State cannot cancel industrial allotments for non-occupation resulting from forced migration and displacement.

The petitioner, a sole proprietorship owned by Sh. K. L. Ambardar, was a registered small-scale industrial unit situated in Srinagar

Following the mass migration of Kashmiri Pandits in 1989, the proprietor abandoned the unit (Shed No. 5) for safety

In 1991, the shed was damaged by fire

Subsequently, the State re-allotted Shed No. 5 to Respondent No. 6

The petitioner successfully challenged this in OWP No. 488/1996, where the Court directed the State to either allot a similar shed or restore Shed No. 5

In purported compliance, the State offered two sheds at Rangret but demanded a premium and significantly higher rent (Rs. 2,625 per shed vs. the original Rs. 150)

While contempt proceedings were pending regarding these terms, the respondents cancelled the allotment on 06.04.2004, alleging the petitioner was uninterested

The petitioner then filed the present writ seeking to quash the cancellation and restore the original premises

Whether the State’s action in cancelling the allotment of alternate sheds via the order dated 06.04.2004 was arbitrary and violative of the principles of natural justice

Whether the State, as a protector of migrant property, was justified in imposing new financial burdens (premium and higher rent) for alternate allotments necessitated by its own unauthorized re-allotment of the petitioner’s original site

Whether the petitioner is entitled to equitable relief regarding the possession and rental terms of industrial sheds

The Court applied the Principles of Natural Justice, specifically the requirement of a fair hearing before prejudicing a vested claim

It emphasized the State's solemn obligation and fiduciary duty to protect and preserve the property of displaced persons/migrants during periods of mass migration and turmoil

The Court also relied on the Doctrine of Equity, holding that the State must act as a "protector" rather than a "predator" of the property of its citizens, ensuring that administrative actions are fair, equitable, and do not exploit the misery of the vulnerable

The Court observed that the official respondents acted with gross unfairness by exploiting the petitioner's forced migration

It characterized the State's "compliance" with the previous court order as a "mirage" and "eyewash," noting that the respondents treated the petitioner as a new allottee by demanding premiums and high rent instead of restoring the original lease terms

The Court reasoned that the petitioner could not have been expected to resume industrial activity in Kashmir during a period when personal safety was not secured

Consequently, the cancellation of the Rangret sheds while the petitioner was contesting the unfair terms was held to be a perversion of justice

The Court concluded that the State failed in its duty to protect the property of a Kashmiri migrant and instead subjected the petitioner to inequitable treatment

The Court held that if the specific sheds were unavailable, new ones must be provided without charging any premium

Regarding financial terms, the Court ordered that the rent be charged at the prevalent rate but applied only prospectively from the date the petitioner takes possession, explicitly prohibiting the respondents from demanding any arrears for the intervening period

The impugned cancellation was effectively set aside through these restorative directions