Bharat Kumar Agarwal Vs The State of Telangana

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[³³⁰⁰ ]

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HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction)

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THURSDAY, THE FIR]ST DAY OF MAY IWO THOUSAND AND TWENTY FIVE

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PRESENT

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THE HON'BLE SRI JUSTICE NAGESH BHEEMAPAKA

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WRIT PETITION NO 4719 0F 2024

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Between:

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Bharat Kumar Agarwal, S/o. Late Sri Sundermal, Aged about 64 years, Occ: Business, R/o.Plot.No.76, Vemireddy Erlclave. Road No-12, Banjara Hills, Hyderabad - 34.

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...PETITIONER

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AND

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1 The State of Telangana, Rep. by its Principal Secretary, lndustries and Commerce Department, Secretariat, Hyderabad.

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2 The Commissioner of lndustries, Govdrnment of Telangana, Chirag AII Lane, Abids, Hyderabad.

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The District Collector, Hyderabad Dist4ict, Hyderabad.

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The Vice Chairman and Managing Director, TSIIC 6th Floor, Parisrama Bhavan. Fateh IVlaidan Road, Basheerbagh, Hyderabad - 04-

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...RESPONDENTS

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Petition under Arlicle 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be to issue a Writ Order or Direction, more particularly one in the nature of a^JWrit of lMandamus" declaring the proceedings Lr.Nf o.State-Cell/ClE,AlA&[/l Et2O24t3-311317t1 dated 20.03.2024 passed by the 4(h Respondent rejecting the application of the Petitioner to convert the land belongin$ to him admeasuring 6487 Sq. yards bearing Plot.No.3, 3/1 to 317 in Azamabad lndustrial Estate, Hyderabad from lease hold to free hold in terms of Clause^'1 7 (l) Category 'A' of G.O.lr/s.No. 19 dated 29.08.2023 as being illegal, arbitrary, malafide exercise of power, in gross

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violation of princit)les of natural justice and in contraven'ion of Section 3 (3) of Azamabad lndustrial Area (Tc'rmination and Regulation o Leases) (Amendment) Act, 2000 and G.O.Ms.No.19 dated 29.O8.2023 issued by the 1' Respondent and consequently direrrt the Respondents to convert the said and from lease hold to free hold by recervrng 100% of the market value as [alli rcl unrler Clause 1 7 (l) Category'A' in ternrs of G.O,lVls.No.19 dated 29.OA.2023

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Prayer Amended : s per Court Order dated 01 .05.2025 in 1.,.No.2 of 2024

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lA NO: 1 OF 2024

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Petiticn unrlr:r Section 151 CPC praying that ln thc .;itcui-nstanc{ts stated iir the affidavit filed ir supporl of the petition, the High Court nr;ry be pleasecl to drrect the^'1'r and 4tr' Res pondents to consider the applicatton of the Petttioner as falling under Clause 17 ( ) Category 'A' in terms of G.O.tMs.No.l!r dated 29.O8 2023 and receive 10070 of tlre market value to convert the land belonging to the Petitioner admeasuring 6487 Sq. yards bearing Plot.No 3, 311 Io 317 rn Azamabad lndustrial Estate, Hyderabad,rom lease hold to free hold forthwith.

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Counsel for the Pt:titioner: SRI D.V. SEETHARAMAMURTHY, SENIOR COUNSEL FOR SRI. KANDURI KOUSHIK

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Counsel for the Rt:spondents No.1 to 2: SRI SWAROOP OORILLA, SPECIAL GOVERNMENT PLEADER FoR GP FOR INDUSTRIES& COMMERCI:

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Counsel for the Re:spondent No.3: GP FOR REVENUE

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Counsel for the Respondent No.4: SRI L. PRABHAKAR REDDY, S.C. FOR TSIIC

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The Court made tl'e following: ORDER

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HON'BLE SRr JUSTTCE N4GESH BHEEMAPAKA

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WRIT PETITION No. 47L9 OF 2o24

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ORDER:

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This Writ Petition challenges the action of Respondents I and 4 in failing to convert the land belonging to petitioner, admeasuring 6487 square yards in Plot Nos.3, 3/1 tb 317 in Azamabad Industrial Estate, Hyderabad from leasehold to freehold as being illegal, arbitrary, mala fide exercise of power and in contravqntion of G.O.Ms.No.19^dated 29.08.2023 issued by the 1"r .L"po.,d..tt. Consequcntly, a direction is sought to respondents to^process thc Application of petitioner as falling under Category A'in terms of G.O.Ms.No. 19 dated 29.08.2023 aod receive 100% of the market^value to convert the said land from lease h d to free hold. 2 Sri D.V. Seetharamamurthy, learned Senior Counsel appearing on behalf of Sri Koushik^{Kanduri, learned} counsel for petitioner submits that for the^purpose of Economic Development, the Nizam Governr]nent during 1927 formed. a committee consisting of (i) Superintending^{Engineer,City} Improvement Board ii) Commissioner Municipal Corporation of Hyderabad ii) Commissioner, City Police (iv) The^Director,

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Commerciai Industries and (u) Superintenciir-rg Engineer, Electricity to select an area for industries and factories. The said Committees acquired land to an extent of Acs.1!16 O4 guntas in Azamabad out of the funds provided by the [ndustrial Trust. Later, total .lrea \rvas divided into 86 plots of diflcrcrtt sizes and leased out^r o Industrialists who intended to se^I up industries and use th, r same for industrial purposes. for a period of 99 years. Thc t hen Superintending Engineer, Cit.' Irnprovement Board hancl .:cl over the plots in industrial Area t, ) thc Industrial TrusL Fund through Lr. No.9/37F /7018 dated 2().12-1952. lt is contenderl that the said Industrial Trust Func zrcting for and on behalf of ihe Governmenl of Hyderabad executed lease deeds in favour ol'M/s Shivdathrai Gulab Rai, a p:rrtnership firm consisting r,l' four partners Gulabrai, Prahalad-ar, Sundermal and Bilasn i. Originally, M/s Shivdathrai C;ulab Rai rvas allotted Plot No.3/ | uide Agreement of kase dar,ed I8.O7.1946 and later P 0L Nos.3/2 lo 317 uide Agreement cI- l,ease dated 21.O1.1952 to set up Mahavir Cotton Spinning B, Weaving Mills in an area admeasuring total extent ol 22290 Sq. yards in Azamabad Industrial Area. Petitioner is the sorr o[ one of the partners Sr Prahaladrai, original allottee of lease. Petitioner's

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family 1.e petitioner's father and Petitioner have been in absolute possession and enjo ent of the subject property admeasuring 6487 Sq. yards out of the said total extent of 22290 Sq. yards by setting up an industry and undertaking industrial activity.

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karned Senior Counsel also contended that, to curb the misuse of unauthorised use of Government land and other irregularities and to preve+t non-industrial use and to have uniform terms and conditions of lease, the Government enacted Azamabad Industrial Area (Termination and Regulation 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 o[ all demised plots in Azamabad Industrial Area stood terminated on the appolnted day 1l.O7.lgg2 and the persons in occupaLion of the lands were required to apply for a fresh lease. Aggrieved by the said termination of lease, several Industrial Units of Azamabad have filed Writ Petition No.12223 of 1994 and batch before this Court to declare the said act as unconstitutional. This Court utde order dated 18.08.19O4 dismissed the said Writ Petitions upholding the constitutional validity of Act 15 of 1992. Aggrieved thereby, Civil Appeals No.

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8852 of 1901 and batch were filed in Supreme⁽ ourt. Br. order dated 18.04.1900, the said cases were disposed of on the assurance g ven by the State Government that /\ct 15 of 1992 would be srritably amended. It was directed t hat no action against the Industries operating in the Industrial Area concerned should bc taken under the said AcL. The Hon'ble Supreme Court also recorded the submission of the State Government that proposal ol amendment has zrlreadl' been placed before thc Czrbinct and that no irc.ir>n regarding cancellation ol lcasc againsl that industries conccrned rvould be taken.

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1 was contended that in vierv of thc above order, the State Gc,r.ernmcnt amended the Principal Act zrs Azamabad Industrial .\rea (Termination and Regnlatio r ol Leases) Amendment Act No. 1 of 2000 n hich came in to lorce n'.e.f. 17 .O2.2OOO :ncorporating a provision for grant of freehold rights to the Inrlustrial Units of Azamabad Inrlr.rstrial Area. Accordingly, Section 3 was also suitabiy amended under which lessees were cntitled to a fresh grant of lease frorr the appointed date and in lieu of the renewal of leases, the sa rd Iessees may opt for freetLold rights in respect of the demiserl plots. It rvas

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further contended that the l.t resfondent in exercise of powers conferred under Section 2l of t\e Act, issued G.O.Ms.No.87 dated 2O.O2 2002, under which the occupants/ lessees on^the date of appointed day were requirBd to apply on their^{own for} conversion of leasehold rights to freehold rights by^paying a price equivalent to 7 Sok of the malket value as on^17.O2.2OOO. To the same effect, in 2004, Notifrcation dated 17.O2^{2OO4 was} issued inviting applications in thq^{prescribed format from the} occupant/ industrialist for grant o[ freehotd^rights in^Azamabad Industrial Area under the provisio4s of^{Act 1 of 2000 within30} days from the issuance of Notification. In^{response, Pelitioner} in the name of original allottee M,{s Shivdatrai^Gulabraimade Application dated 17-03.2OO4, but there^{was no responsefrom} the Respondents, therefore,^{petiltionermade several such} Applications as reminders on 19.O5.2OO4,^{27 .O7 .2OO4and} 08.O2.2005. The 2"d Respondent vid. lett^{,dated02.08.2O05} informed that a personal hearing^was Iixed on^{22.O8.2OO5and} asked to produce documentary^{eviflence, if any in additionto} what has already been furnished along with^{the Application.} Petitioner along with others atte[rded^personal hearing^on 22.Oa.2OO5 and by letter, dated 01.09.2005, furnished

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additional clocuments as requested. But, howerer, no dccision was taken on the Application of Petitioner alo rg u'ith several other occupants/ applicants despite making or al and written requests tc receive the payment at 7 5o/o ma^-ket value and convert the leasehold rights to freehold.

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Learned Senior Counsel furthcr submits that Government issued G.O.Ms.No.285, dated 24.\O.2OOB in supersession of the earlier orders, fixing the n'arkeL value for conversion of land by collecting market valu e at the rates prevailing t s on 17 .O2 .2OO0. Petitioner applied undcr the said GO but was o[ no avail as no demand was marte for payments and land was not converted to freehold and no s:rle deeds were executed in favour of any of the industrialist/ oc,-:upants despite numerous requests and constant follorv up with the Authorities. Further it rvas contendecl that in 2O2O, the^{I sr} Respondent directed the General Manager, District Ind -rstries Centre, Hyderabad to conduct a Joint Inspection along r.r,ilh offici:rls of Revenue Dopartment under the guidance of Dis rict Collector to ascertain status of utilization of the lands allotl ed to Industrial Units. The ,Joint InspecLion report was submitteri stating that 58 units incltLding TSRTC plots were in posses,;ion of various

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persons. The cabinet sub-committee for resource mobilization, in its meeting held on 25.06.2022, decided to extend freehold rights to all the units in the estate. In tune with the said decision, Government issued a Memo No. 501/IF & INF/Ai/2018 dated 29.O8.2O22 deciding to issue freehold rights by frxing the price for original allottees as 1OO% of registration value and 2OO%o for others. Petitioner in the name of the original allottee M/ s Shivdatrai Gulabrai made representation dated 2O. 10.2022 tn terms of the above said Memo dated 29.O8.2O22 along with all the necgssary documents requesting to convert the subject land to frgehold. in response to the same, the 1't Respondent i""i.a Demand Notice^dated 25.1O.2022 demanding Rs.242,96,77.58O /- (Rupees Two Hundred and Forty Two Crore Ninery Six Lakh Seventy Seven Thousand Five Hundred and Eighty Only) towards freehold charges hxing the same at 2OO%o of the market^{valueignoring} the fact that Petitioner and other owners of PIot^{Nos. 3, 3/ 1 to} 3/7 in Azarrrabad. Industrial Estate, Hyderabad are the^legal heirs of original allottees and are chargeable at^1OO9'o of the market value. Petitioner along with others in response to^the said demand notice, issued reply dated 28.1O.2022^informing

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that registr,rtion value as on that day was Rs.5 +,5O0/ - per Sq. yard and when the same is calculated against thr: total extent, it comes to Rs,.121,48,38,79O/- (Rupees One Hundred and Tu,enty One Crore Forty Eight Lakh Thirty Eight^'t'housand even Hundred ar:d Ninety Only) and requested to am€'nd the demand notice. It was further contended that despite re;:eated requests, no action u'ls taken by the Respondent Authorities. That, Notice dated 14.08.2023 rvas issucd to make pa)',nents to$'ards freehold riSlhts in accordance with Demand Notice and in default, lcgirl proceedings rvould be initiated lor eviction. In thc said notice, it is clearly mentioned that Peti,ioner has not availed the beneht by paying market value a.. 2O07o as per Memo date d 29 .O8 .2022. The said Notice '.vas served on 28.O8.2023 lor which reply datecl 30.08.2{)23 \.as filed informing that they are the original allottees lnd cannot be charged at 2OOo/o market value and no action^r,r,: Ls taken on the same tiil drlte. According to learned Senior C ounsel, the 1.t Respondent issued G.O.Ms.No. 19 dated '.'.9.O8.2023 in supersession of all the earlier orders and memo t,r regularize the industrial plots by granting freehold rights to the cxisting occupants in Azamabad Industrial Area. Under Clause 17 (l) of

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the said GO, Industrial Units hate been categorized into two categories Category^'A' and Categgry B'. Category^'A' is covered by (i) the units in possession of tljre original allottees including their legal heirs whether working or not working, (ii) where as per the joint inspection report. tfire plot is vacant and is in possession of the original allottee$ and industrial activity has taken place previously. Alt other units excluding Category^'A' falls under Category 'B'. Originat Al]lottees faliing under Category 'A' are required to pay iOO%o and Category^'B' are required to pay 2OO%o of the marke[ value as freehold charges. That G.O.Ms.No. 19 d,ated, 29.O8.2O23 i$ in tune with or reiteration with certain clarihcations of the earlier Memo No.5O1/IF & INF/A1l2O18 dated 29.O8.2O22 eden undcr which the original allottees were required to pay 1QO% of the market value as freehold charges and others at 200Y3

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It is submitted that Pelitio.r.r^{being the iegal heir of} the original allottee is required to bay^{only iOO% of the market} value and accordingly made Appilcation dated 21.10.2023 to Respondents that Petitioner along Yv1th others are willing to pay 7OO%o of the market value which c mes to Rs. L21,4a,38,79O / - for the entire extent of 22290 Sq s and requested to grant

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freehold rigfrts and execute deeds separately to each of thern in terms of C.O.Ms.No. 19. As there was no r:ply from the Respondentr; again, Petitioner along with others made representatirn dated 12.02.2024 as a reminder ilnd set out the entire back6;round by stating al1 the applications made by the Petitioner since 2O02 and how the same were k:pt pending by the ResponCent Authorities without taking arry action and demanding any amounts on all the occasions. Lastly, il u.as contended trat Section 3 (3) ofAct 1 of 2O00 confers a right on the leaseholCers to opt for free hold in lieu of rcncrval of lcasc. Therefore, the request of Petitioner to convert Lis land to free hold is base,l on statutory rights conferred to hirr under Act 1 of 2000 and the same cannot be denied and be kept pending forever aftel the formal guidelines for implemr'ntation of the same are issued. Petitioner made Applications to Respondent Authorities lour times under different Government orders, memos and instructions since Section 3 (3) of Act 1 of 2000 came into force and right has been created in favour of Petitioner but no final decision has been taken and the same is arbitrary, il egal and amounts to dereliction o1 duties of the Respondent Authorities. Further, Clause 17 (1) of G.O.Ms.No.

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19, dated 29.O8.2023 clearly stipulates that original allottee or their legal heir falls under Categoly^'A' and Clause 17 (II) states that persons/ occupants falling u(der Category'A' are required to pay 1OO%o of the market value. therefore, Petitioner being the legal heir of original allottee is lidble to pay only^{l OO7o} of the market value and the same cannot be disputed by the Respondent Authorities. Thereforen unless and until this^Court intervenes ald directs the Respondent Authorities to consider the Application of Petitioner for conversion of subject land^to freehold in terms of Section 3⁽³⁾ of the Act^{1 of 2OO0 and} Clause 17 (1) Category'A' of c.o]us.lvo. 19 dated^29.o8.2o23 by collection lOOoh of market val{e in^{accordancewith Clause} 17 (III, Petitioner would be put to irreparable^loss and^grave injury while also suffering monetary loss.

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Initially, this Court uide order dated 23.02.2024 directed Respondents 1 and 4 to consider the^{Application of} Petitioner as falling under Clause^{17 (1) Category'A' in terms of} G.O.Ms.No.l9 dated, 29.O8.2O23 anp receive^{IOO%o of the market} value to convert his land admeas,l ring 6487 Sq. yards bearing Plot Nos.3, 3ll to 317 in Aiamabad Industrial Estate, Hyderabad from lease-hold to freehold forthwith,^pending

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disposal of^t.Vrit Petition. Pursuant to the said in terim direction, the 4d resp,rndent i.e. Telangana State lndustria. infrastructure Corporation Ltd. had considered the representations of petitioner and passed rejection order dated 20 3.2024 stating that petitiorer is not eligible under Category A of Clause 17. 4 . l,carned Special Government Pleadt.r Sri Srvaroop Oorilla appt'aring on behalf o[ Iearned Governm ent Pleader for Ir-rdustries 1, Commerce admits formation ol Committee by Nizam Govt:rnment and acquisition of land fr lm out of the fund s provi<1ed b5r ths Industrial Trust Fund anr leasing out to industrialist s for inclustrial purposes for a perir',d of 99 years. The then Superintending Engineer, Cit5r Improvement Board had handerl over the plots in the Industria I Area to thc Inciustrial Trusl Fund through letter datec 29-12-1952. Hou'ever, Iirtcr on, to curb misuse/unauth trized use of Government [and, other irregularities, violations and to prevent non-industrLal use and to have uniform terms and conditions of lease, the Government enacted Azanrrabad I;rdustrial Area (TermlnatiorL and Regulation of (Leases) Act 15 ol 1992. Further it was contt:nded that, under Section 3(1), all leases or other arrangemen:s made or entered into through a registered deed or

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otherwise in respe ct of all demiled plots in the Azamabad Industrial Area, stand terminated on the appointed date i.e., 11.O7 .1992 and consequently, all sub-leases or any other arrangements whatsoever made by the person/entity in occupation to hold possession Pf the demised plot stand annulled and every such demised flot .re"t" in the Government free from all encumbrances and shall be used subsequently for industrial purpose only. Under Section 4(1), on termination of lease or other arrangement underl Section 3(1), the person in occupation may at his option aplly fo. a fresh leasc in the manner prescribed. Further, it was contended that Government also issued rules under the Azarnabad Industrial Area (Termination & Regulation of Leases) Act, 1992, uide G.O. Ms. No. 155 dated 06.04. 1 992 and. thj Commissioner of [ndustries was appointed as Competent Authorit5z uide G .O Ms. No. 154 Inds. & Com (lF-Cell) Department dated O6.04.1993. The Government also issued rules under the Azamabad Industrial Area (Termination & Regrlation of Leases) Act, 1992, uide G.O Ms No. 155 dated 06.04.1992 and the Commissioner of Industries was appointed as Competent Authoril5z under the Act uide G.O Ms. No. 154 dated 06.04.1993.

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I-earned Special Government Pleadc r submits that aggrieved br' lhe same, several industrial unils of Azamabad Illed Writ Pctitions to declare Azamabad Inrlustrial Area (Terminatio r and Regulation ol Leases) Act No 15 of 1992 as unconstitutional, vrolative of Articles 14, 19(1) (g) 300-A of the Constitution of India. The Hon'ble Division BenclL uide^judgment dated 1O. Ot . 1994 held that it w.rs within the cor npetence of the Legislaturc t() make lau.u,ith rctrospective effect or incorporate a deeming prl'ision and all the Writ Petitions r''ere dismisse d. Aggricr.ed b, thc said judgment, batch of Specia lcave Pclitions were hled and the Supreme Court on the assurarce given by the State Government that Act No. 15 of 1992 u'o rld suitably be amendcd, clisposed of the Special Ieave petitions as infructuous and directerl t.hat no action against the industri,.-s <>perating in the industr:zrL area concerned should be taken r-rndcr the Act, 1992. It wa; also noted by the Court that a sutmission by the Counsel rep,resenting the State was made that he proposal of amendment of the Act had already been pla,;ed before the Cabrnet anc that no action regarding cancellation of leases etc, against that industries concerned shail be tal<en under the impugned A:t

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Further, it was contended that in view ol the above orders, the State Government amended the Principal Act as Azamahad Industrial Area (Termination and Regulation of Leases) Amendment Act No. 1 of 20OO which came into force with effect from 17.02.2000 incorporating a provision for grant of freehold rights to the unit holders in the Azarnabad Indus[rial Area. Accordingly, Section (3) of ttre Azanabad, Industrial Area, (Termination d Regulation of leaseg) Act No. I of 1992 has been amended to terminate all leirses, sub-leases or other arrangements made or entered int{ through a registered deed or otherwise, in case of misusing ttie land for other purposes, unauthorized sub-letting or transferring the plots or^portions, entering into disguised partnerships or violation of any terms of the lease deed as per Section 3 (b) and all those^{lessees who do} not fall under the said Section were to be entitled to a^grant of fresh lease from the appointed date and in lieu of renewal of lease may opt for free-hold rights in respect of demised plots. Under Section 4, on termination of lease or other arrangements made under Section 3(I)(a), a person in occupation and running an industry on the appointed date rnay apply for a^{fresh lease in} the manner prescribed. It was cqntended that in^view of^the

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above, Pres i Notification dated 17 .O2.20O4 was issued and Applications u,ere received from several persons s.:eking freehold rights of the^qovernment land in the Estate. After consideration, 24 applicanr s \,ere erroneously found to be eligilrle for freehold rights. Upo r exercise of review by the Government under Section 10 ol the Act, 15 of such applicants rve:e found to be ineligible for ireehold rights. Further, inquiry co:rducted by the vigilance dclrartrnent and the report dated 17 .Oa'.2O2O thereof reveals that tl'rc provisional allotment let[ers whi:h were issued are in contr. rr,cntion of the provisions of the Azarrbad Act. The report furttrer recommended ceasing a1l tl,e provisional allotment L3tters for lree hold rights which u'ere granted. Follorving sr u:h inquin', disciplinary action was recommended by the Director of vigilance and enforcement against the then officers resl'onsible lor such erroneous issuance of allotment Ietters. In anv case, allotment letters were only provisional in nature and :;ince no amounts were received from the applicants nor sale dee,ls registered in their names, no vestr,d rights in the property ac( rlles to applicants. Therefore, no fresh lease nor freehold rigtrt s were granted to any of the unit liolders and all the leases ir: the Azamabad industrial Area stood terminated by

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virtue of Section 3(1)(a) of the Azamabad Industrial^Area [Termination^{and Regulationof leases)Amendment Act. 2000.}

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Further it was specificatly contended that thereafter, Joint Inspection of the] Azamabad Industrial^Estate was conducted and the report thereof was furnished by the General Manager, District Industrial Centre,^{Musheerabadto} Respondent No.2 uide Letter dated O1.O4.2022. The^reportdated O1.O4.2022 revealed that despite termination of^leases of^the unit holders in accordance with the Azannabad^{Industrialarea} Amendment Act, 2OOO, there aro currently 58 units in^the cstate, most of them in^possessiqn of sub-tenants/^occupants and not the original allottees. Frhrther several^requestswere reccived from the unit holders seeking freehold^rights. Thereafter, the Cabinet subcommittee on resource^{mobilization,} in its meeting held on 25.6.2022, had decided^{to extend freehold} rights to all the unit holders.^After careful^{examination,the} Government uide Merno dated^{29.08.2022decided to issue} freehold rights in respect of the Ggvernment^{land in Azamabad} Industrial Estate by hxing the ratds for^{these two categoriesof} units as original allottees:^lOO% of^{registration value and} others: 2OOo/o of registration value and MD,^TSIIC(4Ih

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respondent) rvas nominated as competent z uthori[ /noda1 agency. It v,,as also contended that on further examination of the issue a;rd following the observations made by the Hon'ble High Court in order dated 23.06.2023 in Writ Alrpeal No.634 of 2023, tha, a policy, guidclines and n-L1es regarding regularization of property concerned may br framed after follou'ing proper procedure, with appropriate sanctions and approvals ,,,lde Governmc.nt Order, clearly crelineating the appropriate reasons and objects bchind the said policy decision of the Govcrnment and the class of persons cntitled to be regularized r;hall be spocilically mentioned witholt any scope for ambiguity, N{emo dated 29 .O8.2O22 was u ithdrawn and G.O.Ms.No. - 9 dated 29.O8.2023 r'",as issued by the Government. It was furthcr contendecl that, in the present case, original allottee of Flots No.3, 3/ 1 to 317 is M/s Shir.t h-rtt Rai Gulab Rai. Petitioner has to establish belore Responderlt No.4 that he would not fall under category B of G.O.Ms No. 19 dated 29.08.2023. Since, according lo Respondent Io.4, petitioner falls under category B. reasons are (i) there is no industrial unit as required under G.O.Ms.No.19 daled 29.08.2{)23, (ii) plot is not vacant rvith proof of industrial activity to have taken place

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previously in the allotted plot, (iii) though petitioner has come into possession through the ofiginal allottee, there is no permission accorded by the Government. It was vehemently contended that in the allotted plo!^presently some third^parties are running commercial activities who happen to be sub-lessees o[ petitione r. Originally, Plots 3,³ / 1 Lo³ /7 , in^Azamabad Industrial Area had been given^qn lease to M/s^{Shivdat Rai} Gulab Rai lor 99 years for setting up of Spinning and^Weaving Mills in the year 1952. Thereaftcr, Inspection Report dated 03.o2.1979, Mr Mukund Lal, Sri Afnruittal, Sri^{Madusudan,Sri} Aravind Komar and Mr Bharath Kumar^{as partners} of^Super Steel Distributors and Manufacturers^went into^productionin November 1977 . lt was also stated in^{the Inspectionreport that} Mahaveer spinning Waste Plant is^{p partnershipfirm occupying} 2383 sq yards and was running at^{the time} of^{inspectionand} improved the production activities. Thereafter,^partitionwas affected among the legal heirs^and {hree^{applicationswere made} to the Government seeking recognition of such^{arrangementand} for execution of lease deeds to that^{effect. The request of the} occupants of Plot No.3, 3ll to 3/7^{was forwarded to} Government uid.e Letter datdd O3-O4-lg7g with^a

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recommend:1tion to allow one year time for est ablishing their respective plants. In the meanu,hile, due to unzruthorised subletting cons -luctions/ alterations, show cause lto-ice u.as issued on O4.O7.llt79 and they have replied on 09.01 .1979. Finally, they were directed not to take up any additionr I unauthorized constructiol / alterations till a decision is aken by the

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Government, on thcir representations for estrlblishing their respective units uide Le lter dated '29.O8.1979. Fr rrther based on the represe ntations madc by all the partners, a mceting u,as conducted rl Additional DI, RDO and DDTC and dccided the entire plot l,lo.3, 3/ I to 317 to bc divided to all tlre partners and the Government was addressed uide Lr.No. l,l97oll AAl73, dated 12.07.1984 recommending the extent rf acres to be allotted anci lease deeds to be erccuted separat( tf i.e . i) Gulab Rai - 3076.50 Sq.Yards, 2) Prahlad Rai - 6527. r0 Scl.Yards, 3) Sunder Mal - 7092.50 Sq.Yards and 4) Bilas Rai 7431.50 Sq.Yards^jn all total '24128.OO Sq.Yards. Hovr.ever, the Government sought certain clarification on the above proposals. The Director of lndustries furnished thc r rcports on 19-11-1985., O2-O7 - 1986, 05-08-1986. The Government again requested ,br some more information on 06-( )8,1986. After

¶75

21

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protracted correspondence, the Eovernment uide DO Letter dated 2O-O7-1989 requested th6 Director of Industries to conduct physical verif-rcation of plqts and furnish modihed draft show cause notices as per the ooinion of the Government Pleader. The Supervisor, AIA Hyderabad on 28-07-1989 inspected the area in Plot Nos. 3 3/l to 3/7 and reported the extent of areas under the possessi Sn^{ol each Partner alongwirh} the particulars of sub-lessees. Acc$rding^{to the sketch, the total} extent of area of all plots is coming to 23380 sq yards. However, no approval was given by the vernment to the partition affected by the legal heirs of tr,e original allottee among themselves. At this^juncture, to arib misuse of the Government lands at Azarnabad Industrial Arda, The Azamabad Industrial Area (Termrnation and Regulation bf Leases) AcL, 1992 came to be enacted. Further it was als q contended that the Joint Inspection report dated O1.O4.2O2 d reveals that Piot Nos.3, 3/ 1 to 317 are presently in occupatipn of several legal heirs of original al1ottee. The Inspectron report also reveals that no industrial unit is being operated tiy the legal heirs in the said plot. However, the plot is also nqt vacant. Instead, the legal heirs in occupation of the subj plot have illegaliy let out

¶77

22

¶78

portions of the plot to several business con,rerns such as M/s Sai Balaji Packaging, M/s R R Offset Printt'rs, M/s Deepti Printers, M/s Big Apple on rent, to run t'1eir respective commercial businesses. Category A' covers those^plots, where an industrial unit is present either in working condition or nonworking conclition (dormant) {Category A (1Xi)} or rvhere there is no IndustrizLl unit at all and the plot is vacant. but Industrial activity had taken place previously in the said plot {Category A( 1)(ii)) or u'hcre the unit holders came into po ssession of the plot after otrtaining permission of the Governmc^'rt. But, it does not include those plots which do not fall t ithin either of these conditions. In the present matter, the subject plot neither has an operational/ dormant industrial unit nor is tre plot vacant. Instead, portions of plot have been 1et out to brrsiness entities and thereby personal commercial gains/rent are teing rnade out of the Government land illegally. Further, the internal arrangement/ partition made by the Petitioner has not been approved b5'the Government- Therefore, the sr-rbject plot does not fall uncer Category A of clause 17 of G.O.lvls.No.19 dated 29.08.2023. Lastly, it was contended that ijection 3(3) of Azamabad I edustrial Area (Termination and regutation of leases)

¶79

23

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Act, 2OO0 provided that Iessees whose lease did not stand terminated on the appointed dat[ as per Section 3(1)(a) shall have the option of being granted lreehold rights in lieu of fresh lease under Section 3(3), hou,ever, the very lease itself stands terminated for those lessees who fall under any of the categories mentioned in Section 3(1Xb), which includes⁽ⁱ⁾ misusing of^land for a purpose other than the fl.,.po". for which land was allotted including non-user; or⁽ⁱ ) sub- letting or transferring the plots or portions of plots by entering into^disguised partnerships and other unauthorised transler of interest in the plot; or (iii) violation of any terms, conditions or covenant specifred in the kase Deed. It is submitted that, even as early as 1979, the allottees of the subjept^{plot resorted} to^illegalsub- letting against which show cause notice dated 04.O7.1979^was issued against them. Further, the^par[tlon /^{internal divisionof} the plot by the legal heirs of^{the whole plot allotted to original} ailottee is not recognised or approved by the^Government. Therefore, Petitioner cannot take^{recourseof SecLion 3(3) of the} Act

¶81

Thereafter, petitioner had taken out LA.No. 2 of 2024 seeking amendment of the^ptayer. In^{the said Application,}

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it is conterLded that this Court by order dalecl 23 .O2.2O24 directed the Respondent Authorities to consider the application of Petitioner as falling under Clause 17 (1) Categ,rrv'A' in terms of G.O.Ms. No. 19 dated 29.08.2023 and reccirc lOO7o of the market valuc to convcrt the land beionging to Pr:titioner from lease hold to free hold. The 4h Respondent ur,.lt: proceedings dated 20.O3 .2024 passed orders disposir g petitioner's application holding that it is lound to be not c'ligible uncler Catcgory 'A of G.O.Ms.No.19 dated 29.08.20!3. Contcnding that impugned procccdings dated 2O.03.2O24 passcd *'ithout any applicat ion of mind and the same is contrar v to record the amendment petition is hled by petitioner seekir-rg amendment of the prayer irr lhe main writ petition which was nll,rs ed by this 6. [t ,vas contended brl, Respondents ] ancl 2 in the additional (:ounler that admittedly, Petitioner entered into unauthorize I partnership and had let out the strbject plot to third partier; u,ithout the approval of the Govt rnment. While originally, the plot was leased to the original rrllottee tor the purpose of r:stablishing Spinning and weaving nrills, according to the joint inspection report of 2022, th,e third prirt.ies currently in occupaticin are utilising the valuable Goverr rmenL land as

¶84

25

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godowns and for other commercial business not amounting to Industrial purposes. This is a direct and irrefutable violation of Section 3(1) (b) of tine Azamabad Industrial Area (Termination and regulation of leases) Amendment Act, 200O. That, the impugned order dated 20.3 .2024 has been passed in accordance with G.O.Ms.No.19 dated 29.O8.2O23. It was contended that, no lndustrial unit is present in the subject plots as per the Joint Inspection repprt, 2022 and instead, the subject plots are being utilised as godowns and to run commercial businesses. Therefo rer the impugned proceedings daLed 2O.3.2O24 rightly held that the Petitioner is not eligible under Category 'A' of G.O.Ms.No. 19 dated 29.O8.2O23. lt was also contended that on verifying the record and the^application hled before the TSIIC / Respondent No.4, it is found that Petitioner never fried any document referring to^partnership with the third parties. More particularly, Petitioner^{has not hledthe} partnership deeds that are noiv being filed along with I.A. No.2 of 2024 in W.P No.4719 of 2ODa. Therefore, filing new documents by the Petitioner after rejection order dated 20.3.2024 passed by Respondent No.4 is totally untenable and

¶86

26

¶87

can be treal ed as invented for the purpose of r,:lief claimed in the present /rit Petition.

¶88

I[ u,as contended that by virtue of the 2000 Act, upon condrtcting due enquiry, it is clear thal if a person is falling in an1' of the conditions stipulated in SecLion 3(1)(b), his Iease is liable to be cancelled automatically.^'lhe Inspection report dated O1.O4.2022 which is part of tl-re enqlrirl' by rcspondcr-rts clcarly demonstrates the fact thi.t lease of the original allc ttcc/ legal heir stands terminated a utomaticallf in terms ol [he Scction 3(1)(a) r/rv Section 3(1)(1;) as thc rcport clea-rly divuLges the fact lhat some third parties are conducting business wl'rich is not in tune/ line with the clefinrtion of the Section 2(b) and 2(d) of the Azamabad IndusLrial Area (Terminatior-r anri Regulation of leases)Act, 1992. 7. Sri I-. Prabhakar Reddy, learned Slrnding Counsel for the 4t. respondent contends that Gov,:rnmcnt mad e amendment s to Azmabad Industrial Area (Tt rmination and Regulation ol Leases) Amendment Act, 1 of 2,)00 by making necessary trmendment to Section 3, giving oprion of freehold rights. Purr;uant to the said amendments, G.( )s s'ere issued from time to time including GOMs No.19 datec 29-08-2023 in

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supersession of earlier orders. Under the said G.O. the Government nominated the 4d r$spondent as Nodal Agency / Competent Authority for extendini freehold rights in respect of Azambad Industrial Estate in accordance u,ith the guidelines stipulated there under and to execute sale deeds, etcetera. Under the said GOMs. No. 19, dated 29-08-2023 two categories were made. Under category (A)(t) the units in possession of^al1 the original allottees including thefr legal heirs^whether working or not working; (ii) whereas as^{per joint} inspection report of 2022 submitted by the officials of revenue & industries department, the plot is vacant and is in^possession of the original allottee and industrial activity has taken^place previously in the allotted plot. (iii)The unit holders who came into possession of the unit thror-igh the original allottee after obtaining permission of the Government shall also be treated as eligible under this^"A" category. The registration^value of^lOOo/o in accordance with the guidelines of the registration department as on date of registration are liable to be charged. In category^- "8" all units excluded under "A" dategory and in possession of unit holders as per the^joint insp$ction^report2022 submitted by the ofhcials of revenue and industries department^would

¶91

')(

¶92

come. That the registration value of 2OO%o is in accordance of guidelines :f registration department as on the date of registration are liable to be charged. The Petilioner claim as legal heir of original allottee and comes under category "A" of the above GOMsi No. 19 dated 29.O8.2O23 is totally r ague, incorrect and specihc:rlly denied. Therefore the claim that I he petitioner is r,r,illing to pa1- 100% of the market value is totally untenable and unsustainat,le. As a mattcr of fact, letter dated 14 06 20 1O madc by pel itioner u'as duly considered by the^{z tr'} Respondent, in terms of the orders of this Court dated 23.02.11024 and claim ol petitioner to treat hrm under category'A'of the said G.O was rejected by lrassing a reasoned order in letter dated 20.O3.2024. The petitioner plot neithcr an operational/ dorr rant industrial unit nor is vacant, on the other hand, portions rf the plot u,as let out by petitioncr to the other business enti ies other than industrial purpose namely - for commercial pr Lrpose without obtaining any permission from the Governm,:nt. Thus the petitioner u:-rit does not come under Clauses O, (ii) & (iii) of category A'r>f the said G.O.Ms. No. 19, dated 29.O8.2023.

¶93

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8 Learned Special Government Pleader, while concluding his submissions, h relied on the following judgments.

¶95

t The State oJ Rajasthan o. Sha,rwo,n Kumar Kumawatl.

¶96

Coromandel Mining AND ExPorts Put. Ltd u Union oJ India [W.P.No.7O364 oJ 2015 & batclt).

¶97

9 Petitioner hled reply to the counter of Respondents I and 2. Learned counsel for petihoner based on the said^reply submits that G.O.Ms. No. 19, dated 29.O8.2023^was issued^with avou'ed object of conversion of leasehold^lands in^Azamabad Industrial Area into freehold lands subject to the criteria^{set out} in the said GO. To begin with, the State Government constituted a Joint Inspection Committee comprising Offircials of the Industries Department along "h^{ththose of theRevenue} Department to ascertain the status of the utilization of^{the lands} allotted to industrial units and to submit a^{joint inspection} report to the government. As set out^{in para 12 of the said GO,} Joint Inspection Report was submitted on^01.O4.2022 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

¶98

'^{2023 LweLaw(SC) 586}

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allotments and that the Industrial units were found to be run by sub tenant:; / occupiers. It is further stated^rhat the State Government request from such occupants for gr rnt of free hold rights over -l-re lands. In those circumstances, t appears that the Govern nent constituted a Cabinet Sub-Committee for resource mc bilizalion. The said Committee in its mecting heid on 25.06.2022 decided to extend freehold rights to all units in the estate. Thereaftcr, as se t out in the GO, rcvie ,v mecting u,ere conducted on 05.O7.2022 and 16.O7.2022 b1' thc Chief Sccretary orr thc course of action to be adoptcrI lor extending free holcl rirlhts to thc occupants of land to t'rrce Industrial Estates whir;h include the Azamabad Industrial Estate. From lhe above, it is clear that notwithstanding the fac. that the Joint Inspection Fieport disclosed that majority of the r.rn its violated the terms c f the leasc and u.ere [ound not b:: fr-rllil1ing the objectives of the allotment and that most of the industry units were found to be run bv sub- tenan t/ occu piers, the 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 failLng to fulhl the objectives of the a1 otment by the lease holden; was not treated as a material fact lor the purpose

¶101

3l

¶102

of conversion of lease hold to frLe hold, tn that view of the matter, various averments in the Additional Counter Affidavit and reference to Section 3(1)(b) of the Act, 20OO are n'holly irrelevant for the purpose of the^present writ petition. It was further contended that in G.O.Ms No 19, the^State Government on further e xamination of the issue and taking^{into accountthe} observation made by this Hon'ble Court in order^dated 23.06.2023 in WA.No.634 of 2023 set out the^{policyguidelines} and rules regarding regularizatiorl of the^{property.Thereupon,} Government categorized the lndu$trial^{trstate into Category 'A'} and 'B'. Category^'A' Sub Category (i) relates to unitsⁱⁿ possession of the original allottees including their legal^heirs whether working or not. Sub Catggory (i) refers to^{plots rvhich} are vacant and are in the^possessif,n of the original^{allottee and} where industrial activity had taken place^previously in^the allotted plot. Sub Category⁽ⁱⁱ⁾ relates^to unit^{holders who came} into possession of the Unit through the original^{allottees, after} obtaining permission of the Govt. {ategory^{B comprisesall other} units excluding those set out in iategory^{'A' and in possession} of the respective unit holders as^per the^{joint inspectionreport} of 2022. Thus, the requirement delineated in^{Category A (i) are}

¶103

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that the ori5;inal allottees or their legal representalive should be in possessicn of the unit whether or not there is any manufacturing activity in the said Unit. The Petitioners case is that therc arc the legal representatives of the original allottee and are in rossession of the units. Thal, seriitl No.24 of the Joint Inspe<:tion Report daLed 1.4.2022 relates to the subject 1ands. Uncl.:r the column which relates to rlamc of the Company/A lottee along r,vith the address (Name ot the Original Allottee) thc name of Shiva Dut Rai Gulab Rrri MC Mills is mentioned. The said Shiva Dut Rai Gulab RzLi is the grandfather of the Petitioner. Under column rel rting to details of the preserrt occupier it was menLioned as legal l-reirs o[ Shiva Dut Rai Gulab Rai MC Mills, the origina.l allotr,cc. Under the column rcla ing if leased/lcssor name, it is mentioncd as legal heirs of Shir a Dut Rai are using office and let or rt to Sai Balaji packing, RR Offset printers and Deepthi printer s. Therelbre, what has bejn set out in the Joint lnspection Re)ort is that the original allot tee was the grandfather of the Petitioner ald the Petitioner is in occupation in their capacity- of le11al he irs of the original alloltee and some parts have been allepledly leased in

¶105

-) -)

¶106

favour of Sai Balaji packing, RR Offset printers and Deepthi prinlers.

¶107

It was further contended that impugned order dated 20 .O3.2O24 is without any appiication of mind as the⁴ⁿ Respondent failed to understand ti[e issue in correct^perspective inasmuch as the fact that, once it !s not disputed^{that Petitioner} is the legal heir of the original alloftee and being in^possession, his Application directly falls under Clause 17⁽¹⁾ Category^{'A' of} G.O.Ms.No. 19 dated 29.O8.2O23 and therefore, the^4th respondent ought have considered^{the caseof Petitionerunder} relevant rule without any self- impdsed^{restrictions.The order of} the 4(h Respondent only contains t4e extract^{of the relevant para} of GO and the order is wholly^{u'ithout any application of mind} and bereft of any reasons much less^{valid and justifiable} reasons. The contentio., of n..po.rlents that^{Petitioner violated} Section 3(i)(b) of 2000 Act is^{witilrout any merit} for^{the same} was not preceded by any enquiry as contemplated^underSection 3(1)(a). Petitioner was undertaking industrial^{activity as on the} appointed date of coming into^{force the AmendmentAct, 2OOO} and once no action has been taken^{under3(1)(a) read with} 3(1)(b) of 2000 Act for termination^{of leases,Petilioner is eligible}

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for grant of free hold n ights under Section 3 (3) . Petitioner had been makirrg Applications and representatior s since 2004 under every new scheme/ policy/GO of the Stalc Government introduced lbr grant of free hold rights, right frr',n-r 2004 to the latest being in 2024 and htrd also attended personal hearing but never a hnal decision was taken by Respondenls granting free hold rights to any of the lessees and the requesrts u,ere put off on one pret^jxt or the other. Therefore, after thi:. length of time and alter acc:rual of rights in favour of petitione under Section 3 (3), it is not open for Respondents to allcgc that Pe[itioncr violatecl Ser:tion 3(1)(b) oi the 2000 Act. It v'i:s vehcmently contended ttrat the issue for consideration of tLis Court in the present lis is whether Petitioner violatecl Section 3 (1)(b) of 2000 Act or v,,hr:ther lease of petitioner is to bc lerminaled or determined but the issue lbr consideration is u'hether Petitioner as a legal heir of the original allottee is in possr:ssion or not to fall under Category^'A' of (i.O.Ms. No. 19 dated !,9 O8.2O23. The Joint Inspection report as r,vell as the impugned order dated 2O.O3.2O24 of the 4ft Respondent and also in the counter affidavit fik,d by Respondents 7 and 2, they have categorically stated that several legal heirs of the Original zrllottee are in

¶110

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possession of the subject land and once the same is admitted, Respondents are obligated to consider the case of Petitioner as falling under Category'A' of G.O.Ms No. 19 dated 29.O8.2O23. It was further contended that according to G.O.Ms. No. 19 dated 29.08.2023, once it is not disput4d that Petitioner is the legal heir of the original allottee, his Application directly falls under Clause 17⁽¹⁾ Category'A'and the same cannot be denied on the sole ground that no industrial activity is^going on. The State Government as early as in 2004 bfr a^press notihcation made a conscious decision to shift industrigl activity from Azamabad, as by that time it was surrounded by thick residential^population arld had also imposed restrictions through the^Pollution Control Board to reslrict industrial activlity aL^{Azarnabad. Petitioner} found it difticult to run industrial {ctivity in the subject land as proper permissions were denied by the State Government and in tune with the decision of the Government,^gradually industrial activity had come to a standslill at Azamabad Industrial^Area. The State Government, on the one [rand, took a decision to^shift industrial activity out of Azamabd.d and on^{the other, denied} benehts to Petitioner on the^ground that no industrial activity^is taking place in the subject land. The Joint^{InspectionReport,in}

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unequivocal terms under the heading 'present^,rccupier' states that legal hcirs of onginal allotee Shiva Dut Rai^(iulab Rai are in possession and occupation. The impugned order dated 2O.O3.2O24 rvhile erroneously rejecting the A pplication also states that several legal heirs of original iLllottec are in possession of the subject land and further, in the earlier counter hk cl by this Respondent also, it r s categorically mentioned that legal heirs are in possession of Ie nds. Scction 3 (1)(a) of the 2O0O Act clearly states, an enquiry teeds to be conducted l- efore [aking any action under Sectio r 3 (1)(b) of Lhe 2000 Act. Further, the statement of objects and reasons ol the Amendment Act, 2000 clearly states that autome,tic termination under the Act, 1992 was challenged before this .lourt and later r,r'as carriec to the Hon'be Suprcmc Court and that the Government considered it necessary to amend ti-re Act suitably by making zL special provision lo follow due pro,:edure of show cause noticr: for termination of existing leases. Therefore, thc statement that lease has been automaticaily terminated is misconceive,l and without any merit

¶114

This Court has given anxious attentron to the rival submissions of both the parties and perused thr: entire record.

¶115

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¶116

In order to resolve the present lzs, it is apposite to have a look at the relevant provisions of law add G.O dealing with the said issue. The relevant portion of G.Q.Ms.No.19, dated 29.o8.2o23

¶117

is extracted hereunder:

¶118

" 17 . In such circumstancesi^{the marter was examinedin detail} and after careful consideration of the^I fnaller Rovernment has decided^to issue freehold rights to lhe existing occ upants/industrialists in Azarnabad Industrial Area. Accordingly, Government in supersession of the orders issued in reference 4th to^gth read above, herebl issue the following orders in order to regularise the industrial^{plots ocr} Iupants/^{ind ustrialists in Azarnabad} Industrial Area:I. The units in the Alaamabad tndustrial Estate shall be categoriscd into th! lollorrrng t1\o calegories: CATECORY A^.

¶119

(i) The units in posspssion of a the original allottees including their legal heirs whether working or not ,n orking.

¶120

(ir) Where, as per th<F^{jointinspectionreportof2022} submitted by th e officials o[ revenue and industries department, th€I^{plot is vacant and is in position o[} the Original allottee and induslrial activily has tal(en place pre\l,iousty^{in the allotted plot.}

¶121

(iii) The unit holders rvlfro^{c"-.into possession of the unit} through the !riginal^{allottee afteroblain ing} permission of tl[e^{governmentshall alsobe treated} as eligible undetI^{this category.} CATEGORY B^.

¶122

(D All other units exclfuding^{Category A, in possessionof} the respective unit holders as per the^joint inspection reporlL^{ol 2022 submitledby the officials} of revenue and ilndustries^department.

¶123

I[. Government, consrfious^{of the fact that the original} allottees were the hfst^{to respondto Government'scall} of industrialisation of the State and for that cause invested their timle,^{moncy and eflorts[ocreate} employment for thle^{peopleofthe state leadingto} development of the state. hxed the rate for these Unit holders at lOOok of registralion value and for others at 2OO%o of .registratiorI^{va.Lue,even thoughthesame is far} below the prevailin [g^{market value,inrecognition of}

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¶125

their efforts. Accordingly, the Governr nent has hxed the rates of these two categories as follor,r s:

¶126

Category A: 1007o of the registration value as on date (i.e. date of registration) in accordance r.r.ith the guidelines of the Registration Departnent.

¶127

Category B: 2OO%o of the registration value as on date (i.e. date of registration) in accordance ,,-ith the guidelines of the Registration Departnlent.

¶128

II

¶129

In view of the fact that the Azamabad lndustrial area is norv in the heart of the city surroun led by residential area and in order to encourage these industries to change their line of activity to environmentally friendly activities permitted in the area or to cLiversify into other activities permitted in that area, the Government hereby permit to change of land use lrom lndustrial to an!' other ca,tegary, duly collecting tlre reqrrirecl fee as per GHMC rates".

¶130

I 1 . {zamabad Industrial Area (Terr nination and

¶131

Regulation r,f Leases) Amendment Act No.1 of 2CO0 came into force with e lfect from 17 .O2.2OOO. The reievant provisions are extracted he reunder:

¶132

'' TerEination of Leases: Section 3 (l)(a) Noh.ith standing anything contained in the lndirLn Contract Act, 1872, tJre Transfer of Property Act, 1882, or an).oth,)r lau. lor the time being ir force, and the terms and conditions of any lease entered into or oth€r arrangement made with any person i| respect of any demisecl plot either by the erstwhile Nizam's Government or by the erstwhi e Government of Hyderabad or by the Gove nment of Andhra Pradesl prior to the appointed date, all those leasres, sub lcases or other al rangements made or entered into through a -.egistered deed or othenvire in respect of all demised plots in Azamabld Industrial Area which rrfter due enquiry attract one or more o the ground for cancell€ tion of lease as specified in clause (b) shaU stand terminated

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on the appointed date and there llpon att such^{leases, sub-leases or} any other arrangement whatsoeuei made by the^person in occupation of the demised plot sha-ll stand anpulled and every such demised^plot shall vest in the Government free fLom all encumbrances,

¶135

Section 3 (l)(b) - Notwithstanding anything contained in any other law for the time being irl force, the^leases of^plots or portions shatl be calcelled on either all or an-v of the following grounds namely: -

¶136

(i) misusing of fand for a purpose other than the purpose for [vhich land was allotted including non-user; or

¶137

(ii) Sub letting or transferring lhe^plors or^portions o[ plots br cntering into disguised partnerships and other unauthorised transfer of interest in the plot; or

¶138

(iii) Violation of any terms, conditions or covenant specifred in ttle lease deed

¶139

Explanation: For the purpose of this Act.,^rvhere a lessee enteqs into a partnership, agreement or other arrangdment for carrying on anj activity whatsoever on the demised plot, then notwithstanding, anything in the Indian Partnership Act, 1932 it shall also be deemed to be a violation of the conditions of the lease."

¶140

It is also imperative for this Court to look into the object/ intention of the Legislature to^{enact the Azamabad} Industrial Area (Termination and^{regulationof ieases) Act, 1992} for the purpose of adjudicating t4e^{presentlis. The relevant} portions are extracted hereunder,

¶141

l. Object and reasons of the Azamabad^{Industrial Area} Termination and Regulation of leases) Act,^{1992 -}

¶142

40

¶143

lt

¶144

Ill

¶145

Whereas an Industrial area Known as Industrial Area, Azamabad Hyderabad had been selected a )d established by the erstwhib Nizam's Government ivith thc sole object of establishing industries and the said Incustrial .lrea was developed into different sizes of plots \,tl) infrastructure facilities for leasing them out to persons ir tending to set up Industries:

¶146

And whereas the developed plots in th( Industrial Area, ,{zamabad, I{yderabad, were leased out t(, !,arious persons tLnder varying terms and conditions inch rding pavment of rents by adopting dilferent forms of lease dc' ds:

¶147

lv nnd whereas it has come to the notice of th,r (;ovcrnment tttat contain lessees or occupants are putting tl.r: plots o[ portions of plots to Llnaulhorised uses and ccrtair othe. lcssccs or occupants are mrsusing valuable industri rl urban land for r esidential purposes as also for warehousinfr activitl i\nd whereas, it has also come to the notice )f the Govcrnment that some lessees are sub-letting or transf,:rring the plots of l)ortions^{of plots by enteringinto disguisec partnershipsand} transfer of shares of companies to secure lezrs<: hold transfers;

¶148

13 Likewise, it is also essential to met rtion about feu definitions rn the Azamabad Industrial Area (T :rmination and Regulation .rf leases) Act, 1992;

¶149

L Section 2{b): "Azamabad Irdustrial Area" means the land

¶150

orvned by Government and situated at Mushirabad rvithin the iimits of Hytlerabad municipal Corporation divided into plots

¶151

4t

¶152

of different sizes for industrial purpose by the erstwhile Nizam's Government and kitown as Azamabad Industrial Area;

¶153

Section 2(d) "Dernised plot" means any plot of land or thereof in the Azamabad Industrial Area, u'hich has been leased out to any person lor lndustrial use either by erstrvhile Nizam's Government or by the Government of Hyderabad or by the Government of Andhrh Pradcsh or in respect of^rvhich there is otler arrangement^q.ith any^person;

¶154

lll.

¶155

Section 3 - Termiuatiol of leases.:- Nol wilhslanding anything contained in thd Indian contract Act, 1872, the transfer of property Act,^I 882 1872 Contract Act 4 of¹⁸⁸² -^or any other law of the time being rn force, and the terms and conditions of any lease eftered into or other^arranElement made with any^person in reppect of a11., demised plot either by the erstwhile Nizam's Gbvernment or b-v the erstwhile Government of Hyderabad or b)' the Government of Andhra Pradesh prior to the appointed date, all leases or other arrangements made or entlred into through a registered deed or otherwise in respect of all demised^plots in the^Azamabad Industrial Area, shall stand terminated on the appointcd date and thereupon all sub-leEses or any other^arrangements whatever made by the^persdn in occupation to hold^possession of the demised plot shall stand annulled and every such demised plot sha-1l vest in the Government free from all encumbrances and shall be used subsequently for industrial purpose only.

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(2) Upon tlle termination df the lease or other arrangement under sub-section (1), the rights and liabilitres as between the parties to the lease or other arrangement shall cease and determine, but any amoun! due to the Government from the aforesaid person under the lease or other arrangement so terminated shall be recovered as an arrear^of land^revenue."

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On careful reading of the above^provisions of the

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1992 AcL, this Court hnds that in^view of^{Sections 2(b) & 2(d) of} the Azamabad Industrial Area^(Termination and^Regulationof leases) Act, 1992, it is succinqtly evident that the^very object/intent of the kgislature is to allot^{plots of different sizes}

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only for ind rstrial purpose and for no other purl)ose. 81- virtue of the I 992 .\ct coming into force and in terms^,rf Section 3( 1), all leases u',:re terminated on the appointed day. Hou,ever, after lengthy Corrrr litigation, the State Governmen t has brought amendmenL to the Act, 1992, more particularly Section 3 in 2000 u,hich resulted in the Azamabad Irrclustriai Area (Termination and Regulation of leases) Amendnrent Act, 2000. In 2000 Act, amendment $ras only brought to Lhe Prcamble, Sections 3,^.+, 5, 1 1, 19 & 21, thre remaining p ovisions of thc 1992 Act h:.r't: rcmained intact and the same are stiil in lorce. 15. As per Section 3(1)(a) of the 2OO0 Act, u,hat is to be noted is notwithstanding anything contained in the Indian Contract A<'1, 1872, the Transfer of Property Aci, 1882, or an1 other laq, tbr the time being in force, and .he terms and conditions of zrny leasr: entered into or other arrrrngement made with any p:rson in respect of any demised plr,t either by the erstwhile Nrz.rm's Government or by the erstwh i1e Government of HyderabrLd or by the Government of Andhra I'radesh prior to the appoir ted date, all those leases, sub-lt rases or other arrangements made or entered into through a registered deed or otherwise ir.r respect of all demised plots in Azarr abad Industrial

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Area which after due enquiry attract one or more of the ground for cancellation of lease as specified in clause^(b) shall stand terminated on the appointed date and there upon all such lcases, sub-leases or any other a{rangement whatsoever made by the person in occupation of the demised plot shall^stand annulied and every such demised plot shall vest in^the Government free from all encumbrances. 16 From the perusal of thb record, the undisputed^fact is that originally, Plot Nos. 3, 3 / l to 3 17 , in Azamabad Industrial Area had been^given on lease to M/s^{Shivdat Rai} Gulab Rai for 99 years for setting up^{of Spinning and Weaving} Mills in the year 1952. Thereaftdr,^{Inspection Reportdated} 03.O2.1979, Mr Mukund Lal, Sri^{A4nruittal,Sri Madusudan, Sri} Aravind Komar and Mr Bharath Kumar^{as partncrs} of^Super Steel Distributors and^{Manufacturerswent into production in} November 1977 . It was also stated [n^{the Inspection reportthat} Mahaveer spinning Waste Plant^is {.^{partnership firm occupying} 2383 sq yards and was running at^{the time of inspection and} improved the production activities.^{Thereafter, partition was} effected among the legal^{heirsand three applicationswere made} to the Government seeking^{recognid]onof such arrangementand}

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for execution of lease deeds to that effect. The request of the occupants of Plot No.3, 3ll to 3/7 was foru'arded to Governmenl vide Lr. No.224l1AA/66. dated 03 )4-1979 wrth a recommend rtion to allow one year time for es,ablishing their respective 1;lanls. In the meanwhile, due tr unauthorised subletting c onstructions/ alterations, a show ca -ise notice was issued on^t)1.O7.1979 and they have replied ,>n O9.O7.7979. Finally, thcv w'ere drrected not to take up anlr add t onal unauthorizr'd co nstruc tion / alterations till a decir;ion is taken by the Govern ncnt on t hcir rcprescntations for cs ta blishing their respective r nits vide Lctter dated 29.O8.1979. F rrther based on the representations made by all the partners, a meeting was conducted b1- Additional DI, RDO and DDTC and decided the entire plot I.1o.3, 3/ 1 to 3/7 to be divided to all tlre partners and the Govenrmenl, 'as addressed vide Lr.No. I l97Oll AA/73, dated 12.07.1984 reoommending the extent rrf acres to be allottecl anct lease deeds to be executed separately i-e., 1) Gulab Rao - 3076.50 Sq.Yards, 2) Prahlad Rai - 6527.50 Sq.Yards, 3) Sunder MtLl - 7O92.5O Sq.Yards and 4) Biles Rai 7431.50 Sq.Yards n all total 24128.OO Sq.Yards. However, the Governmen t sought certain clarification on the . bove proposals.

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The Director of Industries furnished their reports on 19-11 1985, O2-O7^'1986, O5-O8-1986. The Government again requested for some more informqtion on 06-08 1986. After protracted correspondence, the Government uide DO Lr.No. 1383/lF CelllTg-36, dated,2O-Ol-1989 have^requestedthe Director of Industries to conduct physical verification of^the plots and furnish modified draft slow cause notices as^per the opinion o[ the Government Pleader. The Supervisor,^AIA, Hyderabad on 28-07-1989 inspected the area in^{Plot Nos.} 3,^{3/ I} to 3/7 and reported the extent of a[eas^{under the possession of} each Partner along with the particulars^{ofsub-lessees.} According to the sketch, the total^{extent of area of} all^{plots is} coming to 2338O sq yards. Ho*.uL.^{no approval was givcnby} the Government to the partition aflected^by the^{legal heirs of} original allottee among themselves. At^{this juncture, to curb} misuse of the Government lands al^{AzamabadIndustrialArea,} The Azamabad Industrial Area lTeJmination^{and Regulationof} Leases) AcL, 1992 came to be^{enEcted. The Joint Inspection} report dated O1.O4.2O22 reveals that^{Plot Nos.3, 3/ 1 to 3/7 is} presently in the occupation of the several^legal heirs of^the original allottee. The Inspection rLport^{alsoreveals that no}

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industrial unil is being operated by the legal h<'irs in the said piot. Hou'ever, the plot is also not vacant. Instead, the legal heirs in oc(rupation of the subject plot have illcgalty let out portions of the plot to several business concerns such as M/s Sai Balaji Packaging, M/s RR Offset Printers, M/s Dcepti Printers, M 1s Big Apple on rent, to run tneir respective commercial businesses. Therefore, this court hnds that in view of enquiry Jr1. s.:ry of Joint Inspection report da:ed O1.O4.2022 and also in vieu' of legal hcirs in occupation of he subjcct plot have letting oul portions of thc plot to several bu,;incss conccrns such as M/s Sai Balaji Packaging, M/s R R Offst't Printers, M/s Deepti Prin :ers, M / s Big Apple on rent, to run iheir respective commercial businesses squarely attracts SectioL'r 3(1)(b) of the 2000 Act, resultantly, the lease of subject plot r s deemed to be terminated in terms of Section a(t) (a) and all th. arrangements whatsoever made b1, the person in occupation of the demised plot shall stirnd annulled and every such demise:l plot shall vest in the Gor.ernment free from all encumbranr:es. As such, petitioner's case cannot be considered under the head of Category 1{'since the petitioner do not fit into ary of the clauses menfioned in Category A' of G.O.Ms.No.22 dated 13.9.2023.

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t7 The above finding is also fortified by the detailed order of this Court dated 23.6.20 3 in I.A.No.7 of 2023 in Writ 4 Appeal No.634 of 2023 which h also taken similar view rn regard to very same issue. While at being so, this Court also finds considerable force in the co ntions of the petitioner that is the petitioner has been making applications and representations since 2004 under Every new scheme/policy/GO of the State Government introduce E for grant of free hold rights, oel right from 2OO4 to the latest ng tn 2024 and had aiso attended personal hearing but nelfer a final decision was taken by the Respondents granting fref nota rights to any of the lessees and the requests *.." prir, off on one^pretext or the other. Therefore, after this length of time and after accrual of rights in favour of Petitioner unde Section 3 (3), it is not open lor the Respondents to allege that e Petitioner had violated the Section 3(1)(b) of the Act, 20O0. As rightly contended by learned Senior Counsel Sri Sitaram Murth'iz, '1 the issue for consideration of this Court in the present lis is hot whether^{petitioners have} violated Section 3 (1)(b) ol 2OOO h,ct or whether the lease 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 are in possession or not to fall under^rlategory 'A' of G.O.Ms. No. 19, dated 29 Oa.2023.

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This Court already opined that petiti<rner cannot fall under Catel3ory A' of G.O.Ms.No.19 dated 29 O8.2O23 rnore particularly in vieu. of the enquiry and as we I as the Joint Inspection report dated I .4 .2022. Therefore, the 4m respondent has rightly passed the order dated 20.03.2024 stating that petitioner is not eligible under Category A' of Clause 17 of G.O.Ms.No.I 9 dated 29.8.2023. 19. Now' it is germane to refer to tL c contents in G.O.Ms.No.l9 dated 29.8.2023, relevant clauser; are extracted

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hereunder:

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" 12. The Government 'ide Memo No.29O 1/ Prl. Secy/ Indus/ Pesh/ 2O2O dated 29.1..',O2O ordered to conduct Joint Inspection of Azamabad tndustrial Es tate bv ofhcials of the [n,lustries f)epartment a]ong with the oIfi;ials ol llevenue Departrnent to ascertain the status of utilization of the lands allotted to Indr strial units and to submit a Joint Inspec ion report to the Government. Accordingly, the General Manager, l)istrict Industries Centre, l{yderabad has submitted Joint inspr ction report on 1.4.2Oi2. As per Joint inspection report, it was se( n that majority of the units have violated the terms of lease arrd were llund not fulfi11ing the obj,:ctives of the allotment. Further, most of tl e Industrial units were fcund to be run by sub-tenants/ occupiers and requests were receiverl from such persons lor grant of freeholc rights over this Govern ment land.

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13In view of the above, the Cabinet sub-comrr ittee for resource Eobilir:ation, lD its meeting held on 25.6.2022 has decided to extend freehold rights to all the units in the Estate. Review meetinljs were conducted on 5.7.2022 and 16.7.2022 by the Chief Secretary, on the court of action to be adopted for .xtending freehold

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rights to the occupaflts of tand in three^{industrialestates,which} includes the Azamabad Industrial estaie.

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Sunsequently vide reference 7n read^above, the^{Governmenthas} taken decision to categorize the Units operating .in the^Azamabad Industrial Estate into t\r'o^categories and hx their^{respectiverates of} the consideration value for^{granting freeholdrights in resPectof the} Government land at^Azanr,abad lndustrial Area.^Further,vide reference 8s read above, the Government^{had reclassrltedCategory} - A.

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The lease of the Government lands in^{Azamabad[ndustrialArea,} Azamabad has been terminated ln^{accordancewiththe Azamabad} Industrial Area (Termination and Regulation of^{kases) Act, 1992} amended by act one of^{the year2Q00, and the possession of the land} is vested with Government-^{The existingunits werenot evicted} immediatety because the Units^{wprking in theAzamabadlndustrial} Area were froviding employment^{td goodnumberof people.}

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On further examination^{pt theissue and followingthe} observations made b-r'^{theHonble HighCourt inorder dated} 23.6.2023 in W.a.No.634 ol 2023, that^{a policy,guidelines and rules} regarding regularization^{of properly concernedmay bc gramed after} following proper^{procedure,\i'ithaPpropriate sanctionsand approvals} vide a Government Order, clearly delineating^{the appropriatereasons} and objects behind the said^{policy decision of the Government and} the class of persons entitled^to !e^{regutarizedshall be specificatly} mentioned without any^scope for ambiguity.^{[t was decidedthat the} Memo No.50I/lP & INF/A1/2018,^{Dt.29.8.2022be withdrawnand} issue the follorving orders-^{Furthefit is decidedthat units in whose} favour sale deeds^{were executed} on^{payment of fullconsiderationas} per reference 7d read above, need not further take any^{steps as the} plol occupied by them is^{completelyvesled".}

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From the bare reading of the^above, it is^explicit that the Government has decided^{to issue freehold rights to the} existing occupants/^{Industrialistsin AzamabadIndustrialArea.} From the above enunciation of^{facts and reasonsgiven, it is} clear that petitioner cannot^{be falling underCategoryA' of the} G.O.Ms.No.19 dated 29.8.2023.^{However, since petitioner is}

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still an exis ting occupant who does not satisfy the conditions mentioned in Category A' has automatical. v falls under Category 'B' of G.O.Ms.No.19 dated 29.O8.2O2i s,hich cleariy states that all other units excluding Category 'l' in possession of the respective unit holders as per the Joint Irspection report of 2022 submitted by the Officials of revenue ancl Industries Departmcnt . Resultantly, the rate prescribed in Category 'El' shall be applicable to petitioner i.e .,2OOok of ht: registrzrtion value as on the date (i.e. date of registration) in i cr--ordance u,ith the guidelir e s of Regisrration Dcpartment. 27. Coming to the decisions relied upor by the learned Special Gor ernment Pleader, this Court finds th: said decisions are noL applicable to the facts of the present cas: since the said clecisions cleals with the aspect of legitimate e> pt--ctation. The decision of the Hon'ble Supreme Courl in 'Sltarwq.n Kuntar

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Kumanaat'is r,l,ith regard to person's right tc cl:rim that he should be granted mining lease in any Iand L elonging to the Governmen t and the issue therein was that the right being not legal, aparl from being non-existent, it can certainly be not enforceable. Therefore the said decisions has no relevance to the presen[ case. With respect to the second decision of the

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:r{i*,r'il

5l

Division^{Benchof this Court inCoronandel Miniag and} Exports Pvt. Ltd.^{case,Ltre learnedSpecialGovernment} Pleader has emphasised^{ort the lssuc of the Poticydecision of} the Government.^{This Court does not dispute with the settled} principte of law^{with respect tQ the policydecision of the} GovernmenL and^{limitationsolinterferenceby this Court.} Admittedly, the^{Governmentitsclf has takcn decisionto issue} lrce hold rights^{honever b1' c25.t,r.r-r-rg thc cxisting units uporl} satisfying^{tl-re condiLions mentionedinG O.Ms.No.19 dated} 29.A.2023 and^{pctitioner beingttre existing occupant rvho does} not fall undcr^{Category 'A'as stated suprarvill automaticallyfall} under Category'B',^{thereforc, as sLated supra,rate prcscribed in} Category 'B'^{shall be applicableto pctitioneri.e., 200%oof the} registration^{valuc as on tlic date (i-c-, datc of registration) in} accordancc^{with the guidelincs of Registration Department.} 22. This Court hnds that in terms of G.O.Ms.No.l9 d,aLed. 29.O8.2O23,^{pctitionerbeing the existing occupantwho} does not falt^{under Catcgory 'A'} ivill^{automatically fall under} Category^{'B', therefore,the rate prescritredin Category B' shall} be applicabte to^{pe[itioneri.e.2OOo/a of the registration valueas}

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on the dalo (i.e., date of registration) in accor,lancr: tvith the guidelines tf Registration Department.

¶191

Accordingly, this Court directs the respondents to converr- the subject land of petitioner i.e. 6487 Square Yards bearing Plot Nos.3, 3lL to 317 in Azamabad Industrial Estate, Hlrderabad from leasehold to freehotd in terms of Clause 17 Category 'B' of G.O.Ms.No.L9 dated 29.8.2023, however, by collecting 2OO"h of the registratjon value as on the date (i.e. date of registration) including any other charges in accordance with the guidelines ,rf Registration

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Departnae:nt.

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24 . The Writ Pe tition is the refore, disp, r5e6 of u,ith the abovc direct ion. No c,)sts.

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'25. Consequently, Misccllaneons Appl catir>ns, il any shail stancl closecl.

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t--

¶196

NOTE:- That the 23d paragraph of the order dated 01.05.2025 in W.P.No.4719 of 2O24 is deleted and substituted as f()llows^,,23. Accordingly, this Court directs the resp()ndents to convert the subject land of petitioner i.e. 6487 Square yards beaiing plot Nos.3, 3/1 to 3i 7 in Azamabad lndustrial Eltate, Hyderabad from leasehold to freehold in terms of Clause 17 cat€,gory^,B, of G.o.Ms.No.19 dated 29.8.2023, how€,ver, by collecting 200% of the registration value as on the daie (i.e. Date of registration) including any other charges in

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SD'.A. SRINIVASA REDDY ASSISTANT REGISTRAR

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PTO

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accordance^{with the guidelines ofR$gistration} 'ut p"' the orders of Honrble Gourt

¶201

4"";;;;;;i' ilLt iiLii.r.*^{in r'A'No'1or 2025'} This amended^{order shall substitute} 'the

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"rai"r'ori..i;j;h o3l07l2o25.^{htt alreadvbeen dislatchedon} SD/. A. SRINIVASA^REDDY AS TANT^REGISTRAR

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/iTRUE^C p PYII SECTIO^{N OFFICER}

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To, and Commerce^{Department' State of}

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1. The^{Principal Secretary'lndustries} Telangana,^{Secretariat,Hyderabad}

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1. rne^{Commissioner of lndustries'Go} ternment^{of Telangana,ChiragAll Lane,} Abids,^{HYd erabad}

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J, The District^{Collector, HYderabad Disrict,} Directo^{HYd erabad} r,^{TSIic 6'n Floor, Parisrama} 4. The Vice^{Chairman andltlanagln} Bashe rbagh,^HYderabad-04

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