Many cooperative housing societies (CHSs) embark on self-redevelopment with the expectation of greater transparency and cost savings. However, as seen in one case this week, members are struggling to access key documents such as the feasibility report and development manager (DM) contract, despite a registrar's order. They also face demands for payments before allotments, a lack of Real Estate (Regulation and Development) Act (RERA) registration and pending bank loan approvals—all raising serious concerns.
Another issue involves the resignation of a cooperative housing society (CHS/the Society) via WhatsApp, leading to confusion over its validity and whether the managing committee (MC) can appoint a replacement internally. With conflicting opinions on whether a joint secretary can take over or if a general member can step in, clarity on the legal process is crucial.
Finally, a missing flat-owner has left his wife and child without access to property documents, creating hurdles in repaying the home loan and transferring ownership. With no nomination in place and potential legal heirs from a second marriage, the situation is further complicated. Read on for expert insights into these issues and the best legal remedies available.
Problems Faced with Self-Redevelopment
Question: I believed that self-redevelopment would be a fully transparent process for CHS members. However, the feasibility report and DM contract agreement have been denied, raising doubts among members.
A complaint was sent to the registrar and an order was issued directing the Society to share the documents. However, the office bearers have remained silent, neither communicating with members nor complying with the registrar's order. The Society also passed a resolution in the general body meeting (GBM) with a majority vote, despite objections from some members.
Additionally, the Society has:
- Demanded 10% payment for extra area offered beyond the free allotted area, even before conducting a lottery system for allotment.
- Obtained approval for 1 floor space index (FSI), with an intimation of disapproval (IOD) received accordingly for the free allotted area, but has not disclosed the sale area in the plans.
- Not yet registered the project under RERA.
- Not received final bank loan approval due to objections from non-consenting members.
- Asked members to execute the permanent alternate accommodation agreement (PAAA) and pay an additional 20% upfront while seeking consent for a revised feasibility report and DM contract—without providing copies of these documents.
What legal options do members have to obtain these documents in a self-redevelopment project?
Answer: You have not provided specific details regarding the plot area, its status, the building's condition, or the number of members involved. While technical grounds may be substantial, they do not guarantee a successful challenge, unless supported by strong facts and some level of member backing.
Courts generally consider the building's condition and the majority's decision. If you believe you have a valid legal case, you should consult family members and/or legal counsel before proceeding. Given the time and costs involved in seeking legal remedies, it would be advisable to carefully weigh all options before taking further action.
Contention over Secretary's Intention To Resign over WhatsApp
Question: Our Society secretary has expressed his desire to resign via a WhatsApp message. The current managing committee (MC) was elected in July 2023 and is trying to convince him to stay.
As a regular member, I have the following queries:
1. If the secretary formally resigns, what do the Society's bye-laws prescribe? Can a WhatsApp message be considered a resignation, or is a formal written resignation required?
2. Some members say the MC can internally promote another member to secretary without involving the deputy registrar of cooperative societies (DRCS). Others suggest that the MC can appoint a joint secretary to take over the role.
3. Some members believe that a regular member of the CHS can be appointed as secretary or another office-bearer in such cases.
4. Is it possible for the MC to manage this internally without involving the DRCSr? What would be the best legal course of action under the Society by-laws?
Answer: While the secretary has expressed his intention to resign, he has not yet submitted a formal resignation letter. It is important to note that a resignation must be formally tendered in writing and accepted by the MC for it to take effect. A WhatsApp message alone is not sufficient.
Since the resignation has not been formally submitted or accepted, there is no immediate need for further action. The MC can attempt to resolve the issue internally and encourage the secretary to continue. If a formal resignation is eventually submitted and accepted, the MC will need to follow the Society's bye-laws regarding filling the vacancy, which may involve either appointing a current MC member as secretary or holding an election if required.
Here is what the CHS bye-laws say...
- The secretary of the Society may resign his office as secretary by a letter addressed to the chairman of the Society.
- The secretary's resignation will be effective only after its acceptance and handing over the charge to the newly elected secretary, as the case may be.
- The MC may accept the resignation of the office of the secretary only after it is satisfied that the secretary of the Society has brought up to date the work entrusted to him and has produced the entire papers and property of the Society, in his possession before the committee.
- The MC may fill a casual vacancy on the committee by nomination out of the same class (general/reserved category) of active members in respect of which the casual vacancy has arisen as per section 73 CB and as per the instruction issued by the state cooperative election authority.
Transfer of Flat When Owner Is Absconding or Missing
Question: My mother and I live in a flat owned by my father who has been absconding since January 2020. He is living with his second family, but we have no knowledge of his whereabouts—we only see updates on his Facebook.
Fearing societal shame, my mother has not filed a police report. Meanwhile, I manage all household expenses, including bills and maintenance fees. The flat is mortgaged, originally with Citibank (now under Kotak). While we are discussing loan repayment with the Bank, I do not have access to any original property documents, share certificates, or proof of stamp duty payments.
How can I:
a) Repay the loan and obtain the documents without my father?
b) Transfer ownership to my mother and me, given that he has not filed a nomination with the Society?
Answer: Given the circumstances, it would be prudent to consider lodging a police complaint to safeguard your interests.
Even if the loan is repaid, obtaining the original documents from the Bank may require either a police declaration regarding your father's status or a ruling from a competent civil court. Your mother may also have legal options to seek appropriate relief through the courts.
Additionally, due to recent amendments, a nominee is now considered a trustee rather than the absolute owner. Since no nomination has been filed, potential legal heirs—including any children from your father's second marriage—may have claims to the property.
Given these complexities, I strongly recommend consulting a competent civil lawyer at the earliest to explore your legal options.
NOTE
We will not be answering queries posted in the comments. Only questions sent through the Moneylife Foundation's Legal Helpline will be answered. If you want to seek guidance or ask questions to Mr Shanbhag, kindly send it through Moneylife Foundation's Free Legal Helpline. Here is the link: https://www.moneylife.in/lrc.html#ask-question
Disclaimer: The guidance provided in these columns and on our Legal Helpline is on the sole basis of the facts provided by the reader/questioner and does not amount to formal legal advice in any form whatsoever.
(Shirish Shanbhag has an MSc in Organic Chemistry, a Diploma in Higher Education, and a Diploma in French and has completed his LL.B. in first class in 2021. Before his retirement, he was a junior college teacher at Patkar College from July 1980 to May 2012, teaching theoretical and practical chemistry. Post-retirement in 2012, he started providing guidance and counselling to people on several issues, specifically focusing on cooperative housing society-related matters. He has over 30 years of hands-on experience in all matters about housing societies and can provide out-of-box solutions for any practical issue.)
