Jakson Limited vs State Of U.P. And 3 Others
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Allahabad High Court

Jakson Limited vs State Of U.P. And 3 Others on 30 July, 2025

Author: Mahesh Chandra Tripathi

Bench: Mahesh Chandra Tripathi

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 



 

 
Neutral Citation No. - 2025:AHC:126057-DB
 

 
Court No. - 29
 

 
Case :- WRIT - C No. - 18504 of 2025
 

 
Petitioner :- Jakson Limited
 
Respondent :- State Of U.P. And 3 Others
 
Counsel for Petitioner :- Chandra Bhan Gupta
 
Counsel for Respondent :- Aditya Bhushan Singhal,C.S.C.
 

 
Hon'ble Mahesh Chandra Tripathi,J.
 

Hon'ble Prashant Kumar,J.

1. Heard learned counsel for the petitioner, Shri Ambrish Shukla, learned Additional Chief Standing Counsel for State respondents and Shri Krishna Agarwal, learned counsel for Yamuna Expressway Industrial Development Authority1.

2. The present writ petition has been filed by the petitioner - M/s Jakson Limited, a company registered under the Indian Companies Act, having its corporate office at Noida, Uttar Pradesh, challenging the cancellation of allotment of Plot No. D-09, Sector-28, measuring 20,000 square meters by the Yamuna Expressway Industrial Development Authority (YEIDA), as communicated through the impugned letter dated 03.04.2025.

3. The facts emerging from the writ petition indicate that YEIDA had floated a scheme, bearing code YEA/INDDC-Park (2023)-03, inviting applications for allotment of plots in its Data Center Park located in Sector 28 for the purpose of establishing Data Centers of size 20,000 square meters and above. The scheme was launched three times owing to insufficient number of applications. The petitioner participated in all three iterations of the scheme, and upon conclusion of interview and lottery, it was allotted Plot No. D-09, Sector-28, vide allotment letter dated 09.11.2023. The allotment was made for a lease period of 90 years for setting up a Data Center with IT/ITES infrastructure. As per the terms, the petitioner deposited Rs.3,10,23,521/- as registration money, which later turned out to be an excess of Rs.28,47,521/- due to the recalculated premium for the allotted plot.

3.1. The record reflects that the Data Center project required a first-phase investment of approximately Rs.600 crores and was highly dependent on site-specific factors like floor area ratio (FAR), height restrictions due to proximity to Jewar Airport, and appropriate Mean Sea Level (MSL). According to the petitioner, despite the expectations built through promotional materials and assurances of support from the Development Authority, the viability of establishing a hyperscale Data Center on the allotted plot was severely compromised. The restrictions on building height and lack of secondary power redundancy rendered the site suitable only for small-scale backup data centers, whereas the petitioner's plan involved a "Father" category hyperscale Data Center with a minimum capacity of 40 MW, in line with incentives announced by the State Government.

3.2. The petitioner claims to have continuously brought these viability concerns to the notice of the Authority through various communications and meetings. These included letters dated 15.12.2023 and 22.12.2023 seeking extension of time for deposit of installments without penalty, which were partially acceded to. Subsequently, the petitioner again communicated its constraints through letters dated 22.03.2024 and 03.04.2024, requesting vital technical information regarding master plans, FAR, ground coverage, and electrical infrastructure at the site. When the challenges persisted, the petitioner submitted another representation dated 24.05.2024, proposing to repurpose the land for alternate industrial or commercial use, promising to meet all financial obligations as required. This was followed by further requests dated 28.06.2024 and 18.07.2024, suggesting transfer of the allotment to Linx Lithium Pvt. Ltd., a wholly-owned subsidiary of the petitioner better positioned to utilize the land for industrial development.

3.3. Despite these communications, the YEIDA by its letter dated 25.09.2024 rejected the request for transfer of allotment, stating that the brochure did not permit such a transfer. A final notice was issued requiring payment of outstanding dues within 15 days. Nevertheless, the petitioner again wrote on 22.10.2024 offering to deposit the installment amount and seeking waiver of penal interest, followed by a letter dated 27.11.2024 reiterating the viability concerns and requesting interest waiver. In response, YEIDA directed the petitioner to deposit a total amount of Rs.12,37,61,303/- by 30.11.2024, inclusive of interest of Rs.91,79,932/-.

3.4. The petitioner claims that further correspondence ensued, including a letter dated 03.03.2025 in which it expressed willingness to deposit the principal amount of Rs.5,63,52,000/- and sought reconsideration of interest waiver in light of ongoing discussions and hardships. However, despite these efforts, the allotment was cancelled vide impugned order dated 03.04.2025, invoking clause 1.6.7(C) of the scheme brochure for failure to deposit the 20% allotment money within the stipulated or extended timelines. Additionally, the registration amount was forfeited.

4. Learned counsel for the petitioner has vehemently argued that the cancellation of the allotment by YEIDA is illegal, arbitrary, and has been passed without any opportunity of hearing, thereby violating the principles of natural justice. It was submitted that the petitioner, a reputed and resourceful company, had applied for allotment of industrial land in good faith, intending to establish a high-capacity hyperscale Data Center, which is in consonance with the industrial objectives promoted by the State Government. The petitioner participated in the scheme in all its phases and was ultimately allotted Plot No. D-09, Sector 28, through a legitimate process involving interviews and a lottery system. In response, it promptly deposited the registration money, even in excess of what was required, reflecting its genuine commitment to execute the project.

4.1. It was submitted that despite repeated attempts, the petitioner was faced with insurmountable technical and infrastructural limitations at the site, primarily due to height restrictions on account of the proximity to Jewar Airport, and lack of secondary power redundancy. These restrictions made it impossible to construct a hyperscale Data Center, which requires specific infrastructure such as a permissible Floor Area Ratio, adequate Mean Sea Level, and appropriate land contour. It was further argued that the very viability of the project, as originally conceived, was fundamentally compromised due to these factors, and thus the petitioner had no option but to seek a modification in the scheme or transfer of the plot to its wholly-owned subsidiary, Linx Lithium Pvt. Ltd., which could utilize the land more effectively for other permissible industrial purposes.

4.2. Learned counsel contended that several letters and representations were made to the Authority well in advance, including specific requests dated 15.12.2023, 22.12.2023, 24.05.2024, 28.06.2024, and 18.07.2024, clearly highlighting the technical challenges and seeking either a repurposing of the land or an extension of time. Despite this, the Authority chose to remain non-responsive or gave mechanical replies that failed to address the petitioner's real grievances. Even when the petitioner offered to pay the entire allotment money without interest or offered to deposit part payment of Rs.5,63,52,000/- and sought waiver of penal interest, there was no meaningful consideration or dialogue from the Authority.

4.3. It was also submitted that the impugned order fails to appreciate that the site itself was not fully developed and that the Authority had already revised its original layout from 100 acres to 50 acres for the Data Center Park due to similar feasibility concerns raised by other stakeholders. The petitioner placed reliance on public statements made by the CEO of YEIDA and news reports which corroborate the challenges associated with the Sector 28 site for a viable Data Center. Learned counsel also emphasized that the cancellation order not only suffers from procedural irregularity due to the absence of a show-cause notice or hearing but also substantively ignores the petitioner's continuing willingness to fulfill its financial obligations.

4.4. Lastly, it was argued that YEIDA has acted in an unjust and high-handed manner by forfeiting the registration amount even though the petitioner had not defaulted willfully, and had, in fact, made several genuine efforts to resolve the issues amicably. The petitioner's proposal to utilize the plot for alternate industrial activity through its own subsidiary is not barred under any statutory rule and ought to have been considered in the larger public and commercial interest. Hence, the learned counsel prays that the impugned cancellation order be set aside and the respondents be directed to either permit alternate usage or transfer of allotment to Linx Lithium Pvt. Ltd., while waiving the penal interest.

5. Per contra, Shri Ambish Shukla, learned Additional Chief Standing Counsel appearing for the State-respondents, and Shri Krishna Agarwal, learned counsel representing the Yamuna Expressway Industrial Development Authority, submitted that the impugned cancellation order dated 03.04.2025 is lawful, justified, and strictly in accordance with the terms and conditions of the allotment scheme. It was submitted that the petitioner had failed to deposit the mandatory 20% of the total premium amount, i.e. Rs.5,63,52,000/- within the stipulated period of 60 days from the issuance of the allotment letter dated 09.11.2023, or even within the extended deadlines provided through multiple communications dated 23.01.2024, 25.09.2024, 18.11.2024, and 27.01.2025. Hence, as per Clause 1.6.7(C) of the brochure, the allotment stood liable to be cancelled, and the deposited registration amount forfeited.

5.1. It was further submitted that the Authority, despite repeated leniency, granted extensions up to 30.11.2024, but the petitioner persistently failed to make the requisite payments. The petitioner's subsequent letters seeking waiver of penal interest and change in the usage or transfer of plot to a subsidiary company could not be considered in absence of any enabling provision in the scheme brochure. It was clarified that the scheme did not permit substitution or assignment of allotment to a third party or a subsidiary company, and any such change would fundamentally alter the nature of the allotment process, adversely affecting transparency and fairness.

5.2. Learned counsel for YEIDA emphasized that the petitioner was well aware of the plot location and surrounding constraints at the time of application. It is not open for the petitioner to now claim lack of viability as a defence for non-compliance with financial obligations. The entire scheme was floated on objective criteria and was uniformly applicable to all participants. Thus, in the absence of timely deposit of allotment money, the cancellation of allotment and forfeiture of registration fee was an automatic consequence under the scheme. Accordingly, it was urged that the writ petition be dismissed as devoid of merit.

6. Having heard the submissions of learned counsel for the parties and upon perusal of the materials on record, this Court finds no reason to interfere with the impugned order of cancellation dated 03.04.2025 passed by the Yamuna Expressway Industrial Development Authority (YEIDA). The central issue revolves around the petitioner's failure to deposit the mandatory 20% of the total premium amount within the stipulated or extended timelines as per the scheme guidelines, and whether such failure could be condoned in light of the petitioner's subsequent representations and viability concerns.

6.1. The decision of the Hon'ble Apex Court in Skyline Contractors Pvt. Ltd. v. State of U.P. 2 squarely applies to the facts of the present case. In that matter, despite partial and delayed payments by the allottee, the Hon'ble Supreme Court upheld the cancellation of allotment by NOIDA, holding that unilateral deposits made without prior approval or consent could not bind the authority. Similarly, in the present case, the petitioner neither sought nor obtained any formal extension of time from UPSIDA within the contractual framework. Her delayed restoration applications--though sought to be justified by referring to the alleged date of service--cannot cure or condone years of non-performance and breach of essential terms of allotment.

6.2. In a recent judgment, the Hon'ble Apex Court in Kamla Nehru Memorial Trust and Others v. U.P. State Industrial Development Corporation Limited and Others 3 held that, in order to preserve the integrity of the allotment process, allowing deliberate and repeated defaults by an allottee to persist unchecked would undermine the entire framework of land allocation and set a harmful precedent detrimental to public interest. The relevant portion of the judgment is reproduced herein below:--

"25. We may hasten to add at this stage that the dues for the Subject Land, allotted in 2003, remained unpaid despite multiple communications spanning several years. KNMT not only failed to make timely payments but also sought unwarranted concessions, including waiver of interest and rescheduling of dues. This persistent non-compliance establishes KNMT as a chronic defaulter, while the continued attempts to seek waiver evince a deliberate strategy to avoid payment obligations. UPSIDC's action in treating KNMT as a defaulter was, therefore, both justified and necessary to preserve the integrity of the allotment process. Allowing such deliberate defaults to persist unchecked would undermine the entire framework of land allocation and set a detrimental precedent.

1. 26. For the reasons stated, we are satisfied that the cancellation of allotment by UPSIDC is fully justified and in accordance with law.

E. INVOKING THE PUBLIC TRUST DOCTRINE IN THE ALLOCATION OF RESOURCES.

2. 27. The prolonged litigation initiated by KNMT has spanned over fifteen years, unnecessarily burdening the judicial system and impeding the efficient functioning of public authorities. Such protracted disputes highlight the need for more stringent initial evaluation processes to prevent chronic defaults.

3. 28. While we have upheld the cancellation due to KNMT's default, the circumstances reveal systemic concerns in the original allocation process. UPSIDC allotted the Subject Land to KNMT within merely two months of application, raising questions about the thoroughness of the evaluation. Furthermore, during the pendency of

4. this dispute, UPSIDC demonstrated remarkable alacrity in considering alternative allotments to M/s. Jagdishpur Paper Mills Ltd.

5. 29. We, therefore, consider it necessary to examine whether UPSIDC's procedure for industrial land allotment meets standards of administrative propriety, particularly in light of the Public Trust Doctrine (Doctrine) mandating that public resources be managed with due diligence, fairness, and in conformity with public interest.

6. 30. The Doctrine emanates from the ancient principle that certain resources (seashores, rivers and forests) are so intrinsically important to the public that they cannot be subjected to unrestricted private control. Rooted in Roman law and incorporated into English common law, this Doctrine recognizes that the Sovereign holds specific resources as a trustee for present and future generations. M.C. Mehta v. Kamal Nath, (1997) 1 SCC 388, para 24-25.

7. 31. In the Indian context, the Doctrine has evolved to encompass public resources meant for collective benefit, reflecting the constitutional mandate Under Article 21. As held in Natural Resources Allocation In re, while the Doctrine does not impose an absolute prohibition on transferring public trust property, it subjects such alienation to stringent judicial review to ensure legitimate public purpose and adequate safeguards. Centre for Public Interest Litigation V. Union of India (2012) 3 SCC 1

8. 32. When a substantial tract of industrial land is allocated without a comprehensive evaluation, it raises critical questions about adherence to these principles. The Doctrine requires that allocation decisions be preceded by a thorough assessment of public benefits, beneficiary credentials, and safeguards ensuring continued compliance with stated purposes.

9. 33. The allocation of 125 acres of industrial land to KNMT without a competitive process fundamentally violated the Doctrine, which demands proper procedure and substantive accountability in public resource allocation. UPSIDC ought to have considered verifiable evidence of economic benefits, employment generation potential, environmental sustainability, and alignment with regional development objectives to demonstrate that the decision serves the collective benefit. The failure to adopt transparent mechanisms not only deprived the public exchequer of potential revenue-as evidenced by the substantial appreciation in the value of such a large tract of land-but also created a system where privileged access supersedes equal opportunity. This betrays the fiduciary relationship between the State and its citizens.

34. Having upheld the cancellation due to KNMT's chronic default, we observe that the hasty allotment followed by years of litigation exemplifies systemic deficiencies in the allocation process. This necessitates comprehensive directions to ensure that future allocations uphold principles of transparency and accountability, thereby preventing prolonged disputes while ensuring that public resources genuinely promote industrial development and economic growth.

F. CONCLUSION AND DIRECTIONS

10. 35. In light of our detailed examination of the contentions raised by the parties, the comprehensive analysis of the factual and legal matrix and the resultant conclusions, we uphold the cancellation of the allotment by UPSIDC."

6.3. In a recent judgment and order dated 11.07.2025, passed by a Coordinate Bench of this High Court in WRIT - C No. 21819 of 2025 (Smt. Savita Sharma vs. State of U.P. and 2 Others), the cancellation of allotment by UPSIDA was upheld. The Court held that the restoration of a lease deed after fourteen successive failures to pay dues and violations of statutory provisions is not merely a matter of administrative discretion, but rather strikes at the very foundation of fiscal discipline, public interest, and the objectives of industrial policy. The relevant portion of the judgment is reproduced hereinbelow:-

"17. Successive failures to comply with lease terms also undermine public interest. Permitting continued retention of land by a non-performing allottee deprives deserving applicants of opportunities and slows down industrialization efforts. If such conduct is tolerated through writ jurisdiction, it may erode public confidence in the fairness and transparency of the State's land allocation framework.

18. Restoration of leases after repeated defaults may be viewed as arbitrary or ultra vires, particularly when it contravenes the express terms of the allotment letter or lease deed. The Supreme Court in Skyline Contractors Pvt. Ltd. (supra) have emphasized that deliberate non-compliance with payment schedules and lease conditions justifies cancellation of allotments. Courts have consistently held that leniency towards such defaulters undermines the integrity of the allotment process and sets a detrimental precedent.

19. A policy of restoring leases after long-term default would create a negative precedent for future allottees to disregard payment schedules and statutory obligations, anticipating eventual concessions. This undermines the deterrent effect of enforcement measures like cancellation and e-auction, weakening the overall governance framework of industrial land allocation.

20. In essence, restoring a lease deed after 14 successive failures to pay dues and violations of statutory provisions is not merely a question of administrative discretion; it strikes at the very foundation of fiscal discipline, public interest, and industrial policy objectives. The UPSIDA has acted in a manner that balances equity with accountability, ensuring that public resources are allocated to genuine entrepreneurs who can contribute to economic development and employment generation. Any contrary approach risks financial losses, delays in industrial growth, and erosion of public trust in the State's administrative fairness.

21. Therefore, having regard to the petitioner's repeated non-compliance with the demand notices dated 07.12.2020, 02.06.2021, 07.12.2021, 22.12.2021, 04.03.2022, 26.05.2022, 12.07.2022, 24.11.2022, 14.12.2022, 14.03.2023, 09.06.2023, 19.09.2023, 28.12.2023, and 07.03.2023, coupled with the violation of Clauses 15(a), 15(b), 15(c), and 23 of the lease deed dated 09.09.2020 as well as other provisions of the Urban Planning and Development Act, 1973, this Court finds no ground to extend indulgence in the exercise of its writ jurisdiction. The grounds urged by the petitioner do not merit interference under Article 226 of the Constitution of India, as UPSIDA's actions are neither arbitrary nor violative of the principles of natural justice.

22. Accordingly, for the reasons stated hereinabove, the writ petition fails on merits and is hereby dismissed. There shall be no order as to costs."

6.4. It is an admitted position that the petitioner was allotted Plot No. D-09, Sector-28, for setting up a Data Center under a well-publicized and standardized scheme bearing code YEA/INDDC-Park (2023)-03. The allotment was made after multiple rounds of the scheme, and the petitioner, having participated voluntarily and with full awareness of the site-specific parameters, was expected to comply with the financial terms and conditions laid out in the brochure. Clause 1.6.7(C) of the scheme clearly stipulates that failure to deposit the 20% of the premium within the prescribed time would entail cancellation of allotment and forfeiture of the registration amount. Admittedly, the petitioner failed to make the said deposit even within the extended timeline granted by YEIDA up to 30.11.2024. The request for interest waiver and subsequent communications indicating willingness to make part-payments do not amount to compliance with the essential financial obligations of the scheme.

6.5. It is further noteworthy that while the petitioner has raised issues regarding the viability of the site for establishing a hyperscale Data Center citing height restrictions, lack of secondary power supply, and floor area limitations such concerns cannot override the contractual terms voluntarily agreed to at the time of application. These technical limitations, even if taken into consideration, do not absolve the petitioner from timely adherence to the financial milestones mandated under the scheme. The petitioner's claim that the site was not suitable for the planned project appears to be a post facto justification for non-performance, especially when the scheme did not offer any conditional allotment subject to post-allotment site re-evaluation or feasibility testing.

6.6. Moreover, the request for allowing alternate land use or transfer of allotment to a subsidiary company cannot be entertained in the absence of any enabling provision under the scheme. The brochure forms the contractual framework between the parties and explicitly prohibits transfer or substitution of allottee. Acceptance of such a request would not only violate the sanctity of the allotment process but would also set an unhealthy precedent compromising the fairness and transparency that the scheme seeks to uphold. It is a well-settled principle of law that contractual terms voluntarily accepted by parties cannot be ignored or modified unilaterally by invoking equitable considerations. The petitioner was at liberty to evaluate the site conditions before applying and had the opportunity to withdraw at any stage prior to allotment.

6.7. The argument regarding the lack of opportunity of hearing or violation of natural justice also does not hold weight in the present context. The cancellation was a consequence of non-compliance with a mandatory financial requirement and not based on any disputed fact that necessitated an adjudicatory process. The scheme provided a clear and automatic consequence for failure to deposit the required amount, and the repeated extensions provided by the Authority only demonstrate that procedural fairness was afforded to the petitioner. In such circumstances, the principle of audi alteram partem cannot be stretched to override express contractual obligations.

6.8. In view of the above, the Court is of the considered opinion that the impugned order dated 03.04.2025 is neither arbitrary nor in violation of any statutory or constitutional provision. The petitioner, despite several opportunities and indulgence shown by YEIDA, failed to discharge its core obligation under the scheme. There is no manifest illegality or procedural impropriety in the decision of the Authority that would warrant judicial interference under Article 226 of the Constitution.

7. Accordingly, the writ petition is dismissed as being devoid of merit. No order as to costs.

Order Date :- 30.07.2025

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