PRABHA ELECTRO CASTINGS PRIVATE LIMITED Vs. STATE OF BIHAR
HIGH COURT OF PATNA
Prabha Electro Castings Private Limited
STATE OF BIHAR
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(1.) The allotment of plot having an area of 2.27 acres in Raxaul Industrial Area, made in favour of the petitioner has been cancelled by the Executive Director purportedly under the order of the Managing Director of the Bihar Industrial Area Development Authority ('BIADA' for short) by communication dtd. 20/6/2020 bearing memo no. 556. The petitioner seeks quashing of the same and also a direction upon the respondents restraining them from resuming possession of the plot.
Earlier the petitioner had filed CWJC No. 8906/2013 for quashing letter dtd. 28/4/2012 of the BIADA, calling upon the petitioner to commence production on his plot allotted in the industrial area, failing which the land allotted to the petitioner would be cancelled.
At that time Certificate Case No. 04/Electricity/2002-03 was pending against the petitioner for recovery of electrical dues and the writ petition was disposed of by order dtd. 17/7/2018 in the following terms:
"4. Having regard to the submission of the petitioner, the writ petition is disposed of, granting liberty to the petitioner to clear its electricity dues by making payment of the outstanding Rs.10,96,536.00 within a period of two weeks from the date of receipt/production of a copy of this judgment. If the said payment is made within the stipulated time, the petitioner may file a representation before the Executive Director, Regional Office, Bihar Industrial Area Development Authority, Bela, Muzaffarpur (respondent no. 4) within a further period of two weeks from the date of such payment. In such event, the petitioner's representation for grant of permission to start the unit, if allotment of land has not already been cancelled, shall be disposed of on its own merits after grant of opportunity of hearing to the petitioner in accordance with law."
(2.) It is the petitioner's case that cancellation of petitioner's allotted plot is again in violation of Rule 3(1) of Bihar Industrial Area Development Authority Rules, 1981 ('Rules' for short) read with Sec. 6(2)(a) of the Bihar Industrial Area Development Authority Act, 1974 ('Act' for short). The petitioner's unit ran into heavy loss within few years after its commencement due to insufficient and intermittent electricity supply by the Bihar State Electricity Board. This led to dispute between the Bihar State Electricity Board and the petitioner arising out of Certificate Case No. 04/Electricity/2002-2003. The BIADA was knowing about the dispute and was thus aware that closure of petitioner's unit was bonafide and for reasons beyond its control. However, without complying with principles of natural justice, allotment of petitioner's plot is sought to be cancelled by the impugned communication which is thus legally unsustainable.
(3.) The petitioner's counsel has also submitted that the petitioner may be allowed at least six-month time as per decision of the Division Bench in the case of Bihar Industrial Area Development Authority and Ors. vs. Deepak Paints Pvt Ltd. and Ors. in LPA 353/2008 passed in CWJC No. 7352 of 2007 (Annexure-11), since intervening factors such as illegal demand for electrical dues etc. have delayed commencement of production.
BIADA has filed a counter-affidavit, to which petitioner has also filed a rejoinder.
At the outset, learned counsel for the BIADA has taken an objection regarding maintainability of the writ petition. He has submitted that the petitioner has repeatedly committed breach/violation of the terms of allotment and having done so he cannot be permitted to invoke the equitable, discretionary writ jurisdiction.
Another ground of objection is that the canellation of petitioner's plot can be challenged before the learned Appellate Authority, i.e., Principal Secretary, Department of Industry, as per Sec. 6(2)(a) of the Act. Since the petitioner has adequate alternative remedy, this Court may not exercise discretion in favour of the petitioner.
Learned counsel for the BIADA has further submitted that the area In-charge of the industrial area, where the petitioner's plot is situated had reported that the plot allotted to the petitioner is deserted and the unit is in dilapidated state. Show-cause dtd. 20/3/2020 (Annexure-G to the counter-affidavit) was issued to the petitioner giving him final opportunity to start his unit and commence production within 15 days, failing which BIADA would cancel the allotment of petitioner's plot in the industrial area and forfeit the amount deposited towards land, and resume possession of the lands. For breach of the terms of allotment, in favour of the petitioner, the same was cancelled and the amount deposited by the petitioner forfeited vide office order dtd. 20/6/2020 (Annexure-H to the counter-affidavit). It is submitted that the petitioner has been delaying the issue of establishing an industrial unit since a long time.
Referring to the scope and activity of BIADA as an Authority created by statute, it is submitted that the industrial areas are developed by BIADA by carving out plots, providing infrastructure and making the same available on nominal rent only for the purposes of promoting industrial activity so as to boost the State economy in larger public interest. If the allottees, like petitioner, after obtaining the allotment do not start any industrial activity by setting up a unit on the plot, the infrastructure and concessions which the Authority provides are wasted. Other genuine entrepreneurs are also deprived of their chance for allotment of such plot, because the same is not available for allotment.
In the instant case, allotment of the plot in question was made to the petitioner way back in the year 1992. It was operational for some time whereafter it has stopped working. The unit has been lying idle since long, as would be evident from the notice dtd. 30/7/2007 issued to the petitioner (Annexure-B to the counter-affidavit). It is apparent that the same has been issued after industrial activity was found closed on the plot in question for years together and dues of the Authority were outstanding against the petitioner. The petitioner, thus, is nothing more than a squatter on land in question. ;
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