Recovery of Legal Expenses of Society

Recovery of Legal Expenses of Society

Members demanded to recover Legal expenses as per SGM resolution

A resolution was passed for “Recovery of Legal Expenses of Society” by circulation by the signatories.

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REMARKS OF THE NGO (Disputes Settlement Trust): The legal expenses of the Society has to be borne by the Society and these cannot be recovered from the member concerned until and unless majority of the General Meeting in properly called AGM, put this item in Agenda, then discusses this item in the meeting and then passes a resolution to recover the legal expenses from a particular member.

In spite of the above, if the member agrees to pay, it is well and good. But if the member wants he/she can contest it before the Registrar of Co-operative Societies. The final decision shall be taken by the Registrar of Co-operative Societies.

When an Arbitration case is lodged by the Society and the Society asks for cost of arbitration expenses from the member and if the Arbitrator awards the cost of arbitration expenses in favour of the society, it will be included in the Decree or the Award and the same has to be paid by the member. If the member do not pay, the Society has the right to recover it through recovery proceedings to be instituted by it and then the recovery officer can recover it through legal means and it shall be given to the society along with interest.

In the above letter of the members of the Lovely Home CGHS Ltd, recovery of legal expenses is passed by the General Meeting and there after even if the managing committee do not raise a demand, there is no bar in the decision of the managing committee. The basic reason is that there is no court order which can affect their working or make them liable for contempt of court.



5 thoughts on “Recovery of Legal Expenses of Society”

  1. Jalawar Khan


    Managing Committee of my society has violated many sections of DCS Act and DCS Rules and Bye Laws by spending a lot of money of the members.

    We are 15 members and willing to pay Rs.2000 each to you, if you could help us to get the wrongfully spent money form the pocket of the members of managing committee recovered in favour of the Society. We want to file a case in the RCS also including this or separately also

  2. New Bharat Society Managing Committee

    We seek your guidance, whether such a resolution could be passed in a AGM or SGM ?? Can it be implemented

  3. The general meeting of the society resolved to recover legal expenses from previous managing committee. It was the decision of majority of the members 4 years ago. But till date the managing committee have changed but non of them has recovered the money from previous committee

  4. Sir, I am not clear on the question and answer given.

    In one case 2-3 members grouped together against the society and Managing committee and kept on making some or the other complaints against the society and Managing Committee.

    The notorious group lost the battle against the society. The society in its General Body resolution passed the resolution in majority to recover the legal expenses, advocate fees etc from these 2-3 members. The resolution was passed unanimously and circulated. Nobody has challenged it till date in any of the court of law.

    Can society file recovery proceedings u/s 101 against these errant members… Pls reply. Thx

  5. Krishna Kumar

    Dear Sir,
    Ours is a 230 member society planning to go for redevelopment. 14 Members filed a frivolous case against the managing committee. The case ran for 3 years. Within 2 years, 5 members withdrew from the litigation and 1 member expired. After 3 years, the managing committee won the case. Soon after, during a SPGM, the general body voted to recover the litigation costs from the 8 members. A resolution was passed unanimously and litigation costs were added to the quarterly dues.
    The 8 members say recovery of litigation costs in not in the jurisdiction of the general body and only a court can order it. Can you please guide us on further action.

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