01. ANTICIPATIONS & APPREHENSIONS:
Successive State Govt., has consistently wished to transform India’s Mumbai into China’s Shanghai, irrespective of the fact, that Mumbai has umpteen number of near-probable legal slums with G+2 tin structures, alongwith the highest building of averaging 40 floors, housing maybe about 200 flats, with documented malfunctioning and falling elevators (Lifts).
Shanghai, on the other hand has 125 floor buildings with high-speed incident-free elevators. One another 220 floor building in the City of “Changsha”, in Hunan-China, when completed would house 30,000 people.
02. VARIOUS REQUIREMENTS, for Deemed Conveyance:
a) Duly Registered & Stamp duty paid, Sale-Purchase Agreement, of all members.
b) Documents about the plot of land from the Tahsildar /Collectors office
c) Sanctioned Documents from Municipal authorities
d) Relevant documents of the Society, Balance sheets, Resolutions and so on ….
03. APPLICABLE COURT FEE = Rs.2000/-
A Society can file application affixing Court Fee of Rs. 2000/-, with the relevant documents, for obtaining “Certificate of Deemed Conveyance”, which is tentatively possible within four months (subject to proper documentations). There is hardly any legal expertise required for obtaining the “Certificate of Deemed Conveyance”. SURPRISINGLY, the “Certificate of Deemed Conveyance”, can be obtained only in Rs. 2000/- (being the Applications Court Fee).
04. FIRST COMPETENT AUTHORITY:
In Mumbai, the four Deputy District Registrar of Cooperatives, are the division-wise delegated authority’s to issue “CERTIFICATE of deemed conveyance” and nothing more. Which means that a Society now becomes entitled to one-side register the Conveyance of the Society plot, with the Registrar of Sub-Assurances, BUT only after paying the present & relevant “Stamp Duty and Registration fees”, that is applicable on the variable rate of the plot of land.
05. SECOND COMPETENT AUTHORITY:
A major hitch here is the next stage of mandatory “Hearing with the Registrar of Sub-Assurances”, wherein the Landlord / Builder / Developer is also called in for a hearing, irrespective of the “Certificate of Deemed Conveyance” . The Builders are ever-flush with Cash, Power and Legal Expertise, who can very well afford and manage to delay the actual transfer of conveyance process, for a long time, thus frustrating the objectives of the Society. HOWEVER, as evident in many cases, WHEN builders themselves undertake “Redevelopment Process”, THEN the builder gets the conveyance at a very fast pace, subject to lots of money consideration here and there. Tentatively, it should be introspected that the concept of “Deemed Conveyance”, is presently grossly tilted in favor of the Land-Lord /Developer.
06. TECHNICAL INTROSPECTION:
The Deputy District Registrar of Cooperatives, may issue “CERTIFICATE of deemed conveyance”, after due process, BUT has no jurisdiction to actually mutate /transfer ownership of land, in the Revenue Records, that is conclusively maintained by the taluka Tahsildar. Hence upto this stage the “CERTIFICATE of deemed conveyance”, is mere piece of paper (as a consolation), having very very limited legal standing. Based on the aforesaid “CERTIFICATE of deemed conveyance”, the Conveyance can ONLY BE REGISTERED, by the “Registrar of Sub-Assurances”, after due process, and nothing more. The Registrar of Sub-Assurances, has no jurisdiction to actually mutate /transfer the Title-Ownership of the plot of Land, in the name of the Society. The Conveyance of the Plot shall be final, ONLY AFTER the name of the Society, is recorded on the 7×12 extract /Property Card, that is maintained by the Tahsildar of the taluka. The 7×12 extract and Revenue Form no. 6, is the final & conclusive proof of “ownership of land”, for all purposes.
OBIVIOUSLY, nothing comes for free, and the Builder has to compensate himself for the Money he has spent on getting Conveyance from the earlier Landlord /Builder. Here the Redeveloper (Builder) compensates himself, by offering you less Corpus Fund, Less extra Flat Area (FSI), Less alternative accommodation Rent, degrading Construction material, Less Amenities, and so on.
08. STAMP DUTY & REGISTRATION FEE:
The biggest hitch, most Society’s face is the huge one-time-amount of “Stamp Duty and Registration fees”, that instantly becomes payable, when actually Registering the “Certificate of Deemed Conveyance”, in favor of the Society’s name. This translates to a tentative average of about 25-50 Lakh rupees, onwards for an average size plot of land. Here the biggest bane is this huge amount, when in context, wherein the members penny-pinch themselves, by delaying the cost-escalating essential structural repairs /painting, to their buildings.
The Coop. Court, has no jurisdiction, to adjudicate, in matter of Conveyance of the Society Plot.
Does a Coop. Society, really need a Builder /Developer to Redevelop their own Property, in the absence of Conveyance ?
Here the probable answer is YES, when in context to the deliberated meager spending power of the Society members. The Developer-Builder is the gainer, due to the technical incapacity of the Society. However, in relative terms, Redevelopment of old buildings, can be undertaken by the Society themselves, with successful coordination with the financing agencies, with sustainable and committed cooperation between the Society members and with the real-time coordination of relevant professionals in the field.
10. WHAT HAPPENS IF YOU DONT HAVE CONVEYANCE OF YOUR SOCIETY PLOT ?
a) LITERLLY nothing, as long as you don’t intend to redevelop the building yourself. You can comfortably, continue occupying the Plot of Land, without any further hitches.
b) AND in the event IF you wish for redevelopment of your building, THEN in all probabilities, the Builder-Developer, will get the Conveyance, for you, a his own Cost & Consequences, which literally & really does not hurt the redevelopment modalities, for the Society members.
c) AND IN ANY EVENT, with the Law scenario changing, due to the winds of awareness, sooner or later, most society plots would be registered in the name of Society’s, literally at no cost, by the Govt., who will ultimately have no choice or options. Only criteria is to wait for appropriate time.
d) There are few instances, wherein the Land-Lord /Developer, has executed “Lease Deed” for 30 years, at a nominal yearly rent, for the plot of land, instead of actually passing on Conveyance to the Society. This aspect is also favoring the Society & its members, who are in grave financial difficulties and have considered Redevelopment of their dilapidated buildings. This is one way of going for redevelopment, in the absence of Conveyance of the plot of land in favor of the Society.
11. LEGAL ASPECTS, in respect of Conveyance of plot of land:
Society’s who can sustain the legal expenses, can successfully file Criminal Proceedings and /or Consumer Court proceedings, against the Landlord / Builder / Developer, for malpractices in Conveying the plot of land, in the name of the Society. HOWEVER, once a Society is duly registered, the Land-Lord /Developer, literally has no legal-recourse left to utilize even a square feet of the Society Land, in view of the Judgments of the Hon. High Court, wherein the land-lord /developer is prohibited from any constructions (whatsoever) in the Society compound, without the express & written consent /permission from each /all individual members of the Society.
12. MONETARY COSTING for Conveyance of Society Land:
Typically, on a tentative average, the present Land cost in Mumbai is about Rs. 3000/- per square feet (onwards). This hardly generates, approximately. Rs. 150/- per square feet, in terms of, ONE-TIME Registration Fees and Stamp-Duty (No VAT applicable), to the State Government (at the time of Conveyance). Whereas in terms of Redevelopment of one square feet of Land, an tentative average of 3 square feet of FSI is generated, which in turn could have a average saleable cost of Rs. 15000/- per square feet, which in turn generates approx. Rs. 900/- per square feet, in terms of Registration Fees and Stamp-Duty and VAT, to the State Govt.
Note: Re-Sale of Society’s plot of land is not possible, ever. However, continuous re-sale of Society Flats, continuously regenerates Registration Fees and Stamp-Duty, to the State Govt.
13. CONCEPT OF “DEEMED CONVEYANCE”:
The present concept /culture of “Deemed Conveyance”, would become redundant, in very near future, due to the paltry One-Time Registration Fees and Stamp-Duty generated by the State Govt., by granting Conveyance in the Society’s favor, AND more specifically so when the Society is incapable of paying the one-time tentative average of about 25-50 Lakh rupees, towards the “Stamp Duty and Registration fees”, that instantly becomes payable, when actually Registering the “Certificate of Deemed Conveyance”, in favor of the Society’s name. The Govt., would have to come out with relevant policy /solutions and/or concept and arrange to acquire /transfer /lease the plot of a registered Society, in the name of the Society, maybe by retaining Govt. hold over the Society plot, declaring it as an aided-society, in lieu of No Registration Fees & No Stamp Duty.
14. PROBABILITY OF AN ORDINANCE, FOR CONVEYANCE:
EXPECTENTLY, the over-whelmed Govt. could also issue an Ordinance to Transfer the plot of land in the name of the “duly registered” Society, without any legal hitch, in the light of various existing laws. As it is the State Govt., shall earn 100X times more, by way of Registration Fees and Stamp-Duty and VAT, from creating more housing in Redevelopment projects, by obviously increasing the FSI component. More FSI means more Registration Fees and Stamp-Duty and VAT, from each extra feet of FSI granted by the Govt. This revenue thus generated shall obviously be 100X times more than the paltry one-time Registration Fees and Stamp-Duty generated by granting Conveyance of Land, in the Society’s favor.
This is of course, for the obvious objective (motive) of redevelopment of buildings, for housing and upholding the cooperative movement (means populist policies). Not to forget, the windfall of continuous Registration Fees and Stamp-Duty and VAT and other associated statutory revenues generated from this gesture, by the Govt.
CONCLUSION: UPHOLD THE COOPERATIVE MOVEMENT:
It remains to be seen, as to when the State Govt., takes this initiative, for the larger interest of the anxious public, to uphold the Cooperative Movement, that India celebrated in the year 2011, by propagating and granting autonomous status, to Cooperative Societies, under the 97th Constitutional Amendment.
Hemant Agarwal (Legal Consultants)
Email: [email protected]
Date: 02nd August, 2013.