Gujarat High Court
Izz Infra Llp vs State Of Gujarat on 24 February, 2025
Author: Umesh A. Trivedi
Bench: Umesh A. Trivedi
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C/SCA/9841/2024 JUDGMENT DATED: 24/02/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 9841 of 2024
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR. JUSTICE UMESH A. TRIVEDI Sd/-
and
HONOURABLE MR. JUSTICE CHEEKATI Sd/-
MANAVENDRANATH ROY
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Approved for Reporting Yes No
Yes
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IZZ INFRA LLP & ORS.
Versus
STATE OF GUJARAT & ORS.
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Appearance:
MR MEHUL SHARAD SHAH(773) for the Petitioner(s) No. 1,2,3
MS. DHARITRI PANCHOLI, AGP for the Respondent(s) No. 1, 3
MR MANISH J PATEL(2131) for the Respondent(s) No. 2
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CORAM:HONOURABLE MR. JUSTICE UMESH A. TRIVEDI
and
HONOURABLE MR. JUSTICE CHEEKATI
MANAVENDRANATH ROY
Date : 24/02/2025
ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE UMESH A. TRIVEDI)
Rule returnable forthwith. Mr. Manish J. Patel,
learned advocate, waives service of notice of Rule for and on
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behalf of respondent No. 2. Ms. Dharitri Pancholi, learned AGP,
waives service of notice of Rule for and on behalf of
respondent Nos. 1 and 3.
1. This petition is filed under Article 226 of the
Constitution of India seeking writ of mandamus or any other
appropriate writ, order or direction, directing the respondent -
Bharat Sanchar Nigam Limited (hereinafter referred to as
'BSNL', for short) to execute the registered sale deed in favor
of present petitioner No. 1, being the successful bidder, in
respect of vacant land bearing Plot No. 5D, CS No. 146 & 353,
Opp. Panjarapole, Ghod-Dod Road, Karimabad, Surat, Gujarat-
395001, having Site Area - 5359 Sqm., Built-up area-Nil,
having Geographical Coordinates: Latitude-21.174629,
Longitude-72.814618 (hereinafter referred to as "land/property
in question") and having property surroundings, as mentioned
in the Request for Proposal (hereinafter referred to as "RFP")
document, by obtaining No Objection Certificate (hereinafter
referred to as "NOC") from District Collector, Surat, forthwith.
1.1 Petitioner Nos. 2 and 3 are the partners in petitioner
No.1 - Limited Liability Partnership (hereinafter referred to as
"LLP"), as claimed in the petition.
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2. There are further reliefs also claimed in the petition,
which are as under:-
"9. (B) to issue a writ of mandamus or any other
appropriate writ, order or direction, directing Respondent
Nos. 1 & 3 to issue NOC in favour of BSNL forthwith as to
execute sale deed in favour of the petitioners - successful
bidder in respect of land bearing Plot No.5D, Opp.
Panjrapole, Ghod-Dod Road, Surat;
(C) to issue a writ of mandamus or any other
appropriate writ, order or direction, holding that the term
"Company" mentioned in Section 44(A) of the Land
Acquisition Act, 1894, would not include the company of
Central Government i.e. BSNL and thereby be further
pleased to direct the District Collector to issue NOC
forthwith so as to execute the registered sale deed in
favour of the petitioners;
(D) Pending admission, hearing and/or final disposal of
this petition, Your Lordships may be pleased to direct
Respondent Nos. 1 & 3 to issue NOC in favour of BSNL
forthwith irrespective of the inter-se dispute between the
respondents regarding the applicability of Section 44(A)
of the Land Acquisition Act, 1894, subject to the final
outcome of the present petition; "
3. Mr. Mehul Sharad Shah, learned advocate for the
petitioners, submitted that vide Office Memorandum dated
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29.10.2019 by the Department of Telecommunications
(hereinafter referred to as "DoT"), PSU-I Division, the Union
Cabinet, in its meeting held on 23.10.2019, considered and
approved the proposals of "DoT" for "Revival of BSNL and
MTNL" vide its Cabinet Note dated 22.10.2019.
3.1 By the said Office Memorandum, decision of Union
Cabinet is issued, which contains approval of Cabinet vide para
2(vii), which reads as under:-
"Monetisation of land/building assets following DIPAM
guidelines for asset monetisation. The proceeds of asset
monetisation will be credited to BSNL/MTNL to service the
debt, CAPEX and other requirements. The progress of
asset monetisation will be reviewed by a committee
formed under the chairmanship of Pr. Advisor to Hon'ble
Prime Minister with Cabinet Secretary, Secretary (DEA),
Secretary (T), Secretary (DIPAM) and Secretary (MoHUA)
as members."
3.2 Pursuant thereto, with the approval of Honourable
Minister of Communications, the Director (Asset Management)
addressed a letter to CMD, BSNL, H.C. Mathur Lane, Janpath
New Delhi, intimating that BSNL will follow the policy for
monetizing its land and building assets through outright sale
through transfer.
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3.3 Pursuant thereto, respondent - BSNL issued "RFP"
document for the sale of "land/property in question" by
e-tender dated 28.10.2022.
3.4 There appears no dispute that the petitioner No. 1 -
"LLP" is the highest bidder and its bid was accepted for the
"land/property in question" by the respondent - BSNL.
3.5 Pursuant thereto, petitioner No. 1 is issued
Acceptance Letter vide communication dated 14.07.2023.
3.6 Pursuant thereto, as per the claim of the
petitioners, which is not even disputed by either side, that the
amount mentioned in the Acceptance Letter is deposited with
BSNL within the time prescribed. The said Acceptance Letter
came to be issued pursuant to Office Memorandum dated
13.07.2023 made by Deputy Director General (Asset
Management) granting approval-cum-acceptance of highest
bid by the Group of Ministers (hereinafter referred to as
"GoM"), which was convened for monetization of 03 properties
of BSNL, as proposed by BSNL vide their letter dated
12(11)/2/2022, which includes the present property at Serial
No. 2 mentioned therein. The minimum Reserve price was
Rs.38,89,00,000/-, whereas highest/eligible bid valuation
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recommended by BSNL and offered by the petitioners was
Rs.41,49,00,000/-.
3.7 Vide communication dated 14.11.2023, Deputy
Manager (LM) of BSNL addressed to Chief General Manager,
BSNL (Gujarat Circle), Ahmedabad, conveyed the approval of
competent authority for transfer of "land/property in question"
in favor of successful bidder (purchaser) through execution of
sale deed, by the Gujarat Circle/Surat BA, as successful bidder
has completed the payment of full sale consideration.
3.8 The Chief General Manager of Gujarat Circle was
directed to take necessary action as per the terms and
conditions of the "RFP" for transfer of "land/property in
question" to the successful bidder. A sample sale deed was
also prepared and approved by Department of Investment and
Public Asset Management (DIPAM) to BSNL in connection with
the sale of the "land/property in question" in December, 2021.
Copy of which was sent to the Chief General Manager, Gujarat
Circle.
It was also directed that the sale deed for transfer
of subject land may be made on similar lines after making
modifications, if required, as per norms of revenue/registration
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authorities and in consultation with the Transaction Advisor
M/s. Delhi Integrated Multi-Model Transit System Limited
(DIMTS). It was also cautioned that the contents of final sale
deed should not be in conflict with any of the "RFP" conditions.
3.9 Vide communication dated 28.09.2022 of Assistant
General Manager (L & B) BSNL, Office of GMTD, Surat,
addressed to the Collector, Surat (Acquisition Branch) seeking
permission to sell "land/property in question", requesting to
inform if any amount is to be deposited for the purpose of the
same. In the said communication, it is already made clear that
the "land/property in question" was acquired by the Central
Government for the purpose of constructing block/staff
quarters of administrative office of the respondent authority
and allotted to BSNL by it. As per the said acquisition order,
amount of compensation was also paid and thereafter, said
property came to be allotted by the Central Government to
BSNL and possession was also handed over. As it was a part of
Central Government, land was allotted in the name of "DoT",
Government of India but subsequently, it came to be changed
to 'Bharat Sanchar Nigam Limited' in the City Survey Record,
and name of respondent authority - BSNL came to be inserted.
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3.10 It was communicated to the Collector, Surat, by the
Assistant General Manager (L & B), BSNL, vide communications
dated 18.07.2019 and 21.01.2021 that as per Resolution of the
Union of India, permitted outright sale of the "land/property in
question". It was also requested that even for the sale of the
"land/property in question", if no permission is required then to
issue "NOC" in that respect. As such, there is no dispute that
the "land/property in question" was acquired for the purpose of
the "DoT" (Central Government) on payment of compensation
and since then, it was allotted to the respondent - BSNL
through the "DoT". It is also further not in dispute that for
augmenting financial support to the BSNL as also MTNL, Union
Cabinet has issued the Office Memorandum, as aforesaid.
3.11 Petitioner No. 1, therefore, addressed an e-mail
communication dated 01.11.2023 to the Land Management
Unit, BSNL requesting to execute the sale deed, as full
payment pursuant to the auction sale is already made. The
respondent - BSNL communicated to the petitioner that, since
the "land/property in question" is an acquired one, Office of
the Collector informed that they need to take prior permission
from the State Government, for which it was asked to make an
application with the Acquisition Branch.
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3.12 Secretary, Ministry of Communications, "DoT", vide
its communication dated 23.01.2024 addressed to Chief
Secretary, Government of Gujarat, informed that the
"land/property in question" was acquired for Telecom
Department (Surat Telephones) in 1986 on payment of market
rates and stands mutated in the name of BSNL.
3.12.1 He has also informed the Chief Secretary,
Government of Gujarat that, Union Cabinet has approved the
revival plan of BSNL, which includes asset monetization. It also
refers about the Report of the Revenue Department,
Government of Gujarat to BSNL that they proposed/inserted
condition for payment of 50% of the current market value in
the transaction for granting "NOC", quoting reference of
Section 44A of the Land Acquisition Act, 1894 (hereinafter
referred to as "the Act, 1894").
3.12.2 The communication further refers that demand
raised by Revenue Department was referred to Department of
Legal Affairs (hereinafter referred to as "DoLA"), Ministry of
Law and Justice, Government of India, which has examined the
case in detail and conclusive observation of "DoLA" are quoted
in the said communication, which reads as under:-
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"5. (i) the terms Company as referred under Section
44A means a company as defined in section 3 of the
Companies Act, 1956, other than a Government company
referred to in clause (cc) of Section 3:
(ii) When the Collector has made an award under
Section 11, he may take possession of the land, which
shall thereupon vest absolutely in the Government, free
from all encumbrances;
(iii) In view of the position at (i) and (ii) above as in
the case in hand admittedly BSNL is a Government
Company falling under Section 617 of the Companies Act,
1956 it may not be legally correct to say that the it
can be covered under Section 44A of the Act;
(iv) In view of the above and admittedly
possession of the land has been taken by paying
the full consideration by the Government of India,
it becomes absolute owner of the said land and is
the appropriate Government."
Therefore, the Secretary, Ministry of
Communications, "DoT" informed the Chief Secretary,
Government of Gujarat that the view of Revenue Department
seeking proposed 50% of the amount of sale price under
Section 44A of "the Act, 1894" is legally not tenable.
Therefore, a request was made to issue necessary permission
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to all concerned for issue of "NOC" for completion of the
transaction without insisting for sharing of sale proceeds.
3.13 Vide communication dated 31.01.2024, Section
Officer, Revenue Department was informed by the Collector,
Surat, in answer to the queries raised, more particularly Issue
No. 6 that, the "land/property in question" came to be acquired
by "DoT", Government of India and it was acquired for the
purpose of Central Government on constitution of BSNL. Said
"land/property in question" came to be transferred by the
Central Government to BSNL under a Gazetted Notification
dated 17.3.2001.
3.13.1 He has also referred Section 44A of "the Act, 1894"
that for transfer of acquired land, prior permission of the
'appropriate Government' is required. Referring to Section
3(ee) of "the Act, 1894", he informed that, 'appropriate
Government' means, in relation to acquisition of land for the
purposes of the Union, the Central Government, and therefore,
Central Government, while exercising the powers of "GoM",
obtained permission for sale thereof, and therefore,
respondent - BSNL is having permission for sale thereof of the
appropriate Government.
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3.13.2 He has also opined that "land/property in question"
came to be acquired by the Central Government on payment
of compensation for purposes of Union, Section 44A of "the
Act, 1894" requires previous sanction of appropriate
Government, which is Central Government in this case, and
BSNL has that sanction. It nowhere provides for sharing of
consideration on transfer of land with the State Government.
He has also further opined that even the Right to Fair
Compensation and Transparency in Land Acquisition,
Rehabilitation and Resettlement Act, 2013 also does not
provide for sharing of revenue pursuant to sale consideration
received by BSNL.
3.14 Vide affidavit affirmed on 20.11.2024, Assistant
General Manager (L & B), Office of CGMT, Gujarat Circle,
Ahmedabad stated that Secretary, GIT, Ministry of
Communications, sent letter to Chief Secretary, Government of
Gujarat, to look into the matter and appropriate direction be
issued to Collector, Surat, for granting "NOC". Despite
repeated correspondence with the Collector, Surat, till date, no
"NOC" has been given by him or even by the State of Gujarat
and therefore, respondent - BSNL is unable to execute the sale
deed in favour of petitioner No.1.
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It is further asserted in the affidavit that respondent
- BSNL is trying to resolve the issue with the help of State
Government and in that regard, communication is also
addressed to the Chief Minister, Gujarat, vide letter dated
30.09.2024 and after getting "NOC", the respondent will
execute the sale deed.
3.15 Surprisingly, Collector, Surat, who answered queries
of the Revenue Department and opined that under Section 44A
of "the Act, 1894", respondent - BSNL is having the permission
of appropriate Government for the purpose of sale and there is
no provision under "the Act, 1894" for sharing of revenue
realized from sale of the asset of respondent - BSNL, has in an
affidavit affirmed on 26.11.2024, attempted to assert, in the
name of Revenue Department that, as per Section 17A of "the
Act, 1894" [inserted vide The Land Acquisition (Gujarat
Unification and Amendment), Act, 1963] that, land can be
utilized only for any other public purpose after previous
sanction of the State Government other than the purpose for
what it was acquired. Section 17A, inserted by the State
Amendment, is also quoted in extenso in the affidavit, which
reads as under:-
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"17A. When any land vests in the State Government
or in a corporation owned or controlled by the State
Government under the provisions of this Act, it shall be
lawful, with the previous sanction of the State
Government, to use such land also for any public purpose
other than that for which its possession was taken."
4. In this background, let us examine the submissions
made on behalf of the parties for the decision of this case.
5. Mr. Mehul Sharad Shah, learned advocate for the
petitioners, submitted that the "land/property in question" in
dispute came to be acquired by the Central Government for its
"DoT" on payment of compensation under "the Act, 1894" and
thereafter, handed over to the respondent - BSNL, State has
nothing to do with the same. At the same time, it being
property of the Central Government, when it is being sold with
the previous permission of the Central Government itself, the
State, either through the Collector or the Revenue Department,
has no role to play in it, as in that case it is an appropriate
Government whose previous sanction is already there.
5.1 He has further submitted that title and ownership is
an absolute of the respondent - Department, as stated in the
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"RFP" document itself. Referring to the legal opinion of the
Legal Department of Union of India, it is submitted that the
Revenue Department as also the Office of the Collector, by
quoting irrelevant provisions of law under "the Act, 1894",
tried to create hurdles in the execution of a sale deed for a
"land/property in question", which was purchased in an open
auction and despite the entire consideration of the sale
transaction being paid long back by the petitioner No. 1.
5.2 Referring to the reply submitted by the Collector,
Surat, and a query raised by the Revenue Department in
respect of whether permission is to be granted for the sale of
"land/property in question" or not, it took a somersault, may
be on advice of the Revenue Department, and attempted to
raise altogether a different and irrelevant provision again by
way of Section 17A of "the Act, 1894". According to his
submission, neither Section 44A nor Section 17A of "the Act,
1894" is applicable to the "land/property in question".
5.3 He has further submitted that respondent - BSNL
has unnecessarily sought for permission from the Collector,
which was never required at all for the sale of "land/property in
question".
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5.4 He has further submitted that this petition be
admitted and allowed, directing respondent Nos. 1 and 3
herein to grant "NOC" to BSNL forthwith to execute sale deed
in favor of the petitioner No. 1 - successful bidder in respect of
the "land/property in question".
6. As against that, Mr. Manish J. Patel, learned
advocate for the respondent No. 2 - BSNL, submitted that
respondent No. 2 is ready to execute the sale deed, provided
"NOC" is granted by the respondent Nos. 1 and 3 to them.
6.1 He has further submitted that, there is no dispute
that the "land/property in question" was sold in an open
auction and the petitioner No. 1 was the successful bidder and
he has deposited the entire sale consideration long back. In
absence of immediate execution of the sale deed, they are
ready to return back the amount, as stated in the affidavit-in-
reply. Therefore, he has submitted that they are open to the
execution of a sale deed, provided respondent Nos. 1 and 3
grant either permission or "NOC" for the purpose of execution
of sale deed pursuant to an auction conducted.
7. As against that, Ms. Dharitri Pancholi, learned AGP,
on behalf of respondent Nos. 1 and 3, submitted that when
land is acquired for a company, there is restriction on transfer
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of the same. Therefore, according to the submission of learned
AGP, permission from the State Government and previous
sanction of the appropriate Government i.e. Government of
Gujarat, is required.
7.1 In the next breadth, by way of the affidavit of the
Collector, who opined that, appropriate Government would be
the Central Government in the present case, has come out
with an affidavit-in-reply, now again invoking Section 17A of
"the Act, 1894", which has been inserted by way of State
Amendment, which reads and is referred to hereinabove.
Therefore, in the opinion of the learned AGP, the stand taken
by the State Government that 50% of the sale consideration,
as a part of grant of either previous sanction/"NOC", is to be
levied from the respondent No. 2 herein. Therefore, it is
submitted that the petition be rejected.
8. Having heard the learned advocates for the
appearing parties as also the learned AGP, let us examine
whether any permission, as prayed for by the respondent No. 2
herein, before transferring the land in favor of the auction
purchaser, which is permitted to be sold by the Union Cabinet
on advice of Group of Ministers for revival of BSNL which is
property of the Central Government itself, is required or not.
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8.1 As coming out from the record, "land/property in
question" was acquired by the Central Government for its
Telecom Department (Surat Telephones) in 1986 on payment
of the market rates and it stood mutated in the name of BSNL.
Therefore, it is very clear that land was acquired by the Central
Government on payment of compensation, and therefore, it
was never acquired by or for any company. The misconception
in the mind of the State of Gujarat as also the Collector, Surat
objecting to the same on condition of payment of 50% of the
sale consideration based on the restriction on transfer, as
claimed in Section 44A of "the Act, 1894", is worth noting. As
mentioned in Section 44A of "the Act, 1894", it falls within
Part-VII titled as 'Acquisition of Land for Companies'. Both the
respondent Nos. 1 and 3 misconstrued that the "land/property
in question" was ever acquired for any company. As
communicated by the Secretary, Ministry of Communications,
"DoT" to the Chief Secretary, State of Gujarat that it was
acquired by the Central Government for its "DoT" and not by
any 'company', as defined in Section 3(e) of "the Act, 1894",
which entitles State to grant previous sanction as an
appropriate Government.
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8.2 As referred to hereinabove, in all the
communications and even in the opinion expressed by the
Legal Department of Union of India, as also in response to
queries raised by the Revenue Department, answer of the
Collector, Surat, for the present "land/property in question", if
at all, it is acquired for any company, the appropriate
Government would be the Central Government and not the
State Government. Not only that, it is opined even by the
Collector, Surat to the queries raised by the Revenue
Department that previous sanction for sale of the said property
is also granted by the Union of India. Thus, in no case, State
Government can be said to be an appropriate Government
under Section 44A of "the Act, 1894". It is a misconstrued idea
either of the Revenue Department or of the Collector, Surat to
have a share in the sale consideration for the purpose of
granting any previous sanction for the same.
8.3 Realizing explanation offered by the Collector, Surat
to the Revenue Department on queries raised that, they have
no legs to stand, as coming out from the affidavit of the
Collector, Surat, Revenue Department had sought to open a
wicket gate in the form of Section 17A of "the Act, 1894". As
quoted hereinabove. Even invoking provisions of Section 17A,
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inserted by way of State Amendment, is also misconceived and
done with some ulterior motive. It provides that, when any
land vests with the State Government acquired for any
purpose, can be utilized for any other public purpose. State
Government had never acquired that "land/property in
question", and State Government is also not the owner of that
"land/property in question", therefore, there is no question of
utilizing it for a different purpose than the purpose for which it
was acquired.
8.4 Quoting Section 17A of "the Act, 1894", that too, by
way of affidavit of the Collector, Surat, is again an attempt to
create hurdles in the execution of a sale deed on payment of
auction price long back by the auction purchaser.
8.5 As such, respondent - BSNL was not required to
seek any permission, at least for the purpose of sale of the
property, when appropriate Government being the Central
Government and particularly, when the "GoM" permitted,
which is previous sanction for sale of that asset, for
monetization for the revival of BSNL. Be that as it may, asking
the permission under misconception of law or facts will not
entitle either the State Government or the Collector to create
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hurdles in the execution of a sale deed under the guise of
either previous sanction or "NOC" for the purpose of sale.
8.6 However, even if there requires sharing of sale
proceeds, as claimed by the State Government, it would be a
dispute between the State Government and the Central
Government, but for that, purchaser of property in an open
auction, who deposited Rs.41,49,00,000/- being the entire sale
price, cannot be deprived of the "land/property in question" by
prolonging execution of sale deed under the guise of that
dispute, by the BSNL.
8.7 Therefore, at once, BSNL is hereby directed to
execute a sale deed of the "land/property in question" in favor
of the petitioner No. 1, without waiting for anything further,
within a period of 04 weeks from today, i.e. 24.02.2025.
8.8 If at all, State Government or the Collector, Surat,
have any legally tenable claim in the property, it may be
resolved with Central Government through BSNL by
appropriate mode, but that will not entitle them to sit over the
issue under the guise of "NOC" for the purpose of executing
sale deed wrongly asked by BSNL, which was not required at
all.
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9. Considering the overall circumstances and the
provisions of law as also the papers on record, it is clear that
the objection raised on behalf of the State Government as also
the Collector, Surat, is not tenable at all. Therefore, we are left
with no option but to direct the respondent herein, more
particularly respondent No. 2, to execute the sale deed in favor
of the petitioner No. 1 - successful bidder.
9.1 As held hereinabove, no previous sanction or "NOC"
is required for the purpose of execution of sale deed by the
State Government or Collector but with a view to see that the
respondent Nos. 1 and 3 hereinafter may not create any
hurdles in the execution of the sale deed of the "land/property
in question", they are hereby directed to issue "NOC" in favor
of the petitioners within a period of 04 weeks from the date of
receipt of copy of this judgment.
In view thereof, this petition stands allowed.
Rule made absolute.
Sd/-
(UMESH A. TRIVEDI, J.)
Sd/-
(CHEEKATI MANAVENDRANATH ROY, J.)
Raj
