Managing committees and residents often debate whether a housing society can mandatorily collect a “cultural fund” or “festival fund.” In this blog, we’ll explain what the law and bye-laws say, what recent court rulings suggest, and how societies should approach such contributions - all from the Indian cooperative housing society perspective.

Introduction

Many societies want to foster community spirit with festivals and cultural events. But is it legal to force every flat owner to chip in? This article clarifies when cultural or festival fund levies are valid, when they may be challenged, and best practices for societies.

What Are “Cultural / Festival Funds” in a Housing Society?

• Contributions collected to organise social, religious, or cultural events (festivals, celebrations, community dinners, etc.)
• Sometimes added to monthly maintenance or separately billed.
• Often contentious when enforced on all members, including those who don’t wish to participate.

Legal & Bye-Law Framework: What Governs These Charges?

Bye-Laws & Model Provisions

• Many cooperative housing society bye-laws include a clause making social, cultural, or recreational activities one of the society’s objectives (e.g. Bye-Law 5(d))
• Bye-Laws also typically allow “any other charges” approved by a general body (e.g. Bye-Laws 65, 66, 67).
• Some argue that collections for cultural events must come from profits or a common welfare fund (e.g. Bye-Law 148)

Court & Authority Decisions

• Bombay High Court (2023): Upheld that a housing society may levy mandatory cultural activity charges if approved by a general body.
• The court observed that organising social, cultural, and recreational activities is part of a society’s objectives.
• Other sources maintain that compulsory contributions not sanctioned by the general body may be unlawful.

When Is a Cultural / Festival Fund Legally Valid?

For a society to legally collect mandatory contributions, the following conditions should ideally be met:

1. Valid Resolution in General Body Meeting (GBM / AGM / SGM)
2. Conforming to the Bye-Laws and Act
3. Purpose Clarity and Financial Transparency
4. Refund or Waiver Options / Voluntariness for Non-Members

Common Misconceptions & Risks

Misconception: Society can force everyone to pay for festivals
Reality: Only if valid resolution passed and levy consistent with bye-laws

Misconception: Absent members can claim exemption
Reality: Absence does not legally exempt one from binding decisions

Misconception: Only profits can fund cultural activities
Reality: Bombay HC ruled societies may use non-profit funds if approved

Misconception: Society can shame non-payers publicly
Reality: Such practice can be considered coercion or undue pressure

Best Practices for Societies & Committees

• Prior Discussion & Consensus
• Draft Clear Resolutions
• Separate Budget & Reporting
• Allow Voluntary Contributions
• Include Sunset Clause
• Communicate Benefits
• Use Sponsorships / Donations

How Disputes Can Be Handled

1. Raise in the Next GBM
2. Appeal to Registrar / Cooperative Department
3. File Petition in Cooperative Court
4. Police Complaint in Extreme Cases

Conclusion

While housing societies can levy cultural or festival funds-provided the levy is approved by the general body and aligns with bye-laws and legal constraints-such charges are often delicate matters. Lack of transparency or perceived unfairness can spark disputes

Tip for committees: Put proper processes in place-clear resolutions, open accounting, opt-outs or voluntary options, community buy-in.

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