Legality of redevelopement agreement
SIR, OUR SOCIETY HAS STARTED REDEVELOPMENT WORK FROM APRIL 2013 THE TERM OF MANAGING COMMITTEE HAD EXPIRED IN AUG 2014. THE 79 A PROCESS WAS COMPLETED BY DY REGISTRAR IN OCT 2014. THE MATTER WAS POINTED OUT TO REGISTRAR AND I WAS TOLD ORALLY THAT THEY WERE GIVEN EXTENSION TILL DEC 2014 THE MANAGING COMMITTEE CALLED SPECIAL GENERAL BODY MEETING FOR APPROVAL OF DEVELOPMENT AGREEMENT ON 21 DEC 2014. AND GOT IT PASSED . THE MANAGING COMMITTEE GOT IT REGISTERED IN MAY 2015 . AND WHEN WE GOT COPY OF DEVELOPMENT AGREEMENT I FOUND THAT THE CONSTITUTION OF DEVELOPER HAS BEEN CHANGED FROM PVT LTD TO LLP. THE FACT WAS NOT MENTIONED TO MEMBERS IN DEC 2014 MEETING EVEN THOUGH THE CONSTITUTION WAS CHANGED IN NOV 2014. THE MC CALLED SGBM AND GOT IT APPROVED BY MEMBERS.SUPPLEMENTARY DEVELOPMENT AGREEMENT/POWER OF ATTORNEY ETC. WAS EXECUTED IN FEB 2016. AFTER COMPLETING ALL THE FORMALITIES THEY HELD ELECTIONS IN MARCH 2016. SECRETLY AND GOT THEMSELVES ELECTED. ARE THE ACTS OF MANAGING COMMITTEE LEGALLY VALID, IS THE DEVELOPMENT AGREEMENT VALID AS ALL THESE ARE EXECUTED WHEN THEIR TERM HAS EXPIRED. OUT OF 120 MEMBERS 119 MEMBERS HAVE NO OBJECTIONS TO THESE. IS THE REDEVELOPMENT AGREEMENT LEGALLY ENFORCEABLE. PLEASE ADVICE. REGARDS
Please consult an advocate with all the relevant documents. It needs to be seen whether the MC was given extension by the Dy. Registrar after eh expiry of term, whether the general body meetings and managing committee meetings were held as per law and also whether the elections were conducted as per law
Hi, thank you for writing to us. Here's our response.
First of all, I would like to know whether the Society registered is what kind of cooperative society as you mentioned about the redevelopment work. Further, you have not mentioned where your society has been registered since it is essential to figure out the result of such activities performed by the Managing Committee as bye laws (societies are separately registered with bye laws for internal management of the society which is approved by the Registrar) are considered to be looked upon for the General body and Board meetings. As different Cooperative Societies are formed in different states such as Delhi Cooperative Societies, 1972, Kerala Cooperative Societies, Karnataka Cooperative Societies, 1959, Maharashtra Cooperative Societies Act, 1960, etc. If the state do not have a Cooperative Societies Act then the registered cooperative society is governed by the Co-operative Act, 1912. And, if the cooperative society is functional in more than one state, it is governed by the Multi-State Co-operative Societies Act, 2002.
Now, about the conversion of the constitution of developer from private limited to the limited liability partnership, requires that the notice must be furnished to its members, creditors or any other person who will likely to be affected by such conversion. It varies from place to place according to the bye laws. For example , Maharashtra Co-operative Societies Act, 1960 says that the conversion of society, after the resolution has been passed, the notice to be furnished to the members and the persons likely to be affected and one month time is given to the them whether they want to join the new converted entity.
Moving to the question of validity of the election of the managing committee done secretly, we still have to see the bye laws as there is prescribed method and the time given to the hold the election of the managing committee. Although, even after the relapse of time, they can ask for the extension from the Registrar to hold their elections by providing reason for such delay. In A. Sundara Rajan v The Registrar Cooperative Societies & others where the election of one-third members of the managing committee was not in consonance with the Delhi Cooperative Societies Act, 1972 and the bye laws thus, the Court directed that the election of the managing committee must be held.
Similarly, it is required to see if the election of the Managing Committee is whether in consonance with the bye laws and also, the Cooperative Societies Act of the concerned state. Until it is hard for us to determine that the acts performed by the members of the managing committee is valid or invalid.
We hope you bring your further doubts relating to this query. Thank you.
Though the managing committee has registered the development agreement after expiration of their terms, in May 2015, the said Development Agreement got approval from your society in December 2014. It means it is just irregularity, which can be regularised. As you further informed if 119 members have no-objection for this it can get regularise. You have not informed whether you have constituted separate committee for redevelopment work, if it is the case and the said members have signed and executed the development agreeement then regularisation not required, This agreement is valid. Further, if your development agreement include clause of involvement of sister concern or any other partnership firm of the developer at the time of development, the developer can present himself as LLP, that does not matter. For this study of all relevant papers is required.
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