Forming Apartment Association under Apartment Ownership Act West Bengal

An apartment or a flat is a self contained housing unit that forms part of a building. Under West Bengal Apartment Ownership Act, 1972, (the Act) Section 3(a), an apartment means a property that has direct exit to a road or to a common area leading to such road and the apartment along with common areas and facilities forms an independent residential unit and it also includes a flat.

The object of the Act is to provide for ownership of an individual apartment and to make such apartment heritable and transferable property. The concept of apartment was born due to increasing population and growing need for housing in India and West Bengal. The object of the Act is not just to make such apartment units heritable and transferable but also to set out the common areas and facilities and the percentage share of each apartment owner in the apartment building. Most States in India have separate apartment ownership Acts that regulate such units in different States.

The main difference in Apartment Ownership Acts in different States of India is the purpose for which such apartments are utilized. While in States such as Maharashtra and Haryana, apartments can be utilized for residential as well as commercial purposes, apartments in West Bengal are Kerala are predominantly utilized for only residential purpose. Under West Bengal Apartment Ownership Act, 1972, Section 2, the Act applies to every building which is used, or is to be used, mainly for residential purposes.

Under West Bengal Apartment Ownership Act, 1972, Section 3(b), an association of apartment owners means the association competent to contract its own name and formed in accordance with provisions made in the bye-laws of the association.  This association can be formed in accordance with the Act and the West Bengal Apartment Ownership Rules, 1974.

The association works for the welfare of the residents in an apartment, conducts events and protects the rights of the apartment owners by maintaining varied duties.

The association in West Bengal can be formed by all the owners individually or they can give power of attorney to one person who can submit the building or property under the provisions of the Act. The benefit of registering the property under the Act is that it provides legal help to the residents in case of disputes. Further, it helps in organizing the maintenance of the society and provides clear bye-laws for the residents to abide and follow. If any association is formed which engages in maintaining the property or building without registering under the Act then it is cannot be termed as illegal per se but it is rather an interim/ad-hoc/unregistered association which needs to be registered under the Act.

Steps for Formation of Registered Apartment Owner’s Association under the Act:

Filing of Form A

1. Firstly, the sole owner or all owners shall submit to the Competent Authority under the Act, a declaration in the given Form A in duplicate in non-judicial stamp paper of Rs. 10/- which needs to be duly signed and notarized. Enclosed within the Form A must be authenticated copies of the Building Plan, Site Plan and all relevant Title deeds. However, in case of prospective buyer, he may also enclose photocopy of the Agreement for Sale Deed duly attested by Notary instead of the sale deed.
2. The filled in Form A with all annexure must be submitted in duplicate to the Competent Authority within 15 days from the date of their execution. Along with such Form A, the receipt of RBI fee paid and TR Form 7 has to be submitted to the Competent Authority.
3. Form A can be submitted to the Competent Authority under the West Bengal apartment Ownership Act, 1972 at Law and Promoter Cell, 3^rd Floor, ‘C’ Wing, New Secretariat Building, 1, Kiran Shankar Roy Road, Kolkata 700 001. Telephone No. (033) 22420801
4. A forwarding letter needs to be sent to the Competent Authority along with Form A and all other necessary documents stating the fact that he is submitting the property under the West Bengal apartment Ownership Act, 1972 by way of filing Form A which may be accepted.
5. After examination/verification of Form A and approval by Competent Authority, a copy of approved Form A with “Accepted” Stamp, date, signature and seal will be returned to the applicant.
6. After receipt of Accepted Form A, the same needs to be registered within 15 days of return. The duly “Accepted” Form A must be registered under the Registration Act, 1908 with the Registrar / Sub-Registrar having jurisdiction over the property.
7. After registration, the same needs to be notarized and communicated to the Competent Authority. A photocopy of the registered Form A duly attested by a Notary is to be filed with the Competent Authority along with Form 1 for getting Registration No. of the Association of the Apartment Owners.

Fees for Registration of Association

The fee for registering association is commensurate with the total value of the apartments of the building (i.e. if there are 8 flats of value Rs. 10,00,000/- each the total value of the Apartments will be Rs. 80,00,000/0_ is to be deposited with the Reserve Bank of India in T.R. Form No. 7 under the appropriate head of account.  The T.R.Form No. 7 and computerised receipt of the Reserve Bank of India (both original) and 1 set photocopy of both are to be enclosed.

(i) Amount of Fees :

(a) Upto Rs. 25 lakhs – Rs. 1000/-

(b) Above Rs. 25 lakhs upto Rs. 50 lakhs – Rs. 2000/-

(c)  Above Rs. 50 lakhs upto Rs. 1 crore   – Rs. 4000/-

(d) Above 1 crore upto Rs. 5 crores – Rs. 5000/-

(e) Above Rs. 5 crores – Rs. 10,000/-

(ii) Appropriate Head of Account :

“0216 – Housing – 02 – Urban Housing – 800 – Othen

Receipts – 008 – Receipt under the West Bengal Apartment

Ownership Act, 1972 – 16 – Other Fees”

(iii) Account Code : 0216 – 02 – 80000816.

(iv) Name of the Treasury : Kolkata P.A.O. – II

A specimen of duly filled in T. R. Form No. 7 is given below:

West Bengal Form No. 2380H

1. R. FORM NO. 7

[See sub-rule (2)(b) of T.R. 3.06]

Challan for Deposit of money in the account of

GOVERNMENT OF WEST BENGAL

1. Name of the Bank of Branch  :  R.B.I., Kolkata
2. (a) Name of the Treasury       :  Kol., P.A.O. – II

(b)   Treasury Code :

C

A

C

1. Account Code :

0

2

1

6

0

2

8

0

0

0

0

8

1

6

(14-Digit must be filled up properly)

1. Detail Head of Account : “0216 – Housing – 02 – Urban Housing – 800 – Other Receipts – 800 – Receipt under the West Bengal Apartment Ownership Act, 1972 – 16 – Other Fees. Code : 0216 – 02 – 80000816”.
2. (a) Amount : Rs. 250/-

(b)  In words : Rupees Two hundred fifty only.

6. By whom tendered : Name & Address : XYZ,   ABC Road, Kolkata – 1.
7. Name / Designation & Address of the Departmental Officer on whose behalf/favour money is paid : Competent Authority, Under the West Bengal apartment Ownership Act, 1972, Govt. of West Bengal, Deptt. of Housing, Law Cell, New Secretariat Building, 1 Kiran Shankar Road, Kolkata 700001.

8. (a) Particulars and Authority of Deposit : Fees for Form – ‘C’ Instrument executed Apartment Owner(s) Under Sub-clause (i) of Clause (b) of Sub-Section (3) of Section 4 of the West  Bengal Apartment Ownership Act, 1972.

*(b) T. V. No. & Date of A. C. Bill :

9. Accounts Officer by whom adjustable :         Accountant General (A & E),

Verified                                             West Bengal

Signature of Department/Treasury Officer

Depositor’s Signature                                   Treasury Receipted Challan No.

Date :                                                         Bank Scroll Serial No.

Received payment                                        Signature with seal of the Bank

Date :

_________________

*In respect of Challan relating to refund of unspent amount of A.C.Bill.

(6) In case the Declarant is the constituted attorney of the apartment owners he must enclose a photocopy of the Deed of Power of Attorney duly attested by a Notary

(b) Disposal of Form A by the Competent Authority:

If the Form A filed by the Declarant(s) is found in order the Competent Authority will accept the Form A and return one set of Form A duly endorsed as “Accepted” to the applicant(s).

Filling of Form C

1. Another Form C, needs to be filled in duplicate in non judicial stamp paper of Rs. 10/- and duly notarized and submitted to the Competent Authority along with a copy of the Deed of Transfer and Sanctioned Plan after duly notarizing the same.
2. Forwarding letter to the Competent Authority under the West Bengal apartment Ownership Act, 1972 requesting him to accept Form C.
3. Declaration under Form C in Non-Judicial Stamp Paper of Rs. 10(ten) duly affirmed before a Notary (2 Sets) – One set will be retained by the Competent Authority and other set duly “Accepted” will be returned to the Declarant(s).
4. Photocopy of the Title Deed/Agreement for Sale Deed duly attested by Notary.
5. Photocopy of the Sanctioned Plan duly attested by Notary.
6. Fee in T.R. Form No. 7 under the head of account and other details as Sl. No. (5) of item No. (c) of Form A.
7. The requisite fees need to be deposited to the Reserve Bank of India, Kolkata in TR Form No. 7 and the receipt has to be submitted to the Competent Authority.Amount of Fees :

   (i) Upto Rs. 3 lakhs – Rs. 250/-

   (ii) Above Rs. 3 lakhs but upto Rs. 7.5 lakhs – Rs. 400/-

   (iii) Above Rs. 7.5 lakhs – Rs. 500/-

8. Original copy of T.R. Form No. 7 and Reseve Bank of India Receipt thereof along with 1 set photocopy of the above.
9. Photocopy of Registered Form A duly attested by Notary.
10. In case the Declarant is the constituted attorney of the apartment owner he must enclose a copy of the Deed of Power of Attorney duly attested by Notary.
11. If the Competent Authority finds the documents in order then he shall return Form C to the owner or owners duly accepted.
12. When Form C is accepted one copy will be returned to the Declarant.
13. The Declarant must get the Form C registered under the Registration Act, 1908 within 15 days of receipt.
14. After completion of all these procedures the association and its allottees can apply for registration of the association. Only those members will form part of the association who have completed the above steps and submitted Form C.
15. After getting accepted Form C from Competent Authority, the Apartment Owners or Allottees will hold a General Meeting and take steps to submit Form 1 of the West Bengal Apartment Ownership Bye-laws, 1974.
16. Within 45 days from the date of submission of the property to the provisions of West Bengal Apartment Ownership Act 1972 (date of approval of Form A by the Competent Authority) or within such further period as the Competent Authority may allow, on application to it, the apartment owners shall in a General Meeting form an Association under some specific name and style and the Apartment Owner who presides over such Meeting shall immediately communicate the formation of such Association along with the names of the members in Form 1 to the Competent Authority. However, it must be understood that Apartment Owner implies any person who own one or more than one apartment within the same building.
17. Thereafter the Competent Authority shall register the Association under a Serial Number and communicate the same to the Apartment Owners.
18. Within 15 days of formation of an Association, the Apartment Owner presiding over the initial General Meeting for formation of the Association shall serve notice upon each member of such Association fixing therein the date (not before 15 days from the date of issue of such notice) on which and the time and place at which a General Meeting shall be held for election of the Board of Managers (BoM) of such Association by secret ballot. The number of managers in the BoM must be a minimum of 3 and maximum of 24. Votes need to be cast in person.
19. After BoMs are elected, the Board shall within 10 days of the date of election of its Managers, hold its first meeting and elect its President who shall forthwith forward the names of President and BoMs in Form No. 3 of the West Bengal Apartment Ownership Bye Laws, 1974 to the Competent Authority who shall register such names.
20. Thereafter the Association will gain legal identity and can function effectively.

Filling of Form 1

Form 1 under bye-law 3(2) is to be filed in plain paper along with a Xerox copy of the certified copy of the Registered Declaration under Form A shall be enclosed.

The names of all apartment owners shall be stated in Form 1 as per regulation 3 of the West Bengal Apartment Ownership Regulations, 1974.

A specimen copy of Form – 1 given below :-

FORM NO> 1

[See Bye-Law 3(2)]

To

The Competent Authority,

Under the West Bengal Apartment Ownership Act, 1972,

Law Cell, Deptt. of Housing,

New Secretariat Buildings, 1^st Floor,

1, Kiran Shankar Rop Ropad,

Kolkata 700 001.

Sir,

I hereby communicate that a General Meeting duly held on ____ (date) presided over by the undersigned, the Association of apartment Owners under the name and style of “ABC Flat OWNERS’ ASSOCIATION” for our property at Premises No. 111, ABC Road, Kolkata 700 000, Police Station ________ already submitted according to Provisions of the West Bengal Apartment Ownership Act, 1972, has been formed under bye-laws framed under the said Act with the following as members thereof:

Sl. No.         Name of the members         Member of the Apartment

In the building by him.

1.

2.

3.

4.

5.

It is further stated that the Declaration in Form No. a approved by you was registered in the Office of the Assistant Registrars of Assurance – 1, Kolkata, vide being No.01659/07.  A Xerox copy of the certified copy of the Declaration obtained form the Registration Office, Kolkata is attached herewith for your ready reference.

Now, I would request you to register our Association and send the Registration number of our society to us.

Dated  : _____

Place   : Kolkata                                           Sd/-

Signature of the Apartment Owner

Presiding the General Meeting held

On _________________________.

However, as of date, according to the West Bengal Apartment Ownership Act Office at Law and Promoter Cell, 3^rd Floor, ‘C’ Wing, New Secretariat Building, 1, Kiran Shankar Roy Road, Kolkata 700 001. Telephone No. (033) 22420801, apartment ownership association formation is currently unavailable due to the recent decision of the Calcutta High Court in Dr. Debdas Banerjee & Ors. v The State of West Bengal & Ors. [W.P. No. 3724(W) of 2013].

In this matter, the Hon’ble Calcutta High Court has stated that Rule 3 of the WB Apartment Ownership Rules, 1974 as ultra vires Section 2 of the WB Apartment Ownership Act, 1972. The main contention in this matter and the confusion still prevalent is whether to form an association under WB Apartment Ownership Act, 1972, the declaration has to be signed by all apartment owners or whether the majority can sign the declaration. The unworkable situation has been created because under Section 2 of the 1972 Act and Form A, all the apartment owners need to sign the declaration while under Rule 3 of the 1974 Rules, signature of only majority members will be required.

However, Rules cannot take precedence over the Act and as such Rule 3 of 1974 Rules was declared ultra vires Section 2 of the 1972 Act. The matter is pending further adjudication or necessary amendments to be incorporated into the Act by the legislature.

In any case, if all apartment owners are willing to abide by the 1972 Act and sign the declaration then I don’t think there should be any issues in registering such Association even under the current legal scenario. I have heard that several Form A declarations have been kept pending as of date but I think if all apartment owners are willing to sign then the question of majority does not arise and the Association should be allowed to be formed under current law.