Bombay High Court
Riyaz Ismail Machhiwala Through Ca Ajay ... vs The State Of Maharashtra Through Its ... on 7 August, 2024
Author: B. P. Colabawalla
Bench: B. P. Colabawalla
2024:BHC-OS:12088-DB
7-wp-1125-2024.docx
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO. 1125 OF 2024
Riyaz Ismail Machhiwala & Anr. .. Petitioners
Versus
The State of Maharashtra & Anr. .. Respondents
Mr. Pravin Samdani, Sr. Advocate a/w. Mr. Viraj Maniar, Ms.
Sneha Patil, Mr. Amish Gandhi i/b. Maniar Srivastava Associates,
Advocates for the Petitioners.
Ms. Prachi Tatake AGP for the Respondent Nos.1 and 2.
CORAM: B. P. COLABAWALLA &
FIRDOSH P. POONIWALLA, JJ.
DATE: AUGSUT 7, 2024
ORAL JUDGEMENT: [ Per B. P. Colabawalla, J. ]
1. Rule. Respondents waive service. With the consent of
parties, rule made returnable forthwith and heard finally.
2. By the above Writ Petition, filed under Article 226 of the
Constitution of India, the Petitioners inter alia seek an order to direct
Respondent No.2 to refund an amount of Rs.2,66,75,750/-, which,
according to the Petitioner, is illegally exacted from it for obtaining a
No Objection Certificate for development/sale of their land bearing
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Survey No.429/1/2 and CTS No.1069-A/ A-1 and 1069-A/B/1,
aggregating to 4163 square meters, of Village Malad, Taluka Borivali,
(for short "the entire land").
3. It is the case of the Petitioners that after the repeal of the
Urban Land (Ceiling and Regulation) Act, 1976 (for short "the ULC
Act"), in a decision of the Full Bench of this Court in Maharashtra
Chamber of Housing Industry, Mumbai & Ors. v/s. The State
of Maharashtra & Anr. [2014 (6) Mh.L.J. 829], it was held that
the exemption granted under Section 20 of the ULC Act did not abate
on repeal of the said Act. Being aggrieved by this decision of the Full
Bench, some of the parties approached the Hon'ble Supreme Court. At
the time when the SLP was pending before the Hon'ble Supreme Court,
the State Government constituted a Committee under the
Chairmanship of Mr. Justice B. N. Shrikrishna (Retired), who
recommended that the issue of exemption orders under Section 20 of
the ULC Act should be closed by accepting certain payments. This
recommendation was made in a Report dated 9th August 2018.
Accordingly, the learned Additional Solicitor General, appearing on
behalf of the State of Maharashtra, made a statement before the Hon'ble
Supreme Court that the State was prepared to implement the
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recommendations made in the said Report of Justice B. N. Shrikrishna
and suggested that the SLP/Appeal can be disposed of by permitting the
State of Maharashtra to prepare a scheme for implementation of the
recommendations made in the said Report. This suggestion was
acceptable to the Appellants [before the Supreme Court] and therefore,
on this basis, the SLP/Appeal filed before the Hon'ble Supreme Court
was disposed of by an Order dated 2nd July 2019.
4. This led to Respondent No.1 issuing the Government
Resolution dated 1st August 2019 (the "2019 GR") by which it
effectively offered to close all pending issues regarding surplus land and
the retained land [under the ULC Act], by accepting a payment, also
called a 'one-time premium'. Thereafter, on 23rd June 2021,
Respondent No.1 issued another Government Resolution (the "2021
GR") to streamline the process of implementation of the 2019 GR and
provide a basis for computation of the one-time premium.
5. Since the Petitioners were desirous of developing/selling
the entire land, the Petitioners filed an Application dated 15th March
2021 enquiring about the one-time premium required to be paid for the
exempted surplus vacant land in terms of the 2019 GR, and also
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requested that upon payment of the said one-time premium, a No
Objection Certificate be issued by Respondent No.2 to develop/sell the
exempted surplus vacant land.
6. In response thereto, Respondent No.2 issued a
letter/demand dated 22nd April 2021, stating that, in view of the 2019
GR, the one-time premium required to be paid by the Petitioners would
be in respect of the entire parcel of land (i.e.4163 square meters) and
not merely the exempted surplus vacant land. The Petitioners were
informed that as per the 2019 GR read with the 2021 GR, the one-time
premium would be calculated at the rate of 15% of the market value [per
square meter] of the entire parcel of the said land. Thus, the one-time
premium that was demanded from the Petitioner was Rs.5,73,74,466/-.
A copy of the said letter/demand dated 22nd April 2021 is annexed at
Exhibit "J" to the Petition. The English translation of the said
letter/demand, and which is not disputed by either party, reads thus:-
"COLLECTOR AND COMPETENT AUTHORITY (URBAN
LAND HOLDING) GREATER MUMBAL
Administrative Building, 5th Floor, Near Chetna College,
Government Colony, Bandra (East), Mumbai-51.
Email ID: [email protected]
No. Collector/ULC/D-3/Section 20/
WS-72/R.1.Machiwala/2021/
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Date: 22/04/2021.
To,
Shri. Riyaz Ismail Machiwala and other
through their Power of Attorney Shri. Ajay C. Mehta,
113, Shripal Industrial Estate,
1st Floor, S.V. Road, Jogeshwari, (West), Mumbai 400 012.
Subject:- Regarding levy of lump sum
premium in CTS No. 1069-A/A-1 and 1069-
A/B-1 situated at village Malad, Taluka
Borivali -Urban Land (Ceiling & Regulation)
Act, 1976.
Reference: (1) Government decision, Urban
Devt. Department No. ULC-2018/Case
No.51/ULC- 1 dated 1st August, 2019.
(2) Your Request Application dated 15th
March, 2021.
In the above matter you had requested to take action in
respect of the subject land, according to the Government
decision referred at Sr. No. 1 of the reference clause vide your
application dated 15th March, 2021.
This office has passed order under section 8 (4) of the ULC
Act on 15th December, 1995 regarding the total area occupied by
4215.00 sq.mtrs., out of Survey No. 429/1/2, CTS No. 1069/A
situated at village Malad, Taluka Borivali possessed by Shri.
Riyaz Ismail Machiwala and others. On 15th December, 1995
corrigendum has been issued to the said order under section 8
(4) of the ULC Act and according to the said corrigendum an
area to the extent of 2227.45 sq.mt has been declared as surplus.
Permission to use the said additional / surplus declared area
has been given by Additional Industrial Commissioner cum
Deputy Secretary, Housing Development and Special Help
Department, Maharashtra Government vide Order No. ULC/R-
255/MC/DC/HSAD/B-9341 dated 27th June, 1996 under
Section 20 of the Urban Land (Ceiling & Regulation) Act, 1976
for industrial purposes on the terms and conditions.
Area to the extent of 575.20 sq.mtrs and 3587.80 sq.mt has
been mentioned on the property cards of CTS No. 1069-A/A-1
and 1069-A/B-1 situated at village Malad, Taluka Borivali
submitted by you along with application under reference at Sr.
No.2 above. According to your application under reference Sr.
No. 2 you have requested to take action in respect of the total
area 4163.00 sq.mirs., in accordance with Government
Resolution referred at Sr. No.1 above.
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"-1 (b) according to Section 20 of the ULC Act in the matter of
exemption given for industrial purpose for the area mentioned
in the order ( without any deduction maximum area mentioned
in the order) by charging/ levying premium at 15% of the
prevailing annual market rate schedule in lump sum and such
area is being made available to the Scheme Holder for
development according to concerned D.C. Regulations.
---2(iv) Considering the total area exempted under Section
20 of the ULC Act (without any deduction maximum area
mentioned in the order) on depositing the premium amount in
lump sum by the applicant in the ratio in which development of
the area is proposed, permission for carrying development of
such area be given and entries in the record of rights to that
effect be deleted. For remaining area premium as per the Ready
Reckoner prevailing at the relevant time be recovered and in the
ratio of the premium amount entries in other rights column of
such land be deleted."
In the present matter, premium of the total area 4163.00
sq.mtrs out of CTS No. 1069-A/A-1 and 1069-A/B-1 situated at
village Malad, Taluka Borivali is calculated in accordance with
Government Resolution dated 1 August, 2019 as under:-
Subject land (original CTS No. 1069) is included in
Ward No. 63/301 for the year 2021-2022 according to
prevailing market rate schedule and rate of the said
area per sq.mtr is Rs. 91880/-.
Hence, 15% premium is calculated as under:
Area of the land x rate of land x 15% = amount of
premium 4163.00 x 91880 x 0.15= Rs. 5,73,74,466/-.
Hence, the amount calculated in accordance with the
Government Resolution dated 1" August, 2019 of Rs.
5,73,74,466/- (In words Rupees Five Crores. Seventy Three
Lakhs, Seventy Four Thousand, Four Hundred, Sixty Six only)
be deposited in the Reserve Bank of India under the following
heads and submit the original copy of challan to this office.
Thereafter, necessary action with regard to the subject matter
be initiated according to rules.
Head of the Account:
0217-Urban Development Department
60, Other Urban development Scheme
800 Other deposited amounts
01 other deposited amounts
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(01) (09) Regarding the amount received in connection with
exempted land under section 20 of the Urban Land (Ceiling &
Regulation) Act, 1976-Computer code (02170197)
Enclosed: Copy of original challan.
(Sd/- Milind Borikar)
Collector and the Competent Authority. ULC Gr. Mumbai"
(emphasis supplied)
7. Since the Petitioner could not effectively deal with its own
property without paying the demanded sum, the Petitioner, on 2nd June
2021, paid the one-time premium demanded, and which was
acknowledged by the Respondents on 8th June 2021.
8. It is the case of the Petitioner that after the payment of this
one-time premium, the interpretation of 2019 GR and the 2021 GR
came up for consideration before this Court in the case of Salim
Alimahomed Porbanderwalla & Anr. v. The State of
Maharashtra & Anr. [Writ Petition No.4849 of 2022 decided
on 30th March 2023]. In this judgment, a Division Bench of this
Court held that under the 2019 GR, read with the 2021 GR, the one-
time premium could be charged by the Government only in respect of
the surplus vacant land which is exempted under Section 20 of the ULC
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Act. The said one-time premium could not be charged/exacted with
respect to the "retainable land". Taking this decision into account, the
Petitioners addressed a letter dated 26th May 2023 to Respondent No.2
requesting for a refund of the excess amount of Rs.2,66,75,750/- paid
towards the one-time premium. This refund was sought on the basis
that the exempted surplus vacant land [on which the one-time premium
could be charged] was only 2227.45 square meters as reflected in the
Section 20 NOC dated 27th June 1996 issued by the Additional
Industries Commissioner and Ex-Officio Deputy Secretary to
Government Housing and Special Assistance Department (pages 75 to
80 of the Petition).
9. In answer to the letter dated 26th May 2023, Respondent
No.2, by its letter dated 5th July 2023, refused to refund the excess one-
time premium paid by the Petitioners, basically on the ground that the
judgement passed by this Court in Salim Alimahomed
Porbanderwalla was applicable only in the facts of that case and that
the 2019 GR was not declared as void in the judgment of Salim
Alimahomed Porbanderwalla. It was further contended that the
Government had not taken back/cancelled the 2019 GR after the order
of the High Court and neither was there any change in the provisions of
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the 2019 GR. It was on this basis that the refund was refused to the
Petitioners. It is in light of this stand taken by Respondent No.2 that the
Petitioners have approached this Court by filing the present Writ
Petition.
10. Mr. Samdani, the learned Senior Counsel appearing on
behalf of the Petitioners, submitted that the stand taken by Respondent
No.2 of refusing a refund is wholly unsustainable because after the
rejection of the refund, ironically, this Court in the case of Modern
Paints vs. The State of Maharashtra & Anr. [Writ Petition (L)
2091 of 2023 decided on 9th August 2023], as well as in the case
of Jemini Pradip Salot & Ors. v. The State of Maharashtra &
Anr. [Writ Petition (L) No.20587 of 2023 decided on 9th
August 2023], held that the interpretation of the 2019 GR [as set out
in the judgement passed in the Salim Porbanderwalla] is
applicable to all cases to which the 2019 GR [read with the 2021 GR]
was applied by the Government. This Court, in the aforesaid two
decisions, once again held that the one-time premium required to be
paid under the 2019 GR was only with respect to the exempted surplus
vacant land under Section 20 of the ULC Act. In light of these decisions,
Mr. Samdani submitted that there was absolutely no justification for
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Respondent No.2 to refuse to refund the excess amount paid by the
Petitioners.
11. On the other hand, the learned AGP, appearing on behalf
of the Respondents, made two submissions. She firstly submitted that
the Government has decided to challenge the judgements passed by this
Court in (i) Salim Porbanderwalla; (ii) Modern Paints; and (iii)
Jemini Pradip Salot; before the Hon'ble Supreme Court. Secondly,
she submitted that, in any event, these judgements are distinguishable
on facts because in the present case the one-time premium was paid on
the entire land belonging to the Petitioners without any protest. Once
this is the case, the Petitioners cannot today, after taking advantage of
the release orders passed by the Government, rely upon the judgments
passed in the Salim Porbanderwalla or Modern Paints or
Jemini Pradip Salot, to seek a refund. She therefore submitted that
there was no merit in above Writ Petition and the same ought to be
dismissed.
12. We have heard the learned Counsel for the parties at some
length. We have also perused the papers and proceedings in the above
Writ Petition as well as the judgements passed by this Court in the cases
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of Salim Porbanderwalla, Modern Paints and Jemini Pradip
Salot. We must, at the outset, mention that the facts as narrated above
are not really disputed. It is not in dispute that the entire land
belonging to the Petitioners admeasures 4163 square meters. It is also
not in dispute that, out of the entire land, the exempted surplus vacant
land is only 2227.45 square meters. The fact that the one-time premium
[of Rs.5,73,74,766/-] levied on the Petitioners (and paid by it) is on the
entire land, namely, 4163 square meters (at the rate of 91,880/- per
square meter), is also not disputed. In fact, the valuation of Rs.91,880/-
per square meter has been arrived at by the Government itself when
they raised their demand on the Petitioner by their letter dated 22nd
April 2021 (Exhibit-J to the Petition). The refund is sought on the basis
that the one-time premium to be paid is only in relation to 2227.45
square meters (the exempted surplus vacant land), and which comes to
Rs.3,06,98,715/-. Hence a refund of Rs.2,66,75,750/- is sought from the
Government. These are the undisputed facts.
13. Having said this, we will now deal with the judgments
relied upon by Mr. Samdani. The 2019 GR as well as the 2021 GR first
came up for consideration before this Court in Salim
Porbanderwalla. This Court, in the said decision, inter alia held
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that, under the 2019 GR as well as the 2021 GR, the one-time premium
could be charged only on the exempted surplus vacant land and not on
the entire land belonging to the Petitioners. In the Salim
Porbanderwalla matter, this Court in fact put it in very simple
terms. It is stated that there are two parcels of land. One is the land
which the Petitioners are entitled to hold and there cannot be a
premium on this, nor can there be a Revenue Entry relating to Section
20 of the ULC Act in relation thereto. The other parcel is the surplus
vacant land for which the Petitioners have paid full premium. Against
that, they are entitled to have the Revenue Entry deleted. When this
Judgement was brought to the attention of the authorities before us and
the Petitioners sought a refund, Respondent No.2, by his letter dated
5th July 2023, refused to refund the excess amount as it believed that in
the Salim Porbanderwalla matter the 2019 GR was not held to be
void and the said decision was restricted to the facts of that case.
14. However, thereafter, in the case of Modern Paints
(supra) as well as in Jemini Pradip Salot (supra), this Court
categorically reiterated that the ratio laid down in the judgement of
Salim Porbanderwalla was not restricted to the facts of that case
alone and applied to all cases to which the 2019 GR and the 2021 GR
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applied. For the sake of convenience, the operative part of the decision
passed by this Court in Modern Paints (supra) is reproduced
hereunder:-
"25. To make it perfectly clear, once and for all:
(a) No demand under the 1st August 2019 GR or
the later GR of 23rd June 2021 can be made
applicable to the land that is retainable, i.e.,
exempted, and is in the ownership of and has
vested in the private owner.
(b) The Government has no power to demand a
premium for the private party's own land.
(c) The retention land, i.e., that which was within
the ceiling limit permissible under the ULC Act
and which was not vacant land, cannot be
computed or reckoned for the purposes of
computing a premium.
(d) The expression "entire land" or ",dw.k{ks="
in the 1st August 2019 GR or the later GR of 23rd
June 2021 means the whole of the surplus vacant
land not the whole of the land, i.e., not the
portion including the retention/retainable land.
(e) Any demand for a premium for the retainable
land is illegal, unconstitutional and unlawful.
(f) There cannot be a continuance of the Section
20 order in the revenue entry against the whole of
the land.
(g) No revenue entry under Section 20 can apply
to the retention land.
(h) Any revenue entry showing the State
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Government in respect of the retainable / retention
land is also illegal.
26. This judgment is not restricted to the facts of
this case. It applies to all cases to which the GRs
of 1st August 2019 and 23rd June 2021 are
sought to be applied. Consequently, the State
Government cannot refuse or fail to follow this
judgment. It cannot make premium demands for
the whole land or make revenue entries
favouring the State Government for the whole
land - i.e., including the retention/retainable
land that is private property. Any such demands
or entries are illegal and unconstitutional."
(emphasis supplied)
15. In fact, even after the judgment in Modern Paints, it
appears that the authorities were refusing to act. Therefore, Modern
Paints was constrained to file another Petition in this Court, being Writ
Petition (L) No.27079 of 2023. The grievance of Modern Paints was that
they had moved an Application before the Respondents for the release
of its land and showed its willingness to pay the price of the land as per
the applicable rate. On considering this Application of Modern Paints,
Respondent No.2 granted its approval for release subject to the
condition that the one-time Premium of Rs.1,46,36,087/- would have
to be paid by the Modern Paints. While Modern Paints was not ready to
pay the above-mentioned amount on the ground that the said amount
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was erroneously calculated [by taking the entire land holding of Modern
Paints into consideration, and not only the declared surplus land],
Modern Paints made a representation to Respondent No.2 to
recalculate the one-time Premium. This representation of Modern
Paints was rejected and that is how the second Writ Petition was filed.
Since there was an urgency in the matter, Modern Paints offered to
deposit the entire sum of 1.46 crores [as originally demanded] without
prejudice to its rights and contentions. This was because Modern Paints
would face the consequence of losing a valued customer for the entire
land. Accordingly, this Court permitted Modern Paints to deposit the
amount of Rs.1.46 crores with Respondent No.2, and on such deposit
being made, the Respondents were directed to pass an order of release
in favour of Modern Paints within a period of 7 days from the date of
deposit. This Court also directed that in the event the judgment in the
Salim Porbanderwalla matter was not challenged before the
Hon'ble Supreme Court within a period of six months, or if such a
challenge was made and rejected, whichever was earlier, the
department shall refund the excess amount which came to
Rs.87,06,750/-. This judgement in the second Writ Petition filed by
Modern Paints is dated 18th October 2023. Even though more than nine
months have elapsed from the said judgment, we find that no SLP has
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been filed challenging the orders passed by this Court either in Salim
Porbanderwalla or in Modern Paints or in Jemini Pradip
Salot. All these judgments are binding upon us. These judgments have
clearly held that the one-time premium can be charged only on the
exempted surplus vacant land and not on the entire land belong to the
Petitioners. In fact, these judgments have subsequently been also
followed by this very bench in Jahind Oil Mills Company Vs. The
Additional Collector and Competent Authority, ULC & Anr.
[Writ Petition No.641 of 2024, decided on 5th July 2024] and
in Huhtamaki India Limited Vs. The State of Maharashtra &
Ors. [Writ Petition No.2789 of 2024, decided on 15th July
2024]. All these judgments have clearly held that under the 2019 GR
read with the 2021 GR , the Government is only entitled to charge the
one-time premium on the exempted surplus vacant land and not on the
entire land belonging to the Petitioners.
16. As far as the arguments of the learned AGP are concerned,
namely, that they are in the process of challenging the orders passed by
this Court in (i)Salim Porbanderwalla; (ii) in Modern Paints;
and (iii) in Jemini Pradip Salot; before the Hon'ble Supreme Court,
we find that this argument has been made time and time again and yet
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no challenge has been laid before the Hon'ble Supreme Court. We
cannot wait indefinitely for the Government to challenge the orders
passed by this Court and in the meanwhile not comply with the law laid
down by this Court. In fact, in the second Writ Petition filed by Modern
Paints (and referred to by us above), six months time was granted to the
Government to challenge the judgement passed in Salim
Porbanderwalla and which period of six months has long expired.
We therefore cannot take any countenance of this argument. As far as
the argument of the learned AGP that the Petitioners have made the
payment without protest is concerned, we find that this makes little
difference because it is now too well settled a proposition of law that the
Government cannot exact monies from its citizens without the
authority of law. In the present case, we will assume that the 2019 GR
[read with the 2021 GR] is the authority of law under which the
Government can demand the one-time premium. These GRs have been
interpreted by this Court to mean that the Government can only charge
one-time premium on the exempted surplus vacant land and not on the
entire land belonging to the Petitioners. Once this is the interpretation,
the Government has no authority in law to exact premium on the entire
land. If it has no authority, it cannot wrongly hold on to the money that
was deposited by the Petitioners towards the one-time premium, under
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protest or otherwise. In fact, this view has already been taken by us in
the decision rendered in Jaihind Oil Mills Company (supra).
17. In view of the foregoing discussion, we are of the opinion
that the Petitioners are entitled to a refund of the amount of
Rs.2,66,75,750/- from Respondent No.1 and/or Respondent No.2.
18. We, accordingly, pass the following order:-
(i) Respondent No.1 and/or Respondent
No.2 shall refund to the Petitioners the sum of
Rs.2,66,75,750/- within a period of eight weeks
from today, i.e. on or before 3rd October 2024.
(ii) If the aforesaid amount is refunded
within the aforesaid period, the Government
shall not be liable to pay any interest on the
aforesaid amount. However, if the aforesaid
amount is not refunded on or before 3rd October
2024, the Government will be liable to pay
interest on the amount of Rs.2,66,75,750/-, at
the rate of 10% per annum, simple interest, from
4th October 2024 till payment and/or
realisation.
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(iii) If this burden of interest is cast upon
the Government, it will be free to recover the
same from the officer concerned, namely
Respondent No.2, if it so chooses to do.
19. Rule is made absolute in the aforesaid terms and the Writ
Petition is also disposed of in terms thereof. However, in the facts and
circumstances of the present case, there shall be no order as to costs.
20. Though we have disposed of the above Writ Petition, we
place it on board for reporting compliance on 4th October 2024.
21. This order will be digitally signed by the Private Secretary/
Personal Assistant of this Court. All concerned will act on production
by fax or email of a digitally signed copy of this order.
[FIRDOSH P. POONIWALLA, J.] [B. P. COLABAWALLA, J.]
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