Home > Article Showcase > Society Matters > Section 101 of Mcs Act 1960 – Defaulters in Housing Societies

The recovery of dues from the defaulting members of any Housing Society is a thorny task when such unashamed members do not co-operate with the Managing Committee of their Society. They enjoy all the facilities under the laws governing the Societies simultaneously by breaking the laws of Society in the matter of timely payment of their monthly dues.

Earlier, the Co-operative Housing Societies used to proceed against the defaulting member for recovery of dues under Section 101 of the MCS Act, 1960 with full- fledged trial in the Co-operative Court with all the ingredients e.g. cross-examination of witnesses, exhibiting the documentary evidences and their interpretations etc.     

With the amendment of Section 101 of the MCS Act, 1960 the recovery of dues from the willful defaulters has now become easy and faster. The reason is that the amendment provides quick relief with no full-fledged inquiry unlike the series of proceedings in Co-operative Court. The power is now given to the Asst. Registrar/Deputy Registrar to issue a Recovery Certificate for the amount due by making a summary inquiry on the basis of the affidavits filed by the disputant and the respondent.    

To begin with the procedural aspect, the Chairman/Secretary of the Society has to issue a demand notice to the defaulter giving him opportunity to make the payment of the dues to the Society within such period, as the Chairman/Secretary may allow, with a warning therein that on failure to make payment of the same, an application would be made to the Asst. Registrar/Deputy Registrar under section 101 of MCS Act, 1960 for recovery of the outstanding dues.  

Thereafter, upon the failure of the defaulter member to make the payment of the outstanding dues to the Society within stipulated period as mentioned in the notice, the Managing Committee has to pass a resolution against the defaulter member under section 101 of the MCS Act 1960 authorizing the Chairman or the Secretary of the Society to sign all the documents to be submitted to the Asst. Registrar/Deputy Registrar of Co-operative societies and to furnish the necessary information required by the them for issuing a Recovery Certificate.

On receipt of the application from the Society, the Registrar would give hearing to the member concerned and on verification of the facts of the case, outstanding dues and after making such inquiries, as the Registrar deems fit, the Recovery Certificate will be issued.

On receipt of the Recovery Certificate under section 101 from the Asst. Registrar/Deputy Registrar along with other documents, the Recovery Officer shall prepare demand notice for being sent to the Sale-Officer for attaching the movable property of the member concerned. The Sale Officer, on receipt of recovery paper from the Recovery Officer, shall visit the flat of the member concerned for preparing an inventory of the movable property and handover such list to the member concerned and serve the 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 will seize the movable property.

Thereafter, the Sale Officer will fix the date, time and place for such 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.

In the event of the proceeds of the sale of movable property are found to be insufficient to cover the outstanding dues in full as per the Recovery Certificate, the sale officer will then proceed against the flat of the member concerned by arranging auction of the flat to recover the balance of the dues payable by the member to the Society.

The procedure for recovery of dues is as under:

Issue a notice for payment of dues to the defaulter.

Pass the resolution to recover the dues in the Managing Committee Meeting.

Issue a final notice to the defaulter.

Apply to the Asstt. Registrar / Deputy Registrar for the recovery of dues.

Pay the prescribed fee.

The fee has to be paid through a challan payable at the Reserve Bank of India.

The rate of fee payable is as under:

Amount (Rs.) Scale of fee court fee

1,000/- 5.5% Rs. 15/-

1,001/- to 2,000/- 4.5% Rs. 20/-

2,001/- to 5,000/- 3.5% Rs. 20/-

5,001/- & Above 3% Rs. 25/-

Maximum Fee Rs. 1,000/-

 

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