Mumbai: Societies can now wrest dues out of you

Are you a repeat defaulter on maintenances charges for your flat? Mend your ways. Housing societies in the state will soon have the power to initiate recovery proceedings from flat owners who default on such charges.

This was one of the amendments to the Maharashtra State Co-Operatives Act cleared by the state cabinet on Wednesday to bring it in line with the 97th amendment to the Constitution, which is aimed at encouraging the economic activities of cooperatives.

Societies, however, don’t get a free run of things. If they initiate recovery proceedings, they will still have to take the help of a recovery officer of the state.

While the cabinet cleared a move to permit housing society executive bodies to even sell flats to recover dues in extreme cases, the final sale of a flat will require the approval of the registrar of cooperatives.

Worried over an amendment that disallows administrators to be appointed for unaided societies — a move that would do away with state intervention in co-operative societies that do not take any government aid — the state is looking at legal options to allow intervention if there is mismanagement and misappropriation of society funds.

Co-operation minister Harshvardhan Patil said the state is mulling over a legal option of imposing certain conditions which allow it to intervene. “People can then come to us, saying the societies are registered and that the government should do something about the co-operative institution if there is deposit erosion or liquidity collapse.”

The scope for state intervention in co-operative institutions receiving government aid has been further reduced with an amendment that allows suspension or supersession of the board for only a period of six months. In the case of co-operative banks, this period cannot exceed a year.
Another major amendment stipulates that members of co-operatives will have to attend at least one annual general meeting to stay an active member. Else, he/she will be dubbed ‘non-active’, ergo, losing the right to vote.

Advocate Vinod Sampath, housing societies law expert, picked holes in the amendments. “There are a few good things. But the move to allow housing societies to directly start recovery proceedings against defaulters and then get the approval of the registrar may not be right. Any penalty can be levied only by a court, and the society cannot decide and levy them. There has to be a counter-check to the powers vested with the society. The managing committee can charge whatever comes to their mind and levy a penalty on the house owner to recover dues. People with vested interests may take advantage of this amendment.”