BISHAMBHAR PRASAD versus M/S. ARFAT PETROCHEMICALS PVT. LTD. AND ORS

Citation: [2023] 7 S.C.R. 230 · Decided: 20-04-2023 · Supreme Court of India · Bench: SURYA KANT · Disposal: Disposed off

Cited by 1 judgment(s) · cites 16 · see the full citation network in Lexace

Judgment (excerpt)

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SUPREME COURT REPORTS
[2023] 7 S.C.R.
   [2023] 7 S.C.R. 230
230
BISHAMBHAR PRASAD
v.
M/s. ARFAT PETROCHEMICALS PVT. LTD. AND ORS.
(Civil Appeal No. 2963 of 2023 Etc.)
APRIL 20, 2023
[SURYA KANT AND VIKRAM NATH, JJ.]
Industrial Development – Industrial land – Appeals from
judgment passed by the High Court whereby the Writ Petition filed
by Respondent No.1 was allowed – As a corollary, the decision by
the Cabinet Committee of the State of Rajasthan, and resulting
instructions issued to the Rajasthan State Industrial Development
and Investment Corporation Ltd. (“RIICO”) to cancel a series of
permissions and approvals granted/awarded to Respondent No.1
in respect of industrial land in Kota, Rajasthan, were set aside –
Whether the Large-Scale Industrial Area (LIA), Kota has been always
under the management and control of the State Government or it
was transferred to RIICO pursuant to Government Order dated
18.09.1979  – Whether the 1979 Rules of RIICO are statutory in
nature – Whether failure to observe Principles of Natural Justice
by the State Government vitiated its decision to annul the permissions
/approvals granted by RIICO in favour of Respondent No.1 –
Whether the State Government could have exercised its powers under
Article 138 of the AoA of RIICO to direct cancellation – Whether
the Rules of Business were not followed – Does the Doctrine of
Legitimate Expectations and Promissory Estoppel apply in favour
of Respondent No. 1 – Whether the Appellant Unions are entitled to
relief – Held: There was an uninterrupted and subsisting relationship
of lessor and lessee between the State Government and either JKSL
or Respondent No. 1, in the context of LIA, Kota – From the first
lease deed executed in 1967, till date, the State Government has
maintained the position of lessor – The lease with JKSL, and all
leases thereafter with JKSL and/or Respondent No. 1, have been
signed under the 1959 Rules – The terms of the lease are clearly in
compliance with the 1959 Rules –  The land in LIA, Kota was never
transferred to RIICO under the Government Order dated 18.09.1979
– The State Government has always maintained title and ownership
of the area – The land was also never allotted to RIICO on a
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leasehold basis under Rule 11A of the 1959 Rules – Thus, RIICO
was never expressly given any leasehold rights, and had no authority
to further sub-lease the land, along with other corresponding
powers, under Rule 12 of the 1959 Rules – In any case, Rule 11A of
the 1959 Rules is of no importance, as there had to be an express
allotment of the land to RIICO on a leasehold basis after the coming
into force of Rules 11A and 12 – No such express allocation was
ever made in favour of RIICO – The 1979 Rules are not statutory in
nature – The reference to the 1979 Rules in Rule 12 of the 1959
Rules, does not accord any statutory recognition to the former –
There was no violation of the Principles of Natural Justice in this
case – The entire basis for granting permission for conversion of
the land, and subdivision of the plots, was on an incorrect assumption
of power by RIICO under the 1979 Rules, to act as the lessor of
LIA, Kota – RIICO was never given any leasehold rights over the
land – When the basis for a benefit received by a party is itself
invalid, there is no question of giving the party a chance to be
heard – The State Government was competent to issue directions
under Art.138 of the AoA of RIICO, to cancel the supplementary
lease deeds and attendant permissions – This fell squarely within
the ambit of Art.138 of the Articles of Association – There was no
violation of the Rajasthan Rules of Business as the sub-committee
which recommended the cancellation of the permissions /approvals
to Respondent No.1, was acting for and on behalf of the entire
Council of Ministers – Hence, the Rules of Business were complied
with – There was no legitimate expectation nor promissory estoppel
that could operate to the benefit of Respondent No. 1, as, once
again, no such defences could be raised on the back of RIICO’s
own erroneous utilization of powers that vest only with the rightful
lessor of LIA, Kota, which is the State Government – Further, public
interest overrides both these doctrines, and cannot come to the aid
of a private party, when the larger interests of society are involved
– The supplementary leases signed between Respondent No.1 and
RIICO are unsustainable – RIICO did not possess the authority to
ent

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