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2016 DIGILAW 3845 (ALL)

BAHADUR SINGH @ BAUNA BAHADUR v. STATE OF U. P.

2016-11-30

ARUN TANDON, SANGEETA CHANDRA

body2016
JUDGMENT By the Court.—Facts as have been brought to the notice of the Court by means of the writ petition, counter-affidavit, rejoinder-affidavit and the original records, which have been produced by Uttar Pradesh State Industrial Development Corporation Ltd. reflect an active collusion between the officers of the UPSIDC and respondent No. 5, namely M/s. Kuntal Jeepers Private Ltd. The facts as detailed herein under would further reflect that the officers of the UPSIDC in collusion with respondent No. 5 have not only ensured that the very purpose of allotment of industrial plot is frustrated for over a period of nearly 27 years, they have also ensured that the provisions applicable in the matter of allotment, execution of the lease deed, setting up of the factory, restoration and transfer are violated with the impunity. Their acts have not only caused loss to the UPSIDC but have frustrated the very purpose of such Corporation had been created for development of industrial areas. They have also ensured loss the State exchequer by not getting the necessary lease deeds executed and registered after deposit of required stamp duty. 2. The facts relevant for deciding the present writ petition are as under: 3. Plot No. D-58 Industrial Area site No. 1, Mathura was allotted in favour of one Mr Rajendra Singh on 14.9.1989. A registered lease deed in respect of aforesaid plot was also executed in favour of Mr Rajendra Singh by UPSIDC on 1.2.1991. It is the case of the UPSIDC that Mr Rajendra Singh deposited all installments in terms of the lease deed. Under the terms of the lease, it was made mandatory that a factory as proposed in the application for allotment shall be set up and shall start manufacturing within 24 months of the allotment and in case of non-compliance of any of the conditions of the allotment, the lease would stand terminated. Records do not reflect compliance of the aforesaid stipulation of setting up of the factory and its commencing production. 4. On an application made by Mr Rajendra Singh on 15.10.1999, plot was transferred in favour of M/s. Kuntal Jeepers Private Ltd., respondent No. 5, a Company incorporated under the Companies Act. Records do not reflect compliance of the aforesaid stipulation of setting up of the factory and its commencing production. 4. On an application made by Mr Rajendra Singh on 15.10.1999, plot was transferred in favour of M/s. Kuntal Jeepers Private Ltd., respondent No. 5, a Company incorporated under the Companies Act. Clause C of the allotment letter specifically mentions that all terms and conditions contained in the allotment letter dated 14th September, 1989 executed in favour of Rajendra Singh shall be binding upon M/s. Kuntal Jeepers Private Ltd. In the agreement executed on 27.5.2000 between UPSIDC and M/s. Kuntal Jeepers Private Ltd., it was specifically mentioned under clause 4 (e)(i) that the construction shall commence within a period of 9 months of such agreement or such extended period as guarantor of lease may provide on the request of licensee. The industrial unit shall start manufacturing within a period of 24 months from the date of lease or within such extended period as lessor in writing may provide. Similarly clause 5 contains a stipulation that if the licensee fails to commence and complete the building for its use and start manufacturing production within the time above provided, the lessor shall have a right of re-entry upon and take possession of the said land and the agreement shall seize and stand terminated. 5. We had specifically inquired from Shri D.K. Garg, In-charge, Industrial Area as well as Smt. Seema Mittal, Regional Manager, UPSIDC, Agra present before this Court as to whether any production was started by the allottee in terms of the allotment letter or not. The answer given is that because of non-construction and non-starting of the production as well as because of use of premises for the purposes other than industrial, a decision was taken to cancel the allotment vide the letter dated 3.4.2002. 6. It is, therefore, writ large on the record that between 1989 till 2002 no production activity was actually undertaken nor the factory as proposed was constructed over the plot. On the contrary, the UPSIDC permitted the use and occupation of the plot for the purpose other than industial. 7. 6. It is, therefore, writ large on the record that between 1989 till 2002 no production activity was actually undertaken nor the factory as proposed was constructed over the plot. On the contrary, the UPSIDC permitted the use and occupation of the plot for the purpose other than industial. 7. What is worse to notice is that under the provisions of UPSIDC manual, a restoration application is contemplated to be filed in normal circumstances within 30 days and it is only where there is stay order from some Court or possession could not not be taken for whatever reason it may be, that the time for restoration could be extended. We have been informed on the basis of the record by the learned counsel for the UPSIDC that restoration application was filed by respondent No. 5 on 22.5.2002 but the fee for consideration for such application was only deposited on 28.4.2008, meaning thereby that the restoration application said to have been filed in 2002 continued to be a mere paper till deposit of requisite fee for restoration in 2008. 8. What has been done by the UPSIDC during all these period is not known and why the plot was not put to re-auction /re-settlement during all these six years is also not known. We find from the note sheet dated 14.11.2008, which has been read out to us in extenso by the learned counsel for the UPSIDC that against one of the Directors of M/s. Kuntal Jeepers Private Ltd. there was an outstanding recovery of rupees 2.94 crores of the Central Excise Department and that Central Excise Department had recommended that there should not be any transfer of possession of the plot in question. 9. In between 2002 and 2008 the petitioner before this Court and respondent No. 5 entered into some mutual arrangement and under the said arrangement, a restoration-cum-transfer application in accordance with the provisions of UPSIDC manual was filed on 1.10.2005. This application was signed by the petitioner and respondent No. 5. Fee, for such application to be considered was deposited by a Bank Draft dated 6.6.2005, which was furnished alongwith application for transfer-cum-restoration. This application was signed by the petitioner and respondent No. 5. Fee, for such application to be considered was deposited by a Bank Draft dated 6.6.2005, which was furnished alongwith application for transfer-cum-restoration. Since no order was passed on this application, the petitioner filed civil suit No. 601 of 2008 and in paragraph 6 of the plaint, he specifically referred to the application made for restoration-cum-transfer, and he specifically prayed for injunction restraining the UPSIDC from restoring the plot in favour of respondent No. 5. 10. Written submission has been filed by UPSIDC in the said suit and in reply to paragraph 6 of the plaint, they admitted that such transfer-cum-restoration application had been received and was pending consideration. 11. Surprisingly, while suit was still pending, the UPSIDC by means of orders dated 9.4.2009 and 13.4.2009 had decided to restore the plot in favour of respondent No. 5. It is against this order that the present writ petition has been filed. 12. The petitioner contends that his request for restoration of transfer in his favour has wrongly been ignored. 13. Under the restoration order dated 13.4.2009 there is a stipulation under clause 7 that the conditions of the original allotment letter dated 14.9.1989 in favour of Rajendra Singh shall remain unchanged. In clause 6, it is stated that construction shall commence within a period of 9 months and production shall start within 12 months. An undertaking to this effect will be submitted by respondent No. 5. Under the said letter, it was also provided that a sum of Rs. 6,21,432/- shall be deposited within 30 days from the date of issuance of this letter, failing which interest @ 18% per annum shall be payable. 14. In the affidavit filed today, in paragraph 10, it has been stated as under; “10. That subsequent thereto, restoration application was preferred and thereby the corporation agreed to restore the plot in favour of M/s. Kuntal Zippers by way of payment as restoration levy @ Rs. 378.00/- Per Squ./Mtr. total of which comes to Rs. 6,21,432.00/-. On 11.5.2009 as sum of Rs. 1,00,000/- was paid and subsequent thereto on 12.5.2009 a sum of Rs. 55,358/- was paid. The total sum which was paid is Rs. 1,55,358/-.” 15. 378.00/- Per Squ./Mtr. total of which comes to Rs. 6,21,432.00/-. On 11.5.2009 as sum of Rs. 1,00,000/- was paid and subsequent thereto on 12.5.2009 a sum of Rs. 55,358/- was paid. The total sum which was paid is Rs. 1,55,358/-.” 15. It is, therefore, writ large that hardly one fourth of the total Restoration fees has been paid till date, what to talk of interest @ 18% per annum which is payable under the terms of the lease. 16. We further find that under clause 5 of the Restoration letter a fresh lease deed was required to be executed within 30 days of the date of issuance of the letter. It is admitted by the officers of UPSIDC, who are present in Court that no lease deed has been executed till date. The only explanation furnished to the Court for non-deposit of the money for restoration during all this period of 7 years and non-execution of the lease deed for these 7 years as well as non-construction of the factory and starting of the production thereto is that an order of status quo was passed by this Court in the present writ petition on 28.5.2009. 17. How flimsy is the explanation furnished by the officers would be borne out from the interim order of this Court itself, which reads as follows: “The counsel for the petitioner submits that: (i) That plot was allotted by UP State Industrial Development Corporation (the UPSIDC) in favour of respondent No. 5 on 28.10.1999. It was cancelled on 3.4.2002. (ii) There was an agreement between the petitioner and respondent No. 5 that the plot may be restored in favour of the petitioner. The agreement was on payment of substantial amount of money to respondent No. 5. The possession was also transferred to the petitioner. (iii) The petitioner and respondent No. 5 filed a joint application the UPSIDC on 1.10.2005 for transfer-restoration in favour of the petitioner. (iv) Respondent No. 5 has turned dishonest and has filed an application for restoration of plot in his own name on 22.2.2008 in his favour. (v) The UPSIDC is illegally trying to dispossess the petitioner without considering the joint application filed by the parties on 1.10.2005.(emphasis ours) Issue notice. Notice on behalf of respondent No. 1 has been accepted by standing counsel. Notice on behalf of respondents No. 2 to 4 has been accepted by Sri Rahul Sahai. (v) The UPSIDC is illegally trying to dispossess the petitioner without considering the joint application filed by the parties on 1.10.2005.(emphasis ours) Issue notice. Notice on behalf of respondent No. 1 has been accepted by standing counsel. Notice on behalf of respondents No. 2 to 4 has been accepted by Sri Rahul Sahai. They pray and are granted three weeks’ time to file counter-affidavit. The petitioner shall have two weeks thereafter to file rejoinder-affidavit. List for admission in the week commencing 20.7.2009. Till the next date of listing, the parties shall maintain status quo. In the meantime, the U.P. Industrial Development Corporation will consider the transfer-restoration application jointly filed by the petitioner and respondent No. 5 and also the application filed by respondent No. 5 for restoring the allotment in his favour. However the joint application for transfer-restoration will be considered first.” 18. It shall be seen that the Hon’ble High Court had not interfered in any manner with the amount, which was required to be deposited under the Restoration letter, the lease deed, which was required to be executed under the Restoration letter and the factory which was to be established and the production whereof was to be started under the restoration order. 19. In fact the order dated 13.4.2009 was not even referred to by the Court in its interim order. It is only because the authorities wanted to see that the respondent No. 5 gets maximum benefit detrimental to the interest of the State, that they have acted in such a manner. 20. We may record that the requisite lease deed, which was required at the first instance to be executed on transfer of the plot in favour of M/s. Kunta Jeepers Private Ltd. in 2000 has not been executed till date. The loss of the Stamp Duty alongwith interest thereon for such non-execution of the lease deed including penalty, if any, under the Stamp Act read with Registration Act must be recovered from the officers of the UPSIDC and M/s. Kuntal Jeepers Private Ltd., who are ultimately the beneficiaries of the inaction of the Officers of the UPSIDC. Similarly the loss caused to the State because of the non-execution of the lease deed under the Restoration order, alongwith penalty and interest leviable thereon, must be similarly recovered equally from Respondent No. 5 M/s. Kuntal Jeepers Private Limited and officers of the UPSIDC responsible for the situation. Similarly the loss caused to the State because of the non-execution of the lease deed under the Restoration order, alongwith penalty and interest leviable thereon, must be similarly recovered equally from Respondent No. 5 M/s. Kuntal Jeepers Private Limited and officers of the UPSIDC responsible for the situation. 21. For this purpose, the Chief Secretary of the State is directed to hold an inquiry and pin point the responsibility of the officers who are to be held liable and consequently to pay such money. The exercise in this regard shall be completed by the Chief Secretary within two months and a report shall be submitted to this Court through Registrar General informing the action taken in accordance with the directions issued above. This will take care of the loss, which has been caused to the State exchequer. 22. The other loss, which has been caused to the State exchequer, is non deposit of the restoration fees by M/s. Kuntal Jeepers Private Limited, and therefore, in terms of the clause providing for interest @18% per annum referred to above, balance has to be recovered with interest. 23. We direct that the UPSIDC to recover the balance amount of the fee for restoration alongwith interest @18% per annum within one month from M/s. Kuntal Jeepers Private Limited. Action so taken shall be intimated to this Court under the letter of the Managing Director of UPSIDC. 24. Now turning to the basic issue as to whether in the facts of the case, the restoration of the plot in question in favour of respondent No. 5 is justified or not? 25. We must keep in mind that the allotment of the industrial plots after acquiring the land holding of the farmers was basically for development of industry. The purpose of such acquisition and the purpose for which UPSIDC has been created is frustrated only because of the officers, who man such Corporation, who care little for the establishment of the factory so that more goods can be generated for the larger welfare of the State. Their interest appears to be to somehow or the other keep the issue of transfer of land from one person to another alive for obvious reasons instead of ensuing the industrial growth. 26. Their interest appears to be to somehow or the other keep the issue of transfer of land from one person to another alive for obvious reasons instead of ensuing the industrial growth. 26. We find that the allotment of the plot was made in the year 1989, with the stipulation that the factory shall be established and production shall commence within 24 months. This condition has been repeated both in the transfer order, which was executed in favour of Respondent No. 5 of the year 2000 and in the Restoration order of the year 2009 but till date, i.e. even after 27 years from the date of allotment, no factory is alleged to have been established nor any production has taken place. Consequently, there has been no generation of employment and no generation of goods which was the basic purpose of allotment. 27. We further find that an application for restoration was made by respondent No. 5 in the year 2002, but the actual money for processing the application was only deposited on 28.4.2008, i.e. after six years of the cancellation of the earlier allotment. There is no explanation worth consideration as to why M/s. Kuntal Jeepers Private Limited was allowed to sleep over their right of restoration for six years. What is worse to notice is that even after getting an order of restoration made in their favour on such application in the year 2009, for last 7 years, they have neither deposited the Restoration fee nor have made any attempt to set up any factory or to start any production within time frame permitted. 28. As already quoted above, the interim order dated 28.5.2009 does not in any way affect the deposit of the money towards restoration nor in any way prevents the construction and production activity to be undertaken over the plot allotted. There is a direction on the other hand that in the meantime the restoration-cum-transfer application shall be considered by UPSIDC. 29. We may record that the Court has been informed that respondent No. 5 has since withdrawn the consent given for restoration-cum-transfer in favour of petitioner. It is because of this that the application for restoration-cum-transfer could not be considered but we find that no such order exits on record. It is only an oral submission made on behalf of UPSIDC. 30. It is because of this that the application for restoration-cum-transfer could not be considered but we find that no such order exits on record. It is only an oral submission made on behalf of UPSIDC. 30. We fail to understand as to why the officers of the UPSIDC feel shy in passing orders on the application, which are to their knowledge was pending (as is established from the written statement filed in the civil suit) while deciding the restoration application filed by Respondent No. 5. 31. In any view of the matter, since the arrangement of transfer between two private parties is alleged to have been revoked, we do not find it a fit case to interfere under Article 226 of the Constitution of India. We leave it open to the petitioner to challenge the withdrawal of the consent granted earlier by respondent No. 5, by way of civil suit and if so advised to seek quashing of the order of restoration as well as damages, if any, if they have altered their position on the assurance given earlier by respondent No. 5. 32. For the reasons recorded above, the writ petition is dismissed. 33. However, following directions are issued: (a) The Chief Secretary of the State shall recover the loss of stamp duty alongwith interest and penalty from respondent No. 5 and officers of the UPSIDC found responsible after inquiry as directed above within the period mentioned herein above. (b) UPSIDC shall recover the balance amount of money, which was required to be deposited towards restoration alongwith interest @ 18% per annum within one month from respondent No. 5. (c) The Chief Secretary shall hold an inquiry into the conduct of the officers of UPSIDC in transferring the lands/plots without getting any lease deed executed in favour of respondent No. 5 and to take such disciplinary action as required within 3 months of the receipt of the certified copy of this order. (d) The petitioner may file civil suit and seek quashing of the order made for restoration in favour of respondents and such further relief as may be advised.