₹100-cr loss for state after SC order on fees on govt land

MUMBAI: A recent Supreme Court (SC) order may cost Maharashtra approximately ₹100 crore. The apex court has stated that the collector cannot charge fees (premium) on transfer of flats in cooperative housing societies built on leased land, through auction. The order has prompted the city collector to dash off a letter to the state government seeking its guidance on the matter.

A collector charges premium on ownership transfer of flats in a cooperative housing society allotted on leased land, owned by the state government. The collector issues a no-objection certificate (NOC) for transfer of flats only after receiving the premium from the new buyer. The state revises the premium periodically, as it is a decades old practice.

On September 30, SC dismissed a writ petition filed by the state government against the Bombay high court’s 2009 order.

“We find that in the facts of the present case -- since the land was not allotted to a society but to a builder on lease who has constructed flats for private individuals, who subsequently formed a cooperative society -the 1983 and 1999 resolutions would not be applicable to the members of such a society. We are therefore not inclined to interfere in the present appeals,” stated the order issued by the SC bench of justice BR Gavai and justice BV Nagarathna.

While dismissing the writ petition, the apex court also vacated the stay imposed on the directives of the high court to refund the amount paid as fee (premium) to the collector office with interest. The court had ordered the collector to return the premium with eight per cent interest in the next 16 weeks.

Earlier, senior advocate Aspi Chinoy had petitioned to HC, after the sub-registrar of the island city refused to register his agreement to buy a flat in Jolly Maker Tower, Cuffe Parade, without an NOC from the collector. Chinoy entered into an agreement with Reshmidevi Agarwal to purchase rights to occupy flat no. 211 in the 22-storey building, on December 16, 2000. The sub-registrar refused to accept the agreement, citing the collector’s letter of June 2000.

The Mumbai city collector’s office has approached the state government on the matter. Collector Rajiv Nivatkar, said, “We want to charge fees on ownership transfer of flats in the housing societies constructed on leased land owned by the state government. We have asked the government for further guidance, as we will lose revenue because of the court order.”

Meanwhile, revenue officials are unsure about the impact of the court’s decision. “It will not be an issue if limited to an isolated case, but if it is applicable to other cooperative housing societies built on government owned allotted land, then the state will not only lose its annual revenue – estimated up to ₹100 crores -- but will also have to refund fees collected since 2009, which adds up to a huge sum,” said a revenue official, requesting anonymity.

There are over 3,000 housing societies on collector’s land given on lease and over 22,000 across the state.

We have asked the government for further guidance, as we will lose revenue because of the court order RAJIV NIVATKAR, Collector