essgeepee (prop) 28 June 2011

Section 29 (2) of Maharashtra cooperative Society ACt

I am planning to buy a flat in a society in Greater Mumbai. The facts of the case are as follows:

1. The flat was purchased by the current owners directly from the builders on January 31st 2006

2. The building was given Full Occupancy on Oct 20th 2007

3. The society was formed on November 1st 2010

Now the society is saying that the current owner cannot sell the flat till November 1st 2011 citing Section 29 (2) of Maharashtra Co-operative Societies Act, 1960 (MCS Act) :

A member shall not transfer any share held by him or his interest in the capital or property of any society, or any part thereof, unless -

(a) he has held such share or interest for not less than one year

They are suggesting that we do the sale agreement and also register the deed. Additionally they are asking me (the buyer) to take an irrevocable PoA from the buyer to get the shares transferred in my name post November 1st 2011.

My query is as follows:

1. Since the member is holding the flat since Jan 31st 2006 is Section 29(2) applicable to him

2. If yes, is PoA the correct route

3. If no, how can we convince the society that the rule is not applicable. Can we get the registrar of societies to help

4. If the Society's position is correct should I go for the PoA route ; if so what are the risks I need to cover

Thanks

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6 Replies

AMIT SANKLECHA (Property & Corporate LAw Consultant) 30 June 2011

Hello

As per Sec 29(2) of MCS ACT, if there is a lock-in period the shares can't be transferred & if irregards of this provision any Agreement is executed would be void, irregards of the Irrevocable POA from seller.

The Seller shall have a right to challange the Irrevocable POA, under the claim that all such Agreements shall be declared Null & void as there is a lock-in period for transfer of share.

Thus if the original owner is in the possesion of the flat from 2006, the time elapsed itself satisfies the requirement of the clause. You can check the same by Verifying the Memorandum & Articles of Association of your society. Thus if such is the case there won't be any hindrances in any transfer of the said flat. For being on a safest side you can even Execute Registered Irrecovable POA before Registrar of Assurances.

Hope this Clarifies.

Regards

Amit Sanklecha

1 Like

essgeepee (prop) 30 June 2011

Amit ji

Thanks. I have just one clarification, while the seller owns the property since 2006, the society has been formed only in Nov 2010 and therefore 1 year has not been completed in this case as per the society's Management Committee. Is this asserstion of the Committee tenable; if not what is the mechanism to redress the situation. Should the current owner request the registrar to issue an order to the Society

regards

AMIT SANKLECHA (Property & Corporate LAw Consultant) 30 June 2011

Hello SP

Wwe need to check the Set of rules & regulations of the society to get the exact idea, whether is there any way out of the same. so that we can escape the Legal Dilemas & can posses a property having a good & free title.

Regards

Amit Sanklecha

essgeepee (prop) 30 June 2011

Amit ji

Thanks. I will send you a PM to get a better idea on how to take this forward

JIMIT SHAH (HEAD- ACCOUNTS) 04 September 2012

My client has a flat in his name as joint owner with his father.

His Father passed away.

HE has two sisters, both are marrried.

What are the documents required to submit the co-op society to transfer the flat in his name? Also, Which sections of the Act are relevant in this case?

Kindly let me know.

weettute (sd) 07 September 2012

Amitji

My brother has purchased a resale flat in Pune in Dec. 2007. The Society was already registered in June 2007. My brother failed to check the requirements as per bye law No 38 of model bye laws stated to have been adopted by the society. Now my brother has approached the society for transfer of shares which stand in earlier owner's name and are still in possession of the scoeity. Is the society's demand of Transfer premium of Rs. 25000 and Tr. fee of Rs. 500 justified. Pl guide.

thanks

MAQ