Allowed

State of Kerala v. Abdul Kareem

Kerala HC3 Feb 2016WA/55/2016

Case brief

AI extract

What is this about?

The Court allowed the appeal against a Single Judge's order directing execution of a hire purchase agreement. The Court modified the order to direct the parties to execute a lease deed within one month, noting that the allotment order and subsequent policy changes mandated a lease basis.

What did the court decide?

The parties are to execute a lease deed within one month of receipt of this judgment; the amount paid by the allottee shall be adjusted towards the lease consideration.

State of Kerala Vs Abdul Kareem — Land Acquisition | Kerala HC (2016)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HONOURABLE THE CHIEF JUSTICE MR.ASHOK BHUSHAN &

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THE HONOURABLE MR.JUSTICE A.M.SHAFFIQUE

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WEDNESDAY, THE 3RD DAY OF FEBRUARY 2016/14TH MAGHA, 1937

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WA. No.55 of 2016 () IN WP(C). No.5094/2015

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----------------------------------------AGAINST THE ORDER/JUDGMENT IN WP(C) 5094/2015 of HIGH COURT OF KERALA DATED 01-10-2015.

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APPPELLANTS/RESPONDENTS 1 TO 3IN THE W.P(C):

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1. THE STATE OF KERALA, REPRESENTED BY THE SECRETARY TO GOVERNMENT, INDUSTRIES DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM-695001.

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2. THE DIRECTOR OF INDUSTRIES AND COMMERCE, VIKAS BHAVAN, THIRUVANANTHAPURAM-695033.

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3. THE GENERAL MANAGER, DISTRICT INDUSTRIES CENTRE, PALAKKAD-678001.

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BY SENIOR GOVERNMENT PLEADER SRI.BIJU MEENATTOOR

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RESPONDENT(S)/PETITIONER IN THE W.P(C):

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ABDUL KAREEM, PROPRIETOR OF MADAVANA INDUSTRIES, MUPPATHADAM, ALUVA-683101.

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BY SRI.K.MOHANAKANNAN

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THIS WRIT APPEAL HAVING COME UP FOR ADMISSION ON 03-02-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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KRJ

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ASHOK BHUSHAN, C.J & A.M.SHAFFIQUE, J

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= = = = = = = = = = = = = = = = = W.A No.55 of 2016

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= = = = = = = = = = = = = = = = = = Dated this the 3^rd day of February, 2016

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JUDGMENT

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Shaffique, J

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Heard the learned Government Pleader appearing on behalf of the appellants and the learned counsel appearing on behalf of the respondent/writ petitioner.

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The appeal has been filed by the respondents 1 to 3 viz., the State and Excise authorities, challenging the judgment dated 1.10.2015 in W.P(C) No.5094 of 2015 by which, the learned Single Judge has issued a direction to the appellants to execute a hire purchase agreement on provisional basis in favour of the writ petitioner and thereafter to execute the lease deed when rules are framed by the Government in that regard.

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Short facts involved in the writ petition would disclose that

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the respondent herein, who is hereinafter referred to as the petitioner,

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-:2:-

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WA.55/16

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submitted an application before the District Industries Centre for allotment of plot for industrial purpose on hire purchase basis. The application is Ext.P1 dated 30.11.2010. The allotment has been

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made in favour of the petitioner as per order dated 11.12.2014 as evident from Ext.P5. As per the order, it is indicated that an extent of 36.5 cents of land has been allotted in favour of the petitioner on his executing an undertaking to the effect that necessary lease agreement will be executed once the rules for allotment of land are framed by the Government. Petitioner contended that as far as he is concerned, if the lease rules have not been framed, Ext.P11 Government Order dated 5.4.1969 holds the field and the agreement can be executed only on hire purchase basis.

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The learned Single Judge, however, took the view that since the lease rules have not been framed, until the said lease rules are framed, the petitioner is entitled to an agreement executed on hire purchase basis and accordingly, direction has been issued. While

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impugning the aforesaid judgment, it is contended that the allotments which are made after the Government Order dated 10.6.2013, can

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only be on lease basis and not on hire purchase basis. The Government Order dated 10.6.2013 reads as follows:

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“1. The Rules on lease of land for industrial purpose in Development Areas as per G.O(MS) No.420/68/ID. dated 22/10/1968, the Rules on allotment of land for industrial purpose in Development Areas on hire purchase as per G.O(MS) No.169/69/ID. dated 05/04/1969 and the Rules on assignment of land as per G.O(P) No.220/Rev. Dated 30/03/1994 do not allow alienation and encumbrance of land without the prior permission of Government/Director of Industries and Commence. Most of the industrial units set up in the industrial areas established by Government and Government Companies such as KINFRA, KSIDC and SIDCO need to obtain finance from banks and institutions for constructing factory buildings and other facilities required. Such finance will not be available if the units are not permitted to mortgage their leasehold rights on the land. As per the rules, industrial units are not allowed to sublet or alienate the land allotted to them. Sometimes change of ownership of industrial

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WA.55/16

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land is also necessitated. Of late, Revenue Department has been taking the stand that mortgage permission can not be granted for industrial land and also that land has to be resumed first and then reallotted for change of ownership.

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Both the above issues are creating serious difficulties for attracting new industrial units, especially in the SME sector.

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In the above circumstances, Government are pleased to order that all types of land allotment for industrial purpose as envisaged in the Government Orders read as first to third paper above will be (i) on lease basis only (ii) tenure of lease will be for a period of 30 years at a time and (iii) Director of Industries & Commerce is authorized to grant permission for mortgaging lease hold right and change of ownership.

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The Government Order read as fourth paper above stands cancelled.”

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That apart, it is contended that when the allotment has been

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made after the aforesaid Government Order, the petitioner cannot insist that a hire purchase agreement has to be executed by the District Industries Centre in favour of the petitioner. It is argued that

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WA.55/16 -:5:-

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the terms of allotment has to hold the field and, therefore, merely for the reason that the lease rules have not been framed so far, does not mean that direction can be issued by the learned Single Judge calling upon the appellants to execute a hire purchase agreement with the petitioner. On the other hand, the learned counsel appearing on behalf of the respondent would submit that insofar as lease rules have not been framed, Ext.P11 rules holds the field which only indicates execution of hire purchase agreement between the allottee and the District Industries Centre. That apart by Ext.P13, hire purchase agreement has been executed between the General Manager District Industries Centre and another allottee even after Ext.P12 rules coming into force.

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The learned Senior Government Pleader Sri.P.A.Davis,

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however, refers to Ground No.C of the appeal which is extracted hereunder:

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“C. It is submitted that GO(MS) 60/13/ID was issued on noticing large scale alienation of government

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lands allotted for industrial purpose. To safeguard Government lands and also to ensure that such lands are utilised for the purpose for which allotment was made, lease was introduced and insisted upon. It is also submitted that the department is ready to execute lease agreement with the petitioner. Though the General Manager, District Industries Centre, Palakkad requested the petitioner to execute the lease agreement, he was not willing to execute the lease agreement. It is also submitted that execution of lease will not in any way effect the beneficial enjoyment of the allotted land.”

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Having regard to the fact that the appellants have expressed

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their intention to execute lease deed, we are of the view that the writ appeal can be disposed of permitting the parties to enter into a lease deed within a specified time even if lease rules have not been framed for that purpose. In fact, a perusal of Ext.P5 only indicates that the allotment has to be made on lease basis. Hire purchase and lease are two different concepts which cannot go together. It is solely within the discretion of the District Industries Centre which allots the land in favour of an allottee to decide on the terms and conditions of the

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WA.55/16 -:7:-

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lease. Merely for the reason that Ext.P11 was in existence, in view of Ext.P12 order, definitely the Government had changed their policy to allot land only on lease basis. In such circumstance, we are of the

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view that the direction issued by the learned Single Judge can be modified and the appeal can be disposed of as under:

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That the parties shall execute a lease deed within a period of one month from the date of receipt of a copy of this judgment.

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The amount already paid by the allotee shall be adjusted towards the consideration for execution of lease agreement.

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Sd/-

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ASHOK BHUSHAN CHIEF JUSTICE

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Sd/- A.M.SHAFFIQUE JUDGE

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krj.3/2/16

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//true copy// P.A to Judge

State of Kerala v. Abdul Kareem

Case brief

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State of Kerala v. Abdul Kareem

Case brief

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