Yes it the share per membership. Yes share certificate is valid. Your membership will be valid but the person issued you the invalid share certificate can be tried for the same in court
Formation of society
Upon agreement being signed and total cost of flat is paid to builder, even before the process is complete, i.e. before building permissions are obtained, before construction begins, and before registration of society is done with the Registrar. Builders collect the share money in advance and issue share certificates, The process of formation of a society begins only after it is authorised to collect the share capital by the Registrar. This share capital is approved by him as per details furnished in the form 'A' and he seals and signs the Form "A". A share certificate is then issued by the society to every member for the shares prescribed by him, but within a period of six months of the allotment of the shares. What is the legality of shares issued prior to registration of society as shown above? Can this be done? Can the share certificate so issued be valid? If such discrepancy is noticed years after the society operates. What happens to the membership when the share certificate itself is invalid?
Asked 6 years ago in Property Law
Religion: Hindu
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10 Answers
Shares cannot be issued before the formation and authorisation of the socitey, if it is done same is not valid. See since the member paid the amount and this is illegality on part of builder member can take step against builder and society can issue fresh certificate.
Share certificate can be issued by society only after registration of society
2) it bears signature of office bearers of society
3) issue of share certificate before formation of society would be illegal as no such society was in existence on said date
If society is not in place the share certificates being issued would be of no use
The share certificates find force from a registered society
You need to decide
You are on one hand challenging the very constitution of society and on other hand you make application to the same society for membership
You need to restrict your challenge to one thing
If as per your belief the society is wrongly constituted then how can you apply for membership to society?
Nevertheless you need to follow the appeal procedure before approaching HC in a writ petition
1. Logically, Share Certificate can be issued ONLY after "registration number" of Society is obtained and such registration no. has to be reflected on the Share Certificate. Presently "IF" the Society is registered, THEN via a proper Notice-Agenda-Resolution of the General Body, it can be decided to nullify such illegal Share Certificate and then further issue proper new share certificate with society seal & registration no.
2. Issuance of Share Certificate before registration of Society is a Criminal offence of cheating, intimidation, fraud, breach of trust etc.... for which you can file a Police FIR, requesting investigation and charge-sheet, against the person, supported with all relevant supporting documents.
3. IF the Police does not take action, THEN you can file private criminal case u/s 156(3) Cr.P.C., in the local Magistrates court, seeking directions to the Police to investigate and file charge sheet.
4. No Flat owner can claim membership, based on such false Share Certificate and all such membership claims would be false and misrepresentation for futuristic purposes of Sale /Gift /Mortgage /whatever ....
1. IRRESPECTIVE of any criteria (refusal by any authorities), you derive irrefutable rights to file private criminal complaint before the local magistrates court u/s 156(3) Cr.P.C., seeking directions to the Police to investigate and file charge sheet.
2. The complaint must be filed by exhibiting proper documentary evidences (which you have).
Ownership of flat trasfer through registered sale deed and certificate issued by builder is valid but now should be replace with society certificate or society issue subsequent certificate.
Membership is intact if you are paying maintenance charges / common area and adhering to society bye laws.
society issue share certificate to owners of the flats not by builder and before formation of society issuing share certificate is illegal.
Share certificate issued to the member (that is, when new society is registered, and each premises of the society's building is issued the share certificate) for the first time, share certificate is freshly issued.
- Share Certificate is one of the most important documents issued to the members of the Co-operative housing society
- As per Model Bye-laws# 9(a): A Share Certificate, prescribed in bye-laws, bearing distinctive number and indicating the name of the Member, the number of shares issued and the value paid there on, shall be issued by the Society to every Member for the shares subscribed by him, within a period of six months of the allotment of the shares.
- In Maharashtra, societies are governed by Maharashtra Cooperative Societies Act. This Act provides the rules and regulations governing Cooperative Housing Societies also.
- Total Authorized Share Capital of a Co operative Society is fixed by Registrar of Co op Societies at the time of registering the Society.
A share certificate issued by the builder towards the unregistered or unformed society is not valid in the eyes of law.
- As per the information mentioned in the present query, makes it clear that the share certificate has been allotted before the formation of the society.
- It is the society that should be in existence first before allotting share certificate to any member.
- If the same has been encountered after few years then also it would be in valid, but any action taken by the society may be put to invalid, but not the formation or share certificate.
- Society can passed resolution by way of an affidavit with the consent of all the members to declare the share certificate as valid.
Dear
- The share certificate issued by builder prior to formation of society is illegal. And it cannot be done by builder.
- The share certificate issued by builder is Invalid.
- These share certificate issued by builder in Invalid but it doesn't affect your membership
- The society can issue new certificates after the formation to every member.
