Patna High Court
Ramjee Sah vs The State Of Bihar & Ors on 18 May, 2016
Author: Kishore Kumar Mandal
Bench: Kishore Kumar Mandal
IN THE HIGH COURT OF JUDICATURE AT PATNA
Civil Writ Jurisdiction Case No.13485 of 2013
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Ramjee Sah S/o Sri Bhikham Sah Resident of Suhiya, P.S- Shahpur, District-
Bhojpur.
.... .... Petitioner
Versus
1. The State of Bihar through its Principal Secretary, Industries, Government of
Bihar, Patna.
2. Bihar Industrial Area Development Authority, 1st Floor, Udyog Bhawan, East
Gandhi Maidan, Patna through its Managing Director.
3. Managing Director, Bihar Industrial Area Development Authority, Udyog
Bhawan, Gandhi Maidan, Patna.
4. Bihar State Financial Corporation, Fraser Road, Patna through its Managing
Director.
.... .... Respondent/s
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Appearance :
For the Petitioner/s : Mr. Manik Ved Sen
Mr. SUBHASH CHANDRA BOSE
For the BIADA Mr. Yashraj Bardhan
For the BSFC Mr Raj Nandan Prasad
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CORAM: HONOURABLE MR. JUSTICE KISHORE KUMAR MANDAL
ORAL JUDGMENT
Date: 18-05-2016
The petitioner is the auction purchaser of the mortgaged assets of
the original loanee M/s Bhojpur Bucket Industry from the Bihar State Financial
Corporation (for short „the Corporation‟) in pursuance of the action taken by the
Corporation against the original loanee in terms of sections 29 and 30 of the
State Financial Corporation Act 1951. By filing the present writ application, he
seeks a direction to quash the demand of the respondent Bihar Industrial Area
Development Authority (for short „the BIADA‟) for change in the name and
project as also transfer of the lease-hold sought in the name of the petitioner
as contained in letter dated 21.01.2013 to the extent that it includes the transfer
charge in the sum of Rs. 1,71,329.00. He also prays for a direction upon the
respondent BIADA to consider and approve the petitioner‟s request for change
in the name and project on payment of the prescribed fee only.
Patna High Court CWJC No.13485 of 2013 dt.18-05-2016
2/10
The brief background of the sequence of events giving rise to the
present writ application are as follows:-
The original loanee of the Corporation defaulted in making
payment of the loan advanced by the Corporation and, as such, the loanee
was proceeded against by the Corporation for realization of the dues, in
consequence whereof the petitioner purchased the mortgaged assets of the
lessee M/s Bojpur Bucket Industries from the Corporation for a consideration
amount of Rs. 4.10 lakh payable in instalment. The sale letter dated 13.03.2008
issued by the respondent Corporation is Annexure-1. The sale agreement cum
payment of balance loan was executed on 30.06.2008 (Annexure-3). The
mortgaged assets of the original loanee was handed over to the petitioner-
purchaser. The petitioner was required to approach the BIADA with project
report and prescribed fee for the change in the name and project which was
done. The BIADA returned the application. The petitioner, in such
circumstances, being threatened with eviction, filed a writ petition in which,
vide order dated 29.03.2011 (Annexure-7) and the subsequent order dated
27.02.2012, referred the matter to the Industrial Development Commissioner (IDC), who is also the Chairman of the BIADA. Vide order dated 08.08.2012 the Principal Secretary, Department of Industries passed the order (Annexure-
8) and held as follows:-
^^2- tgkW rd lh0MCyw0ts0lh0 la[;k 15639@2009 ¼Jh leth lkg½ dk iz"ugS] izca/k funs"kd] ^fc;kMk^ us crk;k fd vkosnd Jh jketh lkg us fcgkj jkT; foRrh; fuxe dh iwoZ defaulter unit loZJh Hkkstiqj cdsV b.MLVªht dks fuykeh esa [kjhnk A ^fc;kMk^ dks foRrh; fuxe dh fuykeh ds vuqlkj yht MhM muds uke ls djus esa dksbZ vkifRr ugha gS exj vkosnd dks ^fc;kMk^ ds yht transfer fu;e ds vuqlkj vko";d jkf"k tek djuk gksxk A Jh jketh lkg ds vf/kDrk dk dguk Fkk fd ;g rks fcgkj jkT; foRrh; fuxe ls fuykeh esa mUgksaus izkIr fd;k gS] vr% vyx ls ^fc;kMk^ }kjk transfer "kqYd izkIr djus dk iz"u ugha mBrk gS A eSaus bl fo'k; ij fopkj fd;k A fcgkj jkT; foRrh; fuxe us Hkys gh bl bdkbZ dh fuykeh Patna High Court CWJC No.13485 of 2013 dt.18-05-2016 3/10 fd;k gks] exj vc mldk LokfeRo ifjofrZr gks jgk gS] vr% bls ^fc;kMk^ yht MhM dk gLrkafjr gh ekuk tk,xk rFkk mUgsa ^fc;kMk^ ds fu;eksa ds vuqlkj transfer "kqYd dk Hkqxrku djuk gksxk A rn~uqlkj Jh jketh lkg ds vkosnu dk fuLrkj fd;k tkrk gS A ckdh nksuksa vkosndksa] Jh iznhi dqekj ¼CWJC No.15634/2009½ ,oa Jh xaxk lkxj lkg ¼CWJC No.15640/2009½ ds ekeys esa lquokbZ dh vxyh frfFk fnukad 13-09- 2012 dks vijkg~u 4-30 cts fu/kkZfjr dh tkrk gS A^^ The pending writ petition was disposed of on 04.12.2012 (Annexure-10) with observation, inter alia, that if a decision is taken by the BIADA in furtherance of the order of the Industrial Development Commissioner, the petitioner could have a cause of action to assail the legality thereof. It is stated that the petitioner waited for more than four months and vide letter dated 20.12.2012 (annexure C to the counter affidavit of the BIADA) sought compliance of the decision of the IDC dated 08.08.2012 (Annexure-8) and requested to apprise him of the quantum of fee for payment. It was not a waiver of his right to challenge the charge of transfer fee by the BIADA. The BIADA, in all fairness, could have demanded only the prescribed fee for the change in the name and project. There was nothing for the BIADA to transfer as the Corporation had already sold the mortgaged asset including the leasehold rights over the land and the petitioner had stepped into the shoes of the erstwhile lessee and was obliged to pay a huge dues of the erstwhile lessee for a leasehold land measuring only 4200 sq.ft for the residual period of lease of only 51 years out of original 99 years of lease. The BIADA, vide impugned demand dated 21.01.2013 (Annexure-11), unjustifiably demanded a huge amount of Rs. 2,53,819/- ordinary charge of Rs.4,532/- as also a sum of Rs. 1,71,329/- being 15% of the circle rate as transfer fee which, according to the petitioner, was more than the current rate on which BIADA allotted the leasehold land for 90 years. As an example, the document at Annexure-13 Patna High Court CWJC No.13485 of 2013 dt.18-05-2016 4/10 has been placed in respect of 7500 sq. ft. of the leasehold land for 90 years only for Rs. 99,375. It is stated that at this rate the petitioner‟s 4200 sq.ft land for residual period of 51 years would work out to Rs. 30,000/- only which at best could have been charged as the fee.
The counsel for the petitioner has submitted that the basic issue in the case is whether the petitioner who purchased the mortgaged assets of the sick Unit from Corporation along with the land allotted/leased out to the defaulting Unit (M/s Bhojpur Bucket Industry) is not required to pay anything more to BIADA than its dues against the erstwhile lessee, particularly when the petitioner being the auction purchaser stepped into the shoes of the defaulting Unit. It is contended that the BIADA is entitled to demand to pay only the normal transfer fee for registering the allotted/leased out land of the defaulting Unit of the Corporation in favour of the auction purchaser i.e. the petitioner. In support of his contention, he has relied on the case of M/s Vikramshila Transformers vs. The State of Bihar ( [1994 (1) PLJR 601] wherein, as per his submission, the change sought is only the change in the name of erstwhile loanee with the name of the petitioner/purchaser of the mortgaged assets. Referring to the letter dated 13.09.2013 (annexure G to the counter affidavit of the BIADA), it is explained that, as the matter was getting delayed, the petitioner offered BIADA to accept the old dues pending adjudication as also the transfer fee/charge and permit registration so that the Unit could be started and the petitioner is able to save from loss of huge investment made. The petitioner paid the demand subject to the outcome of the writ petition which was accepted by the respondent BIADA. It was not a waiver of the claim. Be it noted the demand under the impugned notice raised by the respondent BIADA was paid by the petitioner which includes the transfer charge/fee in the sum of Rs. 1,71,329.00.
Patna High Court CWJC No.13485 of 2013 dt.18-05-2016 5/10 The counsel for the respondent BIADA, per contra, urged that the petitioner cannot be considered as a separate class. There is a uniform policy of charging transfer fee where any kind of transfer from one ownership to another ownership is requested by the applicant @ 15% calculated on circle rate of the land prevailing on the day. Such demand of respondent BIADA to charge fee @ 15% of circle rate of the land prevailing on the day became the subject matter of the litigation and the Hon‟ble division bench in LPA No. 68 of 2008 (The BIADA vs. Sri Amit Kumar)) held that the BIADA is entitled to charge 15% of the BIADA rate and not the circle rate for according permission for transfer of the leasehold rights. The said order has been challenged before the Hon‟ble Supreme Court in SLP (C ) No. 19367 of 2015 wherein vide order dated 16.11.2015 an interim order of stay has been passed. Thus, the office order raising a demand of transfer fee on circle rate is sustainable in law. In this connection, he has further highlighted that in Appeal No. 19 of 2012 the authority, vide order dated 08.08.2012 (Annexure-8 to the writ petition) clearly held that the petitioner shall deposit the transfer fee winch is not under challenge and therefore the petitioner cannot contend that he is not amenable to the transfer charge/fee. He also referred to the Annexure C to G of the counter affidavit of the respondent BIADA in order to submit that the petitioner had accepted the demand of transfer fee made by the respondent BIADA and thereby waived his right. He also referred to Annexure-1 (the sale order) issued by the respondent Corporation where the condition was that the respondent BIADA may require for execution of fresh lease deed. Clause 18 of the annexure-1 has specifically been referred to. As about the terms of lease deed are concerned, the respondent BIADA is Parri Passu charge holder with the BSFC on the mortgaged assets as BIADA is the owner of the land and thus before auction sale there was a requirement of permission/information to Patna High Court CWJC No.13485 of 2013 dt.18-05-2016 6/10 BIADA which has not been done in the case of the petitioner. The petitioner cannot get the better title than the original lessee and the mortgagor. What the petitioner purchased in the auction sale is only a leasehold property without any information to the original owner. However, the seller (BSFC) safeguarded the interest of the owner (BIADA) by contemplating in the sale letter that its dues shall have to be deposited and it may execute a fresh lease deed. The terms of the lease deed provide that firstly the land should be offered to BIADA before any transfer and in case of refusal only it could be transferred. In Vikramshila Transformers (supra), a division bench of this Court in paragraph 9 held as under:-
"9. We have therefore, no doubt that he lease deed in favour of M/s Graduate Engineers created a transferable interest in land. It permitted the lessee to mortgage its lease hold interest in favour of the financial institutions without seeking separate permission to do so. I was therefore, open to the financial institution to enforce the mortgage and to bring the lease hold interest to sale. Upon such sale being effect, the purchaser stepped into the shoes of the original lessee and the respondent Authority was bound by the terms of the lease to substitute his name in place of the original lessee. There is no provision in the lease deed for payment of any amount by way current market price by the purchaser of lease hold interest. The imposition of a condition under Annexure-4 requiring the purchase to pay against the market price of the land in question is, therefore, clearly illegal and must be quashed."
In the said case, the BIADA raised a demand requiring the purchaser to pay again the market price of the land in question. In the case at hand the respondent BIADA has demanded the transfer fee @ 15% of the circle rate and not according to the market price of the land. A division bench in LPA No. 68 Patna High Court CWJC No.13485 of 2013 dt.18-05-2016 7/10 of 2008 has upheld the claim of the BIADA in charging 15 % of the BIADA rate for transferring the name of the leaseholder/allottee. The BIADA in support of its contention also referred to an unreported judgment dated 28.09.2015 (M/s CTS Industries Ltd. vs. State of Bihar/CWJC No. 1755 of 2011). This Court, however does not find much relevance of the case since in the said case an order was passed in Company Appeal (DB) No. 08 of 2010.
The question is whether it is a fee or the price which is being demanded by the respondent BIADA. The petitioner has not disputed the right of the respondent BIADA to charge fee for change of the ownership of the leasehold right of the land as the BIADA is unquestionably the owner thereof. The sale order (Annexure-1) is issued by the respondent BSFC clause 18 thereof reads as under:-
"18. The present lease hold plot being sold stands mortgaged to the Corporation. If the concerned Industrial Area Development Authority considers execution of fresh lease deed in favour of the purchaser then the purchaser will ensure the submission of the original copy of the registered new lease deed by the r Industrial Area Development Authority, or a certified copy of the registered new lease deed along with registration receipt thereof duly discharged in favour of the Bihar State Financial Corporation to the Legal Section/Branch Office of the Corporation."
The policy decision of the Board of Directors of the respondent BIADA for charging such fee for change in the name is not under question. The transfer fee, according to the petitioner, being charged by the respondent BIADA is actually much higher than the current price of the land. Such price of the land at best could be the leasehold land and not the free hold land. On going through the case of M/s Vikramshila Transformers (supra) this Court Patna High Court CWJC No.13485 of 2013 dt.18-05-2016 8/10 finds that a small scale industry took the loan from the BSFC to set up the industry. Lease of the land was granted in favour of the industry by the government. The industry defaulted in payment of its dues to the BSFC which led the BSFC to auction the mortgaged assets of the defaulting industry. The offer made by the petitioner firm was accepted. The leasehold right in the plot/land was mortgaged by the defaulting Unit in favour of the BSFC. Upon conclusion of all formalities, the sale deed was executed by the BSFC in favour of the petitioner assigning leasehold interest in respect of the land and property together with the building/structure thereon. The Court found it a sale complete in all respects of the leasehold right of the BSFC over the land in question. The-Company applied for registration as a small scale industry and for transfer of the lease deed in favour of the petitioner-Company. The respondent authority granted permission to transfer the leasehold interest in favour of the petitioner-Company on certain condition(s). The challenge was only with respect to the condition whereunder the petitioner-Company was required to pay the market price of the land. The challenge to the said demand was resisted by the respondent authority contending that the price of the land had risen/shot up manifolds and, therefore, the respondent authority was justified in demanding the price of the land at the current rate from the new purchaser of the leasehold rights. As noticed hereinabove, the imposition of the said condition to pay again the market price of the land was found illegal and arbitrary. Looking to the case at hand what appears is the BIADA being the owner of the land is demanding the transfer fee/charge at a particular rate as per the policy decision of the BIADA. It is not the market price but 15% of the circle rate of the land. What the BSFC transfers to the petitioner is the mortgaged assets which include the land in favour of the BSFC. It could be a freehold or leasehold land. In the case at hand, it was leased out/allotted to the Patna High Court CWJC No.13485 of 2013 dt.18-05-2016 9/10 defaulting Unit by the BIADA. The sale order contemplates that the BIADA may consider execution of the lease deed in favour of the purchaser (the petitioner). The Condition under Clause 13 of the sale order provides that the BSFC shall not be liable for any other liability in respect of the subject land/asset. A division bench of this Court has as recently as on 11.05.2015 did not find any unreasonableness in demand of the BIADA to levy fee which should be at the BIADA rate and not the circle rate. As noticed above, the Apex Court on a special leave petition filed thereagainst has stayed the operation of the order. The Court bereft of the aforesaid judgment has to consider whether the claim of the petitioner in the light of M/s Vikramshila Transformers (supra) is fit to be upheld/sustained. In the said case a sale deed was executed by the BSFC transferring/assigning all rights in the leasehold property to the purchaser and thereafter the respondent authority demanded current market price of the land to grant permission to transfer the leasehold interest in favour of the purchaser of the assets including the land. The division bench held that upon such sale being effected by the BSFC the authority was bound by the terms of the lease to substitute his name in place of the original lessee. The demand of payment of the market price of the land by the respondent authority was thus held unjustified. The legal connotation of price of the land and the fee for transfer of the leasehold land are different and distinct. A fee can be fixed or relatable to the value of the land but not the market price of the land. What the BIADA is demanding is certain percentage of the value of the land and not the market price of the land. The BIADA is the land owner. The procedure for registration of change in the name may be merely a change of name in the records of BIADA or by executing fresh lease document in favour of the auction sale purchaser. That apart, such fee at certain percentage of circle rate is stated to be a policy decision of BIADA Patna High Court CWJC No.13485 of 2013 dt.18-05-2016 10/10 applied uniformly which is not under challenge.
In these backgrounds, I am unable to agree with the submissions of the counsel for the petitioner that the case of the petitioner is squarely covered by the division bench judgment of this Court in Vikramshila Transformers (supra). The said case was rendered in different factual background. The question whether the petitioner waived his rights by paying off all the demands under the impugned notice of BIADA rendering the writ application infructuous, is not gone into by the Court as on appreciating the contention of the parties, this Court has opined that based on M/s Vikramshila Transformers (supra) the claim of the writ petitioner would not be sustainable in law.
Much has been argued with regard to abnormal demand of the BIADA. On the basis of the pleadings on record and the legal issues projected, the Court would not delve into the said submission of the petitioner. At the cost of repetition, the Court would notice that the policy decision of the BIADA to charge such transfer fee is not under challenge. If that be the case, then how the demand raised on the basis of the policy decision can be challenged by the petitioner and, that too, after paying off those demands of the BIADA. The relevant facts with respect to the market rate of the land and the circle rate of the land fixed by the government have not been placed by the parties.
Seen thus, the Court is unable to find merit in this writ application which is accordingly dismissed.
No order as to cost(s).
(Kishore Kumar Mandal, J) HR/-
U