2015 (2) TMI 1356 - HC - Indian Laws

Demand of differential premium made by the first respondent to the petitioner as a condition for transfer of the said plot in the name of the petitioner - Involuntary transfer or not - formal or informal transfer - circular dated 12th May 1998 - HELD THAT - The circular incorporates transfer guidelines for the industrial and other plots. The said guidelines have been issued in super-session of all earlier guidelines. The said circular divides the transfers into two categories formal transfers and non-formal transfers. The learned counsel appearing for the petitioner relied upon clause 3 of the first part dealing with formal transfers - The said clause 3 applies to involuntary transfers including amalgamation demergers etc. under the direction of the appropriate Court. In the present case the said plot was put to auction and the petitioner has voluntarily opted to participate in bid. Therefore clause 3 will not apply to the said transfer. The case of the petitioner will not fall in the category of formal transfers. Circular dated 12th December 2011 - HELD THAT - It is true that the said circular is issued by way of clarification to the circular dated 12th May 1998. However the said circular clearly records that the same will apply only to the applications for transfer received after 12th August 2011 - In the present case admittedly the application made by the petitioner was prior to the said date. It is true that in the letter dated 30th December 2013 there is a reference to the circular dated 12th November 2011. However it is merely stated therein that the said circular is by way of clarification. As stated earlier the said clarification will apply prospectively and it cannot not be applied to the applications which were pending. The demand for payment of 30% differential premium is strictly in terms of the policy reflected from the circular dated 12th May 1998 - there is no no error in the demand made by the first respondent for payment of 30% differential premium as a condition for transfer - petition dismissed.

Summary

Issues:
Dispute over demand of differential premium for transfer of industrial plot. Interpretation of circulars dated 12th May, 1998 and 12th December, 2011. Classification of transfer as formal or non-formal. Applicability of differential premium in the case of involuntary transfer.

Analysis:

1. Demand of Differential Premium:
The case revolves around the dispute concerning the demand of a differential premium by the first respondent for the transfer of an industrial plot to the petitioner. The demand was made subject to conditions outlined in letters dated 20th March, 2013, and 30th December, 2013. The petitioner challenged this demand under Article 226 of the Constitution of India. The primary contention was that the demand for differential premium was unjustified, and the petitioner should only be liable to pay standard transfer charges.

2. Interpretation of Circulars:
The court extensively analyzed the circular dated 12th May, 1998, which laid down transfer guidelines for industrial and other plots. The circular categorized transfers into formal and non-formal transfers. The petitioner argued that the transfer should be considered an involuntary transfer due to being under the orders of the Recovery Officer, thus only necessitating payment of transfer charges. However, the court found that the transfer did not fall under the category of involuntary transfers as the petitioner voluntarily participated in the bid.

3. Classification of Transfer:
The circular distinguished between formal and non-formal transfers. In this case, since the original lessee had not constructed at least 10% of the permissible FSI of the plot area, the transfer was classified as a non-formal transfer. As per the circular, for non-formal transfers where construction criteria are not met, a 30% differential premium is applicable. The court determined that the demand for the 30% differential premium was in accordance with the policy outlined in the circular dated 12th May, 1998.

4. Applicability of Circulars:
The petitioner attempted to rely on a circular dated 12th December, 2011, which was issued as a clarification to the circular dated 12th May, 1998. However, the court noted that the clarification applied only to applications received after 12th August, 2011, while the petitioner's application was submitted prior to this date. Therefore, the court upheld the demand for the 30% differential premium as per the policy reflected in the original circular of 12th May, 1998.

5. Final Decision:
After considering the arguments and the provisions of the circulars, the court concluded that the demand for the 30% differential premium was valid and in line with the policy set forth in the circular dated 12th May, 1998. The court rejected the petitioner's challenge and upheld the first respondent's right to demand the specified premium as a condition for the transfer of the industrial plot.

This detailed analysis of the judgment highlights the key issues, arguments presented by both parties, and the court's reasoning leading to the final decision regarding the demand for a differential premium for the transfer of the industrial plot.