Gijas Rubbers Pvt. Ltd vs The Secretary To Government
2021 Latest Caselaw 14190 Ker

               IN THE HIGH COURT OF KERALA AT ERNAKULAM
                                PRESENT
            THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR
                                   &
               THE HONOURABLE MR. JUSTICE SHAJI P.CHALY
        THURSDAY, THE 8TH DAY OF JULY 2021 / 17TH ASHADHA, 1943
                          WA NO. 846 OF 2021
    AGAINST THE ORDER/JUDGMENT IN WP(C) 10441/2020 OF HIGH COURT OF
                           KERALA, ERNAKULAM
APPELLANT/PETITIONER IN W.P.(C):

             GIJAS RUBBERS PVT. LTD
             REPRESENTED BY ITS MANAGING DIRECTOR ASHOKAN MADHAVAN,
             DEVLOPMENT AREA, EDAYAR,DIST ERNAKULAM - 683 110
             BY ADV K.REGHU KOTTAPPURAM


RESPONDENTS/RESPONDENTS IN W.P.(C):

1            THE SECRETARY TO GOVERNMENT
             REVENUE (A) DEPARTMENT, SECRETARIAT,
             THIRUVANANTHAPURAM, PIN -695 001
2            THE GENERAL MANAGER, DISTRICT INDUSTRIES CENTRE,
             KAKKANAD, ERNAKULAM - 682030
3            THE DIRECTOR OF INDUSTRIES AND COMMERCE,
             GOVT. OF KERALA, SECRETARIAT,
             THIRUVANANTHAPURAM - 695001
4            THE DISTRICT COLLECTOR, ERNAKULAM DISTRICT,
             CIVIL STATIION, KAKKANAD - 682030


             SRI.ARAVIND KUMAR BABU, SENIOR GOVERNMENT PLEADER FOR
             R1, R3 & R4


       THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 08.07.2021,
THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:
 WA.No.846 OF 2021                            2




                                 JUDGMENT

Dated this the 8th day of July 2021

SHAJI P.CHALY,J

This appeal is preferred by the petitioner in W.P.(C) No.10441/2020,

challenging judgment of the learned Single Judge dated 25.3.2021,

whereby the learned Single Judge dismissed the writ petition by declining

the following reliefs sought for by the appellant:

(i). Issue a Writ of Certiorari or any other appropriate Writ calling for the record of the case leading to Exhibit P5 Order of the Govt. and quash the same to the extent of stipulating condition to furnish private property of the petitioner towards collateral security simultaneous to mortgaging the assets in the Industrial Unit of the petitioner including land , structures, plant and machineries etc.

(ii). Issue a Writ of Mandamus or any other appropriate Writ directing the 1st respondent to incorporate correction in Exhibit P5 order to the extent of changing the description of the petitioner from proprietor "Gijas Rubbers to Managing Director "Gijas Rubbers Pvt. Ltd.".

(iii) Issue a Writ of Mandamus or any other appropriate Writ directing the 1st respondent to issue fresh order permitting mortgaging the assets of the petitioner company including land, building and machineries for availing loan for the expansion of the Petitioner company as well as for availing term loan as in the case of Exhibit P2 order passed earlier, from any financial institution approved by Reserve Bank of India, without insisting to furnish private property of petitioner towards collateral Security to the loan.

(iv) Issue any other appropriate Writ deemed fit and proper in the circumstances of the case

(v)Award cost of the petition.

2. In the impugned judgment, learned Single Judge declined the reliefs

after holding that the assignment of the property made to the appellant as

per the assignment deed is subject to certain riders and conditions thereby

enabling the statutory authority to impose required conditions to grant

permission to mortgage the property assigned for industrial purposes to

secure loan from the financial institutions. It is thus challenging the legality

and correctness of the judgment, the appeal is preferred. Basic material

facts for the disposal of the writ appeal are as follows;

3. Appellant is a company registered under the Indian Companies Act

and established an industry in the land situated in an industrial area,

admeasuring 30.50 cents comprised in various survey numbers of

Kadungallur Village, Paravur Taluk, Ernakulam District, as per the

assignment extended to the appellant vide patta Nos.10477 and 26473

dated 4.7.2005 and 10.11.2009 under the provisions of law constituted for

the purpose. According to the appellant, appellant has constructed a

building having a plinth area of 7500 Sq.ft for housing the industry and the

remaining area is used for parking. Appellant is engaged in the manufacture

of reclaimed rubber by converting rubber waste by employing 10 workers.

4. The grievance of the appellant is that when the appellant sought

permission to secure a term loan by mortgaging the properties in question,

it was granted as per the conditions imposed in Exhibit P5 order dated

11.3.2020 by the Additional Secretary to Government. The condition

imposed is that the private property of the owners of the unit is to be

furnished as collateral security while mortgaging the patta land granted for

the industrial purpose. It is primarily aggrieved by the aforesaid condition

imposed, the writ petition was filed.

5. The learned Single Judge after conducting a threadbare analysis of

the provisions of the Kerala Government Land Assignment Act, 1960 and

the Assignment of Government Land for Industrial Purpose Rules, 1961,

had arrived at the categoric finding that even though an assignment is

granted by the Government, it is subject to the conditions prescribed in the

patta and also guided by the provisions of the Act and Rules specified

above. Learned counsel for appellant submitted that the conditions

imposed by the Government to provide private property of the owner as

security is not contemplated anywhere in the Act and the Rules and also in

the patta issued by the Government. However, it was found by the learned

Single Judge that in Exhibits P13 & P14 patta issued to the appellant, a

condition has been imposed that property shall not be alienated or

encumbered without the prior permission of the Government.

6. On the other hand, learned Senior Government Pleader submitted

that since the assignment is granted by the Government as per the

procedure contemplated under Act, 1960 and the Rules, 1961, appellant

cannot turn around and challenge the conditions incorporated in the

permission granted for mortgaging the land in question. As pointed out by

the learned Single Judge, as per rule 2(a) of Rules, 1961, alienation

includes sale, gift, will, mortgage, hypothecation, lease or transfer of

possession. Moreover, rule 11 of Rule, 1961 categorically specifies that land

assigned under the Rules, 1961 shall be heritable but it shall not be

alienated or encumbered in a manner without the prior permission in

writing of the Government.

7. On a conjoint reading of the aforesaid rules, it is clear that even if

the property is to be encumbered as a mortgage, the permission of the

Government is required. Since the rules make it clear that permission is

required from the Government, it is a clear indicator that Government is

vested with power to grant permission on imposing sufficient conditions so

as to protect the interest of the Government in regard to the property as

well as in the matter of utilisation of the property for industrial activities. It

is admitted by the appellant that appellant was intending to take a term

loan from a financial institution by mortgaging the property and a reading

of Exhibit P4 order would make it clear that the property was expected to

be mortgaged for securing a loan of Rs.25 lakhs towards the working

capital and Rs.5 lakhs as term loan. Therefore, the Government thought it

fit to grant permission by imposing a condition so as to protect the larger

public interest of maintaining the industrial area, with industries itself. The

Government must have been thoughtful of the fact that if and when the

appellant is defaulting repayment of the amounts to the bank, there is

likelihood of the bank proceeding against the property and the

consequences that may follow. The said apprehension of the Government

is clear from Exhibit P5 permission granted, in which it is stated that, if

default is committed by the patta holder in repayment of loan availed by

mortgaging the patta land, it is to be clarified by the financing institution in

the sale notice that the land can only be used for industrial purpose by the

auction purchaser and that permission will be granted only for functioning

industrial unit in the land, and further that the auction purchaser will be

granted only fresh industrial patta under the Rules, 1961. The Government,

also would have been conscious of the fact that in such a situation it

cannot impose too much of restrictions there being no privity of contract to

saddle a third person, making the situation more complex, and detrimental

to the avowed policy of the Government in regard to industrialisation and

maintenance of industrial areas.

8. Therefore, evaluating the facts, law and circumstances as

deliberated above, we are of the considered opinion that the learned Single

Judge was right in declining interference with Exhibit P5 order passed by

the Government and thereby dismissing the writ petition, since the

materials on record disclose that there are no jurisdictional error or other

legal infirmities, justifying us to do so.

Resultantly, writ appeal fails, accordingly it is dismissed.

Sd/-

S.MANIKUMAR

CHIEF JUSTICE

Sd/-

                                                  SHAJI P.CHALY

smv                                                    JUDGE