Members
abhimanyu
(Querist) 07 August 2013
This query is : Resolved
A society in Haryana was formed in 1999. Thereafter THE HARYANA REGISTRATION AND REGULATION OF SOCIETIES ACT, 2012 was passed Section 23 of which provides as follows
"A partnership firm, whether registered or not, or a body corporate of whatever description, shall not be eligible to be a member of a Society:
Provided that there shall not be any bar for a partner as defined in section 4 of the Indian Partnership Act, 1932 (Central Act 9 of 1932) or a member or share holder of a body corporate to become a member in his individual capacity."
The Society had three companies as its members.
Now what will happen to the Society.
ajay sethi
(Expert) 07 August 2013
the corporates will have to resign from membership of the society . they cannot continue as members in view of bar of section 23
abhimanyu
(Querist) 07 August 2013
In that case, may kindly throw light as to what was the need of including "Proviso" in this Section by Haryana Government.
Dr. Jyothi Vishwanath
(Expert) 08 August 2013
Proviso only permits the human members, partners of the firms or shareholders to be the member of the society.
Firm or company is barred from membership but not the members.
abhimanyu
(Querist) 08 August 2013
If a shareholder becomes a member of the society, what will be the legal obligations and liabilities of that Company of which that member is a shareholder. More over, that member can be a shareholder in many companies. What will be their liabilities/obligations.
In case companies will not have any liabilities/obligations, what is the purpose of this PROVISO
Moreover, what is the significance of "member in his individual capacity."
Kindly opine on above issues.
Dr. Jyothi Vishwanath
(Expert) 08 August 2013
Individual capacity means that the shareholder becomes a member in his personal capacity and not as a shareholder of a company. In such a situation, there is no question of any liability or obligation of the company. Even if the person is a shareholder in many companies, it will not affect the company since he is member in the society in his individual capacity.
In short, the company will have no concern with what the shareholder does in his individual capacity.
abhimanyu
(Querist) 08 August 2013
Sir, that is why I raised following query, which is pending reply:
"In that case, may kindly throw light as to what was the need of including "Proviso" in this Section by Haryana Government."
Section 23 would have served the same purpose without PROVISO
V R SHROFF
(Expert) 08 August 2013
Academic Query. Not your personal problem..
Lawyers do not make Laws. only interpret it.
We here cannot Law maker WHY why "what was the need of including "Proviso" in this Section by Haryana Government?
THIS SITE IS NOT FOR DISCUSSION.
PL GO TO FORUM FOR IT.
abhimanyu
(Querist) 09 August 2013
Shroff Sir, This is not an academic query. Problem is being faced on the issue.
This is an interactive platform for Indian public and lawyers and those who do not wish to interact can very well avoid it instead of forcing their view point on others and marking the query as "Academic"
Those from Indian Public and lawyers, who wish to interact on this point without any interest of any kind otherwise are welcome.
Guest
(Expert) 09 August 2013
I endorse the views of Shri Shroff, as I am also of the opinion that the query is purely of academic nature. The question arises, where is a personal problem with any member as may have been included in the query?
In fact, Mr. Abhimanyu is in the habit of raising only academic queries on this section.
Not only that he is also of the habit of issuing directives to the experts to avoid replying on the query who feel the query to be of academic nature, as he has now also stated, "this is an interactive platform for Indian public and lawyers and THOSE WHO DO NOT WISH TO INTERACT CAN VERY WELL AVOID IT instead of forcing their view point on others and marking the query as Academic." He should know that since Shri Shroff wished to interact, only then he has interacted to declare the query to be an academic one.
In fact Mr Abhimanyy is forcing his own view points on experts not to reply on an question which is open for all to reply. On one hand he treats this section as an interactive forum on the other he does not want to face the frank opinion of experts that be against the nature of his query. If he is not able to justify his query, he must refrain from issuing such type of directives to his seniors.
If he feels that the problem is actually being faced on the issue, he should be specific in writing to which society this case is related, what action that society has proposed to take against which member, whether a company or firm or individual, when he became as a member, etc?
Mere a statement that "problem is being faced on the issue." cannot justify his query to be not of an academic nature.
OF COURSE, HE IS QUITE WELCOME TO POST HIS ACADEMIC QUERIES IN THE FORUM SECTION, WHICH REALLY IS AN INTERACTIVE PLATFORM AND THE EXPERTS ALSO PARTICIPATE TO SOLVE SUCH PROBLEMS.
Dr. Jyothi Vishwanath
(Expert) 10 August 2013
I agree with Dhingra jii. The querist must respect the experts first...
prabhakar singh
(Expert) 10 August 2013
If some time liberal attitude or kindness is shown by any expert attending any academic
query of any querist,then querists becomes demanding on those experts who refuse to answer.
What Mr.VR SHROFF remarked is 100% correct.He did not deny you reply.
He simply advised you to come in FORUM
section to discuss intersee.
If a querist understands that being member here, he has right to ask queries,he should equally understand that experts too have their discretion to reply the manner they deem fit to which no querist have any right to to object if answer does not fit in his
frame of conception(i would say misconception,as that would only give
rise to a query).
A querist should also understand that he is looking for a free favor as 'knowledge seeker from those who are in his estimates
are 'knowledge givers'then a silent relationship like GURU & SHISHYA is created
which does have a very rich convention, querists should observe,as BAR is an institution whose participants are juniors and seniors.
Even in cases a querist is not an advocate professional he should weigh things that if he is seeking favor and he is denied,does the incident of denial empowers him to abuse the denier.
We beg courts for relief.Court refuses it.
Does the incident empowers denied party or it's advocate to abuse the court?
Look querist!A beggar comes to you ask for a cash tip which you refuse him.Does your refusal empowers HIM to abuse YOU?
abhimanyu
(Querist) 10 August 2013
Respected experts,
I am extremely sorry and request that I may be excused. I have highest regard for all of you, Sirs.
R.K Nanda
(Expert) 10 August 2013
i fully agree with views of expert Shroff and expert Dhingraji.
Kuummaar AS
(Expert) 11 August 2013
REG. PROVISO
Section 23 of THE HARYANA REGISTRATION AND REGULATION OF SOCIETIES ACT,2012 provides that a partnership firm, whether registered or not, or a body corporate of whatever description, shall not be eligible to be a member of a Society:
Provided that there shall not be any bar for a partner as defined in section 4 of the Indian Partnership Act, 1932 (Central Act 9 of 1932) or a member or share holder of a body corporate to become a member in his individual capacity.
First, let us understand terms used in the above Section:
(1) PARTNERSHIP/PARTNER/FIRM
Section 4 in the Indian Partnership Act, 1932
4. Definition of" partnership"," partner"" firm" and" firm name". Partnership" is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all. Persons who have entered into partnership with one another are called individually" partners" and collectively" a firm", and the name under which their business is carried on is called the" firm name”.
(2) BODY CORPORATE
As per Section 2(7) of Companies Act, 1956, body corporate" or" corporation' includes a company incorporated outside India but does not include-
(a) a corporation sole;
(b) a co- operative society registered under any law relating to co- operative societies; and
(c) any other body corporate (not being a company as defined in this Act) which the Central Government may, by notification in the Official Gazette, specify in this behalf;
Apart from those excluded specifically, a body corporate means any entity that has its separate legal existence distinct from the persons forming it. It enjoys a completely separate legal status. So, a body corporate shall include: a company, a foreign company, a Limited Liability Partnership etc. and such bodies that have separate legal existence
(3) MEMBER OR SHAREHOLDER
At the outset, it is clarified that there is a difference between a member and a shareholder. In fact, every member is a shareholder but not vice-versa. Generally it is assumed that a person holding the shares of a company is a member of the same. But this assumption is not actually correct. A person becomes a member of a company if his name is entered in the register of members of members of that company. That person remains the member of the company up to the time his name is not removed from the register of members of the company. However a shareholder means a person, who is holding the shares of a particular company but has not got the same registered in his name in the membership register of the company. In this particular case he is shareholder of a company but not the member of that company.
(4) INDIVIDUAL CAPACITY
In law, individual capacity is a term of art referring to one's status as a natural person, distinct from any other role. For example, an officer, employee or agent of a corporation, acting "in their individual capacity" is acting as himself, rather than as an agent of the corporation. Thus, their actions, in their capacity as an individual would not generally incur a liability on the part of the corporation, nor would they have any protection from liability for their own actions as an individual.( From Wikipedia, the free encyclopedia)
A member/a shareholder may or may not hold any position in a body corporate. However, if he/she holds any position, there will be difference between his two capacities viz. Individual capacity and official capacity. The Ohio Supreme Court in the recent past examined the difference between “official” and “individual” capacity in Lambert v. Clancy. In Lambert, the plaintiff had previously filed suit against an individual, Hartmann, who held the position of Clerk of Courts in Hamilton County. The plaintiff did not sue Hamilton County or the Clerk of Courts Office, only Hartmann. Moreover, in her complaint, the plaintiff did not use the words “official” or “individual” as to the capacity in which she was suing Hartmann.
Faced with these facts, the Supreme Court answered the question of whether Hartmann was being sued in his official capacity or his individual capacity, and what were the implications of both alternatives. After looking at the complaint, the Supreme Court determined that the facts alluded to the fact that the plaintiff’s claims were directly not at Hartmann individually but rather towards him in his official capacity as Clerk of Courts in Hamilton County. Based on this finding, the Lambert Court then held, “when the allegations contained in a complaint are directed against an office of a political subdivision, the officeholder named as a defendant is sued in his or her official capacity, rather than in his or her individual or personal capacity.” This led the Supreme Court to hold that when an individual is sued in his official capacity, the suit is equivalent or the same as a suit against the political subdivision itself.(http://www.calltherightattorney.com/2013/02/14/suing-political-subdivisions-the importance-of-pleading-official-capacity-versus-individual-capacity/)
(5) DEFINITION OF “MEMBER” AND “ELIGIBILITY CONDITIONS” IN THE HARYANA REGISTRATION AND REGULATION OF SOCIETIES ACT, 2012”
As per Section 2 (xv), member means a person who fulfils the eligibility criteria for becoming a member of a Society, as specified in the Act and has been admitted as a member of the Society in accordance with its Bye-laws
Section 16 contains Eligibility conditions for becoming a member and provides that a person shall be eligible to become a member of Society, if he,
(i) is 21 years of age on the date of admission;
(ii) subscribes to the aims and objects of the Society;
(iii) has deposited the membership fee as prescribed in the Bye-laws
of the Society; and
(iv) is not an insolvent or of unsound mind or have not been convicted
of an offence involving moral turpitude, punishable with imprisonment of one year or more.
CONCLUSION
From the above understanding of the terms used in Section 23 of THE HARYANA REGISTRATION AND REGULATION OF SOCIETIES ACT, 2012, a question definitely arises as to what purpose has been desired to be served by PROVISO in the Section.
The Proviso states that there shall not be any bar for a partner as defined in section 4 of the Indian Partnership Act, 1932 (Central Act 9 of 1932) or a member or share holder of a body corporate to become a member in his individual capacity. In normal day- to- day life, human beings may be/are partner(s) in firm(s), Member(s)/Shareholder(s) in body/bodies corporate. As per Proviso each of such human being can be a member in a society formed under the above Act in his/her Individual Capacity. This means that his/her capacity as an individual would not incur a liability on the part of such firm(s) /body(ies) corporate of which
he/she is a partner(s)/member(s)/shareholder(s) nor would he or she have any protection from liability for his/her own actions from that/those firm(s)/body(ies) corporate. As such, he/she will not differ from that individual, who is a member of the society but is not a partner in any firm or member in/shareholder of a body corporate.
Moreover, use of words “member and shareholder” with respect to body corporate creates confusion because of subtle difference between the two.
Further, the term “Member” has been defined in Section 2(xv) and “Eligibility Conditions” for becoming a member are provided in Section 16 of the Act, which include following two criteria,
(i) is 21 years of age on the date of admission;
(ii) ……………..;
(iii) ……………..
(iv) is not an insolvent or of unsound mind or have not been convicted
of an offence involving moral turpitude, punishable with imprisonment of one year or more.
As the above two criteria are applicable in the case of human beings only, the purpose of Section 23 would have been served without its PROVISO.
IN VIEW OF THE FOREGOING. IT IS FELT THAT THE PROVISO IN SECTION 23 OF THE ABOVE ACT NEEDS REVIEW AS IT APPEARS TO BE REDUNDANT IN ITS PRESENT FORM.
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