Experts want govt to clarify order on resale of flats on collector leased land

It is a known fact that a large number of residential and commercial buildings in both South Mumbai and the Western and Eastern Suburbs have come up on collector leasehold land and experts say the government will need to clarify the judicial order at the earliest to clear the ambiguity

A recent Supreme Court order, in the Jolly Maker Tower case, stated that no transfer premium needs to be paid to the collector for the resale of flats in a building constructed on collector leased land. This has raised concerns not only for Maharashtra revenue officials as the state government earns over '100 crore through such transfer premium, but it has also become a point of discussion for legal brains who have interpreted the order differently, resulting in confusion as to whether the order is a blanket ruling regarding transfer premium payment for all properties on collector/government leasehold land in the city.

It is a known fact that a large number of residential and commercial buildings in both South Mumbai and the Western and Eastern Suburbs have come up on collector leasehold land and experts say the government will need to clarify the judicial order at the earliest to clear the ambiguity.   

Also read:  Mumbai: ‘Do industrial estates, units come under ambit of RERA?’

Stuti Galiya

mid-day reached out to advocate Shreeprasad Parab—expert director, Maharashtra State Housing Federation—and a solicitor, Stuti Galiya, to interpret the order, and both differed in their views. The former believes that the order in Jolly Maker case will be applicable to all leasehold properties allotted by the collector to developers directly at no concessional rate after which a co-operative housing society is formed, they will not have to pay the transfer premium charges to the collector for getting an NOC, and the order won’t be applicable in cases where such land has been leased out to a co-operative society at a concessional rate instead of a developer, wherein they will continue to pay such transfer premium charges to the collector/government for the NOC.

However, Galiya is of the view that the apex court order is limited to the Jolly Maker case only and it won’t have any impact on any other such co-operative societies that have come up on collector/government leasehold land.

Shreeprasad Parab of Maharashtra State Housing Federation

The solicitor said, “After the verdict of the apex court on September 30, there have been differing interpretations amongst professionals regarding requirement of no-objection certificate and payment of transfer premium on collector leasehold land in the city, which is creating confusion. According to me, the judgment is specific to the particular case, based on specific facts which need to be distinguished. The judgment cannot be considered a general ruling abolishing the requirement of no-objection certificate and payment of transfer premium on all collector/government leasehold land across the city. 

The land in respect of which the judgment has been delivered is a reclaimed foreshore land, where special permission for development was issued under the provisions of Section 295 of the Maharashtra Land Revenue Code, 1966. Also, the allotment of the land to the builder was done by the government in 1972. This is much prior to the date when the Ministry of Revenue issued a circular with respect to the payment of transfer premium initially in the year 1983 (and subsequently revised in the year 1999). Finally, the court has observed that both the 1983 and 1999 circulars issued by the ministry are specific to lands allotted to co-operative housing societies at concessional rates, where transfer premium can be charged. The court distinguished the case before it, considering that the builder was allotted land through a bidding process which was initiated by the state government. The court has nowhere denied the right of the land revenue authorities to collect transfer premium and has only distinguished the case before it on the basis of specific and peculiar facts.”

State Housing Federation reacts 

Advocate Parab said, as per the Land Revenue Code, the ownership of the entire land in the state vests on the state and citizens are the occupants or its holders. "The same concept is reflected in our Property Card or 7/12 extract. As per Section 38 of the Maharashtra Land Revenue Code, It shall be lawful for the collector at any time to lease under grant or contract any unalienated unoccupied land to any person, for such period, for such purpose and on such conditions as he may, subject to rules made by the state government in this behalf, determine, and in any such case the land shall, whether a survey settlement has been extended to it or not, be held only for the period and for the purpose and subject to the conditions so determined. The grantee shall be called a government lessee in respect of the land so granted. As per Section 40 of the Code, the state government may dispose of any land, on such terms and conditions as it deems fit and Section 295 of the Code specifically deals with the disposals of lands and foreshore.” 

100
The amount in crore rupees that the state stands to lose if collector can’t charge transfer premium of resale of flats on leased land

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