Hon'ble Ritu Raj Awasthi, J.
Heard learned counsel for the petitioner Sri Ratnesh Chandra and Sri O.P. Srivastava for the respondents.
This petition challenges the action of the respondents, U.P. State Industrial Development Corporation Ltd. (hereinafter referred to as 'UPSIDCL') in rejecting the application of the petitioner for allotment of an industrial plot, which order was communicated to the petitioner on 15.7.08, on the ground that the allotment proceedings, since could not be completed, therefore, the application of the petitioner is being rejected and the money deposited by it, is being refunded.
The relevant facts for the present controversy are, that the UPSIDCL issued an advertisement published in the local daily Danik Jagran on 20.9.07 inviting applications for allotment of industrial plot from the willing enterprenures by depositing the prescribed fee etc. The aforesaid advertisement required that the applicant alongwith the application form must deposit 25% of the amount payable for such allotment of the industrial plot as registration fee and Rs. 1,000/- as processing fee. The applicant was required to give the project details, if the applicant owns/has any other industrial unit presently, the financial arrangements made, the expenses in running the industry, and the technical expertise etc. The petitioner applied for Industrial Plot no. A-2/1, area 20127 square meter, located at Chinhat. The rate on which the said land could be allotted was shown at Rs. 1500/- per square meter.
The petitioner had applied for the aforesaid allotment by giving the necessary details about its eligibility and also for preference in getting the industrial plot by depositing the entire money @ Rs. 1500/- square meter alongwith other processing charges etc., i.e. total sum of Rs. 75,47,625/- towards 25% of the value of the plot, plus processing fees @ Rs. 1000/- per acre i.e. Rs. 6000/- by a bank draft, drawn in favour of UPSIDCL payable at Lucknow. The application was submitted on 3.10.07.
It is not in dispute and that it is also evident from the averments made in the counter affidavit filed by UPSIDCL on 20.10.08 sworn by Sri J.S. Yadav, Assistant Engineer (Incharge), that on the request of the petitioner, a tentative decision for allotment of the plot in favour of the petitioner was taken, which could not be finalized, hence the entire proceedings became redundant. This averment clearly shows that the reason given in the impugned order, namely, that the allotment proceedings could not be completed, therefore, the application of the petitioner is being rejected, cannot be said to be the absolute truth. It appears that on realizing that the aforesaid ground that the allotment proceedings could not be completed, would not be sufficient to meet the requirement of law, when the counter affidavit was filed, it was sought to be explained by adding one more cause, namely, a tentative decision was taken in favour of the petitioner, but later on, since the proceedings could not be finalized, therefore, the said decision had become redundant.
We failed to appreciate the meaning of the aforesaid explanation/reason given by the UPSIDCL in the counter affidavit as well as in the impugned order, and the learned counsel for UPSIDCL also could not explain the meaning thereof and, therefore, he has drawn the attention of the Court to the supplementary counter affidavit filed thereafter, wherein it has been said that the petitioner was not eligible at all to have the land and, therefore, its bid has been cancelled or in other words, has not been accepted. In this regard, Sri O.P. Srivastava has placed reliance upon Para-8 of the supplementary counter affidavit, which says that the estimated cost of the proposed building as shown by the petitioner, was not sufficient to cover an area of 8425 square meter, which was the minimum requirement under the terms of the allotment and, therefore, the offer of the petitioner was not found genuine, consequently its allotment was not finalized. He also relies upon Chapter-II of the Operating Manual of UPSIDCL dated July, 1995, wherein, in Clause 2.03, it has been provided as under:
"2.03. ASSESSMENT OF LAND REQUIREMENT The application complete in all respects shall be processed and the land requirement for the project shall be assessed in the following manner:
(I) The total covered area proposed by applicant in the project report should be at least 30% of the plot area. For determining the proposed covered area cost of building may also be taken into account as mentioned in the project report. Due weightage may also be given to the type of industry and project cost."
Rest of the conditions since are not relevant, therefore, we skip the same.
The UPSIDCL in this very supplementary counter affidavit has itself mentioned that in the application form, the petitioner disclosed that it wants to set up a SSI Unit and for which, the requirement of the area was shown as 20127 square meter. The petitioner has proposed a lay out plan of the land indicating that out of the aforesaid area of 20127 square meter, it will utilize 8425 square meter as covered area and 11702 square meter as open area. The proposed cost of construction over 8425 square meter area has been shown as Rs. 220.0 lacs.
The UPSIDCL, not being satisfied with the estimated cost for constructing an area of 8425 square meter, appears to have calculated the said cost of construction of its own, on the basis of the rates, as prescribed by the Public Works Department, U.P., Lucknow. The calculations so made stand reflected in Para 8(iii) of the supplementary counter affidavit.
Attention has also been drawn of the Court to the Office Order dated 6.11.07 issued by the Public Works Department, U.P., Lucknow, which revises the rates of construction for residential/non residential buildings.
The conditions of allotment did require that the applicant must conform to the eligibility criteria and that he would be given preference, in case he is having any existing unit in that area and that he wants additional land, either for expansion of existing unit or for setting up an ancillary unit. This finds mention in Clause-16 of the general conditions for allotment of plots/sheds and grant of lease, where Priority in Allotment has been mentioned, in which sub-clause (v) and (x) reads as under:
"(v) Units requiring land for expansion in the same industrial areas.
(x) Ancillary Units: (Registration from D.I.)"
The petitioner was also required to indicate that it will make the construction within an area not less than 30% of the total area and the cost of construction was to be provided by the applicant/petitioner.
The petitioner did comply with all the terms and conditions and specifically mentioned that it was also having an ancillary unit of Tata Motors Ltd. This unit is manufacturing auto parts at Lucknow. In order to meet the ancillary projects i.e. by Tata Motors Ltd., the petitioner was in need of industrial plot for expansion of its existing unit to meet the additional requirement of Tata Motors Ltd.
On the basis of the aforesaid clauses of the General Conditions for Allotment of Plot, the petitioner claimed priority in allotment of the aforesaid industrial plot.
The grounds for not making allotment of the industrial plot in question in favour of the petitioner since have varied from stage to stage in the present writ petition, it will be of some use to summarize the three facts by the UPSIDCL in support of its action of rejection of the application of the petitioner:
(1) In the impugned order dated 15.7.08, the only reason given was that 'the allotment proceedings could not be completed and, therefore, the money deposited by the applicants be returned'. The counter affidavit filed by the UPSIDCL, says that there was only one applicant, namely, the present petitioner, but who were those applicants to whom the money is to be returned, is not clear from the order, though the words used in the order are that the 'money deposited by the applicants be returned', meaning thereby that there appears to be more than one applicant.
(2) In the first counter affidavit, the ground for refusal is that since only one application was received and the same was not found to be sufficient, therefore, no allotment was made. This again does not reveal that why in a case where no comparative rates are invited, allotment can be refused on the ground that there was only one application. It is not a case where the maximum bid was to be made for allotment of the plot, but it is a case where the rates on which the industrial plot was to be allotted, were widely publicized and there would be no occasion for any applicant to quote any higher rate. The industrial plot was to be allotted @ 1500/- per square meter and not on a single penny over and above the said price. In these circumstances the 'sole bidder' cannot be a ground for rejection of the allotment. Apart from that, if the rates or charges have been revised by efflux of time, not for a fault which could be attributed to the applicant, namely, the petitioner, he cannot be refused allotment on this ground.
It is the common knowledge that the rates of land stand increased without even developing it by passage of time and, therefore, if the auction is held or allotment is made on the given rates, keeping in mind the particular rates at the relevant time, merely because of inaction on the part of the lessor or government or the UPSIDCL or any public sector corporation, if the proceedings are delayed and are not finalized and in the meantime, if the rates are increased, that will not give benefit to such public sector corporation nor would defeat the cause of the applicant. If such an excuse is allowed all the time in the matter of allotment, it would be very easy for the department or public sector corporation to keep on postponing the matter of allotment on the aforesaid pretext and defeat the just claim of any applicant, who is otherwise entitled to get the land allotted.
In the counter affidavit, a stand has also been taken that since the UPSIDCL was of the view that the advertisement itself was no more in existence, it having been set aside, the tentative decision taken by the UPSIDCL in favour of the petitioner to allot the land, could not be finalized. This again requires explanation from the UPSIDCL as to whether the petitioner was found to be ineligible or its application was found to be not in accordance with the terms of the advertisement or that its application was rejected first and then the advertisement was cancelled or the advertisement was first cancelled and, therefore, the tentative decision taken in favour of the petitioner could not be finalized. The two grounds cannot go together. Either the UPSIDCL for some valid reason had cancelled the advertisement and thereafter they were unable to proceed with the application of the petitioner regarding which a tentative decision was taken in favour of the petitioner or it may be, that because the petitioner was not found eligible for any reason whatsoever, its application was rejected and thereafter, the advertisement was cancelled. The UPSIDCL has not cleared the aforesaid position.
There is nothing on record to indicate nor it has been argued that the advertisement was first cancelled for some shortcoming and, therefore, the decision could not be finalized, though a tentative decision has been taken in favour of the petitioner. The reason, therefore, given are absolutely vague and it is an afterthought to justify the illegal action.
The Third reason, which has been given in the supplementary counter affidavit, which was filed on 1.2.2010 i.e. after about two years of filing of the counter affidavit, is that the cost of construction which has been proposed by the petitioner was too less and, therefore, the genuineness of the claim of the petitioner was doubted. This plea we have already discussed, therefore, we need not discuss the same any more.
Sri Ratnesh Chandra, learned counsel for the petitioner, however, explaining the aforesaid cost of construction, submitted that as per the Office Order dated 6.11.07 issued by the Public Works Department, the rates which are applicable for construction of building, may be residential or non-residential, would not be relevant for construction of an industrial shed, as it does not require any large construction and its cost of construction is always less, as compared to construction of houses and commercial buildings. He relies upon the quotation submitted by one M/s. Narsingh Constructions dated 24.12.07 to indicate that M.S. Structural Work (including sheeting) was to be done for an amount of Rs. 1,62,50,000/- and the total cost, as quoted was Rs. 1,88,18,500/- and against this, the petitioner has proposed Rs. 220.0 lacs.
Submission is that without ascertaining that the cost of construction was in any way less for the proposed construction, the UPSIDCL of its own could not have applied a different criteria for finding out the cost of construction.
Further argument is that under Clause-9 of the General Conditions for Allotment, there is a specific provision, which reads as under:
"9. Within the time period stipulated in Lease Deed, the allottee will have to commence the construction of factory building, complete the same by covering at least 30% of the area of the plot by roof/permanent shed as also install machinery and plant, and start commercial production therein, failing which allotment of plot is liable to be cancelled with forfeiture of deposits as per clause 18 below."
Submission is that in case at any point of time, it could be detected that the area covered is not 30%, the lease itself would be cancelled.
The plea of the respondents that merely by applying in pursuance of the advertisement, the petitioner would not get any vested right to claim for allotment, even though it might have complied with the terms of the advertisement, cannot be a defense in the instant case, for the reason that when the petitioner had applied in terms of the advertisement and completed all the formalities, the refusal to allot or cancel the notice of allotment could be done on some reasonable ground and not arbitrarily. Fairness in action and non-arbitrariness can never be given a go-bye.
If an order gives a reason and if that reason is found to be non-existent or arbitrary, such an order cannot be sustained. The consequence of setting aside such an order would naturally follow, as in the instant case, on the quashing of the aforesaid impugned order, the only corollary would be that the cause of the petitioner would have to be considered in the light of the advertisement, the general conditions of allotment and other relevant rules, as may be applicable.
On appreciation of the facts aforesaid and the reasons given for cancellation or refusal to allot the industrial plot in favour of the petitioner and that the UPSIDCL not being sure regarding the reason for which the allotment could not be finalized in favour of the petitioner and the reasons, which we have already referred, having been found to be not sufficient to refuse the allotment in favour of the petitioner or in other words, not to proceed with the process of allotment, we hold that the rejection on the part of UPSIDCL in proceeding with the matter is absolutely illegal, without authority and arbitrary and the action taken is absolutely irrational and without any basis.
The petitioner-applicant having complied with all the terms and conditions, as were notified in the advertisement, was entitled for claiming preference in view of the conditions of allotment discussed above. The UPSIDCL for no valid reason refused to allot the land in favour of the petitioner.
We also take notice of the fact that in case the UPSIDCL on some stage after taking a decision even tentative in favour of the petitioner had some doubts about the genuineness and bona fide of the claim of the petitioner, it could have afforded an opportunity to the petitioner and asked for a reply on such issues, but having not done so, and having taken multiple stands to defend the order, we have no option but to set aside the impugned order.
We, therefore, set aside the order passed by the UPSIDCL dated 15.7.08 and direct that UPSIDCL shall proceed with the matter of allotment of the plot in question in favour of the petitioner, in accordance with law. The petitioner shall satisfy upon each and every issue on which, it is required to answer. In case of fulfilment of all the conditions, the matter shall be finalized in favour of the petitioner within a maximum period of two months from the date of receipt of a certified copy of this order, subject to cooperation of the petitioner.
The writ petition is allowed. No order as to costs.
Dated: 4.10.2010 Sachin