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Bombay HC – Change in Shareholding by disinvestment is not transfer of land of State Government

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Judgment dated 1.12.2025 of the High Court of Bombay in Writ Petition No.362 of 2015 of Tata Communications Limited   Vs.   State of Maharashtra and others

The government land at Bandra was allotted to Overseas Communications of Government of India Company in 1991 for staff quarters.  OCS later on merged into VSNL which became Tata Communications Ltd. VSNL diluted its 100% share holding initially in favour of its employees, financial institutions and subsequently by divesting a substantial portion of its shareholding to TCL – petitioner. However, the Central Government continues to retain 25% stake in TCL. 

However, the Collector treated the said transfer of share holder as transfer of the State Government land to TCL and imposed the penalty of Rs.26.06 crores as unearned income recoverable as land revenue.

HELD that the mere dilution of shareholding in VSNL cannot, therefore, be characterized as a “transfer of the writ land” to TCL nor can it be construed as an indirect attempt to achieve what could not be achieved directly.

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