January 24, 2006	Tuesday	Zilhaj 23, 1426

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ISLAMABAD, Jan 23: A proposal has been made to the government to drastically amend the Companies Ordinance 1984 and the Cooperative Societies Act 1925 to check growing scams in the housing sector.

The final report of the Sub-Committee on Cooperative Housing Societies obtained by Dawn has called upon the government to make it obligatory for housing societies and private companies “not” to offer any plots/houses/flats to the public without the acquisition of entire 100 per cent land for the scheme. The sub-committee was constituted by the Cabinet Division.

The land mafia, it added, was exploiting loopholes in the law to become rich overnight, so it needed to be dealt with strictly.

It said that the competent authority should be vested with powers to cancel the registration of a society and the power to penalize the sponsor of the scheme in case of launching any housing unit without acquiring 100 per cent land for the purpose.

The report recommended that the provisioning of housing and shelter to citizens should be treated as a poverty-minimizing measure and not a profit-making or commercial venture or a welfare-oriented activity to maintain certain price structure of land in the country.

With a view to plugging loopholes in the system, the Registration Act 1908 should also be amended as proposed by the Law and Justice and Human Rights Division and the director, Metropolitan Planning, Rawal-pindi Development Authority, it further recommended.

The mushroom growth of cooperative societies and private housing schemes was due to excessive liquidity in the financial system on account of unprecedented inflow of funds from abroad following the 9/11 incident.

Then the level of gross fixed investment in the country, especially in the private sector, remained stagnant until 2003-04.

These two factors contributed to diversion of funds to speculative trade in the existing stocks of shares, commodities and land.

The report is of the view that the proposed National Spatial Act should provide a monitoring role of the housing sector at the federal and provincial levels. Since the National Economic Council (NEC) has approved the Medium-Term Development Framework (MDTF) in which all four provinces are represented, the proposal should not be opposed by the provinces.

The regulatory regime of the development agencies, devolved to local governments, should be enforced in the urban areas and the regulatory regime of the line departments should be applied to the rural areas.

Simultaneously an amendment be made in the existing regulatory framework that no offer of plots be made in the housing societies/companies until and unless the housing scheme is duly approved by the Town Planning Department of the development agencies concerned in the urban areas and by the Tehsil Municipal Adminis-tration in rural areas.

The report believes that an enactment of uniform law for registration of housing societies is not feasible due to the constitutional limitation as subjects of physical planning and housing fall in the domain of the provinces/local governments. But each province should modify the Cooperative Societies Act, 1925 and the rules regarding conditions for prior possession of land to the extent deemed appropriate by them.

It was recommended that an amendment be made in relevant registration laws to make it obligatory on the registrar not to register any private housing society bearing any semblance of nomenclature with the government ministry/division/department/ autonomous body.

“With the heating up of land prices, the position has become more complex as land revenue department officials are reportedly involved in underhand dealings for arranging conversion of agricultural land to housing or other uses. There is a need to develop some legal provisions which can protect societies from becoming a victim of exploitation by the land mafia.”

In this behalf, the report proposed that land acquisition on the pattern of the Defence Housing Authority (DHA), Lahore should be considered as an option. The other option is to carry out zoning of areas and extend the jurisdiction of regulatory authorities to potential areas for housing schemes.

The report urged that the provincial and district governments should be involved in developing master plans of urban and rural areas and earmark spaces for housing projects along with a mechanism to preserve the price structure.