Riyaz Ismail Machhiwala & Anr. v. The State of Maharashtra & Anr.

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 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 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 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: ulcmumbaiagglo@gmail.com No. Collector/ULC/D-3/Section 20/ WS-72/R.1.Machiwala/2021/ Outward No. 292/21 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. “-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 (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 onetime premium could be charged by the Government only in respect of the surplus vacant land which is exempted under Section 20 of the ULC 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 onetime 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 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.2058[7] 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 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 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 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 applied. For the sake of convenience, the operative part of the decision passed by this Court in Modern Paints (supra) is reproduced hereunder:-