IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH Civil Writ Petition No.2999 of 2011 Date of Decision : February 17, 2011. Punjab Leather Federation .....Petitioner versus State of Punjab and another .....Respondents CORAM : HON'BLE MR.JUSTICE SURYA KANT. Present : Mr.Samarth Sagar, Advocate, for the petitioner. 1. Whether Reporters of Local papers may be allowed to see the judgment? 2. To be referred to the Reporters or not? 3. Whether the judgment should be reported in the Digest? Surya Kant, J. (Oral) The petitioner-Punjab Leather Federation is an Association of Leather Industries and is aggrieved by the order dated 3rd December, 2010 (Annexure P-20) passed by respondent No.2-Punjab Small Industries and Export Corporation (for short 'the PSIEC') whereby the members of the petitioner-Federation to whom the industrial plots have been allotted on leasehold basis, have been directed to pay Rs.5/- per square yard as 'conversion fee' for converting their industrial plots from 'leasehold' to 'freehold basis'. 2] Suffice it to mention here that the industrial plots at Focal Point including Leather Complex, Jalandhar, measuring 5000 square yards/meters were allotted to various industries in the year 1993-1994 on leasehold basis on the following terms and conditions (relevant only):- “....(i) The tentative price of the plot has been calculated at the rate of Rs.250 per square yard/meter which works out C.W.P.No .2999 of 2011 2 to Rs.12,50,000/-. A sum of Rs.40,000/- has already been paid by you as 10% earnest money alongwith application. Apart from this, you are now required to make payment of Rs.4,00,000/- being 30% of the above tentative cost of the plot (in foreign currency for NRI) in the form of a Bank draft in favour of “The Punjab Small Industries and Export Corporation, payable in any scheduled bank at Chandigarh within 30 days from the date of issue of this letter. xx xx xx xx (iii) The plot has been allotted on lease-hold basis for 99 years in the first instance, as such you shall also pay annual lease rent Re.1/- per 1000 sq.yd. in advance for 99 years at the time of execution of lease deed agreement. xx xx xx xx (xii) Ordinarily you shall not be allowed to transfer your rights in the plot for a period of 10 years from the date of allotment. Transfer may, however, be permitted in exceptional circumstances on payment of transfer fee as prescribed by the Corporation under its transfer policy, from time to time. (xiii) You shall not carry on without the written consent of the Corporation or permit to be carried on in the plot or use the same or permit the same to be used for any purpose other than for which it has been allotted to you. You shall also not do or allow to be done therein anything whatsoever which in the opinion of the Corporation may be nuisance, annoyance or disturbance to the neighbours. (xiv) As the land is to be given on lease hold basis, the ownership will vest in the Punjab Small Industries & Export Corporation Limited. xx xx xx xx” (emphasis applied C.W.P.No .2999 of 2011 3 3] The members of the petitioner-Federation accepted the terms and conditions of allotment and most of them have paid the allotment price and are running their industrial units. It appears that the members of the petitioner-Federation wanted that the plots allotted to them on leasehold should be converted into freehold plots vesting absolute title with the allottees. Since no decision was taken on the demand put-forth in this regard, the petitioner-Federation approached this Court in Civil Writ Petition No. 12181 of 2010 which was disposed of on 14.7.2010 with a direction to the respondents to take an appropriate decision and if so required, by way of a policy decision. Pursuant to these directions, that the Managing Director of respondent No.2-Corporation has passed the impugned order dated 3.12.2010, inter-alia, explaining that the Punjab State Leather Development Corporation (for short 'the PSLDC') had initially allotted the industrial plots on 99 years lead hold basis and as a matter of policy which were convertible into free hold on payment of the requisite conversion fee and completion of other pre-requisites. 4] The impugned order further says that:- “....(5) Whereas Board of Directors of the PSIEC in their meetings held on 4.11.1991 read with 8.2.2005 and 29.3.2010 took policy decision to allow conversion of lease hold allotment of industrial plots into free hold where full payment of the plot has been made by the allottees by charging nominal conversion fee @ Rs.5/- per square yard and completion of other pre-requisites. (6) Whereas upon transfer of Leather Complex to PSIEC vide above referred communication, PSIEC have C.W.P.No .2999 of 2011 4 been issuing allotment of industrial plots in Leather Complex Jalandhar too on 99 years lease hold basis to the entrepreneurs like wise being made in other areas developed by the Corporation. Allottees of Leather Complex Jalandhar whom allotments of industrial plots stood issued by PSIEC on lease hold basis, have already been coming forward and seeking conversion of their allotment to free hold depending upon their requirement. Acceding to this requests, PSIEC have already effected conversion of around 10 allotments in Leather Complex Jalandhar from lease to free hold basis. (7) Given the above facts and circumstances, Board of Directors of PSIEC have already taken policy decision to consider and allow conversion of already made lease hold allotments in different focal points including Leather Complex Jalandhar to free hold by making payment of nominal conversion fee of Rs.5/- PSY and completion of other applicable pre-requisites. Moreover, the allottees of Leather Complex Jalandhar whom allotments of industrial plots stood issued by PSIEC on lease hold basis, have already been coming forward and availing the facility of conversion of their lease hold allotments to free hold. The scheme being open ended, the remaining entrepreneurs of Leather Complex Jalandhar having allotment of industrial plots on lease hold basis, can apply and avail the facility of conversion of their allotment lease hold to free hold on payment of full price of the plot, conversion fee and completion of other applicable pre-requisites in accordance with the policy of the Corporation.” C.W.P.No .2999 of 2011 5 5] The aggrieved petitioner-Federation has approached this Court. Its learned counsel has been heard at some length and the records perused. 6] It is urged that the original industrial policy in terms whereof Ultra Modern Leather Complex came to be established at Jalandhar, itself provided the allotment of plots on freehold basis and thus, the very initial allotment on leasehold basis is contrary to that policy decision, warranting intervention by this Court. It is also urged that several industrial units have been allotted plots on free hold basis at the same rates as were charged from the members of the petitioner-Federation for lease hold allotments and thus, the additional demand towards conversion fee is wholly discriminatory. It is then urged that the demand of Rs.5/- per square yard as conversion fee is per se arbitrary as there is no rationale behind this forcible extraction. 7] In my considered view, none of the contentions merits acceptance and/or call for any interference by a writ Court. The 'industrial policy' to develop the Ultra Modern Leather Complex by the Punjab State Leather Development Corporation (Annexure P-1) relied upon by the petitioner-Federation is not a binding contract. It merely highlighted the salient features of the project. The said policy decision as well as certain allotments made on free hold basis are the events of the year 1989, whereas, the aggrieved members of the petitioner-Federation have been allotted plots by a different entity, i.e., the Punjab Small Industries and Export Corporation Limited, and that too in the year 1993-94. The C.W.P.No .2999 of 2011 6 members of the petitioner-Federation applied with open eyes for the subject-allotments on lease hold basis and the allotment letters categorically recited that the allotments were on leasehold basis for 99 years. It is pertinent to mention here that much before these allotments on leasehold basis @ Rs.250/- per square yard/meter, the PSIEC had taken up a uniform policy decision on 4.11.1991 re-iterated subsequently on 8.2.2005 and 29.3.2010 also in terms whereof all the allotments have been made by it on leasehold only though convertible to free hold basis subject to certain terms and conditions. It is not the case of the petitioner- Federation that any allotment by the PSIEC has been made on 'free hold basis' after the allotments made to the aggrieved members of the petitioner- Federation. The Corporation having taken a uniform policy decision which has been applied without pick and choose, the petitioner-Federation miserably fails to make out any case on the anvil of Article 14 of the Constitution to justify the judicial review of contractual obligations by a writ Court. The members of the petitioner-Federation can not claim parity with those allottees to whom the allotments were made by the Punjab State Leather Development Corporation in the year 1989 or prior thereto. There is no factual basis laid to allege discrimination as two sets of allotments by two different organizations and at different points of time would stand to the test of 'reasonable classification'. 8] Adverting to the element of 'arbitrariness' in charging conversion fee @ Rs.5/- per square yard, I am of the considered view that the fee so fixed by the Corporation is wholly reasonable and fair and C.W.P.No .2999 of 2011 7 beyond the scope of interference. I say so for the reason that the very allotment on lease hold basis made in the year 1993-94 was @ Rs.250/- per square yard, with a clear stipulation that the 'ownership' of the industrial plots shall continue to vest in the PSIEC even after payment of full allotment price. The members of the petitioner-Federation now want the conversion of their allotments from 'leasehold' to 'free hold' basis thereby seeking absolute title in the immovable properties. The 'conversion fee' @ Rs.5/- per square yard demanded by the Corporation in this factual backdrop cannot therefore be termed as arbitrary or unreasonable. It does not fall within the domain of a writ Court to determine or to interfere with such like determination of the price unless proved to exorbitant on the face of it. The petitioner federation cannot compel the owner-Corporation to part with its title without charging any additional consideration. Suffice it to mention here that there is no compulsion for the allottees to pay the 'conversion fee' as the Corporation is not compelling them to get their leasehold plots converted into 'free hold'. It is only the allottees who want the leasehold plots to be converted into free hold basis. 9] For the reasons afore-stated, I do not find any ground to interfere in the impugned order. 10] Dismissed. February 17, 2011 (SURYA KANT) Mohinder JUDGE