Karnataka High Court
M/S Sobha Limited vs The Deputy Registrar Of Co-Operative ... on 3 March, 2026
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IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 3RD DAY OF MARCH, 2026
BEFORE
THE HON'BLE MRS. JUSTICE M G UMA
WRIT PETITION NO. 5934 OF 2024 (CS-RES)
BETWEEN:
M/S SOBHA LIMITED
A COMPANY REGISTERED UNDER
THE COMPANIES ACT, 1956
HAVING ITS REGISTERED OFFICE AT
"SOBHA" DEVARABISANAHALLI
SARJAPUR-MARATHALLI OUTER RING ROAD
BELLANDUR POST
BENGALURU - 560 103
REPRESENTED BY ITS AUTHORISED
SIGNATORY SRI. PRASAD M.S.
... PETITIONER
(BY SRI: MADHUKAR M DESHPANDE, ADVOCATE)
AND:
Digitally signed
1. THE DEPUTY REGISTRAR OF
by NANDINI B G CO-OPERATIVE SOCIETIES AND
Location: High APPELLATE AUTHORITY, ZONE-I
Court of
Karnataka BANGALORE URBAN DISTRICT
"SAHAKARA SOUDHA", 1ST FLOOR
3RD MAIN, 8TH CROSS, MARGOSA ROAD
MALLESHWARAM, BENGALURU - 560 003.
2. ASSISTANT REGISTRAR OF
CO-OPERATIVE SOCIETY
1ST ZONE, BENGALURU URBAN DISTRICT
OFFICE AT NO.146, "SAHAKARA SOUDHA"
1ST FLOOR, 3RD MAIN, 8TH CROSS,
MARGOSA ROAD, MALLESHWARAM,
BENGALURU - 560 003
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3. SOBHA HRC PRISTINE APARTMENT OWNERS
CO-OPERATIVE SOCIETY LTD
REGISTERED UNDER KARNATAKA
CO-OPERATIVE SOCIETIES ACT, 1959
AMRUTHAHALLI MAIN ROAD
JAKKUR, BANGALORE-560 064
REPRESENTED BY ITS PRESIDENT
MR. TARAMANGALAM KAILASAM
PARASURAMAN ALSO KNOWN AS
T.K. PARASURAMAN.
4. THE STATE OF KARNATAKA
BY ITS PRINCIPAL SECRETARY
DEPARTMENT OF CO-OPERATION
M.S. BUILDING, DR. AMBEDKAR VEEDHI
BANGALORE - 560 001.
5. SOBHA HRC PRISTINE OWNERS ASSOCIATION
SOBHA HRC PRISTINE APARTMENT BUILDING
SY.NO.87/2, 87/3, 89 & 111
JAKKUR VILLAGE, AMRUTHAHALLI MAIN ROAD
YELAHANKA HOBLI, BANGALORE NORTH TALUK
BANGALORE - 560 097
REPRESENTED BY ITS PRESIDENT.
(CAUSE TITLE AMENDED ADDING
R5 AS PER COURT ORDER DATED 19.03.2024)
... RESPONDENTS
(BY SRI: YOGESH D. NAIK, AGA FOR R1, R2 & R4
SRI: PRADEEP KUMAR P.K., ADVOCATE FOR C/R3
V/O DATED 13/3/24, SRI. G. SRIDHAR AMICUS CURIAE
SMT: SNEHA NAGARAJ, ADVOCATE FOR R5)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226
AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO
QUASH THE ORDER AT ANNEXURE-A, DATED 07/02/2024
PASSED BY THE R1 IN APPEAL BEARING DRB-
1/APPEAL/30/2023-24. AND QUASHING / CANCELING
REGISTRATION GRANTED BY THE R2 TO R3 SOCIETY VIDE SL.
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NO. ARB-44/REGISTRATION/10/54504/2023-24 DATED
06/09/2023 AT ANNEXURE-B. AND AWARD COSTS OF THIS
PROCEEDINGS. AND ETC.,
THIS WRIT PETITION HAVING BEEN HEARD AND
RESERVED ON 07.01.2026 AND COMING ON FOR
PRONOUNCEMENT OF ORDER THIS DAY, THE COURT MADE
THE FOLLOWING:
CORAM: HON'BLE MRS JUSTICE M G UMA
CAV ORDER
The petitioner has approached this Court seeking
issuance of writ in the nature of certiorari to quash the order
dated 07.02.2024 passed by respondent No.1, produced as per
Annexure-A and to quash/cancel the registration granted by
respondent No.2 to respondent No.3 - Society dated
06.09.2023, produced as per Annexure-B.
2. Facts of the case in brief are that, the petitioner -
M/s Sobha Limited, a Company registered under the Companies
Act, 1956, has filed this writ petition seeking the above reliefs.
It is contended that the petitioner, a Real Estate Developer,
undertook to develop a housing project by name 'Sobha HRC
Pristine' consisting of row houses and multi-storied residential
apartment buildings, in 4 phases situated at Jakkur village,
Yelahanka Hobli, Bangalore North Taluk, with 395 units i.e. 381
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apartments and 14 row houses, with club house and other
common amenities. This 4 phase project was registered with
the Karnataka Real Estate Regulatory Authority, under the
provisions of Real Estate (Regulation and Development) Act,
2016 (hereinafter referred to as 'RERA'). The petitioner
completed construction of the apartment and villas and
obtained the Occupancy Certificate dated 26.05.2023 from
Bruhath Bengaluru Mahanagara Palike (BBMP).
3. It is stated by the petitioner that, after obtaining
the Occupancy Certificate on 26.05.2023 under the provisions
of RERA, it commenced the execution and registration of sale
deeds in respect of the apartments and villas in favour of
various allottees. The sale deeds in respect of 264 units out of
395 have been executed and registered in favour of the
purchasers.
4. It is stated that the local law that is applicable to
the project is Karnataka Apartment Ownership Act 1972,
(hereinafter referred to as 'KAOA') and Karnataka Apartment
Ownership Rules, 1974 (hereinafter referred to as KAOR').
A Deed of Declaration dated 12.06.2023 was submitted along
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with the bye-laws of Sobha HRC Pristine Owners Association
(for short 'the Association') as per Form-A under the provisions
of KAOA and KAOR and registered as Document No.3588/2023-
24. The bye-laws are enclosed as per Annexure-C and Deed of
Declaration is as per Annexure-D. The Deed of Declaration
along with the bye-laws was duly filed with the Deputy
Registrar of Co-operative Societies vide letter dated
21.06.2023, as required under Section 13 of KAOA, which has
been duly acknowledged. Thus the maintenance, administration
and management of the common areas, amenities, equipments
and facilities in the project was undertaken by forming an
association of owners by executing and registering the Deed of
Declaration under the name of the Association and executed
Form-B as provided in KAOA, submitting their unit to the
provisions of the said Act including few members of respondent
No.3 - Society.
5. It is stated that respondent No.3 led by one
Mr. T K Parasuraman, claiming to be the Chief Promoter
approached respondent No.2 with misleading facts, suppressing
the material facts and without adhering to the provisions of
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KAOA and managed to obtain the Certificate of Registration of
respondent No.3 by name Sobha HRC Pristine Apartment
Owners Co-operative Society Limited (for short, 'the Society')
under the provisions of Karnataka Co-operative Societies Act,
1959 (for short 'the KCS Act'). Such registration of the Society
is illegal and contrary to the objectives of KCS Act, thereby
hijacked the objectives of bye-laws of the Association as
provided in the Deed of Declaration. Therefore, issuance of
Registration Certificate dated 06.09.2023 as per Annexure-B is
erroneous. Out of 395 units, only 30 to 40 are the members of
respondent No.3 -Society. None of the other owners have given
their consent to be part of respondent No.3 - Society.
6. It is stated that respondent No.3 - Society was
registered with its bye-laws referred to in the petition and
produced as per Annexure-E and majority of such objectives do
not match with the principles of co-operative movement and
economic interest of the members of respondent No.3 -
Society. Therefore, it is contended that respondent No.3 -
Society has adopted the bye-laws, which are contrary to the
objectives of Co-operative Society under KCS Act, which is
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initiated only by handful of persons with malafide intentions.
Under such circumstances, the petitioner has preferred an
appeal before respondent No.1 under Sections 106(1)(a) &
(2)(a) of KCS Act, challenging registration of respondent No.3 -
Society. The copy of appeal memo and the interim application
are produced as per Annexures-F and F1. Respondent No.1,
without holding any hearing, worth mentioning, disposed off
the appeal vide order dated 07.02.2024. The parties to the
litigation were never heard. The said order is produced as per
Annexure-G. Therefore, it is contended that there is gross
violation of principles of natural justice and respondent No.1
never considered the contentions of the petitioner on merits.
Hence, the petitioner has approached this Court.
7. It is stated that, out of 395 units, the title in respect
of 264 units have been transferred in favour of the purchasers.
The title in respect of the remaining units is yet to be
transferred and it remains with the petitioner and the land
owners. Therefore, it is contended that the petitioner is also the
owner of few apartments, units, row houses and it is effected
by registration of respondent No.3 - Society. Therefore, the
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petitioner prayed for quashing Annexure-A issued by
respondent No.1 and Annexure-B issued by respondent No.2, in
the interest of justice.
8. Heard Sri Madhukar M Deshpande, learned counsel
for the petitioner, Sri Yogesh D Naik, learned Additional
Government Advocate for respondent Nos.1, 2 and 4,
Sri P K Pradeep Kumar, learned counsel for respondent No.3,
Smt Sneha Nagaraj, learned counsel for respondent No.5 and
Sri G Sridhar, learned Amicus Curiae. Perused the materials on
record.
9. Learned counsel for the petitioner contended that
as per the averments made in the petition, the petitioner is the
developer who developed the property and submitted the same
under the provisions of KAOA. Respondent No.5 is the
Association which has taken over the property for maintenance,
administration and management. In the meantime, respondent
No.3 started claiming to be the Society registered under KCS
Act. Learned counsel contended that out of 395 owners of
apartments, 238 have submitted to KAOA by submitting the
required Form. The meeting of the members was conducted
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and even the office bearers are elected as per Annexure-R5,
duly constituting the Association. Thus, respondent No.5 has
stepped into the shoes of the petitioner for all practical
purposes.
10. Learned counsel contended that there are no
commercial units in the project developed by the petitioner.
When there are only residential apartments and row houses,
the provisions of KCS Act has no application. It is only the
provision of KAOA, which will have an application. He further
contended that Annexure-B dated 06.09.2023 came to be
issued at the instance of few owners of apartments, declaring
the project as registered under the KCS Act. When Annexure-B
was challenged before respondent No.1 under Section 106 of
KCS Act, the said appeal came to be dismissed by passing
Annexure-A dated 07.02.2024. There is no application of mind
by respondent No.1 and the matter was never heard by
providing an opportunity to the petitioner.
11. Learned counsel for the petitioner has placed
reliance on the decision in Mr.Arunkumar R and Others Vs
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State of Karnataka and Others1, to contend that the
co-ordinate Bench of this Court has categorically held that since
the project does not involve commercial units, the provisions of
KCS Act cannot have any application and therefore, the
Registrar of Co-operative Societies was prohibited from
registering the Society for the purpose of maintaining,
managing and administering the residential apartment. Learned
counsel contended that this decision of the co-ordinate Bench
was affirmed by the Division Bench of this Court in Proposed
Starnest Apartment Owners Co-operative Society Ltd. Vs
State of Karnataka and Others2. Learned counsel referring
to paragraphs 16 to 19 contended that the Division Bench has
endorsed the view expressed by the learned Single Judge,
regarding application of KAOA and held that the provisions of
KCS Act has no application where the project is purely of
residential nature. Learned counsel submitted that there are
several such decisions rendered in various writ petitions, where
similar opinion is formed.
12. Learned counsel also placed reliance on the decision
of Co-ordinate Bench of this Court in Akhilesh Anand and
1
WP No.25528/2023 DD 23.02.2024
2
WA No.564/2024 DD 18.06.2024
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Others Vs State of Karnataka and Others3 and contended
that the co-ordinate Bench of this Court raised specific points
for consideration and answered the same supporting the
contention taken by the petitioner. The Court has referred to
the decision in VDB Celadon Apartment Owners
Association Vs Praveen Prakash and Ors4 and held that the
said decision was rendered in a situation where RERA was not
made applicable and the question that had arisen for
consideration therein is as to who can maintain an apartment
complex in the absence of RERA.
13. Learned counsel referring to the answer to point
No.3, contended that it is categorically held that there is no
conflict between KAOA and RERA and made it clear that
inasmuch as RERA is applicable pre-ownership and KAOA is
post-ownership, while holding that there is conflict between
KOFA and RERA and held that it is the provisions of RERA which
would override that of KOFA, wherever there is repugnancy.
The Court has also referred to the decision of the Division
Bench of this Court in Proposed Starnest Apartment
3
WP No.27341/2024 DD 30.06.2025
4
WA No.974/2019 DD 06.11.2019
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Owners Co-operative Societies Ltd. (supra) and held that
the Co-operative Society can only be registered to the
Apartments, where there are commercial units and to which the
provisions of KOFA was applicable, but the same would no
longer be applicable after RERA coming into force.
14. Learned counsel also contended that the facts in the
said case was slightly different, as the construction has not
been completed despite the period fixed having lapsed and
several allottees have formed themselves into a Co-operative
Society, pursuant to the provisions of RERA, which is not the
case in hand.
15. Placing reliance on these decisions, learned counsel
for the petitioner contended that the Apartment Owners
Association was formed and the declaration in the prescribed
format was submitted on 12.06.2023 and after execution of the
sale deeds, handing over of units is already completed between
December, 2023 to October, 2025. Under such circumstances,
Annexure-A passed by respondent No.1 and the Registration
Certificate granted by respondent No.2 as per Annexure-B are
required to be quashed.
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16. Learned counsel for the petitioner contended that
IA No.3 of 2024 filed by respondent No.3 seeking direction to
the petitioner to comply various provisions of RERA is not
maintainable and hence, the same is liable to be dismissed.
17. Learned counsel for respondent No.5 supporting the
contention taken by the petitioner contended that, respondent
No.5 is an Association of owners, formed pursuant to
registration of sale deeds, preceded by the agreements to sell,
entered into between the petitioner and various purchasers.
The Association of owners was formed under KAOA and KAOR
by executing a Deed of Declaration in Form-A as well as in
Form-B as prescribed under Sections 2 and 5 of KAOA and Rule
3 of KAOR. As per the terms of the agreements to sell and the
sale deeds, each owner is required to be the member of the
Owners' Association. Therefore, there was contractual
obligation on the part of the owners to be members of the
Association, which is in conformity with the requirements of
KAOA. The said obligation was discharged by majority of
owners and the same cannot be found fault with. The said
compliance of contractual obligation was upheld by the Division
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Bench of this Court in VDB Celadon Apartment Owners
Association (supra). Therefore, she prays for allowing the
petition, in the interest of justice.
18. Per contra, learned counsel for respondent No.3
opposing the petition submitted that various provisions of RERA
requires registration of a Society under the provisions of KCS
Act. He refers to Section 17 of RERA which deals with transfer
of title and handing over documents with regard to common
areas to contend that RERA is legislated to protect the interest
of owners and it is a Central legislation, which will prevail over
the State legislation.
19. Learned counsel further contended that respondent
No.3 has challenged the application of KAOA after RERA coming
into force and the said writ petition is still pending
consideration. However, whatever the provisions in KAOA which
are repugnant to RERA cannot be made applicable by referring
to Section 11(4)(e) and (f) of RERA. Learned counsel
submitted that in Karnataka, only the Co-operative Society can
be formed. He placed reliance on the decision in Sobha
Hibiscus Condominium Vs Managing Director M/s. Sobha
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Developers Ltd. and Another5, to contend that the Hon'ble
Apex Court categorically held that, the voluntary consumer
association will only be a body formed by a group of persons
coming together without being mandated by any other
provisions of law. Such Association which consists of members
of flat owners in a building, which has come into existence
pursuant to a declaration which is required to be made
compulsorily under the provisions of KAOA cannot be said to be
a voluntary association to maintain a complaint under the
provisions of Consumers Protection Act, 1986.
20. Learned counsel relying on the decision in
Moulivakkam Trust Heights Flats Affected Buyers
Association Vs M/s Prime Sristi Housing Pvt. Ltd., and
Ors,6 contended that the Hon'ble Apex Court has upheld the
view taken by the National Consumer Disputes Redressal
Commission that even a Residents' Welfare Association, if
registered under a statute will qualify as a consumer
association under the provisions of Section 12 of the Consumer
Protection Act, 1986 and not otherwise. Therefore, in the
5
(2020) 3 SCR 824
6
2017 SCC Online NCDRC 163
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absence of registration of a Society under the Co-operative
Societies Act, mere voluntary association of owners of units,
cannot prosecute and defend any litigation. Therefore,
registration of such association under the provisions of KCS Act
is a must.
21. Learned counsel for respondent No.3 places reliance
on the decision of the Hon'ble Apex Court in Forum for
People's Collective Efforts and Another Vs State of West
Bengal and Another7, to contend that, the Hon'ble Apex
Court has considered repugnancy between the provisions of
RERA and West Bengal's Housing Industry Regulation Act, 2017
(for short, 'WB-HIRA') and held that the provisions of the State
enactment is repugnant to the Central RERA. Therefore,
contended that after RERA coming into force, the owners of the
units are required to be registered as a Co-operative Society
and accordingly, respondent No.3 was registered under KCS
Act, which cannot be found fault with. Therefore, the petitioner
is required to comply various provisions of RERA, including
Sections 11(4) (e) and 17. Accordingly, IA No.3 of 2024 came
to be filed and the same is liable to be allowed.
7
(2021) 8 SCC 599
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22. In reply, learned counsel for the petitioner
contended that the provisions of KAOA is made applicable to
the projects where there are only residential apartments. The
provisions of KOFA are made applicable where the projects are
having residential and commercial or only commercial units.
The provisions of RERA is mostly applicable for pre-ownership
stage, whereas, only under certain circumstances some
provisions are applicable to post ownership. Learned counsel
submitted that the provisions of RERA is silent about the
procedure that is to be followed for maintenance and any other
issues that may arise post ownership.
23. Learned counsel further submitted that the decision
of the Hon'ble Apex Court in Forum for People's Collective
Efforts (supra) is not applicable, as the Hon'ble Apex Court has
found the provisions of WB-HIRA repugnant to the provisions of
RERA and held that several provisions of WB-HIRA are
repugnant to RERA. But in case of KAOA, there is no such
repugnancy. Under such circumstances, the same cannot be
made applicable to the present case.
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24. Learned counsel further contended that in WB-
HIRA, the Hon'ble Apex Court compared the provisions of the
State enactment - WB-HIRA with the provisions of the Central
enactment - RERA. It applied three different principles to find
out the repugnancy between two statutes to record a
categorical finding that the State enactment - WB-HIRA is
nothing but a copy paste of the provisions of RERA and
therefore, it is repugnant to the Central legislation. Thus, in
exercise of jurisdiction under Article 142 of Constitution of
India, struck down WB-HIRA.
25. Learned counsel submitted that in the State of
Karnataka, KOFA was made applicable to pre-ownership stage
and the provisions of KAOA is for post ownership. However,
after RERA came into force, certain provisions of KOFA held to
be repugnant to the Central enactment - RERA. This Court
consistently held that the provisions of KAOA are not repugnant
to RERA and both these enactments serve different purposes.
There are thousands of owners' associations formed and
functioning under KAOA throughout the State. If it is to be
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held that such associations are not recognized under RERA, it
may have serious consequences.
26. Learned counsel for the petitioner contended that
the same cannot be applied to the provisions of KAOA as the
co-ordinate Bench of this Court repeatedly held that the
provisions of KAOA are not repugnant to the provisions of
RERA. It is also held that these enactments would govern the
field at different stages, one supplementing the other.
Therefore, the decision in Forum for People's Collective
Efforts (supra), cannot be made applicable to the present
case.
27. Learned counsel for the petitioner contended that if
the object and various provisions of KAOA are compared with
the object and provisions of RERA, it is clear that even during
1972 the State has made exhaustive provisions under KAOA.
The object with which these two enactments were enacted are
totally different. They operate under different circumstances.
28. Learned counsel for the petitioner contended that
various chapters and provisions under RERA do not deal with
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heritability, maintenance of the units, management of common
areas etc., It does not define the 'association of the apartment
owners', whereas, we find such definition under KAOA. He
further submitted that if the provisions of KAOA is considered in
light of the provisions of KCS Act and Karnataka Societies
Registration Act or Companies Act, minimum interference from
the outside forces is found in KAOA. The apartment owners
being the members of association are supreme to take a
decision for the welfare of all. It is nothing but a self governing
body in a democratic set up. There will not be any interference
by any of the agencies of Government. But RERA only defines
the word 'allottee' under Section 2(d), it does not define the
word 'association' at all. The provisions in RERA is made
applicable not only to apartments but also to plots.
29. Learned counsel for the petitioner contended that
the phrases used under various sections of RERA while referring
to the words 'association' or 'Society' or 'co-operative Society'
or 'federation', uses the word 'under the laws applicable'.
Therefore, the local law that is applicable to the State of
Karnataka is KAOA, which is consistent with the object with
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which the multi storied apartments were constructed. Various
provisions under RERA makes its clear that an option is given
to the allottees to form an association under any of the local
laws, which may be applicable.
30. Learned counsel contended that Section 11(4)(f),
Section 2(p) of RERA defines the word 'competent authority',
Section 17 deals with 'transfer of title', Section 19 deals with
'rights and duties of allottees'. The allottee is required to
participate in the formation of such association or Society or
co-operative Society or federation. Section 31 of RERA deals
with filing of complaints. The wordings used therein is 'any
aggrieved person' can file a complaint against promoter,
allotee, real estate agent as the case may be. The explanation
appended to this Section makes it clear that the section shall
include association of allottees. Therefore, it is clear that an
association of allottees can definitely maintain any complaint
under the provisions of RERA against the promoters, real estate
agents etc., However, he contended that none of the allottees
or the owners have filed any such complaints against the
petitioners being the promoter.
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31. Learned counsel referring to the decision of the
Hon'ble Apex Court in Sobha Hibiscus Condominium (supra),
contended that the Court has referred to the order of the
National Consumer Commission dated 13.05.2015. The Court
had no occasion to refer to the provisions of RERA, which came
into effect only on 28.10.2016, which is having Section 31,
which deals with filing of complaints. The Hon'ble Apex Court
has considered only the provisions under the Consumer
Protection Act, 1986 and held that voluntary consumer
association has not filed the complaint under the Consumer
Protection Act. Thus, the Hon'ble Apex Court was referring to
class of action and not to individual actions. Learned counsel
also referred to Section 88 of RERA to contend that there is no
bar for application of any other laws.
32. Learned counsel contended that if the wordings in
Rule 2(b) of the Karnataka Real Estate (Regulation and
Development) Rules, 2017 (hereinafter referred to as 'RERR'),
which defines 'association of allottees' is compared with Section
3(d) of KAOA, which defines 'association of apartment owners',
such conjoint reading reveals that the association will cover the
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'association of allottees' under RERA. Such Association is
Association of apartment owners under KAOA. More so, when
functioning of the association of allottees are not separately
dealt with under RERR as the same is governed by other local
laws that may be made applicable.
33. Learned counsel contended that taking into
consideration various practical difficulties in implementing the
provisions of RERA and KAOA, the Government of Karnataka is
said to be preparing an amendment Bill where hopefully the
'association of allottees' will also be defined to take care of
vacuum in the present enactment and that the Bill is said to be
mandating that there must be only one association to one
project.
34. Learned counsel contended that only 18 owners in
whose favour the sale deeds are already executed and who
have submitted Form-B declaration, joined hands with few
allottees in favour of whom the sale deed is not yet executed,
in forming the co-operative Society. All these 18 owners have
submitted Form-B declaration in compliance of the contractual
obligation and they are the members of respondent No.5 -
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Association. Under such circumstances, these 18 owners
cannot have dual membership to constitute a co-operative
Society. Otherwise, a group of few owners or allottees can go
on forming different association under KAOA, under Societies
Registration Act, under Co-operative Societies Act and also
under the Companies Act. Then the question arises who is
responsible to maintain the building and the common areas.
Unless there is restriction to have a single association, there
will always be danger of parallel associations or societies,
companies or federations. When in respect of one project a
common electric and water bill is generated, when the owners
are required to maintain the common areas and the facilities,
functioning of parallel associations will definitely create chaos
and it is not in the interest of the owners or even the allottees.
35. Learned counsel contended that the Division Bench
of this Court in Proposed Starnest Apartment Owners Co-
operative Society Ltd. (supra), referred to Section 11 of
RERA and has arrived at a right conclusion that the provision of
co-operative Society Act, are not applicable.
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36. In view of the above, learned counsel for the
petitioner submitted that respondent No.3 cannot be permitted
to run a parallel Society, when there is already respondent No.5
- Association of owners formed in compliance of the contractual
obligations as per the terms of agreements to sell and the sale
deeds and also the statutory obligations as per the provisions
of KAOA. Therefore, he prays for allowing the petition, in the
interest of justice.
37. In reply, learned counsel for respondent No.5
contended that it is an association of owners which submitted
the declaration as provided under KAOA and the deed of
declaration is registered as required under law. Almost all the
owners are the members of respondent No.5 - Association. It is
this Association which is maintaining the common areas, since
the project is complete and as many as 323 owners out of 395
have submitted themselves to the jurisdiction of KAOA and are
the members of respondent No.5 - Association. Respondent
No.3 - Society is formed at the instance of only a handful of
allotees and owners, majority of whom are the members of
respondent No.5 - Association. There cannot be any two
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independent Associations or Society in a project as the same
would lead to chaos. At the same time, there cannot be two
independent Associations, one for maintaining the common
areas and one for agitating the grievance of the members.
38. Learned counsel contended that the decision of the
Division Bench in Proposed Starnest Apartment Owners
Co-operative Society Ltd. (supra) is binding on all the
parties. The Division Bench has rightly held that it was purely a
residential project and the owners were having contractual
obligation under deed of agreement to sell and the sale deed to
submit themselves to the provisions of KAOA. The Court out-
rightly rejected the contention that it is only the Co-operative
Society which can be formed under the provisions of KCS Act
after analyzing the various provisions of law. Learned counsel
submitted that even though this decision of the Division Bench
is under review, no stay is granted to its decision and hence the
same is binding.
39. Learned counsel for respondent No.5 contended
that the facts and circumstances of the case in Akhilesh
Anand (supra) are entirely different. The project which was
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the subject matter in the said case was being developed in a
phased manner. Three towers were already completed and an
association under Societies Registration Act was formed,
whereas two other towers were not completed. Therefore, it
was held that the allottees whose project is not yet completed
can form a co-operative Society, but the same cannot be
applied to the owners who already acquired title under the
registered sale deeds. Learned counsel referring to paragraph
22.11 in Akhilesh Anand (supra) contended that the co-
ordinate Bench has made the position very clear that when the
project is complete and the occupancy certificate is already
received, the owners have submitted themselves to the
provision of KAOA, it is only the association of owners which is
authorized to maintain the common areas and the buildings.
Hence, learned counsel for respondent No.5 contended that
respondent No.5 being the Association of owners under the
provisions of KAOA is even recognized by the co-ordinate
Bench. Learned counsel also contended that the co-ordinate
Bench has made it very clear that the provisions of RERA are
applicable to pre-ownership, whereas, the provisions of KAOA
are applicable post ownership. Respondent No.5 is the
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association of owners formed after getting the sale deeds and
hence it represents all the owners in the project, which is
already completed and occupancy certificate is issued.
40. In reply, learned counsel for respondent No.3
contended that since the Central legislation - RERA came into
existence in 2016, the provisions of KAOA which is a local law,
cannot be made applicable to the project in question.
Admittedly, the project in question is submitted to the
provisions of RERA. He submitted that under KAOA, there is no
provision regarding registration of an Association. It only
provides submitting the Deed of Declaration as defined under
Section 3(j) of KAOA, which is to be registered with the Sub
Registrar, whereas, the association or a society or a co-
operative Society referred to under Section 11(4)(e) of RERA,
mandates registration of the same under any of the local
enactments or companies Act as the case may be. He also
refers to Sections 11(4)(f) and 17 of RERA to contend that the
intention of the legislature is very clear that the promoter is
duty bound to facilitate the formation of such Society under the
local laws.
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41. Learned counsel contended that mere registration
of Deed of Declaration under Section 13 of KAOA will not be
considered as an Association registered under any local law or
under the Companies Act. He referred to the report of
Standing Committee formed for the purpose of studying the
requirements before enacting RERA and with reference to
Clause-15, he contended that the said clause is now
incorporated as Section 17 of RERA. He referred to Annexure-E
to submit that bye-laws of the respondent No.3 - Society is
approved and the same is in place.
42. Learned counsel placed reliance on the decision of
Hob'ble Apex Court in Suman Jindal and another Vs M/s
Adarsh Developers8 to contend that even when the
apartment is purely a residential one, the provisions of RERA
are applicable.
43. Learned counsel contended that even though the
decision of Akhilesh Anand (supra) is referred to by the
learned counsel for the petitioner and respondent No.5, the
findings recorded therein disclose that the decision of the
8
(2019) 7 SCR 154
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Division Bench in Proposed Starnest Apartment Owners
Co-operative Society Ltd. (supra) was distinguished by
assigning proper reasons. It has held that it is only the co-
operative Society under the provisions of KCS Act, which is
required to be formed.
44. Learned counsel contended that even though
Section 17 of RERA mandates transfer of title, the said process
is not yet completed. Respondent No.5 being an Association
not registered as required under law cannot agitate any of
these issues with the competent authority. On the other hand,
respondent No.3 is authorized to agitate any issues against the
petitioner.
45. Learned counsel for respondent No.3 referring to
the decision in Forum for People's Collective Efforts
(supra), contended that the Hon'ble Apex Court by referring to
its earlier decision in Innoventive Industries Ltd. Vs ICICI
Bank9, highlighted that repugnancy exists where two laws
cannot operate simultaneously. It was also held that such
inconsistency must be clear, direct and must be in the nature
9
(2018) 1 SCC 407
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as to bring the two acts and parts thereof into direct collusion
with each other, reaching a situation where it is impossible to
obey the one without disobeying the other. This happens when
two enactments would give different legal results when applied
to the same set of facts.
46. Learned counsel referring to Section 2(b) of RERA,
where the word 'allottee' is defined, also refers to Rule 2(1)(b)
of RERR which defines 'association of allottees' to contend that
such an association is required to be formed to address the
grievance of the allottees. He submitted that the petitioner
being the builder cannot be permitted to alter the common
areas and common facilities. But in the present case, the
petitioner has ventured to alter and minimize the common
areas by selling the portions thereof for his benefit, which
cannot be questioned under the provisions of KAOA.
47. Learned counsel contended that if there is any
dispute between the allottes and the builder, since there is a
bar of jurisdiction as provided under Section 79 of RERA, the
only remedy that is available is under the provisions of KCS
Act, if the association is registered. Respondent No.3 is such an
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Association registered under the KCS Act, with the allottees and
the owners being its members, alike. Respondent No.3 can
agitate the grievance of the allottees and the owners with the
competent authority, whereas such privilege is lacking with
respondent No.5 - Association.
48. Learned counsel referring to Section 43 of RERA
contended that only voluntary consumer association registered
under any law can agitate the grievance of its members before
the Real Estate Appellate Tribunal. Under these circumstances,
learned counsel contended that there are several issues the
allotees and owners are facing with the petitioner and
therefore, it is only respondent No.3 which can agitate the
matter to find a solution in accordance with law. Respondent
No.5 not being a registered Association cannot sue or be sued
in any Court of law or any forum for that matter. Therefore,
the allotees and the owners will not have any recourse to
redress their grievance before any forum. He further submitted
that even though the construction of the building is complete
and occupancy certificate is received, registration of all the
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units is not yet completed, as even according to the petitioner
only 323 sale deeds are executed.
49. Learned counsel further submitted that the
petitioner has sent a mail to all the allotees requesting to form
an adhoc Association for managing the day-to-day maintenance
of the project. This communication was over 4 years ago from
the time when most allottees booked their apartments. The
petitioner himself proposed the names of 9 members for
forming such adhoc Association. When strong objections were
raised by several allottees, the petitioner sent a mail
contending that the Association could be formed after sale of
51% of apartments. Apparently, it is a misrepresentation to
avoid compliance of the obligations under Section 11(4)(e) of
RERA to form association of allottees. The objections to form
such adhoc Association and requesting to enable formation of
registered association of allottees was sent through mail to the
petitioner. A meeting was convened considering various
objections raised by multiple allottees for the purpose of
selecting a group of allottees. However, the petitioner
identified 8 members of his choice and decided to form the
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adhoc Association. The allottees raised various concerns
including the fact that they have not received Occupancy
Certificate despite paying the full consideration amount.
Therefore, they expressed the intention to form an Association
as required under Section 11(4)(e) of RERA and to register the
same under KCS Act. When this was communicated to the
petitioner on 06.09.2023, series of meetings were held and the
petitioner registered the Deed of Declaration without providing
a copy of the same to the allottees and only informing that they
have already registered the Deed of Declaration under KAOA on
12.06.2023. Thus, respondent No.5 - Association came into
existence at the instance of the petitioner. In the meantime,
the allottees approached the Registrar of Co-operative Society
and got respondent No.3 - Society registered on 06.09.2023.
This fact was communicated to the petitioner immediately
thereafter.
50. Learned counsel further submitted that pursuant to
the registration of respondent No.3 - Society, the Returning
Officer was appointed to conduct the election of Board of
Directors of respondent No.3 - Society, finalising the voters list
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and other election process was undertaken for publishing the
calendar of events. Few members have filed their nomination
and the same was scrutinized by the Returning Officer. On
01.10.2023 the calendar of events to elect office bearers of the
Society was issued and the result was published on
08.10.2023. The petitioner came up with a complaint with the
Registrar of Co-operative Societies and a legal notice was
issued preventing the Society from holding general body
meeting. The petitioner conducted the election to the Board of
respondent No.5 - Association, permitting only the owners who
got registered the sale deeds and excluding the fully paid up
allottees from voting. Respondent No.5 is fully controlled by
the petitioner and it is an unregistered Association.
51. Learned counsel further contended that the Hon'ble
Apex Court in Forum for People's Collective Efforts (supra),
categorically held that the provisions of WB-HIRA is contrary to
the provisions of RERA. Similar repugnancy could be noticed
between RERA and the provisions of KAOA. Learned counsel
undertook to file comparative chart of provisions under these
two enactments, which are repugnant with one another.
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52. Learned counsel referring to the decision of
Akhilesh Anand (supra) contended that the co-ordinate Bench
has categorically held that a Co-operative Society could be
formed. In fact it is the only remedy available looking to the
object and the intent of RERA. Therefore, learned counsel
contended that respondent No.3 is a duly registered Co-
operative Society as suggested under the provisions of RERA.
Under these circumstances, he prays for dismissal of the
petition.
53. Learned Amicus Curiae who is appointed to assist
the Court, submitted that KAOA provides a framework for
individual ownership of apartments as heritable and
transferable property, applicable only when owners or
promoters voluntarily submit to it by executing and registering
a declaration of deed of apartments and bye-laws. He further
submitted that KOFA, on the other hand, regulates the
promotion, construction, sale and management of flats and
requires formation of a co-operative society or a company to
manage the complex, remaining applicable until the project is
brought under KAOA.
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54. Learned Amicus Curiae submitted that RERA is a
Central legislation with overriding effect under Section 89,
which aims to ensure transparency and consumer protection in
real estate transactions. Importantly, RERA mandates
conveyance of apartments to individual allottees and transfer of
undivided proportionate rights in common areas, including the
land to the association of allottees or a competent authority,
thereby creating a statutory obligation on promoters.
55. Learned Amicus Curiae further submitted that
under KAOA, each allottee receives an apartment along with an
undivided interest in the land. Under KOFA, the land and
building are conveyed to the association of allottees, with
members enjoying units through the association. While under
RERA, apartments are conveyed to individual allottees and the
project land/common areas to the association. He contends
that given RERA's overriding effect and Article 254 of the
Constitution, KAOA and KOFA would apply only to projects
outside RERA's scope, such as smaller projects or completed
developments, which are excluded under Section 3(2) of RERA.
He further contended that the State Real Estate (Regulation
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and Development) Rules, 2017 require a registered owners'
association, leading to ambiguity on permissible legal forms,
though in large projects a company or co-operative society is
effectively necessary.
56. Learned Amicus Curiae, however, submitted that
certain hurdles may arise if the owners form a co-operative
Society, which is to be governed by KCS Act. Therefore, as per
KCS Act, only one Society could be permitted and not multiple
Societies. There is restriction on holding morethan 5% share,
without government permission. The management is liable for
supercession by the Government. There will be restriction on
voting, till completion of one year and further one person one
vote will have to be implemented, irrespective of the holdings
held by the person. The provisions of KCS Act provides for
cancellation of membership. There will be difficulties in
obtaining loans as the members will own only shares and not
property. Additional stamp duty is to be paid on land and
common areas to be conveyed to the Society. Auditing of the
accounts on the election will be governed by KCS Act. The
object of KCS Act may be slightly different from the object with
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which the enactment governing the apartments were brought
into effect.
57. Learned Amicus Curiae submitted that in Forum
for People's Collective Efforts (supra), the Court considered
the repugnancy between RERA and WB-HIRA. However, in
Akhilesh Anand (supra), the co-ordinate Bench of this Court
discussing at length formed an opinion that there is no
repugnancy between provisions of RERA and KAOA, while
holding that there is repugnancy between certain provisions of
RERA and KOFA. The Court also held that RERA being the
Central enactment shall prevail over KAOA, wherever there is
repugnancy or conflict in the provisions. It is submitted that
decision in Akhilesh Anand (supra) is challenged but no
interim order of stay granted.
58. Learned Amicus Curiae referring to the decision in
Proposed Starnest Apartment Owners Co-operative
Society Ltd. (supra) submitted that this decision was rendered
without reference to RERA. He submits that a review petition is
pending against the said order.
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59. Learned Amicus Curiae referred to the decision of
the co-ordinate Bench in Saraswati Prakash and others vs
State of Karnataka and Others10, submitted that the Court
has formed an opinion that the owners being the members of
Association are entitled to be registered under KAOA and there
cannot be any association registered under KCS Act, to form a
Society for managing and maintaining the Society comprising of
only residential flats. It is also highlighted that if the project
consist of both commercial and residential units, then the
provision of KOFA could be made applicable. Therefore, the
Court has restrained the Registrar of Co-operative Society from
registering the proposed Society. He submitted that even
though Writ Appeal is preferred against this order, there is no
stay granted and the appeal is still pending consideration.
60. In view of the rival contentions urged by learned
counsel for both the parties, the points that would arise for my
consideration is:
"(i) Whether the petitioner has made out
any grounds to allow the petition?
10
WP 3779/2023 DD 28.02.2025
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(ii) Whether IA.3 of 2024 filed by
respondent No.3 seeking directions against the
petitioner is liable to be allowed? "
My answer to the above point No.1 in the 'Affirmative'
and point No.2 in the 'Negative' for the following:
REASONS
61. The petitioner - M/s Sobha Limited, a Company
registered under the Companies Act, has approached this Court
seeking issuance of a writ in the nature of Certiorari to quash
the order dated 07.02.2024, passed by respondent No.1 as per
Annexure-A and registration of respondent No.3 by respondent
No.2 as per Annexure-B as a Co-operative Society.
62. The facts of the case disclose that the petitioner is
the builder/developer who developed a housing project by
name 'Sobha HRC Pristine', consisting of row houses and multi-
storied residential apartment buildings in 4 phases, said to
contain 395 units i.e., 381 apartments and 14 row houses, with
a clubhouse and other common amenities. The project was
registered with RERA. The construction of the apartments and
villas is stated to be completed and the Occupancy Certificate
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dated 26.05.2023 was obtained from the Bruhat Bengaluru
Mahanagara Palike (BBMP).
63. It is the contention of the petitioner that, after
completion of construction and upon obtaining the Occupancy
Certificate, all the owners in whose favour sale deeds have
already been executed, formed an Association by submitting
the Deed of Declaration dated 12.06.2023 in the name of
Owners' Association, as per Form-A, under the provisions of
KAOA and KAOR. The same was registered as Document
No.3458 of 2023-24.
64. It is the contention of the petitioner that respondent
No.3 - Society was formed on 06.09.2023 i.e., subsequent to
the registration of respondent No.5 - Association under the
provisions of KAOA. The petitioner contends that respondent
No.3 was formed at the instance of one Mr. T.K. Parashuraman,
claiming to be the Chief Promoter, who approached respondent
No.2 with misleading facts and secured registration of the
Society, which is illegal and contrary to the objectives of KCS
Act. It is the specific contention of the petitioner that
respondent No.3 has hijacked the objectives of respondent
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No.5 as provided under the Deed of Declaration and the bye-
laws. Therefore, issuance of the Registration Certificate dated
06.09.2023 -Annexure-B is erroneous.
65. It is further contended that, out of 395 units, a
handful of owners became members of respondent No.3 -
Society, despite already being members of respondent No.5 -
Association. Even persons who are merely allottees and not
owners of the apartments, as no conveyance has been
executed in their favour, have been admitted as members of
the Society. Thus, two parallel bodies i.e., respondent No.3 -
the Society under the provisions of KCS Act and respondent
No.5 - the Owners' Association under KAOA are stated to be
functioning in the project, each claiming to administer,
maintain and manage the common areas and common
amenities, as custodian thereof. Hence, the extraordinary writ
jurisdiction of this Court has been invoked.
66. Based on the contentions raised by the parties, it is
felt expedient to discuss and delineate the application of
multiple statutes that were referred to by the parties.
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A] Karnataka Ownership Flats (Regulation of the Promotion of
Construction, Sale, Management and Transfer) Act, 1972:
67. The State of Karnataka enacted the KOFA, which
came into force upon publication in the Official Gazette on
10.03.1972, after receiving the assent of President. The
Statement of Objects and Reasons of the Act declares that the
State felt the necessity for a separate law to provide that flats
and apartments in multi-storied buildings may, for all purposes,
be heritable and transferable immovable property. It was
considered expedient to make provisions for regulating the
promotion of construction, sale, management and transfer of
flats taken on ownership basis in the State.
68. Section 2(a) of KOFA defines the term 'flat' as a
separate and self-contained set of premises, forming part of a
building, used or intended to be used for residence, office,
showroom, shop or godown, including a garage. Thus, the term
'flat' under KOFA includes both residential and commercial
premises. The Act deals with the general liabilities of the
promoter who undertakes development of the property and
construction of flats, and imposes various conditions while
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accepting advance payment, entering into and registering the
agreement and paying outgoings, until the property is
transferred. It mandates the promoter to maintain a separate
account of sums taken as advance or deposit, in the capacity of
a trustee for the purchaser. The promoter is required to refund
amounts where due and is prohibited from mortgaging the
property without their consent, after execution of the
agreement for sale. It is also his duty to take steps for
formation of a Co-operative Society or a Company and to
convey title in favour of the purchaser in accordance with the
agreement. The Act further deals with the general liabilities of
the person who takes the flat. Thus, KOFA applies to
development and construction of flats used or intended to be
used for residence, office, showroom, shop or godown. It
further imposes general liabilities on the promoter as well as on
the person who agrees to purchase the flat.
B] Karnataka Apartment Ownership Act, 1972:
69. During the same period, the State of Karnataka
enacted the KAOA with an intention to provide ownership of an
individual apartment in a building and to make such apartment
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heritable and transferable property and for matters connected
therewith.
70. Section 3(a) of KAOA defines the word 'Apartment'
to mean a part of the property intended for any type of
independent use, with one or more rooms together with the
part of the building, intended to be used for residential
purposes. It is therefore clear that, KAOA deals only with
residential apartments that are already constructed.
71. Section 3(b) defines the word 'Apartment Owner',
to mean the person or persons owning an apartment and an
undivided interest in the common areas and facilities in the
percentage specified and established in the declaration.
72. Section 3(d) defines 'Association of Apartment
Owners' to mean an association of all the apartment owners
acting as a group in accordance with the bye-laws and the
declaration.
73. The word 'Competent Authority' is defined under
clause (i) to Section 3, to mean in relation to a building
constructed or to be constructed by the Housing Board, the
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Secretary of the Housing Board, and in any other case, the
Registrar of Co-operative Societies as defined under the KCS
Act.
74. The word 'Declaration' is defined under clause (j) to
Section 3 to mean an instrument by which the property is
submitted to the provisions of this Act in the prescribed format.
As per Section 5(2), each apartment owner is required to
execute a declaration that he submits his apartment to the
provisions of this Act and a deed of apartment in relation to his
apartment in the manner prescribed under law.
75. Certain bye-laws adopted by respondent No.3
require specific emphasis. The bye-laws of respondent No.3 -
Society is produced at Annexure-E. It is stated in the bye-laws
that the jurisdiction of the Co-operative Society is confined to
the locality in which the apartment is situated, and it is
governed by the provisions of KCS Act, 1959 and the Rules of
1960. The term 'member' is defined to mean a person who has
joined in the application for registration of the Co-operative
Society, as well as any person subsequently admitted to the
membership in accordance with law. The expression 'year'
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refers to the Co-operative year as defined under the Act, and
the term 'common area' is defined in terms of RERA.
76. The expression 'Chief Executive Officer(CEO)', in
relation to respondent No.3, means an employee of the Co-
operative Society and includes an official of the State
Government on deputation who discharges the functions of the
CEO.
77. The objectives with which respondent No.3 -
Society came into existence as per its bye-laws produced as
Annexure - E are as under:
"a) The Co-operative Society shall execute a
registered conveyance deed in its favour along with
the undivided proportionate title in the common areas
and hand over the physical possession of the plot,
apartment or building, as the case may be, to the
member and the common areas to the Co-operative
Society within the specified period.
b) To construct, erect, fabricate, execute, build,
carry out, equip, alter, repair, remodel, decorate,
maintain, demolish, develop, improve, furnish,
administer, manage, or control, grade, curve, pave,
macadamize, cement and maintain buildings,
structures, houses, apartments, multi-storeyed
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housing/commercial complexes, landscapes, paths,
streets, sidewalks, gardens and pavements.
c) To own assets, acquire lands, buildings,
movable assets like trucks, tankers, tractors, vehicles,
etc.
d) To employ people for construction, carpentry,
masonry, painting, tile works, plumbing, electrical,
security, maintenance, accounting, marketing,
supervision and other services.
e) To sell completed units, or enter into an
Agreement of Sale, pledge or mortgage assets for
borrowing from banks or financial institutions, etc.
Also to represent or to be part of authorised
signatories for the purpose of registration or any such
regulatory, administrative or technical and compliance
requirements.
f) To liaise, shortlist, negotiate and finalise
builders/investors/promoters/suppliers for the purpose
of project completion by way of investment proposals,
joint development plans, construction agreements,
material supply agreements and any such agreement
or proposal that is required for completion of the
project in all respects.
g) To represent collectively the members before
the Government and related authorities and the
Promoter/Builder and various persons to protect the
interest of all the members of the Association to
ensure timely completion of construction and
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handover of possession of apartment units to the
home buyers.
h) To liaise with Sobha HRC Pristine
allottee/allottees and the Promoter/Builder for all
matters connected with land, building and its
construction and other amenities that would be
provided by the Promoter/Builder, and also for
availing all benefits and claims as
owners/residents/buyers/investors of Sobha HRC
Pristine Apartment and to approach the
Promoter/Builder to redress grievances of members of
the Association.
i) To institute, prosecute and defend suits and
other proceedings in which the Association may be
involved, to settle or negotiate any matter affecting
the common rights and properties of the Association
and to engage the services of any professionals like
advocates, tax consultants etc. for the aforesaid
purposes.
j) To represent before courts of law on behalf of
all its members: (i) to protect the interest of its
members to safeguard the money invested to
purchase units in the said project 'Sobha HRC
Pristine'; (ii) to ensure Promoters/Builders adhere to
sanctioned plans and specifications promised to the
home buyers; and (iii) to protect common assets and
common areas as described in the plans and
specifications during and after the development phase
of the project.
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k) To oversee, periodically review, and monitor
the progress of construction that the Promoter/Builder
undertakes in order to complete the project in a time-
bound manner.
l) To ensure that the Promoter/Builder/Home
Buyers timely comply with prevailing law provisions
such as, and not limited to, RERA Act 2016, Rules
2017 and all applicable laws.
m) To maintain Common Areas and Common
Facilities, which are the rights of all the owners (all
the members of the Co-operative Society) in the
Apartment.
n) To collect the expenditure incurred to
maintain the Common Area in the Apartment and for
repair or replacement of equipment providing common
facilities in the Apartment from all the members, as
per the resolution of the General Body Meeting, and to
spend it for their maintenance upon obtaining
approval of the Board of Management as per the
provisions of law/rules.
o) To construct apartments by collecting funds
from the members and to allot them to members.
p) To establish funds for the repair of the
Apartment Building and construction of buildings, and
to collect amounts from the members.
q) Maintenance of common areas and common
facilities are the responsibility of all owners (all
members of the Co-operative Society).
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r) The costs of maintaining the common area in
the Apartment and repairing or replacing the
equipment providing common amenities in the
Apartment shall be collected by the decision of the
General Assembly of all owners and approved by the
governing body in accordance with the law. Funds
shall be established to repair the apartment building
and to construct buildings.
s) To repair the apartment building with the
approval of the administrative and technical authority
from the competent authority.
t) To ensure that the completion of the rebuilt
apartment building is approved by the competent
authority at the same premises. The apartments must
be rebuilt and resold to their respective owners.
u) To open a supermarket to sell essential
commodities through the Society and to respond to
emergency situations.
v) To book tickets for railway, bus and airline
for members of the Society.
w) Government-provided services such as PAN
card, ration card, passport, etc. should be facilitated
to the members through the Society.
x) To undertake any necessary or appropriate
measures for the fulfilment of the objectives of the
Society specified in the Memorandum of Society.
y) To construct, preserve, administer and
manage public spaces, restricted areas, conveniences
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and amenities for use by members and to enhance the
convenience and comfort of members and residents by
applying the principle of co-operation.
z) To provide good governance for the
management of the common area in the Apartment.
aa) Electricity, water, sewerage, watchdog
management, garbage management, rainwater
harvesting in the apartments and hygiene of members
and others.
bb) Appointing staff to conduct the affairs of the
Society properly.
cc) Consolidation of monetary resources to fulfil
the objectives of the Society.
dd) To take all necessary steps for the purpose
of conducting the affairs of the Society in accordance
with the principles of co-operation and the principles
of secularism.
ee) To use the funds of the Society with the
consent of all members or to collect funds from the
members when necessary, for building or facilitating
public use by the members.
ff) To promote the economic interests of the
members of the Society and to promote the spirit of
frugality, savings and self-help with respect to
household purposes.
gg) Involving additional resources of the Society
as defined in Article 58 of the Act."
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78. It is interesting to note that, in the bye-laws of
respondent No.3 - Society as extracted above, some of the
clauses were same as that of the clauses in the bye-laws of
respondent No.5. But it is to be highlighted that the object of
forming the Co-operative Society is not to have such bye-laws,
especially with regard to maintenance, administration and
management of the common areas, for its Societies.
79. If the objectives of respondent No.3 - Society as
extracted above are taken into consideration in light of the
objective with which the KAOA was enacted and respondent
No.5 - Association was formed by the owners of residential
apartments, objectives at Clause (b) and Clauses (c), (f), (o),
(p), (u), (v), (w) and (dd) are entirely outside the object with
which, respondent No.5 - Association is formed under the
provisions of KAOA as the said statute is a Special Enactment,
which provides for owners of the apartments in a building and
to make such apartment heritable and transferable immovable
properties and the matters connected therein pertaining to the
residential apartment. It takes care of the requirement of each
of the owners of the apartment providing to constitute an
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association of apartment owners, which are having common
interest and object.
80. The Act also deals with common areas and facilities,
and each apartment owner is entitled to an undivided interest
in such common areas and facilities in the percentage
expressed in the declaration. It is made clear that the common
areas and facilities shall remain undivided and no owner or any
other person shall seek partition or division of any part thereof,
unless the property has been removed from the provisions of
this Act. The common profits of the property shall be
distributed amongst, and the common expenses shall be
charged to the apartment owners according to the percentage
of the undivided interest in the common areas and the facilities.
81. As per Section 16, the administration of every
property shall be governed by the bye-laws, a true copy of
which shall be annexed to the declaration. Sub-section (2)
mandates what the bye-laws of such apartment should provide
for. It deals with method of calling meetings, election of the
President, Secretary, Treasurer, etc., from amongst the
members, maintenance, repairs and replacement of the
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common areas and the facilities, and payments thereof,
manner of collecting the common areas expenses, restrictions
on the requirements in respect of use and maintenance of the
apartments, common areas and facilities, as set forth in the
declaration.
82. The authority of the Board of Managers to retain
certain areas of the building and lease them to non-residents
for commercial purposes and to distribute the proceeds to the
apartment owners as income or to deduct the amount from the
common charges for maintaining the building, etc., is also dealt
with under this section.
83. Section 17 of KAOA makes it clear that no
apartment owner may exempt himself from liability of
contributing towards the common expenses by waiver of use or
enjoyment of any of the common areas or facilities, or by
abandonment of his apartment.
84. Section 18 of KAOA, with a non-obstante clause,
mandates that each apartment in its percentage of undivided
interest in the common areas and facilities shall be deemed to
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be a separate property for the purpose of assessment of tax on
lands and buildings leviable under such laws, and mandates the
local authority to make suitable rules to carry out the
provisions of this section. The section also makes it clear that
neither the building, the property nor any of the common areas
and facilities shall be deemed to be separate property for the
purpose of levying such tax. The Act also deals with creating a
charge on the apartment concerned regarding sums assessed
by the Association of Apartment Owners, but unpaid as the
share of common expenses, with the sale/purchase of
apartments jointly, and with unpaid assessments. The Act
provides for a remedy in case of destruction or damage to the
property.
85. Section 24 of the Act speaks about the use of
property by any of the owners, tenants, etc., shall be subject to
this Act and to the declaration and the bye-laws of the
Association of Apartment Owners, adopted pursuant to the
provisions of this Act.
86. KAOR were framed pursuant to Section 25 of KAOA.
KAOR prescribe Forms-A and B. Form-A, as per Rule 3, is for
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the deed of declaration to be made by the sole owner or all
owners for submitting their property to the provisions of KAOA.
Form-B is prescribed as per Rule-4, for declaration to be
executed by each apartment owner under sub-section (2) of
Section 5 of KAOA.
87. Form-B contains almost all particulars relating to
the apartment, its ownership, bye-laws, object of association,
members of association, joint apartment owners, voting forum,
powers and duties of the association and its management,
powers and duties of the Board, etc., and includes the
disqualification of the apartment owner from voting in the
election of members of the Board or President and other office
bearers, if he is in arrears of the contribution for common
expenses for more than 60 days. An exhaustive provision is
made to be part of Form-B, which is required to be submitted
with a declaration in the prescribed form for registration of the
same, as provided under Section 13 of KAOA.
88. Thus, KAOA read with KAOR deals exhaustively with
the residential apartments that are constructed in the State of
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Karnataka, their holding, management, maintenance and
anything incidental thereto.
C] Real Estate (Regulation and Development) Act, 2016:
89. RERA is a Central enactment, which came into force
with effect from 26.03.2016. It is an Act to establish the Real
Estate Regulatory Authority for regulation and promotion of the
real estate sector and to ensure the sale of plot, apartment or
building, as the case may be, or the sale of a real estate
project, in an efficient and transparent manner; to protect the
interest of consumers in the real estate sector; and to establish
an adjudicating mechanism for speedy dispute redressal and
also to establish the Appellate Tribunal to hear appeals from
the decisions, directions or orders of the Real Estate Regulatory
Authority and the adjudicating officer, and for matters
connected therewith or incidental thereto.
90. The Statement of Objects and Reasons for enacting
RERA highlights the need for regulating the real estate sector,
which plays a catalytic role in fulfilling the need and demand for
housing and infrastructure in the country, which has grown
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significantly. In recent years, it was noticed that this significant
sector was largely unregulated, with absence of professionalism
and standardization and lack of adequate consumer protection.
91. The Statement of Objects and Reasons also refers
to the Consumer Protection Act, 1986, which was providing the
forum to the buyers in the real estate market, but note that the
recourse to the said Act is only curative and is not adequate to
address all concerns of buyers and promoters in that sector. It
was observed that lack of standardization had been a constraint
to the healthy and orderly growth of the industry. Therefore, it
became necessary to have a Central legislation to safeguard
the interests of effective consumer protection, and to bring
uniformity and standardization of business practices and
transactions in the real estate sector. The Act could ensure
greater accountability towards consumers and significantly
reduce fraud and delays, as well as the current high transaction
costs. It is aimed at safeguarding the interest of both
consumers and promoters alike by imposing certain
responsibilities on both, and by ensuring symmetry of
information between the promoter and purchaser, and
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transparency of contractual conditions with a minimum
standard of accountability and a fast-track dispute resolution
mechanism.
92. As per Section 2(d) of RERA, the word 'allottee' in
relation to a real estate project means, the person to whom a
plot, apartment or building, as the case may be, has been
allotted, sold (whether as freehold or leasehold) or otherwise
transferred by the promoter, and includes the person who
subsequently acquires the said allotment through sale, transfer,
etc., excluding the person in whose favour such plot, apartment
or building is given on rent.
93. The Real Estate Appellate Tribunal was established
under the Act, to redress the grievance of any person aggrieved
by any directions or decisions or orders made by the authority
or by an adjudicating officer. The adjudicating officer is
appointed under sub-section (1) of Section 71, with the power
to adjudicate compensation under various provisions of the Act.
94. Section 4 of RERA mandates that every promoter
shall make an application to the authority for registration of the
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real estate project in a time-bound manner, with necessary
documents and particulars. Upon receipt of such application,
the authority shall register the project, which shall be valid for
the period declared by the promoter for completion of the
project or phase thereof. Such registration could be extended
by the promoter by filing an application due to force majeure,
on payment of the prescribed fees. The authority is vested with
the power under Section 7 to revoke the registration on receipt
of a complaint either suo motu or on recommendation of the
competent authority. Default on the part of the promoter in
doing anything required to be done under the Act, Rules or the
Regulations, violation of any terms or conditions of the
approval given by the competent authority, or involvement by
the promoter in any kind of unfair practice or irregularities,
may call for revocation of registration.
95. The term 'competent authority' is defined under
Section 2(p) of the Act to mean a local authority created or
established under any law for the time being in force by the
appropriate Government to exercise authority over the land
under its jurisdiction, and having the power to give permission
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for development of such immovable property. The Act also
refers to the registration of a real estate agent, his functions
and duties, and the obligations of the promoter, including
adherence to the sanctioned plan and project specifications, his
obligations in case of transfer of the project to a third party,
the requirement to obtain insurance for the real estate project,
and the obligation to return amounts and pay compensation if
he fails to complete or is unable to hand over possession of an
apartment, plot or building as agreed.
96. Section 17 of RERA deals with 'transfer of title'. It is
mandatory for the promoter to execute a registered
conveyance deed in favour of the allottees along with the
undivided proportionate title in the common areas to the
Association of allottees or the competent authority, as the case
may be, and to hand over the physical possession of the plot
etc., to such association or the competent authority, as the
case may be, in a real estate project, together with other title
documents pertaining thereto, within the period specified as per
the sanction plan provided under the local laws.
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97. The proviso to Section 17 highlights that the
promoter is duty-bound to transfer the title by way of a
conveyance deed in favour of the allottees or the association of
allottees or the competent authority, as the case may be,
within three months from the date of issuance of the
Occupancy Certificate, even in the absence of any local laws.
98. It is also the duty of the promoter to hand over
necessary documents and plans to the association of allottees
or the competent authority, as the case may be, after obtaining
the Occupancy Certificate and after handing over physical
possession to the allottees as per the local laws. Even in the
absence of local laws, the promoter is duty-bound to hand over
the documents within 30 days after obtaining the completion
certificate.
99. RERA also deals with the rights and duties of the
allottees, which include - getting proper information about the
project and the timeline for completion; claiming possession of
the apartment, plot or building and the common areas as per
the declaration given by the promoter; claiming refund of
amounts paid; demanding necessary documents and plans,
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including those of common areas; making necessary payments
in terms of the agreement entered into with the promoter; and
taking physical possession of the apartment, plot or building,
within a period of two months of the Occupancy Certificate, and
participating in the registration of conveyance deed of the
apartment, plot or building.
100. It is now expedient to consider the interoperability,
interplay, and application of the above-mentioned Acts, namely
KOFA, KAOA and RERA.
101. From the above, it is clear that in 1972, the State of
Karnataka felt the necessity to provide regulation for multi-
storied flats and apartments on ownership basis, owing to the
shortage of land in urban areas, and accordingly enacted KAOA
as an exhaustive enactment. KAOA was made applicable purely
to residential apartments for the benefit of the owners, after
they obtain conveyance in their favour to form an association
as per the terms of agreements to sell and the sale deeds.
Simultaneously, KOFA was enacted to regulate the promotion
of construction, sale, management and transfer of flats taken
on ownership basis in the State, and was applicable to premises
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used or intended to be used either for residence, office,
showroom, shop or godown, including garage.
102. In view of the above, before RERA came into force,
KOFA was governing the field. When the Central legislation -
RERA was enacted in 2016 with the object of providing a
catalyst to fulfill the need and demand for housing and
infrastructure in the Country, certain provisions in KOFA were
found repugnant to RERA. As the Central legislation will prevail
over the State legislation in view of Article 254 of the
Constitution of India, it is only those provisions of RERA which
can be made applicable, and not the provisions of KOFA, when
they are in conflict.
103. The co-ordinate Bench of this Court in Akhilesh
Anand (supra), categorically held that whenever there is
repugnancy between RERA and KOFA, it is only RERA which can
be made applicable and not the provisions of KOFA, as RERA is
the Central enactment and KOFA is the State enactment and
the former precedes the latter under the aegis of Article 254 of
the Constitution of India.
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104. When learned counsel for respondent No.3
repeatedly contended that the provisions under KAOA are
repugnant to the provisions under RERA, which is the Central
enactment and therefore, KAOA cannot be made applicable, he
was called upon to highlight the specific provisions under KAOA
which are repugnant to RERA. He undertook to submit a memo
with the table of provisions, which according to him are
repugnant between the two enactments. However, till date, he
has not submitted any such memo or list. Thus, respondent
No.3 has failed to highlight any repugnancy in any of the
provisions of KAOA when compared with RERA. Under such
circumstances, it is to be held that there is no repugnancy
between the provisions of RERA and KAOA. Moreover, the
application of the provisions of RERA will be to projects which
are under development till handing over of possession of the
apartment to the owners and the undivided share of the project
in favour of the association of owners formed under the
provisions of KAOA, whereas, the provisions of KAOA will be
applicable once such handing over is complete and the
association is formed in accordance with law. In other words,
the provisions under RERA are applicable to the pre-ownership
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stage, whereas the provisions under KAOA are applicable to the
post-ownership.
105. The provisions of KAOA, if considered with the
provisions under RERA, they make it clear that RERA provisions
deal with development and sale of a real estate project in an
efficient and transparent manner in favour of interested
consumers and for establishment of an adjudicating mechanism
for speedy dispute redressal. The moment the completion
certificate and the Occupancy Certificate are received, the
promoter is duty-bound to transfer the title in favour of the
allottees by executing a registered conveyance deed, along
with the undivided proportionate title in the common areas to
the association of owners or the competent authority, as the
case may be, and to hand over physical possession of the plot,
apartment and building to the allottees and the common areas
to the association of allottees, and also to hand over the title
documents within a specified period. The moment this
procedure is undertaken by the promoter, the provisions of
RERA, for all practical purposes, cease to apply. Since the
provisions of RERA and the provisions of KAOA apply at
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different stages of a real estate project, this Court does not find
any repugnancy worth mentioning. However, it is to be stated
that the promoter remains responsible for any defects or
shortcomings in his project, which may be challenged by an
allottee, before an appropriate authority in accordance with
law. It is made clear that mere handing over of possession of
the apartments/flats in favour of the owners, along with the
undivided share in favour of the association of allottees/owners,
will not absolve the promoter from his liability to make good
any loss that may be suffered by such allottees or owners, as
the case may be. RERA specifically deals with the rights and
duties of the allottees as referred to in Sections 14(3), 18, 19,
67 and 68 of RERA.
106. In Akhilesh Anand (supra), the co-ordinate Bench,
after discussing at length the interplay between the provisions
under RERA and KAOA, concluded in paragraph 22.11 as under:
"22.11. Hence, I answer point No.3 by
holding that there is no conflict between KAOA 1972
and RERA 2016, inasmuch as RERA 2016 is applicable
pre-ownership, KAOA 1972 is applicable post-
ownership. Insofar as KOFA and RERA 2016 are
concerned, there is a conflict. However, RERA 2016
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would override KOFA 1972, and it is the rights and
remedies which are provided under RERA 2016 which
would override those under KOFA 1972."
D] Karnataka Co-operative Societies Act, 1959:
107. Now, let me consider the KCS Act under which
respondent No.3 was registered as a Co-operative Society. This
Act came into force after receiving the Report of the Committee
of Direction of All India Rural Credit Survey appointed by the
Reserve Bank of India, published during December 1954, and
the deliberations held in that regard. The Committee felt that
the scenario that was in existence for the Co-operative
Societies needed to be revisited in different States, with a view
to bring about a large degree of uniformity in the legislation
governing such Co-operative Societies throughout the country.
Thus, the KCS Act is an Act to promote voluntary formation,
autonomous functioning, democratic control and professional
management of the Co-operative Societies in the State of
Karnataka.
108. Since respondent No. 3 is registered under the KCS
Act, it is a Co-operative Society as defined under Section 2(c)
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of the KCS Act. Co-operative Societies registered under this
Act function on co-operative principles. The Co-operative
Movement stands on Co-operative Principles. The first principle
being voluntary and open membership; meaning thereby the
membership is open to all persons able to use its services. But
in the case of KAOA, it is only the owner of an apartment
having share in the common areas could be the member of the
association. The principles of Co-operative Movement believes
in equal voting rights i.e. one member one vote, irrespective of
his share in the society. But in the case of KAOA, the members
will not have any share, but they own an apartment with
undivided share in the common areas. There is no restriction
for a person for owning multiple apartments, thereby be
entitled for voting rights depending upon the number of
apartments he is owning. It is also the principle of the Co-
operative society to have equitable economic participation. But
in case of KAOA, the owner will contribute on the basis of
actual measurement of his apartment and the common areas
he is owning. There is no question of equitable contribution. As
per the principle of Co-operative Movement, there must be
education, training, information and cooperation among co-
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operatives, which are alien to the association under KAOA.
Therefore, all the principles of Co-operative Movement cannot
be made applicable to the association of owners formed in a
residential complex, consisting of owners mainly for the
purpose of maintaining the common areas, facilities etc., and
working for the benefit of such owners.
109. Section 4 of the KCS Act deals with the Societies
which may be registered, where the object of the Co-operative
Society is highlighted, according to which, such objects shall be
the promotion of economic interests or general welfare of its
members or of the public, in accordance with co-operative
principles; or a Co-operative Society established with the object
of facilitating the operations of such a Society may be
registered under the Act. The proviso to Section 4 of the KCS
Act bars registration of the Co-operative Society if it is likely to
be economically unsound. Section 7 of the KCS Act deals with
registration and Sub-section (1)(e) mandates the Registrar to
be satisfied that the proposed Society complies with the
requirements of sound business and has a reasonable chance of
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success; without that, the Society cannot be registered under
the Act.
110. Section 17 of the KCS Act deals with the
disqualification of membership under various circumstances. If
a person is adjudicated as an insolvent, or is an undischarged
insolvent, he is not eligible for admission as a member. If a
person is sentenced for any offence, etc., he is barred from
being registered as a member as per clause (b), and as per
clause (c) if a person carries on business of the kind carried on
by such Co-operative Society, again he is not eligible to be
registered as a member. Sub-section (2) to Section 17
highlights that if a member becomes subject to any of the
disqualifications specified in Sub-section (1), there is deemed
cessation of membership from the date of disqualification is
incurred. As per sub-section (2-A), if a person is found to be a
member or continuing as a member in two or more Co-
operative Societies carrying on similar business, it shall be
obligatory on his part to retain membership in any one Society
of his choice, within a period of ninety days from the date of
commencement of the KCS (Amendment) Act, 2021. If he fails
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to do so, his membership shall be deemed to have ceased in
the Co-operative Society, to which he is newly admitted.
111. Section 20 of KCS Act deals with votes of members.
A member cannot have more than one vote in a general
meeting or in the election of members of the Board of the Co-
operative Society. Sub-section (2) restricts the right to vote of
a member at a general meeting under certain circumstances,
including where a member fails to attend at least two annual
general meetings, out of the last five annual general meetings
duly communicated to him, or if he fails to utilize such
minimum services or facilities as may be specified in the bye-
laws of the Co-operative Society. As per the proviso, such
members shall not have the right to vote at the general
meeting for a period of one year.
112. Section 22 of KCS Act restricts a member from
holding more than five percent of the total share capital of the
Society. Further, as per Section 28(b) of KCS Act, if the
election to the Board is not conducted before the expiry of term
of the Board, the members of Board who failed to make
arrangements for conducting such election shall be deemed to
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have vacated their office and an administrator appointed by the
Registrar of Co-operative Societies shall assume charge for the
purpose of conducting the election.
113. As per Section 30 of KCS Act, the Registrar of Co-
operative Societies, who forms an opinion as required under
Sub-section (2), may even suspend the Board or supersede the
same by appointing an administrator to manage the affairs of
the Society for a period of 6 months.
114. Since the petitioner herein has approached this
Court seeking to cancel the registration granted by respondent
No.2 in favour of respondent No.3 - Society, the provisions
highlighted above under the KCS Act are to be considered in
light of the provisions under RERA and KAOA and in the context
of the objective with which these enactments were enacted.
115. It is pertinent for this Court to consider the
precedents relied on by both the sides to buttress their
arguments and to highlight the position of law as interpreted
through such decisions.
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116. Learned counsel for respondent No.3 placed
reliance on the decision of the Hon'ble Apex Court in Sobha
Hibiscus Condominium (supra) to contend that respondent
No.5 is not a consumer within the meaning of the Consumer
Protection Act, 1986 and cannot sue or be sued under the said
Act to have the grievances of either allottees or owners
redressed.
117. In that case, the appellant - Sobha Hibiscus
Condominium, being an association of owners that came into
existence pursuant to the declaration made under the
provisions of KAOA, filed a complaint claiming certain reliefs
against Sobha Developers Limited (the promoter), before the
National Consumer Disputes Redressal Commission (NCDRC).
The said complaint came to be rejected on the primary ground
that the complainant is not a consumer within the meaning of
Consumer Protection Act, 1986 and therefore had no locus
standi to file the complaint. The NCDRC referred to Section
12(1)(b) of the Consumer Protection Act, 1986 to hold that only
a recognized consumers association could, amongst others, file
a complaint before the District Forum. It is held that when the
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complainant is a statutory body under the provisions of KAOA,
which came into existence pursuant to a declaration made by
the respondent promoter under the provisions of KAOA, it
cannot be termed as a voluntary association.
118. The Hon'ble Apex Court, on a conjoint reading of
the various provisions of KAOA, the bye-laws of Condominium
and Section 12(1)(b) of the Consumer Protection Act, 1986,
formed an opinion that the complainant came into existence as
per the mandatory provisions under KAOA. Therefore, it cannot
be said to be a voluntarily registered association for the
purpose of filing a complaint before the competent authority
under the Consumer Protection Act. It was highlighted that a
'recognized consumer association' as referred to under Section
12(1)(b) of the Act means a voluntary consumer association
registered under the Companies Act or any other law for the
time being in force. It is pertinent to note that the NCDRC
disposed of the complaint during 2015, i.e., before RERA
coming into force in 2016. Moreover, Section 12(1)(c) of the
Consumer Protection Act, 1986 (repealed Act), which is
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equivalent to Section 35 of the Consumer Protection Act, 2019
was never brought to the notice of the Hon'ble Apex Court.
119. Section 12(1)(c) of the repealed Act and the
present Section 35(1)(c) of the Consumer Protection Act, 2019,
permit filing of a complaint by one or more consumers where
there are numerous consumers having the same interest, for
the benefit of and on behalf of all such consumers so
interested. The only legal requirement provided under these
provisions is getting permission from the District Commission.
Therefore, if there are more such consumers having the same
interest or grievance, they can move the District Commission or
the State Commission, as the case may be, seeking permission
to file the complaint on behalf of or for the benefit of all such
consumers so interested. Therefore, the association of owners
registered under KAOA need not necessarily be the complainant
before the Consumer Forum for redressal of the grievance of
either the allottees or the owners, as the case may be.
120. Learned counsel for the petitioner placed reliance
on the decision in Arunkumar (supra) to contend that, since
the project does not involve commercial units, the provisions of
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the KCS Act cannot have any application. The co-ordinate
Bench of the Court considered a similar situation where the
petitioners therein, being the owners of certain flats, were
opposing the registration of a similar Co-operative Society as
respondent No.4 therein under the KCS Act, on the ground that
the owners who purchased the flats as per the terms of sale
deed are bound by the contractual obligation to form an
association under the provisions of KAOA and a Co-operative
Society cannot be formed for the purpose of maintaining and
managing the residential apartment in question. The Court
considered the rival contentions and held in paragraphs 17, 18
and 19 as under:
"17. Since, the project does not involve
commercial unit, the Registrar of Cooperative Societies
could not have granted permission dated 18.10.2023
marked at Annexure-A. Accordingly, same is quashed.
18. Respondent No.2 is prohibited from
registering the proposed respondent No.4 Society to
manage and maintain the residential apartment complex
known as "DS-Max Star Nest"
19. Direction is issued to the 3rd respondent
builder to comply all the requirements under law and
cooperate with the petitioners and members of the 4th
respondent proposed Society to form an association
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under the Act of 1972 in the project known as "DS- Max
Star Nest" referred to above."
(emphasis supplied)
121. Learned counsel for the petitioner has also placed
reliance on the decision in Proposed Starnest Apartment
Owners Co-operative Society (supra), where the Division
Bench of this Court considered the contention of the appellant
before it, which was a Society proposed to be registered under
the provisions of KCS Act. It had filed an application before the
Registrar of Co-operative Societies seeking permission to
register and obtained such permission, which was objected to
by the respondents therein, on the ground that an association
of owners of the apartment was already formed under the
provisions of KAOA and the permission granted to form a Co-
operative Society to maintain and manage the residential
apartment was illegal. The Division Bench considered the rival
contentions of the parties in light of the provisions under both
enactments and held as under:
"18. The contention of learned counsel for the
appellant that in view of the project being registered
under the provisions of RERA in compliance of Section
11(4)(e), (f), (g) of RERA. a Co-operative Society is to
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be formed, is not acceptable. The said provisions of
RERA wouid mandate the builder to enable formation of
Association or Society or Co-operative Society, as the
case maybe, of the allottees. As the project under
consideration consists only residential units, the said
provisions only mandate formation of association of the
allottees under the applicable laws. The law applicable
in the present case is the Karataka Apartment
Ownership Act, 1972.
19. The contention of learned counsel for the
appellant that even if the project consists only
residential houses/flats, conversion of the flats for
commercial or use of such flats for commercial purpose
is not prohibited, in such circumstances, provisions of
KOF Act. 1972, would be attracted and in compliance of
Section 10 of the said Act, the Co-operative Society is
to be formed is farfetched and is rejected."
122. It is relevant to refer to the decision in Rekha
Kannan and Ors Vs. The State of Karnataka and Ors.11,
wherein the co-ordinate Bench of this Court considered a
petition filed by the petitioners therein, seeking to quash the
registration of a similar Co-operative Society consisting of the
owners of an apartment which is purely a residential complex.
The Court framed the question as to whether a Co-operative
11
WP No.27821/2024 DD 02.05.2025
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Society under the KCS Act could be constituted when there is a
special enactment i.e., KAOA, which specifically provides for
maintenance, management and regulation of such residential
apartments. It considered various provisions under both
enactments, the decision of Division Bench in Proposed
Starnest Apartment Owners Co-operative Society Ltd.
(supra), and various other decisions, to hold that it is only the
association formed by the builder under KAOA that will manage
and maintain the apartments and the common areas, and that
the registration of a Co-operative Society under the KCS Act is
not sustainable.
123. In Mrs. Saraswathi Prakash and Others v.
State of Karnataka12, the co-ordinate Bench considered a
similar situation and, after referring to various decisions
including Arunkumar R (supra), Proposed Starnest
Apartment Owners Co-operative Society Ltd. (supra) and
Shantharam Prabhu v. Mr. K Dayanand Rai13, and various
provisions under KAOA, held in paragraphs 17 and 18 as under:
"17. In light of the decisions stated supra and
considering the provisions of KAO Act, it can be safely
12
WP No. 3779/2023 DD 28.02.2025
13
CRP NO.96 OF 2021 C/W CRP NO.64 OF 2021 dt: 08/09/2021
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held that the lis stands covered, that the petitioners and
the members of the association are entitled to be
registered under the KAO Act and that there cannot be
any association registered under the Act, 1959, to form a
society to manage and maintain the property comprising
of only residential flats. It is also relevant to state here
that the KOFA Act, 1972 and the Rules 1975, are
applicable, if the property has both commercial and
residential units.
18. In the instant case, the project does not
include any commercial unit and as such, the KOFA has
no application and since the KOFA has no application, the
registration under the Act, 1959, is not permissible. It is
relevant to state that respondent No.4 is the association
of the owners of the flats situated in an apartment for
which a specific enactment, viz., the KAO Act has been
enacted and therefore, the registration of the association
has to be made under the KAO Act."
(emphasis supplied)
124. Learned counsel for the petitioner has also placed
reliance on the decision in Akhilesh Anand (supra) to contend
that the co-ordinate Bench considered a similar situation and
pointed out the conflict between KAOA, KOFA and RERA, and
discussed as to which enactment would prevail and held that it
is only KAOA which would prevail in the matter of management
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and maintenance of the common area facilities. The Court
framed point No.3 as under:
"Whether there is any conflict between KAOA
1972 and KOFA 1972 on the one hand and RERA on
the other? If so, which enactment would prevail?"
and answered it in paragraph No. 22.11 as under:
"22.11. Hence, I answer point No.3 by holding
that there is no conflict between KAOA 1972 and RERA
2016, inasmuch as RERA 2016 is applicable pre-
ownership, KAOA 1972 is applicable post-ownership.
Insofar as KOFA and RERA 2016 are concerned, there
is a conflict. However, RERA 2016 would override KOFA
1972, and it is the rights and remedies which are
provided under RERA 2016 which would override those
under KOFA 1972."
(emphasis supplied)
125. It is interesting to note that even the learned
counsel for respondent No.3 has placed reliance on Akhilesh
Anand (supra) in support of his contention that a Co-operative
Society could be formed by the majority of allottees and there
is no bar under any statute. The facts of the case in Akhilesh
Anand (supra) are slightly different. The co-ordinate Bench
had considered a dispute where the majority of allottees had
booked their apartments, but the construction had not been
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completed, despite the period fixed for such completion and
several allottees have formed themselves into a Co-operative
Society as referred to in RERA, to have their grievances against
the promoter redressed. Under those circumstances, the co-
ordinate Bench held in paragraph 29.6 as under:
"29.6. Several of the provisions in RERA 2016
containing non-obstante provisions, RERA 2016 would
override KOFA 1972. Apart from this, RERA 2016,
being a central enactment that occupies the field
relating to disputes between allottees and
developers/Promoters, would override KOFA 1972, a
State enactment, in order to. maintain uniformity
across the country. Taking into account these aspects
and factors, I am of the considered opinion that the
decision of the Division Bench of this court in
STARNEST APARTMENT OWNERS CO- OPERATIVE
SOCIETY LTD, holding that a Co-operative Society can
only be registered in respect of KOFA 1972 if there is
a commercial unit, would no longer be applicable after
RERA 2016 has come into force, more so since RERA
2016 was not considered in STARNEST APARTMENT
OWNERS CO OPERATIVE SOCIETY LTD. This would
also have to be taken into consideration with
reference to the proviso to clause (e) of Subsection
(1) of Section 14, which requires that such an
Association is required to be formed within a period of
3 months of the majority of the allottees having
booked their plot or apartment. Thus, the Association
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of allottees in terms of clause (e) of subsection (1) of
Section 14 could be an Association or Society or co-
operative Society but if such an Association were
required to carry out maintenance activity also, then it
could only be a Co-operative Society under the KSCA
1959 and such a Co-operative Society is required to
be formed within a period of three months or the
majority of allottees having booked their plots or
apartments."
126. In the present case, admittedly, the construction of
residential apartment is already complete. The petitioner, being
the promoter, has obtained the completion certificate and the
Occupancy Certificate. As per Section 17 of RERA, there was
transfer of title. There is already a transfer of title by the
promoter by executing the registered conveyance deed in
favour of majority of allottees, along with the undivided
proportionate title in the common areas in favour of the
association of owners i.e., respondent No.5, which was formed
as an association of owners as per the provisions of KAOA.
When the project is already complete and the transfer of title is
also complete by the promoter as required under RERA, the
application of the provisions of RERA insofar as it relates to
handing over of such apartments and the common areas ceases
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to apply. Admittedly, respondent No.5 was formed as per the
provisions of KAOA at the first instance on 12.06.2023 by
submitting the declaration as required under KAOA. Sections
11 and 12 of KAOA specifies about the contents of declaration
and the deed of apartments and Section 13(1) mandates
registration of such declaration and deed of apartments along
with copies of floor plans under the Registration Act, 1908.
Sub-Section (2) mandates filing of floor plans of buildings
showing the layout location, dimension of the apartments etc.,
along with the declaration. Sub-Section (3) mandates
maintaining of register of declarations and deed of apartments
under KAOA in all registration offices. As per Sub-Section (5),
the Sub-Registrar or the Registrar as the case may be shall
register the declaration along with the floor plan under KAOA
and as per Sub-Section (6), except as provided in the Section,
the provisions of Registration Act, 1908 is made applicable
mutatis mutandis to registration of such declaration and deed
of apartments. It is respondent No.5 which has complied with
all these requirements and got registered the declaration and
deed of apartments with the Registrar under the Registration
Act, 1908 and is required to maintain the common areas and
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common facilities and discharge its duties in accordance with
the provisions of KAOA, KAOR and the bye-laws. Therefore,
the contention of learned counsel for respondent No.3 that
respondent No.5 - Association is not a registered association,
cannot be accepted.
127. It is pertinent to note that in the agreement to sell
and the sale deeds executed by the petitioner as promoter in
favour of various allottees, the words 'association' or
'association of owners' or 'owners' association' are defined to
mean an association of owners established by the vendor and
developer in respect of the apex body 'Sobha HRC Pristine' and
the sub-committee/association for 'Sobha HRC Pristine Phase-2
Block-2' and also for the project as a whole, as per the
provisions of KAOA. Therefore, the contractual obligation for
the owners to be part of such association cannot be ignored,
apart from the statutory requirement.
128. Annexure-C contains the bye-laws relating to the
Owners' Association, which is arrayed as respondent No.5 in
this petition. As per the bye-laws submitted under KAOR, the
applicable Act is KAOA. The object of the Association is to
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provide for maintenance, repair and replacement of the
common areas and facilities by receiving contributions from the
apartment owners, and if necessary by raising loans for that
purpose; to maintain and be fully responsible for water,
electrical, fire, lift, and other equipment, including annual
maintenance; to comply with conditions stipulated in
permissions and No Objection Certificates issued by statutory
authorities; to frame additional rules with the approval of the
General Body after consulting the competent authority; to
establish such funds as the General Body deems fit; to comply
with applicable statutory requirements; to invest or deposit
monies for the benefit of the members; and to do all acts
necessary for fulfillment of all other objects specified in the
bye-laws.
129. The bye-laws further provide that the persons who
have purchased apartments or row houses shall be members of
the said Owners' Association. In the event of transfer of an
apartment by sale, gift, or otherwise, the transferee shall
compulsorily become a member of the Association. In case of
the death of an owner, the apartment shall devolve upon the
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person or persons to whom it is bequeathed in accordance with
law, or upon the legal representatives, as the case may be, and
such persons shall automatically become members of the
Association by operation of law.
130. The bye-laws also provide for joint apartment
ownership, where an apartment is purchased jointly by two or
more persons who shall be jointly entitled thereto and shall be
members in respect of that apartment. An apartment owner
shall be disqualified from voting in the election of members to
the Board only if he is in arrears of common area expenses
payable to the Association for more than 60 days. Each
apartment shall carry one vote, irrespective of whether it is
owned singly or jointly.
131. The bye-law highlights that the Association is
responsible for the maintenance of the building and common
areas, approval of the annual budget, collection of monthly
assessments, and overall management of the condominium.
The Board of office bearers is entrusted with the upkeep and
surveillance of Sobha HRC Pristine, including common and
restricted common areas and facilities, and with the collection
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of maintenance charges and municipal taxes relating to
common areas. Board members hold office for a period of two
years and are empowered to appoint the President, Secretary,
and Treasurer from amongst themselves.
132. The bye-laws further set out the obligations of
apartment owners regarding payment of annual assessments,
maintenance charges, repairs, day-to-day outgoings, and
necessary repair or reconstruction of their apartments. Owners
are not entitled to make any structural modification or
alteration to their units.
133. It provides for the funds collected from apartment
owners form part of the reserve or sinking fund as authorized
by the General Body. The Board is empowered to invest such
funds in nationalized or scheduled banks or in approved
securities. The Association shall maintain a bank account and
publish audited annual financial statements relating to the
common areas and facilities, including the Profit and Loss
Account and the Receipts and Expenditure Account for the
previous year.
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134. The bye-laws clarify that the project is purely
residential, and the primary obligation of the Association is to
manage and maintain the common areas and the facilities for
the benefit of all its members, who are the apartment owners.
The Association has been registered in accordance with the
provisions of the RERA and KAOA.
135. The word 'association agreement' is also defined to
mean the maintenance agreement between the association and
the service provider for maintenance of the common areas,
common amenities and facilities of 'Sobha HRC Pristine Phase-2
Block-2' and the project as a whole. Therefore, in the initial
document styled as an 'agreement to sell' executed by the
petitioner in favour of various allottees, formation of an
association either known as 'association of owners' or 'owners'
association' was undertaken as per the provisions of KAOA, and
it is such association which is required to maintain the common
areas and the common amenities for the project as a whole.
Admittedly, similar clauses were found in the sale deeds
executed by the petitioner in favour of various owners. It is
not in dispute that almost all the owners in whose favour sale
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deeds were executed by the petitioner, conveying the right,
title and interest over their respective apartments, are
members of respondent No.5 - Association, which was formed
initially on 12.06.2023. It is only thereafter respondent No.3 -
Society came into existence on 06.09.2023. It is not in dispute
that few owners who are also members of respondent No.5
joined hands in forming respondent No.3 - Society, being its
members, as they were having some grievance against the
petitioner.
136. Now, the question arises as to whether the allottees
in whose favour sale deeds were not executed by the
petitioner, conveying the title over the apartment and the
common areas, could form a Co-operative Society for
maintaining the common areas and common facilities, for and
on behalf of all the owners who have already acquired title not
only to their apartment but also in respect of the common
areas and common facilities, etc. The answer will be in the
negative, as it is only the apartment owners who have acquired
title to the apartments and also to the common areas and
common facilities who are entitled to maintain, administer and
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manage the same by forming an association. Moreover, when
there is admittedly an agreement between the petitioner and
the allottees or owners to submit the project i.e., the
apartment and the common areas under the provisions of
KAOA, a contractual obligation also lies on all such allottees and
owners to comply with the same. Learned counsel for
respondent No.3 could not explain as to how the members of
respondent No.3 - Society could overcome the contractual
obligation which they themselves voluntarily undertook under
various agreements to sell and the sale deeds in respect of its
members.
137. When respondent No.5 - Association is already
formed as per the contractual obligation and in view of the
provisions under RERA and KAOA, undertaking to maintain,
administer and manage the common areas and facilities,
whether a separate Society under the Co-operative Societies
Act could be formed for similar purposes is a question to be
considered.
138. KAOA, as highlighted above, is a special enactment
brought into force in the State of Karnataka way back in the
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year 1972, which takes care of almost all situations where the
project is complete and the conveyance was executed in favour
of the apartment owners by the promoters, and an association
of apartment owners as defined under Section 3(d) of the Act
was formed. When such an association is formed in accordance
with law and is in place, forming a different Co-operative
Society to run parallel to respondent No.5 cannot be
encouraged. It is to be borne in mind that the project is purely
a residential apartment purchased by the owners with an
intention to live peacefully by investing their hard-earned
money. If there could be two parallel associations, a Co-
operative Society and an Owners' Association with the common
object of maintaining, administering and managing the
common areas, facilities etc., the very purpose of purchasing
the apartment by the owners for their peaceful living will be
frustrated.
139. It is to be highlighted that the KCS Act, which
governs Co-operative Societies formed in the State, makes it
clear that the object of forming such Society is promotion of the
economic interests of its members in accordance with co-
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operative principles. A Co-operative Society established with
such primary object raises a question as to its applicability to a
residential apartment which is definitely not meant for
protecting the economic interest of its member. Moreover, if it
is found that a Co-operative Society is likely to be economically
unsound, its registration shall have an adverse effect on the
development of the co-operative movement, and such Society
cannot be registered as per the proviso to Section 4 of KCS Act.
Admittedly, the owners of the apartments in question will not
have any such economic interest or an intention to develop the
co-operative movement by forming the Co-operative Society.
The object with which the KCS Act came into existence was
only to encourage the co-operative movement by adopting co-
operative principles. KAOA, on the other hand, was enacted for
the specific purpose of providing for ownership of an individual
apartment in a building and to make such apartment heritable
and transferable property and to provide for matters connected
therewith.
140. The bye-laws of respondent No.5 produced as per
Annexure-C, is in accordance with the spirit of the provisions
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under RERA and KAOA mainly to maintain, repair and provide
replacement of the common areas and facilities by receiving
contributions from its members who are the apartment owners.
Incidentally, many other objectives are also provided under the
bye-laws which go hand in hand with the main objective of
forming the owners' association. Whereas, the bye-laws of
respondent No.3 as mentioned above even though contain a
few of bye-laws which are similar to those of respondent No.5
relating to maintenance of common areas and facilities, etc.,
many of the bye-laws are unconcerned with the welfare of
owners of the apartment. A major portion of the bye-laws
cannot be applied or reconciled with the requirements of an
owner of a apartment residing in the residential complex.
141. I have considered the submissions of learned
counsel for respondent No.3 who was more particular about the
object with which respondent No.3 - Society is formed as he
contends that many of the allottees who are members of
respondent No.3 have not been provided with the conveyance
by the petitioner/promoter/builder. It is also his contention that
many allottees and owners are having several grievances
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against the petitioner and that respondent No.5 not being a
voluntary Association as held in Sobha Hibiscus
Condominium (supra), cannot sue or be sued on behalf of
such allottees or owners for redressal of their grievances. The
main crux of the arguments addressed by learned counsel for
respondent No.3 is that the grievances raised by the allottees
and the owners against the petitioner need to be addressed,
and that is the main reason for which respondent No.3 -
Society came into existence.
142. Under Consumer Protection Act, 2019, Section 2
(31) defines the word 'person' to include an individual, a firm, a
Hindu undivided family, a Co-operative Society, association of
persons whether registered under the Societies Registration Act
or not, any Corporation, Company or a body of individuals,
whether incorporated or not, any artificial juridical persons not
falling within any of the preceding Sub-clauses. Similarly under
RERA, the explanation appended to Section 31(1) states that
the word 'person' used therein shall include the association of
allottees or any voluntary consumer association registered
under any law for the time being in force. Therefore, for the
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purpose of RERA, a 'person' includes an association of allottees
or any voluntary consumer association registered under any
law for the time being in force. But whereas under Consumer
Protection Act, it could be an individual, a Hindu Undivided
Family, a Co-operative Society, an association of persons etc.,
as referred to above. Such complaints, either before Consumer
Forum or before RERA authority, could be filed by an individual
allottee or owner, who is aggrieved by non compliance of any
contractual or statutory obligation by the petitioner or anybody
else.
143. The Hon'ble Apex Court in Imperia Structures
14
Limited V/s Angelo Patni , while addressing the issue of
parallel proceedings before RERA Authority and the Consumer
Forum held in paragraphs 34, 35 and 36 as under:
"34-It is true that some special authorities are
created under the RERA Act for the regulation and
promotion of the real estate sector and the issues
concerning a registered project are specifically entrusted
to functionaries under the RERA Act. But for the present
purposes, we must go by the purport of Section 18 of
the RERA Act. Since it gives a right "without prejudice to
any other remedy available", in effect, such other
14
(2020) 10 SCC 783
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remedy is acknowledged and saved subject always to
the applicability of Section 79.
35-At this stage, we may profitably refer to the
decision in Pioneer Urban Land and Infrastructure Ltd. v.
Union of India15, where a Bench of three Judges of this
Court was called upon to consider the provisions of the
Insolvency and Bankruptcy Code, 2016, the RERA Act
and other legislations including the provisions of the CP
Act. One of the conclusions arrived at by this Court was:
"100.RERA is to be read harmoniously with the
Code, as amended by the Amendment Act. It is only in
the event of conflict that the Code will prevail over
RERA. Remedies that are given to allottees of
flats/apartments are therefore concurrent remedies,
such allottees of flats/apartments being in a position to
avail of remedies under the Consumer Protection Act,
1986, RERA as well as the triggering of the Code"
36-We, therefore, reject the submissions
advanced by the appellant and answer the questions
raised in para 28 hereinabove against the appellant."
144. Thus, the position of law is made very clear that
RERA gives an option to the allottee either to approach RERA
authority or to the Consumer Forum under the Consumer
Protection Act, for redressal of his grievance against the
promoter/builder. Even though this position of law is admitted
15
(2019) 8 SCC 416
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by learned counsel for respondent No.3, the only grievance
highlighted by him is that, since respondent No.5 - Association
is held to be not a voluntary association by the Hon'ble Apex
Court in Sobha Hibiscus Condominium (supra), it is not
authorized to represent the grievances of the allottees or
owners against the petitioner before the Consumer Forum. But
Sections 11 to 13 of KAOA makes it clear that declaration of
deed of apartments along with the floor plans and other details
was registered with the register of declaration and deed of
apartments under KAOA and it is entered in the index kept
under Sub-Section (3) of Section 13. As per Sub-Section (6) of
Section 13, the provisions of Registration Act, 1908 has made
applicable mutatis mutandis to such registration and
declaration of deed of apartments. Therefore, the decision in
Sobha Hibiscus Condominium (supra), cannot be made
applicable to the facts in the present case.
145. If at all, the allottees or the owners are having any
such grievances against the petitioner and if they want to get it
resolved either by approaching the Consumer Forum or the
RERA authority, they can do so independently, as formation of
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respondent No.5 - Association is for a different purpose and it is
not for fighting the cause against the petitioner on behalf of the
allottees and the owners.
146. As already stated, Sobha Hibiscus Condominium
(supra) was delivered without reference to RERA and Section
35(1)(c) of the Consumer Protection Act, 2019 or Section
12(1)(c) of the then Consumer Protection Act, 1986 or Section
13 of KAOA. Even if it is to be assumed that an allottee, or a
owner or a group of allottees or owners have any grievance
against the petitioner, they can definitely invoke Section
35(1)(c) of the Consumer Protection Act, 2019 to complain
against the petitioner before the Consumer Forum by seeking
permission of the Consumer Commission in that behalf. Section
31 of RERA provides for filing of complaints with the authority
or the adjudicating officer by any person aggrieved by any
violation or contravention of the provisions of the said Act or
the rules and regulations made thereunder against any
promoter, allottee or real estate agent, as the case may be.
147. Even though learned counsel for respondent No.3
contends that the main reason for forming respondent No.3 -
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Society is to have the grievances of various allottees and even
some of the owners redressed, the bye-laws pertaining to
respondent No.3 do not highlight any such objects. There is no
explanation as to why the bye-laws pertaining to respondent
No.3 do not make any provision to safeguard the interest of
such allottees and the owners, if they are having any grievance
against the petitioner. Moreover, learned counsel for the
petitioner specifically submitted that, till date, respondent No.3
has not raised any dispute under the provisions of any of the
Acts, before any of the forums against the petitioner. This fact
is never disputed by the learned counsel for respondent No.3.
Under such circumstances, the contention of learned counsel
for respondent No.3 that the Co-operative Society in question
was formed mainly with an intention to have the grievance of
the allottees and the owners redressed, cannot be accepted.
148. Learned Amicus Curiae while addressing his
arguments, highlighted various provisions under KOFA, KAOA
and RERA along with the objectives with which each of these
enactments were enacted. As per Section 17 of RERA, the
promoter is required to register a conveyance deed in favour of
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the allottees, along with the undivided proportionate title in the
common areas to the association and to hand over physical
possession of the apartment and the common areas to the
association of allottees or the competent authority, as the case
may be, in the real estate project within the specified period. In
compliance with the same, the petitioner has produced the
letter dated 14.12.2023 addressed to the Deputy Registrar of
Co-operative Societies regarding filing of a copy of the Deed of
Declaration dated 12.06.2023 in respect of the Association,
under the provisions of KAOA.
149. RERA defines the word 'person' under Section 2(zg)
to include a Co-operative Society registered under the law
relating to Co-operative Societies. However, it also includes an
association of persons or a body of individuals, whether
incorporated or not. Sub-Section (9) of Section 19 of RERA,
while dealing with the rights and duties of allottees, mandates
every allottee of the apartment, plot or building to participate
towards the formation of an Association or Society or Co-
operative Society of the allottees or even a federation of the
same. Therefore, under provisions of RERA, an option is given
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to the parties either to form an Association or a Society or a
Co-operative Society or a federation under the local laws. In
Karnataka, when KAOA is the robust enactment to take care of
the interest of the owners of the apartment and when none of
its provisions are repugnant to the Central legislation i.e.,
RERA, and that too, when KAOA is the special enactment
enacted for the very purpose of dealing with maintenance,
administration and management of the undivided interest in the
common areas and facilities in the residential apartment, this
Court does not find any justification for formation of a Co-
operative Society like respondent No.3.
150. Learned Amicus Curiae highlighted the following
points being the hurdles that arise if a Co-operative Society is
formed in place of an Owners' Association in respect of a
residential project:
i. A person can be a member of only one
Society and not multiple Societies.
ii. There is a restriction on holding more than
5% of the share capital without Government
permission.
iii. The management is liable to be superseded
by the Government.
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iv. There is a restriction on voting till the
completion of one year and only one vote per person.
v. There are provisions permitting cancellation
of membership under the Co-operative Societies Act.
vi. There are difficulties in obtaining loans as
only shares are owned and not property.
vii. Additional stamp duty would be attracted if
land and common areas are to be conveyed to the
Society.
151. These practical hurdles, that may be faced by the
owners of a residential apartment if in case a Co-operative
Society is formed, will definitely have to be taken into
consideration while deciding the fate of respondent No.3. The
KCS Act never enables the members to hold the property and
to maintain and manage the undivided share and the facility.
There is always a danger of the management being superseded
by the Government in a peculiar situation and appointment of
an administrator who is an employee appointed by the
Registrar of Co-operative Societies, and who is definitely an
outsider being put in charge. The restriction on holding more
than 5% of the share capital cannot be reconciled with the
object with which the Society is formed. Even though the bye-
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laws pertaining to respondent No.3 refer to the holding of
shares, it is not made clear as to which is the share that is
referred to in the bye-law and how much share each owner is
entitled to hold, who will quantify the share of each owner etc.,
The restriction on voting till completion of one year and only
one vote per person will definitely defeat the object with which
KAOA was enacted, where it safeguards the interest of owners
where there is no restriction to own more than one apartment
and can exercise one apartment one vote and are entitled to
vote, the moment they become members of the association.
152. Learned Amicus Curiae, referring to Section 2(n),
Section 11(4)(f) and Section 17 of RERA, contended that from
these provisions it is evident that as per RERA, the
apartments/flats/buildings must be conveyed to the allottee
and the undivided proportionate title in the land on which the
said building or apartment is constructed must be conveyed in
favour of the association of the allottees or the competent
authority. When this requirement under RERA is taken into
consideration with the provision of KAOA, it also provides for
conveyance of the undivided interest in the land in favour of
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the Association and the individual apartment in favour of the
allottee, in terms of the deeds contemplated therein. But the
provisions of KCS Act do not have any such provision to enable
the Co-operative Society to own/hold such undivided interest in
the land, amenities or facilities.
153. Learned counsel for respondent No.3, placing
reliance on the decision of the Hon'ble Apex Court in Forum
for People's Collective Efforts (supra), vehemently
contended that a similar local enactment like KAOA, which was
enacted in the State of West Bengal by the name 'WB-HIRA',
was struck down as being repugnant to the provisions of RERA,
and therefore, according to him, KAOA itself is repugnant and is
liable to be struck down. The Hon'ble Apex Court in Forum for
People's Collective Efforts (supra) considered the
repugnancy between WB-HIRA and RERA while dealing with
various provisions under these enactments in detail. In light of
the constitutional scheme of Article 254, the Court highlighted
three principles to find out the repugnancy between two
statutes, as follows:
i. Whether there is a direct conflict between
two provisions.
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ii. Whether Parliament intended to lay down an
exhaustive Code in respect of the subject matter,
replacing the Act of the State Legislature.
iii. Whether the law made by Parliament and
the law made by the State Legislature occupy the
same field.
154. The Court held in paragraphs 174 and 178 as
under:
"XXX
174. From our analysis of the provisions of the
RERA on the one hand and of WB-HIRA on the other,
two fundamental features emerge from a comparison
of the statutes. First, a significant and even
overwhelmingly large part of WB-HIRA overlaps with
the provisions of the RERA, These provisions of the
RERA have been lifted bodily, word for word and
enacted into the State enactment. Second, in doing so,
WB-HIRA does not complement RERA by enacting
provisions which may be regarded as in addition to or
fortifying the rights, obligations and remedies created
by the Central enactment. The subject of the
provisions of the State enactment is identical, the
content is identical. In essence and substance, WB-
HIRA has enacted a parallel mechanism and parallel
regime as that which has been entailed under RERA.
The State Legislature has, in other words, enacted
legislation on the same subject-matter as the Central
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enactment. Not only is the subject-matter identical but
in addition, the statutory provisions of WB-HIRA are on
a majority of counts identical to those of RERA. Both
sets of statutes are referable to the same entries in the
Concurrent List - Entries 6 and 7 of List III - and the
initial effort of the State of West Bengal to sustain its
legislation as a law regulating "industry" within the
meaning of List II Entry 24 has been expressly given
up before this Court (as we have explained, for valid
reasons bearing on the precedents of this Court).XXX...
XXX
178. The statutory overlaps between WB-HIRA
and RERA cannot be overlooked, as noted above. But
quite apart from that, there is an additional reason why
the test of repugnancy engrafted in clause (1) of
Article 254 is attracted. This is because several
provisions of the WB-HIRA are directly in conflict and
dissonance with RERA. Where a State enactment in the
Concurrent List has enacted or made a statutory
provision which is in conflict with those which have
been enacted by Parliament, it may in a given case be
possible to excise the provision of the State statute so
as to bring it into conformity with the parliamentary
enactment. But the present case, as we shall
demonstrate, involves a situation where valuable
safeguards which are introduced by Parliament in the
public interest and certain remedies which have been
created by Parliament are found to be absent in WB-
HIRA."
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(emphasis supplied)
In conclusion, the Court by referring to each and every
provisions in WB-HIRA and comparing with RERA concluded in
paragraph 183 as under:
" 183. XXX
The above provisions are repugnant to the
corresponding provisions which are contained in RERA.
These provisions of the WB Act, 1993 impliedly stand
repealed upon the enactment of RERA in 2016, in
accordance with Sections 88 and 89 read with Article
254(1) of the Constitution. Hence, we clarify with
abundant caution that our striking down of the
provisions of WB-HIRA in the present judgment will not,
in any manner, revive WB Act, 1993, which was
repealed upon the enactment of WB-HIRA since WB Act,
1993 is itself repugnant to RERA, and would stand
impliedly repealed."
Thus, the court declared that those provisions are
repugnant to the corresponding provisions contained in
RERA.
Accordingly, the Court held in paragraphs 184
and 185 as under:
"184. For the above reasons, we have come to
the conclusion that WB-HIRA is repugnant to RERA, and
is hence unconstitutional. We also hold and declare that
as a consequence of the declaration by this Court of the
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invalidity of the provisions of WB-HIRA, there shall be
no revival of the provisions of the WB Act, 1993, since it
would stand impliedly repealed upon the enactment of
RERA.
185. Since its enforcement in the State of West
Bengal, the WB-HIRA would have been applied to
building projects and implemented by the authorities
constituted under the law in the State. In order to avoid
uncertainty and disruption in respect of actions taken in
the past, recourse to the jurisdiction of this Court under
Article 142 is necessary. Hence, in exercise of the
jurisdiction under Article 142, we direct that the striking
down of WB-HIRA will not affect the registrations,
sanctions and permissions previously granted under
the legislation prior to the date of this judgment."
155. Even though this decision was very much relied
upon by the learned counsel for respondent No.3 to seek
striking down of the provisions of KAOA, as already stated, no
such repugnancy was highlighted and brought to the notice of
this Court. On consideration of the various provisions of KAOA
in light of RERA, this Court does not find any such repugnancy
and therefore, finds no merits in the contention taken by
learned counsel for respondent No.3.
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156. Learned counsel for respondent No.3 placed
reliance on the decision in Suman Jindal (supra), wherein, the
Hon'ble Apex Court considered a dispute relating to a
residential apartment which the appellant therein had booked
with the respondent - developer to contend that the provisions
under RERA are made applicable to the allottees and that the
promoters cannot avoid their obligations by relying on the
contractual terms under the agreement to sell and the sale
deed. There cannot be any dispute with regard to this
proposition of law. Whatever the statutory and contractual
obligations that are undertaken by the petitioner, he is bound
to discharge the same. The provisions of KAOA do not come in
the way of suing the petitioner for any of the shortcomings or
failures he might have committed in complying such statutory
or contractual obligations.
157. As I have already stated, there is no repugnancy
between RERA and KAOA. Even if there are any shortcomings
in KAOA, the same is to be overcome by bringing appropriate
amendment to the Act. But the remedy does not lie in forming
a Co-operative Society under the Co-operative Societies Act,
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which is having an entirely different object to be served or
fulfilled. In other words, when KAOA, the Special Enactment is
capable of fulfilling the needs of the owners of the residential
apartments, even if any minor shortcomings or drawbacks are
to be noted, the same cannot be a ground for registration of
different Association or Society under different enactments,
which do not co-relate with the objectives with which the KAOA
was enacted. At the most, the Government may think of
bringing suitable amendment to the provisions of KAOA.
158. In view of the discussions held above, I am of the
opinion that there cannot be two parallel associations in a
residential apartment which will be against the interest of the
owners and the inmates in the matter of maintenance,
administration, management and other incidental functions and
also in safeguarding the interest of its members. If the allottees
or the owners are having any grievance against the petitioner,
they are free to approach the competent authority, be it under
the provisions of RERA or the Consumer Protection Act for
redressal of their grievance individually or by forming a
separate association, in accordance with law.
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159. Respondent No.5 - Association is formed in
accordance with the statutory obligation as provided under
RERA and KAOA and also as per the contractual obligation in
terms of the clauses in the agreements to sell and the sale
deeds executed in favour of the allottees or owners, as the case
may be. Therefore, respondent No.3 - Society could not have
been registered by the allottees and the owners to maintain,
administer or to manage the residential apartments and to
maintain the common areas and common facilities. The Co-
operative Society is not a good vehicle to fulfill the objectives of
maintaining, administering, managing the residential
apartments or the common areas on behalf of the owners.
Hence, I am of the opinion that registration of respondent No.3
- Society is to be cancelled. Consequently, the order impugned
dated 07.02.2024 is also liable to be quashed.
160. In view of the above, IA.3 of 2024 filed by
respondent No.3 seeking certain directions against the
petitioner is also liable to be dismissed. Accordingly, I proceed
to pass the following:
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ORDER
(i) The petition is allowed.
(ii) The order dated 07.02.2024 produced as per Annexure-A passed by respondent No.1 in Appeal No.30/2023-24, is quashed.
(iii) Registration of respondent No.3 - Co-
operative Society by respondent No.2 dated 06.09.2023, produced as per Annexure-B, is cancelled.
(iv) Consequently, IA.3 of 2024 is dismissed.
Sd/-
(M G UMA) JUDGE BGN/MKM/BH/PNV