Maharashtra Govt NOC Not Required To Transfer Flats Built On Land Leased To Builder : Supreme Court Sustains Relief Granted To Sr Adv Aspi Chinoy

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."

In the year 1971, the State Government had invited offers for the lease of certain plots in Back Bay Reclamation Estate. In response to the said notice, one M/s. Aesthetic Builders Pvt. Ltd made the bids. After the construction of the apartments, the builder sold them to individual purchasers, who in turn formed a Co-operative Society called Varuna Premises Co-operative Society Ltd.

On 16th December 2000, respondent No.1(Senior Advocate Aspi Chinoy) entered into an agreement with Mrs. Reshmi Devi Agarwal to purchase rights to occupy a particular flat and also five shares in the Society. When respondent No.1 approached the Sub-Registrar Office for registration, the registration was declined and he was directed to secure a No Objection certificate from the Collector. Owing to this, the respondent moved the High Court.

The State argued that in view of Government Resolution dated May 12, 1983 (1983 Resolution) and Government Resolution dated July 9, 1999 (1999 Resolution), the State was entitled to claim premium as a condition for grant of permission for transfer of the flats. But the High Court did not appreciate these submissions and dismissed the plea. This being the case, the state moved the Top Court.

Senior Advocate Shekhar Naphade, appearing for the State, submitted that Section 40 of the Maharashtra Land Revenue Code, 1966 empowers the State Government to dispose of any land on such terms and conditions as it deems fit. He submitted that, since the 1999 Resolution specifically provides the terms and conditions on which the land could be disposed of, the judgment of the High Court which failed to take into consideration the said aspect, is not sustainable.

Senior Advocate CU Singh, appearing for the respondentst, submitted that the High Court has considered all the relevant aspects and as such, no interference is warranted with the well-reasoned judgment and order of the High Court.

After going through the case, the court noted that as per the 1983 Resolution and 1999 Resolution, the State Government is empowered to allot land to the co-operative societies of different categories on concessional rates.

But the land in question has been allotted to the builder who had participated in the bid in response to a public notice. The land was allotted to the said builder after he was successful in the bidding process. As per the lease, he was required to construct the building on the said land costing not less than Rs.10 lakhs and sell it for private residence. To reiterate, after the builder sold the flats to the individual buyers, they formed a Co-operative Society in the year 1977 in which Society the ownership of the land came to be transferred by the said builder.

This being the case, the Court was of the view of the 1983 and the 1999 resolutions will not apply in the present case. The Court noted that the 1999 and 1983 Resolutions are applicable to the co-operative societies to whom the government lands are sanctioned on concessional rates.

"....we find that in the facts of the present case, since the land was not allotted to a society but to a builder on 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 a 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 | Civil Appeal no. 5809 of 2011

Citation : 2022 LiveLaw (SC) 825

Maharashtra Land Revenue Code - Maharashtra Government cannot insist on NOC from it for registering the subsequent transfer of flats built on a land leased to a developer -State government is not entitled to a premium when the land is not allotted to a society but to a builder on lease, who has constructed flats for private individuals, who in turn formed a Co-operative Society-1999 and 1983 Resolutions are applicable to the co-operative societies to whom the government lands are sanctioned on concessional rates-Since the land was not allotted to a society but to a builder on 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 a society - Paras 13, 14 & 15

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