Case Note & Summary
The petitioners, Homi Villa Co-operative Housing Society Limited and others, filed a writ petition under Article 226 of the Constitution of India before the Bombay High Court challenging demand notices dated 4 April 2013 and 12 September 2014 issued by the Municipal Corporation of Greater Mumbai (MCGM). The demand notices called upon the petitioner society to pay an amount of Rs.1,39,49,532/- as transfer premium and transfer fee for the assignment of leasehold rights of a property bearing Plot No.778 of Dadar-Matunga Estate, corresponding to C.S. No.527/10 of Matunga Division, situated at Tilak Road, Dadar, Mumbai, together with the building 'Homi Villa' standing thereon. The petitioners sought a writ of certiorari to quash the demand notices and a writ of mandamus directing the MCGM to transfer the lease in the name of the petitioner society without demanding any amount by way of transfer premium or transfer fee. The court examined the MCGM's policy on transfer of leasehold properties and the nature of the assignment by the co-operative society to its members. The court held that the assignment of lease by a co-operative society to its individual members does not constitute a transfer of the lease that would attract transfer premium under the MCGM policy. The court found that the society is the lessee and the assignment to members is merely a distribution of rights among the members, not a transfer of the leasehold interest. Consequently, the court quashed the demand notices and directed the MCGM to transfer the lease in the name of the petitioner society without demanding any transfer premium or fee. The court also directed that no penalty or interest be levied on the amount demanded. The judgment was delivered by Justice A.A. Sayed on 25 February 2015.
Headnote
A) Property Law - Lease Assignment - Transfer Premium - MCGM Policy - The issue was whether the MCGM could demand transfer premium and transfer fee from a co-operative housing society when the leasehold rights were assigned by the society to its individual members. The Court held that such assignment does not attract transfer premium as the society is the lessee and the assignment to members is not a transfer of the lease but a distribution of rights among members. (Paras 1-10) B) Constitutional Law - Writ Jurisdiction - Article 226 - Quashing of Demand Notices - The Court exercised its writ jurisdiction under Article 226 to quash demand notices issued by MCGM demanding Rs.1,39,49,532/- as transfer premium and penalty. The Court found the demands arbitrary and without legal basis. (Paras 1-10) C) Municipal Law - MCGM Policy - Transfer Fee - The Court interpreted the MCGM policy on transfer of leasehold properties and held that the policy does not apply to assignments made by a co-operative society to its members. The Court directed the MCGM to transfer the lease in the name of the petitioner society without demanding any transfer premium or fee. (Paras 1-10)
Issue of Consideration
Whether the Municipal Corporation of Greater Mumbai (MCGM) can demand transfer premium and transfer fee from a co-operative housing society when the leasehold rights are assigned by the society to its individual members?
Final Decision
The court quashed the demand notices dated 4 April 2013 and 12 September 2014 and directed the MCGM to transfer the lease in the name of the petitioner society without demanding any transfer premium or transfer fee. No penalty or interest was levied.
Law Points
- Lease assignment
- transfer premium
- co-operative housing society
- MCGM policy
- Article 226
- writ of certiorari
- writ of mandamus
