Case: Netai Bag  Vs. State Of W.B.

supply of sal trees at concessional rate has been taken by the Government. The rate of royalty has also been fixed on some accepted principle of pricing formula as will be indicated hereafter. Hence, distribution or allotment of sal seeds at the determined royalty to the respondents and other units covered by the agreements cannot be assailed. It is to be appreciated that in case, distribution by public auction or by open tender may not achieve the purpose of the policy of protection measure by way of supply of sal seeds at concessional rate of royalty to the industrial units covered by the agreements on being selected on valid and objective considerations." 22. It was further held that principle of reasonableness and non-arbitrariness in governmental action is the core of our entire Constitutional scheme and structure. On the facts of that case, the action of the State Government in granting a contract by way of negotiation was held not arbitrary or irrational. 23. In the backdrop of the legal position noticed herein, it has to be seen, in the instant case, as to whether the action of the respondent No. 1 was illegal, arbitrary or mala fide. To justify their action of entering into an agreement of lease by negotiation, even in the absence of pleadings on behalf of the appellants, the State has submitted that the entire transaction of granting the lease to the respondent No. 5 for an integrated food processing unit with an abattoir in a semi-rural area, which was a low lying land, despite their best efforts, the State Government were unable to set up any project. The lease was given to respondent No. 5 upon consideration of all the facts and circumstances with the object of setting up an industry in the State of West Bengal which was likely to generate employment to more than 300 persons and earn foreign exchange worth more than Rs. 50 crores. The negotiations were resorted to ensure the disposal of the slaughter house at Durgapur which was proved to have been running in losses. The respondent-State had failed to get any buyer for Durgapur Project despite Newspaper advertisements. 24. The Government had decided to make a package deal for the purposes of transferring the Durgapur Project and establishment of Mourigram Project. Earlier a memorandum of understanding had been arrived at between Government of India and Australia which ultimately did not mature in the shape of an abattoir. Due to financial constraints, continuous loss suffered at Durgapur and lack of technical expertise, the respondent-State could not venture to undertake the Mourigram Project for setting up of an abattoir. Having failed in all its efforts, the then Minister-in-charge of the Animal Husbandry and Veterinary Services Department of the Government of West Bengal is stated to have written to some Bombay based firms, reputed in the field, to salvage the two projects. Positive response is stated to have been received from some firms including Genagro Foods (India) Ltd. namely, respondent No. 5 and M/s. I. Ahmed and Company. The proposal of I. Ahmed and Company being very vague was not accepted. Respondent No. 5 had shown interest in taking over both Durgaplur and Mourigram sites under certain terms and conditions for the purpose of revitalising and making operational the existing abattoir at Durgapur and for setting up of Integrated Food Processing Unit along with abattoir at Mourigram. It is further stated in the counter-affidavit of the respondent-State, that :- "Since, no response was received from the advertisements and the personal requests made in the manner above by the Minister-in-charge of the Department from any concern except as aforesaid, the State took into account the credentials of the group of companies of which Genagro Foods (India) Ltd. was one, including the export award certificate awarded to M/s. Allanasons Limited for outstanding contribution for promotion of agricultural and processed food products during the year 1992-93 as proof of their excellence in their field and thereupon proceeded to finalise the lease terms and conditions under which inter alia the Mourigram land would be leased out to the respondent No. 5 for setting up of an integrated food processing unit along with an abattoir, products whereof could be exported as well as sold in the State of West Bengal. Respondent No. 5 alongwith its associated companies was the first company in India to export 1000 million rupees on agricultural and process food products (in 1992-93). The Agricultur and Processed Foods Export Development Authority (APEDA), Ministry of Commerce, Govt. of India, had acknowledged and certified the efforts of respondent No. 5 and its associated companies in the export of Meat and other agro products such as rice, tea, coffee, spices, onion, cashew, pulses extractions, marine products and processed food and vegetable." 25. In view of the peculiar facts and circumstances of the case we are not persuaded to hold that the action of the respondent-State in executing the lease deed with respondent No. 5 was unreasonable, illegal, arbitrary or actuated by extraneous considerations. In this regard it is worth noticing that none except the erstwhile owners and the propounders of vegetarianism have made any grievance to the effect that the market value of the property, as charged from respondent No. 5, was either allegedly for a song or at a throw away price.26. The inaction of the appellants in approaching the Court, almost after three years of the impugned lease deed is an additional circumstance to doubt their bona fides in challenging the impugned action. During the pendency of the litigation between the parties, a huge project has actually, by now, come into existence where the production has also commenced. Respondent No. 5 is claimed to have spent a sum of Rs. 73.01 crores as of 30.10.1999 on the project. Interference at this stage will not only adversely affected the business of respondent No. 5 but would also render a large number of people unemployed and deprive the State its cherished desire of developing the industrial growth.

Decision (1 = appeal accepted, 0 = rejected): 1

Explanation:
1[ds]25. In view of the peculiar facts and circumstances of the case we are not persuaded to hold that the action of the respondent-State in executing the lease deed with respondent No. 5 was unreasonable, illegal, arbitrary or actuated by extraneous considerations. In this regard it is worth noticing that none except the erstwhile owners and the propounders of vegetarianism have made any grievance to the effect that the market value of the property, as charged from respondent No. 5, was either allegedly for a song or at a throw away price.26. The inaction of the appellants in approaching the Court, almost after three years of the impugned lease deed is an additional circumstance to doubt their bona fides in challenging the impugned action. During the pendency of the litigation between the parties, a huge project has actually, by now, come into existence where the production has also commenced. Respondent No. 5 is claimed to have spent a sum of Rs. 73.01 crores as of 30.10.1999 on the project. Interference at this stage will not only adversely affected the business of respondent No. 5 but would also render a large number of people unemployed and deprive the State its cherished desire of developing the industrial growth.