The Bombay High Court, in a recent ruling dated August 7, 2024, has ordered the Maharashtra government to refund an amount of ₹2,66,75,750 to the petitioners. This amount was wrongfully collected as a premium for the development/sale of land under the now-repealed Urban Land (Ceiling and Regulation) Act, 1976 (ULC Act). The court found that the premium could only be charged on surplus vacant land exempted under Section 20 of the ULC Act and not on retainable land.

1. Background:

The petitioners, owners of land in Malad, Mumbai, sought a No Objection Certificate (NOC) for the development of their land. However, they were required to pay a substantial premium calculated on the entire land area, including retainable land, under the ULC Act. The petitioners argued that this demand was illegal, especially following the repeal of the ULC Act.

2. Government Resolutions and Dispute:

The dispute arose following two Government Resolutions (GRs) issued in 2019 and 2021, which streamlined the process for resolving pending issues related to surplus land under the ULC Act. The petitioners paid the demanded premium but later sought a refund, arguing that the premium should only apply to surplus land, not the entire land parcel.

3. Court's Interpretation:

The court referenced earlier judgments, particularly the case of Salim Alimahomed Porbanderwalla, which clarified that the premium should only be charged on surplus vacant land exempted under Section 20 of the ULC Act. The court found that the respondents had wrongfully applied the premium to the entire land parcel.

4. Judgment:

The court ruled in favor of the petitioners, directing the Maharashtra government to refund the excess premium of ₹2,66,75,750. This ruling reaffirmed the principle that premiums under the ULC Act can only be levied on surplus land and not on land retainable by the owner.

5. Implications:

This judgment could have wider implications for other landowners who were similarly charged excess premiums under the ULC Act, potentially opening the door for more refunds and legal challenges against the Maharashtra government.