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Paid excess transfer fees?

HC says if you paid more than Rs 25,000 willingly, don’t expect courts to help you get a refund

mumbai Updated: Feb 20, 2010 01:51 IST
Kanchan Chaudhari

Do not pay more than Rs 25,000 as transfer fee to a housing society when you buy or sell a flat.

And if you already have, forget about it because the Bombay High Court has ruled that you cannot ask for a refund unless you prove you were forced to pay the sum.

The court has held that members of a co-operative housing society cannot seek a fund of transfer fees paid transferring shares in his or her name) unless they prove that the amount was paid under coercion. This is because the Maharashtra Co-operative Societies Act states charging more than Rs. 25,000 as transfer fees is illegal.

The high court (HC) also reversed the order of a co-operative appellate court, which had directed Bhartiya Bhavan Co-operative Housing Society at Marine Drive to refund Rs. 9.63 lakh received as transfer fees from a member, Krishna Bajaj.

Justice Roshan Dalvi of the HC held that the woman failed to prove her allegations of coercion. The judge also said that the woman could have avoided the illegal payment.

“The respondent (Bajaj) succumbed to an illegality. She failed to keep a straight bat...,” Justice Dalvi said. “She could have refused to make the illegal payment.”

Bajaj had bought two flats and five parking slots for Rs 3.21 crore in July 1992. She had paid the transfer fee at 3 per cent of this sum.

Two years later, Bajaj approached a co-operatives court seeking a refund of Rs 9.63 lakh saying it was an illegal demand and was paid under coercion. She also alleged that the money was charged under the guise of a building repair fund.

The co-operatives court had directed the society to refund the amount with 12 per cent interest. The appellate court had upheld the ruling, which the society challenged in the HC.

The judge said that Bajaj could have applied under provisions of the Maharashtra Co-operative Societies Act for transfer of membership without making the illegal payment. “But the respondent chose an easier option,” said the court.