Society defaulter meaning — the 3-month rule under Section 154B-1

Most societies have a flat whose maintenance is unpaid, and a committee unsure what to call the member. "Defaulter" has a fixed meaning in the Act, and that meaning turns on a date.

What the provision says

Section 154B-1(11) of the Maharashtra Co-operative Societies Act defines a defaulter as a member, flat owner or occupier who "fails to pay the dues of the society within three months from the date of service of bill or notice or due date of payment, whichever is later". Section 154B-1(12) defines dues as the amount payable by a member or flat owner to the society and demanded by the society "by issuing bill or notice in writing", that demand being based on the provisions of the Act, the rules and the society's bye-laws.

Two things follow: there are no dues until the society has demanded the money in writing, and the three months start from whichever is later — the day the bill or notice was actually served, or the due date for payment.

What it means in practice

Take a quarterly bill dated 1 April, served on 10 April, due by 30 April. The later date is 30 April, so the three months run from there and he becomes a defaulter only once they expire at the end of July. Until then he is a member in arrears — not a defaulter.

The difference matters because the Act attaches a consequence to the label. Under Section 154B-10(4), no member is eligible for being appointed, nominated, elected, co-opted or for being a member of a committee if he is a defaulter of the society. Section 154B-23(1)(i) goes wider: the bar applies to "a defaulter of any society", not only of his own. And under Section 154B-23(2), a member who has incurred a disqualification under sub-section (1) ceases to be a member of the committee and his seat is thereupon deemed to be vacant. For a defaulter the bar is not a long one: the five-year bar in Section 154B-23(3) covers only clauses (ii) to (v) of sub-section (1), not default under clause (i). A member who ceased on a ground outside sub-section (3) therefore falls under Section 154B-23(4): unless otherwise specifically provided in the Act, he is eligible to be re-elected, re-co-opted or re-nominated "as soon as such disqualification ceases to exist". Recovery of the arrears is a separate route, under Section 154B-29.

What your committee should do

1. 1Make every demand by a written bill or notice. An oral reminder, a WhatsApp message or a figure read out at a meeting does not create "dues" within Section 154B-1(12).
2. 2Write a clear due date on the bill and record how and when it was served. Without proof of service you cannot show the three-month clock started.
3. 3Count the three months from the later of those two dates before calling anyone a defaulter in the society's records or correspondence.
4. 4Check this before every election or co-option: the disqualification under Sections 154B-10(4) and 154B-23(1)(i) attaches on the date of appointment, nomination, election or co-option.
5. 5Keep recovery separate from the defaulter question — the route for arrears is Section 154B-29, under which the Registrar may, on the society’s application and statement of accounts, grant a certificate for recovery of the amount due as arrears. That section speaks of dues and arrears, not of a "defaulter" at all.