Flat Owners Association Member's Refusal To Pay Maintenance Amount Is Unjustified; Hinders Welfare Of Other Association Members: Karnataka HC

The Karnataka High Court held that, refusal to pay the amount of maintenance being collective and common liability of members of the Flat Owners Association is unjustified and hinders the welfare of other members of the association.

The Court held thus in a regular second appeal filed by M/s Shangrila Flat Owners Association (plaintiff) against the judgment of the First Appellate Court by which it allowed the appeal of the defendant member and dismissed the suit.

A Single Bench of Justice M.G.S. Kamal observed, “Should there be any illegality or irregularity in maintaining the accounts the defendant is entitled under law to bring to the notice of the competent authority under the Act, 1972. Instead 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 as noted above.”

Advocate Arjun Rego appeared for the appellant while Capt. Mohan Prabhu was the party-in-person (respondent).

Facts of the Case -

A suit was filed by the plaintiff Association for the relief of recovery of Rs. 6,58,695/- with interest at 12% per annum from the date of suit till realization with cost. The defendant was the owner of an apartment and also a member of the plaintiff association. He along with 20 other persons had entered into an agreement for construction of apartment building with one person. He was the office bearer of the association and had participated in the meetings of the association in fixing the maintenance charges payable per month towards sinking fund and other ancillary expenses from time to time. The deed of declaration which was executed, provided for fixing of maintenance charges payable every month by all apartment owners. It was also agreed that if there is any delay in making the payment, the member was liable to pay the late fee as fixed by the board of Managers.

The defendant was the chronic defaulter in the matter of payment of maintenance charges and despite several reminders and requests, he did not pay the amount due to the association. Whenever demand was raised, the defendant was in the habit of writing defamatory letters making allegations against the association members. Instead of paying the amount as demanded, he had filed a suit for damages on the ground of defamation against the then office bearers. However, the said suit was dismissed and the association filed a suit for recovery of amount. As the suit was decreed in favour of the association, the defendant filed an appeal before the First Appellate Court and the same was allowed. Being aggrieved, the association approached the High Court.

The High Court in view of the above facts noted, “Necessary to note at this juncture, the amount being claimed by the plaintiff association is towards the common maintenance and upkeep of the apartment building which even according to the defendant he is liable to pay along with other members. This is not a transaction of borrowing and lending or any other commercial transaction. This is towards meeting the recurring expenses of maintenance of apartment building which is admittedly payable by all the members.”

The Court added that the liability to pay the maintenance amount is in terms of the deed of declaration mutually agreed by all the members for a common good and welfare of all the members.

“… 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”, it said.

Furthermore, the Court emphasised that, when the First Appellate Court confirms the rejection of the counterclaim made by the defendant with regard to the locus standi of a person, who has filed the suit, which is the only ground urged by the defendant before the Trial Court as well as before the High Court refusing to make the payment, the consequence ought to have been directing the defendant to make the payment.

Accordingly, the High Court allowed the appeal and set aside the impugned judgment.

Cause Title- M/s. Shangrila Flat Owners Association v. Capt. Mohan Prabhu

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