Notice to Defaulter in a Maharashtra Housing Society: Section 154B-29 and the 12% Interest Cap

Many articles still say Section 101 of the Maharashtra Co-operative Societies Act, 1960. That was the usual route before housing societies got their own set of provisions in 2019. For a co-operative housing society, recovery of society dues now runs under Section 154B-29.

The Maharashtra Co-operative Societies (Amendment) Rules, 2026, notified on 18 June 2026, confirm this. They insert a dedicated chapter for housing societies, and Rule 106C-14 sets out the procedure for a recovery certificate under Section 154B-29.

People still say 101 because older bye-laws, model notices and published material were written before the housing chapter. If your society's own notice template cites Section 101, update it. Citing the wrong section may not be fatal by itself, but it hands the member an easy objection.

The law does not prescribe one mandatory format. What matters is that it is a clear written demand that you can attach to a recovery application later. Rule 106C-14 lists a copy of the society's notice among the documents to be filed, so the notice is evidence and not a formality. A sound notice has these elements:

• Member name, flat number and the period for which dues are outstanding.
• Principal and interest shown separately, head by head: maintenance, sinking fund, repair fund, parking and so on.
• The rate and basis of interest, with the General Body resolution that fixed it.
• A clear last date for payment and how to pay.
• A plain statement that on non-payment the society will apply to the Registrar for a recovery certificate under Section 154B-29.
• Date of issue and proof of service: registered post, hand delivery with acknowledgment, or a delivery record on the member's registered email and WhatsApp number.

A ledger entry that never reached the member is the weakest part of any file. Every amount in the notice should trace back to a bill that was sent, with the date it was sent. If you are unsure how the Act defines dues and defaulter for your case, confirm the wording with your auditor or legal adviser before you send the notice.

For years the common answer was simple interest up to 21% per annum, as fixed by the General Body. Several society blogs still say this.

Rule 106C-12 of the 2026 Rules changes it. Interest on defaulted charges is at the rate fixed by the General Body, subject to a maximum of 12% simple interest per annum. Three practical points follow:

• If your bye-law or last AGM resolution still says 21%, take it back to the General Body and fix a rate within the cap.
• Your billing system must not compound interest or apply the old rate to dues under the new rules. Check how interest is calculated before the next bill run.
• A recovery application needs a certified resolution approving simple interest. The resolution you attach must match what your notice demanded.

Use this as a starting point, and have your auditor or legal adviser check the final wording against your registered bye-laws.

[Society name] Co-operative Housing Society Ltd. Registration No. [___]. Address [___]. Date: [___]. Ref: [___].

To, Shri/Smt. [Member name], Flat No. [___].

Subject: Notice for payment of society dues.

Dear Sir/Madam, as per the society's records, the dues listed below are outstanding against Flat No. [___] as on [date]. For each head, please show the period, the principal in rupees and the interest in rupees: maintenance or service charges, sinking fund, repair and maintenance fund, and other approved charges, followed by the total.

Interest has been calculated as simple interest at [__]% per annum, as fixed by the General Body vide resolution dated [___], from the due date of each bill until [date].

You are requested to pay the total amount of ₹[___] within [__] days of receipt of this notice, by [mode of payment and bank details].

If the dues are not paid within this period, the society will apply to the Registrar of Co-operative Societies for a recovery certificate under Section 154B-29 of the Maharashtra Co-operative Societies Act, 1960, and will claim interest and costs as permitted by law.

If you dispute any entry, please write to the Secretary with details within [__] days so that it can be examined.

Yours faithfully, Secretary, [Society name]. Sent by [registered post / hand delivery / email and WhatsApp] on [date].

Practitioner templates circulated by the ICAI Western India Regional Council use a first, second and final notice, each with a fixed payment window. That is good practice and not a legal requirement, but it builds a clean record.

If the member does not pay, the Managing Committee passes a resolution to start recovery. The process under Rule 106C-14 then runs like this:

• File Form Y-6 with the Registrar, with a court fee of ₹100. State the dues claimed and whether the opponent is a member or a non-member.
• Attach the documents: authority letter, certified updated account or personal ledger, certified resolution approving the charges, certified resolution approving simple interest, proof of fee deposit, and a copy of the society's notice.
• Fix defects fast. The Registrar can give 7 days to rectify deficiencies, and if you miss it the application can be dismissed.
• The Registrar issues notice to the opponent within 15 days of registration, asking for a written statement.
• Hearing and order. The rules say every effort must be made to decide within 3 months of the first hearing. A reasoned order follows, with a recovery certificate in Form Y-7 if the claim succeeds.
• Enforcement. The certificate is recoverable as arrears of land revenue. A revision lies under Section 154, and the certificate is not open to challenge in a civil court.

These come from the document list in Rule 106C-14. They are practical points and not separate legal rules:

• No bill or written demand behind the amount claimed.
• Interest in the notice higher than the General Body resolution, or above the 12% cap.
• A ledger that is not certified, or does not reconcile with the bills sent.
• No Managing Committee resolution authorising recovery.
• A notice that cannot be proved served.
• Mixing a dispute about parking, repairs or a fine with the recovery demand. A messy file invites delay.

In Aspandiar Rashid Irani v. Pasayadan Co-operative Housing Society Ltd., decided in January 2026, the Bombay High Court dismissed challenges to recovery certificates under Section 154B-29. Three points matter for secretaries and accountants.

First, the court held that Section 154B-29 does not prescribe a limitation period, and treated unpaid society dues as a continuing obligation. Second, it said society dues attach to the flat and its occupation, so liability does not vanish when ownership or status changes. Third, on a 21% interest rate fixed by bye-laws, it noted the petitioners had not shown any statutory ceiling being crossed. The 2026 Rules now provide that ceiling, at 12%, for the future.

Do not read this as a reason to wait. Old arrears are harder to document, and members and committees change. File early, with clean records. We covered the judgment in more detail in our post on old maintenance dues.

Update your notice template to cite Section 154B-29 and to show principal and interest separately. Check that your General Body resolution on interest is simple interest within 12%. Make sure every notice leaves with a proof of service attached to the member's file.

A notice and a Form Y-6 file are only as good as the ledger behind them. If your member-wise ledger, bills and interest are in one system, the numbers you quote can be traced to a bill and a payment date, and your file is ready on the day the Managing Committee decides to move.