The Hon'Ble Lieutenant Governor And ORS. v. M/S Sagar Engineering Industries

IN THE HIGH COURT AT CALCUTTA

[ CIRCUIT BENCH AT PORT BLAIR ] *** MA/15/2022 IA No.CAN/2/2022 The Hon'ble Lieutenant Governor and others Vs M/s Sagar Engineering Industries Mr.Shatadru Chakraborty Mr. Dibesh Dwivedi ... for the appellants Mr.Gopala Binnu Kumar ...

for the respondents November 17, 2023 [SR] Item No.6 1.

The appeal is at the instance of the Administration assailing an order passed on 18th August, 2022 by the learned Single Judge in a writ petition in which it was alleged that the writ petitioner was thrown out illegally and forcibly. 2.

Briefly stated, one S.Babu applied for an industrial plot in the year 1992 for setting up unit of manufacturing bakery machineries and steel furniture. On the basis of such request, a lease agreement was executed on 9th November, 1992 with a renewal clause and the lease agreement was renewed lastly on 5th September, 2015 for the period from 2013 to 2018. 3.

During the aforesaid period, admittedly S.Babu has entered into a partnership agreement executed on 01.01.2017 and registered on 20th April, 2017 without obtaining any prior permission from the authority concerned. However, Mr. S.Babu made a communication to the Director of Industries, Port Blair on 29th December, 2017 intimating the change in constitution of firm from Proprietorship to partnership. A

request was made to amend the registration after recording the change in the constitution of the unit from proprietorship to partnership. This was followed by reminder on 10th May, 2019. However, no application was filed for renewal of the lease deed that was expired on 9th January, 2018. The subsequent intimation was after the period of lease expired. 4.

It appears that the Administration did not accept the constitution and issue a show cause notice on 9th May, 2019 proposing to cancellation of the industrial plot for nonutilization of plot for which it was allotted and for violating the terms and conditions of allotment order and agreement executed by S.Babu.

5.

In answer to the show cause, a very short reply was given, by one of the partners instead of Mr.S.Babu stating that the unit was undertaking some sub contract works at Coast Guard and Naval Jetty for which the unit was closed during inspection. The reply was found to be unsatisfactory resulted in cancellation Order No.1198 dated 26.09.2019. 6.

Thereafter, on 3rd October, 2019, a representation was made on behalf of the Sagar Engineering Industries Limited for reconsideration of the cancellation order with the prayer to renewal for a further period with the required amendments to continue with the operation so as to enable it to provide employment to the existing manpower.

7.

The said representation was rejected by an order dated 12.12.2019 and the petitioner was requested to hand over the

plot peacefully within 15 days on issue of the notice failing which the plot will be taken over forcibly by the department. 8.

The petitioner made further representation on 24.12.2019 requesting the Administration to re-consider the decision for cancellation. This was, however, not favourably considered and the Administration has taken over the possession of the property by dispossessing the writ petitioner. 9.

The learned counsel for the appellants submits that in view of the fact that the lease has expired and admittedly, there is a breach of terms and conditions, the administration was justified in taking over the possession of the property in question after giving sufficient notices.

10.

It is submitted that in view of the fact that the Administration has never accepted the constitution of the partnership firm and that Mr.S.Babu had expired in the meantime, the question of any arbitration of the dispute alleged cannot be continued.

11.

Mr. Gopala Binnu Kumar, learned counsel appearing on behalf of the writ petitioner has submitted that there is no prohibition clause in the lease agreement by which Mr.S.Babu was prevented from reconstituting the firm and changing the unit/firm from proprietorship to partnership, in any event, a request was made to the administration for amendment of the registration in view of change in constitution of the firm. It was, thus, incumbent on the Administration to respond favourably to such consideration keeping in mind the nature of the activity and the employment generated by the said unit.

12.

Indisputably Mr. S.Babu did not apply for renewal of the lease after its expiry. The question of renewal of lease would be dependant upon the Administration approving the change in constitution of the firm from proprietorship to partnership. 13.

Presumably Mr.

Babu was awaiting reply from Administration with regard to his prayer for reconstitution of the unit and amendment of the registration. Renewal of lease is essentially a fresh grant.

14.

Although it would have been prudent for S.Babu to obtain a prior permission before the sole proprietorship was converted to the partnership, we feel that the Administration would have considered the case of re-constitution of the firm for a fresh grant of lease subject to the fulfillment of all conditions. It is not possible to hold that the unit was not functional having regard to the several documents including some work orders issued by the government agenceis. 15.

Moreover, a trespasser also cannot be forcibly evicted without following the due process fo law.

16.

While there may not be any requirement for an arbitration as Mr.Babu has expired, we dispose of the appeal by directing the Administration to consider the prayer for grant of fresh lease to the writ petitioner subject to the fulfillment of all conditions within a period of six weeks from the date of communication of this order after giving a reasonable opportunity of hearing to the writ petitioner partnership firm. The administration in deciding the matter

shall take into consideration the earlier lease granted to S.Babu and that Mr. Babu had, during his life time, informed the Administration about the reconstitution of the business and was awaiting approval prior to his death. Moreover, it appears from record that till the possession was taken, the petitioner was executing various works of various government authorities. In fact, the first intimation was made within the lease period.

17.

The authorities shall decide the matter afresh and shall not allot the property to any third party till a decision is taken for renewal of the fresh lease in terms of this order. The padlock put by the Administration shall be removed upon an inventory being made by the Administration in presence of the partners and/or duly authorized representative of the partnership firm. This direction shall be implemented on or before 21st November, 2023.

18.

Till the authority takes a final decision, the writ petitioner shall be allowed to remain in possession in the property. This order however shall not create any equity in its favour. It is needless to mention that in the event renewal is not allowed in favour of the petitioner, the authority shall take possession of the property within a period of seven days from the date of communication of this order.

19.

The petitioner shall be obliged to hand over the possession to the authorities concerned within the aforesaid period in case fresh lease is not granted to the petitioner. 20.

The impugned order is thus modified.

21.

The appeal and connected application are disposed of with the above terms.

22.

Urgent photostat certified copy of this order, if applied for, be supplied to the parties upon compliance of usual formalities.

( Soumen Sen, J. ) ( Siddhartha Roy Chowdhury, J. )