Seth Nandram Daulat Ram Biyani v. State of Rajasthan
2005-01-06
PRAKASH TATIA
body2005
DigiLaw.ai
Judgment Prakash Tatia, J.-Heard learned Counsel for the parties. 2. Brief facts of the case are that an industrial plot was allotted to the petitioner firm on 28.09.1972 under the provisions of the Rajasthan Land Revenue (Industrial Areas Allotment) Rules, 1959 (for short the “Rules of 1959”). A lease-deed (Annex.1) was executed between the petitioner and the State. The petitioner established its industrial unit over the land allotted to it. 3. As per the terms and conditions of the lease, the petitioner was liable to pay the stipulated rent as per Sub-clause (i) of Clause (4) of the agreement. Sub-clause (ii) of Clause (4) of the agreement made it clear that the rent as provided under Sub-clause (i) shall be excluding all kinds of taxes which the Municipal Board, Panchayat or any other civil body has imposed or may impose during the period of lease in respect of the leased plot and this further provides that the lessee agrees to pay such taxes to the authorities concerned directly. As per Sub-clause (iii) of Clause (4) of the agreement, the lessee was liable to pay further sum of Rs. 1,200/-along with rent by way of development charges in accordance with the provisions of Rule 3(iii) of the Rajasthan Industrial Area Allotment Rules, 1959. Sub-clause (viii) of Clause (4) of the agreement provides about revision of annual rent. Sub-clause (x) of Clause (4) of the agreement empowers the lessor to terminate the lease and take possession of the lease property in case default is committed by the lessee. The other usual conditions of erection of the building and setting up of industry are also incorporated in the lease-deed. 4. In or about the year 1980, the plots which were allotted for industrial purpose were transferred to the respondent - Rajasthan State Industrial Development & Investment Corporation (for short “RIICO”) of the respective area. 5. It will be worthwhile to mention here that a company was incorporated having its name as Rajasthan State Industrial Development & Investment Corporation (RIICO) and as per the powers conferred by Article 39(xv) of the Articles of Association of the Company, the RIICO framed the Rules for disposal of the land which is vesting in the RIICO. These Rules are Rajasthan State Industrial Development & Investment Corporation Disposal of Land Rules, 1979 (for short the RIICO Rules).
These Rules are Rajasthan State Industrial Development & Investment Corporation Disposal of Land Rules, 1979 (for short the RIICO Rules). As per the said RIICO Rules, the Corporation started allotment of the lands to the industrial entrepreneur on the terms and conditions as laid down in the RIICO Rules. These RIICO Rules came into force with effect from 01.05.1979. The allottees of the land from the said Corporation are under an obligation to pay all the other charges and also service charges. Clauses for “Service Charges” reads as under:- “Service Charges” “(ii) The service charges, if any, imposed or may thereafter be imposed by the Corporation, shall be payable by the allottee in addition to rent, for every financial year in advance by the end of April each year.” Since the land in question was also transferred to the said Corporation, therefore, a Rule 12 was inserted in the Rules of 1959 from 212.1983, which reads as under:-“12. Allotment of land by Rajasthan State Industrial Development and Investment Corporation Ltd. or Rajasthan Tourism Development Corporation.-The Rajasthan State Industrial Development and Investment Corporation Ltd., Jaipur or Rajasthan Tourism Development Corporation shall be empowered to make allotment in accordance with the Rajasthan State Industrial Development and Investment Corporation disposal of Land Rules, 1979 or any other rules framed by the RIICO or RTDC for the purpose of vacant plants to entrepreneurs in the Industrial Areas notified by the State Government and transferred to the said Corporation. The Corporation shall also be authorised to execute lease-deeds, realise development charges, lease rent and other dues from the entrepreneurs to whom plots have already been allotted in accordance with the provisions of these rules, and to take any consequential or residuary action in regard to the plots allotted to the entrepreneurs. Provided that the Rajasthan State Industrial Development and Investment Corporation Ltd. or Rajasthan Tourism Development Corporation shall be empowered to grant written permission to the lessee for transfer of rights or interest in the land in respect of the plots/land located in Industrial Areas notified by the State Government and transferred to the said Corporation.
Provided that the Rajasthan State Industrial Development and Investment Corporation Ltd. or Rajasthan Tourism Development Corporation shall be empowered to grant written permission to the lessee for transfer of rights or interest in the land in respect of the plots/land located in Industrial Areas notified by the State Government and transferred to the said Corporation. Provided further that any permission granted or action taken for transfer of rights or interest in the plots/land by the Rajasthan State Industrial Development and Investment Corporation Ltd. or Rajasthan Tourism Development Corporation, after 13.07.1982 in respect of the plots/land situated in the Industrial Areas and transferred to the said Corporation shall be deemed to be valid under the first proviso to this rule.” Since as per the subsequent event, the RIICO stepped in the shoes of the State, therefore, the RIICO started dealing with the matter of recovery of the charges from the industrial units for which land was allotted to the lessees by the State under the Rules of 1959. 6. The RICCO issued a demand notice (Annex.2) to the petitioner on 21.03.1998. By this demand notice, the RIICO demanded development charges of Rs. 16,250/-, service charges of Rs. 1,38,266/-and other charges, in all RIICO demanded Rs. 1,69,367/-from the petitioner. It appears that the said demand notice was issued by the RIICO after taking a decision that the RIICO will not charge interest from the allottee who deposits all amount in one instalment by 31.03.1998. The petitioner did not deposit the said amount. RIICO issued another notice on 29.06.1998 (Annex. 3) and the demand has been raised to Rs. 3,65,975/-. 7. It will be worthwhile to mention here that the petitioner after showing his financial position and raising certain grounds for taking lenient view offered three cheques of Rs. 50,000/-, Rs. 1,00,000/-and Rs. 2,15,975/-respectively to the RIICO along with letter dated 03.07.1998 (Annex. 4). It appears that the petitioner vide letter dated 212.1998 (Annex. 6) further offered that he will pay the dues. Since the petitioner did not pay the demanded amount, therefore, the RIICO passed the order on 21.02.2000 (Annex. 18) and cancelled the lease-deed and informed the petitioner that the RIICO will start proceedings for taking possession back from the petitioner.
4). It appears that the petitioner vide letter dated 212.1998 (Annex. 6) further offered that he will pay the dues. Since the petitioner did not pay the demanded amount, therefore, the RIICO passed the order on 21.02.2000 (Annex. 18) and cancelled the lease-deed and informed the petitioner that the RIICO will start proceedings for taking possession back from the petitioner. The petitioner vide letter dated 09.07.2002 pointed out that the petitioner has not been informed that how much amount is due but the petitioner is submitting the bankers cheque of Rs. 5,400/-to the RIICO. 8. Now the petitioner is challenging the order dated 21.02.2000 passed by the RIICO by which the petitioners lease-deed was cancelled and the RIICO is threatening to dispossess the petitioner. 9. The petitioners contention is that the petitioner is not liable for any amount for which the petitioner never agreed and the RIICO cannot recover any amount exceeding the amount which can be recovered under the lease-deed dated 28.09.1972 (Annex.1). 10. According to learned Counsel for the petitioner, the lease-deed Annex.1 is binding contract between the parties and has been executed in accordance with the Rules and the lessor and lessee -State and petitioner as well as successor in interest (RIICO) from the State is bound by the terms and conditions of the lease-deed. The said lease-deed has not been superseded by the agreement of the parties or by any statutory provision. Rule 12 of the Rules of 1959 only provides that the RIICO shall have power to make allotment of land in accordance with the RIICO Rules or any other Rules framed by the RIICO or RTDC for this purpose. However, it is only for the vacant plots which are within the industrial area notified by the State Government and transferred to the RIICO. Therefore, by Rule 12, the RIICO has been given power to allot lands which earlier was being done by the State authorities. In addition to the right to allot the land, the RIICO has been given power to execute lease-deeds, realise development charges, lease rent and other dues from the entrepreneurs to whom plots have been allotted in accordance with the provisions of the Rules of 1959. In consonance of the power given, the Rule 12 further provides that the RIICO will have power to take any consequential or residuary action in regard to the plots allotted to the entrepreneurs. 11.
In consonance of the power given, the Rule 12 further provides that the RIICO will have power to take any consequential or residuary action in regard to the plots allotted to the entrepreneurs. 11. The respondents have come with a case that in view of Rule 12 of the Rules of 1959 and in view of the RIICO Rules, all industrial units are liable to pay service charges and there cannot be any distinction between the industrial plot holders, one having liability to pay service charges and other having no liability to pay the service charges despite the fact that they are getting the benefit of the services rendered by RIICO and developments made by RIICO. Learned Counsel for the respondents relied upon a Judgment of this Court delivered in S.B. Civil Writ Petition No. 6555/1992 (M/s. Kota Steel Rerolling Mills Pvt. Ltd. Kota vs. State of Rajasthan & Ors.) decided on 112.1996, wherein this Court after considering Rule 12 of the Rules of 1959, held as under:- “This provision makes it clear that the Corporation has been authorised to realise not only the development charges, lease rent, but also other dues from the entrepreneurs to whom the plots have already been allotted. The validity of Rule 12 is not in dispute and, therefore, even in respect of plots which have already been allotted, the Corporation is authorised to realise service charges and other dues . . . . . . . rules has no substance. It is true that the charges could be realised from the date this rule 12 has come into force but even if the allotments have been made earlier to this rule, the liability can be imposed prospectively. In these circumstances, I do not consider that any case for interference in the extraordinary jurisdiction is made out. The respondents have also given the details of expenditure incurred by the Corporation and the .... amount realised by way of service charges is only 10% of the expenditure incorrect.” I have considered the submissions of the learned Counsel for the parties and perused the relevant documents which have been placed by the parties on record. 12. So far as allotment of the land to the petitioner under the Rules of 1959 is concerned, there is no dispute. RIICO rightly did not question any of the terms of the lease-deed (Annex.
12. So far as allotment of the land to the petitioner under the Rules of 1959 is concerned, there is no dispute. RIICO rightly did not question any of the terms of the lease-deed (Annex. 1) because RIICO stepped in the shoes of the lessor as the petitioner is not disputing that the land has been transferred to RIICO and Rule 12 empowers, RIICO to deal with the lease and the plots as well as has given power to RIICO to recover the rent and dues from the lessee to whom the land has been allotted under the Rules of 1959. It is not the case of RIICO that the lease deed stands cancelled by agreement of the parties or has been superseded by any provision of law either under the Rules of 1959 or any other enactment. 13. When RIICO itself admits that it has stepped in the shoes of the lessor, then certainly, it is bound by the terms and conditions of the lease deed dated 28.09.1972 (Annex.1). 14. The question arises whether Rule 12 or any of the provisions of the Rules of 1959 empowers RIICO to demand any amount for which the allottee-petitioner did not agree at the time of the execution of the lease-deed. RIICO is claiming right to recover the service charges as RIICO can charge the service charges for land by virtue of the RIICO Rules which came into force in the year 1979. Admittedly, the land was allotted to the petitioner much prior to even framing of the RIICO Rules. 15. It will be worthwhile to mention here that admittedly even when the RIICO Rules were framed, they were not applicable to the petitioner’s land. Rules of 1979 deals with the allotment of the land to the entrepreneurs who are eligible for the allotment of the land from RIICO and not under the provisions of the Rules of 1959. From the year 1979 till the land in question was transferred to RIICO, the RIICO was charging the service charges from the lessee of the RIICO but there was no liability of allottees of the land under the Rules of 1959 to pay service charges either to the State or to the RIICO. Further, the lessor State reserved its right to claim amount of Rs.1,200/-from the petitioner along with first rent as per Sub-clause (iii) of Clause (4) of the lease agreement (Annex.
Further, the lessor State reserved its right to claim amount of Rs.1,200/-from the petitioner along with first rent as per Sub-clause (iii) of Clause (4) of the lease agreement (Annex. 1) and also was entitled to revise the annual rent after every 30 years. By this provision, the rent could have been revised by 25% of the payable rent, therefore, two sets of lands were very much there from 1979 onwards having liability to pay service charges and without there being any liability to pay service charges. 16. II part of Rule 12 provides that the Corporation shall have right to execute the lease-deed. Naturally, it deals with the subsequent leases and in case, there is need to execute fresh lease-deed with existing lessees under the Rules of 1959. The Corporation has been given power to realise development charges, lease rent and other dues from the entrepreneurs to whom plots have already been allotted in accordance with the provisions of these rules, and to take any consequential action. Therefore, by Rule 12, it has been specifically provided that RIICO shall have power to recover the amount from the entrepreneurs to whom plots have been allotted but it appears that Rule says that that amount can be recovered only in accordance with the Rules of 1959 and it nowhere provides that after coming into force of Rule 12 of the Rules of 1959, RIICO shall have the power to recover the service charges from the lessees to whom lease was granted by the State under Rules of 1959. 17. Learned Counsel for the RIICO pointed out that Clause (v) of Rule 11-A of the Rules of 1959, RIICO can levy and recover such lease rent and other charges as may be recovered by RIICO in respect of the land sub-leased by it. 18. Clause (v) of Rule 11-A of the Rules of 1959 reads as under:-“(v) The Rajasthan State Industrial and Development and Investment Corporation Ltd. Or Rajasthan Tourism Development Corporation may levy and recover such lease rent and other charges as may be determined by it, in respect of the lands sub-leased by it;” From the facts, this has come out that RIICO has not passed any order for levy of any rent or other charges against the petitioner.
RIICO proceeded on assumption that by virtue of power given under Rule 12 of the Rules of 1959, RIICO can straightaway demand the service charges from those entrepreneurs to whom the land has been allotted by the State Government under the Rules of 1959 and a lease deed has been executed under the Rules of 1959 by the State itself in whose shoes, RIICO stepped now. Clause (v) of Rule 11-A of the Rules of 1959 also nowhere provides that RIICO shall have power to rescind the lease agreement already executed or may have power to amend or alter the lease conditions, that too without consent of the lessee. 19. In view of the above discussion, the Judgment delivered by this Court in the case of Kota Steel (Supra) on 112.1996 requires to be reconsidered by the larger bench, therefore, the matter may be placed before Hon’ble the Chief Justice for placing the matter before the appropriate bench for deciding the following issue:- “Whether RIICO can demand and recover the service charges from the lessees to whom the land has been allotted by the State under the Rules of 1959? Meanwhile, the operation of the order dated 21.02.2000 (Annex.18) shall remain stayed and the RIICO shall not recover any amount on account of the service charges from the petitioner.