The entire area of Navi Mumbai was an agricultural land, which has been acquired or being acquired by the State Government, barring the old villages, and entrusted to CIDCO for development, as mentioned earlier. This acquisition of the agricultural land rendered the agriculturists homeless and jobless.
Therefore, the State Government decided in the Year 1990 to grant 12.5% developed land of the acquired land to the owners of the agricultural lands, whose lands have been acquired, known as Project Affected Persons (PAP) for their residential and commercial use, in addition to cash compensation as per the provisions of the Indian Land Acquisition Act. Such allotment is at a very nominal rate and is known as the allotment under 12.5% GES ( Gaothan Expansion Scheme) and the developed plots are allotted to such eligible allottees in the various nodes on the periphery of the old villages in Navi Mumbai, so that they may fit in the socio and cultural environment of village life.
Initially, there was a restriction on the transfer or assignment of the right, title and interest of such properties for a period of 10 years from the date of the allotment. But, subsequently, when the State Government observed that these plots were lying as dumping grounds, as such allottees were lacking the necessary expertise and the finance for the development of the properties on these plots, it relaxed this condition inasmuch as that the transfer and assignment of right, title and interest in such properties have been allowed with the prior written permission of CIDCO on payment of transfer charges, as may be prescribed.
But the problem is that such permission is allowed by CIDCO on the completion of the construction and execution of the Lease Deed as a title deed of the property on such plots, whereas loans are required by the purchasers of flats, apartments in such properties from the financial institutions to make the payments to the Promoter/ Builders/Developers, as per the covenants in the Agreement for Sale entered into by them. This matter was taken up by the Author with CIDCO in the Year 2004 to relax this condition and accept transfer
charges during the construction of the properties so that the buyers could acquire a valid title and financial institutions could advance housing loans by way of the mortgage of such properties. But it seems that CIDCO has taken a too legalistic view that so long Lease Deed is not executed, there is no title in law with the Lessee and, hence, there is no question of any permission for the transfer of the same even on the payment of transfer charges.
A couple of the Banks such as Allahabad Bank and Vijaya Bank and a purchaser Shri Ashok K. Phapale, who provided housing loans in such cases, in their anxiety of getting their lien/charge registered with CIDCO, sent a lien letter to CIDCO after the disbursement of the loans, but CIDCO promptly replied to them as per letters dated 21-7-03, 13-01.04 and 23.03.2005 inter-alia, as under- (copies annexed hereto)
“The above plots have been allotted mainly for the use of Allottees. However, with permission of CIDCO, they can either sell the plot or flats in the building constructed on the Plot. It is observed from the concerned file that the Allottees have not obtained permission from CIDCO which is a must according to the terms and conditions of allotment for selling the Flats …….. and, therefore, any Agreement, if executed for selling of the flats by Allottees is void and not accepted and recognised by CIDCO…… In fact, CIDCO is not going to recognize any such illegal transaction and it is also not binding on CIDCO to keep a lien on the property for the loan sanctioned by you for which CIDCO has not given any No Objection Certificate.”
Nevertheless, this restrictive condition does not come in the way, where such Allottees have formed a Co-operative Housing Society and obtained the allotment of the plots by CIDCO in the name of the Society with their names as the members of the Society as, in such cases, CIDCO outgoing – incoming membership approval of the Society is made available on the payment of transfer charges in the name of the Transferees in case of sale, transfer or assignment of flats by the members of the Society and Mortgage NOC is also made available to the financial institutions on payment of administrative charges of Rs.500/-.
Therefore, the purchasers entering into the transactions for the purchase of the flats / or the apartments or the shops or the offices in such properties do not have a clear title and financial institutions advancing housing loans against the securities of such Properties cannot have a legally enforceable mortgage, without the prior written permission of CIDCO. The Copies of the said Cidco letters dated 21-07-2003, 13.01.04 and 23.3.2005 are annexed hereto as a specimen.
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