A question which regularly comes up in a cooperative society:

  • Who can become member of the society ?
  • Who can become a committee member ?
  • Who can become Chairman / Secretary / Treasurer ?

Further complexity is added to this by questions like whether NRI, PIO or OCI card holder become a member, committee member and Chairman / Secretary / Treasurer of a society. In this article we will try to answer these questions.

Answer: NRI, PIO or OCI card holder can become a member, committee member and also hold post of Chairman / Secretary / Treasurer in a society.

To understand this, it has been further broken down into 6 parts :-

Part 1: Purchase of Property by NRI / PIO / OCI Card holders

RBI Master Direction – Acquisition and Transfer of Immovable Property under Foreign Exchange Management Act, 1999, defines who is a NRI/PIO/OCI card holders and also further defines which immovable property they can acquire.

Definition

  • Non-Resident Indian (NRI) is a person resident outside India who is a citizen of India.
  • Overseas Citizen of India (OCI) is a person resident outside India who is registered as an Overseas Citizen of India Cardholder under Section 7(A) of the Citizenship Act, 1955.

Acquisition of immovable property

  1. An NRI or an OCI can acquire by way of purchase any immovable property (other than agricultural land/ plantation property/ farm house) in India.
  2. An NRI or an OCI can acquire by way of gift any immovable property (other than agricultural land/ plantation property/ farm house) in India from person resident in India or from an NRI or an OCI who in any case is a relative as defined in section 2(77) of the Companies Act, 2013.
  3. An NRI or an OCI can acquire any immovable property in India by way of inheritance from a person resident outside India who had acquired the property in accordance with the provisions of the foreign exchange law in force at the time of acquisition.
  4. An NRI or an OCI can acquire any immovable property in India by way of inheritance from a person resident in India

Part 2: Membership of a Cooperative Society

Section 22 of Gujarat Cooperative Society Act defines who can be a member of a Society.

“An Individual, who is competent to contract under the Indian Contract Act, 1872”.

Part 3: Indian Contact Act, 1872

As per Indian Contract Act, 1872 Sec 11.

“Who are competent to contract — Every person is competent to contract who is of the age of majority according to the law to which he is subject, and who is of sound mind and is not disqualified from contracting by any law to which he is subject”.

Part 4: Who can become a member of Society as per Byelaws

Model byelaws which is used by most of the cooperative society defines who can be a member of the society :

  1. Any person holding a flat/unit/office/shop/plot in the work area of the society, is eligible to become a member of the society.
  2. A person who has given an written undertaking to follow all the rules and byelaws of the society.
  3. A person who has given written application in Annexure ‘B’ of the membership and is approved by the managing committee.
  4. A person who has paid an entrance fee of Rs. 5..
  5. A person who has subscribed for atleast 5 shares and made the payment towards the share money.

Part 5: Who is eligible to Vote and become Committee Member

All members whose name appear in the voters list published on 31 March of every year on society’s notice board are eligible to vote and to file nomination for becoming a committee member.

Gujarat Cooperative Society Rules 32 : “Every member of a society who is entitled to vote shall be eligible for appointment as a member of a committee”

Part 6: Who is Eligible to become Chairman / Secretary / Treasurer

All committee members are eligible to hold position of Chairman / Secretary / Treasurer. It is either mutually decided or voted between committee members.

Conclusion

An NRI can buy property as per FEMA. Residential and commercial building either new or old are managed under different type of formation by builder and lately they are formed as Cooperative Society. As seen in each parts above, there is nothing in Cooperative Societies Act or Byelaws which stops an NRI/PIO/OCI card holder to either become committee member or hold position of Chairman / Secretary / Treasurer.

Reference

  1. RBI Master Direction: Master Direction – Acquisition and Transfer of Immovable Property under Foreign Exchange Management Act, 1999 (Updated as on April 11, 2018)
  2. Gujarat Co operative Societies Act, 1961
  3. Indian Contract Act, 1872

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