Co-operative housing societies across Maharashtra will have to revise their maintenance recovery policies following the implementation of the Maharashtra Co-operative Societies (Amendment) Rules, 2026, which came into effect on June 18, 2026. The amended rules reduce the maximum interest that societies can charge on delayed payment of maintenance and other dues from 21% to 12% per annum.
The change is expected to impact thousands of housing societies that continue to levy higher interest rates based on earlier General Body resolutions. Legal experts have cautioned that such resolutions may no longer be enforceable if they conflict with the revised statutory provisions, potentially leading to disputes during recovery proceedings.
Adv Shreeprasad M. Parab, Expert Director at the Maharashtra State Co-operative Housing & Apartment Federation Ltd, said, “The amended Rules require societies to align their interest recovery practices with the prevailing statutory provisions. Existing resolutions must be reviewed in the light of the amended legal framework to avoid unnecessary disputes and recovery complications.”
Under the Maharashtra Co-operative Societies Act, housing societies prepare annual budgets covering maintenance, repairs, insurance, municipal taxes, security, housekeeping and other common expenses, which are approved by members during the Annual General Meeting. Members are then required to contribute their respective share.
Legal experts clarified that while the General Body is the highest decision-making authority within a society, its resolutions cannot override the provisions of the Act, Rules or registered bye-laws.
“The General Body is the supreme authority of the society in matters provided under the law, but its decisions must operate within the boundaries prescribed by the Act, Rules and registered bye-laws. Majority approval cannot override statutory provisions,” Adv Parab said.
The Maharashtra Co-operative Societies (Amendment) Act, 2019 defines a member as a defaulter if society dues remain unpaid for three months after a bill or written notice has been issued.
“The classification of a member as a defaulter must be based on the procedure prescribed under the law. Societies should ensure proper billing, communication and documentation before initiating recovery proceedings,” Adv Parab observed.
Before the 2026 amendment, Model Bye-law No. 70 (2014) permitted societies to charge simple interest of up to 21% per annum on overdue payments. However, the newly introduced Rule 106C-12 limits the maximum simple interest rate to 12% per annum, as approved by the General Body.
According to experts, societies that continue charging above the revised ceiling may face legal objections before the Co-operative Court or during recovery proceedings under Section 154B-29 of the Maharashtra Co-operative Societies Act.
Adv Parab said, “The reduction of the interest ceiling is intended to create a balanced approach. While societies must have an effective mechanism to recover legitimate dues, members should not be subjected to excessive financial burdens.”
He further added, “A resolution passed by the General Body cannot acquire a status higher than the law under which the society functions. Once the statutory provision changes, societies are required to bring their resolutions and practices in conformity with the amended provisions.”
Experts have advised societies charging more than 12% interest to convene a Special General Meeting (SGM), revise their resolutions and update billing and recovery procedures to ensure compliance with the amended rules and avoid future litigation.
Source: Mid-day
