MANAGERIAL DISORDERS AND ILL-GOVERNANCE IN HOUSING SOCIETIES

Co-operatives Housing Societies are based on the values of self-help, mutual help, self responsibility, democracy, equality, equity and solidarity. Co-operative members believe in the ethical values of honesty, openness, social responsibility and caring for others. The activities of Housing Co-operatives in various States are regulated through respective Co-operative Societies Act and Rules administered by the Registrar of Co-operative Societies appointed by the Government.

Co-operative Housing Societies are ridden with so many problems, that it is difficult for a common man to know how to tackle a situation, many reside in such co-operative housing societies, which is full of administrative ailments and common Members are looking for an answer.

Therefore, it is the need of the day that every Member of the Co-operative Housing Society is well acquainted with a basic knowledge of Maharashtra Cooperative Societies Act (MCS Act), MCS Rules, Model Bye-laws governing the Housing Cooperatives, guidelines and circulars issued by the office of Registrar of Cooperatives, Consumer Protection Act, and Right to Information Act (RTI Act) in order to bring better management in their Societies.

A lot of Cooperative Housing Society Officials, ignorant of the law and disregardful of the same, tend to overstep the line when it comes to administering a society. Very often, a lot of property spaces within Housing Societies are mismanaged to the convenience of members as if it were beyond the purview of the Municipal Authorities.

Every FSI violation within the Co-operative Housing Society by way of extension of balconies or covering of open spaces or extension of shops/residence beyond stipulated values in the original plan of the Society structure that lie with the authorities, is a violation of the law and perpetrators are liable to be pulled up.

Even if a Co-operative Housing Society’s AGM approves a felony or civil wrong through consensus, it cannot legalise a wrong. Increasing the Society income is welcome by all means other than those that contravene the law. The Society should not charge any fees to shopkeepers extending their shops and should instead dissuade them from doing so by, first persuasion or else through registering complaints with the Local Municipal Authorities for space violation.

The knowledge of Laws and Rules helps the Member not to follow the dictates of the Managing Committee because under the pretext of doing free and honorary work in for the Society, they exploit the situation for their benefit only. Members, when they face problems, suddenly wake up when they encounter the high handedness of the Managing Committee instead of getting their problems solved.

Running a Housing Society is a responsible task and any Managing Committee Members trying to derive personal benefit out of his or her position in the Managing Committee promptly needs to be shown the door to ensure that Housing Societies are functioning well and not creating unnecessary harassment for flat owners.  

Managing Committees are considered as the Trustees who are responsible to look after the welfare of all the Members who have elected them to run the Society on their behalf. Therefore, if any Managing Committee is found guilty of running the Society in a manner not conducive to the smooth and honest functioning of the responsibilities, there is no option but to take stern action against them which could even mean its dismissal depending upon the gravity of the offence.

The Members at the time of election must ensure they elect Members who are clean and sincere and dedicated. Care should be taken not to elect Office Bearers who have consistently flouted provisions of Co-operative Act, Rules and Byelaws to nurture their own self interest or committed serious financial irregularities with the Society funds, Members with dubious records, corrupt backgrounds or even Members from the Managing Committee which has year after year not carried out Audit Rectification as required by law as these are the fraudsters who hide the facts from the Members for fear of getting exposed.

In case of those Housing Societies propose to opt for Redevelopment of their Property, such Members of the Committee cannot be trusted to negotiate, finalize and sign Redevelopment Agreements with the prospective Builders. Also there are Officer Bearers who hold on to the posts of Chairman, Secretary and Treasurer for decades by hook or by crook because for them to continuously remain in the Managing Committee and attain undeserved importance amongst the gullible Members of the Society, is a very, very lucrative and money-spinning business.

It is the calamitous need of the hour that those Housing Societies standing on the threshold of redevelopment and want to ensure the successful completion of redevelopment task without any imperil; get genuine advice and educate themselves by the redevelopment experts and counselors like us having both, the experience and expertise.

It is worth to mention here that in the name of redevelopment of old Housing Societies in Mumbai, the Civic Authorities in last few years have carpeted free ground to breed rampant corruption to benefit the private Developers to sub serve their illegal and deceitful objectives to garner huge profits. This is most required of the stringent laws to impede the members of Managing Committees to enjoy the sleep with the Developers for few greens and thrust redevelopment idea on the innocent and gullible members.

There are numerous instances where firstly, the members of the Managing Committee are hooked and enticed of unlawful gratifications in substantial amount by certain unscrupulous Developers and use these Managing Committee Members as agents to pursue and pass over the rosy dreams and benefits to innocent members of the Society and criminally ensure that the redevelopment project is bagged by the concerned Developer.

The corrupt members of the Managing Committees also resort to arm twisting, harassment and threatening method to the flat owners into submission as per the Developer’s instructions. Scared by such hounding tactics, most members accept and offer their consent towards the redevelopment of their Society without any protest and prefer to go along with whatever the whole Managing Committee decides.

It is well known fact that the illegal gratifications and lavish spending by a large cartel of unscrupulous Developers entice the members of the Managing Committees and provoke them to turn against their own members of the Society in the matter of obtaining consent and force implementation of redevelopment.

It is also observed often that the Chairman, Secretary and Treasurer will threaten or make a show of resigning including stepping down when they see there is non-cooperation from the rest of the Members of the Society, but will never do so in reality and cling on to their lucrative and marketable posts. Do not trust such Office Bearers of your Managing Committee blindly in any Redevelopment Process which is not in benefit of a common Member of the Society.

In order to get the documentary evidences against the wrong doings of the Managing Committees, the Members are entitled to seek any information and copies of such falsified documents from the Managing Committee U/s.32 (1) & (2) of MCS Act, 1960. Managing Committee Members egotistically feel that Members have no right to question their working. In case of disputes, they use unlawful and unfair methods such as not accepting the Members' correspondence, not replying to them etc. 

The Members of the Society are generally geared with an attitude of “Jane do, Kaun aise logo se panga lega” and don’t think of the repercussions due their short sightedness, ignorance, lack of time and daily primary problems in earning their livelihood and at home. 

The lone and old aged Members not having spouse to support, usually face mental trauma from such Managing Committees regardless of paying the maintenance charges promptly to the society.  To fight for rights in a Housing Society demands complete knowledge of laws, lot of patience, sense, time, energy and most importantly, sufficient money to spend in case of litigation.

There are many remedial measures to set right such self occupied, malicious and malevolent Managing Committee while the due procedures of elections are not followed as prescribed in the Byelaws of the Society. Such Managing Committee is considered as unauthorized, illegal and not competent to occupy the Office of the Society.

 Illegal & unauthorized Managing Committee: File a petition under Section 89 of MCS Act with the Dy. Registrar of Cooperative of Local Ward and pray for dismissal of Managing Committee and request for fresh elections by deputing Administrator.

 Indemnity Bond Form – M 20 if not filed before 6th September, 2012: File a private criminal complaint with the Local Metropolitan Magistrates Court against the Managing Committee for criminal misrepresentation and fraud.

 For not providing the Balance Sheet and Income & Expenditure Accounts: Make an application under Section 81(3b) MCS Act to the Joint Dy. Registrar to depute a "Flying Squad" to seize and ascertain the financial manipulation of Society's Fund.

 For not conducting Annual General Body Meeting on or before 14th August every year- Written application under Section 75 of MCS Act to the Dy. Registrar to disqualify the Managing Committee and additionally file a Consumer Court Complaint for deliberate, malicious & negligent delay in providing services to the Members of the Society.

 Failing to maintain and update the Statutory Records of the Society: Every year around June, Member should file an application with a Rs. 5/- Court Fee Stamp to the Dy. Registrar's office stating that the Managing Committee has failed to maintain and update the Records of the Society as prescribed in the Byelaws with a request to carry out Inspection for the default.

 If a Member of the Managing Committee has 3rd child born after September-2001: Such Member is permanently disqualified to become a Member of the Managing Committee: Any Member of the Society can complain to the Chairman for disqualification of such Member of the Managing Committee and may be removed from the Managing Committee within 30 days. If the Managing Committee fails, a Member can make an application under Section 73 of the MCS Act and pray to the Dy. Registrar to dismiss and disqualify the disqualified Member permanently.

The major drawback of the majority of Members of the Society is that they seldom attend the General Body Meetings due to their lethargic stance. On the other hand, those Members who attend such Meetings do not speak due to hesitations and fear of people around and mainly due to the high handed attitude of the Managing Committee.

A Member of the Society is required to learn to analyze the Balance Sheet & Income & Expenditure of the society and in Annual General Meeting, the irregularities if detected, question the Managing Committee for clarification. Alternatively, a Member can also write to the Auditor of the Society and in event of the Managing Committee and the Auditor refuses to tender any reply, complain can be lodged with the Dy. Registrar to have the Society’s Accounts Re-Audited.

If the financial misappropriation of funds or any other serious irregularities detected and overlooked by the Auditor of the Society, a Member can lodge complaint with the Chartered Accountants Association and also with the Dy. Or Joint Registrar’s office to cancel the registration of such erring Auditor. Simultaneously, a Member can file Criminal Proceedings in Criminal/Consumer Court. 

However, a Member can opt to file a criminal case in the Metropolitan Magistrate’s Court and in Consumer/Co-operative Court against the Managing Committee only when proper documentary evidences are available to prove the fraudulent affairs in the Society. 

The Members desire to enter in to the Managing Committee on their own wish.  They go door to door and propagate to other Members to propose and second their names for contesting elections. Since this is a social service for them and as they are the Trustees to look after the various affairs of the Society, they cannot say that they are providing honorary service to the Society and the Members should agree and accept their every action whether right or wrong.

Generally the Society face more problems caused by the then Members of the Managing Committee who feel the pinch of losing out their chairs resulting in to hostile attitude against the freshly elected Managing Committee. It has also been experienced that though the Members of the Society are no fools or illiterates but due to their peaceful nature and out of fear, are agreeing and resolving every un-constitutional and unlawful proposal backed by ulterior motives moved by the Members of the Managing Committee in various Meetings.

By virtue of their clout or strength in the Managing Committee of the society, whoever tries to protest against their barbarism, the stooges of these Office Bearers and the Managing Committee Members are in a readiness to either snatch away the mike from hands of ordinary Members who raise the voice or physically attack on the protesters in meetings.

A Housing Cooperative is a legally established association that is owned and democratically controlled by its members for the primary purpose of improving their living conditions. Lack of participation by the Members in any Housing Society is mostly due to ineffective leadership of the Managing Committee. The Members of the Managing Committee have, therefore, an important role in the overall administration and welfare of their Housing Society and its Members.

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