Short Answer

Yes, as per the Gujarat Cooperative Societies Act, 1961 and Rules, the society needs to create a deposit or escrow for member refunds if redevelopment is cancelled.

Detailed Explanation

Section 63 of the Gujarat Cooperative Societies Act, 1961 states that in case of cancellation of redevelopment, the society shall refund the amounts received from its members. This refund is to be made within the time specified in the Act or Rules. The society is required to maintain a separate account for such refunds and ensure that the funds are readily available for repayment to the members.

Rule 155 of the Gujarat Cooperative Societies Rules, 1965 further elaborates on the procedure for refunding the amounts to the members in case of redevelopment cancellation. It mandates that the society shall create a deposit or escrow account specifically for member refunds. This account should be maintained separately from other society funds and should only be utilized for the purpose of refunding the members.

In practice, this means that if a redevelopment project is cancelled, the society must promptly initiate the refund process to ensure that the members receive their amounts back. By creating a dedicated deposit or escrow account, the society can demonstrate transparency and accountability in handling member funds, thereby safeguarding the interests of the members.

Real-world Scenarios

• Scenario 1: XYZ Cooperative Housing Society decides to cancel the redevelopment project due to unforeseen circumstances. As per Section 63 of the Act, the society initiates the refund process and transfers the refunded amounts to the designated deposit account for member refunds.

• Scenario 2: ABC Cooperative Society faces financial challenges leading to the cancellation of the redevelopment plan. Rule 155 of the Rules mandates the society to maintain a separate escrow account for member refunds, ensuring timely repayment to the affected members.

• Scenario 3: LMN Cooperative Society successfully completes the redevelopment but later faces legal issues resulting in project cancellation. The society utilizes the deposit account created for member refunds to reimburse the members as per the legal requirements.

References

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

• Rule 155 of the Gujarat Cooperative Societies Rules, 1965: Official PDF