The court affirmed the exercise of review jurisdiction under Section 258 of the Maharashtra Land Revenue Code while establishing that recovery responsibility for unearned income lies with the petitioner, allowing potential recovery claims against NRC.

JUDGMENT :-

1] Rule. With the consent of learned counsel for the parties, rule is made returnable forthwith.

2] This petition is directed against the judgment and order dated 15 February 2007 (impugned order) made by the Minister (Revenue), State of Maharashtra in the purported exercise of revenue jurisdiction under Section 258 of the Maharashtra Land Revenue Code, 1966 (Code) requiring the petitioner to pay 'unearned income' in the matter of assignment of leasehold rights by M/s. National Rayon Corporation Limited-respondent No.4 (NRC) to the petitioner.

3] This petition is in respect of land bearing C.S. No.2/65 admeasuring 3403 sq.yards and C.S.No.67 admeasuring 1892 sq.yards in Lower Parel Division, Haines Road, Mumbai (said property). By indenture of lease dated 12 August 1939, the Governor of Bombay leased the said property to Sir Shapurji Barocha Mills Limited for a term of 50 years, i.e., from 1 November 1935 to 31 October 1985. On 28 July 1964, the lease was assigned in favour of Life Insurance Company of India (LIC). On 1 December 1964, the LIC, in turn assigned the lease in favour of respondent No.4. On 11 April 1985, NRC applied to the Collector of Mumbai for renewal of lease for further terms of 50 years. NRC, by Deed of Assignment dated 21 April 1988, assigned lease hold rights in favour of the petitioner - Priya Constructions Private Limited. By order dated 23 February 1999, the State of Maharashtra regularised such assignment and renewed lease for a further term of 30 years, subject to certain terms and conditions specified in the order.

4] Based upon the order dated 23 February 1999, respondent No.1 issued demand notice dated 23 January 2001 upon the NRC, calling upon it to pay lease rent for the period between 1 November 1985 to 23 April 1988 at the rate of Rs.337.21 per annum and 50% from out of the assignment consideration of Rs.3 crores received by the NRC from the petitioner towards 'unearned income' together with interest thereon. Thus, by demand notice dated 23 November 2001 total amount of Rs.3,84,13,985/- was demanded from NRC. The NRC, questioned this demand notice dated 23 January 2001 by filing Writ Petition No.2515 of 2001 in this Court. By order dated 4 May 2001, this Court directed the NRC to deposit the principal sum towards 'unearned income' within prescribed period. However, this order was not complied with by NRC.

5] Similarly, by yet another order dated 27 February 2001 respondent No.1, by reference to the order dated 23 February 1999 issued demand notice upon the petitioner towards lease rent payable from 21 April 1988 till 30 June 1992 together with interest thereon, amounting to Rs.36, 73,13,589/-.

6] The petitioner, aggrieved by the demand notice dated 27 February 2001, particularly on the aspect of the valuation of the said property and the consequent quantum of demand preferred a revision application to the State Government. The Revenue Minister, by judgment and order dated 13 January 2003 allowed the revision application partly and the operative portion reads thus:-

ORDER

1. Order (a) of Government Order No.LBL/2586/Case No.278/J-

2 dated 23.2.1999 be confirmed as final.

2. Order (b) of Government Order No.LBL/2586/Case No.278/J- 2 dated 23.2.1999 is hereby set aside/cancelled and instead following order is being issued, (i) 4427.14 sq.mtrs (5295 sq.yds) land of Lower Parel Division bearing C.S.No.3/65 be given on Lease from 21.4.1988 to 31.12.1998 and Land being used for “Service Industries”, 2% Lease Rent be levied/assessed as per stipulation of the Government Resolution dated

5.10.199 taking into consideration market value of subject land as on 21.4.1988 (that date). Thereafter w.e.f. 1.1.1999, 2% Lease Rent be levied/assessed for a period of 30 years. All other concerned terms and conditions of Government Resolution dated 5.10.1999 will be applicable to the Lessee.

(ii) Final valuation of the