Vinod Sampat on Redevelopment Projects, Landmark Judgements and Common Mistakes

Advocate and property expert Mr Vinod C Sampat while speaking at a seminar organised by Moneylife Foundation in Mumbai on 12 November 2011.

Tips on selecting builder for redevelopment projects. He insisted that the process should be transparent, and advised that housing society members should have legal and technical consultants to interact with the builder. Also, it is important to check the builder’s credentials and financial conditions, he said.

Landmark judgments related to cooperative societies and explained new rules which have been framed and laws which have been struck down. He also talked about several laws by virtue of which officers concerned can be made accountable for delays and even be penalized.

He said not many people are familiar with the workings of the cooperative housing societies, and are left confused while dealing with a variety of civic and legal compliances. He pointed out that most cooperative housing society members do not check the several financial aspects related to cooperative housing societies; and end up paying extra charges for several things, and at times, defaulting on necessary payments.



2 thoughts on “Vinod Sampat on Redevelopment Projects, Landmark Judgements and Common Mistakes

  1. Greetings of the day. Hope all is well.

    At the outset, I am sorry to have troubled you with this long mail but your reply to this mail shall be of immense value for several residents who are senior citizens and others who are seriously concerned about the utilization of their hard earned money.

    A Special General Body Meeting of the society was on November 21 2010 wherein a proposal for discussions about capital expenditure for beautification and repairs to our complex formed the core agenda of the meeting.

    The Agenda for the S.G.M. held on 21st November 2010 clearly states that the aim was “To discuss” various Proposals for Capital Expenditure. Never were the words ” Discuss and Approve” mentioned in the Agenda, nor was the same discussed in the said SGM.

    As by law defined in the bye laws, At a Special General Body Meeting of a Co-operative Society no business can be transacted other than that mentioned in the Notice of the Meeting. “To discuss” means to examine in detail or to debate and by no stretch of imagination can it mean “To authorize”. As far as my knowledge goes, No such Resolution (which is mandatory) had been passed authorizing collection towards the Major Repairs. It was also not mentioned in the Draft of the minutes that were circulated in the first or second week of January 2011. As far as my knowledge, in the SGM, no such resolution was passed, authorising the MC to collect the moneys for the same. No copy of such a resolution was circulated to the members, nor was it mentioned anywhere in the Draft Minutes of the said S.G.M. – Reason, because, it obviously did not exist.

    The total cost put forward to the members was approximately INR 900 LACS to which a 10% rebate was added and further another 10% towards contingency fund, bringing the total cost to approx INR 1080 LACS.

    Any Resolution, if at all, passed by the few Member present at this S.G.M. claiming to have allegedly authorized the Managing Committee to implement the various Proposals of Capital Expenditure or authorizing the Managing Committee to collect Funds for this purpose are in contravention of the Agenda for this S.G.M. and the Bye laws, and also was not mentioned in the Draft of the minutes that were circulated in the first or second week of January 2011 and are therefore invalid and not enforceable on the General Body.

    Inspite of the above, majority of the members have been paying the major repairs contribution as and when the bills are raised. As of date, the MC has collected approx. 694 LACS towards the same, against which the Work done is a meager INR 150 lacs.

    Since, the MC is lacking in the Major Repairs works that are yet to be undertaken compared to the Collection of the Major Repair contribution, we would like to request the MC to deffer the further payment schedule and stop taking futher installments, and request them to collect the funds as and when required by the MC as mentioned in the Bye Laws under u/s creation of funds for majore repairs.

    Need your advice or opinion regarding the following :

    I am attaching a copy of the Agenda of the SGM dtd: 16 November 2010 and MOM dtd 25 November 2010 of the said meeting. I request you to kindly go through the same and read my following explanatory note:

    1, You may observe from the Agenda of the SGM which clearly states that the aim was “To discuss” various Proposals for Capital Expenditure. Nowhere they have mentioned “To Approve” the following resolution or “To Authorize” the Managing Committee been indicated.

    2. · Our being a huge CHS consisting of more than 165 members and large area of society premises required detailed Agenda mentioning exact nature of major of repairs required, exact Capital Expenditure required for each of these tasks & how the same shall be collected from the members?, agencies whose quotations have been received or are being considered or the modus operandi for inviting tenders etc. In short for a Capital Expenditure Budget in excess of INR 10 Crores the Managing Committee did not circulate any other annexure with the Agenda or specify their intent explicitly through the said Agenda. The Agenda sent in my opinion was very general and completely ambiguous especially since such a large amount of Capital expenditure was proposed to be incurred.

    3. Due to the above reason a small number of members attended the SGM; however they fulfilled the minimum quorum requirement. Shockingly the MOM of the SGM circulated later in January 2012, There is NO MENTION of any such Resolution that such a huge expenditure was not only approved but also states the Managing Committee is authorized to collect and proceed with the Major Repair work specifying each of the tasks to be done.

    4. Ours being a elite CHS the members with utmost good faith in the management did not object to the MOM or doubt Managing Committee’s integrity. From time to time the Bills for Major Repairs were raised and we have already paid almost two third of the total capital expenditure.

    5. With only one year to go and one third of the collection pending. Today we are in a condition that most of the tasks mentioned in the MOM has not even resumed. Only one or two jobs are undertaken. The Managing Committee is sitting with a huge corpus of unutilized funds.

    Under the circumstances myself and many concerned members of the society would like to seek your expert guidance and opinion on the following:

    1. Is the Agenda of the SGM appropriate/suffice? If not is it legally challengeable?

    2. Can the Managing Committee with such a general agenda pass the Resolutions as passed in the MOM dtd 25 November 2010 ? If not is it legally challengeable?

    3. If we object to pay or don’t pay the MC is putting our names on the defaulter’s list and are charging us penal interest @ 18% p.a. and will file a case u/s 101. How can we (if we are minority number of members presently) tackle the Management?

    4. As the Management is not answering to our individual letters and joint pleas addressed to the Hon Treasurer , pertaining to the financial implications. Is there a collective way in which we can make the Management accountable and reply able?

    5. How can we stop making further payments and make the MC come forward to explain to the members? and give a detailed status on the major Repairs funds utilisation as of date.

    I, once again sincerely apologize for having having troubled you with this long mail but your reply to this mail shall be of immense value for several residents who are senior citizens and others who are seriously concerned about the utilization of their hard earned money.

    Your urgency and prompt reply would be highly appreciated.

    Thanking you in anticipation.

    A J Patel

    PS : I am contactbale on 9820290704

  2. The Dy Registrar should check the eligibility of the managing committee members also before NOC is issued.

    There are many societies who do not know and follow the (Section 73-FF & 144-E) rule.

    If the society members make a mistake, it is the duty of the Dy Registrar to keep a check if his own framed rules are obeyed and followed and not violated by the society members in appointing the managing committee..

    Society Owner Members
    Should know & Demand from
    Every Managing Committee Member of Redevelopment participating society
    The M-20 bond has been signed and submitted to the Deputy Registrar of Cooperative Society.
    Member of a Co-operative Housing Society in Maharashtra, who has more than two children is not eligible to be a member of the Managing Committee. (Section 73-FF & 144-E)
    This disqualification is applicable only to a member to whom the third child is born after September 7, 2011
    if a member is convicted by a Court of Law for any offence involving moral turpitude, that member is not eligible to be elected as a member of the committee unless a period of six years has lapsed since such conviction.
    A member who defaults in payment of dues to the society within three months from the date of service of notice in writing is not eligible to be elected as a member of the committee.

    Why are the rules and regulations of the Co-operative Society made?

    The group of authorised persons making these common rules have an objective as resolved by them for a common cause and the dy registrar is the person to keep a check if the framed rules are followed or not by the Societies and if the same is not checked then the dy registrar is also violating it.

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