Mukul Bansal vs State Of U.P. And 2 Others
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Allahabad High Court

Mukul Bansal vs State Of U.P. And 2 Others on 11 November, 2025

Author: Mahesh Chandra Tripathi

Bench: Mahesh Chandra Tripathi

HIGH COURT OF JUDICATURE AT ALLAHABAD
 
 


Neutral Citation No. - 2025:AHC:199257-DB
 

 
HIGH COURT OF JUDICATURE AT ALLAHABAD 
 
WRIT - C No. - 32590 of 2025   
 
   Mukul Bansal    
 
  .....Petitioner(s)   
 
 Versus  
 
   State Of U.P. And 2 Others    
 
  .....Respondent(s)       
 
   
 
  
 
Counsel for Petitioner(s)   
 
:   
 
Ashish Kumar Singh, K.K.Rao   
 
  
 
Counsel for Respondent(s)   
 
:   
 
Ambrish Shukla, Anuj Pratap Singh, C.S.C.   
 
     
 
 Court No. - 29
 
   
 
 HON'BLE MAHESH CHANDRA TRIPATHI, J.  

HON'BLE KUNAL RAVI SINGH, J. 1. Heard Shri Ashish Kumar Singh, learned Senior Advocate assisted by Shri K.K. Rao, learned counsel for the petitioner; Ms. Uttara Bahuguna, learned Additional Chief Standing Counsel for the State-respondent no.1 and Shri Ambrish Shukla, learned counsel for the respondent nos.2 and 3-U.P. State Industrial Development Authority (in short "UPSIDA").

2. The present writ petition is preferred under Article 226 of Constitution of India seeking following reliefs:-

"a. Issue a writ, order or direction in the nature of certiorari to call for the record, quash and set aside the order dated 23.10.2007 (Annexure No.1) passed by respondent No.3 Regional Manager, U.P. State Industrial Development Corporation, order dated 03.06.2016 (Annexure No.2) passed by respondent No.3 Regional Manager, Uttar Pradesh State Industrial Development Corporation and order dated 30.07.2025 (Annexure No.3) passed by respondent No.3 Regional Manager, Uttar Pradesh State Industrial Development Authority.

b. Issue a writ, order or direction in the nature of mandamus commanding the respondent authorities to restore the industrial plot of the petitioner being Plot No.E-5 Industrial Area, Koshi Kotwan, Mathura.

c. To pass such other and further order, which this Hon'ble Court may deem fit and proper in the circumstances of the present case.

d. Award the cost of this petition to the petitioner."

3. It appears from the record that "Uttar Pradesh State Industrial Development Authority" (in short, UPSIDA) (earlier known as Uttar Pradesh State Industrial Development Corporation) vide order dated 08.10.2004 had allotted a plot No.E-5 situated in Industrial Area Kosi Kotvan, District Mathura in favour of the petitioner. In pursuance to the allotment order, the petitioner had deposited Rs.1,56,000/- towards 25% of the value of the plot on 07.11.2004 and further amount of Rs.5,22,100/- from 02.07.2005 to 18.10.2007. Thereafter, the UPSIDA vide letter dated 18.09.2006 had directed the petitioner to deposit the stamp paper of Rs.55,400/- alongwith other documents and to get the lease deed executed within 30 days. Again, the UPSIDA had issued a letter to the petitioner on 22.11.2006 to do the needful, failing which the allotment would be cancelled. By the impugned order dated 23.10.2007, the UPSIDA had cancelled the allotment on the ground that in terms of Clause 13 of the allotment letter dated 08.10.2004, the lease deed was required to be registered within 90 days and the possession was also to be taken within the said period but inspite of the several notices sent by the UPSIDA from time to time, the petitioner has not made any effort to get the lease deed executed. Thereafter, the petitioner had moved an application on 22.11.2007 for restoration of the allotment of the industrial plot. The request for restoration was acceded by the UPSIDA vide order dated 3.6.2016 and leave was accorded to the petitioner to deposit requisite amount. But inspite of the indulgence accorded by the UPSIDA, the petitioner had not fulfilled the terms and conditions. Later on, the petitioner had again filed another application on 02.06.2025 for restoration of the allotment and the same was also rejected by the Regional Manager, UPSIDA vide impugned order dated 30.07.2025.

4. Learned counsel for the petitioner in this backdrop submits that the petitioner has never acted with any mala fide intent. The UPSIDA failed to consider the petitioner's bona fide conduct and his genuine attempts to comply with the conditions of allotment letter. Arbitrary cancellation of the plot would defeat the larger object of the industrial development for which the allotment was made. The said land has not been allotted to any other party till date. The principles of natural justice were not adhered to and the cancellation of allotment was mechanical and devoid of proper consideration. Lastly, it is urged that cancellation of allotment is unjust, inequitable and warrants judicial interference.

5. Per contra, Shri Ambrish Shukla, learned counsel for UPSIDA has vehemently opposed the writ petition. He submits that the petitioner had been accorded conditional allotment on 08.10.2004 under which he was required to fulfill all mandatory formalities including completion of construction, obtaining requisite approvals and commencement of production within stipulated period. Since then the petitioner had been accorded various opportunities but the petitioner had not fulfilled the requisite conditions in the light of the allotment letter. He submits that similar controversy had earlier been raised in Writ-C No.21819 of 2025 (Smt. Savita Sharma v. State of U.P. & Ors.), wherein the cancellation of lease deed was under challenge. In the said proceeding, the Division Bench had considered the object of UPSIDA and also considered the judgment of Hon'ble Apex Court in Skyline Contractors Pvt. Ltd. v. State of U.P., (2008) 8 SCC 265 and Kamla Nehru Memorial Trust & Ors. v. U.P. State Industrial Development Corporation Limited & Ors., 2025 INSC 791. Eventually, the said writ petition was dismissed by Division Bench on 11.07.2025. He submits that instant writ petition being similar one is also liable to be dismissed. In support of his submissions, he has also placed reliance on the judgment of this Court dated 7.1.2016 in Writ-C No.68500 of 2015 (Rakesh Kumar Garg v. State of U.P. & Ors.) and judgment dated 20.08.2025 in Writ-C No.21958 of 2025 (Manish Gupta v. State of U.P. & Ors.).

6. He further submits that despite repeated reminders and notices, neither the petitioner had cleared the outstanding dues nor established a functional industrial unit on the allotted plot. He further submits that the cancellation of the allotment of the plot in question is legal, justified and strictly in accordance with the conditions stipulated in the allotment letter. Lastly, it is urged that since the petitioner has failed to fulfill the essential terms and conditions of the allotment letter as well as the general conditions, the impugned orders have been rightly passed, and the present writ petition is devoid of merit and liable to be dismissed.

7. Heard rival submissions and perused the record.

8. The UPSIDA has been incorporated as State Government Corporation for industrial development in the State. The land is acquired by the State Government for the UPSIDA for development and allotment to the deserving applicants for setting up small and medium scale industries. The authority is entrusted with the responsibility of developing and maintaining requisite infrastructure, providing incentives, and creating a conducive environment for businesses to establish and expand their operations in the State. In furtherance of these objectives, the UPSIDA also endeavours to generate employment opportunities and to support and strengthen the growth of existing industries across Uttar Pradesh. The UPSIDA vide order dated 08.10.2004 had allotted the subject plot in favour of the petitioner for setting up an industry, subject to specific terms and conditions. As indicated above, since 2004, at no point of time the petitioner has proceeded to make any construction over the plot in question and in this backdrop, the UPSIDA had proceeded to cancel the allotment of plot in question on 23.10.2007. Thereafter, the petitioner had moved an application for restoration of the plot in question as under the Operating Manual, provisions are made for restoration of plot that has been cancelled and the norms have to be followed and observed before any such application for restoration is entertained.

9. It is apparent from the record that the UPSIDA had proceeded to re-look the matter in detail and found that the petitioner had not made any serious efforts to establish the industry on the allotted plot. Consequently, the respondent no.3 vide impugned order dated 30.07.2025 has rejected the application of the petitioner for restoration of the plot. Nothing has been brought on record to indicate that at any point of time, the petitioner had made any effort to start the construction and to run the industry. He had not utilised the said plot for about three years and further he did not make any effort for execution of the lease deed.

10. The decision of Hon'ble Apex Court in Skyline Contractors Pvt. Ltd. v. State of U.P (Supra) squarely applies to the facts of the present case. In that matter, despite partial and delayed payments by the allottee, 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 has not set up the industry and further he has not deposited the amount in pursuance of the aforesaid notices.

11. In Kamla Nehru Memorial Trust and Others v. U.P. State Industrial Development Corporation Limited and Others (Supra) the Apex Court has upheld the cancellation of a land allotment to the Kamla Nehru Memorial Trust (KNMT) by UPSIDC and affirmed that UPSIDC, being a statutory body, had the right to cancel the allotment due to persistent payment defaults by KNMT. 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.

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.

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.

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

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.

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.

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.

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.

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

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.

36. The actual allotment or any offer thereof made by UPSIDC in favour of M/s Jagdishpur Paper Mills Ltd (Respondent No.3) for the Subject Land is also declared to be illegal, contrary to public policy and is consequently annulled. However, if any earnest money or any payment has been received from the said prospective allottee, the same is directed to be refunded along with interest at the rate granted by the Nationalized Banks.

37. The appeals are accordingly dismissed with no order as to costs."

12. In the aforesaid facts and circumstances, we do not find any plausible reason to interfere with the impugned orders. 13. Accordingly, the writ petition is dismissed.

(Kunal Ravi Singh,J.) (Mahesh Chandra Tripathi,J.)

November 11, 2025

RKP/SP/