Quashing of Demand Notices: Court’s Legal Analysis

5645 OF 2015 Mathura Vrindavan Development Authority & Another…

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Appellants Versus Rajesh Sharma and Others…

Respondents WITH CIVIL APPEAL NO. 1983 OF 2023 CIVIL APPEAL NOS.5912-5915 OF 2014 CIVIL APPEAL NO.

Feeling aggrieved and dissatisfied with the impugned judgment(s) and order(s) passed by the High Court of Judicature at Allahabad passed in the respective writ petitions, by which the High Court has quashed and set aside the various demand notices raised by the respective Development Authorities and the State of UP, the Development Authorities and the State of U.P. 2 By the impugned judgment(s) and order(s), the High Court has set aside the various demand notices except the levy of development fees/charges. The dispute before the High Court by way of various writ petitions was with respect to challenge to the various demand notices by way of external/internal development charges, inspection fee/supervision fee while granting of sanction layout plan, development charges, sub-division charges, stacking charges and impact fee etc. However, the other levies/demands are concerned, i.e., other than development fees/charges, more particularly the sub- division charges etc., the High Court has set aside the said levy and/or demand notices on the ground that U.P. in exercise of powers under Section 41 of the Act, 1973 issued orders permitting the Development Authorities in the State to recover the charges /fees with respect to external/internal development charges, inspection fee/supervision fee while granting of sanction layout plan, development charges, sub-division charges, stacking charges and impact fee etc.

2 Learned counsel appearing on behalf of the respective Development Authorities, while adopting the submissions made by Shri Rana Mukherjee, learned Senior Advocate appearing on behalf of the State of U.P., have further submitted that in fact they collected the respective charges, other than development charges/fees, under the orders issued by the State Government.

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5 Insofar as reliance placed upon Section 41 of the Act, 1973 on behalf of the State as well as Development Authorities is concerned, it is submitted that in exercise of powers under Section 41 of the Act, 1973, there cannot be any levy and/or no charge/fee can be recovered, if otherwise the same is not permissible under the Act. 6

In one of the cases, learned counsel appearing on behalf of the original writ petitioner has vehemently submitted that as such though the property in question may be within the limits of the Development Authorities, however, with respect to the land which is not covered by the development plan, there cannot be any levy of even development charges/fees.

The decision of the High Court in the case of Rekha Rani (supra) quashing and setting aside the levy of development charges/fees thus is unsustainable and the same deserves to be quashed and set aside and the levy of development charges/fees, which otherwise is permissible under section 15(2-A) of the Act, 1973 is to be upheld. “Development area” has been defined in Section 2( f ) to mean any area declared to be development area under Section 3.

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The expression “engineering operations” has been defined under Section 2( h ) and includes the formation or laying out means of access to a road or the laying out of means of water supply. Definitions – In this Act unless the context otherwise requires— ( e ) ‘development’ with its grammatical variations, means the carrying out of building, engineering, mining or other operations in, on, over or under land, or the making of any material change in any building or land, and includes re-development: ( f ) ‘Development Area’ means any area declared, development area under Section 3: ( g ) ‘the Development Authority’ or ‘the Authority’, in relation to any development area, means the Development Authority constituted under Section 4 for that area: ( ggg ) ‘development fee’ means the fee levied upon a person or body under Section 15 for construction of road, drain, sewer line, electric supply and water supply lines in the development area by the Development Authority):] ( h ) ‘engineering operation’ includes the formation or laying out means of access to a road or the laying out of means of water supply: ( hh ) ‘Land use conversion charge’ means the charge levied on a person or body under section 38-A for the change of land use in the Master Plan or Zonal Plan;] ( ii ) ‘mutation charges’ means the charges, levied under

Development of the land in the developed area – (1) After the declaration of any area as development area under Section 3, no development of land shall be undertaken or carried out or continued in that area by any person or body (including a department of Government)- unless permission for such development has been obtained in writing from the [Vice-Chairman) in accordance with the provision of this Act. In the case of a department of any State Government or the Central Government, if the (Vice-Chairman) has no objections, it should inform such department of the same within three weeks from the date of receipt by it under Clause (a) of the department’s intention, and if the Vice- Chairman does ‘not make any objection within the said period, the department shall be free to carry out the proposed development; ( c ) Where the (Vice-Chairman) raises any objection to the proposed development on the ground that the development is not conformity with any Master Plan or Zonal Development Plan prepared or intended to be prepared by it, or on any other ground, such department or the local authority, as the case be, shall— ( i ) either make necessary modifications in the proposal development to meet the objections raised by the [Vice- Chairman] or ( ii ) submit the proposals for development together with the objections raised by the [Vice-Chairman] to the State Government for decision under Clause (d) ( d ) The State Government, on receipt of proposals for development together with the objections of the (Vice- Chairman) may either approve the proposals with or without modifications or direct the department or the local authority, as the case may be, to make such modification as proposed by the Government and the decision of the State Government shall be final: the development of any land begun by any such department or subject to the provisions of Section 59 by any such local authority before the declaration referred to in Sub-section (1) may be completed by that department or local authority with compliance with the requirement of Sub-sections (1) and (2). (2) If in, or in connection with, the exercise of its powers and discharge of its functions by the [Authority, the Chairman or the Vice-Chairman) under this Act any dispute arises between the authority, the Chairman or the Vice-Chairman) and the State Government the decision of the State Government on such dispute shall be final. (3) The State Government may, at any time, either on its own motion or on application made to it in this behalf, call for the records of any case disposed of or order passed by the [Authority or the Chairman) for the purpose of satisfying itself as to the legality or propriety of any order passed or direction issued and may pass such order or issue such direction in relation thereto as it may think fit: Provided that the State Government shall not pass an order prejudicial to any person without affording such person a reasonable opportunity of being heard.

Kshetra Panchayata Panchayat Adhiniyam, 1961] and of the Uttar Pradesh (Regulation of Building Operations) Act, 1958 and the Uttar Pradesh Avas-Evam Vikas Parishad Adhinlyam, Zil [except in relation to those housing or Improvement schemes which have either been notified under Section 32 of Uttar Pradesh Avas Evam Vikas Parishad Adhiniyam, 1965 before the declaration of the area comprised therein as development area or which having been notified under Section 28 of the said Adhiniyam before the said declarations are bye-thereafter approved by the State Government for continuance under the said Adhiniyam or which are initiated after such declaration with the approval of the State Government, hereinafter in this section referred to as Special Avas Parishad Schemes] shall in respect of a development area remain suspended and Sub-section (3) of Section 139 of the Uttar Pradesh [Municipal Corporation Act, 1959) shall have effect as if the requirement as to constitution of a Development Fund were suspended with effect from the date of constitution of the Authority for that area and until the dissolution of such Authority and the provisions of [Sections 6 and 24 of the United Provinces General Clauses Act, 1904) shall apply, in relation to such suspension as if the suspension amounted to repeal of the said enactment by this Act, and in particular, all proceedings relating to acquisition of land and interest in land for Improvement schemes under the said enactment pending immediately before such suspension before any court, tribunal or authority may be continued and concluded in accordance with the provisions of the said enactment (which shall mutatis mutandis apply) as if those provisions were not suspended and the powers, for doing anything which could but for such suspension of the Uttar Pradesh (Regulation of Building not Operations) Act, 1958, be done by the Prescribed Authority and controlling authority and which can, after such suspension be done by virtue of the application of Section 6 of the Uttar Pradesh General Clause Act, 1904, shall vest in the Vice-Chairman and the Chairman respectively). ( b ) The operation of the provisions suspended by virtue of Clause (a) shall revive upon the dissolution of the Authority under Section 58, the provisions of [Sections 6 and 24 of the United Provinces General Clauses Act, 1904] shall apply in relation to the cesser of application of the corresponding provisions of this Act as if such cesser amounted to a repeal of these provisions of this Act by an Uttar Pradesh Act.

(6) Notwithstanding the provisions of Sub-sections (1) and (2) ( a ) anything done or any action taken (including any notification issued or order or scheme made or permission granted) under any of the enactments referred to in Sub-sections (1) and shall, so far as it is not inconsistent with the provisions of the Act continue in force and be deemed to have been done or take under the provisions of this Act unless and until it is superseded by anything done or any action taken under the provisions this Act; Therefore, as per Section 15(2-A) of the Act, 1973, the Development Authority can levy only those charges, namely, development fees, mutation charges, stacking fees and water fees.

Case Title: MATHURA VRINDAVAN DEVELOPMENT AUTHORITY Vs. RAJESH SHARMA (2023 INSC 448)

Case Number: C.A. No.-005645-005645 / 2015

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