a) Formation of Co-operative Housing Society
Practically every developer has to form a Co-operative Housing Society at one point of time or another. With the limited amount of options available with regard to management of the affairs of the building i.e. (a) Condominium (b) Private Limited Company and (c) Co-operative Society, (excluding the unrealistic rental housing), it will not be an exaggeration to state that in atleast 90% cases particularly in Mumbai the Promoters and/or the Builders have formed a Co-operative Housing Society. The basic requirements for Registration of Co-operative Housing Society normally is not known to the flat purchasers. It is here that apart from the statutory obligations cast upon the builder, the builder as a friend, philosopher and guide of promoters helps in forming a Co-operative Housing Society.
There are basically four types of Co-operative Housing Societies connected with the housing.
(a) Open Plot Societies
(b) Flat Owners Societies
(c) Tenant Societies
(d) Housing Board Societies.
In Open Plot Societies, members purchase or take one lease a plot of land and themselves construct the building. Due to bureaucratic formalities and lack of specialised knowledge, a few societies are formed under the head of open Plot Societies. When a builder constructs flats and sells them to Flat Owners, the Society when formed is called Flat Owner’s Society. When Landlord forms a Society of tenants, it is called Tenants Society. When a Society is formed by Allottees of flats and building is constructed by the Housing Board Authorities, i.e. Mumbai Housing and Development Board, then the Society so formed is of the type of Housing Board Society. The procedure that should be followed for formation of societies of the above said types is different for different types of Societies. Members who wish to form Co-operative Housing Societies are generally ignorant of the procedural aspects and as a result of the same they have to run from place to place and get entangled in bureaucratic delays.
The procedure for Registration of a society begins with electing a Chief Promoter in a meeting of the Promoter. The builder under the Flat Owners type of co-operative society has the first right to act as the chief promoter. The developer/flat purchasers should call for a meeting of the Promoters by issuing the notice under Agenda of the meeting given at least 14 days notice to the Promoters. In this meeting, a Chief Promoter is elected who can exercise such powers and carry out such functions as are mentioned in the minutes of the Promoters of the proposed Co-operative Society. After electing the Chief Promoter, the proposed name of the society has to be decided by the Promoters.
Normally, the name reservation proposal should be accompanied with the signature of atleast 10 Promoters who have attended the meeting. It is a common belief that the Society should consist of atleast 10 members. If the number is less than 10 then special permission from Government has to be taken. In such cases, the garages/car parking may be allotted to other relatives of the promoter to reach number of 10. It would be of interest to note that the model byelaws define flat as a ‘Flat means a separate set and self-contained set of premises used or intended to be used or intended to be used for residence, or office or show-room, or shop, or godown and includes a garage, or dispensary, or consulting room, or clinic, or flour mill, the premises forming part of a building and includes an apartment’. On allotment of name and permission to open a bank account by the Registrar, the Chief Promoter has to collect Share Capital, Entrance Fees from promoters and deposit the same in the branch of the bank permitted by the Registrar. It should be noted that the amount cannot be withdrawn from the Bank till the Society is Registered or its Registration is refused, except with prior written permission of the Registrar. The Chief Promoter should submit Registration Proposal to the Registering Authority within a period of 3 months from the date of issue of Letter of Reservation in the name of the proposed Society. The documents that are normally to be submitted to the Registering Authorities are as under :-
1. Application for registration of Society in Form A along with Statement A. Enclosure to application for Registration as per Rule 4(1) of Maharashtra Co-operative Societies Rules, 1961.
2. Information about proposed society in Statement ‘B’ (vide Govt. Circular dated 2-5-1980).
3. Information about promoter members of the proposed society in Statement ‘C’ (vide Govt. Circular dt. 2-5-1980).
4. A Statement of Accounts as per Form D.
5. Model Bye-laws.
6. Bank Balance Certificate.
7. R.B.I. / Treasury Challan for payment of Registration Fee of Rs. 2500/-.
8. Title Clearance Certificate from an Advocate
9. A true copy of the approved Building Plan.
10. Letter of Authority Granting permission to commence construction work/Completion Certificate (if applicable).
11. Affidavit on Rs.100/- Stamp Paper from atleast 10 promoter members to the effect that they are residing in the area of operation of the Society (Proposed), made before a Competent Authority.
12. Affidavit from the Chief Promoter on Stamp Paper of Rs. 100/- executed before the Competent Authority in form ‘Y’.
13. Certified True Copy of agreement made on Stamp paper and registered between the builder, promoter and purchasers of flat.
14. Where the promoter members are firms/ companies, a letter of authority from such firms/companies authorising the promoter to sign on behalf of firm/company.
15. In case of such proposed societies, names of 60% of the flat holders of the total number of flats constructed or proposed to be constructed as per the plan approved, must be included in Statement ‘A’ to be attached to the Registration Proposal.
It is the duty of the Registrar to register the society and on registration of the society it becomes a separate legal entity. Thereafter, the management of the affairs of the society is carried out by the managing committee which is elected by the general body meeting of the society. It may be of interest to note that in a co-operative society the principle is one member one vote. In a co-operative society the right to be exercised in the general body meeting is a personal right. This is one of the reasons why even a person holding a power of attorney cannot attend the general body meeting of the society. THE quantum of the capital being introduced by the member is not of much importance. Preference should be given for formation of a private limited company if one member propose to acquire majority of the flats in the building.
