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Shruti Desai

TOWERS, TRANSFERABLE DEVELOPMENT RIGHTS AND UNCERTAINTY

January 3, 2024

TOWER BUILDINGS IN MUMBAI BLISS OR BANE Mumbai was a peaceful place, with sophisticated and cool roads. Tall towers are now new skylines in Mumbai. Jam-packed traffic, roads on ventilators, metro, and coastal roads adorn the site of Mumbai city. Redevelopment of the old building is a booming business now. They are given TDR and additional FSI. But what if this tower falls or collapses? What if the SRA building collapsed and became unsafe? Is there any provision? How such towers will be constructed? What are the rights of flatholders and member’s? Will Insurance save the flat holders’ future? Before answering so many questions let us see the inter-alia relevant provisions of newly framed Development Control Rules for Greater Mumbai. Provisions relating to underdevelopment Control and Promotion Regulation 2034 [ DCPR 2034]. 33(6) Reconstruction of buildings destroyed by fire, or which have collapsed, or which have been demolished under lawful order Reconstruction of buildings that existed on or after 10th June 1977 and have ceased to exist for reasons cited above, shall be allowed to be reconstructed with FSI as per the Regulation No 30(C). Provided that if the area covered under a staircase/lift has not been claimed free of FSI as per the then prevailing Regulation as per the occupation plan, the area covered under staircases/lifts shall be considered while arriving at protected BUA in such cases the premium for entire staircase lift area in the proposed building as per these Regulations shall be recovered. This FSI will be subject to the following conditions: Reconstruction of the new building on the plot should conform to provisions of DP and these Regulations. Reconstruction will be subject to an agreement executed by at least 70 percent of the landlords and occupants each in the original building, within the meaning of the Mumbai Rents, Hotel and Lodging House Rates Control Act, 1947, and such the agreement shall make a provision for accommodation and re-accommodate the said landlord/all occupants in the new building on agreed terms and a certificate from a practicing advocate having a minimum of 10 years’ experience, is submitted confirming that on the date of application, reconstruction, agreements are executed by at least 70% of the landlords and occupants each in the original building with the developer/owner. The Advocate shall also certify that the agreements with occupants are valid and subsisting on the date of application. The Carpet area of residential/non-residential premises may be altered with the consent of occupants. Reconstruction shall be disallowed on set-back areas or areas required for road-widening and such areas shall be handed over to the Corporation. These provisions shall not apply to buildings wholly occupied by warehouses and godowns. If the building is reconstructed with existing FSI/BUA prior to its collapse/demolition, then the requirements of front & marginal open spaces shall be as per the Regulation No.41(5) of these Regulations. Provisions of R.No.41(5) is as under: Provisions in open spaces for plots in Reconstruction/Redevelopment Schemes under the Maharashtra Housing and Area Development Authority Act, 1976, Slum Rehabilitation Authority and Redevelopment Scheme of municipal tenanted properties; in case of DCR 3(5),33(6),33(7),33(7)(A),33(7)(B),33(9),33(9)(A),33(9)(B),33(10), 33(10)(A),33(11),33(15)and 33(20)(A): The following […]

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HIGHLIGHTS OF GUIDELINES RELATING TO REDEVELOPMENT OF CO-OPERATIVE HOUSING SOCIETIES IN MUMBAI

August 5, 2023

State Government of Maharashtra received several complaints from the Housing Societies, Housing Federations and individual members regarding the mismanagement of Co-operative Societies which are in the midst of re-development. By and large, the nature of complaints received in the matter of re-development of Co-operative Housing Societies is as follows: – Not taking members in confidence in the Re-development process; Non-transparency in the Tendering Process; Arbitrary appointment of contractors; Conducting business in violation of the Co-operative Law, Rules and Byelaws; Lack of co-ordination in the work to be done by the Architects and project Consultants; Non-Planning of Re-development Project Report; Not adopting a fair procedure for the finalisation of tenders; Non-Parity in the Agreements to be executed with Developers. Considering the gravity of issues government of Maharashtra is supersession of the Government Resolution dt.3rd January, 2009, issued Revised Guidelines for Redevelopment of Co-operative Society Buildings in Maharashtra- G.R. dated 4th July, 2019 and gave following directions under Section 79(a) of the Maharashtra Co-operative Societies Act, 1960. Government Resolution: – If any Competent Authority has declared the building of a co-operative housing society as ruinous or dilapidated or dangerous for inhabitation or as posing danger to the passers-by or any structure or place in the neighbourhood and the society is eligible to redevelop the building under the Development Control Regulations, then such society in its General Meeting can take a decision regarding re-development of the building. These directions shall apply to all kinds of Redevelopment such as Re-development carried out by a developer under an agreement, Self-redevelopment, cluster redevelopment in Federal Societies, re-development by a group of societies etc. All the procedure prescribed for the appointment of a developer shall apply to all the afore stated kinds of re-development, the appointment of a contractor or the development carried out under an agreement. The decision regarding re-development of the buildings of housing societies shall be taken in the Special General Meeting of the society held as per the registered byelaws of such society in accordance with the procedure prescribed by these guidelines. The Authorised Officer/Administrator appointed by the Registrar cannot take the decision regarding re-development of the buildings of co-operative housing societies. Convening Special General Meeting for the Re-development of Society Building: –It will be essential that not less than 1/5th members of the co-operative housing society whose buildings are to be re-developed should submit an application addressed to the Secretary of the Managing Committee of the society duly elected and constituted as per the bye-laws of the society and under the law for convening the Special General Meeting for deciding the policy in the matter of re-development of buildings belonging to the society, together with their schemes and suggestions regarding re-development of such buildings. The Managing Committee shall take note of such application within 8 days of the receipt thereof and the Secretary of the society shall convene a Special General Meeting of all members of the society within 2 months. Agenda of this Meeting should be circulated to each member of the society 14 days in advance and the acknowledgment thereof should be maintained in the record of the society. Before […]

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CAN A COPARCENER/CO-OWNER SELL HIS/HER SHARE IN A JOINTLY OWNED PROPERTY TO A THIRD PARTY? RIGHT OF PREEMPTION AGRICULTURE LAND VS RESIDENTIAL PROPERTY

December 30, 2022

 Let us first see the provisions of the Transfer of Property Act 1882 and the Hindu Succession Act 1956. Section 22 of The Hindu Succession Act 1956 Section 22 of the Act is as under:- “22. Preferential right to acquire property in certain cases – (1) Where, after the commencement of this Act, an interest in any immovable property of an intestate, or in any business carried on by him or her, whether solely or in conjunction with others devolves upon two or more heirs specified in class I of the Schedule, and any one of such heirs proposes to transfer his or her interest in the property or business, the other heirs shall have a preferential right to acquire the interest proposed to be transferred. (2) The consideration for which any interest in the property of the deceased may be transferred under this section shall, in the absence of any agreement between the parties, be determined by the court on application being made to it in this behalf, and if any person proposing to acquire the interest is not willing to acquire it for the consideration so determined, such person shall be liable to pay all costs of or incident to the application. (3) If there are two or more heirs specified in class I of the Schedule proposing to acquire any interest under this section, that heir who offers the highest consideration for the transfer shall be preferred. Explanation.- In this section, “court” means the court within the limits of whose jurisdiction the immovable property is situate or the business is carried on, and includes any other court which the State Government may, by notification in the Official Gazette, specify in this behalf.” OBITER Smt. Laxmi Debi v. Surendra Kumar Panda and Others by the High Court of Orissa. In this case the submission that Section 22 of the Act would not cover succession in respect of agricultural lands was rejected.It was observed and held that “It is clear that the Parliament had omitted the phrase “save as regards agricultural land” from item No. 5 of the Concurrent List in order to have a uniform personal law for Hindus throughout India, and accordingly, it necessitated the enlargement of Entry No. 5. We have no doubt, therefore, that in view of the change in law, the Act will apply to agricultural lands also, and the decision in AIR 1941 FC 72 (K) would no longer hold good.” The High Court of Judicature at Allahabad, in Smt. Prema Devi vs. Joint Director of Consolidation (Headquarter) at Gorakhpur Camp and Ors. held:- In List 2, Entry No. 18 is as follows:– “Land, that is to say, right in or over land, land tenures including the relation of landlord and tenant, and the collection of rents; transfer and alienation of agricultural land; land improvement and agricultural loans; colonization.” This entry which is in the exclusive jurisdiction of the State Legislature is in the widest term. All laws relating to land and land tenures are therefore, within the exclusive jurisdiction of the State Legislature. Even personal law can become applicable to land tenures […]

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WHAT IS THE PRINCIPLE OF OWELTY ? WHEN DO THE COURTS APPLY IT IN THE CASE OF CO-OWNED PROPERTY?

December 28, 2022

 When is a property jointly owned and cannot be partitioned by metes and bounds what remedy is available to parties? In the case of a property that is jointly held by the family, or which may be inherited by the family which consists of more than one sibling of the deceased how to partition the property? One alternative is division by metes and bounds. This can be done by parties under a registered agreement by executing a Deed of Partition or if there is more than one property then it can be done by executing a Deed of Family Arrangement and followed by executing a Deed of Conveyance or the document which is needed in the matter applicable to the facts and circumstances of the case. It could be of the nature of a Deed of Release, Deed of Relinquishment, Deed of Gift, or Deed of Exchange as the case may be. The same should be done by way of a registered deed. Now when in the following events : for example, a bungalow is jointly owned by the respective families of four brothers who passed away. The legal heirs of three brothers want to sell their undivided share in the property. But one branch of the deceased brother is objecting to the sale; another example, a bungalow cannot be divided or partitioned by metes and bounds because the legal heirs are more, and the area is less; the objecting party does not reside in the said inherited property; In such a case land is locked so even the generation of income from the same. What to do in such a case? In such cases, courts apply the principle of Owelty: what it is? OWELTY : In regard to partitions, the ground upon which the jurisdiction of courts of equity, was maintainable as it constituted a part of its appropriate and peculiar remedial justice. It is, that courts of equity were not restrained, as, courts of law were, to a mere, partition or allotment of the lands and ‘other real estate between the parties according to their respective interests in the same, and having regard to the true value thereof; but courts of equity might, with a view to the more-, convenient and perfect, partition or allotment of the premises, decree a pecuniary compensation to one of the parties for owelty or, equality of partition, so as to prevent an injustice or avoidable inequality.” ‘Lawrence -on Equity Jurisprudenoe (1929), Vol. I pp. 1227, 1228, s. 1147, also contains the following passage:- , The ordinary method of partition is to decree a physical severance of the separate interests, no sale being authorised unless a fair, partition is otherwise impossible, or at least prejudicial. There was no power of judicial sale at common law. The Court ordering physical partition may make its decree effective by compelling mutual conveyances by the parties of their respective interests. Owelty of partition may be awarded to equalize the shares of the parties and may be decreed to be a lien on the excessive allotment. Though only when necessary to a fair partition, and it should be […]

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The chair

MAHARASHTRA CO-OPERATIVE SOCIETY ACT LACUNAE ABUSE  OF POWER AN ANALYSIS AND SUGGESTIONS

October 5, 2022

“Nearly all men can stand adversity, but if you want to test a men’s character, give him power.” Said Abraham Lincoln This aptly applies to the Managing Committee of a society. Once the power comes neighbor becomes your Master. There are many incidents where the committee manipulates bills and contracts, and even in redevelopment cases three honorary office bearers Secretary, Chairman, and Treasurer have weightage in the finalization of the deal. We see litigations and stalling of projects of a housing society. Human tendency is such that they think of self-gain, instead of taking care and executing responsibilities that they have taken with utmost care and truthfulness. Corrupt minds see financial benefits in every deal. They forget that while doing this they prejudice the property and interests of other flat members. Election: 1 With the new election rules, an election is held similarly to the way in which how elections are held in any Assembly and Parliament. Cartel is formed and elections are won. It has killed the neighborhood’s love, respect, and honor. One family and one flat provision are also violated royally. Even if distant relatives or cousins have a cartel. This creates a monopoly in management. Suggestion: Like Multi Co-operative society, provide that same member or any other joint member from one flat cannot contest the consecutive election. The flat owners/member must take a break or drop out from the next election to give an opportunity to other flat owners/members. So, after serving for 5 years the said member/flat owner cannot contest election for immediate subsequent another term. This will reduce the monopoly of a few flat owners and their families, and their friends. For the convenience of the readers and lawmakers reproduced below is the provision of the Multi-State Cooperative Societies Act,2002 below which restricts reelection after two terms. Prohibition to hold the office of chairperson or president or vice chairperson or vice president in certain cases (1) No member of a board shall be eligible to be elected as the chairperson or president or vice-chairperson or vice-president of a multi-state cooperative society if such member is a Minister in the Central Government or a State Government. (2) No member of a board shall be eligible to be elected as the chairperson or president of a multi-state cooperative society, after he has held the office as such during two consecutive terms, whether full or part: Provided that a member who has ceased to hold the office of the chairperson or president continuously for one full term shall again be eligible for election to the office as such. Explanation:- where any member holding the office of the chairperson or president at the commencement of this Act is against elected to that office after such commencement, he shall for the purpose of this section, be deemed to have held office for one term before such election. Proposed Suggestion : A similar principle must be applied to the housing society. A.2 A Managing Committee was disqualified for 5 years, and an administrator was appointed. Managing Committee manages to suppress the facts from members of the society and manages that the […]

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CAN SOCIETY REFUSE TO TRANSFER A FLAT ON AN UNREGISTERED AGREEMENT?

September 7, 2022

CAUTIONARY The Committee of Society should not use the law for harassment but for betterment. We have a question before us. Let us analyze There was a leading case of Kalpita Enclave vs Kiran Builders. This was under Section 7 of the Maharashtra Ownership Flats Act,1963. In this case, two flat purchasers had filed suit under Section 7 of said MOFA, which was objected by the builders. Subsequently, MOFA Section 4 was amended and 4A was inserted. 1[4A Where an agreement for sale entered into under sub-section (1) of Effect of section 4, whether entered into before or after the commencement of the Maharashtra Ownership Flats (Regulation of the promotion of construction, registration sale, Management and transfer) (Amendment and Validating Provisions) Act 1983, remains unregistered for any reason, then notwithstanding anything required to contained in any law for the time being in force, or in any judgment, decree be or order of any Court, it may be received as evidence of a contract in a suit registered for specific performance under Chapter II of the Specific Relief Act, 1963, or of as evidence of part performance of a contract for the purposes of section 53A of the Transfer of Property Act, 1882, or as evidence of any collateral 1882. transaction not required to be affected by registered instrument.]. Subsequently, Maharashtra Textile and Co-operation Ministry came out with a Circular dated 16th October 1991 not to effect transfer by the Society till Stamp Duty and Registration charges are paid. However the unregistered document is not invalid and can be received in evidence as per Section 4A of the MOFA Act,1963. The market value concept came into force on 1st January 1986 and all documents prior thereto are out of the purview of the market value. Concluding Remarks: In current times society is bound to transfer flat upon payment of stamp duty and registration charges. But old documents are out of the scope of the valuation. Documents which are executed up to 31st December 1985 are not liable for market value. Even documents prior to 1986 and subsequent which is unregistered are not invalidated by their non-registration.   SHRUTI DESAI 7th September,2022        

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TRANSFER AND TRANSMISSION OF SHARES IN A COOPERATIVE HOUSING SOCIETY.

March 30, 2022

Today we are going to discuss unique issues relating to a housing society. Human beings when getting even a little bit of power, behave like King-Queen. This is normal psychology. Taking into consideration this psychology and jurisprudence every law is enacted. Now we shall deal with the questions individually WHAT ARE THE PROVISIONS AND REQUIREMENTS FOR THE TRANSFER/TRANSMISSION OF SHARES UNDER MAHARASHTRA CO-OPERATIVE HOUSING SOCIETY LAWS? ( MAHARASHTRA) Following are the relevant provisions of the Maharashtra Housing Society for transfer and transmission of shares and interest in the society. Open membership.— (1) No society shall, without sufficient cause, refuse admission to membership to any person duly qualified therefore under the provisions of this Act and its bye-laws. (1-A) Where a society refuses to accept the application from an eligible person for admission as a member, or the payment made by him in respect of membership, such person may tender an application in such form as may be prescribed together with payment in respect of membership, if any, to the Registrar, who shall forward the application and the amount, if any so paid, to the society concerned within thirty days from the date of receipt of such application and the amount; and thereupon if the society fails to communicate any decision to the applicant within sixty days from the date of receipt of such application and the amount by the society, the applicant shall be deemed to have become a member of such society. If any question arises whether a person has become a deemed member or otherwise, the same shall be decided by the Registrar after giving a reasonable opportunity of being heard to all the concerned parties. (2) Any person aggrieved by the decision of a society, refusing him admission to its membership, may appeal to the Registrar. Every such appeal, as far as possible, be disposed of by the Registrar within a period of three months from the date of its receipt: Provided that, where such appeal is not so disposed of within the said period of three months, the Registrar shall record the reasons for the delay. (3) The decision of the Registrar in appeal, shall be final and the Registrar shall communicate his  decision to the parties within fifteen days from the date thereof: (4) Without prejudice to the foregoing provisions of this section, in the case of agro-processing societies or any other society for which a definite zone or an area of operation is allotted by the State Government or the Registrar, it shall be obligatory on the part of such society to admit, on an application made to it, every eligible person from that zone or the area of operation, as the case may be, as a member of such society, unless such person is already registered as a member of any other such society, into the same zone or the area of operation. Restrictions on transfer or charge on share or interest.— (1) Subject to the provisions of the last preceding section as to the maximum holding of shares and to any rules made in this behalf, a transfer of, or charge on, […]

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CONFLICT OF LAWS:  CAN ARBITRATION OVERRULE RERA?

January 19, 2022

This is an important issue especially when the same tribunal namely MahaRERA has passed two controversial Orders on this issue. Let us see what is the provision of the Arbitration Act and what is an Arbitration proceeding. Arbitration Act : Power to refer parties to arbitration where there is an arbitration agreement.— (1) A judicial authority before which an action is brought in a matter which is the subject of an arbitration agreement shall, if a party so applies not later than when submitting his first statement on the substance of the dispute, refer the parties to the arbitration. (2) The application referred to in sub-section (1) shall not be entertained unless it is accompanied by the original arbitration agreement or a duly certified copy thereof. (3) Notwithstanding that an application has been made under sub-section (1) and that the issue is pending before the judicial authority, an arbitration may be commenced or continued and an arbitral award made. Jurisdiction of RERA Now let us see provisions of The Real Estate (Regulation and Development) Act, 2016.( RERA) Application of other laws not barred.—The provisions of this Act shall be in addition to, and not in derogation of, the provisions of any other law for the time being in force. Act to have overriding effect.—The provisions of this Act shall have an effect, notwithstanding anything inconsistent therewith contained in any other law for the time being in force. Judicial pronouncements: Booz-Allen & Hamilton Inc vs Sbi Home Finance Ltd. & Ors on 15 April 2011  Arbitral tribunals are private fora chosen voluntarily by the parties to the dispute, to adjudicate their disputes in place of courts and tribunals which are public fora constituted under the laws of the country. Every civil or commercial dispute, either contractual or non-contractual, which can be decided by a court, is in principle capable of being adjudicated and resolved by arbitration unless the jurisdiction of arbitral tribunals is excluded either expressly or by necessary implication. Adjudication of certain categories of proceedings is reserved by the Legislature exclusively for public fora as a matter of public policy. Certain other categories of cases, though not expressly reserved for adjudication by public fora (courts and Tribunals), may by necessary implication stand excluded from the purview of private fora. Consequently, where the cause/dispute is arbitrable, the court where a suit is pending will refuse to refer the parties to arbitration, under section 8 of the Act, even if the parties might have agreed upon arbitration as the forum for settlement of such disputes. The well-recognized examples of non-arbitrable disputes are (i) disputes relating to rights and liabilities which give rise to or arise out of criminal offenses; (ii) matrimonial disputes relating to divorce, judicial separation, restitution of conjugal rights, child custody; (iii) guardianship matters; (iv) insolvency and winding-up matters; (v) testamentary matters (grant of probate, letters of administration and succession certificate); and (vi) eviction or tenancy matters governed by special statutes where the tenant enjoys statutory protection against eviction and only the specified courts are conferred jurisdiction to grant eviction or decide the disputes. It may be noticed that the […]

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