Society Maintenance is a ‘Legal Duty,’ Not Optional: Court Ruling Gives Societies Stronger Powers to Recover Dues
MUMBAI/PUNE: In a verdict that will significantly bolster financial discipline in Cooperative Housing Societies (CHS), the Bombay High Court has ruled that the payment of society maintenance is a “continuous legal duty” and a “recurring statutory obligation.” The decision effectively ends the era where chronic defaulters could escape payment by claiming dues were “time-barred.”
The Court’s decision clarifies that maintenance dues are not subject to standard limitation periods, meaning societies can now legally recover arrears dating back several years.
A Recurring Liability: No Escape via Limitation Act
Presiding over a batch of petitions challenging recovery certificates, the Court held that society maintenance and service charges constitute a “continuing wrong” as long as the occupant remains in possession of the premises. Unlike a one-time debt, maintenance is a recurring liability that refreshes every billing period.
Crucially, the Court established that Section 154B-29 of the Maharashtra Cooperative Societies (MCS) Act acts as a special recovery mechanism. This provision overrides the general Limitation Act, ousting procedural hurdles that previously stalled recovery of old dues.
Case in Point: The ‘Possession Equals Liability’ Principle
The judgment stemmed from a long-standing dispute involving an occupant who had been in possession of four flats for nearly 20 years. The occupant argued that because the society had not issued formal bills for nearly two decades, and because they were not a “formal member,” the claim for recovery was barred by time.
The High Court dismissed these arguments, establishing three vital precedents:
- Possession is Paramount: The occupant had been enjoying security, water, and common facilities for decades. The Court ruled that enjoying these services without contributing constitutes “unjust enrichment” at the expense of law-abiding members.
- Duty of Occupants: The Court rejected the plea that a lack of formal membership or a registered agreement absolves one of liability. If you occupy the premises, you bear the corresponding financial obligations.
- Fresh Cause of Action: Each month of non-payment is a fresh omission to perform a positive duty. Therefore, the “cause of action” is continuous and does not expire after three years.
Section 154B-29: The New Tool for Recovery
The ruling strengthens the hands of Managing Committees by validating the summary nature of Section 154B-29. This provision specifically targets housing societies, allowing for a faster issuance of recovery certificates by the Registrar, which are then enforceable as “arrears of land revenue.”
“Society dues arise from the act of occupation,” the Court noted. Each monthly default is a fresh cause of action, meaning the legislative intent is to prevent the financial paralysis of a society due to technicalities or delays.
How Charges are Calculated
While the duty to pay is absolute, the method of calculation remains specific to the type of property:
- Cooperative Housing Societies (CHS): Common service charges are generally levied equally per unit to ensure fairness.
- Condominiums (MAO Act): A separate ruling (August 2025) clarified that for condominiums, charges must be proportionate to the flat size, reflecting the undivided interest each owner holds.
Conclusion for Homeowners
This judgment serves as a stern warning to those residing in housing societies without formalizing their paperwork. With the High Court defining maintenance as a continuous legal duty, societies now have the judicial backing to initiate stern recovery proceedings, including the attachment of property, regardless of how long the dues have been pending.
