Zenit
Mataplast P. Ltd. Vs. State of Maharashtra & Ors. [2009] INSC 1572 (11
September 2009)
Judgment
THE
SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL APPEAL NO. OF 2009
(Arising out of SLP (Civil) No. 18934 of 2008) Zenit Mataplast P. Ltd.
....Appellant Versus State of Maharashtra and Ors. ....Respondent
Dr. B.S.
Chauhan, J.
1.
Leave granted.
2.
This appeal has been filed against the order of the Bombay High
Court dated 5.2.2008 rejecting the application for interim relief while 2
admitting the Writ Petition No. 7245/2006 and expediting its hearing against
the allotment of land by the respondent No.2 in favour of respondents nos.4 and
5.
3.
The facts and circumstances giving rise to this case are that
appellant, a Private Ltd. Company, incorporated under the provisions of
Companies' Act 1956, is indulged in manufacturing of press components, moulded
components, soft luggage, moulded luggage and other travel goods, tools, moulds
jigs, dies fixtures and other engineering goods and carrying its business on a
land measuring 4050 sq. meters on plot no.F-18 in the Satpur industrial Estate,
Nasik. The appellant submitted an application dated 30.11.2005 (Annexure P-3)
for allotment of 8000 sq. yards land from the adjacent vacant land on a
prescribed form complying with other requirements. The said application was
rejected by the respondent no.2, the Maharashtra Industrial Development
Corporation (hereinafter referred to as `Corporation'), a Maharashtra
Government Undertaking constituted under the provisions of Maharashtra
Industrial Development Act, 1961 (for short 1961 Act). In fact, the Corporation
has powers and duties to make allotment of land for industrial purposes. It
appears that vide letter dated 14.3.2005 to the Hon'ble Chief Minister of
Maharashtra, the respondent 3 no.4, M/s. Mahendra & Mahendra Ltd., a
leading industrial Company, asked for providing pending dues of incentives
which were extended to it earlier.
In the
said letter it was also pointed out that the respondent no.4 has entered into a
collaboration with automobile company Renault and intended to set up a joint
venture for manufacturing of car, "The Logan" into India and the said
respondent was locating the project at Nasik (Maharashtra) or Zahirabad (Andhra
Pradesh) or at any other new place in Uttranchal. In the said letter, a demand
for land measuring 5 to 8 acres for parking facilities at Satpur Industrial
Estate, Nasik and 3 to 4 acres parking plot outside the existing factory gate
at Nasik was also included. The Government of Maharashtra vide letter dated
10.6.2005 promised that the respondent no. 2 - Corporation would provide
maximum possible vacant land in the existing area at the applicable rates and
the Corporation would further facilitate acquisition of additional land
identified by the Corporation for its project as well as for locating the
cluster of industrial units (Annexure R.4/R.5). The Government of Maharashtra
accorded the status of "Mega Project" to the forthcoming project of
respondent no. 4 known as `Logan Car Project' at Nasik vide letter dated
11.11.2005 (Annexure R.4/R.6). Respondent no. 4 submitted an informal
application dated 23.11.2005 to the Respondent No. 2 to make the allotment of
designated Open Space, Plot Nos. 8 and 9, in its 4 favour. The user of land was
changed from open space to Industrial Area vide resolution dated 10.2.2006 and
plot was renumbered as 126, instead of Open Space No.9, by the
respondent-corporation. The formal application was submitted for that purpose
by the respondent no. 4 on 1.3.2006 to the respondent no. 2 (Annexure R.4/R.9).
Respondent No. 2, vide letter dated 27.3.2006 (Annexure R.4/R.10), allotted the
land measuring 17 acres in favour of the respondent no. 4 for a total premium
of 7,51,14,600/- after changing the user of the land from vacant space to
industrial. On the same date, namely, 27.3.2006, the respondent no. 4 was put
in possession of the said land and an agreement for licence/lease was executed
between respondent no. 2 and respondent no. 4 on 3.7.2006. A part of open space
was also converted as a "parking space" and it was allotted in favour
of respondent no.5 for parking of vehicles.
4.
The appellant made various representations to the Respondent No.
2, Corporation particularly, dated 15.3.2006, 3.4.2006, 25.8.2006, 3.10.2006
and 10.10.2006, pointing out that rejection of its application and allotment of
huge area of land in favour of respondent Nos .4 and 5 was discriminatory and
violative of laws and particularly the statutory requirement which provided for
allotment of land to the neighbouring unit holders. The 5 appellant asked that
it may be allotted some part of the remaining land from the designated vacant
land whose land user has been converted from open space to industrial Area. As
no order was passed on its representations, the appellant filed the writ
petition in October 2006 before the High Court.
However,
the Court admitted the writ petition, expedited the hearing of the writ
petition but rejected the application for interim relief. Hence, this appeal.
5.
Shri Dushyant Dave, learned senior counsel appearing for the
appellant has submitted that the application of the appellant has been rejected
without assigning any reason whatsoever and probably the reason may be that on
the date of passing the order the land was merely a designated vacant land and
not meant for industrial purpose.
However,
in order to favour the respondent No.4, a big industrial house, the State
authorities passed the directions to the respondent- Corporation to allot open
space after change of user. Application of respondent no.4 was processed in
haste and all consequential orders have been passed within a very short span of
time. Land has been allotted to Respondent No.4 on the direction of the higher
authorities, which is not permissible in law. Thus, such a course is violative
of 6 Article 14 of the Constitution of India. The writ petition filed by the
appellant would become infructuous, if the respondent no.4 is permitted to
develop the allotted land. The High Court ought to have granted the interim
relief. Therefore, the appeal deserves to be allowed.
6.
On the contrary, Shri Bhaskar P. Gupta, learned senior counsel
appearing for respondent No.4 has submitted that there had been large number of
offers by various States to Respondent No.4 to set up the industry for the
purpose of production of cars/jeeps and various incentives were offered,
particularly, by the States of Madhya Pradesh and Andhra Pradesh. However, as
it has several units in Maharashtra, the respondent No.4 made application to
the Hon'ble the Chief Minister for allotment of land and after considering the
facts, it was decided to make the allotment of land at Satpur Industrial Estate
Nasik, as the appellant was having about four other units in close vicinity
thereof. It is also submitted by Shri Gupta that no law has been violated and
the authorities proceeded strictly in conformity with the statutory
requirements. Respondent no.4 has already invested a huge amount in the
project. Appellant did not approach the High 7 Court promptly. Thus, the High
Court has rightly refused to grant the interim relief. Impugned order does not
require any interference.
7.
Shri Shyam Divan, learned senior counsel appearing for the
respondent-Corporation has submitted that when the application of the appellant
was rejected, the land in dispute was a designated vacant land and therefore,
it could not be allotted for any industrial purpose. The land was allotted to
the respondent no.4 after change of user, considering the requirement of
respondent No.4 and taking into consideration various other factors,
particularly, the development of the city keeping in mind that the industry of
respondent No.4 would provide job to large number of persons and the people of
the local area would be benefitted otherwise also.
Appellant
cannot be heard complaining against the allotment in dispute, as it is in consonance
with all the statutory requirements. Interim relief could not be granted at a
belated stage as the appellant had not filed the petition before the High Court
immediately after allotment of the land. Thus, the interim application has
rightly been rejected by the High Court.. The appeal has no merit, thus liable
to be dismissed.
8.
We have considered the rival submissions made by the learned
counsel for the parties and perused the record.
9.
It is evident from the site plan that a large number of plots had
been carved out from the huge area of land and in between, an open vacant space
being No.9 was left. It is also evident from the said site plan that after plot
Nos. F-13, F-14 and F-15, there was a vacant space and then, plot Nos. F- 18,
F-19 etc. Thus, there must have been plot Nos. F-16 and F-17 between plot
nos.F-15 and F-18, at one stage. The land in dispute was adjacent to said two
plots also. The appellant had demanded the land from Plot Nos. F- 16 and F-17.
However, there is nothing on record to show as to how these two plots bearing
Nos. F-16 and F-17 could disappear from the site plan and become part of Open
Space No.9.
10.
Application of the appellant has been rejected vide order dated
19.12.2005 without assigning any reason and it cannot be said as to whether the
application was rejected merely on the ground that the land in dispute, at that
time was a designated vacant land and not meant for the industrial purpose,
thus, its application could not be entertained. On the contrary, admittedly in
the year 2004, a part Plot No. F-17 (vacant space) measuring 9 about 500
Sq.Mtrs. had been allotted to BSNL without the change of the user. No
explanation could be furnished by the respondents as to under what
circumstances such an allotment was permissible.
11.
So far as the allotment to respondent No.4 is concerned, this had
been under the directions of the State Government to the Corporation. The
Corporation changed the land user and made the allotment of land to the extent
of 17 acres and the possession had been handed over immediately.
The
license deed had been executed and all the proceedings had been taken in close
proximity of time. Letter written by respondent No.4 dated 14th March, 2005
(Annexure R4/4) to the Hon'ble Chief Minister suggests that some other States
had offered the respondent No.4 various incentives for establishing an
industrial unit. It is evident from the letter dated 10th June, 2005 (Annexure
R4/5) written by the Secretary to the Ministry of Industries, Energy and Labour
Department, Maharashtra to the Respondent No.4 that the State Government was
willing to make various concessions and provide incentives including the
allotment of land at Nasik for establishment of LOGAN cars project.
12.
The allotment of land is governed by the provisions of 1961 Act,
Section 14 of which specifies the functions and powers of the Corporation and
the Corporation has, in general power to promote and assist in the rapid and
orderly establishment growth and development of industries in the State of
Maharashtra. Section 15 thereof provides for general power of the Corporation
which includes the power to acquire and hold the land and to dispose of the
same by executing the lease, sale deeds, exchange or otherwise transfer any
property. Section 31 of the 1961 Act, provides for acquisition and disposal of
the land.
13.
The Maharashtra Industrial Development Corporation (Disposal of
Land) Regulations, 1975 have been framed to give effect to the provisions of
1961 Act. Regulation 4 provides for disposal of the land covered by the lay out
prepared by the Corporation by public auction or by entertaining individual
applications. Regulation 6 provides for a particular form to be filled up where
the allotment is to be made by applications and deposit of process fee etc.
Regulation 10 provides that the Land Committee shall consider the application
and pass appropriate orders for allotment of land.
14.
Government of Maharashtra had issued a Circular dated 25th
January, 1994 regarding fixation of rate of industrial area in which allotment
of plot has to be made by inviting tenders. Clause 4 thereof provided for
"preferential right" of the unit holder for having allotment of
"neighbouring land" for the purpose of factory expansion. It also
provides that where there are more than one application for allotment, the plot
may be disposed of by adopting the tender process.
15.
There had been claims and counter claims by the parties. The
appellant claimed that it had preferential right for allotment of the part of
the vacant land for expansion of its factory. However, its application has been
rejected without giving any reason whatsoever, though the law requires giving
the reasons for passing any order and the allotment in favour of respondent
No.4 was passed in undue haste showing favouritism being a big industrial unit.
The right of equality guaranteed under Article 14 of the Constitution stood
violated. The application of the appellant had been made prior to the
application made by respondent No.4. The respondent No.4 instead of making
application to the Corporation started negotiations with the Government
directly for allotment of land merely by writing a letter in June, 2005 and on
10th June, 2005 an understanding was arrived in between 12 the Government of
Maharashtra and respondent No.4 of commissioning of the Project at Nasik. The
informal application was filed by respondent No.4 on 23.11.2005 for making
allotment of land from Open Space No.9. The application of respondent No.4 was
processed by Land Allotment Committee on 22nd December, 2005, wherein the
observation was made that it was an important industry for the city land and
its expansion would greatly benefit the industrial growth in Nasik.
16.
The user of land in Open Space No.9 was converted from Open Space
to Industrial Area vide order/resolution dated 10th February, 2006 and it was
re-numbered as Plot No.126. The first formal application was submitted by the
respondent no.4 to the respondent-corporation only on 1.3.2006 and the
allotment was made in favour of the respondent No.4 on 27.3.2006. Respondent
no.4 was put in possession on 27.3.2006 itself. The license agreement was
executed by the respondent corporation in favour of respondent no.4 on July 3,
2006. The demand of respondent No.4 had not been to the extent the area had
been allotted.
In view
of the above facts and circumstances, the sole question has arisen as to
whether the High Court was justified in not granting the interim relief in
favour of the appellant? 13
17.
Records reveal that the appellant had been bargaining with the
respondent-Corporation making application after application for allotment of
land from remaining vacant area and approached the Court at some belated stage.
Even before the High Court the matter remained pending for long before it was
admitted and the application for interim relief was rejected.
18.
The Regulation 1975 provides for allotment of land by public auction
or by entertaining individual applications. Therefore, the question does arise
as to whether without taking a decision that land is to be settled by
negotiation, the process of auction or calling the tender can be dispensed
with.
19.
In the instant case the appellant had been asking the respondent
no.2 to grant the lease of plot nos.F-16 and F-17, which had earlier not been
the part of the Open Space No.9, on the basis of being contiguous and adjacent
to the appellant's existing factory at plot no.F-18. It has been canvassed on
behalf of the appellant that the action of the respondent no.2 is arbitrary and
unreasonable and not in conformity with the statutory provisions.
20.
Every action of the State or its instrumentalities should not only
be fair, legitimate and above-board but should be without any affection or
aversion. It should neither be suggestive of discrimination nor even 14
apparently give an impression of bias, favouritism and nepotism. The decision
should be made by the application of known principle and rules and in general
such decision should be predictable and the citizen should know where he is,
but if a decision is taken without any principle or without any rule, it is
unpredictable and such a decision is antithesis to the decision taken
Corporation, AIR 1988 SC 157).
21.
In essence, the action/order of the State or State instrumentality
would stand vitiated if it lacks bona fide as it would only be a case of
colourable exercise of power. The Rule of Law is the foundation of a democratic
SC 861, the Apex Court held as under:- "The State is to deny no one
equality before the law........Economic growth and social equity are the two
pillars of our Constitution which are linked to the right of an individual
(right to equal opportunity), rather than in the abstract.......Equality, rule
of law, judicial review and separation of powers form parts of the basic
structure of the Constitution.
Each of
these concepts are intimately connected. There can be no rule of law, if there
is no equality before the law. These would be meaningless if the violation was
not subject to the judicial review."
22.
In a case like this, when the applicant approaches the Court
complaining against the Statutory Authority alleging arbitrariness, bias or
favouritism, the court, being custodian of law, must examine the averments made
in the application to form a tentative opinion as to whether there is any
substance in those allegations. Such a course is also required to be followed
while deciding the application for interim relief.
23.
Interim order is passed on the basis of prima facie findings,
which are tentative. Such order is passed as a temporary arrangement to
preserve the status quo till the matter is decided finally, to ensure that the
matter does not become either infructuous or a fait accompli before the final
hearing. The object of the interlocutory injunction is, to protect the
plaintiff against injury by violation of his right for which he could not be
adequately compensated in damages recoverable in the action if the uncertainty
were resolved in his favour at the trial. (vide Anand Prasad Agarwalla v. State
of Assam vs. Tarkeshwar Prasad & Ors. AIR 2001 SC 2367; and Barak Upatyaka
D.U. Karmachari Sanstha (2009) 5 SCC 694)
24.
Grant of an interim relief in regard to the nature and extent
thereof depends upon the facts and circumstances of each case as no
strait-jacket 16 formula can be laid down. There may be a situation wherein the
defendant/respondent may use the suit property in such a manner that the
situation becomes irretrievable. In such a fact situation, interim relief
should 3275; and Shridevi & Anr. vs. Muralidhar & Anr. (2007) 14 SCC
721.
25.
Grant of temporary injunction, is governed by three basic
principles, i.e. prima facie case; balance of convenience; and irreparable
injury, which are required to be considered in a proper perspective in the
facts and circumstances of a particular case. But it may not be appropriate for
any court to hold a mini trial at the stage of grant of temporary injunction
(Vide Anand Prasad Agarwalla (supra).
SC 3105,
this court observed that the other considerations which ought to weigh with the
Court hearing the application or petition for the grant of injunctions are as
below :
(i)
Extent of damages being an adequate remedy;
(ii)
Protect the plaintiff's interest for violation of his rights though however
having regard to the injury that may be suffered by the defendants by reason
therefor ;
(iii) The
court while dealing with the matter ought not to ignore the factum of strength
of one party's case being stronger than the others;
(iv) No
fixed rules or notions ought to be had in the matter of grant of injunction but
on the facts and circumstances of each case- the relief being kept flexible;
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
The issue is to be looked from the point of view as to whether on
refusal of the injunction the plaintiff would suffer irreparable loss and
injury keeping in view the strength of the parties' case;
27.
Balance of convenience or inconvenience ought to be considered as
an important requirement even if there is a serious question or prima facie
case in support of the grant;
28.
Whether the grant or refusal of injunction will adversely affect
the interest of general public which can or cannot be compensated otherwise."
the Supreme Court explained the scope of aforesaid material circumstances, but
observed as under:- "The phrases `prima facie case', `balance of
convenience' and ` irreparable loss' are not rhetoric phrases for incantation,
but words of width and elasticity, to meet myriad situations presented by man's
ingenuity in given facts and circumstances, but always is hedged with sound
exercise of 18 judicial discretion to meet the ends of justice. The facts rest
eloquent and speak for themselves. It is well nigh impossible to find from
facts prima facie case and balance of convenience."
Hira Lal,
AIR 1962 SC 527 held that the civil court has a power to grant interim
injunction in exercise of its inherent jurisdiction even if the case does not
fall within the ambit of provisions of Order 39 Code of Civil Procedure.
29.
In Deoraj vs. State of Maharashtra & Ors. AIR 2004 SC 1975,
this Court considered a case where the courts below had refused the grant of
interim relief. While dealing with the appeal, the Court observed that
ordinarily in exercise of its jurisdiction under Art.136 of the Constitution,
this Court does not interfere with the orders of interim nature passed by the
High Court. However, this rule of discretion followed in practice is by way of
just self-imposed restriction. An irreparable injury which forcibly tilts the
balance in favour of the applicant, may persuade the Court even to grant an
interim relief though it may amount to granting the final relief itself. The
Court held as under:- "The Court would grant such an interim relief only
if satisfied that withholding of it would prick the conscience of 19 the court
and do violence to the sense of justice, resulting in injustice being
perpetuated throughout the hearing, and at the end the court would not be able
to vindicate the cause of justice."
30.
Such a course is permissible when the case of the applicant is
based on his fundamental rights guaranteed by the Constitution of India. (vide
All India Anna Dravida Munnetra Kazhagam vs. Chief Secretary, Govt. of Tamil
Nadu & Ors. (2009) 5 SCC 452) Environmental Action Group & Ors. (2005)
5 SCC 61, this Court observed as under:- "The courts, however, have to
strike a balance between two extreme positions viz. whether the writ petition
would itself become infructuous if interim order is refused, on the one hand,
and the enormity of losses and hardships which may be suffered by others if an
interim order is granted, particularly having regard to the fact that in such
an event, the losses sustained by the affected parties thereby may not be
possible to be redeemed."
31.
Thus, the law on the issue emerges to the effect that interim
injunction should be granted by the Court after considering all the pros and
cons of the case in a given set of facts involved therein on the risk and 20
responsibility of the party or, in case he looses the case, he cannot take any
advantage of the same. The order can be passed on settled principles taking
into account the three basic grounds i.e. prima facie case, balance of
convenience and irreparable loss. The delay in approaching the Court is of
course a good ground for refusal of interim relief, but in exceptional
circumstances, where the case of a party is based on fundamental rights
guaranteed under the Constitution and there is an apprehension that suit
property may be developed in a manner that it acquires irretrievable situation,
the Court may grant relief even at a belated stage provided the court is
satisfied that the applicant has not been negligent in pursuing the case.
32.
Anything done in undue haste can also be termed as arbitrary and
cannot be condoned in law. (Vide Madhya Pradesh Hasta Shilpa Vikas Nigam Ltd.
V. Devendra Kumar Jain & Ors. (1995) 1 SCC 638; and 2004 SC 1159).
33.
If the instant case is considered, in the light of the above
settled legal propositions and admittedly the whole case of the appellant is
based on 21 violation of Article 14 of the Constitution as according to the
appellant it has been a case of violation of equality clause enshrined in
Article 14, the facts mentioned hereinabove clearly establish that the
Corporation and the Government proceeded in haste while considering the
application of respondent No.4 which tantamount to arbitrariness, thus
violative of the mandate of Article 14 of the Constitution. Application of the
appellant was required to be disposed of by a speaking and reasoned order.
Admittedly, no reason was assigned for rejecting the same. There is nothing on
record to show as on what date and under what circumstances, Plot nos.F-16 and
F-17 stood decarved and became part of the Open Space No.9. The respondents
could not furnish any explanation as in what manner and under what
circumstances, the Bharat Sanchar Nigam Ltd. has been made allotment of land
from plot no.F-16, (a part of Open Space No.9), without change of user of the
land. The respondent no.4 had not initially asked for 17 acres of land which
has been allotted to it. There is nothing on record to show as to why the land
could not be disposed of by auction. All these circumstances provide for basis
to form a tentative opinion that State and its instrumentalities have acted
affectionately in the case of respondent no.4.
34.
Undoubtedly, there has been a delay on the part of the appellant
in approaching the court but we cannot be oblivious of the fact that the appellant
had been approaching the authorities time and again for allotment of the land.
Admittedly, the entire land had not been developed by the respondent no.4 till
this Court entertained the Special Leave Petition and directed the parties to
maintain status quo with regard to the land measuring 2 acres adjacent to the
appellant's plot no.F-15 vide order dated 21.7.2008.
Therefore,
it is not only the appellant who is to be blamed for the delay. The land had
been allotted to the respondent no.4 in undue haste and no development could
take place therein for more than two years of taking the possession of the
land. In such a fact-situation the submission made on behalf of the respondents
that interim stay cannot be granted at a belated stage in preposterous.
35.
In view of above, we are of the considered opinion that the appeal
deserves to be allowed and is hereby allowed. In the facts and circumstances of
the case, the interim order passed by this Court on 21.7.2008 shall continue in
operation till the writ petition is decided by the High Court. The Hon'ble High
Court is requested to dispose of the writ petition expeditiously. Needless to
say that any observation made herein 23 either on facts or on law shall not
adversely effect the case of either of the parties, for the reason that the
only question before this Court has been as to whether the appellant deserves
to be granted interim protection till his writ petition is decided by the High
Court.
The
appeal stands disposed of accordingly. No costs.
.........................................J. (ALTAMAS KABIR)
.......................................J.
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