Bombay High Court
NAVI MUMBAI CO-OPERATIVE HSG. FEDERATION LTD. THROUGH ITS AUTHORISED REPRESENTATIVE AND ORS.versusCITY AND INDUSTRIAL DEVELOPMENT CORPORATION OF MAHARASHTRA LTD. AND ORS.
- Decided
- Disposal
- Allowed
Holding
The amendment Explanation (iii) is a substantive provision that cannot be applied retrospectively to lease deeds executed before 8‑Feb‑1990, so CIDCO cannot demand transfer charges from the members of the societies concerned.
Summary
The Navi Mumbai Co‑operative Housing Federation and two member societies sought a writ of mandamus to restrain CIDCO from demanding transfer charges on members whose lease deeds were executed before the 8‑Feb‑1990 amendment to the New Bombay Disposal of Lands Regulation, 1975. The petitioners argued that the lease agreements contained no clause requiring prior permission or transfer fees, and that the amendment introducing Explanation (iii) could not operate retrospectively. CIDCO contended that the amendment clarified that transfer of a demised land includes share transfers and that the fee was payable. The Court examined the statutory framework, the principle against retrospective operation of legislation, and held that the amendment was a substantive provision not intended to apply to pre‑1990 leases. Consequently, CIDCO’s demand for transfer charges from the two societies was quashed and a declaration was made that Explanation (iii) does not apply to their transfers. The relief was limited to the two societies and the petition was made absolute.
Issues considered
- The amendment Explanation (iii) to Regulation 3(vii) of the New Bombay Disposal of Lands Regulation, 1975, can be given retrospective effect to lease deeds executed before 8‑Feb‑1990.
- Whether CIDCO can levy transfer charges on members of co‑operative housing societies whose lease agreements predate the amendment.
- Whether the lease deeds contain any clause obligating members to obtain prior permission or pay transfer fees.
Legislation cited
- Bombay General Clauses Act — s. 1903, Section 21
- Companies Act — s. 1956
- Government Grants Act — s. 1895, Section 3
- Maharashtra Co-operative Societies Act — s. 1960
- Maharashtra Regional and Town Planning Act — s. 1966, Section 118, Section 154, Section 159
- Transfer of Property Act — s. 1882, Section 10, Section 105
Subjects
- transfer charges
- co‑operative housing societies
- lease deed
- retrospective legislation
- CIDCO
- New Bombay Disposal of Lands Regulation
- amendment
- writ of mandamus
- statutory interpretation
- prospective effect
Judgment
Digitally
signed by
MANALI
MANALI PRASANNA
PRASANNA TILAK
TILAK Date:
2026.10.08 1/43 WP 3540-18.doc
16:43:47
+0530
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 3540 OF 2018
1. Navi Mumbai Co-operative Housing
Federation limited, through its authorised
representative Mr.K.S.S. Narayanan,
registered under Maharashtra Co-operative
Societies Act, 1960 having its office at 303,
Big Splash, Plot Nos.78,79, Sector 17,
Vashi, Navi Mumbai 400703.
2. Manmandir Co-operative Housing Society
Ltd, a Housing Society registered under the
Maharashtra Co-op. Societies Ltd, having
its registered addressed at Manmandir Co-
op Housing Society Ltd, Plot No.3, Sector
No.19,. Nerul, Navi Mumbai 400706.
3 Surya Co-op. Housing Society, Plot 7 C/D, .. Petitioners
Sector, Vashi, Navi Mumbai 400703.
Versus
1. City and Industrial Development
Corporation of Maharashtra Ltd, a
Government Company incorporated under
the Companies Act, 1956 having its
registered office at Nirmal, 2nd Floor,
Nariman Point, Mumbai 400021.
2. The Estate Officer, CIDCO, CBD Belapur,
Navi Mumbai 400614.
3. The State of Maharashtra, through its
Urban Development Dept, Mantralaya, .. Respondents
Mumbai 400032.
…
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Ms. Gayatri Singh, Senior Advocate with Mr.Shreeprasad Parab
for the petitioners.
Mr.G.S. Hegde, Sr. Advocate with Mr.B.B. Sharma for CIDCO.
Ms. Savita A. Parbhune, AGP for the State.
CORAM : BHARATI DANGRE &
MANJUSHA DESHPANDE, JJ
RESERVED ON: 15th JULY, 2026.
PRONOUNCED ON : 29th SEPTEMBER, 2026
JUDGMENT :- (Per Bharati Dangre, J)
1. Navi Mumbai Co-operative Housing Federation Limited, a
Federation of Co-operative Housing Societies, Navi Mumbai
with several members, being a legally constituted advisory body
for the Co-operative Housing Societies of Navi Mumbai along
with Manmandir Co-operative Housing Society and Surya Co-
operative Housing Society, the two members of the Federation
have approached this Court, praying for issuance of writ of
mandamus, restraining the City and Industrial Development
Corporation of Maharashtra Ltd, (CIDCO) from demanding
transfer charges in respect of the members of the petitioner
no.1 Federation along with those who are members of
petitioner nos.2 and 3, who are listed at Exhibit A and B, where
the allotment letter/agreement to lease and the lease deed pre-
date the amendment to the New Bombay Disposal of Lands
Regulations, 1975. (hereinafter referred to as ‘the Regulations’)
A declaration is also sought to the effect that the
Explanation (iii) to Regulation 3(vii) of the New Bombay
Disposal of Lands Regulation, 1975 inserted vide notification
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dated 8/2/1990, be restricted to the exclusion of the Co-
operative Housing Societies formed and registered prior to its
introduction by way of amendment and therefore, not
applicable to the members of such societies.
For all practical purposes, the demand letter dated
26/10/2016 for payment of transfer charges amounting to
Rs.24,58,100/- issued by the respondent no.2 to the petitioner
no.1 and similar demand letters issued to other similarly placed
societies of petitioner no.1 Federation are sought to be be
quashed and set aside.
2. Rule. Rule is made returnable forthwith. Heard by
consent of the parties. We have heard learned Senior Advocate
Ms. Gayatri Singh for the petitioners and Mr. G.S. Hegde,
Senior Advocate for CIDCO and Ms. Savita A. Parbhune, AGP
for the State.
Ms. Singh by inviting our attention to the pleadings in the
petition, would submit that distinct agreements to lease were
executed with the various housing co-operative societies who
were allotted plots and the specimen of the agreements are
annexed along with the petition. It is her specific contention
that neither the allotment letter nor the agreement to lease or
lease deed between the petitioner’s society and the CIDCO
contained any restrictive conditions with regard to seeking prior
permission from respondent no.1 for transfer of respective flat/
share of an individual members of the Society or with regard to
the payment of transfer charges for transfer of shares of
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individual members and as a result they were free to transfer
their flats/shares without seeking any permission and without
having to pay any transfer charges.
However, it is submitted that vide notification issued by
the State of Maharashtra on 8/2/1990, when the New Bombay
Disposal of Lands Regulation 1975 came to be amended by
inserting the explanation (iii) to Regulation no.3(vii), which
contemplated that ‘Transfer of Demised Land’ shall include the
transfer of share(s) by shareholders or members of the Society,
the amount was claimed from the members of the Housing
Society.
3. Petitioner no.2 Manmandir Co-operative Housing Society
was issued an allotment letter on 3/2/1987 pursuant to which
an agreement to lease was executed on 13/8/1987. As far as
petitioner no.3 Surya Co-operative Housing Society, it was
issued an allotment letter on 6/1/1980 to which an agreement
to lease was executed on 4/5/1983.
4. As far as petitioner no.2 Society is concerned, it is pointed
out that the lease executed prior to 8/2/1990, did not include
any restrictive conditions and covenant with regard to the
transfer of shares by the individual members. However, by
letter dated 26/10/2016, the respondent no.2 Estate Officer
made reference to the transfer charges against 27 transfer and
called upon the petitioner no.2 Manmandir Co-operative
Housing Society to make arrangement for payment of the same.
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Similarly, as far as petitioner no.3 is concerned, the Lease
Deed was executed, prior to 1/2/1990 with no restrictive clause
being enforced to the aforesaid effect, it is alleged that CIDCO
has been making demands for payment of transfer charges from
the members/intending members of the Societies and this has
constrained the petitioners to approach this Court.
5. The petition is accompanied with the noting preceding
the amendment being introduced in clause (vii) of Regulation 3
of the New Bombay Disposal of Land Regulations, 1975. It is
urged by learned senior counsel Ms. Singh that in absence of
the aforesaid condition of transfer charges being levied upon
the members before the flat could be transferred, an attempt to
give retrospective effect to the amendment, is illegal per se, as
any liability cannot be fastened upon the members of the
petitioner Societies which was not part of their Deed of Lease or
even the allotment letter.
Ms. Singh is very specific in her submission that she is
conscious of the position that after the amendment was
effected, this stipulation would apply, but according to her,
prospectively and all those Lease Deeds which are executed
after the said date, would be bound by the said clause.
6. It is submitted by Ms. Singh, that there was no restriction
upon the transfer of the flat by an individual member and even
the Model Bye-Laws of 2000, which contemplated that before
transfer of shares by individual members, approval of the
Authority should be taken, came into force only in 2000 and
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this was replicated in the Bye-laws of 2014. According to her,
there are three types of Standard Transfer Charges that a new
comer has to pay to the Society, which form part of the Bye-
laws even prior to 2000, and this included the entrance fee, as
well as the payment of transfer fee to Society mentioned in Bye-
law 38(vii) and payment of premium to be paid to a new
member of Society which rate was fixed by the Government as
per Bye-law 38(ix) and this rate was fixed from time to time by
the State Government. According to her, this premium is not to
be confused with the premium to be paid by Lessee (Society) to
the Lessor (CIDCO), which is a one time payment. In addition
to the premium, according to Ms. Singh, the Society is required
to pay yearly rent in accordance with the Lease agreement, and
as per the contract that is entered which, of course is not a part
of the Bye-laws. She would submit that by Amendment dated
01.02.1990, CIDCO introduced payment of transfer charges by
individual members for the first time which subsequently was
introduced in the model Bye laws after 2000 as can be seen
from Annexure 1 and 2. These transfer charges are different
from the transfer charges that a new member has to pay the
Society, these transfer charges being fixed by CIDCO and this is
evident from the notice issued by CIDCO for the first time dated
26/10/2016 which is annexed at Exhibit ‘O’. The notice though
issued in the year 2016 covers the period even prior to
01/02/1990 in regards to individual transfers but according to
her, details have been produced nor served on Petitioner
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Societies regarding the transfer charges payable and the period
from which they became payable. No notices similar to that
issued to Petitioner No.2 have been issued to other Petitioner
Societies is the contention. She submit that CIDCO was clearly
aware that no transfer charges could be levied prior to
01.02.1990 and here no such notices were issued.
She would submit that if the demand and claim of CIDCO
is accepted, then the individual members would be liable to pay
transfer charges even for the date prior to 1/2/1990 and this
would detrimentally affect their interest.
7. Contesting the submissions advanced by the learned
senior counsel, Mr. Hegde, representing CIDCO would place
reliance upon the affidavit in reply filed on behalf of CIDCO for
opposing the admission.
He would submit that CIDCO is a Government Company
incorporated under the Companies Act and the Government of
Maharashtra with an intent to decongest the area of Greater
Mumbai and to upgrade its civic amenities, decided to create a
new town across Thane Creek and in exercise of powers under
sub-section (1) of Section 113 of the MRTP Act, has notified the
area for the New Town - Navi Mumbai. Further, in exercise of
powers under sub-section 3A of Section 113 of the MRTP Act,
CIDCO was appointed as the “New Town Development
Authority” for Navi Mumbai and since then, it is functioning as
statutory agent of the State Government for the development of
Navi Mumbai. He would submit that in furtherance, the
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Government has acquired all privately held lands within the
notified area and vested it along with the government lands to
CIDCO and authorised it to grant lands on lease for a defined
term in accordance with its Land Disposal Regulations in force
from time to time.
It is thus submitted by Mr. Hegde that the Authority is the
statutory agent of the State Government and has framed Land
Disposal Regulations with previous approval of the State
Government styled as “New Bombay Disposal of Land
Regulations, 1975” and which was substituted by the Navi
Mumbai Disposal of Lands (Amendment) Regulations 2008
which is currently in force. The Regulations, according to Mr.
Hegde, specify the process and the terms and conditions for
grant of lease of plots and apartments in Navi Mumbai and all
lands by CIDCO are disposed off in accordance with the same.
The reply affidavit is accompanied with an agreement to
lease dated 13/8/1987 executed between CIDCO and petitioner
no.2, and according to Mr.Hegde, clause 7A expressly provide
that lease of the land is subject to the provisions of Section 118
of the MRTP Act, 1966 and the rules and regulations made
thereunder, including the Regulations, 1975 and the said clause
7A read thus :-
“It is hereby agreed and declared by and between the parties
hereto that the Corporation has agreed to lease the said land
to the Licensee and the Licensee has agreed to have such lease
upon the terms and conditions contained herein and subject
to Section 118 and other applicable provisions of the
Maharashtra Regional and Town Planning Act, 1966
(Maharashtra Act XXXVII of 1966) and rules and regulations
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made thereunder including the New Bombay Disposal of
Lands Regulations 1975 for the time being in force.”
It is the contention of Mr.Hegde that from 8/2/1990,
where the new amended Regulations came into force, by which
an explanation was inserted to clarify as to what was meant by
“Transfer of the Demised Land”, it only offered a clarification
regards to the transfer of the land, and according to him, there
is no contradiction between the provisions contained in the
Lease Deed/Agreement and the amended rules. It is his specific
contention that the sale/transfer of flat/apartment in a co-
operative society by a member is also covered by the said
explanation, and therefore, any transfer of such flat would
require approval of CIDCO. According to him, some of the
members of petitioner no.1 have paid the transfer charges at
the time of transfer and these charges are required to be paid in
the event when there is a “transfer of flat” and not at the time
of incorporation of the Society or when the land was
leased/allotted and CIDCO is entitled to recover the transfer
charges as per the prevailing rates which are revised every year.
8. In absence of any specific instances, as regards the
petitioner nos.2 and 3 Society being cited, it is the contention of
Mr.Hegde that a lock stock barrel principle cannot be applied to
each and every member, and in fact, when an application was
preferred by petitioner no.2 Society for execution of lease deed,
it was noticed that there was a change in the members of the
Society as per the records of CIDCO, inasmuch as 27 original
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members of the Society had sold/transferred their respective
flats/apartments and membership in the Society to new
members without obtaining its prior approval and the moment
the transfer is effected, the payment of transfer charges became
payable.
Accordingly, by letter dated 26/10/2016, CIDCO called
upon the petitioner no.2 Manmandir Co-operative Housing
Society to deposit the transfer charges.
A serious objection is also raised to the maintainability of
the petition through the petitioner no.1 a Federation and
according to Mr. Hegde, such a representative petition without
providing details filed by the Federation of the Society is not at
all maintainable and therefore, he would request for dismissal
of the said Writ Petition.
9. We have perused the pleadings in the Petitions. Before
we appreciate the rival contentions and the reply affidavit, we
must refer to the statutory framework involved.
In the wake of the Government of Maharashtra
designating a site for a new town of New Bombay and
appointing City and Industrial Development Corporation of
Maharashtra (CIDCO) to be the New Town Development
Authority, CIDCO, in exercise of powers conferred by sub-clause
(a) of Section 159 of the MRTP Act, 1966, with the previous
approval of the State Government published the Regulations
titled as “New Bombay Disposal of Lands Regulation, 1975”
which were published in the Maharashtra Government Gazette
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IV-C on 26/7/1979. The Regulations applied to all lands of the
Corporation and it came into force from the date of its
publication in the Maharashtra Government Gazette.
Chapter III of the said Regulations set out the conditions
of lease as the Corporation was empowered to dispose of plots
of land on lease by incorporating conditions specified in the
Regulation and this in particular, included the following :-
(i) Term of lease;
(ii) Payment of rents, taxes and other charges
(iii) Payment of land revenue
(iv) Recovery of premium or rent as land revenue
(v) User of plot etc.
The two most important stipulations therein read thus :-
(vi) To build according to the building regulations or municipal
regulations or development control rules enforced from time to
time -- the lessee shall not at any time during the lease, erect any
building, erection or structure on any portion of the demised land,
except in accordance with the building, regulations or
development control rules framed by the corporation from time to
time, or the municipal regulations or any other regulations in
force from time to time.
(vii) Restrictions against assignment - the lessee shall not sell,
assign mortgage, underlet, or otherwise transfer wholly or partly
the demised land, or his interest therein, or part wholly or partly,
with the possession of the demised land or permit any person to
use wholly or partly, the demised land, (hereinafter referred to as
“transfer of the demised land”), PROVIDED THAT nothing
contained herein shall apply if the lessee shall perform to the
satisfaction of the Corporation the following conditions:-
(A) Before transferring the demised land, the lessee shall pay to
the corporation one half of the difference between the declared
premium and the premium paid by the lessee to the Corporation,
for obtaining the lease of the demised land, subject to a minimum
of Rs.1000/-.
(B) In the instrument by which the lessee shall transfer the
demised land, the lessee shall impose upon the person to whom
the demised land is so transferred to perform and observe to the
corporation all the conditions and covenants of the lease granted
to him, the Lessee.”
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10. The Regulations also provided for mode of disposal of
land which was set out by way of public auction or tender, or by
considering individual applications as the Corporation may
determine.
It also set out the premium agreed to be paid by the
intending lessee upon acceptance of the proposal by the
Corporation.
The Regulations also contain specific provisions for grant
of land for religious/educational/charitable and public
purposes.
11. It is these regulations which came to be amended by
inserting an explanation and we have before us the agenda note
circulated before the Board of Directors of CIDCO with regards
to the subject of amendment to clause (vii) of Regulation no.3
of the Regulations, 1975.
The agenda note which was forwarded recorded thus :-
“3 The power and authority of the corporation is, by virtue of
sub-section(1) of section 118 of the said act, qualified by the
limitation of such disposal to leases only. The lease of land or
immovable property is defined by section 105 of the Transfer of
property Act, 1882 as “a transfer of right to enjoin such property,
made for a certain time, express or implied, or in perpetuity, in
consideration of a price paid or promised or any other thing of value,
to be rendered periodically or on specific occasions to the transferor
by the transferee who accepts the transfer on such terms. The
transferor is called the lessor, the transferee is called the lessee, the
price is called the premium and the money or other thing to be so
rendered is called the rent. It is posited by section 10 of the Transfer
of Property Act,1882 that where the land or property is transferred
subject to a condition or limitation absolutely restraining the
transferee from parting with or disposing of his interest in the land
or property, the condition or limitation is void except in case of a
lease where the condition is for the benefit of the Lessor.
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4. It is in pursuance to this provision of law that the Lessor and
for that matter, the corporation restricts the Lessee to transfer his
leasehold interest in the land. This restriction is warranted for the
benefit of the corporation where the land is leased not at its market
price or premium but at a concessional rate of premium to subserve
the wider interests of the society in the context of the planned
development of New Bombay and the accelerated decongestion of
Greater Bombay. Besides, in the inflationary economy in the
country, the land values tend to rise at an extraordinary rate and such
an unearned increment of value accruing to the Lessee of the
corporation deserves to be mapped up by the corporation to be
ploughed back in the development of New Bombay for the benefit of
the community and for public purpose. This restriction has its
parallel in the state govt and other authorities engaged in housing or
urbanising activity.”
12. In the backdrop of the fact that the Corporation was
desirous of launching it’s scheme of leasing land to co-operative
housing societies for the purpose of affording accommodation
on reasonable terms to the lower income and middle income
groups or classes of the community, at a premium to be
calculated at the rate of percentage of its reserve price, far less
than the market price and it intended to break even the cost of
its acquisition together with the cost of its urbanisation in the
departmental parlance as the city development cost.
In the wake of the fact that the scheme intended to offer
affordable residential accommodation, it was thought
imperative for the Corporation to ensure that such a salutary
object is not thwarted by unscrupulous persons or by devious
methods. Therefore, it was deemed essential to ensure that the
land is used by persons for whose benefit it was intended to be
leased by the Corporation. However, since the Corporation had
the privity of contract only with the Co-operative Housing
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Societies and not with the individual members, it devised a
safeguard to restrict not only the Society but also each of its
constituents from parting with the benefit of the land intended
for them, by applying the safeguard or device through the
Society, who is in contract with the Corporation.
It is in this aforesaid contingency, the agenda stipulated
thus :-
“7. The task of prohibiting a member of a co-operative housing
society from transferring his share in the society and incidentally his
right to occupy the tenement allotted to him by the society is
formidable for the corporation for reason that such a member has no
privity of contract with corporation and is not amenable to its code of
conduct. The corporation is constrained to forge an extra contractual
devise against him. It is only through the medium of society that
corporation is entitled to regulate or restrict his freedom to transfer
his share.”
To this end, it is proposed to amend clause (vii) to add
explanation (iii) so as to provide as to what would constitute
“transfer of the demised land” by providing where the land with
or without a building erected thereon or to be erected thereon
is leased to or demised unto or agreed to be leased or demised
upto a company or a co-operative housing society for the
purpose of providing accommodation to its shareholders or
members, it shall include the transfer of a share or shares by its
shareholder or member or any agreement or act or omission
whatsoever of such shareholder or member which has the effect
of transferring or enabling the enjoyment of such land or
building or a part thereof. In the case of such transfer, the lessee
being a company or as the case may be a society shall pay one
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half of the difference the declared premium and the premium
paid by the lessee as is allocable to the land or building or part
thereof so transferred or agreed to be transferred by a
shareholder or member.
13. It was also realised that the aforesaid amendment itself
would not achieve the desired object but it would be necessary
to include this explanation into every Agreement of lease and
the Deed of lease to be made and executed between the
Corporation and Lessee Society to impose contemplated
obligation on the Society. Therefore, it was also directed that
the Society shall amend the Bye-laws if already existing, or it
shall make Bye-laws providing necessary stipulations to the
following effect :-
“No member shall transfer his share in the society or part with the
possession of the tenement to be allotted to him by the society or permit
any person to use or occupy such tenement except securing in writing
the permission from the City and Industrial Development Corporation of
Maharashtra Limited and except upon the payment of additional
premium at the rate determined by the said condition or covenant.”
14. This agenda received approval through a resolution
passed by the Board of Directors and as a consequence thereof,
a notification was published by CIDCO, thereby inserting the
Explanation (iii) after Explanation (ii) to clause (vii) of
Regulation 3 of Regulations of 1975 and the notification
published read thus:-
“Whereas ,in exercise of the powers conferred by sub-clause (a) of clause (1) of
section 159 of the Maharashtra Regional and Town Planning Act ,1966 (Mah
XXXVII of 1966), the city and industrial development corporation of
Maharashtra Ltd, hereinafter referred to as “the corporation” being the New
Town Development Authority for the new town of New Bombay Disposal of
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Land regulations, 1975, hereinafter referred to as “the said regulations”
And whereas it is considered expedient to insert the explanation (iii) after
explanation (ii) to clause (vii) of regulation 3 of the said regulations, that is to
say:-
“Explanation (iii) ‘transfer of the demised land’ shall where the land
with or without a building erected thereon or to be erected thereon is
leased to or demised unto or agreed to be leased or demised unto a
company registered under the companies act, 1956 (I to 1956) or a co-
operative housing society registered under the maharashtra co-operative
societies Act, 1960 (Mah.act. no.XXIV of 1961) or any law for the time
being in force for the registration of a corporate body for the purpose of
providing accommodation to its shareholders or members, include the
transfer of a share or shares by its shareholder or member or any
agreement or act or omission whatsoever of such shareholder or member
which has the effect of transferring or enabling the enjoyment of such
land or building or a part thereof. In the case of such transfer, the lessee
being a Company or as the case may be a Society shall pay one-half of the
difference of the declared premium and the premium paid by the lessee
as is allocable to the land or building or part thereof so transferred or
agreed to be transferred by a shareholder or member and such allocation
shall be with reference to the proportion which the floor space index (as
defined in the General Development Control Regulations constituting the
development plan for New Bombay for the time being in force)” of the
land or building permitted by the corporation shall bear to such Floor
space Index of the land or building or part thereof so transferred or
agreed to be transferred.
And whereas, the government of Maharashtra has in exercise of its
powers under sub-clause (a) of clause (1) of section 159 of the said act,
read with section 21 of the Bombay General Clauses Act, 1903, granted
approval to the foregoing amendment to the said Regulations.
Now, therefore, it is hereby notified for the information of public
that the said regulations shall stand accordingly amended from the
date of the publication of the notification in the Maharashtra
Government Gazette.”
15. The aforesaid event was followed by a Government Order
issued by the Urban Development Department with regard to
the subject of “Allotment of land/plots to the Co-operative
Housing Societies in New Bombay by CIDCO Revised policy in
respect of”.
The said order in its preface set out that the Government
had laid down the policy guidelines under its letter dated
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28/7/1989 and since the CIDCO is making allotment of
plots/lands to the Co-operative Societies, according to these
policy guidelines and condition of lease prescribed under the
New Bombay Disposal of Lands Regulations, 1975, as amended
from time to time, and since it was noted that there is a wide
difference between the market rate and concessional rate of the
lands resulting into certain malpractices, abuses and therefore,
a request made by the Managing Director of CIDCO was
considered by the State Government to prevent such
malpractices. Vide Government Order dated 17/6/1993,
Managing Director of CIDCO was directed to stop giving plots/
lands on concessional rate to co-operative housing societies, till
preventive measures are formulated and revised policy is
decided upon by the Government.
Thereafter, CIDCO was requested to stipulate appropriate
conditions and submit a proposal to the Government for
deciding revised policy and Government received
representation from various co-operative societies to vacate the
stay granted, and in exercise of the power conferred by Section
154 of the MRTP Act, the Government vacated the stay and
directed CIDCO to consider the revised policy guidelines for
inclusion in the lease agreement by CIDCO while making
allotment of plots to the Co-operative Housing Societies.
This included various stipulations regarding lease
premium charged to the co-operative housing societies and
certain restraints being imposed upon the Co-operative Housing
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Society to whom the plot/land is allotted by CIDCO and
including the following stipulations :-
i) Society shall utilise lands only for the purpose of constructing of
residential tenements for its approved members and the lands or any
part thereof shall not be utilised by the Society or by any of its members
directly or indirectly for any commercial business, professional
purpose;
ii) The land or any part thereof shall not be sold, mortgaged,
leased, transferred or in any other way alienated without the written
previous permission of CIDCO;
iii) Society shall not permit any of its members. to lease or sub-let
or give on Leave and Licence basis, or to transfer the house/flat held by
him or her without the prior written permission of the CIDCO.
iv) Society shall not enroll any new member or substitute any member
without prior written permission of the CIDCO. The transfer/handing
over of the flat in the Cooperative Housing Society by the member
under the instrument of Power of Attorney, without prior written
permission of CIDCO will be treated as a breach of condition and the
person in occupation as a Power of Attorney being an illegal occupant
will be liable to be evicted.
v) The house/flat should be occupied personally by the members
as as soon they are ready for occupation and if any member does not
occupy the house/flat the same-shall be placed at the disposal of the
CIDCO who shall arrange to pay the rent to the said member as may he
determined by the CIDCO.
16. The Regulations of 1975 once again underwent
Amendment by the Amendment Regulations 2008, which were
made applicable to all lands and apartments of the Corporation
in Navi Mumbai and the Regulations provided for conditions for
disposal of plots including the conditions of lease, as stipulated
in Chapter IV which included several stipulations including the
restrictions against assignment of leasehold rights, restricting
the lessee from selling, assigning, under-letting, or otherwise
transferring the demised land or his interest therein, wholly or
partly.
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It is worth to note that the said regulation define the term
‘Lease, Lessor and Lessee’ in clause 2(ix) to convey that it shall
have the same meaning assigned under Section 105 of the
Transfer of Property Act.
Worth it to note that the conditions of Lease stipulated
contemplated a lease to the Society and not to an individual
and what is relevant to note is the clause pertaining to grant of
Lease, which clearly provided that the allottee shall join in
forming and registering a Company or a housing society under
the provisions of the Companies Act, 1956 or a housing society
under the provisions of the Maharashtra Co-operative Societies
Act, 1960 or an Apartment Owner’s Association under the
Maharashtra Apartment Ownership Act, 1970.
Sub-clause (ii) of clause 15 of the Amended Regulation
now made it imperative for the Company or the Society to
include the following stipulations in the Articles of Association
and Memorandum of Association in case of Company and the
following stipulations in Bye-laws of the Society :-
“Every shareholder/member shall be bound by the Navi Mumbai
Disposal of Lands (Amendment) Regulations, 2008 as amended from
time to time during the subsistence of the Agreement for Sale made
between the said Corporation & shareholder/member and also
during the subsistence of the Lease Deed made between the said
Corporation and the Company or Society or Apartment Owner's
Association.”
“No shareholder/member shall transfer his/her shares in the
Company/Society or otherwise create third party interest in respect of
the apartment allotted to him/her, nor the Company/Society shall give
the permission to its shareholder/member for such transfer, without
the prior written permission of the Corporation.
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The Company/Society shall not delete or otherwise amend these
Articles/By-laws.
It is only upon full payment of their respective dues to the
Corporation by the allottees and on compliance by them, of all
terms and conditions of Agreement for Sale executed with the
Corporation, it was under an obligation to grant lease to the
Company of the Society, as the case may be, and to accept the
lease of the condominium for period of 60 years to be
computed from the date of execution of first Agreement for Sale
in respect of apartment within such condominium.
This Regulation also imposed a restriction against transfer
and included the restriction imposed on the Apartment owner
to the following effect :-
16. Restrictions against transfer.-(i) Except if specifically provided in
a particular scheme, before the Agreement for Sale the Allottee shall
not transfer the rights, benefits & interest he derives in the apartment
allotted to him. Provided that in a deserving case, if the Allottee
fulfills satisfactorily the terms and conditions of allotment of
apartment, the Managing Director may allow such transfer only to
person who fulfill the same eligibility criteria on payment of Transfer
Charges as may be fixed from time to time and on execution of such
documents as may be determined thereto, provided further that the
person to whom such transfer is proposed is eligible to contract under
the Indian Contract Act, 1872.
(ii) After the Agreement for Sale/grant of lease, the Apartment Owner
shall not sell, assign, mortgage, underlet, sublease or otherwise
transfer wholly or partly the apartment sold to him or his interest
therein or in the Agreement for Sale or shall not part with the
possession of such apartment nor shall permit any person to use
wholly or partly such apartment without the prior written permission
of the Managing Director, which permission shall, on request of the
Apartment Owner may be granted on execution of such documents
and on payment of Transfer Charges at the rate as may be determined
from time to time:
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Provided that in the instrument by which the apartment is proposed
to be transferred, the Apartment Owner shall impose upon the
Transferee full obligation to perform and observe to the Corporation
the conditions and covenants of the Lease granted to the Company or
to the Society, as the case may be.
Explanation:- Nothing contained herein shall apply to mortgage the
apartment or any part thereof, to the Central Government, State
Government, Nationalised Bank, the Life Insurance Corporation of
India, the Maharashtra State Finance Corporation, an employer of the
Apartment Owner or to any other financial institution as may be
approved by the Corporation from time to time, provided that until
the execution of Agreement for Sale, such mortgage shall only for
obtaining the loan for paying the sale price of the apartment to the
Corporation.
(iii) Transfer of apartment to the legal heirs:- (a) In case of
demise of the Apartment Owner before the formation and registration
of a Company or Society or an Association of the Apartment Owners
within a condominium, the apartment shall be transferred to the legal
heirs of demised Apartment Owner, as may be declared by a Court of
law by the Succession Certificate or by Heirship Certificate or in case
of a Will made by he demised Apartment Owner, by a probate.
(b) In cases, except those referred at (a) above, the respective
Company or a Society or an Apartment Owner's Association, as the
case may be, shall transfer the shares and the apartment of the
demised Apartment Owner, to his/her legal heir in accordance with
the provision in the Articles of Association and Memorandum of
Association and Bye-laws, as the case maybe, and inform to the
Corporation the decision so taken, with the details of legal heir in
whose name transfer is effectuated, for enabling the Corporation to
take a note thereof in its record to administer the apartment.
17. It is in the aforesaid statutory regime we must examine
the claim of the petitioners.
At the outset, we must record that the petitioner no.1 is a
Federation of Co-operative Housing Society and as paragraph
no.1 of the petition has indicated that it has 2528 co-operative
housing societies as its members.
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We have before us petitioner nos.2 and 3 which are two
Co-operative Housing Societies, which are the members of
petitioner no.1 Federation.
While seeking the relief in the petition, it is prayed that
the respondent no.1 shall not demand transfer charges in
respect of Co-operative Housing Societies, in particular,
petitioner nos.2 and 3 where the allotment letter, agreement to
lease and lease deed executed is prior to 8/2/1990 when the
amended provision in the Regulation of 1975 came into force.
A declaratory relief is also sought to the effect that the
explanation (iii) is added to Regulation 3 (vii) shall be declared
to have a prospective effect to the exclusion of the co-operative
societies where the lease deed is executed prior to 8/2/1990.
18. We find that there are no details of the Societies enlisted
at Exhibit-A, except their names. We find the list of 9 Societies
where it is alleged that the Lease Deed has been entered prior
to 8/2/1990 along with four other Societies which are enlisted
at Exhibit-B. It is not in dispute that the amendment by way of
clarification was introduced in the Regulation, may be with
avowed purpose and the explanation (iii), in relation to the
restrictions against assignment which prevented the Lessee to
sale, assign, mortgage underlet or otherwise transfer the
demised land or its interest therein or part wholly or partly or
permit any person to use wholly or partly the demised land
unless the following two conditions are complied with :-
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(a) Before transferring the demised land, the lessee
shall pay to the corporation one half of the difference
between the declared premium and the premium paid by
the lessee to the corporation, for obtaining the lease of the
demised land,subject to a minimum of Rs.1,000/-.
(b) In the instrument by which the lessee shall transfer
the demised land the lessee shall impose upon the person to
whom the demised land is so transferred to perform and
observe to the corporation all the conditions and covenants
of the lease granted to him, the Lessee.
19. By virtue of the amendment, an explanation is added
defining the term ‘transfer of the demised land’ and it is
clarified that if with or without the building standing thereon, is
leased to or demised upon a Company or a Co-operative
housing society for the purpose of providing accommodation to
its shareholders or members, then the said term shall include
even a transfer of share or shares by its shareholders. It is
further clarified that in case of such transfer, the Lessee, being
the company or as the case may be, the Society, shall pay one
half of the difference of the declared premium and the premium
paid by the lessee as if is allocable to the land or building or
part thereof so transferred or agreed to be transferred by its
shareholder or a member and such allocation shall be with
reference to the proportion which the FSI of the land or
building permitted by the Corporation shall bear to such FSI of
the land or building or part thereof so transferred or agreed to
be transferred.
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20. By virtue of the said amendment, when the restriction is
imposed on the Lessee and there is a prohibition against
assignment, unless and until the Lessee had paid to the
Corporation the difference between the declared premium and
the premium paid by the lessee to the Corporation when the
lease deed was executed. The clarification offered by the
explanation is that transfer of the demised land shall include
the transfer of a share by its shareholder and it will apply to an
act or omission which has the effect of transferring or enabling
the enjoyment of such land or building or part thereof.
21. The arguments canvassed before us on behalf of the
petitioners is, that this condition being imposed by the
amendment though in form of an explanation, which offered a
clarification cannot have a retrospective effect and in fact, the
Lease deed which is executed between CIDCO and petitioner
no.2 and 3 which forms part of the petition do not include any
such restriction.
We have perused the Lease deed executed on 4/5/1983
between CIDCO and Surya Co-operative Housing Society,
referred to as the ‘Lessee’, where it is recorded as below :
“The Lessor agreed to grant to the Lessee upon the performance and
observance by the Lessee of the obligations and conditions contained
in the said agreement, a lease of the piece of the land and premises
(hereinafter described and WHEREAS the Lessee requested the Lessor
to grant a lease before completion of construction of
building/buildings in relaxation of condition no.7 of the Agreement to
lease executed and whereas the lessor granted necessary permission
as a special case”
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The covenants of the said lease deed contain various clauses
distinctly set out as below :-
To pay rent
To pay rates and taxes,
Not to excavate,
Not to erect beyond the building line
Not to build, except with the permission of the lessor.
Alterations.
To enter and inspect.
Nuisance.
User.
22. There is also another important clause captioned as ‘Not
to assign’ and it has subjected to the following conditions :-
“Not to sell, assign, mortgage, underlet or otherwise transfer
wholly or partly the demised premises or his/theirs/its interest
therein or part wholly or partly with the possession of the demised
premises or permit any person to use wholly or partly the demised
premises PROVIDED thing contained herein shall apply if the
lessee shall perform to the satisfaction of the Lessor the following
conditions :-
(i) Before transferring the demised premises, the Lessee shall pay
to the Lessor one half of the difference between the declared
premium (i.e. premium calculated at such rate or rates as may be
determined by the Lessor, for obtaining the lease of the demised
land subject to a minimum of Rs.1,000/-.)
(ii) In the instrument by which the Lessee shall transfer the
demised premised the Lessee shall impose upon the person to
whom the demised premises are so transferred to perform and
observe to the Lessor all the conditions and covenants of the lease
granted to him including this covenant.”
23. Admittedly, in the said Lease deed, where there is a
restriction on assignment, which is only imposed upon the
Lessor and it do not stipulate this condition being imposed
upon the member or a shareholder of the Lessor. The
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explanation of the term “Transfer of the demised land” is
introduced by way of an amendment and it clarify that it shall
also include the transfer of share or shares by its shareholder or
a member and any agreement or act of omission whatsoever of
such shareholder, which has the effect of transferring or
enabling the enjoyment of such demised premises or a part
thereof.
It is worth to note that till explanation was introduced,
what was only contemplated was the permission by the Lessor
and it is only by way of amending the regulations in 2008 the
restrictions against transfer was imposed, by prescribing that
the Managing Director would allow such transfer, to fulfil the
eligibility criteria on payment of transfer charges and sub-
clause (2) of Clause 16 extended it to the Apartment owner
who was required to seek written permission of the Managing
Director, if he intended to sell, assign, mortgage, sub-lease or
otherwise transfer the Apartment sold to him or his interest
therein and such permission may be granted on payment of
transfer charges, as may be determined from time to time.
This being specifically included as a part of the
Regulations by the Amendment Regulations of 2008, the
intention of CIDCO is evidently clear and in order to give effect
to the explanation, it amended the Regulation to extend the
same to flat owner. In the lease deed executed with the Society
i.e. petitioner no.2, the restriction on assignment, clearly
contemplated that before transferring the demised premises,
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which only extended to plot of a land, the lessee was under an
obligation to pay to the lessor one half of the difference
between the declared premium and the premium paid by the
lessee to the lessor for securing the lease, so that by selling the
property, the lessee do not enrich itself and if at all, it must
share the benefit with CIDCO.
24. We also noted that the Government vide its order dated
3/3/1994 exercised its power under section 154 of the MRTP
Act, 1966 and directed CIDCO to consider the revised policy
guidelines for inclusion in the lease agreement by CIDCO,
several stipulations including that Society shall not permit any
of its members to lease or sub-let or give on leave and licence
basis or to transfer the house/flat held by them or her without
prior written permission of CIDCO. The Society was also not to
enroll any new member or substitute any member without prior
written permission of CIDCO and if any member indulges into
the same, it would be treated as breach of condition and a
person would be liable to be evicted.
25. A conjoint reading of the amendments in the Regulation
of 1975 and the order issued by the State Government is clearly
reflective of the fact that the flat owners/the members of
individual society/shareholder was not cast with any obligation
to pay the amount upon the transfer of his unit, but the
obligation was only upon the Society as per the terms and
conditions of the lease and the 1975 Regulation. The transfer
charges to be recovered from each shareholder/member was
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not the requirement or part of the lease condition when the
lease was granted in favour of the Society, but after the
amendment of the Regulation with effect from 1990 as well as
the further amendment of the Regulation in the year 2008, it
became necessary for the Society to have this clause
incorporated in the lease agreement itself, so that every
member/shareholder of the Society is aware of its obligations
and even on transfer of an individual flat in the Society, he shall
be liable to make payment of transfer charges.
26. When we have perused the impugned order issued by
CIDCO in regards to Manmandir Co-operative Housing Society
on 26/10/2016, we find that there is a reference to the
transfers which took place without CIDCO’s permission and the
transfers in the said Society were subjected to levy of transfer
charges in favour of CIDCO. The letter being addressed to the
Secretary of the Society, we find the Society objecting to this
aspect, since this was not a condition stipulated in the lease
deed. The Society has responded, and according to us, rightly,
by submitting that when the lease deed was executed, on
13/8/1987, it did not contain any clause/condition for payment
of transfer charges for the transfer of right/title and interest in
the property and this clause was subsequently introduced by
CIDCO in 1990-91. The Lease deed/agreement was never
amended and as long as the lease subsisted i.e. for a period of
60 years i.e. from the date of its execution, the lease rent was
remitted by the Society and therefore, the demand for payment
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of transfer charges in the wake of the transfers of the individual
flats in the Society is said to be unwarranted.
27. We find substance in the submission of Ms. Gayatri Singh
that howsoever laudable the purport of CIDCO may be, it
cannot unilaterally modify the conditions in the Lease deed, nor
shall it apply the provision introduced for charging transfer fee
to its shareholder or member who transfer his share/shares or
does any act which has the effect of transferring his interest in
the land or building or part thereof, which was the stipulation
when the lease deed was executed.
It is well settled principle of interpretation that unless a
contrary intention appears, a legislation is presumed not to be
intended to have a retrospective operation. The idea behind
the rule being a current law should govern the current
activities and the Law passed today cannot apply to the events
of the past.
28. In Commissioner of Income Tax-I, New Delhi Vs. Vatika
Township P. Ltd,1 the Apex Court has elaborated the principles
against retrospectivity by describing it as the principle of
fairness and it is so set out in the following words :-
“28. Of the various rules guiding how a legislation has to be
interpreted, one established rule is that unless a contrary intention
appears, a legislation is presumed not to be intended to have a
retrospective operation. The idea behind the rule is that a current law
should govern current activities. Law passed today cannot apply to
the events of the past. If we do something today, we do it keeping in
view the law of today and in force and not tomorrow's backward
adjustment of it. Our belief in the nature of the law is founded on the
bedrock that every human being is entitled to arrange his affairs by
relying on the existing law and should not find that his plans have
1 2015 1 SCC page 1
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been retrospectively upset. This principle of law is known as lex
prospicit non respicit : law looks forward not backward. As was
observed in Phillips v. Eyre [(1870) LR 6 QB 1] , a retrospective
legislation is contrary to the general principle that legislation by
which the conduct of mankind is to be regulated when introduced for
the first time to deal with future acts ought not to change the
character of past transactions carried on upon the faith of the then
existing law.
29. The obvious basis of the principle against retrospectivity is the
principle of “fairness”, which must be the basis of every legal rule as
was observed in L'Office Cherifien des Phosphates v. Yamashita-
Shinnihon Steamship Co. Ltd. [(1994) 1 AC 486 : (1994) 2 WLR 39 :
(1994) 1 All ER 20 (HL)] Thus, legislations which modified accrued
rights or which impose obligations or impose new duties or attach a
new disability have to be treated as prospective unless the legislative
intent is clearly to give the enactment a retrospective effect; unless
the legislation is for purpose of supplying an obvious omission in a
former legislation or to explain a former legislation. We need not note
the cornucopia of case law available on the subject because aforesaid
legal position clearly emerges from the various decisions and t his
legal position was conceded by the counsel for the parties.”
29. The very said decision has also laid down the principle in
construing an amendment which is introduced and whether it
can be treated as clarificatory or declaratory in nature and the
Hon’ble Apex Court has reproduced the exposition of law on
this subject as explained by Justice G.P. Singh (in principles of
statutory interpretation, 13th Edition) in the following words:-
“32. ………. Declaratory statutes : The presumption against
retrospective operation is not applicable to declaratory statutes. As
stated in Craies [ W.F. Craies, Craies on Statute Law (7th Edn., Sweet
and Maxwell Ltd., 1971)] and approved by the Supreme Court
[Ed. : The reference is to Central Bank of India v. Workmen, AIR
1960 SC 12, para 29] :‘For modern purposes a declaratory Act may
be defined as an Act to remove doubts existing as to the common
law, or the meaning or effect of any statute. Such Acts are usually
held to be retrospective. The usual reason for passing a declaratory
Act is to set aside what Parliament deems to have been a judicial
error, whether in the statement of the common law or in the
interpretation of statutes. Usually, if not invariably, such an Act
contains a Preamble, and also the word “declared” as well as the
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word “enacted”.’ But the use of the words ‘it is declared’ is not
conclusive that the Act is declaratory for these words may, at times,
be used to introduced new rules of law and the Act in the latter case
will only be amending the law and will not necessarily be
retrospective. In determining, therefore, the nature of the Act,
regard must be had to the substance rather than to the form. If a
new Act is ‘to explain’ an earlier Act, it would be without object
unless construed retrospective. An explanatory Act is generally
passed to supply an obvious omission or to clear up doubts as to the
meaning of the previous Act. It is well settled that if a statute is
curative or merely declaratory of the previous law retrospective
operation is generally intended. The language ‘shall be deemed
always to have meant’ is declaratory, and is in plain terms
retrospective. In the absence of clear words indicating that the
amending Act is declaratory, it would not be so construed when the
pre-amended provision was clear and unambiguous. An amending
Act may be purely clarificatory to clear a meaning of a provision of
the principal Act which was already implicit. A clarificatory
amendment of this nature will have retrospective effect and,
therefore, if the principal Act was existing law which the
Constitution came into force, the amending Act also will be part of
the existing law.”
30. The principle of law which could be discerned from the
above passage is to the effect that if the statute is curative or
merely declaratory of the previous law, then retrospective
operation is generally intended and the clarificatory
amendment will have retrospective effect, but in absence of
clear words indicating that the amending Act is declaratory, it
would not be so construed when the pre-amended provision
was clear and unambiguous. Therefore, if an amending clause
do not seek to explain any pre-existing legislation which post
some ambiguity or defect, and it do not attempt to explain the
meaning of that provision, but expand its scope to bring within
the main provision, certain other objects or things, which would
have an adverse impact on their rights or entitlement, in that
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case, definitely, it cannot be given a retrospective effect.
31. The aforesaid principle against retrospectivity apply with
full force to a delegated legislation, which ordinarily will have a
prospective effect as a right or liability which was created for
the first time, cannot be given a retrospective effect.
In Federation of Indian Mineral Industries Vs. Union of
India,2 the Apex Court held thus :-
“26. The power to give retrospective effect to subordinate legislation
whether in the form of rules or regulations or notifications has been the
subject-matter of discussion in several decisions rendered by this Court
and it is not necessary to deal with all of them—indeed it may not even
be possible to do so. It would suffice if the principles laid down by some
of these decisions cited before us and relevant to our discussion are
culled out. These are obviously relatable to the present set of cases and
are not intended to lay down the law for all cases of retrospective
operation of statutes or subordinate legislation. The relevant principles
are:
(i) The Central Government or the State Government (or any other
authority) cannot make a subordinate legislation having
retrospective effect unless the parent statute, expressly or by
necessary implication, authorises it to do so. [Hukam Chand v.
Union of India [Hukam Chand v. Union of India, (1972) 2 SCC
601] and Mahabir Vegetable Oils (P) Ltd. v. State of Haryana
[Mahabir Vegetable Oils (P) Ltd. v. State of Haryana, (2006) 3 SCC
620] ].
(ii) Delegated legislation is ordinarily prospective in nature and a
right or a liability created for the first time cannot be given
retrospective effect. (Panchi Devi v. State of Rajasthan [Panchi Devi
v. State of Rajasthan, (2009) 2 SCC 589 : (2009) 1 SCC (L&S)
408] )
(iii) As regards a subordinate legislation concerning a fiscal statute,
it would not be proper to hold that in the absence of an express
provision a delegated authority can impose a tax or a fee. There is
no scope or any room for intendment in respect of a compulsory
exaction from a citizen.
It is equally well settled that when an issue arises before
the Court whether a statute is prospective or retrospective, the
2 (2017) 16 SCC 1860
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Court shall proceed to deal with the issue by keeping in mind
the presumption of prospectivity articulated in legal maxim
nova constitutio futuris formam imponere debet non praeteritis
i.e. “a new law ought to regulate what is to follow, not the
past”. The presumption of prospectivity operates unless shown
to the contrary by express provision in the statute or is
otherwise discernible by necessary implication.”
In words of Lord Blanesburg, provisions which touch a
right in existence at the passing of the statute are not to be
applied retrospectively in the absence of express enactment or
necessary intendment’
32. Any statute or a provision in a statute which takes away
or impairs vested right or creates a new obligation or impose a
new duty, or attaches a new disability in respect of the
transactions done in the past, must be presumed to be intended
not to have a retrospective effect.
As observed in principles of statutory interpretation by
Justice G.P. Singh, as a logical corollary of the general rule, that
retrospective operation is not taken to be intended unless that
intention is manifested by express words or necessary
implication, there is a subordinate rule to the effect that a
statute or section in it, is not to be construed as to have larger
retrospective operation than its language renders necessary.”
33. If a statute or provision is intended to operate ante-date
then, by an express provision, it can be so done and the
presumption against retrospectivity can be rebutted by
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necessary implication in case where the new law is made to
cure an acknowledged evil for the benefit of the community as
a whole, otherwise, every statute or a provision in a statute
shall be presumed to have a prospective operation.
When it comes to the statute prescribing compliance or
formalities for effecting transfers, such a provision cannot be
given a retrospective effect so as to bring within its sweep
transfers made prior to their enforcement. A validity of existing
contract is not affected by a posterior act making contracts of
that nature void, as when a contract which was entered
between the parties, the parties take their positions considering
the prevailing scenario that would affect their right or liability
and imposing an additional liability and denuding one of the
party of the benefit which was otherwise available to it at the
time when contract was entered into, by reading an amended
provision into it, would be highly unfair.
34. In Ajay Gupta and ors Vs. State of Maharashtra, 3 a
decision involving The New Bombay Disposal of Lands
Regulations, 1975, with reference to the disposal of Land
(Amendment) Regulations 2008 in regards to its applicability to
the grant of lease by CIDCO, the Division Bench of this Court in
the backdrop of the fact that the allotment under the agreement
of lease was to Air India as far back in 1992 for the construction
of staff quarters, recorded that the allotment was not in
pursuance of a scheme that was contemplated by the
3 2012 SCC Online Bom 1026
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Regulations of 2008, noted that the allotment was evidently
not governed by the Regulations of 2008. As a matter of fact,
the record indicated that the process had begun much prior to
the publication of the amending Regulations of 2008 and even
the earlier Regulations of 1999 contemplate a scheme under
which allotments would be made. In this peculiar background,
the Division Bench observed thus :-
“19 In the circumstances, we are of the view that the action of
CIDCO in insisting upon the observance of a fifteen years' residential
requirement (in the State) as a condition of eligibility for the
employees of Air India was contrary to law and would have to be set
aside. Independently we are of the view that having regard to the
background of the case and the nature and purpose of the allotment,
it would be necessary to record the undertaking which has been
tendered on behalf of the Petitioners to the effect that no employee to
whom an allotment is made owns more than one residential unit in
Navi Mumbai, either in his or her name, or as the case may be, in the
name of the spouse, or family consisting of dependent children. We
accept the undertaking. We direct that in consequence CIDCO shall
examine the proposals for eligibility in terms of the earlier orders of
the Division Bench dated 30 June, 2010 and 9 February, 2011 and in
terms of the aforesaid directions. This process shall be completed by
CIDCO within a period of one month of the date on which an
authenticated copy of this order is made available.”
As a result, the petition was made absolute.
35. We have also taken note of one decision delivered by this
Court at Nagpur in case of Jaikumari Amarbahadursingh & Ors
Vs. State of Maharashtra,4 wherein the question which fell for
consideration was whether the lands which were allotted
pursuant to a lease deed and when the lease condition provide
for right to transfer or alienate and inheritance, and which
postulated that on expiry of the lease period, the Authority will
4 2008 SCC Online Bom 951
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renew the lease for further period on the same terms and
conditions, but on expiry of the lease period, the Competent
Authority failed to execute the requisite renewal and insisted
that the petitioner should accept new conditions to be
incorporated, which were prejudicial to the rights and interest
of the petitioners.
It was urged that the insistence by the Authority to
impose any new conditions such as putting restriction on the
right to alienate the land only after taking approval of the
competent authority and upon payment of unearned income, is
ex-facie illegal, impermissible and ultra vires, whereas in law,
the Authority was obliged to renew the lease on the same terms
and conditions which were to be found in the former lease.
The Government placed reliance upon the resolutions
issued by it from time to time and justified the insertion of new
condition required to the grantee/lessee to take prior
permission of the Revenue Authority before effecting transfer of
the land in question at the time of renewal of lease which has
already expired or likely to expire in near future. It justified
imposition of condition to claim/levy unearned charges so as to
legitimize and regularise the transfer of the land to the
grantee/lessee.
The power of the State was justified with reference to the
provisions of the Government Grants Act, 1895. It was
therefore, urged that agreement was created only as a licence
which was revocable at the Will of the granter and the
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Government defended its action of revoking a contract as
necessitated in larger public interest.
In the wake of the contesting arguments being advanced
with reference to the provisions of the MLR Code, the Division
Bench observed thus :-
“45. Taking over all view of the matter, we have no difficulty in
accepting the claim of the petitioners that provisions enacted by the State
Legislature as of now would not authorise the State Government to insert
new conditions or modify any condition during the subsistence of lease
period or for that matter at the time of renewal of the lease. The renewal
of the lease necessarily should be on same terms and conditions as in the
earlier lease except the change or revision in respect of Annual lease rent.
48.Much emphasis is placed on the observations of the Apex Court in
Mangalmurti's case (supra) which has noted that the Court cannot ignore
the position that when the plots were let out to the respective lessees, the
lessees have paid premium. The fact remains that the earlier lease period
either had expired or was likely to expire and new lease is to be entered.
Significantly, the Apex Court had noted that it would be unrealistic not to
take into account increase in the market value of the property. Indeed,
the Apex Court added word of caution that importance of that fact should
not be exaggerated and that should not be a decisive factor itself.
………………………………..
49. To sum up, we hold that the principle stated in Mangalmurti's case
(supra) that it is not open to the State Government to add new condition
during the subsistence of the lease or at the time of renewal of the lease
unless the conditions of the tenure so provide is binding. However, if the
conditions of the grant or lease imposes such restriction, condition or
limitation, obviously, that would be protected by section 3 of the
Government Grants Act, 1895. In cases where such condition has been
imposed, obviously, those cases will not be covered by the definition of
“occupants Class-I” so as to enjoy permanent and transferable right in the
land.”
36. In light of the aforesaid position emerging in law and it
being applied to the facts before us, we must express that the
Explanation (iii) which is added by the Amendment to the
Regulations of 1975, on it being published in the Government
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notification, though is projected before us as offering
clarification to the main provision, in our view, cannot be
construed to be explanatory or clarificatory, but not only in our
view, but also in the opinion of CIDCO as well as State
Government, it was a substantive provision, where fastening
the liability of the members of the Cooperative Housing Society
and its shareholder, who intended to transfer the share/shares
or or indulge in any act which has the effect of transferring or
enabling the enjoyment of such land or building or part thereof.
The amended provision specifiy that in case of such a
transfer, the lessee being a Company or the Society shall pay
one half of the difference of the declared premium, and the
premium paid by the lessee, as is allocable to the land or
building or part thereof, so transferred or agreed to be
transferred by a shareholder or a member, shall be with
reference to the proportion which the Floor Space Index of the
land or building permitted by the corporation shall bear to such
of the part thereof so transferred or agreed to be transferred. It
is only from 1/2/1990, the said provision is given effect to, and
the occupant of a flat public/unit in the Cooperative Housing
Society, who would transfer his share(s) or a member who
agreed to transfer his unit so as to permit the transferee to
enjoy it.
This, however, became applicable from 1/2/1990 and it is
important to note that this explanation being added, amounting
to a substantive provision, since it was noted that the lease
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which is granted was subjected to the stipulations set out in the
lease deed/agreement, and the Corporation intended to restrict
the lessee to transfer his leasehold interest in the land. It was
proposed that the restriction is warranted for the benefit of
Corporation, when the land is leased not at its market price or
premium, but at a concessional rate of premium to subserve the
wider interest of the society in the context of the planned
development. Since the Corporation was desirous to launch its
scheme for leasing lands to Cooperative Housing Society, on
reasonable terms to the lower income and middle income of the
classes of the community, at a premium to be calculated at the
rate of percentage of its reserve price, which was far less than
market price, and it is in such contingency it was contemplated
that if the lessee earns profit by transferring the land or the
interest therein, in that contingency, the Corporation must
safeguard its interest not only qua the Society but each of its
constituents from parting with the benefit of the land intended
for them. Realizing that there was no privity of contract
between an individual flat holder and the Corporation, the
CIDCO was quite conscious that the safeguard or device will
have to be applied through the Society, as the contract is
between the Society and the Corporation. It is in this
background the amendment was introduced, but it was also
proposed that while the Regulation is amended, it would be
necessary to have the provision incorporated into every
agreement of lease and the deed of lease to be made and
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executed between the Corporation and the lessee Society, so as
to impose upon the Society the contemplated obligation. The
agenda note of CIDCO, which was placed before the Board of
Directors for the purpose of bringing an amendment, clearly
stipulated that the Society shall provide in its bye-laws that no
member shall transfer his share in the Society or part with the
possession of the tenement allotted to him by the Society or
permit any person to use or occupy such tenement, except the
permission in writing sought from CIDCO, and except upon
payment of additional premium at the rate determined by the
said condition over the covenant.
Accordingly, it was expected that the Society shall amend
its bye-laws so that each member of the Society is aware of such
a stipulation that it will be liable for payment of transfer fees,
whenever he transfers his Apartment in any way, and in any
manner.
37. A reading of the Amendment Regulations 2008, would
make it clear that it, for the first time, introduced a provision
incorporating conditions relating to disposal of Apartments, and
specific clause 15 and 16 therein included grant of lease and
restrictions against transfer, and this included the condition of
permission to be sought by the Apartment owner from the
Managing Director of CIDCO, and on payment of transfer
charges at the rate, as may be determined from time to time.
In the wake of the aforesaid development, it can be
discerned that in absence of a specific condition being included
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in the Lease deeds subject to which the land was allotted to the
Cooperative Housing Society, and when there was no specific
provision for charging transfer fee to the members or
transferring of shares in the Society without permission of
CIDCO, or on receipt of premium decided by CIDCO, the
imposition of the said condition as a condition of transfer of the
Apartment/shares cannot be justified, as it would be amounting
to giving effect to the substantive provision retrospectively.
However, we must make it clear that we are not
extending the benefit to the members of the petitioner no.1
Federation, as the petition though projected to be filed in
representative capacity, has failed to furnish any information
about the Cooperative Housing Societies, and as to whose
members have suffered such an inconvenience, in the wake of
giving effect to the condition of payment of transfer fees to the
Apartment holders, in the wake of the amendment to the New
Bombay disposal of Lands Regulation, 1975.
It is the contention of the petitioner that the federation
has 2528 cooperative housing society as its members, but we
are not at all inclined to grant a blanket declaration in this
regard, as we have not seen the covenants in the lease deed
executed between those cooperative societies and CIDCO.
Presently, we have before us the lease deeds in respect of
petitioner nos.2 and 3 and therefore we restrict the relief only
qua the members of petitioner nos.2 and 3 as the Lease
deeds/the lease agreement executed between the said
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petitioner Society and CIDCO definitely do not permit inclusion
of a condition which was not part of the lease, but in any case,
as subsequent to the amendment to the Regulation of 1975
and in specific, the amendment effected in the year 2008, it is
imperative for the Society to indicate such a covenant in the
byelaws, which definitely will bind the members who would be
liable to contribute their share upon they effecting the transfer
of their unit/flat/share/shares.
We are even not extending the reliefs to those Societies
which are mentioned in Exhibit A and B, and the declaration
given by us that the respondent no.1 CIDCO, shall not demand
transfer charges in respect of the housing societies, where the
lease deed is executed prior to 08/02/1990, that is the date on
which the New Bombay Disposal of Land Regulation 1975 in its
amended form came into existence. Though we are not called
upon to strike down the said provision, but we only issue a
declaration that, looking to the facts placed before us in respect
of petitioner no.2 and 3 Society, it shall have no applicability in
respect of transfer of share/s or units effected in the
Manmandir Cooperative Housing Society and Surya Co-
operative Housing Society, and the explanation (iii) to
Regulation 3 (vii) of the New Bombay Disposal of Land
Regulation 1975, inserted by the notification dated 08/02/1990
shall not apply to such transfers.
38. As a result, the impugned demand letter dated
26/10/2016 addressed to petitioner no.2 Society, and such
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demand being raised against members of petitioner no.3 are
quashed and set aside. We make it clear that this relief shall
only restrict to the demand notice for payment of charges
demanded from petitioner nos.2 and 3 Society, as the
agreement to lease and lease deed predate the amendment to
the amendment to the regulations of 1975, which came into
effect from 08/02/1990.
The petition is made absolute in the aforesaid terms.
(MANJUSHA DESHPANDE, J) (BHARATI DANGRE, J.)
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