Mumbai Grahak Panchayat Demands End To Registrar's Role In Developer Selection, Proposes Key Amendments For Cooperative Housing Redevelopment

Mumbai: The Mumbai Grahak Panchayat (MGP) has, in a press statement on Friday, has demanded an end to the involvement of cooperative registrar’s offices in the selection of developers for the redevelopment of old buildings.

The state government has invited suggestions from stakeholders vis-a-vis the proposed amendments to the rules governing cooperative housing societies under the Maharashtra Cooperative Societies MCS Act.

Apart from suggesting certain amendments to the proposed rules, the MGP has also submitted several recommendations concerning redevelopment, including the issue of rampant corruption in the registrar's office in the process of selection of developers.

Some of the key suggestions made by the MGP are:

* Include 79(A) re-development guidelines into the Rules: The comprehensive guidelines on redevelopment issued on July 4, 2019, under Section 79(A) of the Maharashtra Cooperative Societies Act, 1961, be formally incorporated into the rules. The MGP has stated that doing so will help resolve the longstanding controversy regarding whether these guidelines are mandatory or merely advisory in nature.

* Remove mandatory requirement of the registrar’s presence in the developer selection process: Currently, a representative from the registrar's office is required to be present during the special general body meeting convened for selecting a developer for the Society’s redevelopment with a view to ensure that the process is transparent and free of any malpractice or coercion.

However, the MGP has highlighted the widespread misuse of this provision by the registrar's office. The MGP has alleged that the registrar’s office demands bribes ranging from Rs 25,000 to Rs 40,000 per flat in exchange for granting approval for the special general body meeting and the subsequent NOC.

Developers, treating this as part of their business cost, allegedly pay these amounts without protest to agents of the registrar. To curb this rampant corruption, the MGP has suggested that the requirement to seek prior permission from the registrar for such meetings be abolished, thereby removing the registrar’s involvement from the process.

This, according to MGP, will make the redevelopment process faster and cleaner. To ensure transparency in the developer selection process, the MGP has proposed to retain the requirement for video recording of the proceedings.

However, the housing society should keep this video recording with itself and need not submit it to the registrar. If any complaints or disputes arise, the video film can be produced as evidence in any court.

* Relax requirement of minimum 51% votes for developer selection: Currently, a developer must receive at least 51% of the total members’ votes to be selected for redevelopment. However, in situations where three developers are shortlisted in the final round, at times, none of them may receive the required 51% majority, creating a deadlock which requires the entire process to be undertaken afresh.

This leads to delays which those living in old, dilapidated buildings cannot afford. Hence the MGP has suggested that if no developer receives 51% votes in the first round, the top two candidates should face a second round of voting during the same special general meeting. If neither of the two secures 51% votes even in the second round, the society Should be allowed to appoint the developer with the highest number of votes.

* Provision to hold committee & general body meetings in hybrid/online mode: During redevelopment, when buildings are demolished, members are dispersed across different locations, making it difficult to conduct committee or general body meetings in person. To solve this issue, the Panchayat has recommended that societies be allowed to conduct their meetings in hybrid/online modes.