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Recovery Process of Housing Society over dues

procedure-for-recovery-of-non-payment-of-dues

Housing Society collects the monthly maintenance expenses to ensure that they can manage the housing society works smoothly and to take care of their various common expenses like security, lift maintenance, house-keeping etc. All the members of housing society are expected to pay their maintenance bill on time as and when the same is raised on time. But some member fails to pay their dues on time on some or other pretext which makes it difficult for society to manage their fund. Member who do not pay the maintenance for continuously for three months can be termed as “Defaulter” as per Maharashtra Cooperative Society Act 1960. The Section 101 procedure is a simpler way of realizing arrears of society dues without instituting the cumbersome court proceedings.

To recover such long overdues the Society can follow below process. 

  • Society should issue a notice for the payment of dues (including interest up to 21%. Show the principal and interest separately in the notice) to the defaulter with a warning that on failure to make the payment as per notice, the society / managing committee has no option but to move an application for recovery under Section 101 of MCS Act,1960 to the competent authority.
  • Even after the reminders / warning if the member does not pay the same, pass a resolution to recover the dues under Section 101 of MCS Act’1960 in the Managing Committee Meeting.
  • Issue last and final notice to the defaulter
  • Submit application for recovery of dues under Section 101 of MCS Act’1960.
  • Pay the requisite fee (Rs. 15 to 1000 maximum) through a challan payable at Reserve Bank of India Account 0425 Co-operation, 800 other receipts XVII Notice and Recovery Fees. Refer below-
Dues to be recoveredEnquiry FeeCourt Fee Stamp
Up to Rs. 1000/-5.5% of the ClaimRs.15/-
Rs.1001 – 2000/-4.5% of the ClaimRs.20/-
Rs.2001 – to 5000/-3.5 of the ClaimRs.20/-
Rs. 5001 and above3.0% of the Claim
subject to
maximum of Rs.1000/-
Rs.25/-
  • Assistant Registrar / Deputy Registrar after making a hearing and summary inquiry basis the affidavits filed by the disputants and respondent issues “Recovery Certificate”
  • A certificate granted by the Assistant Registrar / Deputy Registrar under sub-section (1) or (2) shall be final and a conclusive proof of the arrears stated to be due therein, and the same shall be recoverable according to the law for the time being in force for the recovery of land revenue.
  • After the recovery notice is issued, the Managing Committee needs to approach the court. The Recovery office on receipt of the Recovery Certificate shall prepare demand notice for being sent to the Sale-Officer for attaching the movable property of the member concerned.
  • Sale officer on receipt of the recovery papers, shall visit the flat of the member concerned for preparing an inventory of the movable property ad handover such list to the member concerned and serve demand notice on the defaulter member.  
  • If the amount not paid by the member concerned immediately on service of the demand notice, the Sale officer is authorised to seize the movable property of the member concerned.
  • Post the above action, the Sale Officer will fix the date, time and place for 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.

You may see here that the time taking here is much lesser compare to initiating the recovery suit Cooperative Court having an exclusive jurisdiction. Hence Section 101 of MCS Act’1960 is a most effective way for recovery of long overdues. 

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