Rajasthan Industrial Areas Allotment Rules, 1959 – Rules 11A and 12 – Allotment of industrial land – There has been an uninterrupted and subsisting relationship of lessor and lessee between the State Government and either J.K. Synthetics Ltd. (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

“100. Sale of land in Industrial and Commercial Areas – The State Government may make rules regulating sales of lands in industrial and commercial areas and may also impose an annual assessment of such lands, wherever necessary.”

“2. Period for which land may be allotted.- Land in industrial area may be allotted on lease-hold basis for a period of 99 years-

(a) for setting of a large-scale industry anywhere in the state, by the State Government in the Industries Department and in the case of large-scale tourism unit, the allotment shall be made by the Government in the Revenue Department and

(b) for setting up of other industries –

(i) in Jaipur District, by the Director of Industries, Rajasthan Jaipur provided that in case of a tourism unit the allotment shall be made by the Government in the Revenue Department, and

(ii) in any other district, by the Collector concerned.

(bb) for the setting up of IT Industries Government land shall be allotted by the State Government in the Revenue Department on the recommendation of the Department of Information Technology and Communication.

(c) all allotment of land under clause (a) shall be made within a period of 60 days and under clause (b) within a period of 30 days from the date of receipt of the completed application in Form-B. In case applicants submit complete application electronically in Single window System Portal, it shall be disposed as per the provisions of the Rajasthan Enterprises Single Window Enabling and Clearance Rules, 2011.

Provided that the allotment of land for the purpose of setting up of Common Effluent Treatment Plant and related activities, anywhere in the State, shall be made by the State Government in the Revenue Department for a period of 10 years which shall be extendable for a period of 5 years.

8. Land not to be used for other purpose. – (1) The land given for industrial purposes shall not be used for any other purpose except constructing factory premises and such other residential quarters as are required for those engaged in that industry. No constructions shall be permitted which may have the object of using it as a commercial undertaking other than the industry permitted to be established.

Provided that the State Government, on the application of the lessee for establishment of industry other than the industry for which the was given, may grant permission for establishment of such industry. But in case of government land allotted under these rules, such permission shall not be granted for establishment of tourism units.

(2) The permission for construction of the labour colony shall be given if required at the time of the establishment of an industry.

(3) The industrialist shall be free to use an area upto 200 sq. meter for his own residential purpose on first floor of the factory premises.

9. Lessee debarred from sale of land etc. – The lessee shall have the limited ownership on the land leased till the lease subsists and shall have the right of assignment only for the purpose of taking a loan for the development of the industry or for pledging as collateral security for a loan taken by the lessee or some other industry owned by the same management. The lessee shall have no right to sell the land:

(i) Provided that the land can be pledged as collateral security only in favour of Industrial Financial Corporation of India, Rajasthan Finance Corporation, IDBI, ICICI, LIC, IRBI, HDFC, SIDBI, EXIM Bank, Cooperative Banks and any Public Financial Institution as defined in the Public Financial Institute Act or Scheduled Banks or private lending agencies subject to ensuring that the lessee has cleared all the outstanding dues of the lessor and the lessee creates first charge in favour of the State Government and second to the financing body or bodies.

(ii) Provided further that once the land has been utilised for the purpose for which it was allotted within the period specified in rule 7, the lessee may, with the permission of the Allotting Authority transfer his right or interest in the whole land, so leased out, on the following conditions:-

(a) In case of government land allotted under these rules, he shall pay 50% of prevailing market price of land after deducting allotment price charged under rule 3A and the transferee shall pay 50% of excess amount of yearly lease land mentioned in rule 5 and other conditions of lease shall be remained unchanged.

(b) In case of converted Khatedari land allotted under these rules for industrial purpose, the transferee shall pay 50% excess amount of yearly lease rent mentioned in rule 5 and other conditions of lease shall be remained unchanged.

(iia) Provided also that if after grant of permission the transferee has failed to execute the lease deed and further transferred the allotted land without prior permission of allotting authority, such transfer may be regularised by the allotting authority on payment of penalty of Rs.3000/- for each transfer. The lease deed may be executed in favour of such transferee for the remaining period of lease may be executed in favour of such transferee for the remaining period of lease.

The transferee shall pay 50% excess amount of the yearly lease rent mentioned in rule 5 on such transfer.

(iii) Provide also that in case an industrial plot is proposed to be divided or sub-divided for any purpose, whatsoever, prior permission of the State Government in the Revenue Department shall be obtained by the allotting authority.

(iiia) Provide also that if any industrial plot is divided or sub-divided without obtaining prior permission of the State Government, the lessee shall apply for permission of division or sub-division to the allotting authority along with a copy of the challan depositing an amount of Rs.3000/-. The allotting authority, with prior approval of the State Government, may regularise the division or sub-division.

(iv) Provide also that, in case of sick unit as per RBI guidelines, the lessee with the prior permission of the State Government, may transfer his right or interest in the leased land sub-divided under the above proviso on the following conditions: –

(a) That NOC from Financial Institutions/Bank shall be obtained, in case land is mortgaged.

(b) that the conditions of lease shall remain unchanged.

(c) that the transferee shall pay additional 100 percent excess amount of the proportionate yearly lease rent applicable from the date of transfer of right or interest in leased land.

(d) that the transferee shall use the land for the industrial purpose only.

(e) that in case of government land allotted under these rules, the transferee shall pay 50% of prevailing market price of land after deducting allotment price charged under rule 3A.

(v) Provided also that no permission of transfer under the above proviso, shall be allowed in case of a Government land unless the unit is declared sick by Board of Industrial and Financial Reconstruction (BIFR).

(vi) Provided also that in case of any doubt of any kind the allotting authority shall refer the matter to the State Government in the Revenue Department whose decision shall be final.

Provided also that the developer of micro, small and medium enterprises clusters, as per approved plan, may transfer his right or interest in the whole land, so leased out to entrepreneurs. The conditions of lease remaining unchanged. The transferee shall pay 50% excess amount of the yearly lease rent mentioned in rule 5 on such transfer.”

“xxx xxx xxx

NOW THIS INDENTURE WITNESSETH AS FOLLOWS:

iv) The lessee shall set up on the said plot of land Nylon industry for which land has been leased to him by the lessor within a period of two years from the date of talking over the possession of the land as above mentioned and in case of his failure to do so the said plot shall revert to the lessor unless the period of two years is extended by the lessor on valid grounds.

v) The lessee shall set up, construct, erect and build on the said plot of land, only such buildings, sheds, and structures as are required by him for setting up the industry aforesaid and also such other residential quarters e.g. watch & ward quarters as are required for those engaged or to be engaged in the said factor.

vi) The lessee agrees not to construct or build any structures or building on the said plot of land or on a portion of it which may have the object of using it as a commercial undertaking other than for the industries aforesaid for which the said plot has been leased to the lessee.

..”

“Government of Rajasthan

Industry Group-2 Department

No.P-4 56/Industry/1/79Jaipur, Dated: 18.9.79

It has been decided in the meeting dated 18.09.1979 of Rajasthan State Level Planning and Development Coordination Committee that all the industrial areas of Rajasthan shall only be developed through Rajasthan State Industrial and Mining Development Corporation. Further, it has also been decided that the industrial areas operated by the Department of Industry shall be handed over to Rajasthan State Industrial and Mining Development Corporation Ltd., Jaipur w.e.f. 01.10.1979.

Therefore, the State Government hereby issues order to transfer the handing over of industrial areas operated by the Department of Industry to Rajasthan State Industrial and Mining Development Corporation Ltd., Jaipur w.e.f. 01.10.1979.”

x———————-x———————–x

“Office of Joint Director, District Industrial Centre,

With reference to the State Government Order No. Industry (Group-I) Department, A.P.4 (56) Industry/1/79 dated 18.09.1979 and Director, Department of Industry, Rajasthan, Jaipur DO letter No.F.2 (182) 9A/2305 dated 21.09.1979, the following Industrial Areas (Departmental) are hereby transferred to Rajasthan State Industrial and Mining Development Corporation Ltd., Jaipur w.e.f. 28.09.1979 (Afternoon):

1. Large Scale Industrial Area, Kota

2. Small Scale Industrial Area, Kota

3. Lakhava Industrial Area, Kota

4. Nanta Industrial Area, Kota”

x x——————————————x

“20-A. The Managing Director shall have full powers with regard to the following:

1. Approval of layout plan of the industrial areas and changes/ modification / revision /subsequent changes therein and all related matters.

2. Changes in status of any of the land at any industrial area e.g. conversion from industrial land to open land, service land, commercial land, residential land, conversion from open land to industrial land, commercial land, residential land, services land, conversion from service land to industrial, open, commercial, residential and for other purposes etc., and vice-versa.

20-B. Sr. DGM / SRMs / RMs are authorized for:

(i) sub-division of plots.

(ii) reconstitution of plots.

(iii) …

20-C

xxx xxx xxx

(A) Following riders/conditions will be observed while considering the change in land use:

i) No change in land use of allotted plots will be permitted for residential purpose.

ii) No change in land use of vacant industrial plot would be allowed. In other words, the allottees of industrial plot who have not set up an industry will not be permitted change in land use for non-industrial purposes. However, change in land use of part vacant sub-divided plot would be allowed subject to condition that the leasehold rights of the sub-divided plot are held by the allottee of integrated plot.

iii) No change in land use of allotted institutional plots will be allowed in the dedicated Institutional Areas for any other purpose.

iv) No change in land use of plots allotted under the provisions of Rule 3(E) and 3(W) of RIICO Disposal of Land Rules, 1979 will be permitted.

v) Change in land use of plot allotted for non-industrial use will be allowed for vacant plot subject to payment of 15% of the prevailing rate of allotment as additional charges.

vi) Change of land use of the allotted plots for commercial/institutional purposes as permitted under this rule will be considered only for the plots located on the roads having right of way of 18.00 mtr. and above (total road width). However, in the land use conversion cases wherein the criterion of minimum road width of 24 mtr. or above is specified in the building regulations/parameters then the same will be observed while considering the cases of the land use conversions.

vii) …”

“11-A. Allotment of land to the Rajasthan State Industrial Development and Investment Corporation Ltd. or Rajasthan Tourism Development Corporation-

Land shall be allotted to the Rajasthan State Industrial Development and Investment Corporation Ltd. or Rajasthan Tourism Development Corporation for setting up and developing Industrial Areas, on the following terms and conditions :-

(i) The land shall be allotted on lease hold basis for a period of 99 years;

(ii) The premium to be charged for the allotment of government land for industrial purposes shall be equivalent to the prevailing market price of the same class of agricultural land in the vicinity and shall be determined accordingly by the Colonization Commissioner in the Rajasthan Canal Project Colony Area and by the Collector concerned in other areas:

Provided that no premium for allotment shall be charged from Rajasthan State Industrial Development and Investment Corporation where the land has been purchased by the Rajasthan State Industrial Development and Investment Corporation or acquired for Rajasthan State Industrial Development and Investment Corporation after its incorporation and the compensation is paid by the Rajasthan State Industrial Development and Investment Corporation.

(iii) ….

(iv) The Rajasthan State Industrial Development and Investment Corporation Ltd. [or Rajasthan Tourism Development Corporation] may sub-lease the leased land or part thereof, for industrial purposes including essential welfare and supporting services, provided that in the case of Diamond and Gem Development Corporation to who the land has already been leased out by RIICO for 99 years, the sub-lessee i.e. DGDC may further sublet and the terms and conditions and other provisions contained in the rules in so far as they relate to RIICO shall mutatis mutandis apply to DGDC also as if the land in question has been let out to them by State Government and rule 11-A ibid.

Provided further that where land was allotted and converted in favour of Rajasthan State Industrial Development and Investment Corporation Ltd. [or Rajasthan Tourism Development Corporation] after its incorporation for industrial purpose but land was used for essential welfare and supporting services, such allotment [xxx] shall be deemed to be for industrial purpose.

(iv-a) The sub-lessee of the Rajasthan State Industrial Development and Investment Corporation Limited may further sub-lease the sub-leased land or part thereof on such terms and conditions as may be mutually agreed between such sub-lessee and subsequent sub-lessee. The terms and conditions applicable to sub-lessee shall also mutatis mutandis apply to such subsequent sub-lessee.

(v) The Rajasthan State Industrial Development and Investment Corporation Ltd. [or Rajasthan Tourism Development Corporation] may levy and recover such lease rent and other charges as may be determined by it, in respect of the lands sub-leased by it;

(vi) The periods of the sub-leases by the Rajasthan State Industrial Development and Investment Corporation Ltd. [or Rajasthan Tourism Development Corporation] shall be determined by it, but shall not exceed 99 years, in all, in any case;

(vii) The land shall revert to the Government free of all encumbrances and without payment of any compensation in case the Rajasthan State Industrial Development and Investment Corporation Ltd. [or Rajasthan Tourism Development Corporation] or any of its sublessees, use it for any purpose other than industrial [including essential welfare and supporting services], or commit breach of any other condition of the lease or sub-leases;

(viii) The sub-lessees of the Rajasthan State Industrial Development and Investment Corporation Ltd. [or Rajasthan Tourism Development Corporation shall continue to be governed by all other terms and conditions prescribed in these rules, and any other analogues rules that may be promulgated or orders that may be issued, in this behalf by the State Government.

12. Allotment of land by Rajasthan State Industrial Development and Investment Corporation Ltd. [or Rajasthan Tourism Development Corporation.

The Rajasthan State Industrial Development and Investment Corporation Ltd. Jaipur or Rajasthan Tourism Development Corporation shall be empowered to make allotment in accordance with the Rajasthan State Industrial Development and Investment Corporation Disposal of Land Rules, 1979 [or any other rules framed by the RIICO and RTDC for the purpose] of vacant plots to entrepreneurs in the Industrial Areas notified by the State Government and transferred to the said Corporation. The Corporation shall also be authorised to execute lease deeds, realize development charges, lease rent and other dues from the entrepreneurs to whom plots have already been allotted in accordance with the provision of these rules, and to take any consequential or residuary action in regard to the plots allotted the entrepreneur.

Provided that the Rajasthan State Industrial Development and Investment Corporation Ltd. or Rajasthan Tourism Development Corporation shall be empowered to grant written permission to the lessee for transfer of rights or interest in the land in respect of the plots/land located in the Industrial Areas notified by the State Government and transferred to the said corporation:

Provided further that any permission granted or action taken for transfer of rights or interest in the plots/land by the Rajasthan State Industrial Development and Investment Corporation Ltd. or Rajasthan Tourism Development Corporation. after 13-07-1982 in respect of the plots/land saturated in the Industrial Areas and transferred to the said Corporation shall be deemed to be valid under the first proviso to this rule.”

“Therefore, guide in this regard that the abovementioned notification dated 13-07-1982, the lease rent etc. of the land allotted to the factory will be deposited by RIICO or deposited in the erstwhile tehsil itself s a state item. Please send guidance in this regard soon. Till the guidance is received the decision has been taken to deposit the lease amount in the Tehsil. Photocopy of the form letter is also being sent from M/s J K Synthetic in this regard.

Signature

District collector,

Kota

Number:- F-8 (198) Revenue/4435-38

Dt. 15-05-86″

x———————x———————–x

Sr. No. 2 (242) Rajasthan/3/86Jaipur,

Sent:- District Collector, Kota.

Sub:- Regarding development fee, lease rent and service charge of land allottee to M/s JK Synthetic Ltd. Kota.

Ref:- Your letter 4434 dated 15-05-1986.

Sir,

According to the above subject, it is written that the notification dated 13-07-1982 of this department has not been implemented with retrospective effect and in earlier cases the amount of lease rent etc. should be deposited in the tehsil as a state item.

x———————-x———————–x

1. Director

Industries Department

Jaipur, Rajasthan

2. All District Collector

3. All General Manager

District Industries Centre

Sr. No. 1(75) Industries/1/94 Jaipur, Dated 12th January, 1995

1. Land reserved for industrial area Under section 92 of Rajasthan Land Revenue Act, 1956 land allotted under Rajasthan Industrial Area Allotment Rules, 1959 all records to be kept with District Industrial Centre. At present files with RIICO should also be taken back and kept with District Industrial Centre. In all these cases compliance of terms of lease deed and monitoring of the same to be under supervision of District Industrial Centre.

2. Before lease deeds are signed for Land allotted under Rajasthan Industrial Area Allotment Rules, 1959 entry of change of land use and ownership should be entered into the revenue records and only then the land should be allotted under Rajasthan Industrial Area Allotment Rules, 1959.

3. After the signing of lease deed the same should be entered into the revenue records and files pertaining to it should be kept with District Industries Centre.

4. Lease deed of the allotted land under Rajasthan Industrial Area Allotment Rules, 1959 is to be executed by District Collector/ General Manager, District Industries Centre. As District Collector/ Managing Director has to initiate action in cases of violation of terms of lease deed, General Manager, District Industries Centre to be directly responsible to bring any or all violations in the notice of Director, District Industries Centre and District Collector.

x———————x———————-x

Udyog Bhawan, Tilak Marg, Jaipur- 302005

Sr. IPI/P-3(24)47/95

Sub:- Proceeding in respect of land under Rajasthan Industrial Area Allocation Rules, 1959.

In the industrial areas of the corporation (and those industrial areas which were later transferred from the Department of Industries to the Corporation) in violation of the terms of the lease of land allotment. Action is taken by the unit office under the Corporation’s Land Disposal Rules. Some such cases (especially in Bhilwara) have come to notice in which land allocation to Industrial Units at the state level or district level was done under the Rajasthan Industrial Area Allocation Rules, 1959 and whose lease deed was also executed by the District Collector (Industry). But their files were transferred to the unit offices of the corporation in some such cases proceedings were initiated by the unit office of the corporation in cases of violation of the terms of the lease deed. Such proceedings are irregular.

In the above context, the State Government has recently issued circular dated 12-01-1995, a copy of which is being attached for your information. It will be clear from this that under the Rajasthan Industrial Area Allocation Rules, 1959 the District Industry Center/Collector (Industry) will have the right and responsibility to take action in respect of violation of the terms of the lease deed. If you have any documents under consideration in this regard, please return them to the District Industries Centre.

Enclosed Circular Dated 12-01-1995.

Copy:-

1. All Unit offices For information.

2. RIICO (Headquarters) Officers for information

x———————x———————–x

[1] 18. Preparation and Sanction of Schemes

(1) Where an order is made under sub-section (3) of section 17 in relation to any sick industrial company, the operating agency specified in the order shall prepare, as expeditiously as possible and ordinarily within a period of ninety days from the date of such order, a scheme with respect to such company providing for any one or more of the following measures, namely:

[(a) the financial reconstruction of the sick industrial company;]

(b) the proper management of the sick industrial company by change in, or take over of, management of the sick industrial company;

[(c) the amalgamation of (i) the sick industrial company with any other company, or (ii) any other company with the sick industrial company; (hereafter in this section, in the case of sub-clause (i), the other company, and in the case of sub-clause (ii), the sick industrial company, referred to as “transferee company”;]

(d) the sale or lease of a part or whole of any industrial undertaking of the sick industrial company;

[(da) the rationalisation of managerial personnel, supervisory staff and workmen in accordance with law;]

(e) such other preventive, ameliorative and remedial measures as may be appropriate;

(f) such incidental, consequential or supplemental measures as may be necessary or expedient in connection with or for the purposes of the measures specified in clauses (a) to (e).

(6A) Where a sanctioned scheme provides for the transfer of any property or liability of the sick industrial company in favour of any other company or person or where such scheme provides for the transfer of any property or liability of any other company or person in favour of the sick industrial company, then, by virtue of, and to the extent provided in, the scheme, on and from the date of coming into operation of the sanctioned scheme or any provision thereof, the property shall be transferred to, and vest in, and the liability shall become the liability of, such other company or person or, as the case may be, the sick industrial company.]

“IV. TERMS AND CONDITIONS

2. It is further agreed that while APPL will take over all the liabilities pertaining the workmen/employees of Sir Padampat Research Centre, as determined as per Annexure B even though the SPRC unit will not be transferred to APPL and will be retained by JKSL.

3. The APPL will operate the Kota Complex .in the name and style of Arfat petrochemical Pvt. Ltd. (APPL) as a new company and new employer. They will issue their appointment letters as per requirements in a phased manner subject to suitability and covering terms of employment etc. The dues of employment under JKSL would be settled as full and final payment as summarized in Annexure-A.

“…This has reference to meeting with your goodself on 04/01/2006 regarding Bifurcation and Transfer of Lease Hold Land of J.K. Synthetics Limited, Kota to M/s Arafat Petrochemical Pvt. Ltd.

We request your goodself for an expeditious approval-

(c) for split of lease deed dated 06/10/1982 in to 2 portions – one covering area of 37.16 acres pertaining to SPRC which is not to be transferred as the same will continue in the name of JKSL and another for balance land.

(d) Permission to transfer to APPL all the remaining land except the aforesaid 37.16 Acres.

We once again request your good self to kind accord you approval in the above matter.”

i) 1st Deed: Plot No. 5A of 48.40 acres, meant for setting up a nylon plant and colony;

ii) 2nd Deed: Plot No. 5B of 7.15 acres, for conducting R&D on acrylic fibre;

iii) 3rd Deed: Plot No. 5C of 14.45 acres, for setting up a nylon tyre and cord plant;

iv) 4th Deed: Plot Nos. 16, 17, & D of 30.56 acres, for setting up a polyester staple fibre plant;

v) 5th Deed: Plot Nos. 23-30, A-C, of 70.66 acres, for construction of CDPH roads;

vi) 6th Deed: Plot Nos. 19-21B, 32B, 33, 34 & F of 26,16 acres, for setting up another acrylic/staple fibre plant;

vii) 7th Deed: Plot Nos. 19-21A, 22, 31, 32A & F1 of 29.77 acres, for setting up a synthetic staple fibre plant.

The terms of the lease deeds were largely pari materia. The relevant portion, contained in each of these fresh leases granting the land to Respondent No. 1, and relevant for our purposes, are as follows:

“NOW THIS INDENTURE WITNESSETH as follows:

(iii) That the lessee shall set up, construct, erect and build on the plot only such buildings, sheds and structures as are required by him for setting up the industry aforesaid and also such other residential quarters as are required for those: engaged or to be engaged in the said factory.

(iv) The lessee agrees not to construct or build any structures or buildings on the said plot of land or on a portion of it which may have the object. of using it as a commercial undertaking other than for the industry promotion aforesaid of or which the said plot has been leased to the lessee.”

“9 Identification of JV Partner

9.1 The Arfat Group are identified by JKSL after an extensive search undertaken by the Company with the help of M/s Access International (Access) a Boston based consultancy Company…

9.2 Disposal of individual assets of Kota units was not possible or practical without resolution of the on-going labour disputes and settlement of labour liabilities. One the important consideration for revival was assumption of the labour liability by the prospective buyer as workers dues were very high and without settlement of the same revival was not possible. Therefore, in order to evaluate the offers received. It was decided by the Company in consultation with Access to analyse them on the basis of Quantum offer no. of units being restarted total no. of jobs being created and willingness of the higher regarding resolution of labour disputes and assumption of labour liabilities.”

[2] CA Nos. 8597-8599 of 2010.

“12. Several contentions have been raised by both sides during the course of hearing of these Appeals which we have not adverted to as they are not relevant for adjudication of the dispute in these appeals. We express no opinion on the jurisdiction of BIFR under other provisions of the Act. It is open to the BIFR to review the implementation of the Sanctioned Scheme and pass suitable directions.”

(a) Article 138 of the AoA of RIICO did not have statutory force and a third party could not be adversely impacted by decisions made or directions issued under it;

(b) Even if Article 138 had statutory force, the manner in which the approvals and permissions accorded to Respondent No. 1 were quashed and set aside, was arbitrary, unreasoned, and unconstitutional due to falling afoul of Article 14 of the Constitution;

(c) Respondent No. 1 had not even been issued a show cause notice nor given a chance to defend itself. Thus, the Principles of Natural Justice had not been followed in the process of cancelling the allotment;

(d) The procedure under the 1979 Rules had to be followed, as the LIA, Kota had been transferred to RIICO under the 18.09.1979 Order.

i) The question as to whether RIICO could be directed under Article 138 of the AoA to carry out actions which may abrogate the fundamental rights of a third party was of vital importance. It required the Division Bench to adjudicate the dispute, rather than a Single Judge;

ii) The decision made by the State Government to direct RIICO to cancel the allotment of land to Respondent No. 1 was without following due procedure, and hence, a Writ under Article 226 of the Constitution was maintainable against this measure;

iii) The Government Order dated 18.09.1979, allocated all industrial areas in the State of Rajasthan to RIICO for the purpose of overseeing and facilitating their development. Whatever course of action was taken in respect of these lands from this point onwards would have to be under the 1979 Rules. These Rules had been completely ignored by the State Government and its authorities while quashing the supplementary leases and the conversion;

iv) The conversion of land was permissible under the Master Plan for the LIA, Kota. RIICO, given it was now in charge of these lands, had the authority under the 1979 Rules read with the Master Plan to allow conversion of land, if it was deemed necessary and appropriate;

v) There was no reason assigned by the Cabinet Committee for its conclusion on 03.08.2019 that the leases required cancellation. The Supreme Court in Mohinder Singh Gill v. The Chief Election Officer, (1978) 1 SCC 405. had laid down that reasons behind certain actions had to be included in the final decision itself and could not be subsequently supplemented via affidavits. A change of government could not be a permissible catalyst for abrogation of the decisions made by the previous government. Further, Respondent No. 1 was kept in the dark about the deliberations throughout and had no forum to advocate its case for why the allotment and conversion of land were legally sound;

vi) The claim that the permission for conversion of the land from industrial use to commercial use violated the Model Code of Conduct was suspect, as no other similarly granted approvals had been set aside on this basis. It appeared that Respondent No. 1 had been specifically singled out and targeted;

vii) Respondent No. 1 had already spent significant amounts on the development of land, based on the supplementary lease deed and conversion that had been granted earlier. Hence, the doctrine of legitimate expectations and estoppel would operate against the State and its authorities from reneging on this arrangement;

viii) The workers unions had failed to put in an appearance during the arguments, and their submissions could not be considered as a result.

i) The land allotted to Respondent No. 1 in LIA, Kota, always remained with the State Government and was never allocated to RIICO despite the Order dated 18.09.1979 regarding industrial lands being moved under the control of RIICO. Various communications and activities by RIICO over the years indicate that it was also aware of this fact. Hence, RIICO had no authority to consider the proposal by Respondent No. 1 for changing the usage of the land from industrial to commercial;

ii) When the fresh set of lease were executed with Respondent No. 1 pursuant to the AAIFR scheme and rehabilitation plan for JKSL, the agreements were signed by the District Collector, Kota. RIICO was not involved in this process. Respondent No. 1 had, in fact, acted all along in a manner which acknowledged the District Collector and the state revenue authorities were always managing the affairs of the subject – area;

iii) The land in question was to be regulated through the 1959 Rules rather than the 1979 Rules. This was because, as RIICO and Respondent No. 1 had already accepted through their conduct over decades, that the State Government retained control over LIA, Kota. Hence, only the State of Rajasthan through the District Collector, Kota, and not RIICO, could have considered the proposal for conversion of the land and the execution of supplementary lease deeds. Rule 12 of the 1979 Rules clearly envisaged that the newly inserted provisions would be applicable only to leases that were signed prospectively. In this instance, JKSL had already been put in charge of the area in LIA, Kota, under the 1959 Rules;

iv) Rule 8 of the 1959 Rules clearly states that the land in question is not to be used for any purpose other than the objective of industrial development. It is only with express authorization of the State Government that the usage can be changed. Rule 9 of the 1959 Rules mandates that permission of the government be taken when seeking subdivision of plots as well. Hence, this procedure had to be followed mandatorily by Respondent No. 1 if it desired the alteration of use of land and corresponding subdivision;

v) RIICO has never raised any demand for lease rent or service charges from Respondent No. 1. From the series of documents and communications, as already reproduced earlier, it is evident that RIICO had the same opinion regarding its own lack of authority and jurisdiction over the land in question. The land remained with the State Government at all times;

vi) Respondent No. 1 had abjectly failed to fulfil its obligation to revive the industrial units at LIA, Kota. The mandatory terms of the rehabilitation plan by AAIFR had not been complied with and, as per SICA, the consequence of this default had to be the winding up of the company;

vii) The permission for conversion of the land from industrial to commercial was meant to benefit Respondent No. 1 and frustrate the purpose for which the land had been allotted in the first place. The prior government and Respondent No. 1 had acted in concert to hastily push through the process for changing the usage of the land, in defiance of the AAIFR scheme as well as the Model Code of Conduct, causing a loss to the public exchequer and stymying the industrial development of the Kota region;

viii) The new government was well within its rights to examine the decisions by the previous ruling class, as held by this Court in Krishna Ballav Sahay & Ors. v. Commission of Enquiry & Ors., [1969] 1 SCR 387 Further, Article 138 of the AoA of RIICO explicitly gave power to the State of Rajasthan to issue directions to it for carrying out certain measures. This included the cancellation of the supplementary lease deed with Respondent No. 1 and the setting aside of the permission to convert the lands usage. A similar clause to Article 138 is contained in the Articles/Memorandum of almost every government controlled entity, and has been upheld in Management of Fertilizer Corporation of India v. Their Workmen, [1969] 2 SCR 706 and subsequently affirmed by a Constitution Bench in Sukhdev Singh & Ors. v. Bhagat Ram & Ors., (1975) 1 SCC 421;

ix) As an arguendo, even if the land was deemed to be allocated to RIICO as per the Order dated 18.09.1979 and the Corporation was the competent authority to issue approvals and permissions vis-a-vis LIA, Kota, there was still no infirmity in the directions issued by the State of Rajasthan under Article 138 of the AoA. The State Government retained complete discretion to order RIICO to act according to its diktats in public interest;

x) RIICO itself had subsequently taken a decision to not allow any conversion in terms of the usage of land. This deliberation took place following the filing of Public Interest Litigations before the Rajasthan High Court. The final decision to freeze any further conversions of this nature was issued on 05.07.2019 to the State Government and all RIICO unit offices across the state. Following this, the permissions granted to Respondent No. 1 for changing the land to commercial utilization and sub-division of the plot for this purpose, were both withdrawn on 22.07.2019 and 25.07.2019, respectively. The supplementary lease deed was then cancelled on 11.10.2019;

xi) There is no guarantee contained anywhere in the 1959 Rules, or even the 1979 Rules for that matter, against a change in policy by the Government. It is entirely permissible for the government to act in accordance with changing realities, especially when there is a clear case of public property being utilized for private gain, with the collusion of the erstwhile Executive Authorities and the management of RIICO;

xii) There can be no question of estoppel against statute. The money spent by Respondent No. 1 on the land would not validate the contravention of the Master Plan for the LIA, Kota. The Plan clearly contemplated a purely industrial area which was undermined by Respondent No. 1s desire to set up commercial enterprises instead.

xiii) Respondent No. 1 had failed to show in concrete terms, the exact investments it had carried out on the land. Its equitable entitlement to seek restoration of the earlier decision permitting conversion of the land had not been proved from the records. Even if there was some merit to such claim, this Court in Motilal Padampat v. State of Uttar Pradesh, (1979) 2 SCC 409 had ruled that estoppel would be overridden by supervening public interest and provisions of binding statutes and/or rules;

xiv) The transfer of the case from the Single Judge to the Division Bench by the then-Learned Chief Justice was unjustified and irregular under the Rules of the High Court of Judicature for Rajasthan, 1952. On this procedural ground as well, the impugned judgment was unsustainable.

i) The Cabinet Committee decision dated 03.08.2019 was solely taken to single out Respondent No. 1 and cancel the permissions/approval accorded by RIICO during the regime of the earlier government. The reasons for the cancellation were never provided and do not exist in either the file or the final decision. The grounds for cancellation were never mentioned subsequently either. All the reasons eventually cited by the Appellants before the High Court, were merely afterthoughts, such as:

a) The Model Code of Conduct being in force;

b) The sub-division of plots of change of use could not have been granted by RIICO and the Corporation did not possess the ability to transfer lands;

c) Only the Collector had the power to grant permissions.

ii) The Model Code of Conduct is irrelevant, as the application for conversion of the land to commercial, and permission for sub-division, was filed in August 2018, much before the election process even began. In between, there were several other decisions taken by the same Land Planning Committee and Infrastructure Development Committee none of which were cancelled. Even in regard to the Land Planning Committee, several other proposals were considered and granted during the same period when Respondent No. 1s application was pending. There were around 70 cases approved in September 2018, as well as December 2018, apart from Respondent No. 1s. None of these have been subsequently annulled by the Appellants, clearly showing that this is an act of pure arbitrariness and the arguments raised on the Model Code of Conduct are nothing but a lame excuse;

iii) There are 30 other instances of conversion in which RIICO has acted as the competent authority to grant permission, from 1996 to 2019. Out of these 30, 3 of the cases are from LIA, Kota. These three cases involved conversion of 100% of the land to commercial usage, as opposed to Respondent No. 1 which only sought conversion of 23%. The residential colonies that have been raised by Respondent No. 1 have not been objected to by the State. Further, as recently as in 2022, RIICO has been demanding lease rent and service charges from Respondent No. 1, clearly showing that it is in charge;

iv) The Collector had only signed the initial transfer lease deeds of 2007 with Respondent No. 1 because the lease deeds in question were not fresh leases, but were executed for the remainder of the term of the already subsisting lease in favour of JKSL. The AAIFR scheme referred to the consent of the state government, which also necessitated the Collectors participation. This was the only reason for the 2007 deeds to have been executed with the Collector and not RIICO;

v) It is very clear that the land in LIA, Kota, had been transferred and allotted to RIICO and the Corporation was considered to be the sole authority, even by the State Government, which was capable of dealing with the land. The Order dated 18.09.1979 by the State Government states that industrial areas are to be transferred, pursuant to which the Joint Director of Industries allotted the land to RIICO on 28.09.1979 by an order.

vi) Under Section 100 of the Rajasthan Land Revenue Act, the State Government had framed the 1959 Rules, which were meant to govern the allotment of industrial plots across the state and the grant of leases over these areas. The 1959 Rules, were purposefully amended with insertion of Rules 11A & 12. Rule 11A states that industrial lands are to be allocated to RIICO for industrial development, and under Rule 12, the Company is empowered to further distribute land via leases to different entrepreneurs for development. Therefore, the allotment to RIICO is a statutory allotment, validated by the Rajasthan Land Revenue Act, and the 1959 Rules;

vii) Respondent No. 1 acted pursuant to the approvals granted by RIICO and, hence, Appellants are now bound by the principles of Promissory Estoppel and Legitimate Expectations. Respondent No. 1 has invested around Rs. 137.75 Crores in the LIA, Kota, and has also paid off the labour dues of the Appellant Unions, as agreed upon in the tripartite settlement agreements;

viii) As Respondent No. 1 has acted on the presumption that RIICO had validly approved the conversion of land and the sub-division of the plots, there is no scope for cancellation subsequently. Promissory estoppel squarely applies in favour of Respondent No. 1, and the Motilal Padampat (Supra) decision cited by Appellants is, on the contrary, beneficial to Respondent No. 1s position;

ix) The alteration in the ruling government cannot be the reason behind the cancellation of a decision taken by the earlier government. Such behaviour is arbitrary, discriminatory, and untenable in law. This Court in State of Tamil Nadu v. Shyam Sunder, (2011) 8 SCC 737 had held that an instrumentality of the State cannot have a case whereby it pleads contrary to the position adopted by the State itself. Policies adopted in regard to certain projects should not keep altering as per changing governments. In a matter of governance of a State or with the execution of a decision taken by the prior ruling establishment, when the decision in question does not involve political philosophy, the succeeding government is required to see it through to its logical conclusion;

x) Governments cannot blow hot and cold and are not permitted to approbate and reprobate. RIICO had already taken a detailed decision, in compliance with the 1979 Rules which are the applicable regulations. They cannot resile from this on flimsy grounds which are merely afterthoughts. Governance is a continuous process and under the Constitution, there is no general power of review available to any government to examine, set aside, and recall the decisions of the earlier government. The Appellants reliance on Krishna Ballav Sahay (Supra) is also misplaced as that case concerned an inquiry being conducted on the basis of serious allegations of corruption against government officers/ministers. It was only after these facts were ascertained did the government reverse the decision by the earlier ruling party. In the present scenario, no such allegations have been made and no inquiry was conducted either;

xi) The Appellants were also obliged to follow the Rules of Business framed under Article 166(3) of the Constitution when implementing their policies, which was once again bypassed entirely. Rule 5 of the Rules states that the Governor, acting on advice from the Chief Minister, will allocate business of the government to various Ministers and assign specific departments to their portfolio. Rule 9 goes on to require the Minster in charge of a particular department to be primarily responsible of carrying out business under that department. Under Schedule I of the Rules of Business, the Minister for Industries is to take decisions in matters connected to RIICO and industrial matters such as the cancellation of the supplementary lease deeds and/or revocation of permissions. The final decision of 03.08.2019 which directed the cancellation in question did not include participation by the Minister for Industries. Further, the decision needed to be placed before the Chief Minister for authentication before it was finally issued. This Court, in MRF v. Manohar Parrikar & Ors, (2010) 11 SCC 374. has cemented the mandatory nature of the Rules of Business;

xii) Article 138 of the AoA of RIICO could not have been resorted to for directing cancellation of the supplementary lease deed and permission for using the land for commercial purposes. Such clauses in the Articles are for generally setting out the policy of the Company and not to make decisions that affect the rights of third parties. The cases relied upon by the Appellants to uphold the ability to issue orders to RIICO under Article 138 of its AoA, are unhelpful as the facts in those instances dealt with indoor management of the corporations in question. The action(s) taken in the present case do not concern an internal matter of RIICO, but rather the abrogation of validly procured permissions and vested rights that had accrued to Respondent No. 1. An elaborate procedure for cancellation is already provided under the 1979 Rules, which needed to be followed if such drastic measures were to be taken. Unbridled and unfettered powers cannot be granted to the State Government to issue instructions to RIICO in this manner as it may be used brazenly and without paying heed to any procedure under law. The State Government has abused this alleged power which it claims to have been always vested in it;

xiii) This Court has already held in B. Rajagopala Naidu v. State Transport Appellate Tribunal, Madras & Ors., (1964) 7 SCR 1 that powers such as those provided under Article 138 of RIICOs AoA cannot be used as appellate powers to take vengeance against specific entities. Such provisions do not accord a carte blanche authority to quash earlier decisions taken by RIICO, for oblique and unspecified reasons. Moreover, such an action is clear evidence of malice in law, as it is blatantly arbitrary and discriminatory, as described by this Court in Kalabharati Advertising v. Hemant Vimalnath Narichania & Ors., (2010) 9 SCC 437;

xiv) The Order of 18.09.1979 had stated, in unequivocal language, that all industrial areas would be transferred to RIICO and this included the LIA, Kota. This decision was given effect to by the Joint Director on 28.09.1979 and the area over which Respondent No. 1 retained a lease came under the control of RIICO. The 1979 Rules were brought into force in the same year, and were meant to provide guidelines on the basis of which RIICO would carry out its functions, including permissions for sub-division, change of land use, and allotment of industrial areas.

xv) The State Government has, in fact, taken a stand in SLP (Civil) No. 8552 of 2021, filed in respect of neighbouring land situated in the same industrial area, whereby it accepts the transfer of such lands to RIICO has already taken place. It has acknowledged that RIICO has stepped into the shoes of the State Government and the Corporation provides services that are similar to that of a civic body or municipal corporation in the areas managed by it. That is why Rule 12 was specifically inserted into the 1959 Rules, to accord all powers that the State Government would have had, to RIICO as well. Hence, the Corporation steps into the shoes of the government;

xvi) Further, as the 1979 Rules were mentioned in the 1959 Rules in Rule 12, the 1979 Rules were specifically incorporated into them. The 1979 Rules were not only given statutory recognition by virtue of this mention in the 1959 Rules, but additionally, all the allotments done under the 1979 Rules also received statutory endorsement and recognition;

xvii) In a similar matter concerning the Bharatpur Industrial Area, an allotment had been made by the Collector to Perfect Potteries. The lease stated that no use other than industrial use would be permissible. However, subsequently, the industrial area was transferred to RIICO and the Corporation granted permission for subdivision and conversion of the land. The Collector had terminated the lease as a result. The matter was referred to a High-Level Committee of the State of Rajasthan presided over by the Chief Secretary and comprising of the Advocate General, Principal Secretary of Law, Principal Secretary of Industries, and others. The Committee held that by virtue of the insertion of Rule 12 of the 1959 Rules, the actions taken by RIICO were valid and the Collectors order of termination was to be set aside. The relevant extracts of the Committees decision are as follows:

“DECISION OF THE COMMITEE

After due deliberations, Members of the Committee were of the opinion that RIICO Is having undisputed jurisdiction. In the matter of all those industrial areas which were notified/developed by the State Government and came to be transferred to RIICO vide order dated 18.09.1979 and in view of subsequent amendment in Rajasthan Industrial Area Amendment Rule, 1959 vide notification dated 13.07.1982 by Insertion of rule 12.

In view of the above, it was decided by the committee that the order dated 22.08.2019 of Collector Bharatpur needs to be set aside. For this purpose, RIICO should file a revision petition before the Govt. of Rajasthan in Revenue Department through Pr. Secretary, Revenue for consideration of the matter.

The meeting ended with a vote of thanks to the chair.

x x x

xviii) There has also been an admission on oath before the Rajasthan High Court in another similar matter.[3] The affidavit submitted before the High Court lays out the following in terms of the States position: a) RIICO has been authorized to act in accordance with the 1979 Rules in respect to industrial plots. The Rules themselves have acquired statutory force by virtue of reference to these Rules in statutory legislations/enactments. Given this, no other authority would be able to interfere in the sphere of activities that are regulated under the 1979 Rules; b) RIICOs own authority derives from Rules 11A and 12 of the 1959 Rules, by virtue of which the State Government had vested the responsibility to develop industrial areas upon the Corporation; (c) RIICO, as a public sector undertaking, would not have been able to function in the manner in which it does if express authorization had not been provided.

[3] Annex. R-47: D.B. WP (Civil) No. 19102 of 2018, “Ravindra Sharma v. State of Rajasthan & Ors.” Add. Affidavit on behalf of Respondents, by Mr. Rajendra Singh, Dy. Comm., JDA, Jodhpur.

xix) The change of use of the land was permitted under the Master Plan. As the 1979 Rules were applicable by virtue of the 18.09.1979 Order transferring industrial lands to RIICO, the Corporations only obligation was to ensure that the sub-division and alteration of the utilization of the land was in consonance with said Rules read with the Master Plan. Moreover, the State of Rajasthan itself issued a circular on 19.03.2003 allowing conversion of industrial land for other purposes in order to promote economic growth, in light of the recession that had taken hold at the time;

xx) The initial agreement for transfer of the lands from JKSL to Respondent No. 1 was signed by the Collector, not because the State Government still had control, but rather because those were the requirements under SICA and the AAIFR scheme. Rule 9(iv) of the 1959 Rules had required a lessee which was declared a “sick company” under SICA, at that time JKSL, to seek permission from the State Government for transfer of its lease rights to a third entity. The permission was manifested through the District Collector, Kota, under the aegis of the AAIFR scheme. This was not a fresh lease, but only an extension of the already existing period of the subsisting lease. Hence, this was not an acknowledgement of any kind by Respondent No. 1 that the State of Rajasthan retained control over the land and was merely a procedural requirement that was being fulfilled under the 1959 Rules, due to JKSLs status as a sick company. Respondent No. 1 has consistently acted in consonance with the approach that RIICO has control over the land and the corresponding power to take further measures in respect of it, such as for conversion of use and subdivision of plots;

xxi) The letter dated 12.01.1995 relied upon by Appellants as a proof that the title over the land was retained by the State Government was later overridden by a letter dated 31.03.1995. By virtue of this letter, the files of transferred lands were directed to remain with RIICO;

xxii) The Jan Aavas Yojana scheme under which Respondent No. 1 had applied to the Collector, was purely because it was mandatory to do so under the Scheme itself. In no way does this act as an acceptance that the Collector and the State Government were in charge of the land in LIA, Kota. In fact, the Collector had sought the opinion of RIICO in the matter, clearly showing the Collectors own conviction that consent needed to be sought from the Corporation;

xxiii) The lack of a show cause notice or an opportunity to Respondent No. 1 to defend itself is fatal to the Appellants case. Swadeshi Cotton Mills v. Union of India, (1981) 1 SCC 664. had made clear the need for principles of natural justice to be followed even for administrative decisions. A process for cancellation was provided already under Rule 24(1) of the 1979 Rules, which had to be adhered to.[4]

[4] 24. CANCELLATION

The Corporation shall have the right to cancel the plot allotment after issuing a 45 days registered AD show cause notice to the allottee by the concerned Sr. DGM / Senior Regional Manager / Regional Manager for breach of any of these rules, condition of allotment letter or terms of lease agreement. The powers of plot cancellation shall vest with the Unit Head for all categories of the land/plot allotments except for the land/plots allotted under Rule 3(W).

In show cause notice the allottee would be asked to show cause why the plot allotment should not be cancelled, lease deed of the plot should not be terminated and plot should not be taken in possession, in view of the default committed by the allottee. In the notice it would also be clarified that, the said default shall be condoned only on payment of interest/retention charges or removal of breach of terms and conditions/ its regularisation. In case of no response or reply to the show cause notice without commitment for deposition of dues, for regularisation of delay / default or removal of breach of terms and conditions by the allottee, allotment of plot should be cancelled terminating the lease-deed of plot.

xxiv) The Appellants are making unfounded allegations regarding placement of the Writ Petition filed by respondent No.1 before Division Bench of the High Court. The Chief Justice being Master being Master of the Roster, was competent to enlist any matter before a Single or Division Bench. Challenge to Article 138 of AoA was an issue of paramount public importance, hence the case was rightly placed before a Division Bench.

xxv) The arguments regarding the failure of the AAIFR scheme were irrelevant and beside the point. This Court in its earlier order in the context of the petitions filed by the workers unions had already affirmed that SICA would not apply to Respondent No. 1, given it was not a “sick company”. The land in question had been obtained as part of the AAIFR scheme by way of auction, but that did not mean that the BIFR or AAIFR itself would have jurisdiction over Respondent No. 1.

xxvi) As far as the SLPs filed by the Appellant Unions were concerned, the Supreme Courts earlier orders on 17.08.2017 and 06.03.2018 dismissing their Review Petitions had put a quietus to that issue. Respondent No. 1 had paid the workers their agreed upon dues under the AAIFR scheme and no further directions could be issued to it in terms of the rehabilitation plan.

i) The act of the new government, following elections, going into the decisions of the earlier ruling party is legally acceptable. Respondent No. 1 had failed to prove the alleged mala fide intent behind the cancellation of the supplementary lease deed and the quashing of the approval for sub-division and conversion of the usage of land;

ii) There is no fetter on the power provided under Article 138 of the AoA of RIICO to issue directions to the Corporation. In terms of the requirement for reasons to be provided, Justice Chinnappa Reddys opinion in Sachidananda Pandey v. State of West Bengal & Ors., (1987) 2 SCC 295 outlined that the process, deliberations, and minutes of the meeting preceding a decision would be taken into account when ascertaining the reason for a particular measure to be taken. Contrary to Respondent No. 1s position, the entire rationale did not have to be laid out in the conveyance of the final verdict;

iii) It is only the subsequent government that is competent and capable of looking into the decisions taken by the previous regime. The current government had all the authority and rights to examine earlier decisions, and annul them if irregularities were discovered. The State Government has acted in pursuance of its mandate and obligation in this matter;

iv) RIICO is nothing more than a company and the 1979 Rules are framed under its AoA. These Rules are subject to statutory mandates and requirements. The 1979 Rules are nothing more than a set of internal regulations of RIICO and are not comparable to the 1959 Rules that were enacted under the Rajasthan Land Revenue Act, 1956. This Court in Life Insurance Corporation of India v. Escorts Ltd. & Ors., (1986) 1 SCC 264 has emphasized the character of such companies and the conduct of their business via the AoA and internal rules made in furtherance of the Articles;

v) Rule 11A is the appropriate provision in the 1959 Rules to govern the usage and utilization of the land. Since the land in question was never transferred to RIICO, RIICO could not have acted under the 1979 Rules at all. The State Government always continued to manage and control the subject land under the 1959 Rules.

i) The unions have challenged the initial transfer lease deed to Respondent No. 1 signed in 2007. This petition has been pending before the HC and its outcome will have a knock-on effect on all other proceedings initiated thereafter. This includes the SLPs before us;

ii) The Appellant Unions had accepted the AAIFR scheme only on the basis that the industrial units at LIA, Kota, would be restarted. The workers had been owed over Rs. 250 Crores in dues, of which they had agreed to take only a small portion as the rehabilitation plan envisaged the restarting of the units and consequent employment for them. As the plan had abjectly failed and Respondent No. 1 was unsuccessful in restarting production, the labourers were owed the entirety of their dues.

(a) lease deeds in favour of JKSL had been already executed in the year 1967 before Rule 12 came into force;

(b) no part of the land in dispute was ever allotted to RIICO under Rule 11A of the 1959 Rules;

(c) Respondent No. 1 is a substitute of JKSL and that is why fresh lease deeds were executed in favour of Respondent No. 1 only for the remainder of the period of the already subsisting lease;

(d) There was no independent lessor – lessee relationship between the State Government and Respondent No. 1 except that Respondent No. 1 substituted JKSL pursuant to AAIFR order;

(e) the non-applicability of second part of Rule 12 was reinforced when transfer lease deeds were executed in favour of Respondent No.1 in 2007 by the State Government through the Collector and not by RIICO;

(f) We are informed that even lease rent has also been deposited by Respondent No. 1 continuously for years post 2007 with the Tehsildar, Kota, and not with RIICO; and

(g) There has been no formal agreement as lessee and sublessee between RIICO and Respondent No. 1 with the concurrence of State Government.

“9. Corporation, in its widest sense, may mean any association of individuals entitled to act as an individual. But that certainly is not the sense in which it is used here. Corporation established by or under an Act of Legislature can only mean a body corporate which owes its existence, and not merely its corporate status, to the Act. For example, a Municipality, a Zilla Parishad or a Gram Panchayat owes its existence and status to an Act of Legislature. On the other hand, an association of persons constituting themselves into a Company under the Companies Act or a Society under the Societies Registration Act owes its existence not to the Act of Legislature but to acts of parties though, it may owe its status as a body corporate to an Act of Legislature.”

” 10…In other words the position seems to be that the institution concerned must owe its very existence to a statute which would be the fountainhead of its powers. The question in such case to be asked is, if there is no statute, would the institution have any legal existence. If the answer is in the negative, then undoubtedly it is a statutory body, but if the institution has a separate existence of its own without any reference to the statute concerned but is merely governed by the statutory provisions it cannot be said to be a statutory body…”

“12. Learned Counsel for the appellants has raised the following contentions in support of his case:

1. Regulation 19(7)(xvi) of Maharashtra Regulations which is a statutory regulation makes it obligatory for the Municipal Council to follow the provisions of the Code. The Code itself may be non-statutory but the mandate to follow the Code flows from Regulations 19(7)(xvi) of the Maharashtra Regulations which is mandatory. The field having been occupied by the Code under the statutory-mandate, no bye-law to the contrary could be framed by the Municipal Council.

13. When the Code was enforced in the year 1963, the Act and Regulations were holding the field in Vidarbha Division. Under the Act and the Regulations the age of superannuation being 60 years, the Code, while fixing 58 years as the age of superannuation for rest of Maharashtra, permitted the Vidarbha teachers to superannuate on attaining the age of 60 years. The Maharashtra Act which came into force on January 1, 1966 repealed the Act and the regulations. In Baboolal’s case (AIR 1974 Bom 219) the High Court referred to the repealing and saving section of the Maharashtra Act and came to the conclusion that there was no provision thereunder to save the regulations. Assuming that the Regulations under the Act stood repealed, the Code which was framed by the Maharashtra Government continued to hold the field. It is not disputed by the learned Counsel for the appellants that the Code by itself is not statutory and is in the nature of executive instructions. But he strongly relies on Regulation 19(7)(xvi) of Maharashtra Regulations and contends that the said Regulation makes it obligatory for the Municipal Council Hinganghat to follow the provisions, of the Code. It is for the State Government to frame the Code in whatever’ manner it likes but once the Code is in operation its provisions have to be followed by the Municipal Council Hinganghat under the mandate of Regulation 19(7)(xvi) of Maharashtra Regulations. We see considerable force in the argument of the learned Counsel. The Code has been framed with the purpose of bringing security of service, uniformity, efficiency and discipline in the working of non-Government High Schools. It has to be applied uniformly to the schools run by various Municipal Councils in the State. It is no doubt correct that the Municipal Councils have the power to frame bye-laws under the Maharashtra Municipalities Act, 1965 but if the field is already occupied under the mandate of statutory Maharashtra Regulations, the Municipal Council cannot frame bye-laws to the contrary rendering the mandate of the Maharashtra Regulations Nugatory. We are of the view that the Municipal Council Hinganghat has out stepped its jurisdiction in framing bye-law 4 of the bye-laws. We, therefore, direct that the conditions of service of the appellants shall be governed by the Code as enforced by Regulation 19(7)(xvi) of the Maharashtra Regulations. Bye-law 4 of the byelaws shall not be applicable to the appellants.”

“27. Dr. Singhvi cited before us the well-known decisions of this Court… to urge that even an administrative decision must be arrived at after taking into account all relevant considerations and eschewing irrelevant considerations and that the reasons for an order must find a place in the order itself and those reasons cannot be supplemented later by fresh reasons in the shape of an affidavit or otherwise. The submission was that neither the Cabinet memorandum of January 7, 1981 nor the Cabinet Memorandum of September 9, 1981 revealed that relevant considerations had been taken into account. What was not said in either of the Cabinet Memoranda, it was said, could not later be supplemented by considerations which were never present to the mind of the decision making authority. We do not agree with the submission of Dr. Singhvi. The proposition that a decision must be arrived at after taking into account all relevant considerations, eschewing all irrelevant considerations cannot for a moment be doubted. We have already pointed out that relevant considerations were not ignored and, indeed, were taken into account by the Government of West Bengal. It is not one of those cases where the evidence is first gathered and a decision is later arrived at one fine morning and the decision is incorporated in a reasoned order. This is a case where discussions have necessarily to stretch over a long period of time. Several factors have to be independently and separately weighed and considered. This is a case where the decision and the reasons for the decisions can only be gathered by looking at the entire course of events and circumstances stretching over the period from the initiation of the proposal to the taking of the final decision. It is important to note that unlike Mohinder Singh Gills case where that Court was dealing with a Statutory Order made by a statutory functionary who could not therefore, be allowed to supplement the grounds of this order by later explanations, the present is a case where neither a statutory functions nor a statutory functionary is involved but the transaction bears a commercial though public character which can only be settled after protracted discussion, clarification and consultation with all interested persons. The principle of Mohinder Singh Gills case has no application to the factual situation here.”

” 12…But the extent and application of the doctrine of natural justice cannot be imprisoned within the strait-jacket of a rigid formula. The application of the doctrine depends upon the nature of the jurisdiction conferred on the administrative authority, upon the character of the rights of the persons affected, the scheme and policy of the statute and other relevant circumstances disclosed in the particular case.”

“13. The dividing line between an administrative power and a quasi-judicial power is quite thin and is being gradually obliterated. For determining whether a power is an administrative power or a quasi-judicial power one has to look to the nature of the power conferred, the person or persons on whom it is conferred, the framework of the law conferring that power, the consequences ensuing from the exercise of that power and the manner in which that power is expected to be exercised. Under our Constitution the rule of law pervades over the entire field of administration. Every organ of the State under our Constitution is regulated and controlled by the rule of law. In a welfare State like ours it is inevitable that the jurisdiction of the administrative bodies is increasing at a rapid rate.

The concept of rule of law would lose its vitality if the instrumentalities of the State are not charged with the duty of discharging their functions in a fair and just manner. The requirement of acting judicially in essence is nothing but a requirement to act justly and fairly and not arbitrarily or capriciously. The procedures which are considered inherent in the exercise of a judicial power are merely to facilitate if not ensure a just and fair decision. In recent years the concept of quasi-judicial power has been undergoing a radical change. What was considered as an administrative power some years back is now being considered as a quasi-judicial power…”

“17. Linked with this question is the question whether the failure to observe natural justice does at all matter if the observance of natural justice would have made no difference, the admitted or indisputable facts speaking for themselves. Where on the admitted or indisputable facts only one conclusion is possible and under the law only one penalty is permissible, the Court may not issue its writ to compel the observance of natural justice, not because it approves the non-observance of natural justice but because Courts do not issue futile writs. But it will be a pernicious principle to apply in other situations where conclusions are controversial, however, slightly, and penalties are discretionary.”

“9…This High Court, has in our opinion rightly held that the directions contained in orders dated November 16, 1976, and June 15, 1977, were invalid being contrary to the provisions contained in Rule 35 of the General Rules. Since the said orders were invalid, the petitioners would not claim any right on the basis of the said orders and, there was, therefore, no question of affording them an opportunity of a hearing before passing the order dated March 3,1980…”

“138. Directions and instruction of the Governor.

Notwithstanding anything contained in any of these articles, the State Government may from time to time, issue such directions or instructions as he may consider necessary in regard to the affairs of the conduct of the business of the Company or Directors thereof and in like manner may vary and annul any such direction or instruction. The Directors shall duly comply with and give immediate effect to director instruction so issued.”

“6 7… In the case on hand, we are required to examine the contentions of the appellants on this issue with reference to the Business Rules framed by Governor of Goa under Article 166(3) of the Constitution of India.

68. Rule 7(2) of the Business Rules of the Government of Goa states, that, no proposal which requires previous concurrence of Finance Department under the said Rule, but in which Finance Department has not concurred, may not be proceeded with, unless the Council of Ministers has taken a decision to that effect. The wordings of this Rule are different from the provisions of Rule 9 of the Business Rules of Maharashtra and have to be read in context with the provisions of Rule 3 of the Business Rules of Government of Goa which states that the business of the Government shall be transacted in accordance with the Business Rules. Under Rule 7(2) thereof, the concurrence of the Finance Department is a condition precedent.

69. Likewise Rule 6 of the Business Rules states, that, the Council of Minister shall be collectively responsible for all executive orders passed by any Department in the name of the Governor or contract made in exercise of the power conferred on the Governor or any other officer subordinate to him in accordance with the Rules, whether such orders or contracts are authorized by an individual minister on a matter pertaining to the Department under his charge or as the result of discussion at a meeting of the Council of Minister or otherwise. This Rule requires that an executive order issued from any department in the name of the Governor of the State should be known to the Council of Ministers so as to fulfil the collective responsibility of the Council of Ministers.

70. Further Rule 7 of the Business Rules requires that no Department shall without the concurrence of the Finance Department issue any order which may involve any abandonment of revenue or involve expenditure for which no provisions have been made in the Appropriation Act or involve any grant of land or assignment of revenue or concession, grant, lease or licence in respect of minerals or forest rights or rights to water, power or any easement or privilege or otherwise have a financial implications whether involving expenditure or not.

71. From a combined reading of the provisions of Rules 7, 3 and 6 of the Business Rules of the Government of Goa the conclusion would be irresistible that any proposal which is likely to be converted into a decision of the State Government involving expenditure or abandonment of revenue for which there is no provision made in the Appropriation Act or an issue which involves concession or otherwise has a financial implication on the State is required to be processed only after the concurrence of the Finance Department and cannot be finalized merely at the level of the Minister in charge…”

“PART-II ALLOCATION AND DISPOSAL OF BUSINESS

4. The Business of the Government shall be transacted in the Secretariat Departments specified in the First Schedule and shall be classified and distributed between those departments as laid down therein.

7. The Council shall be collectively responsible for all advice tendered to the Governor and also for all executive orders issued in the name of the Governor in accordance with these Rules, whether such advice is tendered or such orders are authorised by an individual minister on a matter appertaining to his portfolio or as a result of discussion at a meeting of the Council or a subcommittee thereof or howsoever otherwise.

9. Without prejudice to the provisions of Rule 7, the minister-in-charge or the minister of State-incharge of a department, shall be primarily responsible for the disposal of the business pertaining to that Department.”

“7…Article 166(1) and (2) expressly envisage authentication of all the executive action and shall be expressed to be taken in the name of the Governor and shall be authenticated in such manner specified in the rules made by the Governor. Under Article 166(3), the Governor is authorised to make the rules for the more convenient transaction of the business of the Government of the State, and for the allocation among Ministers of the said business insofar as it is not a business with respect to which the Governor is by or under the Constitution required to act in his discretion…”

” 104… Thus, Article 166(3) mandates the making of the Rules of Business for more convenient transactions of the affairs of the Government. Clause (1) stipulates the mode of expression of an executive action taken in conformity therewith and Clause (2) ordains the manner of authentication of the consequential orders and instruments. Having regard to the role assigned to the Council of Ministers with the Chief Minister at the summit, the Rules of Business framed Under Article 166(3) meant for convenient transaction of the affairs of the Government, by allocation thereof among the Ministers, secures their collective participation in the administration of the governance of the State. This scheme of executive functioning, assuredly thus, is in assonance with the constitutional edict with regard thereto, modelling the steel frame of the State machinery.”

” 8…It is generally agreed that ‘legitimate expectation’ gives the applicant sufficient locus standi for judicial review and that the doctrine of legitimate expectation to be confined mostly to right of a fair hearing before a decision which results in negativing a promise or withdrawing an undertaking is taken. The doctrine does not give scope to claim relief straightway from the administrative authorities as no crystallized right as such is involved. The protection of such legitimate expectation does not require the fulfilment of the expectation where an overriding public interest requires otherwise. In other words, where a person’s legitimate expectation is not fulfilled by taking a particular decision then decision maker should justify the denial of such expectation by showing some overriding public interest.”

“8. The mere reasonable or legitimate expectation of a citizen, in such a situation, may not by itself he distinct enforceable right, but failure to consider and give due weight to it may render the decision arbitrary, and this is how the requirement of due consideration of a legitimate expectation forms part of the principle of nonarbitrariness, a necessary concomitant of the rule of law. Every legitimate expectation is a relevant factor requiring due consideration in a fair decision making process. Whether the expectation of the claimant is reasonable or legitimate in the context is a question of fact in each case. Whenever the question arises, it is to be determined not according to the claimant’s perception but in larger public interest wherein other more important considerations may outweigh what would otherwise have been the legitimate expectation of the claimant. A bona fide decision of the public authority reached in this manner would satisfy the requirement of non-arbitrariness and withstand judicial scrutiny. The doctrine of legitimate expectation gets assimilated in the rule of law and operates in our legal system in this manner and to this extent.”

“24… But it is necessary to point out that since the doctrine of promissory estoppel is an equitable doctrine, it must yield when the equity so requires. If it can be shown by the Government that having regard to the facts as they have transpired, it would be inequitable to hold the Government to the promise made by it, the Court would not raise an equity in favour of the promise and enforce the promise against the Government. The doctrine of promissory estoppel would be displaced in such a case because, on the facts, equity would not require that the Government should be held bound by the promise made by it. When the Government is able to show that in view of the facts as have transpired, public interest would be prejudiced if the Government were required to carry out the promise, the Court would have to balance the public interest in the Government carrying out a promise made to a citizen which has induced the citizen to act upon it and after this position and the public interest likely to suffer if the promise were required to be carried out by the Government and determine which way the equity lies. It would not be enough for the Government just to say that public interest requires that the Government should not be compelled to carry out the promise or that the public interest would suffer if the Government were required to honour it…”

A. There has been 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;

B. 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;

C. 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;

D. The land was also never allotted to RIICO on a 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;

E. 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;F. 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;

G. 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;

H. The State Government was competent to issue directions under Article 138 of the AoA of RIICO, to cancel the supplementary lease deeds and attendant permissions. This fell squarely within the ambit of Article 138 of the Articles of Association;

I. 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;

J. 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 RIICOs 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;

K. The Appellant Unions and workers are at liberty to approach the Appropriate Government and various judicial forums to pursue their remedies in accordance with law.