Robin Chemicals (P) Ltd. vs Government of Tamil Nadu and Others

N.V. Balasubramanian, J.—The writ petition is for a writ of certionari to quash the order of the third respondent dated 21.2.1982 cancelling

the plot allotted to the petitioner at 4C(SP) Industrial Estate, Ambattur, Madras.

The Managing Director of the petitioner company earlier filed an application before the first respondent for the allotment in its favour of a plot of

an extent of 2.50 acres at Industrial Estate, Ambattur, Madras for industrial purposes. The first respondent by a letter dated 6.1.1972 allotted the

plot in plot No. 40(SP) Industrial Estate, Ambattur, Madras to the Managing Director of the petitioner company for setting up a factory to

manufacture the following articles, viz., flavouring essences, food colours, ancillaries spice and oleoresins, aromatic chemicals and synthetic

Essential Gels. The first respondent determined the cost of the plot at Rs. 20,000 per acre, and the petitioner was requested to make payment of a

sum of Rs. 25,000 being 50 per cent of the cost of the plot as advance payment within 30 days from the date of receipt of the letter of allotment.

The Managing Director paid the amount on 7.2.1972. The Managing Director made a request on 29.5.1972 to change the allotment of the plot in

the name of the petitioner-company. This request of the Managing Director was acceded to by the first respondent by a letter dated 17.6.1972,

and the fact of assignment was also informed by a letter dated 20.6.1972. Consequently, the petitioner-company was allotted the plot subject to

the same terms and conditions stipulated in the original order of allotment. Subsequently, there was a change of address of the petitioner-company

from 9, Anderson Road, Madras-6 to 1A/4, Nelson Manicka Mudaliar Road, Madras-29. According to the petitioner, the change of address of

the petitioner company was duly intimated to the Administrative Officer, Industrial Estate, Madras. The petitioner-company paid the second and

third instalment of Rs. 12,000 each on 30.3.1974 and 8.9.1975. The original assignment deed relating to the plot in question was forwarded by

First National City Bank, Madras to the Administrative Officer, Industrial Estate, Ambattur, Madras. According to the petitioner, the petitioner

company was paying maintenance charges for the aforesaid plot upto the year 1979-80. The case of the petitioner is that the demands for the

payment of maintenance charges were made to the new address notified at 1- A/4, Nelson Manicka Mudaliar Road, Madras-29.

According to the petitioner, it received three of four letters at the new address with regard to the non-commencement of the construction of the

industrial unit on the plot allotted to the petitioner. The petitioner, it seems, has requested the second respondent to forward necessary documents

to enable it to approach the bank for financial assistance. The petitioner has stated in the affidavit that it had also constructed a compound wall with

gate. The second respondent by a letter dated 10.2.1976 has informed that they have no objection for mortgaging the plot with a bank for raising

necessary financial assistance for the construction of the industrial unit. The letter also reads that prior notice will be given to remedy any breach of

condition before a decision is taken to resume the possession of the land. According to the petitioner, it had paid urban land tax upto the year

1984. The petitioner has addressed a letter dated 10.3.1976 to the second respondent stating that the bank has already sanctioned a term loan,

but the petitioner was unable to avail the loan because the assignment has not been sent to them from SIPCOT, and the bankers requested the

second respondent to forward the assignment deed. As already seen, the second respondent by a letter dated 10.2.1976 had stated that they have

no objection for mortgaging the petitioner''s interest in the plot with the bank for getting the required financial assistance. The petitioner has stated

that it received a letter dated 12.2.1986 addressed by the Deputy Manager of the third respondent stating that the allotment of the plot was

cancelled by the Managing Director on 21.2.1982, and the plot was resumed by them on 5.3.1982. The petitioner has filed a writ petition

challenging the order of cancellation as illegal on the ground that the respondents have not forwarded the communication regarding the cancellation

of the plot to the new address and the action of the respondents in sending the impugned order of cancellation to the old address is mala-fide. The

petitioner has also stated that the second respondent has informed that 90 days notice will be given to remedy any breach of condition or default

under the assignment deed and without any notice, the allotment was cancelled and the land was resumed by the third respondent, and hence, the

cancellation of the allotment and the resumption of the plot are illegal.

The third respondent has filed a counter-affidavit stating that the Industrial Estate was under the control of the first respondent originally, then it

came under the control of the second respondent from 6.9.1974 to 31.7.1976. The third respondent came into picture only from 1.9.1976. It is

stated in the counter-affidavit that the petitioner company had made a casual approach with reference to the terms of allotment of the plot in its

favour and did not start the construction work for the establishment of the industrial unit which was the main term of allotment of the plot in favour

of the petitioner company. The plot was handed over to the petitioner company on 25.3.1972, and the building plans were approved on

20.7.1973. Until 1982, the date on which the allotment was cancelled the petitioner company had not complied with the term regarding

construction and commencement of production. The company had not taken any interest to utilise the plot for the purpose for which it was allotted.

Since the petitioner had clearly violated the terms and conditions subject to which the plot was allotted, the allotment was cancelled and necessary

orders were also issued by letter dated 21.2.1982. The petitioner company was also requested to surrender the plot on or before 28.2.1982. The

petitioner company did not surrender the plot on 28.2.1982 and hence the third respondent resumed possession of the plot on 5.3.1982, and

informed the petitioner company by letter dated 6.3.1982. It has also been stated that the plot was allotted in favour of third parties on 27.1.1984

and the sale deed was also executed on 29.8.1990. The other portion of the plot was allotted to another third party on 1.12.1983 and 29.11.1987

and the sale deeds were also executed on 22.1.1993. The cancellation and the resumption of the plot was done in the year 1982 and the petitioner

had approached the Court only in 1986. Hence, it is contended that the writ petition is liable to be dismissed for laches on the part of the

petitioner.

Mr. O.R. Santhanakrishnan, learned counsel for the petitioner reiterated the contention that has been raised in the writ petition. Mr.

Santhanakrishnan, submitted that the third respondent was aware of the change of address of the petitioner- company and in spite of that specific

knowledge, the third respondent has sent the order of cancellation of the plot to the old address. The letter dated 12.2.1986 also makes it clear

that the third respondent has forwarded the letter to the old address which was returned unserved by the postal authority with a remark, ''not

known''. Hence, he submitted that the petitioner company did not receive the order of cancellation of the plot. The letter dated 6.3.1982 informing

about the resumption of the plot by the third respondent was also not served on the petitioner-company. Mr.Santhanakrishnan submitted that only

in the year 1986. When the petitioner received the letter dated 12.2.1986 requesting the petitioner-company to return the original receipt issued by

the third respondent for the refund of the amount paid by the petitioner, the petitioner became aware of the order of cancellation as well as the

resumption of the plot by the respondents. Mr. Santhanakrishnan submitted that in Plastubes Represented by its partner, S. V.S. Ratnam v. The

Tamil Nadu Small Industries Corporation, 1987 (100) L.W. 13 this Court has held that non-compliance of the terms regarding the non-

construction of the building in the plot allotted to it, cannot be a ground for cancellation of the allotment. According to Mr. Santhanakrishnan, the

cancellation is arbitrary and is liable to be set aside. Mr. Santhanakrishnan placed reliance on a decision of Calcutta High Court in Orient Paper

Mills Vs. Union of India (UOI) and Others, and submitted that the delay of four years in approaching this Court is not fatal and for that reason the

petition cannot be thrown out where the petitioner is questioning the jurisdiction of the third respondent to order the cancellation of the allotment

without notice. Learned counsel for the petitioner also placed reliance on another decision of this Court in The Secretary to Government, Housing

and Urban Development Department, Madras and others etc. Vs. Ammani and etc. etc., wherein this Court has taken a view that an opportunity

must be offered by the Housing Board before the cancellation of the allotment, and if no opportunity was given before the cancellation of the

allotment, the cancellation of allotment would be arbitrary. Mr. Santhanakrishnan, therefore, submitted that letter dated 3.8.1974 issued by the first

respondent, and letters dated 30.1.1980 and 22.10.1980 both issued by the third respondent clearly establish that the respondents were aware of

the new address of the petitioner and in spite of their knowledge of the new address, the third respondent has forwarded the order cancelling the

allotment to the old address of the petitioner, and hence, the order of cancellation which was not served on the petitioner is illegal and is liable to be

set aside.

Mrs. Prabha Sridevan, learned counsel for the third respondent submitted that the possession of the plot in question was handed over to the

petitioner-company as early as on 25.3.1972, and necessary building plans were approved on 20.7.1973 by the Director of Industries and

Commerce. The petitioner-company, even after a decade, had not commenced the construction of the industrial unit and started the industrial

production. The petitioner-company was informed about the breach of conditions of the allotment by letters dated 24.10.1972, 25.4.1974,

3.8.1974, 6.11.1975 and 10.2.1976. In all these letters, it has been stated that the petitioner-company has not commenced the construction work

and if the construction work was not commenced, the allotment order would be cancelled and possession of the land would also be resumed and

the petitioner- company inspite of several letters from the respondents, had not commenced the construction work in the plot allotted to it. Mrs.

Prabha Sridevan submitted that non-utilisation of the financial facility by the petitioner-company would not be a sufficient ground for the non-

commencement of the work. Learned counsel submitted that no doubt the petitioner-company was making maintenance charges and might have

paid urban land tax, but that would not absolve of its default in non-commencement of the construction work within the time stipulated under the

agreement. Learned counsel, therefore, submitted that there has been a breach of conditions of the allotment and the petitioner has done nothing till

the date of cancellation of the allotment to commence the construction work. Learned counsel further submitted that 14 years have since passed

from the cancellation of the allotment and during this period, the plot has also been allotted to the third parties who have commenced the

construction work and started industrial production. The petitioner has no excuse for the default committed and it will serve no purpose if the order

is set aside and the matter is remitted to the third respondent for fresh consideration. Mrs. Prabha Sridevan also submitted that the writ petition is

liable to be dismissed for the laches on the part of the petitioner.

I have already stated the facts in detail. The petitioner-company was allotted the plot in the year 1972, and the necessary sanction for the

construction of the building was given by the Director of Industries and Commerce by a letter dated 20.7.1973. The petitioner company should

have obtained building plan approved within six months from the date of taking over possession of the plot and it should have constructed and

completed the building and also commenced the production within six months from the date on which the approval of the plan was accorded as

per the conditions imposed in the allotment order and in the assignment deed executed in favour of the petitioner company. The petitioner company

kept quiet even after several reminders both by the first respondent and second respondent. The plan was approved, but nothing further happened.

The petitioner did not commence the construction of the building nor it commenced the production within six months from the date on which the

plan was approved. It is essential to note that the plot is situate an industrial area and the plot was allotted not for keeping the plot in an idle

condition, but it should be fully utilised for the production of the items for which the plot was allowed in favour of the petitioner-company. As a

matter of fact, the Managing Director in the letter of allotment has clearly stated that the petitioner company carries on business in the manufacture

and sale of flavouring essences, cloudings and headings, food colours, spice extracts oils and oleoresine, aromatic and fine chemicals and esters.

The plot was allotted for the construction of industrial unit for the manufacture of the said items. The petitioner company has done nothing in

furtherance of the letter of allotment or the deed of assignment that was granted in favour of the petitioner-company. In otherwords, the petitioner-

company had violated the terms and conditions on which the allotment of plot was made in favour of the petitioner- company. As seen earlier,

several letters have been issued in favour of the petitioner company about its need to commence the construction activities and commence the

production within the time stipulated in the deed of assignment. The petitioner company kept quiet and the letter of cancellation was then issued by

the third respondent. No doubt, there is a lapse on the part of the third respondent in issuing the letter of cancellation to the petitioner company to

the old address. But, that lapse cannot avail or help the petitioner company as it admittedly had violated the terms and conditions. Further, fourteen

years have since passed after the cancellation of the allotment of the plot in favour of the petitioner-company. In the meantime, the third respondent

had resumed possession of the plot and allotted the plot to third parties. On the basis of the allotment of the plot, the possession of the plot was

also given to the third parties and the necessary sale deeds have also been executed in favour of the third parties. The orders of allotment in two

cases were issued on 6.4:1983 and 29.11.1983, and the possession of the plot was handed over on 27.1.1984 and 1.12.1983, even before the

filing of the writ petition. It is only in the third allotment, the order of allotment was issued on 26.6.1989 during the pendency of the writ petition.

When the petitioner had no defence for the violation of the terms and conditions of the allotment of the plot, I am of the opinion that it will not be in

the interest if the order of the cancellation of allotment is now set aside and the respondents are directed to serve the order of cancellation of the

allotment. Even if the order is served on the petitioner, the petitioner would have no defence for the alleged violation regarding the non-

commencement of the construction and the non-commencement of the production within the period stipulated in the date of assignment. It is

essential to bear in mind that the order of cancellation was issued after prior notices to the petitioner-company. The petitioner- company has not

denied the receipt of the notices, but on the other hand, it admitted the receipt of the same, and the only reason given was that the Bank had

sanctioned the loan, but it was not able to avail the loan facilities because the assignment deed was not forwarded by the second respondent. The

petitioner strangely kept quiet even after it sent its letter in the year 1976 pleading its liability to commence the construction because of non-

forwarding of the assignment deed by the second respondent. It is also quite strange to see that even after the cancellation of the plot in 1982, the

petitioner kept quiet till the year 1986, and in the mean time, the plot was allotted to third parties. The inactivity of the petitioner shows that the

petitioner has not even cared to see or visit the plot even after the year 1982 to appraise itself as to what happened to the plot in question, Hence,

it will be an empty formality if the impugned order is quashed, the matter is remitted to the third respondent for fresh consideration. That apart, as

already seen, the third parties rights have intervened from the date of cancellation of the allotment of the plot that was granted in favour of the

petitioner-company. It has been stated in the counter-affidavit that the third parties have already commenced the production in the plot allotted in

their favour.

The decisions relied upon by the learned counsel for the petitioner have no application to the facts of the case. The decision in Plastubes

Represented by its partner, S.V.S. Ratnam v. The Tamil Nadu Small Industries Corporation, 1987 (100) L.W. 13 is of much assistance to the

petitioner because, on the facts of the case, it was found that the sanctioned plan for the construction was not obtained in view of the provisions of

the Urban Land Ceiling Act and in the absence of the sanctioned plan, the petitioner in that case was unable to commence the construction. In that

factual situation, this Court held that it is reasonable to presume that both parties must have been conscious of the delay on the part of the petitioner

in obtaining such sanction from several statutory authorities. On the facts of the instant case, it is found that the necessary sanctioned plan was

granted in favour of the petitioner company on 20.7.1973, and even after several reminders both by the first and second respondents, the

petitioner was maintaining stoic silence. The other decision that has been relied on is a decision in The Secretary to Government, Housing and

Urban Development Department, Madras and others etc. Vs. Ammani and etc. etc., wherein this Court held that the powers of the State

Government in cancelling the allotment cannot be exercised arbitrarily and the affected person should be given an opportunity to state his objection.

On the facts of the case, it is found that the petitioner company was given several opportunities before the letter of cancellation was issued. Hence,

when several opportunities were afforded to the petitioner and in spite of the several notices the petitioner kept quiet, and it is not open to the

petitioner company to complain about the violation of the principles of natural justice.

The next decision that has been relied upon by the learned counsel for the petitioner is a decision of Calcutta High Court in Orient Paper Mills

Vs. Union of India (UOI) and Others, , and the Calcutta High Court held that the delay of four years in preferring the writ petition is not fatal, and

the petition cannot be thrown out where the jurisdiction of the Commission to inquire into the matter has been challenged in the writ petition. The

decision of the Calcutta High Court also does not help the petitioner, because, it is not a case where the rights of the third party have intervened

before the petitioner approached the Court for the redressal of the grievances. Though the petitioner has challenged the jurisdiction of the

respondents in taking proceedings without service of the order of cancellation of the allotment of the plot, it is not a case of lack of jurisdiction on

the part of the respondents. The respondents, as already seen, have issued several show-cause notices to the petitioner bringing to the attention the

non-compliance of the terms of the allotment and in spite of several opportunities granted to the petitioner, the petitioner has not remedied the

breach. It is actually a case of a party to the dispute who lost his opportunity to remedy the breach through his own default and it is not open to him

to complain that he has been the victim of procedural impropriety of natural justice that has been denied to him vide A1 Mehdawi v. Secretary of

State for the Home Department, 1990 1 A.C. 876. Further, the plea that the petitioner was not afforded or given yet another opportunity before

passing of the final order of cancellation would not render the order void, when sufficient opportunities were given earlier. On the other hand, the

decision relied upon by the learned counsel for the third respondent of the Rajasthan High Court in the case of Mohd. Usman Vs. Union of India

(UOI) and Others, , is relevant. In that case, it was held that the illegality committed by any party should not be allowed to perpetuate and the relief

should not be denied only on the ground that there is delay in filing the writ petition. The Rajasthan High Court further held that during the period of

delay, if any, interest accrues in favour of the third party or if any third party gets vested rights then the delay cannot be condoned, as it adversely

affects the party in whose favour the rights accrue. In the instant case, it is clear that third party rights have intervened before the petitioner

approached this Court. Hence, even if a fresh opportunity is now afforded, on the ground that the letter of cancellation was not served on the

petitioner- company, the petitioner company would have no defence for its violation of the stipulations contained in the terms of the allotment or in

the terms of the agreement. Hence, it will be an useless formality if the order of cancellation is set aside and the matter is remitted to the third

respondent for fresh hearing.

The House of Lords in Mattock v. Aberdeen 1971 2 All E.R.1278 observed as follows:-

..it was argued that to have afforded a hearing to the appellant before dismissing him would have been a useless formality because whatever he

might have said could have made no difference. If that could be clearly demonstrated it might be a good answer"". .. (by Lord Reid).

Lord Guest All.ER. at p.1291 not only agreed with the above statement but also applied the test of prejudice. He observed:-

A great many arguments might have been put forward but if none of them had any chance of success then I can see no good reason why the

respondents should have given the appellant a hearing, nor can I see that he was prejudiced in any way.

Lord Wilberforce too stated the principle in the following words:- (All. ER. at p. 1294)

The appellant has first to show that this position was such that he had, in principle, a right to make representations before a decision against him

was taken. But to show this is not necessarily enough, unless he can also show that if admitted to state his case he had a case of substance to

make. A breach of procedure, whether called a failure of natural justice, or an essential administrative fault, cannot give him a remedy in the

Courts, unless behind it there is something of substance which has been lost by the failure. The court docs not act in vain"".

The above decision of the House of Lords was quoted with approval by the Supreme Court in State Bank of Patiala and others Vs. S.K. Sharma,

. Respectfully following the decision of the Supreme Court, I hold that it will be an empty formality if the letter of cancellation is set aside and the

matter is remitted to the third respondent. If the order is set aside and the matter is remitted, it will generate multiple legal proceedings and further

litigations affecting the rights and interest of third parties. On the facts of the case, I must observe that when the third respondent was aware of the

new address of the petitioner- company, it should have taken all possible earnest steps to serve the order of cancellation on the petitioner-

company, particularly, when the impugned order was returned by the postal authorities with the remark, ''not known''. Though the act of the third

respondent in not serving the order of cancellation falls very much short of the standard that is expected of an authority in cancelling the allotment,

on the facts of the case, I am upholding the impugned order on the ground of laches on the part of the petitioner in approaching this Court after the

intervention of the rights of the third parties, and due to the default committed by the petitioner. In view of the same, the writ petition is liable to be

dismissed and it is accordingly, dismissed. There will be no order as to costs.