Posh south Mumbai housing society abusing law, misguiding members

Members fear massive chaos due to malpractices by managing committee


Geetanjali Minhas | July 16, 2013

(This is first in a series of stories on flouting of norms by managing committees of cooperative housing societies in Mumbai).

As the name suggests, Grand Paradi Cooperative Housing Society in south Mumbai’s upmarket Kemps Corner area, is a grand housing complex, indeed. But peep in and talk to the residents, and they will say all that looks swell from outside may not be the same once inside – the story of the complex’s working is complex, indeed.

That’s what Anup Patel, an entrepreneur, and Navin Bhagwati, brother of former chief justice of India PN Bhagwati, both flat owners and residents of the housing complex, have found. The duo, along with several other members, are running a battle with the society’s managing committee (MC) after they noticed associate members flouting norms and taking crucial decisions involving funds worth crores of rupees in “non-transparent manner”.

They are also knocking the doors of the state cooperative department, seeking clarity on rights of associate members as specified under law.

While the law says associate members cannot vote and contest elections, Patel, Bhagwati and others claim that’s only the rulebook – they say the builder himself, and some others, have not only become associate members but also helped contentious decisions be passed in annual general meetings (AGM).
According to a directive (housing manual) dated October 15, 2011, and issued under section 79(A) of Maharashtra Cooperative Societies Act-1960, anyone who has “not contributed to purchase of flat/ property” cannot contest elections of the society’s managing committee. This rule replaced the earlier one that said a person could become an associate member and contest MC election after paying a fee of Rs 100.

“Some associate members – including the chairman, treasurer of Grand Paradi – have not contributed to purchase of property in the society (shorn of legality, it means they do not own flats). But not only  are they part of the MC  but are also taking  decisions involving huge amounts of funds in a non-transparent manner.

“Law-abiding members of the society fear such decisions, of associate members illegally holding office in MC, could be challenged in court, leading to chaos.”
Besides this, Patel said, the builder/developer – who resides in the building and is an associate member – has for years dilly-dallied in giving  either  originals or copies of crucial  documents like conveyance deed (transfer of ownership right to allottee post-possession), occupation certificate and  building plans. These plans are submitted by the builder to Brihanmumbai Municipal Corporation (BMC) at the time of getting permissions to construct  the building, and later occupy it.

The residents filed a case in Bombay High Court back in 2001 to get the documents and conveyance deed. They contend that just vacant land within the  premises is worth more than Rs 500 crore and residents are opposed to the builder carrying  out any additional construction there. 

Irregularities all around

As regular reports emerge about hundreds of buildings without conveyance deeds and occupation certificate running into serious problems, residents and flat owners of Grand Paradi are more flummoxed. To compound matters, and raise suspicion of further transgression, an RTI query filed by Patel to the BMC in 2012 showed  that the building plans were stamped in  1998, while construction  had taken place way back in 1971-1973 and the society registered in 1977.

“Amid such irregularities with far-reaching implications, several concerned senior members wrote a letter to the managing committee and requested it to seek unbiased legal opinion. But despite Bhagwati (a structural engineer by profession) seeking  legal  view from solicitor firm Kanga & Co, vested interests  obstinately  refuse to vacate positions,” Patel said.

When Governance Now met district deputy registrar-1 Chandrakant Tikule and gave reference of court judgment on associate membership, he said that since there is no clear direction from the high court, the department is at liberty to have  its own interpretation.

“All MC (managing committee) posts held by associate members elected in MCs after October 15, 2011 – or after the release of MCS Manual, which is mandatory –will be considered invalid by respective deputy registrars  on complaints received from aggrieved members,” Tikule said.

That’s the law. Ground reality, though, is in sharp contrast. Allegedly in connivance with vested interests within  the society’s managing committee, Mont Blanc Properties and Industries, the developer, became associate member by paying Rs 100 on November 1, 2011 and was coopted as a member of MC.

Records available with Governance Now show that some associate members, who are also part of  repairs and renovations committee of Grand Paradi and took decisions to raise funds running into crores, are also part of negotiations committee with the builder for an out-of-court settlement to get the conveyance deed. According to some residents, the builder had  earlier told them that these documents were lost.

According to information available, with some vital records missing, several flat owners feared a fate similar to that of Campa Cola compound in the city’s Worli area, where the municipality will raze the illegally constructed floors (read the story here). They subsequently expressed  their  concerns to managing committee secretary Atul Patel, an “honest and straightforward” man, according to the residents, after which he filed an RTI  query with the BMC.

Asked why associate members who are not co-owners  are not only part of managing committee but are also taking crucial decisions, Atul Patel said: “I have no choice if they do not resign on their own (voluntarily). People have the right to challenge law, and we can’t stop them from doing that. The  matter is sub judice with  the DR (deputy registrar). We will act as per orders.”

Asked why such members are not vacating their seats since the Manual has taken effect, Patel said these members contend that the law came into effect after they took charge, so they will continue till the next elections of the society are held. And how come these associate members, who are not co-owners of flats in Grand Paradi, have double-voted resolutions? The society secretary said  he cannot do “much about it… and if people want to, they can challenge it”.

Managing committee or mismanaging committee at helm?

Despite a GBM decision (considered supreme in society) in April 2013 to have Navin Bhagwati, regarded as a man of integrity, in the subcommittee for major repairs work, the MC decided against it and gave the contract to what many residents allege is a “favored  contractor”.

“The MC is violating all processes and rules and flouting laws. No one knows engineering in the MC. I have been a consultant to the Birla Group for 30 years but these people have never taken my opinion,” an angry Bhagwati said. “I gave a 10-point suggestion on choosing the appropriate contractor and disapproved of the contractor the MC had picked. But they still engaged him  and paid him large amounts of money for shoddy work.”

Documents available  say that  in the 2010  AGM, the society’s chairman allegedly manipulated minutes to negotiate settlement in  favour of the builder against  the majority decision to continue the case and prevent him from taking up additional construction. After some members objected, the minutes were ratified  in a subsequent AGM held in 2011.

In 2012, the issue of exploring a settlement with the builder, which was not  part of the meeting’s agenda, was taken up with the chairman’s permission. According to Anup Patel, many non-members attended the AGM and voted to pass the resolution by raising hands. They also reportedly proposed and seconded other decisions.

Patel said: “The builder and certain office-bearers, who are associate members, not only attended meetings but also double-voted resolutions during the AGM and SGM held  between 2010 and 2013  after signing Appendix 10A form (no objection certificate and undertaking from original member intending to be a member of the managing committee). Neither they nor their families are active members. Besides, non-members were also allowed to vote. Since the balance sheet has to be passed (in these meetings), it is a serious issue fraught with financial and legal consequences.

“The MC also awarded many major repair contracts to favored contractors and vendors without following  procedures.”

As of now, some members have approached deputy registrar seeking  clarification on rights of associate members.  The hearings have been adjourned on multiple occasions on the grounds of ill health of the advocate engaged by the MC. Bhagwati has also filed an RTI seeking certified copies of various documents submitted by the builder to BMC  at the time of obtaining approvals for construction.



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