In a relief to more than 200 homebuyers of Klassik Landmark apartment, a Karnataka High Court order has overturned the interim order of the Deputy Registrar of Cooperative Societies (DRCS) staying the registration certificate of the residents' association registered under the Cooperative Societies Act in Bengaluru.
The DRCS had previously passed an interim stay on the registration certificate of the Residents Welfare Association (RWA) of Klassik Landmark apartments registered under the Karnataka Cooperative Societies Act (KCSA), 1959.
The RWA, Klassic Landmark Apartment Owners Cooperative Societies Ltd, filed a Writ Petition (WP) arguing that such an order staying the registration of the association cannot be passed, in an appeal filed under Section 106 of the KCSA, 1959, the HC order noted.
Allowing the WP, the order dated August 10, said, "The WP is allowed and the order passed by the Deputy Registrar of Cooperative Societies (DRCS) in July 2023, is hereby quashed and set aside."
Further, the court gave two months from the date of the order for DRCS to consider the appeal after giving an opportunity of hearing to the contesting parties and dispose of the case.
Relief to homebuyers
According to the petition filed by the RWA, consisting of more than 200 homebuyers as members, the developer, Klassic Enterprise Private Limited, had failed to form an association after executing sale deeds in 2016/2017.
The homebuyers claimed that between 2018-2019, the developer collected the maintenance payments in an account under the name of Klassik Apartment Owners Association.
However, when the home buyers started demanding the registration details of the association and the bank account, the account was closed. The builder further directed the homebuyers to deposit the maintenance charges of Rs 3 per sq ft in the account of the developer, homebuyers said.
At this point, the RWA decided to exercise its rights under Article 19(1 )(c) of the Constitution --- which guarantees to all its citizens the right to form associations and unions or cooperative societies --- and registered their association under KCSA 1959 in July 2022.
Suriya Narayanan, one of the advocates representing the RWA, confirmed that First Information Reports (FIRs) and counter FIRs were filed in 2022 by both the RWA and the builder. However, these FIRs have been closed in the settlement at the Lok Adalat.
A list of questions has been sent to the developer and Moneycontrol will update the story after receiving a response.
HC quashes DRCS stay
The petition filed by RWA also mentions that in 2023, the developer filed an appeal challenging the registration certificate of the RWA before DRCS. The appeal stated that the granting of the registration was done without following due process of law. Following this DRCS passed a suo moto interim stay on the registration certificate in March 2023, and confirmed the same in June.
The aggrieved RWA then moved the High Court challenging the interim stay on the association registration.
Currently, several orders and directions from the Karnataka High Court and the state government have questioned apartment registrations in Karnataka.
Previously, the Karnataka High Court struck down Karnataka Societies Registration Act (KSRA) 1960 for registering RWAs. And, the state government has clarified that the Karnataka Apartment Ownership Act (KAOA) 1972 does not have provisions to register associations, Moneycontrol reported. Advocates say registrations under KCSA 1959, the only Act available, are often avoided as the Act is stringent on developers.
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