Request for inspection of Saket CHS Affairs under Sec. 89(A) of MCS Act. July 17, 2016

January 17, 2020

The Dy Registrar of Co-op Societies,

Thane City,

Thane.

Dear Sir,

Sub: Request for stern action to be taken against the Managing Committee of Saket CHS LTD, Thane (West).

Dear Sir,

My name is Dayanand Nene and I am a resident cum Managing Committee Member of Saket CHS LTD, Thane.

I am approaching you again with a request to take stern action against the Managing Committee of Saket CHS LTD and dismiss the Office bearers of the Society for repeated, wilful violations of the Byelaws of the Society, for the past 4 years, which have caused and continues to cause great financial loss to the society, spoiled the living atmosphere of the Society and spread enmity amongst fellow members - all acts which make them unfit to hold the office.

I have been bringing it to the notice of your esteemed office consistently for the past 4 years, but for reasons best known to you, your office has been treating the Society Management with kid gloves and letting them off with mild warnings - frustrating me and making me feel that there is more than meets the eye for your office's inaction.

The various violations of the Society Management can be summed up in 2 parts: Financial and Administrative.

Financial lapses.

There is total financial mismanagement in the Society. 

The Society office bearers take decisions having big financial implications without consulting or informing the Managing Committee members or taking proper sanction from the General Body.

This inspite of cautioning and warning them repeatedly through letters, not to do so.

All this has resulted in Society incurring a loss / losing multiples of lakhs of people's hard earned money.

I will elaborate on this: 

*Major Repairs to Society buildings*:

Through a unanimous decision in the SGM dated February 25, 2018, the General Body decided to form a Repair Committee to oversee and execute the Repair Program in the Society. 

5 sub-committees were formed as part of the Repair Committee: Technical, Finance, Legal, Execution and Collection Committees to handle the process of Repairs. (Resolution adopted).

It was also decided that these committees will study the entire subject of Repairs afresh and give their suggestions and action plan to the Managing Committee and General Body.

About 40 people in all have volunteered to work on these different committees.

It was decided that the Managing Committee will not interfere in the functioning of these sub committees and they will have functional autonomy.

It was also decided to collect Rs.3/- per square ft., per month from members towards Repair Fund.

1) The first major repair work undertaken was renovation of the lifts.

The first sign of the Society office bearers and the Repair Core Committee sidelining the Managing Committee began from here.

Without taking the Managing Committee members into confidence the contract was given to Otis Elevators.

Apropos the above, I opposed the proposal in Joint meeting between Managing Committee and Repair Committee:

i) proper due diligence and application of mind was not done while awarding the lift renovation contract to OTIS 

ii) and due to it, not only the society has been saddled with a 40 years old, outdated technology, but we have made a loss of at least 25 lakh rupees. (Refer Annexure).

My repeated requests and cautioning was overlooked.

The main reason to renovate the old lifts was to install the ARD system  - a safety device in case of Electricity failure - that was not installed and a sub standard system was bought at much higher rates : atleast loss of Rs. 25 lakhs -  plus no ARD system and PWD has criticized the decision.(See PWD letter in Annexure).

2) After seeing that my protests caused them no harm, the office bearers and the core team of 3 people ( rest of the Repair Committee members have either left or not active by now) got emboldened and they started taking arbitrary decisions, giving contracts for works without proper tenders and approval of the Managing Committee and General Body.

Every objection raised by me was stonewalled by stating that the Repair Committee was autonomous. 

No information on was or is being shared by the office bearers with Managing Committee members. 

Letters are not replied nor are accounts of the money being spent told to members.

Contracts worth lakhs of rupees have been given / are being given without taking approval of the General Body.

Apart from the Rs. 1 crore spent on Lift Renovation, the Society has spent another 75 lakhs so far on Overhead Water Tank Repair and Meter Room Repair.

Exact figure is not known as it is not being revealed by the office bearers.

*Latest development*:

Few days ago, I received a WhatsApp message purportedly posted by Gautam Mazumdar, Treasurer of the Society,  -giving details of a Repair Committee meeting in which they had decided to start major repairs to the ducts of 2 buildings B3 an B4 at a cost of Rs. 20 lakhs per building.

I had sent you my protest mail immediately ,(see Annexure).

I protested that WhatsApp is not the medium to inform of such major decisions and though Repair Committee - even if so called autonomous - has got no authority to give such big contracts unilaterally. 

They are supposed to give their recommendation to the Managing Committee which shall then call a General Body meeting, take its approval and then go ahead.

Inspite of my protests, they have gone ahead and started work.

There is no Architect or Project Management Consultant appointed - as required by the Byelaws - to look after such major repair work and some absolutely novice people are running the show.

Other financial misdemeanors:

Thru this letter, I am showing a mirror image of their ' kathni and karni' in past 2 years.

A) They had signed and certified in the Balance Sheet of the society that there was a cash balance in excess of Rs. 35,000/- in the cash box as on the end of Financial years 2014-15 and 2015-16. Actual balance counted by the then office bearers was below Rs. 4000/- for both years.

This money certified by them should have been reimbursed to the society by them. However, when I raised the topic, they passed a book entry and wiped out Rs. 28,000/- from the accounts for the year 2016-17.

B) An approximate amount of around Rs. 50,000/- was spent by them on buying clay and mud for the apology of a ‘Park’ in the corner of buildings A6-7. Society money was literally thrown in mud apart from insulting the memory of our ex President APJ Kalam.

C) They signed and certified 3 different Balance sheets for the year 2015-16 in a span of one month – affirming on oath that all 3 were correct and reflected the true accounts of the society.

The most funny thing was that two of these accounts had shown a loss of over Rs 20 lakhs ( which was signed and certified by them) and the third balance sheet – supposedly rectified and corrected – showed a profit (in reality, non existent) of over Rs. 1.50 lakhs – on which society also paid Income Tax.

Ludicrous.

D) In the year 2016-17, an amount of Rs. 46 lakhs was spent on supposed Repairs and Maintenance – without inviting any tenders, without ever bringing the subject in any MC meeting or taking any sanction or approvals.

This illegal act of theirs has drawn a scathing criticism from our Auditors – who submitted a very negative Special Report of our society – for the first time in 15 years.

Based on the Auditors Report, the Registrar’s office sent the society a ‘Dissolution’ notice under Section 102 of the MCS Act. A lot of fire fighting had to be done to get the notice cancelled.

E) The incompetent and arrogant office bearers during the period wasted Rs. 90,000/- of the society money by appointing M/s. Kaustubh & Co. to write society accounts and making them advance payment.

Predictably, they took the money and disappeared without completing the assignment. Direct loss to society due to their carelessness and incompetence.

F) In another bizzare decision, these incompetent people released an amount of Rs. 75,000/- to Sanjay Tupe & Co., inspite of warning and caution given by CA Pradeep Gupta – not to release payment till they complete their assignment and return society records back to society.

Result: Loss to society and records also were not returned.

MORE ANNOYING IS THAT INSPITE OF ME REQUESTING THE OFFICE BEARERS IN WRITING THAT YOU WRITE TO TUPE & KAUSTUBH TO RETURN SOCIETY MONEY, THEY HAVE REFUSED TO DO SO.

G) During these 2 years, they have tampered with society accounts and messed them beyond repair. 

They discontinued our time tested billing system and started experiments like at first not giving the bills to members and putting a general area wise bill on notice board – contravening the byelaws.

Then they stopped giving previous credits /debits in the bills, removed Non Occupancy charges and parking charges from the bill, leading to total confusion.

Result: Today, we are grappling to reconcile members accounts and don't have even the yearly opening and closing balances.

These incompetent office bearers have not complied with any statutory compliances of the MCS Act and Byelaws and exposed the society to vulnerable situations.

H) Payment made to so called (fake) TMC Architect in May 2018.

Without asking or informing the Managing Committee, the Office bearers have paid an amount of Rs. 50,000/- to an Architect of TMC for copying the original plans of the society to submit to TMC for OC purposes.

TMC has rejected that plan – now who should be held responsible for the loss of Rs. 50,000/- paid without any sanction, permission or approval?

I had suggested that the Society invoke provisions of Byelaws no. 138 and make the people who took the decisions accountable and answerable and recover this cumulative amount of Rs. 3 lakhs from them (see Annexure).

I) The Society has never filed proper IT Return /TDS /GST returns. Result: IT and TDS notices and penalties have been slapped on the Society.

Administrative lapses:

The office bearers are not familiar with the Byelaws of the Society or the MCS Act.

They don't listen to advise given to them and work arbitrarily.

On the administrative front, a coterie of 3-4 people have made a mockery of the spirit of cooperation. 

Managing Committee has been constantly bypassed. Decision making has become adhoc and arbitrary. Favouritism has become rampant by hiding and manipulating facts.

How – read on..

1) They have constructed an illegal wall and encroached upon TMC road in a bid to increase space of the Society - TMC has slapped them with a notice to demolish it.

2) Last year, the current Chairman shocked the entire society by the way he threatened and bullied the two ladies in the society office in front of the Secretary.

He also lost his balanace and levelled intemperate charges against me - all which are frivolous in nature.

The ladies had lodged a complaint of Mental harassment at work place and threatened to approach the police before the other office bearers hushed up the case after the Chairman tendered a verbal apology to the ladies.

3) For the past 4 years, the Society has never completed its statutory complainces. Audit Rectification Reports and O form have never been submitted on time, what is submitted is incomplete.

3) The Statutory Auditor has severely criticized the Society functioning in past 4 years in all his reports.

4) In the past 4 years, the Society has never completed the Audit on time. Provisions of law that the Audit must be ready before calling the AGM have never been followed.

5) The Society accounts are in a mess. There was a difference of RS. 12 lakhs in the Manual and Tally accounts which has not been tallied till today.

6) Without permission of the Registrar office the Society has written off Rs. 7 lakhs without giving any clarification.

7) Bye Law No 111. Management of the Society to vest in the Committee 

The Management of the affairs of the Society shall vest in the Committee duly constituted in accordance with the provisions of the Act, the Rules and the Bye-laws of the Society.

Observation:

However in Saket, this has never been the case. Office bearers have been doing what they want - bypassing the Managing committee members. In fact, the arrogant office bearers have tried to prevent certain members - including me - of the Managing committee from even entering society office - which is totally illegal.

8) Quorum for the Meeting will be simple majority of the existing Committee Members - LOA should not be treated as being present.

This provision has been violated by the Saket Managing committee from the past 3 years. If a reality check is done - there was never any quorum in 90% of the Managing Committee meetings and hence, all decisions of the Managing Committee are null and void in the past 3 years.

9) Bye Law No 123. Custody of the records of the Society 

All records of the Society shall be kept at its premises, convenient to the secretary, with the approval of the Committee of the Society.

This provision has been violated by the Office bearers, who are selectively keeping certain records at their residences and not showing them to other MC members even on request - when it is in fact their right to see them.

One such record is the file pertaining to application made to TMC regarding the Occupation certificate. The papers about the same are not available in the society office even on demand - in our hearing held on July 30, 2019, the Society office bearers blatantly lied to you on this subject.

10) Bye Law No 137. Joint and Several liabilities of Committee Members 

The Members of the Committee shall be jointly and severally responsible for all the decisions taken by the committee during its term relating to the business of the Society. The Members of the committee shall be jointly and severally responsible for all the acts and omissions detrimental to the interest of the Society.

This has been totally violated by the Office bearers in the past 3 years. They feel society is their fiefdom and behave accordingly and spend money without any proper discussion, approval. 

Violation of Byelaws no.78 to 84 on Parking.

(To regulate parking in the Society. as per provisions of the law). 

In Saket, there is no Parking Policy is in place. 

Members were given parking in 2007 - still continue to enjoy the same for a paltry amount of Rs. 1000/- per anum, and even when there is a huge waiting list.

Parking payment default: – around December 2017, the Secretary pointed out that 38 members who had parking slots had not till then paid the Rs.1000/- for parking for that year – though the money is to be paid in April every year.

The Secretary proposed that they be given 7 notice.

I suggested that all these parking defaulters places should be cancelled immediately.

The Secretary refused – it later came to light that the Society Chairman and the Secretary’s brother were amongst those 38 parking defaulters.

You have given advise to Society that they should follow provisions of the bye laws, during your ruling on our hearing held on July 30, 2019.

Since then, 6 months have passed but they have not acted on your advice.

Considering all these repeated violations, I wish to state that the society office bearers are thoroughly incompetent to run the society affairs. They seem to be mismanaging them intentionally and with wrong intent.

In view of all this, it is my earnest appeal, to dismiss this Managing committee and appoint an Administrator on the society and hold fresh elections subsequently, after the cooling period.

Regards,

Dayanand Nene

Member, Saket Managing Committee

Note: Annexures shall be attached to the hard copy and submitted personally.

+++++++++-++++++++++++-+++++++++-++++++++++++++

Earlier letter sent in 2016:

July 17, 2016

The Dy. Registrar of co-op. Societies,

Thane City,

Thane.

cc: Shri Chandrakantdada Patil - with request to help in the matter.

Dear Sir, 

Please find attached herewith a detailed letter requesting you to conduct a full fledged independent audit and inquiry of Saket CHS Ltd., Thane.

Expecting your urgent action in the wider interest of the society.

Regards,

Dayanand Nene

cc: Co-operation Minister / Cooperation Commissioner - with request to needful in the matter.

Dayanand J. Nene

President: Righteous Foundation / Alert Citizens Forum of India / Sahakarsutra

National Secretary: Consumer Protection Service Council

Socio-political Activist : Bharatiya Janata Party

88795 28575 / 90040 28575

See these links: 

https://mail.google.com/mail/u/1?ui=2&ik=945db75ef8&attid=0.1&permmsgid=msg-f:1540123283181274663&th=155f9df754540627&view=att&disp=safe&realattid=f_iqqul23k0

https://mail.google.com/mail/u/1?ui=2&ik=945db75ef8&attid=0.2&permmsgid=msg-f:1540123283181274663&th=155f9df754540627&view=att&disp=safe&realattid=f_iqquljmb1