Karnataka High Court Sets Aside Registration Of Residential Complex Under Co-op Societies Act, Directs Registration Under Apartment Ownership Act

The Karnataka High Court has reiterated that the association of the owners of flats situated in an Apartment, consisting of residential units only, is to be registered under the Karnataka Apartment Ownership Act (KAO) and not under the provisions of the Karnataka Cooperative Societies Act (KCS).A single judge, Justice K S Hemalekha, observed thus while allowing a petition filed by owners of the apartment units in “Ramky One North” a residential complex situated at Avalahalli Village, Yelahanka Taluk. The court set aside the order passed by the Deputy Registrar registering the Society under the KCS Act dated 19.10.2023 and directed Respondent No.5-Builder to comply with all the requirements under the law and form an Association of Apartment Owners under the KAO Act and the members of respondent No.4 Society to cooperate in forming an Association for the project known as “Ramky North”.The petitioners contended that in the case of residential Apartments, such an Association must be formed and registered as envisaged under the KAO Act. Reliance was placed on the decision of the Division Bench of this Court in the case of Proposed Starnest Apartment Owners Co-operative Society Ltd. Vs. State of Karnataka and others, W.A. NO.564/2024 D.D. 18.06.2024, wherein it was held that in residential Apartment projects, Formation of an Association under the KAO Act is mandatory. The society opposed the plea on the grounds of maintainability of the petition, contending that not all the petitioners are owners of apartments. Reference was also made to earlier proceedings claiming that the Registration and functioning of the Society has been upheld by this Court. Findings: The bench, on going through the records, noted that prior to the execution of the sale deeds, all the apartment owners had executed a Deed of Declaration-cum undertaking in favour of the Builder-respondent No.5, wherein they undertook to sign the Deed of Declaration for the Formation of Apartment Owners Association. The undisputed fact is that the project “Ramky One North” consists of residential units only. Referring to the provisions of the KAO Act, the court said “The KAO Act makes it clear that if the property is used or proposed to be used for residential purposes, the KAO Act is applicable. As could be seen from the records that the sale deeds indicate that the entire project is for residential use and no part of the project is used or intended to be used towards commercial use. The Deed of Declaration is executed by the Apartment owners for Formation of the Apartment owners Association.” Following which it held “The law is well settled and no more a res integra that the Association of the owners of flats situated in an Apartment, consisting of residential units only, there is a specific enactment under the KAO Act, and the Registration of the Association has to be made under the KAO Act and not under the provisions of the KCS Act.” It added “The petitioners are members of respondent No.4-Society are entitled to have Registration of an Apartment Owners Association under the KAO Act and there cannot be any Association registered under the KCS Act.” Rejecting the society's contention in regards to upholding of society in earlier proceedings the court said “It is pertinent to note that the challenge in WP No.25997/2023 was only to the calendar of events for conducting the elections and in the said petition, there was no challenge to the validity of the Formation of a Co operative Society-respondent No.4 for the purpose to manage and maintain the Apartment Complex. This being so, the contention raised by respondent No.4 that the present writ petition needs to be dismissed on the ground that the earlier findings in writ petition confirmed in writ appeal are binding on the petitioners is unsustainable.” Accordingly it allowed the petition. Appearance: Advocate Beena P K for Petitioners.AGA B.S Guruswamy for R-1 TO R-3. Advocate Dr Sujjatha V Durgekar for R-4. Senior Advocate Pramod Nair for Advocate Mudit Mundkar for R5. Citation No: 2025 LiveLaw (Kar) 177Case Title: Rekha Kannan & Others AND State of Karnataka & Others Case No: WRIT PETITION NO.27821 OF 2024Click Here To Read/Download Order

Karnataka High Court Sets Aside Registration Of Residential Complex Under Co-op Societies Act, Directs Registration Under Apartment Ownership Act

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