Bombay High Court
Avarsekar And Sons Pvt. Ltd. And Kishore ... vs The Collector And 2 Others on 13 October, 2017
Author: Manjula Chellur
Bench: Manjula Chellur, N.M. Jamdar
1 WP-859-17
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO.859 OF 2017
AVARSEKAR & SONS PVT. LTD
& ANR .. PETITIONERS
Versus
THE COLLECTOR AND OTHERS .. RESPONDENTS
...
Mr.Aspi Chinoy, Sr. Advocate with Mr.Ashish Kamat, Aseem
Naphade, Ms.Anuja Jhunjhunwala and Purvi Doctor i/b Naik
Naik & Co. for the petitioners.
Mr.Nikhil Sakhardande, Special Counsel with Pralhad
Paranjape, Counsel with Ms.Geeta Shastri, Addl. G.P for the
State.
CORAM: DR. MANJULA CHELLUR, CJ. &
N.M. JAMDAR, J.
RESERVED ON : 20th JUNE, 2017
PRONOUNCED ON : 13th OCTOBER, 2017
JUDGMENT (Per Dr.MANJULA CHELLUR, CJ):
1 Writ Petition is filed challenging the impugned demand dated 23/01/2009, another demand notice dated 16/1/2017 and impugned order dated 10/02/2017 directing Tilak ::: Uploaded on - 14/10/2017 ::: Downloaded on - 15/10/2017 01:35:36 ::: 2 WP-859-17 and demanding the petitioner to pay the revised rent with effect from 2007 as well as accrued interest on the arrears of rent.
2 In order to understand the grievance of the petitioner, it would be just and proper to narrate few facts that led to the filing of the present Writ Petition. The subject matter of the Writ Petition, the property in question was owned by Smt. Mary Viers who was of unsound mind, but was also sole surviving owner. The Collector became in- charge of the subject matter under the Bombay Court of Wards Act, 1905.
3 The said property came to be leased to one Mr.Abdul Gani. Legal heirs of said Abdul Gani entered into development agreement in favour of one Avarsekar & Sons Pvt.Ltd. They also executed Power of Attorney in favour of said Company. There is no dispute so far as these facts. From time to time, the petitioners had sought renewal of the lease and the same was accorded. Similarly, Government of Tilak ::: Uploaded on - 14/10/2017 ::: Downloaded on - 15/10/2017 01:35:36 ::: 3 WP-859-17 Maharashtra confirmed the request for renewal of the lease. In 1995, after confirmation of the request for renewal of the lease in favour of the petitioners, the Collector offered the lease at a valuation of Rs.4,82,96,000/- and rental calculation at 15% on the said valuation thereon. On 30 th October 1995, the petitioners represented to the Government contending that the rental could not be fixed on the basis of the valuation of vacant unencumbered land since the land was fully encroached upon. Accordingly, Government informed the Collector that the valuation on the basis of unencumbered vacant land was not justified since land was fully encumbered with numerous chawls, about 450 tenements who had to be rehabilitated by accommodating them in accommodation of 270 sq.ft. each. The collector consequently revised the value of the property at Rs.1,30,44,000 1/3 rd of the original value and so also fixed the rent at Rs.19,56,000/- at 15% of the value in terms of Exhibit-F. 4 On 25th April 1997, an order for renewal of the lease of the subject property came into existence for a period Tilak ::: Uploaded on - 14/10/2017 ::: Downloaded on - 15/10/2017 01:35:36 ::: 4 WP-859-17 of 30 years with effect from 1st May 1997. The final valuation was fixed at Rs.1,30,44,000/- and lease rental at 15% coming to Rs.19,56,000 per annum.
5 However, the said renewed lease deed stipulated that the Manager of Court, reserved his right to revise the lease rent after 10 years. It was also made clear that if the property were to be developed, it would be the sole responsibility of the lessee i.e. the petitioners to ensure rehabilitation of the tenants residing on the property, and that the slum dwellers were to be given tenements of 270 sq.ft each free of cost.
6 Between 1997 to 2009, the petitioners have been pursuing the redevelopment of the suit property by approaching the concerned authority involving huge money apart from paying annual rental at Rs.19,56,000/- from 1997 onwards.
Tilak ::: Uploaded on - 14/10/2017 ::: Downloaded on - 15/10/2017 01:35:36 ::: 5 WP-859-17 7 When things stood as stated above, by an order dated 23rd January 2009, the Collector's office revised the valuation of the property by 20 times demanding Rs.28,54,55,160/- as if property was unencumbered. Further, demanded payment of lease rental of Rs.3,28,27,343/- per annum as against Rs.19,56,000/-. On 24 th February 2009, petitioners raised their grievance contending that the increase in the valuation of the property by 27 times is irrational and unfair. They repeated their grievance by another letter dated 29th September 2010 pointing out that the land was fully occupied and encumbered, therefore, there was no justification to fix the lease amount on the basis of valuation of vacant encumbered land. Between 2009 to 2017, after the demand notice on 23rd January 2009 by the Collector's office, nothing seems to have happened, except Collector's office issuing the notice in 2012, 2016 and 2017 requiring payment of rent at the existing rate of Rs.19,56,000/- per annum. The respondents issued unqualified receipts of the said payments made by the petitioner. The said demand notices are at Exhibit-P, T and V. Tilak ::: Uploaded on - 14/10/2017 ::: Downloaded on - 15/10/2017 01:35:36 ::: 6 WP-859-17 8 It is further contended on behalf of the petitioner, that by impugned demand notices dated 3rd January 2017 and 16th January 2017 demanding enhanced lease rental @ Rs.3,28,27,343/- with retrospective effect from 1/5/2007 to 30/4/2017 aggregating to a sum of Rs.31.26 crore after adjusting the annual rents which were duly paid @ Rs.19,56,000/- from 2007 onwards to 2015. That apart, they also demanded interest on the alleged arrears of increased rent which came to 19.98 crore. This, again is based on revision of the valuation of the property as if it was open and unencumbered property.
9 Subsequently, on the representations made by the petitioners on 27th January 2017, petitioners were given a perfunctory hearing for about 15 minutes. Petitioners approached the Court by filing the present Writ Petition. By an interim order dtd 1st February 2017, directions were given to the respondent not to take any coercive steps. However, respondents were permitted to continue the hearing of the matter in accordance with law.
Tilak ::: Uploaded on - 14/10/2017 ::: Downloaded on - 15/10/2017 01:35:36 ::: 7 WP-859-17 10 On 10th February 2017 based on the formal 15 minutes hearing as stated above, it is alleged that Collector passed the impugned order totally ignoring the essential points raised by the petitioners without assigning any reasons why demand notices for 2012, 2016 and 2017 were sent demanding Rs.19,56,000/- as annual rent for each year and why it was received without any objection. 11 As against this, on behalf of respondents, Superintendent, City Survey and Land Records, Mumbai has filed reply affidavit where the respondents have taken a stand that the contention of the petitioners that they were not given proper hearing on 27th January 2017, and were given 15 minutes time to submit records, is all false and denied. According to them, without even waiting for the orders of the second respondent, petitioners have moved the Court in haste and the recourse open to the petitioners is to file Appeal under Section 274 of Maharashtra Land Revenue Code. So far as the nature of the property being held as guardian under Tilak ::: Uploaded on - 14/10/2017 ::: Downloaded on - 15/10/2017 01:35:36 ::: 8 WP-859-17 Court of Wards Act, 1905, there is no denial. So also continuation of lease in favour of legal heirs of Abdul Gani Ali Saheb and others for a period of 30 years on certain terms and conditions, is also not denied. According to them, one of the important clauses of the revised lease is that ground rents will be revised after every 10 years by Collector, Mumbai city. There is categorical agreement to this effect by letter dated 21st April 1997 on behalf of the petitioners. The lands were leased for a period of 30 years from 1 st May 1997, and in the order dated 25th April 1997, second respondent made it clear that ground rent will be revised after every 10 years. This order, so also the terms and conditions of the revised lease, was never questioned by the petitioner, and therefore, according to the respondents, there is no justification in the stand now taken by the petitioners.
12 It is further contended that the revised rent was calculated as per the Government Resolution dated 21 st July 2007. The valuation of the land was fixed at Rs.28,54,55,160/- as per the market rate in the year 2007. Tilak ::: Uploaded on - 14/10/2017 ::: Downloaded on - 15/10/2017 01:35:36 ::: 9 WP-859-17 Accordingly, the ground rent was calculated. According to the respondents, since lease holders did not pay the amount of revised ground rent, fresh notice was issued on 3rd January 2017 to pay revised ground rent as per the demand notice dated 23rd January 2009 along with interest and the representation was filed on 16th January 2017. After hearing, the petitioner on 27th January 2017, time was allowed for producing the documents before the second respondent till 30th January 2017. Thereafter, necessary orders were passed on 10th February 2017.
13 It is further contended that mere acceptance of yearly rent of Rupees Nineteen Lakhs and odd paid by the petitioners do not mean that revised lease rent as per notice dated 23rd January 2009 will not be implemented. Therefore, they contend that by the undertaking and affidavit dated 24 th January 1997 given by the petitioners, and the order dated 25th April 1997, Collector, Mumbai City, they have the rights to revise ground rent and the same was done in 2009. Inspite of being aware of the said fact that they are obliged to pay the Tilak ::: Uploaded on - 14/10/2017 ::: Downloaded on - 15/10/2017 01:35:36 ::: 10 WP-859-17 revised ground rent after every 10 years, petitioners have come with the false claim before this Court. Accordingly, they seek for dismissal of the petition.
14 In rejoinder, the petitioners contend that there is no provision for enhancement of lease rent in respect of the land in question with retrospective effect,that too after accepting the annual rents paid by the petitioners. Notice dated 23rd January 2009 was very much challenged by the petitioners by letter dated 24th February 2009 and 29th September 2010 wherein several contentions were raised. Having received the lease amount from 1st May 2008 till December 2016 as per the orders dated 25th April 1997, the respondents have abandoned the right to revise the lease amount. Even otherwise, with retrospective effect, it ought not to have enhanced.
15 So far as the orders of the second respondent, dated 10th February 2017, it cannot be sustained since the non-consideration of petitioners' case in the right perspective Tilak ::: Uploaded on - 14/10/2017 ::: Downloaded on - 15/10/2017 01:35:36 ::: 11 WP-859-17 by a perfunctory hearing for about 15 minutes, it can never be called as meaningful hearing.
16 The undisputed facts in the present case are the property in question, is the subject matter attracting provisions of Court of Wards Act, 1905, and the Collector concerned is in-charge of the said property. The property in question is held by the petitioners by virtue of a lease executed in favour of Mr.Abdul Gani whose legal representative entered into development agreement with the Petitioner company. Petitioner company is also acting as Power of Attorney of the lease holder. The lease of the property came to be renewed from time to time. The controversy was with regard to valuation of the property since the property was fully encroached upon. Accordingly, valuation was re-fixed for the purpose of lease rental, but not on the basis of encumbered vacant land. The responsibility of the lessee as undertaken by the petitioner is rehabilitation of 450 tenements by accommodating them 270 sq.feet each. , Tilak ::: Uploaded on - 14/10/2017 ::: Downloaded on - 15/10/2017 01:35:37 ::: 12 WP-859-17 17 It is not in dispute that the renewal lease deed dated 25th April 1997 for a period of 30 years with effect from 1st May 1997 which clearly stipulates that the Manager of Court reserves his right to revise the lease rent after every 10 years. It also says that the lessee is responsible entirely for the rehabilitation of tenants and also slum dwellers in the said property.
18 Till 2009, according to the petitioners, they were pursuing the redevelopment by approaching the concerned authorities, and have spent huge money apart from annual rentals from 1997 onwards.
19 The grievance was with regard to revised valuation of the property made by order dated 23 rd January 2009. According to the petitioners, this was again on the assumption that the property is unencumbered. Apart from revising the value arbitrarily, lease rental per annum was also arbitrarily evaluated, is the contention of the petitioner. Tilak ::: Uploaded on - 14/10/2017 ::: Downloaded on - 15/10/2017 01:35:37 ::: 13 WP-859-17 Apparently, petitioners seem to have raised grievance, with regard to this revised valuation of the property by 20 times as well as increase in the lease rental by several letters written to the concerned authority from time to time, but there was no response. The petitioners are now taking shelter and protection because of notice said to have been sent from Collector's office in the years 2012, 2016, 2017 demanding payment of lease rent at Rs.19,56,000/- per annum instead of Rs.3,28,27,343/- which came to be made on 23 rd September 2009. Present petitioners now take a stand that having issued unqualified receipts for the said payments, there was no justification to demand enhanced lease rental with retrospective effect from 1st May 2007 to 30th April 2017. They also complain perfunctory hearing being given to them before passing the impugned order. During pendency of this writ petition, a direction was given to the respondent authorities not to take any coercive steps. Subsequently, the impugned order came to be passed by the Collector which is under challenge.
Tilak ::: Uploaded on - 14/10/2017 ::: Downloaded on - 15/10/2017 01:35:37 ::: 14 WP-859-17 20 Apparently, there is no mentioning why demand notices for the years 2012, 2016 and 2017 were sent, demanding Rs.19,56,000/- inspite of demand made on 23 rd January 2009 for Rs.3,28,27,343/- lease rental per annum. There is nothing on record which shows that any decision was taken on the representations made by the petitioners between 2009 to 2017. Why such demand notices for rent at Rs.19,56,000/- was issued, is also not explained in the impugned order. No doubt, the petitioners could have approached by filing an Appeal under Section 274 of Maharashtra Land Revenue Code. Since the matter was kept pending after granting interim relief, and further allowed the final order to be passed, we are disposing of the matter on merits.
21 So far as the revised lease that came to be made in the year 1997, Collector, Mumbai city has every authority to revise the lease rentals. This was not at all opposed, but on the other hand was agreed by a letter dated 21st April 1997 from the petitioners. The lands were leased for 30 years from Tilak ::: Uploaded on - 14/10/2017 ::: Downloaded on - 15/10/2017 01:35:37 ::: 15 WP-859-17 1st May 1997. Even in the order dated 25 th April 1997, second respondent clearly stated that rent will be revised after every 10 years. This was also not questioned by the petitioners i.e. the revision of lease rental at an interval of 10 years till completion of the lease for 30 years, will be made. When such terms were accepted by the petitioners, they were fully aware that they had the responsibility of developing the property by spending huge amounts, including the amounts towards rehabilitation of the slum dwellers. They had to make alternate arrangements for the tenants. There is no condition that the revision of lease rental would be at every 10 years only if the property is unencumbered. With their eyes wide open, the parties have agreed to the term of revision of lease rental at every 10 years after commencement of lease from 1st May 1997. Therefore, petitioners cannot object revision or enhancement of lease rental on the ground that the property is fully encroached upon. 22 However, we are of the opinion that in the impugned order, the Collector must have said why earlier Tilak ::: Uploaded on - 14/10/2017 ::: Downloaded on - 15/10/2017 01:35:37 ::: 16 WP-859-17 amount of lease rentals were demanded in 2012, 2016, 2017. There is possibility of lapses on the part of the officials of the second respondent in issuing such demand notice. However, in the absence of any decision on the representations made by the petitioners in response to the revision of the lease rental, by order dated 23rd January 2009, one has to opine that there was no active consideration of the matter on merits by the respondent authority. Hence, mere issuance of notices demanding earlier lease rental and giving unqualified receipts will not automatically imply that respondent authority has no power in terms of clauses of renewed lease of 1997 to revise the lease rental at an interval of 10 years. 23 In the light of above discussion and reasoning, we set aside the impugned order directing the respondent authority to consider the matter afresh in the light of our observations, after giving fair opportunity of being heard to the petitioners.
Tilak ::: Uploaded on - 14/10/2017 ::: Downloaded on - 15/10/2017 01:35:37 ::: 17 WP-859-17 24 The entire exercise shall be completed within three months from the date of receipt of copy of this order.
(N.M. JAMDAR, J) CHIEF JUSTICE
Tilak
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