The High Court has ruled that Housing Co-operative Societies cannot charge any lump sum for inducting any new member, who is generally a buyer of a flat/house from the society.
While allowing an appeal, a division bench comprising Justice Vineet Saran and Justice B Srinivase Gowda recently said that a lump sum contribution can in no case be termed as fee, either for admission or entry.
The appellants, Krishnamurthy Subramanyam and two others, dwellers of the Shashikiran apartment in Malleswaram had challenged the single bench order, which had allowed the Samyukta Bharath Housing Co-operative Society Limited' s contention of collecting lump sum for membership.
The appellants had sought membership under the Karnataka Co-operative Societies Act, 1959.
The appellants had contended that the said society apart from collecting fee, share fee etc to enrol as new members to the society, it was also charging a lump sum amount of Rs 15,000.
The bench, in its ruling, said that there is no provision for charging any kind of contribution (other than fee) from a person seeking membership. The bench further said even though there was a resolution passed in the general body meeting of the society on collecting the lump sum, but if collected, it would amount to charging a premium on sale of flats for which there is no authorisation under the Act, Rules or Bye-laws.
If resolution is passed against the bye-laws to collect lump sum, the person purchasing flats from existing owners would be saddled with the additional contribution and thereby the society may start charging as premium. A non-profit housing society cannot be allowed to charge, the bench ruled.
Published 16 March 2016, 20:41 IST