I have bought resale property of MAHADA in Mumbai. The buyer from whom i have purchased the property is not the original owner as per allotment made by MAHADA. He had purchased the property from the original owner but at that time only sale deed was executed at that time. Now i am repurchasing the property from new owner as per sale deed and getting registered the property in my own name. The original owner is not ready to sign before the MMRDA Registrar on the ground that the agreement specifies that the sale has been done between Original Owner and Buyer and not between the new owner and buyer. Original Owner is saying that he will have to pay capital gain tax if I signed the agreement. Please suggest

In your case, involving a resale of a Maharashtra Housing and Area Development Authority (MHADA) property in Mumbai, the situation involves a legal complication due to the refusal of the original owner to sign the agreement. Here’s how you can navigate this:

1. Chain of Ownership and Title:

   • Since the property was originally allotted by MHADA, ensuring a clear chain of ownership is essential. The property should have passed through legal documentation from the original allottee to the current seller and then to you.

   • Verify that the

     sale deed

     between the original owner and the immediate buyer is properly stamped and registered. If there is any ambiguity or incomplete documentation, it can impact your title.

2. MHADA Rules and Regulations:

   • MHADA properties often have restrictions on resale for a certain period (typically 5-10 years from the date of allotment). Confirm that these restrictions have expired, and the transfer is permissible under MHADA regulations.

   • Check if MHADA requires a

     No Objection Certificate (NOC)

     or a formal process for property resale involving multiple transfers.

3. Capital Gains Tax Issue:

   • The original owner’s refusal to sign could be due to concerns about

     capital gains tax

     liability. However, if the sale between the original owner and the second buyer is already registered, the tax liability has already been triggered and is independent of your transaction. Your transaction should not affect the original owner’s tax liability.

   • You can clarify this point through a tax consultant or advocate, reassuring the original owner that signing as a confirming party would not trigger additional tax liability if no further financial gain is realized by them.

Steps to Resolve the Issue:

1. Legal Notice or Mediation:

   • Consider sending a

     legal notice

     to the original owner, emphasizing that their refusal to sign is affecting your rights. Offer to clarify any misunderstandings about tax implications or responsibilities.

   • Alternatively, you can arrange for

     mediation

     where all parties—original owner, intermediate seller, and you—meet to reach a mutual understanding.

2. Drafting a Tri-Party Agreement:

   • If MHADA or the registrar requires the original owner’s signature for transparency, you can execute a

     tri-party agreement

     involving you, the intermediate seller, and the original owner. This document can state that the original owner is signing as a confirming party and does not assume any new tax liability.

3. Seek MHADA and Registrar Guidance:

   • Visit the MHADA office and the

     MMRDA Registrar

     to explain your situation. They may provide a formal process or exemption to proceed without requiring the original owner's signature, especially if all prior sales deeds are legally binding and registered.

4. Legal Assistance:

   • Engage a property lawyer to ensure that all required documentation is in place. Your lawyer can advocate on your behalf and help navigate through any specific MHADA or tax-related concerns raised by the original owner.

In this scenario, the lack of the original owner's consent complicates the resale process. To resolve this, ensure the sale deed between the original owner and the current seller (your seller) is legally valid and registered. I would suggest you engage a property lawyer to verify that the current seller has legal ownership rights and the authority to sell. Confirm with MMRDA if registration without the original owner's signature is permissible.

The original owner's capital gains tax obligation arises from their sale, not your transaction. They should consult a tax advisor. Proceed only with clear title assurance.