Bombay High Court
Bank Of Baroda vs Mumbai Metropolitan Regional on 2 March, 2010
Author: J.H.Bhatia
Bench: F.I.Rebello, J.H.Bhatia
1
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO. 750 OF 2000
1. Bank of Baroda, a Banking Company )
constituted under the provisions of the )
Banking Companies (Acquisition & )
Transfer of Undertakings) Act, 1970, )
having its Central Office at 3, Walchand )
Hirachand Marg, Ballard Pier, )
Mumbai -400 001. )
2.
Shri Bharat Karsanlal Mody, )
the Deputy General Manager (Estate )
Management) of the 1st Petitioner
)
having his office at 3, Walchand Hirachand )
Marg, Ballard Pier, Mumbai 400 001. ).. Petitioners
Versus
1. Mumbai Metropolitan Regional )
Development Authority, an Authority )
constituted under the Mumbai )
Metropolitan Region Development )
Authority Act, 1974 having its )
registered office at C-14 and C-15 of "E" )
Block, Bandra-Kurla Comlex, Bandra )
(East), Mumbai - 400 051. )
2. Shri V.K. Phatak, )
Chief, Town & Country Planning Division, )
of the Respondent No.1, having his )
office at Plot Nos. C-14 and C-15, Bandra- )
Kurla Complex, Bandra (E), )
Mumbai - 400051. ).
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3. State of Maharashtra )
Govt. Pleader, High Court, Mumbai. )..Respondents
Mr. F.Divetre, Senior Counsel a/w Mr. J.P.Sen & Mr. P Dubash i/b. Mulla &
Mulla & Craigie Blunt & Caroe, Advocates, for the petitioners.
Ms. Kiran Bagalia, Advocate, for respondent Nos. 1 & 2.
Mr. R.J. Mane, AGP, for respondent No.3
CORAM: F.I.REBELLO AND
J.H.BHATIA, JJ.
JUDGMENT RESERVED ON: 16.02.2010
JUDGMENT PRONOUNCED ON 02.03.2010.
JUDGMENT:(PER J.H.BHATIA,J.)
1. The respondent No.1 has been constituted as "Metropolitan Authority" or "Authority" under the Mumbai Metropolitan Region Development Authority Act, 1974. By a Memorandum dated 20.2.1985, the Government of Maharashtra - respondent No.3 sanctioned and granted 180.162 Hectares of Government land situated at Bandra-Kurla Complex to the respondent No.1 for development of that area as an "International Finance and Business District/Centre" and, accordingly, the land was transferred to respondent no.1 by an order dated 10.5.1985 passed by the Additional Collector. On 23.3.1994, respondent No.1 invited tenders for disposal o various plots of land in the International Finance and Business Centre known as "G" Block of the Bandra-
Kurla Complex. On 9.5.1994, the petitioner No.1 - Bank of Baroda submitted a ::: Downloaded on - 09/06/2013 15:39:42 ::: 3 tender for plot No. C-26. That tender was accepted on 20.6.1994 and, accordingly, the petitioner No.1 paid amount of Rs.80.71 crore by cheque towards lease premium for the plot No.C-26. Thereafter, on 15.7.1994, an agreement to lease was executed between the petitioner No.1 and respondent No.1 and accordingly the petitioners were allowed to enter upon and occupy the said plot as licensees. By a Notification dated 14.10.1994, a new Regulation 4A was inserted in the Bandra-Kurla Notified Area Development Control Regulations 1979 ("DCR Rules" in brief). As per sub-clause (e) in Regulation 4A(i),it was provided that for additional area of basement to be used for regular vehicular parking only, a premium at the rate of 20% of the lease premium shall be paid by the allottee to the Metropolitan Authority. In July 1996, the petitioners submitted plans of the proposed building to be constructed on the said plot and on 31.10.1996, the petitioners applied for permission for providing additional basement for underground parking facility in the basement. On 15.11.1996, the respondent No. 1 - MMRDA granted "No objection in principle" to the request of the petitioners and required the petitioners to pay an amount of Rs.4,26,23,501/- as premium for additional basement. In response to that, the petitioner raised a protest by a letter dated 20.11.1996 to the respondent No.1 pointing out that as per the terms of the agreement dated 15.7.1994 and the booklet given to the petitioners, 5% of lease premium was to be paid for additional basement. As per that rate, amount of ::: Downloaded on - 09/06/2013 15:39:42 ::: 4 premium worked out to be Rs.1,05,98,603.75 towards the additional basement as against the amount claimed by the respondent No.1. The petitioners requested the respondent No.1 to confirm the correct position. Thereafter some more letters were addressed by the petitioners to the respondent No.1 seeking clarification of the premium amount for the additional basement. On 4.2.1997, the respondent No.1 replied that in view of the Regulation 4A(i)(e), which was effective from 14.10.1994, for the building proposals received thereafter, charging a premium at the rate of 20% of the lease premium for the additional basement was necessary and, therefore, 20% lease premium was required to be paid by the petitioners.
According to the petitioners, on 14.2.1997, again a resolution was passed, in exercise of powers under Section 40 of the MRTP Act,1966, to reduce the rate to 5% and on 15.1.1999, a notification was issued accordingly and the rate was reduced to 5%. Meanwhile, on 20.1.1998, the petitioner had made payment of Rs.4,26,23,507/- by a cheque towards the premium demanded by the respondent No.1 for additional basement area. The petitioners contended that in view of the terms of the agreement and the resolution passed on 14.2.1997 and the amendment dated 15.1.1999 in Regulation 4A(i)(e)(iii), the petitioners should be required to pay 5% of the lease premium. However, that request was turned down and the request for refund of the excess money was rejected by the letter dated 26.5.1999 by the respondent No.1. In view of these facts and circumstances, the petitioners, ::: Downloaded on - 09/06/2013 15:39:42 ::: 5 by this petition, challenged the rejection of their request to charge the premium at the fate of 5% of the lease premium and to refund the excess money.
2. According to the respondents, even though as per the agreement entered into between the parties, the premium for additional basement area was to be 5% of the lease premium, in view of the amendment in the DCR, the respondent No.1 was bound to collect the premium for the additional basement area at the rate of 20% as it was the statutory requirement and the terms of the agreement contrary to the statutory provisions would not be binding. As the proposal for construction was made and the permission was taken during the period when the relevant DCR provided for 20% premium. the petitioners would be liable to pay the premium at that rate. Later amendment in 1999 reducing the rate of premium for the additional basement would not be applicable to the cases in which the permission was sought and granted prior to the date of reduction.
3. Heard the learned counsel for the parties. The learned Senior Counsel for the petitioners vehemently contended that MMRDA is a State within the meaning of Article 12 of the Constitution of India and the agreement entered into between the petitioners and the respondent No.1 - MMRDA amounts to making a grant of the Government land and in view of the provisions of Section 3 of the ::: Downloaded on - 09/06/2013 15:39:42 ::: 6 Government Grants Act, 1895 notwithstanding any rule of law, statute or enactment to the contrary, the terms of the Grant shall be valid and effective according to their tenor and any rule or regulation to the contrary would not affect the terms of the Grant. According to the learned Counsel, as per the terms of the Grant i.e. the agreement, the premium was to be 5% of the lease premium for the additional basement area and therefore any amendment in the Regulations would not affect the said terms of the contract and the respondents cannot claim premium at a rate higher than 5% as contemplated by the terms of the agreement.
4. On the other hand, the learned Counsel for the respondents contended that the provisions of the Government Grant Act have no application to the facts of the present case because the land was not given in grant either by or on behalf of the Government to the petitioner. He contended that the land was granted to the respondent no.1, which is a body corporate independent of the State Government and the respondent No.1 had entered into an agreement with the petitioner to lease out the land and as per the agreement, initially only licence was given to the petitioners to enter and occupy the land for a period of three years. This does not amount to grant of land by the Government and therefore the provisions of section 3 of the Government grants Act cannot be applicable. It is contended that the respondent No.1 was acting in dual capacity as lessor as well as Local Authority ::: Downloaded on - 09/06/2013 15:39:42 ::: 7 under the laws . It would be entitled to collect the lease premium as per the terms of the contract in the capacity of lessor. However, collection of premium for additional basement area at the rate of 20%, during the relevant period, was a statutory requirement and the amount was to be paid to the respondent No.1 not as a landlord or lessor, but as the Local Authority. The learned Counsel contended that the terms of the agreement contrary to the statutory provisions could not operate as promissory estoppel.
5. To appreciate the arguments advanced by the learned Counsel for the rival parties, it would be necessary to take note of certain facts and the provisions of the different Acts. The Bombay (Mumbai) Metropolitan Region Development Authority Act, 1974 came into force on 26.1.1975. Section 3(1) of the Act provided that the State Government shall by notification in the Official Gazette, establish for the purposes of this Act an authority to be called "The Mumbai Metropolitan Region Development Authority". Sub-section (2) of Section 3 declares that the said Metropolitan Authority shall be a body corporate, having perpetual succession and a common seal, with power, subject to the provisions of the Act, to acquire, hold and dispose of property, movable as well as immovable and to contract and it may sue or be sued by its corporate name. Sub-section (3) declares that the Metropolitan Authority shall be deemed to be a local authority ::: Downloaded on - 09/06/2013 15:39:42 ::: 8 within the meaning of the term "local authority" as defined in the Bombay General Act, 1904. Section 4 provides for composition of the Metropolitan Authority. It shall consist of seventeen members, including Minister for Urban Development, Minister for Housing, the Mayor of the Mumbai Municipal Corporation, Chairman, Standing Committee of the Municipal Corporation, Chief Secretary to the Government of Maharashtra, Managing Director, CIDCO and the Metropolitan Commissioner, besides other members.
6. For disposal of lands held by the MMRDA, Regulations known as "Mumbai Metropolitan Region Development Authority (Disposal of Land) Regulations 1977 came to be adopted and notified. Under Regulation 4, the MMRDA may dispose of the land by (i) holding public auction, (ii) inviting tenders by public advertisements, (iii) by making offers to or accepting offers from the Government, Local Authority or Public Sector Undertaking or (iv) making offers or accepting offers from a public charitable trust and (v) inviting applications by public advertisement on the basis of predetermined premium and/or other considerations as it may determine from time to time. As per Regulation 6, where the Authority determines to dispose to dispose of any land by inviting public tenders or by accepting offers from the Government, Local Authority or Public Sector Undertaking, there shall be presented a tender or an ::: Downloaded on - 09/06/2013 15:39:42 ::: 9 offer in Form `B'. Regulation 7 provides that where the Authority determines to dispose of land by making offers to the Government, Local Authority or Public Sector Undertaking, the offers shall be made by the Metropolitan Commissioner in such form as he may decide , incorporating the terms and conditions of the offer determined by the Authority and the offers shall remain open and valid for acceptance for a period of 30 days and shall lapse if it remains unaccepted by the expiry of that period. However, the Metropolitan Commissioner may renew any lapsed offer on an additional condition that the Government, Local Authority or the Public Sector Undertaking, as the case may be, shall pay interest at the rate of 18% per annum over the premium specified in the lapsed offer. Such renewal has to be made within three months only. Regulation 9 provides that half of the premium shall be paid within one month and the balance within two months thereafter. However, in case of the Government, the first half of the premium may be paid within two months. These Regulations make it clear that when MMRDA wants to dispose of its land or property, it may dispose of in different manners, including offer to the Government and the Government may accept the offer within one month or within extended period by paying interest at the rate of 18% on the premium. The Government has to make payment of half of the premium within two months and the balance within further two months. From these Regulations, it becomes clear that even the Government cannot take back the land ::: Downloaded on - 09/06/2013 15:39:42 ::: 10 from the MMRDA without making payment of the premium and that too after acceptance of the offer with certain terms and conditions.
7. Admittedly, the Government of Maharashtra sanctioned and granted 180.162 Hectares of the Government land situated at Bandra-Kurla Complex to respondent No.1 as per the Memorandum dated 20.2.1985 for development of that area as International Finance & Business District/Centre. On 10.5.1985, the Additional Collector, Bombay Suburban District, passed an order and handed over possession of the said land to respondent No.1. The order dated 10.5.1985 reveals that the respondent No.1 was required to pay occupancy price of the said land at the rate of Rs.500/- per square mtr. for the gross area of the land in its undeveloped and unreclaimed condition. Part of occupancy price was to be paid immediately and the balance was to be paid after reclamation at double of the balance amount. Accordingly, the entries were taken in Form 7, 7A and 12 i.e. Record of Rights in favour of the respondent No.1. Thus, the grant was made by the Government in favour of respondent No.1 under the Memorandum dated 20.2.1985 and order dated 10.5.1985.
8. Sections 2 and 3 of the Government Grants Act, 1895 read as follows :-
::: Downloaded on - 09/06/2013 15:39:42 ::: 11"2. Transfer of Property Act, 1882, not to apply to Government grants - Nothing in the Transfer of Property Act, 1882, contained shall apply or be deemed ever to have applied to any grant or other transfer of land or of any interest therein heretofore made or hereafter to be made by or on behalf of the Government to, or in favour of, any person whomsoever; but every such grant and transfer shall be construed and take effect as if the said Act had not been passed."
"3. Government grants to take effect according to their tenor - All provisions, restrictions, conditions and limitations over contained in any such grant or transfer as aforesaid shall be valid and the effect according to their tenor, any rule of law, statute or enactment of the Legislature to the contrary notwithstanding."
From the language of Section 2, it is clear that the provisions of the Transfer of Property act shall not be applicable to any grant or other transfer of land or of any interest therein to be made by or on behalf of the Government . From this, it is clear that the grant has to be made by and on behalf of the Government and not by anybody else. When such a grant is made, all the provisions, restrictions, conditions and limitations contained in any such grant or transfer shall be valid and effective according to their tenor notwithstanding any rule of law, statute or enactment to the contrary.
::: Downloaded on - 09/06/2013 15:39:42 ::: 129. In the present case, as noted above, the land was granted by the Government in favour of the respondent No.1 in 1985 within the meaning of the Government Grants Act and the respondent No.1 was a grantee for the valuable consideration i.e. occupancy price fixed in the order dated 10.5.1985. In view of the provisions of sub-section (2) of Section 3 of the MMRDA Act, the respondent No.1, being a body corporate having perpetual succession and common seal has a power to acquire, hold and dispose of property, movable as well as immovable and also to enter into contracts. In view of the provisions of the Mumbai Metropolitan Region Development Authority (Disposal of Land) Regulations as noted above , even the Government cannot take back the land from the respondent No.1 without following the procedure laid down in the said Regulations. Even the Government has to make payment if it wants to take back some land from the MMRDA. In view of this, it is clear that the respondent No.1 does not hold the land for and on behalf of the Government of Maharashtra. Even though the respondent No.1, being a local authority, may be a "State" within the meaning of Article 12 of the Constitution of India, it cannot be equated with the Government of Maharashtra either under the Constitution of India or within the meaning of Government Grants Act, 1895. It entered into contract with the petitioners as owner of the land as a body corporate, independent of the Government of Maharashtra Therefore ::: Downloaded on - 09/06/2013 15:39:42 ::: 13 when the respondent No.1 entered into an agreement with the petitioner to lease out the land, it did not grant the land to the petitioner for or on behalf of the Government. Therefore, it must be held that under the said agreement for lease, the land was not granted to the petitioner by or on behalf of the Government within the meaning of Section 2 of the Government Grants Act.
10. The respondent No.1 in the given case has dual capacity - one as a landlord or lessor and another as a local authority under the provisions of MMRDA Act. The Regulations are made by following the provisions of MMRDA Act, 1974 and the MRTP Act and have statutory force. Government resolution dated 14.10.1994 shows that certain minor modifications were made in the General Development Control Regulations as per the proposal from the MMRDA being the Special Planning Authority and Local Authority and as per this G.R., Regulation 4A(i)(e)(iii) was inserted in the General Development Control Regulations. Sub-clause (e) of Regulation 4A(i) made provision for area of basement to be used for the vehicular parking. It provided that the additional basement area would be permitted subject to premium of 20% of lease premium paid by the allottee and it shall be charged by the MMRDA while granting permission for additional area of basement. Thus, as per this newly added regulation, charging the premium at the rate of 20% of the lease premium was a ::: Downloaded on - 09/06/2013 15:39:42 ::: 14 statutory requirement and the respondent No.1 in the capacity of the Local Authority was bound to charge the premium at the rate of 20%. This being the statutory requirement, the terms of private agreement between the parties, contrary to the statutory provisions, would not be binding. While the lease premium would be charged by the respondent No.1 in the capacity of lessor or landlord, the premium for additional basement would be charged as a statutory charge under the Regulations. As the agreement of lease between the petitioner No.1 and respondent No.1 does not amount to Government grant within the meaning of the Government Grants Act, the terms of the said agreement cannot be immune from the applicability of the statutory provisions contrary to the terms of the contract.
11. The learned Counsel for the respondent no.1 contended that the doctrine of promissory estoppel cannot be invoked to compel the public bodies or the Government to carry out a promise which is contrary to law and he is supported by Shabi Construction Company vs. City & Industrial Development Corporation and another (1995) 4 SCC 301 as well as Pune Municipal Corporation and another vs. Promoters and Builders Association and another (2004) 10 SCC 796. The learned Counsel for the petitioners fairly conceded this legal position. If it would be the Government grant within the meaning of the ::: Downloaded on - 09/06/2013 15:39:42 ::: 15 Government Grants Act, the terms of the contract would be binding as per its tenor notwithstanding any provisions of law to the contrary, but for the reasons given above the provisions of the Government Grants act cannot be invoked. Even though the parties are bound by the terms of the agreement, still the terms of the agreement which are contrary to the provisions of law or any statutory requirements, cannot be complied with.
12.Coming o the facts of the case, the record reveals that firstly, on 31.10.1996, the petitioners made an application for permission for construction of Diaphragm Wall and for use of additional basement on payment of premium. On 15.11.1996, the permission was granted by the respondent No.1 and the petitioners were called upon to pay the amount of Rs.4,26,23,501/- as premium for additional basement.
Admittedly, that was equivalent to 20% of the lease premium for the basement area in terms of the Regulation in force at that time. Several representations were made by the petitioners to charge at the rate of 5%, but that was not accepted and on 20.1.1998, the petitioners made payment as per demand towards premium for additional basement at the rate of 20%. The record reveals that first commencement certificate was issued by the respondent No.1 on 9.3.1998 and the second commencement certificate dated 10.7.1998 was issued for office building upto plinth level only on request of the petitioners. Both these commencement ::: Downloaded on - 09/06/2013 15:39:42 ::: 16 certificates reveal that they would be valid for one year from the date of issue.
The Intimation of Disapproval under Section 346 of the Mumbai Municipal Corporation Act was issued by the Municipal Corporation on 30.10.1998 and thus the permission was granted subject to certain conditions stated therein. On 17.12.1999, the Municipal Corporation addressed a letter granting no objection to carry out the work as per the amended plan. The respondent No.1 by letter dated 8.6.2001 extended the period for completion of construction of building by three years with effect from 8.2.2001 when the earlier period of three years had expired.
That letter clearly shows that the permission was granted as per resolution dated 20.3.1998 and the construction was to be completed by 8.3.2001. Merely because the petitioner made certain amendments in the plan and sought necessary permission from the Municipal Corporation which took some time and therefore, it could not complete the construction within the specified period and on its request, the period for construction was extended by the respondent No.1, it does not mean that the petitioner was granted permission to use additional basement area for the first time after 15.1.1999 when the rates were again reduced.
Admittedly, the said Regulation was amended by Notification dated 15.1.1999 as per the resolution dated 14.2.1997 and the premium amount was reduced from 20% to 5% again. However, during the period from 14.10.1994 till 14.1.1999, the rate was 20%. The record reveals that the petitioner made an application seeking ::: Downloaded on - 09/06/2013 15:39:42 ::: 17 permission to use the additional basement area and that permission was granted during the period when as per the Regulation 4A(i)(e)(iii) the respondent No.1 was statutorily required to charge premium at the rate of 20% of the lease premium. The learned Counsel for the petitioner contended that even if permission was granted during the relevant period of 14.10.1994 to 15.1.1999, in view of the fact that the premium amount was reduced to 5% on the bass of resolution dated 14.2.1997, there was no justification to charge premium from the petitioners at the rate of 20%. We are not impressed by this contention. The respondent no.1 was bound to charge the premium as per the provisions of the Regulations as applicable during the relevant period because the amendment dated 15.1.1999 does not show that it had any retrospective effect.
13 Taking into consideration the facts and circumstances and the legal position, we find no fault with the respondent charging premium at rate of 20%.
In view of this, the claim of the petitioner for refund of the premium over and above 5% cannot be justified.
14. For the aforesaid reasons, the Petition stands dismissed. Rule discharged.
(J.H.BHATIA,J.) (F.I.REBELLO,J.)
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