REDEVELOPMENT OF HOUSING PROJECTS IN MUMBAI
UNHEALTHY AND UNLAWFUL PRACTICE BY CERTAIN DEVELOPERS IN REDEVELOPMENT OF HOUSING PROJECTS IN MUMBAI :-( Aftermaths of Development Agreements executed with Societies)
Now a day, the Redevelopment proposals are grossly mooted by the Developers in old and dilapidated Cooperative Housing Societies in Mumbai Central and Suburbs.
As per the Plot area and the loadable TDR/FSI in permissible ratio i.e. 1:1, 1:1.3, 1:2 or 1:2.5 or as applicable, the Developers begin discussions with the Office Bearers/Architect/members of the Societies for the Redevelopment of Society’s property.
The Developers offer the members a bigger and posh dream houses with additional carpet area/rooms over the existing ones, displacement compensation for alternate accommodation, corpus fund and eye-catching amenities etc.
The Developers construct either additional flats or commercial joint on the remaining area available at their disposal on the same plot and sale it in open market to earn the surplus. The Development Agreements and the Power of Attorneys are finally executed between the Societies and the Developers to complete the projects.
Initially, to obtain the IOD/CC from MCGM, the Developers submit the plans to MCGM as per the agreed terms in the Development Agreements executed with the Housing Society.
It has been often noticed that thereafter, during the process of redevelopment, the terms of Development Agreements as agreed upon, the unhealthy attempts with ulterior motives are made by the Developers to twist and grossly violate the rules of MRTP and DCR by unlawful planning and constructing additional/unauthorized areas that are beyond their entitlement (i.e. beyond the plot FSI and the TDR/FSI loaded) for their hidden financial gains. The buyers of such unlawful flats/properties land themselves in deals that lead to litigation at a later date.
At this stage, the Developers submit the amended plans for additional structures to MCGM which are not in conformity with the Development Agreements executed and additional/unauthorized constructions are carried out without informing beforehand or seeking formal approval from the Society's architect/Society as per the rules and bye-laws or execution and registration of further necessary Agreements to this effect.
The ill- observance of MRTP/MCGM/DCR rules and guidelines are overlooked by the sympathetic officials of the MCGM and the plans so submitted, are sanctioned without verifying the eligibility or its conformity with the Development Agreements.
The Projects are completed and the Occupancy Certificates are issued without the proper inspection neither carried out by the MCGM officials nor taking pains to verify whether the actual measurement of the constructed areas tally with the final plans submitted.
It is further noticed that upon the completion of the projects, these additional/unauthorized constructions are silently regularized at the last moment by executing the Supplemental Agreements with the Office Bearers of the Societies with green handshakes/offering them handsome rewards.
Further, it is learnt that in many Societies, the Managing Committees, who execute the documents with the Developers, do not possess any legal holding as they have never filed/nor aware of filing the Indemnity Bond in Form M-20 on a Stamp required under Section 73(1AB) and Rule 58A of the Maharashtra Cooperative Societies Act 1960.
The members who fail to execute such Bonds within the specific period are deemed to have vacated his office as a member of the committee and no legal effects can be given to the documents executed by them with the Developers.
The gullible members of the Societies, unaware of the laws and rules, are taken for a ride by the Developers and the satisfied Office Bearers together with their interested associates once the projects are completed and since the members aim to get themselves re-housed in the redeveloped premises and on the other hand, the hidden financial benefits of such unauthorized/additional areas go to the Developers.
There are numerous news clips in various news papers with regard to Mumbai High Court’s reprimanding and lambasting severely the MCGM for violation of Development Control Act & Rules and are instructed to immediately issue the demolition orders to pull down such unauthorized/additional constructions and take stringent action against the erring officials for their lapses. Reference is necessary for the latest news appeared in Times City of Times of India Dated 12th Sept.2008-Illegal Constructions: HC blasts MCGM and MHADA for illegal and unauthorized constructions on Andheri-Versova- Jogeshwari belt have come under scanner of the Mumbai High Court.
Under the Development Control Rules, it has been stated that in case of unauthorized development, the Commissioner shall - (a) take suitable action which may include demolition of unauthorized works as provided in section 53 of the MRTP Act, 1966 and the relevant provisions of the Mumbai Municipal Corporation Act, 1888 and shall take suitable action against the licensed technical person or the architect concerned.
Upholding the law for the welfare of the community is more valuable for society than extra heap of cement and concrete. Plenty of judgments are overlooked by greedy Developers to earn extra money.
The members of the Cooperative Housing Societies in Mumbai are required to be vigilant
while handing over their Societies for redevelopment to such Developers who, by rewarding the Office Bearers and their associates, carry out the unauthorized/additional constructions for their hidden financial gains which they are not entitled to. When unauthorized constructions beyond the laws are the statutory norms of such Developers rather than the exception to the rules, the strict laws of the land have always to be upheld by taking stern actions under the laws.
Dilip Shah
Counselor and Analyst for Redevelopment of Housing Societies
dilip7shah@gmail.com
9819825752
32411533
Showing posts with label Redevelopment of Societies. Show all posts
Showing posts with label Redevelopment of Societies. Show all posts
Sunday, July 3, 2011
Thursday, June 30, 2011
REDEVELOPMENT OF OLD HOUSING SOCIETIES IN MUMBAI: INDEMNITY BOND IN FORM M-20 UNDER THE MAHARASHTRA CO-OP SOCIETIES ACT: CONTRIBUTED BY DILIP SHAH
REDEVELOPMENT OF OLD HOUSING SOCIETIES IN MUMBAI: INDEMNITY BOND IN FORM M-20 UNDER THE MAHARASHTRA CO-OP SOCIETIES ACT
I take this opportunity to write something on Bond required to be executed by the members of the Managing Committee of the Co-operative Housing Societies within 45 days from the date of their assuming the office whichever is earlier, under the Maharashtra Co-operative Societies Act 1960.
The provision is important because if the bond is not executed within 45 days from the date of their assuming the office whichever is earlier or if the member fails to execute the bond he shall be deemed to have vacated his office as a member of the Managing Committee.
Now what happens to many housing societies, where Managing Committees are unaware, ignorant or have simply ignored or not bothered about the bond? In such cases, according to Registrar’s office “we offer to disband the committee and call for fresh elections”
The member who fails to execute such a bond within the specified period shall be deemed to have vacated his office as a member of the committee. Bombay High Court too has upheld this provision of MCS Act.
Attention is also invited to the Bye-law no 136 of the old Model bye-laws and bye-law no 138 of the new Model bye-laws which lay down as under:
"The members of the Committee shall be jointly and severally liable for making good any loss which the society may suffer on account of their negligence or omission to perform any of the duties and functions cast on them under the Act, Rules and Bye-laws of the Society."
In addition to the above bye-laws, an amendment was inserted by Mah. 41 of 2000, S. 3 of the amending Act (w.e.f. 23-8-2000) to Section 73 by introducing Section (1AB) to the Maharashtra Co-operative Societies Act 1960. Similarly Rule 58-A was inserted by G.N. of 18-2-2002 in the Maharashtra Co-operative Societies Rules, 1961 and Form M-20 was also inserted by G.N. of 18-2-2002.
Section 73(1AB) of the Maharashtra Co-operative Societies Act 1960 is reproduced below:
"The Members of the Committee shall be jointly and severally responsible for all the decisions taken by the committee during its term relating to the business of the society. The members of the committee shall be jointly and severally responsible for all the acts and omissions detrimental to the interest of the society. Every such member shall execute a bond to that effect within fifteen days of his assuming the office, in the form as specified by the State Government by general or special order.
The member, who fails to execute such bond within the specified period i.e. within fifteen days from joining the Managing Committee member, shall be deemed to have vacated his office as a member of the committee."
Further, the power to decide whether the losses incurred by the society are due to act or omissions of members of the committee is given to the Registrar
"Provided that, before fixing any responsibility mentioned above, the Registrar shall inspect the records of the society and decide as to whether the losses incurred by the society are on account of acts or omissions on the part of the members of the committee or on account of any natural calamities, accident or any circumstances beyond the control of such members."
Rule 58-A of the Maharashtra Co-operative Societies Rules 1961 is reproduced below:
"Every elected member of the Managing Committee shall execute a bond in Form M-20 within fifteen days of his assuming the office. Such bond shall be executed on the stamp paper as provided under the Bombay Stamp Act 1958. The expenditure on stamp paper shall be borne by the society. The Chief Executive Officer / secretary of the society shall receive such bonds and keep them on record of the society and accordingly inform the Registrar within Fifteen days from the formation of the Committee."
It is clear from above that the bond must be executed within fifteen days of assuming of office by each member of the Managing Committee in Form M-20 on a stamp paper. Failure will invite penal consequences.
INDIA: MANAGING COMMITTEE OF CO-OPERATIVE HOUSING SOCIETY MUST EXECUTE BOND
March 2008
Article by Dilip Shah
The legislature having experienced and realized that the members of the Managing Committee of different co-operative societies were acting in an arbitrary manner, with a view to have some accountability amongst the members of the Managing Committee, have enacted a provision in the Maharashtra Co-operative Societies Act, 1960 ("MCSA") mandating every member of such Managing Committee to execute a bond within 15 days of their assuming the office whichever is earlier.
If the committee member fails to execute the bond within the specified period, then such member shall be deemed to have vacated his office as member of the Committee. This provision has been given effect by Section 73(1AB) of the MCSA.
This legislation was recently challenged by a Writ Petition filed in the Bombay High Court (Writ Petition No. 457 of 2007) under Article 226 of the Constitution of India on the ground that the same is ultra virus. However, the Bombay High Court has upheld the legislature’s act.
The intention of the legislature is to make the members fully aware of their personal responsibility and liability towards the society and its members. The time limit laid down under Section 73(1AB) is mandatory and the elected committee members have to hand over the bond to the Deputy Registrar of Co-operative Society within such stipulated time.
This ruling of the Bombay High Court in the aforesaid writ petition emphasizes the basic principle of "ignorance of law is not an excuse" i.e. being unaware of the provision contained in Section 73(1AB) of the MCSA cannot be used an excuse for the failure to execute the bond within the stipulated time.
There are several instances of disgruntled members filing cases against the Managing Committees for not having executed the mandatory bonds to derail the process of redevelopment. The Managing Committee may even get caught or be slapped with fraud and forgery charges for entering into any redevelopment agreement with the builders as has happened with a Co-operative Housing Society on the Hill Road in Bandra, Mumbai.
Bandra building residents unearth Rs 100 crore fraud
A resident of Rachna co-operative housing society at Hill Road in Bandra has accused some members of the managing committee of resorting to forgery to strike an Rs 100 crore deal for redevelopment rights.
Mohammed Musaddique Shaikh, the resident, alleges the members resorted to forgery fearing the deal would fall through as the papers of the society were not in order.
“After the managing committee members entered into an agreement with the builder for redevelopment in December 2006, they realized that they had not filed the mandatory indemnity bonds,” alleges Shaikh.
When a managing committee is elected, it is mandatory for them to file indemnity bonds (before the registrar of societies) accepting responsibility for wrong-doing, if any, during their tenure. Without the indemnity bonds, the society cannot enter into a deal to redevelop the property.
“The election took place on May 25, 2004. The committee was constituted on the same day. The indemnity bonds ought to have been placed on record by committee members on or before June 9, 2004, which was not done,” alleges Shaikh.
His advocate Pradeep Havnur says, “Members not having filed indemnity bonds within 15 days of being elected cease to be part of the managing committee. All documents signed when they have ceased to be managing committee members are illegal and cannot be given effect to proceed in any matter pertaining to the society’s day to day affairs.”
“When residents of the society insisted on seeing copies of the indemnity bonds, the accused purchased stamp papers and prepared back-dated indemnity bonds,” alleges Shaikh. Another resident, S B Naik, moved the HC alleging fraud. The court asked the additional controller of stamps (Mumbai) to investigate. The investigation revealed that the dates on the indemnity bonds were forged. An officer at Bandra police station said a complaint was registered under Sections 465, 467 and 471 of the IPC.
HIGH COURT ORDERS FRESH ELECTIONS TO MANAGING
COMMITTEE OF INDUSTRIAL COOPERATIVE SOCIETY
Dilip Shah
Posted: Dec 25, 2007 - Article Directory, India
Mumbai, December 25 The Bombay High Court recently ordered fresh elections to the managing committee of an industrial cooperative society in Chunabhatti. Following their removal from the committee for non-execution of bonds under the Maharashtra Cooperative Societies Act, Deepak Rao and others had moved the HC contesting the order passed by the Divisional Joint Registrar as he was “facing corruption charges and his anticipatory bail application was rejected by the sessions court”.
The Managing Committee of the Shri Mahalakshmi Industrial Premises Cooperative Society Ltd was superseded by an order of the Deputy Registrar of Cooperative Societies on July 6. The members challenged the order before the Divisional Joint Registrar Shivaji Pahinkar — who is under suspension, according to Assistant Government Pleader G W Mattos. Pahinkar dismissed their appeal on October 23, following which the members moved the HC.
According to Mattos, the petitioners contested Pahinkar’s order as he had passed it on October 23, a day after his anticipatory bail application was rejected by the session’s court. The petitioners expressed apprehension that the order was “based on consideration other than merit”, according to Mattos.
According to Mattos, Justice A M Khanwilkar observed that if the petitioners' contention was accepted, the court would have to order an inquiry into the allegations and, if found true, the matter will have to be referred back to the appellate authority for fresh hearing.
Mattos contended before Justice Khanwilkar that the managing committee was removed on technical grounds as they ceased to be members for non-execution of bonds. Mattos submitted that instead of going into allegations and counter-allegations, it would be appropriate to hold fresh elections to the committee.
According to Mattos, observing that the removal was technically correct, the court directed that the three members of the seven who had executed the bonds should continue to function as the Board of Administrators (BoA) instead of the single administrator appointed by the Deputy Registrar of Cooperative Societies on July 6.
Mattos said the HC then directed the Deputy Registrar of Cooperative Societies to issue order in this regard by December 27. The court also directed that elections to the committee should be held within three months. The court has, however, asked the BoA not to take any major policy decisions during this period.
Dilip Shah
Counselor and Analyst for Redevelopment of Housing Societies
9819825752, 32411533
dilip7shah@gmail.com
I take this opportunity to write something on Bond required to be executed by the members of the Managing Committee of the Co-operative Housing Societies within 45 days from the date of their assuming the office whichever is earlier, under the Maharashtra Co-operative Societies Act 1960.
The provision is important because if the bond is not executed within 45 days from the date of their assuming the office whichever is earlier or if the member fails to execute the bond he shall be deemed to have vacated his office as a member of the Managing Committee.
Now what happens to many housing societies, where Managing Committees are unaware, ignorant or have simply ignored or not bothered about the bond? In such cases, according to Registrar’s office “we offer to disband the committee and call for fresh elections”
The member who fails to execute such a bond within the specified period shall be deemed to have vacated his office as a member of the committee. Bombay High Court too has upheld this provision of MCS Act.
Attention is also invited to the Bye-law no 136 of the old Model bye-laws and bye-law no 138 of the new Model bye-laws which lay down as under:
"The members of the Committee shall be jointly and severally liable for making good any loss which the society may suffer on account of their negligence or omission to perform any of the duties and functions cast on them under the Act, Rules and Bye-laws of the Society."
In addition to the above bye-laws, an amendment was inserted by Mah. 41 of 2000, S. 3 of the amending Act (w.e.f. 23-8-2000) to Section 73 by introducing Section (1AB) to the Maharashtra Co-operative Societies Act 1960. Similarly Rule 58-A was inserted by G.N. of 18-2-2002 in the Maharashtra Co-operative Societies Rules, 1961 and Form M-20 was also inserted by G.N. of 18-2-2002.
Section 73(1AB) of the Maharashtra Co-operative Societies Act 1960 is reproduced below:
"The Members of the Committee shall be jointly and severally responsible for all the decisions taken by the committee during its term relating to the business of the society. The members of the committee shall be jointly and severally responsible for all the acts and omissions detrimental to the interest of the society. Every such member shall execute a bond to that effect within fifteen days of his assuming the office, in the form as specified by the State Government by general or special order.
The member, who fails to execute such bond within the specified period i.e. within fifteen days from joining the Managing Committee member, shall be deemed to have vacated his office as a member of the committee."
Further, the power to decide whether the losses incurred by the society are due to act or omissions of members of the committee is given to the Registrar
"Provided that, before fixing any responsibility mentioned above, the Registrar shall inspect the records of the society and decide as to whether the losses incurred by the society are on account of acts or omissions on the part of the members of the committee or on account of any natural calamities, accident or any circumstances beyond the control of such members."
Rule 58-A of the Maharashtra Co-operative Societies Rules 1961 is reproduced below:
"Every elected member of the Managing Committee shall execute a bond in Form M-20 within fifteen days of his assuming the office. Such bond shall be executed on the stamp paper as provided under the Bombay Stamp Act 1958. The expenditure on stamp paper shall be borne by the society. The Chief Executive Officer / secretary of the society shall receive such bonds and keep them on record of the society and accordingly inform the Registrar within Fifteen days from the formation of the Committee."
It is clear from above that the bond must be executed within fifteen days of assuming of office by each member of the Managing Committee in Form M-20 on a stamp paper. Failure will invite penal consequences.
INDIA: MANAGING COMMITTEE OF CO-OPERATIVE HOUSING SOCIETY MUST EXECUTE BOND
March 2008
Article by Dilip Shah
The legislature having experienced and realized that the members of the Managing Committee of different co-operative societies were acting in an arbitrary manner, with a view to have some accountability amongst the members of the Managing Committee, have enacted a provision in the Maharashtra Co-operative Societies Act, 1960 ("MCSA") mandating every member of such Managing Committee to execute a bond within 15 days of their assuming the office whichever is earlier.
If the committee member fails to execute the bond within the specified period, then such member shall be deemed to have vacated his office as member of the Committee. This provision has been given effect by Section 73(1AB) of the MCSA.
This legislation was recently challenged by a Writ Petition filed in the Bombay High Court (Writ Petition No. 457 of 2007) under Article 226 of the Constitution of India on the ground that the same is ultra virus. However, the Bombay High Court has upheld the legislature’s act.
The intention of the legislature is to make the members fully aware of their personal responsibility and liability towards the society and its members. The time limit laid down under Section 73(1AB) is mandatory and the elected committee members have to hand over the bond to the Deputy Registrar of Co-operative Society within such stipulated time.
This ruling of the Bombay High Court in the aforesaid writ petition emphasizes the basic principle of "ignorance of law is not an excuse" i.e. being unaware of the provision contained in Section 73(1AB) of the MCSA cannot be used an excuse for the failure to execute the bond within the stipulated time.
There are several instances of disgruntled members filing cases against the Managing Committees for not having executed the mandatory bonds to derail the process of redevelopment. The Managing Committee may even get caught or be slapped with fraud and forgery charges for entering into any redevelopment agreement with the builders as has happened with a Co-operative Housing Society on the Hill Road in Bandra, Mumbai.
Bandra building residents unearth Rs 100 crore fraud
A resident of Rachna co-operative housing society at Hill Road in Bandra has accused some members of the managing committee of resorting to forgery to strike an Rs 100 crore deal for redevelopment rights.
Mohammed Musaddique Shaikh, the resident, alleges the members resorted to forgery fearing the deal would fall through as the papers of the society were not in order.
“After the managing committee members entered into an agreement with the builder for redevelopment in December 2006, they realized that they had not filed the mandatory indemnity bonds,” alleges Shaikh.
When a managing committee is elected, it is mandatory for them to file indemnity bonds (before the registrar of societies) accepting responsibility for wrong-doing, if any, during their tenure. Without the indemnity bonds, the society cannot enter into a deal to redevelop the property.
“The election took place on May 25, 2004. The committee was constituted on the same day. The indemnity bonds ought to have been placed on record by committee members on or before June 9, 2004, which was not done,” alleges Shaikh.
His advocate Pradeep Havnur says, “Members not having filed indemnity bonds within 15 days of being elected cease to be part of the managing committee. All documents signed when they have ceased to be managing committee members are illegal and cannot be given effect to proceed in any matter pertaining to the society’s day to day affairs.”
“When residents of the society insisted on seeing copies of the indemnity bonds, the accused purchased stamp papers and prepared back-dated indemnity bonds,” alleges Shaikh. Another resident, S B Naik, moved the HC alleging fraud. The court asked the additional controller of stamps (Mumbai) to investigate. The investigation revealed that the dates on the indemnity bonds were forged. An officer at Bandra police station said a complaint was registered under Sections 465, 467 and 471 of the IPC.
HIGH COURT ORDERS FRESH ELECTIONS TO MANAGING
COMMITTEE OF INDUSTRIAL COOPERATIVE SOCIETY
Dilip Shah
Posted: Dec 25, 2007 - Article Directory, India
Mumbai, December 25 The Bombay High Court recently ordered fresh elections to the managing committee of an industrial cooperative society in Chunabhatti. Following their removal from the committee for non-execution of bonds under the Maharashtra Cooperative Societies Act, Deepak Rao and others had moved the HC contesting the order passed by the Divisional Joint Registrar as he was “facing corruption charges and his anticipatory bail application was rejected by the sessions court”.
The Managing Committee of the Shri Mahalakshmi Industrial Premises Cooperative Society Ltd was superseded by an order of the Deputy Registrar of Cooperative Societies on July 6. The members challenged the order before the Divisional Joint Registrar Shivaji Pahinkar — who is under suspension, according to Assistant Government Pleader G W Mattos. Pahinkar dismissed their appeal on October 23, following which the members moved the HC.
According to Mattos, the petitioners contested Pahinkar’s order as he had passed it on October 23, a day after his anticipatory bail application was rejected by the session’s court. The petitioners expressed apprehension that the order was “based on consideration other than merit”, according to Mattos.
According to Mattos, Justice A M Khanwilkar observed that if the petitioners' contention was accepted, the court would have to order an inquiry into the allegations and, if found true, the matter will have to be referred back to the appellate authority for fresh hearing.
Mattos contended before Justice Khanwilkar that the managing committee was removed on technical grounds as they ceased to be members for non-execution of bonds. Mattos submitted that instead of going into allegations and counter-allegations, it would be appropriate to hold fresh elections to the committee.
According to Mattos, observing that the removal was technically correct, the court directed that the three members of the seven who had executed the bonds should continue to function as the Board of Administrators (BoA) instead of the single administrator appointed by the Deputy Registrar of Cooperative Societies on July 6.
Mattos said the HC then directed the Deputy Registrar of Cooperative Societies to issue order in this regard by December 27. The court also directed that elections to the committee should be held within three months. The court has, however, asked the BoA not to take any major policy decisions during this period.
Dilip Shah
Counselor and Analyst for Redevelopment of Housing Societies
9819825752, 32411533
dilip7shah@gmail.com
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