The Battle Against Coercive Apartment Associations and Financial Irregularities The Battle Against Coercive Apartment Associations and Financial Irregularities

4 months ago

I reside in an apartment complex housing 35 flats where a few owners have formed an association under the Karnataka State Co-operative Society Act of 1960. Despite my consistent contributions to the monthly corpus fund and maintenance, the association insists on an annual payment of 2 lakhs for painting, water, and repairs etc

A recent demand has surfaced, urging residents to contribute towards replacing the lift, valued at 16 lakhs. However, the current lift is operational. Consulting with a third-party vendor revealed issues with the elevator's license renewal.

Government records indicate that the elevator held a license from 2009/2010 to 2020 with the DEPARTMENT OF ELECTRICAL INSPECTORATE, Government of Karnataka. Safety inspectors highlight the need for minor fixes, but the existing vendor's AMC company failed to renew the license.

Despite the Owners Association's lack of objections, a subset of individuals is pressuring me with notices and penalties to purchase a new lift, even influencing tenants to apply pressure.

Complicating matters, the apartment lacks an occupancy certificate (OC), yet new vendors are being invited for procuring and installing a new elevator, posing a serious violation and endangering residents' lives.

Adding to the complexity, maintenance funds have been collected for ten years without any financial audits.

Recently, I discovered a high court judgment questioning the legitimacy of operating an apartment association under the KSCA 1960:

Chitramala Land and Flat Owners vs. Government of Karnataka (WP No. 23674 of 2021 C/W WP No. 99 of 2021).
Mr. Hari Yogendra Tripathi vs. State of Karnataka on 21 November 2022 (WP No. 1685 of 2022 C/W WP No. 16654 of 2021 WP No. 293 of 2022).
VDB Celadon Apartment Owners Association vs. Mr. Praveen Prakash (November 06, 2019).

In light of these challenges, I seek guidance on the legal avenues available to serve notice, dissolve this association, and potentially pursue legal action against those responsible.

Legal Counsel Vidhikarya

Responded 4 months ago

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A.Dear Client,
Under sub-section 1(b) of Sec,70 of the Karnataka State Co-operative Society Act, Notwithstanding anything contained in any law for the time being in force, if any dispute touching the constitution, management or the business of a co-operative society arises between any member, past members or persons claiming through a member, past members or deceased member, or sureties of members, past members or deceased members and the society, its committee or any officer, agent or employee of the society and as per SS.3 of Sec70 of the Act, if any question whether a dispute referred to the Registrar under this section is or is not a dispute touching the constitution, management or the business of a co-operative society, the decision thereon of the Registrar shall be final and shall not be called in question in any court. A reading of Section 70 of the Act makes it very clear that sub-section (1) of Section 70 deals with the parties to the disputes, whereas, sub-section (2) deals with what a dispute is and sub-section (3) states that if any question arises where a dispute referred to the Registrar under the Section is a dispute or not. Given the above proposition of governing law, a mass complaint outlining all the grievances may be made before the Registrar of the Society calling for a discreet inquiry or investigation into the affairs and function of the Society to resolve all these issues.
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