Regarding the Levy of Non-occupancy charges from the members of Co-operative Housing Societies
Government of Maharashtra
Department of Co-operation & Textile
Government Resolution No. Sa. Gru.Yo-1094/15165/Pra.kra.317/14-C,
Dated:- 1st August, 2001
Vide:- Department of Co-operation & Textile, Government Resolution No. Sa.Gru.Yo1094/15165/Pra.kra.317/14-C, Dated 9th March, 1995.
By the above referred order dated 9th Mach, 1995, the Government had determined that the levy of non-occupancy charges should not exceed one time the service charges. Some Government Housing Societies presented petitions in the Bombay High Court against the aforesaid Government Resolution and challenged the levy of non-occupancy charges on various grounds. During the course of hearing of Petition No. 1398/96 amongst others, the Hon’ble High Court suggested that the directions regarding the levy of non-occupancy charges should be founded on the scientific basis:- e.g. by considering the rateable value of the premises or the classification of the rental societies etc.; Moreover, the Hon’ble High Court also suggested that appropriate directions should be issued after considering the opinion of the experts and valuers in the said field.
- Pursuant to the aforesaid suggestions made by the Hon’ble High Court, expert advice was sought by the urban Development Department. Urban Development Department suggested that, it would not be advisable to apply the criterion of either rateable value or rent while levying non-occupancy charges, since the Hon’ble Supreme Court in the context of rateable value had ruled in a case (Delhi Municipal Corporation V/s. Diwan Daulatrai Kapoor SC. AIR 1980) that once Municipal Corporation decides the rateable value, it cannot be increased. Since, there is a vast difference in the rateable value of old and new buildings, if non-occupancy charges were levied on the basis of rateable value, it would create dissent amongst the members of old and new co-operative housing societies. Moreover, the rent realised by a member constitutes the income on his investment, for which he pays Income-Tax too. Hence, it would not be advisable to determine the levy of non-occupancy charges on the basis of either of these criterion viz. rateable value or rent.
- Pursuant to the opinion expressed by the Hon’ble High Court in Petition No. 1398/96, the Commissioner of Co-operation and Registrar, Co-operative Housing Societies, Maharashtra State, Pune constituted a committee of the experts from the field of housing and co-operation to study and make recommendations about the levy of non-occupation charges. The said committee made the following recommendations:
1] If a member inducts his near relations into his premises for residential purpose, then he should not be charged non-occupancy charges.
2] Total amount levied and recovered from the members per month or 10% of the amount of rent earned by the member, of these the higher amount should be levied as non-occupancy charges.
3] The levy of non-occupancy charges should not be linked up with the rateable value.
- The Government has made an in-depth study of the opinion of the Urban Development Department as well as the recommendations of the Expert Committee. In view thereof, it is clear and fair enough that considering the difference in the rateable value, it would not be advisable to apply the criterion of rateable value for the levy of non-occupancy charges. Moreover, the rent earned by the member is not identical in all places. In fact, the rent for the same sized premises in the same building is liable to differ. Furthermore, the rent is not levied on any scientific footing. Hence, it would not be appropriate to determine the levy of non-occupancy charges on the basis of the rent earned by the member. As such, with a view to foster the feelings of equality amongst the members of co-operative housing societies and to devise a uniform method and common criterion for the levy of non-occupancy charges by all types of co-operative housing societies in the state, the Government considers it contextually necessary to pass the following orders:-
In the exercise of the powers conferred upon the state under section 79A of the Maharashtra Co-operative Societies Act, 1960 the following orders are hereby passed in the public interest.
1] Government Resolution No. Sa.Gru.Yo-1094/15165/Pra.kra.317/14-C, dated March 4, 1995 stands revoked from the date of issue of this order.
2] The levy of non-occupancy charges shall not exceed 10% of the service charges (excluding municipal corporation/municipality taxes).
3] If the members induct into their premises/flat their near relations such as mother, father, sister, brother, son, daughter, son-in-law, daughter-in-law, brother-in-law, sister-in-law, co-brother-in-law, granddaughter, grandson etc. and such other relations as recognised by the society, non-occupancy charges should not be levied therefor.
4] The said order shall apply to residential and commercial premises/flats in all co-operative housing societies in the state.
5] All housing societies in the state should take action for making appropriate amendment as stated above in their Bye-Laws/Sub-rules. Nevertheless, even if the amendment as stated above is not carried out, they shall not levy non-occupancy charges exceeding the maximum limit as stated in this order, with effect from the date of this order.
6] These orders shall come into force from the date of their issue.
By the order and in the name of the Governor of Maharashtra.
(Mukund T. Kamble)
Under Secretary, Government of Maharashtra
Department of Co-operation and Textile
[© Translated by Adv. Prakash Manohar Chalke]