Short Answer

No, the society cannot use maintenance funds to pay for non-common items like loans to members.

Detailed Explanation

Section 68 of the Gujarat Cooperative Societies Act, 1961 prohibits the use of maintenance funds for purposes other than those specified under the Act. Maintenance funds are meant to cover common expenses related to the upkeep and maintenance of the society's premises and facilities. Using these funds for non-common items such as loans to individual members would be a violation of the Act.

Furthermore, Rule 88 of the Gujarat Cooperative Societies Rules, 1965 provides guidelines on the proper utilization of maintenance funds. It specifies that these funds should only be used for the maintenance, repair, and improvement of the society's property and assets. Any deviation from this prescribed usage would not be in compliance with the rules.

In practice, societies are expected to maintain transparency and accountability in their financial transactions, including the utilization of maintenance funds. Any misuse of these funds for personal or non-common purposes can lead to legal repercussions and penalties for the society and its office bearers.

Real-world Scenarios

• Scenario 1: A cooperative housing society decides to use a portion of its maintenance funds to provide loans to individual members in need. This action goes against the provisions of the Gujarat Cooperative Societies Act, 1961, and Rule 88 of the Gujarat Cooperative Societies Rules, 1965.

• Scenario 2: The society's managing committee diverts maintenance funds to cover personal expenses of the office bearers. This misuse of funds can result in legal action being taken against the committee members for violating the Act and Rules.

Reference

• Section 68 of the Gujarat Cooperative Societies Act, 1961

• Rule 88 of the Gujarat Cooperative Societies Rules, 1965