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Monday, July 30, 2007

Who is afraid of Urban Land Ceiling and Regulation Act ?

In October 1971, Maharashtra assembly and council had adopted resolutions favouring the imposition of a ceiling on urban immovable property and the acquisition of such property in excess of the ceiling.

Parliament passed the ULCRA in 1976.

But the Centre passed a law in 1999 repealing the ULCRA.

This led to states such as Haryana and Punjab seeking the act’s repeal.

ULCRA is currently in force in only two Indian states.

While the state government is confident of repealing the Urban Land (Ceiling and Regulation) Act, 1976, with a two-third majority in the legislative assembly on July 31, officials in the deputy and additional collectors’ offices of the state’s eight cities that come under the Act, have a different story to tell.

Pressure to open old ULCR files

Sources told DNA that at a high-level meeting on July 26, officials of the urban development department asked top officers in the deputy and additional collectors’ offices to open ULCR files, check all exemptions given and create cases for appeals. “We were instructed to check old files, declare land as surplus and slap hefty fines. Though many orders are faulty, we have to obey our bosses,” said an officer. DNA - Mumbai - Pressure to open old ULCR files - Daily News & Analysis

21 Jan 2006: Commitment is enough to get funds!

"Even now the state
government is not keen to undertake these reforms, but it will have no option if
it wants Central aid," a senior bureaucrat said. The PM's strong pro-reform
slant is unlikely to leave Deshmukh with much elbow room to wriggle out of a

However, the state
could give an undertaking to repeal the act over a long-term period and still be
eligible for funding under NURM, an official said.

The eligibility for NURM would
not be dependent on the date when the reforms are actually initiated or put in
place. This means that the state government can commit to repeal ULCRA after
four years and yet receive funds from Centre

The CM told mediapersons
in Pune on Thursday that "it will take some time to repeal the ULCRA. All
political parties will have to be taken into confidence."
 blog it

Lokhandwala Complex, Andheri West, Mumbai: Blatant example of how ULCR Act has been abused

Now, almost three decades after the state first granted permission to develop the land, additional collector S R Jondhale has called for an explanation for the large-scale violations under ULCRA. The state government can still salvage 40 lakh sq ft which are left to be developed at Lokhandwala. Property prices in the area are about Rs 7,000 a sq ft.

Related Blogs

1.India Land Laws: sandeeplaw

Some land laws

Many laws affect immovable property in India. I list some below. Let these not daunt you!

1. The Constitution of India, 1950 (rights of Union, and States to legislate on land; Right to land is not a fundamental right)
2. The Transfer of Property Act, 1882 (first principles; sale, mortgage, lease, exchange, gift)
3. The Indian Contract Act, 1872 (capacity, consideration)
4. The Registration Act, 1908 (evidence, formalities)
5. The Specific Relief Act, 1963 (remedies in dispute)
6. The Urban Land (Ceiling & Regulation Act), 1976 (socialism at its height!)
7. The Indian Easements Act, 1882 (dominant/servient, license)
8. The Land Acquisition Act, 1884 (eminent domain!)
9. The Powers of Attorney Act, 1882 (to act through a constituted attorney)
10. The Indian Limitation Act, 1963 (time limits to litigation)
11. The Income Tax Act, 1961 (no explanation!)
12. The Indian Succession Act, 1925 (succesion after death)
13. The Companies Act, 1956 (contracting with companies)
14. The Indian Trusts Act, 1882 ("uses" and trusts)
15. The Foreign Exchange Management Act, 1999 (before full convertibility!)
16. State Stamp Acts (a cost on documents)

1. The General Clauses Act, 1897 (definition of all usual terms)
2. The Code of Civil Procedure, 1908 (civil procedure)
3. The Married Women's Property Act, 1874
4. The Criminal Procedure Code, 1973 (criminal procedure)
5. The Indian Penal Code, 1860 (penalties for crime)
6. The Indian Evidence Act, 1872 (documents as evidence)
7. The Guardians & Wards Act, 1890 (to protect minors)
8. The Hindu Succession Act, 1956
9. The Hindu Adoption and Maintenance Act, 1956
10. The Hindu Marriage Act, 1955
11. The Hindu Minority and Guardianship Act, 1955
12. Personal laws (Muslim, Parsi etc.)
13. The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (immense rights to lenders to enforce security)
14. Presidency Towns Insolvency Act, 1909
15. Provincial Towns Insolvency Act
16. The Benami Transactions (Prohibition) Act, 1988
17. The Public Premises (Eviction of Unauthorised Occupants) Act, 1971 (The government is one of the largest land/property owners; special provisions)
18. State Land Revenue Codes
19. State Agricultural Land Ceiling Acts

2.Leisurely reflections...: Prasad Bhangale

Then came the news that Chief Minister of Maharashtra is going to put the resolution in current assembly session to scrap this act. Now don’t think that its b’coz that he cares for the people or something, but that’s the directive/condition by Central Govt. to release some kinda aid for the state. But whatever may be the reason, it might had provided some respite to the so-called aam aadmi.

But then came the news that some political party had urged the CM on the behest of, u know who, to postpone the scrapping. Also they told him that lets talk about this in next session of assembly and not now. The reason was, many builders and developers (not poor us, but the other kindred) has invested lot of money in land and the real estate. If this law is scrapped now, then they will suffer heavy losses. This was really astonishing to mere mortal like me and I was just loss of words to explain my anger about such a move. Also this makes it very clear that where the loyalties of those, whoever is talking about public welfare, actually lie.

3. Miranda Musing: Vivek Joseph Nazerene Miranda

Next in agenda would be restructuring the legislative issues, such as Urban land ceiling regulation act, Land acquisition act, Rent control act, conversion of rural land to urban use etc which need to be restructured in a way to take into account growth and development of infrastructure.

4. State’s ULCRA haste shakes the Sena-BJP partnership: Prashant Hamine/Surendra Gangan : DNA Mumbai: April17,2007

Chief Minister Vilasrao Deshmukh’s motion to scrap the central legislation provoked intense criticism from the Opposition. He responded by saying that the government did not wish to hurry the motion and that it will be debated in the legislature’s next session.

Ramdas Kadam (Shiv Sena), the opposition leader, deprecated the government’s haste in dealing with the matter. But he agreed with the government’s stand, albeit with a proviso that a detailed debate be engaged in before the motion was adopted.

Eknath Khadse (BJP) to remark that it appeared as though the treasury benches and the Sena had fixed the match.

(Ramdas)Kadam (Shiv Sena) hastily clarified that the Sena too was opposed to the manner in which the motion was being moved.

(Chief Minister Vilasrao) Deshmukh said the government had moved the resolution because it was mandated by the terms of the Jawaharlal Nehru National Urban Renewal Mission.
Maharashtra had given an undertaking under the JNNURM to repeal the ULCRA, Deshmukh said, to ensure that the Centre did not suspend funds under the mission.

Ganpatrao Deshmukh (Peasants and Workers Party) said the government had tried to move the resolution without giving the mandatory seven days’ notice.

BJP’s (Eknath)Khadse only argued that the government was trying to postpone the debate on the resolution without allowing the opposition to debate the motion.

5. How to buy a property: planetenjoy.com

Buyers Guide
How to choose a Property

Anybody wishing to book a flat with a builder / promoter in India is expected to keep in mind following few basic points before deciding to book a flat on ownership basis.

- About the builder / promoter
- About the title deeds
- Inspection of Plans/Drawings
- Area, number of flat etc.
- Amenities/specifications
- Nature, extent and description of common areas and facilities etc.
- Possession
- Mode of payment

- Permissions under Urban Land Ceiling and Regulation Act 1976

* The builder should have obtained permission of the competent authority under Urban Land Ceiling and Regulation Act 1976 for developing the land/plot on which proposed building is to be constructed
* The sale agreement should be in accordance with the conditions laid down by the Urban Land (Ceiling & Regulation) Authorities

- Out goings
- Stamp duty and registration
- Form No. 37-I

6. “More Deng Xioping and Less Mao”: Aditya Dash

The Maharashtra government might repeal the Urban Land (Ceiling and Regulation) Act, 1976. By doing so, at least 50 hectares of land will be available in Mumbai. This sudden increase in the supply of land is expected to push down property prices in Mumbai by 30 to 40%. Left parties in the state are organizing a campaign to oppose the repeal of this act.

I am a bit confused by this, why are the left parties opposing something that would bring down real estate prices? Lower real estate prices mean that the Aam Aadmi’s dream of owning a house has become easier. The cynical explanation would be that senior members of the left parties have substantial investments in the real estate sector.

One could also argue that this opposition is based more on ideology, a matter of principle as some would say. Here is my advice for the left comrades who oppose such laws, “more Deng Xioping and less Mao”

7. What State Governments has to change to get urban infrastructure funding?: Mumbai Matters

Take a look below (extract from Government’s Toolkit on the Jawarharlal Nehru National Urban Renewal Mission (JNNURM)):

# (b) *Repeal of Urban Land Ceiling Regulation Act (ULCRA).
# (c) *Reform of Rent Control Laws balancing the interests of landlords and tenants.
# (d) Rationalisation of Stamp Duty to bring it down to no more than 5 per cent within next seven years.

8. Shekhar Gupta, The Indian Express, December 24, 2005.

"So now we know what exactly it takes for our politicians to make common cause, sinking their differences, prejudices, competitive instinct, everything. No, it is not cricket (who’d say that after the Bengali revolt over Sourav Ganguly, anyway?) or war. It is real estate."

"Have you sometimes wondered why reform in some areas of our infrastructure proceeds much faster than in others? You will see a clear pattern there. Anything that does not involve real estate, moves much faster. Telecom is a good example. Anything that involves land takes much longer."

"Now you know why our politicians will not reform our property laws, modernise the land records, cut stamp duties and do other simple things to bring the real estate business out of the grip of the black economy. Now you know why even a pro-reform Congress-NCP government in Maharashtra would not abolish the urban land ceiling law, which most other major states have done. It won’t, because politicians are desperate to hang on to the few discretionary powers that remain. They have exploited these powers to build massive personal fortunes — in cash and, of course, in properties."

9. State housing policy has tax goodies for realty majors: Abhiram Ghadyalpatil, TNN

A special township policy proposed by the state government offers investors a slew of tax exemptions and incentives, all in the name of creating affordable housing stock. The framework, which is part of the overall housing roadmap, cuts through most of the regulatory controls that govern the realty sector to develop special urban townships on the periphery of major cities in the state. While the stated objective is to increase the stock of affordable houses, the fine print tells you a different story.

If cleared, the policy promises two major incentives, besides a host of other benefits and concessions for township projects. It throws open prime agricultural land for a developer to purchase without being a farmer himself. At present, land revenue code does not allow a non-farmer to purchase farm land.

Also, the land leased out for a special township project would automatically get notified as non-agricultural land.
Equally sweeping is the incentive that there would be no upper ceiling on agriculture land that a developer or owner could purchase for a given township project.
The project would also be exempt from the provisions of the Urban Land Ceiling and Regulation Act, which means that an individual (developer) could own more than 500 square metres of land.

Stamp duty would be halved, and the project would be “partially” exempted from payment of scrutiny fee for processing the proposal and another handsome 50% concession in payment of development charge.
On the construction side, the developer would get a floating floor space index (FSI), which means an unused FSI for one plot could be used elsewhere on the township area.

10. "Never judge the policy by its intent but always assess it by its consequences. Nothing could illustrate more vividly than the Urban Land Ceiling Regulation Act of 1976. ..."

In Parliament of India Sri.Ram Jethmalani quotes Mr. Ramesh Jairam, then a spokesman of the Congress Party!

According to Mr. Ramesh, this statute is the most conspicuous example of a statute which was declared to be a statue with good intentions but produced nothing; a mountain of good intentions produced a mouse by way of labour. He says:

"The objectives of the Act, as it is usually referred to, were laudable. It was to prevent concentration of urban land and to promote housing for the poor in cities but in actual practice, the Act has reduced the supply of land, inflated land prices, served as a dampener on housing and construction activities and impeded the timely closure of sick companies in places like Mumbai, Calcutta, Ahmedabad and Kanpur in a manner that would protect the interests of labour and generate new economic activity. Clearly the Act is bad law and worst economics."

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