# 7 S.C.R. 863 TATA MOTORS LTD v. TALATHI OF VILLAGE CHIKHALI AND ORS

- **Citation:** [2011] 7 S.C.R. 863
- **Court:** Supreme Court of India
- **Decided:** 2010-07-04
- **Case number:** Civil Appeal No. 10187 of 2010
- **Bench:** R.V. Raveendran, P. Sathasivam, A.K. Patnaik
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/7-s-c-r-863-tata-motors-ltd-v-talathi-of-village-chikhali-and-ors-27871
- **Pages:** 26

## Headnote

.
A
B
Maharashtra Land Revenue Code, 1966: ss.39, 168 -
Non-agricultural cess - Liability to pay - Lease of land granted c
to the appellant by the Pimpri-Chinchwad New Development
Authority - Demand on the appellant for payment of nonagricultural cess - Challenged by appellant on the ground
that it was a government lessee and, therefore not liable to
pay the amount demanded and in the alternate, appellant D
took plea that it was tenant of the Development Authority and
demand for non-agricultural assessment could be made only
on the Development Authority and not against the. tenant -
Held: s~2(11) rlw s.38 defines a 'government lessee' as a
lessee under a lease granted by a Collector in regard to
E
unalienated unoccupied land belonging to the government -
In the instant case, the land was not leased by the Collector
to the appellant - The lease deed stated that the lands leased
were held by the Development Authority - There was also
nothing to show that the lands belonged to government and
that the Development Authority granted the lease in favour F
of appellant, acting as an agent of the state government -
Therefore, the leased lands were not government lands and
the lessor was not the government - Therefore, the contention
that the appellant was a 'government lessee' and, therefore,
. not liable to pay the non-agricultural assessment is rejected G
-
However, by virtue of Pimpri-Chanchwad New Town
Development authority (Disposal of Land) Regulations, 1973
rlw the lease deed statutory liability was imposed on the
appellant-lessee to pay the non-agricultural assessment to the
863
H
864
SUPREME COURT REPORTS
[2011] 7 S.C.R.
A state government - Having regard to the statutory liability
created under the 1973 Regulations, the position of the
lessee would be similar to a tenant referred to in sub-section
1 (c) of s. 168 which provides that in case of land in possession
of a tenant, such tenant if he is liable to pay land revenue
8
therefor under the relevant tenancy laws, shall be primarily
liable to the state government for the payment of land revenue,
including all arrears - The liability of the appellant as tenant,
to pay the land revenue, though not under a 'tenancy ·law' in
its strict sense, but is nevertheless under a statutory regulation
c governing the tenancy and, therefore, the demand by the state
government directly against the appellant, can be justified by
the principle underlying s.168(1)(c) - Maharashtra Regional
and Town Planning Act - ss.113, 114 and 118 - PimpriChanchwad New Town Development authority (Disposal of
0
Land) Regulations, 1973 - Regulations 10(iv), (v) - Land laws
and agricultural tenancy.
Words and phrases: Word 'occupant' - Meaning of, in the
context of Maharashtra Land Revenue Code, 1966.
E
The appellant was granted a lease of land under
leas~ deed dated 3.1.1995 by Pimpri-Chinchwad New
Development Authority for a term of 99 years
commencing from 21.11.1994. The appellant utilised the
said plot and the adjoining plot obtained on lease from
F Maharashtra Industrial Development Corporation (MIDC)
for construction of factory. The appellant commenced
construction of its plant and on completion commenced
actual use for industrial purpose in 1999. The competent
authority served demand notices on the appellant for
G payment of non-agricultural cess and additional nonagricultural cess for the period 1995-96 to 2001-02. The
appellant filed writ petition before the High Court
challenging the demand notices on the ground that it
being a "government lessee" was not liable to pay the
H demand amount. The appellant also took an alternate plea
TATA MOTORS LTD. v. TALATHI OF VILLAGE
865
CHIKHALI AND ORS.
that it was a tenant of the Development Authority and
A
was, therefore, not liable to pay the non-agricultural cess
assessment under the provisions of the Maharashtra
Land Revenue Code, 1966.
The High Court rejected the contention of the
B
appellant that it was government lessee. It held that as a
lessee under the

## Text

_Characters 0–39,973 of 50,497. This is a partial read: ask again with offset=39973 for what follows._

(2011] 7 S.C.R. 863
TATA MOTORS LTD.
v.
TALATHI OF VILLAGE CHIKHALI AND ORS.
(Civil Appeal No. 10187 of 2010)
JULY 4, 2010
[R.V. RAVEENDRAN, P. SATHASIVAM AND A.K.
PATNAIK, JJ.]
.
A
B
Maharashtra Land Revenue Code, 1966: ss.39, 168 -
Non-agricultural cess - Liability to pay - Lease of land granted c
to the appellant by the Pimpri-Chinchwad New Development
Authority - Demand on the appellant for payment of nonagricultural cess - Challenged by appellant on the ground
that it was a government lessee and, therefore not liable to
pay the amount demanded and in the alternate, appellant D
took plea that it was tenant of the Development Authority and
demand for non-agricultural assessment could be made only
on the Development Authority and not against the. tenant -
Held: s~2(11) rlw s.38 defines a 'government lessee' as a
lessee under a lease granted by a Collector in regard to
E
unalienated unoccupied land belonging to the government -
In the instant case, the land was not leased by the Collector
to the appellant - The lease deed stated that the lands leased
were held by the Development Authority - There was also
nothing to show that the lands belonged to government and
that the Development Authority granted the lease in favour F
of appellant, acting as an agent of the state government -
Therefore, the leased lands were not government lands and
the lessor was not the government - Therefore, the contention
that the appellant was a 'government lessee' and, therefore,
. not liable to pay the non-agricultural assessment is rejected G
-
However, by virtue of Pimpri-Chanchwad New Town
Development authority (Disposal of Land) Regulations, 1973
rlw the lease deed statutory liability was imposed on the
appellant-lessee to pay the non-agricultural assessment to the
863
H
864
SUPREME COURT REPORTS
[2011] 7 S.C.R.
A state government - Having regard to the statutory liability
created under the 1973 Regulations, the position of the
lessee would be similar to a tenant referred to in sub-section
1 (c) of s. 168 which provides that in case of land in possession
of a tenant, such tenant if he is liable to pay land revenue
8
therefor under the relevant tenancy laws, shall be primarily
liable to the state government for the payment of land revenue,
including all arrears - The liability of the appellant as tenant,
to pay the land revenue, though not under a 'tenancy ·law' in
its strict sense, but is nevertheless under a statutory regulation
c governing the tenancy and, therefore, the demand by the state
government directly against the appellant, can be justified by
the principle underlying s.168(1)(c) - Maharashtra Regional
and Town Planning Act - ss.113, 114 and 118 - PimpriChanchwad New Town Development authority (Disposal of
0
Land) Regulations, 1973 - Regulations 10(iv), (v) - Land laws
and agricultural tenancy.
Words and phrases: Word 'occupant' - Meaning of, in the
context of Maharashtra Land Revenue Code, 1966.
E
The appellant was granted a lease of land under
leas~ deed dated 3.1.1995 by Pimpri-Chinchwad New
Development Authority for a term of 99 years
commencing from 21.11.1994. The appellant utilised the
said plot and the adjoining plot obtained on lease from
F Maharashtra Industrial Development Corporation (MIDC)
for construction of factory. The appellant commenced
construction of its plant and on completion commenced
actual use for industrial purpose in 1999. The competent
authority served demand notices on the appellant for
G payment of non-agricultural cess and additional nonagricultural cess for the period 1995-96 to 2001-02. The
appellant filed writ petition before the High Court
challenging the demand notices on the ground that it
being a "government lessee" was not liable to pay the
H demand amount. The appellant also took an alternate plea
TATA MOTORS LTD. v. TALATHI OF VILLAGE
865
CHIKHALI AND ORS.
that it was a tenant of the Development Authority and
A
was, therefore, not liable to pay the non-agricultural cess
assessment under the provisions of the Maharashtra
Land Revenue Code, 1966.
The High Court rejected the contention of the
B
appellant that it was government lessee. It held that as a
lessee under the Development Authority, the appellant
was liable to pay the non-agricultural assessment. The
High Court, however, held that having regard to section
115 of the Code, non-agricultural assessment could be
C
levied only with effect from the date on which the land
was actually used for non-agricultural purpose, and as
appellant commenced actual non-agricultural use in the
year 1999, the non-agricultural assessment was due by
it only from 1999-2000. As a consequence, the High Court 0
allowed the writ petition in part, quashed the demand
relating to the period 1995~96 to 1998-99 and upheld the
claim for the non-agricultural assessment from the year
1999-2000 onwards.
The questions which arose for consideration in the
E
instant appeal were whether the appellant was a
'government lessee' and, therefore, not liable to pay the
non-agricultural assessment and whether the appellant
was a tenant of.the Development Authority and the
demand for non-agricultural assessment could be made
F
only on the Development Authority and not against the
tenant.
Dismissing the appeal, the Court
HELD: 1.1. Section 39 of the Maharashtra Land G
Revenue Code, 1966 makes the occupant liable to pay
the land revenue and Government lessee to pay rent
fixed. The expressions "to hold land" or "to be a land
holder or holder of land" is defined in section 2(12) and
mean to be lawfully in possession of land, whether such
H
866SUPREME COURT REPORTS
[2011] 7 S.C.R.
A possession is actual or not.· It is not in dispute that the
land in question is unalienated land and that in regard to
such land, only the 'occupant' as defined in the Code is
primarily liable to pay the non-agricultural assessment to
the state government. Section 2(23) makes it clear that
B where the land is in the actual possession of a tenant, the
superior landlord or the land holder is deemed to be the
occupant. It is also not in dispute that the PimpriChinchwad New Development Authority is the 'occupant'
and the appellant is not the occupant, but only a tenant
c under the occupant. There is no dispute that a
government lessee is not liable to pay any land revenue.
Section 2(11) read with section 38 defines a 'government
lessee' as a lessee under a lease granted by a Collector
in regard to unalienated unoccupied land belonging to
0 the government. In this case, the lands in question for
which the non-agricultural assessment was demanded,
were not leased by the Collector to the appellant. The
lease deed states that the lands leased were held by the
Development Authority, and the lessor is the
E Development Authority. Therefore the leased lands were
not government lands and the lessor was not the
government. There was also nothing to show that the
lands belonged to government and that the Development
Authority granted the lease in favour of appellant, acting
as an agent of the state government. A lessee of the
F Development Authority is not a gover:nment lessee as the
Development Authority is not the government and the
lease lands are not government lands. Therefore, the
contention that the appellant was a 'government lessee'
and, therefore, not liable to pay the non-agricultural
G assessment is rejected. [Paras 4-6] [875-B-C; 876-8; 877H; 878-A-B]
1.2. The appellant relied upon a state government
Circular dated 29.3.1975 which clarified that as on that
H date, Maharashtra Industrial Development Corporation
TATA MOTORS LTD. v. TALATHI OF VILLAGE
867
CHIKHALI AND ORS.
(MIDC) was the agent of the state government and,
A
therefore, not liable to pay any assessment to the
government in respect of the lands held by it as agent of
the state government; that any lessee under MIDC would,
therefore, become a governmeht lessee and will not be
liable to pay the non-agricultural assessment under the s
provision of Code, and that consequently the industrial
lessees, under MIDC, were not required to pay any nonagricultural assessment in addition to the lease money.
The question whether the appellant is liable to pay nonagricultural assessment in regard to the land taken on c
lease from the Development Authority will have to be
decided with referen(:e to the relevant statutory
provisions and the terms of lease and not with reference
to position prevailing with reference to some other lease
taken by the appellant from MIDC. The status, objects,
0
functions and area of operation of MIDC and th.e
Development Authority are different. Any decision or
clarification issued in regard to lands held by MIDC or
lands leased by MIDC will not apply to lands held or
leased by the Development Authority. The circular dated
29.3;1975 relied upon by the appellant is not relevant as
E
it applies only to lessees of MIDC, which as agent of the
state government granted certain leases· and
consequently such lessees as government lessees were
exempted from paying the non-agricultural assessment.
The said notification did not refer to Pimpri-Chinchwad
F
New Town Development Authority as the agent of the
state government in regard to grant of leases to appellant
and others. In fact there was no document which showed
the state government to be the owner of the lands leased
by the Development Authority, nor any document to
G
show that the state government had either constituted or
recognized the Development Authority as its agent in
regard to leased land$. [Paras 7, 8] [878-G-H; 879-A-B-EH; 880-A-B]
H
868
SUPREME COURT REPORTS
[2011] 7 S.C.R.
A
1.3. It is evident from section 113, 114 and 118 of
Maharashtra Regional and Town Planning Act (MRTP Act)
that the Development Authority is a body corporate which
can acquire, hold, manage and dispose of land. The fact
that the Development Authority requires the consent of
B the state government to dispose of any of its land by way
of leases in excess of 99 years will not alter the position
that the lands leased are lands of the Development
Authority. There is no provision in MRTP Act which
requires the New Town Development Authority, to hold
c and dispose of any government land as agent of the state
government. In contrast, MRTP Act contains a specific
provision enabling the state government to require a
corporation or company (other than a New Town
Development Authority, which is specific to a new Town),
0 to execute development work and dispose of its lands as
its agent. MIDC is a corporation which would fall under
sub-section 113(3A) whereas the Development Authority
falls under section 113(2) of MRTP Act. The circular
issued with reference to MIDC was, therefore, of no
E assistance to contend that land leased by the
Development Authority to appellant was a government
land. The contention of appellant that the Development
Authority !s the agent of state government and that the
appellant is a government lessee are, therefore, rejected.
F [Para 10] [881-H; 882-A-E; 883-B-C]
2.1. There is no dispute that section 39 of the Land
Revenue Code, fastens liability to pay land revenue upon
the occupant and not on the tenant of the occupant.
Section 168(1)(a) of the Code also reiterates that in the
G case of unalienated land, the occupant shall be primarily
liable to the state government for making the payment of
land revenue including all arreari:;. Sub-section (2) of
section 168 provides that in case of default of the person
primarily liable, the land revenue shall be recoverable
H from any person in possession of the land. It is no doubt
TATA MOTORS LTD. v. TALATHI OF VILLAGE
869
CHIKHALI AND ORS.
true that the primary liability to pay the land revenue
A
which includes non-agricultural assessment is on the
occupant, under Section 39 of the Code. The definition
. of 'occupant' excludes not only 'government lessee' but
also every tenant. Whenever the person in actual
possession of the land is the-tenant, the land holder or
8
the superior landlord who granted the lease to such
tenant is deemed to be an occupant. In this case the
appellant has taken the lease from the Development
Authority and therefore the Development Authority as the
landlord and occupant, will be primarily liable to pay the c
land revenue. [Paras 11, 12] [883-D-H; 884-A-E]
2.2. In exercise of the powers conferred by Section
159 of the MRTP Act, the Development Authority, with the
previous approval of the state government, has made
regulations for regulating the disposal ·of land acquired . D
by it or vesting in it in the Pimpri-Chinchwad New Town,
known
as
the
"Pimpri-Chinchwad
New Town
Development Authority (Disposal of Land) Regulations,
1973". Regulation 1(ii) provides that the said Regulations
shall apply to the lands acquired by or vested in the
E
Pimpri-Chinchwad New Town Development Authority for
the development of Pimpri-Chinchwad New Town.
Regulation 5 provides that the Development Authority
may from time to time dispose of plots of land on lease,
to the persons eligible, in consideration of a premium and
F
an annual ground rent. Part IV of the Regulation contains
the conditions of lease. Regulations 10(iv) and 10(v)
relating to the question of payment of.rates and taxes and
land revenue and cesses. Regulation 16 provides that in
the event of conflict between the Regulations and
G
provisions of a lease deed entered into by the
Development Authority, the provisions of the Regulations
will prevail. There is however no conflict between the
Regulations and the terms of the lease. Clause 2(c) of the
lease deed dated 3.1.1995 between the Development
H
i
:
870
SUPREME COURT REPORTS
[2011] 7 S.C.R.
A Authority as lessor and appellant as lessee, reiterates the
terms and conditions of lease contained in the
Regulations by providing that the lessee would be liable
to pay any future rates or taxes recoverable under law
from the lessee. Thus there is a statutory liability upon
B the appellant as lessee to· pay the la11d revenue (nonagricultural assessment) to the state government.
Section 39 of the Code makes the Development
Authority, as 'occupant', liable to pay the non-agricultural
assessment and the said liability is, in turn, statutorily
c passed on to the appellant as lessee under the
Regulations 10(iv) and (v) and the clause 2(c) of the lease
deed. [Paras 13, 14] [884-F-H; 885-A-D-G]
Nagpur Improvement Trust v. Nagpur Timber Merchants
Association 1997 (5) SCC 105: 1997 (3) SCR 21 - referred
D to.
2.3. Whether the demand for land revenue could be
directly made against the lessee of the occupant, when
the land revenue code makes the occupant primarily
E liable. But for the statutory obligation created under
regulation 10(iv) and (v) of the Regulations, in the normal
course, a demand should have been made upon the
occupant (landlord) who is primarily liable and only if the
landlord fails to pay, recourse could be had to subF section (2) of section 168 which enabled a claim being
made against the tenant in terms of the said sub-section.
But where the liability to pay.land revenue is fastened on
the lessee under the statutory regulations, it is not
necessary for the state government to make a claim upon
G the occupant, leading to a demand by the Development
Authority, in turn, upon its lessee, for payment of land
revenue. The state government can directly make the
demand on the lessee, by taking note of the liability
statutorily fastened on the lessee under the Regulations.
When the liability of the lessee to pay the land revenue
H
TATA MOTORS LTD. v. TALATHI OF VILLAGE ·
871
CHIKHALI AND ORS.
· is not open to challenge, having regard to the provisions A
of the Regulations and terms of the lease, no purpose
would be served by requiring the state government to
recover the amount from the Development Authority
(occupant) and then require the Development Authority
to make a demand upon the lessee to recover the B
amount. Having regard to the statutory liability created
upon the lessee, under the Pimpri-Chinchwad New Town
Development Authority (Disposal of land Regulations),
1973, the position of the lessee would be similar to a
tenant referred to in sub-section 1 (c) of section 168 of the c
Code which provides that in the case of the land in
possession of a tenant, such tenant if he is liable to pay
land reve!lue therefor under the relevant tenancy laws,
shall be primarily liable to the state government for the
payment of land revenue, including all arrears. The D
liability of the appellant as tenant, to pay the land revenue,
though not under a 'tenancy law' in its strict sense, but
is nevertheless under a statutory regulation governing
the tenancy and therefore the demand by the state
government directly against the appellant, can be
justified by the principle underlying section 168(1)(c) of E
the Code. A demand can directly be made upon the
lessee, the lessee can give a representation or file
objections before the revenue authorities of the state
government, if it has any grievance in regard to the
determination of the quantum of the non-agricultural
F
assessment or the demand therefor. [Paras 15, 16] [886A-H; 887-A-D]
2.4. Sub-section (2) of section 168 of the Code, no
doubt, provides that in case of default by any person who G
is primarily liable under sub-section (1), the land revenue
including arrears shall be recoverable from any person
in possession of the land provided that where such
person is a tenant the amount recoverable from him shall
not exceed the de·mands of the year in which the H
872
SUPREME COURT REPORTS
[2011) 7 S.C.R.
A recovery is made. This sub-section no doubt implies the
demand should be made upon the occupant and only if
the occupant defaults, a demand can be made upon the
person in occupation, that is the lessee. Sub-section (2)
of section 168 will operate where the tenant is not
B primarily liable under section 168(1) of the Code, or where
there is no statutory liability upon the lessee to bear and
pay the land revenue. The procedure under sub-section
(2) would apply where the liability to pay the land revenue
is on the lessor, and where the lessee is not liable
c therefor or where the liability of the lessee to pay the land
revenue is merely contractual, as contrasted from a
statutory obligation. Where the liability of the lessee is a
statutory liability, there is no reason why that recovery
should be delayed and protracted by requiring a demand
0 by the ·state government on the lessor and a
consequential demand by the lessor on the lessee. If the
lessee commits default in paying the land revenue, it may
amount to a breach leading to re-entry under clause (4)
of the lease deed. Be that as it may. However, having
E regard to the pendency of these proceedings, if the
payment of the land revenue dues is made within four
months from today it shall not be treated as a default or
breach of the terms of the lease deed for the purpose of
re-entry. In view of that there is no error in the order of
the High Court. However the appellant is given liberty to
F file representations/objections before the concerned
Revenue Authority, if it has any objection or grievance in
regard to the quantum of non-agricultural assessment
claimed in regard to the property leased to it. As the
appellant had the benefit of interim stay against recovery,
G the appellant shall be liable to pay interest on the arrears/
dues at the rate of 9% per annum from 26.2.2002. (Paras
17, 18] (887-D-H; 888-A-D]
Case Law Reference:
H
1997 (3) SCR 21
referred to
Para 14
TATA MOTORS LTD. v. TALATHI OF VILLAGE
873
CHIKHALI AND ORS.
CIVIL APPELLATE JURISDICTION : Civil Appeal No.
A
101a1 of 2010.
From the Judgment & Order dated 4.7.2007 of the High
Court of Judicature at Bombay in Writ Petition No. 1435 of
2002.
R.F. Nariman, Kavin Gulati, Nandini Gore, Debmalya
Banerjee, Abhishek Ray, Manik Karanjawala for the Appellant.
Madhavi Divan, Sanjay Kharde, Asha Gopalan Nair,
B
Shivaji M. Jadhav for the Respondents.
c
The Judgment of the Court was delivered by
R.V.RAVEENDRAN, J. 1. Under Lease Deed dated
3.1.1995, Pimpri-Chinchwad New Town Development Authority
(6th respondent herein - for short 'the Development Authority')
D
granted a lease of land measuring 164.5 acres in Sectors
No.15 and 15A in Village Chikhali, Taluka Haveli, District Pune,
converted to industrial use, to the appellant herein for a term
of 99 years commencing from 21.11.1994. The consideration
for the lease was a premium of Rs.17,91,40,500/- (at the rate
E
of Rs.25/- per sq.ft.) paid by the appellant apart from a yearly
rent of rupee one. The appellant utilized the said plot and
adjoining plot obtained on lease from Maharashtra Industrial
Development Corporation (for short 'MIDC') for construction of
its factory. The appellant commenced construction of its plant
F
in or about the year 1997 and on completion, commenced
actual use for industrial purpose, in the year 1999.
2. The appellant was served with a demand notice dated
26.2.2002 by the Gar Kamgar Talathi, Chikhali, demanding
payment of Rs.45,25,538/- as non-agricultural cess ·and
G
additional non-agriculture cess, for the period 1995-96 to 200102. As the said payment was not made, default notices dated
1.3.2002 and 5.3.2002 were issued under Section 174 of thel'-
Maharasthra Land Revenue Code, 1966 ('Code' for short) r
informing that if the amount demanded was not paid within' H
. ,
874
SUPREME COURT REPORTS
[2011] 7 S.C.R.
A
seven days, the amount due will be recovered with 25% of the
amount due as penalty. At that stage the appellant filed a writ
petition before the Bombay High Court for quashing the demand
notice 26.2.2002, 1.3.2002 and 5.3.2002. The ·appellant
contended that it was a "government lessee". Alternatively, it
B
was_ contended that it was the tenant of the Development
Authority. It was submitted that neither a government lessee nor
a tenant of the Development Authority was liable to pay the nonagricultural assessment under the provisions of the Code.
3. The High Court, by judgment dated 4.7.2007 rejected
C the contention that appellant was a government lessee. It held
that as lessee under the Development Authority, the appellant
was liable to pay the non-agricultural assessment. The High
Court however held that having regard to section 115 of the
Code, non-agricultural assessment could be levied only with
D effect from the date on which the land was actually used for nonagricultural purpose, and as appellant commenced actual nonag ricu ltu ral use in the year 1999, the non-agricultural
assessment was due by it only from 1999-2000. As a
consequence, the High Court allowed the writ petition in part,
E
quashed the demand relating to the period 1995-96 to 199899 and upheld the claim for the non-agricultural assessment
from the year 1999-2000 onwards. The said order is challenged
in this appeal by special leave contending that it is not liable to
pay the non-agricultural assessment as it is a government
F
lessee. Alternatively it is contended that being the tenant of the
'occupant', it is liable to pay the land revenue, as only the
'occupant' is liable to pay the land revenue under section 39 of
the said Code. On the contentions raised, the following
G
questions arise for consideration:
(i)
Whether the petitioner is a 'government lessee' and
therefore not liable to pay the non-agricultural
assessment?
(ii)
Whether the appellant beil")g a tenant of the
Development Authority, the demand for non-
TATA MOTORS LTD. v. TALATHJ OF VILLAGE
875
CHIKHALI AND ORS. [R.V. RAVEENDRAN, J.]
'agricultural assessment could be made only on the
A
Development Authority and not against the tenant?
The relevant statutory provisions
4. The answers to the aforesaid two questions would
depend upon the provisions of the Maharashtra Land Revenue
B
Code, 1966. Section 39 makes the occupant liable to pay the
land revenue and the said section is extracted below: ·
"39. Occupant to pay land revenue and Government lessee
to pay rent fixed.
C
Every occupant shall pay as land revenue the assessment
fixed under the provisions of this Code and rules made
thereunder; and every Government lessee shall pay as
land revenue lease money fixed under the terms of the
o.
lease."
(emphasis supplied)
The term "land revenue" and "occupant" referred in the said
section are defined in Section 2{19) and section 2(23) and the
E
said definitions are extracted below:
"(19) - "land revenue" means all sums and payments, in
money received or legally claimable by or on behalf of the
State Government from any person on account of any land
or interest in or right exercisable over land held by or
F
vested in him, under whatever designation such sum may
be payable and any cess or rate authorised by the State
Government under the provisions of any law for the time
being in force; and includes premium, rent, lease money,
quit rent, judi payable by a inamdar or any other payment
G
provided under any Act, rule, contract or deed on account
of any ·1and;
·
"(23) - "occupant" means a holder in actual possession
of unalienated land, other than a tenant or Government
H .
•
876
SUPREME COURT REPORTS
[2011) 7 S.C.R.
A
lessee ; provided that, where a holder in actual possession
is a tenant, the land holder or the superior landlord, as the
case may be, shall be deemed to be the occupant;
The expressions "to hold land" or "to be a land holder or holder
8
of land" is defined in section 2(12) and mean to be lawfully in
possession of land, whether such possession is actual or not.
c
The term "tenant" and "government lessee" referred in the
definition of "occupant" are defined in Section 2(40) and
Section 2(11) and they are extracted below:
"(40) "tenant" means a lessee, whether holding under an
instrument, or under an oral agreement, and includes a
mortgagee of a tenant's rights with possession; but does
not include a lessee holding directly under the State
0
Government;
E
F
G
H
(11) "Government lessee" means a person holding land
from Government under a lease as provided by section
38".
Section 38 referred in the definition of 'Government
Lessee' is extracted below :
"It shall be lawful for the Collector at any time to lease under
grant or contract any unalienated unoccupied land to any
person, for such period, for such purpose and on such
conditions as he may, subject to rules made by the State
Government in this behalf, determine, and in any such case
the land shall, whether a survey settlement has been
extended to it or not, be held only for the period and for
the purpose and subject to the conditions so determined.
The grantee shall be called a Government lessee in
respect of the land so granted."
Chapter XI of the Code deals with realization of land revenue
and other revenue demands. Section 168 in Chapter XI of the
TATA MOTORS LTD. v. TALATHI OF VILLAGE
877
CHIKHALI 'AND ORS. [R.V. RAVEENDRAN, J.]
Code dealing with the liability for land revenue is extracted
A
below:
"168. Liability for land revenue.
(1)
In the case of
(a) unalienated land, the occupant or the lessee of
the State Government,
(b) alienated land, the superior holder, and
B
(c) land in the possession of a tenant, such tenant
C
if he is liable to pay land revenue therefor under the
relevant tenancy law, shall be primarily liable to the
State Government for the payment of the land
revenue, including all arrears of land revenue, due
in respect of the land. Joint occupants and joint
D
holders who are primarily liable under this section
shall be jointly and severally liable.
(2) In case of default by any person who is primarily liable
under this section, the land revenue, including arrears as
E
aforesaid, shall be recoverable from any person in
possession of the land.
Provided that, where such person is a tenant, the amount
recoverable from him shall not exceed the demands ofAhe
year in which the recovery is made.
·'
F
Provided further that, when land revenue is recovered
under this section from any person who is not primarily
liable for the same, such person shall be allowed credit for
any payments which he may have duly made to the person
G
who is primarily liable, and shall be entitled to credit, for
the amount recovered from him, in account with the person
who is primarily liable".
5. It is not in dispute that the land in question is unalienated
H
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[2011] 7 S.C.R.
A
land and that. in regard to such land, only the 'occupant' as
defined in the Code is primarily liable to pay the nonagricultural assessment to the state government. Section 2(23)
makes it clear that where the land is in the actual possession
of a tenant, the superior landlord or the land holder is deemed
B to be the occupant. It is also not in dispute that the
Development Authority is the 'occupant' and the appellant is not
the occupant, but only a tenant under the occupant.
Re : Question Ci}
C
6. There is no dispute. that a government lessee is not
liable to pay any land revenue. Section 2(11) read with section
38 defines a 'government lessee' as a lessee under a lease
granted by a Collector in regard to unalienated unoccupied
land belonging to the government. In this case the lands in
D question for which the non-agricultural assessment h.as been
demanded, were not leased by the Collector to the appellant,
The lease deed states that the lands leased were held by the
Development Authority, and the lessor is the Development
Authority. Therefore the leased lands were not government
E lands and the lessor was not the government. There is also
nothing to show tharthe lands belonged to government and that
the Development Authority granted the lease in favour of
appellant, acting as an agent of the state government. A lessee
from the Development Authority is not a government lessee as
F
the Development Authority is not the government and the lease
lands are not government lands. Therefore the appellant cannot
call itself a government lessee. The first contention is therefore
rejected.
7. Though the issue is thus simple and straightforward, the
G appellant however contended that it is a 'government lessee'
in a rather round-about manne·r, relying upon a state
government Circular dated 29.3.1975 which clarified that as on
that date, MIDC was the agent of the state government and
therefore not liable to pay any assessment to the government
H in respect of the lands held by it as agent of the state
TATA MOTORS LTD. v. TALATHI OF VILLAGE
879
CHIKHALI AND ORS. [R.V. RAVEENDRAN, J.]
government; that any lessee under MIDC would therefore
A
become a government lessee and will not be liable to pay the
non-agricultural assessment under the provision of Code, but
will only be liable to pay the lease money fixed under the lease;
and that consequently the industrial lessees, under MIDC, were
not required to pay any non-agricultural assessment in addition B ·
to the lease money. It is submitted by the appellant that in
regard to the adjoining land taken by it on lease from MIDC, it
is not required to pay the non-agricultural assessment on
account of appellant being treated as government lessee, under
the said Circular dated 29.3.1975. It is contended that in c
principle, there is no difference between the MIDC and· the
Development Authority and having regard to the provisions of
the Maharashtra Regional and Town Planning Act, 1966 (for
short 'MRTP Act'), the Development Authority should also be
treated as agent of the state government and consequently, the
D
appellant should be treated as a government lessee which is
not liable to pay any non-agricultural assessment, in regard to
the lands taken on lease under deed dated 3.1.1995.
8. The question whether the appellanfis liable to pay nonagricultural assessment in regard to the land taken on lease
E
from the Development Authority will have to be decided with
reference to the relevant statutory provisions and the terms of
lease and not with reference to position prevailing with reference
to some other lease taken by the appellant from MIDC. The
status, objects, functions and area of operation of MIDC and
F
the Development Authority are different. Any decision or
clarification issued in regard to lands held by MIDC or lands
leased by MIDC will not apply to lands held or leased by the
Development Authority. As noticed above, the circular dated
29.3.1975 relied upon by the appellant is not relevant as it G
applies only to lessees of MIDC, which as agent of the state
government granted certain leases and consequently such
lessees as government lessees were exempted from paying
the non-agricultural assessment. The said notification did not
refer to Pimpri-Chinchwad New Town Development Authority as
H
880
SUPREME COURT REPORTS
[2011] 7 S.C.R.
A the agent of the state government in regard to grant of leases
to appellant and others. In fact there is no document which
shows the state government to be the owner of the lands leased
by the Development Authority, nor any document to show that
the state government had either constituted or recognized the
B
Development Authority as its agent in regard to leased lands.
9. To know whether the Development Authority was an
agent of the state government and to ascertain its status, it is
necessary to refer to the relevant provisions of the Maharashtra
C Regional and Town Planning Act, 1966 (for short 'MRTP Act').
Section 113 of MRTP Act provides for designation of new
towns and constitution of Development Authorities for those
new towns. Sub-sections (1), (2), and (4) of that section are
extracted below:
D
E
F
"113. (1) If the State Government is satisfied that it is
expedient in the public interest that any area should be
developed as a site for a new town as reserved or
designated in any draft or final Regional Plan it may by
notification in the Official Gazette, designate that area as
the site for the proposed new town. The new town shall be
known by the name specified in the notification.
(2) After publication of the notification under sub-section
(1) for the purpose of acquiring, developing and disposing
of land in the area of a new town, the State Government
shall by another notification in the Official Gazette,
constitute a New Town Development Authority ......... .
)()()(
)()()(
xxx
G
(4) Every Development Authority shall be a body corporate
with perpetual succession and a common seal with power
to acquire, hold and dispose of property, both moveable
and immoveable, and contract and sue or be sued by such
name as may be specified in the notification under subH
Section (2)".
TATA MOTORS LTD. v. TALATHI OF VILLAGE
881
CHIKHALI AND ORS. [R.V. RAVEENDRAN, J.]
Section 114 lays down the object of Development Authority and · A
sub-section (1) thereof is extracted below:
"114(1) The objects of a Development Authority shall be
to secure the laying out and development of the new town
in accordance with proposals approved ·in that behalf under
8
the provisions of this Act, and for that purpose every such
Authority shall subject to the provisions of section 113A
have power to acquire, hold, manage and dispose of land
and other property to carry out buildings and other
operations, to provide water, electricity, gas, sewerage C
and other services, amenities and facilities and generally
to do anything necessary or expedient for the purpose of
the new town or for purposes incidental thereto."
Section 116 empowers Development Authorities to acquire
lands. Section 118 deals with disposal of lands by Development D
Authorities and sub-section (1) thereof which is relevant is·
extracted below:
"118.(1) Subject to any directions given by the State
Government under this Development Act, a Development
E
Authority may dispose of any land acquired by it or vesting
in it to such persons, in such manner, and subject to such
terms or conditions as they consider expedient for
securing the development of the new town in accordance
with proposals approved by the State Government under
F
this Act:
Provided that, a Development Authority shall not have
power, except with. the consent of the State Government,
to sell any land Qr to grant a lease of any land for a term
of more than ninety-nine years, and the State Government G
shall not consent to any such disposal of land unless it is ·
satisfied that there are exceptional circumstances which
render the disposal of the land in that manner expedient."
10. It is evident from section 113, 114 and 118 of MRTP
H
882.
SUPREME COURT REPORTS
[2011] 7 S.C.R.
A Act that the Development Authority is a body corporate which
can acquire, hold, manage and dispose of land. Section 113
provides for constitution of a New Town Development Authority.
Section 114 states the objects of such Development Authority.
Section 118 of MRTP Act provides for disposal by the
B Development Authority of any land acquired by it or vesting in
it. The Development Authority is therefore a body corporate
which can acquire, hold, possess, manage, develop and
dispose of land in its name and on its own behalf. The fact that
the Development Authority requires the consent of the state
c government to dispose of any of its land by way of leases in
excess of 99 years will not alter the position that the lands
leased are lands of the Development Authority. There is no
provision in MRTP Act which requires the New Town
Development Authority; to hold and dispose of any government
0
land as agent of the state government. In contrast, MRTP Act
contains a specific provision enabling the state government to
require a corporation or compa'ly (other than a New Town
Development Authority, which is specific to a new Town), to
execute development work and dispose of its lands as its
E agent. Sub-section (3A) of section 113 of MRTP Act provides:
"(3A). Having regard to the complexity and magnitude of
the work involved in developing any area as a site for the
new town, the time required for setting up new machinery
for undertaking and completing such work of development,
F
and the comparative speed with which such work can be
undertaken and completed in the public interest, if the work
is done through the agency of a corporation including a
company owned or controlled by tbe State or a subsidiary
company thereof, set up with the object of developing an
G
area as a new town, the state government may,
notwithstanding anything contained in sub-section (2),
require the work of developing and disposing of land in the
area of a new town to be done by any such corporation,
company or subsidiary company aforesaid, as an agent
H
of the state government; and thereupon, such corporation
TATA MOTORS LTD. v. TALATHI OF VILLAGE
883
CHIKHALI AND ORS. [R.V. RAVEENDRAN, J.]
or company shall, in relation to such area, be declared by
A
the state government, by notification in the official gazette,
· ·to be the New Town Development Authority for that area."
MIDC is a corporation which would fall under sub-section
113(3A) whereas the Development Authority falls under section
8
113(2) of MRTP Act. The Circular issued with reference to
MIDC is therefore of no assistance to contend that land leased
by the Development Authority to appellant is a government land.
The contention of appellant that the Development Authority is
the agent of state government and that the appellant is a
C
government lessee are therefore rejected.
Re : Question (ii)
11. The appellant next· contends that even if it is not a
governmeht lessee, being a lessee of the 'occupant', it is not
D
liable· to paythe land revenue. There is no dispute that section .
. 39 of the Land Revenue. Code, fastens liability to pay land
. revenue upon the occupant and not on the tenant of the
. occupant. Section 168(1)(a) ofthe Code also reiterates that in
the case of unalienated land, the occupantshall be primarily
E
liable to the state government for making the payment of land
revenue including all arrears. Sub-section (2) of section 168
provides that in case of default of the person primarily liable,
the. land revenue shall be recoverable from any person in
possession o.f the land.