NIT can’t recover addl devpt charges under Gunthewari Act, rules HC

Source: The Hitavada      Date: 04 Aug 2017 10:27:23


Staff Reporter,

Nagpur Improvement Trust (NIT) has no power to recover additional development charge from the purchasers of regularised plots in erstwhile unauthorised Layouts, ruled Nagpur bench of Bombay High Court.

Rejecting all arguments of NIT about its power to impose and recover such development charges from subsequent purchasers, a division bench consisting of Justice Ravi Deshpande and Justice Swapna Joshi disapproved NIT’s action to seek development charges from subsequent purchasers of regularised plots and stated that the action cannot be sustained or justified on the basis of Sub­section (3) of Section 3 of the Gunthewari Act or Section 25 of the NIT Act.

“We are not concerned with the actual cost of development required to be incurred by the NIT. It may be more than the one which is already recovered but we are unable to sustain the authority of the NIT to recover the additional development charge on the ground that the expenses incurred by it in development are much more than what are being recovered from the land owner,” the High Court stated while turning down NIT’s contention that its resolution passed on April 2, 2003 empowers it to recover such amount from purchasers of regularised plots under the Gunthewari Act.

In this case, Wahida Begum had purchases a plot admeasuring 1,050 sq ft in Borgaon in 1992. During special drive to regularise 1,900 unauthorised layouts, Wahida Begum received a demand note from NIT on November 20, 2003 to pay development charges at the rate of Rs 16 per sq ft for open plot and Rs 6 per sq ft for constructed land. She paid the demand and accordingly, an order of regularisation was passed on January 6, 2004.

Meanwhile on December 17, 2003 petitioner Pramod Pinge purchased the plot from Wahida Begum. NIT issued notice to Pinge, the transferee of the land, to pay additional regularisation charges for sale of the property at the rate of Rs 16 per sq ft, being total amount of Rs 16,838 and it was challenged before the High Court.

Adv Anil Kilor appearing for the petitioner claimed that development charges determined by the State Government for regularisation of the plot under sub­section (3) of Section 3 of the Gunthewari Act were paid by the erstwhile owner Wahida Begam and only then the regularisation order was passed on January 6, 2004. Once the order of regularisation was passed, the provisions of the Gunthewari Act cease to apply and the action for recovery of development charges by issuing notice of demand in question was legally unsustainable, he claimed.

NIT counsel Adv Girish Kunte justified the demand and claimed that it was planning authority and had powers under sub­section(3) of Section 3 of the Gunthewari Act and its board resolution dated April 2, 2003 to impose the additional development charges of Rs 16 per sq ft would be leviable only upon the first transfer by the original owner of the unauthorised plot so as to recover the actual cost from beneficiary plot purchaser.

The resolution was also approved by State Government. NIT also claimed that it was spending Rs 30-35 per sq ft on development of unauthorised layouts and well within its right to recover additional amount of a regularised plot.
In its affidavit, the State stated that decision to issue demand notice was just and proper, however, the reply of State Government was conspicuously silent about authorisation and approved rate at which development or the additional development charges for regularisation of plot and the construction thereon can be recovered by NIT from first purchaser after regularisation.

“Once the State Government determined the development charge under Section 3 (3) of the Gunthewari Act, the question of NIT again exercising such power to impose additional development charge, does not arise. The power gets exhausted. The further authorisation of the planning authority -- NIT -- to impose additional charge is not within the contemplation of the said provision. Hence, in our view, the action of demand of additional charges by the NIT is incompetent and cannot be sustained in the eyes of law,” the High Court ruled.