IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 22ND DAY OF FEBRUARY 2019 BEFORE THE HON’BLE MR.JUSTICE S.N.SATYANARAYANA WRIT PETITION NO.56868/2013(CS) BETWEEN VRINDAVAN FLAT OWNERS’ CO-OPETATIVE SOCIETY LTD., ARYA SAMAJ ROAD MANGALORE, D.K.DISTRICT -575 002 REPRESENTED BY ITS SECRETARY VISHWANATH SHETTY ... PETITIONER (BY SRI PRASANNA V R, ADVOCATE ) AND 1. THE STATE OF KARNATAKA REPRESENTED BY ITS SECRETARY DEPARTMENT OF CO-OPERATION M S BUILDING BANGALORE - 560 001 2. THE DIRECTOR OF CO-OPERATIVE AUDIT DEPARTMENT OF CO-OPERATION STATE OF KARNATAKA NO.17, ‘JAYA NIVAS’, SHANKAR MUTT ROAD BASAVANAGUDI BANGALORE - 560 004 3. THE ASST. DIRECTOR OF CO-OPERATIVE AUDIT DEPARTMENT OF CO-OPERATION MANGALORE SUB DIVISION MANGALORE D.K. DISTRICT -575 001 4. THE SOUTH CANARA DISTRICT CENTRAL CO-OPERATIVE BANK LTD., (SCDCC BANK LTD., ) REPRESENTED BY ITS MANAGING DIRECTOR KODIALBAIL, MANGALORE DK DISTRICT - 575 003. ... RESPONDENTS (BY SRI A.K.VASANTH, GOVERNMENT ADVOCATE FOR R1 TO R3, R4 IS SERVED BUT UNREPRESENTED) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DATED 12.11.2013 PASSED BY 3RD RESPONDENT VIDE ANNEXURE-A AND DIRECT THE RESPONDENTS NO.1 TO 3 TO CONSIDER THE REPRESENTATION OF THE PETITIONER DATED 13.12.2012 AND 19.11.2013 VIDE ANNEXURES-B & C RESPECTIVELY AND WAIVE THE AUDIT FEE BY DECLARING THAT THE GOVERNMENT ORDER DATED 14.3.2006 ISSUED BY THE 1ST RESPONDENT VIDE ANNEXURE-D IS NOT APPLICABLE TO THE PETITIONER SOCIETY AND ETC.
THIS WRIT PETITION COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER The petitioner herein is a Flat Owners’ Cooperative Society Limited, which owns a residential apartment complex in TS.No.243/2B, situated at Khadri B village of Mangalore Town. Admittedly, the said complex is constructed on a land measuring 647.49 square metres which consists of about 16 Flats thereby indicating that there are 16 members to the said society.
2. Basically the transaction of the petitioner - society is limited to collecting maintenance charges from the owners’/occupants of 16 Flats and to utilize the same for the purpose of defraying water charges, electricity charges maintenance of building, payment of salary to the security, which is provided to the apartment complex. In fact, the petitioner - society does not have any other revenue other than the contributions received from its members as and by way of maintenance charges.
3. When matter stood thus, 3rd respondent has issued a notice to the petitioner – society demanding payment of a sum of Rs.95,732/- towards audit fee for auditing the accounts of the society for the period from 1992-93 to 2010-2011 vide Annexure-H to the writ petition bearing No.Sa.Ni.Ma/Li.Pa.Shu/20/2012-13. It is stated that prior to said notice dated 27.11.2012 several correspondences have taken place between the 3rd respondent and petitioner – society with reference to aforesaid payment, where explanation is given by the petitioner – society contending that the activities or transactions of the society is limited only to the extent of collecting maintenance charges from its members, thereafter, defraying the expenses, as stated supra, however, the said fact is not considered while issuing notice dated 27.11.2012, vide Annexure-H and while passing the order dated 12.11.2013 vide Annexure-A, which is sought to be challenged in this proceedings.
4. When this matter had come up for consideration before this Court at an initial stage, pursuant to the directions issued in this proceedings, a sum of Rs.45,000/- covering a period of 9 years from 1992-93 to 2000-2001 is already deposited by the petitioner - society with the 3rd respondent and the amount which is remaining to be paid is Rs.50,000/- and odd for the period from 2001-2002 and onwards.
5. In this proceedings, the impugned order at Annexure-A is sought to be challenged by the petitioner – society on the ground that when the revenue of the society itself is limited to the collection of maintenance charges and that too the transactions of the society are restricted for not more than 10 to 15 in a year, collection of audit fee at the rate of Rs.5000/- per year is exaggerated and it does not stand to reason. Therefore, the same should be waived. However, the learned Additional Government Advocate would submit that there is no such provision for waiter of audit fees to the petitioner – society or other similarly placed persons. In this background, it is also stated that if at all any decision has to be taken, it should be taken at the level of Government. In that view of the matter, the 3rd respondent was ordered to be present before the Court.
6. In response to the direction of this Court Sri.Maheshwarappa who is holding the office of 3rd respondent is present before the Court. He would fairly submit that the transaction of the petitioner - society is very much restricted as stated by it. According to him, considering the peculiar circumstances as that of the petitioner – society and other similarly placed societies, the Government has already issued a notification on 21.9.2013 wherein it is stated that for the transactions of the nature of the society like the petitioner, the audit charges would be around Rs.500/- per year. In order words, he would state that the demand which was made earlier is scaled down by almost 1/10th of the demand.
7. In this background, this Court considering the peculiar facts and circumstances of the case on hand and also considering the members of the society being middle class people with the society being floated by them only for the sake of maintenance of the apartment complex, where each one of them have purchased a Flat, the audit fee that is re-fixed by the Government vide notification dated 21.9.2013 should be extended for the remaining period of demand which is under challenge in this proceedings also i.e., from 2001-2002 to this day. If that is taken in to consideration, the petitioner - society will have to pay for the said period at the rate of Rs.500/- per year. In fact, as an exceptional circumstance, using the discretion of this Court, the aforesaid amount is ordered to be calculated in the aforesaid manner for the period from 2001-02 to this day and collect the same from the petitioner – society as if the demand is raised by the 3rd respondent based on the order in this petition. It is made clear that as and when said amount is paid, the same should be accepted by the 3rd respondent in full and final settlement of its demand towards arrears of audit fee payable by the petitioner – society.
8. With aforesaid observations, this writ petition is disposed of and the order dated 12.11.2013 at Annexure-A stands modified.
Sd/- JUDGE nd/-