Kerala Municipality Building Rules | Failure To Notify Property Transfer Can't Render Already Issued Building Permit Invalid: High Court

The Kerala High Court has laid down that the failure to inform the transfer of property under Rules 19(1) or 19(2) of the Kerala Municipality Building Rules, 2019 ('KMBR Rules, 2019') cannot render a building permit that has already been issued invalid, when the building has not been constructed or completed. 

Rule 19(1) requires the transferor of a property to inform the Secretary about the transfer or the intention to transfer the permit to another person. Rule 19(2) provides that the purchaser of property along with a building permit must also inform the Secretary of the transfer and obtain permission to continue or commence construction. The Secretary of the local authority is given the power to permit the purchaser to construct if he is satisfied that the transfer will not in any way badly affect the development or construction. 

Justice Bechu Kurian Thomas was of the considered view that the failure to inform the Secretary is only an irregularity and a curable defect, and that the prior owner and purchaser would be at liberty to apply to the Secretary, intimating him about the transfer and even request for a change of name for the building permit already issued, and that the Secretary would then have to take a decision on the same. 

"If a building permit is valid beyond the date of sale, effacing that permit completely, merely because a sale took place without informing the local authority, does not have any rationale. Even if the sale is informed, the Secretary has to verify whether the sale will affect the development or construction. If the construction is done on the basis of the permit already existing, failure to inform the sale cannot cause any prejudice as long the construction by the subsequent purchaser adheres to the permit and plan already approved. Thus, the failure to intimate the transfer as per Rule 19(1) and Rule 19(2) of KMBR can only be considered as a curable defect," the Court observed. 

The petitioner had purchased a property extending to 3.24 Acres. Before the sale, the prior owner had obtained a permit to construct a building on the said property. The transfer of the property in question was however not informed to the local Authority as mandated by the Rules. 

Subsequent to the purchase, the petitioner constructed the building based on the permit and applied for a completion certificate and occupancy certificate, which was however rejected by the authority on grounds of non-intimation of the transfer. 

The petitioner challenged the said order, alleging the same to be arbitrary and contrary to law. 

The respondents however argued that as per Rule 19 of the KMBR, whenever there is a transfer of the whole or any part of the property unless the work has been executed in full, the intention to transfer the permit and the transfer of property itself, ought to be intimated to the Secretary of the local authority.

It was added that the transferee also has a duty to inform the Secretary before the commencement of the work, and if the Secretary is convinced that the transfer will not, in any way, affect the development or construction, permission to transfer the permit can be issued. "Since neither the petitioner nor his predecessor-in-title had informed the transfer, a completion certificate or occupancy certificate cannot be issued," the respondents claimed. 

The Court took note that at the time of the sale, there had not been any structure on the property, and only the building permit existed.

Perusing Rule 19, the Court discerned that the obligation to inform the Secretary about the proposed transfer of the permit or the transfer of property arises when the building has either not been constructed or when the building has not been completed, and the transferor and transferee would have to inform the local authority about the transfer. 

It was thereby faced with the question as to whether the building permit already issued would become invalid due to the failure to inform the transfer when the building has not been constructed or completed. 

"The transfer of a property is governed by the Transfer of Property Act, 1886, and the provisions of the KMBR cannot override the said Statute. A failure to intimate the transfer to the Local Self-Government cannot render the ownership of the property already acquired by the title deed invalid. As an owner of a plot of land, a person has the right to construct and use the property in the manner he desires, subject, of course, to the regulatory provisions of law," the Court said. 

It further noted that the Rules do not provide for any consequences on the building permit for not intimating the transfer, except in Rule 19(5) of the KMBR, which provision only renders the permit invalid only if the plot over which a building is permitted to be constructed by the permit gets divided by the sale. 

The Court thereby ascertained that the requirement to inform the Secretary of the local authority about the transfer is only a directory provision and that the failure to so inform is only an irregularity which could be cured by informing the factum of transfer later and thus seeking regularisation of the construction.

Noting that the prior owner had already submitted an application intimating the transfer to the Secretary, the Court held that the petitioner would also be at liberty to apply for the transfer of the building permit to his name. It added that if the parties so intimate the transfer to the Secretary and seek a change of name in the permit, the latter would be at liberty to consider the same and pass appropriate order in that regard.

The plea was thus allowed, and the order rejecting the application for completion and occupancy certificate was set aside. 

Counsel for the Petitioner: Advocates K.J. Manu Raj, Ravi Krishnan, K. Vinaya, and Joby Joseph

Counsel for the Respondents: Advocate Santhosh P. Poduval

Citation: 2023 LiveLaw (Ker) 765

Case Title: Josepheena T.T. v. Thrissur Municipal Corporation & Anr. 

Case Number: WP(C) NO. 30055 OF 2023

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