Expulsion of a Member from a Cooperative Housing Society

August 28, 2019
By Team MyGate
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Co-operative societies function on the concepts of mutual assistance and self-help and work towards common goals with harmonious living. If there are a few bad apples in the communal kitchen, the model bye-laws provide guidelines on how to get rid of them. It is important to note that the removal of a member from a co-operative society is not a pleasant or rewarding task and should only be used as a last resort when the case of harassment or non-compliance from the member’s side is extreme and cannot be remedied by peaceful means.

Under what circumstances can a member be expelled from a society?

Detrimental acts that endanger the safety or deregulate the workings of the society are grounds for expulsion. A member can be expelled if:-

  • He constantly and persistently refuses to pay due charges to the society (despite reminders and notices)
  • He intentionally gives false information to the society to mislead and deceive
  • He misuses his residence for immoral, illegal or inappropriate reasons time and again
  • He breaches the bye-laws or rules of the society consistently and if they are considered of a serious nature by the managing committee
  • He has submitted false information at the time of registration or failed to submit essential information that could have potentially hampered his membership
  • He is a non-active member who has not attended a single general body meeting for five years

What is the procedure for expulsion?

Model bye-laws of every state give guidelines for the expulsion of a member. We have referenced Section 35 of the Maharashtra Cooperative Societies Act 1960. Other state provisions also provide similar guidelines.
The member has to be given a show-cause notice 30 days prior to passing a resolution to expel him.

The agenda for the member’s expulsion has to be included in the general body meeting. In the said meeting, a resolution to expel the member in question is to be passed by no less than a three-fourth majority of the members who are entitled to vote and who are present at the general meeting.

Before passing the resolution, the member must be given an opportunity to be heard and should be able to present his case to the general body. He can also choose to represent his case in a written format or take help of other members who may be willing to support his case. The proceedings of the meeting have to be presented to the Registrar of Co-operative Societies who will either approve or disapprove the resolution (within 180 days) after hearing both the parties and their presentation of the case. Such precautions are taken to make the expulsion procedure fair and transparent so that no one party can take advantage of any loopholes. Only after the Registrar approves the resolution, it is considered valid.

The society cannot consider other prejudicial or discriminatory reasons to expel the member such as racial, gender or caste distinctions. If the member has evidence that the society is expelling him under false pretexts or personal prejudices, he has the right to approach the court and fight for his own cause. But this will eventually take a toll on both parties. The Registrar examines every aspect of the case, so the society is not allowed to modify its bye-laws to defend the grounds under which it hopes to expel the member.

What happens after the resolution to expel the member is passed?

On the date that the Registrar approves the resolution, the member ceases to be the member of the society legally. The forfeiture of shares also takes place simultaneously if the society decides the member should give up the right to hold shares to the society as well.

The expelled member is not allowed to occupy the residence after the resolution is passed. He is expected to handover the vacant possession of the flat/house to the Secretary of the Society in a peaceful and conflict-free manner at the time and date that the society considers appropriate for the member.

If the member refuses to vacate the residence, the Society has the right to send him a legal eviction notice.

If the society has decided to simply expel the member and not forfeit his shares, the interest in the capital/property of the member in question and its value is acquired by the society and the same is to be paid to the member in three months after he hands over the possession of the residence or his eviction.

Are expelled members allowed readmittance to the society?

An expelled member is not allowed to return back to the co-operative until after one year has passed since his expulsion, except if the General Body of the society recommends such readmittance under any special circumstances that call for early reentry, but that too has to be approved by the Registrar of Co-operative Societies.

Usually, if the member is at fault and has been a repeat offender, a peaceful dialogue or even a moderated confrontation is helpful in solving the problem. If however, the society believes that it has done everything within its power to make the member compliant, and yet there exists a clear and present danger from the member to the society, it should follow the expulsion procedure exactly as per the law and resolve the matter with help from the Registering Authority and not take any illegal actions on its own.

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