Bombay High Court Upholds Society's Right To Recover Long-Pending Maintenance Dues

Mumbai: The Bombay High Court, on Friday, upheld the right of a cooperative housing society to recover long-pending maintenance and service charges from flat occupants, ruling that such dues are a “recurring and continuing” liability and are not barred by limitation merely due to passage of time.

Petition Dismissed

Justice Amit Borkar dismissed a petition filed by two elderly brothers – Aspandiar Rashid Irani, 96, and Gustad Rashid Irani, 86 – who had challenged recovery proceedings initiated by Pasayadan Cooperative Housing Society, Thane. The petitioners had entered into an unregistered development agreement in 1996 with a developer, under which they received possession of four flats as consideration.

Though they occupied the flats since 2007, they were never formally admitted as members of the society. In 2023, the society raised a demand for arrears of maintenance from 2005, followed by recovery proceedings under Section 154B29 of the Maharashtra Cooperative Societies Act, 1960 (MCS Act).

The petitioners argued that the recovery was barred by limitation, that they were not members or flat owners due to absence of a registered agreement under the Maharashtra Ownership Flats Act (MOFA), and that prior to the 2019 amendment to the MCS Act, recovery proceedings could not be initiated against nonmembers.

Justice Borkar held that Section 154B-29 provides a special and overriding mechanism for recovery of society dues and does not prescribe any period of limitation. “When the legislature creates a special right and provides a special remedy with finality, the normal law of limitation does not automatically apply,” the court said.

On the issue of ownership, the court held that even in the absence of a registered agreement, persons who occupy flats, pay taxes and enjoy benefits of the society can be made liable for dues. If the petitioners acted as promoters under MOFA, they could not avoid their statutory responsibilities, the court ruled.

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