The main legal point established in the judgment is that the JIADA Regulation 2016 could not be applied retrospectively, and the financial liabilities imposed on the petitioner for past mergers and outstanding land rent and levy for freehold land were unjust.

JUDGMENT :

1. The instant Writ Petition (Civil) has been filed quashing of the demand notice No.298/ AR, demand notice No. 300/AR both dated 18.03.2019 issued by the Respondent No.3 [The Regional Deputy Director, Jharkhand Industrial Area Development Authority, Adityapur Region, Seraikella-Kharsawan] and commanding the respondents to refund the aggregate amount of Rs.84,78,58,757/-tendered against the above said demand notices. Under the notices following demands were raised:

i. Rs.29,28,56,844/-, on account of financial liability for the past mergers under Regulation 24(i) of the Jharkhand Industrial Area Development Authority Regulation, 2016 (herein-after be referred as JIADA Regulation) in relation to 77.98 acres of leasehold land.

ii. A sum of Rs.55,50,01,913/-as financial liability for past merger along with outstanding land rent and land levy and processing fee for name change in relation to 207.12 Acres of land claimed by the Petitioner as freehold land.

2. The claim has been raised on the premise that both the lands i.e. 77.98 acres and 207.12 acres were leased by the Jharkhand Industrial Development Authority (JIADA, R-2) and the charges were levied under clause 24(i) of the JIADA Regulations against pending arrears and for merger.

3. Petitioner’s case is primarily that 207.12 acres was freehold land of the Petitioner Company and 77.98 acres of land was lease hold, but it was not liable to make the payment as it was a case of retrospective operation of JIADA regulation which came into force in 2016 and the merger took place 18 years ago.

PETITIONER’S CASE

LEASEHOLD LAND

4. Petitioner Company was originally engaged in steel and wire ropes and it comprised of two separate Divisions i.e. one is Steel Division and Wire and another is Wire Rope Division.

5. Petitioner entered into a Business Transfer Agreement (BTA) with Tata Steel Ltd (TSL) on 22.09.2018 and in terms of BTA, the Petitioner transferred all assets forming part of the Steel Division including land measuring 77.98 acres to Tata Sponge Iron Ltd which was leased by JIADA (R-2). When the permission for the said transfer was sought for from JIADA (R-2) in conformity with the terms of the allotment, the issue of financial liability of past mergers of various allottee entities belonging to Usha Martin Group was raised along with areas in land rent and land levy as a precondition for the said conveyance. Similar claims were also raised with respect to 134.86 acres of Freehold land, as if they were leasehold land. Having no option and on failing to reason with the authorities the amount was paid under protest.

6. An aggregate land area of 77.98 acres of Leasehold land was allotted by JIADA (R-2) on different dates from 1972 to 1999 in favour of seven separate companies all belonging to Usha Martin Group of the Petitioner for the exclusive industrial purposes of its Steel Division.

7. For the purposes of consolidation of financial and other resources, several intragroup corporate restructuring in the form of mergers concerning the seven companies within the Usha Martin Group of the petitioner who were allotted lease hold lands, were undertaken under the applicable provisions of the Companies Act, 1956 from the period 1983 to 2001. Such past mergers eventually resulted in the vesting of the leasehold interest in respect of 77.98 acres of land in the Petitioner. As a consequence of such past mergers name of the seven companies were changed. The name of Usha Martin Black (Wire Rope) Ltd was changed to Usha Martin Industries Ltd on 02.11.1983. Usha Alloys & Steel Ltd subsequently merged with Usha Martin Industries Ltd on 1.06.1988 whereby the 43.60 acres of leasehold land got transferred to Usha Martin Industries Ltd. In this way by past mergers the entire 77.98 acres of this land got fully vested in Usha Beltron Ltd. in the year 2001 and its name was changed to Usha Martin Ltd in the year 2003.

8. These past mergers were very much within the knowledge of JIADA which had in the yea