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CO-OPERATIVE HOUSING SOCIETY 1

B.C.C.A INSTITUTE OF MANAGEMENT STUDIES

BCCA INSTITUE OF MANAGEMENT STUDIES

MAZAGAON, MUMBAI-400 010

SEMESTER: IV (FOURTH)

THE GROUP NUMBER:

CLASS: S.Y.B.M.S DIV: B

SUBJECT: CO-OPERATIVE AND RURAL MARKETING

TOPIC: HOUSING CO-OPERATIVE SOCIETY

NAME OF THE PROFESSOR: PROF.KHADIJA RONAK

SIGNITURE OF PRFESSOR

MARKS OBTAIN MARKS OUT OF


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ALL PROGRESS IS BORN OF INQUIRY

------ HUDSON MAXIMA


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PREPARED BY:

NAME ROLL NO SIGNATURE

SIDIQUE FARIDI 65

NATHIA MOHOMAD ALI 79

ANSARI IRSHAN 84

ATHANIA MOHOMAD YUNUS 85

SHIEKH ALTAMASH 86

ANSARI SALMAN 87

ANSARI TEHSIN 88

VEHVARIA FARAZ 98

SHIEKH MISBAH 100

NEHA KONDKARY 101


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PREFACE

It is essential to learn about co-operative society for management students to know how to

deal with the society when you are dealing in business with the people living in society to

make our business success full we need to know about every area in which the business

operate. Our thanks to respected Teacher Prof. KHADIJA RONAK the Lecturer of CO-OPERATIVE AND RURAL MARKETING at BCCA's Institute of Management Studies, who

provided us an opportunity to study the depth of this procedure and registration of co-

operative society by giving it for project work. We tried to cover all the areas of the subject

by visiting to a co-operative housing society. Also we have taken care to condense the text

with basics and essentialities in a simple and lucid form to make the readers comfortable in

grasping the fact and figures.

We wish to profoundly thank our teacher Prof. KHADIA RONAK whose precious

teachings made it possible to prepare such type of project.

WARM REGARDS,

AUTHORS


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CONTENTS

1) Executive summary 6

2) Definition 7

3) Introduction to housing cooperative 8-10

4) Housing situation in India 11-13

5) Housing shortage a real problem 14-15

6) Structure of housing cooperative 16-17

7) Bye laws of cooperative 18

8) Approach to housing development 19-20

9) Housing and urban development 21-22

10)Type of cooperative housing society 23

11)National housing and habitat policy1998 24-26

12)Future prospective of national housing policy 27-29

13)Problem of housing policy 30-3114)Procedure of registration 32-38

15)Right and duties of members 39-43

16)Property and fund of cooperative 44-48

17) Procedure of issue of winding of cooperative 49-55

18) Interview of Chairman 56

19) Case study 57

11) Bibliography 58-59


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EXECUTIVE SUMMERY

A housing cooperative is a legal entity usually a corporation that owns real estate, consisting

of one or more residential buildings. Each shareholder in the legal entity is granted the right

to occupy one housing unit, sometimes subject to an occupancy agreement, which is similar

to a lease. The occupancy agreement specifies the co operatives rules. Cooperativeis also

used to describe a non-share capital co-op model in which fee-paying members obtain the

right to occupy a bedroom and share the communal resources of a house that is owned by a

cooperative organization.

Housing cooperatives in IndiaCo-ops are more commonly known as "flats" in India. This

type of housing is very common in big cities like Mumbai (Bombay) but not very popular in

rural India. Actually, they are registered as "co-operative housing society" rather than

condominiums in that the owners actually have a share of the co-op and not the actual real

estate itself. Owners can sell the "share" in the open market, but they have to get the

approval of the co-op to complete the transaction.

It is owned and managed by the members of the co-operative. Most housing co-

operatives are fully mutual and further reference to housing co-operatives in this document

refer to this type, where only tenants or prospective tenants may be members, and only

members may hold a tenancy. This means that decisions are made by the people who areaffected by those decisions.

Housing co-operatives provide a way for people to share in the ownership of property

and live in it at affordable rent levels, as opposed to rent levels designed to generate profit

for an individual or company. They are an alternative to home ownership in the traditional

sense or renting in the private sector.
http://en.wikipedia.org/wiki/Corporationhttp://en.wikipedia.org/wiki/Real_estatehttp://en.wikipedia.org/wiki/Leasehttp://en.wikipedia.org/wiki/Leasehttp://en.wikipedia.org/wiki/Real_estatehttp://en.wikipedia.org/wiki/Corporation


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DEFINATION

THE DEFINATION OF CO-OPEARATION:

According to Ho Calvert Co-operation mean:

Cooperation is a form of organization in which persons voluntarily associate together as human

beings on the basis of equality for the promotion of economic interest of themselves.

THE DEFINATION OF CO-OPEARATIVE:

Co-operative society is defined as:

A union of persons established according to the principles of equality, the purpose is to

improve the financial position of its members by joint performance, provided that all profitsmade, aims to distribute among members and not in proportionate to investment

THE DEFINATION OF CO-OPEARATIVE HOUSING SOCIETY:

According to Maharashtra Act of Housing Society Act 1960, a housing society is defined

asA society, the object of which is to provide its members with open plots, dwelling houses or

flats and to provide common amenities and services


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INTRODUCTION TO CO-OPERATIVE HOUSING

SOCIETY

The prime necessities of human beings are food, clothing and shelter and housing

cooperative is an essential for human existence as much food and clothing. Housing

is a significant subject having a concern with a common man. One of the important

problems faced by India is the housing problem. The reasons are varied, like

tremendous growth in population, migration from rural to urban areas. Highly

speculative trend in the cost of land, weakening of joint family system thus creating a

requirement of a separate house for each family unit etc.

Co-operative housing emerged as a strong, well organized and significant in

order to. Solve the housing problem of common man. These are legally established

association of persons and are democratically controlled by the members.

The working group on housing co-operatives has therefore said that, co-

operative activity is the best means of providing decent houses at reasonable costs

to persons, particularly of low and middle income groups.

Mumbai is the 3rd largest density populated city in the world and the prices of

the land and construction is becoming unaffordable to the common man. They also


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say that man is a social animal and is incomplete without a social fabric. A persons

lifestyle, his culture, his social status all are determined on where he stays.

There is a acute shortage of cheap & good houses. Growth in urban area is

4.2% as against is 1.5 to 1.6% in Europe. Also in Bombay around 62% people live in

slums or without shelter. The rate of construction of new houses is around 1 houseper 1000 people, while the Ideal is 10 houses. Therefore there is a chronic shortage

of houses in India. Therefore co-operative activity is the best means of providing

decent houses at reasonable cost to persons, particularly of low & middle income

groups.

LEGAL STATUS:

As a legal entity, co-operatives can contract with other companies or hire individualsto provide it with services, such as a maintenance contractor or a building manager.

It can also hire employees, such as a manager or a caretaker, to deal with specificthings that volunteers may prefer not to do or may not be good at doing, such aselectrical maintenance. However, as many housing cooperatives strive to run self-sufficiently, as much work as possible is completed by its members.

A shareholder in a co-op does not own real estate, but a share of the legal entity thatdoes own real estate. Co-operative ownership is quite distinct from condominiumswhere people "own" individual units and have little say in who moves into the otherunits Because of this, most jurisdictions have developed separate legislation, similarto laws that regulate companies, to regulate how co-ops are operated and the rightsand obligations of shareholders.

OWNERSHIP:

Each resident or resident household has membership in the co-operativeassociation. Members have occupancy rights to a specific suite within the housingco-operative as outlined in their "occupancy agreement" or "proprietary lease" whichis essentially a lease. In some cases, the co-op follows Rochdale Principles whereeach shareholder has only one vote. Most cooperatives are incorporated as limitedstock companies where the number of votes an owner has is tied to the number ofshares owned by the person. Whichever form of voting is employed it is necessary to

conduct an election among shareholders to determine who will represent them onthe board of directors (if one exists), the governing body of the co-operative. Theboard of directors is generally responsible for the business decisions including thefinancial requirements and sustainability of the co-operative. Although politics varyfrom co-op to co-op and depend largely on the wishes of its members, it is a generalrule that a majority vote of the board is necessary to make business decisions.

MANAGEMENT:

In larger co-ops, members of a co-op typically elect a board of directors fromamongst the shareholders at a general meeting, usually the annual general meeting.

In smaller co-ops, all members sit on the board.
http://en.wikipedia.org/wiki/Condominiumhttp://en.wikipedia.org/w/index.php?title=Proprietary_lease&action=edit&redlink=1http://en.wikipedia.org/wiki/Rochdale_Principleshttp://en.wikipedia.org/wiki/Shareholderhttp://en.wikipedia.org/wiki/Limited_liability_companyhttp://en.wikipedia.org/wiki/Limited_liability_companyhttp://en.wikipedia.org/wiki/Board_of_directorshttp://en.wikipedia.org/wiki/Board_of_directorshttp://en.wikipedia.org/wiki/Annual_general_meetinghttp://en.wikipedia.org/wiki/Annual_general_meetinghttp://en.wikipedia.org/wiki/Board_of_directorshttp://en.wikipedia.org/wiki/Board_of_directorshttp://en.wikipedia.org/wiki/Limited_liability_companyhttp://en.wikipedia.org/wiki/Limited_liability_companyhttp://en.wikipedia.org/wiki/Limited_liability_companyhttp://en.wikipedia.org/wiki/Shareholderhttp://en.wikipedia.org/wiki/Rochdale_Principleshttp://en.wikipedia.org/w/index.php?title=Proprietary_lease&action=edit&redlink=1http://en.wikipedia.org/wiki/Condominium


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The board typically elects its own officers, such as a president, vice-president and soon. Usually, the directors are volunteers, or are paid an honorarium. The board maythen establish standing committees from among the shareholders, who usually alsovolunteer their time, to either handle the business affairs of the co-op or makerecommendations to the full board on such issues as its finance, membership and

maintenance of its housing units.

FINANCE:

A housing cooperative is normally de facto non-profit, since usually most of itsincome comes from the rents paid by its residents, who are invariably its members.There is no point in creating a deliberate surplus except for operational requirementssuch as setting aside funds for replacement of assets since that simply means thatthe rents paid by members are set higher than the expenses. (Note, however, thatit's quite possible for a housing co-op to own other revenue-generating assets, suchas a subsidiary business which could produce surplus income to offset the cost ofthe housing, but in those cases the housing rents are usually reduced to compensatefor the additional revenue.)

It is relatively difficult to start a housing co-op because if the idea is, for instance, tobuild a building or group of buildings to house the members, this usually takes asignificant mortgage loan for which a financial institution will want assurances ofresponsibility. It may also take a year or more for the members to organize thedesign and construction, as well as time and foresight to establish even basicorganizational policies. It is rare that these kinds of skills of organization areavailable in a random group of people who often have pressures on their existing

housing. It may be somewhat easier to organize a group of closely related housingunits. This opportunity may arise, for example, if an existing apartment building'sowner is thinking about selling it.

MARKET-RATE AND LIMITED-EQUITY CO-OPS:

There are two main types of housing co-operative financing methods, market rateand limited equity. With market rate, the share price is allowed to rise on the openmarket and shareholders may sell at whatever price the market will bear when theywant to move out. In many ways market rate is thus similar financially to owning acondominium, with the difference being that often the co-op may carry a mortgage,

resulting in a much higher monthly fee paid to the co-op than would be so in acondominium. The purchase price of a comparable unit in the co-op is typically muchlower, however.

With limited equity, the co-op has rules regarding pricing of shares when sold. Theidea behind limited equity is to maintain affordable housing. A sub-set of the limitedequity model is the no-equity model, which looks very much like renting, with a verylow purchase price (comparable to a rental security deposit) and a monthly fee in lieuof rent. When selling, all that is re-coped is that very low purchase price.
http://en.wikipedia.org/wiki/Volunteerhttp://en.wikipedia.org/wiki/Honorariumhttp://en.wikipedia.org/wiki/De_factohttp://en.wikipedia.org/wiki/De_factohttp://en.wikipedia.org/wiki/Non-profithttp://en.wikipedia.org/wiki/Non-profithttp://en.wikipedia.org/wiki/Mortgage_loanhttp://en.wikipedia.org/wiki/Affordable_housinghttp://en.wikipedia.org/wiki/Affordable_housinghttp://en.wikipedia.org/wiki/Mortgage_loanhttp://en.wikipedia.org/wiki/Non-profithttp://en.wikipedia.org/wiki/De_factohttp://en.wikipedia.org/wiki/Honorariumhttp://en.wikipedia.org/wiki/Volunteer


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Housing Situation in India

According to the last census conducted in India in 1991, the country had a

population of 846.3 million out of which 217.6 million lived in cities and towns. Thetotal number of households was estimated at 153.2 million for the same year. Asagainst this figure, the housing stock in the country was of the order of 148 million 39.3 million units in urban areas (26.6%) and 108.7 million in rural areas (73.4%).During the period 1971-1991, while the number of households increased by 58%, thenumber of housing units went up by about 59%. Although India has been facing theproblem of housing shortage for a long time, the increase in housing stock in recentdecades has been more than that in the number of households. Table 1 portrayssome salient data regarding the housing situation in India at the 1991 Census.Approximately 40% of households in 1991 were in single room tenaments; about

30% lived in two-room units. Only about 15% of households had four or more rooms.

Table 2 shows the percentage break-up of households by the number of rooms

occupied.

Housing Situation in India: 1971, 1981 & 1991

1971 1981 1991

Population & Households:

Total Population (Million) 548.20 683.30 846.30

Rural Population (Million) 439.10 523.80 628.70

Urban Population(Million)

109.10 159.50 217.60

Slum Population (Million) - 27.91 46.73

Total Households

(Million)

97.10 123.40 153.20

Rural Households

(Million)

78.00 94.10 112.50

Urban Households

(Million)

19.10 29.30 40.70

Household Size: Total 5.65 5.54 5.52

Household Size: Rural 5.63 5.57 5.59

Household Size: Urban 5.71 5.44 5.35Households per Dwelling 1.04 1.06 1.03

Persons per Dwelling 5.89 5.86 5.72

Housing Units (Million):

Housing Stock: Total 93.00 116.70 148.00

Housing Stock: Rural 74.50 88.70 108.70

Housing Stock Urban 18.50 28.00 39.30

Housing Shortage: Total 14.60 23.30 23.90

Housing Shortage: Rural 11.60 16.30 14.67

Housing Shortage: Urban 3.00 7.00 8.23


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Distribution of Households by Number of Rooms Occupied

(Percent)

1971 1981 1991

One Room:Rural

Urban

47.350.0

44.345.8

40.839.6

Two Rooms:

Rural

Urban

28.5

27.0

28.9

27.8

30.6

30.4

Three Rooms:

Rural

Urban

12.1

11.4

12.3

12.2

13.5

14.8

Four or More Rooms:

Rural

Urban

12.0

11.4

12.1

12.1

14.0

14.7

No Exclusive Room

and Unspecified Rooms

Rural

Urban

0.1

0.2

2.4

2.1

1.1

0.5

Source: Government of India National Buildings Organization, Ministry of Urban Affairs

& Employment: Prominent Facts on Housing 1997.

At the 1991 Census, more than 95% of the households living in rural areas hadbuildings of their own whereas the figure for urban areas was much lower at

63.1%. However, over the period 1971-91 though the percentage of households

owning buildings rose in both rural and urban areas, the rise in case of the latter was

impressive the figure going up from 47.1% in 1971 to 63.1% in 1991. In addition to

improvement in ownership status, there has also been a steady upward trend in the

quality of housing units in the country. During the decade 1981-91, the number of

pucca (permanent) housing units increased by 64.64%, which is much higher than

the growth of 53.39% occurring during the decade 1971-81. Over the period 1981-

91, the number of semi-pucca houses declined by about 8% (from 6.80 million in

1981 to 6.23 million in 1991), while the number of kutcha (thatched, huts, etc.)

houses showed only a marginal increase of about 6% (from 3.1 million in 1981 to 3.2

million in 1991). Table 3 provides some important information regarding the housing

conditions in the country.

Insofar as the provision of civic amenities is concerned, there have been

considerable improvements in the access of people to such amenities over the years

although shortages in housing and infrastructure do continue. Table 4 shows the

percentage of households in the country as a whole having access to safe drinking

water, toilet facilities and supply of electricity during the decade 1981-1991.


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Housing Conditions in India: 1971, 1981 & 1991

Access of Households to Basic Amenities: 1981-1991

1981 1991

Households having Safe Drinking

Water

74.14% 81.59%

Households having Toilet Facility 57.4% 63.58%

Households with Electricity 61.6% 75.93%

Source: Government of India National Buildings Organization, Ministry of UrbanAffairs & Employment: Prominent Facts on Housing 1997

1971 1981 1991

Tenure Status of Households

Owned:

RuralUrban

93.8

47.1

93.0

53.5

94.5

63.1

Rented:

Rural

Urban

6.2

52.9

7.0

46.5

5.5

36.9

Type of Structure (%)

Pucca:

Rural

Urban

19.0

63.8

21.1

64.6

33.0

75.8

Semi Pucca:

Rural

Urban

37.0

23.5

37.6

24.3

34.2

15.8

Kutcha: (Serviceable):

Rural

Urban

32.0

12.7

29.0

11.1

22.8

8.4

Kutcha: (Unserviceable):

Rural

Urban

12.0

-

12.3

-

10.0

-


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HOUSING SHORTAGE THE REAL PROBLEM

Housing shortage is estimated in terms of excess households over houses includinghouseless households, congestion (number of married couples requiring separateroom/house), replacement/up gradation of kutcha/unserviceable kutcha houses andobsolescence/replacement of old houses. Table 5 shows the components of housingshortage in the country at the beginning of 1991. Table 6 shows the estimates ofhousing shortage in urban areas based on the Report of the Ninth Plan WorkingGroup of the Government of India, Ministry of Urban Affairs & Employment

Components of Housing Shortage: 1991

(Million Units)TOTAL RURAL Urban

Excess of Households

over Houses including

Houseless Households

5.16 3.76 1.40

Congestion (No. of

Married couples

requiring separate

Room/House)

1.91 - 1.91

Replacement/Upgradation of

Kutcha/Unserviceable

Kutcha Houses

14.20 10.91 3.29

Obsolescence/Replaceme

nt of Old Houses

1.63 - 1.63

Total 22.90 14.67 8.63

Source: Government of India National Buildings Organization, Ministry of Urban

Affairs & Employment: Prominent Facts on Housing 1997


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PROJECTED HOUSING SHORTAGE IN INDIAS URBAN AREAS, 1997-2001

Million Units

Item 1997 1998 1999 2000 2001

PUCCA 40.08 42.13 44.29 46.56 48.94

Semi-pucca6.65 6.73 6.81 6.88 6.97

Kutcha 3.35 3.38 3.40 3.43 3.45

Households

(No.)

50.09 51.85 53.68 55.56 57.52

Housing Shortage 7.57 7.36 7.18 6.93

Note: The housing shortage estimates also account for congestion and

obsolescence of existing units

Source: Ministry of Urban Affairs & Employment 1996. Report of the Working Group

on Urban Housing for the Ninth Five-year Plan. Government of India, Delhi.

Indias National Report for Habitat II Conference in Istanbul estimates that by 2021,the country would face a housing shortage of 44.9 million units and that theinvestment required for tackling this shortage over a period of 25 years at 1991

prices would be of the order of Rs.6580 billion. The Ninth Plan Working Group of theGovernment of India, Ministry of Urban Affairs & Employment estimated the new

housing/old housing up gradation requirement at 16.76 million units for the 9th

planperiod (1997-2002). About 70% of the units are estimated to be required for theurban poor/economically weaker sections of society while about 20% is for low-income groups. About 10% of the urban requirement is for addressing the middleand higher income group segments. It is estimated that for urban housing alone, thetotal requirement of investment would be of the order of Rs.1213.7 billion for 1997-2002 to address the housing shortage of 7.57 million, up gradation of 0.32 millionsemi-pucca Economically Weaker Sections (EWS) units and the additionalconstruction of 8.67 million units. The total requirement of funds for urban and rural

housing put together for 1997-2002 was estimated to be of the order of Rs.1500billion (see Table 7). Against this amount, about Rs.520 billion is likely to beavailable if the past trends of housing finance are assumed to continue.

Investment Requirement for Housing: Ninth Five Year Plan (1997-2002)

Segment No of Units to be

Constructed (Million)

Fund Requirement

(Rs. Billion)

Likely Availability

Rural 162.5 290 180

Urban 176.6 1,214 340Total 330.1 1,504 520


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Structure of housing cooperative

# First level: National cooperative

At the apex of the structure is the National cooperative housing

societys federation (NCHF) which was established in 1969 and has

headquarters in New Delhi. The objectives of this institution are:-

1) Give publicity of cooperation housing movements by publishing books andbrochures.

2) To establish financial institutions at state level (Maharashtra Housing FinanceCorporation)

3) To help the primary housing cooperative to get loans for building houses and flatsat very nominal interest rate.

4) To undertake research for new building material so to reduce the constructioncost.

# Second level: State level housing cooperative

Their main objective is to guide primary housing cooperatives

regarding legal and statutory matters so as to get that registered.They also help in negotiating with institution like MHADA for

allotment of plots.

# Third level: Primary housing cooperative

The objectives are found in rural, semi urban and urban areas and

can get themselves registered if they have ten or more members

who have a fix source of income and who come together to build a

housing cooperatives and solve the housing problems and prevent

exploitation of Land lords. They provide a systematic and organizedway of maintaining the building and property of housing

cooperatives.

The basic guidelines for the formation of Co-operative society in Maharashtra

State are as follows:-

There should be at least ten persons or more as the Registrar may determinefrom time to time.


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These persons should be from different families.

These persons should be competent to enter into a contract under the Indiancontracts Act 1872.

He should reside in the area of operation of the Society.

He should be eligible as per the bye-laws of the proposed Society.

Any individual, firm, company or any other body corporate can become memberof the Society.

Any Society registered under this Act or Societies registration Act 1860

State & Central Government, Public Trust, local authority.

The object of the Society should be promotion of economic interests or generalwelfare of the members or the public, in accordance with the co-operativeprinciples.

It should be economically sound, its registration should not affect adversely onthe development of the co-operative movement.


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Bye-laws of the Co-operatives

Co-operation is an activity of the people. It is a self-generated, voluntary andself-sufficient activity. Hence little governmental interference is desirable. However

considering the economic parameters of this movement and interests of several

persons involved there is a possibility of misuse of personal power by any of the

group-members. The governments therefore had to pass legislation to monitor the

activities of the co-operatives mainly with the purpose of safeguarding the interests

of all the members.

Great Britain for example had passed legislation as early as 1852. Similar

intervention of legislature can be seen in Germany and France (1867) and Italy

(1883).

In Maharashtra the Co-operatives are governed by the Maharashtra Co-

operative Societies Act 1960 and supported by Maharashtra Co-operative Societies

Rules, 1961. The legal system in the co-operatives registered in Maharashtra State

is elaborate. Moreover each co-operative should have its own Bye-Laws which are

the guiding principles of the co-operative. These Bye-laws have to be approved

through a resolution of the Society. These bye-laws can be amended in the General

body Meeting of the co-operative. The only condition on the bye-laws is that they

should not be contrary to the Maharashtra Co-operative Societies Act, and have tobe approved by the Registrar.

Requirements for forming a cooperative society

Minimum number of persons 25.The society's object should be promotion of the economic interests of its

members.

The proposed society should be capable of being run on economically soundlines.

The registration of the proposed society should not have an adverse effect onthe cooperative movement.


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APPROACH TO HOUSING DEVELOPMENT

After independence, housing was accorded a relatively low priority in the national

development programme in India, presumably with the objective of keeping it basically aprivate sector activity. The low budgetary support given to the housing sector is evidentfrom the fact that the First Five Year Plan of India allocated 7.4% of the total planresources for housing; the share of housing in the subsequent plan resources rangedbetween 1.2% and 4.9%. The governmental agencies, however, played a strongsupporting role for the provision of housing for the poorer sections of society, includingallocation of land. Over the years there has been a gradual shift in the role of theGovernment from a provider to a facilitator, ensuring access to developed land, basicservices, building materials, technology, construction skills and finance so that housingcan be undertaken as a people's programme. The facilitating approach aims at fosteringstrong public-private partnerships with the provision of appropriate incentives to the

private sector, promotion of housing finance institutions, propagation of alternate buildingmaterials and technologies and extension of support to NGOs, CBOs, co-operatives andthe private sector.

The Government of India and State Governments have adopted a two-prongedapproach to housing development for the poor in the past, i. e., sites and services andpermanent housing. Under sites and services, basic infrastructure facilities like drinkingwater, internal roads, approach roads, drainage, community toilet, etc., were provided todevelop layouts. The beneficiaries were also given construction assistance for erecting asmall shelter. The permanent housing programme, which has replaced sites and

services, was initially confined to those beneficiaries who could avail loan facility. Later,several modifications have come up in the programme to address the housing needs ofdifferent target groups. The broad elements of the approach of the Government of Indiato tackle the problem of housing the poor are: special programmes/targeted subsidy tothe poor and vulnerable groups, loan assistance to governmental agencies/beneficiariesat below-market interest rate for housing and at normal rate for infrastructure through theHousing and Urban Development Corporation (HUDCO), creation of housing assets aspart of employment and income generation programmes, promotion of cost-effective andeco-friendly building materials and technologies and creation of an enabling environmentfor private sector initiative. Indira Awas Yojana (IAY) is an example of housing fortargeted groups in rural areas through employment creation.


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Indira Awaas Yojana (IAY):

Indira Awas Yojana (IAY) intends to assist certain vulnerable target groups inhousing activities. The programme applies to categories such as Scheduled Caste(SC)/Scheduled Tribe (ST) households who are victims of social atrocities, SC/SThouseholds headed by widows and unmarried women, SC/ST households affectedby flood, fire accident, earthquake, cyclone and similar natural calamities, freedbonded labourers, families/widows of personnel from defence services/para-militaryforces killed in action, ex-servicemen and retired members of para-military forces,persons displaced on account of developmental projects, nomadic, semi-nomadicand de-notified tribals and families with disabled members, subject to the conditionsthat these households belong to below poverty line category. As per the Governmentof India guidelines, IAY houses are being allotted in the name of the female member

of family or alternatively in the joint name of both wife and husband. The programmeis fully subsidised by the Government of India.


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HOUSING AND URBAN DEVELOPMENT CORPORATION

The Housing and Urban Development Corporation (HUDCO) was established as a

fully-owned enterprise of the Government of India in 1970 with an equity base ofRs.20 million to function as a national techno-financial institution to promote housingand urban development. The objectives of HUDCO include the following:

To finance and undertake housing and urban development programmes inurban and rural areas;

To finance and undertake either wholly or partly, the setting up of newtowns or satellite towns covering infrastructure needs in urban and ruralareas;

To finance and undertake the setting up of building material industries;

To provide consultancy services for projects of housing and urbandevelopment within the country and abroad.

At present HUDCO has an authorized capital base of Rs.12.50 billion ($297 million),paid-up equity of Rs.8.98 billion ($213 million), reserve of Rs.5.75 billion ($136million) and net worth of Rs.14.83 billion ($349 million). The total borrowings byHUDCO stand at Rs.121.68 billion ($2897 million). Thus the debt-equity ratio ofHUDCO works out to 7.77.The key activities of HUDCO include:

Lending for housing programmes through various schemes such as urban housing, ruralhousing, staff rental housing, cooperative housing, working women's housing, housing

schemes through NGOs and CBOs and housing through private builders;

Lending for urban infrastructure, including land acquisition for projects, integrated landacquisition and development, city level infrastructure - water supply (rehabilitation,

augmentation, new source development/transmission projects), sanitation (rehabilitation,

augmentation, new sewerage and drainage projects, conversion of dry latrines,

construction of individual and community toilets), solid waste management (collection,

conveyance, treatment and disposal, energy recovery), transportation (roads, bridges, rail

and road transport terminals, airports, ports), etc., social infrastructure (health, education,parks, playgrounds), commercial infrastructure (shopping centres, commercial

complexes, office complexes), and integrated area development/new township projects,

etc.;

Consultancy services in the field of housing, township development and infrastructuredevelopment;

Promotion of Building Centers for technology transfer and support to building materialindustries; and

Training in human settlements and technical assistance to borrowing agencies.


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THE BORROWERS OF HUDCO ARE:

State Urban Infrastructure Finance and Development Corporations, Water Supply

and Sewerage Boards, Urban Development Authorities, State Housing Boards,National Capital Region Planning Board (NCRPB), New Town DevelopmentAgencies like City and Industrial Development Corporation (CIDCO), Mumbai,Municipal Corporations/Municipalities, Improvement Trusts, and private companiesand agencies.Since its inception, HUDCO has so far sanctioned 14821 projects with a project costof Rs.48.51 billion ($11.54 billion). The amount of loan sanctioned is Rs.31.66 billion($7.53 billion) against which Rs.17.82 billion ($4.24 billion) is already released.Housing loans approved amount to Rs.19.42 billion ($4.6 billion) against whichRs.12.30 billion ($2.9 billion) has been disbursed. HUDCO has so far contributed tothe development of 10.14 million dwelling units and 4.7 million low-cost sanitation

units. HUDCOs infrastructure financing portfolio is growing at a phenomenal rate.During the last 10 years HUDCO has sanctioned Rs.12.24 billion ($2.9 billion) forinfrastructure projects covering water supply, sewerage, drainage, solid wastemanagement, low cost sanitation, etc. HUDCOs operations extend over 1,760 townsand thousands of villages in the country.


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Types of Co-operative HousingSociety

Tenant Ownership:

Tenant ownership is a kind of ownership in which the land is owned by the

society, flats or owned by the members, subletting or transfer of flats are notallowed. Any renovation which takes place in the house need not requiredpermission from the society reason is the ownership of the house is in thehand of the tenant the society has no option to take any action against thetenant

Tenant co-partnership:

Land & flats are owned by the society and members pay rent. In such a casethe society has a right to take any action against the tenant reason so that this

property ownership lie in the hand of the society and any changes done in itrequired permission. If the permission is not granted then the person cannotdo any changes if the rule are broken the tenant is liable for the action againsthim by the society

Flat Ownership co-ops:

Flat owners jointly own the land this is the case where the flat ownership lie inhand jointly between the society and the owner there all the action are done

as per the regulation under the co operative act. And the deed which isprepared at the registration of co-operative any change have to be reported inthe letter form to the co operative register office any delay or not sending ofsuch intimation can deal with the action against the person liable for or thesociety.


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NATIONAL HOUSING AND HABITAT POLICY 1998

In 1994, India adopted the National Housing Policy (NHP), which recognizes the keyrole of the Government as facilitator rather than provider of housing services. TheNational Housing & Habitat Policy-1988 (NH&HP) is a continuation of the NHP. Itcalls for a housing revolution in the country and focuses on the changed roles ofvarious stakeholders in the housing development process in the new economicenvironment of liberalization and globalization. The policy emphasizes the need topersuade the private and cooperative sectors to take greater initiatives in thepromotion and development of housing through fiscal concessions and otherincentives. Though the move towards disassociation of governmental agencies from

direct construction is being witnessed since the early 70s, the NH&HP calls for acontinued positive role by the Government in housing of the poor. Rapid growth ofpopulation and increased urbanization on one hand and escalating land prices onthe other are responsible for widening the gap between demand for and supply ofhousing units. These factors squeeze the poor off land and marginalize them inurban housing markets. Recognizing this, the NH&HP suggests a number of areas ofintervention for governmental agencies to promote affordable housing for the poor,including availability of sites, housing loans at below-market rates, low-cost buildingmaterials and civic services.

The broad aims of the National Habitat and Housing Policy-1998 (NH&HP) are:

Creation of surpluses in housing stock either on rental or ownership basis;

Providing quality and cost-effective housing and shelter options to thecitizens, especially the vulnerable groups and the poor;

Guiding urban and rural settlements to ensure planned and balanced growthand a healthy environment;

Making urban transport as an integral part of the urban Master Plan;

Using the housing sector to generate more employment and to achieve skillup gradation in housing and building activities;

Promoting accessibility of dwelling units to basic facilities like sanitation anddrinking water;

Removing legal, financial and administrative barriers for accessing land,finance and technology for housing;

Forging strong partnerships between private, public and co-operative sectorsin housing and habitat projects.


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The NH&HP envisages a key role for the Government of India in promoting policy

and legal reforms, facilitating flow of resources to housing and infrastructure through

measures such as fiscal concessions to investors and promoting the creation of a

secondary mortgage market. The State Governments are expected to gradually

withdraw from direct construction of houses, liberalize legal and regulatory regime togive a boost to housing and support infrastructure, promote private sector and co-

operatives, and facilitate access of the poor to land, finance, low-cost and locally-

suited engineering solutions and participatory designs.

Two Million Housing Programme:

The National Agenda for Governancethe election manifesto of the present

Government recognizes Housing for All as a national priority. It has set a target for

the construction of 2 million additional houses every year 0.7 million in urban areas

and 1.3 million in rural areas. A programme of this magnitude is expected to result in

an investment of about Rs.80 billion in housing construction activity. This would alsofacilitate cement, steel and other building materials industries in addition to creating

substantial employment in this sector. Every million of rupees spent by the

construction industry generates about 75 man-years of employment.

RECENT BUDGETARY INITIATIVES

In recent years, housing and construction have emerged as top priority sectors for

policy-makers. Faced with recession and slow-down of economic activities, the

Government of India has realized the key role that construction Industry can play in

jump-starting the economy and provide gainful employment to people. Housing

construction has many forward and backward linkages and about 280 industries are

directly or indirectly linked to housing activities. Moreover, construction is the second

largest employment-generating sector in the country, next only to agriculture.

Considering these, the Union Budgets of 1998-99 and 1999-2000 have laid a great

deal of emphasis on creating an enabling environment for housing activities in the

country through the private sector.

The measures initiated by the Union Budgets to boost up housing activities include:

Additional equity support to HUDCO to the tune of Rs.1.92 billion in the 1998-99 budget and Rs.2.71 billion in the 1999-2000 budget of the Ministry ofUrban Affairs and Employment and Rs.0.5 billion in the1998-99 budget of theMinistry of Rural Affairs and Employment. These measures augmented theequity base of HUDCO by Rs.5.13 billion in a period of just two years asagainst the infusion of Rs.3.85 billion by the Government of India over aperiod of 27 years from the creation of HUDCO. The addition of Rs.5.13 billionof equity would enable HUDCO to leverage about Rs.42 billion from themarket for housing and urban infrastructure activities. HUDCO would be in aposition to support the creation of 1.5 million houses each year out of which 1million will be towards achieving the target under the Two Million Housing

Programme;


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Extension of tax holidays for approved housing projects allowing a deductionof 100% of the profits for the first five assessment years and 30% deductionfor another five years. This was made applicable to housing units upto 1500sq. ft. in the budget of 1999-2000. The facility will promote private sector

participation in housing activities;

Increase in deduction against income from house property for repairs and

collection charges from 1/5th

to 1/4th

and increase in the deduction for intereston borrowed capital in the case of self-occupied property from Rs.15,000 toRs.30,000 in 1998-99 budget. The latter figure was revised drastically toRs.75,000 in the budget of 1999-2000. This will promote better maintenanceof constructed housing stock in addition to promoting larger individualinvestments in housing;

Enhancement in the percentage of incremental deposits into housing activitiesfrom the banking sector from 1.5% to 3% to enable inflow of Rs.3.8 billion forlow-cost housing;

Inclusion of micro-credit and tiny sector as part of priority sector lending ofbanks to give a fillip to weaker section/low-income housing;

Extension of depreciation benefits in corporate employees housing from 20%to 40% to encourage corporate houses to take up housing for theiremployees;

Repeal of the Urban Land Ceiling and Regulation Act in 1998 to free thesupply of land for housing in urban areas, especially metropolitan cities.


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FUTURE PROSPECTIVE OF NATIONAL HOUSING

POLICY

Although the National Housing and Habitat Policy emphasizes the facilitating role ofthe Government in housing, the public sector agencies are not absolved of theresponsibility of providing housing to those segments of the people who cannot beserved by the market. However, a new approach is called for issues such asbeneficiary consultations on the location, design and cost aspects of shelter,affordable shelter options for the very poor, integration of income generation andhousing, eligibility criteria for availing housing finance and providing a collateral forthe same, easier availability of plots and houses from public and private providers,assistance for house construction, speedy approvals for construction ofinfrastructural services, simplification of documentation and procedures, etc. Housing

subsidies often benefit the salaried employees of the organized sector including theGovernment and the recipients of tax concessions for housing investment. Implicitsubsidies to beneficiaries of social housing schemes arise from loan waivers, lowcost recovery rate, concessional interest and inefficiencies absorbed by theagencies. The schemes involving a combination of concessional loan and subsidyaffect the extension of viable finance on non-subsidized terms, based on rigorouslyenforced cost recovery. These issues need to be re-examined.Part of the resources needed for the shelter of the urban poor could be diverted fromcurrent outlays by an objective review of all subsidies and mis-applied resources,and by channeling institutional finance. Additional resource mobilization could be bya combination of measures to activate beneficiary savings and channeling loans on

viable terms by financial institutions. These measures could be catalyzed andleveraged by budget provisions for land and services, equity for housing agenciesand support to open market lending on credit-rated terms. Steps are needed foravoiding the dispensation of ex-post and implicit subsidies, to provide for transparentand well-targeted subsidies, and to prevent the leakages of subsidies undergovernment programmes and unwarranted fiscal concessions to better-off sections.Subsidies may perhaps be administered in the form of subventions through credibleNGOs for group shelter activity and savings effort.The State governments need to adopt a state-wide policy on the regularization oftenure and conferment of leasehold or occupancy rights to slum-dwellers at least inareas not needed by public agencies. The National Housing and Habitat Policyemphasize the grant of occupancy rights to slum-dwellers and providing support forprogressive slum redevelopment and up gradation schemes. The slums and squattersettlements could be categorized as those needing urgent relocation, those that canbe considered for conferment of occupancy rights/title and up gradation orredevelopment in situ, and those which can be provided with basic services withoutconferment of title. This categorization process should be dovetailed with theprocess of Master Plan revision and formulation of flexible development planningnorms. It would enable the relocation of slum-dwellers and change in land use plansto incorporate the regularized slums into the plan-scope of the city. Also, physicaland social planning should be on city-wide basis so as to integrate the informal

sector in the city's economy and social life. The State and city agencies need to beshelter up gradation and extension including toilets, renewal of congested inner city


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crawls, serviced sites for the poor, in situ redevelopment of slums with assistance ofthe private sector and co-operative involvement, night-shelter and sanitation facilitiesfor the new migrant landless persons, relocation of families from sites urgentlyrequired for public purposes, and financial and technical assistance on a group orindividual basis for incremental construction.

In order to facilitate greater private and co-operative sector participation in housingactivity, as well as public-private partnership, there is the need to: first, undertakelegal reforms; second, to undertake land policy reform to provide easier access todeveloped land; third, provide suitable fiscal measures and incentives to encourageinvestment of household savings in home ownership and to induce the corporatesector to invest in employee housing; fourth, carefully assign property rights andmake them legally enforceable; fifth, create enabling institutions for providing anenabling environment by restructuring existing institutions and by creating new ones,if required; and sixth, widen the existing database for strategic planning to coveraspects relating to ownership of land and property, housing starts and completions,etc.

With the Union Budgets for 1998-1999 and 1999-2000 according a new thrust tohousing in the National Agenda for Governance, the Central and State Governmentshave initiated a reform agenda for housing sector reforms. The reform areas includethe following:

Public-Private Partnerships to ensure a fair return on investment to the privateland owners/developers through guided development and availability ofserviced sites for allotment to low income families at affordable prices. Fiscalincentives and provision of infrastructure can induce private sectorentrepreneurs to housing including that for the poor;

Measures to control the continuing spiral of land prices, speculation, shortageof developed land, and increasing pace of unregulated and environmentallydamaging land development;

Increased availability of developed land through measures such asreservation of 5% of the land in larger layouts as land bank for economicallyweaker sections and low-income groups, land pooling, land readjustment,etc., steep vacant land tax, etc.;

Restructuring of Housing Finance Institutions (HFIs) to meet the housing

finance needs of the formal sector as well as the poor and the informal sector.A revision of current eligibility norms that inhibit the flow of a significantproportion of funds from the formal sector to the poorer sections of thepopulation is called for;

Establishment of linkage with informal credit systems along with grant ofsecurity of tenure to slum-dwellers and reforms related to land title, buildingregulations, etc., with a view to assisting the poor with access to institutionalfinance for housing;

Community resource mobilization through schemes such as Insurance-Linked

Savings-cum-Loan-cum-Subsidy scheme for shelter for the poor engaged in


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encouraged to formulate city plans for developing varied shelter options for the urbanpoor, such as the provision of essential services, informal sector activities. Under the scheme for a nominal one-time premium

of Rs.150 per house, the houses are insured for Rs.25,000 against damagesdue to fire, lightning, flood, storms, tempests, cyclones, etc.;

Increased involvement of NGOs/CBOs/Cooperatives to promote self-help,mutual-help, thrift and credit, self-management, community empowerment,etc. There is a need for shifting to community-based non-subsidised loanmechanism, as Adopted by Self Employed Womens Association (SEWA) inGujarat State, targeted at poor and sustained by beneficiary savings forshelter and group guarantee;

Promotion of high density housing in selected areas in cities throughappropriate amendments to zoning and land use regulations to obviate thenecessity of costly land acquisition and to avoid high infrastructure costs;

Adoption of small lot zoning in parts of large lot layouts making it mandatoryon the part of developers to divide part of the lands being developed intosmall plots to make them available to poor beneficiaries;

Promotion of rental housing through the balancing of landowner and tenantinterest so that supply of rental housing at affordable rents is ensured andthere is an incentive for people to build houses for themselves and for others;

Propagation of cost-effective and eco-friendly building materials andtechnologies and up-scaling of innovative products to make them marketableand amenable for mass application;

Municipalisation of programmes of poverty alleviation and slum-up gradationin urban areas to make elected Municipalities responsible for these functionsand mobilize local support and effort.


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PROBLEMS OF HOUSING SOCIETY

(a)Scarcity of land:In Asia, the rate of urban growth has led to an increase in the

construction activities and real estate which is as high as 42% of GDP as compared

to12% in Australia. As of December 2002, there were approximately 710 million

homeless people in India. And at the end of 8 th 5 year plan there will be a housing

shortage or 3.5 crores houses. This is also because of tremendous growth in

population and contribution of joint family making requirement of separate houses for

each nuclear family.

(b)Inadequate finance:In the measure metros, housing finance cooperatives are

offering loans at very competitive rates. However in semi urban and rural areas,

there is no institutional finance available for building houses. The housing urban

developmental cooperative (HUDCO) has launched retail finance for rural and semi

urban areas and under them NIWAS scheme sanctioned over 1500 crores and build

over 1 million houses as on dec 2004.

(c)Malpractices of builders:The allotment of land is subject to bureaucratic delays,

competition and political influence. Further the cost of the land especially in a city like

MUMBAI is highly speculative and is on this increased cost to the members making

the real estate a distant dream for a common man. They also use substandard

products like steel and cement and the quality of construction also suffers.

(d)Disinterested members :In the busy city like Mumbai, both husband and wife is working

having a very hectic work schedule. They are already under pressure of managing

there households and careers. They do not have time to socialize and neither

contributes proactively for the development of housing cooperative.

(e)The office bearers are poorly paid:

Most of the staff of housing cooperative is either retired peopleor people who have taken VRS and are compensated very poorly for services they


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offer. The young blood is missing in management of cooperative as they do not pay

handsome salaries.

Remedial measures to solve the problems

Following remedies are suggested for solving the problems of co-operative housing

societies:

1.)Supplying materials on priority basis:The building material should be provided on priority basis. There

should be a quota of this material to apex co-operative housing society. The registrar

of the society should have control on the quota allotted to co-operative housing

society.

2.)Allocate land on priority:Government should give preference to co-operative housing

societies while allocating land as to start the work by the societies or otherwise

whose existence is only on paper.

3.)Bye-laws:-

There are no systematic bye-laws of co-operative housingsocieties in the country. All co-operative housing societies should adopt model bye-

laws suggested by the committee appointed under the president-ship of S.T. Raja.

Thereby, the registrar of societies can have control over the working of their

societies.

4.)Financial assistance:-Agencies like LIC, HUDCO etc. should provide housing loans at

concessional rates. Government should try to make housing societies more strong.

Government should establish central housing finance institute to provide finance to

apex housing societies.

5.)Tax concessions:-The houses build by co-operative housing societies should get

concession in taxes and certain incentives should be given.

6.)Membership to houseless people:-The membership of the housing society should be given only to

the people who have no house.


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Procedure for Registration of cooperative Society

On receiving such applications the Asst. Registrar through his subordinate will

conduct an inquiry to find out the feasibility and economic viability of the proposed

Cooperative Society and whether its proposed bye laws conforms to the Meghalaya

Coop. Acts and Rules. In case a proposed Cooperative Society is either a, Fishery, /

Dairy/, Poultry/, Piggery/or Handloom etc., views and comments from concerned

department has to be obtained before registration of such society.

After inquiry report with views and comments from concerned Department are

found favorable, Permission is given to complete the necessary formalities for

Registration.

A date will be fixed for holding the inaugural general meeting of the promoter

in which members will finally decide on adoption of the Bye-Laws and mattersconcerning with day-to-day functioning of the Society including constitution of

Managing Committee, operation of Bank Account etc.

In the inaugural General Meeting, one of the Promoters presided over the

meeting. An officer from the Department is deputed to attend the meeting and help

the promoters in organizational matters. In this meeting they will decide what type of

a Society they want to form, how many persons would join as members of the

Society ,l elect the office bearers of the society and decide the authorized sharecapital and the share capital to be contributed by each members.

All the papers duly signed by the Promoters are to be submitted to Asstt.

Registrar of Coop. Societies who after satisfying himself on all points, register the

society and its Bye-laws.

The certificate of Registration in the form set forth and the schedule is issuedby Asstt. Registrar of Coop. Societies after registration of the society. A copy of


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registration with Bye-laws is sent to the applicant and also to concerned

Departments.

1) Registration of Co-operative societies

A co-operative society can be registered in Maharashtra State with the Registrarof Co-operative Societies.

Any person competent to contract, as per the Indian contract Act, 1872 can join inthe formation of a co-operative.

A group of ten persons, who reside in the area of operation of the proposedsociety and are from different families, can join in application for registration of asociety.

A society with the objects of promoting the economic interests or the generalwelfare of the members only can be registered.

No society which is contrary to the policy directives of the State can beregistered.

Registration can be obtained from the registrar on filling up the application formwith the necessary fees and the bye-laws.

Division/Amalgamation/Transfer and conversion of a co-operative is allowed.A Co-operative Society can enter into collaboration with any Government

Undertaking or any other undertaking with the prior permission of the State

Government for business.It can also enter into a partnership with other co-operatives.

2) Certificate of incorporation as evidence

A certificate of incorporation under this Act shall be conclusive evidence thatall the requirements of this Act in respect of registration and matters precedent orincidental thereto have been complied with:

Provided that nothing in this section shall affect any provision of this Act relating to

the winding up or dissolution of the society or the cancellation of its registration.

3) Classification of Housing Co-operatives

(a)Tenant Ownership: In the case where the land is owned by the Society andthe structure on the plot is owned by the members. Individual members are

allotted plots by the co-operative to construct their houses. The societycreates infrastructure and may also arrange the finance for the members.


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(b)Tenant Co-partnership: The land and the constructed structure is owned bythe society and the members who are allotted the flats have the easementrights.

(c)Builder Co-operative: where the builder floats a housing scheme and sellsthe flats. The buyers of the flats then organize into a housing society. Suchsocieties are merely service societies or maintenance societies.

(d)Ownership cooperative: - In this case, people working in an organizationcome together and form them into a housing cooperative society. They gettheir society register, apply to MAHADA. (MAHARASHTRA HOUSING ANDDEVELOPMENT AUTHORITY) and get a plot allotted to them in LIG, MIG,

and HIG i.e.: low income group, middle income group, high income group.Once the plot is sanctioned they approach a construction company anddepending on their budget build up housing society. E.g.: Gulmoharcooperative housing society situated at Ceissor road, Andheri (west) is thehousing complex of the ICICI officers.

4) Terms and Conditions to be complied with for admission to membership

1. No person shall be admitted as member of a co-operative society unless-

he has applied in writing in the form laid down by the co-operative society orin the form specified by the Registrar, if any, for membership along with adeclaration .on oath that he is-net 9 member of any other co-operative societyhaving similar objects;

his application is approved by the committee of the co-operative society inpursuance of the powers conferred on it in that behalf and subject to suchresolution as the general body may in pursuance of the powers conferred on itin that behalf from time to time pass, and in the case of nominal, associate, orsympathizer member by an officer of the society authorised in that behalf bythe committee.

he has fulfilled all other conditions laid down in the Act, the Rules and theBye-laws;


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in case of a firm, company or body corporate, society registered under thesocieties Registration Act, 1860, a public trust registered under any law for thetime being in force relating to registration of public trust or a local authority,the application for membership is accompanied by a resolution authorizing itto apply for such membership, and the sanction of the Lt. Governor has been

accorded.

in case of a Cooperative Housing Society, he has been a resident of theNational Capital Territory of Delhi-for a minimum period of three years at thetime of applying for a membership in such society.

2. In case of vacancy in a housing society including group housing society where

layout and building plans have been approved by the competent authority, the

same shall be filled by the committee by notifying It in leading daily newspaper ofDelhi in Hindi and English. In case the number of applications is more than the

notified vacancies the membership shall be finalized through draw of lot in the

presence of authorised representative of the Registrar.

5) Management of a cooperative society

As per the Bye-law, there will be a Committee of Management, initially nominated bythe Registrar of Cooperative Societies for a period not exceeding 3 years and

subsequently elected by the General Body once every 3 years. Among the

members of the Committee of Management there shall be office-bearers like

President, Vice-President, Secretary, Treasurer etc. It will be the responsibility of

this Committee of Management to carry on the executive management of the society

in accordance with the provisions of the Act, Rules and Bye-laws and as per the

annual budget and programme of action approved by the General Body each year.

The final authority of the Society vests in the General Body of the Societycomprising of all the members.

Every Society shall call Annual General Meeting within a period of threemonths after the date fixed for completing or drawing up of its accounts for theyear.

At every Annual General meeting, the Managing Committee shall lay astatement of loans given to the members of the Managing Committee andtheir family members, Income and Expenditure Account, Balance Sheet, aReport by the Managing Committee regarding the Societys affairs.

Failure to do so may attract the disqualification of the membersof the Managing

Committee and other penalties.


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A Special General Meeting can be called by the Chairman of the Co-operativeor by majority of the members of the Managing Committee. Members too canrequisition for such a meeting if 1/5 th of the total members of the Societyendorse this requisition.. The Registrar also has the powers to call for aSpecial General meeting. So can the committee of the Federal Society do so.

Failure to call for this meeting may attract penalty for the Managing Committee.

It is the duty of every Managing Committee to arrange for holding of electionsof its members before the expiry of its term.

Election to a Specified Societyshall be conducted by the Collector and that of a

Notified Society by the Registrar.

Management of the Society vests in a duly constituted Managing Committee.Reservation for the weaker section, women and scheduled castes/tribes has

been provided in the Managing Committee.

No committee is duly constituted unless the Registrar publishes the names ofthe members of the Managing Committee along with their addresses.

If a Managing Committee of a Society is not duly constituted, an Administratormay be appointed by the Registrar.

An Administrator can also be appointed (for a period of six months) by theRegistrar if the Managing Committee is removed for negligent performance asper the provisions of Co-operative Law.

A memberof the Managing committee can also be removedby the Registrar for

negligent performance.

The Managing committee can appeal against its removal / dismissal.Office bearers of a Society can be removed by the way of No confidence

motion. Such a no confidence motion has to be supported by at least one-third of the members of the managing Committee. Removal from office iseffected only after the resolution is passed by a simple majority in theManaging Committee.

6) Members of societies

1.)The members of a society which is formed under this Act shall be the personswho sign the application for membership on the formation of the society, and anyother persons who are admitted to membership in accordance with this Act andthe rules of the society.


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2.)No rights of membership shall be exercised by any member until he has madesuch payment to the society in respect of membership or acquired such share orinterest as is provided in the rules of the society in that behalf.

3.)A person shall cease to be a member in any of the following circumstances, thatis to say-

(a) where his shares are transferred to another person in accordance

with the rules of the society, and the transferee is registered as

holder in his place;

(b) where his shares are forfeited in accordance with the rules of the society;

(c) where any power of sale (whether expressed or implied) in any mortgage

given by the member to the society is exercised by the society;

(d) where he becomes bankrupt or insolvent under any law relating to

bankruptcy or insolvency and the official receiver or assignee disclaims in

accordance with the provisions of such law;

(e) on death:

Provided that the estate of the deceased person shall remain liable and his

executor or administrator shall be and may be registered as the holder of the

shares as such executor or administrator (whether eligible to be a member

of the society or not) until some eligible person is registered as the holder of

the shares by transfer from the executor or administrator or until the shares

are withdrawn or discharged in accordance with this Act and the rules of the

society, and while any such executor or administrator is so registered he

shall be deemed to be and shall have the rights and obligations of a member

of the society for all purposes other than voting at meetings of the society

and becoming a director thereof;

(f) where the contract of membership is rescinded on the ground of

misrepresentation or mistake;


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(g) where he ceases to be a member in accordance with the rules of the

society;

(h) where the value of his shares is repaid or a refund in respect of his

subscriptions is made to him in accordance with the rules of the society.

4.)Where shares are held by the executor or administrator of a deceased member,the Board may in its discretion by notice in writing to the executor or administratorcall upon him to transfer the shares to an eligible person or to withdraw ordischarge the shares within six months after receipt of the notice or within such

further time as the Board may in any particular case allow, and unless the sharesare so transferred withdrawn or discharged they may at the discretion of thesociety be forfeited and dealt with as forfeited shares in accordance with this Actand the rules of the society.

5.)Where a person becomes the trustee within the meaning of the CommonwealthAct known as the Bankruptcy Act 1966 as amended from time to time of theestate of a member or deceased member the trustee may be registered as theholder of the shares of the member as such trustee (whether eligible to be amember of the society or not) until some eligible person is registered as the

holder of the shares by transfer from the trustee or until the shares are withdrawnor discharged in accordance with the provisions of this Act and the rules of thesociety and while the trustee is so registered he shall be deemed to be and shallhave the rights and obligations of a member of the society for all purposes otherthan voting at meetings of the society and becoming a director thereof.


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Rights and Duties of Members of Society

Rights:-

1. Right to get certificate of allotment:-

Every member of a co-operative housing society, whether registeredbefore or after the commencement of this Act, to whom plots of land or dwelling units

have been allotted, shall be issued certificate of allotment by the co-operative

housing society under its seal and signature in such form as may be prescribed.

2. Right to hold according to terms of allotment:-

Irrespective of the provisions of the Transfer of Property Act, or the

Registration act, any allotment or re-allotment of a plot of land or dwelling unit in abuilding of a co-operative housing society to its member as per terms of allotment

shall entitle such member to hold such plot of land or dwelling unit with such title or

interest.

3. Right to transfer / inherit the property:-

The right, title and interest in a plot of land or dwelling unit in a building

of the co-operative housing society (including the undivided interest in common

areas and facilities) shall constitute a heritable and transferable immovable property.

However, such land or building shall not be partitioned for any purpose whatsoever.

4. Right to undivided interest in common area:-

Every member of a co-operative housing society shall be entitled to an

undivided interest in the common areas and facilities pertaining to the plot of land ordwelling unit allotted to him.


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5. Right to use the common area:-

Every member of a co-operative housing society to whom a plot of landor a dwelling unit has been allotted shall have the right to use the common areas and

facilities as prescribed by the co-operative housing society. In case of any violation

or misuse by a member, the management committee is empowered to recover

damages.

6. Right to attend meeting and vote:-

A member has right to attend all the meetings of the society and votethereat.

7. Right to contest election:-

A member has right to stand for the election of the management

committee.

8. Right to seek information from the society:-

A member can seek information relating to any transaction of the co-

operative housing society and the society is required to furnish such information

within 30 days from the receipt of request. The society may fix the application fee for

this purpose.


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Duties:-

The rights of members underline the duties of the housing society. The

society should not discriminate between members and should not place unlawful

restrictions on them. Besides this, the society should be prompt in attending to the

complaints and grievances of the members as to provision of services.

Liabilities of Members of Co-operative Society

1.)A member shall be liable to the society for the amount, if any, unpaid on theshares held by him, together with any charges and other moneys payable by himto the society as prescribed by this Act or the rules of the society.

2.)Where, under or in relation to any contract or policy of life insurance or similarcontract in a form approved by the registrar after consideration of a reportthereon from the Government Statist, or by virtue of any legal or equitableassignment of or trust created in respect of any such contract or policy, or

pursuant to any scheme relating to life insurance approved by the registrar afterconsideration of such a report, provision is made whereby, in the event of thedeath of a member of a society to whom the contract policy or scheme applies orin the event of the death of a member's spouse or domestic partner to whom thecontract policy or scheme applies, moneys will be available for or towards thedischarge of the member's liability to the society, then the society shall beempowered-

(a)to receive from any such member, at such times as are agreed upon bythe member and the society, the amount of each periodical premium orcontribution payable by him in respect of the contract or policy or pursuantto the scheme; and

(b)to pay or otherwise deal with each such amount in such manner as thecontract policy or scheme requires or allows; and

(c)if the member defaults in payment of any such amount at the agreed time-

to make payment thereof pursuant to the contract policy or schemeon his behalf or to take such other action as the contract policy orscheme requires or allows; and

to recover from the member any amount in respect of which themember has made default as aforesaid-and any amount sorecoverable shall until paid be a debt due to the society by the


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member and the provisions of this Act shall apply in relation theretoaccordingly. The society may make either by itself or in conjunctionwith any other society or societies any contract or arrangementrelating to or connected with the carrying into effect of this sub-section and may carry out any such contract or arrangement.

3.)Where, under or in relation to any contract or policy of accident or sicknessinsurance or similar contract in a form approved by the registrar afterconsideration of a report thereon from the Government Statist, or by virtue of anylegal or equitable assignment of or trust created in respect of any such contractor policy or pursuant to any scheme relating to accident or sickness insuranceapproved by the registrar after consideration of such a report, provision is madewhereby in the event of any accident to or sickness of a member of a society towhom the contract policy or scheme applies or in the event of any accident to orsickness of a member's spouse or domestic partner to whom the contract policyor scheme applies moneys will be available for or towards the discharge of themember's liability to the society.

Responsibility of members and Co-operatives

The relationship between tenant and co-operative is not a simple one. The co-

op supplies the tenant with a service (housing) according to a contract (tenancy

agreement/license). The tenant pays rent in return for the housing they occupy

according to the contract.

However, the co-operative is run by its members. The tenant is a member and

as such is responsible for ensuring that the co-op delivers the service. A co-operator

can simultaneously expect to receive a service whilst being responsible for its

delivery.

The member is responsible:

as a member, to participate in the smooth operation and democracy ofthe co-operative. To attend general meetings. To participate in setting

policy.

as a tenant, to pay rent. To behave responsibly towards other tenantsand other duties as laid out in the tenancy agreement/license.

as a director, to ensure that the co-operative is run in a fit & proper manner.All directors are responsible for ensuring that tasks are carried out. Even


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when tasks have been delegated, all directors are equally responsible formonitoring them. To make management decisions.

The co-operative is responsible:

to provide tenants with suitable housing, and other duties as laid out inthe tenancy agreement/license.to conduct business in a fit & proper manner.to keep accurate records & accounts of the business of the co-operative.

In practice many of the co-operatives tasks are delegated to individuals. However, all

directors are equally responsible for ensuring they are carried out and makingchecks.

Privileges and Duties of Society

A Society is a Body Corporate by the name with perpetual succession andcommon Seal.

It can acquire, hold and dispose off property in its name.It can enter in a contract.Institute and defend suits and other legal proceedings.It is exempted from compulsory registration of Instruments relating to shares and

debentures of Society under the Indian Registration Act 1908

The society has claim only next to the Government, on the property and interestof the borrowing members.

The society has claim over the sale price of agricultural produce of the borrowingmember.

It is mandatory on the part of the employer to deduct from the salary of theemployee, dues of the Society, if agreed upon by the member.

The Society can receive deposits and loans from the members and other personswithin the area of operation of the Society and /or on conditions imposed by theRegistrar

Loans can be advanced to the members only. With the prior permission of theRegistrar, loans can be advanced to other Societies.

The Society has to keep and maintain updated records in prescribed format.There are restrictions on the transactions with the non-members.


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Property and Funds of Co-operative Society

No funds shall be divided among its members, other than the netprofits earned by the Society.

The societys funds cannot be utilized to defend any proceedingsfiled by or against any office bearer of the Society, in his

personal capacity under sections 78, 96 or 144-T of the Maharashtra

Co-operative Societies Act, 1960.

Remuneration can be paid to the Managing Committee members forservices provided by them to the Society.

Net Profit earned by the Society can be appropriated by themembers with the approval of the Annual General Meeting.

Reserve fund shall be maintained by the Society.

Investments of Funds shall be made as per the guidelines prescribedin the Maharashtra Co-operative societies Act, 1960.

Audit, Inquiry Inspection and Supervision of Societies.

The Registrar of Co-operative Societies makes it compulsory forevery Government -aided Co-operative Society to audit its accounts

at least once in a co-operative year (i.e. April - March).

All the other Societies also have to get their accounts audited by aCertified Auditor once in every co-operative year.


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A Registrar has powers to order the Society to be re-audited. This ishowever done by him suo-moto or in the case where 1/3rd members

of the Society apply to him for re-audit.

The Registrar can inspect the working of the Society on his own oron application of its creditors.

The Registrar can commission an inquiry into the affairs of theSociety on the basis of the audit report or an inspection report. He

can appoint an Inquiry Officer and conduct an inquiry through him.

Similarly he can also conduct inspection of a Society just to ascertainthat all the Books of Accounts are being maintained properly and

that the affairs of the Society are being conducted reasonably by the

Managing Committee.

The Registrar can order for compensation, if it is found That anyperson has misapplied or retained any property, or money of theSociety, or has caused breach of trust.

Change in Name of Society

1. The name of a co-operative society may be changed under section 14

so however that it does not refer to any caste or religious or regional

denomination and is not inconsistent with the objects of the co-operative society.

2. Every change in the name of a co-operative society shall be made by

amendment 6f its bye-taws and shall be notified in the official Gazette.

3. After the change in the name is approved by the Registrar the Co-

operative Society shall send the original registration certificate for


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amendment to the Registrar, who shall return the same to the

cooperative society duly amended.

Change in Liability

1.)The change of liability of a co-operative society from unlimited to limited andvice-versa or in terms of multiple of share capital, shall be secured by passing

a resolution in that behalf at a general meeting of the co-operative society

indicating in clear terms the manner of changing the liability. The co-operative

society shall give 30 days notice in writing of such meeting to all its members

and creditors and shall furnish them with copies of the resolution proposed to

be moved at the meeting. After the resolution is duly moved and passed, acopy thereof shall be send to the Registrar within three months of its passing.

2.)Every notice to be given by the co-operative society under sub-sec. (2) ofsection 14 shall be sent by post under certificate of posting or other wise to

the address of each of its members and creditors gs recorded in the book of

the co-operative society. A copy of such notice shall be exhibited on the

notice board of the co-operative society and a copy shall also be sent to the

Registrar for exhibition on the notice board in his office; and thereupon, noticeof the resolution to change the form or extent of its liability shall be deemed to

have been duly given to all its members and creditors, notice not being send

to their correct address or notice not being received by them, notwithstanding

Documents

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