Laws pertaining to AGM of housing societies, in Maharashtra

[ecis2016.org] The bye-laws in Maharashtra prescribe rules for the deadline for holding AGMs, the quorum for such meetings and the business that can be transacted, as well as penalties for members who fail to attend

Every housing society has to adopt bye-laws, for its management and administration. The government of Maharashtra has provided model bye-laws, which can be adopted with or without changes by societies. These bye-laws also cover the rules pertaining to annual general body meetings of the societies.

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AGM can be held till March 2022

Housing societies in Maharashtra can now hold their AGM till March 2022. Also, there is an extension in the deadline for the managing committee to transact budget and appoint an auditor for the next fiscal year, while taking a decision on the budgeted balance left in the audited accounts.

The state cooperatives commissioner had recommended this extension because only 20% of the societies had their audits and budgets ready, owing to the restrictions placed till August 31,2021, because of the COVID-19 pandemic. Additionally, housing societies can hold elections within six months from September 2021 –  i.e., till March 15, 2022.

[ecis2016.org] Maharashtra housing society bye-laws

Time limit for holding the AGM and minimum notice period

As per the model bye-laws for cooperative housing societies in Maharashtra, every housing society has to hold an annual general meeting (AGM) of the society, every year, before 30th September. It is the responsibility of the committee of the housing society, to ensure that the AGM is held within the prescribed period. The notice for convening the AGM, has to be signed by the secretary of the society. The AGM of the society cannot be convened unless a notice of 14 days is given to the members. While computing the 14 days, the date on which the notice is issued and the date of the meeting shall be excluded. Once an AGM is called, it cannot be treated as invalid, unless an order declaring the meeting as such is passed by the cooperative court.

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COVID-19 impact: AGM to go online

As an exception and in a much-needed relief to over 2 lakh cooperative bodies, including housing societies, in Maharashtra, the state cabinet chaired by chief minister Uddhav Thackeray had given its approval to extend the time for holding the AGM up to March 31, 2021. This came in the wake of the Coronavirus pandemic, which made it impossible to conduct the AGM by September 30, 2020. Now, the Maharashtra government in a revised notification, issued on March 23, 2021, has allowed all cooperative housing societies to conduct online AGMs till December 31, 2021. This is the second extension given by the state. The audit report can be finalised by the end of December, until further notice.

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Quorum for AGM

For conducting the business at the AGM, the law stipulates that a minimum number of members need to be present, called the ‘quorum’ of the meeting. A minimum of two-thirds of the total number of members, subject to a maximum of 20, should be present to constitute the quorum for the AGM. Consequently, small societies sometimes find it difficult to ensure the quorum. For big societies, even a small proportion of the total members may add up to 20 members being present in the meeting and constitute a quorum. In case the required quorum is not present within half an hour of the appointed time, the meeting shall be adjourned to a later hour on the same day or to a subsequent date which cannot be earlier than seven days and not later than 30 days from the original date of the AGM. At the adjourned meeting, there is no requirement to have a quorum. However, the mere attendance of one person at the adjourned meeting, shall still not constitute a meeting and therefore, a minimum of two members have to be present even at the adjourned meeting.

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Business to be transacted at the AGM

The main purpose of the AGM of a society, is to adopt and approve the annual accounts of the society by the members and to receive an annual report of the affairs of the society. The auditors of the society are also appointed at the AGM. In addition to the above business, the AGM can take up any other matter, even if the same is not included in the notice.

However, the members cannot take up any of the following business at the AGM, unless proper notice has been given:

1. Expulsion of members of the society
2. Amendment of the bye-laws of the society
3. Bifurcation, amalgamation, or division of the society
4. Transfer of property of the society

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If the business on the agenda of the general meeting of the society is only partly transacted, then, the meeting can be postponed to any other date decided by the members present in the meeting, which should not be later than 30 days from the original AGM.

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What happens if a member does not attend the AGM

In August 2021, the Maharashtra government removed the ‘inactive member’ provision in Section 26 of the Maharashtra Cooperative Societies Act, 1960, thus, allowing all eligible members of the society to cast their vote in society elections held on or before March 31, 2022, irrespective of them attending the general body meetings.

With this modification, the 2018 ruling that ‘inactive members’ cannot cast their votes or contest housing society elections does not hold true anymore. In 2018, the Maharashtra government had made an amendment to Section 26 of the Maharashtra Cooperative Societies Act, 1960, which stated that any member of the society who had not attended five successive general body meetings, would be termed an ‘inactive member’. As a result, he would lose his membership rights, including contesting elections and casting votes.

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Can a Nominee attend AGM?

A nominee cannot be allowed to attend the AGM of a housing society. He also cannot be allowed to propose any resolution or vote for any resolution in the society’s AGM.

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(The author is a tax and investment expert, with 35 years’ experience)

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