HON’BLE SRI JUSTICE A. RAJASHEKER REDDY Writ Petition No.19086 of 2014 Date: 02-12-2014 Between:
Sri Venkateswara Warehousing Private Limited, represented by its Director, Visakhapatnam .. Petitioner AND A.P. Industrial Infrastructure Corporation Limited, Represented by its Zonal Manager, Nellore .. Respondent HON’BLE SRI JUSTICE A. RAJASHEKER REDDY Writ Petition No.19086 of 2014 ORDER:
This writ petition is filed for declaring the action of the respondent in cancelling the allotment of land admeasuring Ac.208.07 guntas in Industrial Park, Ballavolu village, Chillakur Mandal, SPSR Nellore District made in favour of the petitioner by letter dated 22-09-2012 bearing Letter No.ZO/NLR/IP Ballavolu/Sri Venkateswara/09/1021 as illegal and arbitrary and for a consequential direction to set aside the same and deliver vacant encumbered possession of the above land to the petitioner.
2. The case of the petitioner is that the petitioner is a company engaged in the business of providing container loading and ware housing facilities and setting up of thermal power plant and the petitioner company, in desiring of setting up a container loading and warehousing facility and building and operation a 330 MW coal-based thermal power plant (Project) at Ballavolu village, Chillakur Mandal, SPSR Nellore District, approached the respondent Corporation by making an application dated 19-06- 2010 for allotment of plot to utilize the same for setting up the project and the application was considered by the respondent and vide allotment order dated 20-01-2011 through letter No.4792/ APHC/AMW/SVWHPL/Ballavolu/10, the land admeasuring Ac.208.07 guntas in Industrial park at Ballavolu village, Chillakur Mandal, SPSR Nellore District was allotted to the petitioner for original line of activity of container loading warehousing facilities on outright sale basis. The respondent through letter dated 19-01- 2011 had informed the petitioner stating that the additional line of activity of container loading and warehousing facilities will be considered and approved and that by way of provisional allotment letter dated 27-01-2011 and final allotment letter dated 28-01-2011, the subject land was allotted to the petitioner on outright sale basis for establishment of subject plant for a total sale consideration of Rs.2,54,68,400/- and an agreement of sale dated 28-01-2011 for the purchase of the subject land was entered into between the respondent and the petitioner. It is stated that the petitioner also made payment of entire sale consideration to the respondent for purchase of subject land as a condition precedent for being put in possession of the subject land. Pursuant to the terms of the agreement, the petitioner shall be to be put in vacant possession of the subject land so as to commence the construction activity for the project, but, the petitioner was never put in vacant possession of the subject land and ever since from January, 2011 the subject land suffered conditions such as floods and severe agitation by farmers on the subject land in connection with their claims of increased compensation and the petitioner was never put in vacant and peaceful possession of the subject land as on date. It is further stated that during the time from the execution of the agreement, the petitioner has been making endeavours to get necessary clearances from all concerned like Ministry of Environment and Forests, Airport authorities, Indonesian Coal Mines and other departments. It is further stated that basing on the allotment of subject land as well as Agreement of Sale, the petitioner company entered into a Memorandum of Understanding on 12-12-2011 with M/s. Kyori Oremin Limited for supply of coal to the petitioner for the project and the petitioner also entered into Power Purchase Agreement dated 06-03-2012 with Tata Power Trading Company Limited (Tata Power) to sell 300MW of power generated from the Project to Tata Power (Power Purchase Agreement) and the petitioner had spent huge amounts of money in purchasing equipment required for the project, in making applications and procuring permits etc, but due to not being put in vacant and peaceful possession of the land, the petitioner could not procure required permissions to commence construction activity. It is further stated that during the years 2012 and 2013, severe rains, cyclones and floods also affected the subject lands, due to which many attempts were made by the petitioner to enter the subject land in order to take measurements etc., but the farmers destroyed the boundary wall and fencing installed by the respondent and started cultivating in the subject land. It is further stated that the petitioner approached the respondent for their immediate action in putting the petitioner vacant possession of the subject land as per the terms of the agreement of sale, but the respondent did not take any steps till now. Meanwhile, the respondent issued a letter bearing Letter No.ZO/NLR/IP Ballavolu/Sri Venkateswara/09/1021, dated 22-09-2012 cancelling the allotment of the subject land on the ground that the petitioner had not implemented the project. The petitioner through a letter dated 15-10-2012 informed the respondent detailing the efforts of the petitioner in implementing the project, the status of the permissions and clearances for commencing construction, the Power Purchase Agreement and the Coal Supply MOU and also expressed again the difficulties faced by the petitioner due to agitation by the farmers on the subject land and the petitioner requested the respondent to withdraw the cancellation and the petitioner also appeared in person before the respondent and submitted a detailed response to the respondent. The petitioner submitted another letter dated 08-02-2013 stating about the agitation of the farmers on the subject land and submitted copies of news articles published in Daily Newspapers regarding agitation by the farmers. It is further stated that the petitioner requested the respondent to withdraw the cancellation order and initiate action to make the subject land dispute free and put the petitioner in free and unencumbered possession of the subject land. Further, the respondent through a letter dated 25-10-2013 asked the petitioner to submit a detailed project report and to give a presentation before its Sub-Committee about the DPR and justification of utilization of the land allotted for the respondent to take further action, pursuant to which, the petitioner through letters dated 04-12-2013 and 05-12-2013 submitted a detailed presentation/proposal on how the petitioner intends to achieve the implementation of the project in the light of the circumstances prevailing at the subject land and requested for extension of time to implement the project. It is further stated that the respondent asked the petitioner to make the presentation of its proposal before the Sub-Committee on 10-01-2014 and the petitioner submitted a detailed presentation and finally, the respondent issued a letter dated 21-02-2014 calling upon the petitioner to handover physical possession of the land failing which the land will be resumed by the respondent. Pursuant to the said letter, the petitioner addressed a letter on 12-03-2014 requesting the respondent authorities to withdraw the cancellation and resumption notice, but the respondent authorities on 12-03-2014 resumed the subject land and through the letter dated 14-03-2014 the petitioner was asked to execute and register the deed of cancellation of the agreement of sale. Challenging the issuance of the letter dated 22-09-2012 cancelling the allotment of land, the present writ petition is filed.
3. The respondent Corporation filed its counter stating that the agreement of sale is a conditional one and does not create any enforceable right in favour of the allottee and inchoate rights cannot be enforced by way of writ proceedings and that the final allotment/execution of sale deed, which is yet to take place, would be subject to compliance with the terms and conditions contained in the agreement-project implementation being a major pre- requisite and the petitioner failed to adhere to its commitments under the contract. It is stated that the subject land was allotted to the petitioner for setting up of “Container Loading and Warehousing Facilities Unit and Thermal Power Plant” vide allotment letter dated 27-01-2011 by the respondent Corporation with a condition precedent and the peaceful possession of land had been handed over on 29-01-2011 under a Possession Certificate dated 29-01-2011 by the Manager (A.M.), APIIC, Nellore to Sri M. Srinivasa Raju, Director of the petitioner company after making measurements and demarcation of boundaries on the site and the possession certificate was duly signed by M. Srinivasa Raju as proof of possession delivered to the petitioner. It is also stated that an agreement of sale deed dated 28-01-2011 was executed as per the condition of which, within a period of six months the petitioner should commence construction of factory buildings after securing necessary clearances from the competent authorities and should go into commercial production within two years from the date of putting in possession as per clause 9 (c) of the agreement, failing which the allotment shall stand cancelled, but the petitioner company did not commence the construction and did not take any steps for adhering to the said conditions and that the petitioner never raised any objections as regards the ground condition or any alleged interference by third parties till after cancellation of allotment and the land was resumed on 12-03-2014 and possession was taken back by the Corporation. It is further stated that the petitioner company was issued notice vide Zonal office letter dated 07-05- 2012 informing that it did not initiate any steps for implementation of the unit as per clause 9 (c) of the agreement and that the proceedings of cancellation of allotment were issued on 22-09- 2012 inasmuch as the petitioner failed to keep its commitments under the contract and failed to commence the construction of the unit within six months from the date of possession being delivered. It is also stated that the petitioner company reneged on its promise and admittedly took no steps whatsoever for establishment of industry resulting in the impugned action being taken after duly putting the petitioner company on notice and the respondent Corporation is competent to cancel the allotment being owner of the land in question. The respondent Corporation further stated that, no construction activity commenced and the project was not implemented and the very purpose of allotment was effectively defeated by the petitioner company. The petitioner, having taken physical possession of the land, cannot be permitted to raise untenable grounds to circumvent the cancellation of allotment and hence, the respondent Corporation sought for dismissal of the writ petition.
3. The writ petitioner filed rejoinder to the counter affidavit of the respondent almost all reiterating the contents of the writ affidavit and raising a new plea that the show cause in Form-11 is not issued before cancellation of allotment and invoking the provisions of the Contract Act against the cancellation of allotment.
4. Sri D. Prakash Reddy, learned senior counsel for the petitioner strenuously contended that Notice in Form-I is not issued before cancellation of allotment and that the possession was still not delivered to the petitioner as per the agreement dated 28-01-2011 entered into by the petitioner with the respondent Corporation and without handing over the possession of the land, the respondent Corporation cannot cancel the allotment. He also contends that when the possession is not handed over, question of obtaining permissions for construction and making of construction does not arise and that the farmers from whom the lands are required are agitating and the same appeared in the press and the respondent Corporation is aware of the same. He also contends that due to agitation from the farmers, the petitioner could not commence the project by making construction. The action of the respondents in cancelling the allotment is highly arbitrary, illegal and erroneous and in violation of principles of natural justice. He further contends that the petitioner paid the entire amount of Rs.2,54,68,400/- to the respondent Corporation for purchase of subject land, but the petitioner was never put in possession as per the terms of the agreement.
5. On the other hand, Sri P. Roy Reddy, learned standing counsel for the respondent Corporation submits that the writ petition itself is not maintainable as it is a non-statutory contract and the APIIC Allotment Regulations, 1998 are not statutory regulations, as such, the same cannot be enforced by way of writ of mandamus. In support of his contentions, he relied on G.J.
[1]
Fernandez v. the State of Mysore and others as well as this Court in Gram Panchayat, Pondugala v. Engineer-in-Chief, Irrigation and Command Area Development Dept. and [2] others . He further contends that the petitioner had entered into an agreement with its eyes open to the terms of the contract and as per clause 9 (c), the petitioner shall, within six months of being put in possession of the said land, commence the construction of factory, buildings after securing necessary clearances from the competent authorities like buildings, plan approvals, filing application with APTRANSCO, other permissions/clearances etc., but the petitioner failed to fulfil the obligation under clause 9 (c) of the agreement dated 28-01-2011 and having failed to fulfil the obligations the petitioner cannot contend that the possession was not handed over. He further submits that in fact possession was handed over on 29-01-2011 and possession certificate was also issued and that even the allotment letter dated 27-01-2011 issued by the APIIC also contemplates that the construction of factory should commence within six months of being put in possession and the company should go into regular commercial production duly erecting machinery and obtaining regular power supply connection within two years therefrom and that having failed to fulfil the conditions of the allotment letter, the petitioner also failed to fulfil clause 9 (c) of the agreement. He also contends that this court has considered the similar issue in respect of 9 (c) of the agreement entered into by the persons like the petitioner and sustained the cancellation of the allotment. In support of his contentions, he relied on ARS Metals Limited v. A. P. Industrial
[3]
Infrastructure Corporation Limited , ECI Engineering and Construction Co., Limited, represented by its Director K. Venkat Phani v. A.P. Industrial Infrastructure Corporation Limited, represented by its Deputy Zonal Manager (D) and
[4]
others a n d Sri Kiran Auto Service, represented by its Proprietor, Thungala Ramu and others v. A.P. Industrial Infrastructure Corporation Limited, represented by its Zonal
[5]
Manager, Kakinada and others .
6. Admittedly, the petitioner was allotted the land to an extent of Ac.208.07 at Industrial Park, Ballavolu, Chillakur Mandal, SPSR Nellore District vide letter dated 27-01-2011 and the petitioner paid Rs.2,54,68,400/- and the petitioner entered into an agreement with the respondent on 28-01-2011 and having agreed to the terms and conditions of the agreement dated 28-01-2011, the petitioner signed the same. The only dispute raised by the petitioner is that the petitioner company was not being put in possession of the subject land in pursuance of the agreement, as such, the project work was not commenced. The respondent categorically stated that as per the possession certificate dated 29-01-2011 duly signed by the Director of the petitioner company, the possession was handed over to the petitioner and the same is disputed by the respondent and the allotment of land was cancelled vide proceedings in Lr.No.ZO/APIIC/NLR/IP-Ballavolu/Sri Venkateswara/09/1021, dated 22-09-2012 on the ground of violation of clause 9 (c) of the agreement, which reads thus:
"The party of the Second Party shall within six months of being put in possession of the said land and commence construction of factory buildings after securing necessary clearances from the competent authorities, like building plan approvals, filing application with APTRANSCO, other permissions/clearances etc., the party of the second part shall go into commercial production duly erecting machinery and obtaining regular power supply connection within two years of being put in possession of the allotted land Any extension of time, if considered, will be subject to levying of penalty at 10% on the land cost at the prevailing rates. No extension for more than 2 years can be entertained."
7. The fact that the petitioner failed to fulfil clause 9 (c) of the agreement is not in dispute, but the petitioner claimed that since the possession was not handed over, it could not comply with the terms of the agreement, contrary to which, the respondent corporation categorically stated that the possession was delivered vide possession certificate dated 29-01-2011 and denied the factum of not handing over the possession of the land. From the record, it does not appear that the petitioner has responded to the letter issued by the respondent Corporation dated 07-05-2012, wherein it is stated that as per the clause 9 (c) of the agreement for sale of land, the project should be implemented within two years from the date of taking possession of the land duly obtaining necessary approvals, but it was observed that the petitioner company has not so far taken steps for implementation of the unit and the last date of implementation of unit is fast approaching and that the petitioner company is requested to take steps for implementation of the project within the stipulated time. Only after the impugned proceedings dated 22-09-2012 were issued, the petitioner company started correspondence with the respondent Corporation and the fact of issuance of show cause notice as per Form-II is not pleaded in the writ affidavit and only raised at the time of arguments and also in the reply affidavit. When the said fact is lacking in the pleadings, the same cannot be agitated by the petitioner. As held by the Apex Court in G.J. Fernandez v. The State of Mysore and others (1 supra) as well as this Court in Gram Panchayat, Pondugala v. Engineer-in-Chief, Irrigation and Command Area Development Dept. and others (2 supra), no writ of mandamus can be issued for enforcing regulations which are non-statutory in nature. Now, the petitioner was issued notice dated 07-05-2012 indicating its obligation under clause 9 (c) of the agreement dated 28-01-2011, but the petitioner kept quiet for the same. The petitioner relied on news paper reports and I am afraid that the same can be basis for issuance of a writ of mandamus as the respondent Corporation is disputed the averments in the writ affidavit regarding not handing over the possession of the subject land and the respondent produced possession certificate dated 29-01-2011 duly signed by the Director of the petitioner company as well as the Manager of the respondent Corporation. The contention of the respondent that the writ petition is not maintainable cannot also be accepted in view of the judgment rendered in ABL International Ltd., v. Export Credit Guarantee Corporation of India Ltd., [(2004) 3 Supreme Court cases 553]. But, the fact remains that when the agreement itself provided such conditions, the same shall be fulfilled by the parties. The entire contentions of the petitioner is based on the ground of the petitioner company was not being put in possession of the subject land by the respondent corporation, but the same is disputed by the respondent corporation relying on a possession certificate dated 29-01-2011.
8. This is purely a disputed question of fact, which cannot be gone into a writ petition by exercising the power of judicial review under Article 226 of the Constitution of India.
9. Further, this Court, in similar circumstances in ECI Engineering and Construction Co., Limited, represented by its Director K. Venkat Phani v. A.P. Industrial Infrastructure Corporation Limited, represented by its Deputy Zonal Manager (D) and others (2 supra) a n d Sri Kiran Auto Service, represented by its Proprietor, Thungala Ramu and others v.
A.P. Industrial Infrastructure Corporation Limited, represented by its Zonal Manager, Kakinada and others (3 supra) upheld the cancellation of allotment by the respondent while invoking similar clause 9 (c) in the agreement. The facts and circumstances in the present case are almost similar in nature as that in the above judgments.
10. Therefore, in view of the above facts and circumstances, I do not see any merit in the writ petition and the same is liable to be dismissed.
11. Accordingly, the writ petition is dismissed. However, it is left open to the petitioner to make a representation for refund of the payment made by it and the respondents shall consider the same in accordance with law and the contractual clauses with regard to refund of the sale consideration within a period of four weeks from the date of receipt of a copy of the order. There shall be no order as to costs.
As a sequel thereto, miscellaneous petitions, if any, pending shall stand closed.
A. RAJASHEKER REDDY, J Date: 02-12-2014 Ksn
[1] AIR 1967 Supreme Court 1753
[2] 2002 (5) Andhra Law Times 575
[3] LAWS (APH) 2013-11-1986
[4] 2013 (1) Andhra Law Times 634
[5] 2013 (6) Andhra Law Times 56