Sushil Kumar Nagrath v. State of U.P. others) vide order dated

Hon'ble Pritinker Diwaker,Chief Justice Hon'ble Ashutosh Srivastava,J.

1. Heard Shri Naveen Sinha, learned Senior Counsel assisted by Shri Rohan Gupta, learned counsel for the petitioner and Shri Praveen Kumar, learned counsel for the YEIDA/respondent No. 2 and Shri Kaushalendra Nath Singh, learned counsel for respondent No. 3. Shri A. K. Goyal, learned Addl. Chief Standing Counsel has appeared for the State-respondent No. 1.

2. The writ petition has been filed assailing the legality and validity of the Office Memorandum dated 20.11.2017 as also the consequential Demand Order dated 18.10.2023 issued by the respondent No. 2 (YEIDA) to the extent it seeks to levy transfer charges to the tune of Rs.1,13,88,69,300/- upon the petitioner. A consequential relief in the nature of mandamus directing YEIDA/respondent No. 2 to issue a final NOC for approval of maps from NOIDA Authority/respondent No. 3 in favour of the petitioner has also been sought.

3. It is the case of the writ petitioner that it is a renowned real estate developer and a sub lessee of Jai Prakash Associates Ltd. for development to the land demised in commercial Plot No. C3-7, area 71,627 square meters situate inside the Jaypee Greens Wish Town, Sector 129, Noida, Gautam Budh Nagar. The respondent No. 2, YEIDA entered into a Concession Agreement dated 7.2.2003 with Jai Prakash Industries Ltd. to develop, design, engineer, finance, procure, construct, manage, operate and maintain the Taj Expressway with the right to collection and retention of toll etc., and also develop 25 million square meters of land along the proposed expressway.

4. The Concession Agreement provided under Clause 4.3 (d) that the Concessionaire would be entitled to sub lease /end user in its sole discretion without any further consent or approval or payment of any charges/fee etc., to the respondent No. 2. Subsequent, to the execution of the Concession Agreement dated 7.2.2003, Jaypee Infratech Ltd., was incorporated as a Special Purpose Vehicle Company (SPV) for carrying out the development as per the Concession Agreement. A sub lease dated 28.8.2023 was executed by Jaypee Infratech Ltd., in favour of Jai Prakash Associates Ltd. Thereafter, Jai Prakash Associates Ltd. further executed a sub lease dated 29.8.2023 in favour of the petitioner for the Plot No. C3- J, area 71,627 square meters. The petitioner applied for NOC from YEIDA/respondent No. 2 for approvals of the sanction of Building Plans from NOIDA Authority on 4.9.2023 and 6.9.2023, but the YEIDA Authority instead of issuing the NOC has raised the impugned demand for depositing the transfer charges. The impugned communication has been addressed to Jay Prakash Associates Ltd., however, the liability to pay the same has been fastened upon the petitioner.

5. Learned counsel for the petitioner has assailed the impugned demand on the ground that there is neither any provision of law that empowers YEIDA to levy the transfer charges. The petitioner's rights are fully protected by the Concession Agreement dated 7.2.2023 and the lease deed dated 15.2.2008, the impugned Office Memo dated 20.11.2017 is merely an ineffective administrative order passed by YEIDA and cannot take away the rights of the petitioner under the contract, the office Memo has no statutory force. It is, thus, prayed that the impugned demand is liable to be interfered with by this Court and the writ petition is liable to be allowed, as prayed. Reliance has been placed upon certain orders of co-ordinate Benches passed in Writ-C No. 8243 of 2019, Writ-C No. 33724 of 2019 and Writ-C No. 13197 of 2020.

6. The writ petition has been opposed by the counsels appearing for the respondent Nos. 2 & 3 by submitting that similar controversy as raised in the instant writ petition has already been decided by a co-ordinate Bench of this Court passed in Writ-C No. 21540 of 2020 (Sushil Kumar Nagrath versus State of U.P. & others) vide order dated 20.1.2021 wherein it has been held that even though transfer charges may not be having a statutory flavor in its traditional sense, 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. It is further submitted that recently, this Court relying upon the aforesaid decision dated 20.1.2021 has dismissed Writ Petition (C) No. 37344 of 2023 vide order dated 30.10.2023. It is, accordingly, submitted that the writ petition warrants dismissal at the threshold.

7. Shri Naveen Sinha, learned Senior Counsel appearing for the petitioner has attempted to draw a distinction and submits that the decisions relied upon by counsels for the contesting respondents shall not apply inasmuch as in those cases the condition for charging the transfer charges was embodied in the lease deed and sub lease deed which is not the case at hand. He submits that in the case at hand, it is rather otherwise. There was a specific condition in the Concession Agreement dated 7.2.2023 i.e. Clause 4.3 (d) and 4.3 (e) which clearly provides that transfer fee shall not be charged. In the wake of such a condition embodied in the lease document, the same would be binding and as such, the impugned Demand is completely unjustified.

8. We have heard the learned counsel for the respective parties and have perused the record.

9. From the records, it transpires that under the lease deed dated 15.2.2008, the Taj Expressway Industrial Development Authority (lessor), now YEIDA/respondent No. 2 demised on to the lessee (Jaypee Infratech Ltd.) (lessee) land ad-measuring 28.586 hectares in village Wazidpur for a period of 90 years. Para 4 of the lease deed (filed as Annexure-2 to the writ petition) gave the lessee unfettered right to sub lease the whole or any part of the demised land without requiring any consent or approval of or payment of any additional charges, transfer fee, premiums etc., to the lessor or any other relevant authority. The sub lessee of the demised land has also been given right to execute sub-leases and as such, multiple sub-leases of the demised land is permissible. However, the clause is silent as regards the execution of paying transfer fee so far as the sub lessee is concerned. Para 4 of the Lease deed dated 15.2.2008 is quoted hereunder:- "4. The Lessee shall have unfettered right to sub-lease the whole or any part of the Demised Land, whether developed or undeveloped, and whether by way of plots of constructed properties or give on leave and license or otherwise dispose of its interest in the Demised Land or part thereof /permit to any person in any manner whatsoever, without requiring any consent or approval of or payment of any additional charges, transfer fee premiums etc. to the Lessor or to any other relevant authority. The sub- lessees of the Demised Land shall also be entitled to provide the Demised Land on sub-lease and hence, there can be subsequent multiple sub-leases of the Demised Land in smaller parts. The Lessee/sub-lessee/licensee, as the case may be, shall however notify to the Lessor the details of all such sub-lease (s)/leave and licence (s)/disposal. Till the time such notification is made to the Lessor, the Lessor/sub- lessor/licensor, as the case may be, shall continue to remain liable to pay the Rent Amount along with the Lessee. The quantum of Rent Amount payable to the Lessor shall remain unaffected by any such sub-lease (s)/leave and licence(s). It is hereby further clarified that the total Rent Amount payable by the Lessee and various sub- leases/transferees shall be to the maximum extent of Rs.100.00 (Rupees One Hundred) per hectare per year (various sub-lessees/transferees paying pro-rata rent for the portion of land held by them). In case the Lessee considers it appropriate, tripartite agreement (s) in connection with sub-lease (s)/leave and licence (s) may be executed between the Lessor, the Lessee and the sub-lessee(s)/licensee(s) on the same terms and conditions as contained herein. Each sub-lease and/or transfer shall after the execution thereof be notified by the transferor or the sub-lessor/sub-lessee to Lessor and till such time, it is so notified, the transferor/sub-lessor shall remain jointly and severally liable along with the transferor/sub-lessee for payment of lease rent to Lessor."

10. We further find that the demised plot No. C3-J, Sector 129, Noida having an area of 71,627 square meters (17.69 acres) has been sub leased to Jai Prakash Associates Ltd. under sub lease dated 28.8.2023 filed as Annexure-3 to the writ petition. Para 8 of the sub lease is relevant for the purposes of the present case and is being quoted hereunder:- "8. The Sub-Lessee shall be entitled to transfer the Demised Plot or the buildings constructed on the Demised Plot on further Sub-lease(s) within the terms of this Sub- Lease Deed as per applicable laws. The Sub-Lessee shall not be entitled to sub-divide the Demised Plot except with the prior permission of the NOIDA and/or YEA, as applicable for grant of such permissions, and Sub-Lessee bearing all charges in relation to the sub-division of the Demised Plot, if any. The Sub-Lessee or the subsequent Sub-lessees as the case may be shall notify to the NOIDA/YEA and the Sub-Lessor the details of such Sub-leases and provide copies of such transfer/sub lease deeds to the NOIDA/YEA and the Sub-Lessor or any other authority as may be specified by NOIDA/YEA and/or the Sub-Lessor. In case, Sub-lessee transfer the said Demised Plot, no transfer / NOC charges shall be payable to the Sub-Lessor. However, in case subsequent Sub-lessee, transfer the demised plot to any third party, then in that event the Sub-Lessor is entitled to charge the NOC/Transfer charges as per its policy and subsequent Sub-lessee/third party shall be liable to pay the same to the Sub-lessor."

11. We further find that the demised Plot No. C3-J, Sector 129, Noida having an area of 71,627 square meters (17.69 acres) has been further sub leased to the petitioner M/s Gaursons Mega Project Pvt. Ltd under sub lease deed dated 29.8.2023 which has been filed as Annexure-4 to the writ petition. Clauses 18 and 24 are relevant and are being quoted herewith:- "18. The Second Party shall upon completion of the project over the said Plot, be entitled to obtain Completion/Occupancy Certificate from NOIDA/ YEIDA/ competent authority directly at its own cost without any reference to the First Party. However, the First Party shall extend all its co-operation to the Second Party to get the Completion/ Occupancy Certificate without being liable in this regard.

24. All costs, stamp duty, charges, expenses, registration fees etc., payable on or in respect of execution and registration of this Deed shall be borne and paid solely by the Second Party."

12. From the perusal of the clause 8 of the first sub lease executed between Jaypee Infratech Ltd., and Jai Prakash Associates Ltd., it is more than apparent that the ground urged by the learned counsel for the petitioner that the transfer charges is not leviable upon the petitioner, does not merit consideration.

13. In view of the above, we find no merit in the writ petition and it is, accordingly, dismissed. No order as to costs. Order Date :- 16.11.2023 Ravi Prakash (Ashutosh Srivastava, J.) (Pritinker Diwaker, CJ) RAVI PRAKASH RAVI PRAKASH High Court of Judicature at Allahabad High Court of Judicature at Allahabad

Hon'ble Pritinker Diwaker,Chief Justice Hon'ble Ashutosh Srivastava,J.

1. Heard Shri Naveen Sinha, learned Senior Counsel assisted by Shri Rohan Gupta, learned counsel for the petitioner and Shri Praveen Kumar, learned counsel for the YEIDA/respondent No. 2 and Shri Kaushalendra Nath Singh, learned counsel for respondent No. 3. Shri A. K. Goyal, learned Addl. Chief Standing Counsel has appeared for the State-respondent No. 1.

2. The writ petition has been filed assailing the legality and validity of the Office Memorandum dated 20.11.2017 as also the consequential Demand Order dated 18.10.2023 issued by the respondent No. 2 (YEIDA) to the extent it seeks to levy transfer charges to the tune of Rs.1,13,88,69,300/- upon the petitioner. A consequential relief in the nature of mandamus directing YEIDA/respondent No. 2 to issue a final NOC for approval of maps from NOIDA Authority/respondent No. 3 in favour of the petitioner has also been sought.

3. It is the case of the writ petitioner that it is a renowned real estate developer and a sub lessee of Jai Prakash Associates Ltd. for development to the land demised in commercial Plot No. C3-7, area 71,627 square meters situate inside the Jaypee Greens Wish Town, Sector 129, Noida, Gautam Budh Nagar. The respondent No. 2, YEIDA entered into a Concession Agreement dated 7.2.2003 with Jai Prakash Industries Ltd. to develop, design, engineer, finance, procure, construct, manage, operate and maintain the Taj Expressway with the right to collection and retention of toll etc., and also develop 25 million square meters of land along the proposed expressway.

4. The Concession Agreement provided under Clause 4.3 (d) that the Concessionaire would be entitled to sub lease /end user in its sole discretion without any further consent or approval or payment of any charges/fee etc., to the respondent No. 2. Subsequent, to the execution of the Concession Agreement dated 7.2.2003, Jaypee Infratech Ltd., was incorporated as a Special Purpose Vehicle Company (SPV) for carrying out the development as per the Concession Agreement. A sub lease dated 28.8.2023 was executed by Jaypee Infratech Ltd., in favour of Jai Prakash Associates Ltd. Thereafter, Jai Prakash Associates Ltd. further executed a sub lease dated 29.8.2023 in favour of the petitioner for the Plot No. C3- J, area 71,627 square meters. The petitioner applied for NOC from YEIDA/respondent No. 2 for approvals of the sanction of Building Plans from NOIDA Authority on 4.9.2023 and 6.9.2023, but the YEIDA Authority instead of issuing the NOC has raised the impugned demand for depositing the transfer charges. The impugned communication has been addressed to Jay Prakash Associates Ltd., however, the liability to pay the same has been fastened upon the petitioner.

5. Learned counsel for the petitioner has assailed the impugned demand on the ground that there is neither any provision of law that empowers YEIDA to levy the transfer charges. The petitioner's rights are fully protected by the Concession Agreement dated 7.2.2023 and the lease deed dated 15.2.2008, the impugned Office Memo dated 20.11.2017 is merely an ineffective administrative order passed by YEIDA and cannot take away the rights of the petitioner under the contract, the office Memo has no statutory force. It is, thus, prayed that the impugned demand is liable to be interfered with by this Court and the writ petition is liable to be allowed, as prayed. Reliance has been placed upon certain orders of co-ordinate Benches passed in Writ-C No. 8243 of 2019, Writ-C No. 33724 of 2019 and Writ-C No. 13197 of 2020.

6. The writ petition has been opposed by the counsels appearing for the respondent Nos. 2 & 3 by submitting that similar controversy as raised in the instant writ petition has already been decided by a co-ordinate Bench of this Court passed in Writ-C No. 21540 of 2020 (Sushil Kumar Nagrath versus State of U.P. & others) vide order dated 20.1.2021 wherein it has been held that even though transfer charges may not be having a statutory flavor in its traditional sense, 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. It is further submitted that recently, this Court relying upon the aforesaid decision dated 20.1.2021 has dismissed Writ Petition (C) No. 37344 of 2023 vide order dated 30.10.2023. It is, accordingly, submitted that the writ petition warrants dismissal at the threshold.

7. Shri Naveen Sinha, learned Senior Counsel appearing for the petitioner has attempted to draw a distinction and submits that the decisions relied upon by counsels for the contesting respondents shall not apply inasmuch as in those cases the condition for charging the transfer charges was embodied in the lease deed and sub lease deed which is not the case at hand. He submits that in the case at hand, it is rather otherwise. There was a specific condition in the Concession Agreement dated 7.2.2023 i.e. Clause 4.3 (d) and 4.3 (e) which clearly provides that transfer fee shall not be charged. In the wake of such a condition embodied in the lease document, the same would be binding and as such, the impugned Demand is completely unjustified.

8. We have heard the learned counsel for the respective parties and have perused the record.

9. From the records, it transpires that under the lease deed dated 15.2.2008, the Taj Expressway Industrial Development Authority (lessor), now YEIDA/respondent No. 2 demised on to the lessee (Jaypee Infratech Ltd.) (lessee) land ad-measuring 28.586 hectares in village Wazidpur for a period of 90 years. Para 4 of the lease deed (filed as Annexure-2 to the writ petition) gave the lessee unfettered right to sub lease the whole or any part of the demised land without requiring any consent or approval of or payment of any additional charges, transfer fee, premiums etc., to the lessor or any other relevant authority. The sub lessee of the demised land has also been given right to execute sub-leases and as such, multiple sub-leases of the demised land is permissible. However, the clause is silent as regards the execution of paying transfer fee so far as the sub lessee is concerned. Para 4 of the Lease deed dated 15.2.2008 is quoted hereunder:- "4. The Lessee shall have unfettered right to sub-lease the whole or any part of the Demised Land, whether developed or undeveloped, and whether by way of plots of constructed properties or give on leave and license or otherwise dispose of its interest in the Demised Land or part thereof /permit to any person in any manner whatsoever, without requiring any consent or approval of or payment of any additional charges, transfer fee premiums etc. to the Lessor or to any other relevant authority. The sub- lessees of the Demised Land shall also be entitled to provide the Demised Land on sub-lease and hence, there can be subsequent multiple sub-leases of the Demised Land in smaller parts. The Lessee/sub-lessee/licensee, as the case may be, shall however notify to the Lessor the details of all such sub-lease (s)/leave and licence (s)/disposal. Till the time such notification is made to the Lessor, the Lessor/sub- lessor/licensor, as the case may be, shall continue to remain liable to pay the Rent Amount along with the Lessee. The quantum of Rent Amount payable to the Lessor shall remain unaffected by any such sub-lease (s)/leave and licence(s). It is hereby further clarified that the total Rent Amount payable by the Lessee and various sub- leases/transferees shall be to the maximum extent of Rs.100.00 (Rupees One Hundred) per hectare per year (various sub-lessees/transferees paying pro-rata rent for the portion of land held by them). In case the Lessee considers it appropriate, tripartite agreement (s) in connection with sub-lease (s)/leave and licence (s) may be executed between the Lessor, the Lessee and the sub-lessee(s)/licensee(s) on the same terms and conditions as contained herein. Each sub-lease and/or transfer shall after the execution thereof be notified by the transferor or the sub-lessor/sub-lessee to Lessor and till such time, it is so notified, the transferor/sub-lessor shall remain jointly and severally liable along with the transferor/sub-lessee for payment of lease rent to Lessor."

10. We further find that the demised plot No. C3-J, Sector 129, Noida having an area of 71,627 square meters (17.69 acres) has been sub leased to Jai Prakash Associates Ltd. under sub lease dated 28.8.2023 filed as Annexure-3 to the writ petition. Para 8 of the sub lease is relevant for the purposes of the present case and is being quoted hereunder:- "8. The Sub-Lessee shall be entitled to transfer the Demised Plot or the buildings constructed on the Demised Plot on further Sub-lease(s) within the terms of this Sub- Lease Deed as per applicable laws. The Sub-Lessee shall not be entitled to sub-divide the Demised Plot except with the prior permission of the NOIDA and/or YEA, as applicable for grant of such permissions, and Sub-Lessee bearing all charges in relation to the sub-division of the Demised Plot, if any. The Sub-Lessee or the subsequent Sub-lessees as the case may be shall notify to the NOIDA/YEA and the Sub-Lessor the details of such Sub-leases and provide copies of such transfer/sub lease deeds to the NOIDA/YEA and the Sub-Lessor or any other authority as may be specified by NOIDA/YEA and/or the Sub-Lessor. In case, Sub-lessee transfer the said Demised Plot, no transfer / NOC charges shall be payable to the Sub-Lessor. However, in case subsequent Sub-lessee, transfer the demised plot to any third party, then in that event the Sub-Lessor is entitled to charge the NOC/Transfer charges as per its policy and subsequent Sub-lessee/third party shall be liable to pay the same to the Sub-lessor."

11. We further find that the demised Plot No. C3-J, Sector 129, Noida having an area of 71,627 square meters (17.69 acres) has been further sub leased to the petitioner M/s Gaursons Mega Project Pvt. Ltd under sub lease deed dated 29.8.2023 which has been filed as Annexure-4 to the writ petition. Clauses 18 and 24 are relevant and are being quoted herewith:- "18. The Second Party shall upon completion of the project over the said Plot, be entitled to obtain Completion/Occupancy Certificate from NOIDA/ YEIDA/ competent authority directly at its own cost without any reference to the First Party. However, the First Party shall extend all its co-operation to the Second Party to get the Completion/ Occupancy Certificate without being liable in this regard.

24. All costs, stamp duty, charges, expenses, registration fees etc., payable on or in respect of execution and registration of this Deed shall be borne and paid solely by the Second Party."

12. From the perusal of the clause 8 of the first sub lease executed between Jaypee Infratech Ltd., and Jai Prakash Associates Ltd., it is more than apparent that the ground urged by the learned counsel for the petitioner that the transfer charges is not leviable upon the petitioner, does not merit consideration.

13. In view of the above, we find no merit in the writ petition and it is, accordingly, dismissed. No order as to costs. Order Date :- 16.11.2023 Ravi Prakash (Ashutosh Srivastava, J.) (Pritinker Diwaker, CJ) RAVI PRAKASH RAVI PRAKASH High Court of Judicature at Allahabad High Court of Judicature at Allahabad