Circular mandates forming panel to ensure transparency, accountability, addressing long-standing issues in co-op societies
Under the new circular, a panel of three members, including the administrator appointed by the cooperative department and two society members, will handle administrative work. Representation pic
Gone are the days when administrators appointed to manage cooperative societies could make arbitrary decisions and embezzle society funds. The state cooperative department has recently issued a circular in response to numerous complaints, stating that administrators will no longer have the authority to make policy decisions or handle major repairs and redevelopment on behalf of the society. Instead, a panel consisting of the administrator and two additional society members will be appointed to oversee routine administrative tasks and jointly operate society bank accounts. Housing experts believe this circular will bring much-needed control, accountability, and transparency to around a thousand societies in Maharashtra that are currently managed by administrators due to internal disputes within society committees. Critics, however, view this move as a pre-election tactic.
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Administrator misused power
According to Ramesh Prabhu, founder chairman of Maharashtra Societies Welfare Association (MahaSEWA), many administrators have been involved in corrupt practices, including misappropriating society funds. The cooperative department has received numerous complaints regarding such administrators, leading to the issuance of this circular by the Commissioner of Cooperation and Registrar of Cooperative Societies in Maharashtra.
Under the new circular, a panel of three members, including the administrator appointed by the cooperative department and two society members, will handle administrative work. However, the panel will be prohibited from making policy decisions regarding major repairs or redevelopment. Notably, the administrator will require the signatures of the other two members to operate society bank accounts.
“This move will certainly stop the arbitrary decisions, exorbitant spending and high handedness of the administrator, and in some cases, the same administrator manages ten to twelve societies, and will bring the much-needed transparency, supervision and accountability on administrators,” said Prabhu.
Advocate Shreeprasad Parab, an expert director at the State Housing Federation, cited two legal cases to support the circular’s implementation. He explained that administrators have no authority to enrol new members or make policy decisions. Parab also highlighted a case where an administrator demonstrated the principle of natural justice by discussing a previously agreed-upon decision in a society’s general body meeting.
Parab further elaborated on the directive principles of the Indian Constitution, which promote autonomous functioning, voluntary formation, democratic setup, and professional management in cooperative societies. He emphasised that administrators should be appointed only when necessary, with the aim of rectifying administrative defects and ensuring society’s best interests.
Views differ
Asked about societies where willing members are unavailable to work with the administrator, Prabhu suggested that societies should approach the district housing federation to provide representatives for the panel, as they usually offer this service without any charge. Advocate Parab has a different view, he said, “Many of the societies request the district federation to be a part of the authorising committee appointed by the registrar. We inform the societies that there is no such provision in law whereby the district federation can participate and therefore if such order is further challenged it may lead to endless litigation.”
Expert view
Advocate Vinod Sampat, a cooperative law expert and former administrator, acknowledged that many administrators misuse their powers once appointed to societies facing disputes. He highlighted several issues, including administrators’ lack of visits to societies they oversee, reluctance to share contact information with society members, and failure to maintain proper records or hold annual general meetings. Sampat criticised the lack of seriousness displayed by the cooperative department in monitoring administrators’ activities. He also mentioned instances where administrators exceeded the allowed limit of managing three societies and extended their terms beyond the prescribed duration, as well as cases of unauthorised flat transfers. “The recent circular by the cooperative department appears, more to be an election gimmick, if the department was serious, then why was action never taken against administrators since 1960, for indiscipline or dereliction of duty? It is also a fact the Cooperative department is tagged as one of the most corrupt departments of state government, as the cases of deputy registrar and joint registrar caught red-handed for bribe demands are well-known. Earlier the cooperative department would call the administrator but post the 97th amendment administrators are called authorised officers,” said Sampat.
Appointment of administrators by registrar
A. Administrators are appointed by the registrar in the following cases:
1. Where there is a failure to elect a member to constitute a committee or when the committee does not assume office, etc.
2. Where the provisional committee has failed to make necessary arrangements for conducting the election for the formation of the first committee before its term expires.
3. Where the term of the committee of a society or any of its members has expired, or for any other reason, an election is held but there is a failure to elect all or some of the required members to fill the vacancies.
4. Where there is a deadlock in the constitution or the committee has ceased to function, creating a void in the society’s management.
5. Where multiple groups within a society claim to be elected as committee members and legal proceedings have been initiated in the Co-operative Court regarding the matter.
6. Where the committee or any of its members has engaged in activities that are detrimental to the society’s interests.
7. Where serious financial irregularities or frauds have been discovered.
B. Who may be appointed as an administrator or authorised officer:
The registrar may, either on their own initiative or upon the application of an officer or member of the society, appoint:
1. A committee comprising not more than three members of the society, typically excluding the existing committee members.
2. If no member or members of the society are willing to serve on such a committee, the registrar may appoint one or more authorised officers who are not members of the society or an administrator or a committee of administrators who need not be society members to manage the society’s affairs.
As explained by advocate Shreeprasad Parab
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