Dues of Past Members

[Petty Cash]

Our Society is registered in Mumbai city of Maharashtra. In Nov-2012, I had purchased a flat on the basis of 3 NOCs from the society (which was under an Administrator) stating that the seller is the bonafide member of the society and that there were no outstanding dues from the outgoing member. Additionally, one of the NOC stated that the Share Certificate was not issued till that time. In Jan-2013, all necessary documents for transfer of membership along with the transfer fees were submitted which was duly accepted and acknowledged by the Administrator. However, the cheque for the transfer fee was never encashed. In Jul-2013, the society was handed back to the nominated members of the society from the Administrator. On continuous follow up regarding the status of the transfer application, in Dec-2013, the society verbally informed that some outstanding balance on the flat and that the original seller is registered as the member of the society and that no membership transfer took place ever between the seller and the original seller. And the Share Certificate (society’s copy) still bears the name of the original seller. I did not ask for the original copy of the share certificate from the seller as the Society had stated the NOC that the same was not issued. Now the Society is asking me to pay the outstanding amount and asking me to do the formalities for lost Share Certificate.

My queries are:
1. Whether the society can recover the outstanding amount from me (even though the NOC stated that there was no outstanding amount before I purchased?
2. Whether the society can now reject my transfer application (as per byelaws, they have to inform about any deficiency within 90 days else applicant becomes deemed member)? What are the remedies available to me in this regard? I am ready to pay the transfer fees
3. Should I file a case against the society or the erstwhile Administrator in his individual capacity for issuing a false NOC?

[Dr. Ashok Dhamija]

It may not be possible to advise you without seeing the detailed papers.

However, let me add that you can first write to the society (if you have not done it already) about the factual situation and let them reply in writing instead of mere oral reply. You should try to find out whether the then Administrator acted fraudulently or it was a mere genuine mistake. Was the administrator acting in conspiracy with the seller?

Further, from the facts mentioned by you, it appears that the seller has misrepresented to you. He must have indemnified you for the defects in his title or for the misrepresentations. You may ask him to make good the losses due to such misrepresentations.

If the society bye-laws permit you to get the status of deemed member, then you may be entitled to the same. But, it depends what are the rights and liabilities of a deemed member. You may still be liable to pay the lawful society charges, as admissible under the bye-laws.

In case nothing works, you can of course, approach the appropriate forum / court for seeking the legal remedy, since it appears that you are a bona fide buyer for consideration. If you are forced to file a case, you’ll have to make society a party, and in addition, the then administrator may also be made party depending upon the detailed factual situation (i.e., replies received from society).

Generally speaking, if the administrator was acting in a bona fide manner, exercising his lawful powers on behalf of the society, the society may also be held responsible for his acts and at least you should not be made to suffer for somebody else’s fault. An outsider (i.e., a new buyer like you) may not always know about “indoor management” of the society and you can try to make use of the legal principles on the lines of the doctrine of indoor management.

Please consult some good lawyer at Mumbai who is well versed in society laws for proper guidance.     

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Dr. Ashok Dhamija is a New Delhi based Supreme Court Advocate and author of law books. Read more about him by clicking here. List of his Forum Replies. List of his other articles. List of his Quora Answers. List of his YouTube Videos.

[Petty Cash]

Thank you so much Sir. Would you be able to suggest some good lawyer who can fight the case. Since the society has refused to given anything in writing. They are contending that they will not reply to any queries of a non-member.

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