The Bombay High Court has delivered a significant judgment on the retrospective application of executive instructions under the Maharashtra Land Revenue Code, 1966 (MLRC). The Court held that a Government Resolution (GR) cannot retrospectively invalidate a conversion order granting Occupancy Class-I rights to a lessee, reinforcing the principle that executive instructions operate prospectively unless expressly stated otherwise. The judgment also clarifies the limited locus standi of a sub-lessee in challenging such conversion orders, emphasizing that contractual disputes must be adjudicated by civil courts, not revenue authorities.
Background & Facts
The Dispute
The dispute revolves around a parcel of land admeasuring 1,127 sq. mtrs. at Plot No. 5, City Survey No. 161, Village Versova, Mumbai Suburban District, originally allotted to Petitioner No. 1 (Dharampal Sharma) by the State of Maharashtra (Respondent No. 1) under a Lease Deed dated 5th October 1993. The land was allotted for the purpose of running a petrol pump under a Letter of Intent (LOI) dated 25th May 1983 issued by Bharat Petroleum Corporation Ltd. (BPCL, Respondent No. 5). The Government Memorandum dated 12th September 1990 explicitly stated that the land was to be used exclusively for a petrol pump on behalf of BPCL.
Key Facts
1983: LOI issued by BPCL to Petitioner No. 1 for running a petrol pump.
12th September 1990: Government Memorandum allotted the land to Petitioner No. 1 for 30 years on lease, specifying its use for a petrol pump.
5th October 1993: Lease Deed executed between the State and Petitioner No. 1, incorporating the LOI and Government Memorandum.
2nd June 2001: Collector’s permission granted to sub-lease the land to BPCL.
14th May 2003: Sub-Lease Deed executed between Petitioners and BPCL, limiting BPCL’s rights to structures only, with no proprietary interest in the land.
15th October 2002 & 11th June 2018: License Agreements executed between Petitioners and BPCL.
11th September 2020: Sub-lease to BPCL expired.
20th April 2021: Collector’s Order permitted conversion of the land from leasehold to Occupancy Class-I under the Maharashtra Land Revenue (Conversion of Occupancy Class-II and Leasehold Lands into Occupancy Class-I Lands) Rules, 2019 (Conversion Rules, 2019), upon payment of a premium of Rs. 6,39,79,790/- by Petitioner No. 1.
14th July 2021: Government Resolution (GR) issued, restricting conversion of lands allotted for essential services (e.g., petrol pumps) to Occupancy Class-I.
12th October 2022: Suo Motu show cause notice issued by Joint Secretary (Revenue, Respondent No. 3) alleging breaches of lease conditions.
5th June 2025: Impugned Order passed by Revenue Minister (Respondent No. 2) in Revision Applications No. 2622/CR28/G-3 and 2623/10/966/CR-12/G-3, setting aside the Collector’s Order dated 20th April 2021 on grounds of retrospective application of the GR dated 14th July 2021 and alleged breaches of lease conditions.
Procedural History
20th April 2021: Collector passed order converting leasehold rights to Occupancy Class-I upon payment of premium.
14th July 2021: GR issued restricting conversion of lands for essential services.
12th October 2022: Suo Motu show cause notice issued by Joint Secretary (Revenue).
5th June 2025: Revenue Minister set aside Collector’s Order in Revision Applications.
2025: Writ Petition No. 4891 of 2025 filed before Bombay High Court challenging the impugned order.
The Parties' Positions
Petitioners (Dharampal Sharma and others) contended:
The GR dated 14th July 2021 is an executive instruction and cannot retrospectively invalidate the Collector’s Order dated 20th April 2021.
The Conversion Rules, 2019 do not restrict conversion of lands used for petrol pumps.
BPCL (Respondent No. 5) has no locus standi to challenge the conversion order as its sub-lease expired on 11th September 2020, and it has no proprietary interest in the land.
The Revisional Authority exceeded its jurisdiction under Section 257 of the MLRC by adjudicating contractual disputes between Petitioners and BPCL.
The show cause notice and impugned order were based on unsubstantiated allegations, with no evidence of breach of lease conditions.
Respondents (State and BPCL) contended:
The GR dated 14th July 2021 reflects a binding policy decision to protect public interest by restricting conversion of lands used for essential services.
BPCL has intrinsic rights in the land as it invested substantially in structures and paid lease rents/differential rents.
The Collector’s Order was passed without verifying compliance with the Conversion Rules, 2019 and Government Memorandum.
Petitioners breached lease conditions by using the land for garage, motor parts shop, and clinic, and by sub-letting without permission.
The Revisional Authority rightly considered public interest and statutory provisions in setting aside the conversion order.
Relief Sought
The Petitioners sought:
Quashing of the impugned order dated 5th June 2025 passed by the Revenue Minister.
Restoration of the Collector’s Order dated 20th April 2021, granting conversion to Occupancy Class-I.
Declaration that BPCL has no locus standi to challenge the conversion order.
The Legal Issue
The Court addressed two primary questions:
Whether the Revenue Minister could retrospectively apply the GR dated 14th July 2021 to invalidate the Collector’s Order dated 20th April 2021?
Whether BPCL, as a sub-lessee, has locus standi to challenge the conversion order under Section 257 of the MLRC?
Arguments Presented
For the Petitioners
Retrospective Application of GR: The GR dated 14th July 2021 is an executive instruction and cannot override statutory rules or operate retrospectively. Reliance was placed on Vanshakti & Anr. v. Union of India & Ors., Uday Pratap Singh & Ors. v. State of Bihar & Ors., and Suchitra Component Ltd. v. Commissioner Central Excise, Gunter to argue that executive instructions cannot divest vested rights.
Locus Standi of BPCL: BPCL’s sub-lease expired on 11th September 2020, and it has no proprietary interest in the land. The Lease Deed and Sub-Lease Deed expressly limited BPCL’s rights to structures only. The Collector’s permission dated 2nd June 2001 also clarified that BPCL acquires no right in the land.
Jurisdiction of Revisional Authority: The Revisional Authority under Section 257 of the MLRC cannot adjudicate contractual disputes between lessee and sub-lessee. Such disputes must be resolved by civil courts.
No Evidence of Breach: The show cause notice and impugned order were based on unsubstantiated allegations. The Tahsildar’s inspection report dated 22nd December 2020 confirmed no breach of lease conditions.
Delay in Filing Revision: BPCL filed the Revision Application after 542 days, without satisfactory explanation, warranting refusal of condonation (MTNL v. State of Maharashtra).
For the Respondents
BPCL’s Rights: BPCL contended it has intrinsic rights in the land as it invested substantially in structures and paid lease rents/differential rents. Reliance was placed on Section 2(16) of the MLRC (definition of “land” includes benefits from things attached to the earth) and Section 3 of the Transfer of Property Act, 1882 (definition of “attached to the earth”).
Public Interest: The GR dated 14th July 2021 was issued to protect public interest by ensuring lands allotted for essential services (e.g., petrol pumps) are not converted to Occupancy Class-I.
Breach of Lease Conditions: Petitioners breached lease conditions by using the land for garage, motor parts shop, and clinic, and by sub-letting without permission. The Government Memorandum dated 12th September 1990 restricted use to petrol pump only.
Locus Standi: BPCL argued it was directly affected by the conversion order and had locus standi to challenge it (Lakshmi Narayan Guin & Ors. v. Niranjan Modak).
Remand for Hearing: BPCL sought remand to the Collector for a fresh hearing, arguing it was not given an opportunity to be heard before the Collector’s Order dated 20th April 2021.
The Court's Analysis
Retrospective Application of GR
The Court held that the GR dated 14th July 2021 is an executive instruction and cannot operate retrospectively. The wordings of the GR (“in the future”, “henceforth”) clearly indicate it was intended to apply prospectively only. The Court relied on Vanshakti and Suchitra Component Ltd. to emphasize that executive instructions cannot supplant statutory rules or divest vested rights.
"The expressions ‘in the future’ and ‘henceforth’ negate the submissions of the Respondents that, it reflects a binding policy decision to be effected retrospectively."
The Court observed that the Conversion Rules, 2019 do not restrict conversion of lands used for petrol pumps. The GR dated 14th July 2021 introduced a new restriction not present in the MLRC or Conversion Rules, 2019, making it purely an executive policy decision. Since the Collector’s Order dated 20th April 2021 was passed before the GR, it could not be invalidated retrospectively.
The Court also noted that Petitioner No. 1 had paid a substantial premium of Rs. 6,39,79,790/- pursuant to the conversion order, which crystallized his right to Occupancy Class-I ownership. The reliance on Uday Pratap Singh reinforced that vested rights cannot be taken away by executive orders without statutory authority.
Locus Standi of BPCL
The Court held that BPCL has no locus standi to challenge the conversion order. The Lease Deed dated 5th October 1993 and Sub-Lease Deed dated 14th May 2003 expressly limited BPCL’s rights to structures only, with no proprietary interest in the land. The Collector’s permission dated 2nd June 2001 also clarified that BPCL acquires no right in the land.
"The issue of conversion from leasehold rights to Occupancy Class-I is a matter between the lessor namely the State and the lessee namely the Petitioner. The sub-lessee namely the BPCL will have absolutely no right, title or interest in the subject property."
The Court further noted that the sub-lease to BPCL expired on 11th September 2020, and the Conversion Order was passed on 20th April 2021. Thus, BPCL had no subsisting right in the land at the time of the conversion. The Court rejected BPCL’s contention that it continued as a sub-lessee by holding over, as no rent was accepted after the expiry of the sub-lease, and Section 116 of the Transfer of Property Act, 1882 was not attracted.
The Court distinguished Lakshmi Narayan Guin on the grounds that BPCL’s rights were contractually limited and did not extend to challenging the conversion of the land itself. BPCL’s remedy, if any, lay in civil courts for recovery of damages, not in revisional proceedings under the MLRC.
Jurisdiction of Revisional Authority
The Court held that the Revisional Authority under Section 257 of the MLRC has limited supervisory jurisdiction and cannot adjudicate contractual disputes between lessee and sub-lessee. The Revisional Authority exceeded its jurisdiction by entertaining BPCL’s Revision Application and adjudicating civil rights.
"The Revisional Authority established under Section 257 of the MLRC is a supervisory jurisdiction. It does not have plenary jurisdiction to adjudicate all disputes that may arise between the lessee and the sub-lessee or the civil rights between them."
The Court also noted that the show cause notice and impugned order were based on unsubstantiated allegations, with no fresh evidence contradicting the Tahsildar’s inspection report dated 22nd December 2020, which confirmed no breach of lease conditions. The Revisional Authority’s reliance on the show cause notice without independent verification was unwarranted.
The Verdict
The Bombay High Court allowed the Writ Petition and quashed the impugned order dated 5th June 2025 passed by the Revenue Minister. The Collector’s Order dated 20th April 2021, converting the land to Occupancy Class-I, was restored and declared valid and subsisting. The Court held:
The GR dated 14th July 2021 cannot be applied retrospectively to invalidate the Collector’s Order.
BPCL has no locus standi to challenge the conversion order, as its sub-lease expired and it has no proprietary interest in the land.
The Revisional Authority exceeded its jurisdiction under Section 257 of the MLRC by adjudicating contractual disputes.
The Court rejected the request for stay of the order and made no order as to costs.
What This Means For Similar Cases
Executive Instructions Cannot Retrospectively Invalidate Statutory Rights
Prospective Operation: Executive instructions (e.g., GRs) operate prospectively unless expressly stated otherwise. Practitioners must argue that GRs cannot override statutory rules or divest vested rights.
Statutory Framework: Courts will prioritize statutory rules over executive instructions. Where a statutory provision (e.g., Conversion Rules, 2019) is silent on a restriction, an executive instruction cannot introduce it retrospectively.
Vested Rights: Once a statutory right (e.g., conversion to Occupancy Class-I) is crystallized (e.g., by payment of premium), it cannot be taken away by executive action without statutory authority.
Limited Locus Standi of Sub-Lessees in Revenue Proceedings
Contractual Rights vs. Proprietary Interest: Sub-lessees with no proprietary interest in land (e.g., rights limited to structures) cannot challenge conversion orders under Section 257 of the MLRC.
Expiry of Sub-Lease: If a sub-lease expires before the conversion order, the sub-lessee has no subsisting right to challenge the order. Holding over requires acceptance of rent, which was absent in this case.
Civil Remedy: Sub-lessees aggrieved by non-renewal of sub-lease or conversion orders must seek civil remedies (e.g., damages), not revisional proceedings under revenue laws.
Jurisdictional Limits of Revisional Authority Under MLRC
Supervisory Jurisdiction: The Revisional Authority under Section 257 of the MLRC has limited jurisdiction to examine legality and propriety of orders, not to adjudicate contractual disputes or civil rights.
No Plenary Powers: Revenue authorities cannot expand their jurisdiction to resolve inter se disputes between lessee and sub-lessee. Such disputes must be adjudicated by civil courts.
Evidence-Based Adjudication: Revisional orders must be based on substantive evidence. Allegations in show cause notices must be verified independently, and inspection reports cannot be ignored without contradictory evidence.
Practical Takeaways for Practitioners
Timeline of Rights: Always map the timeline of lease/sub-lease expiry, conversion orders, and GRs to argue retrospective vs. prospective application.
Documentary Evidence: Ensure lease/sub-lease deeds clearly define rights and limitations (e.g., proprietary interest in land vs. structures).
Public Interest vs. Vested Rights: Argue that public interest cannot override vested rights unless statutorily provided.
Delay in Filing: Highlight unexplained delays in filing revision applications to oppose condonation (MTNL v. State of Maharashtra).
Remand Applications: Oppose remand applications where the aggrieved party has no locus standi or where no fresh evidence justifies reopening concluded issues.
