Bombay HC Sets February 14 As Deadline To Formulate Leasehold To Freehold Policy

Bombay HC Sets February 14 As Deadline To Formulate Leasehold To Freehold Policy

Petitions of scores of housing societies pending since 2014; Bombay HC will decide on the matter if the state government fails to stick to the deadline this time.

Urvi MahajaniUpdated: Saturday, January 06, 2024, 01:17 AM IST
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Bombay High Court | File

Mumbai: It’s the last chance for the state government to formulate a policy for conversion of occupancy of leasehold land to freehold. If it fails to decide by February 14, the Bombay High Court will take the matters in its own hands and decide on the issue.

A leasehold land belongs to the Collector and is leased to a private party for construction on a lease ranging from 99 years to 999 years. The government allows conversion of this leasehold land to freehold, i.e. give the ownership to the private party which developed it, by paying a concessional amount of premium charges within the time granted. Several housing societies have filed petitions before the court; many way back in 2014.

Govt had sought 3 month-extension in Sept 2023

Last year in September, the state government was given time up to the end of that month but it sought three more months. However, on Friday, the government sought more time and said that the policy is still not ready.

Earlier, the government had said that the premium amount would be reduced to 5% from the current 15%. There was also a proposal to charge a 60-65% premium for the same, which was opposed by many. Additional government pleader Jyoti Chavan asserted that the proposal has been sent to the finance department, which is yet to approve it. She said it will be submitted for the approval of the cabinet with the consent of the Chief Minister.

According to the state government, there are over 20,000 housing societies on collector’s land in the state, with nearly 3,000 in Mumbai alone. Majority of these are more than 40 years old and in a dilapidated state requiring urgent redevelopment.

2 GRs undertaken by state still remain in limbo

In 2019 and in March 2023, the state issued two Government Resolutions (GR) allowing the conversion of these lands to freehold on payment of the 15% of Ready Reckoner Rate as premium. However, as no steps were taken in this regard, several of these societies approached the HC.

In a detailed order on September 9 last year, the HC had noted, “We are not happy with the speed at which the decisions are being taken by the state government… primarily when a statement admittedly has been made by a minister on the floor of the house…” A division bench of Justices BP Colabawalla and Somasekhar Sundereshan noted that the petitions were filed in 2014 and “in another few months we will complete a decade”.

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