Members of cooperative housing societies often face disputes relating to membership, maintenance dues, managing committee functioning, recovery, transfer of flats, elections, audit and the day-to-day administration of the society. A common difficulty, however, is identifying the correct authority before filing a complaint.
The Maharashtra Co-operative Societies Act, 1960 provides different remedies depending upon the nature of the grievance. In some matters, the Registrar of Cooperative Societies has statutory powers to issue directions, enforce compliance, conduct inquiries or take action against the society or its committee. In other matters, particularly disputes falling within Section 91 of the MCS Act, the appropriate forum is the Co-operative Court.
Choosing the correct forum is important because approaching an authority that does not have jurisdiction can result in delay and unnecessary litigation.
Co-operative Sector and the Principle of One Member, One Vote
The cooperative movement was developed on the principle that an enterprise should not be controlled merely by the person holding the largest amount of capital. Unlike an ordinary private commercial enterprise, a cooperative society is based substantially on democratic participation.
The principle of “one member, one vote” is one of the important characteristics of the cooperative movement.
In a housing society, therefore, an individual member is not without a remedy merely because the managing committee has taken a decision with which the member disagrees. The Maharashtra Co-operative Societies Act provides several statutory mechanisms through which members can seek redressal.
The Registrar Is Not Merely an Administrative Officer
The Registrar of Cooperative Societies performs several statutory and quasi-judicial functions under the MCS Act.
For example, the Registrar has powers concerning matters such as:
- Admission of members
- Refusal of membership
- Transfer of shares and interest
- Supervision and enforcement of statutory obligations
- Removal of a committee or committee member in appropriate circumstances
- Appointment of a committee or administrator in specified situations
- Inspection of society records
- Audit and rectification of accounts
- Inquiry into the constitution, working and financial condition of a society
- Summoning persons and requiring production of documents in proceedings
- Inspection of the working of a society
The powers are distributed across different provisions of the MCS Act and should not be treated as giving the Registrar unlimited jurisdiction over every dispute concerning a cooperative society.
When Should a Member Approach the Registrar?
Broadly, the Registrar is the appropriate authority where the grievance concerns the statutory functioning, compliance or administration of the cooperative society and the MCS Act specifically confers power on the Registrar to deal with that subject.
Examples may include:
1. Refusal to admit a purchaser as a member
Where a person who is otherwise entitled to membership is refused admission by the society, the provisions relating to membership under the MCS Act may be invoked before the appropriate cooperative authority.
2. Failure to comply with statutory obligations
Section 79 provides powers concerning the enforcement of obligations imposed on a society under the Act, Rules or bye-laws.
Therefore, where a society fails to perform an obligation for which the Registrar has statutory enforcement powers, the member may approach the Registrar.
3. Problems relating to maintenance and recovery
Complaints concerning matters such as improper recovery practices, charging of amounts contrary to applicable provisions, or certain accounting and statutory compliance issues may fall within the Registrar’s administrative or statutory jurisdiction, depending upon the precise nature of the dispute.
However, merely describing a dispute as a “maintenance dispute” does not automatically give the Registrar jurisdiction over every issue. The substance of the dispute must be examined.
4. Failure to constitute or operate a committee
The Act gives the Registrar powers in specified circumstances relating to the constitution and functioning of the managing committee.
Section 77A, for example, contains provisions concerning appointment of members of a committee, a new committee or an administrator in circumstances prescribed by law.
5. Removal of a committee or committee member
Section 78 provides statutory powers concerning removal or supersession of a committee or members of the committee in the circumstances contemplated by the Act.
6. Audit and defects in accounts
The cooperative society’s accounts are subject to the statutory audit mechanism.
Section 81 deals with audit, while Section 82 provides for rectification of defects disclosed in the audit.
Therefore, where the grievance concerns statutory audit or defects in the society’s accounts, the cooperative department has an important role.
7. Inquiry into the affairs of the society
Section 83 enables an inquiry into the constitution, working and financial condition of a society in circumstances contemplated by the Act.
A member who has information suggesting serious irregularities in the affairs of the society may therefore consider approaching the cooperative department with supporting material.
8. Inspection of the society’s working
Section 89A provides powers relating to inspection of the working of a society.
Similarly, Section 80 deals with powers concerning the seizure of records and property in the circumstances specified by the Act and subject to the statutory procedure.
These provisions demonstrate that the Registrar’s role extends well beyond simply maintaining a register of cooperative societies.
What Is the Role of the Co-operative Court?
The Co-operative Court derives its jurisdiction primarily from Section 91 of the Maharashtra Co-operative Societies Act.
Section 91 deals with disputes touching the constitution, management or business of a society where the statutory requirements for invoking the provision are satisfied.
Such disputes can include disputes between:
- the society and its members;
- one member and another member;
- persons claiming through members;
- the society and certain persons connected with its affairs; and
- other parties falling within the scope of Section 91.
The exact applicability of Section 91 depends upon the nature of the dispute and the relationship between the parties.
The important point is that a dispute which falls within Section 91 should ordinarily be taken before the Co-operative Court, rather than attempting to obtain adjudication from the Registrar when the Registrar does not possess jurisdiction to decide that dispute.
Registrar and Co-operative Court: The Basic Difference
A simple way of understanding the distinction is this:
Registrar: Primarily exercises statutory, regulatory, supervisory, administrative and certain quasi-judicial powers specifically conferred by the MCS Act.
Co-operative Court: Adjudicates disputes falling within the scope of Section 91 of the MCS Act.
Therefore, the question should not simply be, “Is this a dispute concerning my housing society?”
The correct question is:
“Which provision of the MCS Act gives jurisdiction to the authority that I intend to approach?”
This distinction can save a member considerable time.
Examples of Matters and the Possible Forum
| Nature of grievance | Possible statutory forum |
|---|---|
| Refusal of membership | Registrar / cooperative authority, subject to the applicable statutory provision |
| Failure to perform a statutory obligation | Registrar, where power is conferred under the Act |
| Audit-related statutory issues | Registrar / cooperative department |
| Inquiry into society’s affairs | Registrar under the applicable provisions |
| Inspection of society’s working | Registrar |
| Statutory action against committee | Registrar, where conditions under the Act are satisfied |
| Dispute between members concerning the society’s business | Co-operative Court under Section 91, where applicable |
| Dispute between society and member falling under Section 91 | Co-operative Court |
| Recovery dispute falling within Section 91 | Co-operative Court |
| Election dispute | Appropriate statutory forum depends on the nature and stage of the election dispute and applicable provisions |
This table is only a practical guide. The exact facts and statutory provision must always be examined before filing proceedings.
Why Members Often Approach the Wrong Authority
A recurring problem is that members approach the Registrar for every grievance against the managing committee.
For example, a member may have a genuine dispute concerning the interpretation of an agreement, recovery of a particular amount, title-related rights, or another dispute falling within Section 91. Merely submitting a complaint to the Registrar does not necessarily convert that dispute into a matter within the Registrar’s jurisdiction.
Similarly, the fact that the Registrar has extensive powers under Sections 77A, 78, 79, 80, 81, 82, 83 and other provisions does not mean that the Registrar can adjudicate every dispute between members.
Section 91 Is Particularly Important for Housing Society Disputes
For housing societies, Section 91 assumes considerable importance because property-related disputes can involve substantial amounts.
A disagreement concerning membership, transfer, society dues, rights of members, management of the society or other matters touching the business of the society may potentially fall within Section 91, depending upon the parties and facts.
The Co-operative Court is therefore an important forum for members as well as societies.
For example, where a society seeks recovery of amounts from a member and the dispute falls within Section 91, the society may have to pursue the appropriate proceedings before the Co-operative Court rather than attempting to use the Registrar’s office as a substitute for the court.
Registrar’s Orders Are Not Necessarily the End of the Matter
The MCS Act also provides appellate and revisional mechanisms against certain orders passed by cooperative authorities.
Depending upon the nature of the order and the applicable provision, an aggrieved person may have a remedy before the Divisional Joint Registrar or another prescribed appellate/revisional authority.
Section 152 contains provisions concerning appeals in specified matters, while Section 154 provides for revision in circumstances contemplated by the Act.
Therefore, before challenging an order, it is important to identify:
- Who passed the order?
- Under which section was it passed?
- Is an appeal provided?
- Is revision available?
- What is the limitation period?
- Which authority has jurisdiction over the appeal or revision?
Can the High Court Be Approached?
In appropriate cases, constitutional remedies under Articles 226 and 227 of the Constitution of India may also be available.
However, the existence of a High Court remedy does not mean that every cooperative dispute should immediately be taken to the High Court.
Where the MCS Act provides a specific statutory remedy, the existence and adequacy of that remedy are important considerations. The availability of a writ remedy depends upon the facts, the nature of the order challenged and the principles governing judicial review.
Expulsion of a Member: An Example of Registrar’s Role
Expulsion of a member provides a useful example of the statutory role of the Registrar.
Where the requirements of Section 35 of the MCS Act are fulfilled, including the prescribed majority and statutory procedure, the resolution for expulsion is required to be submitted to the Registrar for approval.
The society therefore cannot simply treat the passing of a resolution as automatically completing the expulsion process.
This illustrates the broader principle that the managing committee and general body must act within the framework of the MCS Act, Rules and registered bye-laws.
Managing Committee Decisions Are Also Subject to Statutory Control
The managing committee is responsible for administration of the society, but its powers are not unlimited.
A committee cannot assume powers that the Act, Rules or bye-laws do not confer upon it.
Where the committee fails to perform a statutory obligation, the member may have a remedy before the Registrar where the relevant provision gives the Registrar enforcement powers.
Where the issue instead constitutes an adjudicatory dispute falling within Section 91, the member may need to approach the Co-operative Court.
A Practical Approach for Members
Before filing a complaint, a member should prepare a short factual chronology.
The following documents should preferably be kept ready:
- Society’s registration details
- Relevant correspondence with the managing committee
- Copies of notices issued by the society
- General body resolutions
- Managing committee resolutions, where available
- Maintenance bills and receipts
- Share certificate and membership documents
- Relevant agreements
- Copies of the registered bye-laws
- Audit reports, where relevant
- Photographs or other evidence supporting the grievance
- Any reply received from the society
The member should then identify the specific statutory provision governing the grievance.
Instead of merely writing, “The society is acting illegally,” the complaint should explain:
what the society has done, which provision is allegedly violated, what evidence supports the allegation, and what relief is being sought.
This makes the grievance substantially clearer.
Registrar or Co-operative Court? Ask This First
The most important lesson is that every grievance against a housing society does not automatically belong before the Registrar.
If the matter concerns a statutory obligation for which the Registrar has been given powers under the MCS Act, the cooperative department may be the appropriate forum.
If the matter is a dispute touching the constitution, management or business of the society and falls within Section 91, the Co-operative Court may be the appropriate forum.
In some situations, both statutory mechanisms may appear relevant, but they serve different purposes. The precise relief sought and the statutory provision under which that relief is available are therefore crucial.
Conclusion
The Maharashtra cooperative law provides members with several mechanisms to protect their rights. The Registrar of Cooperative Societies has significant statutory powers concerning membership, committee functioning, audit, inquiry, inspection and enforcement of obligations. The Co-operative Court, on the other hand, is the specialised forum for disputes falling within Section 91.
The key is not merely to approach the cooperative department or the court, but to approach the correct forum under the correct statutory provision.
A member facing a dispute should therefore first identify the nature of the grievance, determine the relevant section of the MCS Act, examine the jurisdiction of the proposed forum and then seek the appropriate remedy.
