JUDGMENT [Per : Hon’ble Barin Ghosh, C.J.] In this Public Interest Litigation, in the form of a writ petition, the petitioner has complained of sinister mode adopted by the State in permitting a limited liability Company to deal with land belonging to the people of the State. 2. The facts of the case, as have come on record, are that on 21st July, 1960, Ministry of Commerce and Industry, Government of India, granted a license to M/s Nowrosjee Wadia & Sons Pvt. Ltd. to manufacture 3,025 tons of Calcium Carbonate per annum. By an amendment dated 8th December, 1960, the said license permitted establishment of the factory at Rishikesh in the district of Dehradun. M/s Nowrosjee Wadia & Sons Pvt. Ltd. Promoted Sturdia Chemicals Ltd. (hereinafter referred to as “Sturdia”) for the purpose of establishing a factory to take advantage of the said license. Thereupon, a site was selected for establishment of the factory. The land of the site ostensively belonged to Sri Shanti Prapan Sharma, M.L.A., Dehradun, and his younger brother Lalit Mohan Sharma. M/s. Nowrosjee Wadia & Sons. Pvt. Ltd. entered into two agreements; one with Shanti Prapan Sharma and the other with Lalit Mohan Sharma, both dated 29th July, 1960, and thereby, agreed to purchase 34.98 acres of land at Rs. 2,000/- per acre and 15 acres of land at Rs. 1,750/- per acre. Though the said land was claimed by the vendors as Bhumidhari land, sale thereof, pursuant to the said agreements, could not be effected. Accordingly, M/s Nowrosjee Wadia & Sons. Pvt. Ltd. applied for acquisition of the said land. 3. Subsequent thereto, on 19th June, 1961, an agreement was entered into between the Governor of Uttar Pradesh and Sturdia. The agreement made it clear that Sturdia will pay to the State Government, all such sums of moneys as shall be awarded under the provisions of the Land Acquisition Act, 1894 (hereinafter referred to as the “1894 Act”), as compensation, to pay any person or persons, who may be found, on inquiry held under the provisions thereof, to be interested in the said land. By the said agreement, Sturdia agreed to pay, to the State Government, compensation on account of the rights of intermediary (if any), which shall vest in the State Government in pursuance of the provisions of the said Act. By the said agreement, Sturdia agreed to pay, to the State Government, compensation on account of the rights of intermediary (if any), which shall vest in the State Government in pursuance of the provisions of the said Act. The agreement recorded satisfaction of the State Government that the acquisition of the land is needed for the construction of the work, viz., Calcium Carbonate Factory of the Company with its attendant buildings, godowns, stock-yard etc. and dwelling houses for the workmen employed by the Company and the members of its staff and amenities directly connected therewith and that such work is likely to prove useful to the public. The agreement provided, amongst others, as follows : “...That upon the Company having made all the payments incidental to the acquisition of such land as mentioned in clauses 1, 2 and 3 hereof, the Governor will forthwith, in consideration of the payment of such compensation money and cost of the acquisition, convey and grant to the Company the said land described in Schedule I hereto, to hold the same unto and to the use of the said Company forever, subject to the conditions hereinafter set forth, namely : (a) that the Company, its successors and assignees will use the said land for the aforesaid purpose and for no other purpose without the previous sanction in writing of the State Government; (b) ........ (e) that if the said land or any part or parts thereof shall no longer be required by the Company, then the Company will forthwith relinquish and restore the same after removing all buildings and structures to the Governor at a price equal to the amount paid by it under the said Land Acquisition Act (including the amount awarded in respect thereof under section 23(2) of the said Act); (f) that in the case of a breach by the Company of any of the terms and conditions of this agreement, the Governor shall give a notice of six months to the Company to remedy the breach complained of and if the Company shall fail to do so, the Governor shall be entitled to re-enter on the whole of the said land without payment of any compensation to the Company and upon such re-entry, the interest of the Company in the said land shall cease and determine that, in the event of re-entry by the Governor of Uttar Pradesh under this clause, that Company shall be entitled to remove within six months from the date of such entry, all buildings and structures on the said land; provided not removed within the period as aforesaid shall vest absolutely in the Governor and all rights of the Company shall cease in respect of such buildings and structures without any compensation; (g) that should any dispute or difference arise touching or concerning the subject matter of this agreement or any covenant or clause or things therein contained other than a dispute or difference as to the valuation of the buildings determined or to be determined under the provisions of clause (d) above, the same shall be referred to the Secretary to the State Government in the Industries Department whose opinion and decision upon such dispute or differences shall be final and conclusive and binding on the parties hereto.” 4. Soon thereafter, three plots of land, containing 15.2327 acres, 19.7406 acres and 15.4924 acres, were acquired under the provisions of the 1894 Act. In relation to the said acquisition, on 8th August, 1962, an Award was made and published. The market value of the land was assessed at Rs. 97,067.50 and the market value of the trees standing thereon was ascertained at Rs. 7,733.75 with that, a sum of Rs. 3,666/- was added on account of rent and Rs. In relation to the said acquisition, on 8th August, 1962, an Award was made and published. The market value of the land was assessed at Rs. 97,067.50 and the market value of the trees standing thereon was ascertained at Rs. 7,733.75 with that, a sum of Rs. 3,666/- was added on account of rent and Rs. 10,420/- was added on account of service and establishment charges. The Award also awarded interest at the rate of 6 per cent per annum. Thereafter, on 14th December, 1964, the Governor of Uttar Pradesh executed a Transfer Deed in favour of Sturdia, thereby transferring the aforementioned lands, thus acquired, at and for a consideration of Rs. 1,24,521.63 only, which sum had already been paid by Sturdia, forever subject to the terms and conditions contained in the said agreement dated 19th June, 1961. The said agreement was reproduced in its entirety in the Second Schedule to the said Transfer Deed. 5. On the said land, Sturdia established a factory for manufacture of Calcium Carbonate. The manufacturing capacity of Sturdia stood increased to 40,000 metric tons of Calcium Carbonate per annum. Sturdia promoted Citurgia Bio-Chemicals Ltd. (hereinafter referred to as “Citurgia”). Citurgia was incorporated on 13th September, 1974. The principal object of Citurgia was to manufacture citric acid at its factory situated at Surat, Gujarat. With effect from 1st April, 1983, Sturdia stood merged with Citurgia. From the year 1999-2000, Calcium Carbonate Division (i.e. the division of Sturdia) of Citurgia started running in loss. The Citric Acid Division of Citurgia suspended its operation in March, 2003 and, ultimately, Citurgia disposed of the Citric Acid Division in March, 2004 at Rs. 26.20 crores and utilised the same to pay secured creditors, statutory creditors and labour of the Citric Acid Unit. Though, in the year 2002-2003, Citurgia had a turnover of Rs. 480.09 crores from the products manufactured at its Calcium Carbonate Division, it suffered a loss of Rs. 610 lacs during the said accounting year. It stopped operations thereafter. 6. As noted in the proceedings of Board for Industrial and Financial Reconstruction (hereinafter referred to as the “BIFR”) held on 12th January, 2007, the reason for sickness of the Calcium Carbonate Division of Citurgia is due to low prices as a result of sluggishness in demand in industries such as PVC Pipes, toothpaste and significantly excessive domestic capacity as compared to demand. Competition from unorganized sector led to substantial drop in prices. The cost of power in the Uttaranchal State and, prior to its bifurcation, in Uttar Pradesh, had been far higher than the cost of power in the neighbouring States such as Himachal Pradesh, where the plants of one of the competitors of Citurgia is located. Power is an important input in manufacture. High cost thereof led to increased manufacturing cost. The plant was installed as limestone was available from Dehradun area. Mining in this area had to be discontinued as a result of a Supreme Court order. Limestone was then purchased from Himachal Pradesh at a significantly higher cost vis-a-vis that of the competitor of Citurgia. Citurgia took steps to reduce the cost of power by reducing the maximum demand and improving power factor. It failed to overcome the unfavourable cost structure. The then Board of Directors of Citurgia, comprising of Mr. P.V. Kuppuswamy, Mr. A.K. Hirjee, Mr. R.N. Sethna, Mr. Jehangir N. Wadia and Mr. S.R. Lohokare, in that background, wrote a letter dated 21st June, 2002 to the Principal Secretary, Industries Department, Government of Uttaranchal, under the signature of the then whole-time Director Mr. S.R. Lohokare. In the letter, it was stated that the location of the Calcium Carbonate factory was chosen because of access to good quality limestone in the Doon Valley and proximity of limestone mines in Rishikesh. Subsequently, however, the mines in Doon Valley have been closed and, as a result, limestone has to be procured from the adjacent State. Increase in the cost of transportation made the Unit uncompetitive. It was stated that the said state of affair defeated the original objective of locating the project at Rishikesh. It was also stated that the cost of other major inputs, such as power, fuel and labour, have also increased substantially. As against that, new Calcium Carbonate factories have been established in the adjacent States, closer to the mines, where power tariff is also much lower. It was stated that the Union and Citurgia requested the Hon’ble Chief Minister to consider grant of permission to sell the land, which would enable Citurgia to offer a higher compensation to its workmen. It was stated that the same will enable rehabilitation of the workmen, as sale of other assets of the Company is not sufficient for rehabilitation of workmen. It was stated that the same will enable rehabilitation of the workmen, as sale of other assets of the Company is not sufficient for rehabilitation of workmen. In the letter, it was indicated that the Assistant Labour Commissioner has scheduled the next meeting on 20th October, 2003, so as to provide a reasonable period to the Government to consider grant of permission. By the letter, a request was made to the Hon’ble Chief Minister to inform Citurgia about the decision of the State Government regarding grant of permission to sell the land at Rishikesh. It was stated that only after the same, the Union and the Management of Citurgia will be able to conclude the negotiations regarding voluntary separation package under conciliation of Labour Department of the State. On the request, thus made, a file was prepared. It was noted in the file-note that the proposal of Citurgia to sell the land makes it clear that it does not require the land any more for the purpose for which the same was transferred for public good. The only reason assigned to sell the land is to settle dispute with workmen from the sale money of the land. In that background, there is no question of granting permission to discontinue the agreed business and to sell the land to private persons. Thus, the permission to sell the land in question to private persons was denied. 7. It appears that a legal opinion was sought from the then Advocate General Mr. Meharwan Singh Negi. The purpose thereof was to ascertain whether Citurgia can sell the land in question. The learned Advocate General opined in the negative. 8. Sometimes thereafter, Citurgia applied for and obtained a declaration on 19th July, 2005 from BIFR that it is a sick company. Union Bank of India was appointed as operating agency. On 12th January, 2007, BIFR sanctioned the Scheme for rehabilitation of Citurgia. In the Scheme, it was noted that the installed capacity of Calcium Carbonate in the country is around 3 lac tons per annum, whereas the demand for the same in organized sector is around 2 lac tons per annum. On the hypothesis that there is a huge demand of Calcium Carbonate from unorganized sector, which cannot be estimated due to lack of adequate data, it was opined that there exists a huge demand-supply gap. On the hypothesis that there is a huge demand of Calcium Carbonate from unorganized sector, which cannot be estimated due to lack of adequate data, it was opined that there exists a huge demand-supply gap. It was felt that, globally, 72 per cent of Calcium Carbonate is consumed by Paper Industry, whereas, in India, Paper Industry consumes 9 per cent of total Calcium Carbonate produced. It was expected that Paper Industry in India can become a major consumer of Calcium Carbonate. It was felt, while noting that export by Citurgia stood reduced from 2391 metric ton, valued at Rs. 241 lacs, during the year ending 31st March, 2002, to 387 metric ton, amounting to Rs. 38.20 lacs, in the subsequent financial year, due to low prices offered by competitors, that there is great prospect in export, which can be tackled by cost effectiveness. It was felt that Citurgia will have benefits of lower power tariff and, as a result, will be able to lower its cost. It was felt that new areas of consumption are growing, which can be tapped by Citurgia. In the revival proposal, it was indicated that the value of the assets of Citurgia is Rs. 10 crores as per valuation prepared by an agency appointed by Citurgia. It was duly taken note of that the valuation does not include the value of land, as the land was given by way of special acquisition on the condition that the same shall not be used for any other purpose. 9. In the revival proposal, it was suggested that M/s Elite Capital and Management Services Ltd., New Delhi, would be inducted as co-promoter, who will infuse Rs. 625 lacs by way of fresh equity share capital and Rs. 717 lacs by way of interest-free unsecured loans. It was proposed to construct a Resort-cum-naturopathy Centre and/or Old Age Home/Group Housing Colony on approximately 15 acres of the land in question situated alongside river Ganga, where Citurgia has labour quarters, officers’ residences and a guest house. It was proposed that the said property will either be sold as a project or developed by way of a joint venture with any of renowned builders/hoteliers. It was noted that Citurgia requires permission of the State Government for the same. It was proposed that the said property will either be sold as a project or developed by way of a joint venture with any of renowned builders/hoteliers. It was noted that Citurgia requires permission of the State Government for the same. It was assumed that in order to revive such a big industry, which has a great impact on the economy and employment scenario of an industrially backward area, the State Government may grant requisite permission. It was also noted that out of the joint venture sale of land, Citurgia will be able to generate funds to the tune of Rs. 15 crores approximately, but why Rs. 15 crores was not indicated. It was noted that Citurgia has another 15 acres of land, which, too, can be sold for Group Housing and/or development of residential plots/colony with the permission of the State Government. It was assumed, without any reason, that Citurgia will get requisite permission from the State Government and will be able to generate funds to the tune of about Rs. 7.50 crores. In the revival proposal, induction of Rs. 35.92 crores was proposed, of which Rs. 6.25 crores will come by way of fresh equity share capital, Rs. 7.17 crores by way of unsecured loans, both to be provided by M/s Elite Capital and Management Services Ltd., and the remaining Rs. 22.50 crores by sale of 30 acres of land forming part of the subject land. 10. The Scheme indicated an expenditure of Rs. 2.75 crores to re-strat operations. The Scheme envisaged that Citurgia will require working capital of Rs. 3.6973 crores. The Scheme also envisaged that the total cost of the Scheme will be Rs. 37.6654 crores, of which, capital expenditure would be Rs. 2.75 crores, working capital Rs. 3.6973 crores, One-Time Settlement with secured creditors Rs. 11.4147 crores, One-Time Settlement with IIBI Rs. 0.97 crores, One-Time Settlement with unsecured lenders Rs. 2.7593 crores, One-Time Settlement with unsecured creditors Rs. 3.8441 crores, statutory liabilities Rs. 0.20 crores, and VRS/compensation to labour Rs. 12.05 crores. The cost of the Scheme will be financed by Rs. 35.92 crores in the manner as mentioned above and by way of working capital loan from bank amounting to Rs. 2.7496 crores. 11. 2.7593 crores, One-Time Settlement with unsecured creditors Rs. 3.8441 crores, statutory liabilities Rs. 0.20 crores, and VRS/compensation to labour Rs. 12.05 crores. The cost of the Scheme will be financed by Rs. 35.92 crores in the manner as mentioned above and by way of working capital loan from bank amounting to Rs. 2.7496 crores. 11. Therefore, when the original permission to sell the lands in question was sought, the proposal was to utilise the sale proceeds for settling the workmen, but when the proposal to rehabilitate Citurgia was obtained from BIFR, the permission to deal with the said lands was sought not only to finance settlement of labours, but also to settle all past debts, including the debts due to secured creditors, including those of Union Bank of India, the operating agency. The Scheme propounded no further investment by the then management, proposed induction of new capital of Rs. 6.25 crores and Rs. 7.17 crores by way of interest free unsecured loans by M/s Elite Capital and Management Services Ltd. The funds, thus, to be induced, except Rs. 2.75 crores required for capital expenditure, would also be used for liquidating past liability. New working capital loan would be obtained from bank. The Scheme, thus, allowed takeover of Citurgia by M/s Elite Capital and Management Services Ltd. in consideration of it relieving the past management of all past liabilities with right to deal with 30 acres of the said land. The Scheme envisaged following reliefs and concessions from the Government of Uttarakhand : a. To permit change of land use and to allow Citurgia to proceed with re-development/sale of surplus land; b. To exempt Citurgia from power-cuts; c. Not to insist on bank guarantee against arrear of dues of the State Government; and d. To grant status as relief undertaking. 12. Those were held out to be non-fiscal reliefs and concessions. In relation to fiscal reliefs and concessions, the Government of Uttarakhand was asked : a. to defer/exempt sales tax, purchase tax and electricity duty initially for a period of 2/5 years. 12. Those were held out to be non-fiscal reliefs and concessions. In relation to fiscal reliefs and concessions, the Government of Uttarakhand was asked : a. to defer/exempt sales tax, purchase tax and electricity duty initially for a period of 2/5 years. Deferment to carry interest at the rate of 12 per cent per annum on simple basis from the commencement of deferment period till the dues are paid back; b. to defer/exempt arrears of water charges and municipal taxes for a period of 2/5 years; and c. to defer sales tax on sale of electricity for a period of 2/5 years. 13. In addition to above, many other reliefs and concessions were envisaged in the Scheme. The labour was asked to accept En masse VRS, non-management staff were asked to accept terminal dues, namely, gratuity, leave encashment and unpaid salary upto 28th September, 2003. Therefore, the Scheme envisaged a clean slate to re-start production with a capital expenditure of Rs. 2.75 crores and working capital of Rs. 3.6973 crores, despite noting in the Scheme how difficult is the raw material scenario, cost of production, competition and marketability of the product. 14. At this juncture, it should be apt to record that the State Government, by a letter dated 11th September, 2006, informed Citurgia that the Government needs further time to consider the proposal to rehabilitate Citurgia pending before BIFR. The said state of affair clearly demonstrates that the State Government and its officers were aware what was happening before BIFR and what may be its outcome, but still then, did not bother to appear before BIFR, nor tried to demonstrate that the proposal to commercially exploit the land in question may not be in public interest. 15. On 24th February, 2007, as we were told, counting of votes of State Assembly was in progress, when the then Chief Minister made an endorsement on a piece of paper, connected to what is not known, to the effect that in terms of Section 19 of the Sick Industries Companies (Special Provisions) Act, 1985 (hereinafter referred to as the “1985 Act”), the State Government is bound to comply with the directions of BIFR. The endorsement directed that, after consulting the Law Department, correspondence file in this regard be prepared quickly. 16. The endorsement directed that, after consulting the Law Department, correspondence file in this regard be prepared quickly. 16. On 20th August, 2007, Citurgia applied to BIFR for issuance of appropriate direction upon the State Government to give consent for commercial exploitation of the said land. No order thereon was passed. It appears that thereafter, on 1st October, 2007, Citurgia wrote a letter to the Hon’ble Chief Minister of the State. This letter was signed on behalf of Citurgia by one Sri Sanjeev Kumar Singh, must be the nominee of M/s Elite Capital and Management Services Ltd. In this letter, it was stated that rehabilitation of Citurgia will be beneficial to the State as : (i) India’s biggest Calcium Carbonate manufacturing Industry will be rehabilitated; (ii) by this, income opportunity to 15,000 people will be available; (iii) the State Government will be entitled to crores of rupees by way of tax; and (iv) it will boost industrial and general development in Rishikesh. In this, it was stated that in view of Sections 19(3) and 32 of the 1985 Act, as interpreted by the Hon’ble Supreme Court, the decision of BIFR is binding on all and every and, on top of that, in 1989, the Government of Uttar Pradesh made a policy to permit sick industries to deal with surplus land. In that letter, a request was made to give consent or approval to the proposal to deal with the land. 17. On 30th October, 2007, a meeting was held. It is, however, not known where the said meeting was held. From the Minutes of the meeting, it appears that the same was attended by the Secretary, Industrial Development; Secretary, Power; Addl. Secretary, Industrial Development; Addl. Secretary, Finance; Deputy Secretary, Industrial Development; and Mr. Sanjeev Kumar Singh, Director of Citurgia. In the Minutes, it was recorded that in relation to the directions given by BIFR for rehabilitation of Citurgia, discussions were held pertaining to the points with which Government is concerned. It was decided that there is no objection on the part of the Government in granting exemption pertaining to sales tax, purchase tax and tax on electricity according to the Rules of the State Government. It was decided to exempt water tax and property tax for two years. It was recorded that the Director of Citurgia is not insisting for exemption of sales tax on supply of electricity. It was decided to exempt water tax and property tax for two years. It was recorded that the Director of Citurgia is not insisting for exemption of sales tax on supply of electricity. It was also decided to grant exemption for sale of 30 acres of the subject land. It was also decided that it is not possible to give exemption from electricity cut. It was also recorded that the Director of Citurgia informed that there is no dispute in between Citurgia and the State Government in respect of any transaction and, accordingly, there is no necessity of giving bank guarantee. It was also recorded that in respect of grant of relief undertaking status to the industry, the Government has no policy and, accordingly, the same cannot be granted. Thereafter, on 14th March, 2008, the Principal Secretary, Industries Department, wrote a letter to Citurgia stating, amongst others, as follows: (i) The State Government has no objection in granting exemption pertaining to sales tax, purchase tax and tax on electricity in accordance with the Rules; (ii) It was decided to grant exemption for two years in respect of water tax and property tax; (iii) On the basis of representation made by the representative of the Company in respect of supply of electricity, it was decided that there is no necessity of exemption of sales tax on supply of electricity; (iv) It was decided to grant exemption for sale of 30 acres of land of the Unit of the Company situated at Rishikesh in accordance with the policy framed by BIFR on the condition that the proposal of land-use, according to the Scheme framed by BIFR, will be made available to the Government; (v) In relation to exemption in electricity cut, the matter is pending before Electricity Regulatory Commission. Hence, it is not possible to give consent on this issue; (vi) In respect of bank guarantee, it was informed that since the representative of the Company had represented, at present, there is no liability of the Company towards the State Government and, hence, there is no necessity of any bank guarantee; and (vii) In respect of grant of relief undertaking status to the Unit, the Government has no policy at present and, accordingly, the same is not possible. Exemption of water tax and property tax, important for reducing cost of production, has since lapsed. 18. Exemption of water tax and property tax, important for reducing cost of production, has since lapsed. 18. On 12th May, 2008, BIFR passed an order. In that, BIFR noted that Citurgia, by a letter addressed to the Government of Uttarakhand with a copy to the Board, submitted that the Scheme has come to a grinding halt for want of requisite sanction/approval from the State Government. In the letter, Citurgia prayed the Board to issue a direction to the Government of Uttarakhand to comply with the reliefs and concessions. It was also recorded that though the Scheme envisaged induction of Rs. 37.60 crores, only Rs. 6.25 crores were raised by Citurgia and no other progress has been made by Citurgia. It was also noted that Union Bank of India, by letter dated 12th December, 2007, informed the Board that Sri Chandra Shekhar, Director of Citurgia, informed that Citurgia has got approval for sale of surplus land at Rishikesh and negotiation with prospective investors is at final stage, but no written permission for sale of surplus land has yet been granted and, hence, Citurgia is not in a position to sell the surplus land. A request was, thus, made to the Board to direct the Government of Uttarakhand to allow Citurgia to sell the surplus land. At the same time, it was noted that Citurgia held out that owing to non-compliance with the Scheme by the Government of Uttarakhand, Citurgia has no other option, but to raise finances pending re-development of land at Rishikesh and, accordingly, wants to bring-in other co-promotes, who have shown interest to infuse an amount of Rs. 45 crores by way of allotment of equity shares and that the new co-promoters have already given Rs. 5.25 crores. The operating agency reported that despite lapse of one year, the progress of the Scheme is very tardy. It was observed that the Scheme envisaged M/s Elite Capital and Management Services Ltd., along with its promoters/Directors as new co-promoters, but the audited balance sheet of Citurgia, as on 31st March, 2007, suggests that none of the Directors, mentioned in the sanctioned Scheme, continues as Director of Citurgia as on 29th June, 2007. It was observed that a change of management has already taken place, although the sanctioned Scheme envisaged that new investors will only be co-promoters. It was observed that a change of management has already taken place, although the sanctioned Scheme envisaged that new investors will only be co-promoters. BIFR noted various other matters and, ultimately concluded that the proposal to bring-in other co-promoters will significantly change the management, which it does not favour without adopting a transparent process. BIFR, accordingly, pronounced that Citurgia and new promoters have failed to implement the Scheme and, accordingly, declared that the Scheme has failed. The operating agency was directed to issue advertisements for takeover/leasing/amalgamation/merger for rehabilitation etc. 19. On 15th December, 2008, Appellate Authority for Industrial and Financial Reconstruction (hereinafter referred to as the “AAIFR”) allowed the appeal filed by Citurgia against the order of BIFR dated 12th May, 2008. AAIFR, in its order, noted that by a letter, Citurgia had sought permission to infuse an additional amount of Rs. 37.83 crores and, accordingly, sought modification of the Scheme. AAIFR noted that funds amounting to Rs. 14.31 crores have been infused, workers have been paid, 25 per cent of One Time Settlement have been made with secured creditors. AAIFR, accordingly, by its order dated 15th December, 2008, set aside the order of BIR dated 12th May, 2008 and remanded the matter to BIFR to consider the request of Citurgia for infusion of additional equity capital of Rs. 37.83 crores by modification of the sanctioned Scheme. Thereupon, BIFR altered the Scheme and, thereby, permitted infusion of Rs. 37.83 crores over and above Rs. 6.25 crores and Rs. 7.17 crores. No other change was effected to the Scheme. By reason of infusion of additional Rs. 37.83 crores, the requirement and reason for dealing with the subject land lost its significance. The Scheme envisaged that for revival of Citurgia, Rs. 37.66 crores would be required. Of that, Rs. 22.50 crores were to be received by dealing with the land in question. The remaining were to come by way of unsecured loans of Rs. 7.6 crores and fresh equity capital of Rs. 6.25 crores and working capital loan of Rs. 2.74 crores. By reason of additional infusion of Rs. 37.66 crores, there remained no reason to deal with any part of the land in question or to obtain working capital loan. 20. The remaining were to come by way of unsecured loans of Rs. 7.6 crores and fresh equity capital of Rs. 6.25 crores and working capital loan of Rs. 2.74 crores. By reason of additional infusion of Rs. 37.66 crores, there remained no reason to deal with any part of the land in question or to obtain working capital loan. 20. Despite the financial requirement for revival of Citurgia remained unaltered and despite the entire financial requirement for revival of Citurgia being proposed to be infused in cash, it is significant to note that the source of infusing part of the financial requirement by dealing with the land in question remained unaltered in the altered Scheme. The reason thereof is not forthcoming. 21. Citurgia, however, it does not appear from the records of the case, informed the Government that the Scheme stands altered. While the altered Scheme did not supply any information as to what would be done with the money that is likely to come by dealing with the land in question, Citurgia also did not inform anything to the Government in that regard. It also did not inform the Government how Citurgia is proposing to deal with the land, as was the requirement of the letter of the Government dated 14th March, 2008, referred to above. On the other hand, Citurgia submitted a plan for construction of a housing complex on 15 acres of the land in question to the Haridwar Development Authority. While doing so, it submitted a copy of the letter of the Government dated 14th March, 2008. On 24th August, 2009, Haridwar Development Authority, and thereafter on 27th August, 2009, Town Planner, Haridwar, informed the Secretary, Housing Department, that the plan for construction of housing complex on the said 15 acres of the land in question is not permissible, inasmuch as, the land in question has been earmarked as an industrial land in the development plan prepared under the Uttar Pradesh Urban Planning and Development Act, 1973 (hereinafter refered to as the “1973 Act”). It appears that these letters resulted in convening of a meeting held on 23rd/24th September, 2009, which was attended by Principal Secretary, Finance Department, Principal Secretary, Industrial Department; Principal Secretary, Housing Department; Secretary, Law Department; Addl. Secretary, Housing and Development Department; Addl. Secretary, Industrial Department; Secretary, Haridwar Development Authority; and Senior Planner, Urban and Village Planning Department. It appears that these letters resulted in convening of a meeting held on 23rd/24th September, 2009, which was attended by Principal Secretary, Finance Department, Principal Secretary, Industrial Department; Principal Secretary, Housing Department; Secretary, Law Department; Addl. Secretary, Housing and Development Department; Addl. Secretary, Industrial Department; Secretary, Haridwar Development Authority; and Senior Planner, Urban and Village Planning Department. From the Minutes of the said meeting, it appears that the members attending the said meeting noted the order of BIFR dated 12th January, 2007, i.e. the original revival plan and not the modified one. It then referred to the directions contained in the original revival plan to the extent the same had something to do with the State and as enumerated above. It then referred to the meeting held on 30th October, 2007 referred to above as well as the letter of the Government dated 14th March, 2008. It then noted that the land in question is an industrial land and, according to the law made by the Government, industrial land cannot be converted, but held that since the order of BIFR has reached finality and the same is binding on the Government, accordingly, change of user of the land in question is a must. It recorded that while pronouncing reliefs and concessions, conversion of the subject land was treated under non-fiscal, but since the user of the land will be used for rehabilitation of Citurgia, the conversion of the land should be deemed to be a fiscal incentive. There was, therefore, a clear understanding that the proposal is to allow commercial exploitation of the land. It then noted the decision of the Uttar Pradesh State Government of March, 2003 and October, 2003 regarding facility of rehabilitation to be made available to sick industrial units, where it has been provided that when a sick industrial unit has been established before the Master Plan has come into force, for their rehabilitation, Master Plan may be altered. In this connection, it would be appropriate to refer to the decision of the Uttar Pradesh State Government contained in its communications dated 31st March, 2001 and 16th October, 2003. The said communications dealt with change of user of land belonging to sick industrial companies and not land, which does not belonged to sick industrial companies. In this connection, it would be appropriate to refer to the decision of the Uttar Pradesh State Government contained in its communications dated 31st March, 2001 and 16th October, 2003. The said communications dealt with change of user of land belonging to sick industrial companies and not land, which does not belonged to sick industrial companies. In the sense, when land has been acquired for a public purpose and can only be permitted to be used for a different public purpose and it has been ascertained that the different use of the land would also be for public good. It was recorded that in the letter of the Town Planner, Haridwar, dated 27th August, 2009, it had been indicated that the land in question is surrounded by residential colonies and, accordingly, the land in question is within the purview of land dealt with by the State of Uttar Pradesh in its communication dated 16th October, 2003, they have not dealt with an industrial land surrounded by residential colonies. At the same time, it was also noted that a situation of this nature has occurred in the State of Uttarakhand for the first time and, accordingly, in the Government Orders of Uttarakhand, similar arrangement has not yet been made. It was recorded that the decision of the Government of Uttar Pradesh, contained in its communication dated 16th October, 2003, was discussed and it was decided to implement the decision contained in the communication of the State of Uttar Pradesh dated 16th October, 2003 in the State of Uttarakhand, but this will not apply to all sick industrial units except where the surrounding areas are for non-industrial use. It was also decided that the same will only be applicable to those industrial lands, which were used as such before the Master Plan was prepared. It was then decided to proceed with the matter further. 22. Thereafter, on 26th September, 2009, it was recorded in the file that a decision pertaining to change of use of land belonging to sick industrial companies has been taken and, since the request of Citurgia is covered by the decision, the matter may be placed before the appropriate authority. On the said note of the Under Secretary, Housing Department, a note was appended by the Principal Secretary, Housing Department, on 26th September, 2009 itself seeking approval of the proposal mooted by the Under Secretary, Housing Department. On the said note of the Under Secretary, Housing Department, a note was appended by the Principal Secretary, Housing Department, on 26th September, 2009 itself seeking approval of the proposal mooted by the Under Secretary, Housing Department. Appended to the said note was a note by the Chief Secretary, where it was noted that since the proposal is in terms of the decision of the Uttar Pradesh Government, permission be granted to the proposal. On 26th September, 2009, the Chief Minister of the State granted the permission. Thereafter, it appears on 1st October, 2009 a decision was taken to use the power under Section 53 of the 1973 Act to exempt the land in question from the provisions of the said Act. In pursuance therewith, on 5th October, 2009, a Notification was published. Soon thereafter, the plan submitted by Citurgia was sanctioned and Citurgia started obtaining of booking from prospective flat owners. It is not known whether environment clearance was obtained from central agencies before sanction to construct about 200 flats was granted. 23. At the meeting of BIFR held on 7th January, 2010, BIFR directed that the agreement entered into for sale of assets/development of land will be examined by the Asset Sale Committee, as per the guidelines of BIFR, and also constituted Asset Sale Committee. Soon thereafter, on 26th April, 2010, Citurgia filed an application before BIFR seeking discharge from the purview of Sick Industrial Companies (Special Provisions) Act, 1985 holding out that its net worth exceeds accumulated loss for the financial year ended 20th April, 2010. The said Miscellaneous Application, having been dismissed on 29th April, 2010, Citurgia moved AAIFR. Thereafter, on 5th June, 2010, Operating Agency Union Bank of India reported to BIFR that the net worth of Citurgia has turned positive and the same is at the level of 261.15 lacs as of 20th April, 2010. It was stated in the said letter that the land use was changed by the Government of Uttarakhand as per the sanctioned Scheme and the Company has already got approval of building drawings from the Haridwar Development Authority for construction of housing projects on the land in question and construction work has also reportedly started at the site. It was reported that no specific proof has been submitted as regards re-commencement of operations at Rishikesh plant. It was reported that no specific proof has been submitted as regards re-commencement of operations at Rishikesh plant. It was stated that Citurgia has settled and paid the dues of all secured creditors and, accordingly, all secured creditors have issued No Due Certificate to it. 24. In this background, these writ petitions were filed. 25. In the counter affidavit filed by or on behalf of the State by the Deputy Secretary, Department of Housing, Government of Uttarakhand, a stand was taken that the permission for change of land use was granted completely in accordance with law. The affidavit dealt with orders passed by BIFR up to 2nd July, 2009, i.e. up to the stage BIFR altered the Scheme and thereby, provided that the entire rehabilitation requirement would be funded in cash. It, therefore, appears that despite knowledge of the said fact that by reason of the alteration in the rehabilitation Scheme, there is no requirement of dealing with the lands in question, but still then, an attempt was made to permit Citurgia to commercially exploit the land in question. However, in course of hearing, it was submitted that the State Government has realised that Citurgia did not supply all necessary informations to the State Government and, accordingly, the State Government has cancelled the decision contained in the Minutes of the Meeting held on 30th October, 2007, withdrawn the letter dated 14th March, 2008, the decision contained in the Minutes of the Meeting held on 24th September, 2009 and all subsequent steps in connection therewith and has also withdrawn the Notification dated 5th October, 2009. Despite no document in support thereof having been filed, we have believed and accepted the same. 26. Counter affidavit filed by Citurgia was affirmed by Sri A.K. Sharma. In the affidavit, it was stated that a sum of Rs. 149.66 lacs has been invested for renovation of plant/unit. In support thereof, reliance was placed on the accounts as on 31st March, 2008 as well as capital work in progress account, vouchers and store requisitions, all of Citurgia. No attempt was made to indicate the nature of work done for renovation. Nothing was indicated, who carried out the renovation. There was no indication whether any employee has been engaged for renovation/maintenance work. The amount shown to have been spent for renovation appears to be consumables mostly. The bills of the suppliers were not part of the vouchers. No attempt was made to indicate the nature of work done for renovation. Nothing was indicated, who carried out the renovation. There was no indication whether any employee has been engaged for renovation/maintenance work. The amount shown to have been spent for renovation appears to be consumables mostly. The bills of the suppliers were not part of the vouchers. Vouchers of building materials, transportation charges, consumables etc. It was stated that Citurgia is waiting for working capital loan of Rs. 369.73 lacs. Nothing had been stated, who has been approached for grant of such loan and where is the requirement thereof. It was stated that on 25th June, 2007, an application was made for obtaining Air and Water Pollution Certificate. How the same was persuaded, had not been indicated. Photographs annexed do not inspire confidence pertaining to renovation of the plant and machinery. The video relied, we did not see. Nothing has been said as to what is the requirement of dealing with the land in question and obtaining further working capital loan in the backdrop of the altered Scheme. In other words, the counter affidavit of Citurgia is bereft of anything, which would inspire confidence that Rishikesh Plant of Citurgia was even attempted to be revived. Citurgia, in its counter affidavit, harped upon the actions before BIFR, directions issued by them and follow-up action of the State in allowing it to deal with the land in question and to commercially exploit the same. Not one single justification has been given in support thereof. It was, however, purported to be contended that the land belonged to Sharma family and Sharma family is entitled to exploit the same. The affidavit is not only irresponsible, but makes it abundantly clear that the new owners of Citurgia have no interest at all in revival of the industry, but are only interested to commercially exploit the land in question. 27. Chapter VII of the 1894 Act deals with acquisition of land for companies. Section 39, contained in the said Chapter, requires a previous consent of the Government and an agreement executed by the Company as a pre-requisite for taking steps to use the provisions of the said Act for acquisition of land for a Company. 27. Chapter VII of the 1894 Act deals with acquisition of land for companies. Section 39, contained in the said Chapter, requires a previous consent of the Government and an agreement executed by the Company as a pre-requisite for taking steps to use the provisions of the said Act for acquisition of land for a Company. Section 40, also contained in the said Chapter of the Act, requires the Government to make an inquiry before granting such consent that the purpose of acquisition is to obtain land for housing workmen employed by the Company or the same is needed for construction of some building or work of a Company, which is engaged or is taking steps for engaging itself in any industry or work and the same is for public purpose, or the same is needed for construction of some work and that such work is likely to prove useful to the public. Section 41, also contained in the said Chapter of the Act, requires a Company to enter into an agreement after the Government is satisfied that the proposed acquisition is for any of the purposes referred to in Section 40 of the Act containing, amongst others, the terms on which the land shall be held by the Company. Section 42 of the Act requires such agreement to be published in the official Gazette, whereupon, the same shall have the same effect as if it had formed part of the Act. Section 44-A of the Act makes it clear that no Company shall be entitled to transfer such land or any part thereof by sale, mortgage, gift, lease or otherwise, except with the previous sanction of the Government. Section 44-B makes it clear that no land shall be acquired for a private company in contradiction to a Government Company, except for the purposes mentioned in Section 40 above. The purpose and object of the said Sections is to ensure that lands are acquired for companies only to achieve public good and, as a corollary, imposes an obligation to continue to use the same for public good in contradiction to satisfy private greed. In the instant case, as it appears, previous inquiry was made when it transpired that establishment of the industry and connected activities will prove useful to the public and/or will satisfy the test of public purpose. In the instant case, as it appears, previous inquiry was made when it transpired that establishment of the industry and connected activities will prove useful to the public and/or will satisfy the test of public purpose. Thereupon, an agreement was entered, where it was expressly mentioned that the land shall be held for the purpose as indicated in the agreement and for no other purpose. In view of the provisions of the 1894 Act, the land was not transferable, nor the same could be dealt with in any manner without the previous sanction of the Government. Citurgia, having no right to sell or deal with the land, the value of the land was not taken into account when a valuation report of Citurgia was prepared and the same was placed before BIFR. BIFR, therefore, should be deemed to be award of the fact that the Company had no right, either under law or in terms of the agreement or even in terms of the conveyance, to deal with the land. Surprisingly, however, BIFR felt that Citurgia should be permitted to commercially exploit the land and, for that, the State Government is required to give permission to Citurgia. The element of public interest in permitting Citurgia to do so was not even considered. 28. Section 19 of the 1985 Act authorises providing for financial assistance by way of loans, advances or guarantees or reliefs or concessions or sacrifices from the State Government and also requires that every scheme, requiring financial assistance to be provided, should be circulated to person required to provide the same for his consent. There is, however, no provision to compel consent, while, however, there is a provision of deemed consent on failure to react on time. It is not the contention of the State Government, though it did not appear at any point of time before BIFR, that the draft scheme was not circulated to it. On the other hand, for what has been stated above, it should be deemed that it had the draft Scheme and, as such, wanted further time. Despite that, it does not appear that the State Government, at any point of time, thought it fit to approach BIFR to indicate that a piece of land, acquired for public purpose, is now being proposed to be commercially exploited. Despite that, it does not appear that the State Government, at any point of time, thought it fit to approach BIFR to indicate that a piece of land, acquired for public purpose, is now being proposed to be commercially exploited. No attempt was made to bring to the notice of BIFR that the value of the land in question is more than Rs. 22.5 crores, wrongly taken note of as Rs. 21.5 crores in the Scheme, although the Collector, Dehradun, on 31st October, 2009, expressed the minimum value of the land in question at about Rs. 400 crores under Uttar Pradesh Stamp (Property Valuation) Rules, 1997. While, despite knowledge of the proposal contained in the Scheme, the Government did not refuse to give consent to permit Citurgia to commercially exploit the land in question, but even at the later stage, while coming to know that Citurgia has arranged more than sufficient funds as projected in the altered revival Scheme for its revival, the Government did not approach BIFR to withdraw the reliefs and concessions pertaining to permission of the Government to permit Citurgia to commercially exploit the land in question. At the same time, despite alteration/modification of the Scheme and, thereby, providing that Citurgia and its co-promoters will bring in each and every penny required for revival of Citurgia, BIFR did not take any step to withdraw the provision contained in the Scheme permitting commercial exploitation of the land in question for revival of Citurgia. It is true that Section 32 of the 1985 Act gives an over-riding effect to the provisions contained therein over any other law, including the law propounded in the 1894 Act, but the fact remains, anything purported to be done under the provisions of the 1985 Act, which is contrary to public interest and immoral to public purpose, cannot be read into the provisions of the 1985 Act. Even if not objected to, it is not permissible, on the garb of rehabilitating a sick industrial company, to open the exchequer of a State Government. Any direction, being immoral, cannot be saved either by reason of the provisions contained in Section 19 or Section 32 of the 1985 Act. 29. Even if not objected to, it is not permissible, on the garb of rehabilitating a sick industrial company, to open the exchequer of a State Government. Any direction, being immoral, cannot be saved either by reason of the provisions contained in Section 19 or Section 32 of the 1985 Act. 29. From the records, it appears, which should be deemed to be within the knowledge of the Government, that the purport of the Scheme was to repay a part of the existing debts of Citurgia by the sale proceeds of the subject land, namely, to the extent of Rs. 22.5 crores. No part of the said sale proceed was projected or proposed to be used for industrial purpose of Citurgia. Later on, when the Scheme was modified, Cuturgia and its promoters/co-promoters proposed to bring in enough money to pay of the past debts, still then BIFR went ahead with dealing with the subject land by Citurgia and, for that purpose, appointed an Asset Sale Committee, even though sale of the land or the proceeds thereof had no connection with the projected prospective industrial activities of Citurgia. We do not think such action on the part of BIFR, which was projected as the sheet anchor by the Government to find an excuse to permit Citurgia to commercially exploit the land in question, was permissible within the four corners of the 1985 Act. The 1985 Act was not enacted to make an industrialist rich by commercially exploiting land acquired for a public purpose. 30. It has come on record, which may be true, that the land in question is now situated at a place, which is surrounded by residential houses. It is true that construction of residential houses may also fulfill public purpose, but the fact remains that, as yet, no one has gone into the question whether use of the land for construction of residential houses will enure to public benefit. In any event, no one, until date, has made any endeavour to ascertain whether permitting a private company to use the land in question for construction of residential houses would enure any public purpose or not. 31. In any event, no one, until date, has made any endeavour to ascertain whether permitting a private company to use the land in question for construction of residential houses would enure any public purpose or not. 31. While the Government and its offices, at no point of time, bothered to bring before BIFR the public element involved in user of the land, they tried to project that since the rehabilitation Scheme of Citurgia has been sanctioned, it is bounden duty of the Government to accede to the provisions contained in the Scheme and, thereby, to permit Citurgia to commercially exploit the land in question. For that purpose, a few of the officers, named above, held a meeting in which a Director of Citurgia was present and, in that meeting, took a decision to permit Citurgia to commercially exploit the land in question against public interest and, in any event, without considering the public purpose involved therein. We do not think that either Government or its officers were so naive as they tried to project. 32. It must be kept in mind that when a land is acquired and, thereby, owners of the land are forced to sell their land, that can only be resorted to for achieving a public purpose. For a larger public interest, the land, thus acquired, may be used for some other public purpose, but not for the purpose of fulfilling a private greed, as was done in the instant case. It is surprising that at no stage, the officers of the Government felt it necessary to even approach the appropriate authority, including BIFR, for the purpose of demonstrating that a land, acquired for public purpose, should not be permitted to be used to fulfill private greed. It is significant to note that a matter pertaining to public interest was scuttled at a meeting held by a few officers of the Government in the presence of the person representing the private greed and they purported to take a decision binding on the Government to farther such private greed and made a representation to that effect even before the Hon’ble Chief Minister of the State. The manner, in which the matter has been dealt with by the officers of the State, including the mis-representations made to the Hon’ble Chief Minister, appears to us, is fraudulent, mischievous and contrary to the interest of the people of the State. The manner, in which the matter has been dealt with by the officers of the State, including the mis-representations made to the Hon’ble Chief Minister, appears to us, is fraudulent, mischievous and contrary to the interest of the people of the State. We, accordingly, pass the following order : a. The decision contained in the Minutes of the Meeting held on 30th October, 2007; the decision conveyed by the letter dated 14th March, 2008; the decision contained in the Minutes of the Meeting held on 24th September, 2009; the permission granted by the Hon’ble Chief Minister on 26th September, 2009 to grant exemption under the provisions of the 1973 Act; the decision dated 1st October, 2009 to use power under Section 53 of the 1973 Act; and the Notification published on 5th October, 2009 under Section 53 of the 1973 Act, as well as the sanction to construct, are quashed. b. The Government as well as Citurgia are directed to forthwith approach BIFR with a request to delete, from the approved revival Scheme, that part thereof, which permits Citurgia to commercially exploit the land in question and also the direction upon the State Government to grant permission to Citurgia to do so. c. BIFR is directed to forthwith delete that part of the sanctioned Scheme, which authorised Citurgia to commercially exploit the land in question and also the direction contained therein directing the Government to accord permission to Citurgia to do so. d. The District Magistrate, Dehradun, is directed to forthwith take actual physical possession of the land in question and to keep the same in his possession. He shall permit Citurgia to use the land in question for the purpose for which it had obtained the same under the conveyance referred to above and for no other purpose. e. The Government is directed to take steps pursuant to the terms and conditions contained in the conveyance, if it is of the opinion that Citurgia has committed breach of the covenants contained therein. 33. Before parting, we feel that Government should enquire into the conduct of its officers pertaining to the subject dealt with above, since such conduct does not inspire public confidence. 34. The writ petitions stand disposed of in the above terms.