Pramod Kumar Agarwal Vs The State of Telangana

Petition^{under Article226 of the Constitutionof lndia prayingthat in the} circumstances^{stated in the affidavit filedtherewith' the HighCourtmay be} pleased to^{issue a Writ' Order or Direction.moreparticularlyone in the nature o[} a^{"Writ offVlandamus" declaring theproceedings Lr'No'State-} CelUClE.AlA&tM^{lEl2[24l3-3t1-31712dated20 03'2024 passed by the 4th} Respondent^{rejecting the applicationof the Petitioner to convert the land} belonging^{to the him admeasuring2499 Sq yards bearing Plot No'3'311to 317 in} Azamabad^{lndustrialEstate' Hyderabadfrom lease'hold to freehold in termsof} Clause^{17 (l) Category'A' of G O Ms No lg dated 29 08 '2023as being illegal'} arbitrary,^{malafideexercise of power' in grossviolationof principles of natural} justice and in^{contraventionof Section3 (3) of Azamabad lndustrialArea} (Termination^{and RegulationofLeases) (Amendment) Act' 2000 and}

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G.O.Ms.No.19 dated 29.O8.2023 issued by the ist Re:spondent and consequenfly direct the Respondents to convert the said land from rease hord to free hord by receiving 100o/o of the market value as falling under Clause 17 (l) Category ,A, in terms of G.O.Ms.No 19 dated 29.08.2023.

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Prayer amended as per C.O.dt.01.05.2 OZS in 1.A.No.2t2024.

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IA NO: 10F 2024

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petition under Section 1S 1 CpC praying that in the circumstances stated in the affidavit fired in support of the petition, the High court may be preased to direct the 1st and 4th Respondents to consider the apptication of the petitioner as falling under Clause 17 (l) Category ,A, in terms of G_o.lr,4s No.19 dated 29.08.2023 and recerve 1o0oh of the market value to to the^pertioner admeasurin s 24e9 Sq yards ,"rr,;:]:lJ::lT i:T l: Azamabad lndustrial Estate, Hyderabad from .ease hold to free hold fo(hwith.

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Counsel for the petitioner : SRI KANDURI KOUSHIK

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Counsel for the Respondents : SRI SWAROOP OORILLA, Spt.Gp FOR STATE OF rilerucarun

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The Court made the following: ORDER

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HON,BLE^{SRI JUSTICENAGESHBHEEMAPAXA}

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WRIT^{PETITIoN No.47L7oF 2024}

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OR DER:

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This Writ^{Petitionchallengestheactionof} Respondents^{1 and 4 in failingto convert the landLrelonging to} petitioner,^{admeasuring2499square yards in Plot Nos' 3' 3/ 1} to. 317^ro Azamabad'^{Industrial Estate' Hyderabadfrom} leasehold^to freehold^{as being illegal, arbitrary' malafide} exercise^{of powerand in contravention of G O'MsNo' 19 dated} 29.Oa.2O23^{issued by the l"trespondent' Consequently'a} direction^{is sought to respondents to process the Appiication of} petitioner^{as falling underCategory A'in terms of G'O Ms'No'19} dated' 29.08.2O23^{and receive100%of the market value to} convert^{the said land lrom lease holdto free hold'}

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Sri D'V'^{Seetharamamurthy'learned Senior} Counsel^{appearingon behalf of Sri Koushik Kanduri' learned} counsel^{for petitioner sutrmits that for the purpose of Economic} Development,^{the Nizam Governmentdur\ng 7927 formed a} committee^{consistingof (i) SuperintendingEngineer'City} Improvement^{Boardii) CommissionerMunicipalCorporation of} Hyderabad^{ii)Commissioner' City Police (iv) TheDirector'}

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Commercial Industries and (r) Superintending Engineer, Electricitv to select an area for industries and factories. The said Committees acquired land to an extent of Acs.136_04 guntas in Azamabad out of the funds provided by the Industrial Trust. Later, total area was divided into g6 plots of different srzes and leased out [o Industrialists who intended to set up industries and use the same for industrial purposes for a period of 99 years. The then Superintending Engineer, City Improvement Board handed over the prots in industrial Area to the Industrial Trust Fund through Lr. No. 9/37F /Tor8 dated 29.12.rgs2. rr is contended that the said Industrial Trust F.und acting for and on behalf of the Government of Hyderabad executed lease deeds in favour of M/s Shivdathrai Gutab Rai, a partnership firm consisting of four partners Gulabrai, prahalaclrai, Sunclermal and Bilas.ai. originally, M/s Shivdathrai Gurab Rai was allotted Plot No.3/ 7 uid.e Agreement of Lease dated rg.o7. 1946 and later plot Nos.3/2 to 3/7 uide Agreement of Lease dated 21.O1.1952 to set up Mahavir Cotton Spinning & Weaving Mills in an area admeasuring total extent of 22290 Sq. yards in Azamabad Industrial Area. petitioner is the son of one of the partners Sri prahaladrai, original allottee of lease. petitioner,s

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Petitioner^{have beenrn} familY 1.e. petitioner's^{father and} of the^{subjectProperty} absolute Possesslon^{and enjoYment} ut. of^{the said' tolal extent of} admeasuring^{2499 Sq' Yards o} an industry^{and undertaking} 22290^{Sq' YardsbY settinguP} industrial^activitY' Learned^{SeniorCounsel also contended that' to} curb^{the misuseof unauthorised use of Government land and} other^{irregularities and to prevent non-inciustrialuse and to} have^{uniformtermsand conditions of lease' the Government} enacted^{Azamabadlndustrial Area (Termination and Reguiation} of Leases)^{Act 15 of 1992 Under the said Act' all leases or other} arrangements^{made or entered into through registered deed or} otherwise^{in respect of all demisedplots in Azamabad Industrial} Area stood^{terminated on the appointedday ll'O7 lgg2 and the} persons^{in occupationof the lands were required to apply for a} fresh^{lease'Aggrievedby the said terminationof lease' several} Industrial^{Units of Azamabadhave hled Writ Petition No'12223} of 1994^{and batch before this Court to declare the said act as} unconstitutional'^{This Colr:l uide order dated18'O8' 1904} dismissecl^{the said Writ Petitions upholdingthe constitutional} validity of^{Act 15 of 1992' Aggrievedthereby' CivilAppeals No'}

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8852 of l9O4 and batch were filed in Supreme Court. By order dated 18.O4.1900, the said cases were disposed of on the assurance given by the State Government that Act 15 of 1992 would be suitably amended. It was directed that no action agalnst the Industries operating 1n the Industrial Area concerned should be taken under the said Act The Hon,ble Supreme Court also recorded the submission of the State Government that ProPosal of amendment has already been placed beibre the Cabinet and that no acrion regarding cancellation of I ease againsl that indusrries conccrned r.rould be taken

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It was contended that in view of the above order, the State Government amended the principal Act as Azamabad Industrial Area (Termination and Regulation of Leases) Amendment Act No. I ol 2000 which came into force il.. e. f. 17.o2.2ooo incorporating a provision for gralt of freehotd rights to the Inclustrial Units of Azamabad industrial Area. Accordingly, Section 3 was also suitably amended under which lessees were entitled to a fresh grant of lease from the appointed date and in lieu of the renewal of leases, the said lessees may opt for freehold rights in respect of the dernised p1ots. It was

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further^{contended that the 1"t respondentin exerciseof powers} conferred^{underSectio n 2lof the Act' issued G O'Ms'No 87} dated2o.o22oo2,wderwhichtheoccupants/lesseesonthe dateofappointeddaywererequiredtoapplyont'heirownfor conversion^{ol leasehold rightsto freehold rights by payinga} price equivale^{nt to 7 5o/o of the marketvalue as on 17 'O2'2OOO'} To the^{same effect, in 2004' Notification dated17 'O2 2OO4 was} issuecl^{invitingapplicationsin the prescribed format fromthe} occupant/^{industrialist for grant of freehold rights in Azamabad} Industrial^{Area under the provisions of Act 1 of 2OOOwithln30} days from^{the issuanceof Notification ln response'Petitioner} in the^{name of original allottee M/s Shivdatrai Gulabraimade} Application^{daLed 17 'O3'2O04' but there was no response from} the Respondents,^{therefore'petitioner madeseveral such} Applications^{as reminderson19'05'2O04'27 'O7 2OO4and} 08.02.2005'^{The 2'd Respondent uide lettet dated 02'08'2005} informed^{that a personal hearing was fixed on 22'O8'2OO5 an'd} askedtoproducedocumentaryevidence'ifanyinadditionto what has^{already been furnishedaiong with the Application'} attended Personal^{hearrng on} Petitioner^{along withothers} 22.Oa.2OOS^{and bY letter'} dated^{O1.09.2005,furnished}

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additional documents as requested. But, however, no decision was taken on the Application of petitioner along with severar other occupants/applicants despite making oral and r.r.ritten requests to receive the payment at Z Sok market value and convert the leasehold rights to freehold.

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Le arned Senior Counsel further submits that Government issued G.O.Ms.No.285, dated 24.7I-.2O0g in supersession of the earlier orders, fixing the market value for conversion of land by collecting market value at the rates prevailing as on 17.O2.2OOO. petitioner applied under the said GO but was of no avail as no demand was macle lbr payments and land u-as not converted to freehold and no sale deeds were executed in favour of any of the industrialist/ occupan ts despite numerous requests anci constant foliow up with the Authorities. Further it was contended that in 2O2O, the 1st Respondent directed the General Manager, District Industries Centre, Hyderabad to conduct a Joint Inspection along with officials of Revenue Department under the guidance of District CoUector to ascertain status of utilization of the ialds aliotted to Industrial Units. The Joint Inspection report was submitted stating that Sg units including TSRTC plots were in possession of various

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persons.^{The cabinet sub-committeefor resource mobilization'} in its^{meeting held on 25'06'2022'decided to extendfreehold} rights to^{all the units in the estate ln tune with the said} decision,^{GovernmentissuedaMemo No50 1 / IF&} INF/A1/2018^{d'ated' 29 08'2022decidingto issue freehold rights} by fixing^{the price for originalallotteesas 10070 of registration} value and^{2ooo/o for others.Petitioner in the name of the} original^{allotteeM/s Shivdatrai Gulabrai made representation} dated^{20.10. 2022 in terms of the above saidMemodated} 29.O8.2022^{alongwith all the necessary documentsrequesting} to convert^{the subjectiand to freehold'In responseto the} same, the^{1=t Respondent issued DemandNoticedated} 25.1O.2022^{demandingRs'242'96'77 '58Ol- (RupeesTwo} Hundred^{and Forty Two Crore Ninety Six LakhSevenlySeven} Thousand^{Five Hundredand Eighty Only) towardsfreehold} charges^{hxing the same at 2OOohof the market value ignortng} the fact^{that Petitioner and other owners of Plot Nos' 3' 3/ 1 to} 317 irr.Azamabad^{Industrial Estate'Hyderabad are the legal} heirs of^{originalallottees and are chargeable at 1O07o of the} market^{value. Petitioner along with others in responseto the} said demand^{notice, issued replydated 28'lO'2O22informing}

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that registration value as on that day was Rs.54,5OO/- per Sq. yard and when the same is calculated against the total extent, it comes to Rs. 121,4g,3g,790/- (Rupees one Hundred and rwenQz one crore Fortlr Eight Lakh Thirty Eight rhousand even Hundred and Ninet5r Only) and requested to amend the demand notice. It was further contended that despite repeated requests, no action rvas taken by the Respondent Authorities. That, Notice dated 14.Og.2O23 was issr_red to make payments towards freehold rights in accordance u,ith Demand Notice and in default, legal proceedings lvould be initiated for eviction In the said notice, rt is clearly mentioned that petitioner has not availed ther benefit by paying market value at 20O%o as per Memo dated 29 .Oa.2O22. The said Notrce q.,as served on 28'08'2023 for which reply dated 30.o8.2o23 was fired informing that they are the original allottees ald cannot be charged aL^,2OOo/o market value and no action was taken on the same till date. According to learned Senior counsel, the lsr Respondent issued G.O.Ms.No. 19 dated 29.Og.2o23 in supersessron of all the earlier orders and memo to regularize the industrial plots by granting freehold rights to the existing occupants in Azamabad Industrial Area. Under Clause 17 (l) of

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thesaidGO,IndustrialUnitshavebeencategorizedintotwo 'A' and Category^{B'' Category'A' is covered} categories^Category by (i)^{the units in possessionof the original allotteesincluding} their^{legal heirs whether workingor not working'(ii) whereas} per the^{joint inspectionreport' the plot is vacantand is in} possession^{of the originalallottees and industrialactivity has} taken^{place previously All other units excludingCategory 'A'} falls under^{Category 'B'' OriginalAllotteesfalling underCategory} 'A' are required^{to pay lOO% and Category 'B' are requiredto} 2OO%o^{ofthe market value asfreehold charges'Thal} pay G.O.Ms.No.19^{dated' 29 08'2023 is in tune with or reiteration} with certain^{clarificationsof the earlier Memo No'501 /IF &} INF/AI/2018^{daLed 29 'O8 '2022even under whichthe original} allottees^{were required to pay 100% of the market valueas} freehold^{charges and othersat 2OOok'}

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It is submitted^{that Petitionerbeing the legal heir of} theoriginalallotteeisrequiredtopayonlyl00%ofthemarket value and^{accordingly made Application dated2l 'lO '2023 to} Respondents^{that Petitioner along with others are willing to pay} 100% of^{the market value whichcomesto Rs' 121'48pa'79O1-} for the^{entire extentof 22290Sq' yards and requestedto grant}

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freehold rights and execute deeds separately to each of them in terms of G.O.Ms.No.19. As there was no reply from the Respondr:nts again, petitioner aiong with others made representation dated 12.02.2024 as a reminder ancl set out the entire background by stating all the applications made by the Petitioner since 2OO2 and how the same were kept pending by the Respondent Authorities lrrithout taking any action and demanding any amounts on all the occasions. Lastly, it was conLended that Section 3 (3) ofAct 1 of 2000 conlers a right on the leaseholders to opt for free hold in lieu of rcneu.al of lease. Therefore, the request of petitioner to convert his land to free hold is based on statutory rights conferred to him under Act 1 of 2000 and the same cannot be denied ard be kept pending forever after the formal guidelines for implementation of the same are issued Petitioner made Applications to Respondent Authorities four times under different Government orders, memos and ins[ructions since Section 3 (3) of Act 1 of 2OOO came rnto force and right has been created in favour of Petitioner but no finai decision has been taken and the same is arbitrary, illegal and amounts to dereliction of duties of the Respondent Authorities. Further, Clause 17 (i) ot G.O.Ms.No.

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19, dated^{29.08'2023 clearly stipulatesthat originalallotteeor} their^{legal heir falls underCategory'A'andClause17 (II) states} that^persons /^{occupants falling under Category 'A' are required} to pay^{1O0% of the market value' Therefore' Petitioner beinglhe} legal heir^{of original allottee is liable to pay only loOyo of the} market^{value and thesame cannot be disputedbythe} Respondent^{Authorities' Therefore'unless and until this Court} intervenes^{and directs the Respondent Authorities to consider} the Application^{of Pe[itioner for convcrsion of subjectland to} freehold^{in terms of Section 3(3) oi the Act Iof 2OOOand} Clause^{17 (1) Category 'A' of G'O'Ms'No19 dated 29 'Oa '2023} by collection^{lOO%of market value in accordance with Clause} 17^{(II), Petitionerwould be put to irreparableloss and grave} injury^{while alsosuffering monetaryloss'}

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Court^{uide order dated23 '2 '2024} 3. InitiallY,^this and^{4to considerthe APPiication of} directed^ResPondents1 Petitioner^{as fallingunder Clause 17 (l) Category'A' in termsof} G.O.Ms.No.l9^{dated29 'O8 '2023 and receive100%of the market} value^{to converthis land admeasuring2499 Sq' yards bearing} Plot.No.3,3/1^{to 317 in Azamabad- IndustrialEstate' Hyderabad} from lease-hold^{to freeholdforthwith' pending disposalof Writ}

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Petition. pursuant to the said rnterim direction, the 4h respondent i.e. Telangana State Industrial Infrastructure Corporation Ltd. had considered the representations of petrtioner and passed rejection order dated 2O.3.2O24 stating that petitioner is not eligible under Category A of Clause 17. 4. Learned Special Government pleader Sri Su,aroop Oorilla appearing on behalf of learned Government pleader for lndustries & Commerce admits formation of Committec by Nizam Government and acquisition of land from out o1. the funds provided by the Inclustrial Trust F.und and leasing out to industrialists for industrial purposes for a period of 99 years. The then Superintending Engineer, City Improvement Board had handed over the plots in the Industrial Area to the Industrial Trust Fund through letter datecl 29_12_lgJ2. However, later on, to curb misuse/unauthorrzed use of Government land, other irreguiarities, viola[ions and to prevent non-industrial use and to have uniform terms and conditions of lease, the Government enacted Azarrrabad Industrial Area (Termination and Regulation of (Leases) Act 1S of i992. F.urther it was contended that, under Section 3(1), all leases or other arrangements made or entered into through a registered deed or

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otherwise^{rnrespect of all demisedPlotsin the Azamabad} stand^{terminated on the appointed date i'e '} Industrial^Area, ll.O7^{.1992 ar'dconsequentlY, allsub-leases or any ot ner} whatsoever^made by the Person/entityⁱⁿ arrangements the^demlsed Plot^stand hold Possession^of occuPation^to annulled^{and every such demisedplot vests in the Government} free^{from all encumbrancesand shall be used subsequentlyfor} industrial^{purposeonly. UnderSection 4(1), on termination of} lease^{or other arrangement underSection 3(1)' the person in} occupation^{may at his option apply for a fresh lease in the} Further,^{it was contended that Government} manner Prescribed' under^{theLzamabad IndustrialArea} also issued^rules (Termination^{& Regutationof Leases) Act' 1992'r''ide G'O'Ms'} No. 155^{dated 06'O4'1992and the Commissionerof industries} was aPPointed^{as CompetentAuthorityuid'e G'O Ms'No' 154} Inds. &^Com (IF-Ce11)^{Departmentdated06 04 1993' The} Government^{also issued rules under the Azamabad Industrial} Area^{(Termination& Regulation of Leases) Act' 1992' uide G'O'} Ms No'^{155 dated ()6j,4j992 and the Commissionerof} Industries^{was appointedas CompetentAuthority under the Act} uideG.O^{Ms. No' 154 dated 06'O4' 1993'}

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Learned Special Government pleader submits that aggrieved by the same, several industrial units of Azamabad filed Writ petitions to declare Azamabad Industrial Area (Termination and Reguration of Leases) Act No. 15 of 1992 as unconstitutional, violative of Articles I4, 19(i) (g) 30O_A of the Constitution of India. The Hon,ble Division Bench urde judgment dated 10.08.1994 held that it was within the competence of the Legislatut: to make law with retrospective effect or incorporate a deeming provision and all the Writ petitions r,r.ere dismissed Aggrieved by the said judgment, batch of Speciar leave pctitions rvere filed and the Supreme Court on the assurance given by the State Government that Act No. 75 of 1992 would suitably be amended, disposed of the Special reave petitions as infructuous and directed that no action against the inclustries operating in the industrial area concerned should be taken under the Act, 7992. It was also noted by the Court that a submrssion by the Counsel representing ttre State was made that the proposal of amendment of the Act had already been placed before the Cabinet and that no action regarding cancellation of leases etc, against that industries concerned shall be taken under the rmpugned Act.

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Further,^{it wascontended that in view of the above} the PrinciPal^Actas orders,^{the State Governmentamended} and Regulation^of Azamarrad^{IndustrialArea (Termination} Leases)^{Amendment Act No' 1 of 2000 which came into force} with effect^{from 17 'O2 2OOO incorporatinga provisionfor grant} of freehold^{rights to the unit holders in the AzamabadIndustrial} Area.^{Accordingly, Section (3) of the Azarr;abadIndustrialArea'} (Termination^{d Regulation of leases)Act No t of 1992 hasbeen} amended^{toterminate allleases'sub-leasesorother} arrangements^{made or enteredinto through a registereddeedor} otherwise,^{in case of misusingthe land for other purposes'} unauthorized^{sub-lettingor transferring the plots or portions'} entering^{into disguisedpartnershipsor violationof any termsof} the lease^{deed as per Section 3 (b) and all those lessees who do} not fall^{under the saidSection were to be entitledto a grantof} fresh^{lease from the appointed date and in lieu of renewal of} lease^{may opt for free-holdrights in respect of demised plots'} Under^{Section4, on termination of lease or other arrangements} made under^{Section 3(I)(a)' a person in occupationand running} an industry^{on the appointed date may apply for a fresh lease in} the manner^{prescribed' It was contended that in view of the}

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above, Press Notihcation d.ated, 17 .02.2004 was issued and Applications were received from several persons seeking freehold rights of rhe government land in the Estate. After consideration, 24 applicants were erroneously found to be eligible for freehold rights. Upon exercise of review by the Government under Secdon lO of the Act, 15 of such applicants were lbund to be ineligible ibr freehold rights. Further, inquiry conducted by the vigilance department a nd the report dated 1Z .OS.2O2O thereof rcveals th.rt the provisional allotment letters which u,ere issued are in conrravention of the provisions of the Azambad Act. The report further recommended ceaslng all the provisional allotment Letters for free hold rights which were grante<i. Following such inquiry, disciplinary action was recommended bv the Director of vigilance and enforcement against the then officers responsible for such erroneous issuance ol allotment letters. In any case, aliotment letters were only provisional in nature and since no amounts were received from the applicants nor sale deeds registered in their names, no vested rights in the property accrues to applicants. Therefore, no liesh lease nor freehold rights were granted to any of the unit horders and arl the leases in the Azamabad industrial Area stood terminated by

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virtue^{ofSection3(1)(a)of the AzamabadIndustriaiArea} (Termination^{and Regulation of leases) Amendment Act 20OO'} Further^{it was specifically contendedthat} thereafter,^{Joint lnspection of the Azamabad IndustrialEstate} was conducted^{and the report thereofwas furnished by the} General^{Manager, District Industrial Centre'Musheerabadto} Respondent^{No'2 uideletter datedO1 04 '2022 ' The report dated} O1.O4.2O22^{revealedthat despiteterminationof leases of the} unit^{holders in accordance with the AzamabadIndustrialarea} Amendment^{Act, 2000, there are Currently 58 units inthe} estate,^{most of them in possession of sub-tenants/occupants} and not^{the original allottees Furtherseveral requests were} received^{from the unitholders secking freehold rights'} Thereafter,^{the Cabinet subcommittee on resource mobilization'} in its^{meetingheld on 25'6'2022'had decided to extend freehold} rights^{to all the unit holders' After careful examination'the} Government^{ui-d-eMemo dated 29'08 2022 decided to issue} freehold^{rights in respect of the Governmentland in Azamabad} Industrial^{Estate by fixing the rates for thesetwo categoriesof} units as original^{allottees: 100% of registration value and} others: 2ooy"^{ofregistrationvalue and MD, TSIIC(4t}'}

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respondent) \4,as nominated as competent authoritlr/ nodal agency. It was also contended that on further examination of the issue and following the observations made by the Hon,ble High Court in order dated 23.06.2023 in Writ Appeal No.634 of 2023, that a policy, guidelines and rules regarding regularization of property concerned may be framed after following proper procedure, with appropriate sanctions and approvals uide Government Order, clearly delineating the appropnat!- reasons and objects behind the said poticy decision of the Go.,,ernment ancl the class of persons entitled to be regularized shall be specifically mentioned without any scope for ambiguiq,, Memo dated 29.Oa.2022 was withdrawn and G.O.Ms.No. i9 dated 29.Og.2O23 was issued by the Government. It wss f1111fu6r contended that, in the present case, original allottee of prots No.3, 3/ 1 ro 3/7 is M/s shivdutt Rai Gulab Rai. Petitioner has to establish before Respondent No.4 that he tvould not fall under category B of G.O.Ms.No. 19 dated 29.O8.2023. Since, according to Respondent No.4, petitioner falls under category B. reasons are (i) there is no industriai unit as required under G.O.Ms.No.19 d,ated 29.08.2023, (ii) plot is not vacant u.ith proof of industrial activity to have taken place

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previously^{in the allotted plot' (iii) though petitioner has come} into Possesslon through^{the original allottee' there rs} no It u'as^vehementlY permlssron^{accordedbY the Government} contended^{that in the allotted plot' presentlysome third partles} arerunningcommercialactivitieswhohappentohesub-lessees of petitioner.^{Originally' Plots 3'3/ 1 to 317 ' tnLzamabad} Industrial^{Area had been given on lease to M/ s ShivdatRai} GulabRaiforggyearsforsettingupofspinningandWeaving Milis in^{the year 1952' Thereafter' Inspection Report datecl} O3.O2.lg7g,Mr^{MukundLal' Sri Amruittal' Sri Madusudan' Sri} Aravind^{Komarand Mr Bharath Kumar as partners of Super} Steel^{Distributorsand Manufacturerswent into production in} November^{lg77 'ltwas also stated in the Inspectionreport that} Mahaveer^{spinning Waste Plant is a partnership hrm occupying} 2383^{sq yards and was runningat the time of inspectionand} improved^{the production activities'Thereafter' partitionwas} affectedamongthelegalheirsandthreeapplicationsweremade tot'lreGovernmentseekingrecognitionofsucharrangementand for execution^{of leasedeeds to that effect' The request of the} occupants^ofPlot No.3,3ll^to 317 was^forwardedto 03-04-1979^witha ktter^dated Government^uide

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recommendation to allow one year time for establishing their respective prants. in the meanwh e, due to lrnauthorised sub_ let ting constructions/alterations. show cause nolice was issued on O4.O7.1929 and they have replied on Og.O7.Ig7g. Finally, they were clirected not to take up any additional unauthorized constructron / alterations ttll a decision is taken by the Government on their representations for establishing their respective units uide Letter dated 29.Og.lg|g. Further based on the representations made by all the partners, a meeting lr.as conducted bv Additional DI, RDO and DDTC and decided thc entire pror No.3, 3/1 to 3/7 to be divided to aI the partners and the Government was addressed uid.e Lr.No. 14gTO/t AA/23, ciated 12.07.19g4 recommending the extent of acres to be allotted ancl lease deeds to be executecl separately i.e. 1) Gulab Rai - 3O76.5O Sq.yards, 2) prahlad Rai _ 6527.5O Sq.yards, 3) Sunder Mal 7092.50 Sq.Yards and 4) Bilas Rai Z431.SO Sq.Yards i:r all total 24128.OO Sq.yards. However, the Government sought certain clarihcation on the above proposais The Director of Industries furnished their reports on 19- i 1-1985, o2_O7_7986, 05_08_1986 The Government again requested for some more information on 06-Og_i9g6. After

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uide DO^Letter protracted^{correspondence'the Government} of Industries^to dated^{2O-O7- 1989requestedthe Director} conduct^{physicalverihcation of plots and furnishmodiireddraft} show^{cause notices as per the opmlonof the Government} Pieader.^{The Supervisor' AIA' Hyderabad} on 28-07-1949 inspected^{the area in PIot Nos 3' 3llto 317 and reported the} extenl^{of areas under the possession of each Partneralong with} the^{particularsof sub-lessees'According to the sketch' the total} extent^{of area otall plots is comingto 2338Osq yards' However'} the^{Governmentto the Partltlon} was^givenbY no apProval affected^bY the legal^{heirsof the originalallottee among} themselves.^{At this juncture'to curb misuseof the Government} lands at^{Azamabad'Industrial Area' The Azamabad'Industrial} Area^{(Terminationand Regulation of Leases)Act' 1992 came to} be enacted.^{Further 1t was also contendedthat the Joint} Inspection^{report dated Ol 'O4 '2022} '^{reveals that Plot Nos3 ' 3 / 1} Lo 317 are^{presently inoccupation of severallegal heirs of} allottee.^{The Inspection report alsorevealsthat no} original industrialunitiSbeingoperatedbythelegalheirsinthesaid plot. However,^{the plot is also not vacant' Instead' the legal} heirs in^{occupation of the subjectplot haveillegally iet out}

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portions oI the plot to ser.eral business concerns such as M/s Sai Balaji packaging, M/s R R Offset printers, M/s Deepti Printers, M/s Big Appre on rent, to run their respective commercial businesses. Category A, covers those plots, where an industrial unit is present either in working condition or non_ working condition (dormant) {Category A (1Xr)) or where there is no Industrial unit at all and the plot is vacant, but Industrial activitv h:rd taken place previously in the said plot {Category A(1)tii)) or u,here the unit. holders came into possession of the plot after obtaining permission of the Government. tsut, it clbes not include those plots which do not fall within either of these conditions. In the present matter, the subject plot neither has an operational/ dormant industrial unit nor is the plot vacant. Instead, portions of plot have been let out to business entities and thereb-r. personal commercial gains/rent are being made out of the Government land illegally. Further, the internal arrangemen t/ partition made by the petitioner has not been approved b1- the Government. Therefore, the subject plot does not fall under Category A of clause 17 of G.O.Ms.No. 19 dated 29.O8.2O23. Lastly, it v,as contended that Section 3(3) of Azamabad Industrial Area (Terrnination and regulation of leases)

¶76

23

¶77

Act,^{200O providedthat lessees whose lease did not stand} terminatedontheappointeddateasperSection3(1)(a)shall have^{the option of being granted freehold rights in lieu of fresh} lease^{underSection 3(3)' however' the very leaseitselfstands} terminated^{for those lesseeswho fall under any of the categories} mentionedinSection3(1)(b),whichincludes(i)misusingofiand for a^{purpose other than the purpose for which land was} allotted^{includrngnon-user; or (ii) sub- lettingor transferring} the plots^{or portions of piots by entering into disguised} partnerships^{and other unauthorised transfer o[ interest in the} plot; or^{(iii) violation of any terms' conditions or covenant} specihed^{in the Lease Deed' It is submitted that' even as early} asl,g1g,theallotteesofthesubjectplotresortedtoillegalsubletting^{againstu'hichshow cause notice dated 04 'O7 '1979was} issued^{againsL them Further' the partition/ internal divisionof} the^{plot by the legal heirs of the wholeplot aliottedto original} allottee^{is not recognised or approved by the Government'} Therefore,^{Petitionercannot takerecourseof Section 3(3) of the} Act.

¶78

5 Thereafter, Petrtroner^{had taken out I.A.No 2 of} 2024 seeking^{amendment of the prayer' In the said Application'}

¶79

24

¶80

it is contended that this Court by order dated 23.02.2024 directed the Respondent Authorities to consider the application of Petitioner as falling under Clause 17 (1) Category ,A, in terms of G.O.Ms. No. 19 dated 29.Og.2O23 and receive 100% of the market v:rlue to convert the land belonging to petitioner from lease holcl to free hold. The 4ur Responder_rt ulde proceedings dated 20.O3.2024 passed orders disposing petitioner,s application holding that it is found to be not eligible under Category A of G.O.Ms.No. l9 dated 29.Og.2023. Contending that impugned proceedings dated 20.o3.2024 passed without any application of mind and the same is conrrary to record the amendment petition is filed by petitioner seeking amendment of the prayer in the main u,rit petition which was allowed bv this 6 It was contended by Respondents 1 and 2 in the additional counter that admitteclly, petitioner entered into unauthorized partnership and had leL out the subject plot to third parties without the approval of the Government. while originally, the plot was leased to the original allottee for the purpose of establishing Spinning and weaving mil1s, according to the joint inspection report of 2022, fne third parties currently in occupation are utilising the valuable Go'ernment rand as

¶81

25

¶82

godov/ns^{and for other commercialbusiness not amountingto} Industrial^{purposes'This is a direct and irrefutable violationof} Section^{3(1) (b) of the Azamabad Industrial Area (Termination} leases)^{AmendmentAct' 2O0O' That'the} and^regulationof dated^{2O.3.2O24 has been Passed in} impugned^order G.O.Ms.No.19^{dated 29'O82023'Itwas} accordance^with contended^{that,no Industrial unit is present in the subject plots} 2022 arlid^instead,the as per^{the Joint InsPection report'} godowns^{and to run} subject^{plots are being utilisedas} commercial^{businessesTherefore'the imPugned Proceedings} d.ated'^{2O.3.2O24righllyheid that the Petitioner is not eligible} under^{Category'A' of G O'Ms'No' 19 dated 2908 '2023 ' lt was} alsocontendedthatonverifyingtherecordandtheapplication ltledbeforetheTSilC/RespondentNo.4,itisfoundthat petitioner never fi1ed^{any document referringto partnershipwith} the third^{parties' More particularly'Petitioner has nQt filed the} partnership^{deeds that are now being ltled alongwith I'A No'2} of 2024^{inW'P No'4719 of 2024'Therefore' friing new} documents^{by the Petitioner after rejectionorder dated} 20.3.2024^{passed by RespondentNo'4 is totally untenable and}

¶83

26

¶84

can be treated as invented for the purpose of relief claimed in the present Writ petition

¶85

It was contended that by virtue of the 2O0O Act, upon conducting due enquiry, it is clear that if a person is falling in any of the conditions stipulated in Section 3(1)(b), his lease is liable to be cancelled automatically. The Inspection report da ted Ol .O4.2O22 which is part of the enquiry by respondents clearly demonstrates the fact that lease of the original allottee/iegar heir stands terminated automatically in terms of the Section 3(1)(a) r/n Sectron 3(i)(b) as the report clearly divulges the fact that some third parties are conducting business ',r'hich is not in tune/ line with the definition of the Section 2(b) and 2(d) of the Azamabad Industrial Area (Termination ald Regulation of leases)Ac t, 7gg2. 7. Sri L.^prabhakar Reddy, learned Standing Counsel for the 4& respondent contends drat Governmen[ made amendments to Azmabad Industrial Area (Termination and Regulation of Leases) Amendment Act, 1 of 2OOO by making necessary amendment to Section 3, giving option of freehold rights. Pursuant to the said amendments, G.Os were issued from time to time including GoMs No. 19 dated 29-08_2023 in

¶86

27

¶87

supersession^{of earlierorders Under the said G'O the} Government^{nominated the 4tr' respondentas Nodal Agency /} Competent^{Authorityfor extending freehold rights in respectof} Azambad^{IndustrialEstate in accordance with the guidelines} stipulated^{there underand toexecute sale deeds,etcetera'} Under^{the said GOMs' No' 19' dated 29-082023 two categorles} weremad.e.Undercategory(AXt)theunitsinpossessionofall the original^{allottees including their legal heirs whether working} or not^working; (ii) whereas^{as per joint inspecttonreport of} 2022^submitted by the^{officials ofrevenue &industries} plot is vacant^{and is in possessionof the} department,^the and industrial^{activityhas taken place} original^allottee previously^{in the allottedplot (iii)Theunit holders who came} into^{possession of the unit through the original aliotteeafter} obtaining^{permissionof the Government shallalso be treated as} eligible^{under this "A" category' The registration value of 10O%} in accordance^{with the guidelines of the registration department} as on date^{of registration are liable to be charged' In category-} "B" all units^{excluded under "A" categoryand in possessionof} unit holders^{as per the joint inspection report 2022 submitted} by the^{officials of revenue and industriesdepartmentwould}

¶88

28

¶89

come. That the registration value of 2OOok is in accordance of guidelines of registration department as on the date of registration are liable to be charged. The Petitioner claim as legal heir of original allottee ancl comes under category ,,A,, of the above GOMs No. 19 dated 29.Og.2O23 is totallv vague, incorrect and specihcally denied. Therefore the claim that the petitioner is willing to pav looyo of the market value is tota.lly untenable and unsustainable. As a matter of fact, letter dated 14_06-2010 made by petitioner was duly considered by the 4tr, Respondent, in terms of the orders of this Court d.ated 23.02.2024 and claim of petitioncr to treat him under category A,of the said G.O was rejected by passing a reasoned order in letter dated 2O.O3.2024. The petitioner plot neither an operational/dormant industrial unit nor is vacant, on the other hand, portions of the plot was let out by petitioner to the other business entities other than industrial purpose namery - for commerciar purpose u,ithout obtaining any permission from the Governmen t. Thus the petitioner unit does not come under Clauses (i), (ii) & (iii) of category A'of the said G.O.Ms. No. 19, d,ated 29.O8.2O23.

¶90

29

¶91

Learned.^{Special GovernmentPleader'while} 8. his submissions,^{had reiied on the following} concluding

¶92

judgments.

¶93

i. The State^{ofRaiasthan u'SharwdnKumdr} ii. Kumanaatl.coromandel^Mining N'P-'^{No:1 AND 03 6 Exports-:*'.L:!, "4 ;f 20 1 s & batctt)'} ir;;;;;;;;i;

¶94

Petitioner^{hled reply to the counter of Respondents} g. I and2.^{Learnedcounsel for petitioner based on the said reply} submits^{that G O'Ms' No ig'dated 29 'O8'2O23 was issued with} avowed^{object of conversion of leaseholdlands in Lzamabad} Industrial^{Area into freehold lands subject to the criteriaset out} in the^{said GO To beginwith' the State Governmentconstituted} a Joint^InsPectton Committee comPrising^{Ofhcials ofthe} with those^{of theRevenue} Industries^{DePartmentalong} Department^{to ascertain the statusof the utilizationof the lands} allotted^{to industrial units and to submit a joint inspection} report^{to the government' As set out in para 12 of LLre said GO'} Joint Inspection^{Report was submitted on 01 '04'2 O22 to the} effect that^{majority of the units have violated the terms of the} lease and^{were found as not fulhlling the objectives of the} '^{2c23 Lire Law(SC) 586}

¶95

30

¶96

allotments and that the Industrial units r,vere found to be run by sub tenants/occupiers. It is further stated that the State Government request from such occupants for grant of free hold rights over the lands In those circumstances, tt appears that the Government constituted a Cabinet Sub_Committee for resource mobilization. The said Committee in its meeting held on 25.06.2022 decided to extend freehold rights to all units in the estate. Thereafter, as set out in the GO, revieu. meeting were conducted on O5.O7.2022 and 16.07.2022 try the Chief Secretary on thc course of action to be :rdopted for extending free hold rights to the o66up2n1s of land to [hree Inclustrial Estates which include the Azamabad Industrial Estate. From the above, rt is clear that notwithstanding the fact that the Joint Inspec tion Report disclosed that majority of the units violated the terms of the lease and were found not be fulfilling the objectives oI the aliotment and that most of the industry units were found to be run by sub- tenant/occupiers, rhe State Government decided to extend grant of freehold rights over the said lands. it is therefore, clear that violation of the condition of lease or failing to fulhl the objectives of the allotment by the lease holders $,as not treated as a material fact for the purpose

¶97

3l

¶98

of conversion^{of lease hold to free hold' In that view of the} matter,^{variousavermentsin the Additional CounterAfhdavit} and^{reference to Section3(1)(b) of the Act' 2OO0 are wholly} irrelevant^{for the purposeof the present writ petition lt was} further^{contendedthat in G'O'Ms No 19' the State Government} on further^{examinationof the issueand taking into accountthe} observation^{made by this Hon'bleCourt inorderdated} 23.06.2023^{in WA No'634 ol 2023set out the policyguidelines} andrulesregardingregularizationoftheproperty.Thereupon, Government^{categorized the lndustriai Estate into Category'A'} and^'B Category^{'A' Sub Category (i) relates to units1n} possession^{of the originalallottees includingtheir legal heirs} whether^{workingor not' Sub Category (i) refers to plots which} are vacant^{and are in the possessionof the original allotteeand} place PreviouslY^inthe where^{industrial activity had taken} to unit^{holders who came} allotted^{plot.Sub Category(ii) relates} into^{possessionof the Unit through the original allottees' after} obtaining^{permission of the Govt' CategoryB comprisesall other} unitsexcludingthoseSetoutinCategory'A'andinpossession of the respective^{unit holders as per the joint inspection report} of 2022.^{Thus, the requirementdelineatedin Category A (i) are}

¶99

i2

¶100

that the original allottees or their iegal representative should be ln possession of the unit rvhether or not there is aly manufacturing activity in the said Unit The Petitioners case is that there are the legal representatives of the original allottee and are in possession of the units. That, serial No.24 of the Joint Inspection Report datecl 1.4.2022 relates to the subject lands. Under the colqlnn which relates to name of the Company/Allottee along with the address (Name of the Original Atlottee) the name of Shiva Dut Rai Gulab Rai MC Mills is mentioned. The said Shiva Dut Rai Gulab Rai is the grandfather of the pedtioner. Under column relating to details of the present occupier it was mentioned as regar heirs of shiva Dut Rai Gulab Rai MC Mills, the original allottee. Under the column relating if leased/lessor name, it is mentioned as legal heirs of Shiva Dut Rai are using oflice and let out to Sai Balaji packing, RR Offset printers and Deepthi printers. Therefore, what has been set out in the Joint Inspection Report is that the originai allottee was the grandfather of the petitioner and the Petitioner is in occupation in their capacit5z of legal heirs of the original allottee and some parts have been allegedly leased in

¶101

33

¶102

favour^{of Sai Balaji Packing'RR Offset Printers andDeePthi} printers.

¶103

It was further^{contendedthat impugned orderdated} 20.o3.2024^{iswithout any application of mind as the 4d'} Respondent^{failed to understand the issue in correct perspective} inasmuch^{as the fact that'once it is not disputedthat Petitioner} is the^{legal heir of the originalallottee and being in possessLon'} his Application^{directlyfalis under Clause 17 (1) Category 'A' of} 29 .O8.2023^{andtherefore'the4t]'} G.O.Ms.No.19^dated considered^{the case of Petitionerunder} respondent^oughthave relevant^{rule without any self- imposedrestric[ions The order of} the 4ft^{Respondentonly containsthe extractof the relevant para} of GO^{and the order is wholly withoutany application of mind} and bereft^{of any reasons much less valid and justihabie} reasons.ThecontentionofRespondentsthatPetitionerviolated Section^{3(1)(b) of2OO0Act is without any merit for the same} was not^{preceded by any enquiryas contemplated under Section} 3(1)(a).^{Petitioner wasundertakingindustriai activity as on the} appointed^{date of cominginto force the Amendment Act' 20O0} and once^{no action has been taken r'rnder 3(1)(a)read with} 3(1)(b) of^{20OO Act for termination of leases' Petitioner is eligibie}

¶104

34

¶105

for grant of free hold nights uncler Section S (3). petitioner had been making Applications and representations since 2OO4 under every new s6hgrng / policy/ Go of the Stare Government introduced for grant of free hold rights, right from 2OO4 to the latest being in 2024 and had also attended personal hearing but never a final decision was taken by Respondents granting free hold rights to any of the lessees and the requests were put off on one prctext or the other. Therefore, after this length of time and after accruar of rights in favour of petitioner under Section 3 (3), ir is not open for Responcrents to arege that petitioner violated Section 3(1)(b) of rhe 2OOO Acr. Ir was vehementiy contended that the issue for consideration of this Court in the present /zs is u,hether petitioner violated Section 3 (1)(b) of 2OOO Act or r.T'hether lease of petitioner is to be terminatecr or determined but the issue for consideration is whether petitioner as a legai heir of the original allottee is in possession or not to fa,ll under Category^,A, of G.O.Ms. No. 19 dated 29 O8.2O23. Trre Joint Inspection report as well as the impugned order dated 2O.O3.2O24 of the 4ff Respondent and also in the counter affidavit filed by Respondents 1 and 2, they have categorically stated that several legal heirs of the Original allottee are in

¶106

35

¶107

of the^{subject land and oncethe sameis admitted'} possesslon Respondents^{are obligatedto considerthe case of Petitioneras} falling^{under Category'A'of G O'Ms No 19 dated 29 'O8'2023 ' lt} was further^{contendedthat accordingto G'O Ms' No' 19 dated} 2g.oa.2o23,onceitisnotdisputedthatPetitioneristhelegal heir of^{the original ailottee'his Application directlyfalls under} Clause^{17 (1) Category'A'and the samecannotbe deniedon the} solegroundthatnoindustrialactivityisgoingon.TheState Governmentasearlyasin2o04byapressnotifiCationmadea conscious^{decision to shift industrial activity fromAzamabad'as} by that^{time it was surrounded by thickresidential population} and had^{also imposedrestrictions throughthe Pollution Control} Board^{to restrict industrial activity atAzarl;rabadPetitioner} found^{it difhcult to run industrialactivityin the subject landas} proper^{permissions-were denied by the StateGovernment and in} tune with^{the decisionof the Government'gradually industrial} activit5r^{had come to a standstiii at Azamabad IndustrialArea'} TheStateGovernment,ontheonehand,tookadecisiontoshift industrial^{activityout of Azamabad and on the other' denied} benefits to^{Peti.tioneron the groundthat no industrial activity is} taking^{place in the subjectland' The Joint Inspection Report' in}

¶108

Jt)

¶109

unequivocal terms under the heading present occupier, states that legal heirs of original allotee Shiva Dut Rai Gulab Rar are in possession and occupation. The impugned order dated 2O.O3.2O24 while erroneously rejecting the Application also states that several legal heirs of onginal allottee are in possession of the subject land and further. in the earlier counter liled by this Respondent also, it 1S categoricaily mentioned that legal heirs are in possession of lands Section 3 (l)(a) of the 200O Act clearly states, an enquirv needs to be conducted before taking any action under Section 3 (1)(b) of the 2O00 Act. Further, the statement of objects and reasons of the Amendment Act, 2OO0 clearly states that automattc termination under the Act, 7gg2 w.as chalenged before this court and later was carried to the Hon,be Supreme Court and that the Government considered it necessary to amend the Act suitably by making a special provision to follou, due procedure of show cause notice for termination of existing leases_ Therefore, the statement t.hat lease has been automatically terminated is misconceived and without any merit 10. This Court has given an:rious attention to the rival submissions of both the parties and perused the entire record.

¶110

37

¶111

In order^{to resolve the present lis' it is appositeto have a look at} the relevant^{provisionsof law and G'O dealing with the said} issue.^{The relevant portion of G'O Ms'No' 19' dated29Oa '2023}

¶112

is extracted^hereunder:

¶113

and after '^careful 17 ' ln^{considera.'ioi'} such^{circumstances the matter was oi lft"matter governm€nl examined has decided loin detail} issue lreehold^{rightsro t"t t;J;;;;;up"ot"ii"o"-"tti"ristsin Azamabad} Industrial Area^{nctora"'gti' GovTrnmentin supersession o[ theorders} i""" the^{fotlowing ordersin} issued order to in^{regulari"" reference tttt 4thlo it'au"tliJ"p;t: 9u;;;t.'i"/} industrialists^{in Azamabad} Industrial^Area;. "#;#;";;;tuy The units^{in the Azaamabad Industrial^-Estateshall be} categorised^{into the following trvocategorles:}

¶114

CATECORY^{A -}

¶115

(i) rhe unitsⁱⁿ ro9s1ssi11 :i^'l]."t-l:^{orisinalallottees} it'<:fttJittg^{tleirlegat heirs whetherworking or not} working. report of²⁰²² (ii) Wnttt'^{-"" p"t the joint} ]""ft-:l:t itt" Lfrrcials^{of ret'enue and industries} "'ut'iiitiiy ' atpttrri'^{tf-t" plot is vacant'and is in positionof} tnt'-oti*"i"i "rrJtttt^{ttta industriatactivity has} t"kt;;A';^{previouslv in the allotted plot'} who came^{intopossession of the unit} (iii) t" "'ii^rioia"ts t#;;;* ;' - o'igi""t 'ttoitee after obtaining pt:'ili?"iot'^{of the governmentsha1l also be treated} as eligible^{under this category'}

¶116

CATEGORY^{B -}

¶117

All other^{unitsexcludinggale'gory A' in possession of}

¶118

(0 tn"^{'t""ptttf"t ut'iiholdits as per the- joint} t-or iozz^{submittedbv the ofncials}

¶119

t":"":;i;;;;;' or 'Lt,,"t''"^{a;dindustries department} ;r tLe'ract^{that the originar}

¶120

rL G""";;""';i:^;;;i;;; ,r."ji'""*"tt^{tl.,"'ilt;tto respondto Government'scall} ot itta'o'"titri"tit" "r^{trrt State and for that cause} t""'"i;-"ti;1;'li''' -o""v^{and efforts to create} state leading^to

¶121

trnprolit""i"'iot^{the people of} 'the the rate^{for these unit}

¶122

dt"ti;'o;;":^{oi-ttti^} "tit"''roed t'trat"!'"i 'ioo'2" oi regi"itation value and for others at uh"t' even^{thoushthe same is far}

¶123

'?oo'l'^;;;;;;;;tio" bel"* 1't" ?ttt"iring^{marketvalue' in recognition of}

¶124

38

¶125

their efforts. According., the Government has rr_xed the rates of these trvo categories "" iotturu",

¶126

Category A: IOO1" of the registration value as on date (i.e. date of. registration)^{-i" -l..o.aro."} with the guidelines of the Registratio, O.f.it*"rt.

¶127

Categoq- B: 2OO.t. _of the registration value as on date (t . 11!. of. registration) "t.,-- li.o.au.r". with the guidelines of thc Registratio. O.jriirn.,lt.

¶128

IIL In view of the fact that the Azamabad Industrial area is now in the. heart of the .ify "u..ounaeA by residcntial area and in.order to encourage tt"". iarOr"t,." to change-their line of actiyitJ. a .-.rrrr-,r-".r,ally friendlv activitiactivities permifted in the lrea .. a ai""."if, i,r,..Iifi.r. n"." "^{:+ &i,i:' :'f"#" iiiiJTl; ;H,:.ll} "tnt anv ofher categoa. rlu_11- collectino tfre reouired lee as per GHMC rates_

¶129

1 1 .

¶130

Azamabad Industrial Area (Termination ancl

¶131

Regulation of Leases) Amendment Act No.1 of 2O0O came into force with effect from 1T.O2.2OOO. The relevant provisions are extracted hereunder:

¶132

. Tercrination of Leases: Section 3 (ll(a) Notwithstanding anything contained in the Indian Contract Act, 1872, the Transfer of propert_', Act, 1gg2, or any other lau, for the time being in force, and the terms and conditions of any lease entered into or other arrangeme[t mad( demised prot either o" ,n. ;";;1.T;f:T"::,;."::'i. L il: erstwhlle Government of Hyderabad or by the Govemment oI Andhra Pradesh prior to the appointed date, all those reases, sub leases or other arrangements made or entered into through a registered deerl or otherwise in respect of all demised plots in Azamabad Industnal Area which after due enquiry attract one or more of the ground for cancellation of lease as specified in clause (b) shall stand terminated

¶133

39

¶134

on the^{appoi[teddateartdthere upon all such leases' sutr-leases or} any^{otherarrangementwhatsoevermadeby the personin occupation} ofthedemisedplotshallstandannulledandeverysuchdemisedplot shalt^{vest in the Government free from all encumbralces'}

¶135

Section^{3 (l)(b) -Notwithstandinganythingcontained} in any^{other law for the time being in force' the leases of plots or} portions^{shall be cancelledon either all or any of the following} grounds^{namelY: -}

¶136

purpos(

¶137

(i)'i:l::ls;: fil*Jff.'['JJ""il,::f 'll?X.ll; non-user;^or

¶138

(ii) Sub- of^ptot" lellinq^{'oy-tlt"'ing or transferring into disguised lhe plols p"arlnershipsor portions} tttd otnJl^{t]"""t#ti"tatransfer of interestin} the PloU^or

¶139

Viotation^{of any ter:ns' conditionsor covenant}

¶140

(iii) sPecified^{in thelease deed}

¶141

Explanation:^{For the purpose of-thisAct ' where} "^{t"""tJtrrit'"into a partnership' agreementor} otnet n"o"tttt "ttattgeent^{--cl" the toi carrying on any demised plot' activitythen} t'ot*'tt'"tlat'atng'^anythingin '^theIndian ntt] 1932^{it sh;u alsobe deemed to} '^t""b" " t i;i;;i;; "r']p^{of the conditionsof the lease"}

¶142

t2. It is also^{imperative for this Court to look into the} object/^{intenttonof the kgislatureto enact the Azamabad} Industrial^{Area (Terminationand regulationof leases) Act'} 7992 for the^{purpose of adjudicatingthe presentlis' The relevant} portions^{are extracted hereunder'}

¶143

Object and^{reasonsof theAzamabad Industrial} Area Termination^{and Regulationof leases)Act' 1992'}

¶144

10

¶145

ll.

¶146

Whereas an Industrial area Known as Industrial Area, Azamabad Hyderabad had been selected and established by the erstwhile Nizam,s Gov estabrish ing indu stries .":'",T.'":J"1" j:: j:l "'.::":":' developed into different sizes of plots rvith infrastructure facilities for leasing them out to persons intending to set up Industries:

¶147

lll. And whereas the developed plots in the Industrial Area, Azamabad, Hyderabad, w,ere leased out to various persons under var5ring terms and conditions including payment of rents by adopting different forms ol lease deeds:

¶148

iv furd wliereas it ilas cor-rie t(, th. riotice of thc Gove.nirlent that contain lessees or occupants are putting the plots of portions of plots to unauthorised uses and certain other lessecs or occupants are misusing valuable industrial urban land lor residential purposes as also for u,arehousing activitv And whereas, it has also come to the notice of the Gou"..r_.at that some lessees are sub_le portion s o r pro ts by ",,..,. *',t"ij J,l#". j': j:,: j5 ;: X' transfer of shares of companies to secure lease ho]d transfer s;

¶149

Likewise, it is also essential to mentlon about few definitions in the Azamabad Industrial Area (Termination and Regulation of leases) Act, 7992;

¶150

Section 2(b); "Azamabad Industrial Area,, meals the land

¶151

owned by Government and situated at Mushirabad within the limits of Hyderabad municipal Corporation, drvided into plots

¶152

4l

¶153

of d ifferent^{sizes for industrialpurposeby the erstwhile} Nizam's^{Government andknownas AzamabadIndustrial Area;}

¶154

Section^{2(d) -"Demised plot" means any plot of landor} thereof^{intheAzamabadlndustrialArea'which has been} leased^{out to any person for Industrialuseeither by erstwhile} Nizam's^{Governmentor by the Government of Hyderabador by} the Government^{of Andhra Pradeshor in respectof which} there^{is otherarrangement with anyperson;}

¶155

ii.

¶156

iii. Section^{3 -Termination} -':it{^{of leases: Notwithstanding} anvthin^g - "^'"#:' i ; l1'9l "::,,"., ":: ! Js;u1,^::: transfer^{of propell'^lt;'J"lt"l'i,.'} i"lt"a the terms and o ther^{arran gement} :lI"',,',::'"':I^{ilr" i';;";;"? i"} " demised^{Jplot eitherby} made with^u', oJt"t;;;^re"p"tt "r ""v the erstwhile^;;;;' iJltt.,..,t"t-^ot^{bv the erstwhile} bv the^{Government of Andhra} Government^{tf ;fi;;;J;r} Prad'esh^{pti"'ic,'1-n"-"Jppoittttaatt"'all} -leases^{or other} arrangements -"at'tt^{tTt"t"O it'to tlt:qh iregistereddeed} or otherwise -^i:;;t';i;]i a""9a.41i.in^{the Azamabad} Industria-l^{nt"^'} "t'ifi "tt'-'d^{terminated on tlae appointed date} andthereupon;ii'";;i;""t"oranvothe111tut'c"-:l^t: whatever^{rnaat uiit'"p"tson in occupationto holdpossessron} of the^{demised"'il;ffii'";;;} annulled^{and everysuch} demised^plc,t "hli1"'";";it'"' "^{co.."ttlrn"'ttfree from all} encumbrances 'ff^{J;libe usea subsequentlyfor industrial} ili't'"r"'1ilf;^{termination or the leas'e :l' :th" arransement} under sub^{sectii;'i;;'i;;} "ghi"^{t"a liabilities} shall^{as between the} cease^and parties to^{tnt iill"''.lt''c,it'?''} "ti"t'gt.,,""t determine'^{b"t ;;;:;";} i'" 'o tt"^{Governmentfromthe} aforesaid^{ptt".,;""';;;the leaseor other arrangementso} terminated "t"ri'uJ^t'J-ttiut art arrearof land revenue "

¶157

On careful^{readingof the above provisions of the} 1992 Act,this^{Court {inds that in view of Sections2(b) & 2(d} of} Industrial^{Area (Terminationand Regulation of} thLe Azattabad succinctlY^{evident that the very} 1992, tt^rs leases)^Act, object/intent^{of the Legislature is to aliot plots of different sizes}

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only for industrial purpose and for no other purpose. By virtue of the 1992 Act coming into force and in terms of Section 3(1), all leases were terminated on the appointed day. However, after lengthy Court litigation, the State Government has brought amendment to the Act, 1992, more particularllr Section 3 in 2OOO which resulted in the Azamabad lndustrial Area (Termination and Regulation of leases) Amendment Act, 20OO. In 2000 Act, amendment was only brought to the preamble, Sections 3, 4, S, 11, 19 & 21, Lhc remaining provisions of the 1992 Act have remained intact and the same are still in force. 15 As per Section 3(1)(a) of the 2000 Act, r.hat is to be noted is notwithstanding anything contained rn the Indian Contract Act, 7gT2, the Transfer of property Act, lgg2, or any other law lor the time being in force, and the terms and conditions of any lease entered into or other arrangement made with any person in respect of aly demised plot either by the erstwhile Nizam,s Government or by the erstwhile Government of Hyderabad or by tl.e Government of Andhra pradesh prior to the appointed date, a]l those leases, sub_leases or other arrangements made or entered into through a regtstered deed or otherwise in respect of arl demised prots in Aza,,.abad Industriar

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¶161

Area^{which after due enquiry attract one or more of the ground} forcancellationofleaseasspecifredinclause(b)shallstand terminated^{on the appointed date and there upon all such} leases,^{sub-leases or any other arrangement whatsoever made} by the^{person in occupation of the demised plot shallstand} annulled^{and every such demised plot shall vest inthe} Government^{free from all encumbrances'}

¶162

From the^{perusalof the record'the undisputed fact} is that^{originally,Plot Nos' 3' 3IILo 317' inAzamabad} Industrial^{Area had been given on Iease to M/s ShivdatRai} GulabRaiforggyearsforsettingupofSpinningandWeaving Mills in^{the year 1952' Thereafter'InspectionReportdated} O3.O2.lg7g,Mr^{Mukund Lal' Sri Amruittal' Sri Madusudan'Sri} Aravind^{Komar and Mr Bharath Kumar as partnersof Super} Steel^{Distributors and Manufacturerswent into production in} November¹⁹⁷⁷ '^{Itwas also stated in the Inspection report that} Mahaveer^{spinning Waste Plant is a partnership firm occupying} 2383 sq^{yards and was runningat the time of inspection and} improved^{the productionactivitiesThereafter' partition was} effected^{among the legal heirs and threeapplications were made} totheGovernmentseekingrecognitionofsucharrangementand

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for execution of lease deeds to that effect The request of the occupants of Plot No.3, 3/1 to 3/7 was forwardecl to Government vide Lr. No.224/rAA/66. dated 03-04_1979 with a recommendation to allow one year time for establishing their respective plants. In the meanwhile, due to unauthorised subletting cons tructions/ alterations, a show cause notice was issued on 04.07.1979 and they have replied on 09.02.1979. Finatly, they rvere directed not to take up any additional unauthorized cons truction/ alterations till a decision is taken by thc Government on their representations for establishing thcir respective units vide Letter dated 29_Og.1g7g. Further bascd on the representations made by all the partners, a meeting was conducted by Additional DI, RDO and DDTC and decided the entire plot No.3, 3/ r to 3/z to be divided to ar the partners and the Government was addressed vide Lr.No. l4gTO/1 AA/73, dated 72.07 .19g4 recommending the extent of acres to be allotted and lease deeds to be executed separately r.e., 1) Gulab Rao - 3076.50 Sq.yards, 2) prahlad Rai _ 6527.50 Sq.yards, 3) Sunder Mal - 7092.50 Sq.yards and 4) Bilas Rai Z431.SO Sq.Yards in all total 24t2g.OO Sq.yards. However, the Government sought certain clarihcation on the above proposals.

¶165

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¶166

The Director^{ofIndustriesfurnished their reportson} 19-1i-1985,^{O2-O7 -i[,a6, 05-08-1986'The Government again} requested^{forsome more informationon 06-08- 1986} After protracted^{correspondence,the Government urde DO Lr'No'} 1383/IF^{CelIlTg-36, d'ated 20-07-1989have requested the} Directoroflndustriestoconductphysicalveri|rcationofthe plots and furnish^{modifred draft show cause noticesas per the} opinion of^{the GovernmentPleader'The Supervisor'AIA'} Hyderabad^{on 28-07 -1989 inspected the area in Plot Nos 3' 3/1} to 317^{aodreported the extent of areas under the possession of} each Partner^{along witl-r the particulars ofsub-lessees'} According^{to the sketch, the total extent of area of all plots is} coming to^{2338o sq yards'Howeverno approval was givenby} theGovernmenttothepartitionaffectedbythelegalheirsof original^{allottee among themselves' At this juncture' to curb} misuse of^{the Governmentlands at Azarrrabad IndustrialArea'} TheAzamabadlndustrialArea(TerminationandRegulationof Irases) Act,^{1992 carneto be enacted The Joint Inspection} reportdatedO1.O42O22revealsthatPlotNos'3'3/lto3l7is presently in^the occupation^{of the severallegal heirs of the} The Inspection^{report also reveals thatno} original^allottee.

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industrial unit is being operated by the 1egal heirs in the said plot. Hou.ever, the plot is also not vacant. Instead, the legal heirs in occupation of the subject plot have iitegally let out portions of the plot to several business concerns such as M/s Sai Balaji Packaging, M/s RR Offset printers, M/s Deepti Printers, M/ s Big Apple on rent, to run their respective commercial businesses. Therefore, this court finds that in vieu, of enquiry by wa1, of Joint Inspection report dated 01.O4.2022 and also in vieu. of legal heirs in occupation of the subject plot have letting out portions of the plot to several business concerns such as M/s Sai Balaji packaging, M/s R R Offset printers, M/s Deepti Printers, M/s Big Apple on rent, to run their respective commerciai businesses squarely attracts Section 3(1)(b) of the 20OO Act, resultantly, the lease of subject plot is deemed to be terminated in terms of Section 3(1) (a) and all the arrangements rvhatsoever made by the person in occupation oI the demised plot shall stand annulled and every such demised plot shall vest in the Government free from a,ll encumbrances. As such, petitioner's case cannot be considered under the head of Category A' since the petitioner do not ht into any of the clauses mentioned in Category A,of G.O.Ms.No.22 dated, 13.g.2023.

¶169

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17 . The above^{findingis also fortifiedby the detailed} order^{of this Courtdated'23'6'2023in I A'No'1of 2023 in Writ} Appeal^{No.634 of 2023which has also taken similar view in} regard^{to verysame issue' Whiie that being so' this Court also} finds considerable^{force in the contentionsof the petitioner that} isthepetitionerhasbeenmakingapplicationsand representations^{since 2004 under everynew scheme/policy/GO} of the State^{Governmentintroduced for grant of free hold rights'} right from^{2OO4 to the latest being in2024 and had also} attended^{personal hearingbut nevera hnal decision was taken} by the^{Respondentsgrantingfree hold rights to any of the} lesseesandtherequestswereputoffononepretextorthe other.^{Therefore,after this length of time and after accruaiof} rights in^{favour of PetitionerunderSection 3 (3), it is not open} for the^{Respondentsto allege that the Petitioner had vioiated the} Section^{3(1)(b) of the Act, 2O00'As rightly contended by learned} SeniorCounselsriSitaramMurthy,theissueforconsideration ofthisCourtinthepresentlisisnotwhetherpetitionershave violated^{Section 3 (1Xb) of 2OOO Act or whether the iease of} petitioner is^{to be terminated or determined but the issue for} consideration^{is whether petitioner as a legal heir of the original}

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allottee a re in possession or not to fall under Category ,A, of G.O.Ms. No. 19, dared 29 08.2023. 18.

¶173

This Court already opined that petitioner cannot lall under Caregory A,of G.O.Ms.No. 19 dated 29.0g.2023 more particularly in vien, of the enquiry and as well as the Joint Inspection report dated 1.4.2022. Therefore, the 4fr respondent has rightly passed the order dated 2O.03.2024 stating that petitioner is not eligible under Category A, of Clause 17 of G.O.Ms.Nc,. i9 dated 29.8.2023. 19. Nori. it is germane to refer to the contents in G'o Ms.No 19 dated 2g.g.2o23, releva,t clauses are extracted hereunder:

¶174

" 12. No' 2.90 r /prr. sec-v/ Indus/ The ._ p-esh/ Government 2ozo^..J"i"i vide Memo 29.r.;o2o ordered to conduct Joint lnspection of Azamabad i"a""tA-rf il""t"te by officials of the Lrdustries Department along with tf,. tm"i"f" of Revelue Department to ascertain the status of "tifir"iirl-"iit . Iands allotted to Industrial units and,to submit a j.i",-f"""p#,-" report to the Goverument. Accordingly, the General-Ma.rug"Ji'Oi",.i", Industries Centre, Hyderabad has submitted u"i"i -?n"pi,.n report on 1.4.2022. As per Joint inspection ..po.t, ir*u"'!Li ttat malorlty of the units have violated tt. i..m" oriJase'."i'i.re ij""o not fuUilling were the ob.iectives found to of the be run altotment. by su b-tenants/ Further, a.""pi.." ;;", ;i;; 'rrra Industrial unitsrequests were Govern received ment from such land oersons for g.ali "i il""i,'"fl".igLts over this

¶175

In vieu, of the above, the Cabinet sub-committee for resource mobilization, in its EeetiEg helrt oi ii.ai6ii*t" extend freehold rights -to .U tn" ,.rrits'irr t-hT pstate. decided Reviewto meerings were conducted on. s.z .2o2i "ra-io.i.iizz by the chief Secrerary, on the court of action t" b;;J"pt.;1r1ir..,oirg freehold

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ri(,hts to the occupants^{of land in three industrialestates'which} i"?i"a.t^{,t . Azamabad lndustrialestale'}

¶178

14.Sunsequentlv"tq'I-"1"1^"';""'X,iiXt$|i}i1#i""?;:'x?.;t"i:; ii5',i,1:i';':;,i',f^i1,';'7i;;,iJ"'u.,a-Fo.tt"i;.1",10:::*ratesor freehold^{rights in respect of the} the consideration^{valuefor g;;;;} vide Governmenl^{land atAzamaf,'J--?t'a} '"tti"l^Area- -Furlher' #;:;;;; ,J^J"tout,^{the Governmenthad reclassihedcatesory -}

¶179

15.rhereaseof .theGov,ernrnerltiTf"#.f":f Hilttf :"[:Lf""f; Azao,abad l'," 9:.'" 5,'1i::;i'^il*"r"i;.r rfases)^Act,1ee2 Industrial^Area one^{(Term-tnatton} of the^{year 20oo' and thepossessron'} of the^land "-"J"i.i-uv^"., -- ff'e existing units were not evicted is vested^{with Gover-nme"t} tttt Units^{working in"theAzamabadIndustriat} ;;'"0;.;';;.^""t emplovment^to sood^{numberor people'} ffi;;;;;.;ing

¶180

On^{furtherexaminat}^{ion ofthe issueand follorvingthe} observations^{made by tn" " iottl't"High Court..inorrterdated} ;::;l;6;;'i;^w "^{u".oi+or 2c,2-3,thata f,olicv'cYld:tlTi' and rules} '.""sff ;" ;;;;irJtio', ot p,.op'itv concerned T,1l-?"^9:-'o't"' tollowing^proper Procedure'^{witir aipropriatesanclions and approvals} ;;;;';4".;;;ii-en^{t order, clearlv dilineatins the appropriate reasons} and obiects^{behindthe taja loii<:v at"i"iori of the Covernmentand} tntitreo'to^{de regularizedshatl be specilicallv} l;J .;'J;;.son" mentioned^{without any} ".op.ⁱambiiuity.tt r,vasdecidedthat the ilH;il. s;ilin^{a rxrl ei iz6is'it"zs'8'zozza.-.withdrawnand} i""';# d; r"i,;;l;g^{o'a"'iurttrcr it is decidedthat unitsin rvhose} favour^{sale cleeds were t*"<;'i"aon payment of fl'Il considerationas} -er^{reference zthread auot'e]i"tat'Lt -f"-ttttttake anysteps as the} [i.t^{.l.rpi.aby them is completelyvested"'}

¶181

From the^{bare reading of the above' it is explicit} that the^{Government has decidedto issue freehold rights to the} existing^{occupants/Industrialistsin AzamabadIndustrialArea'} From the^{above enunciationof facts and reasonsgiven' it is} clear that^{petitionercannotbe fallingunder CategoryA' of the} G.O.Ms.No.^{19 d,ated29 '8 '2023 'However' since petitioneris}

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still an existing occupant who does not satisfy the conditions mentioned in Category A, has automatically falls under Category B' of G.O.Ms.No.19 dated 29.O8.2O23 which clearly states th.rt all other units excluding Category A, in possession of the respective unit holders as per the Joint Inspectron report of 2022 submitted by the Officials of revenue and Industries Departme:lt. Resultantly, the rate prescribed in Category ,El, shall be applicable to petitioner i.e., 2OO%o of the registration value as o:r the date (i.e. date of registration) in accordance rvith the guidelines of Registration Department. 21. Coming to the decisions relied upon by the jearned Special Government pleader, this Court finds the said decisions are not applicable to the facts of the present case since the said decisions deals rvith the aspect of legitimate expectation. The decision of the Hon,ble Supreme Court in , Sh.,ruan I{umd.r Kumawdt, is q,ith regard to person,s right to claim that he should be granted mining lease in any land belonging to the Governmenr and the issue therein was that the right being not legal, apart from being non-existent, it can certainly be not enforceable. Therefore the said decisions has no relevance to the present case. With respect to the second decision of the

¶184

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¶186

Division^{Benchofthis Court ioCororrro:ndet Mining and} Exports^{Pat. Ltd'ccse' the learneclSpecialGovernrrrent} Pleader^{has cmphasisedon the issue ol the Policydecisionol} the Government'^{This Courtdoes not dispute with the settled} pnnciple of^{taw with respect tothe policy decision ofthc} Government^{and limitations ofinterference bythis Court} Admittedly,^{the Governmentitself has taken decisionto issuc} lree hold^{rights however by categorizing thc exisling units upon} satislying^{the conditionsmcnLioned inG'O Ms No 19 dated} 29 .8.2023^{ancl petitioner being the existing occupantu'ho does} not iall^{underCategory'A' as stated' supra will automatically fall} under^{Category'B',therefore'as statedsupra'rate prescribed in} Category^{B' shall be applicable to pelitioner ic''2OO% of the} registration^{valueas on the date (i c.' clate of registration) in} accordance^{with the guidelines of Registration DepartmenL-}

¶187

This Court^{hnds that in terms of G'O Ms No 19} dated^{29.O8 2023, petitioner being the existing occupantwho} does not^{fall underCategoryA' will automaticallyfall under} Category^{B', therefore,the rate prescribed in Category 'B' shall} be applicable^{to petitioner t"e2OOo/oof the registration value as}

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on the date (i.e., date of registration) in accordance with the guidelir.es of Registration Dcparlment_

¶190

23' Accordingry, this court directs the respondents to convert the subject land of petitioner i.e. 2499 Square yards being Plot Nos.3, 3t1 to 317 in Azamabad lndustrial Estate, Hyderabad from leasehold to freehold in terms of Clause 17 Category ,B, of G.O.Ms.No.19 dated 29.8_2023, however, by collecting 2o0yo of the registration value as on the date (i.e. Date of registration) including any other charges in accordance with the guidelines of Registration Department.

¶191

The Writ petition is rhcrcforc, disposed of wit]r the a bove dir'.-lion- No custs 25. Consequenrly, Miscellaneous Applicalrons, if any shall s tan cl closed_

¶192

SD/.A.V.S. PRASAD DEPUry REGISTRAR

¶193

Note :

¶194

That the 23'd para of the order dated 0110st202s in W.p.No.4z17l24 is d"t;;i;; and substituted as per tne Oraers ot-iiJ Hon'ble Court 18.07.2b25 in t.A.No.1/25.

¶195

This Amended order is substituted which' has already been dispatchea on Of /OilZS.-

¶196

SD/.A.V.S.PRASAD -rD PUTY REGISTRAR \

¶197

/iTRUE COPY//

¶198

=.r,on oFFrcER

¶199

To, 1 The Principal Secretary. rnduslries and - commerce - - -vrvv^vvP( o'uprrt*unt, secretariat, State of Telangana, Hyderabad.

¶200