Bombay High Court
Newfound Properties And Leasing ... vs The State Of Maharashtra on 15 February, 2024
Author: G. S. Kulkarni
Bench: G. S. Kulkarni
913-WPL-718-2024.DOC
Ashvini Narwade
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION (L) NO. 718 OF 2024
Newfound Properties and Leasing Pvt. Ltd. & Anr. ... Petitioner
Versus
The State of Maharashtra & Anr. ...Respondents
Digitally
signed by
ASHVINI
ASHVINI BAPPASAHEB
BAPPASAHEB KAKDE
KAKDE Date:
2024.02.17
Mr. Fredun Devitre, Sr. Counsel a/w. Ms. Hemlata Jain, Ms. Bindi Dave,
17:45:05
+0530 Mr. Raghav Gupta, Mr. Kashish Mainkar, Ms. Treesa Benny i/b. Wadia
Ghandy & Co. for the Petitioners.
Mr. M. P. Jadhav, Addl. G. P. for State.
Mr.Akshay S. Karlekar i/b. Shreeyog Law Asso. for Respondent No.2
(MIDC).
_______________________
CORAM: G. S. KULKARNI &
FIRDOSH P. POONIWALLA, JJ.
DATED: 15th FEBRUARY, 2024
_______________________
P.C.
1. We have heard Mr. Devitre, learned Senior Counsel for the Petitioner,
Mr. Mohit Jadhav, learned Additional Government Pleader for Respondent
No.1, and Mr. Akshay Karlekar for Respondent No.2-MIDC.
2. The challenge in this Petition is to a communication dated
11th December 2023 issued to the Petitioner by the Area Manager, MIDC,
Mahape (for short "MIDC"), whereby the Petitioner has been informed that
the Competent Authority under the Urban Land (Ceiling and Regulation) Act,
1976 (for short "the ULC Act") has instructed the Area Manager to recover
from the Petitioner transfer charges, along with interest, against ULC
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exemption, as a condition for the transfer of the plot in question, being an
amount of Rs. 79,17,55,574/-, with its bifurcation as set out in the impugned
communication.
3. On the perusal of the impugned communication, it appears that the
same has been addressed when the Petitioners had approached the MIDC for
grant of permission to execute a General Agreement in respect of the sub-
divided plots in question, namely Plot No. Gen-2/1/D, Gen-2/1/E and GEN-
2/1/F as transferred in favour of the Petitioner on 20 th October 2006 from the
original lessee of the MIDC.
4. It is not in dispute that in respect of the lands in question there was an
exemption order under Section 20 of the ULC Act dated 7 th July 1993 which
was issued in favour of the original lessee -M/s. Herdillia Chemicals limited.
Subsequent thereto, by an Order dated 20 th October 2006, part of the land
which, inter alia, included the subject land, was permitted to be transferred in
favour of the Petitioner by the MIDC. A copy of the said Order is annexed at
Exhibit-F to the Petition.
5. In the context of the exemption under Section 20 of the ULC Act, the
MIDC addressed a letter to the Petitioners dated 20 th October 2006, inter alia,
referring to the Section 20 exemption Order dated 7 th July 1993, whereby the
Petitioners were informed that all the terms and conditions mentioned in the
exemption Order dated 7th July 1993 in favour of M/s. Herdillia Chemicals
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Limited would remain unchanged (condition no.3 incorporated in such letter).
It appears that, for the reasons stated to be complexity in calculation of the
ULC amounts to be paid under the exemption orders, the MIDC, which is also
the Competent Authority under the ULC Act, did not take steps to recover the
said amount, although the Section 20 ULC order qua the lands in question was
passed on 7th July 1993. This is quite baffling.
6. In the meantime, it appears that the Petitioners having received in their
favour a lawful transfer of the lease of the land from the MIDC, the Petitioners
have taken steps to develop the land to set up an Integrated Information
Technology Townships (for short "IITT"). In regard to such development, the
Petitioners have submitted documents to the MIDC being inter alia, the draft
of the general agreement to the MIDC for the purpose of its approval as also
applications for the necessary development permission. It is the case of the
Petitioners that such project of the Petitioners was approved by the MIDC by
following the procedure sometime in September 2020. It is at this juncture,
when the Petitioner approached the MIDC seeking permission to execute the
general agreement and register the same, that the impugned letter dated 11 th
December 2023 was issued to the Petitioners demanding, what has been
contended on behalf of the Petitioners to be exorbitant, ULC amounts
purported to be under Section 20 Order dated 7th July 1993.
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7. On 9th January 2024, while adjourning the present proceedings to
enable the MIDC to file a reply affidavit, we had granted an ad-interim
protection to the Petitioners to the effect that no coercive action be taken
against the Petitioners under the impugned demand. We had also clarified that,
in view of the urgency set out on behalf of the Petitioners, the proceedings
would next be heard on interim reliefs. Thereafter, on 1 st February 2024, we
had adjourned proceedings to enable learned Counsel for MIDC to take
instructions. An Affidavit on behalf of the MIDC was accordingly placed on
record on 6th February 2024. Further, on 9th February 2024, when the
proceedings were listed before us, we passed an order recording that, in the
facts and circumstances, a reply affidavit from the State Government would
also be necessary. We accordingly permitted the State Government to file its
reply by 14th February 2024. Today, Mr. Jadhav, learned Additional
Government Pleader, has stated that reply affidavit could not be filed on behalf
of the State. Considering our previous orders and the urgency as set out by the
Petitioners, of which the Respondents were put to notice, namely that the
entire development project is held up on account of the impugned demand,
which is being contended on behalf of the Petitioners to be an arbitrary and an
illegal action on the part of the Respondents, learned Senior Counsel would
urge that the Petitioners be heard on the prayer for interim reliefs.
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8. Mr. Devitre, learned Senior Counsel, has taken us through the record to
submit that the demand of the amounts by the impugned communication
dated 11th December 2023, labelled as transfer charges under ULC exemption
being the principal amount of Rs. 17.83 crores, interest from 20th October
2006 to 31st December 2023 of Rs. 49.25 crores along with the GST amount
of 18% calculated at Rs. 12.07 crores, totaling to an amount of Rs.79.17 crores,
has no basis whatsoever in law and that such demand is untenable. His
principal submission is that, at the most, the liability of the Petitioners would
be the liability to pay under the ULC Exemption Order dated 7 th July 1993
issued under Section 20 of the ULC Act. Our attention is drawn as to what has
been provided for in such exemption order and more particularly in paragraph
4 thereof, which inter alia provides that in the case of any exempted land in any
of the MIDC Areas, the difference between the premium for the lease charged
by MIDC at the time of transfer and the premium paid by the transferor to the
MIDC at the time of allotment of the exempted land to the transferor by the
MIDC, if any chargeable under MIDC rules. Mr. Devitre, referring to such
paragraph of the Exemption Order, would submit that, under the order dated
7th July 1993, the principal amount would not exceed an amount of Rs. 4
crores, without interest, on which the Petitioners would have not any quarrel.
Mr. Devitre would submit that the Petitioners, without prejudice to their rights
and contentions, would not be averse to depositing the said amounts with the
Competent Authority/MIDC, so that the further permissions/plans etc. need to
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be now considered for approval by the MIDC and that the project is not stalled
on account of what has been foisted on the Petitioner by the impugned
communication.
9. Mr. Devitre would next submit that the development of IITT is being
undertaken by the Petitioners under the policy of the State Government
incorporated by an amendment to the Development Control Regulations
("DCR") by Government Resolution dated 18 th May 2018(Exhibit-H),
providing for modification of the DCR to revise the DCR of the MIDC to
incorporate the new regulations regarding Integrated IT Townships. It is
submitted that, in so far as the ULC exemption is concerned, under the special
concessions as set out in the revise DCR, an exemption from the ULC Act has
been provided as set out in paragraph 1.8 (e) which reads thus :-
"e)Exemption from Urban Land (Ceiling and Regulation)Act,
1976: Integrated IT Township projects will be exempted from
the purview of Urban Land (Ceiling and Regulation)Act,
1976."
10. Hence, it is Mr. Devitre's submission that it was not legal and valid for
the MIDC to issue the impugned communication, which, according to him,
would in fact amount to reading something in the original exemption order
dated 7th July 1993 which is alien to it and infact something contrary to the
said order.
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11. Mr. Devitre has also drawn our attention to the Petitioner's letter dated
22nd March 2022 (Exhibit-Q), as submitted to the Chief Planner, wherein the
following undertaking came to furnished by the Petitioner in paragraph 6
thereof :-
"In the circumstances and notwithstanding NPLPL's stand that there is
no requirement to obtain any ULC related NOC from Urban
Department GoM, in order to enable MIDC to process and grant all
requisite approvals relating to the IITT development in a timely
manner: NPLPL hereby (without admitting any liability and without
prejudice to all its rights, remedies and contentions on all counts)
submits this undertaking as desired by MIDC, and undertakes to pay
transfer-charges if any payable in terms of the ULC Order dated 7 th July
1993, if applicable and finally determined to be payable in law."
12. It is on the above submissions Mr. Devitre would submit that the
Petitioners are entitled to interim reliefs as a serious prejudice is being caused
to the Petitioner with the Petitioners permissions/plans being not processed or
being considered for approval by the MIDC for the proposed IITT
development. It is submitted that the development is required to be
undertaken within the prescribed timelines as set out in the policy of the State
Government as also as per the MIDC rules for IITT. It is hence Mr. Devitre's
submission that the Petitioners are legitimately entitled to the interim reliefs as
prayed for.
13. On the other hand, Mr. Jadhav, learned AGP, would submit that the
reply affidavit could not be filed on behalf of the State Government. He also
submitted that he could not obtain instructions in regard to the
communication dated 27th August 2021 issued by the Under Secretary Shri.
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Samadhan Khatkale addressed to the Chief Executive Officer of the MIDC, a
copy of which is annexed to the reply affidavit filed on behalf of the MIDC, in
pursuance of which the MIDC has issued the impugned demand letter to the
Petitioners.
14. Mr. Karlekar, learned Counsel for the MIDC, has referred to the reply
affidavit filed on behalf of the MIDC opposing the admission of this Petition.
His contention is that the impugned communication is addressed to the
Petitioner purely in terms of what was informed to the MIDC by the Under
Secretary Shri. Samadhan Khatkale in his communication dated 27 th August
2021, issued to the MIDC, when it had approached the State Government for a
clarification in regard to the steps which are required to be taken in respect of
the exemption orders issued under Section 20 of the ULC Act. It is not being
disputed that the impugned communication is a general communication
and/or not a communication only in the context of the Petitioners' case. It is on
such contention that the impugned demand is said to be justified. Also
paragraph 5 of the MIDC's affidavit is relevant, purporting to be MIDC's
justification with regard to the compliance of the MIDC to raise the impugned
demand for further steps to be taken by the MIDC on the general agreement.
15. Having heard learned Counsel for the parties and having perused the
record prima-facie we are of the opinion that the MIDC was not justified in
issuing the impugned communication to demand an amount to Rs. 79.17
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crores to be recovered from the Petitioners and sought to be recovered in view
of the communication of the State Government dated 27th August 2021 of
Shri. Samadhan Khatkale, Under Secretary of Urban Development
Department. We may observe that such communication appears to be only in
the form of an opinion issued by the concerned officer replying to the queries
of the MIDC, which also appears to be not a final opinion, in regard to the
approach the MIDC would be required to adopt, in as much as such letter of
the State Government itself records that a final opinion would be availed from
the Law Department, which would be communicated to the MIDC. Further
the letter has left it to the discretion of the MIDC on the interest to be charged
on the ULC amounts to be collected by the MIDC as per the orders under
Section 20, as applicable in the respective cases as set out in para 1 of the
clarification. It is thus difficult to perceive that such communication of Shri.
Samadhan Khatkale issued to the MIDC is any binding decision of the State
Government and under what authority and law.
16. We are also of the prima facie opinion that such clarification as issued
by the State Government to the MIDC, and which is a general clarification
being not issued in the case of the Petitioner, cannot amount to any
modification of the terms and conditions of the transfer of the land in favour of
the Petitioners granted by the MIDC vide its order dated 20 th October 2006,
which incorporated the conditions of applicability of the exemption order
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dated 7th July 1993 issued under Section 20 of the ULC Act. Further, if the
approval for transfer dated 20th October 2006, read with the MIDC's letter
dated 20th October 2006 on the ULC conditions, more particularly, condition
3 thereof, is to be seen, in our opinion what can only be applicable is what has
been provided for in paragraph 4 of the Section 20 ULC exemption order
dated 7th July 1993 as noted by us hereinabove in respect of which the
Petitioners have no quarrel. The Petitioners have not disputed their obligation
to deposit the said amounts as also the interest in that regard as may be
permissible in law. This is also set out by the Petitioners in their undertaking as
furnished to the MIDC.
17. We may also observe that there may be complexities of calculation of the
ULC amounts, however, what cannot be overlooked is that the MIDC was also
quite slumberous in not recovering the ULC amounts for about 31 years and
by not recovering the said amounts in a reasonable time. There was another
chance to recover the said amount-that is when the transfer of the lease in
favour of the Petitioner was approved on 20th October 2006. Now, after 17
years of such transfer of the lease of the land, a demand of such nature as
impugned prima facie appears to be arbitrary.
18. For the aforesaid reasons, in our opinion, a strong prima-facie case has
been made out by the Petitioner for admission of the Petition and for grant of
interim reliefs, and if the same is not granted, certainly the Petitioners, for no
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fault of theirs, would suffer a serious prejudice. We accordingly, pass the
following order:-
ORDER
i. Rule. Respondents waive service.
ii. There shall be interim reliefs in terms of prayer clauses (c) & (d) which
read thus:-
"c. pending hearing and final disposal of the captioned Writ
Petition, this Hon'ble Court be pleased to stay the effect and operation of the Impugned Demand Notice [Exhibit 'A' hereto] and restrain Respondent Nos.1 and/ or 2 from taking any steps against the Petitioner in furtherance or implementation of the Impugned Demand Notice [Exhibit 'A' hereto];
d. pending hearing and final disposal of the captioned Writ Petition, this Hon'ble Court be pleased to order and direct Respondent Nos. 1 and 2 to process all applications by the Petitioner in relation to the IITT project on the said Plots, including the Petitioner's application for execution of the General Agreement [Exhibit-'I' hereto] if legally required by Respondent No.2, in accordance with law and on their own merits and without reference to any demand for payment of the amounts mentioned in the Impugned Demand Notice [Exhibit 'A' hereto];"
iii. However, the aforesaid interim relief shall be subject to the Petitioners depositing with the Competent Authority/MIDC an amount of Rs. 4 crore. The Petitioners intend to deposit the said amount by 20 th February 2024. On such deposit being made, the Respondents are directed to comply with the aforesaid interim orders.
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v. We also clarify that the interim orders are subject to the final orders which would be passed on this Petition on which the Petitioners shall not claim any equity.
19. At this stage, on behalf of the MIDC, it is submitted that there is a dispute on the actual amount which paragraph 4 of the exemption order would contemplate as, according to the MIDC, such amount is about 17 crores. In these circumstances, it is appropriate that the basis for the correct amount be furnished by the MIDC to the Petitioners. However, till such time we accept that amount of Rs. 3 crore 56 lakhs (about 4 crores) as per the computation as placed on record ( at page 69 C of the Petition) by the Petitioners. The same would form the basis for ordering deposit of Rs. 4 crores by the Petitioners, which shall be without prejudice to the rival contentions of the parties. (FIRDOSH P. POONIWALLA, J.) (G. S. KULKARNI, J.) Page 12 of 12 15th February, 2024 ::: Uploaded on - 17/02/2024 ::: Downloaded on - 28/02/2024 07:33:10 :::