Government may tweak rules so illegal properties are not registered

May 02, 2013, 06:26 IST | Ravikiran Deshmukh

Revenue department intends to prohibit registration of unauthorised structures, but sources say several loopholes need to be plugged and there will be a massive deficit in earnings for the state

After the building collapse in Mumbra and the alarming situation at Campa Cola Compound, it seems that the state has finally woken up from its slumber. Realising that the issue of illegal buildings requires a concrete course of action, the revenue department has readied a proposal to introduce changes in The Maharashtra Registration Rules 1961 under The Registration Act 1908. Each and every sale/transfer of property is finalised through this legislation.

The amendments, according to government sources, will come as a deterrent to registration of flats and other properties categorised as illegal by civic bodies and government authorities at local levels. As of today, there exists no rule that prohibits registry of unauthorised estates and the registration office never raises questions over the legality of a property. On the contrary, after completing the listing paperwork of a flat or a plot, a buyer takes it for granted that the government has validated the legitimacy of the owner and the structure.

This very issue is being raised by flat owners at Worli’s Campa Cola Compound. “If our flats were illegal how was the registration approved by the concerned department?” is the recurring refrain. Also, the notarisation of flats is one of the subjects before the one-member committee of additional chief secretary (revenue) Swadhin Kshatriya, probing the Mumbra building collapse.

According to government sources, soon after the Mumbra mishap, the issue of registration was raised in a meeting convened by chief secretary JK Banthia. After prolonged discussions, it was decided to introduce changes in existing procedures to forestall registration of illegal properties. Representatives of the state revenue department reportedly argued about the possible loss of substantial income generated through stamps and registration.

Banthia on his part ostensibly said that on ethical grounds authorisation of illegal properties holds no good. Stamp duty and registration have been major sources of Maharashtra’s revenues, and in the last fiscal, 2012-13, a whopping Rs 17,200 crore was added to the kitty. According to sources, if the state was to stop registration of illegal properties, it stands to lose around Rs 1,000 crore at least.

After the directives by the chief secretary, the inspector general of registrations for the state has submitted a recommendation for crucial changes. But sources say the proposal produces more problems than remedies. For instance, a registration officer may ask for a no-objection certificate (NOC) by the local or civic body before validating the process. For that, the government will have to decide on a competent authority to issue NOCs, said a functionary from the department.

Also, government will have to clearly define what an ‘illegal property’ is. In fact, the administration should introduce necessary changes in the Maharashtra Regional & Town Planning (MRTP) Act to restrict transfer of illegitimate real estate, said the officer. Of late, it has become routine to regularise illegal properties owing to public demand and vote-bank politics. So, if such structures were legalised after a considerable gap of time, what would form the basis for registration and stamp duty, he asked.

A more worrying situation may arise later if the government decides to stop registration of unauthorised buildings, said sources, adding that some people may opt for mutual agreements. Also, even without registering a property people get basic facilities such as water and electricity connections. So, the desired results may not be achieved just by preventing registration, the official said. Senior officials say the first and foremost remedy would be to nip illegal construction in the bud.

Rs 17,200 cr
What Maharashtra earned in 2012-13 through stamp duty and registration of properties

Rs 1,000 cr
What the state stands to lose if registration of illegal buildings is disallowed 

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