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"Beware of cooperative housing societies"

Staff Reporter

NEW DELHI: Charging that there had been major embezzlement of funds running into crores of rupees in the Capital's cooperative group housing societies, the Delhi Residents' Front has cautioned people desirous of becoming members of such societies to check their liability towards lending agencies -- the details of which are available with the Delhi Cooperative Housing Finance Corporation -- before buying any property.

Stating that the instalments paid by the members -- both original allottees and general power of attorney (GPA) holders -- were in many cases not deposited by the society with the financial institutions and were either embezzled or diverted for meeting other expenditures, thereby resulting in default of the amount, Front president Sanjiv Kumar said these default amounts had over time swelled to lakhs and even crores of rupees in different societies.

With the quantum of embezzlement being close to Rs. 60 crores, he said, there were now a number of societies that were engaged in litigation with financial institutions. "In the event of a GPA becoming member in any of these societies, the liability of repayment of loan although cleared by the predecessor will again fall on the new member because of the provisions of the DCS Act and Rules. Thus becoming member in such a scenario is a dangerous proposition, as it would give rise to serious repercussions in the form of a huge financial liability.''

Mr. Kumar said it was unfortunate that the Delhi Government had not thought about all these issues and was still toying with the system of cooperatives. "Although it is willing to accommodate GPAs, it lacks courage to transform the system. In a way, it wants to revive the dead and defunct Societies. There is an urgent need for revamping and for having a transition towards a more transparent, democratic and accountable system of management of group housing complexes.''

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