Non-compliance of mandatory provisions of law and its repercussions:

Ashok Kuvadia (Querist) 23 July 2013 This query is : Resolved
NON-COMPLIANCE OF MANDATORY PROVISIONS OF LAW AND ITS REPERCUSSIONS:

(01) Dear Experts, in anticipation I am thankful to all of you for giving me your valued Opinion, which helps a lot to people like me who are fighting for Justice and their Rights in person and gives moral supports too.

(02) I have filed a Dispute at Co-operative Court, Mumbai, appearing in person since last Seven years, against my Society which is Co-operative Ownership Housing Society.

(03) The Committee elected on 28.07.2005 of our Society did not executed Indemnity Bond within 15 days, which otherwise mandatory as per Section 73(1AB) of the Maharashtra Co-operative Societies Act 1960, to execute till 12.08.2005.
Section 73(1AB) of the Maharashtra Co-operative Societies Act 1960 is read as under :
"The Members of the Committee shall be jointly and severally responsible for all the decisions taken by the committee during its term relating to the business of the society. The members of the committee shall be jointly and severally responsible for all the acts and omissions detrimental to the interest of the society. Every such member shall execute a bond to that effect within fifteen days of his assuming the office, in the form as specified by the State Government by general or special order. The member, who fails to execute such bond within the specified period i.e. within fifteen days from joining the Managing Committee member, shall be DEEMED TO HAVE VACATED HIS OFFICE AS A MEMBER OF THE COMMITTEE."
Rule 58-A of the Maharashtra Co-operative Societies Rules 1961 is read as under :
"Every elected member of the Managing Committee shall execute a bond in Form M-20 within fifteen days of his assuming the office. Such bond shall be executed on the stamp paper as provided under the Bombay Stamp Act 1958. The expenditure on stamp paper shall be borne by the society. The Chief Executive Officer / secretary of the society shall receive such bonds and keep them on record of the society and accordingly inform the Registrar within Fifteen days from the formation of the Committee."

(04) Without execution of Indemnity Bond they executed Development Agreement and Irrevocable Power of Attorney giving Development Rights to a builder on 17.06.2006.

(05) I believe, in view of the non-execution of the Indemnity bonds in form M-20 within the period prescribed by Sec. 73 (1AB) of the M.C.S. Act 1960, the committee members, from 13.08.2005, had ceased to be the members of Committee and they incurred automatic disqualification by operation of law. It is a settled law that the provision u/s 73 (1AB) is mandatory, salutary and imperative and not the directory since the section itself provides the consequences of automatic disqualification by operation of law for its non-compliance.

(06) I believe that, therefore, Development Agreement & Irrevocable General Power of Attorney executed on 17.06.2006 becomes illegal, null & void.

(07) Due to non-compliance of said statutory provisions Deputy Registrar of Co-operative Societies suspended the Committee on 18.04.2007 (i.e. after execution of documents to builder).

(08) Due to Cardiac problem I could not file my final Written Argument and Court dispose matter rejecting my all plea (issues).

(09) In impugned order, Ld. Judge did not declare Development Agreement & Irrevocable General Power of Attorney as illegal, null & void by holding that--
(a) It can be deemed that Chairman & Secretary have vacated the office of the managing committee of society.
(b) However, the execution of documents to builder was during the period when they were holding the post of Chairman & Secretary (i.e. before suspended by Dy. Registrar). Therefore in view of the act done in good faith by any person appointed, shall not be invalid merely by reason of the fact that his appointment has been cancelled by or in consequence of any order subsequently passed under this act, rules and the bye-laws.

MY QUERY:

In view of the above facts & circumstances--
(a) Chairman & Secretary had ceased to be the members of Committee and they incurred automatic disqualification by operation of law u/s 73 (1AB) which is mandatory, salutary and imperative and not the directory. Do they have any power to execute any documents to builder giving development rights?

(b) Development rights given by such disqualified persons to builder are valid and legitimate?

(c) The holding of Ld. Judge that though deemed that Chairman & Secretary have vacated their office, however, the execution of documents to builder was during the period when they were holding the post of Chairman & Secretary (i.e. before suspended by Dy. Registrar). Do these holdings of Ld. Judge that Chairman & Secretary were holding the post, though disqualified by statute, are valid and legitimate?

(d) Not declaring Development Agreement & Irrevocable General Power of Attorney executed on 17.06.2006 as illegal, null & void by Ld. Judge is valid and legitimate?

(e) Is my holding above in Pt.:(06) that, documents executed on 17.06.2006 becomes illegal, null & void; is valid and legitimate?

(f) Any other suggestion?

N.B.: Since I have kept my Query to limited issue only, therefore not explaining about whole matter.

Thanking all in anticipation, once again.

Ashok.
(ashok.kuvadia@gmail.com/098691 02755)

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