In a significant decision, the Karnataka High Court has reiterated that for projects comprising only residential apartments, associations of flat owners must be registered under the Karnataka Apartment Ownership Act, 1972 (KAO Act), and not the Karnataka Co-operative Societies Act, 1959 (KCS Act).
Justice K.S. Hemalekha passed this ruling while allowing a writ petition filed by flat owners of the residential complex “Ramky One North” located at Avalahalli Village, Yelahanka Taluk. The petition challenged the registration of a Co-operative Society for the project under the KCS Act.
“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,” the court said.
The court set aside the Deputy Registrar’s order dated October 19, 2023, which had approved the registration of the society under the KCS Act. It also directed the builder, Respondent No.5, to comply with all legal requirements and to form an Apartment Owners Association under the KAO Act. The court further instructed the members of the existing society (Respondent No.4) to cooperate in establishing the legally mandated association for the project, which is now referred to as “Ramky North.”
The petitioners, represented by Advocate Beena P.K., argued that “Ramky One North” is exclusively a residential apartment complex and, under the law, any association of flat owners must be registered under the KAO Act. They also relied on a 2024 Division Bench ruling 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), which had clearly held that registration under the KAO Act is mandatory for residential apartment associations.
In contrast, Respondent No.4-Society, represented by Advocate Dr. Sujjatha V. Durgekar, challenged the maintainability of the petition. They claimed not all petitioners were apartment owners and referred to earlier proceedings where the Co-operative Society’s registration was allegedly upheld.
However, the High Court dismissed these objections. Justice Hemalekha observed that all the apartment buyers had executed a Deed of Declaration-cum-Undertaking with the builder (Respondent No.5) before their sale deeds, agreeing to sign the Deed of Declaration for forming an Apartment Owners Association.
“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,” the court noted.
The court clarified that the registration of a Co-operative Society under the KCS Act for managing a residential apartment complex is impermissible under the law.
The petitioners who 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, the court added.
On the point raised by Respondent No.4 that earlier court proceedings had upheld the society's functioning, the court clarified that the prior writ petition (WP No.25997/2023) merely dealt with the calendar of events for conducting elections and did not challenge the formation of the Co-operative Society itself.
“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,” the judgment stated.
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Accordingly, the High Court allowed the writ petition, quashed the registration of the society under the KCS Act, and directed that a proper Apartment Owners Association be formed under the KAO Act for legal compliance.
Appearance:
Advocate Beena P.K. represented the petitioners.
AGA B.S. Guruswamy appeared for Respondents 1 to 3.
Advocate Dr. Sujjatha V. Durgekar appeared for Respondent 4.
Senior Advocate Pramod Nair appeared for Respondent 5, along with Advocate Mudit Mundkar.
Case Title: Rekha Kannan & Others vs. State of Karnataka & Others
Case Number: Writ Petition No.27821 of 2024
