High Court · 2025 on 18 Apr 2025

Judgment

1. Heard Shri Navin Sinha, learned Senior Advocate assisted by Shri Rohan Gupta, for the petitioner, Shri M. C. Chaturvedi, learned Additional Advocate General for the respondent No.2 and learned Standing Counsel. Notice had been accepted by Shri Kaushlendra Singh on behalf of respondent No.3 .

2. This petition was heard and judgment was reserved. Subsequently, the matter was listed for further hearing on 13.02.2025 whereupon after hearing learned counsel for the parties, the judgment was reserved afresh and was ultimately ordered for delivery of judgment on 18.03.2025, when the following order was passed:- “1. The judgment had been reserved in the instant case.

2. The Court has been apprised of the fact that challenging an order passed by Yamuna Expressway Industrial Development Authority (YEIDA) cancelling the lease granted in favour of M/s Jai Prakash Associates Limited, Writ-C No. 6049 of 2020, along with three other writ petitions, has been decided by a co-ordinate Bench of this Court by a detailed judgment dated 10.03.2025.

3. Prima facie, it appears that decision in the afore-noted bunch of writ petitions may have a direct bearing in this petition as well.

4. Accordingly, we direct this petition to be listed for further hearing on 04.04.2025 in Court.”

3. The matter was heard on 04.04.2025. Upon hearing learned counsel for the parties, it transpires that the instant matter was in no way connected with the dispute involved in Writ C No. 6049 of 2020 and its three connected writ petitions as the land involved in these petitions were entirely different.

4. The instant petition seeks a writ of certiorari for quashing the demand of Rs. 1,13,88,69,300/- as transfer fee for transfer of land by a sub-lease executed by Jaiprakash Associates Ltd (JAL) in favour of the petitioner and a mandamus directing respondent No.2 to issue a No Objection Certificate which is required for obtaining sanction of the plans, maps etc., for raising constructions, submitted by the petitioner to respondent No.3. Also under challenge is the Office Memorandum 61/22 dated 20.11.2017 which is based on a decision taken in the 61st Meeting of the Board of the respondent No.2

5. The claim of the petitioner is primarily based upon a Concession Agreement dated 07.03.2003 entered into between the Taj Expressway Industrial Development Authority (TEA), now Yamuna Expressway Industrial Development Authority (YEIDA) and Jaiprakash Industries Limited, now known as Jaiprakash Associates Limited, (JAL) .

6. It is stated that the agreement was to develop, design, engineer, finance, procure, construct, manage, operate and maintain the Taj Expressway including collection and retention of toll etc., along with a right for development of 25 million sq-meters of land along the proposed Expressway for commercial, amusement, industrial and residential use

7. Admittedly, for implementation of the concession agreement, a Special Purpose Vehicle (SPV) namely Jaypee Infratech Limited, (JIL) was incorporated as provided in Chapter VIII thereof. On 19.10.2007, a registered tripartite deed was executed assigning the rights, interests and liabilities of Jaiprakash Associates under the Concession Agreement of 2003 in favour of JIL. The signatories of this tripartite agreement/ assignment were the respondent No. 2, the Yamuna 2 Expressway Industrial Development Authority, Jaiprakash Associates Ltd. and Jaypee Industries Ltd.

8. Thereafter, on 12.02.2008, the YEIDA transferred/leased 70.637 acres of land situated in Village Wazidpur in favour of JIL (sector 129 and 134, G.B. Nagar) over which was developed Jaypee Greens Wish Town. It was then sub-leased to Jaiprakash Associates Ltd (JAL).

9. JAL, the sub-lessee of JIL, in turn, executed another sub-lease in favour of the petitioner, M/s Gaursons Mega Projects Pvt Ltd., on

29.8.2023 and information in this regard was given to the respondent No.2.

10. After the sub-lease, the petitioner applied for a NOC from the second respondent seeking approval of the plans/ sanctions of constructions and raising buildings, which sanction is to be granted by the third respondent, consequent to an NOC by the YEIDA.

11. In response to this application, the respondent No. 2 wrote letter to JAL and to the petitioner seeking compliance of a letter dated

11.10.2023 which demanded transfer fee on the said sub-lease in favour of the petitioner.

12. It is stated that such transfer fee has been levied and the same is being demanded on the basis of an Office Memorandum dated

20.11.2017, issued on the basis of Minutes of 61st Meeting of the Board of the second respondent.

The contention of learned counsel for the petitioner is that in view of clause 4.3(d) of the Concession Agreement, no transfer fee was payable on a sub-lease. Besides, there exists no statutory provision for levy of transfer fee even under the U.P. Industrial Area Development Act, 1976, enabling the second respondent to demand or levy transfer fee without framing regulations with the prior approval of the State Government. Therefore, the Office Memorandum dated

20.11.2017 is de hors the Act, 1976 and is vitiated due to non compliance also of section 6A of the Act. 3

14. It is next urged that the Office Memorandum, sans approval of the State Government, mandatorily required under Section 18 and 19 of the Act, 1976, is a bare administrative order having no statutory force.

15. It is next submitted that the Office Memorandum seeks to take away a vested right, which was assigned by the assignment deed of 2007, having been granted under the Concession Agreement dated

07.02.2003 as also the lease deed dated 15.02.2008 and, that too, without any opportunity of hearing. Moreover, the demand based on the Office Memorandum is hit by the principles of legitimate expectation and estoppel.

16. It is lastly submitted that the Concession Agreement of

07.02.2003 protects the rights of sub-lessees and end users as it has been stated therein that they will not to be affected by termination of the agreement itself. These concessions, under the agreement of

07.02.2003 were the consideration provided for construction of the Yamuna Expressway. No cost of the construction of the Yamuna Expressway was borne by the respondent No. 2.

17. The second respondent, in its counter-affidavit, has admitted the concession agreement entered into by Taj Expressway Authority and Jaiprakash Industries Limited, later renamed as Jaiprakash Associates Limited (JAL).

18. It has also been admitted that as provided in the concession agreement in Chapter XVIII thereof, a Special Purpose Vehicle (SPV) namely Jaypee Infratech Limited (JIL) was incorporated and by the assignment agreement dated 09.10.2007 all rights, liabilities, interest, duties etc., under the concession agreement were assigned in favour of JIL. It is also admitted that JIL had executed a sub-lease of Master Plan Commercial Plot No.C3-J at Sector 129, Jaypee Greens Wish Town, Noida in favour of Jaiprakash Associates Limited (JAL) on 28.08.2023 for a period of 90 years and the second respondent was intimated about the same. In turn, Jaiprakash Associates Limited (JAL) executed a 4 further sub-lease on 29.08.2023 in favour of the petitioner. This sub- lease was also of Plot No. C3-J and measured approximately 71627 sq. meter and was registered on 29.08.2023. The petitioner, thereafter, applied for an NOC from the second respondent for obtaining approval of sanctions of Building Drawings/ maps from respondent no.3 on

04.09.2023 and 06.09.2023. It is thereafter that the impugned communications have been issued by the second respondent seeking transfer fees as a pre-condition for further proceedings for the transfer and for issuance of an NOC to the petitioner. The communications dated 11.10.2023 and 18.10.2023 have been issued to Jaiprakash Associates Limited (JAL) and the petitioner, respectively.

19. A perusal of Annexure 7 to the writ petition reveals that the letter addressed to Jaiprakash Associates (JAL) was replied by letter dated

13.10.2023 stating that the requirements mentioned in the letter dated

11.10.2023 are to be fulfilled by M/S Gaursons Mega Projects Pvt. Ltd., the petitioner and it was requested that the demand of transfer charges and additional compensation, if any, may be informed to M/S Gaursons Mega Projects Pvt. Ltd., the petitioner.

20. The case of the respondents is that the Government Order dated

29.12.2007 titled “POLICY FOR PLANNED DEVELOPMENT ALONG TAJ EXPRESSWAY” took a policy decision to levy charges on transfer of lease hold interest by original lessee namely second or subsequent transfers and also empowered the respondent no.2 to decide on issues not covered under the said policy and or regulations of Taj Expressway Authority. For this purpose, reliance has been placed upon Clause 3.6.6 and 3.6.7 of the said Government Order, which read as follows:-

3. Terms and Conditions …..

3.6.6. Quote

3.6.7. Subject to the provisions of Master Plan and Regulations of Tea:- (I) The allottee shall be entitled to sub-lease the land without requiring any consent or approval of TEA or any other authority, except for the land for 5 the Core Activity, for which prior approval of TEA will be required. There can be multiple sub-leases for the land in smaller parts. (ii) For the 1st transfer of land through sub-lease, no additional charges or transfer premium shall be payable by the Allottees to TEA or any other authority. However, for subsequent transfers, additional payment shall be required to be made to TEA at the rates specified in regulations of TEA.

21. Thus the argument of the respondents is that the first sub-lease executed by the SPV namely Jaypee Infratech Limited did not attract any levy of transfer charges but such transfer charges were leviable on all subsequent sub-leases.

22. It is also the case of the respondent no.2 that in exercise of powers conferred by clause 3.6.6 of the Government Order dated

29.12.2007, the Board took a decision in its 61st Board Meeting framing a policy for levy of transfer charges, wherein it was decided as follows:- “in relation to builder townships/group housing, in the category of 25-250 acre, and in relation to the land in L.F.D. and SEZ area, the prevailing market rate or circle rate, whichever is higher, 10% of the value has to be paid as transfer charges.”

23. It is also admitted that since the policy of the State Government and the regulations framed by the respondent no.2 do not provide the rates and modalities for levy of transfer charges, such decision was taken in the 61st Board Meeting held on 04.09.2017, which has been set-out in the Office Memorandum dated 20.11.2017. The Office Memorandum impugned has been issued in exercise of power conferred by clause 3.6.6 of the Policy/GO of 2007 which empowers the respondent No. 2 to take a decision on matters not provided in the G.O itself or the regulations.

24. It is also submitted that the first sub-lease/transfer made by Jaypee Infratech was not leviable to any transfer charges but all subsequent transfers are liable to such levy. For this purpose, reference has been made to clause 4 of the Annexure 2 to the writ petition, the lease deed executed by the Taj Expressway Industrial Development 6 Authority in favour of Jaiprakash Infratech Limited dated 15.02.2008 which reads as follows:- “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 or 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 licenses) / disposals. 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-leases) / leave and licenses). It is hereby further clarified that the total Rent Amount payable by the Lessee and various sub-lessees / 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-leases) / leave and license(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 fill such time, it is so notified, the transferor / sub-lessor shall remain jointly and severally liable along in the transferee/sub-lessee for payment of lease rent to Lessor.…………...” 7 Reference has also been made to clauses c, d and e of Clause 4.3 of the Concession Agreement which reads as follows:- “c. The sole premium of the transferred land shall be equivalent to the acquisition cost plus a lease rent of Rs. 100.CO (Rupees one hundred) only par hectare per year. The acquisition cost. shall be the actual compensation paid to the land owners without any additional charge and shall be payable by the Concessionaire as per applicable rules. The rent shall be payable annually for 90 (Ninety) years from the date of transfer of land. d. The Concessionaire shall be entitled to further sub-lease developed / undeveloped land to sub-lessees / end-users in its sole discretion without any further consent or approval or payment of any charges / fee etc. to TEA or any other relevant authority. e. sub-lease of part of the land by the Concessionaire, the same can be transferred / assigned without requiring any consent or approval of or payment of any additional charges, transfer fee, premiums etc. to TEA or to any other relevant authority and/or there can be subsequent multiple sub-leases of the land in smaller parts. The lease rent of the respective sub-leased portion of land shall be paid by the sub-lessees / transferees to TEA directly on pro-rata basis @ Rs.

100.00 [Rupees one hundred) per hectare per year. The Concessionaire shall be required to pay lease rent to TEA for the portion of land remaining in its possession after sub-lease, on pro-rata basis at the aforesaid prescribed rate. Total lease rent paid by the Concessionaire and various sub-lessees / transferees shall be Rs.100.00 (Rupees one hundred) per hectare per year.”

25. The submission of learned counsel for the respondent is that contrary to the Concession Agreement, the master deed, executed in favour of Jaypee Infratech Ltd., (JIL) does not specifically exonerate levy of transfer charges on second or subsequent sub leases.

26. It is also contended that any subsequent change in policy by the State Government has an overriding effect on earlier policy decisions 8 as also earlier private contracts. Therefore, the Board decision overrides clauses 4.3(d) and 4.3(e) of the Concession Agreement.

27. Submission is that the expression “Law” is defined under Article 13(3) of the Constitution of India. The decision of the Board was made exercising power vested in the respondent authority under clauses 3.6.6 and 3.6.7 (ii) of the Government Order and, therefore, the demand of transfer charges by the respondent No.2 has the authority of law.

28. It is next contended that the petitioner is seeking to take undue advantage of the concession agreement to which it is not a party. In any case, the concession agreement stands superseded by the policy decision contained in Government Order read with the Board Resolution.

29. It is also contended that clause 8 of the sub-lease is being misinterpreted by the petitioner. The said clause of the sub-lease reads as follows:- “8. The Sub-Lessee shall be entitled to transfer the Demised Plot or the buildings constructed on the Demised Plot on further Sub-leases) within the terms of this Sub-Lease Deed as per applicable laws. The Sub-Lessee shall not be entitled to sub-divide the Demised 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.”

30. It is also the argument of Shri M.C. Chaturvedi, learned Additional Advocate General that the Government Order 29.12.2007 is, in fact, a Rule promulgated under Section 18 of the U.P. Industrial 9 Area Development Act, 1976, the Board decision was essentially a policy decision taken in the 61st Board meeting and this decision derived its power from the Government Order, approved by the respondent No.1 in accordance with Section 18 of the Act. Therefore, the aforesaid policy decision is akin to exercise of power under Section 18 of the Act.

31. It is next submitted that the respondent authority has the power to frame regulations as provided under Section 19 of the U.P. Industrial Area Development Act, 1976 and these regulations amongst other things include regulations relating to fees to be levied in the discharge by its functions. The Board Resolution merely decides the rates of transfer charges to be charged, to give effect to the power to levy transfer charges, approved via the Government Order. The Board decision, therefore, is to be deemed to be exercise of power conferred by section 19 (2)(e) of the UP Industrial Area Development Act, 1976.

32. It is next contented that the transfer charge demanded is reasonable and in public interest, since it is essential for ensuring the capacity of the second respondent to contribute towards social welfare while maintaining financial sustainability. The board decision is neither in conflict with any law nor is malafide. Moreover, the same being a policy decision, the same cannot be interfered with till such time it is de hors the provisions of the Act and the regulations. In any case, a policy decision is, in any other circumstance, beyond the scope of judicial review.

33. Shri M.C. Chaturvedi has next submitted that from constitution of the authority itself it can be seen that it is manned by Senior State Government Officials. Therefore, the resolution of the Board is, for all practical purposes, a decision by the State Government itself and this is proved by the sub-lease dated 28.08.2003 especially clause J at page 149 of the writ petition.

34. He has also submitted that no exemption has been granted on levy of transfer charges in the master deed and in the sub-lease as also 10 in the Government Order dated 03.06.2007. He has also referred the paragraphs 30 to 33 of the counter-affidavit in support of his contentions.

35. From the submissions made on behalf of respondent No.2 what clearly emerges is that the Board Resolution, which is the basis of the claim for transfer fee, is a policy decision taken while exercising powers conferred by the Government Order of 29.12.2007. The same would, therefore, amount to exercise of rule making/regulation making power which the Board possesses. However, on a pointed query by the Court, Shri M.C. Chaturvedi did concede that there is no formal approval by the State government of the resolution of the 61st Board Meeting or the impugned office memorandum. He has also admitted that no regulations have been framed under Section 19(1) of the U.P. Industrial Development Act but has submitted that the same is a mere irregularity and would not vitiate the demand raised by the respondents.

36. In rejoinder Shri Navin Sinha submitted that even if it is accepted that policy dated 29.12.2007 is enforceable without approval of the State Government, the same is not confined only to Special Development Zone (SDZ) to which alone the petitioner has concern. It is general in nature and applies to all zones. It cannot, therefore, override the clauses of the Concession Agreement which are specific to the petitioner. He has also referred to clause 7.2 of the Concession Agreement especially paragraph 1 of page 57 which talks of applicable laws and clause d of page 66 of the paper book. He has also stated that on 19.10.2007, the assignment deed was executed by Jaiprakash Associates in favour of Jaypee Infratech whereby all rights, liabilities etc., granted to Jaiprakash Associates by the Concession Agreement stood assigned to Jaypee Infratech.

37. We have considered the submissions made by learned counsel for the parties and perused the record. 11

38. It is nobody‘s case that the rule making power under section 18 of the UP Industrial Area Development Act, 1976 is not with the State Government. Section 19 gives the Authority power to make regulations not inconsistent with the provisions of the Act, however, for implementation of a regulation, prior approval of the State Government is mandatory.

39. Sub-section (2) of section 19 amongst others and especially in clause-e empowers framing of regulations as regards “fees to be levied in the discharge of its function”

40. A bare reading of Section 19 and its sub-sections leaves absolutely no room for doubt that the respondent No.2 has the authority to frame regulations but such regulations necessarily require the approval of the State Government. No such approval of the decision taken in the Board meeting of 2017 is available on record. The only submission is that the decision taken in the 61st Board meeting is in exercise of jurisdiction conferred by clauses 3.6.6 and 3.6.7 of the Government Order of 2007 which was a policy decision, that has been implemented by the Board resolution and the consequential Office Memorandum. Even Office Memorandum says that policy of transfer of commercial plots is “proposed” (प्रस्तावि(cid:6)त है) [Ref. Page 204 of the writ petition].

41. Even if for the sake of argument, it is accepted that the board decision has been taken in exercise of powers conferred by the aforesaid two clauses of the Government Order of 2007, which, by itself, was a document titled as a policy, it can at best be said that the policy envisaged levy of transfer charges. This, by itself, would not give respondent No.2 the authority to specify a particular rate at which transfer charges were to be levied and to implement the same without seeking and obtaining the approval of the State Government of this rate. This is so because sub-section (2) of section 19, clause “e” uses the words “fee to be levied in the discharge of its function”.

42. “Fee” by definition is an amount payable for a service rendered. A fee, before it is charged has necessarily to be made chargeable and 12 then its rate or amount has to be specified, Both these limbs required approval of the State Government in view of section 19(2)(e) of the Act, 1976 . Even if the argument of Shri M.C.Chaturvedi is acepted there is at best an approval for charging a fee for effecting transfers, but there is no approval of the rate at which this fee is chargeable.

43. For this reason alone the resolution of the board meeting cannot be implemented as it lacks approval of the State Government, in so far as the rate at which transfer fees is being charged/demanded. Merely because a policy decision was taken to levy transfer fee by the State Government, the rate at which the fee is being charged or demanded cannot be demanded or levied without specific and categorical approval of the State Government which approval, in the case at hand, is not found to be in existence.

44. The above finding returned by this Court renders all other arguments redundant especially the argument that it was only the first sub-lease which was not liable to incur any transfer charges and that all subsequent sub-leases would incur transfer fee and nothing turns upon this issue, at least at the moment. The Court, therefore, does not deem it necessary to rule on this issue.

45. Accordingly, and in view of the above, the demand of transfer fee contained in the impugned communications dated 18.10.2023 and

11.10.2023 is hereby quashed. The court does not deem it necessary to quash the Office Memorandum No.YEA/L.D.F/S.D.Z/2017/406 dated

20.11.2017 based on the decision taken in the 61st Board meeting of the respondent No.2 dated 04.09.2017 because the same is not capable of implementation in the absence of any approval to the same by the State government.

46. Under the circumstances, a mandamus is issued to the respondent No. 2 to process the application of the petitioner for issue of a NOC without insisting upon payment of transfer charges.

47. The writ petition stands allowed to the extent indicated above. Order Date:18.4.2025 Aditya/Mayank 13