Dy registrar of Co-op Societies observes he was not provided a share certificate; manipulated statements were provided by society with no clarification of details of opening balance, etc
Rohan and Geeta Kadam, owners of the flat in Empire Residency Co-operative Housing Society Limited, at Andheri
The Deputy Registrar of Cooperative Societies, K/E ward, in a recent, and rare, order, has stalled the recovery proceedings against a flat owner in a housing society, for non-payment of society dues up to R4.91 lakh. Of his many observations, one was that the flat owner was not provided a share certificate, and manipulated/fraudulent statements were provided by the society with no clarification of details of opening balance. Consequently, the Deputy Registrar rejected the society's plea to carry out the recovery proceeding under section 101 of Maharashtra Cooperative Societies Act (MCSA).
The office bearers of M/s Empire Residency Co-operative Housing Society Limited, located in Andheri (E), had approached the Deputy Registrar, and requested recovery proceedings against Rohan Kadam and his mother Geeta, owners of flat no 301, for non-payment of society dues in February 2018.P B Satpute, Deputy Registrar, had heard all the parties concerned between March 2018 and January 24, 2019. In the hearings the society alleged that the said member was not paying the society dues, and had been availing all the facilities within it (lift, parking, water etc); and due to nonpayment of society dues till February 1, 2017, they had to recover R4.91 lakh.
'Society formed fraudently'
Rohan Kadam, countered the society claims, stating that it was allegedly formed fraudulently without verification in May 2012 with a seven member application, while the minimum requirement by law is of 10 members. Certain members became self-declared office bearers of the society without going through the election process as per the bye laws, he claimed. Kadam even claimed that he and his mother have till date not been provided the share certificate after the formation of the society, for their house admeasuring 1,050 sq feet (carpet). Kadam further alleged, "They (society) started billing odd amounts as maintenance to the members without any resolutions or intimations. Maintenance bills were illegally hand written and signed by a non-member. For a long period bills I received were hand prepared and the amounts on them looked forged/imaginative." He also claimed that maintenance bills were prepared without actual area wise breakup of each flat, without demarcation or allotment of parking slots, and without clear demarcation of the common areas.
"Expenditure was passed illegally without any resolutions or AGMs or SGMs. There were no attendance registers, ledgers, minutes of meetings, no audited statements published. In fact, there was no auditor appointed till 2014. The last audited balance sheet shows the secretary himself as a defaulter," Kadam said. Kadam claimed they had written numerous times to the society to provide them the official documents for verification, but they did not bother to do so. "As per the Dy Registrar's order, we are not supposed to pay the R4.91 lakh that the society claims to recover from us, but we are willing to pay hereafter monthly dues, provided the society gives us the legitimate break up for maintenance, and allows us to use the facilities within the society (common toilet on third floor, demarked parking area etc)," he said.
The other side
Harbhajan Bhurjee, chairman of M/s Empire Residency Co-operative Housing Society Limited, rubbished the allegations by the Kadams against the office bearers. "It is an unfortunate order passed by the Deputy Registrar of K/E ward. We have hired a new lawyer and have decided to challenge this order within the stipulated two months time period, " said Bhurjee.
He added, "We have no personal issue with Rohan Kadam or his family. We have been charging each flat owner R7,000 per month towards maintenance, and our books of accounts are clear. You may check our bank records and see that no payment has been coming from the Kadams for years, which is unfair." He said the society was formed as per the norms and the Kadams are one of the members. He added, "We have all the documents which we can produce before any court. The worst is that the flat was worth R40 lakh when it was bought, and today the price of each flat has gone above R3 crore, but without proper maintenance and repairs, other residents continue to suffer, due to non-payment of dues by a single flat owner."
Advocate Vinod Sampat, a housing society expert said, "This is a rare order. By no stretch of imagination can issuance of share certificate by the society to its members be linked to the charges payable by a member to the society. As regards break up of charges, while presenting the application for recovery of dues, the various decisions taken by the society to recover money from members have to be provided to the member against whom recover proceedings are being initiated, along with the copy of the general body's resolution, to recover such dues. This is a mandatory requirement for initiating action against a defaulting member under section 101 of the Maharashtra Co-operative Societies Act."
Some of the Deputy Registrar's observations before passing the order
- The applicant society has not provided any share certificate to Kadam. Therefore, Managing Committee cannot demand any maintenance or any other charges.
- The builder has already taken Rs 2,500/- from the respondent towards share value and registration of society. However, the builder has not conveyed the plot to the society and not provided the shares to the respondent. Therefore, the Society does not have the right to demand any maintenance.
- Manipulated/fraudulent statements provided by the society with no clarification of details of opening balance.