Supreme Court emphasizes purpose of industrial plots in promoting economic growth

The Supreme Court Stated in a recent judgement (AMAN SEMI-CONDUCTORS (PVT.) LTD. Vs. HARYANA STATE INDUSTRIAL DEVLOPMENT CORPORATION LTD. & ANR. D.D 27Feb2023) that the purpose of developing industrial plots and allotting them to deserving applicants is to promote economic growth and accelerate industrialization. The HSIDC provides financial assistance and develops infrastructure for setting up industrial units. It also allots industrial plots to entrepreneurs on a "no profit no loss" basis, keeping in mind that land should not be allotted to speculators.

Facts

The appellant applied for an industrial plot in Udyog Vihar, Gurgaon in 1994 and was granted possession of the plot in 1995. However, the appellant failed to fulfill the conditions of the allotment and did not take concrete steps to set up the industrial unit. HSIDC issued a notice to the appellant in 1996, asking why the plot should not be resumed, and issued a final notice in 1998. Despite the appellant's request for an extension of time, no concrete steps were taken to satisfy HSIDC's requirements. As a result, HSIDC resumed the plot in 1998 and issued a refund of ₹1,66,425 to the appellant, who was requested to hand over possession of the plot to the Field Officer.

The appellant filed a complaint claiming that they were unable to complete the project due to circumstances beyond their control. The District Forum found in favor of the appellant, but HSIDC appealed to the State Commission, which upheld the District Forum's decision. HSIDC filed a revision petition with the NCDRC, which was dismissed due to a delay. HSIDC's special leave petition to the Supreme Court was granted, and the NCDRC was directed to hear and dispose of the appeal on its merits. After remanding, the NCDRC allowed HSIDC's revision application, finding that the grounds and reasons given by the appellant were vague and did not disclose any specific dates or time frames for completing construction. The NCDRC also held that the appellant did not show what concrete steps were taken and that their conduct and correspondence were insufficient grounds for non-completion of the construction and non-installation of the machines. The plot remained in the appellant's possession from 29-12-1995 until 18-12-1998.

Observed and Held

The Supreme Court observed that the allotment made to the appellant by HSIDC had several conditions, including a requirement that the allottee comply with all terms and conditions of the allotment agreement. Clause 6 of the agreement required the allottee to begin construction of the proposed industrial unit within six months of taking possession of the land and complete construction within 1.5 years. The HSIDC could call for periodic reports on the progress of the project and could order the resumption of the plot if progress was unsatisfactory. The HSIDC could grant an extension for reasons beyond the control of the allottee, subject to payment of a fee.

The Supreme Court observed that the appellant had not taken any steps towards setting up the proposed industrial unit and concludes that the appellant was insincere and never intended to follow through on the project. The appellant never made any genuine effort to start its unit, despite receiving multiple show cause notices. It is inferred that the appellant's intention was never to set up an industrial unit but to speculate with the plot. Therefore, the court concluded that the impugned order does not call for interference.

The Supreme Court held in this case that the purpose of developing industrial plots and allotting them to deserving applicants is to promote economic growth and accelerate industrialization. The HSIDC provides financial assistance and develops infrastructure for setting up industrial units. It also allots industrial plots to entrepreneurs on a "no profit no loss" basis, keeping in mind that land should not be allotted to speculators.

Court directed that the appellant is only entitled to a refund of the amount paid for the plot. However, since the cheque issued to the appellant was returned and HSIDC had the benefit of the monies all these years, HSIDC is directed to refund the amount paid for the plot with interest at 6% p.a. from 18.09.1998 till date. HSIDC is directed to make the payment within six weeks from the date of the order.

AMAN SEMI-CONDUCTORS (PVT.) LTD. Vs. HARYANA STATE INDUSTRIAL DEVLOPMENT CORPORATION LTD. & ANR.