IN THE HIGH COURT OF JUDICATURE AT PATNA C.W.J.C. NO. 9692 OF 2010 M/s Bihar Jute Mills (India) Private Limited, a Company incorporated under the provisions of the Companies Act, having its registered office at I/J-1, 1st Floor, Chandi Vyapar Bhawan, Exhibition Road, P.S. Gandhi Maidan, District Patna, through its Director, Shambhu Prasad Gupta, son of Shri Krishnadeo Prasad Gupta, resident of village Dhanukhi, P.O. & P.S. Lalmaniya, District-Madhubani. ……. Petitioner. Versus 1. The State of Bihar, through the Principal Secretary, Department of Industries, Government of Bihar, Patna. 2. The Principal Secretary, Department of Industries, Government of Bihar, Patna. 3. The Bihar Industrial Area Development Authority, 1st Floor, Udyog Bhawan, East Gandhi Maidan, Patna, through its Managing Director. 4. The Managing Director, Bihar Industrial Area Development Authority, 1st Floor, Udyog Bhawan, East Gandhi Maidan, Patna. 5. The Executive Director, Bihar Industrial Area Development Authority, Large Industrial Estate, Barari, District-Bhagalpur. 6. The Working Director, Bihar Industrial Area Development Authority, Large Industrial Estate, Barari, District-Bhagalpur. 7. The Development Officer, Bihar Industrial Area Development Authority, Large Industrial Estate, Barari, District-Bhagalpur. 8. Moti Babu Institute of Technology, Farbesganj, District-Araria. …… Respondents. --------- For the petitioner : Mr. Jitendra Singh, Senior Advocate with Mr. Suraj Samdarshi, Advocate. For respondent nos. 1 & 2 : M/s. Rajendra Kumar Jha & M. K. Mishra, Advocates. For respondent nos.3 to 7 : Mr. Lalit Kishore, Senior Advocate with Mr. Piyush Lall, Advocate. For the respondent no.8 : Mr.Chitaranjan Sinha, Senior advocate with M/s Anil Singh & Siddhartha Prasad, Advocates. ----------- P R E S E N T HON’BLE MR. JUSTICE S.N. HUSSAIN -------- O R D E R 22/ 07.07.2011 This writ petition has been filed by the petitioner challenging order dated 04.05.2010 by which the Board of Directors of the Bihar Industrial Area Development Authority (hereinafter referred to as ‘BIADA’ for the sake of brevity) - 2 - (respondent no.3) cancelled allotment of Industrial Plot Nos.7, 85 and 86 measuring 5 acres in Forbesganj Industrial Area to the petitioner-company for establishment of jute yarn and jute twine. This decision of the Board of Directors was intimated to the petitioner vide letter dated 25.05.2010 (Annexure-13) issued by the Managing Director of BIADA (respondent no.4). A declaration has also been sought by the petitioner that BIADA cannot cancel the land of allottee in such case and the same cannot be done in a mechanical manner and to direct the authorities to ensure removal of overhead high tension wires and poles from the aforesaid industrial plot to enable the industrial activity of the petitioner- company to continue and also for restraining BIADA and its authorities from creating any third party right over the property in question. 2. The petitioner is a company incorporated under the provisions of the Companies Act, 1956 having registered head office at Patna and after due procedure of law the aforesaid five acres of land was allotted to the petitioner by BIADA on 90 years lease vide its letter dated 05.04.2007 (Annexure-1) for the purpose of establishing an industry for manufacture of jute yarn and jute twine and thereafter the aforesaid 5 acre was physically handed over to the petitioner on 05.07.2007. 3. Learned counsel for the petitioner submitted that petitioner filed an application on 17.07.2007 before the authorities of BIADA stating that Plot Nos. 7, 85 and 86 were approach road of N.H.57 and hence it was difficult to erect boundary on the plot allotted by BIADA. On this representation, inspection was made - 3 - and ultimately vide order dated 21.09.2007 (Annexure-2), the Managing Director of BIADA changed the aforesaid land to 5 acre of plot nos. 4, 5 and 6, whereafter possession of the said new plots were handed over to the petitioner on 28.09.2007 in lieu of plot nos. 7, 85 and 86. 4. Learned counsel for the petitioner further submitted that on the freshly allotted land 11 KVA high tension wire was crossing almost in the middle of the land and hence on 10.12.2007 (Annexure-7), petitioner requested the Managing Director of BIADA to get electric poles and electric wires passing through the land allotted to the petitioner removed. The Executive Director on the same date, i.e. 10.12.2007(Annexure-4) sent letter to the Executive Engineer, Bihar State Electricity Board, Forbesganj for removal of high tension wire and poles from the aforesaid plot so that the construction for establishment of the said industry could be started. In response to the said letter, the Electrical Executive Engineer wrote letter dated 08.02.2008 (Annexure-5) to the Managing Director of BIADA asking him to deposit Rs.1,35,274.00 as cost of removal before the Bihar State Electricity Board (Rural Electrification Deposit Works), Patna. 5. Learned counsel for the petitioner has stated that the authorities of BIADA neither deposited the said amount or any part thereof in the Bihar State Electricity Board nor informed the petitioner with respect to the demand of Electrical Executive Engineer and all of a sudden the Managing Director of BIADA sent letter dated 28.06.2008 (Annexure-6) demanding an alleged outstanding amount of Rs.1,55,550.00 alleging that inspite of lapse - 4 - of about one year from the date of handing over of physical possession of the land the petitioner had failed to commence production activity which was construed as a violation of the terms and conditions of allotment. The petitioner sent his reply to the said authority stating that construction activity could not be carried out only because of the existence of high tension wire and poles passing through the middle of the plot allotted to the petitioner for which the petitioner had been informing the authorities time and again. The said letter of the petitioner remained unheeded and un- answered. 6. Learned counsel for the petitioner also stated that after about six months a letter dated 11.06.2009 (Annexure-8) was sent by the Development Officer of BIADA (respondent no.7) to the petitioner by way of last show cause notice asking the petitioner to show cause as to why even after lapse of two years, no production activity was being carried out and balance payment was not being made. The petitioner immediately sent his reply dated 20.06.2009 (Annexure-9) again bringing to the notice of the respondents-authorities his repeated request for removal of overhead high tension wires and poles from the land in question without which construction activity was not possible. It was further stated that although the said letter was acknowledged by the respondents, but without any reference to it or to the removal of overhead high tension wire and poles a notice was issued by the Development Officer of BIADA dated 03.08.2009 (Annexure-10) for payment of balance amount of Rs.3,18,030.00 within fifteen days. - 5 - 7. Learned counsel for the petitioner further claimed that thereafter the petitioner kept on representing the respondents- authorities bringing the factual aspect of the matter to the notice including his letter dated 15.02.2010 (Annexure-11). In the said letters it was stated that approximately Rs.40.00 lakhs had already been invested by the petitioner in the factory building and an advance of Rs.35.00 lakhs had been made to the suppliers of machinery. It was also stated that bankers had also finalised the project and a request was made that six months’ period be granted to the petitioner to commence production. Thereafter also several representations (Annexure-12 series) were filed by the petitioner for the same purpose before different authorities of BIADA. Learned counsel for the petitioner claimed that in spite of the aforesaid facts, the impugned decision was taken by the Board of Directors of BIADA on 04.05.2010 which was communicated to the petitioner by Managing Director of BIADA vide letter dated 25.05.2010 (Annexure-13) which is also under challenge. 8. Learned counsel for the petitioner argued that he has throughout acted as per the provisions of the lease deed dated 06.03.2008 (Annexure-15) as well as according to the terms and conditions of the bond which was executed by the petitioner on 30.04.2007 and was accepted by the authorities of BIADA on 04.05.2007 (Annexure-14). He further argued that all necessary steps had been taken by the petitioner, but nothing had been done by the respondents. Hence, after paying first instalment the petitioner stopped payment of further instalments waiting for removal of the high tension overhead wires and poles from the - 6 - land in question. He also averred that the impugned action of the respondents was also premature as the lease is for a much longer period and the authorities were bound to wait for at least seven years after removal of the high tension overhead wires and poles. 9. On the other hand, learned counsel for the Bihar Industrial Area Development Authority and its authorities (respondent nos. 3 to 7) vehemently opposed the contentions of learned counsel for the petitioner and submitted that the case of the petitioner can rise or fall on the materials produced by him alone and he cannot take help of absence of any material or action of the respondents. He further stated that high tension overhead wire and poles were passing through the land in question from before and the petitioner had full knowledge of the same but even then he chose the said plots himself as is clear from the communication between the parties (Annexure-A series) and BIADA acceded to the request of the petitioner made in his petition dated 21.05.2007 (Annexure-2). 10. Learned counsel for respondent nos. 3 to 7 also claimed that high tension wire was not passing through the middle of the plots, rather there was a larger portion of 3.40 acres on one side which was sufficient for establishing small scale industry, whereas remaining smaller portion on the other side of the wire could be used for small structures and hence the plea of the petitioner was absolutely frivolous and was being used merely as an excuse for the delay in the establishment of the industry and the payment of the amount dues, violating the terms of allotment. 11. Learned counsel for respondent nos. 3 to 7 - 7 - submitted that clauses 6 and 8 of Bond dated 30.04.2007 (Annexure-14) executed by the petitioner specifically mentioned payment of seven equal monthly instalment without any condition or reservation and on that basis allotment was made in petitioner’s favour on 05.04.2007 (Annexure-1). Hence, the petitioner cannot legally rake up such frivolous issue merely for the purpose of non- payment of the dues as he was bound by his own unconditional undertaking as well as the terms of allotment. 12. Learned counsel for respondent nos. 3 to 7 also argued that the deed of lease was executed between the parties on 06.03.2008 (Annexure-15) and in the very beginning thereof the mode of payment was given and in clause 4 (b) of Part-II thereof it had been clearly stipulated that if effective steps were not taken within the fixed period to establish the industry, the authority shall cancel the allotted plot/shed and also forfeit the amount deposited in this connection, whereas in Clause-7 thereof it was provided that in case of breach by the lessee of any of the terms and conditions, the lessor shall have the right to terminate the lease and forfeit the consideration money, resume, take possession and enter upon the whole of the said land without payment of any compensation to the lessee. Hence, he avers that in the light of the aforesaid provision in the lease the impugned action of the authorities of BIADA is legal and justified. 13. Learned counsel for respondent nos. 3 to 7 also claimed that show causes were sent to the petitioner, i.e. one dated 26.08.2008 (Annexure-B) and the other dated 11.06.2009 (Annexure-8) to which the petitioner replied on 20.06.2009, but - 8 - neither any amount was paid by the petitioner till date, nor the industry had been established by him as was clear from the information obtained from the Ministry of Corporate Affairs (Annexure-F) although vide letter dated 15.02.2010 the petitioner had himself requested for six months time for commencing the production in the industry. 14. Learned counsel for respondent nos. 3 to 7 further stated that letter dated 08.02.2008 (Annexure-5) sent by the Electrical Executive Engineer of Bihar Electricity Board for depositing any sum for removal of high tension overhead wire and poles from the land in question was never received in the office of the Managing Director of BIADA and only recently he got it on 14.06.2010. He further submitted that the petitioner also never approached the authorities of BIADA for the same nor deposited the estimated money for shifting the wires and the poles. He also argued that order dated 25.06.2010 had been passed by this court in the instant case on the claim of the petitioner that he was willing to deposit the entire amount for shifting of the overhead high tension wire and the dues of BIADA which shows that he had never paid the said amount earlier hence impugned step taken by the authorities are justified. 15. Learned counsel for respondent nos. 1 and 2 supported the claim of respondent nos. 3 to 7 and adopted the arguments raised by learned counsel for respondent nos. 3 to 7. 16. Learned counsel for respondent no.8 also supported the arguments raised by learned counsel for respondent nos. 3 to 7, but in furtherance thereof he stated that respondent no.8 Moti Babu - 9 - Institute of Technology is an Engineering College in the process of being established by Innotech Educational Society which is a society registered under the Society Registration Act, 1860 on 22.03.2010 and for that purpose respondent no.8 filed an application on 08.02.2010 for allotment of 15 acres of land. He further stated that State Investment Promotion Board also granted approval for establishing the Engineering College (respondent no.8) on private investment by the respondent-society to which no objection was given by Science and Technology Department, Govt. of Bihar on 11.06.2010, whereafter BIADA vide letter dated 15.05.2010 allotted 8.73 acres of land at the Industrial Area Forbesganj to respondent no.8 for setting up an Engineering College on lease of 90 years on the terms and conditions contained in the said allotment letter and subsequently possession of the said land was also handed over to respondent no.8 and certificate of possession was granted by the authorities of BIADA on 12.06.2010 (Annexure-I). 17. Learned counsel for respondent no.8 also argued that vide letter dated 07.06.2010 (Annexure-J) the authorities of BIADA allotted further 5 acres of land of Plot nos. 4, 5 and 6 at the Industrial Area, Forbesganj which was adjacent to its earlier allotted land on similar terms and conditions and in compliance of its terms respondent no.8 deposited 30% of the amount fixed to the BIADA on 09.06.2010 for which money receipt (Annexure-K) was also issued and the said allotment was also affirmed by office order dated 18.06.2010 (Annexure-L), but actual possession could not be given to respondent no.8 and only possession on paper was given - 10 - to respondent no.8 on 19.06.2010 (Annexure-M). Learned counsel for respondent no.8 also averred that he had no problem in taking possession and starting work on 8.73 acres of land allotted to it, but when on 20.06.2010 it tried to take actual possession of further 5 acres of Plot No. 4, 5 and 6 which was earlier allotted to the petitioner, they were forcibly stopped by the representative of the petitioner, hence respondent no.8 filed representation dated 20.06.2010 to the District Magistrate, Araria, a copy of which was also sent to the Managing Director of BIADA who forwarded the same to the District Magistrate, Araria on 25.06.2010 for necessary steps. 18. Learned counsel for respondent no.8 claimed that in the aforesaid facts and circumstances when this writ petition was filed by the petitioner on 24.06.2010, respondent no.8 was not impleaded although it was a necessary party for the litigation as a right had already accrued in it, hence, respondent no.8 filed an interlocutory application for intervention and only thereafter he was impleaded as respondent no.8 on the orders of this court. 19. Learned counsel for respondent no.8 also claimed that last paragraph of allotment letter of petitioner dated 05.04.2007 (Annexure-1) specifically provided that if the amount was not deposited within thirty days and the construction work of the unit was not started within six months and production work did not commence within two years from the date of issue of allotment letter, the allotment order would automatically be cancelled in both the cases without prior notice and the amount so deposited will be forfeited. He relied upon letter dated 26.08.2008 (Annexure-B of - 11 - C.A. of R/ 3 to 7) by which the said terms and conditions were reiterated and the petitioner was directed to deposit the due amount within fifteen days to start the production work without any delay failing which allotment was to be cancelled, but even then the petitioner did not comply the said terms and conditions due to which BIADA had to send show cause notice to the petitioner on 11.06.2009 (Annexure-8). He also stated that in response to the said show cause the petitioner sent letter dated 20.06.2009 (Annexure-9) to the Development Officer of BIADA undertaking that the entire due amount shall be paid within three months, but even that undertaking was not fulfilled. 20. Learned counsel for respondent no.8 averred that in paragraph 19 of the writ petition the petitioner had stated that he had paid advance money to the suppliers of machines and had also spent huge amount for development of the plot, construction of boundary wall and part construction of building, but the said statement is absolutely false and the payment receipts as well as certificate of Charted Accountant contained in Annexure-16 are forged and fabricated. In support of the said contention, learned counsel for respondent no.8 relied upon a letter dated 09.10.2010 (Annexure-P) issued by the supplier-company stating that the money receipts produced by him were false and it had decided to initiate an appropriate criminal legal action against the petitioner. Hence, he prayed that strictest legal action against the petitioner be initiated for misleading the court and betraying the due process of law. 21. Learned counsel for respondent no.8 further averred - 12 - that there is no collusion between the claim of BIADA (respondent nos. 3 to 7) and the claim of respondent no.8 as the action taken against the petitioner was much prior to respondent no.8 coming into picture and hence once an appropriate action has been taken against the petitioner in accordance with law, he had no manner of claim left as his allotment had already been cancelled much before the plot in question were allotted to respondent no.8. Hence, he submitted that claim of the petitioner is fit to be dismissed. 22. From the pleading and materials of the respective parties, it is not in dispute that plot nos. 7, 85 and 86 measuring 5 acres in Forbesganj Industrial Area were allotted to the petitioner- company on 05.04.2007 by BIADA on 90 years of lease for the purposes of establishing an industry for manufacturing jute yarn and jute twine, but subsequently vide order dated 21.09.2007 plots were changed by the BIADA itself and in place of plot nos. 7, 85 and 86, other plots in the same Industrial Area , namely plot nos. 4, 5 and 6 were allotted to the petitioner and possession thereof was given to the petitioner on 28.09.2007 and accordingly lease deed dated 28.09.2007 were executed by the parties with respect to the said plot nos. 4, 5 and 6. 23. It is also not in dispute that high tension overhead wires are passing through the said land allotted to the petitioner which is apparent from letter of the Development Officer sent to the Managing Director of BIADA dated 30.06.2010 (Annexure-E) and the map attached thereto. It further shows that on the south of the said wire 1.91 acres of land of the said plot is situated, whereas on the north of the wire, the remaining 3 and odd acres of land is - 13 - situated. Hence, it is quite apparent that due to the existence of the said high tension overhead wires of 11,000 voltage complete construction of an industry was not feasible. The plea of the respondents that on one side of the wire main industry building can be constructed and on the other side of the wire small constructions can be made appears to be absolutely frivolous especially when it was the duty of the respondents-authorities to give vacant land to the petitioner free from all such problems so that an industry could be established in a proper manner. 24. So far the question of earlier knowledge of the petitioner with regard to aforesaid high tension overhead wires is concerned, since the land was suitable for the purposes of the petitioner he had accepted the same and from the letters and representations repeatedly sent by the petitioner to the authorities of BIADA it is quite apparent that the petitioner had legitimate and bonafide expectation that the authorities will get the high tension overhead wires removed from there. It is also admitted that immediately after allotment of the aforesaid plots, the petitioner filed a representation dated 10.12.2007 to the Managing Director of BIADA who immediately sent letter on the same date bearing memo no.1205/D to the Executive Engineer, Bihar State Electricity Board, Forbesganj. Hence it was the duty of the authority of BIADA to continue with their efforts for removal of the said high tension overhead wires from the land allotted to the petitioner until they were actually removed especially when the petitioner had been repeatedly requesting the authorities of BIADA for the same. It will be quite relevant to mention here that no one, - 14 - except the people of the Electricity Board or the Electricity Department, were legally entitled to even touch the said high- tension electric wires and hence it could have been removed only by the authorities of the Electricity Board/Department on the direction/request of BIADA which was the owner of the plot in question. 25. The petitioner has produced a letter dated 08.02.2008 written by the Electrical Executive Engineer to the Managing Director of BIADA in which request for payment of Rs.1,35,274.00 was made for removal of the said High Tension overhead wires and poles but learned counsel for the BIADA has claimed that the said letter was never received in its office, rather it was much subsequently handed over by the petitioner. This plea of the respondents are clearly not sustainable as it was the duty of the authorities of BIADA to pursue their requests for removal of the said wires and poles before the authorities of the Electricity Board and had they done so they would have known about the said requirement. In the said circumstances, it is quite apparent that the authorities of BIADA failed to perform their duties with respect to removal of the high-tension wires and the poles from the land in question and they did not even inform the petitioner for making any such payment. Hence, they did not act fairly and reasonably in fulfilling the legitimate and bonafide expectation of the petitioner. In this regard, reference may be made to a decision of the Apex Court in case of Kerala Samsthana Chethu Thozhilali Union Vs. State of Kerala & Ors, reported in( 2006)4 S.C.C.327. 26. So far the question of payment is concerned, much - 15 - reliance had been placed by learned counsel for the respondents upon the bond executed by the petitioner on 30.04.2007 but the said bond was executed much before 21.09.2007 when plot nos. 4, 5 and 6 measuring 5 acres were allotted to the petitioner in place of earlier plot nos. 7, 85 and 86. Immediately after the said allotment of the lands, the petitioner has raised his objection with regard to high tension overhead wires and poles which have been detailed above. Even in his show cause dated 20.06.2009, the