• NOCs for bank loans and mortgages

Can the secretary issue NOCs to banks for loans and mortgages without the permission of the Committee or General Body ? Can these be issued without due diligence by him? The secretary issued three NOCs 1) to a bank for loan by the purchaser 2) to another bank who had earlier kept the flat as collateral by the seller 3) NOC for the sale of flat to seller . The seller happened to be the chairman that time. All NOCs issued on the same date. The AGM was held a week later from the date of NOCs and even in the AGM secretary did not mention having issued NOCs. Incidentally, the sale agreement mentions common areas like open parkings and service room on ground floor ( not shown in the approved plan or FSI ). Thanks
Asked 3 years ago in Property Law
Religion: Hindu

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8 Answers

Any decision having long term financial implication cannot be approved by Secretary or MC, it require approval of AGM. This is clear of fraud which  need to be brought to the notice  of Registrar seeking appointment of auditor. There can be other irregularities by  Secretary in collusion with then Chairman which  has not come to light. Common areas are property of all, it can never be sold. Make a online complaint to the Registrar. This is case for appointment of administrator/Auditor by Registrar.  

Ravi Shinde
Advocate, Hyderabad
4432 Answers
42 Consultations

Resolution has to be passed in MC to issue NOC for sale of flat ,to bank for giving loan to purchaser etc 

 

2) not necessary to mention it in AGM 

Ajay Sethi
Advocate, Mumbai
97524 Answers
7890 Consultations

1. The Secretary can issue NOCs in case the Society has no objection in selling any flat of the member of the Society i.e. if no arrears towards maintenance is pending, the property not claimed by any third party legally for which legal proceeding is pending before the Court etc.

 

2. The Secretary of the Society has no role to play in executing the sale agreement. 

Krishna Kishore Ganguly
Advocate, Kolkata
27512 Answers
726 Consultations

Dear Sir,

1) Any issue with respect common areas cannot be taken without holding an AGM.

2) You should file complaint to the registrar against the action of secretary and mc.

Thank you

Anik Miu
Advocate, Bangalore
10398 Answers
121 Consultations

If the bylaws permit the office bearer or the secretary or the president to furnish NOC to the apartment owner to the bank or any financial institution for sanction of home loan  or for mortgage purposes, there may not be any legal infirmity in it. 

The model bye-laws framed by the state government under the Maharashtra Cooperative Societies Act hold that a person does not require a No Objection certificate (NOC) from the society at the time of transfer of a flat. Bye-law No 38 prescribes a list of documents required for selling a flat, but nowhere is it mentioned that the society's NOC is mandatory. If at all a transferor or transferee of a flat want an NOC from the society for their personal reasons, the society will have to issue it within a month of receiving the application. It's important to note that NOC issued by the society / RWA does not absolve the responsibility of the purchaser to pay all the past dues (before the sale) to the society/ RWA.

 

T Kalaiselvan
Advocate, Vellore
87726 Answers
2358 Consultations

-   The secretary can issue NOCs, without the permission of the Committee or General Body. 

But it does not give him sweeping powers or misuse of powers. 

 

-  If you believe Secretary and Chairman colluded together to do wrong doing then AGM can pass order to remove them or complaints can be done to registrar of society. 

 

-  Open parking can not be sold. But sale agreement can mention allocated open parking. 

But if it is not in approved plan or allocated to particular flat then it can not be part of sale agreement. 

 

-  Service room can never be part of sale agreement. 

Ankur Goel
Advocate, Bangalore
454 Answers

- For issuing NOC management committee approval is necessary..

- Further, the chairman and the secretary of the society can issue NOCs after recovering dues from any member

- Further , the Management committee having power to cancel the NOC if secretary issued to a defaulted member or against the rule of society. 

- Further, the members on the Managing Committee can approach the Registrar of Societies to debar the Secretary from holding its position & to cancel the NOC already issued by him, 

- However, secretary cannot enter into sale agreement .

Mohammed Shahzad
Advocate, Delhi
14773 Answers
224 Consultations

1. It depends on what the bye-laws say.

2. If the bye-laws say that AGM is quintessential to authorise the issuance of NOCs then secretary cannot issue the NOC without the sanction of AGM.

Ashish Davessar
Advocate, Jaipur
30813 Answers
974 Consultations

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