IN THE HIGH COURT OF JUDICATURE AT PATNA
SANJAY KAROL, CJ and S. KUMAR, J.
(21.10.2022)
CWJC No.7160 of 2020
M/s Civmill Industries Pvt. Ltd. : Petitioner
Vs.
Bihar Industrial Area Development
Authority & Ors. : Respondents
Government Contract–Rejection of allotment of BIADA land to the petitioner–petitioner was allotted BIADA land in the year 1967 upon which industrial activity continued till 2002 but for reasons, not attributable to petitioner, the unit was closed and the petitioner applied firstly on 11.05.2015 for diversification/change of user to establish hospital and diagnosis centre as unit I and shopping mall, etc.–although proposal of petitioner but similar proposal for diversifaction etc. was permitted by BIADA with respect to other companies situated at Industrial Area, Patliputra, which remains unexplained by BIADA–subsequent proposal of petitioner with respect to diversification etc. were rejected by BIADA on the ground that same did not come within the preview of Industrial Investment policy, 2016 and only manufacturing unit can be permitted for diversification/change of uses of existing/closed units— however, subsequently, the Government has amended its policy and service sector as well as manufacturing centre are to be alloted lands of the BIADA and diversification/change of user is pemissible in both manufacturing as well as service sector–BIADA should focus more on industrialization of the state so that it generates more employment and revenue than to give restricted meaning to the Industrial Investment Policy, 2016–BIADA should literally examine the proposal for diversification/change of user of such industrial unit which were productive but have been closed as they have lost their utility or technology has become obsolete or products are not marketable or industrial units are not viable and profitable then such industrial units should be granted liberty to set up new industrial unit/diversification/change of user of their choice on their alloted land except which have to be explicitely prohibited under the industrial policy in negative list BIADA had permitted industrial unit of similar nature as proposed by petitioner of opening of new unit as well as diversification/change of user of exiting unit–then, there is no reason for rejection of proposal of petitioner as dispute is of much prior to coming of 2016 investment policy–sine the investment policy, 2016 has already been amended and both manufacturing sector as well as service sector have been permitted by BIADA for allotment of land for new industrial unit in priority list of industries as well as diversification / change of user for existing units, as such, at present there appears to be no hindrance in re-considering the proposals of petitioner for diversification / change of user over the land allotted to it–the one time Amnesty Policy also mandates reconsideration of such proposals afresh–impugned orders quashed–consequently, order cancelling the lease of petitioner company set aside–Writ petition disposed of with liberty to petitioner to submit a fresh proposal for diversification of industrial activities comprising either manufacturing or service within eight weeks and the BIADA directed to consider the said proposal in terms of Bihar Investment Policy, 2016 as amended from time to time. (Paras 36 to 44)
S. KUMAR, J.:–I.A. Nos.1, 3 and 4 filed on behalf of petitioner are allowed and shall form part of this writ petition.
C.W.J.C. No.7160 of 2020:
2. Petitioner has prayed for following reliefs:—
(i) For issuance of appropriate writ/writs, order/orders, direction/directions in the nature of certiorari by quashing the order as contained under Letter No.1606/D dated 06.06.2020, whereby and wherunder the representation dated 19.03.2020 submitted by petitioner along with project report has been rejected on nonest ground and without affording the reasonable opportunity of hearing to it.
(ii) For issuance of appropriate writ/writs, order/orders, direction/directions in the nature of mandamus commanding the respondent authority to allow the petitioner to move on with the project in the industrial interest of the State of Bihar.
(iii) For declaration that the impugned order of rejection dated 06.06.2020 takes away the fundamental right of petitioner to establish industry as guaranteed under Article 19(1)(g) of the Constitution of India.
(iv) For quashing of notice dated 31.07.2020 (Annexure-7 to the writ application) published by BIADA in local dailies to comply the directions given in the said notice within 15 days otherwise action shall be taken in accordance with law.
(v) For issuance of appropriate writ/writs, order/orders direction/directions for quashing the office order as contained under memo no.2447/D dated 19.08.2020, by which the diversification proposal submitted by petitioner has been rejected and allotment of land has been cancelled without serving any show cause notice in this regard.
(vi) For quashing of order contained in Memo No.3562/D dated 26.11.2020 (Annexure-14) issued by the Executive Director, BIADA, Patna whereby and whereunder the diversification proposal submitted by the petitioner has been rejected and allotment of land has been cancelled.
(vii) For any other relief/reliefs to which the petitioner is entitled in present facts and circumstances of the case.”
3. Petitioner’s company was allotted land measuring 1,01,216 square feet appertaining to plot Nos.A/4 and A/5 of the industrial area, Patliputra, Patna for establishment of sheet metal components for automobiles, railway and telecommunication along with their casting industry.
4. Petitioner’s company as an ancillary unit of TELCO manufactured the automobile part but after bifurcation of State of Bihar in the year 2000 and due to change in policy of TELCO, the manufacturing activity of petitioner’s company stopped after being in operation for more than three decades.
5. The respondent authorities in a cyclostyle order that it had not established industry, cancelled the allotment and registration of the petitioner along with others vide order dated 14.12.2006.
6. Petitioner’s company against the order of cancellation, filed writ petition being CWJC No.7359 of 2007 and this Hon’ble Court vide order dated 17.03.2008 allowed the writ petition along with other analogs cases and the allotment of land and lease deed was restored in favour of petitioner’s company, subject to outcome of LPA, S.L.P.
7. The respondent authorities filed an appeal being LPA No.353 of 2008 (BIADA and others Vs. Deepak Paints Private Limited and other analogous cases) and this Hon’ble Court disposed of the application with liberty to petitioner and other similarly placed industrial units for diversification of its project, which reads as follows:—
“Under these circumstances, we dispose of the appeals by modifying the order passed by the learned single Judge to the following effect:
(A) The orders of cancellation of leases or allotment of the land to the respondents herein shall stand set aside, but they are given six months time from today either to establish the industries, wherever they are not established, or to revive the industries, if they were already established, but have become sick.
(B) If any of the respondents, i.e. the writ petitioners, intend to go for diversification, any application in tha
The court upheld the cancellation of land allotment due to the petitioner's non-utilization for over twenty years, reinforcing authority's jurisdiction under the BIADA Act, 1974 and its amendments.
Existing units commencing production before new industrial policy but not availing prior incentives eligible under amended transitional Clause 8(b); prior clearances create vested rights invoking pro....
The judgment establishes that rejection of a proposal must be justified and in compliance with legal principles, and violation of natural justice can lead to the reversal of such decisions.
Failure to utilize allocated industrial land justifies its cancellation under statutory provisions.
A binding contract came into existence between the petitioner and the DSIIDC upon issuance of the allotment letter, and the DSIIDC could not unilaterally cancel the allotment.
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