Chapter VIII: Properties On The Plots Alloted By The Collector

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By Advocate S. R. Agarwal

Sale and resale transactions are taking place, frequently, in respect of the properties on the plots allotted by the Collector on a leasehold basis, without caring for the compliance of the terms and conditions of such allotment contained in the Lease Deeds.

Way back the Year 1940, the State Government allotted lands to individuals either by auction or on lease basis at a nominal lease rent. The allottees, who purchased the land in an auction, became absolute owners of the properties, whereas who obtained the allotment on a leasehold basis, could not transfer or assign their right, title or interest in the property or any part thereof without obtaining prior permission from the Office of Collector. Such permission, in terms of the Lease Deed, was to be issued on payment of 50% of the unearned income, but where the transactions took place without such approval, these charges were payable @ 75% of unearned income as per the Government Resolution of the Year 1957, which were reduced and made uniform as 50%, subject to a maximum of Rs 500/- per sq.ft. in the city area and Rs 250/- per sq.ft in the suburbs, as per the decision taken by the State Govt. in the Year 1990. But such rules existed on paper only and the compliance thereof was more in the breach than compliance.

Such properties fall in the developed areas of Mumbai including suburbs such as Mulund, Kandivli, Chembur, Andheri, Versova, Bandra, Malad etc. and have been classified in the Land Records as B-1 ( those located on the Collectors land) and the permission of the Collector is essential for the transfer or assignment of any right, title and interest therein. But the ground reality is that most of these properties have changed hands a number of times and nobody bothered to verify the original Lease documents to understand the terms and conditions of such allotment and to obtain Collector’s permission on payment of prescribed charges.

This issue has been racked up by the Collectors at their whims and fancy and there has not been any consistency of approach. Last time a sum of Rs 3 Crores was recovered from the film star Shahrukh Khan towards unearned income on his Bandra plot and, recently, the State Government have issued notice to the Hotel Sea-Rock in Bandra for the sale of the Property without the prior approval of the Collector and payment of 50% of the unearned Income. The purchasers, who, are aware of this restrictive condition, are afraid to approach the Office of

Collector as they anticipate that they may be saddled with the transfer charges in respect of all the previous transactions and the Society Office bearers have not been co-operative for the required paperwork due to the fear of huge demand, which may run into crores, from the Collector in respect of all the transfers which might have taken place in the past. Recently, Government has issued a notice to the society of NCPA Building at Nariman Point, Mumbai, to furnish the details of all such transactions to ascertain the charges to be recovered,

In the Year 1999, the rates of such transfer charges have been revised by way of Government Resolution, which is now as follows:-

In respect of commercial premises on the Collector’s land in the area of South Bombay, the present rate is Rs 1,500/- per sq.ft, provided such property has been held for a period of minimum 5 years.

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





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