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2022 Supreme(Pat) 101

IN THE HIGH COURT OF JUDICATURE AT PATNA
ASHUTOSH KUMAR, ANJANI KUMAR SHARAN, JJ.
Ramjee Sah Son of Bhikham Sah Resident of Suhiya – Appellant
Versus
The State Of Bihar – Respondent
Letters Patent Appeal No.1294 of 2016 In Civil Writ Jurisdiction Case No.13485 of 2013
Decided on : 10-03-2022

Advocates:
Advocate Appeared:
For the Appellants : Mr. Manik Vedsen, Adv. Mr.Subhash Chandra Bose, Adv.
For the Respondent: Ms. Shilpa Singh, Mr.Prasahnt Kumar, Mr. Lalit Kishore, Mr. Yashraj Bardhan, Adv. Mr. Raj Nandan Prasad, Adv.

Headnote:

Bihar Industrial Area Development Authority Act, 1974 – Section 7 – Auction sale of plot – BIADA has not charged price of land but has saddled appellant with a transfer fee and that also in accordance with its policy decision which is regularly being followed in all such transfer or sale, be it auction or distress sale or sale by choice – BIADA is entitled to charge 15% of current market value of land with reference to date of sale but it ought to take into account that depreciation is required to be made for lesser number of years of lease in currency – While computing quantum of transfer fee BIADA has not at all taken into account that now only 64 years are left for lease to expire and before any transfer fee could have been calculated on any rate, there ought to have been depreciation in terms of number of years left in currency of lease – That not having been done, imposition of transfer fee of amount of Rs. 1,71,329/- is not justified – Appellant directed to make representation before Chairman-cum-Managing Director of BIADA. (Paras 18, 25, 27 to 29)

1994 (1) PLJR 604 – Distinguished.

2019 (10) SCC 733 – Relied.

Judgement Key Points

Key Points: - BIADA is entitled to charge 15% of the current market value of land at the date of sale, but must account for depreciation based on the remaining lease term (!) . - The transfer fee calculation must consider depreciation for the lesser number of years left in the lease currency (!) (!) . - The demand of transfer fee could not be questioned by the appellant after payment, even if made under protest and subject to rights (!) . - The policy decision of charging transfer fee at 15% was adopted by BIADA on 19.02.2004 and is regularly followed in all transfers or sales, including auction or distress sales (!) . - The original lessee had a transferable leasehold interest, but in this case the land was sold at auction, and the transfer fee was imposed as the primary ownership remained with BIADA (!) (!) .

How should the transfer fee for leasehold land sale be calculated when the lease has a limited remaining term?

What is the basis for determining the quantum of transfer fee in BIADA land transactions?

Are policy decisions of BIADA regarding transfer fees applicable to auction sales of mortgaged leasehold land?


JUDGMENT :

ASHUTOSH KUMAR, J.

1. Heard Mr. Manik Vedsen, the learned counsel for the appellant, Mr. Yashraj Bardhan for the respondent nos. 2 and 3, namely, Bihar Industrial Area Development Authority through its Managing Director and Mr. Raj Nandan Prasad for the Bihar State Finance Corporation. The State is represented by Mr. Prashant Kumar, learned AC to SC-05.

2. The appellant had preferred a writ petition seeking quashing of the demand of the respondent BIADA of the transfer fee of Rs. 1,71,329/-from the appellant/writ petitioner for transferring the concerned plot to him which he had purchased in the auction sale of the plot by the mortgagee/Bihar State Finance Corporation (hereinafter referred to as “BSFC”) but the question in the present appeal is limited to whether the BIADA is justified in charging the transfer fee and if so, what should be the quantum of the same.

3. Be it noted that the demand of the BIADA of the transfer fee of Rs. 1,71,329/-has already been paid by the appellant along with the dues of the erstwhile allottee but without prejudice to his rights and contentions.

4. The plot in question was allotted to one M/s Bhojpur Bucket Industry on 16.06.1977 for setting up a unit for manufacturing buckets. The aforesaid allottee had obtained loan on the said plot on mortgaging it to Bihar State Finance Corporation. Because of the default in repayment of loan, the plot along with the lease hold land and the machinery was put to auction sale by the BSFC and the appellant had purchased the same on a consideration amount of Rs. 4,10,000/-with further stipulation that the dues payable to BIADA by the original lessee/allottee would also be restituted by the appellant.

5. When the appellant applied before the respondent/BIADA for change in the name of the proprietor and the project along with the prescribed fee of Rs.1,000/-, the same was refused on the ground that the lease in favour of original allottee had been cancelled before the lease hold land was auction sold to the appellant.

6. It further appears that the appellant approached the High Court vide C.W.J.C. No. 15639/2009 when a Bench of this court referred the dispute to the Principal Secretary, Department of Industries, who was holding the post of Chairman of BIADA as also the Chairman of BSFC. He, on enquiry and on hearing the parties, validated the sale of lease-hold land but held that the appellant would be required to pay the transfer fee before the plot could be transferred in his name for a different project.

7. Pursuant to the aforesaid decision by the Principal Secretary, Department of Industries, the appellant was asked to pay an amount of Rs. 2,53,819/-towards the dues incurred by the erstwhile allottee along with a transfer fee of Rs. 1,71,329/-as well as the general charges of Rs. 4,532/-.

8. The transfer fee appears to have been calculated at the rate of 15% of the value of land evaluated at Rs. 271.95/-per sq. ft.

9. This was questioned by the appellant vide C.W.J.C. No. 13485 of 2013, which has been disposed off by judgment dated 18.05.2016 which has been impugned in the present appeal, holding that since the policy decision of the BIADA to charge transfer fee has not been challenged, such demand could not be asked to be quashed. However, the rate at which the quantum of transfer fee would be calculated was left open by the learned Single Judge as according to him, no document was placed by the parties for any deteriminative decision in that regard.

10. The reliance of the appellant on the judgment of this Court in M/s Vikramshila Transformers vs. State of Bihar 1994 (1) PLJR 604 was not accepted by the learned Single Judge as in the aforesaid case, a fresh price was demanded from the purchaser of the lease-hold land whereas in the present case, the appellant was only asked for the transfer fee as the primary ownership of the land always remained with BIADA.

11. Since the appellant had been suffering losses on account of non-transfer of the land in his nam

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