M/S Arfat Petrochemicals Private ... vs State Of Rajasthan
2021 Latest Caselaw 3023 Raj/2

                                           (1 of 34)                  [CW-3410/2020]


       HIGH COURT OF JUDICATURE FOR RAJASTHAN
                   BENCH AT JAIPUR

                 D.B. Civil Writ Petition No. 3410/2020

1.     M/s Arfat Petrochemicals Private Limited, Having Its
       Registered Office At B-59, Zainab Park Society, Gorat
       Road, Rander, Surat, Gujarat And Branch Office At Heavy
       Industrial Area, D.C.M. Road, District Kota (Rajasthan)
       Through Mr. S.H.A. Rizvi, Manager (P And I.R.)
2.     Juned General Son Of Mr. Mohammad Umar General,
       Aged About 38 Years, Resident Of Naimat Bunglow, Plot
       No 76 New Gorat, Rander Road, Surat 395009, Gujarat.
                                                                    ----Petitioners
                                     Versus
1.     State Of Rajasthan, Through The Principal Secretary,
       Department        Of       Industries,       Government        Secretariat,
       Jaipur.
2.     State Of Rajasthan, Through The Principal Secretary,
       Cabinet Secretariat, Government Of Rajasthan, Jaipur.
3.     Rajasthan State Industrial Development And Investment
       Corporation Ltd., Jaipur Through Its Managing Director.
4.     The District Collector, Kota.
                                                                  ----Respondents


 For Petitioner(s)            :    Mr. Atmaram NS Nadkarni, Senior
                                   Advocate assisted by Mr. Anurag
                                   Agarwal, Ms. Arzu Paul & Mr. Vivek
                                   Jain
                                   Mr. Salvador Santosh Rebello
 For Respondent(s)            :    Mr. Dushyant Dave, Senior Advocate
                                   with Mr. R.P. Singh, AAG assisted by
                                   Mr. J.S. Shekhawat, Ms. Neha
                                   Sangwan
                                   Mr. Anil Mehta, AAG
                                   Ms. Sheetal Mirdha, AAG
                                   Mr. R.K. Agarwal, Senior Advocate
                                   assisted by Ms. Sunita Pareek

                   HON'BLE THE CHIEF JUSTICE
       HON'BLE MR. JUSTICE SATISH KUMAR SHARMA

JUDGMENT RESERVED ON                          ::                  28/05/2021

JUDGMENT PRONOUNCED ON                       ::                   20/07/2021
                      (Downloaded on 20/07/2021 at 09:54:30 PM)
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             BY THE COURT (PER HON'BLE MR. SHARMA, J):

REPORTABLE

1. This petition has been filed under Article 226 of the

Constitution of India challenging the scope of authority of the

State Government over the Rajasthan State Industrial

Development and Investment Corporation (RIICO) under Article

138 of its Articles of Association and seeking directions to quash

and set aside the decision dated 03.08.2019 of the Cabinet

Committee of the State Government which was constituted to

review the decisions taken by the previous Government in the last

six months, and consequential orders issued pursuant thereto,

whereby the permissions/approvals granted to the petitioner-

company by the RIICO have been cancelled.

2. On perusal of the pleadings and material made available on

record, the relevant factual position has emerged out that a total

271.39 acres of land was allotted to J.K. Synthetics Ltd. (JKSL) in

Large Scale Industrial Area, Kota for setting up of industries. JKSL

was declared as "sick" vide order dated 02.04.1998 passed by

Board for Industrial and Financial Reconstruction (BIFR), Delhi.

The Appellate Authority of BIFR (AAIFR) vide its order dated

23.01.2003 sanctioned its rehabilitation scheme of JKSL and in

terms thereof, 227.15 acres of land of JKSL was transferred to the

petitioner-company, the scheme of JKSL had run it's course and

accordingly, lease deeds were executed/renewed by the District

Collector, Kota in favour of the petitioner-company.

3. The petitioner-company made the Acrylic Fibre unit

operational but due to a devastating fire in the year 2007, the

same was closed. In the rehabilitation scheme, a tripartite

agreement was executed between JKSL, the petitioner-company

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and the workers unions regarding the due payment to the

labourers. Liability of payment to labourers of JKSL was computed

to 40.42 crores of rupees, against which 34.06 crores of rupees

were paid by the petitioner-company and rest of the amount could

not be paid as the whereabouts of the concerned labourers could

not be known. The litigation for non revival of Kota units and

regarding payment of dues to labourers attained finality with the

dismissal of petitions before the Hon'ble Supreme Court on

17.08.2017 and 06.03.2018.

The petitioner-company made an application before the

District Collector, Kota for clearance to develop affordable housing

scheme on the lease land under Chief Minister Jan Aavas Yojana

(CMJAY) scheme. Correspondence in this regard was also made

between the District Collector and RIICO but it could not get the

desired clearance.

4. Thereafter, the petitioner-company on 28.08.2018,

11.09.2018, 12.09.2018 and finally on 27.09.2018 submitted

proposals for sub-division and change of land use of the subject

land for commercial and institutional use from industrial use in a

phased manner under RIICO Disposal of Land Rules, 1979 (Rules

of 1979). The proposals of the petitioner-company was accepted

by the Land Planning Committee (LPC) in its meeting dated

03.10.2018 and the same was approved by the Infrastructure

Development Committee (IDC) on 08.10.2018. The petitioner-

company deposited a total sum of Rs. 5,21,61,276/- with the

RIICO as its application fees, sub-division charges, transfer of strip

land, economic rent, service charges, commercial conversion

charges interest and GST. On fulfillment of all the formalities, the

RIICO executed necessary supplementary lease deeds and issued

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the required permissions/approvals in favour of the petitioner-

company.

5. The State Government vide order dated 01.01.2019,

constituted a Cabinet Committee to review the decisions taken by

the previous Government in the last six months. The Cabinet

Committee, vide its decision dated 03.08.2019 with respect to the

permissions/approvals granted to the petitioner-company directed

that "पूर्वररर्ती सररकसरकार रकसरका फा फैससलसरका ना निररसर त करककियसरका जासरकार| | ". In pursuance

thereto, the State Government vide its order dated 10.10.2019,

in exercise of its powers under Article 138 of the Articles of

Association of RIICO issued directions to the RIICO to cancel all

permissions/approvals granted to the petitioner-company. In

compliance, the RIICO issued orders dated 11.10.2019 and

14.10.2019 for cancellation and withdrawal of the

permissions/approvals granted to the petitioner-company and vide

letter dated 15.10.2019, a sum of Rs. 2,97,16,321/- was

deposited in the account of the petitioner-company.

6. The petitioner-company vide its letter dated 16.10.2019

raised objections before the RIICO and to return the above

amount, a cheque in favor of the RIICO was also annexed. The

RIICO did not accept the cheque and returned it to the petitioner-

company. The petitioner-company made repeated representations

to the RIICO and the State Government, and deposited the above

amount in F.D. to show its bona fides. The request of the

petitioner-company was not acceded to and it was intimated vide

letter dated 30.10.2019 that the permissions/approvals for sub-

division were already withdrawn vide order dated 25.07.2019.

Hence, this petition has been filed with following prayers:-

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     i.    "Issue appropriate writ, declaration, order or direction

that Article 138 of the Articles of Association of RIICO and Office order dated 27.05.2019 do not have any statutory force and a third party is not bound by the decision/direction/order passed by the State Government under Article 138 of the Articles of Association of RIICO; ii. Alternatively, if Article 138 of the Articles of Association of RIICO and Office order dated 27.05.2019 are declared to have statutory force, by an appropriate writ, order or directions it shall be quashed and set-aside as being ultra vires, unconstitutional, arbitrary and violative of Articles 14, 19, 21 and 300-A of the Constitution of India.

iii. Alternatively, to read down Article 138 of the Articles of Association of RIICO to not include power to exercise quasi- judicial functions and thereby set aside decisions taken by RIICO through its Land Planning Committee and Infrastructure Development Committee.

iv. Issue appropriate writ, declaration, order or direction setting aside order dated 03.08.2019 passed by the Cabinet Committee qua RIICO and Petitioner.

v. Issue appropriate writ, declaration, order or direction in the nature of mandamus setting aside the order dated 22.07.2019. 25.07.2019, 10.10.2019, 11.10.2019, 14.10.2019 and consequential and subsequent order/s passed by RIICO qua the Petitioner.

vi. Any prejudicial order if passed during pendency of the Writ Petition, against the Petitioner-company be taken on record and further be quashed and set aside.

vii. Any other order or direction which this Hon'ble Court deems just and proper may also be passed in the facts and circumstances of the case in favour of the Petitioner- company."

7. We have heard Mr. N.S. Nadkarni, Learned Senior Counsel

appearing on behalf of the petitioner-company, Mr. R.K. Dhawan,

Learned Senior Counsel, Mr. Dushyant Dave, Learned Senior

Counsel, Mr. R.K. Agarwal, Learned Senior Counsel, Mr. R.P. Singh,

Learned AAG, Mr. Anil Mehta, Learned AAG and Ms. Sheetal

Mirdha, Learned AAG appearing on behalf of the respondents and

perused the written submissions and the judicial pronouncements

submitted by both the sides and the material made available on

record.

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8.   Learned      Senior     Counsel       appearing         on   behalf      of    the

respondents has raised a preliminary objection regarding the

maintainability of this petition with the submissions that the RIICO

is a Government Company having no private share. Article 138 of

the Articles of Association of RIICO is a very common provision in

Government companies according to which the State Government

being the sole shareholder has unfettered power to issue

necessary directions to manage the affairs of RIICO and to correct

any unlawful action on the part of it. In this case, RIICO granted

permissions/approvals to the petitioner-company without any

authority and against public interest, therefore, the State

Government not only as the owner of the subject land but also as

the sole shareholder of the RIICO took the impugned decision

bonafidely in public interest which cannot be challenged under

Article 226 of the Constitution of India.

9. It has been further contended that as per Rule 55(xi) of the

Rajasthan High Court Rules, 1952, only such petition is

maintainable before the Division Bench of this Court in which the

vires of any Act is challenged. In this case, Article 138 of Articles

of Association of a public limited company i.e. RIICO has been

challenged which does not come in the purview of the statute. This

fact has also been admitted by the petitioner-company in its

petition. Thus, at the most, the same can be maintained before

the Single Bench and maintaining of this petition before the

Division Bench would amount to denial of available right to appeal

to a party, which would be unconstitutional. Therefore, this

petition is not maintainable before the Division Bench of this

Court. Reliance has been placed on the following judgments:-

(7 of 34) [CW-3410/2020] I. Collector Vs. Cine Exhibitors P. Ltd. [(2012) 4 SCC 441] II. Management of Fertilizer Corporation of India Ltd. Vs. Workmen [(1969) 2 SCR 706] III. Naresh Chandra Sanyal Vs. Calcutta Stock Exchange Association Ltd. [(1971) 1 SCC 50] IV. R. Abdulla Rowther and Ors. Vs. State Transport Appellate Tribunal, Madras and Ors. [AIR 1959 SC 896] V. G.J. Fernandez Vs. State of Mysore [AIR 1967 SC 1753] VI. Kumari Regina Vs. St. Aloysius Higher Secondary School [AIR 1971 SC 1920] VII. J.R. Raghupathy Vs. State of AP [AIR 1988 SC 1681] VIII. Rajasthan State Industrial Development and Investment Corporation Ltd. And Anr. Vs. DCM Ltd. And Anr. [DB SAW No. 1194/2007] IX. State of Rajasthan vs. Prakash Chand and ors. [(1998) 1 SCC 1] X. Co-operative Central Bank Vs. Addl. Industrial Tribunal [(1969) 2 SCC 43];

XI. Irrigation Development Employees Association Vs. Government of AP [(2004) SCCOnline AP 246] XII. A.R. Antulay Vs. R.S. Nayak (1988) 2 SCC 602

10. Learned Senior Counsel appearing on behalf of the

petitioner-company submits that in exercise of the power under

Article 138 of Articles of Association of RIICO, the State

Government can issue any direction to manage the affairs of the

RIICO but if such direction adversely affects the rights of a third

party, then the action of the State Government can be challenged

before this Court under Article 226 of the Constitution of India.

11. It is further admitted that in this case, the State Government

issued directions under Article 138 of Articles of Association of

RIICO to cancel the permissions/approvals issued by the RIICO

which were granted after due scrutiny under Rules, that too

without assigning any reason or without following the principles of

natural justice. Thus, an arbitrary and unbridled exercise of power

has been challenged by the petitioner-company seeking protection

against the utter violation of its fundamental rights guaranteed

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under Article 14, 19 & 21 of the Constitution of India. Hence, the

objection of maintainability of this petition is baseless and against

all tenets of law.

12. It has been further submitted that in view of the verdict of

the Hon'ble Supreme Court in The State of Rajasthan vs. Prakash

Chand and Ors. [(1998) 1 SCC 1], the petition challenging the

vires of any Act as well as the petition which involves

constitutional issue is maintainable before the Division Bench of

this Court. In this matter, the fundamental rights of the petitioner-

company have been violated by the State Government and by the

RIICO. The present matter involves an important constitutional

issue as to whether the State Government under the guise of

Article 138 of Articles of Association of RIICO can issue such

direction which violates the fundamental rights of the petitioner-

company. Thus, even if Article 138 of Articles of Association of

RIICO is not held to be statutory in nature, the present petition is

maintainable before this Division Bench and the objection raised

on behalf of the respondents deserves rejection. Reliance has

been placed on the following judgments:-

I. State of Rajasthan vs. Prakash Chand and ors. [(1998) 1 SCC 1] II. Shayara Bano Vs. Union of India [(2017) 9 SCC 1] III. Express Newspapers Pvt. Ltd. Vs. Union of India [(1986) 1 SCC 133] IV. Jaswant Sugar Mills Ltd., Meerut Vs. Lakshmi Chand & Ors.

[AIR 1963 SC 677] V. B. Rajagopala Naidu Vs. State Transport Appellate Tribunal, Madras [AIR 1964 SC 1573] VI. Nazir Ahmad Vs. The King Emperor, [AIR 1936 PC 253]

13. Needless to say that every citizen is entitled to approach this

Court under Article 226 of the Constitution of India for protection

of his/her fundamental rights or statutory rights. It is not in

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dispute that the State Government being a sole shareholder of the

RIICO has full authority under Article 138 of Articles of Association

of RIICO to issue necessary directions to manage the affairs of

RIICO or to correct its wrong decisions. But if the directions are

issued by the State Government to cancel allotment and/or

permissions/approvals already granted by the RIICO to a third

party without adopting prescribed procedure, such directions being

violative of the fundamental rights can certainly be challenged

before this Court under Article 226 of the Constitution of India.

14. In this case, the Cabinet Committee of the State Government

vide its decision dated 03.08.2019, directed to cancel the decision

of the previous Government in the matter of petitioner-company

without assigning any reason and without giving an opportunity of

hearing to the petitioner-company. In compliance of this decision,

the permissions/approvals granted to the petitioner-company have

been cancelled without adopting the procedure prescribed under

the Rules of 1979. The petitioner-company has challenged the

impugned decisions being violative of its fundamental rights

guaranteed under Article 14, 19 & 21 of the Constitution of India.

Therefore, in view of the above-mentioned legal position, this

petition is maintainable under Article 226 of the Constitution of

India.

15. As noted above, first prayer made in the petition seeks to

presuppose that Article 138 of the Articles of Association of RIICO

does not have any statutory force. The alternative prayer seeks to

quash the said Article 138 of the Articles of Association of RIICO

being ultra vires, if it is declared to have statutory force. Again an

alternative declaration has been sought to not include the power

under Article 138 of the Articles of Association of RIICO to set

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aside decisions taken by the RIICO. Thus, it is clear that besides

challenge to the constitutional validity of Article 138 of Articles of

Association of RIICO, a very important constitutional issue has

been raised as to whether the State Government has got authority

under Article 138 of Articles of Association of RIICO to issue

direction to the RIICO which may result in violation of the

fundamental rights of the third party.

16. In view of the judicial pronouncements cited by both the

sides, the Articles of Association of RIICO, being a public limited

company, cannot be held to be statutory in nature but as indicated

above, in this case not only the validity of Articles of Association of

RIICO has been challenged but alternatively, challenge has also

been made against the decisions of the respondents being

violative of the fundamental rights of the petitioner-company.

Therefore, an important constitutional issue is involved in the

petition.

17. Further, in view of the verdict of the Hon'ble Supreme Court

in State of Rajasthan vs. Prakash Chand and Ors. [(1998) 1 SCC

1], not only the matters challenging the vires of any Act are

maintainable before the Division Bench but the matter involving

constitutional issues are also maintainable before the Division

Bench of this Court under Rule 55 (xi) (supra) and as mentioned

above, this matter involves a very important constitutional issue

therefore, the preliminary objection of the respondents is not

tenable and the present petition is held to be maintainable before

the Division Bench of this Court.

18. Learned Senior Counsel appearing on behalf of the

petitioner-company has submitted that the decision of the

previous Government can be reverted after due enquiry, if it is

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found to be taken without lawful authority, arbitrarily, malafidely

or under the influence of some corrupt practices but such decision

cannot be reverted on the sole ground that the same was taken by

the previous Government. If the decisions taken by the previous

Government are reversed only by the change of the Government,

democracy will not survive and the fundamental rights of the

citizens would always be in peril. Therefore, the impugned orders

being issued solely on the change of the Government, deserve to

be quashed and set aside. Reliance has been placed on the

following judgments:-

I. State of Tamil Nadu and Ors. Vs. VK Shyam Sunder and Ors.

[(2011) 8 SCC 737] II. Onkar Lal Bajaj Vs. Union of India [(2003) 2 SCC 6730] III. State of Karnataka Vs. All India Manufacturers Organisation [(2006) 4 SCC 683] IV. State of Haryana Vs. State of Punjab [(2002) 2 SCC 5076]

19. Learned Senior Counsel appearing on behalf of the

respondents has submitted that the decision of the previous

Government can be reviewed by the successor Government by

constituting an Enquiry Commission or High Level Committee, if

such decision is found to be against public interest. Reliance has

been placed on the following judgments:-

I. Krishna Ballabh Sahay Vs. Commission of Inquiry [(1969) 1 SCR 385];

II. P.V. Jagannath Rao Vs. State of Orissa [(1968) 3 SCR 789]

20. In view of the judicial pronouncements cited by both the

sides, it is not disputed that the State Government is competent to

constitute an Enquiry Commission or other forum including

Cabinet Committee to examine and review the decisions taken by

the previous Government but at the same time, the decisions of

the earlier Government cannot be reverted on the sole ground

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that the same were taken by the previous Government. If the

decisions of the previous Governments are reverted in this

fashion, public faith and trust in the Government and its

instrumentalities would not be maintained and the rights of the

citizens would always remain at stake.

21. The petitioner-company has challenged the decision of the

State Government dated 03.08.2019 and the consequential orders

to cancel the permissions/approvals which were granted by the

Land Planning Committee (LPC) of the RIICO in its meeting dated

03.10.2018. The relevant minutes of the said meeting are quoted

below:-

"10. Finality to lay out plan approved 10.1 The applicants stated that this is a large project and substantial investment would be required to be made from their side in the form of deposition of various charges as well as construction of internal infrastructure. RIICO itself would stand to earn an estimated Rs. 100 crores in the form of sub division charges, conversion charges and transfer charges. On the other hand, sale of plots in such large numbers would be possible over a long period stretching across several years. For these reasons applicant company has submitted the proposal of implementation of its project in five phases, as provided in the prevailing RIICO Rules. Given this situation, they would be seeking project financing from financial institution, who would want assurance in the form of firm sanction of the project without any uncertainties. The viability of the project would be on implementation of all phases. Since permission would be spread over next 6 years, RIICO need to give assurance on two matters - namely, that the approved lay out plan, with implementation in phases, would be final and not subject to nay change in the policy/Rules in this regard, and that the non-industrial area approved as per the approval of the lay out plan would be taken on record in the overall percentage non-industrial use of Large Industrial Area Kota, under Rule 17(E)(2)(b) of RIICO Disposal of Land Rules, 1979.

10.2 The request was considered by the committee, in consultation with the other officers present, including the finance team, and was found reasonable. The lay out plan is being considered for approval in phases as per the provision in the prevailing Rules. As an analogy, it was also observed that in the case of customized packages

(13 of 34) [CW-3410/2020] sanctioned by the State Government, and some in which phases are also included, the incentives are sanctioned under the prevailing Investment Promotion Scheme of the Government (RIPS) whereas the investment is done over the next few years. Even if the RIPS changes, the incentives and provisions of the RIPS at the time of sanction of the customized package remain applicable and the provisions of the subsequent RIPS do not apply, even though some phase of the proposed project has not been implemented. In view of the same, the request was accepted."

22. Above decision of the Land Planning Committee (LPC) was

placed before the Infrastructure Development Committee (IDC) in

its meeting dated 08.10.2018, whereupon it was observed as

under:-

"The sub-division of land of M/s Afrat Petrochemicals Pvt. Ltd. (APPL), Kota was also approved in the meeting of LPC dated 03.10.2018 with development of the area in three phases i.e. A, B-1, B-2, C-1 & C-2, as per the provision of RIICO Disposal of Land Rules, 1979. Since, the size of the plot is very large (205 acres) and with approval of sub-division plan, in phases, the tenure of this project will extend up to six years. Therefore, the request of the applicant for finality of permission for the project, to be implemented in phases, provision for which exists under present Rules, was accepted. The decisions taken by the LPC in this case were apprised to the IDC and were noted to be in accordance with the provisions of the Rules."

23. Admittedly, the petitioner-company had deposited a total

sum of Rs. 5,21,61,276/- with RIICO as application fees, sub-

division charges, transfer of strip land, economic rent, service

charges, commercial conversion charges interest and GST and on

fulfillment of all the formalities, supplementary lease deeds were

executed by the RIICO in favour of the petitioner-company and

requisite permissions/approvals were granted.

24. Indisputably, the above said permissions/approvals were

granted by RIICO in exercise of the powers conferred upon it

under Rule 12 of the Rajasthan Land Revenue (Industrial Area

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Allotment) Rules, 1959 (Rules of 1959) and as per Rules 17 and

20 of the RIICO Disposal of Land Rules, 1979 (Rules of 1979).

25. It is relevant to note that a well-defined procedure for

cancellation of plot allotment has been prescribed under Rule 24 of

the Rules of 1979. This procedure mandates that before

cancellation of the plot allotment, a 45 days registered AD notice

is required to be issued to the allottee for alleged breach of any of

the Rules, conditions of allotment or terms of lease agreement.

Obviously, this procedure has been evolved to ensure mandatory

compliance of the principles of natural justice.

26. In this case, admittedly, the above prescribed procedure was

not followed, instead the Cabinet Committee straightaway took a

decision in its meeting dated 03.08.2019 only in seven words

"पूर्वररर्ती सररकसरकार रकसरका फा फैससलसरका ना निररसर त करककियसरका जासरकार||".

27. Admittedly, while taking the above decision, the Cabinet

Committee has not assigned any reason or justification for its

decision, even it did not care to issue any show cause notice to

the affected petitioner-company or to grant any opportunity of

hearing.

28. In pursuance to the above decision of the Cabinet

Committee, the State Government in exercise of its powers under

Article 138 of Articles of Association of RIICO vide its letter dated

10.10.2019, issued directions to the RIICO to cancel all the

permissions/approvals granted to the petitioner-company but no

reason whatsoever was noted in this communication.

29. In compliance of the above directions dated 10.10.2019, the

RIICO issued Order dated 11.10.2019 to cancel all the

permissions/approvals but the RIICO also did not care to record

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any reasons or to adopt the procedure prescribed under the Rules

of 1979.

30. It is well settled legal position as expounded in M/s Motilal

Padampath Sugar Mills co. Ltd. Vs. State of UP and Ors. [(1979) 2

SCC 409]; Manuelsons Hotel Pvt Ltd. Vs. State of Kerala and Ors.

[(2016) 6 SCC 766]; State of Punjab Vs. Nestle India Ltd. And Anr.

[(2004) 6 SCC 465]; S.V.A. Steel Re-rolling Mills Ltd. And Ors. Vs.

State of Kerala [(2014) 4 SCC 186]; Food Corporation of India Vs.

M/s Kamdhenu Cattle Feed Industries [(1993) 1 SCC 71]; National

Building Construction Corporation Vs. S. Raghunathan and Ors.

[(1998) 7 SCC 66], cited on behalf of the petitioner-company that

the principles of promissory estoppel and legitimate expectation

are equally applicable against the State Government in respect of

the contractual obligations. If relying upon the

permissions/approvals granted by the State Government, a party

has changed its position and invested a huge amount to complete

the project, the State Government or its instrumentality granting

permissions/approvals cannot be allowed to resile from its promise

in the shape of permissions/approvals granted in conformity with

the prevalent Rules.

31. Indisputably, the petitioner-company in furtherance of the

permissions/approvals granted to it by the RIICO, has changed its

position and started work at site. It has entered into several

agreements with third parties, in legitimate expectation that the

RIICO being a Government company shall abide with the

permissions/approvals granted by it but the State Government as

well as the RIICO did not even consider the plight of the

petitioner-company and straightaway cancelled the

permissions/approvals which were granted to it after following the

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due procedure. Thus, the impugned decisions have been taken in

clear violation of the principles of promissory estoppel and

legitimate expectation, therefore, the same are not sustainable in

the eyes of law.

32. It is also relevant to note that even after direction of the

State Government to refund all the amount received from the

petitioner-company, the RIICO has returned only

Rs. 2,97,16,321/- as against the total amount of Rs.

5,21,61,276/- deposited by the petitioner-company and retained

the rest of the amount which is also indicative of the authority of

the RIICO for granting the permissions/approvals in question.

Further, by not returning the whole amount, the respondents have

not acted in fair or equitable manner and accordingly, the

impugned orders have been issued in an absolutely arbitrary

manner.

33. No doubt, even if a permission is granted as per rules, the

same can be revoked, if it is found that the same was granted or

obtained by fraud or corrupt means but in this case, no action

whatsoever has been taken or initiated against any officer of the

State Government or the RIICO. Even no allegation of favoritism,

malafides or corrupt practices has been leveled against anyone.

34. As mentioned above, admittedly, the allotment, approvals/

permissions granted in favour of the petitioner-company have

been cancelled whereby the rights vested in it have been taken

away without following the due procedure prescribed under the

Rules of 1979, without assigning any reason whatsoever and that

too without giving any opportunity of hearing to the affected

petitioner-company. Thus, the impugned decisions taken by the

State Government and the RIICO are per se illegal and violative of

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the fundamental rights of the petitioner-company guaranteed

under Article 14, 19 & 21 of the Constitution of India. Therefore,

the same deserve to be quashed and set aside.

35. Learned Senior Counsel appearing on behalf of the

petitioner-company has submitted that the impugned decisions

can only be adjudged on the basis of reasons, if any, mentioned in

the orders itself. Such decisions cannot be supplemented by the

grounds/reasons given ex-post facto by way of reply to the writ

petition and additional affidavits. Reliance has been placed on

Mohinder Singh Gill & Anr. Vs. The Chief Election Commissioner,

New Delhi & Ors. (1978) 1 SCC 405.

36. Learned Senior Counsel appearing on behalf of the

respondents has submitted that the decision of the RIICO is per se

illegal for want of lawful authority and it has been taken without

application of mind which is totally against the public interest.

Therefore, such technical objection should not be allowed to

prevail.

37. It is pertinent to note in this regard that as per the verdict of

the Hon'ble Supreme Court in Mohinder Singh Gill (supra), the

validity of the impugned decisions has to be adjudged on the basis

of grounds/reasons given out in the orders itself and the same

cannot be allowed to be supplemented by fresh reasons in the

shape of affidavits or otherwise.

38. Admittedly, no reasons for cancellation of the

permissions/approvals whatsoever, have been mentioned in the

impugned orders and the respondents have come out with so

many other grounds/reasons by way of filing reply to the writ

petition and additional affidavits. Further the procedure prescribed

under the Rules of 1979 admittedly has not been adopted.

(18 of 34) [CW-3410/2020]

Therefore, in view of the above-mentioned legal position, such ex-

post facto grounds cannot be looked into to adjudge the validity of

the impugned decisions, however, in the interest of justice, the

same are being discussed hereinafter with the clarification that

any observations on such fresh reasons shall not prejudice either

party.

39. Learned Senior Counsel appearing on behalf of the

respondents has contended that the RIICO did not have the

authority to grant permissions/approvals to the petitioner-

company because, initially the lease deed of the subject land was

executed in favour of JKSL, by the District Collector and not by the

RIICO. After AAIFR's order, again the lease deeds were

executed/renewed by the District Collector in favour of the

petitioner-company and not by the RIICO. The lease rent and

other charges were deposited by the petitioner-company with the

State Government and not with the RIICO. The petitioner-

company, conceding to the authority of the District Collector over

the subject land, filed an application dated 13.04.2018 before him

for necessary clearance under CMJAY scheme. Rule 12 of the Rules

of 1959 does not apply in this case as the lease deeds in favour of

the petitioner-company were executed after insertion of the said

rule and transfer of industrial areas to the RIICO. Therefore, the

permissions/approvals granted by the RIICO have been rightly

cancelled for want of lawful authority.

40. Learned Senior Counsel appearing on behalf of the

petitioner-company submitted that the State Government, being a

party to the AAIFR's proceedings, the lease deed was

executed/renewed by the District Collector and not by the RIICO.

It is apparent from the notification dated 18.09.1979 that the

(19 of 34) [CW-3410/2020]

State Government transferred the industrial areas

maintained and developed by the Department of Industries

to the RIICO and accordingly, large industrial area, Kota

was also transferred to RIICO by the State Government vide

notification dated 28.09.1979 where the subject land is situated.

Therefore, the RIICO is competent to grant permissions/approvals

under Rule 12 of the Rules of 1959 as it is also authorized for the

lands already allotted.

41. It has been further submitted that the petitioner-company

applied for clearance under CMJAY scheme before the District

Collector to develop affordable housing as in this specific scheme

the District Collector was the authority to issue clearance

irrespective of the fact that the land is owned by the State

Government or by the RIICO. The District Collector himself sought

opinion of the RIICO in this regard which is clearly indicative of

the fact that the said land was under the control of the RIICO.

42. It has been further submitted on behalf of the petitioner-

company that the stand taken by the respondents in this case is

quite contrary to the decision taken by the High Level Committee

comprising of Advocate General and top officers of the State in a

similar matter where the District Collector proceeded to cancel the

lease deed. This High Level Committee categorically opined that

under Rule 12 of the Rules of 1959, only the RIICO is empowered

to execute or cancel the lease deeds in the industrial areas

transferred to it. Accordingly, the RIICO filed for revision before

the State Government which came to be allowed and the order of

the District Collector was set aside. Further, the State Government

in the case of Ravindra Sharma Vs. State of Rajasthan, (DBCWP

No. 19102/2018) at Principal seat, Jodhpur filed its reply that the

(20 of 34) [CW-3410/2020]

RIICO, being a Government entity enjoys statutory powers and it

is empowered to issue necessary permissions/ approvals under

the Rules of 1979. Reliance has been placed on the following

judgments:-

I. M G Pandke and Ors. Vs. Municipal Council, Hingaghat, District Wardha and Ors. [(1993) Supp (1) SCC 708] II. Somaiya Organics (India) Ltd. And Ors. Vs. State of UP and Anr. [(2001) 5 SCC 519]

43. In this regard, Rule 12 of the Rules of 1959 is important

which empowers the RIICO to allot the land, execute the lease

deeds and also to deal with the land already allotted, which reads

as under:-

[12.] Allotment of land by Rajasthan State Industrial Development and Investment Corporation Ltd. [or Rajasthan Tourism Development Corporation]. - The Rajasthan State Industrial Development and Investment Corporation Ltd. Jaipur [or Rajasthan Tourism Development Corporation] shall be empowered to make allotment in accordance with the Rajasthan State Industrial Development and Investment Corporation disposal of Land Rules, 1979 [or any other rules framed by the RIICO or RTDC for the purpose] of vacant plots to entrepreneurs in the Industrial Areas notified by the State Government and transferred to the said Corporation. The Corporation shall also be authorised to execute lease deeds, realise development charges, lease rent and other dues from the entrepreneurs to whom plots have already been allotted in accordance with the provisions of these rules, and to take any consequential or residuary action in regard to the plots allotted to the entrepreneurs.

[Provided that the Rajasthan State Industrial Development and Investment Corporation Ltd. [or Rajasthan Tourism Development Corporation]shall be empowered to grant written permission to the lessee for transfer of rights or interest in the land in respect of the plots/land located in the Industrial Areas notified by the State

(21 of 34) [CW-3410/2020] Government and transferred to the said Corporation.

Provided further that any permission granted or action taken for transfer of rights or interest in the plots/land by the Rajasthan State Industrial Development and Investment Corporation Ltd. [or Rajasthan Tourism Development Corporation], after 13-7-1982 in respect of the plots/land situated in the Industrial Areas and transferred to the said Corporation shall be deemed to be valid under the first proviso to this rule.]

44. As per Rules 17 and 20 of the Rules of 1979, the RIICO is

also competent to grant permissions/approvals for sub-division

and change of land use.

45. As mentioned above, the provisions of Rule 12 of the Rules

of 1959 empower the RIICO to allot the land in the industrial

areas including the lands already allotted before insertion of this

Rule in the year 1982 under the Rules of 1959.

46. Admittedly, the State Government vide notification dated

18.09.1979 transferred all the industrial areas to the RIICO and in

furtherance thereof, the large industrial area of Kota was

transferred to the RIICO vide notification dated 28.09.1979 where

the subject land is situated.

47. It is not so that the lands which were allotted by the District

Collector or the lease deeds of which were executed by the District

Collector were kept out from the process of transfer of the

industrial areas to the RIICO. Nothing has been placed on record

to show that instead of the RIICO, the District Collector is granting

permissions/approvals for sub-division and change of land use in

any of the industrial areas transferred to the RIICO.

(22 of 34) [CW-3410/2020]

48. Rule 12 of the Rules of 1959 and Rules 17 and 20 of the

Rules of 1979 in unequivocal terms, authorize the RIICO to grant

permissions/approvals to execute the supplementary lease deeds

in respect of the lands already allotted and the sub-division and

change of land use. The RIICO has also not pleaded in this case

that it had no authority to grant the permissions/approvals in

question. Therefore, it is not correct to say that the RIICO had no

authority to grant the impugned permissions/approvals to the

petitioner-company.

49. The subject land has been allotted to the petitioner-company

as per the order of AAIFR. The State Government was party to the

proceedings before AAIFR. Accordingly, the lease deed which was

initially executed in favour of JKSL was transferred by the District

Collector in favour of the petitioner-company. Thus, no fresh lease

deed was executed in favour of the petitioner-company.

50. All the lands similar to the subject land for which lease deeds

were initially executed by the District Collector stood transferred

to the RIICO by notification dated 18.09.1979 and no such land

was kept out of the same. Therefore, only because the renewal of

the lease deed was done by the District Collector, the authority of

the RIICO is not extinguished or the District Collector has not got

the power singularly in this case particularly when only the RIICO

is exercising such power in all the industrial areas without

exception.

51. It is apparent from the minutes of meeting dated 20.11.2019

of the High Level Committee comprising of Advocate General,

Additional Chief Secretary, Principal Secretary, Law, Government

of Rajasthan and other higher officers of the State Government

(23 of 34) [CW-3410/2020] that in a given similar matter, the District Collector, Bharatpur

terminated the lease deed of an allottee on the ground of violation

of terms and conditions of the lease deed dated 14.02.1963

executed between the State Government through the District

Collector and the allottee. The committee, inter alia, observed and

concluded as under:-

"3. In view of Rule 12, it is clear that the Corporation (RIICO) has been authorized not only to execute lease deeds, realize development charges, lease rent and other dues from the entrepreneurs to whom the plots were already allotted by the Government in accordance with the provisions of these rules but has also further been authorized to take any consequential or residuary action in regard to the plots allotted to the entrepreneurs. In this way Corporation has stepped into the shoes of the State Government. Thus, for all technical purposed, it is the Corporation who is to be treated as lessor."

Decision of the Committee -

"After due deliberations, Members of the Committee were of the opinion that RIICO is having undisputed jurisdiction in the matter of all those industrial areas which were notified/developed by the State Government and came to be transferred to RIICO vide order dated 18.09.1979 and in view of subsequent amendment in Rajasthan Industrial Area Amendment Rule, 1959 vide notification dated 13.07.1982 by insertion of Rule 12."

The reply submitted by the State Government in Ravindra

Sharma's case (supra) is also in line of the decision of the above-

mentioned Higher Level Committee.

52. Even if, as per the objection of the respondents, the reply

filed in some other cases is not considered, the authority of the

RIICO under Rule 12 of the Rules of 1959 is well established as

discussed above.

(24 of 34) [CW-3410/2020]

53. Admittedly, the petitioner-company applied to the District

Collector for clearance under CMJAY scheme as the District

Collector was the only authority in this scheme for granting

NOC/clearance irrespective of the fact that the land in question

was owned by the State Government or by the RIICO. The District

Collector also sought opinion on this application from the RIICO

which is certainly indicative of the authority of the RIICO over the

subject land. Otherwise also, the authority of District Collector or

the RIICO is to be adjudged in light of the prevalent rule and not

by the admissions of any party. Therefore, only by making the

above application to the District Collector, it cannot be concluded

that the petitioner-company conceded to the authority of the

District Collector for all purposes and the RIICO had no authority

to grant the permissions/approvals in question.

54. It is further contended on behalf of the respondents that the

petitioner-company has failed to fulfill its liabilities in terms of the

rehabilitation scheme prescribed by the order of the AAIFR.

Hence, the lease deed of the petitioner-company is liable to be

cancelled.

55. It has been submitted on behalf of the petitioner-company

that all liabilities and obligations on the part of the petitioner-

company were timely fulfilled. The petitioner-company, out of

total dues of Rs. 40.42 crores of workers, paid Rs. 34.06 crores

and the remaining amount could not be disbursed as the

whereabouts of the concerned workers could not be known even

after taking all efforts including issuing public notices in national

newspapers. It also made an Acrylic Fibre Unit operational but due

to devastating fire, it had to be shut down. Till date, a huge

(25 of 34) [CW-3410/2020] amount of Rs.137.75 crores has been invested by the petitioner-

company without getting return of a single penny.

56. It has been further submitted that when the petitioner-

company could not get clearance from the District Collector under

CMJAY scheme for affordable housing, it submitted the proposals

before the RIICO for the permissions/approvals in question and

after getting permissions/approvals, it proceeded with the project.

57. Without going into the minute details, suffice it is to say in

this regard that if petitioner-company violated the terms and

conditions of the rehabilitation scheme, the RIICO or the District

Collector could have taken the steps to cancel the lease deed on

this count but admittedly, no such action has ever been initiated

even after a lapse of period of 13-14 years. Therefore, without

expressing any opinion on this factual dispute, the objection is

found to be not tenable for maintaining the impugned decisions.

58. It has been further contended on behalf of the respondents

that in this case, the petitioner-company has been granted the

permissions/approvals to change the land use from industrial to

commercial and institutional, which is liable to be cancelled as

violative of the master-plan and in violation of Rules 8, 9 and 11

of the Rules of 1959. Reliance has been placed upon the following

judgments:-

I. R.K. Mittal Vs. State of UP [(2012) 2 SCC 232] II. M.I Builders Lts. Vs. Radhe Shyam Sahu [(1999) 6 SCC 464] III. Shanti Sports Club Vs. Union Of India [(2009) 15 SCC 705] IV. Gulab Kothari Vs. State of Rajasthan, DBCWP No. 1554/2004

59. It has been submitted on behalf of the petitioner-company

that the master-plan itself permits for commercial and institutional

use in the industrial areas. The RIICO has issued thousands of

(26 of 34) [CW-3410/2020] permissions for change of land use under the Rules of 1979.

Hence, this objection is baseless.

60. In view of the above cited judicial pronouncements, there

can be no dispute that the Master Plan cannot be flouted by any

private person or by any authority but as mentioned above, the

RIICO after due scrutiny has granted permissions/approvals for

change of land use to the petitioner-company not for residential

purpose but for commercial and institutional purposes. Rule 20 of

the Rules of 1979 empowers the RIICO to grant permissions/

approvals of such change of land use. Such permissions/approvals

granted by the Government instrumentalities cannot be cancelled

particularly when the permitted change of land use lies in the

ambit of the Master Plan.

61. If it is concluded that the RIICO has no power to grant the

permissions/approvals for change of land use and sub-division in

view of the provisions of Rules 8, 9 and 11 then the power

specifically conferred upon the RIICO under Rule 12 of the Rules

of 1959 would be redundant. Therefore, on conjoint reading of

Rules 8, 9 and 11 with Rule 12 of the Rules of 1959, it cannot be

said that the RIICO is not empowered to give permission for sub-

division and change of land use.

62. The petitioner-company has filed a non-comprehensive list of

as many as 30 matters wherein the RIICO has granted permission

for similar change of land use which supports the version of the

petitioner-company. Though it has been contended on behalf of

the respondents that in these 30 cases, the land was allotted by

the RIICO and not by the District Collector. But not even a single

incidence has been placed on record which may show that such

(27 of 34) [CW-3410/2020] permission of change of land use has ever been granted by the

District Collector in industrial areas. Therefore, above objection of

the respondents also does not justify the impugned decisions.

63. It has been contended on behalf of the respondents that

under Rule 20(C) of the Rules of 1979 the change of land use from

industrial to other purpose cannot be permitted beyond 15 per

cent of total scheme area whereas in this case the change of land

use has been permitted for more than 27 per cent of such area.

64. It has been submitted on behalf of the petitioner-company

that the permission of change of land use is well within the limit of

15 per cent. A factual calculation has also been submitted in this

regard indicating that the total scheme area is approximately 700

acres and 15 per cent of such area would be around 105 acres

whereas the petitioner-company has been permitted to the extent

of 50-55 acres of land only. Hence the permission does not violate

the prescribed limit.

65. Without going into the factual dispute, suffice it is to say that

in case the RIICO has gone beyond the limit of 15 per cent as per

Rule 20(c) of 1979 Rules, it is always free to initiate appropriate

proceedings as per the prescribed procedure for cancellation of the

permissions/approvals for the area beyond the maximum limit of

15 per cent as per Rule 20(c) of 1979 Rules. But admittedly, no

such proceedings have been undertaken by the RIICO so far.

Therefore, this objection also does not help the respondents in

these proceedings.

66. The respondents have vehemently objected to the

permissions/approvals in question with the allegation that the

permissions/approvals issued to the petitioner-company are

(28 of 34) [CW-3410/2020] against the public interest as 205.25 acres of land has been given

on throw away price to the petitioner-company for making money

through real estate business.

67. It has been submitted on behalf of the petitioner-company

that the proposed project apart from generating employment in

the State, would generate almost Rs. 100 crores revenue for the

State and accordingly, after thorough consideration of all aspects,

the permissions/approvals have been granted by the RIICO in

public interest.

68. As initially noted, the proposals of the petitioner-company

were examined by various department of the RIICO and finally,

the permissions/approvals were granted with clear note of

fulfillment of above stated aspects of the public interest. In turn,

IDC also considered the matter and found the permission to be

absolutely in accordance with the rules. During the process of

granting permissions/approvals, the District Collector was also

informed by RIICO regarding this process but no objection

whatsoever was raised by the District Collector. Thus, this

allegation also does not justify the impugned decisions of the

State Government.

69. The allegation of taking the decisions in a hasty manner has

been levelled against the RIICO on the basis of the fact that the

decision for granting permissions/approvals in question was taken

quickly.

70. May be this was done in faster mode than routine, but the

minutes of the meetings granting requisite permissions/approvals

very well indicate application of mind and sound reasons for

granting the permissions/approvals.

(29 of 34) [CW-3410/2020]

71. On the other hand, being responsible authority and while

reversing the decision taken by its instrumentality, the State

Government and the RIICO were obliged to sincerely and seriously

consider the matter and to record appropriate reasons for doing

so, but as is evident from the record that the Cabinet Committee

of the State Government did not care to record any reason for its

decision. In turn, in the order issued by the State Government to

the RIICO, no justification or reason was mentioned. To the utter

surprise, the RIICO also did not care to record the reasons of

cancellation of the permissions/approvals. If it had no good

reason, it could have referred the matter back to the State

Government for re-consideration. Thus, this objection also does

not help the respondents.

72. The respondents have also submitted that the

permissions/approvals for change of land use was already

withdrawn vide letter dated 22.07.2019 in terms of the RIICO's

Office Order dated 27.05.2019 restricting the issuance of

permissions/approvals for change of land use in future. Further,

the permissions/approvals for sub-division of land was withdrawn

by the RIICO vide letter dated 25.07.2019.

73. The petitioner-company has denied receiving such

communications issued by the RIICO with the submissions that for

the first time, reference of one of these letters came into light in

the letter dated 30.10.2019 issued by the RIICO and not before

that.

74. The contention of the petitioner-company in this regard,

cannot prima facie be disbelieved firstly, because all the record of

the RIICO was available with the Cabinet Committee and had the

(30 of 34) [CW-3410/2020] permissions been already revoked, there was no occasion to revert

the decision by the Cabinet Committee. Secondly, the orders

issued pursuant to the decision of the Cabinet Committee would

have certainly contained the reference of the letters dated

22.07.2019 & 25.07.2019 but for the first time, in the letter dated

30.10.2019 by the RIICO, reference of one of the above said two

letters has been made.

75. Besides above, the letter dated 22.07.2019, withdrawing the

permissions/approvals for change of land use is based on the

decision taken by the RIICO on 27.05.2019, restricting the

issuance of the permissions/approvals in future. But admittedly in

this case, the decision of granting permissions/approvals to the

petitioner-company was taken way back on 03.10.2018. The

decision taken on the basis of Office Order dated 27.05.2019 for

not granting permissions/approvals for change of land use in

future cannot be made applicable retrospectively in this case,

therefore, this objection has also no force.

76. It has further been contended on behalf of the respondents

that RIICO had given blanket and irrevocable permissions/

approvals to the petitioner-company irrespective of any change in

the policy which is not permissible under law.

77. An objection has also been raised by the respondents against

the RIICO that the permissions/approvals have been granted to

the petitioner-company in violation of the Model Code of Conduct

declared by the Election Commission in the State but indisputably,

similar permissions/approvals were granted in so many cases in

the same period and none of such permissions/approvals has been

withdrawn on this count. Further, the permissions/approvals in

(31 of 34) [CW-3410/2020] question were granted on 03.10.2018 that is prior to the

applicability of Model Code of Conduct w.e.f. 06.10.2018. Besides,

no such reason has been quoted in the impugned orders. Thus,

objection is not tenable.

78. It has also been contended on behalf of the petitioner-

company that total 71 matters were placed before the Cabinet

Committee but only the decision taken in favour of the petitioner-

company was reverted, which is a glaring example of

discrimination.

79. It has been submitted by the respondents that besides the

permissions/approvals of the petitioner-company, one or two other

permissions/approvals were also reverted.

80. Be that as it may, the apprehension of the petitioner-

company does not appear to be baseless in the manner the

decision was taken against it, but no weightage is being given to

the alleged discrimination because principally the authority can

take appropriate decision in one case out of hundreds of cases, if

it is permissible as per law.

81. In none of the cases cited on behalf of the respondents,

similar action of the State Government or its instrumentalities as

in this case was challenged and confirmed. Thus, their facts and

circumstances are quite different and distinguishable to this case.

However, above conclusions have been drawn keeping in view the

legal position expounded in all the judgments cited by both the

sides.

82. As submitted on behalf of the petitioner-company, it had

already invested a huge amount of 137.75 crores. It will have to

invest crores of rupees in the future to complete this project. The

(32 of 34) [CW-3410/2020] financial institutions do not finance the project unless the

permissions/approvals are certain and granted in this manner.

Therefore, in order to arrange the finances, such permissions/

approvals were requested and the same were granted after due

consideration and in accordance with Rules.

Otherwise also, if some policy is changed, thereby affecting

the rights of the parties, the same cannot be made effective

retrospectively. Therefore, the said irrevocable permissions/

approvals cannot be taken to be issued without authority or

impermissible under the Rules.

83. It has also been submitted on behalf of the petitioner-

Company that the project has been stalled for almost two years

and it has suffered huge losses, therefore, appropriate directions

should be issued to the RIICO not to cause further delay in

completion of the project in terms of the permission/ approval

already granted in its favour.

84. In view of the undisputed factual matrix of the case, the

above prayer deserves consideration.

85. Applications for impleadment have been filed on behalf of the

labour unions and they have been allowed to intervene in the

matter but at the time of hearing, no one was present on their

behalf. The respondents themselves have submitted that the

objection of the labour unions is not relevant to the controversy.

The petitioner-company has submitted that it has fulfilled its

obligations towards the dues of the workers, however, it is open

for the workers to take appropriate legal recourse for alleged non-

compliance of the directions issued in the litigation which attained

finality up to the Hon'ble Supreme Court. Therefore, the applicants

(33 of 34) [CW-3410/2020] are not necessary party in this case and their applications are

liable to be dismissed.

86. It is also relevant to note that on 01.10.2020 and

22.10.2020, an interim stay was granted in the matter to maintain

status quo vis-a-vis the possession of the impugned land and stay

of operation of order dated 10.10.2019 as well as consequential

order dated 11.10.2019, but surprisingly, the District Collector,

Kota issued a Show Cause Notice on 27.11.2020 against the

petitioner-company for cancellation of the lease deed. Afterwards,

he tendered apology for issuance of such notice in contravention

of the directions of this Court. Therefore, in view of the above

factual & legal position and the Show Cause Notice being issued in

violation of the interim directions of this Court, the same deserves

to be quashed and set aside.

87. In view of the above and the reasons stated above, the

petition deserves to be allowed and the impugned orders

cancelling the lease deeds and permissions/approvals granted to

the petitioner-company are liable to be quashed and set aside with

the appropriate declaration regarding the scope of power of the

State Government under Article 138 of the Articles of Association

of the RIICO.

Consequently, the present petition is disposed of as under:-

i. It is declared that while the State Government has the power

to issue appropriate directions under Article 138 of the

Articles of Association of RIICO to manage the affairs of the

RIICO, but such power cannot be used to direct the RIICO to

straightaway cancel the lease deeds, permissions/approvals

granted by it in favour of the third party without adopting

(34 of 34) [CW-3410/2020]

the procedure prescribed under the Rules of 1979 and other

prevalent Rules.

ii. The decision of the Cabinet Committee constituted to review

the decisions taken by the previous Government in the last

six months, taken in its meeting dated 03.08.2019 and the

Order of the State Government dated 10.10.2019 issued

pursuant thereto and the Orders dated 22.07.2019,

25.07.2019, 11.10.2019 & 14.10.2019, issued by the RIICO

and all subsequent orders are quashed and set aside

whereby the lease deeds and permissions/approvals already

granted to the petitioner-company have been cancelled.

iii. The petitioner-company shall be entitled to act upon in terms

of approvals/permissions granted to it by the RIICO.

iv. The Show Cause Notice dated 27.11.2020 issued by the

District Collector, Kota to the petitioner-company for

cancellation of lease deed against the interim directions of

this Court, is hereby quashed and set aside.

v. The applications for impleadment filed by the labour unions

are dismissed.

vi. The project of the petitioner has been stalled by more than

two years and hence it is expected of the respondents to

ensure that no further impediments are caused. We,

therefore, direct MD, RIICO to process any application made

by the petitioner to be expeditiously dealt with within a

period of four weeks from the date of this order.

vii. No costs.

(SATISH KUMAR SHARMA),J (INDRAJIT MAHANTY),CJ

SAHIL SONI /

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