M/S.Jagat Steel Indu vs. Orissa Industrial

Facts

M/s. Jagat Steel Industries (Petitioner) was allotted Plot No. 16 at Mancheswar Industrial Estate by IDCO (Opposite Party No. 1) in 1981 and took possession in 1982. In 2009, IDCO offered an One Time Settlement (OTS) scheme for outstanding dues of Rs. 66,935/-, which the petitioner paid. However, the lease and allotment were cancelled by IDCO on 22.07.2000, a fact the petitioner became aware of twelve years later in 2012. The petitioner sought to quash the cancellation order and subsequent proceedings. IDCO contended that the cancellation was due to misutilization of land, subletting, residential use of the upper floor, and digging a bore well without permission, and that a show cause notice was issued on 12.06.2000. The petitioner denied receiving the show cause notice and stated they had been depositing annual ground rent and IMC. Subsequent developments involved the petitioner's attempts to get the cancellation revoked under OTS, including depositing various fees and dues, but the proposal was eventually rejected. A joint inspection report in 2018 indicated no subletting and that the unit was working for its allotted purpose.

Held

The Court, in view of the subsequent developments and the fact that the question of revocation of the order of cancellation and payment of damages/dues was under consideration by IDCO, decided not to go into the merits of the writ application. The Court directed Opposite Parties No. 1 to 3 (IDCO) to consider the pending application for revocation of the order of cancellation dated 22.07.2000 and to take a decision within three months from the receipt of the certified copy of the order. This decision was to be made after providing the petitioner an opportunity of hearing and communicating the outcome within a week thereafter. Crucially, the Court directed IDCO to take into consideration the joint inspection report dated 27.07.2018, which stated that there was no subletting and the unit was working for its allotted purpose. The interim order passed on 02.07.2012 was to continue until IDCO made its decision. No specific issue was expressly left undecided, but the court opted for a procedural resolution rather than a final determination on the merits of the cancellation.

Key Issues

1. Whether the order dated 22.07.2000 cancelling the lease deed and letter of allotment of Plot No. 16, issued by the Opposite Parties, is liable to be quashed? (Question of law and fact, concerning principles of natural justice and contractual obligations). 2. Whether the EUO Case No. 1157 of 2012 and the notice issued therein, initiated by Opposite Party No. 4, are liable to be quashed? (Question of law and fact, concerning procedural propriety and validity of subsequent actions). Petitioner's Arguments: The petitioner argued that the cancellation order dated 22.07.2000 was passed without prior notice or an opportunity to show cause, violating principles of natural justice. They claimed they were unaware of the cancellation for twelve years and that the show cause notice dated 12.06.2000 was never served. They also highlighted subsequent developments, including their continued payment of dues and a joint inspection report confirming proper utilization of the plot, suggesting the cancellation was unjust. They relied on their consistent efforts to resolve the matter through OTS and reconsideration. Opposite Parties' (IDCO) Arguments: IDCO contended that the cancellation was justified due to the petitioner's misutilization of the land, including subletting, residential use, and unauthorized bore well construction, all in breach of allotment terms. They asserted that a show cause notice was issued on 12.06.2000, and the cancellation order followed due to the petitioner's non-response. They also referred to a similar writ petition (W.P.(C) No. 16989 of 2009) disposed of by the High Court.