The Madras High Court Lifts the Ban with Some Riders!
The Background
Updates on Regularisation of Unapproved Plots
It all started with a PIL by an Activist-Advocate Elephant G Rajendran, which sought to curb indiscriminate conversion of agricultural land into residential plots and the registration of such unapproved plots.The Case was filed in The Madras High Court in 2015.
In the course of the hearing in The Madras High Court, the Tamilnadu Government(Advocate General) took the stand that the Government do not have the powers to refuse Registration of Documents of Unapproved Plots.
It came to light then, that a law was enacted way back in 2009 inserting Section 22A in the Registration Act of 1908, enabling the Registering Authority to refuse Registration, if the Plot/Layout was not Approved. It was noticed further, that his Law was not given effect to, by necessary Notification.
Further, the Court came to know that there were no Provisions of Acts/Rules/Regulations till then, prescribing any wetland lying fallow for more than three years, to be converted into residential or into other uses. This means, this conversion of Wetlands into Layouts whether Approved or Not is blatantly illegal.
Further more, though The Town and Country Planning Act has not given any powers to the Panchayats to Approve Layout, most of the Unapproved Layouts were, in fact, ‘Approved’ by the Panchayats.
The Ban Order of 21.10.2016
It was in the background of these, on 21.10.2016, The Madras High Court imposed the Ban in the following words:
“We thus hereby direct that no Registering Authority shall register any sale deed in respect of any plots in unauthorized lay outs or any flats/building constructed on such plots. This order becomes necessary to prevent further development of unauthorized lay outs and conversion of agricultural areas for nonagricultural use in an unplanned manner, as also to save ecology and prevent flooding, while simultaneously giving time to the Government to come forth with the necessary policy documents and Legislative changes.”
The Tamil Nadu Government’s Response to the Ban
Unfortunately, it was during this period the Government functioning almost came to a standstill as a result of the illness and then the death of former Chief Minister and the events that followed. As a result, it took more than six months for the Government to come out with proper Rules to satisfy the Court to Lift the Ban.
First, Section 22A, that was enacted in 2009, was duly Notified in Gazette on 20th Oct 2016. This empowered Government to refuse registration of Unapproved Plots.
And, it was on 4th May 2017, the Government came out with two GOs addressing the concerns of the Court, that has paved the way for the Court to Lift the Ban. They are:
1) Regularisation of Unapproved Plots and Layouts Rules, 2017
2)Rules for change of land use from Agriculture to non-agriculture
The Court Order of 12th May, 2017
These notifications were presented before the Court on 5th May. The Court heard the matter on 12th May 2017, and accepted them, and lifted the ban. The operative part of The Madras High Court Order of 12th May 2017, are given below:
“20.Considering that there is a statutory provision which has now come into force and rules have also been framed by the Government of Tamilnadu, we deem it appropriate to direct that plots may be registered strictly in accordance with Section 22-A of the Registration Act, 1908, incorporated by Tamil Nadu Act 2 of 2009, read with the Tamil Nadu Regularization of Unapproved Layouts and Plots Rules, 2017 and the Tamilnadu Change of Land Use (From Agriculture to Non-Agriculture Purposes in Non-Planning Areas) Rules, 2017.
20. However, registration of plots in unapproved layouts as house sites made after 9.9.2016 until 28.3.2017 and between 21.4.2017 and today (12.5.2017), if any, is in violation of an order of the Court and prima facie a nullity in the eye of law. Plots in unapproved layouts registered as house sites while the interim orders were in force shall not be registered until further orders.
21. The recital of the GO, Tamil Nadu Regularisation of Unapproved Layouts and Plots Rules, 2017, reads
“the Governor of Tamil Nadu exempts all unapproved layouts, where any or all plots are sold and registered on or before the 20thth October 2016 and all unapproved plots which are sold and registered on or before the 20thth October 2016 from the operation of all the provisions of the Tamil Nadu Town and Country Planning Act, 1971”. In our prima facie view, the recital extracted above, is in excess of the rule making powers conferred under Section 122 of the TCP Act insofar as the same purports to exempt unapproved plots and unapproved layouts sold and registered on or before 20.10.2016 from the operation of all the provisions of the TCP Act. The recital shall, for the time being, be construed to mean that “all unapproved layouts, where any or all plots are sold and registered on or before the 20thth October 2016 and all unapproved plots which are sold and registered on or before the 20thth October 2016 will be governed by the provisions of the Tamil Nadu Town and Country Planning Act, 1971 read with the Tamil Nadu Regularization of Unapproved Layouts and Plots Rules, 2017 and the Tamil Nadu Change of Land Use (From Agriculture to Non-Agriculture Purposes in Non-Planning Areas) Rules, 2017.”
22. The Tamil Nadu Regularization of Unapproved Layouts and Plots Rules, 2017 and the Tamil Nadu Change of Land Use (From Agriculture to Non-Agriculture Purposes in Non-Planning Areas) Rules, 2017 shall be read with the provisions of the Town and Country Planning Act, 1971 in its application to the categories of house sites specified in the proviso to sub-section (2) of Section 22-A of the Registration Act, 1908, incorporated by Tamil Nadu Act 2 of 2009.
23. All registrations pursuant to this interim order shall be subject to and abide by the result of the writ petitions and shall remain in force until further orders.
24. The observations made above are prima facie observations which will not affect the final outcome of the proceedings.”
A plain reading of the Order reveals, that the final word is not yet said on the matter.However, it is clear that the Court and the Government have broad unanimity on a number of matters on the issue.
The case was posted for next hearing on 14.6.2017
G O No.78 Dated May 4, 2017-Clarifications by the Court
The need for this Clarifications arose as a result of the confusion created by para 15(b) of the Regularisation GO dated 4th May,2017 whichsays among other things that:
” such unapproved plot or layout shall not be registered…”
As a result, no Registration of Unapproved Plots could be done in any SROs in the State, creating much hardships to the people. Since the said GO is submitted in the Court and accepted by the Court, and is now part of the Court order dated 12th May 2017, the Government had to approach the Court for clarifications.
On 15th Jun 2017, the Madras High Court issued the following clarification on the Writ Miscellaneous Petition filed by the Govt:
“5. It is, thus, clarified that transfer of plots, which had been registered as house sites before 21st October 2016, except those which have been registered in violation of interim orders passed by this Court may be registered. Rule 15(b) is to be construed to apply to those plots which had not been registered as house sites prior to 21.10.2016.
6. The common order dated 12.05.2017 made in W.P.No.19566 of 2015 and other similar writ petitions is clarified to the extent stated above and the application is disposed of accordingly. Needless to mention that Rules shall apply for all other purposes.”
Para 15 reads as under:
“15.Consequences of non-regularisation.– Where no regularization is ordered under these rules for an unapproved plot or layout; then-
(a) no electricity, water supply, drainage and sewerage connections shall be extended to such unapproved plot or layout;
(b) such unapproved plot or layout shall not be registered under the Registration Act, 1908 (Central Act 9 of 1908) by the Registration Department; and
(c) no building approval shall be given by the authorities concerned for such unapproved plot or layout.
In order to give effect to the consequences indicated above, the Departments concerned shall make
necessary amendments in their respective Acts.”
Court Confirms the Penal Provisions
This means. though the Court through this Clarification has granted permission to register and transfer plots already registered as Plots before 20.10.2016, the stipulation to get them Regularised within the 6 months period remains valid.
According to the other clauses in that Section, failure to get Approval within the stipulated 6 months period, will make the Plots ineligible for Plan Approval, EB, Water and Sewerage connections. Also, by implication, registration of such Unapproved Plots will not be allowed after the 6 months period.
The Government has already put in place a Portal exclusive for this purpose, and fixed Nov 3, 2017 as the last date for submission of Applications for Regularisation.
The Procedure for submitting Application and getting Approval is also available in this Portal.
Markets Will Continue to Remain Depressed, for Now
This clarification by The Madras High Court is not going to lift the sentiments in the market in any way, is obvious. In fact it had only confirmed the penal clauses in the GO.
The Market Sentiments will continue to be depressed. Because, when the other conditions mentioned in the GO dated 4th May 2017 namely no Plan sanction etc remain valid , no buyer will take the risk of buying an Unapproved plot and then run here and there for Approval.
Also, how the Government gears up it’s machinery for smooth and fast disposal of Applications submitted for Regularisation, will go a long way in clearing the uncertainties associated with the exercise. It’s not clear how it’s going to go about.
Added to this, is the steep increase in the Registration Fee announced last week under the garb of Guideline Value Revision.
Impact of GST on Real Estate Sector, and the effect of implementation of RERA are also other aspects that will add to the negative Market Sentiments.
