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In Jt Development, performance of Builders will be “Transfer”

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Shri Suresh Kumar D. Shah v. DCIT (ITAT Hyderabad)- It is held that in a Joint Development Agreement if the Developer has performed or is willing to perform his part of the contract, then the transaction would qualify as a ‘transfer’ under section 2(47)(v) of the Income-tax Act, 1961.
The fundamental feature which determines the taxability of capital gains is that the gain ought to be from the transfer of a capital asset. This section has a larger scope of operation as it states that the gain shall be deemed income of that previous year in which the transfer takes place. Accordingly, given the deeming provision, the income on account of capital gain should be charged to tax in the same previous year in which the transfer was effected or deemed to have taken place. The doctrine of ‘part performance’ is undoubtedly based upon the doctrine of equity. If one party has performed his part of duty then equity demands that the other party shall also perform his part of the obligation. Section 53A of the Transfer of Property Act requires the existence of following conditions:
Existence of a contract;
The contract is in respect of a transfer and not for any other purpose;
Existence of consideration; and
Terms necessary to constitute the transfer should be ascertained with reasonable certainty.
The terms which require certainty consists mainly of a) passing of substantial consideration and b) passing over of possession.
To satisfy the condition of section 53A of the Transfer of Property Act, the transferee should perform or should be willing to perform his part of the contract. Willingness by the transferee is to be judged by the series of action of the transferee and not one event.
The transferee surveyed the land, put up hoardings plus sales offices and carried out site development works. Further, the power of attorney granted a bundle of rights to the Developer simultaneously and on the other hand the transferee’s gesture of payment of consideration coupled with development work can be said to be a positive step towards willingness to fulfill the commitment. In the instant case, the facts suggest that the Developer had never intended to walk out of the project. However, the entire facts need to be verified by the lower authorities.The fact that the legal ownership continued with the land owners does not affect the applicability of section 2(47)(v) of the Act. If the transferee was undisputedly willing to perform his part of the contract despite the Government restriction then the same would qualify as ‘transfer’ under the Act, the primary reason being that the possession of the property has vested with the Developer and the JDA had not been cancelled. The matter was remanded to the file of the Commissioner of Income-Tax (Appeals) to decide the issue based on facts.
INCOME TAX APPELLATE TRIBUNAL, HYDERABAD
ITA No.425/Hyd/2011 : Assessment year 2007-08
ITA No.420/Hyd/2011 : Assessment year 2002-03
ITA No.421/Hyd/2011 : Assessment year 2003-04
ITA No.422/Hyd/2011 : Assessment year 2004-05
ITA No.423/Hyd/2011 : Assessment year 2005-06
ITA No.424/Hyd/2011 : Assessment year 2006-07
Shri Suresh Kumar D. Shah, V/s. Dy. Commissioner of Income-tax
Date of Hearing
19.10.2011
Date of Pronouncement
16.12.2011
ORDER
Per Chandra Poojari, Accountant Member:
This is a bunch of six appeals. These appea1s are directed against two orders of CIT(A)-I, Hyderabad -one order dated 28.11.2010 for the assessment year 2007-08 and a common order a1so dated 28.11.2010 for the assessment years appeal 2002-03 to 2006-07. Since common issues are involved, these appeals are being disposed off with this common order for the sake of convenience.
ITA N0.425/Hyd/2011 : Assessment year 2007-08
2. First issue invo1ved in this appeal, covered by grounds No.2 to 8 re1ates to chargeabi1ity of capital gains at Rs.1,20,94,810 on the sale of land; and capital gains at Rs.16,93,17,260 in re1ation to the land given for development and treating the same as ‘transfer’ in terms of S.2(47)(v) of the Income-tax Act.
3. Facts of the case in brief are that a search and seizure operation under S.132 of the Act was carried out in the residential premises of the assessee. The assessee filed return of income for the year under consideration admitting total income of Rs.2,51,253 and agricultural income of Rs.3,500. In the course of assessment proceedings, the assessing officer examined the issue of capital gains on account of the land sold and also land given for development purposes. The assessee alongwith his wife and son had sold one acre of landed property situated at Survey No.163(OP), at Vettinagulapalli Village on 12.4.2006 for a consideration of Rs.1,21,090,000. The assessee had claimed exemption on the said transactions stating that the land was agricultural in nature. The assessing officer examined the issue in detail and came to a conclusion that the land was not agricultural in nature and no agricultural operation was carried on the same. He accordingly treated the said land as a capital asset and computed the long term capital gain at Rs.1,20,94,810. He also found that the assessee alongwith his wife and son had handed over 14 acres of land situated at Vattinagulapalli village to M/s. Dakshin Shelters Pvt. Ltd for development purpose. Since the possession of the land was already handed over the assessing officer held that the said transaction came within the purview of S.2(47) of the Act The assessing officer observed that a detailed order on the same issue was passed in the case of Sri Brij Gopal Shah (HUF) for assessment year 2007-08 and in the case of Shri Krishna Kumar Shah(HUF for assessment year 2006-07. He also relied on the decision of the Hyderabad ‘B’ Bench of the Tribunal in the case of Shanta Vidyasagar Annam V/s. ITO dated 9.6.2006 in ITA No.888/Hyd 2003 wherein it was held that the land gets transferred merely by entering into a development agreement and that the date of development agreement is the date of transfer of the land. The assessing officer examined various clauses in the development agreement entered into by the assessee and came to a conclusion that capital gain is exigible on the said transaction. He accordingly computed the long term capital gain on this asset at Rs.16,93,17,260. The total income was computed at Rs.18,15,63,320 and a tax demand of Rs.5,40,36,820 was raised.
4. On appeal, the CIT(A), dealing with the sale of 1 acre of land in the first place, upheld the addition by way of long term capital gain of Rs.1,20,94,810 made by the assessing officer, with the following observations?
“03.1 …..I find from the assessment order that the assessing officer has obtained the land revenue records from the MRO Rajendra Nagar Mandal. The pahanis obtained from the MRO revealed that the land situated at survey No.163 was vacant for more than 10 years. The certified copies of the revenue records were obtained by the AO for the period of 1997-98 to 2007-08. Even the assessing officer had personally visited the landed property and noticed that the entire land was barren surrounded by rocky mountains and not fit for agricultural activities. Apparently, during the assessment proceedings, the assessee had submitted a copy order issued by the MRO to Krishna Kumar Shah dated 18.8.2005 wherein it was claimed that the land was agricultural in nature. The assessing officer had examined the certificate filed by the assessee and found that the land situated at Survey No.163 was not mentioned in the said order. In fact the assessee had sold land situated at survey No.163 only. Accordingly, the assessing officer concluded that the evidence field by the appellant in fact goes against him. The appellant had also filed certain letters issued by ai Sri Mata Rice Mill claiming that he had sold paddy to the above rice mill. The AO had examined the Managing Partner of the said rice mill who denied to have known the appellant. In fact he had submitted that on Sri A.Rami Reddy had approached him to issue such letters. Considering the detailed examination made by the Assessing officer I am of the view that the land sold by the appellant was non-agricultural in nature and the AO had rightly computed the long term capital gin on sale of the said land. To that extent I do not find any infirmity in the order of AO in making addition of long term capital gain of Rs.1,20,984,8101- computed by him. “
5. Dealing with the addition by way of capital gains made in respect of the other piece of land given under development agreement, the CIT(A) noted that the main contention of the assessee was that the provision of S.53A does not apply to the development agreement and consequently there is no applicability of S.2(47) of the Act, so as to compute capital gains on development agreements. It was also contended that the so called possession of the land given was to enable the developer to undertake the work on the land for the purpose of laying out plots and carrying on construction which is not possible without entering into the land and this facility was a mere licence and does not confer any right of ownership of land to the developer. These contentions of the assessee did not find favour with the CIT(A), who besides referring to the decision of the Tribunal in the case of Smt. Santa Vidya Sagar Annam (supra), relied upon by the assessing officer in the assessment order, also relied on the decisions of the Tribunal in the case of Dr.T.Ahyuta Rao V/s. ACIT(ITA No.916/Hyd/2004); and of the Bombay High Court in the case of Chaturbhuj Dwarka Das Kapadia V/s. CIT(260 ITR 491); Pune Bench decision of the Tribunal in Taher Allmohammed Poonawala V/s. Addl. CIT(124 TTJ (Pune)387). Hyderabad Bench of the Tribunal in the case of Dr.Maya Shenoy V/s. ACIT(2009)124 TTJ(Hyd) 692, and concluded following the ratio laid own in those cases that as on the date of signing of the agreement in the present case, the assessee has given possession of the land for the purpose of development by M/s. Dakshin She1ters P. Ltd. and as such there was a transfer in terms of S.2(47)(v) of the Act and hence capital gains is exigib1e in the case of the assessee in the year in which the development agreement has been entered into and possession has been handed over. He a1so referred to the appe11ate orders dated 26.7.2010 passed in the cases of Shri Brij Gopal Shah HUF for assessment year 2007-08 and Shri Krishna Kumar Shah HUF for the assessment year 2006-07.
6. Aggrieved by the order of the CIT(A) assessee preferred the present appeal before us.
7. Learned counsel for the assessee, reiterating the contentions urged before the lower authorities submitted that the land sold was agricultural land, which was situated beyond 8 kms from the end of municipal limits of Hyderabad, and as such the CIT(A) was not correct in confirming the assessment of capital gains at Rs.16,93,17,260. He also disputed the conclusion of the lower authorities that the capital gains accrues on the date of execution of development agreement, i.e. on 12.4.2006, on the ground that such conclusion is totally contrary to the statutory provisions of law and is clearly unsustainable. It is submitted that development was a form of transfer through the medium of exchange and an exchange postulated the existence of both the properties in the order to constitute a ‘transfer’. He also submitted that the capital gains accrued to the assessee only when the developer has handed over the built up area to the assessee in accordance with the development argument and therefore, under the facts an circumstances of the case, the CIT(A) ought to have held that there was no transfer within the meaning of S.2(47) of the Act. It is also submitted that till date the developer has not done any development on the land belonging to the assessee and the entire project is in a standstill and therefore, to state that the transfer took place on the date of execution of the development agreement is beyond statutory comprehension and is therefore clearly not sustainable in law. It is also contended that by virtue of G.O.Ms No.111 of 1996, no development can take place on the land belonging to the assessee, which was the subject matter of the development agreement, on account of statutory restrictions and therefore, the CIT(A) ought to have clearly held that there was no transfer exigible to capital gains within the meaning of S.2(47) of the Act and therefore, he ought to have clearly held that no capital gains accrued for the assessment year 2007-08 and ought to have deleted the entire capital gains assessed.
8. Learned counsel for the assessee submitted that the assessing officer has overlooked the prima facie evidence, forming part of seized material, being Annexure ASKS/08/10, while rejecting the contention of the assessee that the land of one acre sold is agricultural land. He submitted that the lower authorities have erroneously arrived at the conclusion that the lands in question of the assessee, are non-agricultural lands, by proceedings on the presumptions that they were vacant at the time of the inspection of the assessing officer.
9. The learned counsel for the assessee taking us through the relevant pages of the paper-book that detailed documentary evidence has been produced by the assessee to prove that agricultural operations were being carried on the lands in question upto the year 2006-07 and Revenue records issued by the Mandal Revenue Officer, Rajendranagar clearly disclose that the Survey Nos.163(P) 263(P) and 264(P) of Vattinagulapalli(V) are agricultural lands. He pointed out that the MRO, presently redesignated as Tahsildar, is the only competent authority and Recording Authority, for preparation and maintenance of Revenue records and also Custodian of the Revenue Records of all villages falling within the Mandal and the land revenue records prepared and maintained including annual pahani patrikas are only in respect of lands in which agricultural operations are being carried on, for raising crops in each facli year.
10. Inviting our attention to pages 25 to 86 of the paper-book, it is submitted that lands in question belonging to the assessee are agricultural lands and agricultural operations were carried on upto 2005-06. It is further submitted that the lands belonging to the assessee are dry lands which are capable of agriculture and paddy crop and vegetables are grown with the aid of assessee’s own irrigation well, which was fitted with electric motor, upto the year 2006-07. Even now, as on date, the small cross-bunds laid on the land of the assessee is evident for retention of sufficient water for irrigation to the crops gross in these fields and the well through which irrigation was done still exists. It is submitted that the assessee and his family members have been carrying on agriculture from the past 30 years growing paddy, vegetables etc. The conclusion of the assessing officer that the land was barren and surrounded by the rocky mountains and not amenable to agricultural operations is without any basis, and the land is amenable to cultivation and operations were carried out regularly. Referring to the sworn statement of the assessee recorded during search proceedings, dated 9.10.2007 and dated 5.11.2009, it was submitted that the Deputy Director of Income-tax(Investigation), having satisfied with the statement of the assessee that agricultural operations were carried on by the assessee, did not carry out any further investigation. Referring to the sworn statement of the assessee recorded during search assessment proceedings, dated 5.11.2009, it was submitted that it was confined to eliciting information on agricultural income of the assessee It is submitted that the sale bills for the agricultural produce sold were produced before the assessing officer and some of the bills for the purchase of pesticides and fertilizers, vegetable seeds were also produced by the assessee before the assessing officer. He also disputed the inferences drawn on the basis of statement dated 16.12.2009 of Shri Narasimha Reddy, Managing Partner of M/s. Jai Sri Matha Rice Mi11, and submitted that merely basing on the averment of Shri Narasimha Reddy that he did not know Suresh Kumar, it was concluded that the paddy sold did not belong to the assessee. However, the fact remains that Shri Ram Reddy, assessee’s representative used to sell the paddy on assessee’s behalf and an affidavit to that effect was filed from Shri Ram Reddy before the assessing officer during the assessment proceedings. It was also pointed out that to a specific query of the assessing officer, in the course of statement recorded on 5.11.2009, as to whether he could confirm that the paddy was belonging to Surseh Kumar only, Shri Narasimha Reddy never answered the same, which according to the learned counsel, clearly indicated that the paddy belonged to the assessee. It was submitted that it was only on the last date of hearing on 21.12.2009, the assessee came to know about the sworn statement of Narasimha Reddy after concluding the hearing on the said date, as it was at that time only that the assessing officer handed over a copy of the sworn deposition dated 16.12.2009 to the assessee and as such the assessee was not given any opportunity of being heard on the statement of Shri Narasimha Reddy, much less the opportunity of cross-examining Shri Narasimha Reddy. It was in that context that the assessee filed the affidavit of Shri Ram Reddy, who sold the paddy on assessee’s behalf, but the assessing officer without considering the affidavit of Shri Ram Reddy, reached his conclusions as to the nature of the lands in question.
11. Referring to the visit of the assessing officer for inspection as to the nature of land, it is submitted that the assessing officer visited without the assistance of any one like Mandal Surveyor, Mandal Revenue Inspector or village level officer of the village or even the assessee who was the owner of the lands in question, and as such, such visit would not serve any purpose as it is very difficult to identify the particular survey No. on ground, without a village map, village officer, etc. Even as on the date, without the assistance of the relevant material or assistance of the concerned authorities, one cannot identify the survey nos. of a village, as the survey stones of various survey nos. are missing on ground for the past several years.
12. The learned counsel for the assessee submitted that the observations of the assessing officer based on the provisions of S.10 (37) of the Act are baseless as the land of the assessee is not situated in the municipal area or within 8 Kms from the municipal limits and in fact the assessing officer has got himself totally confused about the applicability of S.2(14) and 10(37) of the Act and he has wrongly focused his attention on S.10(37) with is not relevant for the assessee’s case.
13. Placing reliance on the decision of the Gujarat High Court in the case of CIT V/s. Siddharth 3. Desai (139 ITR 628), it is submitted that the Hon’ble High Court in that case has reviewed several decisions and evolved 13 factors for answering whether the land is agricultural or not. Dealing with those factors as fulfilled by the assessee, it is stated as follows?
(a) The assessee had paid land revenue up to 19980-99. Thereafter Government has waived land revenue for dry agricultural lands.
(b) Land has actually been used for agricultural purpose right form the ownership, and as stated in the sworn affidavit, paddy, vegetables, etc. were grown.
(c) Land has been used for agricultural purposes from longer period, i.e. from almost 30 years right from the ownership, which was not disputed by the assessing officer.
(d) The land was purchased by the mother of the assessee long back and was used for agriculture. After partition of the land among the assessee, his brothers and his mother, the same was continued to be used for agriculture, and as such there was no investment involved.
(e) The agricultural land was sold on 12.4.2006, till which date the assessee had carried on agricultural operations and he never applied for conversion of the same from agricultural use or nonagricultural use as required under Rule 70 of AP(TA) Land Revenue Rules, 1951 and also under A.P. Agricultural (Conversion for NonAgricultural Purposes) Act, 2006.
(f) On the relevant date, i.e date of sale/development agreement, the land had not ceased to be put to agricultural use and it was also not put to any alternative use and it was used only for agriculture.
(g) The land was entered in revenue records and was actually used for agriculture by ploughing and tilling the land and the assessee intended to use it for agricultural purposes.
(h) The land was situated in Vattinagulapally village, which is an underdeveloped area, which is more than 8 Kms from the city limits, having a village population of less than 10000.
(i) The land is surrounded by other agricultural lands, where agricultural operations are being carried on.
(j) The land was not developed by plotting and providing roads and other facilities.
(k) Before the transfer, no portion of the land was sold for the purposes other than agriculture.
(1) The land of the assessee is situated in Vattinagulapally Village, R.R. District, Andhra Pradesh and hence Bombay Tenancy and Agricultural Land Act does not apply to the case of the assessee and the land was sold as agricultural land.
(m) The land was sold on acrage basis and not on yardage basis.
In view of the above, it is affirmed that all the above 13 factors are fulfilled in assessee’s case. It is also stated that the assessing officer has allowed rebate in respect of agricultural income while making the assessment, which establishes the fact that the land is agricultural and the assessee derived agricultural income.
14. It is further submitted that Project Director of Outer Ring Road Project, vide his letter dated 29.11.2005 sought clarification from the Commissioner of Income-tax(TDS), AP Hyderabad, on the liability to deduct TDS in respect of compensation payable and in response, it was clarified by the CIT(TDS) vide his letter dated 7.12.2005 that deduction at source would not be required in respect of agricultural lands which are falling outside the limit of GHMC income and consequently no TDS was effected on the amount of compensation paid to the assessee.
15. In support of the above contentions with regard to the nature of the land in question, reliance is placed on the following decisions?
(a) CIT V/s. Siddhartha 3. Desai(139 ITR 628)-Guj
(b) CIT V/s. Minguel Chandra Pais & Anr (282 ITR 618)- Bom.
16. Specifically with regard to the capital gains assessed in respect of the land covered by the development agreement, it is submitted hat provisions of S.53A of Transfer of property Act are not applicable to the transaction of the development agreement and consequently, provision of S.2(47)(v) are also not applicable to development agreement. Without prejudice to this contention, it is submitted that as per the terms and conditions of the development agreement, the assessee is entitled to 35% of plots alongwith construction thereon in lieu of 65% of the area of land out of 14 acres to be shared by the developer, and as rightly observed by the assessing officer, the assessee family had received an amount of Rs.98 lakhs refundable deposit from the developer and the possession of the land was also handed over as per S.2(47) of the Act on 12.4.2006. It is submitted in this context that the assessee has not received any consideration from the developer from 12.4.2006 till date, though more than four years have elapsed and the developer has not performed any work in fulfillment of the terms and conditions of the development agreement, and the assessing officer is also clearly aware of the fact that the assessee has not received any consideration in respect of the land. It is submitted that against 65% of land agreed to be given to the developer only refundable security advance was received by the assessee and the so called possession of the land given was given to enable the developer to undertake the work on the land for the purpose of laying out plots and carrying on construction which is not possible without entering the land. Thus, the possession given is a mere licence and does not confer any rights of ownership of land on the developer. It is further submitted that in terms of clause 5.1 of the agreement, the developer has to get all the clearances including for change of land use and relaxation/exemption for land use change from bio conservation to residential/commercial use within six months with extension of another six months, after which time, the position was to be reviewed mutually. The Developer, according to the counsel has failed to get the necessary clearances and in the circumstances requested the assessee vide letter dated 12.4.2007 to renew the agreement and GPA for a further period of one year from 12.4.2007 with automatic extension for another six months. Notwithstanding the same, even after four years, the agreement has not been renewed and hence the entire transaction failed.
17. It is further submitted that even though as per clause 11 of the Development Agreement, the owners and assessee had handed over to the developer, copies of Pahani Patrikas, Records of Rights, Khasra and other documents relating to property which is agricultural in nature, the assessing officer failed to question the developer in this regard.
18. Inviting our attention to the provisions of S.2(47)(v) of the I.T. Act and S.53A of the Transfer of Property Act, 1882, it is submitted that where the assessee has a right to revoke the agreement in certain eventualities, the transaction is not ‘transfer’ either under S.2(47)(v) of the IT Act or under S.53A of the Transfer of Property Act. Further, placing reliance on the decision of the Hon’ble Supreme Court in the case of Srimant Sham Rao Suryavanshi & Another V/s. Prahlad Bhairoba Suryavanshi (dead by LRS) and Others (AIR (2002) SC 960), wherein certain conditions were stipulated for being fulfilled by the transferee in order to protect or defend his possession under S.53A of the Transfer of Property Act, and the fulfillment of those conditions in the present case, it is submitted that the development agreement in the present case was not yet renewed and hence not in force, and as such the transaction is not covered by S.533A of the Transfer of Property Act and consequently, it does not amount to transfer under S.2(47) of the Income-tax Act, 1961.
19. Learned counsel for the assessee further submitted that the developer is not ready with his part of the contract as built up area and plots are not yet ready even on the paper and neither the assessee nor the developer have any control over the transaction, as several hurdles need to be crossed before the developer is ready to complete his part of the contract, and as such, the provisions of S.53A of the Transfer of Property Act have to be understood in this context, and that being so, it has no application in the case of a Development Agreement. He also contended that possession in the present case was given for the limited purpose of development of the property, and not to confer any ownership rights and in fact, in the case of the assessee, it is mere exchange of property land not sale since the products of exchange are not in existence.
Distinguishing a development agreement from any transfer, it is submitted that conditions under S.2(47) are not satisfied in the case of a development agreement, and consequently no transfer is involved and therefore, no capital gain tax arises.
In support of the above contentions, reliance is placed on plethor of decisions, which are noted below?
(a) State of Kerala V/s. K.T. Shaduli (AIR 1977(SC) 1627)
(b) CIT V/s. Sidhartha J. Desai (139 ITR 628)-Guj
(c) CIT Vs. Minguel Chandra Pais & Anr. (282 ITR 618)-Bom.
(d) Shrimant Shamrao Suryavanshi & Anr. V/s. Prahlad Bhairob
Suyryavanshi (Dead) by LRs and Otehrs (AIR (2002) SC 960)
(e) R.Vijaylaxmi V/s. Appu Hotels (257 ITR 4)-Mad
(f) General Glass Co.(P)Ltd., V/s. DCIT(108 TTJ 854(Mum)
(g) DCIT V/s. Geeta Devi Pasari (104 TTJ 375)-Mum.
(h) DCIT Vs. Asian Distributors Ltd. (70 TTJ 88)-Mum
(i) CIT V/s. Sanjeev Kumar Jain (310 ITR 178)-P&H
(j) Jindal Stainless Steel V/s. ACIT (1 ITR (Trib) 484)-Del.
(k) Shantilal Godawat & Ors V/s. ACIT (126 TTJ 135)-Jodh
Elaborate written submissions have also been filed reiterating the above contentions in the light of the above case-law.
22. The Learned Departmental Representative on the other hand, strongly opposed the submissions of the learned counsel for the assessee, and supported the orders of the lower authorities. He submitted that the assessing officer has obtained the revenue records for the period 1997-98 to 2007-08 and even personally visited the lands of the assessee in question, and it is based on the evidence gathered in this process, that the assessing officer has come to the conclusion that the lands in question were not of agricultural nature. Even though the assessee has filed certain letters from Jai Sri Mata Rice Mill, to whom the assessee claimed to have sold the paddy, Learned Departmental Representative submitted, examination of the Managing Partner of the said Mill by the assessee clearly established that the falsity of the assessee’s claim and those letters were issued at the request of one A. Ram Reddy. He submitted that the affidavit of the said Shri Ram Reddy filed by the assessee, are only make believe and accommodative documents, which cannot be relied upon. As for the land covered by the development agreement, Learned Departmental Representative, submitted that the view taken by the lower authorities is based on the categorical and unambiguous statutory provisions contained in S.2(47)(v) of the Act, and the settled position of law, elaborately discussed by the CIT(A) in the impugned order, which clearly stipulate that it is the date of the development agreement, which is crucial, has the effect of ‘transfer’ in favour of the developer to whom possession of the property is handed over. He relied upon the following judgements:
(a) Chaturbhuj Dwakada Kapadia Vs. CIT (260 ITRr 491)
(b) Jasbir Singh Sarkaria (294 ITR 196) Advance Rulling
(c) Ajai Kumar Sah JagatiVs. ITO (55 ITD 348)
(d) Gripwell Industries Ltd. Vs. ITO (99 ITD 368) (e) Dr. T. Achutha Rao Vs. ACIT ( 106 ITD 388)
23. Heard at length the pleadings of both the sides and also perused the case-records in the light of the compilation filed and precedents cited. First, we dea1 with the issue relating to computation of capital gain on sale of 1 acre of land. According to the assessee, the land is situated 8 KM away from the municipal limits of Hyderabad and same was put to agriculture use and no capital gains arises. On the other hand, the lower authorities were of the opinion that the land was barren land and no agricultural operations were carried on for the last 10 years. The assessee placed revenue records suggesting the land for agricultural usage and it was submitted before us that the agricultural operations has been carried on and the sale of such land to be treated as income exempt from tax. But the fact is that the entire land which is subject matter before us is a barren land surrounded by rocky mountains and not fit for agricultural operations. The assessee though filed copy of the order of the MRO dated 18-8-2005 stating that the land was agricultural land, it was found by the lower authorities that the impugned property bearing Survey No.163 was not mentioned in the order of the MRO. The assessee filed a letter from M/s Jai Sri Mata Rice Mill claiming that he had sold paddy as it was stated by the Managing Partner of the Rice Mill. However, later the Managing Partner stated that the letter was issued at the insistence of one Mr. Rami Reddy and he denied the purchase of any paddy from the assessee. Further, coming to the facts of the case that the land is assessed to land revenue as agricultural land under the State Revenue, it is certainly relevant fact but it is not conclusive. To ascertain the true character and the nature of the land, it must be seen whether it has been actually put to use for agricultural purpose for a reasonable span of time prior to the sale of such land and further whether on the relevant date the land was intended to put to use for agricultural purposes for a reasonable span of time in the future. After examining the facts of the case, we found that the assessee along with his brothers entered into sale agreement for the sale of the impugned property with the vendor and it was not for the purpose of agriculture but for the purpose of development. On the date of the land was sold, the land was no longer agricultural land. There was no evidence regarding carrying out the agricultural operations in the impugned land. In the absence of evidence that it was put to agricultural use by the assessee and the land was actually cultivated till the sale of the land, we are not in a position to hold that the land is an agricultural land. In our opinion, the sale of the land for non agricultural purpose and the land was not subject to cultivation before sale, we have to draw conclusion that the sale of land cannot be considered as sale of agricultural land. In the circumstances, we have to hold that the sale of land is not sale of agricultural land and it is to be considered as capital asset and on that sale, capital gain is chargeable.
24. Now, coming to the ground relating to the chargeability of capital gain on account of development agreement, we may hold in the first place, for the reasons discussed in the preceding paras, that the contentions raised with regard to agricultural nature of the land, which is subject matter of the development agreement, have to be rejected, since both the lands of the assessee, i.e. 1 acre sold during the year and the land given for development agreement are contiguous and within the same survey numbers, having the very same features. We may now deal with the other contentions of the assessee with regard non-chargeability of capital gains in respect of the land, which was not ‘transferred’ but only given for development. We may refer to the provisions of S.2(47)(v) which reads as follows:–
“2……
(47)….
(v) any transaction involving the allowing of the possession of any immovable property to be taken or retained in part performance of a contract of the nature referred to in s. 53A of the Transfer of Property Act, 1882 (4 of 1982)”
25 The importance of the word “transfer” is due to the reason that under the charging section, viz. S.45, the capital gain is taxable on “transfer of a capital asset”. Precisely, this section prescribes that “any profits or gains arising from the transfer of a capital asset effected in the previous year shall be chargeable to income-tax under the head capital gains and shall be deemed to be the income of the previous year in which the transfer took place”. (emphasis supplied by italicized print)
26. Thus the fundamental features which determine the taxability of capital gain, are that the gain ought to be from the transfer of a capital asset. This section has a large scope of its operation due to the presence of deeming provision which says that the gain shall be the deemed income of that previous year in which the transfer took place. This phrase can be interpreted in the manner that the total profits may actually be received in any other year, but for the purposes of S. 45, the gain shall be the deemed income of the year of transfer of the capital asset. It shall not be out of context, at this juncture, to mention an observation of the Hon’ble Authority of Advance Rulings in the case of Jasbir Singh Sarkaria, cited supra, that the expression used in sec. 45 is “arising”, which cannot be equated with the expression “received” or even with the expression “accrued” as being used in the statute. The point which deserves notice is that the amount or the consideration settled may not be fully received or may not technically accrue but if it arises from the agreement in question, then the deeming provisions shall come into operation. Another point is also equally noticeable that by the presence of the deeming provision, the income on account of arisal of the capital gain should be charged to tax in the same previous year in which the transfer was effected or deemed to have taken place. Due to the presence of this statutory fiction, the actual year in which the entire sale consideration is received, is beside the point but what needs to be judged is the point of time at which the transfer took place either by handing over of the possession or by allowing the entry into the premises or by making the constructive presence of the vendee nevertheless duly supported by a legal document.
27. But the issue do not get settled only by the interpretation of s. 45 and s. 2(47)(v) because the definition of “transfer” not merely prescribes allowing of possession but to be retained in part performance of a contract of the nature referred in s. 53A of the Transfer of Property Act. Therefore, it is further requisite to deal with the relevant section contained in Transfer of Property Act.
28. Transfer of Property Act contains S.53A under the heading “Part performance” and, for deciding the case in hand, it is necessary to quote the impugned section verbatim as follows:
” Where any person contracts to transfer for consideration any immovable property by writing signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty, And the transferee has, in part performance of the contract, taken possession of the property or any part thereof, or the transferee, being already in possession, continues in possession in part performance of the contract and has done some act in furtherance of the contract, And the transferee has performed or is willing to perform his part of the contract, Then, notwithstanding that the contract, though required to be registered, has not been registered, or, where there is an instrument of transfer, that the transfer has not been completed in the manner prescribed therefor by the law for the time being in force, the transfer or any person claiming under him shall be debarred from enforcing against the transferee and persons claiming under him any right in respect of the property of which the transferee has taken or continued in possession, other than a right expressly provided by the terms of the contract:
Provided that nothing in this section shall effect the rights of a transferee for consideration who has no notice of the contract or of the part performance thereof.”
29. The doctrine of “part performance” is undoubtedly based upon the doctrine of equity. If one party has performed his part of duty then equity demands that the other party shall also perform his part of the obligation. If one party stood by his words then it is expected from the other party to also stand by his promise. Naturally an inequitable conduct of any person has no sanction in the eyes of law.
30. In the light of the ingredients of this section, which has been argued from both the sides, now we proceed to examine the factual matrix of the case in hand, herein below:
(a) Starting words of s. 53A are ” where any person contracts” which means just the existence of a contract. The assessee is the “person” who has entered into a contract with the developer vide agreement dated 12.4.2006.
(b) This sections says “to transfer” means the said contract is in respect of a transfer and not for any other purpose. The term “transfer” is to be read along with the s. 45 and s. 2(47)(v) of I T Act. It is pertinent to clarify that one must not mistake to identify the issue of capital gain with the term “transfer” as defined in s. 54 of Transfer of Property act. At the cost of elaboration, we may like to add that in the past there was a long line of pronouncements; while deciding income tax cases, that unless and until a sale deed is executed and that too it is registered, transfer cannot be said to have been effected. The consequence of said catena of decisions was that no capital gain tax was directed to be levied so long as “transfer” took place as per the generally accepted connotation of the term under Transfer of Property Act. The resultant position was that the levy of capital gain tax thus resulted in major amendments in the income-tax statute. The main objective of those amendments was to enact that for the purposes of capital gains, the transaction involving transfer of the nature referred are not required to be registered under Registration Act. Such arrangement does not include transfer of certain rights vesting to a purchaser; however such “transfer” does confer certain privileges of constructive ownership with connected bundle of rights. Indeed it is a departure from the commonly understood meaning of the definition “transfer” while interpreting this term for tax purpose. On the facts of this case, the developer has got bundle of rights and thereupon entered into the property. Thereafter, we have to see what has happened and what steps the transferee has taken to discharge the obligation on his part. If transferee has taken any steps to construct the flats, undisputedly then, under the provision of Income Tax Act a “transfer” has definitely taken place.
(c) The existence of the “consideration” is the essence of the contract. In this case the amount of consideration has to be paid to the assessee in the form of cash as well as in kind i.e., the flats to be constructed by the developers to be handed over to the owners.
(d) Next is the important phrase i.e., “terms necessary to constitute the transfer can be ascertained with reasonable certainty”. According to us, in this case, the terms and conditions of the contract were unambiguous thus clearly spoken about the rights and duties with certainty of both the signing parties. We are concerned mainly with two certainties; one is passing of substantial consideration and second is passing over of possession. As far as the payment of consideration is concerned, we have already noticed that it is in the form of both cash as well as kind and payment made to the assessee has not been brought on record by the lower authorities and the same to be examined and considered by the CIT(A).
(e) The other factor which governs the happening of transfer is the handing over of possession. This sections says “and the transferee has, in part performance of the contract, taken possession of the property or any part thereof, or the transferee, being already in possession continues in possession in part performance of the contract and has done some act in furtherance of the contract”. Retention of possession is open of the facet of part performance of contract. The agreement in question can be said to be a distinct transaction that has given rise to the event of allowing the contractor to enter into the property. What is contemplated by s. 2(47)(v) is a transaction which has direct and immediate bearing on allowing the possession to be taken in part performance. It is at that point of time that the deemed transfer takes place. According to us the possession as contemplated in cl. (v) need not necessarily be sole and exclusive possession, so long as the transferee is enabled to exercise general control over the property and to make use of it for the intended purpose. The mere fact that the assessee owner has also the right to enter the property to oversee the development work or to ensure performance of the terms of the agreement, did not restrict the rights of the developer or did not introduce any incompatibility. In a situation like this when there is a concurrent possession of both the parties, even then cl. (v) has its full role to play. There is no warrant to postpone the operation of cl.(v) to that point of time when the concurrent possession would become exclusive possession of the developer. Any other interpretation i.e., possession means exclusive possession, shall defeat the purpose of amendment. The possibility of staggering of payment linked with possession is ruled out by this amendment so that the taxability of gain may not be shifted to an uncertain distant date. We have no hesitation in saying that even if some part of consideration remains to be paid, the transaction shall not affect the liability of capital gains tax so as to postpone the same indefinitely. What is meant in clause (v) is the “transfer” which involves allowing the possession so as to allow developer to undertake development work on the site. It is a general control over the property in part performance of the contract. The date of that transaction determines the date of transfer. To our understanding of the language of the Act, it is enough if the transferee has, by virtue of the impugned transaction, has a right to enter upon and exercise the act of possession effectively then such an act amounts to legal possession over the property.
(f) The last noticeable ingredient is, “the transferee has performed or is willing to perform his part of the contract”. To ascertain the existence of willingness on the part of the transferee one must not put stop at one event but willingness is to be judged by the series of action of the transferee. The transferees survey the land and to attract purchases put up hoardings plus sales-office and carry out site development work. Landscaping, sales promotion, execution of construction and completion of project are all incidental to demonstrate the willingness of the transferee. On one hand, the power of attorney grants bundle of possessor rights to the developer simultaneously and on the other hand transferee’s gesture of payment of consideration coupled with development work can be said to be a positive step towards willingness to fulfill the commitment. Facts of this case thus suggest that the developer had never intended to walk-out of the project. However, whether the developer has performed its part of the contract by taking steps to construct the flats or not has to be verified by the lower authorities.
31. To sum up the owners have entered into an agreement for development of the property and certain rights were assigned to the developer who in turn had made the substantial payment and consequently entered into the property and thereafter if the transferee has taken any steps in relation to construction of the flats, then it is to be considered as transfer u/s. 2(47)(v) of the I.T. Act. The fact that the legal ownership continued with the owners to be transferred to the developer at a future distant date really does not affect the applicability of s. 2(47)(v) as per the reasons assigned hereinabove. If the transferee was undisputedly willing to perform its part of the contract even though there is notification bearing G.O. No.111, whereby the Government putting restriction on construction, then we have to hold that there is transfer u/s. 2(47)(v) of the Act. This is because the possession and control of the property is already vested with the transferee and the impugned development agreement has not been cancelled and it is still in operation. Entering into the property and handing over of the possession was instantaneous thus entire conspectus of the case has attracted the provision of S. 45 of the Act on fulfillment of conditions laid down in section 53A of the Transfer of Property Act.
32. According1y, we set aside the above issue re1ating to transfer of property u/s. 2(47)(v) of the IT Act to the fi1e of the CIT(A) to decide the same afresh in 1ight of the above observations and after considering the ratio 1aid down by the Hon’b1e Bombay High Court in the case of Chaturbhuj Dwarkadas Kapadia vs. CIT (supra) and also the order of the Tribunal in the case of Dr. Maya Shenoy V/s.ACIT(124 TT3 (Hyd) 692). This ground is partly allowed for statistical purposes
33. In grounds of appeal No.9 to 11, it is pleaded that the entire search proceedings under S.132 of the Act were initiated in the name of Suresh Kumar D. Shah (HUF) on 9.10.2007 and as such the assessing officer erred in making an assessment of the capital gains in the status as individual which was not the subject matter of 132 proceedings and hence the entire assessment made under S.143(3) read with S.153A in the status of “individual’ on 29.12.2009 is erroneous, invalid and bad in law and is liable to be quashed. It is also contended in the alternative that the CIT(A) erred in confirming the full value of consideration assessable at Rs.16.94 crores in respect of the property which was subject to development agreement; and the CIT(A) has also erred in confirming the value of the land as on 1.4.1981 at a ridiculously low figure of Rs.1000 per acre while computing the capital gains arising out of Development Agreement. We find that the grounds No.9 to 11 have not emanated form the order of the CIT(A) and consequently, the contentions raised by the assessee through those grounds cannot be entertained by us at this stage. We accordingly reject the same.
34 In the result, appeal ITA No.425/Hyd/2011 of the assessee for the assessment year 2007-08, is partly allowed for statistical purposes
ITA No.420/Hyd/2011 : Assessment year 2002-03
ITA No.421/Hyd/2011 : Assessment year 2003-04
ITA No.422/Hyd/2011 : Assessment year 2004-05
ITA No.423/Hyd/2011 : Assessment year 2005-06
ITA No.424/Hyd/2011 : Assessment year 2006-07
35. Effective grievance of the assessee in these appea1s is against the action of the CIT(A) in confirming the additions made by the assessing officer for the relevant years, disbelieving the agricultural income disclosed by the assessee and treating such amounts of income as income from other sources. The amounts of addition involved treating such agricultural income as income from other sources for these years is given below?
Assessment year
Amount
Rs.
2002-03
5,400
2003-04
3,400
2004-05
9,000
2005-06
7,000
2006-07
11,000

36. We have heard both sides and perused the material available on record. The above additions treating the agricultural incomes disclosed as income from other sources have been made, in view of the finding of the assessing officer for the assessment year 2007-08, that the lands in question of the assessee are of non-agricultural nature. Inasmuch as we have upheld the view taken by the lower authorities that the lands in question are of nonagricultural nature, while dealing with the contentions of the assessee on that aspect in the context of appeal ITA No.425/Hyd/2011 for the assessment year 2007-08, vide para Nos.23 and 24 hereinabove, the issue involved in these appeals has to be decided in against the assessee and consequently, the impugned additions made by the Assessing Officer, treating the agricultural income disclosed by the assessee for these years as income from other sources, are liable to be upheld. We do so accordingly.
37. In the result, all the five appeals in ITA Nos. 420, 421, 422, 423 and 424/Hyd/2011 are dismissed and ITA No. 425/Hyd/2011 is partly allowed for statistical purposes.
Order pronounced in the court on 16th December, 2011

Read more: Joint Development Agreement – If Developer has performed or willing to perform his part of the contract, then the transaction would qualify as ‘transfer’ http://taxguru.in/income-tax-case-laws/joint-development-agreement-if-developer-has-performed-or-willing-to-perform-his-part-of-the-contract-then-the-transaction-would-qualify-as-transfer.html#ixzz1ifkSeMBF

Housing firm not responsible for encroachment after delivery of possession of the plot to buyer – Supreme Court

admin — Tue, 29 Nov 2011 07:58:00 +0000

Haryana Urban Development Authority Vs. Viresh Sangwan & ANR(SC)- The housing development authority cannot be held responsible for the encroachments made after possession of the plot had been delivered to the allottees.. Neither the original allottee nor those who bought the property later, could accuse the development authority of “deficiency in service” in the matter of allotment of plot on the ground that some villagers had made encroachment on it. The appeal of the authority was against the National Consumer Commission order which confirmed the rulings of the state and district forums that there was deficiency in service of the authority as the plot had been encroached upon. The Supreme Court asserted that encroachments after the allotment and due to the negligence of the allottees cannot be subjected to consumer complaints.

IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL No.9691 OF 2011
(Arising out of SLP(C)No.33789 OF 2010)
HARYANA URBAN DEVELOPMENT AUTHORITY …….APPELLANT
VERSUS
VIRESH SANGWAN & ANR ……RESPONDENTS
J U D G M E N T
Whether the appellant – Haryana Urban Development Authority (HUDA) is obliged to ensure that no encroachment is made on the plot allotted by it after possession thereof has been delivered to the allottee is the question, which arises for consideration in this appeal filed against the order of the National Consumer Disputes Redressal Commission (for short, ‘the National Commission’) whereby the revision filed by the appellant was dismissed and the orders passed by the State Consumer Dispute Redressal Commission, Haryana (for short, ‘the State Commission’) and District Consumer Disputes Redressal Forum, Gurgaon (for short, ‘District Forum’) were approved.
Plot No. 478 (measuring 335.50 square meters), Sector 12-A was allotted by the competent authority of HUDA to Shri Champat Jain in January 1986 subject to the terms and conditions specified in allotment letter dated 23.1.1986 issued under Regulation 5 (3) of the Haryana Urban Development (Disposal of Land and Buildings) Regulations, 1978 (for short, ‘the Regulations’).
The possession of the plot was handed over to Shri Champat Jain on 27.2.1998 by Shri Om Prakash, Junior Engineer, HUDA, Gurgaon. The allottee accepted the possession and signed the possession certificate, the relevant portions of which are extracted below
“POSSESSION CERTIFICATE
Certified that I Om Prakash Junior Engineer Office of the Estate Officer, Gurgaon have carefully check the relevant paper and the Dimension of plot no. 478 sector 12-A Urban Estate Gurgaon and the size of the plot allotted to Shri Champat Jain s/o___________________ is given as under:-
1 Length of the plot 22.0 m
2 2.Breadth of the plot 17.0+13.50 – 15.25 m 2
3 Area 335.50 sq.m.
4 Rear set Back As per demarcation plan
5 Front set Back
Accordingly, on the basis of above details the possession of the plot has been given to the said allottee/Authorised person.
Sd/-
Junior Engineer
For Estate Officer
HUDA,
Gurgaon.
I Champat Jain s/o Sh. J.C Jain the above named allottee of the Urban Estate, Gurgaon have taken the possession of the said plot as per above dimension, as allotted to me vide Estate Officer Allotment letter No. 1309 dated 23.01.1986.
As per the provision of Regulation 10 of the HUDA (Erection of Building) Regulations, 1979, I hereby note that I will give at least one week’s notice to the Estate Officer before actually commencing the erection of the building on the said site.
Memo No. 1477
Dated 27.02.1998
Name & signature of allottee”
After some time, Shri Champat Jain sold the plot to Devender Yadav and Narender Yadav (both sons of Karan Singh) and revised allotment letter dated 17.11.1999 was issued in their names. After 6 years and 2 months, conveyance deed dated 18.1.2006 was executed between HUDA acting through Estate Officer, Gurgaon and the transferees as per the requirement of Regulation 20 of the Regulations.
Within a week of the execution of conveyance deed, the transferees sold the plot to the respondents by registered sale deed dated 24.1.2006 and re-allotment letter dated 3.3.2006 was issued in their favour. At the time of execution of the sale deed, the respondents did not raise any objection about the total area of the plot or any encroachment made by the villagers.
Even after receiving the re-allotment letter, they did not make a grievance about the encroachment allegedly made by the villagers. However, after 1 year and 3 months, they filed a petition under Section 12 of the Consumer Protection Act, 1986 for issue of a direction to HUDA to allot alternative plot to them by asserting that there was deficiency in service inasmuch as the actual area of the plot re-allotted 4to them was less than 335.50 square meters and there was encroachment on the plot.
In support of their plea, the respondents relied upon report dated 20.4.2007 allegedly prepared by the Junior Engineer of HUDA. In the reply filed on behalf of the appellant, the respondents’ assertion about fresh demarcation of the plot by the Junior Engineer was disputed and it was denied that gates of two houses of inhabitants of the village were found in the area of the plot and chabutra and chhajja had been constructed over the plot.
It was also denied that the plot was being used as passage and the Junior Engineer had expressed his inability to get the encroachments removed. By an order dated 19.11.2009, the District Forum allowed the petition of the respondents and directed the appellant to allot them alternative plot of the same size in the same sector or in an adjoining sector.
For coming to the conclusion that the plot re-allotted to the respondents had been encroached, the District Forum relied upon report dated 20.4.2007 of the Junior Engineer. This is evinced from the following portion of order dated 19.11.2009: “A perusal of case file shows that re-allotment letter bearing no. 1280 dated 03.03.2006 regarding plot no. 478, Sector 12-A measuring 335.50 Sq. Mtrs. was issued in favour of the complainants.
A perusal of report dated 20.04.2007 given by Junior Engineer shows that he has gone to the plot No.478, Sector 12-A for demarcation. After giving demarcation it was found that the doors of the houses of the villages were opened in the plot no. 478 Sector 12-A, Gurgaon and Chabutra and Chajje 5 also existed there. The owners of those houses were creating obstruction in the demarcation of the plot no. 478 as there was no way going the their houses. Previously, a rasta of the village existed at that place.
In view of the above said report given by the junior engineer of the opposite parties, we hold that there was deficiency in service on part of the opposite parties. The complainants are entitled to an alternate plot of the same size in the same sector i.e. Sector 12-A or in a sector adjoining Sector 12-A on the same rates. The present order is ordered to be complied with within one month from the date of passing of this order.
File be consigned to the records after making due compliance.” The State Commission dismissed the appeal by simply repeating the observations made by the District Forum that as per the report of the Junior Engineer, there was encroachment on the plot allotted to the respondents. The National Commission negatived the appellant’s challenge to the order of the State Commission and dismissed the revision filed by the appellant.
We have heard Ms. Anubha Agarwal, learned counsel for the appellant and Mr. Gagan Gupta, learned counsel for the respondents and carefully scrutinized the record. In our view, the finding recorded by the District Forum that there was deficiency in service on the appellant’s part is ex facie erroneous and the Sate Commission and the National Commission committed serious error by confirming the direction given by the District Forum for allotment of alternative plot to the respondents.
Unfortunately, none of 6the consumer forums adverted to the fact that possession of the plot was delivered to the original allottee Shri Champat Jain on 27.2.1998 free from all encumbrances and there is no provision in the Haryana Urban Development Authority Act, 1977 and the Regulations for redelivery of possession to the transferees.
One can easily visualise that after taking possession of the plot allotted to him, Shri Champat Jain did not take steps to protect the same and by taking advantage of his absence at the site, the people from the neighbouring areas may have opened their doors towards the plot or made some encroachment. However, the appellant cannot be blamed for the encroachment, if any, made after possession of the plot was delivered to the original allottee.
The respondents must have executed the sale deed after inspecting the site. If there was any encroachment or the area of the plot was less than the one specified in the allotment/re-allotment letter, they would have immediately lodged a protest with the vendor.
However, the fact of the matter is that the respondents did not raise any objection in this regard and by taking shelter of a manipulative report prepared by the Junior Engineer, they filed complaint and succeeded in convincing the District Forum to ordain allotment of an alternative plot.
In our considered opinion, the appellant cannot be held responsible for the encroachment, if any, made after possession of the plot had been delivered to Shri Champat Jain and neither Devender Yadav and Narender Yadav, who purchased the plot from Shri Champat Jain nor the respondents could possibly accuse the appellant of deficiency in service in the matter of allotment of plot on the ground that some people had made encroachment on it.
In the result, the appeal is allowed, the impugned order as also orders passed by the District Forum and the Sate Commission are set aside and the complaint filed by the respondents is dismissed. The parties are left to bear their own costs.
………………………J. (G.S.SINGHVI)
………………………J. (SUDHANSU JYOTI MUKHOPADHAYA)
NEW DELHI;

Conference on “How to Buy Agriculture Land”

admin — Mon, 30 May 2011 09:42:38 +0000

Presents

Conference On
Agriculture Land Aquisition
Process | Documentation | Due Delligence

Saturday, 4th June 2011, Hall of Culture, Nehru Centre, Worli, Mumbai.

Overview : Agriculture Land aquisition is one of the very complex process in India. We have land Revenue Codes, we have huge documentation and besides all this a long due delligence process required to aquire agriculture land. Individuals aquire for investment, builders aquire for real estate development and corporate aquire for putting up plants and future expansions. The conference will highlight Due Delligence process, Aquisition Process, Documentation, Land Bank Valuation, NA Permission – process & Documentation.

Conference Objectives :
To enhance knowledge on land related laws and aqusition process to stop future surprises while millions of rupees are on the stakes. To have clear idea and knowledge on nature of land deals and ownership patterns.

Conference Contents:
> Documentation and Aqusition Process
> Individual and Corporate aquisition and holding of agriculture land.
> Due Delligence process for aquiring agriculture land.
> NA Permission – process and documentation.
> Valuation of Land Bank for Balanace Sheet Exposures – Assets Class and Stock in Trade.

Fees : Rs.2250/-

Call for Registration : 07498112333, 07498125575, 1800 200 0880

Maharashtra Amends Rehabilitation Law

admin — Mon, 08 Feb 2010 07:06:56 +0000

Maharashtra amends Rehabilitation Law
By Staff Report

The government of Mahrashtra have gone back on their words to allot developed land to farmers who gave land for infrastructure and industrial projects. In December 2009, the state government amended the law that provided farmers developed land in lieu of land acquired from them.
The Maharashtra Project Affected Persons’ Rehabilitation Act, 2009 had a clause that said 12.5 per cent land developed for a project should be given to the farmers from whom the project land is acquired. The amendment, passed during the winter session of the Assembly, has gone away with this clause.
World Bank also, in the past had raised the issue while funding to MMRDA’s project was withdrawn for want of fair deals to displaced persons. Farmers who will be displaced by MIHAN in Nagpur would have been the first to get developed land under the law if it had not been amended. The farmers who have refused to vacate their land are upset over the latest development.
The amendment was made becuase cost of developed land has risen steeply. Project affected persons will now be given alternative land, the state information department said in a press release on 9th December 2009. This is the second amendment in the Act in the past four months. In August 2009, an amendment was made to dilute the clause relating to giving developed land to farmers by adding the options of cash compensation or equivalent Transfer of Development Rights for property development. Those who opposed, like in Navi Mumbai and Reliance SEZ, got permanent reservation of Agriculture use and will not be allowed to give it for residential purposes.

Identify record of Rights or 7/12 extract

admin — Mon, 24 Aug 2009 11:46:50 +0000

TO IDENTIFY RECORD OF RIGHTS OR 7/12 EXTRACT OF AN ADIWASI LAND.

Elavirating further on the specialized subject of restriction of transfer of Adiwasi Lands and it’s relevant factors, I hereby recapitulate some of the eminent points of serious considerations for the general reference of urban public.
(a) Refer Figure given below: It is a copy of record of rights for the land usually known as 7/12 extract. For all lands belonging to Adiwasi it is a statutory obligation on the part of the revenue department to put a rubber stamp (as shown in figure); which means that the land is subjected to the provisions stipulation under section 36 and 30-A of the Maharashtra land Revenue Code, 1966.
Section 36 the Maharashtra Land Revenue Code, 1966, stipulates: “ Notwithstanding anything contained in sub-section 36(1) occupancies of persons belonging to the Scheduled Tribes (hereinafter referred to as the “Tribals”) ; being occupancies wherever located in the State, small not be transferred except with the previous sanction of the Collector.
Section 36 and subsections 1,2,3, 3A, 3B, 3D, 4 are explained at length in my previous articles.
Section 36-A of the Maharashtra Land Revenue Code, 1966, is regarding Restrictions on transfers of occupancies by Tribals. No occupancy of a tribal shall be transferred in favor of any non tribal after the commencement of the Maharashtra Land Revenue code and Tenancy Laws (Amendment) Act, 1974, and more specifically on or after 6th July 1974. Transfers in favor of any non-tribal by way of sale, gift, exchange , mortgage, lease or otherwise, inclusive of sales in execution of a decree of a civil court or an award or order of any Tribunal or Authority is not permitted but except with the previous sanction:-
(a) in the case of a lease or lease mortgage for a period not exceeding 5 years (though Collector).
(b) In all other cases with the previous approval of the State Government; but after vertifying that no other tribal is willing thereof from the same village and /or within 5 kilometers thereof from the proposed tribal’s land.
If the transfer of occupancy to a non-tribal is detected after the commencement of the Maharashtra Land Revenue Code and Tenancy Laws (Amendment) Act, 1974, ( in the contravention of sub section (1), the collector shall should hold sue mote proceedings to declare the transfer to be invalid and shall vest the same in the State Government and can dispose of in such manner as the State Government may, from time to time direct.
If the occupancy is vested in the State Government under subsection (5), the tribal transferor shall be asked to purchase the land within 90 days. If he is willing the occupancy may be granted to him on paying prescribe purchase price and on undertaking to cultivate the land personally. But his total land holdings should not exceed an “economic holding” limits.
In this article I have sincerely attempted to clarify and explain the meaning of rubber Stamp incorporated on 7/12 extracts of all Aiwasi lands as shown in figure above. Section 36 and 36A of the Maharashtra Land Revenue code 1966 are extremely fundamental in understanding laws relating to Adiwasi Lands.
Let me apprehend our readers intellectual that record of rights without this rubber stamp need not be necessarily safe. Very often “Talatis” conveniently forget to put this stamp. Hence complete revenue search should be undertaken to verify the occupancy of land to ascertain that it does not belong to a tribal

Non Agricultural permission

admin — Mon, 24 Aug 2009 11:33:32 +0000

Non Agricultural permission

It is the Permission granted for conversion of agricultural use for various non agricultural uses for the land assessed on used for agricultural purpose. In a simplified version it is just the “CHANGE IN USE” of the land. If the land is assessed or held for the purpose of agricultura it cannot be uised for any other non agricultural purpose without permission. For clear perception it is imperative to study relevant definitions of some of the vital terms like (1) “Agriculture” (2) “Agricultural land” and (3) Agricultural purposes.

Surpassingly the terms “Agriculture” is not defined in the Maharashtra Land Revenue Code, 1966 But it is defined in section 2 (1) of the Maharashtra Agricultural Land (Ceiling on Holdings) Act, 1961. Agriculture is not only ploughing, sowing and reaping of some crops or produce. Its agricultural uses includes, grazing for cattle, breeding of live stock, poultry farming, rabmanure, beekeeping, manure storage etc. Thus the land which is used or capable of being uised for the purpose of agriculture can be termed as “Agricultural Land”.
The procedure to obtain permission for conversion of use of land from one purpose to another is very lengthy and requires professional expertise in the field of revenue laws. The permission is granted under the provisions of sub-section (1) of section 44 of the Maharashtra Land Revenue (conversion of use of land and N.A Assessment) Rules, 1969 to the competent authority having respective jurisdiction of either Tahsildar or the Sub-Divisional Officer or the Collector as the case may be. The application in the prescribed form as mentioned aforesaid can be made by an occupant or a superior holder or tenant with the consent of each other. But the practice of constituted attorney applying on behalf of the landholder is unlawful. On one of the four prescribed forms the applicant must annex one rupee court fee stamp.
The applicant can apply for nonagricultural permission for any one of the three stipulations mention thereunder ; (a) To change the use of land assessed or held for the purpose of agricultural for a nonagricultural purpose (b) To change the use of land held or assessed for nonagricultural purpose for some another nonagricultural purpose (c) To use the land for the same nonagricultural purpose for which it is assessed but in relaxation of any of the conditions imposed at the time of grant of land or permission for such nonagricultural purpose.
The case can be processed only if the submission is substantiated with various documents as under :-
(a) 7/12 or record or rights of the proposed lands in original x 4 copies.
(b) 6 –A Mutation entries in originals x each 4 copies.
(c) 8 – A Khate Utara in original x each 4 copies.
(d) GutBook plan of the concerned land issued & Certified by the District Inspector of land records x 4 copies.
(e) Certified Measurement plan of the land survey form District Inspector of land records x 4 copies.
(f) Layout plan showing internal roads, open spaces e.t.c. duly signed by the applicant and the Architect x 8 copies.
(g) Registration Certificate of the Architect x 2 copies.
(h) Appointment Letter for the Archtiect x 1 copies
(i) Complete revenue search for atleast 30 years x 4 sets.
(j) Power of Attorney for the constituted Attorney if appointed by the landholders x 2 copies.
(k) Grant in right of way document if access road is obtained from the adjoining owners x 2 copies.
(l) N.A. application in prescribed form x 4 copies.
(m) N.O.C. from local authority for conversion of land use x 2 copies.
(n) N.O.C. from pollution Board for Industrial N.A.
(o) N.O.C. from Land Acquisition Department.
(p) Authentic documents to prove existence of adequate water source.
(q) Provisions to be adopted for sewage, drainage and disposal system.
(r) Provisions for adequate infrastructure in the case of vast layouts.
(s) “Sales Permission” for tenanted lands under layout.

The application can be returned back if the applicant is unauthorised signatory or if the submission is incomplete for want of some documents.
The competent Revenue Authority (The Collector, S.D.O. or Tahsildar as the case may be) will initiate proper inquiry through Circle officer of the area for on the spot study of the site to verify the applicants and inspect the site in detail. His report will include written statement endorsed by the applicant and the Architect . The positive site inspection report from the Circle Officer should confirm that the land is vacant and there are no structure. He shall also note the alignment of high tension electrical lines passing above the lands. Any dispute regarding ownership of the land will come to surface during joint site inspection of the site by the Circle Officer.
During the process of granting permission for nonagricultural use complete revenue record of the concerned land shall be thoroughly scrutinized and the permission can never be granted if discrepancies are detected in earlier transfers of occupancy. If a fraud is detected in previous transfers it shall be construed that all the subsequent transfers thereafter are invalid. However irregularities in areas can be rectified by actual survey on site through D.I.L.R. and other ways.
The competent authority i.e. the Collector or the Sub – Divisional Officer or the Tahsildar as the case may be will forward the case papers to the relevant planning authority of the area such as Asst. Director of Town Planning (A.D.T.P.) or BM.R.ED.A. or CIDCO etc. for recommendation whether the proposed nonagricultural use can be allowed or not ? The concerned Planning Authority shall scrutinize the case in detail to ascertain if all the stipulated Development Control Rules are followed or not and shall base their report on the following assertions viz (1) security of Public Health (2_) Contradiction of planned scheme of the area (2) Contradiction of planned scheme of the area (3) Balanced Development (4) Area verifications (5) Availability of infrastructure (6) proposed infrastructure in the schemes etc. At this juncture it is interesting to state that competent Revenue Authority is sufficiently authorised to sanction N.A. Permission inspite of having some objections from the Planning Authority. The consultation of the Planning Authority. The consultation of the Planning Authority is mandatory but the final decision under discretionary powers is with the Competent Authority. In various cases, sometimes Planing Authority is too rigid to apprehend the substance of Planning Concept in relation with the vicinity around and the needs of the people by raising non-practical and vogue objections., The applicant is eligible to refer his case in Appeal to the Direct of town Planning Office for Maharashtra in Pune, if the case is rejected. In such cases till the final decision is arrived the application for N.A shall remain pending.
The case papers shall also be forward to the Land Acquisition Department to verify that the proposed lands under N.A. are not included in the Land Acquisition by the Government; if so N.A. Permission can never be granted.
For Industrial N.A. use case papers shall also go to various Government officers for verification regarding protection form air and water pollution and ecology. If the proposed land in full or part is obtained under “The Bombay Tenancy and Agricultural Lands Act, 1948, obtaining of “Sale Permission” from the competent Authority is an absolute must before granting N.A. Permission. Let me raise a point here that procurement of sale permission in itself is a vast subject and requires tremendous professional expertise and knowledge of the prevalent land enactment’s.
The position of tribal lands is very ambiguous. All occupancies of Tribals transferred in favour of non tribals after 6th July 1974 shall be liable for prosecution under the Maharashtra Land (Amendment) Act, 1974 or generally known as Maharashtra Act XXXV of 1974.
Similarly all the transfers and adiwasi lands to non-tribals affected during the period from 1st April 1957 to 6th July 1974 shall be read with according the to “The Maharashtra Restoration of Lands to scheduled Tribals act, 1975 which is known as Maharashtra Act No. xiv of 1975. But however the non tribal transferee can succeed if the land in question has been put to any non agricultural use on or before the 6th July 1974.
It is generally believed that if no reply is given by the Authority to the Applicant within 90 days from the date of acknowledgement of the application the N.A. permission shall be deemed to hve been granted. If all conditions are fulfilled under section 44(3) of the M.L.R.C. 1966, the permission is deemed to have been granted. It is not in reality granted but the Act of Legislature treats that it is granted. The applicant is not liable to any fine or penalty under section 45.
The levy of Non Agricultural assessment begin from the day on which nonagricultural use begins and not from the date of permission. The commencement of N.A. use is not elaborated in the Code. But it is a question of fact and interpretation. The applicant should sincerely exert himself after obtaining N.A. Permission by operations like leveling, developing or reclaiming the land, Constructing internal roads, drainage etc., thus altering the outlook of the land so as to render it unsuitable for agriculture. The above operations are adequate to establish that N.A. use has commenced. It is not necessary that Building construction activity shall not started to commence N.A. use.
If the applicant fails to inform within one month his commencement of N.A. use he shall be liable to pay fine in addition to N.A. Assessment but such fine shall not exceed Rs. Five Hundred only as per section 44 (5) of the code.

The applicant shall be commence that non agricultural use applied for within one year from the date of the order; failing which, unless the said period is extended by the Collector from time to time, the permission granted shall be deemed to have lapsed as per rule 4 (c) of the M.L.R. (Concretion of use of land and nonagricultural assessment) rules, 1969.
As per section 44(6) of the code after the change in land use a sand shall be granted to the holder in the form in schedule IV if the land is situated outside the jurisdiction of the Planning Authority and in Schedule V if the land is situated within the jurisdiction of the Planning Authority. If the applicant fails to appear before the Collector for execution of sanad within a reasonable time, a notice can be issued to him to the effect that such act of non execution of sanad would entail cancellation of N.A. permission already granted.
The Government is no authorised to alter very or cancel the terms and conditions of a sanad once they are agreed upon between the Government and the occupant, as the sanad is executed by the Collector on behalf of the Governor under Article 299 of the Constitution and it constitutes a contractual obligation. But if the sanad is executed by the collector in his capacity as a revenue officer in exercise of his statutory obligation in favour of private parties; thus Government of revenue officers are empowered to vary; amend or cancel the terms and conditions of the sanad.
Conversion of agricultural use into nonagricultural use without permission is bad in law but a nonagricultural land may be used for agricultural purpose without any permission unless such agricultural use is prohibited under section 43 of M.L.R. Code 1966.
The Collector is bound to give reasons in writing of refusal of N.A. Permission under section 42 of the code to the applicant. On refusal the applicant is entitled for only ONE appeal under section 247 of the code to the Divisional Commissioner.
The Government has power Su motto to revise orders passed by the collator for some specific cause involving public interest even if sanad is executed creating contractual obligation .In such a case the aggrieved party is liable to get appropriate compensation against the cost incurred in setting up the project by commencing N.A. use.
The Regularization of unauthorised use is covered by rule 9 f the Maharashtra Land Revenue (conversion of use of land Non Agricultural Assessment) Rules 1969. For unauthorised use of land in contravention of the provisions of section 44 of the code if the Collector is satisfied that had the holder applied for necessary permission under relevant section his application would have been sanctioned and if it is within the jurisdiction of the planning Authority the unauthorised non agricultural use can be regularised under rule 9 of the following conditions :
(1) The holder shall pay the amount of conversion tax leviable under section 47A within 30 days from the date of regularization and shall pay non agricultural assessment from the very commencement of the use.
(11) The holder shall pay fine not exceeding forty times the N.A. Assessment.
(iii) That the holder shall abide by the conditions specified in Rule 4 and such other conditions as the Collector may deem fit to impose.
However if the unauthorised N.A. use is not possible to be regularised under Rule 9 as described above, and if the Collector is convinced planning Authority with the sanction of the State Government may allow the constructions to remain under Rule 10 subject to the conditions (i) and (iii) in preceding rule 9 and with additional conditions as follows :
(a) Holder to pay composition fee not less than fifty percent of the cost incurred on the offending unauthorised construction or 40 time the N.A. assessment payable on the land with reference to the altered use, whichever is greater and (b) the holder shall agree in writing to demolish the offending unauthorised construction without claiming compensation whenever asked to do so in the public interest, failing which the Collector shall do so at the holder risk and costs.
In exceptional cases the Collector may with the sanction of the State Government reduce the amount of composition fee payable by the holder under conditions (a) of Rule 10 as enumerated here in above if the Collector is convinced about (i) the financial inability of the holder causing him undue hardship and (ii) if the offending unauthorised construction was no constructed by the holder with the knowledge that it was unauthorised.
The holder is eligible for the grant of a sanad from the Collector if his unauthorised non-agricultural use is permitted to be continued under Rule 9 or 10 of the “The Maharashtra Land Revenue” (conversion of use to of land under Non agricultural Assessments) Rules, 1969.
There is one more procedure for the regularization of unauthorised non agricultural use. Under the Collector of Thane’s notification No. REV DESK II/N.A. XI 124 dated 27/09/1978 (N.A.) in various talukas who shall issue provisional N.A. order under Section 45 and 114 of the Maharashtra Land Revenue Code demanding the holder to pay N.A. Assessment and fine (40 times of Assessment). But simply paying of N.A. Assessment and fine does not regularize unauthorised N.A. use. Usually the period of six months is granted to the holder to bring N.O.C. from the Planning Authority and other authorities, failign which the holder is liable to be prosecuted in accordance to the provisions of M.C.R. code 1966 inclusive of the demolition of his structure. The substance behind this procedure is to raise revenue from unauthorised structures and to give constitutional rights to the holder to prove his bonafides that permission may have been obtained if applied before as he was ignorant of the offence he had committed deliberately by flouting all the prevailing rules it is not possible for the holder to get his unauthorised N.A. use regularised under section 47(b) of the M.L.R. Code 1966. Therefore the layman buying part of such unauthorised structure should not be misguided by the grantor of this provisional order of the Additional Tehsildar (N.A.). Such orders are not final N.A. orders.
On receiving N.A. Order the valuation of the property increased manifold. The procedure is intriguing and cumbersome. It invites precise professional expertise. It adds significantly to the credentials of the property as it is a certification from the Government with regards to its immaculate legal and revenue marketable title. Any Indian Citizen in Indian Union inclusive of Andaman and Nicobar but exclusive of Jammu and Kashmir can buy and N.A. property anywhere even if he is not an agriculturist.

Check out before purchasing a flat in Navi Mumbai

admin — Mon, 24 Aug 2009 11:19:38 +0000

Check out before purchasing a flat in Navi Mumbai

Case A: Where the Party outrightly purchases
Flat /Home from CIDCO
Allotment Letter from CIDCO
NOC from CIDCO .
Receipt of payments made to CIDCO.
No Valuation Report required.
No Title Clearance/Search Report needed
Case B : Where CIDCO has given Land to individuals and the party constructs the House.
Agreement to lease (with blank copy of lease deed format) between CIDCO & applicant.
Blue print of building plan approved by CIDCO authority
NOC from CIDCO for mortgaging the Property to LICHFL
Architect’s detailed estimate for Construction of house.
Development Agreement.
In case of Construction of Common Walls : Proof of allotment of Plots to adjoining Plot holders and their NOCs for construction of common walls by the applicant.
Affidavit of not letting the House partially or wholly.
CIDCO’s commencement Certificate for construction.

Case C : Where CIDCO has given Land on lease to builders.
Agreement to lease (with blank form of lease deed attached) between CIDCO and builders.
Commencement letter for construction i.e. Sanction letter from CIDCO.
NOC from CIDCO & Builders for mortgaging property to LICHFL.
Registered agreement for sale between builders and flat purchaser alongwith Registration receipt of the agreement.
Receipts of payments made to builders
NOC from builders in prescribed format.
Blue print of holding plan approved by CIDCO.

Case D : Where CIDCO has given directly to Society
Agreement to lease between DICO & Society (alongwith blank form of lease deed).
Blue Print of building Plan approved by CIDCO authorities.
Commencement certificate issued by CIDCO.
Society’s registration certificate.
List of Society members approved by CIDCO.
NOC from CIDCO & Society for mortgaging property to LICHF Ltd.
Allotment letter issued by Society to the flat purchaser.
Share Certificate.

Additional Requirement if Society assigns development rights to developers / builder.
Development agreement between Society and Builder
Power of attorney from Society and Builder.
Partnership deed of builder’s firm
NOC from builder for mortgaging property to LICHFL.
Registered agreement for sale between builders & applicant with Registration Receipt thereof.

Case E : Resale of CIDCO flat by one person to another
Original deed of apartment between CIDCO & vendor.
Registered agreement for sale between vendor and applicant with Registration Receipt.
NOC from CIDCO for transfer of vendor’s rights in favour of applicant and for mortgaging property to LICHF Ltd.
NOC from Association of Apartment Owners.
Original Allotment Letter of Vendor.

Case F : Where Flat/House constructed on freehold land
7/12 Extract with N.A. permission/City Survey extract.
Agreement for purchases of land, if any.
Title Certificate & Search Report for 15 years.
Development agreement between Land owners & developers.
Partnership deed of developers wherever necessary.
Agreement for sale between Developers/Land owners and applicant duly registered with Registration from Receipt thereof.
NOC from builders.
Blue print of building plan approved by competent authority
Sanction Letter.

Documentation & Clearances for Urban Property

admin — Mon, 24 Aug 2009 11:11:53 +0000

Article I

DOCUMENTS & CLEARANCES REQUIRED FOR URBAN PROPERTY TRANSACTIONS : SALE & PURCHASE

By: Sudhakar Dokhane
(Past President PEATA (I)
It is absolutely essential that every person should have adequate knowledge and information about common documents & clearances required for any property transaction. In the following chapter efforts are made to give elementary information of such documents for the benefit of public, who is generally not aware off its importance. Basic knowledge can help you in saving time, and avoiding unnecessary litigations, and hardships.

The said documents and clearances are classified in 3 categories: -

i) LEAGAL : Part – I
ii) REVENUE : Part – II
iii) TECHNICAL : Part – III

LEGAL DOCUMENTS:

PUBLIC NOTICE

It is advisable that prospective purchaser should consult legal advisor for any real estate transaction and get the documents verified & prepared by him to avoid unnecessary complications later on.

Before purchase of any property i.e. house, flat, plot of land etc. either out right or on lease (beyond 9 years), one should give Public Notice in two daily news papers preferably in English & other in local language i.e. Marathi, Hindi, Gujrathi etc. through the Advocate/Solicitor, asking for objections from any third party/ies having interest in the proposed transaction between seller & purchaser; with a time limit of 15 days from the date of its publications. The public notice consists of name & address of seller, description of property, time limit of notice, name & address of the advocate/solicitor etc. It is precisely mentioned in the notice that if no objections with necessary proofs are received within prescribed time limit the transaction will be completed. This notice will act as legal proof and serve as safety measure to any litigation at later stage. General format of such public notice is appearing hereafter: –

PUBLIC NOTICE
NOTICE is hereby given that Shri / Smt / M/s.____________________________
(Name of Vendor)
residing at ___________________________________ have agreed to sale & transfer of
(Address of Vendor)
their property ____________________________________________________________
(full description of property)
__________________________________________________________________ within the limits of ___________ Municipal Corporation, together with all the benefits, rights, clear and marketable title, free from encumbrances and with vacant possession thereof, to our clients.
Any person/s having any claim/s by way of sale, mortgage, lease, lien, gift, easement, exchange, possession, inheritance, succession or otherwise howsoever in respect to the said property and the same are required to intimate to the undersigned together with proof thereof within 15 days of publication of this notice failing which my clients shall complete the sale/transaction and all such claims, if any, shall be deemed to have been waived and/or abandoned.

Place: ____________
Dated: ____________ Sd/-
______________________________
______________________________
______________________________
(Name & Address of Advocate)

2. AGREEMENT-TO-SALE (SATHE-KHAT):
This is a contract duly executed between the “Vendor” (Seller) and the “Purchaser”, and legally binding on both the parties. Generally this agreement-to-sale consists following details: -
Names, address, age and nationality of the vendor & purchaser.
History of ownership of seller with sequence of documents, and development rights acquired by the developer from the original owner/s; in case developer is seller.
Description of property i.e. Survey No., Plot No., C.T.S. No. etc. and Area of property.
The terms, conditions and convenants agreed by and between the vendor & purchaser according to which the property is agreed to be sold or purchased.
Specifications of constructions and list of amenities and facilities proposed to be provided by the developer/owner, for purchase of built-up properties.
Total purchase value/consideration & schedule of payment according to which the purchase price and other charges are to be paid.
Annexure documents of ownership by way of 7/12 extract / property register card, copy of approved plan / floor plan etc.
Title-Search-Report & Clearance certificate from the advocate / solicitor who has investigated the title of the property, for minimum period of 60 years.
Schedule of property giving description, location & area of the property agreed to be purchased/sold.
Notes: –
It is mandatory to register the agreement to sale with respective Registrar of
assurances within 4 months by paying adequate stamp duty & registration charges.
Please note that unregistered agreements/deeds are not considered by the
financing institutions and the Court of Law incase of litigations.
More information on payment of Stamp duty & registration is given
separately in other chapter.

DEED OF CONVEYANCE / TRANSFER (KHAREDI-KHAT) :
This is an instrument of absolute transfer of all rights, title and interest of “vendor” (seller) and all his heirs, nominees etc. in perpetuity in favour of “purchaser/s”. The contents of this documents are more or less same as described in item No.2 (i.e. agreement to Sale) above.
In case of conveyance of multi ownership apartment schemes, all the flat purchasers have to form, a body, either by way of a Registered co-op. hsg. society/Apartment condominium to enable vendor to give/execute the conveyance of the building along with the land thereon infavour of such body/ies; as the case may be; at the end of completion of scheme.
Notes: i) This document is also required to be registered by paying stamp duty & registration charges; as stated in item No.2 above.
However the credit is given for the stamp duty paid initially by the flat purchaser/s while registering their agreement-to-sale, at the time of registration of the conveyance.

LEASE DEED :
It is also a contract by which one conveys real estate equipment or facilities for a
specified term and for specified rent; duly executed between the “Lessor” & “Lessee” and legally binding on both the parties for the lease period. Salient features of the lease deed are described below: -
The contents of the lease deed are more or less same as described in item No. 2 (Agreement to Sale) above with following different clauses: -
The vendor & purchaser so described in case of agreement to sale / conveyance are termed as lessor & lessee in this deed.
Lease period varies generally from 30 years to 999 years, or any period beyond 9 years, so agreed.
At the end of expiry of lease period, the lease is required to be renewed for further period on the terms & conditions, if renewal provisions are recorded in original lease deed.
Description of monthly/yearly lease/ground rent and premium payable by the lessee to the lessor.
Specific rights of development / constructions granted to the lessee, by the lessor.

In this transaction the ownership of land always remains & vests with lessor alone. By and large the lands belonging to the State/Central Govt. and public bodies such as Municipal Corporations, Port Trust, CIDCO, MHADA, MIDC etc.; (who provides necessary infrastructure for the development) offer their lands on lease basis, to public, with minimum lease period of 60 to 99 years, where the lessee is permitted to construct premises on the said land for specific users permitted, on the terms & conditions recorded in the lease deed.
Note: The lease deed also attracts stamp duty & registration charges.

5. AGREEMENT OF LEAVE AND LICENCE :
This is a short-term contract (not more than 9 years) executed between “Licensor”
& “Licencee” and is legally binding on both the parties. Under this contract the licencee is permitted to use the premises, fittings & fixtures provided therein against monthly compensation payable by the licencee to licensor. The contents of this agreement are more or less similar to as described in item no.2 above.
Some of the important clauses of this agreement are as under: -
The term of licence shall always be less than 9 years.
The Licence can be renewed for further period if so provided in the agreement.
During the subsistency of agreement the licensor always remains the owner of premises; and the licencee has no rights other than granted in the contract.
The licencee can be evicted after licence period is expired.
The contract agreement can be executed on Rs.20/- court fee stamp paper. It is essential to register the contract to avoid litigations in later stage.

6. DEED OF ASSIGNMENT:
This is an Indenture by which the property can be transferred to be held in trust, for the benefit of assignee/s and or creditors. The contents of this document are more or less same as described in item no.3 deed of transfer / conveyance above.
This document is executed between “Assignor” & “Assignee” by which the assignor assigns all his right, title, interest in the property to the assignee on the same terms and conditions according to which such rights are hold by the assignor, in perpetuity or the specific time limit as recorded in the document; and same is legally binding on both the parties.
Generally the deed of assignment is made in favour of assignee by assignment of rights of tenanted or leased assets, only when the assignor is empowered specifically for the assignment rights if so granted by the land lord, lessor etc. and not other wise.
The registration of this document is also compulsory for giving necessary effect of transfer in Govt. record. Un-registered document is not entertained by the court of law.

7. GIFT DEED :
This is a document executed by a “Donor”, voluntarily transferring his rights & interests in the asset in favour of “Donee”. In such case donee becomes a recipient of gift.

This document also consists of name, address, age, nationality of the donor & donee, the description and value of asset being gifted, place & date of execution as required for transfer of documents. By this document transfer of rights in favour of donee are in perpetuity which in other words can be termed as absolute transfer.
The assets so transferred under Gift Deed by donor to donee can be out of love affection; or special goodwill gesture; either in favour of any relation or otherwise.
This documents attracts the stamp duty and should be registered with registrar for giving proper effect of such transfer in Govt. records.

8. AGREEMENT OF TENANCY : RENT CONTROL ACT
This is a contract executed between “Land Lord” & “Tenant” for use and occupation of the premises by the tenant against payment of monthly rent, which will remain valid and subsisting till the monthly rent is paid regularly to the land lord by the tenant.
Due to the provisions of Bombay Rent control Act and its amendments the land
lords are reluctant to give their specifically residential premises on monthly tenancy basis since it is almost impossible to evict the tenant and acquire the possession of the tenanted premises. On an average at present the tenancy agreements generally are executed for commercial premises.
With new Maharashtra Rent Control Act 1999, now the landlord is entitled and can charge: -
4% increase in monthly rent per year.
Official premium (Pagree) for transfer of tenancy.
Under this contract the landlord & tenant has to observe & discharge following
obligations:-
Land Lord: –
The landlord has to keep the premises in tenantable conditions.
The landlord can charge the monthly rent equal to permitted standard rent only.
The landlord has to pay property taxes and water charges to the local authority.
The landlord can evict the tenant for non payment of monthly rent and or for using the premises for the purpose other than users permitted, any time during the tenancy.
The landlord has to transfer the tenancy in favour of legal successor in case of the death of the tenant.
The landlord shall remain absolute owner of the premises so tenanted for all the time.
The landlord can take interest free deposit an amount equivalent to THREE months’ rent from the tenant, before granting tenancy, and has to refund the same on surrendering the tenancy rights & handing over the premises.
The landlord can not evict the tenant unless a breach is committed of any of the conditions of tenancy agreement by the tenant.
Tenant: -
The tenant has to pay monthly rent in time (Generally on or before 5th date of respective month) to the landlord; and also has to pay permitted increase in rent, and other charges so provided under the contract or by statute.

The tenant has to use the premises strictly for the same users as permitted under the contract.
The tenant can not make any structural additions or alterations and or do any such work which will endanger the building or the tenanted premises, without specific permission in writing from the landlord.
The tenant can not sub-let, under-let, give premises on leave & licence basis or create any third party rights in any manner whatsoever, any time during the validity of tenancy unless it is specifically provided & permitted under the contract, by the landlord.
The tenant has to pay electrical consumption charges and any other expenses so recorded in the contract.
The tenant can not object the landlord for any balance development or redevelopment of the property provided that the landlord assures and agree the tenancy rights of tenant as the case may be.
The tenant has NO right to use any other part of building or property of the land lord, and his rights shall remain Limited to the use of tenanted premises only throughout.
If the building is destroyed by any natural calamity such as flood, fire or earth quack, the tenant automatically looses his tenancy rights in the demised premises.
The tenant has to use the premises in decent manner and shall have to keep it in tenantable conditions throughout.
The tenant can not claim ownership in any manner whatsoever, of the tenanted premises or any other part of building or property of the landlord any time.
The tenant can be evicted by the landlord, if the tenant commits breach of conditions of the contract so accepted and agreed by him.

The format of the tenancy agreement is more or less is similar to the agreement of
lease / leave & licence described above in this chapter.
Notes:
i) Under the provisions of the Maharashtra Rent control Act 1999, it is a
responsibility of the landlord to register the tenancy agreement, under the Registration Act 1908.
ii) For detail information please refer “The Maharashtra Rent Control Act 1999”, applicable w.e.f. 31.3.2000.

9. WILL / TESTAMENT & PROBATE:
This is a written declaration made & executed by a person by which one determines the disposition of his estate to take effect infavour of beneficiary / ies only after his death and not otherwise.

This document generally consists of following: -
Name, address, age, nationality of the person making a will.
The names, addresses, age, relationship of persons who are named as the beneficiary/ies in the will.
Details of moveable & immovable assets and its value.

Details of the distribution of such assets, its nature, share and value granted to the beneficiary/ies in the will.
The place and date of execution of the will.
Minimum two witnesses, with their names, addresses in whose presence a person has signed & executed the will.
Notes:
A person can make as many wills during his / her lifetime, canceling his/her earlier will/s.
In a testament a person can record the wording in the document as a Final or Last Will.
The will can be executed on plain paper.
The will can become operative only after the death of such person and not other wise.
A person making a will should be in sound mind and health at the time of execution of will & he should record such confirmation in the will. In case of will made by very aged person with poor health, it is advisable to take appropriate statement / certificate from the medical practitioner where he confirms that the person making such will is of sound mind.
To avoid unnecessary litigations, it is required to obtain PROBATE from the court of law to establish the will as genuine and valid.
The probate court has jurisdiction chiefly over the probate of wills and also administration of the estate of deceased person.

10. POWER OF ATTORNEY :
This is a legal instrument executed by the “Grantor” & “Grantee”, by which
he/she appoints and authorise a person/s to act as his/her true and lawful agent/attorney to transact any or all business on his/her behalf; and legally binding on both the parties to the extent of powers so granted.
The power of attorney is granted by the owner to the representative of the developer, in case the development rights are granted to the developer.
It is essential that such power of attorney should be registered by paying adequate stamp duty and registration charges.
Following are some of the salient features: -
The grantee is commonly known as “Constituted Attorney (C.A.)” of the owner/s.
The grantee can not act beyond the scope of powers granted to him/her, by the grantor.
The power of attorney can be granted for limited purpose and acts; as well as for all the acts and deeds for unlimited time, so provided.
The power of attorney, unless irrevocable, can be revoked by the grantor for any contempt or breach of powers by the grantee.
The grantee can substitute the powers to any third party if so agreed by the grantor and specific clause of substitution is recorded in the power of attorney.
The power of attorney becomes automatically invalid, null and void upon the death of the grantor; and can not be used or exercised by the grantee there after.
Un-registered power of attorney is not entertained by the Court of law in case of litigations.

11. TITLE SEARCH & TITLE CLEARANCE CERTIFICATE :
For sale or purchase of any property it is essential, that the property must hold
clear & marketable title i.e. the property is saleable and is free from any defective rights. Before purchase of any property, it is required to examine the documents of ownership in Govt. revenue records; to ascertain as to whether the property has clear and marketable title and to confirm as to whether it is affected by any encumbrances, rights or interests of any third party, The purchaser through his advocate/solicitor should investigate in this matter before entering in to an agreement.
For investigation of title, the advocate/solicitor or his authorised search clerk make the inquiries with the office of Talathi, Tahasildar, City Survey Officer, Collector etc. and collects the information of mutation entries related to the ownership of the property from Govt. revenue records; for the last minimum 60 years; and prepares the report on the sequence of change of ownership from one hand to other up to date; along with all the information of third party rights if any. This exercise is called “Title Search Report”.
Based on the Title Search Report, response to public notice, and examination of title deeds (i.e. original conveyance / sale deeds declarations and other revenue & public documents more particularly described in the chapter of “Documents of Ownership”) the advocate/solicitor concern after getting satisfied that there is no risk to purchase the property, issues “Title Clearance Certificate” to the effect that the property holds clear and marketable title together with search report.
The title clearance certificate consists of following information: -
Name of present owner/seller and sequence of change of ownership, & third party rights if any.
Description of property i.e. Plot No., Scheme No., Survey & Hissa No., City Survey No., Name, Village, Taluka and District and Zone in which the property falls.
Area of property.
Short notes and findings from search report.
Certification of clearance and marketability of title of the property.
Note: Such title certificate is not required for the lands owned by State or Central Govt.

12. DECLARATION :
It is a document of written affirmation made by a party (“Declarant”) for the use
of legal transaction (Not under oath) declaring certain facts related to the title, ownership
or interests in the property. These declarations are made by the owner and or his/her heirs or co-owners of the property or any other person having rights & interests in the
property thereof. The Declaration so made is legally binding on the Declarant to the extent of the statement made.
The Declaration can be made on Rs.20/- court fee Stamp paper.
The Declaration contents: full name, address, age, nationality of the declarant, and the items of declarations followed by the place & date of the declaration executed.

It is advisable to get the said declaration notorised by the Notary Public appointed by the State Govt.

13. AFFIDAVIT :
This is a document of written declaration on oath; by the owner, co-owners or
any party having rights & interests in the property; and is legally binding on the person/s concerned. The affidavit in property transactions are executed by the owner on behalf of his/her minor children regarding their interest in the property.

The affidavit consists of following: -
Full name, address, age, nationality of the person making affidavit.
Items of affidavit followed by place where affidavit is executed and date of execution.

Notes: i) The affidavit can be executed on Rs.20/- Court fee stamp paper.
ii) It is advisable to get the affidavit notorised by the notary public.

14. UNDERTAKING :
This is a written statement made by the person legally binding on him/her. In this
document the person concerned has to undertakes and agrees to comply with the obligations as stated therein.
The contents of undertaking are identical as mentioned in the item 13 (Affidavit) above. Such undertakings are given by vendor/seller for discharging specific performance during time limits prescribed therein.

Notes: i) The undertaking can be executed on Rs.20/- Court Fee Stamp paper.
ii) It is advisable to register the undertaking with Sub-registrar as unregistered undertakings are not considered in Court of Law in case of litigation.

15. INDEMNITY BOND :
This document is a writing of obligations agreeing to perform the contract
executed by one party (Indemnifier) to other. For the other party, it is a document if security against damage, loss or punishment, guaranteed by the Indemnifier, where the Indemnifier is liable to bear and pay the compensation against any loss or injury caused to the other party so indemnified.
The basic structure of the Indemnity Bond except specific indemnities, is one and the same as described in item No.13 above.

Notes: i) The Indemnity Bond is required to be executed on Rs.100/- Court fee
stamp paper.
ii) It should be notorised by notary public appointed by the Govt.

16. (EXTRACT OF) INDEX NO.: II :
This is an extract issued by the Registrar / Sub-registrar in a format for the
documents registered with their department; as an official confirmation of recording the transaction / document in their records. It is essential to obtain this confirmation (Index – II) as the same is required for all revenue authorities for giving effect to the transfer of ownership in their records such as 7/12 extracts & property register cards etc.

Index – II extract consists of following information: -
Nature of deed and amount of consideration.
Description of property such as Plot No, Survey and Hissa No., City Survey No. etc.
Area of property.
Assessment details of property.
Name/s of executing party (Transferor).
Name/s of claming party (Transferee).
Date and place of execution of document.
Date of Registration.
Serial No., volume & page of register in which the document is recorded.
Remarks.
Note: (Format of Index II is given as “Annex- D”).

DEED OF CONFIRMATION :
This is a legal document to be executed by and between the parties confirming
any prior execution of agreement / document which could not be registered within specific time limit. This deed consists the reconfirmation of all the terms and conditions according to which previous agreement is signed and executed by both the parties.
Notes: i) This can be executed on Rs.20/- Court Fee Stamp paper.
ii) Any executed documents must be registered within 4 months from the date of its execution.
iii) The registrar can grant additional time of 4 months on the application if satisfied with the reasons of delay.
If the executed document could not be registered for any reasons beyond 8 months from the date of execution then the parties has to prepare a separate “Deed of Confirmation” as stated above and it has to be attached with original documents for the purpose of registration.

PART – II
REVENUE DOCUMENTS & CLEARANCES
1) 7/12 UTARA :
It is a revenue document of ownership mainly for agricultural and rural lands issued by the Talathi of the respective village in which property falls. It contains name of
owner, description of property i.e. Survey No. & Hissa No.; Area of plot and Mutation entry Nos., of any encumbrances by way of loan, charge, protected tenant etc. and tenure of land. This document is always available in local language of the State. In Maharashtra it is in Marathi. Format document is given at the end (“Annex. A”).
Validity of this document is 6 months from its date of issue.

6/12 UTARA (PHERFAR PATRAK)
It is also a revenue document showing the details of mutation entries showing
charges or encumbrances of any nature i.e. transfer, assignment, partition, mortgage etc. popularly known as “Pherfar Patrak”. (Annex. B)

3) PROPERTY REGISTER CARD :
It is also a document of ownership similar to 7/12 UTARA described above, with all its contents mainly applicable for urban areas. This is issued by the concern City Survey Officer of respective Zone. It is essential to have endorsement of area of plot in
figures as well as in words on this document as per present policy of the Govt. format document is attached at the end. (“Annex. C”)
Validity of this document is ONE YEAR from the date of issue.

4) CITY SURVEY PLAN :
This is a plan prepared and issued by the concerned City Survey office showing the boundaries of the plot and existing structures if any thereon. Format document is attached as “Annex. E”.
The city survey officer on request can carry out survey and demarcate the boundaries of the plot and issue plan of demarcation to the applicant.

5) NON-AGRICULTURAL PERMISSION (N.A. PERMISSION) :
This permission is essential from the Collector, when the tenure of land is changed from agriculture to nonagricultural purpose for residence, commercial & industrial use / development. The applicant has to apply in format together with the check list of document as described bellow. This permission is generally issued within a period of 30 days. As soon as the N.A. permission is granted the applicant has to pay conversion charges & N.A. assessment taxes to the office of the Tahasildar concern.
Note: N.A. permission is not necessary for the development in island city of Mumbai, but required for developments in rest city of limits of Gr. Mumbai. (Western & Eastern Suburbs)

Check List
i) Application in format, and copies of: -
ii) 7/12 Utara.
iii) Property register card.
iv) City survey plan.
v) Exemption order under Urban land (Ceiling & Regulations) Act 1976.
vi) 5 sets of approved plans & I.O.D. (letter of approval).
vii) Copy of previous N.A. permission if issued.
Notes: i) Please note that for any application to revenue authorities a Court fee
stamp of Rupee 1/- must be affixed, other wise the application will not be accepted.
ii) For the benefit and knowledge of all concerned, the information of Revenue authorities, its officers, powers, fees/charges payable for
obtaining copies of revenue records together with their addresses is appearing in Chapter – III.
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PART – III
TECHNICAL DOCUMENTS & CLEARANCES

APPROVED PLANS:
The Local planning authority i.e. Municipal Corporation/Council, approves the
plans of proposed development as per rules & regulations prescribed.
The plans of proposed development submitted by the architect along with necessary documents are scrutinised, and after getting satisfied, the local planning
authority through its authorised officer grants its approval to the proposal subject to compliance of certain terms & conditions. The approved plans are issued in duplicate, i.e. copies to the owner & architect.
In Gr. Mumbai, The Municipal Corporation issues the approval under section 337 & 342 of BMC Act 1888. The approved plan bears signatures of owner, architect, beside municipal stamp of approval with case / file number, date of approval and is signed by the authorised officer of the Corporation.
Validity of approved plan is ONE year and requires revalidation every year thereafter.

2) LETTER OF APPROVAL / I.O.D. (INTIMATION OF DISAPPROVAL) :
Along with approval of plans, Municipal Corporation / Council, issues letter of approval in their format. In Mumbai it is popularly known as I.O.D. (Intimation of Disapproval). People get confused for the long form of I.O.D. and are reluctant to accept it as letter of approval. In fact even though it is termed as intimation of disapproval, it should be read in its positive form; which means the I.O.D. is a letter of approval subject to compliance of terms & conditions mentioned therein.
Validity of Letter of approval (I.O.D.) is ONE year unless revalidated yearly.

Note: Please note that only approval of plans and issue of I.O.D. (letter of approval) by the Municipal Corporation of Gr. Mumbai, is NOT a development permission unless it is clubbed with commencement certificate issued under section 44/69 of M.R.T.P. Act. 1966, by the authorised officer of the Corporation.

3) COMMENCEMENT CERTIFICATE :
It is a development permission under M.R.T.P. Act 1966, issued by the Local Planning authority. It is generally issued together with approved plans & letter of approval in other cities except in Gr. Mumbai.
The Municipal Corporation of Greater Mumbai, issues commencement certificate only after compliance of terms & conditions of the letter of approval (I.O.D.) by the applicant. This permission is popularly known as “C.C.” (Commencement Certificate).
Validity of Commencement Certificate is ONE year from its date of issue.
This can be revalidated yearly for further 3 times (Total 4 years) within which period the applicant has to start the work. If for any reasons work is not started within the above period; the applicant has to seek fresh development permission. In case the property is subjudice revalidation period can be extended.

Notes: a) Only after obtaining commencement certificate the applicant is entitled to
start the work and not otherwise.

The work carried out without C.C. is treated as unauthorised and is offence under MRTP Act, which attracts penal action and proceedings against the applicant.

4) ESSENTIAL TECHNICAL INFORMATION ONE MUST KNOW :
The consumer should have adequate knowledge and information about certain technical terms commonly used in property transaction. To ensure clarity and confidence while executing any real estate document, some of the important informations are detailed below: -

Carpet Area:
It is an internal area of each of the room (including toilets, passages/lobbies,
balconies etc.) calculated by the internal dimensions of respective rooms measured inside from wall to wall.

Note: For the purpose of stamp duty & assessment taxes, areas of open balconies are considered 50% and 100% area for enclosed balconies whether merged or not.

Built-up area:
This is a plinth area of premises measured out to out, inclusive thickness of
external walls, peripheral to the respective premises.

Super Built-up area:
There is no definition of super or delux built-up area anywhere in regulations.
This concept is designed by the developers and is in practice for over a decade, wherein built-up areas of common services such as staircase/s, lifts, common corridors/passages leading to flats, are proportionately added to the net built-up area of each of the unit. The total of built-up area measured as described in item (b) above plus (+) proportionate area of common services is generally known as Super Built-up Area.

CLEARANCE FROM COMPETET AUTHORITY UNDER URBAN LAND (CEILING & REGULATION) ACT 1976:

The Urban Land (Ceiling & Regulations) Act came in force on 17.2.1976 with a view to create more housing stock & to bring housing within affordable limits of
common man. All the vacant properties in urban areas of all the states wherever act is applicable, in excess to permissible limits as described in the act, attract the provisions of ULC Act 1976, and such excess vacant lands are deemed vest in Govt. on 17.2.1976.

Permissible developments: –
However Govt. through its appointed competent authority, can permit development on excess surplus (urban) vacant land (SVL) under section 20 of the Act; with following general conditions: -

50% Flats should have plinth area up to 40 Sq. Mtrs.
50% Flats are permitted with plinth area up to 80 Sq. Mtrs.
Specific percentage (not exceeding 10%) built-up flats are to be reserved and surrendered to the Govt. for their nominees; at subsidy selling price.
The selling price of remaining 90% flats is also decided by the Govt. while issuing such permission.
The flat so purchased under this scheme can not be transferred for 5 years.
Scheme should be completed within 5 years, however necessary extension of time can be granted on the merit of the case from time to time.

The redevelopment of existing built-up properties in urban areas wherever the
act is applicable, can be permitted by the competent authority u/s 22 of the Act. Some of the salient features of this permission are as under: -

The developer / owner has to rehouse all the existing tenants/occupants in the redevelopment scheme.
Plinth area of each flat should not exceed 80 Sq. Mtrs. except to the extent of larger areas of flats in existing occupied structures.
There is no restriction on sale price.
Scheme should be completed within 5 years, however necessary extension of time can be granted on the merit of the case from time to time.

C) IMPORTANT NOTES:

The properties owned by registered co-op. hsg. societies, State and Central Govt. & such statutory bodies do NOT attract the provisions of ULC Act.
Any excess vacant land, or land with building thereon in urban areas where ever ULC Act is applicable, can NOT be sold and transferred without necessary clearance / exemption order from the Competent Authority.
The address of Competent Authority in Mumbai:
The Additional Collector & Competent Authority UL (C & R)
Mumbai Urban Agglomeration, New Administrative Building,
Housing Board Colony, (Near Chetna College), Bandra (E), Mumbai – 400 051.

CLEARANCE FROM CHARITY COMMISSIONER:
For sale or purchase of properties owned by charitable trusts, it is essential to obtain necessary permission from the charity commissioner, under Bombay Public Trust Act 1950 before execution of agreement.

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Sale & Purchase of Agriculture Lands

admin — Mon, 24 Aug 2009 11:10:36 +0000

Article II

Series on
SALE & PURCHASE OF AGRICULTURAL LANDS

Part I
By: Sudhakar Dokhane
(Past President PEATA (I)
For last decade or two, higher income group people residing in urban areas are buying agricultural lands for the purpose of construction of farmhouse, gardening, farming & horticulture; mainly to spend some days in the company of nature. Some time agricultural lands are purchased for business income out of cash crop products, and income tax exemptions on such income.
However very few people are aware of the revenue rules, regulations and provisions, and some time land in to troubles if such lands are purchased merely on advice of agents without proper investigations; and advice of legal experts in the field.
Following information on the subject will give adequate knowledge while executing transaction of agricultural lands, permissible developments & uses etc.: -

CLASSIFICATIONS OF AGRICULTURAL LANDS:
The agricultural lands are mainly classified in three categories: -

Bagayeet (Wet Crop) Lands:
These type of lands remains under cultivation for all types of crops,
horticultural products, vegetable, nurseries etc. through out the year by using reserve water sources i.e. wells, rivers, canals etc.

Jirayeet (Dry Crop) Lands:
These lands are mostly dependent on monsoon for cultivation where other
water resources are not available. Such lands are mainly cultivated for Jawar, Bajari, Wheet, Dals and such crops once in a year.

Padik (Barren) Lands:
These lands mostly consist of rocky soil where cultivation is not possible
easily. In other words these are non-cultivable lands.

OWNERSHIP CLASSIFICATIONS:
Private Ownership:
Private ownership lands are divided in two categories: –

Kabjedar : -
The agricultural lands owned and cultivated by the holder are private ownership lands. The ownership of such land is permanent in perpetuaty and the holder is entitled to sale such lands. The owners under this category are termed as Kabjedar or Bhooswami in revenue records of 7/12 extract.
32-G Lands : -
Lands under this category are also private ownership lands, which are
allotted to kool for cultivation, against payment of yearly rent payable by the said kool to the land lord.
Under the provisions of (protected) Tenancy Act (Kool – Kayada) the lands under cultivation by such tenant as on 1-4-1957, such kool being statutory purchaser automatically becomes the holder of such land, had it been the said tenant has paid appropriate value (Nazarana), to the Govt. and have obtained a Sanad / Certificate under section 32/M of the Act and thereafter such land can be sold and not otherwise.
In some of the cases even today it is seen that the encumbrance i.e. 32-G is mentioned by way of mutation entry in the other right’s column of 7/12 extract. Which means that the said tenant (even in possession of land) has not paid appropriate value (Nazarana) to the Govt. and obtained necessary Sanad/Certificate under section 32-M of the Act, and to that extent the land is encumbered. In such circumstances the holder can not sale such land unless the appropriate value (Nazarana) is paid to Govt. and necessary Sanad/Certificate /Permission is obtained.

Note : It is advisable that the purchaser of such lands (32 – G) should verify the
compliance of above obligations by the holder before execution of transaction.

Govt. Ownership:
The lands NOT owned legally by any person as well as lands declared as forests,
and lands covered under sea bed, creeks below high water mark, rivers, nallas, lakes, tanks etc. are normally Govt. lands unless private ownership is mentioned in 7/12 extract.
The State Govt. can award their lands to private individuals on certain terms and conditions for cultivation; which are known as under:-

Inami / Vatan Lands:-
The lands awarded by the State Govt. to religious trusts, temples or to a
person for his distinguished services, for their use and occupation; are Inami / Vatan Lands, which can not be transferred by such person or body holding inami / vatan rights, without permission of the Govt. However this category is no more operative as the inami / vatan rights are abolished by law.

Khalsa Lands: -
The lands of which inami / vatan rights are abolished are known as
Khalsa lands, even though are in private possession. Such holder can not sale khalsa lands without prior permission of Govt. The State Govt. can permit sale only after recovering appropriate value (Nazarana) from the seller as determined by the Collector, and not otherwise.

Note: It is essential for purchaser that where the charge of Govt. is mentioned as Khalsa in 7/12 extract, he should verify & confirm that the permission for sale
& transfer is obtained from the Collector and appropriate value (Nazarana) is paid to Govt., prior to transaction.

Tribal (Adivasi) Lands: -
The lands allotted by the Govt. to adivasis for cultivation known as Trible
Lands. Sale & transfer of such lands in any manner whatsoever in favour of non-tribal, is strictly prohibited unless specifically permitted by the Govt.
Any transaction of adivasi/tribal lands, without permission of Govt. is illegal and will not be entertained by court of law. Even no pleader or advocate can appear or represent before collector/commissioner on behalf of non-tribal purchaser.

WHO CAN PURCHASE AGRICULTURAL LAND ?
ONLY an Agriculturist of any state of India can purchase agricultural land/s in
state of Maharashtra. (Non-Agriculturist is prohibited from purchase of agricultural land by law).
The purchaser agriculturist has to produce proof of he being an agriculturist by submitting 7/12 extract in his favour, to the land revenue officer – Talathi of the respective village, without which ownership of such purchased agricultural land/s can not be transferred.

Note: If wife or husband prior to her or his marriage, either of is an agriculturist the other automatically becomes agriculturist and there after their children by succession.

LAND USES:
The agricultural land can be used for the following purposes:

Cultivation & Farming.
Producing dry or wet crops.
Horticulture-for growing fruits, vegetables, flowers, nursery, ornamental & medicinal plants etc.
Construction of wells, tanks, or such water reservoirs.
Construction of cattle & storage sheds for crops and agricultural instruments.
Construction of house for self & servants’ use.

Note: i) Above users are not treated or considered as Non-agricultural.
ii) No agricultural land or its part is allowed to be used for non-agricultural (N.A.) purpose i.e. for housing, commercial or industrial use; without specific permission from the Collector.
iii) The Collector can issue N.A. permissions provided such lands are covered by the development plan approved by the appropriate authority of the Govt.; for the respective users permitted in the said development plan.

WHAT IS FARM HOUSE AND HOW IT CAN BE USED ?
Any holder of land, which is assessed or held for the purpose of agriculture is
entitled to construct residential accommodation on agricultural land, popularly known as “FARM HOUSE”; which can be used for following purposes :

Residence of family, servants & tenants.
Storage sheds for agricultural products.
Cattle Shed/s.
Storage sheds for instruments and accessories required for cultivation.

6) WHERE CONSTRUCTION OF FARM HOUSE IS PERMITTED ?
In rural areas the farmhouse can be permitted on agricultural lands by the permission of appropriate local revenue authority.
In urban areas local planning authority can permit farm house in the following manner:
Within city limit or beyond 8 kms. of peripheral areas of Pune, Nagpur, and Gr. Mumbai Municipal Corporation limits.
In rest of A, B & C class Municipal Councils, within city limit and beyond 3 kms. peripheral area.
Following table shows the minimum area of land/plot where farm house can be constructed with its plinth area & height of structure permissible thereof : -

SR. NO. AREA OF PLOT/LAND NUMBER OF FARM HOUSES PERMITTED MAXIMUM PLINTH AREA PERMITTED MAXIMUM HEIGHT OF STRUCTURE AND FLOORS PERMITTED
1 Minimum 4000Sq. Mtrs.
&
Maximum 6000Sq. Mtrs.
ONE
150 Sq. Mtrs.
5 Mtrs. above Plinth

Single Floor House.

2
Above 6000 Sq. Mtrs.
More than ONE
1/4 of the plot area or maximum 400 Sq. Mtrs.
Note:
If Farm House is to be used for Owner & tenants’ residence then plinth area shall be restricted to 150 Sq. Mtrs.

5 Meters above Plinth

Single Floor House.

WHERE FARM HOUSE IS NOT PERMITTED ?
Farm House will not be permitted by the authority in the following cases: -
If area of agricultural land is less than 4000 Sq. Mtrs.
If height of structure proposed is more than 5 Meters.
If number of floors are more than one.

SUB-DIVISION OF AGRICULTURAL LANDS:
In rural areas large agricultural lands can be sub-divided for the purpose of sale or
for family partitions. Minimum area of sub-divided plot in respective type of lands is shown in the following table: –

TABLE

SR. NO. TYPE OF LAND MINIMUM AREA FOR SUB-DIVISION
1 Rice / Paddy Fields 1 Acare.
2 Bagayeet (Wet Crop) Land 1/2 (Half) Acare
3 Jirayeet (Dry Crop) Land 2 Acres.

Note: The above minimum areas for sub-division is not applicable for the agricultural lands in urban areas.

9) PRECAUTIONS FOR: PURCHASE / SALE, OCCUPATION AND
USE OF AGRICULTURAL LANDS
Do’s & Don’ts
Do not purchase agricultural land if you are NOT an agriculturist.
Visit & inspect the land before purchase.
Verify the title of land through legal expert.
Confirm whether the land sale is prohibited by the State Govt. for any reasons mentioned above; and purchase only after prior permissions are obtained from concern revenue authority of the State Govt.
Confirm & verify that the ownership of land so purchased is transferred in 7/12 extract & mutation entries are recorded in 6/12 extract in your favour.
Do not construct farmhouse without permission.
Use the land for the purposes mentioned herein above.
Collect / Obtain KHATE BOOK-LET from Talathi & get it updated every year.
Obtain fresh 7/12 extract every six months/year & check encumbrances if any.
Pay agricultural land revenue to the Talathi concern every year and obtain receipt of payment thereof.
Visit/stay on the site at least once a month and monitor the progress, and improvement of cultivation.
Do not produce perishable items without marketing arrangements.

SOME IMPORTANT TERMS COMMONLY USED:

7/12 Extract:
This is a revenue document of ownership consist of name of the holder, description of property (i.e. Survey No., Hissa No.) area of land, village, taluka, description of cultivation, and encumbrances if any.
ii) 6/12 Extract:
This is a extract of records of mutation entries of showing other rights which is, popularly known as “Pher-Far Patrak”.
iii) Survey Number:
This is an identification number given by the revenue authority to agricultural lands in the respective village where the property is situated.
iv) Hissa Number:
This is a sub-number given to portion of land when main survey number is divided due to partition of land. It is also an identification number allotted to respective piece land.
v) Kabjedar / Khudd:
Holder of the land, in whose name ownership vests; and who cultivates the land him self, or through his family.
vi) Kool:
Kool is a protected tenant of the agricultural land having her/his cultivation rights and such interest in the property. After the agricultural tenancy act came in force this category is abolished, as all such tenants became holders by statute.
vii) Pattedar:
Lessee of the landlord who is permitted to cultivate the land.
viii) Gaothan:
It is a village site with its peripheral boundary reserved for the residential purpose for the natives of the village and is free of assessment. The Govt. has powers to increase the boundary of the gaothan as and when required considering the population of the village.
Pot Kharaba:
It is a non-cultivable portion within a the cultivable land to which the land assessment is not charged.
Kharif Crops :
The crops totally depending upon monsoon and which are produced during June to October once in a year are known as Kharif Crops.
Rabbi Crops:
The crops produced mainly during November to March of the year with other water / irrigation resources are Rabbi Crops.

11) CEILING ON HOLDING OF AGRICULTURAL LAND IN THE STATE OF MAHARASHTRA

The State of Maharashtra by enactment has put up ceiling on holding of
agricultural land under “The Maharashtra Agricultural Lands (Ceiling & Holding) Act 1961; modified from time to time.

The Ceiling is decided on the class of land. The classification of land for this purpose as shown in clause No. (5) of section 2 of the act is as under: -

CLASS OF LANDS

Class of Land Description
(a) Type The lands with assured water supply for irrigation and capable at two crops in a year.
(b) Type The lands which has no assured perennial water supply for irrigation, and capable of one crop a year.
(c) Type The lands irrigated seasonally by temporary water supply under water sanction.
(d) Type Dry crop lands not falling under (a) (b) & (c) categories above; which are used mainly for paddy cultivation.
(e) Type Dry crop lands other than falling under (a) (b) (c) & (d) above; and irrigated by any water source & used for horticulture.

In all the districts of State of Maharashtra following is the ceiling Limit on holding agricultural lands: -
TABLE

Ceiling Area
Hectares Ares i.e. Acres
1 (a) Class 7 28.43 = 18 Acres
2 (b) Class 10 92.65 = 27 Acres
3 (c) Class 14 56.86 = 36 Acres
4 (d) Class 14 56.86 = 36 Acres
5 (e) Class 21 85.29 = 54 Acres

Notes: i) Above ceiling limits and classification of lands are as shown in the
Maharashtra Agricultural Lands (Ceiling on Holding) Act 1961 modified up to 15th December 1980, which are reproduced for information only.
It is advisable that the purchaser concern should make proper inquiries with revenue officer to decide his holding limit before purchase of new transaction.
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MMRDA Notification Karjat

admin — Mon, 24 Aug 2009 10:17:03 +0000

URBAN DEVELOPMENT DEPARTMENT
Mantralaya, Mumbai 400 032, dated 10th March 2006
NOTIFICATION
MAHARASHTRA REGIONAL AND TOWN PLANNING ACT, 1966.
No. TPS. 1205/MMR DCR/CR-48/06/UD-12 – Whereas Government has sanctioned the Regional
Plan for Mumbai Metropolitan Region (hereinafter referred to as “ the said Regional Plan “) vide
Notification No. TPS. 1297/1094/CR-116/97/UD-12, dated 23rd September 1999 as per the
provisions of section 15 of the Maharashtra Regional and Town Planning Act, 1966 (hereinafter
referred to as “ the said Act “) which has come into force with effect from 1st December 1999 ;
And whereas, Development Control Rules of the said Regional Plan does not contain the provisions
for Special Township ;
And whereas. Public Housing has been one of the major concerns of policy planning. It has been
realised that there is a need to incentivise investment by private sector in development of housing.
With this in mind, Government of India announced its policy to permit 100 direct foreign investment
for development of integrated towns. Government of Maharashtra in collaboration with Maharashtra
Economic Development Council had organised an International Infrastructure Summit in 2002. A
concept paper was presented by the Urban Development, which was widely appreciated.
Consultations with planners, architects and developers were held and the “Government of
Maharashtra finally approved the Special Township Scheme in the year 2004. The idea is to promote
private investment in housing sector to facilitate housing at reasonable prices and also to create a
hassle free atmosphere for investors. The new policy has to form a part of the existing DCR of
Municipal Corporation/ Councils and Development Control Regulations for regional plan areas.
And whereas, accordingly. Development Control Regulations (DCRs) exclusively for Special
Townships (hereinafter referred to as ,” the said Regulations “) have been prepared and it is
proposed to incorporate the said Regulations, in the Development Control Regulation of all the
Municipal Corporations, New Town Development Authorities, Special Planning Authorities, Municipal
Councils (hereinafter referred to as “ the said Authorities “) and also in the Development Control
Regulations of all the Regional Plans of the State, by taking recourse to procedure laid down in
Section 37 and 20 (as the case may be) of the said Act thereby modifying the relevant Development
Plan/Regional Plan in as much as Regulation thereof are concerned (hereinafter referred to as “
the said modification “).
And whereas, under the powers conferred by sub-section (3) of section 20 of the said Act,
Government in Urban Development Department had published a notice No. TPB. 4302/2080/CR-
215/02/UD-11, dated 21st August 2004 (hereinafter referred to as “the said notice”) which appeared
in Maharashtra Government Gazette Part-1, Konkan Division on 24th August 2004 at pages 51 to
56 in respect of Mumbai Metropolitan Regional Plan to invite suggestions. objections from the
general public on the said modification.
And whereas, thereafter the said Act has been amended to include the provision for Special
Township Project vide Maharashtra Act No-XXIII of 2005 which appeared in Maharashtra
Government Gazette (Extra Ordinary) dated 19th May 2005 ;
to the said Regional Plan and for that purpose amends the Urban Development Department
Notification No. TPS. 1297/1094/CR-116/97/UD-12, dated 23rd September 1999 ;
In the schedule of modifications of the Mumbai Metropolitan Regional Plan. After the ]ast entry
following new entry shall be added :-
ENTRY
“ Regulations for Special Township Project given in Schedule-A appended hereto are added to the
Development Control Rules “.
Note. – (A) A copy of the sanctioned Regulations for Development of Special Township in area
under Mumbai Metropolitan Regional Plan i.e. Schedule-A is kept open for inspection by the general
public in the offices of the following officers for the period of one month :-
(1) Dy. Director of Town Planning, Konkan Division, Konkan Bhavan, Navi Mumbai.
(2) The Collector, Thane, Raigad.
(3) Assistant Director of Town Planning, Thane Branch, Thane.
(4) Assistant Director of Town Planning, Alibag Branch, Nirdhar Tilak Chowk, Alibag, Dist. Raigad.
(B) This notification is also available on Govt. web site www.urban.maharashtra.gov.in.
SCHEDULE ‘A’
Regulations for Development of Special Townships In Area Under Mumbai
Metropolitan Regional Plan
A. GENERAL REQUIREMENTS
1. Applicability:- These Regulations would be applicable to the area under sanctioned Mumbai
Metropolitan Regional Plan excluding the area under jurisdiction of Municipal Corporations,
Municipal Councils, Cantonment Boards, Maharashtra Industrial Development Corporation and
Special Planning Authority, if any.
1.1. Area Requirement. – Any suitable area having sufficiently wide means of access (not less
than 18 mt. wide) can be identified for the purpose of development as “Special Township”. The
area notified under the Special Township shall be one, contiguous, unbroken and uninterrupted
and in any case shall not be less than 40 Ha. (100 acres) at one place which shall not include the
area under forest, water bodies like river, creek canal, reservoir, lands falling within the belt of 500
mt. from the HFL of major lakes, dams and its surrounding restricted area, lands in the command
area of irrigation projects, land falling within the belt of 200 mt. from the historical monuments and
places of Archeological importance, Archeological monuments, Heritage precincts and places,
any restricted areas, notified National parks, existing and proposed industrial zone; gaothan areas
or congested areas, truck terminus specially earmarked on Regional Plan, wildlife corridors and
biosphere reserves, Eco-sensitive Zone/area, quarry Zone and recreational tourism zone catchment
areas of water bodies. Defence areas, Cantonment areas, notified area of SEZ, designated Port/
Harbour areas, designated Airport areas, quarry zone.
1.2. Manner of Declaration. – Any area identified above and if found suitable can be Notified by
Government in Urban Development Department by following procedure under section 20 read
with section 18 of the Maharashtra Regional and Town Planning Act, 1966 and also in such other
manner as may be determined by it for the purpose of development as “ Special Township Project
However, in cases where the proposal of Special Townships is submitted by the land owners by
themselves or by the Developer who holds rights to develop the whole land under the Special
Township the area shall be notified by Govt. following procedure under section 18 of the said Act.
In such cases procedure under section 20 shall not be necessary.
1.3. Infrastructure Facilities. – The entire Township should be an integrated one with all facilities
within the boundaries of declared townships. All the on site infrastructure, i.e. roads, including R.P.
roads, approach road, street lights, water supply and drainage system shall be provided and
maintained in future by the developer till urban local body is constituted for such area and the
developer shall also carry out development of amenity or proposals, if any designated in the Regional
plan, in accordance with the prevailing regulations.
(a) Water supply. – The developer shall be required to develop the source for drinking water
(excluding the groundwater source) or secure firm commitment from any water supply authority
for meeting the daily water requirement of minimum 140 litres per capita per day exclusive of
requirement of water for fire fighting and gardening. The storage capacity of the same shall be at
least 1.5 times of the actual required quantity as determined by expected population (Resident
and Floating) and other uses. The developer would be required to develop proper internal distribution
and maintenance systems and shall specially undertake rain water harvesting, groundwater
recharging and waste water recycling projects within the Township.
(b) Drainage and Garbage disposal. – The developer shall make suitable and environment friendly
arrangements for the disposal and treatment of sewage and solid waste as per requirements of
Maharashtra Pollution Control Board. Recycling sewage for gardening shall be undertaken by the
developer.
The developer shall develop Eco-friendly garbage disposal system by adopting the recycling and
bio-degradation system in consultation with Maharashtra Pollution Control Board.
(c) Power. – The developer shall ensure continuous and good quality power supply to township
area. The developer may draw the power from existing supply system or may go in for arrangement
of captive power generation with the approval from concerned authority. If power is drawn from an
existing supply system, the developer shall before commencement of development, procure a firm
commitment of power for the entire township from the power supply company.
1.4. Environment. – The development contemplated in townships shall not cause damage to
ecology, hi no case it shall involve topographical changes, changes in alignment of cross section
of existing water course in any in the scheme area or adjacent to scheme area. Environmental
clearance shall be obtained from the Ministry of Environment and Forest, Government of India as
per directions issued by the MOEF’s notification dated 7th July 2004. The Township shall provide
at least 20 of the total area as park/garden/playground as mentioned in 4 (f) below, with proper
landscaping and open uses designated in the Township shall be duly developed by owner/developer.
This amenity shall be open to general public without any restriction or discrimination.
2. SPECIAL CONCESSIONS
(a) N.A. Permission. – Non-agriculture permission will be automatic. As soon as the scheme is
notified, lands notified under Special Township area as per 1.2 will be deemed to have been
converted into non-agriculture and no separate permission is required. Non-agriculture assessment
however will commence from the date of sanction of scheme as per Regulation No.7(c).
(b) Stamp Duty. – The stamp duty rates applicable in Notified Special Township area shall be 50 of
prevailing rates of the Mumbai Stamp Act.
(c) Grant of Government Land. – Any Government land falling under township area shall be leased
out to the developer at the prevailing market rate on usual terms and conditions, without any
subsidy.
(d) Relaxation from Mumbai Tenancy and Agriculture Land Act. – The condition that only the
agriculturist will be eligible to buy the agriculture land shall not be applicable in Special Township
area.
(e) Ceiling of agriculture land. – There shall be no ceiling limit for holding agriculture land to be
purchased by the owner/developer for such project.
(f) Exemption from Urban Land (Ceiling and Regulation) Act, 1976. – Special Township Projects
will be exempted from the purview of Urban Land (Ceiling and Regulation) Act; 1976.
(g) Scrutiny fee. – A Special Township Project shall be partially exempted from payment of scrutiny
fee being levied by the Collector/Planning Authority for processing the development proposal on
certain terms and conditions as may be decided by the Collector/Planning Authority.
(h.) Floating FSI. – There will be floating FSI in the township. Unused FSI of one plot can be used
anywhere in the whole township.
(i) Special benefits / concessions in respect of Star Category Hotels, Hospitals and Multiplexes /
Property Tax shall be provided.
3. PLANNING CONSIDERATIONS. – The Township project has to be an integrated township project.
The project should necessarily provide land for following users : -
(a) Residential
(b) Commercial
(c) Educational
(d) Amenity Spaces
(e) Health Facilities
(f) Parks, Gardens and Play Grounds.
(g) Public Utilities.
4. GENERAL NORMS FOR DIFFERENT LAND USES – The overall planning of the special
townships shall be such that the project fairly meets with the specifications spelt out in the prevailing
planning standards approved by Government. Further, the planning of Special Township shall
take care of following land uses in particular.
(a) Residential. – The residential area should be well defined in clusters or neighborhoods or in
plotted development with proper road grid. Out of the total built-up area proposed to be utilised
which is permissible as proportionate to zoning of area under such township atleast 60% of the
area may be used for purely residential development and further out of the total built-up area
proposed to be utilised for residential development, 10% of the same shall be built for residential
tenements having built-up area upto 40 sq.mt.
(b) Commercial. – The commercial area shall be properly distributed in hierarchical manner such
as convenient shopping, community centre etc.
(c) Educational. – Comprehensive educational system providing education from primary to secondary
should be provided as per the requirement. The area allocation should be on projected population
base and as far as possible the educational complex should not be concentrated at one place. All
such complexes should have area adequate allocation for playground. Minimum area required for
educational purpose shall be as per prevailing planning standards.
(d) Amenity Spaces. – The area allocation for amenity space providing for amenities like market,
essential shopping area, recreation centers, town hall, library etc. should not be less than 5 of
gross area and should be evenly placed.
(e) Health Facilities. – Adequate area allocation for health facilities for primary health should be
provided for. Minimum area required for health facilities shall be as per prevailing planning standards.
(f) Parks, Gardens and Play grounds. – The township shall also provide adequate area as parks/
gardens/play grounds. This should be exclusive of the statutory open spaces to be kept in smaller
layout and should be distributed in all residential clusters. This 20% area should be developed by
the developer for such purposes and kept open to all general public.
(g) Public Utilities. – Appropriate area allocation should be provided for (a) power receiving station/
sub station, (b) water supply system, (c) sewerage and garbage disposal system, police station
(e) public parking, (f) cemetery/cremation ground, (g) bus station, fire brigade station and other
public utilities as per requirements.
(h) Transport and Communication. – The entire area of township shall be well knitted with proper
road pattern, taking into consideration the linkages with existing roads within the township and
outside area as well. All such roads shall be developed by the developer as per standard and road
widths shall be as given below.
Classified Road – as prescribed.
Main road/Ring road – 18 to 24 meter wide.
Internal road – as per prevailing byelaws applicable to Regional Plan subject to minimum road
width 9 mt.
(i) Service Industries. – In the Special Township area, lands required for commercial uses, industrial
uses, permissible in residential user, may also be earmarked. However, the predominated land
use would be residential use.
Notes. – (I) All the amenities referred to above shall be inclusive of designated amenities and
Amenity space required as per regulations of Regional Plan.
(II) Regional Plan roads in the township area shall be developed and maintained by developer,
and the same shall be always open for general public without any restrictions there upon.
(III) Minimum parking shall be provided as per standardised DCR of ‘A’ Class Municipal Council
provided that for hotel, restaurant, college, school, educational institute”, educational classes,
hospitals, polyclinics and diagnostic centres, offices, Mangal Karyalaya, town hall, clubs, etc. onsite
parking shall be provided. For buildings having mixed users, in addition to the regular parking area
as mentioned above a space of 3.0 mt. wide strip along the road on front/side shall be provided for
visitor’s parking.
5. Development Control Regulations. – Prevailing Development Control Regulations of sanctioned
Regional Plan as well as provisions of MOEF CRZ notification dated 19th February 1991 amended
from time to time shall be applicable mutadis mutandis except those expressly provided in these
Special Regulations.
5.1 Special Township in Urbanisable (U2), Green (Gl), (G2) Zone – (i) The total built-up area/FSI
of entire gross area of the Special township in urbanisable zone (U-2) & Green Zone (G1,G2) will
be 0.5. There will be no limit of total built-up area / FSI for the development of individual plots.
Height of building shall be as per prevailing Byelaws as specified in Regional Plan. However, it
may be increased subject to provisions of fire fighting arrangements with prior approval of Fire
Advisor, Government of Maharashtra.
(ii) 50% of the gross area of the project shall be kept open while the project of Special Township
shall be executed on the remaining 50% land with gross built-up area/ FSI of 0.50 worked out on
the entire gross area of the project. Further, while developing such projects, it would be obligatory
on the part of the developer to provide and develop all the infrastructure facilities including sites
required for public purposes as per the prescribed planning norms. As regards 50% of land which
is required to be kept open, the same shall be made free of encumbrances and no development
except town level open amenities shall be permissible thereon.
5.2 Other Special Regulations. – (i} In every Special Township proposal the structural designer of
developer has to submit declaration with project report to Collector / Planning Authority about the
construction of building as below.-
‘ I have confirmed that the proposed construction in the scheme are as per norms as specified by
Indian Standards Institute, for the resistance of earthquake, fire safety and natural calamities’.
(ii) Upper and lower ground floor type construction shall not be allowed.
(iii) The following shall not be included in covered area for built up area and F.S.I. calculations :-
(a) Area covered by the staircase rooms for stair flights of width 0.75 m. & above, in case of row
housing & pent houses and duplexes, 1 mt. in case of residential building, 1.2 mt. & above in case
of commercial (mercantile) buildings, 2.00 mt. & above in the case of public & semi-public building,
subject to payment of premium in consultation with Town Planning & Valuation Department.
(b) Area covered by lift room for a building with height upto 16 mt.
(c) Stilt floor space (exclusively for parking space) constructed under building of maximum cleared
height 2.4 mt. and which shall be open atleast from three sides.
(d) Balcony or balconies of a minimum width of one mt. may be permitted free of F.S.I at any upper
floor, subject to maximum of 1/3rd length of perimeter of building and such balcony projection shall
be subject to the following conditions :-
(I) No balcony shall be allowed on ground floor.
(II) Balcony or balconies shall be permitted to project in the marginal open space of not less than
3 mt. in width.
(III) Not withstanding anything contained in any other laws, rules, regulations or bye-laws in force,
a balcony shall not be permitted to be enclosed.
(iv) In special Township schemes at the rate of minimum 150 trees per ha. and 400 trees per ha.
respectively shall be planted and maintained by the developer.
(v) Once the proposal for special Township is submitted to the Government under Regulation No.
7(A) no change of zone proposal in such Township area shall be considered by Government.
6 . Sale Permission. – It would be obligatory on the part of the developer firstly to provide for basic
infrastructure and as such no permission for sale of plot/ flat shall be allowed unless she basic
infrastructure as per Regulation No. 1.3 is completed by the developer to the satisfaction of the
Collector. In case the development is proposed in Phases & sale permission Js expected after
completion of Phasewise basic infrastructure, such permission may be granted |y the Collector.
Before granting such sale permission, Developer has to submit undertaking aout the basic
infrastructure to be provided & completed phasewise by Developer. The plots earmarked for
amenities, facilities, and utilities shall be also simultaneously developed phase-wise alongwith
residential/allied development.
7. Procedure . – (a) Locational Clearance. – The proposal for development of Special Township,
alongwith details of ownership of land or Development rights of lands in the proposal jcheme, site
plan, part plan of sanction regional plan, shall be submitted to Government in Urban Development
Department alongwith a copy to Director of Town Planning Maharashtra State, Pune Environment
Department of Maharashtra State, Irrigation Department for grant of locational clearance. Upon
receipt of such proposal, depending upon the merits of the case, locational clearance may be
granted by Government u/s 18/2 of MR&TP Act, 1966 in insultation with the Director of Town
Planning and Environment Department and other respective departments of the State Government
within a period of 90 days from the date of receipt of the proposal & after completion of all prescribed
procedure specified in Regulation No. 1.2 above and compliance of any such document as may
be required by Government. This locational clearance will be valid for one year from the date of
issue and if within such period the letter of intent and final approval is not taken or not applied for,
such clearance/approval will stand lapsed unless it is renewed by Govt. for sufficient reasons.
Application for renewal has to be made to Govt. before expiry of one year. In that case these
special Regulations shall not be applicable to the area under such scheme.
(b) Letter of intent. – Upon receipt of locational clearance from the Government, the developer
shall submit the proposal in respect of Special Township to Collector, Thane & Raigad alongwith
the environmental clearance as mentioned in Regulation No. 1.4 for issue of letter of intent. The
proposal shall contain ownership rights/development rights, document in respect of at least 50 %
of area under scheme and other particulars as decided and directed by Collector, Thane & Raigad.
Details of qualified technical staff and consultant in technical and law field. Letter of intent shall be
issued within a period of 45 days from the date of receipt of the completed full & final proposal. The
letter of intent shall be valid for six months unless renewed.
(c) Final Approval. – (i) The Developer shall submit the layout plan of the entire township area,
sector-wise detailed building plans and details of phasing, for final sanction to the Collector, Thane
& Raigad. The developer shall also submit an undertaking and execute an agreement about
development and maintenance of basic infrastructural amenities in future with bank guarantee of
15 of its development costs. The Collector, Thane & Raigad shall conduct proper enquiry and
ensure the correctness of title and ownership etc. Only after such verification, Collector, Thane
and Raigad shall grant approval to layout plan arid sectorwise detailed building plan in consultation
with Deputy Director of Town Planning, Konkan Division, Navi Mumbai within the stipulated period
on terms and conditions as may be determined by Collector & Deputy Director of Town Planning,
Konkan Division, Navi Mumbai.
The period required by the Collector for Technical consultation with Deputy Director of Town
Planning, Konkan Division, Konkan Bhavan, Navi Mumbai shall not be computed.
Any one aggrieved by an order passed under prevailing Byelaws may within forty days of the date
of communication of the order prefer an appeal to the Director of Town Planning, Maharashtra
State, Pune. The appeal shall be cleared within 60 days
(ii) Every application shall be accompanied by –
(a) Ownership Document : 7/12 extract/ Property Card, ownership right Document in
original with list of such documents.
(b) Extent : Village maps showing the extent of area and authenticated
measurement plan/ gut book of the land in original and list of
such documents.
(c) Authenticated copies of locational clearance and letter of intent environmental clearance is
applicable.
(d) Layout and building . : (i) Layout plan showing all details of area utilized under roads,
(Prepared & signed by ;experts open spaces for parks, garden and playground amenitie.
in respective field and team (ii) Detail layout plan building plans of all development with area
headed by an Architect of all sector and individual plots and built up area/FSI proposed
Town Planner) on each sector and plot.
(iii) Detail Report comprising of expected population, requirement
of amenities and proposed amenities with reference to prevailing
planning standards approved by Government and sources of all
basic amenities and it’s details about implementation and
maintenance & Taxes.
(iv) Details of zoning of all areas included in the Scheme as per
sanctioned R.P. and area under such zone.
(v) Details of FSI/Total built-up area proposed to be utilized in
scheme.
(vi) Details of Eco friendly amenities provided
(vii) Plan showing “Road hierarchy and road widths, pedestrian f
acility, street furniture, plantation, side walk., subways with area
details.
(viii) Details of solid waste management plan.
(ix) Plan showing HFL of major lakes, river if any certified by
Irrigation Department.
(x) Plan showing details of distribution of total built-up area/space.
(xi) Plan showing water supply distribution system, including
reservoirs, recycling system, details of rainwater harvesting
system.
(xii) Details of storm water drainage scheme.
(xiii) Details of fire fighting mechanism, fire brigade station.
(xiv) All other documents as determined and directed by Collector,
Thane, Raigad.
Note. – The above prescribed periods shall be computed after compliance of all the requirements
listed above and any other additional information called for from the owner/developer by the
Government / Collector.
8. Implementation & completion (i) Development of Basic infrastructure & amenity shall be
completed by the developer to the satisfaction of the Collector
(consultation with Assistant Director of Town Planning, Thane/
Alibaug) as per phases of scheme. Development of the scheme
shall be completed within 10 years from the date of final sanction
to the layout plan of scheme.
(ii) No building in the scheme is permitted to be occupied in any
manner unless occupancy certificate is issued by Collector, in
consultation with local Branch Officer of Town Planning &
Valuation Department.
(iii) Final completion certificate for the scheme is to be issued by
Collector in consultation with Local Branch Officer of Town
Planning and Valuation Department, Maharashtra Pollution
Control Board, Forest Department as far as tree plantation is
concerned and Fire Officer of state Government.
(iv) Application for occupation certificate or final completion
certificate shall be submitted alongwith a declaration and
undertaking by the developer and his structural consultant.
Architect Town Planner as follows : -
(a) We confirm that all buildings constructed in the scheme
area are as per norms as specified by Indian Standard
Institute for the resistance of earthquake, fire safety and
natural calamities.
(b) Work is done as per sanctioned plan.
(c) Builtup area and FSI consumed in scheme is as per
sanctioned plan
(d) No balcony is enclosed.
(e) If it is found that extra built up area/FBI is consumed in
the scheme at any time, it shall be demolished by developer
at his own cost as directed by Collector, Thane/ Raigad.
9. Interpretation. – If any question or dispute arises with regard
to interpretation of any of these regulations, the matter shall be
referred to the State Government. The Government after
considering the matter and, if necessary, after giving hearing to
the parties, shall give a decision on the interpretation of the
provisions of the Regulations. The decision of Government on
the interpretation of these Regulation shall be final and binding
on all concerned.
By order and in the name of the Governor of Maharashtra,
SUDHAKAR NANGNURE,
Deputy Secretary to Government.