B.Satish Kumar Gupta, Domalguda, ... vs The Govt Of Ap.,Industries And ...
2023 Latest Caselaw 4420 Tel

Telangana High Court

B.Satish Kumar Gupta, Domalguda, ... vs The Govt Of Ap.,Industries And ... on 29 December, 2023

        THE HON'BLE THE CHIEF JUSTICE ALOK ARADHE
                                  AND
        THE HON'BLE SRI JUSTICE N.V.SHRAVAN KUMAR


             Writ Appeal Nos.461 and 462 of 2008

COMMON JUDGMENT:

(Per the Hon'ble Sri JusticeN.V.Shravan Kumar)

These intra court appeals are filed against the

common order dated 13.11.2007 in W.P.No.25167 of 2005

and 7619 of 2006. The said writ petitions were disposed of

by common order in view of commonality of the parties and

also subject matter as well. The petitioner in both the Writ

petitions had filed the present writ appeals. Since, the

petitioner / appellant died, his legal heirs were brought on

record as appellant Nos.2 to 4 in both the writ appeals. The

respondent Nos.1 to 3 in W.A.No.462 of 2008 were shown

as respondent Nos.1 to 3 in W.A.No.461 of 2008 and apart

from these parties, A.P.Industrial Infrastructure

Corporation Ltd., represented by its Managing Director was

shown as respondent No.4 and the Municipal Corporation

of Hyderabad, represented by its Commissioner was shown

as respondent No.5 in W.A.No.461 of 2008.

2. W.P.No.25167 of 2005 was filed questioning the

action of respondent No.1 contained in Memo

No.14701/IF.CELL/A1/2005 dated 29.10.2005 and the

order of respondent No.2 in Lr.No.13/1/2004/

0025/0025/FD dated 08.07.2004 rejecting the claim of the

petitioner for grant of leasehold / freehold rights over the

industrial plot bearing No.21/1 by deeming that the

petitioner has been in continuing lessee as on the date

when the Azamabad Industrial Area (Termination and

Regulation of Leases) Act, 1992 and the provisions of the

amendment to the said acts and also to declare the

cancellation of leasehold rights of the petitioner contained

in the order of respondent No.1 in G.O.Ms.No.225 dated

23.03.1990 and arbitrary and illegal.

3. W.P.No.7619 of 2006 was filed questioning the

action of respondent in selling plot no.21/1 of Azamabad

Industrial Area, Hyderabad to respondent No.3 under

registered sale deed bearing Doc.No.3804/2005 dated

23.11.2005 ignoring the legitimate claim of the petitioner

for fresh lease of the industrial plot and to direct

respondent No.2 to grant leasehold / freehold rights of the

said plot in favour of the appellant / petitioner

contemplated by the provisions of Azamabad Industrial

Area (Termination and Regulation of Leases) Act, 1992.

4. In both the writ appeals, since the pleadings of the

parties are common, these writ appeals are disposed of by

a common order.

5. The brief facts of the case are that the father of the

appellant / petitioner one S.Bhagatram Gupta, the

Managing Director of M/s.S.B.Ram and Company was an

industrial concern manufacturing readymade garments

and his father obtained leased out industrial plot bearing

No.21/1 admeasuring Ac.1.137 gts, Hyderabad for a period

of 99 years vide registered lease deed executed by

Government of Andhra Pradesh on 24.03.1967 enabling

establishment of manufacturing plant for readymade

garments. Thereafter, the petitioner's father in pursuance

to the said lease, has constructed factory building and

installed machinery for readymade garments and the unit

was continuously functional and carrying on

manufacturing activity for fifteen (15) years and thereafter,

due to labour unrest, it became a sick unit. Thereafter, the

line of activity was changed from dress manufacturing unit

to Pharmaceutical and in such context, a partnership deed

was entered on 1976 under the name and style of M/s.

Phoenix Pharmaceuticals and necessary permissions were

also taken.

6. Thereafter, due to some disputes amongst the

members of M/s. Phoenix Pharmaceuticals which resulted

in filing of O.S.No.398 of 1995 but the manufacturing

activity continued upto 10.07.1998 and thereafter, the

partners have left the partnership firm. It is further

submitted that eversince grant of lease, there was always

an industrial activity over the said industrial plot and it

was never put to disuse by the father of the appellant /

petitioner. Later, the petitioner father died in the year 1995

and the appellant / petitioner was associated with the

manufacturing process. Thereafter, respondent No.1 issued

memo dated 29.07.1987 proposing termination of lease on

the ground of sub-lease and non-user of industrial plot for

which the petitioner / appellant filed detailed explanation

to the said memo and proceedings were dropped.

Thereafter, notice was issued by respondent No.1 on

12.07.1989 suggesting termination of lease on the very

same grounds and respondent No.1 issued G.O.Ms.No.225

dated 23.03.1990 terminating lease hold rights in respect

of said industrial plot. Thereafter, petitioner challenged the

said G.O., dated 23.03.1990 by way of filing W.P.No.7025

of 1990 and this Court granted an interim order of status

quo as regards possession on 25.05.1990 in the said writ

petition.

7. The petitioner has submitted a detailed

representation dated 21.07.1993 to respondent No.1 for

restoration of lease which was executed in favour of his

father, since the lease was heritable. The petitioner was

made to understand that the Government itself may

reconsider the issue and restore the leasehold rights in his

favour and that on the said representation, respondent

No.1 issued memo dated 20.08.1993 forwarding the

representation to respondent No.2 and directed him to

obtain a fresh lease application. It is submitted that

petitioner received a letter from respondent No.2 to

withdraw W.P.No.7025 of 1990, so that Government can

take appropriate decision. The petitioner in pursuance of

that letter, has withdrawn said writ petition relying upon

the letter dated 16.11.1993 issued by respondent No.2

wherein certain documents were required to be furnished

for restoration of lease hold rights.

8. In G.O.Ms.No.225 dated 23.03.1990, it is

submitted that the original lessee Mr.S.Bhagat Ram Gupta

and his successors-in-interest of the said leasehold rights

of the deceased lessee failed to run the unit of original line

of manufacture "Ready-made dresses unit" or revive it or

start a new unit so far in the leasehold premises, inspite of

several reminders and though ample opportunity was given

to them all these years. It is further submitted that the

entire land was kept idle without any industrial activity,

defeating the very purpose of individual use for which the

land was leased out.

9. In view of the wilful breach of the covenants and

violation of terms and conditions in respect of lease deed

dated 24.03.2019 agreed upon in respect of the leasehold

premises of plot No.21/1, admeasuring Ac.1 - 137 gts, the

Governor of Andhra Pradesh thereby terminated the

leasehold rights in the said plot of Industrial Area,

Azamabad.

10. The learned Judge has noted the letter dated

16.11.1993 issued by Commissioner of Industries, Andhra

Pradesh i.e., respondent No.2 to the petitioner wherein that

certain particulars / documents were required for taking

appropriate decision and requested to give undertaking to

pay the arrears of the enhanced rate or quit rent. It was

submitted by the petitioner before respondent No.2 that

the industry would be commenced within a period of one

(1) year from the date of re-delivery of possession of plot

and that the petitioner has complied with all the

requirements contained in the letter issued by respondent

No.2 dated 16.11.1993 and also withdrawn the writ

petition and paid the quit rent and submits that he had

legitimate expectation that industrial plot will be restored

to the petitioner as regards leasehold rights.

11. It was further submitted that in the year 1992,

the State Legislature enacted Azamabad Industrial Area

(Termination and Regulation of Leases) Act, 1992 [for short

'the Act' hereinafter] by which the subsisting leases in

Azamabad Industrial Estate were enmass terminated by

operation of law and the vires of the said Act were

unsuccessfully challenged before this Court and therefore

matter was taken before the Hon'ble Supreme Court

wherein, respondent No.1 represented before the Apex

Court and stated that it is going to come up with certain

amendments carrying considerable benefits to the

erstwhile lessees and on that promise the appeals in the

Hon'ble Supreme Court were closed.

12. Thereafter, the Act underwent amendment in the

year 2000 by Amending Act No.1/2000 and the amended

provisions have enabled not only fresh grant of leasehold

rights into freehold rights and also conversion of freehold

rights as per option of erstwhile lessees and thereafter

necessary applications under the amendment Provisions of

the Act was to be made as prescribed in the Rules. At the

time of pending representation of the petitioner, the Act

was promulgated and the representation of the petitioner

was kept pending till the Amending Act 1/2000 has come

into force. Thereafter, the petitioner has submitted

representation dated 12.08.2002 duly referring to his

earlier representation and prayed for grant of leasehold

rights over the industrial plots. Thereafter, petitioner has

submitted another representation on 17.03.2004 in

pursuant to the fresh notification dated 17.02.2004 for

grant of freehold rights. Respondent No.2 had rejected the

petitioners claim vide order dated 08.07.2004 on the

ground that there has been no industrial activity and that

the lessee has failed to utilize the land either for starting

any new unit or to revive the closed unit despite many

opportunities given by the Government since then and the

lessee remained as a non-user of the assigned plot since

1967. There was no industrial activity and the lessee

remained as non-user as on the appointed date i.e.,

17.02.2000 thereby attracting the provision of Section

3(1)(b) of the Act No.1/2000.

13. The petitioner submits that since he was called

upon to pay the quit rent as per the letter dated

16.11.1993 on the principle of promissory estoppel and

legitimate expectation, the respondents ought to have

restored the leasehold rights to him in which event, he

would have been a subsisting industrialist as on the date

when the Act and the Amended Act had come into force.

The petitioner would further submit that there was

continuous industrial activity over the industrial plot from

1963 when the lease was executed in favour of his father. It

is further submitted that respondent No.2 has taken a very

hyper technical ground and imaginary ground to reject his

claim and insofar there is absolutely no basis for such a

finding and hence the cancellation of lease order contended

in G.O.Ms.No.225 dated 23.03.1990 is erroneous and

baseless.

14. The main grievance of the petitioner is that

respondents have deceitfully made him to withdraw the

writ petition i.e., W.P.No.7205 of 1990 filed against the said

cancellation and due to fraud played on him, he has

withdrawn the writ petition. It is further submitted that as

part of the same strategy, respondent No.2 had allotted

industrial plot to respondent No.3 who is not entitled for

such an allotment since he is not an industrialist. Further,

the petitioner submits that respondent No.3 is a political

organization and to accommodate them by allotment of his

industrial plot is totally irrational and beyond any valid

reason and if respondent No.3 is eligible for allotment of

his industrial plot, it is absolutely ununderstandable as to

how he is disentitled to the same. That apart, respondent

No.3 has not complied with any of the provisions of the Act

and amendments provisions of the Act and hence rejection

of the claim to respondent No.3 is erroneous,

discriminatory and arbitrary.

15. Petitioner / appellant thereafter filed an appeal

before respondent No.1 under Section 9 of the Act and his

appeal was rejected vide Memo dated 08.11.2004,

challenging the same, petitioner preferred a writ petition in

W.P.No.21410 of 2004 and the said writ petition was partly

allowed on 17.02.2005 setting aside summary rejection

order and directed respondent No.1 to consider the

grounds of appeal on their own merit afresh and in

pursuance to the said order, respondent No.1 has passed

impugned memo dated 29.10.2005. It is submitted that

during the pendency of the writ petition, respondent No.4

had executed the sale deed in favour of respondent No.3

which is registered as Doc.No.3804/2005 alienating said

plot in favour of respondent No.3 for a total consideration

of Rs.17,19,500/- which according to the petitioner is

nothing but an undue favour conferred out of way in

favour of respondent No.3, when all the other industrial

plots in Azamabad Industrial Area were granted fresh

lease/fresh hold in favour of the subsisting lessees an no

sale deed is executed in respect of any other industrial

plots in Azamabad Industrial Area.

16. The petitioner is questioning the action of

respondents in permanently depriving his claim for grant of

lease / freeholder rights over the subject plot, which is

subject matter in W.P.No.25167 of 2005 and thus, from

any point of view, the action of selling industrial plot to

respondent No.3 is arbitrary and illegal. The petitioner

further submits that in the contractual matters, the action

of State should be transparent and free from arbitrariness

[2004(3) SCC 553].

17. Thereafter, learned Judge after noting the

contents of the counter filed by respondent Nos.1, 2 and 3

observed that while disposing the application of the

petitioner / appellant dated 17.03.2004, the Commissioner

of Industries and competent authority opined as follows:

"that the representation filed by Mr.B.Sathish Kumar

Gupta of M/s.S.B.Ram and Company along with

Application dated 17.03.2004 was examined and found

that he had violated lease conditions and the lease was

cancelled by Government vide G.O.Ms.No.225 dated

23.03.1990 and that the subsequent representation is only

a statement of intention of starting of an industrial activity

and that the earlier assurances were made difficult to

believe that the petitioner would start any industrial

activity and that M/s.S.B.Ram and Company was not

doing any industrial activity and thus they fall within the

provisions of Section 3(1)(b) and was fit for rejection.

Accordingly, the application of M/s.S.B.Ram and Company

for grant of leasehold rights was rejected vide office letter

Lr.No.13/1/2004/0025/0025/FD, dated 08.07.2004."

18. It is further observed that rejection of the grant of

freehold rights were strictly in terms of Act No.1/2000 and

that when the appeal filed by the petitioner / appellant has

been rejected, the Government has directed the

Commissioner of Industries to handover the land to

respondent No.4. Respondent No.2 after conducting

panchanama has handed over plot admeasuring 3414

sq.yds., in Plot No.21/1 to respondent No.4 on 18.11.2004

as per G.O.Ms.No.9718/IF Cell/A1/2004, dated

09.11.2004, which was questioned by the petitioner by

filing W.P.No.25167 of 2005. The learned Single Judge

while considering the applicability and the provisions of the

Act carefully taken note of the Act and observed that as

seen from the letter dated 16.11.1993, though in

W.P.No.7025 of 1990 which has been withdrawn, relating

to liberty or otherwise nothing has been specified and the

learned Judge has come to a conclusion that only in the

light of the compromise made, the writ petition had been

withdrawn. The learned Judge has considered Section 4 of

the Act cannot be invoked since the ingredients of Section

4 are not satisfied.

19. Learned Judge has referred to State of Orissa v.

Mangalam Timber Products Limited 1 and the relevant

paragraph is extracted hereunder:

"Having heard the learned counsel for the parties, we are satisfied that no case is made out for interference with the judgment of the High Court. Before the High Court, the principal plea of the respondent was that there was no contract in writing and therefore the applicability of the principle of promissory estoppel was not established. The High Court has rightly discarded this plea. To attract the applicability of the principle of estoppel it is not necessary that there must be a contract in writing entered into between the parties. We are not satisfied even prima facie that it was a case of an error committed by the State Government of which it was not aware. The State of Orissa should have, while holding out the representation, taken into consideration the fact-who will have to do re- plantation and that the permission of the Government of India would be needed for the purpose. The State cannot take advantage of its own omission. The State Government having persuaded the respondent to establish an industry and respondent having acted on the

AIR 2004 SC 297

solemn promise of the state Government, purchased the raw material at a fixed price and also sold its products by pricing the same taking into consideration the price of raw material fixed by the State Government and supplied, the State Government cannot be permitted to revise the terms for supply of raw material adversely to the interest of the respondent and effective from a back date and place the respondent in a situation which it will not be able to resolve. The respondent could not have revised their price from a back date and recovered it from innumerable consumers to whom their finished products were supplied at a fixed price."

20. In the case of Hira Tikkoo v. Union territory,

Chandigarh 2, the Hon'ble Supreme Court observed at

paragraph 25 as under:

"25. Surely, the doctrine of estoppel cannot be applied against public authorities when their mistaken advice or representation is found to be in breach of a Statute and therefore, against general public interest. The question, however, is whether the parties or individuals, who had suffered because of the mistake and negligence on the part of the statutory public authorities,

AIR 2004 SC 3648

would have any remedy of redressal for the loss they have suffered. The 'rules of fairness' by which every public authority is bound, requires them to compensate loss occasioned to private parties or citizens who were misled in acting on such mistaken or negligent advice of the public Authority. There are no allegations and material in these cases to come to a conclusion that the action of the authorities was mala fide. It may be held to be careless or negligent. In some of the English cases, the view taken is that the public authorities cannot be absolved of their liability to provide adequate monetary compensation to the parties who are adversely affected by their erroneous decisions and actions. But in these cases, any directions to the public authorities to pay monetary compensation or damages would also indirectly harm general public interest. The public authorities are entrusted with public fund raised from public money. The funds are in trust with them for utilisation in public interest and strictly for the purposes of the Statute under which they are created with specific statutory duties imposed on them. In such a situation when a party or citizen has relied, to his detriment, on an erroneous representation made by public authorities and suffered loss and where doctrine of 'estoppel' will not be invoked to his aid,

directing administrative redressal would be a more appropriate remedy than payment of monetary compensation for the loss caused by non- delivery of the possession of the plots and consequent delay caused in setting up industries by the allottees."

21. Learned Judge had observed that this was a long

drawn litigation and that the petitioner had been agitating

for his rights knocking the doors of the Courts repeatedly.

It may also be relevant to have a glance at the order made

in W.P.No.4561 of 2002 dated 19.07.2002;

"The brief facts of the case are that the father of the petitioner was grated lease of the land in Azamabad Industrial area for a period of 99 years in respect of Ac.1.137 by the Industries Department. However, the Government of Andhra Pradesh issued G.O.Ms.No.225, Industries and Commerce (IF-Cell) Department dated 23-3-1990 canceling the lease granted on 24-3-1987. Against the same, the petitioner filed Writ Petition. No.7025 of 1990, but in the meanwhile the Government enacted the act called azamabad industrial area (termination & regulation of leases) act by which all the leases in respect of Industrial area situated under Azamabad area stand cancelled. Consequently, the petitioner was

asked to withdraw the Writ Petition so as to consider his case for allotment of fresh lease under the Act. Thereafter, the petitioner had withdrawn the Writ Petition filed by him and he made a representation to the authorities for the grant of fresh lease but so far no action has been taken and therefore, the petitioner seeks appropriate directions. The petitioner also brings to the notice of this Court the communication sent by the General Manager, District Industries Center to the Commissioner of Industries in Lr.No.7761/1AA/B2/2002 dated 15-3-2002, wherein he has recommended for grant of lease of the land to the petitioner.

The learned Government Pleader for Industries submits that only small extent of land was allotted to Mandal Revenue Officer where the construction is being undertaken but however, for the purpose of allotment of fresh leases a notification has to be issued by the Commissioner of Industries and that exercise is yet to be taken. He also submits that as and when allotment takes place, the case of the petitioner also be taken into consideration keeping in view the earlier lease granted to his father.

In view of the above, the Writ Petition is disposed of directing the petitioner to make fresh

application for grant of lease within a period of two weeks from the date of receipt of a copy of this order and on such application the Commissioner while considering the allotment of Industrial plots on lease basis, shall consider the case of the petitioner and take appropriate decision in this regard. No costs."

ANALYSIS AND CONCLUSION:

22. The grounds urged in the writ appeals are that

learned Single Judge, having noted that W.P.No.7025 of

1993 was withdrawn pursuant to the letter dated

16.11.1993 by respondent No.2 ought to have held that

subsequent rejection of the case of the appellant by the

respondent was illegal and unjustified.

23. In W.P.No.7025 of 1993, the following order was

passed on 30.11.1993:

"The learned counsel for the petitioners wants to withdraw the writ petition. Accordingly, the writ petition is dismissed as withdrawn. No costs."

23.1. The writ petition was withdrawn without

reserving any liberty to the petitioner as such the

submission made by the appellant that subsequent

rejection of the case of the appellant by respondent as

illegal and unjustified is unsustainable. Learned Single

Judge had observed that W.P.No.7025 of 1993 which had

been withdrawn, relating to liberty or otherwise nothing

had been specified in the order dated 30.11.1993 and

hence this Court may have to arrive at the inevitable

conclusion that only in the light of the compromise made,

writ petition had been withdrawn. Hence, the learned

Single Judge has rightly come to a conclusion which

warrants no interference.

24. Considering the facts and circumstances and also

the stand taken by the respective parties and the orders

passed in the earlier writ petitions, learned Judge opined

that the Government is not justified in totally ignoring the

stand taken by the writ petitioner especially in the light of

the assurance, made at a particular point of time in

pursuance of which, the writ petition had been withdrawn

and also can be seen from the subsequent events and the

series of writ petitions and the orders made therein and in

the light of the provisions of the Act and also the specific

stand taken by respondent No.3 and that it would not be

proper to disturb the allotments which had already been

made earlier and keeping in view of the fact that the

possession had been taken long back and delivery also was

made sufficiently a long time ago and much water had

flown thereafter. Though, the learned Judge was inclined to

confirm the allotments made earlier and subsequently,

when it is brought to the notice of the learned Judge that

further sufficient extent of land is leftover in the subject

matter of the writ petition had directed the Government to

consider the case of the petitioner in the light of the facts

and circumstances and take appropriate decision in

accordance with law.

25. In the light of the above, learned Judge disposed

of the writ petitions with a direction to the petitioner to

make a representation in detail within a period of two

weeks from the date of receipt of a copy of the said order

narrating all the facts and circumstances to the competent

authority / Government and that the Government shall

take decision in that regard within a period of six (6) weeks

thereafter.

26. We have carefully taken note of all the facts and

circumstances in both the writ petitions above and also the

submissions made by learned counsel on either side.

Learned Single Judge has elaborately considered the

submissions of both sides and has rightly disposed of the

writ petitions with an opportunity being given to the

petitioner to make a representation for the left over lands

in the subject matter of the writ petition. It was not

brought before this Court either at the time of submissions

or in the grounds of the writ appeal, whether any

representation is being filed by the petitioner / appellant

subsequent to the passing of the impugned order.

27. Therefore, we do not find any reason to interfere

with the common order dated 13.11.2007 in

W.P.Nos.25167 of 2005 and 7619 of 2006 passed by the

learned Single Judge and the relief as such sought for in

the present writ appeals cannot be entertained.

28. For the reasons stated above, writ appeals in

W.A.Nos.461 and 462 of 2008 fails and are accordingly

dismissed.

Miscellaneous applications pending, if any, shall

stand closed. However, there shall be no order as to costs.

______________________________________ ALOK ARADHE, CJ

______________________________________ N.V.SHRAVAN KUMAR, J

29.12.2023 mrm