Short Answer

Maintenance demands must be supported by the passed society budget or auditors' report to be considered valid.

Detailed Explanation

Section 70 of the Gujarat Cooperative Societies Act, 1961 states, "The committee shall prepare a budget estimate of income and expenditure for the next financial year." This means that the society committee is required to prepare a budget that outlines the expected income and expenses for the upcoming year. The budget needs to be approved by the general body of the society to be considered valid. Without a passed budget, the society cannot demand maintenance charges from its members.

Rule 77 of the Gujarat Cooperative Societies Rules, 1965 further elaborates on the audit of accounts. It states, "The committee shall cause the accounts of the society to be audited at least once in each co-operative year by the auditor appointed by the Registrar." This rule ensures that the financial transactions of the society are properly audited by a qualified auditor. The auditors' report provides transparency and accountability in the financial matters of the society.

In practice, if a society demands maintenance charges without a passed budget or auditors' report, the members have the right to question the validity of such demands. Members can request the society to provide the necessary documents to support the maintenance charges being levied. If the society fails to provide the required documentation, members can challenge the demands through legal recourse.

Real-world Scenarios

• Scenario 1: A cooperative housing society sends out maintenance bills to its members without presenting a passed budget at the general body meeting. Members raise objections and request a copy of the approved budget before making any payments.

• Scenario 2: An auditor raises concerns about the financial irregularities in a cooperative society's accounts during the audit process. In such a case, the society may face challenges in collecting maintenance charges until the audit issues are resolved.

• Scenario 3: A society committee refuses to share the auditors' report with the members, leading to distrust and disputes among the residents regarding the validity of maintenance demands.

References

• Section 70 of the Gujarat Cooperative Societies Act, 1961

• Rule 77 of the Gujarat Cooperative Societies Rules, 1965