Rs 15.45 lakh penalty for a bicycle in a staircase: Bombay High Court ends the recovery — bye-law 169(a) applies only once a society adopts it

What the Society did

At Dhanlakshmi Co-operative Housing Society Ltd., a member's bicycle stood in the staircase, between floors. The Society called that an encroachment on common space and raised a penalty. The bill dated 6 October 2021 levied Rs 6,89,220 as penal rent for April 2010 to March 2021. An advocate's notice of 19 June 2024 demanded Rs 10,74,107. On Recovery Application No. 8 of 2024 the Deputy Registrar, by order dated 4 April 2025, issued a Recovery Certificate for Rs 15,45,730 — against a bicycle the court was told was worth Rs 11,000. Discrepancies between the sums claimed and certified are what led the District Deputy Registrar to order an auditor's verification.

The route through the authorities

The two members, Yogini Bhupendra Parikh and Sejal Bhautik Patel, withdrew an earlier writ petition with liberty to revise under Sections 154B-29(3) and 154, depositing Rs 3,86,433 with the Society under Section 154(2A) to maintain the revision.

In Revision Application No. 6 of 2026, the District Deputy Registrar by order dated 8 April 2026 partly allowed the revision. He set aside the Recovery Certificate, but remanded the matter to the Deputy Registrar, G/North Ward, for a fresh hearing and auditor's re-examination. The High Court saw that remand as another round of lengthy litigation, when the proceedings deserved a full stop. The writ petition (No. 11021 of 2026) challenged only that remand. Sandeep V. Marne, J. decided it on 25 August 2026.

Bye-law 169(a) did not bind this Society

The Deputy Registrar's order rested solely on bye-law 169(a) of the new Model Bye-laws, which lets a society recover five times the monthly maintenance charges, month by month and retrospectively, where a member encroaches on common space. The District Deputy Registrar had recorded that the Society was still working under its old bye-laws and had not got the new model bye-laws approved. The High Court treated that finding as decisive: "This would mean that provisions of bye-law 169(a) would not apply to Respondent No.3-Society."

The Society argued bye-law 50(a) of the old bye-laws was to the same effect; the court said no such provision had been placed before it. Since the Deputy Registrar's order rested only on 169(a), the High Court held it was rendered illegal and ought to have been set aside in its entirety, with no warrant for a fresh enquiry.

A second, independent ground

Even if 169(a) applied, the court added, a penalty of about Rs 15 lakh levied retrospectively for 11 years was arbitrary. The Society raised no objection between 2011 and 2020; by that inaction, the court held, it acquiesced in the parking and was estopped from charging the penalty.

The limit of the ruling

The court said it decided the case on its unique facts. It does not mean societies cannot levy a penalty for encroachment on common areas, and it does not prohibit a retrospective levy. What it does require is timeliness: a society that objects late must levy the penalty prospectively, and a committee invoking 169(a) must act with alacrity, so the member can correct course.

What the court ordered

• •The remand (Direction No. 3 of the 8 April 2026 order) is set aside.
• •The District Deputy Registrar's setting aside of the 4 April 2025 order is confirmed.
• •The Society must refund Rs 3,86,433 to the petitioners within four weeks.

What a committee should check

• •Which bye-laws govern you. Confirm the new model bye-laws have actually been adopted and approved. If not, 169(a) is not your authority.
• •The exact provision. Do not assume an old bye-law matches; the Society here could not show one.