M.P. Industrial Development Corporation Ltd. vs M/S Shri Ramraja Industries Plto Thr.

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IN THE HIGH COURT OF MADHYA PRADESH
AT GWALIOR

BEFORE
HON'BLE SHRI JUSTICE MILIND RAMESH PHADKE
th
ON THE 28 OF JULY, 2026
WRIT PETITION No. 1771 of 2021
THE COMPETENT AUTHORITY-CUM-EXECUTIVE DIRECTOR M.P.
INDUSTRIAL DEVELOPMENT CORPORATION LTD.
Versus
M/S SHRI RAMRAJA INDUSTRIES PLTO THR. AND OTHERS
Appearance:
Shri Raghvendra Dixit - Advocate for the petitioner.
Shri Dinesh Kumar Agrawal - Advocate for the respondent [R-1].
ORDER
The petitioner has filed the present writ petition under Article 226 of the
Constitution of India challenging the order dated 28.11.2020 passed by the
Commissioner, Chambal Division, Morena, whereby the appeal preferred by
respondent No.1 was allowed and the eviction order dated 09.09.2020 passed by
the Competent Authority under the M.P. Lok Parisar (Bedhakli) Adhiniyam, 1974
was set aside.
In brief, the facts of the case are that the petitioner is a State instrumentality
entrusted with the allotment and management of industrial plots in industrial areas
in accordance with the statutory framework governing such allotments. The rights
and obligations relating to industrial land, including execution and transfer of
lease deeds, transfer of assets, and handing over of possession, are governed by
the M.P. Rajya Audhyogik Bhumi Evam Bhawan Prabandhan Niyam, 2015.
Industrial plots bearing Nos. 110-B and 111 measuring 13,104.08 sq. metres and
Plot No. 110-A measuring 4,368.02 sq. metres situated at Malanpur, District
Signature Not Verified
Signed by: YOGENDRA
OJHA
Signing time: 7/29/2026
10:42:41 AM

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Bhind, were allotted in favour of respondent No.2 in the years 1992 and 1996

respectively. Lease deeds and an amended lease deed were executed in favour of
respondent No.2. For establishment of its industrial unit, respondent No.2
obtained financial assistance from the State Bank of India and assigned its
leasehold rights in favour of the Bank as security. Upon default in repayment of
the loan, the Bank took possession of the assets situated on the leased land and
conducted an auction. Respondent No.1 purchased only the industrial assets
standing on the land through the auction sale on 11.03.2014. According to the
petitioner, the auction did not result in transfer of the leasehold rights over the
land, which continued to remain vested in the petitioner until transferred in
accordance with the statutory rules. After the auction, the petitioner repeatedly
called upon respondent No.1 through communications dated 11.12.2014,
19.02.2015 and 17.04.2015 to complete the formalities for transfer of the lease in
accordance with Rules 18, 19 and 23 of the Niyam, 2015. Since respondent No.1
failed to submit the requisite application and documents, a show-cause notice
dated 04.08.2015 was issued. As no satisfactory response was received, the lease
granted in favour of respondent No.2 was cancelled by order dated 10.05.2016.
The cancellation order was challenged before the Managing Director, M.P.
TRIFAC Bhopal. By order dated 10.10.2016, the appellate authority directed
respondent No.1, being the auction purchaser, to submit an application for transfer
of the lease within one month. The petitioner was directed to recalculate the dues
and issue a fresh demand notice, while respondent No.1 was required to clear the
outstanding dues, upon which the petitioner was to execute a lease deed in its
favour. The appellate authority further directed that if respondent No.1 failed to
submit the application or clear the dues, the cancellation of the lease would
automatically revive and the petitioner would be at liberty to proceed in
Signature Not Verified
Signed by: YOGENDRA
OJHA
Signing time: 7/29/2026
10:42:41 AM

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accordance with law. The petitioner thereafter issued several communications

dated 17.10.2016, 03.04.2017, 26.07.2018 and 02.11.2018 calling upon
respondent No.1 to initiate the process for transfer of the lease. According to the
petitioner, respondent No.1 neither submitted any application nor complied with
the conditions stipulated in the appellate order. Consequently, the cancellation of
the lease automatically revived. Despite repeated notices requiring respondent
No.1 to vacate the premises, possession was not handed over. The Executive
Director of the petitioner Corporation, being the Competent Authority notified
under Section 3 of the M.P. Lok Parisar (Bedhakli) Adhiniyam, 1974, initiated
proceedings under Section 4(1) of the Act on the ground that respondent No.1 was
in unauthorized occupation of the land. After issuance of notice and affording
opportunity of hearing, the Competent Authority passed an eviction order dated
09.09.2020 directing respondent No.1 to remove its unauthorized occupation.
Aggrieved by the eviction order, respondent No.1 preferred an appeal under
Section 9 of the Adhiniyam, 1974 before the Commissioner, Chambal Division,
Morena. Along with the appeal, respondent No.1 relied upon the sale certificate
issued by the State Bank of India, partnership documents, correspondence
exchanged with the petitioner and an interim order dated 30.11.2015 passed in
W.P. No.2265/2015. The appellate authority granted interim protection on
15.09.2020. The petitioner filed a detailed reply contending that respondent No.1
had purchased only the assets situated on the land, had failed to obtain transfer of
the lease in accordance with the statutory rules, had not complied with the order
dated 10.10.2016, and consequently had no legal title or authority to continue in
possession of the land. By the impugned order dated 28.11.2020, however, the
appellate authority allowed the appeal and set aside the eviction order.
Learned counsel for the petitioner submitted that the impugned order is
Signature Not Verified
Signed by: YOGENDRA
OJHA
Signing time: 7/29/2026
10:42:41 AM

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wholly unsustainable as it has been passed without considering the detailed reply

and counter affidavit filed by the petitioner before the appellate authority. It is
contended that the order merely records the submissions advanced on behalf of
respondent No.1 and neither reflects the appearance of the petitioner's counsel nor
deals with any of the factual or legal objections specifically raised by the
petitioner. The appellate authority, according to the petitioner, disposed of the
appeal in a cursory manner through a two-page order solely on the basis of the
interim order dated 30.11.2015 passed by this Court in W.P. No.2265/2015,
without examining the statutory provisions governing transfer of leasehold rights
or the legality of the eviction proceedings.
It is further submitted that respondent No.1 never acquired any right, title or
interest in the land merely because it purchased the industrial assets in the auction
conducted by the secured creditor. The auction sale was confined to the movable
and immovable assets standing on the land and did not operate as a transfer of the
leasehold rights, which could only be transferred in accordance with the
provisions of Rules 18, 19 and 23 of the Niyam, 2015.
Learned counsel contended that the lease granted in favour of respondent
No.2 stood cancelled on 10.05.2016. Although the appellate authority, by order
dated 10.10.2016, granted respondent No.1 an opportunity to regularize its
occupation by applying for transfer of the lease and clearing all outstanding dues,
respondent No.1 failed to comply with those mandatory conditions. In view of
such non-compliance, the cancellation of the lease automatically revived in terms
of the appellate order itself. Consequently, respondent No.1 had no subsisting title
or lawful authority to retain possession of the land.
It is argued that once the lease stood cancelled and respondent No.1 failed
Signature Not Verified
Signed by: YOGENDRA
OJHA
Signing time: 7/29/2026
10:42:41 AM

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to obtain transfer of the lease, its possession became unauthorized, thereby

justifying initiation of proceedings under the M.P. Lok Parisar (Bedhakli)
Adhiniyam, 1974. The Competent Authority followed the prescribed procedure,
afforded adequate opportunity to respondent No.1 and thereafter rightly passed the
eviction order dated 09.09.2020.
Learned counsel further submitted that the appellate authority committed a
serious error in relying upon the interim order dated 30.11.2015 passed in W.P.
No.2265/2015. The said writ petition pertained to recovery proceedings initiated
by the Commercial Tax Department and had no connection whatsoever with the
title or possession of the industrial land. The petitioner Corporation was not even a
party to those proceedings. Therefore, the interim protection granted therein could
not have been treated as a bar against proceedings initiated under the M.P. Lok
Parisar (Bedhakli) Adhiniyam, 1974.
It is lastly contended that had the appellate authority examined the
petitioner's detailed reply, the relevant statutory rules, the terms of the lease deed
and the effect of the order dated 10.10.2016, it could not have interfered with the
eviction order. The impugned order suffers from complete non-consideration of
relevant material, ignores the statutory scheme governing transfer of leasehold
rights, proceeds on irrelevant considerations, and is therefore arbitrary and
unsustainable in law. It is accordingly prayed that the impugned order dated
28.11.2020 be quashed and the eviction order dated 09.09.2020 be restored.
Per contra, learned counsel for the respondent No.1 submits that the present
writ petition filed by "the Competent Authority Cum Executive Director"
challenging the order dated 28.11.2020 passed by the Appellate Authority, the
Commissioner of Chambal Division, Morena, is fundamentally not maintainable.
The lower quasi-judicial adjudicating authority, whose original order dated
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Signed by: YOGENDRA
OJHA
Signing time: 7/29/2026
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09.09.2020 was set aside on appeal, cannot be considered an aggrieved party

under the law and is completely disentitled from challenging the reverse decision
of the higher Appellate Authority. In accordance with the binding principles laid
down by the Hon'ble Supreme Court in Mohd. Shahabuddin v. State of Bihar and
Mohtesham Mohd. Ismail v. Special Director, Enforcement Directorate and
Another [(2007) 8 SCC 254], a lower quasi-judicial officer who adjudicated a
dispute cannot institute a petition challenging the corrective order of the superior
appellate forum. Furthermore, the Madhya Pradesh Industrial Development
Corporation Limited, formerly known as Madhya Pradesh Infrastructure
Development Corporation, is an independent body corporate. If the corporate
entity itself intended to challenge the appellate order, it could only express such
will and intention through an explicit resolution passed by its Board of Directors.
The Petitioner, acting merely in the capacity of an Executive Director or
Competent Authority, cannot be equated with the corporate body itself, a principle
well-established by the Constitution Bench of the Hon'ble Supreme Court in
Narayan Das Indurkhiya v. State of M.P. [AIR 1974 SC 1232] . Without an
authorization resolution from the Board of Directors, the petition as framed and
filed by the individual authority is incompetent.
It is further submitted that the subject property comprising industrial land
admeasuring approximately 1,88,000 square feet, designated as Plot No. 110-111,
Industrial Area Malanpur, Tehsil Gohad, District Bhind, was originally leased on
16.07.1992 to M/s. Super Sack, a division of Midland Plastic Limited, for a period
of 92 years. The lessee subsequently assigned its leasehold rights to the State
Bank of India to secure financial advances with the consent of the Corporation.
Following default by the original lessee, the State Bank of India, acting as a
secured creditor, initiated recovery proceedings and auctioned the property under
Signature Not Verified
Signed by: YOGENDRA
OJHA
Signing time: 7/29/2026
10:42:41 AM

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Section 13 of the SARFAESI Act, 2002, read with the Security Interest

(Enforcement) Rules, 2002. Respondent No. 1 participated in the public auction,
paid the full consideration of Rs. 80,00,000/-, and was issued a formal Sale
Certificate on 11.03.2014, thereby taking lawful possession of the property. The
Sale Certificate explicitly records that the sale of the scheduled property was made
free from all encumbrances known to the secured creditor. Statutory mandates
under Sub-Rule (7) and Sub-Rule (10) of Rule 9 of the Security Interest
(Enforcement) Rules, 2002, dictate that an auction purchaser who buys property
sold free from encumbrances cannot be saddled with past liabilities incurred by
the predecessor-in-interest prior to the date of the Sale Certificate. Promptly after
acquiring the property, Respondent No. 1 applied on 07.11.2014 for the formal
transfer of leasehold rights. Instead of completing the administrative transfer, the
authorities illegally raised a demand of Rs. 18,51,907/-, later inflated to Rs.
27,62,897/-, seeking to recover past dues left unpaid by the defaulting prior entity,
M/s. Super Sack. Respondent No. 1 resisted this uncalled-for demand, asserting
that an auction purchaser in a "free from encumbrance" SARFAESI sale cannot be
made liable for past arrears of the original borrower, a principle affirmed in
decisions such as W.P. No. 5812/2013 (M/s Virendra Builders & Developers Pvt.
Ltd. v. State of M.P.).The subsequent actions of cancelling the lease on
10.05.2016 and initiating eviction proceedings were wholly arbitrary. The
summary order of eviction dated 09.09.2020 passed under Section 4 of the M.P.
Lok Parisar (Bedakhali) Adhiniyam, 1974, was issued in gross violation of
statutory procedure and the principles of natural justice. The underlying notice
dated 20.03.2020 was issued immediately prior to the nationwide COVID-19
lockdown, scheduling a hearing date of 24.03.2020 when no meaningful
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OJHA
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appearance was possible. Mandatory steps regarding notice publication under

Section 4(3) and mandatory procedure prescribed under Section 5 of the
Adhiniyam were skipped, running directly counter to the provisions of law as
highlighted in New India Assurance Company Ltd. v. Nusli Neville Wadia and
Another [(2008) 3 SCC 279].The Appellate Authority properly appreciated these
procedural defects, statutory violations, and jurisdictional errors, rightly setting
aside the eviction order by its order dated 28.11.2020. Respondent No. 1 has
consistently maintained its willingness to pay all legitimate statutory transfer fees
and lease charges accrued from the date of taking possession, i.e., 11.03.2014
onwards, however, the Respondent No. 1 can not be compelled to pay alleged
dues pertaining to M/s. Super Sack. In light of these facts and settled legal
principles, Respondent No. 1 prays that this Hon'ble Court may be pleased to
dismiss present petition.
At this juncture, learned counsel for the petitioner prays for time to amend
the cause title.
The prayer is not opposed by the learned counsel appearing for the
respondent No.1.
This Court, without entering into this technicality, deems it appropriate to
decide the matter.
Heard counsel for the parties and perused the record.
The jurisdiction exercised by the Competent Authority under the provisions
of the M.P. Lok Parisar (Bedakhali) Adhiniyam, 1974 is confined to eviction of
persons who are in "unauthorised occupation" of public premises. Section 2(g) of
the Adhiniyam defines "unauthorised occupation" to mean occupation of public
premises without authority or continuance in occupation after the authority under
which such occupation was permitted has expired or has been duly determined.
Signature Not Verified
Signed by: YOGENDRA
OJHA
Signing time: 7/29/2026
10:42:41 AM

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In the facts of the present case, respondent No.1 entered into possession

pursuant to a public auction conducted by the secured creditor under the
SARFAESI Act and was issued a sale certificate. Its possession, therefore, cannot
be equated with that of a rank trespasser or a person who has clandestinely
occupied the premises. The very foundation of respondent No.1's possession is
traceable to a statutory auction conducted by the secured creditor. Merely because
disputes subsequently arose regarding transfer of leasehold rights or liability to
pay earlier dues, respondent No.1 cannot be brought within the ambit of
"unauthorised occupation" as defined under Section 2(g) of the M.P. Lok Parisar
(Bedakhali) Adhiniyam, 1974.
The controversy between the parties substantially relates to transfer of
leasehold rights and determination of financial liabilities arising out of the auction
sale. Such issues cannot, by themselves, furnish a basis for invoking the summary
eviction mechanism contemplated under the Adhiniyam. The Competent
Authority proceeded on the assumption that non-transfer of lease automatically
rendered respondent No.1 an unauthorized occupant, without appreciating the
legal effect of the auction sale and the nature of possession acquired by respondent
No.1 through the secured creditor.
This Court also finds substance in the submission advanced on behalf of
respondent No.1 that the dispute regarding recovery of outstanding dues of the
previous lessee cannot be resolved by resorting to eviction proceedings under the
Adhiniyam. If the petitioner is entitled to recover any amount representing arrears
or liabilities attributable to the previous lessee, it shall be at liberty to recover the
same from the person legally liable therefor, including the secured creditor, if
permissible in law, or from any other person against whom such liability is legally
enforceable. However, respondent No.1, being an auction purchaser, cannot be
Signature Not Verified
Signed by: YOGENDRA
OJHA
Signing time: 7/29/2026
10:42:41 AM

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subjected to eviction proceedings solely on account of disputes relating to such

previous outstanding dues.
The Appellate Authority has rightly interfered with the order passed by the
Competent Authority. This Court does not find any perversity, jurisdictional error
or patent illegality in the impugned order warranting interference in exercise of
powers under Article 226 of the Constitution of India.
Accordingly, the writ petition, being devoid of merit, deserves to be and is
hereby dismissed. It is, however, observed that dismissal of the present petition
shall not preclude the petitioner from adopting such remedies as may be available
in law for recovery of any outstanding dues from the person or authority legally
liable to discharge the same.
No order as to costs.
(MILIND RAMESH PHADKE)
JUDGE
ojha

Signature Not Verified
Signed by: YOGENDRA
OJHA
Signing time: 7/29/2026
10:42:41 AM