Society’s dues not recoverable after three years
By Vinod Sampat, Advocate
If a member is in default and if recovery proceedings are initiated against him, then the provisions of the law of limitation will be applicable. The implication of the judgement, delivered by Bombay High Court on 7th October 2003 in the case of “Versova Gardens CHS Ltd. V/s. Divn. Jt. Reg. (C.S) Mumbai, is that if the Society has not recovered the dues from the defaulting member for three years, then it will be difficult for the society to recover under section 101 of the Maharashtra Co-operative Societies Act, 1960.
Section 101 of the Maharashtra Co-operative Societies Act, 1960 stipulates that if a member of the CO-operative Housing Society has not paid his dues, then the speedy procedure to recover the dues can be invoked by initiating action under Section 101 of the Maharashtra Co-operative Societies Act, 1960 are completed within four months. Legal hurdles with regard to the recording of evidence are not applicable for proceedings initiated under Section 101 of the Maharashtra Co-operative Societies Act, 1960. The Registrar of Co-operative Societies is a quasi judicial authority. One does not have to appoint an Advocate to initiate action u/s 101 of the Maharashtra Co-operative Societies Act, 1960.
Co-operative Societies are advised that they should initiate action against the defaulting members before the Law of Limitation period otherwise Co-operative Societies would not be able to take advantage of Section 101 of the Maharashtra Co-operative Societies Act, 1960. It will not be out of place to mention that the officer bearers of the Society are normally rendering honorary services and it is difficult for them to go the court which besides being time consuming is also expensive.
In the event, Society has not recovered the dues from the members within a period of three years then in such circumstances the societies are advised to file a dispute under Section 91 of the Maharashtra Co-operative Societies Act, 1960 where the period of limitation is not restricted to three years. The reason for the same is Section 92 (1) (b) of the said Act provides that notwithstanding anything in the law of Limitation, 1963, disputes can be filed under Section 91 of the Maharashtra Co-operative Societies Act, 1960 against the past members within a period of Six years from the date the person ceases to be a member of the society. Normally, the membership of member continues and therefore, there is no restriction with regard to taking action against the defaulting member under Section 91 of the Maharashtra Co-operative Societies Act, 1960. However all the legal formalities of regular suit like recording of evidence, framing of issues, cross examination arguments etc. will be applicable.
Co-operative Societies as well as persons desirous of obtaining copy of the said judgement will compel office bearers of the society to initiate recovery action 1960 within a period of three years failing which the societies might lose their right to recover the amounts that could be recovered otherwise by the Society.
sir , thanks u article is helfully . But I have 2 cases of practical , for advice which socity at large may benifit ,
1) builder has sold one flat two buyers, both have paid stamp duty purchaser’ A’ is an invensator pays part money to builder, for a flat , society is formed , obtains share certficate a copy only ” but does not pay balance amount , builder selll to purchase B, who pays full price of the flat , issue a letter of allotment etc . then socirty refruses to issue or regularise the sale, purcaser B is in physical postion for over 8years , then soicrty issue sec 101 proceding for revovery of soicety maintance charges, purchase B , pays and clears dues , but no society maiantance bill is isssued on his name , issue stil unresoled , society says get NOC from purchaser A,, purchasesays builer has to pay balance amount for investment of 4 other flats , till builder settle the issue NO NOC SHALL BE ISSUED : what shall purchaser B do to obtain share certficate , who is still paying society montly dues without is name recipt . yr suggestion sir ,
case 2) sir101 is applicale only to reg. share holders – members. still thereare 5members who are in postion , where claims is about 5-20 laks against the non memebers , will sec 101 by society help to recover , as purchaser says issue bill on our name , we all will pay , your suggestion to sole this isssue .
For recovery of dues, maintenance and service charges, a Forum is provided under section 101 of the Mah Coop. Societies Act. If the proceedings are barred by limitation, how the same will be maintainable under different Forum?