By TIOL News Service

MUMBAI, NOV 22, 2014: THE Petitioner has its registered office in SEEPZ.

They have approached the Bombay High Court under Article 226 of the Constitution of India and pray that for the inaction of the Development Commissioner they should be allowed them to continue and utilize Unit No.101, SDF-IV, SEEPZ, Andheri (East), Mumbai 400 096.

Background:

++ An Application was made on 11th August 1995 for grant of permission for setting up an industrial unit for development of computer software and services and on 10th October 1995 a letter of approval was issued in favour of the Petitioners. The permission categorically stated that this letter is valid for a period of one year from the date of its issue for commencement of commercial production and will automatically lapse if an Application for the extension of the validity period of this letter of approval is not made before the expiry of the said period of one year. On 1st May, 1996 letter of possession in respect of this Unit ad-measuring 334 square meters was issued which was conditional upon execution of a lease agreement and levy of lease rent. The Petitioners executed a general bond on 1st August 1996 and thereafter there was an agreement executed on 14th October, 1996. The agreement is styled as tenancy agreement and was valid for period of five years from the first day of the month and year of possession at annual rent of Rs.98,530/-.

++ It is contended by the petitioner that upon the Special Economic Zones Act, 2005 coming into force, the Petitioners are not required to apply for an approval in terms of the provisions therein and that an existing Unit shall be deemed to have been set up in accordance with the provisions of this Act. It is then urged that a letter of approval shall be valid for five years from the date of commencement of production or service activity and it shall be construed as license for all purposes and to authorize operations and after completion of five years from the date of commencement of production the Development Commissioner may at the request of the Unit extend validity of the letter of approval for a further period of five years at a time.

++ That a tenancy agreement draft duly signed by the authorized representative of the Petitioners was forwarded as early as October 2001 but no action has been taken on the request of the Petitioners. In the meanwhile, the argument is that appraisal or progress reports have been duly forwarded which show that the Petitioners continued their business operations and particularly of export of software/information technology. The business therein is not dwindling or can by no stretch of imagination be termed as unsatisfactory performance. Conceding that in terms of this letter the Petitioners applied on 8th May, 2006 to the Development Commissioner and requested him to approve the projections and even execute a tenancy agreement, it is the inaction of the Authorities and threats of dispossession which according to the Petitioners enable them to approach this Court in writ jurisdiction. The argument, therefore, is that the Petitioners cannot be dispossessed or evicted when the Authorities have not taken any decision on their pending Applications. If the inaction of the authorities for all these years has resulted in the Petitioners continuing to occupy the premises and using it for their legitimate business activities then, the least that this Court should do is to direct the Authorities to take a decision on the pending request promptly and expeditiously. Until then the request is not to disturb the Petitioners occupation use and possession of the premises.

++ Reliance is placed upon the judgment of Supreme Court in the case of Bharat Steel Tools Limited &Anr. vs. State of Haryana &Anr. 1988 (3) SCC 478 to urge that whenever Applications of the present nature are made they ought to be dealt with and decided within a reasonable time.For all these reasons it is submitted that the Writ Petition be allowed.

Argument by the counsel for the Revenue:

++ The approval for commencement of production is from 1st October 1996 and that was valid for a period of five years. The validity expired and there is no renewal of the letter of approval thereafter. The Application for renewal is being made for the first time in 2013 & petitioners are aware of the fact that the continuance in possession and occupation confers them no legal rights. In the case of a public property any unilateral exercise cannot be countenanced is the submission. It is for the authorities to take an informed decision in accordance with law. The Petitioners cannot come to this Court and pray that any writ much less a prerogative one be issued in their favour . For all these reasons it is submitted the Writ Petition be dismissed.

The High Court made had the following observations with a sprinkle of some caustic words for the petitioner -

++ At the outset we must emphasize that this case is of a public property and vesting in the authorities for being held by them as Trustees of the Public. They cannot at their sweet will, whims and fancy take a decision to allot a property of this nature nor distribute or hand over it to anybody of their choice. Public property must be dealt with and disposed of in an open and transparent manner. That is by public participation. That is inviting all industries existing or proposed or those interested in setting up a Unit in the Industrial Zone to apply for an approval or permission in terms of the Special Economic Zones Act, 2005. Needless, therefore, to say that the ignorance of or inaction regarding continued occupation of a party like the Petitioners by public officials or authorities can never be countenanced and upheld. If anybody gets an impression that by inaction of these authorities any rights are created in their favour in public properties and lands then, that impression must immediately be removed. None can continue much less squat on public properties in this manner either by taking advantage of any inaction of the public bodies or statutory authorities or by colluding with them. We cannot defeat the mandate of Article 14 of the Constitution of India and the Constitution itself by upholding the request of the Petitioners and parties like them.

++ It is a settled legal position but requires reiteration nowadays because of the ignorance of litigants and those advising them that writ jurisdiction is not to be invoked by dropping an application in the High Court and treating the High Court as drop box . The High Court cannot pass an order directing any statutory Authority or the State to consider some representation or pending application/letter of the litigant invoking the writ jurisdiction unless that party establishes such a legal right. [ C. Jacob v. Director of Geology & Mining &Anr. AIR 2009 SC 264 cited]

++ It is a conceded position that both the letter of approval and the tenancy agreement were valid for a specified period. Thereafter, the letter of approval has to be renewed and renewal is a discretionwith the Development Commissioner or the competent Authority. He is not obliged to renew the approval initially granted. That can never be the mandate of such a law nor is the Parliament intending that the authority which has such discretion cannot scrutinize and verify the relevant applications or take into consideration the factors such as the performance of the Unit its economic and financial standing and viability etc. In the present circumstances and when it is conceded that after five years there is neither a valid letter of approval nor a valid and binding tenancy agreement then, we do not see any legal right in the Petitioners. Their continued occupation and use of the premises will not enable us to exercise our plenary powers and issue prerogative writs. The jurisdiction of this Court under Article 226 of the Constitution of India is extraordinary, discretionary and equitable. In these circumstances, we do not find any basis for the request made by the Petitioners.

++ The Petitioners reliance on the pending Applications and based on their annual performance report by itself does not create any legal right in their favour. The authorities have then explained this position and to get over the alleged inaction pointed out that the show-cause notices were issued to the Petitioners relating to non-submission of annual performance reports and nonpayment of rent etc. but they were under a legal misconception. Even if such notices have been received and some annual performance reports were forwarded prior thereto or thereafter or rent was paid and receipts were collected that does not mean that the Petitioners are possessing any right to continue in the premises.

++ It is conceded as noted above that so long as there is no valid tenancy agreement and in respect of the premises then all such pleas and requests for either grant or continuation of the letter of approval by themselves will not mean that the Petitioners have a lease in their favour to occupy and use the premises.Those have to be allotted to deserving industrial units.

++ Those Applicants and who are interested in establishing the Unit have to in terms of Rule 17 of the Special Economic Zones Rules, 2006 forward a proposal and in a specified form containing the relevant particulars. Thereafter these proposals have to be considered by an approval committee. If there is a decision taken to issue letter of approval that has to be in terms of Rules 17, 18 and 19. In such circumstances it is not as if the Units which are existing prior to the Act being enacted have any absolute right nor is it the claim.

++ The Proviso below sub section 1 of section 15 clarifies that an existing Unit is deemed to have been set up in accordance with the provisions of the Special Economic Zones Act, 2005. Such Units may not require approval under the Act but after the initial period is over they would have to subject themselves to the authority of the Development Commissioner. That is how the harmonious reading of these provisions would reflect the legislative intent. Therefore, in the absence of a tenancy agreement the Petitioners cannot seek any relief from this Court.

++ Further, there being no action or decision taken on the Applications does not mean that this Court should exercise its jurisdiction in favour of the Petitioners and that too belatedly. The initial letter of approval expired by its own force in 2001. Thereafter, beyond some correspondence there is nothing emanating from the authorities which would enable the Petitioners to argue and successfully that a letter of approval has been issued in their favour and the lease agreement must therefore follow. In such circumstances, we cannot utilize writ jurisdiction to force the authorities to pass any orders on the representation made by the Petitioners and to extend the letter of approval or to grant any fresh approval. In the given facts and circumstances we cannot also direct the authorities to execute a tenancy agreement in favour of the Petitioners. The Authorities must deal with the immovable property in accordance with the Special Economic Zones Act, 2005 and the constitutional mandate emerging from the Hon'ble Supreme Court judgment in the case of AkhilBhartiyaUpbhokta Congress vs. State of Madhya Pradesh & Ors. AIR 2011 SC 1834. That the authorities have not taken any decision on the pending Applications does not mean that the Petitioners can invoke the principle in Bharat Steel Tubes Ltd. either.

++ Prayer that the ad-interim order passed by this Court on 27th August 2013 should be continued for a period of eight weeks as to enable the Petitioners to either approach higher Court or to take an appropriate decision is opposed by Revenue. Having found that the Petitioners have absolutely no right, legal or constitutional, to approach this Court and invoke writ jurisdiction to perpetuate an illegal stay, we cannot permit the continuation of the ad-interim order. The request in that behalf is refused.

The Writ Petition is dismissed.

(See 2014-TIOL-2022-HC-MUM-CUS)