Full Judgment Text
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO. 8557 OF 2003
VOLTAS LIMITED … APPELLANT
VERSUS
TEHSILDAR, THANE & ORS. … RESPONDENTS
WITH
CIVIL APPEAL NO. 8558 OF 2003
J U D G M E N T
SUDHANSU JYOTI MUKHOPADHAYA,J.
The Government of Maharashtra acquired the
land in question in favour of the appellant –
JUDGMENT
Voltas Limited, (hereinafter referred to as
‘Company’ for short) and issued a Sanad (order of
allotment) with the specific condition that the
Company shall not in any way whatsoever, alienate
the said land or any portion thereof by way of
sale, mortgage, gift, lease, exchange or otherwise
howsoever except with the prior permission in
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Page 1
writing, of the Government. After about 24 years,
the order of allotment was stayed and the Company
was called upon to show cause as to why the land
should not be forfeited and the amount of
Rs.14,11,45,851/ towards unearned income be not
charged as it violated the terms and conditions of
the order of allotment by granting rights to the
developers for the construction of houses and
selling them after development, thereby benefiting
to a large extent. After submitting their reply,
the respondents issued the impugned orders against
which two writ petitions were preferred by the
Company for setting aside the orders imposing the
charge towards unearned income and the demand
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notice, both of which were dismissed by the
th
impugned common judgement dated 10 March, 2003.
The Division Bench of the Bombay High Court held
that there was a breach of terms and conditions of
the order of allotment and, therefore, it was open
to the respondents to take the appropriate
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proceedings in accordance with law, including the
recovery of unearned profit.
2. For proper understanding of the question
involved, it is necessary to state a few facts as
hereunder:
The appellant, a Public Limited Company
engaged in manufacturing air conditioners,
refrigerators and other items, set up a factory in
the year 1966 at Thane, to carry out manufacturing
activities and for the said purpose, purchased land
admeasuring about 98,000 sq. mtrs. at village
Majiwada from a private party. For additional land
needed to effectively continue with the
manufacturing process, the Company approached the
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Government of Maharashtra with the request to
acquire land for the company under the provisions
of the Land Acquisition Act, 1894 read with the
Land Acquisition (Companies) Rules, 1963. On its
request, the State of Maharashtra acquired more
than one lakh square metres of land and handed it
over to the Company. An order of allotment was
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issued in favour of the Company on 20.1.1969 with
certain terms and conditions mentioned in the said
order, the Condition No.7 of which reads as under:
“The Company shall not in anywise
whatsoever alienate the said land
or any portion thereof by way of
sale, mortgage, gift, lease,
exchange or otherwise howsoever
except with previous permission in
writing of the Government.”
3. It was also mentioned in the order of
allotment, that the land will be vested with the
Company and shall be held by it as its property,
to be used for the purpose of constructing dwelling
houses for workmen employed by the Company and the
provisions of the amenities directly connected
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therewith, subject to the provisions of the
Maharashtra Land Revenue Code, 1966 and the Rules
framed thereunder. It was also stipulated that,
except with the previous permission in writing of
the Government, the land shall not be transferred,
for any purpose other than that for which it was
acquired. A condition regarding the construction
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of work was also imposed, with a further proviso,
that should the Company commit a breach of the
terms and conditions, the transfer of land in
favour of the Company would be treated as null and
void and the land would revert back to the
Government.
4. In the year 1976, the Urban Land (Ceiling and
Regulation) Act, 1976 (hereinafter referred to as
“the Urban Land Ceiling Act”) came to be enacted.
In accordance with the provisions of Section 20 of
the Urban Land Ceiling Act, the Company submitted
an application for holding land in excess of the
ceiling limit by grant of an exemption. The
Company also made an application under Section 21
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of the Urban Land Ceiling Act on 23.3.1979 for
granting an exemption for utilising the land for
construction of dwelling units to accommodate the
weaker sections of society. Pursuant to the
application, a Scheme under Section 21 of the Urban
Land Ceiling Act was passed by the competent
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authority on 11.1.1984, permitting the Company to
use the land for the stated purpose.
According to the Company, it complied with the
said order and to implement it, entered into an
agreement with one “Eversmile Construction Private
Limited” (hereinafter referred to as ‘developers),
for development of the land.
5. Since one of the conditions of the allotment
order, was that the Company could not alienate the
land in any manner without prior permission of the
Government, the Company wrote a letter to the
Collector and also to the Competent Authority,
Thane on 30.9.1986 and sought clarification as to
whether the conditions imposed under the Exemption
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Orders dated 11.1.1984 would prevail over and
supersede the conditions of the order of allotment
dated 20.1.1969. In reply to the said letter the
Deputy Collector and Competent Authority, Thane,
Urban Agglomeration issued a clarification on
29.10.1986 stating that the condition relating to
alienation of land without prior permission as
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mentioned in the order of allotment, would stand
overridden by the terms of exemption granted under
Section 21, which reads as follows:
“With reference to your above letter I
have to inform you that the conditions
stipulated in this office Order No.
ULC/TA/F62/SR18 dated 11.1.1984 though
inconsistent with the conditions of the
original sanad, having over riding effect,
stand operative (vide section 42 of the
Urban Land (Ceiling & Regulation) Act,
1976.”
6. In the meantime, at the instance of the
Company and permission of the State Government,
the Developer proceeded with the following work:
Filed applications to the municipal and
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other authorities for commencement of
work; Cutting and falling of trees and
filling of land; Construction of roads as
per development plans; Laying down of
sewerage lines and water lines;
Recreational area providing gardens,
parks, pathways, plantation of trees etc.;
Substations and electrical cabling etc.
On getting permission, over 1200 flats
were constructed and possession of over
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600 flats was given in between July 1986
and 1989.
7. A writ petition was filed by certain employees
before the Bombay High Court in Writ Petition
No.2197 of 1987, challenging the exemption order
dated 11.1.1984, issued under Section 21 of the
Urban Land Ceiling Act and the order granting
development of the land. The said writ petition was
dismissed by the Bombay High Court on 18.6.1987.
8. In spite of the dismissal of the writ
petition, after 25 years of implementation of the
housing scheme, the Collector, Thane stayed the
said scheme by a letter dated 15.2.1989 followed by
the letter dated 27.2.1989.
JUDGMENT
The stay order was however not given effect
which is clear from the order dated 25.6.1991,
issued by the State Government, whereby the
application filed by the builder was entertained
and he was further allowed an eight years extension
for completion of the housing project.
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9. Pursuant to the information sought for by the
Competent Authority, the Additional Secretary,
Housing & Special Assistance Department, Government
of Maharashtra by its letter dated 2.12.1991
informed the Competent Authority about the
Government policy with regard to lands originally
acquired for industrial units but part of which
were subsequently declared excess under the Urban
Land Ceiling Act. By the said letter, the
circumstances under which 50% of the unearned
income can be recovered from the land holder, if
allowed to be retained and developed, was
intimated.
10. In the meantime, the State Government
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granted further extension to the builder for
completion of the housing project by orders dated
29.12.1993 and 1.7.1999.
11. While the work was in progress, the Collector
by letter dated 5.2.2002 informed the Company that
the land allotted to it for construction of
residences for its employees, was not utilized for
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the said purpose and instead the developer had been
given the right for construction of the housing
project and to sell them after development. It was
alleged that by such action, the Company breached
the terms and conditions of the order of allotment
and, thereby, was liable to pay 50% of its unearned
income to the State Government. As such the amount
had not been deposited, the Company was asked to
show cause as to why the land should not be
confiscated.
12. The Company denied the allegation and
explained vide reply dated 15.2.2002 but the same
was not taken into consideration. The Collector
vide impugned order dated 18.2.2002 held that the
JUDGMENT
Company breached the terms and conditions of the
order of allotment and thereby was liable to pay
50% of the difference amount of the unearned
income amounting to Rs. 14,11,45,851/ .
13. Being aggrieved the Company moved before the
High Court. Initially a writ petition, W.P.No.1481
of 2002 was filed by the Company to set aside
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orders dated 5.2.2002, 18.2.2002 and the demand
notice dated 6.3.2002. During the pendency of the
said writ petition, the respondents issued orders
dated 30.3.2002, 13.5.2002 and 9.10.2002 and called
upon the Company to pay 75% of the amount, i.e.
Rs.5,63,70,555/ towards ‘unearned income’, which
was challenged by the Company in the second writ
petition, W.P. No.7457 of 2002.
14. The respondents in their counteraffidavit
informed the High Court that they have no objection
if the matter is remanded to the Collector, for
fresh determination. Accordingly, the order of
demand was set aside and the matter was remitted to
the Collector, Thane for a fresh determination of
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“unearned income” but with adverse observations
against the Company.
15. The arguments of the learned counsel for the
Company are as follows:
(a) In absence of a specific finding regarding
breach of any condition, the proceeding against the
Company is not warranted.
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(b) In view of Section 42 of the Urban Land
Ceiling Act, the conditions mentioned in the
housing project scheme dated 11.1.1984 has an
overriding effect on the conditions specified in
the original order of allotment.
(c) The Company is not liable to pay any
portion of differential amount of the unearned
income, in absence of its determination; and
(d) In absence of any notice and hearing given
to the Company, the demand for payment of a portion
of unearned income is violative of the principles
of natural justice and fair play.
16. The learned counsel for the respondents
countered this argument by stating that the
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additional land was acquired in favour of the
Company which was to be used for the stated
purpose. The terms and conditions have been
specified in the order of allotment dated
20.1.1969. They are applicable to the total
acquired land, including the land which was
declared to be in excess and allowed to be
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retained. The principal object was the
construction of dwelling houses for the workmen
employed by the Company and for providing amenities
to them. As per the terms and conditions, the
Company cannot alienate the land or any part
thereof, either by way of sale, mortgage, gift,
lease or otherwise. In the event of a breach of
condition, the transaction can be declared null and
void and the land would revert back to the State
Government.
It was further contended that the Company
constructed a huge housing and commercial complex
known as “Vasant Vihar” in contravention of terms
and conditions. For the said reason the notice for
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reverting the land was rightly issued on the
Company. Further, as the Company disposed the land
in favour of the builder, it was asked to deposit
50% of the difference of the unearned income, which
is legal and in accordance with the law.
17. We have heard the learned counsel for the
parties and perused the record.
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18. The correctness of the impugned order can be
determined with reference to the following
questions:
(i) whether the Company breached any of
the terms and conditions of the order of
allotment;
(ii) whether the notice of demand of
50% of unearned income is legal and valid; and
(iii) whether the Company was required
to be heard before passing of the impugned
orders;
19. We will first consider the question in regard
to the breach of the terms and conditions of the
order of allotment, if any, committed by the
Company.
JUDGMENT
20. The conditions at Clauses 2, 4, 5, 7 and
10 of the ‘order of allotment’ dated 20.1.1969
relate to conditional restrictions on the
alienation of land or its use for any purpose
other than that for which it was allotted and read
as follows:
“2. The Company shall
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(i) Not, except with the previous sanction
in writing, of the Government use the
transferred land for any purpose other
than that for which it is acquired;
(ii) undertake the work of erecting,
constructing building or buildings
required by the Company within six months
from the date on which possession of the
said land is handed over to the Company
and complete the case within three years
from the aforesaid date;
Provided that if the Government is
satisfied, after making such enquiry as it
may deem necessary that the company was
prevented by reasons beyond its control
from erecting, constructing or executing
the buildings within the aforesaid period
of three years, it may extend the time for
completion by a period not exceeding one
year at a time.
Provided further that the total period of
extension shall not exceed three years.
(v) not use the said land or any building
or work that may be erected or executed
upon it for any purpose which in the
opinion of the Government is
objectionable.
JUDGMENT
xxx xxx xxx
4. (a) If the Company commits a breach of
any of the terms and conditions hereof,
Government may make an order declaring
that the transfer of the said land to the
Company is null and void and thereupon the
said land shall revert back to the
Government and the Government may by the
said order further direct that an amount
not exceeding onefourth of the account
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paid by the Company to the Government as
cost of acquisition under Subsection (1)
of Section 41 of the said Act, shall be
forfeited to the Government as damages and
the balance shall be refunded to the
Company. The order so made shall be final
and binding on the Company.
(b) The Company may with the previous
permission in writing of the Government
and within three months from the date of
the Government Order passed under rule
5(1)(iv) of the said Rules declaring the
transfer of the said land to the Company
as null and void, remove all such
buildings, erections or structures as may
be then standing upon the said land shall
deliver up the said land to the Government
in good order and levelled to the
satisfaction of the Executive Engineer,
Thane Division.
5. If the Company utilises only a portion
of the said land for the purpose for which
it has been acquired and Government is
satisfied that the Company can continue to
utilise the portion of the said land used
by it, even if the unutilized part thereof
is resumed, Government may, make an order
declaring the transfer of the said land
with respect to the unutilised portion
shall revert back to the Government and
Government may by the said order further
direct that an amount not exceeding one
fourth of the amount paid by the Company
as cost of acquisition under sub
section(1) of Section 41 of the said Act,
as is relatable to the unutilized portion
and be forfeited to the Government as
damages and the balance of the portion
shall be refunded to the Company. The
order so made shall be final and binding
on the Company. Provided further that the
order referred to in this condition shall
JUDGMENT
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not be made, unless the Company has been
given as opportunity of being heard in the
matter and that there is any dispute the
said land such dispute shall be referred
to the Court within whose jurisdiction the
said land or any part thereof, is situated
and the decision of that Court thereon,
shall be final and binding on the Company.
xxx xxx xxx
7. The Company shall not analyse
whatsoever alienate the said land or any
portion thereof by way of sale, mortgage,
gift, lease, exchange or otherwise however
except with previous permission in writing
of the Government.
xxx xxx xxx
xxx xxx xxx
10. Any moneys payable to the Government
by the Company or any persons claiming
under it by reason of any term and
condition imposed by the Government as
aforesaid shall without prejudice to any
other rights and remedies of the
Government be recovered from the Company
or such person/s as arrears of land
revenue.”
JUDGMENT
21. From the terms and conditions of the order of
allotment, it is apparent that there is a
restriction imposed on the Company to transfer the
land or change of use of the land etc. which can be
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made only with a prior permission of the State
Government, such as;
(i) No land can be transferred for any purpose
other than that for which it is allotted without
prior permission of the State Government.
[Clause
2(i)].
(ii) The construction to be completed within
the prescribed time frame. Extension of time for
completion of the construction of buildings etc.
can be granted only by the State Government
[Clause 2(ii) ].
(iii) The Company cannot alienate the land
or any portion thereof by way of sale, mortgage,
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gift, lease, exchange or otherwise except with the
prior permission of the State Government in writing
[Clause 7]
The following penal clause has also been
specified:
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(i) In case the Company commits any breach of
conditions and transfers the land or portion
thereof or changes the use of the land other than
for the stated purpose without prior permission,
the Government may declare the transfer as null and
void and revert back the allotted land to itself
[Clause 4(a)].
(ii) In case the Company utilises only a
portion of the land for the stated purpose and does
not use the rest of the portion of the land within
the specified period, the State Government may
revert back such unutilised portion of land and may
direct that an amount not exceeding onefourth of
the amount paid by the Company for the cost of
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acquisition, as is relatable to the unutilised
portion, be forfeited as damages [Clause 5].
However, no such final order can be passed
without giving an opportunity of hearing to the
Company as per the proviso to Clause 5, which reads
as follows:
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“Provided further that the order
referred to in this condition shall not be
made, unless Company has been given an
opportunity of being heard in the matter
and that where there is any dispute in the
said land such dispute shall be referred
to the Court within whose jurisdiction the
said land or any part thereof, is situated
and the decision of that Court thereon,
shall be final and binding on the
Company.”
22. Admittedly, regarding that portion of the
acquired land which was declared surplus,
the Company wanted to retain it for
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weaker section. On an application filed
by the Company, the Competent Authority
approved the housing scheme under
Section 21(1) of
the Urban Land Ceiling Act by its letter dated
11.1.1984 with conditions and restrictions, as
follows:
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“Circle No.ULC/TA/F62/SR18
Collectorate and Competent Authority to:
Thane Urban Agglomeration,
Collectorate, Thane
Dated:
11.1.1984
Read: The Scheme approved by the
Collector and the Competent Authority
No.3, Thane’s Order No.ULC/TA/F62/II
dated 13.2.1979.
2) The declaration filed by M/s. Voltas
Ltd. under Section 21(1) of the Urban
Land (Ceiling and Regulation) Act, 1976.
DECLARATION UNDER SECTION 21(1) OF THE
URBAN LAND (CEILING AND REGULATION) ACT,
1976
WHEREAS M/s. Voltas Limited holds vacant
land in excess of the ceiling limit in
the Thane Urban Agglomeration the
details of which are given in the
Schedule I, hereto appended;
AND WHEREAS the said declarant has
applied to hold the said land in excess
of the ceiling limit for undertaking
construction of houses for Weaker
Section of the Society under Section
21(1) of the Urban Land (Ceiling &
Regulation) Act, 1976;
JUDGMENT
AND WHEREAS the Competent Authority is
satisfied that having regard to the
location of the land the purpose for
which the land is proposed to be used;
AND WHEREAS the Competent Authority is
satisfied that the scheme contained in
this declaration for construction of
houses for weaker section of the society
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by M/s. Voltas Ltd. is in conformity
with the scheme approved by the
Authority specified in this regard by
the State Government;
NOW THEREFORE in exercise of the powers
conferred by subsection (1) of Section
21 of the Act, after having recorded in
writing the reasons for making this
order, the Competent Authority, hereby
allows the said declarant to continue to
hold the vacant land in excess of the
ceiling limit for construction of houses
weaker for section of society, as
specified in Schedule I, subject to the
following terms and conditions:
(1) Any construction of tenements for
weaker section of society under the
Scheme by the said declarant shall
necessarily be in accordance with the
prevailing Municipal Corporation
Regulations, Town Planning requirements
and such other regulations. In case
land development is necessary before
construction, it shall be carried out by
said the declarants at their own cost.
vacant The plots for school, shopping
centre, dispensary, recreational ground
etc. shall be provided in the layout
shall be constructed by the said
declarant at their own cost.
JUDGMENT
(2) The said M/s Voltas Ltd. shall
utilise at least 33% of the permissible
built up area as per density regulations
under this Scheme.
(3) The land allowed to be retained in
excess of the ceiling limit under this
order shall be fully utilized by the
said declarant for the purpose of
construction of tenements of the plinth
area not exceeding 40 sq. mtrs. and
tenements having plinth area less than
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80 sq. mtrs in respect of the lands
specified at AnnexureI.
(4) The said M/s. Voltas Ltd. on receipt
of the exemption shall commence
construction within a period of two
years and shall complete the project
within a period of six years.
(5) The said M/s Voltas Ltd. shall
reserve 10% of the dwelling unit for the
sale to the allottees nominated by the
Government and additional 10% tenements
shall be received for the sale to the
nominees of Collector, Thane.
xxx xxx xxx
(7) The said M/s Voltas Ltd. shall not
sell or otherwise transfer the dwelling
unit to a person if he or his family
also owns a dwelling unit in the same
urban agglomeration and he shall obtain
from the intending purchasers of
dwelling unit an affidavit to this
effect.
(8) selling The price of the 10%
tenements to be sold to Government
nominees shall not exceed Rs.1345 per
mtrs. sq. of plinth area (e.g. Rs.125
sq.ft. per of pinth) area and there will
no be price restriction on the remaining
tenements 90% to be sold in the open
market.
JUDGMENT
(9) The said M/s Voltas Ltd. shall
convey the land under the building the
land to be kept open as per building
regulations to the buyers of the
tenements as and when they form Co
operative Housing Society.
(10) The said M/s Voltas Ltd. shall
transfer only tenements constructed
under this Scheme or building alongwith
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land the appurtenant and vacant land to
extent the necessary to be kept unbuilt
per as the Municipal Regulations and
other statutory requirement if in the
layout for the Scheme the concerned
Municipal Authority has stipulated
certain reservations for various public
amenities such land, as well as the
internal roads of the layout, shall be
transferred by the said declarant to the
concerned Municipal Authority without
charging any consideration. Internal
roads shall be brought upto the standard
laid down by the Municipal Authority
before they are transferred.
(11) The entire construction programme
shall be regulated by the Maharasthra
Ownership flats (Regulation of the
promotion of construction, sale,
management and transfer) Act, 1965, if
the said person collects advances to
finance the Scheme from the prospective
occupants.
xxx xxx xxx
xxx xxx xxx
xxx xxx xxx
(15) In case the said declarant fails to
complete the housing Scheme and give
possession to the intending purchasers,
the to extent it is not complied with,
exemption the shall be deemed to be
withdrawn and the land with structures
shall be acquired under the Urban Land
(Ceiling and Regulation) Act,76 as if it
were vacant land.
JUDGMENT
(16) If at any time Competent Authority
satisfy to that there is breach of any
the of conditions mentioned in the order
shall it be competent for the Competent
Authority by order to withdraw the order
from the date specified in the order.
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(17) Provided that before making any
such order the Competent Authority
shall give the reasonable opportunity to
person the making representation against
proposed the withdrawal.
(18) When order is withdrawn or is
deemed to be withdrawn under these
conditions the provisions of the Chapter
III of the said Act shall apply to the
land as if the land has not been allowed
to be retained in excess of the ceiling
limit under this order.
xxx xxx xxx
(20) publicity Due in the local
newspapers should be given by the
applicant before starting the booking of
flats. the
(21) Declarant shall surrender 30% of
their present land under Weaker Section
Housing Scheme particularly as shown in
“ Yellow verge ” for public purpose viz.
Maharashtra for Housing Area Development
Authority.
Sd/
Collector & Competent Authority No.3
JUDGMENT
Thane Urban Agglomeration, Thane.”
23. A question was raised by the Company as to
which of the terms and conditions, including the
restrictions imposed by the order of allotment as
well as the housing scheme, under Section 21 will
prevail over other. The Competent Authority by its
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reply dated 29.10.1986 clarified and intimated the
Company that the conditions and restrictions in the
order of allotment as regards the alienation of the
land without permission, would be overridden by
the exemption granted and the terms and conditions
mentioned in the order of housing scheme. The said
letter reads as follows:
“No. ULC/TA/F.62/SR-18
Office of the Competent Authority
Thane Urban Agglomeration,
Mahatma Phule Sahakar Bhavan,
nd
2 Floor, Kadva Lane, Thane
Date: 29.10.1986
To,
Estate Manager,
M/s Voltas Limited,
Central Administration Deptt.,
19, J.N. Heredia Marg,
Ballard Estate, Bombay – 400036.
Sub: Exemption order No. ULC/TA/F-62/SR-18
JUDGMENT
Dated 11.1.84 in respect of land at Majiwade, Thane.
Ref: Your letter Majiwada dated 30.9.1986.
Sir,
With reference to your above letter I
have to inform you that the conditions
stipulated in this office Order No. ULC/TA/F
62/SR18 dated 11.1.1984 though inconsistent
with the conditions of the original sanad,
having over riding effect, stand operative
(vide section 42 of the Urban Land (Ceiling &
Regulation) Act, 1976.
Yours faithfully,
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Sd/
Dy. Collector &
Competent Authority,
Thane Urban Agglomeration & Kms.
Peripherial Area of Gr. Bombay.
As approved by the Collector.”
24. In order to implement the said housing scheme
dated 11.1.1984, the Company engaged the builder
with the knowledge of the State Government as is
apparent from the letters of extension issued by
the State Government from time to time including
the letter dated 2.12.1989 whereby the State
Government extended the period of construction. The
letter reads as follows :
“No. HWS-1086/(313)/D/XV.
Housing and Special Assistance
JUDGMENT
Department
Mantralaya, Bombay-400 032
Date: 2.12.89
M/s Eversmile Construction Company Pvt. Ltd.,
Conwood House, Yashodham
Gen. A.K. Vaidya Marg,
Goregaon (East), Bombay – 400 063.
Gentlemen:
Please refer to your letter No.
th
A/ECC/3515(A), dated the 13 November, 1989
seeking clarification regarding the period
for completion of the economically weaker
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section housing Scheme sanctioned on
1,46,610.25 sq. mtrs. of surplus vacant land
sanctioned by Collector, Thane u/s. 21 of the
Urban Land Ceiling Act, 1976 vide
th
orderNo.ULC/TA/F62/SR18, dated 11 Janurary
1984.
Government have now decided that a period
8 years of should be allowed for completion
housing of Schemes on land admeasuring 10
acres or more. I am therefore, directed to
th
inform you that your firm has time upto 11
January 1992 for completion of the project.
Kindly note that all other terms and
conditions of the exemption order remain
unchanged and shall continue to be binding
upon the landholders M/s. Voltas Ltd. and
your Firm.
Yours faithfully,
(S.V. Yadkikar)
Under Secretary to Government
Copy to:
- Collector, Thane
- City Engineer, Thane Municipal
Corporation, Thane
-
Deputy Collector and Competent
Authority, Thane
Select File”
JUDGMENT
25. The completion of the project was extended
from time to time and the developer engaged by the
Company was granted further time by the State
Government by a letter dated 25.6.1991, which reads
as follows:
“No. HWS-1086/(313)/D.XV.
Housing & Special Assistance Department
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Page 28
Mantralaya, Bombay-400 032
th
25 June 1991
| Goregaon (East), Bo<br>SUB: Order bearing<br>Sir, | |
|---|---|
| Please refer to your letter No.<br>A/ECC/91/862 dated 17th April, 1991 seeking an<br>extension in time for completion of<br>construction on 1,46,610.25 sq. mtrs. of<br>Surplus vacant land which has been permitted<br>to be retained for weaker sections housing<br>vide the captioned order dated 11th January<br>1984.<br>2. I a m directe d t o stat e tha t i n<br>supersessio n o f Govt . lette r o f eve n numbe r<br>date d 2.12.1989 , t h e Stat e Govt . i s please d<br>t o gran t a furthe r extensio n o f 2 year s f o r |
JUDGMENT
Yours faithfully,
(S.S. Jadhav)
Under Secretary to Government”
26. In this case, learned counsel for the
respondent could not lay his hand on any specific
breach of the terms and conditions with regard to
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the surplus land. There is no allegation of breach
of any terms and conditions of the order of
allotment in regard to rest of the land which has
not been declared surplus.
From the housing scheme dated 11.1.1984 it is
apparent that the State Government allowed the
change in its utilization for developmental
purposes other than stipulated. By the said
housing scheme dated 11.1.1984 the excess land was
allowed to be developed for construction of the
houses for the weaker sections; for school,
shopping centre, dispensary, recreationary ground,
etc. The Company was allowed to utilise at least
33% of the built up area for its purpose and the
JUDGMENT
rest for other purposes. The development work was
done by the Company at its own cost; 10% of the
dwelling unit was reserved in favour of the State
Government to be sold to its nominated allottees
and an additional 10% of the tenements were to be
sold to the nominees of the Collector. The sale
price of the 10% tenements reserved for the nominee
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of the State Government was fixed at Rs. 1345/ per
sq. mtrs. of plinth area; no price restriction was
made for the remaining 90% tenements which are to
be sold in the open market. The Company was asked
to give due publication in the local newspapers for
booking of flats to be sold in the open market with
the further condition that 30% of their land was to
be surrendered to the Maharashtra Housing Area
Development Authority.
27. The Company decided to develop the land as per
the Housing Scheme dated 11.1.1984 through the
Developer M/s Eversmile Construction Company Pvt.
Ltd. This was intimated to the State Government
which agreed to the proposal, as is clear from the
JUDGMENT
State Government’s letter dated 2.12.1989 issued
from the Department of Housing and Special
Assistance, Government of Maharashtra, Bombay.
The State Government at the request of the
Developer, M/s Eversmile Construction Company Pvt.
Ltd. also extended the period of completion for the
th
housing scheme, vide letter dated 25 June, 1991.
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28. We, therefore, hold that the State Government
allowed the Company to change the use of the land
and to develop the surplus land for purposes other
than that for which the said land was originally
allotted and such permission is in accordance with
the terms and conditions as mentioned in the order
of allotment dated 20.1.1969. The first question
is thus answered in negative, in favour of the
company.
29. Turning now to the second question, we find
that the order of allotment dated 20.1.1969 and
the scheme dated 11.1.1984 do not stipulate any
charge on the unearned income of the Company. The
respondents have failed to show the provision under
JUDGMENT
which the Company is required to pay 50% of its
unearned income.
30. The communication dated 2.12.1991 between the
Additional Secretary of the State and the Competent
Authority discloses the entitlement of the State to
charge part of the unearned income in certain cases
where lands have been provided to the industrial
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units after acquiring land under the Urban Land
Ceiling Act but part of which is subsequently
declared surplus under the Urban Land Ceiling Act
but allowed to be retained. As per the said
guideline, in case, the land acquired is declared
excess but allowed to be retained by a scheme
framed under Section 21, then 50% of the unearned
income is to be recovered subject to the conditions
prescribed therein which reads as follows:
“NO.ULC 1089 (0007)/D13
Housing & Special Assistance Department
Mantrallay, Mumbai – 400 032
Date: 2.12.91.
To
The Additional Collector &
Competent Authority,
Mumbai (Pune)
JUDGMENT
The Dy. Collector & Competent Authority
Thane/Ulhasnagar/Pune/solapur/Kolhapur/N
agpur Nashik
Subject: Lands which have been
provided to the Industrial Units
after acquiring as per Part Seven
of the Land Acquisition Act 1894.
Schemes which have been sanctioned
as per Urban Land Ceiling Act,
1976.
Instructions have been given as per the
Semiofficial letter dated 13.3.1987
bearing some number that as the
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Government is again entitled for the
rights of holding on the lands which
have been acquired and provided to the
Industrial Units as per the Part Seven
of the Land Acquisition Act 1894 but
which have not been brought in the use
within the prescribed time limit and if
such lands will be included by the
Industrial Units in the Statement u/s 6
of the Urban Land Ceiling Act 1976 the
same should be pointed to the Revenue
and Forest Department.
In this connection you are being
informed that as per provisions Part
Seven of the Land Acquisition Act 1894,
if the Schemes have not been actually
started which have been sanctioned u/s
20 and 21 of the Urban Land Ceiling Act
1976, then exemption granted for the
lands should be cancelled.
If an accordance with the Exemption
Order if the development work on the
land which has been acquired/allotted as
per Section 20 and 21 is in progress
then 50% amount of undecided income in
such case should be recovered from the
landholder.
JUDGMENT
If at that time in accordance with the
existing Scheme if the landholder had
returned 40% and 30% additional land to
the Government, then in such case, 50%
unearned income should not be recovered.
Sd/
(H.M. Komalkar)
Additional Secretary,
Government of Maharashtra.
Copy forwarded to:
The Desk Officer,
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Desk No.13, 14, 15 and 16
Housing & Special Assistance Department,
Desk 13, Selection File
The Collector, Mumbai
Suburban/Thane/Pune/Nagpur/Nashik/Solapu
r/Kohapur/
Sangali”
31. In the present case, the respondents have
failed to show the category to which the Company
belongs for determining its liability towards
unearned income.
32. Before this Court the respondents have not
produced GO dated 21.11.1957; in absence of 1957
policy it is not possible to decide whether the
company is liable to pay any amount towards
unearned income as per the said policy. The second
question is, therefore, not answered and left open
JUDGMENT
for determination.
33. So far as the third question is concerned,
admittedly, no hearing was given to the Company
before passing the impugned orders. There is
nothing on record to suggest the basis on which the
respondents determined the unearned income.
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It is a settled law that no Penal order can be
passed without giving any notice and hearing to the
affected person. In the present case, admittedly,
the impugned orders were passed without giving such
notice and hearing to the company; the impugned
orders were passed in violation of the Rules of
Natural Justice. The third question is thus
answered in affirmative in favour of the company.
34. The High Court failed to notice the aforesaid
facts and erred in holding that the Company
breached terms and conditions of the order of
allotment.
35. For the reasons aforesaid, we cannot uphold
the impugned orders and the demand notice dated
JUDGMENT
6.3.2002 issued by the Collector and the order
passed by the High Court. All the aforesaid orders
are accordingly set aside. The matters are
remitted to the Competent Authority to decide
whether the Company is liable to pay any amount
towards part of the unearned income. Before
passing such order, the Competent Authority will
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issue a fresh show cause notice to the company
referring therein the rule/order/guideline, if any,
pursuant to which the company is liable to pay part
of the unearned income. The company may file an
effective show cause reply within four weeks
thereof. Thereafter, the Competent Authority after
hearing the Company will decide the question and
pass an appropriate order in accordance with law.
The appeals are allowed with the aforesaid
observations and directions but there shall be no
order as to costs.
……………………………………………….J.
( G.S. SINGHVI )
JUDGMENT
……………………………………………….J.
(SUDHANSU JYOTI MUKHOPADHAYA)
NEW DELHI,
NOVEMBER 8, 2012.
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