M/S Hindustan Texknit (Pvt.) Ltd. vs State Of U.P. And Another
2013 Latest Caselaw 7095 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

?Court No. - 10
 

 
Case :- WRIT - C No. - 64065 of 2013
 

 
Petitioner :- M/S Hindustan Texknit (Pvt.) Ltd.
 
Respondent :- State Of U.P. And Another
 
Counsel for Petitioner :- Rohit Agarwal,Keshari Nath Tripathi
 
Counsel for Respondent :- C.S.C.,Nisheeth Yadav
 

 
Hon'ble Arun Tandon,J.

Hon'ble Anjani Kumar Mishra,J.

Petitioner before this Court seeks a writ of mandamus commanding the Greater NOIDA to immediately arrange for repossession of industrial plot no. 10, Udyog Kendra Industrial Area, Greater NOIDA to the petitioner and to not to charge lease rent of plot no. 10 from 17.02.2003, the date on which the authority cancelled the allotment of the plot till the date of repossession of the industrial plot and not to demand additional premium @ 4%, 6% and 8% for extension of time to make the industry functional in view of the new industrial policy of 2001 as the plot in question was allotted in the year 1997.

Facts in short leading to the present petition are as follows :

On an application made by the petitioner company for establishing an industrial unit in Greater NOIDA, the Greater NOIDA authorities issued a letter allotting industrial plot no. 10 in Udyog Kendra Industrial Area for manufacture of knitted fabric from yarn. The total amount of the premium provisionally worked out for the said plot was Rs.67,98,416/-. The petitioner was required to deposit 33,99,208/- towards allotment money by 02.12.1997, after adjustment of the registration money and the balance amount was payable in half yearly installments with 18% interest. The payment schedule was also enclosed (Ref. Page 36 of the paper book) which provided for payment of the installment, the last being payable on 31.12.2002. In pursuance to the allotment letter the petitioner is stated to have deposited the amount and accordingly a lease deed was executed by the Greater NOIDA authorities on 08.10.1997 in favour of the petitioner for a period of 98 years, a copy of the lease deed is at page 48 of the paper book.

Amongst other it was specifically provided as condition no. 4 in the lease deed that the petitioner shall complete the construction of factory building and make the unit functional with a period of 36 months or within such extended time as may be allowed by the lessor in writing in its discretion on the request of the lessee. The lessor shall obtain completion certificate from lessor within due period. Clause 9(1) of the lease deed permitted transfer, subletting, relinquishment, mortgage or assignment in interest in the demised premises or the building constructed thereon or both provided that no transfer shall be allowed/permitted in respect of a unit where a functional certificate has not been obtained. Clause 10(d) of the lease deed provided that in case the lessee fails to commence and also complete the construction of the building upon the demised premises in accordance with and within the time schedule provided for the said purpose in Clause III (4). It shall be lawful for the lessor without prejudice to any other legal rights or remedies available under law to re-enter the demised premises or any part thereof and thereafter this lease shall stand determined. Condition of forfeiture of premium etc. have also been provided for under the lease deed. Proviso to clause 10 further provided that right to determine the lease deed for breach of the conditions mentioned in the clause shall not be exercised if the industry on the demise premises has been financed by the Corporations mentioned in the clause including PICUP unless 30 days prior notice is given to such financing body.

The Greater NOIDA authority cancelled the lease which was granted in favour of the petitioner vide order dated 19.02.2003. A copy of the order is enclosed at page 94 of the paper book. The order refers to as many as four letters of the development authority dated 04.11.200, 23.05.2001, 17.10.2002 and 15.11.2002 calling upon the petitioner to make the industry functional and in case of non compliance, action in terms of the lease deed shall be taken. It is then recorded that despite the said letters the petitioner did not make the industry functional and, therefore, the allotment of plot no. 10 in favour of the petitioner has been cancelled. The money deposited by the petitioner towards premium etc. was being returned separately.

Against the cancellation order the petitioner approached the Hon'ble High Court by means of Civil Misc. Writ Petition No. 9342 of 2004. This writ petition according to the petitioner has been disposed of by requiring the petitioner to avail his remedy under Section 41(3) of the U.P. Urban Planning and Development Act which stands adopted under the provisions of the U.P. Industrial Area Development Act, 1956.

Before the representation of the petitioner could be made/considered by the State Government, plot no. 10 was divided into two parts. One part of the plot was allotted in favour of M/s. Chetna Fashion (P) Ltd. and a lease deed was also executed in its favour. The other part was allotted in favour of Elaikim Electronics (P) Ltd. but the lease deed had not been executed up to the relevant date.

The State Government heard the petitioner and the lease holder/allottees of two units referred to above. The State Government passed an order on 18.08.2004 which in the opinion of the Court is more of a compromise rather on the legalities. The Secretary of the Industrial Development Department has proceeded to pass orders in respect of stamp duty paid and that would be payable in the matter of execution of fresh deeds under the order which in our opinion is wholly without jurisdiction and outside the scope of proceedings under Section 41(3) of the U.P. Urban Planning and Development Act.

Under the order dated 18.08.2004 only one reason has been assigned for setting aside the order of the development authority cancelling the allotment of the lease deed in favour of the petitioner namely that on the date the cancellation order was made and allotment letter in favour of M/s. Chetna Fashion (P) Ltd. and Elaikim Electronics (P) Ltd. were issued, the property was mortgaged with PICUP. The PICUP had the first charge, therefore, allotment could not have been cancelled.

In our opinion such a conclusion is perverse and is based on complete non consideration of the clause of the lease deed which we had referred to herein above namely part 3 of the lease deed, clause 10-B proviso which specifically provided that if an industry has been financed by the Corporations mentioned in the clause including PICUP and the property has been assigned or mortgaged then cancellation of the lease deed shall be effected only after giving 30 days notice to such financing body. The said clause of the lease deed has completely been ignored by the State Government while passing the order dated 18.08.2004.

Even otherwise we may record that consequences for violation of the conditions of the lease deed cannot be controlled by the stipulations of the conditions of the mortgage of the property for securing loan in favour of the financing authority to which Greater NOIDA is not a party. The conditions of mortgage of the property, its attachment by the financing authority is completely foreign to the cancellation of the lease deed in terms of the lease by the lessor in the facts of the case, Greater NOIDA.

We are further surprise to note that the State Government not only proceeded to set aside the order of the Development Authority, it further went on to issue certain directions in the matter of execution of fresh lease in favour of M/s. Chetna Fashion (P) Ltd. and M/s. Elaikim Electronics (P) Ltd. of other plots. Directions have also been issued qua the amount of stamp duty to be paid on the fresh lease deeds to be executed including payment of stamp duty in installments. Such directions, in the opinion of the Court violate the provision of the Indian Stamp Act and the rules framed thereunder and even otherwise were not within the scope of the proceedings under section 41(3) of the U.P. Urban Planning and Development Act. We have no hesitation to hold that all such directions pertaining to the payment of stamp duty are void and need not be given effect to.

It is the case of the petitioner that the order of the State Government dated 18.08.2004 has not been challenged by the Greater NOIDA authority and, therefore, need not be examined by this Court. The contention has only been raised to be rejected. This Court will not perpetuate an illegal order and must inform the authorities that they cannot pass orders which are contrary to law. If such orders are brought to the knowledge of the Court and their enforcement is prayed, the Court will not accept the orders on its face value and must not sit as a mute spectator. Public money in the shape of stamp duty is involved. Therefore, we reject the contention raised and hold that all the directions in the matter of stamp duty payable on the fresh deeds passed by the Secretary in exercise of powers under Section 41(3) of the U.P. Urban Planning and Development Act need not be carried out by the Revenue authorities of the State of U.P.

With reference to the order of the State Government dated 18.08.2004, a letter was forwarded by the Greater NOIDA on 10.11.2004 calling upon the petitioner (a) to deposit a sum of Rs.4.5 lakhs within 15 days, (b) to pay the lease rent excluding the penal interest as per the provisions and (c) a period of eight months remain for the unit being made functional. If the petitioner wants to have any further extension of time, he has to deposit additional premium to the tune of 4%, 6% and 8% qua each extension in accordance with the new policy of the Greater NOIDA of the year 2001.

In response to this letter, the petitioner forwarded a reply dated 02.12.2004 informing the Chief Executive Officer that waiver from stamp duty can be granted up to Rs. 9 lakhs on a modification petition being submitted before the concerned authority to the effect that previous allotment has been cancelled. So far as the direction with regard to point (b) and (c) are concerned, it was stated that the Director of the Company will meet the authorities of the Greater NOIDA shortly and shall work out the modalities to settle the issue amicably and pay the amount accordingly.

In response to the letter of the petitioner dated 02.12.2004, a fresh letter was forwarded by the Greater NOIDA to the petitioner dated 24.05.2005 pointing out that (a) a sum of Rs.8,49,805/- was due towards lease rent and a sum of Rs.6,73,055/- was payable as interest for the period up to 17.02.2003 (i.e. the date of cancellation of the allotment) (b) under the provisions of the Indian Stamp Act, no waiver from the stamp duty was permissible and (c) in accordance with the policy of the development authority dated 01.06.2001 for every extension time in the matter of the industry being made functional, the allottee has to pay an additional sum of premium @ 4%, 6% and 8% for every extension of one year, two years and three years respectively. Accordingly, a total of 12,23,715/- was payable for grant of extension in the matter of industry being made functional up to 6th July, 2006.

The petitioner did not deposit the money as asked for and on the contrary submitted a letter on 06.07.2005 stating therein that re-possession of the plot has not been done and immediately action in that regard would be appreciated.

We may record that in the said letter also there was no challenge to the demand of arrears of lease rent, stamp duty being not waived and additional premium @ 4%, 6% and 8% being deposited for every year of extension qua the industry being made functional. What has happened thereafter for eight years is not known.

What is known is that the petitioner has not deposited any money thereafter.

According to paragraph 37 of the paper book, the petitioner is stated to have sent letters for possession being delivered in November, 2005, 2006, 2007, 2010, 2011, 2012 and last on 12.08.2013. The general recital made in paragraph 37 is not supported by any averment in the representation of the petitioner dated 12.08.2013. It does not even refer to any of the said letters of the petitioner.

We have no hesitation to record that wholly vague and general allegations have been made to suggest that the petitioner was pursuing the matter with the Greate NOIDA during all these eight years.

It is only on 12.08.2013 that the petitioner writes a letter to the Greater NOIDA asking for the re-possession of the plot and for lease rent being waived for the period between 17.02.2003 till the date of re-possession and three years further time being provided to implement the project. In this letter also there is no challenge to the legality of the demands made under the letter of the Greater NOIDA dated 10.11.2004 and dated 24.05.2005. It is worthwhile to reproduce the prayer made the last representation dated 12.09.2013 which reads as follows :

?In view of the above stated circumstances, we request you to kindly allow us the following relief :

1. Arrange for immediate repossession of the said plot of land to us as per the order of the Secretary, Industrial Development, U.P. as we have already paid Rs.4.50 lacs also.

2. Lease rent on the said plot of land may kindly be waived from 17.02.2003 (the date on which Authority cancelled our plot) till date as re-possession of the said land is yet to be given to us by the Authority.

3. Kindly allow us 3 years further time to implement our project without any additional charges as we can take concrete steps only after we get repossession of the said.

We remain at your disposal for any additional clarification you may desire to have.?

The factual background of the present case, we have no hesitation to record that the petitioner had not constructed the factory nor has he made it functional even after expiry of 16 years from the date of allotment. He has only been writing letters and has been approaching the State Government to somehow or the other to maintain his right over the plot in question. There is no challenge worth consideration to the demand of lease rent of Rs. 8,49,000/- and interest of Rs.6,73,000/- for the period prior to the date of cancellation of the patta i.e. for the period prior to 17.02.2003. From the order of the State Government dated 18.08.2004 read with order dated 25.08.2004 which is heavily relied upon by the counsel for the petitioner in support of this petition, it is clear that the petitioner to pay the lease rent which may be due up to the date of cancellation with the condition that the penal interest may be waived. Petitioner had not carried out the assurance so given and as recorded in the orders dated 18.08.2004 and dated 25.08.2004 till date.

It is, therefore, clear that the petitioner does not want to carry out his part of the obligation in terms of the order of the State Government dated 18.08.2004 as modified on 25.08.2004. He only wants to draw the benefit which accrue thereunder. The undertaking given by the petitioner was binding upon him and he cannot evade payment of lease rent on any ground whatsoever.

We are, therefore, of the considered opinion that in the facts of the case no relief need be granted to the petitioner because of his conduct of non-payment of the admitted amount of the lease rent as was assured before the State Government till date. We further find that the demand of additional premium @ 4%, 6% and 8% as was made under the letter of the Greater NOIDA as early as on 24.05.2005 had not been challenged in any of the representations made by the petitioner or before the State Government at any point of time. The demand is based on policy decision of the Greater NOIDA which is not under challenge in the present petition.

So far as the prayer no. 2 is concerned, we find that there is no letter of the NOIDA making any demand of the lease rent for the period subsequent to cancellation of the lease i.e. 17.02.2003, therefore, the issue does not arise for consideration in the present petition.

In the totality of the circumstances on record, we see no good ground to interfere under Article 226 of the Constitution of India.

Writ petition is dismissed.

Dated :25.11.2013

VR/64065/13