Summary
An allottee of an industrial plot in Udyog Vihar, Gurgaon took possession in December 1995 under an agreement requiring construction within six months and production within two years, but took no step towards setting up its unit; after three show-cause notices the Haryana State Industrial Development Corporation resumed the plot in September 1998. The District Forum and State Commission ordered restoration, but the National Commission on remand upheld the resumption. The Supreme Court dismissed the allottee's appeals: clause 6 of the agreement is a valid condition under Sections 31 and 32 of the Transfer of Property Act as held in Indu Kakkar, the allottee was evidently speculating on the plot, and Hari Om Enterprises is distinguishable; the Corporation was directed to refund Rs. 1,66,425 with six per cent interest from the date of resumption.
Issues
- Whether resumption of an industrial plot for failure to construct and commence production within the period stipulated in the allotment agreement was justified, and whether the allottee was denied a fair opportunity before resumption.
Provisions considered
- Sections 11, 31 and 32, Transfer of Property Act, 1882Following Indu Kakkar, a condition that the interest in an allotted plot shall cease if the industrial unit is not set up within a specified period is valid, since no absolute interest was created and such a conditional limitation is permitted by Section 31. (¶ 19)
- Clause 6 and clause 4(iii), Agreement of allotment dated 27.10.1995 with HSIDCConstruction was to start within six months and production to commence within two years of possession after building at least 25 per cent of the permissible area, failing which the plot was liable to be resumed; extension was available on payment of fee for reasons beyond the allottee's control, but none was shown. (¶¶ 13, 16, 17, 18)
Held
- Industrial estates are developed to promote economic growth and employment, and allotment follows appraisal of the project; the allottee's plea of absent infrastructure was unsupported by any plan for a factory, application for approval, procurement of machinery or tax registration, and after three show-cause notices it showed no urgency, compelling the inference that it never intended to set up the unit and sought to speculate on the plot. Hari Om Enterprises, where the unit was actually completed before resumption, does not assist. (¶¶ 13, 18, 20, 21, 22)
- Though the allottee would ordinarily be entitled only to refund of the amount paid, since the cheque was returned and the Corporation enjoyed the money for years, the sum of Rs. 1,66,425 is to be refunded with interest at six per cent per annum from 18.09.1998 within six weeks. (¶ 23)
Result
Appeals dismissed without costs; National Consumer Disputes Redressal Commission orders dated 11.01.2007 and 07.11.2008 upholding resumption of Plot No. 182-M, Udyog Vihar Phase IV, Gurgaon affirmed; HSIDC directed to refund Rs. 1,66,425 with 6 per cent interest from 18.09.1998 within six weeks.