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.

JUDGMENT

1. The petitioner is the sole proprietor of Aghum Enterprises, which was running an industrial unit in the Samaipur Badli industrial area, involved in manufacture of moulded sports and rubber belts since March 1979. The unit remained functional till June 1998, when the petitioner shifted to the Libaspur industrial area.

2. The issue of relocation of industrial units situated in the city of Delhi, to suburban areas in the National Capital Region (NCR) was examined, in detail, by the Supreme Court, resulting in an order passed on 8th July 1996 in M.C. Mehta v. Union of India1996 (4) SCC 750, which directed that industrial units within Delhi be relocated to other areas in the NCR

3. Following the said decision, the Government of National Capital Territory of Delhi (GNCTD) and the Delhi State Industrial and Infrastructure Development Corporation (DSIIDC) identified industries which were required to be relocated. Guidelines for such relocation were issued by the GNCTD (hereinafter 'the Relocation Scheme'), identifying seventeen categories of industries which were required to be so relocated, thus:

4. Applications were invited from units engaged in the said industries, situated in non-conforming areas, for relocation. The eligibility for relocation was thus stipulated in the said notice:

'1. Eligibility:

(i) Non-conforming industrial units working in residential and/or other non-conforming areas which are non-hazardous, non-noxious, and non-polluting shall be considered, for allotment of flatted factory/industrial plot for relocation.

(ii) No new 'industrial' unit shall be considered for allotment, in the Flatted Factory Complexes/Industrial areas proposed to be developed.'

5. Clause 3 of General Conditions for application further stipulated as under:

'3. The applicants are also required to submit an Undertaking alongwith the application in the prescribed form on non-judicial stamp paper of Rs.2/- duly attested by a Notary public/1st Class Magistrate to the effect that on allotment of the plot/flat he shall shift from the present place to the industrial estate where the plot/flat is allotted failing which it will be presumed that the said unit IS not interested in relocating its manufacturing activities and as such shall stop operating in residential/non-conforming areas w.e.f. 1-1-1997.'

6. There is no dispute about the fact that the industry in which the petitioner's unit was engaged was one of the industries enlisted in the afore-noted guidelines issued by the GNCTD. Equally, there is no dispute that Samaipur Badli, in which area the petitioner's unit was located, was a non-conforming area. The petitioner's unit was, therefore, indisputably entitled, as on the date when applications were invited, for relocation.

7. Accordingly, on 23rd December 1996, the petitioner applied for relocation of its unit, under the afore-noted Relocation Scheme. As required by the Relocation Scheme, the petitioner also discontinued industrial activities in its unit w.e.f. 1st January 1997.

8. Having waited for two years for being allotted an alternative plot, the petitioner, in 1998, shut down and sold its unit at Samaipur Badli and shifted to the Libaspur industrial area. However, the