COVID-19 has unfurled a variety of social and economic issues across the world. Laws designed to deal with the crisis (such as the Epidemic Diseases Act, 1897) allow the government to take special measures. However, multiple co-operative housing societies across India, driven by herd mentality, have presumed the power to take special measures on their own accord. Co-operative housing societies are reported to impose arbitrary rules such as restriction on entry of self-employed persons and even residents who have been away without such residents furnishing proof of having tested negative for COVID.
Housing societies are primarily governed by State co-operative societies statutes. Although this article focuses on the relevant laws in Maharashtra, corresponding laws in other States are on similar lines.
In Maharashtra, the Maharashtra Cooperative Societies Act, 1960 (“Act”) and the Maharashtra Cooperative Societies Rules, 1961 govern actions of cooperative housing societies. Nothing under the aforesaid statutes allow a housing society to issue instructions beyond what’s stated in the bye-laws. Although bye-laws often have broad provisions empowering office-holders of the society to take appropriate administrative actions for the smooth management of the society, a provision restricting entry of residents/ guests/ household-help would not ordinarily fall within the bye-laws.
Unless a society has amended its bye-laws for COVID specific provisions, chances are that the society is acting beyond its authority. Any amendment to the bye-laws requires approval of 2/3rd of the members of the society present and voting and is also required be approved by the jurisdictional registrar of cooperative societies.
The arbitrary rules being imposed by housing societies are adding to the socio-economic distress caused by COVID. Self-employed individuals such as domestic-help, carpenters, etc. are being restricted from earning their daily wages. Arbitrary restrictions on entry of guests or residents who have been away during the lockdown are making it difficult for people to resume “normalcy” and causing logistical problems for senior citizens and working parents.
The Maharashtra State Cooperation Minister, Mr. Balasaheb Patil, has on June 19th warned housing societies within the state from imposing arbitrary restrictions including on entry of household-helps and individuals selling essential goods. While no formal order or notification has yet been issued in this regard, the Minister has indicated that the State Government will soon be issuing written guidelines in this respect.
Meanwhile, there isn’t enough clarity on the correct forum which should be approached by members aggrieved by the arbitrary actions of the housing societies. The Act allows members to approach cooperative courts in case of dispute relating to, inter alia, business of the society. The Supreme Court has viewed the expression “business of the society” in a narrow sense and has equated the term “business” with the actual trading or commercial or other similar business activity of the society. Thus, the maintainability, in a cooperative court, of a dispute relating to operational matters of the society like entry and exit of guests and residents appears to be in the grey. Further, the ability of members to get quick relief from cooperative courts may also be limited due to the lockdown restrictions and the time-consuming litigation process (particularly with the lock down restrictions). The power of the jurisdictional registrars to entertain such disputes has also not been clearly set out in the Act. In view of such ambiguity and the fear of getting tangled in long drawn litigation, residents have no option but to wait for the state government to issue appropriate guidelines.
 Deccan Merchants Co-operative Bank Ltd. v. Dalichand Jugraj Jain and Ors. (AIR 1969 SC 1320) and The Co-operative Central Bank Ltd. and Ors. v. The Additional Industrial Tribunal, Andhra Pradesh and Ors. ((1969) 2 SCC 43).
Contributed by: Roopal Kulsrestha, Partner; Akshra Pandey, Associate
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