Manufactured Delays, Resignations Don't Protect 'Guilty' Ex-Committee Members
The law ultimately catches up with errant Managing Committee members of Housing Societies, writes Gajanan Khergamker
In an exposé of a glaring anomaly within Cooperative Housing Societies across Mumbai, the Navghar Police in Mumbai’s Mulund East have filed a First Information Report (FIR) against ex-Managing Committee members of the Sachin Cooperative Housing Society, charging seven individuals holding positions of society Secretary, Chairman, Treasurer and Committee members with improperly utilising society funds.
The FIR has been invoked under pertinent sections of the Indian Penal Code related to cheating, alongside the Maharashtra Co-operative Societies Act.
The Navghar police initiated the FIR on 7 Dec 2023 after a Chartered Accountant, appointed for the statutory audit of Sachin CHS’s finances for 2016-2017 and 2017-2018, submitted a complaint.
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| The law ultimately catches up with errant Managing Committee members of Housing Societies |
The appointment had been sanctioned in a Jun 2018 order by the District Deputy Registrar, Co-operative Societies for Eastern Suburbs, specifying the audit for the mentioned years. The complainant asserted that only the 2017-2018 period was audited.
According to the complaint, the seven individuals implicated in the FIR held key positions such as Secretary, Chairman, Treasurer and Committee members from Apr 1, 2017, to Oct 22, 2017. The complainant's audit uncovered that between 06/04/2017 and 12/11/2017, a total of Rs 5.62 lakh was withdrawn, with Rs 4.16 lakh allegedly utilised for various society-related purposes.
Notably, Rs 32,906 was spent through 17 vouchers, which were reported missing, lacking details on expenditure.
Despite inquiries made to the previous Managing Committee and the current Committee's Secretary, the complainant received no satisfactory information.
It was also disclosed that of the Rs 5.62 lakh withdrawn, Rs 1.66 lakh was issued through vouchers to an individual named Rajanna.
The complaint emphasised a violation of the Maharashtra Co-operative Societies Act 1960, stipulating that withdrawals exceeding Rs 1,500 should be made through bank cheques.
However, the Managing Committee allegedly withdrew the amount in cash, raising concerns about financial mismanagement.
The complainant, acting on instructions from the District Deputy Registrar Cooperative Society, lodged a complaint with the local police station. Subsequently, an FIR was registered in response to the misuse of organisation funds.
Senior Inspector Dattaram Girap of the Navghar police station stated, "The matter is in the initial stage and an FIR has been filed. We are investigating the issue.”
Society Member and retired Indian Navy Commander Sadanand Manekar said, "the Empanelled Auditor Anand Mhole appointed by DDR (2) Kokan Bhavan sought permission to file an FIR against seven individuals vide his letter dated 25 Sep 2018 to Dy Registrar Co-operative Societies T-Ward and the Dy Registrar gave permission to Mr Mhole vide a letter dated 17 Jan 2019, yet no FIR was filed.
“I received a copy of the Deputy Registrar's letter dated 17 Jan 2019 under RTI in July 2021 and despite repeated reminders could not get the FIR filed," he said.
Cdr Sadanand Manekar filed a Writ Petition in the Bombay High Court in early 2022 which "fructified the following year and, through an order passed on 3 Nov 2023" that read, ‘issue involved is extremely serious as Prima Facie it is seen that there is misappropriation of an amount of Rs 23.55 lakh by the erstwhile secretary,’ got an FIR filed on 7 Dec 2023.
Accordingly, the Writ Petition was disposed of on 8 Dec 2023 on submission of FIR copy by the AGP.
The Bombay High Court order and the ensuing action of filing the FIR against the past Managing Committee members by the Navghar Police charging seven who had held positions of society Secretary, Chairman, Treasurer and Committee members for acts improperly utilising society funds has far-reaching repercussions and has the potential of being used as a precedent in law.
Most Managing Committee members in Cooperative Housing Societies across Mumbai feel they are above the law and choose to interpret it to their own convenience by extracting funds beyond legal limits laid down by law and the MCS Act, all under the guise of performing 'thankless' tasks as 'honorary' postholders.
Most felonies include charging members beyond Non-Occupancy Charges, collecting funds to initiate Transfers, failure to address Leakage issues, charging exorbitantly for ‘Repairs’ and others.
Any anomaly apprehended, however delayed, even five years later as in the case of Sachin Cooperative Housing Society, will have to ultimately face the force of the law.
Those committing offences directly as Chairman, Treasurer, Secretary and Committee members are often strongly backed by other members providing explicit or implicit support for the ‘illegal’ acts.
The recent FIR initiated by the Bombay High Court 3 Nov 2023 order maintains that all guilty will ultimately be booked by the law which takes its own course.
Committee members even other than the Chairman, Secretary and Treasurer, are jointly and equally liable for acts undertaken during their tenure.
And, most importantly, resignations from posts do not absolve office-holders of acts undertaken during their tenure.
So, while most Managing Committee members including the Chairman, Treasurer, Secretary even the entire Committee, complicit with the acts of the key few, may resign, they will be held accountable by the law, even years later.
(For more on CHS issues and the law visit www.tinyurl.com/chs-legally-speaking)
Similar Acts Of Cheating, Extortion By Managing Committee Members
* In early 2023, Nhava Sheva police searched for the absconding Secretary of a housing society in Ulwe after registering an FIR against him for allegedly embezzling Rs 18.77 lakh from the society’s bank accounts during covid from 2020-2022. The accused Secretary had allegedly withdrawn money by using bearer cheques by claiming that the payment was done for buying furniture, stationary, generator diesel and carrying out plumbing, electrical and civil works at the society’s office, however, no such work was carried out.
* In 2018, following the complaint from a member of the Clover Highland Cooperative Housing Society in Pune, the police filed an FIR against 10 members of Managing Committee for cheating, impersonation and forgery. According to the complaint filed by society member, the Managing Committee had illegally elected the Chairman and conducted society affairs illegally, thus cheating the members.
A former Secretary had earlier approached the court, which directed the police to file a complaint. Following an order dated September 4, 2018, by the court of Judicial Magistrate First Class, an FIR under Sections 420, 468 and 34 was filed in Kondhwa police station against the Managing Committee members of Clover Highland Co-operative Housing Society.
* Five office-bearers of a housing society in Mumbai’s Bandra (West) have been booked in 2023 under extortion charges after they allegedly made a new flat-buyer pay for painting the entire building in exchange for issuing a no-objection certificate (NOC). According to the FIR, the Society Committee members allegedly told the buyer and the selling flat-owner that they would issue the NOC and the flat’s share certificate but in exchange, the buyer had to give the paint needed to paint the building.
