Weak governance and lack of transparency continue to be among the most common concerns raised by cooperative housing society (CHS/the Society) members. Whether it is failure to conduct mandatory audits, arbitrary charging of expenses, or concentration of power in the hands of a few office-bearers without proper elections, such issues can significantly affect finances and day-to-day functioning. This week’s queries highlight these concerns and outline the remedies available to members under the co-operative framework, including the option to escalate to regulatory authorities where necessary.
 
Failure To Audit Accounts and Alleged Misuse of Society Funds
 
Question: Our CHS has not audited its financial accounts since it was formed, but continues to increase maintenance charges. When asked for reasons and justification in writing, they do not reply. Also, the managing committee members are allegedly misusing the Society funds and have illegally encroached on CHS premises.
 
Answer:  Without auditing the yearly accounts of the CHS, the Society’s balance sheet cannot be circulated with the annual general meeting (AGM) notice. Kindly make a written complaint against the managing committee of the Society to the deputy registrar of cooperative societies of your area at the earliest.
 
For other wrongs done by the managing committee, make separate complaints to the deputy registrar of cooperative societies. The deputy registrar will ask the managing committee of your Society to explain their actions and to correct them.
 
If the managing committee does not respond, the deputy registrar may appoint an authorised officer by dissolving the managing committee to correct the wrongs done by the present managing committee. The authorised officer will then call for elections to appoint a new managing committee.
 
Mechanised Parking: Who Should Bear Maintenance and Operating Costs?
 
Question: My Society has 215 flats, of which 50 flats have been allotted mechanised parking. Will the annual maintenance charges and other related expenses for such mechanised parking be borne equally by all flat-owners (since parking is a common area and not owned by flat owners), or will such expenses be borne only by the mechanised parking allottees?
 
Answer: Mechanised parking electricity charges, the operator’s salary and yearly maintenance of the mechanised parking should be shared by all those allotted mechanised parking. If the Society is not following this, then under bye-law no. 174(B)(iv), by hiring a good advocate, you may make a complaint against the Society in the cooperative court.
 
Secretary Holding Power without Elections: What Can Members Do?
 
Question: I have been staying in Bhayander for the past 10 years. We have a secretary in our CHS who has been in this position for the past 25 years. He does not provide any information or accounts regarding the maintenance amounts.
 
Also, whenever anyone sells or purchases a flat, he collects money, but there is no clarity on how this is accounted for. Meetings are only called to ask for money for repairs, but there are no meetings to change the secretary.
 
The cashier and chairman have left their positions without notice and, currently, the secretary is managing all three positions himself without a chairman or treasurer.
 
Again, he is asking for maintenance money but is not providing any information about funds collected through monthly maintenance or flat transfers. Where and how can I make a complaint? I do not wish to give my hard-earned money if it is being misused.
 
Answer: You should make two separate complaints against your Society’s secretary to the deputy registrar of cooperative societies of your area, as follows:
 
  1. Make a complaint under bye-law no. 174(A)(xxii) for not holding elections for so many years and for running the Society without a chairman and treasurer. Society elections should be held once every five years through a person appointed by the state cooperative election authority.
     
  2. Make a complaint under bye-law no. 174(A)(xii) for not maintaining the Society’s financial accounts properly or for charging illegal amounts. In this complaint, if the annual general meeting (AGM) has not been conducted and the balance sheet has not been circulated, mention this. The deputy registrar may appoint an authorised officer to look into the irregularities, rectify them, and call for fresh elections.
 
You should be persistent in following up on your complaints with the deputy registrar. You may also file a right to information (RTI) application with the public information officer (PIO) of the deputy registrar to obtain information on the action taken on your complaints.
 
If no action is taken or the action is unsatisfactory, you may escalate the matter to the district deputy registrar. You may also file a Lokshahi Din complaint with the district collector against the deputy registrar to seek redressal.
 
 
  NOTE
  We will not be answering queries posted in the comments. Only questions sent through the Moneylife Foundation's Legal Helpline will be answered. If you want to seek guidance or ask questions to Mr Shanbhag, kindly send it through Moneylife Foundation's Free Legal Helpline. Here is the link: https://www.moneylife.in/lrc.html#ask-question
 
Disclaimer: The guidance provided in these columns and on our Legal Helpline is on the sole basis of the facts provided by the reader/questioner and does not amount to formal legal advice in any form whatsoever. 
 
(Shirish Shanbhag has an MSc in Organic Chemistry, a Diploma in Higher Education, and a Diploma in French and has completed his LL.B. in first class in 2021. Before his retirement, he was a junior college teacher at Patkar College from July 1980 to May 2012, teaching theoretical and practical chemistry. Post-retirement in 2012, he started providing guidance and counselling to people on several issues, specifically focusing on cooperative housing society-related matters. He has over 30 years of hands-on experience in all matters about housing societies and can provide out-of-box solutions for any practical issue.)