Legal Scrutiny - Apartment Association is collecting 1.35Crore for Painting Cost
5 months ago
Our apartment Association, registered under The Karnataka Societies Registration Act of 1960, is urging residents to make a one-time payment of Rs. 24,000 for painting charges, aiming to collect Rs. 1,34,40,000/- from the 560 flats in the complex. I am seeking clarification on the legality of the following aspects:
Can the association demand Rs.24,000 for painting if not all residents approve?
Is it legal to collect Rs. 1,34,40,000 for the project if the association's bank account is Treasury?
A.Dear client,
The office bearer is doing all this with the power and mandate that he received from the residents post his selection or election. That means he is already having consent from you all. Still if you think that what he is doing is arbitrary then you all can challenge it under the purview of the society byelaws and seek AGM for the same.
The office bearer is doing all this with the power and mandate that he received from the residents post his selection or election. That means he is already having consent from you all. Still if you think that what he is doing is arbitrary then you all can challenge it under the purview of the society byelaws and seek AGM for the same.
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A.Dear Client,
The Supreme Court in the case of J.N. Chaudhary Vs. State of Haryana (2014) 11 SCC 249 held that in judging the functioning of a Cooperative Society where the democratic process of election is adopted in pursuance to the Rule and a collective decision is taken by a majority of the members of the entire body expressed in terms of a resolution passed by the General Body, then the same cannot be ignored and bypassed at the instance of a handful of members. It was held that if a decision is taken by the majority in terms of the Rule, it cannot be overruled by the minority even on the grounds of mala fide or fraud unless established through strict proof of evidence. It was reiterated that mala fide is always easy to allege but difficult to prove. So, in the prevailing situation, a mass petition/complaint against the arbitrary demand contrary to the provision of Sec.3 of the Karnataka Societies Registration Act of 1960 may be filed before the Registrar or Dy. Registrar of Societies who is empowered to conduct an inquiry into a mass petition under Sec.25 of the Act and pass an order as deemed fit and proper u/s.26 of the Act including cancellation of registration of society u/s.27 of the Act. An order of the Registrar under sub-section (1) of Sec.26 shall be final unless it is set aside by the Karnataka Appellate Tribunal on an appeal filed before it within sixty days from the date of communication of the order.
The Supreme Court in the case of J.N. Chaudhary Vs. State of Haryana (2014) 11 SCC 249 held that in judging the functioning of a Cooperative Society where the democratic process of election is adopted in pursuance to the Rule and a collective decision is taken by a majority of the members of the entire body expressed in terms of a resolution passed by the General Body, then the same cannot be ignored and bypassed at the instance of a handful of members. It was held that if a decision is taken by the majority in terms of the Rule, it cannot be overruled by the minority even on the grounds of mala fide or fraud unless established through strict proof of evidence. It was reiterated that mala fide is always easy to allege but difficult to prove. So, in the prevailing situation, a mass petition/complaint against the arbitrary demand contrary to the provision of Sec.3 of the Karnataka Societies Registration Act of 1960 may be filed before the Registrar or Dy. Registrar of Societies who is empowered to conduct an inquiry into a mass petition under Sec.25 of the Act and pass an order as deemed fit and proper u/s.26 of the Act including cancellation of registration of society u/s.27 of the Act. An order of the Registrar under sub-section (1) of Sec.26 shall be final unless it is set aside by the Karnataka Appellate Tribunal on an appeal filed before it within sixty days from the date of communication of the order.
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