It has to take permission of SGM in the same. They can't take such a important decision without taking consent in SGM
Provisional Managing Committee taking decision to spend Rs 30 L PM without calling a General Body
The residential complex, Adani western Heights got its OC in December 2018. A provisional managing committee (PMC) was elected in August, 2019 for a period of 1 year. My question 1 is: The builder had an ongoing maintenance/housekeeping contract with a Contractor 'A' during his tenure, which was due to expire in February, 2020 for which the society was paying approximately Rs 48 Lacs PM. The PMC took a decision to remove the Contractor 'A' and give the contract to a contractor 'B' at a recurring expenditure of Rs. 30 Lacs PM without calling for an SGM. The PMC simply emailed their decision to the members with some rationale stating that the new contract would save the society about Rs 18 Lacs PM, but with about 40 less manpower deployed by contractor ‘B' as compared to contractor 'A'. When questioned why the PMC didn't call an SGM to discuss their plan and tenders to change the contractor 'A’, they (the PMC) simply state that the bye-law rule 157 is for one-time repair and expenditure, but the decision to spend Rs 30 Lacs PM by the PMC was a routine, recurring expenditure which is not covered by rule 157. Hence, they are not bound to call the SGM. The question I have is; was the PMC authorized to take this mammoth decision of Rs 30 Lacs PM, which has massive financial & administrative consequences for the residents, without referring to the SGM? My 2nd question is: The SGM also took another decision to award a recurring contract of about Rs 1 Lac PM to an IT vendor for offering app-based society automation services. Was the PMC authorized to take this decision of Rs 1Lac PM which has financial & security consequences for the residents? The 3rd question is: The builder had let out some common areas for a salon and a Juice Bar during his tenure. The PMC during its short tenure changed the contracts without calling the SGM. Was the PMC authorized to do so without calling a SGM?
Asked 4 years ago in Property Law
Religion: Hindu
23 Answers
1) PMC cannot spend Rs 30 lakhs without SGM approval
2) PMC could not have incurred recurring expense of Rs 1 lakh without SGM approval
3) common area cannot be used for salon and juice bar
None of the decisions of the PMC could have been taken by it without convening a SGM and without a valid resolution being passed in the said meeting
Without a resolution being passed with concurrence of majority members entitled to vote in a general body meeting, the PMC has no authority to take unilateral decisions
It is all about the power and authority given to the PMC in general meeting. PMC should act in direction of decision approved in any general meeting or special general meeting.
You can ask for documents given such direction to the committee. You can also raise your concern to committee members and call for special general meeting with requisition of at least two thirds member.
In extreme case of irregularities and financial misuse, you can lodge a complain to the registrar of the societies or the competent authorities under the act for removal of broad members. Even you can seek injunction from court restraining the broad members from further functioning till new board formed.
1. PMC lacks the authority to take major decisions including spending Rs 30 lakhs without taking approval of SGM.
2. The common area cannot be put to use for salon and juice bar unless there is a consensus among all members.
Hi
1. It is important to call the SGM for taking ANY decision related to society. Complaint to the registrar cooperative society can be made.
2. Yes PMC is authorized to take decision as this was the only purpose this committee was formed.
3. SGM is to be called for every decision, small or big.
Move to the Registrar office for complaint.
Thanks
How can this be a recurring decision. Tender to contractor B not given for a month but for some long time. And 30 lacs per month expanses cannot be construed as a routine affair. SGM must have called.
And such contract without inviting bids itself suggest biased decision to benefits known.
Every financial decisions must pass by resolution in a meeting.
PMC is violating provisions society act and transparency norms. Liable to be dissolve.
Refer to the question 3 about the PMC letting out the 'common areas'. These so called common areas are not inside any corridors or lobby. The common area refers to a certain pre-designated areas alongside the gym, which were earmarked by the builder for the purpose of a Juice Bar and Salon. These were also marketed by the builder when the property was sold. The builder had let out these areas during his tenure to external parties who were running the juice bar and Salon for the residents of the building. The PMC during its short tenure changed the parties for running the juice bar and salon and let out these areas on rent with new contracts without calling the SGM. Was the PMC authorized to do so without calling a SGM?
Asked 4 years ago
Common area cannot be put to use or rent for exclusive use. Such/all decision must pass in SGM and after calling objections. Already informed you, PMC is lacking fairness.
PMC can let out common area on rent with new contracts without calling for SGM
It's already answered above
PMC is not authorized to change the licensees of builder (who would be attorned to society upon conveyance) without calling a SGM and a resolution being passed to that effect
You must go through the resolutions passed in general meeting and check the nature and scope of activities that has been authorised to be carried out by the committee. If any activity does not fall within the approved scope, that will illegal and you can take all necessary action against the committee as mentioned in my early reply.
By reading the answers of the 7 distinguished advocates above, it appears that the PMC of Western Heights should have called a General Body meeting and sought its authorization before taking decision of allotting (1) an approx. Rs 30 Lac PM housekeeping contract (2) an approx. Rs 1 Lac PM app-based digital service having security consequences for residents and (3) rental contracts of salon and Juice bar, all with far reaching financial, administrative and security consequences for residents. My question is what is the remedy since its a fait accompli situation in front of the residents. It being a society of 400+ high end houses, any non-compliance when a full-tenured Managing Committee takes-over after this PMC relinquishes its 11 month charge in July/August, 2020 can cause extremely difficult situation for the residents. Therefore, what is the remedy and its consequences so that the residents don't suffer now because of the suggested remedy or in future if such so-called non-con compliance continues
Asked 4 years ago
File case in cooperative court to set aside resolution passed by PMC awarding the contracts mentioned herein above
A dispute case can be filed by the aggrieved members u/a 91 of Maharashtra co-operative societies Act with the Co-operative Court
The members can also call for a meeting and resolve to terminate the PMC and further resolve to form a proper MC and thereby overturn the decisions of the PMC
For all the three questions, the answer is that since these constitute the routine issues alone, the decision of PMC is neither illegal/unlawful nor it is adverse to welfare of the members.
Moreover since PMC is temporary body, the decision by them is not permanent, hence the elected body taking over next can change it in future.
The PMC can act in the interest and welfare of the members of society.
Hence if PMC justifies the same in this manner then the action taken by them may be considered as an illegal act.
The current decision of PMC is not permanent and it can be changed by the new body to be elected shortly, hence any action proposed to be initiated by you or anyone in this regard may not be very effective, however this will prevent you from protesting against their acts in the general body meeting.
Complain to registration for prevailing mismanagement and unfairness in committee or stay from court.
You need to immediately take action by complaining to registrar, consumer court or co-operative court and take interim order to stop them to do so
Continuing on the same subject and referring to the residential complex, Adani Western Heights which got its OC in December 2018, a provisional managing committee (PMC) of 14 members was elected in August, 2019 for a period of 1 year. I have a few more queries. I have mentioned above that the Provisional managing committee took a decision to award a facilities management contract to a party at a monthly expense of about Rs. 30 Lacs PM without calling a General Body meeting, for which all distinguished advocates have already opined above that the PMC should have called an SGM and taken its approval. My question now is; when we read the minutes of the meeting of the PMC where the quotations of various vendors were placed, and selection criteria decided, this particular meeting had 7 attendees, that is, 1 less than the quorum. Apart from the fact that the PMC should have taken approval from an SGM, is the meeting without a quorum a valid meeting? 2) We also noticed with respect to this meeting, the PMC had at one of the places of the printed minutes hand-deleted the sentence where it had initially permitted absenteeism to a member. This hand-deletion was also not initialed by the secretary who had signed the minutes. My question is: are hand-deletions in minutes permissible without an initial at the particular spot where the change is made on the printed minutes? 3) The PMC also took another decision to award a recurring contract of about Rs 1 Lac PM to an IT vendor for offering an app-based society automation services which has financial and security consequences for the residents. The PMC noted in its minutes that it would put up the decision for the approval of an SGM, however, the PMC went ahead with the appointment without calling an SGM. How proper is this act of the PMC? 4) My next question is none of the 10 odd meetings was signed by the Chairman; they were all signed by the secretary even though the Chairman was present in almost all the meetings?
Asked 4 years ago
Hand deletion should be initialled by secretary or chairman of society
2) for meeting to be valid there should be proper quorum
3) decision should have been ratified by SGM regarding awarding of recurring contract
4) minutes have to be signed by chairman and secretary
1. The meeting without proper quorum cannot take a decision about the agenda to be discussed and a decision to be taken on the proposed agenda, any such decision taken without required quorum shall be invalid and not enforceable.
2. This is an irregularity
3. Even the decision without the approval of SGM is not proper, valid and cannot be enforced especially if the same is disputed by any member before the registrar or the court of law.
4. The chairman and the secretary including the treasurer has to sign the minutes book after the conclusion of the meeting.
1. Quorum is decided by presence of minium number I'd members in a meeting who are entitled to vote. It's not 51% of all members. All members may not attend the meeting
2. Deletion has to be initialed. However what was deleted was a clause which restricted absenteeism. Such a clause itself is voidable. Members cannot be forced to attend meetings. So deletion is inconsequential. How it helps you?
3. Without SGM and any agenda in the notice, any business transaction is not legal
4. Secretary is a member of MC. Chairman doesn't have to sign necessarily
I would suggest try focusing on the larger issues. Hair splitting technicality and minute dissection are not considered by the Court. Those are taken as signs of disgruntled members. Catch the big fish and the small ones will automatically dive in. Hope you got the point!
Invalid resolution.
Minutes are manipulated and lack authenticity.
Absolutely illegal.
Complain to registrar to dissolve committee and take charge of society till next decision.
The all dealing is illegal. Approach high court under writ petition as soon as possible