Navi Mumbai residents are hopeful that the government may finally direct CIDCO to stop levying transfer premium charges from buyers of resale property. CIDCO has been levying mandatory transfer premium charges as per the slab rate ranging between R25,000 to R10 lakh excluding GST, depending on the size of the property. The charges are for issuing CIDCO NOC, without which banks would not release mortgage loans and societies would not transfer the flat or allot membership to the property buyer. Various citizen associations have started a people’s movement in Navi Mumbai to put pressure on CIDCO to end this additional financial burden.
Housing Society Federation members meet with housing society office-bearers
Transfer premium
“The transfer premium levied by CIDCO has skyrocketed ever since it was introduced in the nineties. The transfer premium for the financial year April 1, 2024 to March 31, 2025 ranged from Rs 25,000 (last year it was Rs 23,000) plus 18 per cent GST for a 215 sq ft carpet area flat to Rs 10 lakh (last year it was Rs 8.35 lakh) plus 18 per cent GST for a flat or commercial space above 2,150 sq ft carpet area for properties notified between Airoli and Ulwe. For properties in notified areas of Dronagiri and Pushpak Nagar, in Panvel, the transfer premium varies from Rs 24,465 for a flat (215 sq feet carpet area) to Rs 15.27 lakh for shops and godowns,” said Bhaskar Mhatre, secretary, Navi Mumbai Housing Federation.
Privity of contract
Mhatre said, “The contractual obligation of the society along with CIDCO is forced on the members of the housing society who have no privity of contract (a legal principle where only parties to a contract can have rights or obligations under it) with CIDCO. We can understand that if there is a transfer of land by the society then certainly the society has to take permission and pay transfer charges to CIDCO. In case of resale of properties, there is only a transfer of membership or transfer of shares, which is regulated by the Maharashtra Co-operative Societies Act. Thus CIDCO by way of transfer premium is controlling the transfer of shares in housing societies.”
Associations join hands
The four associations–the Navi Mumbai Housing Federation, Sahakar Bharati, Navi Mumbai Vyapari Mahasangh and Navi Mumbai Citizen Foundation–have joined hands. They have appealed to the town planning authority to stop levying transfer premium with immediate effect. “Recently, members from these associations have started visiting residential buildings, educating them on their rights and also seeking their support to the cause. Out of 10,000 buildings in 500 societies from Airoli to Panvel-Ulwe have been covered in our outreach programme and more societies will be invited to take part in the initiative. A meeting was held last week with Vijay Kumar Singhla, CIDCO managing director and vice-chairman, has been apprised about our concern. He has assured us he will go through our contentions and would do the needful,” said Mhatre.
Political support
The associations have already met the local political leaders and they have all consented to support the cause. Vijay Nahata, former IAS officer and deputy leader of Eknath Shinde led Shiv Sena Party said, “Levy of transfer premium by CIDCO burdens the common man. I had recently apprised the CIDCO managing director on the issue, and prima-facie, he is convinced by our contention and soon a proposal to the effect may be sent to the state government, for seeking consent to put an end to the age-old practice of dual transfer premium.”
What residents say
“What services does CIDCO offer to citizens post formation of municipal corporations (NMMC and Panvel)? Where does CIDCO utilise the amounts collected as transfer premium charges? Until 1992, CIDCO had all the right to ask for transfer charges since it was the Town Planning Authority looking after the infrastructure of the satellite township. Now, for Kharghar and areas beyond, Panvel Municipal Corporation charges property tax from citizens and CIDCO collects transfer charges. Isn’t the citizen forced to pay dual tax? The state government should seriously intervene and put an end to CIDCO’s dual transfer charges and should let the municipal corporations develop the areas under their jurisdiction,’ said Mangal Kamble, founder President of Swach Kharghar Foundation. “No other city development or municipal authority has used such strong-arm tactics to generate revenue,” said Binu Thankappan, resident of R S Residency CHS Ltd, Sector 34-B, Kharghar.
Apex court view
According to advocate Shreeprasad Parab, expert director, State Housing Federation, “The Supreme Court has held that an agreement to transfer shares of co-operative housing society or a limited company cannot amount to an agreement to sell an immovable property. Although the flat purchaser has a right to occupy the flat as a member of the society, the transfer of shares by itself does not amount to transfer of the immoveable property. The right to occupy is the legal consequence of the person purchasing the shares to the flat in a co-operative society.”
Writ petition filed
The Navi Mumbai District Housing Federation has already filed a writ petition against the transfer premium. Similarly, there is a pressure from the elected representatives (MLAs and political leaders) from Navi Mumbai on the state leaders to convert the land from leasehold to freehold thus restricting CIDCO from levying such charges,” said Parab.
The other side
A CIDCO official, requesting anonymity said, “CIDCO, through an amendment, mandated the transfer premium for transfer of membership in housing societies. A writ is already pending before the Bombay High Court.”
Attempts made to contact Vijay Kumar Singhla, MD of CIDCO did not yield any result.
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