IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 03.06.2008 C O R A M THE HONOURABLE Mr.JUSTICE P.JYOTHIMANI W.P.Nos.1964 of 2006 & 5365 of 2007 M/s.Southern Industrial Corporation Ltd., (now a division of South India Corporation (Agencies) Ltd., 73, Armenian Street, Chennai – 600 001. Rep. by its Chief Human Resources Officer Mr.S.Rajappan .. Petitioner in W.P.No.1964/06 M/s.India Radiators Ltd., Principal Office at 39/1 G.N.Chetty Street, 1st Floor, Mylapore, Chennai – 4, rep. by its Director. .. Petitioner in W.P.No.5365/07 -Vs- The Government of Tamil Nadu, Rep. by its Secretary to Government, Revenue Department, Fort St. George, Chennai – 600 009. .. Respondents in both the WPs. Prayer in W.P.No.1964 of 2006: Writ Petition filed under Article 226 of the Constitution of India for the issuance of a Writ of Mandamus directing the respondent Government to dispose of the representation dated 22.02.2003, within the time limit, as may be fixed by this Court. Prayer in W.P.No.5365 of 2007: Writ Petition filed under Article 226 of the Constitution of India for the issuance of a Writ of Mandamus directing the respondent Government to issue orders pursuant to the directions of this Court in Contempt Petition No.46 of 2006 in W.P.No.26745 of 2004 within a time limit as may be stipulated by this Court. For Petitioners : Mr.T.R.Rajagopalan Senior Counsel for Mr.G.Raghavendran. For Respondent : Mr.G.Masilamani, Advocate General, Assisted by Mr.D.Srinivasan, AGP - - - - https://hcservices.ecourts.gov.in/hcservices/ C O M M O N O R D E R The writ petition in W.P.No.1964 of 2006 is for a direction against the Government to dispose of the representation dated 22.02.2003, filed by Southern Industrial Corporation Ltd., which is now a division of South India Corporation (Agencies) Ltd., represented by its Chief Human Resources Officer. 2. The writ petition in W.P.No.5365 of 2007 is filed by M/s.India Radiators Ltd., for a direction against the respondent Government to issue orders pursuant to the direction of this Court in Contempt Petition No.46 of 2006 in W.P.No.26745 of 2004. 3. The factual matrix relating to these cases is that the Government has assigned a total extent of 37.39 acres of land in S.No.459/2 at Puzhal Village (Redhills) on market value to M/s.Southern Industrial Corporation Ltd., Madras, the petitioner in W.P.No.1964 of 2006 in G.O.Ms.No.2240, Revenue Department, dated 31.05.1957. The said assignment was for expansion of its factory. Out of the said total extent of land, land measuring 7.10 acres was transferred by the M/s.Southern Industrial Corporation Ltd., to M/s.India Radiators Ltd., which is its sister concern, the writ petitioner in W.P.No.5365 of 2007. On the basis that the said transfer is in contravention of the assignment of land, the Government ordered resumption of land in G.O.Ms.No.1786, Revenue Department, dated 07.08.1975. As against the said resumption order, writ petitions were filed by both the writ petitioners. W.P.Nos.5004 & 5192 of 1979 were filed by M/s. Southern Industrial Corporation Ltd., and W.P.Nos.5173 & 5279 of 1979 were filed by M/s. India Radiators Ltd. The said writ petitions were disposed of by an order dated 05.09.1986, by appointing Mr.A.L.Somayaji, Advocate as arbitrator for the purpose of determining the market value of the lands, subject matter in dispute and on said determination, the State shall reassign the lands concerned to the assignee on their paying the market value as per the determination. 4. As against the said order, the State Government has filed Writ Appeal in W.A.Nos.1236 to 1239 of 1986 in which by an order dated 09.08.1989, while dismissing the appeal, it was made clear that arbitrator could continue, directing him to fix the market value of the property as on 28.10.1981, the date on which the Government has resolved to reassign the lands to the individual purchasers from the original assignee viz., Southern Industrial Corporation. The Award of the arbitrator dated 18.03.1991, was received by this Court in O.P.No.217 of 1991 and by an order dated 13.08.1991, the market value of the land in question was fixed at the rate of Rs.2,500/- per ground as on 28.10.1981. Therefore, according to the petitioners, on passing of the said decree based on the arbitration Award, the entire https://hcservices.ecourts.gov.in/hcservices/ matter has become final and therefore, the Government should have annulled the earlier order for resumption and reassigned the lands to the extent of 25.18 acres to the petitioner in W.P.No.1964 of 2006 M/s. Southern Industrial Corporation Ltd., and 6.86 acres to the petitioner in W.P.No.5365 of 2007 M/s.India Radiators Ltd., who is the transferee from the original assignee viz. M/s.Southern Industrial Corporation Ltd., who has filed writ petition in W.P.No.26745 of 2004 for a direction against the Government to dispose of the representation made between 25.02.1998 to 28.07.2004 for reassignment of lands. By an order dated 20.09.2004, this Court has disposed of the said writ petition directing the respondent to consider the said representations and pass orders on merit and in accordance with law within a period of eight weeks. Since no order was passed, M/s. India Radiators Ltd, filed contempt petition No.46/2006, which was disposed of by this Court taking into consideration that the Government needed two months time due to the intervening General Elections to the Tamil Nadu Assembly, directed the Government to pass orders immediately after the elections and with that direction, the contempt petition was closed. In spite of the said order, the respondent Government has not passed any orders, which necessitated the petitioners to file the above said writ petitions for directions as stated above. 5. The Government has filed counter affidavit in W.P.No.5365 of 2007. It is the case of the respondent Government that an extent of 39.94 acres of land comprised in S.No.459/2 and 460/2 at Puzhal Village were assigned to M/s.Southern Industrial Corporation Ltd., with conditions under Revenue Standing Order 15 and 24 as per G.O.Ms.No.2240, Revenue Department, dated 31.05.1957 and G.O.Ms.No.4947, Revenue Department, dated 16.11.1961. However, M/s. Southern Industrial Corporation Ltd., has sold an extent of 14.76 acres against the assignment condition to the following three organisations viz., Name of company Date of Sale Extent of acres Tube Suppliers Ltd. 02.03.1962 5.00 India Radiators Ltd. 18.07.1963 4.76 Popli Raja High School 14.10.1970 5.00 Total 14.76 It is also stated by the respondent that subsequently, Tube Suppliers Ltd to whom M/s. Southern Industrial Corporation Ltd., has sold 5.00 acres, has sold to: (1) M/s.Tokushu Menon Papers Ltd., an extent of 2.90 acres on 14.10.1977 and https://hcservices.ecourts.gov.in/hcservices/ (2) M/s. India Radiators Limited an extent of 2.10 acres on 17.01.1972. Therefore, M/s. India Radiators Ltd., petitioner in W.P.No.5365 of 2007 have purchased 6.86 acres out of the total assigned lands. Since that was in violation of the assignment condition, by G.O.Ms.No.1786, Revenue Department, dated 07.08.1975, the Government ordered resumption of the entire land measuring 39.94 acres assigned to M/s.Southern Industrial Corporation Ltd., 6. While the said cases were pending it was informed by the Government to the Court that the Government has decided to reassign the lands to the companies concerned on collection of double the market value. Therefore, this Court has appointed Mr.A.L.Somayaji, Advocate as arbitrator to determine the market value of the lands. Writ Appeals filed by the Government was dismissed and the arbitrator has fixed the market value at the rate of Rs.2,500/- per ground as on 28.10.1981, without any further particulars as to which basis the amount was fixed. The petitioners have contended that the land value is Rs.1,500/- per ground while the Government has placed claim of Rs.3,400/- per ground. The Award of the arbitrator dated 18.03.1991, was sent to the Government on 12.04.1991 and direction was issued to take necessary action to set aside the Award, but no action has been taken by the District Administration. In those circumstances, O.P.No.217 of 1991 filed by the Arbitrator has been allowed and decree was passed on 13.08.1997, in terms of the Award. 7. It is the case of the respondent Government that guideline value as on date in respect of S.No.459/2 works out to Rs.12,48,000/- per ground and Rs.5,08,800/- per ground in respect of S.No.460/2. It is also stated by the respondent in the Counter affidavit that in February 1998, M/s.Southern Industrial Corporation Ltd., and M/s. India Radiators Limited represented to the Government to reassign the lands of 25.18 acres and 6.86 acres respectively in S.Nos.460/2 and 459/2. In the meantime, M/s.Tokushu Menon Papers Ltd., who purchased 2.90 acres from M/s.Tube Suppliers Ltd., filed writ petition in W.P.No.14963 of 2001 with request to reassign the lands and the said writ petition was dismissed on 02.08.2001, leaving it open to the petitioner to pursue his remedies before the revenue authorities. On M/s. India Radiators Ltd., filing writ petition in W.P.No.26745 of 2004, direction was issued by this Court on 20.09.2004, to consider the representation and pass orders. In the meanwhile in the Contempt Application filed by M/s. India Radiators Ltd in Contempt Petition No.46 of 2006, basing reliance on the letter of the Government dated 10.03.2006, addressed to the then Additional Government Pleader, the contempt petition was closed with a direction to the Government to pass orders immediately after the elections are over. https://hcservices.ecourts.gov.in/hcservices/ 8. It is the case of the respondent Government in the counter affidavit that any reassignment of lands could be based only on the market value prevailing on the date of reassignment and therefore the market value as on 28.10.1981, cannot be legitimately considered to be the value of the land. It is also the case of the respondent that assignment of the said land at the old rate would be prejudicial to public interest. By applying the same, heavy financial loss will accrue to the Government and therefore, fresh Arbitrator has to be appointed to fix the correct market value. Therefore, according to the respondent after a lapse of 25 years, it is improper to assign the land on the value which was in existence as on 28.10.1981. 9. It is the case of the respondent Government that by letter dated 03.05.2007, the Government was prepared to reassign the land on the fresh market value and without challenging the said order, present writ petition is filed and therefore the same is not maintainable especially in the changed circumstances. It is also stated that there was some dispute in respect of employees of M/s.India Radiators Ltd. Employees numbering 143 out of whom many were terminated and few were given re-employment and again terminated and subsequently the company was closed between 16.11.1999 to 06.07.2000 and the matter was referred to the Commissioner of Labour and the matter is pending and no activities are going on in the factory premises. 10. It is also stated that the problem was referred to Board for Industrial and Financial Restructure (BIFR) in which there was a direction to liquidate the company and to declare it as a sick industry. In such circumstances, reassignment of the said lands to the petitioner company will only pave way to the sick company to use the land as real estate value to mitigate the company's liabilities and not for industrial purpose. Therefore, the company no longer requires land to carry out the business in radiator industry, which was the object of the Government and therefore in the changed circumstances there is no possibilities for reassignment of land on the value fixed on 28.10.1981. 11. Mr.T.R.Rajagopalan, learned senior counsel appearing for the petitioner would submit that in as much as under the Arbitration Act, 1940, the Award passed by the Arbitrator has become a decree which has become final, it is the duty of the respondent Government to act as per the decree passed in terms of the Arbitration Award. The conduct of the respondent Government in claiming the market value as on today is only a gross violation of the decree passed by this Court on the original side. The learned senior counsel would also submit that if the apprehension of the Government is that the petitioner company in W.P.5365 of 2007 being declared as a sick industry, any reassignment will only pave way not to use such land for industrial https://hcservices.ecourts.gov.in/hcservices/ purpose, the petitioner in the said writ petition is prepared to file affidavit to the effect that such land will be used only for industrial purpose. In fact, such an affidavit was also filed on behalf of M/s. India Radiators Ltd., giving an undertaking that after the assignment, the petitioner company will use the said property only for industrial purpose. It is also stated in the said affidavit of March 2008 that BIFR directed winding up of the company against which the company has filed an appeal before AAIFR. It is also stated that AAIFR has directed the company to file rehabilitation scheme and the same has already been submitted and it is pending. As per the rehabilitation scheme a joint venture arrangement for production and manufacture of Automobile components and accessories including Oil Coolers and Exhaust System from the factory situate in the property were made and revised rehabilitation scheme would be submitted by the company before the AAIFR. The said petition is filed without prejudice to the right of the petitioner company. 12. However, subsequently, on instructions from the Government, the learned Advocate General has submitted that the Government was not willing for any assignment. It is the contention of the learned Advocate General that in so far as the petitioner in W.P.No.5365 of 2007, the circumstance in existence as on today is totally different from what was in existence earlier. Admittedly, the company has become sick and BIFR has passed order of winding up and the company remained closed from 1999 and simply because the rehabilitation scheme is pending before AAIFR, it does not mean that there will be revival of industrial activities by the petitioner company especially in the circumstances that 143 workers are also making a claim against the company and therefore it cannot be said that there should be any assignment to such company. 13. I have heard Mr.T.R.Rajagopalan, learned senior counsel appearing for the petitioners and Mr.G.Masilamani, learned Advocate General appearing for the respondent and gave my anxious thoughts to the issues involved in this case. 14. As it is seen in the counter affidavit, the extent of lands assigned/transferred, which stood non-controverted by the writ petitioners are as follows: (i) The assignment to M/s. Southern Industries Corporation Ltd., writ petitioner in W.P.No.1964 of 2006 an extent of 39.94 acres under G.O.Ms.No.2240, Revenue Department, dated 31.05.1957 and G.O.Ms.No.4947, Revenue Department, dated 16.11.1961. (ii) M/s. Southern Industrial Corporation Ltd., sold 14.76 acres out of 39.94 acres to three companies viz., https://hcservices.ecourts.gov.in/hcservices/ Name of company Date of Sale Extent of acres Tube Suppliers Ltd. 02.03.1962 5.00 India Radiators Ltd. 18.07.1963 4.76 Popli Raja High School 14.10.1970 5.00 Total 14.76 (iii) M/s. Tube Suppliers Ltd who purchased 5 acres from M/s. Southern Industrial Corporation Ltd., as stated above has sold to two companies viz., Name of company Date of Sale Extent of acres Tokhusu Menon Private Ltd 14.10.1970 2.90 India Radiators Ltd. 19.01.1972 2.10 Total 5.00 (vi) The extent of land stood as follows: (a) M/s. Southern Industrial Corporation Ltd, writ petitioner in W.P.No.1964 of 2006 - 25.18 acres (b) M/s. India Radiators Ltd., writ petitioner in W.P.No.5365 of 2007 (4.76 + 2.10) - 6.86 acres (c) M/s.Tokhusu Menon Private Ltd., - 2.90 acres (d) M/s. India Radiators Ltd., - 5.00 acres the other two companies are not parties before this Court. 15. A reference to the said Government orders shows that assignments are subject to usual conditions of assignment in Board Standing Order (BSO) 15, special condition prescribed in para 6 of BSO 24 and the said assignment is also on payment of single market value of Rs.1,000/- per acre. The assignment as per the Government Order is for the expansion of factories and the lands assigned are registered as grazing ground poramboke. Under the BSO 15 which deals with the disposal of land, while Clause 1 speaks about the general principles, Clause 1.A deals with various conditions regarding the assignment, alienation, lease etc., which is as follows: “1.A. (i) Grant of land by the Government in the form of assignment, alienation, lease, etc., is governed by the provisions of the Government Grants Act (Central Act). According to the provisions in the Government Grand Act, grant of Government land will not be governed by the https://hcservices.ecourts.gov.in/hcservices/ provisions of the Transfer of Property Act, unless specific provisions are made in the order of grant by the Government that title to the property will pass on to the assignee subject to complying with the conditions of grant or after the expiry of a certain period. The grantee of the land, therefore, does not acquire title, simply under the orders of grant of land by the Government. (ii) The land may be assigned for private purpose, such as for cultivation, for house site and for industrial purposes free of land value or on payment of land value, subject to the conditions imposed in order of grant. The land would be available with the grantee, so long as the conditions of grant are satisfied. The question of acquisition of title to the land will be governed only by the conditions of grant and not otherwise. (iii) Assignment of land free of value:- If the land was assigned for cultivation or house site purpose, free of land value, and if there was a condition that the land should be utilised within a specific period and it could be alienated after expiry of the specific period, then the assignee acquires title to the property, only after the land was utilised for the purpose for which it was granted and only after expiry of the specific period. The land can be resumed, if the land is alienated, before the expiry of period specified, even if the land was utilised within the period specified for the purpose for which it was granted. (iv) Assignment of land free of value:- If, on the other land – condition was imposed when land was assigned, free of land value to the effect that the assignee should not be disposed of the property, then the title to the land does not pass on to the assignee at any length of time. He can utilise the land, as long as the conditions are satisfied. If the conditions of grant are violated then the land can be resumed. (v) Assignment of land on payment of value:- In case, the land is assigned, on payment of land value and a condition was imposed in the order of grant, to the effect that the assignee could not dispose of the property, then the land could be resumed, if the land was either not utilised for the purpose for which it was granted, within the specified period or alienated to others, even after utilising the land. (vi) Payment of compensation on resumption:- Regarding https://hcservices.ecourts.gov.in/hcservices/ the payment of compensation of the land or improvements made therein or towards structures erected, in the case of lands assigned, on payment of land value, if a condition was imposed to the effect that no compensation would be paid towards the land value or improvements made therein or towards structures erected, and if the land is resumed for violation of the conditions of grant, then the land could be resumed, without payment of compensation to land value or improvements made or structure constructed. If the condition imposed relates only to the non-payment of compensation to the improvements made or structures erected, then it should be taken for granted that no compensation should be made to the land value also. (vii) Payment of compensation on resumption:- In case of land assigned to a person, on payment of land value with usual conditions and also another condition that the assignee could dispose of the property, after expiry of a specific period, then only, he acquires title to the property under the Transfer of Property Act, after the expiry of the time limit specified therein and only after the conditions of the grant are satisfied. (viii) Payment of compensation on resumption:- If, on the other hand, a condition was imposed to the effect that the assignee could not alienate the land after expiry of the specific period, within which the land should be utilised then the land could be resumed, without payment of compensation to the land or for the improvements made or the structures constructed, if the land is alienated, at any time, notwithstanding the fact that the conditions of grant are complied with” 16. For the purpose of the present case and on the reading of the Government orders by which assignment was made to M/s.Southern Industrial Corporation Ltd., it has to be taken as assignment of land on payment of value which is covered under Clause 1.A(i) and 1.A(v). The said condition enables the Government to resume the land if it is not used for the purpose for which it was assigned. Likewise, BSO 24 which deals with the placing State land at the disposal of a person, an institution etc., para (6) imposes condition for grant of State land which is as follows: “6. Condition for grant of State land- (i) Lands at the disposal of Government:- A grant of State land whether for religious, educational or other public purpose should always contain the following conditions:- https://hcservices.ecourts.gov.in/hcservices/ (1) The land shall be used........... and for no other purpose. (2) The Government may resume the land wholly or in part with any buildings thereon, in the event of the infringement of any of the conditions of the grant. In the event of such resumption no compensation shall be payable for any improvements that may have been effected, or other works that may have been executed on the land by the grantee and the grantee shall not be entitled to the repayment of any amount that may have been paid to the Government for the grant. If there are buildings on the land the Government may direct the grantee to remove them. The land, if utilised for commercial purpose, when the grant is made free of land value, the beneficiary shall be liable to pay the market value of the land either totally or for the portion converted into commercial purpose as decided by the Government. (3) The Government may resume the land wholly or in part, with any buildings thereon, if in the opinion of the Government the land is required for a public purpose or for conducting mining operations. In the event of such resumption or in the event of the acquisition of the land for any reason, the compensation payable for the land and trees, shall in no case exceed the amount paid for them by the grantee or their value at the time of resumption or acquisition whichever may be less. (4) In the event of resumption under condition (3), if there are buildings on the land, the Government shall pay compensation for them in accordance with the provisions of condition (5). (5) In the event of the resumption of land under condition (3) or in the event of the acquisition of the land for any reason the compensation payable for buildings or other improvements shall in no case exceed the amount paid for them by the grantee at the time of grant or their value at the time of resumption or acquisition whichever may be less, together with the initial cost or the value at the time of resumption or acquisition, whichever may be less of any buildings erected or other improvements effected on the land by grantee in accordance with the terms of the grant. The amount of any grant made by the Government towards the cost of the buildings or other improvements shall be deducted from the compensation payable under this condition. https://hcservices.ecourts.gov.in/hcservices/ (6) In the event of the grantee refusing to remove the buildings, when so directed under condition (2), the Government may remove them and realise the cost of the removal by the sale of the materials. (7) In the event of the voluntary