Civil Procedure Code (CPC)

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Collection of transfer charges/fee rs 25000

Querist : Anonymous (Querist) 27 July 2021 This query is : Resolved 
Request only the Legal Professionals well versed with Maharashtra Co-operative Societies Law to answer in very specific according to the relevant legal provisions. Building A has 30 flats and it goes into redevelopment with Builder B. Builder B builds a new building with 48 flats. He sells 18 flats to new flat purchasers under sale agreements between builder and flat purchasers. MC has a verbal understanding with Builder that he will collect from / ensure payment by new flat purchasers of Rs 25000 towards share transfer chares/fee. Builder accordingly includes the clause in few flat sale agreements and does not include in few agreements. When 18 new flat purchasers approach MC for membership, MC insists that as per understanding with the builder, Rs 25000 must be paid by all. New flat purchasers submit that
1. Their case is the admission case under Bye Law 19 which does not prescribe payment of transfer charges/fee of Rs 25000. Builder is not member and hence it is not case of transfer from builder to new flat purchasers. Bye Law 19 authorises collection of only Rs 100 entrance fee, Rs 500 transfer charges and value of 10 shares. Nothing apart from this can be collected.
2. Transfer Charges Rs 25000 were to be collected under Bye Law 38 ‘Transfer of Shares and Interest in Capital/Property of Society’. Circular no SAGRUYO-2001/PRA.KRA.188/14-SA of 9.8.2009 also states that “The rate of the premium to be charged while transferring flat/gala of the member in the Co-operative housing societies and his share in capital/property of the society should be determined by the general body..” and then lays down maximum limit as Rs 25000 for Municipal Corporation’.
3. That Rs 25000 is to be collected from new flat purchasers was neither approved by general body nor was included in Redevelopment agreement fearing that it would be against law to do so. It was just an instruction by some influential members of MC to the builder.
MC continued to insist that they had verbal understanding with developer to take Rs 25000 as charges and new flat purchasers may fight with builder but must pay Rs 25000 if they wanted membership. Finally new flat purchasers paid Rs 25000 because without membership MC would have rejected their rights and participation in society affairs and they did not want to involve DDR to further complicate the matter. Also, institutions which had given loans were insisting on share certificates. New flat purchasers then placed their case before general body and requested general body to approve refund of the amount collected by MC else membership would not have been conferred. Queries are;
A. Was collection of Rs 25000 from new flat purchasers in violation of regulatory provisions ?
B. Can MC argue that what is legally not permitted for society, it can do through Builder ?
C. Is it within authority of General Body to refund the amount so collected and give relief to new flat purchasers.
Dr J C Vashista (Expert) 28 July 2021
In case you want opinion and advise of experts of Maharashtra Cooperative Societies act, 1960 you should have preferred to consult a local prudent lawyer as this site is worldwide where you can not restrain other respondents.

You did not disclose your identity vis-a-vis your concern with such detailed facts, which should have been brief and specific for obligation of experts on this platform, why so?
kavksatyanarayana (Expert) 28 July 2021
to my best, the society can collect transfer charges at 2.5% of the difference between the book value of the flat and the price realised by the transferor on the transfer of the flat, or a maximum of Rs 25,000, whichever is lesser.
T. Kalaiselvan, Advocate (Expert) 25 August 2021
From your contents it can be found that the society is illegally collecting the amount from the new members, you are right that it is not a transfer instead it is a purchase and the new members have to abide by the formalities applicable to obtaining the membership alone.
Therefore the affected members can drag the society to the registrar of cooperative society with a complaint against the society for their unjustified and illegal demand.
If the registrar fails to initiate proper action or to provide relief to the aggrieved members, they can approach cooperative court with a suit for refund of the money as well as for permanent injunction restraining the society to collect such unseasonable and illegal amount from the members for any reason other than by due process of law.
Further, please confine yourself to post the questions alone and not to give instructions or restrictions to other members of this forum to render their opinion in general.
If you are so particular about the answer from a lawyer hailing from Maharashtra alone, you may book a personal consultation and contact the chosen lawyer on his/her terms


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