NOC not needed to transfer flats built on land leased to developer: SC

The state had relied on the two resolutions of May 12, 1983 and July 9, 1999 to charge a premium as a condition for grant of permission for transfer of flats

The Maharashtra government cannot insist on a “no objection certificate” from the collector for registering transfer of flats in cooperative societies built on lands which are not provided directly by the state, said the Supreme Court in a verdict issued last week.

The land was leased out to the builder, who was the successful bidder. (File image)

The Court was deciding on a plea filed by the state government challenging a decision of the Bombay high court on September 29, 2009 which held that the state could not insist on payment of premium and issue of NOC for registering the transfer of plots when there exists clear proof that the land was allotted first to builders who constructed flats and sold it to purchasers. It was subsequent to that the owners formed a cooperative society.

The HC order came on a petition filed by senior advocate in Mumbai Aspi Chinoy and the Cuffe Parade Residents Association who were residents of 22-storey Jolly Maker Apartments.

Dismissing the state’s appeal, the top court bench of justices BR Gavai and BV Nagarathna in its judgment on Friday said, “Since the land was not allotted to a society but to a builder on lease, who has constructed flats for private individuals, who have subsequently formed a Cooperative Society, the 1983 Resolution and 1999 Resolution would not be applicable to the members of such a society.”

The state had relied on the two resolutions of May 12, 1983 and July 9, 1999 to charge a premium as a condition for grant of permission for transfer of flats.

The 1983 Resolution provided for the grant of land to co-operative societies of different categories at concessional rates.

After the 1983 Resolution, the government came with a modified resolution in 1999 made applicable to the co-operative societies to whom the government lands are sanctioned at concessional rates.

Chinoy had approached the HC questioning the applicability of these resolutions to their plot. He had assailed the letter of June 27, 2000 issued by the collector to the sub-registrar, Bombay City, Old Custom House directing not to register any transaction in respect of transfer of flats in the buildings situated in B.B.R. Block Nos. 3 and 5, Nariman Point and Cuffe Parade, Bombay without obtaining a NOC from the collector.

The residents claimed that their building dated back to the year 1971 when the state government invited offers for the lease of Plot Nos.93, 94, 99, 100 and 121 from Block V Back Bay Reclamation Estate. In response to the said notice, one M/s. Aesthetic Builders Pvt. Ltd. successfully won the bid and constructed flats. Occupation certificate in respect of the said building was issued on December 12, 1975. Two years later, the owners formed a cooperative society called Varuna Premises Cooperative Society Limited.

The bench said, “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 the flat owners was formed.” The judges further vacated stay on direction for refund, as ordered by the high court.

Chinoy claimed that the flat in which he resides was initially sold to one A Madhavan in 1972 and was further sold to one Reshmidevi Agarwal in 1978.

Subsequently, Chinoy entered the picture by entering into an agreement with Agarwal in December 2020 along with five shares in the society.