The demand of mortgage fees by the State Government was without any authority of law and was held to be unconstitutional and invalid.

JUDGMENT :

A. S. Chandurkar, J.

1. The challenge raised in this writ petition filed under Article 226 of the Constitution of India is to the Government Resolution dated 27.02.2009 prescribing payment of fees while granting permission to mortgage Occupancy-Class II lands as being unconstitutional, without authority of law and violative of Article 14 of the Constitution of India. Condition No.5 of the order dated 09.05.2011 passed by the Sub-Divisional Officer, Chandrapur thereby directing compliance of the terms and conditions stipulated in Government Resolution dated 27.02.2009 while granting permission to the petitioner to mortgage the lands acquired for it is also under challenge.

2. The facts relevant for considering the aforesaid challenges are that the petitioner is a Company incorporated under the provisions of the Companies Act, 1956. It is in the business of manufacturing paper. The manufacturing unit of the Company was to be located at Ballarpur, District Chandrapur and for that purpose an agreement dated 31.07.1947 was entered into between the then Governor of Central Provinces and Berar and the Company agreeing to invest money in the purchase of shares of the Company as well as to acquire land for the Company to set up its paper factory. The State of Madhya Pradesh thereafter initiated proceedings for acquisition of land under the provisions of the Land Acquisition Act, 1894 (for short, the Act of 1894). After acquiring such land, the same was transferred to the Company on 21.01.1950 under the provisions of Madhya Pradesh Land Revenue Code, 1954 (for short, the Code of 1954). After the States Re-organisation Act, 1960 came into force, Chandrapur District which was earlier part of the Central Provinces and Berar was included in the State of Maharashtra. Pursuant to the initial grant of aforesaid land, the Collector, Chandrapur on 18.01.1968 executed a Deed of recognition of title - Sanad in favour of the Company under the provisions of the Maharashtra Land Revenue Code, 1966 (for short, the Code of 1966). In the said Sanad it was stated that the Government of Madhya Pradesh at the request of the Company had acquired various lands at Ballarpur and the Company had paid the costs of acquisition to the then Government of Madhya Pradesh. In the Sanad certain terms and conditions were incorporated. As per Condition No.7 it was not permissible for the Company to alienate the said lands or any portion thereof by way of sale, mortgage, gift, lease, exchange or otherwise except with the previous permission in writing of the Government. It is stated that the Company continues to enjoy the said land for the purpose for which it was acquired and transferred to it. On 18.05.1972 another agreement was executed with the Company by which land admeasuring 162.30 acres from Survey No.31/1 was allotted to it for the construction of its residential colony.

3. The Company intended to mortgage the aforesaid land with a view to raise finance to facilitate its activities. Accordingly, on 05.01.2009 the Sub-Divisional Officer granted permission to the Company under Section 36(4) of the Code of 1966 to mortgage part of its land on certain terms and conditions. It was stated that if the Company failed to repay the loan obtained by it and the mortgaged land was required to be sold, 50% of the amount equivalent of the market value would have to be deposited with the State Government and from the balance amount the loan could be recovered. Thereafter on 04.02.2011 the Company made another application to the Sub-Divisional Officer seeking grant of general permission to create mortgage with regard to the lands mentioned in the schedule thereto. The Office of the Sub-Divisional Officer on 28.03.2011 pointed out certain deficiencies to the Company and also required payment of 0.50% mortgage fees as per Government Resolution dated 27.02.2009. The Company removed the deficiencies and paid an amount of Rs.3,26,25,000/- towards 0.50% mortgage fees as per Gov