Suburban collector’s office faces suit for non-recovery of transfer premium

Neelkanth Kingdom at Vidyavihar West currently has seven residential buildings

A flatowner has filed a writ petition in Bombay High Court against the suburban collector's office for non-recovery of transfer premium allegedly running into hundreds of crores in respect of several property transactions at Neelkanth Kingdom in Vidyavihar West over the past decade. The petitioner has also made the lessee of the land - Vidyavihar Containers Ltd, developers and six registered housing societies of the complex parties to the writ petition.

Neelkanth Kingdom, a residential project, currently has seven residential buildings as part of Phase I while Phase II is yet to start. This housing complex is built on land leased by the suburban collector to Vidyavihar Containers Limited, who gave the construction rights to the developer, hence there are a number of payments to be made to the collector for construction, sale, purchase, mortgage or any property transaction.

Meanwhile, the project, which was supposed to be complete in 2008, is still ongoing and the flat owners have started residing without obtaining occupancy certificates.

The whistleblower, solicitor Stuti Galiya, also a flatowner there, said that while the complex procured water connection on humanitarian grounds, there are several cases where the developer in connivance with few residents have allegedly forged signatures of deceased flat owners to transfer the same for illegally getting the water connection. She had earlier filed a criminal case before the Vikhroli Metropolitan Magistrate court in this regard, following which the court directed Ghatkopar police to launch a probe and submit a report.

Pending payments

As per responses to RTI queries to various regulatory authorities, around 238 sales or purchases have been made between 2011 and 2021. Of these transactions, around 100 were transferred between group companies of the developers to settle internal disputes and then sold to other parties.

"As per the a government resolution, any sale/transfer of flat situated on suburban collector's leasehold land and situated within Mumbai Suburban district will need to pay a transfer premium of R500 per square feet or 3 per cent of the consideration amount, whichever is higher, if such sale/transfer is executed within five years from the date of receipt of occupation certificate," said Stuti.

She further added, "The GR also includes provisions for penalty in case flats are transferred without collector's nod which is double the transfer premium amount, and thrice the transfer premium amount if the transfer takes place without collector's nod within five years from receipt of occupancy certificate."

"The amount payable would increase with each subsequent sale. Thus, the pending dues in the nature of transfer premium for all such 238 transactions would roughly be in the range of Rs 100-Rs 120 crore. The actual amount could be much higher as there are mortgage and other sale transactions too," Galiya said.

Apart from these, an additional penalty amount of approx Rs 122 crore was also payable by Vidyavihar Containers Ltd for extension of construction period. "However it is alleged that there have been certain wrongful submissions by the Vidyavihar Containers Ltd, due to which the penalty amount was brought down from R122 crore to R6 crore. Thus, there could be outstanding liability of more than Rs 500 crore, if the same is challenged" she said.

Flat owners may end up in soup

She added, "Under the provisions of the Maharashtra Land Revenue Code, an occupier of a flat is equally liable in respect of the pending transfer premium and the collector has wide powers to recover such amount as land arrears, which may include sealing of property. Thus, once the developers form the federation of housing societies, flat owners will be responsible for paying all transfer premiums in respect of earlier transactions. It is important that the ultimate occupier of flats does not have to bear the brunt of regulatory action."

Galiya added, "The matter is likely to come up for hearing soon after the court reopens post the Christmas vacation."

Other side

Suburban Collector Nidhi Choudhary said, "I have not come across this matter so far during my tenure of the last three months. However, I will look into this case and will get into depth of the matter to understand the facts, and appropriate action, as deemed fit under the law, will be taken in case of any lapses."

238
No. of flat transactions done so far