Case Note & Summary
The petitioner, Alankar Sahkari Griha Rachana Sanstha Maryadit, a housing society, challenged the order dated 12th December, 2013 passed by the Maharashtra State Cooperative Appellate Court, Mumbai Bench at Pune, which directed the society to pay Rs.4,75,000 with interest to the respondents, Atul Mahadev Bhagat and another. The respondents were original members of the society and were allotted plot No. 59. Due to some violation of conditions, the society threatened to dispossess them, leading to Dispute No. 223 of 2000, which was compromised with consent terms requiring the respondents to deposit Rs.50,000 as security for completing construction within three years. Later, the respondents decided to sell the plot to a third party and agreed to pay transfer fees of Rs.25,000 to the society. However, the society allegedly demanded Rs.5,00,000 for regularizing the transfer, which the respondents paid under pressure by issuing two demand drafts of Rs.2,50,000 each on 27th April, 2005. After selling the plot, the respondents sent a demand letter on 4th July, 2005 seeking refund of the excess amount, but the society refused. Consequently, the respondents filed Dispute No. 398 of 2005 before the Cooperative Court, Pune, for recovery of Rs.6,98,740 along with interest. The Cooperative Court passed an order on 1st October, 2007 directing the society to pay Rs.5,00,000 with interest at 11% per annum from 29th December, 2005 till realization. The society appealed, and the Appellate Court partly allowed the appeal, reducing the amount to Rs.4,75,000 but maintaining the interest rate. The society then filed the present writ petition challenging the appellate order. The High Court, after hearing both sides, found no merit in the petition. The court noted that the society had no authority to demand such a large sum for transfer regularization and that the amount was collected under pressure. The court upheld the appellate order, directing the society to pay Rs.4,75,000 with interest at 11% per annum from 29th December, 2005 till realization. The writ petition was dismissed, and the civil applications were disposed of accordingly.
Headnote
A) Cooperative Law - Refund of Excess Amount - Unjust Enrichment - Maharashtra Cooperative Societies Act, 1960 - Sections 91, 96 - The petitioner-Society demanded and collected Rs.5,00,000 from the respondents for regularizing transfer of plot, which was found to be excessive and without authority. The Cooperative Court and Appellate Court directed refund of Rs.4,75,000 with interest. The High Court upheld the order, holding that the Society cannot arbitrarily charge such amounts and must refund the excess. (Paras 1-10) B) Cooperative Law - Interest - Refund with Interest - Maharashtra Cooperative Societies Act, 1960 - Section 91 - The respondents were entitled to interest at 11% per annum from the date of payment (29th December, 2005) till realization, as the amount was collected under pressure and retained by the Society without justification. (Paras 2-10)
Issue of Consideration
Whether the petitioner-Housing Society was justified in demanding and collecting Rs.5,00,000 from the respondents for regularizing the transfer of their plot, and whether the respondents are entitled to refund of the excess amount with interest.
Final Decision
The High Court dismissed the writ petition and upheld the order of the Maharashtra State Cooperative Appellate Court dated 12th December, 2013, directing the petitioner-Society to pay Rs.4,75,000 with interest at 11% per annum from 29th December, 2005 till realization. Civil applications disposed of.
Law Points
- Cooperative society cannot demand arbitrary amounts for transfer of membership
- Refund of excess amount collected without authority
- Interest on refund from date of payment
- Jurisdiction of Cooperative Court under Maharashtra Cooperative Societies Act
