Why housing co-opearative society is not allowed to charge interest from defaulters of service charg

Charging reasonable interest on delayed payments requires no special authorisation by law. You may take up the matter with higher authorities.

Charging interest at the applicable rate made a bylaw by the society can very well be proceeded however if the registrar objects to charging the interest citing the rules then the society has to obey the rules and the regulations.

The society is not above law hence it has to abide by the law of the land.

The question is whether the Registrar is vested with any authority to interfere with the ordinary rights of a person? The Registrar is certainly not above the law.

It is elementary that no authority can impair the ordinary rights of any person unless so expressly authorised by an Act of the Legislature or a Rule thereunder. 

Bye-laws of the Society must contain penalty against defaulter(s), if it is not there iget it ncluded by approval of GBM for amendment in the Bye-laws. 

Delhi Cooperative Societies Rules 2007 provide for interest as under:

32. Default in payment by a member, the Equalization charges from a new member and payment of interest to the outgoing member;

(1) In case of default in payment of demand in a co-operative housing society by the members, the maximum rate of interest charges shall be as under:

(a) for default of payment of installment upto six months @ 9 percent per annum;

(b) for default of payment of installment upto one year @ 9.5 percent per annum; and

(c) for default of payment of installment for more than one year @ 10 percent per annum.

(2) Equalization charges to be charged from the member enrolled at the advance stage of construction @ 12 percent per annum on the amount of payments raised by the co-operative housing society from each member of same category for land money and construction purposes.

(3) interest to be paid by a housing co-operative society to a resignee / expelled member shall be @ 6 percent per annum on deposits out of interest so calculated and co-operative society shall charge not more than 2.5 percent as administrative expenditure:

Provided that interest on default / equilisation charges/refund of deposit shall be charged by such co-operative society at the simple rate of interest.

(4) The Registrar, may review the above rates periodically.

A Member shall be required to pay simple interest at 21% per annum, or, at such lower rate as may be fixed by the General Body, on the outstanding dues to the Society, from the date the amount was due as prescribed under Bye-law , till full and final payment by the Member.

Sir,

Thanks for your reply. But our jurisdiction is West Bengal.  Jt. Registrar of Co-operative Societies, KMAH Cell, mentioned in his letter to our co-operative society that " in the WBCS Act,2006 and WBCS Rules,2011 there is no provision of penal interest".

Now my question is that then how Govt. of West Bengal can charge interest/Penalty on any Govt dues if any one not paid that in time? How the  same legislature can frame different rules for different departments. Is there any way out to counter this rule/Act and impose interest on pending amount from the member in West Bengal?

Thanks & Regards,

Nilay Barat

The maintenance charges etc, will not be made in the Act.  The maintenance charges, guarding duty, and water electricity shall be made as decided by the General Meeting. The majority of members in General shall decide the charges and interest on pending payments.  So what are the rules and regulations of your society?

Power of General Meeting of WBCS sec.24:  The General Meeting of a Cooperative Society shall examine, the annual report regarding the working of the society and, in particular, the work of the Board and shall be competent to take all steps that may be necessary for the interest of the society. 7(2) Every resolution at a meeting shall be decided by a majority of votes and if the votes be equal, the matter shall be decided by the casting vote of the Chairman of the meeting. 

Varying Views but not really of any useful guidance to to either the housing -society/- ssociation and or its constituent members - Any contrarian view ? 

To provide a close to right or beter ANSWER, sugest to consider insightfully- not side track for any reason the sorrounding field realities as borne out say, for a sample HERE >

https://www.lawyersclubindia.com/forum/why-housing-co-opearative-society-is-not-allowed-to-charge-interest-from-defaulters-of-service-charg-228756.asp?fbclid=IwAR2LuYpK_kkUB-HGrVTh-ihRapvrX7ZU8syBrr_DCkfq2Xpgwq8HWvJtM7k#reply

https://timesofindia.indiatimes.com/city/bengaluru/kids-din-law-silent-on-how-to-tackle-apartment-conflicts-in-bengaluru/articleshow/99328023

https://adda.io/blog/2019/08/pets-in-apartments-laws/

courtesy