M/S Prerna Agro Food Products vs. The Bihar Industrial Area Development Authority (Biada)

Facts

The petitioner, M/s Prerna Agro Food Products, was allotted Plot No. O-7(P) by the Bihar Industrial Area Development Authority (BIADA) under a Lease Deed dated June 7, 2018. The Deputy General Manager, BIADA, issued an Office Order on December 29, 2022, cancelling this allotment. The petitioner appealed this order to the Principal Secretary, Department of Industries, Government of Bihar, who affirmed the cancellation order on March 7, 2023. The petitioner filed a writ petition challenging both the cancellation order and the appellate order, seeking to quash them and prevent the allotment of the plot to any other person. The petitioner contended that non-commencement of commercial production was due to unavoidable circumstances like COVID-19 and not deliberate.

Held

The Court held that the ends of justice would be met by accepting the petitioner's undertaking and granting an opportunity to start commercial production. The Court noted the petitioner's undertaking to start commercial production within 90 days of possession being handed over, make the unit fully operational within nine months, clear all admitted dues to BIADA within two weeks of possession, and provide a bank guarantee of Rs. 1,00,000/-. The Court also highlighted the undertaking's clause regarding the consequences of failure, including contempt proceedings and BIADA taking possession. Citing a precedent where a similar order was set aside based on an undertaking, the Court quashed and set aside the cancellation order dated December 29, 2022, and the appellate order dated March 7, 2023. The Court directed BIADA to hand over possession immediately, with the petitioner to furnish the bank guarantee and clear dues as per the undertaking. The ratio is that in cases of non-commencement of production due to unforeseen circumstances, a reasonable opportunity should be granted to the industry to rectify the situation, especially when supported by a firm undertaking and a bank guarantee, aligning with principles of industrial promotion and fairness.

Key Issues

1. Whether the cancellation of Plot No. O-7(P) allotment to the petitioner by BIADA, affirmed by the appellate authority, is liable to be quashed, considering the petitioner's submission of an undertaking to commence commercial production within a stipulated period. (Question of law and fact, turning on principles of natural justice and contractual obligations). Petitioner's Arguments: - The delay in commencing commercial production was due to unavoidable circumstances like COVID-19, not deliberate. - A Division Bench of this Court in C.W.J.C. No. 15567 of 2022 (M/s Maa Kali Food Products Industrial Growth Centre, Maranga Vs. The State of Bihar & Ors.) had set aside a similar BIADA order based on an undertaking from the petitioner. - The petitioner has filed a comprehensive undertaking, including timelines for starting production, making the unit operational, clearing dues, and providing a bank guarantee. Revenue/State's Arguments: - The judgment records no specific arguments made by the respondents (BIADA and the State) against the petitioner's submissions or the relief sought.