Bombay High Court · Judgment · 07.09.2023
The Registrar cannot order a refund of excess non-occupancy charges
The Bombay High Court held that the Deputy Registrar has no power under Section 154B-27 or Section 79(2)(b) to direct a society to refund non-occupancy charges already collected; the member’s remedy is a dispute under Section 91.
Key points
- Under Sections 154B-27(1) and 79(2)(b), the Registrar can only enforce compliance with the Government’s order capping non-occupancy charges (10% of service charges).
- The Registrar cannot direct a refund of charges collected in the past; that order was without jurisdiction.
- A member can claim the excess through a dispute under Section 91 before the Co-operative Court; how much is within limitation (Section 92) is for that forum to decide.
The facts
The heirs of a nominal member who owned a ground-floor garage used as a clinic complained that the society had charged non-occupancy charges of ₹5,000 to ₹10,000 per month from 1996, well above the limit of 10% of service charges fixed by the State Government’s order of 1 August 2001 under Section 79A. In March 2021 the society resolved to limit the charge to 10% from then on. The Deputy Registrar, on the heirs’ application, directed the society to refund or adjust everything collected towards non-occupancy charges, and the Divisional Joint Registrar dismissed the society’s revision.
What the Court held
The Court set aside both orders. Section 154B-27(1) and Section 79(2)(b) allow the Registrar to ensure that a society complies with orders issued under Section 79A; here, the society had already complied by its March 2021 resolution. A power to order refund of past levies is not found in either provision. A society’s failure to refund an excess levy is a dispute touching its business, so the member’s remedy is a dispute under Section 91 before the Co-operative Court. The Court did not decide whether the claim from 1996 was within limitation under Section 92, and left the members free to file appropriate proceedings.
Why it matters
Members who have paid non-occupancy charges above the permitted limit should choose the right forum: the Registrar can stop an unlawful levy going forward, but a claim for money already paid belongs before the Co-operative Court, and limitation will be a live question. Societies should bring their charges within the Government limit to avoid such claims.
Nineteen-page judgment in English. This page summarises the decision for general information; it is not a substitute for the full text and not legal advice. Check whether the decision has since been appealed, modified or overruled.
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