M/S. Visakha Pharmacity Limited vs. The State Of Andhra Pradesh
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Cause title — parties, addresses and appearances
ORDER:-
Heard Sri S.Niranjan Reddy, learned Senior Counsel assisted by Sri D.S.Siva Darshan, learned counsel for the petitioner, Sri Dammalapati Srinivas, learned Advocate General appearing for Ms. Santhi Chandra, learned Standing Counsel for Andhra Pradesh Industrial Infrastructure Corporation (APIIC), learned Government Pleader for Industries and Commerce appearing for respondent No.1 and Sri O.Manohar Reddy, learned Senior Counsel appearing for Sri S.V.S.S.Siva Ram, learned counsel for respondent No.5. 2. The challenge in the writ petition is to the action of the respondent Nos.2 to 4 in proposing to restore the Plot No.20, Jawaharlal Nehru Pharma City, Parawada, in favour of the respondent No.5, unilaterally.
The brief facts of the case leading to the filing of the writ petition are that in order to develop the Pharma Industry in the State, it was proposed by the Government of Andhra Pradesh to set up and develop Pharma City on a commercial format with private sector participation. The APIIC has been appointed as the nodal agency for implementation of the project. In pursuance thereof, the APIIC invited competitive bids from the eligible bidders for implementing the project and in response to such invitation, the APIIC received bids. Out of the said bids, the petitioner’s bid was accepted and letter of intent dated 18.11.2003 was issued to the petitioner requiring it to 5
comply with certain compliances mentioned therein. Subsequently, a Concession Agreement was entered into between the petitioner herein and the APIIC-the 2nd respondent herein on 12.03.2004. As per the terms of the said agreement, the petitioner was granted exclusive concessionary rights to design, finance, build, own and operate a Pharma City. Under the agreement, the petitioner is obligated to provide common facilities such as Common Effluent Treatment Plant (CETP), marine outfall, solid waste management system, and common infrastructure facilities such as internal roads, lighting and green belt development etc.,. In pursuance of the said agreement, the land over an extent of 2120 acres was earmarked by APIIC for development of Pharma City on Build, Own and Operate (BOO) basis, of which 785 acres was given on lease basis to the petitioner and in respect of the balance extent of 1335 acres, ownership was transferred to Concessionaire under the agreement. The petitioner was granted concession to develop, finance, design, construct, install, establish, operate and maintain the project, right to develop the real estate and cut industrial plots and undertake marketing of their disposal and sale of such plots and enter into agreement to sell with user industries, sell such plots, right to determine, levy demand, charge, collect, revise, retain and appropriate various charges prices, rates, rentals fees and revenues in respect of sale of developed plots for leases and/or licenses granted by Concessionaire for services provided at its sole costs and expense during the concession period.
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It is contended that in pursuance thereof, the petitioner had entered into tripartite agreement with APIIC and the unofficial respondent No.
An Agreement of Sale dated 21.03.2009, was executed by and between the petitioner and the respondent No.5, for sale of Plot No.20 spread over an extent by 42.28 acres for setting up of an industry for manufacture of bulk drugs, Pharmaceuticals, fine chemicals and allied activities. Apart from the Agreement of Sale and Development Agreement dated 21.03.2009, was also entered into by the petitioner with APIIC and respondent No.
Under the said Development Agreement, the petitioner shall maintain the Pharma City perpetually and the respondent No.5 was under an obligation to pay all charges for maintenance and operation of the Pharma City as calculated and decided by the governing body. The respondent No.5 was under an obligation to set up industry for manufacture of bulk drugs and Pharmaceuticals within 24 months from the date of Development Agreement subject to condition that the petitioner completes construction of the common minimum facilities such as water, Common Effluent Treatment Plant (CETP), Electrical Lines, Hazardous Waste Management Services.
As the respondent No.5 failed to set up the industry as agreed and stipulated under the agreement, a show cause notice was issued on 19.09.2011, requiring the respondent No.5 to explain the progress. The respondent No.5 submitted its explanation vide letter dated 19.06.2013, seeking extension of time, and the time was accordingly extended up to December, 2014, to implement the project. Despite the same, the respondent
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No.5 failed to implement the project as per the scheduled timelines and extension of time, thus, a show cause notice dated 17.01.2015 to respondent No.5 was issued as it failed to establish the unit for the purpose for which it was established. The respondent No.5 submitted its explanation citing several issues such HUD-HUD cyclone, labour issues, supply of water etc., and sought extension of time up to December, 2017. However, even after a lapse of 12 years, the respondent No. 5 could not complete the project. A final show cause notice dated 22.03.2021 was issued to the respondent No.5 to show cause as to why the allotment shall not be cancelled, and the possession be resumed. The respondent No.5 submitted its explanation, stating that the issues were due to COVID-19 and fabrication-related issues. The APIIC, after considering the explanation of the respondent No.5 cancelled the allotment made in favour of the respondent No.5 vide proceedings dated 20.10.2021. 6. Challenging the said cancellation proceedings, respondent No.5 filed a writ petition in W.P.No.25815 of 2021. The said writ petition was withdrawn by respondent No.5 on 30.12.2024. Thus, the petitioner contends that the cancellation proceedings cancelling the allotment had become final. After the same has become final, the petitioner made representations to the APIIC on 11.03.2025 and 06.06.2025, requesting to allot Plot No.20 in favour of the petitioner. It is contended that without considering the representations of the petitioner, the APIIC proposed to accept the request of respondent No.5 and restore the plot in its favour. In pursuance thereof, the respondent No.4
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issued a letter dated 29.04.2025, requiring the respondent No.5 to pay restoration fee @ 3% on the prevailing land cost with applicable taxes and also approved to grant EoT up to 31.03.2028 with EoT fee as per Allotment Regulations with applicable taxes. The same was computed at Rs.4,01,04,679/- towards restoration fee including GST.
Learned Senior Counsel Sri S.Niranjan Reddy appearing for Sri D.S.Siva Darshan, learned counsel for the petitioner, contends that the respondents have no right to restore the land to respondent No.5 without reference to the petitioner and the same is not in accordance with the Concession Agreement. If time is extended after lapse of 15 years, the same would not only be detrimental to the interests of the petitioner but also prejudicial to the interests of the State.
It is further contended that if any restoration is proposed, the same cannot be done on the basis of the old rate but the same should be considered as fresh allotment in accordance with Concession Agreement. It is argued that the grant of restoration without consent of the petitioner is illegal and not sustainable. It is argued that APIIC has no authority to restore or re-allot the land in favour of the respondent No.5 as none of the agreements with the respondent No.5 would provide for the same.
Learned Senior Counsel further contends that out of total extent of 2143 acres of land, of which Pharma City comprises, the petitioner is the title holder in respect of 789.28 acres of land and in respect of the balance
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extent of 1353.72 acres, in the light of the Concession Agreement, the APIIC is making the allotments based on a recommendation made by the petitioner. Even the respondent No. 5, vide its application dated 25.10.2008, applied to the petitioner in the first instance. It is contended that, based on the recommendation made by the petitioner, the APIIC had issued a provisional allotment letter on 27.01.2008 in favour of the respondent No.
As per Clause 10 of the said allotment letter, the respondent No.5 was under an obligation to abide by the terms and conditions of the Development Agreement and the Agreement of Sale. Learned Senior Counsel for the petitioner, referring to the Clauses of Agreement of Sale and the provisional allotment letter dated 27.01.2008, contends that the respondent No.5 was required to complete the project in a phased manner, including construction of the factory building, as specified in the Agreement from the date of the Development Agreement. However, respondent No.5 did not comply with these obligations. Therefore, the APIIC vide proceedings dated 20.10.2021, cancelled the allotment, determining the Agreement of Sale and the Development Agreement. Challenging the same, the respondent No.5 has filed a writ petition in W.P.No.25815 of 2021. The same was dismissed as withdrawn, on 30.12.2024, even while the said writ petition was pending, the respondent No.5 appears to have approached the APIIC for restoration of allotment by extending the time. Acting on the said requisition letters, the APIIC issued letter dated 24.02.2025 to submit schedule of timelines for the restoration of allotment. The learned Senior Counsel Sri S.Niranjan Reddy
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intensely argues that since the writ petition was withdrawn, the proceedings of cancellation of allotment has become final. The petitioner vide letter dated 11.03.2025 and 06.06.2025, requested the APIIC to allot Plot No.20 in its favour for providing infrastructural facilities. However, the APIIC proposed to consider the restoration of allotment in favour of the respondent No.5, subject to conditions such as payment of 3% penalty on the prevailing land cost and restoration fee. The respondent No.5, however, without complying the conditions stipulated, sought waiver of the said restoration fee and fee for extension of time.
Learned Senior Counsel Sri S.Niranjan Reddy contends that the APIIC cannot restore or re-allot the land to the respondent No.5 without referring the same to the petitioner or obtaining consent from the petitioner, more so, in the light of the Concession Agreement between the petitioner and APIIC. It is contended that both the Agreement of Sale and the Development Agreement had come into effect in pursuance of the said Concession Agreement. After cancellation of the said allotment, if the APIIC proposes to restore it, they should refer it to the petitioner, and only after the petitioner's approval can they proceed with the restoration. The respondents cannot make any distinction between SEZ and Non-SEZ areas of land when it comes to the concessional rights conferred on the petitioner in respect of allotment under the Concession Agreement. It is contended that in the lands owned by the APIIC, the petitioner issues the provisional allotment and subsequently, APIIC finalizes the said allotment and then APIIC would join as a second party
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to the Agreement of Sale and Development agreement. It is argued that under the Concession Agreement, the right to allot the entire Pharma City land, regardless of the location, is vested completely with the petitioner. The learned Senior Counsel has vehemently opposed the restoration of the plot at the old rates. If any proposal is to consider the request of the respondent No. 5 for restoration, the same should be treated as a fresh allotment at the present rates, and not at the old rates. The learned Senior Counsel has further argued that the restoration of allotment at the old rates would deprive both the interests of the petitioner as well as those of APIIC since APIIC is also an equity shareholder in the petitioner company. The learned Senior Counsel strenuously argues that Allotment Regulations of APIIC under which the APIIC is proposing to consider the request of the respondent No.5 for restoration are not sustainable as the said regulations have no enforceability under law as they are non-statutory regulations. Even if it is admitted that the said regulations are applicable, the Regulations, 2023 would apply, not the regulations of 2012, and respondent No.5 would be liable to pay 62% of the existing land cost towards the restoration fee and EoT fee. Learned Senior Counsel relies on the judgment of the Hon’ble Apex Court in the case of APIIC Vs. Shivani Engineering Industries. It is contended that for not following the timelines, the Hon’ble Apex Court in the said case directed the APIIC to resume the plot. Similarly, in the instant case, the respondent No.5 did not meet the project timelines, thus, the APIIC ought not to have considered the application for extension of timelines. It has been further stressed by the 12
learned Senior Counsel that without consultation with the petitioner by APIIC, the decision of APIIC to consider the request of restoration is not sustainable. While granting extension in the cases of certain other companies, the petitioner was consulted. Thus, learned Senior Counsel prays for a direction to respondents not to restore the plot in favour of respondent No.5 and direct the respondents to allot the same in favour of the petitioner.
Counter affidavit on behalf of the respondent Nos.2 to 4 has been filed contending that request of the respondent No.5 for restoration of allotment was placed before EoT Committee. The Committee in its meeting held on 18.03.2025 considered the request of the respondent No.5 for restoration of allotment. The Committee had taken a decision to restore the allotment after payment of the restoration fee at 3% of the prevailing land cost along with applicable EoT fee. It is the APIIC which is the competent authority for allotment of industrial plots for promotion of industrialization and employment. The APIIC had considered the similar requests of the investors to grant extension of time in order to promote industrialization and employment. It is further stated that the application of the petitioner cannot be considered since the application of the respondent No.5 is under active consideration of EoT Committee. The learned Advocate General Sri Dammalapati Srinivas, appearing on behalf of Ms. Santhi Chandra, learned Standing Counsel for the respondent Nos.2 to 4, contends that the petitioner is only a notified developer in the SEZ area and its rights are confined to allotment and implementation of projects within the SEZ limits and 13
it does not own Non-SEZ land, power to allot to cancel, resume and restore absolutely vests with APIIC, and APIIC is the absolute owner of the subject property and the petitioner cannot have any right for allotment in respect of the subject land. It is argued that from the request made by the petitioner to APIIC for allotment of plot No.20, reflects that the petitioner is aware of the ownership of the APIIC. It is further contended that pursuant to the cancellation proceedings, the respondent No.5 was requested to handover vacant position of the subject land to APIIC. The aim and objective of APIIC is to promote industrialization and employment generation rather than revenue generation and similar extensions have been granted in past in respect of other companies. It is further argued that there were no consultations with the petitioner while considering the said similar requests for restoration of plots, and there was never any challenge to the same by the petitioner. The learned Advocate General further argued that the respondent No.5 had submitted its representation seeking extension as long back as on 14.12.2022. The same was responded by the APIIC vide its letter dated 31.01.2023 informing the petitioner that its request for restoration of allotment would be examined subject to certain compliances that have to be made by the petitioner viz., to withdraw the writ petition in W.P.No.25815 of 2021 and to submit schedule of timelines for implementing the project as well as to submit an undertaking to pay the restoration and EoT fee charges. It is contended that in order to foster the industrialization, the petitioner’s application was placed before the EoT. It is further contended that the power to allot, cancel and resume and restoration
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in terms of the allotment Regulations completely vests with APIIC. The Clause 15 of the Agreement demonstrates the same. Learned Advocate General further argues that the Clauses of the Agreement provide for arbitration in case of any dispute with regard to the subject agreement either party can resort to arbitrary proceedings, this Court under Article 226 of Constitution of India, cannot adjudicate on the issue.
The APIIC in its counter affidavit further stated that out of the total extent of Ac.2443.20 cents, a layout for Ac.2143.23 cents was approved by VUDA vide LP No.73/2007, dated 08.11.2007. The balance Ac.299.97 cents was reserved for the construction of a Summer Storage Tank and road widening of the approved layout area. Out of the said extent Ac.2143.23 cents, approved by VUDA an extent of Ac.612.00 cents which was earmarked as Pharma SEZ and remaining extent of Ac.1531.23 cents as Non-SEZ. A sale deed was executed by APIIC in respect of Ac.611.37 earmarked as Pharma SEZ in favour of the petitioner vide Doc.No.1660/2007, dated 17.03.2007. The remaining extent of Ac.1531.23 continues to vest with the APIIC as Non-SEZ land.
It is further stated that based on the request of the Bulk Drug Manufacturers Association (BDMA), allotments in the Non-SEZ area (Ac.1531.23) are being made by APIIC under a tripartite agreement with the allottee, APIIC, and RAMKY by imposing certain conditions such as:
(a)The implementation of projects would be monitored by APIIC as per the Allotment Regulations in operation.
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(b) The development cost is collected by RPCIL.
It is stated that the subject land, i.e., Plot No.20 measuring an extent of Ac.42.28 cents falls in the Non-SEZ area, was provisionally allotted to the respondent No.5 on 27.01.2009, by APIIC on an outright sale basis, as per the APIIC land allotment Regulations, for setting up of an industry for the manufacture of Bulk Drugs, Pharmaceuticals, Fine Chemicals and allied activities @ Rs.1,77,95,402/- was paid by the allottee, and the Sale Agreement and Development Agreement were executed on 21.03.2009 and possession of the plot was handed over to the respondent No.5 on 28.03.2009. Despite extension of time, the allottee-the respondent No.5 herein failed to implement the project within the prescribed time. Requests for further extensions were made, citing several reasons. The APIIC issued proceedings on 20.10.2021, cancelling the allotment for non-implementation of the project within the stipulated time.
Aggrievedby the same, the respondent No.5 filed writ petition in W.P.No.25815 of 2021 and status quo orders were granted vide order dated 08.11.2021. On the request of the allottee, for extension of time, the APIIC vide letter dated 31.01.2023 required the respondent No.5-the allottee, to furnish the following information/documents for further examination of the restoration of allotment and EoT, in terms of APIIC Allotment Regulations: a) Exact timelines for project implementation along with details on land utilization, investment, employment generation, and change of line of activity (if any).
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b) An undertaking agreeing to pay Restoration and EoT fees as may be levied in case EoT is granted. c) Withdrawal of Court Case in W.P.No.25815/2021. 16. It is stated that the respondent No.5 vide letters dated 20.01.2025 and 06.03.2025 submitted the documents and copy of the order dated 30.12.2024 withdrawing the writ petition in W.P.No.25815 of 2021 and requested for restoration of allotment and to grant EoT for a period of 3 years i.e., up to March, 2028, for implementation of the project.
The request of the company was placed before the EoT committee meeting held on 18.03.2025 and the Committee considered the request for restoration of allotment and EoT. The request for restoration of allotment has been considered, subject to payment of restoration fee @ 3% on the prevailing land cost along with applicable taxes granting Extension of Time (EoT) up to 31.03.2028, with the applicable EoT fee as per Allotment Regulations and in terms of Circular No 7A/APIIC/AMW/EOT/2021 dated 28.06.2022. 18. It is conteded by APIIC that the request of the petitioner for allotment of subject land does not merit consideration in terms of Allotment Regulations and Concession Agreement between APIIC and RPCIL as it has nowhere been provided under the said agreement that the petitioner had the right of the allotment.
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It is stated by the learned Advocate General that in the past similar to the request of the respondent No.5, requests for restoration of allotment were considered in respect of the following cases: Sl.No. Name of the allottee Plot No. Extent in Acs Extent in Acs/Sqmtrs
Suven Life Sciences Ltd 65, 66, 67 21.18 85717
Emmennarchem Pvt. Ltd. 31 22.18 89763
Aurobindo Pharma Limited 17 43.16 174661
Hetero Drugs Pvt. Ltd. 14 34.13 138125
Krr Drugs & Intermediates Pvt. Ltd. 78 5.24 21225
Krs Pharmaceuticals 26 7.5 30353
Porus Drugs & Intermediates Pvt. Ltd. 64 5.75 23270
Sodhana Laboratories Ltd. 69 4.53 18319
Sipra Labs Limited 44 6.13 24237
Sri Krishna Drugs Ltd. 10 4.45 18007
Srini Pharmaceuticals Limited 47 16.44 66543
M/s. Laurus Labs Limited 16A 15 60705
M/s. Laurus Synthesis Private Limited 16B 15 60705
M/s. Optimus Drugs Private Limited 16C 15.02 60786
The respondent No.5 filed its counter affidavit. The learned Senior Counsel Sri O.Manohar Reddy appearing for Sri S.V.S.S.Sivaram, learned counsel for the respondent No.5, argues that there is no illegality in the decision taken for restoration under the scheme of Build, Own and Operate (BOO). The petitioner who has been granted concession on BOO basis to develop the Pharma City has limited rights to own only the “assets of the facility”, which it has developed and the Concessionaire would not get any 18
legal right over the land on which the facility has been developed. It is further contended that no rights in respect of those lands which have not been sold to the petitioner herein falling under Non-SEZ area is conferred on the petitioner. Referring to the definition of Asset as defined under Clause 1.6 of the Concession Agreement, the learned Senior Counsel argues that the petitioner does not have any right over the land and its allotment in favour of the third parties. It is further contended that there is no obligation on the part of the APIIC to consult the petitioner before any decision for restoration of allotment. It is the further submission of learned Senior Counsel that APIIC is the owner of the subject land falling within Non-SEZ area, in respect of which allotment was made in favour of the respondent No.
The Clauses of the Concession Agreement 1.3 and 1.4 have to be read and understood in terms of the scope and ambit of BOO (Build, Own and Operate). It is further contended that the APIIC is the absolute owner of the land and the rights or interests which have been crystalized in favour of the petitioner under Concession Agreement cannot override the legal ownership of the APIIC over the subject lands. It is further contended that the respondent No.5 had paid entire land cost and the development cost at the time of execution of the Agreement of Sale and Development Agreement. Therefore, the payment of development costs again on restoration of the allotment would be unjust and would amount to double payment. It is argued that the delay in implementing the project is equally attributable to APIIC and on account of various factors as stated in the counter affidavit. Despite the hurdles, the respondent No.5 had made steady
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development, thus contends that the petitioner has no locus to restrain APIIC in considering the application of the petitioner for grant of extension. It is argued that the physical possession of the land subject land has always been with the respondent No.
The application made by the petitioner for restoration is in terms of Regulation No.
Immediately, after dismissal of the writ petition as withdrawn, copy of the order dated 30.12.2024 in W.P.No.25815 of 2021 was dispatched on 10.01.2025, therefore, the application was made within 15 days period as stipulated under APIIC Regulations, 2023. Thus, it is contended that there is no delay in filing the application for restoration.
Considered the submissions. The issue for adjudication in the case is whether the petitioner has any role in the allotment and restoration of allotment of industrial plot(s) in favour of the respondent No.5, under the Concession Agreement dated 12.03.2004 with APIIC.
Under the State Government's Pharma Policy, APIIC was appointed as the nodal agency for implementing the project. APIIC invited bids and accepted the consortium's proposal. APIIC also agreed to grant the Concessionaire (Ramky Group) the concession. A special-purpose vehicle, named after the petitioner as the Concessionaire, was incorporated, with APIIC holding equity, to implement the project on a Build, Own, and Operate basis. The word "concession" has been defined as exclusive right and authority granted by APIIC to the Concessionaire for designing, financing, building, owning, and operating, the Pharma City along with the facilities such 20
CETP, marine outfall, solid waste management system, internal roads etc., through Concessionaires own investment and borrowed funds together with the right to sell/lease the land levy/collect and retain appropriate charges for the operation and maintenance of the Pharma City during the concession period.
As per Clause 3.1 of the Concession Agreement, APIIC is the absolute owner of 2,120 acres of land as described under Schedule F of the agreement and is otherwise sufficiently entitled to the said lands with absolute owner of disposition. The said 2120 acres of land as described under Schedule F have been earmarked by APIIC and identified for development of Pharma City on Build, Own and Operate (BOO) basis. Of 2,120 acres, 785 acres were agreed to be leased to the petitioner herein, the Concessionaire, while the remaining 1,335 acres were agreed to be sold on an outright basis. The Concessionaire is authorised to develop, finance, design, construct, install, operate, and maintain the project. The Concessionaire may also develop real estate, subdivide industrial plots, market and sell these plots, enter into agreements with user industries, and determine, levy, collect, and revise charges, prices, rates, and fees related to the sale, lease, or licensing of developed plots.
Clause 1.6 of the Concession Agreement defines the assets as:
6 ASSETS "Assets" mean and include but are not limited to the following: (a) Land transferred by APIIC to the Concessionaire, on lease basis;
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(b) Land transferred by APIIC to the Concessionaire on sale basis which is remaining vacant and unsold; (c) Common Facilities; (d) Common Infrastructure; and [e] Essential Utilities and Amenities.
As per Clause 3.5 of the Concession Agreement, ownership of those assets constructed, purchased or provided by the Concessionaire, shall, until transferred to APIIC, vests with the Concessionaire. Under Clause 3.2 the concessionaire-petitioner herein has been given right of way for the project free from all encumbrances, permission to enter upon and utilize the land within the boundary of Pharma City for the construction pursuant to and in accordance with the agreement. In the Special Purpose Company, the APIIC will have equity of 11%. Concessionaire shall have the right to fix the sale price, lease rentals, lease deposit, or such other charges for sale/lease of land to the industries. In respect of the levy of charges for maintenance of the Assets, the Concessionaire has right to levy collect and retain the charges so levied and collected.
Out of the total extent of 2120 acres of land as shown under Schedule F of the Concession Agreement, an extent of 1,335 acres was agreed to be sold to the petitioner, and the remaining extent of 785 acres was agreed to be leased out. However, Schedule F of the Concession Agreement, which ought to have contained the details or description of the properties under the Concession Agreement, was left blank with the note “to be enclosed”, indicating that, as of the date of the agreement, the properties agreed to be sold or developed were not identifiable from the Concession
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Agreement. The petitioner seeks to enforce its rights under the said agreement. Further, in the sale deed(s) executed in favour of the petitioner, particularly the sale deed dated 07.03.2007 for an extent of Ac.611.00 cents, there is no reference to the Concession Agreement, through which the petitioner claims to be deriving its rights, on contrary, the recitals of the said sale deed demonstrates that on an application made by the petitioner to APIIC, the APIIC allotted the said land, thus sale deed came to be executed. Under the said sale deed, the petitioner was obligated develop a sector- specific Special Economic Zone (SEZ). Thus, the said allotment and sale are like any regular allotment. However, the remaining two documents executed by APIIC refer to the Concession Agreement but are of a smaller extent, out of the two extents under the said two sale deeds one was towards equity contribution of APIIC. Thus, in my considered view, in the light of the absence of a property schedule the properties delineated under the Concession Agreement are not certain and specific, thus the petitioner cannot seek any enforceable right on the strength of the said document in respect of the subject property proposed to be restored in favour of the respondent No.5 through this writ petition nor has it made out any case for allotment of the subject land in its favour ignoring respondent No.5. 27. From the Concession Agreement, it appears that the petitioner was entitled to purchase certain extents and the remaining extent was transferred on lease for development of the project. In other words in respect of the land sold in its favour, it is the absolute owner and the other extent
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where lease has been granted it is only a developer, it cannot have any role in the decision making process of APIIC in dealing with its properties. At best it is only entitled to receive lease rentals. Apart from all this, APIIC also holds equity in SPV. The instant dispute is in the nature of an inter se dispute between the petitioner and the APIIC, the inter se disputes amongst the members of the consortium in commercial transactions are not amenable to writ juri iction under Article 226 of the Constitution of India.
That apart, assuming that rights of the petitioner are governed by the Concession Agreement. As per the said agreement, in respect of the area which has been sold in favour of the petitioner alone it will have exclusive rights. In respect of the other extents transferred on lease basis (which have never been specified under the Concession agreement), it has been agreed under the agreement that the petitioner would pay lease rentals at the rates as specified under the Concession Agreement (Clause 6.3).
The petitioner, with APIIC and the respondent No.5 entered into an Agreement of Sale dated 21.03.2009 and Development Agreement dated 21.03.2009. Under the Agreement of Sale, the respondent No.5 had paid the sale consideration of Rs.1,77,95,402/- for purchase of the allotted plot. Under the Development Agreement, the respondent No.5 was obligated to pay development charges of Rs.18,21,88,998/- towards the cost of infrastructure development charges as specified in the III schedule to the said Development Agreement. For developing the Pharma City and for monitoring the project
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during the construction stage governing body has been constituted under the Development Agreement.
Thus in the circumstances of the case, mere entering into an Agreement of Sale by the petitioner with APIIC and respondent No.5 would not give any locus to the petitioner to challenge the subject proposal for restoration of allotment in favour of the respondent No.5, inasmuch as under the Concession Agreement, the details and description of the lands, such as survey Numbers, and extents that have been sold, agreed to be sold, or transferred on a lease basis, have not been mentioned.
Even as per the Agreement of Sale, the APIIC is the absolute owner of the subject property, and the petitioner was only the developer. For providing infrastructural facilities, as a developer, the petitioner was made a party to the Agreement of Sale in commercial parlance, since it is ultimately the petitioner who has to develop the property; it cannot be deemed that any rights accrue to the petitioner under the said agreement except for the receipt of developmental charges. It is not even the case that the petitioner is the title holder of the subject property. In the absence of the same, the contention of the petitioner that APIIC, before taking any decision, could have reverted to the petitioner, is unsustainable. However, from the documents filed by the petitioner, through Memo dated 31.10.2025, it appears that the APIIC granted similar restorations of allotment in favour of other Companies namely M/s. Porus Drugs & Intermediates Pvt Ltd., M/s. Aurobindo Pharma Limited, M/s.Sipra Labs Limited etc., levying a restoration fee and by imposing certain
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other conditions. A copy of the said proceedings of restoration was marked to the petitioner for information, in the capacity as a developer; the same will not create any right to the petitioner nor does it reflect the role of the petitioner in the said decision making process of restoration. And it does not appear from the said documents that the said restoration of allotment was granted with the petitioner's consent. The undisputed fact is that pursuant to the Agreement of Sale and Development Agreement, the respondent No.5 had paid the entire consideration as mentioned under both the agreements.
The application of the respondent No.5 vide letter 14.12.2022, for reallocation/restoration of allotment has been pending with the APIIC since 2022. Pursuant to the said letter, APIIC has issued proceedings dated 31.01.2023 requiring the respondent No.5 to submit certain details, such as the scheduled timelines for implementation of the project, investment, employment etc., undertaking, giving acceptance/consent for payment of restoration and EoT fee and to withdraw the writ petition in W.P.No.25851 of 2021. The respondent No.5 withdrew the writ petition and copy of the order was furnished to the APIIC on 20.01.2025. Thereafter, APIIC vide proceedings dated 29.04.2025 required the petitioner to submit exact timelines and agreed to restore the allotment of payment of restoration fee at 3% on the prevailing land cost and payment of applicable EoT fee, the same was determined at Rs.4,01,04,679/-. However, the respondent No.5 vide its letter dated 10.09.2025 requested the APIIC to consider waiving the restoration fee and EoT charges. At that juncture, the instant writ petition has been filed
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challenging the proposal of the APIIC to restore the allotment in favour of the respondent No.
Reliance has been placed on the judgment of the Hon’ble consideration/development charges pursuant to the allotment made in its favour, despite extension of time for making the payment. On account of the said lapses on the part of the applicant in the said case, the allotment was cancelled. The challenge made to the said cancellation by way of writ petition was allowed by the High Court. The order of the High Court was set aside by the Hon’ble Apex Court. The judgment of the composite High Court in the Date:23.02.2026 ANI
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162 THE HONOURABLE SMT JUSTICE KIRANMAYEE MANDAVA
WRIT PETITION No.25790 of 2025
Date:23.02.2026 ANI
Reproduced from the public record of the Andhra Pradesh High Court. Verify against the court's own copy before relying on it. Income tax judgments are on bharattax.net.