Section 79A of Maharashtra Co-operative Societies Act, 1960 & Its Role in Redevelopment Projects.

Section 79A of the Maharashtra Co-operative Societies (MCS) Act, 1960 empowers the State Government to issue directives to co-operative societies in public interest or to secure proper management and functioning. It ensures that co-operative societies, including housing societies, operate transparently and efficiently.

In the context of redevelopment of housing societies, this section is particularly relevant because the State Government issues directives under it to regulate and streamline the redevelopment process, ensuring fairness and protecting members rights.

🔹Text of Section 79A of the MCS Act, 1960

If the State Government is satisfied that in the public interest or to secure proper management of the business of a society, it is necessary to issue directions to any class of societies, then notwithstanding anything in this Act, the State Government may issue such directions as it deems necessary, and the society or class of societies shall be bound to comply with such directions.

🔹This means the government has the authority to issue binding directives that societies must follow.

🔹 Significance of Section 79A in Redevelopment

The Maharashtra Government has issued several Government Resolutions (GRs) under Section 79A, particularly governing redevelopment of co-operative housing societies. These guidelines are intended to prevent malpractice, ensure transparency, and safeguard the interests of society members.

Key Aspects of Section 79A in Redevelopment

1️⃣ Mandatory Guidelines for Redevelopment

- The Government of Maharashtra has prescribed specific guidelines under Section 79A, which societies must follow during redevelopment.

- These include procedures for appointing a Project Management Consultant (PMC), selection of developers, financial transparency, and member consent requirements.

2️⃣ Member Consent Requirements

- As per the latest directives under Section 79A:

- At least 51% of the total members must give written consent for initiating the redevelopment process.

- 75% member approval is required to finalize and execute the redevelopment agreement.

3️⃣ Appointment of a Project Management Consultant (PMC)

- The society must appoint a PMC through a transparent selection process to assist in preparing tenders, evaluating proposals, and ensuring legal compliance.

4️⃣ Selection of a Developer Through a Tender Process

- The developer selection must be done through a competitive bidding process, ensuring maximum benefits to society members.

- The PMC or Architect must evaluate proposals objectively.

5️⃣ Transparency in Financial Transactions

- The developer must provide a detailed financial feasibility report before finalizing the agreement.

- The security deposit from the builder must be placed in a fixed deposit in the societys name.

6️⃣ Execution of Development Agreement

- A legally binding Development Agreement must be signed, incorporating:

- Project timelines

- Compensation for members (rent during construction, corpus, etc.)

- Developer obligations

- Safeguards for society members

7️⃣ Mandatory Registration of Redevelopment Agreement

- The redevelopment agreement must be registered under the Maharashtra Stamp Act & Registration Act to avoid future disputes.

8️⃣ Rights of Members & Dispute Resolution

- Section 79A ensures that no individual member is forced into redevelopment unfairly.

- Members can approach the Deputy Registrar, Co-operative Court, or the High Court if irregularities occur.

9️⃣ Action Against Violations

- If the society or developer fails to comply with directives under Section 79A, the Registrar has the authority to:

- Suspend the Managing Committee

- Appoint an administrator

- Cancel the redevelopment agreement if found fraudulent

🔹 Impact of Section 79A on Redevelopment Projects

✅ Ensures Transparency – The entire redevelopment process follows a structured & accountable framework.

✅ Prevents Fraud – Protects society members from exploitation by developers or corrupt managing committees.

✅ Strengthens Member Rights – Requires majority consent before finalizing redevelopment plans.

✅ Encourages Competitive Bidding – Ensures that members get the best deal through an open tender process.

✅ Legal Protection – Societies following 79A guidelines avoid legal complications & disputes in redevelopment.

Recent Developments & Amendments in 79A for Redevelopment

The Maharashtra Government frequently updates Section 79A directives to improve governance and protect members’ interests. Some recent amendments include:

- Stricter verification of developer credentials before awarding projects.

- Increase in penalties for mismanagement or fraud by the managing committee.

- Mandatory submission of quarterly progress reports to society members & authorities.

🔹Conclusion

Section 79A of the MCS Act, 1960, plays a crucial role in regulating redevelopment projects by ensuring transparency, legal compliance, and financial security for housing societies. The State Governments guidelines under this section are legally binding, and non-compliance can lead to severe consequences.

💡 Key Takeaway:

If your society is considering redevelopment, strict adherence to Section 79A guidelines will safeguard members interests and ensure a smooth redevelopment process. 🚀