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2020 DIGILAW 873 (AP)

Prana Pharmaceuticals Private Limited v. Andhra Pradesh Industrial Infrastructure Corporation Limited

2020-12-29

M.GANGA RAO

body2020
ORDER : M. Ganga Rao, J. 1. This writ petition is filed to declare the action of the 2nd respondent in issuing Show-cause notice dated 04.12.2020 for cancellation and resumption of plot No. 14A to an extent of Ac. 10.00 cents or 40,470 Sq. mts. at APSEZ, Atchutapuram, Visakhapatnam District allotted for setting up of Bulk Drugs and Drug Intermediates which was handed over through registered Lease deed dated 28.02.2015, as illegal, arbitrary and contrary to the provisions of APIIC Industrial Parks Allotment Regulations, 2015 and consequently to restrain the 2nd respondent from taking any adverse action of cancellation and resumption of the plot and to direct the 2nd respondent to consider the reply given to the show-cause notice for providing alternate plot in vacant plots in newly developed zones of petitioner's choice in Atchutapuram or Parwada Phase II on the same commercial terms and same price as applicable to the Plot No. 14A allotted to the petitioner and grant reasonable time for establishing the manufacturing plant for 'Active Pharmaceutical Ingredients/Bulk Drugs' in pursuance to the reply of the petitioner dated 09.12.2020. 2. The case of the petitioner is that it was allotted land to an extent of Ac. 10.00 cents in Plot No. 14 at Atchutapuram, APSEZ industrial park, on its application submitted in the year 2013. Later, the petitioner company was requested to choose Plot No. 14A or 15B to an extent of Ac. 10.00 each in the Chemicals sector instead of the original Plot No. 14 for the reason that the Plot No. 14 is covered by water body. Plot No. 2C also could not be considered as it falls under Petrochemical Zone. In continuation of the provisional allotment order and the modification letter dated 09.05.2014, final allotment of Plot No. 14A in Krishnampalem Village, Rambilli Mandal, Visakhapatnam District admeasuring Ac. 10.00/40,470 Sq. mts. has been confirmed in favour of the petitioner company for having paid 25.05% as requested against 25% towards cost of the land. Further, the petitioner company was asked to make the payment of annual installment of Rs. 10.00/40,470 Sq. mts. has been confirmed in favour of the petitioner company for having paid 25.05% as requested against 25% towards cost of the land. Further, the petitioner company was asked to make the payment of annual installment of Rs. 70,60,802/- within 30 days from the date of expiry of moratorium period of two years vide Final allotment order dated 09.10.2014 and a registered lease deed dated 28.02.2015 bearing Document No. 1411/2015 for a period of 33 years was executed by the respondent-Corporation for establishing a new manufacturing plant for Active Pharmaceutical Ingredients/Bulk Drugs for products from therapeutic segments, namely, Ocology, Cardiovascular, Ophthalmic, Anti HIV and Anti Diabetic. The petitioner company took possession of the land on registration and requested for extension of time for implementation of the proposed project in order to avail the bank loan as the bankers have come forward to process the loan. At the request of the petitioner, the respondents have granted extension of time for implementation of the project up to 25.10.2019. In the month of February, 2019, the bankers visited the site to process the project loan and for valuation/hypothecation purpose. During the visit, the bankers were surprised to see huge amounts of pollutants generated from the petitioner's immediate neighbour M/s. Sundaram Alloys Limited, which is located in Plot Nos. 13 and 14AA manufacturing Ferro alloys. The bankers expressed doubt as to whether the petitioner was able to obtain the regulatory approvals of USFDA, EU GMP to smoothly run its business without any audit issues. Considering the serious concerns of the bankers, the petitioner sought a site audit by an independent quality auditor who has vast experience working in the pharmaceutical industry. In the month of March, 2019, the auditor visited the petitioner's site and upon studying the amount of pollution being generated by M/s. Sundaram Alloys Limited, concluded that M/s. Sundaram Alloys Limited is causing serious violation of pollution and it would damage the petitioner's proposed manufacturing plant and the petitioner company would not be able to comply with the conditions of the crucial regulatory audit agencies. It is found not feasible to establish the petitioner's pharmaceutical industry in the pot allotted and leased out by the respondent-Corporation. It is found not feasible to establish the petitioner's pharmaceutical industry in the pot allotted and leased out by the respondent-Corporation. Then, the petitioner asked for alternative feasible plot for locating the petitioner's industry in the newly developed zones by the respondent-Corporation for establishing manufacturing plant for 'Bulk Drugs and Intermediates' in Atchutapuram and Parwada Phase-II on the same commercial terms and same price as applicable to the petitioner Plot No. 14-A and grant reasonable time for establishing its manufacturing plant for production of 'Active Pharmaceutical Ingredients/Bulk Drugs'. Instead of allotting alternate site, the respondent-Corporation has issued the impugned show-cause, for which the petitioner submitted a detailed reply on 09.12.2020. The petitioner, on apprehension that the respondent-Corporation may pass final cancellation and resumption orders as indicated in the impugned show-cause notice without considering its reply, has approached this Court by filing the present writ petition. 3. Sri G. Anand Kumar, learned counsel appearing for the petitioner, would submit that the petitioner was allotted Plot No. 14A and handed over through the registered lease deed on 28.02.2015 for a period of 33 years. In spite of best efforts, due to unprofessional allotment of plot situated in wrong zoning of the industries, the petitioner could not able to secure bank loans and approvals required. The independent quality auditor expressed that the location, in which the petitioner was allotted a plot, is not suitable for establishment of the petitioner's Bulk drug industry as its neighbour M/s. Sundaram Alloys Limited is generating huge pollutants and its emissions may damage the petitioner's proposed industry. In those circumstances, the petitioner requested the respondent-Corporation for allotment of the suitable plot for establishing the petitioner's proposed industry and for that purpose only, extension of time was sought. Without conceding the petitioner's request for allotment of alternative plot suitable for establishing the petitioner's proposed industry and though the respondent-Corporation was informed about the difficulties faced by the petitioner, the respondent-Corporation issued the impugned show-cause notice for cancellation of lease and resumption of plot, by asking the petitioner's explanation with a pre-determined mind to cancel and resume the plot. Hence, the writ petition is maintainable before this Court against the impugned show-cause notice. In support of his contention, he placed reliance on 1) Hon'ble State of U.P. Vs. Brahm Datt Sharma [ (1987) 2 SCC 179 ]; 2) Special Director Vs. Mohd. Hence, the writ petition is maintainable before this Court against the impugned show-cause notice. In support of his contention, he placed reliance on 1) Hon'ble State of U.P. Vs. Brahm Datt Sharma [ (1987) 2 SCC 179 ]; 2) Special Director Vs. Mohd. Ghulam Ghouse [ (2004) 3 SCC 440 ]; and 3) Union of India Vs. Kunisetty Satyanarayana [ (2006) 12 SCC 28 ], wherein it is held that when notice issued with a pre-determined mind to cancel and resume the plot, a writ petition is maintainable and in such an event, even if the Court directs the statutory authority to hear the matter afresh by considering the reply, ordinarily such hearing would not yield any fruitful purpose. Therefore, he contended that as the impugned show-cause notice was issued with a pre-determined mind, this Court would interfere with the same as it is illegal. 4. Sri U. Ugranarasimha, learned standing counsel appearing for the respondent-Corporation, vehemently contended that the impugned show-cause notice is issued calling the petitioner's explanation as to why the lease deed should not be cancelled and resumed the plot. The petitioner having submitted its reply on 09.12.2020 to the show-cause notice dated 04.12.2020, immediately on 10.12.2020 filed the present writ petition before this Court without giving any sufficient time for the respondent-Corporation to consider the same and pass appropriate orders. He has drawn the attention of this Court to the impugned show-cause notice and the references made therein and states that the provisional allotment order was made on 30.10.2013 and final allotment order was made on 09.10.2014 modifying the earlier allotment order by allotting Plot No. 14A to the petitioner and thereafter the lease deed was executed on 28.02.2015 and non-commissioning of the industry by the petitioner, a show-cause notice dated 26.05.2017 was issued. On the request of the petitioner made on 11.01.2018, extension of time was granted on 26.10.2018 on time lines and he has to submit bimonthly progress report to the respondent-Corporation. But, the petitioner failed to start any work and no progress report is submitted as per letter of extension of time. Hence, the respondent-Corporation issued the impugned show-cause notice duly indicating the earlier correspondence made with the petitioner after entering into the lease deed on 28.02.2015 and at any stretch of imagination, the same could not be said that the show-cause notice was issued with a pre-determined mind by the respondent-Corporation. Hence, the respondent-Corporation issued the impugned show-cause notice duly indicating the earlier correspondence made with the petitioner after entering into the lease deed on 28.02.2015 and at any stretch of imagination, the same could not be said that the show-cause notice was issued with a pre-determined mind by the respondent-Corporation. The petitioner having submitted the reply to the show-cause notice on 09.12.2020, could have waited for consideration of the reply for passing final order, but rushed to this Court on 10.12.2020. Even the reply of the petitioner shows that the plot allotted is not suitable for establishment of pharmaceutical industry due to the emissions generated by its neighbour and the petitioner has sought for only alternative plot which is suitable for establishment of the petitioner's industry. The respondent-authorities will consider the petitioner's reply and its request for allotment of alternate plot as per the terms and conditions of the APIIC Industrial parks allotment regulations, 2015. The petitioner filed this writ petition against the show-cause notice having submitted its reply. This Court while exercising its power under Article 226 of the Constitution of India could not decide the issue raised in this writ petition as disputed questions of fact do arise for consideration in deciding the lis. The writ petition is not maintainable against the show-cause notice and is liable to be dismissed. 5. Having regard to the facts and circumstances of the case and considering the submissions of both the counsel, and on perusal of the record, this Court, having carefully gone through the impugned show-cause notice, found that the petitioner was allotted Plot No. 14A on 09.10.2014 and the lease deed was executed for a period of 33 years by the respondent-Corporation on 28.02.2015. For non-establishment of the petitioner industry as per the agreement, a show-cause notice dated 26.05.2017 was issued and on the petitioner's request for extension of time, the same was granted on 26.10.2018 up to 25.10.2019. The issue of non-suitability of the plot for establishment of pharmaceutical industry was not raised before extension of time. 6. As the petitioner is not able to establish the industry as per the terms and conditions of the lease, keeping the plot vacant against the public interest which deprives the very purpose of allotment of plot and creation of employment generation to the local people and get the lease rentals to the respondent-Corporation. 6. As the petitioner is not able to establish the industry as per the terms and conditions of the lease, keeping the plot vacant against the public interest which deprives the very purpose of allotment of plot and creation of employment generation to the local people and get the lease rentals to the respondent-Corporation. The petitioner failed to fulfill its obligation as per the terms and conditions for establishment of industry as per the allotment made and also no rentals are paid to the respondent-Corporation. The petitioner also failed to submit bimonthly progress reports as per the letter of extension of time granted on 26.10.2018 to the petitioner. The respondent-Corporation issued the impugned show-cause notice dated 04.12.2020 and the petitioner submitted its reply on 09.12.2020 expressing its difficulty for establishment of proposed industry in the plot allotted and seeking alternative plot in newly developed zones of petitioner's choice in Atchutapuram or Parwada Phase II on the same commercial terms and same price. The apprehension of the petitioner that the respondent-Corporation without considering its reply with a predetermined mind may pass final cancellation and resumption order, is not well founded and the same could not be countenanced at this stage. 7. The law is well settled that the writ petition is not maintainable against the show-cause notice. The Hon'ble Apex Court in a case of Union of India Vs. Kunisetty Satyanarayana : 2006(12) SCC 28 held that a writ court may not exercise its discretionary jurisdiction in entertaining a writ petition questioning a notice to show cause except the same inter alia appears to have been without jurisdiction. The Hon'ble Supreme Court in a case of M/s. Siemens Ltd. Vs. State of Maharashtra & others : (2006) 12 SCC 33 also reiterated the same. Therefore, there is a heavy burden placed on the writ petitioner to establish its case that the show-cause notice was issued without jurisdiction and the show-cause notice came to be issued with pre-determined mind and no purpose would be served in submitting the explanation. 8. When there is no dispute with regard to the competency of the authorities to issue the show-cause notice and no mala fides are attributed to the authorities concerned, the contention of the petitioner that the respondent-authorities issued the show-cause notice with a pre-determined mind, is not supported by any evidence. 8. When there is no dispute with regard to the competency of the authorities to issue the show-cause notice and no mala fides are attributed to the authorities concerned, the contention of the petitioner that the respondent-authorities issued the show-cause notice with a pre-determined mind, is not supported by any evidence. In the absence of pre-determined and biased mind on the part of the respondent-authorities to cancel the lease deed and to resume the plot without considering the petitioner's reply in proper perspective, the contention of the petitioner is untenable. The reliance placed by the learned counsel for the petitioner on the judgments rendered by the Hon'ble Apex Court, which are in a different fact situation and circumstances of the case and law, has no application to the case of the petitioner. 9. In view of the above discussion, this Court came to the conclusion that the writ petition is devoid of any merit and is liable to be dismissed. 10. Accordingly, the Writ Petition is dismissed. No order as to costs. 11. Miscellaneous Petitions, if any, pending in this writ petition shall also stand dismissed.