If a transfer is executed without prior permission (NOC) from the Collector, it is treated as an unauthorized transfer. The Collector's office typically levies a regularization penalty ranging from 1% to 5% of the Ready Reckoner Rate, alongside standard delayed payment interest which is generally around 12% simple interest per annum from the date the transfer occurred (2014) to the actual date of payment

2) Under the Maharashtra Land Revenue rules for Class II/leasehold properties, any change in ownership or occupant title requires the Collector’s prior NOC and payment of premium, regardless of whether money changed hands. The state government considers a registered Gift Deed a formal transfer of property title

3) in the case of State of Maharashtra v. Mr. Aspi Chinoy) specifically involving Nariman Point/Cuffe Parade plots, the court clarified that if the land was originally leased out to a private developer at full market rate (not to a cooperative society at a concessional rate), the Collector cannot demand an NOC or premium for subsequent individual flat transfers.

If your building falls under this specific developer-lease criteria, no premium or penalty may be legally due.

The liability to pay Collector's premium depends on the nature of the land, the original grant/lease conditions, the Occupancy Class, and the terms of the conveyance or allotment. It is not automatically payable merely because a property has been sold or gifted. Therefore, the first step is to examine the property documents, property card, conveyance deed, and the Collector's permission clauses, if any.

1. How much Collector's premium is payable now? Is there any interest or penalty?

If the property is held on leasehold land, Occupancy Class-II land, or is otherwise subject to restrictions on transfer, Collector's permission and payment of premium may be required. The premium is generally calculated as a percentage of the Ready Reckoner/market value prevailing on the date the transfer is regularised or permission is granted, in accordance with the applicable Government Resolution and Revenue Department policy. The percentage is not uniform and varies depending on the category of land and the applicable policy.

If the premium ought to have been paid in 2002 or at the time of the 2014 gift but was not, the authorities may also levy interest, penalty, or other charges, depending on the applicable Government Resolution and the facts of the case. The exact amount cannot be determined without examining the title documents and the applicable policy.

2. Is Collector's premium payable on a gift to the daughter?

A gift to a daughter through a registered Gift Deed does not automatically exempt the transaction from Collector's premium. If the property is subject to transfer restrictions requiring prior permission of the Collector, the premium requirement may still apply despite the transfer being between close family members. However, certain Government Resolutions provide concessions or exemptions in specific cases. The applicability of any exemption depends on the nature of the land and the prevailing Government policy.

Before purchasing the property, you should insist that the seller:

• Produces the Collector's order or a No Dues/No Objection Certificate, if applicable.
• Clears any outstanding premium, interest, or penalty.
• Obtains all necessary permissions required for transfer.

A comprehensive title search and due diligence should be undertaken before execution of the Agreement for Sale. If the seller has failed to pay the Collector's premium for over two decades, the buyer should not assume this liability without first ascertaining the exact legal and financial implications from the Collector's office. It is prudent to make payment of the premium and procurement of all requisite permissions a condition precedent in the agreement, so that the responsibility remains with the seller before completion of the transaction.

Dear Sir/Madam,

The exact premium cannot be calculated without examining the original Government lease, property area/use and applicable Ready Reckoner rate. Any interest or penalty will depend upon the Collector’s assessment for the delayed transfers.

A registered gift deed to a daughter may also attract transfer premium if the lease conditions require Collector’s permission or premium for every transfer.

Before purchasing, obtain the Collector’s NOC/dues certificate and require the seller to clear all outstanding premium and penalties.

Advocate Saurabh Agrawal