We are residents of a Group Housing Society. Since the Society had been facing resistance from the Societies in the Vicinity, the third party agreed to provide a plot of land outside the periphery of the Society for the storage of the Four DG Power Sets. The Society paid the money for the purchase of Generator Sets to a reputed Company.
When the External Auditors made damning comments about the Power Back -up arrangement, it transpired that the President of the Society had executed the Agreement in his personal capacity on stamp paper of Rs.50/- without mentioning the name of the Society or his designation.
The execution of the Agreement dated January 2010 between the Society and third party appears to be full of anomalies. Agreement does not include mandatory clauses descripttion of parties, nature of Contract, Duration and renewal of Agreement, Options, Dispute resolution, termination, modification, effective date, details ​of​​ resolution authorizing President to sign the Agreement on behalf of Exclusive Floors Owners Society, Seal of EFOS, notarization, etc. The agreement is valid for 5 years and therefore it expires in December 2014.
There is a clause which says the third party will refund Rs.40 lacs on the expiry of Agreement but does not mention that the ownership of 4 DG Power Sets will vest in the Society i,e. the third party will return the 4 Generators on the expiry of the Agreement.
It appears that the contract is favoring only one party. Residents are fed up with the current arrangement because it is costing them Rs. 900 per month. There is absolutely no need of the Power Back up at present because the there are no outages. We have paid over substantial amount to the third party during the last 4 and half years by way of maintenance fee or rental charges for the plot which cost Rs.4.5 lacs per month since January 2010. Though the Agreement expressly provides the third party is responsible for the maintenance of Gen Sets, he charged the Society Rs.1 lac. He is still demanding Rs.2 lacs for repairs. Probably this could be one of the reasons for termination of the Agreement.
I am of the opinion that the Agreement was executed by President of the Society in his personal capacity and is not supported by any Board Resolution and is not legally binding on the Society. However, the Society may have provided tacit approval by making monthly payments.
I feel we should serve a notice for termination of the Agreement and seek refund of Rs.40 lacs and possession of 4 Gen Sets. Since the then President acted without any express authority, we should also implead (or any appropriate legal term) the then President and seek damages.
Ashok Monga
