Polar Industries Ltd. vs State of Uttarakhand and Others

B.S. Verma, J.—By means of this writ petition, the petitioner has sought the following relief:

To issue a writ, order or direction in the nature of certiorari quashing the impugned order dated 10-10-2006 passed by respondent No. 3 which has been communicated to the petitioner company through letter dated 11-10-2007 numbered as Ref: 8451/MD/SIDCUL/SC/07 restoring the position to status prior thereto by continuing the allotment and lease deed on the same terms and conditions.

To issue a writ, order or direction in the nature of mandamus commanding the respondents treat the period of construction and production as being extended in the case of the petitioner company, in the facts and circumstances of the case till the attainment of production as intimated to the Excise Department under Clause 1.1(a) of the lease deed.

To mould and issue any other writ, order or direction, which this Hon''ble Court deems just and proper in the circumstances of the case.

To award the cost of the petition to the petitioner.

Brief facts giving rise to the present writ petition, according to the petitioner, are that the petitioner is a public limited company. The petitioner company was allotted a plot measuring 20265 sq.mt. on 6-1-2004, which is marked as Plot No. 1, Sector 2, Integrated Industrial Estate ( for short IIE) Ranipur, Haridwar. The petitioner company made a request to the respondent Nos. 2 to 4 for execution of lease deed in its favour. The Deputy General Manager of the SIDCUL by letter dated 23-9-2004 informed the petitioner company that the matter of execution of lease deed is under process and as soon as circle rates are finalized by the District Authorities, the same shall be executed. On 30-12-2005 the lease deed of the plot in question was executed for a term of 90 years vide Annexure-4 and finally the possession of the plot was delivered to the petitioner on 15-2-2006. The petitioner company started its construction process on the plot and submitted building plan on 20-1-2006 to the respondents. Provisional permission to raise construction was granted to the petitioner company on 27-3-2006, but no final approval of the plan was given in favour of the petitioner company. The petitioner company alleges to have made sincere efforts to start production. In the mean time, the respondent No. 4 sent a notice dated 25-1-2006 to the petitioner company complaining therein that the petitioner company had not taken effective steps for utilization of the plot within a period of 24 months and failed to complete the construction of building of its unit thus committed breach of the provisions of allotment. The petitioner company sent reply to the Officer concerned of the respondents by its letter dated 3-2-2006 and assured that the commercial production would commence by or before 31-3-2007 in the unit. The petitioner company requested to withdraw the notice sent to it. Thereafter, a meeting was held on 29-8-2006 between the officials of the respondents and the petitioner company and in consequence of the said meeting, petitioner company submitted a progress report to the respondent by letter dated 31-8-2006. However, the respondents cancelled the allotment of the plot in question vide its letter dated 31-8-2006. Copy whereof has been annexed as Annexure-12 to the writ petition.

According to the petitioner, on 25-9-2006 a representation was made to the respondents by the petitioner company with the request for withdrawal of order of cancellation of plot, but no heed was paid to the representation of the petitioner by the respondents. The petitioner thereafter filed Writ Petition No. 1359 of 2006(M/B) before this Court. The writ petition was ultimately allowed by order dated 16-12-2006 and the petitioner company was granted a period of six months for completion of the construction work and to commence commercial production. The petitioner company started its construction in full swing. The petitioner company made a request to the respondents to grant provisional clearance of the drawings submitted to them but to no avail. On 3-4-2007 the petitioner company again filed a writ petition bearing No. 365 of 2007 (M/B) with the prayer that the respondents be directed to approve the upgraded drawings of the petitioner company so that the construction may be completed within the time as per direction of the Court. Ultimately, the commercial production in the unit commenced on 30-4-2007. On 15-3-2007 the respondents without waiting for the six months'' period to expire as allowed by the High Court, preferred Civil Appeal No. 5382 of 2007 before the Apex Court assailing the order dated 16-12-2006 passed by this Court. The operation of the order dated 16-12-2006 was stayed by the Supreme Court by order dated 30-3-2007/4-4-2007. The Civil Appeal was allowed by order dated 1-8-2007. The order dated 16-12-2006 was set aside. It was directed that the petitioner company shall file independent representation before respondent No. 3 within two weeks and the respondents shall pass appropriate order in each case within six weeks. The petitioner made a representation to the respondent No. 2 with a request to recall the order of cancellation of plots passed by SIDCUL, but the representation of the petitioner dated 13-8-2007 was rejected by order dated 10-10-2007.

On behalf of the respondent Nos. 2 to 4, counter affidavit has been filed. It is stated in the counter affidavit that the petitioner had not adhered to the terms and conditions of the lease deed inasmuch as the petitioner had not been able either to construct the factory or to start commercial production within two years from the date of allotment. Consequently, the allotment order was cancelled vide order dated 31-8-2006. The order was challenged before the High Court in WPMB No. 1359 of 2006, which was disposed of finally by order dated 16-12-2006. Another writ petition bearing WPMB No. 365 of 2007 was filed by the petitioner, which was dismissed as withdrawn by order dated 25-6-2007. The petitioner is before this Court in third round of litigation against the order of cancellation of plot. It is also stated that on the representation made by the petitioner, the Managing Director, SIDCUL heard the petitioner as well as the parties concerned and personal hearing was given in the matter. An inspection was also made of the site by Mr. Ashish Gujral an architect of the State Industrial Development Authority (SIDA) on 14-9-2007 and the following permanent structures were found at the site:

One factory shed on 1242 sq.mt.

one guard room area 27.12 sq.mt.

one Panel room of 12.42 sq.mt.

Boundary wall on all the four sides with one extra gate.

According to the respondents, the petitioner company has not utilized the plot, therefore, the plot of the petitioner was rightly cancelled by order dated 31-8-2006.

It is also stated in the counter affidavit that the petitioner violated the terms and condition of allotment as well as of lease deed because the petitioner had not been able either to construct the factory or to start commercial production within two years from the date of allotment. In reply to the averments made in paragraph Nos. 3 and 4 of the writ petition it is stated that the petitioner was allotted a plot measuring 20265 sq.mt. in IIE BHEL Haridwar on 6-1-2004 and a lease deed was executed between the parties on 30-12-2005. The petitioner was required to complete the construction on the plot and start commercial production within two years from the date of allotment of plot, which was to commence from 6-1-2004. The petitioner did not comply with the condition of lease deed so as to start the commercial production within the stipulated time, therefore, the allotment of plot in favour of the petitioner was cancelled by order dated 31-8-2006. The petitioner assailed the order in W.P.M.B. No. 1359 of 2006 M/s Polar Industries v. State of Uttaranchal and others. A Division Bench of this Court while deciding the writ petition by order dated 16-12-2006 granted six months'' more time to the petitioner to complete the construction and start commercial production. The SIDCUL filed SLP before the Apex Court. Ultimately, the appeal of the respondents was allowed. The order dated 16-12-2006 passed by the High Court was quashed. Liberty was given to the petitioner to make a representation to the SIDCUL and the Managing Director was to decide the representation of the petitioner. As per directions of the Apex Court the SIDCUL decided the representation of the petitioner and held that the plot of the petitioner was rightly cancelled. It is further stated that the petitioner failed to make payment for a long time. The lease deed was executed only on 30-12-2005 due to inaction on the part of the petitioner. It is also stated that the SIDCUL sent a number of notices to the petitioner demanding him to come and execute the lease deed.

In the counter affidavit, it is further stated that the petitioner company itself did not come forward to take possession of the plot. It has been denied that there was delay in delivering possession on the part of SIDCUL. It is stated that the petitioner did not furnish the requisite stamp papers for execution of lease deed until 30-12-2005. It is denied that the petitioner had done lot of work within one month of the execution of lease deed. There has been default on the part of the petitioner in not commencing commercial production within stipulated period of two years of date of allotment. It is also stated that notice dated 3-2-2006 was given to the petitioner as a warning. It is also stated that possession of plot was given to the petitioner on 15-2-2006 and there was no bar to start construction activities without taking possession certificate. In the progress report dated 31-8-2006 submitted by the petitioner, there is no mention as to what progress was made by the petitioner on the plot so far, while the allotment was liable to be cancelled six months prior to 31-8-2006 for default on the part of the petitioner. It is further stated that the Hon''ble Supreme Court had passed an order of status quo vide order dated 30-3-2007, therefore, admission of the petitioner contrary to the status quo order amounts to contempt of the order of the Apex Court. It is also stated that the petitioner was not liable to make any construction in view of the said order passed by the Apex Court. The averments of the petitioner that he continued to make construction in the factory and started commercial production in the unit on 30-4-2007 is in defiance of the status quo order passed by the Supreme Court of India. It is further stated that in compliance of the order of the Apex Court the representation of the petitioner was decided on merit by a speaking order.

The petitioner has filed rejoinder affidavit.

On behalf of the respondent Nos. 2 to 4 supplementary affidavit has been filed, wherein it is stated that as per Clause 9 of the lease deed, all the disputes and differences between the parties subject to arbitration. The interpretation and implementation of the contract cannot be a subject matter of writ petition. The writ petition therefore is not maintainable.

I have heard learned Counsel for the parties at length and perused the entire material placed before this Court and have also pondered over all the aspect of the case.

It finds place to mention here that the respondent Nos. 2 to 4-SIDCUL while cancelling the allotment of plot of the petitioner passed an order dated 31-8-2006 which reads as under:

M/s Polar Industries Ltd. Was allotted plot No. 1 in Sector 2 at IIE-BHEL-Haridwar vide this office letter No. 2416/MD/SIDCUL/2003-04 dated 06-01-2004. The condition No. 14 of the terms of allotment inter alia states that the unit has to be established and start commercial production within two years from date of allotment. It has been brought to the notice of this office that despite the elapse of 31 months the allottee company has failed to commence commercial production on the allotted land. This is a clear cut violation of the aforementioned clause of allotment.

The company has also been a defaulter in making payment and even 50% of the land cost which was supposed to be deposited by 30-04-06 was not deposited by the captioned company within stipulated period. Accordingly payment notice No. 1292/DGM/SIDCUL/04 dated 02-09-04 was issued to deposit 50% cost of the plot. The co. did not make the payment and again requested to extend the time for depositing this amount. The date was further extended and cancellation was withheld way back in September 04. Since then the co. has been irregular in making the payment & there has been no real initiate from the co. to make the unit operational. Again notice No. 4297/DGM/SIDCUL, dated 19-04-05 and "Final Notice for Cancellation" No. 6824/DGM/SIDCUL/05 dated12-07-05 & letter No. 18845/DGM/SIDCUL/05 dated 21-12-05 for execution of lease deed was also issued. All these notices substantiate the fact that the co. has never been serious in putting up the industry.

The legal utilization notice No. 267/DGM/SIDCUL/06 dated 568/DGM/SIDCUL/06 dated 03-02-06 were issued in reference to the Clause 1(a)(i) of lease deed. Since then there has been no attempt by the company for making the unit operational & there has been no activity on the captioned plot for over last six months.

In the aforesaid circumstances, we are left with no other recourse but to reluctantly revoke the allotment letter No. 2416/MD/SIDCUL/2003-04 dated 06-01-2004 & termination of lease deed dated 30-12-05 and forfeiture of deposits made by the firm/company as per the rules of the Corporation.

Sd/Alok Kumar,

Managing Director.

Aggrieved by the aforesaid order dated 31-8-2006, the petitioner company preferred Writ Petition No. 1359 of 2006(M/B) Polar Industries v. State of Uttaranchal and Ors. before this Court. A Division Bench of this Court by a common order dated 16-12-2006 passed in Writ Petition No. 999 of 2006 (M/B) Falcon Pvt. Ltd. v. State of Uttaranchal and Ors. disposed of the writ petition with the following observation:

The object of putting such a condition or purpose behind our order granting some time to start the production was only that the production may start and the object for which the scheme has been formulated, may be achieved. Therefore, in furtherance of the achievement of the object, we provide that from today, if the production is not started by the petitioners from a period of six months, their allotments shall stand cancelled, as already sufficient period as per the allotment order has been elapsed and no production has been started yet. After the expiry of the aforesaid period of six months, the SIDCUL will be at liberty to resale the plots allotted to the petitioners at the market value of the land after accumulating the investment made by the previous lessee in respect of the development of plots and construction raised, if any, and that shall be the minimum price in the proclamation of auction sale.

The respondent-SIDCUL feeling aggrieved by the said order passed a Division Bench of this Court has preferred SLP before the Apex Court and it appears that the operation of the order dated 16-12-2006 passed by this Court was stayed by the Apex Court by an interim order passed in the SLP. Ultimately the Apex Court by a common order dated 1-8-2007 passed in Civil Appeal No. 3402 of 2007, State Industrial Development Corporation of Uttaranchal Ltd. And Ors. v. Jyoti Industries along with 7 other Civil Appeals arising out of the order dated 16-12-2006 passed by the Division Bench of this Court disposed of all the civil appeal. The order dated August 1, 2007 reads as under:

Leave granted in all the SLPs.

Having heard the learned Counsel for the parties, we are of the opinion that for doing complete justice to the parties, the order of the High Court should be set aside and following directions be issued: (1) Each of the entrepreneurs who were respondents before us, shall file independent representation before the Managing Director of the appellant-Corporation within two weeks from date questioning the legality or validity of the order of the order of cancellation of allotment and/or for restoration of the properties, as the case may be.

(2) The Managing Director of the appellant-Corporation shall hear the parties or their authorized representative, within two weeks thereafter. It will be open to the entrepreneurs to produce such evidence or evidences before the said authority as they may intend to do.

(3) The Department may also produce their evidences before the said authority.

(4) If found necessary, the Managing Director may inspect the site himself or cause it to be inspected by some other duly authorized officer in this behalf.

(5) The Managing Director shall pass appropriate speaking order in each case separately, within six weeks from the date of filing the respective representations.

(6) It will be open to the concerned entrepreneurs also to point out that in their cases, either possession had not been handed over or the lease deed/transfer deed had not been executed.

(7) Status quo in respect of the properties shall be maintained by the parties in the meantime.

The appeals are disposed of with the aforementioned directions and observations.

The instant writ petition has been filed by the petitioner in consequence of the rejection of its representation dated 13-8-2007, which was preferred before the Managing Director of the respondents in pursuance of the order dated 1-8-2007 passed by the Apex Court in Civil Appeal No. 3407 of 2007 (arising out of SLP (c) No. 5382 of 2007) which was decided by an order passed in Civil Appeal No. 3402 of 2007 as referred to above.

Learned Senior Advocate Mr. L.P. Naithani appearing for the respondent Nos. 2 to 4 has raised a preliminary objection on the maintainability of the writ petition and contended that the present writ petition is not maintainable because the petitioner has an alternate remedy to invoke the arbitration clause under the lease deed. Learned Counsel has argued that the disputes relating to contract between the parties could not be a subject matter of adjudication by a writ court and that even if it is assumed that the terms of the contract were violated, the matter could only be heard in a civil court or in an arbitration proceeding. Reliance was placed by the learned Counsel in the cases of Pimpri Chinchwad Municipal Corporation and Others Vs. Gayatri Construction Company and Another, , Midi Extrusions Limited Vs. U.P. State Industrial Development Corporation Limited and Preasion Pipes and Profiles Company Limited, and Kisan Sahkari Chini Mills Limited and Ors. v. Vardan Linkers and Ors. (2008) 12 SCC 500.

I am not inclined to accept the contention of the learned Senior Advocate that the present writ petition is not maintainable and the best course open to the petitioner is to invoke arbitration clause. It is pertinent to mention that the matter of cancellation of plot had been agitated before the Hon''ble Supreme Court. In my view if the arbitration clause was required to be involved, the Apex Court itself could have issued such a direction when the respondent-SIDCUL itself filed SLP before the Supreme Court, rather the Apex Court relegated the parties to make a representation before the Managing Director of the SIDCUL. Moreover, the propriety of the order of rejection of the representation made by the petitioner can very well be examined by the writ court under Article 226 of the Constitution of India, particularly because the decision of the authority rejecting a representation could not be a matter of dispute as envisaged by the arbitration clause under the lease deed. The contention of the learned Counsel for the SIDCUL on the maintainability of writ petition is rejected.

Moreover, the controversy regarding invoking arbitration clause by the petitioner has been resolved by this Court in Writ Petition No. 1008 of 2008 M/s Falcon Contracts Pvt. Ltd. v. State of Uttarakhand and Ors., decided on 23-3-2010.

The undisputed facts of the case are that by an order dated January 6, 2004, the petitioner was allotted Plot No. 1, in Sector 2, for setting up an industrial unit to manufacture electrical fans, water lifting pumps, geysers, water purifiers, laminations. The area of plot as mentioned in the order is approximately 20400 sq.mtr. as per site plan. It was also informed that the period of lease is for 90 years. The petitioner was required to complete all necessary formalities including execution of the lease deed and payment. The SIDCUL by its letter dated 23-9-2004 informed the petitioner that the matter of execution of lease deed was under process and as soon as the circle rates are finalized by District authorities, the lease deed would be executed in its favour. The lease deed was executed in favour of the petitioner on 30-12-2005. Possession of the plot in question was delivered to the petitioner on 15-2-2006. Provisional permission to start construction activities at the site was granted to the petitioner only on 27-3-2006. It is also undisputed fact that the petitioner submitted its building designs/plan on 20-1-2006 after execution of lease deed, but the respondent-authority had not yet been granted final approval of the plan by the SIDCUL. In the lease deed it is provided that the lessee shall complete the construction and commence manufacturing and production from the unit within the stipulated period, which is two years from the date of the lease deed or the date on which the physical possession of the demised land was handed over to the lessee, therefore, this period if reckoned from the date of lease deed was to expire on 30-12-2007 and if the date of possession is taken into account, it was to expire as late as 15-2-2008. Admittedly the allotment order was cancelled by an order dated 31-8-2006.

For a just decision of the case, a reference to Clause 1.1 (a) (i), (ii), (iii), (iv) and (v) of the lease deed executed between the parties is necessary, which reads as under:

(a) (i) Within the period of twenty Four (24) months from the date of letter of allotment of the Demised Land i.e. 06-01-04 ("Stipulated Period") the Lessee shall built and erect construction, execute works and complete installation of plant and machinery and commence production in its Unit.

(ii) However, in case the Lessee is unable to commence production in its Unit, within the Stipulated Period for reasons attributable to the Lessor or any State/Central Governmental authority or any local authority/body having jurisdiction, on an application from the Lessee with supporting document, the Lessor shall extend the Stipulated Period, by such period(s).

(iii) In addition, in case the Lessee is unable to commence production in its Unit, within the Stipulated Period, for reasons not covered under the preceding sub-clause, on an application from the Lessee, the Lessor shall consider such application, on merits and may grant such extension(s), as it may deem appropriate, subject to payment of Extension Fee, as may be specified by the Lessor. In case, the Lessor grants extension, the Stipulated Period shall stand extended and thereupon the obligation hereunder of the Lessee to complete the building shall be taken to such extended period.

In case, the Lessor is inclined to reject the application for extension, the same shall be communicated to the Lessee, by a reasoned Order, Passed by the person, having authority, on behalf of the Lessor.

(iv) In case the Lessor, taken a decision to grant extension as envisaged in Clause 1.1(a)(iii) above and determines this Deed, the Lessee shall be at liberty to remove and appropriate to itself all building, structures, materials and properties, if any, deposited by them, on their agents, in the Demised Land, after paying all dues, rent and all municipal and other taxes, rates and assessment dues, and any other dues, occurring to the Lessor as on the date of such termination of Lease and to remove the materials from the Demised Land within sixty (60) days of the date of termination of this Deed.

(v) Notwithstanding any such default of the stipulation contained in Clause 1.1(a)(i) above and in case the Lessor proposes to determine the Lease as envisaged in Clause 1.1(a)(iv) above, the Lessor shall be given 60 days written notice to the Lessee, indicating its decision to determine the Lease and terminate the Lease Deed.

Learned Counsel appearing for the petitioner has vehemently submitted that it is undisputed fact that the provisional permission to start construction was granted to the petitioner as late as 27-3-2006, while the possession of plot was delivered to the petitioner only on 15-2-2006. Learned Counsel therefore argued that it was beyond the control of the petitioner to have legally raised any construction on the site prior to delivery of possession i.e. on 15-2-2006. Learned Counsel has vehemently argued that the period of stipulated period of two years must should be considered vis-�-vis date on which possession is delivered to the petitioner. In the order of allotment dated 6-1-2004 addressed to the petitioner, it is mentioned that "you are required to complete all necessary formalities including execution of the Lease Deed and depositing the balance amount in accordance with terms of payment forwarded to you earlier, so that plots could be handed over to you."

It is also pertinent to mention here that the Supreme Court in Clause (6) of the directions issued in the order dated 1-8-2007 mentioned that "it will be open to the concerned entrepreneurs also to point out that in their cases, either possession had not been handed over or the lease deed/transfer deed had not been executed." This observation would show that the Apex Court was conscious regarding these factors of delivery of possession to the allottees and execution of lease deed.

The possession of the demised plot was handed over to the petitioner on 15-2-2006. But interestingly, the respondent authority without taking notice of the fact that by that time, possession of the plot was not delivered to the petitioner had issued notices on 25-1-2006 and 3-2-2006 showing its intention to cancel the allotment on the ground that construction of building of the petitioner was not commenced. I have perused the recitals made in the allotment order (Annexure No. 2 to the petition). In this order of allotment, there is no whisper that the petitioner/lessee would be at liberty to raise construction/start production in the unit even without getting the possession of demised plot or that the execution of lease deed and taking possession is just formal.

Be that as it may, this Court is of the opinion that when there was a condition precedent for completing necessary formalities including that of execution of Lease Deed and depositing of the balance amount before possession of plot could be handed over to the petitioner, the date of possession i.e. 15-2-2006 is very material. Moreover, when the provisional permission to the petitioner was accorded to start construction activities only after expiry of 24 months as reckoned by the respondent authority, the notice dated 25-1-2006 (Annexure-5 to the petition) and subsequent notice dated 3-2-2006 (Annexure-7) sent by the respondent-SIDCUL lose its sanctity and importance. Not only this, while passing the order of cancellation of plot of the petitioner by order dated 31-8-2006, the Managing Director of the respondent Corporation had not at all taken into account the prayer made by the petitioner in its application dated 3-2-2006 for withdrawal of the notice (Annexure 6 to the petition). The petitioner had specifically mentioned in the letter that the unit would commence commercial production before 31st March, 2007. It is important to note that in para No. 10 of the counter affidavit the respondent-SIDCUL could not dare deny to have received the application of the petitioner and in the cancellation order also there is no mention of the letter sent by the petitioners for withdrawal of notice (Annexure-6) as well as another letter dated 31-8-2006 (Annexure-11) whereby the petitioner sought one month time till the end of September 2006 to show progress on the ground. The respondent Nos. 2 to 4 in paragraph No. 23 have taken notice of progress report dated 31-8-2006 (Annexure No. 11 to the petition) but has not at all dealt with the prayer as sought by the petitioner.

Having considered the entire facts and circumstances of the case, this Court is of the view that the respondents to show their bona fide in the matter ought to have treated Annexure-11 as an application for extension of time by the petitioner and they were under obligation to have complied with the required of Clause 1.1(a)(v) of the lease deed and it was imperative on their part to have issued notice of 60 days prior to passing the cancellation order dated 31-8-2006. In any view of the matter, non compliance of the mandatory provision of the Clause under reference is fatal to the stand of the respondents in this case. The action on the part of the respondents cancelling the plot of the petitioner is wholly arbitrary and in violation of the principles of natural justice and fair play for other reasons detailed below.

Firstly, that the SIDCUL vide its letter dated 23-09-2004 itself (Annexure-3 to the petition) informed the petitioner that the lease deed cannot be executed as circle rates have not been finalized by the District Authorities and the execution of lease deed was to follow the same. The petitioner in its representation furnished to the Managing Director in compliance of the order of the Apex Court informed the authority concerned that in paragraph A) that following the letter of allotment dated 6-1-2002 an amount of Rs. 1,32,08,298 including principal amount, interest and lease rent had already been deposited before 30.12.05. It is also mentioned that an amount of Rs. 13,51,000/- was incurred by the petitioner in execution of lease deed. In paragraph P) of the representation, the petitioner has specifically mentioned that as a consequence of the efforts made by the petitioner to set up the unit investment of more than Rs. 2.5 Crores (including the cost of land) had already been incurred upto 30-4-2007.

The representation of the petitioner has been rejected firstly on the ground that the payments towards cost of land was not made within the stipulated time. In the order it is mentioned that the allottee was supposed to take possession of the plot within 60 days from the date of allotment. It is very surprising that when in the allotment order, the condition precedent was to complete all necessary formalities and the possession of land was to be given thereafter, as detailed hereinabove, it does not stand to reason as to how the Managing Director has held that the allottee was supposed to take possession within 60 days from the date of allotment. Moreover in the notices given to the petitioner emphasis was given that construction was not complete and production has not commenced within a period of 24 months from the date of allotment of plot. The authority has held that lease deed was executed only on 30th December 2005 after expiry of two years from the date of allotment. This observation made in the rejection order is very cryptic for the simple reason that the period of two years from the date of allotment of plot was to expire on 5-1-2006.

Secondly, when the petitioner was required to make 50% payment within a period of 30 days from the date of allotment and if the payments were accepted by the respondents after the expiry of the statutory period of 30 days, the act on the part of the respondents amount granting of extension of time to the petitioner. Once the respondents at their own has given extension of time on any of the counts to the petitioner and the lease deed is taken to have been executed after the expiry of the period of two years from the date of allotment order, then in that event, it is incumbent upon the respondents to have given 60 days notice as per Clause 1.1(a)(v) of the lease deed. There was no justification for the respondent authority have rejected the representation of the petitioner. Even on this ground alone, the impugned order dated 10-10-2007 is liable to be quashed.

Thirdly, the learned Counsel for the petitioner has contended that the acceptance of payments after the stipulated period by the respondents towards payment of cost of land would amount estoppel against them. In the instant case, this argument has some force.

Fourthly, if the lease deed itself was executed after the expiry of the period of two years or so, why the provisional permission to start construction activities was given to the petitioner by the respondents as late as on 27-3-2006 after expiry of alleged statutory period of two years on which the respondents are hammering and that too just to put its huge funds to go astray. It is significant to mention that an inspection was conducted by the respondents as per direction of the Apex Court on 14th September 2007 by Shri Ashish Gujral, Architect and Planner of the respondent and he found certain construction over 1281.55 Sq.mt. This circumstance itself goes to show that the petitioner had incurred considerable amounts on the construction activities and it speaks of the seriousness of the petitioner to establish its unit for which the land was allotted to it.

Fifthly, the petitioner had alleged that commercial production in the unit had taken place on 30-4-2007 and for that purpose the respondents duly intimated the Central Excise Dept. about the start of commercial production in the unit as stated in paragraph 12(v) of the representation. On that count, the impugned order is silent.

Sixthly, the learned Counsel for the petitioner has made a reference to the judgment dated 23-3-2010 rendered by this Court in Writ Petition No. 1008 of 2008 (M/S) M/s Falcon Contracts Pvt. Ltd. v. State of Uttarakhand and others and to the judgment and order dated 18-12-2008 rendered in Writ Petition No. 2483 of 2007 Haldiram Snacks Pvt. Ltd. v. State of Uttarakhand and Ors. and urged that in similar circumstances the writ petitions were allowed and the plot of the petitioners were restored by this Court. I have perused the judgment dated 23-3-2010 passed by this Court in Writ Petition No. 1008 of 2008 (M/S) M/s Falcon Contracts Pvt. Ltd. v. State of Uttarakhand and others. In paragraph 1 at page 15 of the judgment, this Court has inter alia observed that as under:

In the light of the aforesaid, the court finds that the action of the respondents for cancelling the plot was wholly arbitrary. The Court finds that the petitioner has spent a sum of Rs. 35 lacs for making the construction. The respondents in the impugned order admits that the building has been raised upto the roof level. The petitioner has subsequently urged in its representation as well as in the writ petition that the adjoining plots are still vacant and are lying un-utilised and that the respondents have not taken any action against the lessees of those plots. This fact has not been controverted either in the counter affidavit nor has been dealt with specifically while deciding the representation. The action of the respondents appears to be discriminatory.

In the case of M/s Haldiram Snacks Pvt. Ltd. v. State of Uttarakhand and others, this Court in similar circumstances has inter alia at page 15 held that "This Court, thinks it just and proper to mention here that respondent No. 3 while deciding the representation of the petitioner, has completely ignored the fact that the petitioner had already raised construction and spent a huge sum of Rs. 5.5 crores in establishing the factory and still he was not given proper opportunity to get its plot restored as against some other entrepreneurs who had not even raised any construction except the boundary wall in their plots within a period of two years by which they should have started their construction." In that writ petition, this Court while allowing the writ petition by order dated18-12-2008 directed the petitioner to deposit levy at the rate of 7.5% at the then prevailing rate (as accepted from the other 29 entrepreneurs).

It may also be noted that the order dated 16-12-2006 was passed by a Division Bench of this Court in WPMB No. 999 of 2006 Falcon Pvt. Ltd. v. State of Uttaranchal and Ors. and by a common order the writ petition of the petitioner was also disposed of. Thus it would be seen that the controversy involved in the order dated 3-3-2010 was almost identical to that of the instant writ petition. In the present petition also, the authority concerned has failed to take notice of the fact that a huge amount had already been incurred by the petitioner to start construction activities. When the respondents are held not to have taken any action against lessees of the vacant plots as held in the order dated 3-3-2010, it can safely be held that the action of the respondents is discriminatory vis-�-vis other similarly situated lessees.

In view of the above reasons and discussion made hereinabove, this Court is of the view that the impugned order rejecting the representation of the petitioner cannot be sustained in law. The impugned order is liable to be set aside outright. The writ petition deserves to be allowed.

As mentioned above, the SIDCUL had adopted a policy for restoring the allotment orders of some other entrepreneurs by charging restoration levy at the rate of 7.5% of the then prevailing rate, therefore, to do complete justice to the parties, it would be in the fitness of things that the petitioner should be directed to deposit extra charge at the rate of 7.5% of the base rate of the year 2004.

The writ petition is allowed with the following directions:

The impugned order dated 10-10-2007 rejecting the representation of the petitioner, passed by the respondents (Annexure-1 to the writ petition) is quashed.

The petitioner shall be allowed to move for restoration of his plot by making an application by depositing extra charge @ 7.5% of the amount of base rate of the year 2004 within a period of two months from today.

On depositing the amount, the lease shall continue for the remaining period of lease.

The petitioner shall start commercial production of the items mentioned in the lease within a period of six months from the date of this order.