Huhtamaki India Limited v. The State of Maharashtra & Ors.

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 Petitioner inter alia seeks an order to direct Respondent No.1 and/or Respondent No.2 to refund an amount of Rs.19,21,70,250/-, which, according to the Petitioner, is illegally JULY 15, 2024 exacted from it for obtaining a No Objection Certificate for sale/redevelopment of their land bearing S. No.131/1 to 5, 132/A-1/1, 132/A/1,3,4, 134/1, 2A, 4, 136/1 to 7, 137/1 to 5,[7] & 8, 139/2P, 3, 4, 5,6, 140/1 to 7, 140/8B, 8C, 140/9, Village Majivade, Tal. Dist. Thane, admeasuring 54,540 square meters. After certain deductions [as more particularly mentioned in the order of demand dated 16th October 2023], the entire land of the Petitioner admeasures 41,472 square meters (for short “the entire land”).

3. It is the case of the Petitioner 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 Ashvini Narwade 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 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 all industries in the vicinity of the entire land of the Petitioners had shifted/shut down, it is the case of the Petitioner that in or around 2022, the Petitioner also closed/shut down the factory constructed on the entire land.

6. Since the Petitioner was desirous of selling the entire land, the Petitioner filed an Application dated 8th June 2023 before Respondent No.2 enquiring about the one-time premium required to be paid for the surplus exempted 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 surplus exempted vacant land.

7. In response thereto, Respondent No.2 issued a letter/demand dated 16th October 2023, stating that in view of the 2019 GR, the one-time premium required to be paid by the Petitioner would be in respect of the entire parcel of land (i.e.41,472 square meters) and not merely the surplus exempted vacant land. The Petitioner was 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.27,74,47,680/-. A copy of the said letter/demand dated 16th October 2023 is annexed at Exhibit-H to the Petition. The English translation of the said letter/demand, which is not disputed by either party, reads thus:- “DISTRICT COLLECTOR & COMPETENT AUTHORITY, THANE AGGLOMERATION, THANE District Collector Office Bldg., second Floor Tel: 022 25343492 Email: ulcthane27@rediffmail.com Out.no.ULC/TA/ATP/Sec. 20 demand Notice/A.S./ M/s Paper Product Ltd./ Out.No.448 Date: 16.10.2023 To, M/s Paper Product Pvt. Ltd. C/o Hutamaki India Ltd. Add: LBS Marg, Majivade, Thane (W) 400601. Subject: To grant permission for development by deleting the remark "Exemption for industrial purpose under Section 20 of Urban Land Ceiling Act 1976 and prohibition on transfer without prior permission" on the land exempted for industrial purpose under Sec. 20, Urban Land (Ceiling & regulation) Act 1976, on payment of premium as per the provisions in Government Decision dt. 01.08.2019. Reference: 1) Government Decision No. ULC 2018 /Pra. Kr.51/ULC-1 dt. 01st August 2019.

2) Your application dt. 08.06.2023. In the above subject matter, the total area in the Scheme Order under Section 20 for Industrial Purpose in S. NO. 131/1 to 5, 132/A-1/1, 132/Α/1, 3, 4, 134/1, 2A, 4, 136/1 to 7, 137/1 to 5, 7 & 8, 139/2P, 3, 4, 5, 6, 140/1 to 7, 140/8B, 8C, 140/9, Village Majivade, Tal. Dist. Thane, is 54540.00sq. mt. After deducting the area in ceiling limit 2000.00 sq.mt.from total area of 54540.00 sq.mt. the remaining area is 52540.00sq.mt. You have requested vide your application dt. 08.06.2023 to delete the remark, "Exemption for industrial purpose under Section 20 of Urban Land Ceiling Act 1976 and prohibition on transfer without prior permission" in 7/12 record by charging the premium at 15% premium in annual Market Value Rate Chart as per the provision in Government Decision dt. 01.08.2019, for the remaining area of 41472.00 sq. mt. i.e. after excluding the total area of 11068.00 sq. mt. comprising of (1) Area under road reservation transferred to Thane Municipal Corporation 4948.00 sq.mt.(2) Area under School Reservation S.No.137/1B 3000.00 sq.mt., S.No.137/1E 1500.00 sq.mt.and S.No.137/2/2 area 1100.00 sq.mt. totaling area 5600.00 sq.mt.(however remarks of S.20 will remain in Other Rights of 7/12) (3) area transferred in the name of Western India Steel Industries S.No.134/3E 42.00 sq.mt., S.No.137/5A

478.00 sq.mt. Totaling 520.00 sq.mt. (however remarks of S.20 will remain in Other Rights of 7/12). After excluding the said area of 11068.00 sq.mt. from the area of 52540.00 sq.mt. (which is total area in the Order 54540.00 sq.mt. Less: 2000.00 sq.mt. in ceiling limit), the residual is 41472.00 sq.mt. Pursuant to your above referred application, the Government Premium as per 1(A) in Government Resolution No.ULC 2018/ Pra.Kra. 51/ULC-1 dt.1st August 2019, for 41472.00 sq.mt. out of the Scheme Area 54540.00 sq.mt.under Section 20 for industrial purpose for S. No.131/1 to 5, 132/A-1/1, 132/Α/1, 3, 4, 134/1, 2A, 4, 136/1 to 7, 137/1 to 5, 7 & 8, 139/2P, 3, 4, 5, 6, 140/1 to 7, 140/8B, 8C, 140/9, Village Majivade, Tal. Dist. Thane) at 15% of the rate in prevailing Annual Market Value Rate Chart, is calculated as Rs.27,74,47,680/- (rupees Twenty Seven Crores Seventy four Lacs Forty Seven Thousand six Hundred eighty only). You may therefore draw a Demand Draft of the Government premium amount as per the Government Decision dt. 1.8.2019, in the name of "Assistant Town Planner, Thane Urban Agglomeration, Thane" and submit the same in this office within fifteen days from the date of this letter. Thereafter the necessary appropriate steps pursuant to your application will be taken to delete the remark "Exemption for industrial purpose under Section 20 of Urban Land Ceiling Act 1976 and prohibition on transfer without prior permission" appearing in Other Rights column in 7/12 Records, as per the Government Decision dt. 01.08.2019. Office copy bears the signature of Hon'ble District Collector & Competent Authority. Sd/- (Sudam Pardeshi) Dy. Resident Dist. Collector & Co-ordination Officer For District Collector & Competent Authority Thane Urban Agglomeration, Thane”

8. Since the Petitioner could not effectively deal with its own property without paying the demanded sum, the Petitioner, on 20th October 2023, paid the one-time premium demanded, though under protest and without prejudice to the Petitioner’s right to seek a refund. This payment was made under protest because according to the Petitioner, 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] had held that under the 2019 GR, read with the 2021 GR, the one-time premium could be charged only in respect of the surplus exempted vacant land [i.e. which is exempted under Section 20 of the ULC Act]. Despite this, the payment demanded was for the entire land of the Petitioner. Be that as it may, since the entire payment was made by the Petitioner, the relevant No Objection Certificate was also granted by the authorities on 30th October 2023, which is also annexed at Exhibit- J to the Petition.

9. Thereafter, on 5th December 2023, the Petitioner requested for a refund of the amount of Rs.19,21,70,250/- from Respondent No.2. This refund was sought on the basis that the area of the surplus exempted vacant land was 12,747.07 square meters [on which the one time premium could be charged] whereas the Government had demanded the one-time premium on the entire land [i.e. 41,472 square meters]. This, according to the Petitioner, was contrary to the law laid down by this Court Salim Alimahomed Porbanderwalla which 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 exempted vacant land [i.e. 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”. The Petitioner, in the said letter, also brought to the notice of the authorities that the judgement in Salim Porbanderwalla was thereafter once again followed by a Division Bench of 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]. Since there was no response to the said letter, on 14th December 2023, the Petitioner once again requested for a refund of Rs.19,21,70,250/from Respondent No.2.

10. On 4th March 2024, Respondent No.2 rejected the request of the Petitioner to refund the excess amount. The ground for rejection was that the judgement passed in Salim Porbanderwalla [along with the other orders that were passed by this Court in similar matters], were in the process of being challenged before the Hon’ble Supreme Court and the refund would be granted in the event the challenge fails. It is in these circumstances that the present Writ Petition is filed seeking the following reliefs:- “a) That this Hon'ble Court be pleased to issue a writ of mandamus or a writ in the nature of mandamus or any other appropriate writ, order or direction directing the Respondent Nos. 1 and 2 to implement the Government Resolutions and refund the Excess Amount after deducting the premium amount only in respect of the Final Surplus Vacant Land admeasuring 12,747.07 square meters and implement the policy decision as contained in the Government Resolutions. (b) That this Hon'ble Court be pleased to issue a writ of certiorari or a writ in the nature of certiorari or any other appropriate writ, order or direction calling upon record and proceedings in respect of Demand Letter dated 16th October 2023 (Exhibit "H" hereto) issued by Respondent No. 2 and after going through the same, be pleased to quash and set aside the same to the extent the same charges the Excess Amount.”

11. In other words, the Petitioner seeks a direction to Respondent Nos.[1] and/or 2 to implement the 2019 and 2021 GRs keeping in mind the interpretation of the said GRs in Salim Porbanderwalla as well as in Modern Paints, and refund the excess amount of premium [of Rs.19,21,70,250/-] paid by the Petitioner.

12. In answer to this Petition, the only argument canvassed by Mr. Patel, the learned AGP, was that the Government is in the process of challenging the decisions of this Court in Salim Porbanderwalla and other similar matters. He submitted that, in fact, in the said order rejecting the refund, the Government has made it clear that in the event the challenge to Salim Porbanderwalla or other connected matters fails before the Hon’ble Supreme Court, they would refund the amount. He, therefore, submitted that there was no case made out for ordering a refund at this stage.

13. We have heard Mr. Khandeparkar, the learned Counsel appearing on behalf of the Petitioner, as well as the learned AGP, appearing on behalf of the Respondents. At the outset, we must mention that the facts and figures set out/narrated above are not disputed by either party. It is not in dispute that the entire land, after deductions, admeasuring 41,472 square meters belonged to the Petitioner. The fact that the one-time premium of Rs.27,74,47,680/levied on the Petitioner (and paid by it) is with respect to the entire land [namely on 41,472 square meters], is also not disputed. The refund is sought on the basis that the one-time premium has to be paid only in relation to 12,747.07 square meters, and which comes to Rs.8,52,77,430/-. Hence, the refund of Rs.19,21,70,250/- is sought from the Government. These facts and figures are undisputed.