Softland India Limited v. State of Kerala & Others

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT:-** **THE HONOURABLE MR.JUSTICE K.VINOD CHANDRAN MONDAY, THE 27TH DAY OF NOVEMBER 2017/6TH AGRAHAYANA, 1939** **W.P(C).No.18862 of 2012 (G) ----------------------------------** - **PETITIONER(S):--------------1. SOFTLAND INDIA LIMITED, KINFRA SMALL INDUSTRIES PARK, MENAMKULAM, THUMBA, ST.XAVIERS COLLEGE P.O,. THIRUVANANTHPURAM - 695586, REPRESENTED BY ITS MANAGING DIRECTOR G MURALY.** - **2. G.MURALY, MANAGING DIRECTOR, SOFTLAND INDIA LIMITED, KINFRA SMALL INDUSTRIES PARK, MENAMKULAM, THUMBA, ST. XAVIERS COLLEGE P.O., THIRUVANANTHAPURAM - 695586. BY ADVS.SRI.PHILIP T.VARGHESE SRI.THOMAS T.VARGHESE SMT.T.M.BINITHA** - **RESPONDENT(S):--------------1. THE STATE OF KERALA, REPRESENTED BY THE CHIEF SECRETARY TO GOVERNMENT, GOVERNMENT OF KERALA, SECRETARIAT, THIRUVANANTHAPURAM - 695001.** - **2. THE PRINCIPAL SECRETARY TO GOVERNMENT, DEPARTMENT OF INDUSTRIES, GOVERNMENT SECRETARIAT, THIRUVANANTHAPURAM - 695001** - **3. THE KERALA INDUSTRIAL INFRASTRUCTURE DEVELOPMENT CORPORATION, KINFRA HOUSE, 31/2312, SASTHAMANGALAM, THIRUVANANTHAPURAM-695010, REPRESENTED BY ITS MANAGING DIRECTOR.** - **4. THE MANAGER (TECHNICAL), THE KERALA INDUSTRIAL INFRASTRUCTURE DEVELOPMENT CORPORATION, KINFRA HOUSE, 31/2312, SASTHAMANGALAM, THIRUVANANTHAPURAM-695010.** - **5. THE JUNIOR MANAGER (CO-ORDINATION) THE KERALA INDUSTRIAL INFRASTRUCTURE DEVELOPMENT CORPORATION, KINFRA HOUSE, 31/2312, SASTHAMANGALAM, THIRUVANANTHAPURAM-695010. R1 & R2 BY GOVERNMENT PLEADER SMT.A.C.VIDHYA. R3 TO R5 BY ADVS. SRI.M.GOPIKRISHNAN NAMBIAR SRI.P.GOPINATH SRI.P.BENNY THOMAS SRI.K.JOHN MATHAI** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 27-11-2017, ALONG WITH W.P.(C) NO.19705 OF 2012-K AND CONNECTED CASES, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:-** ## **W.P.(C) No.18862 of 2012-G.** ## **APPENDIX** **PETITIONER(S) EXHIBITS:-----------------------EXT.P1 TRUE COPY OF THE LEASE DEED NO.1071/2007 REGISTERED IN SRO, KAZHAKUTTOM. EXT.P2 TRUE COPY OF THE LETTER ISSUED BY THE 3RD RESPONDENT TO THE PETITIONERS DATED 30.10.2008. EXT.P3 TRUE COPY OF THE ORDER ISSUED BY THE 3RD RESPONDENT TO THE PETITIONERS DATED 23.6.2012.** **RESPONDENTS' EXHIBITS:----------------------NIL. Vku/[ true copy ]** ## K. Vinod Chandran, J ------------------------------------------------------------------------ W.P.(C).Nos.18862 of 2012-G, 19705 of 2012-K, 19706 of 2012-K, 19707 of 2012-K, 19742 of 2012-P, 20664 of 2012-G, 20673 of 2012-H, 20675 of 2012-H, 28447 of 2012-E & 9146 of 2013-P. ----------------------------------------------------------------------- Dated this the 27[th] day of November, 2017 ## **JUDGMENT** Ten writ petitions on the very same dispute of enhanced compensation having been sought from the lessees by the lessor. The petitioners are all persons who leased out various extents of properties from the Kerala Industrial Infrastructure Development Corporation [for brevity “KINFRA”]. Admittedly the lease deeds specifically provided for enhancement of lease premium on enhancement being made by Courts, of the compensation granted to the individual land owners, from whom the lands were acquired for the industrial park. The contention herein is that under that guise the respondent KINFRA is attempting illegal enrichment. For convenience, W.P.(C) No.18862 of 2012 is referred to. 2. A lease deed was executed as seen from Exhibit P1. The lease premium varied in accordance with the award passed based on the value of the land determined. The lease premium paid and the rate per acre determined by the KINFRA at the time of lease WP(C) No.18862 of 2012 & - 2 - connected cases. ## was as follows: |**_Lease_**<br>**_deed date_**|**_WP(C) No._**|**_Name of the Party_**|**_Lease_**<br>**_Premium_**|**_Rate/Acre_**| |---|---|---|---|---| |20/10/04|28447/2012|Goodwill Polymers|6,29,500/-|12.59 Lakhs| |30/10/04|9146/2013|Southern Gas Ltd.|11,33,100/-|12.59 Lakhs| |03/03/05|20657/2012|Fresh & Fine Products India<br>Ltd.|3,02,200/-|15.11 Lakhs| |04/03/06|19707/2012|Divine Gas Pvt. Ltd.|7,55,500/-|15.11 Lakhs| |10/11/06|18862/2012|Soft Land India Ltd. & Others|4,37,435/-|15.11 Lakhs| |01/02/07|20673/2012|Thomas Kurian|5,85,513/-|15.11 Lakhs| |08/02/07|20664/2012|Alka Ventures Pvt. Ltd.|7,25,200/-|18.13 Lakhs| |22/10/08|19742/2012|Vasudeva Vilasam herbal<br>remedies Pvt. Ltd.|12,99,460/-|15.11 Lakhs| |04/03/10|19705/2012|Shama Export Pvt. Ltd.|17,56,500/-|35.1 Lakhs| |31/03/11|19706/2012|Clean plus apparat industries<br>Pvt. Ltd.|18,61,050/-|19.59 Lakhs| |24/11/11|18840/2012|Soft Land India Pvt. Ltd.|2,81,737/-|1.01 Crores| ## 3. Later, the KINFRA sought for additional compensation as provided for in the lease deed. The petitioners paid it, the sums being negligible. Again almost the original amounts of premium paid, was mulcted by the various orders produced at Exhibit P3. The petitioners challenge the same on the ground that such unbridled power cannot be conferred on the lessor. 4. The learned Standing Counsel for KINFRA submits that there was a specific provision in the lease agreement insofar as entitling the lessor to claim the additional compensation as granted by the Court. The petitioners had also been issued with demands earlier, WP(C) No.18862 of 2012 & - 3 - connected cases. which they paid and hence acquiesced. The petitioners cannot now turn around and challenge the demand, is the contention. The learned Standing Counsel also relies on _**Defence Enclave Residents Society v. State of U.P.**_ **[JT 2004 (7) SC 541],** wherein the Hon'ble Supreme Court declined the jurisdiction under Article 32 of the Constitution since the matter was purely contractual in nature. 5. With respect to the contention raised of the petitioners having acquiesced insofar as a demand earlier made, this Court does not find any reason to non-suit the petitioners on that ground. The petitioners had paid up the amounts at the earlier stage only for reason of the negligible demand made. That does not restrict or abridge their rights to challenge an illegal demand or act, taking up the contention at a later stage. Especially when a demand of enhanced amounts are made; there could be a challenge on the ground of the same being arbitrary and resulting in illegal enrichment to the lessor. 6. The decision of the Hon'ble Supreme Court relied on by KINFRA is also not applicable since all the writ petitions were admitted in the year 2012 except one in the year 2013. It would be harsh for this Court to decline jurisdiction at this stage when they are restricted from taking up an appropriate remedy for reason of laws of limitation. WP(C) No.18862 of 2012 & - 4 - connected cases. 7. Admittedly there is a provision in the lease agreement entitling the lessor to claim the amounts as enhanced by the Courts. About 40 Acres of property is said to have been acquired on the requisition of KINFRA for establishing an Industrial Park including small industries. The petitioners are all lessees who agreed to the terms of the lease, which specifically made them liable to pay the enhanced compensation. Hence, there could be no dispute raised on that count. 8. The petitioners' contention is that going by the fixation of price, as seen from the extract above, it varied from plot to plot and was enhanced as time progressed. The KINFRA has realized the entire amounts spent for acquisition of properties and hence there could be no unjust enrichment without any substantiation of the claim for enhanced demand. It is pointed out that the land value fixed in 2004 was Rs.12.59 lakhs per Acre while the same is Rs.1.01 Crores in 2011, Hence, the land value has definitely been recovered, and any amounts claimed over and above that expended by the State for acquisition would run contrary to the purpose for which the acquisition is made. WP(C) No.18862 of 2012 & - 5 - connected cases. 9. It is submitted by the learned Standing Counsel for KINFRA that there are still pending cases and appeals with respect to the claims for enhanced compensation for the acquisitions and there could also be subsequent demands. As of now, the KINFRA having claimed amounts on the basis of the compensation enhanced by the Courts, they have a duty to reveal to the petitioners the basis on which enhanced lease premium is demanded. 10. The establishment of industrial parks is to promote industries and those who are lured to start such industries, on the promises made by the State through its instrumentality, cannot be harassed with unreasonable and illegal demands. Eventually this would result in the industry commenced being shut down and ultimate ruination of the industrial climate; which is sought to be fostered. 11. The amounts now sought from each of the petitioners have to be related to the extent of their property and enhancement ordered by the Courts with respect to their specific property. Each of the petitioners individually would be called for a hearing by the KINFRA and they would be apprised of the specific enhancement made in their case with reference to the judgments passed by the Courts. The said exercise shall be done within a period of three WP(C) No.18862 of 2012 & - 6 - connected cases. months from today; based on which written demands shall be made to each of the petitioners, showing the basis of the demand. It is made clear that the judgment of this Court does not restrict any demand being raised on the basis of any subsequent enhancement, when made by Courts. The writ petitions are disposed of with the directions and reservations as herein above stated. Parties are left to suffer their respective costs. **Sd/-** vku/- K.Vinod Chandran Judge [ true copy ]