CHS face action for charging extra Transfer Premium/Fees for Transfer of Flat in Housing Society
CHS face action for charging extra Transfer Premium/Fees for Transfer of Flat in Housing Society
Deputy registrar of co-operative societies holds that the office-bearers failed to comply with its earlier order to refund excess transfer fees collected, bars them from society committee for five years
They were allegedly found to have levied transfer fees above Rs 25,000, which is against the norms. Action was also initiated for contempt of the deputy registrar of co-operative societies’ orders as the amount collected over and above Rs 25,000 had allegedly not been refunded.
Dy. Registrar’s office had on June 20, 2022 written to the society, calling upon them to furnish the details about the issues raised in the complaint. In response, the society vides its letter dated July 26, 2022 had clarified that they have charged Rs 25,000 only as transfer charges. The order further stated that one of the complainants, during the proceeding, had produced evidence of being charged Rs 50,000 by the society as infrastructure fee levied on multiple flat transferor/transferees. It added that based on the evidence, the office held that the society had been illegally charging extra fees.?
The deputy registrar further observed that the said office-bearers are performing the duties of the society in violation of the approved bylaws of the society and in violation of the MCS Act and Rules. The official held that this act put the residents of the society at disadvantage at large. The deputy registrar then issued a show-cause notice to the office-bearers.
The deputy registrar held that the office-bearers failed to comply with its earlier directions. In view of this, he ordered, “The chairman, secretary and treasurer of xxxxxxxxxxxxxxxx Co-op Hsg. Soc. Ltd, xxxxxxxxxxxxxxxxxxxxx are hereby barred/ ineligible to be re-elected as members of any committee until the expiry of one term of the committee, and that they shall not be eligible to be appointed or be re-nominated as per this order.”
The deputy registrar of co-operative societies had directed the society office-bearers to refund the extra amount (transfer fees) collected at the time of transfer of flat. As the office-bearers did not refund the amount, it amounts to an offence of contempt of registrar directions, and therefore, the deputy registrar has removed the office-bearers from the committee and disqualified them from contesting the election for one term of 5 years.
?Violating the rules and overcharging transfer fees under any head is a criminal offence and the office-bearers can even be booked for ‘extortion’ under the Indian Penal Code.
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MCS Rules
As per the government’s direction under Section 79A of the Maharashtra Cooperative Societies Act, 1960, the society cannot charge transfer fees in excess of Rs 25,000. There have been instances in the past where the police registered FIRs and booked the office-bearers for demanding more than the said amount.
The Bombay High Court too has passed orders to refund the amount collected in excess of Rs 25,000 under any name at time of transfer of flat with interest. The bylaws also prescribe the same. However, societies, in order to generate revenue and to subsidise the maintenance charges, recover the additional amount in the name of donation, society major repairs fund, welfare fund, etc. This is not a good practice and office-bearers should not get this type of resolution passed.
Update
By-law No. 38 of the 2013 By-laws of the Maharashtra Model Society, 1960, which the Maharashtra government released via a circular dated August 9, 2001, the premium?transfer fee in the housing society?cannot exceed Rs. 25,000.
The legality of paying?transfer fees of society?has recently been put to the test by the courts on multiple occasions. For example, in the matter of Bhartiya Bhavan Cooperative Housing Society Limited and the others vs Krishna H Bajaj and Others, the Bombay High Court upheld the society’s appeal (Writ Petition No. 1094 of 2004, decided on February 17, 2010), disqualifying the flat buyer from receiving a refund of the Rs 9,63,000 voluntary contribution they paid to the society at the time the apartment was sold.
During the appeal hearing before the Bombay High Court, the unit buyer argued that the voluntary contribution was nothing more than the?transfer fees of society?had asked and that the flat owner was obligated to pay. However, the Bombay High Court noted that the buyer of the unit, in that case, knowing their exact legal status, agreed to pay the society Rs 9,63,000 in transfer fees under the guise of a voluntary donation.
“The Respondent's dispute relating to declaration that the demand and collection of the amount of Rs.9.63 lakhs was illegal and for an order and decree for repayment of that amount with interest at 24% p.a from the date of payment by her till the date of realisation and other incidental reliefs is under a contract which was void from the inception being forbidden by the Law of Co-operation?“
CA Harshad Shah, Mumbai [email protected]
Lean Six Sigma Green Belt | Product Owner | Geospatial Engineer | Business Analyst | Spatial Analysis
11 个月Great post, just as what I am facing now. I am trying to pay the amount now to avoid delay in transfer and after I am a member of society will raisi this issue. But on top of the exceeded amount society is asking for an letter stating that the amount paid is voluntary. What can be done?