Navi Mumbai: ‘CIDCO levying transfer premium is wrong’

The Maharashtra State Housing Federationrsquos Navi Mumbai wing states that CIDCO should stop levying transfer premium on flatscommercial outlets on resale properties as it is double taxing the property buyerCIDCO has entered into a lease agreement of 60 years with most housing societies in Navi Mumbai as a town planner for decongesting Mumbai and a flat buyer already pays a transfer premium of Rs 25000 to the cooperative housing society as per the Maharashtra Cooperative Societies MCS Act 1960 and its byelaws but CIDCO is levying a transfer premium as per slab rate ranging from over Rs 23000 to over Rs 8 lakh excluding 18 per cent GST which is legally and ethically wrong of CIDCO claims the federationA writ petition is already filed in Bombay High Court challenging this dual transfer premium charges The matter is slated for hearing before the monthendAdvocate Shreeprasad Parab expert director Maharashtra State Housing Society Limited said ldquoCIDCO acting as an agent of the state government provides land to cooperative housing societiesdevelopers only on lease of 60 years in accordance with the land disposal regulationsrdquoAlso Read Ghatkopar couplersquos mysterious death Will police bungling trash yet another caseldquoCIDCO charges transfer premium from individuals who sell their flatcommercial outlet and transfer their membership in the society The transfer premium charged by CIDCO ranges from R23000 plus 18 per cent GST for a flat with 215 sq ft carpet area to R835000 plus 18 per cent GST for flatcommercial outlets with carpet area above 2150 sq ftrdquo said ParabB R Mhatre general secretary Navi Mumbai Cooperative Housing Federation said ldquoA member in the housing society who sells the flat also has to pay transfer premium to the housing society up to the extent of R25000 along with transfer fees of R500 and entrance fees of R100 Therefore a person staying in Navi Mumbai is bound by a double transfer premium that is payable to the housing society and to CIDCO which is not the case for a person staying in Mumbai Thane Pune etcrdquoMhatre added ldquoThe contractual obligation of the housing society with CIDCO is forced on the members who have no privity of contract with CIDCO We can understand that if there is a transfer of land by the society then certainly the society has to take permission and pay transfer charges to CIDCO but in a flat sale there is only a transfer of membership that is transfer of shares which is regulated by the MCS Act The transfer of internal membershipshares is controlled by CIDCO by way of transfer premium which is beyond contractual obligationrdquoApex court viewAccording to Parab the Supreme Court has held that an agreement to transfer shares of a cooperative housing society or a limited company cannot amount to an agreement to sell an immovable property Although the flat purchaser has a right to occupy the flat as a member of the society the transfer of shares by itself does not amount to the transfer of immovable propertyWrit petition filedThe Navi Mumbai Cooperative Housing Federation has already filed a writ petition against the transfer premium ldquoThere is also pressure from Navi Mumbairsquos elected representatives MLAs and MPs on state leaders to convert the land from leasehold to freehold thus restricting CIDCO from levying transfer premiumrdquo said ParabOther sideCIDCO officials preferred not to make any official comment on the subjectUnanswered questionsAccording to Parab two moot questions remain unanswered He said ldquoFirst whether such amendments made in 2008 can be enforced retrospectively as the agreement for leaselease deed executed prior to such amendments is a contract agreed upon by CIDCO and housing societies And secondly if the societies were informed about such amendments to take force in the future many would not have consented Also if such amendments are allowed the state in the future may also force housing societies to agree to more stringent conditions