Saturday, 23 March 2013

New MCS ACt -Overview

New MCS Act  - Overview
  1. Empower active members. Non-serious participants cannot participate in decision-making.
  2. Expel dormant members or force them to become active.
  3. No Administrators. Active members will be “authorized officer” or “interim committee”.
  4. Regular training to groom fresh leaders through Apex Cooperatives.  Allocate funds for that.
  5. The managing Committee must attend training at least once in five years.
  6.  Stop washing dirty linen in co-op. Court. Resolve internal differences  through “Grievance Redressal Committee”.
  7. Co-op. Court to encourage Win-Win compromise. Not Win-Lose “Justice” in private dispute resolution.
  8. Get professionals help for management… Adopt modern methods of management, record keeping etc.
  9. Strengthen Audit function.  Stop Crime!  Auditors, Registrar etc. to pinpoint responsibility for fraud and Register FIR.
  10. Realistic penalties for offences. Fine and prison sentences have increased.

Strict Audit & Reporting
  Accounts to be audited at least once in each financial year… before AGM notice
  Auditor or auditing firm from a panel approved by State Govt
  The auditor shall lay the audit report before the AGM
  Every society shall file audited annual returns within six months of the close of every financial year to the Registrar or to the person authorized. 
  Read Sec 79 and Sec 81

New MCS Act - Tough on Crime!
Audit, Inquiry, Inspection & Supervision
81. Audit.--
1 (e) The auditor’s report shall have:
     (i)            All particulars of irregularities observed in audit… the auditor/auditing firm shall investigate and report the modus operandi… fix the responsibility for such misappropriation or embezzlement of funds or fraud, on the members of the board or the employees of the society… with all necessary evidence.

146. Offences
(a) Any member of a society transfers any property or interest in property in contravention of sub-section (2) of section 47 …
(d) Any person, collecting share money for a society information, does not within a reasonable period deposit the same in the State Co-operative Bank…
(g) … Officer or member willfully makes a false return or fails to furnish a return under section 75 or 79 of the Act, or furnishes false information to a person holding an inquiry under section 83, an officer authorized under section 88

147. Punishments…
Every society, officer or past officer, member or past member, employee or past employee of a society, or any other person, who commits an offence under section 146 shall, on conviction, be punished-
(a) If it is an offence under clause (a) … imprisonment for … six months, or with fine … five hundred thousand rupees;
(b) If it is an offence under clause (b) … imprisonment which may extend to three years, or fine … five fifteen thousand rupees;

Elections to be monitored closely
73-E.  State Co-operative  Election Authority:
Superintendence, direction and control of the preparation of the electoral rolls…
and conduct of… every election of the members of the board and of the office bearers

No Administrator
  In a society not having any government grant or loan, no Administrators will be appointed.
  In a Society has government aid, the Administrator can be appointed maximum for six months. 
  After 6 months, elections must be held.
  Provisions are in Sec. 78 and 78-A

Active Member
  Only active members can vote in the affairs of the society including elections.
  Non-active member cannot contest election.
  Member who does not attend at least one general body meeting and pay maintenance for at least one out of five years to be classified as “non-active member” (See Sec. 26 & 27)
  Non-active member liable for expulsion & eviction from flat after 10 years

Dispute Redressal Committee
  Committee to settle disputes of members & society within 3 months.
  3 active members -- knowledgeable & senior,  preferably experts whom general body considers impartial
  Aggrieved to submit written application along with documents relied upon. 
  Assist the parties in an impartial manner to reach an amicable settlement within the framework of the Acts, Rules and Byelaws
  Sign Grievance Settlement Agreement
  Read Sec 89AB


  1. Is it compulsory to pay Festival Charges for NRI members raised in the AGM by the managing commitee of a co-op housing society in Maharashtra ?

  2. It is depends upon the how the resolution is pass in AGM and is it approved by Registrar of C.S.

  3. subject to compliance of law re meeting resolution and approval. or else member has to file dispute u/s 91 in co op court

  4. Dear Sir,
    We have a comercial shop in co operative housing society my question to you is the society has build a wall in front of the shop the wall originally did not exist additionally they park the society car in front of the shop causing inconvenience to customers is there any way legally which we could ask them to move the car and break the wall and have an enterance gate instead

    1. First check your original approved Plan by local municipal body. If in plan wall is approved & in front of shop parking is shown the you can not do anything. But if not then you can file case against municipal body and society

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  7. Dear Sir,
    Can you explain the criteria of appointment of two special director in addition to 19 elected directors. Can we use voting right for there selection.

  8. Dear Sir,
    Can you explain the criteria of appointment of two special director in addition to 19 elected directors. Can we use voting right for there selection.


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