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Cultural or Festival Funds in Housing Society

Cultural Activities are most important part of our social life. As we stay in a diverse culture it has been a practice in most of the Housing Societies to celebrate functions like Ganesh Chaturthi, Durga Pooja, Independence Day, Republic Day, Annual Pooja and family dinner etc. In order to meet the expenses most of Housing Societies are collecting either as Cultural Fund and or Festival fund as a part of regular monthly maintenance. There is neither an express prohibition nor permission to collect compulsory contributions for cultural fund which are voluntary in nature.

Therefore, many societies are confused as to whether collecting such fund is permissible as per society bye-law or not?

The answer to the above confusion is that Housing Society Cannot charge or demand money for cultural / festival expenses residents. The Housing Society cannot implement such resolution in AGM/SGM and put contributing any money on all members, who are not interested to participate, even though such resolution is passed by the AGM.

Let us understand why it’s not legal to collect?

Chapter IX i.e. LEVY OF CHARGES OF THE SOCIETY (bye-law 65, 66 & 67) explains various “Housing Society Charges”, which managing committee can collect from members. These various charges are classified in two components i.e. “Housing Society Outgoing” and “Establishment of Fund”. However, following sub clause / provisions under the society byelaws are ambiguous and many societies feels that they have the liberty to decide the same;   

  1. Bye-Law No 65 (xvii): Any other charges
  2. Bye-Law No 66 (m): Any other charges approved by the general body at its meeting.
  3. Bye-Law No 67 (xvi) Any other charges: As may be decided by the general body of the society at its meeting

While some of the society/ managing committee also argues that the ancillary object of housing societies at clause (d) in Bye-Law No 5 says that;

“To undertake and provide for, on its own account or jointly with a co-operative institution, social, cultural or recreational activities;” Sub clause 5 (C) reads as “To raise funds for achieving the objects of the society;”

Both the above provision leads to an interpretation that society can raise the fund for meeting its objective i.e. to undertake and provide for, on its own account or jointly with a co-operative institution, social, cultural or recreational activities.

If at all society need to create the fund for the activities permitted under Object 5(d) then it needs to be drawn from the Welfare Fund to be creates in accordance with the Clause (iii) of Bye-law no 148 (b) which reads as: To allocate to a common welfare fund, such part of the profit, as the annual meeting of the general body may determine, to be utilized in furtherance of the objects specified in the bye-law No. 5(d).

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