Legal Question in Consumer Law in India

Unequal recovery schedule of Painting expenses

Background

Our society, having 10 – shops, 16 – 1BHK, 42 – 2BHK and 10 – 3BHK, has done building painting work against which an advance amount of Rs.500/- per month (instead of fixing proportionate higher amounts for higher flat areas during advance collections of painting fund.) from all shops and flats collected towards ‘painting fund’, as per the resolution passed earlier.

Before collecting the full budgeted/expected exp., painting work started and completed, utilizing the funds collected and other funds available with the society and payments to the contractor is made.

Thereafter, in the AGM this matter was discussed resolved that “Then painting fund charges were discussed and decided to allocate the cost of painting per flat, based on the area and to recover the balance payable as per the agreed schedule by all members. All members, irrespective of the size of the flat/shop, will pay Rs.500/- per month till March 2013 and the balance payable, if any, will be scheduled for another 24 months ending 31/3/2015”.

Subsequently, the society, based on the actual exp. and area of flats and shops, has calculated the balance payable (area in sq.ft x cost per sq.ft.) by each member. Accordingly, society started deducting Rs.500/- p.m. from all members. 1BHK/shops members have fully repaid their balance by April 2013, whereas 10 shops should get a refund of Rs.172,100/- as on March 2013. As on date, society is still recovering Rs.500/-p.m. from 2BHK and 3BHK members without rescheduling repayment so as to complete the recovery by end 31/3/2015. If this present recovery schedule continues, it will take approx. 2 years for 2BHK and 4 years for 3BHK to fully recover the balance payable as on March 2013.

Request to Society

The painting work of the society has already been completed long back and arrears towards painting exp. is repaid by all 1BHK and shop owners by April 2013. However, 2BHK and 3BHK members are still to pay big amounts and same is to be recovered soonest possible. Society has already been incurred the total expenses towards painting and it is society’s responsibility to recover this amount from the members at the earliest.

However, even after July 2013 there is no decision to this effect and installment of RS.500/- p.m. still continues, that means another 2 (for 2BHK) – 4 (for 3BHK) years will take to fully recover this arrears of painting exp. and requested to immediately treat the painting exp. payable as “Arrears” and this amount to be shown as arrears in the monthly maintenance bill and charge interest till it is fully recovered.

Our apprehension

As majority of the members are from 2BHK and 3 BHK (42+10=52) against minority of shops and 1BHK (10+16=26), is this recovery schedule leading to a scenario where majority of the members (having higher size flats) would pass a resolution against a minority which is a clear oppression on the minority by the majority, whereas actually recovery schedule (start and end dates) should have been equal for all members.

There are lapses in fixing incremental advance payment collection earlier and thereafter unequal recovery installments under the support of resolutions; Society should come forward to rectify the anomaly, considering one of the basic concepts of Co-operative Housing Societies – EQUALITY to all members.

Question

What is the legality of the resolutions passed considering the above facts?

Whether this matter can be taken up with Dy. Registrar of CHS to get this anomaly rectified or not?

Regards/M.A.Viswanathan Nair

mavxmav@rediffmail.com

Asked on 9/20/13, 1:10 am

1 Answer from Attorneys

Fca Prashant Chavan Expert Edge LLP
0 users found helpful
0 attorneys agreed

20.09.2013

Dear Viswanathan,

Byelaw No 69(a)(iii) of the MCS Act and Rules reads :

Expenses on Repairs & Maintenance of the building(s) of the Society : At the rate fixed at the General Body from time to time, subject to the minimum of 0.75 per cent per annum of the construction cost of each flat for meeting expenses of normal recurring repairs.

Byelaw No. 69(a)(viii) of the MCS Act and Rules reads :

Interest on the delayed payment of charges : At the rate fixed under Byelaw No. 72 to be recovered from the defaulter member. Byelaw No. 72 reads : A member shall be required to pay simple interest at such rate as is fixed by the General Body of the Society at its meeting, subject to the maximum of 21 per cent per annum, on the charges of the Society, from the date the amount was delayed till its payment not paid by the member within the period as prescribed by byelaw No. 70 which reads : Every member of the Society shall pay the amount mentioned in the bill / demand notice in full within such period as may be fixed by the Committee.

As is evident from the above, the costs of each category - 1BHK, 2BHK, 3BHK and Shops will differ and hence the rate of 0.25% of the cost for collection of the Building Repair Fund will vary for each category, and from member to member if there is a difference in their carpet areas within each of the categories.

1. The resolutions passed by the Society will have to be examined in the light of the above to determine the extent of adjustments to each individual member's Contribution to Building Repair Fund.

2. An aggrieved member has the right to register his grievance with the Dy. Registrar of Co-operative Housing Societies for amicably redressing and resolving the issue.

Should your Society need any further advice or guidance, please let me know.

Regards,

Read more
Answered on 9/20/13, 6:58 am

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