Hansa Tubes Pvt. Ltd vs State Of Punjab & Ors on 29 September, 2014

[Cites 19, Cited by 1]

Punjab-Haryana High Court

Hansa Tubes Pvt. Ltd vs State Of Punjab & Ors on 29 September, 2014

Author: Amol Rattan Singh

Bench: Surya Kant, Amol Rattan Singh

IN THE HIGH COURT FOR THE STATES OF PUNJAB AND
HARYANA AT CHANDIGARH

Date of decision: September 29, 2014
1) CWP No.23053 of 2010

Hansa Tubes Pvt. Ltd.
...Petitioner
Versus
State of Punjab and others
...Respondents

2) CWP No.16689 of 2010
M/s PVP Entertainment Ltd.
...Petitioner
Versus
State of Punjab and others
...Respondents

CORAM: HON'BLE MR. JUSTICE SURYA KANT
HON'BLE MR. JUSTICE AMOL RATTAN SINGH

Present:- Mr. Arun Jain, Senior Advocate with
Mr. Avnish Mittal, Advocate
for the petitioner in both the petitions.

Mr. P.S. Bajwa, Addl. Advocate General, Punjab

Mr. Sanjeev Sharma, Senior Advocate with
Mr. Vikram Vir Sharda, Advocate
for respondent No.2-GMADA.

***
1. To be referred to the Reporters or not?
2. Whether the judgment should be reported in the
Digest?
***
Amol Rattan Singh, J.

DINESH 2014.11.04 15:12 1 I attest to the accuracy and integrity of this document Chandigarh

1. These two cases have been clubbed together as, in both of them, the demand raised by the respondent authorities from the petitioner company in each of the petitions, with regard to change of land user and external development charges etc. have been challenged, on primarily two grounds that: (i) such demand is contrary to the Industrial Policies of the Government of either 2003 or/and 2009 and (ii) such demands are also contrary to the agreements signed between the Government and each company (separately). Otherwise, there is no connection, either between the two companies or in the projects that are subject matter of the separate agreements signed by each company.

We first take up the case of M/s Hansa Tubes Pvt. Ltd. (CWP No.23053 of 2010) and thereafter, the second case of M/s PVP Entertainment Ltd. (CWP No.16689 of 2010) would be seen on its own merits.

CWP No.23053 of 2010

2. The petitioner company in this case, has challenged the demand notice/letter dated 09.10.2009, issued by the Competent Authority, i.e. the Chief Administrator, Greater Mohali Area Development Authority (GMADA), by which a demand of Rs.72.3 lacs has been made, of which DINESH 2014.11.04 15:12 2 I attest to the accuracy and integrity of this document Chandigarh Rs.18.08 lacs (25% of the total amount) was to be paid within 30 days of the issuance of the letter. The balance was payable in 6 annual installments, along with 10% compound interest.

The petition further seeks a writ of mandamus directing the respondents to implement the agreement dated 15.10.2007 in letter and spirit and further, to refund Rs.65.975 lacs already deposited by way of charges for Change of Land User (CLU), External Development Charges (EDC), Social Infrastructure Fund (SIF) and Urban Development Fund.

3. The background facts as given in the petition are that, pursuant to a policy framed by the State of Punjab to regulate unauthorized construction and also declaring the Derabassi area as a Free Enterprises Zone (FEZ) in the year 2003, the petitioner-company applied, on 20.09.2006, for the grant of a Special Package of Incentives to set up an Industrial Park, with an investment of Rs.132 crores, over an area of 50 acres of land in the FEZ.

The application was considered by the Empowered Committee under the Industrial Policy of 2003 which approved the petitioners' proposal on 05.10.2006 and in the process, granted some concessions to the petitioner, the major ones being the following, as conveyed to the DINESH 2014.11.04 15:12 3 I attest to the accuracy and integrity of this document Chandigarh petitioners vide letter dated 15.11.2006, by the first respondent:-

"(a) As per the Industrial Policy 2003 exemption will be granted on 100% stamp duty and registration fee (excluding cess) on sale/transfer of built up space of the units or land in side the project area. Such exemption shall extend to the project area up to first sale of developed area/plot/built up space to any party by them or to pay its affiliate. There shall be no stamp duty on lease instrument of units located in the project area. Such exemption shall remain operative till the completion of the entire project as per the agreement.

(b) The land use change in the area falling under the control of the Punjab Periphery Control Act shall be allowed without any charges levied by the Housing and Urban Development Department in accordance with the draft master layout plan of the periphery and periphery policy of the Government of Punjab. However, if any or whole part of land of the project area is not covered in any master plan or planning zone under PUDA Act, the land use thereof shall not be changed or amended later on and shall be incorporated as such and included in any future master plan or zoning which shall be prepared under the PUDA Act. The project shall not be advertised/launched and no money will be collected from general public for allotment of land/plot/flat/any space till such time the layout/zoning plans are cleared from the competent authority."

(c) Permission under Punjab State Tubewell Act, 1954 to dig Tubewell in project area for requirement of the project was allowed.

(d) Permission under the provision of Punjab Mines & Mineral Act shall be allowed with in the project area for works relating to development of the project. However, due charge will be payable.

(e) High-rise buildings upto 45 mtrs. shall be allowed subject to Air Safety Regulations, Traffic Circulation and Fire Safety Norms.

(f) Work contract tax on construction material required for the project shall be charged at minimum floor rate.

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(g) FAR of 2 shall be allowed for industrial and commercial purpose. However, the relevant building Bye-laws/regulations shall be applicable to the area. The guidelines issued by the Department of Industries & Commerce for Industrial Parks shall also be applicable.

(h) The State Government shall ensure that connectivity to power, roads, accessibility, communication, civic and other infrastructure upto project is provided within 240 days from the date the same is applied for to the concerned department/agency/authority/local body on fulfillment of various terms and conditions required in this regard at such rates/fee etc. which shall not be less favourable to them compared to similarly placed projects/customers. However, the proportionate cost of any infrastructure upgradation of the area where Industrial Park is proposed to be set up, incurred by the concerned Municipal Corporation/Committee/Department of PWD or other Government department or Agency shall be borne by the Company.

(i) The project of Industrial Park shall be exempted from PAPR Act. However, the layout and zoning plan shall be got cleared/approved from the Competent Authority which shall be deemed to be a license under PAPR Act 1995. The building plans shall also be got cleared from Competent Authority.

(j) 50% exemption from electricity duty at current rate for 5 years shall be allowed from the date of release of connection by PSEB.

(k) State government shall allow the company to connect the project area to the State Transport Network. The State Government shall also allow them to operate their own public transport system with in the project area and also for connecting the project area to the main urban center nearest to the project area subject to the fulfillment of required terms and conditions in this regard.

(l) The State government shall now allow hazardous industry as defined under Factories Act within 500 metres of the project area and DINESH 2014.11.04 15:12 5 I attest to the accuracy and integrity of this document Chandigarh industrial plots within the industrial park shall not have any hazardous industry.

(m) Pollution control Board shall grant NOC and consent to operate to the Green Category Industry to be located in the Industrial park in 30 days on fulfillment of all the required terms and conditions.

(n) No State Agency shall erect nay barrier or create hindrance in various connectivities which shall be allowed to the project except on the ground of major law and order problem or National Security considerations.

(o) The Department of Industries shall be the single Nodal Agency for facilitating the project and getting clearances etc. required for the unit for the project and the project area and will also get resolved various issues which will relate to the Government Departments or Punjab Government Public Sector Undertakings/Authority/Local Body."

4. Thereafter, an agreement was executed between the petitioner and the 1st respondent on 15.10.2007, in which the concessions granted herein above, were contained, ad verbatim, in paragraph 5, clause (v), thereof.

On 08.01.2009, the petitioners' request for Change of Land User, in respect of 50.13 acres of land was also accepted, however, with a rider that the petitioner shall deposit "CLU/EDC/Licence fee and all other charges levied or to be levied by the Housing and Urban Development Department from time to time."

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Vide the same letter, the respondents acknowledged that the petitioner had paid Rs.25,06,500/- on 24.12.2008 towards CLU charges.

The petitioner calls this an illegal charge, in the face of sub- clause (b) of clause (v), para 5, of the agreement dated 15.10.2007.

5. In the meanwhile, the petitioner-company, by letters dated 10.10.2008 and 11.10.2008, had sought to develop the entire area at its disposal into an Industrial Pocket and to also include therein 30 acres of its additional land. This proposal was also accepted on 16.12.2008 in a meeting chaired by the Chief Minister of Punjab, which was conveyed to the petitioner on 05.02.2009. This letter also referred to an amendment in respect of the concession on electricity duty exemption and stated that the approval was subject to signing of an agreement by the petitioner.

6. Thereafter, vide letter dated 24.02.2009, the 3rd respondent, i.e. the Chief Town Planner, Punjab, raised a demand of Rs.2,50,65,000/-, to be deposited with the 2nd respondent, i.e. GMADA, as a condition precedent to approval of the layout plan for the industrial park to be developed by the petitioner. Though, in the petition, the petitioner states that the demand was for 25% of Rs.2,50,65,000/-, however, a copy of the letter appended with the petition, shows that the demand was for an amount of DINESH 2014.11.04 15:12 7 I attest to the accuracy and integrity of this document Chandigarh Rs.2,50,65,000/- "being 25% of External Development Charges".

7. On 20.08.2009, the Chief Town Planner, Punjab (respondent No.3), vide a letter, informed the petitioner-company that permission for Change of Land User for an additional area measuring 15.37 acres had been approved in continuation of the earlier approval in respect of 50.13 acres of land. A large number of conditions were attached to the approval, as given in the letter. Obviously, this approval in respect of only 15.37 acres, was an interim measure, to final ratification of the earlier approval granted on 05.02.2009, for utilising 30 acres more, in addition to the agreement signed in respect of 50.13 acres. The additional 30 acres as already said, were approved subject to an agreement to be signed for the purpose.

8. The petitioner, thereafter, deposited Rs.18.08 lacs as External Development Charges and Rs.2.32 lacs as Urban Development Charges, on 12/13.10.2009, allegedly to save itself from any hindrance from completing the project in the specified time.

Though, in the petition, the petitioner has given a disjointed chronology of events, it is seen that this total amount of Rs.20.40 lacs (given as 20.39 lacs in the petition), was actually paid pursuant to letter dated 09.10.2009, which stated that out of the total amount of Rs.72.3 lacs DINESH 2014.11.04 15:12 8 I attest to the accuracy and integrity of this document Chandigarh by way of External Development Charges, 25% thereof, amounting to Rs.18.08 lacs, was payable within 30 days of the issuance of the letter and the remaining Rs.54.22 lacs could be paid in 6 equated bi-annual installments, along with 10% compound interest.

9. On 11.12.2009, the Chief Town Planner approved the layout plan for an area of 69985.48 sq. yds. (about 14.5 acres), subject to the 14 conditions contained in the approval letter.

10. However, eventually, a 2nd agreement in supersession of the agreement dated 15.10.2007, was inked between the Government and the petitioner company, on 26.03.2010.

11. After that, on 21.07.2010, respondent No.2 again raised a demand of Rs.17.1 lacs towards External Development Charges and Rs.3.42 lacs towards Social Infrastructure Fund, which, the petitioner company again deposited on 12.11.2010, allegedly with a right to recover, though no document containing a condition for such recovery has been annexed with the petition.

12. All the above demands raised by the respondents, have been described by the petitioner to be wholly illegal demands, contrary to the conditions of the agreement dated 15.10.2007, as also to the subsequent DINESH 2014.11.04 15:12 9 I attest to the accuracy and integrity of this document Chandigarh agreement dated 26.03.2010.

13. Prior to the above demands and deposits, the petitioner- company had written a letter to respondent No.2 on 16.04.2010 seeking waiver of the CLU and EDC charges, stating therein that the Government Policy for the (Chandigarh) Periphery Controlled Area and the Industrial Policies of the State Government, did not envisage such charges. The letter also referred to the agreement signed between the petitioner and the State Government, on 15.10.2007.

The relevant clause of the agreement, cited in the letter dated 16.04.2010, reads as follows:-

"As per Para (v) (b) The land use change in the area falling under the control of the Punjab Periphery Control Act shall be allowed without any charges levied by the Housing and Urban Development Department in accordance with the draft master layout plan of the periphery and periphery policy of the Government of Punjab."

14. It is, thus, alleged that the charges levied are in contravention of the Agreements signed between the petitioner and the State Government (respondent No.1), as the said agreements (allegedly) exempted the petitioner-company from the purview of the Punjab Apartment and Property Regulation Act, 1995 (in short the "Act of 1995"), CLU Charges, DINESH 2014.11.04 15:12 10 I attest to the accuracy and integrity of this document Chandigarh Stamp Duty and Registration Fee (excluding cess) on sale/transfer of built up space inside the project area up to the first sale of the developed area/plot/built up space, to any party, and also exempted the petitioner from External Development Charges and License Fee.

The last line mentioned, "External Development Charges and License Fee", are stated by the petitioner to be exempted charges, in view of exemption from the purview of the Act of 1995, in terms of Clause 5(v)(i) of the Agreement.

15. In support of its case, the petitioner further relies upon a judgment of this Court in the case of M/s Janta Land Promoters Ltd. Vs. State of Punjab and others, CWP No.11744 of 2008, decided on 23.11.2010, by which the petitioner therein, relying upon clauses in the agreement reached by it with the State Government, was held to be not liable to pay similar charges, as were sought to be levied by the respondents therein.

16. Before we come to the replies filed by the respondents, it is necessary to mention here that, on 21.01.2011, an order had been passed by this Court, directing the 2nd respondent to examine the case of the petitioner in the light of the above mentioned Division Bench judgment in the case of DINESH 2014.11.04 15:12 11 I attest to the accuracy and integrity of this document Chandigarh M/s Janta Land Promoters Ltd.

17. That order was eventually complied with only on 29.05.2012, when an affidavit of the Chief Administrator, GMADA, was filed, annexing therewith an order passed by him on 31.03.2012, holding that since the agreement with M/s Janta Land Promoters Ltd. was executed on 24.06.2005, when the Industrial Policy of 2003 was in operation and subsequent notifications and Industrial Policies had not come into force, the said decision was not applicable to the case of the petitioner, as the second agreement dated 26.03.2010, executed between the petitioner and the 1st respondent, was based on the Industrial Policy dated 07.10.2009, by which CLU charges and the License Fee would be applicable on the residential and commercial components of the Industrial Park, and External Development Charges on industries and Industrial Parks would be on actual basis.

18. Other than that, as per the order of the second respondent, even during operation of the first agreement between the petitioner and the State, dated 15.10.2007, a notification had been issued on 11.01.2008, prescribing the rates of External Development Charges, on the basis of which the demand of Rs.72.3 lacs had been raised and the petitioner had consequently deposited Rs.18.5 lacs on 12.10.2009. The petitioner had further deposited DINESH 2014.11.04 15:12 12 I attest to the accuracy and integrity of this document Chandigarh an amount of Rs.17.10 lacs as External Development Charges against a demand of Rs.113.95 lacs and had also deposited Rs.3.42 lacs towards the Social Infrastructure Fund on 02.11.2010, though Rs.96.85 lacs as External Development Charges remained un-deposited.

19. Subsequently, on 29.08.2012, an order had been passed by this Court, directing the parties to the petition to have instructions as to whether:

i) a separate order regarding the petitioners' claim on the basis of the agreement dated 15.10.2007, which was executed before issuance of the notification 11.01.2008 can be passed, in view of the decision in M/s Janta Land Promoters Ltd.

(supra);

ii) whether the claim of the petitioner on the basis of the other agreement executed on 26.03.2010, on the terms and conditions contained in the agreement dated 15.10.2007 could be decided separately; and

iii) as to why the petitioners' claim on the basis of certain promises contained in the Policy of the year 2009 be not separately adjudicated.

20. In response thereto, an order was passed on 01.11.2012 by the DINESH 2014.11.04 15:12 13 I attest to the accuracy and integrity of this document Chandigarh 2nd respondent, which, in effect, held that, as on the date of the order, only the agreement dated 26.03.2010 was in operation which was executed after the Industrial Policy of 2009 had come into force on 07.10.2009 and, though in Clauses 1, 3, 5 (iv)(a) of the Agreement dated 26.03.2010, the Industrial Policy of 2003 had been referred to, however, the same was wrongly mentioned because the said policy had already been superseded by the policy of 2009 and the previous policy had no relevance at the time of execution of the agreement dated 26.03.2010.

Consequently, the order stated that two separate orders need not be passed, as only the Policy of 2009 was applicable to the case of the petitioner.

Referring to condition 7.3 of the 2009 Policy, the order further states that the said clause specifically provides for charging of External Development Charges on Industrial Parks and Mega Projects approved for industries and, as such, the said policy cannot be construed as granting exemption from payment of such "legitimate charges" of the Government.

21. As regards the notification dated 11.01.2008, the order further holds that the said notification had prescribed the rates of External Development Charges for industries falling within the Greater Mohali Area DINESH 2014.11.04 15:12 14 I attest to the accuracy and integrity of this document Chandigarh @ Rs.15 lacs per acre and for projects falling in other local planning areas of the Chandigarh Periphery @ Rs.10 lacs per acre and for those projects falling in the Free Enterprise Zone @ Rs.5 lacs per acre. As such, since a part of the petitioners' project falls in the FEZ, Derabassi and partly in the Master Plan of Derabassi, it would be required to pay External Development Charges as per the notification.

22. On the issue of the case falling within the ratio of the judgment in the case of M/s Janta Land Promoters Ltd. (supra), the order again reiterated what the previous order had stated, that since that was a case falling under the 2003 Policy, there was no similarity between the two situations.

23. As regards the CLU charges, the Chief Administrator, GMADA, stated that waiver of such charges was not within his jurisdiction and the petitioner would be at liberty to represent to the Government in terms of condition 7.3 of the 2009 Policy.

All in all, the order again rejected the claim of the petitioner.

24. Other than these affidavits filed by the respondents, and orders passed during pendency of the petition, the contents of the replies filed by the 3 respondents, in response to the petition itself, essentially read as DINESH 2014.11.04 15:12 15 I attest to the accuracy and integrity of this document Chandigarh follows.

25. On behalf of GMADA, respondent No.2, it is stated in the reply dated 14.03.2011, that both the agreements between the petitioner and the 1st respondent, "have drawn their sanctity from the Industrial Policy of 2003 formulated by the State Govt. Punjab." Hence, the agreements cannot be read alone, i.e. in isolation from the 2003 policy, which has to be read along with the agreements.

Referring to the Policy of 2003, the reply states that as per Clause 10.4.1 thereof, a Mega Project would be exempted from the purview of the Punjab Apartment and Property Regulation Act, 1995, after assessment of the eligibility (of the applicant) by the Empowered Committee. In case the Committee so recommended, then a certificate to that effect would be issued by the Department of Industries. The said clause has been reproduced as under:-

"10.4.1: External Development Charges for Private Industrial Estate Developers.

"In order to facilitate and encourage private participation in Industrial Parks/Estate/Information Technology Park/Agro Parks/Special Economic Zones in the private or joint sector shall be exempted from the Punjab Apartment and Property Regulation Act, 1995 in accordance with the power vested with the State Government under Section 44(2) of the Act. To be entitled to avail of these benefits, the eligibility of each such park/estate/zone will be assessed and determined by the Empowered DINESH 2014.11.04 15:12 16 I attest to the accuracy and integrity of this document Chandigarh Committee for Industrial Approval. Upon approval of the Committee, the Department of Industries will issue an eligibility certificate."

As such, the reply further states, that even in the petition itself, the petitioner has not claimed that it was found eligible for such exemption by the Empowered Committee.

26. With regard to the Change of Land User charges, Clause 10.4.2 of the 2003 Policy is reproduced as follows:-

"Change of land use: Change of land use will not be required anywhere in the State except in the area falling within the municipal limits, Chandigarh Capital periphery or planning or controlled areas and along the notified schedule roads and bye passes (as and when notified by Department of Housing & Urban Development). However, in the case of Industrial (Parks?) being set up in the areas other than specified above, intimation by the Industries Department about the location of the proposed unit shall be sent to Chief Town Planner, Punjab, Department of Housing & Urban Development, so as to keep the data bank regarding land use updated."

It is stated that since the petitioners' project falls within the planned area of Derabassi, hence, permission for Change of Land is required, and that, further, even in the agreements it is nowhere suggested that the petitioner has been exempted from such charges.

27. The reply further states that the total area that falls within territory of GMADA is over 1200 sq. kms. and, as such, the development DINESH 2014.11.04 15:12 17 I attest to the accuracy and integrity of this document Chandigarh cost of such a large area rises to several thousand crores of rupees, which expenditure is initially incurred by the Authority and then recovered from the ultimate beneficiaries, where the land is directly allotted to individuals/groups/organisations. In the case of a private colonizer, the proportionate cost of development is recovered from the colonizer.

As such, it is stated in the reply, that if the development charges, as levied, are not recovered, GMADA would not be able to undertake developmental works in urban areas.

28. After the above preliminary submissions, on the merits of the petition, it has been stated that the 2003 Policy was framed in order to regulate unauthorized construction and to develop a Free Enterprise Zone promoting Mega Projects in the areas earmarked for industrial and residential use.

Other than that, the reply simply states that all charges levied are as per law.

Strangely, however, in para 15 of this reply, it is stated that the petitioner cannot claim benefit of the Industrial Policy of 2009 as the agreements dated 15.10.2007 and 26.03.2010 were executed pursuant to the policy of 2003.

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This, obviously, is in absolute contradiction to the stand taken by the Chief Administrator of the 2nd respondent, GMADA, in the orders subsequently passed by him upon directions of this Court, as have been referred to herein above, whereby it has been specifically held that it is the 2009 Policy and not the 2003 Policy which is applicable to the case of the petitioner.

29. In the reply filed by the State, respondent No.1, the essence of the reply is that the case of the petitioner was approved by the Empowered Committee in its meeting dated 05.10.2006, consequent upon which the agreement dated 15.10.2007 was executed, by which certain concessions, as given in the agreement, were granted and the "agreement was circulated to all concerned departments for issuance (sic) the relevant notifications/orders by answering respondent deponent."

The reply further holds that, as such, the petitioner has no cause of action.

Clauses 5(v)(b) and 5(v) (i), which have already been reproduced in the beginning of this judgment, have been reproduced in the reply.

30. As stated in the reply of respondent No.2, the reply of the 1st DINESH 2014.11.04 15:12 19 I attest to the accuracy and integrity of this document Chandigarh respondent also states that the Empowered Committee had cleared the revised proposal of the petitioner-company as per the Industrial Policy of 2003 in its meeting dated 16.12.2008, under the Chairmanship of the Chief Minister and a revised letter of intent was issued on 05.02.2009.

31. Thereafter, in response to the order of this Court, dated 29.08.2012, respondent No.1 also filed an additional reply on 14.12.2012, which again reiterated that the agreement dated 15.10.2007 was superseded by the agreement dated 26.03.2010 which was, therefore, the only agreement now in existence; the inference being that the earlier agreement of 15.10.2007 could not be relied upon by the petitioner to claim any benefit.

32. Importantly, the reply states that the difference between the original and the revised proposal of the petitioner, necessitating a fresh agreement, was that as per the earlier proposal approved by the Empowered Committee on 15.10.2006, a minimum of 60% of the area was to be developed as an industrial pocket and a maximum of 10% of the area as a commercial pocket and the remaining area as a residential pocket. However, in the revised proposal, the petitioner company sought increase of land from 50 to 80 acres to be developed 100% as an industrial park, which DINESH 2014.11.04 15:12 20 I attest to the accuracy and integrity of this document Chandigarh was approved by the Empowered Committee on 16.12.2008.

Thus, the stand of the State is that the earlier agreement having been superseded and the subsequent agreement having been executed on 26.03.2010, the notification dated 11.01.2008 would be applicable and as such, the demands raised by the impugned letters dated 09.10.2009 and 17.05.2010 are stated to be perfectly legal and valid demands.

33. The reply filed by the 3rd respondent, i.e. the Chief Town Planner, Punjab, only in respect of Change of Land User charges, states that the comparison made by the petitioner to the case of M/s Janta Land Promoters Ltd. (supra), is wholly misconceived, in view of the following comparative chart given made in the reply:

M/s Hansa Tubes Pvt. Ltd. CWP M/s Janta Land Promoters No.23053 of 2010 Ltd. CWP No.11744 of 2008 DINESH 2014.11.04 15:12 21 I attest to the accuracy and integrity of this document Chandigarh

1) The Mega Industrial Project of 1) The Industrial Park Project M/s Hansa Tubes was approved in of M/s Janta Land Promoters the meeting of Empowered Ltd. was approved in the Committee held on 05.10.2006 and meeting of Empowered agreement was signed with the Committee held on 28.04.2005 Government of Punjab through and agreement was signed with Department of Industries on the Government of Punjab 15.10.2007. through Department of Further the revised Industries on 24.06.2005.

             agreement             was       signed     in

             supersession of earlier agreement

             on 26.03.2010.




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2) The First CLU for Industrial 2) CLU was granted to M/s Park Project to the petitioner was Janta Land Promoter Ltd. for granted by this Department on Industrial Park project on dated 08.01.2009 and at that time 05.08.2005 and at that time Department of Housing there was no CLU charges as no Notification notification was existing at that No.17/17/01/5HG2/327 dated time. Moreover, it is clearly 11.01.2008 was applicable in mentioned in his CLU approval which CLU charges for industrial as below:

activity were defined and an "the Governor of Punjab is amount of Rs.25,06,500/- was pleased to permit change of land charged from the petitioner based use of the project land from the on this notification for an area of existing one to "Industrial 50.13 acres for which CLU was Estate" (including Industrial, granted. Moreover, there was no Residential and Commercial exemption of CLU charges in the uses, as per approved norms) in approval of CLU of the petitioner. the proposed Sectors of SAS Accordingly petitioner had Nagar (Mohali), District Ropar, deposited the CLU charges under in accordance with the layout Notification plan sanctioned by the Chief DINESH No.17/17/01/5HG2/327 2014.11.04 15:12 dated Town 23 Planner, Punjab, in I attest to the accuracy and integrity of this document Chandigarh 11.01.2008 vide DD No.521949 accordance with the Punjab dated 24.12.2008 for an area of Government, Department of

3) Clause No.5(v)(b) of First Clause No.5(iv)C of agreement Agreement and clause No.5(iv)(b) is reproduced as below:-

of revised agreement is reproduced 5(iv) C:-"The land use cahnge as below:-

in the area falling under the "The land use change in the control of the Punjab Periphery area falling under the control of the Punjab Periphery Control Act Control Act shall be allowed shall be allowed without any without any charges levied by charges levied by the Housing and the Housing and Urban Urban Development Department in accordance with the draft Development Department in master layout plan of the accordance with the draft periphery and periphery policy of master layout plan of the the Government of Punjab."

However the CLU charges periphery and periphery policy were taken from the petitioner of the government of Punjab."

based on the Department of However, it is submitted that Housing Notification at the time CLU was granted No.17/17/01/5HG2/327 dated to the promoter there was no 11.01.2008 as the site of the CLU charges as there was no petitioner falls in the Free notification regarding CLU Enterprises Zone (FEZ) of Charges was in force.

Master Plan Derabassi and part of it falls in Regional Plan DINESH 2014.11.04 15:12 24 I attest to the accuracy and GMADA integrity of this document Chandigarh where the said notification was applicable in

34. Thus, as per the above chart, in essence, the difference between the case of the petitioner and that of M/s Janta Land Promoters Ltd., with regard to CLU charges is essentially that in the case of the latter, the approval by the Empowered Committee and the agreement were signed before the notification dated 11.01.2008 but in the case of the petitioner, the second agreement dated 26.03.2010, substituted the earlier agreement, dated 15.10.2007, by which time the notification of 2008 had been issued and further, that the CLU for the industrial project of the petitioner was granted on 08.01.2009 , which is also a date after 11.01.2008.

However, in view of the global "melt down", the Government had decided not to levy any charges for grant of CLU from industries, vide notification dated 18.06.2009 and, as such, for the additional area of 15.37 acres added by the petitioner later, for which the CLU was granted on 20.08.2009, no charges were levied.

Further, the reply reiterates what was stated by the other two respondents also, that the petitioners' site falls partly in the Free Enterprise Zone of Master Plan, Derabassi and partly in the Regional Plan Area of GMADA, as such, as per Clause 5(v)(b) of the first agreement and 5(iv)(b) of the second agreement, it was charged for change of land user, as per DINESH 2014.11.04 15:12 25 I attest to the accuracy and integrity of this document Chandigarh applicable rates.

35. It needs to be noted that the petition does not refer to any fault in the rates, but only to the applicability itself.

36. The above, thus, details the pleadings before this Court giving the respective stand of the parties to the lis.

During arguments, Mr. Avnish Mittal, learned counsel for the petitioner, drew attention to certain clauses in the two agreements, which we shall now deal with.

He first drew attention to the first paragraph of both the agreements, dated 15.10.2007 and 26.03.2010, which states as under:

"Whereas the State Government with a view to attract new investment in Punjab has under Industrial Policy 2003 provided for consideration and determination of a special package of incentives for new as well as existing industrial units under taking expansion through an Empowered Committee duly notified under the said policy for this purpose, provided fixed capital investment in the new unit or expansion is Rs.100 crore and above."

He then pointed to sub-clauses (a) and (b) of Clause (iv) of Paragraph 5 of the second agreement, which though already reproduced earlier, nevertheless, read as under:

a) As per the Industrial Policy 2003 exemption will be granted on 100% stamp duty and registration fee (excluding cess) on sale/transfer of built up space of the units or land in side the project area. Such exemption shall extend to the project area up to first sale of developed area/plot/built DINESH 2014.11.04 15:12 26 I attest to the accuracy and integrity of this document Chandigarh up space to any party by them or to pay of its affiliate. There shall be no stamp duty on lease instrument of units located in the project area. Such exemption shall remain operative till the completion of the entire project as per the agreement.

b) The land use change in the area falling under the control of the Punjab Periphery Control Act shall be allowed without any charges levied by the Housing and Urban Development Department in accordance with the draft master layout plan of the periphery and periphery policy of the Government of Punjab. However, if any or whole part of land of the project area is not covered in any master plan or planning zone under PUDA Act, the land use thereof shall not be changed or amended later on and shall be incorporated as such and included in any future master plan or zonning which shall be prepared under the PUDA Act. The project shall not be advertised/launched and no money will be collected from general public for allotment of land/plot/flat/any space till such time the layout/zoning plans are cleared from the competent authority."

These clauses, thus, obviously relate to exemption from Stamp Duty and Registration Fee, up to the stage of first sale of a developed area etc. and exemption from CLU charges, if the project land falls within the purview of the New Capital (Periphery) Control Act, 1952. If it does not form part of any master plan or planning zone under the PUDA Act, then there would be no change of land use and the project would be 'incorporated' as per existent use and later included in future master plans/ zoning plans under the latter Act.

DINESH 2014.11.04 15:12 27 I attest to the accuracy and integrity of this document Chandigarh

These clauses, as can be seen, are ad verbatim the same as sub- clauses 5(v)(a) and (b) of the 2007 agreement, reproduced in the early part of this judgment.

37. Mr. Mittal thereafter drew attention to sub-clause 5(iv) (i), by which exemption from the Act of 1995 has been stipulated, subject to the fact that the layout/building plan/zonning plan are approved by the competent authority.

He then drew attention to the affidavit of the Director-cum- Secretary to Government of Punjab, Department of Industries and Commerce, Chandigarh, dated 14.12.2012, in which it is specifically stated, in para 4 thereof, that the Mega Industrial Park Project of the petitioner has been approved under "Industrial Policy, 2003".

Further, he drew attention to letter dated 16.04.2010, addressed by the Assistant General Manager of the petitioner-company, to respondent No.2, wherein reference has been made to the Policy of 2009 also, on the basis of which a review of the CLU and EDC charges demanded, was requested.

In the said letter, the petitioner-company had pointed out that even as per the 2009 policy, the Empowered Committee on Mega Projects DINESH 2014.11.04 15:12 28 I attest to the accuracy and integrity of this document Chandigarh had stated that there would be no CLU charges where the user has been changed from agricultural to industrial purposes, in respect of the industrial components of the industrial park, though such charges would be applicable on the residential and commercial components of the said park.

38. Thus, Mr. Mittal submitted, that the amount of Rs.25,06,500/- charged from the petitioner towards CLU charges, was not actually a charge payable by the petitioner, as even the Policy of 2009 does not envisage CLU charges for a wholly industrial park, with no commercial or residential component.

39. Per contra, Mr. P. S. Bajwa, learned Additional Advocate General appearing for respondents no.1 and 3 and Mr. Sanjeev Sharma, learned Senior Advocate appearing for respondent no.2 (GMADA), have defended the demand raised with respect to all charges, including those for Change of Land User, External Development and Urban Development Fund/Social Infrastructure Fund, as has been raised in the impugned letter dated 09.10.2009, of the Competent Authority, addressed to the petitioner (Annexure P-10). This demand was reiterated vide a letter of the same authority to the petitioner, dated 17.05.2010.

40. After hearing all parties and going through the pleadings in DINESH 2014.11.04 15:12 29 I attest to the accuracy and integrity of this document Chandigarh detail, we now proceed to deciding the issue on merits, after which, we will refer to the judgment relied upon by counsel for the petitioners, i.e. M/s Janta Land Promotors Ltd. v. State of Punjab and others (supra).

41. Strangely, the respondents have adopted different stands on one issue, in different affidavits/replies/orders passed during the pendency of the petition.

As per para-8 of the reply initially filed by the State (respondent no.1), through the Additional Secretary to the Government of Punjab, Department of Industries and Commerce, in response to the petition, the categorical stand was that the agreements signed between the petitioner and the State, dated 15.10.2007 and 26.03.2010, were in terms of the Industrial Policy of 2003.

The same position was reiterated in the affidavit filed by the Director-cum-Secretary to the Government, Department of Industries and Commerce, dated 14.12.2012 as per para-4 of the said affidavit which states as under:

"4. That in response to point No.(iii), of the orders passed by Hon'ble D. B. of Punjab and Haryana High Court, it is respectfully submitted that the Mega Industrial Park Project of the Company has been approved under Industrial Policy, 2003."

DINESH 2014.11.04 15:12 30 I attest to the accuracy and integrity of this document Chandigarh

As per respondent no.3, i.e. the Chief Town Planner, in his reply to the petition, as already noticed, it is stated that though the first agreement dated 15.10.2007 was signed as per the policy of 2003, thereafter, firstly, the notification dated 11.01.2008 was issued by the Government, in accordance with which a demand of CLU charges was raised on the petitioner, which was deposited by it on 24.12.2008, without any resolution/condition, in respect of the 50.13 acres of land which was the project area as per the agreement dated 15.10.2007.

However, CLU charges were not demanded for the additional area 15.37 acre subsequently added to the project area because, in the meanwhile, a notification dated 18.06.2009 had been issued by the Government stating therein that there shall be no charges for the change of land user on industry.

42. The reply also admits, in para-4 thereof, that the site of the petitioner falls in the Free Enterprises Zone (FEZ) of the Master plan for Derabassi and a part of it falls in the regional plan of GMADA.

The reply on behalf of the Chief Town Planner also states that as regards external development charges, speaking orders have been passed by the Chief Administrator, GMADA, on 01.12.2012 (that aspect being DINESH 2014.11.04 15:12 31 I attest to the accuracy and integrity of this document Chandigarh within the domain of GMADA).

43. Coming to the stand of respondent no.2, i.e. GMADA; in the initial reply filed by the Chief Administrator, in response to the petition, it has been stated that the agreements dated 15.10.2007 and 26.03.2010 both draw their sanctity from the Industrial Policy of 2003 and as such the agreements alone cannot be read, but have to be read along with the said policy, which envisages both, levy for external development, as also one for change of land use etc. The reply refers to para- 10.4.1 of the said policy in respect of external development charges and para- 10.4.2 thereof in respect of change of land user charges, (both already reproduced herein before).

Thus, both the charges are stated to be payable by the petitioner, on account of the said policy.

44. In para-15 of the said reply, the Additional Chief Administrator, GMADA, categorically states that:-

"The petitioner cannot claimed (sic) benefit of Industrial Policy, 2009 as agreement at Annexures P-2 and P-5 were executed in accordance with of Industrial Policy, 2003. The answering respondent rightly claimed demand for bank guarantee."

Thereafter, in response to the order of this Court dated DINESH 2014.11.04 15:12 32 I attest to the accuracy and integrity of this document Chandigarh 21.01.2011, directing the Chief Administrator, GMADA, to examine the petitioners' claim, in the light of the Division Bench judgment in the Janta Land Promotors Ltd. (supra), the Chief Administrator, passed an order dated 31.03.2012, which was placed on record along with his affidavit, on 28.05.2012, in which it is stated that the agreement dated 15.10.2007 was superseded with an agreement dated 26.03.2010 in the light of the revised Industrial Policy of 2009, that was notified by the Government on 07.10.2009, with one of the conditions mentioned therein as follows:-

"7.3 CHANGE OF LAND USE (CLU) CHARGES, EXTERNAL DEVELOPMENT CHARGES (EDC) AND LICENSE FEE There will be no CLU charges and License Fee for change of land use from agriculture to industry anywhere in the state, similarly there will be no CLU and License fee for change of land use from agriculture to industry in case of industrial component of the Industrial Park. However, these charges will be applicable on the residential and commercial components of the Industrial Park, as per rates notified by the State Government.

The External Development Charges for industry and Industrial Park will be on actual basis. The entrepreneurs will have the option to get the External Development works executed from the concerned development agency of the area by depositing the actual charges or execute such works of their own in DINESH 2014.11.04 15:12 33 I attest to the accuracy and integrity of this document Chandigarh accordance with the plans/structure duly approved by the development agency."

The order of the Chief Administrator further states that even a perusal of the agreement dated 26.03.2010 nowhere exempts the petitioner from payment of external development charges by the State Government and that this agreement was executed, when the Industrial Policy of 2009 was in operation, under which it was bound to pay the requisite EDC charges, as determined by the Government, vide notification dated 11.01.2008.

The distinction drawn, in the said order, between the case of the petitioner and that of Janta Land Promoters Ltd. is that, in the case of Janta Land Promoters Ltd., the agreement was executed on 24.06.2005, when the Industrial Policy of 2003 was in operation and the notification dated 11.01.2008 was not "in vogue", whereas in the case of the petitioner, by the time the second agreement dated 26.03.2010 had come into existence, both, the notification dated 11.01.2008 had come into existence and 2009 policy had also come into place, thus, there could be no parity drawn between the two cases.

45. Thus, in effect, whereas Government is very clear in both DINESH 2014.11.04 15:12 34 I attest to the accuracy and integrity of this document Chandigarh affidavits that the agreement was governed by the 2003 policy, GMADA and the Chief Town Planner, both vacillate on the issue saying that the 2009 policy would also need looked at, with Chief Administrator GMADA, later categorically stating that the 2009 policy would apply.

46. We, therefore, first need to come to clarity on this and the other basic issue, i.e. which of the two, or both, agreements applies.

It needs to be noted that the petitioners prayer, other than for quashing the demand notices, is that a writ of mandamus be issued, directing the respondents to implement the agreement dated 15.10.2007. Obviously, as per written pleadings the petitioner is not seeking any relief in terms of the agreement dated 26.03.2010. However, during arguments, learned counsel for the petitioner referred to both the agreements.

47. We first need to see as to which of the two agreements is actually in operation, or as to whether the second one supplements the first, so as to make them both applicable, either as a whole or in respect of the original part of the project and the latter part of the project, respectively.

48. The first agreement of 2007 was in respect of setting up an Industrial Park with an investment of Rs.132 crores, on an area of 50 acres, over a period of three years.

DINESH 2014.11.04 15:12 35 I attest to the accuracy and integrity of this document Chandigarh

As per that agreement, 60% of that area would be developed as an industrial pocket, 10% as a commercial pocket and the remaining 30% as a residential pocket, subject of course, to open spaces etc. in each such pocket.

49. Thereafter, upon the companys' initiative in October, 2008, the entire project was requested to be set up as an Industrial Park only, by including 30 acres more land to the 50 acres already agreed to be utilized.

This proposal, after being considered by the Empowered Committee constituted under the policy of 2003, was approved on 16.12.2008 and a revised letter of intent was issued on 05.02.2009, after which the agreement dated 26.03.2010 was signed,, envisaging utilization of 80 acres of land for setting up an Industrial Park with the same investment of Rs.132 crores, again over a period of three years, with no commercial or residential component in the project.

50. One thing which runs common in the replies of both, the Government as also GMADA, is that the second agreement of 2010 was in supersession of the earlier agreement dated 15.10.2007. In fact, even the petitioner itself has stated the same in para- 9 of its petition, using the word "suppression" instead of supersession.

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As such, once the original agreement dated 15.10.2007 in respect of development of the project over 50 acres stood specifically, and admittedly, superseded by the subsequent agreement dated 26.03.2010, we do not see as to what benefit the petitioner can draw from the earlier agreement, even though, in fact, no difference between the terms and conditions of both, is seen, other than increasing the total area of the project and allowing the project to be executed 100% for the development of an Industrial Park, instead of the earlier proposal of development of commercial and residential pockets also, within the Industrial Park.

51. Be that, as it may, de hors the contention of the parties, we reproduce the preamble of the agreement dated 26.03.2010, written before the first paragraph of the said agreement.

"AGREEMENT Memorandum of Agreement made, this 26th day of March, 2010 between the M/s Hansa Tubes Pvt. Ltd., a Company (Registered under the Companies Act, 1956) and having its Regd. Office at 181/25, Ind. Area, Phase-1, Chandigarh (hereinafter referred to as the company") of the one part and the Governor of Punjab, through the Secretary Industries & Commerce, Government of Punjab, Udyog Bhawan, Sector 17, Chandigarh (hereinafter referred to as 'State Government') of the other part in supersession of Agreement earlier signed on DINESH 2014.11.04 15:12 37 I attest to the accuracy and integrity of this document Chandigarh 15th October 2007."

(emphasis applied by us) Thus, what we are required to ensure, is that the contractual agreement entered into between the State of Punjab and the petitioner is not violated by the parties to the agreement, in as far as the issues before us are concerned, i.e. payment of change of land user charges, external development charges and Urban Development fund (as referred to in the impugned letter dated 09.10.2009 but referred to alternatively as social infrastructure fund by the petitioner, in his petition); unless such circumstances have come to exist thereafter, that larger public interest would not bind Government to the promise extended by it, in terms of the contract.

No such circumstance has even remotely been brought to our notice.

52. We also need to see the effect of the polices of 2003 and 2009 on the issue, as also of the notification dated 11.01.2008, prescribing the rate of external development charges and /or the notification dated 18.06.2009 (referred to in the reply on behalf of Chief Town Planner), by virtue of which no charge for the change of land use was to be levied on the industries of the State of Punjab.

DINESH 2014.11.04 15:12 38 I attest to the accuracy and integrity of this document Chandigarh

53. In our opinion, as unequivocally stated by Government, in its reply to the petition, as also in the affidavit subsequently filed by the Secretary to Government of Punjab, Department of Industries and Commerce, even the subsequent agreement dated 26.03.2010 was executed in terms of the 2003 policy and not the policy of 2009, even though the latter policy had come into effect on 07.10.2009, i.e. before 26.03.2010.

The reasons for the 2nd agreement also making a reference only to the 2003 Policy and not of that of 2009, are easy to discern. Firstly, the original project, the main thrust of which was the development of an Industrial Park, had been agreed upon between the same parties under the old policy of 2003. Secondly, the letter of intent was issued (again) on 05.02.2009, on the basis of an approval dated 16.12.2008, before notification of the 2009 Policy. Therefore, the agreement itself refers only to the Industrial Policy of 2003 and not to that of 2009, as is clearly visible on a reading of paragraph-1 and sub-clauses (i) and (iv)(a) of paragraph 5 of the said agreement.

54. Also, it needs to be noted that as per Sub-clause (o), the single Nodal Agency, in respect of facilitating the project, and for getting the clearances etc. required, was the Department of Industries. DINESH 2014.11.04 15:12 39 I attest to the accuracy and integrity of this document Chandigarh

Obviously, the terms of the agreement would also be interpreted by the said Nodal agency, and therefore, any interpretation of the agreement, contrary to that given by such Government (nodal) agency itself, would not hold, unless of course, this Court comes to a conclusion that the Government/its Nodal Department itself is interpreting the agreement wrongly. We say this in view of the fact that though Government has clearly stated that the agreement is in terms of the 2003 policy, respondents no.2 and 3 have tried to bring in the provisions of the 2009 policy in order to try and draw a distinction in respect of why CLU charges were not made applicable to the additional land which was included in the project after the first agreement was signed.

As already said, with the agreement referring specifically and only to the 2003 policy and not the 2009 policy, it was obviously a conscious decision taken by the Government, as also by the Company, to set up the project in terms of the old policy which had come into existence well before the second agreement was signed.

55. Even having said that, so as to get the entire perspective correct, we do not see any difference, as already said, between the relevant concessional clauses of the two agreements, with regard to the controversy DINESH 2014.11.04 15:12 40 I attest to the accuracy and integrity of this document Chandigarh in hand.

We have already reproduced paragraphs 5 (v),(a), (b) & (i) of the first agreement, which wholly correspond to paragraphs 5 (iv), (a), (b) and (i) of the second agreement, as reproduced in the petition as also with the affidavit of the Director, Industries respectively. (The petitioner, in the petition, has, obviously mistakenly, shown para 5, (iv)(a), (b) of the second agreement as para 5 (v)(a) & (b) ).

56. With the relevant concessional clauses in both the agreements being identical, ad verbatim, we are now only to see as to what concessions were actually granted and what were not granted, by the existing agreement dated 26.03.2010, and thereafter, to determine as to whether the demand raised vide the impugned letters is valid or not.

57. We, therefore, firstly examine, the relevant clause pertaining to payment/non-payment of charges for change of land use.

As noticed earlier, sub-clause (b) of Clause (iv) of paragraph 5 of the agreement stipulates that "the land use change in the area falling under the control of the Punjab Periphery Control Act shall be allowed without any charges levied by the Housing and Urban Development Department in accordance with the draft Master layout plan of the periphery DINESH 2014.11.04 15:12 41 I attest to the accuracy and integrity of this document Chandigarh and Periphery Policy of the Government of Punjab." (emphasis applied by us).

Thus, it is very obvious that once the change of land user was of land situate within the area covered by the draft Master layout plan falling within the Periphery Policy of the Government of Punjab, no charges were to be levied upon the same.

In this regard, we also need to refer to sub-clause (i) of Clause

(iii) of paragraph 5 of the existing agreement [paragraph 5(iii) (i)] which states that:-

"The project shall conform to the Master plan/Periphery Policy."

In the reply filed on behalf of the Chief Town Planner (respondent no.3), it has been admitted that the site of the petitioner falls within the FEZ of the Master plan of Derabassi, as already noticed earlier.

Thus, it is nobodys' case that the planning and zoning of the petitioners' project is against any norms etc., the said plan admittedly having been approved.

58. As such, we do not see as to on what basis, after unequivocally providing in the agreement, that the change of land use shall be without any charge, the respondents have all made a complete volte face to state that DINESH 2014.11.04 15:12 42 I attest to the accuracy and integrity of this document Chandigarh such charge is leviable, because of the notification dated 11.01.2008.

The said notification has been annexed with the reply of the 3rd respondent, which undoubtedly states that industries, including Industrial Parks, would be within the purview of the said notification.

The same notification also lays down the rates of external development charges and license fees on industries in the GMADA area.

59. Despite that, we fail to understand as to how the charge would be leviable on the petitioner, in the face of a contractual agreement entered into more than two years after the notification, when, obviously, the Government was very well aware of the notification that it had itself issued.

It needs specific mention here that the demand raised in respect of CLU and external development charges etc, vide the impugned letter, is dated 09.10.2009, i.e. before entering into the agreement dated 26.03.2010, when the earlier agreement dated 15.10.2007 was in force, though in that agreement also, the same provision for exemption of CLU was incorporated.

Thus, the demand created vide the impugned letter dated 09.10.2009, in respect of the charges for change of land use, is not sustainable, either in terms of the agreement dated 15.10.2007, or in terms of the agreement dated 26.03.2010, both of which exempted the petitioner DINESH 2014.11.04 15:12 43 I attest to the accuracy and integrity of this document Chandigarh from the said charge.

Similarly, reiteration of the demand, by a short letter in reply to the petitioners' representation, on 17.05.2010, i.e. vide the second letter impugned in the petition, is also unsustainable.

60. We could have looked at the issue differently, in case the respondents, due to an inadvertent mistake, had incorporated the concession into the second agreement also, but had thereafter, sought to rectify it by seeking to amend the agreement on the ground that the clause is in detriment of the 2009 policy.

However, we do not see any such basis for even that, in view of the fact that in paragraph 7.3 of the Industrial Policy of 2009, as reproduced by the second respondent in his order dated 31.03.2012, it is stated that:-

"there will be no CLU charges and license fee for change of any use from agriculture to industry anywhere in the state, similarly there will be no CLU and license fee for change of land use from agriculture to another in case of Industrial component of the Industrial Park. However, these charges will be applicable on the residential and commercial components of the Industrial Park, as per rates notified by the State DINESH 2014.11.04 15:12 44 I attest to the accuracy and integrity of this document Chandigarh Government".

Therefore, the petitioners' project, in terms of the second agreement, being only for an Industrial Park, with no residential and commercial components, even as per the 2009 policy, there could have been no charge for change of land use, though, in any case, as we have already seen, that policy does not form the basis of the existing agreement.

61. Thus, on the issue of imposing a charge for change of land use, we find no ground at all, to sustain the demand raised by the respondents. As such, the fee already charged from the petitioner, to the tune of Rs.25,06,500/- in response to a demand raised by the 3rd respondent for change of land use, is liable to be refunded.

62. We now come to the issue of charging of external development charges by the respondents.

Towards that purpose, we also need to reproduce sub-clause (h) of Clause (iv) of paragraph 5 of the existing agreement dated 26.03.2010. It reads as follows:-

"h) The State Government shall ensure that connectivity to power, roads, accessibility, communication, civic and other infrastructure upto project is provided within 240 days from the date the same is applied for to the concerned department/agency/authority/local body on fulfillment of DINESH 2014.11.04 15:12 45 I attest to the accuracy and integrity of this document Chandigarh various terms and conditions required in this regard at such rates/fee etc. which shall not be less favourable to them compared to similarly placed projects/customers. However, the proportionate cost of any infrastructure upgradation of the area where Industrial Park is proposed to be set up, incurred by the concerned Municipal Corporation/Committee/Department of PWD or other Government department or Agency shall be borne by the Company."

(emphasis applied by us) This charge, we thus find, is fully leviable on the petitioner in terms of the above reproduced part of the agreement inked by it, on 26.03.2010, with the Government.

A perusal thereof shows that the State Government bound itself to provide connectivity to power, roads, accessibility etc., within 240 days from the date that the same were applied for to the concerned department, by the petitioner, at certain rates, which were not to be less favourable when compared with similarly placed projects/customers. Whether such rates were not to be less favourable to the department concerned or to the project component, is something which we are not looking at, because it was not an issue raised before us and perhaps not really a matter of dispute either. However, what is necessary to be reiterated from the said clause is that it DINESH 2014.11.04 15:12 46 I attest to the accuracy and integrity of this document Chandigarh clearly stipulates that the proportionate cost of any infrastructure upgradation of the area where an Industrial Park is proposed to be set up, incurred by the concerned Municipal Corporation/Committee/Department of PWD or other Government department or Agency, shall be borne by the Company.

63. No doubt, as pointed out by learned counsel for the petitioner, sub-clause (i) of Paragraph 5 (iv) states that "the project of Industrial Park"

shall be exempted from the PAPR Act, 1995, Section 5 (5) of which creates a liability on a coloniser to pay charges for external development of the land being colonised.

Sub Section (5) and (6) of Section 5 of the PAPR Act, 1995 are reproduced herein below:-

"(5) The promoter shall enter into agreement undertaking to pay proportionate development charges for external development works to be carried out by the Government or a local authority, (6) The competent authority shall determine the proportion in which, and the time within which, the estimated development charges referred to in sub-section (5) shall be paid to the State DINESH 2014.11.04 15:12 47 I attest to the accuracy and integrity of this document Chandigarh Government, or the local authority, as the case may be."

The question, therefore, is that once the petitioner was exempted from the provisions of the PAPR Act, would it still be liable to pay external development charges as are leviable under the above provisions of the said Act, in terms of sub clause (h) of clause (iv) of Paragraph 5 of the agreement?

In order to determine that, we also need to refer to the definition of external development works and internal development works and development charges, as given in Section 2(m), (n) and (p) of the Act of 1995. The same are reproduced here under:-

"2. Definitions. - In this Act, unless the context otherwise requires:-

xxxxxxxxx

(m) "development charges" means the cost of external development works and internal development works;

(n) "development works" means internal development works and external development works;

xxxxxxxxxx

(p) "external development works" includes roads and road DINESH 2014.11.04 15:12 48 I attest to the accuracy and integrity of this document Chandigarh systems, water supply, sewerage and drainage systems, electric supply or any other work which may have to be executed in the periphery of, or outside, a colony for its benefit;"

xxxxxxxxxx

(r) "internal development works" means roads, foot-paths, water supply, sewers, drains, tree planting, street lighting, provision for community buildings and for treatment and disposal of sewage and sullage water, or any other work in a colony necessary for its proper development;"

64. Therefore, in the light of the above, how would we see the recovery of proportionate costs incurred by the concerned local body or Government Department or agency of any infrastructure upgradation of the area where the Industrial Park is proposed to be setup, as stipulated in Paragraph 5(iv)(h) of the agreement?

We are also not unconscious of the fact that after the provision for recovery has been made, in sub clause (h), of such proportionate costs of infrastructure upgradation, sub clause (i) states that the Industrial Park shall be exempted from the PAPR Act.

However, in our considered opinion, when a condition is DINESH 2014.11.04 15:12 49 I attest to the accuracy and integrity of this document Chandigarh specifically contained in the agreement entered into by both parties, that infrastructure upgradation cost is to be recovered from the company, such recovery stands saved, and obviously would fall within the ambit of Section 5(5) and (6) of the Act and would be recoverable, despite the general exemption granted from the provisions of the Act in that agreement itself, with the specific provision overruling the general provision, even though the general exemption is placed in a clause after the clause stipulating recovery of a specific charge.

65. Thus, despite the policy itself envisaging no such charge to be levied, the policy is only a guideline for the Government, whereas the terms of the agreement are a contract entered into by both parties with open eyes with regard to the contents and terms and conditions thereof.

66. Not only this, even as per the clause of the policy heavily relied upon by the petitioner, i.e. clause 10.4.1 (already reproduced earlier), it is stipulated therein that to avail of the benefit of exemption from the PAPR Act, 1995, the eligibility of each such park/estate/zone will be assessed and determined by the 'Empowered Committee for Industrial Approval'. Upon approval of the Committee, the Department of Industries was to issue an Eligibility Certificate.

DINESH 2014.11.04 15:12 50 I attest to the accuracy and integrity of this document Chandigarh

The petitioner, however, has not produced any letter or approval by the Empowered Committee exempting it from the levying of external development charges.

In fact, the approval for the second project, which was given vide letter dated 05.02.2009 (Annexure P-4), refers to the letter initially written by the petitioner on 20.09.2006 seeking the grant of a special package of incentives. Thereafter, the approval letter (dated 05.02.2009) states as follows:-

"The proposal was considered by the Empowered Committee constituted under Industrial Policy 2003, in its meeting held on 16.12.2008 under the Chairmanship of Hon'ble Chief Minister, Punjab. After deliberations, Committee approved following:

• Development of whole (100%) of the area of the Industrial park as industrial area (industrial Pocket). • To include additional 30 acres of industrial land at village Haripur Hindua in the approved industrial park project.

• To amend Clause V(i) in respect of Electricity Duty Exemption of the Agreement signed by the Company with State Government in accordance with decision already taken in the Empowered Committee meeting held on 12.01.2006, as under:-

"only industrial units set up within the area DINESH 2014.11.04 15:12 51 I attest to the accuracy and integrity of this document Chandigarh earmarked for industry in the industrial parks shall be eligible for exemption of 50% of the electricity duty from the date of release of connection by PSEB. This concession shall however be admissible only to such industrial units which are set up and which starts their production within 5 years from the date of approval of the industrial park."

Thus, other than in respect of electricity duty exemption, as also converting the project for a 100% industrial purpose, there was no change to the concessions already granted.

Therefore, neither in the approval granted by the Empowered Committee on 15.11.2006, nor in the subsequent approval leading up to the 2010 agreement, was any eligibility certificate issued to the petitioner, exempting it from payment of external development charges. On the contrary, a provision for recovery of infrastructure development was expressly added in the agreement.

67. An argument, of course, can be raised that "infrastructure upgradation of the area" would be the recovery of costs of maintenance by a local body or Government Department or agency. However, when the words "proportionate cost of any infrastructure upgradation of the area" are DINESH 2014.11.04 15:12 52 I attest to the accuracy and integrity of this document Chandigarh followed by the words "where Industrial Park is proposed to be set up", the cost to be recovered from the company, obviously cannot be for upgradation of an existing infrastructure, since the Industrial Park was proposed to be set up on land that was, till then, being used as agricultural land and was thereafter permitted to be converted to industrial use. Naturally, such raw land, would need complete infrastructural facilities to be created upon it.

As such, we find, that despite the existence of sub clause (i) in Para 5(iv) of the agreement, exempting the petitioner from the provisions of the PAPR Act, external development charges as leviable under the Act, would be recoverable from the petitioner in terms of sub clause (h) of the same clause and paragraph of the agreement.

We, thus do not find any ground to allow the petitioner exemption from external development charges, either in terms of the approval granted to it by the Empowered Committee, or in terms of the clear condition of the contract signed by the petitioner and the first respondent and hold that the petitioner is liable to pay the external development charges that have been demanded by the respondents, from the company.

68. Coming now to the issue of the charging of a Social Infrastructure Fund.

DINESH 2014.11.04 15:12 53 I attest to the accuracy and integrity of this document Chandigarh

Nothing has been shown to us as to under what authority or statutory provision such charge has been levied.

However, in the connected petition (CWP No.16689 of 2010), a notification dated 29.06.2010 has been annexed with the reply filed on behalf of the Government, in the Department of Housing and Urban Development and of the Chief Town Planner, Punjab, in which it has been stated, in paragraph-17 thereof, that a Social Infrastructure Fund shall be created to promote social infrastructure like sports, health, recreation, education, construction of house for economically weaker sections or "any other items on social infrastructure." Towards the creation and sustenance of the corpus of such fund, all promoters of residential, commercial, institutional and industrial projects were made liable to pay an amount equal to 3% of CLU charges, EDC and licence fee. The fund was to be maintained in a separate account by the concerned Urban Development Authority, to be utilized for the re-creation/construction of social infrastructure.

Thus, the fund, as per pleadings before us, with nothing to the contrary having been pointed to us, does not have any statutory basis and has simply been created by a notification, probably in purported exercise of powers vested under Article 162 of the Constitution. However, in our DINESH 2014.11.04 15:12 54 I attest to the accuracy and integrity of this document Chandigarh opinion, no matter how laudable the purpose, the creation of a financial burden, upon even industrial and commercial institutions, without reference to a statutory enactment, would be in derogation of Article 265 of the Constitution and against settled principles that no tax, fee or cess can be levied by executive fiat, in the absence of a statutory provision. In this context, the following passage from Hindustan Times v. State of U.P. (2003) 1 SCC 591, can be cited:-

"19. As noticed hereinbefore, the State of Uttar Pradesh intended to make a legislation covering the same field but even if the same was to be made, it would have been subject to the parliamentary legislation unless assent of the President of India was obtained in that behalf. The State executive was, thus, denuded of any power in respect of a matter with respect whereto Parliament has power to make laws, as its competence was limited only to the matters with respect to which the legislature of the State has the requisite legislative competence. Even assuming that the matter relating to the welfare of the working journalists is a field which falls within Entry 24 of the Concurrent List, unless and until a legislation is made and assent of the President is obtained, the provisions of the 1955 Act and the Working Journalists (Fixation of Rates and Wages) Act, 1958 would have prevailed over the State enactment.

20. Thus, the directive of the State to the effect that 5% of the amount to be deducted on the amount payable for DINESH 2014.11.04 15:12 55 I attest to the accuracy and integrity of this document Chandigarh publication of government advertisements in all newspapers having a circulation of more than 25,000 copies, would be part of the fund meant to be used towards retiral benefits of the working journalists, must be held to be bad in law. As the said Act, as also the Bachawat Award specifically deal with the matter relating to Pension Scheme for journalists, we have no hesitation in holding that the impugned orders were beyond the legislative competence of the State.

21. In Sudhir Chandra Sarkar v. Tata Iron & Steel Co. Ltd. it was held that the pension and gratuity are well-known measures of social security. It was observed that the employer cannot have an absolute discretion not to pay any gratuity even when it is earned. It is not the contention of the respondents that the State had been delegated with any power to levy tax or impose any fee. Article 162 of the Constitution is subject to the other provisions contained therein.

22. By reason of the impugned directives of the state, the petitioners have been deprived of their right to property.

23. The expression "law", within the meaning of Article 300-A, would mean a Parliamentary Act or an Act of the state Legislature or a statutory order having the force of law.

24. In Bishambhar Dayal Chandra Mohan v. state of U.P. this Court held as under:

"41. There still remains the question whether the seizure of wheat amounts to deprivation of property without the authority of law. Article 300-A provides that DINESH 2014.11.04 15:12 56 I attest to the accuracy and integrity of this document Chandigarh no person shall be deprived of his property save by authority of law. The State Government cannot while taking recourse to the executive power of the State under Article 162, deprive a person of his property. Such power can be exercised only by authority of law and not by a mere executive fiat or order. Article 162, as is clear from the opening words, is subject to other provisions of the Constitution. It is, therefore, necessarily subject to Article 300-A. The word 'law' in the context of Article 300-A must mean an Act of Parliament or of a State Legislature, a rule, or a statutory order, having the force of law, that is positive or State-made law."

It is not the case of the respondents that the said fund has been charged in terms of the Punjab Infrastructure (Development and Regulation) Act, 2002, which was enacted for the purpose of providing for the partnership of private sector and public sector in the development, operation and maintenance of infrastructure facilities through financial sources other than those provided by the State budget, and for matters connected therewith or incidental thereto.

As such, the present charge simply created by a notification, without reference to the source of power by or under a statute, would be an illegal levy, liable to be struck down.

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Consequently, the said charge levied upon the petitioner is quashed, it not having been imposed by any delegation of authority to the Government, by any statutory provision.

69. We now move on to issue of licence fee which has also been included by the petitioner, as one of the charges in respect of which directions are sought from this Court to the respondents, restraining them from realizing that charge.

70. We find it strange that the petitioner has actually included this fee as a charge to be either reversed or to be made not payable, in view of the fact that the impugned letter dated 09.10.2009, does not actually create a demand for licence fee. Though the subject head of the said letter definitely is with regard to the "deposit of external development charges, licence fee and Urban Development Fund", and licence fee is shown at Sr. No.'B' of the charges in respect of which the demand has been made, however, the actual demand is Rs.0.00, under the head of licence fee.

Obviously, the respondents were only showing the chargeability of the fee, without actually raising any demand for the same, which is also borne out by the fact that in the petitioners' representation dated 16.04.2010, against the demands raised vide the impugned letter dated DINESH 2014.11.04 15:12 58 I attest to the accuracy and integrity of this document Chandigarh 09.10.2009, only a waiver of CLU and EDC has been sought.

71. Even the reply of the District Town Planner, vide the second letter impugned in the petition, dated 17.05.2010, mentions waiver of CLU and EDC only, in the subject head, though reiterates the entire demand raised vide the earlier letter dated 09.10.2009. Naturally, there being no actual demand for licence fee, there was no occasion for its waiver and consequently there is no occasion to give a direction to the respondents not to impose such charge.

However, since it has been shown as a charge with no demand raised thereupon vide the impugned letter, we need to look at the agreement again with regard to the said charge.

72. The issue of grant of licence has been considered in sub-clause

(i) of paragraph 5(iv), i.e. the same sub-clause which exempts the petitioner from the provisions of the PAPR Act 1995. The reproduction is made again for convenience, which reads as under:

"The project of industrial park shall be exempted from PAPR Act. However, the layout and zoning plan shall be got cleared/approved from the Competent Authority which shall be deemed to be a license under PAPR Act 1995. The building plans shall also be got cleared from Competent Authority."

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73. Therefore, though a licence was required to be obtained as per the terms of the PAPR Act, clearance/approval of the layout and zoning plan was deemed to be a licence granted under the said Act of 1995.

As such, though normal fee payable for clearance of the layout and zoning plan would have to be paid, in the absence of any specific exemption given in that regard, however, the said clearance would be deemed as a licence for the project and no separate fee to seek a licence to execute the project was made payable under the said clause of the agreement, i.e. 5(iv)(i).

74. Hence, the issue of licence fee is decided with the above observations, with no need to give any further direction, in view of the fact that no demand in that regard has been raised by the respondents, as already seen.

75. Lastly, coming to the issue of furnishing of a bank guarantee of Rs.73.72 lacs as directed by the District Town Planner vide the second letter impugned in the petition, dated 17.05.2010.

76. No specific provision for furnishing of a bank guarantee, in the agreement dated 26.03.2010, has been pointed out to us. Also, no separate contract in respect of any bank guarantee has been shown to us, either from the DINESH 2014.11.04 15:12 60 I attest to the accuracy and integrity of this document Chandigarh pleadings or from the record. As such, the demand for furnishing of a bank guarantee of Rs.73.72 lacs is held illegal, giving the respondents liberty to negotiate for the same with the petitioner, if they find it necessary to secure their payments, now.

We have held the demand for furnishing a bank guarantee illegal at this stage, there being no provision for the same in the agreement; however, the need for furnishing one is not lost upon us, even though the respondents have already incorporated a "safety clause" in the agreement, to the effect that in case the company fails to comply with the provisions of paras 5(i) to 5(iii) thereof, then the concessions granted to it would automatically stand withdrawn and all costs in respect of reliefs/concessions availed of would be recoverable as arrears of land revenue, as we have already noticed earlier.

Seemingly thus, the need for furnishing of a bank guarantee was not felt necessary by the respondents at the stage of signing the agreement. However, with the petitioner now having raised the present issues, not having paid a large part of the arrears due by way of EDC, the demand for a bank guarantee seems to have been raised, with recovery by way of arrears of land revenue being a lengthy process. Hence, we have, by DINESH 2014.11.04 15:12 61 I attest to the accuracy and integrity of this document Chandigarh way of abundant precaution, given liberty to the respondents to enter into a contract with the petitioner in that regard, though obviously such liberty would have also been available between the parties, without it being given by us. Alternatively, the parties could also enter into a supplemental agreement, imposing a "first charge" on the land being utilised for the project, in case of non-payment of external development charges.

77. Coming now to the question of applicability of the ratio of the judgment in the case Janta Land Promotors Ltd. (supra).

A perusal of the said judgment shows that the petitioner therein had challenged the levy of charges for change of land use, failure to grant 100% exemption from stamp duty and registration fee, failure to acquire 10% land for the industrial mega project, failure to grant permission to dig a tubewell, charging of external development charges and license fee.

78. The issue of furnishing a large bank guarantee of Rs.1,00,00,000/- plus was also raised before the Division Bench during the course of arguments, as seen from a reading of the judgment.

79. After noting the various clauses of the agreement signed between the petitioner in that case and the Government, a co-ordinate Bench held that the Government is bound by the principle of promissory estoppel, DINESH 2014.11.04 15:12 62 I attest to the accuracy and integrity of this document Chandigarh since no larger public interest was shown to be existent, in order to repudiate any of the clauses of the agreement and, as such, held that neither was the charge in respect of CLU permissible, nor the external development charges leviable. The refund of the amount of bank guarantee was also allowed by the Division Bench, upholding the validity of the agreement entered into by the petitioner in that case and the Government.

80. Thus, the ratio of what has been held in that judgment is advocated by the respondents to be binding on this Court, being a co- ordinate Bench.

We see nothing in that judgment which would not hold good in the present case, as regards the ratio of the proposition decided therein, which held that, in terms of the agreement entered into under Article 299 of the Constitution, between the Government and the petitioner, the Government would be bound to honour all conditions that it had bound itself to, on the principle of promissory estoppel.

81. The question, however, is whether the terms of the agreement in that case, and the present case, are identical or not. In other words, is the fact situation identical?

As regards the charges on change of land use, we have already DINESH 2014.11.04 15:12 63 I attest to the accuracy and integrity of this document Chandigarh held that as per the agreement dated 26.03.2010, Government had specifically bound itself to not charge any fee for change of land user. The relevant clause in the agreement signed between M/s Janta Land Promoters Ltd. and the Government, is almost identical to the provision, in all material aspects, to the agreement which the present petitioner, i.e. M/s Hansa Tubes Pvt. Ltd. and the Government entered into. Therefore, the facts on the issue of applicability of CLU charges, are identical. Hence, the judgment in that case applies to the present case also, in view of our finding on CLU charges, which are the same as the ones arrived at in that case too.

82. However, the same does not hold good with regard to charging of external development charges from the present petitioner. In Janta Land Promotors' case, the applicable clause in that agreement, as reproduced in that judgment, ran as follows:-

"5(iv)(i) The State Government shall ensure that connectivity to power, roads, accessibility, communication, civic and other infrastructure upto project is provided within 240 days from the date the same is applied for to the concerned department/agency/authority/local body on fulfillment of various terms and conditions required in this regard at such rates/fee etc. which shall not be less favourable to them compared to similarly placed project/customers."

DINESH 2014.11.04 15:12 64 I attest to the accuracy and integrity of this document Chandigarh

In the present case, the 1st part of clause 5(iv)(h), already reproduced earlier, is identically worded as above. However, in the present case, it carries on further, after the above, to state that:-

"However, the proportionate cost of any infrastructure upgradation of the area where Industrial Park is proposed to be set up, incurred by the concerned Municipal Corporation/Committee/Department of PWD or other Government department or Agency shall be borne by the Company."

Thus, whereas in the agreement in Janta Lands' case, there was no specific qualification to the condition of ensuring connectivity to power, roads etc., in the present case, it is clearly stipulated that the proportionate costs of any infrastructure upgradation would be borne by the Company.

Hence, as regards external development charges, both the cases run on their own facts, as per the agreements entered into by Government, with different companies.

Therefore, as already held by us, external development charges are very much payable by the petitioner in the present case, even though they were not payable by M/s Janta Land Promoters Ltd.

83. The issue of licence fee also having already been decided by us and no charge with regard thereto having been raised by the respondents, DINESH 2014.11.04 15:12 65 I attest to the accuracy and integrity of this document Chandigarh there would be no occasion to draw a parity between the Janta Land case and the present one, on that score, though we have also held that no such fee is leviable, except as is payable for clearance and approval of the layout and zoning plan.

84. As regards charging of a fee/charge towards the Social Infrastructure Fund/Urban Development Fund, that was not a demand raised in the Janta Lands' case, hence, no further comment in that regard is required, with us having already held the levy to be bad.

85. Finally, to conclude, CWP No.23053 of 2010 is partly allowed in the following terms:-.

(i) The demand raised in respect of a fee for change of land use vide the impugned letters dated 09.10.2009 (Annexure P-10) and 17.05.2010 (Annexure P-12) is quashed and the respondents are directed to refund the amount of Rs.25,06,500/-, and any other amount, already realized by way of CLU charges/fees from the petitioner; these charges are directed to be refunded within a period of three months from the date of receipt of a certified copy of this order. Alternatively, the said amounts would be adjusted, from the date of deposit by the petitioner, towards payments due from the petitioner as external development charges; DINESH 2014.11.04 15:12 66 I attest to the accuracy and integrity of this document Chandigarh

(ii) External Development Charges are held payable by the petitioner, along with the interest as demanded for late payment thereof. Such charges as have become due, would be paid, also within three months from the date of receipt of a certified copy of this order;

(iii) The demand raised with respect to Social Infrastructure Fund/Urban Development Fund is quashed and all amounts paid under that head by the petitioner would also be refunded within the same period as aforesaid, with the same option of converting the said charge as a charge raised upon the petitioner for external developments;

(iv) Licence fee, for which, though no demand has been actually made, is held not chargeable in the future also, except as explained in paragraph 83, above;

(v) The demand raised for furnishing of a bank guarantee vide the impugned letter dated 17.05.2010, is held to be illegal; however, liberty is given to Government to enter into a separate agreement, with regard to furnishing of any such bank guarantee or to create first charge on the land being utilised for the project.

The parties are left to bear their own costs.

DINESH 2014.11.04 15:12 67 I attest to the accuracy and integrity of this document Chandigarh CWP No.16689 of 2010

86. In this case, the petitioner has challenged the action of the respondents, i.e. the State and its functionaries, in not sanctioning the building plans submitted by the petitioner company (by respondent no.5- Chief Town Planner), as also the non-grant of due incentives/benefits, as applicable to the Hotel Industry, in terms of the Industrial Policy 2003 and Tourism Policy 2003, of the State Government. The demand for change of land user, external development charges and license fee, vide the impugned letters dated 23.06.2008 and 26.08.2008, issued by the 5th respondent, have also been challenged, seeking quashing thereof.

87. The agreement entered into by Government with the petitioner in this case, is dated 7th July 2006 and consequently, is also in terms of the Industrial Policy of 2003, as stated in the agreement itself.

88. The petitioner company had proposed the setting up of a hotel project in an area of 5021 sq. yards on the G. T. Road, Ludhiana, with a minimum investment of Rs.5,00,00,000, by way of fixed capital, which was approved by the Empowered Committee in its meetings held on 28.01.2005 and 29.03.2006, consequent upon which, a letter of intent, indicating the concessions proposed to be granted to the company, was issued by the DINESH 2014.11.04 15:12 68 I attest to the accuracy and integrity of this document Chandigarh Government, on 21.12.2005 and 08.03.2006 after which an agreement was entered into on 07.07.2006, by which an investment of "over Rs.15 crores"

was to be made, with at least Rs.5 crores thereof as Fixed Capital Investment.

89. The relevant reliefs and concessions were contained in paragraph 5(ii), sub-clauses (c), (d), (e) & (f) of the agreement, which read as follows:

"(c) Licence for hotel, restaurant and pub/bar to be granted by concerned departments.

(d) Conversion of land use from Agriculture to proposed use in principle on payment of conversion charges and in accordance with Periphery Policy approved by the Council of Ministers.

(e) Relaxation under Shops and Commercial Establishment Act by the Labour Department to permit 24 hour operation.

(f) 50% exemption from electricity duty at current rate for a period of 5 years from the date of release of connection by PSEB for the project of Hotel."

The above concessions were subject to the following conditions as contained in Clause (iii) of paragraph-5 of the agreement:-

"(iii) Grant of above concessions will be subject to following conditions:-

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a) Period for completion of minimum investment of Rs.100 crore in Multiplex and completion of Hotel project (not more than 25% of cost of project being included as cost of land in project) shall be 3 years from the date of approval by the Committee;

b) The project will fulfill the conditions as laid down in Industrial Policy and Tourism Policy including that minimum investment of Rs.5 crore in hotel project.

c) Proportionate cost of infrastructure development which will be carried out by the State Government in the area where project is located shall be borne by all the developers of hotels proportionately."

Non-compliance of the conditions set out in the agreement entitled the government to withdraw the concessions contained in paragraph 5(ii), and all reliefs etc. granted, could be recovered as arrears of land revenue, as in the connected case decided hereinabove.

90. After the agreement was signed, the petitioner applied for various sanctions, including for approval of building drawings, and though the contention is that as per the Industrial Policy of 2003 no change of land use was required, as the area falls within an Industrial Zone, as per the Draft Master Plan for Ludhiana, applicable in 2006, it is, however, stated that the petitioner had, nevertheless, by way of abundant caution, still applied for, DINESH 2014.11.04 15:12 70 I attest to the accuracy and integrity of this document Chandigarh and got, permission for change of land use from the Competent Authority on 23.05.2006, i.e. before the signing of the agreement dated 07.07.2006, vide a letter issued to the company by the Joint Secretary to Government of Punjab, Department of Housing and Urban Development.

91. The said permission was granted subject to the condition that the multiplex-cum-commercial complex/shopping center/hotel etc. would be established after obtaining a licence under the PAPR Act and other conditions as set out in the said letter (Annexure P-5 annexed with the petition).

92. After obtaining clearance from various departments, the petitioner is stated to have submitted drawings for the hotel project to the District Town Planner, on 11.10.2007, which were returned back for certain modifications on 19.12.2007.

93. It is contended that while modifications were being carried out, the notification dated 11.01.2008 (already referred to while dealing with CWP No.23053 of 2010 hereinabove) was issued, by which modified drawings were required to be submitted to the Chief Town Planner, which are stated to have been submitted on 09.05.2008 and received by the 5th respondent on 13.05.2008.

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94. However, on 23.06.2008 the impugned letter, seeking deposit of the following charges was issued, as a pre-requisite for approval of the building plans:-

                               "Change of land use charges         Rs.44,77,766/-

                                External development charges       Rs.97,42,615/-

                                Licence fee                        Rs.1,03,70,000/-"

95. The company objected to the same on the ground that since the land in question was situated in an Industrial Zone, there was no occasion to impose charge for change of land user and that it was only by way of abundant caution that the company had actually sought permission for change of land use and that the notification issued after the agreement, on 11.01.2008, prescribing the change of land use charges, was not applicable.

96. Not having received any response to its objection dated 24.06.2008, the petitioner again wrote on 30.06.2008 which was replied to by the 5th respondent vide the second letter impugned in the present petition, dated 26.08.2008, reiterating the demand and stating therein that the building plans cannot be considered for approval under the Hotel Policy because the site in question does not fulfill the conditions of the "new policy".

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97. The petitioners' contention in a nutshell, is that though the petitioner does not fulfil the conditions of the notification dated 11.01.2008, it is still entitled to all reliefs applicable to industries, hotels already having been accepted to be an industry as per the Hotel Policy of 2003 and, further, the CLU already having been granted to it in 2006, even though none was required.

98. The petition also relies upon a subsequent memo dated 17.06.2009 and notification dated 18.06.2009, to state that no change of land user charges would be applicable. The said circular is contended by the petitioner to be an amendment to the notification dated 11.01.2008 which stipulated that all CLU, EDC and licence fee charges would be applicable as on the date of grant of CLU/licence etc.

99. The petitioner, thereafter, relies upon Chapter-7 of the Industrial Policy of 2009 wherein, it is recommended that no approval is necessary in case of change of land use from agriculture to industry in an area earmarked for Mixed Land Use. It is, therefore, contended that as the site in question falls within the said mixed land usage zone, no approvals would be necessary for change of land use.

100. The issue of charges for change of land use having been settled DINESH 2014.11.04 15:12 73 I attest to the accuracy and integrity of this document Chandigarh in favour of the petitioner during the pendency of the petition, vide a letter of the Chief Town Planner dated 28.06.2011, to the effect that in view of a subsequent notification dated 29.06.2010, no CLU charges are leviable, the challenge to the charging of any amount for change of land use has been rendered infructuous and, as such, need not be gone into by us.

However, licence fee of Rs.46.665 lacs, External Development Charges of Rs.36.295 lacs and Social Infrastructure Fund charges to the extent of Rs.2.49 lacs have still been demanded from the petitioner.

101. As regards external development charges, reliance has been placed by the petitioner on a communication dated 05.08.2005 issued by the Government in the Department of Housing and Urban Development, to M/s Omaxe Construction Ltd., New Delhi, stating therein that external development charges would be payable only if that company were to develop the project after taking a licence under the PAPR Act, 1995.

102. On the basis of all the above, a prayer for quashing of demand raised vide the impugned letters dated 23.06.2008 and 26.08.2008 and for issuing a writ of mandamus directing the 5th respondent to sanction the building plans, has been made.

103. In the reply filed by the 5th respondent on behalf of himself and DINESH 2014.11.04 15:12 74 I attest to the accuracy and integrity of this document Chandigarh the Secretary, Housing and Urban Development (respondent no.2), it has been stated that even as per the letter of intent issued on 21.12.2005, the incentives offered were subject to the conditions contained in Clause (iii) of the said letter, which was reiterated in the agreement dated 07.07.2006.

104. The reply further states that even as per the letter granting permission for change of land user, conversion charges, external development charges, licence fee, if any, levied by the Government or any other Agency at any time would be borne by the promotors.

(emphasis applied by us).

105. The reply further states that the petitioner had submitted the building plan for construction of its hotel on 30.06.2008, by which time a notification had already been issued on 17.08.2007, fixing external development charges, conversion charges and licence fee and the said notification was further supplemented by a notification dated 19.09.2007 further modifying the said rates. Thereafter, a new policy, modifying the notification dated 19.09.2007, was issued vide notification dated 29.06.2010, in which the rates for licence fee and EDC etc. were reduced, keeping in view the global 'melt down'.

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106. Thus, it is contended in the reply that the conversion/CLU charges as were applicable on the date of grant of permission of CLU, would be applicable (which now stands amended to 'no charges'). Licence fee and external development charges, except in cases where a licence has been granted prior 08.07.2007, would however, be leviable as applicable on the date of grant/exemption of licence/approval of building plans, in those cases not covered under the PAPR Act 1995. As such, as per the respondents, the petitioner having applied only in the year 2008, the current rates as given in the policy dated 29.06.2010, would be applicable.

107. As regards the notification dated 11.01.2008, it is stated that the petitioners' site does not qualify for exemption as the following conditions are required to be fulfilled, in terms of the later notification dated 29.06.2010:-

                               •    The site should be an 80 ft. wide road,

                               •    the frontage should be 200 ft.,

• the minimum area of the site should be 5000 sq. meters, and there should be a tie up or franchise arrangement with a National/International hotel chin of repute, having at least five hotels consisting of 50 rooms each either in India or abroad.

DINESH 2014.11.04 15:12 76 I attest to the accuracy and integrity of this document Chandigarh The petitioners' site being only of an area of 4150 sq. meters and with frontage of 133'-3", it did not qualify.

108. Vide order dated 29.08.2012, this Court had directed the respondents to consider the petitioner's case in the light of the judgment in M/s Janta Land Promoters Limited v. State of Punjab and others (supra), upon which the affidavit of the Director-cum-Secretary to Government of Punjab, Department of Industry and Commerce, had been filed on 14.12.2012, to the effect that whereas in the Janta Land case, the project had been approved by the Empowered Committee under the 2003 Policy as a Mixed Land Use Industrial Park Project, the petitioners' project had been approved as a Mega hotel project and as such they could not be compared.

109. Thereafter still, the petitioner placed on record further documents, one of them being a Letter from the 5th respondent, dated 14.08.2013, stating that since the new hotel policy has not yet been notified, no action thereupon could be taken. This letter was in response to the petitioners' letter stating that as per the new parameters, the petitioner falls within the ambit of the policy decision taken on 23.07.2013 and as such, should be given the benefit of the same and the external development charges should also be charged accordingly.

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110. After the new hotel policy was notified on 20.08.2013, the petitioner again wrote to the 5th respondent with regard to the charges payable by it under the said policy.

Though no reply is stated to have been received by the petitioner in that regard, another affidavit of the Senior Town Planner is on record, stating that in terms of the letter issued on 23.06.2005 granting permission to change the use of land, as per condition no.3(v), the company would be bound to pay conversion charges, external development charges and licence fee, if any, and since the company had submitted its drawings only on 09.05.2008, by which time charges for different zones in Punjab had already been notified on 19.09.2007, the petitioner was liable to pay accordingly and was intimated as such.

111. However, since the charges were subsequently revised, hence, no CLU charges were payable; though licence fee, external development charges and Social Infrastructure Fund charges were payable.

112. As regards the comparison with the Janta land case, it is stated that in the agreement between the Government and that company, it was clearly mentioned that there would be no payment of charges of change of land use, which is not the case of the petitioner; however, because of the DINESH 2014.11.04 15:12 78 I attest to the accuracy and integrity of this document Chandigarh subsequent notification dated 29.06.2010, no CLU charges are now to be paid, with all other charges being payable, viz. EDC & licence fee.

113. As regards the hotel policy dated 20.08.2013, it is stated that it cannot be applied retrospectively to the case of the petitioner and its approval of building plans cannot be considered under the said policy.

114. Before we adjudicate upon the rival submissions, the hotel policy dated 20.08.2013 which was annexed by the petitioner subsequently, also needs to be referred to.

115. This policy was notified vide notification dated 28.08.2013, in partial modification of the notification dated 11.01.2008.

The salient feature is that it was made applicable to plots of a size starting from 2000 sq. yards upwards, and for a plot of the size of the petitioners' site (4050 sq. metres), the frontage criterion was reduced to 120ft., if the plot was located on a road at least 80ft. wide. Other than that, the salient features of the notification dated 11.01.2008 were maintained.

116. Having considered the above and the submissions of learned counsel on the same lines (Mr. Arun Jain, Senior Advocate, for the petitioner, Mr. P. S. Bajwa, learned Additional Advocate General and Mr. Sanjeev Sharma, learned Senior Advocate, for the respondents), we now go DINESH 2014.11.04 15:12 79 I attest to the accuracy and integrity of this document Chandigarh back to examining the binding agreement between the parties, which, as already held by us in the connected writ petition (CWP No.23053 of 2010), would be the document which would bind both sides, it being a contract entered into consciously by the petitioner as also the Government.

117. Therefore, the agreement dated 07.07.2006, being the 'magna carta' for this purpose, Clause 5(ii) by which the concessions have been granted, needs to be looked at, especially sub-clauses (c), (d), (e) and (f) thereof, already reproduced earlier.

118. Charges for conversion of land use having already been waived off by the Government, during the pendency of the petition, that prayer of the petitioner already stands redressed, as already said, qua clause (d).

119. As per sub-clause (c), the agreement states that licence for a hotel, restaurant and Pub/Bar was to be granted by the concerned department. However, there is no concession mentioned in the said sub- clause, or anywhere else, that such licences would be granted free of charge.

Even as per the letter dated 23.05.2006, by which the petitioner was granted change of land use, it was subject to the condition that conversion charges, External Development Charges, licence fee, if any levied by the Government, at any time, shall be borne by the promotor. DINESH 2014.11.04 15:12 80 I attest to the accuracy and integrity of this document Chandigarh Further, clause 3(iii) of the said letter required the petitioner to apply for a licence under the Punjab Apartment and Property Regulation Act, 1995 within 60 days, if required, from the date of issue of permission of change of land use. However, neither the petitioner nor the respondents have stated as to when and if the petitioner ever applied for a licence to run the project, though even the petitioner has stated in para-11 of its petition, that as per the notification dated 11.01.2008, CLU, EDC and licence fee charges would be applicable as on the date of grant of CLU/licence etc. and as such, no charges would be leviable, as per the decision taken on 03.06.2009, in the meeting chaired by the Chief Minister and attended by the Chief Secretary and Principal Secretaries of the Departments concerned, along with the Chief Town Planner, the Chief Administrator, GMADA and Chief Administrator, PUDA/GLADA. As per the said decision, CLU, EDC and licence/permission fee would be charged as on the date of issue/exemption of licence under the PAPR Act, or from the date of approval of building or grant/exemption of licence/permission or the letter of intent etc. This decision, of course, is admitted by the respondents in their replies and as such, they are held to it, there being nothing repugnant thereto, in the agreement.

DINESH 2014.11.04 15:12 81 I attest to the accuracy and integrity of this document Chandigarh

Consequently, the petitioner is held liable to pay licence fees, the amount of which is to be determined, as on the date of grant of licence.

120. As regards EDC, we do not find that the petitioner stands exempted from payment of the same by any clause of the agreement. To the contrary, it is bound to pay such charges in terms of clause (iii) of paragraph 5 thereof. Again, the question only is as to what is the rate at which the petitioner should be charged the same.

121. The petitioners' contention is that the petitioners' project of a hotel, being covered under the nomenclature of industry, charges as applicable to industries would be payable and not as applicable to commercial enterprises. For this purpose, the petitioner has relied upon the letter dated 15.01.2010 addressed by the Joint Director, Tourism, Punjab, to the effect that as per the Tourism Policy 2003 and Industrial Policy 2009, hotel projects have been considered as an industrial unit and as the petitioners' project had been approved as a mega project by the Department of Industries and Commerce, all concessions and incentives would be extended to this project.

Strangely, the reply of the respondents to this contention is that as this issue relates to the Tourism Department, it needs no comments from either the Department of Industries, nor the Department of Urban and Housing Development and the Chief Town Planner.

122. Though no reply has been filed by the Director, Tourism, Punjab, DINESH 2014.11.04 15:12 82 I attest to the accuracy and integrity of this document Chandigarh however, holding the Director bound by the letter issued from the Directorate, by the Joint Director, admitting that hotel projects are treated to be as an industrial unit as per the Tourism Policy of 2003 (and Industrial Policy 2009), we do not see as to how the petitioner can be denied that benefit, considering that it is sought to be charged external development charges also, by the respondents, as per subsequent notifications dated 11.01.2008 and 29.06.2010.

123. Hence, once the subsequent notifications, issued after the agreement dated 07.07.2006, are also being made applicable to the petitioner by the respondents and the petitioner is also seeking relief in terms of notifications and decisions taken subsequently, we hold that the policy dated 20.08.2013, issued in partial modification of the notification dated 11.01.2008, with regard to hotels, hospitals and multi-media, would also be applicable to the case of the petitioner, since approval of the building plans has still not been given to the petitioner, nor is the licence for running the hotel stated anywhere to have been granted, which are the dates on which the standing rates of EDC and license fee are applicable, as per the decision taken in the meeting held on 03.06.2009, referred to earlier.

124. As regards the Social Infrastructure Fund, having already held that to be an illegal levy/charge, in the connected writ petition, the same is DINESH 2014.11.04 15:12 83 I attest to the accuracy and integrity of this document Chandigarh quashed qua the present petitioner also.

125. Hence, to conclude, this petition is partly allowed, to the extent that the petitioner is held liable to pay external development charges and licence fee; however, the demand shall be restricted to such charges as are applicable to industry, as per rates standing on the date of approval of building plans and grant of licence, respectively.

No order as to costs.


                                                             (AMOL RATTAN SINGH)
                                                                   JUDGE


            September 29, 2014                                   (SURYA KANT)
            vcgarg/dinesh                                           JUDGE




DINESH
2014.11.04 15:12
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