IN THE HIGH COURT OF JUDICATURE AT PATNA CWJC No 3714 of 2008 M/S VARDHAN INDUSTRIES Versus BIHAR INDUSTRIAL AREA DEVELOPMENT AUTHORITY & ORS *** For the petitioner : Mr Suraj Samdarshi, Advocate For the BIADA : Mr A Amanullah, Advocate *** 5 06.08.2008 This is again one of the illustrative cases which shows the apathy against industry of the Bihar Industrial Area Development Authority (BIADA) established with the so-called object of promoting industries in Bihar but acting just contrary thereto. This case clearly demonstrates how successfully the Industrial Area Development Authority can kill an industry being sought to be set up for its petty gains. How its revenue considerations outweigh industrialization! M/s Roshan Plastic Industries had an industrial plot allotted and leased to it by the North Bihar Industrial Area Development Area Authority (NBIADA) under the BIADA Act. The unit was located in the Industrial Area, Hajipur. It appears, it applied for change in constitution of the firm to the NBIADA and for grant of requisite permission to change the same. By letter dated 16.08.2004 of the NBIADA (Annexure-1), the said firm was informed that the dues of the Authority in respect of land was Rs 4,14,486/- and the Authority would charge transfer charges being 15% of the value of the land amounting to Rs 56,002/- payable for the said transfer. In the letter, it was clearly mentioned that the authority agreed to permit the said 2 transfer/reconstitution if the aforesaid amounts were paid. Payments were then commenced and then a letter from the Authority dated 12.01.2007 (Annexure-2) was received showing that there was a balance due of Rs 55,755/- in respect of the land. The petitioner states that by February 2007, all payments due both with regard to the land as well as with regard to transfer charges were fully paid up alongwith interest for the delay in payment and was accepted by the Authority without demur. It may be noted here that on reconstitution and transfer, the firm name had to change with new persons and it is for that reason, transfer charges had been demanded by the Authority. To the assertion that all payments were duly made, in the counter affidavit it is stated that it is a matter of record. The transfer was to be made in the firm name of the petitioner and, as such, the petitioner wrote to the Authority in June 2007 for taking necessary steps to transfer as earlier agreed and as full payments had been made. This was responded by the impugned Annexure-5 dated 29.09.2007 of the Authority wherein it was admitted that pursuant to the Authority’s letter dated 16.08.2004 (Annexure-1), transfer charges had been deposited but as per new policy, the present market value of land was assessed at the rate of Rs 1.63 crores per acre and, therefore, the present value of land would be Rs 28,06,474/- of which 15% would be Rs 4,20,971/- which would now be required to be paid instead of Rs 56,010/- as demanded earlier. This is virtually death blow to any industry that is to be set up and it is submitted by the petitioner that rather than encouraging industry in this industrially backward State to be set up, the Authority is acting more like taxing 3 authorities to extract whatever money they can from even small and tiny industries. The Authority has appeared and filed a counter affidavit. Its stand is that the petitioner was intimated the consideration for transfer by the Authority’s letter dated 16.08.2004 and had the petitioner or on behalf of petitioner deposits made immediately, the Authority would be obliged to transfer the same at the considerations mentioned therein but as the money was deposited late, there was a default and before the default could be made good, the Authority took a decision to revise its policy. The policy was communicated by letter dated 16.07.2007 to the officers of the Authority (Annexure-6 to the writ application and Annexure-A to the counter affidavit) and the policy having changed, the petitioner was bound by the new policy and that being so unless petitioner paid the amount of Rs 4,20,971/- as reduced by Rs 56,010/- paid earlier, transfer would not be made. It is the legality and propriety of this stand, as per Annexure-5, that is in question in this case. Heard the parties and with their consent, this writ application is being disposed of at the stage of admission itself. Having considered the matter, in my view, Annexure-1, being the letter of the Authority dated 16.08.2004 exemplifies two acts. One, an offer for the benefit of the petitioner and on his behalf by the original unit and another, an acceptance thereof by the Authority. The Authority conditionally accepted the offer and the condition being payment of the money stipulated therein. This amounted in law to a counter offer. The result is that once the stipulation therein is complied with, that is, 4 payment made then it becomes a binding promise and agreement enforceable in law. Thus seen, once payments were fully made which included interest for delay and the same was accepted without demur by the Authority, it, in law, resulted in a binding agreement. On behalf of petitioner, payments were to be made and on payment being made, Authority agreed to transfer. It is not in dispute that all payments alongwith interest for delay thereof were made by February 2007. That being so, the agreement came into full effect in February 2007 itself and could, thus, be enforced. A right was, thus, created in favour of the petitioner. This right is sought to be defeated by the Authority by a subsequent change of policy decision which was taken in July 2007 before which in June 2007 itself documentation for transfer was demanded. This subsequent change of policy, in my view, will not effect past agreements. It cannot alter agreements entered into or agreements already formed. Here, there was clearly a subsisting enforceable agreement. In other words, the new policy, the new rule is held to be inapplicable to past transactions even though the formalities thereof remain to be completed though in facts noted above petitioner had demanded completion of formalities even before that. As to the contention of the learned counsel for the respondent- Authority that there was a default in payment of money, I can only say that default predicates a fixed date or a fixed period for taking any action and consequent failure. Regrettably, there is nothing on record to show that payment was required to be made within any fixed time 5 schedule or period much less in Annexure-1, the letter of Authority dated 16.08.2004. As noticed above, payment was accepted without demur with interest for delayed payments. The question of default, thus, does not arise. Before parting, I may observe that the decision of the Authority as reflected in the communication dated 16.07.2007 (Annexure-6) appears to be quite strange and far away from reality. Even if, by any stretch of imagination, the right of authority to charge transfer charges is recognized then basing them on the value of freehold unencumbered land does not stand to reason for the Authority never intends to nor does it as a matter of fact convey the property absolutely to an entrepreneur. It is merely granting a lease. Leasehold rights have its own valuation as distinct from freehold land and when a leasehold land is being transferred, its value cannot be taken to be or equated with transfer of a freehold land. That, in my words, would be absurd. Thus, in my view, the demand as made by the respondent- Authority in Annexure-5 is wholly unjustified in fact and in law and cannot be sustained. It is quashed accordingly. Let a writ of mandamus be issued to the respondent-Authority to grant permission and take up necessary steps preferably within a period of two months from today for transfer as per Annexure-1 being letter dated 16.08.2004 of the Authority and take all consequential steps accordingly. The writ application, thus, stands allowed. M.E.H./ (Navaniti Prasad Singh) 6