IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE V.K.MOHANAN TUESDAY, THE 25TH AUGUST 2009 / 3RD BHADRA 1931 WP(C).No. 16957 of 2003(R) --------------------------------------- PETITIONER: ------------------- M/S.MAGNUM GLASS WORKS, PLOT NO.28, CHEMICAL INDUSTRIAL ESTATE, AROOR P.O., ALLEPPEY, REPRESENTED BY IT'S MANAGING PARTNER. BY ADVS. MR.P.SANJAY, MR.A.PARVATHI MENON, MR.ANUB ALIAS, SMT.PRIYA RAMESH. RESPONDENTS: ------------------------ 1. THE STATE OF KERALA, REPRESENTED BY SECRETARY, INDUSTRIES DEPARTMENT, SECRETARIAT, TRIVANDRUM. 2. DIRECTOR OF INDUSTRIES, TRIVANDRUM. 3. THE DISTRICT INDUSTRIES CENTRE(DIC), ALLEPPEY, REPRESENTED BY IT'S GENERAL MANAGER. R1 TO R3 BY GOVERNMENT PLEADER MR. BIJOY CHANDRAN. THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 25/08/2009, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: W.P.(C). NO.16957/2003-R: APPENDIX PETITIONERS' EXHIBITS: EXT.P.1: COPY OF THE RE-ISSUED RULES GO(MS) NO. 297/70/ID DT. 24/08/1970. EXT.P.2: COPY OF THE AGREEMENT DTD. 16/08/1972. EXT.P.3: COPY OF THE PATTA ISSUED BY TAHSILDAR, CHERTHALA DTD. 11/02/1994. EXT.P.4: COPY OF THE NOTICE NO. D/4300/70 DT. 22/07/98 OF R.3. EXT.P.5: COPY OF THE REPLY NOTICE DT. 29/07/98. EXT.P.6: COPY OF THE NOTICE DT. 30/01/99 OF THE PETITIONER. EXT.P.7: COPY OF THE APPLICATION SUBMITTED BY THE PETITIONER BEFORE THE KSEB DT. 29/01/99. EXT.P.8: COPY OF THE APPLICATION SUBMITTED BY THE PETITIONER BEFORE THE SECRETARY, AROOR GRAMA PANCHAYAT DT. 29/01/1999. EXT.P.9: COPY OF THE ORDER NO. D/4300/70 DT. 19/05/2003 OF THE R.3. EXT.P.10: COPY OF THE GRAPH SHOWING GROWTH. EXT.P.11: COPY OF THE REPRESENTATION SUBMITTED BY THE PETITIONER BEFORE THE R.3. DT. 30/05/2003. EXT.P.12: COPY OF THE ROUGH SKETCH OF THE PLOT WITH BUILDINGS. RESPONDENTS' EXHIBITS: NIL. //TRUE COPY// P.S. TO JUDGE. Prv. V.K.MOHANAN, J. ---------------------------------------- WPC. No.16957 OF 2003 ---------------------------------------- Dated, 25th day of August , 2009 JUDGMENT The petitioner namely, M/s.Magnum Glass Works, represented by its Managing Partner preferred this writ petition aggrieved by Ext.P9 order issued by the 3rd respondent by which 20 cents of land out of 36 cents given to the petitioner by virtue of Ext.P1 rules and Ext.P2 agreement and Ext.P3 Patta. Therefore, the writ petition is filed with a prayer to quash Ext.P9 and for a declaration that the respondents cannot resume the land or any portion of it except on satisfying the requirements prescribed in Ext.P1 Rules. 2. The specific case of the petitioner is that the petitioner has started a small scale industrial unit in the 36 cents of land allotted to them on the basis of Ext.P2 agreement and Ext.P3 assignment was given subsequently. On the basis of the above documents, they have started the industrial unit and the same was running for more than 30 years. That being the position, the petitioner received Ext.P4 notice dated 22.7.98. Ext.P3 Patta was issued in favour of the petitioner on 11.2.94. After 4 years, Ext.P4 notice was issued stating that on inspection it is found that WPC 16957/03 -:2:- 20 cents of land out of 36 cents is lying vacant and therefore directing them to inform the reason for non utilization of land , within 15 days, failing which the unutilized land will be resumed to the department without further notice. Against the Ext.P4, the petitioner submitted Ext.P5 reply dated 29.7.98. In Ext.P5, details were given as to how the allotted plot was being utilized and the further proposal and plan for diversification programme in the allied sector viz. in glass decoration, Besides Ext.P5 reply, the petitioner has also submitted Ext.P6 proposal before the 3rd respondent by which the 3rd respondent was requested to accord sanction to undertake various civil construction under the proposed project. Ext.P6 is dated 30.1.99 After ext.P5 reply and Ext.P6 representation, nothing heard from the part of the 3rd respondent and that being the position, all of a sudden, Ext.P9 order was issued on 19.5.2003 by which , an extent of 20 cents of unutilized land lying on the western side out of 36 cents comprised in sub- divisions 2,3, and 6 of Survey No. 408 of Aroor village, Cherthala Taluk, allotted to M/s Magnum Glass Works ordered as resumed and taken possession by the 3rd respondent and the petitioner is also directed to pay 6.5% resumption interest from the date of taken possession of the land to the date of resumption of the land to the WPC 16957/03 -:3:- department. It is the said order challenged in this writ petition. 3. The 3rd respondent filed counter affidavit in which it is admitted that 36 cents of land comprised in sub division 2,3 & 6 of Sy,No.408 in Aroor Village Cherthala taluk allotted to the petitioner ad taken possession by the petitioner. The unit was allotted to 36 cents of land in chemical Industrial Estate, Aroor in the year 1972 for starting the unit. The counter affidavit states that on inspection conducted during 1998, after 26 years, it was seen that 20 cents of land allotted to the petitioner company was unutilized contrary to the agreement of allotment. In the counter affidavit, it is also referred about the reply dated 24.7.98 sent by the petitioner. It is further stated in the counter affidavit that on 11.4.2003, another inspection was conducted at the premises of the petitioner company and found that the above referred land is till remaining unutilized by the unit contrary to their reply statement to Ext.P4 notice dated 18.7.98. Thus according to the respondent, a substantial portion of the land allotted to the petitioner was keeping idle for long time, in violation of the agreement executed by the petitioner company with the Government. According to the 3rd respondent, the land was resumed under the above circumstances as the respondent has no other way but to resume WPC 16957/03 -:4:- the land. 4. I have heard Sri P.Sanjay, the learned counsel appearing for the petitioner and also the learned Government Pleader and also perused the materials on record. 5. The learned counsel invited my attention to Ext.P1 Rules , particularly, Rules 9, 24, and 26. On the basis of the above rules, it is submitted that by issuing Ext.P3 Patta, the entire land , i.e. 36 cents given in the ownership of the petitioner and , the government's ownership over the property by Ext.P3 patta. By virtue of Rules 24 and 26, especially, when the entire amount in terms of Ext.P2 agreement was paid, the government has no ownership over the property in question and therefore, Ext.P9 order is without any authority. It is the specific case of the learned counsel that the department can resume the land only on satisfaction of any of the ground enumerated in rule 9 of Ext.P1 rules. In the present case, in Ext.P9, nothing is stated about the violation or satisfaction of any of the conditions mentioned in Rule 9. According to the learned counsel, the entire proceedings at a belated stage initiated and which culminated in ext.P9 order, are with a view to help some interested persons and with mala fide intention. WPC 16957/03 -:5:- 6. On the other hand, the learned Government Pleader submitted that in violation of the conditions contained in Ext.P2 agreement and the rules mentioned above, 20 cents of land remained unutilized and idle, though the petitioner has claimed 36 cents of land for running the small scale industrial unit. According to the learned Government Pleader, the property in question has earned potential value and persons who are prepared to invest in the industrial area are waiting for allotment of property and it was under the above factual background, the unutilized land was resumed as per Ext.P0 proceedings. 7. I have carefully considered the arguments advanced by the learned counsel for the petitioner and also the learned Government Pleader. I have perused the materials available on record and also the Rules. Which govern the field 8. The Rules promulgated by the Government as per G.O (Ms) No.297/70/ID dated 24.8.1970, namely, “ The rules for the sale of land in development plots on hire purchase basis”, the rules governs the field. Rule 9 of the said Rules is the enabling provision which the government can resume the land. Rules 9 reads: WPC 16957/03 -:6:- “9. The Director of Industries & commerce shall have the power to resume the land allotted to an industrialist as per these Rules under any of the following circumstances: (i) If the allottee contravenes any of the provisions of these rules or of the agreement executed by him. (ii) In the event of the concern belonging to the industrialist being wound up or transferred to another person or company or groups of persons without prior approval of the Director of Industries & commerce. (iii) If the allottee does not require the land for the purpose for which it is allotted and informs the Director of Industries & Commerce accordingly. (iv) In the event of the allottee defaulting payment of two instalments consecutively. (v) In the event of the allottee not commissioning the industry within one year of the date of allotment or within such further time as may be granted by the Director of Industries and Commerce.” From a reading of the above rules, it appears that the department can resume the land on the satisfaction of any WPC 16957/03 -:7:- or all of the sub-rules mentioned in rule 9. Though I have repeatedly gone through the said sub-rules of Rule 9, I failed to see a provision which enables the government to resume land or part of the land, which already allotted, on the ground of non-utilisation of any part, thereof. 9. It is true, in Ext.P4 notice, it is stated that 20 cents of land out of 36 cents already allotted was lying idle or unutilized . To Ext.P4 notice, the petitioner has already filed Ext.P5 reply dated 29.7.98. In Ext.P5 it is stated that due to paucity of funds , the unit was unable to comply with the rules and regulations and only at that time they could set apart some fund for the fulfillment of the requirements and were using Liquified Petroleum gas (LPG) and Industrial Oxygen gas as fuels for melting the glass. According to Ext.P5, they were under the process of preparing the design and estimate for the construction of sheds for storing LPG and Oxygen gas in their land adjacent to the main building. It is also stated that they have installed a generator due to power failure and load shedding. It is stated that their employees were utilizing very limited space in the factory hall for keeping their belongings and to spend their leisure time, and hence, they have intended to provide them with rest room, cloak room separately for ladies and gents WPC 16957/03 -:8:- and proposal for constructing shed in the land and work on design and estimate was fast progressing. In Ext.P5 they have stated : “With our present laboratory glassware and apparatus manufacturing activity, we are not able to achieve large sales volume. Market for the present line of products is very exclusive and limited. So, we are planning a diversification programme in the allied sector, viz., glass decoration. This is a very sophisticated and volume involved operation requiring extensive areas for storage and production lines which in turn demand full utilization of our land. As result of the proposed diversification, it is expected that additional employment opportunities for about 30 workers can be provided. It is also essential to diversify in order to maintain the existing workforce. Study of the project and negotiating with a major player in the field to strike a contract for the supply of new product is fast progressing . We hope to submit you our project report on this soon. For implementing various civil constructions mapped above and also for the new diversification project, we need term loan and working capital enhancement from our bankers with whom the land and building are mortgaged. If you proposed to reduce the holding limit of the land owned by us, the bank would not hesitate to stop the WPC 16957/03 -:9:- present financial assistances sanctioned to us and will not entertain our application for fresh term loan or additional working capital limit. We also wish to state that this is the only property we have to offer as collateral security to the bank. Further we also understand that under the present CRZ rules, no new construction is allowed except in the case of an existing occupant in a land near to the back-waters.” 10. From Ext.P5 reply it can further be seen that the unit was planning a diversification programme in the allied sector, namely, glass decoration and the said project is very sophisticated and volume involved operation requiring extensive areas for storage and production lines which in turn demand full utilization of land allotted to them. It is also discernible from Ext.P5 that , for implementing various civil constructions indicated in the foregone paragraph and also for the new diversification project, they need loan and working capital etc. for which, they have stated that applications were being mooted etc. After filing Ext.P5 reply dated 29.7.98, they preferred Ext.P6 dated 30.1.99 which would show the details of the project they proposed to undertake and establish in the land allotted to them. By item No.3 in Ext.P6 states about a letter which was enclosed along with Ext.P6, seeking sanction of WPC 16957/03 -:10:- the department to undertake various civil constructions under the proposed programme. Ext.P7 is the copy of the letter addressed to the Assistant Executive Engineer, KSE Board for power allotment. It is thereafter Ext.P9 order was issued during the year 2003, after a lapse of 4 years from Ext.P6 representation. 11. The Department has no complaint that the petitioner has not paid the full cost of the land allotted to the allottee at the time of issuing Ext.P4 notice. Sub-rule 5 of Rule 9 says that in the event of the allottee not commissioning the industry within one year of the date of allotment or within such further time as may be granted by the Director of Industries and Commerce, the property can be resumed. Admittedly , in the present case, the property was allotted during the 1972. The department has no case that the industry was not commissioned within one year from the date of allotment. Sub-rule 3 of Rule 9 enables the government to resume the land provided, the allottee does not require the land for the purpose for which it is allotted and informs the Director of Industries & Commerce accordingly. The said clause also not attracted in the present case. Neither in Ext.P4 nor in Ext.P9,the respondents have got a case that the petitioner has violated the conditions mentioned so as to attract sub-rules 1 or 2. Thus it WPC 16957/03 -:11:- can be seen that the grounds mentioned either in Ext.P4 or in Ext.P10 are extraneous to any of the provisions enumerated in Rule 9 and thus, the Department has no statutory or contractual authority to resume part of the land already allotted to the petitioner. 12. In this juncture, it is relevant to peruse Rules 24 and 26 of Ext.P1 Rules. As per Rule 24, after completion of payment the to the government, by paying the full cost of the land allotted to the allottee and after the industry is established, arrangements shall be made by the Director of Industries & Commerce to get the land assigned to the allottee through proper authorities. In the present case , as evidenced by Ext.P3, the assignment was given in the name of the petitioner. Rule 26 of Ext.P1 Rules says that the Government shall have complete title and ownership to the land till the land is assigned to the allottee. In the present case, as per Ext.P3 assignment, the ownership over the land was given to the petitioner in the year 1994 itself. So, with respect to the 36 cents of land covered by Ext.P3, the Department has no title or ownership or any other kind of authority. In the absence of any of the grounds enumerated in Rule 9 or in the absence of any specific provision other than mentioned in Rule 9, the department WPC 16957/03 -:12:- has no authority to resume the land once assigned to the petitioner on the basis of the agreement or part of the land so allotted. In the light of the above facts and circumstances, Ext.P9 is without any authority and the same is liable to be quashed. In the result, this writ petition is allowed quashing Ext.P9. V.K.MOHANAN, JUDGE kvm/- WPC 16957/03 -:13:- V.K.MOHANAN, J. O.P.No. 16957/2003 JUDGMENT Dated:.25.8.2009.