JUDGMENT
Rakesh Sharma, J.
1. Both these writ petitions have been filed by the same petitioner and involve same questions of fact and law, hence they are decided by a common order.
2. Heard Sri Shashi Nandan, learned Senior Advocate appearing for the petitioners , Sri B.K. Narain, learned Standing Counsel appearing for respondents No. 1 & 2 and Sri V.B. Upadhyay, learned senior Counsel for respondent No. 3 (respondent No. 4 in W.P. No. 8197 of 2007).
3. Through these writ petitions, the petitioners M/s Midi Extrusions Ltd. claiming itself to be a Public Limited Company has assailed the order dated 24.3.01 and 28.2.02 cancelling the licence/allotment of Industrial plot No. B-4 situate in Industrial Area, Site No. V. Surajpur in district Ghaziabad. In addition to this, the petitioner has claimed restoration of the said industrial plot and also cancellation of allotment made to M/s Precisions Pipes and Profiles Company Ltd., respondent No. 3 in whose favour the aforementioned plot was subsequently finally allotted on 12.9.06 after making some temporary allotment to some other parties. Presently, the aforementioned plot has been leased out to respondent No. 3.
4. It emerges from the record that on 29.10.88, the U.P. State Industrial Development Corporation Ltd. (UPSIDC), a State Government Corporation incorporated for industrial development of the State of U.P. had allotted an Industrial plot C-8 Kasna II, Ghaziabad measuring about 14482 Sq. mts. in favour of the petitioner. Later on, on the request of the petitioner, it was allotted another industrial plot which is in dispute, that is, plot No. B-4 Surajpur industrial area site No. V in lieu of plot No. C-8 Kasna on 28.12.89. The petitioner was a licensee of the aforesaid industrial plot for which a specific agreement was executed between the parties on 25.1.90. The plot was covering an area of 17266 Sq. mts. A copy of a written agreement containing various terms and conditions has been placed on record of both the petitions. On 18.8.93, the petitioner had paid Rs. 24,01,939/- as demanded by the Corporation. Later on 24.3.94, the U.P.S.I.D.C. has refunded the excess sum to the petitioner after finalisation of the accounts to be deposited by the petitioner in respect of the licence agreement. The petitioner which was earlier a private limited company was changed to a public limited company on 15.2.96.
5. As per the learned Counsel for the petitioner, the basic infrastructure facilities were not provided by the U.P.S.I.D.C. and as such the petitioner had to set up its industrial unit in Hosiery Complex in the adjoining Noida area. The petitioner could not construct the building and establish its industry on the plot allotted to it. The U.P.S.I.D.C. sent a notice on 31.7.98 to the petitioner for setting up the industry. In response to this letter, the petitioner claimed that he had submitted building plan for approval of U.P.S.I.D.C. and requested to execute the lease deed. According to the petitioner, the petitioner was asked to deposit Rs. One lakh towards the processing fee for approval for recording the change of status of the company from a private limited to public limited company. As per the learned Counsel for the petitioner during the period from 93 to Jan. 2001, the petitioner has been pursuing the concerned authorities of U.P.S.I.D.C. to sanction the plan and execute the lease deed to enable it to commence and complete the construction of industrial unit. However, without taking into account the request of the petitioner, the U.P.S.I.D.C. issued a letter on 24.3.01 cancelling the licence of the petitioner over industrial plot. The petitioner sought revocation of the said order but he was asked to deposit the restoration fee amounting to Rs. 615013.30p. However, the petitioner gave his consent for payment of restoration fee imposed on him and requested for enlargement of project implementation period from two years to three years so that necessary machinery and equipments may be imported and installed at the site. Another letter dated 24.7.02 had been sent by the U.P.S.I.D.C. to the petitioner enhancing the restoration levy to Rs. 12,30,026.60p. The time frame was also reduced to one year only to complete the project. The petitioner requested the authorities to restrict: the demand of levy to Rs. 6,15,013.30p. and not to unnecessarily enhance the same. The petitioner’s written requests were turned down on 17.9.02 indicating in the letter of refusal dated 17.9.02 that the U.P.S.I.D.C. has already allotted the plot to some other party, that is, respondent No. 3 in the earlier petition on 24.8.02. The petitioner has approached this Court by filing a writ petition No. 52573 of 2002 challenging the order of cancellation of allotment of plot vide letter dated 24.3.01 and finally rejecting the restoration application on 28.7.02 and 17.9.02. An order of this Court granted indulgence and ordered the parties to maintain status quo. The petitioner has challenged the subsequent allotment order passed in favour of respondent No. 4 branding it illegal, arbitrary and malafide. The petitioner has further raised the grievance that M/s Precision Pipe and Profiles Company is raising the construction over the disputed plot without any authority.
6. Sri B.K. Narain, standing Counsel for respondents No. 1 & 2 has resisted both the writ petitions by filing counter-affidavit According to the U.P.S.I.D.C, the petitioner was merely a licencee over the plot in dispute. The terms and conditions of the allotment were spelt out in the allotment order dated 10.7.88 and other letter dated 29.10.88 and the written agreement executed between the parties on 25.1.90 containing various clauses , specially Clauses 4(e), 5, 13 and 13A were read out and highlighted before the Court. It was categorically indicated that the petitioner must raise construction of the building within nine months and commence manufacturing process within two years. The petitioner was sent written notices from time to time by U.P.S.I.D.C., i.e., 31.7.98, 21.7.1992, 2.8.2000, 1.11.2000, 13.12.2000, 21.5.01, 1.6.01, 17.8.01, 17.9.01, 3.1.02, 13.3.02, 3.4.02 and finally on 24.7.02 to complete the construction and commence production. Learned Standing Counsel for the respondents No. 1 & 2 has taken the Court to these notices which have been placed on record of these writ petitions. A perusal of these notices like notices dated 13.1.01, 24.3.01, 21.5.01, 1.6.01, 17.8.01, 17.9.01, 3.1.02 and finally on 24.7.02 shows that they were sent: to ensure compliance of instructions and fulfil the terms and conditions contained in the agreement. On various occasions, it was made clear to the petitioner that he must complete the construction and commence production at the industrial site within the stipulated period given in the agreement of licence. He was also duly informed that vide the terms and conditions contained in Clauses 13 and 13(A), the petitioner must seek approval in writing of U.P.S.I.D.C. before changing the status and character of the company. Prior written permission of the corporation U.P.S.I.D.C. was a condition precedent as per the terms and conditions of the licence. The petitioner had failed to deposit the requisite amount for change of status of the company. It had also failed to deposit the restoration levy after formal cancellation of the allotment. After revocation of licence issued vide order dated 24.3.01, the petitioner ceased to be a licensee. The petitioner has breached the conditions of allotment and he had not fulfilled the conditions imposed upon him by the U.P.S.I.D.C. as per the terms and conditions contained in the agreement and various letters issued from time to time and the petitioner’s allotment was rightly cancelled on 24.3.01. The petitioner had failed to fulfil the conditions imposed for revocation of licence or cancellation order. Therefore, U.P.S.I.D.C. had no other option except to refuse revocation of licence and it was within its right to allot the plot to other eligible party.
7. The plot has now been allotted to M/s Precision Pipes and Profiles and the petitioner has ceased to be a licensee of the U.P.S.I.D.C. with effect from 24.3.01. The writ petition is wholly unfounded.
8. Sri V.B. Upadhya, learned senior Counsel has put forth the version of respondent No. 4. According to him the U.P.S.I.D.C. has allotted the aforementioned industrial plot on 5.5.06, 12.9.06 and 25.9.06 to respondent No. 4 and the required amount of about Rupees 45 lakhs has already been deposited. A formal lease deed has been executed between the U.P.S.I.D.C. and M/s Precisions Pipe and Profiles i.e., respondent No. 4 and it has also been given the possession of the industrial plot on 16.12.06. As per the learned Counsel, the contesting respondent No. 4 has invested about Rupees 615 lakhs in the furtherance of the establishment of the industrial unit which is going to manufacture parts to be used in Honda Motor Cycles. The construction has commenced on 2.1.07 but due to continuance of the interim order granted by this Court, further construction could not be raised on the site. M/s Precision is now a lessee in possession after depositing the whole amount with U.P.S.I.D.C. The continuance of this litigation at the instance of the petitioner is causing unnecessary harassment to respondent No. 4 which is a genuine industry and is causing legal injury to it.
9. We have heard the learned Counsel for the parties and perused the record. The pith and substance of this case is revocation of licence of the petitioner for non-fulfilment of terms and conditions contained in the written agreement of licence executed between the parties. Here is a case where the petitioner has violated the terms and conditions contained in the allotment letter and the written agreement executed between the parties on 25.1.90. It was stipulated in various conditions of the agreement that the petitioner should have started construction work of the factory building within a period of nine months from the date of allotment. The licensee was required to completely finish the factory building within a period of 24 months from the date of agreement, i.e., 25.1.90. The conditions spelt out in Clause 4(e) and 5 are specific and clear. From the above chronology of events discussed in the foregoing paragraphs, it is evident that the petitioner has failed to fulfil the terms and conditions contained in the agreement. It is a case of breach of contract. It is noteworthy that several letters as Indicated above were written to the petitioner to complete the construction within the specified period, deposit the requisite amount for permitting change in the character and status of the company taking note of the same and for depositing the restoration levy as per the policy of the Corporation. Admittedly, the petitioner did not deposit the required amount, restoration levy and did not complete the formalities. The petitioner’s licence was cancelled after sending him notice. Several letters were written to it for completing the necessary formalities and discharging its burden under the agreement, on failure to do so, the U.P.S.I.D.C. has revoked the licence ,cancelled the allotment and later on refused to restore the allotment. We find no illegality or infirmity in the decision making process. We have noticed the lack of bona fide in the attitude of the petitioner as right from allotment of plot in 1988 till 24.3.01 for long 13 years, he had failed to raise construction over the plot. The land in dispute must have been acquired from the poor farmers of the area after giving them meagre compensation. Such activities permitting undue illegal enrichment and speculation design cannot be permitted.
10. Moreover, this writ petition arises from alleged violation of agreement. Such a dispute cannot be raised by filing the writ petition. The writ petition in a contractual matter is not entertainable. The matter is well settled that the dispute relating to contract cannot be agitated under Article 226 of the Constitution of India. This Court cannot enter into the area of contractual obligation between the parties and issue direction at the instance of a contracting party except in few exceptional
11. In Radhakrishna Agarwal and Ors. v. State of Bihar and Ors. the Hon’ble Supreme Court held that no writ or order could issue under Article 226 in contractual cases to compel the authorities to remedy a breach of contracts pure and simple. In Kerala State Electricity Board and Anr. v. Kuriene Kalathil and Ors. it was held by the Apex Court that contractual or commercial activites of a statutory body need not necessarily raise issues of public law and the disputes arising from such activities must be settled according to principles of law of contract. In National Highways Authority of India v. Ganga Enterprises and Anr. it has been held that disputes relating to contracts cannot be agitated under Article 226. In Orissa State Financial Corporation v. Narsingh Ch. Nayak and Ors. it was held that the High Court cannot enter the area of contractual obligations between the parties and issue directions annulling an existing contract and introducing a new contract in its stead. In State of U.P. and Ors. v. Bridge & Roof Co. (India) Ltd. it was held that the High Court was justified in not going into the dispute as it involved interpretation of terms of the contract. In Bareilly Development Authority and Anr. v. Ajal Pal Singh and Ors. , it was observed that when State or other authority’ within the meaning of Article 12 enters into ordinary contract with private persons, parties are governed by the terms of the contract and the aggrieved part is not entitled to seek redress under Article 226 for breach of contract.
12. In Indu Kakkar v. Haryana State Industrial Development Corporation Ltd. and Anr. , the Hon’ble Supreme Court has held that parties are bound by the terms incorporated in the agreement and in case of violation of any of the conditions, the allotment is bound to be cancelled. In the instant case, the licence itself has a large number of conditions which were binding on the petitioner also. As per the terms of Clause 4(e), the construction had to start by the petitioner within a period of six months from the date of grant of licence and had to commence the manufacturing and production within a period of twelve months. As per clause 9 of the said licence, it was provided that the lease would be executed by the licensee within thirty days of the receipt of the intimation in this regard from the Grantor and in case of default, the Grantor shall have the right and power to re-enter upon and resume possession of the said land and every thing thereon and thereupon this agreement shall cease and terminate the agreement itself. In view of the provisions of Clause 13, a licence would automatically stand revoked in case of any change in the constitution of licensee, partnership firm or private limited company as on the date of execution of the agreement without prior approval in writing of the Grantor.
13. In the instant case, the petitioner did not ensure the compliance of the terms incorporated in the said agreement. Private Limited Company got its status changed to a public limited company without prior approval of the Grantor. The lease deed could not be executed inspite of expiry of the period of more than 11 years.
14. We have also considered another aspect of this matter that the petitioner was merely a licensee. Such matters are governed by the provisions of Section 63 of the Indian Easement Act. In the present case, the licence was not renewed after the expiry of the stipulated period. The licence to remain on plot came to an end on 24.3.01.Legally speaking, the petitioner became a trespasser and had no right to retain possession of the industrial plot beyond the period of licence vide Narinder Singh and Ors. v. Kishan Singh and Ors. , Ram Sarup Gupta v. Bishun Narain Inter College and Ors. & Sri Indra Kumar v. Union of India and Anr. 2007 (25) LCD 943. Inaction on the part of the petitioner for such a long period disentitles it for any equitable relief. The respondent No. 5, as is evident from the above, has spent a large amount after execution of the lease deed. The said respondent is a bonafide purchaser for double consideration. The plot cannot be restored to its original form. The facts of the case do not warrant any interference in writ jurisdiction. A formal lease deed was yet to be executed after completing necessary required formalities indicated in the letter of allotment and the agreement. No legal or fundamental right of the petitioner has been infringed for filing this writ petition under Article 226 of the Constitution of India.
15. The petition is devoid of merit and is accordingly dismissed.