JUDGMENT

Gijas Rubbers Pvt Ltd, the petitioner herein, is an industrial unit engaged in the manufacture of waste rubber crumb. The business is being run in property which was allotted on hire purchase basis under the Rules for Allotment of Land in Development Areas on Hire Purchase basis for Industrial Purposes Rules, 1969. As requested by the petitioner, permission was granted by the General Manager, District Industries Centre, to mortgage the assets including the land and structures for availing a loan of Rs. 25,00,000/- for expansion of the Industrial unit. While allowing the request by Ext.P5 order, among other conditions, the petitioner was ordered to furnish personal property as security. Being aggrieved by the imposition of the said condition, the petitioner is before this Court.

2. Before adverting to the contentions advanced by both sides, it would be apposite to detail the facts which led to the filing of this petition.

In the year 1989, by Ext.P10(A) agreement, the Government agreed to let on hire, property having an extent of 0.0405 Ares (10 cents) in Sy.No.132/1 pt of Kadungalloor Village in the Development Area at Edayar for the establishment of a unit for the manufacture of waste rubber crumb. The allotment of the property was in accordance with the Allotment of Land in Development Areas on Hire Purchase Basis for Industrial Purposes Rules, 1969 (‘Rules’ for short). A sum of Rs.1304/- representing 20% of the total value of the plot including improvements thereon was fixed by the Government as hire charges. The petitioner was required to pay the balance value of Rs.5,216/- in ten years by equal instalments. By Ext.P13 patta dated 4.7.2005, the land was assigned to the petitioner. While assigning the land as aforesaid, it was mentioned in the patta that the land assigned shall be heritable but the same shall not be alienated or encumbered without the prior permission of the Government. Records reveal that later, vide G.O.(M.S.) No.246/2008/RD dated 4.8.2008, sanction was accorded to assign 15.500 cents comprised in Sy. No.132/1, 132/2 pt of Kadungalloor village in the very same area as per the Rules of 1969 and in respect of the above property, patta was issued on 10.11.2009.

3. It appears that on 12.7.2019, the petitioner submitted a request before the 2nd respondent seeking permission to mortgage the unit for availing a loan. The 2nd respondent recommended the request and forwarded the same to the Government. The conditions in Exhibit P5 are that the property of the owner shall be furnished as collateral security and if default is committed in repaying the loan, the financial institution, while bringing up the property in public auction, should mention in the auction notice that the bidder should purchase the land only for industrial purpose. In that event sanction was to be granted only for the functioning of an industrial unit and only an industrial patta was to be issued. It is further stated that the property is assigned for meagre amounts to promote industry as per the Rules of 1969. The said property is mortgaged by owners and huge sums of loans are availed from financial institutions. When default is committed, the property is brought to sale and industrial property is being sold for clearing the dues of the defaulter. This is clearly against the interest of the State and would debilitate the functioning of the industrial area. It is further stated that imposition of the condition in Ext.P5 cannot be said to be onerous.

4. Sri. K.Reghu Kottapuram, the learned counsel submitted that when the patta issued to the petitioner did not enable the Government to fix any such condition, the respondents were not justified in relying on an order passed by the Land Revenue Commissioner in some other proceeding to impose onerous conditions. He would point out that on an earlier occasion, by Ext.P2 order, the petitioner was permitted to mortgage the property and avail loan from the Catholic Syrian Bank. The said loan was c