Judgment M.Y.Eqbal, J. 1. In this writ application the petitioner has prayed for quashing the order dated 5.2.1999 passed by respondent no. 4 Industrial Development Commissioner, Government of Bihar dismissing the appeal preferred by the petitioner and held that the concerned respondent is justified in cancelling the lease of the petitioner. By filing amendment petition, petitioner has also prayed for quashing the order of cancellation which was communicated by the respondent vide letter dated 13.5.98. 2. Petitioners case in brief is that the land measuring 4.27 acres was allotted to the petitioner vide letter dated 25.11.91. In terms of the allotment order, petitioner deposited full consideration amount of Rs. 4,14,190/- on 25.11.91 and started paying rent regularly for the occupation of the said land. It is stated that the possession of the land was given in December, 1991 but inspite of that lease deed was not executed and registered in favour of the petitioner. But on much pursuance lease deed was executed and registered on 25.6.96. Petitioners case is that after execution of the lease deed petitioner started its Scrap Processing Unit for which several lakhs of rupees were spent for the development of the land. Since the Scrap Processing business was not picking up, petitioner submitted fresh proposal to the respondent for starting Sheet Metal Project business but till date no response was given from the side of the respondent. Surprisingly, by letter dated 12.9.97 respondent issued show-cause notice as to why allotment of the lease be not cancelled as the petitioner was not utilising the land for the purpose the land was transferred to the petitioner. In response to the said notice petitioner informed the Authority that the Managing Director of the Company was outside India in connection with business and request was made for time. Petitioner then vide letter dated 5.1.98 requested the respondent- authority to allow it atleast reasonable time to implement export oriented Sheet Metal project. This letter was given in response to letter of the respondent Authority dated 11.11.97. Petitioners further case is that without taking any decision for extension of time and without giving opportunity of hearing the factory premises of the petitioner was sealed in July, 1998 when the petitioner learnt that the lease was cancelled on 13.5.99. Petitioner then preferred an appeal before the respondent authority which was rejected by the impugned order. 3. Petitioners further case is that without taking any decision for extension of time and without giving opportunity of hearing the factory premises of the petitioner was sealed in July, 1998 when the petitioner learnt that the lease was cancelled on 13.5.99. Petitioner then preferred an appeal before the respondent authority which was rejected by the impugned order. 3. In the Counter-affidavit filed by the respondent AIIDA it is stated inter-alia that the land was allotted to the petitioner by Virtue of allotment order dated 25.11.91 coupled with a bond executed by the petitioner. After taking possession of the land there was no satisfactory progress till 1994 towards implementation of the project for which land was allotted. As per the terms of the allotment show cause notice for cancellation of allotment was issued in 1993. In 1995 petitioners Company had applied before the respondent-Authority for approval of fresh proposal of Sheet Metal Job. Respondent with a view to give opportunity to the petitioner to start industry executed registered lease deed in the year 1996. But inspite of that petitioner had not even constructed any work shed nor installed any related machinery on the allotted plot to carry out the job. Again show-cause notice was issued on 12.9.97 followed by another show-cause notice dated 11.11.97. In response to the show cause notice petitioners Company requested for further time of one year without giving any concrete plan and implementation schedule. Since petitioner failed to file any show-cause, respondent Authority cancelled the allotment vide cancellation order dated 13.5.98 and the petitioner was directed to remove the articles from the land. It is further stated by the respondent-Authority that after 2 1/2 months from the date of order of cancellation the premises was sealed on 27.7.98 and detailed inventory list was prepared in presence of the Executive Magistrate and the possession was taken on 28.7.98. !t is stated that the appeal preferred by the petitioner was also dismissed and their possession was given to respondent no. 5 who is new allottee of the premises in question. 4. A separate counter-affidavit has been filed by respondent no. 5 in whose favour land in question has been allotted. !t is stated that the appeal preferred by the petitioner was also dismissed and their possession was given to respondent no. 5 who is new allottee of the premises in question. 4. A separate counter-affidavit has been filed by respondent no. 5 in whose favour land in question has been allotted. It is stated in the counter-affidavit that after cancellation of the allotment the premises was allotted to him and as per the allotment order said respondent has deposited certain amount towards first instalment and also cost of structure existing on the land. Respondent no. 5 further stated that after taking possession of the premises he has invested some amount for improvement of the land and further got sanction of capita! loan from the bank and also applied for Sales-tax and Excise Registration. It is further stated that the lease deed has been executed in favour of the respondent no. 5 on 31.7.99. 5. I have heard Mr. M. M. Banerjee, learned counsel for the petitioner and Mr. B. B. Sinha, learned counsel for the respondent. Mr. Banerjee, on the one hand submitted that admittedly the proposal was sent to the respondent for starting Sheet Metal Project but without considering the said proposal and without giving any specific time to the petitioner the lease deed was cancelled by the respondent, that too, without giving any opportunity of hearing to the petitioner. On the other hand the contention of Mr. B. B. Sinha, [earned counsel for AIIDA is that ample opportunity was given to the petitioner for starting the business for which land was transferred to it but inspite of that there had been no progress of work and consequently respondent Authority cancelled the lease. 6. Before appreciating the rival contention of the parties, it would be useful to look into the terms and conditions of the allotment order and the lease deed in respect of the premises in question. From the copy of the allotment order as contained in Annexure-1 to the writ application, it appears that the respondent agreed to allot 4.27 acres of land in favour of the petitioner for setting up industry in the Industrial Area. By the said allotment order petitioner was directed to pay Rs. 4,14,190/- and further had to pay ground rent. From the copy of the allotment order as contained in Annexure-1 to the writ application, it appears that the respondent agreed to allot 4.27 acres of land in favour of the petitioner for setting up industry in the Industrial Area. By the said allotment order petitioner was directed to pay Rs. 4,14,190/- and further had to pay ground rent. Clause 7 of the allotment letter provides "that the status of the unit over the allotted land will be that of the licence till the lease deed is executed and registered." It is provided in the said allotment order that in case the proposed factory is not set up within the period mentioned or within the such extended period as the authority may allow after considering the circumstances then its deposit towards the premium of land alongwith the construction, installation, fixtures and equipment thereupon shall be liable to be forfeited to the Authority. Clause 11 of the allotment order reads as under : "That in case the allottee does not comply with the requirements of the clauses 1.1, 1.2 and 1.3 within a month of the date of allotment, the order will stand automatically cancelled. 7. Admittedly the allotment was not cancelled till 1996 rather the respondent executed registered deed of lease dated 25.6.96. A copy of the registered deed of lease has been annexed as Annexure-A to the counter-affidavit filed by the AIIDA. From perusal of the lease deed it appears that the premises in question was given on lease for a period of 90 years In consideration of payment of Rs. 4,14,190/- being full cost of the total value of the land allotted to the petitioner. It has been categorically stated in paras 5 and 6 of the writ application that petitioner paid full consideration amount of Rs. 4,14,190/- and also started paying rent for occupation of the premises. This statement has not been denied in the counter affidavit. The lease deed contains various terms and conditions. Para 7 of the lease deed provides that : "In case of breach by the leasee any of the terms and conditions the lessor shall have right to determine to this lease and forfeit the consideration money to resume and enter upon the whole of the said land without payment of any compensation to the lessee and upon such entry the interest of the lessee in the said shall cease and terminate. Provided that lessee shall be given by the lessor reasonable opportunity to show cause and to rectify the commissions or default if any." 8. In the light of the terms and conditions of the allotment order coupled with lease deed particularly clauses quoted hereinabove the only question fails for consideration is as to whether the cancellation of lease by the respondent authority is justified. 9. As noticed above although possession of the land was given in 1991 but lease deed was executed only on 25.6.96. There is no averment in the counter-affidavit that the lease deed was not executed because of the latches and negligence on the part of the petitioner. On 11.11.97 respondent-Authority issued notice to the petitioner stating inter-atia that no satisfactory explanation has been given for not commencing the project over the land for which it was allotted. By the said notice respondent called upon the petitioner to show-cause as to why production has not been started and what is their future planning so that the respondent-Authority may take a decision to take action for cancellation of allotment. The relevant portion of the notice reads as under: LOCAL LANGUAGE 10. In response to the said notice petitioner sent reply dated 5.1.98 stating inter-alia that the present activities of processing and supply of material have been affected due to production activities of TISCO and TELCO. Petitioner informed the respondent that they are thinking of diversifying the activities and for that purpose petitioner decided to set up another unit to augment their supplies. Alongwith said reply copy of the fresh project report for setting up of unit for Sheet Metal Job was submitted by the petitioner. Petitioner therefore requested for the approval of the project and grant one year time for the purpose. Although in the counter-affidavit it is stated that on receipt of the letter, respondent decided not to grant any further time to the petitioner and cancelled the allotment, but admittedly such decision for not granting time was not communicated to the petitioner. The impugned order of cancellation of allotment has been annexed as Annexure-A to the counter-affidavit. From perusal of the order it appears that the Managing Director proceeded on the basis that inspite of notice dated 11.11.97 calling upon the petitioner to show cause as to why allotment should not be cancelled, no satisfactory explanation was given by the petitioner. The impugned order of cancellation of allotment has been annexed as Annexure-A to the counter-affidavit. From perusal of the order it appears that the Managing Director proceeded on the basis that inspite of notice dated 11.11.97 calling upon the petitioner to show cause as to why allotment should not be cancelled, no satisfactory explanation was given by the petitioner. The Authority therefore on non submission of explanation cancelled the allotment. The Appellate Authority confirmed the order of cancellation on the same ground that petitioner failed to give satisfactory show-cause in response to the cancellation notice dated 11.11.97. I have quoted the relevant portion of the notice dated 11.11.97 issued by the respondent which is the basis for cancellation of the allotment. From bare reading of the notice it appears that respondent asked the petitioner to inform the respondent as to why production has not been started and what is their future course of action so that the respondent-Authority may think of taking action for cancellation of allotment. It is therefore clear that notice dated 11.11.97 is not the notice to show cause as to why allotment should not be cancelled. As noticed above petitioner immediately sent reply to the said notice on 5.1.98 giving a fresh proposal for setting up another unit for Sheet Metal Job and requested for grant of time but the said letter was not replied by the respondent. Rather taking notice dated 11.11.97 as show-cause notice for cancellation, the respondent cancelled the allotment by passing the impugned order. 11. Admittedly, by virtue of registered deed of lease premises in question was transferred in favour of the petitioner for a period of 90 years under certain terms and conditions and entire consideration amount was paid by the petitioner on the date of allotment itself and also deposited rent of the premises. Clause 7 of the lease deed quoted hereinabove very specifically provides that before determination of lease and resumption of lease respondent has to give reasonable opportunity of hearing to the petitioner and also to give opportunity to rectify the commissions of the defects, if any. It is therefore evident that the impugned order of cancellation of allotment has not been passed after complying the requirement and the terms and conditions provided in the lease agreement. It is therefore evident that the impugned order of cancellation of allotment has not been passed after complying the requirement and the terms and conditions provided in the lease agreement. Not only that clause 11 of the lease agreement also specifically provides that the right and liability of the leasor and the leasee shall be in accordance with the provision of Section 108 of the Transfer of Property Act. In that view of the matter also respondents have not followed the provisions of Transfer of Property Act while cancelling/determining the allotment of the lease and forfeiting the consideration amount. 12. Mr. V. Shivnath, learned counsel for respondent no. 5 submitted that after cancellation of the lease agreement a fresh lease was executed in respect of the same land in favour of the respondent no. 5 who has already spent huge amount towards development of the land. From perusal of counter-affidavit of respondent no. 5 it does not appear that respondent no. 5 has spent huge amount towards the development of the land, rather it is stated that respondent no. 5 has applied for grant of SSI Registration Certificate and also applied for sanction of load from bank and other financial institutions. Be that as it may, when the cancellation and determination of allotment of land and the lease deed is illegal and arbitrary then this Court cannot decline to interfere merely because the land was subsequently allotted to respondent no. 5. Mr. V. Shivnath relied upon the decision of this Court in the case of "M/s Ujjawal Coal Pvt. Ltd. V/s. State of Bihar & ors." [(1999-I-BLJR-974) : 1999 (2) PLJR 174] and submitted that in similar circumstances this Court has not interfered with the order of cancellation. In my opinion facts of that case is entirely different from the facts of this case. In the case relied upon by the respondent, the petitioner was granted provisional registration certificate which was expired and thereafter petitioner applied for grant of fresh registration certificate. In the meantime the petitioner did not fulfill the terms and conditions of the lease deed. Taking into consideration some important facts, this Court held as under : "In this case, according to the own assention of the petitioner his provisional registration had expired and he did not pay the dues. In that view of the matter, no case to interfere with the cancellation order is made out. Taking into consideration some important facts, this Court held as under : "In this case, according to the own assention of the petitioner his provisional registration had expired and he did not pay the dues. In that view of the matter, no case to interfere with the cancellation order is made out. There is another ground not to interfere with the cancellation order. The order was passed on 4.10.94 but the petitioner did not challenge the same and thereafter, he applied for grant of fresh provisional registration as well as allotment of land. In the said application, he has clearly mentioned that his land has been cancelled on 4.10.94." 13. In the instant case as noticed above admittedly before cancellation of allotment and the lease agreement a notice of show-cause was not served on the petitioner in as much as the notice dated 11.11.97 was not notice for proposed cancellation rather it was notice calling upon the petitioner to give explanation about his future course of action so that respondent- Authority may think to initiate action for cancellation of allotment. 14. Having regard to the entire facts and circumstances of the case, I am of the opinion that the order of cancellation passed by the respondent-Authority as also the order passed by the Appellate Authority is illegal, arbitrary, unjustified and violative of principles of natural justice and the same are accordingly quashed. Consequently all subsquent actions of the respondent in granting lease in favour of the respondent no. 5 and handing over the possession are also illegal and cannot be sustained in law. Before parting with this order I must clarify that the respondent-Authority may proceed against the petitioner for cancellation of allotment and determination of lease in accordance with law and in accordance with terms and conditions of the letter of allotment and the lease of deed. This writ application is accordingly allowed.