Interest charged on interest by the society

Querist : Anonymous (Querist) 15 November 2011 This query is : Resolved
Dear Sir,
I want to know whether any Cooperative Hsg. Society can charge interest on the interest outstanding along with the original amount. i.e.compounding interest? Due to some unprofessional management, we stopped paying maintenance charges to our society. Since then the maintenance charges are being imposed by society on outstanding maintenance charges. Further, the said charges are maintenance amount+ interest + interest on (maintenace amount and earlier interest taken together to calculate new interest). Is is fair? Can my society charge interest this way?? I think it is against the bye laws of housing society. Further,my society is a proposed one.. Kindly advise to take suitable action against the secretary of the society..

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Adv Akhtar Ali Sheikh (Expert) 15 November 2011
this is unfair, illegal SOCIETY CAN COLLECT SIMPLE INTEREST ONLY NOT THE COMPOUND INTEREST (As per the Maharashtra Co-operative Laws may be same other places too) , you have to fight them legally for that you have to shell out money and/or fritter away your time.

Sankaranarayanan (Expert) 15 November 2011
you follow the norms of the local co-operative law.

ajay sethi (Expert) 15 November 2011
you dont take action against the secretary . the action is against society . society cannot charge you compound interest . maximum interest rate is 21%. simple interest can only be charged . interest on interest cannot be charged .

Rajeev Kumar (Expert) 15 November 2011
I agree with mr.sethi

Sailesh Kumar Shah (Expert) 15 November 2011
Mr. Akhtar and Mr. Ajay stated correct position.

Querist : Anonymous (Querist) 16 November 2011
Dear Mr.Sethi,
Why can't I take action agains the Secretary?? My society is a proposed one. Further, there is no registration in nay manner done by the Society. It is also important to note that the Secretary himself has done these filthy techniques?? Could u pls tell can I lodge a complaint in Municiple Corporation of my area or any other place where quick remedy is available??

ajay sethi (Expert) 16 November 2011
how many flats are sold . first form the society . make an application signed by all members for registration of society .

once society is formed then it will be governed by provisions of cooperative soceties act and the bee laws .

in the meantime all residents should get together strongly object to charging interest on interest

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