--- 1 --- HIGH COURT OF MADHYA PRADESH : BENCH AT INDORE S.B.: HON'BLE MR. S. C. SHARMA, J WRIT PETITION NO. 1798 / 2011 PARSVNATH DEVELOPERS LTD., AND ANOTHER Vs. STATE OF M.P. AND ANOTHER * * * * * O R D E R ( _____/12/2011) The petitioner No.1 is a Company registered under the Companies Act, 1956 has filed this present petition through its Chief Operating Officer who has been authorised by resolution dt. 14/3/06 to file this present petition. The contention of the petitioner is that M/s. IISCO Ujjain Pipe & Foundary Company Ltd., was owner of 205 Bighas of land in Ujjain and the Company was having an industrial unit over the aforesaid land. The aforesaid company came under liquidation and by virtue of orders passed by the Calcutta High Court, the assets of the Company including the land was sold. The petitioner Company has further submitted that the Official Liquidator --- 2 --- sold the entire unit along with movable and immovable assets to one M/s. Ajar Enterprises Pvt. Ltd., and finally a sale deed was executed in respect of the land admeasuring 41.342 hectares in favour of M/s. Ajar Enterprises Pvt. Ltd. The land was mutated in the name of M/s. Ajar Enterprises and M/s. Ajar Enterprises with an intention to develop a residential colony submitted an application to the Department of Town & Country Planning for grant of permission to develop 25 acres of land, out of total 102.35 acres. The Town & Country Planning Department vide order dt. 23/7/05 has granted sanction to M/s. Ajar Enterprises to develop the land. Thereafter an application was submitted to the Municipal Corporation, Ujjain and a permission was granted to develop a colony by Municipal Corporation, Ujjain on 30/9/05. The present petitioner No.1 Company purchased the entire land admeasuring 41.312 hectares from M/s. Ajar Enterprises vide registered sale deed dt. 10/4/06. The contention of the petitioner is that the predecessor in title M/s. IISCO Ujjain Pipe & Foundary Company Ltd., got the land diverted on 9/5/98 for industrial (commercial --- 3 --- purpose) and diversion tax was assessed vide order dt. 9/5/88. Again in the year 1991, the Sub Divisional Officer (Revenue) by an order dt. 12/6/91 reassessed the diversion charges and directed the Company to pay dues at commercial rates as the entire land was being used for industrial purposes. The order passed by the Sub Divisional Officer, dt.12/6/91 was challenged before the Addl. Collector and the Addl. Collector by an order dt. 23/10/91 set aside the order passed by the Sub Divisional Officer and held that the land revenue should be charged on the basis of actual use, meaning thereby, the order of the Sub Divisional Officer, by which land revenue was being charged treating the entire land as commercial land was set aside. The Joint Director, Town & Country Planning Department also vide letter dt. 21/9/95 clarified that the land in question was used for industrial purposes and residential purposes. It has been further stated that the land was reassessed for payment of land revenue by an order dt. 29/5/06 and a premium of Rs.51015/- was assessed and the yearly land revenue assessed as Rs.53993/-. A demand was raised by the --- 4 --- respondents directing the petitioner no.1 Company to pay a sum of Rs.963902/- and the same was deposited on 17/4/07. The petitioner Company has further stated that under the Development Plan 2011, notified on 15/6/2006 by the Town & Country Planning Department, the entire land use was notified as residential. The petitioner No.1 has further stated that an application was submitted by the petitioner Company under the Rules for Registration of Coloniser Nagar Nigam, 1998 and the petitioner Company was registered as Coloniser on 24/6/2006. The petitioner Company submitted an application to the Joint Director, Town & Country Planning Department, Ujjain to sanction the layout for development of a colony in two parts and the Town & Country Planning Department sanctioned the lay out plans vide order dt. 7/7/06 and order dt. 24/8/06 in respect of 31.742 hectares and 7.642 hectares respectively. Petitioner has further stated that after receiving permission from the Town & Country Planning Department to develop colonies, the petitioner Company applied for development permission to the Municipal Corporation, Ujjain and at the same time, --- 5 --- the petitioner Company was informed by the Sub Divisional Officer (Revenue), Ujjain to deposit an amount of Rs.3.00 lacs under the Revenue Head 8443. The amount was deposited on 29/8/06 along with an approved layout plan as approved by the Town & Country Planning Department. The petitioner Company also submitted No Objection Certificate obtained from the Competent Authority, Urban Land Ceiling, from Nazul Officer and the Municipal Corporation, Ujjain, after receiving NOCs from various Departments directed the petitioner Company to deposit a sum of Rs.2.04 crores. The petitioner Company deposited a sum of Rs.2.04 crores with the Municipal Corporation, Ujjain towards shelter fee, external development charges and supervision charges. The petitioner Company thereafter applied for mutation before the Municipal Corporation, Ujjain and the Municipal Corporation, Ujjain after charging property tax to the tune of Rs.1208746/- for the year 2006 – 2007 and Rs.1347743/- for the year 2007 – 2008, mutated the petitioner No.1 Company as owner of the land in question --- 6 --- vide order dt. 21-5-2007 / 3-3-2008. A certificate was also issued by the Municipal Corporation, Ujjain on 6/12/2006 certifying that the land of the petitioner No.1 Company is a diverted land. The petitioner Company was finally granted permission by the Municipal Corporation, Ujjain to develop a colony vide order dt. 1/2/07 and order dt. 12/7/07 and the petitioner Company after receiving permission announced its residential project consisting of 1083 residential plots. The petitioner Company has already booked about 650 plots for sale. The respondent No.2 Sub Divisional Officer (Revenue) issued a notice on 12/10/2007 demanding diversion security deposit under Rule 4(3) of the MP Diversion Rules and the petitioner Company submitted a reply on 18/1/08 informing the Sub Divisional Officer that they have already deposited a sum of Rs.3.00 lacs as diversion security charges on 29/8/06 and a sum of Rs.9639021/- as diversion dues vide receipt dt. 17/4/07. The petitioner Company successfully completed the development work in respect of 7.642 hectares of land and a completion certificate was also issued by the Municipal --- 7 --- Corporation, Ujjain. In respect of the remaining part, the petitioner Company has incurred an expenditure to the tune of Rs.10.00 crores and the work is under completion. The petitioner Company further contended that a Press-Note was released by the Commissioner (Revenue) Ujjain on 17/11/2010 and 18/11/2010 wherein it was notified that the petitioner No.1 was developing a colony and the land is not diverted in the name of the petitioner Company. The petitioner Company after enquiring the matter from the Revenue Authoroties submitted a representation on 4/12/10 to the Divisional Commissioner (Revenue) and informed about the permissions granted by the Department of Town & Country Planning as well as Municipal Corporation, Ujjain and to the utter surprise of the petitioner Company, an order was received by them on 2/2/11 passed under Section 172 of the MP Land Revenue Code stating that the petitioner Company is developing a residential colony without getting the land diverted in the name of the petitioner Company. The petitioner Company left with no other choice came up before this Court by filing a writ petition and after filing the --- 8 --- present writ petition, notices were issued by this Court and the respondents were directed not to take any coercive steps against the petitioner Company. The contention of the petitioner is that the respondent No.2 without hearing the petitioner Company passed an ex-parte order on 23/2/11 directing the petitioner Company to remove the development work carried out by the petitioner in one month and a penalty was also imposed to the tune of Rs.2,000/-. The Petitioner Company has further stated that the Show Cause Notice dt. 2/2/11 and the order passed by the respondents dt. 23/2/11 deserves to be quashed as void ab initio. A reply has been filed on behalf of the respondent State and it has been stated that the present writ petition is not maintainable as the orders have been passed under the MP Land Revenue Code and there is a remedy of appeal and revision available to the petitioner. The respondents have further stated that they have initiated suitable action u/S. 172 of the MP Land Revenue Code and after suitable action and enquiry in the matter and after following the principles of --- 9 --- natural justice & fair play, the Sub Divisional Officer, directed the petitioner Company to show cause in the matter and thereafter a final order has been passed. Respondents have further stated that the petitioner Company has straightway rushed to this court. The respondents have further stated that they are unaware of the history of the case specially in respect of the facts as to how the petitioner Company came in possession of the land. The respondents have also stated that there is no direct connection with the petitioner with reference to diversion order dt. 29/5/06 passed in the matter of M/s. IISCO Ujjain Pipe & Foundary Company Ltd., The respondents have also stated that by order dt. 29/5/06, 3.15 hectares land of Nagjhiri was diverted for commercial purposes and remaining 23.787 hectares was diverted for residential purposes. It has been further stated that complete land measuring 14.400 hectares of Nimanwasa was diverted for commercial purposes but the petitioners are using the said land for a residential purposes alone. It has been further stated that order Annexure A/8 and A/9 were duly set aside by the appellate authority. The --- 10 --- respondents have also stated that they are filing complete text of Sec. 172 which deals with diversion of the land. The respondents have further stated with reference to Development Plan 2021 notified on 15/6/2006 that its notification is subject to interpretation as to its effect. The respondents have also in this paragraph categorically stated that the land use is residential as per the development plan. The respondents have further stated that mere registration as a coloniser does not mean that the petitioners have any legal right to develop a colony on the disputed land unless and until necessary formalities are completed, specially formalities prescribed u/S. 172 of the MP Land Revenue Code. The respondents have categorically stated that unless and until the land is diverted for residential purpose, no colony can be developed because different purposes carries different rate of rent, premium and other charges. In respect of the various permissions granted by the various authorities from time to time to develop the land and to establish a residential colony, the respondents have in their return in para 11, stated that they are unaware of the aforesaid facts. It --- 11 --- has been further stated that some of the Departments might have given No Objection Certificate but it does not mean that the petitioner Company is authorised to bye-pass the provisions of Sec. 172 of the MP Land Revenue Code. It has been further stated that grant of No Objection Certificate by the Town & Country Planning Department, permission to develop a colony by the Town & Country Planning Department, and permission by the Municipal Corporation Ujjain to develop a colony has got no meaning keeping in view the Section 172 of the MP Land Revenue Code and unless and until the provisions of Sec. 172 of the Code are complied with, the petitioner's cannot develop a colony. It has been further stated that the petitioners are not getting the land diverted only because they will have to pay huge amount to the Government by way of rent and premium and therefore the Show Cause Notice was rightly issued by the respondents. In paragraphs 12 and 13 of the return, the respondents have reiterated that unless and until the provisions as contained u/S. 172 are complied with, the petitioners cannot be permitted to develop a colony and the --- 12 --- petitioners in utter disregard and violation of law have committed breach of the provisions as contained u/S. 172 of the MP Land Revenue Code. It has been stated that the completion certificate issued by the Municipal Corporation, Ujjain is just an empty formality and it does not create any right in favour of the petitioners. The respondents have also stated that the petitioners should have deposited the security amount with the Government keeping in view Rule 4 (1) Expression 3 of the Development Rules and the same has not been done. The respondents have reiterated that there is a remedy of appeal available to the petitioner before the Collector and before the Commissioner under the MP Land Revenue Code. The respondents in paragraphs 16 to 19 have repeated the earlier averments made in the preceding paragraphs and it has been stated that M/s. IISCO Ujjain Pipe & Foundary Company Ltd., got the land diverted for industrial purposes and industries were set up and certain residential quarters were constructed. It has been stated that the Company has never applied for diversion for colony purposes and in case the petitioner Company wishes to --- 13 --- develop a colony, they have to apply to the competent authority u/S. 172 of the MP Land Revenue Code. The respondents in para 20, by way of additional pleadings have stated that after issuing a show cause notice, a final order has been passed by the competent authority dt. 23/2/11 and the same can be challenged before the Collector or Commissioner. It has been reiterated in subsequent paragraphs that a remedy is available to the petitioners u/Ss. 44 to 56 to file appeal and revision. The respondents have also, by way of special pleadings, brought to the notice of this Court rules regarding diversion of land for building purposes notified vide Notification dt. 3/5/63 and their contention is that the petition deserves to be dismissed and as the Government has been forced to defend the case for no good reason made out by the petitioner, the cost of litigation may be awarded to the respondents. A rejoinder has been filed on behalf of the petitioners and it has been reiterated that by the impugned order dt. 2/2/11 the petitioners have been directed to stop all development work on the project as diversion has not been --- 14 --- done in the name of the petitioner. The contention of the petitioners is that diversion is not done every time the land is sold to another person. In fact, diversion is done in respect of the land in question. The respondents have also filed additional reply keeping in view the rejoinder and it has been stated the M/s. IISCO Ujjain Pipe & Foundary Company Ltd., has never applied for diversion or for change of land use and as land use was changed, proceedings u/S. 59 of the Code were initiated and lateron as it was found that the land was being used by M/s. IISCO Ujjain Pipe & Foundary Company Ltd., for commercial purposes without obtaining any diversion order u/s. 172, and a penalty was also imposed. The land revenue and premium was also reassessed. Subsequently an order was pased on 29/5/06 by the Sub Divisional Officer, and it was found that the Unit was closed since 1995 and the Unit has changed the land use without any diversion and land was being used for commercial as well as residential purposes and therefore reassessment of land revenue was done. The respondents have admitted that they have --- 15 --- imposed a penalty and they have reassessed the premium in accordance with law. It has been reiterated that no application for diversion was submitted u/S. 172 at any point of time by the predecessor in title or by the petitioner and therefore the Show Cause Notice has rightly been issued by the respondents. The respondents have admitted in para 3 (ii) that as per the Master Plan, the land in question is reserved for residential area, however, they have clarified that prior to coming into force of Master Plan on 15/6/06, the land was not diverted for residential purposes. The respondents have prayed for dismissal of the writ petition. A sur – rejoinder has been filed to the additional reply and it has been reiterated that the impugned order is bad in law as in the impugned order it has been stated that the land has not been diverted in the name of the petitioner Company and because there is no requirement of diversion in case a sale takes place. The respondents have stated that the land was diverted while M/s. IISCO Ujjain Pipe & Foundary Company Ltd., was the owner of the land in question and the permission granted by the various authorities have been --- 16 --- granted with due application of mind and the impugned order deserves to be quashed. It has also been stated that the respondents have failed to demonstrate as to how rules made u/S. 172 of the Land Revenue Code regarding colonisation would apply to the land under the Municipal limits for which separate M.P. Nagar Palika Registration of Coloniser Terms & Conditions Rules, 1998 have been framed. The petitioners have prayed for quashing of the impugned order. Heard the learned counsel counsel for the parties at length and perused the record. The matter is being disposed of at motion hearing stage itself with the consent of the parties. In the present case, the petitioner No.1 is a Company registered under the Companies Act, 1956 and is owner of the land admeasuring 41.312 hectares. The land in question was sold by the Official Liquidator, Calcutta High Court, in favour of M/s. Ajar Enterprises Ltd., and M/s. Ajar Enterprises Ltd., vide registered sale deed dt. 10/4/06 has sold the land to the petitioner Company. In the present case, it has not been disputed by the State Government that the --- 17 --- land use as per the development plan – 2021 notified on 15/6/2006 is residential. M/s. IISCO Ujjain Pipe & Foundary Company Ltd., was the original owner of the land in question and got the land diverted on 9/5/98 for Industrial (Commercial purpose) and diversion tax was assessed vide order dt. 9/5/88. In the year 1991, the Sub Divisional Officer (Revenue) by an order dt. 12/6/91 reassessed the land revenue and directed the Company to pay the land revenue at commercial rates as the entire land was being used for industrial purpose. It is also pertinent to note that the order dt. 12/6/91 was challenged before the Addl. Collector and the Addl. Collector by an order dt. 23/10/91 set aside the order passed by the Sub Divisional Officer, and held that the land revenue should be charged on the basis of its actual use. Not only this, the Joint Director, Town & Country Planning Department, has also vide letter dt. 21/9/95 clarified that the land in question was used for industrial purposes and residential purposes as well. Land Revenue as also the premium was paid from time to time on the basis of actual use of the land which was either commercial or --- 18 --- residential. It is not a case where agricultural land was being used as commercial land or agricultural land was being used for residential purposes. It is pertinent to note that a demand was also raised by the respondents directing the petitioner Company to pay a sum of Rs.963902/- and the same was deposited on 17/4/07. The petitioner Company as it wanted to develop a colony, applied before the Municipal Corporation, Ujjain under the provisions of Rules for Registration of the Coloniser Nagar Nigam, 1998 and the Company was registered as Coloniser on 24/6/06. The Joint Director, Town & Country Planning Department, Ujjain has also granted permission to develop a colony in two parts and the layouts were sanctioned on 7/7/06 and 24/8/06 in respect of 31.742 hectares and 7.642 hectares respectively. The Municipal Corporation, Ujjain, keeping in view, the Rules for Registration of the Coloniser Nagar Nigam, 1998, granted development permission to the petitioner Company and the petitioner Company was also directed to deposit a sum of Rs.3.00 lacs by the Sub Divisional Officer, under the Revenue Head 8443. The --- 19 --- amount was deposited by the petitioner Company and the various agencies of the State Government including Competent Authority, Urban Land Ceiling, Nazul Officer, Ujjain, granted permission / No Objection to the petitioner to develop a colony. The petitioner was directed by the Municipal Corporation to deposit a sum of Rs.2.04 crores and the same was deposited by the petitioner Company towards shelter fee, external development charges and supervision charges. The name of the petitioner Company was also mutated by the Municipal Corporation, Ujjain after charging property tax to the tune of Rs.1208746/- for the year 2006 – 2007 and Rs.1347743/- for the year 2007 – 2008. A certificate was also issued by the Municipal Corporation, Ujjain on 6/12/06 certifying that the land belonging to the petitioner Company is a diverted land. The company was finally granted permission by the Corporation to develop a colony vide order dt. 1/2/07 and order dt. 12/7/07. The petitioner Company has already successfully completed development work in respect of 7.642 hectares of land and a completion certificate has also been issued by the --- 20 --- Municipal Corporation, Ujjain. In respect of the remaining work, the work is under completion. A Press-Note was released by the Commissioner Revenue, Ujjain on 17/11/10 informing that the petitioner No.1 was developing a colony and the land is not diverted in the name of the petitioner Company. A representation was submitted by the petitioner Company before the Divisional Commissioner Revenue and all permissions granted by the various authorities of the State Government were brought to the notice of the learned Commissioner. However, the impugned order has been passed on 23/2/11 u/S. 172 of the MP Land Revenue Code stating that the petitioner Company is developing a residential colony without getting the land diverted in the name of the petitioner Company. This Court has carefully gone through the impugned order passed u/S. 172(5) of the MP Land Revenue Code, 1959. The order passed by the Sub Divisional Officer, reflects that no diversion has taken place in the name of the petitioner Company. The order further reveals that the petitioner Company without getting the land diverted has committed breach of the provisions of Sec. 172 --- 21 --- of the MP Land Revenue Code and the Company has been directed to remove the entire development work within a period of 30 days. A penalty of Rs.100/- per day has also been inflicted upon the petitioner Company and it has also been observed that in case the development work is not removed, the State Government shall be removing the same at the cost of the petitioner Company. Sec. 172 of the MP Land Revenue Code reads as under: 172. Diversion of land. (1) If a Bhumiswami of land held for any purpose in- (i) urban area or within a radius of five miles from the outer limits of such area ; (ii) a village with a population of two thousand or above according to last census ; or (iii) in such other areas as the State Government may, by notification, specify ; wishes to divert his holding or any part thereof to any other purpose except agriculture, he shall apply for permission to the Sub Divisional Officer who may, subject to the provision of this section and to rules made under this code, refuse permission or grant it on such conditions as he may think fit : Provided that should the Sub --- 22 --- Divisional Officer, neglect or omit for three months after the receipt of an application under sub – section (1) to make and deliver to the applicant an order of permission or