1 dmt IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 3815 OF 2010 1. Mr. Jayesh Tokarshi Shah, of Mumbai, Indian Inhabitant, Partner of the Petitioner No. 2 having his office at 76, Laxmi Palace, Mathuradas Lane, Kandivali (W), Mumbai 400 067. 2. M/s. Ravi Development duly registered partnership firm carrying on business at 76, Laxmi Palace, Mathuradas Lane, Kandivali (W), Mumbai 400 067. .. Petitioners Vs. 1. Deputy Collector and Competent Authority Thane Urban Agglomeration, having their office at Collectorate Building, 2nd Floor, Thane 400 604. 2. Sub-Registrar of Assurance, Class I, Thane District, Thane. 3. Mira Bhayander Municipal Corporation, Mody Building, Chatrapati Shivaji Marg, Bhayander (East), District Thane. 4. The State of Maharashtra through its Secretary The Urban Development Department, Mantralaya, Mumbai 400 032. .. Respondents 2 Mr. Rajiv Narula a/w A. Dasgupta i/by M/s. Jhangiani & Narula Ass. For the Petitioners. Mr. V.S. Gokhale, AGP., for Respondent Nos. 1 & 2. Mr. M.S. Lagu, for Respondent No. 3. CORAM: B. H. MARLAPALLE & U. D. SALVI, JJ. JUDGEMENT RESERVED ON 26.10.2010 JUDGEMENT PRONOUNCED ON 22.12.2010. ORDER (Per U.D. Salvi, J.) Heard. Taken up for final hearing by mutual consent. 2. Circulars/letters dated 23rd June 2008 and 4th March, 2009 issued by Respondent No. 1 – Deputy Collector and Competent Authority, Thane Urban Agglomeration, Thane, virtually prohibiting the registration of conveyances/agreements in respect of flats constructed under the scheme sanctioned under Sections 20 and 21 of the Urban Land (Ceiling and Regulation) Act, 1976 and sold by the builder developers without obtaining the extension of period for completion of the scheme and/or obtaining no objection certificate from the Respondent No. 1 authority, are under challenge in this petition. 3 3. According to the Petitioners, they had/have carried out developmental activities on diverse plots of lands situated in Mira- Bhayander area falling within the limits of Respondent No. 3 Municipal Corporation pursuant to the scheme sanctioned and exemption granted as per Sections 20 and 21 of the Urban Land (Ceiling and Regulation) Act, 1976, hereinafter referred to as ‘the ULC Act’; and the said circulars issued by the Respondent No. 1 authority after the repeal of the said ULC Act by virtue of Urban Land (Ceiling and Regulation) Repeal Act, 1999. impede or tend to impede the process of registration of the transaction in respect of the flats in the said scheme without any authority of law. 4. Circular dated 23rd March 2008 at Exhibit A to the petition reveals that the Respondent No. 1 Competent Authority has advised the Sub-Registrar of Assurances (Rural, Thane) to ascertain whether the scheme involving the flats to be sold or purchased was completed within time or if not whether the extension of time for completion of the said scheme was duly obtained or not before the documents in respect of the said transaction s are registered. The said circular further discloses that the said verification has become necessary to help collection of revenue in 4 public treasury as a result of the developers making efforts to get extension of time limit prescribed for completion of the said schemes. 5. Circular dated 4th March, 2009, Exhibit B, is a step ahead than the circular dated 23rd June 2008 and it not only gives an advice to the authorities concerned with the registration of the documents but also directs the authorities not to register the documents concerning the transaction s of sale/purchase of the flats from the schemes sanctioned under Sections 20 and 21 of the ULC Act if the Competent Authority had not issued no objection certificate concerning the scheme or the time prescribed for completion of the said scheme was not extended. The said circular is in continuation of the earlier circular dated 23rd June, 2008 and draws the attention of the registering authorities to the obligations of the developer builder in respect of the schemes sanctioned under Sections 20 and 21 of the ULC Act such as : i) To keep in the scheme of development the flats admeasuring 25, 40, 60 and 80 sq. meters including core house, public utilities and one room flats and to get the plans for construction sanctioned accordingly from the local authorities 5 namely, Mira-Bhayendar Municipal Corporation and Thane Municipal Corporation. ii) To identify the flats of the dimentions of 25, 40, 60 and 80 sq. mtrs., on certain floors of the building to be constructed and to execute a notorized affidavit/indemnity bond with reference to the terms and conditions prescribed by the Government for grant of the sanction to the scheme. Iii) To surrender the specifically identified flats and to effect and register the transactions in respect of such flats in favour of government allottees as per the bond executed. 6. Circular dated 4th March, 2009 further reveals that no objection certificate issued by the Competent Authority was to be issued with reference to the compliance of the terms and conditions stipulated by the Government for sanction of the scheme of development under sections 20 and 21 of ULC Act. 7. The Respondent-State resisted the petition with the affidavit in 6 reply dated 12th July, 2010 of Mr. Bhau Patil, Additional Collector and Competent Authority, Thane Urban Agglomeration, Thane. The State defended the action of issuing the said circulars on the ground that the circulars were issued for meaningful implementation of the sanctions granted under Sections 20 and 21 of the ULC Act as validity of the sanction orders remained saved from the rigour of the Urban Land (Ceiling and Regulation) Repeal Act, 1999. 8. A glance at Section 3 of the ULC Repeal Act, 1999 which reads as under confirms the fact of immunity granted to the validity of any order granting exemption under sub section of Section 20 of the ULC Act or any action taken thereunder despite the repeal of the ULC Act. 3. Saving.—(1) The repeal of the principal Act shall not affect— (a) the vesting of any vacant land under sub-section (3) of Section 10, possession of which has been taken over the State Government or any person duly authorised by the State Government in this 7 behalf or by the competent authority; (b) the validity of any order granting exemption under sub-section (1) of Section 20 or any action taken thereunder, notwithstanding any judgment of any court to the contrary; (c) any payment made to the State Government as a condition for granting exemption under sub-section (1) of Section 20. (2) Where— (a) any land in deemed to have vested in the State Government under sub-section (3) of Section 10 of the principal Act but possession of which has not been taken over by the State Government or any person duly authorised by the State Government in this behalf or by the competent authority; and 8 (b) any amount has been paid by the State Government with respect to such land then, such land shall not be restored unless the amount paid, if any, has been refunded to the State Government. 9. The Respondent-State further elaborately revealed through its reply dated 12th July, 2010 the status of the sanctioned scheme of development undertaken by the petitioners developers by virtue of the provisions of Section 20 (1) a of the ULC Act. According to the respondent-State, the petitioner has yet to discharge his obligations under the said thirty seven sanctioned schemes, in as much as he has yet to hand over 328 tenements admeasuring 12714.29 square meters to the Government as per the terms and conditions stipulated in the orders sanctioning the Schemes and corrigendums issued from time to time thereto; and has yet to pay total extension penalty amounting to Rs.6,96,57,054/- to the Government as per the Government Circular dated 23.11.2007. The respondent- state submitted that the petitioner having availed the benefit of the Scheme under Section 20 of the ULC Act, now cannot turn around and avoid performance of their obligations under the said schemes. 10. Besides these submissions, the affidavit in reply referred to the 9 judgments of the Division Bench of this Court delivered in Writ Petition No. 2420 of 2009 – Devram Dattaram Patil & Ors. Vs. State of Maharashtra & Ors., and Writ Petition No. 5745 of 2009 Mira-Bhayendar Builder Developer Welfare Association vs. Deputy Collector and Competent Authority, Thane Urban Agglomeration on 27th August, 2009 in support of the premise that the circular dated 23 rd June, 2008 having been issued to protect the public interest and government revenue was not open to challenge from the party who had taken advantage of the scheme sanctioned under Section 20 of the ULC Act and it was not open for such party to further contend that their obligations under the said Scheme no more survived. Significantly, it was pointed out that the SLP (civil) No. 30525/2009 preferred before the Hon’ble Supreme Court of India against the judgment and order dated 27th August, 2009 in Writ Petition No. 2420 of 2009 was dismissed on 30th August, 2010. The learned Government Pleader in addition to these submissions made through the affidavit in reply argued that there was no cause of action available for the petitioner to challenge the said circular. 11. These submissions and counter submissions pose a pertinent question as to the competency of the Additional District Collector and Competent Authority, Thane Agglomeration, Thane to issue the said circulars as well as the legality of the said circulars vis-a-vis the statutory 10 provisions governing the registration of documents. At the outset, it can very will be observed that the submissions of the learned Government Pleader as regards the cause of action for the petitioner are without any substance as the Additional Collector and the Competent Authority, Thane Agglomeration, Thane has not only issued the circular dated 23rd June, 2008 but proceeded to mandate the registration authorities at Thane to refuse the registration of the documents in absence of no objection certificate issued by its office vide circular dated 4th March, 2010. 12. The circulars dated 23rd June, 2008 and 4th March 2009 do not disclose the source of the power under which the Additional Collector and the Competent Authority, Thane Agglomeration, Thane, had issued them. Registration of the documents, as can be seen from the observations made by the Hon’ble Apex Court in Vasant Nahata’s case (AIR 2005 S.C. 340) State of Rajasthan vs. Vasant Nahata), is governed by the provisions of the Registration Act, 1908 and the whole aim of the said Act is to govern documents and not the transactions embodied therein and by virtue of such registration only the notice of the public is drawn. Sections 34 and 35 of the Registration Act mainly govern the process of registration of the documents before the registering officer. Under Section 34, the registering 11 officer embarks upon an inquiry for the purpose of ascertaining:- (a) whether or not the document presented for registration was executed by the person by whom it purports to have been executed. (b) Identity of the persons appearing before him and alleging that they have executed the document. (c) The right of the person appearing as representative, assign or agent of the executor. Sub-Section (1) of Section 35 of the said Act makes it obligatory upon the registering authority to register the documents presented as provided in Sections 51 to 61 inclusive if (a) All the persons executing the document appear before the registering authority and are personally known to him; or if he be otherwise satisfied that they are the persons they represent themselves to be, and if they all admit the 12 execution of the document, or (b) any person appearing by representative , assign or agent admits the execution, or (c) the person executing the document is dead, and his representative or assign appears before the registering officer and admits the execution. Sub-section (2) of Section 35 of the Registration Act empowers the registering officer to examine any one of the persons present in his office in order to satisfy himself that the persons appearing before him are the person they represent themselves to be, or for any other purpose contemplated by the said Act. Sub-section (3) of Section 35 of the Registration Act spells out three contingencies when the registering officer is required by law to refuse the registration of the document. (a) any person by whom the document purports to be executed denies its execution, or (b) any such person appears to the registering officer to be a 13 minor, an idiot or a lunatic, or (c) any person by whom the document purports to be executed is dead, and his representative or assign denies its execution. 13. Thus, it can be seen from the conjoint reading of Sections 34 and 35 of the Registration Act that the power of the registering officer is circumscribed by the said provisions, and as such any executive instructions as given through the circulars cannot circumvent or override the statutory provisions clearly spelt out through the Registration Act, 1908. The Hon’ble Supreme Court in Samsundaram Vishwanath’s case (AIR 1988 SC 2255 Union of India and others vs. Shri Samsundaram Vishwanath and others), endorsed this view with following observations:- “If there is a conflict between the executive instructions and the rules made under the proviso to Article 309, the rules made under the proviso to Article 309 prevail, and if there is a conflict between the rules made under the proviso to Article 309 of the Constitution of India and the law made by the appropriate Legislature, the law made 14 by the appropriate Legislature prevails.” 14. A quick survey of the Registration Act, 1908 reveals the provisions therein enabling a party aggrieved as a result of refusal to register the documents to resort to a remedy of appeal to Registrar from orders of Sub-Registrar refusing to register a document on the ground other than denial of execution. In case of a Sub-Registrar’s refusal to register on the ground of denial of execution, the aggrieved party can approach the Registrar with an application as provided under Section 73 of the said Act. Further remedy by way of suit in case of refusal by the Registrar to order the registration of the documents is contemplated under Section 77 of the said Act. It can also be seen that the powers of Superintendence and control over Sub-Registrar and generally over the registration offices vest in Registrar and Inspector General of Registration under Sections 68 and 69 of the Registration Act respectively. Nowhere it has been pointed out that either the Collector or the Competent Authority under U.L.C. Act. figure in the scheme of the Registration Act, 1908 as the authorities weilding any appellate, supervisory and revisional powers over the Registering Officer under the said Act. 15 15. This prompts an answer in favour of a premise that the Additional District Collector, Thane and Competent Authority was not competent to issue the said Circular, and as such the efficacy of the said Circular commanding the Registering Officer to refuse the registration of the documents referred to therein remains questionable. A view congenial to the said premise is found expressed in some of the judgments- Sunderson & Ors Vs. State of Maharashtra & Ors. 2008(5) Bombay Cases Reporter 85, Damodar Laxman Navre & 4 others Vs. State of Maharashtra & 4 others Writ Petition No. 6300 of 2009, delivered previously by the Division Bench of this Court. However, there is a conflicting view expressed in the judgments delivered by the Division Bench of this Court in Writ Petition No.5745 of 2009 Mira Bhayander Builders & Developers Welfare Association Vs. Dy. Collector & Competent Authority, Thane and 3 others. The Circular dated 23.6.2008 was the epicentre of controversy in Mira Bhayander Builders & Developers Welfare Association (Supra). The State contended as in the present case that the scheme holders were trying to wriggle out of their obligations under the scheme sanctioned under Section 20 of U.L.C. Act, and therefore, the said Circular came to be issued to protect the schemes meant for economically weaker sections, and also the government ---. The Division Bench after considering the rival contentions observed thus:- “ In our view, if the members of the petitioners’ 16 association have taken benefit of the schemes under Section 20 of the said Act by constructing buildings, they now cannot wiggle out of their obligations to surrender flats to the government which the government could sell at fixed rate. The entire tenor of the above petitioners appears to be that the petitioners do not want to fulfil their obligations under the said Schemes viz. surrendering the flats to the State Government and taking advantage of the repeal of the said Act want to contend that their obligations under the said schemes do not survive. In our view the impugned letter as rightly contended by the learned AGP has been issued to protect the public interest and government revenue. It does not befit the Petitioners who have taken advantage of the said scheme now contend that their obligations do not survive, and therefore, there is no need for them to surrender flats to the government. We, therefore, do not find any merit in the challenge raised in the above petition which is accordingly dismissed.” 16. In the instant case similar situation is portrayed in the affidavit in 17 reply filed by the State. Referring to the Mohan Gopal Mate case (Supra) reported in 2008(6) ALL MR 41, the learned Advocate for the Petitioner submitted that a pertinent question regarding the extent of power of the State under Sections 20 and 21 of U.L.C. Act in the case of breach of conditions of the scheme by the scheme holder has been clearly answered as follows: “Powers of the State under Section 20 in case of breach of condition of the order of exemption is limited to withdraw exemption order only and so far as Section 21 is concerned, declare the land which is not to be treated as excess land in view of the Sub-Section (1) in case of breach of condition State can declare such land to be excess in view of Sub-Section (2) of Section 21. Thereupon, the provisions of Chapter III will apply to the said land.” 17. Going by strict interpretation of the Sections 20 and 21 of the ULC Act, the power of the State in case of contravention of any of the conditions of the scheme by scheme holder remains limited to withdrawal of the exemption and declaring the exempted land as excess land and to application of the provisions of the Chapter III of the said Act for acquisition of the said land as 18 contemplated under Sub-Section (2) of Section 21 therein. 18. This view is in conflict with the view expressed by the Division Bench in Mira Bhayander Builders & Developers Welfare Association (Supra), and as such the controversy raised by such conflict deserves to be resolved by the Full Bench of this Court. 19. This Petition is, therefore, referred to the Hon’ble the Chief Justice for passing appropriate directions in the matter. 20. Registrar (Judicial) to take steps accordingly. (U.D. SALVI, J.) (B. H. MARLAPALLE, J.)