Nowadays an ultra-vires method of chargability has been adopted by several societies. The committee uses its majority power and misguides the General Body of members and passes the resolution.  Chargeability on unit-wise results in higher contribution by small flat owners and lower contribution by larger flat owners. Maintenance charges are the foundation to run the expenses of the society. Now first let us see the provisions in the Act of 1960 and the byelaws. Byelaws are contracts between the management and society. Any breach of byelaws amounts to a breach of contract and breach of trust. Any discrimination made is a serious breach of equal rights granted under the constitution of India.

BYE-LAWS PROVISIONS FOR CHARGABILITY OF MAINTENANCE:

  1. LEVY OF CHARGES OF THE SOCIETY
  2. The contribution to be collected from the Members of the Society, towards outgoing and establishment of its funds, referred to in these bye-laws as ‘the charges’ may be in relation to the following : (i) Property Taxes, (ii) Water Charges, (iii) Common Electricity Charges, (iv) Contribution to Repairs and Maintenance Fund, (v) Expenses on repairs and maintenance of the lifts of the Society, including charges for running the lift. (vi) Contribution to the Sinking Fund, (vii) Service Charges, (Viii) Car Parking Charges, (ix) Interest on the defaulted charges, (x) Repayment of the installment of the loan and interest, (xi) Non-occupancy Charges, (xii) Insurance Charges, (xiii) Lease rent, (xiv) Nonagricultural tax. (xv) Education and Training Fund (xvi) Election Fund (xvii) Any Other Charges.
  3. The Service charges of the Society referred to at 64 (vii) above shall include the following:
  4. Salaries of the office staff, liftmen, watchmen, malis and any other

employees of the Society.

  1. Where the Society has independent Office, the property taxes, electricity charges, water charges etc. for the same.
  2. Printing, Stationery and Postage,
  3. Travelling Allowance and conveyance charges to the staff and the Members of the Committee of the Society.
  4. Sitting fees paid to the Members of the Committee of the Society,
  5. Subscription to the Education Fund of the Maharashtra Rajya Sahakari Sangh Ltd.
  6. Annual Subscription of the Housing Federation and any other co-operative institution to which the Society is affiliated.
  7. Entrance fees for affiliation to the Housing Federation and any other cooperative institution.
  8. Audit Fees for internal, Statutory and reaudit, if any.
  9. Expenses incurred at meetings of the general body, the Committee and the Sub-Committee, if any k. Retainer fees, legal charges, statutory enquiry fees.
  10. Common electricity charges.
  11. Any other charges approved by the General Body at its Meeting. However such charges should not contradict the provisions of the Act, Rules and Bye-laws of the Society.

66.

  1. The Committee shall apportion the Share of each Member towards the charges of the Society on the following basis:
  2. Property taxes: As fixed by the Local Authority
  3. Water Charges: On the basis of the total number and size of inlets

provided in each flat.

iii. Expenses on repairs and maintenance of the building/buildings of the Society: At the rate fixed at the general body from time to time, subject to the minimum of 0.75 percent per annum, of the construction cost of each flat for meeting expenses of normal recurring repairs.

  1. Expenses on repairs and maintenance of the lift, including charges for running the lift: Equally by all the Members of the building in which lift is provided, irrespective of the fact whether they use the lift or not.
  2. Sinking Fund: As provided under the bye-law No. 13(c).
  3. Service Charges: Equally divided by number of flats/units.

vii. Parking Charges: At the rate fixed by the General Body of the Society at its meeting under the bye-law No. 84/85.

viii. Interest on the delayed payment of Charges: At the rate fixed under the bye-law No. 72 to be recovered from the defaulter Member.

  1. Repayment of the installment of the loan and interest: The amount of each – installment with interest fixed by the financing agency.
  2. Non-occupancy charges: At the rate fixed under the byê-law No.

43(b)(iii).

  1. Insurance Charges: The built-up areas of each flat, provided that if there is an increase in the insurance premium due to storing any specific goods in any flat, used for commercial purposes, the extra burden of insurance premium shall be shared by those who are responsible for such increased premium in the proportion of the built-up areas to their flats.

xii. Lease Rent: The built-up area of each flat / unit.

xiii. Non-Agricultural tax: The built-up area of each flat / unit

xiv. Education & Training Fund: Rs. 10 per Flat/unit per month.

  1. Election Fund: Equally by the Members and as prescribed by the Election Authority in the Rules

xvi. Any other charges: As may be decided by the General Body Meeting of the Society

  1. The Committee shall fix in respect of every flat the Society charges on the basis laid as down under the bye-law No, 66 (a). by concerned flat holders, with intimation to the Society.

 So any apportionment of charges and expenses shall be as per Bye-law No 66(a).

Now society calls an AGM with an agenda to revise and increase the society charges in various heads to meet the regular expenses. They pass resolution Unit wise instead of Byelaw No 66 (a). It resulted in the reduction of maintenance charges for larger flats and an increase in maintenance charges for smaller flats. For example, 1 BHK and 1 room Kitchen would pay a higher amount than 3BHK and 2BHK. The same is on a unit basis.

The question is can society charge in violation of the byelaws?

DICTUM:

Now let us see the verdicts of the Court:

WP No.1948 of 1997 dated 3oth July, 2002 Venus Cooperative Housing Society & Anr. Vs. Dr.J.Y.Detwani Bombay High Court set aside a resolution passed on the basis of repealed byelaws. It said that the same is in violation of fundamental rights.

   In para 8 it observed that8. According to Shri. Jahagirdar, the society had, as members small flat holders who comprise 86.4% of the total membership.   They were and are in brute majority in the society and they are always oppressing the minority of the large flat holders.   Shri. Jahagirdar pointed out that even in the past on the strength of the brute majority the small flat owners had increased the rates of maintenance which the large flat owners accepted to maintain the spirit of cooperation and cordial relations.   Shri. Jahagirdar pointed out that on this occasion, the large flat holders thought it proper to put an end to this oppressive decision of the majority small flat owners.   Shri. Jahagirdar pointed out that an amount of Rs.16 lakhs was due to the small flat holders who were defaulters.   He pointed out that to make up the said loss they were oppressing and coercing the large flat holders by enhancing the maintenance charges.   The majority flat holders, therefore, resorted to the device of charging the maintenance charges on the basis of area of the flat.   Shri. Jahagirdar pointed out that the said decision was totally unreasonable, arbitrary and oppressive as the amenities, facilities and services rendered to all of them were the same and it was not that the large or big flat holders were getting more or higher or greater benefits so that they should be coerced to pay more.   Shri. Jahagirdar submitted that the general maintenance comprises of the following common factors such as salary of staff, expenses for the security of the society, lift maintenance, common electricity charges, internal road lighting, common passage maintenance, charges for lifting water from the tank and expenses for postage.

  1. I agree with the submissions of Shri. Jahagirdar that it cannot be said that the big flat holders are getting higher or more services to make them liable to pay more on the basis of the area of the flat. Aforesaid services are enjoyed by all the members equally and therefore, there was no reason for the society to have made the large flat holders to pay more on the basis of the area of the flat.   There is absolutely no rational or any reason to require the large flat owners to pay more for the aforesaid service charges.   The supremacy of the general body cannot be disputed but even the supreme general body has to be reasonable and has to pass rational resolution considering all the facts and circumstances of the matter.   The general body cannot pass arbitrary and unreasonable resolutions merely because it is supreme and it has a large majority in favour of one of the issues on the agenda.   In the present case, the resolution dated 30th November, 1980 passed by the general body is totally unreasonable and arbitrary regardless of the amenities, facilities availed of by the members.   It is clarified here that the payment of municipal taxes is on the basis of the area of the flat and there is no dispute over that issue.   Whatever bill is sent by municipal authorities is accordingly paid by all the flat owners small or big.   It was, however, mandatory for the general body meeting to have considered whether the large flat holders were drawing more benefits or facilities by virtue of the big size of the flats.   It is not the case of the society that by virtue of the large size of the flat, the flat holder gets more or higher security or more common road or common passage light than that of the small flat holders.   There is absolutely no rational basic for the society to charge for the aforesaid services on the basis of the size of the flats.”

 PRESENT STATUS

Recently In the year 2019, a Pune Co-Operative court temporarily restrained the Karishma Cooperative Housing Society in Kothrud from Collecting annual maintenance charges from its member on the basis of area or number of bedrooms of flats till the final adjudicating of an ongoing dispute.

Even the Model Bye-Laws of the Maharashtra Co-operative Society Act, 1960 states that the Maintenance charges shall be equally divided by the number of flats/units.

Concluding Remarks:

If any Committee misguides the AGM and gets the resolution passed the same shall be subject to challenge. The Committee is also liable for disqualification.

SHRUTI DESAI

30th September 2022