Failure to comply with lease conditions justifies cancellation of the lease, emphasizing the necessity for timely establishment of operations by allottees under industrial development regulations.

JUDGMENT :

SANDEEP MEHTA, J.

1. Heard.

2. This appeal is preferred by the appellant, M/s. Piaggio Vehicles Pvt. Ltd.¹ [Formerly known as M/s. Piaggio (India) Pvt. Ltd. Hereinafter, referred to as “appellant-company”] for assailing the judgment and order dated 15th October, 2009 passed by the Division Bench of the Allahabad High Court² [Hereinafter, referred to as “High Court”] in Civil Miscellaneous Writ Petition No. 47482 of 2008 whereby, the aforesaid petition under Article 226 of the Constitution of India preferred by the appellant-company was dismissed, thereby affirming the order dated 25th August, 2008 passed by the Joint Managing Director of the Uttar Pradesh State Industrial Development Corporation (now Uttar Pradesh State Industrial Development Authority).³ [UPSIDA was formerly known as the Uttar Pradesh State Industrial Development Corporation (UPSIDC). UPSIDC was merged into and reconstituted as UPSIDA pursuant to the Uttar Pradesh State Industrial Development Corporation Limited (Transfer of Assets and Liabilities) Ordinance, 2018 (promulgated on 27.06.2018), and the subsequent UPSIDC Limited (Transfer of Assets and Liabilities) Act, 2018 (enacted on 10.09.2018). Hereinafter, referred to as “UPSIDA”]

3. By order dated 25th August, 2008, UPSIDA forfeited the lease of Plot No. A-1, Site-B, admeasuring 33 acres at Surajpur Industrial Area, District Gautam Budh Nagar, Uttar Pradesh which had been granted under lease deeds dated 19th March, 2002 and 10th July, 2007. The former lease deed was executed in favour of M/s. Piaggio India (P) Ltd., while the latter was executed in the name of the amalgamated entity, M/s. Piaggio Vehicles Pvt. Ltd. i.e. the appellant-company. The forfeiture was on account of breach of terms and conditions stipulated under sub-clauses (e) and (o) of Clause 3 read with Clause 5 of the lease deed i.e. for failing to complete construction of the factory building within the stipulated period or the extended time permitted thereunder. By the very same order, UPSIDA also notified its intent to re-enter the plot and to forfeit the premium paid by the appellant-company.

4. Before we delve into the factual and legal aspects of the matter, it would be apposite to refer to the proceedings which transpired after the order of forfeiture.

5. The High Court, vide order dated 12th September, 2008 passed in the captioned writ petition, directed the parties to maintain status quo, which continued till the dismissal of the writ petition.

6. Being aggrieved by the dismissal of the writ petition, the appellant-company approached this Court by way of this appeal by special leave, and the interim protection was extended vide order dated 27th October, 2009. The stay order was further modified on 6th November, 2009, restraining the respondents from taking possession of the subject plot. Leave in the matter was granted on 8th February, 2011.

7. During the pendency of the civil appeal, the appellant-company approached the concerned authorities for a settlement but the same did not fructify. Again, on 17th January, 2017, this Court directed the Managing Director, UPSIDA, to deliberate upon the possibility of an amicable settlement. The appellant-company was granted liberty to make a representation to the Managing Director, UPSIDA, for attempting a settlement which ultimately did not materialise.

8. On 6th March, 2024, considering the submissions advanced by the learned Counsel representing the appellant-company, this Court passed the following order:

“Mr. Tarun Gulati, learned senior counsel appearing for the appellant, makes the following submissions:

(1) That the total outstanding dues as com