Co-Op HSG Society cannot charge Transfer fees in excess of permissible fees as donation

Alankar Sahkari Griha Rachana Sanstha Vs Atul Mahadev Bhagat & Anr (Bombay High Court)

When the persons come together with common object of housing, after formation of a Cooperative Society, they are governed under rules and bye-laws of Maharashtra Cooperative Societies Act. So far as the members are concerned, the Cooperative Housing Society can collect or increase its funds only by legally permissible charges or fees. The Society is not expected to indulge into profiteering business from the members and if such amount is earned, then it is taxable under the law. There is no bar for any member to pay donation to the Society, however, it should be voluntary without any compulsion and coercion. No manner the transfer fees can be charged under the pretext of donation.

FULL TEXT OF THE HIGH COURT ORDER / JUDGMENT

In this Writ Petition, the order dated 12^th December, 2013 passed by the Member, Maharashtra State Cooperative Appellate Court, Mumbai Bench at Pune thereby directing the respondents to pay an amount of Rs.4,75,000/- with interest is challenged.

2. Respondent nos. 1 and 2 have filed Dispute No. 398 of 2005 before the Cooperative Court, Pune for recovery of amount of Rs.6,98,740/- alongwith interest, which the disputants have paid to the petitioner-Housing Society. The Cooperative Court has passed an order dated 1^stOctober, 2007 directing the petitioner-Society to pay the disputant amount of Rs.5,00,000/- along with interest @ 11% from 29^thDecember, 2005 till the realization of claim. The petitioner-Society challenged the said order by filing Appeal No. 02 of 2008 before the Maharashtra State Cooperative Appellate Court, Mumbai Bench at Pune, which was partly allowed and the Society was directed to pay Rs.4,75,000/-, instead of Rs.5,00,000/-, with 11% interest from 29^th December, 2005 till realization of the amount. The said order is challenged by the petitioner-Housing Society. The respondents/original disputants were alloted plot No. 59 during the membership. Due to some violation of the conditions, the Society threatened to dispossess so the respondents filed Dispute No. 223 of 2000, which was compromised by filing consent terms and they agreed to deposit Rs.50000/- by way of security for completion of construction of the bungalow within three years. Thereafter, the respondents were in dire need of the money and therefore, they decided to sell the flat to third party and for the sale, they agreed to pay transfer fees of Rs.25,000/- to the Society. However, they alleged that the Society demanded Rs.5,00,000/- for regularizing the transfer. Therefore, the respondents, under pressure, paid Rs.5,00,000/- by issuing two demand drafts of Rs.2,50,000/- each on 27^th April, 2005. After selling the plot, they sent a letter of demand on 4th July, 2005 which was replied denying such liability of payment and so the respondents filed the dispute before the Cooperative Court on 29^th December, 2005.

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