UNTRACEABLE MEMBERS AND PROPERTY RIGHTS IN COOPERATIVE HOUSING SOCIETIES: PROCEDURES AND PRECEDENTS
In the model bye-laws of a cooperative housing society (such as those in Maharashtra), a member is deemed to have ceased membership if their whereabouts are unknown for a continuous period of seven years and their shares and interest in the property are unclaimed by anyone else. This cessation allows the society to take further action regarding the property. Procedures and Provisions While specific actions for handling the property itself require legal procedures beyond just the society’s internal rules, the bye-laws provide a framework for managing the situation and ultimately dealing with the ownership: Cessation of Membership: Bye-law No. 55(f) (in the Maharashtra Model Bye-laws) explicitly states that a person shall cease to be a member if their whereabouts are not known for seven continuous years and no claim is made on their interest in the property. However, the associate member shall not cease to be Associate Member when the First Member ceases to be the member of the society if Associate Member holds title and interest in the property jointly with the member. The Committee shall take further action in the matter as indicated in the Bye-law No. 62. Vesting of Shares/Interest: If, after a member’s death or disappearance, there is no claimant (nominee, heir, or legal representative), their shares and interest in the capital/property of the society will vest in the society itself. Nominations and Legal Heirs: The bye-laws heavily emphasize the importance of nomination (Bye-law No. 32-34). If an owner is untraceable and has no nominee, the committee would typically ask for a legal representative or heir to come forward. Payment of Dues: The untraceable owner’s account would likely accumulate unpaid maintenance charges and other dues, incurring interest (up to 21% per annum in some model bye-laws). These liabilities must typically be cleared before any transfer of interest can occur. Formal Communication: The society uses formal communication methods, such as registered post to the last known address or displaying notices on the society’s notice board, which are considered valid service of notice even if the member is untraceable. The society must maintain records of all sent notices as proof. Committee Action: The managing committee has the power to manage the society’s affairs (Bye-law No. 111), which includes dealing with non-compliance and cessation of membership. They are responsible for initiating the process of addressing the untraceable owner’s status. Registrar and Courts: The final authority in serious disputes or complex situations, such as an untraceable owner with no clear legal path forward, ultimately lies with the Registrar of Cooperative Societies or a Cooperative Court. The society would likely need to approach these legal bodies for formal orders to take control of or dispose of the property. DISCUSSION: A is member and have signed Conveyance. A is not traceable for more than 40 years. Taking advantage of situation widow of promoter applies for membership. It was rejected. During course of arguments she sell the flat. After two decades the flat goes for redevelopment. The purchaser of the flat sells flat to the third party. Society refuses all a membership, In a recent ruling of Supreme Court of India K, Gopi […]
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WHETHER COURT HAS POWER TO AMEND THE ARBITRATION AWARD? CAN COURT REVIEW PENDING BILL BEFORE PARLIAMENT?
Recently, this query was referred to 5-Judge Bench of the Supreme Court in the matter of Gayatri Balasamy The facts of the case and the reference points are as under: Gayatri Balasamy vs M/S Isg Novasoft Technologies Limited on 30 April, 2025 This reference to a Bench of five judges is primarily to decide the correctness of the judgment of this Court in Project Director, National Highways No. 45 E and 220 National Highways Authority of India Vs. M. Hakeem and Anr., (2021) 9 SCC 1. In the said judgment, this Court held that while exercising powers under Section 34 of the Arbitration and Conciliation Act, 1996 (‘A&C Act’ for short), a Court hearing the petition had no power to “Modify” the Award. A three- Judge Bench of this Court on 20.02.2024, after noticing that there are decisions of this Court which have either modified the awards of the Arbitral Tribunals or upheld orders challenging modified awards and after observing that an authoritative pronouncement is required on this issue, placed the matter before the Hon’ble Chief Justice for constitution of an appropriate Bench. On 23.01.2025, by an order, this Court directed the matter to be placed before a Constitution Bench and that is how the matter has presented itself. THE FOLLOWING QUESTIONS OF LAW WERE REFERRED TO A LARGER BENCH: “1. Whether, the powers of the Court under Sections 34 and 37 of the Arbitration and Conciliation Act 1996 will include the power to modify an arbitral award? If the power to modify the award is available, whether such power can be exercised only where the award is severable, and a part thereof can be modified? Whether the power to set aside an award under Section 34 of the Act, being a larger power, will include the power to modify an arbitral award and if so, to what extent? Whether the power to modify an award can be read into the power to set aside an award under Section 34 of the Act? Whether the judgment of this Court in Project Director NHAI vs. M. Hakeem (2021) 9 SCC 1, followed in Larsen Air Conditioning and Refrigeration company vs. Union of India, (2023) SCC OnLine SC 982 and SV Samudram vs. State of Karnataka, (2024) SCC OnLine SC 19 lay down the correct law, as other benches of two Judges (in Vedanta Limited vs. Shenzden Shandong Nuclear Power Construction Company Limited, (2019) 11 SCC 465, Oriental Structural Engineers Pvt. Ltd. vs. State of Kerala, (2021) 6 SCC 150 and M.P. Power Generation Co. Ltd. vs. Ansaldo Energia Spa, (2018) 16 SCC 661 and three Judges (in J.C. Budhraja vs. Chairman, Orissa Mining Corporation Ltd. (2008) 2 SCC 444, Tata Hydroelectric Power Supply Co. Ltd. vs. Union of India, (2003) 4 SCC 172 and Shakti Nath vs. Alpha Tiger Cyprus Investment No.3 Ltd., (2020) 11 SCC (a) The Courts exercising power under Section 34 and Courts hearing appeals thereunder have no power to “modify” an award. (b) The power to modify is not a lesser power to that of the power to set aside, as the two operate in separate […]
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SETTING ASIDE AND OR MODIFICATION OF AN ARBITRATION AWARD SHOULD BE PERMITTED?
The above issue is sub-judice in the matter of GAYATRI BALASAMY Versus M/S ISG NOVASOFT TECHNOLOGIES LIMITED| SLP(C) No. 15336-15337/2021 While writing this blog there is no intention to impress upon views but this is just a small educational analysis. I am not in possession of the reference papers but expressing my views on Section. 33 of the Act. This I am writing solely on basis on press reports available. Let us first see the concerned provisions of the Indian Arbitration Act 1996. Once the Award is made affecting party has remedy under Section 34 of the said 1996 for setting aside the Award. It reads as under: CHAPTER VII Recourse against arbitral award (1) Recourse to a Court against an arbitral award may be made only by an application for setting aside such award in accordance with sub-section (2) and sub-section (3). (2) An arbitral award may be set aside by the Court only if– (a) the party making the application 1[establishes on the basis of the record of the arbitral tribunal that]– (i) a party was under some incapacity, or (ii) the arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law for the time being in force; or (iii) the party making the application was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was otherwise unable to present his case; or (iv) the arbitral award deals with a dispute not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration: Provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, only that part of the arbitral award which contains decisions on matters not submitted to arbitration may be set aside; or (v) the composition of the arbitral tribunal or the arbitral procedure was not in accordance with the agreement of the parties, unless such agreement was in conflict with a provision of this Part from which the parties cannot derogate, or, failing such agreement, was not in accordance with this Part; or (b) the Court finds that– (i) the subject-matter of the dispute is not capable of settlement by arbitration under the law for the time being in force, or (ii) the arbitral award is in conflict with the public policy of India. 1[Explanation 1.–For the avoidance of any doubt, it is clarified that an award is in conflict with the public policy of India, only if,– (i) the making of the award was induced or affected by fraud or corruption or was in violation of section 75 or section 81; or (ii) it is in contravention with the fundamental policy of Indian law; or (iii) it is in conflict with the most basic notions of morality or justice. Explanation 2.–For the avoidance of doubt, the test as to whether there is a contravention with the fundamental policy of Indian law shall not entail a review on the merits of […]
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FORFEITURE AND WITHDRAWAL FROM AGREEMENT TO BUY A FLAT
BLANKET CONSENT An agreement with the builder includes pre-printed clauses that secure the interests of the promoter or builder. In a way it’s a business because the promoter is investing huge sums of money, and he wants its security. Godrej Projects Development Limited vs Anil Karlekar on 3 February, 2025 A question arose in the matter of Godrej Properties at Gurgaon, Haryana. Mr. A books a flat and pays a sum of Rs.51 lakhs approx. But upon issuing letter of allotment, the buyer instead of taking possession of the flat agreed he opted for cancellation of the Agreement. He cited the recession in the real estate industry and sought a full refund of the money. A legal notice was served and subsequently flat buyer filed a consumer complaint. The NCDRC disposed of the Consumer Complaint by directing the Appellant to deduct only 10% of the BSP ( Base Sale Price) only towards cancellation of the Complainants’ Apartment and refund the balance amount Rs.34 lakhs along with simple interest @ 6% per annum from the date of each payment till the date of refund within three months. The standard clause in the purchase agreement was : Agreement entered into between the Parties, which read thus: “2.6 It has been specifically agreed between the Parties that, 20% of the Basic Sale Price, shall be considered and treated as earnest money under this Agreement (“Earnest Money”), to ensure the performance, compliance and fulfillment of the obligations and responsibilities of the Buyer under this Agreement. It has been made clear by the Developer and the Buyer has understood that the Sale Consideration and Statutory Charges as mentioned in Schedule VI hereto have been computed on the basis of Super Built Up Area of the Apartment. The Buyer agrees that the calculation of Super Built Up Area in respect of the Apartment is tentative at this stage and subject to variations till the Completion of Construction. In case such variations are beyond +/- 5%, then the Developer shall take prior consent of the Buyer. 8.4 On and from the date of such termination on account of Buyer’s Event of Default as mentioned above (“Termination Date”), the Parties mutually agree that- (i) The Developer shall, out of the entire amounts paid by the Buyer to the Developer till the Termination Date, forfeit the entire Earnest Money and any other dues payable by the Buyer including interest on delayed payments as specified in this Agreement. (ii) After the said forfeiture, the Developer shall refund the balance amount to the Buyer or to his banker/financial institution, as the case may be, without any interest; (iii) On and from the Termination Date, the Buyer shall be left with no right, title, interest, claim, lien, authority whatsoever either in respect of the Apartment or under this Agreement and the Developer shall be released and discharged of all its liabilities and obligations under this Agreement. (iv) On and from the Termination Date, the Developer shall be entitled, without any claim or interference of the Buyer, to convey, sell, transfer and/or assign the Apartment in favour of third party(ies) or otherwise deal […]
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