Unpaid society dues: how a recovery certificate works, and the High Court's 21% interest ruling

Rules as of 13 October 2026.

When a member or occupier stops paying maintenance, a Maharashtra housing society does not have to file a civil suit. Section 154B-29 of the Maharashtra Co-operative Societies Act, 1960 lets it ask the Registrar for a recovery certificate, which is collected like arrears of land revenue. In January 2026 the Bombay High Court backed that route for dues going back 18 years, with interest at 21%.

Who is a "defaulter" and what are "dues"

The Act defines both in section 154B-1. "Dues" are the amount payable by a member or flat owner to the society and demanded by the society. A "defaulter" is a member, flat owner or occupier who fails to pay the society's dues within three months. The count starts from service of the bill or notice, so a society that never sent bills has a weak case on timing.

The recovery route

1. Bill and demand. The society raises a bill or written notice. Societies usually send reminder notices at intervals. The "three notices" idea is common practice; I did not find it in the section, which speaks of a bill or notice and a three-month lapse.
2. Application to the Registrar. Under section 154B-29(1) the society applies for recovery of its dues, or of its repairs and maintenance cost, with a statement of accounts and prescribed documents. The Registrar can also act on his own if the society does not (sub-section 2).
3. Certificate. The Registrar's certificate is "final and a conclusive proof of the arrears" (sub-section 3). The only remedy is revision under section 154.
4. Collection. The amount is recovered as arrears of land revenue. Section 156 of the Act is titled the Registrar's power to recover certain sums by attachment and sale of property, and a 2019 amendment added a reference to section 154B-29 in clause (e) of section 156(1). I have not read the full text of section 156, so this article does not describe how an attachment or auction is run.

The January 2026 ruling

In Aspandiar Rashid Irani v. Pasayadan CHS (Writ Petitions 8044, 8045, 8046 and 8155 of 2025, decided 16 January 2026, Justice Amit Borkar), four flats were occupied from 1996 under an unregistered development agreement. The society was registered in 2005. The occupants said they were never admitted as members or billed. In 2023 the society demanded arrears from 2005 and started proceedings under section 154B-29. The Deputy Registrar issued four recovery certificates, and the revision was dismissed after the petitioners deposited 50% of the dues.

The High Court dismissed their petitions and held:

• No limitation. "There is nothing in Section 154B-29 which prescribes any period of limitation" (para 19). Non-payment of a recurring charge is a continuing wrong, so old arrears are not barred merely because they are old (paras 22-25).
• Occupiers can be pursued. The society proceeds against the member or the person in occupation (para 20). "Mere lack of a registered agreement does not by itself protect them" (para 27).
• 21% interest. The rate came from the society's bye-laws. The law allows interest to be fixed in bye-laws or by general body resolution, and the court said it could not hold the clause "illegal on its face" (para 28). The judgment writes the rate as twenty one percent without saying "per annum".

The court did not decide whether the petitioners were "flat owners" under MOFA. Section 92 (the dispute route) was held not to govern section 154B-29 proceedings.

Worked example (illustrative)

Take a flat with a ₹3,000 monthly charge unpaid for 10 years (120 months). Principal is ₹3,60,000. If simple interest at 21% a year applies to each month's charge from its due date until the last month, interest comes to about ₹3,74,850, so the claim is roughly ₹7,34,850. This assumes the bye-law rate is validly in force, no lower rate was fixed, and no payments were made. A society's own bye-laws and accounts decide the real figure.

Issue	What to check
Interest rate	Is the rate in your registered bye-laws, or fixed by a valid general body resolution?
Demand	Were bills served? The three-month default clock runs from service.
Disputed items	Only amounts lawfully demanded under the Act, rules and bye-laws count as dues (Vallabhnagar, 3 February 2026, on a transfer premium above the government ceiling)
Stay	The revision in Aspandiar went ahead only after a 50% deposit

What the ruling does not settle

The occupants argued that the Registrar acts as a court under section 156(2), so the three-year limit of Article 137 of the Limitation Act should apply. The judgment records the argument, then holds in para 19 that the Limitation Act is not attracted to section 154B-29. It does not say whether the 21% is simple or compounded, and I did not check whether the order has been appealed. Treat it as the current Bombay High Court position, not the last word.

Mistakes societies make

• Not sending bills, then claiming years of interest
• Charging interest at a rate the registered bye-laws do not support
• Adding items that are not lawful dues, such as an excess transfer premium
• Attaching a ledger summary instead of a proper statement of accounts, which practitioners flag as a common reason for delay

If you are the one being billed

Ask for the bill, the bye-law that sets the interest, and the account statement. If you disagree with specific items, say so in writing and keep proof. A certificate under section 154B-29 can be challenged only by revision, so the time to object is before it is issued.

This explains the law and is not legal advice. Take an advocate's view on your case.