JUDGMENT : DEVASHIS BARUAH, J. 1. Heard Mr. A.K. Sarma, the learned Senior Counsel assisted by Mr. A. Goyal, learned counsel for the petitioner and Mr. B. Sarma, the learned Standing Counsel appearing on behalf of the respondent Nos. 1 to 5 and Mr. P.S. Deka, learned Standing Counsel appearing for the Respondent Nos. 6 to 8. 2. This is an application under Article 226 of the Constitution of India, whereby the petitioner has challenged the demand notice dated 9.5.2017 and also for a direction to the respondent authorities to revise the land value for the purpose of the license fee taking into account the valuation of the land under Palashbari Revenue Circle as per Annexure-6 to the writ petition. 3. The brief facts of the instant case is that the petitioner was allotted a plot of land admeasuring 313 metres x 60 metres wherein the petitioner could carry out its manufacturing activities of construction of PSC Sleepers for the NF Railway construction organization at Mirza vide contract agreement dated 1.3/1991. In respect to the said land the petitioner has been annually paying a license fee for the use and occupation of the said land. It has been brought on record that the petitioner for the years 2010-11 to 2015-16 have been paying the license fee for the said plot of land in the following manner: Year 2010-11 Rs. 1,14,195/- Year 2011-12 Rs. 1,22,189/- Year 2012-13 Rs. 1,30,742/- Year 2013-14 Rs. 1,49,894/- Year 2014-15 Rs. 1,68,187/- Year 2015-16 Rs. 1,82,150/- 4. There is no dispute that the said amount has been paid by the petitioner to the Railway authorities and to which the Railway authorities have duly received the same. Subsequently on 9.5.2017 upon taking the present market value of the land in question at Rs. 16 lakhs per bigha, the respondent railway authorities issued a notice of demand on 9.5.2017 claiming that an amount of Rs. 63,99,715/- as land license fee for the years 2015-16, 2016-17 and 2017-18 is due by the petitioner. Subsequently on 9.5.2017 upon taking the present market value of the land in question at Rs. 16 lakhs per bigha, the respondent railway authorities issued a notice of demand on 9.5.2017 claiming that an amount of Rs. 63,99,715/- as land license fee for the years 2015-16, 2016-17 and 2017-18 is due by the petitioner. It has also been mentioned in the said notice of demand that as per the Railway Board’s guidelines land license fee and agreement must be reviewed every 10 years gap but unfortunately as the land license fee and the agreement was not reviewed w.e.f. 1991-1992 to 2014-2015 and as such the said land license fee was reviewed and accordingly as per the Railway Board’s guidelines the said demand was being made. To the said demand notice a calculation sheet has also been enclosed as to how the said amount of Rs. 63,99,715/- was arrived at. A perusal of the calculation sheet shows that the land value calculation has been done at the rate of Rs. 16 lakhs per bigha. The petitioner’s case is that pursuant to the said notice of demand being issued, the petitioner made enquiries before the Office of the Circle Officer, Palashbari Revenue Circle and the Circle Officer, Palashbari Revenue Circle had given the land valuation vide a certificate dated 9.1.2018 in respect to the said land at Rs. 5 lakhs per bigha on the basis of zonal valuation of the land. It on the basis thereof the petitioner submitted various representations to the concerned Railway authorities to fix the land value as per the certificate given by the Circle Officer, Palashbari Revenue Circle on 9.1.2018 for the purpose of calculating the license fee. The respondent authorities having not done so, for which the petitioner has approached this Court under Article 226 of the Constitution of India. In the said writ petition the petitioner has sought for setting aside and quashing the notice of demand dated 9.5.2017, for a direction upon the respondent authorities to revise the land value as well as the license fee taking into consideration the certificate issued by the Circle Officer, Palashbari Revenue Circle dated 9.1.2018, for setting aside and quashing the letter dated 27.10.2016 issued by the Circle Officer, Palashbari wherein the market value has been shown at Rs. 16,00,000/- per bigha. 5. 16,00,000/- per bigha. 5. This Court vide an order dated 25.8.2018 issued notice of motion and further observed that the deposit made by the petitioner in terms with the impugned notice of demand dated 9.5.2017 shall be subject to the outcome of the writ petition. Pursuant thereto the Railway authorities filed their affidavit-in-opposition. In the said affidavit in opposition, the specific stand of the Railway authorities is that the actual area under the occupation of the petitioner is 4.64 acres and the balance area of 1.47 acres is lying in the open space wherein the Railway siding track and sleeper stake for loading into the wagon/track is being used by the petitioner regularly or in other words the petitioner is in occupation of 6.11 acres of land. It is also the stand of the Railway authorities that the land license fee and the agreement was not reviewed since 1991-92 and hence the Railways have reviewed the land value as per the present market value of the land @ Rs. 16 lakhs per bigha and the calculation was purely based on the rate fixed by the Railway Board’s Master Circular i.e. 6% of the present market value. It is also the stand that as per the Master Circular regarding the licensing of the railway’s land for commercial plot etc license fee for covered area is 7½ % and for open area is 6% of the land value but the Division had calculated the land license fee at the rate of 6% of the market value. In the said affidavit in opposition of the respondent railway authorities a Joint Engineering/Commercial and Accounts Circular No. W/2014/Pt-VIIII/W-4 dated 7.9.2005 which is the Master Circular for licensing of the railway land for commercial plots is enclosed. Clause 6 of the said Master Circular stipulates as to what should be the license fee on the basis of the land value. Clause 7 and 8 of the said Master Circular being relevant which relates how to fix land value and what is to be done in fresh cases of licensing of the plots is quoted herein-below: “7. Fixing of land value: A market value would however, be required to be taken to serve as a base value for working out rental fee payable. Fixing of land value: A market value would however, be required to be taken to serve as a base value for working out rental fee payable. This shall be fixed on the basis of the land value of the surrounding area as on 1.1.1995, as determined from the Revenue Authorities and/or from the following: (i) Evaluation of town planning Department. (ii) Actual as per PWD and CPWD transactions. (iii) Actual transactions, as per documents filed in the office of the Sub-Registrar. (iv) Value of land assessed by professional evaluators of he state and Central Governments. (v) The land value as worked out shall be increased every year on the 1st of April starting from 1.4.1986 at the rate of 10% over the previous year’s land value to arrive at the land value for the following year based on which the annual license fess shall be fixed. From 1.4.2004 onwards, the land value shall be increased at the rate of 7% every year over the previous year’s value. (vi) For pending cases the circular of 1985 would be followed from 1.1.1986 to 30.01.1995. Circular of 1995 would be followed from 1.4.1995 to 31.03.2004 Circular dated 10.02.2005 would be followed since 01.04.2004. 8. However for fresh cases of licensing of plots for any purposes defined in Para 6 (a) to (e) above, the license fee shall be fixed after obtaining the current value of the land In very rare case where it is not possible to obtain the current cost (reasons for which should be brought out on records). The updated cost based on 1.1.1985 land price should be adopted.” 6. A perusal of Clause No. 7 would show that the market value has to be fixed upon the land value of the surrounding area as on 1.1.1985 as determined from the revenue authority. It has been categorically mentioned that the land value as worked out shall be increased every year on the 1st of April starting from 1.4.1986 at the rate of 10 % over the previous year’s land value to arrive at the land value for the following year based on which the annual license fee shall be fixed. From 1.4.2004 onwards the land value shall be increased at the rate of 7% every year over the previous year’s value. From 1.4.2004 onwards the land value shall be increased at the rate of 7% every year over the previous year’s value. In terms with clause 8 which is also relevant for the purpose of the instant dispute, for fresh cases of licensing of plots for any purposes defined in Para 6(a) to 6(e) of the said Master Circular, the license fee shall be fixed after obtaining the current value of the land. It is only in very rare cases where it would not be possible to obtain the current cost (reason for which should be brought out on records) the updated cost based on 1.1.1985 land price should be adopted. 7. Before further proceeding with the matter, it would be relevant to take note of the policy of the Railways as regards licensing of plots. In the writ petition the petitioner has enclosed two circulars showing the policy of the Railways in respect to licensing of the plots. The first of such circular is dated 29.8.1995. In the said circular dated 29.8.1995, it has been observed that the land for purpose of commercial exploitation should be given on licensing basis only. Leasing of land is not permitted except in cases where it has been specifically approved by the Railway Board. Clause 2.2 categorically mentions that the license fee must be fixed by resorting to public auction/open tender for getting the maximum revenue and future licensing of land is permitted only for purposes directly connected with the railway work and with the personal approval of the General Manager in consultation with the FA&CAO. Clause 2.4 being relevant is quoted herein-below: “2.4 In each case of licensing, proper agreement must be executed between the Railway Administration and the licenses before the license is given possession of the land/plot. This must be strictly followed and for any violation of these instructions, the official handing over land before the execution of agreement, shall be held personally responsible by the Railway Administration.” 8. Clause 3 stipulates the rates of the license fee whereas clause 4 stipulates how the land value is to be fixed. This must be strictly followed and for any violation of these instructions, the official handing over land before the execution of agreement, shall be held personally responsible by the Railway Administration.” 8. Clause 3 stipulates the rates of the license fee whereas clause 4 stipulates how the land value is to be fixed. Clause 7 relates to revision of license fee which for the sake of convenience is quoted herein-below: “Revision of license fee: 7.1 As the notional land value will increase by 10% over the previous year’s land value as mentioned in Para-3 above, the license fee will automatically go up by 10% over the previous year’s fee from the first of April every year. Suitable provisions, with Schedule of payment due, may be incorporated in the agreement. 7.2 The termination/renewal date of the Agreement should always be the end of the financial year so that there is no confusion and a better watch is kept on renewals.” 9. The Circular dated 10.02.2005 also stipulates the policy of the Railways on licensing of Railway land for commercial plots etc (Master Circular). Clause 2.5 mandates that in each case of licensing proper agreement must be executed between the Railway administration and the licensees before the licensee is given possession of the land/plot. The said clause is also quoted herein-below: “2.5 In each case of licensing, proper agreement must be executed between the Railway Administration and then licensees before the license is given possession of the land/plot. This must be strictly followed and for any violation of these instructions, the official handing over land before the execution of agreement, shall be held personally responsible by the Railway Administration.” 10. Clause 7 which relates to revision of license fee incorporates certain changes which were earlier there in the 1995 circular and the same is therefore quoted herein-below: “7.0 Revision of license fee: 7.1 As the notional land value will increase by 7% over the previous year’s land value as mentioned in Para-5.2 above, the license fee will automatically go up by 7% over the previous year’s fee from the first of April every year. Suitable provisions, with Schedule of payment due, may be incorporated in the Agreement. 7.2 The termination/renewal date of the Agreement should always be the end of the financial year so that there is no confusion and a better watch is kept on renewals.” 11. Suitable provisions, with Schedule of payment due, may be incorporated in the Agreement. 7.2 The termination/renewal date of the Agreement should always be the end of the financial year so that there is no confusion and a better watch is kept on renewals.” 11. The Master Circular to which the Railway authorities have enclosed to their affidavit in opposition dated 06.10.2005 apart from the above quoted clauses 7 and 8 mentions that in case of licensing proper licensing agreement must be executed between the Railway administration and the licensees before the licensing is given the possession of the land and the plot. 12. Clause 9 relates to revision of license fee which is in similar terms to the Circular dated 10.02.2005 and the same is also quoted herein-below for the sake of convenience: “9. Revision of license fee: As the notional land value will increase by 7% over the previous year’s land value as mentioned in Para-7 above, the license fee will automatically go up by 7% over the previous year’s fee from the first of April every year. Suitable provisions, with Schedule of payment due, may be incorporated in the Agreement. The termination/renewal date of the Agreement should always be the end of the financial year so that there is no confusion and a better watch is kept on renewals.” 13. Thus, from the above quoted clauses of the three Circulars of the Railways and a conjoint reading therefrom would go to show that it’s the mandate as per Circular that prior to licensing of the commercial plots, proper licensing agreement must be executed between the Railway administration and the licensing and this mandate in all the three circulars stipulates that the same has to be strictly followed. The revision of the land value prior to 1.4.2004 has to be done @ 10% over the previous land value. However, after 1.4.2004 the land value shall be increased @ 7% every year over the previous value. The revision of the land value prior to 1.4.2004 has to be done @ 10% over the previous land value. However, after 1.4.2004 the land value shall be increased @ 7% every year over the previous value. In terms with Clause 7 of the Master Circular of the year 2005 it has been fixed that the notional land value will increase by 7% over the previous year land value and the licensing fee will automatically go up by 7% over the previous year fee from the 1st of April every year and it is also the requirement that suitable provisions with the schedule of payment due needs to be incorporated in the agreement of licensing. 14. In the backdrop of the above and after taking into consideration the 3 Circulars a specific query was made to learned Standing Counsel of the Railways as to whether there exits any licensing agreement with the petitioner. The counsel for the Railways upon instruction states that there is no separate licensing agreement entered into with the petitioner except a contract agreement dated 29.3.1991 which was executed by the Railway authorities and the petitioner only for the purpose of supply of PSC sleepers and allotment of land was not at all related to the same. He further submits that in the contract agreement of the year 1991 the land value was written and from the year 1993-94 the petitioner has been paying the annual license fee and the rate at which the license fee was fixed initially was Rs. 304 per acre per month. He further submits that there has been yearly increase of license fee @ 7% per year. The record shows that the respondent authorities were though bound as per its own Circular to enter into licensing agreement but nothing has been done till date. It is also an admitted fact that the petitioner had paid the licensing fee for the year 2010-11 to 2015-16 which the respondent authorities have accepted without any objection. The records further reveals that without any notice the concerned respondent authorities have issued the impugned notice of demand dated 9.5.2017 thereby directing the petitioner to deposit an amount of Rs. 63,99,715/- on the basis of a communication dated 27.10.2016 issued by the Circle Officer, Palashbari Revenue Circle to the Senior Section Engineer (Works), NF Railway. The records further reveals that without any notice the concerned respondent authorities have issued the impugned notice of demand dated 9.5.2017 thereby directing the petitioner to deposit an amount of Rs. 63,99,715/- on the basis of a communication dated 27.10.2016 issued by the Circle Officer, Palashbari Revenue Circle to the Senior Section Engineer (Works), NF Railway. This mode adopted to increase the licensing fee is not only contrary to clause 7 of the Master Circular dated 6.10.2005, it is also contrary to clause 9 which stipulates how revision of the license fee has to be made in as much as the increase in the license fee cannot be more than 7% every year. By the impugned notice of demand, the respondent authorities increased the licensing fee by almost 11 times for the year 15-16 and so on for the year 2016-17 and 2017-18.This fixation of the land value and the consequent licensing fee which is in violation of clause 7 and 9 of the Master Circular dated 6.10.2005 is therefore, arbitrary and unreasonable and in violation to the Railway own circular and liable to be set aside and interfered with an observation that the respondent Railway authorities can fix the license fee in terms with clause 7 and 9 of the Master Circular. 15. At this stage, it is relevant to reiterate that it is the mandate of all the Circulars be it the circular of 1995 or the two circulars of 2005 that no plot of land can be allowed for commercial use by an private parties without entering into a licensing agreement. In the instant case it is an admitted fact that there is no licensing agreement between the petitioner and the respondent Railway authorities and the petitioner has been allowed to use the land in question without any agreement which is completely contrary to the 3 Circulars above mentioned. In the instant case it is an admitted fact that there is no licensing agreement between the petitioner and the respondent Railway authorities and the petitioner has been allowed to use the land in question without any agreement which is completely contrary to the 3 Circulars above mentioned. The land which have been allowed to be used by the petitioner is a land belonging to the respondent Railways which is a State within a meaning of Article 12 of the Constitution of India and under such circumstances when the respondent in their own Circular mandates that licensing agreement are a must before handing over a possession and in absence thereof strict action would be taken against the erring official, it is strange to observe how the respondent Railways have been permitting the petitioner to continue the use and occupation of a plot of land without a licensing agreement. 16. The next contention so made before this Court which relates to the relief sought for by the petitioner that market value should be fixed at Rs. 5,00,000/- in terms with the certificate dated 9.1.2018 and not Rs. 16,00,000/- lakhs per bigha as per the certificate dated 27.10.2016 can only be gone into as and when the respondent authorities enters into a licensing agreement which they are bound to do so as per their own Circular. This aspect is not a matter which can be taken into consideration by this Court under Article 226 of the Constitution of India. As per the Master Circular dated 6.10.2005 the land value has to be fixed on the current value of the land and after arriving at the land value the licensing fee can be fixed in terms with clause 6 of the said circular. 17. Taking into consideration that the Railway authorities claims Rs. 16,00,000/- to be the land value per bigha on the basis of the communication dated 27.10.2016 issued by the Circle officer, Palasbari and the petitioner claims that the land value should be 5,00,000/- per bigha as per the certificate dated 9.1.2018 issued by the same office i.e. the Circle Officer, Palashbari, it would be deemed appropriate that prior to fixing the land value the respondent authorities shall give the petitioner an opportunity of hearing and to produce the necessary materials in support of their claims as regards what should be the land value. This opportunity shall only be given if the petitioner opts for entering into a licensing agreement with the Railway authorities. Needless to mention that when the petitioner claim rights as regards the fixation of the land value as per the circulars, the petitioner cannot be allowed to contend that there should be no licensing agreement which is the mandate of the Circular. 18. Consequently in view of the above observations the impugned notice of demand dated 9.5.2017 is interfered with a direction to the respondents Railway authorities to calculate the land value and the consequential licensing fee on the basis of clause 7 and 9 of the Master Circular dated 16.2.2005 till a licensing agreement is not entered into by the petitioner along with the respondent Railway authorities. It is also observed that if the petitioner does not enter into a licensing agreement, the respondent authorities in view of the mandate of the Circulars that licensing agreement is a must, shall take appropriate steps as envisaged under the law against the petitioner. The process of entering into the agreement for licensing has to be completed expeditiously and not later than 3 months from the date of the order subject to the petitioner is willing to enter into a licensing agreement which is a must as per the Circulars for use and occupation of the plot of land in question. 19. With the above observations and directions, the instant writ petition stands disposed.