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2023 Supreme(Telangana) 7
IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD
P. Naveen Rao, Nagesh Bheemapaka, JJ.
M/s. Sem India Fab (P) Ltd. - Petitioner
Versus
Government of Andhra Pradesh, Rep.by its Principal Secretary, Industries & Commerce (INF) Department and another - Respondents
Writ Petition No.3493 of 2010
Decided On : 20-03-2023
Advocate Appeared:
For the Petitioner: Sri Duvva Pavan Kumar
For the Respondent: Sri Harender Pershad, Special Government Pleader
Point of Law : Where discretion is required to be exercised by a statutory authority, it must be permitted to do so - It is not for courts to take over discretion available to a statutory authority and render a decision.
Headnote:
Company - Memorandum of Understanding - lease deed - possession - Government of Andhra Pradesh when it was a combined State, envisaged establishment of ‘Fabcity’ - It was a unique concept for first time ever in the country - For this purpose, it has identified Acs.1200 of land in Srinagar and Raviryala villages - With keen interest to establish semi conductor industry in India, Government has entered into Memorandum of Understanding (MoU) on 16.2.2006 with M/s.SemIndia, a company incorporated in USA for establishment of assembling, testing, marking and packing (ATMP) semiconductor manufacturing unit and semiconductor plant in ‘Fabcity’, Hyderabad Lease deed was executed and possession of Acs.100 land was handed over the petitioner - As per instructions of Government, then A.P. Industrial Infrastructure Corporation Limited-second respondent has incorporated ‘Fabcity’ SPV (India) Pvt. Ltd - As per understanding, petitioner was required to make investments in project in three phases - Whether Government was justified in canceling the lease, whether terms of lease were not violated by petitioner are all matters flowing out of agreements arrived at by parties -Whether decision is made objectively on due consideration of all aspects of an issue, whether decision is preceded by opportunity of hearing, whether decision is supported by reasons - Whether decision is arbitrary and shocks judicial conscience - As per clause-3(i) party should not be made responsible for any failure which would be caused by or attributable to causes beyond control - Though sincere efforts were made by petitioner to create infrastructure and establish ‘Fabcity’, for reasons beyond its control, ‘Fabcity’ could not be established - However, good progress was made by time impugned Government Order was issued and the same was not appreciated by respondents.Para 10
Finding of Court :
In exercise of power of judicial review of administrative action what is required to be considered is whether decision is made objectively on due consideration of all aspects of an issue, whether decision is preceded by opportunity of hearing, whether decision is supported by reasons and whether decision is arbitrary and shocks judicial conscience - LEGALITY of an administrative decision can be tested on three broad principles, viz., ‘illegality’, ‘irrationality’ and ‘procedural impropriety’ - conduct and actions of petitioner impaired in achieving objective of the State to create semiconductor manufacturing and testing hub in State - A prime land is kept barren for almost 17 years - Delay in implementation of such projects will have adverse impact on over all economic development and create unrest in public, more particularly in youth - But for allotment of Acs.100.00 of land to petitioner, State Government could have utilized land for any other economic activity - Ultimately, public interest suffered due to the attitude of petitioner - Decision to resume 78 acres of land and imposing stringent conditions for utilizing remaining 22 acres is in public interest.
Result : Writ Petition is accordingly dismissed.
ORDER :
P Naveen Rao, J.
Heard learned counsel Sri Duvva Pavan Kumar for petitioner, learned Special Government Pleader attached to the Office of learned Advocate General for respondents.
2. The Government of Andhra Pradesh when it was a combined State, envisaged establishment of ‘Fabcity’. It was a unique concept for the first time ever in the country. For this purpose, it has identified Acs.1200 of land in Srinagar and Raviryala villages. With keen interest to establish semi conductor industry in India, Government has entered into Memorandum of Understanding (MoU) on 16.2.2006 with M/s.SemIndia, a company incorporated in USA for establishment of assembling, testing, marking and packing (ATMP) semiconductor manufacturing unit and semiconductor plant in ‘Fabcity’, Hyderabad.
3. G.O.Ms.No.94 Industries & Commerce (INF) Department dated 28.4.2007 was issued for establishment of semi conductor unit by M/s. SemIndia Fab Pvt. Ltd., extending certain incentives/concessions subject to compliance of specified terms and conditions by the company. In terms of the said Government Order, Acs.100 of land was allotted to petitioner-M/s. SemIndia Fab Pvt. Ltd., on lease basis for a period of 66 years at the rate of Rs. 1/- per acre per year. The lease deed was executed on 25.6.2007 and possession of Acs.100 land was handed over the petitioner. As per the instructions of the Government, the then A.P. Industrial Infrastructure Corporation Limited-second respondent has incorporated ‘Fabcity’ SPV (India) Pvt. Ltd. As per the understanding, petitioner was required to make investments in the project in three phases. In Phase-I, within 18 months from the date of allotment of land, US $ 75 million was to be invested for ATMP which would have an employment potential of 2000; in Phase II, within 3 years from the date of allotment, petitioner was required to invest US $ 750 Million for setting up a semiconductor chip manufacturing unit with an employment potential of 1000; in Phase III, within 5-7 years from the date of allotment of land, petitioner was required to invest US $ 2.25 billion for advanced semi conductor plant with an employment potential of 5000. MoU also requires, the petitioner to participate with APIIC in the ‘Fabcity’ SPV which would develop State-of-the-Art-Infrastructure to house Fabs, fab related ecosystem. Petitioner was required to utilize the land for the purpose for which it was allotted only and not for other purposes.
4. Not satisfied with the progress of work, ‘Fabcity’ SPV (India) Pvt. Ltd., (herein after called ‘Fabcity’ SPV) on 19.6.2008 issued letter to the petitioner informing the petitioner that in spite of requests made from time to time to expedite the works and to adhere to the time line indicated in the meeting of the Board of Directors held on 12.2.2008 and 16.5.2008 in addition to letters issued on 11.4.2008, there was no proper response to implement the project and called upon the petitioner to show cause within 15 days why the allotment of land should not be cancelled for non implementation of the project within the time stipulated. On 23.6.2008 petitioner replied informing ‘Fabcity’ SPV that the project is being implemented. On 17.11.2008 another letter was issued by ‘Fabcity’ SPV to petitioner stating that though on 23.6.2008 petitioner informed that the project implementation has started and confirmed that the construction work would be completed by January, 2009 with a request not to cancel allotment of land, but failed to furnish the details of financial closure for implementation of the project as contemplated in the Government order and has not completed construction of the building and again called upon the petitioner to show-cause within 15 days why allotment of the land should not be cancelled. Letter also refers to photographs shown on 10.11.2008 in the Board Meeting, which disclose very limited progress in the work.
5. On 21.3.2009 meeting of the Board of Directors of ‘Fabcity’ SPV was held to take stock
