HIGH COURT OF CHHATTISGARH AT ‘BILASPUR WRIT PETITION (C) N0. 6652 of 20M {imam : Hora’bie Shri Jagdish BhaHa, Acting Chiaf Justice & Hen’bie Shri Satish K. Agnihoui, J. PETITIONER :1. State of Chhattisgarh, through The Secretary; Commerce & Industries D.K.S. Bhavan, Raipur (C.G. §tate Investment Promotxon Board, through Seuetary/Convener, Adj ommg Mantraiaya, Renuka Dwar Shashtn Chowk. Ra1pur (C G} Additional thief Secretary, Commerce and industries Depattment, D.K.S. Bhavan, Mantra‘iaya,‘ Raipur (C.G.) The Principal Secretaiy, Forest Department, D.K.S. Bhawan, Mantraiaya, Raipur (C.G.) T PETITION UNDER. ARTICLE 226 OF THE CONSTITUTION OF INDIA WRI (Passed on A] ‘5‘ day of January, 2008) The failowing order was pas$ed by Shri Satish K. Ag1ihotri, J. 1. The petitioncg a company constituted and incorporated uhder 1n§ian Companies Act, 1956, impugns the validity of the order dated 29.09.2007 (Annexure P11) whereby the Memorandum of Understanding (hereinaiier Akshay Ispat Udyog Private Limited (Fonnorly whay Investmams Pvt. Ltd.) A Company Constituied & Incmporated Under Indian . Companies Act, 1956, Registered oifnce at A-3, . Farm Complex, GE. Road, Rajbandha Mam, Raipur (CG) Through its Director, Shri Ankit,_ Jinoal son of Shri Naresh Chand aged about~27 years. VERSUS Present. $1111 Manmdra simvagtava, senior Advocate With shn Gautam Bhaclun and Sim Ammo Das Ad'vocates for the pehttorier Shn Vmay Ham Deputy Advocate General for the State/respondents ORDER . ) 4% refened to as ‘the MOU’) (Amexure P/9), dated 8m September, 26!}3 between the Chhattisgarh State Industrial Development Corporatian Limited (for short ‘C.S.I.D.C.’) and the petitioner company, was temlinated with immediate effect 3. Time was not the essence of MOU. It was agreed between the parties to execute the MOU on the terms, assurances and commitments as set out herein below: “1. It is agreed by the parties hereto that AIPL will set up the aforesaid project in the State of Chhattisgarh, where in the CSIDC & the State Govermnent agencies will extend all - necessary assistance arid hillest cooperation for successiiil implementation ofthese projects. 2. The CSIDC Will provide all necessary assistance in procuring optimum land reqoired for the Projeet h‘ee h‘om all encumbrances as required for the implementation of these pmjects. 3. The CSIDC will facilitate all necessary steps for the grant of expeditious approvals under the purview of the State Government for the speedy implementation ofthe proj ect. 4. The CSIDC will facilitate permission from the approyriate authority under ihe Sims Govermnem for optimal ewe/‘1 0f waier eom viable sources for operation of the aferesaid projects at prevailing rates, as per prevaiEng policiea of Staxe Govemnwm. k . Brief facts as stated hy the learned counsel appearing for the petitioner are wet the petitioner entered imo the MOU with C.S‘I.D.C. on 8‘“ September, 20035 for setting of following manufacturing facilities in the State of Chhartisgarh with proposed investment of Rs. 115 crores, as under: SLNO. l Project Capacity Project Cost (Rs. Cmres) l. 5 Spenge ken Plant 300 TPD 1 15.00 2. Captive Fewer Plant 14MW 3. Imiuct£on Furnace Unit 350 TPD 4. Captive Ceal Mnes As per availability 5. Captive Iran 0w Mines As per availabiliiy Tami Rs. 1 15.00 Cr. 5. The CSIDC will facilitate State Govemmem’s recommendation to the Ministry of Coal and other concerned ‘ ‘ Depzmmwis of Govgrmnent of India for allotment of suitahle ‘ w Captive Coal Mines in Chhattisgarh, as per the policy 0fthe State _ Gwemment. 6. The CSIDC will facilitate State Govemmem’s recommendation to the Ministry of Steel and concerned Departments of Government of India for allotment of suitable Iron Ore Mines in Chhattisgarh as per State Government Policy. 7. The CSIDC will facilitate State Govemment Energy & Captive Power Policy with regard to eetablislmient of captive power plant by the investor shall assist in obtaining expeditiously e all statutory and non-statutory clearaneee required for implementation of power plants in the Stale from the competent authorities. It shall be responeibility ofthe company to obtain the » clearances as provided in the laws related to electticity. 8. The CSIDC will facilitate State Government’s recomendation to Ministry of Coal & Mines, Powen Environment mid Forest of the Goverxmient of indie for necessary agiprovals, clearances and sanctions. 9. The CSIDC will faoilitate all incentives available to Mega hldustriel Projects in the state eg. Entry Tax Exemption, Waiver _ of Electricity Duty and Stamp Duty will expeditiously granted, as per the existing policy ofthe Govennnent. ' 10. The AIPL shall earmark separate funds for environment upgiedation and social upliftment of surrounding areas/villages etc, to maintain the ecological balance. 11. Any new or improved incentives, which may be announced by the Government of Chhattisgarh alter signing of this MOU _ may be adtiitionally extended to AIPL as per the provisions there on. l2. The AIPL will facilitate for setting up of ancillary industries promoted by CSIDC or any Government agency. l3. The AIPL will provide employment to local people as per the Govt. Policy. 14. The AIPL will make provisions as per law for utilization & disposal of fly ash generated in their proj ect. 15. The AIPL will initiate necessary steps to implement the projects under the MoU with a view to contribute to the industrial development and the economic growth of Chhattisgarh Sta ." 4. The MOU was for the promotion of Industrial investment in the State under the provisions of Chhattisgarh Industrial Promotion Act, 2002 {hereinafter referred to as ‘the Act, 2002). Under the provisions of Section 3 ofthe Act, 20m, District Investment. Promotion Ccmmittees were constimted. Seciion 5 of the Act, 2002 provkies for functioning ofthe said committees. Under the provisions of Section 9 of the Act, 2002, State Investment Promotion Board (for short, ‘SIPB’) was constituted“ Section 11 of the Act, 2002 prescribes for iimctions of District Investment Promotion Committees and SIPB. Learned counsel iiuther states that the petitioner, pursuant to the MOU epplied for allotment of land bearing Khasra No. 250/1, 252/3, 1222/1, 1222, 1209, 1217 and 1256 admeasuring 33.237 hectares ofiami at village Ranisagar: Tehsil Kharsiya3 District Raigarh on 25.99.2003 (Annexme PIZ) ' i The respondents failed to provide necessary land to the petitioner company in accordance with the terms of the MOU. Subsequently, the petitioner company purchased about 28.20 hectares of land in Patwari Haika No. 80 et Village Narhada. Tehsii and District Raipur, and possession thereof was taken over by the petitioner company. The fact of acquisition \and possession of the iand was informed to the S.I.P.B, by communication ciatec 06.04.2004 (‘Annexure PM). Keeping in View the nature of work. the name of Akshay Investment Private Limited, which entered into the execution ofMOU was converted to Akshay Ispat Udyog Private Limited, aiter obtaining necessary permission from the authorities. The Registrar of the Company, Madhya Pradesh and Chhattisgarh, Gwalior, thereaiter issued certificate in the changed name on 29.08.2006 (Armexore P/ 15). The petitioner was required to take permission of the Ministry of Commerce and industries Government of India for site location. The petitioner could not get the requisite land in the District Raigarh or Raipur The petitioner company acquired the land for installation ofplant at‘viilage @ Jorataria? Tehsii and District Rajnandgaon to the extent of 13.20 hectares. The Ministry of Commerce and Industriss, Government of India, al’lawed me ghange of site location of the proposed plant by leaer dated 5m of January 2006 and 24m of Januaryg 2007 (Annexme 3’18 Colly.) ’ The petitioner was iimher granted exemption from payment of’stamp duty. Diversion of tand for the said yurpose was aiso granted. The petitioner eompany macie an application to obtain necessary permission from the Clmattisgarh Environment Conservation Board, Raipur on 27m of October, 2GO6 alongwith necessaxy fee of Rs. 1,60,000 (Annexme P/41 and Pi42) . The Chhattisgarh Etivironment Conservation Board, in its comunieation timed 10m November, 2006 (Amexure P/43) restrained the petitioner comgany to raise any construction on the proposed site without‘consent of the Board. Shri Manindra Shrivastavag Senior Counsel with Shri Gautam Bhaéuri and Shri Amrito Das, Advocates, appearing for the petitioner would submit that the installation of plant was not possible in absence of necessary ond manciatory permission from the Chhattisgarh Environment Conservation Boar¢ which has been acknowledged by the respondent authorities in the meeting of the SIPB held on 14(092007. Learned couneei would next submit that the petitioner has taken all steps in accordance with the terms and conditions of MOU. The respondents have failed to perfoxm its obligation under the MOU. The petitioner submitted a detailed status report dated 19.12.2006 before the meeting of SIPB which took place on 14.09.2007. It was further contended that the impugned order is violative of principies of natural justice as there was no proper opportunity of hearing aEorded to y 423 the petitioner to put forwani its case. S.I.P,B has n0 authority to cmfer any power to change, modify; amend or anull any contractual ob1igation as the MOU was executed by the C.S.I.D.C. The respondents havecompletely ignored the steps taken by the petitioner in order to iillfm its obligation umier the terms and conditions of MOU‘ The respondent authorities, in tum, have failed to perform their obligation under the MOU. 10. Per contra Shri Vinay Harit, learned Deputy Advocate General appearing for the State/respondents, would submit that the petitioner company had failed to take any steps an required under terms and conditions ofthe MOU. The petitioner company had not made any application for Environmental clearance to the Government of India, Ministry of Environment and Forest. The petitioner has further not made any application under the provisions of the Factories Ant to establish the Sponge Iron plant. The petitioner was given suftieient opportunity to submit progress report and the petitioner has already submitted the status report dated 19.12.2(306. Therefore, it is not correct to say that the petitioner has not been afforded any opportunity of hearing to put forward its case. 11. Having heard learned counsel for the parties, perused the documents and records appended thereto, it is evident that the petitioner was not ah‘orded any opportunity ofhearing. 12. On perusal of the Minutes of the Meetings dated 14.092007 and 17.09.2007 of the SIPB, it is clear that no discussion with regard to the progress of the petitioners’ project in accordance with the MOU had taken place. The decision was taken in a casual manner, wherein eighteen MOUs of eighteen investors including the petitioners were recommended for termination of the MOU. It was acknowledged in the meetingpthatthe 4% applieatinn far consent to establish the project was pending consicieration before the Chhattjsgarh Environment Conservation Board as no State level committee could be constituted. Therefore, the petitioner cannot be held liable for not initiating an steps to establish the proj ect. y l3. It is wen established that the principles of naturai justice ie meant to prevent miscarriage of justice. Audi aZteram parrem is one of the basic pillars of natural justice which means no one should be condemned unheard. 14‘ 1n the matter of Smt. Maneica Gandhi Vs. Union of India and another’, the Supreme Court observed as under: " The law must, therefore, now be taken to be wet} settled that even in an administrative proceeding, which invoives civil consequences? the doctrine of natural justice must be; held to be applicable.” 15. When by reason of an action on the part of a statutory authority: oivil or evil consequences ensue, principles of natural justice are required to be followed. In such an event, although no express provision is laid down in that behalf, compliance with principles of natural justice would be implicit. ¥ in case of denial ofprineiples of natural justice in a statute, the same may also be held ultra vires under Article l4. of the Constitution (Rajesh Kumar and others Vs. Dy. CIT and othersz) 16. Applying well settled principles of natural justice to the facts ofthe present case, it is crystal clear that. the impugned order, which entails civil or evil consequences, was passed without following the principles of natural justice and fair play in-action. Thus, the impugned order is bati and ' deserves to be quashed. 17" ‘1 Thig very impugned order dateé 29.09.20!” and the decision in the meeting sfthe SIPB dated 14.09.20Q7 and 17.09.2007, were under chailenge in the idermcai matter i.e. Pushp Steel and Mining (Pvt) Ltd. & another Vs. State of Chhattisgaxh and Others in W.P.(C) 6228/2Q07: Thus, the issues mvoived in this petition are squarely covered by the judgment and order dated 10‘012008 passed in the matter ofPushp Steei and Mining (Pvt) LtcL & another (wpra). In view ofthe foregoing premises, it is not necessary to examine the factual aspeets 0fthe matter as decision on merit on factual asyects may prejudice rights of both the parties. 19. For the reasons slated hereinabove, the petition is allowed in the same terms. The impugned order dated 29.09.2007 (Annexure P/l) and the order dated 17.09.2007 (Annexure R/3) are quasheé. The petitioner is entitled to all consequential benefits flowing from this order. 20. The petition is accordingly allowed. No order asto costs. Sdl- Jagdish Bhalla Ag. Chief Justice Sdl- Satish K. Agnihotri Judge 1. Aw. 197$ so 597 2. we? 3 SCC 23E {graze (