Patna High Court Shields BIADA's Plot Cancellation from Writ Scrutiny Over 'Disputed Facts'

In a decisive ruling, a Division Bench of the Patna High Court comprising Chief Justice Sangam Kumar Sahoo and Justice Harish Kumar dismissed Letters Patent Appeal No. 559 of 2025 filed by M/s Imperial Private Industrial Training Institute. The court upheld the cancellation of a 10,000 sq. ft. industrial plot in Jehanabad and the forfeiture of the deposited Rs. 3,30,255, emphasizing that disputed questions of fact—like the service of a show-cause notice—fall outside writ jurisdiction.

This outcome, as reported in legal circles, reinforces procedural safeguards under the Bihar Industrial Area Development Authority (BIADA) Act, 1974, closing doors on challenges rooted in factual disputes.

From Allotment Hopes to Policy Roadblocks

The saga began in 2012 when BIADA allotted Plot No. L2 (10,000 sq. ft.) in Jehanabad's industrial area to the appellant for an Industrial Training Institute (ITI) on a 90-year lease. Litigation over L2 led to an alternative Plot No. L1 in 2013 under identical terms.

A high-tension 11 KV line overhead delayed progress; it was shifted only in 2015, with possession handed over on May 25, 2015. The appellant deposited the full amount in installments up to 2019 and sought building plan approval on July 8, 2015. BIADA responded on August 12, 2015, stating approval was unnecessary—construction could proceed immediately.

Enter complications: Bihar's Industrial Investment Promotion Policy, 2016 (notified September 1, 2016) restricted allotments to manufacturing units, barring service sectors like ITIs. Then, 2017 D.G.E.T. norms demanded 1.07 acres minimum for ITI affiliation, prompting the appellant's plea for a larger 1.25-acre plot—denied due to policy and land scarcity.

By November 2018, BIADA issued a show-cause notice under Section 6(2)(a) BIADA Act. No response followed, leading to cancellation and forfeiture on March 8, 2019. The appellate authority upheld it on July 15, 2019. A single judge dismissed the writ on February 25, 2025, finding no procedural error.

Appellant's Plea: 'No Notice, No Justice' vs. BIADA's 'You Had Time'

The appellant argued the cancellation violated natural justice: no prior notice per Section 6(2)(a), which mandates one month's opportunity to respond before forfeiture. They claimed ignorance of the 2015 letter easing map approvals and the 2018 notice (challenging service sans postal receipt). Confining relief to refund, they highlighted payments totaling Rs. 3,30,255 and policy non-retrospectivity.

BIADA countered with records: the 2015 letter urged starting construction sans approval; policy barred ITI/skill centers post-2016; notice dispatched November 8, 2018 (dispatch register annexed); no reply received. Forfeiture aligned with Clause 26 of the allotment letter and Section 6(2)(a), triggered by failure to commence within time. They noted the plot's re-allotment to M/s Tanisha Agrochemicals in 2025 for manufacturing.

Decoding the Law: Statutes, Contracts, and Writ Boundaries

The Bench dissected Section 6(2)(a) BIADA Act , empowering cancellation and forfeiture for delays in "necessary effective steps" to establish industry—but only after one month's show-cause opportunity and appeal rights. Records showed notice issuance; appellant's non-rejoinder left service unchallenged.

Drawing on precedents: - V. Lakshmanan v. B.R. Mangalagiri (1995 Supp (2) SCC 33): Forfeiture valid as contractual consequence of default. - K.R. Suresh v. R. Poornima (2025 SCC OnLine SC 1014): Limits forfeiture to earnest money, but here full deposit per contract/statute. - Welspun Specialty Solutions Ltd. v. ONGC (2022) 2 SCC 382: Time essence gauged holistically; extensions negate strictness—but appellant's delays self-inflicted.

Crucially, invoking State of Rajasthan v. Bhawani Singh (1993 Supp (1) SCC 306) and others, the court barred writ probe into "disputed questions of fact" on notice service.

Key Observations from the Bench

"A plain reading of Section 6... makes it evident that where the allottee fails to take necessary effective steps within the stipulated period... the Authority is empowered to cancel the allotment and forfeit the amount deposited... However, such power is not unfettered. The provision mandates that prior to cancellation... the Authority must afford the allottee an opportunity by granting one month’s time to put forth allottee’s case."

"It is well settled that disputed questions of fact are not amenable to adjudication in writ jurisdiction."

"The learned Single Judge... has rightly held that there was no illegality in the cancellation of the allotment, particularly in view of the petitioner’s failure to comply with the terms and conditions and to commence construction within the stipulated period."

No Reversal: Appeal Dismissed, Precedent Set

The Division Bench found "no perversity or infirmity," dismissing the appeal on April 28, 2026. Implications are clear: Allottees must act swiftly post-possession; BIADA's forfeiture stands if procedure followed, even amid policy shifts. Future litigants face hurdles challenging notice service in writs—detailed facts demand civil suits.

This ruling, echoing broader administrative law trends, prioritizes statutory compliance over equitable pleas in industrial allotments.