V.GOPALA GOWAD, CJ & I.MAHANTY, J. W.P.(C ) NO.12408 OF 2009 (Decided on 24.12.2010) PITABASA MISHRA & ORS. ………Petitioner. .Vrs. ODISHA INDUSTRIAL INFRASTRUCTURE DEVELOPMENT CORPORATION LTD & ORS. ………. Opp. Party CONSTITUTION OF INDIA, 1950 – ART.226. For Petitioner - M/s. Damodar Pati, S.K.Mishra & S.N.Sharma. For Opp.Partoes- M/s. Jagannath Patnaik, B.Mohanty, S.Pattnaik, R.P.Ray, a.Patnaik (for O.P.1) Mr. A.P.Bose (for O.P.2) M/s. A.C.Mohanty, G.N.Rout, S.Bhagat & A.Mohanty (for O.P.4) V. GOPALA GOWDA, C.J. The petitioners in this case question the correctness of the letter No.HO/ID/A/2658/01-96 (Annexure-1) allotting industrial plot measuring 0.145 decimals (Revenue Plot No. 72(P), Khata No.11 of revenue village Raghunathpalli, Rourkela) in favour of the opposite party no.2 M/s.Sai Sansar Associates which is a proprietary concern and pray to quash the same urging various facts and legal contentions. 2. It is the case of the petitioners that opposite party no.1 hereinafter called as IDCO, which is a statutory Corporation has allotted the aforesaid plot for a paltry sum of Rs.7,89,350.00 though its market value would be about two crores. The petitioners who are the allottees of Shop-cum-residence located in the commercial estate, Rourkela carrying on with business in their allotted premises. It is their case that opposite party no.1 being a statutory corporation owns a commercial estate in Rourkela. There are 10 nos of A type shop-cum-residential buildings and 11 nos. of B type shop-cum-residence are available at the Commercial Estate. The main object of the opposite party no.1- Corporation is to form industrial estates by acquiring lands and forming industrial buildings and allot the same in favour of eligible applicants with a view to see that industries are developed in an orderly manner. The Corporation without issuing any public notice inviting applications from the eligible persons has allotted the land in question referred to supra in favour of opposite party no.2 for outright sale for establishment of Saree Polishing and Dyeing of Garments and Fabric Unit. It is stated that the Corporation under section 15 of the Act is empowered to allot plots, factory sheds or building or part of building including residential tenements to suitable persons in the industrial estate established and developed by the Corporation. The Corporation can dispose of its property as per the requirement laid down as per Section 33 of the Act. Without adhering to the statutory provision as provided in section 33, the Corporation has allotted the same for a paltry sum in favour of opposite party no.2. 3. It is their further case that there is statutory obligation on the part of the Corporation under section 34 of the Act to allot unutilized area of plots capable of sub- division to any person. But before that it shall issue notice to the plot holders in the industrial area calling upon them to furnish relevant information in the prescribed form. Sub-section (4) of Section 34 provides for giving reasonable opportunity of being heard to the plot holders and other persons interested in the plot regarding the allotment of unutilized plots. The land has been allotted in favour of opposite party no.2 on leasehold basis up to 2.1.2076. Allotment of the land situated in a prime locality for a paltry sum for such long period on lease conferring right of enjoyment without following the procedure as provided under the provisions of the Act and the law in this regard is arbitrary and unreasonable. It is detrimental to the interest of the Corporation. Therefore, public interest will suffer. 4. It is their further case that the allotment of such industrial plot in favour of opposite party no.2 is not conducive to the nearby allottees and plot-holders who are also residing in the plots because the manufacturing activity that will be undertaken by opposite party no.2 will involve polishing and dyeing of garments and the activities will create pollution in the environment thereby the neighbouring allottees would suffer. For this reason also they have prayed for quashing of the allotment. It is further stated by them that the allotment has been made on the recommendation of opposite party no.3. Opposite party no.3 is obliged to consider the application of opposite party no.2 along with other applicants before recommending to the Corporation for allotment in favour of opposite party no.2. The said petition is opposed by opposite party no. 1 by filing statement of counter. It is contended by the Corporation that the writ petition filed by the petitioners is not maintainable in law. The allotment of the said plot was made in favour of opposite party no.2 pursuant to the orders passed by this Court on 13.5.2008 in W.P.(C) No.6969 of 2008 filed by opposite party no.2 wherein this Court disposed of the said writ petition without examining the merits of the case with a direction to the Corporation to consider and dispose of the representation of opposite party no.2 as expeditiously as possible preferably within three months from the date of production of certified copy of the order. Pursuant to the said order, the representation of opposite party no.2 was placed before the 74th Board Meeting of the Corporation held on 20.9.2008. The Board has approved the proposal for regularization of the case of encroachment of 6300 sqfts of land by opposite party no.2 at the auction price for a similarly placed plot of Rs.54.44 lakhs per acre as against the prevailing concessional industrial rate of Rs.18.21 lakh per acre. In the Board resolution, the Board has stipulated that the case of regularization of land in favour of opposite party no.2 would not be cited as a precedent in future and further it had resolved that the Corporation should take all steps to remove existing encroachments. Thus it is stated at para 4 that the allegation that the allotment was made for a paltry amount of Rs.7,89,350.00 is not correct and not acceptable to the petitioners. With regard to the other legal contentions, it is submitted that provision of section 33 of the Act is not attracted to the plot in question as it speaks about the disposal of land by the Corporation relating to any land acquired by the State Government and transferred to IDCO with or without development. Section 34 of the Act which speaks about acquisition of unutilized surplus lands in the industrial area is not applicable to the plot in question. It is further stated that section 15 of the Act 2 empowers the Corporation to allot plots in favour of the eligible applicants. They sought to justify the allotment of the plot in question in favour of opposite party no.2 placing reliance upon the aforesaid Board meeting at the auction price of similarly placed plot of Rs.54.44 lakh per acre. The allotment made for a paltry amount of Rs.7, 89,350.00 is incorrect and is not acceptable to the Corporation. 5. Opposite party no.2 has also filed counter statement seeking to justify the allotment of plot in its favour traversing the various petition averments contending that the petitioner no.6 was also an encroacher over the plot and road and on the basis of his application the matter was regularized and the plot was allotted to him and on the basis of application of opposite party no.2 for allotment of the plot in question, the matter was regularized and the plot was allotted in his favour in the same line of the allotment as in the case of petitioner no.6 at lower price. Petitioner nos. 1 to 5 are the allottees of other block, i.e. Block ‘A’ and petitioner no.5 who is the proprietor of M/s.Kusum Chemical Works was also an encroacher and runs a chemical factory in the claimed residential area. In this regard, the information obtained under the RTI Act is produced as Annexure-F/2. The petitioners are all encroachers of public road and area. Petitioner no.2 was also an encroacher of Plot No.A/3. IDCO authorities have also issued notice to him as per Annexure-G/2 which was subsequently regularized in the year 2006 at a concessional rate by IDCO.Therefore; the petitioners have not come with clean hands as they are encroachers and had got the lands from the Corporation at concessional rate. Having got benefit of allotment of land at lower price they have filed this writ petition questioning the correctness of the allotment by way of regularization made in favour of opposite party no.2 which cannot be entertained by this Court as there is no public interest involved in this case but they are trying to pursue their private interest. 6. With reference to the above said rival legal contentions, the following points would arise for consideration: (a) in absence of regulations famed under section 59 of the OIIDC Act, whether the allotment of the plot in question in favour of opposite party no.2 by the Board of Directors of the Corporation without inviting applications or conducting public auction is legal and valid? (b) whether the cost of property of Rs.7,89,350.00 is the market price of the plot in question and (c) what order ? 7. The plot in question was acquired by the State Government in exercise of the powers conferred under section 31 of the Act following the procedure under the Land Acquisition Act, 1894 on behalf of IDCO to form industrial estates in the industrial area. The same has been transferred in favour of IDCO by the State Government as provided under section 32 of the Act. It is the property of IDCO. Section 33 (2)(a) confers power upon the Corporation for disposal of its land for the purpose of establishment of industries in favour of eligible persons subject to such requirements as to its development and use on such terms the Corporations may think fit with due regard to the price at which any such land has been acquired from them. Section 59(1)(d) provides for the Corporation to make regulations with previous approval of the State Government consistent with the provisions of the Act and the rules regarding the terms under which the Corporation may dispose of its land, building and amenities. Undisputedly, there is no regulation framed for this purpose by the Corporation. As could be seen from Annexure-1 which is sought to be quashed by the petitioners, the allotment of plot in favour of opposite party no.2 was made in consideration of his letter dated 14.1.2008 and pursuant to the order passed by this Court in W.P.(C) No. 6969 of 2008 dated 13.5.2008 the Board of Directors in its meeting held on 20.9.2008 has provisionally allotted the plot in question in favour of opposite party no.2 on terms and 3 conditions stipulated in the impugned allotment letter. The land is allotted on leasehold basis for a period up to 2.1.2076 for establishment of a Saree Polishing & Dyeing of Garments & Fabrics Unit. It is necessary to extract the order of this Court in W.P.(C) No.6969 of 2008 which reads as under: “ Heard the learned counsel for the petitioner. By means of this writ petition, the petitioner has prayed for a direction to the opposite parties to regularize the land occupied by him since last 12 years in the Commercial Estate, Rourkela pursuant to the letter dated 17.7.2004 issued by IDCO for disposal of land in Saturated Industrial Estate/Industrial Area for industrial purpose and to direct opp.party no.2 to consider and dispose of the representation of the petitioner as contained in Annexure-11 which is pending before him. Considering the facts and circumstances and without going into the merits of the case one way or the other, we dispose of this writ petition with a direction to opposite party no.2 to consider and dispose of the representation of the petitioner as contained in Annexure-11 as expeditiously as possible preferably within a period of three months from the date of production o f a certified copy of this order along with the copy of the representation.” As could be seen from the aforesaid order, the writ petition of opposite party no.2 was disposed of with a direction to consider his representation. The consideration of the representation of opposite party no.2 was to be done only in accordance with the provisions of section 33 (2)(a) read with the regulations, if any framed under section 59. In the counter affidavit filed on behalf of opposite party no.1 at para 4 it is specifically stated that in the 74th meeting of the IDCO held on 20.9.2008, the Board approved the proposal to regularize the case of encroachment of 6300 sqfts. of land by opposite party no.2 at Commercial Estate, Rourkela at the auction price for a similarly placed plot of Rs.54.44 lakhs per acre as against the prevailing concessional industrial rate of Rs.18.21 lakh per acre. The Board also stipulated that the case of regularization in favour of opposite party no.2 would not be cited as a precedent in future and further IDCO should take all steps to remove existing encroachments. The regularization of unauthorized occupation by encroacher, namely, opposite party no.2 is not permissible under the provisions of the Act for the reason that section 33(2)(a) provides that where the Corporation proposes to dispose of by sale any such land which is surplus to its requirement, it shall in first instance offer the land to the persons from whom it was acquired if they desire to purchase it subject to such requirements as to its development and use as the Corporation may think fit to impose. Clause (b) also states that persons who are residing or carrying on business or other activities on any such land shall, if they desire to obtain accommodation on land belonging to the Corporation and are willing to comply with any requirements of the Corporation as to its development and use have an opportunity to obtain thereon accommodation suitable to their reasonable requirements on terms settled with due regard to the price at which any such land has been acquired from them. Sub-section (3) of Section 33 states that nothing in the Act shall be construed as enabling the Corporation to dispose of land by way of gift or by creation of any easement, right or privilege or otherwise. IDCO being a statutory Corporation constituted under section 4 of the Act, whenever any land is required by the Corporation for any purpose in furtherance of the objects of the Act to form industrial estate to allot plots, factory sheds or buildings or part of buildings for any industry or class of industry but the Corporation is unable to acquire it by agreement, upon the 4 application of the Corporation in that behalf, the State Government may order proceedings to be taken under the Land Acquisition Act, 1894 for acquiring the same on behalf of the Corporation as if such lands were needed for a public purpose within the meaning of that Act and after such acquisition by the State Government of the lands for the purpose of industrial area or industrial estate notified under sections 2(h) and 2 (i) of the Act, the same will be transferred and placed at the disposal of the Corporation upon such conditions as may be agreed upon between the Government and the Corporation. After such transfer, the land will be developed by or under the control and supervision of the Corporation and it shall be dealt with by the Corporation in accordance with the regulations made under this Act and the directions given by the State Government in that behalf as per sub-section (2) of Section 32. Section 33 (a) & (b) provides for disposal of land by the Corporation. Therefore, the property acquired by the Corporation is public property. If it is a public property in the absence of regulations framed as provided under section 59 (d), the Corporation cannot regularize or grant lease in favour of an encroacher. That would affect public interest. If the industrial plot formed out of the acquired land is surplus after utilization by the Corporation to build factory and other buildings for any industry or class of industry, then the same has to be disposed of by conducting public auction is the law declared by the Supreme Court in the case of Ramana Dayaram Shetty v. International Air Port Authority of India, AIR 1979 SC 1628 wherein the apex Court after interpretation of Article 14 of the Constitution has held that no government largess can be conferred upon an individual without following the procedure required to be followed . The said principle is equally applicable to the case on hand for the reason that the property is a public property owned by opposite party no.1 which is a statutory Corporation. Therefore, regularization of the unauthorized occupation in favour of opposite party no.2 without following the procedure of conducting public auction at the auction price for a similarly placed plot of Rs.54.44 lakhs per acre as against the prevailing concessional industrial rate of Rs.18.21 lakh per acre as admitted by opposite party no.1 in its counter statement is opposed to public interest and contrary to the law laid down by the apex Court in Ramana Dayaram (supra). Therefore, we have to answer both the points against opposite party no.2. Allotment of plot by way of regularization pursuant to the orders of this Court referred to supra to consider the representation must be in accordance with law as laid down in Ramana Dayaram (supra). Therefore, the decision of the Board to regularize the unauthorized occupation of land in favour of opposite party no.2 is illegal as the same is contrary to Sections 32 and 33 (a) & (b) and the law laid down by the Supreme Court. Undisputedly, the plot which is allotted by way of regularization was done without conducting public auction is patently illegal. Though against the petitioners some allegations are made by the opposite party no.2 stating that they are encroachers similar to him in respect of the plots of the Corporation and further it is alleged that it is alleged that it is a private interest litigation and, therefore, they are not entitled for the relief, we have considered the above facts and exercised our extra ordinary and discretionary power to protect the public property owned by the Corporation in the public interest. 8. Therefore, the impugned letter Annexure-1 is liable to be quashed and accordingly the same is quashed. It is open for the IDCO to take necessary action to conduct public auction and allot the same in favour of the eligible person after initiating necessary proceedings. For the reasons stated supra, we allow the writ petition and issue rule. 5 9. In the counter filed by opposite party no.2 it is pointed out that some of the petitioners have also got allotted the plots of the IDCO in similar manner as has been done in case of opposite party no.2 industrial plots formed by the Corporation. If that is so, direction is given to the IDCO to examine this aspect of the matter and if the allotment is for inadequate considerations, the same may be examined and necessary action may be taken as provided under the provisions of the Act. It is needless to make observation that to implement the provisions of the OIIDC Act to achieve the laudable object and intendment and also to protect the public interest, the Corporation is required to frame the Regulations for disposal of the industrial plots formed in the industrial area out of the acquired lands and Govt. land. Writ petition allowed. 6