Housing societies haven to land sharks

While members are taken for a ride, the high and mighty get a share in the illegal realty pie

With land prices in major cities and towns shooting through the roof in the last few years, house building co-operative societies (HBCSs) have taken to all kinds of illegal activities to make hay while the sun shines.

The resignation of Justice Shivaraj Patil as Lokayukta a few months ago for allegedly getting a site illegally allotted from a HBCS in Bangalore, stands testimony to the way these societies blatantly violate the law. Like Justice Patil, a large number of judges, politicians holding public office and top bureaucrats too have benefited from the 'generosity' of the HBCSs.

Illegal allotment of sites to the high and mighty, despite they not being eligible for it, is actually only a tip of the iceberg when it comes to violation of the rule book by HBCSs. The societies twist and manipulate rules at their whims and fancies and hoodwink innocent members. Unfortunately, site aspirants are forced to depend on dubious HBCSs with the local development authorities failing in their duty to form layouts. That is the reason why there are 1,504 HBCSs in the State with nearly eight lakh members.

The Bangalore Development Authority (BDA), for instance, has formed an estimated Rs 1.39 lakh residential sites since its inception in 1976, while HBCSs have formed 2.75 lakh sites during the same period. Similarly, the Mysore Urban Development Authority has so far allotted 35,000 sites to the public, while the HBCSs have formed and allotted 1.15 lakh sites in the city of palaces.

The HBCSs take advantage of the eagerness of people to own sites and take them for a ride. Having paid a large sum of money, the members put up with murky deals and decisions of the societies, hoping to become owners of dream plots one day. But the State Co-operation department remains a silent spectator and refuses to take any action against erring societies on the pretext of giving them autonomy.

The HBCSs do not stick to the deadline they themselves initially set for completing a project (development of a residential layout or a complex). Delay in project implementation is the root cause for most of the problems. Usually, the societies promise to allot sites within a year at the time of enrolment of members.

In the absence of any time limit to complete the project, HBCSs normally take anywhere between eight and 10 years to complete the project and allot sites to members.

By delaying the project implementation, HBCSs wait for the land (the plot where they want to implement the project) prices to shoot up. The societies, however, do not pay interest on the money that the members would have deposited under instalment scheme. By the time the project is taken up, a large number of people withdraw from the society membership. Members of the managing committee, in most cases, illegally enrol new members by taking bribes.

Besides, the delay in project implementation leads to escalation of cost and the societies pass on the burden to the members.

Even before the developer (the entity which will form layout) initiates land development, societies make the members pay a huge sum of money towards escalation (escalation in most cases is equivalent to the total cost of plot the society would have quoted initially). This is the most common way for HBCSs to take the members for a ride.

The State Co-operation department has no control over the HBCSs in this regard. Societies are free to frame their own bylaws to run the administration.
Though it is mandatory on the part of societies to provide a copy of the bylaws to all members, not many follow this rule. Many societies do not even convene the mandatory general body meeting every year and keep the members informed about amendments to the bylaws.

The societies, as per the rule book, should allot sites based on the seniority list. But not many societies follow this rule. Sites are allotted at will: Sites along the main roads and those selling for higher price are usually allotted to influential people, close relatives and friends of managing committee members or those who pay bribe.
Many HBCSs allot sites to the high and mighty with an intention to cover up their misdeeds.

Section 10(a) of the model bylaws for HBCSs bars a person from owning more than one site in the limits of an urban development authority or an urban local body. The same rule applies to all urban development authorities.

The intention behind this rule is to ensure that all individuals own sites in urban areas. HBCSs, however, blatantly violate this rule.

Though it is mandatory for HBCSs to collect affidavits from members declaring that they do not own any other site, not many societies do so. Even if they collect, they do it only for the sake of fulfilling the formality.

Poor quality layouts
There is no mechanism to verify whether a person already owns a plot or not. For instance, a large number of legislators have obtained BDA sites under ‘G’ category by filing false affidavits.

Most HBCSs do not follow the layout plan approved by the local development authority while forming layouts.

According to the rules, layouts should be developed at 45 (civic amenity sites):55 (sites) ratio. In other words, a developer can form about 15 sites out of an acre of land going by the rules. But the societies form up to 25 sites in one acre of land, violating the setback rules. Result: The site owners have to make do with narrow roads and sidewalks and lack of parks and playgrounds in their locality.

Most HBCSs do not provide amenities like asphalted roads, sidewalks, underground drainage, power and water connections.

Owners of sites in such layouts are, therefore, forced to pay huge sums of money to various agencies of the government to obtain the services.

Reckless layout development is the reason why growth of Bangalore has been haphazard, leading to utter chaos.

As per the report of the Task Force for Protection of Government Land, about 3,000 acres of land meant for civic amenities have been encroached upon in Bangalore city. The main culprits are HBCSs.

Fact file
* No of HBCSs in the State - 1,504
* No of HBCSs functioning - 1,061
* Defunct - 198
* Under liquidation - 245
* Total no. of members in these HBCSs - 7,76,972

‘Non-Cooperation’ department
The Co-operation department has been reluctant to take action against erring HBCSs. Despite a large number of illegal site allotment cases coming to the fore, the department has not initiated action against many societies.

In 2011, the department had issued show cause notices to only about 80 HBCSs for violating rule book and appointed inquiry officers to probe the alleged irregularities with regard to 23 of them.

Administrators have been appointed for two HBCSs and closure notices have been issued to two other societies. Interestingly, no action has been initiated against Judicial Employees House Building Co-operative Society, Bangalore, which has allegedly allotted sites illegally to many retired judges.

‘We act only based on plaints’
Registrar of Co-operatives S G Hegde said the department will take action against societies only if it receives complaints.

Action will be initiated on specific complaints. Otherwise, the department will not interfere in the day-to-day functioning of HBCSs.

The government has given the societies autonomy to function by framing their own bylaws. The societies only have to follow the model bylaws framed by the department. If necessary, the department will issue circulars and orders pertaining to the administration of the societies.