It’s a Positive
amendment & Good News for the Managing Committee of Housing societies.
The M-20 Bond which was earlier required
to be executed within 15 days by the members of the Managing Committee of the Co-operative Housing
Societies has be amended and now it is required to be filed within 45 days from the date of their assuming the office under
the Maharashtra Co-operative Societies Act 1960 w.e.f 14th January 2011 says Adv. R. P. Rathod.
The provision is important because if the bond is not
executed within 45 days from the date of their
assuming the office whichever is earlier or if the member fails to execute the bond he shall be deemed to
have vacated his office as a member of the Managing Committee.
The legislature having truly
experienced and realized that the members
of the Managing Committee of different
co-operative societies were acting in an arbitrary manner, with a view to have
some accountability amongst the members of the Managing Committee, have enacted
a provision in the Maharashtra Co-operative Societies Act, 1960
mandating every member of such Managing Committee to execute a bond within 15 days (Now within 45 days
w.e.f. 14/1/2011) from their assuming the office.
If the committee
member fails to execute the bond within the specified period, then such member shall be deemed to have been vacated his office as member of the
Committee. This provision has been given effect by Section 73(1AB) of the Maharashtra Co-operative Societies Act, 1960.
This legislation was recently challenged by a Writ Petition filed in the Bombay High Court (Writ Petition No. 457 of 2007) under Article 226 of the Constitution of India on the ground that the same is ultra virus. However, the Bombay High Court has upheld the legislature’s Act.
The intention
of the legislature is to make the
members fully aware of their personal responsibility and liability
towards the society and its members. The time limit laid down
under Section 73(1AB) is mandatory
and the elected committee members have to hand over the bond to
the Deputy Registrar of Co-operative Society within such stipulated time.
This ruling of the Bombay High Court in the aforesaid writ petition
emphasizes the basic principle of "ignorance of law is not an excuse"
i.e. being unaware of the provision contained in Section 73(1AB) of the Maharashtra Co-operative Societies Act, 1960 cannot be
used an excuse for the failure to
execute the bond within the stipulated time.
There are several
instances of disgruntled members filing cases against the Managing Committees for not having executed the mandatory bonds to derail the process of
redevelopment.
The Managing Committee may even get caught or be
slapped with fraud and forgery charges for entering into any redevelopment agreement with the builders
as has happened with a Co-operative Housing Society on the Hill Road in Bandra,
Mumbai.
Now what happens to many housing societies, where Managing Committees are unaware, ignorant
or have simply ignored or not bothered about the bond? In such cases, the Office of Registrar Co-op Societies dismisses the
committee, appoints an Administrator and call for fresh elections either suo-motto after inspection or on
complaint by any member says Adv. R. P. Rathod
The member who fails to execute such a bond within the specified period shall be deemed to
have vacated his office as a member of the committee. Bombay High Court too has upheld this provision of Maharashtra Co-operative Societies Act, 1960.
"The members of the Committee shall be jointly and severally liable for making good any loss which the society may suffer on account of their negligence or omission to perform any of the duties and functions cast on them under the Act, Rules and Bye-Laws of the Society."
In addition to the above Bye-Laws, an amendment was inserted by Maharashtra 41 of 2000, S. 3 of the amending Act (w.e.f. 23-8-2000) to Section 73 by introducing Section
(1AB) to the Maharashtra Co-operative Societies Act 1960.
Similarly Rule 58-A was inserted by G.N. of 18-2-2002 in the Maharashtra Co-operative Societies Rules, 1961 and Form M-20 was also inserted by G.N. of 18-2-2002.
"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 forty five 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, shall be deemed to have vacated his office as a member of the committee."
Further, the power to decide whether the losses
incurred by the society are due to act or omissions of members of the committee is given to the Registrar "Provided that, before
fixing any responsibility mentioned above, the Registrar shall inspect the
records of the society and decide as to whether the losses incurred by the society are on account of acts or
omissions on the part of the members of the committee or on account of any natural calamities, accident or any
circumstances beyond the control of such members."
"Every elected member of the Managing Committee
shall execute a bond in Form M-20 within forty five 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 45 days from the formation of the Committee."
It is clear from above that the bond must be executed within 45 days of assuming of office by each member of the Managing Committee in Form M-20 on a stamp paper. Failure will invite penal consequences concludes Adv. R. P. Rathod
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