Practical Legal FAQs on Housing & Commercial Co-operative Societies in Gujarat
Under the Gujarat Co-operative Societies Act, 1961 (as updated)
Introduction
Co-operative Housing and Commercial Premises Societies are the backbone of Gujarat’s real estate ecosystem, especially in urban and semi-urban areas. These societies are governed by the Gujarat Co-operative Societies Act, 1961, which regulates everything from registration to dissolution, management to dispute resolution.
This comprehensive FAQ-style article is designed for real estate stakeholders — including developers, flat/shop buyers, society committee members, legal and financial professionals. It simplifies the law into real-world issues and practical interpretations.
Frequently Asked Questions
Section A: Society Formation & Promoter's Role
As per the provisions of the GOFA Act, when the majority of the number of the units are booked the promoter shall apply for formation of the society. As per the Gujarat Co-operative Societies Act, the registrar requires minimum 8 unique members for formation of the society. Once at least 8 units are booked and their agreement for sale are registered, the promoters can proceed for formation of the society.
Either the promoter/builder, or the flat/shop owners (minimum 8) can apply to the Registrar with:
- Bye-laws
- Member list with KYC
- Application in prescribed format
- Registered Agreement for sale/ sale deed
- Bank statement of proposed society showing account of proposed society in district co-operative Bank.
A provisional society is formed pre-registration, often controlled by the builder. A registered society, once approved by the Registrar, has independent legal identity, powers to raise maintenance, manage property, and enforce rights.
Only if he is a unit holder, and not otherwise disqualified (Sec. 74A/B). Builders must not use proxies or relatives to control post-handover affairs.
Any unreasonable delay is a violation of law. Buyers can approach the Registrar (Sec. 86) or file RERA complaints to compel formation and conveyance.
Section B: Membership (Flat/Shop Owners)
Any adult Individual buyer of a flat/shop is eligible. Firms, companies, and trusts can also become members if they own a unit (Sec. 22).
No. Only the registered owner is a legal member. Tenants or relatives cannot vote or contest unless membership is transferred.
Members can:
- Vote and attend meetings (Sec. 28)
- Nominate heirs (Sec. 31)
- Inspect records (Sec. 33)
- File complaints against the committee
On death, expulsion (Sec. 36), sale of unit, or resignation. Expulsion requires:
- 3/4th vote in general body
- Registrar’s approval
Not if they serve the same purpose (e.g., two residential flats for self-use in different societies). Bye-laws usually restrict this.
Section C: Committee & Governance
The elected Managing Committee (Sec. 73) handles administration, subject to the general body’s control.
Generally 5 years, unless bylaws state otherwise. Designated office bearers (Chairman, Secretary) cannot hold the same post for more than 6 consecutive years (Sec. 74A).
Persons who:
- Are defaulters
- Have conflict of interest
- Hold similar posts in other societies
- Are convicted or expelled (Sec. 74B)
Yes, under Sec. 81, for:
- Financial irregularities
- Not holding elections or meetings
- Failure to function
Registrar can appoint a Custodian (Sec. 74D) to manage affairs and conduct elections.
Section D: Meetings, Notices & Record Keeping
As per Sec. 77:
- Must be held once a year
- Agenda includes accounts, audit, elections, budgets
Minimum 14 days notice for AGM; 5–7 days for committee meetings (bye-laws may vary).
Usually 2/3rd of total members, or as per bye-laws. If not met, meeting is adjourned
Yes, by filing a complaint before the Registrar under Sec. 86, citing manipulation or procedural lapses.
The Secretary is the custodian of all statutory records and must ensure access to members on request (Sec. 33).
Section E: Audit, Accounts & Compliance
Yes, annual statutory audit by a certified auditor is mandatory under Sec. 84.
The society may propose names, but appointment is done by the Registrar in many cases.
- Unrecorded cash transactions
- Maintenance overcharges
- No proof of expense approval
- Non-compliance with fund accounting
Registrar may:Appoint auditor
- Suspend committee (Sec. 89)
- Initiate inquiry (Sec. 86)
Yes. Returns include:
- Annual audit report
- AGM minutes
- List of committee members
- Budget estimates
Section F: Maintenance, Transfers & NOCs
As per bye-laws:
- Based on unit area
- Equal sharing for common costs
No, unless dues are pending or buyer is ineligible. Unreasonable refusal is illegal.
Society can:
- Charge interest
- Restrict common services
- File recovery under Sec. 96
Yes. Share certificate and updated register are required for valid transfer.
No. As of now Service societies cannot charge transfer fees in any name or under any heads. However, the amendment is proposes and once it is notified societies will be able to charge 0.5 of the sale value subject to maximum of Rs. 1 Lakh as the transfer fees.
Section G: Disputes & Legal Remedies
With the Registrar of Co-operative Societies under Sec. 86 or under Section 96 for legal disputes.
Yes. Common disputes include:
- Recovery of dues
- Conveyance delays
- Title issues
Generally 3 to 6 years, depending on nature. Registrar can condone delay (Sec. 97).
Registrar may:
- Suspend officer (Sec. 89)
- Order inquiry (Sec. 86)
- Impose personal liability (Sec. 93)
No. Civil courts have no jurisdiction under Sec. 158. Disputes must be resolved through Registrar/Tribunal.
Section H: Liquidation & Registrar’s Powers
Yes. Under Sec. 107, if society is defunct, mismanaged, or voluntarily requests dissolution, Registrar may appoint a Liquidator.
Liquidator takes charge of:
- Assets & liabilities
- Recovering dues
- Paying creditors
- Distributing surplus
Members can appeal to Co-operative Tribunal under Sec. 109.
Section I: Offences & Penalties
- Misuse of funds
- Record tampering
- Failure to handover documents
- Misuse of “co-operative” name (Sec. 146–148)
Fine up to ₹5,000 or 6 months imprisonment or both.
Only the Registrar or a person with Registrar’s approval (Sec. 149).
Section J: Practical Real Estate Challenges
Members can:
- File complaint with Registrar (Sec. 86)
- Approach RERA for project violations
Registrar can merge them or define boundaries. Legal review of project layout is necessary.
No, unless:
- Bye-laws allow it
- Local zoning permits it Otherwise, members or society can object.
Once society is formed, these must be conveyed to the society unless project terms reserve them otherwise.
Not without legal or municipal justification. Doing so to avoid conveyance or control governance is a violation.
Closing Note
In housing and commercial premises societies, legal compliance isn’t just a statutory requirement — it’s essential for peaceful and effective community living. This FAQ guide helps decode the law for real estate professionals and society members.
Whether it’s registration, elections, audits or disputes, timely consultation with a legal, accounting, or company secretary expert is crucial.
Understanding and enforcing the Gujarat Co-operative Societies Act isn’t just about protecting rights — it’s about building better communities.
