Order Ruma Pal J

8/9/2019 Order Ruma Pal J

1/51


2/512

Chapter 3 of the Act. In that application it was stated that the

company required the land belonging to it for its own use to carry

on its activities including expansion. This first application was

replaced by a fresh application on 27th September, 1976. In the

supplementary application it is stated by the Company that unless

the company was allowed to retain the land owned or held by it,

the working of the company would be seriously prejudiced and

hampered and in the absence of such land it would virtually

become impossible on the part of the company to carry out itsindustrial activities.

In the statement of particulars submitted together with the

application under section 20 (1) (a) of the Act, the total area of

the land was mentioned as 13,97,273 square meters. It may be

noted that as against the entry “total area of agricultural land

including horticulture as per finally published Record of Rights”,

the company had filled in ‘Nil’. The area of land occupied by

buildings was stated as 3,12,677 Sq. meters occupied by 752

buildings of divers natures which were used in carrying out

manufacturing activities.

On 14th December, 1984 an order was passed by the

Government of West Bengal in which it was stated that having

regard to the location of the land, the purpose for which the land

was proposed to be used and other relevant factors it was

expedient in the public interest to exempt 11,62,329.77 square

meters under section 20(1)(a) from the provisions of Chapter 3 of

the Act subject to the following conditions:


3/513

"(i) The company shall not use the excess vacant land held

by it for any purpose other than that mentioned in itsapplication for exemption under section 20(1)(a) of the Urban

Land (Ceiling and Regulation) Act, 1976 and purposesincidental or ancillary thereto.

(ii) It shall not, without the formal sanction of the State

Government transfer the land described in the Schedulebelow by way of sale, gift, mortgage other than mortgage

without possession in favor of banking or other financial

institutions referred to in section 19 of the Urban Land(Ceiling and Regulation) Act, 1976 for raising loan for the

purpose of Industry lease or otherwise.

(iii) Transfer of the land as described in Schedule below or

any part thereof, to the banking and financial institutions

referred to in item no. 2 above, shall not be made by thecompany unless a notice as is given to and permission in

writing obtained from the State Government.

(iv) On breach of any of the terms and conditions specified

above, in respect of lands, the exemption granted under this

order shall be liable to be withdrawn in pursuance of theprovisions of the subsection (2) of Section 20 of the Act.

(v) The company shall not be entitled, in case of

withdrawal of this order of exemption under sub-section (2) of

section 20 of the Urban Land (Ceiling and Regulation) Act,

1976, to receive any compensation in respect of any buildingor structure constructed or erected or any improvement

effected on such excess vacant land. It shall be permitted, if it

so desires, to remove within such time as may be specified bythe Government such building, erection or improvement at its

own expense, without prejudice to the rights, titles or interestwhich any other person or any financial institution may have

in the said building erections etc.

(vi) The factory should undertake such measures as are

necessary to prevent environmental pollution.

(vii) The actual utilization and requirement of lands by thecompany will be reviewed after expiry of a period of two years


4/514

from the date of issue of this order and if any area of lands

remains unutilized after the said period, the StateGovernment will be competent to withdraw the exemption in

respect of such lands."

The order noted that the company held vacant land

measuring 12,13,545.11 square meters which was in excess of

the ceiling limit referred to in Clause (a) sub-section a of Section

4 of the Act. The break up of 12,13,545.11 square meters was as

follows:-

(1) Land measuring 11,62,329.77 square meters in Mouza Fort

Gloster, Chakmadhu, Rameswar Nagar, Buri Khal and

Khaskhamar, P.S. Bauria, Dist - Howrah.

(2) Land measuring 39,155.70 square meters in Mouza Fort

Gloster and Chakmadhu, P.S. Bauria, District-Howrah.

(3) Land measuring 12,059.64 square meters in Mouza

Raghudebbati, P.S. Sakrail.

Of the total vacant land of 12,13,545.11 square meters, only

the land referred to as item No.1 was exempted. The order also

recorded that a separate order in respect of 39,155.70 square

meters and 12,059.64 square meters had been issued by

department order No.3642 UL dated 14.12.84.

The order dated 14.12.84 recorded that the prayer of the

company for exemption in so far as it related 39,155.70 square


5/515

meters and 12,059.64 square meters i.e. items 2 and 3 had been

rejected.

By letter dated 15th January, 1985 the company stated that

as far as the two areas of land for which exemption had been

rejected were required for the company's manufacturing

activities. In particular it was stated that the 12,059 square

meters was required for a Railway siding. The letters stated that

the company was working out the details of the use in respect ofboth the areas of land and that the same would be submitted

within a short time. The petitioners accordingly re-submitted an

application on 2.5.85 for reconsideration of the grant of

exemption in respect of the plots of land in respect of which the

exemption has been rejected. It was pointed out that one plot

was a tank which is used by the workers both for bathing and as a

water reservoir, another plot or land "had almost been merged

with the adjoining canal" which was vital for the company, a third

plot consisted of three temples where pujas ware ordered and

functions were held and a plots which ran parallel to the boundary

wall of the mill required as a "safety belt". As regards the 12,059

square meters it was stated that the entire land was required for

the Railway siding and for the purpose of loading and unloading of

goods for transportation.

On 28.5.85 a draft statement was prepared under Section 8

of the Act. That draft statement recorded that the petitioner

company owned or possessed a total area of 6,68,561.61 square

meters of which the ceiling area applicable was 6,16,739.24

square meters. The extent of vacant land which the petitioner was


6/516

not permitted to hold was 51,822.37 square meters. The

51,822.37 square meters which were required to be surrendered

comprising of the two areas covering 39,155.70 square meters

and 12,059.64 square meters.

On 26th June, 1985 the petitioners submitted an objection

to the draft statement dated 28.5.85. In that objection the points

raised in the letter dated 2nd May, 1985 were substantially

reproduced.

The petitioner filed a writ application which was disposed of

on 20th May 1986 quashing the proceedings under Section 9 of

the Act and directing the competent authority to consider the

petitioner's application dated 2.5.85 according to law and to

dispose of the same by passing a speaking order.

A hearing was accordingly held on 4.11.86 in respect of the

petitioner's application dated 2.5.85. According to the

respondents, the petitioners stated that out of 39,156.70 square

meters referred to as item No.2 in Schedule A to the order of

exemption dated 14.12.84, 2,198.65 square meters had been

gifted to the Health Department of the Government for a hospital.

This left the actual area of excess land as 36,985.05 square

meters. Submissions were also made regarding the user and

classification of 12,059.64 square meters referred to as item No.3

in Schedule A to the order of exemption. It has been stated by the

respondents that the competent authorities for Uluberia and

Howrah Sadar were asked to submit their reports which they did.


7/517

According to the respondents at this stage complaints were

received by the respondents regarding the transfer of land by the

company in violation of the provisions of the Act.

It is stated by the petitioner that the petitioner was incurring

loss in its business. Presumably with a view to off set such loss,

on 24th March 1988 the company entered into an agreement with

Hooghly Mills Co. Ltd. by which the petitioner company agreed to

sell one of its two mills called "North Mill" to Hooghly Mills Co. Ltd.

(HMCL). The North Mill was described as containing an area of

95.7825 acres (4172285.7 Square ft.) and as including buildings,

structures, sheds, quarters, bungalows, Jetty and other erections

with all fixtures and fittings and plants and machinery. The

Agreement recorded that HMCL agreed to purchase the entire

industrial undertaking as a going concern free from all

encumbrances at a price of Rs. 2 Crores. The Agreement

provided that the Mill would be known as "Bowreah Jute Mill" from

the date of sale.

Certain Clauses of the agreement which have been relied

upon by the parties in support of their arguments are noted as

under:-

"1.(A) The vendor shall sell and the purchaser shallpurchase the said Industrial Undertaking with effect from

26th day of March, one thousand nine hundred and eighty-

eight hereinafter called "the date of sale" as a going concernand full benefit of industrial licenses, permits, entitlements,

tenancies including tenancy of Jute Corporation of India in

respect of the Carpet Backing Shed and all other rights andbenefits in connection with and appertaining to the said

Industrial Undertaking free from all encumbrances, charges,


8/518

attachments and lien whatsoever at the price of Rs.2.00

crores (Rupees two cores only).

(C) The amount of consideration agreed to be paid by thepurchaser to the vendor shall be apportioned amongst the

following heads:-

(Rs. in lacs)

(a) Land 5(b) Buildings, structures,

godowns, sheds and all

other constructions andproperties of immovable

nature at the said premises … 35

(c) Plant, machinery and

other moveables. 160

200===

(D) The sale and purchase of movable properties shall be

completed by manual delivery against the sale bills and thesale and purchase or the said land and the buildings,

structures, godowns, sheds and all other assets of

immovable nature at the said premises shall be completedby way of Deed of Conveyance to be executed by the vendor

in favor of the purchaser.

2. After signing of this Agreement, a. physical inventory will

be taken on the date of sale of:

(i) The assets comprised in the said industrial Undertaking

intended to be sold as aforesaid including fittings and

fixtures, patterns and tooling and spares andcomponents of plant and machinery will be taken and

jointly certified by the parties hereto.

(ii) Current assets including stores spares/ components, raw

materials and work in process which shall be bought bythe purchaser at market price to be mutually agreed

upon. Proceeds of Current Assets shall be deposited by

the vendor with the bank to whom the same are chargedfor release of the charge on such current assets and the


9/519

vendor shall produce the letter of release within 15 days

of this agreement.

“3. The entire price for purchase of the said industrialUndertaking shall be paid by the purchaser to the vendor on

signing of this agreement except Rs.1,00,000/- (Rupees one

lakh only) which shall be paid on completion of entire

formalities by the vendor and registration of conveyance ofthe land and building and the vendor shall deliver possession

of the said Undertaking to the Purchaser on the date of

Sale."

"9. The transfer of property in movable assets of the saidUndertaking shall take place with effect from the date ofsale. The sale of immovable property will be completed by

execution and registration of necessary deed of conveyance

for land and building which shall be executed and registeredwithin 12 months from the date hereof or such extended

time as may be mutually agreed but the same shall also be

effective from the date of sale. The vendor has representedthat there is no charge on the fixed assets except a letter of

undertaking to State Bank of India to create such charge.

The vendor shall obtain release of such undertaking within 3months from the date hereof.

10. The vendor shall obtain the following permissions,

sanctions, consents and certificates and shall send the same

to Khaitan & Co., Advocate 9, Old Post Office Street,

Calcutta-700001, as and when obtained but at least afortnight before the date of execution and registration of

conveyance:

(a) Necessary permissions from the Competent Authority

under the Urban Land (Ceiling & Regulation) Act, 1976 forexecution of conveyance of the entire freehold land also

buildings, structures, godowns, quarters and all other

constructions thereon or on part thereof.

13. (a) After possession of the said Industrial undertaking is

made over by the vendor to the purchaser:


10/5110

(i) The purchaser shall be entitled to run and operate the

said Industrial Undertaking on the basis of the strengthof the existing licenses, sanctions, consents and

permission held by the vendor for running the saidindustrial undertaking.

(ii) To bring in its plant and machinery and install them.

(iii) To bring in and store its own raw jute and other

materials.

(iv) To manufacture or caused to be manufactured finished

products.

(b) To sell the said finished products and realize the

proceeds thereof it being expressly agreed and understood

that all plant and machinery, raw jute and other materials,finished products, semi finished products and all other

assets and materials brought in by the purchaser shall

always remain the absolute property of the purchaser andthe vendor shall not have nor shall be entitled to claim any

right title or interest in respect thereof.

15. Upon the handing over of possession the purchaser may

erect a boundary wall or fencing by barbed wires separating

the said Industrial Undertaking from the vendor's other

properties at its own costs.

16. Notwithstanding anything herein contained afterexecution and registration of the conveyance/ conveyances

in favor of the purchaser, the vendor will neither have nor

claim any charge and/or lien as that of unpaid vendor andthat the purchaser will as and when on and from the date of

handing over possession shall be solely and absolutelyentitled to all rights in the said Industrial Undertaking as

sole and absolute owner thereof free from all encumbrances,

charges, liens, demands including unpaid vendor's chargeand after the execution and registration of the conveyance

the purchaser will be free to deal with or dispose off the

same In any manner the purchaser thinks fit without anylien or charge in any manner of the vendor or any other

person claiming through or under the vendor.


11/5111

18. All liabilities whatsoever arising for the period after thedate of sale shall be the responsibility of the Purchaser and

the Purchaser shall keep the vendor absolutely indemnifiedand harmless against payment of all such liabilities or any

part thereof and/or any proceeding, penalty, claim or

demand on account thereof.

26. a For the purpose of giving effect to these presents and

to enable the purchaser to run the said Industrial

Undertaking on its own account the vendor shall grant ageneral Power of Attorney in favor of the Purchaser.

32. Notwithstanding anything herein contained at any timebefore execution and registration of Deed of Conveyance the

said Industrial Undertaking or any part thereof is acquired or

requisitioned or affected by any notice of acquisition underany law for the time being in force by any Government or

semi-Government authorities or any other authority or the

said business or any part thereof is nationalised by theCentral Government or State Government of anybody set up

by the Government then this Agreement shall come to an

end without any right of action of either party against theother. However, it must be clear that in the event of

acquisition/nationalisation, the compensation for finished

products, plant and machinery, goodwill shall belong to the

purchaser and the vendor shall have no right over it.

36. The vendor shall on 26th March, 1988 deliver to thepurchaser vacant and peaceful possession of the said

Industrial Undertakings, all papers, registers and documents

relating to the working of the said Industrial Undertakingand all other records relating to the said Industrial

Undertaking PROVIDED HOWEVER the purchaser shall allowto the vendor the Inspection thereof and take copies of

extracts therefrom as may be reasonably required by the

Vendor. If any papers, registers, documents do not relateexclusively to the said business, the vendor hereby

acknowledges the right of the Purchaser to take inspection,

copies of extracts there from and the vendor undertakes tokeep the same safe and un-obliterated (damaged by fire or

any other act of God excepted).


12/5112

39. If the vendor is unable to obtain the permission of theCompetent Authority under the provisions of the Urban Land

(Ceiling & Regulation)Act 1976 to the sale of the entire landand building comprised in the said business prior to the date

of execution and registration of conveyance or mutually

extended period but obtains permission of the competent

Authority under the provisions of the Urban Land (Ceiling &Regulation) Act, 1976 for sale of the land and building other

than open land alleged to be excess vacant land and also

obtains all other consents, certificates, permissions andsanctions as aforesaid the vendor shall execute and register

conveyance of so much of land and building as permitted bythe Competent Authority to be sold to the purchaser. Theexcess vacant land will be in possession of the purchaser

with irrevocable right to receive and appropriate all

compensation that may be awarded in respect of suchremaining land alleged to be ‘excess vacant land’ PROVIDED

HOWEVER the vendor will continue till efforts to obtain

permission of the Competent Authority under the provisionof the Urban Land (Ceiling & Regulation) Act, 1976 for sale

of such remaining land to the Purchaser without any further

consideration and as and when such permission is obtainedthe vendor shall without any further consideration execute

and register the conveyance or conveyance in respect

thereof in favour of the purchaser or its nominee or

nominees. The vendor will at the time of completion of sale

execute an irrevocable General Power of Attorney in favour

of the Purchaser and its nominees authorising the Purchaserinter alia, to and enjoy the said remaining land and also to

apply for permission to hold and to retain land and to

receive, realise all compensation that may be awarded bythe Government in respect of the said remaining land

alleged to be excess vacant land and such other powers asMessrs Khaitan & Co., Advocates advise. The Power of

Attorney prepared by Khaitan & Co. shall be accepted by

both the parties.”

In answer to a letter dated 25/28th January, 1988 written by

the respondents, to the company for particulars of utilisation of

the land belonging to the company, the company wrote a letter


13/5113

dated 10th May, 1988 giving particulars and also requesting for

permission to create a mortgage in favour of the New Mill of the

company and stating:

"In connection with sale of one of our Jute Mills as above, we

hereby give you a notice and approach you to kindly allow asto sell 95.7825 acres of land comprising of factory buildings,

godowns, residential quarters of staff etc., i.e. the composite

Jute Mill known as North Mill to M/s. The Hooghly Mills Co.Ltd., out of the total land belonging to the company as per

details contained in Schedule-'B' annexed herewith.

Hope you will kindly consider our request favorably and

expedite your approval”.

The matter was placed before the Urban Land (Industrial and

Commercial views) Committee on 22nd March, 1988. The

committee recommended there review of the exemption granted

in respect of 11,62,329.77 square meters to the company and

also recommended rejection of the prayer in respect of 36,857.05

and 12,059.64 square meters since it was considered that the

company might not require this quantum of excess vacant land

for industrial purposes in the near future.

On 5th December, 1988 the Competent Authority and

S.D.O., Uluberia submitted a report stating that some plots of the

exempted land had been allotted by the petitioner against

consideration to various illegal occupiers and that the

classification of the lands in a few cases had been changed.

According to the respondents an inquiry was initiated in

connection with the review or the exemption order. The

Commerce and Industry Departments sent a report on 1.8.89


14/5114

after inspection. The report showed that the company had handed

over possession of an area of 4,17,000 square meters to M/s.

Hooghly Mills Co. Ltd. However, the officials of the Directorate or

Industries were, according to the respondents, refused entry

into the premises for inspection.

By a letter dated 8th February, 1989 the company was

directed by the Directorate of Industries to attend a meeting on

13.2.89 with regard to the exemption dated 14.12.84.

By a letter dated 31st March, 1989 the company wrote to

the Directorate of Industries stating that it had not sold any plot

of land or building after the Act had come into force. It was

pointed out that the agreement dated 24th March, 1988 to sell

one of company’s Jute Mills as a going concern HMCL was subject

to the approval of the concerned authorities. It was furtherstated that there were about 1116 licenses out of which

268 licenses were for shops "occupied at the places".

On 20th October, 1989 a show cause notice was issued by the

Land & Land Reforms Department, Urban Land Ceiling Branch to

the company with reference to the exemption of excess vacant

land measuring 11,62,329.77 Square meters.

It is necessary to set out the language of the show cause notice

as submissions have been made by the parties regarding the

scope of the same. The show cause notice reads as follows :-

“It has now come to the notice of this Govt. that you have

transferred/come into an agreement to sell 4,17,000 Sq.


15/5115

Mtrs. of land in the northern part of the Mill including the

labour line in favor of M/s. Hooghly Mills Co. Ltd. and thisentire land has been handed over to the said Co. without

any prior permission from this Dept. It has also beenreported that you have transferred some vacant land

including excess vacant land of Mouza- Fort Gloster,

Chakmadhu etc. P.S Bauria, Dist - Howrah. Besides the

classification of the lands held by your company, is alsoreported to have been changed, without any permission,

from the appropriate Authority. All these acts are in

contravention of the terms and conditions of the said Govt.Order relating to exemption.

I am directed to request you to explain why the exemptionsorder No.3637-I.L. dt. 14.12.84 should not be withdrawnU/s 20(2) of the Urban Land (Ceiling and Regulation) Act,

1976. If you intend to make any representation against this

proposed order of withdrawal, you may appear before theDeputy Secretary of this Deptt. in his chamber at 12-B,

Russel Street, Calcutta-71 with all your papers and

documents for a hearing on this issue on 7th November,1989 at 11-30 A.M."

On 7th November, 1989 the company's Secretary appeared

before the Deputy Secretary for hearing. According to the

respondents the company's Secretary had submitted that the

company had got Rs.2 crores from HMCL and that possession had

been handed over on 26th March, 1988. It is also alleged by the

respondents that the company's representative while admitting

that there were unauthorized encroachers on the land did not

admit any change of classification and wanted time to state why

the company cannot utilize the excess vacant land. The

respondents further alleged that the company’s representative

was given time “to give all his points" in writing by 29.11.89.

According to the petitioner at the hearing it was pointed out by

the company's representative that though money had been

received from HMCL no transfer of the land had been made and


16/51


17/5117

24th May 1990 the company wrote to the Assistant Secretary,

Land and Land Reforms Department stating that the Secretary of

the company who had been dealing with the matter was out of

Calcutta and praying for an adjournment. The letter was not

received by the Deputy Secretary before whom the final hearing

had been fixed as the letter was addressed to the Assistant

Secretary of the Land and Land Reforms Department. Accordingly

the Deputy Secretary decided the matter on 24.5.90 in the

absence of the company.

By an order dated 19th June, 1990, in exercise of the power

conferred under sub-section 2 of Section 20 of the Act the

Government withdrew the exemption order dated 14.12.84. The

reasons for the withdrawal which have been set out in the order

dated 19.6.90 are basically two fold:-

(1) that the company had without formal sanction of the State

Governments transferred the land which was exempted in

violation of the conditions of exemption and;

(2) that the excess vacant land had been allowed to be

encroached upon by outsiders.

It was accordingly held that the conditions subject to which

the exemption had been granted not having been complied with

by the company it was expedient in the public interest to

withdraw the exemption. This is the first order impugned in these

proceedings.


18/5118

By an order dated 20th June, 199O the respondents

intimated the company that the company's contention that land

measuring 2,198.65 square meters had been gifted to the Health

Department was accepted but rejected the petitioner's application

in so far as it related to, the balance 36985.05 square meters and

12,059.64 square meters being items (2) and (3) to Schedule A of

the Exemption Order dated 14.12.84.

This order also recorded that the decision had been arrived

at after taking into consideration all the aspects involved and the

company's application it was stated that the excess vacant lands

were not required by the company for any useful industrial

activities in the near future and it was not a fit case in which

exemption under Section 20(1) (a) of the Act should be granted.

This is the second order which is impugned in these proceedings.

On 12th September, 1990 the company moved a second

application under Article 226 for an order restraining the

concerned Revenue Officer, Government or West Bengal, from

changing the Record of Rights by inserting in place and instead of

the company the names of 52 other persons in respect of diverse

lands. An ad interim order of status quo as regards the possession

of the land was passed. This writ application is still pending.

According to the petitioners between 1981 and 1990 nine other

suits had been filed against the "the concerned parties" for illegal

construction and / or possession of the company's land before the

Learned Munsiff, Uluberia. The suits are still pending. No

particulars of the suits however have been given.


19/5119

On 13th March, 1991 notice was issued under Section 8 sub-

Section 3 of the Act enclosing a draft statement to the company.

This draft statement is the third subject matter of challenge in the

writ petition.

In this background of the facts the petitioners moved this

writ application. The petitioners contentions have been made

separately in respect of the orders dated 19.6.90, 20.6.90 and the

draft statement dated 13.3.91.

As far as the order dated 19.6.90 is concerned the petitioner

has contended:

(1) There had been no violation of any of the conditions in

the Exemption Order dated 14.12.84. By merely entering into the

agreement and handing over the possession of the North Mill to

HVCL no transfer of exempted land had taken place. It is

submitted that the word 'transfer' should be understood in the

meaning given under the Transfer of Property Act. Reliance has

been placed on the decision of D.K.Sen J. (as his Lordship then

was) in Taherbhoy Feeda Ally -vs- State of West Bengal & Ors

reported in AIR 1977 Cal 351 and the decision of the supreme

Court in the case of Kumari Sonia Bhatia – vs - State of U.P.

reported in AIR 1991 SC 1274 in this connection.

(2) The word "otherwise" in Clause 2 of the conditions in

the Exemption Order dated 14.12.84 was required to be

construed ejusdem generis. Reliance has been placed on two

decisions of the Supreme Court in this connection George D'Costa


20/5120

-vs- Controller of Estate Duty, Mysore, AIR 1967 SC 849 and M.

Narayana Nambiar -vs- State of Kerala, AIR 1963 SC 1116

(3) The exemption was granted keeping in view the

purpose for which the land was being proposed to be used. M/s.

Hooghly Mills Co. Ltd was using the exempted land for industrial

purposes and thus for the very purpose for which the exemption

had been granted. There was as such no violation of the Act or

the conditions of the Exemption order.

(4) One of the grounds given for withdrawal of exemption

was that the company had allowed excess vacant land to be

encroached upon. This did not form part of the show cause notice

nor had any allegation been made against the company at any

stage in this respect. The impugned order was therefore passed in

violation of the principles of natural justice. In any event it is

alleged that the petitioner had not allowed any encroachment.

There were either licensed shops which was in existence prior to

14.12.84 of encroachers against whom the company had already

filed Title Suits.

(5) In withdrawing the exemption the location and purpose

for which the land was being used nor any other relevant factor

including public interest had been gone into.

(6) There had been no change in the classification of the

land. In fact, the petitioner had filed the second writ petition to

restrain the Revenue Officer from incorporating the name of

persons other than the company in respect of the exempted land.


21/5121

As far as the order dated 20.6.90 is concerned the petitioner

had contended;

(1) That the order was passed without hearing the

petitioner.

(2) No reason had been disclosed for rejecting the

petitioner's application for exemption.

(3) The grounds as contained in the application dated

2.5.85 had not been considered.

(4) The order had been passed without taking into

consideration of the object of the Act nor the fact that the

company was using the land for industrial purposes. The

assumption that the company would be unable to utilize the land

was without verification and was wrong.

(5) Under Section 23 excess land acquired by the suit

would only be utilized for the purposes specified under' that

section. The company in fact was already intending to utilize it for

the purposes covered by Section 23. Therefore no advantage

could be gained by the State Authority in acquiring the land.

(6) The order was passed on a non consideration of the

evidence produced and in fact of no evidence whatsoever.

As far as the draft statement dated 13.3.91 is concerned it is

stated that the statement was discrepant. Land on which the

factory buildings, tanks etc. were located had been treated as


22/5122

vacant land. The land surrendered to the Government had been

included as vacant land.

The draft statement had been prepared on the basis of

the statement made in 1956 ignoring the subsequent

developments.

The first draft statement dated 28.5.85 had not been

cancelled and the respondents could not therefor issue the seconddraft statement during the pendency of the first.

(1) The respondents have contended that the petitioner

had in fact transferred the North Mill to HMCL in violation of the

conditions of the Exemption Order. It is stated that the word

'transfer' should be understood in & sense wider than the word

used in the Transfer of Property Act. It is contended that the

definition of Transfer of Property Act was confined to the

provisions of that Act, Reference has been made to the object and

various sections in the Act in question in this case to show that

the word 'transfer’ should be used in a wider sense.

(2) It is contended that the word 'otherwise' in the

condition of the exemption order had to be construed ejusdem,

generis. It is argued that the words proceeding word 'otherwise'

namely, "sale", "mortgage", "gift", "lease" did not belong to the

same genus, and therefore the rule of ejusdem generis did not

apply. It is further submitted that the rule of ejusdem generis

should be strictly applied and that general or comprehensive


23/5123

words should be understood in their natural meaning. Reliance

has been placed on Rajasthan SEB-Vs- Mohanlal & Ors reported in

AIR 1967 SC1857, para 4, page – 1862; Raja Bhanu Pratap Singh

AIR 1966 SC 245, para 4, page 246 and State of Bombay -vs- Ali

Gulshan reported in AIR 1955 SC 810 para 8 page 812.

(3) Even if the word "transfer" were understood in the

sense used in the Transfer of Property Act, the company having

been granted exemption on the basis of its representation that itrequired the exempted land for its own use for particular

purposes, and the basis for the exemption no longer being

subsisting the exemption order could not stand.

(4) It is submitted that the company had in fact finally

parted with the possession of the North Mill to H.MCL and that it

was a sale to all intents and purposes. The following clauses in

the agreement for sale have been relied upon in support of this

contention:

"(i) The undertaking is to be sold for two crores on

26th March, 1988 which is to be the date of sale.

(Clause I(A))It is to be noted that the date of sale is just two

days after the date of agreement.

(ii) The name of the mills is to be changed to ‘Bauria

Jute Mill’ from the date of sale.

(Clause 1(B))

(iii) The entire price of Rs.2,00,00,000 except

Rs.1,00,000 to be paid on signing of the agreement

and possession of undertaking to be delivered to thepurchaser “on the date of sale".


24/5124

(Clause I)

(iv) After delivery of possession the purchaser shall

be entitled to run and operate the industrialundertaking to bringing its own plant and machinery

and install them.

(Claus 13(A) (i) (ii))

(v) Upon delivery of possession the purchaser may

erect a boundary wall etc. "separating the said

properties undertaking from the vendors otherproperties at its own cost,"

(Clause 14)

vi) The purchaser, on and from the date of handing

over possession shall be solely and absolutely

entitled to all rights in the said industrialundertaking as sole and absolute owner thereof free

from all encumbrances, charges, liens, demands

including unpaid vendors charge .......(Clause 16)

(vii) All liabilities whatsoever arising after the date ofsale to be the responsibility of the purchaser and the

purchaser to keep the vendor absolutely indemnified

and harmless against payment of such liabilities.

(Clause 18)

(Viii) The vendor to grant a general power of attorneyto the purchaser

(Clause 26.1)

ix) Vendor to deliver vacant and peaceful possessionof the industrial undertaking and all papers registers

documents and records relating thereto.(Clause 36)

(x) The excess vacant land will be in possession of thepurchaser with irrevocable right to receive and

appropriate all compensation chat may be

awarded in respect of such remaining landalleged to be excess vacant land provided

however the vendor will continue till efforts to


25/5125

obtain permission of the Authority under the

provisions of the Urban Land (Ceiling & Regulation)Act, 1976 for sale such remaining land to the

purchaser without any further consideration and asand when such permission is obtained the

vendor shall without any further consideration

execute and register the conveyance or

conveyances in respect thereof in favor thepurchaser or its nominee or nominees.

(Clause 39)

(5) It is stated that the petitioner had circumvented the

provisions of Section 20 (1) (a) of the Act deliberately. It is

therefore submitted that the Court in exercise of its jurisdiction

under Article 226 should not assist the writ petitioner in such

circumvention. Reference has been made to the decision in

Mohammed Swalleh -vs- 3rd Additional District Judge, Meerut

(AIR 1988 SC 94); Gadde Venkateswara Rao -Vs- Govt. of Andhra

Pradesh (AIR 1966 SC 828).

(6) It is stated that there had been no violation of natural

justice as in the show cause notice the petitioner had been asked

to show cause-against the transfer of other lands as well. The

existence of encroachment had been admitted. Reference has

been made to the letter dated 31.3.89 contending that the

company had clearly stated-that portion of the land was occupied

by licensees.

(7) The respondents have also contended that the

company Secretary had asked for time to file written submissions

but had not done so. Further opportunity was granted to the

company on 24.5.90, The company deliberately chose to pray for

an adjournment by addressing the letter to the Assistant


26/5126

Secretary instead of the Deputy Secretary who had issued the

notice and before whom the hearing was to be held.

As far as the order dated 20.6.90 is concerned the

respondents have denied the company's case on fact. The

company had furnished no particulars of the two pieces of land

referred to in items 2 and 3 Schedule 'A' to the order of

exemption although the company had undertaken to furnish the

details. It was further stated that temples/tanks and cannels were

not industrial purposes for which the company could be permitted

to retain any land. The claim that the 9 bighas of land was

necessary for Railway siding was vague and not acceptable.

The petitioner's submissions relating to in Section 23 of the

Act have been countered by the respondents by stating that the

power of the Government to allot excess vacant land was entirelydiscretional. It may allot or may not allot the land for such,

purposes as it may deem fit. The company could not usurp the

authority of the Government to make such allotment or to

override the power by seating that the company was in any event

using the land for the purpose envisaged under Section 23.

As far as the draft statement was concerned it is stated by

the respondents that upon withdrawal of the exemption the

excess vacant land was land held by the company beyond the

ceiling limit. For the purposes of determining the exact amount of

such excess land proceedings had to be taken in the manner

prescribed under the Act. Accordingly the draft statement had

been issued and objections had been called for to such draft


27/5127

statement from the company before issuing a final statement

under section 9 of the Act.

Order dated 19.6.90

The reasons for withdrawing the exemption are stated as

follows : -

"3. And whereas one of: the conditions governing

exemption was that it shall not, without the formal sanction

of the State Govt. transfer the land described in theschedule below by way of sale, gift, mortgage and another

condition was that actual utilisation and requirement of land

by the company would be reviewed after expiry of a periodof two years from the date of issue of the said order. It was

also stated therein that on breach of any of the stipulated

terms and conditions, as aforesaid and also in this order forexemption, the exemption granted shall be liable to be

withdrawn u/s 20(2) of the said Act;

4. And whereas at the time of enquiry for review or the

Utilization and requirements of the exempted excess vacant

land the state Govt. officials have been refused entry into

the premises and it has been found that the Co. has

transferred vacant lands through different means including

through an Agreement dt. 24.3.88 between this Co. on theone part and Hooghly Mills Company Ltd. of the other part,

without any permission from the State Govt. in

contravention of the provisions of the Urban Land (C&R)Act, 1976.

5. And whereas during enquiry it has further transpiredthat such excess vacant land has been allowed to be

encroached upon by outsiders.

6. And whereas the Governor is satisfied that the

conditions subject to which the aforesaid exemption was

granted have not been complied with by M/s. Fort Gloster

Industries Ltd and it is expedient in the public interest towithdraw the said exemption;


28/5128

7. And whereas a reasonable opportunity was given to thecompany for making a representation against the proposed

withdrawal of exemption and the company was heard on7.11.89 but failed to submit any representation in writing

even after sufficient time was given.

Therefore the grounds are three fold:-

(1) The transfer of exempted land without formal sanction of the

Government.

(2) Actual utilization and requirement of land by the Company

after 2 years from the exemption order.

(3) The allowing of encroachers on the land by outsiders.

The first condition said to be violated is condition (ii) to the

exemption order. This has already been set out earlier in this

judgment. However for convenience it is quoted again.

“(ii) It shall not, without the formal sanction of the State

Government transfer the land described in the Schedule

below by way of sale, gift, mortgage other than mortgage

without possession in favour of banking or other financial

institutions referred to in section 19 of the Urban Land

(Ceiling and Regulation) Act, 1976 for raising loan for thepurpose of Industry lease or otherwise.”

The question is what does the word “transfer” in this clause

mean ?

In my view the word 'transfer' covers a transaction such as

the one entered into between the company and HMCL.

The language of condition (ii) refers to transfer by way of

sale, gift, mortgage, lease or otherwise. The Dictionary meaning

of "otherwise" is in other ways; differently" (See 'That Shorter

Oxford English Dictionary). Literally read therefore condition (ii)


29/5129

envisages transfers in ways different from sale, gift, mortgage or

lease. If the petitioners contention that 'or otherwise' must mean

a sale or a conveyance of title the words would become a mere

surplusage and "Courts should lean against such a construction as

far as possible" (See State of Bombay vs. All Gulshan: AIR (1955)

SC 810, 812).

The petitioners contention that the rule of "ejusdem generis"

is applicable viz. that the plain meaning of the words 'or

otherwise' should be cut-down or limited by the preceding words,

is unacceptable.

The cases relied upon by the respondents are authorities for

the principle that to invoke the application of the ejuadem generis

rule there must be a distinct genus or category. In other words

where a general word follows particular and specific words of thesame nature, the general word takes its meaning from the specific

words. Therefore unless the specific words preceding the general

word partake of the same character or genus the meaning of the

general word will not be limited or 'affected by the meaning of the

specific words. In Rajasthan SEB (Supra) the Supreme Court had

to consider the phrase 'other authority occurring in Article 12 of

the Constitution.

In Raja Bhanu Pratap Singh (Supra) the phrase under

consideration was any other person in S.10 (2) (n) of the

Administration of Evacuee Property Act, 1950. That Section

provided for the power of the Custodian to pay funds to the

evacuee or to any member of his family or to any other person as


30/5130

in the opinion of the Custodian is entitled thereto. The Supreme

Court held that the rule of ejusdem generis did not apply so as to

restrict the phrase any other person to members of the evacuee's

family.

In the third case cited by the respondents in this context

viz., State of Bombay vs. All Gulshan (Supra) the Supreme Court

was construing Section 6(4) (a) of the Bombay Land Requisition

Act, 1948 which authorised the State Government to requisitionpremises “for the purpose of a state or any other public purpose”

The court held that the latter phrase was not to be read ejusdem

generis with the first. It was held:

“the rule (viz. ejusdem generis)" must be confined withinnarrow limits, and general or comprehensive words should

receive their full and natural meaning unless they are

clearly restrictive in their intendment, it is requisite thatthere must be a distinct genus, which must comprise more

than one species, before the rule can be applied..."

In this case the words preceding the words or otherwise do

not belong to the same genus. A sale affects title, whereas

Mortgage and lease do not. Therefore the rule or ejusdem generis

cannot be applied in this case.

The decision in George Da Costa vs. Controller of estate

Duty Mysore (Supra) relied upon by the petitioners in this context

is not an authority for the proposition that the word 'otherwise'

must invariably be considered ejusdem generis with the word

preceding as contended by the petitioners. In that case the


31/5131

Supreme Court was considering Section 10 of the Estate Duty Act

1953 which provided

"Property taken under any gift whenever made, shall be

deemed to pass on the donor's death to the extent that

bona fide possession and enjoyment of it was not

immediately assumed by the donee and thenceforwardretained to the entire exclusion of the donor or of any

benefit to him by contract or otherwise."

The Supreme Court in the context of that section held that

the word 'otherwise' should be considered ejusdem generis. No

general principle of law was enunciated as contended by the

petitioner.

The second case relied upon by the petitioner in this context

namely M. Narayanan vs. State of Kerala (Supra), also does not

support the contention that the word otherwise must be read

ejusdem generis in all cases. In that decision the Supreme Court

was considered Section 5 (1) (d) of the Prevention of Corruption

Act 1947. The Section sought to be construed read:

"5. (1) A public servant is said to commit the offence of

criminal misconduct in the discharge of his duty."

** ** ** **

(d) if he, by corrupt or illegal means or by otherwise

abusing his position as public servant, obtains for himself or

for any other person any valuable thing or pecuniaryadvantage."

The Supreme Court considered the preamble of the Act, the

long title, the context in which the Act was passed and the


32/5132

mischief that was intended to be dealt with. The public servant

had been found guilty of making false entries in the records to

benefit his brother-in-law by assigning the land to his brother-in-

law at an under estimate. It had been contended by the public

servant that Clause 5(1)(d) should be construed to cover only

those cases of direct benefit obtained by a public servant for

himself or for any other person from a third party in the manner

described therein and did not cover a case of wrongful loss to the

government by abuse of his power. Negativing this contentionthe court held that the phraseology of the section was very

comprehensive. The Supreme Court held:

"The word 'otherwise' has wide connotation and if no

limitation is placed on it the word ‘corrupt’, ‘illegal’ and ‘otherwise’ mentioned in the clause become surplusage, for

on that construction every abuse of position is gathered by

the clause. So some limitation will have to be put on thatword and that limitation is that it takes colour from the

preceding words along with which it appears in the clause,

that is to say, something savoring of dishonest act on his

part."

There is no indication in the Act that the Authorities intended

to use the phrase or otherwise in a restricted sense viz. limited to

only transfers of title. The context of the whole scheme of the Act

certainly does not require such a restricted meaning to be given

to the phrase. The object and context of the Act is to delimit the

holding of land and not necessarily only the ownership of land.

That the Act is delimit at the holding of land in excess of the

ceiling limit is apparent from the "root provision" of the Act -

Section 3 - which provides as follows :-


33/51


34/5134

Similarly the other conditions in the exemption order would

also indicate that the purpose of the exemption order was toenable the company itself to utilize the exempted land for the

purposes stated in its application for exemption. The intention

behind the conditions was to prohibit any transaction which

would result in the non-utilisation of the land by the company

for the stated purpose. On this basis also therefore it must be

held that the word transfer would in the context cover a

transaction of the nature entered into between the company and

HMCL.

The case of Taherbhoy Feeda Ally (Supra) undoubtedly

seems to support the contention of the petitioners that the word

'transfer' should be read in the restrictive sense of change of

ownership only. But in my view that case is distinguishable fromthe case being considered by me.

In Taharbhoy Feeda Ally, an agreement had been entered

into to sell premises 83A and 83B Park Street by the writ

petitioners for a price of eight lakhs. The sale was subject to

obtaining necessary permissions' under the Act. The agreement

provided that simultaneously with the execution of the agreement

vacant possession of the ground floor of premises No. 83A would

be handed over to the purchaser who would be authorised to

make repairs, alterations and additions on the understanding that

if the transaction fell through the purchaser would give back

vacant possession of the said portion to the vendor. A sum of Rs.

1 lakh was paid by the purchaser to the vendor by way of earnest


35/5135

money. Possession of the ground fleer of 83A, Park Street was

made over to the purchaser. An application was made by the

petitioners to competent authority for permission under Sec. 27 of

the Act. The permission was refused on the ground that the

possession already being handed over upon receipt of Rs. 1 lakh,

the applicants were no longer owners of the property and not

entitled to make any application under Section 27(2) of the Act as

such owners. The refusal to grant permission was challenged by

the vendor under Article 226.

The only issue was whether the vendors remained the

owners of the property. In that context the court held that there

was no transfer of the premises. The order rejecting the writ

petitioner's application under Section 27 was accordingly set

aside.

The decision in Taherbhoy's case is therefore an authority

for the proposition that only a transfer which results in the

transfer of title disqualifies an applicant from applying under S.

27. The learned Judge was not called upon to consider any other

point and in particular the effect of the phrase ‘or otherwise’ as

appearing in condition (ii) of the exemption order.

In the case before me condition (ii) did not for the reasons

stated only refer to transfer of ownership and Taharbhoy’s case is

not applicable either in fact or on principle.

In my view the decision of Smt. Lila Vati Bai vs. State of

Bombay (AIR 1957 SC 521) is most apposite to the facts of this


36/5136

case. In that case the question was whether premises were

vacant for the purpose of effecting a requisition of such premises

under S. 6 of the Bombay Land Requisition Act 1948. The

explanation provided that premises would be deemed to be

vacant under certain circumstances viz., :

"when such landlord ceases to be in occupation or when

such tenant or subtenant ceases to be in occupation upontermination of his tenancy, eviction, assignment or transfer

in any other manner of his interest in the premises or

otherwise.”

It was contended before the Supreme Court that the phrase

'or otherwise' should be construed ejusdem generis with the

words immediately preceding it. The Supreme Court negatived the

contention and held:-

"The Legislature has been cautious and through-goingenough to bar all avenues of escape by using the words 'or

otherwise’. Those words are not words of limitation but of

extension so as to cover all possible ways in which a

vacancy may occur … ... ... ....

… ... ... ... ….

Hence, far from using those words ejusdem generis with thepreceding clauses of the explanation, the Legislature used

those words in an all inclusive sense. No decided case of

any court holding that the words 'or otherwise' have everbeen used in the sense contended for on behalf of the

petitioner, has been brought to our notice."

Their lordships accepted the reasoning in Skinner & Co. -vs-

Shew & Co. (1893 (1) Ch. 413) in which the Court of Appeal had

held that the phrase 'or otherwise1 could be read ejusdem

generis.


37/5137

For the reasons already stated the rule of ejusdem generis is

not applicable to this case. The only limitation which may be

placed on the words 'or otherwise’ is to restrict it to transfers

resulting in the transfer of holding of the land within the meaning

of S. 2(i) (ii) of the. Act.

No principle would warrant the word 'transfer1 used in

condition (ii) to be construed only in the manner defined in S. 5 of

the Transfer of Property Act 1882. Section 5 deals only withconveyance of ownership. To limit the word transfer to a transfer

of ownership would be to ignore the words 'lease' and 'mortgage'

where no transfer of ownership takes place. It would mean

ignoring the words “or otherwise”.

The reliance on the observations of the Supreme Court in

Kumari Sonia Bhatia (Supra) by the petitioners is misplaced. The

Supreme Court was considering the scope and ambit of Section 6

of the U.P. Imposition of Ceiling on Land Holdings Act 1970

(referred to as the UP Act). That section debarred the transfer of

land made after 4th January 1971. The word "transfer" was not

used in conjunction with any other illustrative word as in this

case. There was no indicating factor as to the meaning of the

word ' transfer’. In those circumstances the Supreme Court" held

that the word 'transfer’ used by the Legislature in Section 6 of the

UP Act had been used in the general sense of the terms as

defined in the Transfer of Property Act.


38/5138

In this case, however as already held there are other factors

which are pointers to the meaning of the word 'transfer' in

condition (ii).

Keeping in view the meaning of transfer 'or otherwise' the

nature of the transaction between the Company and HMCL may

be considered.

The clauses in the agreement for sale show that except forthe title the Company has already divested itself of virtually all

rights of ownership in respect of the land which is the subject

matter of the agreement permanently.

The date of sale has been fixed irrespective of the actual

execution of the Conveyance. The company has received almost

the entire sale price except for as Rs.1 lakh. The services of

workmen, and all liabilities on their amount also stand transferred

with effect from the date of sale viz., 26.3.88. All movable

properties also stood transferred with effect from that date. The

Company was also required to transfer Industrial licenses, quotas,

entitlements and permits pertaining to the Industrial Undertaking

to HMCL. Fiscal liabilities and all records in respect of the North

Mill have also been transferred to HMCL. The HMCL has been

given the right to run the North Mill under a general power of

Attorney.

Therefore it is a transaction where possession of the North

Mill has been given against consideration under a General Power

of Attorney. Clause 39 shows that even if permission is not


39/51


40/5140

company should not use the exempted land for any purposes

other than that mentioned in its application for exemption had

been violated.

The emphasis is on the Company's user. In other words the

exemption which is granted under Section 20 of the Act is granted

to the person holding vacant-land in excess of' the ceiling limit.

Section 20 of the Act provides :

“S. 20 Power to exempt. - (1) Notwithstanding anything

contained in any of the foregoing provisions of thisChapter:-

(a) Where any person holds vacant land in excess of theceiling limit and the State Government is satisfied either on

its own motion or otherwise, that, having regard to the

location of such land, the purpose .for- which such land isbeing or is proposed to bemused and such other relevant

factors as the circumstances of the case may require, it is

necessary or expedient in the public interest so to do that

Government may, by order exempt, subject to such

conditions, if any as way be specified in the order, such

vacant land from the provisions of this Chapter;

(b) Where any person holds vacant land in excess of the

ceiling limit and the State Government, either on it ownmotion or otherwise, is satisfied that the application of the

provisions of this Chapter would cause undue hardship tosuch person, that Government may, by order, exempt,

subject to such conditions, if any, as may be specified in the

order, such vacant land from the provisions of this Chapter :

Provided that, no order, under this clause shall be made

unless the reasons for doing so are recorded in writing.


41/5141

(2) If at any time the State Government is satisfied that

any of the conditions subject to which any exemption underclause (a) or clause (b) of sub-section (1) is granted is not

complied with by any person, it shall be competent for theState Government to withdraw, by order such exemption

after giving a reasonably opportunity to such person for

making a representation against the proposed withdrawal

and thereupon the provisions of this Chapter shall applyaccordingly."

The exemption does not run with the land. Therefore if the

land is no longer held by the company under wither of the limbs

of S.2(C) the substratum of the grant of the exemption goes.

Furthermore the exemption under S.20 is granted taking

into consideration inter alia the requirements of the applicant

being the holder of the land. This is so for several reasons.

Firstly, the calculation of excess vacant land is made with

reference to the applicant's holding. Secondly, the purpose for

which the excess vacant land is sought to be retained is the

purpose of the applicant. The State Government is required to

satisfy itself on material produced by the applicant as to the

bonafide of the application. Therefore, the exemption being

personal to the applicant that the transferee was also using the

exempted land for the same purpose as the petitioner is

irrelevant.

In this particular case the company's application for

exemption specifically stated that the Company required the land

for its industrial activities and that without the land it would

“virtually become Impossible for the company to carry out its

industrial activities."


42/5142

The respondent authorities were asked to consider the grant

of the exemption on the basis of this representation. The

agreement for sale and the handing over of possession and

control of the exempted land to the KMCL undoubtedly belies the

representation. The respondent authorities were therefore

justified in holding that the petitioner did not really need the land

for which exemption was sought.

The third ground for withdrawing the exemption is the

allowance of encroachers on the exempted Land. It cannot be said

that there was no mention of this in the show Cause Notice. The

language of the show cause notice specifically refers to transfers

apart from the transfer of the North Mill to HMCL. That portions of

the exempted land were in possession of licensees had been

admitted by the company in its letter dated 31-3-89. There was

no reference to user of the exempted land by the licensees in the

company's application for exemption. Therefore the contention of

the petitioners that the licensees were in occupation prior to

14.12.84 appears to be untenable. In any event this is a question

of fact which has been determined by the authorities. It cannot

be said that such determination is based on no evidence or is

perverse.

Section 20(2) itself allows the withdrawal of exemption in

the event of any non-compliance with any condition subject to

which an exemption order is passed. No other factor is required to

be considered under that subsection. I have already held that the


43/5143

transaction between Company and HMCL amounted to a transfer.

No sanction of the Government was admittedly obtained by the

company at any stage prior to the transaction. There was thus

non-compliance with condition (ii) justifying the action under

section 20(2) of the Act. By permitting the user of exempted

lands by the licensees and HMCL the company had not complied

with condition (i). Finally condition (vii) of the Exemption order

expressly provided for a review of the actual utilization and

requirement of the lands by the company after two years from

14.12.84. As already stated, the authorities had ample reason for

coming to the conclusion that the company itself was not utilizing

the land exempted. In terms of condition (vii) the State

Government, if it found that the company itself was not utilizing

the exempted land it could and has in fact withdrawn the

exemption.

It cannot be said also that a reasonable opportunity was not

given to the company before the exemption was withdrawn.

Admittedly after the show cause notice a hearing was held on

7.11.89 at which the company's Secretary appeared. There was in

fact no need to hold the further hearing which was fixed for

24.5.90 before the Deputy Secretary for enabling the company to


44/5144

make its submissions in writing. The company's letter for

adjournment was given to the Assistant Secretary on 24.5.90.

The Deputy Secretary had no knowledge of the prayer for

adjournment and decided the matter on the material before him.

The impugned order was received by the company on 20.6.90.

No protest appears to have been made to the Deputy Secretary

that the company had not been properly heard prior to moving

the writ application in April 1991, Even at the hearing no such

grievance was made.

As the change in classification was not a ground for

withdrawal of the exemption order, it is not necessary to consider

the petitioner's contention in this record.

The conditions precedent to the exercise of powers under

section 20(2) of the Act having been duly fulfilled, the challenge

to the order dated 19.6.90 cannot be sustained and is accordingly

rejected.

Order dated 20. 6. 90

By this order the respondents rejected the petitioner's

application dated 2.5.85 for exemption of 36957.70 square

meters at Mouza - Fort Gloster and Chakmadhu P.S - Bauria and

12,059.64 square meters at Raghudevpur P.S. - Sankrail. In the

impugned order the reason given for such rejection stated as

follows:


45/5145

"After taking into consideration all the aspects involved and your

representation in this regard, Govt. is satisfied that these excess

vacant lands are not required by your company for any useful

industrial activities in near future and it is not a fit case in which

exemption u/s 20(1)(a) of the Urban Land (C&R) Act, 1976 should

be granted."

:

I am unable to accept the petitioner's contention that the

order should be set aside because no hearing was given. Firstly it

has been held joy a Learned Single Judge of this Court in M/s.

Kewal Court (Pvt.) Ltd & Anr. vs. State of West Bengal & Ors (AIR

1988 Cal 161) that there is no provision in the Statute which

requires a hearing. Secondly a hearing was admittedly given on

4.11.86.

However, the second, third and sixth grounds raised by the

petitioners merit consideration.

I am not persuaded to hold that this statement in the

impugned order as quoted above discloses the reason for the

rejection of petitioner's application dated 2.5.85. As already noted

the petitioner's application dated 2.5.85 had specifically

mentioned the separate grounds why various plots were required

for various reasons. It may be that the reasons stated in the

application were not acceptable to the authorities. However, it

was incumbent on the authorities to state why the various

reasons were not acceptable in the circumstances of this case.

The order of P.K. Mukherjee -J dated 20.5.86 disposing of

the first writ application filed by the petitioner challenging the


46/51


47/5147

a substitute for the requirement of' passing a speaking order nor

can they supplement the reasoning in such order. Even in the

affidavit in opposition filed on behalf of the respondents no

ground has been given for rejecting the application of the

petitioner dated 2.5.65 except the following:

"It was also thought that further exemption for any other

excess vacant land is also not justified since the companyfailed to utilise the excess vacant land, already exempted in1984." (para 4(t)).”

The mere fact that the company had failed to utilise the

excess vacant lend already exempted for the purposes stated

cannot by itself be sufficient reason for rejecting the petitioner's

application in respect of the plots of land, which were not the

subject matter of the exemption order. The purposes for which

the exemption was sought in respect of the TWO areas of land

being the subject matter of the application dated 2, 5. 85 were

distinct. It may be noted in the application dated 2.5.35 there

was no question of proposed user as there was in respect of the

land which was exempted by the order dated 4.12.84 The

company had stated in its application dated 2.5.85 that it was

already using the two areas of land for which exemption was

being sought. For example as far as the 12,069 square meters of


48/5148

land were concerned the company had stated that the entire land

is being utilized for a Railway siding and is required to be kept

open for loading, unloading of good and also transportation. The

authorities should have therefore hold an enquiry firstly, to

consider whether the company was utilising the two areas of land

for the purposes mentioned in the application dated C.5.85 and

secondly, considered whether if the lane was in fact, so being

utilized, such utilization warranted exemption under section 20 of

the Act.

Although in the affidavit in opposition it was stated that the

competent authority, Uluberia and the competent authority,

Howrah Sadar had submitted reports on the submissions made by

the company at the hearing held on 4.11.86 no copies of the

reports had been annexed or even disclosed by the respondents

at the hearing.

Before leaving this aspect of the matter it is made clear that

the fifth contention of the petitioners is also of substance. The

petitioners are not seeking to usurp the power of the Govt. under

Section 23 of the Act, but have merely pointed out that the

grounds on which exemption had been claimed in their application

dated 2.5.85 were similar to the purposes for which the State

Government could make allotments under Section 23. The


49/5149

argument is that the objects of allotment by the State

Government must be objects justifying the holding of vacant land

by the allottee. If this is so then there could be no rationale for

not allowing the company to retain the lands for the same

objects.

In the circumstances this order cannot be sustained and is

accordingly set aside with a direction on the authorities concerned

to consider the application dated 2.5.85 afresh in the light of the

observations contained in this judgment. The concerned authority

must pass a reasoned order which muse separately deal with the

company's requirements as mentioned in the application elated

2.5.85. Such order must be passed within a period of three

months from the date of this judgment.

Draft Statement dated 13.3.91

The petitioner's submission that the second draft statement

could not be issued during the pendency of the first draft

statement is unacceptable. The first draft statement was prepared

on the basis of the situation as it existed in 1985 namely, the

exemption order dated 14.12.84 and the rejection of the


50/5150

company's application for exemption of two areas of land was in

force. The second draft statement however has been prepared on

the basis of the situation prevailing in 1991 and has been

prepared on the basis of the orders dated 19.6.90 and 20.6.90.

The draft statement is by its very nature not a final decision

and it was open to the petitioners to raise any objection to such

draft statement. However as the second draft statement must

have been prepared on the basis of the orders dated 19.6.90 and

20.6.90 and as the order dated 20.6.90 has been set aside by this

Court, clearly the second draft statement may need revision after

the petitioner's application dated 2.5.85 has been heard and

disposed of indicated above.

For the reasons aforesaid the writ application is disposed of

by dismissing the writ application in so far as it relates to the

order dated 19th June, 1990 and allowing the petition in so far as

it relates to the order dated 20th June, 1990 and staying

proceedings pursuant to the draft statement dated 13.3.91 until

the disposal of the application dated 2.5.85.

In the facts of this case there will be no order as to costs.

Sd/- Ruma Pal –J


51/51

The prayer for stay of operation of the order in so far as it

relates to the order dated 13.6.90 is rejected.

Let a Xerox copy of judgment dt. 17.6.92 be given to the

parties on usual undertaking.

Sd/-Ruma Pal -J

Order Ruma Pal J

Documents

Transcript of Order Ruma Pal J