Orissa High Court

Saroj Panda vs Odisha Industrial .... Opposite Party ... on 10 September, 2025

Author: Sanjeeb K Panigrahi

Bench: Sanjeeb K Panigrahi

                                                                    Signature Not Verified
                                                                    Digitally Signed
                                                                    Signed by: BHABAGRAHI JHANKAR
                                                                    Reason: Authentication
                                                                    Location: ORISSA HIGH COURT, CUTTACK
                                                                    Date: 11-Sep-2025 18:36:44




                   IN THE HIGH COURT OF ORISSA AT CUTTACK

                              W.P.(C) No.14664 of 2016
        (In the matter of an application under Articles 226 and 227 of the
        Constitution of India, 1950).

         Saroj Panda                                ....               Petitioner (s)

                                         -versus-

         Odisha Industrial                          ....         Opposite Party (s)
         Infrastructure Development
         Corporation, Khurda & Anr.

      Advocates appeared in the case through Hybrid Mode:

         For Petitioner (s)          :                       Mr. G.N. Mishra, Adv.



         For Opp. Party (s)          :                   Mr. Pronoy Mohanty, Adv..

                   CORAM:
                   DR. JUSTICE SANJEEB K PANIGRAHI

                        DATE OF HEARING:-21.08.2025
                       DATE OF JUDGMENT:-10.09.2025
      Dr. Sanjeeb K Panigrahi, J.

1. In this Writ Petition, the Petitioner seeks a direction from this Court to

quash the cancellation and eviction order dated 11.08.2016, declare him

absolute owner by virtue of OSFC sale under Section 29(2) SFC Act, and

direct the IDCO to effect formal lease transfer.

I. FACTUAL MATRIX OF THE CASE:

2. The brief facts of the case are as follows:

Location: ORISSA HIGH COURT, CUTTACK

(i) The property in dispute is an IDCO shed situated at Balasore Industrial

Estate. It was originally leased in 1994 on an outright purchase basis for

establishment of a biscuit manufacturing unit, with a lease deed

executed on 30.11.1994.

(ii) The lessee mortgaged the property to Odisha State Financial

Corporation (OSFC) with IDCO's consent. Upon default in repayment,

OSFC invoked Section 29 of the State Financial Corporations Act, 1951,

and took over the unit.

(iii) OSFC initially sold the unit to one purchaser in 1999, later cancelled the

sale in 2000, and subsequently sold it to the present petitioner through

a sale letter in 2006. Possession was delivered on 29.11.2008.

(iv) The petitioner, after purchase, applied for transfer of the lease in his

favour. IDCO's Divisional Head forwarded his application dated

02.12.2010 along with possession letter, sale documents, and a project

report for Hotel Raghunath.

(v) The petitioner furnished documents in 2015, including communications

regarding the NOC and DIC acknowledgement.

(vi) IDCO issued notices in 2015 and 2016 citing breaches of terms,

including non-utilisation of property for intended industrial purpose,

alleged misutilisation for residential and godown activities, sub-letting,

and unauthorised construction.

(vii) The petitioner replied to the notices, but on 11.08.2016, IDCO passed an

order cancelling the allotment/lease and declaring the petitioner liable

for eviction under the OPP (EUO) Act, 1972.

Location: ORISSA HIGH COURT, CUTTACK

II. SUBMISSIONS ON BEHALF OF THE PETITIONER:

3. Learned counsel for the Petitioner earnestly made the following

submissions in support of his contentions:

(i) The petitioner argues that once OSFC sold the property under Section

29(2) of the SFC Act, ownership vested absolutely in him free of

encumbrances, and IDCO/opposite parties had no jurisdiction to cancel

or evict.

(ii) The requirement for fresh lease transfer was redundant and only a

formality; still, the petitioner complied by submitting documents

sought (Tourism Department NOC and DIC acknowledgement), which

were ignored.

(iii) The eviction order dated 11.08.2016 is arbitrary, vague, and mechanical,

passed without any proper enquiry or opportunity of hearing, thereby

violating principles of natural justice.

(iv) Opposite Party No.2 had no authority to cancel lease or order eviction,

as such power rests only with IDCO as a Corporation. The impugned

action is ultra vires and without jurisdiction.

(v) The alleged grounds of breach of terms are baseless since statutory dues

were paid and documentary requirements fulfilled. The order is

punitive despite petitioner's compliance.

(vi) The petitioner asserts violation of his constitutional right to property, as

he had purchased the unit for valuable consideration and has been in

lawful possession since 2008. He invokes writ jurisdiction for quashing

of the impugned order and formal transfer of allotment/lease in his

name.

Location: ORISSA HIGH COURT, CUTTACK

III. SUBMISSIONS ON BEHALF OF THE OPPOSITE PARTIES:

4. The Learned Counsel for the Opposite Parties earnestly made the

following submissions in support of his contentions:

(i) The cancellation and eviction action was not arbitrary but strictly in

accordance with the Odisha Industrial Infrastructure Development

Corporation (OIIDC) Act, 1980 and the OPP (EUO) Act, 1972, both

empowering IDCO to ensure industrial lands are used only for intended

purposes.

(ii) The petitioner is guilty of serious negligence, having delayed transfer

applications and failed to produce essential approvals like NOC from

Tourism Department and EM-I from DIC. His requests for more time

show lack of readiness to comply.

(iii) The petitioner misutilised the industrial property by using it for

residential and go-down purposes and sub-letting to other entities,

amounting to breach of the allotment's core conditions. Unauthorized

construction further compounded violations.

(iv) IDCO repeatedly issued notices and reminders, but the petitioner failed

to comply, leaving no option but to proceed under the OPP (EUO) Act

for eviction.

(v) The petitioner has suppressed material facts, misused the plot, and has

not approached the Court with clean hands. Therefore, he is disentitled

to equitable relief.

(vi) The writ petition is devoid of merit, the allegations of arbitrariness are

unfounded, and the prayer for quashing of the cancellation/eviction

order deserves outright dismissal.

Location: ORISSA HIGH COURT, CUTTACK

IV. COURT'S REASONING AND ANALYSIS:

5. Heard Learned Counsel for the parties and meticulously analysed the

documents placed before this Court.

6. The petitioner's first contention, that the sale of the unit by OSFC under

Section 29(2) of the State Financial Corporations Act vested absolute

ownership in him, leaving IDCO with no say, is misconceived. In law,

an auction purchaser of a leasehold acquires only the interest of the

original lessee, subject to all attendant conditions of the lease and the

lessor's rights. The IDCO shed in question was allotted under the

Odisha Industrial Infrastructure Development Corporation Act, 1980

("OIIDC Act") on specific terms restricting its use to approved

industrial purposes. The OSFC's sale did not and could not convey a

greater title than that held by the defaulting lessee. In other words, the

petitioner stepped into the shoes of the lessee and remained bound by

the OIIDC Act and the lease terms, including the requirement to obtain

IDCO's approval for transfer and to use the plot only for the sanctioned

industrial project. His possession without formal transfer of lease was

therefore permissive at best, and certainly not immune from IDCO's

regulatory control.

7. It is undisputed that since taking possession in 2008, the petitioner

failed to establish any industrial unit on the plot. Instead of operating a

biscuit manufacturing unit (for which the land was originally allotted)

or any approved industry, the petitioner proposed a hotel project and

admittedly used the premises for non-industrial purposes like

residential accommodation and as a go-down, even sub-letting portions

to third parties. These actions were in clear breach of core conditions of

Location: ORISSA HIGH COURT, CUTTACK

allotment. Statutory industrial development corporations are

empowered, indeed obligated, to ensure that allotted lands are utilized

for the intended industrial objectives and not diverted for other uses.

8. In the present case, IDCO gave the petitioner ample time (several years)

and repeated opportunities to comply: his application for lease transfer

remained pending as IDCO awaited necessary clearances (Tourism

Department NOC for the hotel project and DIC registration) and

monitored the status. Despite this indulgence, the petitioner neither

commenced the approved industrial activity nor produced the requisite

approvals in time. Instead, he allowed the plot to remain unutilized for

its sanctioned purpose and undertook unauthorised constructions and

sub-letting, violating the allotment's fundamental conditions.

9. The Supreme Court and various High Courts have consistently held

that such serious non-performance of mandatory allotment conditions

justifies cancellation of the allotment and resumption of the land by the

authority. In fact, the Supreme Court in the case of Kamla Nehru

Memorial Trust v. U.P. State Industrial Development Corporation

Limited and Ors.1 recently reiterated in the context of an industrial land

allotment, allowing deliberate default to persist would undermine the

entire framework of land allocation. Therefore, treating an allottee as

defaulters and cancelling the allotment is fully justified and necessary

to preserve the integrity of the allotment process. The relevant excerpts

are produced below:

"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

2025 INSC 791.

Location: ORISSA HIGH COURT, CUTTACK

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."

10. The petitioner's contention that Opposite Party No.2 (an IDCO official)

had no authority to cancel the lease or initiate eviction is not borne out

by the record. The impugned order dated 11.08.2016 was issued under

the provisions of the OIIDC Act, 1980 and the Orissa Public Premises

(Eviction of Unauthorised Occupants) Act, 1972 ("OPP Act"). Under

these statutes, IDCO, a statutory corporation, acts through its

authorized officers. IDCO's Estate Officer is empowered to cancel the

allotment for breach of conditions and to initiate eviction proceedings

against an unauthorised occupant of IDCO property.

11. Here, after the petitioner persistently failed to remedy the breaches,

IDCO followed due process by issuing show-cause notices (in 2015 and

2016) detailing the alleged violations. The petitioner submitted replies,

which have been duly considered. An eviction case was then instituted

under the OPP Act, and the Estate Officer passed the final order on

11.08.2016 cancelling the lease/allotment and declaring the petitioner

liable to be evicted. The materials show that the petitioner was given

adequate opportunity to be heard during this process; indeed, the Estate

Officer's order was passed only after affording the petitioner due and

Location: ORISSA HIGH COURT, CUTTACK

sufficient opportunity of hearing. There is nothing to indicate that the

mandatory procedure, notice, opportunity to show cause, and reasoned

order, was not followed. Hence, the allegation of violation of natural

justice is devoid of merit.

12. It is also noteworthy that the OPP Act provides a statutory remedy of

appeal against an eviction order. The petitioner, instead of availing any

such remedy, directly invoked this Court's writ jurisdiction. Be that as

it may, the Court has independently reviewed the impugned action and

finds that IDCO acted within its jurisdiction and in accordance with

law. The cancellation of the allotment was carried out under the

authority of the OIIDC Act/Regulations governing industrial estates,

and the eviction order was passed by a competent Estate Officer under

the OPP Act. No procedural infirmity or ultra vires action has been

demonstrated in the conduct of the opposite parties. The right to

property under Article 300A of the Constitution, which the petitioner

invokes, is not absolute; it is subject to the "authority of law". In this

case, the deprivation of the petitioner's possessory interest has the

sanction of law - namely, the terms of the statutory lease and the OPP

Act eviction mechanism. Therefore, his Article 300A rights have not

been violated.

13. A writ court, in exercise of its extraordinary equitable jurisdiction, will

not intervene to protect a litigant's purported rights when his own

conduct is tainted by breaches and neglect of obligations. Here, the

petitioner has approached the Court seeking to quash IDCO's

cancellation order despite himself being in egregious default of the

essential conditions of allotment. He remained in possession of a public

Location: ORISSA HIGH COURT, CUTTACK

industrial property for over eight years without establishing the

promised industry, and even turned the property to personal and

unauthorised uses. He also delayed compliance with formalities for

transfer and approvals, and even after IDCO's show-cause notices, no

corrective steps were taken. In these circumstances, the petitioner

cannot be said to have come to the Court with clean hands.

14. In fact, the Supreme Court in the case of Industrial Dev. Corpn. V.

Mesco Kalinga Steel Ltd.2 squarely held that an allottee who, by his own

inaction, fails to fulfil the basic terms of lease has forfeited the right to

claim any further rights in the property. The transaction in such a case

becomes void due to the lessee's negligence, and no equity lies in favor

of one who has failed to make any development of worth on the land.

The relevant excerpts are produced below:

"The transaction became void, due to Mesco's own lapse and negligence, and it has forfeited the right to get the lease deed executed. After taking possession, it could not have waited for so many years. What was required to be performed by Mesco was not done. It also failed to make any development of worth on the land. We find no force in the submission that they have spent a sum of Rs.22 crores as they were unable to explain how they spent the said amount, and only a bald statement was made that they have constructed a boundary wall. It has not been established that a sum of Rs.22 crores had been spent by Mesco. Apart from that, having failed to execute the lease deed, they were to invest at their own peril. In case they have invested some amount, on that basis they cannot claim any legal or equitable right."

AIR ONLINE 2017 SC 290

Location: ORISSA HIGH COURT, CUTTACK

15. The Court sternly further observed that there is no legal or equitable

basis to aid a defaulting allottee, and a writ is not issued to perpetuate

an illegality. The relevant excerpts are produced below:

"Thus, High Court misadventured into holding the action of IDCO of resumption of land to be illegal. There was no equitable or legal consideration in favour of the respondent herein and a writ is not issued to perpetuate an illegality. Not only the conduct of Mesco was unfair, third party rights had also intervened. Lawful method had been exercised for resumption of land and cancellation of letter of handing over the possession."

16. This Court is in full agreement. To accede to the petitioner's prayer

would effectively perpetuate an unlawful possession and misutilisation

of public industrial land, to the detriment of the planned industrial

development for which the plot was earmarked. Such an outcome is

impermissible.

17. Viewed in totality, the impugned actions of IDCO cannot be faulted.

The petitioner's long-standing non-compliance with the allotment

conditions, unexplained delays, and misuse of the property disentitle

him to any relief in equity or law. IDCO was within its rights to cancel

the lease/allotment and resume possession once it became clear that the

petitioner was in fundamental breach and had failed to cure the same

despite opportunities. The conditions of allotment were clear-cut and