‘Estate Office cannot charge unearned profit on property’

Tribune news service

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Chandigarh, August 23 

In a decision which will have a far reaching effect the Finance Secretary-cum-Chief Administrator, Ajoy Kumar Sinha, has set aside the order of imposing an unearned increase of around Rs 74 lakh for transfer of the property, which has already been converted from the lease hold to free hold.

While arguing the case for the property owners, advocates SK Jain and Vikas Jain termed charging unearned increase for the free-hold property against the conversion of the property rules 1996.

The house in Sector 37 was alloted to Ramdhan Goyal in 1972 on lease-hold basis at the premium of Rs 4,225 and the lease was executed on 25. 03. 1974. Thereafter the original allotee sold the site to appellants Bhushan Kumar Manuja and his wife Neelam Manuja in 1992.

Afterwards, a dispute arose between the seller and the purchasers. The original allotee as well as the appellants filed suit for declaration, which was decided by the by a common judgment on 31.10. 2008. The original allotee was directed to execute the sale deed in favour of the appellant.

Then the original allottee applied for the NDC and conversion of the plot from lease hold to free hold before the Estate Office. The said plot was converted from lease to free hold on 14.11.2008. After that appellants applied for the transfer of the share in their name. But appellants were surprised to know that the Estate Office had calculated unearned increase of around Rs 74 lakh on the basis of the commercial property situated in Sector 37.

Applicants counsel Vikas Jain contended that the sale deed was executed in 2007 and as per the notification issued in 1996 by the Chandigarh administration the Estate office could not charge unearned profit on free-hold property and could only levy transfer fee. 

On other hand the Estate Office counsel stated that the calculation was done as per the court order, which directed the alottee to execute the sale deed in favour of the appellant subjects to the condition of payment of the 50 per cent unearned increase in land value.

While hearing contentions of both the parties, the Chief Administrator said the Estate Office counsel had failed to give any cogent reason, which could rebut the appellants stand. Moreover, the calculation sheet was also not supported by the speaking order. 

While quashing the calculation sheet the Chief Administrator remanded back the case to the Estate Officer to determine the contentions raised by the applicants counsel and pass well reasoned speaking order with the rules, law and after affording opportunity of hearing to appellants.