Issues pertaining to MSCS Act

By IC Naik

One of our readers Irshad Khairatkhan raised a few pertinent questions pertaining to MSCS Act which we are featuring in Coffee Shop

The response is from our columnist I C Naik which follows thus

Irshad has raised two tricky questions namely:

1.Can the Chairman of the cooperative housing society make a bid for Property of his society which is under auction-sale against a recovery certificate issued under Sec 101 of MCS Act 1961?

2.Is there any Limitation of law of time-barring of cooperative housing society dues directed to be recovered by taking recourse to Section 101 of MCS Act 1961?

35.Registered bye-laws of every housing society prohibits its office bearer in these words: “No Officer of the Society shall have any interest, directly or indirectly, otherwise than as such officer: (a) In any contract made with the Society.( b ) In any property sold or purchased by the Society. ( c ) In any other transaction of the Society, except as investment made in or loan taken from the Society for provision of residential accommodation by the Society to any paid employee of the Society.”

The transfer of the flat’s occupancy rights of a defaulter to give effect to recovery of Society Charges as per recovery certificate issued under Section 101 is not done under a transaction where the society is a party. It is no different from a transfer made by any member in normal course, which any eligible person acquire under a contract. The prohibition under bye-laws as aforesaid does not extend to the auction.

Limitation for application made the Recovery Certificate u/s 101 :

There is no time limit prescribed under Section 101 for making an application to the Dy. Registrar to obtain a Recovery Certificate. In case a housing society does not ask for a certificate, there is a vague direction to the Dy. Registrar in Sub-Section 2 namely  “Where the Registrar is satisfied that the concerned society has failed to take action under the foregoing sub-section in respect of any amount due as arrears, the Registrar may, of his own motion, after making such inquiries, as may be prescribed grant a certificate for the recovery of the amount stated therein to be due as arrears, and such a certificate shall be deemed to have been issued as if on an application made by the society concerned.

Going by spirit of Section 92(2) as long as a member is continuing there is no time barring.

The M C S Act 1960 under 92 provides “( 1) Notwithstanding anything in the Limitation  Act, 1963, but subject to the specific provisions made in this Act, the period of limitation in the case of a dispute referred to the Co-operative Court under the last preceding section shall–

(a) when the dispute relates to the recovery of any sum, including interest thereon, due to a society by a member there of be computed form the date on which such member dies or ceases to be a member of the society;


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