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Judgment
Ramesh Ranganathan, CJ
This Special Appeal is preferred against the order passed by the learned Single Judge in Writ Petition (M/S) No.3936 of 2018 dated 06.12.2019.
The appellant herein invoked the jurisdiction of this Court questioning the action of the third respondent in cancelling the license granted in favour of
the appellant-writ petitioner over two industrial plots ie Plot Nos.F-54 and F-57 in the U.P. State Industrial Development Corporation Industrial Area,
Selaqui, Dehradun.
The appellant is a company incorporated under the Companies Act, 1956 in the year 1980 for manufacturing ‘wheat puffs’ and ‘ready to
eat cereals’. In terms of the U.P. State Industrial Development Corporation Policy, they were allotted two industrial plots in the year 1989-90 by
the UPSIDC i.e. Plot Nos.F-55 and F-56. The appellant-writ petitioner claimed that they commenced manufacturing of wheat puffs and other ready
to eat cereals; 98.5% of their entire production was sold to the State Government under the Integrated Child Development Scheme; the remaining
1.5% was marketed in the name of ‘BONTON’; in 1994, the appellant-writ petitioner was allotted 5 adjoining plots i.e. Plot Nos.F-28, F-29, F-
30, F-54 and F-57; these plots were allotted as their production had increased from one metric tonne per day to ten metric tonnes per day; and,
consequently, they required larger space.
In the order under appeal, the learned Single Judge has noted that, while initially only an allotment order was issued and later physical possession
was given to the allottee, this was followed by a licence agreement which was, ultimately, to culminate in a lease deed being executed; there are three
stages- the first is of allotment, the second is of execution of the licence agreement, and the third is for the execution of a lease deed; while a licence
agreement was executed for all the seven plots, a lease agreement was executed only for 5 plots i.e. F-55 and F-56 on 7.9.1989 and for plot nos.F-28,
F-29 and F-30 on 16.3.2004; and the appellant-writ petitioner never came forward to execute a lease deed for plot nos.F-54 and F-57 which is the
subject matter of the present dispute.
The learned Single Judge, thereafter, noted the submission, urged on behalf of the appellant-writ petitioner, that a lease deed could not be executed
since the Excise Department had caused a search in the industrial premises in January, 1997 for which a show-cause notice was issued in March,
1997 and, thereafter, the factory premises was confiscated and production of the appellant-writ petitioner’s factory was stopped; later, the
Commissioner, Excise imposed a demand of Rs.2.31 crores and penalty of a similar amount of Rs.2.31 crores; there was protracted litigation with the
Excise Department, which culminated on 20.4.2007 on the matter being remanded by the Supreme Court to the Commissioner; on an order being
passed afresh by the Commissioner, the appellant-writ petitioner had approached the Customs Excise and Service Tax Appellate Tribuan (for short
the ‘CESTAT’) which held the appellant-writ petitioner not liable to pay excise duty on 98.5%, and that excise duty was payable only for the
remaining 1.5%; since they were involved in a long drawn battle with the Excise Department, the appellant-writ petitioner could not execute a lease
deed; and since they had already paid 100% premium on the plots, a lease deed should be executed in their favour on payment of the current
registration charges on the present lease value, but this was not acceptable to the third respondent.
The learned Single Judge, thereafter, took note of the submission urged on behalf of the third respondent that the appellant-writ petitioner had
stopped production in the year 1997; no production was undertaken on these two plots with respect to which no lease deed was executed; and these
plots were required to be taken over by the respondent-SIDCUL.
Reliance was placed on behalf of the third respondent on Clauses 5 and 7 of the Licence Agreement which read as under:
“5. If the License fails to commence and complete the building fit for use and start the manufacturing and production in the time and manner
therein before provided (time in this respect being essence of contract) or shall not proceed with the works with due diligence or shall have failed to
observe any of the stipulations on his part hereof contained, or shall have failed to make payment of the interest installment of premium on or before
the due date, the Grantor shall have the right and power to re-enter upon an resume possession of the said land and everything thereon, and thereupon,
this Agreement shall cease and terminate and all erection and materials, plant and things upon the said plot and land shall, belong to the Grantor
without payment of any compensation or allowance to the Licensee for the same without prejudice nevertheless to all other legal right and remedies of
the Grantor against the licensee the Grantor may permit the constitution of the occupation of the Licensee upon the said Land on payment of such
money and/or on such terms and conditions, as may be decided upon by the Grantor and/or to direct removal or alteration of any building or structures
erected or used contrary to the conditions of the grant within the time prescribed, cause the same to be carried out the same for the licensee and an
amount equal to 20% of the total premium together with outstanding interest due till date, use and occupational charges due, and other dues, if any,
shall stand forfeited to the Grantor and the Licensee shall not be entitled to any compensation whatsoever.
Provided that the Licensee shall be at liberty to remove and appropriate to himself all building, erections and structures, if any made by him and all
materials thereof from the plot of land after paying up all dues, rent and all municipal and other taxes, rates and assessment then due and all damages
and other dues, occurring to the Grantor and to remove the materials from the plot of land within three months of the date of revocation or termination
of this agreement.
Notwithstanding any other provisions to the contrary the Grantor shall have the right to grant lease of only so much area of the plot or land which
has been actually used or is likely to be used within a reasonable time for the industrial purpose and the Licensee shall have no right to claim the
remaining portion in lease and the premium/lease rent shall be proportionately reducedâ€.
In the order under appeal, the learned Single Judge observed that, in terms of the said agreement, the appellant-writ petitioner had not only failed to
utilize the industrial land for the last 20 years, but the said land was not even required by them, as in 2004 itself they had taken permission from the
UPSIDC to sublet two other plots ie Plot nos.F-28 and F-29 to other entrepreneurs which also showed that the appellant-writ petitioner did not
actually require the plots; the letter dated 11.03.2014, on which reliance was placed on behalf of the appellant-writ petitioner, showed that, by letter
dated 05.12.1994, they were allotted plot Nos.F-54 and F-57 for industrial purposes but, even after 20 years, no industrial unit had been established on
these plots; SIDCUL had sought a reply from the appellant-writ petitioner; in his letter dated 09.04.2014, the appellant-writ petitioner had contended
that plot Nos.F-54 and F-57 formed an integral part of the other five plots on which industrialization was going on, and they could not be treated in
isolation; industrialization had started in the year 1990 itself; and these plots were being used as a diesel generator room and as a spare parts room.
The learned Single Judge, thereafter, referred to Clause 5 of the Licence Agreement, in terms of which allotment of plot was held liable to be
cancelled not only because the licencee had not started production, but he had even failed to commence and complete the building fit for use, and to
start manufacturing and production in the time and manner provided in the licence agreement; and, in terms of Clause 7, possession could be taken if
the plots stood unutilized. Holding that the appellant-writ petitioner had not utilized the plot for the last more than 25 years, and therefore cancellation
proceedings had been initiated and possession had been taken by SIDCUL, the learned Single Judge opined that there was no illegality in the same.
The learned Single Judge, however, made it clear that, in case the plot was to be given to other entrepreneurs, SIDCUL may first give its offer to the
appellant-writ petitioner who, if willing, may take the plots at the existing rates. Aggrieved thereby, the present appeal.
Mr. P.R. Mullick, learned counsel for the appellant-writ petitioner, would submit that since, in terms of the U.P. Reorganization Act, 2000 (for
short the ‘2000 Act’), the U.P. Industrial Development Corporation continues to exercise jurisdiction over these plots, the respondent-SIDCUL
lacks jurisdiction to cancel allotment of these plots. Reliance is placed by him on Section 66(1) of the 2000 Act to contend that, while the Central
Government may issue directions as it deems fit, in the absence of any such directions being issued by them, the Board of Directors of the UPSIDC
continued to exercise jurisdiction over these plots since the UPSIDC is shown at Serial no.18 in the Ninth Schedule to the 2000 Act.
When we asked Mr. P.R. Mullick, learned counsel for the appellant-writ petitioner, whether any such plea had been taken before the learned
Single Judge, learned counsel would fairly state that it was not. He woud, however, contend that, since this is a pure question of law, it can be raised
for the first time even in appeal. We must express our inability to agree with the submission that the contention now raised before us is a pure question
of law, unrelated to facts, for the question whether or not the Central Government had issued any direction, in terms of Section 66(1) of the 2000 Act,
is a question of fact. In the absence of any such plea in this regard, it would be wholly inappropriate for us to examine this contention for the first time
in an intra-court appeal the scope of which, under Chapter VIII Rule 5 of the Allahabad High Court Rules, is far more limited than an ordinary appeal,
provided under various other statutes, on both questions of fact and law.
Mr. P.R. Mullick, learned counsel for the appellant-writ petitioner, would then contend that the appellant-writ petitioner had commenced
production in these plots, and had continued production thereat till 2006-07; and it is only because of earthquakes and floods in the area, that the
buildings, constructed by them for production, do not exist as on date.
As is evident from the report submitted by the Junior Engineer of SIDCUL dated 9.8.2018, the appellant-writ petitioner had sublet the industrial
units established at Plot Nos.F-28, F-29, F-30 and F-56; Plot Nos.F-54 and F-57 were empty; and Plot No.F-55 contained an office and the
caretaker’s residence. In the present Writ Petition, the disputed plots are F-54 and F-57 and not the other five plots. Admittedly, there is no
evidence on record to show that buildings had been constructed on these two plots in which production was carried on within time. While Mr. P.R.
Mullick, learned counsel for the appellant-writ petitioner, would state that there exists a diesel generation set in these plots, even if we proceed on the
premise that this assertion is true, the diesel generation set could only have been used to generate and supply power for the units in the other four plots
and that, by itself, cannot be treated as if the conditions stipulated in Clause 5 of the Licence Agreement had been fulfilled, in terms of which a
licencee is required to complete the buildings fit for use, and start manufacturing and production in the manner provided in the contract. Let alone
starting production and manufacture in these two plots, the appellant-writ petitioner has not even completed construction of the buildings, and to make
them fit for manufacture and production. In any event, the learned Single Judge has protected the appellant-writ petitioner’s interest in directing
SIDCUL that, in case it decides to give plots to other entrepreneurs, to make the offer first to the appellant-writ petitioner to get it at the existing
market rates.
The scope for interference in an intra-court appeal, under Chapter VIII Rule 5 of the Allahabad High Court Rules, is extremely limited. Both the
learned Single Judge and the Division Bench exercise the very same jurisdiction under Article 226, and the learned Single Judge is not a Court
subordinate. Even if two views are possible, and the view taken by the learned Single Judge is a possible view, no interference is called for in an intra-
court appeal even if the Court is satisfied that the other view canvassed before it is more attractive. Save in cases where the order under appeal
suffers from a patent illegality, interference in an intra-court appeal is not justified. We are satisfied that the order under appeal does not suffer from
any such infirmity.
We see no reason, in such circumstances, to interfere with the order under appeal. The Special Appeal fails and is, accordingly, dismissed. No
costs.