Chapter VII: Properties On The Plots allotted To The Press / Publication Houses

By Advocate S. R. Agarwal

Being the sole Development Authority for New Bombay where no private land is available, CIDCO has been allotting the plots to the Press / Publishing Houses for the specific purpose of establishing their printing press, office and residence. Since such allotment is made at a concessional rate as against the current market price, such allotment carries the usual restrictive condition against the transfer or assignment of the right, title and interest therein. The relevant condition from the Allotment Letter of such plots is, usually, as under:-

Transfer or Assignment of Rights: You may transfer or assign your rights, interest in or benefits, which may accrue to you from the Agreement to Lease, with the prior written permission of the Corporation and on payment of such transfer charges as may be prescribed by the Corporation from time to time. However, no permit shall be granted unless you pay to the Corporation the agreed premium in full and any other amount required to be paid in full ”.

A separate area has been earmarked for the allotment of the plots to the Press / Publication houses in-between Vashi and Sanpada in New Bombay and popularly known as “PRESS ENCLAVE AREA. It has been observed that such Allottees enter into

Development Agreements with the Promoters / Builders / Developers for the construction of the Properties on these Plots and the arrangement is, usually, that a building is constructed on a portion of the plot for the printing Press, office and residence of such Allottees and handed over to them free of cost and in consideration thereof, the Promoters are permitted by the Allottees to sell the flats/apartments/shops and offices on the remaining portion of the plot, in open market, though payment of some cash in consideration of this arrangement also forms part of such transactions in some cases.

In fact, such a Development Agreement provides for the sub-division and demarcation of the plot between the Allottees for their allotted establishment and the Promoters for their free sale component and forming a Society for such flats, apartments, shops, offices etc as a separate entity on the portion of sub-divided Plot. For the purposes of free sale component, a General Power of Attorney is executed by such Allottees in favour of the Promoters to execute Agreements for Sale in favour of the prospective purchasers. Such Development Agreements and General Power of Attorney are not in consonance with the provisions of the lease conditions and they are entered into, subject to the permission of CIDCO for sub-division of Plot and creation of third Party interest therein. Clause (O) of the Agreement to Lease in such cases runs as under:-

RESTRICTION AGAINST APPOINTMENT OF AGENT BY A POWER OF ATTORNEY OR OTHERWISE:

(O) The Licensee shall not appoint any person as his/ their/its agent by a Power of Attorney or otherwise, for the purposes of this Agreement except his/her/spouse, father, mother or a major child and if the Licensee shall be Company, Society or such body Corporate, its Officer or Servant”.

Therefore, any purchaser of a flat or an apartment or a shop or an office in such properties will not have a valid title and the financial institutions, advancing loans, will not have a valid enforceable mortgage in their favour, without the prior permission of CIDCO approving the sub-division and demarcation of the Plot and transfer NOC on payment of transfer charges, but still such transactions are taking place day-in and day-out without CIDCO permission, which in my opinion, may not legally be sustainable in case of any controversy or default.

Assuming this issue is regularised and post-fact approval is accorded by CIDCO, this restriction about transfer or assignment of the right, title and interest in such Properties shall be applicable, as per CIDCO rules, to the future transactions also as discussed in earlier Articles. In the case of allotment of such plots to Bhartiya Vichar Darshan in Sector No. 30, at Vashi, all the required  approvals have been obtained and the purchase of flats in this project in legally valid and mortgage NOC is available from CIDCO, though further sale thereof would need CIDCO transfer approval on payment of transfer charges, as explained earlier. The copies of the CIDCO letters dated 1-3-2001 and 27-3-01 permitting the transfer of units are annexed hereto as a specimen.

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

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