Acme Housing India Pvt Ltd And Anr vs State Of Maharashtra And Ors
2021 Latest Caselaw 14824 Bom

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         IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                 CIVIL APPELLATE JURISDICTION
                       WRIT PETITION NO.2612 OF 2021

ACME Housing India Pvt. Ltd. & Anr.                  ... Petitioners
           V/s.
State of Maharashtra & Ors.                          ... Respondents


Dr.Milind Sathe, Senior Advocate, Ms.Nanki Grewal, Mr.Viren Mandhle i/b
Wadia Ghandy & Co. for the Petitioners.

Mr.A.M.Kulkarni "A" Panel Counsel with Mr.R.P.Kadam AGP for
Respondent No.1 - State.

Dr.Ranji Thorat with Chirag Shah and Raj Adhia for Respondent Nos.2 & 3
- Thane Municipal Corporation.



                                  CORAM: UJJAL BHUYAN AND
                                         MADHAV JAMDAR, JJ.

DATE : 11TH OCTOBER, 2021.

P.C:-

Heard Dr.Milind Sathe, learned Senior Counsel for the Petitioners; Mr.R.P.Kadam, learned AGP with Mr.A.M.Kulkarni, learned "A" Panel Counsel for Respondent Nos.1 and 4 - State; and Dr.Ranjit Thorat, learned Senior Counsel for Respondent Nos.2 and 3 - Thane Municipal Corporation.

2. Matter was heard at some length on 6.10.2021 on the issue of interim relief.

3. The order is dictated in open Court today.

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4. For consideration of the prayer for interim relief, a brief recital of the facts is considered necessary.

4.1 Subject matter of the Writ Petition pertains to immovable property bearing Gut No.61/1 admeasuring 46,400 sq. mtrs. and Gut No.61/2 admeasuring 8,100 sq. mtrs., aggregating 54,500 sq. mtrs., situated at village Chitalsar, Manpada, Thane (referred to hereinafter as "said land")

5. On 25.07.1985, an order was passed by the Deputy Collector and Competent Authority under section 8(4) of the Urban Land (Ceiling and Regulation) Act, 1976 (referred to hereinafter as "ULC Act") computing surplus vacant land at 20,622.80 sq. mtrs. It may be mentioned that the said land was then under the ownership of the erstwhile owner Shah Malleable Castings Ltd.

6. Following the order dated 25.07.1985, the Joint Director of Industries (ULC Branch) passed the order under section 20(1) of the ULC Act on 21.01.1986 exempting the vacant land with respect to Gut No.61/1 forming part of said land from the provisions of Chapter III of the ULC Act. This exemption order was made subject to certain terms and conditions.

7. In the meanwhile development plan of Thane Municipal Corporation area was sanctioned in the year 1991. As per development plan, the said land was converted from industrial zone into partly residential zone and partly market and for road reservation.

8. In view of sanctioning of the development plan with conversion of said land from industrial zone to partly residential zone, erstwhile owners

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2.w2612.21.doc submitted application before the Competent Authority for passing of revised order under section 8(4) of the ULC Act on 1.09.1997.

9. On the basis of the aforesaid application, the Competent Authority i.e. Deputy Collector passed fresh order on 20.11.1997 under section 8(4) of the ULC Act computing surplus vacant land to be 114.72 sq. mtrs. which was sought to be acquired from Gut No.61/2.

10. Thereafter notification dated 26.05.2005 was issued under section 10(1) of the ULC Act notifying the above area of 114.72 sq. mtrs. for acquisition from Gut No.61/2.

11. It may be mentioned that on 1.12.2007 State of Maharashtra adopted the Urban Land (Ceiling and Regulation) Repeal Act, 1999 and the same came into force with effect from 29.11.2007.

12. Government of Maharashtra framed rental housing policy for Municipal Corporation of Thane on 4.11.2008. This rental housing policy contemplated construction and handing over by the developer rental units free of costs to Mumbai Metropolitan Region Development Authority (MMRDA). The object of the rental housing plan was to provide affordable housing to persons belonging to lower income group on rental basis.

13. It is stated that on 18.03.2009 MMRDA granted location clearance to the Petitioners. It may be mentioned that in the year 2007 Petitioners had acquired right, title and interest over the said land from the erstwhile owners.

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14. On 11.08.2011 Respondent No.2 had informed architect of the Petitioner that said land was transferred from industrial zone to residential zone with certain market and road reservations.

15. Though certain developments had taken place in the interregnum, reference to the same may not be necessary for the purpose of the present order.

16. On 25.02.2021 Respondent No.4 i.e. Collector of Thane issued letter directing Respondent No.5 - Tahsildar, Thane for insertion of entry in 7/12 extracts of Gut No.61/1 on the ground that said land was exempted for industrial purpose and there was prohibition on transfer without prior permission of the Government. This was followed by insertion of mutation entry No.1125 in the 7/12 extracts of Gut No.61/1 on 26.02.2021 stating that under section 20 of the ULC Act exemption was granted for industrial purpose and that there was prohibition on transfer without prior permission of the Government. Thereafter notice was issued by Respondent No.3 to the Petitioners on 25.05.2021 to show cause as to why Petitioners should not be directed to stop work. Ultimately, stop work notice was issued to the Petitioners by Respondent No.3 on 10.06.2021.

17. It was at that stage that the present Writ Petition came to be filed assailing the letter dated 25.02.2021, mutation entry No.1125 dated 26.02.2021 and the notice dated 10.6.2021.

17.1. This Court by order dated 24.08.2021 recorded the grievance of the Petitioners and called upon learned Counsel for the Respondents to obtain instructions regarding withdrawal of stop work notice and to pass fresh orders after hearing the Petitioners. Order dated 24.08.2021 reads as under :

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"Heard. By this petition under Article 226 of the Constitution of India, the Petitioners are seeking declaration that the Urban Land (Ceiling and Regulation) Act 1976 (ULC Act) does not apply to the land bearing Gut No.61/1 and 61/2, Village Chitalsar, Manpada, Thane admeasuring 54500 sq.mtr. The Petitioners also seek to direct Respondent Nos.4 to withdraw / cancel the communication dated 25.02.2021 and direct them to delete the ME No.1125 dated 26.02.2021 from the revenue record of the said land. The Petitioners also challenge the letter dated 25.05.2021 and 10.06.2021 issued by Respondent No.3 Thane Municipal Corporation restraining the Petitioners from continuing the construction work on the plot bearing No.61/1 and 61/2 ofVillage Chitalsar, Manpada, Thane.

2 The learned senior counsel for the Petitioners submits that in the present proceedings the Respondent Thane Municipal Corporation had issued show cause notice dated 25.05.2021 calling upon the Petitioners to show cause, why stop work notice should not be issued to them in respect of the construction on a plot bearing Gut No.61/1 and 61/2.The Municipal Corporation called upon the Petitioners to submit their reply within 15 days from the date of the said show cause notice. It is also stated in the said show cause notice that if the explanation is not filed within 15 days, it will be construed that the Petitioners have nothing to say and further necessary action would be taken, as per the Rules. The learned senior counsel for the Petitioners submits that as soon as they received show cause notice dated 25.05.2021, they replied by their letter dated 10.06.2021 explaining how the said land is not affected by the ULC Act and also the ME No.1125 is not correct. The learned senior counsel for the Petitioners

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2.w2612.21.doc submits that before completion of 15 days from the date of issuance of show cause notice, the Respondent Corporation issued stop work notice of the construction work on the said land on 10.06.2021 itself. He submits that the said stop work notice dated 10.06.2021 has been issued by the Respondent without hearing the Petitioners and /or considering the reply. He submits that before completion of 15 days from the date of show cause notice, they passed the impugned notice dated 10.06.2021. He submits that on this count, the said show cause notice is required to be set aside.

3 When this court had called upon the advocate for the Municipal Corporation, whether they are ready and willing to withdraw the stop work notice dated 25.05.2021 and hear the Petitioners and pass an order thereafter, the learned senior counsel for the Respondents seeks sometime to take instructions from the concerned authority. At his request, Office is directed to place the matter on board 25.08.2021."

18. On 25.08.2021 learned Counsel representing Respondent Nos.2 and 3 submitted that he had received instructions that said Respondents would hear the Petitioners afresh. On that basis stop work notice dated 10.06.2021 was set aside and Respondent No.3 was directed to hear the Petitioners afresh. Order dated 25.08.2021 is extracted hereunder :

"Heard.

2. The learned senior counsel for Respondent Nos. 2 and 3 submits that he received instructions from his client that they are ready and willing to hear the Petitioners on the notice dated 25/05/2021 on 27/08/2021 at 3.00 p.m. The statement is accepted.

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3. At this stage, the learned senior counsel for the Petitioners submits that they may be permitted to file an additional submissions before Respondent No.3 on or before 26/08/2021. The same is permitted.

4. Without going through the merits of the matter, the following order is passed:

a. Order dated 10/06/2021 (Exhibit-CC, Page-288) passed by Respondent Corporation about to stop work is set aside. b. The Petitioners are permitted to file an additional submissions with Respondent No.3 on or before 26/08/2021.

c. Respondent No.3 to hear the Petitioners on 27/08/2021 as per their notice dated 25/05/2021 at 3.00 p.m. d. Respondent No.3 to communicate their decision in writing to the Petitioner immediately.

e. The Respondents to file reply on or before 01/09/2021, with copy to other side.

f. Matter to appear on board on 03/09/2021."

19. Thereafter Petitioners were heard by the said Respondents. By letter dated 30.08.2021, Respondent No.3 informed the Petitioners that their submissions were rejected and that there was no reason to withdraw the impugned letter dated 25.05.2021. This was followed by stop construction notice dated 30.08.2021 addressed to the Petitioners by Respondent No.3.

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20. The above developments have since been brought on record by way of amendment of the Writ Petition with additional challenge to the above notice dated 30.08.2021.

21. In the hearing which took place on 30.09.2021 Mr.Thorat, learned Senior Counsel for the Thane Municipal Corporation i.e. Respondent Nos.2 and 3 submitted that the said Respondents had only carried out the directions of the Collector. Therefore the primary authority to defend the impugned order would be the Collector.

22. Respondent Nos.1 and 4 have filed reply affidavit through Shri Rajesh J. Narvekar, Collector and Competent Authority, Thane Urban Agglomeration, Thane. We will advert to this affidavit when we deal with the submissions made by the learned AGP.

23. Dr.Sathe, learned Senior Counsel for the Petitioners submits that after revised order under section 8(4) of the ULC Act was passed on 20.11.1997, the original order under section 8(4) dated 25.07.1985 had ceased to exist. It is the revised order which holds the field. Therefore exemption order passed under section 20(1) of the ULC Act on 21.01.1986 based on the earlier section 8(4) order would not survive. In support of his submission, learned Senior Counsel has relied on the provisions of the ULC Act as well as a Division Bench decision of this Court in Bombay Fibre Industries Pvt. Ltd. vs. State of Maharashtra; 2018 (3) Mh.L.J. 404. In addition, he submits that impugned action of the Respondents is highly unfair and unjust. Petitioners are presently constructing six rental housing buildings comprising 2448 residential units and 54 commercial units; 10 sale buildings comprising 1862 residential units and 194 commercial units. Petitioners have obtained occupancy certificate for four buildings

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2.w2612.21.doc from the rental housing component comprising 1609 residential units and 41 commercial units as well as six buildings from the sale component comprising of 1010 residential units and 7 commercial units. Two buildings from the rental component and five buildings from the sale component are still under construction. As on date, Petitioners have handed over 496 units to MMRDA, having invested about Rs.1352 crores towards development of the said land. At this stage it would be wholly unfair and inequitable to direct the Petitioners to stop work on the above ground which otherwise also is highly unsustainable in law.

24. Learned AGP for the Respondent-State has strongly contested the submissions made by Dr.Sathe, learned Senior Counsel for the Petitioners. Relying on the reply affidavit as well as the provisions of the ULC Repeal Act more particularly section 3 thereof he submits that the conditions of exemption order under section 20 of the ULC Act will survive despite repeal of the ULC Act. Referring to the revised order dated 20.11.1997 passed under section 8(4) he submits that the said order was passed after deducting exempted area for industrial use as per the exemption order. After referring to the details in paragraph 7 of the reply affidavit, he submits that as against 114.72 sq. mtrs., surplus vacant land is actually 43,871.32 sq. mtrs. If the land was under industrial zone then for conversion and exemption to construct housing premises, permission of the State Government is required. That having not been done, no fault could be found with the impugned letters and actions of the Respondents. Referring to the averments made in paragraph 11 of the reply affidavit, he submits that as per Government Resolution dated 17.07.1997 if previous order passed under section 20 of the ULC Act is for industrial purpose, due to change in Development Control Rules, change of user of such land is permitted but before passing any revised order under section 8(4) of the

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2.w2612.21.doc ULC Act, the order passed under section 20 has to be cancelled first. He further submits that even otherwise also no prejudice will be caused to the Petitioners by the impugned action as the Petitioners can apply for use of such land by paying higher premium, which is 15% of the annual statement rate (ASR), as a one time settlement mentioned in paragraph 21 of the reply affidavit. Therefore submission is that no interim relief should be granted to the Petitioners.

25. Submissions made by learned Counsel for the parties have been duly considered.

26. Section 6 of the ULC Act provides that every person holding vacant land in excess of ceiling limit at the commencement of the ULC Act should file a statement before the jurisdictional Competent Authority specifying details of vacant excess land. Once such statement is filed, the Competent Authority is required to carry out inquiry under section 8 and thereafter prepare a draft statement. Sub-section (4) of section 8 is relevant. It says that the Competent Authority shall duly consider any objection received within the period specified and after giving the objector, if any, reasonable opportunity of being heard pass such orders as it deems fit.

26.1. State Government was conferred power to exempt such vacant surplus land from the purview of the ULC Act under section 20. It says that notwithstanding anything contained in Chapter III of the ULC Act, the State Government may by order exempt such vacant land from the provisions of Chapter III subject to conditions that may be specified. Such exemption order can be passed by the State Government either on its own motion or otherwise.

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27. By the Urban Land (Ceiling and Regulation) Repeal Act, 1999 the ULC Act was repealed. However, as per section 3(1)(b) the repeal of ULC Act would not effect the validity of any order granting exemption under sub-section (1) of section 20 or any action taken thereunder notwithstanding any judgment of any Court to the contrary.

28. In the present case what we find is that initially an order was passed under section 8(4) on 25.07.1985 declaring certain areas from Gut No.61/2 and part of Gut No.61/1 as surplus vacant land. On the basis of such order passed under section 8(4) the exemption order in respect of surplus vacant land came to be issued on 21.01.1986. It may be mentioned that the exemption order was in respect of Gut No.61/1 only. As we have noticed above, the development plan of Thane Municipal Corporation area was sanctioned in 1991 whereafter erstwhile owners of the said land had submitted an application for passing of revised order under section 8(4) of the ULC Act. On the basis of such application, the Competent Authority passed fresh order under section 8(4) of the ULC Act, this time computing the surplus vacant land to be 114.72 sq. mtrs. and sought to be acquired from Gut No.61/2. This order came to be passed on 20.11.1997. Following this order vacant surplus land was acquired as per the procedure laid down in the ULC Act.

29. Question for consideration is after revised order under section 8(4) is passed, what would be legal status of exemption order passed under section 20(1) of the ULC Act passed on the basis of previous section 8(4) order ?

30. On a prima facie understanding of the fact situation, a view can be taken that upon revision, the earlier order no longer exists and what exists

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2.w2612.21.doc is the revised order. If that be so then a prima facie view can also be taken that the exemption order which was passed on the basis of the initial section 8(4) order may have become redundant after passing of the revised order.

31. A Division Bench of this Court in Bombay Fibre Industries Pvt. Ltd. (supra) referring to one of its earlier decisions in M/s.Essen Realtors vs. State of Maharashtra, decided on 7.11.2017, has taken the view that upon passing of fresh order under section 8(4) of the ULC Act holding that the original owner did not hold vacant land in excess of ceiling limit, the exemption order under section 20 of the ULC Act becomes nonest and a declaration regarding cancellation of the exemption order is not necessary.

32. Of course, in that case original section 8(4) order was set aside by the Appellate Authority whereafter the matter was sent back on remand. It was on remand that fresh order under section 8(4) was passed and it was in that context the above principle of law has been laid down. Nonetheless in the said case, this Court referred to section 3(1)(b) of the ULC Repeal Act and held that the savings clause under section 3 of the ULC Repeal Act would operate only in cases where a valid exemption order under section 20 of the ULC Act is existing. When the subsequent revised order was passed by the Competent Authority under section 8(4) of the ULC Act whereby it was held that the owner did not have land in excess of the ceiling limit, question of existence of exemption order under section 20 of the ULC Act would not arise. Once it is held that exemption order under section 20 of the said Act ceases to exist or it stood cancelled upon the Competent Authority passing fresh order under section 8(4) there can be no mutation entry pertaining to the land in question stating that the land is subject to exemption under section 20 of the ULC Act for industrial user.

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33. Prima facie the principle of law laid down in Bombay Fibre Industries Pvt. Ltd. (supra) would be applicable to the facts of present case. As already noted above, the issue involved is what would be the impact of the revised order under section 8(4) on the exemption order under section 20 passed on the basis of the earlier section 8(4) order ? This will require further deliberation.

34. In the circumstances the following order is passed :

(i) Let the Writ Petition be admitted for hearing.

(ii) As an interim measure, we direct stay of mutation entry No.1125 and the stop work notices dated 30.06.2021 and 30.08.2021.

(iii) Respondent No.4 shall inform the Petitioner the amount of premium @ 15% of the ASR as mentioned in paragraph 21 of the affidavit in reply. Petitioners shall identify and not sell the flats of that value as per the ready reckoner rate for the year 2021 from the sale building pending the hearing of the Writ Petition.

        (iv)    Hearing of the Writ Petition is expedited.




      [MADHAV JAMDAR, J.]                            [UJJAL BHUYAN, J.]