Change in shareholding does not constitute a transfer of property interest; the shareholder remains distinct from the company assets, which must adhere to due legal process for any property transfer.

JUDGMENT :

Kamal Khata, J.

1) The present Petition challenges the impugned order dated 1^st June 2014 passed by the Revenue Minister (Respondent No.1). It upholds the decision of the Respondent No. 1 and affirmation by Respondent No. 2 that the land specifically allotted to OCS/VSNL (for their use) had been transferred from VSNL to Tata Communications Ltd., in breach of allotment dated 27^th March 1992 and consequently called upon them to pay Rs.26,06,74,446/- as unearned income recoverable as arrears of land revenue within seven days of demand.

Brief facts.

2) Overseas Communication Services (OCS) was the Department of Ministry of Telecommunications under the Government of India (GoI). On 27^th March 1986, the Government of India, through an Office memorandum, transferred the management, control and operations of the international telecommunication services business including all the assets and liabilities of OCS to Videsh Sanchar Nigam Limited (‘VSNL’) which had been incorporated on 19^th March 1986.

3) This Petition concerns land admeasuring 3947.37 square meters situated at village Bandra, Taluka Andheri bearing Survey No.341, CTS No.629 (part) (‘writ land’) allotted by the Government of Maharashtra to OCS for construction of staff quarters in 1991. In March 1992, the Collector issued final allotment order of the writ land in the name of OCS. Upon receiving the same, VSNL requested the Collector to issue necessary Orders to get the property card, registered in the name of VSNL. Although the construction of staff quarters started in 1992, the construction of two buildings was completed and Brihanmumbai Municipal Corporation (‘BMC’) issued Occupation Certificate (‘OC’) on 24th July 1998.

4) Due to the liberalization and disinvestment policy, the Government of India sold 25% out of the 52% of its shareholding in VSNL to a Tata Group Company. Over a period, the Tata Group Company acquired further shares of VSNL from the market. Later, on 20^th January 2008, the name of VSNL was changed to Tata Communications Limited a company incorporated under the provisions of the Companies Act, 1956, (TCL) namely the Petitioner.

5) Three years later, on 25^th March 2011, on the basis of a Circular dated 22^nd May 1990, the Collector (Respondent No3) issued a Show Cause Notice to OCS/VSNL claiming; (i) The construction was not completed after two years of allotment, (ii) The writ land has been transferred without prior permission from the Collector in breach of condition 4 namely:

“The grantee, his executors, administrators, and approved assignees, shall not at any time transfer the said land or any portion thereof or any interest therein without the previous written consent of the Government”.

(iii) The land has been used for the purpose other than the sanctioned purpose.

6) TCL (Petitioner) replied to the Show Cause Notice pointing out that there was no transfer of land, merely the name of VSNL was changed to that of the Petitioner, that the construction was completed in 1998 and the building continued being used as staff quarters for which it was allotted.

7) Without affording a hearing to TCL, on 11^th April 2012, the Collector (Respondent No. 3) passed an Order directing the TCL to pay Rs.26.06 crores as unearned income on the basis that the construction was completed in 1998 instead of 1987, no extension was sought for the same and the writ land was ‘transferred’ by VSNL to TCL without permission.

8) Aggrieved by the decision an appeal was preferred which was summarily dismissed by the Assistant Commissioner (Respondent No. 2) on 16^th January 2013 uphol