Leasing allotted land to an LLP that includes the allottee does not create prohibited third-party rights.

MIDC allotted an industrial plot at Kurkumbh to Petitioner No. 1’s father in 1998.

Following the deaths of his father and mother, the plot was transferred to Petitioner No. 1 in 2011.

After MIDC moved to resume possession for non-development, Petitioner No. 1 challenged that action; the Bombay High Court dismissed his earlier writ petition, but the Supreme Court subsequently directed MIDC to raise a demand at its current allotment rate and afford him an opportunity to establish an industry, subject to the original and any further conditions and a prohibition on creating third-party rights.

Petitioner No. 1 paid the demand, and MIDC handed over possession in May 2017, but did not execute a lease agreement.

He sought execution in favour of Petitioner No. 2, an LLP of which he and his wife were the partners.

MIDC rejected that request, citing the Supreme Court’s order, and raised further demands; those demands were later paid, leaving the request for execution of the lease and extension of the development timeline for decision.

1. Whether the Supreme Court’s order barred MIDC from executing the lease in favour of Petitioner No. 2, an LLP in which Petitioner No. 1 was a partner.

2. Whether the four-year period for completing development should run from the date possession was handed over or from execution of the lease agreement.

Article 226 of the Constitution empowers the High Court to issue appropriate writs, including mandamus, to address unlawful administrative action.

The Court considered the Maharashtra Industrial Development Corporation Disposal of Land Regulations, 1975, including Form C, as providing for a development timeline while permitting MIDC to consider extensions on their merits.

It also applied the terms of the Supreme Court’s order dated 16 November 2016: Petitioner No. 1 was to comply with the applicable conditions, receive an opportunity to establish an industry, and create no third-party rights.

The judgment identifies no further statutory provision or precedent as governing the issues.

The Court read the Supreme Court’s order as protecting the opportunity granted to Petitioner No. 1 to establish an industry and preventing the creation of third-party rights—not as requiring the lease to be in his individual name.

Because Petitioner No. 1 was a partner in the LLP and had undertaken, with his wife, to maintain the LLP’s composition without MIDC’s prior approval for changes, the Court found no legal impediment to leasing the plot to the LLP.

On the timeline, MIDC did not identify a regulatory provision making the four-year period run from possession, and the Court found the regulations permitted consideration of extensions.

Given MIDC’s delay in executing the agreement and the time spent contesting the LLP request, the Court directed that the four-year development period run from execution of the agreement.

It further directed that the four-year development period commence from execution of the agreement, or another prospective date specified in it; any later extension request would be considered by MIDC on its merits.

The parties could treat the 95-year lease term as running from the 2017 handover of possession.