Bond by MC members of Co-operative Housing Society Ltd.

I am thankful to Mr.Vasudevan and Mr. Aggarwal for their lively response to my query on bonds to be executed by Managing Committee members. Apart from our own Society I enquired with a few other Societies in the neighborhood. None of them have executed the bond.

Even before the amendments to the Act and the Rules there was a byelaw containing exactly the wordings of the now introduced bond. At that time I remember to have read the opinion of some lawyers that the byelaw will not stand scrutiny in a court of law.

Most Societies experience difficulty in getting volunteers from among members to serve on the Managing Committee. In our own Society we have to go after the unwilling members and beg them to join the Committee. Now if they come to know that bonds have to be executed no one will come forward to join the Committee. The result will be anarchy and errant members will be free to do whatever they would like to do.

There is a difference between co-operative housing societies and other co-operative bodies. For instance a Co-operative Bank or a Co-operative Store gives service not only its own members, but to outsiders also. On the other hand a Co-operative Housing Society is a closed society serving only its own members. The society operates on the principle of mutuality. Subscripttions are collected from the members in order to defray expenses on behalf of the members. Hence a housing society cannot be grouped along with other type co-operative bodies.

The Managing Committee members in a co-operative housing society are honorary workers who serve the society without any remuneration. They have other full time jobs to earn their lively hood. In between they spare their valuable time for Society work. In other words they give free service. They cannot fix salaries for themselves unlike our MPs.

It is the principle of natural justice that no compensation can be claimed for any defect in anything obtained free. Under the Consumer Protection Act, 1986, the Fora will not entertain complaint against any goods or services obtained free of cost. It is so in many other laws too.

As such in my opinion the law requiring Managing Committee members to execute bonds is against the principle of natural justice.

I would like to know the views of the learned members of the Forum and also whether there is any court decision in this regard.