HC: Pre-1990 Navi Mumbai Societies Exempt from Cidco Fees

The Bombay High Court has given relief to older cooperative housing societies in Navi Mumbai.

It ruled that Cidco cannot demand transfer charges from flat owners in societies whose land lease deeds were executed before February 8, 1990. This applies if the original agreements did not provide for such charges.

The ruling means Cidco cannot use a rule introduced in 1990 to impose a new financial obligation on societies with earlier leases.

Relief Is Limited to Two Societies

The relief is limited to two societies. They are Manmandir Cooperative Housing Society in Nerul and Surya Cooperative Housing Society in Vashi.

It does not automatically extend to all 2,528 societies represented by the Navi Mumbai Cooperative Housing Federation.

A division bench of Justices Bharati Dangre and Manjusha Deshpande delivered the judgement on September 29. The petition was filed by the federation and the two societies.

What the Dispute Was About

Transfer charges are fees Cidco demands when a flat, or its membership rights, is transferred from one owner to another.

The dispute was whether Cidco could collect these from societies whose original lease agreements did not require permission or a fee for such transfers.

The case began when Cidco's estate officer demanded Rs 24.58 lakh from Manmandir CHS. The demand was for the transfer of 27 flats, in a letter dated October 26, 2016.

The society challenged it, saying its original agreements had no such condition.

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Arguments in Court

Senior advocate Gayatri Singh appeared for the petitioners. She argued that Cidco could not add new financial obligations through a later amendment.

The original allotment letters, agreements to lease, and lease deeds did not impose such restrictions. The amendment to the New Bombay Disposal of Lands Regulations, 1975, took effect on February 8, 1990.

The petitioners said it could not be applied retrospectively.

Cidco opposed the petition. It argued that the land was allotted to societies at concessional rates, not at market prices or with a premium.

It said transfer charges were meant to regulate transfers when original members sold flats and shares to third parties.

Senior advocate GS Hegde, for Cidco, argued the amendment only clarified existing regulations.

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What the Court Held

The bench rejected the clarification argument. It held that the amendment introduced a substantive provision.

It could not be applied retrospectively to impose a liability absent from the original agreements.

The court held that where lease deeds had no condition requiring Cidco's permission or transfer charges, the corporation could not add one later.

The lease deeds of Manmandir and Surya CHSs predated February 8, 1990. So Cidco cannot demand transfer charges from their members.

The bench declined to extend the relief to the federation's other 2,528 societies.

Their lease deed dates were not on record. Whether the ruling applies to them will depend on their individual lease deeds and terms.

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