Monday, 12 May 2014

AN ASSOCIATES MEMBERS CAN CONTEST ELECTION FOR THE POST OF CHAIRMAN, SECRETARY OR THE TREASURER OF THE SOCIETY

Most of the Societies are confused on the question that “Whether an Associate member can contest election for the post of Chairman, Secretary or the Treasurer of the Society or not.

To understand this, we require to know who are the Associate members and what are their rights. According to Section 2(19)(b) of the M. C. S. Act 1960, 

“Associate member” means a member who holds jointly a share of a society with others, but whose name does not stand first in the share certificate. 

Further As per Bye Law 19(B) an individual, a firm, a company or a body corporate, registered under any law for time being in force, who/which is eligible to be an associate member and who/which has made an application in the prescribed form for such membership, along with the entrance fee of Rs.100/- may be admitted as such member by the committee. 

Therefore the person whose name stands second or onwards in the share certificate either by way of joint ownership or by the provision illustrated in bye-law no. 19 (B) is an associate member.

Now if we see Sec. 27(2) of the MCS Act which regulates the voting rights of the Associate members, states that:

“Where a share of a society is held jointly by more than one person, the person whose name stands first in the share certificate, if present, shall have the right to vote, But in the absence the person whose name stands next, and likewise, in the absence of the preceding persons the person whose name is next on the share certificate, who is present and who is not a minor, shall have the right to vote.”

It clearly illustrates that an Associate member can vote in the absence of the first/original member. In other words, once society has admitted a person as associate member or has added his name to share certificate, he/she can stand for elections. This is further confirmed by the Government through a rectification letter dated 12.06.2007.

Further as per the definition given in section 2 of MCS Act, 1960, the term “Members”, includes the Associate Member. Therefore all the rights of the member can be exercised by the associate member also.

It is to be noted that to make the associate member eligible to vote or contest the election, the first member (member whose name stands first in the share certificate) has to submit NOC  and undertaking, stating that he/she does not intend to participate in the election and he/she have no objection if associate member contesting the election.

Earlier in the Housing Manual, which was issued on 15.10.2011, two types of Associate members were defined- one who is a joint owner and becomes the associate member and another who become associate member by paying Rs. 100/- fee but who is not a joint owner. Further it was mentioned that “Associate Members cannot contest election of Managing Committee if the Associate member is not the joint owner of the flats”.

However, this created lot of problem and confusion for the Co-operative Housing Society. Lots of complaints of the Society was received and accordingly Co-operation, Marketing and Textile Industries Department had issued the circular dated 28.11.2013 where it is mentioned that “Taking into consideration the possibility that due to such provision (made in the Housing Manual) there would be disputes and confusion between the members of a Society and its Managing Committee and that the number of complaints in this regard would increase, approval of the Government is hereby granted to exclude/delete from the Housing Manual the provision made therein in respect of Associate member viz.

“A person who becomes an Associate/Joint Member only by paying an entrance fee will not get any right to vote or election on behalf of the said member and in order to hold shares jointly, it is necessary that the Associate/Joint Member must have his share/name in the ownership of the property”.

The same was confirmed by the circular dated 03.12.2013 issued by Deputy Registrar Co-operative Societies, ‘D’ Ward, Mumbai, Malhotra House, 6th Floor, Opp. G.P.O., Fort, Mumbai- 400001 and all the Government authorities i.e. Registrars, public at large and federations were directed to act accordingly. Another reconfirmation circular dated 24.12.2013 was issued by Office of the Commissioner, Co-operation and Registrar, Co-operative Societies, Maharashtra State, Pune about deletion of the said insertion.

By this way Government of Maharashtra has deleted the provision of defying two types of Associate members when MCS Act, 1960 does not have such classification and now it is Cristal clear that an Associate member can contest the election even for the post of Chairman, Secretary or Treasurer.

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