Co-operative Housing Society Loan Validity Explained

Querist : Anonymous (Querist) 29 March 2020 This query is : Resolved
A CO OPERATIVE HOUSING SOCIETY REGISTERED IN PUNE HAS TAKEN A LOAN FROM BANK ON THE FIXED DEPOSITS WITH THE SAME BANK. THE LOAN IS 54 LAKHS. COMMITTEE HAS PASSED A RESOLUTION FOR THIS PURPOSE . THIS WAS NOT PASSED IN SPECIAL GB MEEETING . IS IT VALID RESOLUTION ? CAN COMMITTEE FACE CHARGES FROM REGISTRAR OFICE AND UNDER WHICH BYE LAW OR PROVISIONS OF M S CO OP SOCIETIES ACT ?

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KISHAN DUTT KALASKAR (Expert) 29 March 2020
Dear Sir,
If any rule or bye is violated only on co plaint to the Registrar then only action will be initiated. Please be informed that no suo motto action will normally will be initiated.

Isaac Gabriel (Expert) 29 March 2020
Seems a question paper.Furnish full details.

Hemant Agarwal (Expert) 29 March 2020
1. The objectives of a Coop. Housing Society (CHS), is not to conduct any commercial business or take loan and has to manage it affairs ONLY from the funds generated from within the members.

2. Hence taking an Loan, is illegal & unauthorized and the Bank too has committed an offence granting Loan to a CHS, without the written approval of the Coop. Registrar.

3. The Coop. Registrar grants permission to take Loan only for Redevelopment Projects of Society, that too on individual members liability and not on the Society's accumulated Funds, wherein the members individually become liable for payment of interest on such loan.

Keep Smiling .... Hemant Agarwal
VISIT: www.chshelpforum.com

Rajendra K Goyal (Expert) 29 March 2020
1. Whether byelaws of the society confer powers to borrow?
2. If yes, for what purpose loan can be taken as per byelaws?
3. What procedure to be followed by the society as per byelaws?
4. Whether resolution to be passed for such loan as per byelaws?

Rajendra K Goyal (Expert) 29 March 2020
For what purpose loan was taken, you have not informed, and whether the purpose was approved in the general meeting / committee.
Whether the loan amount was used for the purpose for which it was taken?
Whether Registrar Office has sent any notice in this respect?
How are you concerned whether as a member sniffing irregularity or as office bearer of the society?

Raj Kumar Makkad (Expert) 29 March 2020
Are you member of that society?

If yes then you might be aware of the bye-laws of that society,

If yes, then you might have also gone through the resolution passed by the committee for obtaining loan and its purpose,

If yes, then kindly go through all those documents and then only post your query if required.

Dr J C Vashista (Expert) 30 March 2020
The author is "anonymous" and failed to respond to the quires raised by expert, which are relevant and important for forming proper opinion and oblige, hence it is presumed that it is a time pass academic question paper.

Dr J C Vashista (Expert) 30 March 2020
The resolution passed by Managing Committee of the cooperative society is valid, if the loan is obtained for "public" purposes.
What is your locus standi / concern qua the resolution passed by MC and loan taken by and for the Society ?

Sudhir Kumar, Advocate (Expert) 30 March 2020
please read society constitution.

P. Venu (Expert) 30 March 2020
The facts, as posted, are less than convincing.

Rajendra K Goyal (Expert) 30 March 2020
In case of need, the author can write to society to make available to him the copies of required documents, if he is a member.

T. Kalaiselvan, Advocate (Expert) 30 March 2020
This appears to be a hypothetical question.
Expert Mr. Hemant Agarwal has given clear picture that no such loans can be granted.
Hence let the author state that this is a fact then suggestions can be rendered to overcome the problem legally.

Rajendra K Goyal (Expert) 31 March 2020
Loan can be taken for addition / alteration / repairs of common area like four walls, pacca floor in open space, lifts change etc. provided bylaws provide for it, AGM resolution, Municipality approval and completion of of other required formalities.

Rajendra K Goyal (Expert) 31 March 2020
Loan can be taken for addition / alteration / repairs of common area like four walls, pacca floor in open space, lifts change etc. provided bylaws provide for it, AGM resolution, Municipality approval and completion of all other required formalities.

Raj Kumar Makkad (Expert) 31 March 2020
The requirement of the loan might have been mentioned in the resolution, the validity of which is under challenge by you. Elaborate it contents.

Raj Kumar Makkad (Expert) 31 March 2020
The validity of the said resolution can be judged only when the bye-laws of the said society are read simultaneously but unfortunately the same have also not been put by you before the experts so your subsequent question can also not be replied as desired.

Raj Kumar Makkad (Expert) 31 March 2020
As per general law, taking loan by the society for the upliftment of the society maintenance or purchasing additional space for the parking or the other common use of the members of the society can definitely be obtained.

Rajendra K Goyal (Expert) 31 March 2020
Agree with the advice from expert Raj Kumar makkad ji, Power as per bylaws with other required formalities are basic raw material to decide validity of the loan.

P. Venu (Expert) 31 March 2020
The power and authority of the CHS emanates from the law enacted by the Legislature, not the by-laws drawn up by its general body. The by-laws of the CHS can only supplement the legislative enactment not supplant.

Raj Kumar Makkad (Expert) 31 March 2020
A layman and why only layman but lawman also pay much regard to bye-laws of the society because those get registered under the enactment which Mr. P. Venu has indicated.

Raj Kumar Makkad (Expert) 31 March 2020
A General House of a Society may adopt bye-laws as their sweet whims and wishes but if it has to get the same registered as per specific Actt prevalent in that State then it shall be bound to amend the bye-laws strictly in consonance with the enactment. So raising question mark over the bye-laws by any expert is not understood.

Rajendra K Goyal (Expert) 01 April 2020
The loan is regular or not depend on:
i) Purpose of loan
ii) Power under bylaws
iii) Resolution of AGM
Proper enduse of loan is another essentiality.

Rajendra K Goyal (Expert) 01 April 2020
Enactment from legislation is main source of power for borrowing, bylaws have the support from legislation. Any activity not in accordance with the legislation or bylaws can not be legal / regular.

Co operative housing society

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