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Operation of "Proposed" CHS bank a/c

(Querist) 18 April 2010 This query is : Resolved 
Our buider had registered our CHS on 30-Apr-2004 but had concealed the fact till 11-Oct-2009 when he was forced to call the FGM and constitute a managing committee to run the Society.

For over 5½ years since 30-Apr-2004, the builder was charging a flat maintenance rate from members and operating out of a bank account very similar to the registered society's name, but with a "Proposed" annexed to it [XYZ CHS Limited (Proposed)].

Recently it came to our notice that the "Proposed" a/c is still active and the builder is debiting expenses unrelated to the real Society's.

My questions are:

(a) Is it legal on the part of builder to operate a "Proposed" bank a/c after the registration of the real Society on 30-Apr-2004?
(b) Is it legal for the builder to debit unrelated expenses out of a "Proposed" account after constitution of a managing committee on 11-Oct-2009 (and without the managing committee's approval)?
(c) Does the managing committee have the rights to instruct the bank to freeze the "Proposed" bank a/c?
(d) What is the legal remedy available to recover amount lost from the account after 11-Oct-2009 (date of constitution of managing committee)?
(e) Can the managing committee instruct the bank to transfer the balance to the Society's a/c and what is the correct procedure?

Please advise.
Uma parameswaran (Expert) 18 April 2010
A) B) C)and E) Depends upon the rights put up on the committee at the time of constitution of the committe.
D) Give a notice to the builder.
M S Prabhakar (Querist) 18 April 2010
Thank you, Uma. I was told by a Chartered Accountant friend that "Proposed" a/c is a special account that can be operated actively only so long as the main entity is NOT registered or constituted. In this case, the main entity (XYZ CHS Limited) was registered on 31-April-2004 and the managing committee was constituted on 11-Oct-2009. But the "Proposed" a/c [XYZ CHS Limited (Proposed)] is being actively operated by the builder till date.

Is this not a criminal offence by the builder to continue operating an account (without permission, of course) which is deceptively similar to a legally valid account?


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