I would like to have your opinion on the matter stated below.
In the AGM we have passed the resolution to display the name of the members on the noticeboard who have defaulted in making the payment of maintenance. So we took the action on the same and wrote the names of the members on the noticeboard as “List of members as maintenance Defaulters”.
Now some of them are saying that they will file a case against the society for their defame, as society have not given any written notice to them.
Query :-
1) Can they do that?
2) what is the minimum tenure in which a notice can be issued to the defaulted members & at what frequency?
3) what is the alternative to it?
Thanking you in anticipation for your valuable time & prompt replay.
I C Naik
This is quite a funny provision in the MCS Act 1960. Cooperative societies are designed to run by members as an enterprise belonging to all of them. But some members take on managing committees as if there are two parties – the Committee and the society. The law has been less sincere to this concept thanks to Government over-enthusiasm to help co-operative movement grow faster.
The maligned word “Defaulter” appears is defined under Section 73CA (prior to Maharashtra cooperative societies (Amendment) Act 2014 coming in to force it was Section 73FF) Sub-Section 1 lists out members of different classes of cooperative societies (Sub-Clauses (a) to (f) who are deemed to be “defaulters” for the specific purpose of disqualifying them s to serve the society by being on the managing committee of the society. Its Sub-clause reads as under:
(e)in the case of housing societies, a member who defaults the payment of dues to the society within three months from the date of service of notice in writing served by post under certificate of posting demanding the payment of dues;
This is quite confusing undoubtedly, but it appears to give sufficient opportunity to members to save disqualifications to be on the Committee of housing societies as there is normally a complacency on the part of housing society members to show enthusiasm to take responsibility. The interpretation of the defaulters appears to be that members are not defaulters till a Notice has been issued to clear the dues and before expiry of the three months of the date of Notice they did not clear the dues. The Act is a general law on cooperatives. Detail regulations are in Bye-Laws. The Notice calling them defaulters is displayed for information of members and not for conveying that if you do not clear the dues with three months you are disqualified. In this context it is necessary to understand the Bye-Laws concerning defaulters of housing societies.
- The Secretary of the society, shall prepare demand notice in respect of the charges of the society payable by members on the basis of the bye-laws-law No. 71(a) and issue the same to all the members on or before the date fixed by the Committee in that behalf. Every member of the society shall pay the abount mentioned in the demand notice in full within such period as may be fixed by the Committee.
- A member shall be deemed to have committed default in payment of the charges of the Society, if the payment mentioned in the demand notice is not made within the period fix by the Committee under the bye-laws-law No.72. The Secretary of the society shall bring the cases of defaults in payment of the society’s charges to the notice of the committee for taking further notice of the Committee for taking further necessary action.
- A defaulter member shall be required to pay simple interest at such rate as is fixed by the general body of the society at its meeting., subject to the maximum of 21 percent per annum, on the charges of the Society, defaulted by a member , from the date of the amount was defaulted till its payment.
In subsequent Models these Bye-Laws have been some what revised but the factual position is a member has not made payment as per demand notices.
The society need not do anything and let the defaulters go to court. It is better than the society going to court for recovery.