IRAC Legal Analysis of Current RWA Apartment Owners Society

 IRAC Legal Analysis of Current  RWA   

ISSUE

1. Is the current  registration of  Owners Association legal?

RULES/EXPLANATION

1. Karnataka Apartment Owners Act 1972
2. Karnataka Registration of Societies Act 1960

Current registration is under ser 2 above. In this regard,, the following are relevant:

1. Current Registration of  Society under 1960 act 
1. 1960 Act only for 
1. Promotion of charitable activities.
2. Promotion of educational, science, art, literature, or the fine arts.
3. Promotion of sports
4. Diffusion of knowledge pertaining to commerce and industry
5. Political education training
6. Maintenance of library
7. Collection/preservation of historical monuments, technical and philosophical research
2. "The societies whose aims and objectives are confined to the welfare and interest of its members only such as Pensioners Association, Housing Societies etc. do not come under the scope of Societies Registration Act 1960."  https://www.indiafilings.com/learn/karnataka-society-registration/
3.  Section 10 of the Karnataka Ownership Flat Act 1972, states: ‘Promoter to take steps for formation of Cooperative society or company’ the promoter is required to register cooperative society or company hence it is not legal to register under Karnataka Society Registration Act of 1960.  
2. Regulating Authority ruling:
1. Government of Karnataka (Department of Co-operation) Registrar of Co-operative Societies, Karnataka State, Bangalore- 560052. Ref no: RSR / Cooperative / 144 / 2018-19 Date: 30-11-2018  See https://tinyurl.com/y58437bj
3. Court Rulings
1.  HC, Karnataka  ruling also on the subject.( https://indiankanoon.org/doc/1356067/)
• "3. In fact, I have often observed and even issued notice to the Registrar of Societies in Karnataka. It is strange that under the Karnataka Societies Registration -Act, 1960 (hereinafter referred to as the Act) registration is permitted to these Associations who neither have as their objects promotion of culture, sports nor education but their own trade or professional interests. On that ground it is open to this Court to reject the locus standi of the petitioner to prosecute this petition. Sec. 3 of that Act expressly provides the purpose for which the Association of person may have registered under that Act. If any Association carries on activities outside those purposes enumerated in Sec. 3 of the Act, it will not be entitled to the registration under that Act."
2. SC Ruling :
• Illachi Devi (D) By Lrs. And Ors vs Jain Society, Protection Of ... on 26 September, 2003 : "This appeal is directed against the judgment and order dated 17th August 2001 of the High Court of Delhi, which raises a question, whether a Society registered under the Societies Registration Act, 1860 is entitled to obtain Letter of Administration under Section 236 of the Indian Succession Act (in short "the Act")?.....A society is an association of persons. It may or may not be registered under the Societies Registration Act. Since the aforementioned provisions were inserted in Sections 223 and 236 of the Act, the Courts have held that no Administration can be granted in favor of a society, although a Society could be a beneficiary under a Will executed by testator." https://indiankanoon.org/doc/854277/

ANALYSIS/APPLICATION

1. Applicable statute mandates moving to registration under coop Society
2. Owners Interest also point in this direction:
1. Under 1960 Act, any thing that is given to the Society or owned by the Society is irretrievably lost to the owners for ever:
1. 23. Upon dissolution, no member to receive profit.- 
• (1) If upon the dissolution of any society registered under this Act, there shall remain, after the satisfaction of all its debts and liabilities, any property whatsoever, the same shall not be paid to or distributed among the members of the said society or any of them, but shall be given to some other society, to be determined by the votes of not less than three-fifths of the members present personally or where proxies are allowed, by proxy at the time of the 13 dissolution, or in default thereof, by the principal civil court of original jurisdiction of the district. 
• (2) Notwithstanding anything contained in sub-section (1), it shall be lawful for the members of any society dissolved, to determine by a majority of the votes of the members present personally or where proxies are allowed, by proxy, at the time of dissolution of such society that any property whatsoever remaining after the satisfaction of all its debts and liabilities shall be given to the State Government to be utilized for any of the purposes referred to in section 3. 
2. This is totally NOT in the property interests of the owners and unacceptable to the owners as the property including the UDS and common areas and facilities and also the society money (cash bank and assets of the society) are property owned by the owners and belong to the owners and can not be forced out of the owners hands by statutory provisions.

CONCLUSION

In view of all the above, Registration under 1960 Act is  totally illegal and the protection provided to the owners by the 1972 Act is NOT provided to the owners and hence compliance demands that the Society be re-registered under the proper Act.