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2003 DIGILAW 1060 (JHR)

Prime Alloy Steels Pvt. Ltd. v. State Of Jharkhand

2003-08-29

TAPEN SEN

body2003
ORDER Tapen Sen, J. 1. Heard Mr. P.K. Prasad, learned counsel appearing for the petitioner; Mr. R.C.P. Sah, learned counsel appearing for the respondent Nos. 2 to 5 and Mr. Avishek Kumar, JC to the learned Advocate General appears for the State of Jharkhand. 2. The petitioner, in the instant case, has challenged the communication/order dated 13.2.2002 as contained in Anenxure 7 passed by the Managing Director of the Adityapur Industrial Area Development Authority (hereinafter referred to for the sake of brevity and precision as the authority), whereby and whereunder the lease of the land measuring 2.00 acres being Plot No. M-50 which was allotted to the petitioner in the fourth phase for setting up an industry was cancelled in purported exercise of powers under Sections 6(2-a) and (2-b) of the Bihar Industrial Area Development Authority Act, 1991. The aforementioned two sections, according to Mr. R.C.P. Sah, were introduced by the Bihar Industrial Area Development Authority (Amendment) Bill 1991 which subsequently was enacted and in the counter affidavit it has been further stated that the aforementioned Act has now been adopted by the State Government and is known as Jharkhand Industrial Area Development Authority Act. The aforementioned sections have been quoted in the counter affidavit at paragraph 11 and they read thus :-- "(2-a) In case necessary effective steps are not taken within the fixed period to establish the industry, the authority shall in such condition, cancel the allotment of the allotted plot/ shed and forfeit the amount deposited in this connection. The authority shall, before canceling the allotment allow one month time to the, allottee to put up his case. The allottee on being dissatisfied with the order of the authority may file an appeal to the State Government within one month and the State Government shall, after due consideration dispose it of within two months from the date of receipt of the appeal. (2-b) The authority shall, after cancellation of allotment of the plot/shed take possession of the said plot/shed." 3. Upon perusal of the aforementioned two provisions of law and reading the same in juxtaposition with the impugned order, the point that needs to be taken note of and/or considered is, as to whether the petitioner took necessary effective steps and as to whether the petitioner did not take necessary steps so as to attract the provisions for cancellation as stipulated in the aforementioned two sections. In order to adjudicate and/or find out the answer to the aforementioned question, it becomes necessary for this Court to delve into the facts. 4. On 15.3.1997, it appears that pursuant to a proposal for allotment of land to the petitioner and as required by the authority, the petitioner deposited a Demand Draft dated 14.3.1997 for a sum of Rs. 3,13,390/- being the value of the Plot of land so allotted. The photocopy of the said Demand Draft along with its forwarding letter are marked Annexure 1 to the instant Writ Application. Having received the aforesaid Demand Draft, the authority on the next month, i.e., 17.4.1997 allotted 2.00 acres in its fourth phase-the plot number being M-50. 5. The land which was allotted to the petitioner was low-lying and it was situated adjacent to a big lake (perhaps commonly referred to as the Yamuna Bandh). On account of its proximity to the said lake, the area remained inundated with water. The fact that it was a low-lying area and that it therefore required filling up by external material such as slag, was brought to the notice of the authority by letter dated 2.9.1997 issued by the Director of the petitioner and addressed to the Managing Director of the authority. In the said letter it was stated that the plot is very low and therefore either M/s. TISCO (Tata Iron and Steel Company Limited) or M/s. Usha Martin Industries Ltd. be requested to fill up the land and for the said purpose, the petitioner also informed that any terms and conditions would be acceptable to them. This letter was sent on 3.9.1997 and it appears that the Officers of the authority did not effectively cooperate in the matter relating to solving of this vitally important problem which was integral for the commencement of the setting up of the industry. The fact that the area was low-lying was all along within the knowledge of the authority because firstly after receiving the letter dated 2.9.1997 the Development Officer of the authority wrote a letter to M/s. Usha Martin Industries Ltd. (Disposal Department) wherein they stated-that a plot of land measuring 2.00 acres being Plot No. M-50 had been allotted and delivery of possession given to the petitioner. He further stated that this land was a low- lying area and therefore this required dumping by slag. He further stated that this land was a low- lying area and therefore this required dumping by slag. Consequently they requested M/s. Usha Martin Industries Ltd. to dump slag as per their own terms and conditions. Can this letter which has been brought on record by Anenxure A to the counter affidavit be said to be a positive effort on the part of the authority to cooperate and/or help the petitioner? The answer, upon reading other documents, would be an emphatic No 1 and this would be evident from the following sequence of events :-- 6. Almost three years thereafter, i.e., 18.8.2001 the Managing Director of the authority issued a notice to show cause asking the petitioner to explain as to why the allotment be not cancelled because the petitioner-unit had not taken any steps towards commencement of the project/industry for which the land had been given. In the aforementioned direction to show cause it was further required that the petitioner must explain as to why for the said lapse, the amount paid by the petitioner be not forfeited. It is reply to that letter that so many things become exposed. 7. It is from that letter, that it appears that firstly, upon the own initiative of the petitioner. M/s. Tata Iron and Steel Company Ltd. had started the dumping of slag but within a few days, they stopped doing so because of a ban imposed upon the movement of dumpers over the Aditypaur-Kharkai Bridge. It is also apparent that thereafter the petitioner contacted the authority whereafter they were told that M/s, Usha Martin Industries Ltd. is an alternative agency which can aid and assist in the dumping of slag. Upon the aforesaid information being given to the petitioner, they tried to get the slag dumped through M/s. Usha Martin Industries Ltd. but they came to learn that the same authority had very recently allotted 150 acres of additional land to them which also required dumping by slag. They also came to learn that M/s. Usha Martin Industries Ltd. themselves required the slag for filling up the said additional allotted area and they could attend to the requirement of the petitioner only after they had completed their own job. In reply, the petitioners further informed that inspite of innumerable efforts, the land could not be filled up and that was the reason why work could not commence. In reply, the petitioners further informed that inspite of innumerable efforts, the land could not be filled up and that was the reason why work could not commence. It was further stated that they were still ready and witling to continue with their project and that they had already deposited the entire amount and also necessary rent till the year 1999 and were also willing to deposit the rest of the money also. This reply to the show cause was sent on 14,9.2001 and it is contained in Anenxure 5. Three months went by, yet nothing happened and therefore having been put in such a situation, the petitioners sent a letter dated 26.12.2001 informing them that due to water-logging, they could not start their project and therefore they wished to surrender the allotment and accordingly requested the refund of the money deposited by them after deducting dues, if any. It appears that together with the aforementioned letter, a deed of surrender was also executed and as per the statement made in paragraph 10 of the counter affidavit, the said deed duly received in the office of the Respondent No. 2 on 16.1.2002. It is thereafter, i.e., on 13.2.2002, that the impugned order was passed. 8. According to Mr. R.C.P. Sah. the petitioner do not deserve any consideration by this Court inasmuch as they have failed to start the industry notwithstanding a valid allotment having been made in the year 1997 and therefore they were not only liable to cancellation of their allotment, but they were also liable to forfeiture of whatever amount that they might have deposited in terms of Sections 6(2-a) and (2-b) of the aforementioned Act. 9. Upon perusal of the narration of the sequence of events made in this Writ Application, it is evident that while making the allotment, the authority was exercising commercial jurisdiction of grant of largesse. It is well known that the Government and/or the State, while dealing with the public or the citizens of India and while entering into commercial transactions by way of granting of largesse, acts in a capacity where it abdicates its sovereign functions of the Government and substitutes it with ordinary commercial transactions just like any other businessman. It is well known that the Government and/or the State, while dealing with the public or the citizens of India and while entering into commercial transactions by way of granting of largesse, acts in a capacity where it abdicates its sovereign functions of the Government and substitutes it with ordinary commercial transactions just like any other businessman. To that extent therefore, every act of the State must satisfy the test of reasonableness as enshrined in Article 14 of the Constitution of India as otherwise, any action which is irrational or not reasonable has got to be struck down as being de hors the provisions of Article 14 of our Constitution. From the pleadings made in the instant Writ Application it is further apparent that the authority and/or its officers were fully aware that the land which they were allotting to the petitioner was a low-lying area, situated adjacent to a big lake and which remained inundated through out the year. Such a piece of land was given to the petitioner for starting a mega project. Was it on a golden platter or was it a charity on the part of the respondents? The respondent authorities took money for such a plot of land and they were also fully aware that unless the area was filed with slag, it could never become an area where a project could start. When M/s. Tata Iron and Steel Company Ltd. started dumping the slag, this work came to a stand-still because of the restriction/ban imposed on the movement of dumpers on the Adityapur- Kharkai Bridge. When thereafter the petitioner rushed and turned to M/s. Usha Martin Industries Ltd., they were told that the same authority had made an additional allotment of another law-lying area to the extent of 150 acres to them and they therefore, could not possibly attend to the needs of the petitioner. There was, therefore no fault with the petitioner. 10. Therefore, the reason for not starting the unit/industry by the petitioner was beyond its control. There was, therefore no fault with the petitioner. 10. Therefore, the reason for not starting the unit/industry by the petitioner was beyond its control. Being totally innocent they were slapped with a show cause notice and when they brought out the full details, the respondents started showing their reaction and the moment the petitioner told them that they could take back their land and return the money which the petitioner had paid, their reaction was so volatile that they not only cancelled the allotment but have also proceeded to seize the entire money which the petitioners have deposited, without there being any fault on their part. On the contrary, it is clear that the petitioner could not commence work because of the water logged low-lying area which remained in that state notwithstanding best efforts of the petitioner to get the same filled up. If TISCO did not complete the work because of the ban on the movement of Dumpers and if M/s. Usha Martin Industries did not attend because of their own requirement, it became a veritable impossibility for the petitioner to even commence work. The principle lex non cogit ad impossibilia therefore, protects the petitioner. 11. This is one of those cases where a famous philosophy of the Honble Supreme Court of India compels this Court to take note of the same and that is, the concept of inequalities on account of parties being in superior bargaining power subjecting another party who is in an inferior bargaining power to succumb to their desires and/or dictates. Mr. R.C.P. Sah, learned counsel for the petitioner at this stage stated that the petitioners were also well aware that the land was low-lying and therefore they should not have taken possession of the land at all. He further submits that once the petitioner took and accepted the land/allotment, it must be estopped from making any grievances that it was law-lying etc. 12. Such a statement of Mr. R.C.P. Sah cannot be accepted and this Court must reach out and undo injustice and in order to meet the aforesaid point of Mr. R.C.P. Sah, the only question that crops up in the conscience of this Court is that did the petitioner have any choice? 12. Such a statement of Mr. R.C.P. Sah cannot be accepted and this Court must reach out and undo injustice and in order to meet the aforesaid point of Mr. R.C.P. Sah, the only question that crops up in the conscience of this Court is that did the petitioner have any choice? The petitioners wanted to start an industry for which they knew that it was the authority which was in possession of lands and therefore they had no option but to approach the authority. When a low-lying area was given, the petitioner did not have the option to refuse to accept it. It is in this context that paragraph 90 of the judgment of the Honble Supreme Court of India passed in the case of Central Inland Water Transport Corporation Ltd. and another v. Brojo Nath Ganguly and Anr., reported in AIR 1986 SC 1571 , needs to be taken note of :-- "Should then our Courts not advance with the times? Should they still continue to cling to outmoded concepts and outworn ideologies? Should we not adjust our thinking caps to match the fashion of the day? Should all juris- prudential development pass us by, leaving us floundering in the sloughs of nineteenth-century theories? Should the strong be permitted to push the weak to the wall? Should they be allowed to ride roughshod over the weak? should the Courts sit back and watch supinely while the strong trample under foot the rights of the weak? We have a Constitution for our country. Our judges are bound by their oat to "uphold the Constitution and the laws." The Constitution was enacted to secure to all the citizens of this country social and economic justice. Article 14 of the Constitution guarantees to all persons equality before the law and the equal protection of the law. The principle deducible from the above discussions on this part of the case is in consonance with right and reason, intended to secure social and economic justice and conforms to the mandate of the great equality clause in Art. 14. This principle is that the Courts will not enforce and will, when called upon to do so, strike down an unfair and unreasonable contract, or an unfair and unreasonable clause in a contract, entered into between parties who are not equal to bargaining power. This principle is that the Courts will not enforce and will, when called upon to do so, strike down an unfair and unreasonable contract, or an unfair and unreasonable clause in a contract, entered into between parties who are not equal to bargaining power. It is difficult to give an exhaustive list of all bargains of this type. No Court can visualize the different situations which can arise in the affairs of men. One can only attempt to give some illustrations. For instance, the above principle will apply where the inequality of bargaining power is the result of the great disparity in the economic strength of the contracting parties. It will apply where the inequality is the result of circumstances, whether of the creation of the parties or not. It will apply to situations in which the weaker party is in a position in which he can obtain goods or services or means of livelihood only upon the terms imposed by the stronger party or go without them.It will also apply where a man has nochoice, or rather no meaningful choice,but to give his ssent to a contract or to sign on the dotted line in a prescribed or standard form or to accept a set of rules as part of the contract, however unfair, unreasonable and unconscionable aclause in that contract or form or rules may be. This principle, however, will not apply where the bargaining power of the contracting parties is equal or almost equal. This principle may not apply where both parties are businessmen and the contract is a commercial trans action. In todays complex world of giant corporations with their vast infrastructural organizations and with the State through its instrumentalities and agencies entering into almost every branch of industry and commerce, there can be myriad situations which result in unfair and unreasonable bargains between parties possessing wholly dispropor tionate and unequal bargaining power. These cases can neither be enumerated nor fully illustrated. The Court must judge each case on its own facts and circumstances." (Italics by Court)- 13. These cases can neither be enumerated nor fully illustrated. The Court must judge each case on its own facts and circumstances." (Italics by Court)- 13. It is true that the aforesaid judgment was rendered in the backdrop of contractual obligations but the concept and the principle underlying the famous words of the Apex Court are so meaningful and apt to the factuals of this case that one has to reach to the inescapable conclusion that the petitioner had no choice but to accept whatever was offered to it at the time of the allotment. Following therefore the last sentence of the paragraph quoted above from the judgment of the Honble Supreme Court, this Court has judged this case taking into consideration its own facts and circumstances and accordingly holds that the plea of estoppel as submitted by Mr. R.C.P. Sah, cannot be accepted. 14. In the instant case the respondents have further pleaded that there is an alternative remedy and the petitioner can not invoke the jurisdiction of this Court under Article 226 of the Constitution. 15. This argument also does not find any favour with this Court, because the writ-petitioner prays for issuance of a writ of certiorari for quashing an order. In the opinion of this Court, the aforementioned order is totally arbitrary which cannot prevent the exercise of jurisdiction under Article 226 of the Constitution notwithstanding the availability of an alternative forum. That apart the plea of existence of alternative remedy does not compel this Court to reject an application when the Court is satisfied that the action perpetrated is so unfair or illogical that it would be a travesty . of justice to relegate a person seeking justice to their own jurisdiction. The strong should not be permitted to push the weak to the wall and the Courts cannot sit back and watch supinely while the strong tramples the weak. We have given a Constitution to ourselves and we are bound to uphold the Constitution and the laws. These are again the words of the Honble Supreme Court of India, which have been quoted above and therefore, following the judgment of the Honble Supreme Court of India referred to above, this Court has no hesitation in coming to the conclusion that the action of the respondents in issuing the impugned order is not only illegal but is totally unconstitutional, unreasonable and irrational. It is accordingly set aside and quashed. The petitioner shall now have liberty to produce this judgment before the authority and make a fresh prayer for acceptance of the surrender and for refund of their money and upon receipt of such application, the Managing Director of the authority shall pass an order in accordance with law after taking into consideration the observations made herein him a period of two weeks from the date of receipt of such representation. The Writ Application is allowed. The impinged order dated 13.2.2002 as contained in Annexure-7 is quashed. There shall however, be no order as to costs.