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Showing contexts for: mlrc in Hindustan Unilever Ltd. And Anr vs The State Of Maharashtra And 3 Ors on 3 May, 2018Matching Fragments
8. I say that the State Government under Entries 18, 45 and 66 of List II of VIIth Schedule of the Constitution of India is competent to legislate on the legislative field of "land", including rights in or over the land, land tenures including relation of landlord and tenant and collection of rent, transfer and alienation of agricultural land, land improvement etc. and land revenue and fees in respect of J.V.Salunke,PA Judgment.WPL.122.2018+.doc any of the matters in List II. In exercise of power under entries 18, 45 and 66 of List II of VIIth Schedule of the Constitution of India, the State Government proposed amendment in Section 295 of the said Maharashtra Land Revenue Code (hereinafter referred to as the MLRC for the brevity) by moving Bill No. XL of 2016, so as to levy premium, on account of unearned income and transfer fees or charges for further assigning or transferring leasehold right, in respect of the properties belonging to the Government, to levy penalty, for contravention of said provision and to validate such premium or transfer fees or charges or penalty so levied or demanded, collected or any action taken in that respect, with effect from date of coming into force of the said MLRC. Hereto annexed and marked as Exhibit 1 is the copy of Bill No. XL of 2016 along with the statement of objects and reasons in respect of amendment to Section 295 of MLRC.
16. For these reasons, the State Government would submit that the petitions be dismissed.
17. Mr. Tulzapurkar learned senior counsel appearing for the petitioners would submit that the impugned demand is contrary to law. He submitted that there is a registered lease dated 3 rd November, 1965 executed by and between the then Governor of Maharashtra and petitioner no. 1, earlier known as Hindustan Lever Limited. The petitioner no. 1 was granted leasehold rights with respect to the said property for a period of 99 years from 5 th July, 1957. Thus, this is the effective date of the lease. Mr.Tulzapurkar would submit that there are three clauses in the J.V.Salunke,PA Judgment.WPL.122.2018+.doc lease deed, which deal with the right of assignment, namely, clauses 2(t), 2(u) and 2(v). A perusal of these clauses would reveal that there is no restriction placed on assignment of the leasehold rights. It is in these circumstances that firstly a leave and licence agreement in favour of the third respondent to the writ petition was executed in respect of the entire property. Thereafter, there was full assignment of the leasehold right in the property in favour of the Housing Development Finance Corporation Limited (HDFC) by a deed of assignment dated 29 th December, 2014. This deed of assignment was executed without any permission as that was allowed in terms of the rights created in favour of petitioner no. 1. It is only an intimation of the fact of the execution of the deed of assignment, which was given to respondent no. 2. That three months after this assignment of 3 rd March, 2015 an amendment was brought to the MLRC introducing section 37A therein. Mr. Tulzapurkar invites our attention to the proviso to section 37A and submits that the lease in favour of the present petitioner is prior to this second amendment. Section 37A is in the nature of special provision in respect of land situated in revenue division, including Mumbai city. Thereafter, another amendment was brought on 22 nd August, 2016 styled as the fourth amendment to section 295 of the MLRC. It is in these circumstances that the demand raised on J.V.Salunke,PA Judgment.WPL.122.2018+.doc the petitioner is untenable in law. Mr. Tulzapurkar would submit that no permission is required for the leasehold rights to be assigned. If in terms of the lease deed, absolute rights of the above nature are conferred on the petitioners, then, there is no obligation to share the income or pay any amount to the Government as and by way of unearned income. Mr. Tulzapurkar submits that there is an unfettered right to transfer or assign the leasehold interest in its entirety to any Indian entity without prior permission to the Government/State. The amended provision, namely, section 295 of the MLRC has no application to the transactions concluded prior to the amendment coming into force. In any event, after having knowledge of the assignment, the second respondent did not issue any demand notice on petitioner no. 1 for almost three years, but for the first time, the second respondent issued the notice demanding the amount. On the date of the assignment, the petitioners had no knowledge of any retrospective amendment being made to the provisions of law, namely, the MLRC. Hence, there is no obligation to comply with the amended provision.
(i) Govind Das and Ors. vs. The Income Tax Officer and Anr., (1976) 1 SCC 906;
(ii) Jayam and Company vs. Assistant Commissioner and Another, (2016) 15 SCC 125.
26. On the other hand, Mr. Kumbhakoni learned Advocate General appearing for the State would submit that there is no J.V.Salunke,PA Judgment.WPL.122.2018+.doc question of the State legislature being incompetent to enact the law. If it can enact the law, it is equally empowered to give the law a retrospective effect. If that does not make the law unconstitutional, then, there is no question of the statute being declared as such. Merely because in the sweep of the law, the terms of an existing contract are brought in and they can be altered, we must bear in mind that they are being altered or changed by a statutory provision. That statutory provision can operate retrospectively. In the present case, Mr.Kumbhakoni would submit that the constitutional entries and the provisions, which empower the State legislature to enact such law, to be found in the Constitution of India itself, would enable the State to enact the present provisions, namely, section 37A and the amendment to section 295 of the MLRC. Mr.Kumbhakoni would submit that if section 37A is perused with its marginal heading, it is evident that it is restricted to sale, transfer, development, change of use in respect of the Government or Nazul land. There is, thus, no conflict or repugnancy insofar as the State and a Parliamentary statute or as between two State enactments. Section 37A and section 295 of the MLRC, therefore, ought to be read in their proper perspective. As far as section 295 is concerned, by the amendments, it is applicable to leases granted by the State or the Collector of the land or foreshore vesting in the J.V.Salunke,PA Judgment.WPL.122.2018+.doc Government. It is in these circumstances that the proviso to section 295 stands incorporated in the lease deed. Equally, the proviso to section 37A(1) will have to be read as if the conditions are inserted with effect from 1st August, 1967. Thus, there is no merit in the argument that section 295 purports to amend section 108 of the Transfer of Property Act, 1882 and the laws insofar as referred in Entries 6 and 7 of List I of the Seventh Schedule to the Constitution. Hence, the argument that without any Presidential assent, the current amendments, particularly the proviso to section 295 of the MLRC cannot have any application, has no merit. That is an incorrect understanding of the provisions. There is no inconsistency in the provisions of the State law and the existing parliamentary law, namely, the Transfer of Property Act, 1882.
57. In the subsequent paragraphs, there is reliance placed on section 295 of the MLRC read with Government Resolution dated 14th June, 2017. However, surprisingly, in para 21 of the affidavit in reply, a Government Resolution dated 12th December, 2012 is referred and it is argued that it is inapplicable to this case. That applies to renewal of expired lease. That also applies in respect of permission taken of Government before assignment. In para 21, the specific stand of the State Government is that the application of the petitioner is being considered at the same time when section 295 of the MLRC has come into operation and therefore, the same is made applicable and the procedure and percentage of calculation of unearned income laid in Government Resolution dated 14th June, 2017 is therefore applied. Surprisingly, then it is stated that even before the amendment of section 295 of the MLRC, the Government was recovering unearned income as per the Government decision. Every action and the decision of the Government, taken earlier in respect of unearned income, has been validated by section 295 of the MLRC and thus section 295 of the MLRC is deemed to be in the MLRC from the date when the MLRC came into effect, namely, 1 st August, 1967. Then, there is an additional affidavit on behalf of respondent nos. 1 to 3 referring to section 37A of the MLRC and it is stated to be inserted with effect from 3 rd March, 2015. That is J.V.Salunke,PA Judgment.WPL.122.2018+.doc an admitted date and equally the other admission is a fact that the Maharashtra Act XXIX of 2016 is gazetted on 22 nd August, 2016 and that is how the proviso to section 295 of the MLRC is added with effect form that date. In para 4 of the additional affidavit in reply reproduced above, a reference is made to three Government Resolutions dated 12th December, 2012, 20th February, 2016 and 14th June, 2017.