Chapter VI: Properties On The Residential plots Allotted To APMC Traders

By Advocate S. R. Agarwal

With a view to decongesting Mumbai City, the State Government lured the trading community from Greater Bombay, mostly concentrated at Dadar, to shift to Navi Mumbai by offering shops cum godowns, known as Gala’s, at APMC, Vashi, and residential plots of 300 sq.mtrs or so for their residence in Navi Mumbai. Since such allotment has been made by CIDCO to them at a subsided rates, the allotment letters of such Plots, mostly allotted in Sector – 12, or Sector -28, in Vashi or Kalamboli or New Panvel (E), contain restrictive condition against the transfer and / or assignment of right, title and interest in such properties. The relevant condition in the Allotment Letters of such plots, inter-alia, runs as under:-

“Transferor assign of rights : The intending lessee shall not be allowed to transfer or assign his rights and interests in or benefits under the Agreement, executed between him and the Corporation in respect of the plot allotted to him as a result of acceptance of his offer for this plot except to the provision, that it may be permitted only within eligible APMC Group (those registered with Bombay APM as carrying on their business/trades in New Bombay after shifting of the market) subject to the payment of transfer fee and charges under CIDCO’s rules framed from time to time.

In the Lease Deed, such restriction is contained Condition (O) as under :- Not to sell, assign, mortgage, underlet on otherwise transfer wholly or partly the demised premises or his/ their/its interest therein or part wholly or partly with the possession of the demised premises or permit any person to use wholly or partly the demised premises PROVIDED THAT nothing contained herein shall apply if the Lessee shall perform to the satisfaction of the Lessor the following conditions :-

(i) BEFORE TRANSFERING THE DEMISED PREMISES, the Lessee shall pay to the Lessor one half of the difference between the declared premium (i.e. premium calculated at such rate or rates as may determined by the Lessor from time to time) and the premium paid by the Lessee to the Lessor, for obtaining the lease of the demised land, subject to a minimum of Rs.5,000/-

(ii) In the instrument by which the Lessee shall transfer the demised premises, the Lessee shall impose upon the person to whom the demised premises are so transferred to perform and observe to the Lessor all the conditions and covenants of the lease granted to him including this covenant.

(iii) The Lessees does sell, assign, underlet or otherwise transfer wholly or partly the demised premises or his/ their/its interests therein or part wholly or partly with the possession of the demised premises or permit to use wholly or partly the demised premises, only to a person who has shifted his business and or trade in the agricultural produces from Greater Bombay to New Bombay and is carrying on such business or trade in a shop or place allotted to him by the lessor or the Bombay Agricultural Produce Market Committee, in New Bombay, under the permission or licence grantable to him under the provisions of the Maharashtra Agricultural Product Marketing (Regulations) Act, 1963 (Mah. XI of 64) or has been carrying on such business or trade in Greater Bombay and intends to shift such trade or business in New Bombay to be carried on with the permission or licence grantable under the Maharashtra Agricultural Produce Marketing (Regulations) Act, 1963, (Mah. XI of 64).”

In view of the said restrictive condition, any purchaser of a Flat or an Apartment in the property constructed on such plots will have a clear title only on receipt of CIDCO permission on payment of transfer charges and the financial institutions, advancing loans for the purchase of a Flat or an Apartment in such properties, will have the valid mortgage only after such transfer approval from CIDCO for the Flat or Apartment in question and then only they could obtain Mortgage NOC from CIDCO in their favour. The CIDCO transfer permission, wherever obtained, contains the simple stipulation in respect of future transactions; meaning thereby that such transfer charges will be payable at the time of each transfer or assignment.

But again the same problem arises as discussed in the earlier Article that CIDCO grants permission for such transfer or assignment only on the completion of the construction and execution of the Lease Deed. Therefore, there may not be a valid title in favour of the purchaser for an individual Flat or Apartment under construction and, therefore, Financial Institutions advancing loans for purchase of such Flats and Apartments under

construction, will not have a valid mortgage in the absence of such permission from CIDCO, except in the cases, where a Society has already been registered and incoming-outgoing approval has been obtained from CIDCO on payment of transfer charges. However, this restriction may not come in the way in case of a resale of a Flat or an Apartment in such Properties where the Lease Deed has been executed and CIDCO transfer permission is obtained for the sale thereof. Further, the original Allottee of the Plot will not be required to obtain CIDCO permission to mortgage the same to the Central / State Govt, Employer or approved institutions by CIDCO to avail of the loan to raise the construction on such Plots, as it is permitted by the rules of CIDCO by way of general policy.

Copies of Cidco letter dated 19.10.04 permitting transfer of the unit and another letter dated 28.05.2003 permitting mortgage in favour of LIC Housing Finance Ltd. are annexed hereto as a specimen.

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

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