Bombay High Court
Shri Ramana Co-operative Housing Society Ltd.
Versus
S.D.Chittar
Decided On:

Headnote:Section 91- Transfer fees or charges of the flat-Claimed by the Society and recovered accordingly--Question of refund of the amount-Principle of estoppel-Applicability-Held, Society bad no right to charge transfer fees in excess of provision of Re. 1/- under bye-law- The member had right to demand the money back, with damages in the form of interest Co-operative Society Transfers fees or charges of flat-Recovery-Refund; Estoppel; Evidence Act, 1872-Section 115).

       Where the Society bas not said a word for what reasons it bas to charge these transfer fees, as passing of a resolution to charge cannot be a reason or legal ground to authorise the Society to collect such charges which are in no way less than levying toll or a tax. In the absence of that the charges levied by Society would be absolutely an arbitrary act and restriction illegally right over the property held by the member in the Co-operative Society. The Society is no doubt entitled for recovery of the maintenance charges for management of the Society and allied expenses which are required to be paid off to other statutory bodies.

       The Maharashtra Co-operative Societies Act and Rules made there under, do not provide for such a right with the Society to charge transfer fees in addition to Re 1/- prescribed by the bye-laws when the member intends to transfer his property in the Society in favour of third party. One can very well understand a reasonable restriction which can be imposed on a member, who would induct the third party as a member of the Society on the grounds of safe guarding the interest of the Society which may cause nuisance from unwanted element but that does not mean that the Society can have such a right of profiteering out of the Co-operative movement.

       The Society would be ignoring this object and putting a penalty on its member on such occasions when it was ready to help him to solve his problems. Generally they are not suppose to squeeze by arbitrary acts to whomsoever once they get benefit but of the Co. operative movement.

       The resolution only, even if passed, by General Body of the Society would have no overriding effect and binding on the members inter se if it is not approved by the Registrar and even if approved it would be totally illegal. How any Society can charge transfer fees in the manner in which it has been passed in this matter also. The lower Court was absolutely right in granting the award for refund of the amount with interest in the form of damage as claimed. The Government had already imposed the penalty on a member that was also irrational, improper as the Government is not supposed to profit out of its subjects and difficulties, investment of his own hand earned money in the Society when he is compelled to liquidate his investment for some difficulties and to ask him to pay 50% of the excess money of the cost of construction forgetting how long the capita] investment was made and how long his money was locked. The member cannot be penalized in such manner even by the Government and the Society at least had absolutely no right to charge transfer fees in excess of its provision of Re. 1/- under bye-law. The member had therefore right to demand the money back, with damages in the form of interest.

       For Citation : 1989 CTJ 319