Vitthal (IT Consultant) 02 February 2011

Interest on Corpus Fund of CHS

Hi,

Our complex is formed of 3 societies & 1 more society is about to come. The builder has not yet registered the society. The apex body is yet to be formed.

The Corpus fund is lying with the builder since 3 - 4 years. My query is, Is the builder liable to pay interest on the Corpus fund ?

& what is the remedy on this ?

Consider the following points,

1) The agreement says the builder would not pay the interest on corpus fund but I don't think this clause is part of the standard agreement. hence the builder can not make use of this clause.

2) The builder is like a trustee of the corpus fund & hence must pay interest on it.

Please advise.

Reply Follow

1 Replies

V. VASUDEVAN (LEGAL COUNSEL) 02 February 2011

The Corpus Fund is liable to be set apart and kept in a separate bank account. Hence even if the agreements provides for no interest to be paid by the builder, any interest accrued on the corpus fund from the bank should be added as a part of fund and the builder has right to appropriate the same.