Co-operative societies must raise funds as per law only

It is essential for any corporate to raise funds for various needs of the corporate and a co-operative society being one of the corporate also need to raise funds for long term use of the co-operative society.

Right methods of raising funds

Every co-operative society is required to follow laws & bye laws for raising of long term funds for the co-operative society.

Adopt legal path to avoid appointment of Administrator

Adopt legal methods to raise funds for the society

Every co-operative society having a share capital shall provide in the bye-laws, the maximum amount of such share capital, the number of shares into which it is divided, the class of shares, the face value of share of each class and the rights and liabilities attaching to each class of shares and in the case of full amount of the shares is not payable on allotment, the amount and their number of installments required to be paid and such other incidental matters.

Any co-operative society, authorized under its bye laws to raise funds by the issue of debentures and bonds may with the prior sanction of the Registrar, frame regulations regarding the minimum amount to be raised by the issue of debentures and bonds, the class or classes of debentures and bonds, the face value of each debentures or bond, the date of redemption of debentures or bonds the rate of interest payable the terms and conditions regarding transfer of debentures and bonds and other incidental matters.

Wrong methods used by the co-operative society

Besides charging the maintenance for the common charges, the co-operative societies out of their own sweet will have started raising funds for the society by imposing following charges

(A) Car Parking charges: It is illegal method used by the co-operative societies to raise the funds for the society. Let us clarify that, very serious repercussions shall be there if an action through a legal expert is taken again the societies for charging Car Parking charges from the members.

(B) Community hall or basement or park use charges: It is also illegal method used by the co-operative societies to build funds for the society. Just allowing use of particular space or giving permission to use particular space of the common areas of the co-operative society is not the method of raising funds for the co-operative society. If any member raised objection through an legal expert in a court of law, the society has to return all such charges with interest and may also have to pay damages as may be decided by the Courts.

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6 Comments

  • vijay Kumar says:

    Our society has raised a demand for construction of Road. The demand was passed in AGM but quorum was not there. The specification are not clear and Road condition is ok but still they want to construct Road and have issued notice with 18% Interest if not paid. Pls advise.

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  • Ashutosh says:

    Please tell me what can be done as our society (cghs) is charging electricity charges for running water motor separately from maintenance…
    Is that can be controlled and water bill is also exclusive…
    On query society manager they says that maintenance includes only guard salary and electrical charge for for lighting exterior

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  • Dr.guha says:

    I have an apparent in Kolkata. The society wants to increase maintenance charges again I.e. twice in a year . Also the notification came. In a time and asked members to deposit excess charges after 20 days.
    It is something like allowing owners only less than a month to carry on that excees charges.
    Moreover no justification showing the need for extra amount.
    I have a feeling that society can not do that in respect to the time given and also no justification for showing the need for extra money.
    Kindly advice me what and how to raise objection and also legality in the part of society to do so.

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  • sairam nair says:

    Sir,
    I am a resident of shivam apartment for the last 18 yrs ours is a builder flats of 24 flats, as we do not have any parking space in the society nor our society regd. under RWA till may 2016. But now it seems the society is been registered from meerut. said society is in the main Road of 150ft wide road one side and 100ft road on the other side ie. it is in the corner plot of shalimar garden ext. II . some members are extorting Rs. 500/- per month for the last 8 months. for there personnel benifits they are throwing parties etc,etc. They have not spent a single penny for the maintenance of the society which can be inspected from your kind visit to the said society B-19_Shivam
    Apartment Shalimar Garden Ext. II. Out of 24 Flats 18 flats had already paid the said amount which comes to an amount of 81000/-.
    My further querry is whether they can cut the essencial services like water connection who have not paid the amount .

    Regards;

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  • Mahendra Singh says:

    Ours is an apartment association comprising of 2276 members which were malafidely made members of the association which was in existence prior to the allotment of houses constructed under a separate scheme. Housing units in three separate schemes phase 3, ph 4, and ph 5 were constructed by the builder on a single 40 acre plot with separately marked portions of the plot in Noida. Possesion of ph3 was given in 2004, phase 4 in 2005 and ph 5 in 2007. There should have been 3 separate association but malafidely the builder handed over the flats constructed under ph 5 to the apartment association of the allottees of 3rd and 4th phase allottees. Now we want to trifurcate it . Kindly provide details of services and charges for geting it done.

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  • jayashree says:

    we have purchased stilt parking space from builder. Since our parking space is little bigger, we can park two cars in the said parking space. Society can demand from us for second car parking as we are fitting in a single car parking pace.

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