The court affirmed that a lease cancellation under the Allotment Rules is valid if the industrial unit is not established within two years, and any transfer without permission is void.

ORDER :

I.A. No.1/2023:

Heard on application for condonation of delay.

For the reasons mentioned in the application, the same is allowed and the delay of 96 days in filing the present appeal is condoned.

1. Heard learned counsel for the parties on merit.

2. Present appeal is directed against the order dated 10.05.2023 passed by the learned Single Judge in exercise of jurisdiction under Articles 226 and 227 of the Constitution of India, whereby, the learned Single Judge has upset the finding recorded by the Board of Revenue (Revenue Appellate Authority), set aside the order and allowed petition.

3. Briefly stated, the relevant facts of the case giving rise to the appeal are that one Babu Lal Nagori was granted a lease of a parcel of land for setting up of an industrial unit on 13.02.1987 under the provisions of Rajasthan Land Revenue (Industrial Areas Allotment) Rules, 1959 (hereinafter referred to as “Allotment Rules of 1959”). In course of time, the said Babu Lal Nagori sold the land by a registered sale-deed in favour of the appellant- Kamla Bai on 08.11.1996. The District Collector, Udaipur, however, sent a notice on 19.07.2006 proposing to cancel the lease on the ground that the industrial unit having not been set up within a period of two years of grant of lease, resulted in violation of mandate of Rule 7 of the Allotment Rules of 1959. The proceeding so initiated upon issuance of notice eventually led to passing of an order of cancellation of lease. The order passed by the District Collector was challenged by filing appeal before the Revenue Appellate Authority. It appears that when the first order was passed by the District Collector, in the first instance, an appeal was preferred and the case was remanded. Whereafter, again an order was passed by the District Collector. That was again challenged by filing an appeal and the Revenue Appellate Authority again remanded the case. After the second remand, the District Collector passed an order on 30.10.2010 ordering cancellation of lease. The appellant preferred third appeal before the Revenue Appellate Authority, though unsuccessfully, as the appeal was dismissed vide order dated 29.11.2010. Aggrieved by the said order, appeal was preferred before the Board of Revenue, who vide order dated 08.10.2015 upset the order passed by the lower appellate authority and that of the Collector holding that no case was made out for cancellation of lease under the provisions of Rule 7 of the Allotment Rules of 1959. Aggrieved by the order of the Board of Revenue, the State preferred a writ petition under Articles 226 and 227 of the Constitution of India before this Court. The learned Single Judge vide order impugned, set aside the order passed by the Board of Revenue giving rise to the instant appeal.

4. When this case came up for hearing before this Court on 29.01.2025, while examining the material on record, it was noticed that apart from the issue as to whether the industrial unit was established within a period of two years as mandated under Rule 7 of the Allotment Rules of 1959, it appears that without permission of the allotting authority, the original allottee Babu Lal Nagori had executed transfer deed in favour of the appellant which, on prima facie consideration, appeared not only in violation of terms and conditions of the lease earlier granted in favour of Babu Lal Nagori but also in violation of statutory provisions contained in Rule 9 of the Allotment Rules of 1959. The parties were granted time to address the Court.

5. Learned counsel for the appellant raised following submissions:

A) The order passed by the Board of Revenue is based on correct factual premise and legally admissible documentary evidence on record. He would submit that the finding recorded by the Board of Revenue is essentially based on spot inspection report dated 28.06.2006 on the basis of spot inspection of the industrial unit which records that the industrial unit was closed down 10 to 12 years before and upon enq