Disputes within a cooperative housing society (CHS/the Society) often arise not because the law is unclear, but because procedures are ignored, responsibilities are blurred, or power is exercised arbitrarily. From failure to remit statutory dues to the informal collection of large sums without proper billing, to unresolved family ownership disputes that drag on, despite the availability of legal remedies, CHS members frequently find themselves bearing the consequences of action or inaction by managing committees or co-owners.
This week, I shall address three such situations that are increasingly common. The first deals with the fallout of a society’s failure to pay municipal property taxes despite collecting the amount from members, resulting in penalties being imposed on individual flat- owners. The second examines whether a CHS can bypass its own accounting processes and ask members to pay capital expenses directly to a vendor. The third looks at the correct legal route for transferring a joint family flat when a court case is pending and one of the legal heirs is uncooperative.
Recovery of Property Tax Penalty Caused by Society’s Default
Question: I seek your legal guidance regarding a dispute with the managing committee of my cooperative housing society. Earlier, property tax was included in the Society’s maintenance bills and collected from individual flat-owners. The Society was responsible for remitting the collected amount to the Municipal Corporation of Greater Mumbai (MCGM).
However, the managing committee failed to clear the property tax dues for the past two years. When I enquired about the delay, the committee informed us that MCGM was not accepting payments from the Society’s office-bearers and was giving future dates for payment. Subsequently, MCGM began issuing individual property tax bills directly to flat owners, rather than billing the Society.
When I approached MCGM to make a payment directly, the officers informed me that the outstanding dues from previous years had to be cleared first. However, I had already paid the corresponding property tax amounts to the Society as part of my maintenance bills which the Society failed to remit to MCGM. I raised this issue repeatedly in ad-hoc meetings and annual general meetings (AGMs), but these concerns were neither recorded in the minutes of meetings nor circulated to members.
As a result of the Society’s default, I was compelled to pay the outstanding property tax directly to MCGM, including a penalty of ₹11,000 for delayed payment. When I requested reimbursement of both the principal amount and the penalty, the managing committee refunded only the principal amount and refused to reimburse the penalty, stating that they are unable to do so at present.
In this context, I seek your advice on whether the penalty amount of ₹11,000 can be legally recovered from the managing committee or the Society, whether interest at 24% per annum can be claimed on the delayed reimbursement and whether it is advisable to initiate legal proceedings through an advocate, including recovery of legal costs and the likely timeframe. Please advise on the available legal remedies.
Answer: You should first settle the outstanding municipal property tax for your flat, even if the amount was earlier collected by the Society but not paid to the municipality. You will be required to pay the penalty to the municipal authority.
With proof of having paid the property tax to the Society earlier, such as copies of the Society’s receipts and a photocopy of your bank passbook showing clearance of the cheque, you should make a complaint against the Society to the deputy registrar of cooperative societies (DR-CS) under bye-law no. 174(A)(xxii).
The deputy registrar will seek clarification from the Society and, after hearing the matter, will pass an order directing the Society to refund the property tax amount collected from you and also reimburse the penalty paid by you to the municipality due to the delayed payment of your flat’s property tax.
Society Cannot Demand Direct Payment to Vendor for CCTV Installation
Question: A newly-registered housing Society in Mumbai has 13 flats, out of which eight flats belong to the same family that originally owned the bungalow. The secretary and chairman are the son and father of the same family.
The Society has installed 25 CCTV cameras at a total cost of ₹1.80 lakh. The secretary is insisting that members pay their share of this capital expenditure directly to the vendor. I objected, stating that since this is a capital expense, the Society should raise a supplementary bill or include it in the quarterly maintenance bill. The secretary has refused to do so and is insisting on direct payment to the vendor.
My query is: Can a cooperative housing society in Mumbai ask members to pay for CCTV installation directly to the vendor without raising an official society bill? What should I do?
Answer: For any common expenditure of the Society, the secretary cannot ask members to pay directly to the vendor. After installation of the CCTV cameras, the total expenditure must be recovered by the Society equally from all flats through an official Society bill.
If the secretary insists that individual flat-owners pay the CCTV installation charges directly to the vendor, you should make a complaint against the secretary of the Society to the DR-CS under bye-law no. 174(A)(xxii).
Parking Rights in Societies When Flats Are Given on Rent
Question: I stay in a cooperative housing society in Mulund. The Society has open parking spaces that are allotted to members on a round-robin basis. Recently, the Society allotted a parking space to a member who has rented out his flat to a tenant. Does a member who has rented out his or her flat have the right to parking in the Society premises when his or her status, as per the society, is ‘non-occupant’?
Answer: Parking of vehicles in the premises of a cooperative housing society is governed by bye-law nos. 78 to 84. A person residing in the flat, whether as an owner or a tenant, is entitled to parking, subject to the provisions of the above bye-laws.
If there is a shortage of parking space within the Society premises, then after allotting one parking space to each original member, rental flats are also given one parking space per flat. After allocating one parking space to each flat, if parking spaces remain vacant, those members who have a second car may be allotted a second parking space on a year-to-year basis. Therefore, if there is no shortage of parking space, allotting parking to a person residing in the flat on rent is in accordance with the bye-laws.
However, a flat-owner who has given his flat on rent cannot claim the right to parking for his own vehicle, as he is not residing in the Society. Against such a case, under bye-law no. 174(B)(iv), you can make a complaint against the Society in the cooperative court. Since your case is not complicated, you need not hire the services of an advocate. By doing a simple online search, you can learn how to present your parking-related complaint before the cooperative court and argue your case when it comes up for hearing.
NOTE
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Disclaimer: The guidance provided in these columns and on our Legal Helpline is on the sole basis of the facts provided by the reader/questioner and does not amount to formal legal advice in any form whatsoever.
(Shirish Shanbhag has an MSc in Organic Chemistry, Diploma in Higher Education, and a Diploma in French and has completed his LL.B. in first class in 2021. Before his retirement, he was a junior college teacher at Patkar College from July 1980 to May 2012, teaching theoretical and practical chemistry. Post-retirement in 2012, he started providing guidance and counselling to people on several issues, specifically focusing on cooperative housing society-related matters. He has over 30 years of hands-on experience in all matters about housing societies and can provide out-of-box solutions for any practical issue.)
