Short Answer

Yes, the society can penalize the owner if they use the flat for commercial gain without informing the society.

Detailed Explanation

Section 123 of the Gujarat Cooperative Societies Act, 1961 empowers the society to take action against a member who contravenes the provisions of the Act, Rules, or by-laws of the society. This means that if an owner uses their flat for commercial purposes without informing the society, they are violating the rules of the cooperative society. In practice, the society can levy penalties on the owner for such unauthorized commercial use. The society may also take legal action against the member as per the provisions of the Act.

Rule 56 of the Gujarat Cooperative Societies Rules, 1965 provides guidelines for imposing penalties on members who breach the society's rules. If the society's by-laws prohibit the commercial use of flats without prior approval, and the owner fails to comply, the society can enforce penalties as per the prescribed rules. For example, the society may impose fines, suspend certain privileges, or even take legal recourse to stop the unauthorized commercial activities.

In a real-world scenario, if a flat owner in a cooperative society starts renting out their flat for commercial purposes without informing the society, the society can initiate disciplinary proceedings against the owner. The society may issue a notice to the owner, conduct a hearing, and impose penalties as per the by-laws. If the owner continues the unauthorized commercial activities, the society may escalate the matter to higher authorities or take legal action to enforce compliance.

Another practical example could be if a flat owner converts their residential flat into a commercial office space without seeking approval from the society. In such a case, the society can penalize the owner for violating the cooperative society's regulations. The penalties imposed can vary based on the severity of the violation and may include monetary fines, restrictions on certain privileges, or even legal action to ensure compliance with the society's rules.

References

• Section 123 of the Gujarat Cooperative Societies Act, 1961

• Rule 56 of the Gujarat Cooperative Societies Rules, 1965