Voices against transfer premium charges grow in Navi Mumbai

CIDCO has levied transfer premium charges since the 90s

Navi Mumbai residents are now hopeful that the government may finally direct CIDCO to stop levying transfer premium charges from buyers of resale property. CIDCO has been levying a mandatory transfer premium as per the slab rate ranging anything between Rs 25,000 to Rs 10 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 society would not transfer flat, nor allot membership to the property buyer.

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Various citizen associations have started a people's movement in Navi Mumbai to put pressure on CIDCO to end this additional financial burden on resale property buyers.

Transfer premium

Bhaskar Mhatre

"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 approximately over Rs 25,000 (last year it was R23,000) 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. Whereas for properties in notified areas of Dronagiri and Pushpak Nagar in Panvel the transfer premium varies from R24,465 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 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 (flats / shops etc) there is only a transfer of membership that is 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 and have become vocal on this issue. They have appealed to the town planning authority (CIDCO) to stop levying transfer premium with immediate effect.

"Recently members from these associations have started visiting residential buildings, educating them of their rights and also seeking their consent to support the cause. Out of 10,000 buildings 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 also held last week with Vijay Kumar Singhla, CIDCO managing director and vice-chairman, who has been apprised about our concern. He has assured us to go through our contentions and would do the needful," said Mhatre.

Political support

Vijay Nahata, former IAS officer and deputy leader of Eknath Shinde led Shiv Sena Party

The associations have already met the local political leaders from different political parties and they have all consented to support the cause of common man. 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 appraised the CIDCO managing director too on the issue, and prima-facie, he is convinced with our contention and soon a proposal to the said 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

Mangal Kamble, founder President of Swach Kharghar Foundation

"What services does the CIDCO offer to the citizens post formation of municipal corporations (NMMC and Panvel)? Where does CIDCO utilise the amounts collected under the ambit of 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 the citizens and CIDCO collects transfer charges. Isn't the citizens forced to pay dual tax in fact they were charged service tax too. The state government should seriously intervene and put an end to CIDCO's dual transfer charges being levied and should let the municipal corporations (NMMC and Panvel) to develop the areas under its jurisdiction, keeping in mind the concept of ‘One Municipal corporation one owner,' said Mangal Kamble, founder President of Swach Kharghar Foundation.

"At a time residents of Kharghar and others in Navi Mumbai were already saddled with the burden of dual taxation, retrospective taxes, etc., imposed on them by municipal authorities, the unprecedented extra premium to be paid on account of transfer charges mounts additional financial stress on residents. 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

Advocate Shreeprasad Parab

According to advocate Shreeprasad Parab, expert director, State Housing Federation, "The Hon'ble 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 effect of the consequence of the person purchasing the shares and occupying 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 levied by CIDCO from the members of the housing societies who desire to sell the flat. 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 transfer premium to the members of the housing society," said Parab.

Other side

A CIDCO official, requesting anonymity said, "CIDCO through 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.