Allowed

Krishnapatnam Infratech Private Ltd., v. Andhra Pradesh Industrial Infrastructure Corporation

Andhra Pradesh HC10 Sept 2024WP/16797/2019

Case brief

AI extract

What is this about?

This order allows a writ petition challenging the cancellation and resumption of land by APIIC after registered sale deeds were executed. The court held the cancellation arbitrary due to prior conduct and lack of stipulated timelines, setting aside the impugned order.

What did the court decide?

Impugned order dated 19.10.2019 set aside; respondents prohibited from interfering with petitioner's possession and enjoyment of the land.

Krishnapatnam Infratech Private Ltd., Vs Andhra… — Property and Title | Andhra Pradesh HC (2024)

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IN THE HIGH COURT OF ANDHRA PRADESH :: AMARAVA (Special Original Jurisdiction)

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WEDNESDAY, THE ELEVENTH DAY OF SEPTEMBE TWO THOUSAND AND TWENTY FOUR

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PRESENT

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THE HON’BLE SRI JUSTICE VENKATESWARLU NIMMAGADDA

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WRIT PETITION NO: 16797 OF 2019

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Between:

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M/s. Krishnapatnam Infratech Private Ltd., H.No. 8-2-293/82/A/37 9 and 379/A, 1st Floor, Plot No. 379, Road No. 10, Jubilee Hills, Hyderabad - 500 033, Telangana (State), Represented by its Chief Financial^{OfficerandAuthorized} Signatory. Smt. K. Gowri, W/o. K.S.V.L. Narasimha Murthy, Aged 48 Years, Ft/o. A-318, Majestic Mansion, Shamlal Buildings, Begumpet, Hyderabad

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...PETITIONER

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AND

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Andhra Pradesh Industrial Infrastructure Corporation, Corporate Office at APIIC Towers, Plot No.1, IT Park, Mangalagiri, Guntur^District-522 503, Andhra Pradesh Also, through its Registered Office at APIIC Limited, 5-90-58/B, 4th Floor, Parisrama Bhavan, Fateh Maidan Road, Basheerbagh, Hyderabad- 500 004, Telangana State, Represented by its Vice Chairman and Managing Director

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Andhra Pradesh Industrial Infrastructure Corporation, Nellore Zonal Office, Industrial Estate, A K Nagar Post, Nellore- 524004, Andhra Pradesh, Represented by Zonal Manager.

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State of Andhra Pradesh, Represented by its Principal Secretary, Department of Industries, Infrastructure, and Investment Room No. 102, Block 2, Andhra Pradesh Secretariat, Velagapudi, Guntur District522503, Andhra Pradesh.

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...RESPONDENTS

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Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue an order, writ or direction more particularly one in the

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nature of Writ of Mandamus by declaring that the action of the 1st r Respondent Authority in cancelling and resuming of lands conveyed to the Petitioner through three registered sale deeds vide cancellation notice Letter No. ZO/APIIC/NLR/Krishnapatnam Infra/2009/958 dated 19.10.2019 as illegal, arbitrary and violative of Article 14 and 300-A of the Constitution of India, and the provisions of the Transfer of Property Act 1882, the Registration Act, 1908, and the Specific Relief Act, 1963 and conseguently set aside the cancellation notice, to declare that the Respondents are without authority to unilaterally cancel the vested property right .of land admeasuring 4731.15 Acres and conveyed vide three registered sale deeds by the 1st Respondent Authority to the Petitioner, and to direct the Respondents not to interfere with the settled and crystallized rights of the Petitioner to continue in undisturbed enjoyment and possession of the land admeasuring a total extent of 4731.15 Acres situated at Kota and Chillakur Mandals, SPSR Nellore District, Andhra Pradesh.

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lA NO: 1 OF 2019

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Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to suspend the operation of Cancellation Notice Letter No. ZO/APIIC/NLR/Krishnapatnam Infra/2009/958 dated 19.10.2019 issued by the 1st Respondent Authority, and stay any consequential interference of the Respondent Authorities including any act of dispossession with the Petitioner's enjoyment and possession of its vested property right of land admeasuring 4731.15 Acres situated at Kota and Chillakur Mandals, SPSR Nellore District, Andhra Pradesh, pending disposal of the above writ petition.

lA NO: 2 OF 2019

Between:

Andhra Pradesh Industrial Infrastructure Corporation,^{CorporateOffice} at APIIC Towers, Plot No.1, IT Park, Mangalagiri, Guntur^District-522 503, Andhra Pradesh Also, through its Registered Office at APIIC Limited, 5-90-58/B, 4th Floor, Parisrama Bhavan, Fateh^MaidanRoad, Basheerbagh, Hyderabad- 500 004, Telangana State, Represented^by its Vice Chairman and Managing Director

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Andhra Pradesh Industrial Infrastructure Corporation, Nellore Zonal Office, Industrial Estate, A K Nagar Post, Nellore-^{524004,Andhra} Pradesh, Represented by Zonal Manager.

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...PETITIONERS/RESPONDENT NOS. 1 & 2

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AND

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M/s. Krishnapatnam Infratech Private Ltd., H.No.^{8-2-293/82/A/379and} 379/A, 1st Floor, Plot No. 379, Road No. 10, Jubilee^{Hills,Hyderabad-} 500 033, Telangana (State), Represented by its Chief^{FinancialOfficer} and Authorized Signatory. Smt. K. Gowri, W/o. K.S.V.L. Narasimha Murthy, Aged 48 Years, Ft/o. A-318, Majestic Mansion, Shamlal Buildings, Begumpet, Hyderabad

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...RESPONDENT/WRIT PETITIONER

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State of Andhra Pradesh, Represented by its Principal Secretary, Department of Industries, Infrastructure, and Investment^RoomNo.102, Block 2, Andhra Pradesh Secretariat, Velagapudi, Guntur District522503, Andhra Pradesh.

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...RESPONDENT/RESPONDENT N0.3

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Petition under Section 151 CPC praying that in the^{circumstances} stated in the affidavit filed in support of the petition,^{theHighCourtmaybe} pleased to vacate the interim order dated 25.10.2019^{passedinW.PNo.} 16797 of 2019.

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Counsel for the Petitioner: SRI GINJUPALLI SUBBA RAO

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Counsel for the Respondent Nos.1 & 2: SRI J UGRANARASIMHA

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Counsel for the Respondent No. 3: THE ADVOCATE GENERAL

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The Court made the following: ORDER

APHC010352672019

IN THE HIGH COURT OF ANDHRA PRADESH AT AMARAVATI (Special Original Jurisdiction)

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[3329]

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WEDNESDAY ,THE ELEVENTH DAY OF SEPTEMBER TWO THOUSAND AND TWENTY FOUR

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PRESENT

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THE HONOURABLE SRI JUSTICE VENKATESWARLU NIMMAGADDA

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WRIT PETITION NO: 16797/2019

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Between;

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Krishnapatnam Infratech Private Ltd., ...PETITIONER

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AND

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Andhra Pradesh Industrial Infrastructure Corporation and ...RESPONDENT(S) Others

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Counsel for the Petitioner:

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1.GINJUPALLI SUBBA RAO

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Counsel for the Respondent(S):

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1.GP FOR INDUSTRIES COMMERCE (AP)

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2.THE ADVOCATE GENERAL (AP)

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The Court made the following:

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ORDER:

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This writ petition is filed under Article 226 of the^{ConstitutionofIndia,}

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claiming the following relief;

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"to issue Writ of Mandamus by declaring that the action^ofthe 1st Respondent Authority in cancelling and resuming of lands conveyed to the Petitioner through three registered sale deeds vide cancellation -^notice Letter No ZO/APUC/NLR/Krishnapatnam

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Infra/2009/958 dated 19 10 2019 as illegal arbitrary^{andviolativeof} ■r'i._ Article 14 and 300A of the Constitution of India and the provisions of the Transfer of Property Act 1882 the Registration Act 1908 and the Specific Relief Act 1963 and consequently set aside the cancellation notice to declare that the Respondents are without authority to unilaterally cancel the vested property right of land admeasuring 4731 15 Acres and conveyed vide three registered sale deeds by the 1st Respondent Authority to the Petitioner and to direct the Respondents not to interfere with the settled and crystallized rights of the Petitioner to continue in undisturbed enjoyment and possession of the land admeasuring a total extent of 4731 15 Acres situated at Kota and Chillakur Mandals SPSR Nellore District Andhra Pradesh’’

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The case of the petitioner is that the respondent authorities^took a decision to hand over 6000 acres of land for development of a port-linked multi-product industrial area to the petitioner. Accordingly,^{theentireland} was handed over to the 1®‘ respondent by the District Collector and an agreement for sale of land was also concluded between the petitioner and 1®* respondent. After payment of Rs.65,07,97,010/- by the petitioner, 3 sale deeds were executed in its favour by the 1®‘ respondent in 2009, alienating Ac.4731.15 cents of land and also delivered the possession of the lands. The remaining extent of Ac. 1298.04 cents was not handed over to the petitioner. The 1®' respondent thereafter, unilaterally cancelled the allotment of Ac.4731.15 cents and resumed the entire land without encumbrances and forfeited the consideration received in public interest by virtue of the impugned order dated 19.10.2019.

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Learned counsel for the petitioner submits that the petitioner company was incorporated under the provisions of Companies Act, 1956 to catalyze and create a landmark self-sufficient industrial township and to operate alongside the Krishnapatnam Port. Having considered the experience and expertise of the petitioner, in order to secure industrial and economic development of the area near Krishnapatnam Port through the development of Multiproduct Special Economic Zone, the respondents Andhra Pradesh Industrial Infrastructure Corporation Limited (APIIC)^had allotted land of an extent of Ac.4731.15 cents to the petitioner at provisional^{rateofRs. 1,15,000/-} per acre. After payment of the entire amount, the first respondent^herein executed three separate Registered Sale Deeds alienating total land of an extent of Ac.4731.15 cents in favour of the petitioner.

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It is submitted that once a land is conveyed and alienated^infavourofa party, by virtue of registered documents, such party gets vested with undefeatable rights and no unilateral cancellation^{ofsuchsalecantakeplace.} It is further contended by the petitioner that the primary requirement for establishment of a Multi-Product Special Economic Zone, as per Special Economic Zones Act, 2005 and Rules, 2006, it should have a contiguous area of 1000 hectares and that the 1®‘ respondent failed to provide contiguous land, inspite of several requests by the petitioner overtime.^{Thisextentwasreduced} to 500 hectares, by virtue of an amendment in 2013,^whichwas also not available with the petitioner and that the delay in^{executionoftheprojectis}

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therefore a result of the inaction of the respondent authorities in providing contiguous land.

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The case of the respondents on the other hand is that the allotment of lands to the petitioner is conditional and solely for the purpose of establishment of MPSEZ and conferred limited ownership, which^is clear from the terms of the agreements of sale and the sale deeds and that as the sale deeds have conditional covenants, in no event it can be construed to be conferring absolute rights of the properties conditionally^transferred to the petitioner company and that the conditional covenants can only be said to be condition superadded as is contemplated under Section 31 of the Transfer of Property Act, 1882. It is further contended that the petitioner failed to develop the land for the allotted purpose and that it had created third party rights over certain extents of land and mortgaged the land to raise huge loans and that the same is also violative of conditions of allotment and therefore the cancellation is valid and well within the power of the 1®‘ respondent allotting authority.

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Further, the learned Government Pleader, appearing^{onbehalfofthe} learned Advocate General would submit that, in view of the G.O.Ms.No.114 Industries and Commerce (Infra) Department dated 09.11.2023, due to change in line activity from multi product SEZ to multi product Industrial park, the petitioner was permitted to continue the project in respect of the subject land which was alienated in favour of the petitioner. He further submits that, in

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view of subsequent developments, the petitioner is^{entitledtocommencethe} work activity in terms of G.O.Ms.No.114 Industries and Commerce (Infra) Department dated 09.11.2023.

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In reply, it is pleaded on behalf of the petitioner^{thatthesaledeedswere} executed in 2009 and the show cause notices was issued in 2010, 2012 and 2013 and that the respondents, being satisfied with the response submitted by the petitioner, did not take any action in furtherance^{ofthenoticesandthat} after 6 years, in 2019, once again show cause notice^wasissuedand the impugned order was passed hurriedly. That the respondents, by their conduct, have accepted that the petitioner cannot proceed with the development activities without contiguous land and without reference^{tothatpoint,issued} the show cause notice and the impugned order.

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It is further submitted that during the pendency of^{thewritpetition,the} petitioner filed a Memo which shows that the petitioner^{madearequesttothe} Government of Andhra Pradesh requesting to withdraw^{thecancellationorder} dated 19.10.2019 i.e. the impugned order and to permit^itto go ahead^withthe development proposal and requested allotment of balance extent of Ac. 1300.00 cents in various pockets which are yet^to be^registered by API^1C and further, also requested for change in line of activity^{from“MultiProduct} SEZ” to “Industrial Park”. The Government, after placing the proposal before the State Investment Promotion Board (SIPB), issued G.O.Ms.No.114 Industries and Commerce (Infra) Department dated 09.11.2023^according

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permission to the petitioner for change in line of activity by duly obtaining specific timelines for implementation of project by the petitioner, with a pre condition that this writ petition is withdrawn.

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Heard learned counsel for the petitioner and learned Government Pleader representing the office of the learned Advocate General perused the material available on record.

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In the light of the fact that the parties have arrived^{ataconsensusand} as it is evident from a perusal of the Government Order^{thattheGovernment} has impliedly set aside the order dated 19.10.2019, the parties can proceed with the agreed terms to continue with the project.^{Sofarastheallotmentof} remaining lands and regarding the issue of contiguous lands are concerned. the petitioner may avail appropriate legal or other^remedies.

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So far as the impugned order dated 19.10.2019 is concerned, it is clear that the petitioner did not proceed with the project, inspite of readying the master plan and obtaining all necessary permissions, solely due to the non availability of contiguous land. The petitioner demonstrated how it has repeatedly requested the respondents to provide it with contiguous land for the purpose of developing the land and establishing a SEZ. The respondents have remained silent since 2009 till 2019 i.e. from the time of execution of the sale deeds to the date of issuing the impugned order, other than issuing notices way back in 2010 and 2013 and failed to respond to the various communications of the petitioner, therefore implying through conduct that time

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is not of essence of the contract. Even if the respondent^{wishestocancelthe} allotment for the reasons stated in the impugned order, its conduct speaks otherwise and therefore the impugned order cannot be^sustained.

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Furthermore, the respondents could not have unilaterally^cancelledthe allotment made to the petitioner, that too after execution^{ofthesaledeedsand} handing over possession of the land to the petitioner. It is settled law that once a sale deed is executed and registered, the transaction^{iscomplete,andthe} rights and interests in the property are fully transferred^{tothebuyer.Oncethe} property is conveyed under a document, it continues^{tobegovernedbythe} provisions of the Transfer of Property Act. [Dip Narain Singh^vNageswar Prasad AIR 1940 All. 1 and State Of Kerala vs Cochin^{ChemicalRefineries} Ltd. 1968 SCR (3) 556].

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Any prior conditions from sale agreements or allotment^{letters,unless} expressly incorporated into the sale deed, cannot be^{enforced.Inthepresent} case the APIIC loses the right to impose additional conditions,^demand and cancel the allotment based on pre-sale deed further payments documents. The courts have consistently held that such post-sale deed actions are arbitrary and illegal, particularly when^{thetermswerenotincluded} in the final sale deed. Additionally, the doctrine of proportionality is that administrative actions be fair and emphasized, which requires reasonable, ensuring that the penalties or decisions taken are not disproportionately harsh compared to the alleged violations.^{Variouscourts}

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have also indicated that, in the absence of any stipulated timelines in the sale deed for completing construction or development, cancellation or penal actions cannot be justified. Any such attempts by government authorities or corporations to impose post-facto conditions or arbitrary penalties have been struck down as they lack legal basis. [A.B.C. India Limited v. A.P. Industrial Infrastructure Corporation Limited, 2010 SCC OnLine AP 1198; A.P. Industrial Infrastructure Corpn. Ltd. v. S.N. Raj Kumar, (2018) 6 SCC 410; Automotive Manufacturers Pvt. Ltd. Vs. Andhra Pradesh Industrial infrastructure Corporation Ltd. and Ors. MANU/AP/0300/2019]

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Accordingly, the writ petition is allowed and the impugned^orderdated 19.10.2019 is hereby set-aside and the respondents are directed not to interfere with the possession and enjoyment of the petitioner over land admeasuring a total extent of 4731.15 Acres situated at Kota and Chillakur Mandals SPSR Nellore District, Andhra Pradesh. There shall be no order as to costs.

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Consequently, miscellaneous applications pending if any shall stand closed.

//TRUE COPY//

To,

/^SECTION OFFICER

The Vice Chairman and Managing Director Andhra Pradesh^Industrial Infrastructure Corporation, Corporate Office at APIIC Towers, Plot No.1, IT Park, Mangalagiri, Guntur District- 522 503, Andhra Pradesh Also, through its Registered Office at APIIC Limited, 5-90-58/B, 4th Floor, Parisrama Bhavan, Fateh Maidan Road, Basheerbagh, Hyderabad-⁵⁰⁰ 004, Telangana State.

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The Zonal Manager, Andhra Pradesh Industrial Infrastructure Corporation, Nellore Zonal Office, Industrial Estate, A K Nagar Post, Nellore- 524004, Andhra Pradesh.

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The Principal Secretary, Department of Industries, Infrastructure, and Investment Room No. 102, Block 2, Andhra Pradesh Secretariat, Velagapudi, Guntur District- 522503, Andhra Pradesh.

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