Gijas Rubbers Pvt Ltd v. Secretary to Government Revenue (A) Department, Government of Kerala, and Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MR. JUSTICE RAJA VIJAYARAGHAVAN V** ## **THURSDAY, THE 25TH DAY OF MARCH 2021 / 4TH CHAITHRA, 1943** ## **WP(C).No.10441 OF 2020(E)** ## **PETITIONER:** **GIJAS RUBBERS PVT. LTD REPRESENTED BY ITS MANAGING DIRECTOR, ASHOKAN MADHAVAN, DEVELOPMENT AREA, EDAYAR, DIST. ERNAKULAM-683110** **BY ADVS. SRI.K.REGHU KOTTAPPURAM SRI.MURUKESH REGHU SMT.DHANUJA M.S SRI.R.MAHESH (KOTTAPPURAM)** ## **RESPONDENTS:** **1 THE SECRETARY TO GOVERNMENT REVENUE (A) DEPARTMENT, SECRETARIAT, THIRUVANANTHAPURAM-695001 2 THE GENERAL MANAGER DISTRICT INDUSTRIES CENTRE, KAKKANAD, ERNAKULAM-682030 3 THE DIRECTOR OF INDUSTRIES AND COMMERCE, GOVT. OF KERALA, SECRETARIAT, THIRUVANANTHAPURAM-695001** - **4 THE DISTRICT COLLECTOR, ERNAKULAM DISTRICT, CIVIL STATION, KAKKANAD-682030** ## **SRI JAFAR KHAN, GOVERNMENT PLEADER** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 25.03.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **WP(C).No.10441 OF 2020(E)** **2** ## **JUDGMENT** Gijas Rubbers Pvt Ltd, the petitioner herein, is an industrial unit engaged in the manufacture of waste rubber crumb. The business is being run in property which was allotted on hire purchase basis under the Rules for Allotment of Land in Development Areas on Hire Purchase basis for Industrial Purposes Rules, 1969. As requested by the petitioner, permission was granted by the General Manager, District Industries Centre, to mortgage the assets including the land and structures for availing a loan of Rs. 25,00,000/- for expansion of the Industrial unit. While allowing the request by Ext.P5 order, among other conditions, the petitioner was ordered to furnish personal property as security. Being aggrieved by the imposition of the said condition, the petitioner is before this Court. 2. Before adverting to the contentions advanced by both sides, it would be apposite to detail the facts which led to the filing of this petition. In the year 1989, by Ext.P10(A) agreement, the Government agreed to let on hire, property having an extent of 0.0405 Ares (10 cents) in Sy.No.132/1 pt of Kadungalloor Village in the Development Area at Edayar for the establishment of a unit for the manufacture of waste rubber crumb. The allotment of the property was in accordance with the Allotment of Land in Development Areas on Hire Purchase Basis for Industrial Purposes Rules, 1969 (‘Rules’ for short). A sum of Rs.1304/- representing 20% of the total value of the plot including improvements **WP(C).No.10441 OF 2020(E)** **3** thereon was fixed by the Government as hire charges. The petitioner was required to pay the balance value of Rs.5,216/- in ten years by equal instalments. By Ext.P13 patta dated 4.7.2005, the land was assigned to the petitioner. While assigning the land as aforesaid, it was mentioned in the patta that the land assigned shall be heritable but the same shall not be alienated or encumbered without the prior permission of the Government. Records reveal that later, vide G.O.(M.S.) No.246/2008/RD dated 4.8.2008, sanction was accorded to assign 15.500 cents comprised in Sy. No.132/1, 132/2 pt of Kadungalloor village in the very same area as per the Rules of 1969 and in respect of the above property, patta was issued on 10.11.2009. 3. It appears that on 12.7.2019, the petitioner submitted a request before the 2nd respondent seeking permission to mortgage the unit for availing a loan. The 2nd respondent recommended the request and forwarded the same to the Government. The conditions in Exhibit P5 are that the property of the owner shall be furnished as collateral security and if default is committed in repaying the loan, the financial institution, while bringing up the property in public auction, should mention in the auction notice that the bidder should purchase the land only for industrial purpose. In that event sanction was to be granted only for the functioning of an industrial unit and only an industrial patta was to be issued. It is further stated that the property is assigned for meagre amounts to promote industry as per the Rules of 1969. The said property is mortgaged by owners and huge sums of loans are availed from financial institutions. When default is committed, the property is brought to sale and industrial property is being sold for **WP(C).No.10441 OF 2020(E)** **4** clearing the dues of the defaulter. This is clearly against the interest of the State and would debilitate the functioning of the industrial area. It is further stated that imposition of the condition in Ext.P5 cannot be said to be onerous. 4. Sri. K.Reghu Kottapuram, the learned counsel submitted that when the patta issued to the petitioner did not enable the Government to fix any such condition, the respondents were not justified in relying on an order passed by the Land Revenue Commissioner in some other proceeding to impose onerous conditions. He would point out that on an earlier occasion, by Ext.P2 order, the petitioner was permitted to mortgage the property and avail loan from the Catholic Syrian Bank. The said loan was closed without committing any default. The learned counsel would refer to Ext.P10 and it is argued that the entire property has been assigned to the petitioner and in that view of the matter, imposition of conditions as has been done in the instant case is unwarranted. The patta clearly says that the land can be resumed only if the property is diverted for any other purpose. According to the learned counsel, the rules which were in existence at the time of assignment do not enable the respondents to impose the condition as has been done in the instant case. In order to substantiate his contention that statutory rules cannot be overridden by executive orders or executive practice, the learned counsel has relied on **Kuppusamy K. and Another v. State of T.N. and Ors** .[1] , **Ajay Kumar Das v. State of Orissa and Ors.[2]** . 5. Sri. Jaffer, the learned Senior Government Pleader submitted that as per the Rules for Assignment of Government Land for Industrial Purposes, > 1 [1998 (8) SCC 469] > 2 [(2011) 11 SCC 136] **WP(C).No.10441 OF 2020(E)** **5** ‘alienation’, as per Rule 2(a) would include mortgage as well. Referring to Rule 11, it is submitted that the land assigned though heritable, cannot be alienated or encumbered in any manner without the previous permission in writing from the Government. According to the learned Government Pleader, the properties have been assigned for industrial purposes and can only be used for that purpose. According to the learned Government Pleader, imposition of the condition that collateral should be offered was to ensure that the industrial land which was assigned for a nominal amount does not come into the hands of a private purchaser when the same is put up for sale in case of default by the industrial unit. The said condition was imposed to protect the Government land and in that view of the matter, it cannot be said that the condition imposed is onerous. 6. I have considered the submissions advanced. 7. It is in exercise of powers under Sections 3 and 7 of the Kerala Government Land Assignment Act, 1960, that plots are assigned to an industrialist to set up an industrial unit in development areas. Records reveal that a total extent of 30 cents have been assigned to Gijas Rubbers Pvt Ltd., which was originally a proprietorship. 8. Rule 2(a) of the Rules, defines ‘alienation’. It says that alienation would include sale, gift, will, mortgage, hypothecation, lease or transfer of possession. Rule 11 provides that the land assigned under the Rules shall be heritable but it shall not be alienated or encumbered in any manner without the permission in writing of the Government. In Exts.P13 and P14 patta issued to the petitioner, a condition has been imposed that the property shall not be alienated or **WP(C).No.10441 OF 2020(E)** **6** encumbered without the prior permission of the Government. Now the question is whether, while granting permission to alienate the property, the Government could have imposed any condition as has been done in the instant case. If the contention advanced by the petitioner is accepted, it would mean that the right of the petitioner to mortgage the property is subject to no limitation, and no condition could have been imposed by the Government. In this context, it has to be borne in mind that the property was assigned in an Industrial Development Area for development of the Industry. The land assigned is required to be used by the assignee for the purpose to which it has been assigned. The objective behind imposition of such a condition is clearly in public interest and in order to safeguard the land and to ensure that it is used only for industrial purposes. The Government apparently wanted to ensure that the plot in the Industrial Unit, which was assigned for a nominal value, is not taken over by some financial institution in the event of the failure of the assignee to repay the loan availed on the cover of the assigned land. Such a stand taken by the Government is clearly fair, in public interest and with a view to ensure that public land is not frittered away. In that view of the matter, I find no reason to interfere with Ext.P5 order. This writ petition will stand dismissed. **Sd/-** ## **RAJA VIJAYARAGHAVAN V** ## **JUDGE** ps **WP(C).No.10441 OF 2020(E)** **7** ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** **EXHIBIT P1** **A PHOTOCOPY OF LETTER NO.DICEKM/12174/89 DATED 27.09.2019** - **EXHIBIT P2 A PHOTO COPY OF ORDER VIDE G.O(MS)NO.214/2008/RD DATED 16.07.2008** - **EXHIBIT P3 A PHOTOCOPY OF CERTIFICATE OF REGISTRATION DATED 24.08.2017** - **EXHIBIT P4 A PHOTOCOPY OF COPY OF RESOLUTION DATED 24.5.2019** **EXHIBIT P5 A PHOTOCOPY OF ORDER VIDE GO(MS) NO.104/2020/REV. DATED 11.3.2020** - **EXHIBIT P6 A PHOTOCOPY OF REPRESENTATION DATED 16.3.2020** **EXHIBIT P7 A PHOTOCOPY OF JUDGMENT DATED 28.6.104 IN WPC 26887/2003** - **EXHIBIT P8 A PHOTOCOPY OF JUDGMENT DATED 6.7.2009 IN WPC NO.16691/2009** **EXHIBIT P9 A PHOTOCOPY OF JUDGMENT DATED 26.11.2007 IN WPC 12490/2007** - **EXHIBIT P10 A PHOTOCOPY RELEVANT PAGE NO.5 OF AGREEMENT DATED 27.10.1989 EXECUTED BETWEEN THE GOVT, AND PETITIONER RELATING TO THE ASSIGNMENT OF 10 CENTS OF LAND, CONTAINING CLAUSE 10 OF THE AGREEMENT** - **EXHIBIT P11 A PHOTOCOPY OF THE RELEVANT PAGE CONTAINING CLAUSE 9 IN THE LIST ATTACHED TO G.O.M.S 169/69/ID DATED 5.4.69 CONCERNING ASSIGNMENT OF LAND CONDITIONING THAT THE LAND ALLOTED SHALL NOT BE ALIENATED OR ENCUMBERED WITHOUT THE PRIOR SANCTION OF DIRECTOR OF INDUSTRIES AND COMMERCE.** **EXHIBIT P12 A PHOTOCOPY OF RELEVANT PAGE IN THE LIST ATTACHED TO ORDER VIDE G.O.(M.S) 169/69/ID DATED 5.4.69 CONCERNING THE** **WP(C).No.10441 OF 2020(E)** **8** **ASSIGNMENT OF LAND CONTAINING PLOT 30** **EXHIBIT P13 A PHOTOCOPY OF PATTA NO.19477 DATED 4.7.2005 EXHIBIT P14 A PHOTOCOPY OF PATTA NO.26473 DATED 10.11.2009 EXHIBIT P15 A STATEMENT DATED 25.2.2021 FURNISHING THE MARKET VALUE APPROXIMATELY OF THE INVESTMENT IN THE FACTORY** **RESPONDENTS EXHIBITS: ANNEXURE R1(a) A TRUE COPY OF THE REPORT DATED 18.9.2015 OF LAND REVENUE COMMISSIONER**