Industrial land allotment may be cancelled for prolonged non-use and unauthorised non-industrial use.

The petitioner was allotted Plot No. 38 (Part), measuring 16,335 sq. ft., by BIADA under Memo No. 900 dated 16 July 2008 on a 90-year lease for establishing an ice slab and ice cream manufacturing unit.

The petitioner claimed that the unit had been established and was operational, though its functioning was seasonal, and relied on a DIC inspection dated 16 September 2022 and a 2010 bank loan secured against the unit’s machinery and stock.

BIADA alleged that the unit had ceased functioning before the COVID-19 pandemic, that the premises were being used for residential purposes and for shops allegedly let out on rent, and that the machinery was not in working condition.

BIADA cancelled the allotment by Memo No. 106 dated 14 September 2022. The petitioner’s statutory appeal, Appeal Case No. 241 of 2022, was dismissed by the Principal Secretary on 2 December 2022, communicated through Memo No. 5743 dated 13 December 2022.

Whether BIADA’s cancellation of the petitioner’s industrial plot allotment was arbitrary, legally unsustainable or violative of the principles of natural justice?

Whether the petitioner was entitled to parity with similarly situated allottees who had been permitted to revive their units by undertaking to commence commercial production within a stipulated period?

Whether the appellate order dismissing the petitioner’s appeal warranted interference under Article 226 of the Constitution?

The Court applied the limited scope of judicial review under Article 226 of the Constitution, under which interference is warranted where an administrative decision is illegal, arbitrary, procedurally unfair or otherwise suffers from a jurisdictional infirmity.

The Court also considered the equality principle under Article 14, holding in substance that similarly situated persons can claim comparable treatment only where the factual circumstances are genuinely alike.

The Court relied upon Umesh Servicing Station v. State of Bihar & Ors., CWJC No. 6883 of 2020, but held that the relief in that case was fact-specific and conditional upon an undertaking to commence production within 60 days and make the unit fully operational within six months; it therefore did not establish an automatic or blanket right in favour of the petitioner.

The Court found that BIADA’s decision was supported by material showing prolonged non-functioning of the unit, alleged misuse of the premises for residential purposes and shops, non-working machinery and outstanding dues.

The petitioner’s reliance on the inspection dated 16 September 2022 did not displace the earlier inspection dated 25 August 2022 because the subsequent inspection was stated to have occurred after cancellation and therefore did not establish that the unit was functioning when the cancellation decision was made.

The plea that the closure resulted from the seasonal nature of the business and the COVID-19 pandemic was rejected because BIADA had issued notices concerning the unit’s non-functioning and violations well before the pandemic, including in 2014 and 2019.

The Court further held that the petitioner had been given sufficient opportunity to revive the unit and clear the dues, including through the notice dated 8 March 2022; consequently, the allegation of breach of natural justice was not made out.

The Court distinguished Umesh Servicing Station because that case involved a specific undertaking and conditions for revival, whereas the petitioner’s case involved additional violations and a materially different factual background.

The petitioner was not entitled to parity with the allottees in Umesh Servicing Station, as that decision was distinguishable on facts and did not confer any automatic right of revival.

The writ petition was therefore dismissed as devoid of merit, and any pending interlocutory applications were disposed of.