JUDGEMENT

(Per: HONOURABLE THE CHIEF JUSTICE) Date : 12-03-2024 The above writ petition and appeal is concerned with a plot of land bearing Plot No. B-20 and B-21 admeasuring 32670sq.ft./43560 sq.ft. within the industrial area, Hajipur. The land was acquired for the purpose of industrialization and is in the possession and ownership of the 4th respondent, the Bihar Industrial Area Development Authority, (for brevity, the ‘BIADA’). The allotment of the land, its mortgage and the eventual cancellation as also the further allotment and its cancellation are respectively challenged in the appeal and the writ petition. We first take up the appeal insofar as the same being first in point of time and also dealing with the first allotment made of the said land.

2. The appeal is filed by the BIADA from the order of the learned Single Judge in a writ petition filed by the State Bank of India, (for brevity, the ‘SBI’). The Bank had accepted mortgage of the land allotted by the BIADA to one M/S Vaishali Mineral Water Pvt. Ltd., the 3rd respondent in the writ petition. The Bank, based on allotment of a plot of land to the 3rd respondent, sanctioned a loan based on the lease deed dated 03.12.2001, produced as Annexure-1 after accepting mortgage of the land over which the unit in question was supposed to be raised. Annexure-1 lease deed was executed by the North Bihar Industrial Development Authority, Muzaffarpur (for brevity, the NBIDA’) the predecessor of BIADA.

3. Before the learned Single Judge, it was contended that the loan was sanctioned on the security of the mortgage. The mortgage made is after receipt of no objection from the NBIDA under letter dated 11.12.2001, produced as Annexure-2. The 3rd respondent failed to comply with its part of the obligation and the defaulted loan amount came to Rs. 34,57,208.59/-; for recovery of which the bank instituted a proceeding before the Debt Recovery Tribunal. The Tribunal allowed the original application and based on the certificate of recovery a sale was proclaimed by the Tribunal, then it transpired that the unit leased out in favour of the 3rd respondent was rerallotted to the 4th respondent after cancelling the initial lease deed. The 4th respondent has filed the other writ petition against the cancellation of the subsequent allotment.

4. We heard Smt. Binita Singh learned counsel appearing for the appellant BIADA and Sri Ashok Kumar Sinha, learned Senior Counsel appearing for the respondent bank in the appeal. Sri Brisketu Sharan appeared for the 4th respondent; the subsequent allottee, in both the appeal and the also the writ petition.

5. Before us it was argued by the learned Senior Counsel that the cancellation of the lease executed in favour of the 3rd respondent was not in accordance with Section 6(2) of the Bihar Industrial Area Development Act, 1974. It was also contended that before cancelling the lease, the bank was not informed of the same. The learned Senior Counsel to support the contention of the bank regarding the mortgage executed and the security interest created in favour of the bank relied on two decisions, one of this Court and the other of the Hon’ble Supreme Court; M/s Vikramshila Transformers (Pvt.) Ltd.;

1994 (1) PLJR 601 and New Okhla Industrial Develpment Authority (NOIDA) vs. Anand Sonbhadra; (2023) 1 SCC 724.

The learned Senior Counsel specifically relied on Sections 58 and 108(j) of the Transfer of Property Act, 1882.

6. Learned counsel appearing for the BIADA submitted that the lease in favour of the 3rd respondent was cancelled on 18.06.2007, and intimation was given to the Rajendra Nagar branch of the bank from where the loan was obtained. There was no requirement to issue a notice to the bank before cancellation of allotment, even then it was issued.

7. The learned Single Judge found that there was unilateral cancellation of the allotment made, to th