Short Answer

Yes, a society can take a loan for redevelopment purposes, and the members typically repay it through contributions or levies as decided by the society.

Detailed Explanation

Section 63 of the Gujarat Cooperative Societies Act, 1961 empowers a cooperative society to borrow money for its purposes, including redevelopment. This means that a society can indeed take a loan for redevelopment activities. The society needs to follow the procedures and conditions laid down in the Act and Rules for borrowing such funds. The loan amount, terms, and repayment methods should be decided by the society's general body as per the cooperative society's bylaws.

In practice, when a society decides to undertake a redevelopment project and requires financial assistance, it can approach financial institutions or banks for a loan. The society needs to provide necessary documentation and approvals from the competent authority to secure the loan. The terms of repayment, including the interest rate, installment amounts, and tenure, are usually negotiated between the society and the lending institution.

Real-world Scenarios

• Example 1: XYZ Cooperative Housing Society decides to redevelop its old building. The society general body passes a resolution to take a loan of Rs. 1 crore for the project. The society approaches a bank, submits the required documents, and secures the loan at an agreed-upon interest rate. The members contribute towards the repayment through monthly levies as decided by the society.

• Example 2: ABC Cooperative Society plans to renovate its common areas and amenities. The society obtains a loan from a financial institution after obtaining necessary approvals. The repayment structure is finalized by the society, and members pay their share through monthly contributions as per the decided terms.

• Example 3: LMN Cooperative Society undertakes a complete redevelopment of its premises. The society takes a loan from a cooperative bank and structures the repayment through a combination of one-time contributions and monthly installments from the members.

References

• Section 63 of the Gujarat Cooperative Societies Act, 1961: Official PDF