Cessed building is a building which pays Cess Tax which actually means a Repair Fund. These buildings are mainly present in South Mumbai, where construction dates back to pre-independence era.
This term is important with regards to redevelopment, repairs and reconstruction, or simply, transforming the ownership of a building.
Maharashtra Housing and Area Development Act, 1976 (MHADA) makes special provisions for repairs and reconstruction of “cessed” buildings.
Law has many provisions for undertaking repairs and reconstruction for/ of cessed buildings but not a single one deals with that of non-cessed buildings. This lacuna of law, has led to a lot of legal advisors to conclude that any building which does not pay cess, is a non-cessed building, and whatever provisions are applicable to a cessed building, the same is not extended to a non-cessed one.
Under MHADA, different provisions are applicable to different categories of cessed buildings. These categories are based on their dates of creation / existance and amount of cess leviable on buildings varies accordingly.
S. 84 of MHADA says:
- Category A of cessed buildings – building erected before 1 September 1940
- Category B of cessed buildings – building erected between 1 September 1940 and 31 December 1950 (both days inclusive)
- Category C of cessed buildings – building erected between 1 January 1951 and 30 September 1959