Madhya Pradesh HC Quashes Notice Issued For Cancellation Of Lease To Establish Industry As Encroachment On Part Of Land Had Not Been Removed
The Madhya Pradesh High Court has held that the State Authorities can’t insist upon the Indore International Toy Cluster Association to commence the establishment of the industry over the available land granted on lease, when the vacant possession of the entire allotted land has not been delivered to them.
The High Court was considering a petition filed under Article 226 of the Constitution against the order passed by the second respondent- District Trade and Industries Centre (DTIC), whereby the members of the Association had been directed to establish the industry over the land leased to them stating that otherwise proceedings shall be instituted against them for cancellation of the lease deed.
The Single-Judge Bench of Justice Pranay Verma held, “For their own fault in failing to deliver vacant possession of the entire allotted land to the members of the petitioner, the respondents cannot insist upon them to commence establishment of the industry over the available land.”
Advocate Rishi Tiwari represented the Petitioner while Government Advocate Mukesh Parwal represented the Respondents.
The petitioner- Indore International Toy Cluster Association brought to the Court’s attention that it is a special purpose vehicle registered under the Companies Act and in the year 2009, Department of Commerce, Industry and Employment granted approval for transfer of land in favor of the Industries Department. The land was transferred in favor of the District Trade and Industries Centre and the State Government in its Micro, Small and Medium Enterprises Department passed an order for allotment of plots comprised in the land to 20 industries recommended by the petitioner.
Thereafter, the General Manager, Trade and Industries informed the Chief Executive Officer that removal of encroachment from subject land was still in process. Considering this, proceedings for removal of encroachment were initiated and eviction orders were passed. However, DTIC issued the impugned notices to the members of petitioner directing them to take necessary steps for establishment of industries stating that else the allotment would be canceled.
It was the case of the petitioner that the impugned notices had been issued despite encroachment over the allotted land and the industry couldn’t be developed unless the encroachment is removed. On the contrary, the Respondent contended that the petitioner ought to have commenced establishment of industries over the area already available with them.
The Bench took note of the fact that the possession of the entire land allotted to the members of the petitioner had not been delivered to them. A considerable portion of the land was under encroachment.
“It was the duty of the respondents themselves to have allotted encroachment free land for the purpose of establishment of industry”, the Bench said while also adding, “An industry can be commenced to be established only after obtaining possession of the entire vacant land. For their own fault in failing to deliver vacant possession of the entire allotted land to the members of the petitioner, the respondents cannot insist upon them to commence establishment of the industry over the available land.”
Reference was also made to Rule 15 of M.S.M.E. Rules, 2021, which states that lessee has to obtain possession of the land/building and implement the project in a specified time period. The Bench opined, “If the respondents themselves have not made possession of the land available to the members of petitioner, they cannot charge them with having failed to commence implementation of the project within the specified time period.”
Noting that considerable part of the leased land is still under encroachment and proceedings for their removal are under process, the Bench said, “Till vacant possession of the leased land is not delivered to the members of the petitioner, the respondents are legally unjustified in issuing the impugned notices (Annexure P/1) to the members of the petitioner.”
Quashing the impugned notices, the Bench allowed the petition.
Cause Title: Indore International Toy Cluster Association vs The State of Madhya Pradesh & Ors [Neutral Citation: 2024:MPHC-IND:28935]
Appearance:
Petitioner: Advocate Rishi Tiwari
Respondents: Government Advocate Mukesh Parwal
