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Co-op housing society membership

(Querist) 25 September 2016 This query is : Resolved 
My Late grandfather died without a will leaving behind a flat in a co-op hsg in mumbai. As per the society records the share certificate is still in his name. My father and uncles are also no more. Now we cousins [4 cousins] wants to be the co-owners of the said flat and apply for the membership. However as per the society's information only one of us can me a member whose name will be appeared first and rest 3 will be associate member. Society has also informed that all the society's official communication will be done to the member whose name will be first in the share certificate. what undue advantages the member can take in this scenario. Can he sell the flat or nominate other person without consulting other 3 brothers. What are the remedies [Documentations] for the other 3 brothers so that said flat can be divided among all 4 equally without any dispute.
Raj Kumar Makkad (Expert) 25 September 2016
Associate members have been getting a raw deal all along the inception of the M. C. S. Act 1960.

“Associate member ” means a member who holds jointly a share of a society with others, but whose name does not stand first in the share certificate (Section 2(19)(b) of the M. C. S. Act 1960 and Bye Law No 3 (xxiv)(a))

An individual competent to enter in to contract under the Indian Contract Act, 1872 can be admitted as an Associate Member of the CHS in either of the two ways.

Person whose name appears as a joint owner in the agreement executed under section 4 of the Ownership Flats Act, and by making a joint application along with the original member in the prescribed form and paying entrance fee of Rs 100.[Bye Law No 19A and Appendix No 8]

Person whose name does not appear in the agreement referred to above, by making the application in a form prescribed for such a person to be admitted as Associate member and to make him a joint holder of shares. This application has to accompany a written recommendation of the first member, entrance fee of Rs 100 and the share certificate… [Bye Law No 19 (B) Form in Appendix 7]

As per Bye Law No 19(A) and (B) all applications of Individuals for admission as associate members are to be considered and decided upon by the managing committee.

As per Bye Law No 68 (a)(g) such applications are to be disposed off within three months and in case of failure the applicant automatically becomes an associate member.

Rights of associate members

Bye Law No 25 of Model Bye Laws 2001/2009/2013 (Under Approval *) and Bye Law No 27 of 1984 Model reads as under:

“No associate member shall have any rights or privileges of a member except as provided under Section 27(2) of the Act.”

In other words right of an Associate member as provided under Section 27(2) of the M. C. S. Act 1960 is of voting in the general body meeting in the absence of an original member. He can not become member of the Committee.

(*) http://sahakarayukta.maharashtra.gov.in/SITE/PDF/Rules_Acts_Bylaws/Maharashtra_Co-operative_Societies_Act_1960.pdf

One can see this Model in a Draft form on this website.

There is a strange gate way against Bye Law No 25.

Bye Law No 118 [of Model Bye Laws 2001/2009/2013 ] indirectly concedes the right to Associate to contest the election or to get co-opted to committee by way of laying down 5 conditions which disqualify associate to become a Committee member. This Bye Law reads as under:

“No person shall be eligible for being elected as a member of the Committee or co-opted on it, if :

(i)-(iv) being not relevant not reproduced.

(v) In case of an associate member, non-submission of the no-objection certificate and undertaking, as prescribed under these bye-laws, by the member.
Raj Kumar Makkad (Expert) 25 September 2016

It may be of interest to know that, though definition of member under Section 2 (19)(a) of the M. C. S. Act 1960 says “member” includes a nominal, associate or sympathizer member; no voting rights were conferred on either of the three categories under sub-section 8 of section 27 of the M. C. S. Act 1960. This restriction was partly lifted by deleting the word “associate” from this sub-section (8) under Maharashtra Cooperative Societies (amendment) Act 1969 which now reads as under:

(8) No nominal [associate] or sympathizer member shall have the right to vote and no such Member shall be eligible to be a member of a committee or for appointment as a representative of the society on any other society].
Raj Kumar Makkad (Expert) 25 September 2016
So better to mutually decide the issue so as to avoid future complications in the relationship.
Rajendra K Goyal (Expert) 25 September 2016
Well advised, agree with expert raj kumar makkad.
rajsh (Querist) 25 September 2016
Thanks all expert for the valuable comments. Now what is the solution in this case. Can two of us be member? What are the arrangements needs to be done to avoid future complication. can we have a MOU [Or agreement ]between all four of us stating that the person whose name will appear first cannot sell, deal with third party, nominate without consulting other co-owners? also an indemnity bond from him. Can these documents be submitted to the society and take there acknowledgement.
Please guide us in this matter.
Thanks.
Raj Kumar Makkad (Expert) 25 September 2016
Yes is the sole answer to your subsequent query. You should mutually decide about the value of the property and settle it among yourself accordingly and it can be given to only two.

The required documents should be got enquired from the society.
Ms.Usha Kapoor (Expert) 26 September 2016
Agree with Mr.Makkad.
Rajendra K Goyal (Expert) 26 September 2016
Try for amicable settlement.
Dr J C Vashista (Expert) 28 September 2016
Nothing more to add, very well explained and advised, I appreciate.
Raj Kumar Makkad (Expert) 28 September 2016
Thanks a lot Dr. Vashista for your kind blessings. Kindly keep on encouraging.
Rajendra K Goyal (Expert) 29 September 2016
Thanks expert Dr J C Vashista


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