2014 (10) TMI 837 - HC - Customs

Units in SEEPZ - Renewal of permission for setting up an industrial unit for development of computer software and services - It is contended that Units shall not require approval under the Special Economic Zones Act, 2005 - Held that - In the present circumstances and when it is conceded that after five years there is neither a valid letter of approval nor a valid and binding tenancy agreement then, we do not see any legal right in the Petitioners. Their continued occupation and use of the premises will not enable us to exercise our plenary powers and issue prerogative writs. The jurisdiction of this Court under Article 226 of the Constitution of India is extraordinary, discretionary and equitable. The Unit is not eligible for extension of letter of approval based only on their performance but on satisfaction of the other relevant factors such as encouragement to varied industries or Units, the requirement of space so as to accommodate different or distinct nature of activities, making the Zone broad based and truly representative in character by not allowing certain type of Units to set up their business - The Petitioners use and occupation has been termed as unauthorised and illegal. The initial letter of approval expired by its own force in 2001. Thereafter, beyond some correspondence there is nothing emanating from the authorities which would enable the Petitioners to argue and successfully that a letter of approval has been issued in their favour and the lease agreement must therefore follow. In such circumstances, we cannot utilize writ jurisdiction to force the authorities to pass any orders on the representation made by the Petitioners and to extend the letter of approval or to grant any fresh approval. That the authorities have not taken any decision on the pending Applications does not mean that the Petitioners can invoke the principle in Bharat Steel Tubes Ltd. 1988 (5) TMI 335 - SUPREME COURT OF INDIA either. There the issue was of assessment under Sales Tax Act namely the Punjab General Sales Tax Act, 1948. The returns were filed by the Assessee and those were not processed or assessed and that is how the Supreme Court held that in the absence of any prescribed period of limitation the assessment has to be completed within a reasonable period. This principle cannot be invoked or applied in the present case. - Decided against the petitioners.

Issues Involved:
1. Invocation of Article 226 jurisdiction.
2. Validity and renewal of the letter of approval.
3. Legal right to continue occupation of the premises.
4. Discretionary and equitable relief.
5. Public property management and allotment.
6. Application of the principle of reasonable period for decision-making.

Issue-wise Detailed Analysis:

1. Invocation of Article 226 Jurisdiction:
The court emphasized that invoking Article 226 of the Constitution requires satisfying essential prerequisites, including establishing a legal or constitutional right. The court criticized the tendency to treat the High Court as a drop box for applications without establishing such rights. The court cited the Supreme Court's stance in C. Jacob v. Director of Geology & Mining, emphasizing that writ jurisdiction is not to be invoked for directing consideration of stale or barred claims.

2. Validity and Renewal of the Letter of Approval:
The petitioners were initially granted approval for setting up an industrial unit for computer software development in 1995, valid for one year. The approval was subject to renewal, and the petitioners executed a tenancy agreement valid for five years. The petitioners argued that under the Special Economic Zones Act, 2005, their unit should be deemed approved without further applications. However, the court noted that the approval and tenancy agreement expired, and no renewal was granted. The court held that the Development Commissioner has discretion in renewing approvals and is not obligated to do so.

3. Legal Right to Continue Occupation of the Premises:
The court found no legal right for the petitioners to continue occupying the premises after the expiry of the initial approval and tenancy agreement. The court emphasized that continued occupation does not create any legal rights, especially in public property. The petitioners' reliance on pending applications and annual performance reports did not establish a right to continue using the premises.

4. Discretionary and Equitable Relief:
The court highlighted that writ jurisdiction is extraordinary, discretionary, and equitable. The court found no basis for granting relief to the petitioners, as they failed to establish any legal right to the premises. The court cited the Supreme Court's principles in The Rajasthan State Industrial Development and Investment Corporation v. Diamond and Gem Development Corporation, emphasizing that mandamus cannot create or establish a legal right but only enforce an existing one.

5. Public Property Management and Allotment:
The court stressed that public property must be dealt with transparently and equitably, ensuring public participation. The court rejected the notion that inaction by authorities could create rights in public property. The court cited Akhil Bhartiya Upbhokta Congress v. State of Madhya Pradesh, emphasizing that governmental actions must be reasonable, in public interest, and not benefit private parties at the state's expense.

6. Application of the Principle of Reasonable Period for Decision-making:
The petitioners relied on Bharat Steel Tools Limited v. State of Haryana to argue that applications should be decided within a reasonable time. However, the court found this principle inapplicable, as the issue in Bharat Steel Tools was related to assessments under the Sales Tax Act, not the renewal of approvals for industrial units. The court concluded that the petitioners' continued occupation of the premises without valid approval or tenancy agreement did not warrant the exercise of writ jurisdiction.

Conclusion:
The court dismissed the writ petition, finding no legal or constitutional right for the petitioners to invoke writ jurisdiction. The court refused to continue the ad-interim order and emphasized that public property management must adhere to principles of transparency, public interest, and non-arbitrariness.

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