Legislation UpdatesStatutes/Bills/Ordinances

Lok Sabha passed the National Capital Territory of Delhi (Recognition of Property Rights of Residents in Unauthorised Colonies) Bill, 2019.

Purpose of the Bill

It provides special provisions for the National Capital Territory of Delhi for recognising the property rights of resident in unauthorised colonies by securing the rights of ownership or transfer or mortgage in favour of the residents of such colonies
who are possessing properties on the basis of Power of Attorney, Agreement to Sale, Will, possession letter or any other documents including documents evidencing payment of consideration and for the matters connected therewith or incidental thereto.

Few of the important definition laid down under the bill are:

  • “resident” means a person having physical possession of property on the basis of a registered sale deed or latest Power of Attorney, Agreement to Sale, Will, possession letter and other documents including documents evidencing payment of consideration in respect of a property in unauthorised colonies and includes their legal heirs but does not include tenant, licensee or permissive user.
  • “unauthorised colony” means a colony or development comprising of a contiguous area, where no permission has been obtained for approval of layout plan or building plans and has been identified for regularisation of such colony in pursuance to the notification number S.O. 683(E), dated the 24-03-2008 of the Delhi Development Authority, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (ii), dated the 24-03- 2008.

*Please follow the link to read the bill — National Capital Territory of Delhi (Recognition of Property Rights of Residents in Unauthorised Colonies) Bill, 2019.

Cabinet DecisionsLegislation Updates

The Union Cabinet approved the proposal to introduce the National Capital Territory of Delhi (Recognition of Property Rights of Residents in Unauthorised Colonies) Bill, 2019 during the ongoing Winter Session of Parliament. This Bill will help in allowing the registration of properties and provide certain relief to the residents in Unauthorised Colonies (DCs) of Delhi from Registration Charges and Stamp Duty.

Nearly 40 lakh people reside in Unauthorised Colonies located on private or public land in Delhi. Properties, whether in the form of a plot of land or built-up space are generally held through General Power of Attorney (GPA), Will, Agreement to Sale, Payment and Possession documents. The properties in these colonies are not being registered by registration Authorities and thereby the residents do not have any title documents in respect of such properties and the Banks and financial institutions do not extend any credit facilities in respect of said properties.

The Supreme Court in the SLP (C) 13917 of 2009 Suraj Lamp & Industries (P) Ltd. v. State of Haryana & others vide its judgment dated 11 October 2011 had held that Sale Agreement/General Power of Attorney or Will transactions are not ‘transfers’ or ‘sales’ and that such transactions cannot be treated as completed transfers or conveyances and they can continue to be treated as the existing agreement of sale.

Keeping in view the socio-economic conditions of the residents of these unauthorised colonies and ground realities, it is necessitated to recognise and confer rights of ownership or transfer or mortgage to the residents of such colonies on the basis of Power of Attorney, -Agreement to Sale, Will, Possession Letter and other documents including documents evidencing payment of consideration and to facilitate development or re­development to improve existing infrastructure, civic and social amenities which will lead to better quality of life.

The  proposed  National Capital Territory  of Delhi (Recognition  of Property Rights of Residents in Unauthorised Colonies) Bill, 2019, envisages;

  1. to recognize GPA, Will, Agreement to Sell, Purchase and Possession documents, in the light of Suraj Lamp Case Judgment, as a special one-time relaxation for this purpose for the residents of UCs in Delhi;
  2. to provide for registration charge and stamp duty to be levied on the value mentioned in Conveyance Deed or Authorisation Slip and for its applicability on the last transaction only,

The above relief provisions will benefit more than 40 lakh people living in 1,731 Unauthorised Colonies of Delhi as mentioned in the National Capital Territory of Delhi (Recognition of Property Rights of Residents in Unauthorised Colonies) Regulations, 2019 notified on 29.10.2019.

Background

A proposal was submitted by the Ministry of Housing and Urban Affairs (MoHUA) to the Union Cabinet on the basis of report of the Committee headed by the Lieutenant Governor of Delhi to confer or recognise the rights of ownership or transfer or mortgage of property in UCs of Delhi. The Cabinet approved the proposal in its meeting held on 23.10.2019 and accordingly, the Regulations to confer or recognise the rights of ownership or transfer or mortgage of property in UCs of Delhi have been notified on 29,10.2019.

The ownership of the properties in unauthorised colonies have been transferred several times through registered or unregistered or notarised Power of Attorney, Agreement to Sale, Will, Possession and Payment letters. Further, the stamp duty on these multiple transactions, have neither been assessed nor paid.

The stamp duty on the Conveyance Deed or Authorisation Slip, as the case may be, is leviable as per minimum rates (Circle Rates) specified in the notification of the Government of National Capital Territory of Delhi published vide number F.1 (953) Regn.Br./Div.Com/HQ/2014, dated the 22nd September, 2014 or the sale consideration mentioned in the Conveyance Deed or Authorisation Slip, as the case may be, whichever is higher.


Cabinet

[Press Release dt. 20-11-2019]

[Source: PIB]

Cabinet DecisionsLegislation Updates

Bill to be introduced in the next session of Parliament

Union Cabinet approved the Regulations for conferring/ recognizing ownership or mortgage/ transfer rights to residents of Unauthorized Colonies (UCs) in Delhi. The Cabinet further approved bringing a Bill in the next session of Parliament to implement the proposal.

Major impact & benefit to the People living in Unauthorised Colonies in Delhi:

  • The decision will benefit more than 40 lakh residents of unauthorized colonies spread over around 175 sq kms, as development/redevelopment can now take place in these colonies resulting in a clean, secure and healthy living environment.
  • This landmark initiative will address major issues being faced by the residents of UCs like lack ownership/transfer rights, provision of basic infrastructure and civic amenities.
  • With the recognition of property documents, the property holders in these colonies can now enter into valid property transactions. Besides providing a legitimate claim to the property, the decision will encourage property holders to invest in safe structures, thereby improving the living conditions in these colonies substantially.
  • The decision is applicable to 1,797 identified UCs, which are inhabited by lower-income group society.  The decision does not apply to 69 affluent colonies identified by DDA, including Sainik Farms, Mahendru Enclave and Anant Ram Dairy.
  • The rights will be conferred on payment of nominal charge based on carpet area/plot size. For colonies on Government land, the charge will be 0.5% (for less than 100 sq m), 1% (for 100 – 250 sqm) and  2.5%  (for greater than 250 sqm), of the circle rate of the highest category of the locality of the residential area surrounding the UC.
  • For colonies on private land, the charge will be half of the charge on government land.

Details:

  • In the ensuing session of the Parliament, the Central Government will introduce a Bill for recognizing General Power of Attorney (GPA), Will, Agreement to Sell, Purchase and possession documents, which will be a one-time relaxation for this purpose for the residents of UCs.
  • The Bill will provide for registration charge & stamp duty on last transaction and also address the issue of income tax liability on account of less than circle rate charges.
  • DDA will lay down a simplified procedure for issuing conveyance deed and registration of property.
  • Boundaries of the UCs/ clusters of UCs will be delineated by DDA.
  • DDA will prepare Local Area Plan (LAP) for all UCs.
  • There will be no Penalty and external development charges (EDC).
  • Multiple plots/flats holders will be charged on the rate applicable to area by clubbing all properties.
  • Residents will have option to pay charge in three equal installments to be paid in a year.  Any person paying the full amount in one installment will get the ownership rights immediately.  Provisional rights will be given on payment of 02 installments, which will be converted to permanent rights after full and final payment.
  • Late payment to attract simple interest @ 8% pa.
  • Conveyance deed will be executed for residential purpose, irrespective of use.

Background:

  • As per the existing Regulations of 2008, the entire process of regularization was to be coordinated and supervised by Government of National Capital Territory of Delhi, (GNCTD) by giving wide publicity. Delineation of boundary of UC is the starting point of the process as per the Regulations. However, GNCTD could not delineate the boundaries of these colonies even after 11 years of issuance of the Regulations and has sought more time upto 2021 to complete this exercise.
  • People living in these UCs have neither invested in safe structures nor could the Government create any social infrastructure on account of these colonies having developed without approved Layout Plan (LOP). In the absence of basic amenities, the residents of these colonies are living in uninhabitable conditions. Though the Master Plan Delhi-2021 allows for redevelopment of colonies with 50% additional Floor Area Ratio (FAR) as an incentive, no redevelopment has taken place so far as the residents do not have ownership rights.
  • In order to confer/ recognize ownership or mortgage/ transfer rights to residents of UCs, a Committee, headed by the Lieutenant Governor of Delhi, was constituted, with approval of the Union Cabinet, to recommend the process for conferment/recognition of rights of ownership or transfer/mortgage of property and thereby create an opportunity for redevelopment of such areas in a planned manner.
  • Based on the recommendations of the Committee and elaborate consultations with all stakeholders the above proposals to notify revised Regulations and introduce a Bill in the Parliament have been finalised.

Ministry of Housing & Urban Affairs

[Press Release dt. 23-10-2019]