Writing off Interest on Maintenance Charges

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This topic contains 1 reply, has 2 voices, and was last updated by Dr. Ashok Dhamija Dr. Ashok Dhamija 7 months ago.

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  • #3787

    Dear Sir,

    Our Society is governed by the MAHARASHTRA CO-OPERATIVE SOCIETIES ACT, 1960. We have charged interest on outstanding Maintenance Charges to the members in earlier years. Now all the members have decided to waive off the interest component and amicably settle the outstanding principal amounts. Could you please let me know the procedure to write off this interest amount, if allowed under the law?

    Regards,
    Aamir

  • #3805

    Writing off of the maintenance charges may depend on the bye-laws of your society. Please check your bye-laws. In general, since many of the societies adopt the Model Bye-laws under the Maharashtra Co-operative Societies Act, 1960, the relevant provisions in the said model bye-laws are reproduced as under, which may be helpful to you (the actual bye-law numbers may be different in your bye-laws):

    “150. Subject to the bye-law No. 151, the society may write off 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, appointed under section 81 of the Act.

    “151. The amounts mentioned in the bye-law No. 150 shall not be written off unless:

    i) the meeting of the general body of the society has given due sanction for writing off the amounts;

    ii) the approval of the financing agency to the writing off of the amounts, if the society is indebted to it.

    iii) the approval of the Registering Authority is obtained.

    Provided that, if the society is affiliated to the District Central Cooperative Bank or any other financing agency but is not indebted to it the permission of the Bank or the financing agency is not necessary, Provided further that, if the society is classified as Aor B at the last Audit, no such permission of the 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.

     

         


    Dr. Ashok Dhamija is a New Delhi based Supreme Court Advocate and author of law books. Read more about him by clicking here. List of his Forum Replies. List of his other articles. List of his Quora Answers.

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