Short Answer

No, a society cannot impose mercantile interest on overdue maintenance without a court order.

Detailed Explanation

Section 123 of the Gujarat Cooperative Societies Act, 1961 prohibits a cooperative society from imposing mercantile interest on overdue maintenance without a court order. This means that the society cannot charge additional interest on delayed maintenance payments without obtaining a legal order from the court.

In practice, if a member fails to pay maintenance dues on time, the society can send reminders and notices to the member to pay the outstanding amount. However, the society cannot unilaterally impose mercantile interest on the overdue maintenance amount without seeking legal recourse through the court.

Real-world Scenarios

• Scenario 1: Mr. Patel, a member of a cooperative housing society, fails to pay his maintenance dues for several months. The society sends him reminders but cannot charge mercantile interest without a court order.

• Scenario 2: A society tries to levy additional interest on overdue maintenance payments without a court order, leading to a dispute with its members and legal complications.

Step-by-step process:

• Society sends reminders and notices to the member for overdue maintenance.

• If the member fails to pay, the society must approach the court to obtain an order allowing the imposition of mercantile interest.

• Once the court order is obtained, the society can charge additional interest on the outstanding maintenance amount.

Reference

• Section 123 of the Gujarat Cooperative Societies Act, 1961: Official PDF