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2023 Supreme(Mad) 1216

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
K. KUMARESH BABU, J.
M/s. Devi Irrigation Systems Pvt.Ltd., represented by its Managing Director, R. Theenachandran, Madurai 625 – Appellant
Versus
The State of Tamil Nadu, represented by its Secretary, Chennai & Others – Respondents
W.P. (MD) No. 3520 of 2014 & M.P. (MD) No. 1 of 2014
Decided On : 03-03-2023

Advocates appeared:
For the Petitioner:S. Palanivelayutham, Advocate. For the Respondent:R1 & R3, D. Farjana Ghoushia, Special Government Pleader, R2 & R4, T. Sakthi Kumaran, Advocate.

The main legal point established in the judgment is that an allotment order for land earmarked as an open space area in the planning approval is non-est, and the respondent is liable to pay interest to the petitioner for the amount paid.

Headnote:

Writ Petition - Allotment of Plots - Companies Act, 1956 - [Companies Act, 1956, Article 226 of the Constitution of India] - The court discussed the allotment of plots to a company for storage of materials, the cancellation of the allotment, and the legality of selling open space reserved area. The court found that the allotment order was non-est as the land was earmarked as an open space area in the planning approval, and ordered the respondent to pay interest to the petitioner.

Fact of the Case:

The petitioner, a company, sought allotment of plots for storage of materials. The allotment was cancelled as the plots were earmarked as open space reservation area. The petitioner had paid the amount and sought execution of the sale deed.

Finding of the Court:

The court found that the allotment order was non-est as the land was earmarked as an open space area in the planning approval. The court ordered the respondent to pay interest to the petitioner for the amount paid.

Issues: The issues involved the legality of the allotment of plots earmarked as open space reservation area and the cancellation of the allotment.

Ratio Decidendi: The court held that the allotment order was non-est as the land was earmarked as an open space area in the planning approval, and ordered the respondent to pay interest to the petitioner for the amount paid.

Final Decision: The Writ Petition was dismissed, but the second respondent was ordered to pay interest to the petitioner at the rate of 8% per annum for the amount paid.

JUDGMENT

(Prayer: Writ Petition filed under Article 226 of the Constitution of India for issuance of Writ of Certiorarified Mandamus, to call for the Impugned order dated 01.11.2013 passed by the 2nd Respondent in Rc.No.10871/IE4/2009-1 in relation to the cancellation of allotment of Plots bearing Nos.O and N in favour of the petitioner by the 2nd Respondent dated 23.11.2009 under reference Rc.No. 10871/P4/2009 and quash the same as illegal and consequently direct the Respondents particularly 2 and 4 to execute the sale deed in respect of said plot bearing Nos.O and N measuring to an extent of 72.20 and 30.40 cents totaling 102.60 cents situated at SIDCO-MAHA, Industrial Estate, Uranganpatti, Madurai District forthwith.)

1. The prayer in the writ petition is seeking for a Certiorarified Mandamus to call for the impugned order dated 01.11.2013 passed by the second respondent in Rc.No.10871/IE4/2009-1 in relation to the cancellation of allotment of plots bearing Nos.''O'' and ''N'' in favour of the petitioner dated 23.11.2009 under reference Rc.No. 10871/P4/2009, to quash the same and consequently to direct the respondents 2 and 4 to execute the sale deed in respect of said plots situated at SIDCO-MAHA, Industrial Estate, Uranganpatti, Madurai District.

2. Heard Mr.S.Palanivelayutham, learned counsel for the petitioner, Mrs.D.Farjana Ghoushia, learned Special Government Pleader for the respondents 1 and 3 and Mr.T.Sakthi Kumaran, learned counsel for the respondents 2 and 4.

3. Mr.S.Palanivelayutham, learned counsel for the petitioner would submit that the petitioner being in the field of manufacturing and marketing agricultural inputs throughout India established a Company in the name and style of M/S.Devi Irrigation Systems Private Limited, which is registered under the Companies Act, 1956 and has been carrying on business by manufacturing Inline Dripper Line, HDPE pipes and PVC pipes required for micro irrigation etc. Therefore, the company had required a huge vacant space for storing various materials without construction of any permanent building/structure. In pursuance to acquire the said land, the petitioner company had approached the second respondent for allotment of certain lands.

4. By proceedings dated 23.11.2009, the second respondent had allotted two plots being identified as Plot Nos.''O'' and ''N'' at MAHIA Industrial Estate, Uranganpatti on an outright sale basis for a tentative cost of Rs.39,57,700/-. The said tentative cost was quantified to Rs.35,42,165/-, which also included the interest for the allotted plots. The petitioner had paid the entire amount and has been requesting the second respondent to execute the sale deed in their favour. Without any further communication, the second respondent by the impugned order dated 01.11.2013 had passed the order of cancellation holding that the plots allotted to the petitioner have been demarcated as an open space reservation area. He would further submit that the petitioner having paid the amount as early as in the year 2010 has been waiting for allotment of these lands for storage of the materials manufactured by the petitioner company in the very same Industrial Estate.

5. The learned counsel for the petitioner would further submit that the petitioner will not put up any construction in the land and will only maintain it as a vacant space for storage of materials and therefore, the reason assigned by the second respondent without putting the petitioner on notice is wholly arbitrary. He would further submit that when the respondents had sold the property to the petitioner, the second respondent cannot be right in now saying that the land has been earmarked as an OSR land. Therefore, he would submit that the reason assigned in the impugned order is wholly non-est and will have to be set aside.

6. Countering his arguments, Mr.T.Sakthi Kumaran, learned counsel for the respondents 2 and 4 would submit that the Madurai Hosiery Industrial Estate Association (MAHIA) were allotted

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