Draft Bye laws of Coop ready for Review & Approval

Draft Bye laws of Coop Society for 

Review  & Approval

1. A copy of the final draft of the above is provided here for Review & Approval: https://drive.google.com/file/d/1UQLIYACrp2RPBctLDoZSZM021baUMrav/view?usp=sharing
2. You may like to download the Draft as above  as pdf and this will facilitate you to take advantage of the Bookmarks on the left side of the window as you open it.
3. A Review/Approval form   is made available here which will facilitate automated collection of review comments from owners so that these review comments can be evaluated and incorporated in the draft in a disciplined and organised way.: (https://docs.google.com/forms/d/1c866XVRfocMEyHDr5zYYV22K8tBMcUWy3BvRe7oyKts/edit?usp=sharing)

Latest Karnataka HC Order

Latest High Court of Karnataka Order 

IN THE HIGH COURT OF KARNATAKA, BENGALURU

DATED THIS THE 9TH DAY OF NOVEMBER, 2021

BEFORE

THE HON'BLE MR. JUSTICE KRISHNA S.DIXIT

WRIT PETITION NO.7193 OF 2021(GM-KSR)

BETWEEN:

MR. SUNIL MAADHBUSHI,

AND:

1. STATE OF KARNATAKAA

REPRESENTED BY THE REGISTRAR,

DEPARTMENT OF CO OPERATIVE SOCIETIES,

NO 1, ALI ASKER ROAD, BENGALURU 560052

https://drive.google.com/file/d/1mIlSY0s-Ed2Bbu3rtcuBsa9X04lEdnpD/view?usp=sharing

2.  The Divisiona Bench of  this Court in

W.A.Nos.932-933/1974  between A.V.VINODA &

ANOTHER Vs. STATE OF KARNATAKA BY ITS

cOMMISsIONER & SECRETARY, disposed off on

11.12.1974, has held that the Court should treat the likecases

alike and if relief is granted to a litigant it has to be

extended to a similarly circumstanced litigant as well, there being no derogatory circumstances.

In the above circumstances, this writ petition

succeeds; a Writ of Certiorari issues quashing the

impugned Registration Certificate bearing No. JNR-S455-

2015-16 dated 18.02.2016 a copy whereof is at Annexure-

ARNA Costs made easy.

Sd/

JUDGE

Formalities for Registration of Coop society With Important Highlights

 “3. Formalities for Registration- 

(1) A group of persons not less than ten persons intending to form 

a cooperative society may join together and elect a chief

promoter among themselves, and a few promoters to assist him and authorise him

to take further steps for registration of the society. Such group of persons shall

1. decide the name and area of operation of the proposed society, 
2. adopt the bye-laws of the proposed society and also resolve to authorise the chief promoter to collect the required share capital from the persons intending to become the members of the proposed society.

(2) The chief promoter shall approach the jurisdictional Registrar along with

1.  a list of persons who have joined together to form the proposed cooperative society, 
2. a copy of the proceedings of the meeting of the said group of persons containing their names, addresses and signatures, 
3. two copies of the bye-laws of the proposed society and 
4. a copy of the project report to show the proposed society has reasonable chances of success and is going to be a viable organisation.

(3) The Registrar on being satisfied that, the proposed society has reasonable

chances of success and is going to be economically viable may permit the chief

promoter to collect such amount of share capital from such number of persons

intending to become the members of the proposed society within such period as he

may specify.

(4) After getting permission from the Registrar, the chief promoter shall 

1. get a few receipts book printed in the name of the proposed society and collect the share capital from the persons intending to become the members of the proposed society.
2. He shall issue receipts to the proposed members for the amount collected with his signature under his name and designation. 
3. The money so collected shall be deposited within seven days from the date of collection, in an account opened by the chief promoter in the name of proposed society, in a scheduled or a cooperative bank.. 
4. He shall maintain a cash book, receipt book, voucher book and other accounts for the money collected and remitted to the bank. However, he shall be competent to retain such money as may be necessary and sufficient to incur incidental expenses like printing, stationery, typing, postage, etc.,

(5) After collecting the share capital to the extent permitted by the Registrar from the specified number of persons, the chief promoter shall 

1. convene a meeting of the promoters of the proposed society and place the details of 
1. the particulars of receipts and expenditure incurred and the names of the proposed members from whom share capital is collected. 
2. After getting a resolution passed in the promoters meeting, he shall submit a proposal to the Registrar for the registration of the society in the prescribed application along with 
1. five copies of the bye-laws of the proposed society and 
2. the list of proposed members with their names and addresses. 
3. If there is any change in the promoters list, it can be ratified by the registering authority.
3. The application shall be signed by each one of the applicants who is an individual and by a person duly authorised on behalf of any cooperative society which is an applicant and 
4. shall be accompanied by the prescribed fee."

Authority: KCS Rules  2013:

https://drive.google.com/file/d/1YahMN8eC8ZsIIL0NzuHsfqSg9aMioZFt/view?usp=sharing

Draft Coop society Bye Laws for review

 I am enclosing a link to a flip book version of  the Draft for Approval:

Flip  version of the ByeLaw is here: 

https://anyflip.com/sfytf/jqql/

(Change to "Enable full screen" using the button on the top second button from right.)

Errors & Omissions expected as it was all done in a hurry in 3 working days.

I will make a  downloadable pdf version which you can use for making  review comments etc. a little later. I am forwarding this ONLY to enable  an opportunity of observing the work in progress.

Formalities for Registration of Cooperative in Karnataka

 3.   Formalities  for  registration-  

(1)  A  group  of  persons  not  less  than  ten persons  intending  to  form  a  cooperative  society  may  join  together  and  elect  a  chief promoter  among  themselves,  and  a  few  promoters  to  assist  him  and  authorise  him to  take  further  steps  for  registration  of  the  society.    Such  group  of  persons  shall decide  the  name  and  area  of  operation  of  the  proposed  society,  adopt  the  bye-laws of  the  proposed  society  and  also  resolve  to  authorise  the  chief  promoter  to  collect the  required  share  capital  from  the  persons  intending  to  become  the  members  of the  proposed  society. 

(2)  The  chief  promoter  shall  approach  the  jurisdictional  Registrar  along  with  a list  of  persons  who  have  joined  together  to  form  the  proposed  cooperative  society,  a copy  of  the  proceedings  of  the  meeting  of  the  said  group  of  persons  containing their  names,  addresses  and  signatures,  two  copies  of  the  bye-laws  of  the  proposed society  and  a  copy  of  the  project  report  to  show  the  proposed  society  has reasonable  chances  of  success  and  is  going  to  be  a  viable  organisation.   

 (3)  The  Registrar  on  being  satisfied  that,  the  proposed  society  has  reasonable chances  of  success  and  is  going  to  be  economically  viable  may  permit  the  chief promoter  to  collect  such  amount  of  share  capital  from  such  number  of  persons intending  to  become  the  members of  the  proposed  society  within  such  period  as  he may  specify. 

(4)  After  getting  permission  from  the  Registrar,  the  chief  promoter  shall  get  a few  receipts  book  printed  in  the  name  of  the  proposed  society  and  collect  the  share capital  from  the  persons intending to  become  the  members of  the  proposed  society.  He  shall  issue  receipts  to  the  proposed  members  for  the  amount  collected  with  his signature  under  his  name  and  designation.  The  money  so  collected  shall  be deposited  within  seven  days  from  the  date  of  collection,  in  an  account  opened  by the  chief  promoter in  the  name  of  proposed  society,  in  a  scheduled  or a  cooperative bank..  He  shall  maintain  a  cash  book,  receipt  book,  voucher  book  and  other accounts  for  the  money  collected  and  remitted  to  the  bank.    However,    he  shall  be competent  to  retain  such  money  as  may  be  necessary  and  sufficient  to  incur incidental  expenses  like  printing,  stationery,  typing,  postage,  etc.,   

(5)  After  collecting  the  share  capital  to  the  extent  permitted  by  the  Registrar from  the  specified  number  of  persons,  the  chief  promoter  shall  convene  a  meeting of  the  promoters  of  the  proposed  society  and  place  the  details  of  the  particulars  of receipts  and  expenditure  incurred  and  the  names  of  the  proposed  members  from whom  share  capital  is  collected.    After  getting  a  resolution  passed  in  the  promoters meeting,  he  shall  submit  a  proposal  to  the  Registrar  for  the  registration  of  the society  in  the  prescribed  application  along  with  

• five  copies  of  the  bye-laws  of  the proposed  society  and  
• the  list  of  proposed  members  with  their  names  and addresses.    

If  there  is  any  change  in  the  promoters  list,  it  can  be  ratified  by  the registering  authority.   

The  application  shall  be  signed  by  each  one  of  the applicants  who  is  an  individual  and  by  a  person  duly  authorised  on  behalf  of  any cooperative  society  which  is  an  applicant  and  shall  be  accompanied  by  the prescribed  fee."

Authority: Karnataka Cooperative Act Rules 2013

Sharing of Information with the Focus Interest Group

 Dear All,

1. I will keep sharing daily the progress on the work wrt registration of Coop.
2. This is to facilitate Notice (to owners) and Comments (from owners).
3. You can comment as reply to the mail or as comments on the particular blog post itself.
4. I strongly believe that all owners have a right to know what is happening so that they can contribute or at least warn if such warning is needed to avoid some difficult situation for our group. 
5. Many heads are always better than one head!
6. I strongly believe in total transparency as the work is in progress.

• In 1913 “Harper’s Weekly” published “What Publicity Can Do” by Justice Louis D. Brandeis which began with the following words: 8

  Publicity is justly commended as a remedy for social and industrial diseases. Sunlight is said to be the best of disinfectants; electric light the most efficient policeman.

7. Those who are disinclined to contribute to the thinking process can always ignore/switch off from these communications and blog posts.
8. Those who are willing and able to contribute are always welcome and any contribution will be appreciated.
9. Those who  have differing thoughts/opinions are more than welcome to express it and differences of thoughts/opinions will be analyzed carefully and if found suitable will be incorporated in the work in progress.
10. A lawyer will be extremely sensitive to his ignorance in the particular area of practice coming to light of his clients and 
11. since I am NOT a lawyer, I have no such bias or any need to conceal my ignorance or need for such guidance.
12. So, feel absolutely free to comment/suggest as liberally as possible or not at all as you choose personally.

See the applicable Acts and Rules here:

https://lsm-coop.blogspot.com/2021/11/applicable-acts-rules.html

 

The rules/regulation regarding 

1. application for Registration, 
2. the process involved in submission of application and 
3. its further approval  and
4. issue of Registration certificate and 
5. what to do if the Registrar refuses to register a proposed co-operative society 

and these have been captured  in detail here:

https://lsm-coop.blogspot.com/2021/11/application-for-registration-of.html

 Application for Registration of Cooperative societies

REGISTRATION OF CO-OPERATIVE SOCIETIES. 1 [3.   x x x]1 1. Omited by  Act 40 of 1964 w.e.f. 26.6.1965. 1 [4.  

Societies which may  be  registered.-      

Subject to the provisions of this Act, a co-operative society which has as  its  objects the promotion of the economic interests or general welfare of its members,  or of the public, in accordance with co operative principles, or  a  co-operative  society established with the object of facilitating the operations of such a society, may be registered under this Act: Provided that no co-operative society  shall be registered if it is likely to be economically unsound, or the  registration  of which may have an adverse effect on development of the co-operative movement.]1 1. Substituted by  Act 40 of 1964 w.e.f. 26.6.1965. 5.    

Registration  with  limited or unlimited liability.-   

 (1) A co-operative society may be registered with or without limited liability: Provided that the liability  of  a  co-operative society of which any member is a cooperative society, shall be limited. (2) The word ‘limited’ or its  equivalent  in any Indian language shall be the last word  in the name of a co-operative society registered under this Act with limited liability. 

6.  Application for  registration  of co-operative societies.-    

(1) An application for the registration of a co-operative society shall be made to the Registrar  in  such form  1[and after complying with such formalities]1  as may be prescribed; and the applicants  shall furnish to him all such information about the society as he may require. 1.  Inserted by  Act 25 of 1998 w.e.f. 15.8.1998.

 (2) Every such application shall conform to the following requirements, namely:—

 (a) the application shall be accompanied by  2[five]2  copies of the proposed bye-laws of the co-operative society; 

 (b) where all the applicants are individuals, the number of applicants  shall not be less than ten;

 (c) every one of the applicants who is  an individual shall be above the age  of eighteen years  1[and the applicants shall not be members of the same family. Explanation.—For  the  purpose of this clause family in relation to a person means an individual, wife or husband, as the case may be, and their dependent children and parents;]1 1.  Inserted by  Act 25 of 1998 w.e.f. 15.8.1998. 2. Substituted by  Act 25 of 1998 w.e.f. 15.8.1998. 

(d) where the objects of  the  co-operative society include the creation of funds to be lent to its members and where all  the applicants are individuals, the applicants shall  reside in the same village or town  1[or in the proposed area of operation of the co-operative society]1  or belong to the same class or pursue the same occupation; 1. Substituted by  Act 25 of 1998 w.e.f. 15.8.1998.

(e)  the  application  shall be signed by every one of the applicants who is an individual and by a person duly authorized  on  behalf of any co-operative society which is an applicant. 1[( f)  the  application  shall  be  accompanied by such fee as may be prescribed and different fees may be prescribed for different  class or classes of co-operative societies.]1 1. Inserted by  Act 25 of 1998 w.e.f. 27.10.1998 by  notification  text  of  the  notification  is  the  end  of the Act. 1[(g) in the case of the co-operative which intends to convert itself into a  Cooperative  Society  under  this  Act, the application shall be accompanied by a resolution of the general meeting of such  Co-operative approving such conversion]1 1.  Inserted by  Act 13 of 2004 w.e.f.  22.03.2004. 

7.  Registration.-   

 (1) If the Registrar is satisfied,—  ( b) 

a)  that the application complies with  the provisions of  this  Act  1[, rules and the provisions of any other law for the time being in force]1;  

( c) that the objects of the proposed society are in accordance with section 4;   ( that the aims of the proposed society are not inconsistent with  the principles of social justice;  

( d)  that the proposed bye-laws are not contrary to the provisions of this Act and the rules; and  

( e)  that the proposed society complies  with  the requirements of sound business and has reasonable chances of success; 

1[Registrar shall, within a period of three  months from the date of receipt of the application, register]1  the  co-operative society and its bye-laws  

2[and send by registered post, a certificate of registration and the original registered bye-laws signed  with  date    and seal by him to the chief promoter mentioned in the application or to the chief executive of the Co-operative which is converted]2 1. Substituted by  Act 25  of 1998 w.e.f.  15.8.1998. 2.  Inserted by  Act 13 of 2004 w.e.f.  22.03.2004. 

1 [ 2[(2) If the Registrar is unable to dispose of such application within the period specified in sub-section (1), the society  and  the  bye-laws shall be deemed to have been registered.]2 1. Sub-sections (2) to (4) inserted by  Act 40 of 1964 w.e.f. 26.06.1965. 2. Substituted by  Act 25 of 1998 w.e.f. 15.08.1998. 

(3)  Where the Registrar refuses to register a proposed co-operative society, he shall forthwith communicate his decision,  with the reasons therefor, to the person making  the  application and if there be more than one to the person who has signed first in the application.

 (4) The Registrar shall maintain a register  of all co-operative societies  registered or deemed to be registered under this Act.]1 

8.  Registration certificate.-    

Where a co-operative society is registered  1[or is deemed  to be registered]1  under this Act, 

the Registrar shall issue a Certificate of Registration signed by him, which shall  be conclusive evidence that the cooperative society therein mentioned is  a co-operative society duly registered  1[or is deemed to be registered]1  under this Act. 

Applicable Acts & Rules

1.  Karnataka  Cooperative Act 1959.    https://drive.google.com/file/d/1DRin5fbuY0tcoZUrogMB16KGCuYUpyfk/view?usp=sharing
2. Karnataka Cooperative Rules 1960   https://drive.google.com/file/d/1JywgOrsnwfIHDTF1cNej1fsV5kamendmw_GCod/view?usp=sharing
3. Amendment to KCS Act 2016  https://drive.google.com/file/d/1IQtIuScgECA6Q69N_Xhf1X5WGmiSS1mt/view?usp=sharing
4. Amendments to KCA Rules 2013   https://drive.google.com/file/d/1YahMN8eC8ZsIIL0NzuHsfqSg9aMioZFt/view?usp=sharing

Website: https://sahakara.kar.gov.in/Acts&Rules.html

High Court of Karnataka Order and Regulatory authority Direction

High Court Order

1. https://drive.google.com/file/d/1kLS5ADby6CBA420x157PBDMTT2Z6OnRu/view?usp=sharing

2. https://drive.google.com/file/d/1MAtVXcVHHXD1rWLNyDZ8V3H9YOiDdwg8/view?usp=sharing

Regulatory authority Direction

Government of Karnataka Cooperative Department Order:

 https://drive.google.com/file/d/17n_btELpJvGobHZRzzpWdZfZkTNeJw-5/view?usp=sharing

If any one still has any doubts, please raise the issue ASAP.

Chandra Nath

7760928824

IRAC Legal Analysis of Current RWA Apartment Owners Society

 IRAC Legal Analysis of Current  RWA   

ISSUE

1. Is the current  registration of  Owners Association legal?

RULES/EXPLANATION

1. Karnataka Apartment Owners Act 1972
2. Karnataka Registration of Societies Act 1960

Current registration is under ser 2 above. In this regard,, the following are relevant:

1. Current Registration of  Society under 1960 act 
1. 1960 Act only for 
1. Promotion of charitable activities.
2. Promotion of educational, science, art, literature, or the fine arts.
3. Promotion of sports
4. Diffusion of knowledge pertaining to commerce and industry
5. Political education training
6. Maintenance of library
7. Collection/preservation of historical monuments, technical and philosophical research
2. "The societies whose aims and objectives are confined to the welfare and interest of its members only such as Pensioners Association, Housing Societies etc. do not come under the scope of Societies Registration Act 1960."  https://www.indiafilings.com/learn/karnataka-society-registration/
3.  Section 10 of the Karnataka Ownership Flat Act 1972, states: ‘Promoter to take steps for formation of Cooperative society or company’ the promoter is required to register cooperative society or company hence it is not legal to register under Karnataka Society Registration Act of 1960.  
2. Regulating Authority ruling:
1. Government of Karnataka (Department of Co-operation) Registrar of Co-operative Societies, Karnataka State, Bangalore- 560052. Ref no: RSR / Cooperative / 144 / 2018-19 Date: 30-11-2018  See https://tinyurl.com/y58437bj
3. Court Rulings
1.  HC, Karnataka  ruling also on the subject.( https://indiankanoon.org/doc/1356067/)
• "3. In fact, I have often observed and even issued notice to the Registrar of Societies in Karnataka. It is strange that under the Karnataka Societies Registration -Act, 1960 (hereinafter referred to as the Act) registration is permitted to these Associations who neither have as their objects promotion of culture, sports nor education but their own trade or professional interests. On that ground it is open to this Court to reject the locus standi of the petitioner to prosecute this petition. Sec. 3 of that Act expressly provides the purpose for which the Association of person may have registered under that Act. If any Association carries on activities outside those purposes enumerated in Sec. 3 of the Act, it will not be entitled to the registration under that Act."
2. SC Ruling :
• Illachi Devi (D) By Lrs. And Ors vs Jain Society, Protection Of ... on 26 September, 2003 : "This appeal is directed against the judgment and order dated 17th August 2001 of the High Court of Delhi, which raises a question, whether a Society registered under the Societies Registration Act, 1860 is entitled to obtain Letter of Administration under Section 236 of the Indian Succession Act (in short "the Act")?.....A society is an association of persons. It may or may not be registered under the Societies Registration Act. Since the aforementioned provisions were inserted in Sections 223 and 236 of the Act, the Courts have held that no Administration can be granted in favor of a society, although a Society could be a beneficiary under a Will executed by testator." https://indiankanoon.org/doc/854277/

ANALYSIS/APPLICATION

1. Applicable statute mandates moving to registration under coop Society
2. Owners Interest also point in this direction:
1. Under 1960 Act, any thing that is given to the Society or owned by the Society is irretrievably lost to the owners for ever:
1. 23. Upon dissolution, no member to receive profit.- 
• (1) If upon the dissolution of any society registered under this Act, there shall remain, after the satisfaction of all its debts and liabilities, any property whatsoever, the same shall not be paid to or distributed among the members of the said society or any of them, but shall be given to some other society, to be determined by the votes of not less than three-fifths of the members present personally or where proxies are allowed, by proxy at the time of the 13 dissolution, or in default thereof, by the principal civil court of original jurisdiction of the district. 
• (2) Notwithstanding anything contained in sub-section (1), it shall be lawful for the members of any society dissolved, to determine by a majority of the votes of the members present personally or where proxies are allowed, by proxy, at the time of dissolution of such society that any property whatsoever remaining after the satisfaction of all its debts and liabilities shall be given to the State Government to be utilized for any of the purposes referred to in section 3. 
2. This is totally NOT in the property interests of the owners and unacceptable to the owners as the property including the UDS and common areas and facilities and also the society money (cash bank and assets of the society) are property owned by the owners and belong to the owners and can not be forced out of the owners hands by statutory provisions.

CONCLUSION

In view of all the above, Registration under 1960 Act is  totally illegal and the protection provided to the owners by the 1972 Act is NOT provided to the owners and hence compliance demands that the Society be re-registered under the proper Act.