• Who is liable to pay the flat transfer fee to Co-op Housing Society

I had a 2 BHK flat at Kolhapur, Maharashtra. I sold it to a buyer a few months ago and all the liabilities including electricity bill, society maintenance changes (monthly as demanded) have been paid by me. Hence I allowed a clause in the agreement that I will pay any pending dues if rightfully asked for. We both (seller and buyer) forgot about the charges to be paid to CHS and the deal was sealed. Now the buyer is demanding Rs. 15000/- from me and has sent me a snap of a board stating that Rs. 15000/- to be paid to society for a 2 BHK for new member registration.

1) Can CHS make it compulsory to pay in a flat sale?
I read following: Bye-law No. 7(e) : Raising of funds by the society - Prohibition on voluntary donation on transfer : As per sub rule No. (f) of Bye-law No. 7, the funds of the society may be raised by voluntary donations, but not from transferor and transferee of any flat.

2) Am I legally liable to pay this amout esp. as a maintenance due?
since the agreement has a clause that I will pay pending dues.
Asked 3 years ago in Property Law from Pune, Maharashtra
Religion: Hindu
1) transfer charges have to be paid by the transferor only 

2) society can recover maximum  Rs 25000 as flat transfer charges 

3) in any case once you have agreed you are bound to pay transfer charges 
Ajay Sethi
Advocate, Mumbai
45700 Answers
2688 Consultations

5.0 on 5.0

Ram Prithviraj Bhargava ..... Claimant/
Decree Holder
Anand Prithviraj Bhargava & Anr. ….. Opposite Parties
Mr.Pratik Majumdar, i/b. Ms.Bina Pillai for the Claimant.
Mr.Tushar Goradia for Opposite Party No.1.
Mr.Ramesh Shah, Secretary of Dimple Co-operative Housing Society Limited.
Mr.Ketan Raiyani, Treasurer of Bharatiya Friends' Co-operative Housing Society.
Mr.B.M.Gore, Commissioner for Taking Accounts.
 DATED : 10th APRIL, 2014
Learned Court Commissioner for Taking Accounts has submitted this report
in view of the terms and conditions for transfer of two flats received from the
respective societies which flats are directed to be sold by this court. It is stated in
the Commissioner's report that in so far as flat no.52 situated at Bharatiya Friends'
Co-operative Housing Society Limited is concerned, the society has addressed a
letter to the Commissioner for Taking Accounts on 28th March, 2014 stating the
terms and conditions for transfer of the said flat. One of the amount demanded by
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the society is towards voluntary contribution at Rs.500/- per sq.ft. carpet area in
the total sum of Rs.6,27,500/-. The said amount is demanded over and above
transfer fees of Rs.25,000/-.
2. In so far as flat No.10 in Manav Mandir Building of Dimple Co-operative
Housing Society Limited is concerned, the said society by its letter dated 3rd
March, 2014 to the learned Commissioner for Taking Accounts has conveyed that
for transfer of the said flat, the society transfer charges would be Rs.25,000/- and
in addition thereto, society would also charge at the rate of Rs.300/- per sq.ft.
towards society welfare totaling to Rs.2,44,500/-.
3. Learned counsel appearing for the claimant and judgment debtors have
urged before this court that according to the bye-laws of these two societies,
society cannot demand any amount more than Rs.25,000/- towards transfer fees. It
is submitted that neither the claimant nor the judgment debtors are ready to give
their consent for payment of voluntary contribution as demanded by the society
either under the head of voluntary contribution or towards society welfare charges.
It is submitted that societies cannot demand more than Rs.25,000/- contrary to the
bye-laws pertaining to transfer charges. Learned counsel appearing for one of the
party has invited my attention to the judgment of this court delivered 17th February,
2010 in case of Bharatiya Bhavan Co-operative Housing Society Limited and
another vs. Smt.Krishna H.Bajaj & Ors. in Writ Petition No.1094 of 2004.
Reliance is placed on paragraphs 53 to 55 of the said judgment in support of the
submission that any recovery over and above the maximum amount of Rs.25,000/-
permissible as transfer fees by the society by way of donation or under any other
head as a condition precedent for transfer of the flat is illegal. Paragraphs 53 to 55
of the said judgment read thus :-
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53. The payment made under the contract with the Society
by the Respondent as agreed between the Respondent and the
Society reflected in the aforesaid correspondence as well as
between the Respondent and Khimji as reflected in the
aforesaid agreement of sale shows that the contract was
entered into and completed by performance though it was
illegal at the relevant time. Such a contract is void from the
very inception under Section 23 of the Indian Contract Act - it
is made with knowledge of the legal position. It does not
happen to have been void. It is not later discovered to be void.
It was not executed under a mistake of what the Law is. It is
completely covered by the judgment of the Supreme Court in
the case of Kuju Collieries Ltd supra. It does not fall within
the protective ambit of Section 65 and Section 72 of the
Contract Act. The flats were to be purchased upon the illegal
condition. The Respondent succumbed to the illegality. She
failed to keep a straight bat. This was despite the knowledge of
law derived from the legal advice that she obtained. If the
contract was illegal the Respondent need not have been
coerced to enter into such a contract. She could have resisted
the illegality. She could have refused to make the illegal
payment. She could have applied under Section 22 of the
Maharashtra Co-operative Societies Act for transfer of
membership without making the illegal payment. She chose
not to do so. She chose the illegal way of getting the shares
and the premises transferred in her name. Had she applied as
per procedure established under the aforesaid law, the Society
would have been enjoined to admit her as member. It could not
have refused membership upon the refusal to pay transfer fee
in excess of the legally prescribed amount under Section 23 of
the Act. But the Respondent chose an easier option. She paid
the illegal amount in consideration of which she expedited her
transfer and membership status. The consideration being
unlawful, the contract is void.
54.The payment of transfer fee to the Society of such a large
amount which is by way of percentage of the sale price is
illegal under the Co-operative Societies Act and the model
bye-laws issued thereunder being model bye- law No.40
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adopted by the Society as their bye-laws. The premium
required to be paid to the Society is allowed up to the
maximum amount of Rs. 25,000/- only. Any amount in excess
of that payment is, therefore, illegal contribution. The only
exception under the aforesaid bye-laws is the donation which
would be given only with the consent of the member. Hence if
the amount is taken to be not the illegal transfer fee, but
donation in the name of contribution to the Society towards
the repair fund, it would be a valid contract. It could then be
avoided as voidable at the option of the Respondent only if she
proved the coercion alleged. The intrinsic oral as well as
documentary evidence unmistakenly shows lack of that
vitiating factor. The Respondent having sent the typewritten
letter dated 8th July 1992 annexing as many as 7 documents
shows that the latter was not prepared under detention. The
circumstantial evidence points to the irresistible conclusion of
lack of any coercion. In that case the valid donation given by
the Respondent to the Society cannot be refunded or repaid to
55.Consequently it is seen that knowing this precise legal
position the Respondent, Khimji as well as the Society
contracted for Rs.9.63 lakhs which was paid and received as
and by way of transfer fee for transferring the shares and the
premises purchased by the Respondent in the name of the
gracious contribution made by the Respondent as directed by
the Society. The illegal payment of transfer fee was made in
the garb of the legal payment of contribution stated to be
gracious contribution of the Respondent. Any which way one
sees the transaction, it gives the Respondent no leevay for
backtrackking, the tenacious and erudite exposition of the Law
of Contracts made by Mr. Andhyarijuna notwithstanding.
4. The members of the Managing Committee of these societies who are present
in court submit that though under the bye-laws, transfer fees of Rs.25,000/- is
permissible, since the building of the society is quiet old, it requires heavy repairs
and thus society has to demand such contribution under the head of voluntary
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Bombay High Court
contribution or society welfare charges which are ultimately for the benefit of
members of the society.
5. I am not inclined to accept the submissions made by the Managing
Committee members of these two societies. Society in my view can collect only
transfer fees permissible under the bye-laws which is in the sum of Rs.25,000/-
and cannot demand any other contribution by way of voluntary contribution,
donation or towards society welfare charges from the member as condition
precedent for transfer of any flat in the society. Such demand as a condition
precedent for transfer of flat or any premises in the society is contrary to bye-laws
and the Maharashtra Co-operative Societies Act, 1960 and is illegal.
6. This court has already considered this issue at length in the judgment in case
of Bharatiya Bhavan Co-operative Housing Society Limited (supra). I do not
propose to take any different view in the matter.
7. It is thus made clear that the societies will not be entitled to recover any
amount over and above Rs.25,000/- towards transfer fees in respect of transfer of
these two flats when sold as demanded in the letters dated 28th March, 2014 and 3rd
March, 2014 respectively under any such heads as demanded.
8. The report submitted by Commissioner for Taking Accounts is answered
accordingly. Learned Commissioner for Taking Accounts cannot accept the
demand of Bharatiya Friends' Co-operative Housing Society for payment of
Rs.6,27,500/- by way of voluntary contribution and similarly demand of Dimple
Co-operative Society Limited towards society welfare charges. The learned
Commissioner for Taking Accounts is directed to pay Rs.25,000/- towards transfer
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Bombay High Court
fees in respect of both these flats in the society and pay legal charges of
Rs.15,000/-, Rs.500/- and share transfer fee of Rs.200/- as demanded by Bharatiya
Friends' Co-operative Housing Society. Similar legal charges and share transfer fee
if any demanded by Dimple Co-operative Housing Society Limited, the same also
be paid. Report is disposed of accordingly.
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Ajay Sethi
Advocate, Mumbai
45700 Answers
2688 Consultations

5.0 on 5.0

1. CHS has no right to levy such money unless some arrears is pending.
2. In this case you are not liable for payments.
Devajyoti Barman
Advocate, Kolkata
12884 Answers
166 Consultations

5.0 on 5.0

You are liable to pay the maintenance charges as agreed by you while executing the sale deed to he buyer.
If you have forgotten the issue, it cannot be claimed as an excuse.  
This was agreed to be paid by you at that time itself hence it becomes your duty to honor the commitment. 
T Kalaiselvan
Advocate, Vellore
35869 Answers
390 Consultations

5.0 on 5.0

1. The cost of registration on admission of a new member is to be borne by the member who desires to register himself.

2. The amount is a fresh amount and not a maintenance due.
Ashish Davessar
Advocate, Jaipur
22977 Answers
634 Consultations

5.0 on 5.0

1. Yes, despite the above bye law, all societies claim/demand donations for transfer of flat in some other name otherwise they will refuse registration,

2. However, this donation is always paid by the buyer since his name is goint bto be registered and it is not your pending due.
Krishna Kishore Ganguly
Advocate, Kolkata
18535 Answers
449 Consultations

5.0 on 5.0

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