Three-Member Directive Empowers Housing Society Governance

Introduction:

In the vast landscape of Maharashtra's Co-operative Societies Act of 1960, Section 78 stands as a beacon of authority vested in the Registrar to act in specific, predefined situations. These situations include when the managing committee defaults, exhibits negligence, engages in actions against the society or its members, disobeys co-operative authorities' directives, fails in diligent duty, or when the society's functioning stagnates or teeters on the brink of collapse.

Upon the committee's removal, the Registrar wields two choices. The first, rarely chosen, involves appointing three or more society members unrelated to the ousted committee. The second option often sees the same individual managing multiple societies as an administrator.

The appointment of administrators in co-operative housing societies is a growing trend, usually in response to member complaints that the Registrar deems valid.

Role of the Administrator:

Administrators, stepping into the void left by delinquent committees, are entrusted with a pivotal role in upholding the standards of good governance. To maintain transparency and objectivity, administrators are obligated to divulge comprehensive financial information, including income, expenditure, receipts, and payments, on a monthly basis. Furthermore, administrators must communicate their decisions to members, accompanied by the reasons behind them.

The law allows administrators to serve for a maximum of six months, extendable by an additional three months with documented reasons and society-wide notification. Administrators must exercise all their powers – whether judicial, quasi-judicial, or administrative – objectively and reasonably. Their primary goal is to rectify the situation and expedite the electoral process. Administrators serve as interim custodians, overseeing society matters until a new committee is legally formed. Prolonging their tenure beyond the necessary duration can result in complications. As confirmed in the case of K. Shantharaj & Anr v M.L Nagraj & Ors (Writ Appeal Nos.1464-66/94). by the esteemed Supreme Court, it's important to note that administrators lack the authority to admit new members; their sole responsibility is to conduct elections in compliance with the law and society's bylaws.

Instances of Arbitrary Acts by Administrators:

Common grievances include delayed society audits or a lack of transparency in sharing audit findings with members. There are also instances of administrators managing more societies than prescribed and extending their terms beyond the specified duration. Unauthorized flat transfers have also cropped up. Administrators' powers are circumscribed; they replace managing committees but cannot surpass their authority. Legal precedents confirm that administrators lack the authority to enroll new members; their primary duty is to organize elections.

Positive Changes Proposed Through the Circular:

The Co-operative Commissioner, Mr. Anil Kawade, has issued a circular laying down guidelines for housing societies. Key points include limiting auditors to three consecutive years, encouraging members to address grievances through cooperatives courts rather than the registrar's office, digitalizing society records, ensuring swift recording of meeting minutes, and establishing an advisory committee to address grievances.

The circular also recommends a three-member administrative board when selecting an administrator, which includes at least one society member. This adjustment aims to bolster transparency and inspire confidence among society members regarding the administrator's integrity. The circular places great emphasis on the role of the Advisory Committee, composed of representatives elected by the General Assembly, in resolving complaints.

Should complainants remain unsatisfied, they can escalate the matter through a hierarchical process involving various registrar offices. Additionally, the circular advocates for strict rules, such as changing certified auditors every three years and maintaining computerized records. It highlights the importance of appointing managers well-versed in the Cooperative Act, Rules, and Bye-laws and even suggests sharing managers among organizations with the support of federations.

Probable Consequences of Implementing the Circular:

This circular is poised to usher in a new era of control, accountability, and transparency for around a thousand societies in Maharashtra that have been overseen by administrators due to internal disputes. It is in alignment with the directive principles of the Indian Constitution, championing autonomous, democratic, and professionally managed cooperative societies.

The implementation of this circular is expected to curb arbitrary decision-making, extravagant spending, and the high-handedness of administrators appointed by the Deputy Registrar of Co-Operative Societies, ensuring much-needed transparency, oversight, and accountability.