Case: Tata Steel Ltd Vs. State of Jharkhand &amp; Others

3. The writ petition was filed aggrieved by an order dated 17.11.2008 of the Managing Director (Respondent No. 3 herein) of the Adityapur Industrial Area Development Authority, (Respondent No. 2 hereinafter referred to as the "AUTHORITY"), a body corporate created Under Section 3 of the Bihar Industrial Areas Development Authority Act, 1974 (hereinafter referred to as "the ACT").4. The first Respondent (the State of Jharkhand) is carved out of the State of Bihar on 15th November 2000 by a parliamentary enactment called the Bihar Reorganization Act, 2000. The first Respondent is theof the State of Bihar insofar as the property in dispute is concerned.5. The Appellant herein is a company running various industries. At the request of the Appellant, the State of Bihar transferred an interest in land admeasuring 350 acres at Adityapur for a period of 99 years. It appears from the impugned judgment that the said land was divided into "a few hundreds of plots of different dimensions in various small areas". The transfer is covered by a document dated 18.03.1969, purported to have been executed on behalf of the Governor of Bihar in favour of the Appellant company. Parties have been described as LESSOR and LESSEE in the said document. The crux of the transaction is described in the document asthe lessee has applied for the lands described and specified in Part 1 of the Schedule appended hereto together with all rights, covenants and appurtenances thereto belonging except and reserving unto the lessor all mines, minerals in and under the said land or any sort thereof for establishing (i) Alloy Tool and Special Steel Plant (ii) the Roll Foundry Project.NOW THIS INDENTURE WITNESSETH:In consideration of the payment to the lessor by the lessee of the premium or salami of Rs. 24,48,670/(Rupees Twenty four lacs forty eight thousand six hundred seventy only) calculated at Rs. 7000/(Rupees Seven thousand only) per acre (including proportionate development case of the area on or before the execution of these presents and of the rent hereby reserved and of the covenants and agreements on the part of the lessee and fully mentioned in Part II of the Schedule, the lessor doth hereby demise unto the lessee all the piece of land mentioned and described in Part I of thetransfer is subject to various terms and conditions specified inof the said document. Under condition No. 1, the "lease" is given for 99 years subject to renewal at the option of either party for such period as may be mutually agreed upon. Condition No. 2 stipulates annual payment of Rs. 17,490.50 at the rate of Rs. 50/per acre in one installment payable on or before 31st March every year. Rent is liable to be revised every twenty years.That the lease of land detailed in Part I of the Schedule is given for ninety nine (99) years to the lessee by the lessor subject to renewal at the option of either Party for such period as may be mutually agreed upon.2. That the lessee shall pay annually to the State Government or their nominee as rent, the sum of Rs. 17,490.50 (Rupees Seventeen Thousand Four Hundred Ninety and Fifty Paisa only) at the rate of Rs. 50/per acre in one installment on or before 31st March, every year. The said rent is liable to be revised every twenty years in accordance with provisions of law or any Rules framed by Government of Bihar as may be in force for the time being and in the absence of any such law rules then as may be fixed by the lessor.Condition No. 4 contains various "covenants" between the parties. Clause (xiv) stipulates that the land shall be used by the Appellant for the specified purpose within a period of one year from the date of the lease failing which the lease may be terminated and the Appellant evicted from the land withoutThat the lessee shall use the land for the specified purpose within a period of one year from the date of the lease, failing which the lease may be terminated and the lessee evicted from the lands without notice. In case extension is required it can be granted within the discretion of thetransaction, in our opinion, is a grant (hereinafter referred to asfor the sake of convenience) covered by the Government Grants Act 1895. We shall deal with the said Act and the reasons for our conclusion that the so called lease dated 18th March, 1969 is a grant in some detail later in this judgment.7. Admittedly, the Appellant herein utilized an extent of about 200 acres of the abovementioned 350 acres of land for setting up (i) Alloy Tool and Special Steel Plant (ii) the Roll Foundry Project, the specified purpose for which thewas made to the Appellant.8. In the year 1974, the State of Bihar made the ACT. The object of the ACT is to "provide for planned development of Industrial Areas and promotion of Industries and matters appurtenant thereto". (The ACT was preceded by an Ordinance of 1972) The ACT was adopted by the State of Jharkhand.9. By a document dated 18.7.1973, the Governor of Bihar made another grant (hereinafter referred to asfor the sake of convenience) of an extent of 1266 acres of land, described in the Schedule attached to the said document, to the AUTHORITY "to own, possess and hold the same for the purposes of the development of industries of thattherefore, the Governor of the State of Bihar, the GRANTOR, does hereby make this grant of an area of land together with structures and appurtenance thereto measuring more or less 1266 acres, fully described in the schedule below UNTO the GRANTEE to own, possess and hold the same for the purposes of the development of industries of that area with powers to use the said lands for the purposes of development of industry in planned manner and in that connection to lease out pieces of lands structures and appurtenance thereto to entrepreneurs for a period of not exceeding 99 years on such terms and conditions as the Authority may deem fit;And further whereas this grant is made subject to the condition that in the event of the GRANTEE ceasing to function or in the event of the lands hereby granted being of no use for the purposes for which the grant is made, the lands granted will automatically revert to the GRANTOR and the GRANTEE will be divested of all the rights, title and interest would get vested in the GRANTOR but subject to the rights created in the entrepreneurs and further subject to the condition that the GRANTEE would abide by the instructions of the Government from time to time.By a letter dated 01.09.2000 of Respondent No. 3, the Appellant herein was called upon to surrender an extent of 150 acres of land on the ground that out of 350 acres of land leased to the Appellant, about 150 acres of land was still lying vacant for more than 25 years and there was demand for land from other entrepreneurs for setting up industries. After some correspondence in this regard, Respondent No. 3 issued notice dated 15.01.2002 asking the Appellant herein to show cause why action Under Sectionof the ACT and Clause 4 (xiv) of the lease deedbe not taken for resuming 150 acres of land which remained unutilized. Thereafter, there was lot of correspondence between the parties, the details of which are not necessary.11. On 17.11.2008, Respondent No. 3 passed an order purporting to cancel the allotment of 100 acres out of 150 acres of land lying vacant in the possession of Appellant and terminating theinterestingly without any qualification with regard to the extent. The relevant part of the order reads asTata Steel has failed to utilize the allotted land even after the lapse of almost 40 years and is only trying to keep the land in its custody thus denying the opportunity of land allotment to other entrepreneurs. Mentionable, that all the small and medium sector units located in AIADA area are governed by the same rules for setting up the industries and utilization of the land. Hence there appears to be no reason for any special consideration to be given to the Tata Steel for violating the conditions of lease. However, taking considerate and liberal view of the whole issue and also theperformance of TISCO LTD and finally the Jharkhand Industrial Development Authority Act and provisions of allotment and lease deed and by the powers confirmed upon me Under Section 6 sub Clause 2(a) 2(b) of Jharkhand Industrial Area Development Authority allotment of 100 acres of land out of 150 acres lying unutilized and vacant is cancelled, lease terminated and cost forfeited.Further the unit is directed to utilize the remaining portion of vacant land within six months failing which necessary action would be taken to cancel the land. A copy of this order may be sent to the company.Aggrieved by the order dated 17.11.2008, the Appellant herein filed Writ Petition No. 6042 of 2008 in the High Court of Jharkhand. By the impugned judgment, the writ petition was dismissed,A bare perusal ofwill clearly indicate that it deals with two subjects one is based on the requirement of the State Government/or its successor which may require for resuming the lease or part of the lease "for public purpose". Here in this case the proceeding was not initiated under this provisions as it is not the case of the Government/lessor that the Government requires the land in question for any "public purpose". The lessor has started proceeding for eviction of the lessee under proviso to(iv) of Condition 4 because ofof the part of the lease land therefore, in view of the proviso to Clause (iv) of the lease condition No. 4 of Part II of the lease, the lessor had right to proceed for determining the lease of the part of the property which has not been utilized for the purpose for which it was acquired by the lessee on

Reasoning:
It must be noted here that Sections 6(1) and (2) authorise the Authority only to deal with industrial area but not development area.3 authorises the State Government to entrust the Authority with any other work connected with the responsibilities mentioned in Section 6(1) and (2) with respect to the industrial areas.he Authority shall have the powers of the Commissioner of a Municipality as specified in Sections 196, 197, 198, 199, 200, 201 and 202 of Bihar and Orissa Municipal Act, 1922, for purposes of removal of encroachment on roads, houses, gullies, any land in the development area and properties of theon the other hand expressly confers on the Authority certain powers enumerated in the various sections of the Bihar and Orissa Municipal Act, 1922 with regard to the development area. Remainingdeal with other matters, the details of which are not necessary for the present purpose, except noticing that the duties and powers of the Authorities are not common with respect to "industrial area" and "development area" under the Act.25. It is in the background of the abovementioned Scheme of the Act, the various issues involved in this appeal are required to be examined. The second Respondent AUTHORITY was constituted by notification dated 29.06.1972 under the Ordinance which preceded the ACT. Bydated 18.7.1973, the Government of Bihar transferred an area of 1266 acres of land alongwith structures, appurtenance etc. in favour of the AUTHORITY "to own, possess and hold the same for the purposes of the development of industries of that area". The Appellant disputes that the land transferred to them underis not part of the1266 acres of land. The second Respondent AUTHORITY asserts to the contra. However, the High Court (("Para 20. Learned Counsel for the AIADA vehemently submitted that the question of identity of the property which has been handed over to the AIADA or the plea that the lease land of the Petitioner is not included in the notification was never raised by the Petitioner before any authority even after several notices to the Petitioner and, therefore, this question of fact cannot be raised in the writ jurisdiction that too, without laying down the factual foundation for which particularly the Petitioner did not even annex the map which was part of the lease deed by which the lease was granted to the writ Petitioner, reference of which map is already there in the lease deed.")) declined to go into that question on the ground that it is a question of fact which was never raised by the Appellant herein any time earlier. We see no reason to take a different view.26. We, therefore, proceed on the basis that the land in dispute is part of the 1266 acres of the land covered by thedated 18.7.1973. But the question still remains whether the land in question is a part of either the "industrial area" or the "development area" or beyond both the areas. We do not find any material on the record to reach any definite conclusion on the above question. It goes without saying that the responsibility to establish that fact is on the Respondents by producing the appropriate notification. Unfortunately, none is produced. Therefore, we proceed on the presumption that the land in dispute is not part of any notified industrial or development area.The first submission made on behalf of the Appellant is that a transfer of land such as the once evidenced bycould not have been legally made insofar as the property in dispute is concerned without the State of Bihar first resuming the lands which are in the possession of the Appellant pursuant toIn our opinion, the said submission is required to be rejected for the reason that though the State of Bihar did not have possession of the land in dispute when it made thein favour of the AUTHORITY, the second grantee (i.e. the AUTHORITY) takes the property covered by thesubject to the rights of the earlier grantee. There is no need in law for the termination of the interest created underin favour of the Appellant, before the State of Bihar chose to transfer the property covered by theBecause the interest created underwas a limited interest and the title of the property still vested with the State of Bihar.30.The next submission that is required to be examinedthe second Respondent AUTHORITY can exercise the power vested in it by the ACTthe lands in dispute as the said land is held by it only by virtue ofWe have already recorded that there is nothing on record to establish that the land in question is part of either "industrial area" or "development area".31. This question assumes importance because thenotice dated 15.01.2002 issued by the AUTHORITY invokes the powers both Under Sectionof the ACT and Clause 4 (xiv) ofand the final order dated 17.11.2008 relied upon Clause 4(xiv) ofand Section 6(2)(a) and 2(b) of the ACT.The substance of the four clauses is that Appellant would be obliged to transfer the property by virtue of Condition No. 4(iv) when a part of the property covered byis needed for a public purpose. Such stipulation perhaps implies an obligation on the part of the Appellant to give possession of the property without the need for the State to resort to a civil court for recovering the possession. We do not wish to give any final opinion in this regard as this issue does not arise in this case and not argued before us. In the contingency contemplated under Condition No. 4 (v), since it would be a transfer at the instance of the Appellant, obviously the question of the mode of recovery of possession does not arise as it would be a voluntary act of the Appellant. On the other hand, in the contingencies contemplated under condition Nos. 4 (xiv) and 4 (xvii), the language of the grant expressly authorizes the AUTHORITY "to evict the lessee from the lands" or "resume and enter upon the whole of the land". Whether such right "to evict" or "resume", of the AUTHORITY includes the right to recover possession without the need to resort to a civil suit is also a question we need not decide in this case as that issue does not arise.40. We have discussed the Scheme ofWe have already set out the four clauses underin paragraph 34 supra which deal with the termination of the grant made in favour of the Appellant. The only clause, invoked in the show cause notice dated 15.1.2002 of the AUTHORITY is Clause (xiv).42. Even the Respondents do no claim that the impugned action could be justified under the other three clauses. Clause (xiv) purports to enable the AUTHORITY to terminate theand evict the Appellant in only one contingency. At the cost of repetition, we extract Clause (xiv)Clause (xiv) stipulates that in the event of the Appellant failing to "use the land for the specified purpose within a period of one year from the date of the lease"the same may be terminated and the Appellant be evicted from the lands without notice. It is an undisputed fact that the Appellant was given the land in dispute for the purpose of establishing "alloy tool and special steel plants and the roll foundry" project. That is the purpose specified under the GRANT. Admittedly, the Appellant utilized 200 acres of land out of 350 acres of land for the establishment of the said project.In our view, the answer must be in the negative for the followingTo understand the meaning and scope of Clause (xiv), the following factors are required to be examined; (i) purpose for which the GRANT was made, (ii) the terms and conditions upon which the GRANT was made, (iii) the various contingencies under which the GRANT could be terminated in full or in part etc. (iv) the scheme of the GRANT.(ii) The land in dispute was transferred to the Appellant for a specific purpose underThe Appellant did in fact establish the industry for the establishment of which thewas made and has been successfully running the industry for the last about 40 years (approximately). For the said purpose, the Appellant utilised a substantial portion of the land covered by the GRANT and therefore, it cannot be said that the Appellant did not utilise the land for the purpose specified under theSuch a GRANT was made for a consideration (Salami of Rs.apart from an annual rent for the land which the Appellant has admittedly been paying.(iii) Analysis of the scheme of Clauses (iv), (v), (xiv) and (xvii), reveals that only Clauses (iv) and (v) speak about "any part" or "parts" of the land which the Appellant is liable to transfer on demand by the AUTHORITY under Clause (iv) or voluntarily under Clause (v). Clause (xvii) stipulates the right of the second Respondent "to resume and enter upon the whole of the said land" in the event of breach by the Appellant of any of the terms and conditions ofwhereas Clause (xiv) significantly does not employ the expression "part" or "parts of the land".(iv) Clause (xiv) does not contemplate taking possession of parts of the land into Clauses (iv) and (v). It only contemplates the termination of thein the event of the failure on the part of the Appellant to use the land for the specified purpose and eviction of the Appellant from the land. In our opinion, the language of the clause is significant. It can only be invoked in the case of total failure to utilise the land for the specified purpose. Clause (xiv) read with the right of the Appellant under Clause (v) to sell a part of the land covered by thewhich is no longer required by him, can lead to only one conclusion that it was never intended by thethat every inch of the land must be utilised for the purpose of the establishment of the industry. Any other construction of Clause (xiv) would simply render the Clause (v) meaningless and destructive of the right created thereunder in favour of the Appellant. We are, therefore, of the opinion that the second Respondent is not entitled to invoke Clause (xiv) in support of its impugned decision.In view of the above conclusion, the other submission of the Appellant need not be examined.