Sir Gangadharrao Chitnavis ... vs The Nagapur Municipal ...
2022 Latest Caselaw 12818 Bom

                                                1                               wp-167-21j.odt

            IN THE HIGH COURT OF JUDICATURE AT BOMBAY
                      NAGPUR BENCH, NAGPUR

                        WRIT PETITION NO. 167 OF 2021

Sir Gangadharrao Chitnavis Memorial Medical
Research Trust,
Office at - 66, Temple Road, Civil Lines,
Nagpur through Authorised Trustee-
Ms. Awantika Chitnavis                                                 . . . PETITIONER

                       ...V E R S U S..

The Nagpur Municipal Corporation, Nagpur
through the Municipal Commissioner,
Civil Lines, Nagpur.                                                 . . . RESPONDENT

------------------------------------------------------------------------------------------------
Shri S. V. Manohar, Senior Advocate a/w. Shri Amit A. Choube,
Advocate for petitioner.
Shri S. M. Puranik, Advocate for respondent.
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             CORAM :- A. S. CHANDURKAR & M. W. CHANDWANI, JJ.

RESERVED ON :- 13.10.2022

PRONOUNCED ON :- 09.12.2022

JUDGMENT (PER : M. W. CHANDWANI, J) :-

Heard.

2. Rule. Rule made returnable forthwith and heard learned

counsel for the parties.

3. The petition challenges demand notice dated 17.07.2019

whereby the respondent levied various charges including development

charge on the building and land of the petitioner. The thrust of 2 wp-167-21j.odt

grievances in this writ petition is about levy of the development charge

on the developed land of the petitioner.

4. It is urged that despite of the fact that land is already

developed in the form of plot prior to 1992, the respondent, while

sanctioning revised plan submitted by the petitioner for reconstruction

of the building, levied development charge also on land illegally. The

principal reliefs prayed in this writ petition are as follows:

"(a) quash and set aside the impugned order dated 19.03.2020 and the demand notices dated 17/07/2019, insofar as they levy development charges of Rs.61,88,757/-, Heritage Fess of Rs.2,03,580/- (2% of Development Charges), Workers' Welfare Construction Cess at Rs.15,57,290/-, Security Deposit of Rs.55,000/- for earth removal, etc., and an amount of Rs.5,08,724/- towards 'Plinth Area Check', which are clearly without any authority of law, and without any factual or legal basis. (Annexure-P Collectively).

(b) Quash and set aside the impugned order dated 11.04.2014 (Annexure-I), and further direct the Respondent- Corporation to forthwith issue Part Occupancy Certificate to the Petitioner, in terms of the application dated 01.04.2014, filed by the Petitioner."

5. Facts germane for disposal of the petition are as follows:

6. The petitioner is a charitable trust which owns Plot no. 56

situated at Temple Road, Civil Lines, Nagpur. Four houses were

constructed on the said plot prior to 1992. The petitioner proposed to

reconstruct a building on the said plot. In the year 2007, the petitioner

applied to the respondent for requisite permission for material

alteration in houses by submitting the plan. The respondent issued

demand notice seeking development charge of ₹2,07,363/- on2,07,363/- on 3 wp-167-21j.odt

building under Section 124A of the Maharashtra Regional and Town

Planning Act, 1966 (hereinafter referred to as "the Act of 1966"). The

petitioner accordingly paid the entire amount. The respondent issued

building permit and commencement certificate for construction of the

said building. After completion of the building, a request for grant of

occupancy certificate was made to the respondent. The respondent

found that the petitioner has deviated from the sanctioned plan and

therefore, rejected the application for occupancy certificate. A revised

plan came to be submitted by the petitioner to the respondent. On

15.06.2017, while sanctioning the revised plan, the respondent issued

the impugned demand notice to the petitioner asking the petitioner to

pay the total amount of ₹2,07,363/- on70,26,847/-, which includes development

charge of ₹2,07,363/- on60,60,056/- on land, which is under challenge in this writ

petition.

7. In affidavit-in-reply, the respondent has contended that

inadvertently, it did not levy the development charge on the land while

sanctioning the earlier building plan in the year 2008, therefore, the

respondent included the development charge in respect of the land in

subsequent demand notice when the revised plan of the building is

submitted. The petitioner is required to pay the development charge

on the land as per Section 124A of the Act of 1966. According to the

respondent, the land in question is not a developed land. The 4 wp-167-21j.odt

respondent has rightly issued the impugned demand notice asking the

petitioner to pay the development charge on the land.

8. Shri S. V. Manohar, learned Senior Advocate appearing for

the petitioner would submit that in the year 2007, the petitioner had

proposed to construct new building by material alteration in the

existing houses constructed on the land in question. At that time, the

respondent levied the development charge on the building and not on

the land, which were duly paid by the petitioner. Since, the petitioner

deviated from the sanctioned plan, it had to submit the revised plan.

The respondent, while sanctioning the revised building plan, illegally

demanded the development charge which the petitioner had already

paid. The houses were constructed on the said land in the year 1910.

The land in question is part of city survey, which itself goes to show

that it is a sanctioned layout. The land in question is already a

developed land,therefore, the respondent cannot levy the development

charge on the land under Section 124A of the Act of 1966. In this

regard, reference is made to the judgment of learned Single Judge in

Writ Petition No. 1234/2007 (P. D. Gupta Infratec Pvt. Ltd. Vs. Nagpur

Municipal Corporation), wherein it has been observed that Civil Lines

area in Nagpur was developed about 70-75 years ago. According to

him, at the most, the respondent can ask for development charge for

the building and not for the land. The main thrust of the argument of 5 wp-167-21j.odt

the learned Senior Advocate is that in any case, the respondent cannot

levy development charge on the land, which is already put to use and

is a developed land.

9. Shri S. M. Puranik, learned counsel for the respondent

submitted that levy of development charge by the planning authority is

governed by Section 124A of the Act of 1966. Development charge

can be levied on a land as well as on a building. He submitted that in

the earlier demand of the year 2007-08, the respondent had levied

development charge only on the building and not on the land. Since,

levy of the development charge on development of the land was

skipped in the year 2008, therefore, in the Demand Note dated

17.07.2019, it has been levied by correcting irregularity. According to

him, the development charge is not levied twice on the land. He relied

upon the judgment in the case of Anthony John Pereira Vs. Minister for

Urban Development [1998 (2) Mh.L.J. 404]. According to him, the

respondent has rightly levied the development charge on the land also

and the writ petition is not maintainable, therefore, sought rejection of

the writ petition.

10. Perusal of the application dated 24.01.2007 filed by the

petitioner for seeking initial permission to make material alteration in

the building depicts that it was for permission to material alteration in

municipal house nos. 322, 323, 324 and 325, standing on Plot No. 56 6 wp-167-21j.odt

in Ward No. 66, CTS No. 51 of Mouza Gadga situated on Temple Road.

The petitioner has asserted on affidavit that four houses, in which

material alteration were carried out by obtaining permission in the

year 2008, were already constructed in 1910 on the said land. There

is no denial to the specific pleading of the petitioner that the houses

which were standing on the land in question were constructed prior to

the year 1992. Thus, the land on which material alteration of the

building was sought from the respondent was developed in the year

1910, when the houses were constructed on it. Now, the moot question

arises before us is whether the respondent can levy development

charge in accordance with Section 124A of the Act of 1966 on the land

which is already instituted to use and is a developed land.

11. The levy, assessment and recovery of development charge

are governed by Chapter VI-A (Section 124A to 124L) of the Act of

1966, which was inserted by the State legislature by way of

amendment in the year 1992. The circumstances in which the State

Legislature came to enact Chapter VI-A to provide for levy, assessment

and recovery of development charge have been adverted to in the

Statement of Objects and Reasons. In order to appreciate that

background, it would be necessary to extract therefrom:

7 wp-167-21j.odt

"In the State of Maharashtra there is a distinct and discernible trend towards urbanisation. The bulk of urban population in the State is concentrated in and around Greater Bombay as also the other cities or towns for which municipal corporations or municipal councils have been constituted. This process of rapid urbanisation has brought in its wake human settlements and in turn the development of virgin or undeveloped lands in the form of buildings, to accommodate such settlements resulting in haphazard development of such lands without the necessary infrastructure of roads, water supplies, sewerage, drainage of storm water, electricity and street lights, etc.

2. The Maharashtra Regional and Town Planning Act, 1966, has been enacted to provide for planned development of urban areas, by providing, inter alia, for constitution of Regional Planning Boards, for preparation of Development plans and creation of new towns by means of constitution of Special Planning and Development Authorities. All these Plans and Schemes being capital intensive, the said authorities have not been able to achieve the desired results, mainly on account of lack of adequate funds for effective implementation of such Development Plans or Town Planning Schemes. It has, therefore, become imperative to mobilize additional resources for being placed at the disposal of Planning or Special Planning or Development Authority constituted under the said Act for effective implementation of the provisions of the said Act and to provide for proper amenities and facilities for the healthy growth of these cities and towns. The existing provisions of the Maharashtra Regional and Town Planning Act do not contain any provision for levy and collection of development charge by such Authority. It is, therefore, decided to suitably amend the said Act to provide for levy assessment and recovery of development charge by such authority on institution of use or change of use, of any land or building, or development of any land or building, for which permission is required under the said Act. Accordingly, a new Chapter VIA is being inserted containing appropriate provisions for such levy, assessment and collection of development charge, by the Planning or the Development Authority, initially at the minimum rates specified in the Second Schedule which is being added to the Act now and then later on at the rates to be prescribed by the said Authority, by framing necessary regulations in this behalf, subject to the minimum and maximum rates of such development charge as specified in the said Second Schedule. The Second Schedule specifies the minimum and maximum rates of development charge with reference to the user of land or building in the area of the different municipal corporations or councils. Other incidental provisions like procedure to be followed before framing of such regulations for prescribing the development charge by the Development Authority, for empowering the Authority to vary the rates of development charge within the limits specified in the Schedule, and provisions for appeal by the aggrieved person 8 wp-167-21j.odt

against the assessment made by the Authority are also being made in the Act.

3. In order to ensure that the proceeds of the development charge to be levied and collected by the Development Authority are utilised by the said Authority only for the purposes of planned development of the area within its jurisdiction, it is also being provided that a separate fund, namely "Development Fund" shall be created and shown separately in the budget. The Bill also contains certain other consequential and incidental amendments to the Act.

4. The Bill seeks further to amend the Maharashtra Regional and Town Planning Act, 1966, to achieve the above- mentioned objectives."

12. The Statement of Objects and Reasons underlying the

enactment of the Amending Act takes due note of the distinct trend

towards urbanization in Maharashtra and the concentration of the

urban population in and around Greater Mumbai and other cities and

towns in the State. Urbanization has generated increasing demands for

the creation of an infrastructure that would provide basic civic

amenities such as roads, water supply, sewerage and electricity in new

town/ virgin or undeveloped lands. For providing these basic amenities

in undeveloped area, there was a need to create fund. By way of

insertion of Chapter VI-A in the Act of 1966, the authority was

authorized to levy, assess and recover development charge at the time

of institution of use of land or building or change in use of land or

building.

13. This takes us to Section 124A(1) of the Act of 1966

whereby authority is empowered to levy of the development charge.

Section 124A(1) of the Act of 1966 is read as under:

9 wp-167-21j.odt

"124A. Levy of Development Charge

(1) Subject to the provisions of this Act, the Planning Authority or the Development Authority (hereinafter in this Chapter collectively referred as "the Authority), shall levy within the area of its jurisdiction development charge on the institution of use or change of any land or building, or development of any land or building, for which permission is required under this Act, at the rates specified by or under the provisions of this Chapter:

Provided that, where land appurtenant to a building is used for any purpose, independent of the building, development charge may be levied separately for the building and the land.

(2) xxxxxxxx

14. The Object and Reasons of insertion of Chapter VI-A and

provisions contained therein make it clear that development charge

under Chapter-VI of the Act of 1966 is to be levied for providing basic

civic amenities when undeveloped land/ virgin land is being instituted

for use and not on the developed land or the land which is already

instituted for use.

15. Thus, if a land is already developed, prior to 10.08.1992

when Chapter VI-A was inserted in the Act of 1966, no development

charge can be levied on said land. Likewise, if a land is already

developed in the form of layout, in accordance with the provision of

Section 18 of the Act of 1966, the planning Authority cannot again

levy the development charge at the time of proposal of construction of

building on the said developed land unless there is change in use of

the developed land. The reference can also be made to the case of 10 wp-167-21j.odt

Sanjay S/o. Lakhanlal Agnihotri Vs. Union of India [2018 (1) Mh.L.J.

760], which is relied by learned Senior Advocate for the petitioner, is

reproduced here:

"21. Insofar as levy and recovery or collection of land development charges is concerned, section 124-A of "1966 Act" shows that it can be assessed and demanded independently. The retrospective nature or arguments in relation thereto and fact that the land development charges can be levied and asked for only in absence of permission to develop already given in past demonstrate need to adopt case-wise approach. Whenever a person approaches and seeks sanction to a building plan, if his plot is in approved layout, it is clear that no development charges in relation thereto can be demanded. Development charges in that event can be only in relation to building i.e. further development to be carried out on already developed plot. It appears from the order of this Court dated 21st September, 2011 in this case that an effort was made in that direction by this Court to find out whether the said charges have been recovered in respect of areas of old town where there has been no fresh development or in new areas where there has been fresh development."

(Underlined by us)

16. In the case in hand, the land in question was already

developed by constructing houses on it in the year 1910, much prior to

year 1992 when Chapter VI-A of the Act of 1966 came into force.

Further, layouts in Civil Lines area, where the land is situated, were

drawn and developed much prior to 1992 as observed in P. D. Gupta

Infratec Pvt. Ltd. (supra). It is nobody's case that there is a change in

use of the land by the petitioner. Therefore, the respondent, while

sanctioning material alteration in the existing building cannot levy the

development charge on the land which was already put to use, when

Chapter VI-A was incorporated in the Act of 1966. The respondent

under the guise that the development charge was not levied earlier, 11 wp-167-21j.odt

while sanctioning material alteration in the building of the petitioner

in the year 2008, cannot levy the development charge on the land

without there being change in use of the said land.

17. In case of Anthony John Pereira (supra) relied by the

respondent, the permission was refused prior to 1992 and the fresh

permission was being sought on the development land after the date of

incorporation of Chapter VI-A in the Act of 1966 therefore, the High

Court held that the case is not covered by proviso of Section 124A of

the Act of 1966. Whereas, the facts of the present case are totally

different. Hence, the case of Anthony John Pereira (supra) will not be

applicable here.

18. In view thereof, the impugned demand notice, so far as it

relates to levying of the development charge on the land, cannot pass

muster.

19. Rule is accordingly made absolute by quashing and setting

aside the impugned demand notice dated 17.07.2019 to the extent of

levying the development charge of ₹2,07,363/- on60,60,056/- on the land of the

petitioner. The demand of Heritage Fee which is calculated at 2% of

the development charge shall be reconsidered in view of the fact that

no development charge is liable to be paid on the land. The

respondent is directed to issue occupancy certificate as requested by 12 wp-167-21j.odt

the petitioner, if the petitioner complies all other conditions required

under the law. The petition stands disposed of in the aforesaid terms.

No order as to costs.

                        (M. W. CHANDWANI, J.)                           (A. S. CHANDURKAR, J.)




   RR Jaiswal

          Digitally signed
          by JAISWAL
JAISWAL   RAJNESH
          RAMESH
RAJNESH   Date:
RAMESH    2022.12.09
          14:49:27
          +0530