Mumbai Housing Society Queries: 'Sale Of Open Parking By Builder, Society Unlawful,' Says Expert

Q. While handing over the project to the society in 1999, the builder had given a list of allottees, who had been given designated parking slots. One member had given a donation of Rs5 lakh to the society in 2015, however, the person’s name doesn’t appear in the said list. The society has also not issued any letter of parking allotment to this member. Still, this individual is parking the car in the open parking area without paying any charge. The member hasn’t paid heed to the notice served by the society. Our committee has been recently elected and the issue came to light after going through the earlier records. How should we deal with it as there are many who are willing to give Rs25 lakh for the said parking slot?

Harshad Sheth, Ghatkopar

A. Earlier, builders were not allowed to sell the parking slots to home buyers. They can only sell the closed parking after the enactment of RERA in 2017 as per the MahaRERA rules. The society is the owner of the common and open space and can allot the open parking slots to the members as per the parking rules approved by the general body.

Though this has been a regular practice, the open parking allotted to all the members by the builder/society by taking money is not valid in law. Taking money in the form of voluntary donation by the society towards allotment of open parking slots is again not something that any managing committee can decide arbitrarily. The society can accept voluntary donations from the members, however, giving any favours in lieu of it defeats its purpose.

In case, your society doesn’t have a parking policy, it can frame one and get it approved by the general body. The bye-laws provide that the parking may be allotted on the first come, first serve basis. If the eligible members are more than the available open parking slots, the society has to adopt a fair and transparent method. In such cases, the allotment is on a rotation basis or the lottery system on an annual basis. You may discuss this issue with the members and mutually decide about the parking policy to be adopted by the society. The members who have paid an additional amount to the builder/society may also be considered, while framing the policy.

The issue of the member not making the payment and not having any allotment letter for parking may also be escalated to the general body for default in payment and the decision may be taken accordingly. (refer bye-laws 78-84)

Q. Every resident is required to take society shares to become a member. Can the society increase the share capital by allotting additional shares to members?

Mayuresh Kulkarni, Mulund

A. Yes, the society can issue additional shares within the limit of the authorised share capital mentioned in the bye-laws approved by the registrar. In case, a society has exhausted that limit, it may have to duly amend the bye-laws with the approval of the district deputy registrars.

Issue of shares is one of the ways in which the society can raise funds. At the time of registration, each society has to specify the nature of liability (limited or unlimited) in the application form. Subsequently, society bye-laws are required to provide the manner in which the funds may be raised. They also ought to specify the fund limit, maximum share capital which any member may hold and the purpose for which the funds would be made applicable. Thereafter, four copies of the revised byelaws need to be filed with the registrar for approval. Redevelopment and amalgamation of societies are two scenarios where a need to increase the authorised share capital may be felt. (refer bye-laws 7, 8, 166)

Q. Recently, one of the members passed away and the application to transfer the flat has been received by the society along with the required legal documentation. However, the person, in whose name the transfer is to be made, is unfit for employment and dependent upon his married sister. The society is concerned how its liabilities will be discharged if the flat and the shares are transferred in his name? Please advise.

Peter D’souza, Borivali

A. Every member has to contribute to his share of the common expenses irrespective of whether the person is earning or not. If the prospective member is nonearning, the next kin or any other person on whom he is dependent has to take the responsibility to discharge his liabilities.

Your society is required to obtain an undertaking from the next kin (the married sister in your case) on whom the prospective member is depended for discharge of liabilities. The undertaking shall specify the details like name, contact details, occupation, office and residential addresses, name and address of the employer, monthly income, etc, of the person willing to take the financial responsibility.

Hence, the married sister has to give an undertaking to the society, informing that she is willing to discharge all the liabilities, current and future payable by her brother, on being admitted as a member. She should also undertake that the society would be entitled to initiate action against her and her brother to recover the dues as per section 154B-29 of the Maharashtra Co-operative Societies Act in case of default.

The questions are answered by Sharmila Ranade, a legal expert associated with Mumbai Grahak Panchayat.

The questions, in brief, may be sent to fpjchs@gmail.com