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IN THE HIGH COURT OF JUDICATURE AT MADRAS
C.V. KARTHIKEYAN, J.
Tropical Breweries (P) Ltd., Rep. by its Director Sharad Kumar, Chennai - Petitioner
Versus
The State of Tamil Nadu, Rep. by its Principal Secretary to Government, Chennai & Others - Respondent
W.P. No. 24840 & 25073 of 2012 & W.M.P. Nos. 2 & 1 of 2012
Decided On : 27-04-2019
Writ petitions challenging cancellation of allotment of plot and forfeiture of deposit and fees already paid, for non-commencement of construction of brewery within stipulated time. Petitioners claimed non-provision of road and water supply by respondent SIPCOT as reasons for non-commencement of construction. Lease deed provided for arbitration of disputes. Petitioners failed to invoke arbitration clause and rushed to Court.
Fact of the Case:
Petitioners were allotted a plot in Thervoy Kandigai Industrial Park for setting up a brewery. They entered into a lease deed and a separate Water Supply Agreement with SIPCOT. Petitioners failed to commence construction within the stipulated time and extended time. SIPCOT issued show cause notice and subsequently cancelled the allotment and forfeited the deposit and fees. Petitioners filed writ petitions challenging the cancellation.
Finding of the Court:
The Court held that the disputes raised by the petitioners were arbitral in nature and should have been referred to arbitration as per the lease deed. The Court observed that the petitioners had not taken recourse to arbitration and had instead rushed to the Court. The Court further held that the writ Court cannot embark on a roving enquiry of facts entangling disputed questions of facts and interpretation of clauses. The Court also noted that the plot was still available and had not been reallotted. Therefore, the Court dismissed the writ petitions but granted the petitioners an opportunity to raise the issues of non-provision of road and non-supply of water before an Arbitrator to be appointed as per the lease agreement.
Issues: 1. Whether the disputes raised by the petitioners were arbitral in nature and should have been referred to arbitration as per the lease deed? 2. Whether the writ Court can embark on a roving enquiry of facts entangling disputed questions of facts and interpretation of clauses? 3. Whether the petitioners were entitled to an opportunity to raise the issues of non-provision of road and non-supply of water before an Arbitrator?
Ratio Decidendi: 1. Yes, the disputes raised by the petitioners were arbitral in nature and should have been referred to arbitration as per the lease deed. The lease deed clearly stipulated that disputes during the subsistence of the lease agreement had to be referred to an arbitration. 2. No, the writ Court cannot embark on a roving enquiry of facts entangling disputed questions of facts and interpretation of clauses. This is because the writ Court's jurisdiction is limited to enforcing legal rights and imposing corresponding duties. It cannot be used to create or establish legal rights. 3. Yes, the petitioners were entitled to an opportunity to raise the issues of non-provision of road and non-supply of water before an Arbitrator. The Court held that it would be in the interest of both the parties to present these issues before an Arbitrator who can adjudicate all issues and render a finding.
Final Decision: The Court dismissed the writ petitions but granted the petitioners an opportunity to raise the issues of non-provision of road and non-supply of water before an Arbitrator to be appointed as per the lease agreement.
(Prayer in W.P.No.24840 of 2012: This Petition filed under Article 226 of the Constitution of India, to issue a Writ of Certiorarified Mandamus calling for the records of the 1st respondent in Letter (D) No.168/H, P&E III dated 10.09.2011 as communicated to the petitioner by the 2nd respondent by Letter No.P&E V (1)/6263/2010 dated 16.08.2012, quash the same and consequently direct the respondents 1 and 2 to extent the Letter of Intent dated 06.09.2010 issued to the petitioner.
Prayer in W.P.No.25073 of 2012: This Petition filed under Article 226 of the Constitution of India, to issue a Writ of Certiorarified Mandamus calling for the records of the 3rd respondent in its letter P&SP/SIP-TK/Tropical/5/2010 dated 21.11.2011, quash the same and consequently direct the 3rd respondent to perform its obligation under the Lease Deed dated 02.02.2011 and the Agreement for supply of water from the Water Supply Scheme, SIPCOT Industrial Park, Thervoy Kandigai dated 02.02.2011.)
1. The writ petitioner in both writ petitions, Tropical Breweries Pvt. Ltd., represented by its Director Mr.Sharad Kumar, has sought the relief of Certiorarified Mandamus in W.P.No.24840 of 2012 to call for the records of the first respondent, State of Tamil Nadu represented by its Principal Secretary to Government, Home, Prohibition and Excise (III) Department, in Letter (D) No.168/H, P&E III dated 10.09.2011 as communicated by the second respondent, the Commissioner of Prohibition and Excise, Chennai, Letter.No.P&E V (1)/6263/2010 dated 16.08.2012 and quash the same and the relief of Certiorarified Mandamus in W.P.No.25073 of 2012 to call for the records of the third respondent, State Industries Promotion Corporation of Tamil Nadu, represented by its Chairman and Managing Director in its Letter P&SP/SIP-TK/Tropical/5/2010 dated 21.11.2011 and quash the same. Since the facts in both the writ petitions overlap and since the writ petitioner and the respondents are also the same, both the writ petitions are taken up for consideration.
2. The writ petitioner was incorporated on 11.11.2009 with the principal object of setting up a brewery and distillery. The petitioner had addressed the first respondent by letter dated 08.04.2010 in Form B-I expressing desire to establish a brewery, in the proposed Industrial Estate promoted by the third respondent, SIPCOT, at Thervoy Kandigai for manufacture of Beer. A scheme for working of the brewery as required under Rule 3 (1) of the Tamil Nadu Brewery Rules, 1983 was also submitted and the approval of the State Government was sought. The Government sought for the opinion of the second respondent, the Commissioner of Prohibition & Excise, in this regard.
3. The petitioner also approached the third respondent SIPCOT by letter dated 12.04.2010, requesting allotment of land in Thervoy Kandigai Industrial Complex. Necessary application forms and payments required were also enclosed/made. By letter dated 12.04.2010, SIPCOT agreed in principle to allot 30 acres of land at the rate of Rs.27.50 Lakhs per acre, subject to the petitioner obtaining “No Objection Certificates” from the Tamil Nadu Pollution Control Board and other statutory authorities. This decision to grant in principle allotment was communicated by the petitioner to the second respondent. The second respondent sought reports from the District Collector, Thiruvallur, and also from the Managing Director of Tamil Nadu State Marketing Corporation Limited. The second respondent also called upon the petitioner to furnish a Site Elevation Plan.
4. The third respondent, SIPCOT, by letter dated 19.04.2010, while informing that Plot No.A-6/1 admeasuring 30 acres had been allotted to the petitioner, also agreed to allocate 15 lakh litres of water per day, subject to payment of capital cost on water supply system and also execution of a Water Supply Agreement. The third respo
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