The Haryana Apartment Ownership Act (HAOA), 1983 comprehensively covers all issues of ownership, management, and maintenance of Apartments, in condominiums. But now, with no need for a change – only effective implementation was needed - a completely new Act has been brought in. Why are all apartment societies now to be registered under the new Haryana Registration and Regulation of Societies Act, 2012?
Of real concern is that many points that were comprehensively covered under HAOA are not even mentioned in the new Societies Act. So will we have the registration and regulation of the property under one act, while issues of ownership of Common Areas & Facilities, and management and maintenance of condominiums will be under reference of the HAOA Act? Is this an act of deliberate confusion?
There seem to be ‘motivations’ here – of not wishing to have apartments operate under the HAOA. The rights of builders are seemingly more important than those of the apartment owners and residents.
Could the issue of the clear title of the Common Areas and Facilities conferred on apartment owners under the HAOA be the reason for this change? The old Societies Act provided no such clarification, leave alone benefit, for apartment owners.
Could the 300-member maximum limit for a Society have been put there to take care of a specific case(s)? Further, by introducing a seemingly innocent clause of maximum 300 members in any RWA, and the concept of Collegiums, is the builder body making a base for an alternate RWA of their own, in all large condominiums. And with the Registrar being the sole adjudicator – with no legal recourse ! – there is ample scope for foul play.
Could the new Act itself have been made to take care of some on-going investigations or proceedings? Because these would now be continued in accordance with the provisions of the new Act - and under the same all-powerful Registrar system.
A quiet amendment to one of the oldest Acts in the country is all set to bring waves of change in the city of Gurgaon and the State itself. Whether it is a welcome change or not is strongly contested.
The new Haryana Registration And Regulation of Societies Act (2012), brought out on March 28 this year, has some significant changes with regards to the functioning of the state’s Residents’ Welfare Associations (RWAs) of condominiums, builder colonies and plotted houses. The biggest change is for the condominiums, which were earlier regulated by the Haryana Apartment Ownership Act (1983). They have also been brought under the purview of the new Societies Act {under Chapter III, Section 6 (x)}, which means the functioning of most condominium RWAs is set for a shake-up, to say the least.
First off, the earlier Societies Act (1860) has been repealed. Although not repealing the Haryana Apartment Ownership Act in toto, the new Act calls for changes in the apartment societies. A new rule says that any society which has over 300 members has to divide its flock into ‘Collegiums’. In every such society, there would be a General Body and a Governing Body, and Collegiums would form mini-general bodies as such. It is to be noted that this rule would be of importance to group housing societies, which in Gurgaon will almost always have members beyond the prescribed number. An official in the Registrar’s department claims that this has been done so as to maintain an easy working atmosphere for group decisions. But B.K Dhawan, President Emeritus of Silver Oaks Apartments in DLF Phase-I, says that the societies have been working fine without this rule, and this would just introduce another layer of red-tape in the works of the apartment societies. “There is absolutely no need for division of the society members,” he says. The recent elections of the Qutab Enclave Residents’ Welfare Association (QERWA) were held following the new format and rules. The new Governing Body’s right to rule is being hotly contested by the earlier set of office members. A member of QERWA, who had voted in the elections, says, “This was not really necessary, but we wanted to follow the rules which had been laid down. The selection of Collegiums, voting as per the new rules – everything certainly did take more time; and what was gained from sub-division of the members is not really clear.”
Now, regardless of current validity of apartment RWAs, they will have to be re-registered under the new Societies Act (2012). In fact, all societies which have not been registered under the old Societies Act have to also follow suit. Why the existing registration cannot be recognised under the new Act has not been explained at all. Also, some of the RWAs in Gurgaon have not been registered at all, prominent being some of the builder-appointed cases. In these instances, the sole function of the RWA is of organising cultural events – and the lack of registration has never impeded them.
Further, in existing court cases, will the Apartment Act be set aside, to make way for the new Societies Act as the new ‘rule book’? An official says that the Apartment Act will continue to fill in the gaps of the Societies Act, until further amendments are put in. “What has not been addressed by the Societies Act will be addressed by the older Apartment Act, with respect to the condominium RWAs.”
In its normal day-to-day working, the RWA of a housing society takes a number of decisions regarding the functioning of the body, and therefore its people. Differences are resolved amongst themselves as a body. These activities of the RWA have been impacted in a major way, courtesy the new Act. The surprise factor is the breadth of authority of the Registrar’s office in the affairs of an RWA.
What has been found distressing to the RWAs of the city is the fact that the decision of the Registrar cannot be contested in a court of law. “How can this be possible?” asks Gautam Gulati, the former RWA president of World Spa Apartments. His RWA is in the middle of wresting power from the builder, over non-provision of adequate maintenance. “The very basis of democracy in our country lies in the fact that an aggrieved person can go to court over an unfair decision,” he says. The Chapter XIV: Special Provisions – Point 89 (1&2) of the Societies Act disallows any Civil Court to entertain, settle, decide or deal with any matter which the Act has mandated under the jurisdiction of another authority of the Act (namely the Registrar or the District Registrar). “If this power is taken away from the people, there’s nothing left other than descent into total anarchy in the hands of a few individuals.”
There are also some contradictions. Point (iv) in Section 37 of Chapter VII: ‘Any resolution passed by the governing body/general body/Collegium, which is not consistent with the Act, shall be (considered) invalid’ – the Act does not state who is the competent authority to decide that a resolution is against the spirit of the Act, and therefore invalid. The answer would again be the Registrar, who has been given most of the authority to pass judgement on almost every facet, comments Sanjay Singh, President of the M2K White House, This group of condominiums and builder societies has been fighting a battle with an absconding developer and a reluctant Haryana Urban Development Authority (HUDA), over control. “Were some ‘motivated’ people to take charge, every decision would be taken out of the RWA’s hands, and rendered appeal-less,” he says.
Simultaneously, the subsequent point (v) states that no action or resolution of the RWA can be considered invalid, just because the RWA does not have the capability to carry it out. The clarification, on how a resolution can be considered both invalid and accepted, is not answered in the Act.
Acts Of ‘Good Faith’
No suit, prosecution, or other legal proceedings shall lie against the Registrar General or any other official, of anything done or purporting to have been done in good faith, under the Societies Act. Were an unscrupulous official, in connivance with builders, to take decisions against the interests of the society and the people in it, there can be no legal retribution. Some provisions of the Act are therefore in contravention of the very system of checks and balances that represent the judiciary of the country.
By virtue of unfulfilled promises by the builders in this city, the new Societies Act (2012) has been awaited a long time by the residents.
Whatever holes were left out by the older Apartment Act, were expected to be fulfilled by this Act; and people hoped that it would take into consideration the new problems with the builders. But far from building on the Apartment Act, this Act has been described as a ‘self-serving’ piece of legislation, designed to benefit the chosen few versus the public. The Old Societies Act was vulnerable, and could not defend those chosen few. There are many residents and RWAs who are ready to challenge this Act in a court of law, and ask for amendments to make it more resident-friendly. Until then, the real (estate) war between the people and builders (and the Administration) has just entered a new arena.
Expert-Speak
“The Societies Act (2012) is very complicated, to say the least,” says B.K Dhawan. Let alone the ordinary people and residents, even officials will be hard-pressed to understand the rules, he says. The resultant confusion and chaos will further muddle the already entangled builder-resident-DTCP mess.
First off, it is wrong to club rules for societies—like NGOs, trusts, and others—with entities like apartment complexes. The Apartment Act (1983) of Haryana is a piece of legislation specifically designed for the needs of apartment societies, and it cannot be absorbed into another Act which encompasses every other society in the State. The aims, target audiences, and intent of the Apartment Act and the Societies Act are vastly different.
“The Apartment Act is about giving civic powers to the residents of condominium societies. The Societies Act is not applicable for condominiums at all. It does not allow societies to earn and make profits, but condominium RWAs would be able to exist only when they earn from common areas and facilities,” he reiterates. There is a stand-alone Act for condominium societies, and there should be one for builder colonies, and another for plotted colonies. Making one Act for all will invite trouble.
Secondly, the Act contemplates centralisation of authority and power (in the Registrar, the District Registrar and the Registrar General), but it should instead be about decentralisation of power (as described in the Apartment Act). If the Societies Act is truly implemented, the Registrar’s office would be engulfed in notices, letters and complaints from the hundreds of societies in Gurgaon city itself, Dhawan says.
“Even definitions are not given in the Act. What does a collegium stand for, what does the Act mean by a governing body, or a general body? That has not been delineated clearly,” he says. There is nothing mentioned about the responsibilities of the Registrar, District Registrar and the Registrar General. “What is their role, and responsibilities, to the apartment societies?” Or for that matter, any housing society? Also, there is no way to appeal against an official’s decision. Going up the ladder would mean that a case has to be lodged against the Government of Haryana. In a way, they have superseded the Indian Corruption Act through the Societies Act. The immunity of almost every official is ensured.
“Condominium associations are formed under provisions set under the Apartment Act (1983). the society is registered along with the Deed of Declaration of the colony. The society survives and operates from the earnings and the profits from the areas of the colony, and they are a part of social welfare measures under the rules and principles of group housing,” he says. This is very different from what the Societies Act proposes. Now, the condominium RWAs will have two ‘masters’—the DTCP and the Registrar—“where as the only competent authority is the DTCP, which authorises the builder to construct, and holds them responsible,” he says. The entire Societies Act does have a single word to say about the RWA-builder relationship, which is fraught with tension and squabbles in Gurgaon.
The Act provides for large loopholes for corrupt officials, and has no safety features for the State’s RWAs. In such a scenario, with no system of checks and balances, RWAs (be they of condominiums, plotted areas or builder colonies) must unify to protest against the Societies Act (2012).
Points to Ponder
This Act covers every society, from book clubs to condominium societies.
All societies registered under the earlier Societies Act of 1860 will continue to be recognised, but those registered under the Apartment Act will have to be registered afresh.
Every existing society shall apply to the District Registrar, for obtaining a new registration number within one year.
Every society with more than 300 members has to make a Collegium(s), six months before its governing body elections – or reduce its members accordingly. Collegiums: Mini-general bodies? What’s the need?
The Registrar has the power to hear, and resolve any dispute, in respect of elections and continuance of office by any elected member or office bearer.
The Registrar has the power to call a meeting of the General Body or Collegium of a Society.
If the Registrar, on a report from the District Registrar, considers that an amendment of the (society’s) Memorandum or Bye-laws is necessary or desirable, he may, by an order in writing, direct the society to make such an amendment within stipulated time. Changes made will be ‘final and binding’. (No appeal?)
Chapter 7, Section 37: Point 4 – Any resolution passed by the governing body/ general body/ Collegium, which is not consistent with the Act, shall be invalid. Who decides?
The Registrar also has the power to take action against fraudulent actions committed by an RWA member, in matters like selling society property. Does this also apply to builder-appointed RWAs?
In case of supersession of the Governing Body, the decisions of the Registrar General are to be considered final and absolute. (No legal recourse?)
No suit, prosecution, or other legal proceedings shall lie against the Registrar General or any other official; of anything done or purporting to have done ‘in good faith’ under the Societies Act. Who decides what is ‘good faith’?
The government can, by special order, exempt any society from any provision of the Act (but not the whole Act); for the period of one year.
Government to push for e-governance of the societies.
The Act does not address the rights of RWAs vis-a-vis the builders.
In current court cases, which law will be adhered to – Apartment Act or the (old/new) Societies Act?
Chapter XIV: Special Provisions – Point 89 (1&2) disallows any Civil Court to entertain, settle, decide or deal with any matter which the Act has mandated under the jurisdiction of another authority of the Act (namely the Registrar or the District Registrar). And also, no order of the Government, Registrar, District Registrar or the Registrar General shall be called in question.
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