IN THE HIGH COURT OF JUDICATURE AT PATNA CWJC No.13007 of 2003 Kwality Steel Industries Private Limited through its Managing Director Ashok Kumar Singh son of Late Jagarnath Singh, Manash Bhawan, Ist Floor, Ashok Rajpath, Police Station Pirbahore, District- Patna – Petitioner. Versus 1. The State of Bihar, through the Secretary, Department of Industries, Government of Bihar, Patna. 2. The Industrial Development Commissioner, Government of Bihar, Patna. 3. The Patna Industrial Area Development Authority, Udyog Bhawan, Patna- 800004, 4. The Secretary, Patna Industrial Area Development Authority Udyog Bhawan, Ist Floor, Patna- 800004. 5. The Area Incharge, Buxar Industrial Area/Estate, Buxar under Patna Industrial Area Development Authority, Udyog Bhawan, Patna 80004. 6. The Bihar Industrial Area Development Authority, Patna --- Respondents. ----------- For the Petitioner: Mr. Roy Shivajinath, Sr. Adv. With Mr. Tej Narayan Singh, Adv. For the State : Sri Niraj Nandan, GP-20. For BIADA : Sri Lalit Kishore, Sr. Adv. With Smt. Binita Singh, Adv. 10/ 27-01-2011 Heard learned counsel appearing on behalf of the petitioner, learned Government Pleader No. 20 appearing on behalf of respondent no. 1 and 2, and learned counsel appearing on behalf of respondent no. 3 to 6. 2. The petitioner has approached this Court by filing the present writ petition under Article 226 of the Constitution of India, raising a grievance with respect to order dated 06.03.2002 (Annexure-14) issued under the signature of the Development Officer, Patna Industrial Area Development Authority (respondent no.3), whereby allotment of land made in favour of the petitioner for 2 setting up an industry at Industrial area, Buxar, has been cancelled primarily on the ground that despite allotment of the aforesaid lands in the year 1986 and 1988 , no industrial unit has been set up by the petitioner and further even cost of the lands has not been paid, leading to initiation of a certificate proceeding under the provisions of the Bihar and Orissa Public Demands Recovery Act, 1914. The appeal preferred by the petitioner against the aforesaid order dated 06.03.2002 has been rejected by an order dated 08.10.2003 (Annexure-17) and the original impugned order dated 06.03.2002 (Annexure-14) has been affirmed by the appellate authority in exercise of powers under the provisions of the Bihar Industrial Areas Development Authority Act, 1974 (hereinafter referred to as “the Act” only in short). 3. Mr. Roy Shivaji Nath, learned Senior counsel appearing on behalf of the petitioner, in his elaborate arguments, has submitted that originally M/S Gautam Steel Industries under the proprietorship of one Shri Anil Kumar Singh, submitted an application for allotment of land by the competent authority for setting up a small scale industry, namely, Re-Rolling Mill at the Industrial area, Buxar. The Patna Industrial Area Development Authority (in short “PIADA”), respondent no.3, initially allotted 25,000 sq. ft. of land by an order dated 18.12.1986 3 to aforesaid M/S Gautam Steel Industries (P) Ltd. for total price of Rs. 48,943.98. Subsequently in the year 1987 with the permission of the authorities concerned, name of M/S Gautam Steel Industries was changed as “Kwality Steel Industries (Private) Limited, the petitioner herein in the present proceeding. After change of name on the basis of fresh application, respondent no.3 further allotted 15,000 sq. ft. of the land to the petitioner by an order dated 06.07.1987 for a total price of Rs. 32,303.71, and, therefore, admittedly the petitioner was allotted 40,000 sq. ft. of land for setting up a small scale industry. 4. It is further case of the petitioner that it was given physical possession of entire area of 40,000 sq. ft. of land by a document dated 22.04.1988 (Annexure-2). The petitioner was initially granted registration for six months vide order dated 06.12.1986 (Annexure-1), which was extended for further period of six months till 06.11.1988, but for the reasons best known to the respondent- authorities, the period of registration was not extended. Consequently , the small scale industry unit could not be set up by the petitioner, despite the fact that a loan amount of Rs. 41,00,000/- (Rs. Forty one lacs) was sanctioned by the Bihar State Financial Corporation, Ara. 5. It is submitted on behalf of the petitioner that for the reasons, which was beyond the control of the 4 petitioner, the small scale industry could not be set up at the industrial area allotted to him, but he remained in continuous possession over the same. Suddenly by the impugned order dated 06.03.2002 (Annexure-14), the order of allotment has been cancelled without following the principles of natural justice and in violation of the statutory provisions. The appeal preferred by the petitioner was also rejected by the impugned appellate order dated 08.10.2003(Annexure-17) without taking into consideration the relevant facts involved in the present case. 6. Mr. Niraj Nandan, learned Government Pleader No.20, appearing on behalf of respondent no. 1 and 2, and Mr. Lalit Kishore, learned Sr. Counsel appearing on behalf of respondent no. 3 to 6, in their elaborate submissions, have supported the impugned action of the respondents and according to them, for an inherent defect of non-impleadment of subsequent allottee of the land in question as respondent in the writ petition, the same is fit to be dismissed by this Court. It is submitted on behalf of the respondents that admittedly the petitioner was allotted 40,000 sq. ft. of land in the year 1986-87 at industrial area , Buxar for setting up a small scale industry and possession of the same was given to him as far back as on 22.04.1988, vide Annexure-2. As per 5 terms of the order of allotment, the petitioner was required to start production in the industrial unit within six months from the date of possession of the land. It was also contemplated in the order of allotment dated 11.12.1986 that if there was no substantial progress for execution of the scheme for setting up the industry, the allotment of land can be cancelled. According to the case of the respondents though possession over the land was given to the petitioner as far back as in the year 1988, but excepting the construction of boundary wall, no step, at all, has been taken by the petitioner for setting up any industry within its premises. Even the construction of the building was not started, therefore, several notices were issued to the petitioner asking him to take steps for setting up the small scale industry over the land allotted to him, otherwise steps shall be taken for cancellation of the allotment order. It is further case of the respondents that for the allotted area, cost of the land was required to be paid by the petitioner, but despite passage of long time cost of the same was not paid by the petitioner, which accumulated to the tune of Rs. 1,23,819.09 till 30.06.2000, as a result of which respondents were compelled to take steps for recovery of the aforesaid amount by filing a certificate case. 7. It is common case of the parties that after 6 cancellation of allotment of the lands by the impugned order dated 06.03.2002, the lands in question in the industrial area has been settled to a third party, though there is a little controversy in this aspect. According to the petitioner only small area of land has been settled to third party, but according to respondent no. 3 to 6 entire area of land has been settled to third party and legal rights have accrued in favour of third party, who has admittedly not been impleaded as a party- respondent in the present proceeding. According to learned counsel for the respondents in absence of the new settlee, the matter cannot be effectively decided. According to them, despite knowledge and information to the petitioner about settlement of the land to a third person, no step has been taken to implead said person as a party in the present proceeding. Therefore, for this inherent defect itself, this writ petition is liable to be dismissed. 8. A supplementary counter-affidavit has been filed on behalf of respondent no. 1 and 2 stating therein that Government of India has imposed a restriction for registration of any steel Re-Rolling Mill w.e.f. 12.01.1988 and, therefore, department of Industries, Govt. of Bihar could not have granted registration to the petitioner for starting Steel Re-Rolling small scale industry in violation of the policy decision of the Union of India. 7 9. After having heard the parties at length and after considering the materials on record, this Court finds that despite allotment of 40,000 sq. ft. of land in an industrial area at Buxar and despite possession having been given to the petitioner, as far back as in the year 1988, no step was taken by him for setting up any small scale industry there. As per inspection report of the respondents, not even semblance of an industry is there over the lands in question. The claim of the petitioner, that he invested huge money for construction of a boundary wall, will not show in any manner that steps were taken for setting up an industrial unit within its premises. Apparently the loan amount was not released to the petitioner by Bihar State Financial Corporation in view of the fact that the petitioner failed to get it registered by the department of Industry and failed to take appropriate steps for setting up the industry. From perusal of the allotment order dated 18.12.1986 and 06.07.1987, (documents are not in controversy) this Court finds that there was a specific provision in Clause-11 of the allotment order, whereby the petitioner was obliged to start production within six months from the date of giving possession over the lands allotted for the same. For ready reference Clause- 11 of the allotment order is reproduced herein below:- “ 11-Hkwfe ds LokfeRo dks frfFk ls 6 eghus ds vUnj bdkbZ dks mRiknu dk;Z izkjaHk dj nsuk gksxkA ;kstuk ds dk;kZUo;u 8 djus dh fn'kk esa Bksl izxfr ugh fn[kkus ij Hkwfe dk vkoaVu jn~n dj fn;k tk;sxka ” 10. From the averments made in the counter- affidavit/ supplementary counter affidavit filed on behalf of the respondents, this Court further finds that notices were issued to the petitioner before passing the impugned order, as contained in Annexure-14. Paragraphs 15,16 and 17 of the counter-affidavit filed on behalf of respondent no. 3 and 4 would be relevant for the purpose of deciding this issue, which are reproduced herein below:- “15- That since the petitioner did not proceed with the construction of manufactory for establishing the industry and furthermore as it did not deposit the arrears of ground rent amount to Rs. 123819/- PIADA once again issued notice vide letter no. 213/d dated 28.02.2001 to the petitioner calling upon it to show cause as to why the allotment in favour of the unit be not cancelled. The petitioner did not respond to this show cause notice vide letter dated 28.02.2001, whereupon PIADA with a view to give proper opportunity to the petitioner issued another show cause notice vide letter no. 41/D dated 17.01.2002, i.e. almost a year after the first show cause notice to enable the petitioner to fulfill the conditions on which allotment of land had been made to it. 16- That thereafter again the Area Incharge, Industrial area, Buxar by letter No. 9 dated 30.01.2002 intimated PIADA that in spite of the 9 fact several notices were served and constant persuasion were made even then the petitioner has not started constructions of the manufactory over the land allotted to it and no effort has been made so far for establishing the industry nor the petitioner has made endeavor to make payment of the arrears of ground rent which was due against it. 17- That as the petitioner did not file any reply to the above show cause even after service of two show cause notices PIADA by office order bearing memo No. 159/D dated 06.03.2002 cancelled the allotment of land in favour of the petitioner M/S Kwality steel Industries Pvt. Ltd. on the ground that till then the petitioner had not made construction on the land for establishing the industry nor the petitioner had paid the dues owed by it of PIADA amounting to Rs. 123819/-. As a consequence thereof the Area Incharge, Industrial Area, Buxar took back physical possession of the plot allotted to the unit M/s Kwality Steel Industries Pvt. on 20.03.2002 in the forenoon which fact as intimated by him through letter No. 28 dated 21.02.2002 to PIADA. Further PIADA thereafter took steps for realization of the arrears of ground rent by initiating a certificate proceeding against the proprietor of the unit M/s Kwality Steel Industries Pvt. Ltd.” 11. Learned counsel for the petitioner has lastly drawn attention of this Court towards a judgment of a learned Single Judge of this Court in the case of Deepak 10 Paints (P) Ltd.Vs. State of Bihar & Ors.,reported in 2008(2) PLJR 293 and submits that in view of the ratio laid down by this Court the Managing Director could not have passed the order of cancellation of the allotment of the land. Without going into details about that submission, it is suffice to say that the facts involved in that case was entirely different from the facts involved in the present case. In the case of Deepak Paints(P) Ltd. V. State of Bihar & Ors. (supra), the lease deed was executed and where-after order of cancellation was issued. However, in the present case, admittedly lease deed has not been executed in favour of the petitioner. Merely order of allotment was issued and possession was given to the petitioner for setting up the industry. The petitioner has apparently failed to set up any industry despite passage of long 14 years, since the date of allotment, when the impugned order, as contained in Annexure-14, was passed. Furthermore, the petitioner has failed to pay even the cost of the lands allotted to him. It is further apparent that the petitioner was interested only in allotment of land at the Industrial area, Buxar, but he was not sincerely interested in setting up any small scale Industrial unit there. 12. For the reasons recorded above, this Court finds that equity is not in favour of the petitioner. The 11 action of the respondents cannot be legally faulted. Consequently this Court does not find any merit in the present writ petition. It is accordingly dismissed. However, there shall be no order as to costs BTiwary/ ( Birendra Prasad Verma, J.)