| Headnote |
Industrial Development – Industrial land – Appeals fromjudgment passed by the High Court whereby the Writ Petition filedby Respondent No.1 was allowed – As a corollary, the decision bythe Cabinet Committee of the State of Rajasthan, and resultinginstructions issued to the Rajasthan State Industrial Developmentand Investment Corporation Ltd. (“RIICO”) to cancel a series ofpermissions and approvals granted/awarded to Respondent No.1in respect of industrial land in Kota, Rajasthan, were set aside –Whether the Large-Scale Industrial Area (LIA), Kota has been alwaysunder the management and control of the State Government or itwas transferred to RIICO pursuant to Government Order dated18.09.1979 – Whether the 1979 Rules of RIICO are statutory innature – Whether failure to observe Principles of Natural Justiceby the State Government vitiated its decision to annul the permissions/approvals granted by RIICO in favour of Respondent No.1 –Whether the State Government could have exercised its powers underArticle 138 of the AoA of RIICO to direct cancellation – Whetherthe Rules of Business were not followed – Does the Doctrine ofLegitimate Expectations and Promissory Estoppel apply in favourof Respondent No. 1 – Whether the Appellant Unions are entitled torelief – Held: There was an uninterrupted and subsisting relationshipof lessor and lessee between the State Government and either JKSLor Respondent No. 1, in the context of LIA, Kota – From the firstlease deed executed in 1967, till date, the State Government hasmaintained the position of lessor – The lease with JKSL, and allleases thereafter with JKSL and/or Respondent No. 1, have beensigned under the 1959 Rules – The terms of the lease are clearly incompliance with the 1959 Rules – The land in LIA, Kota was nevertransferred to RIICO under the Government Order dated 18.09.1979– The State Government has always maintained title and ownershipof the area – The land was also never allotted to RIICO on a leasehold basis under Rule 11A of the 1959 Rules – Thus, RIICOwas never expressly given any leasehold rights, and had no authorityto further sub-lease the land, along with other correspondingpowers, under Rule 12 of the 1959 Rules – In any case, Rule 11A ofthe 1959 Rules is of no importance, as there had to be an expressallotment of the land to RIICO on a leasehold basis after the cominginto force of Rules 11A and 12 – No such express allocation wasever made in favour of RIICO – The 1979 Rules are not statutory innature – The reference to the 1979 Rules in Rule 12 of the 1959Rules, does not accord any statutory recognition to the former –There was no violation of the Principles of Natural Justice in thiscase – The entire basis for granting permission for conversion ofthe land, and subdivision of the plots, was on an incorrect assumptionof power by RIICO under the 1979 Rules, to act as the lessor ofLIA, Kota – RIICO was never given any leasehold rights over theland – When the basis for a benefit received by a party is itselfinvalid, there is no question of giving the party a chance to beheard – The State Government was competent to issue directionsunder Art.138 of the AoA of RIICO, to cancel the supplementarylease deeds and attendant permissions – This fell squarely withinthe ambit of Art.138 of the Articles of Association – There was noviolation of the Rajasthan Rules of Business as the sub-committeewhich recommended the cancellation of the permissions /approvalsto Respondent No.1, was acting for and on behalf of the entireCouncil of Ministers – Hence, the Rules of Business were compliedwith – There was no legitimate expectation nor promissory estoppelthat could operate to the benefit of Respondent No. 1, as, onceagain, no such defences could be raised on the back of RIICO’sown erroneous utilization of powers that vest only with the rightfullessor of LIA, Kota, which is the State Government – Further, publicinterest overrides both these doctrines, and cannot come to the aidof a private party, when the larger interests of society are involved– The supplementary leases signed between Respondent No.1 andRIICO are unsustainable – RIICO did not possess the authority toenter into these agreements, as the land in LIA, Kota remained underthe ownership and control of the State Government uninterruptedlyfrom the first lease signed with JKSL, till the present date –Respondent No.1 was also cognizant of this fact as evinced by itentering into the 7 transfer lease deeds with the Collector, Kota, in 2007, after it stepped into the shoes of JKSL – The leases withJKSL were executed under the 1959 Rules which remained applicableand there was no authority ever vested in RIICO to have issued thepermissions for conversion and sub-division of plots in the LIA,Kota, and for signing the supplementary lease deeds withRespondent No.1 – There is no legal infirmity in the action of theAppellants in setting aside the decisions taken by RIICO or indirecting to cancel the supplementary leases of 2018 – Hence, thecancellation of the supplementary deeds and quashing of theapprovals for conversion of land and sub-division of plots is upheld– This shall, however, not preclude Respondent No.1 from reapproachingthe State Government and seeking conversion of theusage of land and attendant approvals under the 1959 Rules – TheState Government shall be at liberty to consider such a proposal inpublic interest and in accordance with the 1959 Rules – With regardto the Appellant Unions, it would be open for them to seek theirremedies under law from the Appropriate Government, and judicialforums – Rajasthan Land Revenue Act, 1956 – s.100 – RajasthanIndustrial Areas Allotment Rules, 1959 – rr.11A and 12 – RIICODisposal of Land Rules, 1979 – rr.20A, 20B and 20C – Constitutionof India – Art.166 – Sick Industrial Companies (Special Provisions)Act, 1985 – s.18.Company Law – Distinction between companies that arebrought into being “by” an Act, and those created “under” an Act– Held: A company incorporated under the Companies Act is not acreation of the said Act but it has come into existence in accordancewith the provisions of the Companies Act.Rules and Regulations – Statutory rules – The status of“statutory rules” cannot be accorded to regulations that are broughtinto existence under the Articles of a non-statutory company.Doctrines / Principles – Principle of natural justice – Stepstaken which are themselves vitiated, cannot form the basis forprinciples of natural justice to be applied.Doctrines / Principles – Promissory estoppel – Superveningpublic interest acts as a veto against the invocation of promissoryestoppel. |
