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Wednesday 17 May 2023

Recovery of Dues in a Cooperative Housing Society

Who is Defaulter in Co-Operative Housing Society?

As per MCS Amendment ACT 2019 154B-1(11) “Defaulter” means a Member or flat owner or occupier who fails to pay the dues of the society within three months from the date of service of bill or notice or due date of payment whichever is later;

Most common issue in housing societies is to deal with defaulters. In housing society many member don't pay the society common such as housekeeping charges, electricity, lift, water charges , and its increase year by year. Managing committee is fails to recover heavy dues from defaulters due to either lack or knowledge or they don't want to take any action only they discuss in meeting but no action. This is unfair to other residents who regularly pay their dues and they might have to bear the brunt of surplus charges that they are not responsible for that.

Recovery of dues u/s 154B-29 (earlier u/s 101)

To initiate recovery proceedings u/s 154B-29 recovery of certain sums and arrears due to housing society as arrears of land revenue, the General Body Meeting/ the Managing Committee, through the Secretary take approval and pass the resolution to start the legal action against the defaulter. 

What is the procedure for recovery of non-payment of dues by a member?​ Procedure To Recover Maintenance Dues from Defaulters

Co operative housing society is never formed for making profits. Co operative housing society collects the maintenance charges and disburses the same to service providers. All common facilities and services enjoyed by its members, so It is the duty of every member to pay maintenance charges timely for ensuring the smooth functioning of the society. For any disputes with the society cannot be mixed or made a reason for non payment, you can pay the maintenance charges and can take the legal action side by side.

The procedure for recovery of dues is as under:

If a member fails to pay the dues continue three months after society has issued the invoices/bills, members come under defaulters as per the MCS Amendment Act 2019 and as per Bye - laws of the society.

1. Issue notice to the defaulting member, giving details of dues with interest accrued till date.

2. Issue demand notice giving 21 days to clear all dues, giving detailed break-up of all heads of dues.

3. On the expiry of the said notice period, pass a resolution in the M.C. meeting for 2nd Reminder.

4. Repeat item No. 2 above as 2nd Reminder (referring to the earlier notice, give another 21 days to clear all dues, giving detailed break-up of all heads of dues.

5. On the expiry of 2 notice, pass a resolution in the M.C. meeting for recovery of dues and send for recovery.

6. Convene Special General Body/Managing Committee meeting for recovery proceedings.

7. Get Resolution for recovery passed at this SGM/ MCM, keep copies of all the above items i. e, item Nos. 1 to 7. These are basic documents to be produced for moving recovery proceedings. Approach the Registrar for initiating recovery proceedings. 

8. Registrar then starts the procedure and issues notice to all concerned members asking to show cause why suitable action should not be taken against them. He keeps one copy of the notice with him and sends one copy to the Society.

9. After hearing the concerned member's and the society, if warranted, issues Recovery Certificate.

10. Subsequently, recovery is effected as land revenue.

11. Approach anyone of the empanelled Recovery Officer for executing the Order under Section 156 of the MCS Act, 1960 and Rule 107 of the MCS Rules, 1961.

Under Section 154B - 29 of the MCS Act, the Registrar of Co-operative Societies is empowered, after observing the due formalities to grant a certificate for recovery of the amount, stated therein, to be due as arrears and such a certificate shall be final and conclusive  proof of the arrears and the same shall be recoverable according to the law for the time being in force, for recovery of land revenue. Consequently, the Registrar is authorized to accord approval for appointment of recovery officer's under the role of the Federation, associated with him under the proviso of the MCS Act.

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