RECOVERY UNDER SECTION 101 OF THE M C S ACT 1960

Overdue outstanding of housing society maintenance is an irritant in every society despite 21% interest charge for any delay. Collection of overdue society charges is an extremely important business of housing society. Raising dispute in that behalf is a dispute referable to the Cooperative Court under Section 91 of the M C S Act 1960 to the exclusion of any other court.
With a view to make it easy for cooperative societies to recover amounts due by members exceptionally special provision/procedure has been introduced in the legal system of the State by inserting Section 101 in the M C S Act 1960.

Cooperative society engaged in business of buying goods/services for its members, value recoverable from members for such supplies are called debt. A suit for recovery of debts filed after three years is deemed to be a time barred suit. A suit instituted and application made after the prescribed period shall be dismissed, although limitation has not been set up as a defence [Section 3 of the limitation act, 1963] This is known as a suit for recovery of time barred debt.

the amount demanded from every members and remaining outstanding are brought within the purview of Section 101 vide amendment to the M C S Act 1960 made by Mah. 20 of 1986, vide its s. 52(a) QUOTE: “by a co-operative housing society for the recovery of arrears of its dues”.

BENEFIT OF FOLLOWING COMPLETING 101 PROCEDURES
1. The Section 101 procedure is a simpler way of realizing arrears of society dues without instituting the cumbersome court proceedings a compulsion in business which require establishing debt due by a debtor to a creditor in the course of business a profit making activity necessarily.

2. The hallmark of this procedure is the Assistant Registrar/ Deputy Registrar issuing a Recovery Certificate for the amount due, after making a hearing and a summary inquiry on the basis of the affidavits filed by the disputant and the respondent. Obtaining this certificate costs maximum of Rupees one thousand payable as application fees to the State Government.

3. A certificate granted by the Registrar under sub-section (1) or (2) shall be final and a conclusive proof of the arrears stated to be due therein, and the same shall be recoverable according to the law for the time being in force for the recovery of land revenue.

4. After the recovery certificate is issued the ball is in the Court of the state Government;

i.On receipt of the Recovery Certificate, the Recovery Officer shall prepare demand notice for being sent to the Sale-Officer for attaching the movable property of the member concerned.
ii.The Sale Officer, on receipt of recovery paper from the Recovery Officer, shall visit the flat of the member concerned for preparing an inventory of the movable property and handover such list to the member concerned and serve the demand notice on the defaulter member.
iii.If the amount not paid by the member concerned immediately on service of the demand notice, the Sale Officer will seize the movable property.
iv.Thereafter, the Sale Officer will fix the date, time and place for such auction of the movable property seized and auction out the same and pay the sale proceeds thereof to the Society, in satisfaction of the outstanding dues payable by the defaulting member to the society.
Making Application for issuing a recovery certificate
a.Issue a notice for payment of dues (including up to 21% interest) to the defaulter, with a warning therein that on failure to make payment of the same, an application would be made to the Competent Authority under section 101 of MCS Act, 1960.
b.Pass the resolution to recover the dues in the Managing Committee Meeting.
c.Issue a final notice to the defaulter
e.Apply to the Assistant. Registrar/Deputy Registrar for the recovery of dues.
f.Pay the prescribed fee (Rs 15 to 1000 max) through a challan payable at the Reserve Bank of India.
As is evident there is no suit before court of law is involved. In fact for cooperative disputes cooperative courts have exclusive jurisdiction and even that is obviated by special procedure of Recovery Certificate and Administration of the State helping Societies to recover arrears of dues at almost no coast. Question of time barring is unthinkable.

*SECTION 101 OF MCS ACT PROVIDES EASY ROUTE FOR RECOVERY OF DUES OF SOCIETY.
The recovery of dues from the defaulting members of any Housing Society is a thorny task when such unashamed members do not co-operate with the Managing Committee of their society. They enjoy all the facilities under the laws governing the societies simultaneously by breaking the laws of society in the matter of timely payment of their monthly dues.

Earlier, the Co-operative Housing Societies used to proceed against the defaulting member for recovery of dues under Section 101 of the MCS Act, 1960 with full-fledged trial in the Co-operative Court with all the ingredients e.g. cross-examination of witnesses, exhibiting the documentary evidences and their interpretations etc.

With the amendment of Section 101 of the MCS Act, 1960 the recovery of dues from the willful defaulters has now become easy and faster. The reason is that the amendment provides quick relief with no full-fledged inquiry unlike the series of proceedings in Co-operative Court. The power is now given to the Asst. Registrar/ Deputy Registrar to issue a Recovery Certificate for the amount due by making a summary inquiry on the basis of the affidavits filed by the disputant and the respondent.

retary of the Society has to issue a demand notice to the defaulter giving him opportunity to make the payment of the dues to the Society within such period, as the Chairman/ Secretary may allow, with a warning therein that on failure to make payment of the same, an application would be made to the Asst. Registrar/ Deputy Registrar under section 101 of MCS Act, 1960 for recovery of the outstanding dues.

Thereafter, upon the failure of the defaulter member to make the payment of the outstanding dues to the Society within stipulated as mentioned in the notice the Managing committee has to pass a resolution against the defaulter member under Section 101 of the MCS Act, 1960 authorizing the Chairman or Secretary of society to sign all the documents to be submitted to the Asst. Registrar/ Deputy Registrar under of the co-operative societies and to furnish the necessary information required by them by issuing certificate.

On the receipt of application from the society, the Registrar would give hearing to the member concerned and on verification of the facts of the case, outstanding dues and after making such enquiries, as the Registrar deems fit, the Recovery Certificate will be issued.
On the receipt of Recovery Certificate along with other documents, the Recovery Officer shall prepare demand notice for being sent to the sale-officer for attaching the movable property of the member concerned. The sale-officer on receipt of Recovery Paper shall visit the flat of the member concerned for preparing an inventory of the movable property and handover such list to the member concerned and serve the demand notice on the defaulter member. If the amount not paid by member concerned immediately on service of the Demand Notice, the sale-officer will seize the property.
Thereafter the sale-officer will fix the date, time and place for such auction of the movable property seized and auction out the same and pay the sale proceeds thereof to the society, in satisfaction of the outstanding dues payable by the defaulting member to the society.
In the event of the proceeds of the sale of movable property are found to be insufficient to cover the outstanding dues in full as per the Recovery Certificate, the sale-officer will then proceed against the flat of the member concerned by arranging auction of the flat to recover the balance of the dues payable by the member to the society.

THE PROCEDURE FOR RECOVERY OF DUES IS AS UNDER
1. Issue a legal notice for payment of dues to the defaulter.
2. Pass the resolution to recover the dues in the Managing committee Meeting.
3. Issue a final legal notice to a defaulter.
4. Apply to the Assi. Registrar/ Deputy Registrar for the recovery of dues.