M/S. Arfat Petrochemicals Private Limite vs. State Of Rajasthan

Held

The Court held that the petitioners failed to establish any jurisdictional infirmity, demonstrable prejudice, denial of meaningful opportunity, perversity, or non-application of mind by the competent authority warranting interference under Article 226. The challenge was essentially a request for reappraisal of factual conclusions regarding compliance with the rehabilitation arrangement and lease conditions, which falls outside the scope of judicial review. The Court found the petitioners' arguments based on Articles 19(1)(g) and 300A to be without substance, as Article 300A protects property according to law, not an absolute right to retain government leasehold land contrary to grant conditions, and Article 19(1)(g) does not permit business use in derogation of allotment conditions. The State, as custodian of public property, is required to ensure land allotted for a specified purpose is not diverted. The Court upheld the orders cancelling the lease deeds and rejecting the change of land use application. However, considering the Supreme Court's observations in Bishambhar Prasad, the Court directed the State Government to undertake a time-bound exercise within six months to examine the feasibility of reviving industrial units and formulate a plan for productive industrial utilization of the land, considering public interest and the interests of erstwhile workmen.

Facts

The petitioners, M/s. Arfat Petrochemicals Private Limited and Shri S.H.A. Rizvi, challenged seven orders dated June 24, 2025, which cancelled seven lease deeds granted to the petitioner for land in Kota, Rajasthan. They also sought to restrain the State from creating third-party rights and to declare their ejection as arbitrary. Separately, in another writ petition, they challenged an order dated March 7, 2025, rejecting their application to change the land use for establishing a tourism unit. The land in question, approximately 271.40 acres, was originally allotted to J.K. Synthetics Limited (JKSL) for industrial purposes on lease for 99 years, starting from 1958. The land was later transferred to RIICO and subsequently, through a rehabilitation arrangement, came to the petitioner. The State cancelled the lease deeds and rejected the change of land use application.

Key Issues

1. Whether the cancellation of lease deeds by the State Government was arbitrary, illegal, and without jurisdiction, violating the petitioners' rights under Article 19(1)(g) and Article 300A of the Constitution of India? The petitioners argued that the cancellation was based on a misinterpretation of the rehabilitation scheme and lease conditions, and that the State had previously permitted deviations. They contended that the State's actions were arbitrary and lacked due process. The State argued that the lease conditions were violated, the land was not used for the intended purpose, and the petitioners failed to establish a tourism unit as per their proposal, which was not even an object in their Memorandum of Association. They asserted the State's primacy in determining land use and the validity of the cancellation orders. 2. Whether the rejection of the application for change of land use for establishing a tourism unit was justified? The petitioners contended that the rejection was arbitrary. The State argued that the Memorandum of Association of the petitioner-company did not include establishing a tourism unit as an object, and the petitioners had suppressed this fact. They also relied on Supreme Court judgments emphasizing the State's control over land use.