Ownership of property changes because of many reasons. Once property is acquired by New owner, it requires him to follow certain process through which he becomes a member of the Housing / Commercial Service Society. In this article, we have discussed about reasons of transfer, what does Byelaws, The Gujarat Cooperative Societies Act and Rules talk about transfer, which documents the New owner needs to submit to the society for transfer (with formats), what process the Service Society needs to follow along with Resolution format and Transfer Fee related Registrar Circular.

Byelaws Clause 4 – Membership

Any person:-

  1.  Any person who is owner of property in the Society as per Byelaws clause 1(2) will only be able to hold shares and can become member of the society;
  2.  Who is having ownership right in the flat in our scheme known as _______ situated block No: _____/paiki & ______ to _____ paiki land admeasuring __________ sq.mtrs.;
  3.  Who has paid an admission fees of ₹ 5/- ;
  4.  Who has paid value of minimum 5 shares of the society;
  5.  Who has provided the details required as per byelaws and, who has given an undertaking to act as per the rules framed under the byelaws of the society and rules framed under The Gujarat Cooperative Societies Act;
  6. Whose application, filed as per the prescribed Form A prepared by the Society, has been approved by the Managing Committee;
  7. Any person, firm, company, trust can become member if eligible as mentioned hereinabove and any of the representative of such firm, company, trust can become member of the society and has rights and duties of the member.

The Gujarat Cooperative Societies Act, 1961

Section 22: Person who may become member

22.2 Every person seeking admission as a member of a society, if duly qualified for membership of such society under the provisions of this Act, the rules and the bye-laws of the society, may make an application to the society for membership. The society shall take decision on the application and shall communicate the decision within a period of three months from the date of the receipt of the application.

22.2A Any person aggrieved by the decision of a society under Sub-Section (2), may prefer an appeal to the Registrar within 60 days of the date of communication of the decision and such appeal shall be decided by the Registrar within a period of 60 days.

Section 30: Restriction on Transfer of Share or Interest

30.2A member shall not transfer any share held by him, or his interest in the capital or property of any society, or any part thereof, unless,-

  • he has held such share or interest for not less than one year;
  • the transfer or charge is made to the society, or to a members of the society, or to a person whose application for membership has been accepted by the society ; and
  • the committee has approved such transfer.

The Gujarat Cooperative Societies Rules, 1965

12. Open Membership

12.2 No Cooperative Housing Society shall without sufficient cause, refuse admission to its membership to any person, duly qualified therefor under the provisions of the Act, and its bye-laws to whom an existing member of such society want to sell or transfer his plot of land or house and no such society shall without sufficient cause, refuse to give permission to any existing member thereof to sell or transfer his plot of land or house to another person who is duly qualified as aforesaid to become its member.

18. Procedue for Transfer of Share

  1. No Transfer of share shall be effective unless
    • It is made in accordance with the provisions of the bye-laws;
    • a clear fifteen days’ notice in writing is given to the society indicating therein the name of the proposed transferee, his consent, his application for membership, where necessary, and the value proposed to be paid by the transferee;
    • all liabilities of the transferor to the society are discharged; and
    • the transfer is registered in the books fo the society.
  2. Any charge in favour of the society on the share so transferred will continue unless discharged otherwise

Reasons for Transfer

  1. Sale of Property
  2. Transfer because of death of owner (inheritance)
  3. Change in Ownership because of Gift Deed (Example: transfer of property by parents to children, divorce case etc)

Document Formats from Members

  1. Member Request Letter for Transfer
  2. Application Form–A for becoming a member
  3. Nomination Form
  4. Sellers Request Format (Old Owner)
  5. ₹ 255 (Cash / Chq or NEFT) towards share purchase (₹ 50 * 5 Shares) + ₹ 5 Entry Fee
  6. Clear outsanding of the old owner, if any

Process to be followed by the Society

  1. Raised query if any in application after checking within 15 days of receipt of application.
  2. In case of query, give proper notice to member along with 15 Days time for rectification
  3. Once receipt of complete documentation, take the transfer request within 30 days in Committee meeting (within 90 days of application date) and record it in minutes of the meeting. (After all documents are received and funds cleared) Draft Resolution Format
  4. Share attested copy of the resolution with new owner / Member
  5. Updation of record in Transfer Register, Member Register, Share Register, Personal Share Account Register and Nomination Register.
  6. Prepare a seperate file for all the transfer documents received from the member.
  7. Create or Remove lien on Share Certificate.
  8. Update Lien Register.
  9. Handover the original Share Certificate after making entry on the backside of the certificate under appropriate columns and duly signed by the Chairman and Secretary of the society.
  10. Update the Accounting Data
    • Create new owners ledger.
    • Transfer the debit /credit balance to the new ledger from the old owners ledger.
  11. Issue receipts for the payments received.
  12. Issue NOC for name change in Gram Panchayat / Municipal Corporation.
  13. Issue Sticker / RFID Sticker for Vehicles.
  14. Provide Byelaws / Peta niyam copy to the new member.
  15. Provide Society Rules copy (if any like – Renovation rules, occupancy rules, pet rules etc.)
  16. Add the new member in WhatsApp groups, ERP, Security App, Automated Gate App, Parking App or any other such App used by the society. Also remove old owners details from all these Apps.
  17. Introduce New member to Committee members, Block Representative and share contact details.
  18. Show Flat Parking, Common Parking and Visitors Parking, if any.
  19. Share Electrical and Plumbing drawings of Flat / Shop layout.

Complain Against Society under Sec 24 (Not making Member)

If Socety does not approve membership with in 90 days or rejects application, new owner can file a case with Register under Section 24 of Gujarat Cooperative Society Act.

Documents along wtih complain

  1. Copy of application form filed with society
  2. If society has reverted back, copy of the letter
  3. Documents proving elegibility of becoming member as per Byelaws Clause 4 referred above (Index copy, Sale deed etc)
  4. Receipt copy of Share and Entry Fee Payment (Rs 255)

List in Gujarati

Transfer Fee

As per Registrar Circular dt 28-Apr-2016, Service Society cannot collect transfer fee, Development fee or any other fee under any other name.

If still society insists on collecting Transfer fee (under any name), a case can be filed with Registrar or Board of Nominee under Section 96 of The Gujarat Cooperative Societies Act, 1961.

Reference

  1. Registrar Circular dt 28-Apr-2016 on Transfer Fee
  2. Registrar Circular for Membership Process under Sec 160(1): dt 17-Nov-2008
  3. The Gujarat Co operative Societies Act, 1961
  4. Share Transfer on Death of Member Without Nomination
  5. Documents for filing complain under Sec 24 of Gujarat Cooperative Societies Act
  6. Sample Byelaws
  7. TOI: Green Orchid Housing Cooperative Service Society Ltd // Society’s 5L demand to grant membership junked: dt 25-Oct-2023
  8. TOI: Kamalnayan Bungalows (Service Society) // Rs 3L sought, transfer done in just Rs 505: dt 12-Feb-2020

Published by Sanjay Mandavia

Buyers Credit & Suppliers Credit Consultant // Cooperative Society Compliance, Taxation and Accounting

18 thoughts on “Transfer Process in Service Society”

  1. Dear Sir,

    The Model Bye-Laws of the Cooperative Housing Society was formulated by the Maharashtra Cooperation Department and is accessible via a Google search. But, I haven’t seen any Model Bylaws like that in Gujarat; each society has its own set of bylaws. If so, I’m curious as to where you found the Bylaws Clause that you mentioned in this article.

    Reply

    1. 1. Please refer to the link below from which you can get copy of Gujarat model byelaws. Issue is, it is not updated as frequently as done in Maharashtra. Also at the time of making an application, different consultants add or remove clauses. Thus there are few differences in byelaws of different societies. Last but not the least, cooperative is a State Subject as per constitution, thus each state has different laws and rules.

      https://rcs.gujarat.gov.in/publications.htm

      Click to access sample-byelaws.pdf

      2. For member it is important to refer byelaws of their society which were submited at time of registration of society. Member can get the copy of the same from society office. Refer Member’s Right : Inspection of Books and Records

      3. The Registrar Circular of 2016 is very clear that cooperative service societies cannot charge transfer fees. Copy of the circular is already given in the article. Disputes happen as committee’s, even after knowing this circular wants to collect transfer fees.

      4. Maintenance Charges: Byelaws are silent about this. There is one high court judgement on that topic but does not apply to all societies. Market practice over the years has become charging based on square feet.

      Reply

  2. The absence of model byelaws in gujarat is a major reason for conflicts in society. Various matters are a cause of dispute like maintenance charges as per sq ft & transfer charges. Most societies dont collect nomination forms. Nor issue maintenance bills

    Reply

    1. 1. Byelaw require society to collect Nomination forms. Sample format for nomination is already attached with Byelaws (form already given in above article). Once a member submits nomination form, it is to be recorded in the nomination register and a request letter needs to be filled.

      2. Issuance of Maintenance bill and receipts to members is procedural and goods accounting practice. Also, as per our experience, most societies are not maintaining proper books of accounts in accounting softwares. This needs to change.

      Reply

      1. Is iit mandatory to fix common seal on share certificates. It is mandatory in Maharashtra, not sure about Gujarat. Please advise.

      2. 1. As per Sec 37 of Gujarat Cooperative Societies Act, A Societies on its registration shall be a body corporate by the name under which it is registered, with perpetual succession and a common seal……..

        2. As per Rule 23 of Gujarat Cooperative Societies Rules 1965: A copy of entry in any book, register or list, regularly kept in the course of business and in the possession of the society, for purposes specified in sub-section (1) of Section 41 shall be certified:-

        a. by any officer of the society duly authorised in that behalf by the committee under the seal of the society; ……

        Based on the above, it can be inferred that all documents issued by society should contain a common seal. Thus Share certificate should also have common seal

    2. Sir, my society situated in Zundal, Gandhinagar charging excessive un reasonable penalty @Rs 100/-pm on late payment of Rs 300/pm maintenance charges, wherein In Maharashtra State, there is a limit of 21%p.a. limit for penal interest. There should not be fixed amount for penal interest, it should in the rate of interest not beyond the limit fixed by RBI/ Govt.Please advise .

      Reply

      1. Yes. You are right. This is not reasonable and completely unfair. Please ensure whether this penalty amount has been decided in GBM.

  3. The Model Bye-Laws of the Cooperative Housing Society was formulated by the Maharashtra Cooperation Department and is accessible via a Google search. But, I haven’t seen any Model Bylaws like that in Gujarat; each society has its own set of bylaws. If so, I’m curious as to where you found the Bylaws Clause that you mentioned in this article.

    Reply

      1. maximum collection of fund (say from maintenance). It can be different for different societies and must be amended time to time. The clause in sample/model bylaws says this:

        શેર ફાળો કાઢી ઉભા કરેલા ભંડોળ રકમ રૂ. ૧,૦૦૦૦૦/- કરતા વધુ હોવી જોઈએ નહિ.

  6. Greetings, Sir In the sample bylaws you shared, subclause 2 of clause 3 (i.e. ભંડોળ) specifies a maximum collection of fund (say from maintenance). It can be different for different societies and must be amended time to time. The clause in model bylaws says this:

    શેર ફાળો કાઢી ઉભા કરેલા ભંડોળ રકમ રૂ. ૧,૦૦૦૦૦/- કરતા વધુ હોવી જોઈએ નહિ.

    Reply

  7. Respected sir, 

    I got your mail I’d from google website. I do have commercial property in chandkheda area. And I bought it 2021 as resale. It’s commercial residents property. The society registered as cooperative service society. The secretary of society have been demanding transfer fees around 52000. As rules in cooperative service society, there should be no transfer fees for resale property. If I not pay I will not issue my share certificate or no objection certificate. I m confused. So what are the adjunct rule Would you pls explain for me. 

    Thanks

    Reply

    1. 1. Already Registrar circular copy is attached in article, where it is clearly mentioned that service society cannot charge any money in any name at time of transfer
      2. If anyone is still insisting that a complaint can be filed with Registrar office or case can be filled in Board of Nominee Court

      Reply

  8. Dear Sanjay sir,

    Thank you for your invaluable guidance. I have bought a freehold plot in Vadodara and constructed a house. The developer sold 52 individual plots and didn’t register a cooperative housing/services society. For the upkeep and maintenance, in 2021/22 they created a “Members Association” and handed over the corpus collected for maintenance to this Association.

    Now, some members want to form a cooperative services society and are insisting that other plot owners also join. Their primary objective is to collect funds through subscription, maintenance fees and transfer fees. They also want to ensure that existing owners don’t sell their plots to commercial buyers or members of other communities.

    Can you please guide whether –

    – Is it necessary to join this society? Can anyone be forced to join?

    -Can a services society frame byelaws that stop the sale of property to “unwanted” elements?

    -Can they frame byelaws about things like pets, parking, etc?

    Many thanks.

    Reply

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