NOC from Maharashtra Govt. Not Necessary to Transfer Flats Built on Land Leased to Builders: SC Upholds Relief Granted to Sr Adv. Aspi Chinoy

Sr Adv. Aspi Chinoy Law Insider

Bhuvana Marni

Published on: October 7, 2022 at 21:06 IST

Last week, the Supreme Court upheld the relief that had been given by the Bombay High Court to Senior Advocate Aspi Chinoy and a few others, stating that the Maharashtra Government could not need a NOC to record the subsequent transfer of apartments constructed on land that was leased to a developer.

The Court made it clear that the State government is not entitled to a premium when the property is given to a builder on a lease rather than a society, who then builds apartments for private persons and establishes a cooperative society.

A bench of Justices BR Gavai and BV Nagarathna observed, “It could thus be seen that; the present case is not a case where the land is allotted to a Co-operative Society by the Government. The land was leased out to the builder, who was the successful bidder and after the ownership of flats was transferred to the private individuals, a Society of the flat owners was formed.”

The Back Bay Reclamation Estate’s specific plots were up for lease in 1971, and the State Government had requested proposals.

The bids were submitted in response to the said notification from one M/s. Aesthetic Builders Pvt. Ltd. Following the completion of the units, the builder sold them to private buyers, who then established Varuna Premises Co-operative Society Ltd.

Respondent No. 1 (Senior Advocate Aspi Chinoy) and Mrs. Reshmi Devi Agarwal entered into a contract on December 16th, 2000, for the acquisition of five shares in the Society as well as the right to inhabit a certain unit. Respondent No. 1 tried to register himself at the Sub-Registrar Office, but it was rejected, and he was told to get a Collector certificate of no objection instead. The respondent sought the High Court as a result.

The State contended that, in light of Government Resolutions dated May 12, 1983 (1983 Resolution) and July 9, 1999 (1999 Resolution), the State was allowed to demand a premium as a requirement for the grant of authorization for the transfer of the apartments.

However, the High Court did not accept these arguments and rejected the case. In light of this, the state petitioned the Supreme Court.

Senior Attorney Shekhar Naphade made the argument on behalf of the State that Section 40 of the Maharashtra Land Revenue Code, 1966 gives the State Government the authority to sell any land on the terms and conditions it sees suitable.

He argued that the terms and conditions are expressly stated in the 1999 Resolution and should be interpreted as it is appropriate.

He argued that because the 1999 Resolution outlines the particular terms and conditions under which the land may be sold, the High Court’s verdict, which ignored the said factor, cannot stand.

Senior Attorney CU Singh made the following argument on behalf of the respondent in his appearance:

“The High Court has weighed all the relevant issues and, as a result, no interference is justified with the well-reasoned decision and order of the High Court.”

The court remarked after reviewing the matter that the State Government is authorized to grant land to cooperative societies of various sorts at subsidized prices in accordance with the 1983 and 1999 Resolutions.

However, the builder who entered the bid in response to the public notice was given the parcel of property in the issue. After the said builder won the auction, the land was given to him.

According to the lease, he was expected to build a structure on the specified land for a minimum cost of Rs. 10 lakhs and sell it for private dwellings.

In 1977, after the builder had sold the flats to individual buyers, the buyers organised a cooperative society, and it was to this society that the builder ceded the title of the site.

Given this, the Court believed that the 1983 and 1999 resolutions would not be applicable in the current instance.

The Court stated that cooperative organisations to which government lands are sanctioned at reduced rates must abide by the 1999 and 1983 Resolutions.

“….we find that in the facts of the present case since the land was not allotted to society but to a builder on a lease, who has constructed flats for private individuals, who have subsequently formed a Co-operative Society, the 1983 Resolution and 1999 Resolution would not be applicable to the members of such society”.

With these observations, the Court dismissed the appeals by observing that there was no need to go into the submissions made by the State government.

Case Title: The State of Maharashtra vs. Aspi Chinoy and Anr. 

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