*THE HON'BLE SRI JUSTICE P.S. NARAYANA +W.P.No.25167/2005 and W.P.No.7619/2006 % 30-11-2007 W.P.No.25167/2005 # B. Satish Kumar Gupta .. Petitioner And $ Government of Andhra Pradesh, Rep. by its Secretary, Industries & Commerce (IF.CELL) Department, Secretariat, Hyderabad and 2 others .. Respondents W.P.No.7619/2006 # B. Satish Kumar Gupta .. Petitioner And $ Government of Andhra Pradesh, Rep. by its Secretary, Industries & Commerce Department, Secretariat, Hyderabad and 4 others .. Respondents <GIST: >HEAD NOTE: ! Counsel for the petitioner : Sri Hariharan ^ Counsel for the respondents: A.G.P. for Industries, Sri Pratap Reddy, Sri K.V.Simhadri and Sri Rama Rao Ghanta ?CASES REFERRED : THE HON'BLE SRI JUSTICE P.S.NARAYANA W.P.M.P. No.18764/2007 and Writ Petitions No.25167/2005 and 7619/2006 Date: 30th November, 2007 Between:- W.P.No.25167/2005 B. Satish Kumar Gupta .. Petitioner And Government of Andhra Pradesh, Rep. by its Secretary, Industries & Commerce (IF.CELL) Department, Secretariat, Hyderabad and 2 others .. Respondents W.P.No.7619/2006 B. Satish Kumar Gupta .. Petitioner And Government of Andhra Pradesh, Rep. by its Secretary, Industries & Commerce Department, Secretariat, Hyderabad and 4 others .. Respondents THE HON'BLE SRI JUSTICE P.S.NARAYANA W.P.M.P. No.18764/2007 and Writ Petitions No.25167/2005 and 7619/2006 COMMON ORDER:- These two Writ Petitions are being disposed of by a common order in view of the commonality of the parties and also the subject matter as well. 2. Sri Hariharan, the learned Counsel representing the writ petitioner in both these Writ Petitions, had taken this Court through the respective pleadings of the parties and also the material available on record and specifically pointed out under what circumstances, the Writ Petition had been withdrawn and the proceedings Lr.No.10/DSK.25/DAA/93, dt. 16-11-1993, had been strongly relied upon. The Counsel also explained the cancellation of the lease by G.O.Ms.No.225 and the Government obtaining possession and further relied upon Azamabad Industrial Area (Termination and Regulation of Leases) Act, 1992 and the suitable amendments thereto. The learned Counsel also explained the interim order of status quo and how an allotment of small portion had been made for construction of M.R.O.’s Office and the learned Counsel also explained the petitioner filing Writ Petition W.P.No.4561/2002 whereunder this Court directed the Government to consider fresh application of the petitioner for lease in accordance with the provisions of the Act aforesaid. The learned Counsel also explained the notification dt.17-2-2004 issued under the Act aforesaid calling for applications for fresh leases from occupant industrialists in the light of the termination of the leases by operation of law under the Act. The Counsel also explained that the writ petitioner filed an application on 17-3-2004 and the Government rejected the application on the ground that the writ petitioner was not running any industry on the relevant date in the year 1992 and also on 17-2-2004. The appeal against such order was rejected on 18- 11-2004. In W.P.No.21410/2004 this Court directed the Government for fresh disposal of the application of the writ petitioner. The learned Counsel also explained the order made in W.P.No.1812/2006 and under what circumstances the first Writ Petition was filed and subsequent thereto, the second Writ Petition also was filed. The Counsel also explained the inconsistent stands taken by the Government, the ground that there was no industrial activity from 1967 onwards is an unsustainable ground since even as per the stand taken by the Government, this cannot be a correct stand. The industrial activity had been there from 1967 to 1988 onwards. The learned Counsel also made elaborate submissions that in the light of the facts and circumstances, both the doctrine of promissory estoppel, doctrine of legitimate expectation would come into play. Having promised to consider the application of the petitioner, despite the order of status quo, an allotment had been made and the same is bad in law. There is absolutely no objectivity in considering the application. The learned Counsel while further elaborating his submissions, would maintain that it is a case where entire industrial estate had been cancelled and certain litigations were fought even from the year 1990 onwards, the lis is pending. R.3 was inducted into possession during the pendency of the Writ Petition due to certain political reasons. Second Writ Petition is only a consequential Writ Petition. The learned Counsel also pointed out to the relevant paras of the counter affidavit and would maintain that the Government is bound to keep up the promise especially when the withdrawal was made at the instance of the Government. Hence, in the facts and circumstances, the Writ Petitions are to be allowed. The learned Counsel also placed strong reliance on certain decisions to substantiate his submissions. 3. The learned A.G.P. for Industries had taken this Court through the contents of the counter affidavit and would submit that the Unit was run till November, 1975. The learned A.G.P. for Industries also explained the scope and ambit of the Act and the Amendment Act as well and would maintain that the lease was cancelled and an allotment was made. The learned Counsel also had taken this Court through G.O.Ms.No.225, dt.23-03-1990 and also would maintain that the sub-letting of the premises is also impermissible. The learned A.G.P. for Industries explained the violations or the contraventions in this regard. 4. Sri Pratap Reddy, the learned senior Counsel representing R.3 would maintain that the Government had taken possession on 11-5-1990 and the Act was not implemented up to 17-2-2000. The learned senior Counsel also would maintain that W.P.No.7025/1990 had been withdrawn without reserving any liberty whatsoever and the alleged promise of the Government had not been incorporated and in the light of the same, the said withdrawal in a way would operate as res judicata and any contra contentions cannot be sustained in the light of the Order XXIII Rule 3 of the Code of Civil Procedure. The learned senior Counsel also had drawn the attention of this Court under Sections 3 and 4 of the Act and explained the scope and ambit of the words ‘the person in occupation’ in Section 4 of the Act and would maintain that in the light of the fact that on the relevant dates, the petitioner was not in possession, an application in accordance with provisions of the Act cannot be maintained. The learned senior Counsel also pointed out that the 3rd respondent in fact purchased the property at the market price. It is not as though the whole area had been given to the 3rd respondent apart from to the M.R.O.s Office and still much extent of the land is available and may be if the Government is inclined to consider the case of the petitioner, the same may be considered in accordance with law relating to the rest of the extent. 5. Sri K.V.Simhadri and Sri Rama Rao Ghanta also substantially made similar submissions. 6. Heard the Counsel. Perused the respective pleadings of the parties and also the material placed before this Court. 7. W.P.No.25167/2005 is filed for a Writ of Mandamus or any other appropriate writ declaring the action of the 1st respondent contained in Memo. No.14701/IF.Cell/Ex.A.1/2005 dt.29-10-2005 and the order of the 2nd respondent contained in Lr.No.13/1/2004/0025/FD dt.8-7-2004 rejecting the claim of the petitioner for grant of leasehold/free hold rights over industrial Plot bearing No.21/1 of Azamabad Industrial Area, Hyderabad is arbitrary and illegal and also declare that the cancellation of leasehold rights of the petitioner contained in the order of the 1st respondent in G.O.Ms.No.225, dt.23-3-90 is arbitrary and illegal and consequently direct the respondents to reconsider the claim of the petitioner for grant of freehold/leasehold rights over the said industrial plot by deeming that the petitioner has been in continuing lessee as on the date when the Azamabad Industrial Area (Termination and Regulation of Leases) Act, 1992 and the provisions of the amendments to the said Act by declaring that the allotment of the said industrial plot in favour of the 3rd respondent is arbitrary and irrational and grant such other relief as it deems fit in the circumstances of the case. 8. Counter affidavit of R.1 and R.2 had been filed. Counter affidavit of R.3 also had been filed in this Writ Petition. 9. W.P.No.7619/2006 is filed by the writ petitioner praying for the relief of Writ of Mandamus or any other appropriate Writ declaring that the action of the respondents in selling plot No.21/1 of Azamabad Industrial Area, Hyderabad to the 3rd respondent under registered sale deed bearing Document No.3804/2005 dated 23-11- 2005 ignoring the legitimate claim of the petitioner for grant of fresh lease of the industrial plot, is arbitrary, illegal and malafide and consequentially direct the 3rd respondent to forbear from utilizing/consummating the said plot for any purpose and also direct respondents 1, 2 and 4 to grant leasehold/freehold rights of the said plot in favour of the petitioner contemplated by the provisions of the Azamabad Industrial Area (Termination and Regulation of Leases) Act, 1992 and pass such other suitable orders. 10. Counter affidavits were filed by R.1 and R.2 and also the 3rd respondent and several documents were also filed along with W.P.M.P.No.18764/2007. 11. The application to receive documents – W.P.M.P. No.18764/2007 is hereby allowed. 12. The respondents 1 to 3 in W.P.No.25167/2005 are shown as respondents 1 to 3 in W.P.No.7619/2006 also and apart from these parties, in W.P.No.7619/2006 A.P. Industrial Infrastructure Corporation Ltd., rep.by its Managing Director, is shown as R.4 and the Municipal Corporation of Hyderabad, rep. by its Commissioner, was shown as R.5. Since the respective pleadings of the parties in both the Writ Petitions being virtually the same, it may be appropriate to have adopt the respective pleadings of the parties in the latter Writ Petition W.P.No.7619/2006 in view of the commonality of facts and law involved in both the Writ Petitions. 13. It is averred that the father of the petitioner late S.Bhagatram Gupta was the Managing Partner of M/s.S.B.Ram and Company, which was an industrial concern manufacturing Ready Made Garments and his father was leased out an industrial plot bearing plot No.21/1 admeasuring 1.137 acres in Azamabad Industrial Area, Hyderabad, for a period of 99 years vide registered Lease Deed executed by the Government of Andhra Pradesh on 24-3-1967 enabling establishment of the manufacturing plan for Readymade Garments and the business name of the said manufacturing unit was Ram Dresses. Further it is averred that the father of the petitioner, in pursuance of the said lease deed, had constructed the factory building, installed the plant and machinery for the manufacturing unit of Readymade Garments and the said unit was continuously functional, carrying on the manufacturing activity for over 15 years and thereafter, due to labour unrest, it became a sick unit. Further it is stated that at that stage, the father of the petitioner contemplated about a change in the line of industry from Dress Manufacturing Unit to Pharmaceuticals and in that context, he had entered into a Partnership with certain others under a Partnership Deed dated 14-7-1976 under the name and style of M/s.Phoenix Pharmaceuticals. The petitioner also stated that his father had obtained necessary permission for change over from the manufacturing of Garments line to manufacture of Phamaceuticals, as per the Memorandum dated 29-12-1976 issued by the 1st respondent and in the said letter, it is clearly mentioned that the leasehold rights of the plot will remain with his father and his successors only but the permission has enabled change over the manufacturing line from Garments to Pharmaceuticals. The petitioner further stated that subsequently his father had applied for permission for sub-lease of the said industrial plot and permission was granted by the 1st respondent vide Memo dated 4-12-1973 for sub-lease of a portion of the plot in favour of M/s.Beetee Pharmaceuticals Pvt. Ltd., and thus it is clear that his father had not only taken permission for change over of the manufacturing line but also permission for sub-lease of the industrial plot. Further it is stated that due to some disputes amongst the partners of M/s.Phoenix Pharmaceuticals, which resulted in a civil suit being filed in the Court of the IV Additional Judge, City Civil Court, Hyderabad in O.S.No.398/95 but the said firm was carrying on the manufacturing activity upto 10-7-1998, the date on which, outside partners have left the Partnership Firm and that eversince grant of lease, there was always an industrial activity over the industrial plot and that in other words, industrial plot was never put to disuse by the father of the petitioner or the Partnership firm of which the father of the petitioner was a partner. It is also stated by the petitioner that his father died in the year 1995 and thereafter, he was actively associated with the manufacturing process in the said industrial plot and at that stage, the 1st respondent had issued memo dated 29-7- 1987 proposing termination of lease on the ground of sub-lease and non-user of the industrial plot and that he had filed a detailed explanation to the said show cause notice and the proceedings were dropped by the 2nd respondent as per letter dated 8-4-1988 and he was called upon to furnish the names of the legal representatives of late S.Bhagatram Gupta, which was duly complied with, as per letter dated 28-4-1988. While matters stood thus, the petitioner had received another show cause notice from the 1st respondent dated 12-7-1989 suggesting termination of lease on the very same grounds, which were subject matter of the show cause notice dated 29-7-87 and that therefore, the petitioner had submitted detailed representation to the said show cause notice reiterating that the very circumstance that the proceedings pursuant to the show cause notice dated 29-7-1987 were dropped, there is absolutely no fresh cause of action for suggesting termination of the leasehold rights over the industrial plot and without any consideration to his explanation, the 1st respondent had issued G.O.Ms.No.225, dt.23-3-1990 terminating his leasehold rights in respect of the said industrial plot. It is also stated by the petitioner that challenging the said order in G.O.Ms.No.225 dated 23-3-90, he had filed W.P.No.7025/90 in this Hon'ble Court and an interim order of status quo as regards possession was granted by this Hon'ble Court on 25-5-1990 in the said Writ Petition. Further it is averred that while the above said Writ Petition was pending, the petitioner had submitted a detailed representation dated 21-7-93 to the 1st respondent for restoration of the lease, which was executed in favour of his father, since the lease was heritable. It is also stated by the petitioner that in other words, his representation dated 21-7- 1993 was in substance seeking review of the termination order contained in G.O.Ms.No.225 dated 23-3-1990 since at that time, he was given to understand that the Government itself may reconsider the issue and restore the leasehold rights in his favour and that on the said representation, the 1st respondent had issued memo dated 20-8-93 forwarding his representation to the 2nd respondent and directing the 2nd respondent to obtain a fresh lease application. The petitioner also further averred that at that time, he had received a letter from the 2nd respondent dated 16-11-1993 wherein he was required to withdraw his Writ Petition in W.P.No.7025/1990 so that the Government can take appropriate decision. It is also stated that considering that the cancellation of lease was subject matter of review-reconsideration by the 1st respondent, he had withdrawn the said Writ Petition taking inspiration from the letter of the 2nd respondent dated 16-11-1993 and that heavily relied on the 1st respondent for review-reconsideration of the termination order dated 23-3-1990 relating to the leasehold rights over the industrial plot, since the 2nd respondent had required him to furnish the following details for reconsidering his case for restoration of leasehold rights:- a) Memorandum and Articles of Association of the proposed Private Limited Company. b) Copy of the order dated 30-1-1993 in W.P.No.7025/1990 dismissing the Writ Petition as withdrawn. c) Acceptance of other legal heirs (Smt. Mani Bai and B.Vijay Kumar Gupta). Both the legal heirs are mother and brother of the petitioner, the two legal heirs in the family have filed an affidavit on 8-12-1993 that they have no objection if fresh lease is granted in favour of B.Satish Kumar Gupta – Writ Petitioner. d) Application filed under the Azamabad Industrial Area (Termination and Regulation of Leases) Act, 1992 in Form A (Rule 4(1) on 23-12-1993 for grant of lease. e) Payment of quit rent for the period from 1-1-1990 to 23- 3-1990 amounting to Rs. 71,626/- payable at SBH, Gunfoundry on 22-12-1993. The said G.O.Ms.No.225 issued by the Government dt.23-3-1990 reads as hereunder:- GOVERNMENT OF ANDHRA PRADESH ABSTRACT Industrial Area, Azamabad, Hyderabad – Plot No.21/1, admeasuring 1.137 acres, leased out to Sri S.Bhagat Ram Gupta, S/o.Sri Sedmulji – Breach of covenants and violation of terms and conditions of lease in respect of leasehold premises – Termination of lease – Orders – Issued. INDUSTRIAL & COMMON (IF – CELL) DEPARTMENT G.O.Ms.No.225 DATED:23-3-1990 Read the following:- 1. From Sri S.Bhagat Ram Gupta, Representation, dated 5-11-84. 2. From Sri S.Bhagat Ram Gupta, Representation, dt.8-4-85. 3. From the Commissioner of Industries, Hyderabad, Letter No.4832/IAA/84, dated 22-6-85. 4. From the Commissioner of Industries, Hyderabad, letter No.26/IA/60, dt.29-4-1986, addressed to Sri S.Bhagat Ram Gupta. 5. From the Commissioner of Industries, Hyderabad, letter No.4832/IAA/84, dated 12-2-1987. 6. From the Commissioner of Industries, Hyderabad letter No.4882/IAA/84, dt.11-6-87. 7. Government memo. No.638/IF.CELL/84-19, dated 29-7-87. 8. From the Commissioner of Industries, Hyderabad, letter No.4882/IAA/84, dt.11-12-1987. 9. From Sri Koka Raghava Rao, Advocate, dated 12-7-1988. 10. From the Additional Commissioner of Industries, Hyderabad, letter No.4882/IAA/88, dated 8-8-1988. 11. From the Additional Commissioner of Industries, Hyderabad, letter No.4882/IAA/84, dated 12-9-1988. 12. Government memo. No.638/IF.CELL/84-38, dated 12-7-89. 13. From Sri B.Satish Kumar Gupta and Sri B.Vijay Kumar Gupta, Reply, dated 13-8-1989. 14. From the Additional Director of Industries, Hyderabad letter No.4882/IAA/84, dated 4-7-90. -: o0o :- O R D E R:- The plot of land bearing No.21/1, admeasuring 1.137 acres, situated in the Industrial Area, Azamabad, Hyderabad, was leased out to Sri S.Bagat Ram Gupta, S/o.Sri Sedmulji, for a period of 99 years on a yearly quit rent of Rs.24.37 under the Lease Deed executed on 24-3- 1967, for the purposes of running and erecting thereon a Factory for the manufacture of “Ready Made Dresses”. The said lessee Sri Bhagat Ram Gupta, occupied the plot of land in January, 1960. 2. The said lessee, Sri Bhagat Ram Gupta, is said to have been expired on 3-5-1985, as reported by his two sons Sarvasri B.Satish Kumar Gupta and B.Vijay Kumar Gupta, through their Advocate SriKoka Raghava Rao, under reply-notice dated 12-7-1988. It is also reported in the successors-in-interest and steps into the shoes of the said lessee, Late Sri Bhagat Ram Gupta, in respect of the leasehold rights of the said deceased lessee. 3. As requested by Late Sri Bhagat Ram Gupta during his life-time in his letter dated 12-7-1967, permission for starting Paramount Cattle Feed & Mineral Grinding on partnership basis was accorded by the Government in 1967, but no such unit was set up by him nor did her revive his original dress making industry. The said lessee during his life-time came up with another proposal on 24-2-1976 stating that he could not revive the dress-making industry due to labour trouble and requested for permission to sub-lease it to run a unit on partnership basis in a portion of Plot No.21/1, which was permitted by the Government. The partnership entered into by the said lessee on 14-7- 1976 revealed that it was for a period of two years under which the lessee provided infrastructure facilities to other partners in return of a fixed amount every year towards good-will and profit irrespective of the industry ran in profit or loss. The Government further allowed one year to the said lessee, late Sri Bhagat Ram Gupta, basing on his representation dated 22-10-1983 in the Government Memo No.1080/IF- CELL/82-1, dated 8-11-83 and directed him to take all effective steps for the revival of his dress making industry or start a new industry in the leased premises and to put the entire plot to industrial use. The one- year time allowed was also expired by November, 1984. But the said lessee kept the land under his occupation in the above premises idle without starting his own industry or setting up a new unit. 4. The Commissioner of Industries in the reference second read above, brought to the notice of the Government that the said lessee kept the dress-making unit closed and also kept an area of 2500 sq.yds., unutilized and also that the said lessee neither revived the dress-making unit nor set up any other industry during the one year time allowed. 5. Even though the said lessee, Late Sri Bhagat Ram Gupta, occupied the Plotno.21/1 and executed the lease deed on 24-3-1967, he has of the promoted and established any industry or revived his own dress-making unit, except representing for extension of time for the revival of original unit and for starting a textile processing unit. In the reference fourth read above, the attention of the said lessee was also drawn by the Commissioner of Industries to the Government instructions in Memo No.1080/IF-CELL/82-1, dated 8-11-1983 allowing one year time to take effective steps to revive his dress-making unit or to start a new unit and to put to use the leased premises for industrial purpose. Instead of reviving the unit within the stipulated time, the said lessee came up with another plea that the portion occupied by M/s.Phoenix Pharmaceuticals was required by him to start the industry and contended that the said unit was got to be vacated from the portion of the plot to take up his industrial activity. 6. As reported in the letter tenth read above, during the inspection of the said Plot No.21/1 on 30-7-1988 by the Assistant Director and Supervisor, District Industries Centre, Hyderabad, it was noticed that the Factory shed portion, which was occupied by M/s.Phoenix Pharmaceuticals was found vacant without any plant and machinery and that M/s.Phoenix Pharmaceuticals vacated the said premises to comply a Court decree. It was also noticed by the above officials that there was no machinery and equipment belonging to the said lessee at the premises and there was no industrial activity in the said premises. 7. It was also brought to the notice of the Government by the Additional Commissioner of Industries in the reference 11th read above that during the inspection of the entire area covering Plot No.21/1 by the Assistant Director and Supervisor, District Industries Centre, Hyderabad, on 9-9-1988 and 12-9-1988, it was found that no industry was started by the said lessee/legal heirs in the said premises and also in the portion vacated by M/s.Pheonix Pharmaceuticals which was taken over by the legal heirs of the deceased lessee, Late Sri Bhagat Ram Gupta. It was also found that machinery was not installed and that no industry was run in the leased premises of Plot No.21/1 by the legal heirs of the said deceased lessee and that the said premises was kept idle without any industrial activities. 8. A revised show cause notice was issued in reference 12th read above to the successors-in-interest of the leasehold rights of the said deceased lessee, Late Sri Bhagat Ram Gupta, calling for a reply, as to why the leasehold rights in Plot No.21/1, measuring 1.137 acres in Industrial Area, Azamabad should not be determined for their failure to utilize the leased land for the original line of manufacture, viz., “Ready Made Dresses” and for not reviving the said unit inspite of extensions of time which has resulted in willful breach of covenants and contravention of terms and conditions of the lease agreed upon in respect of the said leasehold premises i.e., Plot No.21/1. 9. In reply to the above show cause notice, Sarvasri B.Satish Kumar Gupta and B.Vijay Kumar Gupta, two sons of the successors-in- interest of the said leasehold rights of the deceased lessee, Late Sri Bhagat Ram Gupta, have replied in the reference 13th read above and admitted that the shed portion was without plant and machinery, as it