⚖️ A significant court ruling has highlighted the importance of financial transparency and accountability in housing societies. The Co-operative Court directed RNA Regency Park Tower Co-operative Housing Society in Kandivali West, Mumbai, to refund ₹50,000 to a couple after the society failed to justify retaining their parking deposit. The order also includes 6% simple annual interest and legal costs.
🚗 How the Parking Deposit Dispute Began
In June 2017, Jignesh Khiraiya and Kusum K. Khiraiya paid ₹75,000 as a non-refundable stilt parking deposit while transferring their flat. However, when a dispute arose, the housing society returned only ₹25,000 by crediting the amount to their maintenance account and retained the remaining ₹50,000.
The couple challenged the society's decision to retain the balance. The dispute raised an important question: can a housing society keep a parking deposit simply because it has been labelled “non-refundable”?
📑 Housing Society Failed to Justify Retaining the Money
The society reportedly claimed that parking collections had been used towards major repairs costing approximately ₹9 lakh. However, it failed to provide documentary evidence to substantiate its claim.
The court found that the society had not established a valid legal basis for retaining the remaining deposit through its registered bye-laws, an independent agreement or evidence of services provided in return.
The case highlights why housing societies must maintain proper financial records and supporting documents for amounts collected from members. Financial decisions involving residents' money should be backed by appropriate legal authority and evidence.
⚖️ What the Court Ordered
The Co-operative Court directed the society to refund the outstanding ₹50,000 to the couple. It also ordered the payment of 6% simple annual interest, calculated from January 30, 2022, until repayment, along with the couple's legal costs.
The court referred to Section 72 of the Indian Contract Act, 1872, concerning the repayment of money paid by mistake or under coercion. The ruling reinforces the importance of establishing a valid legal basis before retaining money collected from housing society members.
🏘️ Can a Society Keep a Parking Deposit by Calling It Non-Refundable?
A “non-refundable” label does not automatically establish a society's legal right to retain a deposit in every circumstance. The applicable law, registered bye-laws, contractual terms and facts of the transaction must be considered.
Housing societies should ensure that parking-related collections are properly authorised, documented and accounted for. Simply relying on an internal decision or general body resolution may not be sufficient to justify retaining money when the legal basis for doing so is challenged.
📌 What Housing Society Members Should Do
Members who face similar disputes should preserve parking deposit receipts, flat transfer documents, agreements, maintenance statements and written communication with the society. These records can help establish the amount paid, any refund received and the reasons given for retaining the balance.
If a society refuses to refund a deposit, members can request a written explanation and seek appropriate legal advice regarding the available remedies. Each dispute will depend on its specific facts and applicable legal provisions.
✅ Key Takeaway
This ruling is a reminder that housing societies must handle members' money transparently and responsibly. Deposits should not be retained without a defensible legal basis, and financial claims should be supported by proper documentation. For residents, maintaining records and understanding their rights can be essential when challenging an unjustified deduction or withheld refund.
Disclaimer: This article is for general informational purposes and is based on the reported court ruling. The outcome of similar disputes may depend on the specific facts, agreements and applicable laws.
🏢 Mumbai Housing Society Ordered to Refund ₹50,000 Parking Deposit With 6% Interest