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For home-workers, CHS bills now 5 times more

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  • karmayog
    From: Ramesh Prabhu Subject: Open Letter to Co-op Minister: Self-employed Professionals will be Crippled by New Model Byelaws 7th
    Message 1 of 1 , May 7, 2013
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       From: Ramesh Prabhu <prabhu.ramesh.cse@...>
      Subject: Open Letter to Co-op Minister: Self-employed Professionals will be Crippled by New Model Byelaws

      7th May, 2013


      Shri Harshvardhan Patil
      Minister for Co-operation, Maharashtra
      3rd Floor, Mantralaya Annexe, Madame Cama Road

      Model Bye-law no. 170(a) will affect many self-employed professionals, cause bitter disputes in Housing Societies  


      Dear Sir,

      Many of the 80,000-odd co-operative housing societies (CHS) in our state have already adopted the new model bye-laws, complying with your department’s strict directions. By this month-end, a majority of them will have adopted them.

      Some new model bye-laws are not necessary in for implementing amended Maharashtra Co-operative Societies Act 1960 and 97th Constitutional Amendment. We humbly request you to suitably modify or delete such bye-laws in the larger interest.

      Official copy of new model bye-laws for CHS: http://tinyurl.com/CHS-Model-Byelaws

      We draw your attention to bye-law no. 170(a) – a new provision that says that if any society member is found to have encroached on common areas, or used the flat for any purpose other than that for which it was allotted, “shall pay an amount equal to five times the monthly maintenance charges, per month with retrospective effect for the period for which such violation is existed.”

      Sir, there are High Court judgments upholding individuals’ right to peacefully carry on professions from their own premises. Many self-employed professionals peacefully working from home e.g. Insurance Agents, Lawyers, Architects & interior Designers, Chartered Accountants, Translators, Tuition Teachers, etc. will be badly hurt by implementation of Bye-law no. 170(a) by their societies.

      Also, in almost all societies, builders have illegally sold stilt-parking spaces and other common amenities to individual flat-owners. Technically, such flat-owners are encroachers. If penalties at the rate of five times the monthly maintenance are imposed, a reign of terror will be let loose in many housing societies.     

      Please consider this example of how common people will be affected.



      Arcadia Heights CHS Ltd. was occupied in April 2003. Mr John D'Costa and three others residing on the first floor of their building purchased “terrace-flats” from the builder, who charged each of them an extra amount of Rs 2 lakh to the small terraces on top of ground-floor shops (to which only they have access from inside the house). The terraces are clearly mentioned in their agreement. However, the managing committee has been recently disputing the right of these flat-owners to exclusively enjoy these terraces, and wants to seal them off.

      Soon after the adoption of the New Model Bye-laws in April 2013, the society issued a general notice for “removal of all encroachments”.

      The society also sent notices of “stopping all professional work from residential premises” to a chartered account, a lawyer and a freelance translator who work from home

      All these seven members were sent bills for April 2013 calculated as per bye-law no. 170(a):

      (i)      Regular Monthly Maintenance bill = Rs 12,000

      (ii)    Penalty for encroachment = Rs 12,000 x 5 times = Rs 60,000

      (iii)   Penalty for encroachment for the last ten years (with retrospective effect) i.e. 120 months = Rs 72 lakhs


      THEREFORE, TOTAL BILL FOR MARCH 2013 – Rs 72 lakhs.

      Naturally, John D’Costa and his neighbours are shocked. They are unwilling to, and incapable of, paying this whopping amount. And so they decide go to High Court. However, until they can successfully get a stay, the society managing committee decides that it cannot reduce its demand and write off their dues.

      Meanwhile, the society sends bill for April 2013, calculated as follows:

      (a)    Regular Monthly Maintenance Bill – Rs 12,000

      (b)   Monthly penalty amount – Rs 60,000

      (c)    Monthly simple interest @ 21% per annum (see bye-law no. 72) on Rs 72 lakhs – Rs 1.26 lakhs



      The monthly interest shown in item (c) will increase in geometric proportion for every month as long as the society members do not pay the penalty amount of Rs 72 lakhs. At 21% per annum, monthly interest continues to mount on Rs 72 lakhs plus Rs 60,000.

      After the third month, the society plans to issues notices proclaiming John D’Costa and his neighbours as defaulters, and initiate recovery proceedings under Section 91 or 101 of the amended MCS Act.

      In other words, a normal housing society has turned into a legal battlefield, thanks to Bye-law no. 170(a).

      Sir, does anybody believe that lakhs of affected citizens of Mumbai will quietly pay five times the monthly maintenance amount as penalty? And furthermore, with retrospective effect? People will naturally fight tooth and nail by every possible means — lawful and unlawful, to avoid paying such crushing penalties! Bye-law no 170 alone will result in tens of thousands of litigations!

      THEREFORE, PLEASE MODIFY OR DELETE THIS INFLAMMATORY PROVISION. Societies that have already adopted them must be directed to immediately call another Special General Meeting and either delete 170(a), or suitably modify it.

      Full text of this vexatious bye-law is quoted here for your reference and action: “All open /common spaces meant for use of all members for eg. staircase, steps, landing areas, parking areas, lift, corridor, and such other spaces, cannot be occupied by any member for his own use. The use of such areas shall be restricted to the cause for which these are meant. Any member found to be violating the above condition by encroachment shall have to vacate the encroachment and further he /she shall pay an amount equal to five times the monthly maintenance charges per month for the period for which he/she has encroached such spaces and further members must not carry out any constructions, structural changes over and above the sanctioned plan without prior permission of the society and concern municipal authorities. Also members must not use the flat /unit for which it was meant /sanctioned. Any member violating the above directives shall pay an amount equal to five times the monthly maintenance charges, per month with retrospective effect for the period for which such violation is existed.”

      Yours sincerely,

      Ramesh Prabhu


      Maharashtra Societies Welfare Association



      Yours Sincerely,


      Ramesh Prabhu,


      Maharashtra Societies Welfare Association


      Copy endorsed to

      1)      Shri Prithviraj Chavan, Chief Minister of Mumbai

      2)      Commissioner of Co-operation and Registrar of Co-operative Societies, Pune

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