2016 Supreme(Bom) 569

IN THE HIGH COURT OF JUDICATURE AT BOMBAY, AURANGABAD BENCH, AT AURANGABAD.
S.S. SHINDE & SANGITRAO S.PATIL, JJ.
Somnath & Ors. – Petitioners
Versus
The State of Maharashtra, Through its Secretary, Industries, Energy & Labour Department, Mantralaya, Mumbai 431 032 & Ors. – Respondents
PUBLIC INTEREST LITIGATION NO.68 OF 2013
Decided on : 14-6-2016

Headnote:

The Court quashed and set aside the impugned order passed by the Chairman of MIDC regularizing the allotment of plots carved out from open spaces and amenity areas without following proper procedure and entertaining individual applications. The Court directed the Chief Executive Officer of MIDC to classify the plots into two groups: (1) plots of which allotment and locations can be regularized and (2) plots of which allotment as well as locations cannot be regularized, as also the plots which have been unauthorizedly sublet, sold or transferred in any manner. The Court directed the CEO to take necessary steps according to law to terminate allotment of the said plots and resume possession thereof. The Court also directed the CEO to conduct necessary enquiry in respect of missing files, fix the responsibility and initiate departmental enquiry against the Officers found responsible for missing of files, within three months from today. The Court also directed the CEO to take necessary steps to initiate departmental enquiry within three months from today against the erring Officers of the MIDC for unauthorizedly and illegally carving out plots from open spaces and amenity areas, allotting the plots by entertaining individual applications, failing to take action against the allottees for unlawfully subletting or transferring the plots to third persons and also for carrying out construction by encroaching upon the marginal open spaces.

Fact of the Case:

A Public Interest Litigation (PIL) was filed challenging the allotment of plots for mercantile as well as industrial purposes to some of the allottees after the year 2006, which caused a great loss to the public exchequer and deprived the needy persons of the opportunity to have the plots for industrial or mercantile purposes. The petitioners claimed that the allotment of the plots was not transparent or was tainted with corrupt practices, nepotism, favouritism and arbitrariness. Respondents 4 and 5 filed affidavit-in-reply to challenge the case of the petitioners. According to them, no illegalities/irregularities have been committed by the Regional Officers of the MIDC in allotment of industrial and mercantile plots to the allottees. It was stated that plots can be allotted by entertaining individual applications as per Regulation 4(ii) of the Regulations of 1975. According to them, the prescribed procedure was followed for allotment of the plots. It was stated that there is no bar for allotment of more than one plot to the members of a single family if they fulfill all the requirements for allotment of plots. It was further stated that the allotment of the plots to these persons has been made completely as per the provisions of law. The allottees of the plots of MIDC have already constructed the buildings after taking necessary permission from the MIDC. They have started manufacturing their products. They have paid the fine amount of about Rs.7,00,00,000/- for getting necessary permission and 114 allottees have obtained building completion certificates. The applications of 23 allottees are in process and are being considered by the MIDC, according to law. It was stated that in the year 200607, there was no demand from the public for allotment of plots in the MIDC area, Nagapur. Therefore, the plots were allotted on receiving the applications from the persons interested in view of the circular dated 14.05.2007.

Finding of the Court:

The Court found that the then Regional Officers and Area Managers of the MIDC allotted the plots subject matter of this petition at their own level. They allotted a number of plots to some of the families and industries. They did not even follow the procedure prescribed for conversion of open spaces and amenity areas into industrial/mercantile plots. There is no justification at all for allotment of the said plots by entertaining individual applications. The allotment of plots to the members of respondent no.6 by the then Regional Officers and Area Managers of the MIDC smells of corruption, nepotism, favouritism and suffers from illegalities. In the circumstances, the case of Parshwanath Infra Tech Pvt. Ltd. (supra) would be of no help to respondent nos.4, 5 and 6 to justify allotment of plots by entertaining individual applications. Consequently, in view of the judgments in the cases of Real Team Systems Pvt. Ltd. (supra), and Nagar Nigam, Merrut (supra), the allotment of all the plots subject matter of this petition and particularly referred to in the reports of Gatne Committee and Internal Committee, by entertaining individual applications, cannot be said to be sustainable and is liable to be cancelled on this sole count.

Issues: 1. Whether the allotment of plots by entertaining individual applications was legal and transparent? 2. Whether the conversion of open spaces and amenity areas into industrial/mercantile plots was permissible under the law? 3. Whether the plots unlawfully sublet, transferred, constructed in marginal open spaces were liable to be resumed by the Chief Executive Officer of MIDC?

Ratio Decidendi: 1. The Court held that the allotment of plots by entertaining individual applications was not legal and transparent. The Court observed that as per Regulation 4 of the Regulations of 1975, the plots of the MIDC can be allotted either by public auction or by entertaining individual applications. However, the Court noted that the land of the MIDC, which is an instrumentality of the State, is public property. The Court held that the purpose of inviting applications and bids from interested parties and by inserting an advertisement or publishing a tender notice is obvious. That is to enable the public body to obtain maximum returns or competitive bids for disposal of its properties and assets. It has been a well settled rule by series of judgments of the Honourable Supreme Court that sale of public property by private negotiations is not visible to the public eye and may even give rise to legal disputes. It should not be permitted unless there are special reasons to justify doing so. Public property owned by the State or by any statutory body of the State should be generally sold by public auction or by inviting tenders not only to get the highest price but also to ensure fairness in the activities of the State and public authorities. 2. The Court held that the conversion of open spaces and amenity areas into industrial/mercantile plots was permissible under the law, subject to following the prescribed procedure. The Court observed that as per the Development Control Regulations for M.I.D.C., 1999 and the Revised Development Control Regulations, 2009, open space means an area forming the integral part of the land left permanently open to the sky. The Court noted that as per Regulations 27.1 and 21.5 of the Regulations of 1999 and the Revised Regulations of 2009, in any layout or subdivision of land admeasuring more than 1 Hectare for industrial purpose and 0.5 Hectare for residential purpose, 10% of total area of land so subdivided shall be reserved for open space which shall, as far as practicable, be located in one central place. The Court further noted that as per Regulation 33.1 and Regulation 21.6 of the Regulations, 1999 and the Revised Regulations, 2009 respectively, in any layout or subdivision of land admeasuring more than 1 Hectare for industrial purpose and 0.5 Hectare for residential purpose, 5% of the total area of land so subdivided shall be reserved for amenity area. 3. The Court held that the plots unlawfully sublet, transferred, constructed in marginal open spaces were liable to be resumed by the Chief Executive Officer of MIDC. The Court observed that the Internal Committee found that 7 allottees as mentioned in Proforma 2 and 45 allottees as mentioned in Proforma 5 have unlawfully sublet or otherwise delivered possession of their respective plots to the third persons unauthorisedly. The Court noted that as per the Forms of Leases given in the Schedule of the Regulations of 1975, the allottee/leasee is not allowed to assign underlet or part with the possession of the plot or any part thereof or any interest therein without previous written consent of the Chief Executive Officer and the Chief Executive Officer may, in his absolute discretion, refuse such consent or grant the same subject to condition as he thinks fit including condition of payment of premium. Some of the allottees of the plots, who, without obtaining previous written consent of the Chief Executive Officer, have sublet, assigned or parted with the possession of the plots to some third persons in breach of the said condition. Consequently, the Chief Executive Officer can treat the lease as terminated and resume possession of such plots.

Final Decision: The Court quashed and set aside the impugned order passed by the Chairman of MIDC regularizing the allotment of plots carved out from open spaces and amenity areas without following proper procedure and entertaining individual applications. The Court directed the Chief Executive Officer of MIDC to classify the plots into two groups: (1) plots of which allotment and locations can be regularized and (2) plots of which allotment as well as locations cannot be regularized, as also the plots which have been unauthorizedly sublet, sold or transferred in any manner. The Court directed the CEO to take necessary steps according to law to terminate allotment of the said plots and resume possession thereof. The Court also directed the CEO to conduct necessary enquiry in respect of missing files, fix the responsibility and initiate departmental enquiry against the Officers found responsible for missing of files, within three months from today. The Court also directed the CEO to take necessary steps to initiate departmental enquiry within three months from today against the erring Officers of the MIDC for unauthorizedly and illegally carving out plots from open spaces and amenity areas, allotting the plots by entertaining individual applications, failing to take action against the allottees for unlawfully subletting or transferring the plots to third persons and also for carrying out construction by encroaching upon the marginal open spaces.