The Hindu : New Delhi News : Front warns those willing to buy Society flats

Online edition of India's National Newspaper
Monday, Jan 22, 2007
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New Delhi

New Delhi

Front warns those willing to buy Society flats

Staff Reporter

`Liability of Society must be checked before taking a decision'

NEW DELHI: Charging that there has been major embezzlement of funds in the Cooperative Group Housing Societies running into crores of rupees, Delhi Residents' Front has cautioned people desirous of becoming members of such Societies to check the liability of the Society towards lending agencies -- the details of which are available with the Delhi Cooperative Housing Finance Corporation -- before buying the 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, the Front president Sanjiv Kumar said these default amounts have over a period of time swelled to lakhs and even crores of rupees in different Societies.

With the total amount of embezzlement being close to Rs. 60 crore, he said there are now a number of Societies that are into 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 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 has not thought about all these issues and is still toying with the system of cooperatives.

For streamlining the process of election, accounting procedures, auditing, sharing of responsibilities and accountability of these CGHS, he demanded that the management committees should be subjected to regular monitoring and regulating checks so that a strict and more effective compliance of the provisions of DCS Act is executed.

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