Appeal Dismissed as Society Levied Maintenance on Square-Foot Basis Without Transparency

Vatsala Niwas Co-operative Housing Society Pvt. Ltd. Vs Poonam Soni (Maharashtra State Co-Operative Appellate Court, Mumbai)

The appeal was filed against the order dated 28.04.2025 passed by the Co-operative Court, Mumbai, granting interim relief in favour of the disputants in a dispute concerning maintenance charges levied by a co-operative housing society.

The first disputant owned Unit No. 201 in the appellant society, while the second disputant, a private limited company, occupied Unit No. 203. The disputants alleged that the society was issuing maintenance bills containing arbitrary and unexplained charges and was levying maintenance on the basis of the area of the premises instead of on a per-unit basis, contrary to the statutory framework and settled legal position. Despite repeated requests seeking a detailed break-up and calculation of the charges, the society failed to provide satisfactory explanations or supporting documents.

The disputants further pointed out that the maintenance bill dated 11.12.2023 for Unit No. 201 showed no arrears, whereas the subsequent bill dated 21.03.2024 suddenly reflected arrears of ₹15,33,112 without any explanation. They also stated that they had already paid substantial amounts towards regularization and related obligations of the society, yet additional demands continued to be raised without transparency. Consequently, they approached the Co-operative Court.

The Trial Court granted interim relief by restraining the society from recovering ₹17,26,422 from the disputants in respect of Unit No. 201 until disposal of the dispute. It also restrained the society from levying maintenance charges on a square-foot basis and directed it to levy charges in accordance with the Government of Maharashtra order dated 29.04.2000. The society was further directed to provide complete break-up, calculations, and accounts supporting its claim of ₹15,33,112 within three months. The disputants were directed to pay regular maintenance charges calculated on a per-unit basis and any outstanding maintenance dues, failing which the society would be at liberty to take action in accordance with law.

Before the Appellate Court, the society contended that it had already supplied all relevant information through its letter dated 30.03.2024 and explained that earlier it had issued separate supplementary bills towards occupation certificate (OC) expenses, which were later merged into the regular maintenance bills. It also relied on documents showing payments made towards obtaining the occupation certificate, structural repairs, waterproofing, and other expenses.

The Appellate Court found that the relied-upon letter was actually dated 30.03.2023 and merely listed documents without providing any itemized break-up of the disputed demand. It observed that while the earlier maintenance bill showed no arrears, subsequent bills reflected substantial arrears without explanation. It also noted that the society failed to explain why arrears were raised only for Unit No. 201 and not for Unit No. 203, although both belonged to the disputants. Despite possessing all relevant records, bills, and minutes of meetings, the society failed to produce documents explaining the basis of the arrears or to file a reply before the Trial Court.

The Court considered the judgments relied upon by the society relating to the doctrine of necessity, acquiescence, laches, and the corporate status of co-operative societies, but held that none of them assisted the society on the issues involved in the present appeal.

The Appellate Court concluded that the disputants had established a prima facie case, that the balance of convenience lay in their favour, and that refusal of interim protection would cause irreparable loss. It further held that the Trial Court had properly considered the facts and documents, and that its order was legal and required no interference. Accordingly, the appeal was dismissed, with parties directed to bear their own costs.

FULL TEXT OF THE JUDGMENT/ORDER OF MAHARASHTRA STATE CO-OPERATIVE APPELLATE COURT, MUMBAI

The present Appeal from Order has been filed against the impugned Order dated 28.04.2025 passed below Exh.5 by the Ld. I/c. Judge, Co-operative Court No. II, Mumbai in dispute No. CC/II/313/2024.

2. For the sake of convenience, the parties are referred to as in the original dispute.

3. The brief facts of the case are as under:-

The Original Disputant No.1/Respondent No.1 is an individual holding Unit No.201 in the Original Opponent/ Appellant Society which is registered under the provisions of the Maharashtra Co­operative Societies Act, 1960 (in short “MCS Act”). Disputant No.2 / Respondent No.2 is a Private Limited Company registered under the provisions of the Indian Companies Act, 1956 and carrying on its business through its Directors in the Unit No.203. It is alleged that the dispute arose when the Opponent Society began issuing maintenance bills containing charges which were arbitrary, unexplained and lacking in transparency. It is the case of the Disputant that the Society had adopted a method of levying maintenance charges on the basis of the area of the premises rather than on a per-unit basis, which is contrary to the settled legal position and statutory framework governing co­operative housing societies in the State of Maharashtra. The Disputants repeatedly requested the Society to provide a break-up of the charges being levied upon them. Despite repeated attempts, the Disputants’ efforts seeking details regarding the calculation of maintenance charges through correspondence with the Society remained unsuccessful. The Society failed to provide any satisfactory explanation or supporting documents. The absence of transparency in the billing process created serious concerns regarding the legality and correctness of the amounts demanded by the Society.

4. Further, the maintenance bill dated 11.12.2023 issued by the Society did not reflect any arrears in respect of Unit No.201. However, in the subsequent bill dated 21.03.2024, the Society suddenly claimed alleged arrears amounting to Rs.15,33,112/- in respect of the same unit. It is averred that the Disputants had already paid substantial amounts to the Society including payment of Rs.36,44,986/- and Rs.37,90,680/- towards expenses relating to the regularization and other related obligations of the Society. However, despite having received these substantial payments, the Society continued to raise additional demand without providing a transparent explanation of the basis on which such demands were calculated. Therefore, the Disputants were constrained to file a dispute before the Co-operative Court seeking appropriate reliefs in respect of maintenance charges being levied and substantial arrears without explanation by the Society.

5. The Opponent Society was served with the summons. The Opponent Society appeared through its Advocate.

6. After hearing the parties and considering the pleadings and the documents placed on record, the Ld. Trial Judge allowed the application (Exh.5) filed by the Disputants and restrained the Opponent Society, its managing committee, agents, servants from claiming / recovering an amount of Rs.17,26,422/- from the Disputants towards their Unit No.201 till the decision of the dispute. Also, by the said order the Opponent Society, its managing committee, agents, servants are restrained from levying maintenance charges on square feet basis and are directed to charge maintenance charges in accordance with order dated 29.04.2000 issued by Government of Maharashtra till the decision of the dispute. Further, the Opponent Society, its managing committee, agents, servants are directed to provide all break-up /calculations /accounts in respect of their claim of Rs.15,33,112/- for Unit No.201 within 3 months from order and the Disputants are directed to pay outstanding maintenance dues if any and regular maintenance bill calculated on per unit basis, failing which the opponent Society is at liberty to take necessary action against the Disputant as per the provisions of law.

7. Being aggrieved by the said order the present appeal is filed.

8. Following points arise for my consideration:

REASONS

As to Point Nos.1 to 3 :-

9. Heard the Ld. Advocate of the Appellant/ Opponent Society and the Respondents / Disputants.

10. It is alleged by the Disputants that the maintenance was being charged on a ‘sq. ft. basis’ and not ‘unit wise basis’ which was contrary to the statutory order dated 29.04.2000 and also the binding precedent of the Hon’ble Bombay High Court in ‘Venus CHSL Vs. Dr. J.Y. Detwani’. Admittedly, the maintenance bills produced by the Disputants show that the maintenance was being levied on a ‘sq. ft. basis’ which is admittedly contrary to the Statutory Order dated 29.04.2000.

11. It is alleged by the Disputants that the Society failed to provide any proper breakup or calculations explaining how arrears of Rs.15,33,112/- were suddenly shown in respect of Unit No.201. The maintenance bill dated 11.12.2023 showed no arrears whereas the subsequent bill dated 21.03.2024 suddenly reflected the disputed amount without any explanation or supporting details. Despite repeated requests made by the Respondents through letters and emails, the Society did not provide any proper clarification or supporting records for charges raised. Society failed to provide any proper explanation or supporting documents to justify the sudden appearance of Rs.15,33,112/- as arrears for Unit No.201 when earlier maintenance bill issued just a few months prior reflected no arrears. The Society also failed to rectify the defects pointed out in the maintenance bills issued to the Respondents.

12. On the other hand, the Appellant / Society has contended that by its letter dated 30.03.2024 it had furnished all the information, documents and basis for bills raised by the Appellant and as sought by the Respondents. The Society has placed reliance on the said letter.

13. However, perusal of the said letter shows that it is dated 30.03.2023 and not 30.03.2024. Further, it contains the list of documents such as-old CC and original building plan, structural audit report, summary of various bills, various SGM minutes etc. but does not show the itemized break-up of the amounts demanded from the Disputants.

14. Perusal of the maintenance bills for Unit No.201 for the period of 01.10.2023 to 31.12.2023 does not show any arrears but the bill for the period from 01.01.2024 to 31.03.2024 and 01.04.2024 to 30.06.2024 shows the amount of the said arrears. On the contrary, the bills of Flat No.203 for the said period does not show any arrears.

15. It is the contention of the Appellant that the Ld. Trial Court failed to appreciate that the monies recoverable by the Appellants from the Respondent have been due and payable all along. The Appellant initially were raising two bills, one for the maintenance and the other as a supplementary bill for amounts due towards OC. However, when the process was complete and all members except the Respondent herein had paid their dues, the Appellants were advised to not continue to raise two separate bills and add the amounts due and payable towards OC as raised in the supplementary bills, in the main bill raised towards maintenance. In my considered view, the Society could have conveniently produced the copies of such bills which it failed to do so. Even, the Society has failed to explain as to why the arrears were levied on one flat owned by the Disputants and not the other. Further, in the reminder letter dated 29.07.2024 sent by the Society to the Disputants for Flat No.201/203, it is mentioned that the outstanding amount of Rs.17,26,422/- is with respect to the Disputant’s share of the charges including contribution to the maintenance charges with interest. It has not been clarified that the said charges were for arrears due towards OC.

16. The Society has further relied upon various bills and payments made by the Society to the Brihanmumbai Municipal Corporation (in short SMC’), Architects, Structural Consultants, Civil contractors etc. towards obtaining Occupation Certificate, civil work expenses, structural repairs, water proofing etc., which I believe are not disputed. The Appellant / Original Opponent has though filed a huge compilation of supporting documents to demonstrate the bills paid by the Society but not a single document is filed on record to clarify as to why the arrears are shown for one flat and why no bifurcation was given, though the Society is in possession of all the bills, minutes of meetings etc. which it could have conveniently produced before the Trial Court as well as this Court. No explanation has been given as to what prevented the Society from producing those documents. Furthermore, the reply to Exh.5 was not filed by the Society in the Trial Court. They are silent as to what prevented them from filing a reply.

17. The Appellant herein has relied upon a huge number of judgments of the Hon’ble Superior Courts. However, I shall more specifically deal with only the judgments the relevance of which was demonstrated by the Ld. Advocate of the Appellant.

18. The Opponent Society relied upon the judgment in the case of Babasaheb Wasade & Ors. Vs. Manohar Gangadhar Muddeshwar & Ors. Reported in 2024 LiveLaw (SC) 59 to explain the Doctrine of Necessity. There is no dispute as to the doctrine as explained by the Hon’ble Supreme Court but it fails to help the case of the Appellant.

19. The case of Chairman, State Bank of India and another Vs. M.J. James, (2022) 2 Supreme Cowl^– Cases 301, is relied upon by the Appellants on the point of acquiescence and laches. Though, the said ruling which is under Service Law and Administrative Law has no direct bearing on this case, but if only the point of acquiescence is to be considered the same can be considered by the Trial Court at the time of trial of the dispute.

20. In the case of Daman Singh and others Vs. State of Punjab and others, (1985) 2 Supreme Court Cases 670, relied upon by the Appellant, the Hon’ble Supreme Court has observed on the point of amalgamation of the societies and the co-operative societies having status of a body corporate which is an admitted position today. However, the said case law also is not of much help to the case of the Appellant.

21. Thus considering the above, I am of the considered view that the Disputants have made a prima facie case in their favour and the balance of convenience lies in their favour. If the temporary injunction as prayed is not granted it will cause irreparable loss to the Disputants. Hence, Point Nos.1 to 3 are answered in the affirmative.

As to Point Nos.4 and 5 :-

22. I have perused the impugned Order dated 28.04.2025 passed below Exh.5 by the Ld. Trial Judge who has in detail dealt with the relevant facts and the corresponding documents. I find no infirmity in the said order. The impugned order is legal and correct and warrants no interference by this Court. Accordingly, I answer Point Nos. 4 in the affirmative and Point No.5 in the negative.

As to point No.6: –

23. Having answered Point No.4 in the affirmative and Point No.5 in the negative, in answer to Point No.6, I proceed to pass the following order: –

ORDER

1. O.No.49 of 2025 is dismissed.

2. Parties to bear their own cost.