Maharashtra: Bid for amnesty plan for buildings without OCs stuck

There are more than 16,000 buildings in Mumbai and MMR which do not have OCs. Representation pic

The Maharashtra Societies Welfare Association's (MahaSEWA) bid for a meeting with the chief minister to reintroduce an amnesty scheme for regularising residential buildings without occupancy certificate (OC) has hit a roadblock, as the meeting had to be called off at the last moment, not just once but twice. While MahaSEWA is hopeful to soon have a meeting with the CM, as over 16,000 buildings in the city and MMR are still without OC till this date, legal experts claim that such regularisation is not possible. Moreover, the Bombay High Court's 2017 directive in the matter has been challenged by the state government before the Supreme Court, which is currently pending.

mid-day had, in its article titled ‘NGO pitches for amnesty plan for city buildings without OC' on September 14, written about the issue.

Chartered Accountant Ramesh Prabhu, founder chairman of MahaSEWA, said, "There are thousands of buildings and lakhs of residents in Mumbai who are staying in buildings which do not have OCs."

Vinod Sampat, advocate and founder president of cooperative societies resident's association

"The citizens who are living in buildings without OCs have done so out of compulsion, as crores of their hard-earned money was paid to the builder and for certain technical reasons, OC is not granted. The buildings are completed in all respects and citizens are staying in the building for years," he said.

Prabhu added, "In 2004, the government introduced the first amnesty scheme for OC by relaxing the number of OC conditions. But the scheme did not succeed as a lot of onus was put on cooperative housing societies to comply with the conditions which were supposed to be done by builders. Therefore, the 2004 scheme did not receive the required response."

"The BMC grants water connection to buildings without OC on humanitarian grounds and charges twice the amount. The formation of society and deemed conveyance is done to such buildings," he said.

Prabhu added, "Earlier, in the case of redevelopment of buildings without OC, free fungible area of 35% of existing built-up area was not granted. However, BMC issued an amended circular to allow such free fungible FSI (floor space index) based on BMC assessment. Considering all these aspects, technically even if there is no OC, residents were not deprived of the benefit of having OC. However, legally it is important to have the OC. Occupying a building without OC would be considered illegal occupation and the BMC may initiate actions to vacate the building as well as file criminal cases."

"Developers and builders, after receiving full payment and without complying with OC conditions, used to hand over possession of the flats for fit out possession, which the owners took up. After the implementation of RERA, the awareness of the importance of OC has increased. In order to regularise buildings without OCs, it is important that the government introduce the OC amnesty scheme," he said.

Advocate Godfrey Pimenta, who practices in RERA, said, "There are catena of judgments by the Supreme Court which come down heavily on unauthorised construction. The state government cannot regularise buildings without OCs in view of the pendency of the Special Leave Petition before the Supreme Court. Instead of charging premiums for regularisation of occupation of flats without OC, the state government, in my view, should issue directions under section 154 of MRTP Act to the Planning Authority, like the BMC, to impose exemplary fines including confiscation of the properties of developers who failed to obtain OCs for the buildings."

Pimenta added, "The confiscated property should be equivalent to the amount to be spent on getting OC for such cases. In such cases, BMC should also file criminal cases under sections 52 and 53 of MRTP Act against erring developers. Needless to state the above would need strong will."

Matter before Supeme Court

Solicitor Stuti Galiya said, "Earlier on October 7, 2017, the Urban Development Department of the state government had come up with the Maharashtra Town Planning (Compounded Structures) Rules to deal with unauthorised development by regularising illegal structures (such as buildings without OC) that were developed on or before December 2015, provided that the structures conform to certain norms, and after payment of prescribed penalty called compounded charges. These Rules were introduced by amending section 52 of the MRTP Act by adding Clause (A). However, the view of the Bombay High Court over the years has been to take stern action against all sorts of illegal constructions, considering any sort of leeway or relaxation in this regard could increase the likelihood of builders flouting the law and escaping liabilities. This could also put the lives of people staying in such unauthorised structures at risk."

Galiya added, "The Bombay HC has been taking a stand that the MRTP Act does not enable the planning authorities or the state government to compound unauthorised development which are contrary to the provisions of the Development Plans/Regional Plans and the Development Control Regulations (DCR) framed under the MRTP Act. Hence, by exercising the power under section 52 (A), HC said unauthorised development, which is contrary to the provisions of the development plans/regional plans under the MRTP Act and the Development Control regulations framed under the MRTP Act, shall not be declared as a compounded structure and ordered state authorities to carry out demolition. The aforesaid order of the Bombay HC was thereafter challenged in 2019 by Maharashtra state government before the Supreme Court. The matter is currently pending."

"While there are opinions which support both the sides of argument, it needs to be finally seen whether this is just part of the state election manifesto or whether any concrete steps will be taken in this direction by the state government, while ensuring proper checks and balances, to ensure that such amendment proposals are not being misused," she concluded.

Supreme Court counsel speak

Floyd Gracias, Supreme Court counsel, said, "OC is a statutory requirement, which is a condition precedent to inducting any person to use or occupy a premises. Hence, flat buyers ought to do their due diligence and developers need to comply with the law."

When asked for opinion on regularisation of buildings withouts OCs, Floyd said, "The question is why? There is a statutory due process which ought to be complied with. Flat purchasers need to do their due diligence while acquiring property, as stated in legal maxim ‘Ignorantia Juris Non Excusat', which means ignorance of law is no excuse."

Floyd added, "Further, when people occupy premises without OCs, the buildings are not certified fit for occupation by the authorities. In the event of a calamity, they would have exposed themselves to voluntary risk and while the building may still be liable, the question of voluntary risk would always arise. However, one also needs to consider that several buildings in the past have been occupied without an OC, and due to the difficulties faced by the owners at that time, they may have been compelled to occupy the same without the OC."

Expert view

Advocate Vinod Sampat, founder president of cooperative societies resident's association, said, "Law stipulates that it is the responsibility of the builder to obtain OC. In the event OC is not received, flat purchasers cannot occupy the flat. It needs to be emphasised that over and above the normal construction, BMC officials have a right to regularise 10 per cent of the extra construction done after collecting premium. Builders lobbies openly use their clout and give permission to the flat purchasers to occupy the flat for the limited purpose of furniture. And with the passage of time, these flat purchasers instead of carrying out furniture start residing in the said flat."

"BMC is a gainer; on one hand they say the permission is given on humanitarian purpose, on the other hand they recover double the taxes on those flats owners occupying flats in a building without OC. In other words BMC exploits flat purchasers by levying double taxes. Strangely, the BMC does not take any action on the builder; I fail to understand the reason, as to why BMC does not file criminal prosecution against builders who are misusing their power and are giving permission to occupy the flat for interior and furniture work inside the premises. Everyone knows that it is not for the purpose of furniture. The need of the day is to be pragmatic, initiate criminal action against builders so that it sets a right example," said Sampat.

He added, "In view of the coming civic elections, calling in for such an amnesty scheme is a winning situation for the politicians, builders and flat buyers, as everyone is happy and this may result in encashment of the vote bank for the politicians."

"One also needs to understand that, for Campa Cola society, a huge cry was done but that was not possible. We all know there are thousands and thousands of buildings constructed without OCs for which no action is being taken, only cosmetic demolition is being done. A building which is constructed without the OC is an illegal construction. There is stress on the occupants who are cheated by builders. Moreover, the sale of such flats does not command the right price. At times action is taken by municipal officials against the occupants who may be second or third resellers," he said.