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