pvr 1 wp632-94 IN THE HIGH COURT JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.632 OF 1994 1.Shri.Vinayaka Ice Creams (Pvt.) Ltd. & Ors. ...Petitioners vs. 1.The State of Maharashtra & Ors. ...Respondents --- Dr.Milind Sathe, Sr.Advocate i/b. M/s.Purnanand & Co., for Petitioners. Mr.A.B.Ketkar, AGP for Respondent nos.1 to 3. Mr.Vishal Kanade i/b. M/s.Shiralkar & Co., for Respondent nos.5A to 5C. Mr.Naushad Engineer i/b. M/s.Zohari & Co., for Respondent no.6. --- CORAM: D.K.DESHMUKH & R.Y.GANOO,JJ. DATED: 9th December, 2010 pvr 2 wp632-94 P.C.: 1. By this petition, the petitioner no.1 which is a partnership firm challenges the notice issued by the Collector-Respondent no.2 dated 19.1.1994 asking the Petitioner no.1 to pay 75% of the unearned income in relation to transfer for the year 1980 with interest on the amount from 8.4.1987 to December,1993, again 75% of the unearned income relating to transfer for the year 1990 with interest on that amount for the period from 27.3.1992 till December,1993. The facts that are relevant are that by an indenture of lease dated 20.2.1968 between the Governor of Maharashtra and M/s.Vidyut Cable & Rubber Industries which was a partnership firm, land admeasuring 2402 square yards in Municipal Ward R was leased out to the partnership firm for a period of 30 years. 2. It appears that the original lessee M/s.Vidyut Cable and Rubber Industries Ltd. had borrowed funds from State Bank of India by pvr 3 wp632-94 mortgaging their rights in the above referred property in favour of the Bank. A default was committed by the mortgagee in repayment of the loan, therefore, Suit no.1368 of 1988 was filed in this Court for enforcement of equitable mortgage. In the year 1989, the Receiver of this Court was appointed as Receiver of the property and the Receiver thereafter took steps to sell the property by public auction. The Petitioners turned out to be the highest bidder for the property. The bid of the Petitioners was accepted and sale of the property in favour of the Petitioners was confirmed by this Court. On 28.2.1991 the Court Receiver executed Deed of Assignment in favour of the Petitioners. It is at this juncture that the notice which we have referred to above was issued. The Petitioners have, therefore, approached this Court challenging that notice. The unearned income admittedly is being claimed by the Respondent no. 2 pursuant to Clause X of the lease deed. Clause X reads thus:- pvr 4 wp632-94 X.The Lessee shall not at any time, assign underlet the said plot or any part thereof or otherwise transfer his rights or interest under this lease to anybody without the previous consent in writing of the Collector and it shall be open to the Collector while granting such consent to impose a condition requiring the Lessee to pay to the Government half the unearned increment in the event of any assignment under-letting or transfer as above whether outright or as a result of an unredeemed mortgage, and every such assignee, under-lessee or transferor shall use the said plot only for the purpose for which it has been let out under the terms thereof. The submission of the Petitioners is that according to Clause X only half the unearned increment can be claimed and not 75% as has been done by the notice. The second contention is that according to clause X, the unearned income can be claimed by Respondent nos.1 and 2 from the Lessee and not the assignee in whose favour the pvr 5 wp632-94 assignment of lease is made. The third submission is that the unearned income in relation to the year 1980 has been claimed wrongly as in the year 1980 there is no assignment of lease. 3. So far as the first submission is concerned, we have heard the learned Counsel appearing for Respondent nos.1 and 2. It is clear that there is no other power to claim unearned income except Clause X of the lease deed which permits only half the unearned increment to be claimed in the event of any assignment, under- letting or transfer of the right of lease. Therefore, obviously 75% of the unearned income is wrongly claimed, therefore, to that extent the notice will have to be modified. 4. So far as the second submission is concerned, the learned Counsel appearing for the partners of the original lessee have admitted that the liability to pay the unearned income is that of lessee, and therefore, from the amount pvr 6 wp632-94 that is in deposit with the Court Receiver which is sale proceeds of the suit property, the unearned income as per clause X of the lease deed can be claimed by Respondent no.2 from the Court Receiver. 5. So far as the third contention is concerned, the Respondent no.2 has not been able to show that there was any transfer or assignment of lease in the year 1980 and therefore, obviously the unearned income claimed by notice dated 19.1.1994 in relation to the year 1980 is obviously wrong and could not have been claimed and similarly any interest in relation to that amount also could not have been claimed. A contention is raised on behalf of the partners of the original lessee firm that though they are willing to pay unearned income as per clause X but the demand of interest on the unearned income in relation to the assignment of the lease in favour of the Petitioners cannot be claimed. It is submitted that in the notice dated 19.1.1994 pvr 7 wp632-94 interest is claimed on the amount of unearned income from 27.3.1992 because according to Respondent no.2 on that date a letter was addressed to the Petitioners demanding unearned income. The submission is that by letter dated 27.3.1992 the petitioners were informed about their liability to pay unearned income as per Clause X and therefore, the Respondent no.2 does not become entitled to levy any interest on the amount from that date from the partnership firm from the date on which the demand is made on the petitioners. We find considerable substance in this submission. Taking overall view of the matter therefore, in our opinion, the following order would meet the ends of justice:- The Notice dated 19.1.1994 impugned in the petition is set aside. However, Respondent no.2 shall be free to demand unearned income as per clause X of the lease deed in relation to the assignment of the lease in favour of the Petitioners from the partners of the original pvr 8 wp632-94 lessee and in that regard he can raise demand with the Court Receiver who is holding funds of the erstwhile partnership firm. If such a demand is made, the Receiver shall transfer the amount to Respondent no.2. It is also clarified that the Respondent no.2 shall not be entitled to claim any interest on the amount of unearned increment that he will claim from the Receiver with effect from 27.3.1992 as has been done by notice dated 19.1.1994. Rule is made absolute accordingly. No order as to costs. As a consequence, the Prothonotary & Sr.Master of this Court shall permit the Petitioners to withdraw the amount with accruals, if any, which has been deposited by the Petitioners pursuant to the interim order made in this petition. (D.K.DESHMUKH,J.) (R.Y.GANOO,J.)