabhat CHS on Kalina CST Road). Weird because the power to appoint an “Administrator” conferred under Section 78 of the Maharashtra Cooperative Societies Act 1961 has been withdrawn in relation to financially self-reliant cooperative societies (the housing societies are totally self-reliant].
Following Proviso to this Section added with effect from 14 2 2013 is a much-awaited boon to housing societies in Maharashtra;
“Provided that, nothing in this sub-section shall apply to a society, where there is no Government shareholding or loan or financial assistance in terms of any cash or kind or any guarantee by the Government:”
The effect of this proviso is also interesting:
Even if, the committee of a Housing Society makes a persistent default in performance of its duties or is negligent in the performance of its duties or is otherwise not discharging its functions properly and diligently, or there is a stalemate in the constitution or functioning of the committee, occasioned by resignation, disqualification of members of committee or otherwise, still the Registrar has no authority to keep the committee under suspension and appoint an administrator.
Assuming the afore said proviso was not added even then the tenure of the maximum Administrator could not exceed 6 months.
Every one reading above headlines must be distressed as to how come the Kailash Prabhat CHS got the Administrator and the committee got suspended? The storey is silent about it. Most shocking is the statement in the story that “An administrator, appointed by the registrar under Maharashtra Co-operative Societies (MCS) Act 1960, has allegedly duped the members of a housing society of Rs 26.55 lakh by withdrawing money from the society’s bank account during his 14 months tenure. He has now been ordered to return the amount.”
No punishment for fraud!!!
Quite a long story has arguments on both sides and the truth may come out much after the sad event is forgotten. We should try to understand the story in terms of lessons to management of housing societies.
I guess a few careful readers may be wondering if there is a new law namely Maharashtra C H S Law has come up? The answer is No, though it will be explained.
There was a long pending need the Housing Society activists were mulling over. The NCHF (the National Cooperative Housing Federation) had some time in the year 2000 drafted a Model Cooperative Housing Societies Law and circulated to State Governments but only to adorn the State Legislature’s Libraries. A very recent development not being widely talked about is enactment of MAHARASHTRA ACT No XXIII OF 2019 which was first published, after having received the assent of the Governor in the “Maharashtra Government Gazette”, on the 23rd July 2019. This has brought significant change in the structure of MCS Act 1961 in several ways that in the offices of housing societies it may better be known as Maharashtra C H S Law. It is enough to know that a new Chapter with provisions exclusive to housing societies has been inserted in MCS Act. Certain provisions of MCS Act are declared not applicable to housing societies. One can imagine a messy Cooperative Housing Society Law; more about it some other time. For now let us revert to our story.
Proviso disempowering the Registrar to appoint Administrator has been badly handled leading to confusion to even law drafters. When MCS Act was amended post 97CAA pursuant to Article 243ZT of the Constitution of India, the Maharashtra Cooperative Societies (Amendment) Act 2013 did a bit tinkering with provisions of Section 77A. In that Section the now untouchable term Administrator was replaced by the new terminology AUTHORIZED OFFICER. This was because this specie has been banned by 97CAA. But this term remained unchanged in the heading namely [77A. APPOINTMENT OF MEMBER OF COMMITTEE, NEW COMMITTEE OR ADMINISTRATOR, WHERE THERE IS FAILURE TO ELECT MEMBER TO CONSTITUTE COMMITTEE OR WHERE COMMITTEE DOES NOT ENTER UPON OFFICE. There is a proviso added to Sub-section 3 of Section 77A namely “Provided that, in no circumstances the term of xxxxx authorized officer shall exceed six months from the date of holding office.”
Reverting to the storey reportedly there is a statement of inquiry officer namely” The authorized officer Ghildiyal, who was appointed in 2016, continued for 14months without permission, Batule said adding that Ghilidyal even made bogus vouchers.” Dd any one observed the flip flop of the term Administrator and Authorized officer? As we have seen so far in provisions of MCS Act there was no chance that the Authorized Officer could hang on to his tasks after expiry of six months.
Finally such stories dampen the spirit of cooperation amongst Housing Society members. The lesson is ultimately they ought to gang up against such wrong doings with such blatant violation of law. Unite and make sure the Registrar has no excuse to invoke Section 77A and mess up with the funds. Not all mess up stories will see the light of the day. So be on your guard. More critical times are awaiting a strong Housing Society management especially for older housing societies. Out sourcing Redevelopment is being replaced by Self Redevelopment.
The Maharashtra Government has announced a new Scheme; Government Resolution is made available on the Government Website www.maharashtra.gov.in and its code number is 201907041556201202.
Prepare your Housing Society to save the redevelopment falling in to the hands of Administrator. It is a gold mine from them.