M/S.SWASTIK BUILDERS & DEVELOPERS PVT.LTD. Vs. REVENUE DIVISIONAL COMMISSIONER (CENTRAL DIVISION), CUTTACK

JUDGEMENT

(1.) PETITIONER , which is a Company incorporated under the Companies Act, 1956 and engaged in the business of development of property has prayed for quashing of Annexures 4 and 6, the order passed by the Collector, Puri in B.P.L. Case No.2 of 1999 and the appeal order of Revenue Divisional Commissioner, Central Division, Cuttack in O.G.L.S. Appeal No.1 of 2001 respectively. The case of the petitioner can be summarily narrated as follows: Some persons of West -Bengal and Orissa desirous of owning dwelling units in Puri town approached the petitioner for purchase and development of a property at Puri so as to provide them their desired dwelling units. Petitioner accordingly negotiated with the landowners and purchased the land in question (hereinafter called as 'case land) situated at VIP Road, Puri from the recorded owners and applied to the Puri Development Authority for sanction of building plan to accommodate 63 residential apartments. It also applied to the Revenue authorities for transfer and grant of permanent lease of the case land in its favour. Tahasildar, Puri caused enquiry into the said petition and submitted his report for approval by the Collector, Puri. The latter approved the transfer of the lease in favour of the petitioner, but taking note of the fact that the petitioner was constructing flats for customers levied annual rent at the commercial rate and directed that the lease agreement in favour of petitioner shall be executed in Form III of O.G.L.S. (Amendment) Rules, 1993. Learned Collector also imposed a penalty of 12 times of the annual rent as the lessees transferred the case land in favour of the petitioner without obtaining prior permission of the Collector violating the condition of the lease. Aggrieved with such order of the Collector imposing commercial rent, penalty and directing execution of the lease in Form III petitioner preferred O.G.L.S. Appeal No.1 of 2001 raising contentions that it did not utilize the case land for commercial purpose, but simply constructed residential units on the land for interested persons on self finance basis and it is, therefore, not liable to pay commercial rent or execute the lease in Form III. It also challenged the legality of the penalty imposed by saying that there is no provision for levying such penalty. The said appeal having been dismissed, petitioner has filed the present writ petition with the prayer to quash that order, Annexure -6 together with original order Annexure -4.

(2.) OPP .parties 2 and 3 in their joint counter supported the orders Annexures -4 and 6 and inter alia contended that the case land was purchased by petitioner from the lessees vide Sale deed Nos. 2593 dated 18.07.1998, 4271 dated 21.8.1998 and 4272 dated 16.10.1998 without taking prior permission of Collector, Puri which constituted violating condition No.2 of the lease agreement and accordingly petitioner is liable to pay penalty. They also stated that petitioner obtained permission from Puri -Konark Development Authority vide Order No.32 dated 21.1.1999 for construction of a seven storied building containing 63 residential apartments and sold those apartments to different persons obtaining commercial benefits and as per the guidelines provided in Revenue Department G.O. No.10055 -G.E.(GL) -59/75 (Annexure -A/3) petitioner is liable to pay annual rent on commercial basis. They further claimed that since the case land was used for commercial purpose and purchasers of residential apartments are neither the lessees nor did they themselves apply for lease, therefore, petitioner was asked to execute the lease agreement in Form III as provided under Clause 2(a) and (f) of Schedule 'V of O.G.L.S. (Amendment) Rules, 1993.

(3.) MR . Ch. P.K. Mishra, learned Addl. Govt. Advocate on the other hand argued that if a land was leased for homestead purpose and the lessee himself resided on the lease land for more than 5 years by the date of publication of the notification, then the lease can be deemed to be permanent lease as per Section 3(4) of the O.G.L.S. (Amendment) Act, 1991, but if instead of using the land as his own homestead, the lessee utilizes the land for commercial purpose, such as building apartments and selling those to buyers, then it amounts to commercial use of the land and benefit of Section 3 (4) of the Act will not be available to him and in such case annual rent would be collected at the rate meant for commercial land. He indicated that petitioner purchased the case land in 1998 and applied for permanent lease in the very same year and as such there was no occasion of its having own homestead on the case land for 5 years; and since the original lessee in whose favour lease was subsisting had not filed any application for grant of permanent lease status, benefit of Section 3(4) (c) of the O.G.L.S. (Amendment) Act was not available to the petitioner. On the contrary for purchasing such lease land without prior permission of the Collector it was liable for penalty contemplated for violation of condition No.2 of the lease deed. Mr. Mishra further argued that Rule 5 -B of the Amended O.G.L.S. Rules provides that settlement of Khas Mahal land would be made in the manner prescribed in Schedule 'V of the Rules and Schedule 'V prescribes that for Khas Mahal leases of land other than homestead land the lease deed is to be executed in Form III. He states that because the petitioner instead of having its own homestead on the case land, built 63 apartments and sold those apartments, it is liable to execute the lease deed in form No.III . In support of his contentions Mr. Mishra relied on Letter No. GE(GL)S -143/97 -29717/ dated 12th June, 1998, copy of the letter No.5808/R Dated 19.1.1978 issued by the Secretary to Government in Revenue Department, Notification No.100055 -GE (GL) - 59/76 -R of the Revenue Department dt. 29th December 1976 and the relevant provisions of the O.G.L.S. (Amendment) Act and Rules.