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No NOC to sell freehold property

chandigarh Updated: Jan 23, 2013 23:45 IST
Vinod Kumar
Vinod Kumar
Hindustan Times
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Dashing the hopes of the UT administration, the Supreme Court dismissed the special leave petition (SPL) filed by the UT estate office challenging the decision of the Punjab and Haryana high court order that had struck down the requirement of a no-objection certificate (NOC) at the time of sale of freehold property.

The apex court dismissed the plea stating that there was no provision in the laid down rules that called for requiring NOC before the sale of freehold property. The estate office was asked to amend the rules if the authorities intend to make NOC mandatory in such cases.

On December 3, 2012, the UT authorities had moved the apex court seeking stay on the implementation of the high court orders dated May 5, 2012 in which it had termed the practice of the administration demanding NOC before the sale of freehold property as against the rules.

In the petition filed in the apex court, the administration had contended that being custodian of the property, it could impose any condition in public interest to avoid violation of terms and conditions of allotment.

It also said if sale transactions were permitted on the basis of power of attorney, the decision would encourage irregular, fraudulent and illegal sales and also encourage building violations. It was contended that the high court should have appreciated the fact that even after execution of the conveyance deed, the petitioner, as custodian of the properties, could take measures to ensure that the site or building was used for the purpose for which it was allotted and the same was constructed as per the building rules.

The requirement of an NOC from the estate officer for transfer of immovable property ensures transparency in transactions, the UT contended in its petition. It was submitted that the petitioner, being the custodian of the title/allotment documents, was in a better position to ascertain the genuineness of the property. The petition read that Chandigarh was a planned city and all sites/properties in Chandigarh were sold with certain terms and conditions to ensure the city's plan was undisturbed. Therefore, it was essential for the petitioner to be in the loop of every transaction involving immovable property to ensure that the seller discloses all details of the property to the buyer, the petition stated.

UT also said if an illegal construction had been raised or a building used for the purpose other than it was allotted for, action could be taken against the allottee/occupier leading to resumption/cancellation of the site. If the provision of NOC is eliminated, the seller of a resumed building, against which resumption is pending, may sell the same without the knowledge of the petitioner. This will lead to unwarranted litigations for the buyer.

How will it benefits residents?
With the decision, the city residents will not be required to take NOC from the estate office for selling freehold property. At present, for sale/registration or transfer of any property, NOC is required.