The lack of clear coverage and absence of an appropriate understanding of Bye-laws, more often than not, leads to disputes and filing of a number of court cases. Amongst these, the disputes relating to memberships and the elections of societies are in the forefront. Since the membership of certain societies is very large, contested claims and counter-claims, accusations on account of false memberships etc. often lead to election related disputes. The scale and increase in number of the members makes it complicated to ensure involvement of members in the process of decision making. It is therefore, very important that proper Bye-laws are formulated by the society as per the act, rules and model bye-laws as per the intent of the legislature.
The Foreword of the HRRS Act 2012 (Act), the Statement of Objects and Reasons accompanying the Bill throws light on the objective of the Legislature in its enactment as below:
"At present, the law relating to the Societies and their registration is governed by the Societies Registration Act, 1860 (Central Act 21of 1860) in its application to the State of Haryana. The Societies Registration Act, 1860, being a 19th Century legislation, has become outdated and found to be deficient in addressing the present day requirement. As such, need has been felt for framing a comprehensive legislation with regard to the registration and regulation of Societies to meet the present day requirement.
The inadequacies of existing legislation and absence of a comprehensive regulatory framework has led to a number of disputes and filing of a number of court cases. Disputes relating to memberships and the elections of societies are in the forefront. It has been observed that the membership of certain societies is very large, generating contested claims and counter-claims, involving allegation of bogus memberships, which in turn often lead to election related disputes. The enormity and spread of the members makes it difficult to ensure participation of members in the process of decision making.
Keeping in view that the scope of activities covered by various Societies registered under the 1860 Act is very large and the stakeholders belong to all sections of Society, it has become imperative to make provisions for effective regulation of the societies and simplify the provisions to minimise the scope of any ambiguity. This bill provides for summary settlement of membership and election related disputes which take a very long time in courts. It provides for vesting of properties in the Society itself rather than the Governing Body as per existing Section 5 of the 1860 Act and which could be misused by an office-bearer for personal use. The Act forbids employment of a member or dependent in the society and division of profits among the members except in case of housing societies. It introduces the concept of electoral colleges and constitution of a Collegium as an intermediate body to address the problems of societies with large memberships and to ensure and enable participative decision making. The Bill seeks to establish a regulatory framework with the objective to provide clear guidelines for smooth administration and management of the affairs of the Societies registered under this Act in the State of Haryana."
From the above, it is clear that one of the objectives of the Act was to provide for summary settlement of membership and election related 14 of 22 disputes which take a very long time in courts. The Preamble of the Act states that it is an Act to consolidate the law relating to the registration and regulation of Societies in the State of Haryana, promoting art, fine arts, charity, craft, culture, education, literature, philosophy, political education, religion, sports, science, any public or charitable purpose and for matters connected therewith or incidental thereto'. Section 89 bars the jurisdiction of the Civil Court to entertain or proceed with a suit or to settle, decide or deal with any matter which under the Act is required to be settled, decided or dealt with by an authority under the Act.
Thus, the management and administration of a Society entirely depends on its carefully drafted Bye-laws strictly within the ambit and provisions of the act. Any provision in the Bye-laws of any society which is not in line and intent of the provisions of the Act would be dealt with as prescribed in the Act and it can in no way supersede the provisions of the Act and its rules.
As per section 2 of the Act, Bye-laws means the Bye-laws of a Society and anyone who fulfils the eligibility criteria for becoming a member of a Society, as specified in the Act and has been admitted as a member of the Society in accordance with its Bye-laws comes under the definition of member. The Bye-laws are required to be signed by the signatories to the Memorandum of the society. Every member shall subscribe to and be bound by the Bye-laws as amended, from time to time and duly registered with the District Registrar.
The Bye-laws shall generally conform to the model Bye-laws as prescribed and shall contain provisions in respect of the following matters:-
(i) Identity which includes name and address of the Society; (ii) Aims and objects of the Society; (iii) Provisions regulating the membership of the Society i.e. eligibility, admission, kinds of membership, membership fee, subscription fee, resignation, withdrawal and termination etc.; (iv) the composition of the General Body, its powers functions, periodicity of its meetings, quorum, period of notice for meetings, manner of voting, record of proceedings etc.; (v) principles of formation of electoral colleges, constitution of Collegium, manner and mode of election for a member of the Collegium, resignation, removal, the term of office of the member, powers, functions, procedure and periodicity of holding the meetings of the Collegium, quorum, period of notice for meetings, manner of voting, record of proceedings etc.; (vi) composition of Governing Body, the manner and mode of election or appointment, resignation or removal, the term of office of the office bearers, its powers, functions and duties, procedure and periodicity of holding the meetings, quorum, period of notice for meetings and manner of voting, record of proceedings etc.; (vii) Procedure for amendment in the Bye-laws; (viii) Procedure regarding amalgamation, division and dissolution; (ix) sources of finance including the types of funds to be raised, maintenance of accounts, inspection of accounts and its audit, appointment of auditor, liability of member for discharge of debts etc.; (x) Provisions regarding the safe custody of the property or assets of the Society, particularly mentioning the manner of keeping or investing any money of the Society; and (xi) Any other matter relating to the affairs of the Society, as may be required.
A Society may include or exclude such provisions in its Bye-laws as required keeping in view the nature and scope of its activities and operations, and which may or may not find a mention in the model Bye-laws subject to the condition that such additions or omissions are not inconsistent with the provisions of the Act and rules.
Attention is also invited to the proviso of section 6 of the Act titled ‘aims and objects’ which states “provided that no society shall be registered under the act unless it prohibits the payment of any dividend or distribution of of any assets, income or profits to its members or their dependents or legal heirs except where a society has been formed or established by the contributions of shareholders or members in the nature of a housing society or a welfare association of flats or tenement or floor space owners pursuant to the requirements laid down under the Haryana Apartment Ownership Act, 1983 ( Act No. 10 of 1983 ) or a resident welfare association for the operation, management and maintenance of facilities for the residents or civic amenities of any defined area”.
It is important to note again that this Act is only to consolidate the law relating to the registration and regulation of societies in the state of Haryana promoting the above described activities whereas The Haryana Apartment Ownership Act, 1983 ( HAOA 1983 ) is an Act to provide the ownership of an individual apartment in a building and to make such apartment heritable and transferable property and matters connected therewith.
This is precisely the reason that Specimen Model bye-laws of society in clause 3 of Annexure -5 of the HRRS Act 2012 clearly state “the housing complex (name) is submitted to the provisions of the Act and the rules made under The Haryana Apartment Ownership Act, 1983”.
Therefore, for the purpose of law relating to registration and regulation of Societies in the state of Haryana, the HRRS Act 2012 is applicable and for the purpose of matters relating to apartment ownership, rights and obligations, HAOA 1983 is applicable.
The contents of the Memorandum and the Bye-laws are to be prepared in accordance with the provisions contained in sections 24 and 25 of the Act. The Society is under obligation to follow the model memorandum and the Bye-laws set out in Appendix-I, II and III of HRRS rules 2012. It may be noted that there is very limited scope not to follow the model bye-laws since they are part of the rules vide part III which prescribe Model Memorandum of Association and Model Bye-laws of Societies in the state vide Annexure-1 To Annexure-5
Every existing Society must apply in the prescribed proforma to the District Registrar for obtaining a new registration number within a period of two years further extended period notified by the Government. If the new registration number is not applied within two years as mentioned above, then the application for the new registration number shall be made along with such fee, as may be prescribed, within such extended period, as notified by the Government. If a Society fails to move an application for the new registration number even within such extended period, the registration may be cancelled.
The Application for allotment of new registration number by an existing Society under Section 9(4) of the Haryana Registration and Regulation of Societies Act, 2012 vide sub-rule (1) of rule is made in Form – VI where the applicant society has to certify that the memorandum and the Bye-laws of the Society, as being presented, are confirming to the provisions of the Haryana Registration and Regulation of Societies Act, 2012 and the rules made there under.
A Society may, by a special resolution passed in a general meeting of the Association by 3/5th of the members present and voting amend the provisions of its Memorandum or bye-laws with respect to:
(i) Change in the name of Society; or (ii) Change in the aims and objects of the Society, as permissible under the Act.
“Special Resolution” means a resolution passed in a meeting of the General Body or the Collegium, as the case may be, in which at least forty per cent of the members entitled to vote are present and the resolution is approved by three-fifth of the members so present and voting. The relaxation of 25% and 15% as given below for the quorum of General Body Meetings is not applicable in the meetings where Bye-laws of the society are adopted.
It may be noted that the quorum for other meetings of the General Body/Collegium is minimum 40% of the total members of the Society. In case the minimum stipulated quorum is not present in the meeting of the General Body/Collegium so convened, the meeting shall be adjourned to another date of which a proper notice shall be issued. The quorum for a meeting adjourned on this account shall be not less than 25% of the members entitled to vote and present in person, subject to a minimum of four. Further, in case such meeting is adjourned for a second time for want of the quorum of 25%, the quorum for such adjourned meeting shall be 15% of the members entitled to vote and present in person subject to a minimum of four.
An Application for amendment in the Memorandum and By-laws of the Society under section 26(3) of the Haryana Registration and Regulation of Societies Act, 2012 (sub-rule (2) of rule 17) is made in Form – XVI. In case of any inconsistency between the Bye-laws and the provisions of the Acts, the provisions of the Acts will apply.
Any special resolution passed shall be filed with the District Registrar within thirty days from the date of approval thereof and the District Registrar may, if he is satisfied that the same is in accordance with the provisions of the Act and the rules, register such change. Any such change shall have no effect until it has been so registered.
If the District Registrar refuses to register a change in the Memorandum or the Bye-laws he shall communicate the reasons there of in writing within a period of sixty days of filing of the special resolution by the Society, and the special resolution passed by the Society in that case shall have no effect. If the District Registrar fails to communicate the reasons within sixty days, the special resolution shall be deemed to have been registered by him.
If the Registrar, on a report from the District Registrar or otherwise, considers that an amendment of the Memorandum or Bye-laws is necessary or desirable to bring the same in conformity with the provisions of the Act or rules made there under, he may, by an order in writing, direct the Society to make such amendment within such time, as may be specified, in such order. The Governing Body shall place such directions before the General Body for its consideration and approval within forty five days of the receipt of such directions. If the Society fails to make any such amendment within specified time, the Registrar, after giving the Society an opportunity to state its objections, if any, register such amendment to the Memorandum or the Bye-laws and send a certified copy thereof to the Society. Such amendment to the Memorandum or Bye-laws, as the case may be, shall be final and binding on the Society and its members.
Every Society is under obligation to deliver, on demand a copy of its Memorandum and the Bye-laws to a member at the time of admission.
If any office bearer, knowingly or willingly, makes a false return or furnishes false information or willfully or without any reasonable reason, disobeys any summons, requisition, or other lawful order or direction issued under the provisions of the Act or withholds or fails to furnish any information lawfully required from him by the District Registrar, Registrar or Registrar General or person authorised in this behalf under the provisions of the Act, shall be punishable with fine which may extend to five thousand rupees, and in the case of a continuing default or contravention, with fine which may extend to one hundred rupees for every day during which the default or contravention continues.
Where a member is unable to attend the meeting in person, he may communicate his concurrence or reservation to the amendment to the memorandum or the Bye-laws, as the case may be, by electronic means or letter at least one day prior to the date of the meeting, which shall be read out by the Secretary in the meeting.