Hsg society officials need not furnish indemnity bond
The state government on Thursday abolished a condition that requires people who volunteer as office bearers in cooperative housing societies to furnish an indemnity bond taking responsibility of all acts and omissions that may cause any loss to the society.mumbai Updated: Sep 08, 2012 01:05 IST
The state government on Thursday abolished a condition that requires people who volunteer as office bearers in cooperative housing societies to furnish an indemnity bond taking responsibility of all acts and omissions that may cause any loss to the society.
Cooperation secretary Rajgopal Deora told HT on Friday that the state issued a government resolution to do away with the condition – the M-20 bond, in legal parlance - on Thursday night. The decision was not published till Friday evening.
The M-20 bond is an undertaking given by each managing committee member within 15 days of his assuming office. It says, “I shall be jointly and severally responsible for all decisions taken by the managing committee during its term relating to the business of the society and shall be jointly and severally responsible for all acts and omissions detrimental to the interest of the society…”
Housing societies were brought under the ambit of this rule in 2001. By implication, any person who signed society documents without signing an M-20 bond on assuming office was liable for prosecution for serious crimes including fraud, cheating, misrepresentation and forgery.
There are more than 90,000 cooperative societies in the state of which about 50,000 are in Mumbai and Thane. More than 30% of these are run by state-appointed administrators. The state takes control of the society when the committee is dissolved on legal grounds or members resign and others are not willing to fill up vacancies.
Deora said that the decision would encourage people willing to take up the honorary job. “In absence of M-20 bonds and in case of any wrongdoing, the aggrieved parties could take up the issues with competent authorities,” he said.
The initiative was planned by CM Prithviraj Chavan and co-operative minister Harshvardan Patil after receiving feedback that people did not come forward to run societies.
But a few housing society activists were upset with the decision. “The M-20 bond was a deterrent against any wrongdoing in the society. I demand that the state now introduce a more effective mechanism to check corruption and inefficiency in housing societies,” said activist JB Patel. He said that the government would also lose revenue that it earned through stamping of bonds.