Back
SUPREME COURT OF INDIA
SURYA KANT, NONGMEIKAPAM KOTISWAR SINGH, JJ.
Kamla Nehru Memorial Trust and Another – Appellants
Versus
U.P. State Industrial Development Corporation Limited and Others – Respondents
Civil Appeal No. 7273-7274 of 2025 [Arising Out of SLP (C) Nos. 31887-31888 of 2017
Decided On : 30-05-2025
(A) Labour and Industrial Law – Cancellation of allotment of land by UPSIDC – UPSIDC was obligated to hand over possession only after registering lease deed, which was a mandatory condition – Insistence of UPSIDC to furnish requisite documents for registration of lease deed was both legitimate and in conformity with prescribed procedure – Since KNMT failed to furnish necessary documents in a timely manner, it is itself to blame for non-delivery of possession – None of alleged acts, non-demarcation, removal of encroachment, or non-delivery of possession, constitute conduct that would frustrate performance of allotment terms – KNMT failed to fulfil its obligations, particularly regarding timely submission of documents required for executing lease deed – Land allotment authorities such as UPSIDC possess inherent right to cancel allotments upon violation of stipulated conditions – Judicial intervention in matters concerning land revocation should be circumscribed to ensure adherence to procedural safeguards – KNMT is a chronic defaulter – Allowing deliberate defaults to persist unchecked would undermine entire framework of land allocation and set a detrimental precedent – Failure to adopt transparent mechanisms not only deprived public exchequer of potential revenue-as evidenced by substantial appreciation in value of such a large tract of land-but also created a system where privileged access supersedes equal opportunity – This betrays fiduciary relationship between State and its citizens – Cancellation of allotment by UPSIDC upheld. (Paras 15, 16, 17, 20, 25, 33 and 35)
(B) Constitution of India – Article 21 – Industrial Land Allotment – Public Trust Doctrine – Doctrine emanates from ancient principle that certain resources (seashores, rivers and forests) are so intrinsically important to public that they cannot be subjected to unrestricted private control – Rooted in Roman law and incorporated into English common law, this Doctrine recognizes that Sovereign holds specific resources as a trustee for present and future generations – In Indian context, Doctrine has evolved to encompass public resources meant for collective benefit, reflecting constitutional mandate under Article 21 – While Doctrine does not impose an absolute prohibition on transferring public trust property, it subjects such alienation to stringent judicial review to ensure legitimate public purpose and adequate safeguards – When a substantial tract of industrial land is allocated without a comprehensive evaluation, it raises critical questions about adherence to these principles – Doctrine requires that allocation decisions be preceded by a thorough assessment of public benefits, beneficiary credentials and safeguards ensuring continued compliance with stated purposes. (Paras 20, 30, 31 and 32)
Facts of the case:
Crux of dispute relates to legality of decision of cancellation of allotment of Subject Land by UPSIDC.
Findings of Court:
State Government of Uttar Pradesh and UPSIDC are directed to ensure that any such allotment in future be made in a transparent, non-discriminatory and fair manner by ensuring that such allotment process fetches maximum revenue and also achieves larger public interest like industrial development priorities, environmental sustainability, and regional economic objectives.
Result : Appeals dismissed.
JUDGMENT :
SURYA KANT, J.
1. Leave Granted.
2. These appeals have been preferred by the Kamla Nehru Memorial Trust (KNMT) against the final common judgment and order dated 29.05.2017 passed by the High Court of Allahabad at Lucknow Bench (Impugned Order), whereby it upheld the cancellation of allotment of land admeasuring 125 acres situated in the Utelwa Industrial Area, Jagdishpur, District Sultanpur, Uttar Pradesh (Subject Land) by the Uttar Pradesh State Industrial Development Corporation (UPSIDC).
3. The crux of the dispute pending before us relates to the legality of the decision of cancellation of allotment of the Subject Land by UPSIDC. However, it would be apropos to discuss the factual matrix before delving into the analysis pertaining to the alleged procedural irregularities in the cancellation of allotment of the Subject Land.
(A) FACTS
4. In this vein, the sequence of events has been briefly adduced as follows:
4.2. UPSIDC, in an uncharacteristically swift manner, accepted the application of KNMT and allotted the Subject Land vide allotment letter dated 18.09.2003 (Allotment Letter). The allotment was made conditional upon compliance with certain terms, the relevant provisions of which are reproduced below:
“xxx xxx xxx
3.You shall deposit at this office an amount of Rs. 12,02,187.50. (Earnest Money of Rs. 62,500.00 has been adjusted) towards reservation money in respect of the above plot latest by 18-10-2003. This amount (together with Earnest money) is approximately equal to 10 percent of the total premium of the plot at the provisional rate of Rs. 25.00 per sq. mtr. and locational charges @ Rs. Nil per sq. mtr. for first five acres and is subject to adjustment according to actual measurement of the plot. If the above amount falls short of the amount equal to 10 percentage of the total premium according to actual measurement, the balance will be deposited by you within seven days of the receipt of demand from us.
If the payments are not made as stipulated above this allotment will stand automatically cancelled/and the whole amount of the Earnest Money deposited by you will stand forfeited to this corporation, even if the area of the plot either exceeds or is less than the area of 20% or less of the area applied for. However, if the area of the land allotted either exceeds the area applied for or falls short of the applied for by an area more than 20% of it, the Earnest Money will not be forfeited if this allotment is not accepted, provided intimation is sent to us in this respect by the date stipulated above.
Note: the premium herein is provisional and is liable to be enhanced in accordance with the provisions of Licence Agreement/Lease Deed.
xxx xxx xxx
5. The remaining 90% of the provisional premium shall have to be paid by you in 8 equal half yearly installments each of which will be due for payment on 1st day of January and 1st day of July each year. The first installments of each payment will fall due for payment on 01.01.2006. The second and subsequent installments of the premium will fall due on 1st day of July and 1st day of January each year. An interest at 15.00% per annum shall be charged on the outstanding (balance) premium with effect from the date of allotment and will be payable along with installments of premium as stipulated in clause 3 above subject to a rebate of 3.00% per annum and payment on or before the prescribed date and if there are no arrears of dues. The amount of the balance premium and the interest due on it from time to time shall remain first charge on the land and the building and machinery erected thereon till it is (they are) paid in full.
Note: the premium mentioned here
(1) Land allotment authorities possess inherent right to cancel allotments upon violation of stipulated conditions – Judicial intervention in matters concerning land revocation should be circumscribe....
Repeated non-compliance with lease obligations justifies cancellation, prioritizing public interest and fiscal discipline over personal hardships.
The cancellation of land allotment by MHADA was justified due to the Trust's failure to comply with payment obligations and suppression of material facts.
Cancellation of land leases must adhere to statutory limitation periods; proceedings initiated beyond these limits are illegal and violate principles of natural justice.
An indispensable Tool for Legal Professionals, Endorsed by Various High Court and Judicial Officers
Please visit our Training & Support
Center or Contact Us for assistance
Scan Me!
India’s Legal research and Law Firm App, Download now!
For Daily Legal Updates, Join us on :
Back to top
