The petitioners, members of a co-operative housing society, were alleged to have encroached upon common space by parking a bicycle in the staircase for about 11 years. The Society issued a show-cause notice for the first time on 13-08-2021 and thereafter raised a demand of ₹6,89,220 towards penalty for the period from April 2010 to March 2021. The Deputy Registrar subsequently issued a Recovery Certificate for ₹15,45,730. In revision, the District Deputy Registrar set aside the Recovery Certificate but remanded the proceedings for fresh adjudication. The Bombay High Court noted that the District Deputy Registrar had specifically recorded that the Society had not adopted the new Model Bye-laws and continued to be governed by the old bye-laws. Since Bye-law 169(a), which provides for penalty for encroachment of common areas, formed part of the new Model Bye-laws, the same was not applicable to the Society. No specific provision in the existing bye-laws empowering the Society to levy such penalty was brought on record. The Court further held that, even assuming that the Society had authority to levy penalty, the retrospective levy for 11 years, without any contemporaneous objection by the Society, was arbitrary. The Society ought to have objected to the alleged unauthorised parking when it first came to its notice and, if necessary, imposed penalty prospectively. The Court held that the Society had acquiesced in the parking and could not recover penalty retrospectively after 11 years. The Recovery Certificate having been set aside, there was no justification for remanding the proceedings for fresh enquiry. The petition was accordingly allowed and the amount of ₹3,86,433 deposited by the petitioners for maintaining the revision was directed to be refunded. The Court clarified that the decision was confined to the peculiar facts of the case and did not lay down that a society can never levy penalty for encroachment of common areas or that retrospective levy is prohibited in every case. (WP. No. 11021 of 2026 dt. 25-08-2026)
Yogini Bhupendra Parikh & Anr. v. District Deputy Registrar of Co-operative Societies & Ors. (Bom.)(HC) [www.itatonline.org]
Maharashtra Co-operative Societies Act, 1960.
S.154B(29): Co-operative societies – Recovery of dues – Penalty for encroachment of common space – Parking of bicycle in staircase – Society had not adopted new Model Bye-laws containing Bye-law 169(a) authorising levy of penalty – Recovery certificate issued for ₹15.45 lakh for alleged parking of bicycle for 11 years – Levy of penalty retrospectively without any contemporaneous objection by Society – Recovery certificate set aside – Remand for fresh enquiry held unwarranted – Society could not retrospectively levy excessive penalty after acquiescing in the alleged encroachment for 11 years. [ S.154(2A), Maharashtra Co-operative Societies Act, 1960, Bye-law 169(a).]
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