Chapter VIII PROPERTY AND FUNDS OF SOCIETIES

A society registered under this Regulation may acquire movable or immovable property on free-hold or lease basis, from out of its funds or donations or grants or loans obtained, in accordance with its bye-laws.

All property, movable and immovable belonging to a society, whether acquired before or after its registration, if not vested in the trustees, shall vest in the society, and any such property may be referred to as the property of such society in any legal proceedings: Provided that in case of a housing society or a resident welfare association registered as a society for the operation, management and maintenance of facilities for the residents or civic amenities of any defined area, the property may vest in the members or their successor-in-interest who have contributed for acquisition of such property: Provided further that where a society accepts a gift or donation of money or property of any other kind from any person or institution for a specific purpose, it shall use the money or such property gifted or donated or any part thereof only for the purpose for which it has been so gifted or donated and for no other purpose.

1. (1) A society registered under this Regulation shall be competent to sell, transfer or alienate any of its immovable properties subject to the following, namely:––
   • (a) in case the immovable property is acquired from the Government or any of its instrumentalities or a municipal body or District panchayat or gram panchayat or any other authority, with the prior permission of that Government in writing;
   • (b) in case the immovable property is acquired by means of a conditional gift or conditional donation from any source, in accordance with such conditions, subject to the prior permission of donor or his authorised representative, and in case the donor is not alive and has left no such authorised representative, with the prior permission of the Registrar in writing;
   • (c) any other immovable property acquired by the society from and out of its own resources or funds or borrowings, with the prior permission of the General Body, by a special resolution.
2. (2) The Governing Body shall determine the reserve price of any such immovable asset, which shall not be less than the applicable collector rates, before its disposal, so as to ensure that it is not sold or transferred at an undervalued consideration.
3. (3) The proceeds from the transfer or sale of any immovable property of the society, conducted in accordance with the provisions of this section, shall be immediately deposited in the account of the society.
4. (4) Where any office bearer of the Governing Body contravenes the provisions of sub-sections (1),
5. (2) and (3), the Registrar shall be competent to take any or all of the following actions, namely:––
   • (i) where the amount of consideration is not deposited in the account of the society within three working days, direct such office bearer to pay interest out of his own pocket at the rate of twenty-four per cent. for the period it remained in his possession but such period shall in no case be more than thirty days;
   • (ii) where the immovable asset has been sold or transferred at an undervalued price, recover the difference assessed on the basis of collector rates from the erring office bearer and deposit the same in the society’s account; and
   • (iii) where the immovable asset has been disposed of without the permission as required under sub-section (1) or without complying with the conditions applicable, recover the amount, along with any additional amount as assessed on the basis of collector rates, from the concerned office bearer and deposit the same with the allotting authority.
6. (5) Where the recovery of any amount is involved from any person in the course of enforcement of sub-section (4), and the persons concerned do not deposit the said amount within the period allowed, the Registrar shall be competent to recover such amount as arrears of land revenue.
7. (6) Nothing under this section shall absolve the office bearer from criminal action. ---

Every society, to such extent and under such conditions, as may be permitted under its bye-laws invest or deposit any portion of its funds not immediately required,––

1. (i) in immovable properties;
2. (ii) in securities of the Government or in National Savings Certificates or other securities of the Government of India;
3. (iii) in the Post Office Savings Banks Account; or
4. (iv) in a special account opened by the society for the purpose in––

1. (a) a Scheduled Bank as authorised or notified by the Reserve Bank of India;
2. (b) a Co-operative Bank situated in the Union territory; or
3. (c) such other mode of investment as may be notified. ---