The State of Maharashtra and Ors. vs Mr. Aspi Chinoy and Another
Background
In 1971, the Maharashtra government invited bids to lease reclaimed land plots at Nariman Point/Cuffe Parade in Bombay. A builder won the bid for one plot, built a residential building (Jolly Maker Apartments No.3), and sold flats to individual buyers, who later formed a co-operative housing society. When the respondent later tried to register his purchase of rights in one such flat, the Sub-Registrar refused registration, citing a Collector's directive requiring a No Objection Certificate, because the State claimed it was entitled to a transfer premium under 1983 and 1999 government resolutions governing land allotted to co-operative housing societies at concessional rates. The respondents challenged this before the Bombay High Court, which ruled in their favour; the State appealed to the Supreme Court.
Decision Breakdown
The Supreme Court dismissed the State's appeals, agreeing with the High Court's conclusion (though not necessarily every step of its reasoning). The Court held that the 1983 and 1999 resolutions, which allowed the government to charge a premium on transfers, applied specifically to land allotted directly to co-operative societies at concessional rates, not to this case. Here, the land was originally leased to a private builder through a competitive public bidding process (not allotted to a society), the builder constructed the building and sold individual flats to private buyers, and only afterward did those flat owners form a co-operative society to hold the underlying land rights. Since the society was not itself the original allottee of concessional government land, the premium-linked resolutions simply did not apply to its members' flat transfers.
Lesson Learnt
Government policies imposing conditions (like transfer premiums) on land allotted to co-operative housing societies at concessional rates do not automatically extend to societies that were formed only after private individuals purchased flats built by a builder who had won the land on competitive lease bidding: the origin and nature of the original land allotment matters.