M/S Logix Infomedia (P) Ltd. vs State Of U.P. And 4 Others
2021 Latest Caselaw 11035 ALL

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 

AFR
 
Court No. - 40
 

 
Case :- WRIT - C No. - 18969 of 2021
 

 
Petitioner :- M/S Logix Infomedia (P) Ltd.
 
Respondent :- State Of U.P. And 4 Others
 
Counsel for Petitioner :- Himadari Batra,Anurag Khanna (Senior Adv.)
 
Counsel for Respondent :- C.S.C.,Kaushalendra Nath Singh
 

 
Hon'ble Manoj Misra,J.

Hon'ble Jayant Banerji,J.

1. Heard Shri Anurag Khanna assisted by Ms. Himadari Batra for the petitioner; the learned Standing Counsel for the respondent no. 1 and Shri Kaushalendra Nath Singh for the respondent nos. 2 to 5.

2. Considering the nature of the order that we propose to pass as also the ground on which the order is proposed, Shri Kaushalendra Nath Singh, who appears for the contesting respondent nos. 2 to 5 and the learned Standing Counsel who represents the first respondent do not propose to file a counter affidavit and are agreeable for final disposal of the petition at this stage itself.

3. At the outset, Shri Anurag Khanna, learned counsel for the petitioner states that he does not wish to press relief (b) in the writ petition. He, therefore, confines his prayer to relief (a), which is to quash the order dated 27.5.2021 passed by the Assistant General Manager (Institutional), NOIDA (respondent no. 5).

4. According to the petitioner, on 24.1.2006, pursuant to an invitation by the New Okhla Industrial Development Authority (for short NOIDA) for setting up Educational/Training/Research and Development Institutions/Software IT Units/IT enabled Services and other allied Services etc. the petitioner submitted an application for allotment of a plot of land. In response thereto, a reservation-cum-allotment letter dated 7.3.2006 was issued to the petitioner allotting an area of 8000 sq. meter land on lease for 90 years. However, the lease deed, dated 28.12.2007, executed by NOIDA was with respect to an area of 5184 sq. meter. Certain clauses of the lease deed required the petitioner to complete the constructions; obtain occupancy certificate from the competent authority of NOIDA within the validity period of approved building plan; and ensure functioning of the unit on the allotted plot, within five years from the actual date of possession. Though, in case of exceptional circumstances, an extension could be allowed by the lessor subject to extension charges at the rate of 4% of the premium for each year on pro-rata monthly basis. Following the execution of lease, on 7.1.2008, a possession certificate was issued to the petitioner in respect of 5184 sq. meter of land. Thereafter, vide letter dated 11.10.2012, the petitioner was informed that though the area allotted was 8000 sq. meters but in measurement it came out to be 8100 sq. meters. Consequently, for additional 100 sq. meters of land additional amount was demanded. Whereafter, on 7.1.2013, a supplementary lease deed was executed by NOIDA in favour of the petitioner for the balance area of 2916 sq. meters of land, which was followed by a possession certificate dated 8.1.2013 in respect of the additional demised land ad-measuring 2196 sq. meters. It is submitted that due to late transfer of possession of the total allotted land, the project could not be completed within time, consequently, on an application made by the petitioner, the NOIDA Authority by its letter dated 1.5.2017 accepted the request of the petitioner for extension of time for construction, on payment of extension charges, from 8.1.2015 to 7.4.2018. Thereafter, on 20.3.2018, an application was moved by the petitioner before the NOIDA Authority for purchasing additional Floor Area Ratio (FAR) and approval of a building plan. It is submitted that the NOIDA Authority approved the request for allocation of additional FAR on 18.6.2018. Whereafter the petitioner obtained no objection certificate from the Fire Department on 17.7.2018 and from the Pollution Control Board on 27.8.2018. The petitioner then, again, applied to the NOIDA Authority for extension of time for construction, which was approved on 2.8.2019. On 12.3.2020, the building plans of the petitioner were approved by the NOIDA Authority and it also issued a no dues certificate dated 29.7.2020. It is submitted that in view of the disruption on account of Covid-19 pandemic, the petitioner again, by means of letter dated 4.8.2020, sought an extension of time from 8.4.2020 to 7.4.2021 for which the due amount was also deposited. However, on 27.5.2021, the NOIDA Authority passed the impugned order declining the request for extension on the basis of the proviso to Section 7 of the U.P. Industrial Area Development Act, 1976 (for short 1976 Act), which was inserted by means of the U.P. Industrial Area Development (Amendment) Ordinance, 2020 (Ordinance No.16 of 2020). It was stated therein that the time extension application of the petitioner cannot be allowed in terms of the newly inserted proviso to Section 7 of the 1976 Act and that the petitioner has time only till 28.7.2021 to complete the construction, failing which, the Authority shall take further steps.

5. It be noticed that by means of the U.P. Industrial Area Development (Amendment) Act, 2020 (U.P. Act No. 25 of 2020), the aforesaid Ordinance of 2020 was replaced and the proviso came to be inserted in Section 7 of the 1976 Act with effect from 28.07.2020.

6. It has been contended by the learned counsel for the petitioner that the impugned order is absolutely arbitrary inasmuch as adequate and proper notice as contemplated in the aforesaid U.P. Act No. 25 of 2020 has not been given.

7. Shri Kaushalendra Nath Singh, learned counsel for the NOIDA Authority, on the basis of instructions received by him has stated that as per the letter dated 30.7.2021 sent by the State Government to the NOIDA Authority, the period of one year as envisaged in the second part of the proviso to Section 7 of the 1976 Act, inserted by U.P. Act No. 25 of 2020, is to be counted from the date of service of notice and, therefore, the period of one year for utilization of the land, for which it has been allotted, is to be counted from 27.5.2021 i.e. the date of the notice/order.

8. Countering this, the learned counsel for the petitioner has urged that in the impugned notice, dated 27.5.2021, given by the respondent-Authority, the time period of one year has been counted from 28.7.2020, that is from the date on which the U.P. Act No. 25 of 2020 came into force. It is contended that that action of the NOIDA Authority is patently arbitrary and is in the teeth of the second part of the proviso to Section 7 of the 1976 Act. He contends that the second part of the proviso to Section 7 clearly provides that where the period provided in first part for utilization of the land has already lapsed before the commencement of the amending Act, the Authority is to give a notice to the allottee to use the land for the purpose it was allotted within a period of one year and if within the above period of one year the allottee does not use the land, it is then that the allotment and lease deed would stand automatically cancelled. In support of the above contention, the petitioner has relied upon a judgement of this Court dated 2.2.2021 passed in Writ-C No. 2238 of 2021 (M/s. J.M. Housing Limited Vs. State of U.P. and others), copy of which has been enclosed as Annexure- 37 to this petition.

9. Another argument raised by the learned counsel for the petitioner is that the supplementary lease deed was executed on 7.1.2013 and, only thereafter, that the petitioner got possession of the entire area of 8100 sq. meters of land therefore, the petitioner cannot be saddled with the burden imposed by the proviso to Section 7 of the 1976 Act, particularly, when, after receiving the possession of the entire area of 8100 sq. meters of land, the petitioner applied for additional FAR, as also no objection certificate from various authorities, and for sanction of the building plans.

10. Dealing with the second submission of the learned counsel for the petitioner first, which is based on the so-called supplementary lease deed dated 7.1.2013, it is observed that it is not a supplementary lease deed but a correction deed that corrects the area of the plot mentioned in the original lease deed so as to be read as 8100 sq. meters in place of 5184 sq. meters. Similarly, it incorporates necessary corrections regarding the premium, lease rent, etc.. In this correction deed of 7.1.2013 it is specifically mentioned that all other terms and conditions of the original lease deed and allotment letter shall remain unchanged and applicable as well as binding upon the lessee. Therefore, no further benefit in respect of extension of time can enure to the petitioner on the basis of the deed executed on 7.1.2013.

11. As regards the first submission of the learned counsel for the petitioner regarding the impugned notice/order dated 27.5.2021 being arbitrary and in the teeth of the true import of the second part of the proviso to Section 7 of the 1976 Act, on perusal of the record and consideration of the submissions of the respective parties, it appears to us that this contention of the learned counsel for the petitioner has force. It be noticed that to Section 7 of the 1976 Act a proviso was inserted by U.P. Act No. 25 of 2020. The published Statement of Objects and Reasons of U.P. Act No.25 of 2020 is extracted below:

"The Uttar Pradesh Industrial Area Development Act, 1976 (U.P. Act No.6 of 1976) has been enacted to provide for the constitution of an Authority for the development of certain areas in the State into industrial and urban township and for the matters connected therewith. In order to accelerate industrialisation in the State, it was felt necessary to increase the land bank. Hence it was decided that if the industrial unit is not established within a period of five years from the date of possession, or within the period fixed for such utilisation, whichever is longer, the lease deed will stand automatically canceled and the land shall vest with the Industrial Development Authority. Where the aforesaid period has lapsed before the commencement of this Act, the Authority shall give notice to the allottee and if the allottee does not use the land within the period of one year mentioned above, the allotment and lease deed shall be deemed to have been automatically cancelled. In view of the above, it had been decided to amend aforesaid Act.

Since the State legislature was not in session and immediate legislative action was necessary to implement the aforesaid decision, the Uttar Pradesh Industrial Area Development (Amendment) Ordinance, 2020 ( U.P. Ordinance No.16 of 2020) was promulgated by the Governor on July 28, 2020.

The Bill is introduced to replace the aforesaid Ordinance."

12. The amended Section 7 of 1976 Act, after insertion of the proviso by U.P. Act No.25 of 2020, reads as follows:

"7. Power to the Authority in respect of transfer of land. - The Authority may sell, lease or otherwise transfer whether by auction, allotment or otherwise any land or building belonging to the Authority in the industrial development area, on such terms and conditions as it may, subject to any rules that may be made under this Act, think fit to impose.

Provided that where any land so allotted is not utilised for the purpose for which it was allotted within the period of five years from the date of possession or within the period fixed for such utilisation in the conditions of allotment, whichever is longer, the lease deed will stand cancelled and the land shall vest with the Authority. Provided further where the aforesaid period has already lapsed before the commencement of this Act, the Authority shall give a notice to the allottee to use the land for the purpose for which it was allotted within a period of one year and if within the above period of one year the allottee does not use the land, then the allotment and lease deed shall stand automatically cancelled.".

13. A coordinate Bench of this Court in its judgment dated 2.2.2021 in M/s. J.M. Housing Limited (supra) has observed as follows:

"5. The 1st part of the proviso provides that where any land so allotted is not utilized for the purpose for which it was allotted within a period of 5 years from the date of possession or within the period fixed for such utilization in the conditions of allotment, whichever is longer, the lease deed will stand cancelled and the land shall vest with the Authority. The 2nd part of the proviso provides that where the aforesaid period has already lapsed i.e. where the allotted land is not utilized within 5 years from the date of possession or within the specified period in the terms of allotment and the said period has expired before the commencement of the Amending Act, the authority is obliged to give a notice to use the land for the purpose for which it was allotted within a period of one year and if within the above period of one year the allottee does not use the land, then the allotment and lease deed shall stand automatically cancelled.

6. Thus, the condition precedent for applicability of the 2nd part of the proviso is that the period for utilization should have expired before the commencement of the Amending Act i.e. 28.7.2020 and the Authority before cancelling the allotment / lease had given a notice to the allottee to utilize the land within a year. Sri Singh, on instructions, does not dispute that no notice as contemplated in the 2nd part of the proviso to Section 7 of the Act was ever issued to the petitioner which is also authenticated in the impugned order as the same does not refer to issuance of any such notice, rendering the order dated 7.1.2021 vulnerable in law."

14. The inter play of the two parts of the proviso inserted to Section 7 of the 1976 Act by the amending Act (U.P. Act No.25 of 2020), as interpreted by a coordinate Bench of this Court (noticed above), is in sync with the statement of objects and reasons of the amending Act and, therefore, we are in respectful agreement with the view taken therein. To put it simply, under the first part of the proviso the lease deed stands cancelled where the land allotted is not utilized for the purpose for which it was allotted within the period of five years from the date of possession or within the period fixed for such utilisation in the conditions of allotment, whichever is longer. But where that period has expired before the commencement of the amending Act, that is before 28.07.2020, the second part of the proviso comes into play. Under which, the Authority is to give a notice to the allottee to use the land for the purpose for which it was allotted within a period of one year and if within the above period of one year the allottee does not use the land, then the allotment and lease deed stand automatically cancelled.

15. A perusal of the notice/order impugned dated 27.5.2021 reveals that the period of one year, as envisaged in the second part of the proviso to Section 7 of the 1976 Act, has been reckoned from 28.7.2020, which is the date of enforcement of the U.P. Act No. 25 of 2020, and not the date of service of the notice. It is the case of the petitioner that the NOIDA Authority approved the time extension sought from the petitioner from 18.4.2019 to 7.4.2020. This period had already lapsed before 28.7.2020 i.e. the commencement of the U.P. Act No. 25 of 2020. Therefore, in our view, the second part of the proviso to Section 7 of the 1976 Act became applicable as per which the Authority (in this case NOIDA) had to give notice to the allottee to use the land for the purpose for which it is allotted within a period of one year. Thus, in our considered view, the impugned notice dated 27.5.2021, which refers to the period of one year to be reckoned from 28.7.2020, being the date of commencement of the U.P. Act No. 25 of 2020, is erroneous.

16. Consequently, the order/notice impugned dated 27.5.2021 passed by the respondent no. 5 is quashed. This petition is disposed of by leaving it open to the NOIDA Authority to take steps for issuance of notice to the petitioner as contemplated in the second part of the proviso to Section 7 of the 1976 Act.

Order Date :- 1.9.2021

A. V. Singh/sfa