Case Background
The matter arose from a writ petition filed before the Patna High Court in Civil Writ Jurisdiction Case No. 2179 of 2021. The petitioner was a proprietary concern, M/s Eagle Granite, Fatuha Industrial Area, Phase II, represented through its proprietor.
The petitioner’s late husband had originally been allotted a 20,000 square feet plot of land in an industrial area by the Bihar Industrial Area Development Authority (BIADA). The allotment was made by letter dated 17.07.1990 for setting up a granite and marble industry.
According to the petitioner, a marble industry was in fact established on this plot. However, the original allottee, the petitioner’s husband, died suddenly on 12.09.2004. The petitioner asserts that after his death she became the proprietor of M/s Eagle Granite Firm and continued as such.
It is admitted on record that, at some point thereafter, BIADA cancelled the allotment because of non-payment of dues under a One Time Settlement (OTS) Scheme. The petitioner states that she approached the Industrial Development Commissioner and that the cancellation order was set aside, resulting in restoration of the allotment.
The petitioner further narrates that the then in-charge of Fatuha Industrial Area introduced her to one individual, named in the judgment, who allegedly offered financial help to run the industrial activities. Disputes then arose between them. The said person allegedly began to threaten the petitioner to transfer the unit in his wife’s name.
After restoration of the allotment, the said person instituted Title Suit No. 91 of 2015, which, as recorded in the judgment, is still pending before the civil court. Meanwhile, the petitioner decided to transfer the leasehold rights of the industrial plot in favour of another entity, M/s Dev Jyoti Vyapaar Private Limited.
For this purpose, she applied before BIADA in 2017 seeking permission for transfer. BIADA considered the request and asked her to submit certain documents. The petitioner says that she submitted these documents in October 2018.
However, despite all these developments, one fact remained undisputed before the Patna High Court: there had been no industrial activity on the plot after the death of the petitioner’s husband in 2004.
BIADA’s Managing Director, by order dated 29.01.2019, again cancelled the allotment. The petitioner challenged this order by filing an appeal before the Secretary, Department of Industries, Government of Bihar in Appeal Case No. 06 of 2019. By order dated 06.03.2020, the appellate authority rejected the appeal and upheld the cancellation.
Aggrieved by both these orders, the petitioner moved the Patna High Court under Article 226 of the Constitution, challenging the order of the Managing Director, BIADA dated 29.01.2019 and the appellate order dated 06.03.2020.
What the Court Examined and Decided
The Division Bench of the Patna High Court, comprising Hon’ble Mr. Justice Chakradhari Sharan Singh and Hon’ble Mr. Justice Madhuresh Prasad, heard the writ petition through video conferencing on 18.01.2022 due to COVID-19 restrictions.
The main question before the Court was whether the orders of BIADA and the appellate authority, cancelling the industrial plot and rejecting the petitioner’s appeal, suffered from any legal defect warranting interference in writ jurisdiction.
The Court first noted the series of events as admitted or stated by the petitioner herself. The allotment was originally made in 1990 for establishing a granite and marble industry. The husband of the petitioner, the original allottee, passed away in 2004. After his death, it was admitted that no industrial activity had been carried on at the plot.
The Court then referred to the findings recorded by the appellate authority, the Secretary, Department of Industries, in the impugned order dated 06.03.2020. The appellate authority had considered all materials on record and concluded that the appellant before him, namely the present petitioner, had “miserably failed” to offer any reasonable justification for the absence of industrial activity on the allotted plot.
It was also noticed that there had been breach of the terms of allotment and non-compliance with an earlier order of the appellate authority. On this basis, the appellate authority found that the petitioner had not approached BIADA with clean hands and was merely making “lame excuses” with a “lackadaisical approach”.
The appellate authority further recorded that, despite numerous opportunities, the petitioner failed to start any industrial activity on the plot. Instead, she made every effort to “squat” on the precious land, which was located at a prime location. Because of this, industrialization was being stagnated, as this valuable land could otherwise have been allotted to genuine intending entrepreneurs.
Before the High Court, learned counsel for the petitioner advanced the argument that the petitioner was unable to commence any industrial activity for four long years only because her application for transfer of the land was pending before BIADA. It was submitted that the authority should have considered this situation and permitted her time. Counsel further contended that if she was now given an opportunity, she would soon start industrial activities on the plot.
The High Court considered this contention but tested it against the undisputed facts on record. The Court observed that the admitted position was that no industrial activity had taken place at the unit after 2004, the year of the original allottee’s death.
Moreover, the Court noted the existence of the pending Title Suit No. 91 of 2015 in the civil court. This showed that there was an ongoing civil dispute involving the plot, which further complicated the situation and justified the authorities’ caution. The Court did not go into the merits of that civil dispute but acknowledged its pendency as part of the background.
Crucially, the High Court reminded itself of the limits of writ jurisdiction under Article 226 of the Constitution. It examined whether the orders impugned could be said to suffer from want of jurisdiction, legal infirmity, irrationality, or perversity. Only if such serious defects were present could the Court interfere with decisions taken by administrative authorities entrusted with managing industrial land.
After examining the appellate order dated 06.03.2020 and the order of the Executive Director, BIADA dated 12.02.2019, and after hearing both sides, the Court found no such defect. The authorities had given the petitioner several opportunities to start industrial activity and comply with conditions. The petitioner’s failure to do so, combined with the long period of inactivity and the precious nature of the land, justified cancellation.
The High Court accepted the reasoning of the appellate authority that the petitioner’s conduct did not appear bona fide. The petitioner’s explanation that she was waiting for a decision on her transfer request for four years was not considered a sufficient or convincing excuse, especially when the land had remained unused for over a decade since 2004.
The Court concluded that the impugned orders could not be labeled as arbitrary, perverse, or without jurisdiction. Therefore, in exercise of its discretionary power under Article 226, the Court declined to interfere.
On this basis, the writ application was held to be without merit. The Court dismissed the petition and declined to grant any relief to the petitioner. No costs were imposed on either side.
Why This Judgment Matters
This judgment is important for entrepreneurs and industrial plot holders dealing with BIADA and similar authorities. It sends a clear signal that industrial land given on concessional or special terms is meant for active use, not for being kept idle or used only for trading rights.
The Patna High Court emphasized that if a plot remains unused for many years and the allottee cannot give a convincing reason, the authority is justified in cancelling the allotment. Even pending requests for transfer or private disputes cannot excuse prolonged non-use.
The judgment also shows that in writ jurisdiction, the Court will not easily interfere with administrative decisions on industrial land management. Unless an order clearly shows lack of jurisdiction, legal error, or extreme unreasonableness, the Court will respect the authority’s assessment of the facts.
For those who hold industrial plots in Bihar, the case underlines the need to start and continue industrial activity within a reasonable time. Otherwise, the land may be taken back and given to other entrepreneurs who are ready to invest and operate.
Legal Issues and Answers
- Issue: Whether the Patna High Court should quash BIADA’s cancellation of the industrial plot and the appellate order upholding it, despite long non-use of the land and pending disputes.
Answer: No. The Court held that the orders did not suffer from lack of jurisdiction, legal infirmity, irrationality or perversity, and therefore refused to interfere under Article 226. - Issue: Whether the petitioner’s pending transfer application and civil suit provided a sufficient justification for not running any industry on the plot for many years.
Answer: No. The authorities and the Court found that the petitioner failed to offer any reasonable justification for non-use of the plot and had been merely squatting on valuable industrial land.
Cases Cited by the Court
- The judgment does not record any specific precedents or earlier cases relied upon by the Court.
Case Details
Case Number: Civil Writ Jurisdiction Case No. 2179 of 2021
Case Title: M/s Eagle Granite Fatuha Industrial Area, Phase II (D-19 and D-17 Part) through its Proprietor, Mrs. Dolly Banerjee vs. The State of Bihar and others
Coram: Hon’ble Mr. Justice Chakradhari Sharan Singh and Hon’ble Mr. Justice Madhuresh Prasad
Citation: 2022 (1) PLJR 464
Advocates: For the petitioner: Mr. Siddharth Harsh, Advocate. For the respondents: Mr. Abbas Haidar, Standing Counsel-6.
Nature of the Case: Writ petition under Article 226 of the Constitution challenging BIADA’s cancellation of industrial plot allotment and rejection of statutory appeal.
Link to Judgment: file:///C:/Users/Adity/OneDrive/Documents/Vaktrita%20Final/case%201782.pdf
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