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!

CHAPTER VIII

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