Recovery of dues u/s 101

It is obligatory to take approval as per resolution of general body meeting in the regard of maintenance service and other charges, as per Model bye-laws section 139. Irrespective of the fact whether member is occupying residential or commercial premises, maintenance charges should be same, under rule no 71(A)(7) of Model bye laws. The only difference would be in charges like Property Tax, Water Charges & Insurance. Sunanda J. Rangnekar V/s. Rahul Apartment No. 11 CHS – Bombay High Court on 10 August 2005.​

What is the procedure for recovery of non-payment of dues by a member?​

A CHS is never formed for making profits instead it collects and disburses the contributions from its members towards common facilities and services enjoyed by its members. It is the duty of every member to pay dues properly & on time for ensuring the smooth functioning of the society. Disputes with the society cannot be mixed or made a reason for non payment.

The procedure for recovery of dues is as under:

  1. If a member fails to pay the dues after issue of the notice for a period exceeding three months is termed as a defaulter as per the Maharashtra Co-operative Societies Act 1960 and as per Bye-laws of the society.

  2. Issue a notice for payment of dues (including up to 21% interest) to the defaulter, with a warning therein that on failure to make payment of the same, an application would be made to the Assistant Registrar/ Deputy Registrar under section 101 of MCS Act, 1960 for recovery of the outstanding dues.

  3. Pass the resolution to recover the dues in the Managing Committee Meeting.

  4. Issue a final notice to the defaulter

  5. Apply to the Assistant. Registrar/ Deputy Registrar for the recovery of dues.

  6. Pay the prescribed fee (Rs 15 to 1000 max) through a challan payable at the Reserve Bank of India.

  7. The Assistant Registrar/ Deputy Registrar would issue a Recovery Certificate for the amount due, after making a hearing and a summary inquiry on the basis of the affidavits filed by the disputant and the respondent.

  8. On receipt of the Recovery Certificate, the Recovery Officer shall prepare demand notice for being sent to the Sale-Officer for attaching the movable property of the member concerned.

  9. The Sale Officer, on receipt of recovery paper from the Recovery Officer, shall visit the flat of the member concerned for preparing an inventory of the movable property and handover such list to the member concerned and serve the demand notice on the defaulter member.

  10. If the amount not paid by the member concerned immediately on service of the demand notice, the Sale Officer will seize the movable property.

  11. Thereafter, the Sale Officer will fix the date, time and place for such auction of the movable property seized and auction out the same and pay the sale proceeds thereof to the Society, in satisfaction of the outstanding dues payable by the defaulting member to the society

 

As per the provisions of the bye-law:​

  • A defaulter cannot contest the election to be held for the post of Committee Members. However, a defaulter can propose or second candidate for the election.

  • A persistent defaulter can also be expelled by the society. Even the High Court has held that a persistent defaulter can be expelled. If the member is expelled and the same is approved by the registrar and other higher authorities, the concerned member can be evicted from the premises to pay society dues.

  • The concerned defaulter will have to defend his legal cases at his own cost. Further any expenses incurred by the society in filing the cases will be recovered from the concerned member and the same will be included in the Certificate of recovery given by the registrar. Upon granting such Recovery Certificate the Stamp Duty, Court enquiry fees and surcharges will have to be paid by the respective defaulter member. Further a portion of the Legal expenses incurred by the society will be included in the share of contribution given by the defaulter member. Besides, attending the Court cases and Registrar’s office is a time-consuming process.

  • If the defaulter has some complaints or grievances against the society or Managing Committee, his said complaints will not be entertained by the Office of Registrar unless and until he pays the society dues.

  • In the General body meeting the members can frame & approve certain rules with respect to parking and resolve to not to allow or allot parking to a defaulter.

  • The concerned defaulter member cannot avail of any loan which he wants to take by mortgaging his premises on which dues are pending, as the financial institution will always ask for a No-dues Certificate.

  • A defaulter member cannot sell his/ her flat unless and until he clears-off the dues. As the society would refuse the NOC & also to transfer the premises unless & until the dues are cleared.

  • If he wishes to rent or sub-let his premises the society might not let him permission to do so unless and until he pays all the dues.