I am Mukesh Shelat staying in Mumbai, Maharashtra. My society in a general body meeting passed a resolution to create a advance repair fund on adhoc basis for 9-12 months based on the respective carpet area of the flat.
In addition they also passed resolution to levy an interest @ 21% on the unpaid amount of total bill including the maintenance charges.
Now I would appreciate your efforts if you can guide me on the legality of the levy of interest on repairs fund collection monthly basis. Also its eligibility for issuing recovery under 101 section of MCS act 1960.
Your response in this matter will be highly appreciated.
I C Naik
- Creation of a Major Repair Fund is in accordance with bye-law No. 13(b) extracted below : {This is as per Model bye-laws 2001: Please check in your housing society’s registered bye-laws).
- The society shall create and establish the following funds by collecting contributions from its members at the rates mentioned hereunder:
(a) xxx
(b) Major Repair Fund, as and when required and decided by the General Body at the rates fixed on area basis.
- Resolution to levy interest is in accordance with bye-law No. 72
- A 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, from the date the amount was delayed till its payment not paid by the member within the period as prescribed under bye-law No 70., from the date of the amount was defaulted till its payment.
As for Certificate Under 101 following explanation to sub-section 1 of that section provides guidance:
“ [[Explanation II.—For the purposes of this sub-section the expression “maintenance and service charges” means such charges as are specified in the by-laws of the concerned co-operative housing society.]”
Levy of interest on delayed contribution to major fund is also covered by bye-laws.