1 MSS IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY IN THE HIGH COURT OF JUDICATURE AT BOMBAY APPELLATE SIDE APPELLATE SIDE APPELLATE SIDE WRIT PETITION NO. 2856 OF 2005 M/s. NATIONAL DYES & ORS. .. PETITIONERS VS. THE STATE OF MAHARASHTRA & ORS... RESPONDENTS Mr. S.G. Karandikar for petitioners Mrs. M. P. Thakur, AGP CORAM: SMT. RANJANA DESAI & SMT. R.S. DALVI, JJ. DATE: 11-1-2008 P.C. . Petitioner 1 is the owner of land bearing Survey No. 283-A of village Dhokali, Taluka and District Thane. Petitioner 1 is a partnership firm and petitioner 2 is its partner. 2. The case of the petitioners is that Land Survey No. 283A and 283B from village Dhokali, Taluka and District Thane admeasuring 85300 sq. mtrs. was allotted in favour of petitioner No. 1 by order dated 19th March, 1957 on alienable and impartible tenure. Condition 4 of the original order reads as 2 under: . "4. that Government will be entitled to half the unearned increment in the event of sale or transfer whether outright or as a result of an unredeemed mortgage, and that the land so sold or transferred should be used for a purpose approved by Government if it is to be used for a purpose other than the approved industrial purpose." 3. According to the petitioners upon representation made by them, Government modified its order dated 3/12/98. However, condition No. 4 remained the same. As per condition No. 4 at the time of any transfer or at the time of change of user from industrial to any other user the Government was entitled to 50% of unearned income. This grant was issued under the provisions of Bombay Land Revenue Code 1872. 4. According to the petitioners subsequently acting under the provisions of Maharashtra Regional Town Planning Act, (M.R.T.P. Act" for short) the Government changed the zone and the petitioners’ land was included in the residential zone by 3 removing it from industrial zone. The petitioners then applied to the Collector, Thane for converting the user of the said land into residential user as permissible under the provisions of M.R.T.P. Act. This application was not made under Section 44 of the Maharashtra Land Revenue Code 1996. Respondent 2 i.e. Collector, Thane issued a letter dated 5/2/90 in favour of petitioner 2 that petitioners’ request was granted and the petitioners should pay 50% of unearned income as per the original grant. This letter further stated that temporary ad-hoc valuation of the said land was Rs.10,71,576-80 and hence petitioner 1 should deposit 50% of the said amount by way of interim ad-hoc payment. In this letter it was further stated that the 2nd respondent would get the final valuation approved from the Assistant Director Town Planning, Thane and in case the final valuation was more than the interim ad-hoc valuation, the petitioners would be liable to pay the difference. The said letter also contained a clause that interest @ 8% should be paid till such amount of difference, if any, is actually paid by the petitioners. 5. It is the case of the petitioners that they immediately paid the said amount of Rs.5,35,789/- 4 in the Treasury on 5/2/90. A receipt to that effect is annexed to the petition at Exh.-D. According to the petitioners though representative of the petitioners attended the office of the 2nd respondent and requested the 2nd respondent to expedite the proceeding relating to final valuation of the said land, there was no response from the 2nd respondent. The matter was kept pending for several years. 6. By their letter dated 5/2/05, the petitioners’ brought this fact to the notice of the 2nd respondent and the 2nd respondent was requested to issue final demand letter. The petitioners showed their willingness to make the entire payment immediately. Another letter was also written by the petitioners dated 28/2/05 again reiterating the same request. 7. It is the case of the petitioners that when they submitted letter dated 28/2/05, xerox copy of the letter dated 25/2/05 was given to them by the 2nd respondent. It was a notice in respect of demand of Rs.1,28,95,766/-. The details of amount payable as statedin the said letter are as under: 5 1. Area of the land 85300.00 sq. mtrs. 2. Rate of Valuation Rs.150/- sq. mtr. x 85300 . Total amount Rs.1,27,95,000.00 3. 50% Amount Rs. 63,97,500.00 4. Amount deposited previously Rs. 5,35,789.00 5. Remaining amount Rs. 58,61,711.00 6. Interest to be charged at the rate of 8% i.e. Rs.4,68,937/- per year Amount of interest for 15 years from the year 1991 to 2005 Rs. 70,34,055.00 Total amount of Additional (above Per) Value to be paid to government. Rs.1,28,95,766.00 8. Learned Counsel for the petitioners submits that the demand of interest is arbitrary and exorbitant. He submitted that the petitioners had immediately paid amount of Rs.5,235,789/- as far back as on 5/2/90 being the 50% amount of the ad-hoc valuation. The petitioners had all along shown willingness to pay the dues as per the grant. In fact after the filing of the petition, the petitioners have paid an amount of Rs.58,61,711/-. 6 He submitted that it was obligatory on 2nd respondent to do the final valuation of the land at the earliest. The matter was unnecessarily kept pending in the second respondent’s office for about 14 years. It is improper, therefore, for the 2nd respondent to make such an unreasonable demand of interest. Learned counsel contended that the petitioners are challenging the impugned notice only to the extent it directs payment of interest at 8% per annum. 9. Learned counsel for the petitioners submitted that the petitioners have addressed a representation dated 5/2/05, to the 2nd respondent but the 2nd respondent has not even cared to reply to the same. Learned counsel further submitted that even on 18/3/05 another representation has been addressed by the petitioners. The 2nd respondent has not bothered to reply to that also. 10. On 8/7/05 Rule has been issued on this petition and interim relief is granted in terms of prayer clause (d). The respondents are therefore, restrained from enforcing the demand of interest as raised by them in their letter dated 25/2/05. 7 11. We have perused the affidavit-in-reply filed by the 2nd respondent. Prima facie, we are of the opinion, there is some substance in the petitioners’ contention. The 2nd respondent ought to have done the final valuation at the earliest. The matter was kept pending for 14 years. Obviously the value of the land has risen. Now increased value of land is taken into consideration and interest has been charged thereon. If the valuation had been done at the earliest the petitioners would not have been burdened with such a huge interest liability. Least the 2nd respondent could have done was to consider the representation of the petitioners and address a letter to the petitioners stating whether their grievance is acceptable to the 2nd respondent or not. 12. We must note that learned counsel for the petitioners has expressed willingness to pay interest calculated from 30/3/05 i.e. the date on which final valuation was done by respondent 3, @ 8% till the date of actual payment. 13. In the circumstances, we direct the 2nd respondent to consider the pending representation 8 of the petitioners after giving hearing to the petitioners or their counsel. The 2nd respondent should pass order thereon independently and in accordance with law. The representation be considered within a period of eight weeks from the date of receipt of this order by the 2nd respondent. The order passed on the representation be communicated to the petitioners. If the order is against the petitioners then it shall not be executed for a period of six weeks from the date of communication thereof to the petitioners. Obviously it will not be open to the petitioners to raise any other challenge except the challenge to the interest because the petitioners have confined their petition to that challenge. We record the statement made by learned counsel for the petitioners that the challenge will be restricted only to the interest charged. 14. We make it clear that opinion, expressed by us in this order is our prima facie opinion. We reiterate that the 2nd respondent shall consider the representation of the petitioners independently and in accordance with law. 15. Petition is disposed. 9 JUDGE JUDGE