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Co-operative Society cannot Charge Fee or Raise Donation to Approve Transfer of Property

Co-operative Housing Society West Bengal

According to the latest update in the FAQs by the Department of Cooperation, the cooperative housing society cannot charge any fee or donation for transfer of membership from the transferor/member.

This is the latest update from the previous position, where, the society could charge upto 0.5% of the sale value in terms order no. 2522 dated 23.6.2003 of the Cooperation Department.

However, according to the latest update, it is evident that the society cannot charge anything extra and if they do, then the member/transferor or transferee must immediately bring this to the notice of the Registrar.

Please check more details here: http://coopwb.org/faqs.php

If you need any specific documents, you may also call for information under RTI by contacting here: http://coopwb.in/rti.html

Case Law on Cooperative Housing Society Transfer Fees

In Dover Co-Operative Housing … vs State Of West Bengal And Ors., the Hon’ble Calcutta High Court held:

Disputes Can be Raised Before the Registrar or the State Government

“However, after considering the provisions contained in Sections 32, 49 and 92 to 94 of the Act, we find that both the State Government and the Registrar of Co-operative Societies have been vested with the overall power of supervision over the affairs and working of a Co-operative Society under the Act and if it appears to the State Government or the Registrar that any of the Co-operative Societies registered under the Act had contravened any of the mandatory statutory provisions, it can suo motu pass necessary direction for rectification of such illegal act notwithstanding the fact that the aggrieved party has not referred the dispute to arbitration in terms of Section 95 of the Act.”

No Fees, Not Even 0.5% could be Asked for by Cooperative Housing Society before 2003

“According to Rule 142(2) of the West Bengal Co-operative Societies Rules, a Co-operative Housing Society may raise such fee or donation as may be specified by the State Government from time to time by notification for according consent for transfer by a member of his land, house or apartment to another person having eligibility to become a member of the society. There is no dispute that until the year 2003, no such notification was issued and in the notification of the year of 2003, the societies were for the first time permitted to accept by way of such transfer-fees an amount equivalent to 0.5% of total consideration money. Therefore, prior to issue of the notification of the year 2003, a Co-operative Society was not authorized to accept any amount of money by way of transfer-fees.”

“… If we construe the provisions contained in Rule 142(2) in the proper perspective, we find that up to the year 2003, nothing was specified by way of notification authorizing a Co-operative Society to raise by way of fee or donation any amount for according consent for transfer and therefore, up to the year 2003, a Co-operative Society was authorized to accept “nil” amount of money for giving consent and from the year 2003, for the first time, the State Government has authorized the societies to accept something as transfer-fees or donation for the above purpose by limiting it to 0.5% of the consideration money … In our view, Rule 142(2) prohibits the society from accepting any amount as transfer-fees unless sanctioned by the notification and that too, to the extent indicated in the notification.”

Current Situation on Transfer Fees

It is abundantly clear that housing societies in West Bengal can seek transfer fees based on any notifications issued by the State Government.

You can check on the latest orders and notifications from the Department of Cooperation Government of West Bengal here: http://coopwb.in/orders.html

To learn more about cooperative housing societies in Kolkata and West Bengal, and the rules revolving around them: check earlier posts here and here.

4 Comments

  1. can bank loan be availed for purchase of shares in housing co-operative society and what will be the basis for loan whether it is purchase value at the time of allotment of shares of the present market value of the property.

  2. Myself and my father-in-law have two separate flats (registered) in the same cooperative society. My father-in-law made my wife as the only nominee for his flat in the society. My father-in-law died very recently. Now my wife wants to apply for the membership of the society and inherit the flat as nominee. In that case myself and my wife will own two flats in the same society. Does it violate the clause that members of the same family can not own flats in the same (or in the same area) cooperative society? But she is getting it by inheritance by virtue of nomination. Please comment and advice. How to write her affidavit (regarding the clause of same family members) while applying for her membership in the society?

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