1

Borivali Education Society

Matrushri Pushpaben Vinubhai Valia College of Commerce
M. K. School Complex, Factory Land, Borivali (w), Mumbai 400092.

A PROJECT
ON

Co-operative Society

IN THE SUBJECT OF ADVANCE FINANCE ACCOUNTING

SUBMITTED TO
UNIVERSITY OF MUMBAI,
FOR SEMSTER II OF
MASTER OD COMMERCE (ACCOUNTANCY)
BY
BHAVYA P. SAVLA
ROLL NO: 112
UNDER THE GUIDANCE OF
ASST. PROF. MS. BHUMIKA PATEL

YEAR 2015-16

DECLARETION BY STUDENT

MR. BHAVYA P. SAVLA The student of M.com Part-I (2015-16) Roll No: 112 hereby declare
that the project for the strategic management titled.

Co-operative Society
Submitted by me for semester-II during the academic year 2015-16 is based on actual work
carried out by me under the guidance and supervision of Asst. Prof. Ms. Bhumika Patel
I further stated that this work is original and not submitted anywhere else for the
examination.

Signature of Student.

EVALUATION CERTIFICATE
This is to certify that the undersigned have assessed and evaluated the project

Co-operative Society

Submitted by Bhavya P. Savla Student of M.Com part I. This project is original and best of our
knowledge and has been accepted for internal assessment.

Asst. Prof. Ms. Bhumika Patel

Internal Examiner

Professor V. Manikandan
External Examiner

I/C PRINCIPAL

ACKNOWLEDGEMENT

It given me immense pleasure to present this project while I taking this opportunity to thank all
of them who helped me to prepare this project and timely guidance received which help me
greatly in the competition of the project.

I would acknowledge my deep sense of gratitude to Asst. Prof. Ms. Bhumika Patel. For his
kind co-operation in this project at all stages. Her constant support, encouragement and guidance
without which the successful completion of this project would have been impossible.

I would like to thanks our respected principle, librarians and other teaching and non- teaching
staff for their corporation in this project.

Last but not least I would also like to thanks all our friends for their suggestions and valuable
help.

Once again I would like to thanks all those people who have helped me to complete this project
on time.

INDEX
SR.
NO.

CHEPTER NAME

PAGES
No.
6 11

1.

Introduction
Meaning
Definition
Objectives
Importance
Methodology

2.

Overview of Business Environment

1. Principles of Co-operative Society
2. Types of Co-operative Society
3. Characteristics of Co-operative Society
4. Advantages of Co-operative Society
5. Disadvantages of Co-operative Society
6. Formation of Co-operative Society
7. Definition of Housing Society
8. Types of Housing Society
9. Procedure for formation of Housing Society

12 28

3.

Co-operative Housing Society

29 34

4.

Conclusion, Suggestions, & Recommendation

35 38

5.

Bibliography & References

39 - 41

CHEPTER 1:- CO-OPERATIVE SOCIETY

INTRODUCTION
A co-operative society is a voluntary association of individuals having common needs who join
hands for the achievement of common economic interest. Its aim is to serve the interest of the
poorer sections of society through the principle of self-help and mutual help. The main objective
is to provide support to the members. Nobody joins a cooperative society to earn profit. People
come forward as a group, pool their individual resources, utilise them in the best possible
manner, and derive some common benefit out of it.

A Co-operative Society can be formed as per the provisions of the Co-operative Societies Act,
1912. At least ten persons above of 18 years, having the capacity to enter into a contract with
common economic objectives, like farming, weaving, consuming, etc. can form a Co-operative
Society. Cooperative Societies Act is a Central Act. However, Cooperative Societies is a State
Subject (Entry 32 of List II of Seventh Schedule to Constitution, i.e. State List). Though the Act
is still in force, it has been specifically repealed in almost all the States and those States have
their own Cooperative Societies Act. Thus, practically, the Central Act is mainly of academic
interest and as per preamble to the Act, the Act is to facilitate formation of cooperative societies
for the promotion of thrift and self-help among agriculturists, artisans and persons of limited
means.

If object of the society is creation of funds to be lent to its members, all the members must be
residing in the same town, village or group of villages or all members should be of same tribe,
class, caste or occupation, unless Registrar otherwise directs. The provision of minimum 10
members or residing in same town/village etc. is not applicable if a registered society is member
of another society. The Statement of Objects and reasons states as follows:(a) Cooperative Society can be established for purpose of credit, production or distribution.
(b) Agricultural credit societies must be with unlimited liability.

(c) Unlimited society is not best form of cooperation for agricultural commodities.
(d) Unlimited society can distribute profits with permission of State Government.
A society which has as its object the promotion of economic interests of its members in
accordance with cooperative principles can be registered as a Society. Similarly, a society
established with the object of facilitating operation of such a society can also be registered under
the Act. The society can be registered with limited or unlimited liability. However, unless State
Government otherwise directs, (1) Liability of a society of which a member is a registered
society shall be limited. (2) Liability of a society of which object is to creation of funds to be lent
to members, and of which majority of members are agriculturists and of which no member is a
registered society shall be unlimited. Thus, a registered society can be member of another
society, but liability of such other society must be limited, unless State Government otherwise
directs.
The last word in name of society should be Limited, if the Society is registered with limited
liability. If a society has limited liability, any individual member of such society cannot have
share capital more than one-fifth of total capital. An individual member cannot have interest in
shares exceeding Rs 1,000. This restriction of 20% shares or Rs 1,000 shares value is not
applicable to a registered society which is member of another society. Thus, if a registered
society is member of another society, it can hold shares exceeding 20% or exceeding Rs 1,000 in
value.

A registered cooperative society can hold property, enter into contracts, institute and defend suit
and other legal proceedings and to do all things necessary for the purposes of its constitution. A
registered society can give loans only to its members. However, it can give loan to another
registered society with permission of Registrar. A society with unlimited liability cannot lend
money on security of movable property without sanction of registrar. State Government, by
issuing a general or special order, can prohibit or restrict lending of money on mortgage of
immovable property by any registered society or class of registered society.

Registrar, after inspection or inquiry, or on application received from 75% of members of

society, may cancel the registration of society, if in his opinion, the Society should be dissolved.
Any member can appeal against the order of Registrar within two months to State Government
or other Revenue Authority authorised by State Government. If no appeal is filed within two
months, the order of dissolution shall become effective. If appeal is filed, the order will become
effective only after it is confirmed by appellate authority. Although all types of cooperative
societies work on the same principle, they differ with regard to the nature of activities they
perform.

Meaning of Co-operative Society

Let us take one example. Suppose a poor villager has two cows and gets ten litres of milk.
After consumption by his family everyday he finds a surplus of five liters of milk. What can
he do with the surplus? He may want to sell the milk but may not find a customer in the village.
Somebody may tell him to sell the milk in the nearby town or city. Again he finds it difficult, as
he does not have money to go to the town to sell milk. What should he do? He is faced with a
problem. Do you have any solution for him?
One day that poor villager met a learner of NIOS who had earlier read this lesson. The learner
told him, you see, you are not the only person facing this problem. There are many others in your
village and also in the nearby village who face a similar problem. Why dont you all sit together
and find a solution to your common problem? In the morning you can collect the surplus milk at
a common place and send somebody to the nearby town to sell it. Again in the evening, you can
sit together and distribute the money according to your contribution of milk. Of course first you
have to deduct all the expenses from the sale proceeds.
That villager agreed to what the learner said. He told everybody about this new idea and formed
a group of milk producers in his village. By selling the milk in the nearby town they were all able
to earn money. After that they did not face any problem of finding a market for the surplus milk.
This process continued for a long time. One day some body suggested that instead of selling only
milk why not produce other milk products like ghee, butter, cheese, milk powder etc. and sell

them in the market at a better price? All of them agreed and did the same. They produced quality
milk products and found a very good market for their products not only in the nearby town but in
the entire country.
Just think it over. A poor villager, who was not able to sell five litres of milk in his village, is
now selling milk and milk products throughout the nation. He is now enjoying a good life.
How did it happen? Who made it possible? This is the reward of a joint effort or cooperation.
The term co-operation is derived from the Latin word co-operari, where the word co means
with and operari means to work. Thus, co-operation means working together.
So those who want to work together with some common economic objective can form a society
which is termed as co-operative society. It is a voluntary association of persons who work
together to promote their economic interest. It works on the principle of self-help as well as
mutual help. The main objective is to provide support to the members. Nobody joins a
cooperative society to earn profit. People come forward as a group, pool their individual
resources, utilise them in the best possible manner, and derive some common benefit out of it.
In the above example, all producers of milk of a village joined hands, collected the surplus milk
at a common place and sold milk and milk products in the market. This was possible because of
their joint effort. Individually it would not have been possible either to sell or produce any milk
product in that village. They had formed a co-operative society for this purpose.

Definition of Co-Operative Society

i)

Co-operative Society :- Under Section 2(27) of the Act, Society means a

Cooperative Society registered or deemed to be registered under this Act. Cooperative Society is corporation body distinct from its members. Section 167 of Cooperative societies Act state that provisions of Companies Act are not applicable to
Co-operative.

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ii)

Working Capital :- Under Section 2(31) of the Act, working capital means funds at
the disposal of society inclusive of paid up share capital, funds built up out of profits
and money raised by borrowing and other means. The definition of the term is
different as generally working capital means Net Current Assets represented by
current assets less Current liabilities. The audit fees of certain types of societies such
as Urban Co-operative Banks, Salary Earners Credit Societies are related to the
amount of the working capital.

iii)

Auditor :- Rule No.69 of Co operative Societies Rules states that the audit of cooperative Societies shall be conducted either by departmental auditor or certified
auditors.

iv)

Bye-Law :- Under Section 2(5) Bye-Laws registered under this Act and for the time
being in force, and includes registered amendments of such bye-laws. Bye-Laws of a
co-operative Society may be compared with the articles of a company. The provision
in the bye-laws cannot be contrary to the provisions of the co-operative societies.

v)

Co-operative Year :- The Act has fixed 31st day of March as the day of balancing the
accounts of the society. However, any other day can be fixed by the society for this
purpose with the prior approval of the registrar. It means that the co-operative year
need not necessarily be from 1st April to 31st March. Normally, now-a-days societies
follow 31 March as the year-ending to conform with the Income-tax Act.

vi)

Member :- Under Section 2(19), a member of a Co-operative Society means a person

joining in an application for the registration Co-operative Society, which is
subsequently registered, or a person duly admitted to a membership of society after
registration and includes and associate, nominal or a sympathiser member.

Objectives

11

To study concept of Co-operative Society.

To gain knowledge about Co-operative Society and its types, Principle, Advantages,
Disadvantages, etc.

To study the Formation of Co-operative Society.

To study in depth about a particular Society e.g. .

To provide Meaningful suggestions.

Importance
It is importance to me and society as well as nation.

Methodology
There are 2 types of collection of data.
1) Primary Data:- Questionary, Interviews, Etc.
2) Secondary Data:- Books, Journals, Magazines, Newspapers, Websites, Etc.
The Researcher has mainly used secondary data because of limitation of time.

12

CHEPTER 2:- OVERVIEW OF CO-OPERATIVE SOCIETY

PRINCIPLES OF CO-OPERATIVE SOCIETY
1. LEGAL STATUS :
A co-operative Society is a body corporate registered under the applicable state Act with
perpetual succession having a common seal. It can acquire, hold and dispose of
properties, enter into contracts and it can sue and it can be sued.
2. VOLUNTARY ASSOCIATION :
Co-operative Society is essentially an organization or an association of persons who have
come together for the common purpose of economic development or for mutual help.
3. SELF HELP AND MUTUAL HELP :
The Co-operative societies office bearers/executive committee is elected as per
democratic election procedure. The Co-operative Society function under the principle of
self help and mutual help which means each will help for themselves and all will help
others.
4. DEMOCRATIC CONTROLS :
The Control of a Co-operative enterprise in not in the hands of capitalists who can corner
the share capital and control the interest in any undertaking which would be a private
undertaking.

5. EQUALITY :

13

In co-operative Sector, the principle of One man one Vote is provided in the statute so
as to ensure that the capital does not dominate the administration of co-operative Society.
6. OPEN MEMBERSHIP :
Any person can apply for the membership of the Society without any discrimination. The
membership is open for all.
7. SOCIAL APPROACH / NO PROFIT MOTIVE :
As the Society is working on democratic principle and the office bearers of the Society
will be functioning like a trustees for the better management of the society and there is no
separate benefits to the executive committee members. Service is the main motto and the
profit is not the main concern in co-operative societies.
8. PROFITS AND RETURNS TO THE MEMBERS :
Co-operative Society is an association of members and certain percentage profits earned
by the society, as decided in the meeting of the General body will be distributed in the
form of dividend to the members.

9. LIMITED INTEREST ON SHARES :

Irrespective of the shareholding, each member has only one vote in the decision-making
in the General body meeting or at the time of election of the committee for management.
The shares are not traded in the stock exchange.
The State Co-op. Act also prescribes the maximum amount, which a member can hold as
a share capital in any society.
Under M.C.S. Act, 1960 as per Section 28 other than Government or other society, shall
not hold more than 1/5 of the total capital or interest in shares or exceeding Rs. 20,000/-

14

which

the

State

Government

power

to

change

by

way

of

notification.

10. PERSONAL PARTICIPATION :

The shareholders have to personally attend the meeting or for voting. They are not
allowed to appoint proxies for attending the general body or for voting in the resolution
to be passed.
11. EDUCATIONS AND CO-OPERATION :
Every society has to contribute towards the education fund maintained and looked after
by the district co-operative education Board as per the notification issued from time to
time for educating the members or the office bearers of the Society.
12. CO-OPERATION AMONGST CO-OP. INSTITUTIONS :
The funds generated or mobilized through the co-operative societies have to be deposited/
invested in the Co-operative Sector only.

TYEPS OF CO-OPERATIVE SOCIETY

A Society is categorized on the basis of its objects. There are various types of societies
that can be formed under the Act under which it is registered:
Under Maharashtra Co-operative Societies Act, 1960 following types of Societies can be
registered :
1. Agricultural Marketing Society:
As per section 2(1) agricultural marketing Society means a society (a)The object of which is the marketing of agricultural produce and the supply of
implements and other requisites for agricultural production, and

15

(b) Not less than three-fourths of the members of which are agriculturists, or societies
formed by agriculturists.
2. Consumer Society
As per Section 2(9) Consumers Society means a society, the object of which is (a)The procurement, production or processing, and distribution of goods to, or the
performance of other services for, its members as also other customers, and (b) the
distribution among its members and customers, in the proportion, prescribed by rules or
by the bye-laws of the society, of the profits accruing from such procurement, production
or processing, and distribution.
3. Co-operative Bank
As per section 2(10) Co-operative bank means a society which is doing business of
banking as defined in clause (b) of sub-section (1) of section 5 of the Banking Companies
Act, 1949 and includes any society which is functioning or is to function as (an
Agriculture and Rural Development Bank) under Chapter XI.
4. Central Bank
As per section 2(6), Central Bank means a co-operative bank, the objects of which
include the creation of funds to be loaned to other societies; but does not include the
urban co-operative bank.
5. Crop Protection Society
As per section 2(10-A), Crop Protection Society means a society the object of which is
protection of the crops, structures, machinery, agricultural implements and other
equipment such as those used for pumping water on the land.
6. Farming Society

16

As per section 2(12),Farming Society means a society in which, the object of

increasing agricultural production, employment and income and the better utilization of
resources, lands are brought together jointly cultivated by all the members, such lands (a)
being owned or leased to the members (or some of them), or (b) coming in possession of
the society in any other manner whatsoever.
7. General Society
As per section 2(15),General Society means a society not falling in any of the classes
of societies defined by the other clauses of this section.
8. Housing Society
As per section 2(16),Housing society means a society, the object of which is to provide
its members with open plots for housing, dwelling houses or flats; or if open plots, the
dwelling houses or flats are already acquired, to provide its members common amenities
and services.
9. Federal Society
As per section 2(13),Federal society, means a society(a) not less than five members of which are themselves societies, and (b) in which the voting
rights are so regulated that the members who are societies have not less than four-fifths of
the total number of votes in the general meeting of such societ
10. Irrigation Society
As per section 2(16-A),Lift Irrigation Society means a society, the object of which is to
provide water supply, by motive power or otherwise to its members, for irrigation and
otherwise.
11. Process Society
As per section 2(22),Processing society means a society, the object of which is the
processing of goods.

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12. Producers Society

As per section 2(23),Producers Society means a society, the object of which is
production and disposal of goods or the collective disposal of labour of the members
thereof.
13. Resource Society
As per section 2(25),Resource Society means a society, the object of which is obtaining
for its members of credit, goods or services required by them.
14. Apex Society
As per section 2(2) of M.C.S. Act, Apex Society means a society, the area of operation of which extends to the whole of the State of Maharashtra (b) the
main object of which is to remote the principal objects of the societies affiliated to it as
Members and to provide for the facilities and services to them and (c) which has been
classified as an apex society by the Registrars;

CHARACTERISTICS OF CO-OPERATIVE SOCIETY

A co-operative society is a special type of business organisation different from other
forms of organsation you have learnt earlier. Let us discuss its characteristics.
i.

Open membership:
The membership of a Co-operative Society is open to all those who have a common
interest. A minimum of ten members are required to form a cooperative society. The
Cooperative societies Act does not specify the maximum number of members for
any co-operative society. However, after the formation of the society, the member
may specify the maximum number of members.

ii.

Voluntary Association:

18

Members join the co-operative society voluntarily, that is, by choice. A member can
join the society as and when he likes, continue for as long as he likes, and leave the
society at will.
iii.

State control:
To protect the interest of members, co-operative societies are placed under state
control through registration. While getting registered, a society has to submit details
about the members and the business it is to undertake. It has to maintain books of
accounts, which are to be audited by government auditors.

iv.

Sources of Finance:
In a co-operative society capital is contributed by all the members. However, it can
easily raise loans and secure grants from government after its registration.

v.

Democratic Management:
Co-operative societies are managed on democratic lines. The society is managed by a
group known as Board of Directors. The members of the board of directors are the
elected representatives of the society. Each member has a single vote, irrespective of
the number of shares held. For example, in a village credit society the small farmer
having one share has equal voting right as that of a landlord having 20 shares.

iv.

Service motive:
Co-operatives are not formed to maximise profit like other forms of business
organisation. The main purpose of a Co-operative Society is to provide service to its
members. For example, in a Consumer Co-operative Store, goods are sold to its
members at a reasonable price by retaining a small margin of profit. It also provides
better quality goods to its members and the general public.

vi.

Separate Legal Entity:

A Co-operative Society is registered under the Co-operative Societies Act. After
registration a society becomes a separate legal entity, with limited liability of its

19

members. Death, insolvency or lunacy of a member does not affect the existence of a
society. It can enter into agreements with others and can purchase or sell properties in
its own name.
vii.

Distribution of Surplus:
Every co-operative society in addition to providing services to its members, also
generates some profit while conducting business. Profits are not earned at the cost of
its members. Profit generated is distributed to its members not on the basis of the
shares held by the members (like the company form of business), but on the basis of
members participation in the business of the society. For example, in a consumer cooperative store only a small part of the profit is distributed to members as dividend on
their shares; a major part of the profit is paid as purchase bonus to members on the
basis of goods purchased by each member from the society.

viii.

Self-help through mutual cooperation:

Co-operative Societies thrive on the principle of mutual help. They are the
organisations of financially weaker sections of society. Co-operative Societies convert
the weakness of members into strength by adopting the principle of self-help through
mutual co-operation. It is only by working jointly on the principle of Each for all and
all for each, the members can fight exploitation and secure a place in society.

ADVANTAGES OF CO-OPERATIVE SOCIETY

A Co-operative form of business organisation has the following advantages:
i.

Easy Formation:
Formation of a co-operative society is very easy compared to a joint stock company.
Any ten adults can voluntarily form an association and get it registered with the
Registrar of Co-operative Societies.

ii.

Open Membership:

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Persons having common interest can form a co-operative society. Any competent
person can become a member at any time he/she likes and can leave the society at
will.
iii.

Democratic Control:
A co-operative society is controlled in a democratic manner. The members cast their
vote to elect their representatives to form a committee that looks after the day-to-day
administration. This committee is accountable to all the members of the society.

iv.

Limited Liability:
The liability of members of a co-operative society is limited to the extent of capital
contributed by them. Unlike sole proprietors and partners the personal properties of
members of the co-operative societies are free from any kind of risk because of
business liabilities.

v.

Elimination of Middlemens Profit:

Through co-operatives the members or consumers control their own supplies and
thus, middlemens profit is eliminated.

vi.

State Assistance:
Both Central and State governments provide all kinds of help to the societies. Such
help may be provided in the form of capital contribution, loans at low rates of
interest, exemption in tax, subsidies in repayment of loans, etc.

vii.

Stable Life:
A co-operative society has a fairly stable life and it continues to exist for a long
period of time. Its existence is not affected by the death, insolvency, lunacy or
resignation of any of its members.

DISADVANTAGES OF COOPERATIVE SOCIETY

21

Besides the above advantages, the co-operative form of business organisation also suffers
from various limitations. Let us learn these limitations.
i.

Limited Capital:
The amount of capital that a cooperative society can raise from its member is very
limited because the membership is generally confined to a particular section of the
society. Again due to low rate of return the members do not invest more capital.
Governments assistance is often inadequate for most of the co-operative societies.

ii.

Problems in Management:
Generally it is seen that co-operative societies do not function efficiently due to lack
of managerial talent. The members or their elected representatives are not
experienced enough to manage the society. Again, because of limited capital they are
not able to get the benefits of professional management.

iii.

Lack of Motivation:
Every co-operative society is formed to render service to its members rather than to
earn profit. This does not provide enough motivation to the members to put in their
best effort and manage the society efficiently.

iv.

Lack of Co-operation:
The co-operative societies are formed with the idea of mutual co-operation. But it is
often seen that there is a lot of friction between the members because of personality
differences, ego clash, etc. The selfish attitude of members may sometimes bring an
end to the society.

v.

Dependence on Government:
The inadequacy of capital and various other limitations make cooperative societies
dependant on the government for support and patronage in terms of grants, loans
subsidies, etc. Due to this, the government sometimes directly interferes in the
management of the society and also audit their annual accounts.

22

FORMATION OF A CO-OPERATIVE SOCIETY

A Co-operative Society can be formed as per the provisions of the Co-operative Societies
Act, 1912. At least ten persons having the capacity to enter into a contract with common
economic objectives, like farming, weaving, consuming, etc. can form a Co-operative
Society. A joint application along with the bye-laws of the society containing the details
about the society and its members, has to be submitted to the Registrar of Co-operative
Societies of the concerned state. After scrutiny of the application and the byelaws, the
registrar issues a Certificate of Registration.
Requirements for Registration:

1. Application with the signature of all members

2. Bye-laws of the society containing:
(a) Name, address and aims and objectives of the society;
(b) Names, addresses and occupations of members;
(c) Mode of admitting new members;
(d) Share capital and its division.

DEFINATION OF HOUSING SOCIETY :

23

As per section 2(16) of MCS Act, 1960,Housing society means a society, the object of
which is to provide its members with open plots for housing, dwelling houses or flats; or
if open plots, the dwelling houses or flats are already acquired, to provide its members
common amenities and services.
TYPES OF CO-OP.HOUSING SOCIETIES
There are different types of Co-op. Housing societies such as:
(1) OPEN PLOT SOCIETIES:
Societies in which members desire to purchase or take on lease land on which building or
buildings are proposed to be constructed, known as OPEN PLOT SOCIETIES. The
Building is constructed by the Society themselves.
(2) FLAT OWNERS SOCIETIES :
Societies consisting of purchasers of flats under agreements entered into with builders
under Section 4 of the Maharashtra Ownership Flats (Regulation of the Promotion of
Construction, Sale, Management and Transfer) Act, 1963, known as FLAT OWNERS
SOCIETIES. Here the Builder or the Developer constructs the building and sells the
individual flats to different persons. Later, all the flat purchasers come together and form
the societies.
(3) TENANTS SOCIETIES :
Societies formed by tenants of the landlords who had constructed the building/buildings
and had let out the flats therein, known as TENANTS SOCIETIES.
(4) HOUSING BOARD SOCIETIES :
Societies formed by allottees of flats in buildings constructed by the Bombay Housing
and Area Development Board known as HOUSING BOARD SOCIETIES.

PROCEDURE FOR FORMATION OF HOUSING SOCIETY

24

In all these four types of societies, the procedure to be followed for formulation of
registration proposals slightly differs. The requirements in respect of each type of cooperative housing societies needs to be properly understood by every promoter or the
professional, charged with the responsibility of getting the society registered.
The Chartered Accountants can undertake the responsibility of formation of Societies.
For the purpose of registration of the Societies the City of Mumbai has been divided as
per the Municipal Wards. There is a Deputy or Assistant Registrar of Co-operative
Societies for each Ward who is the Registration Authority for the Co-operative Societies
in that Ward. Normally the office of such Registering Authority (RA) is situated within
the limits of such Ward. However if no space is available for the office of the RA in any
ward the office of RA of such Ward is at the office of Deputy Registrar Co-operative
Societies India House 6th floor opposite GPO Mumbai. In other places in each taluka a
Deputy or Assistant Registrar of Cooperative Societies is assigned the duties of
registration and supervision of Co-operative Societies.
(I)

MEETTING OF PROMOTORS AND APPOINTMENT OF CHIEF PROMOTER :

The first step to registrar a Housing Society is that minimum 10 adult individuals from
independent families desiring to form a Society should gather and hold a meeting to (a)
select a provisional committee and elect a Chief Promoter for formation of a society and
(b) select a name for such Society with three alternatives and to pass appropriate

resolutions in that behalf. In case of an Open Plot Society, the Chief promoter should be
authorised at such meeting to:(a) appoint architects and building contractors
(b) Negotiate and acquire a plot and
(c) get the plans and estimates prepared for such society. The specimen forms of resolutions
to elect a Chief promoter and to give him authority as aforesaid are available with the
Registrar office or at the Federations office.

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(II)

NAME RESERVATION :
The second step would be to apply to the registration authority (RA) for reservation of
name for the society and obtain letter from the RA in that connection. The resolutions
passed at the promoters meeting as above should accompany such application for
reservation of name as aforesaid. These forms are available at the District Co-operative
Housing Federation office. The letter reserving the name of the society shall be valid for
3 months. The validity of the name is normally extended on an application for 1 or 2
further terms of 3 months each.

(III)

BANK ACCOUNT AND DEPOSITS:

The third step would be to (a) open a bank account in the name of the proposed Society
as per the RAs directions in that behalf that shall contained in the letter reserving the
name and (b) deposit therein the entrance fee share money and the amount recovered for
preliminary expenses from the promoters and obtain the certificate from such bank in
respect of such deposits. Normally the directions of the RA are to open account with a
proximate branch of the District Central Cooperative Bank or any other urban Cooperative bank.

(IV)

REGISTRATION FEE :
The fourth step is to deposit the registration fee with the Reserve Bank of India and to
obtain the receipted challan in that behalf. The registration fee for Housing Society is
Rs.2500/- and for general Society is Rs.1250/-.

(V)

REGISTRATION PROPOSAL :

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The fifth and final step is to prepare and to submit to RA the proposal for registration of
the society. The Chief Promotor has to submit the following documents along with
registration proposal.
a) FORM A :
Under Rule 4 of Maharashtra Co-operative Societies Rules an application for registration
of a society should be made in form A. The specimen of Form A is given in M.C.S.
Rules, 1961 and available in federation and leading stationery shops..The application for
registration in quadruplicate should be signed by at least 60% of the promoters members
and their signatures should be attested by Chief Promoter.
b) Statement A:
The prescribed Statement in form A a requires particulars of promoters members and
tenements allotted to them, such as the name age occupation current residential of the
promoter member the cost of share amount etc.
c) Statement B:
The prescribed Statement in form B requires particulars of the Proposed Society.
d) Statement C:
Prescribed statement in form C requires further information regarding each of the
promoters.
e) Four copies of bye-laws duly signed by all the Promoter members.
f) Statement of Account containing the preliminary income and expenditure of the proposed
society duly signed by Chief Promoter
g) Bank balance certificate for share capital & entrance fees.
h) Certificate of the title of the land by Advocate of good standing,
i) Specimen of agreement to acquire the land in case of open plot society and specimen
agreement for sale of tenements in case of Flat Owners Society,

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j)

Scheme showing viability of the society signed by Chief Promoter supported by an

Architects certificate.

j) Declaration by at least ten promoter members including the Chief Promoter stating that
their residence is within the area of operation of the society. And
l)

Undertaking of the Chief Promoter in X Y or Z the specimen whereof is available in

Federation or leading book stall.

m) A challan showing the deposit of the registration fees with the Reserve Bank of India, and
n) Copy of the approved plans.

CHEPETR 3:- CO-OPERATIVE HOUSING SOCIETY

INTRODUCTION
Out of the three basic needs of human being one is a residence. The process of
urbanization has been fast due to inevitable migration for bread and butter. Due to
increasing civilization in the urban areas the need of the houses to reside is also increased
rapidly. In the concept of the modern homes the expectation is not limited for residence
only. The expectations like luxurious, full of amenities and delightful residence are
included in it. In the concept of the residence, if seems that in addition to more and more
facilities the exception like delightful, healthful, civilized, independent surroundings and
still the feeling like togetherness has been included in it. It can be easily noticed from the
advertisement of Housing Project.
Due to fast urbanization process, need of the houses increased and it has become difficult
day by day to make the idea in reality of constructing houses with own expenses by
coming together and purchasing land. Therefore it came to experience that instead of

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coming into reality the main purpose of the co-operative housing societies to make
available facilities of residence by constructing houses for the members, the only purpose
remained in reality is of providing basic amenities, management etc. Especially in the
metropolitan city it came to experience at every step that by constructing housing projects
by the construction professional and to sale the flat to many persons who are unknown to
each other and thereafter registering the housing societies by coming together such
unknown persons compulsorily.
Even though rules/procedure for management of facilities are mentioned through Cooperative Housing Societies Act, Rules and bye laws based on them it came to notice
generally that the people who are unknown to each other starts disputing by taking
support of these rules. Therefore the concept of this manual is not to break each other but
to unite them. They should know what the exact provisions are in the bye laws. How can
it be used for not raising dispute in the society? The aim of this Housing Manual is to
give authorized information in easy language. Since the working of the Premises Cooperative Housing Societies is same like Housing Society, this manual can be applicable
to the premises societies also. The main reason behind the dispute between society and
member is that the reply to the letters/complaints of the members is not given from the
managing committee meeting by taking immediate decision. Therefore it is necessary to
call at least one meeting of the Managing Committee in a month and it is the main
responsibility of the Managing Committee to take proper decision in this meeting on the
letters/complaints received from the members and to give reply accordingly.
The members have to face difficulties due to denial of various papers, permissions, and
certificates for the technical reasons like fulfillment of papers and other flaws or not
taking early decision on it. It is necessary that the managing committee members prior to
placing before the meeting the application the /letter of the member if possible should
have to entrust the responsibility of fulfilling the flaws to the Secretary, Therefore it can
be possible for the member to fulfill the flaws prior to the meeting. If the committee
members adopt the procedure of calling the concerned member in person at the time of
managing committee meeting and to satisfy him regarding his application/ letter than the
complaints in the society would be solved on the level of society only. There by no reason

29

will remain for the member to take his complaint to other machineries. The time of the
managing committee will also save from giving reply, explanation to this machinery. In
all the cordial and co-operation atmosphere will last in the society.
However Members also tried to solve their problems by meeting managing committee
members personally and not to make correspondence, written complaints frequently.
It is utmost necessary that with their rights, the members should obey their duties also.
Especially the member should not stop of paying maintains charges to the society for any
reason. This could not resolve problems and it also becomes difficult to run the society
for want of maintenance charges.
To take precaution by the members of the committee and members to discharge their
duties and responsibilities with ones own discipline means to obtain eminence of Dispute
Free Housing Society.
It is the joint responsibility of the managing committee and all members of the society to
achieve the goal of Dispute Free Housing Society. This manual has been prepared with a
purpose that it would be useful to all officers related to the Housing Societies, members
and managing committee members. It is expected that all should use this for making
cordial relation and ending dispute because it is main aspect of the co-operation that
United we stand divided we fall.
Maharashtra is a most progressive state in the co-operative agitation in the country.
Beginning of the Co-operation agitation in India starts from making available loan to the
farness for agriculture. Thereafter, extension and development of this agitation has been
spread in various fields. At present we experience the direct or indirect relation of cooperation beginning from the morning tea, sugar, milk to fruits, vegetables and loan for
various reasons.
As on 31.3.2010 there are 2,18,320 Co-operative societies in Maharashtra State out of
which 81,255 are Housing Societies. It means numerically housing societies are more in

30

number than any other society. Naturally remarkable number of the member is also of
Housing Society.
Housing Society is such type of society where the members of the society stay with their
family day and night in each others close contact/company. This type of close contact is
not found in any other type of society. Therefore it is experienced that the complaints of
Housing societies arise out of human nature, behaviour, egoism, anger, greed etc.
Therefore provisions made in laws, bye-laws are not sufficient to solve their problems but
to knowledge of the human nature, behavior is necessary.
Incidental to that, the model bye-laws were prepared in the year 2001-2002 for the cooperative housing societies as a part of the efforts to solve the complaints by studying the
housing Societies questions and complaints received by time to time. Even then, there
was no sufficient change in the nature of the complaints received, once again the study
was conducted and accordingly amendments are made in the model bye laws. In the year
2009-2010 new model bye laws has been published.
In fact the guidance of procedure regarding all points related to the management of Cooperative housing societies has been given in this model bye laws. Even then complaints
from the members received frequently on the same points. The persons/members residing
in the co-operative housing society are especially from the urban area and they all are out
day long for the purpose of work. Similarly such societies have no independent trained
staff for handling day to day work and accounts works many a time members from the
managing committee themselves doing the work of writing record. While taking
decisions of day to day working of the Cooperative Society, it is necessary to take
decision as per co-operative law, rules and similarly provisions in the bye laws. However
while applying meaning in that regard, and while doing development work on the society
level, different decisions was taken in various societies and thereby complaints arise.
By observing legal provisions in the co-operation law, rules and bye laws and for its
effective implementation and for bringing equality and similarly in the entire state on the
decisions to be taken on complaints or questions in the Society or Registrar level, if such

31

type of Co-operative Housing Societies Manual is there, then the office bearer of the
society can get practical instructions and also guidance for doing day to day working. The
idea of preparing this Co-operative Housing Societies Manual is emerged especially for
this purpose.

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33

34

CHAPTER 4: CONCLUSION, SUGGETIONS, &

RECOMMENDATION
CONCLUSION
In India, entire economy as well as social life can be based on the principles and ideology
of co-operation. The various levels of co-operative credit structure have been
systematically arranged so that the members can easily assimilate the true spirit and
working of the co-operative movement, particularly the practical part of this movement, it
helps to raise productivity, enlarge employment and poverty reduction in rural areas. The
co-operative sector has spread its activities in all spheres of the economy. Economic
reforms has led to many changes in policies in Indian economy, co-operative societies are
the most important element of protection of the rural poor population need to improve
their competitiveness.
In the context of economic reforms period when government policy is withdrawn its
protective role. Co-operatives have to be self-reliant and the survival of co-operatives
will finally depend upon their performance and competitiveness. There are some
weaknesses in the operating of co-operatives i.e. suffering from lack of funds, difficulties
in borrowing funds, advancing of loans even for unproductive purpose, etc. if the
weaknesses are properly identified it is possible to remove it by deliberate measures with
action to overcome on it. Therefore, it is firmly believe that co-operative movement must
succeed and there is no substitute to co-operation for economic improvement of the
abundant poor masses of rural economy in the context of economic reforms. Cooperatives play a dominant role rural areas by providing essential finance for overall
growth strengthen agricultural base, increase the capacity of production and productively
for overall development.

SUGGETIONS

35

Co-operation was recognized as an instrument of sustainable development for rural areas

in the Indian economy, it was recognized as a third sector of economy which will balance
the public and private sector, therefore, after introducing economic reforms and economic
liberalization government accepted laissez faire policy. Co-operative movement which
mainly depended upon the State aid got a setback. Financial and organizational strength
is necessary for co-operative societies to compete successfully with private agencies in
this changing scenario. However, co-operatives have to required re-structure and re-orient
and set up themselves as self-reliant in the context of economic reforms. After analyzing
various statistical information regarding to the co-operative movement in Ahmednagar
district in the context of economic reforms during 1996-97 to 2005-06, as a study period,
following conclusion have revealed1. Co-operation is a tool in the hands of the people to achieve the progress through
common help. Therefore, it is largely depends upon the judicious selection of members
and their training regarding to co-operative principles. Unfortunately, people have been
entrusted with the management before they are fit for it. It must be based on the ordered
will of the people. The movement cannot succeed unless members are educated. Masses
are yet illiterate and ignorant in the district.
2. Co-operative movement became a government agency. Co-operatives are working
under government policy and State or official control, it is necessary that official control
(that now exists i.e. the extension of the Banking Regulation Act, 1949 (as applicable to
co-operative societies) from 1st March 1966 and Maharashtra Co-operative Societies Act,
1960) should be slackened to a certain extent. In order to boost up the co-operative
movement it is necessary to encourage the responsibilities among the rural masses as a
member of the co-operative society.
3. Development agenda should be come from the people unfortunately regarding to cooperative sector most of the decisions or agenda of development formulated and
implemented by government about this common people would unaware. Thats why cooperative movement must come from people and not from government. After all, political
interference weakens its effectiveness for their advantage.

36

4. In the reform policy procedure co-operative sector needs due consideration, it is not
possible to meet recent challenges without increase their competitiveness and strength.
Income recognition, asset classification, capital adequacy ratio, investment policies and
rigorous competition among various them in mobilization of funds and lending i.e.
commercial banks, private agencies, regional rural banks, money-lender and the cooperative banks.
5. The processing units of co-operative societies have been suffering from various
difficulties i.e. most of the units are unable to work to their fullest installed capacity due
to inadequate supply of raw materials and wide fluctuation in the prices of raw materials,
inadequate finance, untrained managerial personnel, defective pricing policies,
unscientific planning of units, lack of cost realization, dominance of traders, etc. to
overcome on this problem thorough efforts should be done in this line.

RECOMMENDATION
The co-operative movement in Ahmednagar district played a significant role in the social
and economic development in rural areas. Co-operative movement in Ahmednagar
district occupied a centre place and attached nearly every aspects of rural population. Cooperative societies have been getting a lot of encouragement from the people and the cooperatives have grown big and played a unique role.
In Ahmednagar district farming is the main activity of the rural people. Ahmednagar
district is known as famine-stricken district. The rainfall in the district is irregular and
thus it results into a situation of drought. The industrial sector is also on an average. Out
of total workers 75% people work in farming as farmer, agricultural labor, animal
husbandry and allied agricultural activities. As per 2001 census the total population of the
Ahmednagar district was 4040642, of which 3236945 i.e. 80.1% people lived in rural
areas (in 1556 villages) the average of living population per village is 2047 people. In
urban area 803697 i.e. 19.9% people lived. Naturally, farmers occupy great importance
and co-operative institutions are a very powerful tool in the hands of the farmers through

37

which they can come together and form a co-operative organization to resolve their
economic and social problems. There are at present 9285 co-oeprative societies of
different types with a membership of 2989 thousands covered 100 per cent rural area and
near about 70 per cent or rural households in Ahmednagar District. Our planners rightly
realized the effectiveness of co-operative institutions and laid emphasis on promoting
more and more co-operative organizations. In our planning co-operative sector has been
given utmost attention and as a result achieved spectacular progress. Above all the
progress has experienced up and downs, there is utmost need to identify the problems and
subsequently in the same light, their working may improve and they will do more
progress in the context of economic reforms period without tremble. Pattern set up and
designed for the success and progress have a great meaning. Various types of cooperatives have direct their energies towards the betterment of these rural masses by
creation of the necessary infrastructure framework which is essential for the sustainable
development of rural economy.
Co-operatives give their contribution in nation building through various services which
are necessary to underprivileged. Those who are not able to do independently
development, co-operatives are tools to come together for common benefit with
collective efforts. Therefore, it is true that co-operatives made considerable progress due
to government policy, active support and aid which in turn changed in new economic
reforms period where government is reducing its share and opened the doors of Indian
economy for foreign businessmen. Governments laissez faire policy became
disadvantage for co-operatives for their sound progress. It is observed from the statistical
data available on co-operative societies that progress of co-operative societies during the
study period 1996-97 to 2005-06, in the context of economic reforms was uneven. The
transformation from restricted economy to open competitive economy created a lot of
challenges to the co-operative sector in economic reforms. Co-operatives need to take
hold of every opportunity available to it. So, development based on efficiency, excellence
and financial resource base is required.

BIBLIOGRAPHY & REFERENCES

Bibliography

38

[1]Substituted by the Cooperative Societies (Amendment) Act 2006 (VI of 2006).

[2]Substituted by the Sind Laws (Adaptation, Revision, Repeal and Declaration)
Ordinance 1955 (Sind Ordinance V of 1955), section 7 Schedule III (with effect
from 24th April, 1947), for Preliminary.
[3]The word Sind which was earlier substituted for Bombay by the Sind Laws
(Adaptation, Revision, Repeal and Declaration) Ordinance 1955 (Sind Ordinance V of
1955), section 3(i), omitted by W.P. Ordinance VII of 1955, section 3.
[4]First inserted by the Sind Cooperative Societies (Amendment) Act, 1943 (Sind Act
XVI of 1943) and, then substituted by the Sind Cooperative Societies (Amendment) Act,
1947 (Sind Act XX of 1947) to read as above.
[5]Inserted by the Cooperative Societies (Punjab Amendment) Ordinance, 1984 (XL of
1984).
[6]Substituted by the Government of India (Adaptation of Indian Laws) Order, 1937 as
amended by the Government of India (Adaptation of Indian Laws) Supplementary Order,
1937, for Bombay Government Gazette.
[7]Substituted by the Sind Laws (Adaptation, Revision, Repeal and Declaration)
Ordinance, 1955 (Sind Ordinance V of 1955), section 7, Schedule III (with effect
from 24th April, 1947), for Registration.
[8]Substituted by the Government of India (Adaptation of Indian Laws) Order, 1937 as
amended by the Government of India (Adaptation of Indian Laws) Supplementary Order,
1937, for Govt.
[9] Added by the Sind Cooperative Societies (Amendment) Act, 1943 (Sind Act XVI of
1943).
[10]Substituted by the Government of India (Adaptation of Indian Laws) Order, 1937 as
amended by the Government of India (Adaptation of Indian Laws) Supplementary Order,
1937, for Govt.
[11]Substituted by the Cooperative Societies (Amendment) Act 2006 (VI of 2006).
[12]Inserted by the Sind Cooperative Societies (Amendment) Act, 1943 (Sind Act XVI of
1943).
[13]Substituted by the West Pakistan Laws (Adaptation) Order 1964, section 2(1),
Schedule, for the words the Crown.

39

[14]Substituted by the Sind Laws (Adaptation, Revision, Repeal and Declaration)

Ordinance, 1955 (Sind Ordinance V of 1955), section 3(i) (with effect from 30th May,
1951), for Bombay.
[15]Section 18-A renumbered as 18-B by the Cooperative Societies (Amendment) Act
2006 (VI of 2006).
[16]Substituted by the Sind Laws (Adaptation, Revision, Repeal and Declaration)
Ordinance, 1955 (Sind Ordinance V of 1955), section 7, Schedule III (with effect
from 24th April, 1947), for Duties of Societies.
[17]Substituted by the Government of India (Adaptation of Indian Laws) Order, 1937 as
amended by the Government of India (Adaptation of Indian Laws) Supplementary Order,
1937, for Government.
[18]Substituted by the Sind Cooperative Societies (Amendment) Act, 1935 (Sind Act
XXII of 1935), section 2, for interest on debentures issued by them.
[19]Inserted by the Cooperative Societies (Punjab Amendment) Ordinance, 1984 (XL of
1984).
[20]Substituted by the Sind Laws (Adaptation, Revision, Repeal and Declaration)
Ordinance, 1955 (Sind Ordinance V of 1955), section 7, Schedule III (with effect
from 24th April, 1947), for property and funds of Societies.
[21]Inserted by the Sind Cooperative Societies (Amendment) Act, 1947 (Sind Act XX of
1947), section 5 (a).
[22]Substituted by the Government of India (Adaptation of Indian Laws) Order, 1937 as
amended by the Government of India (Adaptation of Indian Laws) Supplementary Order,
1937, for Govt.
[23]Added by the Sind Cooperative Societies (Amendment) Act, 1947 (Sind Act XX of
1947), section 5(b).

References

The weblography from which we have collected information are:-

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www.google.com
www.askme.com
www.wikipedia.com
www.wikiaskme.com
www.shareslied.com
www.scribd.com