Dispute with Cooperative Society on payment of interest and admin charges – what is remedy?


Our Society is registered in Thane district of Maharashtra. We are required to pay Society maintenance charges for our flat which is invariably due from 1st of every month and due date is 15th of that month. In case of delay 21% p.a. interest is charged. In my case we paid interest on 28th of that month, so society should have charged me interest for delayed payment from 16th to 28th @ 21% p.a. which is also the requirement of model bye-laws. But they charged me interest for the entire month from 1st to 30th without appreciating the fact that first 15 days are normal days for which no interest should be charged. When asked to committee, they only keep on repeating and asking me to pay my bills. Additionally, Society charged me Rs. 1000 as admin charges for doing follow up of my maintenance dues. But the fact is I have not received a single follow up reminders from society. Kindly advise us how do we proceed as CHS committee is in no mood to reconcile its records and also not able to show us any proof for charging Rs. 1000 as admin charges. Since I am disputing this I am not paying the overcharged interest as well as my normal maintenance bills. Request for your guidance and help on this urgently.

Cooperative SocietyAnswer: From the description given by you, it appears that your society is governed by the Maharashtra Co-operative Societies Act, 1960. The best option for you, of course, is to talk to management of your Society and sort out the issue amicably by showing them the bye-laws applicable to your society. As you have separately mentioned that Rule 72 of the Model Bye-laws is applicable which provides that you are required to pay simple interest at 21% per annum, on the dues to the Society, from the date the amount was delayed till its payment remains unpaid; this Rule is reproduced below:

72. A member shall be required to pay simple interest at 21 percent per annum or such fewer rates as fixed by the general body of the Society, on the dues to the Society, from the date the amount was delayed till its payment remains unpaid by the member within the period as prescribed under bye-law No. 70.”

However, if it is not possible to sort out the issue amicably with the Society management and you do not want to compromise on the issue (though the issue appears to be comparatively small, but I understand that sometimes it may be a matter of principles), then the only option left before you would be to approach the Co-operative Court (that has jurisdiction in your area) under the provisions of Section 91 of the Maharashtra Co-operative Societies Act, 1960. The relevant extract of Section 91 is reproduced below:

91. DISPUTES. (1) Notwithstanding anything contained in any other law for the time being in force, any dispute touching the constitution, elections of the committee or its officers other than elections of committees of the specified societies including its officers, conduct of general meetings, management or business of a society shall be referred by any of the parties to the dispute, or by a federal society to which the society is affiliated, or by a creditor of the society, to a co-operative Court, if both the parties thereto are one or other of the following:—

(a) a society, its committee, any past committee, any past or present officer, any past or present agent, any past or present servant or -nominee, heir or legal representative of any deceased officer, deceased agent or deceased servant of the society, or the Liquidator of the society or the official Assignee of a deregistered society;

(b) a member, past member or a person claiming through a member, past member or a deceased member of society, or a society which is a member of the society for a person who claims to be a member of the society;

*** *** ***

(3) Save as otherwise provided under sub-section (2) of section 93, no Court shall have jurisdiction to entertain any suit or other proceeding in respect of any dispute referred to in sub-section (1).

Explanation 1.—A dispute between the Liquidator of a society or an official Assignee of a de-registered society and the members (including past members, or nominees, heir or legal representative or deceased members) of the same society shall not be referred to the Co-operative Court under the provisions of sub-section (1) .

Explanation 2— For the purposes of this sub-section, a dispute shall include— (1) a claim by or against a society for any debt or demand due to it from a member or due from to a, member past member, or the nominee, heir or legal representative of a deceased member, or servant for employee whether such a debt or demand be admitted or not;

*** ***.”

The above section [including Explanation 2 to sub-section (3)] makes it quite clear that any dispute between the society and its member shall be decided only by the Co-operative and no other court will have jurisdiction in such matters.

Therefore, you’ll have to file the appropriate proceedings before the Co-operative Court having jurisdiction in your area. If necessary, please consult some local lawyer, who deals with society matters, for more details.

About Dr. Ashok Dhamija

Dr. Ashok DhamijaDr. Ashok Dhamija is a New Delhi based Supreme Court Advocate, holds Ph.D. in Constitutional Law, is author of 3 law books, and is an ex-IPS officer. He is the founder of this law portal. Read more by clicking here. List of his articles. List of his Forum Replies. List of his Quora Answers.

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