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2023 Supreme(Online)(MP) 12398
IN THE HIGH COURT OF MADHYA PRADESH
AT JABALPUR
BEFORE
HON'BLE SHRI JUSTICE VIVEK AGARWAL
ON THE 21st OF DECEMBER, 2023
WRIT PETITION No. 5686 of 2008
BETWEEN:-
OSWAL
AGRO
MILLS
LIMITED
A
COMPANY
REGISTERED
UNDER
THE
PROVISIONS
OF
THE
COMPANIES ACT, 1956 HAVING ITS OFFICE AT NEAR
JAIN COLONY, VIJAY INDER NAGAR, DHABA ROAD,
LUDHIANA (PUNJAB) THROUGH MR. B.N.GUPTA S/O
SHRI R.D. GUPTA, AGED ABOUT 58 YEARS, DIRECTOR,
OSWAL AGRO MILLS LIMITED, NEAR JAIN COLONY,
VI J AY INDER NAGAR, DHABA ROAD, LUDHIANA
(PUNJAB)
.....PETITIONER
(BY SHRI BRIAN D'SILVA - SENIOR ADVOCATE ASSISTED BY SHRI
AVINASH ZARGAR - ADVOCATE)
AND
1.
THE STATE OF MADHYA PRADESH THROUGH
THE
SECRETARY, COMMERCE INDUSTRY &
EMPLOYMENT,
MANTRALAYA,
BHOPAL
(MADHYA PRADESH)
2.
MADHYA PRADESH AUDYOGIK KENDRA VIKAS
NIGAM (BHOPAL) LTD. A GOVERNMENT OF
MADHYA
PRADESH
UNDERTAKING
(A
SUBSIDIARY OF MPSIDC LTD. THROUGH ITS
CHAIRMAN,
MADHYA PRADESH AUDYOGIK KENDRA VIKAS
NIGAM (BHOPAL) LTD. TAWA COMPLEX, FIRST
FLOOR, BITTAN MARKET, E-5 ARERA COLONY,
BHOPAL (MADHYA PRADESH)
3.
THE MANAGING DIRECTOR, MADHYA PRADESH
AUDYOGIK KENDRA VIKAS NIGAM (BHOPAL)
LTD., TAWA COMPLEX, FIRST FLOOR, BITTAN
MARKET,
E-5
ARERA
COLONY,
BHOPAL
(MADHYA PRADESH)
.....RESPONDENTS
1
Signed by: PUSHPENDRA
PATEL
Signing time: 30-12-2023
13:42:04
Signature Not Verified
(SHRI ATUL DWIVEDI - PANEL LAWYER FOR THE RESPONDENT NO.1-
STATE AND SHRI K.C. GHILDIYAL - SENIOR ADVOCATE ASSISTED BY
SHRI SAHIL SHARMA - ADVOCATE FOR THE RESPONDENTS NO.2 AND 3)
This petition coming on for orders this day, th e court passed the
following:
,,,Advocate General,A.G.,,Priyankush Jain
An industrial plot leased for manufacturing purposes cannot be used for warehousing once the manufacturing activity has ceased.
Headnote:
LAND LEASE - INDUSTRIAL USE - WAREHOUSING - [The court held that an industrial plot leased for manufacturing purposes cannot be used for warehousing once the manufacturing activity has ceased. The ancillary purpose of constructing godowns and administrative buildings cannot substitute the primary purpose of manufacturing, and the lessee is duty-bound to surrender the land upon closure of the manufacturing business.]
Fact of the Case:
The petitioner challenged the cancellation of a lease deed for 26 acres of land allotted for the purpose of establishing an oil extraction unit. The petitioner argued that the lease deed permitted ancillary purposes, including warehousing, and that the land was being used for such purposes after the closure of the manufacturing unit. The petitioner also relied on the Industrial Promotion Policy, which permits the use of land for warehousing purposes.
Finding of the Court:
The court found that the primary purpose of the lease was manufacturing, and the construction of godowns and administrative buildings was ancillary to that purpose. Once the manufacturing activity ceased, the ancillary purpose could not substitute the primary purpose, and the petitioner was duty-bound to surrender the land. The court also held that the Industrial Promotion Policy did not permit the use of industrial plots for warehousing purposes.
Issues: 1. Whether the petitioner could use the leased land for warehousing purposes after the closure of the manufacturing unit. 2. Whether the Industrial Promotion Policy permitted the use of industrial plots for warehousing purposes.
Ratio Decidendi: 1. The primary purpose of the lease was manufacturing, and the construction of godowns and administrative buildings was ancillary to that purpose. Once the manufacturing activity ceased, the ancillary purpose could not substitute the primary purpose, and the petitioner was duty-bound to surrender the land. 2. The Industrial Promotion Policy did not permit the use of industrial plots for warehousing purposes.
Final Decision: The petition was dismissed, and the cancellation of the lease deed was upheld.
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
2
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
3
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,
