Transfer fees : How and in what way recoverable by a society

By Legal Bureau

Can a society insist upon getting transfer fees as a matter of right without passing a proper resolutions to that effect under the old bye-laws or whether a society can charge more than Rs. 25,000/- as transfer fees if it adopted the Model Bye-laws ?

This question has been debated again and again in many societies and quarrels take place between the members on one side and the Managing Committee on the other side. It is to be noted tat even though every Housing Co-operative society is autonomous it has to comply with the Maharashtra Co-operative Society Act 1960 and its rules and regulations.
One such important case arose in the case of Ichalaxmi H.Mehta v/s. Anju Premises Co-operative Society Limited in which the main point was whether the society could refuse admission to membership without payment of transfer fees. The society wanted to taken transfer fees in the guise of common amenity fund. It appears that many societies take transfer fees, not as transfer fees but as ‘contribution to repair fund’ or ‘contribution to welfare fund’ or donation towards the fund of the society. Call it by name, the society has no right to recover such charges.
If the society had adopted the Model Bye-laws then proper resolution should be passed wherein it should clearly be mentioned that the transfer charges shall not apply to transfer of share or interest of the transfer charges shall not apply to transfer of share or interest of the transferor in a capital / property of the society to the members of his family or to his nominees or to his legal heirs, successors and representatives.
The court in the case of Anju Premises Co-operative Society laid down that it is an established point that no society is allowed to go beyond the framework of its bye-laws. The court held that transfer charges cannot be taken in the guise of common amenities fund and as such the society has no right not to admit a member on the ground that transfer charges have bot been paid when no proper resolution has been passed and such the member stands admitted.
Thus it is very clear that a society would have no right not to admit the member when no proper resolution has been passed when it followed the old bye-laws and charge more than Rs. 25000/- as transfer fees when the society has adopted the model bye-laws.