Kallol Cooperative Housing Society Limited vs. Steel Authority Of INDIA Limited & Ors

Facts

The petitioners, Kallol Co-operative Housing Society Limited & Ors., challenged two notices dated March 13, 2018, and April 11, 2018, issued by the General Manager (T.S.-T.A), Steel Authority of India Limited (SAIL), Durgapur. These notices imposed new charges for co-option of new members, transfer to legal heirs, and obtaining no objection for mortgaging leasehold plots. SAIL had leased over 150 acres of land to housing co-operative societies formed by its employees in 1993 for 33 years, with provisions for renewal. The societies, in turn, sub-leased plots to their members. The lease deeds stipulated that lessees would pay all rates, taxes, charges, and impositions. An advisory committee was formed by SAIL to revise existing charges and explore new revenue streams, leading to the impugned notices.

Held

The Court held that the Steel Authority of India Limited (SAIL) was justified in imposing the impugned charges. The Court found that the lease deeds executed between SAIL and the co-operative societies, as well as the sub-lease deeds between the societies and their members, contained specific clauses obligating the lessees to pay all rates, taxes, charges, and other impositions. The Court noted that the advisory committee's recommendations for charges, including Rs. 2,50,000/- for co-option of a new member and Rs. 5,000/- for transfer to legal heirs or for mortgage NOCs (plus applicable GST), were based on considerations such as guidelines, local authority rates, and inflation. The Court relied heavily on the Supreme Court's decision in Bihar Industrial Area Development Authority & Ors. – versus – Amit Kumar & Ors., which affirmed the right of the original land owner to a share of the unearned increase in land value upon transfer. Therefore, the Court concluded that the impugned notices did not require interference and dismissed the writ petition.

Key Issues

1. Whether the Steel Authority of India Limited (SAIL) was justified in imposing new charges for co-option of new members, transfer to legal heirs, and obtaining no objection for mortgaging leasehold plots, as communicated through notices dated March 13, 2018, and April 11, 2018? (Question of law and fact, turning on the interpretation of lease deeds and relevant policies). Petitioner's arguments: The petitioners contended that members have transferable and heritable rights, and societies are obligated to grant consent for transfers to eligible persons. They argued that SAIL had not previously claimed such charges for nominations, induction of new members, or mortgage NOCs. They also highlighted the hardship to retired employees who built homes with their savings. They relied on Section 76 of the West Bengal Co-operative Societies Act, 2006, and Rule 2011 regarding the admission of nominees. Respondent's (SAIL) arguments: SAIL argued that Clause 3(2) of the lease deeds obligated the societies to pay all rates, taxes, charges, and impositions. They also relied on Clauses 3(b) and 3(m) of the sub-lease deeds between societies and members, asserting liability for charges. SAIL cited a Supreme Court judgment in Bihar Industrial Area Development Authority & Ors. – versus – Amit Kumar & Ors., which held that authorities are entitled to a reasonable portion of the unearned increase in land value upon transfer. SAIL contended that the new charges were based on recommendations of an advisory committee, considering guidelines, rates charged by local authorities, and inflation.