Society Managing Committee (MC) Check-Mated u/s 73(1AB)

NEFARIOUS MANAGING COMMITTEE’S:

01.     Many nefarious Mg.Committee (MC) members in Coop. Societies are functioning in violation of the Maharashtra Cooperative Society Act,  more specifically by not executing the mandatory M-20 Bonds required u/s 73(1AB) r/w Rule 58A.  This is obviously to endlessly “keep on” clinging to the MC chairs, again obviously for either their vested interests or to super-impose themselves on to the other society members, thus self-satisfying the inbuilt craving for  self-hallucinated power,  to govern & control other members.

02. Apprehensively due to misleading representations from various vested interested persons, the MH Govt., innocently but calculatively, exempted the requirement of the aforesaid M-20 Bonds, BUT ONLY for Mg.Committee members of Housing Societies,  with effect from 6th September, 2012, vide its order no. CSL-2012/CR-402/15-C.   However for all other category of Coop. Societies, the M-20 Bond provision is STILL applicable and required to be executed within 15 days of assuming office.

Note:  OTHER CATEGORY of Coop. Societies means:  Commercial, Premises, Credit, Industrial, Agriculture,  and so on.

03. By “exempting the Housing Socieites”, from executing the mandatory M20 Bonds, the innocent MH Govt.,  has simply removed the default-criteria for “DISMISSAL” of the MC’member, thru the office of the Cooperative Registrar.    Here it also means that henceforth the MC’member WILL NOT BE DISMISSED, due to non-execution of the M20 Bond.  However here it also means, irrespective of the M20 Bond or no-M20 Bond, “EACH & EVERY “MC” member is individually and collectively liable for ALL the nefarious acts of the MC, irrespective of any excuse (unless proved otherwise)”

04. However the elated hopes of many nefarious Mg.Committee members in Coop. Societies, who were functioning without executing the mandatory M-20 Bonds, got check-mated for sure, when the optionless MH Govt.,  issued GR dated 26-11-2013, vide GR.No. CSL-2003/CR-496/15-C, and in a clarifying stance, which mandated the “M20 Bond” execution by those Mg.Committee members, who have assumed office before 6th September, 2012.  This effectively translates into automatic dismissal, “by legal default”, of all such Mg.Committee members, who have failed to execute the mandatory M-20 Bonds required u/s 73(1AB) r/w Rule 58A.  This syndrome can be referred as a “knee-jerk reaction”.

05. Mumbai High Court (HC), vide its various judgments had clarified the provision of the mandatory M-20 Bonds required u/s 73(1AB) r/w Rule 58A and the compulsory dismissal of all such Mg.Committee members, who have failed to execute the mandatory M-20 Bonds.  Obviously, left with no option the MH Govt., had to issue the above GR dated 26-11-2013, since lawfully the exemption MH GR on M20 Bond is effective ONLY for those Mg.Committee members,  who assume office ON OR AFTER 6th Seotember, 2012.

06. Gist of SECTION 73(1AB) of Maharashtra Coop. Society Act:

The members of the Mg.Committee shall be jointly and severally responsible for all decisions taken by the committee during its term relating to the business of the Society.  The  members of the committee shall be jointly and severally responsible for all the acts and omissions detrimental to the interest of the society.   Every such member shall execute a M20 Bond to that effect within FortyFive (originally Fifteen) days of his assuming the office.   Member who fails to execute such M20 Bond  shall be “DEEMED TO HAVE VACATED” his office as a member of the committee.

07. Gist of RULE 58-A Maharashtra Coop. Society Rules :

M20 Bond to be executed by elected Members of Managing Committee:

Every elected member of the Managing Committee shall execute a M20 Bond in form M-20 within Fortyfive (originally fifteen) days of assuming the office.  Non-Elected members need not execute the M20 Bond, since,  non-elected members are not eligible to remain in office.

08. Not executing the mandatory M-20 Bonds within the prescribed time-frames, automatically “disqualified” the Mg.Committee member (MC), as mandated under various judgements of the Mumbai HC.  IF such “disqualfied” MC member is put on  due notice by somebody and IF he still deliberately continues as a MC, THEN such MC can be prosecuted successfully in a Criminal Court under the various provisions of the Indian Penal Code, irrespective of any reference to the MCS Act.  Collective Nefarious activities of the MC, are also sufficiently covered u/s 34 of the IPC.

09. Provisional MC .OR. a Caretaker MC .OR. an Govt. appointed Administrator .OR. a Govt. appointed “Board of Administrator” .OR. who-so-left-over,  who acts as the Signatory-Executive Body and conducts the Administration of the Society, had to duly file in the M-20 Bond.

10. DEEMED VACATED Mg. COMMITTEE OFFICE, means, the defaulter Mg.Committee has no authority to :

a)    operate any Bank Accounts

b)    collect any Money or spend any Money.

c)     hold monthly MC meetings

d)    conduct any Membership Transfers

e)     sign on any documents, whatsoever including redevelopment agreements

f)      represent the Society, before any authority

g)    file recovery proceedings u/s 101, on defaulter members.

11. M20 BOND .OR. NO BOND.  LAWFULLY IT DOES NOT MATTER:

The liability of the Mg.Committee members, remains static & intact, under the omni-potent and omni-present provisions of aforesaid section 73(1AB),  which means “EACH & EVERY “MC” member is individually and collectively liable for ALL the acts of the MC, irrespective of any excuse (unless proved otherwise)”.

This nicely & lawfully Translates into the following:

a) Any proved damage to a members car inside the Society Premises, makes the Society and the entire MC team, collectively liable for prosecution + claims + damages, under the provisions of the Consumer Protection Act.

b) Falling of “ill-maintained Lifts”, would classify under the term “Negligence and Deficiency”, and qualifies for Criminal Prosecution under IPC and also under the Consumer Protection Act.

c) Failure to “Preserve & Maintain” the mandatory Records & Registers of the Society and Society building plans & documents, would classify under the term “Negligence, Cheating, Fraud, Forgery, Misrepresentation”,  and qualifies for Criminal Prosecution under IPC and also for “Negligence and Deficiency”  under the Consumer Protection Act.

d) Making irrelevant or false entries in the mandatory Records & Registers of the Society,  and/or  removing or destructing or manipulating the mandatory Records & Registers of the Society, would classify under the term “Cheating, Fraud, Forgery”,  and qualifies for Criminal Prosecution under IPC.

Note:   Here “Mandatory Records” means “I & J & Share” Registers, Sinking & Repair Fund Registers, Nomination Registers, Mortgage Register, Account Books and so on ….

12.  A Typical Filmsy & uninvited, excuse by most nefarious Mg.Committee members are:

a)  We are providing Honorary Service

b)  We are working philanthropically

c)  We have no time …. come next month

d)  Okay …. Okay …. lets see …. lets wait and watch and so on ….

Note:  There is no provision under the MCS Act,  for the above.   Nobody pleads or invites the Mg.Committee to provide  “Honorary Service” and this is more so when all MC members self-fill  the Election Nomination form, after pleading other members to Propose and Second them.

13. Like most laws, and due to legal default & stale-mate situation, the defaulting Mg.Committee may be able to salvage their violations of M20 Bonds, and yet successfully continue legitimately in office, and continue with all their functions.

INTROSPECTION:

a) M20 Bond is presently “Exempted”, that too ONLY for “Coop. Housing Societies”  and not barred, permanently, under the MCS Act & Rules.

b) Provision of similar-like M20 Bond, is likely to be introduced, in very near future,  thereby giving a more professional and systematic approach, for the management of Coop. Housing Societies.  Typically the MH Govt., would have no option BUT to remove the “Exemption” that is available ONLY to Coop. Housing Societies.

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AUTHOR:  Hemant Agarwal

Email:  [email protected]

Date:  02nd December, 2013