Society dues in following circumstances cannot be recovered
By Ramesh S. Prabhu
Chartered Accountant
Non-Members-Pending Formalities
In case of the flat owners type of Society whether formed with the Co-operation of the Builder or Non Co-operation of the builder, we always find some members do not become the members of the Society. If the flat owners does not become the member, the case u/s. 101 cannot be filed.
LEGAL HEIR / NOMINEE NOT ADMITTED AS MEMBER
When a member expires keeping a huge of amount of Society dues and the legal heirs / nominees also do not pay the dues nor they become complete the necessary formalities to become the member, in such cases also recovery suit u/s 101 cannot be filed.
FUNDS MISAPPROPRIATED BY THE MEMBERS/OFFICES BEARERS
In many cases the office bearers of the Society commit misappropriation or fraud of the Society funds. Even after proving such fraud /misappropriation the recovery cannot be done u/s. 1010 of the M.C.S. Act, 1960. A criminal case will have to be filed separately to recover such misappropriated funds of the Society.
4 DUE FROM BUILDER IN RSPECT OF UNSOLD FLAT/SHOP WHEN NOT BECOME THE MEMBER OF THE SOCIETY
Many times it so happens that Builder also does not become the member in respect of the unsold flats/shops. It is more seen in case in case of formation of societies under Builders non co-operation category. In such cases also, if builder does not pay the maintenance of the Society, the recovery suit cannot be filed u/s. 1010 of the M.C.S. Act, 1960.
PENALTY/CHARGES NOT PROVIDED UNDER THE ACT, RULES AND BYE-LAWS OF THE SOCIETY
When any recovery suit is to be filed under Section 101 of the M.C.S. Act, 1960, the Society should be aware of the type of dues which can be recovered from the members. If any penalty or charges which are not provided in the Act, Rules or the Bye-law of the Society, the same cannot be recovered u/s 101 of the M.C.S. Act, 1960. Therefore, we have mentioned separately the charges which can be levied and the basis of levy of charges is also explained.
Writing off or outstanding found irrecoverable
Subject to the model Bye-law no. 150, the Society may write off any loan and interest thereon, Society’s charges due from the members, the expenses incurred on recovery thereof and the accumulated losses,
which are certified as irrecoverable by the Statutory Auditor.
The amounts mentioned in model Bye-laws No. 149 shall not be written of unless:
the meetings of the General Body of the society has given due sanction for writing off the amounts.
The approval of the financing agency to the writing off of the amounts, if the Society, is indebted to it, is obtained.
The approval of the registering Authority is obtained.
Provided that if the Society is affiliated to the District Central Co-op. Bank or any other financing agency is not necessary.
Provided further that if the Society is classified as A or B at the last Audit no such permission of Bank or the financing agency or the Registering Authority is necessary, if there is sufficient balance in the bad debt fund, specially created for the purpose to cover the amount proposed to be written off.
Question and Answer
Defaulter
Q. When is the member termed as a defaulter ?
A. If on the due date of bill, the member does not make the payment, than he can be categorised as a defaulter. Societies in such circumstances can also charge interest. However it is important that there should be a demand upon the member.
Election by Defaulter
Q. Can a defaulter contest the election ? Can a defaulter propose or second candidate for the election ?
A. A defaulter cannot contest the election. However, a defaulter can propose or second candidate for the election.
Prior claim of society
Q. Does the society have prior claim on the shares of a member if the member has become insolvent or is unable to pay his debts to the financiers/business associates ?
A. As per Section 47 of the Maharashtra Co-operative Societies Act, 1960, it is clearly specified that the society has prior claim on the amount recoverable from a member subject to prior claim of Government in respect of land revenue, or any money recoverable as land revenue as per the provisions of Section 60 and 61 of Code of Civil Procedure Code 1908. The language used in the section also includes the word notwithstanding anything in any other law for the time being in force. This implies that amongst all the claims except for Government claims the society would be getting the first charge on the shares of the defaulter, therefore in my humble opinion, the claim of the society will have to be discharged first before amounts are payable to the financiers / business associates.
Rebate to members
Q. Can the society give rebate to members for prompt payment of dues ?
A. Normally Societies charge interest from defaulting members. If rebate is being given for prompt payment then the defaulter is penalised twice for the same act (i.e. he looses the rebate facility and simultaneously has to pay interest on the defaulted amount). As per the principles of equity and natural justice a person should not be penalised twice for a particular act. We have not come across any case law on the above said subject. It may be mentioned that there are number of societies which are offering rebate for prompt payment as nothing is mentioned in the Bye-laws pertaining to granting rebate. However, we are of the opinion that Society must not grant rebate to members. Clarification from the office of the registrar with regards to granting of rebate will be of immense help to the Societies.
Recovery fees
Q. What is the amount of Enquiry Fee and Court Fee that has to be paid by the Society when the Society proposes to recover the dues from defaulting member under Section 101 of the MCS Act ?
A. If the defaulter does not respond to the request made by the Society then the Society obviously does not have any other alternative but to recover the dues from the defaulting member. The Enquiry Fees and the Court Fee Stamps have to be paid on the amount of claim as made out against the defaulting member. Increase the amount to be recovered from the defaulter is below Rs. 1,000/- then the Enquiry Fee that has to be paid by the Society is 5.5% of the claim and Court Fee Stamp have to be affixed of Rs. 15/-. Incase the amount to be recovered from the defaulter is between Rs. 1,01/- and Rs. 2,000/- then the Enquiry Fee that has to be paid by the Society is 4.5% of the Claim and Court Fee Stamp have to be affixed of Rs. 20/-. Incase the amount to be recovered from the defaulter is between Rs. 2,001/- and Rs. 5000/- then the Enquiry fee that has to be paid by the Society is 3.5% of the Claim and Court Fee Stamp have to be affixed of Rs. 20/-. Incase the amount to be recovered from the defaulter is Rs. 5,000/- and above then the Enquiry Fee that has to be paid by the Society is 3% of the Claim and Court Fee Stamp have to be affixed of Rs. 25/-. The maximum Enquiry Fee is Rs. 1,000/-. The Enquiry Fee is to be paid to the Reserve Bank of India by Government Challan Account 0425 Co-operation, 800 other receipts XVII Notice and Recovery Fees.
Recovery of Dues with Recovery procedure
Q. Some members of our society do not pay their dues inspire of repeated requests. When the office bearers go to recover the dues from other members raise the plea that even if we are late by a few days to pay the dues you charge us interest. Please inform us in detail about the various steps to be taken to recover the dues including the amounts to be paid to the Government Authorities ? We have been given to understand that now it is not compulsory for housing societies to go to the Co-operative Court to recover the dues and the Asst.Registrar / Deputy Registrar can help us out in the above matter ?
A. IT would be advisable if the members of the Committee meet the defaulting members in person and try to discuss out the issue with the defaulters. The defaulters should be firmly told that the Committee has to keep the same policy for all the members and on account of them being in default other members of the society also complain to the office bearers particularly when members have to pay the interest. In case the defaulters do not wish to pay the dues then the office bearers should issue notice for recovery of dues. Inspite of the same if the defaulters do not pay the dues that a suit can be field before the Asst. Registrar / Deputy registrar u/s. 101 for recovery of dues. With the amendment of Section 101 the dues payable be members of a Co-operative Society can be recovered faster. Even the office bearers can do recovery under Section 101 themselves. It is not compulsory to file a suit in a Co-operative Court for Recovery of Dues.
The procedure for recovery of dues is as under :-
Issue a notice for payment of dues to the defaulter.
Pass the resolution to recover the dues in the Managing Committee Meeting.
Issue a final notice to the defaulter.
Apply to the Asstt. Registrar / Deputy Registrar for the recovery of dues.
Pay the prescribed fee.
The fee has to be paid through a challan payable at the Reserve Bank of India.
The rate of fee payable is as under :
Amount (Rs.) Scale of fee court fee
1,000/- 5.5% Rs. 15/-
1,001/- to 2,000/- 4.5% Rs. 20/-
2,001/- to 5,000/- 3.5% Rs. 20/-
5,001/- & Above 3% Rs. 25/-
Maximum Fee Rs. 1,000/-
The above said fee has to be credited in Reserve Bank of India by Government Challan under the head of account.
“0425 Co-operation
800 Other Receipts
XVIII Notice & Recovery Fees”
Disconnection of Essential Services
Q. Can the office-bearers of the society disconnect essential services like electricity, water supply, etc. of defaulters, who refuse to pay the securities dues inspite of repeated requests ?
A. Law cannot be taken in one’s own hand. Essential services like electricity, water supply, etc. are necessary for the occupants. IT is our sincere advice that office-bearers, and / or manager should not disconnect the essential supplies irrespective of the the dispute with the defaulter. If the aggrieve party flies a criminal complaint then the person found guilty for disconnecting the essential service/s can be punished with imprisonment which can extent upto a period of three months and/or fine. If the member refuses to pay the dues then you can recover the dues by filing a suit against the member. The procedure for recovery of dues u/s. 101 is very simple and the office bearers can themselves recover the dues. We have observed that societies can get the recovery certificate without even appointing a lawyer.
how one can find out is that perticular housing socity is registared with registar ( this is in Mumbai limits )
sir i want to know that can we give water connection to shop owners.
sir,
if any society have made a loan case and they donot have any details of trasections which they are showing in account statement and also the over due of loan is passed over 5 years and society had never taken any kind of legal action. suppose the load case is made in sep2002 and they have applied for RRC u/s 101 of MCSA in sep2009 is there any limitation act to apply for RRC u/s101..??? and also is it possible to grant RRC without doing the proper investigation of trasections.?? please do reply..thank you..
Sir,
I have purchased a flat directly from the builder and is the first owner of the said premisses. Now the Association is demanding maintainance charges from me which is due from much before i ahve taken the possesion, kindly advice if the builder is liable to pay this . Now the society has put a notice that they will recover this from me by applying 101C. Please respond as to waht course of action i should take.
You should reply to the society. The society cannot demand such charges but from the day of your occupancy. Sec 101 will not stand in first hearing.
Respected sir, can a coop bank attach the salary u/s47 of a govt emp, if he has been granted a housing loan, and whereby a immovable property is also mortgaged to the coop bank, i.e a valid charge is already created in the favour of coop bank, if yes, then in that case can sec49 of the similar act come in to handy.
Sir my case actual is that i have mortgaged a property to a bank , and in against they have granted me a loan, but now due to my inability to repay, i m asking coop bank to attach the immovable property, but they are against of it, i dont know y, and on the contrary they have been behind attaching my salary.
they got the order of recovery u/s101, but i filed a revision against the order of “Special Recovery Officer” of the coop bank, but that too was dissmissed on the ground that atleast 50% of the dues has to be paid before approaching revision and also with a direction from Div Joint Registrar that go and approach 107(19)(a), i.e carry an objection with the execution court i.e coop bank itself, then try here.
now i have filed a objection to the execution order by SRO,…………….. sir pls guide me further as i have been cheatd by the particular builder, who sold me a immovable property, and in against of that he got me a loan in my name from the said coop bank. expectting a earliest response. (sir, charge me ur fees even for the guidance which u will be providing, but help me out, pls)
i am a associate member, but i receive all bills as an occupant and tenant, i have deafulted payments on maintenance and repair funds due to personalproblems with secretary and chairman, can i be liable for recovery under section 101, as mentioned earlier 101 cannot be filed against non members.
A CHS is blatantly and continuously breaching bye laws for the last 3 1/2 years and overcharging Service Charges and non-0ccupation charges to a group of members. Now, one of the agrieved wants to take the CHS to Consumer Court. What are the implications of Law of limitation in such a case.Such a case, will it be admissible in Court?
In case of nomination in CHS, the first nominee refuses the nomination of second nominee. Donot allow for the rights of second nominee, please advise the rights of the second nominee
dear sir I would like to know if the flat is in my name and i would like to sell the flat can my wife or the society stop me from doing so.IF yes what should be done and If no what action can be taken against my wife or the society.
How are com men charges charged by the society.when the flats are are 2bhk,3bhk,4bhk,can they charge equally as per number of flats or on sqft basis
Sir can we give the two water conaction in one flat ple adv
The society has wrongly charged me penalty which I have not paid to society But I am paying maintenance charges of the society very regularly except this penalty amount. I havew 2 queries (1_
& I have not defaulted a single paisa from maintenance charges. except the wrongly levied penalty charges (i. e. amount under dispute) by the society whisc, In such case can soaciety file a suit U/s 101 of M. C. S.Acts 1960.
Dr. M. D. Patil
The society has wrongly imposed some penalty (Fine) on me. I am paying society’s maintenance charges very regularly and never ever defaulted a single paisa from maintenance charges. I have not paid Penalty amount as it is disputed amount and is not an amount which can be called as maintenance charge amount.Now I have 3 queries (1) Is penalty amount included in maintenance charges ? (2) Can society charge me interst on this penalty amount ? (3) Can society file a case U/s 101 for such penalty amount? Dr. M. D. Patil
Is the Managing empowered to waive off the outstanding dues of defaulters??
What are the implications if the Managing committee/ Office bearers do not initiate section 101 against defaulting members??
What are the options open to a member who loans an amount to the Society. The AGM clearly instructs to pay back then loan yet the MC refuses to pay back? Is section 101 of MCS Act 1960 equally applicable to members as well as the society? The MC members have signed indemnity bond.
Can management committee pass a resolution to clamp vehicle of a member if parked wrong to recover fine ( per decision of the AGM ) from the member or would this be construed as taking law into one’s own hands ?
our soc.reg.i/11/2008 builder has dispute with me so inot paid builder maintance but now soc. demand in the bill and charge interest on this amount so gide me how can i remove this arrers
Society has passed a resolution in AGM to restrict paying guest business in the society. Minutes have been published giving a proper time frame to vacate all the PG system running in our society
Abaout the resolution the soceity has passed the papers to the registrar. How shall we expedite and make our society a better place to live for our entire society members
here the author has mentioned about disconnection of the essentials supplies but what falls under the essentials supplies? Can u detail it? To recover the dues even legaly by the registar how much time is taken?
Why the advisei given to the queries not visible to all or the queries r not answered at all. Pl HELP.
managing committee has passed a resolution to charge members a penalty of rs.5000/- for misbehaving with a managing committee is the resolution valid
Dear sir,
If the all the society member ready to take the action against the maintenance charge defaulter who deliberately refuse to give the maintenance charge of the society. Can the society disconnect the water connection of the defaulter with the permission of all society members
I have purchased one flat in an Under Construction Building as Resale
with NOC of Builder.
Now the Building has get complited & Builder has form the society &
handover the Building to the society.
1. After purchasing the flat I have submitted Registration copy to
builder ( But Acknowledgment not Taken)
2. As builder has form the society he has still mention the founder
purchaser as member of the society instead of me & also issue Share
certificate in favour of him (Founder Purchaser)
How can I become a member of that society & get share certificate on my name?
Please advice for the same
Can you please give a format/fmodel petition for ecovery of rent arrears asper byelaws 101 before the Dy.registrar,Thane .Im a secretary of a co-op society.We approached an advocate,but we were not able to afford her fee.Saw your site posting ,it is very helpfull and informative,we have send notices through an advocate alrady.It will be helpful if we can et format under 101 of the MCHS bye law.
Thanks
our society in gujrat a member of our society is an advocate and he is not paying maintance ,he asking that in his flat the problem for water follin from out side . The society is chak the matter and found that the water folling from upstree ,plese inform us waht we can do?
I want to sell the flat which is in registered society. Do I have to pay any fees to get NOC from the society. Pl. reply.
Can society terrace be used for personnel use like for cooking purpose duing marriage ceremony
after the issuance of the award by the Judge Co-op court Mumbai what is the time period for execution of the order of recovery of movable and immovable property.
hi, in our CHS one of the member not paying maintaince charges since last 2yrs the amount is upto
1.5lakh . . The defence he is doing so long tat he doubt fraud in a/c’s of funds misuse. . And it might b true coz no one has the detail of tat time but, 4m last 6mnths and above new member been elected n they hav kept a/c wel n even audited. . So to recover d dues can society go for sec.101 ? N wil his defence wil b worth. . ? Thanks n regards anilkumar.
dear sir,
i have a milk dairy,so my work start at 4.00am in morning,so i want that my worker sleep in my shop,but my CHS not permisson to me ,my shop in thane[maharastra],pls tell me dear sir what is the law of worker sleep in my shop.thnxxx
can the parking space be denied to a defaulter . does parking comes under the purview of essential services ? can the penalties be charged under maintenance charges along with interest and interest on interest ?HOw and Under which section of the act / laws and bye laws can the rebate be obtain for the prompt payment of out standings / society maintenance charges ? can the application for associate member be disqualified by MC without siting any specific reason for denial of membership ,despite all paper work being in accordance to the byelaw ? thanks
Dear,
my soc. will issue a maint. bill in between 8 to 12th of every month & they mentioned the due date is 15th of current month & when i pay the maint. bill after due date they charge me Int. for delayed payment. i want to know the exact due date for the payment. in my opinion i have make the payment on or before end of the month. pls suggest
FUNDS MISAPPROPRIATED BY THE secretory of Society & not calling AGM since 2009. How can we remove her from post of secretory while chairman / Treasurers all want to remove her due to her crupt activity. Kindly reply urgent bye laws as per Thane , Maharastra CHS acts. Regards, Krishna,
Everest Heights, Evershine City, Vasai ( E), Thane 401208
Our Housing Society Office Bearers, Have been Harassing us and Demanding Money from us for no reason, Since 2003.They do not have any Records or Documents of the Amount Money, They keep demanding from us, But very smartly add Interest to that amount Every Year. Only Because we have asked them for an explanation of the amount, which they do not seem to have. They Threaten to Seize our room and Cut our Water Supply, if we dont agree to their Demands.They even sent a letter to the NMMC Ward Officer Water Dept, Nerul , Navi Mumbai. to disconnect our Water supply.. They even send Notices Demanding Money Directly on our Name.Though they have not made us Members till date in the society. Even the Monthly Service Charges we pay every month, even those Receipts are given on the Previous Owners Name. In the Notice sent, their Advocate has demanded 1,000/- Rs One thousand only ,extra for the notice sent , however they demand 16,000/- Rs Sixteen thousand as legal fees.In their other Notice sent by another Advocate to us demanding 1,500/- Rs One thousand five hundred only, extra for the notice sent, however they demand 25,000/- Rs Twenty-five thousand and more as legal fees and litigation etc..Reason best known to them..Why?? Mr S M Shrivastav – [Former Secretary], Mr Anant Rajput – [Former Secretary]
Mr Ashish Sheety – [Secretary], Mr Vijay Kadam – [Treasurer]
Mr D D Kolte – [Chairman / President] Since 1996, Till Date.
None of them have been able to provide any explanation regarding the amount they keep demanding from us.Reason best known to them Why?? We were told to go to court by Mr D D Kolte – [Chairman / President] regarding this issue. We Were so fed up and tired by the harassment and illegal demands by the societies office bearers. So as a consumer we filed a complaint In the Consumer Disputes Redressal Forum. CBD Navi Mumbai. My complaint no 45/2010 in Feb 2010. However when ever we were called to Court several times, The society office bearers Never Came. As they think they are the Landlords of the Society. However surprisingly an order was passed in Dec 2010, After nearly a year. By Mr R D Mhetras [President], and Mrs Jyoti A Mandhle [Member], That this complaint cannot be put up in the Consumer Disputes Redressal Forum. CBD Navi Mumbai and Dismissed the Case.. Unfortunately Housing societies do not come under the RTI Act 2005 So We approached the Joint Registrar of CoOperative Housing Societies. CBD Navi Mumbai. Though we have been writing to the Joint Registrar of CoOperative Housing Societies. CBD Navi Mumbai. Since 2006 to get this issue cleared however we have not got any favorable response on this issue. So we wrote an RTI application , Not One But we had to write Three RTI applications, Since May 2011. But no information was given to us.Again.. So we gave another RTI application Our Second Appeal To The Commissioner , State Information Commission, CBD Navi Mumbai in Sept 2011. However its been 4 months and we have not received any information from the Commissioner, State Information Commission, CBD Navi Mumbai. nor from the Joint Registrar of CoOperative Housing Societies. CBD Navi Mumbai. In fact we also sent a reminder to The Commissioner, State Information Commission, CBD Navi Mumbai. Regarding our RTI application.. We received a letter from the Joint Registrar of CoOperative Housing Societies. CBD Navi Mumbai, calling us no the 8th of Dec 2011. As they had received a letter from The Commissioner, State Information Commission, CBD Navi Mumbai. Appeal No KR2075/2011, Dated 14th Oct 2011. Requesting them to give us the Information we had asked for, However when we were called in the office the Joint Registrar Mr Vikas Rasal ,told us that No information can be provided since the RTI Applications were not in proper format the way he wants it to be when we asked what is the proper format He said I am not here to give Advise and refused to give any thing in writing..And WASTED another day of ours.. Is Our System So Bad…That a common man has to wait so long for Justice and still does not know weather he will get Justice or not…. AS DELAY IN JUSTICE IS INJUSTICE.. The Office Bearers have still not given us any Explanation of the Money they keep Demanding. Though we have requested them many Times.since 2003(nearly 9 years). The Joint Registrar of Co operative housing societies have also ignored all are request which we have been writing since 2006 (nearly 6 years). The Consumer Disputes Redressal Forum. CBD Navi Mumbai. Took nearly a year only to decide, That this complaint cannot be put up in the Consumer Disputes Redressal Forum. CBD Navi Mumbai And now The RTI Act seems to waste our time as well. Leave aside Justice we just need Information .. As It Seems RTI Act Is Just A Waste Of Time, Which We Pay For.. However My Family and i have decided not to give up and not to Given to their illegal demands and to fight against such Dishonest people in our Society..
By,
Daniel Murzello
Room No 3, Prarthana Chs,
Sector 18/A, Plot no 185,
Nerul, Navi Mumbai
400706.
Contact no 9702 842 999
ours is a single building society in Mira road Thane, 3 members of the society have not been paying maintenance fees since 2 years the reason being as follows
1) Society is not duly elected & constituted
2) No M20 bond has been signed by the managing committee
3) open terrace used by the chairman for business purpose and the same is not paid to the society, he claims that the terrace belongs to him.
4)they have not given us the minutes of any General body meeting where they have asked for increase in fees for sinking funds
5)they have added service charge of 200 in the bill saying its for salaries to the watchman, however they give bearer cheque to the security agency & not a account payee.
We had sent them a lawyers( along with a chq of 500/- ) notice requesting them for all the documents, but their lawyers has replied that pay the dues and we will give the documents, and their lawyer also requested us to pay the legal fees of 2500 which the MC has added to the monthly bill.
Their lawyer has also said that the MC will cut the electricity & water supply to us. is this possible from their end. we are ready to pay our bill provided we get all these documents from them as we know they do not maintain proper records, in the meeting they say something and do something else.
Please advise how do we go about it
Lynden Luis
Sir my aunt is very old and there r some dues pending in the society…she wanted to give nomination for her flat, but society refused to accept it coz of dues pending, plz help..do they have the power to do soo…thou we have given them offer for payment of pricipal amount and 30% of interest in instalments
Can society recover from the Occupant (first purchaser, flat purchased from the builder) the Unpaid Monthly Maintainance (differential) disputed and unpaid by the builder? Please advise.