A contracting party is bound to fulfill the conditions set forth in a lease agreement; failure to do so legitimizes cancellation of the contract by authorities, despite claims of external difficulties.

ORDER :

1. Challenging the impugned communication dated 24.06.2024 in and by which the respondents had cancelled the allotment and directed the petitioner to surrender the plot allotted to them, the present petition has been filed before this Court.

2. It is the case of the petitioner that it is engaged in the manufacture of automotive products and is having a manufacturing unit at Plot No.RNS-24 at SIPCOT Industrial Growth Centre, RNS Park, Oragadam to an extent of 1.50 acres.

3. It is the further case of the petitioner that with a view to expand its manufacturing activities, the petitioner submitted application to the 1st respondent seeking allotment of industrial plot at SIPCOT Industrial Growth Centre, Oragadam and by proceedings dated 19.12.2008, the petitioner was allotted an extent of 1.50 acres for a period of 99 years and the cost of the plot was fixed at Rs.90,00,000/- which amount was duly remitted by the petitioner. Pursuant to the order of allotment, a memorandum of lease deed dated 9.4.2009 was also entered into between the authorised officer of the 1st respondent and the petitioner.

4. It is the further averment of the petitioner that as per clause 17 of the said lease deed, the allottee, viz., the petitioner herein, was to commence commercial production/trial production within 30 months of the date of allotment order and the clause further stipulated that failure on the part of the allottee within the stipulated time will entail in cancellation of allotment and forfeiture of the amount paid. It was further stipulated therein under clause 18 that the allottee shall have to commence construction of building within 6 months of the allotment order and complete the same within 24 months from the date of the allotment order.

5. It is the further averment of the petitioner that owing to crisis faced by the automotive industry, more particularly M/s.Nissan Motor India Pvt. Ltd. And M/s.Renault Nissan Automotive India Pvt. Ltd. The production activities of the firm got affected and the outbreak of COVID-19 pandemic also added to the woes of the petitioner crippling the manufacturing activities of the firm. It is the further averment of the petitioner that as on date, a sum of Rs.5.85 Crores have been spent towards the building, plant and machinery and other utilities. It is the further averment of the petitioner that by communication dated 30.05.2023, the 1st respondent requested the petitioner to surrender the subject plot within a period of 90 days from the date of the letter to enable the petitioner to get refund of the eligible amount after adjusting the dues, if any, as per the prevailing policy of SIPCOT.

6. It is the further averment of the petitioner that vide letter dated 10.01.2024, the petitioner requested the 1st respondent to afford an opportunity to resume full factory operation, as the lesser activity of the petitioner was due to decreased business activities in the automotive sector due to prevailing market conditions resulting in the decline for demand of automotive products and, therefore, the petitioner was not able to operate to full potential. It is the further averment of the petitioner that though the petitioner was entertaining hope over hope that its request for grant of further time would be favourably considered, however, vide the impugned communication, the request of the petitioner was rejected by relying upon clause Nos.17 and 18 of the lease deed by pointing out that only 18.68% to an extent of 1137 sq.mts., of the land has been utilised for the f