JOIN USHopes of a large number of people to own sites through house building cooperative societies (HBCS) in the State may be dashed with a new directive that restricts their associate members to 15 per cent each.
The new order was issued by the State registrar of cooperative societies. The cooperation department on September 6, 2014, issued a notification amending the Karnataka Co-operatives Act, 1959. The amendment has imposed 15 per cent ceiling on associate members in all cooperative societies, including HBCS.
The amendment gives societies six months from the date of the commencement of the amendments to remove their associate members if they are in excess of 15 per cent. This means a large number of people who are associate members will lose their membership.
Registrar for Co-operative Societies N S Channappa Gowda said the prime reason for introducing the cap on associate members is to curb the indiscriminate sale of sites to outsiders by HBCS.
“We brought in this amendment to ensure that influential associate members do not reap the benefits of the HBCS, while original members are still waiting for their chance to own a site,” he said.
The amendment to Section 18 in sub-section (1) of the Act says: “Provided that the number of associate members under clause (a) in any co-operative society shall not exceed 15 per cent of the total membership of the society.
However, in case of cooperative societies already having more than 15 per cent of their total membership as associate members, the excess associate members shall be either made as member, if eligible under the Section 16 or shall be removed from the associate membership within six months from the date of commencement of the Karnataka Co-operative Societies (Amendment) Act, 2014.”
The Section 16 of the Act provides broad guidelines for memberships to cooperative societies in the State.
The clause also has to be read in accordance with the provisions of Section 6 of the Act, which defines who can form a society. Further elaboration on who can be a member of a society was provided by the Karnataka High Court in 1991 and later upheld by the Supreme Court in 1995.
In Narayan Reddy vs State of Karnataka case, the High Court suggested that in case of HBCS, the membership should be confined only to the employees who may continue as members even after retirement and the societies should be prohibited from enrolling outsiders as members.
However, in Karnataka, several HBCS flouted these norms and admitted thousands of associate members and made them beneficiaries to the site allotment. For instance, in the Karnataka Telecom Department Employees HBCS there are only 282 registered members but a whopping 18,581 associate members.
There are 4,500 permanent members and 10,168 associate members in the Telecom Department Employees HBCS. Many associate members have been allotted sites and are residing on their purchased properties.