Madras High Court
M/S.Pioneer Engineering Works vs The Government Of Tamil Nadu on 16 December, 2014
Author: C.S.Karnan
Bench: C.S.Karnan
IN THE HIGH COURT OF JUDICATURE AT MADRAS
CAV ON:30.07.2014
DATED:16.12.2014
CORAM
THE HONOURABLE MR.JUSTICE C.S.KARNAN
W.P.No.12298 of 2003
M/s.Pioneer Engineering Works
rep.by it's Proprietor S.S.Perumal
having office at No.2, Puliambedu Village
Velappanchavadi, Chennai-600 077 ... Petitioner
vs.
1.The Government of Tamil Nadu
rep.by it's Commissioner and
Secretary to Government
Revenue Department
Fort.St.George, Chennai-600 009
2.The Special Commissioner and
Commissioner of Land Reforms
Chepauk, Chennai-600 005
3.The Assistant Commissioner of Urban
Land Tax and Competent Authority of
Urban Land Ceiling
Poonamallee Area
No.5, Sannadhi Street, Poonamallee
Tiruvallore District ... Respondents
PRAYER: Writ Petition filed under Article 226 of the Constitution of India for a Writ of Certiorarified Mandamus to call for the records of the third respondent relating to his order in his proceedings Na.Ka.E/2677/95, dated 01.08.2002 ordering to acquire the exempted vacant land in Survey No.13/2A of Noombal Village, measuring an extent of 5450 sq.meters under the provisions of Section 9(5) of the Principal Act, quash the same in sofar as the petitioner is concerned and to direct the respondents to declare under Section 4 of the Repealing Act (Act 20 of 1999) that all proceedings to acquire the excess vacant land in view of the fact that possession had not been taken over by the Government or by any authority as abated.
For Petitioner : Mr.S.Thankaswamy
For Respondents : Mr.M.S.Ramesh,
(Addditional Govt. Pleader)
-----
O R D E R
The petitioner firm was an Industrial undertaking, which was engaged in the manufacturing of Biogas Plants, Stores and Machine Components under 20 Point National Schemes, held lands in Survey No.13/2A of Noombal Village, measuring an extent of 7450 sq.meters and Survey Nos.8/1 and 8/2 of Vada Agaram Village, measuring an extent of 242 sq.meters in Madras Urban Agglomeration and consequent on the introduction of Tamil Nadu urban Land (Ceiling and Regulation) Act, 1978, the Company filed Return under Section 7(1) of the said Act as provided therein and sought for exemption to hold the lands under Section 21(1)(a) of the said Act for the purpose of setting up of an Engineering Works and an Industrial School in it's letter dated 29.10.1988, which was acknowledged by the first respondent vide letter dated 15.12.1988 and processed the application with reference to the norms prescribed in consultation with the Director of Industries and Commerce. The third respondent issued a notice, under Section 9(4) as well as draft statement under Section 9(1) of the Act vide proceedings, dated 30.09.1989, calling for objection of the returnee towards the determination of the entitlement area and declaration of excess vacant land and in the meanwhile the Government in G.O.Ms.No.2212, dated 26.10.1990 issued orders under Section 21(1)(a) of the Act in favour of the Company by granting exemption to hold an area of 5450 sq.meters as excess vacant land for the industrial purposes subject to the following conditions:
i. The land exempted should be fully utilized for the specified industrial purposes only within a period of two years from the date of grant of exemption;
ii. The land exempted should not be transferred by way of sales, gift, mortgage, lease or otherwise;
iii. The Company may raise a loan from any banking or other financial institution by mortgaging without possession of the land exempted.
iv. The land, which the Company is entitled to hold as per the provisions of the Tamil Nadu Urban Land (Ceiling and Regulation) Act, 1978 (Tamil Nadu Act 24 of 1978) should not be sold. In the event of the Company being subjected to financial or other strains and the sale of such entitled land in lieu of due compensation before selling such land;
v. The Company should intimate to the Government through the Commissioner of Land Reforms, Chepauk, Madras-5, the progress of the works once in six months without fail;
vi. In case it is discovered at a later date that the present exemption was granted by the Government either on mistake of facts or due to suppression of some facts the exemption granted shall be withdrawn forthwith; and vii. In case, the Company violates any of the above conditions, the Government will withdraw the exemption in exercise of the powers conferred under sub-section (2) of Section 21 of the said Act and no compensation shall be payable to the Company in respect of any building or structure constructed or erected or other improvement effected on such land.
2. The petitioner firm further submit that despite the fact of making strenuous efforts due to financial difficulties and other various set backs, the Company could not utilise the exempted land fully for the said industrial purpose within the period of two years and so applied for extension of time of another three years to utilise the said land vide letter dated 19.12.1994 addressed to the third respondent, who vide letter dated 26.12.1994 recommended to grant extension of time for two years duly inspected the site and noted the actual position. Instead of granting necessary extension of time, the first respondent, vide letter dated 18.05.1995, issued a show-cause notice calling for explanation of the Company within 15 days as to why the exemption granted in G.O.Ms.No.2212, dated 26.10.1990, should not be withdrawn. However, the petitioner firm sent an application vide letter dated 03.06.1995 to the first respondent requesting to grant extension of exemption for another two years for utilizing the exempted land and also sent a copy of the application for exemption through the General Manager District Industries Centre on 22.01.1996. Despite the fact of issuing several reminders, no order was passed by the first respondent granting extension of time of exemption to utilise the land for the purpose for which the exemption was granted within the period of two years. Since the Company incurred heavy loss due to the fact of the theft of the machineries purchased for the said purpose and financial strains as well as delay in getting extension of time of exemption, the Company parted with a portion of the exempted land as well as the entitlement area for setting up of an Industrial School as well as a Matriculation School and accordingly sought for exemption to hold the excess vacant land for the said purpose under Section 21(1)(a) of the Act vide letter dated 12.05.1997.
3. The petitioner firm further submits that although the Government vide letter dated 10.07.1998 had examined the proposal in consultation with the second respondent regarding the change of utilisation of the excess vacant land for the alternative purpose of setting up of School instead of utilising the said land for the named industrial purpose for which the exemption was granted, the Government was not inclined to consider to grant the exemption for the reason that the Company did not obtain the permission of the Director of School Education to establish the School and that the purpose was also a violation of the condition of granting the exemption and so the Government reiterated their earlier stand and issued the show-cause notice as to why the exemption granted should not be withdrawn and requested the Company to offer its explanation within 15 days from the date of receipt of the said letter. The petitioner firm, vide letter dated 21.07.1998, explained that as the request for extension of the exemption for another two years applied for had not been received for quite a long period despite the fact of several reminders and due to the financial difficulties, the Company was not in a position in utilizing the said lands within the time granted for the purpose of granting the exemption and so the Company parted with the portion of the exempted land to a partnership Firm to establish an Industrial School in the name of Indian Seafarers Training Academy and entrusted a portion of the entitlement area of the land to a Trust created for locating a Matriculation School and sought the permission of the Government for the change of utilization of a portion of the exempted lands to run industrial School under Section 21(1)(a) of the Act, for which also no reply was received and so in anticipation of getting exemption of the Company created the Trust and started to run an Industrial School and also a School upto 7th Standard in a portion of the land recognized by Government entitled to hold by the Company for which no permission to start the School is required to be obtained from the Director of School Education. As the petitioner firm desired to utilize the exempted land for some other public purpose, namely, to run the Industrial School and Matriculation School, the Company applied for fresh exemption under Section 21(1)(a) of the Act. Since no reply had been received from the Government, the petitioner firm established a Matriculation School by putting up of necessary building in the entitlement area and entrusted the Management and Administration to a Public Trust in the name of Pioneer Educational and Charitable Trust to locate the School in the portion of entitlement area of land held by the Company and also made arrangement to start an Industrial Training School in the name and style of 'Indian Seafarers Training Academy' to impart training for student in the field of Pre-Sea Training towards deck, engine and Saloon (Catering) Department in the ship, in the portion of the exempted land held by the Company. The third respondent inspected the site and noted the functioning of the Matriculation School and the Indian Seafarers Training School and directed the Company to produce authenticated records towards the functioning of the institutions as evidenced by his letter, dated 27.09.2001.
4. The petitioner firm further submits that taking into consideration of the actual position of the exempted extent of land in the possession of the Trust and the partnership firm in the name and style of 'Indian Seafarers Training Academy' by locating and running the business of Matriculation School and the Industrial Training School and the functioning of the said institutions in the portion of the area is also in the interest of the general public, it is expedient and incumbent on the part of the Government to reconsider to grant exemption to hold the exempted land by the Trust and the Partnership Firm. Without granting exemption in the name of the Trust or even to grant extension of exemption period in the name of the Company has been used to give generally for ten years in respect of similar cases, the Government in G.O.Ms.No.107, dated 01.03.2002, ordered to acquire the said land under the provisions of section 3(1)(b) of the Tamil Nadu Urban Land (Ceiling and Regulation) Repeal Act 20 of 1999. Pursuant to the said Order, the third respondent sent a notice to the Company, vide letter dated 22.04.2002, stating that since the exempted lands had not been utilized for the purpose for which exemption was granted, the Government withdrew the exemption and so the Company has been directed to prefer the objection, if any, to pursue action under Section 9(5) of the Tamil Nadu Urban Land (Ceiling and Regulation) Act, 1978 and to take possession of the said land. The petitioner firm filed their objection with the third respondent as well as addressed to the first respondent with a request to reconsider the action from taking possession of the exempted land withdrawing the exemption arbitrarily without considering the extenuating request of the Company to extend the period of extension for utilization of the exempted land or to reconsider the request to grant fresh exemption to the Trust, which has been given a portion of the entitlement area to locate the School and to put to use of a portion of the exempted land for locating an industrial School and requested to drop the proposal to withdraw the exemption in view of the provisions of the Repeal Act and the earlier request of the Company to grant fresh exemption in favour of the Trust and the Partnership Firm under the provisions of Section 24 of the Principal Act, would have been considered by the Government. Even though the said representation has been received by the first respondent, no reply has been received from the first respondent, but the third respondent issued orders vide proceedings dated 01.08.2002 to acquire the said land under the provisions of Section 9(5) of the Repeal Act, namely, Tamil Nadu Urban Land (Ceiling and Regulation) Act, 24 of 1978, which is a functus officio. The said order, dated 01.08.2002, passed by the third respondent is illegal, improper, misconceived, colourable exercise of powers and against avowed object and provisions of the Repeal Act, 20 of 1999.
5. The respondents have filed their counter affidavit stating that the petitioner firm filed their return under Section 7(1) of the Tamil Nadu Urban Land (Ceiling and Regulation) Act, 1978 Tamil Nadu Act 24 of 1978 (hereinafter referred to as 'the Act') on 04.11.1988 for the urban land comprised in Survey No.13/2A, measuring an extent of 1.85 Acres in Noombal Village and they requested to grant exemption under Section 21(1)(a) of the said Act for the lands held by them in Survey No.13/2A of Noombal Village to start Engineering Works and an Industrial School. After considering his request, the first respondent vide G.O.Ms.No.2212, dated 26.10.1990, granted exemption to hold the excess vacant land measuring 5450 sq.meters, after allowing 2000 sq.meters towards entitlement as follows with certain conditions:
1Total extent of lands held 2692 sq.meters 2 Extent of Agricultural land Nil 3 Built up area and appurtenant area 242 sq.mts 4 Total extent of non-vacant land 2242 sq.mts 5 Total extent of vacant urban land 5450 sq.mts 6 Entitlement 2000 sq.mts 7 Total extent of vacant urban land (7692-2242) 5450 sq.mts The first respondent granted two years time to utilize the excess vacant land. As the petitioner firm had not utilized the excess vacant land within a period of two years i.e., 25.10.1992, the first respondent issued show-cause notice to the petitioner firm vide letter dated 18.05.1995 and they gave reply on 03.06.1995. On 12.05.1997, the petitioner firm requested the first respondent to grant permission to use the lands for educational purposes instead of industrial purposes. Since they have not obtained prior permission to run the school, the first respondent again issued a show-cause notice, on 10.07.1998. It was found that the petitioner firm was using the land for running a school instead of industrial purposes for which the exemption was granted. Therefore, the first respondent, vide G.O.Ms.No.107, dated 01.03.2002, withdrawn the exemption granted in G.O.Ms.No.2212, dated 26.10.1990 and ordered to acquire the excess vacant land measuring an extent of 5450 sq.mts in Survey No.13/2A of Noombal Village as per Section 3(1)(b) of the Tamil Nadu Urban Land (Ceiling and Regulation) Repeal Act, 1999 (Tamil Nadu Act 20 of 1999) (hereinafter called as 'the Repeal Act'). The third respondent vide proceedings, dated 01.08.2002, passed orders under Section 9(5) of the Tamil Nadu Act 24 of 1978 Act to acquire the excess vacant land measuring 5450 sq.mts, in Survey No.13/2A and the same was served on 27.08.2002. The final statement under Section 10(1) of the said Tamil Nadu Act 24 of 1978 was issued in C/2677/95, dated 17.03.2003 and served on 25.03.2003. In such circumstances, they have filed this writ petition.
6. The respondents further submit that the petitioner firm themselves has admitted that it is unable to use the land for industrial purposes for which exemption was granted and had used the land for running a school. The exemptee could have put forth the difficulty they faced and could have applied for permission for change in activity. Instead of using the land for industrial purpose for which exemption was granted, the petitioner firm changed the utilization from industrial purpose to educational purpose without prior permission from the first respondent and thereby violated the condition laid down in the exemption order. The petitioner firm stated about their inability to use the land for industrial purposes and had requested for change of utilization to educational purpose instead of industrial purpose. Exemption was granted under Section 21(1)(a) of the said Act for utilizing the land for industrial purpose and they changed the usage of the land from industrial to educational purpose without getting prior orders from the Government. The petitioner firm admitted that they have parted with a portion of the exempted land to a partnership firm to establish an industrial school in the name of Indian Seafarers Training Academy and also entrusted the entitlement area to a Trust named Pioneer Educational and Charitable Trust to a start a matriculation School. The petitioner firm failed to utilise the land for industrial purpose and changed the line of activity from industrial use to Educational purpose. Section, they transferred the land to a partnership firm for establishing an industrial school and a portion to a Trust for running a matriculation school. These facts are clear violation of condition laid down in the exemption order wherein the first condition is that the land should be fully utilized for specified industrial purpose within a period of two years and secondly that the exempted land should not be transferred by way of sale, gift, mortgage, lease or otherwise. The first respondent rightly passed orders withdrawing the exemption granted in view of the above reasons.
7. Further, the respondents submit that the petitioner firm stated above the orders issued by the first respondent and the orders of the third respondent regarding the acquisition. It is not correct to state that the order issued by the respondents is illegal, improper and misconceived. The orders issued by the respondents are as per the provisions of the Act and it was on the request by the petitioner firm. The first respondent granted exemption to hold excess vacant land for industrial purposes. Any change of utilisation of the exempted land by the petitioner firm for any purpose other than for industrial purposes, amounts to violation of condition and hence the exemption granted is liable to be withdrawn and the excess vacant land will be acquired under the provisions of the Act. The Repeal Act 20 of 1999 empowers the first respondent to withdraw the exemption granted in case of exemptee violating the conditions and proceeding further in acquiring the land under the provisions of the Act. The cases for which exemptions granted under Section 21(1) and any action taken there under will not be affected by the Repeal of the Principal Act i.e., (Tamil Nadu Act 24 of 1978). The order passed by the third respondent is as per the provisions of Section 3(1)(b) of the Repeal Act. The Repeal of the Principal Act will not affect the validity of the exemption granted under Section 21(1) and any action taken thereunder. This empowers the first respondent to withdraw the exemption granted if any exemptee violates the conditions specified and to take action to acquire the excess vacant land and Section 3(2) and 4 of the Repeal Act have no relevance to this case.
8. The respondents further submit that Section 4 of the Repeal Act shall not apply in this case. The cases that are pending before any Court, Tribunal or any authority at the time of repeal only gets abated under Section 4 of the Repeal Act. In this case, exemption was granted by the Government during 1990. Since the Company has not utilized the exempted land for the industrial purpose, the exemption order passed by the first respondent was withdrawn and the excess vacant land was ordered to be acquired as per Section 3(1)(b) of the Repeal Act. The cases for which exemption are granted will not come under Section 4 of the Repeal Act. They are covered by the saving clause provided under Section 3(1)(b) of the Repeal Act. The object of providing a saving clause under Section 3(1)(b) in the Repeal Act is to protect the lands that have been exempted and to avoid the exemptee escaping from the clutches of the Act. As per Section 3(1)(b) of the Repeal Act, the Repeal Act shall not affect the validity of the exemption granted under Section 21(1) of the said Tamil Nadu Act, 24 of 1978 and any action taken thereunder. Hence, the orders passed by the respondents are in accordance with the provisions of the Act.
9. Further, the respondents submit that Section 21(1) of Tamil Nadu Act 24 of 1978 is saved as per Section 3(1)(b) of the Repeal Act and hence the orders issued by the first respondent herein withdrawing the exemption and subsequent orders issued by the third respondent under Section 9(5) of the Act to acquire the excess vacant land is correct. Sub-Section (1) and (2) of Section 21 are interconnected and interdependent. The words action taken thereunder includes all action taken which includes withdrawal of exemption and proceeding further for acquisition of the land. The orders issued by the respondents are as per the provisions of the Act. The petitioner firm quoted the provisions of Section 3(2) of the Repeal Act, which shall not apply to this case. In this case, exemption was granted and hence it is saved under Section 3(1)(b) of the Repeal Act. As the exemption is saved, all the provisions in the Principal Act will apply to this case as if the Act had not been repealed and hence in case of violation of conditions specified, the exemption can be withdrawn. Hence, the orders have been passed as per the provisions of the Act. It is implied from the words in Section 3(1)(b) of the Repeal Act, which states 'any action thereunder', which also includes withdrawal of exemption and subsequent action taken to acquire the excess vacant land. The petitioner firm have not utilized the land for educational purpose without prior permission either from Education or Revenue Department. Further, transfer of any excess vacant land, after the commencement of the Act is null and void, as per Section 6 of the Act. Hence, the orders passed by the first respondent withdrawing the exemption granted is correct.
10. The respondents further submit that the first respondent has rejected the request of the petitioner firm to use the land for educational purpose. They, instead of getting prior permission from the first respondent regarding change of line of activity of the utilisation of the exempted land, had started to utilise the land for educational purpose and then informed the first respondent, which is gross violation of condition as per the petitioner firm applied for exemption and agreed to the condition that the land has to be used only for industrial purpose. That apart, prior permission was not obtained from Education Department for running the School and hence the order passed by the first respondent is correct. The first respondent passed orders as per the provisions of the Repeal Act. When the exemption granted is not affected by the Repeal Act, the conditions imposed therein should not also be violated. Further, the Principal Act has not been totally repealed. Since the Repeal Act shall not apply to the cases wherein possession of the excess vacant land had been taken and to the cases for which exemption was granted, the provisions of the Principal Act will apply to these cases as if the Act has not been repealed. In this case, exemption was granted and hence it is saved under Section 3(1)(b) of the Repeal Act. Section 4 of the Repeal Act cannot be applied in this case as there is no order or case pending before this Court or Tribunal or any authority as on the date of commencement of the Repeal Act on 16.06.1999. As per the Repeal Act, the Principal Act, namely, the Tamil Nadu Act 24 of 1978 was not fully scrapped. As per Section 3(1)(a) of the Repeal Act, the repeal of the Principal Act shall not affect the cases wherein possession of excess vacant land had been taken over. A saving clause has been provided under Section 3(1)(b) of the Repeal Act to protect the lands for which exemption was granted under Section 21(1). Therefore the orders issued by the respondents are as per the provisions of the Act and hence the respondents pray to dismiss the writ petition.
11. The highly competent counsel Mr.S.Thankasamy, appearing for the petitioner submits that the petitioner company is functioning under the twenty point National Schemes and manufacturing machine components, Biogas plants etc., at land situated in Noombal Village comprised in Survey No.13/2A, to an extent of 7450 Sq.meters, including survey Nos.8/1 and 8/2 to an extent 242 Sq.meters. The petitioner company had filed petition under section 7(1) of the Tamil Nadu Urban Land (Ceiling and Regulation) Act, 1978 and sought exemption to hold the lands for the purpose of setting up of an engineering works and an Industrial School. The 1st respondent, after consultation with the Director of Industries and Commerce, the 3rd respondent had issued a draft statement calling for objections. In the meanwhile, the Government had issued in Government Order dated 26.10.1990 and granted exemption to hold an area of 5450 Sq.meters, as excess vacant land for the Industrial purpose after imposing several conditions. As per the conditions, the petitioner has fully utilized the said land without making any encumbrance over the said property. The same was communicated to the 2nd respondent herein.
12. The very competent counsel further submits that due to financial difficulties and other set backs, the Company could not utilize the exempted lands fully within the stipulated period of two years for the said Industrial purpose. So, the Company made another application to the 3rd respondent for extension of time of another three years to utilize the said land. The 3rd respondent also recommended the same after inspecting the current position of the petitioner's company. The 1st respondent had issued Show Cause Notice to get explanation from the Company. However, the 1st respondent had not passed any orders within the reasonable period. Actually, the petitioner company parted with a portion of the exempted land as well as the entitlement area for setting up of an Industrial School as well as a Matriculation School and accordingly sought for exemption to hold the excess vacant land for the said purpose.
13. Further, the company decided to utilize the exempted land for some other public purpose namely to run the Industrial School and Matriculation School. Hence, fresh application was submitted for exemption. In the meanwhile, the company established a Matriculation School after raising superstructure the management and administration in the name of the petitioner's educational and Charitable Trust. The 3rd respondent had also inspected the premises and confirmed the functioning of the matriculation school. Under the circumstances, the 1st and 3rd respondents have issued proceedings to acquire the said lands under the Tamil Nadu Urban Land Ceiling Act, in their proceedings dated 01.08.2002 which is prejudiced to the petitioner's Educational and Charitable Trust.
14. The learned Additional Government Pleader Mr.M.S.Ramesh, appearing for the respondents submits that the petitioner has filed return Under Section 7(1) of the Tamil Nadu Urban Land Ceiling Act to an extent of 1.85 acres, situated at Noombal Village and he had requested to grant exemption to start Engineering works and Industrial School. The same was considered and he was granted exemption to hold the excess vacant land measuring 5450 Sq.meters, after allowing 2000 Sq.meters, towards entitlement with certain conditions. The 1st respondent had granted two years time to utilize the excess vacant land, which is one of the main condition for granting exemption order dated 26.10.1990. Thereafter, the petitioner made request to the 1st respondent to grant permission to use the same land for educational purposes instead of industrial purpose. The petitioner, without obtaining prior permission, from the competent person had run the school. Hence, the 1st respondent had issued in G.O.Ms.No.107, dated 01.03.2002 has withdrawn the exemption granted in G.O.Ms.No.2212, dated 20.10.1990 and further ordered to acquire the excess vacant land measuring an extent of 5450 sq. meters. Accordingly, the 3rd respondent acquired the said land and communicated it to the petitioner on 25.03.2003. Under the circumstances, the above writ petition has been filed. Hence, the very competent counsel entreats the Court to dismiss the writ petition.
15. On considering the facts and circumstances of the case and arguments advanced by the learned counsel on either side and on perusing the typed set of papers, this Court is of the view that the petitioner was granted exemption by the 1st respondent as per G.O.Ms.No.2212, dated 26.10.1990, with certain conditions. One of the condition was that the petitioner should utilize the excess vacant land within two years. The same has not been complied with. Hence, the 1st respondent had issued Show Cause Notice and after receiving explanation, the exemption order was withdrawn by way of G.O.Ms.No.107, dated 03.01.2002. The earlier exemption order granted in favour of the petitioner was to enable him to run the educational institution. For running the educational institution, the petitioner had not obtained prior permission from the Educational Department. Further, the petitioner has not been able to run the company for industrial purpose. Therefore, the impugned order passed by the respondents is in order. Hence, the above writ petition is dismissed. Consequently, the impugned order is confirmed and it is suitable for execution. No costs. Consequently, connected miscellaneous petition is closed.
16 .12.2014
Index : Yes/No
Internet : Yes/No
ub
To
1.The Commissioner and
Secretary to Government,
Revenue Department,
Government of Tamil Nadu,
Fort.St.George, Chennai-600 009.
2.The Special Commissioner and
Commissioner of Land Reforms,
Chepauk, Chennai-600 005.
3.The Assistant Commissioner of Urban
Land Tax and Competent Authority of
Urban Land Ceiling,
Poonamallee Area,
No.5, Sannadhi Street, Poonamallee,
Tiruvallore District.
C.S.KARNAN, J.
ub
Pre-Delivery Order
in
W.P.No.12298 of 2003
16.12.2014