Nagad Narayan Agro Foods Pvt. Ltd. v. State of Rajasthan
2025-04-22
MUNNURI LAXMAN
body2025
DigiLaw.ai
JUDGMENT : 1) This order disposes S.B. Civil Writ Petition No.13890/2021 and S.B. Civil Writ Petition No.5954/2025. 2) The Writ Petition No. 13890/2021 challenges the proceedings pending before the Infrastructure Development Committee (hereinafter referred to as “IDC”) of the Rajasthan State Industrial Development and Investment Corporation Limited (hereinafter referred to as “RIICO”) on the grounds that the Chairman of RIICO, who decided the petitioner’s first appeal, is also a member of the IDC, which is competent to decide the second appeal and the same is in violation of the principles of natural justice, specifically the principle that no person shall be a judge in his own cause and that the adjudicating authority must be impartial and act without any kind of bias. 3) The Writ Petition No. 5954/2025 is filed challenging the show cause notice of eviction issued under Rajasthan Public Premises (Eviction of Unauthorized Occupants) Act, 1964 (hereinafter referred to as “the Act of 1964”) 4) The brief facts leading to the present writ petitions are that the petitioner is a company registered under the Companies Act. The petitioner was allotted industrial plots No. E-593 to E- 596, and F-609 to F-615 in the Industrial Area Karni (Extension) for setting up an industrial unit for the manufacture of sugar- based products with an investment of Rs. 39.62 crores. Subsequently, a lease deed was executed on 30.09.2012 between the petitioner and RIICO. One of the conditions of the allotment was that the petitioner was required to commence production on the allotted land by 10.04.2019. The Senior Regional Manager of RIICO, Bikaner, issued a notice dated 30.04.2019 to the petitioner to show cause why the allotment of land should not be canceled for failing to commence production on the land as per the conditions of the allotment. The petitioner submitted an explanation in response to the notice, claiming that RIICO itself had failed to obtain Environmental Clearance until 11.04.2017 and, therefore, it could not place the blame on the petitioner. 5) The Respondent No. 4, being dissatisfied with the explanation, passed an order dated 25.11.2019, canceling the allotment of land made in favor of the petitioner. The petitioner filed an appeal before the Chairman of RIICO, and by order dated 13.12.2019, the Chairman dismissed the first appeal. Against the dismissal, the petitioner preferred a second appeal before the IDC of RIICO. Such proceedings are currently pending before the IDC.
The petitioner filed an appeal before the Chairman of RIICO, and by order dated 13.12.2019, the Chairman dismissed the first appeal. Against the dismissal, the petitioner preferred a second appeal before the IDC of RIICO. Such proceedings are currently pending before the IDC. 6) The case set up by the respondents shows that the respondents allotted industrial plots to the petitioner in terms of the RIICO Disposal of Land Rules, 1979 (hereinafter referred to as “the Rules of 1979”). The conditions of allotment indicate that the petitioner was required to set up the industry within two years from the date of allotment, with a minimum investment of Rs. 39.62 crores. The RIICO obtained the Environmental Clearance certificate on 11.04.2017. Till then, the petitioner could not commence any project work. The respondents issued notices on 20.12.2017, 05.03.2018, 13.04.2018, 26.06.2018, 05.11.2018, and 11.01.2019, asking the petitioner to complete the project within two years from the date of Environmental Clearance, i.e., by 10.04.2019. The petitioner, however, could not complete the project within the stipulated time. The petitioner submitted an application for an extension of time and also requested a reduction in the minimum investment requirement. This request was forwarded to RIICO, but it was subsequently rejected. In these circumstances, a show-cause notice was issued, asking for an explanation regarding the proposed cancellation of the allotment. Having found the explanation unsatisfactory, the respondent No. 4 canceled the allotment of land. The petitioner availed the remedy of filing a first appeal, but was unsuccessful. The second appeal lies before the IDC, and the petitioner also filed the second appeal before the IDC. The IDC consists of the following authorities: (i) Chairman of RIICO, (ii) Managing Director of RIICO, (iii) Commissioner of Industries, (iv) Commissioner of Investment & NRI and (v) Managing Director of Rajasthan Finance Corporation. The decision is to be made by a majority. The respondents refuted the petitioner’s allegation of bias. 7) The respondents also pleaded that, in pursuance of the cancellation order, a show-cause notice was issued under the Act of 1964 for eviction and the challenge to such an eviction notice is premature and they prayed for the dismissal of both writ petitions. 8) Heard the learned counsel for both the parties.
7) The respondents also pleaded that, in pursuance of the cancellation order, a show-cause notice was issued under the Act of 1964 for eviction and the challenge to such an eviction notice is premature and they prayed for the dismissal of both writ petitions. 8) Heard the learned counsel for both the parties. 9) The contention of the learned Senior Counsel appearing for the petitioner is that the first appellate authority is the Chairman of RIICO, who is also the Chairman of the IDC, which is required to hear second appeals and such a constitution of the IDC, which is required to hear the second appeal of the petitioner, is against the principles of natural justice. According to him, if the second appeal is decided by the IDC, which includes the Chairman of RIICO and the MD of RIICO, it would amount to an appeal from Caesar to Caesar, violating the principle of fair play. The same person cannot perform dual roles, as this contravenes the principle that no one shall be a judge in their own cause, leading to an apparent bias. 10) The learned Senior Counsel appearing for the petitioner has relied upon the decisions of Apex Court in the cases of (i) Baidyanath Mahapatra Vs. State of Orissa & Anr ., AIR 1989 Supreme Court 2218 , (ii ) Amar Nath Chowdury Vs. Braithwaite & Co. Ltd. & Ors. , AIR 2002 Supreme Court 678 and (iii) A.U. Kureshi Vs. High Court of Gujarat & Anr. , (2009) 1 SCR 879 . 11) Per contra, the argument of learned counsel appearing for the RIICO is that although, the Chairman of RIICO is the Chairman of the IDC, they are not the same person/individual. It is also the submission that the Committee is not a single-member body; it consists of various other independent authorities who are unconnected with RIICO, and the decision would be made by the majority. Therefore, there is no violation of the basic foundational principle that no person shall be a judge in their own cause. 12) The learned counsel appearing for the respondents has also submitted that the doctrine of necessity excludes the application of principles of natural justice. Even though some of the members who are part of the IDC and involved in decision making, such a decision is not invalid even if it violates the principle of natural justice.
12) The learned counsel appearing for the respondents has also submitted that the doctrine of necessity excludes the application of principles of natural justice. Even though some of the members who are part of the IDC and involved in decision making, such a decision is not invalid even if it violates the principle of natural justice. The learned counsel appearing for the respondents has relied upon the decision of Apex Court in the case of ABP Pvt. Ltd. & Anr. Vs. Union of India & Ors ., (2014) 3 SCC 327 . 13) I have considered the contentions of both the parties and carefully perused the material available on record. 14) In the light of the aforesaid submissions, it is apt to refer to relevant provisions of Rule 24(2) of the Rules of 1979, which reads hereunder:- “24 (2) Review/Appeal (a) – Review 1. Any person who is aggrieved with the cancellation order issued by the authority concerned is eligible to file review application before the Reviewing Authority. 2. Review application shall lie subject to condition that party has not filed any appeal under RIICO Disposal of Land Rules, 1979 , if: i. Any error apparently on face of record; ii. Any error of interpretation of rule/law; 3. Such review application shall be filed within 45 days from the date of passing of order subject to condition that order sent by registered A/D or Speed Post and also through e-mail, if available with record. 4. The Reviewing Authority would be the authority who passes any order under the provisions of RIICO Disposal of Land Rules, 1979 . 5. No application fee would be payable to file review application. (b) – Appeal 1. If any person is aggrieved by any order passed by any competent authority of the Corporation pertaining to cancellation order under the RIICO Disposal of Land Rules 1979, he may file an appeal before the Appellate Authority. 2. The Appellate Authority for hearing the First Appeal/Second Appeal shall be as follows; (i) In case the cancellation order is issued by the Unit Head concerned at his level, without consultation with head office – Managing Director. Second Appeal shall lie before the Chairman.
2. The Appellate Authority for hearing the First Appeal/Second Appeal shall be as follows; (i) In case the cancellation order is issued by the Unit Head concerned at his level, without consultation with head office – Managing Director. Second Appeal shall lie before the Chairman. (ii) In case the cancellation order is issued by the Unit Head concerned on the directions of the head office – Chairman Second Appeal shall lie before the Infrastructure Development Committee (IDC) of the Board of Directors, provided that it can be established in the plea that there is error apparent on the face of the record that has not been taken into consideration by the cancellation and appellate authority. 3. Such appeal shall lie before Appellate authority in following conditions; i. Any review/restoration application is rejected by the competent authority; and/or; ii. The party did not prefer the review /restoration application against the cancellation order; and/or; iii. If case is not covered under the restoration policy. iv. If Appellant prefers to file second Appeal against order passed in first Appeal. Provided that the plot for which appeal is being filed, is still not re-allotted.” A reading of the above rules clearly indicate that if the cancellation order is passed by the Unit Head without consultation with the Head Office, the first appeal lies with the Managing Director, and the second appeal lies with the Chairman. If the cancellation order is issued by the Unit Head on the directions of the Head Office, then the first appeal lies with the Chairman, and the second appeal lies with the Infrastructure Development Committee (IDC) of the Board of Directors of RIICO. 15) In the present case, the facts on record show that the first appeal was decided by Mr. Kuldeep Ranka, the Chairman of RIICO. The Chairman of RIICO is also the Chairman of the IDC of the Board of Directors of RIICO, and there are four other authorities in IDC, and the decision must be made by majority. It is also an admitted fact that when the second appeal was filed, the Chairman of RIICO is the same individual who passed the order in the first appeal, and the same individual was the Chairman of the IDC in his capacity as a Chairman of RIICO.
It is also an admitted fact that when the second appeal was filed, the Chairman of RIICO is the same individual who passed the order in the first appeal, and the same individual was the Chairman of the IDC in his capacity as a Chairman of RIICO. However, the situation now is that the individual who is now Chairman of the IDC (Chairman of RIICO) is a different individual, and he is not the same person who passed the order in the first appeal, although he holds the post of Chairman, RIICO. 16) The question before this Court is whether such a constitution is legally flawed and contrary to the principles of natural justice, particularly the principle that no person can be a judge in his own cause. A close examination of various decisions of the Apex Court, relied upon by the learned Senior Counsel for the petitioner, it is clear that no person shall be a judge in his own cause, and the adjudicating authority must be impartial and act without any form of bias. Bias can take different forms, including pecuniary, personal, or subject-matter bias. The principles further clarify that an individual cannot perform dual roles, and the same person cannot sit as the decision-maker in both the first and second appeals. This ratio was laid down by the Supreme Court in the context of an individual performing dual roles, either as the original authority, the appellate authority, or the further appellate authority. 17) The argument of the learned Senior Counsel appearing for the petitioner is that though the individual may not be the same, the Chairman who is the competent authority to decide the first appeal cannot be part of IDC and preside over the proceedings to consider the second appeal, which was filed against the order passed by different individual in the capacity of Chairman, RIICO. The underlying principle is that dual function is not permissible on account of established rules against bias. The principles of bias is based on actual bias and apparent or inferential bias. If the same individual is functioning in a dual role, it would amount to an apparent or inferential bias. This means that same individual is disqualified to sit in appeal against his own order.
The principles of bias is based on actual bias and apparent or inferential bias. If the same individual is functioning in a dual role, it would amount to an apparent or inferential bias. This means that same individual is disqualified to sit in appeal against his own order. In the present context of the facts though the Chairman of RIICO is the designated authority to hear the first appeal and also Chairman of the IDC, if the individual who took a decision in first appeal and the individual, who presides the Committee of IDC in capacity of Chairman RIICO, is a one person, it is clearly against the principles of a judge deciding in his own cause. However, if the individual is different, it cannot be said that he is deciding his own cause. Thus, the constitution of IDC cannot be said to be invalid. 18) Further, in the present case, the IDC consists of four different authorities of different fields and total strength of the Committee is five members, including the MD, RIICO. The decision is of the majority. Such a constitution of the IDC would be said to be against the principles of natural justice if the order, which is to be examined by the said authority passed by same individual in the capacity of first appellate authority. In the present case, the Chairman of the Committee, which is hearing the second appeal, is different individual though holding the post of Chairman, RIICO. Therefore, the principles which are laid down in the various decisions are not strictly applicable to such a situation. The learned Senior Counsel appearing for the petitioner could not able to produce any of the decision of the Apex Court, which would say that even individuals are different they cannot hear the appeal. 19) The decisions relied upon by the learned Senior counsel for the petitioner is not relevant to the facts in the present case. The contention the learned Senior counsel for the petitioner is devoid of merit and the same is rejected. 20) The contention of the learned counsels appearing for the respondents are that the principle of necessity can be invoked in the present case even if the Chairman, RIICO though different individual incurs disqualification. The principles relating to doctrine of necessity has been recognized by the Apex Court in the case of J. Mohan Patra & Co. & Anr. Vs.
20) The contention of the learned counsels appearing for the respondents are that the principle of necessity can be invoked in the present case even if the Chairman, RIICO though different individual incurs disqualification. The principles relating to doctrine of necessity has been recognized by the Apex Court in the case of J. Mohan Patra & Co. & Anr. Vs. State of Orisa and Anr., 1985 (1) SCR 238 p. 112 and the same was considered by the Apex Court in the case of Charan Lal Sahu Vs. Union of India , MANU/SC/0285/1990 and the Court held in para 105 as here under:- “105......The doctrine of necessity would be applicable in a situation of this nature. The doctrine has been elaborated, in Halsbury's Laws of England, 4th Edition, p, 89, paragraph 73, where it was reiterated that even if all the members of the Tribunal competent to determine a matter were subject to disqualification, they might be authorised and obliged to hear that matter, by virtue of the operation of the common law doctrine of necessity, An adjudicator who is subject to disqualification on the ground of bias or interest in the matter which he has to decide may in certain circumstances be required to adjudicate if there is no other person who is competent or authorised to be adjudicator or if a quorum cannot be formed without him or if no other competent tribunal can be constituted......” 21) As rightly contended by the learned counsel for the respondents, such a doctrine can be pressed into service, if the person, who decided, suffers from disqualification unless it is shown that there is no other person, who is competent or authorized to be adjudicator or if a quorum cannot be formed without him or if no other competent tribunal is constituted. 22) In the present case, IDC is appointed by the Board of Director of RIICO. The Board of Directors can re-constitute the IDC excluding the Chairman, RIICO or the Managing Director, in case, the individuals, who decided the first appeal and who is part of decision making in the second appeal are same. In the present case such a situation did not arise as individual, who decided the first appeal, is no more in individual participating in the second appeal though the authority may be same.
In the present case such a situation did not arise as individual, who decided the first appeal, is no more in individual participating in the second appeal though the authority may be same. Therefore, the principles doctrine of necessity has no relevance in the present context of the facts. Therefore, the first writ petition is devoid of merit and required to be dismissed. 23) The show-cause notice challenged in one of the writ petition is only consequential proceedings. It is nothing but an execution proceedings taken up in pursuance of order of cancellation made by the first appellate authority, which order is still in force and it is not stayed by the second appellate authority during the pendency of the proceedings. Therefore, the challenge made in the second writ petition to the show cause notice is devoid of merit and the same is also required to be dismissed. 24) In the result, both the writ petitions are dismissed. 25) In the circumstances, no order as to costs. 26) Pending interlocutory applications, if any, shall stand disposed of.