Roll No:60

ACKNOWLEDGEMENT:-

The satisfaction that accompanies the successful completion of any task

would be incomplete without mentioning the names of people who made it
possible, whose constant guidance and encouragement crown all the efforts with
success.

I wish to thank to the Head of M.Com. Department Prof. Hasina Sayed and
Prof. Santosh Ghag for her encouragement and support throughout the project it is
due to her best effort and continued guidance that I was able to prepare this project.

I also take this opportunity to express my deep regards and gratitude to

the Principal Dr. Ashok Wadia and also I would thank the University of Mumbai
and to give me this opportunity to explore the valuable information related to this
topic.

I would also thank to my parents and friends for their support and cooperation in the course of the project either directly or indirectly involved in time
with their valuable contribution.

Roll No:60

CONTENT

PAGE NO.

INTRODUCTION TO CO-OPERATIVE SOCIETIES

CHARACTERISTICS & TYPS

ADVANTEGES & LIMITATIONS

14

PRINCIPALS, ACT & RULS

16

PROFILE OF THE CO-OPERATIVE SOCIETY

29

INCOME & EXPENDITURE STATEMENT

33

CONCLUSION

37

BIBLIOGRAPHY

38

Roll No:60

INTRODUCTION
So far you have learnt about sole proprietorship, partnership and joint stock company as
different forms of business organisation. You must have noticed that besides many differences among
them in respect of their formation, operation, capital contribution as well as liabilities, one common
similarity is that they all engage in business activities to earn profit. Without profit it is impossible
for them to survive and grow. But there are certain organisations which undertake business activities
with the prime objective of providing service to the members. Although some amount of profit is
essential to survive in the market, their main intention is not to generate profit and grow. They pool
available resources from the members, utilise the same in the best possible manner and the benefits
are shared by the members.
Co-operative movement in our country shall not only stay but also grow in times to come. In
spite of the drawbacks experienced in the working and administration of the co-operative societies,
they have positively contributed to the growth and development of the national economy. Promotion
of thrift, self-help and mutual aid are the fundamental principles of co-operation. The orientations of
commercial organization and co-operative organizations are basically different. In a commercial
organization, earning and maximizing the profits is the sole motive; whereas in a co-operative
organization profit cannot be the sole motive. The prime objectives, in addition to the three
fundamentals of co-operation mentioned above are to make available the goods and services in
required quantity, of better quality and at a reasonable price to its members. It does not mean that a
Co-operative Society is a charitable organization. It should, therefore, conduct itself in a business
like manner in attaining its objectives efficiently.

Roll No:60

Broadly speaking there are three sectors operating in the Union of India.
1. PUBLIC SECTOR wherein the State i.e. The Union of India and the respective State
Government undertake developments projects which are wholly owned by either the Central
Government or the State Government.
2. PRIVATE SECTOR which is a sector where private enterprises are permitted in certain fields of
economic activities.
3. CO-OPERATIVE SECTOR which is beautifully blended in between a public sector and the
private sector. It has benefits of both the sectors and disadvantages of neither of them.
MEANING

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 Business Studies 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
4

Roll No:60

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 cooperative 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.
In a similar way, the consumers of a particular locality can join hands to provide goods of their daily
need and thus, form a co-operative society. Now they can buy goods directly from the producers and
sell those to members at a cheaper price. Why is the price cheaper? Because they buy goods directly
from the producer and thereby the middlemens profit is eliminated.

CHARACTERISTICS

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.
5

Roll No:60

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 cooperative society. However, after the formation of the society, the member may specify the maximum
number of members.
ii. Voluntary Association: 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.
v. 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 members.

Roll No:60

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.
vi. 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 co-operative store only a small part of the profit
is distributed to membersMas 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.
vii. 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.

TYPES

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 7

Roll No:60

(a) The object of which is the marketing of agricultural produce and the supply of implements and
other requisites for agricultural production, and
(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 o
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
8

Roll No:60

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 society
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.
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.
9

Roll No:60

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, (a) 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

ADVANTAGES

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.

10

Roll No:60

ii. Open Membership: 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.

LIMITATIONS
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.

11

Roll No:60

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 cooperation. 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.

PRINCIPLES

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.

12

Roll No:60

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 :
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
13

Roll No:60

society, shall not hold more than 1/5 of the total capital or interest in shares or exceeding Rs.
20,000/- 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.

ACT & RULES APPLICABLE

A Co-operative Society functions as per the provisions of
1. Co-operative Societies Act under which the same is registered.
2. Co-operative Societies rules made there under
3. Bye-laws approved by the registrar at the time of registration and amendments made from time to
time and approved by the registrar.
4. Notification and Orders
1. Co-operative Societies Act

14

Roll No:60

We have a number of Co-operative Societies Acts functional in different states like

- Maharastra Co-operative Societies Act, 1960,
- Pondicherry Co-operative Societies Act, 1972,
- Karnataka Co-operative Societies Act, 1959,
- Delhi Co-operative Societies Act, 1972,
- Kerala Co-operative Societies Act etc.
When the area of operation is restricted to one state, the State Co-operative Act & Rules, under
which the society is registered will be applicable.
In a particular state, if Co-operative Act and Rules is not enacted, the Central Act which is known as
The Co-operative Act, 1912 and its rules will be applicable. When the area of operation of Society is
spread in two or more states. The Multi-State Co-operative Societies Act, 2002 and its rules shall be
applicable.
2. Co-operative Societies Rules
A set of rules is also framed under the respective State Co-operative Act for procedural aspects.
3. Bye-laws
Each society also registered with the bye-laws for internal management of the societies duly
approved by the registrar at the time of registration of the society. The bye-laws of a society
constitute a contract between a member and the society and it provide for the management of the
society. The bye-laws are framed within the provisions of the Act and the rules made there under.
Bye-laws include the objects of the society and completely define and restrict the societys
activities, but the rights and liabilities of members are determined by the Act and Rules and not by
the bye-laws as such.

15

Roll No:60

4. Notification and Orders

Issued from time to time by the Government, or any other Authority as prescribed under the Act,
Rules there under.

PROVISIONS FOR REGISTRATION

There are different types of Co-operative Societies, which can be registered under the
Maharashtra Cooperative Societies Act, which were explained earlier.
In all these types of societies, the procedure to be followed for formulation of registration proposals
slightly differs. The requirements in respect of each type of co-operative societys needs to be
properly understood by every promoter, or the professional charged with the responsibility of getting
the society registered (chief promoter).
PROVISIONS UNDER THE M.C.S. ACT, 1960
Sections 3 to 11of the Act, provide for registration of Societies and the conditions for the same.
Section 4 provides for a nature of an organization, which can be registered as a Society. Section 6
lays down the conditions for registration of the Society. Section 8 provides for application for

16

Roll No:60

registration bye-laws and the registration fees. Section 9 provides for time bound registration of the
Society and the bye-laws.
JURISDICITION
Each Society based on its area of operation has to be registered by the Registrar appointed by the
Government for the particular jurisdiction. 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. Other places in each Taluka one Deputy/Assistant Registrar, Registers &
Supervises the Societies.

SOCIETIES, WHICH MAY BE REGISTERED

As per section 4, a society, which has as its objects the promotion of the economic interests or
general welfare of its members or of the public, in accordance with co-operative principles or a
society established with the object of facilitating the operations of any such society, may be
registered under this Act: Provided that, no society shall be registered if it is likely to be
economically unsound, or the registration of which may have an adverse effect on development of
the co-operative movement, or the registration of which may be contrary to the policy directives,
which the State Government may, from time to time, issue.
REGISTRATION WITH LIMITED OR UNLIMITED LAIBILITY
As per section 5, a Society may be registered with limited or unlimited liability. As per section
2[28] society with limited liability means a society having the liability of its members limited by
its bye-laws; As per section 2[29] society with unlimited liability means a society, the members of
which are, in the event of its being wound up, jointly and severally liable for and in respect of its
obligations and to contribute to any deficiency in the assets of the society;
17

Roll No:60

CONDITIONS OF REGISTRATION
(1) No society, other than a federal society, shall be registered under this Act, unless it consists of at
least ten persons [or such higher number of persons as the Registrar may, having regard to the objects
and economic viability of a society and development of the co-operative movement, determine from
time to time for a class of societies](each of such persons being a member of a different family), who
are qualified to be members under this Act, and who reside in the area of operation of society :
[Provided that, a lift irrigation society consisting of less than ten but of five or more such persons
may be registered under this Act.]
(2) No society with a limited liability shall be registered, unless all persons forming the society
reside in the same town or village, or in the same group of villages.
[(2-A) No crop protection society shall be registered, unless the Registrar is satisfied, after such
inquiry as he thinks necessary, that a draft of the proposal made by the society for protecting crops,
structures, machinery agricultural implements and other equipment such as those used for pumping
water on the land, was duly published for inviting all owners of land likely to be affected by the
proposal and all other persons likely to be interested in the said lands to join the proposal or to send
their objections or suggestions and that the objections and suggestions received , if any, have been
duly considered by the society and that the owners in possession of not less than 66 percent in the
aggregate of lands included in the proposal have given their consenting writing to the making of the
proposal and that the proposal made is feasible.
For this purpose, the society shall submit to the Registrar:
(a) a plan showing the area covered by the proposal and the surrounding land as shown in the map or
maps of the village or villages affected;
(b) an extract from the record of rights duly certified showing the names of the owners of lands and
the areas of the lands included in the proposal;
(c) Statements of such of the owners of the lands as consented to the making of the proposal signed
by owners before two witnesses;
(d) a detailed estimate of the cost of implementing the proposal;
18

Roll No:60

(e) a detailed statement showing how the cost is proposed to be met.

When such society is registered, the cost of implementing the proposal shall be met wholly or in part
by contribution to be levied by the society from each owner of the land included in the proposal,
including any such owner who may have refused to become a member of the society. The owner of
every land included in the proposal shall also be primarily liable for the payment of the contribution
liable from time to time in respect of such land].
(3) No federal society shall be registered unless it has at least five societies as its members.
(4) Nothing in this Act shall be deemed to affect the registration of any society made before the
commencement of this Act.
(5) The word limited or unlimited shall be the last word in the name of every society with
limited or unlimited liability, as the case may be which is registered or deemed to be registered under
this Act. Explanation: For the purpose of this section and section 8, the expression member of
family means wife, husband, father, mother, [son, or unmarried daughter]
POWER TO EXEMPT SOCIETIES [OR CLASS OF SOCIETIES] FROM CONDITIONS AS
TO REGISTRATION
As per section 7, notwithstanding anything contained in this Act, the State Government may, by
general or special order, exempt any society or class of societies from any of the requirements of this
Act as to registration, subject to such conditions (if any) as it may impose.
APPLICATION FOR REGISTRATION
As per section 8
(1) For the purpose of registration, an application shall be made to the Registrar in the prescribed
form and shall be accompanied by four copies of the proposed bye-laws of the society and such
registration fee as may prescribed in this behalf. Different registration fees may be prescribed for
different class of societies, regard being had to the service involved in processing an application for
registration. The person by whom, or on whose behalf, such application is made, shall furnish such
information in regard to the society, as the Registrar may require.
19

Roll No:60

(2) The application may be signed

a) in case of a society other than a federal society by at least ten persons (each of such person being a
member of different family), who are qualified under this Act, and,
b) in the case of a federal society, by at least five societies.
No signature to any application on behalf of a society shall be valid, unless the person signing is a
member of the committee of such a society and is authorized by the committee by resolution to sign
on its behalf the application for registration of the society and its bye-laws; and a copy of such
resolution is appended to the application.
REGISTRATION
As per section 9
(1) If the Registrar is satisfied that a proposed society has complied with the provisions of this Act
and the Rules, [or any other law for the time being in force, or policy directives issued by the State
Government under section 4], and that its proposed bye-laws are not contrary to this Act or to the
rules, he [shall, within two months], from the date of receipt of application register the society and its
bye-laws.
(2) Where there is a failure on the part of the Registrar to dispose off such application within the
period aforesaid, the Registrar shall, within a period of fifteen days from the date of expiration of
that period refer the application to the next higher officer and where the Registrar is himself the
registering officer, to the State Government, who are which, as the case may be, shall dispose of the
application within two months from the date of its receipt and on the failure of such higher officer or
the State
Government, as the case may be, to dispose of the application within that period, the society and its
bye-laws shall be deemed to have been registered.[and thereafter the Registrar shall issue a
certificate of registration under his seal and signature within a period of fifteen days.
(3) Where the registrar refuses to register a proposed society, he shall forthwith communicate his
decision, with reasons therefore, to the person making the application and if there be more than one
to
20

Roll No:60

the person who has signed first therein.

(4) The Registrar shall maintain a registrar of all societies registered or deemed to be registered,
under the Act.

PROCEDURE FOR REGISTRATION

The procedure for registration of society can be explained as the following steps:
1. APPOINTMENT OF CHIEF PROMOTER
The first step to register a 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.
c) To collect the entrance fee and share capital from the prospective members.
d) To open the Bank account in the name of chief promoter
e) To decide about area of operation of the Society and
f) To decide about the registered office of the Society

21

Roll No:60

g) To authorize chief promoter to submit the proposal for registration and to do any other thing to get
the society registered.
2. 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. 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.
3. 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 contain 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 Maharashtra State Co-operative Bank or any other urban Co-operative bank.
4. 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.2,500/- and for general
Society is Rs.1250/-.
5. REGISTRATION PROPOSAL
The fifth and final step is to prepare and to submit to RA the proposal for registration of the
society.

22

Roll No:60

Under Rule 4 of Maharashtra Co-operative Societies Rules the chief promoter should submit the
following documents for registration
a) Application for registration - Form A
An application for registration of a society should be made in form. The specimen of Form A. The
application for registration in quadruplicate should be signed by at least 60% of the promoters
members and Chief Promoter should attest their signatures.
b) Four copies of the proposed bye-laws of the society
c) A list of promoters members, such as the name age occupation current residential a address of the
promoter member the cost of share amount etc.
d) A certificate from the Bank or Banks stating the credit balance therein in favour of the proposed
society;
e) A scheme showing the details explaining how the working of the society will be economically
sound and where the scheme envisages the holding of immovable property by the society, the
description of such property proposed to be purchased, acquired or transferred to the society;
f) Such other documents as may be specified in the model bye-laws, if any, framed by the Registrar;
g) The registration fees at the applicable rates,
h) Other documents like affidavit, indemnity bonds, copy of ration cards, public notice in newspaper
etc., as may applicable for different types of society as per the notification issued from time to time.
6. REGISTRATION PROCEDURE
As per rule 5[1] On receipt of an application under Rule 4 the Registrar shall enter particulars of
the application in the register of application to be maintained in Form B give a serial number to the
application and issue a receipt in acknowledgement thereof. 5[2] The Registrar may give where
necessary opportunity to the promoters to modify the proposed bye-laws before finally registering
the society or rejecting the application for registration of the society. 5[3] On registering a society
23

Roll No:60

and its bye-laws under sub-section (1) of section 9 the Registrar shall as soon as may be, notify the
registration of the society in the Official Gazette and grant to the society a certificate the Registration
number of the society, and the date of its registration. The registrar shall also furnish the society with
a certified copy of the bye-laws approved and registered by him.

7. REFUSAL OF REGISTRATION
Where any society does not furnish the information in regard to the society as required by the
Registrar or fulfill any of the conditions laid down in the Act or these Rules, Notification or orders,
the Registrar may refuse to register that society.
8. APPEALS
Under section 152 an appeal against an order or decisions of registration of society, refusal of
registration of society shall lie
(a) if made or sanctioned or approved by the Registrar, or the Additional or Joint Registrar on whom
powers of the Registrar are conferred, to the State Government.
(b) If made or sanctioned by any person other than the Registrar, or the Additional or Joint Registrar
on whom the powers of the Registrar are conferred to the Registrar.
Ultimately a remedy of Writ Petition under Article 226 or 227 of the Constitution of India is always
available even to a Co-operative society or a person aggrieved in an extraordinary circumstances.
Which means if the decision of State government on the appeal made by the aggrieved party is not
acceptable a Writ Petition can be filled in the High Court and then Supreme Court.

24

Roll No:60

THE SARASWAT SUBURBAN CO-OPERATIVE HOUSING SOCIETY

LIMITED
(Registered under the Co-operative Societies Act II of 1912 on 12th March 1919)
AUTHORISED CAPITAL : Rs 15,00,000.00
Divided into 30,000 shares of Rs 50.00 each

REGISTERED OFFICE:
10/4, Saraswat Colony,
Santacruz West Mumbai 400054

MANAGING COMMITTEE
CHAIRMAN
Mr Edwin V Dsouza
(till 8th May 2012)
Mr Rajendra P Kalyanpur
(from 8th May 2012)

HON SECRETARY
Mr Vivek N Kalbag

HON TREASURER
Mrs Shobha D Kabad

BANKERS
THE SHAMRAO VITHAL CO-OPERATIVE BANK LIMITED
Santacruz West Branch, Mumbai 400054
THE MAHARASHTRA STATE CO-OPERATIVE BANK LTD
Santacruz West Branch, Mumbai 400054

AUDITORS:
M/s YARDI PRABHU & ASSOCIATES
25

Roll No:60

REPORT BY THE MANAGING COMMITTEE

Highlights of Financials The Managing Committee is pleased to present the Accounts for the period
ended 31st March, 2013. The deficit for the year is Rs 4,37,530. The deficit is mainly due to the
member dues of Rs 7,64,221 being written off. The details of the write off are Mr. Aditya Sashittal
Rs 5,82,663, Mr. Uday Kailaje Rs 1,26,718 and refund of Rs 54840 to Mr Surendra Hattikuddur.
These amounts were written off as per the recommendation of the Sub-Committee formed and
approved by the General Body.
The Expenses which have mainly increased or decreased are :
1. Electricity charges increased by Rs 71226/- mainly due to increase in rates form November 2012.
2. Security expenses have increased by Rs 1,68,313/- mainly due to increase in their salary per
person from Rs 3,300/- to Rs 5,500/- from July 2013. On an average 11 guards are employed in two
shifts.
3. Administrative Charges:
The employee emoluments have decreased by Rs 42032/- mainly due to absence
of a Manager when the work was carried out by the Hon Secretary in that interim period. The legal
expenses have decreased by Rs 1,76,495/- mainly due to one off
expenses incurred last year i.e 2011-12 in respect of survey fees and BMC boundary wall case.
The miscellaneous expenses have increased by Rs 12,569/- mainly due to
expenses incurred on the Adhaar card drive Rs 10500/-organised by the Society. The members of
the society benefitted from the drive due to excellent efforts by Dr Shashi Marballi and the Managing
Committee thanks him for the same. Printing and stationery has increased by Rs 19720/- mainly due
to increase in
Xerox charges due to circulation of Sub-Committee reports / guidelines on major repairs, etc.
4. Cleaning and Maintenance Rs 26850/- - this increase was due to increase in charges effective July
2012 from Rs 39100/-p.m to 42000/- p.m.
5. The pest control expenses have increased by Rs 2,03,660/- mainly due to termite contract
undertaken upto 2017.
In respect of the increase in property tax of Rs 15,25,206/-raised by the Bombay Municipal
Corporation (BMC) for 2010-11, 2011-12 and 2012-13, the Society has not made the payment as the

26

Roll No:60

decision to collect the new taxes has been postponed by the BMC and the same is reflected in the
Balance Sheet.
Status of the project completed in 2012-13
1. Room repairs of B 1/7
2. Toilet repairs of servant quarters
3. Laying down the pipeline to carry water from the ring well to the common toilet
Planned/proposed
1. Society office renovation. This is pending due to major repairs of building no 10.
2. Repair of Anandashram hall
3. Repair and renovation of the society store room located near building 12.

STATEMENT OF PROGRESS
Name of the Society

The Saraswat Suburban Co-operative

No and date of Registration

Housing Society Limited

No 2300 of 12.03.1919 (changed to No B&

Situation of land taken up

on 07.05.1921
Town planning Scheme II, Santacruz (W),

Survey No City Survey

Mumbai - 400054
G 330 to 337, 340 and 347 to 355

Municipal Improvement Trust Census Nos

Main plot no 82 sub plot nos 19 to 24, 26 to

28, 32 to 34 and 40 ('H' (West) Ward No
2972)

Free hold land

Original Area 17,053 square -metresFinal

Atre T.P.S. Awards 16,202 square-metres

Built upon

3,272.22 square-metres

AREA
1922-1924, A, B, C, D. Types1929, 1939 & 1957 Servants Quarters and Office Annexe1976- 1986
Building 1 to 13 in place of A, part B, C, DTypes, Midtenements of 'G' Bldg.1963 Garage ('E'

27

Roll No:60

Type)1966-1967 Garage ('F' Type Bldg and FOUR GARAGES 'E' Type)1967- 1968 'G' Type1969 - 4
Garages 'E' Type1971 - 6 Garages 'E' Type & Sanitary Block.

TOTAL COST
Completed Carpet Area

91577 square-feet

Land and Development

Rs 36,768.00

Buildings B-1, B1/9, F, G & 1 to 13 and 14

Rs 1,45,51,946.00

Servants W.C. etc and New Sanitary Block

Rs Nil

W/D/V
Garage ('E' Type) (Original Book Value)

Rs 1,35,423.00

DETAILS OF MEMBERS
As of 31.3.2012
Sr No

Type of Member

Nos

Share
Capital Rs

As od 31.3.2013
Nos

Share
Capital Rs

Full Co-partner Tenant Member

185

8,89,650

185

889650

Full Co-partner Tenant Member

17050

17050

Ordinary Members

50

50

187

906750

187

906750

Total dues from Members

28

Roll No:60

INCOME & EXPENDITURE STATEMENT

SCHEDULE FORMING PART OF
INCOME & EXPENDITURE ACCOUNT
SCHEDULE - 9
ADMINISTRATION CHARGES
st

As at 31 March
2012 Rs
242742.00
4742.00
5520.00
298089.00
7425.00
11140.00
27240.00
28026.00
17260.00
22134.00
13610.00
11256.00
81100.00
2569.00
6103.00
778956.00

PARTICULARS
Employee emoluments
Canteen Expense & Staff Welfare
Special Medical & Other Allowances
Legal Professional Fees
Audit Fees
Postage & Telephone
Printing Charges
N.A.Tax
Meeting Expenses
Computer Expenses
Conveyance Expenses
Miscellaneous Expenses
Accounting Charges
Subscription
Advertising Expenses

As at 31st March
2013 Rs
205710.00
3915.00
121593.00
18700.00
10974.00
45160.00
14013.00
20625.00
38435.00
5658.00
23825.00
90000.00
2060.00
1774.00
602442.00

29

Roll No:60

MINUTES OF THE SPECIAL GENERAL MEETING HELD ON 21st April 2013

Members present: 49
Chairman called the meeting to order. On behalf of the Managing Committee (MC), he welcomed all
members to the SGM and commenced the meeting with the customary prayers which were led by Mr
Niranjan Nagarkatte.
Chairman informed the House that the SGM had been convened with a 2-point agenda one with
regard to the revised property taxes and the other to announce the results of elections to the New
Managing Committee. Chairman proposed that the notice be considered as read since it had been
circulated to all members in advance. The General Body agreed to the same and the agenda was
taken up for discussion.

1. To discuss and decide on the revision of property taxes by the Municipal Corporation of
Greater Mumbai
Chairman informed the House that this matter had been extensively discussed by the MC. There are
primarily three issues that have to be addressed and decided upon by the House. The first is with
regard to the calculation of the property taxes based on the revised guidelines whether we need to
file any complaint with regard to errors in calculation; the second is with regard to the payment of
the revised property taxes if the order is not withdrawn or not further postponed beyond 30th June
2013 and the last issue is in respect of challenging whether at all the BMC is justified or t is within
its right to revise the property taxes in this manner. With regard to the last point, the Society has
received representations from Mr Vasant Nayampally and a joint represenetation from a few others.
Each of these issues were taken up for discussion.

With regard to the calculation of the revised property taxes, Chairman pointed out that many must be
aware based on media reports that the property taxes will be based on the SDRR (Stamp Duty Ready
Reckoner Rates) of 2010. Various weightages are then applied to this rate to arrive at the capital
value based on which the property taxes will be calculated. The weightage factors apply to the type
of construction, age of the building, the floor on which the flat is located, type of user (residential or
commercial) etc. The capital value will then be arrived at based on the built-up area which is worked
out by increasing the carpet area by 20%.

30

Roll No:60

The revised property taxes are applicable from 2010-2011. The bills received from the BMC show
the detailed calculations which ad been put on an excel sheet and an analysis had been made. The
property tax as a percentage of the capital value so determined is not very clear. While as a per a
seminar that we attended and the BMC bills the tax is 0.775%, that based on the bills works out to
0.349% for residential flats; 2.606% for the bank; 0.512% for garages over 0.6% for other
commercial premises like Homeopathic Research. An old building and a few garages are missing in
the bills. There are some minor variations in the carpet area shown by BMC visa-a-vis that shown in
the BMC bills. However, on an overall basis, the total carpet area shown as per the bills is marginally
less than those available with us. The floor was then thrown open for discussions. Further, the
revised taxes will be capped at twice the per-revised taxes and there would be no revision in case if
flats lesser than 500 sq-feet. Under these circumstances, as a thumb rule the property taxes will be
doubled.

Various points were made. There was a school of thought that we must engage experts lawyers,
consultants, architects etc to determine whether we have to file a complaint. Another view was that's
once this was an important issue, member participation has to be much more. This could be best done
by involving the Building Representatives and other volunteering members. With regard to engaging
experts, which would involve a cost to the members, it was felt that this must be done only after
ascertaining what sort of expertise we ourselves lack in. Another view expressed was computing the
built-up area based on increase in carpet area by 20% may not be justified in our case since we had
RCC walls which were thinner. After discussions at length it was decided that a Sub-Committee
comprising Of the MC, Building Representative and volunteering members be constituted. This SubCommittee was authorised by the House to decide on whether a complaint on calculations had to be
at all filed. Thus sub-Committee was also authorised to decide on the necessity of hiring experts. Mr
Kiran Bajekal, Mr P K Mukherjee, Mrs Praneeti Nadkarni & Mr V N Nayampally volunteered to be
on the SubCommittee in addition to tge MC members and the Building Representatives

There were discussions at length on the payment of the arrears arising out if the property tax
revision. It was decided that another SGM shall be convened in the second/third week of June to take
a stock of the situation with regard to postponement of payment or withdrawal of the revision in
property taxes. The majority did feel that as a law abiding Society we shall abide by the law.
Decision on payment of the arrears and the manner in which the arrears will be funded and recovered
from members will be decided at the proposed SGM.
31

Roll No:60

With regard to the third issue opinions were raised on various issues. Firstly, there was a view that
levying property taxes based on the capital value evolved based on SDRR 2010 was incorrect.
However, there was no clarity on the basis on which the property tax was calculated earlier. It was
also suggested that we must make a representation to the BMC similar to what other Societies had
done. Chairman informed the House that this issue was discussed at length by the MC. The MC was
of the opinion that making such a representation was a futile exercise since all were making it with
the same draft. Chairman felt that such an issue is best taken on a collective basis by using the
Housing Federation that represents the Housing Societies. After discussions at length it was decided
that the Society must consult our Legal Adviser in the matter. The Society will also write to the
Federation and a group of members may also visit them and discuss the matter with the Federation.
Mr Mukherjee and Mr Nayampally volunteered to visit the Federation for these discussions.

2. To announce the results of the Elections to the Managing Committee and announce the
newly constituted Managing Committee that will take over from the present Managing
Committee
Chairman read out the report submitted by the Returning Officer Dr Shashi Marballi which is
appended at Annexure 1. Chairman thanked Dr Marballi in effectively discharging his duties as the
Returning Officer. He congratulated all the newly elected members for the new MC. He also thanked
and placed on record the services rendered by the outgoing members Mr Jayant Mangalore and Mr
Sumant Ullal. He also placed on record the services rendered by Mr P K Mukherjee who had
resigned earlier from the MC.

32

Roll No:60

CONCLUSION
Co-operative movement in our country shall not only stay but also grow in times to come. In spite of
the drawbacks experienced in the working and administration of the co-operative societies, they have
positively contributed to the growth and development of the national economy. Promotion of thrift,
self-help and mutual aid are the fundamental principles of co-operation. The orientations of
commercial organization and co-operative organizations are basically different. In a commercial
organization, earning and maximizing the profits is the sole motive; whereas in a co-operative
organization profit cannot be the sole motive. The prime objectives, in addition to the three
fundamentals of co-operation mentioned above are to make available the goods and services in
required quantity, of better quality and at a reasonable price to its members. It does not mean that a
Co-operative Society is a charitable organization. It should, therefore, conduct itself in a business
like manner in attaining its objectives efficiently.

33

Roll No:60

BIBLIOGRAPHY
https://www.google.co.in/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF8#q=cooperative%20housing%20society%20balance%20sheet
https://www.maharashtra.gov.in/site/Upload/Acts%20Rules/Marathi/1.Maharashtra_Cooperative_Societies_Act_1960%20(XXIV%20of%201961) =accessed on 22/03/2015
REFRENCES:
Advance Financial Accounting, Page No. 375-410.

34