Bandra Building Resident Unearth Rs. 100 Crore Fraud in his Society

Adv. R. P. Rathod emphasis that it is very important for every Managing Committee member to file the mandatory M-20 Bond as stipulated in the Maharashtra Co-operative Societies Act 1960, failing which he shall deemed to have vacated his office as a member of the Managing Committee.

Adv. R. P. Rathod says that in such a classic example “A resident of Rachna Co-operative Housing Society at Hill Road in Bandra had accused some members of the Managing Committee of resorting to forgery to strike an Rs 100 crore deal for redevelopment rights.”

Mr. Mohammed Musaddique Shaikh, the resident of the said society, alleged that the members resorted to forgery fearing the deal would fall through as the papers of the society were not in order.

Adv. R. P. Rathod further adds that in this matter “After the Managing Committee members entered into an agreement with the builder for redevelopment in December 2006, they realized that they had not filed the mandatory M-20 Bonds.”

When a Managing Committee is elected, it is mandatory for them to execute the required M-20 Bond and file a copy of the same before the Office of the Registrar of Societies. This Bond pertains to accepting responsibility for wrong-doing, if any, during their tenure. In absence of the mandatory M-20 bonds, the society cannot enter into a deal to redevelop the property.

In this Case “The election of the society took place on May 25, 2004. The committee was constituted on the same day. The required M-20 bonds ought to have been placed on record by committee members on or before June 9, 2004, which was not done.”

Adv. R. P. Rathod says that, “Members not having filed M-20 bonds within 15 days of being elected cease to be part of the Managing Committee. A further consequences of the same is that all documents signed when they have deemed to have been ceased to be Managing Committee members are illegal and cannot be given effect to proceed in any matter pertaining to the society’s day to day affairs.”

“When residents of the aforesaid society insisted on seeing copies of the M-20 bonds, the accused purchased stamp papers and prepared back-dated M-20 Bonds,” as alleged by Mr. Shaikh, the complainant in the matter. Another resident Mr. S B Naik, moved the HC alleging fraud in the society. The court asked the additional controller of stamps (Mumbai) to investigate. The investigation revealed that the dates on the M-20 bonds Stamp papers were forged. Subsequent to the said findings a complaint to that effect was registered before the Bandra police station under Sections 465, 467 and 471 of the IPC.

This is just an example which manifest that the required bond must be executed by each member of the Managing Committee in Form M-20 on a Stamp Paper within the stipulated time frame. Failure to do so, will invite penal consequences concludes Adv. R. P. Rathod.

-      Adv. R. P. Rathod.