Query from Mukesh Nagar

Greetings for the day and thank you for the service you provide. My query is regarding distribution of contribution towards major repairs.

Our Society which is carrying out major repairs including plastering, painting , plumbing etc. The society comprises of 3 and 2 bhk flats, located at navi Mumbai Maharashtra  . The bigger ones are almost double the area of the smaller ones.

Still the managing committee is collecting the fund per flat basis and not per sq. ft basis under the pretext of common areas. The Managing committee mostly comprises of members owning 3bhk. Somehow they managed to pass the resolution to collect funds per flat basis. Can you please guide me regarding the laws applicable and is the decision justified according the bye laws.

I haven’t paid my share yet and society has issued me a notice stating they would carry the further action according to the section 101 of MCS act 1960. I am denying to pay the money I just want a fair distribution of the fund based on per sq. Ft basis. What should be my future course of action. Please guide me awaiting your reply.

I C Naik

Manner of deciding Members’ Contribution to society funds/charges is specified in registered bye laws of the concerned housing society. The housing society is registered with the latest available Model released by the Commissioner for Co-operation and Registrar of Cooperative Societies. Housing societies registered with older Model bye-laws have an option to  switch over to the latest Model by undertaking a process called amendment to registered bye-laws as laid down its registered bye laws subject to Section 13 of the MCS Act 1960 read with Rule 12 of the MCR 1961.   Quite critical to making amendment binding to every body just as the original registered bye laws were, are:

(i)                     a proposal to amend the registered bye laws  has been communicated to all Members 14 days before the Meeting of the General Body of the Society, at which it is proposed to be considered,

(ii)                   the resolution is passed by not less than 2/3rd majority of the Members present and voting

(iii)                 the making, alteration or abrogation is Approved for registration and

(iv)                 only after it is Registered by the Registering Authority.

Your housing society appears to be older than at least 17 years and I assume that it’s registered bye laws are based on 1984 Model and has not been replaced by any later Model (2001,2009 or 2014).

Bye Law No 13 of all Models lays down a rule to creating and establishing certain specific Society funds by collecting contributions from its members. The rates at which the members are required to contribute to these funds are laid down. In a housing society having registered bye laws as per  Model 1984 two funds are required to be set up namely (a) The Repairs and Maintenance Fund and (b) The sinking Fund. Rates of Contribution to these funds are to be fixed by the Society in its general body meeting subject to not less than  ¾ % of the value of each flat to  find (a) and not less than ¼% of the flat value (excluding prorate land cost) to fund (b). No provision is found for fixing the rate of the controversial Major Repair fund (one time exercise). As against this lacuna in Model 1984, Bye Law No 13 of subsequent Models (2001,2009 and 2014)  provides as under: Major Repair Fund, as and when required and decided by the General Body at the rates fixed on area basis. Model bye laws bind the members of the Society which has registered it as its bye-laws at the time of registration of the Society or subsequently replaced as aforesaid.  So the Bye Law No 13 of subsequent Models does not bind your Committee or members.

So what’s the Answer?

The managing committee  does not have a power to fix rates of contribution by members, logical. The Committee is executing authority to manage the Society in accordance with Bye Law No 113 extracted below.

“Subject to the direction given or regulation made by a meeting of the general body meeting of the Society, the Committee shall exercise all powers, expressly conferred on it and discharge all functions entrusted to it under the bye-law No. 137.”

In Bye Law No 137 there are listed items of the powers, functions and duties of the Committee. Item No 2 is relevant to creating Funds: It reads as under:

“To consider and to recommend to the meeting of the general body, the rates o contribution to the Repairs and Maintenance Fund and the Sinking Fund”

If the uniform flat wise contribution was recommended by the Committee and general body meeting (and a larger number of members having 3 BHK ) having approved it, what is the remedy for minority like you?

I generally advise flat holders not to withhold demands of Society Charges (right or wrong) and pay under protest and subject to decision of competent authority.

Under  Cooperative Society Law dispute settlement is centralized to Cooperative Courts ousting jurisdiction of Courts in respect of disputes covered under Section 91(1) of the MCS Act 1960 vide its sub-section 3. Fixation contribution amount is covered under this Section.

A majority decision can be disputed if  majority intention was unfair to the minority, Courts are within their  constitutional duty to declare such unfair decision as null and void.

There is a some what quicker and economical way of dealing with the unfair practice of the Society by filing a complaint to the District Consumer Forum against the Society.

Courts take time undoubtedly. The 2 BHK members should recalculate their share on area basis and pay only that much that too under protest. If Payment is not accepted deposit the cheque in society’s bank account.

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