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IN THE HIGH COURT OF ALLAHABAD
Pankaj Naqvi, Piyush Agrawal, JJ.
Sushil Kumar Nagrath - Petitioner
Versus
State of U.P. and others - Respondent
Writ – C No. 21540 of 2020
Decided On : 20-01-2021
U.P. Industrial Area Development Act, 1976 – Sections 6, 7 – Transfer Charges – Levy of – Moot issue involved in this petition is as to whether NOIDA is empowered to levy transfer charges on conveyance executed by its lessees / sub-lessees. – Counsel for the petitioner has challenged the levy principally on the ground that it has no statutory flavour as also the lease deed contains no such power or authority to levy transfer charges in respect of subsequent conveyances. – He places reliance on the decisions of the Apex Court in Ultratech Cement Ltd. v. State of Maharashtra and Another, (2011) 13 SCC 497 and Tata Iron and Steel Company Limited and another vs. State of Bihar and another, (2018) 12 SCC 107.
Finding of the court: A perusal of the aforesaid manifests that the authority while executing a conveyance can put the lessee to such terms and condition as it may, subject to any rules, that may be made under this Act, think fit to impose. – Court, after carefully perusing Section -7 of the Act, are of the considered view that once terms and conditions, have been incorporated in the conveyance, the said incorporation cannot be faulted on the ground that no rules have been framed under the Act. – Counsel for the petitioner has not challenged the levy on the premise that no amenity / service is being rendered by the authority, rather the challenge is only on the ground that the levy has no statutory sanction. – Court will have to revert to the original lease which contained an express covenant that on every subsequent transfer, transfer charges would be made at a certain rate with a ceiling limit of 25 % of the market value vide sub-clause (c) of Clause-I. – There is an additional covenant in sub-clause (d) of Clause-I that all conditions which of course would include transfer charges shall be deemed to have been contained in the subsequent conveyances so that NOIDA gets an unfettered right to collect the said amount on every subsequent transfer from new sublessees to discharge its obligation for rendering services and providing amenities in the area. – A covenant attached to the land runs with the land. – Petitioner fully cognizant of the aforesaid covenant voluntarily obtained sub-lease cannot now take a somersault. – Levy is under a contract executed by an instrumentality of State. – Perusal of the aforesaid judgment would indicate that the Apex Court held that conditions contained in the original deed will be binding on the sub-lessee. – Court is of the considered view that even though transfer charge may not be having a statutory flavour in its traditional sense as urged by learned counsel for the petitioner but once NOIDA an instrumentality of State in exercise of its supervisory power under Section 7 of the Act, stipulates a condition of payment of transfer charges to be paid to NOIDA, lessor on every subsequent transactions and makes the said stipulation binding on subsequent sub-lessees, it becomes a contractual liability for all sub-lessees to comply with the same.
Result: – Writ Petition Dismissed
JUDGMENT
Heard Sri Rohan Gupta, learned counsel for the petitioner, Sri M.C. Chaturvedi, the learned Senior Counsel assisted by Sri Shivam Yadav for respondent no.2 and the learned standing counsel for the State.
The moot issue involved in this petition is as to whether NOIDA is empowered to levy transfer charges on conveyance executed by its lessees / sub-lessees.
1. Learned counsel for the petitioner has challenged the levy principally on the ground that it has no statutory flavour as also the lease deed dated 29.1.1990 contains no such power or authority to levy transfer charges in respect of subsequent conveyances. He places reliance on the decisions of the Apex Court in Ultratech Cement Ltd. v. State of Maharashtra and Another, (2011) 13 SCC 497 and Tata Iron and Steel Company Limited and another vs. State of Bihar and another, (2018) 12 SCC 107.
2. The learned Senior Counsel for the respondent – authority opposed the submission on the ground that levy of transfer charge is not a tax but a fee which the authority is empowered to collect under the terms of the lease deed dated 29.1.1990.
3. A lease deed dated 29.1.1990 was executed by NOIDA (lessor), an authority constituted under Section 3 of the U.P. Industrial Area Development Act, 1976 in favour of the Army Welfare Housing Organization (AWHO-the lessee), in respect of the plot of land.
4. The petitioner, a sub-lessee intended to transfer the property in favour of one Rajiv Kumar Singh under an agreement to sell dated 4.9.2013 applied before NOIDA seeking permission, the authority under orders dated 21.10.2019 and 9.1.2020 granted requisite permission but subject to payment of 5 % of the circle rate as transfer charge.
5. We by our order dated 11.1.2021 called upon learned counsel for the authority to place on record a copy of the lease executed by the NOIDA in favour of AWHO (original lessee) and in compliance thereto a xerox of the same (lease deed dated 29.1.1990) is placed on record, after showing / serving a copy thereof to learned counsel for the petitioner who did not challenge the correctness thereof.
6. The relevant clause which binds the lessee (AWHO) and its sub-lessees under the above deed are sub-clause (c) and (d) of Clause (I) which are extracted hereunder:
(d) This lease deed will form a part of sub-lease executed between the AWHO and cooperative society or the individual allottees (as the case may be) all conditions contained herein are binding on the sub-lessor/registrant allottee also.
7. Similarly, the lessee (AWHO) under sub-clause (b) of Clause -3 agreed to the following covenants:
8. A perusal of sub-clause (c) of Clause 1 as aforesaid would manifest that an allottee of AWHO i.e. a sub-lessee had to obtain prior permission in writing of the lessee or a cooperative society as the case may be, and that of NOIDA, the lessor before any transfer is effected by the allottee/sub-lessee.
This transfer is subject t
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