The Karnataka High Court has emphasised that residential flats must be registered under the Karnataka Apartment Ownership Act, 1972, and cannot form associations under the Karnataka Co-operative Societies Act, 1959, for property management and maintenance.
Justice K S Hemalekha delivered this ruling whilst approving a petition by Saraswathi Prakash and other apartment owners from Parkside Retirement Homes Brigade Orchards Apartment Complex.
The court stated, “It can be safely held that the lis stands covered, that the petitioners and the members of the association are entitled to be registered under the KAO Act and that there cannot be any association registered under the Act, 1959, to form a society to manage and maintain the property comprising of only residential flats. It is also relevant to state here that the KOFA Act, 1972 and the Rules 1975, are applicable if the property has both commercial and residential units.”
The petitioners challenged the Registrar of Cooperative Societies’ order dated February 23, 2023, which permitted respondent No 3’s Chief promoter to collect share capital from residents interested in joining the society.
The petitioners argued that an existing association under the KAO Act, supported by a declaration deed, precluded forming a society under the 1959 Act.
They referenced the case of Shantharam Prabhu and others Vs K Dayanand Rai and others, stated, “Once an apartment is subjected to the KAO Act, Karnataka Ownership Flats (Regulation of the Promotion of Construction, Sale, Management and Transfer) Act, 1972 would cease to apply and it is only the KAO Act, by duly executing and registering a declaration, deed of apartment and bylaws which would be applicable.”
The respondents contested that Section 2 of the KAO Act requirements were unfulfilled, as only 90 of 150 unit owners signed the declaration deed.
