Societies cannot refuse membership to those who are eligible

Adv. R. P. Rathod., throws light on the Laws and Procedures that govern transfers of Flat.

Transfer of membership in a society is common enough, but many times it gets entangled in disputes sometimes because the concerned parties have not completed the formalities, and at other times because of wrong interpretations of the laws and procedures says Adv. R. P. Rathod.

        Section 22 of the Maharashtra Co-operative Societies Act, 1960 lists the categories of persons who can be members of a society.

        Accordingly an individual competent to contract, a firm, a company, any body corporate, registered society the state government, Central government, a local authority, or a registered public trust may become a member of a co-operative society. Prima facie it may appear that Section 22 has enlisted all types of possible persons, but if you look carefully, you will realize that a Hindu Undivided Family, proprietary concern, an unregistered partnership firm, and a private trust are not eligible for membership adds Adv. R. P. Rathod.

        He further says that under Section 23 (1) of the MCS Act, 1960 no society shall, without sufficient cause, refuse admission to membership to any person duly qualified under the provisions of the Act and its bye-laws. Thus it is evident that the law does not put any restrictions on membership to a person in a society. Societies cannot restrict membership for members of a particular community as membership is open to all eligible u/s.22. The Act and the Rules do not envisage such restrictions.

He says that apart from the Notice of intention to transfer, the model bye-laws list out the following requirements, and both transferor and transferee must comply with them.

·                  Application for transfer of membership in the prescribed form;

·        Application for membership by the proposed transferee in the prescribed form;

·     Transfer fee of Rs. 50/- under the model bye-laws of 1984, Rs.500/- under model Bye-laws of 2001 & 2009;

·                Entrance fee of Rs. 10/- under the model Bye-laws 1984, and Rs. 100 under model Bye-laws 2001 & 2009;

·         Payment of premium at a rate to be fixed by the General Body meeting, not exceeding 2.5% of the difference between the book value of the flat and the price realized by the transferor on transfer of the flat or Rs. 25,000/- whichever is less. (Under the model Bye-laws, only one limit exists i.e. Rs. 25,000/-. This is not applicable in case of transfer to a member of the family or in case of death of a member to nominee or legal heir)

·              'No Objection' certificate required under any law for the time being in force or order or sanction issued by the Government, any financing agency or any other authority wherever applicable;

·                 Undertaking by the transferee in the prescribed forth to use the flat for the purpose for which it is allotted;

·               Undertaking by the transferee in the prescribed form specifying on whom the proposed transferee is dependent, in case the transferee is a non earning person;

·          Undertaking by the transferee in the prescribed form to dispose off the plot / flat / house owned by him or member of his family [Now under the model bye-laws of 2001 & 2009 this is not required];

·        Declaration by the transferor in the prescribed form under ULC Act for not holding immovable properties exceed­ing 500 sq. meters;

·          Declaration by the proposed transferee in the prescribed form under ULC Act similar to that mentioned above;

·         Copy of Agreement for Sale executed between the transferor and transferee;

·             Proof of payment of Stamp duty on the Agreement for Sale.

·             Proof of payment of fee for Registration of the Agreement for Sale;

·             Certified copy of the resolution in case of a firm, body corporate etc.

·             If the flat under transfer has already been mortgaged by the transferor, a no objection from the respective financing agency.

        In addition to the above list, it would be advisable for the purchaser of the flat to obtain special power of attorney in respect of the subject premises, particularly when the seller is a non- resident Indian or staying/ going out of the city or in other similar circumstances.

        The Share Certificate in the original may be submitted only when the society requires it to make an endorsement thereon. Adv. R. P. Rathod. states that Flat purchasers need not wait for a general body meeting for admission. Many societies are managed according to non-existent laws, simply because of practices that have prevailed for many years. Sometimes, there are misconceptions and often, things are done according to the convenience of managements.

        Adv. R. P. Rathod. further elucidates that under Section 22, read with Section 23 of the MCS Act, 1960, and provisions of the model bye laws, admission of a new individual member is within the purview of a committee and the admission application has to be decided within a period of three months as otherwise the applicant is deemed to be admitted as a member.

        However, in, practice it is found that many societies postpone the matter of admitting new members to Annual General Body meetings. An eligible applicant has generally an unfettered right to be admitted as a member of a Co-operative Housing Society concludes Adv. R. P. Rathod.