An interesting question was asked on Twitter on collectors’ land. The question was whether it is legal to ask for transfer charges by Collector Mumbai for issuing NOC of flats in Society standing on land belonging to Collector?
In Mumbai Collector owns nearly 1282 properties on which development is permitted and sanctioned on Lease. As per the latest data available about 517 properties’ Lease has been expired and in Mumbai leases of about 149 properties have been expired.
The government has given this land on meager yearly lease rent. So the Government prescribed a policy for the increase in ground rent on 5th October 1999. Which was challenged and directions were given to give a hearing to those whose lease has been expired and also give an opportunity to convert occupancy to Class II occupants on one-time payments as specified in the Circular. The lease of land for purposes other than Agriculture is granted under provisions inter-alia of the Maharashtra Land Revenue Code, 1966 (“ Said Code” ) and the Maharashtra Land Revenue (Disposal of Government Lands) Rules, 1971 ( Said “ Rules”) .
The Said Rule B-26 -27 empowers Collector to Grant Land for Residential use. It reads as under
B. Grant of land for residential use
26. Disposal of building sites :- (1) Except as otherwise provided in these rules, the occupancy rights in building sites shall be disposed of by the Collector under Section 20 read with Section 31 by publication to the highest bidder, unless for reasons to be recorded in writing, the Collector thinks that in any particular case, there is reason for granting the land without auction. (2) Where a building site is to be disposed of without auction under sub-rule(1), the Collector shall dispose of the site in occupancy right under Section 20 read with Section 31 on inalienable tenure [If the occupancy price determined under sub-rule(3) does not exceed Rs. 25,000 and with sanction of the Commissioner, if the occupancy price exceeds Rs. 25,000 but does not exceeds Rs. 1,00,000 and with the sanction of the State Government, in other cases.] (3) The Collector shall determine the occupancy price of the site, regard being had to the following factors that is to say, (a) the sale prices of similar lands in the locality; (b) the situation of the building site; (c) the availability of, and demand for, similar lands; (d) factors which are taken into account in determining the value of land under the Land Acquisition Act, 1894.
27. Grant of land housing schemes :-Building plots may be granted by the State Government for various housing schemes undertaken by any housing board, local authority or co-operative housing society constituted under any law for the time being in force, in occupancy rights under Section 40 on inalienable and impartible tenure on payment of such concessional occupancy price as the State Government may, from time to time fix, regard being had to the nature of the scheme, and in the case of a co-operative housing society, to the income of the members, thereof, such income being ascertained after making such inquiries as the State Government may think fit to make in this behalf: Provided that, any land being land situated outside the limits of the Bombay Suburban District, in the cities of Nagpur, Aurangabad and Poona and any town having a population on one lakh or more, may be granted by the Collector under Section 20 read with Section 31 to any co-operative housing society if the occupancy price of such land determined under sub-rule(3) of Rule 26 does not exceed Rs. 2 [1,00,000], and with the sanction of the Commissioner if the occupancy price so determined, exceeds Rs. 1 [1,00,000] but does not exceeds Rs. 3 [2,50,000].
The Occupancy is transferable, subject to the provisions contained in section 72 and to any conditions lawfully annexed to the tenure, and save as otherwise provided by law, be deemed a heritable and transferable property as per Section 36 of the Said Code.
Government Lands and Foreshore
294. All unoccupied lands within the City of Bombay, and every unoccupied portion of the foreshore, below the high water mark, shall be deemed, and are hereby declared to be, the property of the State Government, subject always to the rights of way and all other rights of the public legally subsisting. For the avoidance of doubt, it is hereby expressly declared that nothing in this section shall be taken to affect the right of the State Government to unoccupied lands declared to be the property of the State Government by any earlier law.
295. It shall be lawful for the Collector, with the sanction of the State Government, to dispose of any lands or foreshore vested in the State Government in such manner and subject to such conditions as he may deem fit ; and in any such case, the land or foreshore so disposed of shall be held only in the manner, for the period and subject to the conditions so prescribed.
Transfer of lands, etc.
296. (1) Whenever the title to any land, house or other immovable property, subject to the payment of land-revenue to the State Government, is transferred or assigned, the person transferring or assigning the same and the person to whom the same is transferred or assigned, shall respectively cause notice of such transfer or assignment to be given to the Collector. (2) Such notice shall be given within twenty days after execution of the instrument of transfer or assignment, or after its registration if it be registered, or after the transfer or assignment is effected, if no instrument is executed. (3) In the event of the death of any person in whose name the title to any property is entered in the records of the Collector, the person to whom such title is transferred as heir or otherwise shall cause notice thereof to be given to the Collector within one year from such death.
297. (1) The notice shall be in the form either of Schedule H or Schedule I as the case may be, and shall state clearly all the particulars required by the said form.
(2) It shall be accompanied, whenever the Collector shall deem fit so to require, by the instrument of transfer if any, by a plan to be furnished of the land which is the subject of the transfer or assignment, drawn and attested by such officer as the Collector may direct and by a certificate that public notice has been given of the transfer or assignment by the beat of bataki.
The question arises What is Premium?
The answer is given in Section 2 (19) which defines term ” land revenue” means all sums and payments, in money received or legally claimable by or on behalf of the State Government from any person on account of any land or interest in or right exercisable over land by or vested in him, under whatever designation such sum may be payable and any cess or rate authorised by the State Government under the provisions of any law for the time being in force; and includes premium, rent, lease money, quit rent, judi payable by an Inamdar or any other payment provided under any Act, rule, contract or deed on account of any land;
Who are the Occupants?
Its answered in Section 29.Of the Grant of land Classes of persons holding land. (1)There shall be under this Code the following classes of persons holding land from the State, that is to say (a)Occupants – Class I, (b)Occupants – Class II, (c)Government lessees.
(2)Occupants – Class I shall consist of persons who (a)hold unalienated land in perpetuity and without any restrictions on the right to transfer ; (b)immediately before the commencement of this Code hold land in full occupancy or Bhumiswami rights without any restrictions on the right to transfer in accordance with the provisions of any law relating to land revenue in force in any part of the State immediately before such commencement; and (c)if they hold land in Bhumidhari rights in any local area in Vidarbha which has not been excepted under section 150 of the Madhya Pradesh Land Revenue Code, 1954 and are permitted hereafter subject to rules made by the State Government in this behalf, on payment of a premium (not exceeding three times the assessment payable in respect of such land) to be included in Occupants- Class I.
(3)Occupants- Class II shall consist of persons who, (a)hold unalienated land in perpetuity subject to restrictions on the right to transfer ; (b)immediately before the commencement of this Code hold (i)land in Vidarbha in Bhumiswami rights with restrictions on the right to transfer or in Bhumidhari rights under the Madhya Pradesh Land Revenue Code, 1954; and (ii)Elsewhere hold land in occupancy rights with restrictions on the right to transfer under any other law relating to land revenue; and (c)before the commencement of this Code have been granted rights in unalienated land under leases which entitle them to hold the land in perpetuity, or for a period not less than fifty years with option to renew on fixed rent, under any law relating to land revenue and in force before the commencement of this Code; and all provisions of this Code relating to the rights, liabilities, and responsibilities of Occupants- Class II shall apply to them as if they were Occupants-Class II under this Code.
The question raised on Twitter had also come up before the Bombay High Court in the matter of Aspi Chinoy Vs State in which the Senior Counsel of the Bombay High Court challenged the demand by the collector of transfer charges on the collector’s Land, in which the Division Bench held that the State Government has no power to demand Transfer Charges
The said order was challenged by State and Supreme Court has given the Stay on Bombay High Court Division Bench Order and the matter is pending for final disposal.
Thereafter State Government has issued yet another guideline and Circular and fixed transfer charges of Collectors’ land which is as under :
Now those Societies who want to avoid payment of hefty transfer charges may choose to convert their holding on payment of premium as stipulated in the above circular. In the mean time the issue of entitlement power and authority of Collector to charge per square feet Transfer Charges is sub-judice and flat purchasers have no option but to pay. Whether all will get the refund of these payments if Supreme Court finally decides the answer is in negative because it is Right in Persona and not Right in rem . Hence each affected party has to challenge or collectively can file Writ challenging such a levy of premium.
In State of Maharashtra vs Aspi Chinoi, Supreme Court
Collector objected to the registration of an Agreement for Sale for want of NOC from the Collector of Mumbai.
Supreme Court held while assessing the facts as under (Please note this Judgement may not be applicable to all the cases. It is applicable when facts are similar to the present case)
The allotment of the plot in question was made to the said builder in the year 1972. As per the said allotment, the plot was to be leased for a period of 99 years, renewable for another 99 years on the same terms, but on revised ground rent. The said terms and conditions would reveal that the licensee was required to construct a building on the said plot costing not less than Rs.10 lakhs. The use of the building was for private residence only. As per Clause 13 of the said terms and conditions, the licensee was to be put in possession of the plot on his executing the Agreement to Lease. Undisputedly, after the said allotment in the year 1972, the builder was put in possession of the plot and he constructed a building thereon. The flats were sold to various parties. An occupation certificate in respect of the said building was also issued on 12th December 1975. In the year 1977, the flat purchasers formed a Co-operative Society called Varuna Premises Co-operative Society Ltd. After the land was allotted to the said builder on a lease basis in the year 1972, the 1983 Resolution came into effect. The 1983 Resolution provided for the grant of land to cooperative societies of different categories on concessional rates. After the 1983 Resolution, the Government noticed that, with the passage of time and the policy being nearly 15-16 years old, it was necessary to modify and revise the said policy. It will be relevant to refer to the Preamble of the 1999 Resolution:
“Government Lands are sanctioned in favour Co-operatives Housing Societies under the provisions of Section 40 of the Maharashtra Land Revenue Code 1966 and the Maharashtra Land Revenue (Allotment of Government’s Land) Rules 1971. From time to time the Government has laid down policies supplementary to the said provisions by the Government orders mentioned above. Some of the terms and conditions of those orders have become out dated and it has become inevitable to make modifications/amendments therein. As the present policy is nearly 15-16 years old, a proposal to modify/revise the same was under consideration of the Government. In that behalf the Government has now decided that in suppression of the above mentioned orders, the revised policy as under should be adopted in respect of sanctioning lands to Co- operative Housing Societies in Maharashtra State.” It was observed that the 1999 Resolution is in continuation of the 1983 Resolution, which is applicable to the cooperative societies to whom the government lands are sanctioned on concessional rates.
Though Section 40 of the Code saves the power of the Government with respect to the disposal of lands, Section 295 of the Code specifically deals with the disposal of lands and foreshore. It is not in dispute that the land in question is reclaimed land and therefore, is covered under Section 295 of the Code. It is also not in dispute that though in accordance with the 1983 Resolution and 1999 Resolution, the State Government is empowered to allot land to the co-operative societies of different categories on concessional rates, the land in question has been allotted to the builder who had participated in the bid in response to public notice. The land was allotted to the said builder after he was successful in the bidding process. As per the said terms and conditions, which specifically deal with lease of plots from Block V Back Bay Reclamation, the said builder was required to construct the building on the said land costing not less than Rs.10 lakhs and to sell the same for the purpose of private residence. It is after the said builder sold the flats to the individual buyers, they formed a Co-operative Society in the year 1977 in which Society the ownership of the land came to be transferred by the said builder. It could thus be seen that, the present case is not a case where the land is allotted to a Co-operative Society by the Government. The land was leased out to the builder, who was the successful bidder and after the ownership of flats was transferred to the private individuals, a Society of flat owners was formed.
WHY THE COURT SAID NO NOC OF COLLECTOR WAS REQUIRED IN THIS CASE :
The court observed that in the present case since the land was not allotted to society but to a builder on a lease, who has constructed flats for private individuals, who have subsequently formed a Co-operative Society, the 1983 Resolution and 1999 Resolution would not be applicable to the members of such a society. In view of this observation, the Supreme Court directed Appellant Municipality to refund the amount.
4th January 2023
Youtube link: https://youtu.be/YcyLbeNZDb4