A Mumbai Co-operative Court has ruled that a housing society cannot retain a parking deposit simply by declaring it “non-refundable”. The society must demonstrate a valid legal basis for keeping the money, the court said while directing RNA Regency Paark Tower Co-operative Housing Society in Kandivali West to return Rs 50,000 to members Jignesh Khiraiya and Kusum K Khiraiya, along with 6% annual simple interest.
In its September 22 order, the court also instructed the society to reimburse the couple’s legal expenses. Interest will be calculated from January 30, 2022, when the society received their written request for repayment, until the refund is completed.
The dispute dates back to June 2017, when the couple paid Rs 75,000 as a non-refundable deposit for stilt parking while transferring their flat. They subsequently challenged the society’s decision to retain Rs 50,000 of the amount, arguing that the collection lacked a lawful justification.
According to the couple, a general body resolution passed on June 10, 2012, required new members to pay Rs 75,000 for stilt parking, apart from a Rs 25,000 transfer premium. They said they paid the demanded amounts. Following their objection, the society credited Rs 25,000 to their maintenance account but kept the remaining Rs 50,000.
The society acknowledged receiving the deposit and returning Rs 25,000 through the maintenance account. However, it argued that the retained funds had been used for major repairs costing approximately Rs 9 lakh. The court found that the society had not submitted documentary evidence to support this claim.
After reviewing payment receipts, the resolution and correspondence between the parties, the court concluded that the society had failed to establish a legal basis for retaining the balance. It noted that the levy was connected to the membership transfer but was not justified by registered bye-laws, a separate agreement or evidence of services provided in exchange.
The court also cited earlier judgments stating that general body resolutions cannot authorise collections prohibited by law. It held that unauthorised amounts must be refunded under Section 72 of the Indian Contract Act, 1872.
Source: Hindustan Times
