M/S Basic Sanitation Private Limited vs. The State Of Bihar

Facts

M/s Basic Sanitation Private Limited (the petitioner) challenged an order dated 04/11/2022 issued by the Executive Director (South), BIADA, Patna. This order cancelled the lease deed for Plot No. XXV, admeasuring 10868 sq. ft. in the Industrial Area, Pataliputra, on the grounds that the unit was non-functional and not carrying out the activity for which it was allotted. The petitioner sought to quash this cancellation order. During the proceedings, it was noted that possession of the unit had not yet been taken over by BIADA, though this was disputed. It was also undisputed that no third-party rights had been created. The Court then facilitated an undertaking from the petitioner regarding future operations and payment of dues.

Held

The Court accepted the undertaking furnished by the petitioner, M/s Basic Sanitation Private Limited, on 14.12.2022. This undertaking included commitments to start commercial production within sixty/ninety days, make the unit fully operational to 80% capacity within six/nine months, clear all dues payable to BIADA within four weeks of possession handover/cancellation recall, and comply with all statutory requirements, including GST and electricity charges. The Court made the petitioner aware of the consequences of breaching this undertaking, including contempt proceedings. Consequently, the order dated 04.11.2022 passed by the Executive Director, BIADA, Patna, cancelling the allotment was quashed and set aside. The petition was disposed of in terms of the accepted undertaking, with liberty reserved for BIADA to approach the Court if the petitioner failed to abide by it.

Key Issues

1. Whether the order dated 04/11/2022 issued by the Executive Director (South), BIADA, Patna, cancelling the lease deed for Plot No. XXV, is liable to be quashed? The petitioner argued for quashing the order, seeking to revive the lease and continue operations. The respondents, represented by BIADA, initially disputed the petitioner's claim regarding possession but agreed to dispose of the petition based on an undertaking. The core of the dispute revolved around the petitioner's failure to make the unit functional and the subsequent cancellation by BIADA. The Court's intervention focused on finding a resolution through an undertaking by the petitioner, rather than a detailed legal argument on the validity of the cancellation itself.