Events & Personalities
Restraint on resale of flats
On March 20, 2014, the Bombay High Court (BHC) temporarily restrained a cooperative housing society in Andheri, meant for economically disadvantaged Parsis, from transferring any of the 60 flats there without the consent of the two trusts that had built the six buildings. The BHC was hearing an application filed by trustees of the Seth Behramji Ferdunji Kuka and Bai Ratanbai Ferdunji Kuka Charity Trust. Justice S. C. Gupte contended that the trust will suffer "irreparable harm” if the interim order pending the final one was not granted, reported The Times of India (TOI) on March 22, 2014.
Some of the residents of the buildings had transferred their flats to non-Zoroastrians without the consent of the trusts, in violation of the agreement which requires residents to offer the flats first to the trusts before approaching outside buyers, reported Hindustan Times (HT) on March 22. The society felt that such a condition was contrary to the provisions of the Transfer of Property Act. The trustees then approached the BHC to seek declaration and enforcement of the preemption clause under which only a Parsi could use and occupy a flat in these buildings. Should an owner wish to sell a flat, the trust would buy it back at the original price of Rs 1.5 lakh for a 350 sq ft flat along with 10% interest.
While granting relief to the trusts, Justice Gupte noted that the principle behind Section 10 of the Transfer of Property Act was that the right of transfer is incidental to, and inseparable from, the beneficial ownership of property. He said that the project was undertaken with charitable intent and the price at which the right of preemption would be enforced was linked to the special concessional price at which the premises had been allotted, HT reported. "Such a fixed price for purchase under the preemption clause would be a reasonable price entailing only a partial restraint on alienation and not an absolute restraint within the meaning of Section 10,” the BHC noted.
Some of the residents of the buildings had transferred their flats to non-Zoroastrians without the consent of the trusts, in violation of the agreement which requires residents to offer the flats first to the trusts before approaching outside buyers, reported Hindustan Times (HT) on March 22. The society felt that such a condition was contrary to the provisions of the Transfer of Property Act. The trustees then approached the BHC to seek declaration and enforcement of the preemption clause under which only a Parsi could use and occupy a flat in these buildings. Should an owner wish to sell a flat, the trust would buy it back at the original price of Rs 1.5 lakh for a 350 sq ft flat along with 10% interest.
While granting relief to the trusts, Justice Gupte noted that the principle behind Section 10 of the Transfer of Property Act was that the right of transfer is incidental to, and inseparable from, the beneficial ownership of property. He said that the project was undertaken with charitable intent and the price at which the right of preemption would be enforced was linked to the special concessional price at which the premises had been allotted, HT reported. "Such a fixed price for purchase under the preemption clause would be a reasonable price entailing only a partial restraint on alienation and not an absolute restraint within the meaning of Section 10,” the BHC noted.
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