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TMI Blog2015 (8) TMI 775X X X X Extracts X X X X X X X X Extracts X X X X ..... , it was mandatory for the Collector at that stage itself to act under sub-Section 5 of Section 89A to issue notice, conduct the necessary enquiry, determine the compensation and pass the order vesting the land in the State Government. It is very clear that Collector has done nothing of the kind. In any case he should have taken the necessary steps in accordance with law at least after receiving the letter dated 16.6.2009. Inspite of the Secretaries repeating their advice, the Minister of Revenue Smt. Anandiben Patel has insisted on treating this case as a special case for which she has recorded no justifiable reasons whatsoever, and orders were issued accordingly. Under Section 89A(3), the Government is the appellate authority where the Collector does not grant a certificate for purchase of bonafide industrial purpose. Thus what has happened, thereby is that the powers of the statutory authority have been exercised by the Government which is an appellate authority. - The Government must defend its action on the basis of the order that it has passed, and it cannot improve its stand by filing subsequent affidavits as laid down by this Court long back in Commissioner of Police, Bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 70 lakhs is permitted by the Government of Gujarat to be sold directly to respondent No.5 at ₹ 1.20 crores to set up an industry which could not have been done legally. It is undoubtedly not a case of loss of hundreds of crores as claimed by the appellants, but certainly a positive case of a loss of a few crores by the public exchequer by not going for public auction of the concerned property. It is true that in a given case the state may invite an entrepreneur and give an offer. However, in the instant case, the sale of the land for industrial purpose is controlled by the statutory provisions, and the State was bound to act as per the requirements of the statute. The minister’s direction as seen from the record clearly indicates an arbitrary exercise of power. The orders passed by the Government cannot therefore be sustained. State could have acquired the land, and then either by auction or by considering the merit of the proposal of respondent No.5 allotted it to respondent No.5. Assuming that the application of the Respondent No 5 was for a bona-fide purpose, the same had to be examined by the industrial commissioner, to begin with, and thereafter it should have gone ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can be permitted to be sold by an agriculturist to another person for industrial purpose provided the proposed user is bona- fide. In the event, the land is not so utilised by such a person for such purpose, within the period as stipulated under the act, the Collector of the concerned district has to make an enquiry under sub-Section 5 thereof, give an opportunity to the purchaser with a view to ascertain the factual situation, and thereafter pass an order that the land shall vest in the State Government on payment of an appropriate compensation to the purchaser which the Collector may determine. It was contended that there was no provision for any further transfer of agricultural land from one industrial purchaser to any third party, once again, for industrial purpose when the first purchaser of agricultural land had defaulted in setting up the industry. Apart from being in breach of the law, the transaction was stated to be against public interest, and a mala-fide one resulting into a serious loss to the public exchequer. The Writ Petition criticised the role of the Collector and the Revenue Minister of the State Government, and sought an inquiry against them in the present case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that thereafter no steps were taken by respondent No.4 to put up any industry on the said land. 6. Five years later, the respondent No.4 is stated to have applied on 6.12.2008 to the Deputy Collector at Bhuj for permission to sell these lands. The Collector of Bhuj sought the guidance from the Revenue Department, and in view of the direction of the Revenue Department, the Deputy Collector granted the permission on 15.1.2010, to sell the lands to respondent No. 5 treating it as a special case, and not to be treated as a precedent. Thereafter, the respondent No.4 conveyed the concerned lands to respondent No.5 by sale deed dated 19.1.2010. Respondent No.5 also obtained permission from the Industries Commissioner on 8.3.2010 for putting up the industry. Subsequently, the Collector issued the certificate as required under Section 89A (3) (c) (i) of the Tenancy Act, 1958, on 21.5.2010, that respondent No.5 had purchased the land for a bona-fide purpose. The permission for a non-agricultural user was given to the respondent No.5 on 5.1.2011. The Gujarat Mineral Development Corporation (GMDC) which got itself impleaded in this appeal as respondent No.6 has entered into a Memorandum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... toxic air of the factory will spoil the plants. 9. All this led the appellants to file the earlier mentioned writ petition, for the reliefs as prayed. The petition enclosed the above referred news reports, as also the information obtained through enquiry under the Right to Information Act, 2005 by one Shri Shashikant Mohanlal Thakker of Madhapur Village of Taluka Bhuj. This information contained the documents incorporating the file notings of the revenue department and the orders granting permission. The aforesaid writ petition was filed on 28.2.2012. An affidavit in reply to the writ petition was filed by above referred Nitin Patel on behalf of respondent No.5, and the appellants filed a rejoinder. Respondent No.5 filed a sur-rejoinder thereto. The respondent No.1 State of Gujarat filed an affidavit in reply on 16.8.2012, and the petitioner filed a rejoinder to the Government s affidavit on 10.11.2012. After the writ petition was filed on 28.2.2012 an order of status-quo was granted on 1.3.2012, and it continued till the dismissal of the petition on 30.8.2012 when the order of stay was vacated. However, when the present SLP was filed, an order of status-quo was granted by this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion (1) of section 65B of the Bombay Land Revenue Code, 1879 (Bom. V of 1879) in favour of any person for use of such land by such person for a bonafides industrial purpose: Provided that- a) the land is not situated within the urban agglomeration as defined in clause (n) of section 2 of the Urban Land (Ceiling and Regulation) Act, 1976 (33 of 1976), b) where the area of the land proposed to be sold exceeds ten hectares, the person to whom the land is proposed to be sold in pursuance of this sub-section shall obtain previous permission of the Industries Commissioner, Gujarat State, or such other officer, as the State Government may, by an order in writing, authorise in this behalf. c) the area of the land proposed to be sold shall not exceed four times the area on which construction for a bonafide industrial purpose is proposed to be made by the purchaser: Provided that any additional land which may be required for pollution control measures or required under any relevant law for the time being in force and certified as such by the relevant authority under that law shall not be taken into account for the purpose of computing four times the area. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial activity on such land within three years from the date of such certificate and commence production of goods or providing of services within five years from such date: Provided that the period of three years or, as the case may be, five years may, on an application made by the purchaser in that behalf, be extended from time to time, by the State Government or such officer, as it may, by an order in writing authorise in this behalf, in such circumstances as may be prescribed. (5) Where the Collector, after making such inquiry as he deems fit and giving the purchaser an opportunity of being heard, comes to a conclusion that the purchaser has failed to commence industrial activity or production of goods or providing of services within the period specified is clause (b) of sub-section (4), or the period extended under the proviso to that clause, the land shall vest in the State Government free from all encumbrances on payment to the purchaser of such compensation as the Collector may determine, having regard to the price paid by the purchaser and such land shall be disposed of by the State Government, having regard to the use of land. The pleadings of the parties b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by Mr. Nitin Patel on 11.7.2009. In this reply he principally submitted that it was not correct to say that the land was being given away at a throwaway price, causing great loss to the public exchequer to the tune of ₹ 250 crores, as alleged. The State Authorities and the Revenue Minister have not acted in violation of any mandatory provisions of law. The affidavit further narrated the various events in the matter leading to the sale deed dated 19.1.2010 by Indigold in favour of Alumina, and the permission of the Industries Commissioner dated 8.3.2010. It was also pointed out that permission had been granted by the Collector, Bhuj on 5.1.2011. Thereafter, it was contended that the land has been purchased by the respondent No.5 way back in January 2010, and the petition, making frivolous and baseless allegations, has been filed two years after the said transaction. 13. Then, it was pointed out that the respondent No.5 was incorporated under the Companies Act in the year 2008, and that the company is promoted by Earth Refining Company Pvt. Limited. Respondent No.5 wanted to manufacture high value added products from bauxite ore available in Kutch district which ore was c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere would have been a loss to the public exchequer. Thereafter, it was stated in paragraph 4 of the reply as follows:- I further respectfully say that the action of the State Government was bonafide and taking into consideration all the aspects of the matter, viz. (i) the land is being used for the industrial purpose, (ii) a dire need for industrialization in the Kutch District; (iii) MoU arrived at during the Vibrant Summit, 2009, whereby, a ready and interested party was available to start the industry immediately on the land in question; and (iv) GMDC possessing 26% of the share in such interested party, i.e. M/s Alumina Refinery Pvt. Ltd. It is relevant to note that no reply was filed on behalf of Indigold. Additional pleadings of the parties in this Court:- 16. As far as this Court is concerned, a counter affidavit was filed on behalf of the State Government by one Mr. Ajay Bhatt, Under Secretary, Land Reforms. In his reply, he stated that in any event in the present process the State is the beneficiary in permitting this transaction with GMDC which is a Government Undertaking. It will have 26% stock in respondent No.5. In paragraph 4(E)(e)(ii) he stated that si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n its application it has stated that Alumina was selected through transparent evaluation. Then, it was short-listed for setting up the project in Kutch at the Vibrant Gujarat Summit in 2009. It also defended the Government s decision on the ground that it is going to have 26% equity in respondent No.5. Points for consideration before this Court: 20. It, therefore, becomes necessary for this Court to examine whether the decision taken by the Government to permit the transfer of the agricultural land from respondent No. 4 to respondent No. 5, was legal and justified. For that purpose one may have to consider the developments in this matter chronologically as disclosed from the above pleadings of the parties, as well as from the material available from the Government files placed for the perusal of the Court. Thereafter, one will have to see the scheme underlying Sections 89 and 89A, and then examine whether there has been any breach thereof, and if it is so what should be the order in the present case? Material on record and the material disclosed from the files of the Government and the Collector:- 21. The respondents have contended that the sale transaction between re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to sell the particular land. This letter is seen in the file of the Collector. This letter reads as follows:- INDIGOLD REFINERIES LIMITED 6th December 2008 To, Collector of Kutch, Bhuj, State of Gujarat Sub:- Permission for the sale of agricultural land admeasuring 39 acres 25 gunthas at Moti Reladi Kukama, Taluka Bhuj, District Kutch, State of Gujarat. Dear Sir, Reference to above, we have to respectfully inform your good self that we had purchased land as per details here below for setting up of Industrial project:- Sr.no. Name of Village Survey No. Measurement Acres and gunthas 1. Kukama 94/1 4/14 2. Kukama 94/2 2/16 3. Moti Reladi 101/1 9/30 4. 106 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... approached them with their representation dated 18.6.2009. It had inked an MOU during the Vibrant Gujarat Global Summit for establishing an Alumina Refinery, and they had identified a land suitable for that purpose. This letter further stated: On verification of the issue, necessary action may kindly be taken at the earliest. In the meantime, a brief note indicating the possible course of action may please be sent to this office. 24. In view of this note from the Secretary to the Chief Minister, the Revenue Department sought the factual report from the Collector by their letter dated 6.7.2009. What we find however, is that instead of sending a factual report, the Collector fowarded the original proposal of respondent No.5 itself to the Department, and sought their decision thereon in favour of Alumina through his letter dated 31.7.2009. Thereafter, we have the note dated 7.8.2009 in the Government file which is signed by then Section Officer and Under Secretary, Land Revenue. This note refers to the fact that a letter dated 2.7.2009 had been received from the Secretary to the Chief Minister. Thereafter, a letter dated 31.7.2009 had been received from the Collector, Kutc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by this office. Therefore, proposal of the Collector be sent back. Submitted respectfully (emphasis supplied) 26. Since, the Secretary of the Hon ble Chief Minister had sought a note indicating the possible course of action, the Deputy Secretary, Land Revenue made a note on 25.8.2009, and at the end thereof, he stated as follows:- .. Under these circumstances, looking to legal provisions, there is a provision that either the company carries out the industrial activity or the State Government resumes the land. There is no provision for mutual transfer by the parties. As suggested by the Secretary to the Hon ble C.M., note indicating the above position be sent separately. 27. A note was, thereafter, made by the Principal Secretary, Land Revenue, which recorded that as per existing policy such sale was not permissible. In para 2 of his note he stated: as per rules, the land is to be resumed by Collector in case of failure to utilize for industrial use . In para 5 thereof he however suggested that in such case, as in cases under the Land Acquisition Act, 50% of the unearned income being required to be charged by the State Government can be i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation from the State Government to the Collector dated 18.12.2009 that the Government had granted the necessary permission to respondent No.5 to purchase the land, treating it as a special case. The said letter reads as follows:- Urgent/RPAD Sr. No.: GNT/2809/2126/Z State of Gujarat Revenue Department 11/3 Sardar Bhavan Sachivalay Gandhinagar Date: 18/12/2009 To, The Collector Kutch-Bhuj Subject: Shri Nitin Patel c/o M/s Indigold Refinery/Alumina Representation qua the land of Kukma and Moti Reldi Reference: Your letter dated 31/9/09 bearing no. PKA-3- Land- Vs. 2083/2009 Sir, In connection with your above referred and subject letter, the land of Kukma and Moti Reldi admeasuring Acre 39 Guntha 25 was purchased by Indigold Refinery as per the provisions of Bombay Tenancy and Agricultural Lands (Vidharbha Region and Kutch Area) Act, 1958; Section 89. However due to financial incapability, the Company is unable to establish industry and other company M/s Alumina Refinery Pvt. Ltd. being ready to purchase the said land, upon careful consideration the Government on the basis of treating the case as A special case and not to be treated as pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.19 Total 39.25 In the above lands as the company due to financial circumstances is not in a position to establish any industry, with reference to your application dated 06/12/2008 seeking the permission for sale of the above land for industrial purpose to Shri Alumina Refinery (Pvt.) Limited, Mumbai for the Alumina Refinery project, vide the above referred letter of the R.D. of the Government as a special case and with a condition not to treat as the precedent the permission is granted, which may be noted. As the above land is admeasuring more than 25 Acres, in this case on submission of the Project Report and the Technical recommendation letter of Industries Commissioner, G.S., Gandhinagar by the party desirous to purchase the land Alumina Refinery (Pvt.) Ltd., Mumbai, further action can be taken by this office for issuing the certificate under Section-89 of the Tenancy Act, which may be noted. Sd/- Deputy Collector, Bhuj Copy to Alumina Refinery (Pvt.) Ltd. 1501-1502 Shiv Shankar Plaza- Near HDFC Bank, Sector-8 Airoli, New Mumbai-400 70 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It was submitted that in the instant case the state itself has issued an order in violation of the law. 33. It was then submitted that the Collector was expected to dispose of the land by holding an auction. The judgment of this court in Centre for Public Interest Litigation and Ors. Vs. Union of India and Ors. reported in 2012 (3) SCC 1 was relied upon in support, wherein it has been held that natural resources are national assets and the state acts as trustee on behalf of its people. Public Interest requires that the disposal of the natural resources must be by a fair, transparent and equitable process such as an auction. The same having not been done, the State exchequer has suffered. Reliance was also placed on the judgment in Noida Entrepreneurs Association Vs. Noida and ors. reported in 2011 (6) SCC 508 to submit that whatever is provided by law to be done cannot be defeated by an indirect and circuitous contrivance. 34. In the instant case, the transfer of the land has been permitted because respondent No. 5 directly approached the Chief Minister and thereafter the Revenue Minister. It was submitted that such an act of making of a special case smacks of arbitrariness. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvestment having been made is untenable. As far as the objection to the appellant No 1 being a person belonging to a rival political party is concerned, he submitted that he has specifically accepted that he is a political activist. In any case, he submitted that the Collector did not act in accordance with law at any point of time. Similarly, the order passed by the Government is not a reasoned order and is undoubtedly arbitrary. The power in the Collector implied a duty in him to act in accordance with law. He relied upon a judgment of this Court in Deewan Singh Ors. Vs. Rajendra Pd. Ardevi Ors. reported in 2007 (10) SCC 528 in this behalf. Submissions on behalf of the State Government:- 36 . The defence of the Government has principally been that because Indigold was not in a position to set up the industry, and Alumina had given a proposal in the Vibrant Gujarat summit to set up its project on the very land, the proposal was accepted. It had entered into an MOU with GMDC which was to have 26% equity therein. While looking into the proposal, initially there was some hesitation on the part of the Government as can be seen from the notings of the officers in the Govern ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... :- 38. Since it was the respondent No.4 Indigold, which had initially purchased the land for industrial purpose, the stand of Indigold was of significance. It is, however, very relevant to note that Indigold had neither filed any affidavit in the High Court, nor in this Court, and their counsel Mr. Trivedi stated that he has no submissions to make. It is the failure of the respondent No. 4 to set up the industry, and the subsequent justification on the basis of financial difficulties for the same which has led to the sale of the land. It is strange that such a party had nothing to state before the Court. This is probably because it had already received its price after selling the land. The respondent No. 4 appeared to be very much disinterested in as much as even the sale documents were signed on their behalf by Mr. Nitin Patel, the Managing Director of Alumina. Mr. Ahmadi, learned counsel for the appellant therefore alleged collusion amongst all concerned. 39. The respondent No. 5, however, contested the matter vigorously. Mr. Krishnan Venugopal, learned senior counsel appearing for respondent No. 5 pointed out that the respondent No. 5 had entered into a correspondence with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... There is nothing wrong if the Minister directs the transfer of the unutilized land of respondent No. 4 to respondent No. 5 for industrial purpose, and this should be accepted as permissible. The minister s action cannot be called malafide since it is in the interest of the industrial development of the State. Mr. Krishnan Venugopal submitted that the right to transfer is incidental to the right of ownership, and relied upon paragraph 36 of the judgment of this Court in DLF Qutab Enclave Complex Educational Charitable Trust Vs. State of Haryana and Ors. reported in 2003 (5) SCC 622. He further submitted that unless the possession of the unutilized area is taken over by the State, the landlord s title to it is not extinguished. There is no automatic vesting of land in the instant case. He relied upon the judgment of this Court in Ujjagar Singh Vs. Collector reported in 1996 (5) SCC 14 in this behalf. 42. It was then submitted that notings cannot be made a basis for an inference of extraneous consideration, and reliance was placed upon the observations of this Court in paragraph 35 in Jasbir Singh Chhabra Vs. State of Punjab reported in 2010 (4) SCC 192. He pointed out that the law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also to pay ₹ 1.20 crores as compensation to Indigold, the loss to the State would come to ₹ 3.15 crores. He submitted that if it comes to that, the respondent No. 5, alongwith Indigold, could be asked to compensate the state for this difference of 3.15 crores or such other amount as may be directed, but its project must not be made to suffer. 44. GMDC was represented by learned senior counsel Mr. Giri. He defended the action of the State as something in furtherance of the industrial policy of the State. If the land was to be sold and compensation was to be given, it may not have resulted into much benefit to the state. He relied upon Section 7 of the Transfer of Property Act, to submit that every person competent to contract, and entitled to transferable property can transfer such property, and under S 10 of the said Act any condition restraining alienation was void. He relied on paragraph 20 of the judgment in Prakash Amichand Shah Vs. State of Gujarat reported in 1986 (1) SCC 581, to submit that divesting of title takes place only statutorily, and which had not happened in the instant case. Examination of the Scheme underlying Sections 89 and 89A above:- 45. B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssion of the Industries Commissioner of the State is to be obtained where the area of the land proposed to be sold exceeds ten hectares, (iii) The land proposed to be sold shall not exceed four times the area on which the construction of the industry is to be put up excluding the additional land for pollution measures, (iv) If the land belongs to a tribal, it shall be subjected to certain additional restrictions, (v) Within 30 days the purchaser has to inform the Collector of such purchase failing which he is liable to a fine, (vi) The Collector has thereafter to make an enquiry whether the land is purchased for a bonafide industrial purpose and issue a certificate to that effect. In case he is not satisfied of the bonafide industrial purpose, he has to hear the purchaser, and thereafter he may refuse issuance of such certificate against which an appeal lies to the State Government. (vii) Lastly, the purchaser has to commence the industrial activity within three years from the date of certificate, and start the production of goods and services within five years from the date of issuance of certificate. 47. Where the purchaser fails to start the industrial activity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... btain, to begin with, a previous permission of the Industries Commissioner before any such sale can be given effect to. Thereafter, the purchaser has to send a notice to the Collector within 30 days of the purchase, and the Collector has to be satisfied that the land has been validly purchased for a bonafide industrial purpose, in conformity with the provisions of sub-section (1), and then issue a certificate to that effect. There is a further requirement that the purchaser has to commence the industrial activity within three years, and has to start the production within five years from the date of issuance of the certificate. Admittedly no such steps were taken by Indigold, nor was any affidavit in reply filed by them, either before the High Court or before this Court. Mr. Trivedi, learned counsel, appeared for Indigold, and he was specifically asked as to what were the attempts that had been made by respondent No.4 to set up the industry, and what were the difficulties faced by it. He was asked as to whether there was any material in support of the following statement made in Indigold s letter dated 16.6.2009 i.e. we have tried our level best to set up the industry on the land i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n their favour. 51. After writing to the Collector on 16.6.2009, without waiting for any communication from him, Alumina wrote to the Chief Minister on 18.6.2009. Directors of Alumina had a meeting with the Minister of Revenue Smt. Anandiben Patel on 29.6.2009, which was recorded by Mr. Nitin Patel on 30.6.2009. The Chief Minister s Secretary wrote to the Principal Secretary, Revenue Department on 2.7.2009 seeking a note on the possible course of action. The Revenue Department sought a factual report from the Collector, who instead of furnishing the same, forwarded the proposal of Alumina itself to the Department for granting the permission for the sale. The Department looked into the statutory provisions, and then recorded on 7.8.2009 that the Collector is required to take an action at his level in the matter, and the proposal be sent back to him. After looking into the legal position, the Principal Secretary, Revenue Department and the Chief Secretary of the State wrote that the land be taken back, and thereafter the issue of allotment be examined separately. 52. The matter could have rested at that, but the Minister of Revenue put a remark that permission be granted as a s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... plained in paragraph 8 of State of U.P. Vs. Singhara Singh by a bench of three Judges reported in AIR 1964 SC 358 in the following words:- 8. The rule adopted in Taylor v. Taylor is well recognised and is founded on sound principle. Its result is that if a statute has conferred a power to do an act and has laid down the method in which that power has to be exercised, it necessarily prohibits the doing of the act in any other manner than that which has been prescribed. The principle behind the rule is that if this were not so, the statutory provision might as well not have been enacted . This proposition has been later on reiterated in Chandra Kishore Jha Vs. Mahavir Prasad reported in 1999 (8) SCC 266, Dhananjaya Reddy Vs. State of Karnataka reported in 2001 (4) SCC 9 and Gujarat Urja Vikas Nigam Limited vs. Essar Power Limited reported in 2008 (4) SCC 755. 54. (i) Therefore, when Indigold informed the Collector on 6.12.2008 that they were no more interested to put up any industrial project, and were disposing of the entire piece of land to their prospective client, the Collector was expected to hold the necessary enquiry. This was the minimum that he was expected to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owers of the statutory authority have been exercised by the Government which is an appellate authority. 56. The State Government gave three additional reasons when it defended its decision. (i)The first reason was that if the land had been directed to be vested in the State Government, State would have been required to pay compensation to Indigold, and it would have been a long- drawn process for determining the valuation of the land, and thereafter for finding the suitable and interested party to set up an industry. As stated earlier, this plea is not tenable. If the law requires something to be done in a particular manner, it has got to be done in that way and by no other different manner. (ii) The second reason given was that the action was in State s own interest because through its public sector undertaking i.e. GMDC, it was involved in the transaction viz. that is it is going to have 26% equity. As far as this part is concerned again it is difficult to accept this reason also because one does not know what will be the value of shares of the new company. (iii) Third reason given was that the land was worth ₹ 4.35 crores as per the Jantri in 2008, and as per the revise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... him under the first proviso to Section 89(1) read with condition no. (4) of the permission dated 1.5.2003 granted to Indigold to purchase the concerned lands. In the absence of any of these factors being mentioned in the previous orders, it is clear that they are being pressed into service as an after- thought. The Government can not be allowed to improve its stand in such a manner with the aid of affidavits. 58. As noted earlier, the State Government is an Appellate Authority under sub-section 3 of Section 89A, and it could not have given a direction to the Collector who was supposed to take the decision under his own authority. We may profitably refer to a judgment of a Constitutional Bench in State of Punjay vs. Hari Kishan reported in AIR 1966 SC 1081. In that matter, the respondent desired to construct a cinema at Jhajhar. He submitted an application and under the orders of the State Government all applications were directed to be referred to the State Government. Therefore, though his application was initially accepted, the SDO informed him that the application was rejected. He appealed to the State Government and the appeal was rejected which has led to the petition i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the agricultural land that the bar against conversion is created under Section 89. Thereafter, as an exception, only a bonafide use for industrial purpose is permissible under section 89A. Ownership of respondent No.4 was subject to the conditions of utilization for bonafide industrial purpose, and it was clear on record that respondent No.4 had failed to utilize the land for bonafide industrial purpose. The reliance on Sections 7 and 10 of the Transfer of Property Act is also misconceived in the present case, since the Tenancy Act is a welfare enactment, enacted for the protection of the agriculturists. It is a special statute and the sale of agricultural land permitted under this statue will have to be held as governed by the conditions prescribed under the statute itself. The special provisions made in the Tenancy Act will therefore prevail over those in the Transfer of Property Act to that extent. 61. Besides, the present case is clearly a case of dictation by the State Government to the Collector. As observed by Wade and Forsyth in Tenth Edition of Administrative Law:- if the minister s intervention is in fact the effective cause, and if the power to act belongs to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for ₹ 70 lakhs is permitted by the Government of Gujarat to be sold directly to respondent No.5 at ₹ 1.20 crores to set up an industry which could not have been done legally. It is undoubtedly not a case of loss of hundreds of crores as claimed by the appellants, but certainly a positive case of a loss of a few crores by the public exchequer by not going for public auction of the concerned property. It is true as pointed out by Mr. Venugopal, learned senior counsel that in a given case the state may invite an entrepreneur and give an offer. However, in the instant case, the sale of the land for industrial purpose is controlled by the statutory provisions, and the State was bound to act as per the requirements of the statute. The minister s direction as seen from the record clearly indicates an arbitrary exercise of power. The orders passed by the Government cannot therefore be sustained. As seen earlier, there is neither a power nor a justification to make any special case, in favour of the Respondent No 5. Such exceptions may open floodgates for similar applications and orders, even though the Gujarat Government is contending that this order is purportedly not to be t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n is taking place, the industry has not developed sufficiently, and large part of our population is still required to depend on agriculture for sustenance. Lands are, therefore, required to be retained for agricultural purposes. They are also required to be protected from the damage of industrial pollution. Bonafide industrial activity may mean good income to the entrepreneurs, but it should also result into good employment and revenue to the State, causing least pollution and damage to the environment and adjoining agriculturists. While granting the permission under Section 89A (5) the Collector has to examine all these aspects. This is because the only other exception for conversion of agricultural lands to non-agricultural purpose is for those lands which are in an industrial zone. As far as the conversion of lands otherwise than those in the industrial zone is concerned, all the aforesaid precautions are required to be taken when a decision is to be arrived at as to whether the application is for a bonafide industrial purpose. In the instant case, there were newspaper reports of apprehensions and protest of the adjoining farmers. The Revenue Secretary and the Chief Secretary ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayment of appropriate compensation to the purchaser as the Collector may determine. In the instant case, there is no need of having this determination, for the reason that Indigold has received from Alumina ₹ 1.20 crores as against the amount of 70 lakhs, which it had paid to the agriculturists when it bought those lands in 2003. Neither Indigold nor Alumina is making any grievance towards this figure or the payment thereof. In fact, it is the case of both of them that the direct sale by Indigold to Alumina for this amount as permitted by the State Government be held valid. That being so, this amount of ₹ 1.20 crores would be set-off towards the compensation which would be payable by the State Government to the purchaser Indigold, since the land was originally purchased by Indigold, and is now to vest in the State Government. (iii) The third step in this regard is that the land is to be disposed off by the State Government, having regard to the use of the land. The land was supposed to be used for the industrial activity on the basis of the utilization of bauxite found in Kutch, and respondent No. 5 has proposed a plant based on use of bauxite. The disposal of the la ..... X X X X Extracts X X X X X X X X Extracts X X X X
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