Questions about maharashtra co-operative housing society act

CAN A SOCIETY CHARGE COMPOUND INTEREST?
I am a member of Kailash Udyan CHS
Ltd., which has been charging compound
interest @ 21% p.a. for the delayed
payment of society charges.
When I enquired, they informed that it
has been passed in the AGM. Can a society
charge compound interest?

In terms of provisions of the model
bye-laws, society can charge only
simple interest on the delayed payment,
subject to a ceiling of 21% p. a.
within which limit the AGM may decide
the rate, but in no case compound
interest can be charged.

WHY ARE NOMINEES NOT TREATED AS OWNERS?
The Bombay High Court has ruled in
favour of a nominee in case of a share
demat account so why this should not
hold good for the society share. In actual
life the rights are transferred to
the nominee in most of the CHS flats
and in case of will, many people do not
obtain the probate and it is also a very
difficult task. Why a nominee should
not be treated as a beneficial owner?

----------- There is a provision of nomination
in various types of moveable and
immoveable properties, such as life
insurance policy, employees provident
fund, bank deposits, national
saving certificates, company shares,
cooperative societies in Maharashtra,
mutual funds etc. and the true nature
and scope of a nomination is governed
by the provisions of the
statutes governing these properties.
It is a well settled law in case of a life
insurance policy that a nominee is
merely a trustee or agent on behalf of
the legal heirs of the deceased. Similarly
it has been held that in case of
cooperative societies in Maharashtra,
a nomination under Section 30 of the
MCS Act is not a special rule of succession
altering the mode of succession
laid down under the personal law
of the deceased. In case of EPF, NSC,
bank deposits, different views have
been taken in judicial pronouncements,
but the majority view is that
the nominee is not the beneficial owner.
In the case of demat share account,
the Bombay High Court has held in
the case of Harsha N. Kokate that the
nominee becomes entitled to all the
rights in the shares to the exclusion
of all other persons in view of the language
of the provision of Section 109
of the Companies Act. If a nominee
has to be made a beneficial owner of
the property of the deceased, suitable
provision will be required to be made
in the Indian Succession Act, Hindu
Succession Act and the personnel
laws of the other communities and
till then, the present position will
hold good.
WHO IS RESPONSIBLE FOR MAINTENANCE DISPUTES?
I have given my flat on leave and license
basis. The agreement is stamped
and registered for a period of 3 years.
I am paying the non-occupancy
charges at the prescribed rate to the society.
If there is a dispute with the licensee
about reimbursement of maintenance
charges payable to the society,
please advise who has to bear the same.

    ----- It will depend on the terms and
conditions agreed upon between both
the parties and as recorded in the
agreement. If the Agreement is silent
on the point, the issue may become
debatable. The licensee may claim
that the monthly license fee has been
agreed upon as inclusive of the same.
The other view is that the maintenance
charges consists mainly of
electricity charges, water charges,
wages for the sweeper, the employees
of the society, watchmen etc.
When a flat has been given by the
owner on leave and license basis,
these services are being utilized and
availed of by the person actually residing
in the flat i.e. the licensee and,
therefore, all these charges should
normally be paid by the licensee.
Where these charges include property
tax, the same will be required to be
paid by the owner of the flat. Therefore,
the Leave & License Agreement
needs to be drafted carefully to make
the intentions of the parties crystal
clear to avoid such ambiguity.
CAN A BANK REFUSE TO TAKE OVER AN EXISTING LOAN?
I own a flat jointly with another person
B and we had constructed two
floors of which ground floor belonged
to me and first floor to B. Since this
plot is from the category of the government
land (from the category of B-
1), we both had paid the required
charges to Collector. I have taken a
loan of Rs.40,00,000 from HSBC for my
flat on the ground floor. Now we both
have entered into a development agreement
with a builder to demolish the existing
construction and to construct a
17 storey building. I applied to a nationalized
bank for takeover of the
loan of HSBC, but the bank has refused
for the same, though I am eligible
for more than outstanding loan. Is
the stand of the bank correct?

   -------- The stand of the nationalized bank
is absolutely legally correct and justified.
How they can take over this
loan of HSBC, when the security created
in favour of HSBC does not exist
as on today and there will be no
security for the loan with the said nationalized
bank. On the contrary
HSBC should initiate immediate
steps for the recovery of its dues
from you and proceed against the
builder who demolished the portion
of the building which was already
mortgaged to it. Similar cases are
happening in Mumbai and it seems
to be a matter of system failure inasmuch
as while entering into a development
agreement, neither the flat
owners who have already mortgaged
their existing flats disclose this fact
to the builders nor the society, wherever
registered and issued the mortgage
NOC, disclose this fact to the
builders nor the municipal corporation
and other authorities enquire
about any such existing charge on
the building or any portion thereof,
before issuing the necessary approvals.
In fact the banks and housing
finance companies may face serious
problem in case of default for
the recovery of its dues in such cases.
This issue was brought to the notice
of RBI, NHB, IBA but it is unfortunate
part of our democratic system
that unless there is some pressure,
nothing moves and preventive
measures are not taken well in time.
CAN A SOCIETY ARBITRARILY FIX POOJA CONTRIBUTION?
I am a member of Prabhat Tower
CHS, Vasai Road. In the month of January,
managing committee displayed
a notice asking Pooja Contribution @
Rs.250 per flat without the consent of
the members of the society and as this
was not acceptable to me as I own two
flats having only three members and I
was required to pay Rs.500. When I
asked the managing committee why
these charges have been included in the
bills, they simply replied that it is compulsory
to pay whether you are available
or not for pooja function, including
the meals. I gave a letter about the
non-payment of these charges and requested
the managing committee to
amend the bills, but it did not agree
and have shown the same in the bills
for the month of March and April and
issued instruction to pay to avoid any
legal action. Is it necessary to pay such
charges and whether they can include
the same in the regular maintenance
bill? After the said controversy I have
stopped paying repair charges and the
maintenance bills. What will be the
consequences of non-payment?

-------- Any collection towards religious
ceremonies, including pooja with
meals etc., cannot be made compulsory
by the managing committee or
even the general body meeting and
the society cannot adopt coercive
measures to collect the same, as such
a decision is not supported by the byelaws
or the Act or the Rules. In case
of non-payment of these charges, society
cannot take any legal action
against you. However, as a matter of
retaliation, you should also not stop
the payment of the maintenance bills
and repair fund decided by the society
as per the bye-laws and in case of
non-payment, the society may recover
the same with interest and proceed
against you as per the bye-laws. No
member can also take the stand that
there is no need of any repair to the
outer elevation of his apartment, as
the society is under obligation to
maintain the building of the society
including its elevation etc.
CAN BANKS DISCRIMINATE BETWEEN LOAN APPLICANTS?
I have entered into an Agreement for
Sale to purchase a flat with a Widow,
who has executed the agreement for
self and as the natural guardian of
her minor son and applied for a housing
loan to a nationalized bank, which
is insisting for the succession/ heirship
certificate and the permission of the
court for the sale of the share of the minor,
whereas one of my friends has entered
into a similar transaction with a
Karta of a HUF, which consist of minor
also, but his banker has disbursed
the loan. Why this discrimination?

--------- For the purchase of flat in the
name of a deceased, succession or
heirship certificate by his or her legal
heirs is necessary and where one
of the legal heirs happens to be a minor,
court permission for the sale of
the share of the minor is necessary
as per the provisions of law, because
a natural guardian, may be either father
or in his absence, mother is not
legally entitled to sell, transfer or
mortgage the share of a minor in the
property. However in case of a HUF,
situation is different in the sense that
a Karta of HUF can sell, assign or
mortgage the property of the HUF,
which may consist of a minor, either
for legal necessity or for the benefit
of the estate. Thus a Karta of
HUF enjoys much more powers
than a natural guardian, as far as the
sale, transfer, mortgage of a property
or a share therein of a minor is
concerned.