1. Petitioner, a Company incorporated under the provisions of the Companies Act, 1956 (for short "the Act, 1956"), has filed the present petition, impugning the order dated 25.11.2020 passed by the Additional Chief Secretary, Department of Industrial Development, Government of Uttar Pradesh, Lucknow (Revisional Authority) under Section 41(3) of the Urban Planning Development Act, 1973 (for short "the Act, 1973") read with Section 12 of the U.P. Industrial Area Development Act, 1976 (for short "the Act, 1976").
Further prayer has been made for quashing of Letter of Cancellation dated 06.01.2021 issued by the Greater Noida Industrial Development Authority (for short "GNIDA"), demanding Rs.67,78,23,456/- in respect of Plot No. 2, Sector Ecotech-16, GNIDA, ad-measuring 58271 square meters as per the lease dated 22.06.2011 executed by the GNIDA in favour of the petitioner in pursuance of the allotment letter dated 31.03.2011.
A prayer has also been made for quashing of the letter dated 29.09.2021 issued by the GNIDA, directing the petitioner to deposit Rs 67,78,23,456/- within a period of 15 days and get the lease deed executed, otherwise the GNIDA would take action for cancellation of the allotment of plot in favour of the petitioner.
2. The State Legislature had enacted U.P. Industrial Area Development Act, 1976 (for short "the Act, 1976") to provide for constitution of an Authority for the development of certain areas in the State into industrial and urban township and for the matters connected therewith. Under Section 3 of the Act, 1976, the State Government is empowered to constitute Industrial Development Authority for the purposes of the Act, 1976 for any industrial development area. The GNIDA is an Authority constituted under the Act, 1976. Under Article 243-Q of the Constitution of India, such an authority, constituted under the Act, 1976 virtually replaces the municipality in the area so far as the industrial areas are concerned. All the functions of a development authority as well as municipal authority are required to be discharged by the GNIDA in the industrial areas for which it has been constituted.
3. Section 5A of the Act, 1976 provides that the State Government may at any time, by notification, create one or more 'Industrial Development Authorities Centralized Services' for such posts, as the State Government may deem fit, common to all the Industrial Development Authorities, and may prescribe the manner and conditions of recruitment to and the terms and conditions of service of persons appointed to such service. Functions of the Authority are prescribed under Section 6 of the Act, 1976, which provides that the object of the Authority is to secure the planned development of the industrial development areas. The Authority is empowered to acquire land in the industrial development area by agreement or through proceedings under the Land Acquisition Act, prepare a plan for the industrial development area, demarcate and develop sites for industrial, commercial and residential purposes according to the plan, provide infrastructure for industrial, commercial and residential purposes and to provide amenities. The Authority is also empowered to allocate and transfer either by way of sale or lease or otherwise plots of land for industrial, commercial and residential purposes or any other specific and specified purposes in such area.
4. Amenities have been defined under Section 2(a) of the Act, 1976, which includes roads, water supply, street lighting and power supply, sewerage, drainage, collection, treatment and disposal of industrial waste and town refuse and other community facilities services or conveniences as the Government may, by notification, specify to be an amenity for the purposes of the Act, 1976.
5. In the year 2011, GNIDA invited sealed tenders in two-bid systems in the prescribed application form for allotment of lease lands in various sectors in Greater NOIDA for a lease period of ninety years. The petitioner was successful in bidding process for Plot No. 2, Sector Ecotech-16. An allotment letter dated 31.03.2011 was issued to the petitioner for allotment of the said plot in its favour. The total area of the plot was 60000 (Sixty Thousands) square meters. The rate of land was fixed at 2,687=00 per square meter and total provisional premium, as per the rate, was Rs.16,12,20,000=00. 10% (Ten percent) of the total provisional premium was the allotment money. The allotment money was payable by 30.05.2011 along with registration money, which was Rs.77,36,185=00. Remaining 90% (Ninety Percent) amount with interest @ 12% per annum would be payable in twenty half yearly installments.1st four half yearly installments would be for interest payable on 90% remaining amount @ 12% and thereafter 16 half yearly installments would be charged with premium and interest @ 12% per annum. It was also provided in the allotment letter that in case of default of payment, penal interest @ 14% would be charged. In the allotment letter, it was also provided that the allottee would comply all the terms & conditions pertaining to supply of water and drainage/sewerage facilities provided by the authority.
6. Pursuant to the said allotment letter, leased deed dated 21.06.2011 was executed between the petitioner and the GNIDA with respect to the Plot No. 2, Sector Ecotech-16, GNIDA, Greater NOIDA, Gautam Budh Nagar for 58271 square meters for the total premium of Rs.15,65,74,177=00.
7. Out of the said premium, the petitioner paid 10% i.e. 1,56,57,418=00 and the balance amount of Rs. 14,09,16,759=00 became payable in 10 installments along with interest @ 12% per annum, compounded half yearly. The petitioner was also required to pay lease rent of Rs. 4,30,57,899=00 i.e. 27.5% of the total premium as one time lease rent payment.
8. The possession letter dated 24.06.2011 was issued to the petitioner after the petitioner paid 10% of the total premium i.e. Rs. 1,56,57,418=00-, as mentioned above. The lay-out plan for the project was sanctioned on 15.10.2012. The petitioner completed construction of manufacturing unit and obtained completion certificate dated 19.02.2014.
9. It is alleged that the petitioner could not start its manufacturing activities of precast due to non-availability of water. There was no proper road or drainage system, which made it impossible for the petitioner to start commercial production of precast. It is also stated that the petitioner could not start commercial production of precast due to agitations of farmers for non-payment of compensation by the State of Uttar Pradesh and due to pendency of court case pertaining to major portion of land situated in the aforesaid plot. It is also stated that the petitioner wrote several letters to the GNIDA, informing them obstructions created by the villagers and for maintaining law and order. The petitioner requested for security and maintenance of law and order conducive for the manufacturing and commercial activities of the petitioner.
10. The Full Bench of this Court in its judgment in Gajraj and others Vs. State of U.P. and others (2011) ADJ 1 (FB) though upheld the land acquisition notification, but held that invocation of urgency clause was bad in law. However, instead of quashing notification inasmuch as widespread development had taken place on the acquired land, in order to balance equities, the High Court directed for payment of additional compensation of 64.7% to the tenure holders, whose land was acquired, and allowed them retention of 10% of developed land. The GNIDA was directed to pay the additional compensation to the farmers and, it was left open to the discretion of GNIDA to take a decision upon shifting the proportionate burden of additional compensation upon the allottees.
11. The petitioner was not provided water connection for production of precast by the Authority, nor the petitioner got permission to dig bore-well to extract ground water needed for production of precast. The petitioner did not pay any amount after payment of 10% allotment money and, therefore, the Authority vide demand letter dated 19.08.2016 directed the petitioner to deposit Rs.17,96,39,097/- against the land premium and Rs. 2,83,51,710/- against lease rent. Another demand letter was issued on 24.08.2016 for Rs.17,12,86,068.72/- against the land premium and for Rs.2,83,51,710/- against the lease rent.
12. It is further stated that the petitioner had made several requests to the GNIDA to provide water connection for production of precast, however, the Authority did not take notice of the request and another demand letter dated 01.02.2017 was issued, claiming an amount of Rs. 19,23,86,569/- towards land premium and Rs. 2,92,11,357/- against the lease rent. It is further stated that the petitioner was forced to buy STP water from NOIDA and private STP units for production of precast. The cost of water being brought from the STP on tankers was not economically and commercially viable for the precast unit. It is further stated that the petitioner sought no objection certificate form the Authority for extracting ground water so that the petitioner could approach the Central Ground Water Authority for permission to extract ground water for commercial production for precast. The Authority had issued further demand letters, directing the petitioner to deposit the land premium, lease rent as well as Rs.5,63,86,898/- for additional compensation to be paid to the farmers by the GNIDA in pursuance of the direction issued by the High Court.
13. The State Government issued guidelines dated 13.07.2020, allowing industrial plot owners of more than 2.5 acres of land to sub-lease their land with certain conditions. Some area was to be taken back by the by the Authority as buy-back scheme.
14. The petitioner vide letter dated 01.09.2020 proposed the Authority to allow them to sub-lease 4 acres of land out of 15 acres land allotted to them. Out of 4 acres of land, 2 acres land was to be bought back by the GNIDA and that sum was to be immediately deposited/adjusted by the Authority against the land dues. The petitioner also requested for remaining dues to be rescheduled into 6 monthly installments. The petitioner made requested for rescheduling and restructuring the land dues and also payment of interest as per bank rate. However, when no action was taken on any petitioner's representations by the GNIDA, the petitioner approached the Revisional Authority under Section 41(3) of the U.P. Urban Planning and Development Act read with Section 12 of the Industrial Planning and Development Act.
15. The Revisional Authority, however, vide impugned order dated 25.11.2020 held that the petitioner had started production with effect from August, 2013 and, it has been using recycled water with effect from 30.06.2015. The petitioner had made default in making payment of the premium and other dues and, therefore, there was no ground to interfere with the demand notice and cancellation notice issued by the Authority. It is further stated that the Authority issued the impugned demand letter dated 06.01.2021 to which the petitioner had given detailed reply on 16.01.2021. However, the Authority had not considered the reply of the petitioner and issued impugned notice/cancellation letter dated 29.09.2021 as the petitioner did not pay dues of premium of Rs. 52,08,24,999/-, lease rent of Rs. 8,09,26,063 and additional compensation of Rs. 5,99,97,884/-.
16. Heard Mr. Sri Anil Tewari, learned Senior Advocate, assisted by Mr. Abhishek Khare, representing the petitioner, Mr. Sanjay Mishra, learned Additional Chief Standing Counsel, representing respondents-State and Sri Prashant Kumar, learned counsel representing respondent no. 2.
17. On behalf of the petitioner, learned Senior Advocate has submitted that the main function of GNIDA is to secure the planned development of industrial areas, demarcate and develop sites for industrial purposes. It is the duty of the GNIDA to provide requisite infrastructure for industrial purposes and provide amenities as defined under the Act, 1976. Under Article 243-Q of the Constitution of India, the Authority constituted under the Act, 1971 virtually replaces the municipality in the area so far as industrial areas are concerned. All the functions of development authority as well as municipal authority are to be discharged by the GNIDA which include providing water, drainage and road etc. etc. to the industrial units. The facts would disclose that the Authority had failed to provide 'amenities', making it impossible for the petitioner to utilize its full potential and become economically and commercially viable unit. The Revisional Authority did not take into consideration the failure of the Authority to provide amenities, including water connection, drainage and road etc. and, without considering the facts and circumstances in a proper perspective, in a mechanical manner, has passed the impugned order.
18. On behalf of the petitioner, Mr. Anil Tewari, learned Senior Advocate has further submitted that the petitioner has been charged for water connection, but the water connection for unit was not given and the petitioner was forced by the Authority to bring water by tankers to make the unit functional. It has also been submitted that the petitioner is not required to pay the additional compensation in view of judgments of this Court dated 18.09.2019 passed in Writ-C No.18684 of 2019 (M/s Gaursons Promoters Private Limited Vs. State of U.P. and others) and dated 28.05.2020 passed in Writ-C No.28968 of 2018 (M/s Shakuntala Educational and Welfare Society Vs State of U.P. and others). It has been further submitted that rate of interest should be charged on simple rate, as per SBI MCLR rate and, not on compounding basis. The learned Senior Advocate has placed reliance on the order of the Supreme Court passed in Writ Petition (C) No.940 of 2017 (Bikram Chatterji & others Vs. Union of India and others) and submitted that only simple rate of interest should be charged by the Authority.
19. On behalf of the petitioner, Mr. Anil Tewari, learned Senior Advocate, has further submitted that the Authority should be directed to provide water connection. The petitioner is ready and willing to pay the amount for laying down pipelines etc. for providing water connection by the Authority so that the unit becomes economically viable. It has been further submitted that in light of the judgment in the case of Bikram Chatterji & others Vs. Union of India and others (supra), the authority must work out rate of interest and recalculate the charges.
20. In view of the aforesaid, it has been submitted that the cancellation notice as well as the order passed by the Revisional Authority are liable to be set-aside and a direction be issued to the Authority to revise the demand in light of the observations contained in the order passed in Bikram Chatterji & others Vs. Union of India and others (supra) and the petitioner should not be forced to pay the additional compensation till the Supreme Court decides the pending issue.
21. On other hand, Mr. Prashant Kumar, learned counsel for the GNIDA, and Mr. Sanjay Mishra, learned Additional Chief Standing Counsel, representing respondents-State, have submitted that total liability is of Rs.67,78,23,456/- in respect of the Industrial Plot No. 2, Sector Ecotech-16, GNIDA, ad-measuring 58271 square meters allotted to the petitioner by the GNIDA. It has been further submitted that the allotment letter contains the map of the allotted plot, terms & conditions for allotment as well as payment schedule. After accepting the allotment letter and executing the sale-deed, the petitioner cannot come before this Court for amendment of the contract/lease deed entered into between the petitioner and the GNIDA. The petitioner was given physical possession on 24.06.2011. The building plan got approved on 15.10.2012 for manufacturing of concrete-precast. The petitioner, after completing construction of the industrial unit, started commercial production in August, 2013, but did not make payment as per schedule and, in fact no payment has been made till date despite the unit had started commercial production in the year 2013 itself. It has been further submitted that the petitioner's unit is fully operational.
22. The amenities would not mean providing of raw-material for commercial unit working within the development area under the Authority. Water is one of the raw-materials for production of concrete-precast. There is no obligation on the part of the Authority to provide water, which is used as a raw-material. It has been further submitted that the petitioner has created a smoke screen to hide its failure to make payment of dues and, there is no substance in the writ petition, which is liable to be dismissed.
22. Mr. Prashant Kumar, learned counsel representing the Authority, has further submitted that the GNIDA provides water to industrial unit by following three modes:-
i. via tanker wherein the respondent no. 2 Authority provides the recycled water from the STPs and supply them to the industries at the cost of the industries itself;
ii. laying pipeline the respondent authority under a Memorandum of Understanding with the industrial unit lay pipeline of the recycled water; and
iii. connection of recycled water the respondent no.2 after taking a requisite fee provide connection of recycled water from already laid pipeline in the vicinity.
However, the Authority did not have power to grant permission for digging bore-well for use of water commercially. It is the Central Ground Water Authority, which is empowered to grant approval for extraction of ground water for commercial use. The Authority has already provided all the amenities, as it is required to provide and, there is no substance in the submissions made by Mr. Anil Tewari, learned Senior Advocate, on behalf of the petitioner that the amenities were not provided to the petitioner. The Authority had already provided the amenities like water, drainage, waste management, however, providing of water for commercial use does not come within the purview of the amenities.
23. The Central Government, in compliance of the judgment dated 10.12.1996 passed by the Supreme Court in Civil Writ Petition No.4677 of 1985 (MC Mehta Vs. Union of India) had constituted the Central Government Ground Water Authority in exercise of power under Section 5 of the Environment (Protection) Act, 1986 with a special purpose to regulate and control development and management of ground water resources in the country. It is the Central Government Ground Water Authority, which is empowered to grant no objection certificate for extraction of ground water and the GNIDA has no power or authority to grant 'no objection certificate'.It has been further submitted that the grievances of the petitioner is wholly untenable and the petitioner, who has failed to make payment of its dues which as of today stands to Rs.67,78,23,456/-. The petitioner is not entitled for any relief from this Court as the petitioner has violated the terms and conditions.
24. It has been further submitted that the reliance placed by the petitioners on judgment/order passed by the Supreme Court in Bikram Chatterji & others Vs. Union of India and others (supra) is not applicable to the facts of this case. There is no question of clearance inasmuch the petitioner was given possession on due date of the land and the petitioner started its commercial production in August, 2013 and, therefore, the petitioner cannot latch on the orders passed by the Supreme Court in the aforesaid two cases.
25. I have considered the submissions made by the learned counsel for the parties.
26. Industrial development authorities are creation of the Statute with specific purpose. The main work of the Authority is to facilitate industrial and commercial activities within its area and, for that purpose to provide infrastructure i.e. land, road, electricity, water and drainage etc. The purpose of Authority is not profiteering, but to see the industrial and economic growth by providing congenial environment and infrastructure so that industrial and commercial activities are carried out within its area for overall economic growth of the area and the State.
27. It is admitted in the counter affidavit, as stated above, that the Authority provides water connection for commercial use by three modes, mentioned above. In view thereof, Mr. Prashant Kumar, learned counsel for the GNIDA, has submitted that if the petitioner is ready to bear the cost and burden for laying down pipelines etc, the Authority would provide water from STP through pipeline, provided the petitioner should come to the office of the Authority and make a request and settle the dues.
28. In view of the aforesaid submissions, I direct the petitioner to make deposit of Rs.1 Crore (Rupees One Crore) within 15 days from today with the Authority and the Authority shall provide the cost etc. for laying down pipelines for providing water through STP for commercial use at the prevailing rates.
29. So far as the question of additional compensation of Rs. 5 Crore is concerned, a Coordinate Bench at Allahabad vide judgment and order dated 18.09.2019 passed in Writ-C No.18684 of 2019 and connected Writ-C No.17643 of 2019 quashed the demand of additional compensation of Rs.1,769/- per square meter for Group Housing Yojana, as was fixed by the Board of Authority on 31.05.2019, and remitted the matter back to the Authority for taking decision afresh, strictly in light of the observations made in the judgment. Operative portion of the judgment dated 18.09.2019 passed in the said writ petitions is quoted herein below:-
"Another aspect which would merit consideration is the apportionment of compensation amongst allottees. As contended by the petitioners here the loading of additional compensation must necessarily have a nexus and correlation to the area of land allotted and the additional compensation cost created in respect of that area by the Authority. This submission clearly appears to be sound for the adoption of any other method may lead to a charge of discrimination amongst allottees that do not constitute the same class. It would essentially result in the creation of liabilities having no nexus or correlation to the actual liability of additional compensation ultimately borne by the Authority in respect of the allotted piece of land. The computation of additional compensation would depend upon a host of variables such as the situation of the plot, its area, the number of individuals whose holdings were acquired in connection therewith and the amount of additional compensation ultimately paid. There can be no computation of proportionate liability without these factors being taken into account and consideration. In the absence of any explanation or justification offered by the Authority, the Court finds itself unable to sustain the creation of the liability against the petitioner as embodied in the impugned order on this score also.
The Court also bears in mind that the creation of liability does not affect the petitioners alone. It would also impact the interests of numerous individual allottees of the proposed Group Housing Scheme. Their interests cannot be ignored bearing in mind the harsh economic realities of the housing sector. The Authority would be well advised to bear all the aforesaid aspects in mind before proceeding to compute the liability to be borne by the petitioners.
Accordingly and for the reasons aforenoted the instant writ petition is allowed. The impugned order dated 2 July 2019 is hereby quashed. The matter is remitted to the Authority for taking a decision afresh strictly in accordance with the observations made hereinabove. Since the completion certificate has already been granted to the petitioner pursuant to the interim directions issued and in view of the result of the instant petition, the same is made absolute. The issue of refund of moneys already deposited by the petitioner towards additional compensation shall be open to be raised dependent upon the fresh decision that the Authority shall now take in light of the directions issued."
30. A Division Bench of this Court in Writ-C No.28968 of 2018 (M/s Shakuntala Educational and Welfare Society Vs State of U.P. and others) and other connected matters vide judgment and order dated 28.05.2020 had quashed the Resolution of Board of the Yamuna Expressway Industrial Development Authority dated 15.09.2014 and the Government Order dated 29.08.2014 for recovering additional payment of compensation from the allottees. It has been held that the lease-deed is required to be registered both under the provisions of the Transfer of Properties Act and the Registration Act. The amount of premium or the sale consideration, mentioned therein, is not liable to any change otherwise than by execution of another registered instrument. It has also been held that the Full Bench decision in Gajraj and others Vs. State of U.P. and others (2011) ADJ 1 (FB), which was approved by the Supreme Court in the case of Savitrai Devi and others Vs. State (2015) 7 SCC 21, is not judgment in rem and same could not be applied to proceedings for acquiring the land under different notifications. It was also held by this Court that issuance of Government Order dated 29.08.2014 and its acceptance by the by the Yamuna Express Industrial Development Authority is patently illegal and it was violative of provisions of the Land Acquisition Act and even otherwise without jurisdiction. The concluding part of the judgment is quoted herein below:-
(i) The decision in the case of Gajraj as approved by Savitri Devi is not a judgement in rem which could have been applied to proceedings for acquiring the land under different notifications or for Y.E.I.D.A.;
(ii) the issuance of the Government Order dated 29.08.2014 and its acceptance by Y.E.I.D.A. is patently illegal. It is violative of the provisions of the L.A. Act and is otherwise without jurisdiction as no such Government Order is liable to be issued in equity by the Government and that the policy behind it is unfair, unreasonable and arbitrary which is in violation of the provisions of the T.P. Act; and
(iii) the aforesaid Government Order dated 29.08.2014 as such is held to be invalid and liable to be ignored. Consequentially, all actions and demands of the Y.E.I.D.A. based upon it are held to be illegal.
In view of above facts and circumstances, the impugned Government Order dated 29.08.2014 is declared to be illegal and without jurisdiction and consequently all demands raised on its basis are quashed."
31. The said judgment has been challenged in the Supreme Court, which is pending for final disposal. In view thereof, since the demand of additional compensation has been decided by the Division Bench of this Court, the same should not be enforeced against the petitioner till disposal of Petition for Special Leave to Appeal (C) Nos.10015-10034 of 2020 pending before the Supreme Court. In case the Supreme Court allows the said Special Leave Petitions, the petitioner would be liable to pay the additional compe
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nsation. 32. The 3rd issue, which requires consideration by this Court, is the rate of interest and penal rate of interest. As mentioned above, the purpose of Authority is not profiteering, but to provide infrastructure facilities/amenities for industrial and economic growth and commercial activities in the area under its control. Besides interest @ 12% per annum on premium compounding penal interest @ 14% would make an industry unviable. It could not be the purpose of Authority to allow industries to be set up and then make same unviable. The Supreme Court in the case of Bikram Chatterji & others Vs. Union of India and others (supra) has directed the Authority for charging the interest at bank rate on the outstanding amount from Amraprali Group of Housing Company. In this case, as noted above, interest is 12% per annum on premium on six monthly basis and in default, the penal interest is to be charged @ 14% per annum. Such a high rate of penal interest besides the interest @ 12% per annum on premium is surely enough to bleed the industry and make it unviable. 33. In my view, the State Government must consider to revise rate of interest to make it compatible with the bank interest with 2% more and penal interest should also not exceed more then 6%. In view thereof, the present writ petition is allowed. The impugned order dated 25.11.2020, impugned demand letter dated 06.01.2021 and impugned letter of cancellation dated 29.09.2021, copies of which are contained in Annexure Nos. 1, 2 and 3 to the petition, are quashed. The matter is remitted back with following directions:- I. The petitioner will deposit Rs. 1 Crore with the Authority within 15 days from today and make the payment for laying down the pipeline from STP to its unit for making supply of STP water for its industrial unit at the applicable rate. The Authority should lay down the pipeline after receiving the cost and provide the water to the industrial unit so that its cost of manufacturing of concrete precast gets reduced and industrial unit becomes viable. II. So far as levy of penal interest is concerned, the matter is remitted back to the Revisional Authority i.e. State Government to reduce it to 6% per annum instead of 14% per annum on default of payment of premium and allow the petitioner to pay the premium along with interest (12% + 6%, total 18% per annum simple interest) in installments, may be spread over to 5-7 years. III. So far as payment of additional premium is concerned, it should be deferred till decision of the Supreme Court in Special Leave to Appeal (C) Nos.10015-10034 of 2020. The petitioner should furnish an undertaking to the effect that it will abide by the decision of the Supreme Court and, in case the Supreme Court allows the said SLPs, it shall make the payment of additional compensation without any demur. IV. Revisional Authority is directed to pass a fresh order within a period of one month after affording an opportunity of hearing to the petitioner.