Leasehold to freehold conversion: SC gives MHA, Chandigarh admn 3 months to take decision

The Chandigarh admn had first sent the conversion proposal to the MHA in April 2021 on the pattern of the residential policy of 1996; since then it has sent four reminders, but a decision is pending

The Supreme Court has given three months to the Chandigarh administration and the ministry of home affairs (MHA) to decide on allowing conversion of commercial and industrial leasehold properties to freehold.

Chandigarh has 6,621 commercial and 1,451 industrial plots on leasehold, which allows occupation for a limited period, mostly 99 years, with government agencies holding the ownership rights. (iStock)

On August 29, the Supreme Court had summoned Union home secretary Ajay Kumar Bhalla in court on September 16 if a decision on the issue was not taken.

After Bhalla was summoned, UT administrator Banwarilal Purohit on September 6 had held a press conference, announcing that the decision lied in UT’s domain and will be arrived at soon.

Later, Purohit sent UT adviser Dharam Pal to Delhi to discuss the issue, but a consensus could not be arrived at and MHA opted for seeking exemption from personal appearance of the home secretary at the September 16 hearing.

“This being a major policy decision, the matter is being considered by MHA as per the established legal procedure and consultation with all stakeholders concerned,” the MHA said in court, seeking three more months to examine the matter, which was eventually allowed.

Chandigarh has 6,621 commercial and 1,451 industrial plots on leasehold, which allows occupation for a limited period, mostly 99 years, with government agencies holding the ownership rights. Apart from legal complications, the allottees struggle with their sale and purchase, and raising a mortgage when needed, issues normally not associated with freehold properties where the allottee is the real owner.

Earlier in July, the UT had put the onus on the Centre for delay in reaching a decision on the issue. The UT had first sent the conversion proposal to the MHA in April 2021 on the pattern of the residential policy of 1996. Subsequently, it even sent four reminders to MHA, but a decision was still pending, UT had told the court.

In September last year, the apex court had directed the administration to constitute a committee to review and streamline the processes of sanction of mutation, grant of occupancy certificate, no-objection certificate and other citizen-centric requirements, including calculation of unearned profit under the 1973 or 2007 rules.

The dispute before the SC was taken up by the Estate Office against a consumer court order in which it was penalised on the complaint of a city resident on an issue related to allowing conversion of leasehold property to freehold.

The court had ordered that the committee would submit its report to the administrator and the UT administration. In compliance with the order, the administrator constituted the committee on October 5, 2021.

The committee had made the first set of recommendations in February and submitted the second set of suggestions recently in July. Several amendments in property-related matters have been made since the first set of recommendations, and UT has submitted four action-taken reports in March, April, May and July before SC, while putting the onus on the Centre for delay in resolving some key issues.