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2023 Supreme(MP) 828

IN THE HIGH COURT OF MADHYA PRADESH AT JABALPUR
VIVEK AGARWAL
Oswal Agro Mills Limited - Appellant
Versus
The State Of Madhya Pradesh Through The Secretary, Commerce Industry & Employment, Mantralaya, Bhopal (Madhya Pradesh) – Respondent
Writ Petition No. 5686 of 2008
Decided on : 21-12-2023

Advocates:
Advocate Appeared:
For the Appellant :SHRI BRIAN D'SILVA - SENIOR ADVOCATE ASSISTED BY SHRI AVINASH ZARGAR - ADVOCATE
For the Respondent:SHRI ATUL DWIVEDI, SHRI K.C. GHILDIYAL - SENIOR ADVOCATE ASSISTED BY SHRI SAHIL SHARMA - ADVOCATE

The primary purpose of a lease for industrial land must be adhered to, and ancillary activities cannot substitute the main purpose. Industrial land cannot be used for warehousing purposes as per the Industrial Promotion Policy.

Headnote:

lease deed - industrial land use - Clause 9 of the lease deed - Industrial Promotion Policy - [Clause 9 of the lease deed] - The court discussed the interpretation of Clause 9 of the lease deed, emphasizing that the primary purpose of the lease was for manufacturing, and once the manufacturing activity ceased, the ancillary activity of warehousing could not substitute the purpose of the lease. The court also considered the Industrial Promotion Policy and concluded that while it promoted logistics and warehousing, it did not permit the use of industrial plots for warehousing purposes.

Fact of the Case:

The petitioner challenged the cancellation of a lease deed for industrial land due to violation of terms and conditions, arguing that the land was being used for warehousing after the closure of the production unit.

Finding of the Court:

The court found that the primary purpose of the lease was for manufacturing, and once the manufacturing activity ceased, the ancillary activity of warehousing could not substitute the purpose of the lease. The court also concluded that the Industrial Promotion Policy did not permit the use of industrial plots for warehousing purposes.

Issues: Interpretation of lease deed Clause 9, validity of using industrial land for warehousing, applicability of Industrial Promotion Policy

Ratio Decidendi: The main purpose of the lease was for manufacturing, and once the manufacturing activity ceased, the ancillary activity of warehousing could not substitute the purpose of the lease. The Industrial Promotion Policy did not permit the use of industrial plots for warehousing purposes.

Final Decision: The petition was dismissed, and the parties were directed to bear their own costs.

ORDER :

Heard on I.A. No.14230/2023, an application for amending the record.

2. Same is allowed. Let necessary corrections be carried out during the course of the day.

3. Also, heard on I.A. No.14244/2023, an application for taking the order of Debt Recovery Tribunal on record.

4. Same is allowed and documents are taken on record.

5. This writ petition is filed challenging order dated 10.09.2023 (Annexure P-9) and order dated 09.03.2005 (Annexure P-11) passed by the Managing Director of MPAKVN and Managing Director of MPSIDC, respectively, whereby lease deed which was executed in favour of the petitioner for the purpose of establishment of oil extraction unit, as contained in Annexure P-1, on 20.05.1982 has been cancelled for violation of the terms of conditions of the agreement.

6. It is evident from Annexure P-1 that 26 acres of land situated in village Mandideep, Tehsil Gauharganj, District Raisen was allotted in favour of the petitioner for the purpose of establishment of industry for manufacturing of solvent extracted oil and deoiled cake, refined oil, vanaspati and protein isolate for a period of 99 years.

7. Shri Brian D'Silva, learned Senior Counsel submits that as per Clause 9 of the lease deed, the land was allotted not only for industrial purposes but for ancillary purposes also and, therefore, petitioner after closing down of the production unit, is since running its warehouse, the petitioner cannot be evicted, nor the order of allotment of land for 99 years can be cancelled.

8. Shri Brian D'Silva, learned Senior Counsel drawing attention to para 23 of the said lease deed, submits that there is no stipulation in the lease deed that if the industry fails then the lease will be terminated. It is submitted that in fact petitioner has mortgaged this land with the bank and now they cannot be evicted from the said land.

9. Attention is drawn to I.A. No.7118/2020 to point that an application for change of land use was made to the competent authorities. Attention is also drawn to I.A. No.11923/2019. Drawing attention to Clause 2.1(ix) of the Industrial Promotion Policy, as has been appended by the petitioner along with I.A. No.11923/2019, it is pointed out that now the new Industrial Promotion Policy, 2014, as amended on December, 2018, permits use of land for warehousing purpose and, therefore, petitioner being in the business of warehousing, such land use be permitted and order of cancellation of lease and the appellate order passed by the Managing Director, MPSIDC, be set aside.

10. Shri K.C. Ghildiyal, learned Senior Counsel assisted by Shri Sahil Sharma, learned counsel for the respondents No.2 and 3 submits that petitioner is trying to misread the provisions. It is submitted that the first order was passed on 10.09.2003. Policy of 2018 is not having any retrospective application. Appellate order was passed on 24.08.2008. Clause 2.1(ix) of the new Industrial Promotion Policy deals with objectives of Industrial Promotion Policy and provides to encourage growth in Madhya Pradesh's thrust sectors (Agribusiness and Food processing, Textiles, Automotive and Auto components, Tourism, Pharmaceuticals, Bio-technology, IT/ITeS, Healthcare and Logistic & Warehousing). It is submitted that they may be the thrust area but it does not provide for interchangeability of land meant for industrial production to be used for the purpose of warehousing.

11. After hearing learned counsel for the parties and going through the record, it is necessary to refer to Clause 9 of the lease deed on which lot of emphasis is placed by Shri Brian D'Silva, learned Senior Counsel. Clause 9 of Lease Deed (Annexure P-1) reads as under:-

''9. The lessee shall use the said premises land and building structures and works, erected or constructed thereon only for the purpose of the said business of manufacturing of Solvent Extracted Oil & deoiled cake and other allied products and for construction of offices, administrative building, Godowns and shall not use the same or

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