IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR.JUSTICE C.T.RAVIKUMAR TUESDAY, THE 1ST DECEMBER 2009 / 10TH AGRAHAYANA 1931 WP(C).No. 26383 of 2005(N) -------------------------- PETITIONER(S): --------------- P.K.SURESH,AGED 49 YEARS, S/O.KUTTAPPA PANICKER, THAIPARAMBIL HOUSE,AMMANKOVIL STREET, MULLACKAL,ALAPPUZHA-688 011. BY ADV. SRI.SIRAJ KAROLY RESPONDENT(S): --------------- 1. THE GENERAL MANAGER, DISTRICT INDUSTRIES CENTRE, ALAPPUZHA. 2. THE DIRECTOR OF INDUSTRIES AND COMMERCE, VIKAS BHAVAN,THIRUVANANTHAPURAM-33. 3. P.K.HARILAL,TECHNO ENGINEERING WORKS, P.O.PUNNAPRA,ALAPPUZHA. ADV. SRI.S.SANAL KUMAR FOR R3 SMT.BHAVANA VELAYUDHAN FOR R3 GOVERNMENT PLEADER SRI.K.SANIL KUMAR-R1 & 2 THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 15/09/2009, THE COURT ON 1/12/2009 DELIVERED THE FOLLOWING: C.T. RAVIKUMAR, J. -------------------------------------------- W.P.(C). NO. 26383 OF 2005 -------------------------------------------- Dated this the 1st day of December, 2009 JUDGMENT The orders by which a piece of land having an extent of 15 cents, comprised in Survey No.435/2 of Paravoor village, Ambalapuzha Taluk of Aleppey district, hereinafter referred as ' the land' only, was resumed from the petitioner and thereafter, re-allotted to the third respondent are under challenge in this Writ Petition. 2. Before adverting to the rival contentions of the petitioner and the 3rd respondent, it needs narration relating the provisions of law which permit allotment of land in development areas for industrial purpose on hire purchase/out right purchase. Government of Kerala have framed the Kerala Allotment of Government Land in Development Areas on hire purchase for Industrial purpose Rules, 1969 for short 'the Rules 1969'. As per the same, the prospective applicant for allotment of land in a developing area has to submit application in the prescribed form to the Director of Industries and commerce through District Industries Officer concerned. On receipt of such an application, it is incumbent on the District Industries Officer to dispose of the same in terms of Rule 7 of Rules 1969 and if the application is allowed, the land can be allotted on hire purchase basis. Rule 12 of the Rules 1969 W.P.(C).No.26383 of 2005 2 provides that if out right purchase of the land in question is requested by the allottee, it shall be considered by the Director on its merits and he shall decide the matter. 3. The petitioner had applied for allotment of 30 cents of land in development plot at Punnapra for setting up an industrial unit for the manufacture of coir mattings in the name and style of M/s Krishna Traders. The said unit was provisionally registered as 01-09-AM-05777 on 2.5.96 and he had remitted the prescribed amount of Earnest Money Deposit. Thereafter, the scheme submitted by the petitioner was considered by the 1st respondent and found to be technically feasible and economically viable. However, it was found that for setting up the industrial unit, an extent of 15 cents of land is sufficient and therefore, proceedings No.MA/4418/96 dated 6.8.96 was issued to the unit to allot the said extent of land in development area at Punnapra on hire purchase basis. While proceedings were in progress, the petitioner had requested to allot the said extent of 15 cents of land on out right purchase basis by modifying the proceedings already issued on 6.8.96. The value of the land was fixed as per proceedings No.I.D 3-1443/93 dated 7.10.93 by the second respondent. Thereafter, Ext.P1 dated 8.11.96 was issued whereby the first respondent in exercise of the powers delegated to him alloted 'the land' to the petitioner on out right purchase basis for the establishment of W.P.(C).No.26383 of 2005 3 the unit. Admittedly, the petitioner had executed the requisite agreement in stamp paper and took possession of the land and proceeded to implement the project with the leave and approval of the first respondent. Ext.P2 agreement was then executed in regard to the partnership with one V.S.Johnkutty. It was also allowed to change the activity as manufacture of ground grains, condiments, spices etc. After executing the agreement, he had remitted the cost of the land in full. Thereupon, Ext.P3 certificate dated 4.6.99 was issued certifying that the petitioner is eligible to get Patta for the land and further that the first respondent got no objection in mortgaging the land and building (to be constructed thereon) to financial institutions for the purpose of raising finance for running the industrial unit. According to the petitioner, he had constructed a compound wall on its four sides and then constructed a factory building, an office room and a guard room spending about Rs.4.5 lakhs. Though he had made such improvements by effecting such construction, he required some more time for implementing the scheme as such, on account of financial crisis and his ailment. While so, he had to shift his residence to another place and same is evident from Ext.P2 agreement. The case of the petitioner is that he was bed-ridden considerably for a long time and he was undergoing Ayurvedic and Alopathic treatments and thus incapacitated from approaching the authorities personally. Since he has outrightly purchased the alloted land, he was under the bona fide belief that he would be informed of W.P.(C).No.26383 of 2005 4 further actions by the respondents in his changed address. But, to his surprise and dejection he obtained Ext.P6 order dated 3.12.03. In Ext.P6, it was stated that as per Notice No.DI/4418/96 dated 31.10.03 the petitioner was directed to show cause, if any in writing, as to why the land should not be resumed within a time limit and that the said show cause notice was returned undelivered to the office of the first respondent. Ext.P6 reads as hereunder:- “In the circumstances explained above and in exercise of powers conferred on me, I hereby resume 15 cents of land comprised in Survey No.435/2 of Paravoor Village, Ambalapuzha Taluk previously allotted to Sri.P.K.Suresh, Thaiparambil House, Amman Kovil Street, Mullackal, Alappuzha and Sri.V.S.Johnkutty, Vavakkattu House, Kattoor, Pollathal P.O to the department, forfeiting the EMD of Rs.1000/- remitted by the party. The allottees are liable to remit the resumption interest @ 6% for the period from the date of allotment of land till the date of resumption.” 4. On receipt of Ext.P6, Ext.P7 representation was submitted by the petitioner requesting the first respondent to give him a chance of hearing and also not to allot the land to any third party. No action was taken thereon. But, there was a move to allot the said property. It was then, this Writ Petition was filed. Originally, Ext.P6 alone was under challenge. However, it was subsequently amended to challenge Order No. DI/1954/05 dated 1.07.05 as Ext.P8. As per Ext.P8, the property alloted to the petitioner has been alloted to the third respondent herein on hire purchase basis for the establishment of W.P.(C).No.26383 of 2005 5 an industrial unit for the manufacture of coir machinery in the name and style M/s Techno Engineering Works. In the circumstances, the petitioner seeks to quash Exts. P6 and P8 orders. 5. Essentially, the contention of the petitioner is that the land was in fact alloted to him on out right purchase basis and thereafter, he took its possession and made improvements by making constructions thereon. He had not violated any of the terms of the agreement. It was disregarding the aforesaid aspects and without affording him an opportunity that Ext.P6 order and Ext.P8 were passed, and being arbitrary, illegal and violative of Articles 14, 19 and 21 of the Constitution of India, they are liable to be set aside, it was contended. Counter affidavits have been filed on behalf of respondent Nos. 1 and 3. In the counter affidavit filed by the 1st respondent, it was stated that on 14.4.2000, a notice was issued to the petitioner asking for his explanation for not implementing the project and the same was sent in his changed address. Though extension of six months' time for the implementation of the project was sought, two months' time was granted for commissioning the project with effect from 4.5.2000. However, they did not take any effective steps and therefore, a reminder was sent to them on 6.11.2000. The said reminder sent to the petitioner was returned whereas his partner had responded to the same and informed that the Income Tax W.P.(C).No.26383 of 2005 6 Commissioner had conducted raid at his residence and took away all the documents of his property and on account of such events delay had occurred in the matter of availing loan from the bank. In the counter affidavit, it is further stated that he had issued one more registered letter on 7.12.2000 to the partner and the same was not collected by him and it was returned to the first respondent. It is again stated therein that on 24.1.01, another letter was sent to the partner Sri.Johnkutty. The counter affidavit contained further narration regarding the subsequent communications sent from the office of the first respondent. The first respondent attempted to justify the actions taken against the petitioner in respect of the land contending that the second respondent is having ample powers to resume the land in the event of the allottee not commissioning the industry within one year from the date of allotment or within such further time as may be granted by the second respondent. The first respondent has further contended that after resumption of the alloted property, it was alloted to the third respondent and he has executed the hire purchase agreement. 6. The third respondent in his counter affidavit contended that after taking possession of the land, the petitioner had not started construction of any building or made improvement of appreciable nature in the land within a period of one year and further extension of time was not granted by the W.P.(C).No.26383 of 2005 7 competent authority. He had also disputed the contention of the petitioner that the property in question was alloted to him on out right purchase basis. According to him, the action on the part of the authorities in resuming the land from the petitioner and allotting it to him is perfectly legal and it was done in compliance with the provisions concerning the matter. Further, it was contended that after allotment of the property in his name, he had executed agreement as required and he is in its possession and he is in the process of setting up the industrial unit and for that purpose he had borrowed amounts from several financial institutions. 7. I have heard the counsel for the petitioner and the third respondent as also the learned Government Pleader. 8. The contention of the petitioner is that he obtained the land on out right purchase basis as is evident from Ext.P1 and after taking its possession, he had constructed boundary walls and had effected further improvements by constructing buildings and spending amount to the tune of Rs.4.5 lakhs. The third respondent is refuting the said contentions. According to him, it was not an out right purchase and that after its allotment the petitioner had neither constructed any building nor effected any improvement of appreciable nature on the land within a period of one year and that no further extension of time W.P.(C).No.26383 of 2005 8 was granted by the competent authorities. However, a perusal of the counter affidavit filed on behalf of the first respondent would reveal that the factum of allotment of the land to the petitioner on out right purchase basis was never disputed. Though it is stated therein that the petitioner had failed to implement the scheme and commission the unit even within the extended time it carried a specific statement which would belie the specific contentions as noticed above, of the third respondent. It reads thus:- “He has also remitted Rs.83,258/- towards the cost of building and other structures existing in the plot as valued by Asst. Executive Engineer, PWD building Subdivision, Alappuzha.” In the said statement the word ‘he’ refers to the third respondent herein. That apart, in his own counter affidavit, the third respondent would state that the value of the building standing on the property was assessed by the Asst. Executive Engineer, PWD subdivision Alappuzha as Rs.83,258/-. It is thus evident from the counter affidavits filed by the respondents Nos. 1 and 3 that the petitioner had in fact carried out constructions thereon and the value of the building situated on the land was assessed by the Assistant Engineer, PWD Subdivision, Alappuzha as Rs.83,258/-. In this context, Exts.P1 and P3 assume relevance. As per Ext.P1, the petitioner herein was alloted the land on out right purchase basis and he was directed to remit Rs.20,235 as full value of 15cents inclusive of the E.M.D deposited already. Of course, it carries a condition to the effect that the value of the land fixed on the basis of W.P.(C).No.26383 of 2005 9 proceeding No.ID3-1443/93 dated 7.10.93 of the second respondent was only tentative and might be revised due to fixation of the land value as a result of enhanced compensation of the land acquired or development charges incurred or for any other reason to be decided by the government. In the schedule given under Ext.P1, the description of the land has been given. The extent of the property has been specifically given there under as 15 cents and most importantly under the caption IMPROVEMENTS what has been entered is ‘NIL’. Ext.P3 certificate issued by the first respondent would also reveal that the land was alloted to the petitioner on out right purchase basis and that as on 4.6.99 also there was no building thereon. In the circumstances, the inevitable conclusion can only be that the petitioner had effected improvements of appreciable nature on the land. 9. The facts obtained in this case would, thus, reveal that 'the land' was actually alloted to the petitioner on outright basis as per Ext.P1 and thereafter, the petitioner took its possession and made improvements of appreciable nature thereon. Though the eligibility of the petitioner to get Patta in respect of 'the land' was certified as per Ext.P3, it was not actually issued in his name. Subsequent developments viz., failure to implement the scheme and failure to respond to the notices issued as per Ext.P6 and re-allocation as per Ext.P8. In the situations thus emerging Rules 11 and 16 of the Rules, 1969 W.P.(C).No.26383 of 2005 10 assume relevance and they read as hereunder: Rule 11: The Director of Industries & Commerce shall have the power to resume the land if the allottee contravenes any of the provisions of these rules or any of the provisions of the agreement executed by the allottee or in the event of the concern belonging to the industrialist being wound up or transferred to any other person, Company or group of persons, or in the opinion of the Director of Industries & Commerce there is misuse of the land. Rule 16: A period of 16 months is fixed as the period within which the allottee should utilise the land for the purpose for which it is allotted. However in deserving cases the Director of Industries & Commerce may allow time up to one year for utilising the land and for further extension of time, if found absolutely necessary, the allottee should obtain orders of the Government. [“If the allottee does not start construction of building or make any improvement of appreciable nature on the land allotted within a period of 6 months and further extension of time has not been given by the competent authority in this regard the land shall be resumed possession, realising 6% interest on the full cost of the land from the date of handing over possession to the date of resumption. In case the amount remitted by the allottee towards initial payment and subsequent instalments with interest if any, is in excess of the 6% interest on the cost of land, the balance amount shall be refunded to the allottee. On the other hand, if the amount already remitted by the allottee falls short of 6% interest on the cost of land, the same shall be recoverable from the allottee under the provisions of the R.R Act for the time being in force”.] 10. The scheme of the Rules, 1969 would make it clear that the mere outright purchase of 'the land' would not make it immune from resumption. In fact, the petitioner also did not raise any such ground in the Writ Petition. The W.P.(C).No.26383 of 2005 11 grievance of the petitioner is that it was resumed and then, re-alloted in flagrant violation of the principles of natural justice. However, the first respondent refuted the same and contended that though notices were issued to him, he did not accept the same and avail the opportunity. Further, it is contended that on the failure of the petitioner and his partner to present and pursue their case it was resumed and re-alloted to the 3rd respondent. The petitioner did not file any reply affidavit controverting contentions of the 1st respondent. However, it is a fact that he had outrightly purchased the land and hence, even on his failure, the respondent authorities were bound to strictly adhere to the procedures and provisions for resumption of alloted property. Ext.R3(f) agreement said to have been executed between the 3rd respondent and the 1st respondent on behalf of the Government of Kerala bears no date. Even if it is taken as duly executed it created only a right of hire-purchaser on the 3rd respondent. In his counter affidavit, the 3d respondent stated that he was in the process of setting up the industrial unit 'the land'. Even at the time of hearing it was not contended that he had, in fact, set up the industry and commenced its functioning. In the counter affidavit by the 1st respondent it has been stated:- “Accordingly on 3.12.2003, the 1st respondent resumed the alloted land from the party as per Order No.D1-4418/96 dt. 3.12.2003.” However, in page No.4 of the said counter affidavit it has been stated:- “As per Government Order No.297/70/1D dt.24.8.1970, clause No.9, the Director of Industries W.P.(C).No.26383 of 2005 12 has the powers to resume the land in the event of the allottee not commissioning the industry within one year from the date of allotment or within such further time as may be granted by Director of Industries & Commerce. The 1 st respondent is the officer to execute the land allotments and resumptions”. (emphasis supplied) At the same time, in Ext.P6 order it was ordered by the 1st respondent:- “In the circumstances explained above and in exercise of powers conferred on me, I hereby resume 15 cents of land comprised in Survey No.435/2 of Paravoor Village, Ambalapuzha Taluk previously alloted to Sri.P.K Suresh, Thaiparambil House, Amman Kovil Street, Mullackal, Alappuzha and Sri.V.S.Johnkutty, Vavakkattu House, Kattoor, Pollathai P.O to the department, forfeiting the EMD of Rs.1,000/- remitted by the party ”. 11. It is thus obvious that going by the very contentions of the first respondent, the competent authority to resume the land is the 2nd respondent. Rules 12 and 16 of the Rules, 1969 extracted above would fortify the same. In Ext.P6 there is no reference about any order passed the 2nd respondent. But, the petitioner is guilty of culpable delay and laches and, it is not forthcoming whether in the meanwhile, during the pendency of this Writ Petition the 3rd respondent has set up the industry and started its functioning. 12. In the circumstances expatiated above, I am of the opinion that the entire matter requires a proper consideration by the 2nd respondent. To enable the second respondent to make such a consideration, it is only proper to set W.P.(C).No.26383 of 2005 13 aside Exts.P6 and P8. Accordingly, Exts.P6 and P8 are quashed. There shall be a direction to the 2nd respondent to issue notices to the petitioner, his partner Sri.V.S Johnkutty and also the 3rd respondent and afford them an opportunity of being heard and then, to pass appropriate orders as expeditiously as possible, at any rate, within a period of three months from the date of receipt of copy of this judgment. The Writ Petition is disposed of, accordingly. (C.T. RAVIKUMAR, JUDGE) spc W.P.(C).No.26383 of 2005 C.T.RAVIKUMAR, J. W.P.(C).NO.26383 OF 2005 JUDGMENT November, 2009