Short Answer

The society compensates members if it generates a surplus from maintenance by distributing the surplus among the members in proportion to their respective contributions towards maintenance expenses.

Detailed Explanation

Section 73 of the Gujarat Cooperative Societies Act, 1961 deals with the distribution of surplus. It states that any surplus arising from the maintenance fund of the society shall be distributed among the members in proportion to their respective contributions towards maintenance expenses. This means that if the society collects more funds than required for maintenance, the excess amount will be shared among the members based on their individual contributions.

In practice, this provision ensures transparency and fairness in the distribution of surplus funds among the members. It prevents any misuse or misappropriation of surplus funds by the society's management. Real-world scenarios could include situations where the society efficiently manages its maintenance expenses, resulting in a surplus at the end of the financial year. In such cases, the surplus amount is distributed equitably among the members according to their financial contributions.

A step-by-step process for compensating members from the surplus generated from maintenance would involve:

• Calculation of total maintenance expenses incurred by the society.

• Determination of the total funds collected from members for maintenance.

• Calculation of the surplus amount (if any) remaining after meeting all maintenance expenses.

• Distribution of the surplus among members based on their respective contributions towards maintenance expenses.

Practical Examples

• Scenario 1: A cooperative housing society collects maintenance fees from its members for various services. At the end of the year, it is found that there is a surplus amount of Rs. 50,000 in the maintenance fund. As per Section 73 of the Act, this surplus will be distributed among the members based on their contributions towards maintenance expenses.

• Scenario 2: In another case, a cooperative society manages to reduce maintenance costs through efficient budgeting and management. This leads to a surplus of Rs. 1,00,000 in the maintenance fund, which is then distributed among the members in proportion to their contributions.

Reference

• Section 73 of the Gujarat Cooperative Societies Act, 1961: Official PDF