Apartment Owners Denied Legal Rights: Federation Alleges Violation of Supreme Court Orders in Karnataka

Bengaluru:
The Federation of Karnataka Apartment Owners’ Co-operative Societies has strongly alleged that apartment dwellers in the state are being denied their fundamental right to form co-operative societies—despite clear directives from the Supreme Court of India.

At a press conference held in Bengaluru on Saturday, Federation office bearers, including President T.K. Parasuraman, Vice-President Shripadaraja Koodli, General Secretary Vidyadhar Durgaker, and Mr. Gangadhar, accused the state government and regulatory bodies of actively discouraging the formation of registered co-operative housing societies. They argue that such obstruction directly contravenes multiple Supreme Court rulings and violates the constitutional right under Article 19(1)(c).

“Apartment owners are suffering due to the failure of builders to obtain occupancy certificates. When they raise questions, they face harassment and even false police complaints,” said Parasuraman.

The Federation highlighted the confusion stemming from the simultaneous enforcement of two laws in 1972: the Karnataka Apartment Ownership Act (KAOA) and the Karnataka Ownership Flats Act (KOFA). While KAOA lacks any provision for forming or registering owner associations, KOFA and the Karnataka Co-operative Societies Act, 1959, offer a clear legal path for forming registered co-operative bodies.

Despite this, courts in Karnataka continue to insist on the formation of apartment associations under KAOA—entities that the Supreme Court, in the Sobha Hibiscus vs Sobha Developers case, held to be non-statutory and incapable of pursuing legal action in consumer forums.

“The associations formed under KAOA have no legal standing. They can’t open bank accounts, access BESCOM services, or sign agreements with maintenance providers. Yet, they are being forced upon apartment communities,” said Shripadaraja Koodli.

The Federation also criticized the builders’ misuse of the Deed of Declaration (DoD), which they often file after selling most of the units—sometimes without any legal ownership or valid power of attorney. These deeds, often unsigned by the majority of flat owners and lacking judicial attestation, are being used to illegally form and control owner associations.

“The builders are exploiting legal loopholes and avoiding proper handover procedures. They form puppet associations and exit projects, retaining ownership of the land to use it as collateral for future developments,” alleged Durgaker.

The problem, they said, has worsened since the implementation of the Real Estate (Regulation and Development) Act (RERA), 2016. Under Section 17 of the Act, developers are required to hand over common areas to a registered body of owners. Karnataka RERA, however, has been accused of directing apartment communities to form non-registered associations under KAOA, rather than co-operative societies as defined in RERA’s own rules.

As per K-RERA Rule 2(b), a “registered institution” refers specifically to a co-operative society under the Karnataka Co-operative Societies Act. “Associations under KAOA are not recognized under RERA. By forcing people to form them, Karnataka RERA is denying rightful ownership and governance to apartment owners,” the Federation said.

Citing landmark judgments such as Rusabh Shah vs Oversekar & Sons and Nahalchand Laloochand vs Panchali Co-operative Housing Society, the Federation urged the state government to immediately stop obstructing the registration of apartment co-operative societies.

They also alleged that a nexus between builders, banks, and certain officials is allowing this illegal control over land and common property to continue. “The system is being misused at the cost of honest apartment buyers,” the Federation representatives concluded, calling for urgent judicial and legislative intervention.