Non-Payment Of Maintenance Dues By Association Member Is Unjustified, Hinders Welfare Of Other Members: Karnataka High Court

The Karnataka High Court has upheld a trial court order decreeing a suit filed by an Apartment Owners Association, seeking to recover the outstanding maintenance dues from one of its defaulting members.

A single judge bench of Justice M G S Kamal allowed the appeal filed by M/s.Shangrila Flat Owners Association challenged the order of the first appellate court which had allowed the appeal filed by 70-year-old Capt Mohan Prabhu, and reversed the trial court order.

The Association had sought the relief of recovery of a sum of Rs.6,58,695 with interest at 12 percent per annum from the date of suit till realisation with cost.

The court said, “Mere refusal by the defendant to pay the amount, which is a collective and common liability of all the members, in the absence of any evidence of he paying the dues, would not only be unjustified but would also hinder the welfare of other members of the association, apart from being in breach of terms of deed of declaration.”

Background

The defendant had claimed that as per the Deed of Declaration, maintenance charges cannot be fixed by the Board of Managers. Further, it was alleged that the resolution for increased maintenance and levying of the late fee and other charges had not been lawfully made as there was no quorum as contemplated under the deed of Declaration and therefore, the said resolution was invalid.

It was said that the persons who were representing the plaintiff Association at the time when the alleged resolution for increase in maintenance and levying of the late fee was made were not the owners of apartments as contemplated under the deed of Declaration.

Thus it was stated that, as such, the resolutions were void ab initio and he would make the payment only if it is demanded by the person rightfully appointed by the association.

The association claimed that each of the apartment owners is under obligation to pay the maintenance charges as and when demanded by the association towards the maintenance and other funds of the association.

Further, it was stated that all the members of the association are entitled to have access to inspection of the accounts of the association, which are presented annually and also displayed on the notice board.

Findings:

Referring to the clauses of the deed of declaration and the written statement filed by the defendant said “Defendant specifically and categorically has admitted that he is under obligation in terms of the deed of declaration to pay the maintenance charges. He has also admitted that the association which is formed for the maintenance of the building is incurring monthly expenses towards maintenance and other charges.”

It added “Except making a bald allegation of the resolutions passed by the association not being valid, the defendant has not made out as to why the said resolutions are invalid. He has not produced any details as to whether he has made the payments.”

Then it held that the defendant had signed the deed of declaration which mandates and contractually compels all the members to make the payments towards the common expenses and there is no gain-saying by the defendant that he would not make the payment merely because the resolutions were allegedly invalid without proving the same.

Noting that the question of requiring the plaintiff to prove the basis of the claim is uncalled for, the court said “Though the first appellate Court has opined that the defendant has denied the quantum of the amount claimed, has lost sight of the fact that such denial is bald and general without any specific. Order VIII Rule 5 CPC contemplates specific denial of the allegations in the plaint.”

Stating that the Association has an auditor appointed and should there be any illegality or irregularity in maintaining the accounts, the defendant is entitled under law to bring it to the notice of the competent authority, the Court allowed the appeal.

It said “The approach and appreciation of the evidence by the first Appellate Court ought to have been taking a holistic view to the nature of dispute between the parties, their status and their inter-se contractual relationship. In the absence of this approach, the Judgment passed by the first Appellate Court is not sustainable.”

Appearance: Advocates Rego L.P.E, Arjun Rego for Appellant.

Capt Mohan Prabhu -party-in-person.

Citation No: 2024 LiveLaw (Kar) 408

Case Title: M/s.Shangrila Flat Owners Association AND Capt Mohan Prabhu

Case No: R.S.A.NO.722 OF 2023

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