State of Gujrat vs Tensille Steel Limited
R/LPA/255 of 2020
Facts:
1. Land bearing Survey No. 428/1 admeasuring 98901 sq.mtrs. was granted on lease to the original petitioner/respondent herein vide order dated 14.11.1960 passed by the Collector, Vadodara. The possession was handed over to the respondent/original petitioner on 23.3.1961 and on 30.11.1961, an agreement came to be executed between the parties on certain terms and conditions enumerated therein.
2. As per the terms and conditions of the agreement, the company was bound to use the land-in-question only for the purposes of the nature specified in the specific conditions of Schedule-II. One of the conditions for grant was that the land is an unalienable tenure, which was, however, subsequently modified by office order dated 08.02.1962 issued by the Commissioner, Vadodara Division, Vadodara that the word ‘unalienable’ be substituted and replaced as ‘alienable’. The result is that the respondent/original petitioner allottee got alienable right in the land-inquestion subject to the conditions in Clauses ‘f’, ‘g’ and ‘h’, noted hereinabove.
3. An application filed by the respondent/original petitioner on 2.5.2014 for revised nonagricultural use permission was rejected. Special Civil Application No. 2359 of 2013 was filed by the respondent/original petitioner, wherein the matter was remitted back for fresh consideration. Again rejection order dated 11.11.2014 was passed by the Collector, Vadodara. The respondent/original petitioner again filed a fresh representation on 06.12.2016, which remained pending for long. Hence Writ Petition No. 12585 of 2019 came to be filed, wherein on the assurance given by the respondent that the Collector, Vadodara shall do the needful as per the communication dated 27.9.2018 issued by the Revenue Department, Gandhinagar, the Writ Petition was disposed of.
4. Appeal is directed against the judgment and order dated 4.12.2019 passed by the learned single Jude in allowing the writ petition seeking for quashing of the order dated 18.09.2019 passed by the Collector, Vadodara and further directing the respondent to grant nonagricultural use permission for the land-in-question, bearing Survey No. 428/1, included in the Town Planning Scheme No. 19, Final Plot No. 150 of Vadodara Kasba, Vadodara.
Issue: Whether the order dated 04.12.2019 is correct in law ?
Arguments:
Respondent:
1. Counsel submitted that the proceedings under the Sick Industrial Companies (Special Provisions) Act, 1995 came to be initiated against the original petitioner, as it was facing financial difficulties. In those proceedings, on 12.12.1996, the Board for Industrial and Financial Reconstruction (BIFR) sanctioned the scheme for rehabilitation for the petitioner company. In the said scheme, vide clause No. 8(F)(vii), it was specifically directed by the BIFR that the State Government shall grant necessary permission for sale/disposal of the lands and it shall not charge any amount except those payable for change of users and usual Municipal Tax and charges for development and ultimate disposal of the property.
2. Counsel submitted that the entire success of the rehabilitation scheme, as sanctioned by the BIFR, was dependent on the grant of
permission to the petitioner company for sale and develop the land-in question, as noted in the order of the BIFR. It was further submitted that Once the scheme is sanctioned, it has the force of law making its enforcement amenable as a matter of law, even in for as other than the BIFR. The submission thus, is that the State Government has no option but to comply with the concession given by it before the BIFR
Appellant:
1. Counsel submitted that the land-in-question was given on lease with the specific condition that in case of sale, the Government will be entitled to half of the unearned income, whether outright or as a result of un-redeemed mortgage. This condition of grant of lease has not been relaxed, altered or varied with the concession given by the State Government as recorded in Clause (F)(vii) of para 8 of the BIFR.
2. It was submitted that the letter dated 16th December, 1992, which is the basis of recording concession of the State Government in the BIFR scheme under para 8(F)(vii) in no way modify the terms and conditions of the policy. Even otherwise, the BIFR scheme has failed and an order dated 19.2.1998 was passed by the BIFR directing the operating agency to issue advertisement inviting offers for revival of the company by change of management.
3. Counsel submitted that the respondent company is no longer a sick company as per the provisions of Section 3 (1)(a) of the Sick Industrial Companies Act, 1985. It was contented that the order dated 8.5.1998 was passed at the relevant point of time keeping in mind the sickness of the respondent company which is obliterated as on date and, as such, there is no question of implementation of either the judgment and order dated 8.5.1998, the order dated 23.4.1998 passed by the AAIFR and the BIFR Scheme dated 12.12.1996 passed by this Court.
4. It was submitted that respondent company is trying to take undue advantage of the situation for enriching its pocket by unjust means misinterpreting the contents of the letter dated 16.12.1992, the basis and conditions recorded in para 8(F)(vii) of the BIFR Scheme. The land-in question is a valuable land and in case the original petitioner/respondent company is permitted to use the land-in-question without adhering to the conditions of grant of share of 50% of unearned income with the State Government, it would be against the public interest.
Decision: Hon’ble HC allowed the application.
Rationale:
1. Hon’ble HC noted that careful reading of the order passed by the appellate authority dated 23.4.1998, the letter dated 16.12.1992 of the State Government and the Clause 8(F)(vii) of the sanctioned scheme, it is evident that the only concession by the State Government before the BIFR was to release the land of the unit under the Urban Land Ceiling Act as per its policy. The concession given by the State Government cannot be interpreted to mean that it has given away its right to release 50% of the un-earned income as per the letter of grant.
2. It held that it is difficult to accept the contention of the learned senior counsel appearing for the respondent company that the rehabilitation scheme framed by the BIFR by an order dated 12.12.1996, is in operation. It held that the condition to share half of the unearned income in the event of sale or transfer of the lease land with the Government still binds the parties. At the cost of repetition, it is reiterated that the said condition has not been altered, varied or modified by the concession given by the State Government recorded in para 8(F) (vii) of the rehabilitation scheme framed by the BIFR by order dated 12.12.1996. All the subsequent orders of the AAIFR dated 23.4.1998 and of this Court dated 8.5.1998 in Special Civil Application No. 3105 of 1998, have to be read and understood in the same manner.
3. It held that respondent company cannot be permitted to take any advantage of the concession given by the State Government during the course of preparation of the rehabilitation package by the BIFR, which was to the extent only that the State Government shall release the land of the unit under the Urban Land Ceiling Act as per its policy, so as to enable the unit to utilise the land by sale or development in any manner, which is more beneficial to this unit.
Order:
