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TMI Blog2021 (9) TMI 1441X X X X Extracts X X X X X X X X Extracts X X X X ..... above writ petitions have been filed by the respective petitioners-Industrial Corporations challenging the cancellation of allotment of land standing in their favour and withdrawal of No Objection Certificate by the first respondent, SIPCOT Limited. 2. Ongoing through the materials available on record, this court finds the following factual matrix involved in the writ petitions. 3. The State Industries Promotion Corporation of Tamil Nadu Limited (in short, SIPCOT), was established by the Government of Tamil Nadu in the year 1971 under the Companies Act, 1956 with an object of promoting industrial development in the State and thereby facilitating the establishment of balanced growth and dispersal of industries in the State. Therefore, the SIPCOT had acquired lands from various land owners by following due process of law and after making payment of compensation for the sole purpose of promoting industrial development in the State. In such a process, the writ petitioners got allotment of lands on lease for a period of 99 years in their favour for setting up industries of their own. The petitioners appear to have paid the lease amount fixed by the SIPCOT, which is two fold viz., (i) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or its Agents have entered into a contract with the petitioners by way of lease deeds, and they are not governed by the Constitutional provisions, but, by a legally valid contract. In this regard, he relies upon the following decisions:- i) Radhakrishna Agarwal and ors. vs. State of Bihar and ors. ((1977) 3 SCC 457) ii) Kerala State Electricity Board and ors. vs. Kurien E.Kalathil and Ors. ((2000) 6 SCC 293) iii) Karnataka State Industrial Investment and Development Corporation Ltd. v. Cavalet India Ltd. and ors ((2005) 4 SCC 456) iv) Ramakrishna Engineering Company v. The State Industries Promotion Corporation of Tamil Nadu and Ors. (W.P.No.2022 of 2009) v) Tech Mahindra Limited v. The State Industries Promotion Corporation of Tamil Nadu Ltd. (W.P.No.6872 of 2009) vi) Punjab Financial Corporation v. Surya Auto Industries ((2009) 1 SCC 297) vii) M.D., H.S.I.D.C. and Ors. vs. Hari Om Enterprises and Ors. ((2009) 16 SCC 208) viii) The Rajasthan State Industrial Development and Investment Corporation and Ors. v. Diamond and Gem Development Corporation Ltd. and Ors. ((2013) 5 SCC 470) ix) Dalip Singh and Ors. v. State of Haryana and Ors. ((2019) 11 SCC 422). 7. The l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the SIPCOT. 10. On perusal of the materials available on record and on hearing the learned counsel for the parties, this court finds that the petitioners have got their allotment on various dates for different sizes of plots and a meagre development alone had taken place in some of the petitioners- cases. Though the default clause in the allotment order is in favour of the SIPCOT for cancelling the allotment and withdrawing the No Objection Certificates in the event of non implementation of the project within the stipulated period of 30 months, the SIPCOT has come forward with a scheme for entertaining the same petitioners/industrial corporations to retain the land and implement the project rather than cancelling the allotment and forfeiting the amount paid by the petitioners, however, subject to payment of a penalty in proportion to the present value of the land and in consonance with the extent of non-implementation of the project. 11. Based on such offer made by the SIPCOT, the details of the petitioners/industrial corporations are tabulated as under for ready reference:- W.P.No. Plot/ Extent Cost (in lakhs) Date of allotment Status Diff. cost (in lakhs) Penalty pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 63 lakhs. This issue has been addressed by the learned Government Advocate, who would submit that the SIPCOT is willing to revoke the order of cancellation of allotment subject to payment of differential cost amounting to Rs.63.83 lakhs together with maintenance charges arrears of Rs.5,71,023/- totalling a sum of Rs.69,08,523/-. 14. Another contention has been raised by the learned counsel for the same petitioner that the SIPCOT had issued a letter dated 2.2.2021 directing the petitioner to withdraw the pending writ petition for the purpose of issuance of NOC for availing credit facility from TIIC and this has been explained by the learned Advocate General that the said condition was included in the letter of SIPCOT only to prevent the petitioner from procrastinating the development of the land. Therefore, the learned Advocate General submitted that the penalty proposed as against the petitioner is 100% differential cost. 15. Sofar as the M/s.Milano International P. Ltd., petitioner in W.P.No.15052 of 2020, the learned counsel for the petitioner submitted that they had not been issued NOC for taking further course of action that there is differential treatment of parties by SIPCO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n putforth to treat the year of allotment as 2018 whereas the date of allotment is 14.2.2008 in the case of M/s.Agranee Auto Ancillaries Private Limited, petitioner in W.P.No.16596 of 2020 as they could obtain DTCP approval only in the year 2018. 20. In this regard, the learned Advocate General would submit that the land was originally allotted to the petitioner on 14.2.2008, when it was known as M/s.Horizon Warehousing and Apparels and since the allottee had not implemented the project, they were permitted for setting up general category industry as per the decision of the Board dated 26.6.2013 and Government Order No.G.O.(Ms)No.6, Industries (MIG.1) Department dated 10.1.2014 and as requested by the allottee, approval for additional line of activity was accorded on 7.7.2014 with a condition to implement the project within two years and subsequently, based on the request of the allottee, the name change was also accorded on 12.10.2015 once again reiterating to implement the project within two years fro 7.7.2014, however, the petitioner did not show any development and therefore, despite the sufficient opportunities provided, the petitioner had not shown any development, they cann ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een provided and amenities/infrastructure not contemplated under the agreement cannot be sought to be provided by SIPCOT. He would also submit that sofar as the apparel park is concerned, all the allottees were treated uniformly and in the case of footwear component park, on par with permission already given to the allottees of apparel park (as per the decision of the Board dated 26.6.2013 and Government Order No.G.O.(Ms) No.6, Industries (MIG.1) Department dated 10.1.2014 and also due to poor response, the Board of SIPCOT, at its meeting held on 2.12.2020 permitted the allottees of Footwear component part to set up general category industries and to implement the project within 36 months, and therefore, the SIPCOT has taken into consideration the plight of the industries and extended the relief uniformly in the said park. The learned Advocate General has also brought to the notice of the court that the petitioner was duly served with the show cause notice dated 14.2.2020 and it has been acknowledged by the petitioner on 21.2.2021, by pointing out the postal acknowledgement card. Therefore, the learned Advocate General submitted that the penalty proposed as against the petitioner i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tial cost. 27. M/s.6th Sense Infrastructure Limited, petitioner in W.P.No.3202 of 2021 has already been categorized by SIPCOT as 5% utilized industry, entitled to 50% reduction in differential cost. During the course of arguments, a suggestion was putforth to the learned counsel appearing for the petitioner as to the possibility of surrendering of land to the extent that would bring the petitioner within the category of 40% usage of land thus reducing the differential cost to 20% of the original demand. 28. In this regard, the learned Advocate General would clarify that the petitioner will have to surrender 5 acres out of the total allotted land and pay a differential cost of 6.73 crores and undertake to commence production within 12 months and as per the prevailing policy of SIPCOT, the plot cost remitted by the allottee for the extent surrendered will be refunded after deducting 1% of the amount remitted for that extent. Therefore, the learned Advocate General submitted that the penalty proposed as against the petitioner is currently 50% differential cost and it could be reduced to 20% on surrender of land as opted by the petitioner. 29. Sofar as M/s.JNS Instruments Limited, p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of the ground that they had submitted a letter on 9.2.2013, after four years of allotment and having waited for such abnormal period of about eight years. Therefore, the learned Advocate General submitted that the penalty proposed as against the petitioner is 100% differential cost. 33. Sofar as M/s.Sri.Balaji Enterprises, petitioner in W.P.No.5857 of 2021 is concerned, the learned Advocate General would submit that on an inspection carried out by the Project Officer, it was found that the Plot No.C2/1N measuring 2.25 acres allotted to the petitioner was sub divided into three parts as under:- i) Area I measuring 794 sq.m (0.196 acres), the allottee had constructed building measuring 669 sq.m (0.16 acre) and sub leased the building to the neighbourhood M/s.SGR (777) Foods without getting permission of SIPCOT and therefore, without any production activity on the part of the petitioner, the building is used only for godown purpose. ii) Area II viz., 941.5 sq.m (0.23 acre) is under encroachment of another neighbourhood Company M/s.Srivari Enterprises by putting up a construction with compound wall. iii) Area III measuring 7292.21 sq.m (1.8 acres) is left vacant without any co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ermined as about 25% and as on date, since the petitioner have not commenced the production activity, they have already proposed to impose only 20% of the differential cost. Therefore, the learned Advocate General submitted that the penalty proposed as against the petitioner is 20% differential cost. 38. Now, the question that has to be decided is whether the scheme proposed by SIPCOT in these cases are proper and acceptable or it requires any interference. 39. Admittedly, an allotment of land by the Government or its Agency on lease would be on affordable cost, when it is compared with any private land taken on lease and it will be the same in case of outright purchase also. Such being the case, the petitioners cannot expect the SIPCOT, a Government Agency to leave the lands in the hands of some persons and wait endlessly for the petitioners to implement the projects. 40. The allotment of lands by SIPCOT is not a sale, but, only a lease for ninety nine years. It comes with a default clause of cancellation of lease which indirectly intends for industrial development in the State within a reasonable period and the resultant revenue therefrom. One cannot dispute that the inaction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioners have to opt either to surrender the lands allotted to them and get refund of the amount paid by them after deducting the amount deductible as per the prevailing policy of SIPCOT; (OR) ii) if the petitioners are willing to retain the lands allotted to them despite such a long delay in implementing the project, they shall make payment of the penalty proposed by SIPCOT as indicated in the above mentioned table in 12 equal monthly instalments commencing from the 1st of the English Calendar month from the date of this order and also undertake to implement the project immediately and commence the commercial production within such period of 12 months; iii) in case the petitioners fails to adhere to the above condition of making regular payment of monthly instalment of penalty or implementing the project within the stipulated period of 12 months, the SIPCOT will have every right to cancel the allotment without any reference to the court; iv) in the event of surrendering of a part of unused land, the petitioners will have to pay the penalty, if any, after adjusting the amount payable to the petitioners as per the prevailing policy of SIPCOT and they are also bound by the above ..... 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