Chapter II: Properties On The Plots Allotted By Cidco To Co-Operative Housing Societies

By Advocate S. R. Agarwal

Besides leasing out the plots by CIDCO as tender plots as discussed in the earlier Article, plots are allotted by CIDCO to various groups at concessional rates, decided from time to time, including Housing Co-operative Societies formed by the persons of 15 years domicile in Maharashtra.

As per the procedure, when a Society is proposed to be formed by a group of such people or after it is registered, CIDCO is approached for the allotment of a suitable plot to the Society for constructing the flats or apartments for the residence of the members of the Society. A list of such members is attached with the Letter of Allotment or Agreement to Lease of CIDCO as a proof of approved membership.

Initially, when the CIDCO started the allotment of the plots to such Societies in the eighties, there was no restrictive condition about the transfer or assignment of the right, title and interest in the flats by the members; but, subsequently, after a couple of years CIDCO started imposing the restrictions on the transfer or assignment of the flats or apartments, when it was known that the members were profiteering from such transactions. The relevant condition in the Letter of Allotment reads as under:-
“ The Society shall not permit its member to transfer his membership, save and except with the prior written permission of the Managing Director of the Corporation or any officer authorised by him.

Every permission granted by the Managing Director of the Corporation shall be subject to the payment of transfer charges in the manner and to the extent provided in Explanation (iii) to Clause ( vii) of Regulation: 3 of the New Bombay Disposal of Land Regulations, 1975, or as case may be prescribed by the Corporation from time to time.

No member shall sell or otherwise dispose of his/her share in the licensee save and except with the prior permission of the Managing Director of the Corporation.

The Society shall not admit any new member at any time save and except with prior written permission of the Managing Director of the Corporation which permission shall be granted subject to the terms and conditions as may be prescribed by the Corporation including the condition of payment of additional premium at the rate as may be prescribed by the Corporation from time to time”

However, these restrictive conditions are being observed more in the breach than compliance. It is a well-known fact that dummy Societies are formed with the fake membership to get the allotment of the plots from CIDCO at the concessional rate and the flats or the apartments are sold out in the open market at the current rate by misleading the prospective buyers. The recent allotment of plots to the Societies by CIDCO along Palm Beach Road in Navi Mumbai was challenged before Hon’ble High Court, which stayed such allotment and issued injunction. The Builder/Developer went to the Hon’ble Supreme Court by way of an S.L.P., when it observed in its Order dated 01.02.2007 that undue advantage had been shown to the societies and the Developer and ordered the revaluation of the plots by an independent Government valuer to and to compensate CIDCO for any loss that may have been caused to it on account of undervaluation of such plots and till the difference is paid, injunction issued earlier to continue.

In case of most old Societies, the office-bearers are, actually, not aware of these conditions but in a large number of cases, they not only feign ignorance of such restrictive conditions but resist compliance as they apprehend that if they apply to CIDCO at this late stage all the past cases may be reopened and the Society may be burdened with a substantial amount payable to CIDCO as transfer charges for regularising the membership to the Society………

A copy of Cidco Letter dated 18.10.02 permitting mortgage in favour of PNB Housing Finance Ltd. is annexed hereto as a specimen. A copy of CIDCO letter dated 27.07.04 about the transfer of membership in a society is also annexed hereto as a specimen.

Credits: Legal Aspects of Property Transactions in Maharashtra (Book)

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