The joint select committee comprising housing ministry officials and assembly members which has been appointed to frame a new Rent Control Act will consider on Wednesday proposals that include the legalisation of the traditional practice of a lumpsum paid off-market and without a receipt in lieu of the right to go for long-term property leases.

According to state housing minister Suresh Jain, who heads the committee, "The joint select committee formulating the Rent Control Act will meet tomorrow at Ganapatiphule to discuss various issues relating to the legalising of pugree. If we are able to evolve a system wherein the pugree can be legalised, it will be a win-win situation both for the government and the public at large."

According to various proposals that the government received from the FlatOwners Association, there are more than 19,642 old buildings in Mumbai alone where the system of pugree flourishes.

According to broad statistics, there are more than four lakh small rooms/units in the area like Colaba, Girgaum, Kalbadevi, Worli, Dadar, Mahim, Fort, Mazgaon, Parel, Lalbag and Sewree. Pugree system is also prevalent in posh areas like Marine Lines, Malabar Hill, Carmichael Road, Warden Road, Peddar Road where big premises are given on rent covering an area of 1,000 sq ft. According to rough estimates, pugree received and paid in these areas during the last 50 years would in the region of Rs 10,000 crore.

There are approximately more than 5,000 buildings in the Eastern and Western suburbs like Bandra, Santacruz, Vile Parle, Andheri, Ghatkoper, Kurla having approximatley more than 2 lakh tenements. `Pugree' is the lumpsum amount paid on a very long term lease without a receipt. The money is paid in black. The rate of pugree has been subtantially increasing from its inception in 1947 when itranged from Rs 50,000 to Rs 1,00,000 for a average two room house and now the same premises stands at Rs 5,00,000 and above (rates in posh localities and in the suburbs would be higher. And if an average of 1000 transaction have taken place then about 50,000 transactions would have taken place in the last 50 years.

According to Mahabelshwar Morje, secretary of the Flat Owners Association: "If the transactions are made in white, a good part of the money recieved by the government can be utilised for the purpose of repairs and reconstruction and the landlords and the tenants or the government is not required to approach the World Bank, or HDFC, LIC or GIC for the purpose of financial assistance."

The flat owners association in its proposal submitted to the government says that an amount of Rs 70,000 crore recieved as pugree in the last fifty years could have been used for the construction of new buildings and to repair and reconstruct old buildings which could have avoided buillding collapses. Thegovernment could have earned revenue of Rs 3,000 crore on account of Income-tax and Rs 500 crore by way of of municipal corporation taxes.