Less than 20 members chs ltd
8 months ago
Can a cooperative housing society be dissolved permanently ? Can a trust or social service organisation be built in it's place, if yes, kindly indicate the procedure.
A.Dear Client,
The most common reasons for a housing society to be dissolved are bankruptcy, inability to meet its objectives, involvement in illegal acts, an inadequate number of members, ceasing of functioning over time, contravention of law, or irreconcilable dysfunction. The procedure of dissolution of a registered cooperative society is laid down u/s.39 of the Co-Operative Societies Act, 1912. Sub-Sec. (1) to (5) of Sec.39 of the said Act deals with the dissolution of a cooperative society. As per Sec.39(1), If the Registrar, after an inquiry has been held under section 35 or after an inspection has been made under section 36 or on receipt of an application made by three-fourths of the members of a registered society, is of opinion that the society ought to be dissolved, he may cancel, the registration of the society. As per Sec.39 (2) Any member of a society may, within two months from the date of an order made under sub-section (1), appeal from such order. As per Sec.39 (3) Where no appeal is presented within two months from the making of an order canceling the registration of a society, the order shall take effect on the expiry of that period. As per Sec.39 (4) Where an appeal is presented within two months, the order shall not take effect until it is confirmed by the appellate authority. As per Sec.39 (5) The authority to which appeals under this section shall lie shall be the State Government: Provided that the State Government may, by notification in the Official Gazette direct that appeals shall lie to such Revenue authority as may be specified in the notification. Thus, on the official dissolution of the cooperative society, the members of the earlier society can form a Trust following the provision of The Indian Trusts Act, 1882 and by registration of a Deed of Trust with the Registering Authority under the Registration Act, 1908. A Trust and a Society cannot be amalgamated. There is a single-man control in trust. However, there exists a democratic control in society where decisions are taken by voting. The board of management of a trust contains trustees, but in the case of society, there is a governing body that comprises of committee, trustees, council, directors, governors, etc. So, considering the pros and cons of both the entity, you have to decide the matter that can serve the purpose specially in the case of a housing society.
The most common reasons for a housing society to be dissolved are bankruptcy, inability to meet its objectives, involvement in illegal acts, an inadequate number of members, ceasing of functioning over time, contravention of law, or irreconcilable dysfunction. The procedure of dissolution of a registered cooperative society is laid down u/s.39 of the Co-Operative Societies Act, 1912. Sub-Sec. (1) to (5) of Sec.39 of the said Act deals with the dissolution of a cooperative society. As per Sec.39(1), If the Registrar, after an inquiry has been held under section 35 or after an inspection has been made under section 36 or on receipt of an application made by three-fourths of the members of a registered society, is of opinion that the society ought to be dissolved, he may cancel, the registration of the society. As per Sec.39 (2) Any member of a society may, within two months from the date of an order made under sub-section (1), appeal from such order. As per Sec.39 (3) Where no appeal is presented within two months from the making of an order canceling the registration of a society, the order shall take effect on the expiry of that period. As per Sec.39 (4) Where an appeal is presented within two months, the order shall not take effect until it is confirmed by the appellate authority. As per Sec.39 (5) The authority to which appeals under this section shall lie shall be the State Government: Provided that the State Government may, by notification in the Official Gazette direct that appeals shall lie to such Revenue authority as may be specified in the notification. Thus, on the official dissolution of the cooperative society, the members of the earlier society can form a Trust following the provision of The Indian Trusts Act, 1882 and by registration of a Deed of Trust with the Registering Authority under the Registration Act, 1908. A Trust and a Society cannot be amalgamated. There is a single-man control in trust. However, there exists a democratic control in society where decisions are taken by voting. The board of management of a trust contains trustees, but in the case of society, there is a governing body that comprises of committee, trustees, council, directors, governors, etc. So, considering the pros and cons of both the entity, you have to decide the matter that can serve the purpose specially in the case of a housing society.
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A.Dear client,
A registered society has four broad parameters to dissolve it. They are
Passing a resolution
Presentation to the General Body
Authorisation
Certificate of dissolution
But for further clarity, we have broken down the entire process step by step. And the steps are as follows:
First, the members call for a special body meeting and discuss the intent of dissolution and whether it is to be dissolved immediately or at a later date. Once there is an agreement between the members, the meeting is adjourned, and the proceedings are initiated.
The next step in the process is sending out a notice to the members, creditors, vendors, any other societies the dissolving society is associated with, and any other entity with which it may have entered a contract that has not yet been redeemed.
Then a general body meeting is convened, and a vote is taken. For the resolution to be accepted, the majority or 3/5th of the total votes must be in favour of dissolution.
Once the resolution is passed, the first step that society must take is to settle all claims and liabilities against it. This includes creditors, loans etc.
A copy of the authorised resolution has to be then sent to the registrar of societies within fifteen days of passing the resolution. No registered society can be dissolved without the registrar’s approval, and the resolution will be considered invalid. A report of the settlement of all claims and liabilities has to be sent along with details of any surplus funds. If the State Government is a member/contributor/affiliate of the society in any form, then approval has to be sought from them as well.
The next step is actionable by the registrar. The registrar will inspect the details of the case. Suppose he is satisfied with the due process undertaken by society and is assured that there are no liabilities or assets. In that case, he will pass the order to dissolve the society and strike off the society’s name from the register of societies and issue a certificate of dissolution to the society.
However, suppose the registrar is not satisfied after review. In that case, he will issue a notice in the official gazette (the cost of which is to be borne by the society) of the proposed dissolution, thereby inviting objections and appeals from members and will direct the society to dispose of unpaid dues towards claimants and creditors within 2 to 3 months.
If no objection is raised and no member comes forth to appeal against the resolution, the order is considered passed after the expiry of the time period of 2-3 months. If an objection is raised during that period, the order is not considered in effect until the Appellate steps in and takes the process ahead.
Section 13 of the Societies Registration Act 1860 includes the following provision – ‘In case of any dispute relating to adjustment of affairs of a society in case of dissolution, the matter has to be referred to the Principal Court of Civil Jurisdiction of the District where the Registered Office of the society is situated.’
A registered society has four broad parameters to dissolve it. They are
Passing a resolution
Presentation to the General Body
Authorisation
Certificate of dissolution
But for further clarity, we have broken down the entire process step by step. And the steps are as follows:
First, the members call for a special body meeting and discuss the intent of dissolution and whether it is to be dissolved immediately or at a later date. Once there is an agreement between the members, the meeting is adjourned, and the proceedings are initiated.
The next step in the process is sending out a notice to the members, creditors, vendors, any other societies the dissolving society is associated with, and any other entity with which it may have entered a contract that has not yet been redeemed.
Then a general body meeting is convened, and a vote is taken. For the resolution to be accepted, the majority or 3/5th of the total votes must be in favour of dissolution.
Once the resolution is passed, the first step that society must take is to settle all claims and liabilities against it. This includes creditors, loans etc.
A copy of the authorised resolution has to be then sent to the registrar of societies within fifteen days of passing the resolution. No registered society can be dissolved without the registrar’s approval, and the resolution will be considered invalid. A report of the settlement of all claims and liabilities has to be sent along with details of any surplus funds. If the State Government is a member/contributor/affiliate of the society in any form, then approval has to be sought from them as well.
The next step is actionable by the registrar. The registrar will inspect the details of the case. Suppose he is satisfied with the due process undertaken by society and is assured that there are no liabilities or assets. In that case, he will pass the order to dissolve the society and strike off the society’s name from the register of societies and issue a certificate of dissolution to the society.
However, suppose the registrar is not satisfied after review. In that case, he will issue a notice in the official gazette (the cost of which is to be borne by the society) of the proposed dissolution, thereby inviting objections and appeals from members and will direct the society to dispose of unpaid dues towards claimants and creditors within 2 to 3 months.
If no objection is raised and no member comes forth to appeal against the resolution, the order is considered passed after the expiry of the time period of 2-3 months. If an objection is raised during that period, the order is not considered in effect until the Appellate steps in and takes the process ahead.
Section 13 of the Societies Registration Act 1860 includes the following provision – ‘In case of any dispute relating to adjustment of affairs of a society in case of dissolution, the matter has to be referred to the Principal Court of Civil Jurisdiction of the District where the Registered Office of the society is situated.’
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