• FAIR RECOVERY. FAIR PROCESS. FAIR PROTECTION.
  A petition for a balanced and accountable system for recovery of housing-society dues in Maharashtra

To
The Government of Maharashtra
Department of Cooperation, Marketing and Textiles

 
We support recovery of genuine society dues.
But we also believe that a member should have a fair and effective mechanism when the amount, calculation, legal basis or circumstances surrounding a demand are genuinely disputed.

Section 154B-29 of the Maharashtra Co-operative Societies Act, 1960 provides co-operative housing societies with an important statutory mechanism to recover dues.

We are not asking for this recovery mechanism to be abolished.

We are asking the Government of Maharashtra to ensure that speedy recovery and fairness to members exist together.

 
Why does this matter?
A housing society depends on timely payments from its members.

Maintenance, security, housekeeping, electricity, water, repairs, insurance, staff and other common expenses have to be paid.

A member who simply refuses to pay legitimate dues should not be allowed to misuse legal processes to indefinitely delay recovery.

We agree.

But every delayed payment is not necessarily the same.

A member may be:

• facing temporary financial hardship;
• disputing an accounting entry;
• questioning an incorrect interest or penalty calculation;
• disputing whether a particular charge is payable;
• raising a genuine issue concerning a service or charge;
• challenging the legality of a resolution or levy;
• questioning compliance with the Act, Rules or Bye-laws; or
• already pursuing a substantive dispute before a competent authority or court

These situations deserve a fair and proportionate mechanism. 

 

The principle is simple
PAY WHAT YOU OWE.
CHALLENGE WHAT YOU GENUINELY DISPUTE.
GET A FAIR PROCESS FOR BOTH.
 
The six situations we believe the law should recognise
1. Genuine financial hardship
A member may temporarily be unable to pay because of circumstances such as loss of employment, business difficulties, retirement, unexpected family expenditure or other genuine financial hardship.

This does not mean the member should automatically be excused from legitimate dues.

Instead, there should be a mechanism through which a member who acknowledges the liability but demonstrates genuine temporary hardship can seek a reasonable structured payment arrangement, subject to safeguards.

The society's right to ultimately recover the dues should remain protected.

 
2. Genuine accounting or calculation disputes
Consider a simple example:

Society's demand: ₹1,50,000
Member's records: ₹1,00,000 already paid
Amount genuinely disputed: ₹50,000

The disagreement could relate to:

• payments not credited; 
• duplicate charges;
• incorrect interest;
• incorrect penalties;
• incorrect period;
• calculation errors; or
• incorrect allocation.

A member should have an effective mechanism to have such a dispute verified.

Where part of the amount is undisputed, that part should not necessarily be treated in the same manner as the genuinely disputed component.

 
3. Disputes concerning a specific service or charge
A member may raise a documented dispute concerning a particular component of a demand because of an alleged failure, deficiency or disagreement relating specifically to that service or charge.

We are not suggesting that members should simply stop paying maintenance whenever they are unhappy with a service.

Instead, the law should provide a proportionate mechanism to determine whether the particular disputed component is payable.

The objective should be:

Resolve the dispute — don't automatically convert every dispute into a default.
 
4. Disputes about the legal basis of a demand
Sometimes a member does not dispute that the society incurred an expenditure.

The question may instead be:

Was the society legally entitled to recover that amount from the member?
The dispute could concern:

• the Maharashtra Co-operative Societies Act;
• applicable Rules;
• registered Bye-laws;
• authority of the Managing Committee;
• General Body resolutions;
• major repairs;
• construction expenditure;
• service charges;
• interest or penalties; or
• the procedure through which the liability was created.

A majority decision is important in cooperative governance.

But majority approval cannot make a decision immune from scrutiny under the Act, Rules or Bye-laws.

Majority should govern within the law — not above it.
 
5. Where the underlying issue is already before a competent forum
There may be situations where the very issue on which recovery depends is already being considered by a competent authority or court.

The answer should not automatically be:

"The dispute is pending, but recovery proceeds as though the underlying issue does not exist."

At the same time, simply filing a case should not automatically stop every recovery proceeding.

We need a balanced middle path.
The law should clearly specify how a pending substantive dispute interacts with Section 154B-29 recovery.

 
6. Wilful refusal to pay legitimate dues

This situation is different.

Where a member:

• has no genuine dispute;
• acknowledges the dues;
• has no meaningful accounting or legal objection; and
• simply refuses to pay,
• the society should have an effective and speedy recovery mechanism.

We support that.
A fair member-protection framework should not become a shield for wilful defaulters.

 
What concerns us about the present framework?
The 2026 Rules provide a procedure for Section 154B-29 recovery proceedings, including documentary material, opportunity to respond, hearing and a reasoned decision.

That is an important safeguard.

However, recent Bombay High Court decisions demonstrate that questions can arise concerning:

• the material relied upon by the society;
• whether sufficient documents were made available;
• the nature and scope of the Registrar's summary enquiry;
• whether a dispute requires adjudication beyond that summary process; and
• the availability of interim protection while a statutory revision is pursued.

For example, in Sudhir Mangelal Agarwal v. Deputy Registrar, the Bombay High Court dealt with a challenge where the member had sought a complete ledger relied upon by the society and raised concerns about the material underlying the recovery. The Court ultimately directed the petitioner to pursue the statutory remedy, while keeping the merits open.

In Vidya Niwas Co-operative Housing Society Ltd., the Court explained that the Registrar is not expected to conduct a full-fledged trial under Section 154B-29, but also cannot act mechanically; the Registrar must apply his mind to the society's claim and the defence raised by the member.

These decisions demonstrate why a clear, proportionate and transparent framework is important.

 
The 50% pre-deposit issue

Section 154(2A) imposes a 50% deposit requirement in relation to revisions against recovery certificates, including those under Section 154B-29.

The Bombay High Court in Savitha Dinesh Shetty v. State of Maharashtra clarified an important distinction:

A revision cannot simply be refused at the threshold because the 50% deposit has not been made.

However, without the statutory deposit, the authority cannot grant interim/ad-interim relief or consider the revision on merits.

We recognise the purpose of such a requirement.

A deposit requirement can discourage frivolous proceedings and prevent members from using litigation merely to delay payment.

But there can also be exceptional situations where the underlying liability itself raises a serious and bona fide question.

We therefore request a narrowly defined safeguard.
The competent authority should have the power, in exceptional cases and for recorded reasons, to consider:

• reduction;
• deferment;
• waiver; or
• proportionate interim protection

where a member demonstrates a bona fide and substantial dispute concerning the existence, legality, jurisdiction or fundamental basis of the liability.
 
This should not become a mechanism for habitual defaulters to avoid legitimate payments.

 
Our SIX proposed safeguards

1. TRANSPARENT DEMANDS
Before coercive recovery, members should have meaningful access to the material relied upon, including where applicable:

• statement of account; 
• calculation of dues;
• interest calculation;
• relevant resolution;
• supporting documents;
• applicable statutory provision; and
• applicable Bye-law provision.
  
  

2. EFFECTIVE OPPORTUNITY TO RESPOND
Documents relied upon by the society should be provided sufficiently in advance to allow the member a genuine opportunity to respond.

A hearing should be more than a procedural formality.

The member should be able to meaningfully address the material on which the recovery claim is based.

 
3. PROPORTIONATE DISPUTE CLASSIFICATION
The law should distinguish between:

Undisputed dues
→ speedy recovery.

Accounting/calculation disputes
→ verification and correction where necessary.

Temporary financial hardship
→ structured payment mechanism, subject to safeguards.

Specific service/charge disputes
→ determination of the disputed component.

Substantive legal disputes
→ appropriate adjudication.

Pending proceedings
→ coordinated treatment.

 
4. CLEAR TREATMENT OF PENDING PROCEEDINGS
Where the underlying liability is already before a competent forum, the law should establish a clear mechanism dealing with:

• disclosure of the pending proceeding;
• the disputed component;
• undisputed dues;
• interim protection;
• continuation or suspension of recovery where appropriate; and
• the consequences of the final decision in the underlying proceeding.
   

5. PROPORTIONATE INTERIM PROTECTION
Where a member demonstrates a genuine and substantial dispute concerning the foundation of the liability, the competent authority should have a clearly defined power to consider proportionate interim protection.

This should be subject to:

• recorded reasons;
• safeguards against abuse;
• consideration of the society's legitimate financial interests; and
• appropriate treatment of undisputed dues.
   

6. A NARROW EXCEPTION TO THE 50% PRE-DEPOSIT REQUIREMENT
Retain the 50% deposit requirement as the general rule.

But introduce a narrowly defined exception for exceptional cases involving a bona fide and substantial dispute concerning matters such as:

• jurisdiction;
• existence of liability;
• legal authority for the demand;
• fundamental statutory/Bye-law compliance; or
• another circumstance where insisting on the full statutory deposit would cause manifest injustice.

Any such exception should require a reasoned order and appropriate safeguards. 

What we are NOT asking for

We are not asking for:

❌ abolition of Section 154B-29;

❌ cancellation of legitimate society dues;

❌ permission for members to stop paying maintenance;

❌ automatic stay of every recovery proceeding;

❌ automatic exemption from the 50% deposit;

❌ protection for wilful defaulters; or

❌ unlimited opportunities to delay recovery.

We are asking for BALANCE.
A housing society needs financial discipline.

A member needs access to a fair process.

Both are essential to a healthy cooperative system.
 
Why should every housing-society member care?
You may never receive a Section 154B-29 notice.

But you could one day face:

• an incorrect ledger;
• an interest calculation you genuinely dispute;
• an unexpected major repair demand;
• a disputed charge;
• temporary financial hardship;
• a disagreement over a General Body decision;
• a question concerning the Bye-laws; or
• a substantive legal dispute concerning your liability.
  
  

The question is not:

"Are you a defaulter?"

The question is:

"If you genuinely dispute what you are being asked to pay, does the system give you a fair, proportionate and effective way to resolve that dispute?"

We believe it should.

•  Our vision
• Genuine dues should be recovered.
• Genuine disputes should be fairly examined.
• Temporary hardship should have a proportionate solution.
• Unlawful or unauthorised demands should remain challengeable.
• Societies should be protected from wilful defaulters.
• Members should be protected from unfair recovery.
   

Our appeal to the Government of Maharashtra

We respectfully request the Government of Maharashtra to review the operation of Section 154B-29 of the Maharashtra Co-operative Societies Act, 1960 and the Rules governing its implementation, and introduce appropriate safeguards that preserve both:

THE SOCIETY'S RIGHT TO RECOVER LEGITIMATE DUES
AND
THE MEMBER'S RIGHT TO FAIR PROCESS AND EFFECTIVE PROTECTION.

We are not asking for one side to win.

We are asking for a system where FAIRNESS wins.

FAIR RECOVERY. FAIR PROCESS. FAIR PROTECTION.

Please sign and share this petition.

Because a strong cooperative housing system should protect both the society and its members.