Personal Finance »Real Estate»Real Estate Details
Real Estate Details

Do not buy flats constructed under specific schemes

Jehangir Gai / Mumbai 12 Apr 12 | 12:22 AM

It is a sad reality that housing properties are slipping out of reach of the common man, though food, clothing and shelter are considered basic needs of any individual. To put right this situation, governments float welfare schemes for target sections of the population. Typically, the target beneficiaries of such schemes are members of particular weaker sections of society, such as fishermen or slum dwellers. In contrast, there are other schemes where land is given by the government at a concessional rate to its officers. In all such schemes, certain restrictions are imposed to ensure that the objective of the scheme is fulfilled and not misused. There is, usually, a stipulation that the tenement cannot be sold for 10 years, or that it can subsequently be sold only to members of a particular weaker section.

Unfortunately, there is a lot of corruption and rampant efforts to scuttle the laudable aims of such schemes. Builders involved in the construction of such schemes, the beneficiaries and the authorities collude to profiteer through malpractices. As a result, such flats and tenements are sold, transferred and third party interest created through bogus gift deeds and execution of power of attorney in favour of the purchasers.

Related Stories

    No Related Stories Found
Widgets Magazine

The purchasers are mostly middle class people who cannot afford regular housing and, therefore, opt for such flats, available at below market prices. However, the savings made by acquiring such flats through illegal means are not worth the risk involved. Purchasers of such flats are liable to be thrown out on the street by the courts. Consider this Bombay high court order dated March 21, 2012, in Writ Petition No. 975 of 2010, regarding such transactions.

Sumer Corporation had constructed some buildings under a slum rehabilitation scheme. One of the flats under this scheme was occupied by Deepak Gaikwad. He claimed to be in possession of the flat by virtue of a gift deed dated September 25, 2009 executed by Tulsiram Raddewal, the original allottee of the flat from Sumer Corporation.

The high court refused to go into the question of the validity of the allotment letter issued by Sumer Corporation to Raddewal. The court observed the so-called gift deed had no validity in the eyes of law because a tenement constructed as part of a slum rehabilitation scheme cannot be transferred for a period of ten years. Since no allotment letter had been issued to Deepak Gaikwad, the court held he was not entitled to occupy the flat. Hence, the police was directed to seal the flat.

Another flat in the same scheme was in the possession of Pratibha Gaikwad'. She claimed she was in occupation as the power of attorney holder of Kasubai Basare, who was the original allottee. The Court refused to go into the question of the correctness or authenticity of the original allotment letter issued by Sumer Corporation to Basare. Since no allotment letter had been issued to Gaikwad, the Court held the power of attorney was of no use to stake claim to the flat, which could not be transferred for 10 years. Accordingly, the police was directed to seal the flat.

Two other flats under the same scheme were in the possession of Nikam Vishram and Mahadev Nikam, who had gone to their native place. Neither of them bothered to produce any documents to prove their respective entitlement to the flats, nor did they file any affidavits. So, the court directed the police to take over these flats.

So, it would be a case of being penny-wise and pound foolish to buy such flats by executing documents, illegal in the eyes of law. The buyer clearly runs a risk of losing the flat.

The writer is a consumer activist

Widgets Magazine


Company Price Gain (%)
Reliance Inds.1,015.451.99
Yes Bank335.451.53
Axis Bank524.401.48
Bharti Airtel375.601.20


Currently No Poll Available.

Online Portfolio

You can create Online Portfolio here using the below button.

Widgets Magazine