Harshada Sawant v. State of Maharashtra

5.7. State approved the proposal of the lessee as also the similarly placed adjacent sub-plot holders i.e. 17A and 17B but did not issue the statutory notification under section 37(2) of the Maharashtra Regional and Town Planning Act, 1966 (for short “the said Act”). Lessee filed Writ Petition No.2484 of 2017 in this Court, inter alia, praying that the subject plot was deemed to have been released from designation of service industrial zone to residential zone and it was deemed to be available for development. In the interregnum, lessee expired and Petitioner as his Executor sought impleadment in the Writ Petition. At that time it was informed to the Court, that Urban Development Department of the State Government had issued Notification dated 27.05.2019 sanctioning variation in the Town Planning Scheme in respect of the subject plot by deleting the designation of service industrial estate and including it in “residential zone”.

5.8. Admittedly, lease period in the present case subsists till the year 2035.

5.9. In the meanwhile, it is Respondent’s case that on 12.12.2012, State Government published a Government Resolution Corrected / Modified Judgment as per Speaking to the Minutes of order dated 08.11.2023. 5 of 29 declaring its policy about renewal of leases, levy of annual lease rent, levy and recovery of conversion charges in the case of conversion of leasehold rights to occupancy – Class I (Ownership). The State Government subsequently issued Notification dated 08.03.2019 to that effect and published Rules 2019 regarding terms and conditions for conversion from leasehold to Occupancy Class I (freehold).

5.10. Petitioner, for and on behalf of the estate of lessee applied for conversion from leasehold to freehold in view of the above Government Resolution and Rules. Petitioner addressed subsequent letters dated 02.11.2019 and 23.11.2021 to Collector in that regard.

5.11. Since Collector did not respond, Petitioner filed Writ Petition No.860 of 2022 seeking direction to Respondent No.2 - Collector to, inter alia, determine conversion charges of the subject plot and pass order on Petitioner’s letter seeking conversion from leasehold to Occupancy Class-I freehold status. This Court on 21.02.2022 directed Petitioner to file a comprehensive Application before the Collector and directed the Collector to hear the Petitioner and pass order thereon. Corrected / Modified Judgment as per Speaking to the Minutes of order dated 08.11.2023. 6 of 29

5.12. On 28.02.2022 Collector, Mumbai Suburban District (for short “Collector, MSD”) passed order to pay Rs.1,31,31,629/towards differential amount on account of lease rent for the period from 01.01.1975 to 31.03.2022, to pay Rs.2,92,80,078/- towards premium charges for conversion to Class I Occupancy from Industrial user calculated @ 50% of the market value prevalent in the year 2020-2021.

5.13. Since Writ Petition No.860 of 2022 was pending in this Court, this Court allowed Petitioner to withdraw the same with liberty to file a fresh Writ Petition to challenge the Collector’s decision.

5.14. Pursuant to liberty, Petitioner filed Writ Petition No.1505 of 2022 to challenge levy of Rs.1,31,31,629/- towards differential lease rent from 01.01.1975 to 31.03.2022 on the ground that the annual lease rent of the subject plot was fixed at Rs.83,082/- as per the registered lease Agreement and before execution of the said Agreement, Collector had recovered Rs.14,35,007/- towards lease rent together with interest for the period 01.01.1975 to 31.07.2003. This position according to Petitioner was reflected in the letter dated Nil.05.2006 addressed to the Chief Secretary, Revenue, Government of Maharashtra as also in Corrected / Modified Judgment as per Speaking to the Minutes of order dated 08.11.2023. 7 of 29 the lease document. That apart, challenge was also maintained to calculation of conversion charges at the rate of 50% of the market value prevalent in the year 2020-2021 on the ground that the subject plot stood already converted from service industrial zone to residential zone on the basis of Petitioner’s Application made in the year 2012 -2013 and Petitioner’s subsequent application was for seeking conversion of leasehold status land to Occupancy Class-I made in the year 2019. Petitioner contended that Respondent No.2 ought to have levied 25% conversion charges as prevalent in the year 2019. In the interregnum, Petitioner filed Interim Application No. 1088 of 2022 agreeing to pay the conversion charges at the rate of 25% of the market value of Rs.5,85,60,155/- as determined by the Collector in the order dated 28.02.2022 and sought conversion of the subject plot to Occupancy Class-I (freehold) land) as per Rule 3 of the Maharashtra Land Revenue (Conversion and Occupancy Class-II and Leasehold Lands into Occupancy Class-I Lands) Rules, 2019 (for short “the said Rules”). The Respondent No.2 heard the Petitioner on 04.07.2022 and passed order dated 10.10.2022 which was received by Petitioner's advocate on e-mail on 11.10.2022 levying the following 3 demands:i) Rs.4,39,20,1160/- towards unearned income; Corrected / Modified Judgment as per Speaking to the Minutes of order dated 08.11.2023. 8 of 29 ii) Rs. 1,46,40,039/- towards conversion charges for change of user and; iii) Rs.13,74,849/- towards differential amount of lease rent from January 1975 to 31.07.2022.

5.15. Petitioner through his Advocate filed detailed response and objections by letter dated 14.10.2022 to the above demand in the impugned order dated 10.10.2022.

5.16. Since there was no response, Petitioner filed the present Writ Petition.

6. Mr. Khandeparkar, learned Advocate appearing for the Petitioner has made the following submissions:-

6.1. That the alleged claim of unearned income has been raised on the ground that the lessee Shahapur Jehangir Jambusarwalla has created an interest by this Last Will dated 15.01.2014 (which is probated) without obtaining prior permission of the Government;

6.2. That the alleged demand is made for the first time pursuant to registered agreement of lease date 19.04.2012 and is on a completely illegal and wrong basis in view of the fact that Corrected / Modified Judgment as per Speaking to the Minutes of order dated 08.11.2023. 9 of 29 there can be or is no transfer of the subject plot effected by / through the Will of the lessee on record;

6.3. That the lessee made his joint will on 15.01.2014 and expired on 19.04.2018 and Testamentary disposition of the property of the lessee under the said Will does not amount to transfer;

6.4. That Petitioner is the Executor of the Will of the deceased lessee and in that capacity is in possession of the subject plot and thus Petitioner’s possession does not amount to transfer;

6.5. That the alleged claim of unearned income is based upon Government Resolution dated 21.11.1957 which is ex facie bad in law, in view of the subsequent Government Resolution dated 12.12.2012, Government Notification dated 08.03.2019 and provisions of section 37A of MLRC,1966.

6.6. That the said Notification cannot be relied upon to compute unearned income @ 75% of the market value prevalent in the year 2022 which is impermissible in law.

7. That in respect of differential lease rent demand for the period from 01.01.1975 to 31.07.2022 Mr. Khandeparkar has made the following submissions:- Corrected / Modified Judgment as per Speaking to the Minutes of order dated 08.11.2023. 10 of 29

7.1. That before execution and registration of the lease agreement Collector has already recovered all previous arrears of lease rent from 01.01.1975 to 31.07.2003 together with interest and hence such a claim is illegal;

7.2. That in the registered lease agreement dt. 19.04.2012 it is a stated position in the Recitals that arrears of lease rent for the above period has already been recovered from the lessee;

8. That in respect of the demand of Rs.1,46,49,039/being the premium for change of user, Mr. Khandeparkar has made the following submissions:-

8.1. That the first Application for change of user was made by the lessee in the year 2012-2013 and the premium then chargeable was 3% of the market value of the subject plot;

8.2. That the aforementioned levy of premium to be charged at the rate of 3% of the market value was confirmed by the Undersecretary, Revenue, Government of Maharashtra as being the prevailing rate and policy while referring to Collector’s letter dated 27.04.2012 and accordingly permission was granted for change of user of the subject plot from service industrial user to residential user; Corrected / Modified Judgment as per Speaking to the Minutes of order dated 08.11.2023. 11 of 29

8.3. That, the change of user premium has to be on the date of the date on which the Application is made for such change and this position is confirmed by the Supreme Court in its various decisions; and

8.4. That therefore charging change of user premium at the rate of 25% of the market value of the year 2022 in the present case when admittedly the lessee filed his application in the year 2012 is illegal, malafide and a colourable exercise of power.

9. In support of his submission Mr. Khandeparkar has referred to and relied upon the following decisions:-

9.1. For the proposition that bequest cannot be considered as transfer:

9.2. For challenge to Respondent relying upon Notification dated 21.11.1957 for levy of unearned income:i) Wilfred Anthony Jose Pereira & Anr. Vs. The State of Maharashtra & Ors.[2] ii) Hindustan Unilever Limited & Anr. Vs. State of Maharashtra through Secretary Revenue & Forest 1 ILR 2001 Kar 3466 2 2014 (1) All MR 540 Corrected / Modified Judgment as per Speaking to the Minutes of order dated 08.11.2023. 12 of 29 Department and the Secretary Law & Judiciary Department & Ors.[3]

9.3. For arguing that the material date for calculating conversion premium being a percentage of the market value of the property is the date of application for conversion (2012) and not the date of decision (2022):i) Union of India & Anr. Vs. Mahajan Industries Ltd.[4] ii) Kumodini Govindji Doshi & Ors. Vs. The State of Maharashtra[5] iii) Yogesh Bhika Choudhary Vs. The State of Maharashtra & Ors.[6]

10. PER CONTRA, Mr. Patki, learned AGP has drawn my attention to the Affidavit-in-reply dated 20.10.2023 filed by Purshottam D. Thorat, Naib Tahsildar in the office of the Collector, MSD. He has drawn my attention to paragraph Nos. 5 and 6 which are the only objections raised by the Respondents with a caveat that the office of the Collector is still awaiting response from the State Government. State Government

5 Decided on 04.02.2019 in WP No.7600 of 2017 by this Court 6 Decided on 28.09.2017 passed in WP No.3019 of 2016 Corrected / Modified Judgment as per Speaking to the Minutes of order dated 08.11.2023. 13 of 29 incidentally is a Respondent before me. I have perused the objections raised by the Collector in paragraph Nos.[5] and 6 and before I deal with them, for the sake of reference they are reproduced verbatim herein:- “...5. I say that, in the event, any person, ‘without any permission “Transfers” the Governemnt lease land in that event, as per the Government Resolution dated 21.11.1957, after taking into consideration, the Market Rate of the Property “unearned income” of Market Value is levied. The same is correctly cxalculated and levied in the case of Petitioner, at Rs.4,39,20,116/- Accordingly an Order has been passed on 10th October 2022, by the Collectr, M.S.D. There is no infirmity and illegality in the said Order.

6. In respect of the request made “for change of user” in year 2013, by the pre-decessor in title of Petitioner the title to the Collector, M.S.D. Report was submitted to the Government on 13/06/2013. The Government in its part had “finalized” the policy only on 18/02/2019, for granting permissions “for industrial purpose” or for other purposes, han for which the Lands are granted. The State Government subsequently, has issued “Revised Policy” dated 5th July, 2023 which inter alia mentions that, while considering the Application for change of user or conversion from Class-II to Class-I Occupancy, the effects of earlier Government Resolution dated 21.11.1957 and others, should not be taken into consideration.”

11. From the above, all that I can understand is that the Respondent has justified the levy of the alleged demand on the basis of Government Resolution dated 21.11.1957. He contended that in the event if any person without permission transfers Government leasehold land then as per Government Resolution dated 21.11.1957 and its applicability, unearned income on the basis of the market rate of the property is required to be resumed and in the present case the unearned income has been correctly calculated at Rs.4,39,20,116/-. Corrected / Modified Judgment as per Speaking to the Minutes of order dated 08.11.2023. 14 of 29

12. It is further averred in the Collector’s reply that in respect of change of user, it is Respondent’s case that since Government had finalized its Policy only on 18.02.2019 and subsequently issued a revised Policy on 05.07.2023, the said revised Policy would apply to Petitioner’s case as it states that the earlier Government Resolution dated 21.11.1957 and other Resolutions should not be taken into consideration. On the basis of the above, Mr. Patki would submit that there is no infirmity or illegality in the impugned order dated 10.10.2022.

12.1. Prima facie, on reading the Collector’s submission and on hearing Mr. Patki, I find that there is no application of mind whatsoever by the Collector to the present case at all.

13. I have heard Mr. Khandeparkar, learned Advocate for Petitioner and Mr. Patki, learned AGP for Respondents – State and with their able assistance perused the pleadings and records of the case. Submissions made by the learned Advocates for the parties have received due consideration of the Court.

14. Before I advert to the merits of the case, it is seen that the stand adopted by the Collector is completely dehors the statutory provisions and the decisions of the Supreme Court and this Court in so far as issues pertaining to bequest being not a Corrected / Modified Judgment as per Speaking to the Minutes of order dated 08.11.2023. 15 of 29 transfer, unearned income and the material date to be adopted for calculating conversion premium being the date of the first / original Application are concerned. Reliance of Respondent on Government Resolution dated 21.11.1957 for the purpose of computing and calculating unearned income is completely fallible and unsustainable in law, mainly because the said Government Resolution predates itself before the enactment of MLRC, 1966 and in that view of the matter would have absolutely no application and relevance whatsoever. Defence taken by the Collector is stated to be rejected.

15. It is seen that, in the present case the impugned order proceeds on three reasons for the demand of levying of the charge pertaining to conversion premium from class-II to class-I occupancy. In the first instance, Collector has levied arrears of lease rent from 01.01.1975 to 31.03.2022. In this regard, it would be pertinent to refer to the registered lease Agreement dated 19.04.2012 which is at Exhibit - A page No. 46 of the Writ Petition and the relevant recital stated in the Agreement. The said recital on page 2 of the Agreement reads thus: “AND WHEREAS after recovery of arrears of lease rent with interest the land in question is transferred to him name (the lessee) on certain terms and conditions and physical possession of plot Corrected / Modified Judgment as per Speaking to the Minutes of order dated 08.11.2023. 16 of 29 No.17 sub-plot No.16 area adm. 600 sq. yards equivalent to 501.[5] sq. mts land is also given to him.”

16. Such an unequivocal recital in the lease agreement which clearly confirms recovery of arrears of lease rent with interest (emphasis supplied) would preclude and prohibit levy of the same demand twice. The period of arrears of lease rent with interest as referred to in the lease agreement is confirmed in the letter dated Nil.05.2006 at page No.192 Exhibit - Q to the Petition. This is a letter addressed by the Collector, MSD (Respondent No.2) to the Principal Secretary, Revenue and Forest Department, Mantralaya, Mumbai certifying that pursuant to proceedings, office of the Collector passed order dated 24.03.2003 for paying lease rent amount for the period from 1975 till 31.07.2003 and the lessee has paid the arrears of lease rent and the entire amount of interest thereon till date (upto 2005).

17. It is seen that only on the lessee having paid the arrears of lease rent, the Collector recommended lessee’s case to the State Government for renewal of lease since at the then time, there was no policy of Government enabling the Collector to renew the lease. Once this was done and in the manner in Corrected / Modified Judgment as per Speaking to the Minutes of order dated 08.11.2023. 17 of 29 which it was done and complied with by the lessee, levy of arrears of lease rent for the period 01.01.975 to 31.03.2022 of Rs.13,74,849/- in the impugned order is not justifiable, arbitrary and deserves to be interfered with. The said levy of arrears of lease rent cannot be recovered in the facts and circumstances which have been stated and alluded to herein above. Equally, once the registered lease was executed and registered with the terms and conditions as stated therein, such an unprecedented retrospective claim of arrears of lease rent raised and levy by the Collector is not only impermissible but illegal. Hence the demand of Rs.13,74,849/- as stated in the impugned order stands quashed and set aside.

18. The next demand / reason stated in the impugned order pertains to levy of unearned income of Rs.4,39,20,116/-. It is seen that this demand is calculated on the basis of a Government Resolution dated 21.11.1957. It is pertinent to note that pursuant to enactment of the MLRC, 1966 and the provisions of the said Act, any demand for unearned income has to be based upon the provisions of the MLRC, 1966 only. Reference to the Government Resolution dated 21.11.1957 and reliance thereon for computing the impugned demand of Corrected / Modified Judgment as per Speaking to the Minutes of order dated 08.11.2023. 18 of 29 unearned income in the year 2022 is completely misplaced. Infact in paragraph No.6 of the Collector’s reply, it is agreed by the Collector that due to subsequent policy of the Government the 1957 Resolution be disregarded to decide the purpose of levy of unearned income the issue of transfer needs to be considered. Only if there is a transfer of the subject plot, levy of unearned income can be effected. What is at the heart of the matter is the fact that whether the lessee has created an interest much less a transferable interest in the subject plot in favour of any third party. Collector’s objection can be considered valid if the subject plot is transferred to a third party and a transferable interest in the subject plot is created. However such is not the case here. From the cause title of the registered Agreement of lease dated 19.04.2012, it is gathered that the term ‘lessee’ referring to the lessee in the present case includes his heirs, executors and administrators. Pertinently Petitioner is one of the executors under his Will, which is probated on 12.07.2021. Once this is the fact, it cannot be presumed that the lessee has transferred the subject plot in favour of his executor. It is trite position in law that a “Will” comes into effect only after the death of the testator and no permission at all can ever be required for making a “Will” from the Government as sought to be argued in the present case. Corrected / Modified Judgment as per Speaking to the Minutes of order dated 08.11.2023. 19 of 29 Though the Government would harp on the condition that no interest can be created without prior permission of Government in respect of Government land which is one of the conditions (No.7) stated in the Collector’s letter dated 26.11.2007. However the question to be answered in the present case is whether a bequest can amount to a transfer. In this regard it will be appropriate to refer to the decision of N. Ramaiah Vs Nagaraj S. & Anr. (first supra) decided by the Division Bench of the Karnataka High Court and quote paragraph No.10 and more particularly point for consideration no.(i) therein as decided in the said judgment. Paragraph Nos.10 to 13 are relevant in this regard and read thus: “10. The rival contentions give rise to the following points for consideration:

(i) whether a bequest of a property under a Will is a transfer of the property.

(ii) whether a direction to a party to maintain status quo in regard to a property, prohibits him from making a testamentary disposition; and whether a Will made during the operation of an order of status quo regarding a property, is void and non-est in so far as the bequest relating to such property. Re: Point (i)

11. Transfer of property Act, 1882 (‘TP Act’ for short) deals with transfers intervivos, that is, the act of a living person, conveying a property in present or in future, to one or more living persons. The provisions of TP Act are inapplicable to testamentary successions which are governed by Indian Succession Act, 1925. Section 2(h) of the Indian Succession Act defines ‘Will’ as the legal declaration of the intention of a testator with respect to his property which he desires to be carried into effect after his death. Corrected / Modified Judgment as per Speaking to the Minutes of order dated 08.11.2023. 20 of 29

12. The differences between a transfer and a Will are well recognised. A transfer is a conveyance of an existing property by one living person to another (that is transfer intervivos). On the other hand, a Will does not involve any transfer, nor effect any transfer intervivos, but is a legal expression of the wishes and intention of a person in regard to his properties, which he desires to be carried into effect after his death. In other words, a Will regulates succession and provides for succession as declared by it (testamentary succession) instead of succession as per personal law (non-testamentary succession). The concept of transfer by a living person is wholly alien to a Will. When a person makes a Will, he provides for testamentary succession and does not transfer any property. While a transfer is irrevocable and comes into effect either immediately or on the happening of a specified contingency, a Will is revocable and comes into operation only after the death of the testator. Thus to treat a devise under a Will as a transfer of an existing property in future, is contrary to all known principles relating to transfer of property and testamentary succession.

13. The learned Single Judge proceeded on a wrong premises when he observed that execution of a Will by a Testator devising his property, amounts to execution of a document creating new right, title or interest in a property and therefore execution of Will violates the order of status quo. By execution of a Will, no right or title or interest is created in favour of any one during the lifetime of the deceased. The first point if therefore answered in the negative.”

19. It is seen that there is a clear difference between a “transfer” and a “bequest under a Will” which is well recognized in law. Transfer is a conveyance of an existing property inter vivos i.e. by one living person to another whereas when a person makes a will he provides for testamentary succession which is a legal expression of his wishes and his intention to be carried into effect after his death. Another significant feature is that a transfer is irrevocable and comes into effect on the happening of a specified contingency whereas a Will once made is revocable during the lifetime of the testator and comes into play only after the death Corrected / Modified Judgment as per Speaking to the Minutes of order dated 08.11.2023. 21 of 29 of the testator. The decision in the impugned order to treat the devise under the Will of the lessee as a transfer of an existing property and levy unearned income on such an alleged transfer is contrary to the provisions of the Transfer of Property Act, 1882 and Testamentary Succession. No new right, title or interest is created in the property and thus a bequest of a property under a Will cannot be treated as a transfer of property. In this view of the matter the alleged demand of unearned income of Rs.4,39,20,116/- levied in the impugned order is contrary to law, legal provisions and therefore unjustifiable. The said demand of unearned income therefore deserves to be interfered with and is therefore quashed and set aside in its entirety.

20. It would also be pertinent to refer to the judgment of the Division Bench of this Court in the case of Wilfred Anthony Jose Pereira & Anr Vs. The State of Maharashtra and Ors. (second supra) wherein an attempt to justify the impugned orders by relying upon the Government Resolution dated 21.11.1957 was made by the State Government as a policy incorporated by the Government in the said Resolution. In this regard, it would be pertinent to refer to paragraph Nos.46 to 49 of the said decision which when read clearly put the issue of Corrected / Modified Judgment as per Speaking to the Minutes of order dated 08.11.2023. 22 of 29 placing reliance on the Government Resolution dated 21.11.1957 beyond the authority of the State Government. For reference paragraph Nos.46 to 49 which are relevant are reproduced below and read thus: “46. We must record here that both the learned Senior Counsel appearing for the State Government as well as the learned Senior Counsel appearing for the society attempted to justify the impugned orders by relying upon only Government Resolution dated 21st November 1957. Perusal of the written submissions filed by the State Government shows that reliance is placed only on the policy incorporated in Government Resolution dated 21st November 1957. Thus, the stand of State Government is that the action of regularisation has been take only on the basis of the said policy. It will be necessary to make a reference of Government Resolution dated 21st November 1957. Paragraph 1 of the said Government Resolution reads thus: “Government has, has under consideration the following points:

1) Whether permission for sale of non-agricultural plot held on new tenure should be granted and if so, subject to what terms and conditions;

2) Whether permission for convention for conversion of tenure of nonagricultural plot from new tenure into old tenure should be granted and if so, subject to what terms and conditions;

3) Whether unauthorised saled of the non-agricultural plots held on new tenure should be regularised and if so, subject to what terms and conditions and

4) Whether time limit for the construction of a building on nonagricultural plot shouyld be extended and if so, subject to what terms and conditions, and how the breach if any, of that condition should be dealt with. ” (underlined added)

47. The decision of the Government is recorded on point (3) reads thus: “Point (3):- The Collector should sanction regularisation of the unauthorised sale of new tenure plots, by sharing 62.5% to 75% of the difference between the sale proceeds and the original price paid by the grantee plus the value of the improvements made in the plot by the grantee. The Collector should fixed the percentage difference between 62.5% to 75% having regard to the circumstances and facts of individual cases. The conditions subject to which the plot was originally Corrected / Modified Judgment as per Speaking to the Minutes of order dated 08.11.2023. 23 of 29 granted, shall remain intact on regularisation of such unauthorised sale. (underlined supplied)”

48. The real issue is whether the said Government Resolution was still in force after the enactment of the Maharashtra Land Revenue Code,

1966. Assuming that it was applicable, the same applies only to unauthorised sales. Secondly, answer to point No.3 records that unauthorised sales shall be regularised. In the present case, the breach alleged is on the basis of development agreement by and between the original lessee and M/s. Kalpak. The findings of all the authorities is that there is an unauthorised transfer of the said land by the original lessee to M/s. Kalpak. There is no finding recorded by any authority that there is a sale of the said land to the said society. Therefore, on the basis of Government Resolution dated 21st November 1957 an order could not have been passed by the Collector and the State Government of placing the said society in the shoes of the original lessee, the power under Government Resolution dated 21st November 1957 has been exercised. The said argument appears to have been made for the first time in the Letters Patent Appeal.

49. There is another aspect which goes to the root of matter. The said Code (the Maharashtra Land Revenue Code, 1966) was brought into force on 15th August 1967. The said Code is brought on the statute book with a view to unify and amend the law relating land and the land revenue in the State of Maharashtra. There is no dispute between the parties that in view of the provisions of the Government of India Act, 1935 and the Constitution of India, the said land vested in the State Government. The said Code contains provisions for grant of lases. Section 38 confers power on the Collector to a lease under a grant or a contract in any unalienated unoccupied land to any person subject to rules made by the State Government in this behalf. In the present case, under the orders of the Collector and the State Government, a lease has been granted to the said society. This is not a case where unauthorised sale was regularized. In exercise of powers under section 38, the Maharashtra Land Revenue (Disposal of the Government Lands) Rules, 1971 (for short, “Land Disposal Rules”) have been brought into force which govern the grant of Government land. Rules 26 and 27 of the said Rules provides for grant of building sites. Sub-rule (1) of Rule 26 provides for disposal of the building sites by public auction to the highest bidder unless for reasons to be recorded in writing, the Collector holds that in any particular case, there is a good reason for granting the lands without auction. In the present case, none of the three authorities recorded any such reasons.”

21. The Division Bench of this Court in the above decision carved out two issues to be decided for seeking reliance on the said Notification namely whether the Government Corrected / Modified Judgment as per Speaking to the Minutes of order dated 08.11.2023. 24 of 29 Resolution of 1957 was still in force after the enactment of the MLRC, 1966 and whether the said Government Resolution can be relied upon in the case of a transfer since it pertained to sanction and regularization of unauthorized sale of new tenure plots and only in those cases would enable the Collector to fix the percentage difference between 62.5% to 75% of the market value having regard to the facts of each individual case.

22. Applying the ratio of the above decision in the present case, it is observed that this is not a case of an unauthorized sale and regularisation thereafter. In view of the settled legal position that bequest made under a Will cannot be treated as transfer and enactment of the MLRC, 1966 w.e.f. 15.08.1967 with a view to unify and amend the law relating to land and levy of land revenue in the state of Maharashtra and in exercise of powers under the MLRC Rules, reliance placed on the Government Resolution dated 21.11.1957 for determining the conversion charges in the present case is completely misplaced and incongruous.

23. Next, it is seen that, admittedly in the present case Application dated 19.03.2012 for seeking change of user was for the first time made by the lessee in the year 2012-2013 whereas, the Corrected / Modified Judgment as per Speaking to the Minutes of order dated 08.11.2023. 25 of 29 impugned order calls upon payment of lease rent to be calculated on the basis of the market value of the year 2022 i.e. the date on which the impugned order dated 28.02.2022 is passed levying conversion charges @ 50% of the market value for conversion form Class-II Occupancy to Class-I Occupancy. The Collector received that application and forwarded it to Respondent No.1 – State for approval and sanction on 27.04.2012. This letter of the Collector, MSD is appended at page No.54 of the Petition and is distinctly clear. The Supreme Court in the case of Mahajan Industries Ltd. (fourth supra) was considering the material date to be considered while imposing the conversion charges for land use of the property. The Supreme Court upheld the decision of the Delhi High Court which had framed and formulated the following question for consideration: “What is the right point of time (crucial date) which should be considered as the basis for grant of permission for the change of user (conversion) of the property in question from residential to multi-storey commercial building?”

24. The Supreme Court held that it has to be the date of receipt of Application for conversion of land use. In the present case admittedly the date of Application seeking conversion of land use is of the year 2012-2013 which was made by the lessee. Hence in this case it has to be calculated on the market value of Corrected / Modified Judgment as per Speaking to the Minutes of order dated 08.11.2023. 26 of 29 the subject plot as in the year 2012. Further action on the part of the State Government to recover unearned income at the rate of 75% of the market value on the basis of Government Resolution dated 21.11.1957 is illegal since the subsequent Government Resolution dated 12.12.2012 provided for rules for transfer of lease for change of user and by virtue of the subsequent Government Resolution of 2012, unearned income in the case of transfer of lease is required to be calculated at the rate of 25% of the market value. On 15.03.2015, section 37A has been incorporated in the MLRC,1966 for recovery of unearned income in respect of leasehold land. Hence, applicability of the Government Resolution dated 21.11.1957 is wholly unsustainable in law. Further, in so far as the date which should be considered for grant of permission for change of user has to be the date of receipt of Application for conversion and in the facts and circumstances of the present case, it has to be the year 2012 and not 2022 when the impugned order is passed. In the present case it is seen that though the Collector has specifically arrived at payment of 25% of market value to be charged for change of user, the Petitioner has in all fairness under the Government Resolution dated 18.11.2019 in the present case Corrected / Modified Judgment as per Speaking to the Minutes of order dated 08.11.2023. 27 of 29 has agreed to pay the charges for change of user at the rate of 25% of the market value prevalent in the year 2012.

25. In this context, attention is drawn to prayer clauses (b) and (c) of the Writ Petition read with the averments made in paragraph Nos.31 and 32, Petitioner has agreed to pay the premium for change of user @ 25% of the market value of the year 2012. Considering that the policy under the Government Resolution dated 18.11.2019 required payment of change of user charges @ 25% of the market value and the Application of the lessee having been made in the year 2012 itself, applying the said Notification to the lessee’s case, it is directed that the Petitioner is liable to pay the amount of Rs. 1,11,33,300/towards change of user from Service Industrial Estate to Residential. The Petitioner is also directed to pay the amount of Rs. 1,46,40,039/- towards conversion premium from Class-II to Class-I Occupancy as per the Maharashtra Land Revenue (Conversion & Occupancy Class-II and Leasehold lands into Occupancy Class-I lands) Rules, 2019.

26. In view of the above observations and findings, the impugned order dated 10.10.2022 is quashed and set aside with a direction to Petitioner to pay the amount of Rs. 1,11,33,300/towards change of user from Service Industrial Estate to Corrected / Modified Judgment as per Speaking to the Minutes of order dated 08.11.2023. 28 of 29 Residential and deposit / pay the amount of Rs.1,46,40,039/with the Respondent - State upon which the Collector shall follow the due process of law for conversion of the subject plot from Occupancy Class–II to Occupancy Class-I and issue the necessary process.

27. With the above directions, Writ Petition stands allowed and disposed. [ MILIND N. JADHAV, J. ] Corrected / Modified Judgment as per Speaking to the Minutes of order dated 08.11.2023. 29 of 29 HANUMANT SAWANT