G.O.(Ms.)No.4, Ways and Means Advance to Tamil Nadu Cooperative Housing Federation Limited, 2015
The Housing and Urban Development (HCS-1) Department of the Government of Tamil Nadu issued G.O.(Ms.)No.4 dated 14 January 2015, sanctioning a ways and means advance of Rs.40 crore to the Tamil Nadu Co-operative Housing Federation Limited. The advance was intended to repay overdue loans to commercial banks and financial institutions, with provision for the Government to take over suitable immovable properties belonging to indebted primary cooperative housing societies and treat their value as repayment.
What the document does
G.O.(Ms.)No.4 dated 14 January 2015 sanctions a Rs.40 crore ways and means advance to the Tamil Nadu Co-operative Housing Federation Limited. The Federation had borrowed from banks and financial institutions and lent the money through affiliated primary cooperative housing societies for construction of new houses. Overdues at the primary society level had affected the Federation's ability to repay its creditors.
The sanctioned amount was to meet liabilities outstanding to specified banks and financial institutions as on 30 September 2014. The annexure records total dues of Rs.40 crore across commercial banks and other financial institutions.
Property related conditions
The Housing and Urban Development (HCS-1) Department attached the following conditions to recovery of the advance:
- The Federation must identify indebted primary cooperative housing societies that own immovable property.
- The Government may take over property to the extent of a society's dues.
- A property may be taken over only if the land is needed and suitable for Government purposes.
- The land value must be fixed using the prevailing guideline value.
- The concerned District Collectors must decide whether identified land is suitable and determine its value, based on the list supplied by the Federation.
- The value of land taken over must be treated as repayment of the advance owed by the Federation.
- Any balance not covered through this arrangement must be settled under the usual rules governing ways and means advances.
The document refers to immovable property owned by indebted primary cooperative housing societies. It does not state that individual members' houses or privately owned properties are to be taken over.
Financial terms and administration
The annexure states that the sanction was valid up to 31 March 2015 and required repayment in full before that date, with immediate commencement and no moratorium. It records a normal interest rate of 13.5 percent, subject to Government orders fixing the rate for the financial year, a penal interest rate of 2.5 percent, and quarterly recovery of interest.
The Rs.40 crore was not to be paid in cash. It was to be credited through the specified deposit and accounting arrangement. The Deputy Registrar of Cooperative Societies (Housing), Chennai, was directed to report the drawal date and make the required budget submissions.
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Common questions
Can the Government take over land belonging to a primary cooperative housing society?
Yes. The Government may take over immovable property belonging to an indebted primary cooperative housing society if the land is needed and suitable for Government purposes.
How will the value of society land be decided?
The value must be based on the prevailing guideline value. The concerned District Collector decides the suitability and land value using the list provided by the Tamil Nadu Co-operative Housing Federation Limited.
Does G.O.(Ms.)No.4 dated 14 January 2015 authorise takeover of an individual member's house?
The document only describes takeover of immovable property owned by indebted primary cooperative housing societies. It does not state that individual members' houses or privately owned properties will be taken over.
What were the repayment terms for the Rs.40 crore advance?
The annexure required repayment in full before 31 March 2015, with repayment commencing immediately and no moratorium. It also recorded normal interest of 13.5 percent, subject to Government rate orders, and penal interest of 2.5 percent.
