M/S Chanana Brothers vs Commissioner Of Industries, ...
2009 Latest Caselaw 2397 Del

*                     IN THE HIGH COURT OF DELHI AT NEW DELHI

                                                                 Judgment reserved : 18.04.2009
                                                              Judgment pronounced : 01.07.2009

+                                     W.P. (C) 9939/2006

       M/S CHANANA BROTHERS                                                 ..... Petitioner

                              Through: Mr. Sanjay Jain, Sr. Advocate
                              with Mr. P.K. Mullick and Mr. Keshar Ranjan, Advocates.

                                             versus

       COMMISSIONER OF INDUSTRIES, GOVT. OF NCT OF DELHI.                     ..... Respondent

Through: Mr. Darpan Wadhwa with Ms. Sheena Iype, Advocates.

CORAM:

HON'BLE MR. JUSTICE S. RAVINDRA BHAT

1.     Whether the Reporters of local papers may be          Yes
       allowed to see the judgment?

2.     To be referred to Reporter or not?                    Yes

3.     Whether the judgment should be reported in            Yes
       the Digest?

HON'BLE MR. JUSTICE S. RAVINDRA BHAT
%

1. In this writ proceeding, the relief sought is for a direction to the respondent to earmark

two 2443 square yards plot in Phase-IV, Okhla Industrial Estate and allot it to the petitioner.

2. The facts necessary for deciding the case are that the petitioner was allotted a plot,

being no. 236 in Okhla Industrial Estate, Phase-III of an area of 2004 square yards, on lease hold

basis by the respondent. The allotment was for the purpose of manufacture of conduit pipes,

tubes, hospital, and office furniture. The respondent had executed a lease deed on 26.02.1971

with the petitioner; the consideration was Rs.60,120/-. Clause 4A of the lease deed stipulated

W.P. 9939/2006 Page 1 that an industrial building had to be constructed upon the plot by 20.02.1973. It is not in

dispute that on 25.08.1973, a Show Cause Notice was issued by the respondent, to the

petitioner, asking it to disclose why the lease ought not to be cancelled; the petitioner

apparently replied, contending about the delays in the sanction of building plan, obtaining

terms for construction material etc. It submitted that these constraints had impelled the

Government to issue a general amnesty in respect of all leases executed upto 1975, till 1978, so

far as the stipulation for timely construction was concerned. On 28.08.1975, the respondent

cancelled the lease. Accordingly, the petitioner, without attempting to thwart the authorities'

action, handed over possession. On 03.02.1976, the said plot no. 236 was allotted to one M/s.

Luxor Metallic Pvt. Ltd. According to the petitioner, the unseemly haste in cancellation of plot

and its allotment to M/s. Luxor Metallic Private Limited was investigated by the Central Bureau

of Investigation (CBI).

3. It is alleged that besides the petitioner's case, there were other instances where

allotment of plots in the Okhla Industrial Estate were cancelled due to non-construction within

the stipulated time. In those cases, however, there was no re-allotment to any third party and

all the nine plots were allotted to original allottees on payment of penal interest. The petitioner

has given the particulars of those allottees, i.e. General Engineering Corporation (Plot No.211),

Rangersons Industries (Plot No. 241), Ideal Traders (Plot No. 234), Phoenix Radio (Plot No. 249),

Nulite Engineering Corporation (Plot No. 225), Matchless Industries (Plot No. 216), Armour

Cycle Industries, G.S. Kashyap & Sons and Bombay Ammonia Private Limited. These plots, says

the petitioner, were restored to the original allottees by the Lt. Governor between 1996 and

1998. It is submitted that four of those plots had been merged in Phase-III after the

W.P. 9939/2006 Page 2 cancellation, but at the time of their restoration, they were again sub-divided and given back to

the original allottees.

4. The petitioner submits having written and represented to the respondent authorities

first on 11.04.1979 and later, continuously, through a series of representations. It relies upon

several official notings, including those dated 15.05.1979, 28.10.1980, 06.01.1981, 17.05.1982

and 03.06.1982. It was submitted that in August 1985, the Central Government invited

applications for allotment of plots in Phase-IV. The petitioner applied for allotment on

14.08.1985 in lieu of restoration of his plot. It relies upon a noting in the official files of the

respondent dated 05.08.1986, indicating that departmental thinking that the original plot No.

236 ought to be restored to it. The relevant part of the said note is as follows:

"Plot no. 236 OIE was allotted to M/s Chanana Bros. during 1971 to meet their expansion needs. The lease was terminated under the orders L.G. during 1976 but main file was not returned for the CBI as yet, but lease was determined under the L.G. Delhi orders by 1976. The reasons of determination of lease work that the lessee did not construct upon the plot in the stipulated period. Similar action with some other cases was taken. The representation of the ex allottee had been considered and rejected. However the deptt. had decided to reconsider these cases when plots is phase IV are offered for the allotment. The firm had applied for allotment of plot in phase IV at Okhla Industrial Estate New Delhi when the department had invited the applications. The case of the unit was considered in Trade of Tool Room with computerized Machines by the Committee appointed by the DI. The final decision for allotment of plot is still awaited. May please see the above position of the case and if agreed learned DI may be informed accordingly has required.

Submitted for orders please."

5. The petitioner further relies on file notings, made on 15.01.1987 and 21.01.1987, where

the official respondent was of the opinion that his case for restoration should be considered.

Reliance is placed upon a detailed note of 05.03.1997 which dealt with cases of several parties

W.P. 9939/2006 Page 3 and recorded that although the petitioner had applied for a plot in lieu of the cancelled one, its

application was treated as fresh though allotment could not be made. It is contended that this

note establishes that the other concerns whose allotments were cancelled, were nevertheless

given the benefit of restoration without having to approach the Court. In one instance, though

the Court did not give relief, the Lieutenant Governor, having regard to all the circumstances,

allowed the restoration.

6. Further to claim the respondent's inaction in regard to restoration of its plot, the

petitioner relies upon notings in the official files of the respondent dated 28.02.2003,

15.09.2003 and 23.08.2004, which recorded the injustice meted out to the petitioner, but

nevertheless did not result in the restoration of the cancelled plot or allotment of a new plot. In

this regard, it is submitted that the authorities' plea was that according to the prevalent

guidelines, if a concern or any of its partners had a plot and upon being given another plot, the

second plot could not be permitted. The petitioner attacks this ground as baseless, contending

that in the case of other concerns, restoration was permitted despite their possessing another

plot. The petitioner gives the instance of M/s. General Engineering Corporation (Plot No.211),

Rangersons Industries (Plot No. 241) and Ideal Traders (Plot No. 234), who were holding

additional plots at the time of restoration of their original/cancelled plots.

7. It is submitted that the petitioner has been hostilely discriminated and for unjustifiable

reasons, not given the benefit of re-allotment of the cancelled plot or allotment of another plot

in lieu of the previously leased plot. It is submitted that the primary cause for cancellation of

allotment was entirely arbitrary because the petitioner's case fell within the existing amended

W.P. 9939/2006 Page 4 guidelines, which required that the allottees could construct on the plot, within an extended

period of seven years from the date of allotment. Such being the case, the petitioner could

have built upon the plot till 1978. Instead the authorities unilaterally went back upon the

amnesty circular and cancelled the plot. The petitioner at that time, without being obstructive,

handed over the plot. It, however, continued to represent for restoration. In the case of the

other lessees too, allotments were cancelled on the ground of non-construction. However,

without their having to approach the Court, the Lt Governor, at different points of time,

between 1996 and 1998, restored the allotments. In these circumstances, the petitioner has

been unfairly dealt with; the respondent's inaction in this regard is violative of Article 14 of the

Constitution of India.

8. It is next submitted that the respondent's distinction between cases of the other

allottees and that of the petitioner, i.e. that possession had not been handed over in the case of

the former is specious and irrelevant. Being a law abiding citizen, the petitioner adopted a

peaceful approach and handed back possession of its plot, upon cancellation of allotment. That

could not be held as a disqualifying criterion, disentitling it to restoration or other similar

benefits. It is submitted that besides, the other plea relied upon by the respondent not to

restore allotment or grant a fresh allotment is that the petitioner's concern/partners had

another plot. In this regard, it is submitted that the records before the Court have established

that out of nine, at least three parties had been allotted other plots at the time of restoration.

9. The petitioner contends that despite numerous favourable notings on the official

records, the benefit of restoration or allotment of a plot in lieu of the cancelled plot was denied

W.P. 9939/2006 Page 5 for no sustainable reason. The petitioner contends that every action of the State should be

backed by reason and should be fair. The respondent's actions, it is submitted, smack of

unfairness and the reason given for plot denial, irrational.

10. The respondent resists the writ petition, contending that the petitioner has approached

this Court belatedly. The plot in question was cancelled in 1975 whereas the petitioner has

approached the Court more than 30 years later in 2006. It is submitted that more importantly,

the petitioner handed over the plot voluntarily at the time of its cancellation. The respondent

contends that this fact is the single most important distinguishing aspect form the case of nine

other plot owners who had faced similar cancellation of their leases. In the other cases, the plot

continued to be in possession of the lessee till it was eventually restored between 1996 and

1998. It is submitted that the petitioner never chose to challenge the allotment of the same

plot to M/s. Luxor Metallic Private Limited, which has now been in possession for over 30 years.

11. The respondent disputes that the petitioner was ineligible for the benefit of general

amnesty. It is stated that the scheme came into force after cancellation of the petitioner's plot

and therefore, its benefit could not be availed of in the present case.

12. The respondents do not dispute that there are certain file notings in the petitioner's

favor. However, it is contended that mere existence of such favorable comments on the record

does not clothe the petitioner with any enforceable, or vested right to claim benefits in the

absence of a formal determination or decision by the official or competent authority nominated

in this regard. Reliance is placed upon the judgment reported as State of Bihar & Others v.

W.P. 9939/2006 Page 6 Kripalu Shankar & Others 1987 (3) SCC 34; Jagdish Narain v. State of Bihar 1973 (1) SCC 811

and Karnataka Power Corporation v. K.Thangappan 2006 (4) SCC 322.

13. The respondent submits that the guidelines of 1988 stipulated that if the family member

of a concern is allotted a plot, another family member or the concern cannot be given that plot.

The contention made here is that this policy curtailed the discretion of the competent authority

in allotting a fresh plot, since one of the partners of the petitioner had acquired a plot.

14. The above narrative would show that the petitioner's grievance is essentially that it has

been discriminated against in regard to the allotment of a plot after the original cancellation in

1975. The petitioner's contention is that the original cancellation was not justified since an

amnesty circular had extended the period within which construction could be completed.

Interestingly, this plea had been denied by the respondent. The petitioner has also not placed

on record any material disclosing when such amnesty scheme was published.

15. According to the pleadings on record - which include copies of official notings, it is an

undisputed position that the allotment of the concerns of plots, were cancelled on the ground

of non-construction within the stipulated period. Significantly, in those cases, possession had

not been received back or handed over to the lessor/respondent. The petitioner, however, had

handed over possession. It is also undisputed that the original plot in question, No. 236 was

leased to another concern, M/s. Luxor Metallic Private Limited, in 1976. That allotment

significantly again neither has the cancellation (of the petitioner's plot) nor the allotments to

M/s. Luxor Metallic Private Limited being challenged. In fact, the latter has not been made a

party in these proceeding. The king-pin of petitioner's contention is that there is little or no

W.P. 9939/2006 Page 7 distinction between its case and those of the other lessee, whose allotments were cancelled

but subsequently restored between 1996 and 1998. It further contends that the relatives or

partners of three such concerns were like in its case lessees of other plots in the Okhla

Industrial Estate.

16. The first question to be considered is whether the petitioner's claim of unfair treatment,

based on file notings can be considered by the Court. It is no doubt true that there are several

file notings, which seemingly recognized the petitioner's plight, and apparently also noted that

injustice was meted out to it, originally in 1975. Apparently, the petitioner also applied for

allotment of plot in 1985 - however, nothing matured at that stage. The question is to what

extent can the petitioner rely upon such file notings to bind down the respondent.

17. In Bachhittar Singh v. State of Punjab 1962 Supp. (3) SCR 713, a similar question arose

for consideration of the Supreme Court. It was observed that

"the question therefore, is whether he did in fact make such an order. Merely writing something on the file does not amount to an order. Before something amounts to an order of the State Government, two things are necessary. The order has to be expressed in the name of the Governor as required by Clause (1) of Article 166 and then it has to be communicated. As already indicated, no formal order modifying the decision of the Revenue Secretary was ever made. Until such an order is drawn up, the State Government cannot, in our opinion, be regarded as bound by what was stated in the file.

In Kripalu Shankar (supra), it was held that:

"Notings in a file, not only of officers but even that of a Minister will not constitute an order to affect others unless it is done in accordance with Article 166(1) and (2) and communicated to the person concerned in person."

18. The above decisions have been relied upon in Bahadur Singh Lakhubhai Gohil v. Jagdish

Bhai. M. Kamalia 2004 (2) SCC 65 and by this Court in C.J. International Hotels Limited. V. New

W.P. 9939/2006 Page 8 Delhi Municipal Committee AIR 2001 (Del) 435. Most recently, in Sethi Auto Service Station v.

DDA, (2009) 1 SCC 180, the Supreme Court held that:

"It is trite to state that notings in a departmental file do not have the sanction of law to be an effective order. A noting by an officer is an expression of his viewpoint on the subject. It is no more than an opinion by an officer for internal use and consideration of the other officials of the department and for the benefit of the final decision-making authority. Needless to add that internal notings are not meant for outside exposure. Notings in the file culminate into an executable order, affecting the rights of the parties, only when it reaches the final decision-making authority in the department, gets his approval and the final order is communicated to the person concerned."

19. In this case, the petitioner undoubtedly appears to have represented on many occasions

to the respondents in the last 25 years or so. Its contention is that barring certain details, the

case was similar to those of the 9 other lessees, whose allotments were cancelled. Copies of the

official record produced in the form of extracts of file notings, no doubt, are favorable to it and

even in some cases recommend positive action towards restoration. It is, however, equally true

that no official order was made in that regard and no official communication was addressed to

the petitioner. Yet, in the ultimate analysis, the competent authority declined issuing any order.

These notings clearly did not amount to orders enforceable under law. In such circumstances,

the Court is constrained to hold that the notings did not confer any vested right as long as they

remained as such - a part of the decision-making process. They were reflective of the prevailing

thinking regarding extending the benefit of allotment to the petitioner. As such, the petitioner

cannot contend that denial of allotment of another plot, despite file notings, is arbitrary.

20. The next question is whether the respondent acted arbitrarily in distinguishing the

petitioner's case. The respondent's contention here is two-fold. One, that the petitioner had

handed back possession of the plot, which was given to another allottee more than 30 years

W.P. 9939/2006 Page 9 ago and consequently that in any case, after 1988, fresh allotment was not possible since the

petitioner's partner or family member had been allotted another plot. The policy mandates that

in case of partners in two concerns or family members, there cannot be two allotments. As far

as the first aspect is concerned, although facially, the distinction sought to be made out

between those who handed over possession and those who did not, appears to be irrelevant,

one cannot be, however, unmindful of the other circumstances in this case. The relief of

restoration or fresh allotment, sought after more than two decades, by an analogy of equal

treatment - and through the present action, after 30 years, is a claim for exercising

discretionary jurisdiction on equitable principles. As observed earlier, the petitioner has not

challenged the legality of the cancellation; it has also not impleaded the third party, who was

allotted the plot, or challenged the allotment made to it. In the circumstances, the Court has to

assume that the original action, i.e. allotment cancellation was arbitrary and illegal (without

even having the benefit of the amnesty guidelines, which are concededly not part of the record)

and then proceed to make a restitutionary order. The distinction, in this context, between

those lessees who handed back the possession peacefully and those who did not, but waited

for a final order, becomes important. The petitioner's argument, is that all the ten allottees,

including itself stood on the same footing when the cancellation took place. However, the

petitioner did not resist the move in any manner and handed back possession in 1975 itself. In

these circumstances, the Court is not persuaded to hold that the distinction made between this

case and those of the other non-allottees is based on irrelevant grounds.

21. As far as the application of the guidelines is concerned, no doubt, the petitioner

contends that in the case of three other allottees, whose plots were restored, the partners or

W.P. 9939/2006 Page 10 relatives had been allotted plots earlier. However, in the case of those allottees, what was done

by the respondent was to restore the allotment. There was no question of fresh allotment of

any plot as the petitioner seeks now, in these proceedings.

22. The Court is further of the opinion that even if the petitioner were to be given benefit of

doubt till 1998 (i.e. the last instance when restoration of the allotment took place in case of

other lessees), no attempt has been taken to explain why a further eight-year delay took place

in instituting the present writ proceedings. It has been often said in writ proceedings that if

merits are sound, yet the Court can decline exercising its discretionary jurisdiction if the action

is hit by delay and laches. The present case is one such instance where the writ petition is highly

belated; the Court would not be exercising discretion soundly if it were to entertain

proceedings and grant the relief claimed.

23. For the above reasons, the writ petition cannot succeed; it is accordingly dismissed

without any order as to costs.

                                                                     (S. RAVINDRA BHAT)
                                                                            JUDGE

July 01, 2009
'ajk'




W.P. 9939/2006                                                                             Page 11