The office-bearers of the plush Shantiniketan Air India co-operative housing society (CHS) in Versova were disqualified recently and barred from contesting elections for a term (five years) after they were allegedly found to have levied transfer fees above Rs 25,000, which is against the norms. Action was also initiated for contempt of the deputy registrar of co-operative societies’ orders as the amount collected over and above Rs 25,000 had allegedly not been refunded.

According to real estate experts, violating the rules and overcharging transfer fees under any head is a criminal offence and the office-bearers can even be booked for ‘extortion’ under the Indian Penal Code.

The society has bungalows and towers, occupied by celebrities and corporate honchos. The society’s office-bearers were unavailable for comment.

CA Ramesh Prabhu, founder chairman of MahaSEWA, said, “In the Shantiniketan Air India CHS Ltd case, the deputy registrar of co-operative societies had directed the society office-bearers to refund the extra amount (transfer fees) collected at the time of transfer of flat. As the office-bearers did not refund the amount, it amounts to an offence of contempt of registrar directions, and therefore, the deputy registrar has removed the office-bearers from the committee and disqualified them from contesting the election for one term of five years.”

Also Read: Maharashtra: State housing body, co-op dept launch app on all related laws 

The rules

Prabhu said, “As per the government’s direction under Section 79A of the Maharashtra Cooperative Societies Act, 1960, the society cannot charge transfer fees in excess of Rs 25,000. There have been instances in the past where the police registered FIRs and booked the office-bearers for demanding more than the said amount.”

“The Bombay High Court too has passed orders to refund the amount collected in excess of Rs 25,000 under any name at time of transfer of flat with interest. The bylaws also prescribe the same. However, societies, in order to generate revenue and to subsidise the maintenance charges, recover the additional amount in the name of donation, society major repairs fund, welfare fund, etc. This is not a good practice and office-bearers should not get this type of resolution passed.”

On May 16, 2022, two residents of the society filed a complaint with the deputy registrar of cooperative societies, K West division, Bandra East, saying that the society office-bearers on various occasions demanded additional amounts as infrastructure fees if they wanted the shares transferred. The complainants also cited a similar case that took place in Walkeshwar where the police had intervened. 

The recent order dated January 30, 2023 by Deputy Registrar K West division Nitin Dahibhate stated, “This office had on June 20, 2022 written to the society, calling upon them to furnish the details about the issues raised in the complaint. In response, the society vide its letter dated July 26, 2022 had clarified that they have charged Rs 25,000 only as transfer charges.”

The order further stated that one of the complainants, during the proceeding, had produced evidence of being charged Rs 50,000 by the society as infrastructure fee levied on multiple flat transferor/transferees. It added that based on the evidence, the office held that the society had been illegally charging extra fees. 

The deputy registrar further observed that the said office-bearers are performing the duties of the society in violation of the approved bylaws of the society and in violation of the MCS Act and Rules. The official held that this act put the residents of the society at disadvantage at large. The deputy registrar then issued a show-cause notice to the office-bearers.

The deputy registrar’s office fixed the next hearings on December 29, 2022; January 6, and January 12, 2023, but the society office-bearers remained absent. 

Final order

The deputy registrar held that the office-bearers failed to comply with its earlier directions. In view of this, he ordered, “The chairman, secretary and treasurer of Shantiniketan Air India Co-op Hsg Soc Ltd, Yari Road, Versova are hereby barred/ ineligible to be re-elected as members of any committee until the expiry of one term of the committee, and that they shall not be eligible to be appointed or be re-nominated as per this order.”

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