M/S Tushar Agro Industries, Vs Chhattisgarh State Industrial Development Corporation Limited

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2025:CGHC:58862

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NAFR

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HIGH COURT OF CHHATTISGARH AT BILASPUR

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WPC No. 3133 of 2023

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1 - M/s Tushar Agro Industries, Through Director - Smt. Kamaljeet Kaur, W/o Shri Harcharan Singh Rajpal, Aged About 59 Years, Part Of Plot No. 22, Industrial Area - Siltara, District Raipur Chhattisgarh R/o Ratan Complex, Katora Talab, Raipur, District Raipur Chhattisgarh.

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... Petitioner

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Versus

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1 - Chhattisgarh State Industrial Development Corporation Limited Through Chief General Manager (Land Allotment), First Floor, Udyog Bhavan Ring Road No. 1, In Front Of Sonakhan Bhavan, Telibandha, Raipur, District : Raipur, Chhattisgarh

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2 - M/s Sudarshan Mettalic Pvt. Ltd. Through Director Shri Mukesh Kumar Agrawal, S/o Shri Raghunath Agrawal, R/o B-Block, 304, Shilp Apartment, Shankar Nagar, Behind Krishna Public School, Raipur, District : Raipur, Chhattisgarh

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3 - Axis Bank, Through Sales And Relationship Manager, Sme Center, Raipur, Tagore Nagar, Branch, Pujari Chambers, Block-B1, Pachpedi Naka, Nh-43, Raipur, District Raipur Chhattisgarh.

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4 - Chief General Manager, District Trade And Industries Centre, (Dtic) Udyog Bhawan, Ring No. 1, Telibandha, Raipur Chhattisgarh.

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... Respondents For Petitioner : Mr. K.P.S. Gandhi, Advocate For Respondent No. 1 : Mr. Animesh Tiwari, Advocate For Respondent No. 2 : Mr. N. Naha Roy, Advocate For Respondent No. 4 : Ms. Upasna Mehta, Dy. Government Advocate

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SB: Hon'ble Shri Parth Prateem Sahu, Judge ORDER ON BOARD

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04/12/2025

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The petitioner has filed this writ petition seeking following reliefs:-

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“10.1 That, the Hon’ble Court may kindly be pleased to call for the entire records of the petitioner’s case from the possession of the respondent authorities for its kind perusal.

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10.2 That, the Hon'ble Court may kindly be pleased to issue an appropriate writ setting-aside the impugned lease deed dated 24.03.2025 (Annexure P/1) executed between Respondents No. 1 & 2.

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10.3 That, this Hon’ble Court may kindly be pleased to issue a writ of mandamus orders or directions to the respondents and be set-aside the impugned order dated 01.08.2022.

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10.4 Any other relief or relief(s) which this Hon’ble Court may deem fit or proper in the facts and circumstances of the case may also be granted along with the cost of the petition.”

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Learned counsel for the petitioner submits that the petitioner was allotted

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land bearing Plot No. 22 admeasuring 51648 sq. feet (1.18 acres) (hereinafter for brevity referred to as the ‘subject land’) for establishment of the industry in the industrial area by the Respondent No. 1/Chhattisgarh State Industrial Development Corporation. After allotment of subject land on lease for a period of 99 years, petitioner was also given the possession of subject land. The petitioner thereafter was regularly paying the lease rent and have also started its business over the subject land.

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Respondent No. 1 served upon the petitioner a demand note dated 24.03.2023 and on the same day, the lease deed in favour of the Respondent No. 2 was executed. He contended that after receipt of the demand note, the petitioner had approached the authorities of Respondent No. 1 to deposit the said amount, however, it was not accepted and thereafter, it came to the knowledge of the petitioner about the execution of the lease deed in favour of the Respondent No. 2. He contended that before passing of an order of cancellation of lease-deed by the Respondent No. 4 dated 01.08.2022, no show-cause notice was

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issued granting the petitioner an opportunity of hearing and therefore, the order (Annexure P/2), cancellation of the lease-deed executed in favour of the petitioner is in violation of the principles of natural justice. Hence, it be interdicted.

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On the other hand, learned counsel for the Respondent No. 1 vehemently opposes the submission of counsel for the petitioner and would submit that the submissions made by the counsel for petitioner is not correct. He contended that from the contents of the order dated 01.08.2022, the cancellation of the lease-deed clearly mentions that the petitioner as per the conditions and clauses of the lease-deed has not made any construction for running his business. The petitioner was suppose to construct building or the superstructure for running business within a period of 01 year, however, till passing of the order, petitioner has not made any construction over the subject land.

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He also contended that the petitioner was sent a show-cause notice on 04.07.2020 by the Respondent No. 1 mentioning that to start production and to submit relevant certificate in this regard or else, the appropriate proceedings will be initiated for violation of the terms and conditions of the lease-deed and therefore, the submission of counsel for petitioner that no show-cause notice was issued is not correct. He also contended that the order of cancellation of the lease-deed was also sent to the petitioner through speed post and the copy of the outgoing register maintained by the Respondent No. 4 is also enclosed along with the covering memo.

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Upon putting specific query to the learned counsel for the Respondent No. 2 as to the entries made in the outgoing register with regard to sending/dispatching the show-cause notice dated 04.07.2020, he submits that according to his instructions, the said register was not available in the office of Respondent No. 4 and therefore, the said information was not supplied to the officials of the Respondent No. 1. He also pointed out that

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according to the contents of the order of cancellation of lease-deed, the petitioner was having the remedy of submitting a representation before the Respondent No. 4. However, no such representation/objection was raised by the petitioner and therefore, at this stage, no relief can be granted.

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Learned counsel for the Respondent No. 4 adopts the submission of counsel for the Respondent No. 1 and would submit that the petitioner himself has enclosed the show-cause notice as Annexure P/5. She also submits that the order which is passed by the Respondent No. 4 was forwarded to the petitioner by way of speed post. Copy of the dispatch register along with the postal receipt is submitted along with the covering memo before this Court.

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Learned counsel for the Respondent No. 2 would submit that after cancellation of the lease-deed allotted in favour of the petitioner, the Respondent No. 1 by way of issuing NIT for allotment of the subject land, in which Respondent No. 2 participated and became successful. Accordingly, the lease-deed was executed in favour of Respondent No. 2 and possession was also handed-over to the Respondent No. 2. He further submits that the further activities could not taken place due to the pendency of this writ petition, because loan applied by the Respondent No. 2 could not be sanctioned and it is still in process.

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I have heard learned counsel for the parties and also perused the documents placed on record.

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10.It is not in dispute that the petitioner was allotted subject land by the Respondent No. 1 for industrial purpose in the industrial area bearing Plot No. 22 admeasuring 51648 sq. feet (1.18 acres) on lease. In the order of cancellation of the lease-deed, it is mentioned that the petitioner has not fulfilled the terms and conditions of the clauses of the lease-deed and

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therefore, the lease-deed was canceled. The contention of the petitioner is that, if for any reason, adverse action is to be taken against the petitioner, then, the petitioner ought to have been given a show-cause notice enabling the petitioner to explain and to make its submission to the allegations as leveled against him stating to be in contravention of the clauses of the lease-deed, which was not given.

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11.Respondent No. 1 is the State authority holding public office and therefore, if for any reason, any adverse action is to be taken, which is having the nature of a civil consequence, then, the minimum which is required and expected from the public authority is to grant an opportunity of hearing to the persons against whom action is to be taken, by issuing a show-cause notice.

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12.The submission of learned counsel for the Respondent No. 1 is that the outgoing register which is maintained by the Respondent No. 4, stating that it is not available in the office of Respondent No. 4, in the facts of the case and in view of the grounds raised by the counsel for petitioner is not accepted. The said show-cause notice dated 04.07.2020 is appearing to have been issued from the office of the Respondent No. 1 and for the reasons best known, the Respondent No. 1 has not submitted the copy of dispatch register showing that the notice which is issued addressing to the petitioner has been dispatched on the said date or any nearby date. In absence of any such proof, it cannot be accepted that the petitioner was served with the show-cause notice dated 04.07.2020. More so, when the specific plea has been raised in this writ petition that the order of cancellation of lease-deed was passed without giving any opportunity of hearing or issuing any show-cause notice to the petitioner.

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Hon'ble Supreme Court in case of State of Maharashtra & Ors. Vs. Jalgaon Municipal Council & Ors. (2003) 9 SCC 731 has held thus:-

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“30. It is a fundamental principle of fair hearing incorporated in the doctrine of natural justice and as a rule of universal obligation that all administrative acts or decisions affecting rights of individuals must comply with the principles of natural justice and the person or persons sought to be affected adversely must be afforded not only an opportunity of hearing but a fair opportunity of hearing. The State must act fairly just the same as anyone else legitimately expected to do and where the State action fails to satisfy the test it is liable to be struck down by the courts in exercise of their judicial review jurisdiction. However, warns Prof. H.W.R. Wade that the principle is flexible.

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“The Judges, anxious as always to preserve some freedom of manoeuvre, emphasise that ‘it is not possible to lay down rigid rules as to when the principles of natural justice are to apply: nor as to their scope and extent. Everything depends on the subjectmatter’. Their application, resting as it does upon statutory implication, must always be in conformity with the scheme of the Act and with the subject-matter of the case. ‘In the application of the concept of fair play there must be real flexibility.’ There must also have been some real prejudice to the complainant: there is no such thing as a merely technical infringement of natural justice.” (Wade & Forsyth: Administrative Law, 8th Edn., 2000, pp. 491-92.“

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Further, Hon'ble Supreme Court in case of Manohar S/o. Manikrao Anchule Vs. State of Maharashtra & Anr. (2012) 13 SCC 14 has held thus:-

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“23. Thus, the principles of natural justice have to be read into the provisions of Section 20(2). It is a settled canon of civil jurisprudence including service jurisprudence that no person be condemned unheard. Directing disciplinary action is an order in the form of recommendation which has far reaching civil consequences. It will not be permissible to take the view that compliance with principles of natural justice is not a condition precedent to passing of a recommendation under Section 20(2).

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25. Thus, the principle is clear and settled that right of hearing, even if not provided under a specific statute, the principles of natural justice shall so demand, unless by specific law, it is excluded. It is more so when exercise of authority is likely to vest the person with consequences of civil nature.”

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Hon'ble Supreme Court while dealing with an issue of blacklisting in case of Gorkha Security Services Vs. Government (NCT Delhi) & Ors. (2014) 9 SCC 105 has held thus:-

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No doubt, rules of natural justice are not embodied rules nor can they be lifted to the position of fundamental rights. However, their aim is to secure justice and to prevent miscarriage of justice. It is now well established proposition of law that unless a statutory provision either specifically or by necessary implication excludes the application of any rules of natural justice, in exercise of power pre-judicially affecting another must be in conformity with the rules of natural justice.

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Hon'ble Supreme Court in the case of UMC Technologies Pvt. Ltd. Vs. Food Corporation of India & Anr. (2021) 2 SCC 551 reiterating the law enunciated in case of Gorkhka Security Services (supra) observed thus:-

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“ 24. A plain reading of the notice makes it clear that the action of blacklisting was neither expressly proposed nor could it have been inferred from the language employed by the Corporation in its show cause notice. After listing 12 clauses of the “Instruction to Bidders”, which were part of the Corporation’s Bid Document dated 25.11.2016, the notice merely contains a vague statement that in light of the alleged leakage of question papers by the appellant, an appropriate decision will be taken by the Corporation. In fact, Clause 10 of the same Instruction to Bidders section of the Bid Document, which the Corporation has argued to be the source of its power to blacklist the appellant, is not even mentioned in the show cause notice. While the notice clarified that the 12 clauses specified in the notice were only indicative and not exhaustive, there was nothing in the notice which could have given the appellant the impression that the action of blacklisting was being proposed. This is especially true since the appellant was under the belief that the Corporation was not even empowered to take such an action against it and since the only clause which mentioned blacklisting was not referred to by the Corporation in its show cause notice. While the following paragraphs deal with whether or not the appellant’s said belief was well-founded, there can be no question that it was incumbent on the part of the Corporation to clarify in the show cause notice that it intended to blacklist the appellant, so as to provide

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adequate and meaningful opportunity to the appellant to show cause against the same.

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The mere existence of a clause in the Bid Document, which mentions blacklisting as a bar against eligibility, cannot satisfy the mandatory requirement of a clear mention of the proposed action in the show cause notice. The Corporation’s notice is completely silent about blacklisting and as such, it could not have led the appellant to infer that such an action could be taken by the Corporation in pursuance of this notice. Had the Corporation expressed its mind in the show cause notice to black list, the appellant could have filed a suitable reply for the same. Therefore, we are of the opinion that the show cause notice dated 10.04.2018 does not fulfill the requirements of a valid show cause notice for blacklisting. In our view, the order of blacklisting the appellant clearly traversed beyond the bounds of the show cause notice which is impermissible in law. As a result, the consequent blacklisting order dated 09.01.2019 cannot be sustained.

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In view of our conclusion that the blacklisting order dated 09.01.2019 passed by the Corporation is contrary to the principles of natural justice, it is unnecessary for us to consider the other contentions of the learned counsel for the appellant. Having regard to the peculiar facts and circumstances of the present case, we deem it appropriate not to remit the matter to the Corporation for fresh consideration. ”

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Hon'ble Supreme Court in case of Mahdyamam Broadcasting Ltd .

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Vs. Union of India & Ors. (2023) 13 SCC 401 has held thus:-

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“ 42. The principles of natural justice were read into the law and conduct of judicial and administrative proceedings with an aim of

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securing fairness. These principles seek to realise the following four momentous purposes:

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‘(i) Fair Outcome, (ii) Inherent value in fair

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procedure, (iii) Legitimacy of the decision and decision-making authority, (iv) Dignity of individuals’

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18.In the aforementioned facts of the case and the decisions of Hon’ble Supreme Court, in the opinion of this Court, order of cancellation of leasedeed issued by the Respondent No. 4 dated 01.08.2022 is without issuing show-cause notice, granting opportunity of hearing, hence it is not sustainable and accordingly, it is set-aside . However, the respondents would be at liberty to pass a fresh order, after issuing show-cause notice and providing an opportunity of hearing to the petitioner in accordance with law.

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With the aforesaid observation and directions, this writ petition stands

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allowed .

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Sd/(Parth Prateem Sahu) Judge

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Digitally
SHUBHAM signed by
DEY SHUBHAM
DEY

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Dey

M/S Tushar Agro Industries, v. Chhattisgarh State Industrial Development Corporation Limited

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M/S Tushar Agro Industries, v. Chhattisgarh State Industrial Development Corporation Limited

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