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IN THE HIGH COURT OF MADHYA PRADESH
Sushrut Arvind Dharmadhikari and Duppala Venkata Ramana, JJ.
Airen Developers (M/s.) v. The State of Madhya
Pradesh & Others
Writ Petition No. 15161 of 2024 (Indore); Decided on 9.8.2024
(1) Allotment of Industrial Land and Building to MSMEs and Management Rules, 2021 (M. P.) -- R. 19(b) -- division and transfer of land allotted to closed unit -- requirement under R.19(b) is with regards to industrial unit, not allotee/lessee -- industrial unit in question fulfilled prescribed criteria -- petitioner firm purchased it and cleared its outstanding dues -- held -- petitioner firm stepped into shoes of closed unit with respect to subject lands -- liable to be treated as original allotee -- denial of permission to divide subject lands irrational, illegal and suffers from procedural impropriety -- held further -- execution of amended lease deed instead of fresh lease deed will clearly make petitioner understand and expect that petitioner is original allottee -- now respondents cannot be permitted to not extend benefits of original allotee to petitioner -- doctrine of legitimate expectation can be pressed into service in order to hold that petitioner is liable to be treated as original allotee in terms of R. 19(b) and has all rights as original allotee -- respondents directed to re-consider application/proposal of petitioner under R. 19 (b) treating petitioner as “original allotee” and grant permission to petitioner for sub-division of subject lands. (1994) 6 SCC 651, AIR 1998 SC 2779 and 2022 SCC Online SC 554 followed. (1981) ECR 1095, (1988) ECR 2321, (1990) ECR 453, (1995) 2 All ER 714 and (1984) 3 All ER 935 referred to. [Paras 9, 13 14, 17, 21 & 22]
(2) Practice -- administrative decision -- irrationality, illegality and procedural impropriety are three important parameters on which administrative decision can be put to test. (1994) 6 SCC 651 followed. (1984) 3 All ER 935 relied on. [Para 15]
(3) Doctrine -- doctrine of legitimate expectation -- person may have reasonable or legitimate expectation of being treated in certain way by administrative authority even though he has no right in law to receive the benefit -- in such situation, if decision is taken by administrative authority adversely affecting his interests, he may have justifiable grievance in light of continuous receipt of benefit, legitimate expectation to receive benefit or privilege which he has enjoyed all throughout -- such expectation may arise either from express promise or from consistent practice which applicant may reasonably expect to continue. AIR 1998 SC 2779 and 2022 SCC Online SC 554 followed. (1981) ECR 1095, (1988) ECR 2321, (1990) ECR 453, (1995) 2 All ER 714 and (1984) 3 All ER 935 referred to. [Para 20]
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ORDER
Dharmadhikari, J. -- 1. With Consent of the parties, heard finally at motion stage.
2. The petitioner has filed the present petition under Article 226 of the Constitution of India, 1950 challenging the impugned letter dated 15.5.2024 (Annexure P/1) whereby the respondent No. 3 has conveyed to the Petitioner firm that the petitioner cannot be treated as the “Original Allottee” and since its “Unit” was not in production for a period of 5 years and was not closed for a minimum period of 2 years, therefore in terms of provisions of Para 19 (B) of the Madhya Pradesh Allotment of Industrial Land and Building to MSME’s and Management Rules, 2021 (hereinafter referred to as “the Management Rules”), permission to conduct division of the subject lands in terms of Para 19(B) of the Management Rules cannot be granted.
2. The Petitioner being aggrieved of the aforesaid letter dated 15.5.2024 has prayed for followings reliefs from this Court :--
i. issue the Writ of Mandamus declaring that the impugned Letter HAI / Softens / Aaex FH / 2024 / 1965 dated 15 May, 2024 (Exhibit P-1) issued by the Respondent No.3, is bad in law;
ii. declare that the petitioner firm is the original allottee and is entitled for all the rights as original allottee including approval of its proposal in terms of Para 19 (B) of the Madhya Pradesh Allotment of Industrial Land and Building to MSME’s and Management Rules, 2021 for division of the subject land under Plot No.4, 5, 6, 7-A, 7-B and the additional land aggregating to 150572 sq. mtrs. ‘situated at Sector-D, Industrial area, Sanwer Road, Indore; and,
iii. any other or further and appropriate writ order, relief or direction which this Hon’ble Court may consider appropriate in the facts and circumstances of the case in the interest of justice.
3. The germane admitted facts of the case in brief, which are necessary to be taken note of for the disposal of the present petition are as under :--
i. Petitioner is a registered partnership firm registered as a MSME Unit which is engaged in the business of construction and related development projects. The present lis pertains to following industrial lands situated at Sector D, Industrial area, Sanwer Road, Indore (M.P.) (hereinafter referred as subject lands):
| S. No. | Plot No. | Size in Sq. mtrs. |
| 1. | 4, 5 & 6 | 59294 |
| 2. | 7-A | 11152 |
| 3. | 7-B | 12082 |
| 4. | Additional land | 68044 |
|
| Total | 150572 |
ii. Aforesaid subject lands were allotted to M/s. Shri Ishar Alloys Steel Limited for the period of 99 years vide various lease deeds dated 29.12.1969, 10.11.1978, 2.12.1975 and 4.12.1986. The said company mortgaged leasehold rights of the aforesaid subject lands and availed financial assistance from various financial institutions. The Company defaulted in repayment of the loan obtained from the banks and was wound up.
iii. Respondent No.1 State granted permission to Isher Alloy to “mortgage and assign” its leasehold land in favour of any Bank or financial institution, vide its letter No.22/IDIC/BF/90/3377 dated 20th March, 1990, (Annexure P-4).
iv. Respondent No.1 issued Clarification No.94/IM20/BF/92/7863 dated 23rd October, 1992 (Annexure P-5) wherein while clarifying the clauses of lease deed, categorically stated that if any public financial institution wishes to transfer the properties of the lessee, the permission will be automatic and the lending institution will inform the lessor of their intention to do so; and on getting such information the lessor will take such steps and make such amendments in the name of the lessee so that the transferee gets the same rights as the original lessee.
v. In the year 2005 the ICICI Bank i.e. one of the secured creditors initiated recovery proceedings against the said company by filing a petition before the DRT II, Mumbai. The learned DRT vide order dated 8.1.2022 floated tender for auction of the lease hold rights of the subject lands. The Petitio
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